EP #11 - These Real Estate Myths are Holding You Back

Jacob and Mike dive into debunking common real estate myths, encouraging listeners to break free from limiting beliefs. They challenge notions like needing extensive capital or expertise, emphasizing the value of building a team and efficient time management. Closing with motivational messages, the hosts inspire listeners to embrace mistakes, prioritize financial freedom, and leverage their unique qualities for success in real estate investing. This episode is a concise guide to dispelling myths and kickstarting a journey toward financial freedom.

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Website: https://themagnogroup.com/
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Transcript

Nancy: 0:00

This is the Financial Freedom Fighters Podcast

Jacob: 0:13

Welcome everybody to the financial freedom fighters podcast. This is the first episode of 2024 and I'm pumped to be here. Happy new year, everybody. Happy new year, Mike. How's it going, Mike?

Mike: 0:28

Jacob, happy new year brother. things are good. Things are good. You know, it's winter now here in Cleveland. So it's cold little bit of reality check as you know, I was in florida, uh for about a week and a half at our At our humble abode down in Southwest Florida. And it was, sunny for the most part. And we swam every day in our nice heated pool. And so it's, uh, you know, tough, tough reality check coming back to Ohio, but, uh, you know, want to get back to the people, right? We've got, uh, we've got some good conversations we want to have in 2024. Um, I know we just crossed over that 500th download. And, uh, I know I put us on blast, uh, last week on Insta. I said, we're going to do 10, 000 downloads this year. So it

Jacob: 1:07

I saw that. I saw that Mike. And at first I was like, that's a big number. And I don't know if we're going to hit that. But then I said, you know what? That's a, that's a limiting belief. That I have about our abilities and the heights that this podcast can reach. And that's actually really relevant for the episode today, because that's exactly what we want to talk about. We want to talk about the myths, the limiting beliefs, you, the listener, if you're, if you're tuning in, you're obviously very motivated. You're either, an early investor, or you're somebody that's thinking about jumping into the investing market. And there's something inside you, maybe mentally. That's just blocking you that's stopping you from wanting to invest or thinking that you have the abilities or the capabilities to invest. And that's exactly what Mike and I want to break down today. I'm a relatively new investor. Mike himself has been investing for a few years, but over the course of our time investing, we've certainly made a ton of mistakes. We certainly had to overcome a lot of limiting, limiting beliefs ourselves to succeed. And so. We just want to talk about that today. It's the beginning of the year. I'm sure you have goals, uh, kind of across your entire spectrum of your life. And I'm sure you have some real estate goals today. Maybe that goal is to jump in and purchase that first rental property. And that's going to be both. A practical effort, but it's also going to be a mental effort for you to transform yourself into the person that is able to take that level of risk that is able to make that type of move. So before we kind of jump in, Mike, do you want to talk a little bit about the, the myths and limiting beliefs?

Mike: 2:48

Yeah, absolutely. we, we all have limiting beliefs in our life, right? And for me personally, I mean, I I've been through it. I've been through several phases. since I got into real estate back in 2016, you know, I originally got into the, the thought that I just wanted to replace the income that I had for my previous job. Which was, you know, 000 a year. And, um, I just never thought that I would get to a level that I'm at today. And then, looking forward, it's like, wow, there are other levels still to go that are Easily achievable. easily is probably not the right kind of adjective, but I'm at a point that I couldn't have imagined in 2016 and as we enter 2024, so for those, you know, for everyone out there listening, it's like, you know, we can do this. You can do that too.

Jacob: 3:36

I'm reading the gap in the game by Dan Sullivan the concept of the gap in the game is we're never satisfied as individuals because we're always measuring ourselves against a moving target, against an ideal. We don't have this concept of enough, like you were talking about in the small and mighty investor. So as soon as you hit the goal, the goal moves. And so you were always, always in on this, I believe the term is hedonistic treadmill of just always moving the target on yourself and then never actually feeling satisfied. That's being in the gap, right? The gap is saying, Oh, I want to get to 10 units, but you only have four. And so you're unsatisfied because you haven't yet hit that goal. That's being in the gap, but the being in the gain is always measuring backwards, always measuring yourself against where you were. So being in the game is saying I have four units. I have four units. Think about everything that it took for me just to purchase that first rental property. Now I have four, and so you have to be more in the gain is obviously the kind of message of the book, but. For you, the listener, just think about everything that you've overcome in your life, how, how many strides you've kind of taken in whatever aspect of your life that you've, you've, you've kind of made those gains and you can do that in real estate. There are so many limiting beliefs and so many just flat out myths that are stopping you from taking that leap. But let's just jump right into some of these and we'll kind of like break these down systematically. One by one, I'll start with the first one, Mike real estate. So this is a myth. Real estate is only for the wealthy. And this is actually one that I held deeply. I was born and raised in San Francisco, California. My parents weren't real estate people. They obviously had the single family home that we lived in, but they weren't buying properties, didn't have multiple properties. And the only people I knew that did that were extremely wealthy people because the real estate in California, for as long as I can remember was extremely expensive and said, Oh, that's just not something that I can do, you know, coming from my background. So I'm just not going to do it. I didn't think about it at all. I just kind of wrote it off as something I wouldn't participate in. And this is just patently false, right? irrespective of where you live in San Francisco, LA, Seattle, New York, wherever, if you live in these expensive markets, there are markets all over the country that you can actually afford to invest. And people just don't actually think about it. Cleveland, Ohio, for example, right where the majority of my portfolio sits. You, you don't have to invest where you live and that opens up so many barriers for you. And so real estate is not only for the wealthy. And I think that's a really bad thing to believe because it's a powerful asset class. Even building a portfolio of small single family homes in the Midwest. Over time can have dramatic impacts on your financial health and your financial freedom, your financial wellbeing. So it's the belief or the myth that you shouldn't do it at all because you think you have to be super wealthy can actually prevent you from being wealthy. And so this one is just patently false and I'll pass it to you, Mike. Like you, I'm sure you've heard this one before.

