Latest / REL Freedom Podcast / How To Find Your First Investment Property

Transcript

How To Find Your First Investment Property · REL Freedom Podcast

• 0:00
  Mike Swenson: But once I start to punch in some more numbers, then I start to see the picture as it becomes clearer.
• 0:04
  Mike Swenson: And then I can decide, yeah, this is something that I want to move forward.
• 0:07
  Mike Swenson: And that's how we found our first apartment property.
• 0:10
  Mike Swenson: We were analyzing multifamily deals for months, months, and we're helping investors buy properties.
• 0:17
  Mike Swenson: And all of a sudden, one came across our desk and we said, Whoa, these numbers look better than anything we've seen before.
• 0:23
  Mike Swenson: What do we do?
• 0:25
  Mike Swenson: Welcome to the Real Freedom Show.
• 0:27
  Mike Swenson: We inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate.
• 0:32
  Mike Swenson: I'm your host, Mike Swenson.
• 0:33
  Mike Swenson: Let's get some real freedom together.
• 0:48
  Mike Swenson: If you want to get started on your real estate investing journey, check out our website, freedomthroughrealestate.com.
• 0:54
  Mike Swenson: That's freedomthroughrealestate.com.
• 0:57
  Mike Swenson: We've got lots of great information for you, articles, all of our past episodes, content for you to be able to dig in, read, and figure out as you go and uh build your investing journey.
• 1:08
  Mike Swenson: And for today's episode, what I want to cover is for a lot of people, you know, we we have a lot of very experienced investors on.
• 1:15
  Mike Swenson: And a lot of times we want to go back to the beginning, right?
• 1:18
  Mike Swenson: If you're listening to this podcast, you haven't started, you're trying to figure out how do I get started, what are the baby steps that are out there?
• 1:25
  Mike Swenson: And today we're gonna cover step-by-step guide for beginners in real estate, how to find your first investment property, or how to get started investing in real estate, if it looks like partnering with somebody else.
• 1:37
  Mike Swenson: We'll get to that in a second.
• 1:38
  Mike Swenson: So, you know, at the end of the day, you don't need to be rich, you don't need to have years of experience to get started in real estate investing.
• 1:44
  Mike Swenson: You just have to start.
• 1:46
  Mike Swenson: And so, having done over 300 podcast episodes, been in real estate now, invested in real estate for running on over 15 years, there's a lot that I've seen and a lot that I've learned.
• 1:59
  Mike Swenson: And so I want to be able to help you guys with that journey.
• 2:02
  Mike Swenson: And so the way that I like to start is you know, number one, start with a self-assessment.
• 2:07
  Mike Swenson: Think about what do I have that I can offer in terms of value.
• 2:12
  Mike Swenson: So I've called this, I've seen this before in some other real estate investing platforms.
• 2:17
  Mike Swenson: And so this isn't my idea, but I've seen kind of this value triangle.
• 2:21
  Mike Swenson: And so if you picture three sides of a triangle, you've got on one side time, on the other side, you've got money, and then the last side you've got expertise.
• 2:31
  Mike Swenson: And so you're looking at those three areas.
• 2:33
  Mike Swenson: What do I have?
• 2:35
  Mike Swenson: What can I bring to the table?
• 2:36
  Mike Swenson: Now, if you're new, we know that you don't necessarily have expertise.
• 2:40
  Mike Swenson: And so you're looking at time and you're looking at money.
• 2:43
  Mike Swenson: So the money may have come from somebody else.
• 2:47
  Mike Swenson: Maybe you have a relative, maybe you have a business partner, a friend, somebody that wants to help you and stick some money in.
• 2:53
  Mike Swenson: If you don't have any expertise, they might not have done that for you right away in terms of investing in you.
• 3:00
  Mike Swenson: So maybe you do have your own money.
• 3:02
  Mike Swenson: A lot of people do start with finding uh an investor partner, a family member, something like that.
• 3:07
  Mike Swenson: So that's certainly okay.
• 3:08
  Mike Swenson: So then the other side of that triangle is time.
• 3:10
  Mike Swenson: And so that's probably where you're gonna start here is putting in a lot of time.
• 3:14
  Mike Swenson: But I look at this as when you're looking to grow, when you're looking to figure out what your next steps are, you are gonna leverage others.
• 3:21
  Mike Swenson: And so it's good to kind of know what do I have and what do I bring to the table so that I can figure out what do I need help with and how can I grow faster.
• 3:28
  Mike Swenson: So start with that self-assessment, start with what you think you can provide as you continue to grow.
