Extreme Real Estate Investors with Michael Kevorkian. Over eight hundred property transactions totaling over $125 million dollars. Yes, he knows what he’s doing. This is how to become a real estate investor, get into house flipping, with no money, no credit and no experience whatsoever, whatsoever. Michael teaches cutting-edge, bleeding edge guerrilla strategies for how anyone can get into real estate investing or how to explode your business if you’re a current investor. Marketing, niche markets, dealing with sellers, buyers, investors, realtors, deal structure, presenting office, objection handling. This is the real deal. Extreme Real Estate Investors with Michael Kevorkian.
Michael Kevorkian: Hi, welcome everybody to another edition of Extreme Real Estate Investors. I’m Kip. Today I’m very excited to introduce a very special guest that we have, Mr Joe Fairless who is the creator and a really very well renowned pod caster among other things. His podcasts are the best ever real estate investing advice, and I’d like to introduce you to Joe Fairless. Joe, how are you doing today?
Joe Fairless: I’m doing well, thanks a lot for having me.
Michael Kevorkian: All right. No problem, I really appreciate you taking the time. I know that you’re an extremely busy guy and we recently did an interview together on your podcast which I just listened to not too long ago and found it really [inaudible 00:01:45]. At the end of the call, Joe asked what he could do to help him out, and I thought that was a wonderful question. I said Joe should be so kind as to join me on one of my podcast episodes, I think my listeners would really appreciate it and he was more than gracious in making that happen. So here we are today, Joe, thank you very much. I appreciate that, and I’m sure everybody listening does as well.
Joe Fairless: Awesome. I’m ready to rock. I’m excited about this.
Michael Kevorkian: All right, fair enough. Joe, I just wanted to ask you a couple of questions that I know a lot of the listeners on my podcast they, we have an occasional guest speaker here and there, and you’re definitely the ah, cream of the crop here. So I want to make sure that we get a lot of good information for him, and if you don’t mind, I’d like to get a little bit of history about you and what made you get into real estate investing?
Joe Fairless: Well, I … what made me get into real estate investing was I started when … I’m from Texas and I moved from Texas to New York City after I graduated in 2005 from Texas Tech. I was in the advertising industry, I was working at an ad agency in New York City on Madison Avenue and if anyone needs to know about that industry, you don’t make any money starting out at all. So I didn’t have any money starting out, and in fact, if you look at what I was making and look at the amount of hours that I was putting in, it was really a minimum wage.
So I had to be very smart with what I did with my money and what I found was that investing in the CD, quote unquote, investing in a CD, I just didn’t get the right return that I was looking for once I did have a thousand dollars to invest, which took me a couple of years to save up. I remember getting the return after they held my thousand dollars hostage for one very long year, the return was $18 on my thousand dollars. I was like, oh my gosh, there’s got to be a better way. So at that point, I started really investing in myself, and I started reading as much as possible.
I read a book called “Investing for Dummies” and they talked about the three different major types of investments, the LFB’s, the start-ups, stock bonds and then also real estate. I just naturally gravitated more towards real estate, because I liked the control aspect of it and it doesn’t influence the profitability of it. Then I read [inaudible 00:04:27] and Equity House and a couple of other books and really got attracted to it. I bought my first house in 2009, once I was able to save up enough money.
Michael Kevorkian: Very cool. All right. And let me ask you this now, with regard to your education, because I get a lot of people that have this common question, would you, if you had to take a wild guess in what you spent educating yourself over the years between books, seminars, maybe coaching, I don’t know if you ever did any or not. But if you had to take a wild guess, what do you think you’ve invested in yourself in maybe an informal college degree in real estate investing?
Joe Fairless: I’ve had three mentors, two, let’s see. So, three mentors, lots of books, a couple of seminars. Yeah, I’d say twenty thousand over the years.
