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Ashley:
This is Real Estate Rookie episode 234.

Britt:
In order to raise money, in order to do those type of things, people have to like, know, and trust you. So a great way to build that trust and likability and get to know the people is through posting very consistently on Instagram. What that translated to for me was over $10 million in capital raised through my social media platforms for my projects.

Ashley:
My name is Ashley Kehr and I am here with my cohost Tony Robinson.

Tony:
And welcome to the Real Estate Rookie Podcast, where every week, twice a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. And we’d like to start these episodes by shouting out folks in our Ricky audience. And today’s review comes from Azari E. And Azari says, “This is a must listen podcast. It’s my go-to for keeping my mind focused on real estate investing. The episodes are filled with digestible bits of information, fantastic guides on how to invest in relatable stories from other real estate investors at all levels. The hosts are authentic and super pleasant to listen to, and I listen to them on my runs making both of them super enjoyable.” Azari, I appreciate that, especially the part about the hosts are super enjoyable to listen to because there’ve been quite a few other reviews that have said quite the opposite. So I appreciate you, brother. But hey, if you guys haven’t yet, leave a five star review on whatever platform it is you’re listening to.

Ashley:
Yeah, thank you guys so much for those of you that have left reviews. We really appreciate it.

Tony:
We should maybe do that during BP CON where we just read all the mean reviews that have come in.

Ashley:
Like Jimmy Fallon Mean Tweets.

Tony:
Yeah, like the Mean Tweets because we got a lot of them. There’s enough for us to get through a few.

Ashley:
We do talk about crying at the end of this episode. It might not make me cry.

Tony:
But we’re here live at BP CON. This is I think our second episode we’ve recorded since we’ve been here. This one was super impromptu. We’re just sitting down here in a little media room and then a very special guest walks in and we’re like, “You haven’t been on the Rookie show yet. We got to change that right now.” So within five minutes we start recording this episode.

Ashley:
This is a real estate superstar that is coming on. She started out doing DIYs at the age of 18, buying properties, fixing them up and then renting them out. And since then, has transitioned to raising money for self storage.

Tony:
So today’s super special guest is the one and only Investor Girl Britt. She’s insta famous. She’s crushed it into real estate. And we brought her on some, to hear her story, but more so to talk about how she focused on building her platform early on, the impact it’s had on her business and what she would do today if she had to start all over in building that platform.

Ashley:
And more specifically, how it actually connects with you guys as rookies, why you should be doing it now, not having any experience, maybe just starting to learn about real estate and how you can actually add value to other people because of that.

Tony:
We also talk about how a case of food poisoning changed her life forever for the better. So make sure to listen for that part.

Ashley:
Before we bring on our special guest today, we do want to address a rookie reply question. So this question comes from JP Bailey and was posted in the Real Estate Rookie Facebook group. Today’s question is, “How do you network and partner with more experienced investors when you feel you have nothing to add value? I’m aware that this might just be me being too hard on myself.” Tony, I think this is actually a great question and very relatable to a lot of people.

Tony:
Totally. Even for me, Ashley, when I think about the investors that are more experienced than me, a lot of times I have to question myself and say, what value can I add? I do remember being a rookie with zero deals and that is a very real feeling. But I think there’s a few things, JP, that you can look at. So even if you have no deals, do you have time? Time is one of the most constrained resources that a lot of other successful investors lack. So if you can just bring an abundance of time to help them do the things that maybe they don’t have the time to do, that’s a tremendous way to provide value. So for example, say that you want to work with someone that’s an experienced flipper and maybe they don’t have the time to run to Home Depot to get supplies, or maybe they don’t have time to cold call people to try and get more leads, or maybe they don’t have time to… There’s so many different things going on in that business that are important, but not necessarily the best use of that investor’s time.
So if you just have time, that’s a great way I think for you to add value. And then another thing is ability. So even if you don’t necessarily have experience flipping homes, do you have experience maybe creating systems and processes? Maybe you can be the person that at the beginning of every job you walk the property with the crew and you create the scope of work in the budget. Or maybe it’s your duties to look at all the comparable properties that have sold recently. And you use that to create the scope of work. There’s so many things that go into creating a successful real estate project where even if you don’t necessarily have experience in real estate, but you have experience with other skills, you can still provide value to someone that’s more experienced than you are.

Ashley:
I think that our guest that we’re bringing on today will relate to this even more. So we’re bringing on, as we mentioned in the intro, Investor Girl Britt, and she actually talks about how she has partnered with AJ Osborne, the king himself of self storage. I mean if you think self storage, you think AJ Osborne. She also had that kind of limited mindset about herself as to wow, he’s this huge investor and I’m just burring these $30,000 houses in nowhere Canada. But she talks about how she did add value and she found a way that something he didn’t have. But as far as the networking piece, and not even trying to partner with someone but to network with them and make that connection. People really like to talk about themselves. So find something that that person is interested in and start talking about it with them, asking them questions about it.
Investors are probably tired of answering the same questions over and over, and they won’t get that light inside, that won’t spark a fire inside of them talking about those same things. But if you can find something that maybe they don’t get to talk about a lot that they really love and really enjoy and make a connection that way and build almost like a friendship before you even get into the real estate side. Tyler Madden, I feel like that is his superpower. An investor out of Denver. He’s really good at that, is finding out what people are interested in becoming friends with them or making that connection before it’s even talking business. How can we each add value to each other? Or things like that. So it’s just really think about just social skills in general.
Like dating. Okay, if you’re going to date someone, you’re going to try and find out what they’re interested in. You’re not going to be right away. “Okay, let’s get married. How many kids do you want? You want 2, 3 kids or whatever?” You’re going to find what interests them and you’re going to do things that interest them so they like you and vice versa. You don’t have to right away know how to add value to someone. It’s more about making that connection. Because think about how many times you hear people saying, “It’s not what you know. It’s who you know.” And if people genuinely like you and they feel that connection, they’re going to feel pulled to want to work with you, to want to do something with you.

Tony:
I’m so glad you brought up the networking side of it because I think a lot of people overlook the role that social media can play in building that network. I think for me, there’s a lot of people that reach out to us on social media and ask questions, but there’s always that one person that comments on almost every single post that I put up as soon as I post it and I’ve met some of those people in person and as soon as I see them I’m like, “Hey, I know you.” It’s like, “I’m the one that always comments on your stuff.” So if there’s someone, JP, that you look up to or that you do want to partner with, maybe just start being super engaged in their Instagram comments and every time they post something and don’t just put a little fire emoji, maybe do something like this more insightful, that’s like a value add comment to the rest of the community. And if you’re the first person to comment on every single thing that they post, eventually that relationship will naturally start to build.

Ashley:
Go stalk someone is what you’re saying.

Tony:
Yeah. I think that works up to a certain extent where if you’re trying to network with Dwayne Johnson the Rock, I don’t know if that approach will work, but if it’s someone that’s kind of a smaller influence, I think there’s a path forward there.

Ashley:
So let’s get into it with Britt. And I think that you guys are going to be able to relate to a lot of what she says. And even though this is the rookie channel, we love to bring on those rookie investors. Once in a while, we love to grab that expert at something and break it down for you guys how the thing that they’re doing can really propel you if you start doing it now as a rookie. So let’s bring on the famous Instagram Investor Girl Britt. Britt, welcome to the Rookie podcast. We are so happy to have you. Why don’t you start off telling everyone a little bit about yourself and how you got started in real estate?

Britt:
Oh cool. Thanks for having me, you guys. I can’t believe I haven’t been on the show before.

Ashley:
Because you’re too experienced. You’re not a rookie anymore.

Britt:
True. Well, we all have been there. So first house I bought when I was 18 years old and I got that one. It’s a weird story. I never know how to get into this because it’s kind of weird. But I got food poisoning when I was six years old and the restaurant paid insurance money out to all the people who got super sick. So I had this chunk of cash and when I was 18, I bought my first rental property. So I was a $25,000 house and part of that food poisoning money went to pay for that. And then I worked for the rest of it. The rent was 850 bucks a month. So I’m like, I don’t know anything. But I do know that 850 over the year, this house is going to be paid off in a few years. So it’s almost one of those things where nowadays we have so much information, it’s information overload. But me at that time, I’m like, “That makes sense. Very simple math. Let’s do it.” So learned a lot just after that first deal.

Tony:
I mean that’s got to be the best food poisoning experience that I’ve ever heard before.

Britt:
It’s the best. It was amazing.

Tony:
I mean first, kudos to you for being 18 years old and thinking I just got this $25,000 check and I’m not going to go blow it on, I don’t know things that 18 year olds buy, but I’m going to buy real estate. How did you get to that point? Was someone coaching you? Was someone teaching you? What was the trigger that made you say, “Let me buy real estate instead”?

Britt:
Well, my mom had tenants in our house because she needed help paying the mortgage. So there’s a point where she would have tenants. We had basement tenants and all of this stuff. And I saw her not being able to afford the property to being able to afford her mortgage with renters. And I’m like, “Okay, that makes sense if you have rental income coming in every month.” And then the other part of that was she got me and my brother to help her fix up these properties. So she’s like, “All right, here’s a paintbrush. You’re eight years old. Let’s get to work.” So it was great because I learned a lot of hands on stuff early on too.

Tony:
Got it. So it was your mom that kind of planted that seed for you to become Investor Girl Britt that you are today. For our audience that doesn’t know how much of a beast you are in the real estate space today, just give us an overview of what your business looks like today.

Britt:
Yeah. I grew my Instagram following. It was a huge piece to this as well. So now I own 28 doors I guess in residential. So that’s a mix between apartment buildings, some single family, but I’m kind of away from that now. And then self storage as well. So syndicating self storage in the US. So I’m kind of also in US and Canada and this gets really complicated. But that’s kind of been more my direction now, the commercial real estate space and working with amazing operators in the self storage industry. But through Instagram, there’s just capital that can be raised, there’s deals that can be found. It’s been a huge catapult really to get me to where I am today.

Ashley:
We talk a lot on this podcast about staying on the same path. Pick a strategy, pick your criteria and stick with it. So at what point did you decide, you know what? I’m going to pivot from single family, small multi-family to self storage. And what would be your advice to somebody as to when that time is right?

Britt:
Yeah, that’s a great point because I think it is extremely important to pick your path, get really good at it, but know that you can pivot in the future. Because there’s so many ways to make money in real estate. If I went full out into multifamily, I know I would be successful. Full out into self storage. It doesn’t almost matter the path you choose as long as you just choose it and go all in. But the point of pivoting for me, especially from single family, was getting in rooms with people and masterminds where they were doing big commercial deals. And I just thought, okay, if I want to scale and get to where… And I had this feeling, I really want to grow. I was really in my comfort zone with a single family. I’ll be doing DIY single family until I’m dead. I’m never going to stray away.
And then all my friends at this mastermind are like, “Okay, do whatever you want, but if you want to grow faster, it’s probably better if you stop doing everything yourself.” But I was so comfortable in that I didn’t think I wanted to change, even though I kind of knew deep down. Because it was hard. It was hard being in that world of doing completely everything, renovations, property management, Instagram. I handled all of it on my own. But then getting in that space with all these people who are doing the self storage and the large multifamily and all that, I thought okay, I can actually do this. And I just got a lot of confidence through that.

Ashley:
So you basically became a rookie again.

Britt:
Yes.

Ashley:
You became a rookie at a different strategy, a new business model. So kind of touch on that a little bit, what it was like. Here you were very experienced, an expert in long term buy and holds in your markets and now completely pivoting and you’re a rookie again in a whole different strategy. What was that like?

Britt:
I think the mistake people make is they think they have to do it all alone. You can hire people who are amazing at what they do and then you can use your strengths and then kind of start building a team. So that was difficult though because I’ve never hired anyone. And then I was reading the book Who Not How by Dan Sullivan. He’s like, “I just hire people to hire all my people.” So I said, “I’m just going to do that.” So I hired a company who helped me build out my whole team and just get that together because I had no idea. And that’s part of it too because I didn’t understand the business side of it so much. I just knew how to buy single family homes and renovate them. But the business end of it, I just could never really grasp that. But there’s so many amazing people out there and it’s better to all be working together and really just focus on your own strengths.

Tony:
So Britt, obviously the majority of our audience, they’re rookies who are super early, haven’t even really begun their journey yet. Would you have been able to build that team on day one or did you have to grind it out yourself first before you got to that point of being able to add those people around you?

Britt:
That’s a good question because I do think it takes some time to figure out who you are and what your strengths are. But really try pay attention to that and focus on it. Because if I was doing bookkeeping, there’s a lot of things that I should not be doing. I’m not very organized. But it’s very consistent through even in high school or through my serving jobs, all these skills and what I’m really good at, I’m still really good at. And what I’m really bad at, I’m still really bad at that. I think just paying attention to it and maybe people can start paying attention in their own job or life in general and write down all your strengths, all your weaknesses. There’s tests you can do online, like the DISC test and there’s one called Working Genius and then you can really just figure out, “Okay, I’m really good with this.” And then eventually, maybe it’s not right now, but eventually when you start to partner or build a team, you’ll have a good understanding on what that should look like.

Tony:
I think the other thing, and this is what I struggled with early on, was just being able to afford to pay people. It’s like when you’re first building your business out, there’s very little money coming from your business. So you do have to kind of do everything. But the decision you have to make as you start to scale is do I take the additional profits that are coming off and use that to inflate my lifestyle or do nicer things for myself, or do I take that additional money and reinvest it back into the business by hiring the right people around you? And we’ve made the decision to hire more people to build that team out and I feel like that’s unlocked so much more growth because now, like you said, we’re able to really operate in our areas of strength and not our areas of weakness.

Britt:
Absolutely. I very much struggled with it because I couldn’t understand. I’m like, how am I supposed to pay someone 50,000 a year? I’m not making anything. I’m trying so hard. All the money’s going to renovations. But the sooner I hired, it was the best thing ever. Because it just takes stuff off your plate and what gives you energy and what will actually move the business forward instead of doing all these little tasks that just take all your time and then you’ll never be able to… You just get there so much faster. But I think also thinking about it in a way where it’s not I’m paying someone 50,000 or whatever it is for the year. No, it’s a three month contract. Think about it more short term. Can I afford each month? And then go at it that way.

Tony:
So Britt, something that you’ve done phenomenally well is build your presence online. We talk to a lot of rookies in our audience and we tell them that your platform if you want to scale, is one of the most important assets you can build. First, can you share with our listeners how big that platform is for you today? And then second, if you were starting new today as someone who had zero followers on any platform, what steps did you start taking to build that platform out?

Britt:
So I’m at 250,000 on Instagram. That’s my main platform, but I’m trying to get on all of the different ones now too. But it is the best thing I ever did. I went to a real estate conference, my first one back in 2016 I would say. And I met a mentor there who told me, “Britt, you have to start doing something right now to build your credibility as an investor. Start a newsletter, start something.” So I started a blog and I’m like, “This sucks.”

Ashley:
We have to find that blog. We’ll post it in the show notes.

Britt:
You know what it was called? I forgot about this. It was called Little Investments on the Prairie. Because I had all these little $25,000 houses but I’m not a writer and it was just really difficult to keep up with. But then I found Instagram. I didn’t have Instagram previous to that and I didn’t even want it. I didn’t want to be on social media at all. But then just from this mentor, I thought that is a good idea. It took me a year to get to a thousand followers and I thought this is impossible. I don’t know how to grow social media. This is so hard and so much work. But I just kept very consistent at it. I’d post Wednesdays and Sunday. So I’d post consistently all the time. And then I discovered lots of people are interested in the video side of things and the transformation of the space. Because I was doing all fully renovating the house on my own. So people started to be interested in that and I started getting reposts and it really worked for me.
So I think when people are building their page, what stops a lot of people is they think they have to be experts but you don’t. People want someone to relate to. So that’s more important than anything. It’s building your story and showing transformation of yourself as a person too. Things you’re learning, different things you’re doing. So I think posting just about, even if you’re reading a book and then you could say, “Hey I read this book Who Not How and I learned this thing and now I’m growing and expanding my mind.” But you can always find someone in an audience that can connect to different things. You just have to keep trying different ways, and it’s actually been hard for me because I was doing the DIY renovations for so long, but then I pivoted to commercial real estate. I’m like, “I don’t know what to post anymore.”

Ashley:
Your Excel spreadsheets.

Britt:
I know, this is so boring. But it’s part of that pivoting again. And then I tried a whole bunch of different posts. Some of them went completely dead, just didn’t work at all. But then you try something else and then just kind of find what works. So you have to just keep trying.

Ashley:
Who was the first person that you hired to actually help you with the content creation side? Because you did it all yourself for a very long time.

Britt:
True. Yeah, I did all the content creation and the good thing is I have 50,000 photos and videos of all my renovations. So even though I’m not doing my DIY renovations, I have all the videos that I could still use and I just had a viral reel, I got 2 million views, and I did that project five years ago. So it’s pretty crazy. I think just capturing as much content as you can, no matter what it is, even if you think it’s kind of pointless. Just take a video or photo anyway because your future self will thank you.

