Latest / REL Freedom Podcast / Joel Kraut - 7 Steps To Financial Freedom

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Joel Kraut - 7 Steps To Financial Freedom · REL Freedom Podcast

• 0:00
  Joel Kraut: People ask me all the time, how can I do my first deal?
• 0:02
  Joel Kraut: I tell them go to AREA, find some people who have big egos telling you to do all kinds of deals.
• 0:06
  Joel Kraut: Ask them if you can put in one to five thousand dollars on a deal so you can just kind of shadow them, right?
• 0:11
  Joel Kraut: And begin to see how they set the deal up, how they evaluate it, how they find it, where they source it, you know, all the way through contractor selection, budgeting, who do they trust, who do they not trust to go to Home Depot?
• 0:22
  Joel Kraut: How are they buying the materials?
• 0:24
  Joel Kraut: How do they know what materials are the right materials to buy?
• 0:27
  Joel Kraut: What agents do they pair up with?
• 0:29
  Joel Kraut: How do they find handymen through maybe a good agent that closes all the real freedom to the opportunity?
• 0:39
  Mike Swenson: Freedom, opportunities and real estate.
• 0:40
  Mike Swenson: I'm your host, Mike Swanson.
• 0:42
  Mike Swenson: Let's get the real freedom together.
• 0:44
  Mike Swenson: Building time and financial freedom through opportunities in real estate.
• 1:02
  Mike Swenson: I'm your host, Mike Swinton.
• 1:04
  Mike Swenson: If you want to get started on your real estate investing journey, check out our website, freedom through realestate.com.
• 1:10
  Mike Swenson: We've got great information on there, all of our podcast episodes, articles for you guys to be able to figure out research and understand kind of where you want to go inside of real estate, figure out different options out there.
• 1:22
  Mike Swenson: And we're here just to provide great content to help challenge you and get you off the sidelines and into real estate.
• 1:28
  Mike Swenson: Today, our guest is Joel Kraut.
• 1:31
  Mike Swenson: He is the co-founder and managing director of Burr Loans.
• 1:34
  Mike Swenson: He's a real estate investor, author of the book Seven Steps to Financial Freedom, has funded over a thousand loans, 25 years of investing experience, flipped a hundred houses, tons of stuff we can share about, but I'd love to hear from you, Joel.
• 1:47
  Mike Swenson: Welcome to the show.
• 1:48
  Mike Swenson: We're so excited to have you.
• 1:49
  Joel Kraut: Mike, thanks for having us on.
• 1:51
  Joel Kraut: I mean, I feel like being here is just a natural step, right?
• 1:54
  Joel Kraut: We look at your stuff online, just having a chance to talk to you a little offline, the kind of guy you are, you know, what the values are.
• 2:02
  Joel Kraut: It's all in step with what we're trying to do with people all over the country.
• 2:05
  Joel Kraut: I mean, for me, I've been at it for a while.
• 2:07
  Joel Kraut: I started in 1996.
• 2:09
  Joel Kraut: I actually bought my first investment property then, um, had some challenges, like many of us, along the way.
• 2:16
  Joel Kraut: The crash occurred in 2008.
• 2:18
  Joel Kraut: That was really just a disaster.
• 2:21
  Joel Kraut: I had a large portfolio at the time that we had built using the cool no money down thing that we all see online, right?
• 2:28
  Joel Kraut: You can buy millions of dollars of real estate with no money.
• 2:31
  Joel Kraut: Well, we did it.
• 2:32
  Joel Kraut: We ended up with too much leverage at the wrong moment.
• 2:35
  Joel Kraut: And then we needed money badly.
• 2:37
  Joel Kraut: So, you know, we try to help people understand that a little better, right?
• 2:41
  Joel Kraut: We want people to learn from some of our mistakes and focus in on what their strengths are and sort of really analyze what their weaknesses are and how they can team up with other people.
• 2:52
  Joel Kraut: You know, for you, myself, other people we know in the industry, there's a lot of power in joint venture.
• 2:58
  Joel Kraut: A lot.
• 2:59
  Joel Kraut: You know, trying to do everything yourself, it's okay, but it's really difficult to go far.
• 3:04
  Joel Kraut: And if you're serious about changing your lifestyle, one to be more passive, one to be free, to be able to do like you do and coach basketball and really not be beholden to a clock, you're gonna have to at some point begin to come really good and not just vetting properties, but vetting people.
• 3:25
  Joel Kraut: The worst mistakes and biggest beats of my career are partnering in with the wrong people.
• 3:32
  Joel Kraut: Much more so than the real estate.
• 3:34
  Joel Kraut: The real estate scenario, uh, you know, I flipped a lot of houses, I built a lot of homes, they don't all win, but there's a number, right?
• 3:43
  Joel Kraut: There's a math equation that eventually solves the problem.
• 3:46
  Joel Kraut: But when you're with the wrong people and you have multiplicative events going on and personalities and lives and things happen, it's really difficult to unwind that.
• 3:55
  Joel Kraut: And that could set you back tremendously.
• 3:58
  Joel Kraut: So for a lot of the people listening, I know they're really focused on the real estate, the real estate, the real estate, but to me, it's a very simple business, right?
• 4:05
  Joel Kraut: I like to ask easy questions.
• 4:07
  Joel Kraut: Everyone in life's had a problem, right?
• 4:09
  Joel Kraut: People's hands go up.
