Just About My Experiences on Real States

This article is made just like is If someone is taughing with another person about the estate business and ideas of investing money.

Generating passive Income and creating wealth in real estate.

My full-time focus is creating businesses,building businesses, selling businesses..Just like most entrepreneurs, I got into this game because I wanted enough passive income and wealth to live life on my own terms.And for most of my young life, I though that vehicle was going to be real estate.And I still am a real estate investor.

In fact, most of the very successful people that I know,it doesn't matter if they're worth $100 millionor a million dollars, most people have some sortof a holding in real estate, because it's just a provenasset class.

Because real estate holds its value really welland it tends to spit off cash flow.So, as you are exploring the path that you're on,it's important to say, do I want this because I wannabe a passive investor who gets passive income?Or do I want to make real estate my business?

They're two different approaches, if you watch HGTVor if you've got a friend who flips houses,real estate is their business.Thats their full focus.They make money in real estate, but it's not passive income.

They've very active in that business and that's a great approach because if someone is active in real estate,they're gonna find great deals.They're gonna have a head start on everybody else.They"re gonna know the bankers.They're gonna know all of the subcontractors that they'll need.They'll have an expertise that's gives them an advantageover everybody else.So, if you want to make real estate your business,that's one approach.The other approach is to say, what I'm really afterhere is passive income.

And I don't want to be a house flipper and I don't wantto be sourcing deals all the time.If that's your goal, then your set of strategiesis going to be different.So it's important to address that up front,because a lot of investors or entrepreneurs get into the wrong vehicle thinking that eventually they'll start to hit their goal withoutever addressing what their goal is.If you know what it is up front we can get therea lot faster.

You can do it a lot ways, but I like being the directinvestor, where I own and control the property directly.Because when you're a direct investor you don't leaveyourself susceptible to three major problems.

Number one, you might be investing with a crook.Okay, and there's no shortage of crooks in every industryin every part of the world, right?That can simply rip you off.But number two, assuming they're honest, you mightbe investing with an idiot.Okay, and just because they're so stupid you'll lose your money right?So, assuming they're honest and competent,you pass those two hurdles, the third problem is they takea huge management fee off the top for managing the deal.And so, when you're a direct investor, you eliminatemost of those problems.You do create a new problem though.

The new problem is more work.You've gotta be more engaged.You've gotta be more involved.- Now if you're first starting out,it can feel a little bit intimidating to say,I don't want to make this my full businessright out of the gate.Well Jason's strategy is incredibly simple,he very publicly on his podcast and in his content says,that single family houses are the most proven asset classin the world.His entire strategy is simply to investin single family houses in good marketsand get them rented.And hold them for a really really long period of time.And have a little bit of cashflow on each houseand go do the next one.

