The Land Geek Podcast #14

Welcome to the Land Geek Podcast, your resource for information and tips to making money by buying and selling land. Let the Land Geek show you how to make a passive income by working smart, not working hard. Learn strategies and tricks to make money buying and selling raw land today. And here is the man that's gonna help you do that. The Land Geek.

Hey, it's Mark Podolski, the land geek@thelandgeek.com and today I am honored. Privileged. I am super excited because I have the CEO and co founder and the host of the Real wealth show, Kathy Bettke. And Kathy, if you're not familiar with her, is an active real estate investor, licensed realtor, certified coach and former mortgage broker. Basically, let's just call her real estate genius. And she specializes in helping people build multimillion dollar real estate portfolios through creative finance and planning. And Kathy, thanks so much for taking the time. I know you've been on cnn, cnbc, npr, cbs, Market Watch, Wall Street Journal, but now you're on the Lane Geek Podcast, which I think trumps all of them.

Absolutely. So glad to be here.

Thanks so much. So you're the CEO and co founder of the Real Wealth Network.

Yes.

Tell me about the Real Wealth Network.

Well, I started this about 10 years ago when I was personally desperate to figure out how to build wealth. My husband, who is an extreme athlete and jumps off of lots of tall things and surfs things and climbs, he's always doing something dangerous. And you know, I never thought I would be told that his life was threatened by a freckle and not by all the other things he did. Basically he was told he had melanoma and the doctor thought he had six months to live.

Wow, that's. Yeah, that's scary.

It was terrifying. I actually didn't believe it. I couldn't, I couldn't allow myself to believe it. But what I did have to figure out was how to take over the finances because he had, he'd been on the treadmill and he was a motivational speaker out traveling all the time, writing, motivating people, coaching business owners. And he needed, he actually thought maybe the doctor could be right and wanted to live those six months without working. Of course.

Right.

Yeah. So I had to figure out how to take over. And we had a 4,000 square foot home. You know, we had a large mortgage payment and a pretty big lifestyle. And I had been a stay at home mom and kind of forgot how to make money. So I had to figure it out.

Wow. Okay, so tell me, why real estate? I mean, there's lots of different ways to make money. You could have bought a business, an ongoing concern, stocks, bonds, real, you know, or commodities, whatever. So what drew you to, to real estate?

Well, at the time, I was like you. I had a radio show that I enjoyed doing on the side. It wasn't anything that made me any money, but I liked doing it. And, you know, because my husband was a business coach, he was, you know, one of the things he would say is develop your strengths, you know, work with your strengths. And since I loved radio, I thought, oh, I'll use this platform to find out how you make money, you know, and how could I do that? Well, I'll interview people who have it and maybe they can tell me how they did it. And so I did millionaire after millionaire after millionaire on my radio show, really for personal reasons. And of course, my audience loved it too, because they wanted to know how these people made their money. And it always came back to real estate on some level, whether they, whether these people had had a business or invested in real estate, at the end of the day, they took their money and put it into real estate of some form. So I just saw the connection and thought, well, I better learn how to do. And so. And one of the sponsors of my show, one of the ways I learned to make money was to get sponsors for my show. And one was a real estate investor, and he taught, you know, he taught me and my audience how to get started.

No kidding. That's amazing. So I specialize in land. What's your niche? Or do you have a niche? Or are you just kind of, you know.

You know, we are, I would say, opportunistic, because if, you know, real estate goes in cycles, I think everybody knows that now, right?

Yeah, yeah.

It goes up, it goes down, and then it goes up again. And so I learned quickly to. I'll tell you, this is what I learned from my show to listen to experts. And, you know, I've been a real estate expert now for maybe 14 years, but that's only one down cycle, actually two now. But, you know, I want to learn from people who've been through three or four and have been doing real estate for 30 or 40 years. So that's really what I've done, is surrounded myself with, with experts who've been around many seasons, many downturns, many up cycles, and know how to win. And we bring those people into our network. Our network's now grown to over 14,000 members worldwide who really want to learn from these experts and don't want to make mistakes. Unfortunately, the media is usually way off. By the time they give a headline, you know, it's too late. Whether it's a bubble or it's time to buy. Too many people listen to the general media and they're too late.

