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Real Estate Investing School Podcast
149. Invest Early and Earn Forever with Craig Lively
00:56:50
Welcome back to the Real Estate Investing School Podcast. On today's show, Craig Lively shares his journey into real estate investing, starting with house hacking and leveraging the power of real estate to build wealth. Craig emphasizes the...
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- [00:00]
A
That's why it's an art and a science. You got to sometimes go with your gut after you've ran the numbers or maybe you're going to be stretched a little bit. That's when you're going to learn the most. You got to pull the trigger. And you can't just be fearful and never move forward with anything.
- [00:18]
B
Welcome to the Real Estate Investing School podcast. I'm your host, Joe Jensen. Our guest today is Craig Lively. Now, Craig describes himself as a father and husband first, first everything else after that. He's a software salesman. Been married for 10 years, has three kids, ages 5, 3 and 1. He loves golf, real estate, triathlons and all things money. Welcome to the show, Craig. How you doing, man?
- [00:43]
A
Yeah, thanks Joe. Doing great. It's pretty interesting and wild time right now with what's going on with my, my career and different things like that. So stoked to chat with you and thanks for having me on.
- [00:59]
B
Yeah, for sure, man. Well, I mean, and you're in the thick of it. I mean a five year old, a three year old and a one year old, that, that doesn't get much more hectic than that.
- [01:06]
A
No. Yeah, they, they certainly keep you on. My wife and I on our toes and yeah, it's, it's a lot of fun, a lot of work. They, yeah, it's great.
- [01:18]
B
That's awesome. So you're, you're, you're working full time in software, but you also have been investing in real estate on the side for, you know, the past decade? What I mean, yeah, I mean it's interesting times in a lot of ways. I'm interested to dig more of what you mean. Exactly what's going on with you, but maybe we'll back up and catch up here. What, what got you into real estate originally anyway? I mean, was it like, what kind of put it on your radar and when did it click? Like, oh, this should be like a wealth building tool I should be using.
- [01:51]
A
Yeah, that was in college. So I went to BYU and had a good buddy of mine, my best friend, and he was renting out a condo that was close to UVU campus. And he just kept telling me all the good things about real estate and you know, I would see the literal cash, cash flow coming from the tenants that he would get each and every month and that, you know, my eyes at a college student, I don't have any money. Like, you know, I'm just skimping by on, on what I can and you know, seeing that really piqued my interest from the get go. And then, yeah, so just really tried to, you know, that was back in man, you know, 2011, 2012, 2013. And really just started consuming as much information as I possibly could. Bigger pockets. Read Rich dad, poor dad, and yeah, just podcasts and everything. I could get my hands on all things real estate. Didn't have any money to invest, and so that's why I thought that's what was holding me back at the time. But really it was just reading, listening, and just talking with my good friend at the time about how do I get into real estate, what do I need to do, what are the benefits, et cetera. So that was really the starting point.
- [03:21]
B
So how long did it take from the moment where you're like kind of getting turned onto it, like you're like you just described, you're seeing this cash flow. Like, this is awesome. This is cool. You start diving into it, learning everything you can. What was the timeframe between that and when you actually purchased your first investment property?
- [03:42]
A
Yeah, that was about. It was about two or three years. And then the very first house, I got married. We didn't have any money. Like, I started marriage. It was like zero dollars in the bank account. I spent money on the ring, the wedding, all that stuff and. All right, well, I gotta, you know, I gotta figure this thing out. So we. We saved up about $7,000 in six months. We bought our first house in 20. It was like January or February of. Of. Of 2015. And like, I like to call it the extreme house hack. Okay. Because it was in. It was in. It was in Provo. We. We bought the house and there were tenants upstairs and downstairs. And we moved into the basement. We moved into the basement and we remodeled the entire basement.
- [04:43]
B
And there was an upstairs downstairs and a basement.
- [04:46]
A
No, no, upstairs, upstairs, main level and the basement.
- [04:50]
B
Okay, so you kicked the tenants out of the basement and moved in there?
- [04:52]
A
Yes. Gotcha. So there was actually nobody in there in the basement. And so we renovated the whole basement. My wife likes to say, you know, we started our marriage living off of dirt floors because the floors were dirty at some time. You know, we did the kitchen, you know, all that.
- [05:08]
B
Yeah.
- [05:09]
A
And then at that point, the lease expired on the main level. We moved upstairs. We got tenants in the basement, and that's when we put the spare bedroom. It was a two bedroom on the main level. We put the spare bedroom on Airbnb, so we had the spare bedroom on Airbnb and then the basement with tenants. And so we were making about 500 bucks a month living in that house by. By renting the basement and doing Airbnb in that spare bedroom.
- [05:40]
B
So I love that. And it's funny because I like to.
- [05:42]
A
Call the extreme house hack.
- [05:44]
B
Yeah, no, that's pretty extreme. You know, especially when it's like, oh, you know, you're not single anymore, you're married, you know, but you're still renting out a room and whatnot. But I think it's really cool because that's actually a super unutilized aspect of Airbnb. It's just like, yeah, just rent out a room in the house you are in. You know, nowadays, Airbnb is like a hotel chain. It feels like. You know what I mean? Like, no one. Like, it's. It's just these homes that are bought for Airbnb, prepped for Airbnb, have made for Airbnb and coasters. You know, it's like it's a hotel chain, but it's like, it doesn't have to be that. It can literally just be like, dude, you want to crash on my couch? Like, here's. Pay me 50 bucks or whatever. You know what I mean? Like, it can be pretty low key. And there's more and more of actually a market for that today than ever, because Airbnb was that for a second, but then it turned into what it is now, and so it's like, no, no one's doing that. There's nothing affordable. I mean, airbnb is more expensive than hotels, so it's like, where's the alternative? So anyway, I think that's cool that you guys did that, and we're willing to, you know, sacrifice a little bit of privacy order to kind of just build your guys's future.