• 3:33
  Mike Swenson: So that's step one.
• 3:34
  Mike Swenson: Next, we're gonna talk about goals.
• 3:37
  Mike Swenson: So I would start by saying you don't have to overthink this right away.
• 3:43
  Mike Swenson: I think in some ways, when we set real estate goals, we then have to feel like we have to wait.
• 3:49
  Mike Swenson: We have to wait for the perfect opportunity come along to be able to move forward.
• 3:54
  Mike Swenson: You're essentially stretching your risk-taking muscle here.
• 3:57
  Mike Swenson: So if I go to the gym, I haven't lifted weights in a long time.
• 4:00
  Mike Swenson: I'm not gonna go bench 225 pounds, 250 pounds, right?
• 4:04
  Mike Swenson: I'm gonna start with the 10 pound dumbbell or the 25 pound dumbbell, wherever you are getting started.
• 4:10
  Mike Swenson: And so you are flexing your risk-taking muscle over time.
• 4:15
  Mike Swenson: And so you're really looking at how do I go from nothing to something with a reasonable amount of risk.
• 4:22
  Mike Swenson: And so for me, our first property, we got into investing because we had to.
• 4:27
  Mike Swenson: We bought it at the top of the market, our townhouse tanked in value.
• 4:31
  Mike Swenson: And either our option was to live there for the next 10 years, short sale, foreclosure, or turn it into rental.
• 4:37
  Mike Swenson: So we did end up living there for a couple of years and we turned it into rental.
• 4:41
  Mike Swenson: And for us, the risk was my wife had a coworker who wanted a townhouse to rent because they were planning on moving back home.
• 4:49
  Mike Swenson: They lived in a different state and they only wanted something for a year.
• 4:52
  Mike Swenson: So now I've got somebody looking for a property.
• 4:56
  Mike Swenson: I have a renter lined up before we're willing to make that move.
• 5:00
  Mike Swenson: So that was a way for me to mitigate risk.
• 5:02
  Mike Swenson: The second property that we had was a flip project.
• 5:05
  Mike Swenson: I only started looking at those flip projects because I had a relative who was looking for a different rental situation and wanted to get out of the rental situation they were in.
• 5:15
  Mike Swenson: So I looked at the numbers and I said, How much is this person looking to spend on a rental?
• 5:20
  Mike Swenson: I figured, okay, that's going to cover about half of what I need.
• 5:23
  Mike Swenson: As I started to look at properties and I started to look at what potential rents would be.
• 5:27
  Mike Swenson: So I said, I just go have to go find another rental.
• 5:30
  Mike Swenson: So I kind of mitigated my risk by 50% by already knowing who was planning on renting that property.
• 5:36
  Mike Swenson: They just stayed month to month until we found the property, they gave their notice, moved into our property, and then I posted, found the other rental.
• 5:43
  Mike Swenson: So I had mitigated half my risk.
• 5:46
  Mike Swenson: So today I'm taking larger risks, but I'm doing it because I kind of built off of the back of those smaller risks right off the bat.
• 5:54
  Mike Swenson: So as you're doing this self-assessment, as you're starting to look at your goals, think about what is a risk that I'm willing to take here.
• 6:02
  Mike Swenson: I would worry a little bit less about the strategy right away.
• 6:07
  Mike Swenson: I would look at how do I find a way to get started.
• 6:10
  Mike Swenson: So whether that is, you know, a buy and hold, some sort of house hack, fix and flip, short-term rentals, whatever that might be, think about how I can start and be comfortable with taking a risk.
• 6:22
  Mike Swenson: Now, buy and hold, like I said, for me, I had a renter lined up.
• 6:26
  Mike Swenson: I had somebody that I knew.
• 6:28
  Mike Swenson: And so I started to figure out what their criteria were to find a rental that fit for me.
• 6:32
  Mike Swenson: If you choose to go house hacking, the mitigated risk there is you have other tenants.
• 6:37
  Mike Swenson: I would shoot for if you could afford to and make it work financially, something like a triplex or a fourplex.
• 6:43
  Mike Swenson: So you have more than just one person paying your rent.
• 6:46
  Mike Swenson: You could also just live in a house, right?
• 6:48
  Mike Swenson: And rent out bedrooms, depending on where you're at in life and depending on what your situation is.
• 6:52
  Mike Swenson: So that's another way to minimize risk.
• 6:54
  Mike Swenson: Fix and flip, you've got to be comfortable in your numbers.
