1 00:00:00,120 --> 00:00:03,400 Speaker 1: Welcome to How to Money. I'm Joel and I am Matt, 2 00:00:03,400 --> 00:00:06,280 Speaker 1: and today we're talking about being a small but mighty 3 00:00:06,519 --> 00:00:08,399 Speaker 1: real estate investor with Chad Carson. 4 00:00:28,240 --> 00:00:30,560 Speaker 2: That's right. We are so pumped to be talking with 5 00:00:30,600 --> 00:00:34,880 Speaker 2: our friend Chad Carson aka Coach Carson, which is also 6 00:00:35,360 --> 00:00:39,519 Speaker 2: his site Coachcarson dot com. Hold over from Chad's Clemson 7 00:00:39,600 --> 00:00:42,559 Speaker 2: football playing days. So one of my earliest memories was 8 00:00:42,600 --> 00:00:44,880 Speaker 2: hanging out with Chad in the pool at finn Con 9 00:00:45,400 --> 00:00:48,639 Speaker 2: nearly five years ago. We're talking real estate. We were 10 00:00:48,720 --> 00:00:52,120 Speaker 2: enjoying a craft beer, and here we are at it again. 11 00:00:52,520 --> 00:00:55,560 Speaker 2: But just because this feels like a more casual conversation 12 00:00:55,640 --> 00:00:57,800 Speaker 2: to us, that does not mean that Chad isn't going 13 00:00:57,880 --> 00:01:00,800 Speaker 2: to bring the goods. We Joel unit we tought tout 14 00:01:00,840 --> 00:01:03,840 Speaker 2: the merits of small time real estate investing, but Chad 15 00:01:03,840 --> 00:01:06,959 Speaker 2: has made it his mission and it's the focus of 16 00:01:07,000 --> 00:01:10,039 Speaker 2: his new book, The Small and Mighty Real Estate and Investor. 17 00:01:10,680 --> 00:01:13,400 Speaker 2: So if you're wondering how owning a few investment properties, 18 00:01:13,440 --> 00:01:16,080 Speaker 2: how that could get you closer to financial freedom, We'll 19 00:01:16,160 --> 00:01:19,120 Speaker 2: keep listening. If you're wondering if it's even possible to 20 00:01:19,120 --> 00:01:21,920 Speaker 2: get into real estate given where mortgage rates are currently. 21 00:01:22,440 --> 00:01:25,200 Speaker 2: This episode is for you, Chad. Thank you so much 22 00:01:25,240 --> 00:01:27,160 Speaker 2: for talking with us today here on the podcast. 23 00:01:27,600 --> 00:01:29,399 Speaker 3: Matt Joel, it is great to be here. Thanks for 24 00:01:29,440 --> 00:01:29,760 Speaker 3: having me. 25 00:01:30,120 --> 00:01:32,920 Speaker 2: Hey, Chad, You're welcome anytime like next week also, so 26 00:01:33,080 --> 00:01:35,680 Speaker 2: we'll bring it back. Yeahs do. I mean, there really 27 00:01:35,760 --> 00:01:36,280 Speaker 2: is a lot to cover. 28 00:01:36,400 --> 00:01:39,080 Speaker 1: We probably could have multiple episodes with you, just because 29 00:01:39,200 --> 00:01:41,640 Speaker 1: the book is so thorough. But the first question we 30 00:01:41,680 --> 00:01:44,319 Speaker 1: ask anybody who comes on the show is what do 31 00:01:44,360 --> 00:01:45,120 Speaker 1: you like to sporge on? 32 00:01:45,280 --> 00:01:45,520 Speaker 3: It? 33 00:01:45,640 --> 00:01:48,720 Speaker 1: Lets us know a little bit about you and your priorities. 34 00:01:48,720 --> 00:01:51,000 Speaker 1: But Matt and I, we of course have the big 35 00:01:51,000 --> 00:01:54,040 Speaker 1: priority of spending more on craft beer. Is what's that 36 00:01:54,080 --> 00:01:54,680 Speaker 1: in your life? 37 00:01:55,200 --> 00:01:56,840 Speaker 3: That was one of the first things I resonated with 38 00:01:56,880 --> 00:01:59,200 Speaker 3: you guys on both listening to you and also meeting you, 39 00:01:59,480 --> 00:02:02,160 Speaker 3: is yeah, food and craft beer. Or my wife and 40 00:02:02,200 --> 00:02:04,800 Speaker 3: I we like to combine that with travel. I guess 41 00:02:04,800 --> 00:02:07,000 Speaker 3: that would be my kind of cheat answer that we 42 00:02:07,000 --> 00:02:09,080 Speaker 3: we like my my wife and I when we first 43 00:02:09,120 --> 00:02:10,800 Speaker 3: met on our first date, it was like where are 44 00:02:10,800 --> 00:02:12,480 Speaker 3: we going to go? Where are we going to travel? 45 00:02:12,880 --> 00:02:16,080 Speaker 3: And so from there though I think just not you know, 46 00:02:16,120 --> 00:02:19,040 Speaker 3: on a car, we drive a toy old Toyota. We 47 00:02:19,160 --> 00:02:22,120 Speaker 3: drive old you know, hand me down cars from family members. 48 00:02:22,160 --> 00:02:24,959 Speaker 3: That's that's okay with us. But going to really nice 49 00:02:25,000 --> 00:02:28,160 Speaker 3: locations having good food, like in Spain or Greece or 50 00:02:28,480 --> 00:02:31,280 Speaker 3: that's that's just that's the best. Like we really we 51 00:02:31,360 --> 00:02:33,760 Speaker 3: really enjoyed that. And then having a good craft beer 52 00:02:34,080 --> 00:02:35,720 Speaker 3: is right up there with it as well. 53 00:02:36,120 --> 00:02:38,440 Speaker 1: Okay, So I was detailing my first date with my 54 00:02:38,520 --> 00:02:40,840 Speaker 1: wife recently to one of my kids, and I ended 55 00:02:40,880 --> 00:02:43,200 Speaker 1: up taking my wife. We went to to the zoo 56 00:02:43,560 --> 00:02:45,160 Speaker 1: and to a baseball game, which is like a really 57 00:02:45,200 --> 00:02:48,480 Speaker 1: really long date, right, But you I feel like you. 58 00:02:48,400 --> 00:02:49,040 Speaker 2: Blew me on a lot. 59 00:02:49,080 --> 00:02:51,080 Speaker 1: You guys were talking about going on trips together on 60 00:02:51,120 --> 00:02:51,720 Speaker 1: your first date. 61 00:02:54,960 --> 00:02:57,320 Speaker 3: Yeah, I mean we were out hiking and we were like, well, 62 00:02:57,360 --> 00:02:59,040 Speaker 3: what do you like to do? What are you up to? 63 00:02:59,120 --> 00:03:01,120 Speaker 3: And it was just like one thing after another. She's like, well, 64 00:03:01,160 --> 00:03:03,919 Speaker 3: I traveled to Guatemala, I speak Spanish. She's a Spanish 65 00:03:03,960 --> 00:03:06,160 Speaker 3: teacher by the way. And for me, I was I 66 00:03:06,200 --> 00:03:08,400 Speaker 3: was kind of interesting to travel because I'd played football 67 00:03:08,440 --> 00:03:10,720 Speaker 3: in college and I did a little bit of study abroad. 68 00:03:10,760 --> 00:03:12,080 Speaker 3: But I was just like I never got to do 69 00:03:12,200 --> 00:03:14,320 Speaker 3: enough of it. So I was just really intrigued by that, 70 00:03:14,400 --> 00:03:16,240 Speaker 3: and it's like, well, that's exactly what I want to do. 71 00:03:16,280 --> 00:03:18,000 Speaker 3: I would love to go to Latin America. I'd love 72 00:03:18,000 --> 00:03:20,120 Speaker 3: to learn Spanish. She's like, well, I'm a Spanish teacher. 73 00:03:20,160 --> 00:03:21,960 Speaker 3: I was like, well, perfect, you can give me lessons. 74 00:03:22,000 --> 00:03:22,440 Speaker 3: That's great. 75 00:03:23,639 --> 00:03:26,440 Speaker 2: More time together. I guess we'll go ahead and get married. 76 00:03:26,880 --> 00:03:27,399 Speaker 3: Let's do it. 77 00:03:28,680 --> 00:03:31,200 Speaker 2: Well, on that note, so you just got back from 78 00:03:31,280 --> 00:03:35,480 Speaker 2: another year abroad. What made you go specifically to Spain? 79 00:03:35,960 --> 00:03:37,480 Speaker 2: Can you share something about that trip? How the heck 80 00:03:37,560 --> 00:03:37,800 Speaker 2: was it? 81 00:03:38,120 --> 00:03:40,360 Speaker 3: Yeah, well, I mentioned the Spanish language. That's sort of 82 00:03:40,600 --> 00:03:42,840 Speaker 3: something that we connect with. We've lived in Ecuador in 83 00:03:42,880 --> 00:03:44,120 Speaker 3: the past for about a year and a half of 84 00:03:44,160 --> 00:03:47,080 Speaker 3: our kids, so that was an amazing experience. We love Ecuador, 85 00:03:47,120 --> 00:03:49,840 Speaker 3: we love South America. We wanted to try something in 86 00:03:49,880 --> 00:03:52,520 Speaker 3: Europe where we could be a little closer. We kind 87 00:03:52,520 --> 00:03:55,000 Speaker 3: of had this vision of my kids were ten and 88 00:03:55,120 --> 00:03:58,320 Speaker 3: eight when we left, and actually eleven and nine. I 89 00:03:58,320 --> 00:04:00,400 Speaker 3: can't get that right, but I wanted to them to 90 00:04:00,520 --> 00:04:02,960 Speaker 3: historical sites and Europe is just so dense with so 91 00:04:03,040 --> 00:04:05,880 Speaker 3: many different places, and so we went from Spain was 92 00:04:05,920 --> 00:04:08,040 Speaker 3: our home base then you went to school there. They 93 00:04:08,080 --> 00:04:10,560 Speaker 3: were speaking Spanish at school, which was amazing. We were 94 00:04:10,560 --> 00:04:12,800 Speaker 3: in a small community in Granada, in the southern part 95 00:04:12,800 --> 00:04:15,560 Speaker 3: of Spain. But then we also took side trips, so 96 00:04:15,640 --> 00:04:18,839 Speaker 3: we went to Greece in February and went to see 97 00:04:18,880 --> 00:04:21,880 Speaker 3: like the Parthenon and all these old sites, and that 98 00:04:22,400 --> 00:04:25,400 Speaker 3: was like a history lesson in person. Yeah, that diversity 99 00:04:25,480 --> 00:04:29,080 Speaker 3: of just experience history stories just was I think all 100 00:04:29,120 --> 00:04:31,680 Speaker 3: of that together it was an amazing experience. 101 00:04:32,080 --> 00:04:34,520 Speaker 1: Talk to us about the logistics and the finances of 102 00:04:34,560 --> 00:04:36,760 Speaker 1: pulling off a big stunt like this, what sticks out 103 00:04:36,800 --> 00:04:39,880 Speaker 1: in your mind as kind of the biggest barriers, the 104 00:04:39,880 --> 00:04:41,920 Speaker 1: biggest hurdles that you had to overcome to kind of 105 00:04:42,080 --> 00:04:43,719 Speaker 1: pull off a year in foreign country. 106 00:04:43,760 --> 00:04:46,560 Speaker 2: Basically, this is like a mini retirement, right, like a yeah. 107 00:04:46,440 --> 00:04:48,839 Speaker 3: Yeah, yeah. And when I first did this back in 108 00:04:48,880 --> 00:04:50,560 Speaker 3: two thousand and nine, my wife and I didn't have 109 00:04:50,640 --> 00:04:52,400 Speaker 3: kids at that point. We just had to save money. 110 00:04:52,440 --> 00:04:54,520 Speaker 3: So like that's how we did it. First time we 111 00:04:54,560 --> 00:04:56,280 Speaker 3: went for four months. We saved the money. It was 112 00:04:56,279 --> 00:04:58,280 Speaker 3: almost like saving for a car and just paying cash 113 00:04:58,279 --> 00:04:59,880 Speaker 3: for a car. That's the way we looked at it, 114 00:05:00,040 --> 00:05:02,400 Speaker 3: instead of buying a new car. We spent twenty thousand 115 00:05:02,440 --> 00:05:05,599 Speaker 3: bucks on a trip and travel this time around, you know, 116 00:05:05,680 --> 00:05:07,920 Speaker 3: it was just a much different situation. We have rental 117 00:05:07,960 --> 00:05:10,880 Speaker 3: income coming in from the United States, and so you know, 118 00:05:10,920 --> 00:05:14,039 Speaker 3: paying for all of our lifestyle expenses in Spain basically 119 00:05:14,120 --> 00:05:17,560 Speaker 3: came from the distributions from our rental property partnership that 120 00:05:17,600 --> 00:05:19,960 Speaker 3: I have back in the United States, and so the 121 00:05:20,520 --> 00:05:22,520 Speaker 3: money side of things was less challenging, although I know 122 00:05:22,520 --> 00:05:23,680 Speaker 3: for a lot of people that's going to be the 123 00:05:23,720 --> 00:05:26,760 Speaker 3: biggest challenge, just getting the money. But the other big challenge, 124 00:05:26,760 --> 00:05:28,679 Speaker 3: which is part of the story of why I wrote 125 00:05:28,720 --> 00:05:32,039 Speaker 3: The Small Mighty Investor, was that the time and the 126 00:05:32,040 --> 00:05:34,359 Speaker 3: flexibility to be able to go for a year is 127 00:05:34,400 --> 00:05:37,600 Speaker 3: probably the most difficult thing, because you have obligations, you 128 00:05:37,640 --> 00:05:39,880 Speaker 3: have to be in a certain location. And so for 129 00:05:39,920 --> 00:05:42,599 Speaker 3: me and you have a rental property business and having 130 00:05:42,680 --> 00:05:45,040 Speaker 3: property managers on the ground doing most of the day 131 00:05:45,040 --> 00:05:47,640 Speaker 3: to day work, I have a college student rentals, so 132 00:05:47,680 --> 00:05:50,159 Speaker 3: they were leasing properties for me while I was gone 133 00:05:50,360 --> 00:05:52,880 Speaker 3: and me paying them to do that and having systems 134 00:05:52,880 --> 00:05:56,279 Speaker 3: and processes like all of that is something that's really important. 135 00:05:56,760 --> 00:05:59,120 Speaker 3: But with a typical job, you can't do that it's 136 00:05:59,120 --> 00:06:00,560 Speaker 3: a lot harder to do that. You might have a 137 00:06:00,640 --> 00:06:02,920 Speaker 3: you know, digital nomad kind of is it's becoming more 138 00:06:02,920 --> 00:06:06,280 Speaker 3: of a thing. But being able to travel abroad is 139 00:06:06,560 --> 00:06:09,880 Speaker 3: more you know, having the time and flexibility in addition 140 00:06:09,920 --> 00:06:11,919 Speaker 3: to the money, and so those two things combined, I 141 00:06:11,920 --> 00:06:13,640 Speaker 3: think we're the biggest challenges. 142 00:06:14,120 --> 00:06:16,080 Speaker 2: Yeah, yeah, that makes sense that I kind of hinted 143 00:06:16,080 --> 00:06:18,839 Speaker 2: at this when I said, like the many, many retirements, 144 00:06:18,839 --> 00:06:21,440 Speaker 2: but you are all about creating these awesome experiences just 145 00:06:21,680 --> 00:06:25,640 Speaker 2: all along the way, not just saving the best trips 146 00:06:25,839 --> 00:06:28,599 Speaker 2: for retirement right when you know when you're actually less 147 00:06:28,640 --> 00:06:32,159 Speaker 2: able to actually enjoy it. Why is do more of 148 00:06:32,200 --> 00:06:34,719 Speaker 2: what matters so core to your philosophy and how you 149 00:06:34,800 --> 00:06:35,440 Speaker 2: view life. 150 00:06:35,760 --> 00:06:37,920 Speaker 3: Yeah, I feel like, you know, everybody knows it's easy 151 00:06:37,920 --> 00:06:39,839 Speaker 3: to quantify how to make money, Like you save money, 152 00:06:39,880 --> 00:06:41,920 Speaker 3: It's not easy to do, but it's easy to quantify. 153 00:06:42,000 --> 00:06:44,160 Speaker 3: You save a bank account, it's on your statement, like 154 00:06:44,200 --> 00:06:46,680 Speaker 3: it's pretty easy to measure. And even with time, like 155 00:06:46,680 --> 00:06:49,080 Speaker 3: we know we want free time, but to me, like 156 00:06:49,120 --> 00:06:51,719 Speaker 3: the good stuff, like as a parent right now with kids, 157 00:06:51,760 --> 00:06:54,400 Speaker 3: like the good stuff are those small moments, those in 158 00:06:54,440 --> 00:06:56,919 Speaker 3: between times like picking my kids up from school, and 159 00:06:56,960 --> 00:06:58,640 Speaker 3: they tell me something that they might not have told 160 00:06:58,680 --> 00:07:01,320 Speaker 3: me if I was busy working somewhere or going on 161 00:07:01,360 --> 00:07:03,720 Speaker 3: a trip, and seeing their eyes light up when they're 162 00:07:04,320 --> 00:07:06,440 Speaker 3: seeing something for the first time in Greece at some big, 163 00:07:06,520 --> 00:07:09,560 Speaker 3: huge temple, or just the small moments, like just being present, 164 00:07:10,080 --> 00:07:13,360 Speaker 3: like doing what matters means so totally different to different people. 165 00:07:13,360 --> 00:07:15,760 Speaker 3: It might be serving in your community, it might mean 166 00:07:15,920 --> 00:07:18,400 Speaker 3: taking care of a loved one. Like all these things 167 00:07:18,520 --> 00:07:21,440 Speaker 3: which we know matter to us, they do require money 168 00:07:21,560 --> 00:07:23,160 Speaker 3: sometimes because we got to pay the bills, we got 169 00:07:23,160 --> 00:07:25,480 Speaker 3: to pay our mortgage payments. So it usually work and 170 00:07:25,520 --> 00:07:27,960 Speaker 3: our time gets spent doing that, but most of all 171 00:07:27,960 --> 00:07:31,600 Speaker 3: requires time. It requires presence. And so for me, the 172 00:07:31,640 --> 00:07:34,880 Speaker 3: small mighty investor idea is like you can go big 173 00:07:34,920 --> 00:07:37,520 Speaker 3: and get huge and have all this money, but what 174 00:07:37,560 --> 00:07:39,320 Speaker 3: if it takes away your time? What if it takes 175 00:07:39,320 --> 00:07:42,360 Speaker 3: away your presence and doing those things that matter? Like 176 00:07:42,360 --> 00:07:44,320 Speaker 3: why would you do that? Like what's what's the point. 