Get Your Questions Answered Live

What's up everybody? Welcome back to the New and Experienced Investor Podcast. Today we're doing an awesome show. We're taking your questions live. Make sure to drop, drop 'em in the chat. And I have a bunch of questions that people sent me today. We're gonna see if we can get through all these. And, uh, this has been a really, really wanted podcast because some people can't make it live. So they're like, hey, how can I get some questions answered? Well, we're doing it today. So make sure you stick around, share this far and wide. I'm one of your hosts. I'm Alex Barnett. I'm the new guy.

And I'm Joe Homs. And that makes me the experienced guy because the new guy over here, we were talking to air for 5 minutes and that's why we're late.

We went live and you guys missed a heck of a show.

Yeah. All right.

But we're gonna make it up right now. Let's talk about our event that we have coming up.

December 29th. Yep. Knollwoods in Irvine, 6 o'clock. Be there. It's my prediction month where I predict what, uh, I predicted last year to see if it came true or not.

I know.

And what I'm gonna predict is going to happen with the real estate market in the future. Crystal ball and all.

That's right. And I'm hoping that we're gonna have some people there. Maybe we can manifest some things for the new year.

I hope so. Yeah, let's do it. Maybe, maybe we can work on your baby brain.

Oh, that's right. Yeah, I'm gonna be a new dad, so yeah.

Um, so maybe that's why we went live, but we really weren't live. We were just talking to the air.

Oh my gosh, I have the ultimate excuse.

Yes, you do.

The whole next year.

Yeah, you do.

I can blame all of my problems on this baby.

Yes. This is when it starts. We're not gonna blame it on the baby. Okay, we blame it on you, but just call it baby brain. Okay, perfect.

I love it.

It's so cute. cute. Okay.

Uh, but yeah, go ahead and drop any questions that you guys have regarding investing, real estate, life in general. I mean, babies. Babies. Yeah. I'll, I'll see what we can do to answer this stuff. Uh, we have one and she's always first. Liz is in the chat. She's our number one fan.

And she— Hey Liz.

And she, she's got a question for you, Joe.

Me?

Yeah.

Ooh, here we go.

Okay.

Hotspot.

Joe, after 5 decades, what's the What's the wildest before and after appreciation you've ever seen in Orange County? I mean, I guess it could be like a flip or it could be the whole time.

So I don't know. I think the most I have ever made on a flip was $300,000. And that was like 2 or 3 years ago. Just literally bought it at the right price. If you remember, like, But right after COVID, things just started to shoot up in price. It took me a while to get the tenant, the owner out of there because I told him he could stay rent-free for 6, not 6 months, but 60 days. He ended up staying for 6 months, but I was okay with it because I was watching the market and it was just literally shooting up like a rocket. And I said, okay, well, that's fine. You know, I'm not getting any income out of it, but at least, It's not going down in price. And so by the time I got him, I was 6 months later, we went in and we did a light rehab on the place. We didn't do a lot, you know, flooring, painting, you know, fixed a couple of things, not much else. And went in there and made $300,000 on that flip. I couldn't believe it.

That's crazy.

Yeah. We have that video on the YouTube channel as well. Yeah.

Right.

Yeah. If you wanna look at it, it was in Mission Viejo.

Yeah. And it was in a great location and it had that really nice pool in the background or in the backyard.

Yeah.

So I think that definitely played into it as well.

It had what I call a resort pool. Okay. It wasn't just a hole in the ground. It had like a rock feature and a slide and—

Baja, whatever.

Yeah. Oh yeah. That was Baja Bench.

Yeah.

Baja Bench. Yeah. So you could kind of, big space, you can crawl in there and just lay down basically without drowning. So it's kind of almost like a kiddie pool, I would say.

Yeah. I think it's for like middle-aged moms. They have the wine and they're like, you don't—

Oh, yeah.

Yeah, you can kind of like lean, but you're not under the water.

Yeah. No, that was good. That was a good flip.

That's great. Yeah. And you know, that's the benefit of being in Southern California. I mean, people say it's so competitive, which it is, but you don't need— how many of those does a person need to really like live off of for the year? You know, that's somebody's salary.

Honestly, if you stay So if you started flipping, you know, in the $800,000 price range and end up selling it for $1.1 million and making— let's say you make $100,000, which is not unusual at all. How many flips do you need a year? 1? 2? Like, if you're here in Orange County, you probably need 2.

You need 2.

You know, but even 1, I think most people would be happy with $100,000.

Yeah.

In 1 year and then go to sleep for the rest of the year and then wake up and— try to do it again.

Yeah, exactly.