• 6:58
  Mike Swenson: However, by fixing it up, you're adding value.
• 7:01
  Mike Swenson: And so in there lies some kind of risk mitigation strategy.
• 7:05
  Mike Swenson: If you do fix it up and hold it, you're maybe getting it at a lower price.
• 7:09
  Mike Swenson: Maybe you're putting some sweat equity into it.
• 7:11
  Mike Swenson: So that's a way to minimize your risk.
• 7:13
  Mike Swenson: So as you're looking at those goals, assess what your risk level is and what's a risk you're willing to take.
• 7:19
  Mike Swenson: And therein, go choose something that's going to be acceptable for you in terms of risk.
• 7:24
  Mike Swenson: So you may want to get into apartment investing or self-storage, something like that.
• 7:29
  Mike Swenson: And maybe you realize off the bat that's a bigger risk than what you want to do.
• 7:33
  Mike Swenson: So just get comfortable with something.
• 7:35
  Mike Swenson: Do something.
• 7:36
  Mike Swenson: I am a person who tries to overanalyze things, and more and more, the longer I'm in this, I like to tell people you just got to do something to get started.
• 7:44
  Mike Swenson: So find a calculatable risk that you're willing to take and move forward on that.
• 7:48
  Mike Swenson: All right.
• 7:48
  Mike Swenson: After I've decided what I want to do, now I'm going to choose where am I going to do this?
• 7:53
  Mike Swenson: When analyzing a market, once again, I'm trying to figure out what's a risk that I'm willing to take.
• 7:58
  Mike Swenson: You could look at other cities, you could look at other states, you could Google the most attractive rental market in the United States and go find something there.
• 8:09
  Mike Swenson: What I tend to lean on, right, and going back to what's a risk I'm willing to take is choose what you know, something close to home, something close to you.
• 8:17
  Mike Swenson: So going back to me getting started, we rented out the townhouse we lived in for a couple of years, right?
• 8:23
  Mike Swenson: I knew the market, I knew how the numbers were, I was comfortable with it.
• 8:27
  Mike Swenson: I had lived in the home.
• 8:28
  Mike Swenson: So if somebody had questions about the home, it was easy to answer.
• 8:32
  Mike Swenson: It was in a townhouse, there was an association, they covered a lot of the stuff that I didn't have to cover as a landlord, all the exterior maintenance, different things like that.
• 8:40
  Mike Swenson: When it came to the house that we fixed up, I chose a property that was literally between my job and my house.
• 8:49
  Mike Swenson: And at that time, the house that I lived in was the townhouse that we were renting.
• 8:53
  Mike Swenson: So we kind of were doing both of these at the same time.
• 8:55
  Mike Swenson: And so I was constantly driving past.
• 8:59
  Mike Swenson: So sometimes after work, I would drive past her on the way home.
• 9:02
  Mike Swenson: I'd have my tools in the car, work on something.
• 9:04
  Mike Swenson: Obviously, on the weekend, it was a little more inconvenient.
• 9:07
  Mike Swenson: But then if something came out throughout throughout the day, maybe the tenant had a concern, pop by and take a look at it, even just to check on the house, make sure everything's going okay.
• 9:15
  Mike Swenson: I had more than enough reason Monday through Friday, morning and night, to drive past that house.
• 9:20
  Mike Swenson: It was two blocks out of my way.
• 9:22
  Mike Swenson: So I would lean more towards choose something you know and something you're comfortable with first, once again, to build that flexible muscle.
• 9:30
  Mike Swenson: You can choose something out of state down the road.
• 9:32
  Mike Swenson: You can choose the most attractive market in the world for whatever your strategy is down the road, but start with something you know.
• 9:38
  Mike Swenson: You're flexing your muscle.
• 9:39
  Mike Swenson: So if I get past that, as I'm looking at markets, right?
• 9:43
  Mike Swenson: You're looking for something that's growing, you're looking for some great job growth, some population trends, hopefully going upwards.
• 9:49
  Mike Swenson: As I start to analyze deals in different cities, uh, we look primarily in Minnesota.
• 9:54
  Mike Swenson: We've also looked at some of the other cities and other states.
• 9:57
  Mike Swenson: One of the first things I do is I just Google city name and population.
• 10:01
  Mike Swenson: And then when you Google that, it pops up like a 20 or 30 year trend.
• 10:05
  Mike Swenson: You can see over the last 30 years, has it gone up?
• 10:09
  Mike Swenson: Has it gone down?
• 10:09
  Mike Swenson: Has it stayed the same?