177 00:07:44,360 --> 00:07:47,160 Speaker 3: Why not have like a more balanced approach where you 178 00:07:47,200 --> 00:07:50,360 Speaker 3: make enough money because money is important, but you have 179 00:07:50,440 --> 00:07:54,160 Speaker 3: like the ultimate currency, which is that time to do 180 00:07:54,200 --> 00:07:56,520 Speaker 3: those things that you know are really the most important 181 00:07:56,560 --> 00:07:56,880 Speaker 3: thing to you. 182 00:07:57,360 --> 00:07:59,320 Speaker 1: Yeah, agreed, and all right, let's talk about real estate 183 00:07:59,400 --> 00:08:02,320 Speaker 1: chat because that's your book obviously is influenced about that 184 00:08:02,480 --> 00:08:05,360 Speaker 1: ultimate desire to have more free time to do more 185 00:08:05,400 --> 00:08:08,520 Speaker 1: of what matters. But specifically tell us why real estate, right? 186 00:08:08,560 --> 00:08:11,480 Speaker 1: Why not just continue to stock money into index funds 187 00:08:11,480 --> 00:08:13,480 Speaker 1: and tax advantage accounts. That's what a lot of personal 188 00:08:13,520 --> 00:08:17,280 Speaker 1: finance enthusiasts talk about, Like that's that's the easy way. 189 00:08:17,560 --> 00:08:19,200 Speaker 1: Real estate seems a little more difficult. 190 00:08:19,480 --> 00:08:20,960 Speaker 3: Yeah, I mean they're all good. I want to say 191 00:08:21,000 --> 00:08:23,360 Speaker 3: that upfront, Like I like index funds, I like saving 192 00:08:23,360 --> 00:08:25,400 Speaker 3: these accounts, I like all that stuff. Which was so 193 00:08:25,440 --> 00:08:27,360 Speaker 3: cool about your show is that you you combine a 194 00:08:27,360 --> 00:08:29,440 Speaker 3: lot of different tools and show how they all work. 195 00:08:29,760 --> 00:08:32,160 Speaker 3: But I'll make the pitch for real estate investing if 196 00:08:32,360 --> 00:08:34,640 Speaker 3: if this is something that somebody, if you're interested in it, 197 00:08:34,679 --> 00:08:36,400 Speaker 3: because I think I don't like to try to talk 198 00:08:36,400 --> 00:08:39,480 Speaker 3: people into real estate because it's like it's kind of 199 00:08:39,480 --> 00:08:41,640 Speaker 3: like a startup business where on the front end, you've 200 00:08:41,640 --> 00:08:43,679 Speaker 3: got to learn a lot, you've got to build relationships, 201 00:08:43,800 --> 00:08:46,640 Speaker 3: you've got to invest some time and knowledge and energy 202 00:08:46,720 --> 00:08:49,079 Speaker 3: into it. But on the back end it can become 203 00:08:49,120 --> 00:08:51,760 Speaker 3: a very passive kind of like a blue chip stock 204 00:08:52,040 --> 00:08:55,040 Speaker 3: type of investment. So that front end, that front loaded 205 00:08:55,400 --> 00:08:57,600 Speaker 3: kind of investment of time and energy, that is important 206 00:08:57,640 --> 00:08:58,800 Speaker 3: to know. So like I don't That's why I don't 207 00:08:58,800 --> 00:09:00,160 Speaker 3: want to talk people into it. But if you are 208 00:09:00,200 --> 00:09:02,600 Speaker 3: willing to put that energy and that effort and that 209 00:09:02,679 --> 00:09:05,920 Speaker 3: money upfront, real estate has this unique quality. And I'm 210 00:09:05,920 --> 00:09:07,679 Speaker 3: a friend of mine Jillian john z Rude, who you 211 00:09:07,760 --> 00:09:10,800 Speaker 3: guys probably didn't know as well. She always says that 212 00:09:10,800 --> 00:09:15,000 Speaker 3: real estate money, it spends differently in early retirement or 213 00:09:15,040 --> 00:09:17,960 Speaker 3: in financial independence, it spends differently. So like think about 214 00:09:18,160 --> 00:09:20,160 Speaker 3: if you had a million dollars or half a million 215 00:09:20,200 --> 00:09:23,040 Speaker 3: dollars in a stock investment account, or if you had 216 00:09:23,040 --> 00:09:25,839 Speaker 3: a four to one k, Like taking your principle out 217 00:09:25,840 --> 00:09:28,240 Speaker 3: of there to live off of that principle is just 218 00:09:28,320 --> 00:09:33,199 Speaker 3: a different psychological decision than getting rental income that comes 219 00:09:33,240 --> 00:09:35,280 Speaker 3: in every single month and you still have the property, 220 00:09:35,320 --> 00:09:37,160 Speaker 3: like you're not selling the property, but you get this 221 00:09:37,160 --> 00:09:40,120 Speaker 3: rental income coming in. And I've experienced this firsthand because 222 00:09:40,200 --> 00:09:43,880 Speaker 3: I'm living in Spain. We spend one hundred percent of 223 00:09:43,880 --> 00:09:46,200 Speaker 3: the money some months because we're traveling and doing all 224 00:09:46,240 --> 00:09:49,840 Speaker 3: this stuff. And guess what, like next month, another set 225 00:09:49,880 --> 00:09:51,960 Speaker 3: of money comes in, and then another set of money. 226 00:09:51,960 --> 00:09:56,000 Speaker 3: And so that recurring income of real estate is a 227 00:09:56,000 --> 00:09:58,080 Speaker 3: super important thing, and it is more than just math. 228 00:09:58,160 --> 00:10:02,160 Speaker 3: Like the math's important too, but having recurring income that 229 00:10:02,280 --> 00:10:04,600 Speaker 3: you can also get to be semi passive. So it's 230 00:10:04,640 --> 00:10:06,200 Speaker 3: not gonna be one hundred percent passive, but I spend 231 00:10:06,200 --> 00:10:08,600 Speaker 3: a couple hours per week now that my real estate 232 00:10:08,600 --> 00:10:11,840 Speaker 3: investment portfolio is mature. I'm not buying and selling properties. 233 00:10:11,880 --> 00:10:15,480 Speaker 3: I'm not remodeling properties. We're just managing the managers basically. 234 00:10:15,760 --> 00:10:17,720 Speaker 3: And I say, if you have a few properties, that 235 00:10:17,720 --> 00:10:20,360 Speaker 3: could be like thirty minutes a week, four hours a month. 236 00:10:20,679 --> 00:10:23,400 Speaker 3: That's not exaggeration, like I've I've surveyed a lot of 237 00:10:23,400 --> 00:10:26,120 Speaker 3: people I know who had those kind of portfolios, and 238 00:10:26,520 --> 00:10:29,400 Speaker 3: so it could be very passive while also producing that 239 00:10:29,440 --> 00:10:31,680 Speaker 3: recurring income, which when you want to live off your income, 240 00:10:31,679 --> 00:10:33,680 Speaker 3: when you want to live off your wealth, real estate 241 00:10:33,720 --> 00:10:36,319 Speaker 3: investing gives you that ability to do it. In addition 242 00:10:36,400 --> 00:10:38,400 Speaker 3: to all the other stuff you've probably heard about of 243 00:10:38,400 --> 00:10:42,079 Speaker 3: building wealth and using leverage and having small amount of 244 00:10:42,120 --> 00:10:44,600 Speaker 3: money down, like that's all true too. But then also 245 00:10:44,679 --> 00:10:48,480 Speaker 3: real estate is an amazing financial independence kind of core 246 00:10:48,600 --> 00:10:51,079 Speaker 3: vehicle to help you get there and live off your income. 247 00:10:51,400 --> 00:10:53,680 Speaker 1: Well, if we're talking about early financial independence. It's also 248 00:10:53,760 --> 00:10:56,120 Speaker 1: not age restricted like some of those tax advantage retirement 249 00:10:56,120 --> 00:10:58,600 Speaker 1: accounts are, right like correct, if you're putting it into 250 00:10:58,640 --> 00:11:02,600 Speaker 1: a traditional four to one k or ira, you're not 251 00:11:02,640 --> 00:11:05,120 Speaker 1: allowed to really touch that stuff without penalties until fifty 252 00:11:05,200 --> 00:11:07,079 Speaker 1: nine and a half. It's so real estate, it's like boom, 253 00:11:07,120 --> 00:11:09,880 Speaker 1: you get to you get kind of that recurring dividend 254 00:11:10,400 --> 00:11:12,079 Speaker 1: on you know, an ongoing basis. 255 00:11:12,280 --> 00:11:14,360 Speaker 3: Yeah, and it also has tax advantages. It's not quite 256 00:11:14,360 --> 00:11:16,680 Speaker 3: as good as like a roth ira or something like that, 257 00:11:16,720 --> 00:11:19,000 Speaker 3: but you know, you can grow in a tax advantage 258 00:11:19,000 --> 00:11:22,520 Speaker 3: way using things like depreciation, which shelters your income so 259 00:11:22,559 --> 00:11:24,400 Speaker 3: you don't pay quite as much in taxes as you 260 00:11:24,760 --> 00:11:27,800 Speaker 3: would if you just got the income without depreciation. You know, 261 00:11:27,840 --> 00:11:30,559 Speaker 3: this is something that people even before retirement accounts were around, 262 00:11:30,559 --> 00:11:33,600 Speaker 3: like people have been using real estate and rental income 263 00:11:33,720 --> 00:11:36,400 Speaker 3: is like a core retirement vehicle as a core well 264 00:11:36,480 --> 00:11:40,120 Speaker 3: building vehicle because of all these various benefits that it has. 265 00:11:40,360 --> 00:11:43,000 Speaker 2: Yeah, in addition to the psychological win that comes with 266 00:11:43,040 --> 00:11:46,640 Speaker 2: being able to enjoy the profit from the properties that 267 00:11:46,640 --> 00:11:49,080 Speaker 2: that thing is shedding every single month. You know, we've 268 00:11:49,240 --> 00:11:51,640 Speaker 2: talked about the small and the small a mighty approach 269 00:11:52,000 --> 00:11:55,319 Speaker 2: with our listeners before. This is something we have adopted 270 00:11:55,440 --> 00:11:57,200 Speaker 2: ourselves when it comes to how it is that we 271 00:11:57,200 --> 00:11:59,840 Speaker 2: look at real estate. But for listeners out there who 272 00:12:00,280 --> 00:12:03,560 Speaker 2: maybe haven't heard your philosophy, can you share specifically why 273 00:12:03,679 --> 00:12:05,720 Speaker 2: going small, how it is that that can be the 274 00:12:05,800 --> 00:12:07,120 Speaker 2: right choice for a lot of folks. 275 00:12:07,360 --> 00:12:09,240 Speaker 3: Yeah, I'll tell it with a story. Like when I 276 00:12:09,280 --> 00:12:12,040 Speaker 3: first started real estate investing, I was twenty three years old. 277 00:12:12,040 --> 00:12:15,160 Speaker 3: I just graduated from college and every class I went 278 00:12:15,200 --> 00:12:16,880 Speaker 3: to and I'm kind of dating myself now, so it 279 00:12:16,960 --> 00:12:18,560 Speaker 3: was twenty one years ago. Like I was listening to 280 00:12:18,600 --> 00:12:20,960 Speaker 3: like CDs back in the car and riding around. You know, 281 00:12:21,320 --> 00:12:23,959 Speaker 3: we did it back in the day, back in the tapes. 282 00:12:24,000 --> 00:12:26,920 Speaker 3: Before that, I was also listening to tapes, but anyway, 283 00:12:27,320 --> 00:12:29,480 Speaker 3: I was listening to these and the ethos. So the 284 00:12:29,520 --> 00:12:31,880 Speaker 3: main message you got most of the time was Hey, 285 00:12:31,920 --> 00:12:34,000 Speaker 3: you should get bigger and bigger and bigger, and you 286 00:12:34,000 --> 00:12:36,920 Speaker 3: should grow faster and faster and faster. In fact, the 287 00:12:36,960 --> 00:12:39,280 Speaker 3: most successful people are the people who get the biggest 288 00:12:39,320 --> 00:12:43,000 Speaker 3: and grow the fastest. It's just sort of an unwritten assumption, 289 00:12:43,480 --> 00:12:45,320 Speaker 3: and so I sort of bought into that, and my 290 00:12:45,360 --> 00:12:47,160 Speaker 3: business partner and I dur in the first three four 291 00:12:47,240 --> 00:12:49,520 Speaker 3: or five years we're on that track. We were trying 292 00:12:49,520 --> 00:12:52,040 Speaker 3: to get bigger, buy a lot of properties. But the 293 00:12:52,080 --> 00:12:53,760 Speaker 3: end result of that was number one, we hit the 294 00:12:53,800 --> 00:12:56,000 Speaker 3: two thousand and seven eight nine recession, and that was 295 00:12:56,000 --> 00:12:58,800 Speaker 3: pretty scary, you know, having to try to survive that 296 00:12:58,840 --> 00:13:01,680 Speaker 3: when you've grown fast a lot of leverage. So that 297 00:13:01,800 --> 00:13:04,720 Speaker 3: was one problem, is that there's a risk of growing fast. 298 00:13:04,760 --> 00:13:06,400 Speaker 3: But then the other thing we realized, going back to 299 00:13:06,400 --> 00:13:10,840 Speaker 3: that conversation about time, is that a smaller, simpler, slower, 300 00:13:10,880 --> 00:13:13,439 Speaker 3: like I call it like a tortoise like real estate 301 00:13:13,480 --> 00:13:17,600 Speaker 3: investing strategy is actually super effective too, and it also 302 00:13:18,000 --> 00:13:20,400 Speaker 3: gives you more of that time and flexibility that we 303 00:13:20,440 --> 00:13:24,120 Speaker 3: talked about, where if you're constantly always growing, always growing, 304 00:13:24,120 --> 00:13:25,960 Speaker 3: always growing, and I'm not saying you shouldn't push it 305 00:13:26,000 --> 00:13:27,840 Speaker 3: and work hard and do those kinds of things, but 306 00:13:27,880 --> 00:13:29,840 Speaker 3: if you don't, if you'd never take a break, like 307 00:13:29,840 --> 00:13:31,240 Speaker 3: I look at it like climbing a mountain, Like if 308 00:13:31,280 --> 00:13:33,800 Speaker 3: you're always climbing and you never take like some plateaus 309 00:13:34,000 --> 00:13:36,640 Speaker 3: to take a break and take a breath and relax. 310 00:13:37,040 --> 00:13:40,160 Speaker 3: Then you're gonna not enjoy the process. You're not going 311 00:13:40,200 --> 00:13:42,240 Speaker 3: to enjoy the reason you're investing in the first place. 312 00:13:42,280 --> 00:13:44,560 Speaker 3: You're going to not miss those opportunities with your family, 313 00:13:44,640 --> 00:13:47,760 Speaker 3: with your friends. And so we realized in that moment 314 00:13:47,800 --> 00:13:50,440 Speaker 3: what we started writing down. Like in two thousand and seven, 315 00:13:50,440 --> 00:13:52,280 Speaker 3: when we were in the kind of the eye of 316 00:13:52,280 --> 00:13:54,360 Speaker 3: the hurricane, we were like, all right, what is it? 317 00:13:54,400 --> 00:13:56,240 Speaker 3: We got into investing in real estate for like, why 318 00:13:56,240 --> 00:13:58,680 Speaker 3: are we doing this? We bought like dozens and dozens 319 00:13:58,720 --> 00:14:01,480 Speaker 3: of properties in the last year, and we wrote down 320 00:14:01,520 --> 00:14:03,880 Speaker 3: things like I wanted to travel like I, you know, 321 00:14:03,920 --> 00:14:06,800 Speaker 3: with my future wife who I've just met. I wanted 322 00:14:06,800 --> 00:14:10,400 Speaker 3: to be present with friends. I wanted to play basketball 323 00:14:10,480 --> 00:14:11,960 Speaker 3: in the middle of the day. I wanted to go hiking. 324 00:14:11,960 --> 00:14:14,200 Speaker 3: Because we lived in we lived in Clempson, South Carolina, 325 00:14:14,400 --> 00:14:16,520 Speaker 3: near a bunch of the foothills of the mountains. So 326 00:14:16,760 --> 00:14:18,480 Speaker 3: the things I wrote down on my list, some of 327 00:14:18,480 --> 00:14:21,040 Speaker 3: them required money, like travel requires some money. But the 328 00:14:21,040 --> 00:14:23,360 Speaker 3: biggest impediment to me doing the things that I wanted 329 00:14:23,400 --> 00:14:26,520 Speaker 3: to do in my life was free time and flexibility. 