People often ask why I started Resilient REI and candidly it’s so that I can have discussions with fellow real estate investors. A twice weekly newsletter forces me to constantly engage with top tier investors.
Surrounding yourself with a diverse group of investors ultimately helps you run your business. Because while history doesn’t repeat itself it often rhymes.
Today we have such an investor. One who has a 25 year history of buying / managing SFH & small multis in Houston, TX, Tempe, AZ, and Riverside CA. It is my pleasure to introduce you to Joe Cash Flow!
How many doors do you have?
Right now I have 16 doors
What got you into real estate investing?
My uncle. I was 25 years old and he recommended I buy a house. Considering I was a starving student/musician with only shit jobs and making just enough to buy beer and ramen, I couldn’t see the numbers working. Not to mention, the only credit I had was bad credit.
He recommended I buy a duplex and live in one and rent the other. And, he set up the loan, with payments made through a title agency, using my retired Aunt’s (his sister) money as she could benefit from the interest as opposed to it just sitting.
The deal was for 5 years at which time I would refi the house with a bank. By the end of the 5 years, the house had appreciated, I had also improved it some, my credit got better and I learned a lot about being a landlord. It was a slam dunk refi and I still own that house today. Needless to say, my uncle was a very smart guy.
What market(s) do you operate in?
- Tempe, AZ
- Houston, TX
- Riverside County, CA
How would you describe your portfolio?
Mostly single family homes, a couple of duplexes, a triplex, a fourplex, and 2 commercial interests/partnerships.
What are you currently buying?
My most recent purchase was another SFH just down the street from two others I own.
Tell us about your biggest mistake in real estate?
My biggest mistake was not buying more along the way. I have been doing this a long time and had I only focused more on this business instead of playing music, chasing girls and drinking beer, and then climbing the corporate ladder after that, I’d have 10 times the properties I have now.
It’s a simple formula, I know how to do it and I’m good at it. I simply lacked focus and was a lazy investor only buying more properties here and there when, in fact, I could have bought so many more, for so little, and at such great rates.
Tell us about your biggest win in real estate?
Tough question as I’ve had a lot of them. However, while I have had some other more lucrative scores, my first property has to be the biggest win as that one changed my life!
That experience taught me how to do this and, as I said previously, I still own that home today and have used it countless times to buy more properties. I paid something like $55K and it’s easily worth 10 times that now.
Outside of real estate what else do you invest in?
Well, I never Invested in Crypto. I have a decent 401K from my last corporate life and have additional investments in stock funds, etc.
However, I don’t actively do anything with any of that and leave that up to my wealth management/financial planner guy. He does his thing with all that and I do mine with real estate investing and it works out great.
I also own an interest in a couple commercial properties in Southern California.
Books people should read before investing
Geeze… I don’t know. There are so many out there now. Pick a tried and true one and then get to it would be my advice.
So many people just read book after book but then never do anything. Action is really the most important thing IMHO. As they say – The best time to buy a house was 20 years ago. The second best time is today.
What advice would you give to a new investor?
Ask, listen, learn and act! Don’t do what I did and waste time being lazy and too risk averse. No risk it, no biscuit!
This week someone commented on one of my tweets about how hard it is for someone in their 20’s to buy rental properties. Saying that it’s impossible to build credit and find a well paying job. Meaning no one under 30 is able to afford a down payment and secure a loan.
While I do agree that it is hard to get started in real estate – it is not impossible. Candidly it comes down to choices such as:
- Would you rather live in the hip part of town or in a cheap apartment?
- Do you finance a new car or buy something cheap but reliable?
- Do you leave your current job because you know you can make more somewhere else?
The choices you end up making is what will end up dictating you’re ability to buy rentals. Because investing is about sacrifices in the short term for flexibility in the long term. Too many people (regardless of age) prioritize being comfortable now to the detriment of the future.
Such as opting to live paycheck to paycheck instead of prioritizing savings. One study found that 56% of Americans can’t cover a $1,000 emergency without needing financing to get them through.
The choice that myself and my wife have made is to live on 40% of our net take home pay and invest the rest. Opting to sacrifice comfort for another 3-4 years to achieve financial independence. Meaning we live in a cheap apartment, drive a cheap car, buy clothes that are on sale, and never take lavish trips.
All so that one day we can have a big backyard with plenty of puppies running around – hopefully without any broken paws.
See you on Tuesday