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Speaker 1: Welcome to How to Money. I'm Joel and I am Matt,

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Speaker 1: and today we're talking about being a small but mighty

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Speaker 1: real estate investor with Chad Carson.

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Speaker 2: That's right.

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Speaker 3: We are so pumped to be talking with our friend

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Speaker 3: Chad Carson aka Coach Carson, which is also his site

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Speaker 3: Coachcarson dot com. Hold over from Chad's Clemson football playing days.

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Speaker 3: So one of my earliest memories was hanging out with

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Speaker 3: Chad in the pool at finn Con nearly five years ago.

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Speaker 3: We're talking real estate. We were enjoying a craft beer,

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Speaker 3: and here we are at it again. But just because

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Speaker 3: this feels like a more casual conversation to us, that

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Speaker 3: does not mean that Chad isn't going to bring the goods.

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Speaker 3: We Joel unit we got tout the merits of small

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Speaker 3: time real estate investing, but Chad has made it his

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Speaker 3: mission and it's the focus of his new book, The

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Speaker 3: Small and Mighty Real Estate and Investor. So if you're

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Speaker 3: wondering how owning a few investment properties, how that could

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Speaker 3: get you closer to financial freedom, We'll keep listening. If

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Speaker 3: you're wondering if it's even possible to get into real

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Speaker 3: estate given where mortgage rates are currently This episode is

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Speaker 3: for you, Chad. Thank you so much for talking with

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Speaker 3: us today here on the podcast.

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Speaker 2: Matt Joel, it is great to be here. Thanks for

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Speaker 2: having me.

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Speaker 1: Hey, Chad, You're welcome anytime like next week also, so

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Speaker 1: we'll bring it back. How yeah, I mean, there really

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Speaker 1: is a lot to cover. We probably could have multiple

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Speaker 1: episodes with you, just because the book is so thorough.

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Speaker 1: But the first question we ask anybody who comes on

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Speaker 1: the show is what do you like to suppor jehn

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Speaker 1: It lets us know a little bit about you and

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Speaker 1: your priorities. But Matt and I, we of course have

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Speaker 1: the big priority of spending more on craft beer. Is

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Speaker 1: what's that in your life?

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Speaker 2: That was one of the first things I resonated with

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Speaker 2: you guys on both listening to you and also meeting you,

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Speaker 2: is yeah, food and craft beer. Or my wife and

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Speaker 2: I we like to combine that with travel. I guess

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Speaker 2: that would be my kind of cheat answer that we

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Speaker 2: we like my my wife and I like when we

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Speaker 2: first met on our first date, it was like where

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Speaker 2: are we going to go? Where are we going to travel?

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Speaker 2: And so from there though I think just not you know,

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Speaker 2: on a car, we drive a old Toyota. We drive

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Speaker 2: old you know, hand me down cars from family members.

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Speaker 2: That's that's okay with us. But going to really nice

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Speaker 2: locations having good food, like in Spain or Greece or

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Speaker 2: that's that's just that's the best. Like we really we

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Speaker 2: really enjoy that. And then having a good craft beer

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Speaker 2: is right up there with it as well.

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Speaker 1: Okay, So I was detailing my first date with my

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Speaker 1: wife recently to one of my kids, and I ended

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Speaker 1: up taking my wife. We went to to the zoo

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Speaker 1: and to a baseball game, which is like a really

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Speaker 1: really long date, right, But you I feel like you

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Speaker 1: blew me on a lot. You guys were talking about

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Speaker 1: going on trips together on your first date, Like.

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Speaker 2: Yeah, I mean we were out hiking and we were like, well,

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Speaker 2: what do you like to do? What are you up to?

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Speaker 2: And it was just like one thing after another. She's like, well,

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Speaker 2: I traveled to Guatemala, I speak Spanish. She's a Spanish teacher,

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Speaker 2: by the way. And for me, I was I was

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Speaker 2: kind of interesting to travel because I'd played football in

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Speaker 2: college and I did a little bit of study abroad.

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Speaker 2: But I was just like I never got to do

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Speaker 2: enough of it. So I was just really intrigued by that,

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Speaker 2: and it's like, well, that's exactly what I want to do.

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Speaker 2: I would love to go to Latin America. I would

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Speaker 2: love to learn Spanish. She's like, well, I'm a Spanish teacher.

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Speaker 2: I was like, well, perfect, you can give me lessons.

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Speaker 2: That's great.

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Speaker 3: More time together. I guess we'll go ahead and get married.

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Speaker 2: Let's do it.

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Speaker 3: Well on that note, so you just got back from

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Speaker 3: another year abroad. What made you go specifically to Spain?

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Speaker 3: Can you share something about that trip?

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Speaker 2: How the heck was it? Yeah, well, I mentioned the

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Speaker 2: Spanish language. That's sort of something that we connect with.

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Speaker 2: We've lived in Ecuador in the past for about a

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Speaker 2: year and a half of our kids, so that was

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Speaker 2: an amazing experience. We love Ecuador, we love South America.

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Speaker 2: We wanted to try something in Europe where we could

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Speaker 2: be a little closer. We kind of had this vision

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Speaker 2: of my kids were ten and eight when we left,

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Speaker 2: and actually eleven and nine. I can't get that right,

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Speaker 2: but I wanted to take them to historical sites and

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Speaker 2: Europe is just so dense with so many different places,

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Speaker 2: and so we went from Spain was our home base.

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Speaker 2: Then you went to school there. They were speaking Spanish

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Speaker 2: at school, which was amazing. We were in a small

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Speaker 2: community in Granada, in the southern part of Spain. But

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Speaker 2: then we also took side trips, so we went to

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Speaker 2: Greece in February and went to see like the Parthenon

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Speaker 2: and all these old sites, and that was like a

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Speaker 2: history lesson in person. Yeah, that diversity of just experience

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Speaker 2: history stories just was I think all of that together

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Speaker 2: it was an amazing experience.

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Speaker 1: Talk to us about the logistics and the finances of

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Speaker 1: pulling off a big stunt like this, what sticks out

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Speaker 1: in your mind as kind of the biggest barriers, the

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Speaker 1: biggest hurdles that you had to overcome to kind of

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Speaker 1: pull off a year in a foreign country.

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Speaker 3: Basically, this is like a mini retirement, right, like a yeah, yeah, yeah.

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Speaker 2: And when I first did this back in two thousand

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Speaker 2: and nine, my wife and I didn't have kids at

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Speaker 2: that point. We just had to save money. So like

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Speaker 2: that's how we did it. First time we went for

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Speaker 2: four months. We saved the money. It was almost like

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Speaker 2: saving for a car and just paying cash for a car.

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Speaker 2: That's the way we looked at it, instead of buying

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Speaker 2: a new car. We spent twenty thousand bucks on a

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Speaker 2: trip and travel this time around, you know, it was

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Speaker 2: just a much different situation. We have rental income coming

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Speaker 2: in from the United States, and so you know, paying

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Speaker 2: for all of our lifestyle expenses in Spain basically came

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Speaker 2: from the distributions from our rental property partnership that I

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Speaker 2: have back in the United States, and so the money

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Speaker 2: side of things was less challenging, although I know for

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Speaker 2: a lot of people that's going to be the biggest challenge,

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Speaker 2: just getting the money. But the other big challenge, which

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Speaker 2: is part of the story of why I wrote The

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Speaker 2: Small Mighty Investor, was that the time and the flexibility

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Speaker 2: to be able to go for a year is probably

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Speaker 2: the most difficult thing, because you have obligations, you have

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Speaker 2: to be in a certain location. And so for me

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Speaker 2: and you have a rental property business and having property

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Speaker 2: managers on the ground doing most of the day to

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Speaker 2: day work, I have a college student rentals, so they

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Speaker 2: were leasing properties for me while I was gone and

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Speaker 2: me paying them to do that and having systems and

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Speaker 2: processes like all of that is something that's really important.

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Speaker 2: But with a typical job, you can't do that it's

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Speaker 2: a lot harder to do that you might have. You know,

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Speaker 2: digital nomad kind of is it's becoming more of a thing,

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Speaker 2: But being able to travel abroad is more you know,

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Speaker 2: having the time and flexibility in addition to the money,

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Speaker 2: and so those two things combined, I think we're the

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Speaker 2: biggest challenges.

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Speaker 3: Yeah, yeah, that makes sense that I kind of hinted

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Speaker 3: at this when I said, like the many, many retirements,

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Speaker 3: but you are all about creating these awesome experiences just

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Speaker 3: all along the way, not just saving the best trips

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Speaker 3: for retirement right when you know when you're actually less

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Speaker 3: able to actually enjoy it. Why is do more of

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Speaker 3: what matters so core to your philosophy and how you

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Speaker 3: view life.

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Speaker 2: Yeah, I feel like, you know, everybody knows it's easy

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Speaker 2: to quantify how to make money, Like you save money,

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Speaker 2: It's not easy to do, but it's easy to quantify.

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Speaker 2: You save a bank account, it's on your statement, like

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Speaker 2: it's pretty easy to measure. And even with time, like

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Speaker 2: we know we want free time, but to me, like

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Speaker 2: the good stuff, like as a parent right now with kids,

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Speaker 2: like the good stuff are those small moments, those in

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Speaker 2: between times like picking my kids up from school and

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Speaker 2: they tell me something that they might not have told

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Speaker 2: me if I was busy working somewhere or going on

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Speaker 2: a trip, and seeing their eyes light up when they're

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Speaker 2: seeing something for the first time in Greece, some big,

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Speaker 2: huge temple, or just the small moments, like just being present,

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Speaker 2: like doing what matters means so totally different to different people.

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Speaker 2: It might be serving in your community, it might mean

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Speaker 2: taking care of a loved one. Like all these things

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Speaker 2: which we know matter to us, they do require money

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Speaker 2: sometimes because we've got to pay the bills, we've got

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Speaker 2: to pay our mortgage payments. So it usually work and

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Speaker 2: our time gets spent doing that, but most of all

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Speaker 2: requires time. It requires presence. And so for me, the

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Speaker 2: small mighty investor idea is like you can go big

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Speaker 2: and get huge and have all this money, but what

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Speaker 2: if it takes away your time? What if it takes

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Speaker 2: away your presence and doing those things that matter? Like

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Speaker 2: why would you do that? Like what's what's the point.

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Speaker 2: Why not have like a more balanced approach where you

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Speaker 2: make enough money because money is important, but you have

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Speaker 2: like the ultimate currency, which is that time to do

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Speaker 2: those things that you know are really the most important

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Speaker 2: thing to you.

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Speaker 1: Yeah, agreed, and all right, let's talk about real estate

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Speaker 1: chat because that's your book obviously is influenced about that

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Speaker 1: ultimate desire to have more free time to do more

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Speaker 1: of what matters. But specifically tell us why real estate, right,

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Speaker 1: Why not just continue to stock money into index funds

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Speaker 1: and tax advantage accounts. That's what a lot of personal

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Speaker 1: finance enthusiasts talk about, Like that's that's the easy way.

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Speaker 1: Real estate seems a little more difficult.

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Speaker 2: Yeah, I mean they're all good. I want to say

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Speaker 2: that upfront, Like I like index funds, I like savings accounts,

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Speaker 2: I like all that stuff. Which was so cool about

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Speaker 2: your show is that you you combine a lot of

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Speaker 2: different tools and show how they all work. But I'll

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Speaker 2: make the pitch for real estate investing if this is

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Speaker 2: something that somebody, if you're interested in it, because I

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Speaker 2: think I don't like to try to talk people into

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Speaker 2: real estate because it's like it's kind of like a

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Speaker 2: startup business where on the front end, you've got to

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Speaker 2: learn a lot, you've got to build relationships, you've got

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Speaker 2: to invest some time and knowledge and energy into it.

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Speaker 2: But on the back end it can become a very

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Speaker 2: passive kind of like a blue chip stock type of investment.

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Speaker 2: So that front end, that front loaded kind of investment

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Speaker 2: of time and energy, that is important to know. So

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Speaker 2: like I don't That's why I don't want to talk

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Speaker 2: people into it. But if you willing to put that

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Speaker 2: energy and that effort and that money upfront, real estate

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Speaker 2: has this unique quality. And I'm a friend of mine

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Speaker 2: Jillian john z Rude, who you guys probably didn't know

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Speaker 2: as well. She always says that real estate money, it

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Speaker 2: spends differently in early retirement or in financial independence, it

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Speaker 2: spends differently. So like think about if you had a

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Speaker 2: million dollars or half a million dollars in a stock

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Speaker 2: investment account, or if you had a four to one k,

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Speaker 2: Like taking your principle out of there to live off

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Speaker 2: of that principle is just a different psychological decision than

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Speaker 2: getting rental income that comes in every single month and

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Speaker 2: you still have the property, like you're not selling the property,

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Speaker 2: but you get this rental income coming in. And I've

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Speaker 2: experienced this firsthand because I'm living in Spain. We spend

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Speaker 2: one hundred percent of the money some months because we're

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Speaker 2: traveling and doing all this stuff, and guess what, like

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Speaker 2: next month, another set of money comes in, and then

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Speaker 2: another set of money. And so that recurring income of

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Speaker 2: real estate is a super important thing, and it is

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Speaker 2: more than just math. Like the math's important too, having

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Speaker 2: recurring income that you can also get to be semi passive.

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Speaker 2: So it's not gonna one hundred percent passive, but I

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Speaker 2: spend a couple hours per week now that my real

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Speaker 2: estate investment portfolio is mature, I'm not buying and selling properties.

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Speaker 2: I'm not remodeling properties. We're just managing the managers basically.

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Speaker 2: And that's say, if you have a few properties, that

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Speaker 2: could be like thirty minutes a week, four hours a month.

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Speaker 2: That's not exaggeration. I've surveyed a lot of people I

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Speaker 2: know who had those kind of portfolios, and so it

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Speaker 2: could be very passive while also producing that recurring income,

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Speaker 2: which when you want to live off your income, when

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Speaker 2: you want to live off your wealth, real estate investing

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Speaker 2: gives you that ability to do it. In addition to

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Speaker 2: all the other stuff you probably heard about of building

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Speaker 2: wealth and using leverage and having small amount of money down,

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Speaker 2: like that's all true too. But then also real estate

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Speaker 2: is an amazing financial independence kind of core vehicle to

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Speaker 2: help you get there and live off your income.

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Speaker 1: Well, we're talking about early financial independence. It's also not

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Speaker 1: age restricted like some of those tax advantage retirement accounts are,

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Speaker 1: right like correct, if you're putting it into a traditional

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Speaker 1: four to one k or ira, you're not allowed to

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Speaker 1: really touch that stuff without penalties until fifty nine and

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Speaker 1: a half. Into real estate, it's like boom, you get

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Speaker 1: to you get kind of that recurring dividend on you know,

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Speaker 1: an ongoing basis.

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Speaker 2: Yeah, and it also has tax advantages. It's not quite

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Speaker 2: as good as like a roth ira or something like that,

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Speaker 2: but you know, you can grow in a tax advantage

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Speaker 2: way using things like depreciation, which shelters your income so

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Speaker 2: you don't pay quite as much in taxes as you

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Speaker 2: would if you just got the income without depreciation. You know,

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Speaker 2: this is something that people even before retirement accounts were around,

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Speaker 2: like people have been using real estate and rental income

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Speaker 2: is like a core retirement vehicle is a core wealth

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Speaker 2: building vehicle because of all these various benefits that it has.

