Rise Into Your Purpose: Building Wealth, Courage, and a New Future with Chase Louderback

Transcript

[Mattias]
Welcome back to the REI Agent. We have a special episode. We have Chase Louderback with us again.

I was about to say back with us and that would have been a little bit awkward. Chase Louderback back with us. But Chase was a guest early on back when we were still under the wealthy investor brand and we talked mainly about syndications.

You’re involved with mobile home park syndications and we got into your story. So definitely a good episode to listen to. We wanted to take things a little bit differently this time.

We wanted to talk a little bit about your experience and kind of how we met and how we kind of got together, but also wanted to just maybe give some advice to somebody, pretend that there’s somebody here talking to us that we wanted to give advice to about how to kind of get started in real estate and investing and in a sales agent. So when we got together, I’ll just quickly say that we hosted a real estate meetup, real estate investing group, and in that meetup we kind of always just said that hey, we’re both agents. I’m a little bit heavier on the agent side and Chase is a little bit heavier on the investing side.

But maybe we can get started with how you kind of got into the real estate world. Just give us a quick version of your first deal when you were in college, right? You wanna give us that and then kind of how you ended up being a real estate agent or getting to that point.

[Chase Louderback]
Yeah, so I guess, do you want me to go all the way from there to what I’m doing now or just?

[Mattias]
Yeah, just until you got to be a real estate agent.

[Chase Louderback]
Yeah, so when I became an agent, I had basically bought my first rental property in college and renovated it and then rented it out for a year. And then by the time I graduated college, I sold it. And so I was looking at either going to get a doctorate or some form of master’s degree and saw the money that I made from that and decided to go into real estate full time.

So that was rough. I definitely, I don’t think I would do that again, the way I did that because I just had one lump check and then I was literally just trying to find deals. I wasn’t licensed or anything at that point.

So I had two projects where I was doing a lot of the work myself as soon as I got out of college. And then one of the hurdles I ran into was, if a good deal comes on the market, even back then, this was like mid-20-teens, like 2014, 2015, you still needed to be really quick. So I was beholden to somebody else to go out and write the contract docs, whereas I was like, one, I may as well get paid for it, and then two, I can control that process a lot better.

And in some situations, I kind of use that as leverage to also give up my commission. So it was like threefold of, yeah.

[Mattias]
Why you got your license or why you went into that. How long were you investing on your own before you were licensed? I don’t remember that part.

[Chase Louderback]
Oh, it was a few years. It’s been a while now, so it’s a little foggy, but it’s like two to three years. He blocks that out of his memory.

Yeah, so yeah, it was at least two to three years where I was like, I may as well go ahead and get it.

[Mattias]
Yeah, yeah, so at one point, our office bought your office or our brokerage kind of merged with your brokerage, and we kind of were both doing some version of a real estate investing club. You had probably a more traditional version. I didn’t really know what I was doing.

I was like, let’s just get together, drink beer, and talk about real estate. But it was a great merger at that time. We’ve done a few things together as well over the years, partnered on different things.

So we’ve gotten to know each other well, and again, we always had that kind of dynamic where I was still mainly in the real estate sales side, and even in your peak of real estate sales, you were still more focused on the real estate investing side of things, right? Yeah, I mean, you compared to sales versus me.

[Chase Louderback]
It was like not even the same world, so yeah.

[Mattias]
Well, yeah, I mean, it was always, I mean, your primary goal was always to be, yeah, going in there with investing. You’ve talked about how you’ve kind of always had like almost two channels of things that you’ve done, and how maybe it’s not something that you would necessarily advise on. So maybe we can start there, then we can maybe get into like kind of how we suggest somebody to get started.

But yeah, you wanna talk a little bit about that, how you’ve kind of always had two paths?

[Chase Louderback]
Yeah, I mean, we were chatting a little bit before this about the, I think one of, I’ve got some good strengths that really helped with my growth, but then some things that like if I go back, I think I can compress the timeline and do a lot more now. One of those was the two paths, which was basically like splitting your focus. It felt like that was safer to do, diversify.