Ashley:
What are some of the benefits of actually building a brand or getting your name out there? So for Tony and I, if we wouldn’t have had any social media or he wouldn’t have had his podcast, we probably wouldn’t be sitting here today because nobody would know who we were and how to reach out to us or what we were doing. So I mean that definitely is a huge benefit is that you’re provided opportunities because people see what you’re doing. They get to know you through your social media. So what have the benefits been for you as an investor?

Britt:
Well, real estate is a people business and it’s a relationship business. So the best way to build the relationships and a lot of them all at once is through social media, through Instagram. And you could do Instagram stories and people really feel like they’re connecting with you because you can’t tell if you’re looking… Your brain can’t comprehend the difference of if you’re looking at a phone, it’s like I’m talking to Ashley even though she’s on my phone, we’re not in person. She doesn’t know who I am, but I feel like I know her. My brain’s actually building that relationship with her. In order to raise money, in order to do those types of things, people have to like, know and trust you. So a great way to build that trust and likability and get to know the people is through posting very consistently on Instagram.
What that translated to for me was over $10 million in capital raised through my social media platforms for my projects. So it’s been pretty cool to see that and just friendships as well because real estate’s hard and it feels extremely lonely. It’s not easy. We all know that. We’ve all been there, but if you have people in your corner, you could build those relationships online as well. So you get friendships out of it, you get deals, you get capital investors, partnerships, everything.

Tony:
First, congratulations to you. You said that real casually, but that’s a big deal. I’m glad you shared that because it lets our audience know what is possible when you can build that platform. So I want to kind of connect it back to the audience about what they can do to get started. So you talked about posting consistently. You talked about not necessarily needing to be an expert, but just kind sharing your journey. What other things can you share with the rookie audience to say, Hey, if you’re starting from zero, here’s some good things to do to build that platform.”

Britt:
Yeah, I think there’s so many different formats to do it on too. And it doesn’t even have to be Instagram. If you’re an amazing writer, maybe it’s Twitter and LinkedIn and different ways. But kind of understand yourself. I’m very visual, so I liked Instagram for the photos and the videos, but if you hate photos and videos and you love writing, there’s opportunity for that as well. It’s like the picking your lane thing. So you pick your lane and then you could expand later on. Because I kind of expanded now, but for six years I was only doing Instagram and now I’m all over. But it was just, you have to really pick and focus. And then I think a good tip is people think, oh it’s all about me. And they feel weird. It’s kind of like this self-promotion kind of uncomfortable thing, but put it to the audience. You’re trying to help someone. You can change somebody’s life. You guys have changed so many people’s lives through the podcast, through your social medias.
I think that’s a good way to do it is to think about it that way, kind of flip the script on that. And then also I heard a thing from Patrick Bet-David, you know who he is?

Tony:
Yeah.

Britt:
So he was talking about his great-grandchildren and imagine all the things, the knowledge, the wisdom that he’s sharing and he thinks about them watching it later on in their lives. And I really like that. And I thought if my grandparents had videos and they were sharing their wisdom, I would love to go back and watch that. So that’s another way to put it too.

Tony:
Yeah, that’s deep.

Britt:
I know. I was like that’s a cool way to think about it.

Tony:
Yeah, that’s amazing. We talk all the time and Ashley touched on it earlier too, that neither one of us would be sitting in this seat if it wasn’t for the platforms that we built. So Ashley had a pretty decent following on Instagram before joining the podcast. I had my own podcast. And like you said, it’s like you never know where those little things will take you and the opportunities that might come your way. So what’s next for you, Britt? What are you planning to do next with your social platforms and continue to build those things out?

Britt:
Well, it’s a good question because I never even know what’s next. It’s just who would’ve thought? I’d never in a million years would’ve thought I’d be on a podcast, be speaking on stage. And that’s the thing. You’re just creating these opportunities for yourself when you really work hard and put yourself out there. So what’s next for me? I’m still on the lane for self storage, raising capital for that. And then just bought a multifamily in Canada as well that just kind of came across my plate through Instagram. So it was just these deals that you don’t even expect but then later on down the line, they just pop up.

Ashley:
Yeah, I think the biggest benefit is that things are brought to you that you don’t even know you need in your life. It’s like you could post about something and someone say, “Oh actually, here, use this or buy this thing or whatever.” And it’s like, oh my gosh, this one little post I did, I didn’t even know I needed that thing. I never thought that I would be a podcast host. But I love it so much. So I think that’s a huge opportunity and a huge advantage of sharing your story, providing quality content. I’m going to post a picture of me in a cute outfit probably in front of the sign later on and post it with some stupid caption. But you know what? The other stuff, I try to actually put some kind of content behind it as to something that you can learn from it too. And I think that makes a big difference too. I mean you go through and you show how to do concrete countertops or something like that. You actually tell people how to do it. And I think the quality-

Tony:
That was cool, by the way.

Ashley:
I actually used your videos to do the concrete countertops in my liquor store. We would go through and look back, “Okay, what products did she say we needed?”

Britt:
That’s so cool. I forgot about that. That’s so good.

Ashley:
It turned out great. So thank you. Along the lines of content creation and your social media posting, everything like that, the mindset side of it, do you ever get cringy or, “I don’t know what people think about this.” I doubt you probably get a lot of bad comments, but if you do, how do you deal with that side of things? When I first started my Instagram, I didn’t tell anyone I was doing it because I just didn’t want to be judged I guess. So it was a full year before anyone I knew even found it. But how do you kind of handle that?

Britt:
It is difficult because naturally we focus on the negative. So you can get a hundred amazing comments and one negative one and that’s the one that bothers you the most. But I think just understanding that’s part of it. You have to take the good with the bad. If you want these opportunities, if you want all this stuff, you have to kind of understand not everyone’s going to like you. It’s just part of how it is. You wouldn’t expect that. So I think going into it, understanding it’s going to happen. There’s no way that you can be online posting consistently and not get some negativities and the cringe worthy ones where you’re like, “Oh I don’t know.” Because it can be weird.
And I just started speaking on camera because I was doing my DIY renovations just working and posting the videos of me working. I never actually did face to camera on my feed. I do it in stories but not actually telling a 30 second story on a reel and it is really difficult and I watch the video and it’s just so embarrassing and it’ll take me 15 minutes to get a 30 second clip because I can’t even remember one sentence. This is really hard. So I think just that practice and consistency and then even if you feel really weird about it, it could help someone else. So I think just posting it and then trying to get better all the time.

Tony:
I appreciate you sharing that because I think someone looks at you who has almost 300,000 followers. I think that you’ve got it figured out. So the fact that you even still struggle to get that content in a way that you like it, that you feel comfortable sharing, I think hopefully it makes it easier for the folks that are listening to the podcast as well.

Britt:
Oh absolutely.

Tony:
So one other question for you, Britt. So do you ever feel that you have to take a break from social? And here’s why I ask that question. For someone that’s just starting out, obviously there’s a certain sense of motivation that comes from seeing other investors kind of crushing in their space. But I think oftentimes you also feel that there’s like this, not imposter syndrome, but you feel like, “Man, they’re doing so much better than me. Can I ever get there?” And obviously your business has grown a lot, but even for me, I still see people like, “Man, that guy’s crushing it, that girl’s crushing it.” It kind of makes you second guess yourself as an investor, right? Do you ever feel like you have to take a break from social media just for your own mental sanity or how do you navigate that?

Britt:
Well, that’s a great point because comparison is a terrible thing and the only thing we can do is try to recognize that and then say you have to compare yourself only to your past self and see that progress there. Because there’s no point if you… Because I felt that all the time, this feeling I’m so behind. I’m like, why can’t I get this? This is so frustrating. And I’ve been there so many times. But I think just understanding that and then as soon as you think that, just catch it and then say no. If I think back to 10 years, how much have I grown? I haven’t had to really take much of a break in that way, but I’ve definitely had those feelings and all you can do is know that you are here right now and you’re working really hard and you will get there.
There’s no way you can fail if you keep going. Even if you have bumps along the way, you lose money on a deal, that’s okay too, because you’re going to learn so many lessons from that. And the only way you’re going to fail is if you quit.

Ashley:
I think you and I kind of went through a time period around the same time of not knowing where we wanted to go next. Where was our pivot going to be? I remember being at AJ Osborne’s office together and you very much felt overwhelmed with things and you were trying to figure out what was the next thing for you. And I think that’s kind of where it blossomed with self storage, everything like that. And I went through the same thing and that’s where, okay, I want to do cabins and land and campgrounds, things like that. So you have I think those two things. It’s not knowing what to do next, what to do better, what to do greater, to keep up with everyone it seems like. And then also that imposter syndrome. Am I really doing everything that I could be? Do I even know what I’m doing?
Even on the plane ride here, usually I travel with my life auxiliary, my security blanket and I was alone on the plane and I’m texting him with tears strung down my eyes. I feel like I’m such an imposter. Do I even know anything about real estate? I have to talk on stage. The poor lady having to sit next to me probably looking over at me, but also having that accountability, that business partner, that friend or whatever who just helps you build back that confidence and reinforces it for you. So yeah, Daryl’s actually behind the camera rolling his eyes at me. But I think it’s important to be honest about those things. Those things happen. And just making your mindset stronger and stronger as you go along with the journey and not worrying about outside factors because social media definitely has changed the world on that for sure.

Britt:
It has. And we put people on these pedestals and then we think, “Oh, they have everything figured out, they just have no problems.” And it’s not that way at all. Everybody, no matter what level you’re at, they all have imposter syndrome in different rooms and it just depends what it is. But I think just knowing that we all feel the same is comfort in itself.

Tony:
You mentioned Who Not How by Dan Sullivan. Have you read The Gap in the Game?

Britt:
Yeah.

Tony:
That was a really eye opening book for me because I think most people that are entrepreneurial, they’re so driven to focus on what’s next and what am I working towards and here’s the goal, how do I get there? But we struggled so much at looking back and saying, what have I already done? When I read that book, it kind of gave me this epiphany moment where it’s like I’m really, really good at looking forward and being aggressive in that way, but I am terrible at looking backwards and being appreciative of what I’ve done. So I’m not even saying that you need to do this, but just for me, I’m talking to you guys and this is something that I’ve struggled with a lot and if you have that imposter syndrome, I think reading that book, it gave me a whole fresh perspective. So I highly, highly recommend it.

Britt:
Absolutely.

Ashley:
Well Britt, thank you so much for joining us for this and thank you for going deep with us there. I know our listeners probably appreciate all the honesty. Can you let everyone know where they can reach out to you and find out some more information about you?

Britt:
Yeah, Investor Girl Britt on all of it. Thank you guys. This was really fun.

Ashley:
Yeah, thank you for coming on. Literally Britt came into the room and we said, “Hey, you want to do a podcast?” Within five minutes, we were sitting down. So great job being put on the spot here.

Britt:
I love it. Well, thank you guys so much.

Ashley:
I’m Ashley at Wealth From Rentals and he’s Tony at Tony J. Robinson. Thank you guys so much for listening and we will be back on Wednesday with another guest.

John Lovallo, UBS senior research analyst, joins ‘Power Lunch’ to discuss if mortgage rates could fall below five percent at this time next year, which homebuilders would benefit most and what price would entice first-time homebuyers.

Annalisa Di Chiara of Moody’s Investors Service says it has not seen a rebound in sales, and the liquidity profiles of these property companies have remained acute and at risk.

Many Americans dream of a middle-class lifestyle, which has looked even rosier over the past five years. A bullish stock market characterized the period before the pandemic, and record-breaking increases in housing prices followed. Business closures coupled with government stimulus money caused the personal savings rate to skyrocket. 

But now, it seems the middle-class wealth boom is coming to an end, according to a Bloomberg News report that analyzed new data on wealth. Middle-class families are feeling the pain of inflation, a volatile stock market, and rising mortgage rates more than their higher-earning counterparts, who can more easily absorb the changes. What comes next in their financial journeys? 

Middle-Class Wealth Grew Rapidly Over the Past Five Years

In March, the average wealth of the American middle class reached $393,300, the highest it’s been in history. That figure includes savings, home equity, and other assets. Most of the increase was driven by rising home prices. Homeowners in Idaho, for example, saw the values of their homes increase by nearly 122% over the last five years. Some metro areas in Florida and Arizona even realized gains of over 200%, according to CoreLogic data. 

People who bought homes before the pandemic and those who took out a mortgage while interest rates were low benefited from these unprecedented boosts to home equity. Middle-class home equity values rose by $5.7 trillion between mid-2017 and mid-2022. The group now holds $17 trillion in housing wealth, representing 60% of total housing wealth in the United States, data from the Fed shows. 

It should be noted that there are multiple definitions of the middle class. Some experts define it qualitatively as having a house, a car, and a retirement account. Pew Research defines middle-class households as those who earn incomes between two-thirds and 200% of the median. The wealth data from the Bloomberg report skews higher income, including adults over 20 with between $48,000 and $170,000 in annual income and between $96,000 and $1.07 million in net worth. 

While the wealth of middle-class earners may have increased over the last five years, the size of the group has continued to contract. It’s not a new phenomenon but rather a trend over the past five decades. And it’s unclear whether current economic conditions will exacerbate the issue. 

The Percentage of Americans with Middle-Class Incomes Continues to Shrink

Since 2000, roughly one in four middle-class earners have either fallen into the low-income group or moved up the ladder to become high-earners each year. College-educated folks were more likely to see their incomes increase, while those without high school degrees were more likely to move down. Middle-class Black and Hispanic adults were also more likely to move down the income ladder than up. 

Experts attribute this to several factors, including an increasing reliance on trade with countries with low labor costs. Another primary cause is the decline in middle-income job opportunities offered to less educated individuals. Looking back to 1980, people without college degrees were equally split between low-income and middle-income occupations. But by 2016, only 29% of non-college workers held middle-income jobs—most of the change occurred because workers without college degrees were pushed into low-paying jobs rather than moving up the ladder as a result of training or experience. This shift had a relatively outsized impact on workers in urban and metropolitan areas, especially minorities with high school educations. 

Now, Wealth in the Middle Class is Declining

At the peak of middle-class wealth in March, the average middle-class adult was $120,000 wealthier than in January of 2017. But by October 25, middle-class earners lost about $27,000 in average wealth since the peak, a 7% decline. That’s the biggest drop in average wealth since the financial crisis that began in 2007. 

The remarkable increase in wealth leading up to the peak may be enough to insulate the middle class during a recession. With the consumer price index up 8.2% from last year, 78% of middle-class Americans report cutting back on spending at least a little bit—but there’s a chance that could be the extent of the impact. 

While research suggests the Fed’s plan to raise the federal funds rate to 2008 levels will cause rising unemployment, it’s expected to affect low-income workers in rural areas the most. Will the middle class stay safe from layoffs, and will their savings and housing wealth act as a cushion for price increases?

Will Housing Wealth Insulate the Middle Class from a Recession?

Some economists believe middle-class housing wealth will help cushion the recession’s blow for the entire economy. Housing wealth isn’t liquid—without taking out a home equity loan at today’s high rates, middle-class homeowners can’t access their housing wealth to help with their rising expenses. But fixed mortgage payments give homeowners more wiggle room than renters facing skyrocketing rent prices. 

And while some housing markets are cooling off due to higher mortgage rates limiting the pool of potential buyers, most experts don’t see a crash in the near future. Younger generations are fueling high demand for homes while supply remains low. And stricter lending standards mean today’s borrowers are much less likely to default than their counterparts who took out mortgages in the 2000s. That means it’s likely that middle-class homeowners will continue to realize appreciation gains that may help offset increasing expenses. 

Could the Job Market Increase Middle-Class Jobs, or Will More People Fall Out of the Middle Class?

The unemployment rate currently sits at 3.7%. There’s a chance that the competition for and high cost of hiring educated and trained professionals will lead businesses to provide more on-the-job training, creating more middle-class jobs. We’ve also seen pandemic employment trends reversing, with layoffs in higher-paying fields, such as finance and tech, and gains in some industries like travel. The Inflation Reduction Act seeks to create more registered apprenticeships, giving low-income workers a chance to climb the ladder. 

But there are signs the job market is already cooling. Major employers aren’t hiring new workers as rapidly as they once were. Turnover is also down, indicating that the job-hopping trend is winding down, and wages aren’t increasing as rapidly as last year. Executives report that it’s getting easier to attract and hire talent. If a decrease in consumer spending converges with the cooling job market at a time when it’s expensive for businesses to access capital, middle-class jobs could be at risk. 

If unemployment rises for the middle class, the size of the group could contract even further. Non-college-educated workers who are laid off from middle-class jobs may be pushed into low-income jobs. Meanwhile, high mortgage rates alongside high rents and expensive groceries are making it more difficult for people to become homeowners and build middle-class wealth. Each new generation has experienced a decrease in the homeownership rate since the boomers. Homeownership is less affordable now compared to historical averages in most of the United States. 