- [06:50]
A
Yeah, and it was. It was mostly just, you know, young couples just like us traveling through or, you know, like a single traveler. And, you know, that's, you know, you got a bed and, you know, that's. That's old school Airbnb right there, like you said. And so, yeah, I mean, it certainly was a sacrifice. Like, yeah, we. We had our home, but we weren't really, like, living in our home. It was like sharing our home, basically. But, you know, that's. That's when things changed. And we were like, yeah, let's. Let's, you know, we'd been trying to have, you know, our first kid, and. And when that happened, we're like, all right, we need a little bit more space, a little bit more privacy. So we did the house hack again on our second home purchase. And it was a, you know, bigger home, better home, and we just rented the basement out on, on that second home purchase. And so we did the house hack all over again. Which I think those two decisions right then and there, like, just shaped, you know, to where we are today. Right? That's sacrificing on the short term on those for, you know, just as you're getting started and, you know, cutting your teeth into the world of landlord and homeownership and all that stuff. But it really sets you up for success later down the line.
- [08:12]
B
Well, and something I want to mention is like, it's so vital or not vital, but I think it's so helpful the earlier you can get into it because real estate is such a time game where it can really change your life dramatically over 10 or 15 years. You know what I mean? Like, but year one or two, it's not going to be cool or sexy most of the time, you know, but you bought, you know, this is almost a decade ago when you first started buying. And, and it's like the equity you have in those properties, you know, is, is huge. I mean, you've made hundreds of thousands of dollars beyond all the cash flow and tax incentives and all that, just in the value, those going up. But it was so important that you got in as early as you did. And so if anybody listening now and if they're like, oh, I'm not quite ready or whatever, it's like, dude, just get in with a couple little house hack things and then, and then those will. If you do nothing else, at least in 10, 20 years from now, like, you'll, you, it'll be life changing if you did nothing else. But if you keep going harder, obviously you can go bigger. But time in the game is huge. And so I feel like I, I was renting out a basement. This apartment couple came in to tour it and, and they were like trying to, you know, talking about living there, and I was like, I was like, this isn't good for me because I like you guys. You'd be good tenants. But go buy a house. Like, what are you doing renting? Like you're a young couple. Like, oh, well, we're not ready for that. I'm like, you don't get it. Like, this is the exact time to do. And even, like I said, whatever it takes. Well, we can't afford it. It's like rent out the bedroom, rent out the basement, put the garage on. You know, there's, I don't know, there's some platform for renting out Your garage.
- [09:50]
A
Yeah.
- [09:50]
B
Neighbor. Yeah. Like, like do whatever it takes to flip that bill. And you, I've never met anybody they regretted. They're like, oh, yeah, so bummed that I, I got that first property. And it was, we sacrificed so much. It was so annoying. Like, I wish I'd never done that. Like, I've never heard that story. And I've done a podcast, you know. No, not at all.
- [10:09]
A
And I want to make this point clear too. Like, we basically drained our savings. And, you know, this isn't probably the most, you know, recommended approach, like just to, you know, we did a 3% FHA. Like this was the bottom of the barrel loan that you could possibly do. Right. And it was, you know, really, really small down payment at the time. Not small, but big to us. Small, generally speaking now. But you know, we did that exact same thing on, on home purchase number two, 5% conventional. Right. And it's like, look, it's like, you know, just do what you can to get into the game at, at the earliest stage possible. And that in and of itself, you know, it pays dividends for sure.
- [10:57]
B
Yeah. You won't regret skimping and scrounging and finding a hustled way to make it work on those first few deals, you know, and it's usually you're scrimping and scrounging and hustling because it is so early on in the game. You don't have any money and you don't have any experience, you don't know what you're doing, you know, but if you wait until it's easy, you waited too long. If you wait until you have, you know, a 20, 30% down payment and you can afford a huge mortgage, you don't need to rent out the basement. Like, you probably waited five or ten years too long. Like, you should have done it when you were like, how the hell are we going to do this? You know, and like you do it a couple times and that's a great foundation, you know. And then what I want to mention is like, this is for people. Like, if you want to be a real estate investor and go hard, that's a great experience. But even if it's just something you're going to do on the side to build your wealth and kind of set yourself up, even though you're going to have like a normal full time job and everything like that, like, that works too. It's customizable, you know, but it's a good practice for everyone.
- [11:55]
A
Yeah, yeah. I mean, it's like in, you know, jumping Forward to right now. So I'm in software sales and it was last Wednesday that I got the email and in the 10 minute zoom call saying that I've been laid off.
- [12:14]
B
Oh, wow.
- [12:15]
A
I mean, it's about as fresh as you can get, right?
- [12:18]
B
Yeah.
- [12:20]
A
And, and there's, you know, a lot of people that I know personally that look, it's, you know, when you lose your job or you get laid off, it's, it's devastating. Yeah, it's a scary, frightening, devastating. You know, really anxious and stressful time. You know, I have been fortunate enough, fortunate enough to, you know, I'm in this position where I'm not, you know, shaking in my boots or wondering what's next and, and things like that. So. And that's basically just due to real estate.
- [12:56]
B
Yeah.
- [12:57]
A
So it's, yeah, it certainly pays its dividends. You know, you know, we're talking about the first two deals up until today. Like, you know, you know, my, my, my current. We're currently renting right now. We moved recently, moved to California. And you know, our rent is covered. It's, it's completely covered with, from your.
