Speaker 0 00:00:00 Hey everybody. You're kicking it with the homeboys and the Homeboys podcast, where we talk everything in the world of real estate investing, whether you're just getting started or a seasoned vet, we're going to give you over 40 years of combined real estate experience to help you on your investing journey. Today, we've got a very exciting topic. This is about how do you get started when you're young, when you're broke, or when you're both young and broke. And to help us with this today, we've got the young homeboys with us, Connor Bennett. Bryce, welcome to the show, boys. Thank
Speaker 1 00:00:35 You. Thank you. It's
Speaker 0 00:00:35 Good to be on. Yep.
Speaker 1 00:00:36 Definitely glad to be back.
Speaker 0 00:00:37 Well, you're all, uh, young, um, hardworking, got got your first jobs pretty much, and income coming in, learning a lot about real estate, so we thought this would be topical to talk to you guys about all the different options and, uh, getting started and what we can share with folks about the different ways that we know you, you can get, you can get started and the ways that you guys are, are looking at getting started.
Speaker 1 00:01:02 Yeah.
Speaker 0 00:01:03 So Bryce, I know you in particular have been very interested in in house hacking.
Speaker 1 00:01:09 Absolutely. Yeah. From I think just where I'm at in my life right now, I think it would be the best option. The one of the cheapest options and just, uh, the first and just the best way to, to start and get my first rental. And for anyone that doesn't know what house hacking is, um, it's, it's getting, uh, buying a house that's more than a single family. So duplex, fourplex, whatever. I'm planning on getting a duplex. I'm gonna buy it with an FHA loan, so I only have to put down three point a half percent, which is the cheap part, which is what I like. And I will live in one half, rent out the other. Um, so that way, um, my rent's basically getting paid for to an extent. And, uh, something that I realize is that I don't really have to, um, upgrade my side as much. I can upgrade the other side, make it ran ready, and, you know, modernize it a little bit. Put money into that side at the beginning, don't have to put money until the very end when I eventually will then move out, rent out both sides. And then that's my first rental. So that's my plan.
Speaker 0 00:02:12 It's a, it's a great way to pick up your first property with saving very little. So three and a half percent down is basically all you need. It would be smart to have a little bit of reserves. Absolutely. And depending on the condition of the property, if you're trying to buy a fixerupper to do this, you'll need a little budget for that. But Right. You can hit the ground running though and buy an existing duplex that, uh, is half full. There's a lot of situations like that where you've already got your tenant in place and you just move in and it's cash flowing Right. Day one. And you don't have to spend anything other than your, your three and a half percent down payment. Yep. Now, chances are you're not going to get the greatest deal, quote unquote, in the world. However, you gotta give up something in order to get started. It's
Speaker 1 00:03:01 A
Speaker 0 00:03:01 Sacrifice. And, um, if you're patient, maybe you can find a deal. But duplexes are so popular. Everybody wants 'em, everybody knows what they are,
Speaker 1 00:03:08 And if they already have 'em, they know what they have then. Yeah. So that's definitely the biggest, uh, I guess the hardest part. Yeah, the biggest. Yeah. So, um,
Speaker 0 00:03:18 It's not really a hurdle. It's a realization that you're gonna go into this with your eyes wide open, realizing that you're gonna pay full market most likely Yes. To, to do this. Yeah. And that's okay, you know? Right. Uh, as long as we talk about it all the time, we don't care in a lot of cases what our, our properties are worth because we're long-term cash flow investors. We care about the cash flow. So, I mean, don't get me wrong, we wanna pay as little as we possibly can for any investment. You should too. And you don't want to pay more than a property is worth ever, ever. You know, you, you want to get a, an appraisal on any property, even if you're paying cash just to make sure. Um, but at the same time, the thing that matters most is getting into that property and getting the cash flow. Cuz the value's just a number on a piece of pa paper
Speaker 1 00:04:05 Otherwise. Right. And if it was easy and cheap, everyone would be doing it. Yeah. So it's not gonna be easy by any means, but I think people should understand that. It's not easy. We're not saying it's easy, but it's doable. Yeah. And people just give up right away cuz they think it's impossible when it's, it's hard work, but it's worth it. It's so worth it.