Mike: 6:50

Oh, I mean, it's, I grew up this, I mean, just like, just like you, I grew up very, uh, blue collar. Um, you know, I've said this before. I was the first person, not the first person to go to college in my family, but the first person to actually graduate from a university. None of my family had, I mean, yeah, they had, you know, my grandparents had the home that they lived in and raised their, you know, my dad and his siblings in and, um, you know, my parents had their houses that they lived in, but no one had rental properties. Rental properties were for rich people, right? Like that was a thing. And then to, you know, for me personally, and I've talked about this, I'm, I'm an open book when it comes to this kind of stuff. Um, the, you know, the, the market crash in 2008, I mean, it, it stung me hard. Um, cause I had, I was, I owned my primary residence at the time and, you know, it went down in value by like 60 percent overnight. And so I thought, well, real estate, that's a terrible idea. And I just never, I never, uh, I, I, that myth then shut my brain off to the concept or the idea of it. And it wasn't until much later that. I got into the real estate industry in sales and then started actually re educating myself and seeing the concepts play out in real life to understand the power that came from real estate and the way that you can, you can build a small portfolio and have, you know, the. The, the small portfolio of paid off properties or, or low leverage properties over a 15 or 20 year period that can really be a powerful tool for people in the future.

Jacob: 8:27

yeah, absolutely. And. One of the concepts, like one of the first concepts I was kind of introduced to me, I think they talk about this in, in rich dad, poor dad was just the idea that, yeah, I think, I think Robert Kiyosaki his first real estate purchase ever was like a small single family home in Portland, Oregon at the time. And he said that he made a whopping 40 bucks in cashflow on that thing. But over time the property appreciated, he was able to sell it. 1031 it into a bigger property and that house turned into. Uh, an apartment building with literally that house turned into apartment building, just rolling forward those gains. So just don't under value the impact that a single property can have. If you are educated, if you are diligent, if you are making the right moves and you're staying consistent in this game. So real estate is not only for the wealthy, right? But it can lead to you being wealthy over time. If you just get started, we'll roll onto the next one. This is a myth that I personally. Hate hearing, but it's the idea that you can time the market that I'm just waiting for the crash because the real estate crash is coming. They say, and so for me, I just hate hearing this one because timing the market, the real estate market, the stock market, any type of timing, the market is just a fool's errand. It's just a fool's errand. Anyone that tells you that they know when the market is going to crash. They're just, they're lying to you. There's actually no way to know it. There's brilliant economists that have no way of actually being able to predict something like this. So this random YouTuber claiming that there's going to be a crash has no idea, right? They just don't have any idea. And what's really dangerous about this is how long has the crash been supposed to be coming? It for, for how long it's, it's been forever since the crash is supposed to have, have happened. And all that time you could have been getting cashflow. You could have been getting massive, massive appreciation. You could have been building on top of your real estate knowledge and your, that comes only with being an active investor, right? You can only do so much education when you're not in the game, right? So you're missing out on all the gains of actually being an active investor and you're just waiting for a crash.

Mike: 10:42

Yeah. The, the, the thought that I'll, that I give people when they tell me that they're waiting for the next crash is if you look back at, the economy of the United States and, and if you look at the last six recessions, There's only been one recession where houses, the housing values went down and that was the 2008, 2009, you know, the, the subprime mortgage crisis and every other recession that we, that. You and I aren't that old. I mean, I've been, you know, so every, every recession that our parents have seen, the prices didn't go down, the prices just went up,

