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Will 2023 Be The BEST Year for a Real Estate Investor? | Episode 14 | STR Data Lab™ by AirDNA

Many people believe that you must be experienced or have a large income to invest in real estate. When in reality, you have to have a strategy. That’s exactly what Adam Nelson did we he dove head first into investing while he was working his 9-5. He had a checklist of different types of real estate he wanted to invest in, and that path led him to Airbnb. He started with house hacking, then moved to investing in single-family homes, then got into multifamily investments. That’s when he realized he wanted to invest in short-term rentals because this type of investment had the greatest reward on investment.

This week Mariah Kamei sits down with Adam Nelson, or some may like to call him the Top 1 Percenter. He walks us through his real estate journey that started when he was 22 during the 2008 recession. Adam also gives us the inside scoop on what he has learned in his 17 years in real estate. From the mistakes he has made to what he plans to do in the future, he gives us practical advice that you can use when starting your own real estate investment journey.

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Transcript

00:00:13:16 - 00:00:19:01

Speaker 1

Adam Nelson. How are you? Or should I should I say the Top1Percenter.

00:00:19:09 - 00:00:31:19

Speaker 2

You can call me the Top1Percenter. Adam Nelson's just fine too, but Top1Percenter. It started about a year and a half ago and it's just caught on. I don't know why, but it's been it's become a cool brand for me. I guess.

00:00:32:05 - 00:00:38:12

Speaker 1

I like it. No, it works. It's very memorable. I love the logo in the background, my friend. Nicely done.

00:00:38:13 - 00:00:41:24

Speaker 2

Yeah we're all. We're going all in.

00:00:41:24 - 00:01:13:03

Speaker 1

Yeah. That's the only way to do it. And also subtle branding. I'm always a fan. I'm always a fan. Well in addition to talking to you about your amazing branding which yes thank you for indulging me in that as the VP of Marketing. I do care deeply about it. I have brought you on the podcast today to talk about your investment business and I always just like to start with the basics I like it's like it's kind of like armchair therapy.

00:01:13:03 - 00:01:20:23

Speaker 1

I'm just like, Adam, talk to me. How did we get to this place, man? What possessed you to get into this business?

00:01:21:24 - 00:01:48:02

Speaker 2

Yeah, So it's kind of a long time building up to this point, right? Obviously, real estate and investing doesn't happen overnight, you know, and I've been in the sales industry and been a sales professional for 16 years now right. And I I've always been interested in real estate. I think everybody that's listening to this is interested somewhat in real estate.

00:01:48:02 - 00:02:11:07

Speaker 2

They understand that wealth is created through real estate, right? And so I was the same way at 22 years old. I was starting to make professional income in sales and I saw other people buying real estate. So I decided to just jump in. And this is in 2008/2009, right? Not the best time to jump in the real estate, but I got my first condo so I house hacked it.

00:02:11:13 - 00:02:31:23

Speaker 2

You know, I put as little money down as I possibly could and all my rent, all my roommates paid my mortgage, paid my rent, you know, through college. So I jumped in the real estate really young and, you know, started seeing how cashflow worked and, you know, paying down mortgages and paying down your principal worked and seeing appreciation.

00:02:32:20 - 00:03:02:23

Speaker 2

Unfortunately, I learned a valuable lesson that there are, you know, ups and downs in the real estate market. And I saw a huge downturn in 2008, 2009. So, you know, I lost $160,000 worth of equity, you know, overnight. As soon as I bought that property. But I learned the long lesson. You hold on to that property for for ten years, 12 years, and the market comes back and all of a sudden I was up about 200 grand and so, you know, my real estate knowledge started at a really young age.

00:03:02:23 - 00:03:21:27

Speaker 2

And I and I learned those tough lessons young. That the real estate game is not a quick game, but if you're patient with it, you know, it's really hard to screw up. And in the long run you're going to be all right. And so that's kind of how my real estate, you know, gig started. Obviously, primary residence, owners, you know, all that kind of stuff.