And since housing wealth is a means for passing down wealth through the generations, the problem could continue to snowball. It could become more difficult for low-income earners to enter the middle class, while at the same time, a recession could cause some middle-class earners to fall out of the group. But middle-class adults remain optimistic. 81% believe their children will have even better financial prospects, according to a Harris poll. Whether or not their expectations are met depends on a wide range of factors impacting an unpredictable economy. 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

David:
This is the BiggerPockets podcast show, 686.

Evan:
I’m a competitor and I compete at basketball at a high level, but I’m good on a journey and minding my own business. You understand? I think one thing that occurs as you get older, even doing contract negotiations, the humility in that is making sure you don’t miss out on your money or the right deal or situation worrying about what the person left the right has. You know what I mean? It’s like a marriage, that relationship has nothing to do with anybody besides those two people.

David:
What’s up everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast, the best, the biggest, the baddest, real estate podcast in the world here today with an amazing episode for you. Today, my co-host, Rob Abasolo and I are interviewing our friend, Evan Turner. Evan had a very impressive NBA career. And while he was in the NBA doing his thing, he was also buying real estate. He’s now a businessman and entrepreneur, and a real estate investor and has been making bigger and bigger moves since he first got started. And he comes on the show to share with us his process, his journey, what he’s buying, how he’s buying it, and how he looks at the world. And you’re going to love what you hear. Rob, what were some of your favorite parts of today’s show?

Rob:
Oh man. This is a favy-fave, as I call it, this is one of my favorite episodes, man. We were just really having a lot of fun. And for those of you, if you stick around to the very end, you’re going to see me drop, I don’t mean to be so intense about it, but some pretty intense basketball analogies there at the end. So I would definitely stick around to the end.

David:
You cannot miss this. Everybody, you have to listen to this show. Rob and his basketball, I don’t know if analogies is the best word, references are worthy of being made into a T-shirt. You definitely need to say these words to Rob when you see him in real life. It was so bad it was good, in a way that only Rob Abasolo can do. By the way, guys, this episode’s a little bit longer, so we’re going to make a shorter intro for you, because we took advantage of as much as we could to get as much out of Evan’s brain as possible, which is why it’s such a good show.
Before we bring in Evan, today’s quick tip is, consider looking into opportunity zones as a way to save in taxes and still help the community. This is a wonderful marriage of social improvements along with smart business moves. And it’s one of the best moves that I think the government has made in a sense where you can get massive tax savings by investing in opportunity zones that also help the community where those properties are. And another part of Evan’s success was his understanding that you win better as a team. So look for ways to surround yourself with like-minded people on the same journey as you, with the same goals as you that are highly skilled in what they do, and find a way for you to contribute as well. All right, enough of that. Let’s bring in Evan.
Evan Turner, welcome to the BiggerPockets podcast. Great to have you here, my friend.

Evan:
Thank you. Thanks for having me. Appreciate you guys.

David:
Yeah. Now if anyone hasn’t heard of Evan Turner, I’ve never actually said this, so this will be the first time Evan’s hearing it, he was one of the people that I actually, actually followed your NBA career, Evan. When you first came out of college, I loved the way you played. A lot of people, they hear me talk about jujitsu, but basketball was my first love. And I don’t know, you were just the person who got it. You understood the game at a pretty high level. I really liked watching you play. We’ve talked about the stuff that we like and the things people don’t like. I was a San Antonio Spurs fan. I hated when people were like, “Oh, they’re boring.” It’s like, no, they just play basketball the right way. They’re good.

Evan:
Yeah, yeah.

David:
Yeah, they don’t dunk all the time, they’re boring. So you were like that San Antonio Spurs style of, you understood the game as a whole. So I’ve been following you for a while. I had no idea that you were actually a real estate investor. It’s very cool to get to know you here. And now you actually have your own podcast. So you can tell us a little bit about that and the stuff you guys talk about.

Evan:
Yeah, sure. Thanks for having me, for one, I’m a big fan of your platform. And everything you’re doing is definitely dope and this is cool. I’ve been telling all my friends I was going to be on this podcast, so everybody’s been like, “For real?” I’m like, “Yeah, I’m really going to be on there.” So…

David:
Yeah, Rob dressed up just because he knew that you were-

Evan:
Really? Yeah, I heard he added a pocket to his black T-shirt he used to wear. So…

Rob:
That’s right. I keep all my snacks in here.

Evan:
Hey, that’s all that matters.

Rob:
If you hear me crunching-

Evan:
Hey, don’t worry.

Rob:
… just a few pretzels hanging out.

Evan:
I appreciate that. But like you were saying before, David, I just retired recently, in 2020, from a 10 year NBA career and right now myself and Andre Iguodala, we started a podcast. We just start our second season, it’s called the Point Forward Podcast. Much like David was saying, it’s a play on words from a certain type of position in basketball, which myself and Iguodala were point forwards. And obviously we talk a little bit about basketball, but it’s not fully a basketball podcast. We go over business elements of the podcast, we go over current events and we like to have a overall good time, just like this show. So the basketball part is the second element. But we’re really trying to give free game and have the real conversations that most people won’t have in their position.

Rob:
Yeah, man. So I’m curious, you were in the NBA here for about a good decade. So how did your day to day look? Your entire career, did it change or was it always a pretty regimented day to day for you?

Evan:
It’s always a pretty regimen day to day. I think you guys know as well as anything when you’re focusing and locked in and you’re passionate about something, I felt like it had been basketball 15, 16 hours a day since I was probably 12 years old. So entering the NBA, it was the first real time I had an opportunity to do it as a career. So the first, you have to really wake up and it’s six days a week. You usually get to the facility around 8:00 AM practice usually starts at 11:00. In between there you’re getting your preparation going, you’re eating meals, you’re getting stretching, you’re probably doing body work. Then you’re also lifting weights and then you’re going through a two, two and a half hour crazy regimen practice. And you probably leave the facility each day by 2:30 or 3:00 PM if you’re lucky after healing and icing and taking care of your body. And you go back home and do it the next day. So it’s usually off and on, even if you’re not including game days, a 10 hour thing sometimes.

David:
With that downtime, I got to imagine a guy you who’s a very cerebral player, you’re actually a very cultured man as well, we talked for about 15 minutes before we started recording and, man, you were all over the place. That was pretty cool to see. What was your thought process like? What emotions were you going through when you were in the middle of the career and you realize that real estate was a road that you wanted to explore?

Evan:
I think it was just a door I was thankful that I could knock on because at the end of the day, when you make it to the NBA and you’re living such a fast life, the opportunities that you have, you have access to a lot of money, you have access to the best of best things. And like everything else, you have to govern yourself in order to explore it and also in order to learn. And I think that was one thing I was able to do where real estate somewhat gave me the flexibility. I knew if I bought a piece of property, it wasn’t going to pick up and leave on me. And when I first started out at, which was Columbus, Ohio, I was able to have a familiarity with the people and the environment in order for me to invest and be able to leave and have a time demanding job like the NBA.

Rob:
Was there a little bit of a real estate bug at any point during your career or was it really something that at the very end you decided to go into it? Did you see other friends investing in real estate? What was really that catalyst for you?

Evan:
To be honest with you, I don’t know you all’s background, but where I came from, the typical stuff, I was an inner city kid, single parent home and everything. So to comprehend money, I wasn’t too familiar with that. And then going to the NBA and have a large lump sum of money and you hear all these crazy stories around that time, you’re just coming out of one of the biggest financial crisis and everything. So when my finance company is trying to suggest in investing in stocks, I never really believed in that. I was more so, humbly speaking, just being like, “No, show me what I own,” more so than tell me about what’s going to happen and hit me with the [inaudible 00:08:04]. And I think to say that story was just an understatement because I wanted to make sure my money worked for me. And, David, like what you said, money’s energy.
So I wanted to make sure I had money going somewhere in an asset with the finances that I had much more than just sitting on it and not making it work for me. And I was always fortunate enough to have family and mentors like my mom to tell me that basketball isn’t always going to be there and I got to make sure that my plan B is being worked on before I need it.

Rob:
Totally. So going from not having a lot of money to getting that large lump sum payment, that’s pretty weird. I’ve gone through this in my real estate entrepreneurial career a couple of times and it’s really hard to comprehend.

Evan:
Yeah, for real.

Rob:
Yeah. Did you ever look at your accounts and everything and just not really believe it? What was that whole thought process?

Evan:
Now, to be honest with you, I don’t know how you feel when you look at some of your stuff, but I’m so grateful that sometimes when I look at my accounts and stuff, it’s not like it brings a tear up to my eyes or anything, but I’m just saying, I’m just grateful that this is really mine. You know what I mean? This is what hard work really brings. And I guess, as you guys comprehend, it takes years and years and years to see the fruits of your labor. So I’m just appreciative to really have stuck in with a dream, a passion, and all the sacrifices I’ve made to see it come back in that type of form is a blessing. And it’s something I never take for granted because in this situation there’s a reason why they call it the 1%. Not many people are able to experience that. So you have survivors remorse, but at the same time when you’re on your hustle, you are appreciative towards it and you deserve it.

Rob:
100%. Yeah, I really do struggle with this a lot because, I’m not going to say I came from nothing, that’s definitely not true, my parents were immigrants from Mexico and money was tight growing up, right?

Evan:
Yeah.

Rob:
And so it’s been very hard to break out of this because I have this big fear of losing it all because I’m just like, “Oh, I don’t know, I don’t want to go back.” But I don’t know, what was your first big mindset shift going into this new phase of life where money was plentiful? Were you using that as an opportunity to learn? Were you going back to your family with that? What were some of those big changes for you?

Evan:
I think the biggest changes for me, obviously the first thing you do is go take care of your mom. You know what I mean? And I wanted to take care of my mom, get her house and everything. But I think the biggest change for me was trying to fully comprehend what money was. That’s an understatement. It is a huge lump sum of money. I wanted to make sure I came in with the right opportunity and plan to have it work the right way for me. I was more so scared of losing it more than anything. And that was a big fear to me, almost so much to the first point, my first three or four years, I barely spent money on anything. I think I was fortunate enough to have reached a certain financial mark by the age of 24 that would’ve took care of me for the rest of my life in that certain realm.
So I was still touching the water, seeing how hot it was. But during that time I wasn’t hesitant to dive into real estate and to invest in that because I knew for sure I want an asset along with keeping the money with me.

David:
Okay. That is very insightful because-

Evan:
Yeah.

David:
… it’s odd that you hear a person who… You hear about lottery winners, the majority of them don’t keep their wealth, hardly any of them do. In fact, their life tends to go to crap when they get that money. The analogy that I use is it’s like you never worked out and you held this barbell above your chest for bench press and someone throws four plates on each side when you hit that. You had no foundation to handle that and the money crushes you. So I’m sure a lot of the people that were making money through being a professional athlete that you’re around, it was a scenario for them. They never had it, they got a bunch of it all at once. They weren’t trained for how to handle a weight of that, they lose it.
You were in almost the opposite scenario, you’re saying, I was afraid of losing that money and I had to overcome the fear of losing what I had gained as opposed to the discipline of saving it. What do you think led up to the moment when you received the money and you wanted to keep it that was different in you than in some of the people that were around you?

Evan:
I just think the upbringing, I’m not trying to make my situation seem like, “Oh I came from this,” or try to write a documentary on myself. But I think a lot of times as simple as fact as this, if money doesn’t mean something to you, you weren’t broke enough. You know what I mean? And it is a God-honest truth. So when you break it down, I believe in Darwinism, survival of the fittest. You understand? And there’s a game we play, a life, and there’s certain things that you really have to take into consideration in order to win. And it’s all the stuff they taught you as a kid, make your next move your best move. And I think the environment I hung around as well. I’ve been fortunate enough to have the right type of people around me.
I came into a locker room as a rookie where I had Elton Brand who was huge in investing in real estate, investing in movies. I had Andre Iguodala speaks for himself, he’s a tech entrepreneur and he is very business savvy. I was fortunate enough to be around the right people. And with my notoriety the right type of people came into my circle that can give me, even if it was bad finance advice, it was more than I ever heard growing up. You know what I mean? And I think that type of environment really was able to mold me because I was able to stay in the right rooms and somewhat get the leftovers of game.

Rob:
That’s really cool, man. So was one of your first pieces of real estate that you bought the house for your mom?

Evan:
First real piece of real estate I bought? Honestly, so the first one I bought, we had rented a spot for her and I bought a five unit in Columbus, Ohio, while her spot was being built. So we could say 50, 50, whatever, got closer. But, I was able to buy a 5,000 square foot crib in a up and coming community outside of Columbus that was able to make a pretty penny when we sold it. We bought in and I think the land in 2010 and the house was done at 344. We were able to sell it for 655 as of a year ago.

David:
So that I think is one of the huge, huge, huge foundational pieces for someone that becomes a real estate investor. It’s so important that you have a good experience on your first deal. We all have this amazing amount of fear. People don’t realize it, I’m sure the two of you would agree, the three of us, even today when I buy a house, I still have fear. There’s always that, what if, that hangs over your head. And it’s amplified in the beginning when you get that first one. And if you have a bad experience, you’re like, I’m never doing it again. You have a good experience, it really helps to overcome that fear. So what I love that you’re describing is it was a primary residence. That’s what you’re saying, the first house you bought was a place for your mom. Right?

Evan:
Yes, yes, yes.

David:
Yeah. That is why we talk about house hacking so often because it gives you an experience to get your toe dipped in without getting your foot bit off by the shark or without drowning. Was that how your experience was?

Evan:
Yeah, basically we were able to buy into an area early, build a house up, and there was no real pressure that was just an asset, you know what I mean? It was a very good asset, in my opinion, at that time, that when we sat on it we were able to live and made memories and it’s time to move on. I was grateful we bought it because, like I said, prior to, we were able to double our investment on it and it taught me a lot as an investor in buying into something and seeing how it builds. And like you said prior to, money’s energy. I put however much money into that house and without looking and just living and enjoying myself in it, we were able to make double off at what we put in, so that was a blessing. That’s one thing I always take with me when it comes to continuing to try to build and keep my patience.

Rob:
Sure, sure. So you buy a five unit, you sell it, you make a really good profit, and then what happens after that?

Evan:
So after that I went on a campus and I bought two six bedrooms on campus where students could rent properties from and I own that. Obviously, with real estate, I was able to get that on campus. I put it in a LLC. And one good thing about that is we’re able to do from August to August type situation. You can guarantee that most of the students, especially back then, student loans, all that money, all that rent, is going to be guaranteed each month. So I was able to take advantage of a open real estate market in Columbus and finesse from there. And with that, which I was fortunate enough to occur, is with those same builders, I took that money and the profits from that money and I invested into a new apartment condominium that was built in 2014.
It was called 600 Goodale. I invested a couple 100,000 with a 8% rate of return. And within the first two years I was able to get all my money back, which was big time. And then from there, once they sold it, fortunately enough, it’s been an annual return of 36% since then.

Rob:
Dang. That’s cool.

Evan:
Yeah, so that was shout out to the-

David:
It’s a good experience there too.

Evan:
Yeah man, it is good experience mixed with a lot of good luck. Like I said, coming to Columbus, Ohio, you guys are all familiar, I live a couple blocks away from campus. But being out here you have a lot of real estate developers such as the Kaufmans, the Schottenstein families, the Schiff families, the [inaudible 00:18:06], the Diamonds, where I was fortunate enough with basketball to do well here that had opened doors and open opportunities to invest in some really good opportunities where Columbus was being built up as I was making my wealth. You know?

Rob:
Sure. I don’t know if it’s really all that much luck. Obviously you made it into the NBA and had a successful career because you had hard work. Luck is a component that comes into play when you’re really good at something. So you’re obviously crushing it in the real estate game at this point. You get the house, you make a sale, you get a couple of six bedrooms and then you invest in this apartment condominium. At what point do you feel you told yourself, I’m pretty good at this?

Evan:
I keep it humble in that sense, because I thought, respectfully, if you ask me what I’m an expert at, I was an expert, it’s proven, at basketball. You understand what I’m saying? So I think, after a first couple, talking with some of my mentors, some of my advisors, I was like, man, this is turning out pretty good enough to the point where I’m passing up on trying to buy certain cars and being like, “Yo, I’m going to get this car after I flip this to take that,” almost to the point where I would leave my city in the fall, go work where I had to work at and come back in the spring and feel as though I was going to come back and reap the rewards of a pretty good investment. So I don’t know if that was a sure thing much, but I thought it was going to work for me and luckily it has.

David:
Well something that I learned in basketball, I think a lot of people who played that sport or other team sports learn, is that your individual skills of whatever type you have manifest very differently within a different group. So you could take a certain player and put them on a team and they are lackluster and then they get on another team and like, boom-

Evan:
Absolutely.

