Only 10 Houses Stand Between You and Financial Freedom with Peter Skaggs

The Real Estate Investing Club

Join an active community of RE investors here: https://linktr.ee/gabepetersen  0:00 - Welcome to the show 1:12 - Peter Skaggs' real estate investing origin story 3:51 - Why finding a mentor is the fastest way to get started 6:16 - Buying his first rental property in 2007 7:48 - Surviving the 2008 crash and selling his primary residence 10:05 - Diversifying into commercial, short-term rentals, and apartments 13:49 - Why single family rentals are more forgiving than commercial real estate 16:35 - Low barrier to entry and the truth about property management 20:37 - The real path to financial freedom with just 10 to 20 doors 25:01 - Advice Peter would give his younger self 26:52 - The best real estate markets to invest in right now 30:23 - A multifamily deal that went sideways and the lesson learned 32:34 - How Peter uses AI to evaluate real estate deals faster 33:45 - Where to find Peter and his free deal analyzer tool  🏡 MEET PETER SKAGGS: A REAL ESTATE INVESTING JOURNEY THAT STARTED WITH ONE MENTOR  In this episode of The Real Estate Investing Club, host Gabe Petersen sits down with Peter Skaggs of Investor Lighthouse to unpack a real estate investing career spanning single family rentals, multifamily apartments, commercial buildings, and short-term rentals. Peter shares how watching his uncle buy a rental gave him the confidence to buy his own home just five doors away, proving the fastest way to start investing in real estate is to find a mentor and copy what already works. 🔑  💰 SURVIVING THE 2008 CRASH AND DOUBLING HIS MONEY WITH FIXED FINANCING  Peter bought his first rental property in early 2007, right before the housing market crashed. He walks through losing his mortgage industry job, selling his primary residence, and moving his family into that same investment property to survive. Because he had a 30 year fixed mortgage, Peter waited out the downturn and eventually sold that property for nearly double what he paid, a case study in why fixed rate financing is one of the most underrated real estate investing strategies. 📉📈  #RealEstateInvesting #PassiveIncome #FinancialFreedom #SingleFamilyRentals #RealEstateInvestor  Want to learn more about our guest? Connect here: https://www.linkedin.com/in/peterskaggsofficial  Want to learn more about the REI Club Podcast, how to invest with Gabe at Kaizen, or join our community of active real estate investors on Skool? Visit the podcast website at https://www.therealestateinvestingclub.com or click here: https://linktr.ee/gabepetersen

Transcript

00:05all right welcome back to another episode of the real estate investing club i hope you guys are

00:12having a great day great week wherever you are and whatever day it is for you as always it is

00:18friday on the podcast we're bringing that good friday energy to you guys and man it is getting

00:24kind of cold here in uh in seattle it's the end of august we're just turning the corner into

00:29september coming up here soon school's gonna start starting in the next uh next couple of weeks and

00:34this morning i walked up or i got up and i got a cup of coffee went outside and i

00:38was actually

00:38chilled which honestly i'm kind of excited for because being being from seattle i uh you know i

00:44love the summer it's it's awesome but then at the end of summer i'm always like i just want to

00:48be

00:49in rain i want to be inside cuddled up so i'm looking forward to it but it is a good

00:54day for

00:55a second reason because we have peter skaggs with us on the show today peter is from investor

01:00lighthouse he does all different types of real estate multi-family short-term rental commercial

01:05single family you name it he's probably done it so there is a lot of experience to jump into here

01:10peter thanks for hopping on the show i'm thrilled to be here thanks gabe absolutely um i told you

01:17before we got on here we always like to start with stories we like to hear how people got to

01:21where

01:21they are so why don't you take us to the beginning of your story in real estate and just tell

01:26us how

01:26you got here i appreciate that so uh i was telling you you know i met a girl i lived

01:32here in utah

01:33um a fellow washingtonian there but uh i came down here to go to school met a girl and uh

01:39we got married

01:39and then we were doing that thing you know a school and working full-time and just busy busy busy

01:46and had no money uh no money and uh um was just trying to figure out life the two of