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Speaker 3: Yeah, in addition to the psychological win that comes with

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Speaker 3: being able to enjoy the profit from the properties that

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Speaker 3: that thing is shedding every single month, you know, we've

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Speaker 3: talked about the small and the small and mighty approach

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Speaker 3: with our listeners before. This is something we have adopted

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Speaker 3: ourselves when it comes to how it is that we

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Speaker 3: look at real estate. But for listeners out there who

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Speaker 3: maybe haven't heard your philosophy, can you share specifically why

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Speaker 3: going small, how it is that can be the right

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Speaker 3: choice for a lot of folks.

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Speaker 2: Yeah, I'll tell it with a story. Like when I

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Speaker 2: first started real estate investing, I was twenty three years old.

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Speaker 2: I just graduated from college and every class I went

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Speaker 2: to and I'm kind of dating myself now, so it

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Speaker 2: was twenty one years ago. Like I was listening to

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Speaker 2: like CDs back in the car and riding around you

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Speaker 2: know how we did it back in the day, back

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Speaker 2: in the tapes. Before that, I was also listening to tapes,

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Speaker 2: but anyway, I was listening to these and the ethos.

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Speaker 2: So the main message you got most of the time was, Hey,

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Speaker 2: you should get bigger and bigger and bigger, and you

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Speaker 2: should grow faster and faster and faster. In fact, the

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Speaker 2: most successful people are the people who get the biggest

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Speaker 2: and grow the fastest. It's just sort of an unwritten

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Speaker 2: assumption and so I sort of bought into that, and

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Speaker 2: my business partner and I dur in the first three

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Speaker 2: four or five years we're on that track. We were

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Speaker 2: trying to get bigger, buy a lot of properties. But

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Speaker 2: the end result of that was number one, we hit

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Speaker 2: the two thousand and seven eight nine recession, and that

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Speaker 2: was pretty scary, you know, having to try to survive

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Speaker 2: that when you've grown fast and a lot of leverage.

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Speaker 2: So that was one problem is that there's a risk

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Speaker 2: of growing fast. But then the other thing we realized,

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Speaker 2: going back to that conversation about time, is that a smaller, simpler, slower,

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Speaker 2: like I call it like a tortoise like real estate

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Speaker 2: investing strategy is actually super effective too, and it also

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Speaker 2: gives you more of that time and flexibility that we

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Speaker 2: talked about, where if you're constantly always growing, always growing,

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Speaker 2: always growing, and I'm not saying you shouldn't push it

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Speaker 2: and work hard and do those kinds of things, but

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Speaker 2: if you don't, if you'd never take a break, like

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Speaker 2: I look at it like climbing a mountain, Like if

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Speaker 2: you're always climbing and you never take like some plateaus

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Speaker 2: to take a break and take a breath and relax.

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Speaker 2: Then you're gonna not enjoy the process. You're not going

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Speaker 2: to enjoy the reason you're investing in the first place.

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Speaker 2: You're going to not miss those opportunities with your family,

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Speaker 2: with your friends. And so we realized in that moment

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Speaker 2: what we started writing down. Like in two thousand and seven,

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Speaker 2: when we were in the kind of the eye of

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Speaker 2: the hurricane, we were like, all right, what is it.

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Speaker 2: We got into investing in real estate for like, why

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Speaker 2: are we doing this? We bought like dozens and dozens

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Speaker 2: of properties in the last year, and we wrote down

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Speaker 2: things like I wanted to travel like I, you know,

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Speaker 2: with my future wife who I've just met. I wanted

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Speaker 2: to be present with friends. I wanted to play basketball

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Speaker 2: in the middle of the day. I wanted to go hiking.

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Speaker 2: Because we lived in we lived in Clempson, South Carolina,

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Speaker 2: near a bunch of the foothills of the mountains. So

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Speaker 2: the things I wrote down on my list, some of

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Speaker 2: them required money, like travel requires some money. But the

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Speaker 2: biggest impediment to me doing the things that I wanted

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Speaker 2: to do in my life was free time and flexibility.

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Speaker 2: And that was such an aha moment. I was like,

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Speaker 2: all right, we need to build a real estate investing philosophy,

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Speaker 2: a business that works at backwards from those lifestyle things,

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Speaker 2: that the reason we're doing in the first place, so

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Speaker 2: that we don't miss out on the whole benefit of

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Speaker 2: why we even started this in the first place, and

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Speaker 2: that I didn't call it that at the time, but

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Speaker 2: the end result was having a leaner, slower business. And

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Speaker 2: the more I got into it, the more I studied

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Speaker 2: people who've done this. I met people who had five

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Speaker 2: properties who were the most relaxed people enjoying life I've

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Speaker 2: ever seen in my life, or people with ten properties

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Speaker 2: and make enough money, but they don't have the kind

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Speaker 2: of the weight and all the struggle and the stress

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Speaker 2: of going big, and it just it may it inspired

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Speaker 2: me to try to do that with our own business

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Speaker 2: and help other people do it as well.

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Speaker 3: Yeah. Well, there's a focus there where you're optimizing for

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Speaker 3: life as opposed to optimizing your real estate, like optimizing

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Speaker 3: your portfolio. And we're I mean, I'm going to side

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Speaker 3: with optimizing for life every single time. Yeah, And you're

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Speaker 3: working back from what matters to you. And then you're saying, cool,

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Speaker 3: how do I fund that life achieve that? Yeah?

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Speaker 1: And so many people are doing or doing the opposite,

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Speaker 1: or they just haven't thought enough about what they want

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Speaker 1: their life to look like, and so they're like, well,

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Speaker 1: I guess real estate is the ticket to wealth, and

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Speaker 1: then so they keep pursuing that and they go so

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Speaker 1: dang hard that they they're missing out on the benefits

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Speaker 1: of that real estate could afford you. Actually, in your book,

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Speaker 1: you highlight three different couples and you're like, this, this

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Speaker 1: couple is making just a plenty of money from the

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Speaker 1: real estate portfolio, but they've got the flexibility to go

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Speaker 1: along with it, where somebody else might have a thousand units.

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Speaker 1: They've got this job, this thing they've got to get

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Speaker 1: back to. You want to kind of like talk about

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Speaker 1: those those couples and that kind of scenario you set

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Speaker 1: up in your book and how you think about it.

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Speaker 2: Yeah, the story was, I'll simplify it a little bit.

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Speaker 2: There's a couple Lizen Tom They live in Saint Louis, Missouri,

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Speaker 2: that they could be anywhere in the United States, right,

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Speaker 2: but they had this simple ten property portfolio. In fifteen

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Speaker 2: years after they started, they bought these properties like in

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Speaker 2: the first five or six years, and then they worked

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Speaker 2: on paying them off, Like they actually paid off the

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Speaker 2: debt on their properties, and they owned ten single family

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Speaker 2: houses free and clear, and just to kind of simplify

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Speaker 2: the numbers, when they paid all of their expenses like taxes, insurance, maintenance,

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Speaker 2: all that stuff, they had no mortgage payment anymore. And

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Speaker 2: they made one thousand dollars per property or ten thousand

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Speaker 2: dollars per month, So ten thousand dollars per month, Like,

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Speaker 2: think about what you can do with ten thousand a month.

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Speaker 2: And if that's not your number, maybe you only need

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Speaker 2: five thousand or fifteen thousand, whatever your number is. But

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Speaker 2: the point was, like ten properties produced ten thousand dollars

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Speaker 2: per month, and they were paid off. And they were

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Speaker 2: friends with another couple who had kind of got a

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Speaker 2: different path, which is sort of the traditional path these

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Speaker 2: days if you listen to real estate investor, you know,

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Speaker 2: people talking about it. They went and they got big

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Speaker 2: because they were so good at real estate investing that

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Speaker 2: they said, why should I just stop at my own properties,

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Speaker 2: Like I could go partner with other people and raise money,

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Speaker 2: And they bought thousands of units with a bunch of

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Speaker 2: other people's money. But the reality of the situation, the

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Speaker 2: story was they were taking a trip together, and the

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Speaker 2: couple who had all the thousands of units, they had

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Speaker 2: to go back to the United States. They couldn't extend

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Speaker 2: their trip because they had remodel projects going on. They

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Speaker 2: had a team, you know, one of their team members

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Speaker 2: like quit and they had to go try to replace

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Speaker 2: that person, and so on paper, it looked like they

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Speaker 2: had systems and team and supposedly it was passive. But

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Speaker 2: when you have this big operation with lots of people

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Speaker 2: and lots of things going on, it's like a machine.

402
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Speaker 2: There's always something breaking and there's always something you got

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Speaker 2: to put your attention on. And so what I advocate for,

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Speaker 2: what I think this story shows is kind of like

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Speaker 2: time management, that you could try to manage your time

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Speaker 2: by doing like hundreds of things and having like organizers

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Speaker 2: and to do lists and all that stuff, and you

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Speaker 2: can systematize all that, you know, that's one way to

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Speaker 2: do it, or you can just do stuff like you

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Speaker 2: could just not do as many things every day and

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Speaker 2: your life would be a lot simpler. And real estate

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Speaker 2: investing is the same way, like you got to find

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Speaker 2: a happy medium where yeah, you got to get enough

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Speaker 2: properties to pay your goals, like pay for things to

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Speaker 2: build enough wealth. But there's a happy medium in there,

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Speaker 2: and I think the small and Mighty model says you

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Speaker 2: can get to five properties, ten properties, twenty properties. You

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Speaker 2: can get bigger if you want, depending on how what

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Speaker 2: your goals are. But instead of using the cash to

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Speaker 2: continue getting more and more and more, eventually you reach

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Speaker 2: this stage, which I call in the book the ender stage,

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Speaker 2: where you've built enough wealth to start actually plowing the

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Speaker 2: money back and to use a poker metaphor, like to

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Speaker 2: start taking some chips off the table and actually paying

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Speaker 2: off some debt and simplifying your life. And you don't

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Speaker 2: have to pay off all your properties. But like actually

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Speaker 2: paying off debts kind of sacrilegious in the real estate world.

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Speaker 2: People don't talk about that, Oh, you can't pay debt off,

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Speaker 2: Like what are you talking about? That's not you can't

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Speaker 2: The only Dave Ramsey does that. It's like, no, no,

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Speaker 2: you can. Actually you can do it too, like it's

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Speaker 2: actually a reasonable thing to do.

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Speaker 3: Well, we want to talk more about that how you

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Speaker 3: sold some properties. We want to talk about some of

435
00:19:03,680 --> 00:19:06,440
Speaker 3: the other factors you consider when you are looking at properties,

436
00:19:06,440 --> 00:19:09,120
Speaker 3: and how we should be responding to rising interest rates

437
00:19:09,160 --> 00:19:11,080
Speaker 3: as well, we will get to all of that right

438
00:19:11,119 --> 00:19:11,440
Speaker 3: after this.

439
00:19:20,920 --> 00:19:22,520
Speaker 1: All right, we're back from the break. We're still talking

440
00:19:22,560 --> 00:19:26,360
Speaker 1: with our good friend Chad Carson about real estate investing,

441
00:19:26,520 --> 00:19:30,160
Speaker 1: but kind of taking a different approach than most people

442
00:19:30,240 --> 00:19:33,000
Speaker 1: advocate for these days. And Chad, can you actually maybe

443
00:19:33,080 --> 00:19:34,479
Speaker 1: hop in the time machine a little bit. You were

444
00:19:34,480 --> 00:19:36,359
Speaker 1: talking about when you used to listen to tapes, so

445
00:19:36,400 --> 00:19:38,960
Speaker 1: maybe your brain is already there. But about how you

446
00:19:38,960 --> 00:19:41,399
Speaker 1: got into real estate in the first place, because and

447
00:19:41,760 --> 00:19:45,080
Speaker 1: you actually made a quick pivot in the beginning. House

448
00:19:45,119 --> 00:19:47,200
Speaker 1: hacking is part of that story. I'd love for you

449
00:19:47,280 --> 00:19:48,480
Speaker 1: to tell our listeners about that.

450
00:19:48,960 --> 00:19:52,040
Speaker 2: Yeah, I was listening to tapes, that's true, and it

451
00:19:52,080 --> 00:19:53,560
Speaker 2: was back when I was twenty three years old, but

452
00:19:53,600 --> 00:19:56,080
Speaker 2: I had graduated from college. I was a biology major.

453
00:19:56,080 --> 00:19:57,399
Speaker 2: I thought I was going to go to med school,

454
00:19:57,400 --> 00:19:58,600
Speaker 2: and I was like, all right, I'm just gonna take

455
00:19:58,600 --> 00:20:00,479
Speaker 2: a break for a year or two and just do

456
00:20:00,520 --> 00:20:03,880
Speaker 2: this entrepreneurship thing. And I actually started trying to flip houses.

457
00:20:04,240 --> 00:20:05,840
Speaker 2: So you know, in real estate, you could have the

458
00:20:05,840 --> 00:20:07,800
Speaker 2: rental property business, which is what I do now and

459
00:20:07,880 --> 00:20:09,520
Speaker 2: a lot of people do, and you can do this

460
00:20:09,560 --> 00:20:11,920
Speaker 2: part time on the side, whereas what I was doing

461
00:20:12,320 --> 00:20:16,520
Speaker 2: was going out looking for deals, finding fixer upper properties, foreclosures.

462
00:20:16,640 --> 00:20:18,160
Speaker 2: I'd try to get them at a really low price,

463
00:20:18,200 --> 00:20:20,200
Speaker 2: and then my business partner and I would flip them,

464
00:20:20,280 --> 00:20:23,400
Speaker 2: either fixing them up and selling them or just reselling

465
00:20:23,400 --> 00:20:25,520
Speaker 2: them to another investor. So that's how I put food

466
00:20:25,520 --> 00:20:27,240
Speaker 2: on the table, like that was my job. And once

467
00:20:27,280 --> 00:20:28,960
Speaker 2: I started doing that for a year, I kind of

468
00:20:28,960 --> 00:20:31,080
Speaker 2: forgot about med school and said, Eh, I'm just gonna

469
00:20:31,119 --> 00:20:33,080
Speaker 2: do this, do this thing on my own, and I

470
00:20:33,119 --> 00:20:34,800
Speaker 2: don't want to go to the traditional path anymore.

471
00:20:35,040 --> 00:20:36,640
Speaker 1: I'll make more money than a doctor anyway.

472
00:20:36,760 --> 00:20:39,560
Speaker 2: Yeah, well maybe not. I don't think I think I

473
00:20:39,560 --> 00:20:41,760
Speaker 2: would have made more money. I didn't do that well,

474
00:20:41,800 --> 00:20:43,840
Speaker 2: but I've survived and I had a lot of fun

475
00:20:43,840 --> 00:20:45,520
Speaker 2: and I played pickup basketball in the middle of the day,

476
00:20:45,560 --> 00:20:49,040
Speaker 2: so that I've met my goals. But I also, you know,

477
00:20:49,280 --> 00:20:51,600
Speaker 2: in the early years, like anytime you start something new,

478
00:20:52,080 --> 00:20:55,479
Speaker 2: but your housing expense is a big deal. And so

479
00:20:55,600 --> 00:20:58,679
Speaker 2: I quickly learned that about this strategy where you can

480
00:20:58,760 --> 00:21:01,480
Speaker 2: move into a property and rent out part of the

481
00:21:01,480 --> 00:21:04,320
Speaker 2: property that you live in called house hacking today, and

482
00:21:04,440 --> 00:21:06,760
Speaker 2: I lived. I actually bought a fourplex and I'm in

483
00:21:06,800 --> 00:21:09,200
Speaker 2: a college town, Clemson, and so we had these little, small,

484
00:21:09,240 --> 00:21:11,280
Speaker 2: multi family properties and this is what happened to be

485
00:21:11,280 --> 00:21:14,080
Speaker 2: pretty close to Clemson's campus, and so it was a

486
00:21:14,119 --> 00:21:16,440
Speaker 2: it was a major fixer upper. Like in fact, I

487
00:21:16,480 --> 00:21:19,280
Speaker 2: showed up the property was vacant and it had Merry

488
00:21:19,320 --> 00:21:22,520
Speaker 2: Christmas spray painted across the front of the whole building,

489
00:21:23,720 --> 00:21:25,680
Speaker 2: like somebody like tagged it in the middle of the night.

