2 Wealth Show S3 Ep14 – Getting The Good Advice
Super E and Justin talk about getting into the real estate business and the importance of getting valid advice from experienced professionals.
Key Takeaways:
Resources and links discussed
Sponsored By: Integrated Health Solutions
We are passionate about your health and wellness and we know you want to enjoy a vibrant, pain-free, active lifestyle, but when you are in pain this seems almost impossible.
In order to be pain-free, move fluidly, and enjoy an optimal level of functionality, you need a personalized yet integrated, research based and clinically proven approach and that’s what we do.
To learn more visit us at
ihsindy.com
cryotherapyindy.com
About the Hosts
Justin Bogard – Note Investor specializing in performing Residential Real Estate Debt. He finds deals and acquires them for his own portfolio as well as educates investors while walking them through the process of owning a Real Estate Note!
Super E – Real Estate Investor specializing in short-term rentals and the management of them. She connects investors with short-term tenants and manages everything in-between.
Connect with the Hosts:
2 Wealth Show S3 Ep14 – Getting The Good Advice
Super E and Justin talk about getting into the real estate business and the importance of getting valid advice from experienced professionals.
Key Takeaways:
Resources and links discussed
Sponsored By: Integrated Health Solutions
We are passionate about your health and wellness and we know you want to enjoy a vibrant, pain-free, active lifestyle, but when you are in pain this seems almost impossible.
In order to be pain-free, move fluidly, and enjoy an optimal level of functionality, you need a personalized yet integrated, research based and clinically proven approach and that’s what we do.
To learn more visit us at
ihsindy.com
cryotherapyindy.com
About the Hosts
Justin Bogard – Note Investor specializing in performing Residential Real Estate Debt. He finds deals and acquires them for his own portfolio as well as educates investors while walking them through the process of owning a Real Estate Note!
Super E – Real Estate Investor specializing in short-term rentals and the management of them. She connects investors with short-term tenants and manages everything in-between.
Connect with the Hosts:
Welcome to the 2 Wealth Show. a show that shares how you can create real wealth for you and your family. I'm one of your hosts, Justin Bogard. And my co-host is Elizabeth Sickles, AKA Super E. I am a real estate note investor specializing in performing residential real estate debt. I find the deals acquire them for my own portfolio, as well as educate investors while walking them through the process of owning a real estate note. My co-host Super E, a real estate investor specializing in short-term rentals and the management of them. She connects investors with short-term tenants and manages everything in between. Our show was sponsored by BrightPath notes And Elizabeth Maora. You can find out more information by visiting our w ebsites b rightpathnotes.com and elizabethmaorallc.com.
Speaker 2:Hello everybody. And welcome to episode number 14. I am Elizabeth with Elizabeth Maora.
Speaker 3:All right. And I'm Justin Bogard with bright path notes
Speaker 2:And we have, uh, an interesting and fun, um, excuse me, topic for all of our listeners today.
Speaker 3:All right. So, uh, what has been, uh, something that's been going on with both of us, uh, recently is that Elizabeth and I often get phone calls from people that want to get in our specific businesses, whether it's, you know, Airbnb type of short term rentals, like what Elizabeth does or whether it's the note space, what I do. And, uh, we find that people are a little confused on what the information they can get for free. And if it's good information,
Speaker 2:There's a very big difference that old saying cheap is expensive is when you pay for right. Yes, yes,
Speaker 3:Elizabeth, I, you know, every now and then I would throw out my career in real estate notes. I would get phone calls of people just asking me questions and just wanting to either be in the business or just learn a little bit about notes. And I'd always, you know, spend some time with them and just give them, you know, my experience and my thoughts on specifically what they're trying to do and just kind of help them in the right direction of where they can go to get better information. And I find that more people are starting to come into the real estate world as, uh, you know, this year, uh, since COVID 19 and the 2020 year and now entering into 2021, uh, people are seeing that real estate is, is happening, you know, in a great way. And they want to get involved somehow. And so with online stuff today, there's a lot of resources out there as far as like, you know, different blog pages, like bigger pockets. And there's a lot of Facebook groups that talk about different things in real estate. And there's obviously a lot of articles that have been written. There's, there's several books that have been written on different things in real estate. And, uh, there's a lot of great authors out there. And a lot of people that really haven't been in the business that long that are writing material, and then other people are reading that material, thinking like this, this is information that I should go act on, or at least in their experience, you know, they think that they have a lot more experience than they really do. Is that, has that been your, um, thought as well?