Yeah, yeah. I mean, yeah, it's always that way. If you're reading about it, you're three months too late. Six months too late is the deal. So you live in Malibu.

Yes.

Which really angers me. It's like 110 here today. So you say real wealth. What's your definition of wealth? Because it means something to every, you know, it means something different. Everyone else like, yeah, you know, you know, your members like, okay, I want, I want wealth.

Yeah.

What does that mean?

I just, I can't emphasize enough how important the definition of that is. We say real wealth is having the time and the money to live life on your terms.

Okay. Yeah, because you told me your husband right now is paddle boarding. He is in the Pacific.

Yeah, yeah. You know, it's, we're, we're in, we got a little place on our favorite surf spot in Malibu and he, he's out there now. I, I will be after this radio interview.

Yeah, so I just kind of envision your life like you meet Mel Gibson for coffee and then you guys all go to the beach and, you know, maybe you'll meet another movie star and you know, have fun.

We surf with a lot of celebrities. It's pretty fun. We don't, we don't really know who they are. We have to ask them and they think that's funny because we don'. Watch a lot of tv.

That's great. They probably love that.

They do.

That's fantastic. So, okay, so what, what is your, like, you know, so you got into real estate? Walk me through one year deals.

Oh, sure. Well, you know, first and foremost, we really want our members of the network. And membership is free. You just go to realwealthnetwork.com and join. It's free. But we want our members to be educated and we want to be a force in the US that is showing people how to do it right. Because I truly believe that part of the last downturn was too many people jumping in and not knowing what the heck they were doing and driving prices up. And that's happening again today. It's real dangerous out there. People are doing dumb things again and they're going to pay the price in a few years. So we want to be the force saying, hey, you guys, this is a major decision. Just because you can get a loan and put 20% down, down, and it doesn't feel like a lot of money. Maybe you are taking on that loan and you need to take it seriously. It's a big deal. And so we go through step by step educating people. But of course, one of the things that we really encourage for new people, besides first getting educated, and our website's full of free education to help you get on your way. But we say start with some of these. There's still some really good single family home properties, properties that can rent, that, you know, the rental income can bring 12 to 14% return annualized after all expenses.

And yeah, I mean, that's great. And then you've got your, your capital gains at the end of the day with price appreciation, which hopefully will continue.

Absolutely.

So how do you see the current market right now? Because we've seen a big run up. I mean, Phoenix is up 30%.

Yeah. You know, Phoenix is a market that I'm concerned about because you have, I'm telling you, I travel all over the world and I'm on radio internationally and on tv. And the question that is always asked is, you know, should I buy in Phoenix? So you have people from all over the world who know two cities in the U.S. las Vegas and Phoenix, and that's where they're buying.

Right.

So you know that I think it's fantastic if you got in early, you've seen a run up in pricing, there's going to be. If you're holding for long term, we believe that rents will come down because of the competition of so many investors coming in and buying rental property. So be aware of that. Don't expect rents to continue to climb. They may stabilize and even drop and there could be another bubble depending on what kind of crazy things people do. I have a real simple solution for that, and that is generally lenders will, you know, will only allow the debt, debt to income ratios to be between 35 and 40%. So we say if a property is more than two to three times the income, you're probably paying too much.

Okay, that makes a lot of sense.

Yeah.

And right now, I mean, you're just telling me about a deal. Tell everybody about this deal you're working on in Tahoe. This is incredible.

This is really, I mean, first and foremost, we like to see people get into rental property and get nice returns. If people, if people can get up to 10 homes, you know, and they can finance 10 homes with any conventional lender, you know, you can get to a point where you can maybe leave your day job and just be living off the rental income. So we help a lot of people do that.

But it's capped now at 10, right?

It's capped at 10. But we're starting to find commercial lenders who will do more.

Okay. Because I thought. Yeah, like was it Dodd Frank that changed it?

You know, I'm not sure. I just know that a lot of the banks have made that their guideline.

