Real Estate Investing Strategies Anyone Can Do with Jefferson Calloway

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That's why these house hacking is so appealing.

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Like I said, I mean, if you use a house hack right now, somebody watching your show to go buy a property zero out of pocket and live in it and house hack it.

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If you make even one dime, that's a million percent return right there because you didn't pay anything for it.

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Welcome to The Wayfinder Show with Luis Hernandez, where guests discuss the why and how of making changes that lead them down a more authentic path or allow them to level up in some area of their life.

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Our goal is to dig deep and provide not only knowledge, but actionable advice to help you get from where you are to where you want to be.

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Come join us and find the way to your dream life.

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Welcome back to the Wayfinder show.

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I'm your host, Louie Hernandez.

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And today is going to be a black and white show because, as you can see behind me, I have the white background and my guest, Jefferson Calloway, has the black background.

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So that's quite the contrast here.

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That's pretty cool.

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Uh, anyways, Jefferson is, uh, he's kind of a badass and you know we like to have, uh, badasses on the show.

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He is a real estate investor, a businessman, a family man, a veteran.

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So thank you for your service, Jefferson.

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Um, he has built A portfolio of 27 doors across seven states in three years.

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Well, that was as of the time that we, uh, we agreed.

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So he, you know, to have him on the show.

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So he might even have more than that now, which we'll soon find out about.

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But Jefferson, uh, welcome to the way finder show.

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Thank you very much.

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We, I really appreciate it.

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And, uh, thanks for the support.

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We really appreciate it as troops.

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Yeah.

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Which, uh, which branch were you in?

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Army.

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Oh, excellent.

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Excellent.

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Thank you very much.

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So, um, so tell us about your, you know, let's let the listeners learn a little bit more about you.

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What, what, uh, tell us your journey, your origin story.

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Yeah, for sure.

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So, um, I grew up on the Eastern shore of Maryland and, and just kind of have a very eclectic background, but, you know, got into strength sports.

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That's why a lot of people, if they ever end up on my Instagram, you'll see a lot of, you know, health, fitness, powerlifting, strength stuff.

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Um, went to college for philosophy and religion.

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And it's not really until my late twenties that I really found my niche, which was business and real estate.

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And so when I went into the army, um, let's see, I was 27 came out and was 31.

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And that's when I first got into real estate.

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And so I bought my first property down in Fort Rucker, Alabama, when I was a officer, um, going through officer school and helipilot school.

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In the army and a ball.

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My first rental there, um, started a lot with how attacking, you know, even when I came back up to Maryland, my second was a multifamily house hack.

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Um, VA loan is a very powerful tool for house hacking, um, and getting, you know, the ball rolling on a real estate portfolio, building wealth in general.

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So then when I came back to Maryland and bounced around a little bit, um, you know, on the East coast, so now I'm in middle Delaware, work up in Philadelphia, um, bought into a home remodeling company there that is just really, really blown up and taken off.

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We've doubled in business since I bought into it.

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And, you know, Philadelphia is a great place for it.

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800, 000 homes and they're all a hundred years old.

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So we have a ton of demand.

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So I just make money there.

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It put it back into real estate and that's how we started building the portfolio.

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So that kind of brings us up to today.

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Like you said, 27 doors.

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We're remote investors.

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So that's, um, all over seven states.

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We're about to go into state number eight and we're about to, we're under contract for three more units over in, uh, Abbottstown, Pennsylvania.

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Oh, so that should, yeah, that'll probably close.

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Uh, I would say within the next 30, 60 days.

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Yeah, seven states.

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Where are they?

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Because in the East Coast, you know, where you are, that could be all your neighbors, right?

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So that, you know.

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And it is.

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Yeah, that's a good point.

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Like, when I was down in Alabama, that was state number one.

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Um, and that's the only southern state we're in now.

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Um, when I came back up, yeah, it was a lot in the area.

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So, there's quite a few multi families, a sixplex, et cetera, in Maryland.

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Delaware, a couple multi families, including where I live now.

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An Airbnb, a big, beautiful Airbnb that we really love in Virginia, the lazy bear lodge, you can look that one up and then Pennsylvania, Jersey.

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And now more recently as of last year, um, we got really heavy into creative finance, like seller finance and subject to purchasing property, uh, properties.

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And a lot of those are in Ohio.

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There's a lot of great opportunities there because it's still one of the remaining States where the purchase.

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Price to rent ratio still makes sense.

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So that was our seventh date.

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Um, and then now we're going out into Western PA.

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Excellent.

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Okay.

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So let's, um, so a lot of our listeners probably don't know a term that you used here called house hacking.

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Can you describe what that is?

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Yeah, absolutely.

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It's in my opinion, the best way to get started in investing in real estate, which is one of the best stores of value and builders of wealth you can ever get into.

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And it's basically just renting out or making money.

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With a property that you are living in, and that can be anything that traditionally people think by a duplex, triplex, quadplex, that is the limit per government backed loans, which are the ones that are low money out of pocket, like V.

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A.

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F.

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U.

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S.

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D.

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A.

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F.

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H.

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A.

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Etcetera.

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Conventional 5%.

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So you can buy anything four units or under live in one unit, rent out the rest.

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And that's probably the one that most people have seen on Instagram reels and their local gurus, et cetera.

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But it doesn't have to necessarily stop there.

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Like I have a property right now that we're living in.

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That's a couple of acres, beautiful property out in the country in Delaware.

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It's got a barn with a horse stall.

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We You can sometimes rent out that horse stall, um, I've heard of people letting people rent out campers on their property, um, there's just all types of things.

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Rent out by the room.

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I've done that many times.

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If you can rent out other rooms, it doesn't have to be a multifamily property.

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So there are ways to house hack, even if it's not multifamily, that is just the most common way.

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That's the people most people are familiar with.

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Yeah.

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I actually, uh, I highly recommend house hacking, which is a newer term, right?

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Probably only in like the last, I don't know, maybe five years.

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I've heard it thrown around, but it's a strategy that's been around for a long time, but we really try to teach a lot of first time home buyers who have a hard time, you know, affording a mortgage now to use that strategy.

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Uh, especially if you're young, I mean, I, you know, we're trying to get my daughter, I had an agent who fresh out of college, bought a duplex, lived in one bedroom, rented the other bedroom, Airbnb.

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be right in the other side of the unit, Airbnb, she cashflow positive in the city of Denver, which nobody does.

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Right.

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And, uh, by quite a few thousand dollars a month, uh, by doing that, I mean, it's an amazing strategy that it can be really, really powerful.

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And for you as a veteran, it's probably even more powerful, right?

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Because you, like you said, you used a VA loan.

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So can you explain why you use that and why that is such a great strategy?

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Yeah, absolutely.

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And that's why house packing is so great because it's a twofold benefit for starters.

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Most people are, you know, Maybe intimidated by investing in real estate because they think it's expensive and it is if you do it a certain way, you know Even the average Investor who's maybe savvy is gonna pay most of the time 15 to 20 percent best case scenario down for rental property Even in a cheap market, one to 200, 000, that's 000 before we even get to closing costs.

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So the best benefit, in my opinion, the number one is the fact that you can come with not as much money out of pocket and you hit on something really great, a young homeowner.

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The average 401k retirement age is 187, 000 in America.

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The average home equity average retirement age in America.

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It's 360, 000, which means inadvertently most of the time, probably the best store of value in the whole world is your primary residence.

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And that's something that you have to have, even if, whether you're an investor or not, it's something you were going to have anyway, a primary residence, a place to live.

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And that's number two, your biggest expense in America is going to be most of the time your housing expense for most Americans, 30 percent or more of your income.

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So even if you don't have a home run house pack, that's going to make you money saving.

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50 percent or more on your most expensive out of pocket expense each month is a huge hack.

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So I love the name house hacking.

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You get into real estate, you get into investing, you get into wealth creation early, cheap, and even if you're not cash flowing, it's still going to take a huge chunk out of your biggest expense.

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It's a real life hack.

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Yeah, that's right.

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And again, if you're young, usually you, you got roommates already anyways, right?

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So why not have them pay you rent, right?

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Have them pay for your mortgage while you're there.

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Um, again, another friend of mine, he actually, he's in a mastermind, young guy, really smart.

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He was making a great, he had his first job out of college.

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He was already making about 80 grand a year and he bought himself a house.

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Uh, it had like four bedrooms, but he chopped it up like Turned the living room, dining room, everything into more bedrooms, the basement he finished it, put more in there.

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And he was still, that way he was making like a couple thousand dollars a month.

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He ended up quitting his job at like a couple years out of college and he just loves life, you know, which is wild.