330 00:14:27,000 --> 00:14:28,600 Speaker 3: And that was such an aha moment, I was like, 331 00:14:28,600 --> 00:14:31,720 Speaker 3: all right, we need to build a real estate investing philosophy, 332 00:14:31,760 --> 00:14:35,800 Speaker 3: a business that works at backwards from those lifestyle things, 333 00:14:35,840 --> 00:14:37,960 Speaker 3: that the reason we're doing in the first place, so 334 00:14:38,000 --> 00:14:40,760 Speaker 3: that we don't miss out on the whole benefit of 335 00:14:40,840 --> 00:14:42,640 Speaker 3: why we even started this in the first place, and 336 00:14:42,680 --> 00:14:44,680 Speaker 3: that I didn't call it that at the time, but 337 00:14:44,720 --> 00:14:49,240 Speaker 3: the end result was having a leaner, slower business. And 338 00:14:49,280 --> 00:14:51,280 Speaker 3: the more I got into it, the more I studied 339 00:14:51,280 --> 00:14:53,360 Speaker 3: people who've done this. I met people who had five 340 00:14:53,400 --> 00:14:57,680 Speaker 3: properties who are the most relaxed people enjoying life I've 341 00:14:57,680 --> 00:14:59,680 Speaker 3: ever seen in my life, or people with ten properties 342 00:14:59,680 --> 00:15:02,560 Speaker 3: and make enough money, but they don't have the kind 343 00:15:02,560 --> 00:15:05,840 Speaker 3: of the weight and all the struggle and the stress 344 00:15:05,920 --> 00:15:08,640 Speaker 3: of going big, and it just it may it inspired 345 00:15:08,680 --> 00:15:10,960 Speaker 3: me to try to do that with our own business 346 00:15:11,000 --> 00:15:12,360 Speaker 3: and help other people do it as well. 347 00:15:12,560 --> 00:15:14,720 Speaker 2: Yeah. Well, there's a focus there where you're optimizing for 348 00:15:14,920 --> 00:15:18,040 Speaker 2: life as opposed to optimizing your real estate, like optimizing 349 00:15:18,080 --> 00:15:20,680 Speaker 2: your portfolio, and we're I mean, I'm going to side 350 00:15:20,680 --> 00:15:23,280 Speaker 2: with optimizing for life every single time. Yeah, and you're 351 00:15:23,320 --> 00:15:27,000 Speaker 2: working back from what matters to you. And then you're saying, cool, 352 00:15:27,120 --> 00:15:29,160 Speaker 2: how do I fund that life achieve that. Yeah, and 353 00:15:29,480 --> 00:15:31,440 Speaker 2: so many people are doing or doing the opposite, or 354 00:15:31,600 --> 00:15:33,360 Speaker 2: they just haven't thought enough about what they want their 355 00:15:33,400 --> 00:15:34,640 Speaker 2: life to look like, and so they're like, well, I 356 00:15:34,640 --> 00:15:36,720 Speaker 2: guess real estate is the ticket to wealth. And then 357 00:15:36,720 --> 00:15:38,440 Speaker 2: so they keep pursuing that and they go so dang 358 00:15:38,480 --> 00:15:42,520 Speaker 2: hard that they they're missing out on the benefits of 359 00:15:42,560 --> 00:15:44,520 Speaker 2: that real estate could afford you. Actually, in your book, 360 00:15:44,520 --> 00:15:47,360 Speaker 2: you highlight three different couples and you're like, this, this 361 00:15:47,440 --> 00:15:49,880 Speaker 2: couple is making just a plenty of money from the 362 00:15:49,920 --> 00:15:52,040 Speaker 2: real estate portfolio, but they've got the flexibility to go 363 00:15:52,120 --> 00:15:54,960 Speaker 2: along with it, where somebody else might have a thousand units. 364 00:15:55,000 --> 00:15:57,480 Speaker 2: They've got this job, this thing they've got to get 365 00:15:57,480 --> 00:15:59,800 Speaker 2: back to. You want to kind of like talk about 366 00:15:59,840 --> 00:16:03,520 Speaker 2: those those couples and that kind of scenario you set 367 00:16:03,560 --> 00:16:05,400 Speaker 2: up in your book and how you think about it. 368 00:16:05,600 --> 00:16:08,200 Speaker 3: Yeah, the story was, I'll simplify it a little bit. 369 00:16:08,200 --> 00:16:11,520 Speaker 3: There's a couple Lizen Tom. They live in Saint Louis, Missouri, 370 00:16:11,640 --> 00:16:13,360 Speaker 3: and they could be anywhere in the United States, right, 371 00:16:13,360 --> 00:16:17,040 Speaker 3: but they had the simple ten property portfolio, and fifteen 372 00:16:17,120 --> 00:16:19,760 Speaker 3: years after they started, they bought these properties like in 373 00:16:19,760 --> 00:16:21,960 Speaker 3: the first five or six years, and then they worked 374 00:16:22,000 --> 00:16:23,920 Speaker 3: on paying them off, Like they actually paid off the 375 00:16:23,960 --> 00:16:26,760 Speaker 3: debt on their properties, and they owned ten single family 376 00:16:26,800 --> 00:16:29,520 Speaker 3: houses free and clear, and just to kind of simplify 377 00:16:29,560 --> 00:16:33,680 Speaker 3: the numbers, when they paid all of their expenses like taxes, insurance, maintenance, 378 00:16:33,720 --> 00:16:36,000 Speaker 3: all that stuff, they had no mortgage payment anymore. And 379 00:16:36,040 --> 00:16:39,200 Speaker 3: they made one thousand dollars per property or ten thousand 380 00:16:39,240 --> 00:16:43,240 Speaker 3: dollars per month, So ten thousand dollars per month, Like, 381 00:16:43,280 --> 00:16:45,400 Speaker 3: think about what you can do with ten thousand a month. 382 00:16:45,400 --> 00:16:46,960 Speaker 3: And if that's not your number, maybe you only need 383 00:16:47,000 --> 00:16:49,280 Speaker 3: five thousand or fifteen thousand, whatever your number is. But 384 00:16:49,520 --> 00:16:52,720 Speaker 3: the point was like ten properties produced ten thousand dollars 385 00:16:52,760 --> 00:16:55,160 Speaker 3: per month, and they were paid off, and they were 386 00:16:55,160 --> 00:16:57,360 Speaker 3: friends with another couple who had kind of got a 387 00:16:57,360 --> 00:16:59,360 Speaker 3: different path, which is sort of the traditional path these 388 00:16:59,440 --> 00:17:01,680 Speaker 3: days if you listen to real estate investor, you know 389 00:17:02,080 --> 00:17:04,360 Speaker 3: people talking about it. They went and they got big 390 00:17:04,400 --> 00:17:06,520 Speaker 3: because they were so good at real estate investing that 391 00:17:06,640 --> 00:17:08,880 Speaker 3: they said, why should I just stop at my own properties, 392 00:17:08,920 --> 00:17:11,439 Speaker 3: Like I could go partner with other people and raise money, 393 00:17:11,480 --> 00:17:14,359 Speaker 3: And they bought thousands of units with a bunch of 394 00:17:14,400 --> 00:17:17,000 Speaker 3: other people's money. But the reality of the situation. The 395 00:17:17,040 --> 00:17:19,720 Speaker 3: story was they were taking a trip together and the 396 00:17:19,760 --> 00:17:22,080 Speaker 3: couple who had all the thousands of units, they had 397 00:17:22,080 --> 00:17:24,200 Speaker 3: to go back to the United States. They couldn't extend 398 00:17:24,240 --> 00:17:27,520 Speaker 3: their trip because they had remodel projects going on. They 399 00:17:27,560 --> 00:17:29,720 Speaker 3: had a team. You know, one of their team members 400 00:17:29,760 --> 00:17:31,439 Speaker 3: like quit and they had to go try to replace 401 00:17:31,480 --> 00:17:33,479 Speaker 3: that person, and so on paper, it looked like they 402 00:17:33,480 --> 00:17:36,520 Speaker 3: had systems and team and supposedly it was passive. But 403 00:17:36,600 --> 00:17:39,000 Speaker 3: when you have this big operation with lots of people 404 00:17:39,040 --> 00:17:41,080 Speaker 3: and lots of things going on, it's like a machine. 405 00:17:41,080 --> 00:17:43,760 Speaker 3: There's always something breaking and there's always something you got 406 00:17:43,760 --> 00:17:46,520 Speaker 3: to put your attention on. And so what I advocate for, 407 00:17:46,640 --> 00:17:48,840 Speaker 3: what I think this story shows is kind of like 408 00:17:48,880 --> 00:17:52,000 Speaker 3: time management. You could try to manage your time by 409 00:17:52,040 --> 00:17:54,679 Speaker 3: doing like hundreds of things and having like organizers and 410 00:17:54,760 --> 00:17:56,199 Speaker 3: to do lists and all that stuff, and you can 411 00:17:56,720 --> 00:17:59,240 Speaker 3: systematize all that, you know, that's one way to do it, 412 00:17:59,320 --> 00:18:01,199 Speaker 3: or you could just do stuff like you could just 413 00:18:01,240 --> 00:18:03,640 Speaker 3: not do as many things every day and your life 414 00:18:03,680 --> 00:18:06,280 Speaker 3: would be a lot simpler. And real estate investing is 415 00:18:06,320 --> 00:18:07,800 Speaker 3: the same way, like you got to find a happy 416 00:18:07,840 --> 00:18:10,560 Speaker 3: medium where yeah, you got to get enough properties to 417 00:18:10,680 --> 00:18:14,000 Speaker 3: pay your goals, like pay for things, to build enough wealth. 418 00:18:14,200 --> 00:18:16,080 Speaker 3: But there's a happy medium in there, and I think 419 00:18:16,080 --> 00:18:18,320 Speaker 3: the small and Mighty model says you can get to 420 00:18:18,359 --> 00:18:21,760 Speaker 3: five properties, ten properties, twenty properties. You can get bigger 421 00:18:21,760 --> 00:18:24,080 Speaker 3: if you want, depending on how what your goals are. 422 00:18:24,280 --> 00:18:27,760 Speaker 3: But instead of using the cash to continue getting more 423 00:18:27,760 --> 00:18:30,400 Speaker 3: and more and more, eventually you reach this stage, which 424 00:18:30,440 --> 00:18:32,600 Speaker 3: I call in the book the ender stage, where you've 425 00:18:32,600 --> 00:18:35,600 Speaker 3: built enough wealth to start actually plowing the money back 426 00:18:35,800 --> 00:18:37,960 Speaker 3: and to use a poker metaphor, like to start taking 427 00:18:37,960 --> 00:18:40,600 Speaker 3: some chips off the table and actually paying off some 428 00:18:40,680 --> 00:18:43,639 Speaker 3: debt and simplifying your life and you don't have to 429 00:18:43,640 --> 00:18:45,920 Speaker 3: pay off all your properties. But like actually paying off 430 00:18:45,920 --> 00:18:48,880 Speaker 3: debts kind of sacrilegious. In the real estate world. People 431 00:18:48,880 --> 00:18:50,920 Speaker 3: don't talk about that, Oh, you can't pay debt off, 432 00:18:50,920 --> 00:18:52,600 Speaker 3: Like what are you talking about? That's not you can't. 433 00:18:52,640 --> 00:18:54,479 Speaker 3: The only day Ramsay does that, it's like, no, no, 434 00:18:54,560 --> 00:18:57,600 Speaker 3: you can. Actually you can do it too, like it's 435 00:18:57,640 --> 00:18:59,000 Speaker 3: actually a reasonable thing to do. 436 00:18:59,440 --> 00:19:01,840 Speaker 2: Well, we want to talk more about that how you 437 00:19:01,880 --> 00:19:03,639 Speaker 2: sold some properties. We want to talk about some of 438 00:19:03,680 --> 00:19:06,440 Speaker 2: the other factors you consider when you are looking at properties, 439 00:19:06,480 --> 00:19:09,160 Speaker 2: and how we should be responding to rising interest rates 440 00:19:09,160 --> 00:19:11,080 Speaker 2: as well. We will get to all of that right 441 00:19:11,119 --> 00:19:21,880 Speaker 2: after this. We're back from the break. 442 00:19:21,920 --> 00:19:25,280 Speaker 1: We're still talking with our good friend Chad Carson about 443 00:19:25,400 --> 00:19:29,320 Speaker 1: real estate investing, but kind of taking a different approach 444 00:19:29,480 --> 00:19:32,199 Speaker 1: than most people advocate for these days. And Chad, can 445 00:19:32,240 --> 00:19:34,280 Speaker 1: you actually maybe hop in the time machine a little bit. 446 00:19:34,280 --> 00:19:36,240 Speaker 1: You were talking about when you used to listen to tapes, 447 00:19:36,280 --> 00:19:38,879 Speaker 1: so maybe your brain is already there, But about how 448 00:19:38,920 --> 00:19:40,600 Speaker 1: you got into real estate in the first place, because 449 00:19:41,359 --> 00:19:44,560 Speaker 1: and you actually made a quick pivot in the beginning. 450 00:19:44,840 --> 00:19:47,159 Speaker 1: House hacking is part of that story. I'd love for 451 00:19:47,200 --> 00:19:48,480 Speaker 1: you to tell our listeners about that. 452 00:19:49,000 --> 00:19:52,040 Speaker 3: Yeah, I was listening to tapes, that's true, and it 453 00:19:52,080 --> 00:19:53,560 Speaker 3: was back when I was twenty three years old, but 454 00:19:53,600 --> 00:19:56,080 Speaker 3: I had graduated from college. I was a biology major. 455 00:19:56,119 --> 00:19:57,359 Speaker 3: I thought I was going to go to med school. 456 00:19:57,400 --> 00:19:58,600 Speaker 3: And I was like, all right, I'm just gonna take 457 00:19:58,640 --> 00:20:00,480 Speaker 3: a break for a year or two and just do 458 00:20:00,560 --> 00:20:03,159 Speaker 3: this like entrepreneurship thing. And I actually started trying to 459 00:20:03,200 --> 00:20:05,600 Speaker 3: flip houses. So you know, in real estate, you could 460 00:20:05,600 --> 00:20:07,439 Speaker 3: have the rental property business, which is what I do 461 00:20:07,520 --> 00:20:09,239 Speaker 3: now and a lot of people do, and you can 462 00:20:09,320 --> 00:20:11,480 Speaker 3: do this part time on the side, whereas what I 463 00:20:11,560 --> 00:20:15,040 Speaker 3: was doing was going out looking for deals, finding fixer 464 00:20:15,119 --> 00:20:17,480 Speaker 3: upper properties, foreclosures. I'd try to get them at a 465 00:20:17,520 --> 00:20:19,439 Speaker 3: really low price, and then my business partner and I 466 00:20:19,480 --> 00:20:22,160 Speaker 3: would flip them, either fixing them up and selling them 467 00:20:22,400 --> 00:20:25,040 Speaker 3: or just reselling them to another investor. So that's how 468 00:20:25,040 --> 00:20:26,760 Speaker 3: I put food on the table, like that was my job. 469 00:20:26,840 --> 00:20:28,720 Speaker 3: And once I started doing that for a year, I 470 00:20:28,760 --> 00:20:30,640 Speaker 3: kind of forgot about med school and said, Eh, I'm 471 00:20:30,680 --> 00:20:32,720 Speaker 3: just gonna do this, do this thing on my own, 472 00:20:32,720 --> 00:20:34,800 Speaker 3: and I don't want to go to the traditional path anymore. 473 00:20:35,040 --> 00:20:36,639 Speaker 2: I'll make more money than a doctor anyway. 474 00:20:36,760 --> 00:20:39,560 Speaker 3: Yeah, well maybe not. I don't think I think I 475 00:20:39,560 --> 00:20:41,800 Speaker 3: would have made more money. I didn't do that well, 476 00:20:41,800 --> 00:20:43,840 Speaker 3: but I've survived and I had a lot of fun 477 00:20:43,840 --> 00:20:45,520 Speaker 3: and I played pickup basketball in the middle of the day, 478 00:20:45,560 --> 00:20:49,040 Speaker 3: so that I've met my goals. But I also you know, 479 00:20:49,280 --> 00:20:51,600 Speaker 3: in the early years, like anytime you start something new, 480 00:20:52,080 --> 00:20:55,520 Speaker 3: but your housing expense is a big deal. And so 481 00:20:55,600 --> 00:20:58,720 Speaker 3: I quickly learned that about this strategy where you can 482 00:20:58,760 --> 00:21:01,480 Speaker 3: move into a property and rent out part of the 483 00:21:01,480 --> 00:21:04,320 Speaker 3: property that you live in called house hacking today, and 484 00:21:04,440 --> 00:21:06,760 Speaker 3: I lived I actually bought a fourplex and I'm in 485 00:21:06,840 --> 00:21:09,200 Speaker 3: a college town, Clemson, and so we had these little, small, 486 00:21:09,280 --> 00:21:11,560 Speaker 3: multi family properties and that's what happened to be pretty 487 00:21:11,560 --> 00:21:14,240 Speaker 3: close to Clemson's campus, and so it was a it 488 00:21:14,280 --> 00:21:16,720 Speaker 3: was a major fixer upper. Like in fact, I showed 489 00:21:16,800 --> 00:21:19,960 Speaker 3: up the property was vacant and it had Merry Christmas 490 00:21:20,040 --> 00:21:23,800 Speaker 3: spray painted across the front of the whole building, like 491 00:21:23,920 --> 00:21:25,720 Speaker 3: somebody like tagged it in the middle of the night. 492 00:21:25,800 --> 00:21:27,760 Speaker 3: And I walked in. I walked into unit four and 493 00:21:27,800 --> 00:21:29,439 Speaker 3: there was an outline of a chalkout line of a 494 00:21:29,480 --> 00:21:32,200 Speaker 3: body in unit number four. And I'm like, okay, I 495 00:21:32,200 --> 00:21:35,520 Speaker 3: don't know that I can do this. But my I 496 00:21:35,520 --> 00:21:37,320 Speaker 3: had a mentor or luckily, he was like, no, no, 497 00:21:37,359 --> 00:21:39,840 Speaker 3: that's perfect. That's exactly what you want. You know, you 498 00:21:39,840 --> 00:21:42,280 Speaker 3: wanted to look horrible that nobody else wants this property. 