Speaker 0 00:04:23 So, Bennett, you just showed me a TikTok before we started of a, a guy that's got a pretty decent following and he asked the question, is, uh, 2023 a good year to, uh, buy a house? And he, his answer was yes, because, um, it's more of a buyer's market than it has been in the past. Now I could get into the nuances on that and say it's still not much of a buyer's market. It's still pretty much a seller's market, but it is better than it has been. What, what are your thought, what were your thoughts when you watched that? When you heard what he said? What was your initial reaction? Just outta curiosity?
Speaker 2 00:04:57 I just thought in the past, like housing was way more expensive than like, what it used to be. But I mean, we had a podcast a couple episode ago and it said like, I don't know, it's actually more affordable now than it was back then. And I'm personally looking for a house to buy right now. Cause I'm, when I getting married in the summer, and I mean, it seems expensive, but I mean, if you can save up a bunch and, um, put at least like 10% down, I mean, it's, it's doable. It's definitely doable if you can have a good paying job and then maybe do some side work here and there, just extra income and it's definitely doable. But, um, for rental, I, I'm not really into that yet, but just looking for a house for myself, I think. Yeah. It's definitely doable. I mean, you need to get a good job under your, under yourself and then maybe look for some extra income paths.
Speaker 1 00:05:52 But, and then, but then with the house you're buying, um, when you move out Yeah. A big thing you could do is just not sell it. Yeah. And, and rent that out. And that could be your first
Speaker 2 00:06:01 Rental. Yeah, I'm definitely planning on doing that too. Yeah. Just keeping all the assets I have and not looking to get rid of 'em, cuz I mean Right.
Speaker 0 00:06:09 Man, amazing. I wish I, I really, really, really wish I had done that and listened to my own advice. I, it's really, I, I mean, you want to talk about millions and millions and millions of dollars I would have right now because I, I mean, being in real estate, you know, I, I started basically in college doing this stuff and I moved often through my twenties. I would buy a house of sheriff's sale, sell the house I was in, move into the new house, fix it up, then sell that, move into the next one. If I had just turned each and every one of them into a rental. I mean, I would be, have a portfolio that was paid off by the tenants and just literally worth millions and millions. And I just, I, I regret that's one of my few regrets in, in, uh, in, in my career.
Speaker 0 00:06:56 And I've made a lot of mistakes and I don't regret most of those mistakes I learned, um, just as much, um, that I, and knowledge than the value of, of money I lost on things that went wrong. But, so I don't regret most, most mistakes, but boy, um, I find it interesting that you're going to buy your house first for yourself. And, and I think that's one of the beautiful things of, of being in the, in a Midwestern market, um, where you can do that. You know, imagine if you were in California or some of these other expensive markets. Yeah. You know, that wouldn't be an option mm-hmm. <affirmative> for them, you know, and we talk all the time about how those folks, instead of buying your first house in California and, and having to save for 20 years before you can get your first down payment, yeah. You should, you know, buy some rental houses throughout the Midwest or in other markets. But I find that really interesting that, that you are that hungry to buy your first house.
Speaker 2 00:07:51 Well, I mean, just working here, I've been here for a couple months and like, just listening to you guys and all your experience you have, like, it just kind of opened my eyes to like,
Speaker 0 00:08:00 Haven't you been here by a year by now?
Speaker 2 00:08:03 Uh, started in May. Oh, okay. So, yeah. So I mean, not coming up on a year, but, uh, just kinda like opened my eyes to like, wow, like you can actually make money in real estate. Which like, there's one of the tos we did, and it's like larger storage, storage of wealth is in real estate. And I mean, like, people will buy a house then sell it. Like, I don't know why you'd want to do that when you can just keep that and like, still just keep making money off of that. And like, the long term.