Michael Kevorkian: That’s good. That’s great. I’m glad to hear it, because you know, I tell a lot of people who ask me that, that over the years my conservative estimate is about a hundred thousand dollars. Mind you, this has been an ongoing process for about fifteen years for me. So when I would go to a seminar, it’s a three day thing and it’s three grand and then you wind up doing your coaching or obviously with all the books that we read and home study courses and things like that too, it’s an incredible amount of money when somebody is new to the business but doesn’t really have any idea about how to invest in real estate. I mean, you could get lost in the millions of what the different education products out there are. So I mean, I think you hit the nail on the head when you said really just reading the books that are in the mainstream was a great place to start for you, and I’ve also done the same thing as well. I’m a big reader who loves to get my hands on a good book. Obviously, we gravitate towards the same, similar things anyway with regards to real estate and marketing and sales and things of that nature. So that’s very cool. Good to know. Now, approximately how long have you been an investor in real estate?
Joe Fairless: Since 2009, so, six years.
Michael Kevorkian: Okay. Very cool, and so you kind of dodged the bullet a little bit there, in the market?
Joe Fairless: I did, and that was pure luck and life circumstance, because I just … I didn’t have any money to invest in real estate before 2009. It was just, it was just based on when I had the money is when I invested, because I’ll tell you, I certainly wasn’t smart enough not to invest in 2007, 2008 and 2006. If I had money, I would have been investing it. So I was just lucky that I started investing at the right time.
Michael Kevorkian: That’s awesome. That’s really good. I mean, you probably got some great deals too, that time of the marketplace and how everything was looking money wise. I mean, it was definitely [crosstalk 00:07:35] So I mean, that’s really good.
Joe Fairless: I was just, actually, yeah, I was just actually looking at one of the homes that I bought in 2010, in Dallas. It has effectively doubled in value since then, and my house I bought, my very first house that I bought in 2009 has doubled in value. The other one, one of the other ones is kind of close to it. So yeah, they’ve basically doubled since then.
Michael Kevorkian: Amazing. So you can make money buying in a down market, huh?
Joe Fairless: Yes.
Michael Kevorkian: Yes? Good. All right. Your absolute favorite real estate investing strategy and why? For example, all sales, rehabs, rentals?
Joe Fairless: I would say that number one, in my opinion, is raising money and buying something larger with other people, syndicating a deal, because that’s a scalable business that you can do as many times over as you want. Plus, you keep equity in the deal. You know, I always ask the question, what’s your end-game? Because if you keep fixing and flipping, then it’s just an endless cycle. Unless you’re actually investing in real estate yourself or taking equity or fixing and flipping five properties and then investing some of the profits into one that you own and hold. So, I like the syndication strategy where you raise money. Yeah, I do apartments, but it could be for anything, you know, a storage unit, large portfolios, homes, you know, industrial office, whatever. But I think that’s the best business model.
Michael Kevorkian: That’s really interesting. Very cool. So that would .. Actually, that’s kind of brought up another question, then. What is your process when you do syndicate? Do you take an active management role? Or are you sourcing the property, bringing the investors together and just positioning yourself for the equity position long term as it’s kind of a hands off guy after that?
Joe Fairless: It’s hands on. I have a third party property management company, but it’s definitely a hands on process. So, you know, we … I raise the money, I find the property, I do everything. The investors bring the money to the table and it’s a passive investment for them, but it’s not passive for me. It’s somewhat passive, but it’s certainly not completely passive because the asset, you know, the apartment community needs to be actively, you need to have active oversight to it, otherwise, you know, the property management company might not be managing it the way that you would manage it. So, that’s one thing that I’ve learned and I’ve experienced.
Michael Kevorkian: Wonderful. Well, let me ask you this, Joe. What market do you focus on geographically? If you don’t currently invest out of area, do you think you will do so sometime in the near future?
Joe Fairless: Yeah, I focus on the South and the Mid-West. I’ve got property in Dallas, Fort Worth where I’m from, and I’ve got property in Cincinnati where I currently am having this conversation. So Cincinnati, the Northern Kentucky area I like a lot, because of job diversity. There’s nine Fortune 500 companies headquarters in Cincinnati. People don’t know that, so there’s a lot of job diversity with a lot of different industries. Then I focus in the South, Dallas, Fort Worth certainly is a hot bed right now for real estate. So it’s more challenging to find deals there, because I’m not actively looking right now in Dallas and Fort Worth, I’m more focused on the Mid-West. But I think, certainly long term, hold market.