499 00:21:42,280 --> 00:21:43,719 Speaker 3: And I was like, all right, I guess I'll do this. 500 00:21:43,840 --> 00:21:46,600 Speaker 3: And and so I fixed that property up. I had 501 00:21:46,600 --> 00:21:48,359 Speaker 3: to borrow money to do it, but I live. I 502 00:21:48,400 --> 00:21:50,960 Speaker 3: moved into unit number two and I rented all the 503 00:21:50,960 --> 00:21:55,560 Speaker 3: other three units out. And my expenses principal, interest, taxes, insurance, 504 00:21:55,560 --> 00:21:57,720 Speaker 3: and a little bit of my maintenance was covered one 505 00:21:57,760 --> 00:22:01,719 Speaker 3: hundred percent by the other three and so there we go. 506 00:22:01,840 --> 00:22:04,120 Speaker 2: Number one monthly expense covered, yeah, covered. Yeah. 507 00:22:04,119 --> 00:22:06,359 Speaker 3: And I still had my old Toyota that I drove 508 00:22:06,400 --> 00:22:08,000 Speaker 3: for like many years after that. So like I was 509 00:22:08,080 --> 00:22:11,399 Speaker 3: living lean, lean, lean, lean, very cheap, which allowed me 510 00:22:11,480 --> 00:22:13,719 Speaker 3: to stay as an entrepreneur because it got rough, you know, 511 00:22:13,720 --> 00:22:15,600 Speaker 3: it got rough, so I had a roller coaster. I'd 512 00:22:15,600 --> 00:22:17,720 Speaker 3: do really well for a month and I'd lose money 513 00:22:17,960 --> 00:22:21,040 Speaker 3: next month, and that helped me kind of sustain that 514 00:22:21,359 --> 00:22:23,480 Speaker 3: journey of not having to go back to a regular job. 515 00:22:24,080 --> 00:22:26,159 Speaker 3: But anyone can use that, like house hacking is amazing. 516 00:22:26,200 --> 00:22:28,359 Speaker 3: I feel like it's the if you're willing to do it. 517 00:22:28,400 --> 00:22:30,840 Speaker 3: There's so many variations of that, but especially early in 518 00:22:30,880 --> 00:22:33,439 Speaker 3: your career, you can use that as a kind of 519 00:22:33,560 --> 00:22:35,879 Speaker 3: jumping off point into rental properties because you can move 520 00:22:35,920 --> 00:22:38,160 Speaker 3: into the house with a smaller down payment. You can 521 00:22:38,240 --> 00:22:39,959 Speaker 3: use it in a long term loan because it's an 522 00:22:39,960 --> 00:22:42,280 Speaker 3: owner occupant property, and you can learn how to be 523 00:22:42,320 --> 00:22:44,040 Speaker 3: a landlord. You can learn how to do it. If 524 00:22:44,080 --> 00:22:46,159 Speaker 3: you make some mistakes, not a big deal, you're right there. 525 00:22:46,560 --> 00:22:48,199 Speaker 3: And it was where I sort of learned how to 526 00:22:48,240 --> 00:22:51,040 Speaker 3: do it and realized I could be a rental landlord 527 00:22:51,200 --> 00:22:53,840 Speaker 3: and we still own that property. That property that we bought. 528 00:22:54,160 --> 00:22:55,960 Speaker 3: It was worth one hundred and thirty one hundred and 529 00:22:55,960 --> 00:22:58,600 Speaker 3: fifty thousand when we bought it. Now it's two hundred 530 00:22:58,600 --> 00:23:00,720 Speaker 3: and fifty three hundred thousand bucks. You know, So it's 531 00:23:00,800 --> 00:23:03,320 Speaker 3: it's done well and it's making income and it's still 532 00:23:03,440 --> 00:23:05,399 Speaker 3: We started doing a bunch more of those after that. 533 00:23:05,840 --> 00:23:08,280 Speaker 2: Yeah, That's what I love about house hacking is that 534 00:23:08,359 --> 00:23:10,679 Speaker 2: it addressed, like at the core of that is are 535 00:23:10,720 --> 00:23:13,040 Speaker 2: you willing to do something that most folks aren't willing 536 00:23:13,080 --> 00:23:16,399 Speaker 2: to do in order to get ahead financially. It's just 537 00:23:16,520 --> 00:23:19,000 Speaker 2: an alternative way of living, and to a certain extent, 538 00:23:19,040 --> 00:23:20,399 Speaker 2: that's what it is. That's what it takes to be 539 00:23:20,440 --> 00:23:24,040 Speaker 2: a small time landlord. It is just approaching the issue 540 00:23:24,040 --> 00:23:25,960 Speaker 2: of housing from a slightly different angle. 541 00:23:26,000 --> 00:23:27,719 Speaker 1: And it can be like you think of it as 542 00:23:27,720 --> 00:23:29,520 Speaker 1: an investment, but it's also putting a roof over your head, 543 00:23:29,520 --> 00:23:31,240 Speaker 1: reducing your costs every month. I mean, it's got that's 544 00:23:31,320 --> 00:23:32,320 Speaker 1: killer double whammy going. 545 00:23:32,400 --> 00:23:35,080 Speaker 2: It's amazing. Yeah, So chat like, what is it right 546 00:23:35,119 --> 00:23:38,480 Speaker 2: now that you're looking that you're looking for, Like when 547 00:23:38,520 --> 00:23:41,080 Speaker 2: you're looking for a property. What are the factors that 548 00:23:41,080 --> 00:23:42,840 Speaker 2: you're considering, Like, is it all about the numbers or 549 00:23:42,880 --> 00:23:45,120 Speaker 2: other considerations that you're keeping in mind? 550 00:23:45,560 --> 00:23:47,240 Speaker 3: Yeah, I learned early on. I used to think it 551 00:23:47,240 --> 00:23:49,120 Speaker 3: was all about the numbers, and the numbers are important, 552 00:23:49,119 --> 00:23:50,840 Speaker 3: like and I'll talk a little bit about some basic 553 00:23:50,880 --> 00:23:53,160 Speaker 3: ways to run the numbers. But I now that I've 554 00:23:53,320 --> 00:23:55,439 Speaker 3: matured a little bit, I realized that there's sort of 555 00:23:55,480 --> 00:23:58,080 Speaker 3: like a two sides of a coin. Like you every 556 00:23:58,240 --> 00:24:00,439 Speaker 3: a good deal, it has to have some umbers that 557 00:24:00,440 --> 00:24:02,480 Speaker 3: make sense. So cash flow is a certain type of 558 00:24:02,480 --> 00:24:04,080 Speaker 3: analysis you can do. You want a certain amount of 559 00:24:04,119 --> 00:24:06,360 Speaker 3: cash flow, or you want it to cover your mortgage 560 00:24:06,359 --> 00:24:08,440 Speaker 3: and then have a certain amount of money over that mortgage. 561 00:24:08,560 --> 00:24:10,280 Speaker 3: But you also want to have a certain type of 562 00:24:10,320 --> 00:24:13,800 Speaker 3: location because the money you make in real estate is 563 00:24:13,800 --> 00:24:17,240 Speaker 3: sort of the consequence. It's the outcome, but the cause 564 00:24:17,280 --> 00:24:19,960 Speaker 3: of that, Like the core principle of real estate investing 565 00:24:20,280 --> 00:24:23,320 Speaker 3: is providing housing for someone, so someone's going to live there, 566 00:24:23,520 --> 00:24:26,760 Speaker 3: and so the location they live in, the type of 567 00:24:26,800 --> 00:24:29,560 Speaker 3: property they live in, like, those are so critical. And 568 00:24:29,720 --> 00:24:32,199 Speaker 3: I had a mentor early in my career who told me, 569 00:24:32,520 --> 00:24:34,679 Speaker 3: he said, Chad, you always want to buy properties that 570 00:24:34,760 --> 00:24:37,480 Speaker 3: have some sort of romance to them. And I was 571 00:24:37,480 --> 00:24:40,159 Speaker 3: like romance, Like what do you mean romance? Like what 572 00:24:40,200 --> 00:24:42,560 Speaker 3: are you talking about? And his point was like real 573 00:24:42,640 --> 00:24:45,600 Speaker 3: estate is an emotional either a purchase or if you're 574 00:24:45,640 --> 00:24:47,840 Speaker 3: renting a property is still it's an emotional thing, like 575 00:24:47,880 --> 00:24:50,159 Speaker 3: you're living there for an emotional reason. And yes, you 576 00:24:50,160 --> 00:24:51,960 Speaker 3: have to have a roof over your head, but if 577 00:24:52,000 --> 00:24:53,760 Speaker 3: you don't have a property that has some sort of 578 00:24:53,840 --> 00:24:55,879 Speaker 3: romance to it meaning, and it could be something simple. 579 00:24:55,880 --> 00:24:57,720 Speaker 3: It could be like, you know, you, guys, I resonate 580 00:24:57,760 --> 00:24:59,800 Speaker 3: with you that we like walkable locations, like we like 581 00:24:59,800 --> 00:25:02,119 Speaker 3: a place with a sidewalk and you know, big trees 582 00:25:02,160 --> 00:25:04,480 Speaker 3: and you can walk to a local coffee shop like that. 583 00:25:04,480 --> 00:25:07,560 Speaker 3: That's romance. Like that that idea for someone that they 584 00:25:07,560 --> 00:25:10,560 Speaker 3: can walk somewhere. For certain type of person, that's romance. 585 00:25:10,720 --> 00:25:12,399 Speaker 3: For another type of person, it might mean, Hey, I 586 00:25:12,400 --> 00:25:14,320 Speaker 3: want to live close to where I work, but I 587 00:25:14,400 --> 00:25:16,600 Speaker 3: want to live out with a two acre parcel in 588 00:25:16,640 --> 00:25:19,080 Speaker 3: the country, and that's like, that's my idea of romance. 589 00:25:19,720 --> 00:25:22,000 Speaker 3: But the principle is the same, is that you need 590 00:25:22,040 --> 00:25:25,040 Speaker 3: to buy your properties with that in mind. Like number one, 591 00:25:25,400 --> 00:25:27,320 Speaker 3: and if you do that, Like, if you buy properties 592 00:25:27,320 --> 00:25:31,119 Speaker 3: that are in demand because there's an emotional attraction to 593 00:25:31,160 --> 00:25:34,800 Speaker 3: them for some reason, then the money stuff will take 594 00:25:34,840 --> 00:25:36,640 Speaker 3: care of itself. Just for example, I have a single 595 00:25:36,680 --> 00:25:38,760 Speaker 3: family house that we used to live in, and every 596 00:25:38,760 --> 00:25:40,560 Speaker 3: time I put it on the market to rent, I 597 00:25:40,600 --> 00:25:43,080 Speaker 3: put it on Zilo and within a week I have 598 00:25:43,280 --> 00:25:46,920 Speaker 3: at least five, sometimes ten applications from people who want 599 00:25:46,920 --> 00:25:49,160 Speaker 3: to rent the property. And this is at market rent. 600 00:25:49,160 --> 00:25:51,159 Speaker 3: I'm not like, I'm not, you know, not putting it 601 00:25:51,200 --> 00:25:53,120 Speaker 3: way below market rent, like just a little bit below 602 00:25:53,200 --> 00:25:55,880 Speaker 3: market rent. And I get to choose like the best, 603 00:25:55,960 --> 00:25:58,280 Speaker 3: most qualified tenant, and they tend to stay, and they 604 00:25:58,280 --> 00:26:00,400 Speaker 3: tend to stay a long time as well. And why 605 00:26:00,480 --> 00:26:02,960 Speaker 3: is that that? That is because that property has a romance. 606 00:26:03,000 --> 00:26:05,440 Speaker 3: That property is in a neighborhood that's attractive, it's close 607 00:26:05,480 --> 00:26:07,199 Speaker 3: to things that people want to be at. And so 608 00:26:07,400 --> 00:26:10,240 Speaker 3: like that principle is something I missed early in my career. 609 00:26:10,280 --> 00:26:12,720 Speaker 3: I bought some properties with good numbers on paper, but 610 00:26:12,960 --> 00:26:15,600 Speaker 3: they were in the wrong location. They and so you 611 00:26:15,640 --> 00:26:17,879 Speaker 3: need to control the things you can control, which is 612 00:26:17,920 --> 00:26:20,440 Speaker 3: where the property is. You can't move that house at 613 00:26:20,480 --> 00:26:22,639 Speaker 3: least can't do it easily. So you want to you 614 00:26:22,840 --> 00:26:24,760 Speaker 3: you want to, you want to pick a good location first, 615 00:26:24,880 --> 00:26:26,719 Speaker 3: and then yes, learn how to run the numbers, make 616 00:26:26,720 --> 00:26:28,920 Speaker 3: sure the financing works, make sure that we can talk 617 00:26:28,960 --> 00:26:30,919 Speaker 3: about that too. But I think if you get that 618 00:26:31,040 --> 00:26:33,199 Speaker 3: idea of location and then a good property that has 619 00:26:33,200 --> 00:26:35,320 Speaker 3: a good layout, you'll you'll a lot of the other 620 00:26:35,359 --> 00:26:36,479 Speaker 3: stuff will take care of itself. 621 00:26:36,880 --> 00:26:39,399 Speaker 1: That can also reduce the hassle or right hassle factor, 622 00:26:39,400 --> 00:26:41,680 Speaker 1: which is one of the biggest reasons that people say, 623 00:26:41,920 --> 00:26:43,480 Speaker 1: yeah real estate, I don't think it's I don't think 624 00:26:43,480 --> 00:26:46,359 Speaker 1: that's for me. And I think also location can matter 625 00:26:46,520 --> 00:26:50,159 Speaker 1: not just in the monthly cash flow, but also when 626 00:26:50,200 --> 00:26:53,040 Speaker 1: it comes to appreciation of that property. Yes, but talk 627 00:26:53,080 --> 00:26:55,320 Speaker 1: to me about passive income chat. I feel like it's 628 00:26:55,400 --> 00:26:57,879 Speaker 1: it's sold one way on the internet. Passive income is 629 00:26:57,880 --> 00:27:00,440 Speaker 1: like a buzzword that people use to get people to 630 00:27:00,440 --> 00:27:02,800 Speaker 1: follow them and try to talk to them about. Hey, 631 00:27:02,840 --> 00:27:04,920 Speaker 1: here's how you can like generate thousands of dollars a 632 00:27:04,960 --> 00:27:07,600 Speaker 1: month in passive income. It's so easy, follow me. But 633 00:27:08,520 --> 00:27:13,160 Speaker 1: real estate is sure you can get passive income over time, 634 00:27:13,440 --> 00:27:15,880 Speaker 1: But you're also talking about a part time job, right. 635 00:27:15,800 --> 00:27:18,280 Speaker 3: Yeah, it is a part time job, especially early on 636 00:27:18,359 --> 00:27:21,040 Speaker 3: I mentioned earlier. It starts off like a startup company, 637 00:27:21,080 --> 00:27:23,040 Speaker 3: like a you know, a little venture capital startup company. 638 00:27:23,040 --> 00:27:25,280 Speaker 3: So it's going to take some time and effort upfront, 639 00:27:25,320 --> 00:27:28,560 Speaker 3: and I call that like your psychological down payment. Like 640 00:27:28,760 --> 00:27:30,879 Speaker 3: if you're not willing to like put that effort and 641 00:27:30,920 --> 00:27:32,920 Speaker 3: that time in upfront, real estate is not your thing, 642 00:27:33,240 --> 00:27:35,919 Speaker 3: And that's fine. There's other options, there's index funds, and 643 00:27:35,960 --> 00:27:37,800 Speaker 3: sometimes it's just the practical reason. If you have a 644 00:27:37,880 --> 00:27:40,480 Speaker 3: job that is taking like sixty hours of your week 645 00:27:40,720 --> 00:27:43,280 Speaker 3: any and having an hour of mental energy on some 646 00:27:43,400 --> 00:27:46,280 Speaker 3: other venture would like tip you over the edge, like 647 00:27:46,560 --> 00:27:48,040 Speaker 3: you don't need to do real estate like that you 648 00:27:48,080 --> 00:27:49,840 Speaker 3: have for it. Yeah, you don't have time, that's cool, 649 00:27:50,280 --> 00:27:52,159 Speaker 3: Maybe you will next year. Maybe well another time in 650 00:27:52,200 --> 00:27:55,360 Speaker 3: your life. It requires some effort upfront, and you either 651 00:27:55,359 --> 00:27:59,080 Speaker 3: need to spend time on negotiating properties, on running the numbers, 652 00:27:59,240 --> 00:28:02,080 Speaker 3: on finding good locations, on building a team, like that's 653 00:28:02,119 --> 00:28:04,440 Speaker 3: where you're going to spend your time up front now. 654 00:28:04,480 --> 00:28:06,320 Speaker 3: But the thing is, like I mentioned earlier, is that 655 00:28:06,400 --> 00:28:09,680 Speaker 3: it eventually becomes passive. Though in real estate's pretty cool 656 00:28:09,720 --> 00:28:12,399 Speaker 3: in that way, is that you put that psychological down payment. 657 00:28:12,440 --> 00:28:15,199 Speaker 3: You put that financial down payment, and then you stabilize 658 00:28:15,200 --> 00:28:17,760 Speaker 3: that property. You get a good tenant. I've had tenants 659 00:28:17,800 --> 00:28:20,320 Speaker 3: who stayed for ten years or more in some properties. 660 00:28:20,800 --> 00:28:22,040 Speaker 3: And when that happens, like. 661 00:28:22,080 --> 00:28:26,400 Speaker 4: Dream dream, It doesn't happen every day, but like it happens, 662 00:28:26,920 --> 00:28:29,680 Speaker 4: and if it does, I think about how little work 663 00:28:29,720 --> 00:28:33,040 Speaker 4: you have to do on a property if there's no turnover, 664 00:28:33,320 --> 00:28:34,200 Speaker 4: if they're not moving. 