• 4:10
  Joel Kraut: Everyone in life has solved the problem.
• 4:12
  Joel Kraut: Sometimes there's comedians, they put their hands down, but most people have, right?
• 4:16
  Joel Kraut: That is really what you're looking for, right?
• 4:18
  Joel Kraut: You, myself, others were really out there searching for problem situations, evaluating them quickly, providing good solutions, presenting them in a win-win scenario, and moving it forward.
• 4:31
  Joel Kraut: If we do that well and attach real estate to it, we can change our lives.
• 4:35
  Joel Kraut: And that's what we're really trying to help people focus on and not be overwhelmed.
• 4:39
  Joel Kraut: I've never done this before.
• 4:40
  Joel Kraut: I don't have enough money.
• 4:42
  Joel Kraut: They don't even know what enough is, but I don't have enough, is sort of the attitude, right?
• 4:46
  Joel Kraut: And we've had lots of people tell us that.
• 4:49
  Joel Kraut: And you know, we try to change that for them by just asking some simple questions and and walking them through some things that we think are really important, right?
• 4:57
  Joel Kraut: And and in doing that, you can see their attitudes begin to change.
• 5:00
  Joel Kraut: And then you get the fortunate ones that really step forward and go out and execute for the first time, and then everything changes.
• 5:06
  Joel Kraut: You know, once you get through that first fear, signing that closing statement, getting through title, having the money transfer, and all of a sudden you have keys.
• 5:16
  Joel Kraut: It's like, wow, that's a wild moment.
• 5:18
  Joel Kraut: I remember I was overwhelmed.
• 5:20
  Joel Kraut: I I thought this is going to be so easy.
• 5:22
  Joel Kraut: I'm a cool guy, trader on Wall Street, I got it.
• 5:25
  Joel Kraut: And then it happened, and all of a sudden I had to deal with a tenant.
• 5:28
  Joel Kraut: It's like, wait a minute, you know, that's not a trading screen anymore.
• 5:31
  Joel Kraut: There's real people involved, and everything changed.
• 5:33
  Joel Kraut: But over the years, it's it's been a lot of fun.
• 5:36
  Joel Kraut: We've met great people like yourself, had the opportunity to interact with people from a far away Seattle, Texas, sitting here in New Jersey, Phoenix, Arizona is one of my favorite places to go to and visit with people.
• 5:48
  Joel Kraut: And just the opportunities around the country are amazing.
• 5:51
  Mike Swenson: I remember my first closing on an investment property because I had done my first closing as a residential property, and it was the lender was there, and you get your closing gift, and everybody's happy, and you take the closing photo.
• 6:04
  Mike Swenson: We get to our first investment property, and the agent wasn't there.
• 6:07
  Mike Swenson: The other party wasn't there because it was a foreclosure at the time, and it was snowing out, and I was just by myself, and it was like 5:30, and we had to quick sign before the title office was closing up.
• 6:18
  Mike Swenson: And I was like, this is very different than my residential closing where we're all taking the photos and it's all happy.
• 6:23
  Mike Swenson: And here it's just kind of me in a room by myself, and then the apartment buildings that we've closed, it's me in a room by myself signing the documents on behalf of our investors, you know.
• 6:32
  Mike Swenson: So it's it's a little less fanfare on the closings.
• 6:34
  Joel Kraut: I think one of the things to your point that a lot of investors don't realize I know Instagram makes everything look sexy, and HTTV is just wow, right?
• 6:43
  Joel Kraut: Everybody drives a Lamborghini, perfect nails, hair, nothing ever moves, changes, or loses.
• 6:48
  Joel Kraut: But in real life, you're gonna spend a lot of time alone on job sites, traveling to places, going to meet people, not necessarily with a whole bunch of people, right?
• 7:00
  Joel Kraut: And that has to be part of your mentality.
• 7:03
  Joel Kraut: You have to be maybe a little bit mentally tougher to get through that.
• 7:07
  Joel Kraut: Because you keep waiting for like this this whole cavalcade and circus of people, and a lot of times it's just not really there and it's not part of it.
• 7:15
  Joel Kraut: And people feel like, oh, am I doing something wrong?
• 7:17
  Joel Kraut: You're not, absolutely not.
• 7:19
  Joel Kraut: This is real, this is not Instagram anymore.
• 7:22
  Joel Kraut: So for us, that's that's to your point, that's one of the things we go over with people.
• 7:26
  Joel Kraut: Like, it's not like your home closing, right?
• 7:30
  Joel Kraut: No one's showing up with balloons and gifts for you.
• 7:35
  Joel Kraut: Nobody has a palm tree or some kind of greenery, you know, for good luck.
• 7:40
  Joel Kraut: You're basically going to get down and dirty with a pen, paper, title company, maybe a notary on top, and done.
• 7:47
  Joel Kraut: And it's a whole different world.
• 7:49
  Joel Kraut: But as you get used to that, it just becomes the norm.
• 7:51
  Joel Kraut: Now you're really asking questions, making sure you understand what you're signing.
• 7:55
  Joel Kraut: And you know, as a lender, we beg people to read.
• 7:58
  Joel Kraut: We beg them.
• 7:59
  Joel Kraut: It's it's unbelievable how many people three years into the loan call, hey, I didn't realize this or this.
• 8:05
  Joel Kraut: Like, you didn't realize where have you even been for 36 months?