- [13:21]
B
Cash flow, from your real estate because how big is your portfolio now?
- [13:25]
A
So right now it's six doors.
- [13:28]
B
Six doors. Cool. And it's like, I love that because it's not a hundred. You know what I mean? It's not like, oh, we're making a million dollars a year. But it's like, dude, you lose your job, you're like, but our rent's covered. We can buy food. Like, even if I don't go get another job for a while. Like, we're okay. Like, that's a huge, huge. Just like, I don't know, living not on a margin that, you know, but you have the choice to make sure how to pivot and what you want your next step to be as opposed to being forced into something. Like, that's, that's the powerful aspect of having a little bit of residual or passive income, you know, beyond just like, oh, free time and freedom. That's what everybody talks about. But it's like, it's in these tight moments that start to put people deeper and deeper in the hole and so that it makes it even harder for them to ever get out or gives you the time and the piece to find their next pivot is like, oh, this actually turned out to be the best thing in the world for me, you know, and it's cool that you set those building blocks so long ago so you'd be ready for it.
- [14:26]
A
Yeah, absolutely. And not necessarily like, you know, the benefit isn't just coming from passive investment or passive, you know, cash flow, quote unquote passive, but it's having the skills to go and generate active income as well. Right. You know, we're talking flips, wholesales, like there's, you know, just finding the deal, right? That's, that's a skill that will never go out of style no matter who you are. Right. There's so many, you know, you have all the different exit strategies, but you know, the one and one thing only that every real estate investor wants is, is what a good deal. So yeah, you know, we, I just completed a flip in Indianapolis. This was two months ago. Cool. All remote. And so, you know, again, it's like the, the passive cash flow helps you on, on the day to day to kind of ease your mind and then you also have the opportunity to go, you know, not necessarily, maybe, maybe, maybe, maybe not, or replace your, your W2 income. So yeah, there's, there's so many different paths and avenues that can benefit you. Short game, long game in real estate.
- [15:37]
B
Yeah, I love, I love that I reached. So I used to do sales as well. And I remember like thinking, man, it's like, I'll, I'll always have a job if I want a job. It was like, there's a thousand places that I'll hire a salesman, you know, today, right? And it's kind of similar with real estate too. It's like if you ever lose your job, it's like you, if you know the real estate game and you're willing to hustle and put in some work, that it's all there for you. You know what I mean? Like you said from just straight up, even bird dogging, if you're super inexperienced is finding leads to become deals, or you find the actual deal, you wholesale it or flip it or what. Like if you're willing to learn this industry, you'll never have to be like, oh, there's no chance, what am I gonna do? I'm gonna sit on the sideline and like hope I don't die or whatever. Like, I don't know what people do who have no marketable skills. But it's like if you do have no marketable skills, that's okay, you don't need to go get a 10 year degree because it's too late for that right now. You need something today. Go get into sales, go get into real estate. And you, you will always have an opportunity in front of you. You know, it's that simple. So But I want to back up a little bit then. So, you know, now you're doing, you know, said remote investing. You're living in California, you're flipping homes in, you know, the other side of the country almost. In Indianapolis, I think you said, what was your first like non house hack, primary kind of live in investment. When was like an actual just like straight up investment investment. And then. And then what kind of deals did you do after that?
- [17:07]
A
Yeah, so we had done a couple house hacks and then a slow flip and then it was in beginning of 2020 when I actually pulled the trigger. And it was March of 2020 when the whole world shut down, like and we were supposed to close like March 25, you know. And you know, I think of the pandemic started like March 15th. And you know, that's when like, you know, the Utah Jazz with Rudy Gobert, like those images are just like, you know, know burned in my brain. But it's like, you know, March 15th is when we were.
- [17:53]
B
Wait, so for those that don't know, expound on the, that image that you're talking about with Rudy.
- [17:57]
A
Yeah, Rudy Gobert, he's like, you know, I think he's like touching all the microphones and like, I don't know if he was like spitting on him or touching all the microphones or whatever. And you know, nobody really knew what was going to come right after that. But yeah, so. And I'm not even a Jazz fan. I'm, I'm, I'm born and raised in Sacramento, but was. Was living in Utah for, you know, about 10 years. So yeah, it was in, you know, March 2020 and I'm like, what am I doing? Like, you know, the whole world is shutting down and here I am buying a, a rental property that I've never seen. This was in Indianapolis. I'd never seen it in person. I had built my whole team remotely. Agent, lender, insurance, property management, handyman, contractors. Like I had done all the legwork in building my team. And yeah, that was set to close in March. And I went through with it, even though I was like, man, this is crazy. I don't know what's going to happen and who knows what's going to happen with real estate with, with this whole thing going on. Went through with it. And yeah, it was an awesome investment. Right? I mean that was in 2020. If you could get real estate in 2020, you were, you know, hindsight is 20 20, but a smart investment.
- [19:24]
B
So when you're getting it at 3% interest too.
- [19:27]
A
Yeah, Exactly.
- [19:29]
B
You know, the prices hadn't exploded and the interest rates were super down. It was just like, I want to dive into that deal a little bit then like, how did, how do you find a deal on the other side of the country? Like, how did you do that and how did you know that it was going to be a good deal and not just a money pit?
