Unlocking Success in Real Estate Wholesaling: Marcus Harvey
Real Estate MythBusters: Debunking 8 Common Myths For Beginner Investors In 2024
Ever felt like real estate investing was a closed club for the wealthy elite? Think again. This episode is a myth-busting journey that brings the truth to light, proving that with a bit of knowledge and the right strategies, anyone can start building wealth through property investment. Rocky and I peel back the layers of the real estate world, showing how even those with a stable income but not necessarily deep pockets can harness the power of other people's money to launch their investment dreams. Get ready to have your views on debt flipped upside down as we discuss how it can be a tool for growth, rather than a burden.
We've all heard the horror stories of flipping gone wrong, but is that the only way to make a profit in real estate? Absolutely not. In this episode, we dissect the various pathways to profitability in property, from the critical importance of a property's condition to the unexpected tax benefits that can come from savvy management. We don't shy away from the challenges either, acknowledging that not every investment pans out, but armed with knowledge about what to look for—from the foundation to the roof—you'll be better positioned to avoid common pitfalls and recognize a golden opportunity when you see one.
But what about the day-to-day of property management? Is it as daunting as some say? We dispel the myth that you need to be glued to your phone, ready for tenant disasters 24/7. With insight into the roles of tenants and landlords, and strategies for securing those dream tenants, we show just how manageable (and profitable) this venture can be. And for those worried about the commitment, we talk about the potential for passive income and the reality of how much work it truly involves. So tune in, get inspired, and learn from our shared experiences—it's time to step into the world of real estate investing with confidence and clarity.
Podcast Intro
Ever felt like real estate investing was a closed club for the wealthy elite? Think again. This episode is a myth-busting journey that brings the truth to light, proving that with a bit of knowledge and the right strategies, anyone can start building wealth through property investment. Rocky and I peel back the layers of the real estate world, showing how even those with a stable income but not necessarily deep pockets can harness the power of other people's money to launch their investment dreams. Get ready to have your views on debt flipped upside down as we discuss how it can be a tool for growth, rather than a burden.
We've all heard the horror stories of flipping gone wrong, but is that the only way to make a profit in real estate? Absolutely not. In this episode, we dissect the various pathways to profitability in property, from the critical importance of a property's condition to the unexpected tax benefits that can come from savvy management. We don't shy away from the challenges either, acknowledging that not every investment pans out, but armed with knowledge about what to look for—from the foundation to the roof—you'll be better positioned to avoid common pitfalls and recognize a golden opportunity when you see one.
But what about the day-to-day of property management? Is it as daunting as some say? We dispel the myth that you need to be glued to your phone, ready for tenant disasters 24/7. With insight into the roles of tenants and landlords, and strategies for securing those dream tenants, we show just how manageable (and profitable) this venture can be. And for those worried about the commitment, we talk about the potential for passive income and the reality of how much work it truly involves. So tune in, get inspired, and learn from our shared experiences—it's time to step into the world of real estate investing with confidence and clarity.
Podcast Intro
What's going on world? Another episode of the real estate investing podcast, and with my guy who it's Joe's rocky glad to be here. Rocky, rocky man, I'm glad you're here too To get this episode going right here, cuz man you were just talking about. You know, everybody thinks real estate is all pretty and everything, but it's not pretty like that.
Speaker 2:There's pros and cons on everything.
Speaker 1:Yeah, so this one we're gonna talk about the real estate myth busters, you know, debunking of some common myths for beginners who are wanting to be in the real estate this year of 2024. So that's, that's we're gonna expand upon, because I Actually wanted to do this episode with you, cuz he's like you know what, when you talk about that, because everybody Think it's just a glorious thing, like oh, I got this investment property, I didn't have no hiccups, yeah, I'm good to go from here, like no, no, you have trials and tribulations when you you when you deal with, with real estate investing, and especially with your first one, cuz your first one's always your hardest always the hardest, as I tell my wife, with anything like just showing up and Starting is part of the hardest thing on anything.
Speaker 2:Yes, you know school, you know working out. Yeah, just showing up, mm-hmm, starting.
Speaker 1:Yeah. So the first one is the number one myth is it says real estate is only for the wealthy. Well, that's definitely a myth, because there's so many different programs and so many situations where you can get into real estate investing. It's not further wealthy but the wealthy themselves. I was saying this in the last podcast 90% of the wealthy do have real estate. Yep, so it's the that engine of getting wealthy. That income, that passive income, it just sky's the limit there's, there's no limit, especially when it comes into real estate.
Speaker 2:Yeah, oh yeah. Anybody can invest in real estate for sure. Yeah, as long as you. I was thinking about this on the way, as far as, like, I'm only only the wealthy, because what stops anybody from investing? It comes to like can afford it, right, am I? I'm scared to do it because of you know, the bad tenants.