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But again, I want to go back to another and even, there's many ways to do this.

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The point is, there's many ways to do this.

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Anywhere in the country, the strategy might vary, right, by, based on the housing stock or whatever.

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But, uh, there are many ways to do it.

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You described a stable.

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I never heard of that one.

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That's a great one.

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Right?

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If you're out in a rural area, you say, you know, you got all this land and a stable.

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Hey, let people park their RVs there and, and rent out the stable for extra rent.

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That's amazing.

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But again, you had an even bigger advantage, which was you're a veteran.

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And you got to use the VA loan.

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Why is that such a great advantage?

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So it's a great advantage because it not only has the benefit of 0 percent down, so most of the other ones, you'll get 5 percent down, 3.

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5 percent down.

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Those LTVs are amazing.

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You can get into very Very big deals for very little out of pocket using those, but VA is zero.

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Also the private mortgage insurance that comes along with putting less than, uh, you know, getting into a less than 80 percent LTV loan, you know, that's a few hundred dollars a month that it can eat up a lot of cashflow.

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And if you structure the VA loan.

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Um, you most of the time don't pay PMI either.

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So one of my first deals was a duplex in New Jersey and same thing, I came to that closing table with maybe 13 cents or something silly because the VA loan is nothing out of pocket.

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And the best part, I guess the second best part is the fact that you can use it more than once.

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A lot of people don't know that.

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If you are a veteran, if somebody in your family is a veteran, you can use it once.

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You have to live in the property.

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It's very important that, you know, everybody understands you by law have to live in the property.

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You can't, if you use it for an investment, you are a criminal.

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You have to live in the property.

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And as soon as you live there for a year and fulfill that requirement, you can go out and leave, still keep that VA loan and rent it out legally, and then go buy another one with the VA loan again.

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So you have your, your total amount that you can use.

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I believe they call it an entitlement that allows you to buy up to a certain amount of real estate, regardless of how many properties that is.

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So it's just a mentally powerful mentally.

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Yeah.

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I mean, what an advantage in it.

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And I'm so happy that our country does this, uh, offers this.

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And I, I wish.

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You know, uh, more of our veterans did this because you deserve to be rewarded and get, you know, own a piece of the American dream after serving our country.

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Right.

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Uh, but yeah, you, not only are you able to get in with zero down, like you said, possibly no PMI, um, but also your rates are typically lower.

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Um, Then the normal market rate right now, we're, we're hovering around 7%, you know, give or take depending where you are, but you know, your, your, your FHA and VA loans are, uh, about a half a point less than that.

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And then you can, so, so this is significant.

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Savings, which is great.

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And yeah, like you said, I mean you live there a year and a day And uh, and then you can do it again and just keep stockpiling your portfolio And that's why I advise people when they're young because um, you know Once you start having a family those moving around becomes really inconvenient It's not as fun, you know, you're significant other with your kids.

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It's a big pain in the butt.

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You want to get settled and all that.

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So I recommend, you know, get out and do it as often as you can.

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I would be buying a house every year in a day.

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You know, if I, if I could, it's just a great way to get the portfolio.

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Yeah.

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Yeah, it is.

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And what I like about it is the fact that, like you said, you lock in all the rate to begin with, but the average American moves every eight years and most people sell, buy another one, sell, buy another one.

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Well, most of, because the banks know that, anybody who's seen the amortization tables here knows all that interest is front loaded.

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So if you start, like you said, young.

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Buy a property, keep it, rent it out when you buy your new one and just hang on to that old one as long as you can.

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Eventually that amortization table flips and you start paying off equity, start paying off principal and less interest every month.

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And that is when the real wealth creation comes because you get a couple of properties increasing in value, loan pay down, gets more and more every year.

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It's a crazy, crazy hack.

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When you start combining these principles, they have synergy.

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Absolutely.

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Yeah.

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You know, and along those lines, we're in danger of geeking out on real estate today.

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So apologies to our real estate listeners, I mean, non real estate listeners, but you know, um, we've, we've all, we all now all in this country understand inflation, right?

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Cause we just went through crazy inflationary times, right?

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And we all get it just by if we buy eggs, right?

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But housing inflation is.

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Always been this way.

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I mean, 5 percent inflation on housing in most markets in the U.

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S.

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is kind of a standard.

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I think the average for like the last 20 years was about 5 percent in this country.

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So, and that usually will outpace Inflation, right?

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We're, we're fighting hard to get back down to a 2 percent inflation.

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So if you really think about it, you buy a house, you lock it in and yeah, that value is going up every year at 5 percent in, you know, so it's just like you are, you are getting, you're living in a place.

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Hold on.

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You hold on to it, and it is making you more money, more wealthy, um, you know, the longer you hold on to it, right?

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So, and if you've gotten used to Yeah, completely agree.

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Yeah, if you got used to getting in by renting it out, uh, initially as you were house hacking, you lived in there, rented to roommates or the other units to other tenants or whatever, then just keep doing it.

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Hold on.

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Hold on for a long time.

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And you can, you can, uh, really build a lot of wealth that way, right?

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Completely agree.

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So well said.

00:15:16.109 --> 00:15:19.509
And really, I think a lot of it is about flipping your mindset.

00:15:19.629 --> 00:15:22.359
Most people who work a W 2 job hate Mondays.

00:15:22.609 --> 00:15:25.318
Well, as soon as you become an entrepreneur, Mondays can be your favorite day of the week.

00:15:25.619 --> 00:15:30.729
Well, in real estate, you know, most Americans, we all hate inflation because it means our grocery bill goes up, this and that.

00:15:31.139 --> 00:15:32.528
Well, what if you're in real?

00:15:33.168 --> 00:15:37.308
Estate and inflation means that your portfolio grows in value by 10 percent every year.

00:15:37.308 --> 00:15:38.979
You're going to love inflation in that case.

00:15:39.528 --> 00:15:41.558
And nobody loves inflation because it's not good for your country.

00:15:41.558 --> 00:15:43.308
So if you're patriotic, that's not right.

00:15:43.359 --> 00:15:46.278
But in general, you can at least not be afraid of it anymore.

00:15:46.548 --> 00:15:55.869
So be be part of the rich or whoever or the wealthy who invites or is not afraid of inflation because it benefits you build an asset portfolio.

00:15:56.389 --> 00:15:57.609
Yeah, totally.

00:15:58.058 --> 00:16:01.288
So, you know, you, you got 27 doors in seven states.

00:16:01.339 --> 00:16:11.149
I'm assuming, you know, you haven't lived, you haven't been building this portfolio for 27 years in 27 days, that would be right across the seven states.

00:16:11.158 --> 00:16:13.469
So that's not the only strategy you've used, right?

00:16:13.688 --> 00:16:21.609
I know you mentioned a few others at the beginning, some seller financing, some sub two, what are, what are some of those strategies you're using to acquire these properties?

00:16:22.948 --> 00:16:23.208
Yeah.

00:16:24.208 --> 00:16:29.469
So if you're looking for a single family and if you're looking in the right markets, my market was Alabama where I was stationed.

00:16:29.889 --> 00:16:34.719
The property there actually is really cheap and the price to rent ratio is good.

00:16:35.119 --> 00:16:37.318
One of the first properties I ever bought was for 70, 000.

00:16:37.318 --> 00:16:40.349
It was a little townhouse, single family, two or three bedroom, I forget which.

00:16:40.658 --> 00:16:43.759
And that thing now rents for like 1, 200 and the mortgage is still 450.

00:16:44.339 --> 00:16:50.469
So as long as you're in the right area, um, your single families can still do really well.

00:16:51.364 --> 00:16:56.854
And the way you purchase those can be as low as, um, 15 percent down without living in it.

00:16:56.854 --> 00:17:04.933
This is not an owner occupied loan, but most lenders, and I even know a couple of credit unions that'll go down to five on single families investment properties.

00:17:05.253 --> 00:17:14.683
So you can still go to the conventional, the traditional, um, bank route and do well and have low out of pockets expense and, you know, have good velocity in building your portfolio.

00:17:15.318 --> 00:17:21.979
The better way to do it, in my opinion, because it allows you to do it in any state, anywhere you want, anytime is creative finance.

00:17:21.979 --> 00:17:23.148
You know, I, I believe I.

00:17:24.433 --> 00:17:34.723
Pace Morby is going to be made famous for coining the term, but subject to and seller finance are incredibly, incredibly powerful tools for buying anywhere with low money out of pocket.

00:17:34.993 --> 00:17:48.894
So for example, last year, most of what we bought in Ohio was either subject to seller finance or some combination of the two, for those that don't know, you just subject to is just taking over an existing mortgage and making payments on a mortgage that is in somebody else's name and already in place.