- [19:46]
A
Yeah, it was leverage. The expertise of, of the professionals in that specific area and region. And I had done all of the research across, you know, the, the US and said, okay, where is the best place for me to invest? I want to buy more real estate. In my opinion, Utah was too expensive, quote, unquote. It's all relative. And so I looked in Indianapolis, I looked at all the other states and Indiana has real estate friendly laws, landlord friendly, great taxes, price to rent ratio was great. And it had upward net migration. Right. People coming from Chicago or from other areas to Indianapolis. It's a growing tech community there. So yeah, for all those reasons, I'm like, yeah, I need to pull the trigger in Indy. And my wife is actually originally from Indianapolis as well. That was just an added benefit. I would have bought a home in Florida or Ohio for all that matter. Doesn't really matter. But I wanted to be the best investment. And then I just started, I interviewed it, interviewed probably a dozen agents, lenders and property managers, probably a dozen each, and found the three best that I felt jived well with me and were well versed and professional and leveraged all of their expertise. Found the, found the, the home on, on the mls. It was an owner occupied home. They were selling it. I, you know, it was really good condition and it was like a C plus area. And I bought it for 92K. I was like, yeah, let's just, let's just go for it 20 down and you know, and it turned out to be a great deal, like it's worth. I've actually just recently sold it because in my opinion I had pretty much double the equity that, that when I purchased it, sold it for 180k, appreciated quite a bit. And then cash flowed for, you know, four years. Yeah, while, while I, while I owned it. So. And then did that a number of different times and then got into flipping as well by leveraging that, that network that I had built over years in Indianapolis.
- [22:17]
B
Is that where you've done most sure purchases then is in Indiana?
- [22:21]
A
So there's, I have two properties in Utah and then have held on to two in, in Indianapolis as well. Sold a few, flipped a few. So yeah, it's, it's split between Utah and Indy.
- [22:38]
B
I love, like, for those that are listening, that like, that was gold what he just explained. Like, people are like, well, how do I get into it? I get asked this all the time, how do I get into remote investing? Because I said if you're trying to buy for cash flow, it is harder in Utah. Right. And different things, especially if you're trying to buy turnkey, you know, it's just like, it's a difficult thing. But if you people like, how do I get out of state, how do I buy remotely? And you, you gave the exact formula that I tell everybody. I'm like, go talk to five. I say five, but it does, it's even better. Five real estate agents, five property managers, five lenders. Like, and then ask them all who's the best one and refer them around. And you're going to start seeing this like, triangulation of like, these are the legit ones I want to work with. And you get to interview them, see who you vibe with. And it's like, it's, it's so simple. But like, how many listeners are you are going to actually do that? Who's going to actually call, you know, five or 10 of each of these, interview them all, ask for referrals, see who refers each other. And then once you do that, now you have that networking, you have so much strength to just tap into their expertise like you said. And it is a simple thing. It'll probably take you a couple days to get a hold of everybody. But you will be light years more prepared once you've done that than just looking at Zillow for a couple hours every evening, which how many people think they're real estate investors, want to be real estate investors? And we're just looking at Zillow, but we're not taking any action because we're just looking at Zillow. You know what I mean? Anyway, I love that formula that you spelled out. And it's funny to hear you say it that way because that's exactly what I've been preaching for so long. I'm like, that's, that's all it takes. You don't need. It's not that complicated, you know, you just got to do it.
- [24:23]
A
Yep. And that's like, that's vanilla real estate. Right. That's not even like, you know, going into finding off market properties and marketing.
- [24:32]
B
And that's what you found on the MLS. Like this was just a listed normal 20% down. Like, it doesn't get simpler than that and here's the thing, I've built my, almost my entire portfolio that way. Just turnkey out of state. If it works, I just bought it. Like it doesn't need to be super crazy and creepy creative to still be, you know, powerful and effective.
- [24:54]
A
Yeah. So, and that's really what's. And I completely agree. Right. It's like, you know, you're always going to have questions come up as you're going through the process and that's why you have to have a trusted expert. Right. To go to, to lean on real estate is neighborhood by neighborhood, street by street. That's why having an investor friendly agent is so important. And then hey, you know, can I put a 15 down or does 20 or you know, multifamily. Okay, two plus you gotta have 25% or you know, what about a DSCR loan? Like you gotta have all of the experts in your corner to navigate, you know, a creative solution. Right. You want to put the best foot forward in each deal. And so you're not going to have all the answers. But that's why it's important to have your team.
- [25:45]
B
How did you vet out the properties? Because I do also caution people that I'm like, everybody has an agenda. Right. The agent wants to sell a house. Right. A property manager wants to have, get your property management fees. Like, like they all have an agenda. No one cares about your money and your situation as much as you do. And a lot of real estate agents don't even know what a good deal is for an investor. They're just like, oh yeah, there's a great area or that's a bad area. Don't buy there. And they have no idea like what's going to cash flow or be a headache or what's not. How did you navigate the advice that you're getting from these experts to make sure that it applied to you? And how were you personally vetting things on your own to make sure it was what you wanted?
- [26:26]
A
Yeah. So that goes back to. Yeah, there's a number of different factors there. So I've created my own, you know, rental cash flow cheat sheet in my, my Excel sheet.
- [26:41]
B
Yes.
- [26:41]
A
And you know, you're going to include all your capex, all your, you know, piti. You're going to include, you know, everything, right. In India, it's their snow removal and other markets you're not going to have like you just want to think of all the different things that you, that potentially you might have to spend money on and gauge, you know, you're going to Leverage an inspector, you're going to leverage the agent. And I would also. This goes back to leveraging mentors as well. And, and there's, you know, I personally, I found a Facebook group, Indianapolis out of state investors. And there's a, you know, it's really active Facebook group. And you're going to find people in there that are maybe not so willing to help, but some that are willing to help.
