Episode 1 | Welcome To The New And Experienced Investor

Welcome to the New and Experienced Investor Podcast. I'm one of your hosts, Alex Barnett. This is your other host.

Joe Homs here.

That's right. This is a real estate investing podcast. If you're watching on video, you probably can tell But if you're only listening, then you might not be able to tell. I'm the new investor and this is the experienced investor.

So what you're saying is you're calling me old?

No. Whoa, whoa, whoa. No, no, no. I'm just saying you're experienced. That's all. So before we dive in, before we dive in on why we made this podcast and kind of what you can expect from the upcoming episodes, I just want to share with everyone sort of our backgrounds. And, you know, how we met. So why don't you kind of lead the way and go into your background in real estate?

Okay. Yeah. Let me tell you a little bit about myself. I've been a real estate investor for over 43 years. I really got started. My dad kind of brought me into the business. I was still in high school. He was purchasing properties, buy and hold back then. He would drag me on the weekends to go paint the place or put flooring in or whatever it was that needed to be done. You know, I look back now and honestly, my dad and I got along really, really well. And so I didn't mind it, even though I was in high school. And it's like, yeah, I like to kind of party with my friends or whatever. But I was with my dad during the weekend. You know, I guess it kept me out of trouble. So anyway, he taught me basically everything that I know. He's a very talented person. He's very hands-on. He was great at teaching what to do, how to do it. And there's nothing that we couldn't tackle together. So I started out there. I graduated from high school. And a few years later, during college, I decided, well, you know, maybe I ought to get into this game. And back then, really, the only way to educate yourself was to get a real estate license. This was after I purchased my first investment property, which was at 22. And believe it or not, I still own that property today. And obviously, it's paid off at this time. I didn't pay it off. My tenants paid it off. But being a landlord back then meant, okay, how do I get educated on this stuff? And really the only way was to get my real estate license. Once I got my real estate license, it just changed the world for me. I mean, I literally— I can do all this stuff. It's like, yeah, you can do all this stuff, especially now that you have a license. So I started buying fixers. I started buying more buy-and-holds. Um, and let me give you a little bit of perspective. The property that I purchased was $50,000 back then, 40 years ago. It's probably around $500,000 now. And it's just a small 2-bedroom condo here in Orange County. But that's how the market has changed along the way. I've been through 3 up and down cycles. So we got to a point where it just didn't make sense to buy buy properties to hold on to it here in California. So then we moved into flipping properties at that point in time. And then the market took a downturn, the first downturn. Remember, I bought it for $50,000. It went down to $50,000 again, even though it was up to like $200,000. That was the first downturn. And I'm a little depressed. I'm feeling high when it was at $200,000, but then it dropped down to $50,000. But— And that's the way it is. I didn't have a problem because it was rented out and I was making cash flow on it. So I'm good. The next downturn or upturn, we went up and the property was worth around $250,000 at the time. And then here we are again, the downturn. But this time I was really lucky because it only went down to $100,000. And so I was going, okay, well, I've doubled my money. We're in a bad market. And I'm still doing good. So, um, during the entire process, I'm buying, I'm selling. When it gets down to the bottom, I'm buying more. Um, you know, again, as it goes back up to the point where it doesn't cash flow, I'm flipping properties at that point in time. Uh, crazy times. Uh, we were literally going to auctions. An investor friend and myself were going to auctions and buying properties at the auctions, which is what they were doing the previous downturn before this one. And then 2008 comes and it's like, whoa, this is a really bad one. So again, the property values were up at $500,000 for that 2-bedroom, 1-bath condo that I have. And it dropped down to $100,000 again. And I'm thinking, okay, well, I've gone through 2 of these cycles before. What should I do? You know, and I go, well, you know, I kind of like to look in the mirror and always ask my questions. It's like, what would you do? And the mirror responded, well, Joe, Why don't you go out and buy 10 more? So what I did, I bought 10 more properties. We're back up to the values of those condos at $500,000. So here in California, you have to kind of be careful on when you buy properties. If you can buy a property that cash flows, which is very rare, buy it every day of the week. But if not, then you're going to have to wait for the downturns to come. And then that's when you start buying properties that cash flow. And you hold on to them for the rest of your life, basically. Again, I was 20. So, you know, I'm, I'm in my 60s now. I won't tell you exactly, but anyways, I'm in my 60s. So, you know, 40 years does wonders for, you know, people that are paying off properties, your tenants, and, you know, you're living the dream all the way through. So I'm, I'm doing this and I also hold a meetup group every month here locally in Orange County. And I believe that's where Alex and I met. Is that correct?