Speaker 2:That's what you know the bad tenants and all this and and AC goes. I got pay on these extra expenses, something that buzz like. If you, if you know the knowledge of investing, then all of a sudden this whole thing like oh, I'm poor, I don't make enough money, turns into, hey, I can use someone else's money and Start investing in real estate. And it's you. You only that much, but you definitely a little bit using other people's money, yeah other people's money.
Speaker 2:So, like with a wealthy they're super wealthy, multi-millionaires, billinaires, and they're doing it and the person that's making you know minimal wage or not. Well, probably a little more of a wage, depending on how, what you want to do. I don't want you want to get into real estate but, like an average person making a decent income can definitely Getting real estate investing first for, like like me, just trying to get by one rental property, yeah, and then boom, you're automatically in it. Yeah, not super wealthy.
Speaker 1:You want to get there exactly. Yeah, that first property, that's, that's the main one getting the first property in line. And another thing you was talking about too right there I was thinking also it was to the point where there's yeah, like I've said this, for there's so many different options using other people's money and you know how, like the expression was always, cash is king, cash is king. Yeah, actually it's like. It's like debt is king. Yeah, that is keen. That's why the wealth of use. They use that, that debt, to get, to be in more debt, but then they make enough. They make an appassable amount of income.
Speaker 2:I remember at one point you know debt was horrible, right, no one wanted to get it yet, because you always hear stories like, oh, I'm bankrupt. I remember when the bank but bank being bankrupt was like this, they happen all the time like you getting divorced or, you know, can afford a home or whatever. Dude, I remember being bankrupt was like when people say that I was like, oh, that's horrible, that's horrible. Never want to get a debt, never want to get I don't know, I forgot. I'm like 10, 20 years ago, something like that.
Speaker 2:Yes, I started like you know debt is horrible, but now it's like you know, now that you know you're reading to it and how people are doing it these days. Like man, I bought my first home three years ago and I'm in the most debt I've ever been in my life with my. My first home is 300k around that and I'm in most the most debt in my entire life, but the same time, a net worth is way more because now my home value went up. Yeah, so I was like, hmm, I'm in the most debt in the world In my entire life, but now I have my net income is way more. So I'm like it's not part of a bad thing. But what happened? Because I needed a place to live so I did this. You know people going to debt for all kinds of all kinds of stuff. You know I bought me a new truck or a, bought me this, and that is like and it's not making them no money, no money at all Marvel, it's.
Speaker 1:It's you need. You need one, but it's starting. If you keep on adding up, it starts to be alive.
Speaker 2:Liability yep, I bought a home because I needed a home to live in. If it rental, the rental was almost nang near as much as buying a home at the point. So I bought a home and I'm not giving my money to the bank, I'm basically paying myself Because now my, my part is worth more and I'm like, dude, if I sold this today, I'm gonna be up exactly yeah yeah, I use someone else's money debt to get that money.
Speaker 2:And what I do? I just bought, I just I just pay my mortgage and now I'm up.
Speaker 1:Yeah, it's crazy.
Speaker 2:Yeah, using that as analogy of like hey, you know, you don't have to Buy everything.
Speaker 1:No.
Speaker 2:To get something.
Speaker 1:No, and then the next one. This is a good one. Right here, you need a perfect credit score. That's definitely completely wrong. You do not need a completely Perfect credit score. There's there's so many different programs. I Was studying I was actually studying getting my mortgage license, but there's just so much I'm doing, so I still I have the books and everything, but there's so many different programs and one of them Was like you had needed a 580 credit score or up. But you know but this is true though the better your credit score, the better your chances. Yeah, and it actually the in the actually lowers. If you have to, if you have to put down a Down payment, that down payment doesn't have to be drastic. Yeah, so basically, have a good credit score. It doesn't have to be perfect. But that myth buster that everything has to be perfect for your credit score to own, to own real estate it's definitely false.
Speaker 2:I would add on to that because, yeah, you having a good credit score does help as far as interest rates and stuff like that. How much you gotta put down, but like banks want to to loan you money.
Speaker 2:They want to give you the money so they can make money back off you, off of interest. Yes, so they want to. They they'll have. They have all kinds of different kind of loans, fha I was like a firearm 10 arm alone. They're like a variable interest rates or something like that. You might have to pay more upfront, maybe interest rates, not the best, but they'll give you a loan and if you're able to work it to where you buy, run a property and the tenant is paying that mortgage for you and You're not paying a dime, yeah, you know you're, you're making money right there, you're in a good situation.
Speaker 2:That's the best thing I can hope for my my thing, my first one. But, like, the thing to remember is, like banks, they want to give you money, they want to loan you money, but maybe the actual credit score plays it plays a big part in it too. But, like they also I know it's recently like they also want to know, like, okay, well, what do you do for a living, what are your other expenses? I, I let me see your credit court, let me see your credit History and see what you bought this guy's buying, um, dirt, bikes and boats and stuff like that. Liabilities, liabilities, and like I'm not gonna, I'm not gonna loan this guy 300k for a house. He might default in that thing. So that that plays a role too.