- [27:33]
B
Isn't it wild how much people are willing to help in the real estate space?
- [27:37]
A
Yeah, yeah.
- [27:39]
B
It blows my mind, like, how much people are willing to just help for no benefit, no reason. I think we're just all like, addicted. We're like so high on it that we're just like, oh, everybody's got to try this, like, take a hit. Like, I don't know like why, but we just love it. And it's like that everywhere. There's so much, so much support that it's crazy to me. And have you found that as well?
- [28:02]
A
No. Yeah. And that's, that's for me too. Like, hey, do you think this is a. A home run deal or is this, you know, is this a pretty good deal? Would you say yes or no? Like, I'll pop up, I'll pop up on my phone or whatever, like, run the numbers in few five minutes or whatever and say, yeah, I think that's a pretty good deal. Or no, I would pass on that. Like, I'm always willing to, to look at things and do I have time? No, I don't. But it's like, yeah, we, we. It's, it's just, it's fun. Like, we. Yeah, we just want to pass on the good word. Right. It's, it's just, it's just a good time. So. But yeah, and, and you know, and I would say when you want to leverage somebody else's help or leverage a mentor, it's much easier to go to that person and say, hey, this is what I've done. Like, don't be too overbearing and give them the whole rent roll and P. L. Right. Of the past two years. And you know, every data book, every data point in the book, but just say, hey, here's what I think. Here's my first take. I ran the numbers. It looks like this one probably would pencil. Here's why I like it. Like, do you think that I should move forward with this? Or like, what's your gut check? Like, keep it really simple if you wanna leverage somebody's time or their mentorship. But that's what I did. And, you know, it's. You know, you're asking fellow investors that are more experienced than I am and to get their take, but, you know, it really comes down to putting in the time and having a little bit of fear, right? Like, you're always gonna. You're never gonna know every single situation or potential repair in a property. But, you know, that's why it's. It's an art and a science. You gotta sometimes go with your gut after you've ran the numbers, or maybe you're gonna be stretched a little bit, but that's when you know, really, you're gonna learn the most, and. And you just. You got to pull the trigger, and you can't just, you know, be. Be fearful and never move forward with anything. So. Yeah, that's my take.
- [30:22]
B
Yeah. No, I love that. I like one thing you said that you. You created your own, what I call an asset analyzer, a deal calculator. You know, like, you create your own Excel spreadsheet where you can look at the expenses and look at the income and run the numbers and see what your return would be. And, like, I think that's so good. Like, I have a really. I like, I love my asset analyze. I'm, like, super proud. I like, collect deal calculators and stuff. In fact, I'm like, I hope Craig will share his with me. Like, I love to collect those. And then I'll always add more and more to my. My. My spreadsheet as I see features I'd like. And I. And I give this to students, and, you know, I get it to people who are interested, but I do feel like at the end of the day, I'm like, go make your own. Because you will be forced to make sure you understand what's really happening on the calculator. Like, if you literally had to create your own, you're gonna have to dive into those formulas. You're gonna have to dive into, like, why do I have this category and this category and this crate? And you don't need to do it from scratch. Like I said, you know, get Craig's, get mine, get a couple and look at them, but then build your own in a way that goes with the way you look at things. What your brain ticks. And you'll learn so much through that process of really dialing it in. And you'll be able to run numbers faster and analyze the deals quicker because it's so natural, because it was built off of your thought process. But you'll learn a lot through the process of building Your own calculator as opposed to just downloading one and half of it's confusing. You don't know why it's there and you're kind of overwhelmed. And it's funny because my process with that is, that's how it was with me. I'd look at all these calculators and it's like, that's way too much like I don't understanding this. So I made this really, really simple one. And then over the years I made it way, way complicated. Right. Because now I understood it all. So then I added another feature. Another feature, Another feature. Now I've got this big, you know, crazy one with like all these different pages and stuff. And I'm like, man, that might be too confusing for a newbie, but a newbie needs to go like start their super basic five line one and, and expand from there on a way that they truly understand. So anyway, I like that you mentioned that you made your own kind of a nerd when it comes to deal calculators. So I wanted to jump on that.
- [32:27]
A
Yeah, yeah, for sure. I'll send that over. Yeah. And then you, you have to, you have to learn what you know, how much do you need to put away for all the capex items? Right. Or what is cash on cash, how do you calculate that? Or what's cap rate, you know, all that stuff. Right. So, and that's only going to serve you as you get into more commercial deals, right? The, the big boy deals, right. Where it's, you're looking at storage facilities or you're looking at, you know, small multifamily or apartment complexes. Right. Like that. The devil is in the details when it comes to commercial and understanding the metrics and the formulas and the numbers. Right. And that's, that's really what it comes down to. So that skill is again going to pay you short term, but also sets you up for success long term, 100%.
- [33:20]
B
So let's talk a little bit about just kind of like money and investing in general. I know you have a big passion for just like money as a tool and as a game and what it all is. How do you see real estate as part of that, but maybe kind of just broader. What's kind of your perspective on, you know, why should someone invest in real estate as opposed to other stuff and you know, what are your favorite other things and just kind of your view on money and how we leverage it with real estate?