Jacob: 11:15

you believe in the long term fundamentals of real estate, which I assume you do, cause you're listening to this podcast, Then timing, the market, it shouldn't be a factor, right? There is a massive housing shortage and people always need a place to live. There are tailwinds behind the real estate industry, long term tailwinds. So don't wait to time the market. Just know how to identify deals that are good in this market, any market, and then Just buy, just buy. So we'll move on to the next one. There are some limiting beliefs that are going to prevent you from buying real estate, but there are also some limiting beliefs or myths that are going to set the wrong expectations for you as an investor. And Mike and I want to break those down too, because I believe it's very harmful to set the wrong expectations about what being a real estate investor is. And if you have the wrong expectations going into it, and then you. You know, those expectations are met, then you might fold really quickly. I forgot what the status, I heard this, but there's something crazy, like a large percentage of new real estate investors kind of just get out really quickly, right? Because they kind of, they, they realize, Hey, this is not what I signed up for. And they kind of just like bounce out and that's, that's sad, right? Because obviously. We know, and we can get into this probably later in this episode or for other episodes, no rental property is perfect, right? There's just, it just doesn't happen. And so you're going to have, you're going to take some licks in real estate. You are, but it's going to be worth it over the longterm. So the myth specifically is the idea that real estate income is passive income. And so this is also unfortunately not true. And you know, bigger pockets and all these real estate. Influencers and things like that, just because it's good SEO and it's good branding and it's good marketing. People want to believe and they want to like find passive income. And unfortunately, real estate is just not passive. It's going to take work. It's going to take work to. Acquire the property, find the property. It's going to take work to property manage. Even if you have a property manager, you're going to have to oversee the property manager, you're going to have to make a ton of decisions about the property, and that's never going to stop. That's you're, you're going to have to make decisions about, Hey, should I sell this property? It's not performing the way that I think, should I roll this into another property? You're going to actively, you know, manage your portfolio and things like that. So it's just not passive, but what I will say is it's more passive. Then your active job for sure, for sure. So the pursuit of real estate, one, you have to understand it's a long term game, This is not a get rich quick team to, you have to understand that you're, there's work involved and you have to be mentally prepared for the work involved. And if you're not gonna, and you're not prepared for the work involved, then maybe active real estate ownership is not necessarily for you. And there's ways we had a podcast. Uh, with Jim Manning and he helps people invest passively in real estate, truly passively in their syndications and things like that. but you have to know that real estate itself is not passive and we have to set that expectation for you. So you're prepared, but Mike, what do you have to say about the passive income,

Mike: 14:32

there's degrees to passive income, right? What's most passive, uh, maybe a dividend from a stock, right? Like that's probably the most passive income you can find, um, real estate. There are degrees of passivity to it, you know, uh, what you and I do, the, the long term rental investing, and then, you know, I do have one short term rental, um, it's not that passive. Well, I self manage, right? So, it's definitely not passive for me. For you, it's still not passive because you're managing the manager. Right. Or managers that you have in your portfolio, um, you have to make decisions on repairs, CapEx potentially, uh, you have to make, you may, uh, I don't know how involved you are when the decision making process, when it comes to a new tenant, or do you, if you leave that completely up to your manager, I'm not sure, but these are all things that everyone has to take into consideration when they want to get into this, that there will be some decisions to be made. Now, it certainly can be built into a much more passive activity, right? But for those who haven't gotten started yet, it's going to be very active until you've got your, until you close on that first property, until that first tenant is, and you've got that first rent check to hit your account. Minus your expenses, that two or three or 400 that hits your account, then it's not, you know, you've got to, you have to take some action to get to that point

Jacob: 15:57

You have to ask yourself, right? Yes, there's more work, but there's reason for that. It's incredibly easy. I can go buy a bunch of shares of Johnson and Johnson, get a dividend. That dividend is going to be paltry unless I'm plowing a ton of money into Johnson and Johnson, because it's easy. Anyone could do that. Why, why would I get paid a ton of money investing in Johnson and Johnson on a dividend when anybody can go do that? Not everybody is going to go and buy a rental property and manage it and hold it for a long time and do what's required to hold it for a long time. So there's naturally going to be more profit coming from that activity because there's just more work involved. So yes, there's more work, but that also means that there's more profit. And that is why people invest in real estate. But again, with this episode, we want to break down these myths to set you up for success as you look to start your real estate investing journey. So I'll pass it to you for the next one, Mike. We touched on this a little bit, but the myth that real estate is a fast way to build wealth. What do you think about that one?

Mike: 16:55

so, I mean, yes. Are there gonna be people out there who do, do this and, and get lucky and strike gold and, and do something really good and they can build up some wealth quickly? Yes. But if you truly want the. Generational wealth, I guess is the best terminology for it, then. Yeah, it's going to take time, it requires steps. You there, you know, you have to be in some type of active income to then reposition that income to then invest in real estate. Like, I have, what, between, um, the Florida property, the long terminals I have here in Ohio, the stuff I partnered with my dad on, we've got, I think, nine doors now, right? It's taken us three years to buy nine doors,