Speaker 2:Absolutely. And I think it's really important that if you are seeking, excuse me, somebody to be your coach or mentor that you ask them, are they active in the business and depending on what's going on? No, for me, property management, how many properties are you managing for Justin? Hey, how many note transactions do you do? You do a year? So those are very important because you need to be with people. Real estate is so dynamic. You got to know what's going on because it changes all the time.
Speaker 3:Yeah. Even for myself. And I'm sure you are the same as well. Elizabeth is that I'm always looking to people that have done a heck of a lot more deals than I have and learning from them and asking them questions, because I'm sure in your business, as well as with a, in a note business, not every deal is the same or it, or it looks the same, or it ends the same or it, or it plays out the same way. And that's, what's fun about it, but it's also unique and challenging because then you get to learn from some of the more seasoned investors about their trials and tribulations and something like that. And then how they got around it or different way to look at it from a different lens to, you know, end up making you money when it looks like you might be breaking even, or maybe even losing money on a deal.
Speaker 2:But that's exactly right. It's, it's just, I can't stress how critical it is. And you know, just the other thing that Justin brought up brought up, excuse me, whenever he, whenever we first started, the episode was the fact that when you are seeking advice from, you know, from the professionals, just know that, you know, a lot of us do consulting and coaching, um, with students. And that's really, to me, that's really important for us and also for, um, that you really need to be mindful of time and money because that's everything Wells down to the time and money, right? Cause time is money
Speaker 3:That's right. So if, if you're wanting to make what I tell people, Elizabeth is, if you want to make a high return, you gotta be kind of active in the business. Meaning you gotta get your to roll up your sleeves. You've got to learn this stuff. You have to educate yourself the right way. And you're going to have to spend some money in order to do that because there are a lot of great training programs and training mentors out there in different facets of real estate that can get you going down the right path. Uh, if you choose not to do that, then you really need to tether yourself to a professional. That's done this, uh, many, many, many times specifically in your business. And I tell people that as well, like whether that's me or whether that's somebody else that's, that's in the note business, you know, do a deal with them, have them walk you through a deal or buy one of their deals and just experience what that is so that you can know, like, do I really want to move forward with this? Do I want to make a business out of it? Or I just want to use this to make money and be wealthy, wealthy, passively through my retirement account, or maybe I've sold a business and I just want to use my cash and have it just worked for me.
Speaker 2:Absolutely. You know, one thing I think that's important to keep in mind too, excuse me, that I also think that it's good to work for people if they've have built a business and then they sold it off. You know, for example, Morgan, Morgan's my business coach who we had here on the podcast. She had a number of very successful businesses that are, um, locations that she sold off. And now she's a business coach. So, you know, that gives her all of the background, all the experience she needs. So, you know, as long as people are active and she sees so many different industries, um, you know, that's, that's really, really important.
Speaker 3:So here, here's your quiz, Elizabeth, from that episode that we recorded, do you remember how to pronounce Morgan's last name,
Speaker 2:Siani, Siani Tiani Tiani Tiani, which, you know, actually just something to kind of note about that as, as people network right in the real estate world, it's a very small world and she just bought a house in Chicago. I spoke at the, um, Chicago Rhea. So, and she's, she's going to be doing a major rehab on this property. So I said, well, Hey, I'll connect you with Danny because he can get you with the right contractors. And, you know, it's, it's really nice, you know, once you start necking, networking with people to be able to help people, even in that respect as well.