00:17:48.894 --> 00:17:50.064
You don't go out and get your own loan.

00:17:50.743 --> 00:17:53.153
And then seller finances, just as it sounds, you know.

00:17:54.233 --> 00:17:56.604
No, basically the seller is financing you.

00:17:56.604 --> 00:17:57.634
They're saying, I'll give you the house.

00:17:57.634 --> 00:17:59.044
You just make a monthly payment to me.

00:17:59.354 --> 00:18:02.824
Usually involves a down payment, but it's usually way less than what you would pay a bank.

00:18:03.223 --> 00:18:07.384
So they're just incredibly powerful tools to get into these properties, these rental properties.

00:18:07.604 --> 00:18:09.324
There's no occupancy requirement.

00:18:09.334 --> 00:18:10.693
It's low money out of pocket.

00:18:11.443 --> 00:18:13.723
And also you're usually you or the wholesaler.

00:18:13.723 --> 00:18:16.733
I bought a lot of properties from wholesalers are the ones negotiating the deal.

00:18:16.733 --> 00:18:21.443
So if you're a good negotiator, you're going to get great terms, which means you're going to have low out of.

00:18:21.903 --> 00:18:26.354
Pocket expense each month, your loan payments going to be low each month with future cash flows higher.

00:18:26.614 --> 00:18:31.844
So you can get better deals, faster deals, keep going faster because you keep more money in your pocket as an investor.

00:18:32.294 --> 00:18:33.703
Um, it's really, really powerful.

00:18:33.703 --> 00:18:38.374
Those would be the three ways I would do it other than house hacking to move fast and real estate and investing.

00:18:39.479 --> 00:18:39.808
Yeah.

00:18:40.499 --> 00:18:40.709
Yeah.

00:18:40.709 --> 00:18:41.419
That's really good.

00:18:41.729 --> 00:18:43.489
Let's dissect those one by one.

00:18:43.548 --> 00:18:50.919
Uh, so, so seller financing, by the way, no, with no disrespect to pace Morby, these terms have been around for ages.

00:18:50.919 --> 00:18:56.909
Every time there's a turn in the market I did in 2008 crash, I was doing a lot of subject to and all kinds of stuff.

00:18:57.298 --> 00:19:03.919
People haven't even might've forgotten the term short sales now cause we don't see them anymore, but they're going to come back and all these are just go in cycles.

00:19:03.919 --> 00:19:04.179
Right?

00:19:04.489 --> 00:19:15.328
So, so, but like seller financing subject to let's take seller financing Is essentially an owner who has equity in the property and they are financing their equity to you.

00:19:15.588 --> 00:19:15.919
Right.

00:19:15.929 --> 00:19:17.148
It could be all of it.

00:19:17.719 --> 00:19:19.558
Um, it's part of it.

00:19:19.598 --> 00:19:20.489
What have you, right.

00:19:23.308 --> 00:19:25.769
And really one of the best.

00:19:26.624 --> 00:19:26.973
Go ahead.

00:19:27.973 --> 00:19:28.983
No, you please.

00:19:31.394 --> 00:19:36.864
I was just going to say, one of the ways he describes it, which I really think is genius, is that one is pain and one is gain.

00:19:36.874 --> 00:19:45.084
For a property owner, usually somebody maybe older that's a tired landlord, et cetera, their house is paid off.

00:19:45.324 --> 00:19:48.884
And if, let's say, they're going to sell the house, what do they plan on doing with that money?

00:19:48.884 --> 00:19:53.663
You know, most of the time they have a little bit of money, they've already got a retirement plan, most of them are already retired.

00:19:54.394 --> 00:20:02.203
But he retired, so they're more than willing to just leave the money, you know, in the property and just take a monthly payment from you.

00:20:03.483 --> 00:20:09.433
And they usually get some sort of interest, some sort of, some sort of down payment, but they don't owe any note to the bank.

00:20:09.584 --> 00:20:13.453
So they can just basically say, you take this property, give me 50, 000 right now.

00:20:13.753 --> 00:20:18.023
And then instead of the bank getting 7 percent on you buying my property, I'll take the 7%.

00:20:18.034 --> 00:20:23.874
They become the bank and anybody who has really seen what interest adds up to over 30 years on a 30 year fixed mortgage.

00:20:24.913 --> 00:20:28.243
Basically, every time somebody buys the house, they're buying that bank a house too.

00:20:28.713 --> 00:20:30.894
So seller finance is powerful for both parties.

00:20:30.913 --> 00:20:32.713
It's powerful for the buyer and for the seller.

00:20:32.713 --> 00:20:36.614
A lot of people make their living for teller financing properties to people.

00:20:36.614 --> 00:20:37.594
I know a lot of people that'll.

00:20:38.239 --> 00:20:46.568
Seller finance the house the buyer forecloses or sorry the buyer defaults and they take the house back and sell to somebody else I know guys have sold the same house five times.

00:20:46.979 --> 00:20:54.138
Yeah, so it's very powerful for both parties and it's also kind of misunderstood I think for that reason it's not you're not getting over on the seller.

00:20:54.179 --> 00:20:55.959
The seller is is winning too.

00:20:55.959 --> 00:20:57.503
It's a win win That's right.

00:20:57.983 --> 00:21:02.314
Yeah, so, so for people who wonder why would a seller do that, you're right, those are some of the reasons.

00:21:02.314 --> 00:21:12.933
Other ones are also very advantageous tax wise, I mean, uh, you know, when a seller sells a home, oftentimes they have to pay a big capital gains amount from all that gain that's happened in the appreciation.

00:21:12.933 --> 00:21:18.284
So they'd rather say, oh no, we'll just lend it, you know, you know, you the money on it and they're not paying as much, right?

00:21:18.354 --> 00:21:20.294
Um, that's something to consult with a CPA on.

00:21:20.294 --> 00:21:24.943
So yeah, if you don't need a big chunk of change to a seller, that's more advantageous.

00:21:24.943 --> 00:21:26.183
They'd rather have the cashflow.

00:21:26.814 --> 00:21:27.193
Right.

00:21:27.413 --> 00:21:35.913
And, uh, and I've also seen, um, where they provide almost, you know, they, they might, you know, it doesn't, they don't have to own the whole house outright.

00:21:36.273 --> 00:21:44.023
They can sell it with, you know, the existing one in place, like you described subject to, and then the gap between that and the equity is another amount.

00:21:44.403 --> 00:21:54.854
You know, um, or, or just, uh, you know, suitable mortgages, I think pretty much more common now, much easier to do, I think, than they were, you know, 15 years ago.

00:21:54.913 --> 00:21:59.703
Um, but you can assume an old mortgage and, uh, because there's more of those available.

00:21:59.703 --> 00:22:09.128
And then, uh, And then use seller financing for that gap if you don't have it if there's enough equity there as well Uh, so there's a lot of ways to structure that.

00:22:10.909 --> 00:22:12.838
Yeah, what about that one?

00:22:12.838 --> 00:22:28.223
I was telling you about the That's uh coming up in abbottstown is a hybrid deal with exactly what you're describing a lot of people don't know you can assume All types of government loans in some of these conforming loan documents, they teach you how to either assume or take the mortgage over subject to.

00:22:28.453 --> 00:22:34.993
So I'm assuming half of this purchase price, assuming loan meets is qualifying for it for your viewers, and then they're still financing the other half.

00:22:34.993 --> 00:22:36.124
So it's like a hybrid deal.

00:22:36.354 --> 00:22:37.574
So you can combine these methods.

00:22:37.594 --> 00:22:38.183
It's really great.

00:22:38.713 --> 00:22:39.804
Yeah, yeah, totally.

00:22:40.064 --> 00:23:02.963
I've even seen some, Jefferson, where, uh, actually there's a gentleman I know that has a deal out in Lawrenceville, Kentucky, I believe it is, that he's been trying to get me to buy it from, it's an old gas station with a bunch of land that you can develop, and, and he's offering it for, I forget the amount for the land and the property and, and all that, but, um, He's also willing to roll in extra cash.

00:23:03.503 --> 00:23:09.463
Um, and he'll own it and he'll finance the whole thing, like the land, the property and cash.

00:23:09.463 --> 00:23:10.864
So then you have cash.

00:23:11.054 --> 00:23:14.463
You're walking out with cash to go and develop the property.

00:23:14.463 --> 00:23:14.773
Right.

00:23:14.773 --> 00:23:15.223
Which is neat.

00:23:15.243 --> 00:23:18.604
And you see that more times than not.