Jacob: 17:38

Yeah, yeah, absolutely. And so listen, I, I was actually, I'm working on this free kind of training webinar for, people that want to get into real estate investing. And I was just very simply kind of modeling out what does it look like to get to 10 K a month in passive income. And I compared two different approaches, right? Real estate. So what we do and just pure, a pure stock market kind of approach, right? I just compared those two things. And so I just modeled out a scenario. If you want it to pull 10, 000 a month, 120, 000 a year out of your investment portfolio, using the 4 percent rule, which is, you know, the rule of thumb when it comes to the stock market, you'd have to have a 3 million stock portfolio. To be able to pull out 10, 000 a month. If you're starting from zero and you're contributing a decent amount into that stock portfolio, 3, 000 a month is what I input into this model. It's going to take you 26 years to get to 3 million, 26 years of investing in the S and P 500, 3, 000 a month, reinvesting everything. It's going to take you 26 years. Now I modeled a scenario with real estate and I was very modest, right? I said, you're going to do the same 36, 000 a year. You're going to buy a property. I put in a 7 percent cash on cash return, right? A very realistic return. And I said, every single year, you're going to do the 36 plus any cashflow and you're going to reinvest it. And then you'll get a slightly bigger property the next time. And you'll, you'll still get that 7 percent return. So I did that. I modeled that out, obviously modeled in some rent increases and things like that, which will boost the cashflow. And that modeled out to get to the same 10, 000 a month, 15 years, 15 years. So when we say that this is not going to be fast, we mean that we mean that it's not going to be fast, but it's 11 years sooner on the conservative side than just purely taking a stock 401k approach. And that's huge. That's what we're trying to kind of instill in you is that how, how much is 11 years of your life worth? That should be worth a lot, right? That should be worth a lot. And I put very conservative assumptions, right? A 7 percent cash on cash return. What if you get 8 percent cash on cash return or 9 percent or a 10%? What if instead of 36, 000, you can invest 50, 000 because you're married and you can split that. And you know, so you can actually do these things. I believe in the scenario that I modeled for myself, that it's going to be 10 years for me personally. Right. but it's still going to be 10 years. But to me, that is so valuable to know that I'm implementing and following a plan and a strategy that's going to bring me to work optionality so much sooner than a path I was otherwise on. And that's what we want to stress here. It's not fast, but it's faster than what you're currently doing. Probably, probably significantly. So, and that's what we have to kind of like hammer home here. So. I don't like when I hear investors saying. Or, or not investors, but critics and other people saying like 250 a month. Like, what am I going to do with that? It's like, you're not seeing the bigger picture here. You're not seeing the bigger picture when you're just looking at that 250 a month, you're not thinking about the cashflow increase. You're not thinking about the equity gain. You're not thinking about a portfolio properties that are, the cashflow is growing, you know, you're not thinking about like the flexibility you have when you have income coming in the door. Right. And, and, and how you can get creative about taking that gross revenue that comes from your rental property portfolio and turning that into net income for yourself, that's what being an investor is, you know, but so anyway, get off my soapbox. It is not a fast, it's not a fast way to build wealth, but it's faster than probably what you're doing. And so we'll move on to the next one. Mike, I want you to break this one down. Real estate is too risky. It's too risky. Mike, what do you say to that?

Mike: 21:37

Too risky. Um, gosh, do, do people think that FTX was risky? Right? Is Bitcoin risky? Is, um, investing in, uh, I don't know, pick a stock, right? Um, Uh, Apple, I mean, Microsoft, uh, anything Exxon, right? I mean, there's so many other factors. Um, you know, yes. Is there a risk? Absolutely. There's, there's absolutely a risk involved. Um, and yes, you can go online and get on bigger pockets forums or call me and Jacob, and we can tell you many stories. Of things that have happened, however, I mean, there are ways to mitigate risks, right? Um, you know, building yourself a team that you can align with that has your back, right? That's the first way people can mitigate a lot of the risks in, in their life. And any, any of those things I mentioned, right? Um, you know, hiring a, you know, investment. Strategist, if you want to do the portfolio building or getting, you know, hooked up with somebody like me or somebody like Jacob to coach with them and, and, and, and avoid a lot of those risks.

Jacob: 22:50

you are in pursuit of financial freedom, you're going to have to take some risk. You're going to have to take some risk. The road to financial freedom is paved with risk, right?

Mike: 23:02

you can't save your way.

Jacob: 23:03

You cannot, you cannot save your way to financial freedom. Your money will not grow. It's going to take too much time. Whatever your vehicle is, stocks, real estate, crypto, whatever, you're going to be taking some risk and you have to be okay with that. You have to be okay with that. And like Mike said. You're going to have to find ways to mitigate that risk. And you're going to have to find ways that you can sleep well at night, but there's always going to be risk. And in my opinion, the riskiest thing is not doing anything. It's just not doing anything because that's a surefire way to mediocrity. It's a surefire way to working until you're 65 this is the stat that infuriates me. The average retirement age is 66 years old. In the United States and the average life expectancy is like 77.

Mike: 23:57

78. Yeah.

Jacob: 23:59

So, so you're telling me I'm going to work 40 plus years of my life just to enjoy the last 10 and, and, and then also the average, the median net worth at that time for 77 is like 400 K or something like that, or that's how much they have in retirement savings. So. One, I worked for 40 years of my life, two, so I can enjoy the last 10 or so years of my life, but I'm, I'm, I'm older. My health is like, probably not what it needed to be. And I don't have enough money to enjoy the last parts of my life. Anyway, to me, that's like the worst possible deal that you could give me. And so in my opinion, the riskiest thing is just not doing anything. That's the riskiest thing. In my opinion,

