1. The Importance of Flexibility and Diverse Exit Strategies: One key takeaway from the episode is the significance of having a flexible approach to real estate investing. This includes having multiple exit strategies for your investments to ensure profitability under various scenarios, such as being able to profit from a property through Airbnb, Section 8, midterm rentals, or student housing. This ability to pivot is essential for dealing with changes in market conditions or regulations.

2. Leveraging Data and Technology for Informed Decision-Making: The episode underscores the importance of utilizing data-driven insights and technological tools to make informed investment decisions in the competitive real estate market. By accessing transparent data sources and employing applications like coffee closers or Zeebo, investors can analyze potential investments more accurately and optimize their strategies, from selecting tenants to managing properties efficiently.

3. The Role of Non-Verbal Communication and Incremental Improvements: A third takeaway highlights the subtle, yet powerful role of non-verbal communication in negotiation and deal-making. The episode encourages listeners to pay attention to unspoken cues and to adopt a mindset of making incremental improvements rather than rushing to decisions. This approach can lead to more sustainable success in the real estate industry by avoiding hasty actions that may result in failure.

00:00 - Speaker 1
Hi everyone, welcome to this week's episode of the Hacking Real Estate Podcast. We're pausing to celebrate the knowledge and insights shared by our incredible guests. From emerging innovators to industry veterans, each guest has provided a unique perspective on the ever-evolving landscape of real estate. In this special compilation episode, we're revisiting the key takeaways from each distinguished guests. Whether you're just starting your real estate journey or seeking fresh insights, this episode is a distillation of the very best. So sit back, relax and let's relive the highlights of the Hacking Real Estate Podcast, season two.

00:45 - Speaker 2
This is a lesson learned. I was sitting in my cousin's office and there was an insurance broker there, an older gentleman at the time, and he was pitching him on letting him do some of his insurance on some of the properties. And I'm sitting there on my desk a few feet away listening in, and my cousin said a very important lesson there, which is don't just listen to what people say. Listen to what you think they mean. Which that means is everybody says one thing and they most of the time some of the time, hopefully mean what they say. Most of the time, people say something and they mean that. But also keep this in mind, the unspoken part of a conversation. And so it's really important to keep the unspoken part in mind. What I learned there. I was always, when I was younger, I was always rushing Like I want to do this today, be done today, never think about it again.

01:29
But life is a series of incremental improvements, not a series of one-off cliffs. Otherwise you just accidentally jump off them once in a while, which I've done it before I've had spectacular failures. But if you look at life as a series of incremental improvements, you're much less likely to actually fall off a cliff, so you're much more likely to actually execute successfully when you think about what are you really trying to accomplish, not just what the task is.

01:56 - Speaker 4
As you think about what we're doing at HousingWire and where I'm putting my money and time right now is how do I build out more data sources to pull into housing wire?

02:08
How do we invest in user experience and product execution so professionals all the way, ranging from the mom and pop investor to the institutional, to the mortgage originator to the real estate agent that they can access that information that historically may have only been accessible to, like true enterprise investors or enterprise level mortgage lenders something that the corporate team would have but, like the you know, the feet on the street, like the loan originator, the agent or the investor might not have access to. So we're trying to bring more transparency and data, and that takes investment, so we've done that. On the active market real estate side, there's some industry data sources in terms of pricing and lender performance and brokerage performance that we're investing in right now. That, I think, will help industry professionals better understand what their competitors are up to, but also understand who they need to build partnerships or relationships with. That will help create opportunities in specific marketplaces.

03:14 - Speaker 5
Yeah. So let's define what we mean by turnkey, because there's a lot of companies out there that have used that term, kicked it around and, to some degree, plagiarized it. I started marketing the bejesus out of that term about 20 years ago when I started the business, and all the marketing and advertising and promotion that I did all wrapped around this concept of turnkey investment real estate. And for us it's not only the properties which are turnkey investment properties, investment grade rental properties, but it's also the experience and the process and everything that we bring to the table, from the education to the contacts and whatnot. That to me, I call that a turnkey real estate investing experience. So it's you can be an investor investing in turnkey real estate and have both the service and the product. That's turnkey.

