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Real Estate Investing School Podcast
147. A Couple's Journey for Financial Freedom through Real Estate with Jarrett and Bailey White
00:55:51
Welcome back to the Real Estate Investing School Podcast. In this episode, we interview Bailey and Jarrett White, Real Estate Investing School students who have taken massive action to shift their life through their experience and expertise. This...
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- [00:00]
A
Our lifestyle is so different. Our kids love that. Jared's home every day. We're outside all the time. We're spending so much time together as a family. And we might not technically, on paper be making as much money as we were when Jarrett had a full time job. Not yet, but our lifestyle, I wouldn't trade that for anything.
- [00:21]
B
Welcome to the Real Estate Investing School podcast. I'm your host, Joe Jensen. Today we've got two guests, actually, Bailey and Jarrett. They both started investing in real estate through house hacking. They've grown their business by using low to no money down strategies. Bailey recently became a licensed real estate agent. Jarrett recently became a licensed mortgage loan officer. Just the deadly duo right there. You guys got it all. They have experience in flipping the burst strategy, long and short term rentals, off market, direct to seller and on market strategies. Jared and Bailey are both very passionate, passionate about achieving financial freedom and helping others do the same. So, White, welcome to the show. Glad you guys can make it.
- [01:07]
C
Glad to be here.
- [01:08]
A
Yeah, super excited.
- [01:09]
C
Yeah, yeah.
- [01:11]
B
We've been wanting to do this for a while. I know you guys both originally were students in the school and now Bailey's actually a coach at the school. And you guys have got like your licenses and loan officers and agents. You've really come a long way in the past. What? I mean, you've been doing this for like four years or so.
- [01:30]
C
Yeah, this is year four.
- [01:32]
A
Yep. We bought our 2020.
- [01:35]
B
So awesome. So, so what kind of put it on the radar for you? Was it something that happened in 2020? Like, what made you like, oh, real estate is where it should be at, or was the seed kind of planted long before that?
- [01:45]
A
Yeah, I think, I think the biggest thing we had a professor in college. We met at Snow College in Ephraim, Utah, and this specific professor preached about financial freedom. And anyway, so long before we even met, we had both kind of like, had this passion for, like, okay, we're gonna be different, we're gonna do things differently so that we can have true financial freedom for our family. And so we've actually done quite a few things. We've bought a business and we've tried a few things to get here. And then in 2020, we, yeah, we decided to buy our first rental property. And that's been the only thing that we've stuck with.
- [02:24]
C
So it was interesting though, because it definitely started down the like, Dave Ramsey path of finances.
- [02:30]
B
Right?
- [02:30]
C
Like, no debt, pay everything with cash. And so it was interesting. But I think one of the big things too, that made Us like choose real estate over another path was we. After we got married, we lived in basement apartments and like we just realized how much we were paying towards mortgage, you know.
- [02:51]
B
Yeah.
- [02:52]
C
Thought it was a. Thought it was a really smart idea to do once we bought a house. And so that's what, that's what we ended up doing. I mean, we bought actually a non house hack first. We bought a townhouse, as much as we could afford at the time or we thought we could with the Dave Ramsey mindset, you know.
- [03:07]
B
Yeah.
- [03:08]
C
Then just we kind of like fixed it up and kind of did like a live and flip with it and bought our first house hack after that.
- [03:14]
B
Yeah. That's awesome. You know, it's funny, the whole Dave Ramsey thing. I actually, you know, my parents turned me on to him back in the day as well. And I remember like he had this like seven steps to being financially free and you know, like the debt snowball and do this and I remember like, you know, get your nest egg. And I remember writing those down and trying to live by those as well, you know. And I think it's actually not a bad foundation to start with for people. But again, I wish I had realized how to leverage debt for asset purchases as opposed to everything else. I mean, as soon as you just draw that one tiny little line, you know, it opens up the whole world. And 99 of what he says is fine on. On the other side of that line. But that one thing, man, it held me back a lot as well. As far as it comes with real estate, which obviously time is your, your friend or your foe in this game. You know, we all wish we had done more earlier, but. But that's awesome. So you guys got into it, you were entrepreneur minded, you wanted the freedom. That's kind of the motivation. And then real estate made sense. You bought a townhome, rolled it into a house hack, lived in a portion, rented out the other portion, I assume. And you know, you guys have built, you know, just in the past, what, four years or so, you. You've done like seven. Seven deals. Have those all been flips or burrs or how. What's the portfolio of long hold stuff look like now? And how many deals have you been through?
- [04:42]
C
Yeah, so we're counting like that first townhouse is kind of like a living flip. Right. We did a house hack after that. While we were in a house hack, we bought and flipped. So we did one flip down in Fairview, Utah, and then we did a burr in central in the town central down by you and so after that we bought into another house hack in Santa Quinn, and then we did another flip in Santa Quinn here locally. And tomorrow we're closing on another deal in pace, and that's going to be a pretty fun one. So it'll be like a flip, but it will also have. Have enough land that we're going to subdivide and be able to either build or develop on an empty lot there.
- [05:30]
B
Ooh, I like that. So, yeah, let's dive into that deal, if you don't mind, and maybe we can go back to one of your first. So this deal you're looking at, you're planning on buying it, flipping it, but then you're carving out a piece to retain that you can do other stuff with.
- [05:44]
C
Yeah, yeah. So basically it came out as a wholesale deal. A wholesaler sent it out. They were asking quite a bit for it, but it had the potential to be able to subdivide the back half of the lot. And after working with the wholesaler, we actually put it under contract for 65,000 less than they were asking originally.
- [06:07]
B
Really?
- [06:08]
C
Yeah. And so we bought it at a price where it makes sense for just the single family flip because there's still all the paperwork and the risk of the city turning us down. However, I've already met with the city once and everything looks like it. It will go pretty smooth. The city actually wants to do something with it and they're, they're like on our side. They're not going to be battling us, but. But just in case something happens, we have it where we'll at least be able to make some money off of the. The flip itself off the home. But then, you know, fingers crossed, we'll be able to make it happen and have like, basically a free lot to be able to go. And I think we'll have to request for and apply for a permit, but I think we'll be able to do two twin homes on it.