I always had two things that I’d wanted to do. So when I was doing the investing side, I was an agent. At a point, I had like a W-2 job and I was investing.

So I was like doing shifts, and then as soon as I got off going by the projects and meeting contractors and different things, I started, I was doing, and so then I had flips and got into the commercial. So I was, I still occasionally even do some flips, just a new build this year, even when we’re doing syndication. So I’ve just seen that, and I try to stop myself from doing it still where I focus on one main thing as opposed to having a bunch of different side projects because you end up just making a lot less and it taking way more of your time.

Yeah, and the other big thing too was, as I was going through the process, I kind of overestimated what was possible. So it was a bit of a mindset thing where I didn’t think one agent’s made a lot of money where I was, so I didn’t think it was worth pursuing that. And so that just kind of carries over into different projects.

So like, oh, I thought you needed to be this experienced to buy this big of a deal. I thought I needed to have this in order to do that. And so like, I kind of held myself back in some ways.

Sure. And those are probably the two biggest. My only real strength, I think, is that I just have a strong willingness to learn and I just persist.

I don’t think I’m exceptionally intelligent or anything like that. And that I just kept going at it until I kind of hit what my goals were.

[Mattias]
Yeah, I mean, you get after it. I mean, for sure. I mean, you’ve accomplished a ton.

Even if you feel like your journey wasn’t perfectly linear, you definitely accomplished a ton and it’s awesome to see. And I thought that this would be a great opportunity to kind of talk to two people, or if we’re pretending to talk to one person, two people talking to them about how a journey in the real estate world could go. And we both had maybe circumstances that would have, more for me, at the beginning when I started, I was doing a full-time job in real estate sales, but our main focus was paying off student loans.

And so that, to us at the time, was more important than having the real estate sales career take off as quickly as it could. So taking the pay hit to do just full-time sales while that was building didn’t make sense with what our goals were. But I guess if we were gonna start by advising somebody looking, like somebody just came to us and they’re like, I listen to a podcast, I wanna get into real estate, I’m super fired up, what do I do?

What do I start with? I think one of the two paths you have to kind of choose, you don’t have to, but I think it probably makes sense, and in the purpose of our conversation, we’ll just split it up. It’s kind of going the agent route for having kind of like an active income, if you will, versus going the wholesale route where people are hunting for deals off-market and then selling those contracts to an investor.

And I think those are maybe the most usual places people start to kind of have an earned income. And I won’t get into that too much. I think it’s tricky, it can be trickier to do both real estate residential sales and wholesaling.

So we’re just gonna leave the wholesaling, I have other episodes about that, other people that do wholesaling. So I’m gonna leave that out of this conversation and we can just kind of come at it from a lens of being a real estate agent and wanting to start investing. So again, what would you say would be kind of a good place to start for somebody like that?

[Chase Louderback]
Yeah, I think it, because even a step back, is like there’s two options, is you know that you want to be an operator and an active investor, then those are kind of where a lot of people get started. If you want to be passive and you’ve got a lot to start with and some people do, you’ve talked about in the other episodes where you passively invest as an LP in a syndication. You can do notes and different things like that too.

So there’s some other routes if you’re just like, hey, I don’t want to touch real estate, but I want to get some of the benefits of it. If you know that you’re going to be an operator, which I did, I wanted to be hands on, I like the creative aspects of it. Yeah, wholesaling or being an agent is, you know, probably the best ways to get in touch with it.

I’m kind of like you, I just, I think I’ve, in my career, wholesaled two deals. Like I don’t, I’ve personally had a problem with it where I was like, if I put this under contract, I’m gonna be the buyer. So, it’s very tough for me to recommend somebody new to do that because if I started over, I wouldn’t do that.