Mike: 25:00

Yeah, I, you know, and I, I, I share this with anybody who will listen, especially younger, you know, younger people, even younger than you, Jacob, I had lunch the other day with, uh, with, uh, with a guy who's, um, in the real estate business, he's, um, he does marketing and, and videos and stuff. And I'm, I'm probably going to partner up with him on some stuff for us in the future. And he's a renter right now. He's 26 and I asked him what his goals were, you know, and I, I, I kind of. It, it gave him an aha moment, I think when we were having lunch about the whole house, house hacking thing. You know, I, I explained to him, I said, you know, look at it from this perspective. What are you paying in rent? And he's paying, uh,$1,200 a month in rent, um, for an apartment or wherever they're living. Um, up in the Cleveland, up in the Cleveland area. And I said, okay. I said, we can go buy a duplex. Tomorrow, tomorrow we could go buy a duplex for probably between one 50 and one 80 in one of these trendy neighborhoods in Cleveland, your mortgage on that property is going to be 14, 1400, 1, 500 with a, you know, 5 percent down conventional mortgage. I said, so you just went from, you know, 1, 200 a month and housing expense plus utilities to probably 500 cause you're going to rent that other unit for a thousand, you know, so if your mortgage is 1500 and you've got a thousand dollar tenant. Now your housing expense just went from 1200 down to 500, you know, and then the, the really thing that I think, um, kind of, kind of sunk in there was when I talked about where it's very powerful is taking that money that you were already spending and accelerating it. Saving that money, not going and spending it, that extra, that extra money that you're saving on your housing expense, save that money for the next deal. Right. And he's young enough to, and I told him, I said, dude, you know, with, with, uh, you know, with seven or eight very strategic purchases over the next 10 to 12 years as a, as a young person using low owner occupant financing and, you know, being agile enough to move, you know, over the, you know, cause it does suck, right? Like you have to move. Right. You got to move every 12 to 18 months to do this, but there's many stories of people out there who've done it. Um, and you know, over the next seven to eight years, you know, you could buy 10 properties and. in your mid thirties, be probably close to retired, you know? So that's where, uh, you know, I tell people all the time, it's just very, very powerful.

Jacob: 27:32

one property every year for the next 10 years and see how different your financial situation looks. And, um, I, I guarantee you're going to be much closer to financial freedom than, not having done that We'll move on to the next one, the next limiting belief. I need to be an expert to invest in real estate. So I'll kick this one off this one. I totally understand this one. I totally understand because it's, it's the way that I felt a little bit, you know, I, I had the, the fortunate circumstance of, Actually accidentally becoming a real estate investor, because I was going to live in my primary home in Portland and that just didn't end up working out. And so I just had to turn it into a rental property through necessity. And so I was forced into it. I don't know. Otherwise, if I would have actually jumped into real estate investing without having seen how, you know, smooth it was for the Portland property, the property rented out in the week, and I probably could have got more rent. Um, but I didn't know what I was doing, but just the fact that I saw it through necessity helped me a little bit, but I totally understand why you feel like you need to be an expert because even after, when I decided to do my second one, I spent months on bigger pockets, taking online courses, watching all these YouTube videos, reading all these articles, I just like consistently, and then I got to the point where I was like reading the same stuff over and over and over again, and I was just kind of spinning my wheels and, you know, I just, something just clicked where I was like, I just need to take the next step. And the next step for me was contacting a real estate agent. The real estate agent I contacted was Mike Magno. And I probably could have been ready months before that conversation. But because as soon as Mike and I talked, we just went straight into. What you need to be doing, right? Mike started sending me deals. I was like jumping in and I was, I didn't know that much about the Cleveland market, but Mike was educating me along the way. And so you don't need to be an expert. Do do your base level of research, right? You should definitely understand the process. You should definitely have like a good overview. I'm not against any of the education. I think that's good, but you know, time box that education and time box, like how much you're trying to learn, because I guarantee you. The majority of the learning is going to be done like live when you're actually doing it. So don't get stuck in the analysis paralysis, Mike, you, you probably coach so many people through this, um, but you don't need to be an expert, right?

Mike: 30:04

no, no, you don't even expert a, this, I'll tell you, you know, the analysis paralysis is real because I still go through it. Right. I mean, I, you know, all him and hall back and forth on deals that he, maybe I want to make an offer on. So it's, it's real and you live it, but you ultimately have to make a decision. Um, you know, for me, Um, you know, I like to read in the mornings, so what I'll tell, you know, I'll tell people like, Hey, dedicate, you know, dedicate, uh, 20 minutes in your every day and in your morning when you get up to, to reading, to educating yourself on a book, there's a, and there's a million books out there. I started with, um, uh, the first one I read. Was the millionaire real estate investor, the blue, the blue book, we call it in, in, uh, in the KW ecosystem. We call it the blue book. Uh, David Green has written several bestsellers. Um, you know, Brandon Turner has sold a bond, you know, has, has written a bunch. I mean, there's so many good books out there about real estate. Um, I mean, rich dad, poor dad obviously talks a bit about real estate. Uh, cashflow quadrant is another one out there. That's a little bit more about building businesses and stuff, but, um, that's another great book too, that it can help you educate yourself, but yeah, that's the thing. And there's no big, you know, I tell people all the time, there's no better teacher. than doing. There's no better teacher than doing. That's how I've learned.