• 10:10
  Mike Swenson: If it stayed the same, I look into it a little further.
• 10:13
  Mike Swenson: If it's gone up, I look into a little bit further.
• 10:15
  Mike Swenson: If it's gone down, I typically don't because it means when I'm trying to sell supply and demand over time, there's probably going to be more supply and less demand.
• 10:25
  Mike Swenson: And so I would consider something neutral in terms of population if I had other great reasons why I decided on that.
• 10:33
  Mike Swenson: Otherwise, you're looking for something with a positive population growth.
• 10:36
  Mike Swenson: And then you can get into the nitty-gritty of you know what jobs, what employers, you know, so and so just put in a new factory or a new plant here.
• 10:44
  Mike Swenson: So now I want to invest in here.
• 10:46
  Mike Swenson: So you could do that.
• 10:47
  Mike Swenson: So analyzing the market's important.
• 10:49
  Mike Swenson: There's a ton of great data out there.
• 10:51
  Mike Swenson: Chat GPT has a ton of great stuff.
• 10:53
  Mike Swenson: I would still verify information in Chat GPT.
• 10:57
  Mike Swenson: You can Google best places to rent, how to find rental markets, things like that.
• 11:01
  Mike Swenson: So step one, analyze yourself, analyze your situation, analyze what you're willing to take risks on.
• 11:06
  Mike Swenson: Step two, choosing a good market.
• 11:08
  Mike Swenson: Are you looking to get started or scale in real estate investing but don't know your next step?
• 11:13
  Mike Swenson: Are you overwhelmed thinking about finding deals, analyzing deals, doing due diligence, and managing properties on top of it?
• 11:19
  Mike Swenson: Go ahead and push the easy button and invest with us.
• 11:23
  Mike Swenson: Real estate investing is what we do full time.
• 11:25
  Mike Swenson: We've done dozens of deals with hundreds of doors.
• 11:27
  Mike Swenson: We have the knowledge and experience to handpick the best deals that most investors can't find.
• 11:32
  Mike Swenson: We've at large off-market deals all the time where you can hopefully find returns and economies of scale that you just can't find on your own.
• 11:39
  Mike Swenson: The best thing is it's 100% passive to you for less capital than you put down trying to acquire a property on your own.
• 11:46
  Mike Swenson: Don't let this year go by where you don't make the leap, add to your portfolio, or you just sit in analysis by paralysis.
• 11:53
  Mike Swenson: To find out more, visit freedom throughrealestate.com and click on invest.
• 11:57
  Mike Swenson: You can book a call and learn more there.
• 11:59
  Mike Swenson: So get to scaling your portfolio now with us by your side.
• 12:03
  Mike Swenson: Number three, financing.
• 12:05
  Mike Swenson: So that goes back to the time, money, expertise, right?
• 12:08
  Mike Swenson: So going back to the money side of that, I'm moving forward with something.
• 12:11
  Mike Swenson: I have a handle of about how much money I need.
• 12:14
  Mike Swenson: Take a look.
• 12:15
  Mike Swenson: And what do you have for money?
• 12:17
  Mike Swenson: Do you have enough to cover that?
• 12:18
  Mike Swenson: Or are you willing to bring in a partner?
• 12:20
  Mike Swenson: And so talk to somebody, figure something out, or go talk to a bank.
• 12:24
  Mike Swenson: One of the best pieces of advice I give people, go talk to a bank and say, Hey, here's what I'm looking to do.
• 12:31
  Mike Swenson: I want to invest in real estate down the road.
• 12:33
  Mike Swenson: What would my financial situation need to look like?
• 12:36
  Mike Swenson: Or what would you be looking for to approve a project like this?
• 12:41
  Mike Swenson: I love smaller local banks because they're more willing to work with you, they're more willing to educate you.
• 12:46
  Mike Swenson: If you go to a large bank, it's a little bit more cookie-cutter.
• 12:50
  Mike Swenson: Hey, you don't fit this buy box, but here's the buy box.
• 12:52
  Mike Swenson: So that's a good place to start.
• 12:53
  Mike Swenson: Oddly enough, one of the banks that we use for our rental properties is a bank that I went to probably 15 years ago looking for a construction loan.
• 13:04
  Mike Swenson: So I had driven around to local banks, said, Hey, we're considering putting an addition on our house.
• 13:09
  Mike Swenson: What would that look like?
• 13:10
  Mike Swenson: What would the terms be if you were to offer on something like that?
• 13:13
  Mike Swenson: And it was a bank that I had already talked with.