I would, I mean, maybe I would try to wholesale some commercial real estate where it makes some sense, but if you’re starting from scratch, you don’t have that knowledge. Like, it’s very difficult to do. So I think an agent’s a great way to get exposed to real estate and just kind of learn and make an income while you’re doing it.

[Mattias]
Yeah, yeah, and I think, you know, if it’s possible when you’re first starting out to get in with another experienced agent, somebody that’s successful in the business, and, you know, if you could get a full-time job with them, you know, being their assistant, being their transaction coordinator, something, that is probably the most ideal. Like, if you need some kind of income to kind of keep you going, you know, it may not, you may not be making a ton of money right away when you start as an agent. So I think that that could be an ideal scenario.

We had talked about doing one thing, or focusing on one thing, or your advice would be to, you know, do that. I think it can be a little bit hard if you want to get your first investment property, which the easiest way is to buy a house you’re gonna live in, right? I mean, that’s the easiest way to get your first property.

And if you don’t have a W-2, and you just started selling real estate as a real estate agent, you’re gonna have a very hard time, even if you’re making good money, to qualify for a loan. They typically want you to have two years of experience tax returns to be able to qualify. I know of a couple places now that I’ve heard that you can have one year.

So there’s possibilities for alternatives to what I’m saying, but for the general rules, you need two years. So one of the thoughts I had was, like, wouldn’t it make sense for somebody to essentially keep their job for a little bit, sell real estate on the side, save up some money, buy the first house that they want to turn into a rental, ideally a house that they could also have either people share or live in rooms, rent out rooms, or being a multifamily, quadruplex, triplex, duplex, that somebody could live in the other ones and kind of earn the rent, cover the mortgage, live for free at least, while they are saving up for the next one. What are some other angles of, I guess we can just term it, house hacking, that you think somebody could think about if they’re trying to get their first property getting started?

[Chase Louderback]
Yeah, before kind of touching on that, I think, too, it depends what your goals are. So if I was starting over, I like some of the commercial real estate and development side of it, so you could go work for a development company or something instead as well. So really, the benefit of being an agent is you get to control what you make to an extent.

You can hustle and work harder, whereas your salary job, you don’t have that. But if that’s, there are a lot of agents that don’t really look into the real estate investment side. So if your goal is to do something else, then you should try to find someone you can work for that is as closely aligned with what that goal is.

[Mattias]
Yeah, so for you, the end game would have been something more in the commercial kind of investing space, not necessarily being an agent. So the experience you would gain from getting a job in that kind of realm would have been more beneficial to you to have that W-2 to qualify for the first house, if that makes sense.

[Chase Louderback]
Or like in that situation, let’s say you wanna get into commercial, you were talking about wholesaling, like you could do that or be a commercial agent. There are brokers in this space that make still way more annually than net income than we do as operators, and we’re at a pretty decent size scale now. So I do think house hacking is a great way to get into it, though.

It’s talked about a lot, but the fact that- I mean, it works. Yeah, it works, and it’s just like, now there’s a lot more technology that can protect you for renting out different rooms. If you just bought a house, you make sure that zoning and everything is okay with that, then you can rent them out, have basically a free or paid to live somewhere.

But the big benefit is the appreciation. So you wanna make sure you’re still buying it right, and over five, 10 years, that’s where your real wealth is coming from.

[Mattias]
Yeah, and that kind of- Yeah, if we’re gonna keep focusing on the real estate investing side of things to begin, I think the appreciation talk is kind of important as well, because I think there’s big differences in markets depending where people are at. I think investing in your backyard is the easiest place to start. It’s gonna be the area that you have the most natural resources or knowledge, connections, all that stuff.

It’s gonna be easiest to start that way. It doesn’t mean you have to start that way, but it’s the easiest. And you’re gonna feel more secure too, especially because the first deals, you kind of just gotta get to the plate and start swinging a little bit.

Don’t take any deal, but do something. Get out there and do something.