490
00:21:25,760 --> 00:21:27,760
Speaker 2: And I walked in. I walked into unit four and

491
00:21:27,760 --> 00:21:29,320
Speaker 2: there was an outline of a chalk out line of

492
00:21:29,359 --> 00:21:32,000
Speaker 2: a body in unit number four. And I'm like, Okay,

493
00:21:32,119 --> 00:21:35,080
Speaker 2: I don't know that I can do this, And but

494
00:21:35,160 --> 00:21:37,320
Speaker 2: my I had a mentor or luckily, he was like, no, no,

495
00:21:37,359 --> 00:21:39,800
Speaker 2: that's perfect. That's exactly what you want. You know, you

496
00:21:39,840 --> 00:21:42,240
Speaker 2: wanted to look horrible that nobody else wants this property.

497
00:21:42,280 --> 00:21:43,719
Speaker 2: And I was like, all right, I guess I'll do this.

498
00:21:43,840 --> 00:21:46,560
Speaker 2: And and so I fixed that property up. I had

499
00:21:46,600 --> 00:21:48,760
Speaker 2: to borrow money to do it, but I moved into

500
00:21:48,840 --> 00:21:51,320
Speaker 2: unit number two and I rented all the other three

501
00:21:51,400 --> 00:21:55,639
Speaker 2: units out and my expenses principal, interest, taxes, insurance, and

502
00:21:55,680 --> 00:21:58,000
Speaker 2: a little bit of my maintenance was covered one hundred

503
00:21:58,000 --> 00:22:01,719
Speaker 2: percent by the other three and so there we go.

504
00:22:01,840 --> 00:22:03,879
Speaker 3: Number one monthly expense covered yeah, covered.

505
00:22:03,920 --> 00:22:05,960
Speaker 2: Yeah. And I still had my old Toyota that I

506
00:22:06,119 --> 00:22:07,800
Speaker 2: drove for like many years after that. So like I

507
00:22:07,920 --> 00:22:11,320
Speaker 2: was living lean, lean, lean, lean, very cheap, which allowed

508
00:22:11,320 --> 00:22:13,480
Speaker 2: me to stay as an entrepreneur because it got rough.

509
00:22:13,520 --> 00:22:15,399
Speaker 2: You know, we got rough, so I had a roller coaster.

510
00:22:15,400 --> 00:22:17,359
Speaker 2: I'd do really well for a month and I'd lose

511
00:22:17,400 --> 00:22:20,720
Speaker 2: money next month, and that helped me kind of sustain

512
00:22:20,840 --> 00:22:22,720
Speaker 2: that journey of not having to go back to a

513
00:22:22,760 --> 00:22:25,400
Speaker 2: regular job. But anyone who can use that like house

514
00:22:25,440 --> 00:22:27,720
Speaker 2: hacking is amazing. I feel like it's the if you're

515
00:22:27,760 --> 00:22:29,679
Speaker 2: willing to do it. There's so many variations of that,

516
00:22:29,720 --> 00:22:32,800
Speaker 2: but especially early in your career, you can use that

517
00:22:32,840 --> 00:22:35,240
Speaker 2: as a kind of jumping off point into rental properties

518
00:22:35,240 --> 00:22:36,840
Speaker 2: because you can move into the house with a smaller

519
00:22:36,880 --> 00:22:39,160
Speaker 2: down payment. You can use it get a long term

520
00:22:39,200 --> 00:22:41,760
Speaker 2: loan because it's an owner occupant property, and you can

521
00:22:41,840 --> 00:22:43,439
Speaker 2: learn how to be a landlord. You can learn how

522
00:22:43,440 --> 00:22:45,000
Speaker 2: to do it. If you make some mistakes, not a

523
00:22:45,000 --> 00:22:47,320
Speaker 2: big deal. You're right there. And it was where I

524
00:22:47,400 --> 00:22:49,359
Speaker 2: sort of learned how to do it and realized I

525
00:22:49,400 --> 00:22:52,840
Speaker 2: could be a rental landlord and we still own that property.

526
00:22:52,840 --> 00:22:55,000
Speaker 2: That property that we bought. It was worth one hundred

527
00:22:55,040 --> 00:22:57,080
Speaker 2: and thirty one hundred and fifty thousand when we bought it.

528
00:22:57,400 --> 00:23:00,000
Speaker 2: Now it's two hundred and fifty three hundred thousand bucks,

529
00:23:00,119 --> 00:23:01,880
Speaker 2: you know, So it's it's done well and it's making

530
00:23:01,920 --> 00:23:04,720
Speaker 2: income and it's still We started doing a bunch more

531
00:23:04,760 --> 00:23:05,399
Speaker 2: of those after that.

532
00:23:05,840 --> 00:23:08,280
Speaker 3: Yeah, That's what I love about house hacking is that

533
00:23:08,359 --> 00:23:10,680
Speaker 3: it addressed, like at the core of that is are

534
00:23:10,680 --> 00:23:13,000
Speaker 3: you willing to do something that most folks aren't willing

535
00:23:13,040 --> 00:23:15,680
Speaker 3: to do in order to get ahead financially? And it's

536
00:23:16,320 --> 00:23:18,960
Speaker 3: just an alternative way of living And to a certain extent,

537
00:23:19,000 --> 00:23:20,359
Speaker 3: that's what it is. That's what it takes to be

538
00:23:20,440 --> 00:23:24,080
Speaker 3: a small time landlord, is just approaching the issue of

539
00:23:24,119 --> 00:23:26,560
Speaker 3: housing from a slightly different angle. And it can be

540
00:23:26,600 --> 00:23:28,399
Speaker 3: like you think of it as an investment, but it's

541
00:23:28,400 --> 00:23:30,200
Speaker 3: also putting a roof over your head, reducing your costs

542
00:23:30,200 --> 00:23:32,320
Speaker 3: every month. I mean, it's got that's killer double whammy going.

543
00:23:32,400 --> 00:23:35,080
Speaker 3: It's amazing. Yeah, So chat like, what is it right

544
00:23:35,119 --> 00:23:38,480
Speaker 3: now that you're looking that you're looking for, Like, when

545
00:23:38,520 --> 00:23:41,080
Speaker 3: you're looking for a property, what are the factors that

546
00:23:41,080 --> 00:23:42,840
Speaker 3: you're considering, Like is it all about the numbers or

547
00:23:42,880 --> 00:23:45,119
Speaker 3: other considerations that you're keeping in mind.

548
00:23:45,520 --> 00:23:47,200
Speaker 2: Yeah, I learned early on. I used to think it

549
00:23:47,240 --> 00:23:49,080
Speaker 2: was all about the numbers, and the numbers are important,

550
00:23:49,119 --> 00:23:50,840
Speaker 2: like and I'll talk a little bit about some basic

551
00:23:50,880 --> 00:23:53,160
Speaker 2: ways to run the numbers. But I now that I've

552
00:23:53,320 --> 00:23:55,439
Speaker 2: matured a little bit, I realized that there's sort of

553
00:23:55,440 --> 00:23:58,080
Speaker 2: like a two sides of a coin. Like you every

554
00:23:58,200 --> 00:24:00,840
Speaker 2: a good deal, it has to have some that make sense.

555
00:24:00,880 --> 00:24:03,000
Speaker 2: So cash flow is a certain type of analysis you

556
00:24:03,040 --> 00:24:04,600
Speaker 2: can do. You want a certain amount of cash flow,

557
00:24:04,960 --> 00:24:06,520
Speaker 2: or you want it to cover your mortgage and then

558
00:24:06,560 --> 00:24:08,639
Speaker 2: have a certain amount of money over that mortgage. But

559
00:24:08,760 --> 00:24:10,760
Speaker 2: you also want to have a certain type of location

560
00:24:11,080 --> 00:24:13,919
Speaker 2: because the money you make in real estate is sort

561
00:24:13,960 --> 00:24:17,600
Speaker 2: of the consequence. It's the outcome, but the cause of that,

562
00:24:17,680 --> 00:24:20,800
Speaker 2: Like the core principle of real estate investing is providing

563
00:24:20,840 --> 00:24:23,600
Speaker 2: housing for someone, so someone's going to live there, and

564
00:24:23,680 --> 00:24:27,200
Speaker 2: so the location they live in, the type of property

565
00:24:27,200 --> 00:24:29,800
Speaker 2: they live in, like, those are so critical. And I

566
00:24:29,840 --> 00:24:32,199
Speaker 2: had a mentor early in my career who told me,

567
00:24:32,520 --> 00:24:34,679
Speaker 2: he said, Chad, you always want to buy properties that

568
00:24:34,760 --> 00:24:37,480
Speaker 2: have some sort of romance to them, and I was

569
00:24:37,480 --> 00:24:39,480
Speaker 2: like romance, Like what do you mean romance? Like what

570
00:24:40,160 --> 00:24:42,560
Speaker 2: are you talking about? And his point was like real

571
00:24:42,640 --> 00:24:45,600
Speaker 2: estate is an emotional either a purchase or if you're

572
00:24:45,600 --> 00:24:47,840
Speaker 2: renting a property is still it's an emotional thing, like

573
00:24:47,840 --> 00:24:50,159
Speaker 2: you're living there for an emotional reason, and yes, you

574
00:24:50,160 --> 00:24:51,960
Speaker 2: have to have a roof over your head, but if

575
00:24:52,000 --> 00:24:53,760
Speaker 2: you don't have a property that has some sort of

576
00:24:53,840 --> 00:24:55,840
Speaker 2: romance to it meaning, and it could be something simple.

577
00:24:55,880 --> 00:24:57,720
Speaker 2: It could be like, you know, you, guys, I resonate

578
00:24:57,720 --> 00:24:59,720
Speaker 2: with you that we like walkable locations, like we like

579
00:24:59,760 --> 00:25:02,199
Speaker 2: a with a sidewalk and you know, big trees and

580
00:25:02,240 --> 00:25:04,480
Speaker 2: you can walk to a local coffee shop like that.

581
00:25:04,480 --> 00:25:07,560
Speaker 2: That's romance. Like that that idea for someone that they

582
00:25:07,560 --> 00:25:10,560
Speaker 2: can walk somewhere. For a certain type of person, that's romance.

583
00:25:10,720 --> 00:25:12,359
Speaker 2: For another type of person, it might mean, Hey, I

584
00:25:12,400 --> 00:25:14,359
Speaker 2: want to live close to where I work, but I

585
00:25:14,359 --> 00:25:16,600
Speaker 2: want to live out with a two acre parcel in

586
00:25:16,640 --> 00:25:19,080
Speaker 2: the country, and that's like, that's my idea of romance.

587
00:25:19,440 --> 00:25:22,119
Speaker 2: The principle is the same is that you need to

588
00:25:22,119 --> 00:25:25,040
Speaker 2: buy your properties with that in mine like number one.

589
00:25:25,400 --> 00:25:27,320
Speaker 2: And if you do that, like if you buy properties

590
00:25:27,320 --> 00:25:31,119
Speaker 2: that are in demand because there's an emotional attraction to

591
00:25:31,160 --> 00:25:34,800
Speaker 2: them for some reason, then the money stuff will take

592
00:25:34,840 --> 00:25:36,680
Speaker 2: care of itself. Just for example, I have a single

593
00:25:36,680 --> 00:25:38,760
Speaker 2: family house that we used to live in, and every

594
00:25:38,760 --> 00:25:40,560
Speaker 2: time I put it on the market to rent, I

595
00:25:40,600 --> 00:25:43,080
Speaker 2: put it on Zilo and within a week I have

596
00:25:43,240 --> 00:25:46,879
Speaker 2: at least five, sometimes ten applications from people who want

597
00:25:46,880 --> 00:25:49,160
Speaker 2: to rent the property. And this is at market rent.

598
00:25:49,160 --> 00:25:51,119
Speaker 2: I'm not like, I'm not, you know, not putting it

599
00:25:51,160 --> 00:25:53,120
Speaker 2: way below market rent, like just a little bit below

600
00:25:53,160 --> 00:25:55,880
Speaker 2: market rent. And I get to choose like the best,

601
00:25:55,960 --> 00:25:58,239
Speaker 2: most qualified tenant, and they tend to stay, and they

602
00:25:58,280 --> 00:26:00,400
Speaker 2: tend to stay a long time as well. And why

603
00:26:00,480 --> 00:26:02,959
Speaker 2: is that that? That is because that property has a romance.

604
00:26:02,960 --> 00:26:05,440
Speaker 2: That property is in a neighborhood that's attractive, it's close

605
00:26:05,480 --> 00:26:07,199
Speaker 2: to things that people want to be at, and so

606
00:26:07,400 --> 00:26:10,240
Speaker 2: like that principle is something I missed early in my career.

607
00:26:10,240 --> 00:26:12,720
Speaker 2: I bought some properties with good numbers on paper, but

608
00:26:12,960 --> 00:26:15,600
Speaker 2: they were in the wrong location. They and so you

609
00:26:15,640 --> 00:26:17,879
Speaker 2: need to control the things you can control, which is

610
00:26:17,920 --> 00:26:20,359
Speaker 2: where the property is. You can't move that house, at

611
00:26:20,480 --> 00:26:22,639
Speaker 2: least can't do it easily, So you want to you

612
00:26:22,800 --> 00:26:24,720
Speaker 2: you want to you want to pick a good location first,

613
00:26:24,840 --> 00:26:26,679
Speaker 2: and then yes, learn how to run the numbers, make

614
00:26:26,720 --> 00:26:28,920
Speaker 2: sure the financing works, make sure that we can talk

615
00:26:28,920 --> 00:26:30,919
Speaker 2: about that too. But I think if you get that

616
00:26:31,040 --> 00:26:33,199
Speaker 2: idea of location and then a good property that has

617
00:26:33,200 --> 00:26:35,320
Speaker 2: a good layout, you'll you'll a lot of the other

618
00:26:35,359 --> 00:26:36,479
Speaker 2: stuff will take care of itself.