00:03:22:17 - 00:03:57:18

Speaker 2

But to get to this point where I'm on on the podcast with AirDNA, you know, I think everybody is kind of in the same position I was in. I knew I wanted to be in real estate. I didn't know what type of real estate I was going to do. So I was researching everything, all, all different types of real estate, and I was watching all different types of podcast and I started doing house hacking for my first couple, meaning I put as little money possible down, use it as a primary residence, and then eventually turned it into a rental property, then went and bought a new primary residence, turning it into another rental rental property.

00:03:57:18 - 00:04:18:10

Speaker 2

Right, Right. Great way to start in real estate, right? Then I moved to these fixer uppers and I started burning these properties. So I was doing older, single family homes, putting money into them, fixing them up and getting rent around them and refinancing them. And that was fun too. But I was really slow to build up and scale and for very little cash flow, a lot of work.

00:04:19:21 - 00:04:43:06

Speaker 2

So I got into multifamily and I started doing four plex’s and five plex's and again, a lot of work, good cash flows in your balance and you're diversified with your cash flows and you know, you're making sure there's always tenants in there. But I saw with my multifamily properties and I still see with my multifamily properties, there's always something that's going on that's taking away some of that cash flow right there.

00:04:43:06 - 00:05:11:03

Speaker 2

There's so much hands on stuff you got to fix and repair with multifamily’s and so on My checklist, I had Airbnb and I was I knew I wanted to do Airbnb’s of some sort. And so I started researching other people that were doing Airbnbs. I started figuring out how they're analyzing properties and how they're finding good market. And every single time I stumbled upon somebody, I was doing something.

00:05:11:12 - 00:05:34:26

Speaker 2

I noticed they're using this tool called AirDNA, right? And the first thing that I stumbled upon was the AirDNA kind of blog, their list of top 100 markets. And I became obsessed with that list. And I started researching every market that was on that list and seeing markets where, hey, this is close enough to me.

00:05:34:26 - 00:05:54:28

Speaker 2

I think I could invest here and I could manage this fairly easy without having to buy a flight and fly out there and research the market. And so, you know, I finally found a market in Oklahoma. I'm in Dallas, so I found a market in Oklahoma that was on the list. And I was like, Hey, this looks like a cool market.

00:05:54:28 - 00:06:19:07

Speaker 2

I'm going to go rent up there and rent a couple of Airbnbs and learn the market. And my family loved it. And so I fell in love with the market and decided to go in on my first cabin and, you know, did my own analysis on finding my own property and, you know, that kind of stuff. And looked at the AirDNA stats and found out, you know, that this this could be a profitable investment and jumped into my first cabin.

00:06:20:05 - 00:06:36:16

Speaker 2

You know we can talk about the results of that first cabin, but I just closed on my second cabin up there now. So in less than a year, we've done two cabins, over $2 million worth of properties we're in. So we're building my business up in Oklahoma with these Airbnbs now.

00:06:37:07 - 00:06:58:11

Speaker 1

Oh, my gosh. I love that. So there's so much so much to unpack there. But what I loved about that but by the way, very succinct, thank you was this sort of this idea. First of all, I am still always in deep admiration for anyone. And, you know, you're not the only one. But there like this small group of people that I don't know what possessed them.

00:06:58:17 - 00:07:20:02

Speaker 1

When I was 22, I think I was a little bit more focused on a few other things and so I love that you were 22 when you were like, No, this would make sense. Like, I wish I could go in my time machine and just go back to that time in my life and be like, If you just had bought a condo, you would you would have been so much like, Now I'm in my forties thinking about that first step, which was primary ownership.

00:07:20:03 - 00:07:42:26

Speaker 1

rent, primary ownership. Rent. So but a key takeaway there for me is that one, you started early. Yes. You had a couple of sounds like tough lessons that you learned, right? You lost some money, but you got back up off of your feet. You realize that this is a long game that you're playing, right? It's not. There's highs, there's lows, there's different areas.

00:07:43:17 - 00:08:03:01

Speaker 1

And I think what I imagine is you were sort of building confidence as you went. And I love that you were testing out different strategies. Right? You were like, let's start with a single family again, primary ownership. Let's move into fixed and flip. Let's do multifamily. And then finally you were like, Let's get into cabins. So is that sort of still your strategy?

