Ep. 129- Learn and Invest Your Way To Success with GoBundance Member Jordan Moorhead

This is the You Winning Life Podcast, your number one source for mastering a positive existence. Each episode we'll be interviewing exceptional people, giving you empowering insights, and guiding you to extraordinary outcomes. Learn from specialists in the worlds of integrative and natural wellness, spirituality, psychology, and entrepreneurship so you too can be winning life. Now here's your host, licensed LMFT 🎗️, certified neuro-emotional technique practitioner, and certified entrepreneur coach Jason Wasser.

So we're back here at GoBundance, and as you guys have already been hearing in other episodes, we've been having some incredible conversations with some really— I wouldn't even just say unique individuals, but people are super passionate, they're focused, they're motivated, they know what they're working on, they know what they want to accomplish. And my next guest, Jordan Moorehead, is no different. Uh, he's head of the Moorhead team. He's a licensed sales agent, licensed broker, rental property investor.

He—

we're going to break down the ideas of active versus passive income, especially when it comes to the world of, uh, real estate investing. Um, but right off the bat, first of all, welcome, because I know you also are doing your own stuff. You're doing your own podcast as well.

Yeah, no, thank you so much. Yeah, I love podcasting.

Yeah, how did you decide— first, let's— before we get to that, how did you decide to get into the world of podcasting? Because my journey just came as a ridiculous surprise to me.

So obviously I run a team in Austin, Texas. I knew a broker in Louisville, Kentucky that had a podcast, and I listened to it from time to time, and I'd say, hey, Jay, how's the podcast going? He said, it's going really good, totally worth doing. So I started a podcast, a local podcast about Austin real estate investing, and my reasoning for starting the Austin Real Estate Investing Podcast was, was also, you know, to, to get, get myself out there. But because I always heard, oh, you can't invest in real estate in Austin, I said, that's BS. I invest in real estate in Austin. I know a ton of people that do. But, you know, you'd be on sites like BiggerPockets or you'd be on Facebook groups, so people say, oh, it does—

it doesn't work anymore, you can't invest here anymore, it's too late, you missed the—

you missed it. I said, that's BS, you know. And when I started it was the beginning of 2020. So we've had 70% appreciation since then. We've had roughly 30% rent appreciation since then. You didn't miss the boat at all. The boat was just getting started moving almost.

So is it all that vantage point, right? Because I know I'm here, I live here in South Florida, and I know what the, you know, prices here— I know everybody's moving here or to Texas pretty much, right? Um, and people who are even trying to buy their owner now, priced out now. We talked earlier, uh, with another guest about the interest rates, and they're like, no, actually the interest rates going up is a good thing because that will re-leverage or rebalance out the market, which I've never heard anybody look at it from that perspective. And I'm, you know, I know 95 or so percent of this conference is involved in real estate some way or another, some way or another, right? And, um, so for people out there who are not necessarily— this is probably over the last few episodes that I've recorded while here, probably have talked about real estate more than the 125 episodes previously. So clearly there's something about this world that people don't get and might be missing out on. And this is kind of where I think you're plugging these, these holes a little bit.

And, and I just wanted to touch on, you know, you said people had gotten priced out, and yeah, I, I know there's people that have, but I read articles every week about, oh, such and such couldn't find a home. And it's not they couldn't find a home, it's that they quit. So that's the reality. And I, I hate to be harsh, but when you couldn't find a home, you quit. Or if you're the person that's saying, well, I'm just waiting for prices to go down, right? Say you were waiting for prices to go down in 2020 in Austin. From 2020 to now, we've had 70% appreciation. Do you think prices are going to go down 70 or 80%? I sure don't think so. I think if they do go down at all, it might be a few percent, and that's if something really bad happens. There's a place like Austin or Florida are still highly desirable to live in. Sure. You waited 2 years, 3 years, 4 years for prices to go down. It appreciated 100% and they're 5% cheaper than they were a month ago. You didn't— you didn't make anything. And the interest rates are higher. So by waiting, you know, I think you always— if you're buying a home or you're buying an investment, it's the right time to buy. It was always yesterday.

Yeah.

And the best— next, next best time to buy is today. So that's my outlook on it. I'm always—

is there ever going to be in that philosophy ever a time to not get in?

I don't think so, but I think it absolutely is not for everyone. And as a real estate agent, that's probably not the right thing to say.

Sure, but that's honest. And well, would you guide someone, like if someone showed up? Because I know, right, it's a sales-based world like everything else. Um, is there like— I know in like the financial planning world they have a certain rate of fiduciary type of, you know, thing. Is there anything like in the real estate world? Is there anything like that?