01:54us we we scraped

01:55together a few dollars and ultimately bought our primary residence about a year into our marriage

02:00and uh and continued to just scrap and scrimp and save and i always i knew i wanted to be

02:08in real

02:08estate i knew i wanted to be in real estate uh i didn't know quite why i wanted to be

02:13in real estate

02:14but i knew i wanted to be in real estate um and got to you know i was doing all

02:19the things reading

02:20books talking to people i was finding that you know most of the wealthy successful people around me

02:25gabe were had some level of a portfolio in real estate that they had built right and uh and so

02:33it

02:33fascinated me and i knew i wanted to be it but i didn't know where to start or how to

02:37start or

02:38you know i just and it scared me it's a you know can be a little bit of a big

02:43investment right out of

02:44the gate and and um and just we had a cute little you know uh home and it was just

02:51the two of us we

02:52had a two bedroom and my uncle came into town he asked if he could stay with us and i

02:57said of course

02:58you know and so we let my uncle very successful down in arizona uh stay with us and you know

03:05hey

03:05uncle why are you here in town and uh he says well i'm looking at buying some real estate here

03:10and uh he wanted to be able to escape the the summer heat in arizona and come here to utah

03:17it's

03:17a little cooler here and um and i said i would love to do that you know can you teach

03:23me you know

03:24and uh and basically he said well i've been looking at these communities and rents and you know and he

03:30showed some data and i most of it you know didn't really truly understand but ultimately he said

03:36i've decided on this neighborhood new construction you know look good good rents good square footage

03:42uh good price per square foot and he says so i'm buying this house and i said okay and i

03:48literally

03:48bought the house five doors up from him so i had no clue what i was doing but that was

03:53my first foray

03:54into i i do know i call out uh you know on this show so often we talk about like

03:58the best way to get

03:59started in real estate and that is to find somebody who who's been doing what they're doing and that is

04:04exactly what you did you your uncle he knew real estate he'd been doing it for a while and you

04:09just basically copied him no shame in that that is exactly how you should do it because he he knew

04:14the steps to take to identify a good investment and you just kind of piggybacked on that you

04:19understood you you had him show you through you know why it was a good area why he thought that

04:24this

04:24was a good investment and you put your money where your mouth was and so i think that's a that's

04:28a

04:28great way to get started um is got family members who are doing it just kind of copy what

04:32they're doing yeah it was great you know i i knew him i liked him i trusted him you know

04:38and then so

04:39you know i still in the end bought something that i didn't totally understand you know but uh i just

04:46followed in suit and it worked out actually really really well for us so yeah and i mean whenever when

04:52you start in real estate for everybody out there you haven't bought your first deal um you are not

04:57going to feel 100 confident on your first deal because you've never done it before you don't have

05:02the experience to to kind of rest on to look back on and so you're never going to have all

05:07the answers

05:08you're never going to know exactly what to do um everything is an is not not an experiment i don't

05:13want to use that word but it is it's uncharted territories which is why it is so good to get

05:18a

05:18mentor to kind of copy somebody who's already doing it because you you can't see around corners um if you

05:24don't know something you just don't know it and so being able to replicate what somebody else is doing

05:28is so useful um anyway keep keep going so you bought that uh that rental you saw that your uncle

05:36was going into this area you bought the rental i know you have changed uh asset classes and strategies

05:42a bunch since then so tell me kind of how did it evolve since then yeah so i bought that

05:47single

05:47family uh had a single family that i was living in and i was liking real estate and it was

05:54working

05:55for me and uh it seemed that uh most of the people around me were like you know single family

06:02is

06:02you know that's a stepping stone it's a starting point but ultimately it's not where you land you

06:07know that you should be looking at other asset classes and so that's what i did now i should say

06:13that i bought that uh that rental property in 2007 the beginning of 2007 gabe cool and that we yeah

06:20so the timing was awesome you know but uh luckily we did long-term 30-year fixed financing on it

06:28and uh and luckily i had what were uh what were interest rates back then you know i that's a

06:35great

06:35question i i want to say i was probably i i think i was probably in the uh low fives