Speaker 2:Personal credit personal credit, you know, like your individual Credibility versus your actual credit to plays a little role into it too. Cuz, like you know, I remember I put my on a fresh about my first home horrible credit, whole world credit. I had less than a month as a, as a, as a nurse, and I went to the bank and I tried to get a loan for my house and they saw that I was in the health care field health care field for almost seven, eight years. At time I just graduated nursing program and then. So now I'm actually making money, but they're just like go to their, go to your work. So have them write a contract out there saying you gonna be there for a minimum of a year and how much you go Get paid in that year and we'll give you a loan.
Speaker 2:Like I said, have zero credit. My credit was horrible Zero income for a 300k home. I'd like I was making like 20, 30,000 that year, if that. And Then I got approved for almost 430, wow, and I had, like I said, not the best credit and but I had the income and the credit history cuz I, oh, most likely he'll be in that field.
Speaker 2:Yes, he's not going because he's been there for seven years. He just graduated as a nurse, so he's gonna have income, is gonna pry and he'll get raised every year, so he'll he'll looks like more of a stable, stable person versus a liability. Yeah, more secure that that look good too.
Speaker 1:Yes.
Speaker 2:So the inner can do it, but definitely helps have a better credit score getting chrome. Yeah, a good History with those.
Speaker 1:Those are some real good tips right there. You're definitely right about that. Yeah, and it's not wrong to buy, you know, cars and everything. But when you, you know, when a person has like ten cars in their driveway and they only drive two per day and the other eight, you're sitting there collecting dust. I mean that's that's what I call it like a liability and like you can't, can't drive all these cars.
Speaker 1:But you're right, having a good credit score it's gonna actually help. It's gonna help it. It's gonna help with, you know, especially right now and this this year coming up, I mean with the interest rate is slowly but surely it's going down, it's gonna trickle down. They've already, they've already forecasted and that interest rate, that credit score. That's why and not tell people was talking on the last episode with Marcus it's like it's it's good that you have a good lender, not a good lender, a great lender, because it tell you all the different options, all the different programs where you can, you can be Qualified. I mean there's there's stuff out there that we have no idea about because I mean, we're not in the field of lending, but that's that's their, their jobs, that's that's their purpose. So, definitely, having a good lender is gonna help out a whole lot to get you to your financial, to your financial goal, where you want to be, in real estate investing.
Speaker 2:There's so many different kind of loans that and programs that they can. You can qualify for that if you don't have a good lender. It's just like we're talking about a good tax person. They don't know all the tax codes and things you can deduct and and stuff you know you. You're leaving money on the table. Yeah, you are you're all, you're automatically kind of. You can't get that dream home that you want because the lender was like it's got to tell you about an FHA loan.
Speaker 1:Exactly.
Speaker 2:Oh, you know, if you come up with a little more money, we can do this. And I was like I don't have it and there's like, well, I guess you can't buy a house kind of situation. You know. I was like, see, so yeah, having a good lender for sure, yeah, and I have an income and up with those options.
Speaker 1:Options work amazing. All right, so that was Number two. Number one I say it was the real estate only for the wealthy, which is wrong. Number two Having a perfect credit score. You don't. That's wrong. Also, number three real estate is always profitable. This I thought of this when you we was talking about this, because Every real estate investment is not profitable. There's some that you should just walk away from because it just looks horrible and then when you get the numbers like they could, it's good to have somebody who's actually got into investing because, say, if you go to a property, the main things when it comes to property this is, I do know if competing in real estate Agent the roof, the roof is huge because you're gonna make sure that the roof is good To me.
Speaker 1:Besides the roof, it would probably be number one it's the plumbing. Plumbing is massive, because if you, if plumbing's all bad, you don't know what you're getting your hands into especially getting into the earth and the pipes and everything you have no idea.
Speaker 2:Yeah, it's getting up in there. Oh yeah, yeah, roof for sure, plumbing for sure, for sure. Another, another one that I didn't know until my first home was foundation. Oh yes because if you don't have a good foundation every underneath your home, I mean it can ruin everything you're plumbing your roof all the above. It just cracks one side and all that. You just. We just talked about where we get ruined, yes, yeah, except my, about my first home. It was a slab foundation. I didn't know, like slap foundation, what does?
Speaker 1:that mean.
Speaker 2:It's just there's a poor ton of concrete on the ground and put your house on it.
Speaker 2:Yep level it out, it's leveled it. Yeah, so your house is good. I was like, okay, what's the other thing the other people do? They're like it's raised, so you're, you're on, you know, on concrete Support beams or something like that. Yes, so that's what it's all. But then we think, with that shifts and stuff like that, rotting and things that saw all kinds of stuff. So it's like the fact you're on a slab, it's, it's, you know, your home's not gonna not gonna crack or anything like that.
Speaker 1:And if it does, crack it's.