Speaker 1 00:08:31 I I think it's cuz it's a sacrifice because normally if you're gonna move, you can sell your house and use that money to then get another house. Correct. That's, it's hard to do that to, you know, it's
Speaker 0 00:08:43 Pyramided, isn't it? Yeah. Yeah. So when, when, when someone's gonna move, they don't usually have, you know, they've saved up to buy their first house. Right. And they've bought it and they put all their savings, their down payment into that, that house. And when they're ready for their next house, they haven't continued that savings
Speaker 1 00:08:59 Because they already got the house, they
Speaker 0 00:09:00 Got the house. And so we argue you should definitely not stop that savings. Um, but there's other ways you can do it. Even if you didn't save, you can get a HeLOCK home equity line of credit on your first house. Use that to, you can suck the equity out and use it to buy your second house. Now we're getting into riskier, um, higher debt
Speaker 1 00:09:19 Loans, like leveraging stuff,
Speaker 0 00:09:21 You know, because you're, you're using one down payment now on just two. You've split it basically between two houses. And you, you know, you, you should continue to save if you can. But in a lot of cases, if you do that HeLOCK and pull the money out to use it for your down payment on your second house, your first house in most cases right now has appreciated so much that you're still gonna have plenty of equity in it. And it's okay to do. That's not always been the case historically. Right. Now is a great time to do that. You know, if you're gonna move and let's say you put $20,000 down on your house that you bought and you have now a hundred thousand dollars in equity because it's a, it's appreciated. Right. Why not just do a HeLOCK, pull some of it out? Um, you know, as long as the rents are gonna cover your mortgage, you know, it's a great way to go. The hardest part of real estate is a, the acquisitions part. It's buying it. Mm-hmm. <affirmative>, once you have it, once you have it, it's easy.
Speaker 1 00:10:13 It's, it's the barrier. Just money, I guess. And savings, which is just hard for people to do nowadays. I mean, I'm not saying it's, it's hard for, it's hard for everybody. Like it's stuff's more expensive right now and Yeah. And like we've said on previous podcasts, like stuff is so accessible to buy, like Amazon, you can have something in two hours. Like it's just easy to spend money right now on the wrong things. Mm-hmm. <affirmative>. So yeah.
Speaker 0 00:10:38 It's, it's, there's always reasons that make doing, um, the smart financial thing difficult. You know, I mean, you could argue back, well, when my grandparents were around, they didn't have FHA mortgages. You know, they had to find a, a seller that's, that was willing to finance them. They had it worse. I mean, you can just argue there's always reasons that
Speaker 1 00:10:59 There's always an excuse difficult. Yep. Always.
Speaker 0 00:11:01 And, and they're legitimate excuses. I don't wanna like, um,
Speaker 1 00:11:05 Downplay. Yeah.
Speaker 0 00:11:06 Or, or be, uh, you know, lack compassion and, and understanding that because it is difficult. However, if you put your mind to it and you're willing to make some sacrifices, uh, take on a little risk, it's, it's all doable. So we also have Connor here, young homeboys, and he is managing the apartment complex that, uh, Clint and I started to be partners on. But, uh, it's, it's one we just managed up in Elwood. So Connor has a lot of experience now. How long have you been with us Connor? 10 years. That's crazy. That's 2013. Yeah. How, how old are you? 20, 21 now.
Speaker 1 00:11:42 I'm 28. Mm-hmm.
Speaker 0 00:11:43 <affirmative>. Yeah. <laugh>. You started when you were 11? <laugh>. Yeah.
Speaker 1 00:11:46 Go. I think I started when I was 18
Speaker 0 00:11:48 Actually. God, that's crazy.
Speaker 1 00:11:49 Yeah. That's, that
Speaker 0 00:11:49 Is wild. Mm-hmm. <affirmative>. Okay. We've gotta get you fired up and get you in, get you, you going on your, your, you gotta start owning. It's
Speaker 3 00:11:55 Absolutely. Yeah. It's time. Yeah, it is.
Speaker 0 00:11:58 So this, uh, a lot of the investment side is kind of new to you. You have a lot of experience in almost every aspect of our business. Mm-hmm. <affirmative>, I mean, you're,
Speaker 3 00:12:07 Especially rentals. Yeah.