06:42oh wow you know

06:43something interesting yeah so it was pretty good yeah i was cash flow and i think i was collecting

06:49eighteen hundred dollars in rent i remember that and i think i was my mortgage payment was somewhere

06:54around twelve thirteen hundred bucks a month you know so yeah you know and so the economics on it

07:00were pretty nice you know i mean i wasn't you know i wasn't stacking hundreds but uh you know

07:06stacking pennies you know and it was good we self-managed the property it was literally

07:12blocks from where we lived and yeah i asked my um my dad and i we had a conversation earlier

07:18and

07:19the first house that they bought i can't i think it was in the 90s at some point uh or

07:24not the first

07:24house but that first like family home that they bought i think it was in the 90s their interest rate

07:28i think he said like 11 or something like that and it just kind of put the context of where

07:34we are

07:34today we think industries are so high at seven percent which is high compared to where we were in

07:402019 2020 2021 um but in the grand scheme of things it's not not that high seven percent is is

07:48you know it is manageable anyways keep going yeah so that was it uh so that whetted my appetite but

07:56now i'm being told that oh i need to level up you know i need to level up and so

08:00um i had to wait for

08:02some of the economics so i actually am in the mortgage space and so 2008 9 and 10 were really

08:07rough

08:08and in fact uh the company that i worked for that uh was helping me to generate some income

08:13ultimately um you know melted down like a lot of mortgage companies in 2009 and uh went out looking

08:21for a new job and uh you know my wife and i um were you know just we you know

08:29we had just bought an

08:30investment property and we got to be where we were poor my wife remembers it slightly different than i do

08:36i remember something to the tune of like uh you know three or four hundred dollars in our bank

08:40account she remembers thirty forty dollars in our bank account either way we had no money in our bank

08:45account and uh you know and what a blessing that we owned that home so we ended up gabe selling

08:51our

08:51primary residence uh we ended up netting on that i owe about eighty thousand dollars you know um after

09:00commissions closing costs and paying off the mortgage on it and that eighty thousand dollars is what we lived on

09:05and what i started my company with and guess where we moved moved into our investment property

09:11and so we lived in our investment property so that's not a path i recommend but you know we had

09:17literally nothing and that investment property i bought it for about three hundred forty thousand

09:21dollars it went down to 220 i had it appraised in 2010 or 11 for 220 000 you know it

09:29had gone upside

09:29down because of you know what was happening in the market at the time but i was able to move

09:34into

09:34that property because i had 30 year fix i could wait it out in you know time allow time to

09:40do

09:40its job i sold that property in 2021 for 640 000 bought it for 340 and appraised for 220 ended

09:48up

09:49selling it for 640 but the only reason i could do that is because i had great fixed financing on

09:55it

09:55and so now in between there and to answer your question more directly um in about 2000 let's see

10:03uh 15 uh i needed a commercial building for my business and then so i bought this building that

10:13i'm in right now um that was good i have you know half of it's being occupied by other tenants

10:20they pay

10:20most of the mortgage um and that's really really nice that worked out well and then in uh

10:27uh the next year i bought a short-term rental uh in hawaii and uh and that's been a wonderful

10:34investment but it's been a wonderful investment for other reasons you know and so and then i and then i

10:40bought some apartment complexes in the midwest uh and then i stumbled into i kind of came full circle

10:47i stumbled into a single family again and uh found a few uh great providers out in the midwest

10:56and man i've liked that a lot it's gave it's given me a lot of control it's been really quiet

11:03it's passively growing in the background the economics on it are great you know and so that's

11:10really where i've doubled down and so the last you know uh i don't know a couple dozen doors now

11:16that

11:16i've bought i've all been single family again so i came came full circle so nice yeah and you know

11:22so often on this show we kind of we frame the investor journey or or evolution of their career

11:30as in you get into single family and then you move on to bigger and better things you get industrial

11:35multi-family whatever but right um it's always good to remember that single family really is the

11:41backbone of real estate that is the uh that's that's what's most prevalent out there it is

11:45there's way more single family than any other asset class and they it's the one you know it's not

11:51commercial and so it's valued on what other people are willing to to pay for it really that that is