00:08:03:01 - 00:08:05:12

Speaker 1

Have you sort of diversified yourself across?

00:08:05:19 - 00:08:25:25

Speaker 2

You know, I want to call it the grand slam of real estate. I don't know if I can coin phrase that right for Top1Percenter but the only other one that I'm interested in trying still is commercial real estate. I haven't jumped into commercial yet. Right. Right. Or houses or whatnot. And so I'm still diversified over all those all those different types of real estate.

00:08:26:06 - 00:08:44:08

Speaker 2

Obviously, I have my favorites and the ones that feel like they're more effort than they're worth and, you know, that kind of stuff. But they're all good. You just need to find the type of investment that you can afford to do. You know, it's hard to go, It's hard to go buy $1,000,000 cabin when it's your first investment, right?

00:08:44:26 - 00:09:11:19

Speaker 2

I needed to start with primary residence and house hacking, and then I needed to work up to burring and then I could get into multifamily. And so it's hard to go just jump right into buying multifamily, right. And so or Airbnb sometimes, but, you know, you just have to learn where you're at in and see what you can pre-qualify for and then you'll find your niche and what you actually enjoy doing.

00:09:11:19 - 00:09:32:13

Speaker 2

And so I've found for myself the type of tenants I'm dealing with, the type of shopping I get to do. I love that it's kind of a lifestyle asset with Airbnbs where if there is a problem with it, a pipe burst or I need to change out the locks or something happened to the cabin where it requires my attention, right?

00:09:32:13 - 00:09:54:29

Speaker 2

I can tell my wife and kids, Hey, we got to go to Oklahoma and I got to go to work for a minute where I can't take my kids to Indianapolis to go see my apartment complex. You know, that's not a very fun trip for them. So, you know, that's why I do a lot of Airbnbs as it’s kind of a lifestyle asset and and you're dealing with different type of problem and different type of customer, I guess.

00:09:55:11 - 00:10:24:00

Speaker 1

Yeah, absolutely. Yeah. And I think like for some people it probably offers them a nice peace of mind that they have a steady renter, you know, like I have I have a renter in one of my properties. They're probably never leaving like it’s, you know, we've decided they're probably the renters for life. There's some consistency there. But at the same hand, on Airbnb or short term rental, right, you get this opportunity to sort of like have something that maybe is a little bit more transactional, but you're meeting new people, you're getting to experience new folks.

00:10:24:00 - 00:10:41:13

Speaker 1

And hey, if it doesn't work out with one guest, you're onto the next one pretty quickly. So I love all of that. And I think it's I always love that adage and I'm not sure I'll put it in the show notes, guys, but there's that famous quote, right? Like it takes me one hour and 20 years of experience to do what I do.

00:10:41:19 - 00:11:06:23

Speaker 1

So I think that's really practical advice for somebody that's maybe just thinking about starting their investment or starting to become a host is you don't have to go and spend blow it, blow $1,000,000 on a property just because you see Adam doing it right, Like start at something that feels reasonable to you, that is comfortable, that maybe is a little bit lower risk and work your way into a bigger investment, which sounds like what you did.

00:11:07:02 - 00:11:28:17

Speaker 2

100% and some of the new Airbnbs that I'm looking at doing and I'm using AirDNA as my tool is inner, inner city Airbnbs instead of these cabins out in, you know, in the middle of nowhere, because you can do the same thing you can bur an older home, a fixer upper that's in a good area so you can take advantage of that skill set.

00:11:28:17 - 00:11:47:09

Speaker 2

You learn with doing bur’s and fixer uppers and then turn it into a quality Airbnb. And so, you know, you can do that on a $300,000 home and fix it up to a $500,000 home. And it can be a very profitable Airbnb or Vrbo. And, you know, AirDNA gives you those tools to research those as well.