665 00:28:34,520 --> 00:28:36,520 Speaker 3: Yes, if something breaks, you have to fix it. But 666 00:28:37,080 --> 00:28:38,920 Speaker 3: when I was in Spain, I would have something break. 667 00:28:38,960 --> 00:28:41,600 Speaker 3: Even the properties I was self managed, and my tenant 668 00:28:41,640 --> 00:28:43,800 Speaker 3: had a plumber's phone number. They could call the plumber 669 00:28:44,080 --> 00:28:46,000 Speaker 3: like they could say, Hey, here's my plumber. I really 670 00:28:46,040 --> 00:28:48,480 Speaker 3: like this plumber. Call them. I'll pay for it, but 671 00:28:48,560 --> 00:28:50,400 Speaker 3: go ahead and call them if it's a problem. And 672 00:28:50,520 --> 00:28:52,440 Speaker 3: if it's you know, if it gets out of whack 673 00:28:52,440 --> 00:28:54,720 Speaker 3: and they're spending money too much money, I can try 674 00:28:54,760 --> 00:28:57,400 Speaker 3: to change that policy. But it doesn't have to be 675 00:28:57,680 --> 00:29:00,280 Speaker 3: it doesn't have to be a really huge time suck, 676 00:29:00,320 --> 00:29:01,760 Speaker 3: and you can do it from anywhere in the world 677 00:29:01,760 --> 00:29:03,560 Speaker 3: as long as you have a cell phone. And so 678 00:29:03,760 --> 00:29:05,840 Speaker 3: that's where the end game of real estate is that 679 00:29:05,880 --> 00:29:08,360 Speaker 3: it could be very passive but it also that keyword 680 00:29:08,400 --> 00:29:11,760 Speaker 3: that I mentioned earlier, it's also recurring, this recurring income. 681 00:29:11,800 --> 00:29:14,360 Speaker 3: It's a lot like your salary and so like you 682 00:29:14,720 --> 00:29:17,080 Speaker 3: used to used to having that monthly salary, and that's 683 00:29:17,080 --> 00:29:19,400 Speaker 3: a nice thing to have, and real estate can replace that. 684 00:29:19,480 --> 00:29:20,640 Speaker 3: It can be very much like that. 685 00:29:20,920 --> 00:29:24,000 Speaker 2: I like that. I've never given my tenants the number 686 00:29:24,040 --> 00:29:25,840 Speaker 2: of the plumber before, but that's a little trick I 687 00:29:25,960 --> 00:29:28,360 Speaker 2: might have to. I might have still from you until 688 00:29:28,560 --> 00:29:30,200 Speaker 2: until you get a bill and you realize that, like 689 00:29:30,240 --> 00:29:32,240 Speaker 2: they have them installed, like a bidet or something. 690 00:29:34,440 --> 00:29:36,480 Speaker 1: I remember being like six hours away one time and 691 00:29:36,480 --> 00:29:39,400 Speaker 1: there was a water issue at at one of my rentals, 692 00:29:39,720 --> 00:29:41,959 Speaker 1: and I was like, usually I'm used to going I 693 00:29:42,000 --> 00:29:44,000 Speaker 1: was used to going over there when there was an issue, 694 00:29:44,240 --> 00:29:46,640 Speaker 1: just to scope it out, get lay the land. And 695 00:29:46,680 --> 00:29:48,520 Speaker 1: that was the first time I realized I just called 696 00:29:48,560 --> 00:29:50,440 Speaker 1: the plumber. He took care of it because I was 697 00:29:50,440 --> 00:29:53,720 Speaker 1: still out of town, and the light went off in 698 00:29:53,760 --> 00:29:55,720 Speaker 1: my brain to go there. I don't even know that 699 00:29:55,760 --> 00:29:57,480 Speaker 1: I ever have to go over there again, which is 700 00:29:57,560 --> 00:30:00,240 Speaker 1: kind of crazy. Yeah, I mean I still like to 701 00:30:00,280 --> 00:30:01,800 Speaker 1: go check on it, see it once or twice a 702 00:30:01,920 --> 00:30:03,680 Speaker 1: year kind of thing. But like It's one of those 703 00:30:03,680 --> 00:30:06,280 Speaker 1: things where over time I've been able to become less 704 00:30:06,280 --> 00:30:08,720 Speaker 1: and less active, and I just remember that being this. 705 00:30:08,760 --> 00:30:10,480 Speaker 2: Like ah wow, oh my gosh. 706 00:30:10,520 --> 00:30:12,880 Speaker 1: I didn't realize that I didn't have to be this 707 00:30:13,240 --> 00:30:16,360 Speaker 1: complete active participant all the time in the property exactly. 708 00:30:16,400 --> 00:30:16,520 Speaker 2: You know. 709 00:30:16,640 --> 00:30:18,560 Speaker 3: That's that's the benefit that some people who invest long 710 00:30:18,560 --> 00:30:21,040 Speaker 3: distance have over those of us who started local is 711 00:30:21,040 --> 00:30:23,120 Speaker 3: that you have to treat it as a business from 712 00:30:23,160 --> 00:30:26,000 Speaker 3: the very beginning. Like if you're in San Francisco and 713 00:30:26,000 --> 00:30:28,560 Speaker 3: you're buying a property in Georgia, like you can't go 714 00:30:28,600 --> 00:30:30,840 Speaker 3: look at it, sorry, like it's not gonna happen, And 715 00:30:30,880 --> 00:30:33,719 Speaker 3: so it forces you to think like a business owner 716 00:30:34,040 --> 00:30:36,640 Speaker 3: as opposed to and there's nothing wrong with going to 717 00:30:36,640 --> 00:30:38,600 Speaker 3: the property and checking it out, Like I'm all for that, 718 00:30:39,000 --> 00:30:41,479 Speaker 3: especially when you're learning, especially when you're growing, especially when 719 00:30:41,480 --> 00:30:43,360 Speaker 3: you're trying to save money, Like that's cool, Like there's 720 00:30:43,360 --> 00:30:45,680 Speaker 3: nothing wrong with it. But eventually, like I think, this 721 00:30:45,720 --> 00:30:46,960 Speaker 3: is what I wrote about in the book about I 722 00:30:46,960 --> 00:30:49,360 Speaker 3: have a whole chapter on systems like that, there's a 723 00:30:49,840 --> 00:30:51,560 Speaker 3: you should think kind of like Henry Ford did when 724 00:30:51,560 --> 00:30:53,920 Speaker 3: he built the Model T and built the assembly line 725 00:30:53,960 --> 00:30:56,480 Speaker 3: like that for him, the process of building a car 726 00:30:56,600 --> 00:30:59,080 Speaker 3: became the thing that he worked on. It became the 727 00:30:59,120 --> 00:31:02,040 Speaker 3: thing he tinkered with. And you, as a real estate investor, 728 00:31:02,280 --> 00:31:04,680 Speaker 3: should think about your business as this is like a 729 00:31:04,760 --> 00:31:06,440 Speaker 3: kind of like a machine, kind of like an engine, 730 00:31:06,760 --> 00:31:09,040 Speaker 3: and you have to ticker with it. And you were there. 731 00:31:09,200 --> 00:31:12,000 Speaker 3: You're not just working in your business. You're actually working 732 00:31:12,120 --> 00:31:15,479 Speaker 3: on your business, trying to create systems and processes and 733 00:31:15,520 --> 00:31:17,880 Speaker 3: building a team. And if you do that, that's where 734 00:31:17,880 --> 00:31:19,600 Speaker 3: the good stuff happens. On the other end, that's where 735 00:31:19,640 --> 00:31:21,720 Speaker 3: you can have the benefit of the income. And yes, 736 00:31:21,760 --> 00:31:23,640 Speaker 3: you have to pay somebody to manage it. Sometimes you 737 00:31:23,680 --> 00:31:25,560 Speaker 3: have to pay a plumber who might charge more than you. 738 00:31:25,800 --> 00:31:27,520 Speaker 3: But if you treat it like a business, you run 739 00:31:27,560 --> 00:31:29,960 Speaker 3: the numbers so that you can pay people to do 740 00:31:30,000 --> 00:31:32,760 Speaker 3: those things for you, and your profit as the owner 741 00:31:32,760 --> 00:31:35,600 Speaker 3: of that business is what's left over after you pay 742 00:31:35,640 --> 00:31:37,320 Speaker 3: all those other people to do those things. 743 00:31:37,680 --> 00:31:39,880 Speaker 2: It also just comes down to what it is that 744 00:31:39,920 --> 00:31:42,320 Speaker 2: you're optimizing for. Like we kind of touched on that 745 00:31:42,320 --> 00:31:44,600 Speaker 2: there earlier, but like it makes me think about you said, 746 00:31:44,640 --> 00:31:48,000 Speaker 2: you've had tenants that have been around for ten years, 747 00:31:48,600 --> 00:31:52,200 Speaker 2: and I'm guessing you were less likely to raise the 748 00:31:52,200 --> 00:31:55,000 Speaker 2: rent dramatically on that tenant because if they're a good tenant, 749 00:31:55,000 --> 00:31:56,400 Speaker 2: you probably wanted to keep them in there. And now, 750 00:31:56,440 --> 00:31:59,600 Speaker 2: were you optimizing for the amount of cash flow that 751 00:31:59,640 --> 00:32:02,600 Speaker 2: you had by doing that? No, probably not, but you 752 00:32:02,640 --> 00:32:04,840 Speaker 2: were optimizing for what it is that you were seeking. 753 00:32:05,440 --> 00:32:08,800 Speaker 2: This is like the whole building wealth versus achieving some 754 00:32:09,120 --> 00:32:12,120 Speaker 2: sense of freedom that you talk about. But is that true? 755 00:32:12,200 --> 00:32:14,080 Speaker 3: It is true? Yeah, well, somebody's been there ten years. 756 00:32:14,120 --> 00:32:16,920 Speaker 3: I mean it's it's automatically below the market. And that's 757 00:32:16,960 --> 00:32:18,400 Speaker 3: not to say we don't raise the rents, like we 758 00:32:18,680 --> 00:32:20,480 Speaker 3: do raise it some but for it. I'll give you 759 00:32:20,560 --> 00:32:23,240 Speaker 3: a practical example. I've got a property where the tenant 760 00:32:23,600 --> 00:32:26,040 Speaker 3: was willing to renew or I I sent an email 761 00:32:26,120 --> 00:32:28,600 Speaker 3: or a text saying, hey, we'd like to renew. The 762 00:32:29,120 --> 00:32:32,120 Speaker 3: market rent right now is eighteen hundred dollars per month, 763 00:32:32,640 --> 00:32:35,200 Speaker 3: or maybe it's two market rents two thousand dollars per month. 764 00:32:35,320 --> 00:32:37,880 Speaker 3: They were paying like fifteen hundred and fifty dollars per 765 00:32:37,960 --> 00:32:40,840 Speaker 3: month like this. The rents had gone really up, really fast, 766 00:32:41,080 --> 00:32:42,680 Speaker 3: and we said we need to raise the rent some 767 00:32:42,840 --> 00:32:45,719 Speaker 3: Our insurance is going up, maintenance expenses are going up, 768 00:32:45,920 --> 00:32:47,160 Speaker 3: but we don't want to. We're not going to raise 769 00:32:47,200 --> 00:32:48,840 Speaker 3: it up to the market level. We need to raise 770 00:32:48,880 --> 00:32:51,680 Speaker 3: it by fifty bucks per month. And so that's the 771 00:32:51,800 --> 00:32:55,240 Speaker 3: kind of you know, they're still getting a better deal 772 00:32:55,280 --> 00:32:56,800 Speaker 3: than they could if they had to move somewhere else. 773 00:32:57,040 --> 00:32:59,560 Speaker 3: But we'revering, we're covering our calls. But I know lendlarders 774 00:32:59,560 --> 00:33:01,440 Speaker 3: who don't ever raise the rents at all, and that's 775 00:33:01,480 --> 00:33:03,720 Speaker 3: that's you know, that's your choice, and that that's a 776 00:33:03,720 --> 00:33:07,000 Speaker 3: different choice than if you were an institutional landlord, which 777 00:33:07,040 --> 00:33:08,920 Speaker 3: you guys know, I'm kind of like hot on trying 778 00:33:08,920 --> 00:33:11,560 Speaker 3: to say how small mighty investors I think are much 779 00:33:11,560 --> 00:33:16,720 Speaker 3: better for communities than these big institutional Wall Street landlords. Yeah, 780 00:33:16,880 --> 00:33:20,000 Speaker 3: their job is to maximize their return for their investors, 781 00:33:20,440 --> 00:33:22,200 Speaker 3: and they're gonna they're going to push the rent to 782 00:33:22,240 --> 00:33:24,040 Speaker 3: market as much as they can over. 783 00:33:23,880 --> 00:33:25,640 Speaker 2: And everything, often at the expense of the tenant. 784 00:33:25,760 --> 00:33:28,440 Speaker 3: Exactly. Yes, And so I feel like it's not The 785 00:33:28,680 --> 00:33:32,560 Speaker 3: landlord tenant relationship is often put as an adversarial relationship, 786 00:33:32,920 --> 00:33:36,200 Speaker 3: but I very very rarely felt that with my tenants, 787 00:33:36,200 --> 00:33:38,480 Speaker 3: Like I felt like I'm providing value to them, giving 788 00:33:38,520 --> 00:33:40,240 Speaker 3: them a nice home, that we care about and we 789 00:33:40,280 --> 00:33:42,120 Speaker 3: have pride in we're not going to We're not we're 790 00:33:42,120 --> 00:33:44,280 Speaker 3: not slumming that property out. We want to treat it well. 791 00:33:44,280 --> 00:33:46,280 Speaker 3: We want to treat the tenant well. And they're in 792 00:33:46,280 --> 00:33:48,800 Speaker 3: the return. They're paying rent and they're they're maintaining the 793 00:33:48,800 --> 00:33:50,360 Speaker 3: house as if it was their own. They're taking care 794 00:33:50,360 --> 00:33:53,000 Speaker 3: of it. And during COVID was one of the biggest 795 00:33:53,040 --> 00:33:55,400 Speaker 3: AHA moments for me, was like I read in the 796 00:33:55,440 --> 00:33:57,960 Speaker 3: newspapers on Wall Street Journal and all this about how 797 00:33:57,960 --> 00:34:00,720 Speaker 3: so many tenants weren't paying and how many absorial the 798 00:34:00,760 --> 00:34:04,040 Speaker 3: landlowdert tenant relationship was ninety nine point nine percent of 799 00:34:04,040 --> 00:34:06,560 Speaker 3: our tenants, we're still paying on time. A couple of 800 00:34:06,560 --> 00:34:08,640 Speaker 3: them had issues and we worked it out. They took 801 00:34:08,680 --> 00:34:11,040 Speaker 3: care of the properties. They appreciated having a home to 802 00:34:11,080 --> 00:34:13,319 Speaker 3: live in, and I appreciated them, and it was I 803 00:34:13,320 --> 00:34:16,400 Speaker 3: had never been so grateful in my life for our tenants, 804 00:34:16,480 --> 00:34:18,480 Speaker 3: and I hope they were also grateful for the home 805 00:34:18,520 --> 00:34:21,840 Speaker 3: they had, because it's a it's a mutually beneficial relationship, 806 00:34:21,840 --> 00:34:23,920 Speaker 3: and it'd have to be something that we're beating each 807 00:34:23,920 --> 00:34:25,160 Speaker 3: other other up up about. 808 00:34:25,719 --> 00:34:29,120 Speaker 1: Yeah, man, I had similar experiences. Let's talk about debt 809 00:34:29,120 --> 00:34:32,120 Speaker 1: and financing for a second chat, I mean rising interest rates. 810 00:34:32,120 --> 00:34:34,000 Speaker 1: Of course we've been talking about those over the past, 811 00:34:34,160 --> 00:34:37,239 Speaker 1: you know, eighteen months or whatever. But how have those 812 00:34:37,360 --> 00:34:40,240 Speaker 1: changed your advice to want to be real estate investors? 813 00:34:40,239 --> 00:34:43,719 Speaker 1: Have have rising rates, maybe tamp down your enthusiasm for 814 00:34:43,840 --> 00:34:45,240 Speaker 1: small mighty real estate investing. 