Speaker 0 00:12:09 Yeah. The rentals side. You <affirmative> you've been a
Speaker 3 00:12:11 Problem. The maintenance aspect of it. The costs, yeah. The upkeep. Yeah.
Speaker 0 00:12:16 Yeah. You, you know all the hard parts. I do. Yeah. The bad parts. Yeah. <laugh>. So let, let's get you in on the good parts mm-hmm. <affirmative>. Um, what's, what's your barrier to getting in? Why haven't you done it? Just outta curiosity?
Speaker 3 00:12:28 For me, it's, uh, well the consumerism, um, it uh, it gets me wanting to nut buy the new at gadgets and everything that are on the market. So saving for me has been kind of rough. Um, but, uh, recently I've actually started to put away more into a savings account. Um, you know, just even talking to you specifically about going in on a possibly dealt, possibly. Yeah. So, you know, and I was also talking to my, my girlfriend about this. When you get two people who can go in on a house or a, a duplex, um, it's half the weight and half the cost essentially when you have, you know, a wife even mm-hmm. <affirmative>. Um, and I feel like that can help cut down on a lot of the fears of, you know, can I afford this? And it's like, you, you totally can. Um, so yes.
Speaker 0 00:13:23 Yeah. Shoulder shouldering that burden with someone is, even for, for someone who's been doing this as long as I have, and I've owned thousands and thousands of properties, as you guys have seen, a lot of them come and go. I still can't imagine. I was just telling somebody, I can't imagine doing it without Clint mm-hmm. <affirmative> this day. Yep. If there's something about shouldering the burden with someone that just makes it feel easier, even though you never really need them at the end of the day. I mean, you guys could do this with or without that, but it's, I think it's smart. You just gotta be careful that you guys have the b both the same mindset going in. And you have to understand that there will be bumps and you'll need to just get through them basically.
Speaker 3 00:14:05 Yep, exactly.
Speaker 0 00:14:05 Adjust. Yeah, just adjust. So, um, I'm going to tell you guys what I did at your age. And, and I I was a little unique because I, I basically hit the lottery right outta college. Houses were so cheap and I was buying 'em and flipping 'em and just, you know, making way too easy money. I had no idea that real estate was difficult because it just, during those years it was just free money almost. So, so I, I had pretty high income in my, my twenties, but I think this can still apply to, to anyone. Cuz keep in mind I've had years where I didn't make any income after the, the bust. And luckily I had saved when times were good. Um, but I, there were years, years and years where I didn't make anything. When I, when my wife and I were first getting married, I was paying myself outta my savings $500 a week.
Speaker 0 00:14:55 You know, I had no income for years. Um, you know, building businesses, we weren't paying ourselves, you know, and, and so one of the things that I would really encourage you to do that helped me save is set up automatic savings and, and b get with a financial advisor, even if you have no money, there's a lot of financial advisors that will take you on and get you from zero to 100. And one of the beautiful things that, that having a good financial advisors do for you and still do for me, is before I even get my paycheck, I talk about this with you guys all the time. All this money is taken out so I never see it. So I don't technically really miss it. You never have it. Mm-hmm. <affirmative>, I never have it. So like, it, it literally, I don't see it. So I don't miss it. And anytime that I have a distribution or you get a raise, I tell him first and I, so
Speaker 1 00:15:53 How much
Speaker 0 00:15:54 Am I, how much of this can I keep? How much are you going to increase? And he usually is pretty fair. And he says, I'll take 75%, you can keep 25. That's pretty much what he says every time. And um, so if you set up those, those auto uh, savings, get with a financial advisor, find ways that he can, uh, you know, take your savings and invest it prior to you getting your dirty little grubby, greedy hands on it, <laugh>. And it will, it will take you so far cuz you will not miss it. And anytime you get a raise or there's a income that you weren't expecting, your first phone call should be to that financial advisor. Now people might be intimidated by the fact, especially young folks of calling financial advisors and being like, Hey, I don't know what I'm doing. Can you help me?