[Chase Louderback]
Yeah, and your biggest thing, because I know you help a lot of some clients with this too, or with investing, is you just need to have somebody in your corner that’s done it before. Because no matter what you’re doing, real estate isn’t always perfect. We’ve lost money on deals.

You have unforeseen issues when you get into renovations. There’s a lot of things where if you’re doing it your first time too, I think the catch with the current market environment is there’s so many gurus and sales things out there that then you keep learning and you never do it. But you should find somebody that can actually partner with you.

You bring a deal, or you bring something to where you’re making sure that you’re learning and not getting hurt on your first couple of deals. It’s not about making money on the first couple of deals.

[Mattias]
Yeah, and maybe not right away. If you’re looking at it as a long-term rental, Eric and I, we owe about 47, $40,000, something like that on our first house now. And it’s a rental, it’s not killing it cashflow-wise, but it would sell for $270,000 to $300,000.

We’d need to put a little money in, let’s not get lost in the weeds here. But we just held that property over time and we put it on a 15-year mortgage. And I haven’t wanted to refinance it because it’s like 3.15 or something like that. But I don’t know if I would do that again. Probably just take the 30-year. But we now have a big equity win with that.

And that wasn’t a steal when we bought it. The market was slower, so it wasn’t like we were getting ripped off. But I feel like everybody thinks that they’re kind of overpaying often when you’re buying.

And so if you’re looking to buy your first house, it’s gonna be a house hack. Yes, I think it’s important to try to get a decent deal, be in a good location that you think is gonna do well over time, that’s gonna make a good rental going forward when you’re able to buy another one. But I don’t think you need to be paralyzed by it being this really big thing that you need to renovate.

If you can move into it and rent some rooms out, if you’re able to do that, then it could be a great opportunity without having to be a grand slam just to base it.

[Chase Louderback]
Yeah, and I think you had a really good point too where some very good deals I bought, at the time it was like, I don’t know if we should maybe back out of this or we’re paying too much for it. And then you look back and you’re like, wow, yeah, I wish I could buy a lot of deals at this price range again.

[Mattias]
Which ties into the point I was gonna make too is that we are kind of in, we’re in one of the coasts, right? So we are in a more appreciation-heavy market. And so there’s gonna be some other markets that people may not have as much appreciation.

They may need to focus more on the cash flow to make sure that they’re kind of getting some sort of base. I think if you look at it as like a pyramid, if you’re starting your base of the pyramid, if you’re an equity rich, if you’re in San Diego, you’re probably not gonna be cash flowing.

[Chase Louderback]
Yeah, yeah.

[Mattias]
But you’re gonna be able to get some great opportunities with equity and that’s kind of the advantage of the market. That’s what you probably need to look at as your base to start if you are investing in your back door, backyard.

[Chase Louderback]
And I think like you said, I think one of the bigger things is, take some time to study and learn and find a mentor in the market. But based on what your goals are, I personally wouldn’t invest out of state for single family rentals and cash flowing Midwest markets because that doesn’t make sense to me. For the amount of control that you have to relinquish because you’re gonna have to have a third party management company versus the appreciation you’re gonna gain and what your cash, like it just doesn’t make, but for somebody else, that could be a great thing.

For me, I feel like there are better vehicles to do that. So just really depends on what your goals are because if you want something that’s more appreciation heavy, which is likely where the real wealth is because it doesn’t get taxed as much, then that changes how your strategy is. The biggest thing, either way, like I think, going back to the one thing, is either way, whichever way you’re looking at it, you feel confident in that thesis, you just need to stick to it.

So those cash flowing ones that I’m saying don’t make much sense for me, well in five years, if all those units that you’ve bought have had their cash flow increase a decent amount, 25, 30, 50, whatever, then they’re gonna start making a lot more sense. For me personally, all my single family rentals, they just don’t really make much money and they’re starting to now, but I’ve had them for almost a decade at this point.