• 13:15
  Mike Swenson: And now I found out that they like investing in real estate.
• 13:18
  Mike Swenson: So I came back to them.
• 13:19
  Mike Swenson: Smaller banks love good relationships.
• 13:21
  Mike Swenson: And so you don't have to feel like an idiot.
• 13:24
  Mike Swenson: I ask banks tons of questions all the time of what would you do here?
• 13:29
  Mike Swenson: What do you think of this?
• 13:30
  Mike Swenson: And so it's totally okay.
• 13:32
  Mike Swenson: That's why a bank is there.
• 13:33
  Mike Swenson: They're they're there to be a resource for you.
• 13:35
  Mike Swenson: So go into a bank.
• 13:36
  Mike Swenson: Hey, I don't know you.
• 13:37
  Mike Swenson: Here's what I'm trying to do.
• 13:39
  Mike Swenson: What do you think?
• 13:40
  Mike Swenson: What would I need to have happen?
• 13:41
  Mike Swenson: And they can guide you through.
• 13:43
  Mike Swenson: If you were to find a partner, then what would be some of those parameters?
• 13:46
  Mike Swenson: If you were to find income or down payment, how much would you need?
• 13:50
  Mike Swenson: And then now you've got a blueprint to go figure out to talk to friends or family or other potential investors to fill that money side of the bucket for you.
• 13:58
  Mike Swenson: So once you get the financing figured out, that also helps you then as you start to analyze deals in terms of what are the terms of the loans.
• 14:08
  Mike Swenson: Interest rate is just a number.
• 14:09
  Mike Swenson: So then if it's higher, right?
• 14:11
  Mike Swenson: If you're new, if you're doing something that you haven't done before, the bank might say, Hey, I'm willing to finance this.
• 14:16
  Mike Swenson: And here's the rate.
• 14:17
  Mike Swenson: Okay, great.
• 14:18
  Mike Swenson: So then you've got to go find something that makes that work and fits within those numbers.
• 14:22
  Mike Swenson: And so it could be conventional loan.
• 14:24
  Mike Swenson: If you are doing a house hack, you know you'd have FHA, which is amazing, low down payment.
• 14:29
  Mike Swenson: Maybe you're using a hard money loan.
• 14:31
  Mike Swenson: They're less worried about your personal finances.
• 14:34
  Mike Swenson: They're more concerned about the finances of the property.
• 14:36
  Mike Swenson: You can find private money.
• 14:37
  Mike Swenson: Maybe you have a relative who might essentially issue the mortgage and you just pay them an interest rate back.
• 14:42
  Mike Swenson: And then as you get more experience, you can figure that out.
• 14:44
  Mike Swenson: With banks, they want to see experience over time.
• 14:48
  Mike Swenson: Because you don't have any experience, it kind of goes back to my original point.
• 14:52
  Mike Swenson: Find a way to get some experience, right?
• 14:54
  Mike Swenson: So when I went from having no rental history with anybody to having one rental, right?
• 15:00
  Mike Swenson: Now I can go to the bank the second time and say, Oh, yeah, I've got this rental property.
• 15:04
  Mike Swenson: We've had this rental for however many years.
• 15:06
  Mike Swenson: Or hey, we have this rental property, we had this fix and flip.
• 15:09
  Mike Swenson: Now we're looking to do X.
• 15:11
  Mike Swenson: So you are looking to build your resume on your bank with the experience that you have, which is why finding that beginner experience is so important.
• 15:19
  Mike Swenson: And so partnering with somebody might help to boost your resume.
• 15:22
  Mike Swenson: So think of it as resume building.
• 15:23
  Mike Swenson: So financing, you've got the terms, you've talked to banks, you've kind of figured out how to do that.
• 15:29
  Mike Swenson: So then you can start to run your numbers and you can start to look at deals.
• 15:32
  Mike Swenson: After that, next step, we are going to try to find some deals.
• 15:35
  Mike Swenson: How do we go find deals?
• 15:37
  Mike Swenson: Through the MLS.
• 15:38
  Mike Swenson: I continue to say, at least here in Minnesota, there are deals to be had on the MLS.
• 15:43
  Mike Swenson: What I like about the MLS is it's public.
• 15:46
  Mike Swenson: Everybody knows you want to see that property.
• 15:49
  Mike Swenson: People are actively willing to sell that property.
• 15:51
  Mike Swenson: When you do stuff off market, there's red flags, there's secrets that kind of get buried under the table.
• 15:56
  Mike Swenson: It's harder to get information.