00:11:47:09 - 00:12:07:20

Speaker 2

So you don't have to only do million dollar cabins like I've done up in Oklahoma. And that's I feel like how I'm going to diversify it in the future is I love the Airbnb model, but I also love the fixer uppers and capturing $200,000 worth of equity. When you fix them up and you put a quality guest or a quality tenant in them right?

00:12:07:20 - 00:12:11:24

Speaker 2

And so you can use that knowledge and skill set as you learn the different types of real estate.

00:12:12:14 - 00:12:31:20

Speaker 1

Yeah, I love that. And I had one guest on that was talking about how he does he looks like so Midtown Properties because he wants something that has some flexibility. So if he needs to adjust his investment strategy and maybe it's not a great time to do a long term rental, it's a better time to do Airbnb or vice versa that he can have that flexibility.

00:12:32:08 - 00:12:52:17

Speaker 1

And I did want to talk a little bit about that because I think that you, Adam, did something really smart that we've talked about before, which is like folks tend to kind of put some subjectivity into selecting a market to invest in, right? So they think, Oh, I really I would like to be able to vacation in Florida, so maybe I'll buy a place in Florida.

00:12:52:17 - 00:13:11:11

Speaker 1

And it has sort of this dual purpose. And what we talked about before, which I think is more what along the lines of what your strategy was, is no like. Take a look at the top performing markets, maybe proximity, maybe like you were saying, your family does actually enjoy going to Oklahoma. And we'll we'll talk about where we should go in Oklahoma next.

00:13:12:22 - 00:13:38:09

Speaker 1

But don't make that the determining factor. Think about where you're going to make the most return on investment. Think about a place. So it's often, you know, it may not be that sexy destination that you were thinking of. It may be something like hell, Oklahoma and a cabin. Yeah. And so I love that you're taking a look at the data which very much is telling us that you know we're hoping that urban is sort of starting to make that recovery that it wasn't before.

00:13:38:09 - 00:14:05:13

Speaker 1

And you're looking at places outside of sort of these mountain lake destinations which have traditionally performed well. But may be starting to soften. So you are absolutely, I'm guessing, looking at sort of what's happening with supply, what's happening with demand. We make that easy for folks. Yes. This is a shameless plug through our sort of best Places to Invest report, which we issue every year, helps people sort of narrow that down so they're not looking at the entire universe and trying to pick a place.

00:14:05:13 - 00:14:12:21

Speaker 2

Absolutely. Yep. I couldn't agree more. And in that list, again, it just gives you buyers confidence. You know, as a as an investor.

00:14:12:21 - 00:14:13:01

Speaker 1

I love that.

00:14:13:08 - 00:14:33:14

Speaker 2

You're nobody has all the answers. And if you think anybody has all the answers, they don't all you can do is minimize your risk by finding tools and resources that give you a little bit more buyers confidence instead of just shooting in the dark and AirDNA. I know this is a plug for AirDNA but it really isn’t.

00:14:33:14 - 00:14:53:25

Speaker 2

It's just that's what it gave me is that buyer's confidence. And there's a lot of blogs, there's a lot of reviews that tell you where you can you can invest in Airbnbs, and there's a lot of different tools than AirDNA. But I just found the AirDNA very useful. And the blogs, great data point as a just starting point of research and building up that buyer's confidence.

00:14:54:17 - 00:15:12:02

Speaker 1

I love that. Yeah. That that peace of mind and that confidence that you're making a very informed decision. You're not making it a subjective decision. You're taking a little bit of the emotionality or sort of what you've heard on the street out of it and you're using data, whether it's ours or not. We certainly recommend that approach. Yeah.

00:15:12:05 - 00:15:24:28

Speaker 1

All right. So so tell me real quick, because then I want to I want to talk about the future because we're we're barreling towards 2023 as we record this. Where am I taking my kids in Oklahoma? What is what are we doing in Oklahoma? Other than going to your cabin?

00:15:25:10 - 00:15:52:21

Speaker 2

So there's there's so many places. This is what's crazy. So I'm in Dallas. And the reason why Oklahoma and Arkansas makes sense. There's there's so many lake towns in in these states. Right. And so I'm particular in Broken Bow, Oklahoma. And that's just because it's 3 hours away right it the middle of nowhere. There's nothing to do there. And so it feeds Tulsa, Oklahoma City, Dallas and all the way down to Louisiana.