[Mattias]
But you’ve seen some good appreciation. Yeah, yeah, exactly. And so, yeah, and I think at this stage, what we’re talking about is kind of like the first couple deals and I think, again, kind of getting some equity to play with, whether you realize that equity through a home equity line of credit, whether you refinance, which is kind of to your point you made earlier about the appreciation is kind of a more tax, what’s the word?

It’s better for taxes because you can refinance the money out and that won’t be taxed as opposed to selling it or having cash flow come in that’s gonna be taxed. But yeah, for the base, if you’re building up your portfolio to start with house hacking, because really saving up 5% to get a conventional loan is really all you can do to start. I think that’s a great way to start.

And if you are able to pick up a property year, every year or something like that for the first five years, that’s a pretty awesome start to your career. It can be hard if you have a family, if you have a wife and kids, they’re not looking forward to bouncing around from house to house and like that. So it doesn’t work for everybody, but if you’re kind of building up your sales career as you are not really actively investing, you’re buying a house to live in and maybe you’re renting part of it out to other people and then moving to the next one.

It’s not like you’re out necessarily hunting for deals and doing active renovations and all these more advanced strategies. It’s just kind of building that base up of a portfolio.

[Chase Louderback]
Yeah, yeah. And I mean, that’s a strategy too, like builders will stay in the same spot for a couple years and then move because there’s tax advantages with that. There’s several different good ways to get introduced to real estate like you’re saying.

So just really, I used to hate this when I’d hear a podcast saying like, it really depends what your goals are, but it does because you can go the agent route, you can build homes like that, stay for a couple years. You can house hack. So I went the house hacking investor.

That’s what I did when I was started. I house hacked and just did investment real estate. So I was buying rentals and flipping houses.

[Mattias]
And you talk about building and that’s definitely another avenue. Lots of the other avenues of real estate investing involve more capital. And that’s kind of where, if you are an appreciation heavy market and you’re able to start building up that base and start establishing some equity in these properties, you can tap into that with, like I said, the home equity lines of credit.

I usually say that it’s best to try it while you’re still living in the house. If there is equity in the house, try to tap into that with a HELOC before you buy the next one. And then keep that HELOC open because the terms are a little bit better if you have as a primary residency.

But then after that, if you aren’t able to do it or you got a lot more equity in these properties and the HELOC’s not really tapping into all of that, you can secure multiple lines. You can get one line of credit on multiple properties too, which is another way to get at that equity.

[Chase Louderback]
That could be pretty cool to chat with people about because the commercial real estate side, there are standard transactions, but there’s also a lot of creativity that can go into it and that’s something that you can carry forward here. I don’t really like sub two because I think that’s a little risky with where we are in the market cycle anyway. You’re gonna be probably negative equity.

But you can still do a lot of creative things where you’re getting seller financing at a term that works and that requires you to have less down if you have a good relationship with the seller. You mentioned it before, I would, if I was doing, starting over, I would try to have some career that’s real estate focused and then look for a four unit, somewhere between two to four units to buy because you can get the 5% or less down and then basically you’re house hacking the units and then you can eventually buy something else and then lease that unit when you’re done.

[Mattias]
I mean, that’s the ideal. Getting a fourplex with a low money down because you can, up to four is where it’s not commercial and getting the FHA, getting the whatever, low entry, that’s the ideal for sure.

[Chase Louderback]
I’m pretty risk averse too though so the catch with that would be, and with any of these, depending on how your market is and how expensive the property is, is you wanna make sure that you’re gonna have at least six months of operating expenses because if two of your tenants move out and they trash the place and you’re barely making anything off of the cash flow when it’s occupied, then you’re kind of in a bad spot if you’ve got no reserves. So just making sure that you’re being smart about it like that.

[Mattias]
And that’s why we’re like, maybe that’s not the first play. Maybe the first play is just a single family and you gotta have a place to live and then if you have that equity line of credit, you’ve saved up money as well. Now that equity line of credit, you may not wanna tap into.