• 8:08
  Joel Kraut: You didn't realize it.
• 8:09
  Joel Kraut: Forget about at that moment when you should have been asking any questions you had, because it's the most important thing in the world you're doing.
• 8:17
  Joel Kraut: It's your money, or it's people who entrusted you with yours and their money, right?
• 8:22
  Joel Kraut: You got to get that right.
• 8:23
  Joel Kraut: You have to get your questions answered.
• 8:25
  Joel Kraut: You should never be afraid to ask questions.
• 8:27
  Joel Kraut: People who won't answer them for you.
• 8:30
  Joel Kraut: I don't want to say run and hide, but probably find a relationship where somebody's a little more transparent and more open and willing.
• 8:38
  Joel Kraut: That's going to be really important for your success long term.
• 8:41
  Joel Kraut: You need that information flow.
• 8:43
  Joel Kraut: And to be on an island without it is really tough.
• 8:46
  Joel Kraut: Everything has to be perfect all the time.
• 8:48
  Joel Kraut: And you and I both know like it's real estate, it's humans, it's money, it's math.
• 8:53
  Joel Kraut: It's never all perfect.
• 8:54
  Joel Kraut: Anyone who tells you different just really hasn't done enough deals or they're lying.
• 8:58
  Joel Kraut: Right.
• 8:59
  Joel Kraut: So both of those are bad situations you want to stay away from.
• 9:02
  Mike Swenson: Now you talked about searching for problems, and this is uh pretty cool because I've talked about this in the past about if you want to get good in real estate, right?
• 9:09
  Mike Swenson: You're gonna have to solve problems.
• 9:11
  Mike Swenson: As much as we would like to think everything happens perfectly, it doesn't.
• 9:15
  Mike Swenson: And as we're talking right now, I'm waiting to hear back from a property manager on a water line that broke underneath one of our properties.
• 9:22
  Mike Swenson: And so they're in the process of determining where that's at.
• 9:25
  Mike Swenson: You know, we've owned this property for a while, things happen.
• 9:28
  Mike Swenson: And so if you want to get good at problem solving, it means you're gonna have to have problems to solve.
• 9:35
  Mike Swenson: If you don't have any problems to solve, then you can't get good at problem solving.
• 9:38
  Mike Swenson: And similarly, too, recognizing opportunities of good deals is recognizing a problem that needs to be solved.
• 9:46
  Mike Swenson: You know, it might be, you know, properties need to be updated, value add, maybe they have a bad tenant that you need to replace.
• 9:52
  Mike Swenson: Maybe the property itself's got some work to do, or maybe there's some challenges.
• 9:55
  Mike Swenson: Maybe you can rezone a property, right?
• 9:57
  Mike Swenson: So opportunity comes from recognizing problems and being able to solve it.
• 10:02
  Mike Swenson: And if you can't solve those, then you know that's a it's a lot harder to find money to be made, or it's it's harder to find good opportunities and good deals.
• 10:09
  Joel Kraut: Well, I think again, to your point, in those situations, finding the right people to work with, because for some people, like we have a couple of orthodontists that give us money to either do our own flips with or lend with us, like they have money, but they don't have time, right?
• 10:27
  Joel Kraut: Their families don't want to watch them go do another 40 hours of something else, their wives will kill them, or husbands and wives vice versa, right?
• 10:35
  Joel Kraut: Their kids will never see them.
• 10:36
  Joel Kraut: So in that, you're you're bringing together a team.
• 10:40
  Joel Kraut: And a lot of people, you know, one of the biggest problems I really feel that they have is they listen to their own head and they're really lost in the noise inside between their ears.
• 10:50
  Joel Kraut: They pre uh conceive and preordain what the other person's thinking.
• 10:55
  Joel Kraut: Right?
• 10:56
  Joel Kraut: One of the biggest problems that I see across America in creative finance is the belief in a lot of investors' heads that they have to negotiate all these sexy terms with people.
• 11:08
  Joel Kraut: Instead of just coming up to Mike and asking Mike some basic questions and shutting up and letting Mike tell his story to begin to figure out what Mike really needs.
• 11:19
  Joel Kraut: He's going to tell you.
• 11:20
  Joel Kraut: Mike doesn't go to sleep thinking, okay, I should get six and a quarter percent for a five-year fixed balloon.
• 11:27
  Joel Kraut: I don't want a 30-year ammo, I want a 20.
• 11:30
  Joel Kraut: No, I want a 15 or a 20.
• 11:32
  Joel Kraut: The seller never thinks that way.
• 11:35
  Joel Kraut: They think I'm gonna move to the warm weather and I need 4200 a month.
• 11:42
  Joel Kraut: Well, if I can figure out a way how to get you to 4200 a month, we can probably do something.
• 11:48
  Joel Kraut: That strips away so much of that other baloney in my head.
• 11:52
  Joel Kraut: But I tell you, time and time again, when we talk to people and they ask me for help on creative finance, and I let them talk first for a little bit, I say, wow, you really got to slow down.
• 12:01
  Joel Kraut: You're injecting so much stuff into the equation, you just blew the other person away.
• 12:06
  Joel Kraut: You didn't even give them a chance to let them give you something good.
• 12:09
  Joel Kraut: Right?
• 12:10
  Joel Kraut: So we want to slow down a little bit as investors.
• 12:13
  Joel Kraut: We want to ask questions and then really listen.