You know, but by that time, let me tell you, you, you get caught in a fever and it's like, oh man, let's do another one. Let's do another one. Let's do another one. Yeah.

You could do one of those or do 30 mobile homes.

Oh yeah.

Which one?

I like that.

Yes. Which one do you wanna do? Which one do you pick?

Yeah.

Um, okay, so let's go to the paper. So, uh, some of these people, they haven't been attending live, so they've sent us over some questions. I saw a townhouse Listed for 280k in Orange County. How can that be so affordable? And what do they mean by land lease?

Do you want to answer that?

I'm gonna give this one to you, and I'll take the next one.

Land leases are mostly in Irvine and sometimes along the coast— Huntington Beach, Newport Beach—and basically the landowner says, "Yeah, you can do whatever you want on my property. You can build homes and." whatever, and I will lease you the land for, you know, 100 years. Okay, 100 years, and you pay me, you know, this amount of money every month. So you're literally paying the lease amount. And I've seen literally some of them where, you know, they're coming due now, um, and they were paying like $100 or $150 a month, you know, for like the last 100 years.

Mm-hmm.

And then I see them come on renewal because you have to renew them. And now they're asking the landowner, okay, which is probably a relative because I don't think he lived 100 years. So it's probably a relative. And now they're asking for like $2,500 a month. Okay. So not, not, not a bad buy, but not a great buy. Not something that I would recommend. You always want to own everything. Including the land, you can't write off that lease on your income taxes. If it's a rental, you could probably get away with writing it off. But if it's your— if you're a property owner, and then at the end of the lease, if the property owner does not want to renew the lease, he's basically saying, yeah, thank you for all this that you've done to my property. See you later. And you're gone.

Wow. Yeah.

So What are the— maybe not, maybe not the greatest thing, you know. I guess it depends on your life expectancy and how long the lease is. So if you start a brand new, you know, 100-year lease, and that's more affordable because, you know, the price is $280,000 for that reason, because you're not really buying the land.

Yeah.

So that makes it a little bit more affordable for you. If that's what you want to do, then Go for it.

Yeah, yeah, I guess it's— I mean, you own— I guess it's kind of like a mobile home. You just— you own the— Yes, exactly. You own the thing on top of it.

You own the thing on top of it, which is really hard to move.

Yeah.

A house. I mean, a mobile home, you can just put it on wheels and take off, but a house is a way different story.

I know. They have the little section in Lido where it's like, um, it, it's— they have a bunch of modular homes on there and it's I don't know, one family owns this little section of Lido. Yeah. And, uh, they're raking it in monthly. I bet. I bet. I think it's like $5,000. Yeah. Or something like that. Just for the land lease. Yeah. So it's important that you own the land if you want to have any control.

Own the land, please. Yes. Own the land. And they're not making any of it anymore, by the way.

I know. It's like, how, how can, how can you do that now? I mean, I guess you can't do it here in Orange County really unless you pay some crazy number for the land. But yeah, can you, can you set that up now?

You go out in the middle of the desert or something, buy some desert land, you know, but then you have all the other problems. How do you get utilities out there? And, you know, that's one thing about the future. We have no idea. Maybe they're going to invent, uh, I know they're talking about it, a little box that's, uh, a nuclear, um, electric Right. You know, generating box, and that's what's gonna power your home. Like, who knows what's coming in the future?

It's true.

My car drives me home every night.

Right.

Okay. It's like, I just literally press a button and it drives me home. So whoever thought of that?

I know.

You know?

Yeah. I mean, and that's, that's, that's kind of the move, I guess, when you buy land is like, you're hopefully in the path of the opportunity or whatever.

Yeah.

We have a follow-up question from Liz to me. Alex, what's the one thing Joe has taught you that has instantly leveled up your investing game?

Oh, are you feeding her these questions?

No, no, she's asking. She wants to know. Inquiring minds want to know. God, how can I pick just one? I would say, Um, I mean, it's, it's really just, you know, just the fundamentals of sticking to your numbers and not being overly optimistic, which is hard for you. That's so hard.

It is hard for you.

It's so hard.

Yeah, we've got to refer back to your wife because, yeah, she's the numbers person. You're not. You're, you're the yes person.

I am. And, and it's— I have 2 properties that have kind of caught me, and both of them were like without you involved.

Thanks.

So, um, and then one of them, like, she— I, I showed her and I was like, no, it's gonna work, you know, one of those things. And then now I'm like, dang, why did I do that? So I've learned my lesson on that. And then the other one, um, it's gonna work out in the end, but it's You know, working with a new team, I would say that you were like, eh, I probably wouldn't. And then I was like, no, it should be fine. And then now I'm regretting it.