00:23:18.604 --> 00:23:20.554
So there's all kinds of creative structures.

00:23:20.554 --> 00:23:20.844
Right.

00:23:21.153 --> 00:23:22.384
So this is cool.

00:23:22.644 --> 00:23:23.354
How about subject?

00:23:23.663 --> 00:23:30.763
This is You mentioned, you know, Sub 2, some people call it, um, This is, uh, making a big time comeback.

00:23:30.763 --> 00:23:31.923
You mentioned Pace Morby.

00:23:31.923 --> 00:23:33.564
He's a big influencer in the space.

00:23:33.564 --> 00:23:43.794
He's really, uh, uh, you know, I know he puts on boot camps and everything, and he's really, uh, become a popular figure with this, and a lot of people are using it and becoming aware of it.

00:23:44.314 --> 00:23:45.463
How would you describe that?

00:23:48.614 --> 00:23:59.453
Yeah, um, definitely just taking over an existing mortgage, assuming qualifying for it, subject to is basically just leaving the existing loan in place and not qualifying for it.

00:24:00.074 --> 00:24:08.239
So, it's a little bit riskier in my opinion, but it's even more powerful because the You don't have to negotiate for an interest rate, the interest rate is already in place.

00:24:08.648 --> 00:24:18.618
And there's now, because of what we went through during COVID, a whole treasure trove of low interest rate mortgages out there that you can go and take over subject to.

00:24:19.068 --> 00:24:29.598
So one of the challenges yet is that technically the bank is probably not going to want to hear about it because you're changing title without paying off the loan and they don't necessarily like that.

00:24:29.983 --> 00:24:30.294
that.

00:24:30.663 --> 00:24:31.814
But it's also not illegal.

00:24:31.814 --> 00:24:33.854
There's nothing, you know, inherently wrong about it.

00:24:34.233 --> 00:24:37.864
Um, the reason why they probably don't like it is just because somebody's responsible for a loan.

00:24:37.874 --> 00:24:40.683
Now that is, uh, not one that qualified for it.

00:24:41.054 --> 00:24:44.413
However, if you think about it, they really shouldn't have too much of a problem with it.

00:24:44.413 --> 00:24:50.743
Because if somebody most of the time, that's why Always refers to it as a pain type situation.

00:24:52.054 --> 00:24:59.074
A lot of the reason the subject two has come up is because somebody might have gotten into trouble that you can save a, a lot of the subject two I bought is saving somebody from foreclosure.

00:24:59.074 --> 00:25:14.034
They were going to foreclose and have that on their record for however long, seven years, and you just come along and take over the mortgage so that, um, they don't have that happen.

00:25:14.064 --> 00:25:15.503
And then you just start making the payments.

00:25:15.503 --> 00:25:16.673
You log into the portal.

00:25:17.128 --> 00:25:18.568
Um, make the payment for them.

00:25:18.709 --> 00:25:29.239
And then a lot of the times the unsung hero of it is you get to work your way into a loan that's already two, four, six, 10 years into its amortization schedule.

00:25:29.999 --> 00:25:33.439
So like we talked about earlier, all these mortgages are front loaded with interest.

00:25:33.739 --> 00:25:38.929
Well, subject to you might've already gotten through 10 years and you might be paying now more principal than you are interest.

00:25:39.128 --> 00:25:39.778
It's incredible.

00:25:41.719 --> 00:25:42.068
Yeah.

00:25:42.068 --> 00:25:45.378
So a few things I want to highlight there, if you don't mind.

00:25:45.378 --> 00:25:55.588
So my understanding when I was doing subject to back in the day was basically you're taking title to the property subject to the existing mortgage and that's where the term came from.

00:25:56.009 --> 00:25:56.308
Right.

00:25:56.318 --> 00:26:00.469
So, um, but, and like you said, it is usually a distress situation.

00:26:00.788 --> 00:26:10.318
So, um, You know, I, I, I, I like to make people aware, you know, uh, you know, use your own ethics here on it all.

00:26:10.318 --> 00:26:22.989
But, you know, you wanna be fair to, I think to the owner, they're in a hardship situation, could have been, you know, a death, divorce, uh, you know, they just lost their job, bankruptcy, all kinds of issues that could happen, right?

00:26:23.019 --> 00:26:26.378
And, and oftentimes they just need to get out of this.

00:26:26.709 --> 00:26:28.179
Uh, and it is a relief to them.

00:26:28.588 --> 00:26:35.219
However, they often cannot really rebuild because they do have this existing mortgage in their name out there.

00:26:35.219 --> 00:26:43.828
So it's just, it is something you want to, they can't usually go out and buy another house because they're not going to get a mortgage if, you know, um, if they have this other one in place.

00:26:43.828 --> 00:26:50.038
Or, or, I mean, there are ways, I guess, if you have the income or all that, but just, uh, you, you want to be really fair.

00:26:50.239 --> 00:27:13.134
You want to be really, you, you know, the, the risk is really in the homeowners, um, I think it's a greater risk to them than to you, and oftentimes, so you really, really want to make sure you operate with high ethics, high morals, and be really fair to the owner on those kind of situations, but otherwise, yeah, it's a great way to help somebody out and yourself, right?

00:27:14.653 --> 00:27:16.784
Yeah, I completely agree.

00:27:16.814 --> 00:27:19.433
I mean, you already know, as a soldier, integrity always comes first.

00:27:19.834 --> 00:27:24.913
Um, and the way I always deal with it, because it can be a gray area, is I always just ask, what is the alternative?

00:27:24.913 --> 00:27:26.253
What will happen if you don't do it?

00:27:26.534 --> 00:27:29.054
And for most people, foreclosure is the worst thing that can happen.

00:27:29.443 --> 00:27:35.094
So, some may view it as taking advantage of somebody that's in a distressed situation, and that's fine.

00:27:35.183 --> 00:27:37.794
You know, if somebody wants to take that ideology to the grave, that's fine.

00:27:37.794 --> 00:27:47.098
But ultimately, both people win, because honestly, once you take over the mortgage, and an investor is Statistically speaking, more likely to be in a good place to be able to keep that mortgage paid up.

00:27:48.848 --> 00:27:50.169
That actually builds their credit.

00:27:50.169 --> 00:27:51.519
A lot of people don't think about that part.

00:27:51.759 --> 00:27:57.318
You know, we, we have a vested interest as investors to keep that loan paid up, um, keep building credit.

00:27:57.608 --> 00:28:07.878
And then you can also show a new lender, if they want to go buy another house, as I'm sure you're aware, Louie, you can, for one, prove that somebody else is paying that mortgage and you are not.

00:28:08.358 --> 00:28:10.249
And there's a bunch of different ways to do that.

00:28:10.298 --> 00:28:12.719
Um, loan servicing companies can do stuff like that.

00:28:12.719 --> 00:28:22.699
They can write letters and say, after a year, especially, um, this guy whose name is on this loan, he is not paying any of it and that gives all his DTI power back to him.

00:28:22.699 --> 00:28:24.538
And they can go and qualify for a loan.

00:28:24.538 --> 00:28:25.118
I've seen it happen.

00:28:25.528 --> 00:28:27.348
No, yeah, you're, you're exactly right.

00:28:27.348 --> 00:28:32.409
As long as you, as long as you go about it the correct way, it's, it's an absolutely magical thing.

00:28:33.169 --> 00:28:34.588
So both parties, it really is.

00:28:34.769 --> 00:28:35.058
Yeah.

00:28:35.058 --> 00:28:36.028
It's a, it's a great one.

00:28:36.209 --> 00:28:42.378
And like you said, uh, you know, pre COVID our rates were, you know, two and a half to 4%.

00:28:42.909 --> 00:28:48.239
So, uh, those are great rates to that make a lot of numbers work as an investor now.

00:28:48.298 --> 00:28:53.788
And, and it could, you know, uh, allow somebody to get out of their house when otherwise they couldn't.

00:28:53.939 --> 00:28:54.189
Right.

00:28:54.378 --> 00:28:56.259
So, yeah.

00:28:56.439 --> 00:28:56.818
Excellent.

00:28:57.509 --> 00:29:07.058
What, um, what, so, so is most of the property that you're taking just, uh, you're, you're, you're looking for, what is it, what is your exact strategy?

00:29:07.118 --> 00:29:17.199
I mean, you look for any type of property that will cashflow or you mentioned, uh, the cost to rent, uh, ratios, the price to rent ratios.

00:29:17.209 --> 00:29:18.788
Like what, what is that for you?

00:29:20.648 --> 00:29:21.028
Yeah.