619
00:26:36,880 --> 00:26:39,600
Speaker 1: That can also reduce the hassle orright hassle factor, which

620
00:26:39,640 --> 00:26:42,080
Speaker 1: is one of the biggest reasons that people say, yeah,

621
00:26:42,200 --> 00:26:43,640
Speaker 1: real estate, I don't think it's I don't think that's

622
00:26:43,680 --> 00:26:46,600
Speaker 1: for me. And I think also location can matter not

623
00:26:46,760 --> 00:26:50,280
Speaker 1: just in the monthly cash flow, but also when it

624
00:26:50,280 --> 00:26:53,000
Speaker 1: comes to appreciation of that property. Yes, but uh, talk

625
00:26:53,040 --> 00:26:55,280
Speaker 1: to me about passive income chat. I feel like it's

626
00:26:55,359 --> 00:26:57,840
Speaker 1: it's sold one way on the internet. Passive income is

627
00:26:57,880 --> 00:27:00,680
Speaker 1: like a buzzword that people use to people to follow

628
00:27:00,720 --> 00:27:03,080
Speaker 1: them and try to talk to them about. Hey, here's

629
00:27:03,080 --> 00:27:05,080
Speaker 1: how you can like generate thousands of dollars a month

630
00:27:05,119 --> 00:27:08,640
Speaker 1: in passive income. It's so easy, follow me. But real

631
00:27:08,760 --> 00:27:13,200
Speaker 1: estate is sure you can get passive income over time.

632
00:27:13,400 --> 00:27:15,840
Speaker 1: But you're also talking about a part time job, right.

633
00:27:15,800 --> 00:27:18,240
Speaker 2: Yeah, it is a part time job. Especially early on

634
00:27:18,320 --> 00:27:21,040
Speaker 2: I mentioned earlier. It starts off like a startup company,

635
00:27:21,080 --> 00:27:23,000
Speaker 2: like a you know, a little venture capital startup company.

636
00:27:23,040 --> 00:27:25,280
Speaker 2: So it's going to take some time and effort upfront.

637
00:27:25,320 --> 00:27:28,560
Speaker 2: And I call that like your psychological down payment. Like

638
00:27:28,600 --> 00:27:30,879
Speaker 2: if you're not willing to like put that effort and

639
00:27:30,920 --> 00:27:32,920
Speaker 2: that time in upfront, real estate is not your thing,

640
00:27:33,240 --> 00:27:35,879
Speaker 2: and that's fine. There's other options, there's index funds, and

641
00:27:35,920 --> 00:27:37,800
Speaker 2: sometimes it's just a practical reason. If you have a

642
00:27:37,880 --> 00:27:40,480
Speaker 2: job that is taking like sixty hours of your week

643
00:27:40,680 --> 00:27:43,280
Speaker 2: any and having an hour of mental energy on some

644
00:27:43,359 --> 00:27:46,280
Speaker 2: other venture would like tip you over the edge, Like

645
00:27:46,560 --> 00:27:47,879
Speaker 2: you don't need to do real estate like that you

646
00:27:48,040 --> 00:27:49,840
Speaker 2: haven for it. Yeah, you don't have time. That's cool,

647
00:27:50,280 --> 00:27:52,159
Speaker 2: Maybe you will next year. Maybe well another time in

648
00:27:52,160 --> 00:27:55,320
Speaker 2: your life. It requires some effort upfront, and you either

649
00:27:55,359 --> 00:27:59,080
Speaker 2: need to spend time on negotiating properties, on running the numbers,

650
00:27:59,240 --> 00:28:02,120
Speaker 2: on finding good locations, on building a team, like that's

651
00:28:02,119 --> 00:28:04,440
Speaker 2: where you're going to spend your time up front now.

652
00:28:04,440 --> 00:28:06,320
Speaker 2: But the thing is, like I mentioned earlier, is that

653
00:28:06,400 --> 00:28:09,680
Speaker 2: it eventually becomes passive. Though in real estate's pretty cool

654
00:28:09,680 --> 00:28:12,399
Speaker 2: in that way, is that you put that psychological down payment,

655
00:28:12,400 --> 00:28:15,200
Speaker 2: you put that financial down payment, and then you stabilize

656
00:28:15,200 --> 00:28:17,760
Speaker 2: that property, you get a good tenant. I've had tenants

657
00:28:17,760 --> 00:28:20,280
Speaker 2: who stayed for ten years or more in some properties.

658
00:28:20,800 --> 00:28:25,080
Speaker 2: And when that happens, like dream dream, It doesn't happen

659
00:28:25,080 --> 00:28:27,760
Speaker 2: every day, but like it happens, and if it does,

660
00:28:27,840 --> 00:28:30,159
Speaker 2: I think about how little work you have to do

661
00:28:30,440 --> 00:28:34,720
Speaker 2: on a property if there's no turnover, if they're not moving. Yes,

662
00:28:34,760 --> 00:28:37,240
Speaker 2: if something breaks, you have to fix it. But when

663
00:28:37,240 --> 00:28:39,160
Speaker 2: I was in Spain, I would have something break. Even

664
00:28:39,160 --> 00:28:41,760
Speaker 2: the properties I was self managed, and my tenant had

665
00:28:41,760 --> 00:28:44,160
Speaker 2: a plumber's phone number. They could call the plumber like

666
00:28:44,200 --> 00:28:46,080
Speaker 2: they could say, Hey, here's my plumber. I really like

667
00:28:46,120 --> 00:28:48,640
Speaker 2: this plumber. Call them. I'll pay for it, but go

668
00:28:48,640 --> 00:28:50,680
Speaker 2: ahead and call them if it's a problem. And if

669
00:28:50,680 --> 00:28:52,520
Speaker 2: it's you know, if it gets out of whack and

670
00:28:52,520 --> 00:28:54,840
Speaker 2: they're spending money, too much money, I can try to

671
00:28:55,160 --> 00:28:57,720
Speaker 2: change that policy. But it doesn't have to be it

672
00:28:57,760 --> 00:29:00,480
Speaker 2: doesn't have to be a really huge time, and you

673
00:29:00,480 --> 00:29:02,040
Speaker 2: can do it from anywhere in the world as long

674
00:29:02,040 --> 00:29:04,280
Speaker 2: as you have a cell phone. And so that's where

675
00:29:04,320 --> 00:29:06,080
Speaker 2: the end game of real estate is that it could

676
00:29:06,120 --> 00:29:08,560
Speaker 2: be very passive. But it also that keyword that I

677
00:29:08,560 --> 00:29:12,240
Speaker 2: mentioned earlier. It's also recurring. This recurring income. It's a

678
00:29:12,240 --> 00:29:15,000
Speaker 2: lot like your salary and so like you used to

679
00:29:15,200 --> 00:29:17,440
Speaker 2: used to having that monthly salary, and that's a nice

680
00:29:17,440 --> 00:29:19,520
Speaker 2: thing to have, and real estate can replace that. It

681
00:29:19,520 --> 00:29:20,640
Speaker 2: can be very much like that.

682
00:29:20,880 --> 00:29:21,400
Speaker 1: I like that.

683
00:29:21,560 --> 00:29:24,800
Speaker 3: I've never given my attendants the number of the plumber before,

684
00:29:24,800 --> 00:29:26,480
Speaker 3: but that's a little trick I might have to. I

685
00:29:26,560 --> 00:29:29,240
Speaker 3: might have still from you until you get a bill

686
00:29:29,280 --> 00:29:31,320
Speaker 3: and you realize that, like they have them install like

687
00:29:31,360 --> 00:29:32,200
Speaker 3: a bidet or something.

688
00:29:34,440 --> 00:29:36,440
Speaker 1: I remember being like six hours away one time and

689
00:29:36,480 --> 00:29:39,400
Speaker 1: there was a water issue at at one of my rentals,

690
00:29:39,720 --> 00:29:41,920
Speaker 1: and I was like, usually I'm used to going I

691
00:29:41,960 --> 00:29:43,960
Speaker 1: was used to going over there when there was an issue,

692
00:29:44,240 --> 00:29:46,640
Speaker 1: just to scope it out, get lay the land. And

693
00:29:46,680 --> 00:29:48,560
Speaker 1: that was the first time I realized I just called

694
00:29:48,560 --> 00:29:50,440
Speaker 1: the plumber. He took care of it because I was

695
00:29:50,440 --> 00:29:53,720
Speaker 1: still out of town, and the light went off in

696
00:29:53,760 --> 00:29:55,680
Speaker 1: my brain to go there. I don't even know that

697
00:29:55,760 --> 00:29:57,480
Speaker 1: I ever have to go over there again, which is

698
00:29:57,520 --> 00:30:00,240
Speaker 1: kind of crazy. Yeah, I mean I still like to

699
00:30:00,280 --> 00:30:01,840
Speaker 1: go check on it, set it once or twice a

700
00:30:01,880 --> 00:30:03,680
Speaker 1: year kind of thing. But like it's one of those

701
00:30:03,680 --> 00:30:06,280
Speaker 1: things where over time I've been able to become less

702
00:30:06,280 --> 00:30:08,600
Speaker 1: and less active, and I just remember that being this

703
00:30:08,760 --> 00:30:11,720
Speaker 1: like ah wow, oh my gosh. I didn't realize that

704
00:30:12,000 --> 00:30:14,640
Speaker 1: I didn't have to be this complete active participant all

705
00:30:14,680 --> 00:30:16,280
Speaker 1: the time in the property exactly.

706
00:30:16,400 --> 00:30:16,520
Speaker 3: You know.

707
00:30:16,640 --> 00:30:18,520
Speaker 2: That's that's the benefit that some people who invest long

708
00:30:18,560 --> 00:30:21,000
Speaker 2: distance have over those of us who started local is

709
00:30:21,040 --> 00:30:23,080
Speaker 2: that you have to treat it as a business from

710
00:30:23,160 --> 00:30:25,960
Speaker 2: the very beginning. Like if you're in San Francisco and

711
00:30:26,000 --> 00:30:28,560
Speaker 2: you're buying a property in Georgia, like you can't go

712
00:30:28,600 --> 00:30:30,840
Speaker 2: look at it, sorry, like it's not gonna happen, And

713
00:30:30,880 --> 00:30:33,719
Speaker 2: so it forces you to think like a business owner

714
00:30:34,040 --> 00:30:36,600
Speaker 2: as opposed to and there's nothing wrong with going to

715
00:30:36,640 --> 00:30:38,560
Speaker 2: the property and checking it out, Like I'm all for that,

716
00:30:38,960 --> 00:30:41,440
Speaker 2: especially when you're learning, especially when you're growing, especially when

717
00:30:41,480 --> 00:30:43,320
Speaker 2: you're trying to save money, Like that's cool, Like there's

718
00:30:43,360 --> 00:30:45,680
Speaker 2: nothing wrong with it. But eventually, like I think, this

719
00:30:45,720 --> 00:30:46,960
Speaker 2: is what I wrote about in the book about I

720
00:30:46,960 --> 00:30:49,360
Speaker 2: have a whole chapter on systems like that, there's a

721
00:30:49,800 --> 00:30:51,520
Speaker 2: you should think kind of like Henry Ford did when

722
00:30:51,560 --> 00:30:53,920
Speaker 2: he built the Model T and built the assembly line

723
00:30:53,960 --> 00:30:56,440
Speaker 2: like that for him, the process of building a car

724
00:30:56,600 --> 00:30:59,080
Speaker 2: became the thing that he worked on. It became the

725
00:30:59,120 --> 00:31:02,040
Speaker 2: thing he tinkered with. And you, as a real estate investor,

726
00:31:02,280 --> 00:31:04,680
Speaker 2: should think about your business as this is like a

727
00:31:04,760 --> 00:31:06,440
Speaker 2: kind of like a machine, kind of like an engine,

728
00:31:06,760 --> 00:31:08,960
Speaker 2: and you have to tinker with it and you are there.

729
00:31:09,160 --> 00:31:12,000
Speaker 2: You're not just working in your business. You're actually working

730
00:31:12,080 --> 00:31:15,440
Speaker 2: on your business, trying to create systems and processes and

731
00:31:15,520 --> 00:31:17,880
Speaker 2: building a team. And if you do that, that's where

732
00:31:17,880 --> 00:31:19,560
Speaker 2: the good stuff happens. On the other end, that's where

733
00:31:19,640 --> 00:31:21,720
Speaker 2: you can have the benefit of the income. And yes,

734
00:31:21,720 --> 00:31:23,600
Speaker 2: you have to pay somebody to manage it. Sometimes you

735
00:31:23,680 --> 00:31:25,520
Speaker 2: have to pay a plumber who might charge more than you.

736
00:31:25,800 --> 00:31:27,520
Speaker 2: But if you treat it like a business, you run

737
00:31:27,520 --> 00:31:29,960
Speaker 2: the numbers so that you can pay people to do

738
00:31:30,000 --> 00:31:32,760
Speaker 2: those things for you, and your profit as the owner

739
00:31:32,760 --> 00:31:35,560
Speaker 2: of that business is what's left over after you pay

740
00:31:35,600 --> 00:31:37,320
Speaker 2: all those other people to do those things.

741
00:31:37,680 --> 00:31:39,880
Speaker 3: It also just comes down to what it is that

742
00:31:39,920 --> 00:31:42,280
Speaker 3: you're optimizing for. Like we kind of touched on that

743
00:31:42,320 --> 00:31:44,600
Speaker 3: there earlier, but like it makes me think about you said,

744
00:31:44,640 --> 00:31:47,959
Speaker 3: you've had tenants that have been around for ten years,

745
00:31:48,600 --> 00:31:52,160
Speaker 3: and I'm guessing you were less likely to raise the

746
00:31:52,200 --> 00:31:54,960
Speaker 3: rent dramatically on that tenant because if they're a good tenant,

747
00:31:54,960 --> 00:31:56,400
Speaker 3: you probably wanted to keep them in there. And now,

748
00:31:56,440 --> 00:31:59,600
Speaker 3: were you optimizing for the amount of cash flow that

749
00:31:59,600 --> 00:32:02,600
Speaker 3: you had by doing that? No, probably not, but you

750
00:32:02,640 --> 00:32:04,840
Speaker 3: were optimizing for what it is that you were seeking.

751
00:32:05,120 --> 00:32:08,840
Speaker 3: This is like the whole building wealth versus achieving some

752
00:32:09,080 --> 00:32:12,120
Speaker 3: sense of freedom that you talk about. But is that true?

753
00:32:12,200 --> 00:32:14,080
Speaker 2: It is true? Yeah, Well, somebody's been there ten years.

754
00:32:14,080 --> 00:32:16,920
Speaker 2: I mean, it's it's automatically below the market. And that's

755
00:32:16,960 --> 00:32:18,400
Speaker 2: not to say we don't raise the rents, like we

756
00:32:18,680 --> 00:32:20,600
Speaker 2: do raise it some. But for I'll give you a

757
00:32:20,640 --> 00:32:23,640
Speaker 2: practical example. I've got a property where the tenant was

758
00:32:23,680 --> 00:32:26,160
Speaker 2: willing to renew or I I sent an email or

759
00:32:26,160 --> 00:32:29,400
Speaker 2: a text saying, hey, we'd like to renew. The market

760
00:32:29,440 --> 00:32:32,640
Speaker 2: rent right now is eighteen hundred dollars per month, or

761
00:32:32,880 --> 00:32:35,160
Speaker 2: maybe it's two market rents two thousand dollars per month.

762
00:32:35,320 --> 00:32:37,920
Speaker 2: They were paying like fifteen hundred and fifty dollars per

763
00:32:37,920 --> 00:32:40,840
Speaker 2: month like this. The rents had gone really up, really fast,

764
00:32:41,080 --> 00:32:42,640
Speaker 2: and we said we need to raise the rent some.