You are a fiduciary as an agent, but I don't see that if somebody— in, in all honesty, if somebody shows up and says, hey, I want to buy a house, it's not your job to tell them, hey, oh, don't buy a house. Or if I want to buy an investment property, hey, don't do that. But I get a lot of people Not the majority of people that show up and want to buy an investment property have done their research, know what they're doing. They found me because we specialize in helping investors, and they're ready to buy an investment property. But I talk to some people and they say, oh, you know, I've got a couple hundred thousand sitting around, I just need some passive income. And I say, well, maybe you should invest with somebody else. Maybe you should do a deal with somebody else. Maybe you shouldn't and they say, well, I don't want to hear about anything. I don't want to hear anything about the property. I don't want to do any work at the property. I just want to get passive income. I said, well, you know, you can invest with other people. It's not that you shouldn't invest in real estate, but sometimes you just need to understand how you should invest in real estate, you personally. So if you make $2 million a year, you should not go out and buy single-family house rentals on your own and manage them on your own, in my opinion. If you like your your peace and sanity. If, right, if you make $2 million a year, it might be better off finding somebody else to go buy the homes, finding a good manager to help manage the homes, and then you can invest that way. Or maybe you invest in an apartment syndication passively. There's so many ways to invest and get all the benefits of real estate but not have to do all the work of an active investor too.

Well, it does seem from my understanding that once you're playing at that level, you do want to leverage other staff and make it an actual legitimate, like, company, right, where you are having property managers and you are leveraging all of that time, effort, and energy out, becomes a payroll at some level. But it does— as opposed to, like, you trying to take it on and do it yourself, like you're saying. Do you think that there's, you know, when someone gets started, um, and then maybe this is really just breaking this down on the simple level, like, what are some of the things people do need to take into consideration? So let's say they have— I don't know, let's pick— where would someone have to start numbers-wise? Like, where would you say, like, maybe you shouldn't be looking into doing any type of investments unless you have a bare minimum of X amount of dollars, but you also have X amount of dollars saved for yourself? So when you drain your bank account to invest, you're also not freaking out every day because that money's tied up.

Sure. And I think the answer differs depending on what the person is trying to do, so, or what, what they're willing to do also. So if you are My first investment was a duplex that I lived in. I had a couple thousand dollars. I had the rest in a retirement account that I could cash out to buy the first property. I had no other money outside of that, but my thought process was, hey, I have to live somewhere anyway, I might as well make it an asset. I don't— I wasn't worried that I didn't have 6 months of reserves in the bank because I was going to buy a house to live in anyway. Why not make it a house that made me money and I lived for free in Sure. At the same time that I was able to start building up assets and start building up reserves.

Well, can someone who is looking at a single-family home— so let's put some numbers just so like we can have some mindset. If someone gets approved for $500,000 mortgage, are they just as likely to be able to find— I mean, they can find a condo in some places, they can find a townhome, they can have HOAs, but to find a duplex that might be $750,000 $250,000, are they going to still— like, will they look at being able to say, like, okay, so because you're already gonna have renters in there, because— are they going to take that into consideration when a mortgage— when they're applying for a mortgage? Is that all factored in, or are you having the same rules apply no matter what?

Sure. So that's a great question, and that question I get all the time. So there's a couple considerations here. Most people want to buy duplexes, especially their first duplex that they're going to live in, with an FHA loan. Uh, there are FHA loan limits, and it's really easy to find out the FHA loan limits in your area. Just Google FHA loan limits, whatever county you're in, and it'll pull up a site that'll pull up your county, and you can figure out the FHA loan limits in your county. In Austin, Texas, for a duplex, can't really spend over $640,000 right now. This adjusts every year. So last year, let's say it was $550,000, this year it went up to $640,000. No, Maybe it was even less, but it's gone up and it goes up every year around the end of the year, and then it's effective the beginning of the next year. So understand the loan limits in your area. Um, they do take rent from the other side into your, into your income, but they only use 70% of it, I want to say. And just full disclosure, I'm not a lender, I just have a lot of experience doing this myself. So take about 70% of the rent from the other side. If there is no renter on the other side they'll find out the market rent on the other side. And I've had a lot of lenders to find out the market rent, just ask me, the realtor, hey, what's the market rent in the area? And yeah, I give them honest answers. But that's just a long way of saying they don't do a huge look into what the rent actually is. And it's, it's not too hard to find out the market rent in your area. Look at some rent comps as a realtor or just look at Rent-O-Meter if you're a civilian.