Jacob: 31:23

100%.

Mike: 31:24

that's where I think, you know, people do get caught up in the analysis paralysis of it. And. Once again, that's where, you know, listening to a pod, like a podcast like ours or listening to any million real estate podcasts out there or reading a book or reading a blog or whatever, there's plenty out there, um, for people to just get involved and buy a property, you know, that's really the biggest thing, um, you know, buy, you know, buy one, you know, buy one, get involved.

Jacob: 31:52

Yeah, absolutely. I, I think honestly, at the end of the day. There's going to be a million reasons not to do anything, a million reasons, not to invest in real estate, a million reasons, not to quit your job, a million reasons to not move to this particular, a million reasons, not do anything. You just have to figure out, is this important for my goals, my short term goals, my long term goals, like how important is it? And if it stacks up high in your goals, then you're just going to need to do what is required. Um, And so just push through that analysis paralysis time box it really say, okay, cool. I'm going to read the book on rental property investing by Brandon Turner. I'm going to read rich dad, poor dad. I'm going to read the million dollar real estate investor. I'm going to read those three books, maybe take one online course, and then I'm going to talk to my first real estate agent. Right. You know, just like give yourself a base level of foundation. Um, cause I do think that's important. I think it'll help you talk to the real estate agent and help you like understand a little bit of the terminology. And that's good. That's helpful. But. Then you just got to take action. So we'll move on, we'll move on to the next one here. the next one is I don't have enough time to invest in real estate. And this is an interesting one. This is an interesting one because you probably have a W 2 I have a W 2, right? You probably have a day job and. One thing about real estate, and I can attest to this is it's, it's pretty all consuming. If you're very interested in it, if you're very passionate about it, it is pretty all consuming. It can be time consuming, no doubt, no doubt. Um, but what I'll say is that you are not doing this alone, Part of having success in the real estate investing space is building a team around you that is going to help you succeed. Part of that team. Is the real estate agent who's going to be counseling you, helping you find deals, guiding you through the whole process, right? So you, that the fact that you have that agent is going to save you a lot of time. Obviously they're going to, they're just going to like help you get through that process. Having a property manager is going to save you a ton of time, right? You're not managing the day to day of your property. And so you are not doing the real estate investing game alone. And that piece of it allows you to both have a W 2 job. And. Be an investor, right? Because you are building team that's helping you succeed in doing that. And that's why there's economies of scale with building a portfolio in a particular market, because there's efficiencies built in there, right? I know when I'm ready to go back for my next acquisition in Cleveland, I already have Mike, I already have my property managers, I already have my lenders. I'm ready to go. And you just kind of like ramp that back up. And so. And the last thing I'll say about time. So you make, you make the time, but also it's probably not as much time as you think, you know, there's definitely time, but there could be months when for my rental property portfolio, if nothing's going wrong, I'm not really spending that much time on it. Right. Cause I have property managers and so don't over, but then there'll be times where I'm spending a lot of time on it. So it's probably less time than you think. That's the first thing I'll say, but again, back to your goals, back to your, why you make time for the things that matter. You do, you make time for the things that matter. You know, you want to lose some weight. You make time for that. You know, you, you stop making excuses. You make time for that is financial freedom important. You make time for it. You want to be a real estate investor. You make time for it. And you know, to me, there are people that do insane things. One of my most favorite bigger pockets episodes is I think her name is Ashley Hamilton. She is an investor from Detroit. She was a waitress. She was making 20, 000 a year. She had two kids and. She achieved financial freedom with that being her situation, waitress, 20, 000 a year, two kids, and she just knew Detroit really well, a market where people like, don't invest in Detroit, don't invest in Detroit. And she just knew the market really well. And over a period of time, she got to 10 K a month in passive income on a 20, 000 a year salary. So talk about a come up and talk about someone that. Is able to push through and make the time so you have the time you have the time I get that people are busy. Everyone's got a lot going on, but you make time for what matters You make time for what's important. And so Yeah, that's what i'll say about that one. Mike. I don't know if you have anything to add on that one