David:
… They’re amazing. Right?

Evan:
Absolutely.

David:
And I think that doesn’t get talked about very often because, most of the conversation, let’s use the basketball example here, would be about how you improve your own skills, ball handling, defense, shooting the ball, strength, speed, jumping. But the really smart players are the ones who say, now I know I would be good in this environment. And they actually make that a part of their career, is they’re willing to take a little bit less money to play longer on the right team. That works in business too.
You can have an incredibly skilled person who can analyze properties great, network really good, they have some version of skill within real estate investing, but they never get around the right team. They don’t have the right advisors, they don’t have the right environment, there’s no deals where they’re looking. They don’t have a bookkeeper, an accountant, a construction… Sometimes just having a contractor that’s solid can make a deal work for you that would not have worked if you didn’t have that one piece. You’ve mentioned you were blessed enough to be surrounded by some mentors and some guidance in the right piece. What role did that team that you found yourself around play in helping you be successful in this endeavor?

Evan:
I think everything. I think they helped a lot due to the simple fact of their willingness. You understand what I’m saying? It’s one thing for people to work with you, it’s another thing for people to help you. And I think along those lines, in regards to us doing good business together, each time we were able to make a flip or do something or when I would come up to somebody and be like, “Hey, I’m looking for some deals, I’m looking to invest,” I was always fortunate enough to be turned in the right direction. And also I think in regards to just behind the scene things, in regards to funding, you might get into a deal where the developers are guaranteeing all the risk. You know what I’m saying? And we’re able to just invest freely. I thought the support and the timing of the people in the city of Columbus helped the most with me.
I think my finance advisors finding the right type of loans, making sure, from day one, my business and my finances were in order to make sure I had ways to free up lines of credit. Making me comprehend how important the lines of credit is in order to get things done. Because right now I’m playing in a situation where my interest rate is still at four when everybody’s still at 10. You understand what I’m saying? So those type of moments where I’m able to be able to have a team that can foresee a forecast and have me steer towards less turbulent air is everything because I haven’t really felt a bump in the road yet. I’ve been able to keep adding more and more points to my portfolio.

Rob:
And that makes sense to have those mentors and the people that you’re working with and the people that are helping you. I got to imagine, too, that you probably had some buds also coming out of the league and everything like that, that were also doing real estate. Were you surrounding yourself with more people that were like-minded at that point? Or were you keeping your network the same for the first couple of years?

Evan:
I’ve always been told, even my mentor, my OAU coach, Coach Mullins, he used to always just tell me, even when I was in college and stuff, just like, “What book are you reading? Make sure you read something.” Or if he heard I went to a rap concert or whatever it’s like, “All right, bro, stop going to rap concerts, go up the street, go see Hamilton,” or, “Go…” You know what I mean? I always-

Rob:
Good choice. Good choice.

Evan:
Yeah. But I’ve always been encouraged to go outside of my element and go learn more. And I’m a stubborn individual and some people say I might not listen a lot, but in certain areas I made sure, for whatever reason, I listened at the right time. And that was one thing I always knew that was important to my development, because crossing into an unreal world in the NBA, I was more so wary of making sure I didn’t lose myself or my footing and to really keep in touch with the people and the elements around me, whether it became real estate or it became some other hobby, was part of my everyday regimen. And I think that’s where it helped benefit me in the right rooms of meeting people who wanted to buy real estate.

David:
I think it’s very easy for anyone in any capacity to just zoom in on their own thing and not take that perspective, like you said, getting exposed to more stuff. So I see this with investors where they’re very comfortable analyzing a property. They’re the people that like to use a spreadsheet, they like to run numbers and they just do that over and over and over and they never zoom out and take a look at, is the market I’m analyzing a good market to be in at all? Or what does the appraiser do? How do they come up with the numbers that they’re looking at? The more you learn about the different people’s jobs that are in whatever you are doing, the better your chance of being successful in that. And I think you stumbled into that without realizing that was necessarily happening by just exposing yourself to more than the little stuff that was around you. Right?

Evan:
Absolutely. And I think one thing that occurs as well is, with anything, is humility. Sometimes when I get too cocky on a basketball court, the basketball guys are going to teach me my lesson. You know what I mean? So even coming around into this business world, I think I was able to keep my ears open because I was humble because I comprehended who the experts were. The same way I got off my butt, rearranged everything, when I found out about the BiggerPockets conference. Because at the end of the day I need to go around and be around like-minded people and go talk to the people that have been doing this at a high, high level and that can show me different ways of thinking and maneuvering. It is never changed. It’s just me want to learn and when my direction’s going that way, I’m going to knock on those doors and try to walk through them.

David:
Have you seen a pattern of others around you that want to get a piece of what you’re doing, whether it’s business, entrepreneurship, tech, real estate, and you’ve noticed the thing that stops them from pinning through the doorway of where you’re at is a lack of humility?

Evan:
I think a lack of humility always turns into ignorance because you mix humility in with learning. And when you learn, that’s where innovation comes from. And I think a lot of guys, they’ll stop at the door when they see how hard it takes or how many loops they have to jump. Or sometimes the number one thing, as you guys may know, everything ruins when the percentages come in and we’re fighting over money that doesn’t even exist yet. You know what I’m saying? I think a lot of times those dudes are so wary of coming into those problems mixed in with, if you don’t surround yourself with the right people, there’s a lot of crooks in this day and age as well. So I think guys stay on the stoop more so than going to adventure off.

David:
So you’re referring to the people that are arguing over the split of an endeavor before they even understand how the money flows or what they’re going to be doing, right?

Evan:
Yeah, just that type.

David:
Which is really ego, that’s what you’re getting at, right?

Evan:
Yeah, absolutely.

David:
I need to have the bigger share because of my ego, even though they don’t really understand. I’ll give you an example that makes me think about in sports. Sometimes you see a player negotiate a ridiculously large contract for them on a team and then the team has no money left in the salary cap to bring anybody else in, and then they lose.

Evan:
Yeah. And then they’re talking about, I’m trying to win, I’m trying to win. It’s like, bro, with all due respect, all the great gave up money. If you want that 20 point score… You know what I mean? 35 million and 40 million, it’s a difference, but it ain’t much of a difference. You’re going to get it back some way.

David:
In other ways, that’s exactly right. One of the things we’ve been talking about within the businesses I run is, stop talking with words telling me what you want. So you’d hear these people say, “I’m doing everything I can to bring a championship to the city.” That’s what your words say, but your actions say, “I’m getting every dollar I can for myself,” and now they got to go bring in a 38 year old veteran or draft a rookie who can’t play yet to fit within the salary cap. Your actions are telling me, no, you’re actually just trying to get paid and the championship would come second. Now we’re not trying to win championships in real estate, but there is something to be said about what your actions are saying to the world and to other people versus your words.

Evan:
No, bro, that’s a understatement. You hit the nail on the head because when you break it down and you’re working with certain teams, it’s like, “Yo, this is about the development, this is about the bigger picture.” And sometimes you look at guys you would think they got a reality TV show following them around, you know what I mean? And I think one thing, the humility is, I’m willing to work as a team with this real estate group, I want to make sure I’m investing the best things and whatever can happen best for the group. It’s great for us because like Warren Buffet said, “You don’t want to lose a dime.” So if it comes down to like the urgent care campus I own, I just sold recently in 2021, I partnered 50, 50 with someone out there. You know what I mean? We took a responsibility, took the accountability. But I partner 50, 50 with someone out there in 2019. 2020 hits, pandemic occurs and we’re booming and all that type of stuff.
And just recently I was able to sell that at a 50, 50 split and got a sizable profit from there just off being able to partner up and not trying to control the situation and financing what is a right and good idea and good play. You know?

Rob:
Yeah. Well that’s awesome. So obviously you were crushing it there at the very beginning and you were diversifying there with all the different types of units. Now that you’ve spent some time in real estate, can you help us understand what your goals are and how you set those goals for yourself?

Evan:
Being honest with you, next thing I invested in is block housing. So it’s basically, in Columbus we got funding from the city or whatever, but it’s just more housing. Everybody’s screaming out that we don’t have enough rental housing and rental property. But I want to make sure we’re able to develop something where it’s providing more homes for people that grew up in my situation. You know what I mean? I definitely have ambitions of making sure… I do like to luxury real estate and the vacation real estate, but I definitely want to go back to my old neighborhoods and stomping grounds of that matter and building, buying portfolios and foreclosed homes and rebuilding a block. You know what I mean?

Rob:
Yeah. Is that something that’s important to you just because of your upbringing and everything like that?

Evan:
Yeah, I think it’s very important because at the end of the day it’s like, how hard is it to put something decent for the youth to grow up in? You understand what I’m saying? I used to hoop in the alley. It takes nothing to pave a spot, go put a basketball court over there or… You know what I mean? Go put something that is really going and help the families, but then also help the future. Whether it be a area with a decent swimming pool, an area with a decent computer lab or… You know what I mean? I want to make sure, in those city areas, much like, I don’t know where you all are from, but in the city areas, in those isolated dead areas, sometimes our resources, we get cut off from the rest of the world. So we don’t get the Whole Foods, we get the Dollar Generals or Save-a-Lots, you know what I mean?
We don’t get the Sunkist, we get the orange pop. You know what I mean? Like the knockoff stuff.

Rob:
Dr S.

Evan:
Yeah. Yeah. And I want to make sure we bring back positivity towards the hood because it starts with yourself. Once you start appreciating your environment and what you have, that’s going to breed confidence and everything else, so that’s one thing I really want to do that’s a big picture. And then other than that, I would love to own vacation real estate all over. I would love to do that in Lake Como, own in Bali. I want to own in Barcelona. It’s tons of places I visited. I definitely want to tap into those markets.

Rob:
I haven’t really dived into the international vacation rental market yet, but, hey, Barcelona sounds nice.

Evan:
But you’re diving into something that’s pretty cool though. What is it? The hotels?

Rob:
Yeah. Yeah, we bought a unit motel in New York-

Evan:
Yeah, yeah.

Rob:
… few months go.

Evan:
Yeah, I love that idea. That’s going to be unbelievable because that way you can theme everything, you guys are going to have theme type vibes. I think, obviously I want to steal your idea, but in the grand scheme of things, curating those type of environments and everything is something I would really be interested in, for sure. I think those type of getaways, even if you see my condo, it’s filled with art and just the type of vibe and theme that really curates your energy and mood.

David:
One of the things I really liked about what the government did with the tax code in the last couple years was the creation of opportunity zones where they rewarded investors with tax benefits if they invested into areas that they deemed as an opportunity zone, which were typically lower income, struggling. They’re not getting the same influx of resources that the nicer areas are going to be. What are your thoughts on that principle as a way of building wealth that as the investor improves the area, they also make themselves money and you have a win-win scenario?

Evan:
Yeah, I think it’s necessary because you have to entice people. You know what I mean? I don’t think anybody’s going over there or any smart investor is going to try to go over there and start with rebuild where there’s no guarantee of anything coming to support you. So I think that’s a perk you get for taking that type of chance and trying to rebuild certain parts that literally been systemically forgotten. You know what I’m saying? When we talk about those opportunity zones, we’re going back to the 1940s when we’re talking about the racial wealth gap in America and everything that’s happened systemically, the housing loans only granting 98% of the best real estate to whites. You know what I’m saying? That type of situation. So I think when it comes down to it, we hate talking about reparations, but in certain areas you have to have that to support, especially, when it comes to black athletes or black entertainers that made it out that area. Odd are, a lot of times, unless it’s super beneficial or developers haven’t talked about building that area up prior to or trying to gentrify it, nothing’s ever coming.
And the only people helping other people that climb out that barrel from the other crabs, you know what I mean?

David:
Yeah, for sure.

Evan:
So it’s deeper than rap. I hope the city and everybody in the government keeps trying to do more to help invest in those upbringings. Because at the end of the day, much more than real estate, we’re only as good as our worst guy, you know that ,David? We’re only as good as the last man on the bench. I’m not saying anybody in those low income areas, but at the same time it’s just a truth. There’s no such thing, I’m not okay if I’m making a bajillion dollars and the guy the street is messed up, that’s just not ill.

Rob:
Yeah. Yeah. I think opportunity zones do create that win-win for a lot of people. We actually did a whole episode with Malachi Sims, episode 599, for everyone at home listening. I would really recommend checking that one out.

Evan:
Yeah.

Rob:
Oh yeah, I have all the episodes memorized. No, I’m just kidding. I looked it up. But have you done much investing in opportunity zones yet or is that a big goal for you moving into 2023?

Evan:
So recently, with the block housing, I just invested… Actually, from a shoe company that I signed with, David, coming out I took a bunch of stock back in 2010. That stock was at a few pennies that grew to a bunch. I was able to take money out of there and invested strictly into opportunity zone. So like I said-

David:
Did you avoid some of the capital gains from the gain you had in the whatever?

Evan:
Yes, yes, yes, yes, yes, yes. So like I said, that’s one, in circles from having a great team, that don’t let me take all. Shout to Steve Vujevich, [inaudible 00:36:13] Financial, that was the team doing that. Matt Anderson, that was the team doing that and making that play. So when we were able to do that, we’re able to put it into opportunity zones, the block housing. And with that, the city was able to work with us as well. So we’re able to be able to build some stuff coming up. We’re in production right now.

David:
That’s what I loved about the opportunity zone approach is it didn’t try to guilt people into investing money into something that would lose them money. And it didn’t say, “Well, forget it, they don’t pull themselves out so let’s just ignore.” There was a way of saying, “Listen, rather than, us, taking your money and the government trying to make this better, which is going to be 10 times more expensive than it should be and be a terrible job, let’s take the people that are good at real estate investing, give them a tax break to get them to go in and do what they are good at. And then everyone wins.” And I love, Evan, how you tied it together, where you added the team aspect we talked about earlier. You had people that understood the shoe business. I’m sure your contributions to that company, when you bought the stock for pennies, you realize some of your direction, council, guidance, whatever resources you’re bringing to that investment would make it more likely to be successful.
Then it does well. You take the profit out, you reinvest it into the thing that you care about, it benefits you because you don’t get hammered on taxes. So now you’re not dis-incentivized to do another project just like it. And you get to invest in the area that matters to your heart, which gets you more motivated and amped up to do it again. As opposed to, like we said, you had that bad experience on your first deal, you don’t want to do it anymore. If you have your bad experience with your first, I’m trying to help somebody at my own expense now, you don’t want to help anymore.

Evan:
Yeah. Right, right, right.

David:
Everything worked well, now you want to play the game harder.

Evan:
Yeah, no, and that’s absolutely right. I think one thing that’s occurring now that I retired, just being an adult, I want to take the gloves off, and obviously have my team with me, but have my hand held a little less. You know what I mean? And in order to go from being an investor and developing smaller things to, like I said, getting groups and me being a forefront of the funding and developing big commercial buildings where there’s a seven 11 at the bottom or whatever cool chain store there is and there’s luxury buildings up top. You know what I’m saying? So I think that it’s a next level of playing harder and trying to make it to the Hall of Fame to say the least.

Rob:
Yeah. Well, we have a understanding of where you were growing, but can you give us a snapshot now of the different types of bigger projects and developments that you’re working on? Because I know you’re doing a lot of development now, right?

Evan:
Yeah, so I’m doing a lot of development now. So even as of recently, I invested it into a unit right off on, it’s called San Marcos residence. It’s in Austin, Texas. So I invested that with Schiff Capital. So it’s about 95% occupied. It was a old, I believe, hotel or something. We invested, we refurbished it back in 2018. It’s a college apartment building, probably 150 doors, 200 doors. So I thought that was a pretty big one I invested in. Right now I have a vacation property that I bought during pandemic for two. I put a little bit into it, probably three. I have it on the market right now for 11. So it’s 8,000 square foot, three houses, guest house, pool, seven acres inside Brier’s Creek golf community right outside Charleston, South Carolina, three miles from Kiowa. So you see that little area, that little area’s been booming.
Obviously, everybody knows about Charleston. It’s one of the most tourists visited cities in America. And we got with a group down there, I think when I first bought the spot during the pandemic in 2020, and obviously as a fixer upper, but I was looking into just using as a vacation property for family and everything. But halfway through, the market, it jumped crazy up. And the house I was building was already pretty spectacular. And I was getting a lot of compliments on it to the point where I was like, if I can make this flip and sell this, I would love to continue on, take that money, buy acreage, and start doing a little 12 unit development.

Rob:
Man. Okay. I don’t want to gloss over this. That’s a crazy, crazy project. So-

Evan:
Yeah, I’m trying to be humble about it because-

Rob:
Yeah, I know. I know.

Evan:
If you and I were off this, I’d be hyping be like, bro, guess what I just did. Do you understand what I’m saying?

Rob:
Oh yeah. Definitely.

Evan:
But I’m trying to be calm and not make eye contact and hold my smile.