Okay, so. Okay, so it's a banking guideline. I thought it came from after the 2008 crash.

I don't know. I hope not.

I thought it was legislated, but yeah, that would be. There's always a way.

Private financing and there's always a way. I mean I've got some mentees that really this should be my mentors. I've got a 29 year old kid who is a, he's making way too much money for his own good. He's like 29 and he's in pharmaceutical sales and making a lot of money. But he came to us and I tell you that kid could be retired right now because he bought so much property and then did such a good job. He was able to borrow from family and friends and give them a really nice return. So he's really got unlimited access to financing and it's just building an empire.

And he's just getting great cash flow right now.

Oh, you know, just amazing. I mean we're, you know, we're finding properties in parts of the US where, where shale oil has been discovered and, and natural gas and we're buying properties in those areas for 50 to 60, maybe $70,000 at the most. Really nice neighborhoods and renting them out for 900 to 1100amonth, somet more. So you know, there's.

Yeah, I know exactly what you're talking about. That's great strategy, great, great deals out there.

But, but now we are. Like I said, I like to surround myself with experts who know a lot more than me. And so we've been working with a couple of developers who you know, are very well seasoned. They've built all kinds of stuff all around us, been in the business for 40 years and they're helping. It's so, it's so funny when you talk to them. They're helping the banks unload stuff that the banks just don't know what to do with. I mean most people know how to buy a sing home, most people don't know how to buy land like you're doing or buy resorts or you know, subdivisions that Went down, you know, went under during the downturn. But these guys know what to do with it. When they go to the banks and they walk through the commercial lending department, there are boxes in there that banks don't even know what's in it and believe it. Oh, they don't even know. So. So my developer partner I'm working with now, he saw this resort in Tahoe half finish, and he found out that the lender was B of A. So he went in, talked to the asset manager and said, hey, I want to buy this property. And the asset manager said, oh, I didn't even know we had it.

That's incredible.

So it turns out the former owner was a hedge fund that got into real estate and shouldn't have, didn't know much about it. Tried to build this luxury condo across the street from Heavenly. They put, put almost $40 million into it, went into bankruptcy after the downturn, and we just picked it up, tied it up for 2 million.

Unbelievable. And you're working with the developer and you're going to develop it. How big is that project going to be?

It's a big one. You know, we're going to get financing to complete it, but investors will get really nice returns. And, you know, we already, you know, we already are getting offers for age to $10 million as is, but we know that just for the land, just for. We tied it up for, we could walk away with 4 to 6 million now. But we actually believe we're going to see more like 50 million profit on that one.

Well, yeah, I mean, exactly how long from land acquisition to going vertical?

Typically, yeah, we're looking at. It's already vertical. That's the thing. The framework's already there. I mean, this is the exciting thing. It's already there. So we, we expect to get finished, you know, get started on the construction by the spring, you know, in about six months, or I should say about eight months from now, and have it complete within two years. But we, we expect to have it sold out right when we start construction because there's nothing for sale in that area and certainly nothing new.

Right. See, this is my definition of a real estate genius that's able to buy property, you know, distressed like that, tie it up for 2 million and have such instant equity, Kathy, plus that key equals real estate genius.

Okay, thank you.

That's our equation for today. That's really exciting. So if I go to Real wealth network or realwealthnetwork.com and I start getting involved and let's just say I Want to be a passive investor, and I want to make, what, 14%. How do you do that? I mean, what's the process?

Yeah, well, you know, it depends on how you want to define passive. So, you know, we definitely don't do the typical model that you see at real estate groups or these boot camps and stuff that, you know, tell you to go door to door and, you know, do this and put up signs and. No, we're not that kind of active investment group. We are definitely more passive, but there's different levels of passive passive. So, you know, the one, you know, some people just want to own property themselves. No. Partners collect rental income, whether it's commercial or apartment or single family, and have enough of that rental income coming in to never have to have a job again unless you want one. So we really help people. First of all, you know, we have a full Academy. It's only $47 a month to. To join the Real Wealth Investor Academy. Where we. We go from step one, how read an inspection report, how to understand an appraisal, what to look for in your insurance documents, what to make sure is in your contract. I mean, really basic stuff, but the foundation that most people just don't understand.