Recently on the 1% Podcast, we did an interview with somebody names Todd Dexheimer.And his approach was exactly the same.He realized that when he invested in single family houseshe was making just as much moneyas his teaching job and he went, wait a minute.I think maybe I should become a full-time real estateinvestor, but that's the formula that has createda lot of full-time real estate investors.Going all in on the business which is acquiringsmall deals, single family houses, duplexes,and then moving onto bigger deals once you have enoughcashflow to be able to live life on your own termsand you're a full-time real estate businesspersonor real estate investor.There's other ways to do this too.I want you to meet my friend Tom.Tom is an orthopedic surgeon here in Austin, Texas.Very very successful, very wealthy.But he was working 80-hour weeks when he started investingin real estate.So he knew that he couldn't go out and sourcedeal after deal after deal after deal.He had to find one good one, one good one.And he was doing it nights and weekendsand looking for the passive income side of this.And I want you to watch this story of Tom Sharing,how he found the first dealand how it then tipped the scalesinto allowing him to look for more deals after that.Watch this.You're coming out of school, today most doctorsare covered in debt.I mean they're just completely covered in it.And most people don't know that, they just knowhow much doctors make.So everybody thinks doctors are rich.You come out probably have student debt I'm assuming,you're working 80-100 hours a week,how did you have the excess to start doing this?- I passion to think. (laughs)- Did you say passion? (laughs)- Yeah, had to be passion, stupidity, one of the two.And so I really wanted this now.I was actually building my practice and loving what I did.I'm a orthopedic surgeon, I'm in sports medicine.I was a frustrated athlete.So I'm perfect, I run with my people.But, on the money side I really enjoyed the real estate.I love buildings and I love the developmentand construction process and I love every part about it.So, my, the reason I started small was it was in eveningsand weekends, truly evenings and weekends.One time I was reading, if you listeners rememberthis thing called a newspaper.Back in the day, on Sundays, there was a classified sectionand it had real estate in the back.And there was a little section, apartments and condos.It was down in the Texas, down in the University of Texasarea and I was zeroed in on student housing.And I read an ad and I told my wife, I said,"I'm buying this tomorrow."She said, "How do you know?"I said, "Look, I've been in this market,"I know it like the back of my hand."Somebody[s either underpriced this thingor there's something badly wrong with it.So I was seeing patients in my office.Saw a patient.Said I'll be right back, slipped out the back door,drove down eight blocks, quick went throughthe place, made an offer, got it acceptedand came back and kept seeing patients.(Ryan laughs)So that's how we did it.Mostly weekends, morning.Weekends, early mornings, in the evenings.And then as my real estate income started gettingmore prolific, I was ale to sort of cut back on daysand that scale just kinda changed like this.- And you're still practicing today, correct?- I am, I did surgery this morning.(Ryan laughs)And spreadsheets this afternoon.- The beautiful thing to this approach is Tom was lookingnights and weekends for his first dealand then in between surgeries, went in and acquiredhis first deal, which gave him enough passive incometo focus a little bit more time on building real wealth.Because it doesn't matter how much moneyyou're making from your job, if you don't own somethingthat can go up in value over time.If you don't own something that you control,then you can't get rich.You don't get rich on salary.You get rich on ownership.You get rich on owning a business.You get rich on owning real estate.You get rich owning a piece of business,sometimes called stock investing.And so Tom did that.He went and looked at where the deals were.Got really good at one market.He knew he didn't have a ton of time to gobuy up a bunch of single family houses.So he bought one deal that set the pathfor the rest of his career.Now today, since I am not looking at deal after dealafter deal, what I do look for is people like Tomand people like Jason and people who do have the expertisewhere it is their business to be in real estate.And then I serve as just the investor in that dealand I take a piece of the action.So this is where I like to live.

I now make my money in business.Or some people make their money at their job.Or some people make their money flipping houses,but then you get the wealth and the cashflowfrom, in my case, investing in the peoplewho make this their full-time thing.So that's people who are buying up apartment buildingsor who are building new projectsand then taking money from investorsand paying out a portion of the cashflowOne of my best friends here in Austin,his name is J.P.I like to joke that he owns half of Texas.J.P., I call him the $800 Million Man.

He controls about $800 million worth of real estate.And he sits in that chair where he has all this deal flowand then he raises money from investors like meand then he does the project and he pays out his investors.Very interesting thing about J.P. though.He got started in his late 30s.He got started with no background in real estate.It was his second career and he was going in a wholenew direction.So ignore the $800 million that I slap on his nameand look at the man, who a couple decades agowas starting over from nothing.This clip is gonna give a lot of hope to those of youwho are just starting your journeyare wondering, did I miss it?Are my best days behind me?Watch what happened with J.P."Do you talk about how much of a portfolio you have?- 

My portfolio is about $800 million in real estateunder management.- Wow, when did the first deal come about?- So my first deal came about,I actually flipped a house in Austin, Texas.And I worked my ass off and I made $12,000and I was thrilled that I had made #12,000.It was the confidence that I had that maybe I can do this.And it wasn't, now a days $12,000 doesn't soundlike a lot but at the time it was a very, very meaningfulthat I actually had gone from beginning, middle to end.And that took a long time to get to that place.- How long did it take you to flip that?- 8 months of hard work.- Oh, wow.- I was probably working for $8 an hour.But it didn't matter because it was symbolicof my new life and some completion and some successin this new direction.So here I am.Now I'm 32-33 making $6/$8 an hour flipping homesin Austin, Texas.- Were you still flipping for a couple yearsfor like pennies?Was it a couple of years of grit and figuring it out?- I was so faking it.So faking it, like broking a deal here.Definitely, there was a lot of that going on.And then I got my first apartment projectand it as a small one.And it was really a rough building,but it got me started into something bigger.And it was my first break.