Speaker 3:Absolutely. Yeah. That's, that's great. Um, so that, that's, what's great about the business that I'm in and which is why I can invest, not just in my backyard, but I can invest all across the country. And I also have, like you said, Elizabeth, I have boots on the ground, uh, in near nearly every state that I would want to invest in to where I can leverage their expertise in that area and say, this is what I'm thinking about doing, do you have anything to add to my due diligence that I should out for, based on, you know, your experience since, since you lived there and it's, it's, it's, uh, what I want to call it, it's an invaluable information that you wouldn't otherwise find by just, you know, Googling
Speaker 2:It and, you know, just on boots on the ground. I just had a call yesterday with, um, a soon to be client that's from out of state and was looking at a property. She sent it to me. She said, Hey, what do you think about this for short term rental? Um, it's just below a$600,000 house and you think, oh, well, Hey, you know, it's X amount of money, which is expensive for this area. But I told her just from the pictures, I could tell they used cheap carpet. I mean, it was horrible. And I said, I wouldn't touch this. And the reason is because I know if all of this is done so cheap and looks bad and pictures can make a lot of things, look good, that electrical and plumbing, that's a whole, you know, they cut corners on what I can see. So what's behind the wall is even worse. So, you know, we definitely want to encourage you guys to get out and network network with the right people, for sure. You know, conferences are opening up. So make sure you, you know, you attend those as much as you can to know people that are, that are on the ground.
Speaker 3:That's a great tip about what you just said about, he noticed the cutting the corners, what, what you visually see, just imagine what's behind the wall and cutting corners as well. That's an excellent tip.
Speaker 2:Yeah. And you know, it's, I think it's probably a little bit more for people that if you are new to real estate and you're chomping at the bit to do your first deal, right. And then the other side is, you know, the folks that have a lot of wealth that they can, you know, they can put in a lot of money immediately. So they just think, oh, well, you know, that's okay. It's, you know, it's, it's going to be a pay know-how you gotta know who rehabbed that house. Are they reputable?
Speaker 3:Yeah. There's, there's quite a few horror stories out there in all the business of real estate. And you just, uh, you know, real estate isn't brain surgery, right. It isn't, uh, easy per se because there's, there's, you know, personalities, there's businesses, there's vendors that you use and everybody is gonna move at their own pace, or everyone's going to do things a certain way that, and then you just have to discover what is going to fit best for you and how you move forward. So running a business in real estate, it's hard, it's, it may look easy and glamorous and it can be, you know, once you get to that stage, but building your business from the ground up is obviously it's challenging. Just like anything else. Um, the freedoms that we have, we earned because we have to work so hard to get to those freedoms, right? When we build a business that can start bringing us, you know, passive encounters where we don't have to work as hard to receive that income. So we would strongly encourage those that are getting into the real estate business, just to understand there's a right way to get it. It's going to be time. It's going to be a little bit of money and you're going to have to have a lot of patience because unless you've done this before, it's really tough to get into this world and start being successful from the first deal. It's going to take a, you know, a while to get going.
Speaker 2:Yeah. And you know, I'll say I've been in business, it'll be four years in September. And like just now I have at least four to five calls on my calendar every week from potential clients or, you know, people that are wanting to know something about short-term rentals, but that took four years to get your name out. And, you know, and once you start getting on other podcasts and, um, it, I mean, you want it to happen overnight, but it does not.
Speaker 3:Yeah. It's not like HGTV to where you just you're, you're filmed on one house and you're already a star. Uh, it doesn't, it doesn't work like that. And then, you know, when you treat people, right, and you do things the right way, and you know, you take care of people that, um, may not have been, you know, necessarily wronged by you, but something didn't go exactly as planned, uh, do everything in your power to make things right with somebody because it'll, it'll pay dividends in the future. You'll, it'll be paid for to use somehow. I just remember a few deals that I had done in my past to where, you know, I may not have made a lot of money on it, uh, because things didn't work out right. Maybe it was my air. And I, I took the blunt, the brunt end of the, uh, the monetary side and not made a high as a profit as I wanted to, but I would focus on doing the right thing. And, you know, a few years down the road, that that person came back with some opportunities that were great for me. And, uh, you know, I was able to make a sizable amount of money in those deals, in the future, all because they, they realized that I did things the right way and they wanted to do business with somebody that did things the right way. So it, it does behoove you to make sure that you're always trying to do the right thing. Uh you're in it to make money. Obviously you're not, you're not a charity, but you also want to recognize when you should, you should, uh, put on, take off your, your CEO hat and put on your humanitarian hat and know what's the right thing to do.