David:
Oh, no, no.

Rob:
I like that.

David:
We’re going to change that right now. You’re going to tell us exactly how you did this?

Evan:
Yeah.

Rob:
Hey, look, I’m turning off the record button. Click. Okay.

Evan:
All right.

Rob:
Now you can tell me and David. So, all right, you stumble upon this property, you say it’s a vacation property. Let me clarify. Do you mean a vacation rental? Is that the idea? Like it a vacation rental?

Evan:
Oh no, no. Just a vacation for me and my family. Family home. Like a getaway. From Columbus is an hour plane ride. You land three miles at the airport, three miles, you’re right there into 85 degree weather nonstop. So I’ll go back into how it started. So I was looking into vacation properties and rental properties and I kept hearing about Charleston, Charleston, Charleston. And obviously I don’t like being on planes like that. So I was checking the time limit and everything for flights and I found I was only an hour away. My mentor once again, had people in the area that were very familiar with it. So I was able to go out there, start house hunting and start searching. And we stumbled across Brier’s Creek golf course. And the developer of the golf course was actually selling his own house.
He built it and everything, he was selling and he was trying to get out of there. I think he’s trying to move somewhere to some part of South Carolina, and we showed up. And prior to that we had went to Kiowa. And if you go to Kiowa with anything under 10 million, you’re not finding anything with space. And on top of it, if you’re spending that much money, to me, I want land. So that’s why I ended up in Brier’s Creek. And once I saw the seven acres and the three houses, and I knew it was a fixer upper, I was like, okay, I’ll be able to get this for a pretty good price. The price wasn’t terrible, but the number one thing that I did was try to go out there, find a house and find a contractor that I could trust. You understand what I’m saying?
A contractor that knew the area. And that was my guy from Redwood Contracting and that was Tom Cresanti. And from there we tried to figure out the best way to build the best house and not lose money into it. I like lavish things, I like nice things. So some of our tastes are a little up to par, but when I bought it for two, I was able to put three into it. During that time, I don’t know what happened to the housing market or anything, but my land, my space, everything just catapulted to the point where, by the time it was getting done, we were able to put it on a market for damn near double. You know what I’m saying? And –

Rob:
Yeah. Did it sell?

Evan:
So we just put on a market two weeks ago and-

Rob:
Oh okay.

Evan:
… so we have somebody coming tomorrow to take a second look, so it’s people all over. Not to brag on it, if it doesn’t sell by then it’ll be on Selling Kiowa being recorded on the 15. I’ll send you guys a link over after so you can see. But it’s a beautiful crib. And to go deep into it, I think timing and luck, and not just luck but timing and when you know it’s right, it’s right. I didn’t hesitate on this feeling because I went out there trying to probably spend one something or something under, I wasn’t naturally going out there to go in and refurbish something. But once I realized the investment in the property and I saw the opportunity, I’m like, okay, I understand what my budget was, but if I’m up here and it’s an opportunity to do it, I’m going to do it right.
And I think that commitment was what really allowed me to reap the fruits of this labor because I wasn’t hesitant. I was like, I believe in this area, I believe in what I bought, I’m not about to do what prior homeowners did and just buy a crib and just not invest what it should. You know what I’m saying? And it’s like, if this area’s worth it like they say, I’m going to set the tone or at least follow up with my next door neighbors and refurbish the house and add value into the community. And I think that’s one thing I committed to doing that really, I guess, made me look genius, which wasn’t.

David:
Well, I don’t know if I’d say it wasn’t. Part of the genius that expresses itself on a basketball court is when you see the right play to be made in that moment. It’s very hard to translate that onto like Xs and Os, you can’t write it down on a piece of paper and say, this is how you know when you’re right you’re right, it’s a feeling. You’ve played enough basketball, you see the opening, you know what you should do in that scenario. Investing works out the same way. A lot of times I think geniuses express through feeling. It’s very difficult to describe how Eminem can write a rap that is different than someone else, or Beethoven can create a symphony that is different. With this project you recognize through a feeling, I need to rehab it, I need to remodel it the right way. Other people don’t see the angle of how important this is, but you did.
Now, on the flip side, you mentioned timing and luck. You actually probably had some bad luck and some bad timing. You had some good timing buying the property and the vision. But then interest rates have been skyrocketing right after you bought this thing and you put it on the market as rates are going up, and more expensive properties are absolutely more susceptible to more… What’s the word I’m trying to say here? The higher a price is, the more sensitive it is to the interest rate. So an $11 million property is much different than a $400,000 property when rates go up. So how have you handled that, oh, I wasn’t expecting this, right? You just got a double team thrown at you. They put a full court press as soon as you caught the ball. You’re going to have to adapt, in a sense. How have you handled the struggles that have come from, this isn’t the best market to be selling a luxury property now that I’m ready to put it on the market?

Evan:
Honestly, it’s like what you heard at the conference. Sometimes when you’re hitting a home run, you can’t worry about the outfielders. You know what I mean? And one thing, know what you know. Not everybody’s buying cribs. Not everybody’s doing this and the other, but I’m not pertaining to a certain type of market. You know what I mean? So the people that can afford an $11 million crib or afford this, that, and the other-

David:
Yeah.

Evan:
They haven’t stopped shopping.

David:
That’s a great point.

Evan:
They haven’t stopped living, they haven’t stopped hopping on their jets, they haven’t stopped hitting their yachts. You know what I mean? One of the conversations the dude had with me was like, damn, I low-key want a deeper water. So it’s like, damn, baby, you want $20 million worth of stuff. You understand what I’m saying? So I think the number one thing is, you’re a shark, you’re a lion, Rob, you’re the same thing. When you swim with sharks and lions, you don’t really worry about eating grass. You understand what I’m saying?

David:
I’m so glad to hear you say that.

Evan:
Yeah.

David:
Because the people listening to the podcast that are the most discouraged, they’re buying the $220,000 property in the worst area where there’s 100 more of them in the same space and they’re having a hard time making that deal work or they’re having a hard time finding the opportunity. You went out and you found a property that other people were not looking for, you remodeled it better than the other homes around it, knowing that would be a good return on your money. You did it in an asset class where, quite frankly, and this is the point I was going to make but you made it for me, a lot of people buying 11 million properties aren’t getting loans in the first place. So they don’t care what the interest rate is.

Evan:
Yeah, they don’t care, yeah. The lady’s just like, I wish we had more space on the first flight. They’re worried about that type of thing.

David:
Yeah, they’re going to go spend $2 million to knock walls down and add it to make it bigger. Money doesn’t mean the same thing to them that it does to us. Right?

Evan:
Yeah. And that’s humbly speaking. So I’m not trying to say anything from that sense, but that’s literally what the mindset of-

David:
It’s smart, that’s what I’m getting at. You zigged when everyone else zags and that’s why you’re seeing opportunity when other people are just getting discouraged and saying, our real estate’s not working.

Evan:
And, Dave, what do you think…? And, Rob, you guys can tell, I have the same mindset for everything. I think it’s almost like, was it the Battle of the Alamo? They burn the ships. You know what I mean? I’m a burning ship type of dude. Obviously, not throw all my money in it or anything, but I’m not going into anything with fear. Do you understand what I’m saying? Granted, with my preparation and everything prior to that, but I put great mojo, great belief, and great energy into my team and a preparation into it that it’s like, yo, when they come see this or whatever work that I have, when they come see this, they’re going to understand. You know what I mean? I believe that the right people showing up are going to understand and they’re going to want to purchase a property and love the property and see it far out amongst the times.

Rob:
Yeah, totally. I don’t know, I think a lot of people just aren’t down with mistakes and failures and so when that mistake happens, they get to that point, it’s a lot harder for people to grasp and they’re like, I’m going to be real stubborn about I, I’m not going to learn from this. For me, I’m just like, look, real estate is all a journey. I always say we don’t become real estate experts by everything going right, we become real estate experts by everything going wrong. So I don’t really go into stuff with fear either. But I’m also down for whatever happens. I’m like, I will become better, smarter, wealthier, from whatever happens from whatever deal I make.

Evan:
And I hope we never lose that invincibility, for real. You know what I mean? Because that’s a skill, that’s a talent because, for whatever reason, whatever God gave me, I don’t worry about the serious stuff and then I’ll flip out over if somebody ate my last brownie. You know what I mean? Something stupid like that.

Rob:
Yeah. Well, but it really is those little things, that’s what makes us invincible, genuinely. I’ve had so much stuff happen to me in my short term rental journey. A couple weeks ago someone said an intruder broke in. Cops came, there’s a manhunt. It turned out that they just turned on the light switch and scared themselves. A couple weeks before that, I had four bears break into my cabin. And the intruder situation happened when my neighbors were at my house having dinner and they were just like, “How are you so calm? This is a big deal.” And I was like, “Well, it’s probably not really what you think.” And all those things that blow up are really never a big deal to me. I feel I’ve got such thick skin because of all the little bruises that I’ve encountered along the way. And now I’m just like, literally, effectively, anything can happen to me and I’m going to be okay because I know that there’s always a solution. It just may not be convenient.

Evan:
And you also need that poise because you comprehend, once you handle one solution, it’s always going to be another problem. You know what I mean? So I’ve been trying to just learn how to be a solution maker and keep my poise through there. And at the end of the day, with the solutions, it allows you to comprehend, you’re staying focused on the big bigger picture.

David:
One of the ways that I’ve found to help overcome that fear of making a mistake, fear of losing something, is I stop looking at money the way I used to, like you’ve mentioned a couple times of, Evan, I see money now as a store of energy. I put an eight hour work day in doing this thing. I was given money as a way of storing the energy that I put in on that workday. And I can take that energy and I can convert it into real estate where it will grow, stocks where it might grow. I could go spend it on Air Force 1s and I’ve converted into shoes that don’t store energy very well. I’m like Neo in The Matrix where I’m seeing the code as opposed to just seeing the wall that everybody else is looking at. And money comes and it goes, you’re going to make mistakes.
If I use the same analogy of basketball, when you’re learning to play, you’re going to make turnovers, you’re going to make mistakes, you’re going to lose, you’re going to get shots blocked. It’s weird, I could tell you the stories learning to play basketball where I first learned the painful lesson that if you’re not really fast and you’re dribbling the ball on the open floor, people will come up behind you and steal it. I remember just thinking, I think it was probably around the time I went from eighth to ninth grade, damn, these varsity guys, they will jump in between and intercept the pass you through. You can’t look right at the guy you’re going to throw it to.

Evan:
Yeah, yeah. Yeah, yeah.

David:
If I get a rebound and I don’t hold it really hard, someone’s going to smack it out of my hands. This stuff sounds silly, but it was a paradigm shift at the time. I have to approach playing basketball differently and then I adjusted to it. But if I wouldn’t have put myself in this situation to make those mistakes, I wouldn’t have gotten better at what I did. And by trying to avoid money, if you never invest it, if you never jump into a new endeavor, you just don’t get better, and you live in a state of fear your whole life. Even though I made the turnover, I learned a skill. Even though I threw a bad pass, I left my feet to pass, I missed a shot, I learned something about basketball, and that can’t be taken away.
That’s how I tend to see business endeavors in entrepreneurship. If you are looking at how you become better, the turnovers don’t matter. That means you can’t have an ego. You can’t be looking at these scenarios and saying, “Well, if I failed, that means I may failure.” You have to look at it like it’s a game. If I lost the game, I got better, I’m more likely to win the next one, and I ascend into higher levels of competition with more rewards. And that’s what I’d like to pull out of what you’re describing right here, is this humility you have is such a powerful force in your success because you’re saying, “I’ll burn the ships and I’ll figure it out as I go and they might kill my whole army, but, man, I will learn a lot about warfare and I’ll build a better army and come back and I’m going to win that time.” Those skills never leave you. And that’s the real value in what you’re doing.

Evan:
Absolutely. And I’m glad it translates, you know what I mean? And one thing my mentor always just told me, take full advantage in the NBA., Take full advantage of basketball, because it’s going to teach you everything you need to know about running your own business one day. So a lot of times we correlate it sometimes. Number one things just coming back from what I learned on the court and learnt from the people around me, you just take it step by step.

David:
There’s so many times where people like you that have been very successful have had a foundation in something, for you that was basketball, applied it to a new endeavor, business, and your learning curve was much shorter than everybody else’s. You hit that point of success quicker because you had this foundation to build on. And that’s why I’m always preaching the message that, quit looking at real estate as the escape from the life you don’t like, you’re bad with girls, you hate your job, your boss doesn’t like you. If you can’t be good where you’re at, you’re probably not going to be good when you get into the new thing. Instead, develop excellence in whatever job God happens to happen you in that moment and then apply that to the next opportunity that you get. And it’s like this staircase approach. And that’s what I love about what you’re sharing is you didn’t have an advantage over anybody listening to this or anyone else doing it.
It’s not like you just had advisors fall from the sky and angels come up to you and say, “I want to help bless you.” You had a foundation that was helpful to you and you just built on it. And now you’re talking about, how do I get bigger? I have a vision, I want to get into development. I want to have luxury condos with a 7-Eleven and a CVS at the ground floor. I want to pair stability, which is low risk, low reward, with luxury, which is high risk, high reward. And you see these angles because of the stuff you’ve done before. And so that’s one of my favorite parts about the story that you’re sharing is it’s encouraging that whatever team you’re on, whatever sport you’re playing, whatever thing you’re doing, give it everything you have, show up and do your best every single day. And then look for the people to start passing you the ball rather than the guys that say, “Well, when I get the ball then I’ll try. When I’m the man, then I’ll give my effort.”

Evan:
No, and you’re absolutely right and I’m glad we hit that point because a lot of times, even with friends, and I’m sure the same way, people think it’s some type of pill you take. You know what I mean? Or some type of drink you have or you go to the store and grab medication, it’s like, “Nah, dog. It started 10 years ago, back when you thought it was unsexy and cool.” You know what I mean? Or, this hard work or whatever you’re going to get isn’t going to be cool. By the time you reap your benefits, you probably don’t even care about them because you’re already on something else. But you know what I mean?

David:
It’s a great point.

Evan:
You’re literally that locked in-

Rob:
That’s exactly how it works.

Evan:
You’re literally that locked in and passionate about it and then six years down line you’re like, I did that six years ago. I was a real life animal and I hadn’t… But before you know it, and luckily so, you pick your head up and it’s a consistency of greatness or a certain level that you maintained that allows you to cross over like we all have in order to be successful. And I’m just grateful to be-

David:
Especially with real estate.

Evan:
Yes, yes.

David:
Rob, wouldn’t you agree that the best deals you’ve got going right now, were probably the ones you bought the longest time ago.

Rob:
Oh, of course. Yeah. We’re all a genius because when you buy 10 years ago, you’re a genius at any point in the cycle. so-

Evan:
Yeah.

Rob:
Yeah.

Evan:
And everybody’s like, “How’d you do that? How’d you do that?” It’s like, well, during this time I picked up weight, I went and did this. Literally you just invested and left. You know what I mean? In certain areas, it’s not like you’re standing there working it, working it, working it. But there’s certain stuff where you invest it, leave, make sure it’s getting ran and just stay and keep it set up on a certain form of consistency to be the go of the times.

David:
Which is so funny because everyone’s looking for the opposite. They’re like, “I hate my job, I want to just focus on my one property all the time.” And that never works. It’s literally the best properties I have are the ones I forget I own, if I’m being honest. When I forget that that is my property, I’m like, damn, look at this, it’s been making all this money for all… The ones that are crossing my path all the time are the ones I didn’t like. And there’s definitely a trend with the more recently I bought it, the worse it performs. And that stops a lot of people because, what I say is they look at year one. They run an analysis, does it make me an 18% return right off the bat? It doesn’t, bad deal. I’m moving on to the next one.

Evan:
Yeah, you might as well go hop on Robin Hood if you looking for that type of return. You know what I mean?

David:
Yep.

Rob:
I often get people that are like, “Well, of course you’re doing well. You bought the property five years ago.” And I’m like, “Well, guess what? 10 years from now you’re going to be saying the same thing when I look smart for having bought consistently.” It’s funny.

Evan:
And I always tell friends, just buy something. Not buy something, but eventually it’s year four or five and we’re still pump-faking on you buying your first property. It’s like, “Dog, this is pointless. You could have had three or four by this time and we could have been having this conversation in a completely different atmosphere as opposed to my condo.”

David:
I’m so glad you said that. That’s exactly right. I look at it like, okay, in five years, how will this property perform? I almost don’t even look at year one. I make sure I have enough money in case it goes poorly, I can float it. But I want to know how am I going to feel in five years to 10 years and all of a sudden the metrics of decisions you’ve got to make become a lot more clear. That $32,000 Indiana property that you’re like, “Oh, that’s so tempting, man.” No it’s not, when you look at 10 years later and it’s worth 33,000 and every day you’ve had a new issue with it.