So don't you believe, and I'm a firm believer in this, is like, I can tell you, no, I can tell you, don't do this. I can tell you, read this. I can tell you all this, but the most experience you're gonna gain is by not listening to me and going out and making these mistakes, right?

Yeah.

And then you won't make them again, hopefully.

No, yeah, exactly.

Yeah. Well, now it's almost like, you know, you're gonna experience this with your child, okay?

Okay.

It's like, yeah, you know, they're walking around, you tell them, don't walk that way, don't walk that way. Look what happened, you walked that way, right? You know? Yeah, it's got— you just have to let them go.

I know, you know. Yeah, yeah. No, it, it, it changed my whole, uh, being, you know? So yeah, now, now I'm like, anything that Joe's like, eh, I'm not going for it. So, okay, that's, that's my new 2026.

So that's good. Okay.

So it brought me back to that. So that could be good. Um, okay. Uh, we got another one from the DMs. My uncle wants to fund my first flip, yet my aunt is already picking out expensive tiles for the backsplash. Do you recommend working with family?

I do, but this is a big lesson that I've learned. Family and friends, you have to be very careful. The only deal that I ever lost money on was with a friend, a very, very close friend, and it was a flip that we were doing. It was during the height of the market 20 years ago, so we were on the downturn of that market. Um, he was a cabinetmaker and he wanted to make all the cabinets, the kitchens and bathrooms and all that stuff. The problem was it took him 6 months to do this. And if you're in the flipping game, you just can't wait. I mean, this was hard money that we were using and we were getting eaten like $6,000 a month on this, you know? So it took us like 10 months to sell this property. So all, all the profit was gone and In fact, we ended up putting in some of our money to close this transaction. 'Cause I told him, I said, I'm not gonna hold onto this anymore. And I've never, never been the plan B type of guy. 'Cause I hear that all the time. Well, Joe, you know, teach me how to flip. And if we don't do good on the first one, then I can just always rent it out. And I go, well, that's a plan B. I don't do plan Bs. I mean, we'll get you in a deal, but we're gonna make money, you know? 'Cause if not, then we're not gonna get in that deal, right? That's like, why would I do that?

Yeah.

Yeah, that's, that's what happened. And then after that, I basically tell people that I work with, I'm in charge. Okay. And I will make the decisions at the end of the day. I will let you, you know, give your input or whatever, and I will teach you how to do this. But when all your money is at risk, then fine. I will back, back off and let you make whatever mistakes you're going to make. But, Yeah, I'm in charge.

Yeah. Yeah. I, I totally concur. Um, there was a flip that, well, that we just did a flip for Lauren's aunt. Mm-hmm. And, you know, I was kind of like, how's this gonna go? Because she's gonna pick everything out and we have to stay within her very, very, very, very tight budget. Mm-hmm. And, you know, sometimes things just add up and she wanted to add a bunch of stuff. It went relatively well. And I think we were over maybe by $5,000. But yeah, you definitely feel the stress of— it's like an extra layer rather than it's just— if you're just doing it for yourself, it's an extra layer of having someone who's not normally a part of the process—

Yeah.

Giving opinions and things like that. So it really goes back to what you just said. Until someone has their butt on the line and they're the ones forking out the monthly Hard money loan, that, that completely changes your outlook.

Completely.

You know, you're like, we need to finish this like now.

Yeah, exactly. Completely.

We need to finish it now. Yeah, I want to put this in, but like, let's just finish it, sell it, make the profit, move on.

Yeah.

And then get better on the next one.

Absolutely.

But, uh, yeah, that's a tough one. You know, it's a tough one. You, you, you're gonna have to just decide, is your aunt or your uncle— yeah, what do they really like as people? And you already know. Deep down in your gut, you already know. So that's, uh, that's a case-by-case basis. Um, okay. Um, let's see here. We got another one. Um, hmm. Okay. Joe, this one was to Joe specifically. Joe, you've been doing creative finance since before Google existed. Yeah. What's a strategy from the old school that still works in 2023?

Creative financing has been around forever. My first deal was creative financing. That type of creative financing you can do a couple of ways. You can do assumable loans where the bank actually knows that you're taking over the responsibility for the loan, or you can do subject-to, what's called subject-to, where the bank doesn't know what you're doing. Hopefully they never find out.

Mm-hmm.