Speaker 2:It's not gonna crack and fall, it's gonna. You're gonna see it and you can hopefully shift Sooner or later. But he's like yeah, you know my, I've been at my home's almost 30 something years old now.
Speaker 1:Yeah, yeah, I'm glad you said that, because there was actually a gentleman I used to work with back in the day and he used to do. He actually did, he did fix and flips and yet you did where the residency for the nurses and everything, yeah, and he actually got a hold of a property where the foundation was cracked, yep, so he got it. But he, he knew of a way how to fix the crack and it was able, he was able to do it. I was like you. I said that's even possible. He says actually, tony, there is a way. He says it just depends who you work with. He said but I've been doing this, I've been doing this for the past 30 years. I know exactly what to do. Yeah, and the last, the last thing, he told me the house looks immaculate. So I was like wow, I had no idea about that.
Speaker 2:He got, he probably got a huge discount right there. He's like, uh, you know the life picture.
Speaker 1:This is, yeah, that big old crack exactly then I know how to fix, but I'm not gonna tell you.
Speaker 1:Yeah, oh my goodness, yes. And then the next myth oh, flipping is the only way to make money. That's definitely a myth, also because you don't have to flip homes to. That's not the only option in the real estate I mean. There's, he said, getting, getting a house. You can get a house by yourself. If the thing when it comes to real estate investing is gonna be up to the person. What they want, if they want to, if they feel, if they feel that a house is gonna be a good investment, to each his own. If a person thinks that multifamily is gonna be a good investment, it's gonna be a good investment With syndication to each his own. It's just. You just want to make sure that, whatever it is, you're profitable.
Speaker 2:Yeah, that's it like another day.
Speaker 1:Yeah, you want to make sure it's profitable. You're not trying to take a loss.
Speaker 2:Yeah, you want that ROI that we turn on investment.
Speaker 1:Yes.
Speaker 2:To be in the plus.
Speaker 1:Yeah, exactly.
Speaker 2:Oh you're in the negative, like, oh, that was a bad investment.
Speaker 1:Exactly and make sure you know somebody who knows how to do the numbers. Yeah, make them not do the numbers. So, going to a property like, yeah, you, you want to, you want to pick out all the ugly and how much is gonna cost to get it repaired.
Speaker 2:Yeah, thank you for so. For me, I'm looking into investment properties and stuff like looking at houses. I Only the knowledge I have is from buying my first, my house.
Speaker 1:It's got to start somewhere, so yeah, yeah, so that.
Speaker 2:But I mean, I'm one of those people like, why do you do this? Why is this? I set what. I sat down with my loan loan office and we went through all the options and and what I can do and what I should do, and she, she let me, she kind of guided me through it. But at the end of the day I made a decision with what I wanted to do. But, like, even looking at the house, like what? Like what does the bank need to Buy the home? Yes, they need. They need to survey it and see how much it's worth. And then that was it. That was the only thing. They didn't care. They didn't care if they're, if they're, if the, if the fly fixtures and things, little things that they get fixed.
Speaker 2:No cuz they're like well, if the roof's bad and you really want it, see, if the but the, the seller will lower the price and then we'll Will, we'll give you the loan for it. Like I say, the banks want to give you that money.
Speaker 1:They want to do that.
Speaker 2:They're in the best they want to make sure that it looks good for them, not, they always say I want to make sure it's good for you.
Speaker 1:You know but, it is with them and make sure it's profitable.
Speaker 2:Yeah, they want it. When they tell you asked to sell it, thinking lower the price so you can get a better deal because you're gonna have to fix a roof in a year, they're not saying for you. They say so we don't have to. Yeah, we don't have to worry about you, like for closing his home, because now you don't like it because the roof's leaking, or you want to sell it right away. We're not gonna make money off you and stuff like that. So yeah, the banks always want their money.
Speaker 1:Yeah, they're in the business of making profit. That's all there been in the business for, yeah, so, wow, yeah, well, at least at least you, at least you know, because you know everybody has to start somewhere. So that rate there was probably. I open and you talking to your lender. I view it, I view that it's, it's not a people's like. Well, I'm about that, ask us, ask a stupid question. Oh, it's not a stupid question because you just don't know. Yeah, like you want, you want to gain the knowledge, you want to, you want to find out for yourself what you're getting into.
Speaker 2:Yeah, I've got past that, or like I still do it now by I try to work on it. It's like I try to Get past that. I don't ask a dumb question. I was like, ah, if I don't know, if I don't know something and I really want to know about it, I just asked, I'm just straight up now.
Speaker 2:Like I don't know, just that I don't know he's lenders, I don't know real estate anybody. But I was like, hey, I don't know about this. What is this lo mean? What is what is? I didn't know what are. Oh, I meant for the longest time I was talking about investment. All right, oh, return on investment. Oh my god.
Speaker 1:So little things, yes, like those, yeah, those things.
Speaker 2:and like I remember when I bought my first home I was like what's APR? You didn't know your APR.