815 00:34:45,840 --> 00:34:48,400 Speaker 3: It's just changed the approach, just to change the technique 816 00:34:48,400 --> 00:34:50,400 Speaker 3: and the way I compare it. The last you know, 817 00:34:50,440 --> 00:34:52,760 Speaker 3: we're here in twenty twenty three when we do this interview, 818 00:34:53,080 --> 00:34:56,359 Speaker 3: you know, twenty eighteen through twenty twenty two, and even 819 00:34:56,400 --> 00:35:00,239 Speaker 3: before that, this has been an unusual time historically terms 820 00:35:00,280 --> 00:35:03,000 Speaker 3: of interest rates, in terms of real estate investing, where 821 00:35:03,000 --> 00:35:04,799 Speaker 3: you could actually go out and get a two or 822 00:35:04,840 --> 00:35:07,800 Speaker 3: three percent mortgage pay retail price almost for a house 823 00:35:08,040 --> 00:35:10,640 Speaker 3: and have it cash flow like that. I just want 824 00:35:10,680 --> 00:35:13,280 Speaker 3: to get put it in perspective like that is unusual, 825 00:35:13,600 --> 00:35:16,000 Speaker 3: that's not the normal thing. That's not just to say 826 00:35:16,080 --> 00:35:17,719 Speaker 3: that it wasn't good good for us, like great, you 827 00:35:17,800 --> 00:35:20,400 Speaker 3: got to take advantage. But the way we real estate investors, 828 00:35:20,440 --> 00:35:22,360 Speaker 3: we always have to pivot, we always have to change, 829 00:35:22,360 --> 00:35:25,239 Speaker 3: We always have to adapt to the market. And I'm 830 00:35:25,280 --> 00:35:28,000 Speaker 3: going to break the real estate investing into two pieces, 831 00:35:28,040 --> 00:35:30,040 Speaker 3: like one piece is not changed at all. I don't 832 00:35:30,080 --> 00:35:32,080 Speaker 3: care what the interest rates are. The fundamentals of those 833 00:35:32,080 --> 00:35:34,600 Speaker 3: good locations that we talked about earlier, the fundamentals of 834 00:35:34,640 --> 00:35:37,719 Speaker 3: finding good sentence, the fundamentals of maintenance, like those things 835 00:35:37,719 --> 00:35:39,840 Speaker 3: are the same. The challenge, the other piece that we 836 00:35:39,880 --> 00:35:42,239 Speaker 3: have to look at now is the cost of buying 837 00:35:42,320 --> 00:35:45,680 Speaker 3: a property with a traditional financing mortgage has gone from 838 00:35:45,760 --> 00:35:48,400 Speaker 3: three or four percent up to like seven percent. And 839 00:35:48,520 --> 00:35:51,280 Speaker 3: what that does is that makes the cost of using 840 00:35:51,360 --> 00:35:53,919 Speaker 3: debt much more expensive at least go into the bank 841 00:35:53,960 --> 00:35:56,480 Speaker 3: and using debt. So how do we solve that? Like, well, 842 00:35:56,800 --> 00:35:59,160 Speaker 3: one way is you can put more money down to 843 00:35:59,239 --> 00:36:02,200 Speaker 3: me because this because your cash flow is not working 844 00:36:02,200 --> 00:36:04,520 Speaker 3: as well with a small down payment. You might have 845 00:36:04,560 --> 00:36:06,279 Speaker 3: to figure out a way to either go in with 846 00:36:06,320 --> 00:36:08,520 Speaker 3: a partner or save up more money. Maybe you have 847 00:36:08,560 --> 00:36:10,880 Speaker 3: to slow down a little bit, buy fewer properties. And 848 00:36:11,080 --> 00:36:13,040 Speaker 3: you know, I've told people like, if you've already owned 849 00:36:13,040 --> 00:36:15,880 Speaker 3: a few properties, you're and you have enough money to 850 00:36:15,960 --> 00:36:18,680 Speaker 3: even pay cash for a property, you know you're essentially 851 00:36:18,719 --> 00:36:21,680 Speaker 3: getting a seven percent return instead of paying the bank 852 00:36:21,760 --> 00:36:23,680 Speaker 3: seven percent. If you were in that kind of later 853 00:36:23,719 --> 00:36:25,400 Speaker 3: stage of your career where you're like, I don't know 854 00:36:25,440 --> 00:36:27,279 Speaker 3: that I want to pay the three percent debt off, 855 00:36:27,320 --> 00:36:29,520 Speaker 3: but I could pay cash for a new property or 856 00:36:29,560 --> 00:36:32,200 Speaker 3: put fifty percent down or something that the cash flow 857 00:36:32,239 --> 00:36:34,080 Speaker 3: can work when you make a bigger down payment. And 858 00:36:34,160 --> 00:36:36,640 Speaker 3: I'm not saying like that's what everybody should do, but 859 00:36:36,719 --> 00:36:39,080 Speaker 3: like that's one that's option A, Like you could you 860 00:36:39,080 --> 00:36:41,240 Speaker 3: can make it cash flow by putting a larger down payment. 861 00:36:41,640 --> 00:36:44,839 Speaker 3: Option B is like getting creative with your financing. And 862 00:36:45,200 --> 00:36:46,839 Speaker 3: the way I explain this is like you can look 863 00:36:46,840 --> 00:36:49,280 Speaker 3: at your financing like a toolbox, and if you're building 864 00:36:49,280 --> 00:36:51,239 Speaker 3: a house, you'd have like five or six or ten 865 00:36:51,320 --> 00:36:53,480 Speaker 3: tools in your toolbox or more right, well, when you 866 00:36:53,520 --> 00:36:55,759 Speaker 3: when you're financing houses, you don't want to just have 867 00:36:55,840 --> 00:36:58,200 Speaker 3: one hammer, Like that's what traditional financing is. I've just 868 00:36:58,200 --> 00:36:59,640 Speaker 3: got a hammer. I'm just going to use a hammer 869 00:36:59,680 --> 00:37:01,759 Speaker 3: over and over again. Well no, like why wouldn't you 870 00:37:01,800 --> 00:37:03,799 Speaker 3: use like a screwdriver and as all and these other 871 00:37:03,920 --> 00:37:06,840 Speaker 3: tools and what those other tools are are thinking outside 872 00:37:06,880 --> 00:37:09,600 Speaker 3: the box, like talking to the seller and seeing if 873 00:37:09,600 --> 00:37:12,759 Speaker 3: the seller will finance the property for you. It's called 874 00:37:12,840 --> 00:37:15,440 Speaker 3: it's called seller financing. It's not common. It's not typical 875 00:37:15,440 --> 00:37:17,520 Speaker 3: when you go through a real estate agent that the 876 00:37:17,560 --> 00:37:18,960 Speaker 3: seller is just going to say, yes, I'd love to 877 00:37:18,960 --> 00:37:20,960 Speaker 3: finance the property to you. Like, no, it's a little 878 00:37:20,960 --> 00:37:23,279 Speaker 3: different approach. You might have to reach out directly to 879 00:37:23,320 --> 00:37:25,400 Speaker 3: the seller. You might have to look for landlords or 880 00:37:25,440 --> 00:37:28,440 Speaker 3: people who are more predisposed to finance properties to you. 881 00:37:28,520 --> 00:37:30,880 Speaker 3: Like the ideal person to finance a property is a 882 00:37:30,960 --> 00:37:33,480 Speaker 3: landlord who's owned a property for like fifteen, twenty thirty 883 00:37:33,560 --> 00:37:35,680 Speaker 3: years and they're kind of tired of the landlording business 884 00:37:35,800 --> 00:37:38,720 Speaker 3: and they're ready to exit, but they like that recurring income, 885 00:37:38,800 --> 00:37:41,279 Speaker 3: remember that monthly income, and they've gotten used to that, 886 00:37:41,560 --> 00:37:44,960 Speaker 3: but they do it. Hey, I'm addicted as well, Like 887 00:37:45,000 --> 00:37:47,320 Speaker 3: I get it. But then they don't want to manage 888 00:37:47,320 --> 00:37:49,279 Speaker 3: the day to day affairs. Maybe they're getting up in 889 00:37:49,360 --> 00:37:52,080 Speaker 3: years and so them financing to you might be the 890 00:37:52,080 --> 00:37:54,160 Speaker 3: perfect solution for them, Like that's the way they can 891 00:37:54,200 --> 00:37:57,160 Speaker 3: exit the property. And so that's that's like another that's 892 00:37:57,160 --> 00:38:00,280 Speaker 3: one tool in your toolbox. You can also use private money. 893 00:38:00,360 --> 00:38:02,360 Speaker 3: The number one way I financed my deals over the 894 00:38:02,440 --> 00:38:05,799 Speaker 3: years is going to other investors and they would have 895 00:38:05,920 --> 00:38:08,560 Speaker 3: a like a self directed retirement account, or they would 896 00:38:08,560 --> 00:38:11,000 Speaker 3: set up a retirement account that had money that they 897 00:38:11,000 --> 00:38:13,840 Speaker 3: could actually loan to me as a real estate investor. 898 00:38:14,040 --> 00:38:15,560 Speaker 3: And that's not something a lot of people know about. 899 00:38:15,560 --> 00:38:18,560 Speaker 3: But if you have your own IRA that you can 900 00:38:18,680 --> 00:38:20,319 Speaker 3: choose where it's at, or if you have a four 901 00:38:20,320 --> 00:38:22,880 Speaker 3: oh one k at old employer, for example, there's some 902 00:38:22,920 --> 00:38:25,759 Speaker 3: flexibility on the custodians you could put that with. And 903 00:38:25,840 --> 00:38:28,239 Speaker 3: so my MAS strategy for me was I had a 904 00:38:28,320 --> 00:38:31,360 Speaker 3: profess old professor at Clemson University, and he had a 905 00:38:31,400 --> 00:38:33,160 Speaker 3: lot of money in a retirement account and he has 906 00:38:33,160 --> 00:38:34,919 Speaker 3: some of it in the stock market. But I taught 907 00:38:34,960 --> 00:38:36,879 Speaker 3: him how, hey, you could loan me that one hundred 908 00:38:36,920 --> 00:38:39,680 Speaker 3: thousand bucks and I can pay you seven percent interests 909 00:38:39,760 --> 00:38:41,839 Speaker 3: or ten percent interests or six whatever the interest rate 910 00:38:41,840 --> 00:38:45,640 Speaker 3: you negotiate. And so you can show other people how 911 00:38:46,040 --> 00:38:48,360 Speaker 3: they could be your bank basically be your private bank. 912 00:38:48,800 --> 00:38:51,200 Speaker 3: Or you can meet other investors at local meetups or 913 00:38:51,280 --> 00:38:52,680 Speaker 3: who would like to do that they like to get 914 00:38:52,719 --> 00:38:55,000 Speaker 3: interest and so those are just a couple of examples. 915 00:38:55,000 --> 00:38:57,320 Speaker 3: But the point is, like, if you think outside the box, 916 00:38:57,360 --> 00:38:59,120 Speaker 3: this is what real estate investors have had to do 917 00:38:59,160 --> 00:39:01,319 Speaker 3: for decades. You're gonna have to hustle a little bit. 918 00:39:01,320 --> 00:39:03,120 Speaker 3: You can have to think outside the box a little 919 00:39:03,120 --> 00:39:05,080 Speaker 3: bit and learn a few different techniques to make it work. 920 00:39:05,160 --> 00:39:07,640 Speaker 2: Yeah. Again, it comes back to how willing are you 921 00:39:07,760 --> 00:39:10,279 Speaker 2: to do the things that other folks aren't necessarily willing 922 00:39:10,320 --> 00:39:12,720 Speaker 2: to do. You got to be willing to do things 923 00:39:12,760 --> 00:39:16,759 Speaker 2: slightly unconventionally in order to get the deal right. 924 00:39:16,760 --> 00:39:18,879 Speaker 1: We want to talk about de leveraging as well. That's 925 00:39:19,000 --> 00:39:22,360 Speaker 1: kind of part of shoring up your real estate portfolio. 926 00:39:22,360 --> 00:39:23,799 Speaker 1: We'll talk about that and then just kind of like 927 00:39:23,840 --> 00:39:26,600 Speaker 1: how to get started maybe as well. We'll get to 928 00:39:26,719 --> 00:39:28,560 Speaker 1: a couple more questions with Chad right after this. 929 00:39:38,280 --> 00:39:40,800 Speaker 2: All right, we are back for the break, talking still 930 00:39:40,840 --> 00:39:43,960 Speaker 2: with Chad Carson about how you can be a small 931 00:39:44,200 --> 00:39:47,719 Speaker 2: and mighty real estate investor and schedule He kind of 932 00:39:47,760 --> 00:39:49,640 Speaker 2: hinted at alluded to this right before the break, But 933 00:39:50,080 --> 00:39:54,040 Speaker 2: de leveraging, when and how should folks out there pay 934 00:39:54,160 --> 00:39:57,160 Speaker 2: down debt on a rental property, because, like you said 935 00:39:57,200 --> 00:39:59,600 Speaker 2: earlier as well, this is it kind of goes against 936 00:39:59,719 --> 00:40:03,359 Speaker 2: the tr traditional advice, the traditional approach of most real 937 00:40:03,480 --> 00:40:05,640 Speaker 2: estate investor. You want to hang on to that leverage 938 00:40:05,680 --> 00:40:08,319 Speaker 2: as long as possible, but you've actually you have done 939 00:40:08,320 --> 00:40:10,800 Speaker 2: that before, you paid down debt, but you've also sold properties. 940 00:40:10,800 --> 00:40:13,400 Speaker 2: Can you talk about when and why you would do that. 941 00:40:13,800 --> 00:40:16,000 Speaker 3: Yeah, I think about your real estate investing as a 942 00:40:16,120 --> 00:40:19,280 Speaker 3: journey essentially, So I think I mentioned the mountain metaphor, 943 00:40:19,440 --> 00:40:21,160 Speaker 3: like when you first start as a new investor, you 944 00:40:21,239 --> 00:40:23,319 Speaker 3: sort at the bottom of the mountain, and you're going 945 00:40:23,400 --> 00:40:25,840 Speaker 3: to use certain techniques and strategies when you're new, like 946 00:40:26,000 --> 00:40:27,600 Speaker 3: you probably don't have a lot of capital. You need 947 00:40:27,640 --> 00:40:29,640 Speaker 3: more money, and so you just try to you try 948 00:40:29,640 --> 00:40:31,480 Speaker 3: to use as much debt as you can early on, 949 00:40:31,600 --> 00:40:33,720 Speaker 3: Like if you did a house sack, put five percent 950 00:40:33,800 --> 00:40:37,040 Speaker 3: down on a property like awesome, that's what you should 951 00:40:37,040 --> 00:40:39,080 Speaker 3: do early on, because you just got to get your 952 00:40:39,080 --> 00:40:41,400 Speaker 3: foot in the game. But that's that's the approach of 953 00:40:41,400 --> 00:40:43,480 Speaker 3: a starter And then you move out of the starter 954 00:40:43,520 --> 00:40:45,800 Speaker 3: phase into what I call like the wealth builder phase. 955 00:40:46,200 --> 00:40:48,480 Speaker 3: And your whole goal is a wealth builder is turning 956 00:40:48,640 --> 00:40:51,279 Speaker 3: whatever capital, whatever money, whatever wealth you have. Let's say 957 00:40:51,280 --> 00:40:53,200 Speaker 3: you have one hundred thousand bucks, turn that one hundred 958 00:40:53,239 --> 00:40:56,120 Speaker 3: thousand bucks into a million bucks. Like your goal is 959 00:40:56,160 --> 00:40:58,360 Speaker 3: to grow, grow, grow, grow, grow, and you want to 960 00:40:58,360 --> 00:41:00,360 Speaker 3: do it safely, right, you want to get up that mountain, 961 00:41:00,600 --> 00:41:02,360 Speaker 3: and using leverage makes a lot of sense in that 962 00:41:02,400 --> 00:41:05,399 Speaker 3: case as well. So you might reinvest all the cash 963 00:41:05,440 --> 00:41:08,160 Speaker 3: you make from your rental, like don't touch that money, 964 00:41:08,400 --> 00:41:10,400 Speaker 3: put it back into buying the next rental property and 965 00:41:10,400 --> 00:41:12,560 Speaker 3: the next rental property. So that's like those are the 966 00:41:12,560 --> 00:41:14,839 Speaker 3: two first two stages. But I feel like most real 967 00:41:14,920 --> 00:41:17,960 Speaker 3: estate investors get stuck in phase number two. Like all 968 00:41:18,000 --> 00:41:20,640 Speaker 3: the techniques are talking about just grow, grow, grow, grow, grow. 969 00:41:20,680 --> 00:41:22,400 Speaker 3: It's like, well, do you just grow forever? Or like 970 00:41:22,400 --> 00:41:24,560 Speaker 3: do you get into this perpetual debt religion and like 971 00:41:24,600 --> 00:41:27,560 Speaker 3: never pay debt off? Like what happens and what most 972 00:41:27,600 --> 00:41:30,560 Speaker 3: people assume going back to like the typical model is 973 00:41:30,640 --> 00:41:33,400 Speaker 3: you just buy more properties, buy more properties, buy more properties. 974 00:41:33,520 --> 00:41:35,919 Speaker 3: And what I advocate is like, when you finally get 975 00:41:35,960 --> 00:41:38,359 Speaker 3: to this point where you have you can measure your 976 00:41:38,360 --> 00:41:40,560 Speaker 3: wealth and say, let's just say you had a million dollars, 977 00:41:41,040 --> 00:41:43,640 Speaker 3: then why not start taking some of those chips off 978 00:41:43,640 --> 00:41:46,560 Speaker 3: the table by plowing back some of the profits you have, 979 00:41:46,680 --> 00:41:48,919 Speaker 3: either the cash flow from your rentals, or you could 980 00:41:48,920 --> 00:41:51,719 Speaker 3: even like let's say you bought thirteen properties and you 981 00:41:51,719 --> 00:41:54,160 Speaker 3: only needed ten, like why not sell a couple of 982 00:41:54,239 --> 00:41:57,319 Speaker 3: your properties, pay taxes on what you sold the property for, 983 00:41:57,719 --> 00:42:00,440 Speaker 3: and then plow that money back into pay off the 984 00:42:00,480 --> 00:42:03,239 Speaker 3: debt on a couple of properties. Now, stick with me 985 00:42:03,280 --> 00:42:04,719 Speaker 3: if you've never heard somebody say you should do this, 986 00:42:05,080 --> 00:42:07,840 Speaker 3: Like my business partner and I sort of stumbled into this, 987 00:42:07,960 --> 00:42:10,399 Speaker 3: but we were lucky enough to have like one hundred 988 00:42:10,440 --> 00:42:12,680 Speaker 3: thousand bucks in our bank account or like, I've never 989 00:42:12,719 --> 00:42:15,320 Speaker 3: had this happen before. This is amazing. Where did this 990 00:42:15,360 --> 00:42:17,640 Speaker 3: money come from? It was because we had been saving 991 00:42:17,680 --> 00:42:20,200 Speaker 3: our cash flow. We sold a property and this money 992 00:42:20,200 --> 00:42:22,000 Speaker 3: was sitting there, and we looked at one of our debts. 