And then, Yeah, I mean, $47 a month, I could go to another, you know, boot camp and pay $20,000 for the same information.

Yeah, we're trying to put those guys out of business.

Yeah, yeah, exactly. I'm surprised that, that, you know, you're not getting threatened by. I won't name names, but I've had.

People spend the 30 and 40 thousand dollars on those boot camps and come join our academy for $47 and want to cry like, wait, this is better information. We just, we don't. I went to one of those, and I was new and vulnerable. My husband, you know, was. His life was on the line. He's totally fine and healthy now. Like you said, he's out paddle boarding. But one of those groups try to take advantage of me in that vulnerable state. And that made me mad. And, you know, I came home and thought, you know, we can sign up for this boot camp and become millionaires. And, you know, only to find out that the information wasn't current or it wasn't really something useful. And so, yeah, ever since then, I said, no, we're going to get this information and make it free or very affordable.

Yeah, but you also teach us on your podcast, correct?

Yeah, we have, like I said, free podcasts like you and blogs and webinars. And we give so much information Away articles that get people started. And then finally, actually, our members were saying, you really ought to start charging for this. So we started an academy where we are charging, but again, keeping it affordable for everyone. And. And what we found is even people who don't have money, once they, you know, most of our clientele has. They have money and they're afraid to lose it.

So let's talk about your clientele. So who are your. Who are your people?

Our members, you know, I mean, generally, they're people who have worked their whole lives, have their money, and, you know, maybe they had it in a 401k or an IRA or they. They made some money in their house or whatever, but now they want to retire, and they do not want to lose their money. And they're afraid that if it's in the stock market, it's just too vulnerable. So, yeah, they want hard assets, and they don't trust the government, and they don't trust the debt this country's in. And they're, you know, so when they discover all the tax benefits of real estate and that it's a hard asset and they can be the sole owner and not have partners and not have asset managers, you know, skimming all the profits. And, you know, they just feel really like. Like I did when I discovered it, like, oh, I can do this. I can build my fortune. And again, when describing your fortune, what does that mean for me? I live in Malibu now, and I see people who live in mansions that only. Only the rest of the world could dream of. But you know what? As I've gotten to know a lot of these people, I found that they're not wealthy. They're not experiencing real wealth because they're. They're not able to enjoy their. They're owning what they own. They're never there.

They're never there.

They're not with their children. They're not with their family. Their relationships are terrible because they just don't have time. And that's not what we're working towards. I would rather help somebody. I have artists come to me and say, you know what? All I want to do is art. I just need $3,000 a month to pay my bills, and then I can just do art all day long. And I say, let's do it. That's real wealth. You can have $3,000 a month, passive income coming in. Of course you can. It's easy.

Yeah, yeah, that's. It's. It's so funny. It's just, you know, it's interesting how people make These choices for themselves and where, where they're going to be and it's, it's just, it's mind boggling. Like you want to play in the playground where you can make money. You don't want to think about, oh, well, I want to get that promotion to my job and make an extra $500 a month or get that 3% raise. So many people don't equate their, their life energy with money. Like you're trading life energy for money. If you're going to do that, that's great, but you might as well make as much money as possible. So invest it really well and learn. We'll learn what to do. And if you can make a passive income, why not? It just doesn't. I don't understand. What do you think?

Oh, it's so sad for me. I see. You know, I mean, actually right now my husband is taking one of our wealthy, or I should say rich friends out to paddleboard. And you know, this guy has not had a day off in years. You know, you'd go into their house and see all that they have and the fancy cars they drive and. But when you talk to him, he's exhausted, he's tired, all he does is work. He hasn't had any fun.

Yeah.

And, and so we'd rather say, why don't you work a little less, make a little less money and have a little more of a life.

Right.

And, or like you said, invest it properly, be smart.

Right.

So, yeah, that's what we're trying to teach people.