Evan:
And those are usually people that go and tell everybody, y’all, I own this property, I own this property. And it’s like, bro, that’s the worst property you could have ever chose.

David:
Yes.

Evan:
Literally.

David:
Yeah. It’d be like buying a bunch of terrible cars that you dump all your money into all the time, but you’re bragging because you’re like, “Oh, I got 12 cars.” You’re like, “No, you have 12 problems.” You don’t want that. Right?

Evan:
Yeah. No lie. That’s real. That’s real.

David:
And that’s why humility’s so important because it’s ego that leads people to say, “Man, at the next conference I go to, I want to say I got X amount of doors, I got X amount of units, right?

Evan:
And, bro, that’s one thing, I’m a competitor and I compete at basketball at a high level, but I’m good on a journey and minding my own business. You understand? I think one thing that occurs as you get older, even doing contract negotiations, the humility in that is making sure you don’t miss out on your money or the right deal or situation worrying about what the person left the right has. You know what I mean? It’s like a marriage, that relationship has nothing to do with anybody besides those two people. So when it comes to my real estate journey, it’s like, hey, if I’m going to do this 10 unit over here, I would love to come back to the next conference with 10 or 15 more units, but the interest rates aren’t hidden on that property right way, or I might have to wait until this sells or that sells. It’s like, that’s my situation and God willing I’m around for 100 more years to keep turning flips and keep making the next move my best move.

Rob:
David, I’ve got an analogy as we wrap up here to… I think I’ve got two.

David:
[inaudible 01:01:54] pocket have led to some inspirations.

Rob:
Yes, that’s right. I would say that this podcast interview was a slam dunk.

Evan:
That wasn’t even supposed to be funny. It just shocked me. That shocked me.

David:
Oh that’s so bad. That’s so bad that I laughed at it.

Evan:
It was a triple double, I’ll say.

David:
You also reminded me of what it was like to host a Brandon Turner who knows absolutely nothing about every sport.

Rob:
That’s me.

David:
He would impressed me with how little he knew about any sport at all.

Evan:
That beer was impressive though. And he’s six, six. So I’m surprised he never played any sport. But he’s a surfer though.

David:
Well, he got into surfing mostly because he’s terrible at sports. And so…

Rob:
One of the first jobs I ever got out of college was I was a copywriter for Gatorade. So I would write all of their tweets and all of their Instagram posts and Facebook posts and then when they were interviewing me, they were like, “Yeah, so are you a sports guy?” And I was like, “Me? Yeah. Oh, yes. Love all of them.” And then when I got hired, they were all like, “You’re such a liar.” And I was like, “Well, you like me though, so it’s all good.”

Evan:
Man, I feel you. But any job, when he asks, “Why are you here?” It’s like, “Bro, I’m trying to get paid. Don’t ask me that question, why am I here? I can do it all, sir.”

Rob:
That’s right. And I did all right. I did All right.

David:
I love the Gatorade marketing campaign. Did you have anything to do with this one, Rob, where they would take the black and white athlete and they would make their sweat the color of the Gatorade? Do you guys remember that?

Evan:
Yeah.

Rob:
Yeah. That was literally when I was born. That was like 1990, 1991. But I’d love to take credit for that.

David:
That was a cool thing they did.

Rob:
Sure. Yeah. I made that up. That was my thing.

Evan:
The coolest Gatorade commercial was Phil Jackson discussing Michael Jordan, when he is talking about the flu game.

Rob:
Oh yeah.

Evan:
And he was saying, that’s the first time I ever believed in Will. He was like, “That was the first time I ever seen Will really be a thing.” You know what I mean?

David:
We were talking about that the other day. Just how certain scenarios or environments will bring the best out of you. That’s what happened. His environment, meaning how he felt, was so hard that he had to rely more on Will to have the flu game, which is NBA iconic performance. And I think that’s so important of a lesson because there’s people that come from incredibly difficult environments that have a lot of pain and they waste that pain. That pain is a fuel that will propel you way past the comfortable person who grew up in Orange County and went to an Ivy League school and has nothing to drive them, right?

Evan:
Yeah, absolutely right. You don’t know how many kids that come from my AAU program or come from my background or even certain teams I played on, and I’ll be like, yo, he’s as good as you, he’s you were, and da, da, da, da. Then when it turns out he wasn’t, it’s like, bro, do you know what background or upbringing I came in where it is deeper than just if you put a ball through the hole, this is Darwinism, this is survival of the fittest. It’s either we’re eating today or we’re not. So I’m never-

David:
Those are people that win.

Evan:
Yeah. And I’m never losing, period, point blank.

David:
That’s a beautiful approach because whether people won’t admit or not, that’s the real estate environment we’re in right now. There are not enough of the best homes to go around. Interest rates were kept very low for a long time so people got into our game that never wanted it. But business people are now investing in real estate because they can get a better return here than they can in other things. The tax code benefits real estate more than other things. And so wealthy people… Everyone’s fighting over these things and you were just over here, man, I can’t find a deal, I don’t understand. They don’t understand, you’re lions and you’re all trying to find the few gazelle that are out there. And that’s why you’ve got to listen to a podcast like this and approach it with everything you have. Like you’re saying, it’s Darwinism and those that understand that are the ones that win and those that think that they’re in a communistic, kumbaya, “Oh, no, everything’s going to be fine,” are very frustrated that things aren’t working out.

Evan:
Man, when (beep) get tough man, like this, my fault for cursing, but I snap into a slim gym. This is crunch time, fourth quarter, I like these type of situations. So I’m sure you guys are the same way. So it is a hell of a time to be in right now.

David:
So on that note, I’ll ask you, Evan, before we get you out of here, where do you see the future of real estate or the economy going and what’s your recommendation for the moves that people should be making in the next two years?

Evan:
Well, the first one, I hope the interests rate drop sooner than later. I for sure want that to go on. And I think it’s going to be something in a similar fitting, the same way of how the world is going as well. I feel like everything is a borderline of improv mixed in with casual. So I think we’re going to see a lot of more developments, more properties and more innovative uses in the real estate market that is going to be cool. Similar to the 20 unit hotel you bought in New York and how you’re changing that type of real estate market. I can’t really put a thumb on it, but I think anything goes right now in regards to the real estate market, what you create and what comes about and I’m looking forward to that.

David:
Beautiful. So look for creative ways rather than just trying to push the same square peg through the round hole that isn’t working.

Evan:
Yeah, because you got to break it down. We had this argument earlier, I guess we’re turning to the cooler, older unhip guys, you know what I mean? Or the weird older unhip guys and that’s still pretty cool. So imagine what we’re going to create, you know what I mean? It’s not going to be the same, stick up your butt, suit and tie, weird type of stuff. I think it’s going to be some cool, hip creative stuff where hopefully it turns into one big game of Sims. You know what I mean?

David:
Well, if that art in your background is any indication, you will be one of the forefront leaders in that movement. So thanks for spending your time with us and your thoughts, Evan, I appreciate it. They’re both very valuable.

Evan:
I appreciate you guys for real. Thank you, again.

David:
If people want to find out more about you, where can they go?

Evan:
If you want to find out more about myself, please tune into a Point Forward podcast, everywhere where you listen to podcasts. It’s actually amazing. It really is. And then you check me out on Instagram. My name is Evan Turner. E-V-A-N, T-U-R-N-E-R, and then also on Twitter, the kid ET, T-H-E, K-I-D, E-T. Show some love, holler at me, give me some advice, keep it classy.

David:
Rob, how about you? Where can people find out more about you?

Rob:
You can find me on… Well, okay, well first of all, look, typically, I would say you can go find me on YouTube at Rob Built and you can go follow me on Instagram at Rob Built. Of course, I could say that. But what I’m going to say instead of following me over at Rob Built is to go over the Apple iTunes review center with the podcast app, leave us a five star review. If you like hearing these conversations, these real world conversations of how to get started in real estate, please go drop us a five star review. It means the world to us and it lets us know that you’re listening and it helps us improve how we do the show. What about you David?

David:
Well, now I’m really wanting to know where I could find you and you’ve left me with an itch I need to scratch. After I do that, is there a preferred way of following you? Where’s your best content?

Rob:
Oh yeah. You could find me over on YouTube at Nothing but Net. No, I’m just kidding.

Evan:
Like what?

Rob:
Yeah, it’s my sports channel, actually. You find me at-

Evan:
Why not? Why not, right? Nothing but Net.

David:
Oh my gosh, I forgot that was a phrase people used to say, Man, we were really corny in the ’80s. That is such a nothing… Yeah, that was a thing that was said.

Evan:
Swish.

David:
Yeah, Swish

Rob:
NBA, baby.

David:
Every one of Rob’s basketball references comes straight out of NBA Jam. He’s the guy that’s like, boom shaka laka every time he-

Evan:
From down town, and defense.

Rob:
I told you man, I’m an ’80s baby.

David:
What we used to say when you blocked a shot, you got packed. Remember that?

Evan:
You got packed.

David:
I haven’t heard that one in a very long time.

Evan:
No. The best thing I think that still hangs on that hasn’t been corny, and one of the best basketball commercials, was the Sprite, Tim Duncan, Kobe Bryant commercial. But anytime you miss the dunk, the label was like, you just got to Sprite it. You know what I mean? I thought that-

David:
That was good. I used to love the Sprite commercial with the three actors pretending to be hard basketball players, but they were like thespians.

Evan:
Wait, no, I got to look that up. I got to-

Rob:
Excuse me. Excuse me. What’s my motivation? That guy.

Evan:
I got to check that.

David:
Oh, that’s a really funny one. Rob, we talk about it all the time because he’s always asking for his motivation. He is a thespian. Pretending to be a podcast.

Rob:
I did letter in theater.

Evan:
Oh, did you?

Rob:
That’s how cool I am.

Evan:
Well, what role broke your heart that you decided to leave?

Rob:
And it was Snoopy in You’re a Good Man, Charlie Brown.

Evan:
That’s funny.

David:
All right, Evan, thanks a lot, man. It’s been great having you. I don’t know if we have plans from you to your podcast, but I’d be happy to do it. I think it’d be a lot of fun.

Evan:
No, I’d be lit. We would love to have you guys on. Thank you for the hospitality. This is lit. What you guys are doing, it’s unbelievable. I’m grateful for what you guys do week in and week out. And I once again, thank you for being so open when I showed up to the conference and everything. You guys are awesome guys. I really appreciate you. Thank you.

David:
Thank you, Evan. You can find me on social media at David Greene 24, and I just tagged Evan, so if you’re seeing this, go make sure you follow his account and get some good content.

Evan:
I’m going to repost, too. I hate when people don’t.

Rob:
All right, hold on. Let’s do this on air. I’m going to get a photo of us. Ready? That’s the first right there. That’s the first. Interrupting a podcast for a selfie.

David:
Yep.

Rob:
That’s good.

David:
That’s how narcissistic we’ve become.

Evan:
That’s how progressive the work field is.

David:
All right. Thanks, Evan. We’re going to get you out of here. This is David Greene for Rob, slim gyms in his shirt pocket, Abasolo signing out.

George Hongchoy of Link Asset Management believes that a wide price gap between optimistic sellers and cautious buyers are reducing deals in real estate markets, and someone has to move on pricing.

Ashley:
This is the Real Estate Rookie, episode 233.

Logan:
Yeah, I think it was just, I think I saw the opportunity. I kind of looked at the sales price history of that property and the surrounding properties in that area, and I saw that they were on an upward trend, and of course, we probably couldn’t have foreseen the appreciation that would’ve come in the year following, but I think I just kind of saw the trend and I saw it was on the up and up, and I just thought… Believe it or not, it’s actually only about 30, 40 minutes from The Hamptons. So, it’s a very black and white scenario where you have such a bad area and a very good area very close to it. So, I took the chance. It was definitely a risk.

Ashley:
My name is Ashley Kehr and I’m here with my cohost, Tony Robinson.

Tony:
And welcome to the Real Estate Rookie Podcast where every week, twice a week, we give you the inspiration, motivation, and stories you need to hear to kickstart your investing journey, and I want to start today’s episode by shouting out a very special listener who left us a five-star review on Apple Podcast. This week’s review comes from Jess Haas, and Jess says, “Start here,” with like five exclamation marks. “This is hands down the best place to start your real estate journey. From the minisodes on Saturdays to the guests, everything is pure gold.” Jess, we appreciate you. And for all of you listening, if you haven’t yet left us an honest rating review on Apple Podcast, please do. The more reviews we get, the more folks we can help, and that is our first and always biggest goal here at the Real Estate Rookie. So, Ashley Kehr, what’s up? How you doing today?

Ashley:
Not much. Super excited, today I submitted my final edits on my manuscript, so haven’t really told a lot of people because I didn’t know if I’d ever finish it. But yeah, so coming out January 2023 is going to be a new book that I wrote.

Tony:
There you go. Congratulations. Ashley, podcast host, published author, and professional hula hooper, all coming together.

Ashley:
And bull rider, don’t forget that too.

Tony:
And bull rider. But now, seriously, I’m super happy for you, Ashley.

Ashley:
Thank you very much.

Tony:
I’m excited to get my hands on the book, and the world’s going to love it, I’m sure.

Ashley:
Yeah, thank you very much. What about you, Tony? What’s new? You got your vacation coming up, very well deserved. And what else?

Tony:
We got vacation, but it’s always weird before vacation because you’re scrambling to get everything done. So, Ash and I were talking before we started recording how we both pulled all-nighters last night. It’s like we’re in college or something, again, trying to study for a final. But yeah, we’re just moving along. We onboarded a new assistant, so she kind of started last month, but this week was her first full week working with us. When you first hire a new team member, it almost, there’s more work initially just getting them trained up and eventually they’ll kind of be off and running. So, we’ve just been a little all over the place this week.

Ashley:
Well, we have a great episode for you guys today. The first thing is Tony once again finds a reason to talk about his Streetfort, Treefort, whatever, I still don’t even know what the actual name of the city is in Louisiana, and we actually kind of go into a rabbit hole about insurance in this episode. But I think it’s definitely worth listening, especially after we are hearing the impact of what has happened from Hurricane Ian down in Florida and just how your insurance can change and things you guys should be aware of and know as an investor for your properties, things to be aware of. But we have Logan on the show today. So, he is only 21 years old, and he is so cool. I mean, just listening to all the things he’s done already at the age of 21, I think it’s really remarkable.

Tony:
Yeah, Logan’s going to teach you how to not just do this anywhere, but how to do this in an expensive market. He’s going to show you how you can buy properties with no W2 job, no tax returns, and no car. And so, this kid’s incredible, man, and I think regardless of what age you are, you will really get inspired and motivated by hearing his story.

Ashley:
Yeah. So, before we bring Logan onto the show, we would love for you guys to join the Real Estate Rookie Facebook group. We have over 50,000 members in the group right now, and it’s a great place to get your questions asked, to share your wins, but also to help other people and answer some questions too. So, make sure you join the Facebook group if you guys haven’t already, and of course, subscribe to our YouTube channel so that you guys can watch the Real Estate Rookie Podcast and also see-

Tony:
See these beautiful faces.

Ashley:
Yeah, I think the tiredness of the all-nighters. I mean, that’s the second joke that you pulled today, Tony. But you guys could also get to watch our awesome contributors on the real estate rookie YouTube channel too.

Tony:
Logan, welcome to the Real Estate Rookie Podcast, brother. We’re excited to have you, man. Before we get into the nitty-gritty, why don’t you tell us a little bit about who you are and how you got started in real estate investment?

Logan:
Yeah. So, I think I was bit by the money entrepreneur bug pretty early on, I would say, probably before I even reached the age of 10, 11, 12. As far as the real estate, that was something that I didn’t think was going to happen this soon and early in my life. I really thought that was going to come much later down the road, maybe five, 10 years from now. It was really the pandemic that was kind of the impetus, the motivation to jump right into real estate. I had been studying it for a few years, reading books, watching BiggerPockets, courses, videos, but I took a big hit with my income mainly due to the pandemic, and that definitely put a dent in me, and I saw that interest rates were at an all-time low. I thought now was an opportune time, and I just decided to jump right in, and now I’m here with $1.1 million worth of real estate and growing and growing even more.

Ashley:
And how old are you?

Logan:
I’ll be turning 22 next month.

Ashley:
Oh my gosh. Congratulations, Logan.

Logan:
That’s amazing, man.

Ashley:
That is so cool. So, when you decided, you’re looking at, okay, interest rates are low, everything like that, was it like, “I’m just going to buy a house to live in,” or did you already know like, “I want to do an investment property”?

Logan:
It was definitely going to be an investment property, but I had no idea where to start. There were so many looming fears and the unknown. Maybe I thought I would start with commercial, like a storefront. Maybe I would buy something a couple blocks away from me and just put all the money I had into it. I really didn’t know where I was going to start. But mainly for me, I live on long island in Nassau county and obviously Long Island is one of the most expensive markets in the nation, and so, I saw there was an opportunity in the county next to mine about an hour, hour and a half away, and I saw that prices were much lower there, mainly because it’s not the best area, it has a bad reputation, and so, that’s where I started. I started in that specific city, and that was my first single family residence as my first property.