Yes. This was during COVID So you were doing them online?

Oh, yes.

Yeah. Zoom meetings.

Yeah. Zoom meetings. And Alex said that he was a wholesaler.

No, I said I was interested in flipping. Or actually, I was just sitting there and you called me out and you said, you know, why are you here? And I said, well, I'm interested in flipping and I have no idea what I'm doing or where to even start. And you said, come on down to the office and I'll show you how to flip. And I was like, oh, well, why did I call you out?

Do you remember that? Is it because we were wearing the same Hawaiian shirts or—

I think so.

I think, you know, he's— this guy's always in a Hawaiian shirt, right? I wear a Hawaiian shirt when I'm doing podcasts or, or some YouTube videos. But normally he's, he's literally Always in a Hawaiian shirt.

Yes, I do love my aloha shirts. Yeah, I think, I think there wasn't that big of a group. Maybe there was 12, and like just everyone was kind of like chiming in, and I was just sitting there lurking. And so you kind of spotted that a mile away because you do like to pick on people. I do. I do at the meetups.

And then what you're saying is I wasn't like really popular because there was only 20, 12 people there?

No, we were—

that's what I heard.

No, it was crazy. It was Because the next one, I think there was 500 people. So it was just an off night.

Okay.

But yeah, you said, come on down. And then you kind of gave me the basics of flipping and you gave me this speech that I've now heard you give other people when they say, oh, I want to flip. And you go, oh, well, how much money do you have? And I said, none. And then, you know, you were like, okay, well, you should try wholesaling. And I was like, what's that? And so you kind of explained it and you got me started on wholesaling. Got my first deal, I think a couple months after that, sold it to you, you and Ryan. And then at that, I made like 15 grand. Before that, I was making probably like 20 grand a year, like being in a band. So it was kind of mind-blowing. And then ever since then, I've just been obsessed. And so this last year, 2022, we started partnering on flips. And then I feel like I am just starting, but it's been pretty amazing so far. So pretty stoked, pretty stoked.

So anyways, that's, that's kind of my story. And then how Alex and I met. And he said, hey, I do a lot of YouTube stuff. And so what about if I put you on YouTube and do all that for you, and you teach me how to flip properties? And Alex is married to Lauren, because I can't forget about Lauren. They weren't married at the time. They just recently got married. Um, but they're a team and they work together. And, um, so I'm, I'm happy to, to do that. And that's how the relationship started. Um, so you told us a little bit about your story.

Mm-hmm.

Is there, is there more to that? Yeah.

I mean, basically my background has nothing to do with real estate. I was always, um, in bands. I've toured the world, um, with me and my brother's band. Um, and that was pretty much going to be my life plan. I say I was just going to Willie Nelson it out into the sunset just till I was 90. And then when live music shut down, that kind of just threw me for a loop because in my mind I thought that could never happen. Um, and so I, I wanted to look into other things that were maybe more tried and true. Uh, maybe that could set me up for the future because now as I'm getting older, I need to start thinking about the future and not just be a guy in a van Or a bus touring around playing bars and stuff.

Yeah.