03:58
It's actually pretty amazing how many, how many phrases we dominate now, to the point where Forbes, like you name it, wall Street Journal everybody's quoting us. Now you know they'll take content from our blog and then reference it saying you know, according to the Rata real estate, you know this, this, this and that. But that takes time, it takes years. Like SEO is not a slow thing. It takes a lot of effort and a lot of quality content, and by quality content it's got to be stuff that has value and people will want to read it or link back to it like reference it, because if they're not doing that you're not really getting. You're not getting the benefits of other people. You know giving you essentially a vote for. You know the content you have. So you do have to create a lot of content around those keyword phrases and derivatives of those keyword phrases.

04:50 - Speaker 6
Now, as far as how I select tenants, I tend lately I've been having a lot of success on Airbnb, and so I actually hopefully Airbnb is not watching this but Airbnb guests will typically move into my house and a lot of times, in conversation with them because I tend to meet them when they first arrived I find out that they're looking to move out here. They're considering renting a room and just trying to find some place to stay, and so I pretty much say, ok, well, airbnb can be your trial period. Tell me how you like the house.

05:29
I'll typically let you know if I get a request from somebody else and that's your time that you could pick. Do you want to stay at the house longer, or am I going to go with the next guest and have them move into the house? So that's how I've actually been doing it more recently recently.

05:47 - Speaker 7
I think it's important for every especially new investors, to get comfortable right and I don't mean getting comfortable, because there's something called analysis paralysis, right, where we start obsessing over these numbers and being perfect right, there's no deals going to be perfect.

06:03
What you want, though, is that, when you make an offer on a property, that you are confident going to bed that night thinking like this is the right property, right, and no agent right. No one should be able to force you into those sort of situations where you're not comfortable Again. Sometimes it takes a couple of extra months to get there, but that's what your agent should be educating you on listening to podcasts, right, reading other people's stories, those sort of things to get comfortable, to pull the trigger, and I always say, like, the goal of the first one is a first base hit right, we're not looking for a home run on the first one. We want a nice, solid first base hit. Right, we're not looking for a home run on the first one, we want a nice, solid first base hit that's going to get you comfortable, get you experience and make you confident moving forward and then we can build off of that.

06:51 - Speaker 8
There's only so many things you can control on a real estate investment right. So you have controllable costs and uncontrollable costs. Then there's certain things you can't change, but efficiencies, retention, how quickly you reply to a repair order, you know. Or an issue with your tenant and you know. If you're investing for or managing for others, you know. We found that you get over like 35% expenses to to income. It starts, uh, property managers start to see a lot of churn because people are just, it just doesn't, doesn't make sense, um, and I'm talking about repair expenses. So when those repair expenses start getting high, you know. So there's so many things you can control and not everybody can act as like an institutional fund that puts in an extraordinary amount of money on the front end to defer those issues down the road and it's a smart path or it's a smart move, but not everybody can do that.

07:47
So you have to kind of start then looking at OK, what is your what I call a capital improvement plan? You should be looking at it for five years, what's your capital improvement plan? And so I'm taking a position also in TrueHome to help build up that platform and stay involved in the SFR space, but just taking a different position to where now I can advise for companies and get you know, I have a couple of companies I'm advising for where I'm getting some advisor shares and doing some different things. That opens me up to do what seemed like the scale is so much smaller than what I was used to doing, where we're buying hundreds of homes a month and hundreds of rehabs a month, but then the return is way higher because you're able to personally invest in some things and get a better return and build some wealth and just get your fingers involved in more things. And so I'm trying to leverage all of my experience I've had over the years in order to do that. So that's what I'm doing.

08:51 - Speaker 9
I think it goes down to making informed decisions using data. Making informed decisions using data Maybe five, 10 years ago kind of picking a property on a map could have worked, but now it's high competition and all the available resources that are out there, it's really important to use data-driven decisions. So, whether you're using coffee closers, another sort of application, I think it's worthwhile, especially if you're putting thousands of dollars into an investment to use some sort of tool, some sort of application. I think it's worthwhile, especially if you're putting thousands of dollars into an investment, to use some sort of tool, some sort of analysis to help you in that process and, alongside that, with making informed decisions using systems and software like Zeebo in place in place.