• 12:16
  Joel Kraut: Not just keep telling people things.
• 12:19
  Joel Kraut: It doesn't work.
• 12:20
  Joel Kraut: It's a lot of great strategy.
• 12:22
  Joel Kraut: So I think the next two, three years are really poised to be outstanding opportunities again.
• 12:27
  Joel Kraut: I don't believe we're in a super cycle down move like the 08 through 10, but most of the country we've seen is going sideways, up some places down a little, but some places are still up.
• 12:39
  Joel Kraut: You know, some of the uh areas that people have been traditionally a little leery of, like the Detroit's south side of Chicago's, Milwaukee, haven't been like the hot buttons, Ohio, some of the less, let's just use the word sexy areas are really in vogue now, right?
• 12:56
  Joel Kraut: And you're seeing a lot of trades between investors.
• 13:00
  Joel Kraut: And what I'm starting to see, and what we see at Burr now, investors are trading with each other.
• 13:06
  Joel Kraut: The selling investor has bought the property within the last 24 months.
• 13:10
  Joel Kraut: They live 500 to 1,000 miles away.
• 13:12
  Joel Kraut: They bought the Section 8 course, they got a Section 8 or equivalent tenant, and now they decide it's not as easy as the course made it out to be.
• 13:23
  Joel Kraut: I don't like it as much, and I want out.
• 13:26
  Joel Kraut: And they're selling near the price they purchased for, a few dollars lower and exiting.
• 13:33
  Joel Kraut: And mostly in smaller or tertiary markets, and this is definitely a sign for what I've been through a couple of times, and that will extend for a while, and prices don't necessarily go down, but investors begin to put the pressure on the prices because there's no one left to trade with.
• 13:51
  Joel Kraut: No one's coming anymore.
• 13:53
  Joel Kraut: So people like yourself, myself, others that maybe have a team out there that can evaluate the deals, teams that can understand the areas well, teams that are in the areas that can handle the projects.
• 14:04
  Joel Kraut: It's a great opportunity for you to begin to slowly, quietly, methodically pick off good opportunities.
• 14:11
  Joel Kraut: Right?
• 14:11
  Joel Kraut: It's really super tough to find, you know, all these great opportunities that you see.
• 14:16
  Joel Kraut: You know, someone just made another couple hundred grand on one flip.
• 14:19
  Joel Kraut: You know, I mean, we could all make $200,000 on a flip.
• 14:23
  Joel Kraut: Buy a house for $2 million, put in $400,000,000, $500,000, and try to sell it for a shade under $3 million.
• 14:29
  Joel Kraut: But that's a hell of a lot of risk to take, right?
• 14:32
  Joel Kraut: The market moves 5%, the delay, the delays for permits and whatnot are three months, cost to carry, it's a kilo.
• 14:38
  Joel Kraut: Because I don't really see anybody cutting their expenses on their vendor side.
• 14:42
  Joel Kraut: So you know, I don't really like those types of transactions.
• 14:45
  Joel Kraut: I like really simple stuff.
• 14:47
  Joel Kraut: You know, I like to buy a house for a dollar, renovate it for 50 cents or less, and get it back on the market in 60 to 90 days.
• 14:56
  Joel Kraut: Hoping, still hoping, not absolutely knowing, that the market where I am is generally still in the same condition as when I started.
• 15:04
  Joel Kraut: So I feel like I have an opportunity to exit properly.
• 15:07
  Joel Kraut: Or I can lease it, or I can lease it with an option to buy, I can resell it with seller financing to another investor.
• 15:15
  Joel Kraut: So I have multiple strategies already before we bought the house, right?
• 15:19
  Joel Kraut: That that's important for people to understand.
• 15:21
  Joel Kraut: And I know a number of your guests have talked about that already.
• 15:24
  Joel Kraut: And I think that's really important, though, for people to take seriously and make sure before they go in they understand how they're exiting.
• 15:31
  Joel Kraut: Not enough people spend time on that.
• 15:32
  Mike Swenson: I remember for me, one of the big turning points, because I my background was I was a was an agent previously, but I remember talking with investors because I thought that's the way for me to learn how to invest, is to work with investors.
• 15:44
  Mike Swenson: Um, and I remember my investors as the rates started going up, they said, Yeah, I think I'm just gonna wait for the rates to come down.
• 15:51
  Mike Swenson: And so for me, I was like, that doesn't really help me sell houses to you.
• 15:55
  Mike Swenson: And so how am I gonna make money?
• 15:57
  Mike Swenson: And so then I started to explore more creative ways to put my fate into my own hands.
• 16:03
  Mike Swenson: And so that's why I really leaned into investing.
• 16:06
  Mike Swenson: And now for me, I chose to move towards apartments, but at the same time, it's like you've got to find opportunity in the market and then pick a lane and stick with it and learn it and grow.
• 16:16
  Mike Swenson: And I'm sure you guys see that a lot.
• 16:18
  Mike Swenson: For me, I wanted to not have to worry about another person impacting my decision whether or not I could buy a property.
• 16:26
  Mike Swenson: And so that's where the investing side really took off for me.
• 16:29
  Mike Swenson: But yeah, would love to hear more about your thoughts of you know how folks have gotten started, how you've seen that continue to grow and develop, and and how you guys, you know, on the lending side are able to help them.