But there's still ways to purchase properties with creative financing. And, you know, we try to, I mean, that's one of the questions that we ask when we're looking for properties, you know, do you need all this money that you're getting back? You know, they're like, I'm 70 years old or whatever. And you're talking to this 70-year-old guy and he says, well, yeah, I don't need it, but I just don't want the headache of owning this property anymore. Okay, well, have you ever thought of creative financing? You know, how about seller financing? How about if we pay you 10%, and you loan us seller financing on the rest of it. And depending on your exit strategy, you know, that's great because, you know, I'm telling them we're going to flip it, we're going to be out of here in 6 to 8 months, and you get all your money at that point in time. But this just makes it a little bit easier for us because we don't have to come up with that money. And, you know, there are people out there that'll do really no money down. You know, 'cause they're, they're still out there.

Yeah.

And then, you know, maybe you're buying it for yourself to live in and you want, you know, 30-year fixed, but you want, you know, to be fair with everybody and you say, okay, well, how about we do this loan for 5 or 7 years or 10 years, which gives you a great amount of time to figure out, okay, what's going on with Jerome Powell, too late. And maybe when they start lowering interest rates, you know, then you refinance out of it and pay this 70-year-old man off.

Yeah, perfect.

Yeah, there's a lot of ways. You recently got a check from a creative financing deal that you thought you weren't gonna get.

I know.

Yeah.

Yeah.

I haven't billed you for my translation services yet.

Yeah, I was always like, Joe, what is she saying? I know I need to learn Spanish.

She's saying, She don't have money to pay you.

Yeah, pretty much.

And then surprise, surprise, she paid you the whole thing. That was like, to me, it was a shocker. I didn't expect that.

Maybe she was, you know, doing the negotiating, like sort of tactic, like, well, what happens if I don't pay?

Yeah. Yeah. And then, you know, I'm so nice, you know, you don't pay, we're gonna evict you.

Okay.

We're gonna take over the property. We're gonna sell it again to somebody else. Okay.

Yeah, that's an option. Yeah, but yeah, she, uh, she came up with it.

Awesome.

All's fair.

That was a good deal, right?

That was a good deal.

It's a good deal.

Yeah, it was a— it was one of the first ones where I think I overpaid for it, but in the end it worked out.

Yeah, so time has, uh, you know, ability to right all wrongs.

Yeah.

You know, especially in this type of market. Obviously in 2008, that wasn't the case.

Yeah, yeah, you had to hold it for a long time for it to right that wrong.

Yeah, but too long, too long, too long.

Um, okay, I got another one here and I can take this one. There's a fixer in my neighborhood. How would you approach the owner? And it's really quite simple. Um, if the person is living there, you can literally just walk up to their door and knock on it and say, hey, You know, I live down the street. I buy properties all the time. Have you ever thought about selling now or in the near future? Pretty simple. For whatever reason, if it's vacant, you can leave a note, or you can do what's called skip tracing, where you take the address, put it into PropStream or whatever software you like to use, or even True People Search, and find their phone number, and then just start calling them, texting them. And asking them if they want to sell. It's pretty, it's pretty straightforward.

I, I can't tell you how many times I did that, and it works, you know. And I've knocked and I've left, you know, business cards, and they call me like literally a month or two later. Are you still interested in buying this? You know, I'm ready now. You know, I'm gonna lose it tomorrow at the bank.

Yeah, yeah, really? Yeah. And that's— yeah, if they're, if they're on a timeline of a foreclosure That definitely helps, helps out your, your case. Yeah. Um, okay, I got one here. Here's a good one. What's the worst real estate advice you've ever heard that people still repeat today?

Yeah, do you have an answer? Um, let's give it to you. Real estate advice?

Yeah, what are people out there saying? And you know what? I think more people— I think there's less people saying dumb things right now, but when the market's going crazy and everyone's a rock star, yeah, that's when, you know, the gurus—

I mean, I've heard mostly from older people, Joe, I don't need to file my taxes anymore because like I'm old. I don't make enough money. It's like, that's not true. Uh, everybody needs to file their taxes every year. Even if you don't make any money, you need to file your taxes. Okay. Because it could come back to haunt you. Probably won't, but it can come back to haunt you. Yeah. Um, what else?

Mine would be, I'm just gonna manage this property myself.

Yeah. Yours would be that. You, you did not take my management Education to heart because you have a heart.

Yeah.

It's the problem.

Oh, actually, you'd be very proud of me. Um, I had to tell someone to turn their feelings off recently. Um, there was a property that we are double closing on, it's this one, and there were liens on the property. And then I would— I was like, well, just go back to the seller, tell them that they need to pay for all these liens. It was like $10,000. And the guy that I'm doing the deal with was like, well, I kind of like feel bad for them. I mean, what, like— Oh my God. And I was like, don't, don't, you're fine. Just go back. And he went to them and she's like, oh, that's fine. Yeah, we'll, we'll, you know, take it out of our side.