Speaker 0 00:16:39 That's exactly the phone call you need to make. That's what they want. That's how they make their living. And if they, if they say, well you don't have any money, I don't wanna help you. They weren't the right person for you anyway. Don't, don't let them, um, have a part of your success. They don't deserve it if they're not willing to help you start from scratch. Mm-hmm. <affirmative>. Yeah. So that's a, a big suggestion for you guys. And we have a meeting coming up with you guys with, with our financial advisor. Oh really? Yeah. He's coming in on Thursday, um, I think this week maybe. But, um, I I, I've been talking to him about you guys, so he's excited to meet you guys and, and help you, uh, plan out cuz you guys are, are unique in a way cuz you have 401ks here through the work access to and, uh, some other, you know, and, and a lot of real estate investing advice. But I I, I think it'll be a good example and I want to come back and revisit that after you've maybe talked with him and, and you can share your experience on, on being broke, but still having a financial advisor. Absolutely.
Speaker 1 00:17:40 <laugh>. Yeah. So this might be a loaded question, but if some, how would someone find a financial advisor that doesn't have like, our connection? Is it just research, like literally googling, calling around? Yeah. And just feeling it out kind of thing. Or
Speaker 0 00:17:53 If you're really old, I would say go to the Yellow Pages <laugh>. Do you guys even
Speaker 1 00:17:57 Know it? <laugh>? I know what it is. Never. I don't think I've ever used it <laugh>.
Speaker 0 00:18:00 So I think Yeah, yeah, you just Google. Um, um, I mean the, the, I would probably recommend going with someone from the larger firms at first just to start. Um, I'm not a, the biggest fan of the larger firms. They, they, they tax you a bit too much in my opinion. Their fees are a little too high. But, um, you know, there's also those ways that you, we all talk about all the time Acorns and Fidelity apps and Robinhood and all these apps that you can help get you started. But if you really wanna have a plan, it'll, it's nice to have that advice along the way. So I think it's worth it. But if you're just kind of getting started, at least do acorns, at least do a dollar a week in Acorns
Speaker 1 00:18:50 Automatic whatever to your savings, every paycheck kind of thing.
Speaker 0 00:18:53 I, I mean, I know it's silly, but I do it, it's my secret little stash, you know, it's, it's my little slush fund that, you know, I get to, I get to play with. I actually spent, um, I had, I, I started Acorns, let's see, almost 10 years ago now, I think. Wow. And I had, I think I had $11,000 in there a few weeks ago. It's gone. I don't know if I told you guys this. No,
Speaker 1 00:19:18 You get a watch, <laugh>
Speaker 0 00:19:19 <laugh>, I, uh, I I cashed it. I bought gold coins and silver with it. So I, yeah, I ordered a bunch of stuff. So it's still invested, but just in something different. But, um, it's amazing how fast it adds up. And I think I was saving, I believe it was 50 a week and I mean, it just adds
Speaker 1 00:19:37 Up. It does. And if you do a bunch of those same things, like little things all together, it all adds up fast too. Yeah. So it's not just, we're not saying just to do one thing. Like there's many as you can cuz then Yeah.
Speaker 0 00:19:50 Now real estate's really, uh, an interesting topic with savings because you kind of have to learn to save first before you are able, because most, most of the time you're gonna need a little bit of an out payment for real estate. And so it's kind of good practice to set up those savings habits, uh, to learn to budget and those things before you get into real estate. But there are shortcuts to get around any down payment. I mean, you can do real estate with zero money, it's risky. Um, you know, it's basically called hard money. And hard money would include going to your parents and saying, I wanna buy this house. I'm gonna fix it up and then I'll refinance it and pay you back. So basically the burer method as, as our listeners probably know what that's all about. Yeah. Um, I, I always get the, the, i I need to pull it up to get it right, but it's by rehab
Speaker 1 00:20:42 <laugh>. Yeah. I don't know the rs either.