• 16:40
  Joel Kraut: Well, I think one of the first things I just want to comment on real quick, because you really hit on a gem, real gem.
• 16:45
  Joel Kraut: We have people come to us, they ask questions, mentees, people that meet us at events.
• 16:51
  Joel Kraut: They're on 13 webinars in a day, 13 different subjects, four times a week.
• 16:57
  Joel Kraut: That's 52 different things going through their head, and they're trying to become great.
• 17:02
  Joel Kraut: Like you can't be great like that.
• 17:04
  Joel Kraut: It's not possible.
• 17:05
  Joel Kraut: Right.
• 17:06
  Joel Kraut: So, to your point, starting to hone and figure out what your lane is, what you really like and enjoy, and then going all in on it and just getting a tremendous amount of knowledge, team with people, start to partner in on deals.
• 17:23
  Joel Kraut: You know, people ask me all the time, how can I do my first deal?
• 17:26
  Joel Kraut: I tell them go to AREA, find some people who have big egos, telling you to do all kinds of deals, ask them if you can put in one to five thousand dollars on a deal so you can just kind of shadow them, right?
• 17:35
  Joel Kraut: And begin to see how they set the deal up, how they evaluate it, how they find it, where they source it, you know, all the way through contractor selection, budgeting, who do they trust, who do they not trust to go to Home Depot, how are they buying the materials?
• 17:48
  Joel Kraut: How do they know what materials are the right materials to buy?
• 17:51
  Joel Kraut: What agents do they pair up with?
• 17:53
  Joel Kraut: How do they find handyman through maybe a good agent that closes a lot, has those types of people?
• 17:58
  Joel Kraut: Oh, I didn't really think about that.
• 18:00
  Joel Kraut: Right?
• 18:00
  Joel Kraut: You want to start to learn that.
• 18:02
  Joel Kraut: And obviously, working with more seasoned people is a great way to do that.
• 18:06
  Joel Kraut: You don't have to go risk $200,000 to begin to get that knowledge, right?
• 18:11
  Joel Kraut: We want to keep it simple.
• 18:14
  Joel Kraut: We have other people that come to us, you can imagine.
• 18:17
  Joel Kraut: They bought a house for $100,000, want to put $250 into it, add a level, making it this gorgeous colonial, adding like 1,800 square feet to it.
• 18:26
  Joel Kraut: Like, sir, respectfully.
• 18:27
  Joel Kraut: My fiduciary responsibility doesn't allow me to do that with you on the first go-around.
• 18:33
  Joel Kraut: That's a hard deal, even for me, and I've done it hundreds of times.
• 18:37
  Joel Kraut: That's a lot of humans involved in your life.
• 18:40
  Joel Kraut: That is one gigantic relationship you have to manage your way through.
• 18:44
  Joel Kraut: And I'm gonna have to make a rash decision here and say that you're not really ready for that yet.
• 18:49
  Joel Kraut: Come to me with a deal, you're buying it for $120,000, you're putting in $45,000, you think it's worth $210,000, $215, something rational, $198,000, whatever it is, so that you really can get your feet under you and begin to see how this works, right?
• 19:04
  Joel Kraut: Because you and I know there's gonna be some slippage.
• 19:07
  Joel Kraut: You're gonna spend four or five thousand dollars in an anticipator or three thousand if you can keep it down to twenty five hundred, three thousand.
• 19:13
  Joel Kraut: You did great on your first deal, right?
• 19:15
  Joel Kraut: Under 10% slippage on your renovation budget on your first deal, you're a budding superstar.
• 19:21
  Joel Kraut: And people go, oh, you really think so?
• 19:23
  Joel Kraut: No, I've seen it literally a thousand times a year in our office.
• 19:26
  Joel Kraut: So, and and I have felt the pain of going over budget.
• 19:32
  Joel Kraut: It happens, it's real.
• 19:34
  Joel Kraut: So keeping it simple when that $250,000 budget, you oops, that's $25,000.
• 19:40
  Joel Kraut: But you oops on a $4,000 budget, it's $3,500.
• 19:43
  Joel Kraut: You can wipe out two visa cards and you're okay.
• 19:46
  Joel Kraut: You know, it didn't end your life or or end your zest for potentially investing, which would be a shame to take you off course that early, right?
• 19:54
  Joel Kraut: Before you really get started and see what it's like to have three, four, five projects going, starting to get maybe like $320 a door out of it, watching the tenants really make the checks on time and starting to think, hey, you know what?
• 20:08
  Joel Kraut: These are those four or five holes on the golf course where I really hit the ball straight, and now I'm really excited to come back and play again.
• 20:15
  Joel Kraut: Right.
• 20:15
  Joel Kraut: So it can, it it really does lay out there for you, but it takes an honest assessment of your own current capabilities.
• 20:23
  Joel Kraut: And that doesn't mean you should downplay them.
• 20:25
  Joel Kraut: It doesn't mean you shouldn't think X of yourself, but you should be realistic with it.
• 20:30
  Joel Kraut: Most people think, well, I haven't done this before, I've never done anything.
• 20:34
  Joel Kraut: And I'll ask people all the time, I love single moms, right?
• 20:37
  Joel Kraut: It didn't come out right, I'm sorry.
• 20:40
  Joel Kraut: But the single mom, think about what she has to do all day.
• 20:43
  Joel Kraut: She has to budget all the time.