00:15:52:21 - 00:16:15:00

Speaker 2

And so I like everywhere from Oklahoma to any any lakes in Arkansas. And so you can look at all these different lake cities and if you look them up on AirDNA and actually pull the market research in all these markets, I feel like they're very strong markets. They're not very seasonal. And so there's not just the ski season or just the summer season factor.

00:16:15:00 - 00:16:46:02

Speaker 2

You know, people are looking for fall getaways, spring getaways, lake getaways and winter retreats. You know, Christmas getaways, Thanksgiving getaways. And so they're not seasonal. They're trying to get out of these big cities and go a little bit more rural and country. And where there's trails and lakes and that kind of stuff. So that's what I love about Arkansas and Oklahoma, is there's so many little golden pockets of lake towns where you can get a nice little lake cabin and and it's not seasonal.

00:16:46:03 - 00:16:48:01

Speaker 2

Those are the two things I like most about them.

00:16:48:12 - 00:17:07:23

Speaker 1

That's such a great key takeaway. I love that. So it's sort of it's built for longevity because you do have these places that really are only there's a season to them. And if you can't maximize your revenue in that season, you're a little bit SOL as they say. Yeah, that's fascinating. Yeah. And then to your point, like I used to live in New York City, right?

00:17:07:23 - 00:17:33:07

Speaker 1

And there are only so many places you could go that were a short drive if you wanted to get into nature, right? Yeah. So that's a great strategy. I love that. Well thank you. All right. All right, my friend, we talked for you talked a little bit about what you're thinking about for next year. I think already you talked about diversifying your portfolio, not just focusing on Mountain Lake destinations, getting into sort of maybe more cities and urban locations.

00:17:33:17 - 00:17:44:25

Speaker 1

What else is on your radar? What are you I guess I'll phrase it two ways. Okay. We'll start with the positive. What is what's one thing you're looking forward to in 2023? And then we'll do the opposite.

00:17:45:01 - 00:18:10:06

Speaker 2

Already looking forward to 2023 is if you're researching markets right now, right. If you're in them or if you're just watching prices, prices are dropping and interest rates are going up, which is good, that's fine. As an investor, right? Because we know there's going to be balance there. And right now you can be extremely picky and make an offer and negotiate prices down from motivated sellers.

00:18:10:06 - 00:18:29:19

Speaker 2

And so if you're looking to get into your first Airbnb or if you're looking to get your second or third or whatever, it's an exciting time to be shopping because markets or the you're not buying cabins before they're even listed and you're paying over asking price like we were a couple of years ago or a year ago. And so we're back to a little bit more normal.

00:18:29:19 - 00:18:55:07

Speaker 2

So what I'm doing right now is I'm sitting in ready to, you know, make offers on cabins in these areas or locally. I've already contacted some local realtors and told them exactly what I'm looking for on these inner city, you know, type homes and right locations. And then, hey, if you find one at this price point and we feel like we can fix it up and it can be worth this price point, you know, buying it for around 300 and after fixing it up, it can be worth 500.

00:18:55:18 - 00:19:19:04

Speaker 2

Let me know I'm interested. And so I've already put my feelers out there and understand exactly what I'm waiting for and looking for. And I feel like this will probably be one of the best years ever to pick up a discounted cabin or a discounted property. Great Airbnb, cash on cash return and yes, you might be a little higher interest rate and we don't have a crystal ball on how long these interest rates are going to be at six and 7%.

00:19:19:04 - 00:19:40:06

Speaker 2

But if the numbers make sense at 7% and you can get a 10% or 20% cash on cash return still with those numbers, when you can refinance out of that, you know, it's going to be incredible. You're going to get 30, 40% cash on cash return. So if you can plug in the numbers and do a little bit of research, it's a great time in 2023 to be picking up some property.

00:19:40:06 - 00:19:41:10

Speaker 2

So I'm looking forward to that.