• 15:58
  Mike Swenson: You might be trying to buy a property that the tenants may not know that it's being sold.
• 16:04
  Mike Swenson: And so you have to go through and be sneaky about it.
• 16:07
  Mike Swenson: And so the MLS is fine.
• 16:09
  Mike Swenson: And even as it starts with analyzing deals, the MLS has all the information public.
• 16:14
  Mike Swenson: So you can start to run numbers on figuring out what a good deal looks like.
• 16:19
  Mike Swenson: I always say the same example in terms of flexing your risk-taking muscle.
• 16:25
  Mike Swenson: You need to flex your deal analyzing muscle.
• 16:28
  Mike Swenson: Same thing.
• 16:28
  Mike Swenson: Not going to go into a gym and start lifting 250 pounds.
• 16:32
  Mike Swenson: I'm going to start with 25.
• 16:34
  Mike Swenson: And so analyzing deals, the best way to figure out what a good deal looks like is by starting to analyze deals.
• 16:40
  Mike Swenson: What you might find on the MLS might not be a good fit for you, but at least gets you started looking at price, potential rents, renovation budgets, plugging in taxes, utilities, starting to see some of the calculations.
• 16:55
  Mike Swenson: So if you are looking for a deal analyzer tool, we have one on our Real Freedom website.
• 17:00
  Mike Swenson: Feel free to check it out.
• 17:01
  Mike Swenson: But you're building that source.
• 17:03
  Mike Swenson: So start with the MLS.
• 17:04
  Mike Swenson: You can do that.
• 17:05
  Mike Swenson: Reach out to agents that you know.
• 17:06
  Mike Swenson: Newer agents are super excited to take on new clients to help you find deals.
• 17:10
  Mike Swenson: Reach out to them.
• 17:11
  Mike Swenson: You can go to a lot of the online platforms, join Facebooks, Facebook groups in terms of XYZ City investment properties, off-market rentals, rentals, anything like that, join Facebook groups.
• 17:26
  Mike Swenson: There's a lot of stuff that people post in there.
• 17:28
  Mike Swenson: You can post your email address.
• 17:29
  Mike Swenson: Hey, I'm interested in this deal.
• 17:31
  Mike Swenson: Send me the information.
• 17:32
  Mike Swenson: So Facebook groups is a great way to find off-market deals or at least get that pipeline started in addition to what you're finding on market.
• 17:39
  Mike Swenson: Joining networking groups, and then you can just drive around.
• 17:42
  Mike Swenson: Drive around and find properties.
• 17:43
  Mike Swenson: And if you see a property that looks like a dump, you could write a letter to the seller.
• 17:48
  Mike Swenson: You could reach out to an agent, figure out if the seller actually lives there or not, find a way to contact them.
• 17:52
  Mike Swenson: They have skip tracing tools where you can try to reach out, but it's it's worth starting that way.
• 17:57
  Mike Swenson: You're gonna get better as you go, and it's okay to fail.
• 18:00
  Mike Swenson: So start with something, start to flex that muscle in terms of finding deals.
• 18:04
  Mike Swenson: So you're looking for lots of different areas where deals can come to you.
• 18:09
  Mike Swenson: That's gonna help you with an analysis piece.
• 18:11
  Mike Swenson: So after you start to find some deals, they're coming in.
• 18:14
  Mike Swenson: Now we're gonna look at analyzing properties.
• 18:16
  Mike Swenson: Depending on your strategy, you're gonna have some sort of calculator.
• 18:19
  Mike Swenson: Like I said, we've got deal calculators on the Real Freedom website.
• 18:22
  Mike Swenson: So you can just go freedom through realestate.com.
• 18:25
  Mike Swenson: We've got a deal calculator tool on there and just start plugging numbers in.
• 18:28
  Mike Swenson: You're not gonna know what the numbers mean until you start to put numbers in.
• 18:31
  Mike Swenson: So rent, purchase price, expenses, estimate of expenses, taxes, utilities.
• 18:36
  Mike Swenson: You may not know how to estimate utilities, but you can go find taxes, the tax number because it's in the MLS and it's in the property taxes.
• 18:44
  Mike Swenson: If you go to the county, you can look up the property tax number.
• 18:46
  Mike Swenson: So you know that number.
• 18:48
  Mike Swenson: And so I always explain analyzing a deal is like a bullseye, right?
• 18:53
  Mike Swenson: So if I'm throwing darts, I've got the target there.
• 18:55
  Mike Swenson: You've got the big outer ring, then you've got smaller rings inside, smaller ring inside, smaller ring inside until you get the bullseye.