11:57it

11:58and it's not based on the you know the noi of the property it's based on if you're in a

12:02good area

12:03it's not it's you know it's not the cash flow it is the it's the appreciation and is what people

12:07are

12:07willing to pay for it and so it's a they they've moved into asset-based lending on single family

12:12we do a lot of dscr that's you've probably heard that you know term being commercial guy we've got

12:17that now in the residential space and i almost exclusively i know about half of my business so

12:23you're right we'll do the normal conventional financing where it's based on comps the neighborhood

12:29and whatnot but we do a lot of dscr where they will look at what are the economics of that

12:36asset

12:37you know versus what is the debt service and uh and so that's been a change here in just the

12:44last

12:44i don't know uh half a dozen years you know in the residential space and that's yes been really

12:51appealing to me i say that because um just to say that like single family it is a good asset

12:56class

12:56in and of itself now and we've had a couple guys on here that who do focus on single family

13:01and

13:01one thing that stuck out to me i can't remember who said it but he said

13:04if you if you buy wrong in single family just wait 10 years and it'll be a good asset um

13:11and that is

13:11just to show that uh you know if you're in a market that's not depreciating you can't buy in you

13:17know

13:17something where everybody's leaving but if you're in a market that is stable and appreciating a little

13:22bit you might make a small mistake on the acquisition but so long as it's cash flowing a

13:27little bit if you wait a little you know a little bit longer you will it will be a successful

13:32investment that's not true on the commercial side if you buy wrong on the commercial side

13:35it is very difficult to come back from that um but buying wrong in the single family side it's a

13:40little bit more i don't want to say um i don't want to say go out and buy wrong in

13:45single family

13:45but no right right or giving uh because of appreciation and the way that single family is valued

13:51they say uh they say you buy wrong in single family it's like getting a bad haircut you just wait

13:57a

13:57little while it'll fix itself you know and uh and so that's yeah that's exactly right i love it because

14:03huge buying cool uh you got two different kinds of buyers you can sell again to somebody who

14:09wants to own it uh occupy it or another investor you've got the best and candidly a lot of times

14:16the

14:17easiest financing you know a 30-year fixed mortgage that gives you that runway there's a very famous uh

14:24guy in our space here gabe that just lost 15 million dollars of investor money because he bought

14:30commercial and then didn't realize what was going to happen in the marketplace yeah and it caught him

14:36and he couldn't refinance because cap rates went way up he ended up having to sell and sell for

14:41basically what he bought it for after all of the improvements and everything and lost a lot of money

14:46from investors and and that's you know hey sometimes that is what it is and there's a space for

14:53commercial and some guys love that and are attracted to it and great but for most of my

14:58audience they're busy professionals who are put on this earth not to be real estate investors full

15:04time but they've been put on this earth to do something else to be roofers to be plumbers to be

15:09hvac to be you know uh sass to be whatever it is but they know they want to be in

15:14real estate and

15:15that's who i love to help is because i can help them build a nice portfolio that's growing in the

15:20background that has that safety and security of a 30-year fixed mortgage and and they can wait it

15:26out if the market changes you know my i'm a perfect example it took me 14 years but ultimately i

15:32doubled

15:32my money you know um even through the worst economic real estate crash in uh recent history so yeah yeah

15:41the

15:41one um kind of recurring pushback that i myself feel and that i've heard a lot about single family

15:48is it essentially takes the same amount of effort not the exact same amount of effort but a similar

15:53amount of effort to buy one house that it does to buy uh you know 200 unit multifamily it's not

16:00the

16:00same i don't want it is the same but yeah relatively you know relatively the same amount of effort to

16:06get

16:06the that transaction transaction done um and so if you're going to be buying something for the purpose

16:11of an investment for the purpose of cash flow you might as well go big because it's you're still putting

16:17that amount of effort out um and then on the other side there's also the management aspect of it

16:22you buy a single house it's a lot uh the it's a lot more difficult to get a good property

16:29manager

16:29for one house than it is for a 200 unit apartment complex um because you know there aren't that many

16:37quality property managers out there that would be just a single a single door um so kind of address