09:45 - Speaker 10
I think most people you know they pay above market rent because they want people to use the program. You know Section 8 does have a lot of stigma and in general you know people want to one. You know you invest in real estate, you want to have these nice properties that you own and things like that. But you know, just doing things with poor individuals sometimes have a stigma to it. So they really want to encourage people to use it and I think you can see kind of Section 8, typically like CHMA in my neighborhood has, you know, videos and stuff where they talk about the program and why they pay over market. But basically they want landlords to be able to offer their units to Section 8. And because it's completely voluntary, you know, just like any other business, you have to incentivize people to use your product right. So their incentive is the guaranteed rent and the above market rates.

10:26
Because if they wouldn't then you know chances are not. A lot of people would rent to Section 8 just because of the stigma.

10:41 - Speaker 11
Hopefully it doesn't come as a shock to any of your listeners. If you're a real estate investor out there and you're listening, you'd be surprised by anything that some of your tenants can do. But, both from my own experiences and just as somebody running an insurance company, there are a lot of people that are moving into your houses or apartments whatever they might be, your rental properties that have no idea and have never used a fire extinguisher a day in their life, right, and so their immediate reaction is to run out the door instead of grabbing the fire extinguisher. That's like two feet away from them, next to the stove, underneath the sink. Pull the pin, spray it on the fire, right, Like, take care of the fire. But I mean, there's a lot of people that just they've never done it, they don't know where it's at.

11:24
I think as landlords we take advantage of the idea that people should have like that common sense, that knowledge base. So that's the first one. I would say on a more like technical basis, you know, double checking your replacement costs on an annual basis. That's the biggest one, I think, both as a real estate investor and just an insurance person, as inflation costs go up, as prices continue to rise, making sure that the price per square foot that that comes out to is something that you're really comfortable with, that you can rebuild the property. Because what you don't want to have happen which I think happens to folks a lot is you bought your property five years ago, you got your insurance five years ago and it just continues to renew with whatever carry it is.

12:03
And one day you find out that like, wow, I could rebuild that place five or 10 years ago for $85 a square foot and I definitely can't do that anymore. And the worst, right Like the worst case scenario is that you have that total loss and you know, you look at the total amount of the limits that are on there and the bank, who also owns your mortgage, they just say hey, listen, just just put me a check for my, my portion, right, this isn't enough to rebuild the home, just give me what I'm owed, and they and they walk away, right, so you're getting maybe 30, 40%, depending on how much equity you have in that place. You're getting that percentage of the check and then a burned out piece of land, right, that you got to clear out, you got to remediate, you got to rebuild and there's not enough there, right and like that's the worst case scenario.

12:56 - Speaker 3
Yeah, it was a huge lesson learned for me, Like I really learned about the power of the pivot. It just so happened that property allowed us to pivot and still be profitable right with Airbnb. But not every property is like that. And I tell people all the time when you're analyzing a deal, you cannot just buy a property and say, oh, I'm going to make $5,000 a month on Airbnb, because it may be true, but what happens if Airbnb is no longer an option because the city that you live in is now cracking down on Airbnb, or because you got some bad reviews and now you can't get bookings? You need to make sure the property is also going to be profitable on Section 8, as a midterm rental, as a long-term rental, student housing. For me, if the rental property cannot be profitable in at least three different ways, I'm not buying it and that's just me personally.

13:53 - Speaker 8
Fast forward to 2012,. I started working with the institutional funds that were buying foreclosures and so in a matter of a couple of years we bought close to 3,000 homes in the Chicago area. Most all of them were homes out of foreclosure. So we're buying directly from banks and created bank relationships and at the same time as we were buying these homes for these institutional funds, we were learning the institutional underwriting and they would turn away 80% of the homes and some of them are really good. So then we started pushing those out to small investors and created we kind of had these hot sheets that would go out and this is back, we're doing everything in Google Docs and we would put these hot sheets out.

14:40
We'd have small investors come to us and they would want to buy the home. They need somebody to rehab it, they would need somebody to then manage it, find a tenant and then also manage the home. So we kind of created this portfolio while we were also doing the institutional business. And you know, it was really just learning how to underwrite and learning the markets and the micro markets and really I mean we're focused on Chicago. We did a lot of things in some other cities, but Chicago was the main city that we focused on you.