Mike: 36:05

Yeah. I, I would say this, uh, about the time thing. You, if you want it bad enough, you'll make the time. Uh, there's a quote from Ed, my let that I'll never forget. And I can't remember what show he was on. I think, I think he was on Jim Rome. Uh, uh, the, uh, the, the new podcast that Jim Rome does the, uh, reinvention project. I think it, I think it was there, but Ed says something to me that spoke to me. This is a couple of years ago, but what he said is you choose. to do things right. You, and the analogy, the, the, what he used was the getting up early. He goes, it's not that you physically can't get up at 4 30 AM or 5 30 AM. He goes, you choose not to, you know, it's, it's all, it's all a mindset thing. Right. You know, and that, that was a, I was like, Like it made my head, my head go like kaboom, right? Like explode, like, Oh, he's right. You know, like I physically can get up. Do I feel like crap? Yeah, maybe. Well, maybe that means I need to not stay up so late the night before. Maybe I need to not drink the night before. Maybe I need to not eat so late. Right. Um, there are other things that you can do, right? And if you really want it, you'll find the time. Right. You'll, and like you mentioned, you'll time block 30 minutes. Can you time block 30 minutes? And then the team is important. And what I want to share is actually something that happened to me yesterday. Um, I helped, uh. It's been almost two years this, uh, these two sisters, uh, came to me and bought a couple of properties in Akron. Um, and would you believe it? They emailed me. They didn't, it wasn't yesterday. Today is Friday. It was Wednesday night. So Thursday morning, I opened my inbox and I had an email from them from the night before and then, Hey, Mike, uh, haven't talked to you in a while. We're back in the market. I said, okay, great. And they're asking me some questions like, Hey, what, what can we get? What should we look at? We're thinking multifamily thinking single family, you know, so we have a little bit of banter back and forth about what they're looking for and it just so happened that I had been in Akron. I had to go to Akron yesterday, uh, a couple of appointments and there were a couple of, a couple of new properties that hit the market and I was very interested in them for, for myself and or anybody. Who had interest, right? So the one I go and tour the property. It was very nice for the price. It's a lower priced property. It was very nice for the price. It was in, in their budget. Um, I know what they can get for rent for it. Because I rented one just like it not that long ago. And I literally took a video of it. I uploaded the video. I sent it to them. I sent them the listing. I said, here you go. What do you think? They put an offer on it. I had not talked to them, Jacob, in like nine months. Boom, all you need is the right team and how much time did they spend getting that deal? That's the thing, right? Like not everybody's looking at the same exact time, but there's, you know, there's always deals to be, to be had. And um, you know, that kind of, that kind of brings us into the next topic that I know we wanted to talk about, which was, you know, the market saturated, there's no more opportunities. And that's where I, that's a huge myth that I'll, I blow that up every day. you give me a strategy that you want to do now, you want to flip houses. That's a little tougher. You want to burr houses in my market. That's tough. You want to buy a small single family home or a short, even a short term, midterm single family home in a nice suburb, or you want to buy a small multifamily here in Cleveland. Or the surrounding markets. I can go find that all day long.