16:43those two um i don't want to say negatives but uh you know things that people don't like about

16:50single family yes yes yes i appreciate this very much so a single family has a little lower in my

16:57experience single family has a little lower barrier of entry from a capital uh standpoint i don't need

17:02to go raise capital i don't have to bring in other investors and now i have their money on the

17:08line

17:08as well as my own money uh i can get into a single family i just bought two of them

17:13a couple months ago

17:14uh and they each cost me about forty thousand dollars you know i bought two hundred thousand

17:20dollars two hundred thousand dollar new construction four bed two bath in the midwest oh you're talking

17:26about your down payment not the cost of the house that's right that's my down payment 40 grand

17:30yeah 40 grand and so that the barrier of entry there is a little easier and so yes the workload

17:35you know

17:36probably pretty close to about the same you know uh but ultimately um barrier of entry getting in

17:42is a little easier and then it's also easier to exit a single family if i ever needed to

17:49that a lot bigger buying pool uh you know the financing terms you know a lot more available

17:55financing options you know i have a couple of apartment complexes one that's 180 doors another one

18:02that's like oh it's 60 or something doors uh maybe it's 50 doors but um uh i know who the

18:09buyers are

18:10you know it's a kind of a chummy group you know in the market versus single family i've got much

18:17much

18:17much bigger buying pool potential buying pool so that's the reason property management absolutely

18:23100 i've had bad property managers they are you know there are a lot of those out there we've solved

18:29that problem in that we have certain markets and we have a lot of the uh infrastructure available

18:36so if you know you know if you're a busy professional if you're wanting to get into real estate but

18:41you're

18:41afraid of those things well i can show you the asset it's already leased you don't have to do you

18:47know

18:47a bunch of rehab it's it's new construction and we've got property management that is excellent

18:53stellar in place you know and and so i can just point you right to that now i'm not going

18:58to get the

18:58benefit you are gabe where you go in and do you know some value add you know you're i'm not

19:04going

19:04to get that sweat equity um but a lot of us are looking for that we're busy in our day

19:10job and our

19:11best time is spent being the roofer the plumber the hvac the sass salesperson the lawyer the doctor

19:17our best effort is you know what god put us on earth to do you know and let's also have

19:24real estate

19:25and build a portfolio working in the background growing in the background and doing the things

19:29that it does you know with appreciation cash flow tax benefits uh you know and the principal pay down

19:35having the tenants pay that down so those would be my reasons for single family uh and you know when

19:42i

19:42first bought a single family you know i was i was making an aisle of three four hundred bucks and

19:47i was

19:47like you know in order to meet my goals and to be financially free i'm gonna have to have a

19:52hundred of

19:53these things and i was you know that was just like there's no way i don't want to manage a

19:57hundred

19:57property i don't want to go acquire a hundred what i've learned though gabe is that i can show people

20:04that they can be financially free in 10 years or less and that all they need is 10 to 20

20:10single

20:10family properties that's all they need because what's going to happen is those properties are going

20:16to go up in value over time the cash flow on a monthly basis for a working professional we're

20:22not you know i talked to a couple investors yesterday a husband wife they're like we don't

20:27care about cash flow right now we've got great jobs but we want something for the future and so

20:32the cash flow just helps them cover vacancy and maintenance and get them down the road 10 years

20:36to when the real wealth in single family is built uh through appreciation coupled with that

20:42principal pay down and they do a cash out refinance new debt and they can live on that and we

20:48showed

20:49them how you know all you need is one or two assets each year and you can have a four

20:54to five

20:54hundred thousand dollar equity realization debt tax free you know and uh and and you can now live on

21:01that you can be financially free and you only need 10 to 20 single families so different game

21:07different game i'm not a full-time real estate investor you know that's not for everybody but

21:13i would listen to you know guys like you who you inspire me gabe i want to go and get

21:18mobile parts and

21:19stuff but i also feel like god put me on this earth to be in a different space than full

21:25-time real

21:26estate and so i tried to figure out a way to do that you know do both and i feel

21:31like we've stumbled on

21:32that here through a lot of trial and error yeah absolutely and i i want to highlight that because