Of course.

And then he came back to me. He was like, yeah, but I still feel bad. And so I was like, well, what do you wanna do?

Just give 'em a basket gift once you close. Okay. It's like, whatever.

I was like, you can take it outta your side.

Yeah. Yeah. Send, send 'em some flowers or something if you feel that bad. At the end of the day.

Yeah, yeah, because she didn't care at all that. She was like, no, that's fine. I mean, yeah, take it out of my side.

I mean, well, of course she should have said that, you know, it's her responsibility. She had the problem, right? It's not yours.

Yeah. And then I got off the phone, I was like, wow, okay, now I'm like becoming more like Joe. Thank you. So it is rubbing off on me. Thank you. All that to say, it is rubbing off on me. So, okay, yeah, that's, uh, that's good. But yeah, um, I guess the worst real estate advice. Yeah, it's hard because, you know, in real estate there's so many ways to make money. So it's like, even if you are kind of a screw-up, chances are you'll do all right.

Mhm.

But yeah, I don't think people are getting mad at Pace for the Morby method of buying No equity properties and basically being underwater day one. They're kind of getting mad at him for that.

They should, you know, like, okay, I understand Pace and I understand what he's doing. And if you can get into a property with no money down, then what's the problem? The problem is if you overpay and it starts going down, which sounds like what's happening, that's the problem. Yeah. Well, yeah, I bought this property. I didn't put any money down, but it's worth less. Yeah. Well, what good is that? You know, unless you have a long-term horizon, you're going to hold on to that property forever. Yeah. That's a different story.

Yeah. And he's kind of getting some flack because, well, he's just teaching brand new people to wholesale subject tos to anybody, really. Yeah. And people are like, we're not doing that anymore because I wholesaled this sub to, to somebody and they just stop paying, right? So now the seller is calling me like, hey, nobody's making my mortgage payment.

Yeah. And then you're just— yeah, sorry, seller, I sold that. Yeah, it's like, okay, well, you can have that conversation. Yeah, I do not want to have that conversation.

No. So yeah, a lot of people are just like, I'm staying away from that because, yeah, unless you know the person and you know that they're trustworthy. But how many people is that in the world?

None. Pretty much none.

Pretty, pretty much. Uh, we got a really good one here. Why do realtors advertise on grocery carts and bus stops?

That's so funny. My cousin is a broker and he advertises on billboards as well, but he also advertises on bus benches. And one day my wife and I were driving in the city that he advertises on and somebody had painted a big giant mustache and a beard on him and stuff. We took a picture and Sent it to him. He goes, oh yeah, that happens all the time. Yeah. Uh, apparently it works.

Okay.

He gets a lot of calls from, from that type of advertising. And again, that's literally old-fashioned advertising, but sometimes old-fashioned advertising works, you know, for example, like, and I keep telling you, it's like, uh, I don't do mailers. Okay. But if you do mailers to a 55+ community, That's probably a good idea because why? Because they're old and they have something to do when they get the mail. They open it up and they actually read it because, you know, they're able to read.

Right.

You know, not like this coming generation.

Yeah.

But we won't say anything about that. But anyways, those tend to work for you, right?

Yeah.

Because they actually open it up. Where, you know, if you mailed it to my house, it's like, whoop, there goes the trash can. I don't even open them.

No, that's why you got to try and be eye-catching.

Yeah. Even that yellow letters and special writing and the Auto Pen. Use the Auto Pen.

Oh yeah. Auto Pen's good.

Use the Auto Pen. Yeah. That'll get you deals.

You got a lot of people out of prison.

Did. Yeah. Yes.

So it works.

It did.

Okay. Yeah. But yeah. Oh, I was gonna say on that note, I found some subcontractors just from them having their number on their trucks. Yeah. You know, sometimes I used to be like, why do people do that? And then I, you know, like a landscaper or something. I'm like, hold on. Yeah. That guy's like local.

Cheap advertising. You know, it's mobile and everything else. Yeah.

So it works. Yeah, it works. Um, okay. We got But does 2026 look promising? Any insights, predictions?

You're going to have to come to the meetup. Okay.

December 29th.

December 29th in Noe Woods in Irvine. You need to come to the meetup and I will tell you what my predictions are. You can't miss them. They're actually, I can tell you this, they're going to be really good predictions.

Okay. There we go. I will say, and shocker, I'm optimistic about next year. That's a shock.

Yeah. Wow.

I am optimistic about 2026. I've got my son coming, firstborn son. So then all the pressure will be on me to provide.