So yeah, I read Rich Dad Poor Dad, which is a lot of people's introduction. And then I started listening to BiggerPockets. And then they say find a mentor. And if you go on BiggerPockets and you're in Orange County and you type in mentor, Joe pops up. And he meets with so many people. I mean, just from me knowing you for the last 3 years, I see how many people you meet with and you're giving advice and all this stuff. Which is kind of mind-blowing when I see people not taking advantage of it because you literally will tell you how to do it. Like, just, I didn't have to know anything and I would just go to you and I say, what do I do next? What do I do next? What do I do next? What do I do next? Which is what I still do.

Yeah, I was gonna say, I think you're still doing that.

Yeah, every step of the way until I kind of start figuring it out and then you can, you know, replicate it. But it's, it's such, um, a resource to have. You know, as you kind of just went into your background of just, I feel like now I can't fail. And so if you're wondering, like, how do I get started? Just reach out to Joe. He's literally here saying, reach out to me and I'll show you how to do it. You know, so I took advantage of that. I wanted to bring value to you though. I didn't want to just take from you and not provide value. So I said, I will do your YouTube channel because I saw that it was It needed a little punch-up. And that's kind of what I had been doing the last couple of years for myself in the music. And so I wanted to bring value, and I hope I did that.

Yeah, you've done that.

Yay! OK, perfect. OK, good. And so I kept showing up, kept showing up, because I wanted him to see that I was serious about it and to be reliable.

And see, I just want you to stop there for a minute.

OK.

Because you kept showing up, and I have met with— No less than 500 people. And the reason I meet with them is because I want them to either buy me lunch or buy me coffee. And then those who don't want to pay anything can meet at my office for me. I give them that option, but I'd prefer lunch. So when I do meet with people, whether they're experienced or not experienced, at least at the end of the day, I've got a free lunch out of it, so to speak. I always offer my services for free. I do not charge for anything that I put out there whatsoever. I have websites with a lot of information that you can start. I mean, you have YouTube University out there, so all you have to do is Google something, YouTube video pops up. I'm just, you know, here local in Orange County and happy to help anybody. Uh, with that, the reason he keeps, uh, or the reason I like him is because he keeps showing up. And I've told many people along the way that I meet up, okay, here's what you need to do. Take the next step. Show up. Come to my office. I'll take you out for a tour of distressed properties. I'll show you what I do. I mean, literally, I'm grabbing you by the hand and showing you. Uh, I tell that to people all the time. He shows up. I tell you that probably 95% or more of the people I tell that to don't show up. And I think that's why a lot of people get caught in this guru trap that they go to a course, uh, put on by a guru and it's like, you know, inexpensive or free. But then you get there and then they start selling you the $5,000, $10,000, $15,000, $20,000 package at the end of the day. And they know that, again, 98% of the people out there that buy these packages are not going to do anything. They take them home, they put them underneath their bed, and they don't look at it. And I meet with people like that and I go, OK, where's your package? Underneath my bed. I go, well, do me a favor, pull it out from underneath your bed. Put it on your vanity where you brush your teeth every morning, because I want you to see how much it costs, and I want it to embarrass you every morning. I want you to figure out, okay, well, how am I going to make this money back? Okay? You're never going to make any money back if it's underneath your bed and you've forgotten about it. So pull it out, put it in front of your mirror, start brushing your teeth and going, okay, I paid $20,000. How am I going to get out of this hole? that I have created for myself. Okay, maybe you ought to call me and meet with me and we'll discuss that. And I'll try to point you in the right direction. Okay, like I have been with Alex and, and others. Alex is not the only one, but others out there. So thank you.

Yeah, absolutely. And that's kind of why I wanted to start this podcast. It's sort of a spinoff of something that we say in your YouTube channel, which is you made that YouTube channel for the new and experienced investor, because even if you're Yeah. And, you know, whether you're experienced, you can always learn from your peers and, you know, things that are working, things that aren't working. Um, I wanted to hop in because I feel like I'm just maybe a year or 2 ahead of somebody that's just starting. And I could just say, you know, like, do these things, just listen to Joe and he'll show you what to do. And then, you know, you could, you could be on your way to start having, um, success in real estate, you know, and, and, and starting to build something for your future, you know. So that's kind of the reason why I wanted to start this podcast, so you could reach more people, and then they could see somebody that's brand new where it's just like, hey, we're doing it. We're just literally putting in the work. And compared to all the stuff that I've done with bands in the past, like, this is— it's not easy, but it's just showing up and doing the thing every day. And And that's what's been paying off the most, I think. And, um, so—

Plus, it's fun.