Jacob: 39:35

Yup. Yup. Yeah. We'll kind of roll into that one, right? I hear this one a lot and I hear that like, Oh, there's no more, there's no more money to be made in real estate. It's, it's super saturated. It's, uh, you can't find cashflow anymore. It's really hard. And you know, it's like, there's, there's just, there's just no point. Right. And the thing that I'll say about that is the real estate market is Take, take something like the stock market, for example, right? There's so much data and there's so much information that's just constantly being disseminated around the stock market. And there's so much technology There's automated trading systems and things like that. And, and so it's like the market, this stock market is ruthlessly efficient in terms of the pricing and the opportunities. You know, Warren Buffett, probably one of the few people that is, is so good at exploiting, uh, the stock market, but for the rest of us, right, you see something on CNN or some article comes out, it's already priced into the market, right? It's been priced into the market. All the stuff is already priced into the market. That's just like the way the stock market is. It's more efficient of a market because of all the information real estate is inherently an inefficient market. Why? Because. It's, it's centered around people and relationships and, you know, things don't always happen the way that they're supposed to rationally, from that perspective, there could be more, there could be properties or deals that are being traded without ever hitting the market. There could be agents that exclusively have access to these listings. There could be people that are like, there's just inherently so much inefficiency because it's built on local market knowledge. So if you are partnered with somebody like Mike, who's a top 1 percent agent, You, you automatically have an unfair advantage in that market, Compared to somebody who maybe has like a brand new real estate agent as their agent, and they don't really know what they're doing. So that's inefficiency right there. That's inefficiency, right? And so, because inefficiency exists, that means that inherently there's always going to be opportunity, And so that's what I'm saying. Is you can't, you can't, you can't believe that, right? You can't believe that, Oh, there's no, it's too saturated. Like that's just a lazy thing to think. That's just a lazy thing to think, right? It's like, it's an easy cop out. there's always going to be demand for real estate. There's always going to be new strategies that are evolving and things like that. I just think that you have to have that mentality. More of an abundance mindset of like, okay, if this doesn't work anymore in this particular market, how can I adapt? Right? Maybe, maybe you're saying, okay, maybe cashflow is getting a little bit harder to find. Uh, maybe I do pivot to midterm rentals, right? What does that look like? You know, how can I adapt to my strategy to get that cashflow? Right? Maybe you can do a duplex and one side is a midterm rental. One side is longterm rental, right? Boost the cashflow a little bit, have some of the stability of that. So it's like. I don't like hearing that. I don't like hearing the market is saturated and it's like, that's fine. That's fine. If you think that, but if you want to be an investor, you know, you have to have the mindset that there's always opportunity. I'm going to, I'm going to stop us there. Mike, we, we covered a lot. We covered a lot of limiting beliefs, a lot of myths, and I kind of want to close with some thoughts on that are going to help you. Reflect and help you kind of push through because I really believe that this is a great opportunity right now. The fed hasn't cut interest rates yet, and there's still this kind of sweet spot where it's a great time to buy, right? You know, right before the rate cuts start to happen, I think people are still waiting on the sidelines. I saw a stat that it's the confidence. Is that an all time low in terms of people thinking it's a good time to buy a house, right? It's a, it's at an all time low. And to me, the way that I think, I'm like, that's a great signal for an investor, right? Because so many of the people, the masses think it's a bad time to buy the home. And so, you know, the quote, the Warren Buffett quote, you gotta be fearful when others are greedy and greedy when others are fearful. I think now is the time to be greedy if you're an investor. So I want to close with some thoughts, some questions for you to ask yourself. Um, To just think about what the blockage really is, like what is really stopping you from taking that leap, you know, making that transformation into being an investor. And the first thing that you should ask yourself is. What's the worst, what's the worst thing that could happen? Just like internalize that what's the worst thing that could possibly happen. And just sit with that worst case scenario. and then ask yourself, what's the worst case scenario if you don't do anything right again, like what, like what's the more risky scenario, you not do anything or you purchasing that property, that single family, that duplex, right? So ask yourself that, you know, we're not going to answer it, but ask yourself that what's the worst. Thing that could happen. And the one thing I'll say about real estate, real estate never goes to zero. It just doesn't go to zero. It doesn't go to zero, but ask yourself that question. The next thing that I want you to internalize is that you are going to make mistakes. They're going to happen. Mistakes are part of the game, but mistakes are always how also how you grow. So investors look at mistakes as opportunities for growth. And this is another concept in the gap in the game, right? Every mistake. Is an opportunity to grow an opportunity to get better. You can't be afraid of mistakes. They're just going to happen. You know, if you're, if you're constantly worried about all the mistakes, then, you know, you're just going to operate with too much anxiety. You're going to, you know, be, you're going to operate with too much fear and you're not going to take those chances that potentially are going to like lead to exponential growth. just know that that is part of. The process, I love this quote, imperfect action beats perfect inaction every single time the person that's not the smartest, but takes action is going to beat the most intelligent person that just never pulls the trigger on the deal every single time, right? You don't have to be the smartest person. You just got to be the person that's willing to step into the arena and be there and roll with the punches, take the licks. and continue to be adaptable. And the last thing I'll say is you have unique qualities about yourself that are going to make you awesome in the real estate investing space. Everyone has different qualities about them that are going to make them really awesome at some aspect. Me in particular, I work with data. I work in analytics. That has made the kind of like analysis piece. The numbers piece of real estate click for me really, really well. Right. And so I think that I'm probably better than your average investor when it comes to the analysis piece of it. Right. That's made me awesome at real estate. You have something like that, you know, maybe you're great at talking to people, building those relationships, you know, maybe you have actually like a really great eye for design. Maybe you actually are good at construction and things like that. There's going to be different skill sets that are going to make you awesome in the real estate investing space. And so. So understand that to understand that, you know, there are going to be challenges that are going to be mistakes, but you are uniquely positioned in something to be awesome at real estate. And you can absolutely do this. So that's kind of what I want to close with. Mike, you have any kind of like closing thoughts for the listener? the person that's there on the sidelines. they're, they're waiting for the right moment. You know, they're listening to our podcast. They're thinking about all the things that they need to do. And they, they, they just need to get over that hump. So like, what's your message to that, to that person, Mike,

Mike: 46:48

My message is, you gotta block out the noise, cause you're gonna get noise from people who tell you you can't do it. Cause that's a lot of this, right? Is you have friends and family who tell you, Oh, that's bad. You want to be a landlord? Oh, you know, so that, that would be the first thing you get. People have to block out the noise and you've touched on it a couple of times in our conversation today. You know, what's, what's the, what is the worst that can happen and what's the results of inaction versus action. Right. And once again, I always go back to it. The best teacher is doing you gotta want it, you know, you gotta want it. You gotta take some, you gotta take some risks. You know, if you, if you have enough, if you have enough people in your corner, you know, you'll, you'll be all right.

Jacob: 47:32

a hundred percent, a hundred percent. If you're listening to this podcast, my guess is financial freedom is something that you want, right? Because we are the financial freedom fighters. And we believe that the path to financial freedom means real estate is going to be in your future, right? It's the most, Tried and true path to achieving financial freedom, but it's not going to be easy. It's not going to be without risk. It's not going to happen fast, but it is going to be worth it. And it is going to be faster than one, not doing anything, or probably just continuing to do what you're doing now. So like Mike said, ask yourself if you want it, ask yourself if you're going to prioritize financial freedom and. Just systematically within your own mind, you know, kind of get over these limiting beliefs and these myths, and just understand that your exponential growth is, is on the other side of you just taking that action, taking that step, you just don't know what's possible. Right. So Mike and I are here for you. We know you can do it. It's the beginning of 2024. I know you're gonna buy you a first rental property this year, and Mike and I are here to support you a hundred percent along the way. So I'm gonna take us home, Mike. This is the first episode of 2024, the first of many, and we're getting to 10, 000 downloads this year. Mike, uh, I'm manifesting it. You put it out into the universe and, uh, I'm, I'm manifesting it now. So we are the financial freedom fighters podcast. We'll see you in the next episode. Peace.

Mike: 49:06

See ya.