Speaker 2:Absolutely. What goes around, comes around. Yeah. Yeah. I've seen
Speaker 3:A lot of people in the business that one, uh, that want to oversell things or try to squeeze way more profit than they need to. And it really hurts the end person that buys their product or service or real estate when our world. And it's just really, it's really sad to see those, those people with their hard earned money and trusting somebody and, and, uh, going through that process and making a deal happen. And then things just don't go, right. And then maybe that person, you know, walks away from, you know, their phone calls or, or not answer their questions. So, uh, when you get into this world, you want to make sure that you find somebody reputable and, and do your homework on them and then, and walk through a deal with them. And, and, uh, you're going to have to spend some money even going to spend a lottery. You can, you can spend a little bit and, uh, work with them on a deal. Maybe not make as much as you want, but, you know, walking through a deal with somebody is going to be much more beneficial for you in the second, third and fourth and fifth deal.
Speaker 2:Uh, absolutely. You know, when, uh, one of the other things, actually the first deal that the first joint venture deal that I did, I don't know if we've talked about it on the podcast or not, but excuse me, my JV partner was, um, associated with somebody here that has a phenomenal reputation. So I thought this person was also going to be to that esteem and it turned out that was not the case at all. Um, so just be very, uh, you know, make sure, and there were a lot of red signs or excuse me, there are a lot of red flags. The initial contract that he gave me was Laden with grammatical errors, which drive me nuts. Um, so even things, and I don't just mean one or two, which I'm okay if maybe there's one, I don't like it, but, um, there were a lot of issues just with that. So make sure, you know, just take your blinders off, even if somebody is associated with somebody, that's not that person. So make sure that you do your due diligence on that one as well, because I learned that lesson the hard way,
Speaker 3:Elizabeth, one, one thing I've learned as well is that if you have some sort of a emotional connection to a deal, or maybe it's family or friends or someone, you know, it is best to kind of temporarily remove yourself from the deal and have someone else look at it with a different set of eyes, uh, that can be, you know, more realistic about what you should do, because you may be a little bit, you know, too giving, or you may be taking too much away from them and to make, to make a fair, fair deal. So I've had to do that before to where we were like, look, you know, I'm too emotionally invested into this. I got to step away from it. Have one of my friends look at it that has no idea who this person is and be like, here's a deal. What would you do? And be like, okay, you know, that put me on the right track here. I was being a little, you know, overboard on one side. So
Speaker 2:That's very important as well.
Speaker 3:Okay. Yeah, because if people will take advantage of you, if they can, right. Everyone's looking for the best deal and it's not about how many pennies you can squeeze out of the deal. It's, you know, how can you generate that know like, and trust factor to where they'll have continued business. Cause like when new people that want to invest, uh, with me or have me educate them on how to invest in notes, I always tell them like, you know, it's, it's a rarity when someone doesn't come back a second, third or fourth time to me and, and work with me there, me finding them a deal or buying one of our deals. And it's kind of what I put a feather on my cap. Uh, so that, you know, I, I know that I'm doing things right. And you know, I don't focus on making that much money. I know that the long-term relationship will benefit me much greater than trying to make and squeeze out every penny that I can on that first deal to me, I'm just not built that way. It doesn't make sense. So
Speaker 2:Absolutely very important, very important stuff.
Speaker 3:So any, uh, first time investors, they typically will ask me questions and maybe you can answer this question for our listener. Here is the first thing they want to do is typically they want to set up, you know, an LLC and maybe they try to read a book about, you know, what, how to set up a structure or how to form a corporation or how best to protect them from all these things they hear about from different websites and Facebook groups and stuff. So when someone comes to you, Elizabeth, and is like, Hey, I want to run an Airbnb business or short short-term rental business. Um, what's, what's kind of your reaction. What, what path do you put them out?