• 19:02
  Mike Swenson: When I first start analyzing deals, I'm thinking the outer ring here.
• 19:06
  Mike Swenson: I don't have all the information.
• 19:08
  Mike Swenson: I'm looking to hone in the information.
• 19:10
  Mike Swenson: I don't know if it's a good deal.
• 19:12
  Mike Swenson: I can probably tell if it might work or if it's at least close.
• 19:16
  Mike Swenson: If it's not, then move on to something else.
• 19:18
  Mike Swenson: If I can't find numbers that I think are going to be a fit, I'll go find a different property.
• 19:22
  Mike Swenson: But once I start to punch in some more numbers, then I start to see the picture as it becomes clearer.
• 19:26
  Mike Swenson: And then I can decide, yeah, this is something that I want to move forward.
• 19:29
  Mike Swenson: And that's how we found our first apartment property.
• 19:32
  Mike Swenson: We were analyzing multifamily deals for months, months, and we're helping investors buy properties.
• 19:40
  Mike Swenson: And all of a sudden, one came across our desk and we said, Whoa, these numbers look better than anything we've seen before.
• 19:45
  Mike Swenson: What do we do?
• 19:46
  Mike Swenson: And so I talked to uh somebody who was helping me at the time who was who was kind of a mentor role, and they said, You got to go get this under contract.
• 19:53
  Mike Swenson: And we said, Well, we don't know how we don't have investors.
• 19:56
  Mike Swenson: And she said, Well, just get it under contract first, then you can go find investors.
• 19:59
  Mike Swenson: And so that's how we got started flexing our muscles, buying an apartment building.
• 20:03
  Mike Swenson: So it's the same way, but we didn't know what a good deal looked like until we started putting numbers in and analyzing those deals.
• 20:10
  Mike Swenson: So that's why the analysis is so important.
• 20:12
  Mike Swenson: After that, make offers.
• 20:13
  Mike Swenson: There's a couple different strategies out there.
• 20:15
  Mike Swenson: You know, a lot of people like to just throw out a bunch of lowball offers.
• 20:18
  Mike Swenson: If I make X amount of offers a day, then it's just a number game from there.
• 20:22
  Mike Swenson: I personally think that wastes a lot of time throwing out a lot of offers versus just going to the one that you might like and figuring out what it might it take to get an offer accepted.
• 20:32
  Mike Swenson: So I tend to put a little bit more time into that, but you certainly can throw out a bunch of offers, a low ball, see what a you know, see what a motivated seller is willing to accept, miss as some people do, but that's a little less my strategy.
• 20:44
  Mike Swenson: It's certainly okay.
• 20:45
  Mike Swenson: Once again, it gets back to flexing that muscle again.
• 20:47
  Mike Swenson: So you're getting used to writing offers and putting a number out there that you're comfortable with.
• 20:52
  Mike Swenson: So I think there's a lot of value there.
• 20:53
  Mike Swenson: But for me, I would just go to a property that I really like and figure out what would it take to get the deal done.
• 20:58
  Mike Swenson: So due diligence after that.
• 21:00
  Mike Swenson: So if you've got a property, uh, you've got it under contract, then you're doing the due diligence.
• 21:06
  Mike Swenson: I can't say this is important enough.
• 21:11
  Mike Swenson: You're buying a property that costs a lot of money.
• 21:15
  Mike Swenson: It's worth a couple of hundred bucks to spend some time in the due diligence to do an inspection.
• 21:21
  Mike Swenson: So property inspection, sewer inspection, sewer systems can cost a few grand if they're bad.
• 21:27
  Mike Swenson: A sewer scope might cost you 200 bucks.
• 21:29
  Mike Swenson: Is it worth 200 bucks to know I might be able to save$8,000 or$10,000 in the future?
• 21:34
  Mike Swenson: Probably worth it.
• 21:35
  Mike Swenson: So put that into your budget.
• 21:36
  Mike Swenson: Know that I'm gonna spend a little bit of money to be able to find a good deal.
• 21:41
  Mike Swenson: And it's just a process, right?
• 21:43
  Mike Swenson: So I might have to spend, might have a couple deals where it falls through during that inspection period, but I've got to be willing to take that risk if it's a good enough deal.
• 21:52
  Mike Swenson: So don't skimp on the due diligence.
• 21:54
  Mike Swenson: So figuring all that out, verifying your numbers, you're gonna have some sort of inspection contingency period.