00:19:42:05 - 00:19:58:12

Speaker 1

I love that. Yeah. And there's you know, there's always opportunity no matter what the market is doing. I'm looking forward to housing prices going down too. You'll do a better job than I will. But just real quick, Adam, for our audience. What does cash on cash return mean, my friend?

00:19:58:12 - 00:20:28:18

Speaker 2

So here’s an example. If you put $200,000 down on a property, right, to buy a property at 20%, down on maybe $1,000,000 loan, right. I'm $200,000 in. If the property brings in $100,000, that's a 20% cash on cash return. So I need to see that's kind of the number I'm going for is 20% with Airbnbs. So if I'm putting in $200,000 down, I need to make that 20% back.

00:20:28:18 - 00:20:30:01

Speaker 2

And that's your cash on cash return.

00:20:30:19 - 00:20:40:10

Speaker 1

Love that. Thank you. That was very well stated. Okay. Not to get negative, but just for a second, what's something you're not looking forward to in 2023?

00:20:41:25 - 00:21:04:26

Speaker 2

I think it's just there's a lot of unknowns. Right. And so we didn't think that the interest rates would go as high as they were. Right. Everybody said, hey, it's just going to flatten out. It's going to be normalize here in a little bit, Give it some time. The unknown, scary for everybody. But when when there's unknowns, that is when it's a great opportunity.

00:21:04:26 - 00:21:23:00

Speaker 2

So, you know, I'm not looking forward to those unknowns. You know, there's always risk in that. And you can minimize your risk by maybe not going and buying, you know, in such a rural location. Maybe it's an inner city one where, hey, if the cash flow is not there on Airbnb, at least I could turn it into a long term rental.

00:21:23:07 - 00:21:23:19

Speaker 1

Right.

00:21:23:26 - 00:21:48:01

Speaker 2

That's why I am looking a little bit more internal. If people stop traveling because of whatever, if the recession does really happen, or if these things do really come, that become the truth. I'm prepared for that. I have a plan B, but those are just unknowns and those are speculations. And so you can do your own research and and you can protect yourself against that if you're, you know, just make sure the numbers are right and you can cash flow on worst case numbers.

00:21:48:01 - 00:22:07:13

Speaker 2

Right. And so whenever I'm buying my Airbnb, I'm not looking at best case scenarios. Best case scenarios are exciting, but worst case scenario, if I have to lower my rates, can I rent this thing out? Not 50 or 60% of the month? Can I rent it out 25% of the month? And can I break even and can I stay afloat until the market comes back?

00:22:07:25 - 00:22:25:05

Speaker 2

You know that that's the biggest lesson you need to prepare for is worst case scenario. Can I survive? Can I at least pay the mortgage? It might not be a home run. Cash on cash return. Like can I pay the mortgage? Can I pay down the principal a little bit? Can I get the tax benefits from it? Hey, I'm okay with these things during this time.

00:22:25:05 - 00:22:28:05

Speaker 2

And then when when everything comes back, then it'll be a great investment.

00:22:28:26 - 00:22:51:16

Speaker 1

I love that. That's such as such a smart idea, right? Like, yeah, as I've said before on this podcast, I'll it bears repeating, as Mel Brooks would say, Hope for the best. Expect the worst. Yes. Oh Adam well, thank you so much. I think you've given me and the audience a lot of really great tips here. We always wrap up the show with a little game.

00:22:51:16 - 00:23:10:14

Speaker 1

It's called Who, What, Where? So to start off, who apart from yourself and we'll talk about that next, Would you recommend anyone who is looking to become a host or just become an investor? Listen to, read? Where would they go for advice?

00:23:10:25 - 00:23:17:22

Speaker 2

Man I think the people I'd probably suggest might be controversial because they're kind of bold the way they teach

00:23:17:24 - 00:23:19:20

Speaker 1

I like a little controversy.

00:23:19:20 - 00:23:40:09

Speaker 2

You know and there's bits and pieces, bits and pieces of everybody I agree with and I don't fully agree with because I feel like they have an agenda as they're professionals and training and getting their target audience right. But two people I will give a shout out to it. I do love watching Grant Cardone and I like his podcast and I like a lot of the stuff he does.