993 00:42:22,280 --> 00:42:23,960 Speaker 3: It was an older debt that we've been paying for 994 00:42:24,000 --> 00:42:26,560 Speaker 3: like ten years. It was one thousand dollars per month, 995 00:42:27,040 --> 00:42:29,200 Speaker 3: and the property had appreciated to like two hundred and 996 00:42:29,200 --> 00:42:31,000 Speaker 3: fifty three hundred thousand bucks, and so we had a 997 00:42:31,040 --> 00:42:33,480 Speaker 3: lot of equity in the property. But we looked at 998 00:42:33,480 --> 00:42:35,440 Speaker 3: that payment. We're like, we could spend one hundred thousand 999 00:42:35,440 --> 00:42:38,200 Speaker 3: bucks and go buy four more rental properties and keep growing, 1000 00:42:38,880 --> 00:42:41,640 Speaker 3: or we could pay off this debt and free up 1001 00:42:41,640 --> 00:42:44,640 Speaker 3: one thousand dollars per month. One thousand dollars per month 1002 00:42:44,680 --> 00:42:47,360 Speaker 3: is twelve thousand dollars per year, and what would we 1003 00:42:47,400 --> 00:42:49,360 Speaker 3: do there. We'd have twelve thousand dollars per year in 1004 00:42:49,360 --> 00:42:51,080 Speaker 3: cash flow, and that's like you can think about that, 1005 00:42:51,080 --> 00:42:53,880 Speaker 3: It's like a twelve percent cash on cash return. We 1006 00:42:53,880 --> 00:42:55,759 Speaker 3: would not have to grow anymore, so we wouldn't have 1007 00:42:55,800 --> 00:42:58,239 Speaker 3: any more properties with more tenants and more headaches and 1008 00:42:58,280 --> 00:43:01,719 Speaker 3: more heating and air units, and we would simplify our life. 1009 00:43:01,800 --> 00:43:04,560 Speaker 3: We'd increase our cash flow, and we'd also decrease our risk. 1010 00:43:04,640 --> 00:43:08,080 Speaker 3: Because having debt is great, it's a great tool for growing. 1011 00:43:08,080 --> 00:43:09,719 Speaker 3: But if things go badly, if you get in a 1012 00:43:09,719 --> 00:43:12,520 Speaker 3: big recession, if you have a great, you know, depression 1013 00:43:12,560 --> 00:43:15,520 Speaker 3: like we had the nineteen thirties, having debt could really 1014 00:43:15,560 --> 00:43:17,799 Speaker 3: put you upside down. Like you could owe, you could 1015 00:43:17,800 --> 00:43:20,239 Speaker 3: owe less, you could owe more than what the property's worth. 1016 00:43:20,440 --> 00:43:22,239 Speaker 3: The rents could go down. I mean, that doesn't happen. 1017 00:43:22,239 --> 00:43:23,520 Speaker 3: Its probably not going to happen, Like I don't think 1018 00:43:23,560 --> 00:43:25,640 Speaker 3: it's going to happen. But just when you start getting 1019 00:43:25,800 --> 00:43:27,960 Speaker 3: towards the top of the mountain, when you're climbing, it 1020 00:43:28,000 --> 00:43:30,520 Speaker 3: makes more sense to like thinking about not just growing, 1021 00:43:30,719 --> 00:43:33,680 Speaker 3: also thinking about income, also thinking about simplicity. So I 1022 00:43:33,719 --> 00:43:36,320 Speaker 3: feel like that's the stage where it makes sense to 1023 00:43:36,360 --> 00:43:38,239 Speaker 3: start paying off debt now, whether you pay off one 1024 00:43:38,280 --> 00:43:40,000 Speaker 3: hundred percent of your debt or you pay off like 1025 00:43:40,040 --> 00:43:42,200 Speaker 3: a few properties. You know, we've kind of gone through 1026 00:43:42,200 --> 00:43:43,719 Speaker 3: that over the year. We still have some debt on 1027 00:43:43,719 --> 00:43:47,000 Speaker 3: our portfolio, but instead of having like sixty seventy percent 1028 00:43:47,280 --> 00:43:49,480 Speaker 3: of our value of our portfolio and debt, we have 1029 00:43:49,560 --> 00:43:52,839 Speaker 3: more like fifteen percent or twenty percent right now, and 1030 00:43:53,000 --> 00:43:55,080 Speaker 3: eventually we'll be at zero percent. But like we're we're 1031 00:43:55,080 --> 00:43:56,879 Speaker 3: feeling pretty good about where we are right now. 1032 00:43:57,440 --> 00:44:00,239 Speaker 1: Yeah, you're sitting pretty And even if let's say that 1033 00:44:00,280 --> 00:44:02,640 Speaker 1: there were some predictions of like another two thousand and 1034 00:44:02,800 --> 00:44:06,000 Speaker 1: eight sort of housing recession, I don't see that on 1035 00:44:06,000 --> 00:44:08,960 Speaker 1: the horizon. But if housing prices dip like and you're 1036 00:44:09,000 --> 00:44:12,319 Speaker 1: over leveraged and your tenant isn't paying or whatever, like, 1037 00:44:12,680 --> 00:44:13,279 Speaker 1: that puts you. 1038 00:44:13,200 --> 00:44:14,040 Speaker 2: In a bind. 1039 00:44:14,320 --> 00:44:16,520 Speaker 1: And you're not in that bind, right Even if you 1040 00:44:16,520 --> 00:44:20,360 Speaker 1: your tenant or multiple tenants don't pay, you're still fine. 1041 00:44:20,440 --> 00:44:23,960 Speaker 1: And so there's like a mental ease that that creates. 1042 00:44:24,000 --> 00:44:26,600 Speaker 1: I think, what would you say, Chad to the folks 1043 00:44:26,640 --> 00:44:29,280 Speaker 1: maybe who've made it this far into the conversation. They're 1044 00:44:29,320 --> 00:44:32,240 Speaker 1: maybe fascinated by the wealth building possibilities of real estate, 1045 00:44:32,480 --> 00:44:36,760 Speaker 1: but they're also hesitant to get going because it seems risky. 1046 00:44:36,840 --> 00:44:39,840 Speaker 1: It sounds risky, like I don't know, maybe I should 1047 00:44:39,880 --> 00:44:41,920 Speaker 1: just keep tossing money into my four one K. And again, 1048 00:44:42,120 --> 00:44:44,040 Speaker 1: we talk about that all the time. We're totally down 1049 00:44:44,120 --> 00:44:46,240 Speaker 1: get the match, Like, don't forsake that real estate investing 1050 00:44:46,640 --> 00:44:48,799 Speaker 1: should be after you've done that at least. But what 1051 00:44:48,840 --> 00:44:50,439 Speaker 1: would you say to somebody who's like, I don't think 1052 00:44:50,480 --> 00:44:52,439 Speaker 1: that's for me, but it's not necessarily because I don't 1053 00:44:52,440 --> 00:44:55,160 Speaker 1: have the time or don't have the desire. It's just 1054 00:44:55,200 --> 00:44:56,879 Speaker 1: it it sounds like it's too much. 1055 00:44:57,160 --> 00:44:58,920 Speaker 3: Yeah, I would say, just take it one step at 1056 00:44:58,920 --> 00:45:00,920 Speaker 3: a time, like you don't. You don't have to make 1057 00:45:00,920 --> 00:45:03,839 Speaker 3: a forever decision with real estate investing. You can test 1058 00:45:03,880 --> 00:45:06,160 Speaker 3: it out. You can buy one property and that might 1059 00:45:06,200 --> 00:45:08,359 Speaker 3: be enough. Like you might just buy one property, take 1060 00:45:08,360 --> 00:45:10,520 Speaker 3: a break for a year or two, let it season, 1061 00:45:10,680 --> 00:45:12,200 Speaker 3: take a deep breath, see if that was a good 1062 00:45:12,200 --> 00:45:14,439 Speaker 3: decision or not, and then you can do another one 1063 00:45:14,719 --> 00:45:17,239 Speaker 3: after that. And I actually have a mentor named John 1064 00:45:17,320 --> 00:45:19,799 Speaker 3: Shab who's a guy i've followed for a long time. 1065 00:45:19,840 --> 00:45:22,120 Speaker 3: He's been investing in real estate for fifty years. He 1066 00:45:22,160 --> 00:45:24,680 Speaker 3: wrote his book that I always loved was called Building 1067 00:45:24,760 --> 00:45:28,200 Speaker 3: Wealth One House at a time, Just one house. He 1068 00:45:28,239 --> 00:45:30,879 Speaker 3: just recommends buying one house a year, one property a year. 1069 00:45:31,280 --> 00:45:33,560 Speaker 3: And if you do that, like if you just continue buying, 1070 00:45:33,680 --> 00:45:36,200 Speaker 3: just like the tortoise, not the hair, just plotting along, 1071 00:45:36,480 --> 00:45:39,520 Speaker 3: plotting along. It seems pretty small in the beginning, it 1072 00:45:39,520 --> 00:45:41,879 Speaker 3: seems like you're not making much progress, but that can 1073 00:45:41,920 --> 00:45:46,120 Speaker 3: build an enormous momentum. But it also if you you 1074 00:45:46,120 --> 00:45:47,680 Speaker 3: think it's a mistake, if you get into the game. 1075 00:45:48,080 --> 00:45:50,160 Speaker 3: I bought a property or two, this is not for me. 1076 00:45:50,880 --> 00:45:52,640 Speaker 3: You can sell the properties or you can get out 1077 00:45:52,640 --> 00:45:54,839 Speaker 3: of them. It's not gonna happen overnight. Real estate isn't 1078 00:45:54,840 --> 00:45:56,799 Speaker 3: as easy to sell as a piece of stock. But 1079 00:45:56,880 --> 00:45:59,800 Speaker 3: if you buy it correctly and you don't overstretch yourself, 1080 00:46:00,080 --> 00:46:02,279 Speaker 3: you're careful with it, it's not going to be a 1081 00:46:02,320 --> 00:46:06,800 Speaker 3: disastrous decision. Like going slowly thinking about it, being deliberate 1082 00:46:07,000 --> 00:46:09,839 Speaker 3: allows you to kind of get your feet back under 1083 00:46:09,880 --> 00:46:12,839 Speaker 3: you again, and you can pivot, you can change. But 1084 00:46:13,239 --> 00:46:14,920 Speaker 3: I have a hunch, like if you thought you had 1085 00:46:14,960 --> 00:46:16,560 Speaker 3: it if you kind of liked real estate and you 1086 00:46:16,560 --> 00:46:18,840 Speaker 3: got into it, you might you might just get addicted 1087 00:46:18,840 --> 00:46:21,720 Speaker 3: to it like I have, like drolling Matt has because 1088 00:46:22,040 --> 00:46:24,080 Speaker 3: it's got a lot of good stuff to it as well. 1089 00:46:24,160 --> 00:46:26,360 Speaker 3: And some of the negative stuff you hear up front 1090 00:46:26,719 --> 00:46:29,200 Speaker 3: is it talks people out of real estate. But real 1091 00:46:29,280 --> 00:46:31,880 Speaker 3: estate of the long run can have so many benefits 1092 00:46:31,920 --> 00:46:34,080 Speaker 3: and I'm experiencing those now. And one of the reasons 1093 00:46:34,120 --> 00:46:36,200 Speaker 3: I get out on podcasts and appreciate you guys having 1094 00:46:36,239 --> 00:46:38,200 Speaker 3: me is because I like to talk about it. I 1095 00:46:38,239 --> 00:46:40,040 Speaker 3: like to talk about the good sides of it and 1096 00:46:40,080 --> 00:46:43,000 Speaker 3: how if you get through the tough stuff up front, 1097 00:46:43,320 --> 00:46:45,680 Speaker 3: the other side of that could be an amazing change 1098 00:46:45,680 --> 00:46:47,799 Speaker 3: in your life. It gives you freedom, it gives you flexibility, 1099 00:46:47,800 --> 00:46:50,000 Speaker 3: and I have experienced that myself. 1100 00:46:50,520 --> 00:46:51,120 Speaker 2: It takes a while. 1101 00:46:51,160 --> 00:46:52,319 Speaker 1: There's like a lot of stuff you need to learn 1102 00:46:52,320 --> 00:46:54,400 Speaker 1: when you're thinking about becoming a real estate investor. One thing, 1103 00:46:54,440 --> 00:46:56,560 Speaker 1: Matt and I we've done a whole episode on screening 1104 00:46:56,600 --> 00:46:59,480 Speaker 1: tenants properly, because we think that is like ninety percent 1105 00:46:59,800 --> 00:47:02,479 Speaker 1: of the issues that you're gonna face are not having 1106 00:47:02,520 --> 00:47:05,120 Speaker 1: screened attendant thoroughly. And so if you do that you're 1107 00:47:05,160 --> 00:47:07,120 Speaker 1: way ahead of the ball game. You're gonna deal with 1108 00:47:07,239 --> 00:47:09,520 Speaker 1: far fewer the issues at a whole a lot of 1109 00:47:09,520 --> 00:47:12,320 Speaker 1: other landlords have to endure. But I love what you 1110 00:47:12,320 --> 00:47:14,400 Speaker 1: said too. One house at a time, that's a great strategy. 1111 00:47:14,480 --> 00:47:16,840 Speaker 1: Makes me think of like an athlete post games and 1112 00:47:16,880 --> 00:47:18,960 Speaker 1: I'm just taking one game at a time, and sometimes 1113 00:47:18,960 --> 00:47:20,760 Speaker 1: I just you know, Chad, you know this. You probably 1114 00:47:20,800 --> 00:47:23,200 Speaker 1: gave those interviews a football game. 1115 00:47:23,080 --> 00:47:25,160 Speaker 2: Right, Yes, you have to say that. 1116 00:47:25,280 --> 00:47:27,439 Speaker 1: But the truth is when you take it one house 1117 00:47:27,440 --> 00:47:29,200 Speaker 1: at a time, one game at a time, when your 1118 00:47:29,239 --> 00:47:32,920 Speaker 1: focus is just on the next step, you're much more 1119 00:47:33,000 --> 00:47:36,600 Speaker 1: likely to be successful than thinking about this bigger, overarching 1120 00:47:36,640 --> 00:47:38,800 Speaker 1: goal you're looking to achieve over time. It's like you 1121 00:47:39,160 --> 00:47:40,560 Speaker 1: got to take it one play at a time, one 1122 00:47:40,600 --> 00:47:42,359 Speaker 1: game at a time, one house at a time. That's 1123 00:47:42,360 --> 00:47:43,480 Speaker 1: how you're going to be successful. 1124 00:47:43,640 --> 00:47:45,759 Speaker 3: Yeah, you open up the sports metaphors, so I'm gonna 1125 00:47:45,760 --> 00:47:48,520 Speaker 3: go there as well. Quick bring it on. So, like, 1126 00:47:48,520 --> 00:47:51,040 Speaker 3: one of my favorite coaches in sports is a guy 1127 00:47:51,120 --> 00:47:53,680 Speaker 3: named John Wooden. He was a basketball coach at UCLA 1128 00:47:54,040 --> 00:47:55,880 Speaker 3: and he used to bring his all like he had 1129 00:47:55,880 --> 00:47:58,000 Speaker 3: the best players in the country. He had like Bill Walton, 1130 00:47:58,000 --> 00:48:00,319 Speaker 3: who's a Hall of Famer. He had cream abdulgent are 1131 00:48:00,560 --> 00:48:02,600 Speaker 3: and he would bring these players in before the season 1132 00:48:02,600 --> 00:48:04,800 Speaker 3: started and he would spend a whole day, like or 1133 00:48:04,840 --> 00:48:08,239 Speaker 3: two hours sitting in a room practicing, putting on their 1134 00:48:08,280 --> 00:48:12,560 Speaker 3: socks and tying their shoes. Literally they would have them 1135 00:48:12,600 --> 00:48:14,720 Speaker 3: tying the shoes. And so you just imagine this all 1136 00:48:14,920 --> 00:48:17,399 Speaker 3: all American. How frustrating would it be? Like why am 1137 00:48:17,400 --> 00:48:19,640 Speaker 3: I doing this? Coach? Like I put my shoes on 1138 00:48:19,719 --> 00:48:21,560 Speaker 3: like ten times, like what is this? And he would 1139 00:48:21,600 --> 00:48:23,359 Speaker 3: get them frustrated, and he would say, you know why 1140 00:48:23,360 --> 00:48:26,239 Speaker 3: we're doing this is because if this is something we 1141 00:48:26,280 --> 00:48:28,200 Speaker 3: can control, this is a part of the process of 1142 00:48:28,239 --> 00:48:30,560 Speaker 3: being a good basketball player. So tiny little piece, tiny 1143 00:48:30,600 --> 00:48:32,360 Speaker 3: little step. But if you if you don't if you 1144 00:48:32,400 --> 00:48:33,759 Speaker 3: have a wrinkle in your sock, or if you tie 1145 00:48:33,760 --> 00:48:35,880 Speaker 3: your shoe wrong, you're probably gonna get a blister. If 1146 00:48:35,920 --> 00:48:37,800 Speaker 3: you get a blister, you're gonna miss practice. If you 1147 00:48:37,800 --> 00:48:39,520 Speaker 3: miss practice, we're not gonna play well in the game. 1148 00:48:39,560 --> 00:48:41,040 Speaker 3: And if we don't play well in the game, we're 1149 00:48:41,080 --> 00:48:42,680 Speaker 3: not gonna win a championship. But we're not gonna do 1150 00:48:42,680 --> 00:48:44,600 Speaker 3: all those things that you want to do. And real 1151 00:48:44,680 --> 00:48:47,320 Speaker 3: estate investing is the same way that the little tiny 1152 00:48:47,360 --> 00:48:49,960 Speaker 3: baby steps are what matters. So tenant screening, I'm one 1153 00:48:50,000 --> 00:48:52,360 Speaker 3: hundred percent on board, Like if you're going to own properties, 1154 00:48:52,520 --> 00:48:54,640 Speaker 3: you got to learn how to screen your tenants. You 1155 00:48:54,640 --> 00:48:56,239 Speaker 3: got to learn how to have an application, you got 1156 00:48:56,239 --> 00:48:58,600 Speaker 3: to learn how to have those conversations. Like the little 1157 00:48:58,640 --> 00:49:01,959 Speaker 3: tiny seemed like tiny steps, they matter a lot. And 1158 00:49:01,960 --> 00:49:04,840 Speaker 3: in real estate, the part of the upfront cost of 1159 00:49:04,840 --> 00:49:07,920 Speaker 3: real estate is learning what matters and what doesn't and 1160 00:49:07,960 --> 00:49:10,680 Speaker 3: what you know. Location matters. I mentioned that earlier screening 1161 00:49:10,719 --> 00:49:13,120 Speaker 3: tens matters, and there's a bunch of other stuff in 1162 00:49:13,120 --> 00:49:14,680 Speaker 3: that matter that matter too. But like if you get 1163 00:49:14,800 --> 00:49:17,040 Speaker 3: the financing matters, and so if you if you figure 1164 00:49:17,040 --> 00:49:18,879 Speaker 3: out like a three, four or five things that really 1165 00:49:18,880 --> 00:49:21,120 Speaker 3: matter the most, and you put your socks on, you 1166 00:49:21,160 --> 00:49:23,000 Speaker 3: put your you tie your shoes as well, and you 1167 00:49:23,040 --> 00:49:25,480 Speaker 3: do it consistently, one deal at a time. It the 1168 00:49:25,800 --> 00:49:28,160 Speaker 3: end result of that is a equivalent of a championship, 1169 00:49:28,160 --> 00:49:30,640 Speaker 3: Like you will do better and you'll you'll be kind 1170 00:49:30,640 --> 00:49:33,280 Speaker 3: of surprised by it, Like you know, that's the big athletes. 