Ashley:
Logan, before we go any further, what does your portfolio kind of look like right now?

Logan:
So, it consists of a duplex that’s local near me, just 10 minutes away, and then the two single families are in that area about an hour and a half away from me. So, four units total, three properties.

Ashley:
Okay. Let’s just, let’s go back to the beginning a little bit. So, you were an entrepreneur. Tell us a little bit about your first business before you even got into real estate. Then we can go into as to what skills actually transferred over for you?

Logan:
Yeah. So, for me-

Ashley:
And when did you start a business? If you’re 21, when did you start your first business?

Tony:
Yeah, can we talk a little bit? Ash, what were you doing at 21?

Ashley:
I had just transferred colleges. Yeah, I mean, I definitely wasn’t running a business. I was interning as an accountant, I guess, while I was going to college.

Tony:
Yeah. Yeah, I think my 21st year, I think that’s when I almost flunked out of college. I changed my majors halfway through that year, and I still had aspiring dreams of being a hip hop artist. So, definitely not doing all the cool stuff you’re doing, Logan.

Logan:
It’s [inaudible 00:07:45].

Tony:
Yeah, maybe one day. Yeah.

Logan:
Well, for me, I actually didn’t go to college, but as far as the first money I ever made, I’m actually a magician. So, that’s really where I would say my money journey started was doing magic actually. As early as 9, 10 years old, I would do magic on the street and make a few dollars. I remember a $20 tip being the world at the time, and I would do gigs. I started approaching restaurants, and that was sort of my first introduction to money, but obviously not having the literacy or knowing to do with that money or budgeting it or managing it, that came a little bit later. But then I started getting into online business. I saw it was possible just naturally through the internet. So, I started doing drop shipping, affiliate marketing, email marketing, and other various forms, just selling items I had around the household. As far as trying to invest my money and actually grow it, I would say it really started with gambling. I tried gambling with horse racing, yeah.

Ashley:
You don’t hear that very often.

Logan:
No, I know. That’s where it started really for me. I tried to get rich quick too many times, but long-term investing came probably when I was like 17, 18 years old. I decided to start investing in stocks and have that long-term mindset.

Tony:
Logan, do you have family or a mentor or someone that kind of guided you towards real estate? Where do you think this initial interest came from?

Logan:
As far as real estate itself, no one in my family has ever done real estate, not even anyone distant. It’s never been in the family. The closest that I’ve ever gotten to money and managing and actually trying to do something with money was probably my father. Unfortunately, he passed away last year, but he tried many things online just like myself, and I don’t think he quite got anything to necessarily work in his lifetime, but I think that bug definitely bit me and probably was passed on to me through him.

Tony:
Yeah. Well, I’m sorry to hear about your father, but I guess we can tick solace to knowing that some of those lessons that he passed onto you are bearing fruit, man, so there’s always a silver lining there. So, you talked about the magician work earlier in your life and you’re still doing that today, the kind of digital marketing experience that you had. To Ashley’s question earlier, have any of those skills from those earlier businesses translated into the world of real estate investing?

Logan:
I would say that I’ve definitely made mistakes in both areas, real estate and online business in itself. I would probably say that having that long-term mindset, when I first started to build my business, I probably tried too many ways to build it too quickly or tried to throw money in areas that probably weren’t necessarily worthwhile. I think that sort of does translate into real estate, having that long-term mindset and looking many years down the road, and also potentially moving and managing your money in certain areas that are definitely more necessary and more of a positive return on investment than other ways to put your money into a property.

Tony:
Can we touch a little bit, Logan, on how you’ve been able to afford over a million dollars worth of real estate? At any age, it’s an achievement, but I think especially at 21, almost 22 years old. What did that process look like? Was this your life savings? Were you working with other investors? Just kind of walk us through how someone is able to purchase four units in such a short period of time.

Logan:
So, yeah, the units, that was purchased in under one year. So, the actual purchasing was definitely pretty expedited. But as far as the actual building of the money itself, that came mostly from just stacking away my money and hoarding that money. Every single year, I really tried to be as frugal as possible. A little expenditures here and there, little splurges, but I really was quite disciplined with investing my money and putting it all into stocks. I just put every nickel I had, try to throw it away, and really keep as little cash as possible. That was really going to be the plan before real estate was just going to be putting my money in stocks or in next funds, and maybe by the time I reach 40, 50 years old, I will have seven, eight figures worth saved up, and real estate probably wouldn’t have come for a very long time down the road.
But yeah, it was all through just being disciplined with investing and paying yourself first and keeping low credit card debt, open that first credit card soon after I turned 18. So, that definitely helped. But it was all just mainly through online business and life savings.

Ashley:
Logan, as a teenager earning this money, how were you disciplined to not go and spend it? So, when I was a teenager, I worked as a waitress and a hostess, and I remember I’d go home with my wad of cash from my tips and I’d count out my money and I’d put it in my save. Then when I went to college, I literally blew through all that money probably in the first semester. How were you able to stay disciplined to not just go out and spend that money?

Logan:
Yeah. No, I definitely have a few friends that same story as you, but I would probably say that I think I screwed up so many times early on, and I realized that I wanted to make that change and actually reach financial freedom, and I knew what it was going to take. And so, I think I had that mindset pretty early on and I think I sort of had that epiphany that in order to make this work and in order to create the lifestyle that I truly wanted, it wasn’t going to happen through spending and wasting your money and having little leftover after every month. So, I think the dream and having that goal definitely helped in that, and I learned that very early on. I don’t think it was luck. I think it was just probably maybe just my influence and who was around me and probably just what I learned, just learning so much at such a young age. I’ve been reading books and watching so many courses and et cetera for a very long time.

Ashley:
At the BiggerPockets conference this year, I felt like I heard so many people say the same thing, that if you want to really excel at life, if you want to take it to the next level, if you want to be successful, you need to change the people who are in the same room as you. You don’t want to be hanging out with people who are going out partying instead of wanting to plan a business or things like that. You want to keep your friends around you that are doing the same thing as you or even higher and higher than you, and I think that’s kind of what you’re touching on there is that you surrounded yourself with the right people to get your mindset right and to push you and to achieve you because being around people is contagious. You’re going to get caught into what they’re doing, You’re going to lose focus on what you really want just because you’re interacting with other people that don’t have that same determination, that same focus to reach and get to the next level.
We had Pace Morby on an episode and that should be coming out soon, and he talks about this too as to how he actually had to clean house on his circle of friends, and he’s like, “Yeah, that’s a hard thing to do, but I was really being held back.” So, I think that’s really awesome that at an early age you surrounded yourself with people who were a good influence on you and who actually helped push you to kind of get to where you are today.

Tony:
Can I add to that, Ash, before we move on? I’m so glad you brought that up because I think at any point in your life, your social circle is so important, especially if you’re a newer investor because even outside of just the support, the motivation, one of the things you get from your social circle is a new belief system, and I think that’s a part that a lot of people overlook.
If you’ve never made a hundred thousand dollars in a single year before, when you start hanging around people who have made six figures, you somehow believe that it’s possible. If you’ve never become a millionaire before, you start hanging around with other millionaires, now you suddenly believe that’s possible. If you have friends that have yachts, right, or private jets, you start hanging around with them, now you think that that’s possible. So, it’s like even outside of the support and the social aspect of it, I think when you surround yourself with people who are on the same path as you or have achieved the things you want to achieve, one of the biggest benefits you get from that is just the belief system that you can actually follow in those footsteps.

Ashley:
Logan, so with this pile of cash that you have shoved under your mattress at a young age, did you use this for a down payment? How did you purchase that first property? Was it all cash? How did you work that deal?

Logan:
Yeah, so that was all just accumulated in brokerage accounts, just sitting there growing on a monthly annual basis. As far as the real estate, that first deal, I wasn’t necessarily exposed to different types of financing specifically like a hard money or DSCR type of loan, or even if I was exposed to it, I probably wouldn’t have done it. I probably would’ve been too fearful to do it. So, I just started with a basic conventional loan, Fannie Mae, Freddie Mac, but the thing was is that I was still being claimed as a dependent on my parents’ tax returns so I didn’t necessarily have any tax returns. So, I actually had to go out and file two years worth of tax returns, which as you know, New York State, some of the highest income tax in the country, in order to qualify and show sufficient income on paper to qualify for that conventional loan. So, it was also the accumulation of tons of fees and penalties for paying late and everything like that.

Ashley:
So, you went back actually and took your… So, your parents, did they amend their tax return to no longer have you as a dependent and then you went and filed for two years prior?

Logan:
They didn’t necessarily amend theirs. It was just my own Schedule C self-employed income, and that was a hefty hit, probably like 40, $50,000 worth of taxes. But in hindsight, maybe I would’ve shown a little bit less income and just did a DSCR loan, maybe I wouldn’t have shown that much income on paper. So, yeah, that was first deal, a conventional loan, 20% down for that single family house.

Ashley:
Cool. That’s interesting. I never thought about being at an young age, not having that income. So, what income did you show on there? Your income as being a magician? Did you pull money out of the stock market that hadn’t been reported that you’re reporting now?

Logan:
So, I would probably say it was magic income, it was also online business income, affiliate marketing, all that, and I don’t think necessarily capital gain showed on that tax return just yet because the money was pulled out after. But yeah, so that was all the income that was shown on there. It was a big hit, but I think in hindsight it definitely was a good decision because I got two conventional mortgages and I might get another conventional mortgage out of it.

Ashley:
Awesome. So, you did the 20% down. What did your terms look like in that? You had said you noticed interest rates were low, so did you get in at a good time?

Logan:
Yep, that was a good way. I’d do anything to get that rate back. It’s only three and a quarter, believe it or not, on that first loan. That was last year and I closed on that property June of 2021. I locked in that rate probably a few months before, and so, do anything to get that rate back. And also, as far as the property itself, the price of that property was only 213,000 which at the time I thought it was overpaying for it.And especially in that area which doesn’t necessarily have the best reputation. It’s considered the armpit of Long Island. At the time I thought I was overpaying for it, and if you asked other investors in the area, they probably wouldn’t have even touched that area.

Ashley:
Go ahead. Name names. What’s the name of it? What’s the [inaudible 00:18:58]?

Logan:
So, it’s Mastic-Shirley area, Mastic Beach. It’s considered the dump of Long Island, but it definitely is growing and appreciating at a high rate right now.

Ashley:
How did you kind of work up the courage to invest in an area that has a bad reputation? I feel like most investors want to go to a good area where there’s appreciation and tenants.

Logan:
Yeah, I think it was just, I think saw the opportunity. I kind of looked at the sales price history of that property and the surrounding properties in that area, and I saw that they were on an upward trend, and of course, we probably couldn’t have foreseen the appreciation that would’ve come in the year following, but I think I just kind of saw the trend and I saw it was on the up and up, and I just thought… Believe it or not, it’s actually only about 30, 40 minutes from The Hamptons. So, it’s a very black and white scenario where you have such a bad area and a very good area very close to it. So, I took the chance. It was definitely a risk.
As far as, by the way, on the income, I’ve dispelled a couple notions so far, number one that if you’re my age, you can’t invest in real estate. And then also if you didn’t go to college, you can’t invest in real estate. If you’re living on Long Island, you can’t invest in real estate. If you don’t have any W2 income, you can’t invest in real estate. So, I’ve kind of broken all those barriers.

Tony:
Logan, I want to ask a question because you have these four units right now, are you living in any of your investments or are you still living at home with the folks? What’s the living situation look like right now?

Logan:
Yeah, still living in the same apartment with my mother. We rent, we don’t own. I own everything else though.

Tony:
That’s such a unique thing. I’m glad I asked this question because you obviously have the financial ability to go out and purchase property, but instead of doing it for your primary residence, you’re doing it to build a portfolio. And I’m seeing this theme throughout the conversation, Logan, where you’re able to exercise patience and discipline to move towards your goals, and I think that’s something that a lot of people struggle with, and people have the maybe financial ability, they have the mental capacity, they have the technical know-how to become real estate investors, but what they lack is the patience and the discipline to stick with it and execute and do the things they need to do.
You’re staying at home with your mom while you’re still building this real estate portfolio. You are super frugal with all this money you’re making at a very young age which most people can’t do. There are just all these things that you’re doing that show how disciplined and committed you are to your goals. So, if there’s something for our rookie audience to take away, it’s that if you want to be successful, there has to be a certain level of sacrifice. You have to give up something if you want that bigger reward down the road, and I think you’ve just done a great job, Logan, of exemplifying that.

Logan:
I appreciate that. Especially kids my age and my generation, I think I’m kind of going against the grain as far as what I’m investing in because I would imagine that most of my generation is obviously playing around with cryptocurrency and the next hot thing, and so, I could have easily done that. Obviously I disclose that I do own a little bit of cryptocurrency, but is definitely not the majority of my portfolio.

Ashley:
Logan, when you say your generation, you mean our generation.

Logan:
Gen Z, Gen Z. Yeah, yeah, of course.

Ashley:
So, Logan, what do your expenses and your bills look like for yourself? So, you’re living at home. Do you help your mom? Do you pay a portion of the rent? Do you have a car payment? Are you paying insurance? What kind of monthly expenses do you have, and what have you decided to cut out of your life to live so frugally to be able to invest more?

Logan:
Not too much besides the rent. So, I actually don’t even drive either. So, that’s another notion dispelled there that if you don’t have a car, you can’t access real estate. So, I usually just get a ride from my agent or via an Uber or whatever. But yeah, so I actually pay 100% of the rent here and obviously very expensive market on Long Island which is tough, but I make it work. Unfortunately, my mom, completely different situation, different scenario. She did not necessarily follow the same path or the footsteps as I’m doing right now, and so, I’m actually paying 100% of the rent. She helps out a little bit with utilities, but other than that, no car payment, no student loans, no debt like that.

Ashley:
Logan, how awesome is that that you get to do that for your mom?

Logan:
Appreciate that.

Ashley:
I think that is, and really proud of you that you want to do that too for her. I mean, not many people at your age or even at any age can help their parents out in that sense. So, I think that’s really amazing that you’re doing that and that’s how you’re choosing to spend the money. Really, that’s your only expense that you have. So, yeah, that’s really awesome and that’s a huge thing. So, congratulations on being able to do that. That’s definitely a huge accomplishment.

Tony:
If I can ask one follow up question, Logan, you mentioned that when you go visit some of these properties you either catch an Uber or you have your agent pick you up. It made me think like okay, yeah, you’re working with an agent and as a younger investor, how did you kind of build that relationship with your agents so that they took you seriously? I think a lot of new investors, regardless of age, struggle with this imposter syndrome around like, “Oh man, will this agent really take me seriously or will this contractor take me seriously, or this property management company?” So, what was your approach to building a good relationship and getting that person, as a 21, 20 years old maybe at the time, actually them take the time to show you around and pick you up and do all these things?

Logan:
So, luckily, I haven’t run into anyone that’s necessarily disowned me or anything like that. So, luckily pretty good relationships all around. I haven’t had anyone doubt me, and the agent lives local, so that’s not necessarily something that took too much convincing, they were happy to do it. But I’ve definitely gotten some eyeballs and some surprised looks and faces when I show up to that closing table and they see who’s closing on that property, or the insurance agent, maybe they see my birthdate or something and they definitely make a comment on my age. So, I’ve definitely gotten those.

Tony:
What about your tenants, Logan? Are you self-managing? Do you have a relationship with them and what does that dynamic look like?

Logan:
Yeah, so all self-managed right now. I don’t know, maybe when I hit 10 units I’ll probably move to a property manager. I can’t quite make the decision yet. I will see how much I can handle. But a few different stories as far as the tenants because on the first property I technically inherited that tenant, so that has a story there, and then the second property I did inherit a tenant for that duplex, so we definitely get into that as well.

Tony:
Let’s hear the stories, man.

Ashley:
Yeah.

Logan:
The first property actually I would say I got pretty lucky. Interesting story, believe it or not, the owner that sold it to me actually wanted to stay and live at that property. I think they had some sort of living arrangement set up that they were going to be moving out in six months or a year, and they just wanted to rent the property from me actually until they move out. Still, they have not moved out and it’s been a year and a half, and we’re actually going to renew that lease next month, but I will have to raise the rent, and so, we’ll see what happens there if they choose to renew or not. But yeah, so I did get pretty lucky there. That was pretty turnkey with the tenant set up, and I didn’t get to screen them, but luckily they’re just closing that property, and so, they did have a boatload of funds from selling it to me. So, I guess that was kind of a pre-screen. So, that’s the first one.
The second one, the duplex, one of the units was occupied, the other one vacant. So, I did inherit a tenant there, and that was definitely a risky tenant because I don’t even think they’re technically documented, so I don’t even think they were able to provide a social security number so I didn’t get to screen them. So, I’ve taken a lot of risk all around between the tenants not being screened, and then also all these properties are in flood zones, so that’s definitely a risk as well. So, I’ve definitely taken on some risky situations.