• 20:45
  Joel Kraut: She's constantly the logistics manager moving people around, right?
• 20:49
  Joel Kraut: So she's budgeting and handling moving people around, job scheduling, just like scheduling the week with her kids and getting to school, getting to activities, getting to work.
• 20:58
  Joel Kraut: So she has a lot of transformable skills right into that flip.
• 21:02
  Joel Kraut: But no one has ever slowed down enough with them and sort of explained it that way so they can get some confidence in making that transition and taking that fear away for them.
• 21:12
  Joel Kraut: Because, hey, now I'm really just looking at things I do in my own life and I'm applying them a little differently, but I'm applying the same skill sets.
• 21:19
  Joel Kraut: Oh, I could do that.
• 21:21
  Joel Kraut: That that makes sense to me.
• 21:22
  Joel Kraut: That's not so scary.
• 21:24
  Joel Kraut: And I tell you, some of our best players, especially the people who come from, let's say, engineering and project management, those people are really good at budgeting.
• 21:35
  Joel Kraut: They're good at scheduling and planning.
• 21:37
  Joel Kraut: That dumpster shows up 10 seconds after they they close.
• 21:40
  Joel Kraut: Those guys are on the demo, they're moving right away.
• 21:44
  Joel Kraut: The the shingles, you know, they're doing the ripoff on the on the roofs.
• 21:47
  Joel Kraut: That day it closed.
• 21:49
  Joel Kraut: I mean, they're really on it.
• 21:50
  Joel Kraut: It's great.
• 21:50
  Joel Kraut: It's really cool to watch.
• 21:52
  Joel Kraut: I always tell them like by their second, third deal, I'm like, look, if you run out of money, I'll partner in with you.
• 21:57
  Joel Kraut: You know, we like it there.
• 21:58
  Joel Kraut: I love your contractor, that guy who just finished that job, or that woman who was running that job for you.
• 22:02
  Joel Kraut: Those people are kick ass.
• 22:04
  Joel Kraut: I want them.
• 22:05
  Joel Kraut: I don't want to steal them from you, but I'll partner with you.
• 22:07
  Joel Kraut: So we see a lot of people, you know, they do two, three jobs a year and they come out well and they're easy to talk with.
• 22:14
  Joel Kraut: They follow up all the time, they're very organized.
• 22:17
  Joel Kraut: And we'll ask them, why aren't you doing six deals?
• 22:19
  Joel Kraut: Well, I don't want to get too far ahead of myself financially.
• 22:22
  Joel Kraut: I want to make sure I'm comfortable.
• 22:24
  Joel Kraut: Well, can you find the deals?
• 22:25
  Joel Kraut: Yeah, that's not really a problem.
• 22:27
  Joel Kraut: So, well, if I brought all the money and we use the same teams, we came into town to help you and support you.
• 22:32
  Joel Kraut: Maybe we have some resources that you don't have access to and we can make them available.
• 22:36
  Joel Kraut: Would you be interested?
• 22:37
  Joel Kraut: Some people say no, I don't want to partner, but others will say yes, and that gives us an opportunity to partner in together.
• 22:43
  Joel Kraut: We just closed on a property in one in Mobile, Alabama on Monday, and one in Milwaukee, Wisconsin on Monday.
• 22:49
  Joel Kraut: We already have the pictures of the roof in action and the dumpsters, and you know, it's great.
• 22:54
  Joel Kraut: And they were our clients.
• 22:56
  Joel Kraut: So, you know, partnering in together, it's never too late.
• 22:59
  Joel Kraut: I don't care how old you are, it's a smart thing to do.
• 23:02
  Joel Kraut: I wish when I was your age and younger, I had actually learned that.
• 23:07
  Joel Kraut: Instead of just learning if you want to make more money, you just gotta work harder, harder, harder.
• 23:11
  Joel Kraut: Right?
• 23:11
  Joel Kraut: Smarter, smarter, smarter.
• 23:13
  Joel Kraut: I finally read that stuff, that simple, stubborn book by Dan Sullivan, The Who, Not the How, and all of a sudden it's like, ooh, I'm so mad.
• 23:21
  Joel Kraut: Like 30 years ago, no one taught me this in school.
• 23:24
  Joel Kraut: It would have changed my life dramatically two decades ago.
• 23:27
  Joel Kraut: But again, always be learning in this area and this in your life and in the market.
• 23:33
  Joel Kraut: My life just changed again with Chat GPT.
• 23:35
  Joel Kraut: The last hundred days, so I pick a new person.
• 23:38
  Joel Kraut: Things I can do in in an hour that used to take a month to put together, even something as simple as an ebook, you know, getting your outlines together and then humanizing it.
• 23:48
  Joel Kraut: You can do that in a few hours instead of a few weeks or months, and then get it laid out properly.
• 23:53
  Joel Kraut: The the tools are incredible.
• 23:55
  Joel Kraut: And to not take advantage of that is just a shame, I feel, for people.
• 23:59
  Joel Kraut: Instead of I know it's hard to get over the fear.
• 24:02
  Joel Kraut: I got it.
• 24:02
  Joel Kraut: I'm an older guy, but it was definitely overwhelming to start.
• 24:06
  Joel Kraut: I was afraid to even open it up.
• 24:08
  Joel Kraut: But now, you know, one of the young guys in the office kind of forced me to learn instead of just doing it for me.