- [06:53]
B
That's so rad. I love the, I love the concept how you broke down. You're like, hey, this is our idea. We want to be able to like, build on it, do the, you know, a twin home or whatever, do these things. But if it doesn't work out, the asset works as is. Like, like, that's so good. I say the same thing with like, short term reels. Like, man, if it'll work as a long term, then yeah, go for it with the short term. But if short term doesn't work, you have that backup plan. It's kind of the same Thing too. Hey, if this works is just a normal flip, great. But if you can also carve out a piece and build on and do all these other things, that's just a bonus. And having options I think is one of the key things with securing a good real estate deal because you might pivot and a lot of times you have to. And the more options you have to pivot, the more likely you are to come out winning as opposed to. Opposed to having any issues.
- [07:45]
C
So totally. Yeah.
- [07:47]
A
One thing that I want to mention specifically about this deal, and Jarrett would never say this, but they actually had a cash offer for way more than what we were offering for. And Jarrett was humble enough to like talk to the wholesaler. They spent quite a bit of time on the phone working through the deal and wanting to learn from them. And essentially the wholesaler chose the our offer, which was significantly less than another cash offer they had just because of Jared's character and who he was. And so I think that just, I don't know that us being who we are and Jarrett being who he is has paid off for us in more ways than I can count, really.
- [08:27]
B
So what do you think it was about that? Because that's, you know, I've got friends too, but I'm not giving them forty thousand dollar discounts on anything. You know what I mean? So like, what do you think it was about the situation that the wholesalers saw that this relationship was worth kind of almost investing in and taking that kind of haircut.
- [08:46]
C
Yeah. So they still made money. They renegotiated. Right. So they were still able to take a profit. However, I asked him the same question because when they called me and they were like, hey, good news, like we're, you know, we're going to accept your offer. And I was like, wait, hold on.
- [09:04]
B
Because didn't you have a higher offer? Like, why would you do that?
- [09:08]
C
My response was, well, didn't you have somebody in at higher? And. And they were basically like, yeah, but after the time we spent with you and like yesterday, all the options we talked through, we just feel much more confident that you're going to be able to close and make the deal happen versus the other guy. It sounds like he might be a little bit like less, I wouldn't even say knowledgeable, but like understanding of the situation, willing to work something out, willing to make it happen. Like willing to like be creative and make it happen. Because the problem was is both of us were under asking. Right, Right. I called him and I said, hey, you know, this doesn't Work, right? And they're like, yeah, we. We already had it at a better price, but he had someone come in and offer more verbally, so we had to lock it up at a higher price than we wanted to. And I was like, okay, well, this is how I see it. Like, it's not fully subdivided, so there's a risk, Right. I can't buy it assuming the fact that I can subdivide it, because I don't know that I can.
- [10:09]
B
Right?
- [10:09]
C
There's. There's a small risk there, and if I buy it where it doesn't make sense for this house, I'm upside down as soon as the city tells me no for some reason. Yeah. And so they were, like, totally understanding. They, you know, we talked a bunch of times on the phone. I called the city a bunch of times, told them what we'd talked about with the city, and basically was like, okay, here's my offer. Like, all cash. If I go come in with cash or hard money, right? This is what my offer is. But if we can find a creative way to structure it, I could probably do more. And so I suggested, like, is there a way it's going through foreclosure? So I was like, is there a way we can go catch up the loan and I can take over the existing payments for six months instead of me going getting hard money on this because it's saving me hard money, cost points, you know, interest rate. And so I kind of gave them more options that would allow me to give them a better offer than I was. And at first, she was like, oh, I don't know if we could do that. But then she called me back about five minutes later, and she's like, hey, my acquisition agent is on the phone. Can we. Can I merge a phone call? And can we talk about, like, a creative structure? I was like, yeah.
- [11:19]
B
Were you pitching that to the wholesaler or to the actual seller?
- [11:23]
C
To the wholesaler.
- [11:24]
B
Cool.
- [11:24]
C
Yeah. And so then we talked for another hour on the phone about, like, different ways we could structure it to make it happen, where I could offer a higher offer and basically agreed on, like, a cash price offer and then a creative offer. And they went back and renegotiated with the seller, and the seller chose to go with the cash offer that was lower. So you're like, yeah, yeah. I was like, okay, either one works for me. So I think it was just the fact that I was like, instead of just submitting my offer and being like, hey, your deal doesn't work. I have to go below Your asking price. I was, I was like, pointing out to them, like, hey, here's why I see it doesn't make sense. Like, can I help you figure out a way to make this make sense for both of us? And I think that built a quick relationship with them where they probably trusted me a little bit more to be able to go and bat. Bat for me towards the seller and get the lower price. So I don't know.
- [12:25]
B
I love that. No, I think there's so much to be said for, like, confidence to complete, you know, like, as a real estate agent, you know, I'm sure Bailey knows this too. It's like, I've seen like, the best agents. They, like, they get very detailed with me to like, hey, like, how are we going to make sure that we can go through with this? Like, they, they don't want to bring their clients, buyers that are going to fall through, because that reflects on that agent. That, oh man, he brings guys, he gets stuff on a contract, they always back out. But if it's like, oh, that agent, if he brings you a buyer, like, they close every time, like. And agents can learn how to make sure that their clients are ready to actually close. And so it works on the agent side. But wholesalers too, the last thing they want to do is especially the whole service. They've only got this thing tied up maybe 30 days, contract, whatever, to be able to resell. And if they lose half that time with somebody who backs out, you know, that's a bad place. So they, it's very valuable to be that they have confidence that you'll be able to complete the, the transaction. You know, that's, that's more valuable than an extra 10, $20,000 because it's, it's real, it's tangible, and that, that's vital. That's cool. Yeah. So, I mean, you guys kind of have this double duo thing going on where you, you can be the loan officer and the real estate agent and buying it. Now, I know if an agent is also a loan officer, they can't do. They can't be both on the same transaction. But can you guys, since you're not the same person or, or because you're married, they won't allow it either.