Yeah, well, so, and this is kind of what you're doing, right? You own this property, you're living in a duplex, and yet you also have other properties or other types of real estate deals that you're involved with. Why, why do people kind of like minimize this as a legitimate thing? Like, well, it's either in a condo, right, which you are sharing property with a billion other people. Yeah. Or you're, or you're buying a property that's your own and then you have to deal with everything, right? It's that one roof, one head, one massive roof, one massive headache. Why is this like duplex, even triplexes in some places, why is this kind of like— there's like a stigma a little bit on it, being looked down upon.

People don't want to manage tenants. They have this, this idea in their head that managing tenants is just horrible and awful. And in reality, when you get to pick your tenants or you're doing the background checks on them and you're making sure you're moving in the right people, it's usually great. And I hear the 'I don't want to share a wall' with people all the time. In Austin, we're building so many duplex condos where they're A/B units. You might not share the wall directly, but they're a couple feet away from you. If you— and like you said, a condo or a townhome, you're sharing a wall with a ton of different people and you're not in any control. I would much rather tell you to go buy a duplex that you own the whole thing You control the whole thing. If anything bad happens, you can— you're able to make all the decisions rather than, oh, it's a condo building and there's 4 condos and you, you have to talk to the other 3 people. In reality, it's usually 40 to 60 or 80 different people that you have to work with. And maybe there's a professional management company, but not always. So I think duplex is the lowest risk way you could go about it. So if you need to replace a roof, at least your tenants paid for part of your mortgage and paid you some so you can replace the roof. If you need to replace a water heater, X, Y, whatever problem you have, you're living for so much cheaper in a duplex than you're living in a single family or a condo that you've been able to save some money. And that's— I was able to start saving aggressively. I got in the mindset when I moved into my first duplex. I also wasn't paying anything to live there, and I was saving around 70% of my income every month, 70-80% of my income every month., and I just threw that all in the bank. 6 months later, I bought another rental property and just ran from there. So today I still live in a duplex. It's my 4th. We will not stop house hacking per se, but we will change our strategy. And my strategy's changed over time. So my first duplex, I had 2 roommates and I had a tenant upstairs. Um, so I had a bedroom. Yeah, I have my friend Craig Kerlop. I remember he said he was sleeping behind a curtain in the living room. Wasn't doing that. Um, but I've transitioned where we now live in a 3-bedroom, 2-bath duplex unit. It's really nice. We remodeled it before we moved in. We've got stainless steel, we've got nice tile everywhere, we've got quartz, you know, we've got nice stuff. Everything is nice, it all looks brand new. We did that before we moved in so we didn't have to live through any of it. And we rent the unit next door, so we have essentially a townhome unit in a townhome association that we own and control. And we will continue to do that for at least another 1 or 2. After that, we will transition to single family and we will either build or find one with an ADU that we can have family stay in when we want to or rent it out when there's nobody in it. So Airbnb is a really powerful strategy for situations like that. If you need, need it filled most of the time but need control over it some of the times. And it can also make really great income.

So the idea that you've done this before, you're doing it now, and you're possibly going to do it one or two more times, there's a consistent patience that it sounds like someone needs to have. And I always hear this, and I like, again, like, I live here in South Florida, and it's people want to move into their homes, or they want to move to somewhere like that's really, you know, they feel like they want to move up faster than maybe what they really should be doing, and they're not playing it. They're playing a different game. So how would you see that mindset of like keeping it simple and setting yourself up for longer-term success by doing what you're doing? And you use this term, you know, home hacking. So can you break that down a little bit more and then tie that into the patience that's needed?

Yeah, so house hacking very simply is just renting out the space that you're not using. So it could be a single-family home, a 4-bedroom single-family home, and you rent out the other 3. I have an agent on my team that does that. He lives completely for free.

Wow.

Or it can be a duplex, then you Airbnb the other side. I have an agent on my team, he also does the exact same thing, that same thing, and lives completely for free. Um, but it's just delayed gratification, you know. If you can delay gratification for a little while— so I started doing this in 2016 in December. By 2022 and April, it's made me over $700,000 in equity or, or just cash after selling these places. So the gains have been over $700,000, and all I had to do— and it's so simple and it's so easy— all I had to do was buy a duplex, fix it up, and move into it. That's all I had to do. It's so simple. It couldn't be more simple. And I did it with very low down payment loans. So as an agent, you get a commission. So I also rolled the commission into the last couple. The first one, I wasn't an agent. The last 3, I've also rolled commission into. Um, the last 2 I bought with an FHA loan. I was able to negotiate my commission up a little bit, so the commission was 3%. I said, hey, there's some problems here, how about you give me a 3.5% commission, which was the whole down payment for the property. I also got the closing costs covered by the seller, and by using a lender that I use a lot, I have lower closing costs. I didn't have a ton to get covered there, but both the previous two duplexes I bought, I walked away with a check at the closing table. I brought no money and I walked away with a check. So if you get creative, it gets really powerful. Yeah, you might have to live less than what you want for a few years. But here in the next couple years, we'll be able to live wherever we want and not worry about it at all.