• 22:00
  Mike Swenson: Where if you don't feel comfortable, you can back out and you'll most likely get your earnest money back.
• 22:05
  Mike Swenson: But take the time to do it right.
• 22:07
  Mike Swenson: Make sure you understand the process.
• 22:09
  Mike Swenson: This is also a good learning experience.
• 22:11
  Mike Swenson: So take that time, find a good property.
• 22:14
  Mike Swenson: And then after that, you go through the process, you get it closed.
• 22:18
  Mike Swenson: Now, if you are doing a house hack, if you are doing a fix and flip after closing, then obviously the work has just begun.
• 22:24
  Mike Swenson: You've got to put the work into the property, and we can talk about that.
• 22:27
  Mike Swenson: But that goes into your numbers analysis.
• 22:29
  Mike Swenson: So from there, it's you know finding the contractors, executing on the work, and uh, you know, kind of finishing off that strategy.
• 22:36
  Mike Swenson: And from there, you've gotten from beginning to end through an investment property.
• 22:42
  Mike Swenson: And now as you start to look up, you can see, hey, is this something that I want to do again?
• 22:46
  Mike Swenson: Or I realized I didn't like that process, which with whatever that strategy is.
• 22:51
  Mike Swenson: So if you did decide to do a fix and flip, you might decide, I don't really like fix and flips, I want to try something else.
• 22:56
  Mike Swenson: Or you might decide it's fine, I might see if there's something that's better out there for me.
• 23:00
  Mike Swenson: But now you've done something once.
• 23:02
  Mike Swenson: And so whether you do it from A to Z yourself, or whether you go A to Z with a partner, somebody who can share that workload, now you've gotten through it.
• 23:11
  Mike Swenson: And so to me, what's the most important out of that is putting a plan in place, figuring out how to exercise that risk-taking muscle, figure out how to exercise the problem solving muscle, right?
• 23:23
  Mike Swenson: We can't be good problem solvers unless we have had problems to solve.
• 23:28
  Mike Swenson: If everything just goes perfectly, then I'm not executing on any problem solving, which is fine.
• 23:33
  Mike Swenson: But as you grow and get bigger, you're gonna have more challenges, you're gonna have more problems.
• 23:37
  Mike Swenson: So that's why I like the idea of exercising your problem-solving muscle.
• 23:41
  Mike Swenson: So that's what I've got for today.
• 23:43
  Mike Swenson: As we start out, just to kind of recap, like I said, first, you know, analyze what you have to offer.
• 23:48
  Mike Swenson: What can you bring to the table in terms of time, money, expertise?
• 23:52
  Mike Swenson: Maybe you go find a partner right out of the gate that can kind of fill in some of those areas for you.
• 23:57
  Mike Swenson: Go through, define your goals, define what kind of properties you like, select the market, select the area you're gonna focus on, figure out the financing piece.
• 24:06
  Mike Swenson: Don't be afraid to talk to a bank and feel silly.
• 24:08
  Mike Swenson: Ask them good questions.
• 24:09
  Mike Swenson: That's what you're there for.
• 24:10
  Mike Swenson: You could even go to a bank that you're not really interested in, ask them the questions.
• 24:14
  Mike Swenson: So then when you go into a bank that you are interested in, you've had a dry run at it, right?
• 24:19
  Mike Swenson: You've had a rehearsal.
• 24:20
  Mike Swenson: And so go to a bank you don't want to utilize, drive to the city next door, talk to their bank, and then get all your silly questions out of the way.
• 24:28
  Mike Swenson: So then we talk to the bank of the person of the loan you want, then you've got that figured out.
• 24:32
  Mike Swenson: So financing, finding deals, building a deal flow pipeline is next, analyzing the properties, making the offers, doing the due diligence, and then closing.
• 24:40
  Mike Swenson: So hopefully that was a good step for you.
• 24:42
  Mike Swenson: Hopefully that's a good start.
• 24:43
  Mike Swenson: If you want to get started investing in real estate, feel free to reach out to us at Real Freedom.
• 24:48
  Mike Swenson: We're always here to help you guys.
• 24:49
  Mike Swenson: I love seeing entrepreneurs succeed.
• 24:52
  Mike Swenson: I love people figuring out ways to escape their W-2 or adding a side hustle or doing something to build wealth through real estate outside of already what's going on.
• 25:02
  Mike Swenson: So check out our website, reach out to us.
• 25:05
  Mike Swenson: We're here to help and uh go get that first property.
• 25:07
  Mike Swenson: We're excited to see what story you have to tell in the future.