- [13:57]
C
I'm not sure. We haven't ever done one.
- [13:59]
B
So we gotta, I want you, you gotta find that. Be all three. You need to be the buyer, the agent, the loan officer, all of it. Yeah, that would be the, the trifecta. That would be great. That's cool. So you guys tell us A little bit. I mean, so growing up, I mean, are you guys, Were you guys exposed to this a lot or a lot of people in your world in this. Is this kind of newer for you guys? Like, what, what's. What was that kind of story like?
- [14:30]
C
Yeah, I don't think that it's definitely, we are the odd ones out. Like, we are the black sheep. Yeah. Yeah, there's. I, I don't know. It's just, it's I, I nobody. I grew up in a small town down in Utah. It's called Gunnison. And so I knew some people that were successful, but in my head, like, success was like a hundred thousand dollars a year. Having a super your whole life, you know?
- [15:00]
B
Yeah. You're like, that's great. That's amazing. Like, people can have that. Cool.
- [15:06]
C
Yeah.
- [15:06]
A
We thought that if we can make a hundred thousand bucks a year, that we were set. Like, that was our, that was our goal. And yeah, that was more money than his parents were making, more money than my parents were making. Like, that was it. And we hit that goal within being, like after we were married for what, a year?
- [15:25]
C
I don't know. It didn't take us long, but, but it definitely. We realized that it wasn't, it wasn't the dream that we thought it was. So, you know, we just started reading. I started doing listen to a lot of podcasts because at the time I was doing construction management and had a lot of drive time, so a lot of podcasts, audiobooks, started listening and learning to, to see what people were doing. Right. And like Bailey said, like, we ventured off and bought a little business at one point in time, and it kind of went upside down. We lost some money on it and real estate was just kind of like where we both like, had a passion to be. And we just saw it so favorable in so many ways, so we just decided that was our route.
- [16:11]
A
Yeah. Even still, when we first bought our townhouse, we were like, we did 5% down. It was a 15 year mortgage at like a 2.5% interest rate or something. And, and both of our parents were like, are you sure this is a good idea? Like, are you sure you want to do this? And I'm like, I don't know. Are we sure? You know, and we, as soon as we trusted ourselves more and gained more confidence, like, it's okay that we're different. And now four years later, our family is finally coming around and being like, oh, maybe Jer and Bailey, we're onto something.
- [16:44]
C
Yeah, yeah, yeah.
- [16:46]
B
I love that. I think there's something to be said about what I call changing your stars. I don't know if you guys have ever seen the movie A Knight's Tale. Heath Ledger, back in the day. Anyway, he's like this, like, he. He's this kid. He's like, just like a peasant or whatever. You know, this. Back in, like, knights and princesses or whatever, he's just like this peasant kid, but he, like, pretends that he's a knight. When he grows up, he, like, I don't know, steals a suit of armor or something. I haven't seen it in a long time, but basically he pretends that he's this knight and he gets all this prestige and, like, fame, starts doing all these cool stuff and. And eventually I think they officially actually make him a knight or something. But there's a scene where it's like a flashback, and his dad's there, and they're, like, watching the knights, and they're these poor peasants, and he's like, son, he's like, you can. You can change your stars. Like, you don't have to be what we are. You can be that somehow. And I always think of that where it's like, I almost get emotional thinking back, because I came from the same world. Like, I didn't know what success was. I never seen freedom like that. I just, you know, like. And my dad was actually doing a lot more than I realized, but I was just a kid, not really seeing it. Just grew up even smaller than Gunnison. I grew up in Garrison, which no one's even ever heard of that one. And, yeah, you know, just middle of nowhere. And so, like, you come from this world where you just have, like, you don't even know what to dream of. And so when you can start breaking those other barriers, you know, like. And the first one was, oh, you guys made good money and had this job, and now you're able to discover entrepreneurship and break into the financial freedom. And it's so funny because once you're on this side of it, it seems like it was a given, but along the journey, it was like, who knew that would ever be there? And then it's like, where's it going to be in 10 years from now? You know what I mean? It's just so cool to see what's been done, you know? And I've. You know, there's some people just are born and bred in a successful life, and they have all the resources and the connections and. And I'm sure they have their own journey of having to, like, Live up to that. You know what I mean? I don't know. That was never a thing in my world. But, you know, seeing people who have just, like, changed their stars and redirected everything, been the black sheep and the odd ones out doing that is. Is something super inspirational to me.
- [18:57]
C
Yeah, I definitely don't think we've made it yet. I still feel like we're in the trenches, for sure. I wouldn't say that we've changed the stars completely, but we're definitely, hopefully on the. On the path to do so. Right.
- [19:10]
B
For sure.
- [19:11]
C
That's just the way it feels sometimes. I think it, like. But if at the same time I say that and if I were to look at where we're at today, four.
- [19:19]
B
Years ago, like, that's what I was gonna say. You go talk to Bailey and Jarrett from five or 10 years ago, and they'd probably be singing a different story. They'd be like, you're doing what?
- [19:29]
C
Yeah, no, for sure. I. I agree with that. But it definitely still feels like we're in the trenches and trying to. Trying to find a good, solid way. Way out.
- [19:39]
A
I would say, though, like, with the entrepreneurial mindset, that's a really solid sign that we're going to continue to be successful is, like, never quite hitting that benchmark of, like, oh, we've made it. We've made it. Like, continually working and setting that bar higher and higher like, that, to me, says, like, we're going far.
- [19:58]
B
You know what I mean? And there's something about. I talk about this potential of just trajectory, you know, it's not even so much about where you're at, but it's like, what's your trajectory? And that's what gives you, like, the confidence and, like, peace of mind to keep moving forward, is when your trajectory is going downhill, even if you're in a really good place, that can get really depressing really fast, you know? And you see billionaires jumping out of buildings, and they lose their portfolio, and they're probably still really, really well off compared to the average person. But the trajectory is just. Just. It can be too much for some people, and. And it's cool. Like, you guys are right in the thick of it. You know what I mean? Like, you've been doing these deals. You. You've done a lot more than a lot of people, but a lot less than others. And you're.