- [33:48]
A
Yeah. So real estate is certainly number one in my book. It is my always my go to and I, I know there's a lot, there's a lot of other things, right. Like you've got individual stocks, you got crypto, you've got trading options, you've got, you know, the list goes on and on. But for me, what's tried and true, something that I know personally is real estate. I have a little bit in crypto and bitcoin and stuff, but that's not something that I have taken the time to learn and understand. And that's more of like a hedge investment. But real estate to me is, you know, we talked about this earlier. It's, you know, it's a skill that can do a lot of different things for you depending on how you leverage it. So that's why I like to go there. But in terms of money, yes, I have, you know, some, some 401k Roth IRA, backdoor Roth IRA with, you know, some you know, index fund investing. That's, that's what I like in terms of just, you know, stocks, I just go index fund. The Simple Path to Wealth. That book will sell you on. Index fund investing is better, as good as any other. But, but yeah, and also just in terms of money, like when, when we, when I didn't felt like I didn't have any money, which we didn't, we, my wife and I, we did three weeks in Europe and that was all due to credit card hacking and sign up bonuses and things like that. Right. So I wanted to invest in real estate and I wanted to travel. Didn't have a ton of money. So that's where we just had to figure out a way and get creative. And so, you know, the real estate is certainly paid for itself. And then traveling like I still try to just use points whenever we travel. You know, you're, you're put everything on a credit card for real estate or personal and then use sign up bonuses and the points that you have and that you can go down a whole rabbit hole with with credit card points and things like that and bonuses, but leverage that stuff to your advantage as well. But you got to be smart, of course.
- [36:16]
B
Well the cool thing like, you know, when you're doing that, you're leveraging these points and credit cards and all this stuff to like, for your luxuries, you know, for your play stuff which allows you to actually pour the real money into the real estate properties, into your investments and into your, you know, actually building your wealth. And so it's like if you can get creative and be a little like creatively not, you don't have to Be frugal. Frugal. If you're creative enough, you can like say you want to travel three weeks in Europe off being creative. If you can be creative on your self, entertainment and luxury, then it allows you to go even harder on investing, which will just set you up, you know. So that's really cool that you guys are able to do that. I'm like, listen, man, I need to get more credit cards. I have like one credit card and I get the points and I cash them in or whatever. I like, don't know. I don't, I'm like, I should probably dive into that more.
- [37:09]
A
Yeah, yeah, absolutely. I mean, yeah, you know, we just, we just got back from Maui and I would say like, I don't know, I would say 50 to 75%. I would say solid conservative number. At least 50% was paid for by, you know, points and you know, credit card stuff. Like so it's, it's real. Absolutely. And you know, provides family memories and you know, the kids certainly love going down the slide and being on the beach. Right? So yeah, it's good.
- [37:43]
B
That's cool. I love it. What would you say has been some of like kind of the guiding principles or values or even just kind of like the vision you've had as you've been going through all of it over the past decade of kind of building your portfolio and has there been any kind of like guiding star guiding principles as you've gone through it?
- [38:03]
A
I would say it's just a matter of focusing your time and your effort on investments rather than putting that time and effort into buying things or luxuries. And you know, as you do that, like you're going to, you know, the money, your active income, as much as you can possibly put into real estate, specifically for me and for what I would recommend and for many of the listeners here, you know, the better off that you're going to be instead of focusing on, you know, the flashy toys or the flashy, you know, you know, just the luxuries of life. Right. So focus on what's most important and that's saving and investing in real estate so that you can ultimately get to the point of using and leveraging and having all the fun and, and flashy toys, you know, and having those, those paid for. So that's, you know, that's kind of like the high level guiding principle, I would say. Yeah.
- [39:16]
B
And it's so important, like if anybody that's been listening or following me for a while that I always say your number one fiscal responsibility is to grow your asset portfolio. Like. Like, if you don't know what that means, learn what that means. But drill that into your brain and your soul and tattoo it on your forehead. Because if you truly do that along the way, which is what you just said, right? Like, spend buying real estate, as opposed to all the luxury items and dumb things you could be blowing it on, or even the fun things and the awesome things, like, but make sure the number one priority, like, that's your number one fiscal priority is to grow your asset portfolio. And it is it made so aware to me. I was recently just talking to a good friend of mine, and he was like, he's killing it. He's, you know, making like, I don't know, six, eight hundred thousand dollars a year. Like, he's like, loving life. And I was like, dude, that's so dope. And like, I'm not making that kind of money. Like, I haven't made, like, big money in a long time. And. And it is funny because I was talking to him, but then we just started talking about, like, net worth and like, okay, let's take all your debts and address and like. And I was like, my net worth was more than his. I was like, bro, like, in two years, you could, like, be way ahead of me if you just put your money there. Like, if you're making that kind of money, if you just went hard, it just blew my mind how important what you said is. Like, what are you spending that money on? Like, you could be growing a huge asset portfolio or you could just be living a high lifestyle. And it's just crazy to think that someone making so much more than another person could have such a lower net worth because they just don't have any assets. If you don't buy them, you just don't have them. And it seems simple, but it's like, oh, I'll get around to it later. But it's like, no, like, it takes time like you said you got. And that was a big thing for me is I never made crazy money, but I. Over time, you know, the things I dabbled in at the beginning paid off big. And then I could leverage that money and buy a lot more, and then I'll just do that every 10 years. And it's just like, there's so much that come from it. So anyway, it was just. It was just kind of blew my mind when I was hearing that. I was like, man, you could do so much with that. But yeah, number one, fiscal responsibility is to grow your asset portfolio, spend it on real Estate and all the other things will come as well. Just go get a new credit card, use some points, and you can go play as well, you know.
- [41:37]
A
Yep, yep, exactly. And you know, the, the with, with your phone alone. Right. You can do practically everything. Right. And that was the other thing. Like, you know, somebody asked me like, you're in Utah, you're in California, and you're flipping a house, you know, in Indianapolis. And I've never even seen the house in person. Right.
- [42:00]
B
Yeah.