You don’t wanna use it as a long term thing. Like you wouldn’t wanna put it down, I wouldn’t wanna put it down as a down payment for the fourplex but you now have a safety cushion if something happens. Like you’ve spent most of your money buying this place but you have access to $50,000 in this equity line of credit.

Maybe you can rely on that a little bit so that if you do need to renovate properties or you have that nightmare situation, you have access to some capital and maybe you can then refinance it out into a new note.

[Chase Louderback]
Yeah and I think just the conversation is like, it just kind of showcases like, there’s so many different ways to do it. That’s a perfectly reasonable way to do it. If it was me and I was having trouble with the down payment portion of it, like I can’t come up with a down payment, then I would be looking for who can I get that money from and work out a deal with.

So that way, if I do have, let’s say you need to have $50,000, who could I get the $50,000 from and give them a return? Maybe they get a slice of the equity on the upside or there’s different things you can do, percentage of the cash flow. And that way, if I already had $50,000, I’m saving that for a rainy day or potentially another deal comes up and I need half of that for that other deal and then now I can do that.

I would still try to find that same person but use their money to buy the second deal. Like it gives you options. You want to have that flexibility.

[Mattias]
Yeah, no, totally. And that’s the beauty of real estate, right? There’s so many different creative strategies and yeah, just kind of getting started is usually the biggest hurdle for people.

[Chase Louderback]
Should we do a quick, here’s how I would go from house hacking, getting units to maybe a five-year plan to scale?

[Mattias]
Yeah, sure.

[Chase Louderback]
So I didn’t plan for this at all, so I have to think off the top of my head, but I would say if you’re starting from zero, then try to get into some form of salary or commission-based job where you can make a lot of money that has some of your control to increase the upside if possible. That, for a lot of people, is already gonna sound like a pipe dream, but just as an agent, whatever you can get that’s gonna pay your bills and ideally you want to maximize as much as you can, wherever your skill set is. So if you’re super low on that, like your profession, then you need to get a skill that’s going to be better paid.

That’s just what it is. And like you’re saying, an agent’s a great way to do that. The next thing would be, I would start trying to build relationships with other people that are in the space already.

A lot of, it’s incredible how the real estate investing space is because a lot of people are just really willing to talk and give advice and help. So I’ve sat down and helped a lot of people, but then there are people that I’m surprised even have a phone call with me that have provided guidance. So like getting, you’re building a little bit of a team of mentors and stuff there and also resources to help you capitalize on that first deal.

And to your point, I would try to start buying a multi-unit and hack, rent out the other unit, but then also on my own unit, rent out whatever bedrooms I don’t have or don’t need. And then from there, just keep saving and learning and building relationships to where I can take on bigger deals. So building up a better off-market pipeline to get, because right now, it’s really hard to find a deal unless it’s probably gonna be off-market and distressed.

And then just scaling up to a point to where I feel comfortable to take on larger deals. So if I started over, I would probably immediately start looking at bigger deals again because I just already have that experience, but.

[Mattias]
Right, it’s hard to know.

[Chase Louderback]
When you’re learning and you gotta cut your teeth on some of the smaller stuff, I think it’s okay to grow more organically because I hear a lot like, okay, you bought a four-unit, now go out and buy 50 units, go out and buy 100 units. I’d go out and, again, try to do eight units. Now you’re in commercial, it’s not too big, it is gonna require a lot of your time, so it’s not something you’re gonna get rich quick with, but a lot of those things, it’s actually harder to do the small ones.

So I sold a 33-lot community this year and it was way more work than our larger ones. So yeah, cut your teeth on that. You’re starting to build the relationships and then you scale on whatever that asset class is, so self-storage, multifamily, whatever.

That’s how I would do it.

[Mattias]
Yeah, you’ve said that to me a lot. Basically, the smaller deals aren’t as worth, I mean, they’re the same amount of work for way, or they’re more work because you can’t afford to hire some of the people needed to do those, so property managed to whatever, maintenance, all that kind of stuff is.

