How To Invest In Real Estate On the Side.

   How do you educate yourself, and do some due diligence? I wrote an eight-hour course. It’s called Real Estate Is Leverage. It will breakdown strategies. It’s several years old. So, there’s not a lot about Airbnb and short-term rentals in concept. I really need you to dig in and learn and understand what you really want to do.  How do you do due diligence on the different kinds of real estate that are available for you.

    January 2023 we are on the heels of the pandemic. And during the amount of movement from California, Seattle, Portland, I sold tons of my Texas lots that way. A lot of New Jersey, New York, they went down to Florida, into the Carolinas. There is still a lot of movement going on. It has not stopped. A lot of people that ditched their houses, bought RVs, and lived an RV life.

    We did really well during the pandemic, buying land, doing engineering, flipping RV parks, flipping mobile home parks. A lot of people are choosing to live there, and slowly they’re going to come back into being in the homeowner market.

    Who is already doing what you’re doing, and how do you partner with them by buying them time of yourself? You could bring them capital, because maybe you have money. You can bring them credit. Maybe you have an IRA. Maybe you have a group of people that can do that. But doing it as a side business, if you have a full-time job, real estate doesn’t just get up and work when you want to get up and work. And too many of you, the reason why real estate on the side is not working is, you give it a half hour or hour after your home, tired at night, and had a few drinks. And you think, I’ll pick it up in the morning, or on the weekend. Well, business is done during the day. It’s just like any other business.

     So, I always like to, if I’m closing it on the side, which I’ve done forever on the side. I was very active as a business owner from 1999-2005. And then I started doing books, and more coaching. So, it was a full-time business. I partnered with people that do it full-time, that is what they do. That’s your safest way is, don’t go out there on your own. You don’t know enough about it. You don’t know the markets. You don’t know how fast things move.

    What’s coming in front of us in 2023, if you have cash and can access cash, or great financing through some banks, is a lot of foreclosures. Now, it’s not the foreclosures of the past, where it’s the broken down little houses, and the people can’t afford, and they lose their small jobs. We’re talking about a lot of what I call middle-class people, who were buying three and four hundred-thousand-dollar homes. And, around November 2020, into the beginning of 2021, those prices on the three and four hundred-thousand-dollar houses went to five and six hundred thousand.

    So, now, what is that person who’s sitting on say a six hundred-thousand-dollar house, that’s now being appraised for maybe 380 or 400 at the most, they are extremely upside down. So, foreclosures are coming, and they’re going to come in that category. You’re not going to see as much the foreclosure market in the apartment side. In fact, a lot of those people are going to be transitioning to a smaller rental home, or they’re going to be moving into larger apartments. So, you’re going to see a huge transition.

    How do you get educated? Well, go through my Real Estate Leverage course. Start learning due diligence. My Wealth Cycle Investment book talks about due diligence. These are the due diligence questions. Is the investment congruent with your money rules? If you need liquidity, you’re not going to do a fix and flip, because your money’s going to be tied up for anywhere between 90 days to six months.

    What is your exit strategy? Again, are you in for short-term rentals? You want this long-term. What’s big money investing? Some of you think writing a twenty-five-thousand-dollar check is a big deal. For some people, writing a 250,000-dollar check feels very similar to those of you writing a 25,000-dollar check. So, what does it mean? How much do you have? What percent of your total portfolio are you going to start investing in real estate? Who has the oversight of the investment? 

    Who’s on the ground watching it? I call them field partners. Which is why I like to partner with the person doing my real estate on the side. Is the information public? Is there a portal? Have they setup some sort of fintech (financial technology), so you can see what’s going on? Can you see bills being paid? You can see rents coming in, rents accelerating. 

    Are the economics sound? And here’s the biggest one, is there a marketing and a business plan that can deliver the economics that you promised, or are you just being promised a whole bunch of stuff? And can the leadership deliver what they say?

    So, what do you want to do as a real estate side hustle? A lot of people say wholesaling. I think that’s challenging. Again, you’re a newbie. To wholesale, you’ve got to have a list of buyers, and a list of sellers. And somewhere, magically in the middle, find a title company where you can do a close, and you take the spread. That’s harder than you think, if you’re starting from ground zero.

    I’d rather see you arbitrage Airbnb. You can find people who have homes that are in neighborhoods that allow Airbnb’s. You can put out the ad, find the people. Do the tenants and take eight percent, and if you do all of the project, do all of the cleaning, tenant improvements, and reset the home, you could make 20 percent. Short-term are always more lucrative, but you’ve got the tenant turnover.

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