765
00:32:42,800 --> 00:32:45,720
Speaker 2: Our insurance is going up, maintenance expenses are going up,

766
00:32:45,920 --> 00:32:47,160
Speaker 2: but we don't want to. We're not going to raise

767
00:32:47,160 --> 00:32:48,840
Speaker 2: it up to the market level. We need to raise

768
00:32:48,840 --> 00:32:51,680
Speaker 2: it by fifty bucks per month. And so that's the

769
00:32:51,760 --> 00:32:55,240
Speaker 2: kind of you know, they're still getting a better deal

770
00:32:55,280 --> 00:32:56,800
Speaker 2: than they could if they had to move somewhere else.

771
00:32:57,040 --> 00:32:59,680
Speaker 2: But we're covering our calls. But I know landlords who

772
00:32:59,680 --> 00:33:01,680
Speaker 2: don't ever raise the rents at all, and that's that's

773
00:33:01,720 --> 00:33:04,040
Speaker 2: you know, that's your choice, and that that's a different

774
00:33:04,120 --> 00:33:07,040
Speaker 2: choice than if you were an institutional landlord, which you

775
00:33:07,080 --> 00:33:09,040
Speaker 2: guys know, I'm kind of like hot on trying to

776
00:33:09,200 --> 00:33:11,800
Speaker 2: say how small mighty investors I think are much better

777
00:33:11,840 --> 00:33:16,720
Speaker 2: for communities than these big institutional Wall Street landlords. Yeah,

778
00:33:16,880 --> 00:33:20,000
Speaker 2: the their job is to maximize their return for their investors,

779
00:33:20,400 --> 00:33:22,200
Speaker 2: and they're gonna they're going to push the rent to

780
00:33:22,200 --> 00:33:24,040
Speaker 2: market as much as they can, over and.

781
00:33:23,960 --> 00:33:25,640
Speaker 1: Every again, often at the expense of the tenant.

782
00:33:25,760 --> 00:33:28,440
Speaker 2: Exactly. Yes, And so I feel like it's not that

783
00:33:28,560 --> 00:33:32,560
Speaker 2: the landlord tenant relationship is often put as an adversarial relationship,

784
00:33:32,880 --> 00:33:36,160
Speaker 2: but I very very rarely felt that with my tenants,

785
00:33:36,200 --> 00:33:38,440
Speaker 2: Like I felt like I'm providing value to them, giving

786
00:33:38,520 --> 00:33:40,240
Speaker 2: them a nice home that we care about and we

787
00:33:40,280 --> 00:33:42,200
Speaker 2: have pride in. We're not gonna. We're not We're not

788
00:33:42,280 --> 00:33:44,280
Speaker 2: slumming that property out. We want to treat it well.

789
00:33:44,280 --> 00:33:46,280
Speaker 2: We want to treat the tenant well. And they're in

790
00:33:46,280 --> 00:33:48,760
Speaker 2: the return. They're paying rent, and they're they're maintaining the

791
00:33:48,800 --> 00:33:50,320
Speaker 2: house as if it was their own. They're taking care

792
00:33:50,360 --> 00:33:53,040
Speaker 2: of it. And during COVID was one of the biggest

793
00:33:53,040 --> 00:33:55,400
Speaker 2: aha moments for me, was like I read in the

794
00:33:55,440 --> 00:33:57,920
Speaker 2: newspapers on Wall Street Journal and all this about how

795
00:33:57,960 --> 00:34:00,680
Speaker 2: so many tenants weren't paying and how many aviasorial the

796
00:34:00,760 --> 00:34:04,000
Speaker 2: Landlorder tenant relationship was ninety nine point nine percent of

797
00:34:04,040 --> 00:34:06,560
Speaker 2: our tenants, we're still paying on time. A couple of

798
00:34:06,560 --> 00:34:08,600
Speaker 2: them had issues and we worked it out. They took

799
00:34:08,680 --> 00:34:11,040
Speaker 2: care of the properties. They appreciated having a home to

800
00:34:11,080 --> 00:34:13,279
Speaker 2: live in, and I appreciated them. And it was I

801
00:34:13,320 --> 00:34:16,400
Speaker 2: had never been so grateful in my life for our tenants,

802
00:34:16,480 --> 00:34:18,480
Speaker 2: and I hope they were also grateful for the home

803
00:34:18,520 --> 00:34:21,840
Speaker 2: they had, because it's a it's a mutually beneficial relationship,

804
00:34:21,840 --> 00:34:23,920
Speaker 2: and it'd have to be something that we're beating each

805
00:34:23,920 --> 00:34:25,160
Speaker 2: other other up up about.

806
00:34:25,719 --> 00:34:29,080
Speaker 1: Yeah, man, I had similar experiences. Let's talk about debt

807
00:34:29,080 --> 00:34:32,080
Speaker 1: and financing for a second chat. I mean rising interest rates.

808
00:34:32,080 --> 00:34:34,000
Speaker 1: Of course we've been talking about those over the past,

809
00:34:34,120 --> 00:34:37,239
Speaker 1: you know, eighteen months or whatever. But how have those

810
00:34:37,360 --> 00:34:40,239
Speaker 1: changed your advice to want to be real estate investors?

811
00:34:40,239 --> 00:34:44,080
Speaker 1: Have rising rates, maybe tamp down your enthusiasm for small

812
00:34:44,160 --> 00:34:45,240
Speaker 1: mighty real estate investing.

813
00:34:45,840 --> 00:34:48,360
Speaker 2: It's just changed the approach, just to change the technique

814
00:34:48,400 --> 00:34:50,400
Speaker 2: and the way I compare it. The last you know,

815
00:34:50,440 --> 00:34:52,760
Speaker 2: we're here in twenty twenty three when we do this interview,

816
00:34:53,040 --> 00:34:56,359
Speaker 2: you know, twenty eighteen through twenty twenty two, and even

817
00:34:56,400 --> 00:35:00,279
Speaker 2: before that, this has been an unusual time historically terms

818
00:35:00,280 --> 00:35:02,960
Speaker 2: of interest rates, in terms of real estate investing, where

819
00:35:03,000 --> 00:35:04,799
Speaker 2: you could actually go out and get a two or

820
00:35:04,800 --> 00:35:07,800
Speaker 2: three percent mortgage pay retail price almost for a house

821
00:35:08,000 --> 00:35:10,640
Speaker 2: and have it cash flow like that. I just want

822
00:35:10,680 --> 00:35:13,280
Speaker 2: to get put it in perspective like that is unusual,

823
00:35:13,600 --> 00:35:16,000
Speaker 2: that's not the normal thing. That's not just to say

824
00:35:16,040 --> 00:35:17,719
Speaker 2: that it wasn't good good for us, like great, you

825
00:35:17,760 --> 00:35:20,400
Speaker 2: got to take advantage. But the way we real estate investors,

826
00:35:20,440 --> 00:35:22,319
Speaker 2: we always have to pivot, we always have to change,

827
00:35:22,360 --> 00:35:25,279
Speaker 2: We always have to adapt to the market. And I'm

828
00:35:25,280 --> 00:35:28,000
Speaker 2: going to break the real estate investing into two pieces,

829
00:35:28,040 --> 00:35:30,040
Speaker 2: like one piece is not changed at all, I don't

830
00:35:30,040 --> 00:35:32,040
Speaker 2: care what the interest rates are. The fundamentals of those

831
00:35:32,080 --> 00:35:34,600
Speaker 2: good locations that we talked about earlier, the fundamentals of

832
00:35:34,640 --> 00:35:37,719
Speaker 2: finding good sentence, the fundamentals of maintenance, like those things

833
00:35:37,719 --> 00:35:39,840
Speaker 2: are the same. The challenge, the other piece that we

834
00:35:39,880 --> 00:35:42,280
Speaker 2: have to look at now is the cost of buying

835
00:35:42,280 --> 00:35:45,600
Speaker 2: a property with a traditional financing mortgage has gone from

836
00:35:45,760 --> 00:35:48,400
Speaker 2: three or four percent up to like seven percent. And

837
00:35:48,480 --> 00:35:51,280
Speaker 2: what that does is that makes the cost of using

838
00:35:51,320 --> 00:35:53,919
Speaker 2: debt much more expensive at least go into the bank

839
00:35:53,960 --> 00:35:56,480
Speaker 2: and using debt. So how do we solve that, Like, well,

840
00:35:56,800 --> 00:35:59,160
Speaker 2: one way is you can put more money down to

841
00:35:59,239 --> 00:36:02,160
Speaker 2: me because this because your cash flow is not working

842
00:36:02,200 --> 00:36:04,520
Speaker 2: as well with a small down payment. You might have

843
00:36:04,560 --> 00:36:06,279
Speaker 2: to figure out a way to either go in with

844
00:36:06,320 --> 00:36:08,440
Speaker 2: a partner or save up more money. Maybe you have

845
00:36:08,520 --> 00:36:10,880
Speaker 2: to slow down a little bit, buy fewer properties. And

846
00:36:11,080 --> 00:36:13,040
Speaker 2: you know, I've told people like, if you've already owned

847
00:36:13,040 --> 00:36:15,880
Speaker 2: a few properties, you and you have enough money to

848
00:36:15,960 --> 00:36:18,680
Speaker 2: even pay cash for a property, you know you're essentially

849
00:36:18,719 --> 00:36:21,680
Speaker 2: getting a seven percent return instead of paying the bank

850
00:36:21,760 --> 00:36:23,680
Speaker 2: seven percent. If you were in that kind of later

851
00:36:23,719 --> 00:36:25,360
Speaker 2: stage of your career where you're like, I don't know,

852
00:36:25,400 --> 00:36:27,279
Speaker 2: that I want to pay the three percent debt off,

853
00:36:27,320 --> 00:36:29,520
Speaker 2: but I could pay cash for a new property or

854
00:36:29,520 --> 00:36:32,160
Speaker 2: put fifty percent down or something that the cash flow

855
00:36:32,200 --> 00:36:34,080
Speaker 2: could work when you make a bigger down payment. And

856
00:36:34,120 --> 00:36:36,640
Speaker 2: I'm not saying like that's what everybody should do, but

857
00:36:36,719 --> 00:36:39,080
Speaker 2: like that's one that's option A, Like you could you

858
00:36:39,080 --> 00:36:41,240
Speaker 2: can make it cash flow by putting a larger down payment.

859
00:36:41,640 --> 00:36:44,799
Speaker 2: Option B is like getting creative with your financing. And

860
00:36:45,200 --> 00:36:46,799
Speaker 2: the way I explain this is like you can look

861
00:36:46,840 --> 00:36:49,280
Speaker 2: at your financing like a toolbox, and if you're building

862
00:36:49,280 --> 00:36:51,239
Speaker 2: a house, you'd have like five or six or ten

863
00:36:51,280 --> 00:36:53,440
Speaker 2: tools in your toolbox or more right, well, when you

864
00:36:53,520 --> 00:36:55,719
Speaker 2: when you're financing houses, you don't want to just have

865
00:36:55,800 --> 00:36:58,200
Speaker 2: one hammer, Like that's what traditional financing is. I've just

866
00:36:58,200 --> 00:36:59,640
Speaker 2: got a hammer. I'm just going to use a hammer

867
00:36:59,640 --> 00:37:01,759
Speaker 2: over and over again. Well no, like why wouldn't you

868
00:37:01,800 --> 00:37:03,759
Speaker 2: use like a screwdriver and as all and these other

869
00:37:03,880 --> 00:37:06,840
Speaker 2: tools and what those other tools are are thinking outside

870
00:37:06,880 --> 00:37:09,560
Speaker 2: the box, like talking to the seller and seeing if

871
00:37:09,600 --> 00:37:12,759
Speaker 2: the seller will finance the property for you. It's called

872
00:37:12,840 --> 00:37:15,400
Speaker 2: it's called seller financing. It's not common, it's not typical

873
00:37:15,440 --> 00:37:17,520
Speaker 2: when you go through a real estate agent that the

874
00:37:17,520 --> 00:37:18,920
Speaker 2: seller is just going to say, yes, I'd love to

875
00:37:18,960 --> 00:37:20,959
Speaker 2: finance the property to you. Like, no, it's a little

876
00:37:20,960 --> 00:37:23,279
Speaker 2: different approach. You might have to reach out directly to

877
00:37:23,320 --> 00:37:25,400
Speaker 2: the seller. You might have to look for landlords or

878
00:37:25,440 --> 00:37:28,440
Speaker 2: people who are more predisposed to finance properties to you.

879
00:37:28,520 --> 00:37:30,880
Speaker 2: Like the ideal person to finance a property is a

880
00:37:30,920 --> 00:37:33,479
Speaker 2: landlord who's owned a property for like fifteen, twenty thirty

881
00:37:33,560 --> 00:37:35,640
Speaker 2: years and they're kind of tired of the landlording business

882
00:37:35,800 --> 00:37:38,720
Speaker 2: and they're ready to exit, but they like that recurring income,

883
00:37:38,800 --> 00:37:41,279
Speaker 2: remember that monthly income, and they've getten used to that,

884
00:37:41,560 --> 00:37:44,879
Speaker 2: but they do it like, hey, I'm addicted as well,

885
00:37:44,880 --> 00:37:47,040
Speaker 2: Like I get it. But then they don't want to

886
00:37:47,040 --> 00:37:49,200
Speaker 2: manage the day to day affairs. Maybe they're getting up

887
00:37:49,239 --> 00:37:51,920
Speaker 2: in years and so them financing to you might be

888
00:37:51,960 --> 00:37:54,000
Speaker 2: the perfect solution for them, Like that's the way they

889
00:37:54,000 --> 00:37:56,880
Speaker 2: can exit the property. And so that's that's like another

890
00:37:56,960 --> 00:37:59,120
Speaker 2: that's one tool in your toolbox. You can also use

891
00:37:59,160 --> 00:38:02,160
Speaker 2: private money. The number one way I financed my deals

892
00:38:02,160 --> 00:38:05,360
Speaker 2: over the years is going to other investors and they

893
00:38:05,400 --> 00:38:08,200
Speaker 2: would have a like a self directed retirement account, or

894
00:38:08,239 --> 00:38:10,760
Speaker 2: they would set up a retirement account that had money

895
00:38:10,760 --> 00:38:13,120
Speaker 2: that they could actually loan to me as a real

896
00:38:13,200 --> 00:38:15,160
Speaker 2: estate investor. And that's not something a lot of people

897
00:38:15,200 --> 00:38:18,200
Speaker 2: know about. But if you have your own IRA that

898
00:38:18,280 --> 00:38:20,080
Speaker 2: you can choose where it's at, or if you have

899
00:38:20,080 --> 00:38:22,280
Speaker 2: a four oh one k at old employer, for example,

900
00:38:22,560 --> 00:38:25,279
Speaker 2: there's some flexibility on the custodians you can put that with.

901
00:38:25,640 --> 00:38:27,719
Speaker 2: And so my mast strategy for me was, I had

902
00:38:28,120 --> 00:38:31,279
Speaker 2: a profess old professor at Clemson University, and he had

903
00:38:31,320 --> 00:38:33,040
Speaker 2: a lot of money in a retirement account and he

904
00:38:33,040 --> 00:38:34,879
Speaker 2: has some of it in the stock market. But I taught

905
00:38:34,960 --> 00:38:36,920
Speaker 2: him how, hey, you could loan me that one hundred

906
00:38:36,920 --> 00:38:39,680
Speaker 2: thousand bucks and I can pay you seven percent interests

907
00:38:39,760 --> 00:38:41,839
Speaker 2: or ten percent interests or six whatever the interest rate

908
00:38:41,800 --> 00:38:45,640
Speaker 2: you negotiate. And so you can show other people how

909
00:38:46,040 --> 00:38:48,360
Speaker 2: they could be your bank basically be your private bank.