Yeah, I can't, I can't wait when you decide to buy your first house and you're sitting in front of the lender and the lender goes, yeah, this is not gonna cut it. Maybe if you throw your firstborn son into the deal, That'll work.

Yeah, yeah. And it may come to that, and there we go, I'll have some leverage. Yeah, so that'll be nice. Um, what is— what was the biggest mistake made on a deal and how did you resolve it?

I kind of went over that.

Oh yeah, you did. Yeah, the cabinets, the custom cabinets.

Yeah. And then after that, very, very good friend, but I just had to take control after that with everybody. Yeah, you know. It's like, this is what I'm gonna do. It's my way. And then I will teach you all this. And then if you want to fly out of the nest and do your own things and make your own mistakes, that's on you.

That's on you.

It's on you.

That's fine. Yeah. I would say for me it was, um, not vetting a contractor. Classic, classic flip. Didn't vet a contractor. Did I tell you?

Yeah. Okay.

Yeah. Yeah. Joe told me. Yeah. Um, yeah. Didn't vet them thoroughly, I would say. Yeah. At all. Yeah, really at all. I was just the guy that was like, yeah, I can do it for this price. Oh yeah, I can do it for sure. Yeah. Then I realized these contractors say they can do everything all the time. Yeah, they can. So I stopped believing that. Yeah.

Um, was there another question on there?

Uh, oh yeah. Um, Lauren Barnett Real Estate says aloha, no questions yet. She's just chiming in.

All right, Lauren, I haven't seen you in like months.

I know, she wanted to come in today, but—

She did?

Yeah.

And you didn't let her?

No, her, uh, back started hurting.

Oh, bummer.

Yeah, she's gonna be walking around like that soon.

I'd say I know how that feels, but I don't. Yeah, we don't.

I don't.

Yeah, we don't. I feel for you though. Yeah, I do. We do feel bad.

Yeah, we do feel bad. Um, oh, here's one for me. Alex, will you raise your kid to work in real estate?

Oh, good question.

Yep, good question. I will.

Because you had a career before this.

I did.

So maybe you should let everybody know what that was and what happened and what got you involved in real estate.

Yeah, so I used to jangle guitar for a living. I was in a full-time touring band with my lovely wife and best friends, and we would go around to different venues and we would play our music for money and tips. And, uh, 2020 hit and they shut down live music, and that's what really freaked me out because I didn't think that was ever going to happen. And so I was like, okay, let me figure out a more traditional way of possibly making an income. And so I looked just on YouTube. I think it was some guy had a thing that was like the top 10 books you need to read about money. And Rich Dad Poor Dad was in there. So I was like, oh yeah, people have always said to read this sort of thing. And so I finally did. And I was like, real estate's the way. That's it. Is that easy? And so I, you know, they in there, it's like find a local mentor. And so Joe had his meetup. And I found him on BiggerPockets. And yeah, he said, come to my meetup, which was virtual. And, um, I just sat there and was scared. And then he finally called me out. I said, I want to learn how to find properties.

I could tell you were scared.

I was scared. I didn't know what anything was.

Look, there's a deer in the headlights there, you know?

I was like, I didn't know what an escrow was. I didn't know what anything was. I was very, very scared.

Yeah, it showed.

Yeah. So yeah, then Joe said, yeah, come down here in this very office. And I will teach you how to do it. And oh, actually, I gotta hit this guy up. He the guy that I met that day. I forget his name now, but I think he's he's been flipping properties since then, and he just reached back out to me. He was like, "Hey, I think I met you at Joe's," and it was like from 2020, our last like correspondence. Wow!

Yeah, I don't know.

I don't know what he's doing now, but yeah, time flies. But yes, my son will live the exact same life that I have. lived except better. So he's gonna have to become classically trained in all instruments and also know how to flip properties and do deals. So it's really simple. Okay, this should be really easy.

Okay, okay. I, I hope I'm around long enough to see all this.

He's like, no, Dad, I want to be a doctor. I'm like, not in this family. I want to help people.

Yes.

We don't, we don't help people. We don't help people except if they're in mobile homes. Oh boy. Yeah, it'll be interesting. It'll be really interesting. I have all these thoughts about what I want to do, but, uh, we'll see. We'll see how it goes.

We'll see.

Everybody, like, whenever I tell anyone that's already a parent of something that I want to do, they're like, Yeah.

Okay. All right. Come back to us when it's happening. Okay. Yeah. We'll give you some advice.

So that's the answer. Um, okay. We got one for Joe here. Joe, if you lost everything today, what would you do tomorrow?