Speaker 1:Oh yeah, oh yeah, why?
Speaker 2:What is your annual APR and what is it? You know APR monthly and all this stuff. Okay, yeah that makes a huge difference on five percent to a two percent. Yes, yeah, huge oh yeah, how much you pay and what's your? What's your rate? Yeah yeah, so yeah, no, knowing the lingo, definitely out to yeah, no one knowing that.
Speaker 1:I think one time we need one podcast. We need to do that on because there's a lot of people who do not understand the acronyms when it comes to real estate investing. There's so much, but, like the typical of the APR, the ROI, like People have no idea. Yeah, what is? What is that you're speaking for?
Speaker 2:And it makes. It makes things, makes things so much clearer to you. Think about it, you know, okay, I make sense.
Speaker 1:Yeah, you say that they just want to break it down.
Speaker 2:So they have to say the whole, yeah, whole, three words.
Speaker 1:And the next, the next myth real estate investing requires full-time commitment. The only time it's gonna require a commitment like that is if you're a real estate professionalist, and that's a whole different chapter. But that's what that's a person that's dedicated to, they own their property, they do everything with their property and they have, you know, one to a multiple properties. But that's, that's a different, that's actually a different tax Tax bracket when it comes right there, yeah, the, the government, really they're really strict on that. But if you are getting into a real estate, invest at real estate, invest investing Professionalist real estate investor, I should say, yeah, that right there, like they, if you, if you go through the guidelines, they bless you pretty good when it comes to taxes.
Speaker 2:Yeah, yeah, I have a, had a sister she was getting ready to, she was thinking about moving out of the out of state and she couldn't sell a home. But she had a nice piece of property, what they you know, three-person to bath and it was. It was out out in the country's a little bit. It was a nice little property and she could easily rent it in that area. But she's the one she's like I don't want to deal with. I don't want to do a renters and broken plumbing and all this stuff.
Speaker 2:I'm like they have people that'll do that for you. Yes, they have people that do that for you. I mean the pride and you could do yourself. If you set your home up to where everything's running great, I mean it's gonna take care itself. The the biggest thing is Is to where you're not really on the phone with your tenants and stuff. 247 this is just me coming from like maybe a one bedroom or one, a single home or do plates even a four-plex. If you get, get good tenants and you explain to them with the leases, they'll take care of it themselves.
Speaker 2:You say well most likely because I bought, I was renting a home and she's like the lawn needs to be mowed, you know, and it's gonna be water your water to pay for if you, just if you can just mow and tell me if there's any major issues. I was like, okay, I never called her once. I live in their house for like seven years. I recall the ones every month, I ever pay my, I pay my rent. She was like any issues? Like no, I was like, oh, we had a light bulb in this and that's go out, but I switched it, I a blinds broke, I switched it out and she was grateful. She, she sometimes give me a break every every couple months or whatever. I'll see you give a little break on my rent, but like I was a great that is a great tenant.
Speaker 2:You was a great but there's, you know, there's leases out there that you know, explained to people, because a lot of people think I'm, it's like a hotel I go in, I check in, I'm a live there for a little bit. If something breaks, whatever, you just call it the phone and they come face it a lot of times, you know, sometimes you just need a plunger.
Speaker 1:Yes, that's all something so small or a light bulb is out.
Speaker 2:I remember one time my my landlord called me, or she was talking to me. She's like this tenant called me at like eight o'clock at night, at nine o'clock, say her light balls went out. And she's like okay, you know, in your lease it says that you're responsible for the everyday you stuff.
Speaker 1:Yes.
Speaker 2:Did you? She thought she thought oh she, tenant, call me, live over out that the electricity go out, the power go out. She's like you know light bulbs around, all the say, all the high lights in the house around. She's like yeah, so she called. She's like go to Walmart and get light bulbs. She's like that's. She's like that's what I'm calling you. And the landlord is like you know, like you, that's, that's your responsibility. So like tenants that don't know the lease agreement and having a good tenant, it makes a huge difference.
Speaker 2:Yes, they don't know the lease because, especially if it's a home, versus like an apartment or something like that where you are multiple connected, it's so much if you can, if you could find a good tenant, they'll take care of itself. The home will take care of itself if it's a good home. If you buy a crappy Investor property is gonna come back. It's gonna bite you, like I was telling you. I knew, I knew people that bought multiple rental properties. I'm thinking, man, wow, they know they must, they're doing it right. But then I go drive by and look at the runner properties. There are one bedroom, one bath homes. They are like 300, 400 square feet in the most roughest part of the neighborhood. Everything's it's, it is overgrown, there's, you know, there's people walking around three, four o'clock in a morning around your neighborhood like those. Those properties are in the horrible neighborhood and they're probably rented it out pretty cheap, because no one's gonna rent a Place like that for more than another place up the street where it's like townhomes and stuff.
Speaker 1:Mm-hmm.