00:29:21.028 --> 00:29:27.148
So, I mean, the easiest rule of thumb I, I have gone with over the years is just the 1 percent rule.

00:29:27.169 --> 00:29:39.259
You know, as long as the purchase price is sorry, as long as it will rent for long term rent here, 1 percent of what the purchase price is, then you've generally got to deal a little cashflow and everybody has their own personal threshold.

00:29:39.259 --> 00:29:44.499
But for me as an investor, it's usually one to 200 of free cashflow.

00:29:44.509 --> 00:29:48.148
I'm talking net cashflow after all expenses paid.

00:29:48.409 --> 00:29:49.469
Uh, per door.

00:29:49.499 --> 00:29:57.709
So if it's a quadplex, I need to have mortgage, maintenance, utilities, snow removal, every other expense you can possibly think of capex.

00:29:57.898 --> 00:30:01.548
All has to be paid as long as there's one to 200 left per door at the very end.

00:30:01.848 --> 00:30:05.469
So for a quadplex or 800, then that's a good deal.

00:30:06.739 --> 00:30:14.489
The second part that makes a good deal is if it's low money out of pocket, you know, if I make 10 grand a year on it.

00:30:15.019 --> 00:30:20.348
You know, net income on a property that I put a hundred grand out of pocket into 10%.

00:30:20.348 --> 00:30:21.808
I'll just go do the stock market for that.

00:30:22.249 --> 00:30:24.098
So it has to be low money out of pocket.

00:30:24.108 --> 00:30:26.088
That's why these house hacking is so appealing.

00:30:26.538 --> 00:30:35.128
Like I said, I mean, if you use a house hack right now, somebody watching your show to go buy a property zero out of pocket and live in it and house hack it.

00:30:35.138 --> 00:30:39.699
If you make even one dime, that's a million percent return right there because you didn't pay anything for it.

00:30:40.229 --> 00:30:44.729
So the, really the strategy is does it cashflow, which for me, I always use.

00:30:45.153 --> 00:30:48.374
30 percent of gross monthly rent, total gross monthly rent minus 30%.

00:30:48.403 --> 00:30:52.604
That'll pretty much account for all your expenses.

00:30:52.614 --> 00:30:57.374
You can have vacancies 5%, CapEx is 5%, maintenance, utilities, etc.

00:30:57.943 --> 00:31:08.493
If all of that, your total gross monthly rent minus 30 percent minus your mortgage payment, PITI, principal interest tax insurance, whatever's left after that, that is your true monthly cash flow.

00:31:09.104 --> 00:31:12.023
So as long as it cash flows, one to 200 per door.

00:31:12.439 --> 00:31:17.209
It's, I like to use the rule 10, 000 or less per door out of pocket, depending on the deal.

00:31:17.229 --> 00:31:22.618
You know, some of this stuff can change if it's a really high appreciating area, an Airbnb that changes everything, stuff like that.

00:31:22.618 --> 00:31:26.028
But as long as it meets those two criteria, you're generally looking at a good deal.

00:31:26.028 --> 00:31:40.148
I would say the only caveat to that, and this goes back to the whole cashflow versus appreciation debate is if you're in like a Toledo, Ohio, or, uh, you know, a Cumberland, Maryland, a place that's really, really maybe D E class, um, in real estate.

00:31:40.588 --> 00:31:45.179
And those properties, you'll be able to find very, very cheap stuff at incredible rent of price ratio.

00:31:45.449 --> 00:31:56.648
So I would say any place where the median household income is 60, 000 or more would be the last caveat because any, any place like that, you can go and buy a quadplex for 60 grand in cashflow.

00:31:56.648 --> 00:31:58.499
That's fine, but it's never going to appreciate.

00:31:58.798 --> 00:32:00.798
So those would be the main three if I had to pick them.

00:32:01.409 --> 00:32:09.489
Yeah, yeah, I would, um, you know, I live in Denver now, but I came from Baltimore, Maryland, where, so it's two extremely different markets, right?

00:32:09.499 --> 00:32:10.838
Like, Already know.

00:32:11.138 --> 00:32:11.628
Yeah.

00:32:11.929 --> 00:32:27.538
So, uh, I'll tell you, I mean, in Baltimore, I, I mostly flipped and I regret it because really it was a great cashflow market and I had some rentals there and, and it really is a fabulous, uh, uh, you know, appreciate, uh, I mean, uh, cashflow market, but the appreciation.

00:32:28.229 --> 00:32:43.909
You know, I, I think as of 2019, my last home in, in Baltimore had just gotten back to the pre 2008 prices in 2019, you know, so it's like, there's really no appreciation in markets like that.

00:32:43.949 --> 00:32:52.058
I mean, you know, now it's, it's been doing well the last couple of years, but you know, it's a long time, but you know, here in Denver, a lot of people just buy almost for net.

00:32:52.179 --> 00:32:58.229
Uh, for, for flat cash flow just because of the appreciation historically is so high.

00:32:58.628 --> 00:33:00.838
So, uh, we we've been a little more stagnant.

00:33:00.939 --> 00:33:10.219
I think these, uh, last couple years, but you know, We're starting to see the turn again, and then you just start to see like outrageous, uh, appreciation here.

00:33:10.219 --> 00:33:18.219
So people will just, you know, buy something just to break even knowing that in a couple years That's just gonna skyrocket, right?

00:33:18.269 --> 00:33:22.098
So Yeah, and it's not a bad play.

00:33:22.148 --> 00:33:33.884
I mean honestly Uh, and I've, I've been back and forth with a lot of Henry Washington back and forth about the debate, but really what it comes down to, I think cashflow is really just more for safety.

00:33:34.354 --> 00:33:39.064
Maybe at the end of your life, after 20 years, you'll have some good monthly cashflow that you can retire on.

00:33:39.064 --> 00:33:39.314
Sure.

00:33:39.314 --> 00:33:41.554
But for the most part, cashflow is for safety.

00:33:42.213 --> 00:33:44.953
Appreciation is for wealth building and net worth growing.

00:33:45.054 --> 00:33:45.733
It really is.

00:33:46.548 --> 00:33:56.689
Yeah, talk a little bit more about that because we, before we got on the air, we, uh, we're talking about real estate for wealth preservation versus wealth building, right?

00:33:56.689 --> 00:34:06.144
And this is, I, I'm a, I'm a little embarrassed to admit this, you know, I'm, I'm about to turn 49 and I'm just really, it's just a thought that has only consciously.

00:34:06.334 --> 00:34:13.273
Entered my mind in the last maybe year or so that that just makes a lot of it's really really hard to get wealthy in Real estate, right?

00:34:13.284 --> 00:34:20.543
Even though we all think about real estate that tycoons and all that but it's actually really difficult Why is that?

00:34:21.614 --> 00:34:34.083
Well, I think first and foremost people just underestimate the cost I mean, 100 percent passively, which in my opinion, that's what I do Everything gets out of source to property management.

00:34:34.773 --> 00:34:43.304
I don't do Anything myself, but I mean, even getting deals as cheap as I'm getting them and he's even getting them with the cashflow that I'm getting them for.

00:34:43.563 --> 00:34:49.684
It's just not, I mean, you're talking hundreds of dollars, maybe per door.

00:34:49.684 --> 00:34:50.134
And I get it.

00:34:50.134 --> 00:34:51.313
If you got 27 doors, okay.

00:34:51.313 --> 00:34:56.884
That's, that's quite a bit, but compared to what you could be, you know, that's not enough to replace a job.

00:34:57.114 --> 00:34:58.954
27 doors is a lot, actually.

00:34:58.954 --> 00:34:59.893
I mean, for the average.

00:35:00.293 --> 00:35:03.614
So that means somebody would have to take what I have double it or triple it.

00:35:04.483 --> 00:35:06.034
And that's just to make like your.

00:35:06.344 --> 00:35:08.963
You know, maybe a 60 to 100, 000 salary.

00:35:09.483 --> 00:35:10.063
Go get a job.

00:35:10.083 --> 00:35:11.313
You can make that a lot faster.

00:35:11.503 --> 00:35:13.074
It's not for making money.

00:35:13.793 --> 00:35:24.134
One of the reasons why it works so well is because all you have to do, your bare bones minimum is just to break even and your loan pay down and your appreciation will grow your net worth.

00:35:24.143 --> 00:35:28.184
That's how I hit my first million in net worth was just, just, it wasn't the cap.

00:35:28.244 --> 00:35:31.963
It was just sitting there and letting it appreciate and loan pay down.

00:35:31.963 --> 00:35:34.914
You're already delegating the task of the mortgage payment to a tenant.