Ashley:
Logan, how did you show the vacant unit? Did you set up one showing so you only had to get a ride there once? I figure without a car it would be somewhat difficult to go there all the time to do showing. So, how if you set up your leasing process so that you don’t have to actually be at the property all the time?

Logan:
I just went through my broker so that they show the property, but on that duplex actually, specifically, that one is just 10 minutes away from me so it probably wouldn’t have been a big deal anyways to show it. The train goes right there. But on the third one, that I bought vacant, that third house, so that was an hour and a half away from me because it’s in that same Mastic area. And again, my broker just showed that one and now it’s occupied. We got it occupied within a couple weeks.

Ashley:
What was the fee that you paid your broker to do that? Because I had that before and I think it was one month’s rent that we actually paid the agent once they got a tenant in there.

Logan:
Yeah, it was just the one month’s rent that the tenant pays. I will say for New York they have some pretty strict laws in regards to how much you could charge as far as one month’s rent upfront security. So, in New York, it’s definitely a tough market with the laws and regulations.

Ashley:
No I meant to the broker, the real estate agent. Did you pay them once they got a tenant in place? Did you pay them?

Logan:
Didn’t come out of my pocket. It was from the tenant. Yeah, they paid the broker one month upfront the one month brokerage fee.

Ashley:
Oh, the tenant paid. Okay.

Logan:
Yeah, nothing out of my pocket.

Ashley:
Oh, interesting, oh.

Tony:
Oh, that’s cool.

Ashley:
Yeah, I’ve only seen on the other side where the actual landlord pays the broker but to have the tenant pay.

Tony:
Breaking more rules, Logan, I love it, man.

Logan:
Okay. I didn’t know that actually.

Ashley:
But yes, what you said too is very true in New York State where you can only charge one month’s rent for security deposit or less. You can’t charge more than that and you also can charge last month’s rent. And I actually had somebody text me the other day asking me this because their daughter was trying to get a unit and the landlord told them like, “You’re going to have to put a higher security deposit down,” and they were thinking, “I don’t think you’re true.” So, of course, I get on, I get all the government documents, I send it to them, like, “They can’t do that to you.”

Logan:
And also in regards to Section 8, there’s also regulations with that. I don’t know if it’s the same in all states, but in New York, it’s technically illegal to take over the voucher amount. So, that’s also legal, and I had some Section 8 people try to apply for that third property.

Ashley:
So, how are you finding out all of this information? What are some great resources that somebody who’s getting into property management can go and find everything that you’ve learned?

Logan:
Facebook groups are great. I learn a lot of information from the Real Estate Rookie group and the bigger, the BRRRR Invest group, lots of groups in regards to real estate on Facebook, and then naturally there’s also local meetups which I’m sure are great for people as well. There’s a few on Long Island and then also just naturally YouTube University, right, this Google University, endless research. But the big thing is that you can gain all this knowledge, do all of your analysis, and have all this information, but it’s until you actually do it and execute that some of these unknowns and fears won’t go away.

Tony:
BiggerPockets, BiggerPockets, BiggerPockets.

Ashley:
Tony, did you just crack a joke?

Tony:
I’m joking but I’m also serious, right? I think for so many new investors, the forums on BiggerPockets, it’s like an encyclopedia of… It’s a PhD of real estate investing. Almost any question that you can think about asking has probably already been asked and someone has answered it in very high details somewhere on the forums, and honestly I think that’s how I initially found BiggerPockets. It’s like I googled some super obscure real estate something and then I landed on one of the pages in the forums and then that kind of sent me down the rabbit hole. So, I love all the resources you talked about. Look, but obviously just wanted to plug the forums cause I think it’s a great resource for new investors.

Logan:
Absolutely.

Ashley:
So, Logan, do you have a deal that you kind of want to go through the numbers with us?

Logan:
Sure thing. I think we could start with that first one because it’s definitely the largest as far as cash flow and the return on investment, so I think we could definitely dig in with that. My first deal, that was 20% down, single family unit, quite a small two bedroom house. I think it’s less than a thousand square feet, but again, 213,000, at the time I thought I was overpaying for it. That was after-

Ashley:
What was that? Is that the asking price?

Logan:
It was 224 or 5, we got it down to 215, then a $2,000 credit, 213 was the final price, and that 20% down, so all in, I think it was like 65, 70 grand all in with closing costs. It was pretty turnkey. I replaced a water heater and some minor TLC but nothing too big. I can’t necessarily speak for everyone, but I would say especially for someone like myself who’s not necessarily majorly astute with handy work and contracting, I would probably start with turnkey properties. I probably wouldn’t begin with a major rehab project. That’s just my opinion, but everyone’s different. So, turnkey property, and like I said with that situation, the tenant, that was pretty much built into it, the owner, and I got it rented right away. It was occupied day one at closing and now it has appreciated like 30, 40% just in the last year, year and a half because of what’s going on in the market there.

Ashley:
Wow. And what does the tenant pay for rent in that property?

Logan:
Right now, 2,200, but that’s way below market value actually.

Ashley:
And that’s the one where it’s the owners living in there?

Logan:
Correct.

Tony:
Sorry, $2,200 per month on a $213,000 house?

Logan:
That’s right. But that’s way below market value, yeah.

Tony:
Wow, that’s amazing.

Ashley:
So, you put about $75,000.

Logan:
Yeah, about 70 grand all in with closing costs and the down payment.

Ashley:
Tony, what’s the cash on cash return on that?

Tony:
Yeah, what are you netting on that 22?

Logan:
Yeah, insurance went up because the flood insurance is so high, especially in that area because it’s such a risky flood zone. That’s the only caveat, but it’s about 600 bucks in cash flow a month. So, that’s a great deal. I would do anything to get that deal again and again. I would do it every day of the week but the market has gone up so much and obviously interest rates on top of that, just not feasible anymore. But the percentage return is about 12, 13% actually, the percentage.

Tony:
Yeah, that’s awesome, man. That’s a great first deal. I’m super impressed that you’re able to get such a high monthly rent amount on comparatively speaking low purchase price. That’s great, man.

Ashley:
But you have to think about too that the properties in New York State where the property taxes are a lot higher. So, it’s very easy to hit the 1% rule where the rent is 1% of the purchase price or even higher than the 1% rule, but it’s very hard to meet the 50% rule where your expenses are 50% of the monthly rental income. So, that’s a big thing to think too is those property taxes kill you.

Tony:
The flood insurance is a big risk too. So, I don’t know if you’ve heard my story, Logan, but I also bought my second investment property was in a flood zone, and the first year we owned the property, the flood insurance premium was super reasonable. The second year we owned the property, the flood insurance premium quadrupled, so it was like a thousand bucks a year and it went up to 4,000 bucks a year, and we shopped it around to multiple different insurance brokers, they all came back with very similar quotes. I don’t know what happened. I don’t know if there… Mercury must have been in retrograde or something because there was some weird stuff happening across the insurance industry, but that killed us on that deal. We ended up selling it at a loss actually. So, there is some risk with that. I’m not trying to scare you.

Logan:
No, on my second property that actually just happened where a few months ago I got the renewal notice, and it was double what I was paying just months before, and so, I had to shop it around and got a little bit better of a rate. But yeah, it’s definitely gone up.

Tony:
I learned a lot about flood insurance as we were going through that. There’s a way to challenge the flood insurance or I guess the flood zone designation. It’s a really lengthy process, and we just didn’t feel like going through it, but if you talk to your insurance agent, there is a way to challenge that flood zone designation if you can prove there hasn’t been any major floods or something like that, or there’s like a map you have to pull from the FEMA website. But there is a process. It’s just, it is pretty lengthy and the chances of success are really slim. So something to look into if you’ve got the time.

Ashley:
Yeah, I just got one of my bills yesterday actually that there’s one property that’s in a flood zone. I actually have it under contract to sell it right now, but it went up $400 for the year. It went from 1,400 to 1,800.

Logan:
Especially Long Island got hit very badly by Hurricane Sandy in 2012. Everything was absolutely devastated. So, we’re definitely in a bad risky flood area.

Ashley:
Yeah, I did two of my bootcamp calls this week, and in both of them the conversation came up as to how Hurricane Ian is changing Florida for insurance and how the premiums are just going to increase even more and just there is a cap on how much it can actually increase. But it was really interesting listening to a couple investors who invest in Florida talk about how that is going to impact them and then also people who are homeowners too, and it’s not just investment property. So, insurance is definitely a…

Tony:
Tricky.

Ashley:
Yeah.

Tony:
Yeah.

Ashley:
I have my insurance license and I hate it so much. I don’t understand half of it anymore because I’m just like don’t stay on top of it. It’s kind of like a CPA, if they don’t stay up to date on the tax laws and regulations [inaudible 00:36:23].

Logan:
But I would say definitely shop around, shop around different agents and brokers and play around with the coverage and I think you’ll get a better rate. That would just be my advice, especially to people in flood areas to shop around and I think you’ll get a better rate than you originally got.

Ashley:
I think that’s great advice too, especially play around with the coverage as to look at what you actually have on your policy. Is there something in there that you don’t think you would ever, ever use or ever come up even costing you a hundred bucks extra a year for the premium? So, I think that’s interesting, and then especially with it being an investment property, look at what your coverage is to replace the property, and I usually try to get it as low because I actually might, if a duplex or something was to burn down, I don’t even actually know if I would rebuild it or if I would just sell the lot or something like that too. So, where if was my primary residence, yes I’d have to rebuild.

Tony:
That’s so funny you mentioned that, Ashley, because Omi, my partner and I and Sara were literally just having this conversation about insurance yesterday and we said the opposite. It’s like our properties have appreciated so much since we purchased them that if one of them did burn down we’re undercover right now. So Omi’s going to do the work to increase that replacement cover so if they do burn down, we’re not caught holding the bag. A buddy of ours, he was building a cabin in the Smokey Mountains. He was like two weeks away from it being completed. Once the property was going to be done, he was going to have like $300,000 in equity just because of his build cost versus where the properties were appraising at. One of the workers flicked a cigarette butt that ended up catching some debris on fire, burned down the entire cabin, and his cover, he was undercovered, so now instead of having $300,000 in equity, he had to write a $50,000 check to cover that construction debt. So, when we heard that story we’re like, “Oh my god.” We got way too many properties to not be accurately covered.

Ashley:
And Tony, I think you have to compare properties too where my $50,000 duplexes are not appreciating $300,000 in four years.

Tony:
That’s true, that’s true, that’s true.

Ashley:
My $3,000 appreciation can handle that.

Tony:
You could probably write that check. You could probably Write that check.

Ashley:
But also for me to have to write a check, it’s like I always make sure I at least have coverage for more than what the mortgage is, and that’s like the priority to me is if it did burn down that I could pay off the mortgage on the property easily.

Tony:
A good conversation about insurance. Let’s go to the rookie request line, Logan. So, for all our rookies, if you’re listening, you guys can leave us a voicemail at any time, just give us a call at 8885-ROOKIE to leave a voicemail. We love getting the voicemails, guys. We love the Facebook questions and we love the Instagram DMs but the rookie voicemails are cool because we actually get to hear you guys. So, if you want your voice featured on the Real Estate Rookie Podcast, give us a call, 8885-ROOKIE. So. Logan, are you ready for today’s question?

Logan:
I think so.

Reid:
Hey guys, this is Reid from Brandon, Mississippi. When my wife and I moved out of our previous home, we kept it as a rental and are currently looking to purchase our next rental unit. The first house was already in our names and we left it that way. Moving forward, at what point do we want to start putting homes under a LLC, or should we at all? Does the protection offered offset whatever pain there may be to purchasing a home under a LLC? So, just curious if and when we should move to a LLC. Loving the content. Keep up the good work.

Logan:
So, as far as my knowledge, an LLC doesn’t necessarily prevent you from getting sued, right? There’s still liability to be had there, but certainly, I think a general rule of thumb, just from my analysis and what I’ve learned, I think once you reach that number of 10, I think you should start considering an LLC, may be 20 units, but I think for me especially, and I don’t know what the property value is on his property are and what kind of issues he’s dealing with, if it’s maybe it’s a high crime area, every circumstance would be different. Not an attorney, but I think probably magic number of 10, 10 units.

Ashley:
Yeah. I think what you said there about the equity in the property too because an LLC is to protect your assets so that if you are sued, they can’t go after your personal assets. So, really looking at the net worth that you’re putting and the equity that you’re putting in each LLC. So, if I have two properties in an LLC but they’re both mortgaged to the hill and there’s only $10,000 in equity, somebody sues me, yeah, my insurance can pay out, but there’s only 10% of the equity in there and say that’s only $10,000, whatever.
But if I have half a million dollars of equity of properties in there, and maybe that’s only one property where I have half a million dollars in equity, I’m probably only going to put that one property in an LLC. But if I have a bunch of little properties, those 10 and they don’t have a ton of equity in each of them, then yeah, I’ll throw those into one LLC. So, I think looking that, just like what you said, but adding in that component of how much do you want to risk putting into one LLC together. Okay, so, Logan, we are going to move on to our rookie exam.

Logan:
Alrighty.

Ashley:
First question is, what is one actionable thing rookies should do after listening to this episode?

Logan:
So, the easiest thing I would definitely say is to start analyzing deals online and start really getting a concrete understanding of your market. You don’t necessarily have to look out of state. At first, I probably consider doing something in New Jersey or Connecticut or Pennsylvania because maybe I can get a much better deal there. But just start analyzing your local market and seeing how close you can get, and certainly start playing around those numbers, see what the cash on cash return looks like, see what you can get for rents, and just kind of do a market analysis, a market sweep of the area. I think that’s something anyone could do right now.

Tony:
Great answer, Logan. Next question, what’s one tool, app, software system that you use in your business today?

Logan:
I’m actually not much of a spreadsheet techy guy. It’s mostly just everything’s just on paper or in the mind. I actually don’t use too many apps or softwares. But as far as knowledge and learning, like you mentioned, BiggerPockets forum is definitely something everywhere everyone can use.

Tony:
I love that, man. See, I’m so the opposite. My brain, I need, I need lots of structure and things documented and regimented, whereas my wife, she’s the opposite where everything just kind of swirling around in her brain, but that gives me anxiety. So, we’re yin and yang like that.

Ashley:
Logan, where do you plan on being in five years?

Logan:
So, I think I definitely want to experiment with larger complexes and 1031 exchanging into longer, larger apartment buildings, hopefully getting into commercial real estate, so five-plus units. That’s certainly going to be tough in this area, but I think I can make it happen, and just basically doing everything I’m doing right now at scale. Whether it’s in business, whether it’s my YouTube channel and doing content branding and real estate, just everything hopefully at a larger scale and exactly what I’m doing right now though.

Tony:
Awesome. Well great job, Logan, man, and I’m excited to see that journey take off, man, and the way you’re crushing it, I’m sure you’ll reach all those goals you’ve got. So, before we close out today, I just want to give a quick shout out to our Rookie Rockstar, and if you’d like to get shout out to Rookie Rockstar, get active in the Real Estate Rookie Facebook group on the Real Estate Rookie forum section on BiggerPockets, or you can slide into my DMs or Ashley’s DMs. But today’s Rookie Rockstar is Isaiah Foster, and Isaiah says that his first business partner and he closed on their first house flip last week. They purchased it for $100,000. They were all in for about 160 and they sold it for $265,000, and what’s crazy, this is what Isaiah says is we have literally used none of our own money from this flip. They use two lines of credit and then a hard money loan to cover the entire purchase and the rehab. So, congratulations to Isaiah for crushing it with that first house flip.

Ashley:
Well, Logan, thank you so much for joining us today. I have to be honest and tell you I slept two hours last night. I’ve been working on this project, I just wanted to get it done, and that’s why I was even a couple minutes late because I was hitting something on it to get it done, and I was like, “Man, I’m exhausted.” But I have to tell you, listening to your story and talking with you, I am all pumped up again. I can pull another all-nighter. So, just thank you so much for coming on and sharing your story. You are super cool, and I’m sure all of our listeners are going to appreciate hearing your story, getting tons of motivation like me. So, can you tell everyone where they can reach out to you and find out some more information about you?

Logan:
Sure thing. Mainly active on Instagram and YouTube. So, Instagram is @logankohn, sounds like ice cream cone, but spelled K-O-H-N. And then YouTube is the same name, Logan Kohn, that that is where I am mostly putting content and mostly active.

Ashley:
Well, thank you so much for joining us, Logan. We really appreciate it. I’m Ashley @wealthfromrentals and he’s Tony, @tonyjrobinson on Instagram, and we will be back on Saturday with a Rookie Reply.(singing)