21:37a lot of people you know they they want they hear about real estate as the avenue for financial freedom

21:43for for their ability in you know 10 years down the road 20 years down the road to be to

21:48live

21:49not cush but to live a good life in retirement um it's the way that they can build wealth and

21:54that

21:54is 100 true but um commercial real estate is not it is a business and i that needs to be

22:02stressed

22:02because when people hear about buying commercial real estate they think that it can be passive it's

22:06not passive it is you're running a business it is a full-time thing and so if you are going

22:11in

22:11onto the commercial side of real estate it's really difficult to do as a side job um but that is

22:17not true

22:17with single family uh just because i mean all the reasons that you said and so you can buy a

22:23single

22:23house um and just wait for 10 years and then that appreciation will catch up to you the the principal

22:29pay down will catch up to you all that you know the tax benefits that you're talking about and so

22:33it is

22:34a really good i mean it's not 100 um risk-free yeah no passive yeah it is it's a lot

22:40more passive than

22:42repositioning commercial assets so i really like that you uh that you called that one out um with that

22:47said man we have crushed the 20 minute mark so we do need to move on to the quick question

22:52round

22:52are you ready i'm ready all right let's do it it starts with education it could be any form could

22:58be a book you've read movie you've seen conference you've been to anything like that i just need two

23:03recommendations one for general life wisdom and then one for real estate general life wisdom i've

23:09been thinking about this so i hope it's okay but i'm gonna give you a spiritual is scripture i love

23:15scripture i try to spend time with scripture uh i have benefited tremendously from scripture in my business

23:21and otherwise but from a secular you know it's probably the the standard uh think and grow rich

23:27that really started me on my journey you know 30 years ago and so those would be you know my

23:35two on

23:35the kind of the um personal side on a business side there's a book that you've probably never been

23:41recommended but it is it's a phenomenal book it's a fairly new book retire in 10 years or less

23:48uh ryan d lee and robert allen robert allen is the godfather of real estate he's the one that

23:55inspired kiyosaki and so uh robert allen and ryan d lee wrote this book probably about a year ago now

24:02that i i stumbled on and it is phenomenal and um so that would be my recommendation from the real

24:08estate side nice i love it and i i honestly like the framing of 10 years or less because it

24:14while it is

24:15um you can retire in like two to three years in real estate if you really put your your you

24:19know

24:19your nose to the grindstone um but the realistic framing and the realistic timeline for most people

24:26who want to keep working their jobs they like their job they want to stay in it 10 years is

24:31is that's a

24:32good timeline to be looking at you think long term you just start stacking those houses and over over

24:3810 years um it is very very realistic to uh to retire so i like i suspect i'm like you

24:44i don't

24:44believe in real retirement but i want to have options you know i want to be able to say yes

24:49to

24:49the things i love no to the things that you know i don't want to necessarily do and that's what

24:55ultimately this will give you is is that ability to say yes to the things you love more time you

25:02own

25:02more of your time so yeah absolutely all right next question is for your younger self let's go

25:10back to the peter who was just starting out so many years ago he was walking around uh that that

25:15investment with his uncle um i don't remember the year you said i think you said 2007 2007 yeah go

25:20back

25:20to him look him in the eye give him one piece of advice moving forward i i think the piece

25:26of advice

25:26that uh i have right now for young peter is pick an asset class and go a mile deep and

25:33an inch wide

25:34i went a mile wide and an inch deep on all these asset classes and as a result i was

25:40a jack of all

25:41trades and a master of none get good at one asset class real estate has lots of rad verticals super

25:48cool stuff out there storage uh hospitality whatever it is right pick one that resonates with you and then

25:55just go a mile deep i i have left a lot of money on the table by chasing what all

26:02the gurus tell me i

26:03should be chasing when i should have just peter stay focused get really really really good at doesn't

26:09mean that eventually i couldn't pick up a second asset class but you know uh pick one go a mile

26:14deep

26:15an inch wide get really good at understanding the financing the economics the markets the you know the

26:20providers all of those things yeah i i mean i will second that to the moon i uh i did