Speaker 0 00:20:44 Too many of those refinance or repeat. Um, something like that. Yeah. But anyway, um, that can be done even at your guys' age. And even if you don't know anyone with money, there's, there's, uh, there's sharks out there that will loan to just about anyone that's willing to put their name on the line, especially when it's backed by real estate. Very predatory. It is. Mm-hmm. <affirmative>. But it, you know, it allows you to get started if you don't wanna wait or you don't have the ability to save and you want to take a big risk and swing for the fences, it can be done. And I'm, I, I don't necessarily know that I'm against it at a very young age, um, trying it, you know, that way. I,
Speaker 1 00:21:24 Well, we were talking that one time, like technically you could get three, like two of your buddies, three people total, save up, do the hard money loan, whatever, or save up for a little bit and then get a fourplex and then three of you live in it. Yeah. And then rent out one side or whatever you decide. So that's just one way to split it up. And there's just a bunch of ways to do it. There
Speaker 0 00:21:46 Are, I was listening to, um, this, he's a really interesting guy out of London, uh, middle Eastern guy who, who, his family moved to England and he's very wealthy now. And the way he got a start was in, uh, you know, when you've got a tight family and you moved to another country, it, it probably brings you a little closer it sounds like. And what happened was, him and his brothers all just shared a checking account because, you know, it's a new country, you know, everything's a little confusing for 'em. And then they realized, well, look how much money we have when we combine it. So let's buy a house together and then let's buy this together. And they ended up buying luxury cars, which happened to appreciate, which is crazy to me. But anyway, they just, everything they did, they did by pooling their money. Now there's dangers to that. Obviously you guys have a falling out and family money sharing
Speaker 1 00:22:39 And Yeah. Being on the same page about it. And,
Speaker 0 00:22:42 But if you get, you know, a group of close friends or you've got, you know, brothers and sisters and you guys trust all wanna do, do it mm-hmm. <affirmative>, you know, do it, you know, gather up your, your money together and, and, and get started and, and do it. Um, you know, the, the savings that you get, you have to get through that for most people before you get to that real estate. But once you get that real estate, and one of the beauties of real estate is you can use the bank's money to buy it. You know, you can use mostly the bank's money, right. You, you save up $5,000, uh, you can go out and get a 3% Fannie lame loan and buy $190,000 house, a $300,000 house. But if you save up $5,000 in one invest in the stock market, you're not investing $300,000. It's your 5,000. That's it. And that's it. Yeah. And so there's a big pot of gold at the end of the savings rainbow if you're looking towards real estate, because then you can start really using the power of leverage. And again, we believe in really responsible, uh, conservative leverage, but at the same time, we do believe in leverage because just
Speaker 1 00:23:51 Not over
Speaker 0 00:23:52 Leveraging, just not overleverage
Speaker 1 00:23:53 Leveraging is good in aspects, but over leveraging over is
Speaker 0 00:23:56 Never good. Yeah. And we, we give people a pass for Overleveraging at the beginning. Um, you know, really. Yeah. I mean, everyone's gotta start somewhere.
Speaker 1 00:24:05 You gotta find that line probably. Yeah.
Speaker 0 00:24:07 Mm-hmm. <affirmative> and I mean, I'd rather be in early and take a little risk than have to wait 10 years to save up a full 10%
Speaker 3 00:24:14 Now. For
Speaker 0 00:24:15 Sure. Right. So you gotta take some risk. It's
Speaker 1 00:24:17 True.
Speaker 0 00:24:17 Yeah. And you just gotta take your lumps. If, uh, along the way, and again, this is for long-term cash flow investors, I don't recommend any of these things in order to go try to flip houses and, and, and, uh, try to make it there. Uh, that's such a dangerous little world. And it's, I I mean I do it obviously we flip, you know, 10 houses a month, well, less now, but you're
Speaker 1 00:24:41 At that point. Yeah. Like that's, yeah. That's not an entry level. Well that's not as risky.
Speaker 0 00:24:46 Yeah. I prefer holding, I'd love to hold every house I ever do, but I can't keep 'em all. Yeah. <laugh>. And I genuinely would love to not sell any, I'd love it if every house in this company was mine, you know, a thousand houses, I'd take 'em, I would take 'em all, but I can't, you know, we've gotta serve our clients too. But,
Speaker 3 00:25:05 You know, uh, talking about easy ways to get into real estate, um, I've been wondering about this, and I actually haven't heard your take on this at all, is tax sale homes. Because now, you know, I've heard of some of our owners who that's their main approach to building their own portfolio. And my mom about a year ago was even not talking to me about it. She had said, oh, someone at work was just talking about how much they've not profited off of the tax sale homes. Is that worthwhile to look into right now? Or no? What's your take on that?