00:35:35.454 --> 00:35:39.204
So most people like to watch their home value, their primary home value go up on Zillow.

00:35:39.213 --> 00:35:40.074
We all love to do that.

00:35:40.244 --> 00:35:41.673
It's really fun to watch your equity grow.

00:35:41.943 --> 00:35:49.914
We'll now multiply that by a whole portfolio and every single year, every single COVID year where it shoots up the values going up, but it's like.

00:35:50.259 --> 00:35:53.998
Two fold because as time goes on, that loan pay down gets more and more.

00:35:53.998 --> 00:35:57.309
It's more and more principled, but you keep adding more and more to the portfolio.

00:35:57.918 --> 00:36:10.353
So one of the reasons why it's such a great net wealth building tool is because it hits from three different angles and that is before we get to the tax, it's the best tax haven in the whole wide world last year, I had a problem.

00:36:10.353 --> 00:36:14.559
I think it was between a 60 and 70, 000 tax bill federal.

00:36:15.318 --> 00:36:24.458
And because I got real estate professional status, which for people to know just means You do real estate somewhat full time because I'm a contractor.

00:36:24.458 --> 00:36:25.969
So that's technically a real estate profession.

00:36:26.824 --> 00:36:34.244
And what that allows you to do is bonus depreciate properties and take these massive, massive losses that are only on paper.

00:36:34.264 --> 00:36:38.244
I'm not actually losing any money, but they're on paper losses for every property that you buy.

00:36:38.483 --> 00:36:43.273
So the bigger portfolio you build, the more you can write off these huge losses against your active income.

00:36:43.693 --> 00:36:48.103
And so you end up on 60, 70, 000 getting a 000 tax return.

00:36:48.713 --> 00:36:54.884
So If we don't even talk about the tax benefits, it's just one of the best wealth builders in the world.

00:36:54.923 --> 00:36:59.514
And once you get a tax bill like that, or a tax refund like that, stick it right back in real estate.

00:36:59.833 --> 00:37:00.273
That's right.

00:37:01.023 --> 00:37:13.443
Yeah, what I've learned is, um, especially now, I work with more family offices and institutions and high wealth individuals, and they all make, you know, their money in something else.

00:37:13.614 --> 00:37:14.983
And then they all go to real estate.

00:37:15.389 --> 00:37:18.559
I mean, just more and more people who are anti real estate people.

00:37:18.949 --> 00:37:22.599
They find out, you know, they start to realize how much they have to pay in taxes.

00:37:23.099 --> 00:37:27.139
You know, they have a hard time making the kind of money they got lucky with once.

00:37:27.489 --> 00:37:30.239
Uh, which, you know, it isn't all luck, it's hard work and all that.

00:37:30.239 --> 00:37:31.898
But luck plays a big deal in building wealth.

00:37:31.898 --> 00:37:33.619
And I think any wealthy person will tell you that too.

00:37:33.998 --> 00:37:38.259
But, um, so they, um, they realize real estate is the place to go.

00:37:38.259 --> 00:37:39.918
Because you're right, it helps you.

00:37:40.168 --> 00:37:41.818
It's very tax advantaged.

00:37:42.398 --> 00:38:14.648
You're taking Basically fake losses all the time on paper while it's going up in value and hopefully it's cash flowing as well I mean, it's just nothing else like it, you know, and now there's all kinds of great programs There's things called opportunity zones and such that you know, we won't get into here, but I've got client who've made you know Eight figures in another big business, and they're afraid of paying a tax bill, and they're putting it into an opportunity zone development and therefore not having to pay any of the taxes.

00:38:14.728 --> 00:38:21.168
They're delaying that tax, and then all the money that grows off of that, they won't have to pay any tax if they keep it in there, which is.

00:38:21.393 --> 00:38:22.494
Just amazing stuff.

00:38:22.563 --> 00:38:24.423
And that, that's why real estate is powerful.

00:38:24.434 --> 00:38:28.344
It's not to actually get rich off of it initially.

00:38:28.344 --> 00:38:33.634
It's, it's find another way to make, get rich and then get richer and preserve that.

00:38:34.373 --> 00:38:39.643
Uh, because we are going to continue to inflate, have inflation and lose the value of our dollar over time.

00:38:39.643 --> 00:38:39.994
Right.

00:38:42.603 --> 00:38:43.514
Anyhow, well, this is exciting.

00:38:44.034 --> 00:38:44.563
Absolutely.

00:38:44.664 --> 00:38:49.313
And I love that you said that because it's like, you can't stop inflation, but make it work for you.

00:38:49.873 --> 00:38:50.463
How's that?

00:38:50.864 --> 00:38:57.233
Cause I, I can't imagine the people that go to their accountants and I'm, my account tells me all the time, you know, how often he gets, what can I buy?

00:38:57.233 --> 00:38:58.003
What can I expense?

00:38:58.014 --> 00:38:58.773
What can I write off?

00:38:58.773 --> 00:39:00.534
Everybody, the first step is to make it.

00:39:01.704 --> 00:39:03.103
Second step is to preserve it.

00:39:03.114 --> 00:39:05.753
So as soon as people start making money, like you said, they start panicking.

00:39:05.753 --> 00:39:07.594
Well, how do I deal with this tax bill?

00:39:08.103 --> 00:39:09.574
The first question left is what can I buy?

00:39:09.583 --> 00:39:10.414
What can I buy?

00:39:10.463 --> 00:39:15.083
And instead of, Hey, what if I buy a G wagon this year, a good account will tell you, Hey, go buy a building.

00:39:15.824 --> 00:39:16.583
That'll be great.

00:39:16.594 --> 00:39:16.873
Great.

00:39:16.873 --> 00:39:17.983
Right off depreciation for you.

00:39:18.393 --> 00:39:18.914
That's right.

00:39:19.434 --> 00:39:19.864
Yep.

00:39:21.324 --> 00:39:21.543
Cool.

00:39:21.543 --> 00:39:26.873
Well, Jefferson, this has been fun, uh, having actually geeked out on real estate on this show in a long, long time.

00:39:26.873 --> 00:39:29.454
So, uh, it's kind of, kind of cool.

00:39:29.483 --> 00:39:35.164
Um, but on that note, why don't we hop over to our world famous Wayfinder 4?

00:39:35.344 --> 00:39:40.724
You're our first Wayfinder 4, uh, answer of 2025.

00:39:42.344 --> 00:39:45.219
So, um Boop, boop! That's right.

00:39:45.389 --> 00:39:47.429
So Jefferson, give us a hack.

00:39:47.528 --> 00:39:55.248
This is something you use to kind of cheat life with every day like a life.

00:39:55.248 --> 00:39:56.148
Oh about anything.

00:39:59.028 --> 00:39:59.858
Oh, okay.

00:40:00.539 --> 00:40:00.938
Sure.

00:40:00.989 --> 00:40:01.418
Yeah.

00:40:01.528 --> 00:40:09.878
Um, I would say probably the biggest tag you can do is just to be bold because I heard somebody say a funny one.

00:40:09.998 --> 00:40:19.619
If you talk to yourself as if to say, How funny would it be if I did this and it actually worked, or if I did this and got away with it, or if I did this and ended up like getting rich somehow.

00:40:20.278 --> 00:40:23.938
Yeah, that's a good way to talk to yourself, because a lot of the time it's the truth.

00:40:24.028 --> 00:40:31.889
Fortune favors the bold, and a lot of times, like I've heard, uh, Dan Martell say a lot, you're never gonna make more than you think you deserve to make.

00:40:32.048 --> 00:40:33.838
Imposter syndrome is such a real thing.

00:40:34.208 --> 00:40:39.259
So stop limiting yourself, be bold, whatever you think this crazy thing is, just go do it.

00:40:39.259 --> 00:40:39.958
I don't care what it is.

00:40:40.559 --> 00:40:44.128
Shoot first, ask questions later, because you just don't have that much time.

00:40:44.449 --> 00:40:48.579
And one of the biggest secrets of the wealthy that I have learned, Cody Sanchez talks about it all the time.

00:40:48.588 --> 00:40:52.778
A lot of heavy hitters talk about it all the time, is velocity, speed.

00:40:53.068 --> 00:40:58.048
The best guys in the world that are doing it fast, or sorry, doing it big, are doing it fast.

00:40:58.079 --> 00:41:02.059
Make decisions quick, be bold, and stop being so scared of everything.

00:41:02.059 --> 00:41:08.418
Stop listening to your aunt's, uncle's, grandma who, you know, didn't do so well in real estate because of one bad rental one time.

00:41:08.429 --> 00:41:08.858
Stop it.

00:41:09.298 --> 00:41:09.978
Just go do it.