910
00:38:48,760 --> 00:38:51,160
Speaker 2: Or you can meet other investors at local meetups or

911
00:38:51,239 --> 00:38:52,680
Speaker 2: who would like to do that they like to get

912
00:38:52,719 --> 00:38:55,000
Speaker 2: interest and so those are just a couple of examples.

913
00:38:55,000 --> 00:38:57,320
Speaker 2: But the point is, like, if you think outside the box,

914
00:38:57,360 --> 00:38:59,080
Speaker 2: this is what real estate investors have had to do

915
00:38:59,120 --> 00:39:01,239
Speaker 2: for decades. You're gonna have to hustle a little bit.

916
00:39:01,320 --> 00:39:03,120
Speaker 2: You can have to think outside the box a little

917
00:39:03,120 --> 00:39:05,040
Speaker 2: bit and learn a few different techniques to make it work.

918
00:39:05,160 --> 00:39:07,680
Speaker 3: Yeah, again, it comes back to how willing are you

919
00:39:07,760 --> 00:39:10,280
Speaker 3: to do the things that other folks aren't necessarily willing

920
00:39:10,320 --> 00:39:11,960
Speaker 3: to do. How you got to be willing to do

921
00:39:12,320 --> 00:39:16,359
Speaker 3: things slightly unconventionally in order to get the deal.

922
00:39:16,760 --> 00:39:18,879
Speaker 1: We want to talk about de leveraging as well. That's

923
00:39:19,000 --> 00:39:22,280
Speaker 1: kind of part of shoring up your real estate portfolio.

924
00:39:22,360 --> 00:39:23,759
Speaker 1: We'll talk about that and then just kind of like

925
00:39:23,800 --> 00:39:26,600
Speaker 1: how to get started maybe as well. We'll get to

926
00:39:26,719 --> 00:39:28,560
Speaker 1: a couple more questions with Chad right after this.

927
00:39:38,239 --> 00:39:40,800
Speaker 3: All right, we are back for the break, talking still

928
00:39:40,840 --> 00:39:43,960
Speaker 3: with Chad Carson about how you can be a small

929
00:39:44,200 --> 00:39:47,680
Speaker 3: and mighty real estate investor and schedule He kind of

930
00:39:47,760 --> 00:39:49,600
Speaker 3: hinted at alluded to this right before the break, But

931
00:39:50,040 --> 00:39:54,040
Speaker 3: de leveraging, when and how should folks out there pay

932
00:39:54,160 --> 00:39:57,200
Speaker 3: down debt on a rental property, because, like you said

933
00:39:57,200 --> 00:39:59,600
Speaker 3: earlier as well, this is it kind of goes against

934
00:39:59,719 --> 00:40:03,359
Speaker 3: the tr traditional advice, the traditional approach of most real

935
00:40:03,440 --> 00:40:05,640
Speaker 3: estate investors. You want to hang on to that leverage

936
00:40:05,680 --> 00:40:08,319
Speaker 3: as long as possible, but you've actually you have done

937
00:40:08,320 --> 00:40:10,720
Speaker 3: that before you pay down debt, but you've also sold properties.

938
00:40:10,760 --> 00:40:13,360
Speaker 3: Can you talk about when and why you would do that?

939
00:40:13,800 --> 00:40:16,000
Speaker 2: Yeah, I think about your real estate investing as a

940
00:40:16,120 --> 00:40:19,320
Speaker 2: journey essentially, So I think I mentioned the mountain metaphor,

941
00:40:19,440 --> 00:40:21,120
Speaker 2: like when you first start as a new investor, you

942
00:40:21,239 --> 00:40:23,319
Speaker 2: sort at the bottom of the mountain, and you're going

943
00:40:23,360 --> 00:40:25,840
Speaker 2: to use certain techniques and strategies when you're new, like

944
00:40:25,960 --> 00:40:27,600
Speaker 2: you probably don't have a lot of capital. You need

945
00:40:27,640 --> 00:40:29,640
Speaker 2: more money, and so you just try to you try

946
00:40:29,640 --> 00:40:31,480
Speaker 2: to use as much debt as you can early on,

947
00:40:31,560 --> 00:40:33,720
Speaker 2: Like if you did a house sack, but five percent

948
00:40:33,800 --> 00:40:37,000
Speaker 2: down on a property like awesome, that's what you should

949
00:40:37,040 --> 00:40:39,040
Speaker 2: do early on because you just got to get your

950
00:40:39,080 --> 00:40:41,360
Speaker 2: foot in the game. But that's that's the approach of

951
00:40:41,400 --> 00:40:43,480
Speaker 2: a starter And then you move out of the starter

952
00:40:43,520 --> 00:40:45,760
Speaker 2: phase into what I call like the wealth builder phase.

953
00:40:46,160 --> 00:40:48,480
Speaker 2: And your whole goal is a wealth builder is turning

954
00:40:48,600 --> 00:40:51,239
Speaker 2: whatever capital, whatever money, whatever wealth you have. Let's say

955
00:40:51,239 --> 00:40:53,200
Speaker 2: you have one hundred thousand bucks, turn that one hundred

956
00:40:53,200 --> 00:40:56,120
Speaker 2: thousand bucks into a million bucks. Like your goal is

957
00:40:56,120 --> 00:40:58,320
Speaker 2: to grow, grow, grow, grow, grow, and you want to

958
00:40:58,360 --> 00:40:59,920
Speaker 2: do it safely, right, You want to get up that

959
00:41:00,040 --> 00:41:02,239
Speaker 2: out and using leverage makes a lot of sense in

960
00:41:02,280 --> 00:41:04,880
Speaker 2: that case as well, So you might you might reinvest

961
00:41:04,920 --> 00:41:07,399
Speaker 2: all the cash you make from your rental, like don't

962
00:41:07,440 --> 00:41:09,680
Speaker 2: touch that money, put it back into buying the next

963
00:41:09,719 --> 00:41:12,120
Speaker 2: rental property and the next rental property. So that's like

964
00:41:12,160 --> 00:41:14,399
Speaker 2: those are the two first two stages. But I feel

965
00:41:14,400 --> 00:41:17,520
Speaker 2: like most real estate investors get stuck in phase number two.

966
00:41:17,719 --> 00:41:20,160
Speaker 2: Like all the techniques are talking about just grow, grow, grow,

967
00:41:20,239 --> 00:41:22,080
Speaker 2: grow grow, It's like, well, do you just grow forever?

968
00:41:22,200 --> 00:41:24,320
Speaker 2: Or like do you get into this perpetual debt religion

969
00:41:24,320 --> 00:41:27,120
Speaker 2: and like never pay debt off? Like what happens and

970
00:41:27,200 --> 00:41:29,880
Speaker 2: what most people assume going back to, like the typical

971
00:41:29,920 --> 00:41:32,520
Speaker 2: model is you just buy more properties, buy more properties,

972
00:41:32,520 --> 00:41:35,239
Speaker 2: buy more properties. And what I advocate is like, when

973
00:41:35,239 --> 00:41:37,719
Speaker 2: you finally get to this point where you have you

974
00:41:37,719 --> 00:41:39,440
Speaker 2: can measure your wealth and say, let's just say you

975
00:41:39,440 --> 00:41:42,840
Speaker 2: had a million dollars, then why not start taking some

976
00:41:42,880 --> 00:41:45,360
Speaker 2: of those chips off the table by plowing back some

977
00:41:45,440 --> 00:41:47,640
Speaker 2: of the profits you have, either the cash flow from

978
00:41:47,640 --> 00:41:49,680
Speaker 2: your rentals or you could even like let's say you

979
00:41:49,800 --> 00:41:53,279
Speaker 2: bought thirteen properties and you only needed ten, Like why

980
00:41:53,320 --> 00:41:56,080
Speaker 2: not sell a couple of your properties? Pay taxes on

981
00:41:56,120 --> 00:41:58,440
Speaker 2: what you sold the property for and then plow that

982
00:41:58,480 --> 00:42:01,480
Speaker 2: money back into pay off the debt on a couple

983
00:42:01,480 --> 00:42:03,759
Speaker 2: of properties. Now, stick with me if you've never heard

984
00:42:03,760 --> 00:42:06,239
Speaker 2: somebody say you should do this, Like my business partner

985
00:42:06,280 --> 00:42:09,239
Speaker 2: and I sort of stumbled into this, but we were

986
00:42:09,320 --> 00:42:11,319
Speaker 2: lucky enough to have like one hundred thousand bucks in

987
00:42:11,360 --> 00:42:13,479
Speaker 2: our bank account or like, I've never had this happen before.

988
00:42:13,520 --> 00:42:16,239
Speaker 2: This is amazing. Where did this money come from? It

989
00:42:16,280 --> 00:42:18,440
Speaker 2: was because we had been saving our cash flow. We

990
00:42:18,480 --> 00:42:20,799
Speaker 2: sold a property and this money was sitting there, and

991
00:42:20,800 --> 00:42:22,640
Speaker 2: we looked at one of our debts. It was an

992
00:42:22,640 --> 00:42:24,760
Speaker 2: older debt that we've been paying for like ten years.

993
00:42:25,000 --> 00:42:27,840
Speaker 2: It was one thousand dollars per month, and the property

994
00:42:27,880 --> 00:42:29,880
Speaker 2: had appreciated to like two hundred and fifty three hundred

995
00:42:29,880 --> 00:42:31,560
Speaker 2: thousand bucks, and so we had a lot of equity

996
00:42:31,560 --> 00:42:34,200
Speaker 2: in the property. But we looked at that payment. We're like,

997
00:42:34,280 --> 00:42:36,080
Speaker 2: we could spend one hundred thousand bucks and go buy

998
00:42:36,320 --> 00:42:39,479
Speaker 2: four more rental properties and keep growing, or we could

999
00:42:39,480 --> 00:42:42,400
Speaker 2: pay off this debt and free up one thousand dollars

1000
00:42:42,440 --> 00:42:45,360
Speaker 2: per month. One thousand dollars per month is twelve thousand

1001
00:42:45,400 --> 00:42:47,879
Speaker 2: dollars per year, and what would we do there, we'd

1002
00:42:47,880 --> 00:42:49,920
Speaker 2: have twelve thousand dollars per year in cash flow, and

1003
00:42:49,920 --> 00:42:51,520
Speaker 2: that's like you could think about that. It's like like

1004
00:42:51,520 --> 00:42:54,360
Speaker 2: a twelve percent cash on cash return. We would not

1005
00:42:54,480 --> 00:42:56,080
Speaker 2: have to grow anymore, so we wouldn't have any more

1006
00:42:56,120 --> 00:42:59,120
Speaker 2: properties with more tenants and more headaches and more heating

1007
00:42:59,160 --> 00:43:02,040
Speaker 2: and air units, and we would simplify our life. We'd

1008
00:43:02,040 --> 00:43:04,520
Speaker 2: increase our cash flow, and we'd also decrease our risk.

1009
00:43:04,640 --> 00:43:06,800
Speaker 2: Because having debt is great, it is a great tool

1010
00:43:07,600 --> 00:43:09,520
Speaker 2: for growing. But if things go badly, if you get

1011
00:43:09,520 --> 00:43:11,880
Speaker 2: in a big recession, if you have a great, you know,

1012
00:43:11,960 --> 00:43:15,239
Speaker 2: depression like we had the nineteen thirties, having debt could

1013
00:43:15,280 --> 00:43:17,560
Speaker 2: really put you upside down. Like you could owe, you

1014
00:43:17,600 --> 00:43:19,520
Speaker 2: could owe less, you could owe more than what the

1015
00:43:19,520 --> 00:43:21,680
Speaker 2: property is worth. The rents could go down. I mean,

1016
00:43:21,719 --> 00:43:23,160
Speaker 2: that doesn't happen. Its probably not going to happen, Like

1017
00:43:23,160 --> 00:43:24,879
Speaker 2: I don't think it's going to happen. But just when

1018
00:43:24,920 --> 00:43:27,000
Speaker 2: you start getting towards the top of the mountain, when

1019
00:43:27,040 --> 00:43:29,760
Speaker 2: you're climbing, it makes more sense to like thinking about

1020
00:43:29,800 --> 00:43:33,319
Speaker 2: not just growing, also thinking about income, also thinking about simplicity.

1021
00:43:33,480 --> 00:43:36,000
Speaker 2: So I feel like that's the stage where it makes

1022
00:43:36,000 --> 00:43:38,040
Speaker 2: sense to start paying off debt now, whether you pay

1023
00:43:38,040 --> 00:43:39,719
Speaker 2: off one hundred percent of your debt or you pay

1024
00:43:39,760 --> 00:43:41,840
Speaker 2: off like a few properties. You know, we've kind of

1025
00:43:41,840 --> 00:43:43,319
Speaker 2: gone through that over the year. We still have some

1026
00:43:43,400 --> 00:43:46,200
Speaker 2: debt on our portfolio, but instead of having like sixty

1027
00:43:46,280 --> 00:43:49,279
Speaker 2: seventy percent of our value of our portfolio and debt,

1028
00:43:49,280 --> 00:43:52,400
Speaker 2: we have more like fifteen percent or twenty percent right now,

1029
00:43:52,719 --> 00:43:54,879
Speaker 2: and eventually we'll be at zero percent. But like we're

1030
00:43:54,920 --> 00:43:56,839
Speaker 2: we're feeling pretty good about where we are right now.

1031
00:43:57,440 --> 00:44:00,239
Speaker 1: Yeah, you're sitting pretty And even if let's say that

1032
00:44:00,239 --> 00:44:02,640
Speaker 1: there were some predictions of like another two thousand and

1033
00:44:02,800 --> 00:44:06,000
Speaker 1: eight sort of housing recession, I don't see that on

1034
00:44:06,000 --> 00:44:08,960
Speaker 1: the horizon. But if housing prices dip like and you're

1035
00:44:09,000 --> 00:44:12,319
Speaker 1: over leveraged and your tenant isn't paying or whatever, like,

1036
00:44:12,680 --> 00:44:15,120
Speaker 1: that puts you in a bind. And you're not in

1037
00:44:15,160 --> 00:44:18,040
Speaker 1: that bind, right Even if you your tenant or multiple

1038
00:44:18,040 --> 00:44:21,360
Speaker 1: tenants don't pay, you're still fine. And so there's like

1039
00:44:21,400 --> 00:44:25,399
Speaker 1: a mental ease that that creates. I think, what would

1040
00:44:25,400 --> 00:44:27,279
Speaker 1: you say, Chad to the folks maybe who've made it

1041
00:44:27,280 --> 00:44:30,440
Speaker 1: this far into the conversation, they're maybe fascinated by the

1042
00:44:30,440 --> 00:44:33,680
Speaker 1: wealth building possibilities of real estate, but they're also hesitant

1043
00:44:33,719 --> 00:44:38,080
Speaker 1: to get going because it seems risky. It sounds risky,

1044
00:44:38,200 --> 00:44:40,520
Speaker 1: like I don't know, maybe I should just keep tossing

1045
00:44:40,560 --> 00:44:42,480
Speaker 1: money into my four one K. And again, we talk

1046
00:44:42,520 --> 00:44:44,719
Speaker 1: about that all the time. We're totally down get the match, Like,

1047
00:44:44,760 --> 00:44:47,719
Speaker 1: don't forsake that real estate investing should be after you've

1048
00:44:47,719 --> 00:44:49,320
Speaker 1: done that at least. But what would you say to

1049
00:44:49,320 --> 00:44:51,239
Speaker 1: somebody who's like, I don't think that's for me, But

1050
00:44:51,280 --> 00:44:53,279
Speaker 1: it's not necessarily because I don't have the time or

1051
00:44:53,320 --> 00:44:56,200
Speaker 1: don't have the desire. It's just it it sounds like

1052
00:44:56,239 --> 00:44:56,839
Speaker 1: it's too much.