Yeah. I mean, it's, it's, it's great. It's a phenomenal resource. And so let me ask you this. If you're a newbie, what's, besides obviously getting the education, do you want to start in a certain niche? Obviously I want you to go into land. But what would you say would be, it would be a real easy way for a newbie. Let's say, you know, they're 50 years old and they've saved, you know, half a million dollars. They've got it in their ira and they wanted, they want that control that real estate kind of gives you. You know, I can pick my piece of property, I can see the path of development. I can run the numbers. I'm not, I'm not dependent on some third party, you know, managing this project. You know what I mean?

Yeah, absolutely. So 50,000 in a retirement fund, is that what you said?

Or no? 500,000.

500. Okay. I was gonna say I'm not gonna be able to do much.

500,000?

Yeah. Okay, so 500. I'll give you an example of what one person did or several people have done in that scenario. And this is not a well diversified portfolio, and I want to really make that clear right off the bat. But this is what this person chose because he felt comfortable after getting the education that we were able to provide. So he had about that much. And I showed him that in parts of Texas where there's tremendous job growth, and he chose Texas to focus on that, he could get 130,000 home that rented for about 1100 in a good neighborhood and you know, near jobs and so forth. So he ended up actually buying five homes. So, you know, 100,000 each, approximately. And was.

Did he leverage it or did he pay cash?

You know, he decided just to pay cash because it was all in his IRA and he was retiring and he just didn't trust the stock market at all. And so, you know, this was several years ago. Right. He sold right before the stock market market fell. So he was very proud of himself and got into these five homes and here we are five years later, those homes have gone up so much in value. He has got about a 10% return every year just on the cash flow loan after all expenses. So he decided to put it all in rental property that's very well managed. And we help people find those property managers and make sure that the assets being taken care of. So in that case, he was real happy he could get a loan if he wanted to on those five properties. He didn't. But some lenders will lend to your ira. And so if he wanted to, he could buy more, but he was just comfortable doing what he was doing. And that's. But like I said, I've got other people. I've got a guy who didn't have a lot of money but was able to get loans, conventional loans. This would be outside the ira.

And.

And so he was able to, through some of the contacts that we have, you can buy property for a lot lower than it will appraise for. So he would have say his friend's ira. He'd borrow from his friend's ira. So the friend's IRA would invest. It's not actually taking money out of the ira. The IRA would actually be a lender.

Okay.

Yeah. And let's say this guy was buying the property for 55,000, but it really rented for 75,000. So his friend would lend him that from his IRA, the 55,000. But then once it, after six months or a year of seasoning. He could go get conventional finance at the higher appraised value and pay off his friend, you know, refinance and pay off his friend. So he ended up buying 10 properties like that, where he'd buy them through private money, and the private money would put up most of the money because there was still about 20% equity in the property. Then in a year refinance, and he ended up purchasing 10 that way that are each cash flowing, about 300 bucks. He maybe put 20,000 of his own money in at the end of the day, but is cash flowing now about 30,000 a year.

So you really don't need. It's 30,000 a year. Wow. So he really doesn't need a tremendous amount of cash. It's being creative and finding those other sources correct.

You know, finding out whatever your strength is again, like leveraging your strength. So in his case, his credit was fantastic. So banks would be happy to lend to him. And I was able to show him how to. How to buy properties far below their appraised value, which then allowed him to refinance and get all his cash back and go do it again, you know, so that was his deal. So highly leveraged, but young. Young enough to be able to take that on. And. And then, like I said, another guy who was at retirement age didn't want to. Wanted hard assets, wanted to buy them below market value and get the high cash flow and just live off of that. We've have people who really like our group investments because they don't want to do anything. They don't even want to be a landlord. They don't want to deal with that. They'd rather do these kind of investments. Like I said, buying the resort, having a highly experienced developer oversee that and take care of it, and everybody makes it a really nice, really nice return.

Yeah. I've got about 10 friends out here that would be interested in your development because we all need to get out of the heat, go to Tahoe.

You know, I heard you guys had a really big heat wave a few weeks ago.

It's crazy. It's crazy. I spent a summer in Truckee with my family, and it was fantastic. A house over by Donner.

Oh, that's great.