00:23:40:24 - 00:23:58:00

Speaker 2

Obviously, if you can get on to Deeper Pocket podcasts, I love every one of those guys and what they're talking about. I feel like that's real and raw. Another guy I like to follow on Instagram and TikTok is Chris Crone he’s a guy out of Utah. He does a lot of the bur strategy, he does a lot of this, but I feel like he's very knowledgeable.

00:23:58:00 - 00:24:14:21

Speaker 2

He has a lot of experience. He's been through highs and lows of the real estate market, but obviously he's trying to get you to invest with him. So you got to take it with a grain of salt. Listen to what he's saying. If you don't want to just send him your money, you know, you want to invest on yourself so invested in your own way instead of sending somebody else their money and letting them manage your money.

00:24:14:21 - 00:24:25:02

Speaker 2

So those are those are two or three podcasts that I would jump on right now and start listening to just what they're saying. I feel like they're credible sources and I feel like it's good knowledge just to have.

00:24:25:24 - 00:24:43:01

Speaker 1

I love that. Yes. And just like everything in life, Right. We've got to take it with a slight grain of salt. Correct. All righty. The next one is what? So what do you wish you knew when you were 22? About real estate? Not everything.

00:24:44:07 - 00:24:46:22

Speaker 2

That was only a year ago or I am only 23 now.

00:24:46:27 - 00:24:50:07

Speaker 1

I figured, well, you look like so.

00:24:50:07 - 00:25:22:08

Speaker 2

I'm 39 years old. Okay, So if I go back to 22 years old, that's a long time, right? And I actually teach this to my sales guys all the time. When I was 22, I made the best mistake ever, which was buying real estate in 2008/2009. Right. It was my biggest mistake I've ever made because I lost $160,000 worth of equity the second I bought it, but the numbers made sense it rented out, cash flowed enough to just break even, so I was able to hold on to that property through the recession until everything came back.

00:25:22:08 - 00:25:42:20

Speaker 2

And then I was able to profit $200,000. I actually sold that property and 1031 it into one of my multifamily. But if I were to go back in and tell myself, Hey, you know, kick myself in the butt and tell myself what to do, I would have bought more properties, but I would have never sold any of my properties.

00:25:42:20 - 00:26:01:20

Speaker 2

I've sold five properties just as there are primary residences, you know, I was like, Hey, I could sell this cash out, go get a better house. I wish I would have never sold them. I wish I had done helocs on them. I wish I would have done cash out refinances and just held on to the asset because you look 17 years later, what those properties would have been worth.

00:26:01:28 - 00:26:22:25

Speaker 2

My first house was 300,000. I cashed out a 500,000. I thought that was a homerun. Like, holy smokes, I made a ton of money off this house. That house right now is going for 850/900,000. And so it's just if I would have just held on to that. The greatest the greatest trick to wealth and the fastest way to build your net worth is through equity of your real estate.

00:26:22:25 - 00:26:35:21

Speaker 2

So appreciation of your real estate. So I think anybody that can give you advice to go back is never sell your real estate as long as its cash flowing and, you know, making at least a payment, hold onto it, you know, build that net worth long term.

00:26:36:21 - 00:26:46:11

Speaker 1

Oh, man. Well, you're affirming my hoarder tendencies because I'm already like, I'm very attached to my property I'm like, we're this is just for the rest of our lives. Like, we'll give them to our children. It'll be fine.

00:26:46:18 - 00:26:47:10

Speaker 2

Generational wealth.

00:26:49:14 - 00:27:07:06

Speaker 1

I love that. All right. The last part of course, is where. So if you could hop back of that time machine to 22 and hold on to a property, where would you have purchased or invested or even just become an Airbnb host? It's really broad.

00:27:07:12 - 00:27:32:12

Speaker 2

It is really broad. One of the markets, one of the markets I kicked myself into just even five years ago where I was looking at it and I was like, I was like, I should buy a house here. And just seeing what the real estate market did is Seaside Beach, Florida, or Destin Beach, Florida. I think everybody from Utah and Colorado to here in Texas, they vacation in Destin or Seaside Beach, Florida.