Speaker 2:Mercedes and Bentley's parked outside. Yes, oh, down, down down the block where the hood's at. So, yeah, having a good rental property off the back is it's gonna help set you up to where, like, it's gonna take care of itself.
Speaker 1:It is. It's gonna what if it's in a good area and it's kept clean, that's gonna what it's gonna attract. It's gonna attract people like that. Yep, yeah, and it's like who it is.
Speaker 2:It's like that one saying location, location location, location is key you buy I want.
Speaker 2:I went to San Diego on on the boardwalk and the place we stayed at was a little one bedroom apartment. Oh my god, they're the Airbnb was that thing. I think we paid like a thousand or I didn't pay, but it was like thousand dollars for a weekend. I'm like man, it's someone's making bank because it's booked up. If you look under the Airbnb, they're booked up for like three months straight in the summertime. You know I didn't make a thousand dollars for a couple days and they're booked up the whole time. And his little apartment was, oh my, it was so small. I was probably wasn't right.
Speaker 1:Thousand square feet.
Speaker 2:No, it wasn't, it wasn't. It was it had a Murphy bed and it didn't have a full bed. You know, and I'm like this place is Was not the best. I wouldn't pay for it. But then the location I walked, we walked out Right on the street. We're out on the beach rock. Right up front door, across the street with the beach, another 200, 100 feet to the left of us was the boardwalk. I was like dude, this is heaven.
Speaker 1:It was heaven. It's heaven right there.
Speaker 2:We walked it at night. We walked it and it was like everything was hustling bustin. It was pretty cool. But yeah. I would probably rent this again. Yeah, I'm right there. Yeah there's some like yeah, location, but yeah, the location made made pay for itself there, right there.
Speaker 1:Oh, exactly, exactly, exactly, yeah, um, yeah, no, you get a good property management so you don't have to do the full-time hustle and bustle. A good full-time Property management is what's gonna be good. Make sure you do your research. That's what me and Marcus was talking about the last podcast.
Speaker 2:Yeah, and what like your property manager?
Speaker 1:Yeah, yeah, so you don't have to do the daily activities of everything that's going on, getting Phone calls at eight o'clock at night, like, and, like you said, the tenant needs to know, like, okay, the basic, wearing stuff, like you know, a light bulb here, light bulb there, yeah, you can change that, you don't need to call me. But, but if you, but if you just want to, you know, get that passive income. And how about hire, yeah, a property management and make sure you know they're doing their job, they're doing their job. Okay, another myth you must start with a single family home. It's up to a person preference.
Speaker 2:Yeah, for sure, there's a preference.
Speaker 1:I mean, there's people who do that, there's people who do mobile homes, there's people who do multi-family Dysentication. It's gonna be up to your preference. A lot of them deals with basically of all things money, of course, but how much they have and how much you're gonna get back in return yeah, that's what. That's what investing is about, and anything you do.
Speaker 2:That's what it comes down to. I'm gonna get back on this return.
Speaker 1:Yeah, exactly.
Speaker 2:Yeah, because my whole thing is like I want to start with single family home just because that's where I want to start. But the more you look into investments, investing into real estate, the more you learn and the more the the risks and the risk versus you know the benefits, because a single family home's pre, I would say, not as risky as buying a Apartment, apartment complex, right, cuz you got to do multiple tennis, you got to deal with a lot more, a lot more people Are involved with that, versus a single family home you deal with one tenant and you, and it's easier, it's more upfront. You know you talk about things versus, like you know, I talked about, you got to talk to 10 people, that your 10 tenants, that how all have different scenarios, personality, stuff like that. So, um, yeah, I want to start off a single family home, but the more I look into it and investing, the more I'm like man, if I have an opportunity to get a foreplay, I will. I'm gonna jump on that before I jump on a single family home.
Speaker 2:Right is that the risk of benefits and how much you know you return. You can get back. It's a lot more riskier. Like I said, you know, deal with more, more tenants at once, especially your first.
Speaker 1:First your first one investment.
Speaker 2:But if you start looking to it and and they can start reading up on my what's, what's the pros and stuff for it.
Speaker 1:The pros yeah, as long as you analyze the pros and cons.
Speaker 2:Yes, you know people go to the people good casino and they throw $200, $200 down like no problem. They take every time they walk in take a rest, like I'm gonna come up and they don't, you know, and it's in a real estate, you can actually see all the cards laid out in front of you. And then you like okay, I, you know my percentage of winning is pretty damn good. I'm gonna take this versus like I'm gonna drop my down and hopefully win.
Speaker 2:Yes so that's, that's how I would take it, like I, I see all the cards out laid out and whatever Best plays the best with my hand, I'll go with it. Yeah, now a single family home.
Speaker 1:But it's gonna come down to your decision of how you want to go about To invest. That's what it's gonna come down to like. Everybody has their own niche of what's going on like. I love Me, I love multifamily. The more doors, the better it is, but you can actually get into. There's a, there's a. I always get a lot of information on syndication deals but but you said the pros and cons. That's the main thing cuz you. As long as the pros out out way, I'll weigh those cons and you're in a good spot in your comfort zone to exactly for it be comfortable Doing with.