- [20:38]
C
You're.
- [20:39]
B
As you say, you're still getting out of there. And. And it's like, man, but the trajectory, like, you have a tool. You Have a vehicle to be able to do it. You've got the experience, and every time it's more and more and more that you're adding to it. And it's just so cool to kind of like be witnessing it live like this. Like, literally, you're like, on the call and you're like, oh, we've got this twin home deal. We're like, under contract closing on this week. And it's just like, you know, you're doing it right now, which is super exciting. I wanted to ask you about that. So when it comes to, like, subdividing and parceling land, like, a lot of people hear that or think about that, but they don't really know what that means or how to even check if it's possible or, you know, but maybe you could dive into how you're able to recognize that and what things people should look at if they wanted to try to duplicate that on their own deal somewhere.
- [21:31]
C
Yeah. So on this one, it was pretty straightforward. I definitely don't claim to be, like, on the development side. I would love to learn more. And this is going to be, like, a good deal for me to, like, get my feet wet on, but this is pretty easy. Even the wholesaler recognized it early on, like, and that's how it kind of went out, was like, hey, this has the potential to have a separate lot.
- [21:53]
B
And.
- [21:54]
C
And one of the big factors was the fact that it had three frontage roads. So it's on like a corner, but it has three sides of the property, have frontage road. So that's one of your biggest requirements to be able to have a lot is the linear feet of street frontage, to be able to subdivide. Right. So all I did was I called the city a couple times, talked to them. After I had it under contract, I went in, met with the development, the plan sitting planning and development, and talk to them, talk them through what I wanted to do and what options there were available. And basically they just kind of said, like, here's the. Here's the way to do it. We're actually really hopeful that something happens with this property because it's a mess and I think everybody in the neighborhood hates it. And so they were like, let's, you know, let's make this as easy as possible. Basically, I have to do an application for the subdivision to create the new parcel. Have to go and get it surveyed, submit some engineering plans to the city, get them approved, make sure that, you know, things work with the public utilities, and then I can separate the parcel. But they also mentioned to me, and this wasn't me pushing it, they actually brought it up to me. They said, you can also request a permit to do a residential multifamily overlay to see if we can put multifamily in that, on that lot and turn it into either duplexes or a duplex or a set of twin homes. And so I was like, okay, what does that look like? And they're like, oh, it's a. Pay an application fee. And you submit this application, and it goes to city council, and city council makes the decision. But just one block down, a couple year. I think a year back, they decided to do that with a. With a lot that was in a similar situation. So they were like, we're pretty sure that if you submitted a plan to the city, you've got a 95% chance of that being approved. So that's. It was kind of pretty basic. The city, like, really walked me through the process. They gave me all the paperwork. They said, this is how you have to do it. And so after we close tomorrow, all I'm going to do is just request the meetings that I need to have and walk in with the application paperwork and, you know, pay the fees that they're asking me to pay. And then it just kind of takes time. It goes through the city process. You know, a city council meeting. I may have to go to a city council meeting, and, you know, that they'll have their little vote for the neighborhood or whatever. And I mean, should be pretty easy. I mean, right now, at least until a neighbor complains or doesn't want something to happen. Right? But the city definitely, in this situation, is very willing to work with me and the law and. And turn it into something much prettier than it is now.
- [24:47]
B
So that's cool. I think. I think that's one of the most underrated education tools, is going in and talking to the city. Like, they really will teach you so much. And so many people are, like, afraid to do that. Like, they're afraid to call in or just feels weird because you've never done it. And, you know, you're like, you don't even know what department to talk to, and you look like an idiot, and you're just like, hey, can I. I need to talk to somebody about this thing. You don't know the right terminology to use. And. And it can be less. I don't know, kind of intimidating because you just feel dumb. But, man, it's such a good education tool because they'll, like, I said, they'll just break it down for you. They don't care. They're like, yeah, this is how it works. It's surprising me how much I've been able to learn just by calling in and asking about those same. Same thing with agents and with loan officers. Like, for anybody listening, that's newer. It's like, just call your lender and ask them all the questions. Like, don't worry about feeling dumb. Same thing with your agent, same thing with the city. Anything you're unsure of, just call in at, look dumb, not know how to phrase in. The next time, you'll be a little more confident and a little more confident, a little more knowledgeable. But I think that's a super underrated, educational tool of just calling the city.
- [26:00]
C
And I think even over. Over exaggerating that a little bit, like, not trying to be, like, not trying to walk in and be a. Know it all. Like, oh, I know that's what I used to do. Right? But now I kind of go in and I'm like, all right, I'm just gonna, like, put it on the table. I have no idea what I'm doing. Can you walk me through how to do this? Even though I may know, like, step one or step two, I may not know step three, four, and five, but, like, for them to be. For them to hear someone say that, for some reason, it, like, takes them from, like this, like, proud. I'm gonna tell you, you're wrong to, like, oh, yeah, let me take your hand and walk you through this. I can help you. Like, as soon as you ask for help, people are so willing to help. But if you walk in and you're, like, telling somebody that you know better, they're not helping.
- [26:46]
A
Right.
- [26:46]
B
They're like, really got a little bit of ego there and a little, you know, pride check. And they probably do get used, you know, a lot of time, these city officials and people that work for the city. You know, sometimes they do get, you know, maybe disrespected or walked on a little bit. And so when someone actually comes down humbly asking for help, it's like, we all like to help people. No one likes to be told what to do, but most people genuinely love to be able to help someone.
- [27:10]
C
Yeah.