[Chase Louderback]
Yeah, I mean, it’s actually counterintuitive because your risk is higher on the smaller stuff. If you have a 20-unit property and three people move out, that’s over 10%, whereas if you have a 200-unit property, you gotta have over 20 people move out to be over 10%. So, and then to your point too, yeah, you just, a lot of the smaller properties, the owner will be doing a lot of the work and they won’t want that in the valuation when they want their price, whereas everything else is more professional and the payroll and everything else is already factored in to the price and they’re more, they’re investors.

They understand, like, okay, yeah, you’re gonna have to pay a salary for this position and here are the expenses that go along with that, so.

[Mattias]
Yeah, it makes a lot of sense. And it’s just, it’s a fear-limiting thing, so I think it’s, you know, everybody has to kind of assess their abilities to take on big, scary things.

[Chase Louderback]
Yeah.

[Mattias]
I think everybody has their own, like, tolerance for that and that is often, you know, why people never even get started is that fear, but yeah, I mean, I think I’ve heard the, you mentioned a faster jump, but I’ve heard other people talk about, yeah, doing like the, you know, start with a single family, then get a duplex, like, so the doubling up each time, quadruplex, eight, eight-ply, 16, as a way to go, but there’s not really a rule for you to need to do that. Like, if you were somebody that was very motivated and had zero money, zero experience, and then you started learning, by, you know, reading all the books and everything, but, you know, focused on, let’s say, apartments, and then you were able to find a property that you could see being a good value add and you took it to somebody, some people, and wanted to be kind of involved in that, could be a 400-plex apartment complex, and there’s not really a rule that says you can’t do that.

[Chase Louderback]
You haven’t done a single family yet. Well, in Sam Zell’s book, it was kind of interesting because he talks about how their business grew and how they just, he started out with a property management company. He also tells the story of how he bought a bunch of single-family properties and was planning to basically knock them all down to make an apartment complex, and he’s like, we just didn’t know we weren’t supposed to be able to do that.

And they just did it because they didn’t have those limiting beliefs. But I think it was also like the environment, more recently, isn’t as much like this, but it used to be very dangerous for her. It was like, oh, yeah, just go ahead.

You took a $5,000 course and you haven’t done any real estate, go ahead and buy a 200, like, it’s not, there are also no, it’s not that it’s no work. Like, you need to have a lot of experience. It is a lot of work.

My partners and I work every day of the week, basically. Like, it is a lot. You gotta learn, too.

[Mattias]
Yeah, totally, totally. And I intentionally said take it to somebody to work with on because your chances of failure doing it all yourself the first time with no experience would be probably pretty high. And it’s definitely a risk.

So, yeah, you probably wouldn’t be able to get funding. Correct, yeah, yeah, yeah. But yeah, so it’s, there’s a lot of different ways to go about it, but I think at the end of the day, like, it really, assess where you’re at with your risk tolerance and kind of what you need to get started.

And a base hit, getting a good, solid house, even if it’s, I mean, shoot, I just sold three townhouses that would probably be perfect for this. Brand new construction. They were at a pretty good price.

And what I had heard that they would rent for from a lender that had a rental in the same community, I was like, it’s actually, like, really not bad. There’s no HOA. That would actually be a phenomenal first.

And that’s probably the opposite of what you think of when you think of a good deal in investing, like a brand new construction townhouse that you didn’t build, you just buy.

[Chase Louderback]
Yeah, and some of the lending terms for those are really good, because they’ll offer incentives for that. So, yeah, and you’ve got at least a year’s builder warranty and different things there, too. So, yeah, that could be pretty good as well.

[Mattias]
And we’ve not really talked about the sales strategies or anything, but that was kind of like, you were probably spending, my mindset was like, well, we’re talking about building this income or this rental portfolio. That’s kind of like on the side, where you’re probably not spending most of your time focused on it, where you’re probably spending most of your time focusing on building your real estate sales business. And, yeah, kind of just living in the house that you’re gonna keep as a rental.