Michael Kevorkian: Got you. Okay, and you definitely then chase the demographics there, I see where it looks like the jobs are and you know, what it’s going to look like five years, ten, fifteen years down the road, perhaps it’s that guy that sort of sounds like to me. So it’s definitely looking a little bit longer than some of the rehabbers or short term investors that we might have, that are looking for a three or five year holding and then out. You’re looking a little bit longer, that’s very cool, that’s very interesting. All right, and your long term real estate investing goals, what are they?
Joe Fairless: Control a billion dollars before my fortieth birthday. I’m thirty-two right now, and right now I control seven million and now I’m working on a development deal right now in the Cincinnati area and where I see my long term plan is controlling the money and then placing the money in good investments.
Michael Kevorkian: Very cool, very cool. All right. Can you tell us a little bit about your podcast and why you started doing them?
Joe Fairless: The podcast is called Best Real Estate Investing Advice Ever. It’s the show that gives, you know, it’s the show that gives the best ever listeners the hard hitting best advice that the guest has for the listener, and we really get to the point quickly. It’s a fast moving show. There’s no fluff, and I have guests ranging from rehabbers to buy and hold people, to property managers, to appraisers, people who control, you know, who can raise five million dollars in two weeks. People who have 25,000 apartments, Barbara Cochrane, Oliver South.
Why I got into it was simply because it’s a great way to learn from others. I mean, it’s a daily show, so I’m learning constantly from these successful investors such as yourself and it’s a great way to make more friends in different areas of the US and of the world. Then I also monetize the show through sponsorship dollars because I’ve got such a loyal listener base and I pick and choose certain sponsors. Like Patch of Land is one, the crowd funding platform that helps fixers and flippers get funded quickly and on a scalable way because they’ve basically got an unlimited amount of funds. So it’s three-fold. It helps me learn, it’s a great way to make friends and it’s also profitable.
Michael Kevorkian: Yeah, that’s cool. You know Patch of Land, I don’t know if I mentioned it to you or not, but I … we’ve done two deals together so far and we’ve got another two in the pipeline with some folks here that started funding my projects. So that’s going to be a total of four inside of probably less than a year. I’ve got to tell you, I mean as far as fundraising for an investor, a rehabber like myself and I’m sure yourself as well, it’s very, they’ve got a really great process and a very streamlined business. So I’ve found them to be a really great company to work with. I highly recommend them to any rehabber out there looking to get some funding.
Joe Fairless: They’re by far the best in the business with crowd funding. They’re leaders in the States, and they’re just a great team. It doesn’t surprise me that you would say that.
Michael Kevorkian: Yeah, just a wonderful group of people. I was surprised that in a pretty big company, and you’ve got a lot of communication, open communication with almost everybody top to bottom. So it’s been a really cool experience for me. So Joe, we’re going to wind up with the last couple of questions that I’ve got for you here today. Now, what advice do you have for our listeners regarding real estate investing, specifically?
Joe Fairless: Well, the first thing is to pick your path. You know, you can make money in any type of real estate investing, because people do. It’s just a matter of what’s right for you, and what’s right for you is based on first and foremost what you enjoy doing, because what you enjoy doing is what you’ll be good at, and secondly what your goals are and the time that you’re willing to spend on it because with some real estate investing it’s more passive, or perhaps [inaudible 00:16:57] investing or investing in other people’s fields and some is more active where you’re fixing and flipping. Some big time fix and flippers might say well, I’ve got a system in place and so it takes a while to get to that point, to have a system in place. So that’s what I would say, because you can make money doing whatever you want.
Once you pick your real estate path, the one that you enjoy and the one that fits your goals and the one that you prioritize a certain amount of time in your schedule, then read. I think the number one thing is being educated with books and with podcasts like yours, and then once you get to the point where you have kind of plateaued with your learning, then I recommend bringing on a consultant who is specialized in your area and doing what you want to do. That’s what I did, that’s helped me get to where I am a lot faster and I found that to be the best approach. But only bring that consultant on when you have that foundational knowledge and you feel like, okay, now I’ve got this and I’m prepared, but I need something to take me one more level up. At that point, I would do that.