1053
00:44:57,120 --> 00:44:58,880
Speaker 2: Yeah, I would say, just take it one step at

1054
00:44:58,920 --> 00:45:00,920
Speaker 2: a time. You don't have you don't have to make

1055
00:45:00,920 --> 00:45:03,799
Speaker 2: a forever decision with real estate investing. You can test

1056
00:45:03,840 --> 00:45:06,160
Speaker 2: it out. You can buy one property and that might

1057
00:45:06,160 --> 00:45:08,319
Speaker 2: be enough. Like you might just buy one property, take

1058
00:45:08,360 --> 00:45:10,520
Speaker 2: a break for a year or two, let it season,

1059
00:45:10,640 --> 00:45:12,200
Speaker 2: take a deep breath, see if that was a good

1060
00:45:12,200 --> 00:45:14,439
Speaker 2: decision or not, and then you can do another one

1061
00:45:14,719 --> 00:45:17,239
Speaker 2: after that. And I actually have a mentor named John

1062
00:45:17,320 --> 00:45:19,799
Speaker 2: Shab who's a guy I've followed for a long time.

1063
00:45:19,840 --> 00:45:22,120
Speaker 2: He's been investing in real estate for fifty years. He

1064
00:45:22,160 --> 00:45:24,720
Speaker 2: wrote his book that I always loved, just called building

1065
00:45:24,760 --> 00:45:28,200
Speaker 2: Wealth one house at a time, just one house. He

1066
00:45:28,239 --> 00:45:30,879
Speaker 2: just recommends buying one house a year, one property a year.

1067
00:45:31,280 --> 00:45:33,560
Speaker 2: And if you do that, like if you just continue buying,

1068
00:45:33,640 --> 00:45:36,240
Speaker 2: just like the tortoise, not the hair, just plotting along,

1069
00:45:36,480 --> 00:45:39,520
Speaker 2: plotting along. It seems pretty small in the beginning. It

1070
00:45:39,520 --> 00:45:41,879
Speaker 2: seems like you're not making much progress. But that can

1071
00:45:41,880 --> 00:45:46,080
Speaker 2: build an enormous momentum. But it also if you you

1072
00:45:46,120 --> 00:45:47,680
Speaker 2: think it's a mistake, if you get into the game.

1073
00:45:48,080 --> 00:45:50,160
Speaker 2: I bought a property or two, this is not for me.

1074
00:45:50,880 --> 00:45:52,640
Speaker 2: You can sell the properties or you can get out

1075
00:45:52,640 --> 00:45:54,799
Speaker 2: of them. It's not gonna happen overnight. Real estate isnt

1076
00:45:54,840 --> 00:45:56,799
Speaker 2: as easy to sell as a piece of stock. But

1077
00:45:56,880 --> 00:45:59,800
Speaker 2: if you buy it correctly and you don't overstretch yourself,

1078
00:46:00,080 --> 00:46:02,279
Speaker 2: you're careful with it, it's not going to be a

1079
00:46:02,320 --> 00:46:06,800
Speaker 2: disastrous decision. Like going slowly thinking about it, being deliberate

1080
00:46:07,000 --> 00:46:09,839
Speaker 2: allows you to kind of get your feet back under

1081
00:46:09,880 --> 00:46:12,839
Speaker 2: you again, and you can pivot, you can change. But

1082
00:46:13,200 --> 00:46:15,080
Speaker 2: I have a hunch, like if you thought you had it,

1083
00:46:15,120 --> 00:46:16,719
Speaker 2: if you kind of liked real estate and you got

1084
00:46:16,719 --> 00:46:18,920
Speaker 2: into it, you might you might just get addicted to

1085
00:46:18,960 --> 00:46:21,720
Speaker 2: it like I have, like Joel and Matt has, because

1086
00:46:22,000 --> 00:46:24,080
Speaker 2: it's got a lot of good stuff to it as well.

1087
00:46:24,160 --> 00:46:26,400
Speaker 2: And some of the negative stuff you hear up front

1088
00:46:26,719 --> 00:46:29,200
Speaker 2: is it talks people out of real estate. But real

1089
00:46:29,280 --> 00:46:31,880
Speaker 2: estate of the long run can have so many benefits

1090
00:46:31,920 --> 00:46:34,080
Speaker 2: and I'm experiencing those now. And one of the reasons

1091
00:46:34,120 --> 00:46:36,200
Speaker 2: I get out on podcasts and appreciate you guys having

1092
00:46:36,239 --> 00:46:38,200
Speaker 2: me is because I like to talk about it. I

1093
00:46:38,239 --> 00:46:40,040
Speaker 2: like to talk about the good sides of it and

1094
00:46:40,080 --> 00:46:43,000
Speaker 2: how if you get through the tough stuff up front,

1095
00:46:43,320 --> 00:46:45,680
Speaker 2: the other side of that can be an amazing change

1096
00:46:45,680 --> 00:46:47,759
Speaker 2: in your life. It gives you freedom, it gives you flexibility,

1097
00:46:47,800 --> 00:46:50,000
Speaker 2: and I have experienced that myself.

1098
00:46:50,480 --> 00:46:51,919
Speaker 1: It takes a while. There's like a lot of stuff

1099
00:46:51,920 --> 00:46:53,360
Speaker 1: you need to learn when you're thinking about becoming a

1100
00:46:53,360 --> 00:46:55,319
Speaker 1: real estate investor. One thing, Matt and I we've done

1101
00:46:55,360 --> 00:46:57,879
Speaker 1: a whole episode on screening tenants properly, because we think

1102
00:46:57,880 --> 00:47:01,239
Speaker 1: that is like ninety percent of the issues that you're

1103
00:47:01,239 --> 00:47:03,840
Speaker 1: gonna face are not having screened at tenant thoroughly, and

1104
00:47:03,880 --> 00:47:05,799
Speaker 1: so if you do that, you're way ahead of the

1105
00:47:05,800 --> 00:47:08,280
Speaker 1: ball game. You're gonna deal with far fewer the issues

1106
00:47:08,280 --> 00:47:11,759
Speaker 1: that a lot of other landlords have to endure. But

1107
00:47:11,840 --> 00:47:13,480
Speaker 1: I love what you said too. One house at a time,

1108
00:47:13,520 --> 00:47:15,719
Speaker 1: that's a great strategy. Makes me think of like an

1109
00:47:15,800 --> 00:47:17,880
Speaker 1: athlete post games and I'm just taking one game at

1110
00:47:17,880 --> 00:47:20,160
Speaker 1: a time, and sometimes I just you know, Chad, you

1111
00:47:20,160 --> 00:47:23,600
Speaker 1: know this. You probably gave those interviews a football game, right, Yes,

1112
00:47:24,320 --> 00:47:26,399
Speaker 1: you have to say that. But the truth is when

1113
00:47:26,480 --> 00:47:28,160
Speaker 1: you take it one house at a time, one game

1114
00:47:28,160 --> 00:47:31,359
Speaker 1: at a time, when your focus is just on the

1115
00:47:31,400 --> 00:47:34,080
Speaker 1: next step, you're much more likely to be successful than

1116
00:47:34,160 --> 00:47:37,960
Speaker 1: thinking about this bigger, overarching goal you're looking to achieve

1117
00:47:38,000 --> 00:47:39,839
Speaker 1: over time. It's like you got to take it one

1118
00:47:39,840 --> 00:47:41,319
Speaker 1: play at a time, one game at a time, one

1119
00:47:41,320 --> 00:47:43,480
Speaker 1: house at a time. That's how you're going to be successful.

1120
00:47:43,600 --> 00:47:45,719
Speaker 2: Yeah, you open up the sports metaphors, so I'm gonna

1121
00:47:45,719 --> 00:47:48,600
Speaker 2: go there as well. Quill bring it so. Like one

1122
00:47:48,640 --> 00:47:51,239
Speaker 2: of my favorite coaches in sports is a guy named

1123
00:47:51,280 --> 00:47:54,200
Speaker 2: John Wooden. He was a basketball coach at UCLA and

1124
00:47:54,280 --> 00:47:55,960
Speaker 2: he used to bring his als like he had the

1125
00:47:55,960 --> 00:47:58,000
Speaker 2: best players in the country. He had like Bill Walton,

1126
00:47:58,000 --> 00:48:00,319
Speaker 2: who's a Hall of Famer. He had cream abdulgent are

1127
00:48:00,520 --> 00:48:03,000
Speaker 2: and he would bring these players in before the season started,

1128
00:48:03,160 --> 00:48:05,040
Speaker 2: and he would spend a whole day, like or two

1129
00:48:05,080 --> 00:48:08,680
Speaker 2: hours sitting in a room practicing, putting on their socks

1130
00:48:09,080 --> 00:48:12,560
Speaker 2: and tying their shoes literally like they would have them

1131
00:48:12,560 --> 00:48:14,720
Speaker 2: tying the shoes, and so you just imagine this all

1132
00:48:14,760 --> 00:48:17,239
Speaker 2: that all American. How frustrating would it be? Like why

1133
00:48:17,239 --> 00:48:19,480
Speaker 2: am I doing this? Coach? Like I put my shoes

1134
00:48:19,520 --> 00:48:21,320
Speaker 2: on like ten times, like what is this? And he

1135
00:48:21,360 --> 00:48:23,160
Speaker 2: would get them frustrated, and he would say, you know

1136
00:48:23,160 --> 00:48:26,120
Speaker 2: why we're doing this is because if this is something

1137
00:48:26,120 --> 00:48:28,080
Speaker 2: we can control, this is a part of the process

1138
00:48:28,120 --> 00:48:30,200
Speaker 2: of being a good basketball player. So tiny little piece,

1139
00:48:30,280 --> 00:48:32,279
Speaker 2: tiny little step. But if you if you don't, if

1140
00:48:32,280 --> 00:48:33,520
Speaker 2: you have a wrinkle in your sock, or if you

1141
00:48:33,600 --> 00:48:35,640
Speaker 2: tie your shoe wrong, you're probably gonna get a blister.

1142
00:48:35,760 --> 00:48:37,719
Speaker 2: If you get a blister, you're gonna miss practice. If

1143
00:48:37,719 --> 00:48:39,520
Speaker 2: you miss practice, we're not gonna play well in the game.

1144
00:48:39,560 --> 00:48:41,120
Speaker 2: If we don't play well in the game, we're not

1145
00:48:41,120 --> 00:48:42,759
Speaker 2: gonna win a championship. But we're not gonna do all

1146
00:48:42,760 --> 00:48:44,879
Speaker 2: those things that you want to do and real estate

1147
00:48:44,880 --> 00:48:47,640
Speaker 2: best things. The same way that the little tiny baby

1148
00:48:47,640 --> 00:48:50,280
Speaker 2: steps are what matters. So tenant screening. I'm one hundred

1149
00:48:50,280 --> 00:48:52,320
Speaker 2: percent on board, Like, if you're going to own properties,

1150
00:48:52,520 --> 00:48:54,640
Speaker 2: you've got to learn how to screen your tenants. You

1151
00:48:54,640 --> 00:48:56,239
Speaker 2: got to learn how to have an application, You got

1152
00:48:56,239 --> 00:48:58,600
Speaker 2: to learn how to have those conversations. Like the little

1153
00:48:58,640 --> 00:49:01,959
Speaker 2: tiny seemed like tiny steps, they matter a lot, And

1154
00:49:01,960 --> 00:49:04,799
Speaker 2: in real estate, the part of the upfront cost of

1155
00:49:04,840 --> 00:49:07,880
Speaker 2: real estate is learning what matters and what doesn't and

1156
00:49:07,920 --> 00:49:10,640
Speaker 2: what you know. Location matters. I mentioned that earlier screening

1157
00:49:10,680 --> 00:49:13,080
Speaker 2: tens matters, and there's a bunch of other stuff in

1158
00:49:13,120 --> 00:49:14,680
Speaker 2: that matters that matter too. But like if you get

1159
00:49:14,800 --> 00:49:17,200
Speaker 2: the financing matters. So if you if you figure out

1160
00:49:17,239 --> 00:49:19,080
Speaker 2: like a three, four or five things that really matter

1161
00:49:19,160 --> 00:49:21,319
Speaker 2: the most, and you put your socks on, you put

1162
00:49:21,320 --> 00:49:23,040
Speaker 2: your you tie your shoes as well, and you do

1163
00:49:23,120 --> 00:49:26,240
Speaker 2: it consistently, one deal at a time, the end result

1164
00:49:26,280 --> 00:49:28,360
Speaker 2: of that is a equivalent of a championship, Like you

1165
00:49:28,440 --> 00:49:31,080
Speaker 2: will do better and you'll you'll be kind of surprised

1166
00:49:31,080 --> 00:49:33,839
Speaker 2: by it, like you that's the big athletes. I've seen

1167
00:49:33,880 --> 00:49:36,719
Speaker 2: athletes who are putting for like the winning the British Open,

1168
00:49:36,920 --> 00:49:38,800
Speaker 2: and they're kind of surprised by like, well, wait a minute,

1169
00:49:38,800 --> 00:49:41,160
Speaker 2: Like I just won the British Open is because because

1170
00:49:41,160 --> 00:49:42,920
Speaker 2: they were like paying attention to they're putt they're paying

1171
00:49:42,960 --> 00:49:45,359
Speaker 2: attention to the process. That's that's what an athlete does,

1172
00:49:45,360 --> 00:49:47,160
Speaker 2: That's what a real estate investor does as well.

1173
00:49:47,480 --> 00:49:49,840
Speaker 3: Yeah, it almost surprises you that you've done well, but

1174
00:49:50,160 --> 00:49:52,480
Speaker 3: this is no surprise actually because you've taken all the

1175
00:49:52,520 --> 00:49:54,440
Speaker 3: right steps all along the way. It's why we love

1176
00:49:54,480 --> 00:49:57,200
Speaker 3: your approach, Chad. Where is it that folks out there

1177
00:49:57,239 --> 00:49:59,360
Speaker 3: can can find your new book and how can folks

1178
00:49:59,440 --> 00:50:01,399
Speaker 3: learn more about what it is that you've got going on.

1179
00:50:01,520 --> 00:50:03,279
Speaker 2: Yeah, well, thank you again for having me, guys. And

1180
00:50:03,480 --> 00:50:05,719
Speaker 2: the book is out on Bigger Pockets. That's my publisher.

1181
00:50:05,760 --> 00:50:08,480
Speaker 2: That's a big publishing website and real estate investing website.