• 24:14
  Joel Kraut: And now I feel like, wow, I'm like an idiot that I didn't do more of this myself earlier.
• 24:18
  Joel Kraut: So it the markets are an amazing thing.
• 24:21
  Joel Kraut: It's really cool.
• 24:22
  Joel Kraut: You get to meet great people, experience great things.
• 24:27
  Joel Kraut: You know, you flip a house or build a house, you go back two weeks later and you see new fences up, swing sets, and you see people happy.
• 24:35
  Joel Kraut: You know, that that's an amazing feeling.
• 24:37
  Joel Kraut: It's a great feeling.
• 24:38
  Joel Kraut: So I I love it.
• 24:39
  Joel Kraut: I think real estate, until Apple, Google, Amazon take it away, I just feel like this is still a great place to be for long-term wealth generation, uh, enjoyment, some money on a weekly, monthly basis is hard, but can be done, takes time.
• 24:55
  Joel Kraut: But long term, it's it's a great solution.
• 24:58
  Mike Swenson: I love uh just a couple things that you mentioned.
• 25:00
  Mike Swenson: Uh one, you know, getting started, kicking in a little money on somebody else's deal and learning from them.
• 25:06
  Mike Swenson: I think there's a ton of value in that because it's a way to get all the information.
• 25:11
  Mike Swenson: In some ways, it's a it's an education.
• 25:13
  Mike Swenson: You could drop more than $5,000 on a course to learn about real estate and not do anything.
• 25:18
  Mike Swenson: So why not kick in $5,000 that you could potentially make more money back and learn on the job training?
• 25:25
  Mike Swenson: But then to your point, the transferable skills from engineers, you know, single moms, that sort of thing is amazing.
• 25:32
  Mike Swenson: And so if you're listening to this, like don't sell yourself short that you can't do this.
• 25:36
  Mike Swenson: Everybody can do it.
• 25:37
  Mike Swenson: To me, one of my big wake-up calls was, you know, I was so focused on being a good student, right?
• 25:42
  Mike Swenson: 4.0 grades, trying to be the best student that I could be.
• 25:45
  Mike Swenson: And I remember early on in the podcast, I interviewed somebody who was, I think maybe even the same grade as me, barely past high school, didn't know what they were going to do with their life, and had built a portfolio that far surpassed mine as I was just getting started.
• 25:59
  Mike Swenson: I remember thinking, like, why did I spend all the time in books when I could have been learning on the job, doing real estate investing?
• 26:05
  Mike Swenson: And I wish I would have started sooner.
• 26:07
  Mike Swenson: And so anybody can do it.
• 26:08
  Mike Swenson: It's it's not a smarts thing, it's learning how to problem solve, learning how to analyze risks, making great calculated moves.
• 26:15
  Mike Swenson: But yeah, you certainly don't have to be smart.
• 26:17
  Mike Swenson: Smarts doesn't equal success here.
• 26:19
  Mike Swenson: There's a lot of other transferable skills, but for people that just plug in and can learn it and can do it, any anybody can make money in real estate.
• 26:28
  Joel Kraut: I feel like too many people are focused on the preordained, preordained idea of what it should look like.
• 26:34
  Joel Kraut: You have um a friend, he's become a friend over time.
• 26:37
  Joel Kraut: And I was giving a talk in in New York City at an event, and it was kind of wrapping up at the end of the day.
• 26:42
  Joel Kraut: A few people came over.
• 26:43
  Joel Kraut: Hey, can we ask some questions?
• 26:45
  Joel Kraut: Sure, I'm just gonna put some stuff away while we're talking, no problem.
• 26:48
  Joel Kraut: And there was this young girl, I hate to pick on her, but she really just spent five, eight minutes telling me all the things and all the reasons why she couldn't do this.
• 26:59
  Joel Kraut: She's dressed beautifully, she speaks really well.
• 27:03
  Joel Kraut: Um, you know, she's the kind of person everyone would want to work with, but she only could see why she couldn't do it.
• 27:12
  Joel Kraut: Out of your peripheral vision, you can see this guy off to the side.
• 27:16
  Joel Kraut: And he's in a wheelchair.
• 27:18
  Joel Kraut: He waits for everybody to be finished, and then he rolls over to me and asks, Hey, would you hang and just let me ask you a couple questions?
• 27:24
  Joel Kraut: Is that okay?
• 27:25
  Joel Kraut: I said, Sure, of course.
• 27:27
  Joel Kraut: Before I could say hello and introduce myself and get his name, he went off on a tirade from his wheel motorized wheelchair, remind you, about a contractor.
• 27:37
  Joel Kraut: So I asked him a question, like, because look, I'm like most humans, and you kind of react to the wheelchair one way, right?
• 27:44
  Joel Kraut: He'd already flipped four houses from his motorized wheelchair.
• 27:48
  Joel Kraut: So for all the people out there that are thinking about what they can't get done, think about that for a minute.
• 27:53
  Joel Kraut: We have this idea of what different things are.
• 27:56
  Joel Kraut: To him, the wheelchair is freedom.
• 27:58
  Joel Kraut: It gets him from his bed to the job site every day, right?
• 28:01
  Joel Kraut: And then from there, he can go up and down the aisles and home depot just like you and I.
• 28:05
  Joel Kraut: He doesn't see it as a barrier anymore.
• 28:08
  Joel Kraut: Of course, he wishes it's different, I'm sure.