00:27:32:12 - 00:27:52:02

Speaker 2

And so it's already a saturated market. But the homes when I was there five years ago, they were going for 800,000 to 1,000,000. And so it was obviously a stretch for me and I was just like, that's a big house, you know, for your first Airbnb or whatnot. Now those homes are gone for $2 million. It's like, holy smokes, I could have just made $1,000,000 by buying that property.

00:27:52:16 - 00:28:08:11

Speaker 2

And I think that's everywhere. It I think everybody listening to this podcast, if you go back 15 years ago, if you just buy that property and hold on to it 15 years, you'd look back and be like, Holy smokes, that's the best investment I could have made. Just because that that appreciation is going to be there in 15 years.

00:28:08:27 - 00:28:22:18

Speaker 1

100%. Yeah. Like if you could do it in it to win it. I know. I always wish I'd gone back to, like, convincing my dad to buy, like, just property in Williamsburg, Brooklyn, when I was in college in New York, because it was, you know, it was still not on the map anyway.

00:28:23:08 - 00:28:38:24

Speaker 2

So Saint George, Utah is probably the one that got away because I was I was in Utah going to school and I went to school down in Saint George, Utah. I lived down there playing baseball. It was a hole in the wall is nothing. And now it's like one of the most saturated Airbnb markets. There is just everybody has a vacation home or a summer home.

00:28:38:24 - 00:28:40:06

Speaker 2

And in Saint George.

00:28:40:06 - 00:28:59:16

Speaker 1

Oh crazy my goodness. Well, until we invent our time machine, I guess we'll just have to look at the data and learn from these these mistakes. And they're not even really mistakes. They're just these, you know, the things that led us to where we are today as 40 year olds. I'm also 40. I talk a lot about how I'm 40.

00:28:59:26 - 00:29:01:24

Speaker 1

I'm dealing with it through this podcast.

00:29:02:25 - 00:29:04:14

Speaker 2

Okay. We all have to cope with it Sunday.

00:29:04:21 - 00:29:21:13

Speaker 1

Yeah, we have to cope with it somehow. Yeah. I love this. Well, Adam, this has been fabulous. Before I bid you adieu. And stop torturing you. I would love to know where can our listeners get if they want to know more about what you're up to and how can they follow you? Where should they go?

00:29:21:22 - 00:29:45:16

Speaker 2

I'm working on some stuff and obviously the more time I invest into TikTok or Instagram, the more creative, you know, my entrepreneur mindset gets about this stuff. But on TikTok, I have 180,000 followers, so I don't know why TikTok, for me is more popular, but I'm just this logo right here, @Top1percenter, that's my hashtag on TikTok, or my account on TikTok. On Instagram.

00:29:45:16 - 00:30:06:03

Speaker 2

It has an underscore somebody already has top 1% or somehow. So @Top1percenter_ that's me. And I do post a lot of real estate stuff even though I'm in sales. And that's what I do. That's my earned income. All my sales reps and guys make it a professional income. Want to know how to turn that earned income into passive and forever income and generational wealth.

00:30:06:03 - 00:30:20:07

Speaker 2

So that's what I like to teach. That's what I like to talk about. So if you're into that and you want to learn how to take a normal job and normal income and turn it into passive income and a passive income lifestyle, you know, give me a follow up and that's the stuff I'm going to be talking about.

00:30:20:25 - 00:30:41:04

Speaker 1

I love that. I also love that you called it Forever Income. I like that mailbox Money. Yeah, Mailbox money. These are these are these are all going to work their way into a TikTok. Well, I enjoy your TikToks. And Adam, I've enjoyed so much talking to you. Thank you so much for joining me today and happy New Year.

00:30:41:04 - 00:30:43:08

Speaker 1

And let's have a wonderful 2023, shall we?

00:30:43:15 - 00:30:45:05

Speaker 2

Absolutely. Thanks for having me on.

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