Speaker 2:If there's someone that can deal with multiple Tennis right away, multiple problems at once, you know, go for it.
Speaker 1:Yes, and then, like that's where the seventh myth right there, all markets are the same, which we know. That's, that's false, because it's gonna. All of them do do it. They deal with different avenues. Yeah, like I know a lot of people, yet right now they're doing, they're doing mobile homes.
Speaker 2:Mobile homes. I see people doing tiny homes a lot later now. Yes, they're buying properties that you can parcel off into different housing zones within that same property.
Speaker 1:That is huge right now.
Speaker 2:And then they put tiny homes on it and then just ran out like Airbnb's or actual, like little homes, yes, and I was like dude, that's amazing, that's so smart. If you can do it that way, it's kind of like the burn method, right.
Speaker 1:Yeah.
Speaker 2:You know you get it. We have this stuff that they have. A lot of times, when you rehab it, you can actually put another home in the back because it's so big, and then you can parcel that off. They have two homes on one. Yes, I'm like that's basically the same exact thing, but you're doing multiple with little tiny homes. I'm like, dude, that's so smart. And now you know your mortgage from. You know, let's say, $2,000 mortgage. You're renting one for $2,000, now you're making some money.
Speaker 1:I know they're having like a hiccup when it comes to that. I don't know words. I heard it's here in California. They were talking about it. About that because the reason why is because it's already on a parcel. So the code you know because everything in California is about codes.
Speaker 2:Yeah, so there's a lot of restrictions in your city.
Speaker 1:City have their own restrictions.
Speaker 2:And then, and the limits have city limits in their own limit, have restrictions on itself. The state actually has limits, but it's doable, but yeah, once you know the code and you see what you can do, it's doable because you can you can have a home and then have a grand home in the back. Yes, and I mean you can do that. You might not have multiple towns or something like that yeah.
Speaker 1:You won't have a community.
Speaker 2:That's an option, that's a different avenue of it, like, oh yeah, I can do it that way.
Speaker 1:Yeah, so yeah, that myth about you know all marks the same. That's definitely false. And then number eight, last but not least, real estate is passive income.
Speaker 2:Oh, I'm gonna say yes or no.
Speaker 1:Go ahead, go ahead, yes or no, let's see.
Speaker 2:Who should I start with? Let's go with the negative. It's not passive, right, because you have to. You have to do your due diligence and to get into the market, and that takes work.
Speaker 1:Yes, it is that takes work.
Speaker 2:That takes time, studying, learning, building your confidence on actually pulling trigger on something. Even if even if you get in these syndications where someone's investing already and they're just telling you hey, give me 50,000 and I'll invest it in this, in this property, and then I'll give you your monthly dues, that sounds great. You're not doing anything, you just give me some money, it's an investment. So that's great, but at the same time, you still have to do your work. Get a vet these people, vet these companies and see if it's going to work. Look at the property that they're trying to invest in. Do all that research and see if it works for you.
Speaker 2:If it's going to be, the risk is going to be worth it for you because at the end of the day, the worst part is you lose your investment right, that's what was at.
Speaker 2:So that's a lot of work right there.
Speaker 2:And then, at the same time, it is passive, because if you do it the right way and no matter what you're doing, if you're buying a rental property, a single family home, multi-family home in these communications if you do it the right way and you set it up, you structure it the right way, you do it the right way, like we always talk about, always try to do it the right way.
Speaker 2:You want Uncle Sam and the IRS getting you or falsifying in any way, it will come back tenfold if you do it the right way. Because a good rental property, if you buy a rental property and then, like you said, if the roof the one of the main things you know needs fixing in a year and you think, oh man, I made so much money this year, hand over a fist, but the roof is going to go out, and now you said, oh, I made, like let's say you made $10,000 that year or whatever, in your rental property, but you didn't put that back into your rental property. Now that money that you made that year is going back to your rental property instead of you fixing it earlier. It could have been a lot cheaper or getting ahead of the game.
Speaker 1:Yeah, because I always say, yesterday's prices is not today's prices.
Speaker 2:Yeah, for sure, if you're fixing sooner than later like if you're in a better situation, better spot, when you actually have money fix it now, because later on you might not have that money, you might not have that time to fix it. So, like those are always bad parts about it. But what you do with the right way, though, when you have a good rental property and a good tenant, it'll just take care of itself, and then you have that owner property from five let's say, 10 years, 10 years it's paid off a 2 thirds of a third of the way, and you're like, wow, now you have a net income of $100,000 plus. When you just invested $30,000, $40,000 into his rental property, you have $100,000 plus in net worth. But then, if you sold the home, you would even make more, and then you have passive income coming in. You're going to be a lot more better and be a lot more better off just doing it the right way off the bat.