Michael Kevorkian: All right. Very good advice. It’s interesting you say that. We have recently hired a contract CFO, and I don’t remember the name of the company we found him, but he happened to be a local guy who had twenty-five or thirty years experience in the real estate space. We hired him because we came to that, as a company, I came to that conclusion as well, that we are a fix and flip company by far, no doubt, I mean, that’s what we do. Now you’ve got me thinking that maybe I should be looking long indication. You know, I might have to talk to you about that one of these days.
It is a full-time job, man. It’s unlucky that it’s six days a week, and it’s no less than ten hours a day, and that’s with me only working, you know, a dozen projects at any given time and you can break that into two to three parts where it’s, you know, three properties are waiting to close, four that are under construction and then three or four that are on the market. All of a sudden, you’ve got a dozen properties. Obviously, that cycle has to continue, as you said, looking for a new inventory. There’s nothing wrong with it when you get it and you understand this business as you and I and a lot of the listeners do.
What I see a lot of people finding themselves beating their head against the wall is that they’re all looking in the same one place, which is the MLS, the multiple listing service. And they’re looking, they want to go look at the houses and you really start to see the professional real estate investor. You know, they buy houses, I don’t think we’ve done it … Over two hundred properties we bought at auction alone in our company’s career, where we just drive by. We don’t even know what the house looks like inside, but we do the math. We hedge our bets and say okay, here we can buy at this price and you know, worst case scenario is that we’re going to make x amount of dollars in profit. Sometimes you open the door and nobody’s there and the house is really in great shape, so you win, but most times it’s not like that. It does happen occasionally, but with all that, we nail down our profits and we realized, okay, we’re doing pretty good here and we’ve brought on, we’ve extended the company and we brought on management and you know, project managers, office managers and everything and we had our ups and downs with that as well.
It wasn’t until we realized like there was, we were doing a lot of volume and all of a sudden it just seemed like we were not going to be capable to build the company any bigger, to scale it up any better than what it was until we hired this CFO who actually was a CFO but also his real specialty was building on and expanding companies and basically making them salable. Not that that’s my end strategy with my business necessarily at this point in my life. I’m thirty-eight years old, so, at the time of this recording, anyway, I’m thirty-eight years old and I see myself, if everything goes well, you know, you have your billion dollars by the time you’re forty. I’m looking at like forty-five, and my exit strategy, as far as just having a passive cash flow and rental properties, that we’ve already started building that portfolio as well.
Had it not been for this consultant that you mentioned, I don’t think any of that would have been truly realized in the time frame that it looks like we’ll be able to do now. And that’s just because, again, that’s an outsider looking in. It’s, that’s your best friend telling you hey, I think you’re making a mistake here. You’re doing good over here … And not really having a vested interest as far as being an employee who’s afraid to tell the boss, hey, I think you’re making a mistake, because they don’t want to get fired, right? You know, you have those fine lines that are drawn and when you’re paying someone, typically paying somebody to be that consultant for you, I think it really comes out to again having that outsider looking into your business, your life, your day-to-day operation to say hey, look. This is what it is, what’s working, what’s not working, what could be improved upon and really break it down. It was costly for our company. I mean, the guy was not cheap. He was extremely expensive, but well worth it. We made the money back in ninety days. I mean, it was incredible what he was able to do for our company. So I’m really glad you said that, to give some insight to it.
Joe Fairless: Yes. Yeah. It sounds like, yeah, absolutely, I mean usually there’s a sticker shock, and in some cases, it depends on where you’re at in the process, right? Sometimes the sticker shock is healthy because you probably shouldn’t be paying thirty thousand dollars for a consultant if you’re just getting started. I mean, there are certain aspects and that’s why I think the key is, like you did, the key is to have the system or the foundation established, and then you bring on someone to take you to the next level. If you’re just starting out, I sure as heck don’t think that a multi-thousand dollar or tens of thousand dollars consultant would be the right person because you need to first start with the fundamentals of the business. But whatever you, as you keep progressing, yeah, it’s just like when you give more and more, the more you give, the more you get back, right? And when you can keep progressing your career, if you give more, you continue to get back more and you keep going to a different level. I think it’s the same with learning and education.