26:25the same

26:26thing as you i bought single family small multi-family mobile home park self-storage rv parks commercial

26:32retail you know i've gotten that that itch to buy other assets but you really do see the compounding

26:38effects when you focus in on one um so yeah i would say that absolutely for myself as well um

26:45moving on to

26:46the next question this is about the u.s it's a big place there is a lot of opportunity out

26:50there

26:51give me the single metro you're most excited about investing in today i've been thinking a lot about

26:56this question and that is it is a very difficult one i'll give you a metro but it may just

27:02be i would

27:03expand it just a hair but um i i'm i just bought in the memphis tennessee market a new construction

27:10you know it doesn't have massive appreciation but the economics from a single family rental

27:16you know i could buy a two hundred thousand dollar new construction there it's going to rent for

27:20sixteen seventeen hundred dollars you know so the economics there are great and i would expand it

27:26i'm really big on little rock which is just maybe an hour or two less yeah yeah little rock arkansas

27:33so those would be my two i you know and and just those yeah that that's where i'd be so

27:40i like the

27:40southeast as well um northern florida where the hurricanes don't necessarily hit uh maybe into

27:47georgia carolina's you know that market as well it's interesting uh um little rock i i have a negative

27:55association i bought a self-storage facility in um in hot springs uh a while back and we just got

28:01broken

28:02into like left and right and center and i i think i heard that that like 1800 or something or

28:08maybe

28:08that was your guess that was saying 1800 calls to the police but uh oh yeah you know i don't

28:12think

28:12it was 1800 but it was uh um yeah it was just i had a bad association just with that

28:18area but i have

28:19heard thing good things about little rock being cheap uh well inexpensive um easy to get into that

28:25kind of thing so really good call out it's crazy new construction for 200 000 in memphis that is

28:30that is surprising to me that is four bed two bath they're great little assets you know good

28:37economics i can get i actually have a relationship with the builder where i can get financing in the

28:43fives on a 30-year fixed so i locked in personally five and a half percent 30-year fixed interest

28:50rates

28:50on those uh new construction and i can get other investors that same or similar deal of course if

28:58they qualify but um so yeah nice man i love it all right moving on to the next question this

29:04is

29:04about finding deals it all starts with getting in contact with the seller and pending that purchase

29:08agreement so what is your favorite way to generate leads and find new deals i'm gonna cheat here gabe and

29:14i'm gonna say uh your listeners should call me because i've got some relationships with some

29:19builders who build these assets and and i can get them in contact with them and i've got a handful

29:25of

29:25them throughout the country that are excellent how did i find them trial and error trial and error

29:30trial and error i've tried all sorts of markets from detroit to st louis to kansas city you know on

29:35through uh birmingham alabama i mean you name it i've tried these markets and i've zeroed in on a

29:41few that really worked well for me so if somebody wants to get in the single family space the product

29:45that you and i've been talking about if they just reach out to me um i can get them connected

29:50with

29:50the right providers and the great thing is i'm not involved it's their money their purchase they

29:55you know i i'm i might help them with the financing but that's the extent of my involvement they own

30:00the asset but i'd be glad to connect them so perfect and we'll and we'll talk about how to get

30:05in contact

30:05with peter at the end of this section in a couple minutes here so stick around you guys if you

30:10do want

30:10to get that uh moving us on to the next question this is about lessons learned not every deal we

30:15get

30:15into goes the way we expect it in fact pretty much every time something goes wrong and that's when

30:20we get to learn a lesson so what was a deal that went a little bit sideways for you and

30:24then what

30:24was the lesson you pulled from it you know i i've got um i've got a couple apartment complexes i've

30:30mentioned this and what went wrong for us there is we just we underwrote them uh underwrote them well

30:37but ultimately uh we didn't expect the market to turn as dramatically as it has in the last four years

30:45you know and uh and so the cap rates have you know climbed as interest rates have climbed and

30:50and it's just made very difficult we're at that about seven year mark into these things where we

30:56would normally refinance all of our capital out and we just we can't you know uh we're just stuck

31:03luckily we got a hud financing on this was a 30 35 year i try to live what i preach