It's so fun. I'm obsessed now.

Yeah, it's fun. I mean, you know, that's why I wake up in the morning, because this stuff is fun. And, and I like to teach others, right? You know, I, I, I put out a lot of information and, um, you know, get a lot of responses from people. But that's what my enjoyment is in life, is teaching The new kids on the block.

Absolutely. Absolutely. And, and so, you know, what you guys can kind of expect from this podcast, it's going to be a lot of that. It's going to be pulling from Joe's experience. But we're also going to be looking at current stuff, current news, what's going on in the market today so people can maybe hear your outlook. Like you said, you've been through some ups and downs. Right now we're kind of going into a down after a super hot market, and I've only experienced that super hot market. So this is my first downturn. So I have no idea really what to expect except, you know, kind of what you're telling me. Um, but, you know, I think everybody could kind of benefit from that. So that'll be one thing, kind of current news. Um, definitely investing advice, you know, which is, which is great. Um, uh, how to get started, which is, I think a lot of people just get hung up on that for some reason. What do you, what do you think that is?

I don't know if it's just fear. Because I tell that to people all the time. It's like, you've got to get over your fear. So tell me what it is that you're fearful of doing. I mean, are you fearful of being successful? Are you fearful of losing money? You know, it's all about educating yourself so you don't feel fearful about whatever it is that you're trying to do. Money's money. You know, you can buy a property for $10,000 in Chicago or spend millions of dollars here in California. It's still the same thing.

Mm-hmm.

You know, if I buy something for $10,000 in Chicago and put $5,000 into the rehab and then sell it for $30,000, I'm still making a profit. It's still the same process here. You know, it's going to be probably $700,000, $800,000 and selling for $1 million or above. It's just people look at that big number and they go, oh my God, $1 million, I'm scared. Well, you're not scared if you educate yourself. You, you go through the process, you know what you need to do. You know that the after-repair value is going to be correct. Your rehab is going to be correct. You're going to put it back on the market and sell it and you're going to make this profit. So if you feel comfortable through that process, you can, you know, really flip in any market. Sure. You know, whether it's, you know, $30,000 or $1 million or above.

Yeah, exactly. And it's— I mean, you don't even have to start with flipping. You can start wholesaling, which is, I would say, even a lower barrier of entry. But it's the taking action part that I see most people kind of flounder on.

Yeah.

So, you know, maybe this podcast will inspire some people to take action. And it, once you see that success and you get that proof of concept, it, it definitely, you know, gives you confidence. Um, and then on top of that, I'd like to have, you know, you know, a lot of people in the industry, so, you know, maybe we could have special guests, um, experts. The other night at your, uh, meetup, you had one of the tech wizards from PropStream, which is, you know, a, a software where you can pull lists of All sorts, but you know mostly we're looking for motivated sellers to reach out to and and try and see if we can solve their problems. So that was really cool, and he showed us some some behind the scenes stuff and and how to really utilize that. So we're going to have all those types of people on here. You ready for that?

I'm ready.

Okay, let's do it. So what I want you guys to do is you know make sure you subscribe to this podcast. It's going to be pretty much everywhere that you listen to podcasts, but also subscribe to Joe's YouTube. which is youtube.com/joeohoms, which we've been working on over the last couple years. And then Lauren and I are starting our own YouTube as well, which is Alex and Lauren Real Estate. So jump on both of those and let's just, you know, connect with everybody.

Sounds great.

All right, see you on the next one.