You know what that is? Yeah, yeah, yeah.

Well, that's the way to do it. You just have to leave during the summer, right?

Yeah, exactly. Exactly.

Yeah.

All right. So I know I'm putting you on the spot, but we always talk about the podcast, you know, your. Your tip of the week. Like, it can be a Resource, a website. What's your tip of the week?

Okay, well, I mean, the first thing that came to me, and I know this isn't really a resource, but my husband just spoke at our last Real Wealth Investor Academy event and he just had everybody in the room take three really deep breaths. And as simple as that sounds, the energy shifted from frantic to completely grounded and calm. So that would be my tip for the week is breathe, Breathe.

I love that. I love that. You ever read the book Power of Now?

I haven't, but I've heard great things and it's on my list.

It's a great book. This guy is Eckhart Tolle. I think he even get an audiobook and he's got this weird accent and it's fantastic. But you know, what I got out of that book was not just, I think because he was talking about meditating and he was saying, you don't need to meditate. He's like, you just need to take one conscious breath. And that is so much better than meditating. And he's always saying, and I say this to my children, you know, they get frantic or they get stressed out. I said, what problem do you have at this moment? What problem do you have at this moment? Nobody has any problems at this moment, at this, right now, at this moment. So our minds are always kind of either projecting into the future.

Yeah.

Or thinking about what just happened in the past. Like I'm, you know, I'm really stressed out after this podcast. What did Kathy think of my podcast? But, you know, but at this moment there's, there's no, you know, there's no problems. When a problem arises, you'll deal with it at that moment, which I found very wise and kind of keeps me level headed.

And that breath can, can bring you to that present moment that, that, that reminds us, like you said, that, that there is no problem.

Right.

Yeah. So before, you know, before saying something to your spouse or to your children or your co workers that you might regret, just take that deep breath and calm down.

Yeah, I better call my wife after this. Take that deep breath.

Take that deep breath, honey.

Sorry I was short with you this morning with the kids, but I just spoke with Kathy Fetke at Real Wealth Network and I feel much better. Better. So I'll definitely do that. So obviously you're not, you're not going to plug your own site, so I will plug it for you. So thank you. Yeah, you're, you know, my tip of the week is, you know, obviously for $47 a month. Get the information you need. If you're interested in getting into real estate in a big way and get that knowledge, obviously I want you to go and start with land. But look, land's not for everybody. You always need to diversify your holdings and your assets. And obviously Kathy's onto something big and that's why she's living in Malibu and I'm living in Scottsdale. So I'm looking at her site right now. You can just get for free 7 steps for new Real Estate Investors. How to Start, where to Buy and what to Buy, which is a free guide on realwealthnetwork.com so and I'll have this in the show notes as well. Realwealthnetwork.com so Kathy, any anything else you want to close with?

Oh, I just want to say thank you so much for having me on and that, you know, if there was, this would be my $0.02 is that this is a good time to buy well positioned land. So you're definitely in the right place at the right time.

Thank you. Hey, listen, I really appreciate, appreciate you taking time out of your busy schedule to inform myself, my listeners about you and what you do. And look, there's 7 billion people in the world, but there's only one real estate genius that I know. And so that's, I feel very honored that you took the time to share that with me and in the podcast. I hope you'll do this again.

Oh, thank you. I'd love to.

Yeah. So I know you're busy and you're hard to get scheduled, but it'd be fantastic. So we'll have to do this again. And at the very least, like, let's just see what's going on with your project. Like let's do a follow up on that.

Oh, that'd be great. Love that.

So thank you so much. And everyone go to realwealthnetwork.com and also look, get my free passive income blueprint@thelandgeek.com subscribe to Coffee Talk and free YouTube videos. And look, buy some raw land. Frontierpropertiesusa.com don't be afraid. Kathy Fetke, Real Wealth Network Resource. Thank you so much. And this is Mark Podolski, the Land Gate, saying goodbye.

Thank you for listening to another episode of the Land Geek. Join us next time for more tips, secrets and information that will help you succeed. Stay connected with the Land Geek on facebook@facebook.com thelandgeek.