- [42:00]
A
And so it's like they're like, some people are just, their mind is just blown by that fact alone. And it's, it's just like. Well, yeah, that. Because I have learned how to use Google and my phone to my advantage. Right. And so that's the other thing. It's like leverage all the tools. Yes, there's shiny object syndrome, and I am certainly prone to that. But it's leverage all the tools that you have to your advantage. And with technology and all the things that you can do, you can do a virtual, there's virtual walkthroughs, FaceTime with the agent, FaceTime with a contractor. I mean, it just, those are, you know, blocking and tackling, basic fundamentals. But there's so much out there that you can just leverage if, you know, if you have the fundamentals of. I'm going to put my time, money and effort into the investment. Yeah, you can do a lot.
- [43:02]
B
Yeah, well, I love that. And like you said from the very beginning, leveraging the expertise of others, you know, because I think about, because I do a lot of most. Mine is remote investing as well. And I'm like, here's the thing. If I'm going to do a flip, whether it's across the street from me or across the country from me, I'm gonna have to use a contract to know what the hell he's doing. Because I don't. I'm not gonna, I'm not gonna know. I'm not a contractor. Like, whether it's in my backyard or not, I'm still gonna have to default to a trusted contractor. I'm still gonna default to the numbers and run the things. You know, like, even if it's a rental property long term, like, I'm not gonna go change the toilet and light bulb. I'm gonna, I'm not gonna do that whether it's in my backyard or across the country. So it's really all the same virtually, regardless of if, if it's close to you or not. And there's nothing. I was talking with friend, he's like, I just couldn't buy anything unless I could go, like, see it in person and touch it. And I'm like, I don't. Even if I could see it and touch it, I don't want to. Like, why do I want to spend my time doing that? Like, that's the last thing I want to do. I'll just find someone else to do it. And they can happen whether they are in my yard or, you know, in, you know, Indianapolis. Like, so I. I just. It's not as complicated as people think. And that's when I first learned is I had properties, you know, because I. At first I did feel that way, and that's what my dad taught me. Like, don't buy outside your farming area. I'm like, okay, like, I'm gonna stay close. And. And then I started traveling for work, and I would have to do everything remotely for those properties. And I realized, like, oh, it doesn't matter that, you know, if they're in my backyard, I'm not there all the time to do it, or I'm busy or I'm gone on a trip. And. And then once I realized I could do that in my backyard, I'm like, well, then I guess I could do that anywhere if I don't have to be there. So it really opens a lot of doors.
- [44:46]
A
Yeah, yeah. And I would say I know even some of Indianapolis better than, you know, the area that I'm currently living in or the area that I did live in. And, like, you know, it's just opened so many doors right of, you know, I manage our Airbnb. That's eight minutes to downtown Indy in out there right now. And. And it's like, you know, it's. Again, I wouldn't want to be doing any of the stuff that I'm hiring out anyway. Just like you said, I'm not going to swing the hammer. I'm not gonna, you know, clean the property on a turn for, you know, in my Airbnb. It's just leveraging, you know, that. The expertise of others in that. In that specific area. So, yeah, it's the way to go.
- [45:32]
B
Well, Craig, this has been awesome. We're going to dive into our final four questions so we have some time for you to be able to answer them. But, yeah, this is super cool. If people do want to, like, get in touch with you or pick your brain or, you know, follow your journey, what's the best way for people to reach you?
- [45:49]
A
Yeah. On Instagram. Lively. Craig. Last name, first name. That's the best way.
- [45:54]
B
Awesome. Sweet. Love it, man. All right, so first question of the final four, Craig, what is your dream deal or a deal you'd love to tackle someday?
- [46:06]
A
I would say so I've been really researching and learning self storage and I would say my dream deal at this moment is an off market seller financed value add self storage facility.
- [46:23]
B
Awesome. I love it. That, that's a clear buy box right there. I love that. Cool. I actually have some contacts in that space too. I should get you after the call here that might be able to help you out.
- [46:33]
A
Please do.
- [46:34]
B
What's been one of the most pivotal books or podcasts that you've ever digested?
- [46:46]
A
The one that comes to mind is Probably Can't Hurt Me by David Goggins. That book changed my life because I had always thought that running was just not my. Like, I hate running. Running sucks, right?
- [47:06]
B
Yeah.
- [47:06]
A
I've always been an athlete, but I ended up signing up for a triathlon six day, a sprint triathlon six days before it starting because of that book. And you know, I've now effect on people.
- [47:22]
B
I've got a story I got to share too, about that. It has that effect. You're just like, let's go. Six days out, you sign up. Never done a triathlon before.
- [47:33]
A
Triathlon, no, I'd never. I'd never done a 5K. So yeah, so it was, it was certainly a stretch. And you know, my goal was, was to finish. And I did. I didn't, you know, didn't get hurt anything. And then I even did another one too, so another one here in California, which was, yeah, a lot of fun. It changed my life. So I love triathlons now and yeah, can't wait to do another.
- [48:02]
B
That's cool. Do you have any big races on the docket that you're prepping for right now?
- [48:07]
A
One in September. It's an Olympic triathlon. It'll be my third. So I did two sprints. Um, and then this next one, I'll. I'll graduate up to an Olympic triathlon beginning of September.
- [48:20]
B
Nice. And then when's Ironman?
- [48:23]
A
Yeah, that's another level. Maybe when my kids get a little older, we'll see.