Speaker 2:I tell them to talk to a CPA or a lawyer. Um, you know, I always hated it whenever people say, well, it depends, but it depends. And everybody's situation is different. And you know, the other fact of the matter, especially as, you know, you continue to grow in your business and become more successful, is that, you know, people will say, oh, well, well Justin told me I needed a sole proprietorship. So that's what I did. Well, Justin's not a licensed lawyer. He's not a CPA, right. Or me. Right. So, so we have to be really careful on what we say to people. Um, you know, I had an, uh, a new employee yesterday that was asking me how to fill out all of their exemptions and stuff. And I said, Hey, I would love to help you, but I cannot help you. You can ask a CPA and stuff. Um, and it's just because of that liability factor. So I tell everybody, Hey, make sure you ask a CPA or a lawyer, because it also depends on the state that you're in. Right? Every, everything is different, but the important thing is that you get them done. Yeah. I mean,
Speaker 3:No one wants to sit there and get billed per hour, you know, to ask some, maybe some basic questions. Um, so I wouldn't focus on that as much because most, you know, good attorneys or good CPA firms, they don't mind spending 15 to 20 minutes with you, maybe just getting you in a basic direction and then knowing like, okay, when you're ready to dive specific into that topic, let's start the clock and let's go ahead. You know, and we'll obviously charge you our hourly rate, but yeah, I've, I've met many CPAs and attorneys that will, will bend their air for a few minutes for free and be like, oh, okay. I understand what you're trying to do. I can definitely help you with that. You know, what schedule a different time and we'll focus on our 30 minute conversation and we'll, we'll get you to what you need. And then these are the things that I want you to prepare for. So there's, there's, there's, there's a good way to do it. That's not going to break the bank. So
Speaker 2:Abs absolutely. Absolutely. And that's also a mistake that I made in the beginning. I had one of the companies out west set up all these different entities for me. And when you first for me, when I first started out, I mean, and have that much. So I didn't need to go to all of that expense because then there's annual expenses with that with registration fees and all of the fees and the LLC for the other states as well. So it's one step at a time.
Speaker 3:Yeah. Uh, w when, um, do you said that, and it made me remember when I first started to get in traditional real estate. And I took a lot of seminars and I signed up for specific courses for large training companies to get me down the right path. And they would basically have a, a sh a conference set up to where they would, they know that they would, uh, put these certain people in front of you that are experts in their field. And they would say, you know, this is what you want to do. If, you know, if you want to set up your LLC for the best protection, this is, you know, you go see this guy, here's his package, and they'll set you up. And then if you want to, you know, have your retirement money set up, this is the company, you know, they have all that stuff pieced out for you, which, you know, it they're right. It does work well, but do you really need it? And so having a local person to talk to, that's the professional of where you're going to do business with as a, here's a great way to start, because you can always change your structure later, uh, to a certain extent. But, you know, the basic thing that I tell people to do is like, you, you obviously want to get an LLC at a minimum. You don't want to do this in your personal name. And so it's your choice. If you want to set up, you know, through the secretary of state and do it on your own, you know, obviously your first time, I would recommend you going through an attorney. I mean, that's, that's what I did. Uh, I know how to do it on my own now, because I'm comfortable taking that chance. But you know, at the same time, if you need operating agreements and stuff like that, like, please don't go on like legal zoom and other places to, to grab a generic agreement, because it may not be specific enough for your state or your, your bylaws that are in your area.
Speaker 2:Excellent point, excellent. Local as local, local as possible.