Make it back a lot easier. Uh, what, you know, and I've talked to lots of millionaires and I think that's the number one thing they say is, you know, I've gone through You know, ups and downs, and I've made lots of money. I've lost lots of money. And the first time's the hardest. Uh, second or third time is just way easier because, because you know what you're doing, you know. And, and I've— the other question I have people ask me is like, if you weren't flipping in California, let's say we transplanted you to Texas, could you survive there? And I go, yeah, that's easy. That's not a problem. Just need to get to know the neighborhood. the people, the type of deals that they're doing, you know, network with contractors, do all the same things that I do here, just in a different location. And I'd obviously, I'd have to educate myself to that location. Once that's done, it's like, man, the rest of it's easy. Yeah.

We should do that. Have you seen Undercover Billionaire?

No.

They basically, billionaire, they drop 'em in some like podunk town with, I think, just a cell phone and a car.

Mm-hmm. Maybe.

And they're like, you gotta—

Can I take my Cybertruck?

Yeah, you take the Cybertruck and your cell phone. Yeah, drop you off in the middle of nowhere where you don't know where anything is. Okay. And then you gotta go from there, try to make a million dollars in—

wow, 6 months. Wow, that would be interesting. Yeah, you know. Yeah, it's kind of cool. That'd be interesting.

I think Grant Cardone was on the first episode, but I haven't— or the first season, but I didn't see that one. I saw like some other guy. Yeah, yeah, he goes to like the local business center of the town and like starts a business up or something.

Huh.

I don't know, but I could see you doing that for sure. Yeah, you'd start a meetup. Yeah, start a meetup. You're like, who's got deals? Who's got money? Yeah, let's put this together.

Yeah, but I'd have to charge for my knowledge. I don't charge anything right now.

Yeah, you have to charge.

I'd have to charge so I can get some income so that I could survive off of that, live off of that, right? Yeah, yeah, there you go.

Maybe we'll do that season 5.

Season 5.

Um, okay, we got about 5 more minutes till Joe's jumping on his, uh, he's got a very important call coming up, uh, that we can't miss. So let's do one more here. Oh, okay, let's do a rapid fire.

Yes.

Okay, so yeah, we're gonna do— no, I'm gonna say the question and then we'll go 1, 2, 3, and then we'll both say our answers.

Okay.

Okay, worst— then this is in a flip— worst smell you've ever encountered. 1, 2, 3. Dead cat.

Joe, you're quick. There is so many different smells that I've smelled. I'm gonna say death. Okay. Yeah.

Yeah. All right. Yeah, definitely the death is on there. Okay. Number 2, co-living or tenants with 17 dogs? You gotta choose one. 1, 2, 3.

Co-living.

All right. Um, number 3, hardest part of creative finance, the math or explaining it to your spouse? 1, 2, 3. Expanding it to the spouse.

Yes.

Okay.

And the seller.

And the seller. Okay. Would you rather deal with appraisers, HOA, or city permitting? 1, 2, 3. Appraisers.

Appraisers.

Yeah. Okay. Mobile home parks, underrated gold mines, or emotional roller coasters? 1, 2, 3.

Gold mines.

There we go. Okay. And then the last one, we can just say craziest seller excuse you've ever heard for not signing paperwork.

I'm drunk.

Yeah.

I'm drunk.

For sure.

I'm drunk. Yeah.

That was a good one.

And that was the one that, uh, you made like, what, $150,000 on?

Yeah.

Or more?

Yeah, something like that.

Yeah.

I'm not allowed to tell people how much.

No? Okay. Okay. Yeah, but that was half.

That was half.

Yeah, because you split the other half with my son.

I know. Yeah, yeah, that was a good—

That was a good one. That was a very good deal.

We're gonna, we're gonna get some more of those. Oh, oh, we got, we got one last one here. Okay. Explain sub-to in a nutshell.

And who asked that?

That was Rizel.

Rizel.

Yeah. Thanks for chiming in. Okay. Sub-to in a nutshell. Okay. So you have the deed. That's one part of a transaction. You have the deed and then you have the mortgage.

Make it simple.

Oh, okay. I've already— okay. Yeah. Sub-2 is taking over someone else's loan.

Okay.

You are making the payments. Okay. On behalf of the seller.

Okay. So put a dollar amount to this scenario here.

So $100,000 is what is the mortgage. Okay. The seller owes $95,000.

Okay.

And you go, hey, you don't have a lot of equity. What if I just make those payments for you? And then you can move on.