- [27:10]
B
You know what I mean? So if you go in and give them that opportunity, it's just a huge win, win. And then the big thing, I love how you said, like, if your goals and the city's goals are aligned, that's a lot better than going fighting against the system. And trying to get something done that they don't want done. Like, man, that, that's awesome. And, and I had a friend that they were doing a kind of a project like this where they had to get some things voted and, and stuff like that. Like, you say the neighbors and everybody has to vote on these things. But. And then they even talk about, like, but you can't just vote. No, they can't. The city can't just shoot it down for no reason. They can't just say, okay, we're not going to allow it just because we don't want to. There has to be legitimate concerns that are. That are. That matter. So even if some neighbor is upset about it, if he doesn't have something big enough to back it up for, then. Then you're going to come through and you'll be. You'll win anyway, you know, Especially if you got the city on your side. Because they can't just say no for no reason. They have to have a legitimate cause behind it.
- [28:13]
C
Yeah. And the city even kind of explained that to me as well, was like, hey, the chance that because of the way that this is laid out, the chance that this gets turned down is really low just because, like, it's gonna meet all of the requirements. And so really we can't just tell you no as long as it meets those requirements. They basically.
- [28:35]
B
Exactly.
- [28:37]
C
That's why we feel pretty good about it being able to be done is because they've already given us the, like, it looks like it's gonna happen, and it looks like there's no way, real way we could tell you no. So.
- [28:47]
B
And a key thing that I love that you did with the purchase, though, is you. You didn't buy it as if it had already been subdivided, though, because that hasn't been done. And it is a risk. You know, it's like if, if. And I love. People are always saying, oh, well, this is way below rents. You could raise the rent. This is like, cool. Well, I'm gonna buy it as existing rents because that's what is existing. I'm gonna buy it as is where it's not subdivided because it's not, you know, and it's like, that's so key. A lot of times people like, oh, they're going to try to buy this potential and they try to sell. Especially wholesalers love trying to sell potential. I'm like, no, no, no, I'm going to buy reality. You're going to sell reality, and then I'm going to earn the potential by doing the work of actually getting it there, because it's not there yet. And I love how you made sure to structure it that way where the numbers work, even if it doesn't work out that way and you're not paying a huge premium for this hope of something that's not 100% right.
- [29:45]
C
Well, it's kind of the same logic. I remember learning, like talking to our coach and learning, like, you have to have two exit strategies, right? Like in all of your deals, it's smart to have a second exit strategy just in case. Kind of like what you said with short term rentals, right? Like, it doesn't work as a short term rental. It's got to work as a long term rental. Or you've got to be able to flip it and make money, right? Like, this is basically the second exit strategy is like, I had to buy it with the ability to flip it just in case it can't be subdivided. And. And it's got to make sense on paper that way, because if not, like you said, if I go buy the potential, like, I could be upside down real quick if something were to go wrong and then. And then what? You know, like, at all. So.
- [30:31]
B
So, Tom, I want to ask you guys. So I know Jarrett, you're. You're a loan officer. Bailey, you're a real estate agent. What was kind of your motivation, Bailey, in getting your license and getting, you know, more vertically integrated in the real estate space? What was kind of some of the reasons you wanted to do that?
- [30:50]
A
Yeah, honestly, my biggest motivation was we've worked with a new agent every time we've either sold one of our flips or bought something on the mls. Like, it's been so hard to find somebody who understands us and what we want to do. And so my number one motivation was I want access to the MLS so that I can pull really amazing comps when we're buying deals. That, to me, in and of itself is worth having my license for, just because I couldn't find an agent who would do that for me. And then obviously, because I'm an investor minded person, being able to help other investors and if I can put myself out there as, hey, I'm not just gonna go show you houses, like, let's run the numbers and let's walk through this, I think that is really valuable. I don't think there's a ton of agents out there that have that same mindset.
- [31:42]
B
Yeah, I mean, it's just. It's amazing how many agents don't know anything about the investing side, you know, What I mean, and they could be an amazing agent. Like, I had an agent in Hawaii, and he was like, the. I'll just. Jason Cary. I'll throw his name out there. Great agent. Like, the most professional, like, on top of it, like, this dude, like, made me step up my game. Like, he is incredible, you know, but when it came to, like, all the details of, like, cash flow and creative finance, I'm like, oh, could they do a subject, too? Like, he's like, what? He did not know that world the way I did especially. But, man, he was, like, the best agent I've ever had in any state across the country. Like, he was so good. But, yeah, having investor. Not just investor friendly, because there's, like, some agents who don't even want to work with investors because they're a pain in the butt, right? We're all like, get everything under contract. Don't buy half of it. Right. And, you know, so there's investor friendly, but there's an investor knowledgeable, who's actually an investor who knows how to run the numbers and knows how to do that. And I think that is a huge value add. But it sounds like you wanted to be able to make sure that things were being done right, and so you kind of, like, stepped in to do it yourself.
- [32:51]
A
Yeah, for sure. Even if the only business I do is our own, deals like that, to me, will be worth it. And I just see a huge upside in being able to help other people in the way that we haven't been able to find professional help yet. That makes sense.
- [33:05]
B
Yeah. That's awesome. And then same question with you, Jarrett. Like, what. What made you want to move into the loan officer realm as opposed to just focusing on, you know, flips and burs and, you know, whatnot?
- [33:18]
C
Yeah, I actually didn't plan on it at all. And so last year, like I said, I was in construction management last year, I had changed companies after we'd moved, and they weren't doing so well. We're kind of closing, like, closing up shop and basically laid me off.
- [33:42]
A
He got fired. Yeah, he definitely got fired.
- [33:44]
C
Whatever.
- [33:45]
A
We can use the F word. It's fine.