Speaker 3:Yeah. Another, another good point on our side of the business is, uh, a lot of people will share agreement with each other, whether they're, you know, non-disclosures or the purchase and sale agreements or loan agreements or hypothecation, or partial agreements and stuff like that. And, and you want to know who did the agreement, and you want to know if an attorney did it, and how old is it, you know, is it at a date? So if you do share an agreement with somebody it's best to have maybe your counsel look at it, um, but chances are, they're probably going to want to just rewrite it from scratch and run it their way, because they know they will defend it because they wrote it and they, they know how to defend that specific paperwork. So, um, you're probably gonna end up just getting, you know, your local attorney to end up drafting stuff for you. So you want to be careful of that because I've gotten myself caught to where, oh, I'll just use that guy's agreement because, Hey, you know, he's using it, right. It works for him should work for me. Well, you know, you may get away with it and it may, it may end up working out. Um, but you know, to have something concrete and know without a shadow of doubt, you're going to be defended well with an agreement, I'd have an attorney just go and draft it from scratch. Maybe they can use that as a template and be like, I'm trying to do something like this, but can you put it in the language that you would defend?
Speaker 2:Great point. Absolutely. You want to make sure you're friends with like your lawyers too.
Speaker 3:So I've had to, I've tried my hardest to make sure that I get advice from experts and stuff like that, and make sure I go down the right path. And I've done things on my own before, and I've still made mistakes, even getting advice from experts because I wasn't clear as to what to do. And I thought I was clear. And so it is something to where you try your hardest to protect yourself, but just expect that you're going to make mistakes and they may not cost you any money. They may just cost you time, which is just as hurtful as money. Uh, but at the same time, you're going to learn from it as well. And so I think what I want to go back to Elizabeth is just talking about, you know, pretty much getting your hand held by somebody that actually does deals and is, you know, maybe in your area or somebody that, you know, is that you've vetted, that, you know, is, is, uh, you know, going to help you out and not in it just to, you know, make money off of you. So just be really careful of that. And that's probably the best advice that I can give somebody if I were to start over, I'd probably focus more of my attention on somebody local. That's, that's doing what I'm doing and just walking through deals with them and just, you know, sharing my time and understanding what they do. And, and I could also help them out Elizabeth right, with something in their process. And I can also learn as I go as well. And so that's a great way to learn, um, and not have to invest a large amount of money into it. Um, of course, it's going to take a lot more time that way, but you know, that that's one way to go after
Speaker 2:It. Uh, absolutely. Couldn't agree more. And, you know, just reading up as, you know, getting involved with the trade organizations that, you know, I'm very involved with the vacation rental management association, um, because those contacts will also go, I was just at a conference last month. So the people that you meet, you know, they're probably doing a lot more than you are, so you have so much to learn. Um, that's really important as well, make sure you're networking and going to these events.
Speaker 3:Exactly. So we're not trying to scare or deter anybody from trying to go into business for themselves. We just want to set a realistic expectation of we're hearing, um, you know, phone calls or maybe emails from that are wanting to get into the business. And these are the things that we kind of steer people away from and put them down a separate path and be like, this is, you know, you're just going to have to go to this professional and set things up. And, and yeah, you're going to spend some time and some money doing it, but, um, you're going to have a lot more reassurance that things are going to go well for you or a lot better than they would otherwise going down the route of, well, you know, it just makes sense to do this cause my other friend did this. Um, so it doesn't always work out that's right. Absolutely. Well, do you have any closing thoughts for today?
Speaker 2:Uh, you know, entrepreneurship, you will learn more than ever. Uh, whenever you do go out on your own or start your, your first real estate deal, um, and just enjoy the ride, you'll have great times and not so great times, but it's just part of it.
Speaker 3:It is fun. You do get a lot of freedoms because of it, but it is work and there is effort involved. So go talk to your local professional. That's actually doing deals.
Speaker 2:Amen.
Speaker 3:Episode 14, I'm Justin bugger with bright path notes. Don't forget to check out our YouTube channels, Elizabeth Maora's YouTube channel and The BrightPath Notes, YouTube channel as well to see the video cast of this.
Speaker 2:And I'm Elizabeth with Elizabeth Maora. Thank you. And stay tuned for episode number 15. All right. See you guys. Bye
Speaker 1:To wealth show is produced by Justin Bogard and Super E sponsored by BrightPath Notes and Elizabeth Maora. Thanks for listening and watching for our show.