00:41:10.943 --> 00:41:12.494
Make it happen, make mistakes, and be bold.

00:41:13.329 --> 00:41:13.659
Yeah.

00:41:14.259 --> 00:41:14.798
Yeah.

00:41:14.809 --> 00:41:23.579
Some of our listeners know I, I got wiped out in a way and I was scared and I would have, I still carry a lot of that trauma and it slows me down and it holds me back.

00:41:23.998 --> 00:41:36.688
And, uh, unfortunately, but you know, you know what happened after 2008 was we had the greatest real estate boom in the history of our country, you know, and I didn't participate for 10 years of that because I was just scared.

00:41:37.248 --> 00:41:39.978
And I was just like, oh, real estate is it doesn't work.

00:41:39.989 --> 00:41:57.998
It's you know, and I'm like wow What if I just would have quickly learned and moved on and gone back at it again, you know So I think your your advice is really great You know, what about a favorite this could be anything book show activity Whatever.

00:42:02.048 --> 00:42:08.963
Um, I would really have to say and I don't know if it really counts But it's kind of all encompassing would be Bigger pockets.

00:42:09.003 --> 00:42:14.293
I mean, good Lord, I owe so much of my life to bigger pockets because it's not just a forum.

00:42:14.414 --> 00:42:15.483
It's a community.

00:42:15.494 --> 00:42:28.184
And this community includes some of the most powerful, powerful names for getting started, continuing on getting to the heavy hitter status and just wealth in general and mindset, you know, cause they're kind of intertwined the two.

00:42:28.364 --> 00:42:30.173
So you go on bigger pockets right now.

00:42:30.193 --> 00:42:30.793
And if you're looking at.

00:42:31.219 --> 00:42:31.679
Rentals.

00:42:31.679 --> 00:42:32.588
They have tools for that.

00:42:32.599 --> 00:42:33.349
They have people for that.

00:42:33.358 --> 00:42:34.418
They have forums for that.

00:42:34.768 --> 00:42:35.639
Every single year.

00:42:35.639 --> 00:42:41.628
I go to BP con with my wife and we have a whole friend group mastermind that I met there.

00:42:41.909 --> 00:42:45.068
We have zoom calls where we get on and talk about what deals we're doing.

00:42:45.068 --> 00:42:47.018
And we collaborate with each other every single week.

00:42:47.309 --> 00:42:48.829
We met at BP con.

00:42:49.643 --> 00:42:53.074
Which is the convention, the bigger pockets has every time this big forum.

00:42:53.123 --> 00:42:55.534
I mean, we just love being on there.

00:42:56.134 --> 00:43:00.653
They have every tool, a lot of the big names that I follow and listen to every single day.

00:43:00.653 --> 00:43:02.043
I mean, every, what have we talked about today?

00:43:02.043 --> 00:43:05.313
Cody Sanchez, pace, Morby, uh, David green's another big one.

00:43:05.344 --> 00:43:10.914
I mean, all these guys that are, will really just help you in wealth, which is a big thing, but also your mindset.

00:43:11.153 --> 00:43:16.744
All I found out about through BiggerPockets, the BiggerPockets podcast, the YouTube channel, they're awesome.

00:43:17.393 --> 00:43:18.304
That's what I would recommend.

00:43:18.833 --> 00:43:19.934
I love BiggerPockets.

00:43:20.014 --> 00:43:23.673
And I've been, I've been listening since the beginning to their podcast.

00:43:23.673 --> 00:43:29.903
It's one of the, you know, when it was Jen, Brandon and Josh, you know, uh, I think Josh is the founder.

00:43:30.244 --> 00:43:31.733
And they're based here out of Denver.

00:43:31.733 --> 00:43:32.804
So I'm pretty fortunate.

00:43:32.813 --> 00:43:34.614
They put on some events every once in a while.

00:43:34.684 --> 00:43:36.443
Just a great community, like you said.

00:43:36.554 --> 00:43:37.173
Really?

00:43:37.384 --> 00:43:37.764
Yeah.

00:43:38.233 --> 00:43:42.583
So, um, what about a piece of advice for your younger self?

00:43:46.434 --> 00:43:47.264
Oh, gosh.

00:43:47.724 --> 00:43:50.804
I would, I would duplicate what I said earlier.

00:43:50.804 --> 00:43:51.423
That's the truth.

00:43:51.443 --> 00:43:59.023
But, uh, the other thing I think probably even better would have been just get around higher performing and higher minded people.

00:43:59.614 --> 00:44:03.844
I grew up in a community that was very small, and I know that's a very common story in America.

00:44:03.853 --> 00:44:05.684
So many of us grew up in these small towns.

00:44:06.204 --> 00:44:14.563
And unfortunately, that comes with overwhelmingly, um, small minds and, um, you know, it's hard to bounce ideas off of people who are thinking so small.

00:44:14.603 --> 00:44:17.469
And, It's cliche, but it's the truth.

00:44:17.739 --> 00:44:19.219
I've seen it a thousand times over.

00:44:19.219 --> 00:44:20.518
Your network is your net worth.

00:44:20.528 --> 00:44:22.539
You're the average of the five people you spend the most time with.

00:44:22.898 --> 00:44:24.798
The biggest decision you'll ever make is your spouse.

00:44:25.503 --> 00:44:26.943
All that stuff is so true.

00:44:26.954 --> 00:44:30.264
Just get around heavy hitters as fast as you can.

00:44:30.603 --> 00:44:32.853
Masterminds are a great way to do it.

00:44:32.873 --> 00:44:34.284
That basically becomes your new friend group.

00:44:34.284 --> 00:44:40.123
If you have a mastermind, join a mastermind as soon as you can get around high performers as fast as you can and stay there.

00:44:40.153 --> 00:44:42.673
And if that means leaving old friends behind.

00:44:43.088 --> 00:44:43.748
I'm sorry, buddy.

00:44:43.978 --> 00:44:44.958
What do you want in your life?

00:44:45.309 --> 00:44:46.878
Wealth and high mindedness?

00:44:47.119 --> 00:44:48.369
Or just comfort all the time?

00:44:48.818 --> 00:44:50.838
You will have to leave some friends behind, and that sucks.

00:44:51.009 --> 00:44:52.579
But, what do you want to do with your life?

00:44:52.579 --> 00:44:54.679
If you want to do something great, it's gotta be done.

00:44:54.869 --> 00:44:58.409
Because your friends, unfortunately, as much as they're boys, you might be.

00:44:58.884 --> 00:45:00.063
They might be holding you back.

00:45:00.094 --> 00:45:00.813
That's not all of them.

00:45:00.824 --> 00:45:02.173
But a lot of times that's the case.

00:45:02.574 --> 00:45:13.014
So I just listened to Cody cite a study where they said, statistically speaking, those who sat even just near didn't even have to talk to him, just sat near high performers in a call center.

00:45:13.224 --> 00:45:14.864
They themselves performed higher.

00:45:14.963 --> 00:45:15.753
It's just a fact.

00:45:16.148 --> 00:45:21.438
Yeah, you can you can feel the energy from a real badass, right?

00:45:21.528 --> 00:45:30.498
Like when you're around somebody who's just a killer you feel it, you know, and and that rubs off that really rubs off So you're absolutely right.

00:45:30.829 --> 00:45:44.563
Yeah, what about a big opportunity or a limiting belief pick one and just kind of talk about Maybe a big opportunity you're chasing or a limiting belief you've had or something like that.

00:45:47.833 --> 00:45:48.713
Yeah, for sure.

00:45:48.813 --> 00:45:57.634
So one of the ways I find deals is on Facebook and that, that might sound crazy, but if you join a Facebook group for, and you know, in real estate, wholesalers is the big one.

00:45:57.983 --> 00:46:00.114
They're just dying to get you deals.

00:46:00.393 --> 00:46:04.244
That's how they make their money is finding investors and selling them deals that they have found with sellers.

00:46:04.693 --> 00:46:19.514
And one of the things that goes on is, uh, They sell companies every once in a while, especially if you get into a group where you've got business brokers, uh, people are wholesaling companies and like we talked about real estate's a great way to preserve your wealth and build it.

00:46:19.594 --> 00:46:33.454
I got that, but making the money usually happens in business, so a big opportunity would be, um, a big business deal that, um, we're working on it right now, but it's to purchase a big home remodeling company.

00:46:33.463 --> 00:46:37.684
Someone told the one I already have in Philadelphia and, um.

00:46:38.134 --> 00:46:44.014
It would basically just be a silent investor spot for a company that's already doing what we're doing here.