- [33:48]
C
Yeah, the. The boss in me didn't see eye to eye. He didn't have a whole lot of construction experience. And so it heads a little bit. And that played a part of it as well. But either way. So the day after I got let go, we actually were closing on a deal, and so we closed on it, and I just went. I just did the whole flip myself. Like, instead of hiring Contractors. I just did all the work and we just flipped it. And it took me, you know, like, I think we had it sold in four months. Took me probably three months to do all the rehab, and it was sold by the fourth month and closed. So. But in after I had done. After, I kind of was wrapping up the rehab and, like, doing it myself. Somebody I'd met in Brody's mastermind, he was starting a new business where basically they were going and marketing to reverse mortgages, and they were door knocking reverse mortgages. Marketing to reverse mortgages. And he was telling me about, like, hey, this, this should be, like, pretty good, right? Like, you can get your mortgage license, you can do all your own loans, you can do loans for other people. And then there's this, like. And so I just kind of was like, all right, let's see. Let's see what happens. So I got it. Not necessarily thinking of myself, which that's what it's turned into now is like. Like, I've been working with investors and people that are buying their first homes that have seen, like, me post something on social media, and they want to be able to buy their first home or are interested in, like, an investment property. But it definitely didn't start out that way. So, yeah, I don't know. That's kind of how I got into it. It's been. It's been a benefit. I've learned a lot myself now, even, like, I thought I knew a lot about financing and how to. How to properly get financing and how all the lending side worked, but I definitely know a lot more now, holding the license and being a part of it for the last few months. So it's been good.
- [35:49]
B
That's awesome. Yeah, I think there's something to be said about. I always, like, encourage people if they're wanting to get into real estate, but they're, like, not ready to, like, they still need a job and they still want that income, you know, as well and whatnot. I'm like, I think it's such a powerful tool to get a job within real estate. Like, go work for a property management company. Go work for a wholesaler. Go work as a loan officer. Go work as a real estate agent. I've been taking the real estate agent course just to learn the content. I'm just like, man, there's just so many little nuances about, especially contracts and stuff. I think that contracts are so interesting and deeds and titles and how it's held, and there's all these little pieces. Like, man, if you really understand it it's really powerful, but it's like, yeah, if you can go be in that world, then you're just gonna have such an upper hand, you know, that that knowledge will carry over into the investing side. It's not wasted. You know what I mean? If you're gonna go get a new job. I remember when I was first diving into it, I was like, thinking of getting different jobs after I stopped doing sales and I looked like software company or doing these different things. And I was like, I don't wanna go learn a bunch of stuff that has no application to what I'm doing. And there can be a place for that, especially if you're already killing it in your job. Like, yeah, just make that money poured into real estate. But if somebody's like, looking for something new, it's like, get something that will help you with it, you know, where it's all almost like you're like I said, I'm vertically integrated. You're the agent, you're the loan officer, you're the flipper. You're doing it all almost in house within your family. And that's a really powerful tool that. I mean, I just foresee, even in the future, it just being even more and more powerful, where you're like the one stop shop, go to the White House, and it's like, like, you're. You're taking care of, you know.
- [37:35]
C
Yeah. And the cool thing is, too, is like, I think in my head, when I, When I started becoming a loan officer, like, I was like, I can't just go back to having a job. Right? Like, but it's so different. Like, it's a commission base. Like, there's no office hours. Like, if you bring a loan in or if you, like an agent, if you bring a client in, like, you get paid. If you don't, you don't. Right. Like, it's not like what my job was where I was, you know, waking up early there all hours of all. Every day. And. And like, whether I was being super productive or not that day, like, I still had to be there, right?
- [38:13]
B
Yeah.
- [38:13]
C
So it's totally different too. Like, just those limited mindsets, right? Like, it's okay to have a job as long as it provides you the freedom and financials that you need in your situation. And so that's kind of what we realize is, like, hey, it's okay. Like, we're still in real estate. That's our. That's our big play, right? And these are just like tool. Tools to the tool belt to help us, like, make Things happen easier.
- [38:38]
B
So yeah, and I think about this concept of knowledge acquisition. It's like, yeah, we talk about acquiring assets like properties and stuff, but what knowledge are you acquiring? And yeah, that, that's something that every day, every deal you do, every client you guys help, you're getting. Knowledge acquisition of how loans work better and how purchases work better. Like it's all just adding repertoire for you to, that'll just, at the end of the day, it'll help you build your portfolio, you know, and, and it's so cool to be able to have that. I, it amazed me how much of my time and learning when I was first starting was figuring out how loans work, like talking to agents and like, what are my options, what are my. And that's the big thing is what are the options? Because if you don't know options exist, it's really easy to just be like, oh, I guess I can't do it because I didn't know there was 40 different options out there. I only knew these two ways and they don't work. So I guess I'm dumb. But then I kept more, I kept looking. It's like, wait, there's more options. How does that option work though? How does that option work though? Because I'm not gonna have confidence to go buy something, get under contract if I don't know how these options works. And so, man, I just found myself talking to lenders so much and even to this day, still there's so many nuances and things keep changing and it's like there's so much powerful information and really understanding the debt leverage side of real estate, which, you know, loan officers obviously understand more than almost anybody else, especially with the new policies and rules and programs that come out, it's like being able to jump on that is so powerful. So anyway, it's cool that you're a loan officer that understands real estate investing because again, just like a lot of agents don't know anything about investing, a lot of loan officers don't know anything about investing. They can help you get a conventional loan and good job and you know, but they don't know anything about house hacking and getting creative or most don't know anything about creative finance, you know, and, and so it's cool that you guys have like all the different sides to it. I love that.
- [40:39]
C
Yeah, we're excited. We think it'll be good. Just like you said, it's just long term play. Like it'll, it'll be good for us to, you know, see more transactions, whether they're ours or somebody else's will be able to help and be a part of it and just get to know more of everything.
- [40:54]
B
Yeah.
- [40:55]
A
And I think the biggest piece too is our lifestyle is so different and our kids love that. Jared's home every day. They think he makes better waffles than I do. Now, like, we're outside all the time. We're spending so much time together as a family. And we might not technically on paper be making as much money as we were when Jarrett had a full time job. Not yet. We're going to make more money than that this year, but it doesn't feel like it. We don't feel like we're living high, but our lifestyle, I wouldn't trade that for anything. This has been the most valuable fun time. You know, it's been so great.