It's incredible.

Yeah. Yeah.

And most people don't even know that that's even a doable thing, right? You can play with these ethically— number, right, these numbers in an ethical way that benefits for you in the long run. So let's break this down a little bit more because there's a lot of terms that people, when they're starting to look at real estate or the ways that they can get involved in real estate, usually you're a buyer or a seller. That's the traditional way. And I've heard, you know, people have maybe heard the terms wholesaling and, right, getting into crowdfunding a certain property or stuff like that. Let's talk a little bit about active versus passive investing and the different pathways that people can get involved.

Sure. And I think that's really important because I think a lot of people don't know there's so many different ways. They think real estate investor, I think I'm buying a house, I'm in there getting dirty, I'm fixing it up, I'm dealing with phone calls in the middle of the night. I look at it as a continuum. That's on the far end of very active. You're managing the property yourself, you're finding the property yourself, you're fixing the property yourself, you're doing everything. And that's— in all reality, that is the most profitable, but it takes the most time. So if you're looking at dollar per hour, you might be making the highest return, but you might not be making the highest dollar per hour.

Sure.

And if you're making $15 an hour, that might be a great return. You might be making $25, $30 an hour. On this rental property. So that can be a great way to get started, and it can be a great way to invest too. But on the far end, there's completely passive investing where you give your money to other people. You're either lending money privately or you're investing in two passive investments like real estate syndications. I would say lending money privately still has a small active component to it because you need to pay attention to who you're lending to. You need to do a little bit of work there. You're going to hear about it more often. Private money might turn over every 3 to 6 months. A real estate syndication, the money might turn over every 5 to 7 years.

Oh wow.

So you don't have to do anything for a couple years. You read a monthly or quarterly email about the project, but there's a sweet spot in between there too. Any— anything in between there can work for anybody. So you're completely active, you're doing everything. And again, if you're getting started or you don't have a lot of money, this is the best way to go. You can get in with house hacking You can get into projects with other people's money and you can do all the work. And that's a great way to get started. That's how I got started. So I recommend everybody get started, do as much work as you have to to get started. But if you've got money, you can buy properties, you can have other people manage them, you can have other people take care of them, and then you can get further down the line where you're partnering with other people and you're just providing the capital and they're doing most of the work. Or again, you can be the private money that's taking care of it. So there's a million different ways to invest in real estate, and there's a huge continuum along that scale that it works well with too.

How much time would you suggest that— right, there's a whole overall vertical of real estate, and then there's all these little subcategories in there. Like, where to— for someone to become a basically decent understanding person of where along the spectrum they should be, how do they— where do they go? How much time should they be spending? Like, You know, I know like in psychology we have like, here's a personality test, here's what you're most suited for. Is there anything like that in, you know, for real estate? Like, hey, answer these 15 questions and this will guide you to where you can be focusing right now based on what you answered.

I don't know of anything, but I think the simple question you need to ask yourself is what do I have more of, time or money? What do I value more, my time or my money? You know, so if you were, again, if you're brand new and you've got nothing but time and not a lot of money, Pretty easy answer there. You need to be as active as possible. But if you're a highly paid W-2 professional or you own a really successful business, probably don't leave that line of work to go get paid $25, $30 an hour to work on real estate investments. That doesn't make any sense. It's a really simple question. It's what's my time worth? What am I going to get paid? I think you've got to look at that with anything you do, but especially real estate investing. So again, if it's $30 an hour work and you make $500 an hour, probably don't go do that on the weekend, right? No.

Yeah. So how does this play out? And, and, you know, part of the things that we're here talking about at this conference is taking things from what you're doing in your work world, applying it to your personal life, and from your personal life, applying it to your work world. So there's a symbiotic, wonderful flow. How has any of this, of what you're doing and what you've grown in as a professional, how's that trickled down into your personal life?