00:46:44.043 --> 00:46:46.423
So none of the work, but all of the passive revenue.

00:46:46.923 --> 00:46:48.193
Um, and that's a great way to do it.

00:46:48.213 --> 00:46:59.713
Cause you know, these companies, you know, they'll gross anywhere between, you know, five and 10 million and the margins, you know, they usually are taken home 20 to 35 percent of that after all expenses.

00:47:00.014 --> 00:47:03.634
So I really think, um, buying businesses is a big opportunity.

00:47:03.634 --> 00:47:05.184
That's one of the ones I've got coming up.

00:47:05.554 --> 00:47:07.474
And I would encourage everybody to do the same thing.

00:47:07.483 --> 00:47:09.724
If you're just working in one business, that's awesome.

00:47:09.804 --> 00:47:10.893
Take it to the moon if you can.

00:47:11.244 --> 00:47:14.373
But as soon as you feel yourself hitting the ceiling, buy another one.

00:47:16.923 --> 00:47:19.184
Yeah, that's a, that's a growing space too, right?

00:47:19.184 --> 00:47:26.534
Buying businesses, uh, and there's a lot of great opportunity and opportunities for growth, uh, for creativity there too, seems like.

00:47:27.364 --> 00:47:37.784
What about, uh, Yeah, so Jefferson, if people want to know more about you, I saw your, your, uh, your, your Instagram site, maybe you can lead people there, or your other websites, or what have you.

00:47:38.273 --> 00:47:45.074
I noticed on Instagram you, you're also pretty diesel too, so it looks like you, you're quite into fitness.

00:47:45.494 --> 00:47:51.974
Uh, I'm glad, I'm glad, uh, you know, we're a couple thousand miles apart from each other or else you would have kicked my ass because I'm a scrawny little guy.

00:47:53.534 --> 00:47:56.893
But uh, but yeah, where, where can people find you?

00:48:00.463 --> 00:48:06.153
I would say right away, uh, Facebook, Instagram, Jefferson Keith Calloway, uh, you'll see me come up right away.

00:48:06.153 --> 00:48:07.474
I don't have any privacy stuff on there.

00:48:07.773 --> 00:48:09.903
Um, or just shoot me an email, jefferson at.

00:48:11.143 --> 00:48:11.903
Calcapital.

00:48:11.923 --> 00:48:12.344
us.

00:48:12.344 --> 00:48:13.293
That's my real estate company.

00:48:13.293 --> 00:48:17.773
C A L C A P I T A L dot U S, not dot com.

00:48:18.304 --> 00:48:29.373
And really just hit me up because what I've found is every time I do, you know, a speaking event or, you know, I'm talking to somebody, um, on a podcast, YouTube, whatever, I get, you know, a few messages, a few DMs.

00:48:29.873 --> 00:48:32.034
And instead of just, you know, we're all busy.

00:48:32.123 --> 00:48:33.614
We don't have a lot of time just to be addressing stuff.

00:48:33.614 --> 00:48:35.864
I really, I think I'm going to probably start like a Q& A.

00:48:36.679 --> 00:48:53.369
And just have people come on and do like a zoom call, maybe not necessarily a mastermind, but, um, just get people that have questions and want to get started and, you know, just great minds getting together like you and I, um, so message me and I'll, and I'll, um, get you in on it and we can all just kind of Q and a, get better together and talk about some stuff.

00:48:53.768 --> 00:48:59.369
Um, so Instagram, Facebook, email, those are the best ways to get ahold of me to do that.

00:49:00.014 --> 00:49:00.344
Great.

00:49:00.963 --> 00:49:01.784
Well, thank you for that.

00:49:02.554 --> 00:49:14.914
Well, Jefferson, actually, before we go away, I got to ask you, I've been noticing a trend lately and that is that our last Real Estate guest, I just remember, was a good friend of mine named Andrew Freed.

00:49:14.923 --> 00:49:17.094
You may have seen him in the BP Circles.

00:49:18.003 --> 00:49:19.688
He also has I know Andrew.

00:49:19.958 --> 00:49:20.478
Yeah, yeah.

00:49:20.478 --> 00:49:21.719
He's from the New England area.

00:49:21.719 --> 00:49:25.869
Actually, he owns a property in the city I grew up with outside of Rhode Island in Rhode Island.

00:49:26.559 --> 00:49:34.188
But, uh, uh, you both got these great beards and people can't, I'm trying to, I, I realize, and you're both really successful real estate people.

00:49:34.489 --> 00:49:38.869
So I'm starting to wonder, is there something about the beard and real estate now?

00:49:38.898 --> 00:49:43.298
Cause, uh, I feel like I'm starting to grow one out because I need to be like you guys.

00:49:43.628 --> 00:49:45.608
You know, maybe that'll lead to some more success.

00:49:45.659 --> 00:49:46.478
What's up with that?

00:49:48.639 --> 00:49:49.278
Think about it.

00:49:49.588 --> 00:49:50.369
Think about it, Louie.

00:49:50.378 --> 00:49:50.898
Who?

00:49:51.338 --> 00:49:55.389
Are the, some of the most influential men in our time, Abe Lincoln, Ulysses S.

00:49:55.389 --> 00:49:58.728
Grant, Deuce, they all had great beards buddy, come on man.

00:49:58.728 --> 00:49:59.528
That's right, that's right.

00:49:59.530 --> 00:50:03.688
The power is in the beard, don't sneak up on me in my sleeping cut line, take all my power away.

00:50:03.938 --> 00:50:09.188
Yeah man, I, shoot, it took me too long to figure it out, that's the secret, that's gotta be the secret.

00:50:09.190 --> 00:50:11.949
That's it man, that's it.

00:50:12.148 --> 00:50:18.619
No, whenever I, whenever I see a big beard, I'm like, all right, I know for a fact, if you've got nothing else, that man's got patience, because this stuff takes years.

00:50:19.494 --> 00:50:26.023
Yeah, and I, you know, it's funny, I had never had a beard till I, I, I tried not to cut it for November, that no shave November thing.

00:50:26.434 --> 00:50:29.063
And I didn't know you weren't supposed to like cut under the neck.

00:50:29.293 --> 00:50:29.503
Yeah.

00:50:29.563 --> 00:50:31.414
And so, and it was so hard.

00:50:31.414 --> 00:50:33.054
I'm like, that's why I usually get itchy.

00:50:33.054 --> 00:50:33.853
And then I learned that.

00:50:33.853 --> 00:50:35.034
I'm like, oh, this ain't that bad.

00:50:35.043 --> 00:50:36.534
So let's see how far I can go.

00:50:37.034 --> 00:50:37.773
You know, we'll see.

00:50:37.824 --> 00:50:38.483
It'll be interesting.

00:50:38.893 --> 00:50:43.943
Um, anyways, Jefferson, uh, we'll have to have you back on to talk about beards.

00:50:44.324 --> 00:50:44.853
What's that?

00:50:46.673 --> 00:50:47.083
What's that?

00:50:48.114 --> 00:50:49.143
I said, keep it up, man.

00:50:49.143 --> 00:50:50.014
Get through the itchy stage.

00:50:50.014 --> 00:50:50.673
It looks good on you.

00:50:50.943 --> 00:50:51.224
Yeah.

00:50:51.224 --> 00:50:51.684
Thank you.

00:50:51.753 --> 00:50:52.173
Thank you.

00:50:52.574 --> 00:50:52.873
Yeah.

00:50:52.873 --> 00:51:00.943
So we're going to, we're going to see, we're going to have to have another episode with you, Jefferson, just to talk about beards, you know, so, uh, now that that seems to be a growing interest.

00:51:00.954 --> 00:51:01.534
I love it, man.

00:51:01.610 --> 00:51:03.938
Well, thank you for being on the show.

00:51:03.938 --> 00:51:10.469
You shared a lot of wisdom, a lot of people who are curious about real estate investing and want to get in and don't think they can do it.

00:51:10.518 --> 00:51:12.748
Uh, I think you shared a lot of great ways to do it.

00:51:12.768 --> 00:51:15.259
Hopefully they reach out to you as well.

00:51:15.259 --> 00:51:17.478
And just don't be afraid and get out there and do it.

00:51:17.498 --> 00:51:22.478
I mean, you see we got somebody here who's a living testament that you can do it and you can do it quickly.

00:51:22.489 --> 00:51:26.679
So, um, thanks for coming on the show.

00:51:31.449 --> 00:51:33.208
We hope you've enjoyed The Wayfinder Show.

00:51:33.358 --> 00:51:37.579
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00:51:37.869 --> 00:51:42.119
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00:51:42.778 --> 00:51:44.079
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