But there’s also then, so, again, you were, again, more investing, more real estate sales. If somebody else found themselves really a successful agent, found themselves not wanting to bother with some of these strategies we’re talking about, like somebody’s making $600,000 a year as an agent. They have a wife, they already have a nice house, maybe, that they’re not, I’m not gonna rent this thing out.

Yeah, yeah. And they wanna get into investing, and they’re like, I’m not gonna do house hacking. They probably would have some money to buy just a regular rental, which is possible.

But you could also just jump ahead and go into the syndication world as an investor, where you wouldn’t necessarily need to learn everything. It’s a good idea to have a good base of understanding of how these things work, because, I mean, you wanna vet your operators, you wanna vet the deals somewhat. But the idea of a syndication is that you can get some great advantages tax-wise being a limited partner in these.

So maybe just quickly break that down for people.

[Chase Louderback]
Yeah, I mean, I think the goal for everyone should be, in my opinion, would be to be an LP with a good operator, because you get a lot of the benefits of owning the real estate without having all the headaches of managing it. We have an in-house property management company, we have employees, we’ve gotta maintain that and enforce all the rules in all of our communities. We acquire, we have to do all the, it’s a lot.

So if you have that, if I was an agent making $600,000 a year and I didn’t wanna operate any real estate, that’s 100% what I’d do. I’d find two or three really good operators and then just invest in their deals. And like you were saying, learn, if you’d gone through this path that we’d laid out then and you were an operator, then you would be able to, you’d have the skills made to know if they’re actually, are they being really rosy on their projections, are they good?

Because the operator’s the most important thing. But if not, then you need to spend time learning that skill first before you spend any money with, you hear horror stories all the time, so you gotta make sure that you know how to.

[Mattias]
We’re coming out of a bloody season in that space where a lot of people were caught with short-term debt at low interest rates that turned into very high interest rates, a lot higher than they projected. So definitely good to keep that in mind as well. Vetting your operators, learning a decent amount about this space would be good.

Listening to podcasts like this, we talk about it multiple times. But yeah, you get to depreciate, you would do an accelerated depreciation on these properties with a cost seg. And then as a real estate professional, as a real estate licensee that’s full-time, I can then reduce my taxable income with that cost seg and I’ve done nothing really to make that all happen.

[Chase Louderback]
Yeah, and so what you’re talking about too, that is a possibility. I’m not a CPA, so we have investors that do it as long as they qualify for that. So your biggest thing, and I feel like the disclaimer no one says is check with your CPA because you gotta make sure that you have those qualifications.

And you can take the accelerated depreciation from the deals. But yeah, we pretty much do that on almost all of them for planning to resell them quickly than we don’t for obvious reasons. Yeah.

[Mattias]
So yeah, it’s almost like you could consider it like a realtor’s 401k. And you get some good passive income along the way, you get draws, and then there’s usually an exit strategy, refinancing the money back out to you. You might still have ownership in the deal or a sale down the line where you might earn a profit off their initial investment as well.

[Chase Louderback]
Yep, that’s right.

[Mattias]
So yeah, but I mean, these are all some examples of areas you can go. And I hope this conversation was fun for everybody. It’s a little bit different, but I thought it was time to get Chase back into the studio.

We were around my island on our first episode, but we’re in the studio now. So thanks so much for coming, Chase. It’s always a pleasure.

[Chase Louderback]
Yeah, I feel like we went kind of all over the place, but hopefully there was some good nuggets in there for people.

[Mattias]
For sure. All right.

[Chase Louderback]
Thanks.

Peace.

[Erica]
Thanks for listening to the REI Agent.

[Mattias]
If you enjoyed this episode, hit subscribe to catch new shows every week.

[Erica]
Visit REIAgent.com for more content.

[Mattias]
Until next time, keep building the life you want.

[Erica]
All content in the show is not investment advice or mental health therapy. It is intended for entertainment purposes only.