- [41:33]
B
I think there's so much to be said about that, like, say, and those are some of the biggest impacts, you know, because somebody might go from making X amount to X amount, but if their lifestyle doesn't shift at all, it's like they don't really feel the power. But that first moves where you go from like nine to five to, oh, I'm in charge of my own schedule now. I can be with my family. Those are some of the biggest changes that, that are honestly sometimes not that far off. And that's what people think, oh, I need to go make millions before I can get there. Like, no, you can have some of the most powerful, impactful changes right away that actually affects your lifestyle. Which isn't that really the whole point of all of this? So I really love that you mentioned that.
- [42:11]
C
Yeah, I think it's definitely like, just to go on what you're saying. It's definitely like a limited mindset. Like, people think you have to have a million bucks. Like last year, we actually had the goal. Last year was our first year. We joined Brody's mastermind. And one of our goals at the beginning of the year was that I was to quit my job by the end of the year. Me getting laid off or fired worked pretty well because I got a severance package and it, like, got it done extra capital. Instead of me having to go in and, like, give up all my PTO and vacation time and whatnot. But like, after that happening and now that I'm over the, like, scary first few weeks, few months of, like, what that looks like, you realize that, like, you have the time to go and figure out how and where you can make some money to get by, right? Yeah. You don't have the time to do that when you're in a nine to five. And so you. It's scary. Like, you don't see how you could figure it out. But then, like, once you're out of that and you have the freedom and time and you can control your own schedule, like you said, like, you figure out ways to get by. Like, if there are side jobs, like, I'm finishing somebody's basement as well, like on the side, on the weekends, I go and help somebody that wanted to finish their basement. You know, like loans. She's an agent now. Like, commissions that way. There's so many ways now that we'll be able to make money that aren't only our direct real estate deals, but don't require the time that a normal job requires. And so, like, yeah, seeing that, like, it just makes us want to go share it with everybody and, like, get everybody to the same. To the same place where, like, we all can just enjoy this. As much as we say we have freedom, I don't think we have, like, the full level of freedom that some people do, but it's still so much more than we used to have, right?
- [43:58]
B
100%. It's such a abundance mindset, you know, it's not like, oh, I figured this out. I don't want anybody to know. It's like, well, everybody could do this. Like, there's no reason why we can't all be enjoying, you know, some piece of this and some level of this. And I love that. Just kind of that camaraderie within the real estate community, where it's just like, people are so willing to just help and share. And I'm like, why? Why do people, like, you know, care so much? Like, like, it's just crazy how much people want to help people in this. In this space, especially coming from the sales world is very much more like, cutthroat and like, protect the house and cover your own. But, you know, but in the real estate world, it's like, people seem very, very open and willing to help out, which is just so cool. But I have this phrase I've been thinking about recently was like, people worship that, which saved them. And that could. We could go off on a lot of tandems on that concept, but. But I see with real estate, so many people like, hey, this saved them. It like, gave them freedom, it gave them wealth. It gave them whatever. It's like. And when you truly love something or worship something that saved you, it's like you want to tell the whole world about it. You Know what I mean? And. And that's. That's what I think when I. When I think about real estate. But anyway, you guys are so awesome. I'm excited for the journey you guys have already made, the journey you're currently making, where it's gonna go. Appreciate you guys carving out some time to. To tell us a little bit about it and open up your story so that others can see, you know, what. What's possible for them.
- [45:32]
C
Yeah, totally.
- [45:33]
A
Yeah, it's been great. Thanks for jamming with us.
- [45:35]
B
Yeah, absolutely. I want to go through a couple of our final four questions before we let you go. And. And then we can. We can move on. But. But question number one, and you guys can answer these as a team or individually as well. That's okay. What's your dream deal or deal you'd hope to be able to tackle someday?
- [45:57]
A
I would say my dream deal. Ever since Jarrett was involved in, like, building large, multifamily, like, with his job, I would love to take down, like, a 200 unit apartment complex. That is my dream. Whether we build it from ground up or whether we rehab it and add value there. That's. That would be my dream.
- [46:18]
B
That would be awesome. Cool. I love it. Jarrett, you on with that or you got your own?
- [46:22]
C
I mean, I think it's interesting. Like, that's definitely been her dream deal for a long time. She talks about that all the time. Like, that's a lot harder of a step. Once again, I have some limited mindsets that, you know, like, she sees right past, but it's interesting. So, like, Brody teaches, and he didn't necessarily make it up, but he teaches it the top 10. Right. And so, like, since I started really doing that, like last year, I had, like, I kind of broke through one of my limited mindsets. There was a question that he asked at the mastermind or him and one of the other guys was like, hey, I need to go make a hundred thousand dollars like this week. How do I go do that?
- [46:59]
B
Right?
- [47:00]
C
So I started writing down on my top 10, like a deal that nets $100,000. Find a deal that makes a hundred thousand dollars. And crazy enough, like, I mean, I don't know if it's like, cliche to say, but, like, this. This deal that we have under contract right now could easily net us $100,000.
- [47:22]
B
That's so rad.
- [47:24]
C
And so I think it's just like. I mean, I wouldn't say it's like my ultimate dream deal, but it's definitely been a goal of mine for the Last eight months, and now I've got something that I'm closing on tomorrow that is. I could potentially be it. Right? And so, yeah, definitely gonna be it.
- [47:44]
B
I love that. No, I love that, you know, you got the big potential of someday dreams. You got, like, the current dream, and I'm kind of like that, too. Someone's like, hey, this is my current dream. I want to check that one off, and then I can think about the next one. That's why it's good to have a team, so you can have eyes on both. I love it. All right, what's been one of the most pivotal books you guys have ever read?
- [48:07]
C
That's a good one. Let's talk about that. Bailey.
- [48:10]
A
I don't read books. That's my downfall.
- [48:13]
B
Okay. Or podcasts or conversations, wherever you get your information, reads books.
- [48:19]
C
It's just the books that aren't. They're the fantasy books. Harry Potter.
- [48:25]
B
Does Harry Potter inspire you?