• 28:10
  Joel Kraut: He went through that period of his life.
• 28:12
  Joel Kraut: But he made a decision, I don't know how many months into that post-injury, that he was going to live, not die, right?
• 28:19
  Joel Kraut: Not just be enslaved to his chair.
• 28:22
  Joel Kraut: So when when I'm in events or out on the street traveling around and meeting people, one of the things we always want to ask questions about is, you know, what are you doing to move yourself forward, right?
• 28:32
  Joel Kraut: Because no one's stopping to ask you at the title company if you went to Harvard.
• 28:37
  Joel Kraut: They don't even ask if English is your first language.
• 28:40
  Joel Kraut: They even forget to ask you where the damn money came from, right?
• 28:43
  Joel Kraut: So anyone can do this to your point.
• 28:46
  Joel Kraut: Yep.
• 28:47
  Joel Kraut: And that's kind of the beauty of it, isn't it?
• 28:49
  Joel Kraut: It's this great equalizer that a lot of that nonsense is stripped away from.
• 28:55
  Joel Kraut: And now it's like who wants it the most?
• 28:57
  Joel Kraut: Who is crazy enough just to keep doing it no matter what?
• 29:00
  Joel Kraut: Because there's days when you just want to go to, I don't know if you have Dunkin' Donuts by you, go to Dunkin' Donuts, get your coffee, keep the windows up and not talk to anybody.
• 29:08
  Joel Kraut: But that's just not real, right?
• 29:10
  Joel Kraut: You have to suck it up on those days and just push forward.
• 29:13
  Joel Kraut: You know, I like the book by uh Ed Milette, you know, one more, one more, right?
• 29:18
  Joel Kraut: Just, you know, you got to think about that at that moment and do your David Goggins imitation, just do anything no matter what, right?
• 29:25
  Joel Kraut: And push yourself.
• 29:26
  Joel Kraut: But the most successful men and women that I know in this business are not necessarily, quote, the most highly intelligent.
• 29:33
  Joel Kraut: They're the people who are crazy enough to keep doing it, finding good people to do it with, willing to be rejected, offer after offer after offer, realizing it wasn't someone saying that, hey Mike, you're not a good guy.
• 29:46
  Joel Kraut: It was just saying, Mike, that doesn't work for me now.
• 29:49
  Joel Kraut: Doesn't mean it might not in the future, but for now it doesn't.
• 29:53
  Joel Kraut: And once you start to understand that and you can feel better about yourself when you're hearing no all the time, it's all about money.
• 29:59
  Joel Kraut: And we all know people kind of want and need and use it.
• 30:03
  Joel Kraut: So no is not really no, it's like not right now, or maybe we have to change it a little.
• 30:08
  Joel Kraut: But it's not like this hard punch in the face, no.
• 30:11
  Joel Kraut: But a lot of people aren't used to hearing that, they haven't been in that environment.
• 30:15
  Joel Kraut: So it is a transition, it is a change of mindset.
• 30:18
  Joel Kraut: But as they make that and you can kind of see them grow out of it, it's amazing what some people have created.
• 30:23
  Joel Kraut: It's really incredible.
• 30:24
  Mike Swenson: Are you looking to get started or scale in real estate investing but don't know your next step?
• 30:29
  Mike Swenson: Are you overwhelmed thinking about finding deals, analyzing deals, doing due diligence, and managing properties on top of it?
• 30:35
  Mike Swenson: Go ahead and push the easy button and invest with us.
• 30:39
  Mike Swenson: Real estate investing is what we do full time.
• 30:41
  Mike Swenson: We've done dozens of deals with hundreds of doors.
• 30:43
  Mike Swenson: We have the knowledge and experience to handpick the best deals that most investors can't find.
• 30:48
  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.
• 30:55
  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.
• 31:02
  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.
• 31:09
  Mike Swenson: To find out more, visit freedom throughrealestate.com and click on invest.
• 31:13
  Mike Swenson: You can book a call and learn more there.
• 31:16
  Mike Swenson: So get to scaling your portfolio now with us by your side.
• 31:19
  Mike Swenson: Well, thank you, Joel, so much for coming on and sharing your wealth of wisdom.
• 31:23
  Mike Swenson: For people that want to reach out to you or learn more about what you're doing, how can they do so?
• 31:27
  Joel Kraut: They can go to our website, which is really easy.
• 31:28
  Joel Kraut: It's burr.com, so bwith4r's.com.
• 31:32
  Joel Kraut: They can find us on Instagram at burr underscore loans, and they can just hit us up there and we will actually directly communicate back with them.
• 31:41
  Joel Kraut: No AI nonsense.
• 31:42
  Mike Swenson: Well, thank you so much for coming on and sharing.
• 31:44
  Mike Swenson: I mean, just a just a ton of wisdom.
• 31:46
  Mike Swenson: There's so much more that we could have talked about, but just appreciate you off the cuff sharing for a while.
• 31:51
  Mike Swenson: Thank you so much.
• 31:51
  Mike Swenson: Please reach out to Joel.
• 31:53
  Mike Swenson: Happy to help you with loans and just great advice.
• 31:56
  Mike Swenson: Also, your book, Seven Steps to Financial Freedom.
• 31:58
  Mike Swenson: Go check that out.
• 31:59
  Mike Swenson: And uh thanks so much for coming on and best of luck to you in the future.