Yeah, give them $5,000, give them $5,000 for their equity, and then you take over the responsibility of making those mortgage payments. And notice I said responsibility. You're not assuming it, you're just taking over the responsibility of that. Okay, and yes, there is paperwork involved, and yes, it is legal, and yes, it's recorded. Okay. You don't have to record it, but I would suggest you do record it. Okay. So yes. So that, that's like a really, I mean—

Basic.

Why didn't you use like $1 million? I don't know. You're like making $100,000. $1 million and a $900,000 loan.

Right.

Okay. Which means that there's equity of $100,000. And if it were me, I'd say, well, yeah, you know, I'll give you $950,000 for this, which means I only have to come up with $50,000 and assume Not assume, sorry. Take over that first loan subject to. Okay. Take over the responsibility.

And your name is on the deed.

And my name's on the deed, but not on the mortgage note. Right. Okay. Yeah.

The seller's name still remains on there. Yeah. And it's a really powerful tool to not have to qualify per se with lenders, traditional lender, to go out and get the bank loan to buy that property. So you can imagine How much you can scale with that if you can find those sellers in those certain situations.

Yes.

And we've had some sellers that said, I'll literally, I will give you my house right now if you take over these payments.

Yes.

Sometimes it's such a burden on them and people can't even fathom why would somebody just let somebody take over their mortgage? It's a burden. It's a payment they have to make every month. Could be a second house.

Could be people living in there giving them problems. Yeah.

And so what you can do is you can then, you could take it over as your primary or put a renter in there. And that's how you kind of test the feasibility is, hey, can I get the rents that will cover this mortgage payment? And then get me that cash flow. That sweet, sweet cash flow. Wow, you guys. Thank you so much for these questions. We didn't get to all of them. We're gonna have to do some more of these. I think this was a big hit today. We had a lot of people tuning in and, um, uh, yeah. So, oh, I think, oh, Evan. Yeah. Evan Mitchell. Yeah. Okay. So that's that, that, thank you, Evan, for that last question to wrap everything up. We're gonna do some more of these, you guys, but, um, let's get you guys jumping in the chat or They can DM us these questions and we can save them for the show or we'll answer them and then we'll compile them and bring them. Because I think a lot of other people have these questions and it helps other people learn, which—

That's the name of the game.

That's the name of the game.

That's what we're here for, dude.

Yeah.

To teach.

That's absolutely right. So thank you guys for tuning in. We'll be here next week, same time, Thursdays, 4:00 PM. So if you have any new or experienced investors in your life, Please share this with them. It's on Joe's channel and make sure to subscribe to his channel. He's got a lot of great content coming up here in the next few months. And if you're local, we'll see you on December 29th at the meetup.

Yeah. And if you are interested in being a guest on our podcast, please let us know. Go to my website and on my Calendly account, I have the New and Experienced Investor. Just click on there, pick a day on Thursday at 4 o'clock. We are live and in person. So you have to be local and come and tell us your story. We love to hear stories.

Okay, I think for, um, season 4 we're gonna be doing some out of, out of, uh, out of area. Yeah, out of area guests.

So we're up in the game.

Yeah, we're up in the game. So stay tuned for that. That way we can bring you bigger guests and, you know, just more experts and people that don't necessarily live local to us. So we're expanding.

One giant long question. We're expanding. Okay, um, because I, I've got like 5 minutes, but—

Okay, we got 5 minutes. Evan has a follow-up question. Um, can you wholesale these? I kind of feel iffy about that, but I like the fact that sub-2 can help out those with low equity. Next episode, if that's a question I got.

Yeah, we were actually talking about that, uh, when we were off camera in the green room.

That's right. Yeah.

We were in the green room. Uh, you can, but that's not something that I would recommend because If the person that you end up selling this deal to stops making the payment to the mortgage company, you're going to hear back from the original seller. Hey, what's going on? How come you're not making a payment? And then what are you going to do? You're going to say, well, I sold that to somebody else. Well, that's not right. Well, you know, I sold it to you. I didn't tell you you could sell it to somebody else. Well, that's what subject-to is all about because you can, you can actually keep doing it if you want. But you, you know, you really want to make sure that this other person is actually going to continue to make the payment and they're trustworthy. And if not, then honestly, I don't want to get those type of calls. So I don't recommend it.

Yeah. Yeah. That's a safe bet. Unless you personally know the person. I don't know.

Yeah. Yeah. Maybe they're your brother-in-law or something.

Yeah.

Yeah. Which could be a red flag right there.

That's true. Nobody trusts their brother-in-law. No. But awesome. Yeah. No, these are great questions. Uh, please come next week, join us, and if you have anything else, we'll get you then.

We'll see you then.

All right, see you guys.

Yeah, thanks. If you want some more advice on real estate investing, reach out to us one-on-one.