1182
00:50:08,480 --> 00:50:10,359
Speaker 2: But I know we'll have links in the show notes

1183
00:50:10,400 --> 00:50:12,200
Speaker 2: in different places, but if you go to Bigger Pockets

1184
00:50:12,239 --> 00:50:16,200
Speaker 2: dot com, forward Slash, Small and Mighty, that is where

1185
00:50:16,239 --> 00:50:18,680
Speaker 2: you can get it. It'll also be available the twenty

1186
00:50:18,680 --> 00:50:21,480
Speaker 2: second of August on Amazon on Audible, so anywhere else

1187
00:50:21,520 --> 00:50:23,879
Speaker 2: you get your books, Bigger Pockets is pretty cool place

1188
00:50:23,880 --> 00:50:26,200
Speaker 2: to get it because I have actually wrote some extra bonuses,

1189
00:50:26,200 --> 00:50:28,399
Speaker 2: like I wrote a bonus chapter about being a small

1190
00:50:28,400 --> 00:50:31,480
Speaker 2: and mighty investor in a changing economy, talking about these

1191
00:50:31,560 --> 00:50:34,000
Speaker 2: rising interest rates and different the way things are changing.

1192
00:50:34,000 --> 00:50:35,759
Speaker 2: How do you adjust? So something of what we talked

1193
00:50:35,800 --> 00:50:38,160
Speaker 2: about today. Wherever you get the book, I would love it.

1194
00:50:38,160 --> 00:50:40,239
Speaker 2: I'd love to hear from you once you buy the

1195
00:50:40,239 --> 00:50:42,239
Speaker 2: book and read it. You know, I'm all over the

1196
00:50:42,280 --> 00:50:45,440
Speaker 2: place online. If you just search for Coach Carson on Instagram,

1197
00:50:45,560 --> 00:50:48,439
Speaker 2: on other places, on my podcast, like I'm out there.

1198
00:50:48,719 --> 00:50:50,799
Speaker 2: Just search for Coach Carson and let me know that

1199
00:50:50,840 --> 00:50:53,319
Speaker 2: you liked it. Let me know that any feedback you have,

1200
00:50:53,360 --> 00:50:55,560
Speaker 2: because I love that's. I wrote this book as a

1201
00:50:55,600 --> 00:50:57,960
Speaker 2: passion project, Like this was an itch I had in

1202
00:50:58,000 --> 00:51:01,000
Speaker 2: my head, and I want to see tons and tons

1203
00:51:01,000 --> 00:51:04,240
Speaker 2: of people buy there that one property, that two properties

1204
00:51:04,280 --> 00:51:06,920
Speaker 2: and have success with it. And my reward for that

1205
00:51:07,040 --> 00:51:08,360
Speaker 2: is like getting to hear your stories.

1206
00:51:08,760 --> 00:51:11,320
Speaker 1: Yeah, that's great. Also, well, I'm imagining a lot of

1207
00:51:11,360 --> 00:51:13,880
Speaker 1: how the money listeners are very interested in that given

1208
00:51:13,960 --> 00:51:15,959
Speaker 1: kind of the well we've talked about with real estate

1209
00:51:16,000 --> 00:51:18,560
Speaker 1: over the years, and this book really is the one

1210
00:51:19,160 --> 00:51:21,960
Speaker 1: to get for sure in our minds, if you're looking

1211
00:51:21,960 --> 00:51:23,720
Speaker 1: to get into real estate, or if you're just curious.

1212
00:51:23,760 --> 00:51:26,400
Speaker 1: So Chad thanks again so much for joining us today

1213
00:51:26,440 --> 00:51:27,759
Speaker 1: on The show Man. We really appreciate it.

1214
00:51:27,800 --> 00:51:29,960
Speaker 2: My pleasure has been a lot of fun. Thank you guys.

1215
00:51:30,400 --> 00:51:32,600
Speaker 3: All Right, man, it's always a good day if we

1216
00:51:32,600 --> 00:51:35,000
Speaker 3: can sit down and talk with our bud Chad Carson.

1217
00:51:35,080 --> 00:51:37,720
Speaker 1: Almost makes it feel not like work, because it really doesn't.

1218
00:51:37,760 --> 00:51:39,920
Speaker 3: Yeah, dude, we're so fortunate to be able to do

1219
00:51:39,920 --> 00:51:41,920
Speaker 3: what it is we do, like literally to be drinking

1220
00:51:41,920 --> 00:51:44,320
Speaker 3: craft beer, talking about money, talking about real estate, talking

1221
00:51:44,320 --> 00:51:47,080
Speaker 3: with friends as well. Yeah, we've got a good made

1222
00:51:47,080 --> 00:51:49,160
Speaker 3: in the shade, but incredibly fortunate for what it is

1223
00:51:49,160 --> 00:51:51,040
Speaker 3: that we do here at how to money, but specifically

1224
00:51:51,080 --> 00:51:54,600
Speaker 3: to real estate, the Small and Mighty real Estate investor.

1225
00:51:54,760 --> 00:51:56,560
Speaker 3: What is it today that stood out to you? What

1226
00:51:56,600 --> 00:51:57,280
Speaker 3: was your big takeaway?

1227
00:51:57,360 --> 00:52:00,319
Speaker 1: Yeah? So I love kind of the beginning of the

1228
00:52:00,360 --> 00:52:02,520
Speaker 1: episode where we're talking about how to work backwards from

1229
00:52:02,560 --> 00:52:05,000
Speaker 1: the life you want, and that's so powerful because if

1230
00:52:05,040 --> 00:52:07,959
Speaker 1: you don't know that, you might be tempted to overindulge,

1231
00:52:08,040 --> 00:52:11,200
Speaker 1: to go so hard and then look up after that

1232
00:52:11,280 --> 00:52:14,839
Speaker 1: note to the Grindstone real estate portfolio building escapade you've

1233
00:52:14,840 --> 00:52:17,560
Speaker 1: been on and be like, huh, why why did I

1234
00:52:17,560 --> 00:52:20,040
Speaker 1: do that? Because now I'm so locked in. I'm working

1235
00:52:20,120 --> 00:52:22,840
Speaker 1: way more than I want to. And yeah, granted I

1236
00:52:22,880 --> 00:52:25,640
Speaker 1: have this awesome real estate portfolio to show for it,

1237
00:52:25,960 --> 00:52:28,080
Speaker 1: but I've missed out on a lot of the important

1238
00:52:28,080 --> 00:52:31,200
Speaker 1: things along the way. And so I think, Chad, we

1239
00:52:31,400 --> 00:52:34,200
Speaker 1: just jive so much on all those levels when it

1240
00:52:34,239 --> 00:52:34,719
Speaker 1: comes to.

1241
00:52:34,880 --> 00:52:37,800
Speaker 3: A lifestyle, and yeah, what is it that we're pursuing

1242
00:52:37,960 --> 00:52:40,280
Speaker 3: keeping the end and mind overdo it? Yeah, it's possible

1243
00:52:40,280 --> 00:52:43,920
Speaker 3: to overdo it and to be too financially savvy with

1244
00:52:44,040 --> 00:52:46,120
Speaker 3: the different moves that you're making, and starting with the

1245
00:52:46,239 --> 00:52:49,000
Speaker 3: end goal in mind is so important. I completely agree

1246
00:52:49,040 --> 00:52:50,600
Speaker 3: with you. And so my big takeaway is going to

1247
00:52:50,600 --> 00:52:53,720
Speaker 3: be when we kind of touched on interest rates, mortgage

1248
00:52:53,960 --> 00:52:57,440
Speaker 3: interest rates, and how I think the natural tendency might

1249
00:52:57,560 --> 00:53:01,360
Speaker 3: be for individuals to find themselves attract to more and

1250
00:53:01,440 --> 00:53:05,239
Speaker 3: more properties that may not necessarily fit the bill. They

1251
00:53:05,320 --> 00:53:08,040
Speaker 3: might be looking further out or neighborhoods that aren't quite

1252
00:53:08,120 --> 00:53:12,520
Speaker 3: as promising, And it's in order to achieve the numbers

1253
00:53:12,560 --> 00:53:15,560
Speaker 3: that we were able to find five ten years ago. Right,

1254
00:53:16,080 --> 00:53:18,920
Speaker 3: And Chad, he specifically at some point, I forget what

1255
00:53:18,960 --> 00:53:20,239
Speaker 3: it is that we even asked him about, but he

1256
00:53:20,280 --> 00:53:23,359
Speaker 3: was talking about the romance of a location and how

1257
00:53:23,440 --> 00:53:27,000
Speaker 3: you can't discount that. You can't calculate that on paper,

1258
00:53:27,400 --> 00:53:29,400
Speaker 3: but it's something that you feel. It's something that you

1259
00:53:29,440 --> 00:53:31,120
Speaker 3: see and you can kind of write down and be like, oh,

1260
00:53:31,160 --> 00:53:34,239
Speaker 3: well it's got it's walkable, or oh it's close to

1261
00:53:34,280 --> 00:53:36,200
Speaker 3: this park, or it's close to this brewery. Oh it's

1262
00:53:36,239 --> 00:53:39,359
Speaker 3: kind of front porch. Different things that you know to

1263
00:53:39,600 --> 00:53:43,239
Speaker 3: certain individuals might appeal to them. But don't discount those

1264
00:53:43,320 --> 00:53:46,840
Speaker 3: things because again, you might be looking at if you

1265
00:53:46,880 --> 00:53:48,640
Speaker 3: are a real estate investor, you might be looking at

1266
00:53:48,640 --> 00:53:51,120
Speaker 3: some of these other properties that on paper, Okay, this

1267
00:53:51,200 --> 00:53:55,160
Speaker 3: should make sense, but you have to look beyond capitalization, right,

1268
00:53:55,400 --> 00:53:58,560
Speaker 3: You have to look beyond can I pull in one

1269
00:53:58,600 --> 00:54:00,879
Speaker 3: percent of the purchase price of the home. It's not

1270
00:54:01,000 --> 00:54:02,600
Speaker 3: just about the numbers. You got to take all those

1271
00:54:02,600 --> 00:54:04,520
Speaker 3: other things into account as well. No, I mean it

1272
00:54:04,600 --> 00:54:06,759
Speaker 3: makes me think. My the question I've always asked when

1273
00:54:06,800 --> 00:54:08,640
Speaker 3: I'm buying a property is when I live in this place?

1274
00:54:08,760 --> 00:54:10,400
Speaker 3: And would I be happy to live here? And so

1275
00:54:10,840 --> 00:54:13,920
Speaker 3: if the answer to that is no, then I'm not interested.

1276
00:54:14,000 --> 00:54:17,400
Speaker 3: Right If I'm whether it just based on location, based

1277
00:54:17,440 --> 00:54:19,560
Speaker 3: on like the yard, based on the way the home looks.

1278
00:54:19,600 --> 00:54:21,320
Speaker 3: I want it to be like cute.

1279
00:54:21,160 --> 00:54:23,840
Speaker 1: And just if it doesn't have all those factors, and

1280
00:54:23,880 --> 00:54:25,399
Speaker 1: if I wouldn't be willing to live in it myself,

1281
00:54:25,480 --> 00:54:27,319
Speaker 1: or at least twenty five twenty six year old Joel

1282
00:54:27,320 --> 00:54:29,440
Speaker 1: wouldn't be willing to live in it, then I'm not interested.

1283
00:54:29,520 --> 00:54:32,000
Speaker 1: Makes it tougher to list that property and really believe

1284
00:54:32,040 --> 00:54:34,680
Speaker 1: in it exactly. Yeah. If I love the location, if

1285
00:54:34,680 --> 00:54:37,160
Speaker 1: I love the neighborhood, and I hey, it's the disc

1286
00:54:37,200 --> 00:54:39,080
Speaker 1: golf courses right around the corner and my favorite breweries

1287
00:54:39,120 --> 00:54:41,879
Speaker 1: right over here, then when I'm talking to tenants that

1288
00:54:41,880 --> 00:54:44,759
Speaker 1: that enthusiasm comes through, and I think, especially if they

1289
00:54:44,760 --> 00:54:46,839
Speaker 1: don't know about the neighborhood, now they know, right, I'm

1290
00:54:46,840 --> 00:54:50,319
Speaker 1: almost like a tour guide of my neighborhood sometimes. Yeah, absolutely, I'm.

1291
00:54:50,200 --> 00:54:52,920
Speaker 3: Telling a big part of touting the different benefits of

1292
00:54:53,280 --> 00:54:56,799
Speaker 3: that specific property. But all right, well let's shift to

1293
00:54:56,800 --> 00:54:59,960
Speaker 3: the beer. During this episode, we enjoyed a Zeros to Heaven.

1294
00:55:00,200 --> 00:55:04,160
Speaker 3: This is a West Coast ipa by so Apropos Casa

1295
00:55:04,239 --> 00:55:08,080
Speaker 3: agria kasa that means house, So look at you, your

1296
00:55:08,080 --> 00:55:10,200
Speaker 3: fancy Spanish Chad would be so proud. He would be

1297
00:55:10,280 --> 00:55:12,640
Speaker 3: his life would be too. Who is the shots teacher? What? Uh? Yeah?

1298
00:55:12,680 --> 00:55:13,279
Speaker 3: Do you like his spear?

1299
00:55:13,440 --> 00:55:15,839
Speaker 1: I did? I did so. I'm not usually a West

1300
00:55:15,840 --> 00:55:17,160
Speaker 1: Coast IPA guy like it.

1301
00:55:17,160 --> 00:55:18,600
Speaker 3: This wasn't super West coasting.

1302
00:55:18,440 --> 00:55:19,000
Speaker 2: But it wasn't.

1303
00:55:19,080 --> 00:55:21,480
Speaker 1: Yeah, it was really interesting. It wasn't. I feel like

1304
00:55:21,520 --> 00:55:24,160
Speaker 1: a lot of West Coast IPAs, they're bitter to the max,

1305
00:55:24,600 --> 00:55:27,400
Speaker 1: but this one was clean. Yeah, I have those piney notes,

1306
00:55:27,440 --> 00:55:30,759
Speaker 1: but it wasn't. It wasn't over the top pithy bitterness.

1307
00:55:30,760 --> 00:55:33,440
Speaker 1: And so this one was like a balanced West Coast

1308
00:55:33,760 --> 00:55:36,400
Speaker 1: and I mean it was super juicy, not overly sweet,

1309
00:55:36,400 --> 00:55:38,320
Speaker 1: but super juicy. It had some of these other notes

1310
00:55:38,320 --> 00:55:40,799
Speaker 1: going on versus just sort of the harsh bitterness. Yeah,

1311
00:55:41,080 --> 00:55:45,480
Speaker 1: that you can't expect oftentimes with West Coast IPAs.

1312
00:55:45,480 --> 00:55:47,880
Speaker 3: But yeah, totally agree. Very drinkable. Glad you and I

1313
00:55:47,880 --> 00:55:49,600
Speaker 3: got to enjoy this one here on the show.

1314
00:55:49,680 --> 00:55:51,239
Speaker 1: From one of the best breweries on the West Coast.

1315
00:55:51,320 --> 00:55:53,000
Speaker 3: It's a good one. We'll make sure to link to

1316
00:55:53,200 --> 00:55:54,920
Speaker 3: where it is that. You can find Chad's book up

1317
00:55:54,920 --> 00:55:57,520
Speaker 3: on the website at howomoney dot com. That's gonna be it, buddy,

1318
00:55:57,520 --> 00:55:59,600
Speaker 3: for you're this one until next time. Best friends out,

1319
00:55:59,640 --> 00:56:00,879
Speaker 3: best friends Out,