Speaker 0 00:25:39 Okay, so tax sales are very different in each state for our state. Um, it's incredibly risky. It's very unlikely that you get the house. I forget what the redemption rate is right now. Okay. But in most counties, it's near 100% redemption, which means you go to the tax sale, you bid on a property, you bid it up against other people, and then the owner pays their taxes plus interest to you on the amount that your overbid was, and then you get your overbid back and the interest. So it's a way to make interest. You can make interest on the money that you invested, but it's very unlikely to get a property. And then the people have 13 months to redeem. So you've got your money out there for 13 months, that is not your house. Mm-hmm. <affirmative>, you don't have rights to it. If, uh, the house burns down, now there's insurance products now that can insure you, but the house burned down during that period and the person person didn't pay <laugh>.
Speaker 0 00:26:38 There's all these loopholes. I mean, this is a very detailed thing, but you can self redeem where you just lose the taxes on it. And, and there's, there's ways out of all these mixes, but it's incredibly complicated. Okay. I mean, I can barely get down a sentence here without having to work backwards. Yeah. You know, it's incredibly risky. It's unlikely that you will get the property. Um, it's even if you do. Yeah. Even if you do get the property and you've got a great deal, you still have to quiet the title. Mm-hmm. <affirmative>. Now, again, now there's title companies that will, um, ensure over a tax deed, tax title services where it's about a thousand dollars and you don't have to quiet the title, but the quiet title processes take six months. You know, they have to notice anyone who ever had rights within that property.
Speaker 0 00:27:23 It's a, it is incredibly complicated. Um, the person that you're talking about through the company that does this is incredibly experienced. He's a multi multimillionaire and he's able to calculate that risk, take his time, park millions of dollars in the, in tax deeds. And he even, he questions whether it's worth it sometimes. Mm-hmm. <affirmative>. So for, for a newbie, I would say, do not do it. Now, keep in mind it was, it was my first investment in college, <laugh> <laugh>. I used my student loan money and went to the tax sale and I bought three tax deeds, well, tax certificates. And luckily, luckily they redeemed, meaning I got my money back in a little bit of interest. I didn't know what the heck I was doing. I just went and did it <laugh> and I needed that money to pay tuition. So I all in, I was very grateful. <laugh>,
Speaker 0 00:28:18 I didn't care. You know, I was crazy, you know, willing to do all kinds of risky stuff. I think the better question would be sheriff sales. Sheriff sales are different than tax sales. And, um, we're in a judicial state. Some states are not judicial, where there is not a sheriff sale. It's a, anyway, I'm not gonna get into weeds on all of that, but sheriff sales, there's risk. And it's very complicated as well, but it's, you get the property, as long as you really read through the decree, you look at the judgment and you know what you're getting. You can get the actual property for a decent price. But I would not recommend that either for your first time, your first property, you, you need to take as much of the risk out it as possible. Especially if you're gonna leverage it. Just go buy a traditional house through the mls.
Speaker 0 00:29:07 Whether that's a foreclosure that's listed in MLS or, um, you know, just a house that's listed in the mls or a duplex in the case of, of Bryce. Um, or you can always, you could always buy a turnkey house too. So if young folks living in California, if they've saved up and they've got that say 20 grand saved cuz they wanna buy a house, but they're still priced outta California. Mm-hmm. <affirmative>, they can, they can find turnkey providers all over the country. They can reach out to
[email protected]. We can help put 'em in touch with different turnkey providers. We're happy to, to help them here if Indianapolis was, uh, of interest to them. But that's something that young people can do in those other markets
Speaker 1 00:29:49 Because they'll manage it. They'll have a tenant ready already. It's just rent ready. They
Speaker 0 00:29:53 Don't have to do
Speaker 1 00:29:54 Anything, anything. The money is the only, the down payment is what you need to do.