Well, It's, it's certainly trickled down in my personal life because I figured out how to not spend every waking moment working. And I absolutely did that for a long time. So when I had my— when I bought my first duplex, my first house hack, I was working as a personal trainer and running a personal training business. So I worked in it. I didn't work on it at that point. I was working in it at that point. I would work from about 5 o'clock in the morning to 9 o'clock at night, just grinding. Yeah, is that what you had to do as a personal trainer? And then I started to hire people and I started to leverage, um, and I didn't have to work so much. And I got to the point where I could start working as a real estate agent in 2017. At the same time, I own this other business. At the same time, I'm also buying real estate investments. And I've forgot that a little bit along the way when I started with real estate investments because I was just doing everything. But again, I started to have more money than I had time I wanted to spend on things, and I was able to start to move more towards actually being passive investment. It's a pet peeve of mine that people say, oh, it's a passive investment, and it's a single-family house that you manage and you run over and you fix things. It's probably more passive than your day job, right? But it's not passive at all.

Yeah, I mean, is there— was there a point a moment in time? Because we hear this once you get into this entrepreneur space. Is there— was there like a moment where you're like, where that switch flipped, where you knew you're no longer wanting to trade your time for money and it just clicked and it was just go, go, go?

Well, I think I learned the power of leverage, both with partnerships and both with employees and, and other people, you know, investing with other people, of saying, hey, my time's best spent working on my business my main business is where my time is best spent, and it's not best spent going and finding commercial real estate deals, which take a tremendous amount of time. You know, I was— for a long time, I was working all day, you know, and more, probably 60 hours a week. And then at night, I was analyzing commercial real estate deals. I said, this is just— yeah, I hate this. And while I love commercial real estate, I don't like this portion of it. So I said, what can I do that I like? And it's continue to work on my business and just invest with other people. Yeah, you know, do both LP and co-GP work with other people. I still do some co-GP work because I raise capital, because that's what I do all day any day anyways. I talk to people about real estate and I'm building my real estate team, so it's very symbiotic with what I'm already doing. But going out and finding deals and analyzing deals I'm not very good at that. I know a little bit about it, enough to know what a good or a bad deal looks like, but that's not the highest and best use of my time.

And bringing in people who balance that out.

Yeah, absolutely. Just finding the right people.

Yeah. And I think that's kind of what everybody, you know, thematically through all my episodes, is learning what you're really amazing at. And I see it in my therapy sessions.

And what you enjoy.

Yes. Yeah. Yeah.

I think that's just as important.

Yeah. And, and not feeling bad or guilty that this thing over there isn't really what you're supposed to be doing and owning that. And that actually gives you so much power and purpose in that. And I see this all the time, that people feel guilty that they're not doing something that they don't love and they don't enjoy. And it's so nice to be in a community, you know, as a guest of this, this weekend here, to see people who are so passionate and so turned on by not only what they're doing, but also reinvesting into their personal life, investing into their family. We saw the charity, how much they end up raising. I had to leave in the middle of the thing.

It was I know it's around $150,000, right?

And then, uh, the founder of Spartan Race then offered to do what, $120,000 or something like that for people? Yeah, it was $120,000 for people who would sign up. So like, this is one of the most beautiful things about these type of communities, that there's always a concept of giving back. And I really do want to, you know, thank you for your time to give back to, to a community who probably hasn't heard of you. And even though I do have some friends in Austin, hopefully they'll, you know— but everybody should check out, right? It's— even if you're I'm assuming, right, even if you're not in the Austin real estate market, I'm assuming there's a ton of stuff they can get by learning.

Oh yeah, we've got some great guests. So I— the Austin Real Estate Investing Podcast has just been something I've done for fun because I always heard, oh, you can't invest in Austin. I knew that was a lie because I was doing it and had lots of friends who were doing it. And I said, well, we need to get the word out there that you actually can invest in Austin, and here's all the different ways that people are doing it.

And do you think that would be a universal thing, that if you're Miami, there's certain similarities, or LA.

Oh yeah, absolutely. Everywhere's got their, their unique pieces, but nothing's that unique, right?

Makes sense. Awesome. Well, Jordan, again, appreciate it. And your Instagram is Jordan_Moorhead, M-O-O-R-H-E-A-D. And any other places that you want people to check out?

That's probably the best place to, to— if you just Google Jordan Moorhead, you'll find everything too. But yeah, at Jordan_Moorhead on Instagram.

Awesome, thanks so much.

Awesome, thank you.

Thanks for listening to the You Winning Life podcast. If you are ready to minimize your personal and professional struggles and maximize your potential, we would love it if you subscribed so you don't miss an episode. You can follow us on Instagram and Facebook at You Winning Life.