31:08and that is i got

31:09long-term fixed financing so luckily the financing's phenomenal on it but in the end you know we're

31:16gonna have to wait a long time so i guess the mistake and the lesson learned are all one in

31:21the

31:21same as one i've got partners on that deal so it's hard to you know i feel the weight of

31:27having those

31:28partners and i hate that i have to tell them hey we're gonna kick the can down the road we

31:33can't do

31:33anything you know they were counting on money and you know and i'm having to tell them sorry so

31:38having partners can be sometimes difficult not having that control but i love that i have

31:44long-term fixed financing so i'm not having to tell them hey i've lost all your money and i'm

31:48selling at a discount and you know sorry you know i i don't have to do that so yeah yeah

31:54fixed financing

31:55is i i never would go well i mean i have in the past but it is yeah if you

31:59get variable financing

32:00it has to be like the underwriting has to be absolutely just on point there's like unless

32:07the the interest rate goes to like 15 percent um there's not going to be a problem at least that's

32:12how i look at it variable financing is is scary if you uh if if there are thin margins and

32:18so really

32:19really be wary of getting variable um all right moving us on to the second and last question this is

32:25a new question that we've been asking it's about ai ai is here to stay and it has a huge

32:30impact on those who use it effectively what is the um best use case that you've used ai in your

32:36business today you know i i think i um i'm just able to determine markets and assets and the numbers

32:44you know just much quicker and uh and and actually run more scenarios go you know deeper into the what

32:52ifs and and and and the considerations i just feel like i have more information at my fingertips using

32:59ai so um i'm not using ai for i use ai a little bit for bookkeeping and some of the

33:06managements of

33:07my portfolio but it's pretty minimal really where i use it on a daily basis is just evaluating new

33:13markets and and the economics of the assets the single family assets that i i'm drawn to so yeah

33:20yeah it's uh it is crazy how um how much it's cut down on my underwriting time i can you

33:27know i used

33:27to spend hours and hours underwriting these deals and now i built a skill in clod it knows exactly what

33:33i'm looking at and i can just pop it into there double check everything's right and it uh it does

33:38a great job at underwriting um moves us to the very last question this is for the listeners you've given

33:44us a lot to think about i'm sure people want to reach out get in contact with you this is

33:48a two-parter

33:49where can they find you and then what can they expect when they reach out best place to find me

33:53is investor lighthouse.com investor lighthouse.com and what they'll find there's just some basic

33:59information about who we are really what i want them to pay attention to gabe is in the upper right

34:04corner we have a deal analyzer tool that's absolutely free to your listeners um and they

34:08can go in and analyze it's built for single family may not work for a commercial or a you know

34:13a mobile home park uh but single family it's a phenomenal tool uh we built it and uh and then

34:20they can click on review you know analyze a deal and then from there they can click on uh you

34:25know

34:25review the deal with peter and uh they'll be able to schedule time with me and what they would expect

34:30is

34:31no obligation coaching is free that you know i'd be glad to look at the deal i love this stuff

34:38and i'm passionate about it and so um i would love to look at deals with them and just hey

34:44this is why

34:45i think it's working this is why it's not working this is how i might fix it to make it

34:48work you know

34:49we can go through that together and uh and so that's that's what best way to get a hold of

34:54me and then if

34:55they want to be introduced to single family providers like the ones that i'm working with i can

35:00make those introductions as well again they're i'm not affiliated with them other than i've just got a

35:05close relationship from a lending standpoint so perfect all right we will put those links in the

35:11show notes so if you guys want to reach out or check out that um that underwriting tool peter was

35:16talking about all you got to do is go into the show notes click that little more in the description

35:20it'll pull down the full description and in there you can find his links all right man that wraps it

35:26up

35:27thank you very much for hopping on the show thank you gabe appreciate you absolutely for everybody is

35:33with us today thank you guys for showing up you are the reason we do this so if you guys

35:37have any

35:37questions reach out to me gabe at the real estate investing club.com if you guys want to support the

35:42show just leave us a comment review anything like that other than that i hope you guys have a great

35:46week keep rocking real estate and i look forward to seeing you on the next episode

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