Michael Kevorkian: Yeah, absolutely, that’s a great point. It’s not that somebody has to dive in head first and spend a fortune in the process. You definitely educate yourself and then evaluate it. If there’s one thing I notice with successful business people over the years, regardless of the business, they’re organised and they visit their company, their business regularly. I’m not saying it exactly right, but the first person I heard say that, and I hate to admit this, but the first person I heard say that was Tony Robbins when I went to his seminar I think about two years ago. It might have been last year when he was in Chicago in July, but it might have been too, I just don’t remember. Anyway, he was saying how a good businessman, a great businessman will be involved in his business on a weekly basis. An average businessman monthly, and a bad businessman, once a year or never. Right? They’re just kind of like hey, you know what? You deal with that, I’m too busy doing other things. I mean, if you’re involved in your business and you realize, okay, I don’t know enough, what do you need to do? You’ve got to learn, right?
It’s as if you’re buying a Subway franchise or any other franchise, they’re going to make you, first you have to pay them quite a bit of money. A quarter of a million dollars, I think, was the last time I saw a Subway franchise cross. Then you’ve got to go to their training, you’ve got to fly up to headquarters, they’re going to train you as an owner. So it’s not that they’re just going to let you open up a shop anyway. There is a process, a learning curve. It’s not overly complicated, but they still need to give you enough of the basics. Then you educate yourself and you have to say, is this working? Is the marketing I’m doing generating phone calls or the offers I’m making, are any of them getting accepted? If so, then you go to the next step. So it’s basically, you know, is it working? If it’s not working, you have to adjust. If it is working, it should be growing, and if it’s not growing, you have to adjust. So I really love that bit of advice, it’s really, really something that I think is overlooked by most people, again regardless of the business they’re in. So last question for you now Joe, is there anything at all that you’d like to add or share that our listeners might find useful, or at least entertaining?
Joe Fairless: Oh, well, let’s see. As far as entertaining, I have [inaudible 00:26:43] in ten different pools across the State of Texas. But as far as useful, because that’s probably not useful for them, other than probably getting a smile and that smile influencing something else throughout their day, but as far as useful, I’d say check out my podcast, Best Real Estate Advice Ever. I think they’re going to get a lot of value from that and the quality of guests, I’ve had you on the show so certainly the quality of guests is really high and I’m confident they’re going to enjoy it.
Michael Kevorkian: Yeah, definitely, and I appreciate the little plug there. I am very humble to have made it on your show. To be honest with you, I’m very impressed with a couple of things in the, the couple that do stand out to me the most, one is the line up of people that you have on your show. It’s really, you should probably get the entire podcasts, your podcasts, transcribed and I think you’d have a number one bestseller. With all the information that you’ve got there from all the different people across so many different [inaudible 00:27:57] it is very, very impressive. Again, I really thank you for having me on, and I also thank you for being on my show as well and furthermore, more impressive to me, daily! I can hardly keep up a weekly podcast, I have not posted a podcast in a long time. I kind of grit my teeth a little bit, I get the occasional email, why aren’t you posting them? And it’s just, you know, there’s the other guy as you are, to be able to do this on a daily basis is outrageously impressive. So we all thank you, I thank you, definitely you’ve made a tremendous impact in my life and being on the show and also being here today with us. So I really want to thank you, Joe, and I appreciate what you’re doing, and keep it up.
Joe Fairless: Thank you so much. It’s been a learning experience for me, too, from what you’re talking about with your business. I’m really grateful to be on the show and I definitely look forward to staying in touch. Thanks everyone who is listening, I’m looking forward to meeting you too.
Michael Kevorkian: All right. Thank you.
Voiceover: Extreme Real Estate Investors with Michael Kevorkian. Over eight hundred property transactions totally over 125 million dollars. Yes, he knows what he’s doing. Listen. This is how to become a Real Estate Investor. Get into house flipping with no money, no credit and no experience whatsoever. Michael teaches cutting edge, bleeding edge guerrilla strategies for how anyone can get into real estate investing, or how to explode your business if you’re a current investor, marketing, niche markets, dealing with sellers, buyers, investors, realtors, deal structure, presenting office, objection handling. This is the real deal. Extreme Real Estate Investors with Michael Kevorkian.