- [48:27]
C
Yeah, that's that kind of realm of stuff. But, yeah, I don't know. I. I really liked so, you know, Rich Dad, Poor ads, a really good one that helps you, like, break through some limiting mindsets. Another one that's really been impactful for me is, like, Extreme Ownership Jocko. Yeah, I really liked that one. I've read it a couple times. Yeah. But I don't know that there's been one that has been like, this is the book that changed my life. I would say that, like, collectively, they've all been able to, like, build something, some knowledge base in me or, like, some belief in me that. That I could go do this together. Right.
- [49:11]
B
That's cool. Yeah. Yeah, I love that. So before we go, maybe you could tell me a little bit about. Of, like, maybe a mistake or something you've learned the hard way in real estate. I think that's always so beneficial. And me, as a listener, I always love to hear the mistakes people made, so I can see how to avoid them, because that's one of the biggest things that limits people in this industry, is they're just scared of making mistakes, and there's mistakes to be made. Have you guys ever had any costly mistakes or any, you know, lessons you've learned the hard way? That. Or even if they were just close calls that you could share?
- [49:46]
C
I would say so. On one of our properties, the property down in Central, we. We. I specifically struggle with, like, networking and talking to people I don't know and reaching out and, you know, like, getting out of that comfort zone. And so we made the mistake of asking a Someone kind of like a handyman contractor that we had redo a bathroom for us up north, up in northern Utah. We asked him if he knew anybody that was down in the southern Utah area, because at the time we didn't know anybody. And he was like, oh, I go down there all the time. Like, if you would let me cash at this place, like, I can do the rehab for you and we'll do it. Like, he like, committed to like weeks at a time or like as long as we let him stay there for free or whatever. Right. And so we were like, okay, sure, great.
- [50:42]
B
That sounds perfect.
- [50:43]
C
Yeah. And so we just kind of blindly, like, without asking questions, just let this guy go do his thing. And obviously the deals worked out, it got the job got done, but that we've had to pay thousands of dollars to get some work that he did repaired or finished or like just like the quality level. And you could tell, like after trip number two, he just wasn't like in it. He didn't want to be there. He was trying to get out of there as quick as he could. And like, our mistake was as soon as we had that deal, like, we should have called every agent in the area, found every contractor, like, talked to a ton of people and just networked with people around because now that's what we've done. And we have like a really good, you could say team down there. People that, like, when we have a problem, they're there instantly, you know, but like us just being, I don't know, just experience and learning, we had, we had to go through that, you know, that that's probably our most costly. That rehab went for sure over budget. And then even now, after the rehab's done, we see ourselves paying money for repairs and mistakes that he made. So, yeah, leaks, electrical problems, all sorts of good stuff. Gas leaks.
- [51:57]
A
Yeah, yeah.
- [51:59]
B
Vetting out the contractor, the age old.
- [52:02]
C
Issue.
- [52:04]
A
I. I have one that's a little different. So right now, this month, somebody that's in one of our properties, they paid some of their rent, but they haven't paid the rest of it. And our tenant, she just is like every month she tells me a story as to why or how she's paying rent, and I'm like, I don't care. Like, if you have to tell me a story to pay rent, like, I don't know, that should have been a red flag. But what my mistake was in our duo here, like, I have mainly filled out all the contracts for our tenants, and when her lease came to renew, I found a simpler Lease that we hadn't used before. We've never used it before, but it was so much simpler to fill out. I'm like, okay, we haven't had a problem with her paying that rate playing rent late yet. So I, I filled out this lease and now come to find out it has the most lenient late rent policy. And is this man this month? So, like all it is is a dollar 25.
- [53:01]
B
Taking advantage, huh?
- [53:03]
A
Yeah. And I'm like, so she's telling us the story as why she's not paying rent. And all the leaves says is like, oh, yeah, there's a 25 late fee. And I'm like, okay, first of all, big red flag. We need a way better policy as far as that goes. And obviously when you're filling out a contract like it was an 18 month lease that we signed, I really should have paid way better attention. It doesn't matter. That lease B was going to take me 20 minutes longer to fill out. Like, who cares? Because when you run into a problem, you want to make sure you're protected. And so I've been kicking myself all month long thinking that I'm only going to get 25 bucks out of this.
- [53:40]
B
Yeah, I think that's actually like, it's such a simple thing, but reading contracts like it's like hindsight, like, no, duh. But how many times do we not really read the full contract? You know what I mean? And, and I invest in multiple different states. It's like different states have different things in their contracts and different pro in different. I even like say I have the same thing. I have different rental contracts that I've used throughout the years. And it's like really reading through and taking that time, even if you have to spend an hour or two, which is like kind of boring and annoying, but really knowing your contracts in and out is some vitally powerful advice that is so easy to skip over. Everybody just goes, yep, I agree. You know, when you fill out anything online, no one reads contracts, you know, but when it comes to real estate and renting out, I think that's really good. Easily missed advice to read your contracts. Thanks for sharing that.
- [54:38]
A
Hopefully we get by the end of the month. We'll see. It's up in the air.
- [54:43]
B
All right, so last question then we'll let you go. What's something you guys like to do to just enjoy your life?
- [54:50]
A
Yeah, we love being outside, being in the mountains and camping. Definitely enjoying nature. Nothing with water though. Definitely. We're more mountain people, I would say.
- [54:59]
C
There you go. Yeah, it's been interesting because most of our stuff we do is up the mountain or some sort of outdoor activity. But this year will be a lot different because we have a lot more time. I've never had the time and freedom. I've always had to request PTO or, you know, like, only have limited days to go do something. So hopefully we kind of find some new passions and some new hobbies this year. Yeah.
- [55:24]
B
Best summer yet. I'm excited for you. You can't warm up thick enough, huh? That's great. Well, you guys are awesome. Thanks for being here. We appreciate you sharing your stories and glad we had you.
- [55:35]
C
Thanks for having us, Joe.
- [55:37]
B
Awesome. Well, this is Joe Jensen signing off for the Real Estate Investing School podcast, reminding you to go out there and change your stars.