1171 00:49:33,480 --> 00:49:36,000 Speaker 3: I've seen athletes who are putting for like the winning 1172 00:49:36,000 --> 00:49:38,239 Speaker 3: the British Open, and they're kind of surprised by like, well, 1173 00:49:38,239 --> 00:49:40,000 Speaker 3: wait a minute, like what I just won the British Open. 1174 00:49:40,239 --> 00:49:42,399 Speaker 3: It's because because they were like paying attention to they're 1175 00:49:42,400 --> 00:49:44,640 Speaker 3: putt they're paying attention to the process. That's that's what 1176 00:49:44,719 --> 00:49:46,719 Speaker 3: an athlete does, that's what a real estate investor does 1177 00:49:46,760 --> 00:49:47,160 Speaker 3: as well. 1178 00:49:47,480 --> 00:49:49,840 Speaker 2: Yeah, it almost surprises you that you've done well, but 1179 00:49:50,200 --> 00:49:52,480 Speaker 2: this is no surprise actually, because you've taken all the 1180 00:49:52,560 --> 00:49:54,480 Speaker 2: right steps all along the way. It's why we love 1181 00:49:54,480 --> 00:49:57,200 Speaker 2: your approach, Chad. Where is it that folks out there 1182 00:49:57,239 --> 00:49:59,359 Speaker 2: can can find your new book and how can folks 1183 00:49:59,440 --> 00:50:01,400 Speaker 2: learn more about what it is that you've got going on? 1184 00:50:01,520 --> 00:50:03,279 Speaker 3: Yeah, well, thank you again for having me, guys. And 1185 00:50:03,480 --> 00:50:05,719 Speaker 3: the book is out on Bigger Pockets. That's my publisher. 1186 00:50:05,760 --> 00:50:08,480 Speaker 3: That's a big publishing website and real estate investing website. 1187 00:50:08,480 --> 00:50:10,399 Speaker 3: But I know we'll have links in the show notes 1188 00:50:10,400 --> 00:50:12,240 Speaker 3: in different places, but if you go to Bigger Pockets 1189 00:50:12,239 --> 00:50:16,160 Speaker 3: dot com, forward Slash, Small and Mighty, that is where 1190 00:50:16,239 --> 00:50:18,720 Speaker 3: you can get it. It'll also be available the twenty 1191 00:50:18,719 --> 00:50:21,520 Speaker 3: second of August on Amazon on Audible, so anywhere else 1192 00:50:21,520 --> 00:50:23,879 Speaker 3: you get your books, Bigger Pockets is pretty cool place 1193 00:50:23,880 --> 00:50:26,200 Speaker 3: to get it because I have actually wrote some extra bonuses, 1194 00:50:26,239 --> 00:50:28,399 Speaker 3: like I wrote a bonus chapter about being a small 1195 00:50:28,400 --> 00:50:31,480 Speaker 3: and mighty investor in a changing economy, talking about these 1196 00:50:31,560 --> 00:50:34,000 Speaker 3: rising interest rates and different the way things are changing. 1197 00:50:34,000 --> 00:50:35,799 Speaker 3: How do you adjust? So something of what we talked 1198 00:50:35,800 --> 00:50:38,160 Speaker 3: about today. Wherever you get the book, I would love it. 1199 00:50:38,160 --> 00:50:40,239 Speaker 3: I'd love to hear from you once you buy the 1200 00:50:40,239 --> 00:50:42,239 Speaker 3: book and read it. You know, I'm all over the 1201 00:50:42,280 --> 00:50:45,440 Speaker 3: place online. If you just search for Coach Carson on Instagram, 1202 00:50:45,560 --> 00:50:48,439 Speaker 3: on other places, on my podcast, like I'm out there, 1203 00:50:48,760 --> 00:50:50,799 Speaker 3: just search for Coach Carson and let me know that 1204 00:50:50,840 --> 00:50:53,359 Speaker 3: you liked it. Let me know that any feedback you have, 1205 00:50:53,400 --> 00:50:55,560 Speaker 3: because I love that I wrote this book as a 1206 00:50:55,600 --> 00:50:58,000 Speaker 3: passion project, Like this was an itch I had in 1207 00:50:58,000 --> 00:51:00,960 Speaker 3: my head, and I want to see tons and tons 1208 00:51:01,000 --> 00:51:04,240 Speaker 3: of people buy their that one property, that to properties 1209 00:51:04,280 --> 00:51:06,920 Speaker 3: and have success with it. And my reward for that 1210 00:51:07,040 --> 00:51:08,360 Speaker 3: is like getting to hear your stories. 1211 00:51:08,760 --> 00:51:09,640 Speaker 2: Yeah, that's great. 1212 00:51:09,760 --> 00:51:11,839 Speaker 1: Also, well, I'm imagining a lot of how the money 1213 00:51:11,840 --> 00:51:14,360 Speaker 1: listeners are very interested in that given kind of the 1214 00:51:14,640 --> 00:51:16,520 Speaker 1: well we've talked about with real estate over the years, 1215 00:51:16,520 --> 00:51:19,960 Speaker 1: and this book really is the one to get for 1216 00:51:20,080 --> 00:51:22,399 Speaker 1: sure in our minds, if you're looking to get into 1217 00:51:22,440 --> 00:51:24,759 Speaker 1: real estate, or if you're just curious. So, Chad, thanks 1218 00:51:24,800 --> 00:51:26,920 Speaker 1: again so much for joining us today on the show Man. 1219 00:51:26,920 --> 00:51:27,759 Speaker 1: We really appreciate it. 1220 00:51:27,800 --> 00:51:29,960 Speaker 3: My pleasure has been a lot of fun. Thank you guys. 1221 00:51:30,440 --> 00:51:32,600 Speaker 2: All Right, man, it's always a good day if we 1222 00:51:32,640 --> 00:51:35,040 Speaker 2: can sit down and talk with our bud, Chad Carson. 1223 00:51:35,120 --> 00:51:38,320 Speaker 2: Almost makes it feel not like work, because it really doesn't. Yeah, dude, 1224 00:51:38,680 --> 00:51:40,120 Speaker 2: we're so fortunate to be able to do what it 1225 00:51:40,160 --> 00:51:42,439 Speaker 2: is we do, like literally to be drinking craft beer, 1226 00:51:42,440 --> 00:51:45,240 Speaker 2: talking about money, talking about real estate, talking with friends 1227 00:51:45,239 --> 00:51:47,479 Speaker 2: as well. Yeah, we've got a good made the shade. 1228 00:51:47,600 --> 00:51:49,680 Speaker 2: Incredibly fortunate for what it is that we do here 1229 00:51:49,680 --> 00:51:52,040 Speaker 2: at how to money, but specifically to real estate, the 1230 00:51:52,760 --> 00:51:55,880 Speaker 2: small and mighty real estate investor. What is it today 1231 00:51:55,880 --> 00:51:57,320 Speaker 2: that stood out to you? What was your big takeaway? 1232 00:51:57,400 --> 00:52:00,319 Speaker 1: Yeah, So I love kind of the beginning of the 1233 00:52:00,400 --> 00:52:02,520 Speaker 1: episode where we're talking about how to work backwards from 1234 00:52:02,560 --> 00:52:05,040 Speaker 1: the life you want, and that's so powerful because if 1235 00:52:05,040 --> 00:52:08,000 Speaker 1: you don't know that, you might be tempted to overindulge, 1236 00:52:08,040 --> 00:52:11,200 Speaker 1: to go so hard and then look up after that. 1237 00:52:11,320 --> 00:52:14,839 Speaker 1: Note to the Grindstone real Estate Portfolio Building Escapade you've 1238 00:52:14,880 --> 00:52:17,560 Speaker 1: been on and be like, huh, why why did I 1239 00:52:17,600 --> 00:52:20,120 Speaker 1: do that? Because now I'm so locked in, I'm working 1240 00:52:20,120 --> 00:52:22,840 Speaker 1: way more than I want to. And yeah, granted I 1241 00:52:22,880 --> 00:52:25,680 Speaker 1: have this awesome real estate portfolio to show for it, 1242 00:52:25,960 --> 00:52:28,080 Speaker 1: but I've missed out on a lot of the important 1243 00:52:28,080 --> 00:52:31,200 Speaker 1: things along the way. And so I think, Chad, we 1244 00:52:31,400 --> 00:52:34,239 Speaker 1: just jive so much on all those levels when it 1245 00:52:34,239 --> 00:52:37,040 Speaker 1: comes to a lifestyle, and yeah, what is it that 1246 00:52:37,080 --> 00:52:39,759 Speaker 1: we're pursuing keeping the end and not to overdo it. Yeah, 1247 00:52:39,760 --> 00:52:43,200 Speaker 1: it's possible to overdo it and to be too financially 1248 00:52:43,280 --> 00:52:45,880 Speaker 1: savvy with the different moves that you're making, and starting 1249 00:52:45,880 --> 00:52:47,800 Speaker 1: with the end goal in mind is so important. 1250 00:52:48,080 --> 00:52:50,280 Speaker 2: I completely agree with you. And so my big takeaway 1251 00:52:50,320 --> 00:52:52,840 Speaker 2: is going to be when we kind of touched on 1252 00:52:52,880 --> 00:52:56,279 Speaker 2: interest rates, mortgage interest rates, and how I think the 1253 00:52:56,360 --> 00:53:00,000 Speaker 2: natural tendency might be for individuals to find themselves attract 1254 00:53:00,080 --> 00:53:04,359 Speaker 2: to more and more properties that may not necessarily fit 1255 00:53:04,440 --> 00:53:07,080 Speaker 2: the bill. They might be looking further out or neighborhoods 1256 00:53:07,120 --> 00:53:11,319 Speaker 2: that aren't quite as promising, And it's in order to 1257 00:53:11,480 --> 00:53:14,439 Speaker 2: achieve the numbers that we were able to find five 1258 00:53:14,560 --> 00:53:18,359 Speaker 2: ten years ago, right, And Chad, he specifically at some point, 1259 00:53:18,400 --> 00:53:20,080 Speaker 2: I forget what it is that we even asked him about, 1260 00:53:20,120 --> 00:53:22,560 Speaker 2: but he was talking about the romance of a location 1261 00:53:23,000 --> 00:53:26,120 Speaker 2: and how you can't discount that. You can't calculate that 1262 00:53:26,440 --> 00:53:29,200 Speaker 2: on paper, but it's something that you feel. It's something 1263 00:53:29,200 --> 00:53:30,719 Speaker 2: that you see and you can kind of write down 1264 00:53:30,719 --> 00:53:33,200 Speaker 2: and be like, oh, well it's got it's walkable, or 1265 00:53:33,320 --> 00:53:35,400 Speaker 2: oh it's close to this park, or it's close to 1266 00:53:35,440 --> 00:53:37,280 Speaker 2: this brewery. Oh it's kind of a front porch. Different 1267 00:53:37,280 --> 00:53:41,279 Speaker 2: things that you know to certain individuals might appeal to them. 1268 00:53:41,320 --> 00:53:45,000 Speaker 2: But don't discount those things because again, you might be 1269 00:53:45,320 --> 00:53:47,960 Speaker 2: looking at if you are a real estate investor, you 1270 00:53:48,000 --> 00:53:49,640 Speaker 2: might be looking at some of these other properties that 1271 00:53:49,880 --> 00:53:52,920 Speaker 2: on paper, okay, this should make sense, but you have 1272 00:53:53,000 --> 00:53:56,360 Speaker 2: to look beyond capitalization rate. You have to look beyond 1273 00:53:56,760 --> 00:53:59,799 Speaker 2: can I pull in one percent of the purchase price 1274 00:53:59,800 --> 00:54:01,880 Speaker 2: of the home. It's not just about the numbers. You 1275 00:54:01,880 --> 00:54:03,840 Speaker 2: got to take all those other things into account as well. No, 1276 00:54:03,920 --> 00:54:05,080 Speaker 2: I mean it makes me think. 1277 00:54:05,640 --> 00:54:07,600 Speaker 1: The question I've always asked when I'm buying a property 1278 00:54:07,640 --> 00:54:09,080 Speaker 1: is when I live in this place and would I 1279 00:54:09,160 --> 00:54:11,720 Speaker 1: be happy to live here? And so if the answer 1280 00:54:11,760 --> 00:54:14,359 Speaker 1: to that is no, then I'm not interested. Right, If 1281 00:54:14,360 --> 00:54:18,200 Speaker 1: I'm whether just based on location, based on like the yard, 1282 00:54:18,280 --> 00:54:19,960 Speaker 1: based on the way the home looks, I want it 1283 00:54:20,000 --> 00:54:23,000 Speaker 1: to be like cute, and just if it doesn't have 1284 00:54:23,040 --> 00:54:24,840 Speaker 1: all those factors, and if I wouldn't be willing to 1285 00:54:24,840 --> 00:54:26,680 Speaker 1: live in it myself, or at least twenty five, twenty 1286 00:54:26,680 --> 00:54:28,439 Speaker 1: six year old Joel wouldn't be willing to live in it, 1287 00:54:28,520 --> 00:54:30,759 Speaker 1: then I'm not interested. Makes it tougher to list that 1288 00:54:30,800 --> 00:54:32,680 Speaker 1: property and really believe in it exactly. 1289 00:54:32,840 --> 00:54:33,080 Speaker 2: Yeah. 1290 00:54:33,120 --> 00:54:35,719 Speaker 1: If I love the location, if I love the neighborhood, 1291 00:54:35,880 --> 00:54:38,080 Speaker 1: and I, hey, it's the disc golf courses right around 1292 00:54:38,120 --> 00:54:39,799 Speaker 1: the corner and my favorite breweries right over here, then 1293 00:54:40,000 --> 00:54:43,359 Speaker 1: when I'm talking to tenants, that that enthusiasm comes through, 1294 00:54:43,480 --> 00:54:45,760 Speaker 1: and I think, especially if they don't know about the neighborhood, 1295 00:54:45,960 --> 00:54:48,400 Speaker 1: now they know, right, I'm almost like a tour guide 1296 00:54:48,440 --> 00:54:50,760 Speaker 1: of my neighborhood sometimes, Yeah, absolutely, when I'm telling people, 1297 00:54:50,680 --> 00:54:51,359 Speaker 1: big part of. 1298 00:54:51,719 --> 00:54:55,640 Speaker 2: Touting the different benefits of that specific property. But all right, well, 1299 00:54:55,760 --> 00:54:58,800 Speaker 2: let's shift to the beer. During this episode, we enjoyed 1300 00:54:58,880 --> 00:55:01,440 Speaker 2: a Zeros to Heaven. This is a West Coast ipa 1301 00:55:01,600 --> 00:55:06,600 Speaker 2: by so Apropos Casa Agria Gossa that means house. 1302 00:55:06,760 --> 00:55:09,279 Speaker 1: So look at you, your fancy Spanish. Chad would be 1303 00:55:09,360 --> 00:55:11,080 Speaker 1: so proud. He would be His life would be too. 1304 00:55:11,080 --> 00:55:12,200 Speaker 1: Who is the soot teacher? What? 1305 00:55:12,320 --> 00:55:12,400 Speaker 4: Uh? 1306 00:55:12,480 --> 00:55:13,719 Speaker 2: Yeah? Do you like this speer? I did? 1307 00:55:13,800 --> 00:55:16,440 Speaker 1: I did so. I'm not usually a West Coast IPA 1308 00:55:16,560 --> 00:55:19,560 Speaker 1: guy like it. This wasn't super West coasting, but it wasn't. Yeah, 1309 00:55:19,600 --> 00:55:20,600 Speaker 1: it was really interesting. 1310 00:55:20,640 --> 00:55:22,720 Speaker 2: It wasn't. I feel like a lot of West Coast IPAs, 1311 00:55:22,760 --> 00:55:24,759 Speaker 2: they're bitter to the max, but. 1312 00:55:24,960 --> 00:55:27,400 Speaker 1: This one was clean. Yeah, I have those piny notes, 1313 00:55:27,440 --> 00:55:30,759 Speaker 1: but it wasn't. It wasn't over the top pithy bitterness. 1314 00:55:30,800 --> 00:55:33,480 Speaker 1: And so this one was like a balanced West Coast 1315 00:55:33,800 --> 00:55:34,680 Speaker 1: and I mean it. 1316 00:55:34,680 --> 00:55:37,200 Speaker 2: Was super juicy, not overly sweet, but super juicy. It 1317 00:55:37,200 --> 00:55:39,319 Speaker 2: had some of these other notes going on versus just 1318 00:55:39,400 --> 00:55:42,840 Speaker 2: sort of the harsh bitterness. Yeah, that you can't expect 1319 00:55:43,640 --> 00:55:47,240 Speaker 2: oftentimes with West Coast IPAs. But yeah, totally agree. Very drinkable. 1320 00:55:47,320 --> 00:55:49,200 Speaker 2: Glad you and I got to enjoy this one here 1321 00:55:49,200 --> 00:55:50,759 Speaker 2: on the show. From one of the best breweries on 1322 00:55:50,800 --> 00:55:52,480 Speaker 2: the West Coast. It's a good one. We'll make sure 1323 00:55:52,520 --> 00:55:54,080 Speaker 2: to link to where it is that you can find 1324 00:55:54,160 --> 00:55:56,600 Speaker 2: Chad's book up on the website at howdomoney dot com. 1325 00:55:56,719 --> 00:55:58,720 Speaker 2: That's gonna be it buddy for this one. Until next time. 1326 00:55:58,920 --> 00:56:00,919 Speaker 2: Best friends out, Best Friends Out,