Speaker 1:And I believe also too, that it's not all passive income, because you can actually take a loss or two for the first couple of years to get where you need to be at.
Speaker 1:And like we said, like we said yeah, because it was losses and losses, and then you know what right. It makes sure you got a good tax person because you know what you can. Those, those types, those types right off yeah, that can, that can be used. And also, too, I was also thinking also that when it comes to the passive income, you want to do your numbers, but down the road, because what you do is you have a portfolio. That's what it is. You want to see how long there's people who structure, how long they want to have an investment Someone in four, three years, someone five years, someone in seven years. They want to see how much money they can make as as a as profit or for passive income and then maybe go on to something bigger. So it all deals with one. What, what type of real estate investing needs you're going to be in. You know, like I said, residential, commercial homes. It just depends on that one. So you need to find out what's going to be best for you overall.
Speaker 2:Yeah.
Speaker 1:And your plan, your angle, your angle. Yeah, remember, we talked about that, yeah, what's your angle, what's what's your plan?
Speaker 2:Like the banks will tell you that too, if you buy a very invested property yes they'll be like. So what's your plan?
Speaker 1:Yeah.
Speaker 2:That's what. The first thing is that what's your plan? You're renting it. You're going to flip it. What's your plan? So you need to know what your plan is.
Speaker 1:A good way to put it is is what's your why? Which? Why? Why? What's your why? What is your plan? As to your action, what are you going to do next? Yep, and a lot of people do it. You know, because you know the passive income, offset taxes there's many. It just deals with the person in their situation. Why? So yeah, these are the myths. So I'll break down these these eight again Real estate is only for the wealthy myth one false. Myth two you need a perfect credit score. That's definitely false. No. Myth three real estate is always profitable. That's false. Flipping is the only way to make money. That's false. Five real estate investing requires full time commitment. No, it doesn't. Number six you must start with a single family home. That's definitely a false. Like I said, it's just up to you. It's up to you and your situation, yeah. Number seven all markets are the same. That's definitely incorrect. And number eight real estate is passive, and that's false. But we want it to be passive.
Speaker 2:Oh yeah that's yeah.
Speaker 1:You like said the first year or two, you're gonna take some losses. You're gonna take some losses. So that's why you need to know Wait with the portfolio that you have. Even before, even before you sign in the dotted line that you have this property, you want to make sure that you do make some type of passive income to it.
Speaker 2:So some kind of overall goal with it because if you're yeah, you had a problem five years and you're making. Zero off it If you, if you're paying the mortgage, still something else paying the mortgage but exactly. Yeah, that's not a good.
Speaker 1:You're not trying to take losses all the time.
Speaker 2:No, that's the goal. You want to make money, Such a stuff up for the future, to have more money in your pocket. So when you retire that's that's my whole thing Like when I retire I want to have More money in my pocket.
Speaker 1:Yes, oh, yes, then I need, oh, yes, exactly live, my, my, x amount of years left. That's it.
Speaker 2:Keep my family Feel doing good, but at the same time that's it right.
Speaker 1:So if anybody wants to get a hold of me, you can go to the website. Actually, this episode, right here, I'm gonna do a, I'm gonna do a blog post for it. It's at the professionalist real estate investing calm and then, if you want to be on the podcast interviewed, go to real estate investing at the professionalist info and then, um, yeah, cuz I'm ready to take on some people. I'm like that, like I was telling Marcus before, I'm like the reason why I call this the professional estate investing podcast is to for people who know about real estate, they can bring out their gyms, you know, oh, get their exposure, everything.
Speaker 1:Like you know, cuz the the podcast and YouTube Like from from COVID on, like it's it's huge, oh, it's huge right now. It's like you're basically your own broadcast and so I even I'll even, you know, tell people. Like you know what started YouTube starter podcast. Like you know what there's information needs to be heard, like there's a lot of things that a lot of people don't know about, that they need to know about. Yeah, and it's not, it's not like it's a hidden gem, it's, it's all online, like it's all online and everyone has their own experiences exactly, and I live in experiences.
Speaker 2:Yeah, because it goes through the wrong way because you can go to anyone. Go go to anyone at a party like, oh yeah, you know, I want to invest. They're like, oh, that sounds great, I did it. I did it, you know right. But my mom and daddy gave me 200k to start. I'm like that's nice, that's what a blessing. I had a go to school, get a good job, save up money and now I barely have enough. But I'm gonna do it.
Speaker 1:Yes.
Speaker 2:Probably too. Yeah, so it's, everyone has their own way. Hey, you know what? Maybe that person I had 200k had some good insight. He's like yeah exactly. This, who I talked to this, who I talked to you. Oh, sweet, you know.
Speaker 1:Oh, what did I always say? I haven't told you. That's it. It only takes one person. It takes that one right person to change, that can change your life, change life. So world, that's it. Just want to let everybody know. Stay blessed up. 2024. Here we come, all right peace.