Speaker 0 00:29:57 Mm-hmm. <affirmative>. Yeah. The drawbacks are they'll be paying full price for the house. But so what, you know, again, it's a sac
Speaker 1 00:30:03 Sacrifice thing.
Speaker 3 00:30:03 It's good to talk about that because I imagine a lot of young individuals could hear about these tax sheriff sales and say, oh, well I could get a house for a lot cheaper potentially. However, talking about this, you now know that the risk is a lot higher. It's a lot just not stable. Um, yeah.
Speaker 0 00:30:25 So it's, it's like it's everything in life. Higher risk, higher reward Yep. To say that. Yeah. You know, and I don't recommend higher risk when you don't have very much to back it up. Yes. Um, you know, it's just, it's not the time to do it, but when you've got millions of dollars and, uh, you're out there investing at tax sales, you know, so be it. If one or two goes wrong, you, I mean, you're making money on all the, you can afford it. Yeah. I mean, we're talking about banks. Like, uh, back in the day I had a, or work to deal with Transamerica Bank where every property they bought at the Indianapolis Tax Sale, I guaranteed in writing that I would buy that property from them. Transamerica was just looking to dump money into the tax sale and make 13% interest. That was their goal.
Speaker 0 00:31:10 So if somebody didn't redeem and instead of getting their interest, they got a house they didn't want it. And so I guaranteed them, I would buy that house as long as they bid every I I, I went through the whole tax sale and told 'em how much to bid on every single house. So you're gonna be at these tax sales bidding against these, these giant companies that have research arms that know what they're doing. And, and I'm not saying there aren't deals out there, but it's a, it's a dangerous place to go. Try to chase your first one. So, is sheriff sale tax sales more, more risky? Uh, sheriff sales, I think too risky for your first couple.
Speaker 3 00:31:47 Um, good to know. Yeah.
Speaker 0 00:31:49 Yeah, yeah. But I, I, I think it's neat that people would ask and you'll learn so much. And, and like I said, when I was in college, I just started going to the courthouse at, at i, I went to IU and, uh, in Bloomington, right on the square, right by college is the, is the courthouse mm-hmm. <affirmative>. And I just went down there and would watch people at the tax sales and sheriff sales and ask questions, listen and listen. And I learned a lot, you know, and it was a, it was a neat experience. So these are great ways to, if you're interested to learn a lot, just be real careful. I know you'll want to dip your toes in that pool mm-hmm. <affirmative>, but I promise you it is ice cold sometimes and it'll catch you off guard. So just be careful with those, you
Speaker 1 00:32:28 Know what they should do. They should listen to the homeboys podcast <laugh> and learn about what to do and how to take it slow and Yeah.
Speaker 0 00:32:36 You know, we we're pretty boring in the, the sense that we believe you should take as much of the risk outta real estate as possible. You should hold it long term. Um, you know, this, we don't look at, at real estate as a get rich thing. We look at it as, as the retention and the building of wealth. And so our, our perspective is as low risk as you can make it in real estate is the goal for us, boring houses in suburbia with tenants who can afford their rent and pay every month. And even then, it doesn't work that way every time as Right. Anyone can tell you. So you just want to take as much of the risk out as possible, but at the same time, you guys are just getting into this, then it's gonna be buying a house with his wife, Bryce, you, along with Connor, are gonna maybe be buying a duplex.
Speaker 0 00:33:24 Yep. You guys are gonna be diving in and we can't wait to keep having you guys come back and share your experiences. I think there's a lot of people who will benefit, um, not just young people, but people in their thirties, forties who haven't started and they want to and it's not too late. Yeah. Right. It's not too late. It's never too late. No. I mean, I, I've kind of started over at one point in my career too, so it's never too late. But, um, so that's our show. If you made it this far, we'd really appreciate it. If you left us a review on Spotify and Apple Apple podcasts. It really helps us to grow our podcast and reach as many people as we can to help them understand the world of real estate investing. You can al also find some short form content on TikTok. Our TikTok is blowing up and it's at the Homeboys podcast where you can learn even more about the power of real estate. Thanks for watching. Happy investing. Happy investing.