- [48:28]
B
Yeah. For real. No, it does take up a lot of time. That's cool though. Just on the David Goggins train though, for a second I was listening to his second book, the Never Finished. Right. This is about a year or so ago and, and I'm. I was getting all hyped on the David Goggins juice. I'm like, yeah, let's do hard things or whatever. And my buddy was supposed to be training. He hadn't even really started yet, but he was supposed to be training for the Ironman 70.3, the half Ironman in St. George, Utah. And I called him and I was like, dude, I just finished a book, like, we should go do something. And I was like, dude, you don't need to, you don't even need to wait, dude. Like, let's just go Tuesday. Let's just go do the full like distance of the half Iron Man. So it's like a 1.2 mile swim, a 56 mile bike ride and 13.1 run. I'm like, let's just go Tuesday, dude. Like, we don't even have to wait six months of training. Like, let's go. And so we went out, you know, three days later, totally untrained and, and we're both active and fed. You know, it's not like we were like on from the couch, but we weren't sport specific trained for that. He didn't even honestly doesn't know how to swim. But we just got into lap pool and went back and forth for an hour or so, wherever it took, and then hit the road. We did the whole distance. It took us like all day and like way past the time cut off if we're in a real iron man. But it was, yeah, dude, it just, you light the fire and you sometimes just got to go do crazy stuff. And so that's funny, you did a similar thing. Just that same mindset. Like, okay, I'm just going to do it right now. Like no more waiting, no more, you know, putting it off. Like, let's go right now.
- [50:07]
A
Yep, yep. And it feels so good after you're done. Like does it, does it feel good doing it? No, not really. But like once you've, you know, crossed the finish line or whatever, you, you, you've done it. Like, yeah, it, it's, there's no greater feel. Like, it's just, it's amazing.
- [50:24]
B
I love it. And I, I would advise people to do the same thing with real estate. Like stop putting it off for like, like I said that young couple that came to look at the basement, like, don't rent, go buy. Like find a way. Like just go find a way. Even if it takes you all day to finish the run and you're, you know, you don't, you're doggy paddling with a floaty, like go do the race tomorrow. Like, just do it now. And then it gives you a baseline of what's possible, and it changes your perspective of what you can do. It's like, go find a way to buy that property and just break through the barrier so that, you know, like, you're actually playing the game and you know where you're at as opposed to sitting on the sidelines, because you can sit there for years and years, and they could have been some of the most pivotal years. And. And obviously you've done well, but that was your story. I mean, you. You could have. Imagine if you had just started buying in 2011 or 12 when you first heard about it, instead of waiting till 2015, you'd be twice as far ahead. You know what I mean? And. And it's like, even if you didn't know what you were doing, if you bought anything at that time, like, you couldn't have made a mistake. Hardly, you know, and so anyway, it carries over for sure. All right, question number three. What is one of the most expensive or just interesting mistakes that you've made in real estate investing?
- [51:41]
A
I would say I actually. So it's. It's a duplex that I currently own in Indy.
- [51:51]
B
Okay.
- [51:53]
A
I bought it at a discount from a wholesaler. And I, you know, this was like two or three years ago, and, you know, I'm still holding on to it wasn't in the greatest area, and, you know, I had to put a new roof on it, which, you know, that's. That was like 12 grand. And, you know, there's these expenses that have popped up that I'm like, man, I honestly wish I wouldn't have purchased this and had I dug just a little bit deeper. And again, you're going to make these mistakes. Like, it's cash flowing. It's not like I've. I've lost on the deal, but it's not in the greatest area. And, you know, a couple big capex expenses. You know, capex items have come up, and I'm like, man, if I had my head on straight, I probably wouldn't have ever had to deal with this headache because I bought it in the. In the wrong area on the wrong neighborhood.
- [52:51]
B
So what would you. What would you attribute that to? The fact that, you know, it wasn't in the right area or. And there was, like, these expenses you weren't expecting. Just. So if a listener is like, ooh, how do I avoid that?
- [53:06]
A
Yeah, so it was. I bought it from a wholesaler, so I didn't have an agent. And, you know, wholesalers, they're going to want to move their deal as. As fast as quickly as possible. And they're not incentivized to selling you a good deal or a bad deal just to sell you the deal. Right. Yeah.
- [53:26]
B
They have no fiduciary responsibility by law, to be honest or upfront, really. Yeah. You got to do whatever they want to do.
- [53:34]
A
Yeah. And I have no problems with wholesalers. Right. Like, I've hold, so I've whole, you know, done a few wholesale deals. So it's like, you know, it's, it's, it's a blessing and a curse. Right. And so I, I would say, you know, I, I actually bought this while I was on vacation with my family. And I think that was like the point where I was like. Because I had bought like two other ones previously pretty quickly, and I knew it was a good time and it was like in 2021 where the market was going really well and, And I got, I think I got a little bit too ahead of myself and didn't do all of the due diligence that I know I should have and that, you know, it's like, oh, yeah, I can, I can buy this deal and it'll turn out, but, you know, I certainly haven't lost. But it's. Yeah, I would say in my eyes, I did lose on that one.
- [54:34]
B
Yeah. Well, that's one thing I love about especially long hold investing. It's like, okay, I'm in it more money than I wanted to be. It's more of a headache than I wanted. But like, say you're cash flowing and in the long run, like, as long as you hold on, you don't lose that asset. Which is my number two rule, you know, Number one is, you know, is get as many assets as you can, build that asset portfolio, you know, and then number two is don't lose your assets. Right. Because that's when you lose that. Because if you hold on long, long enough, like, you're gonna come out way ahead, even if it was a headache and you were in it more, you know, which is. Real estate's very forgiving that way if you're doing long hold investing. So I love that. Well, sweet, man. Well, last question. We'll let you go, but maybe we kind of already touched on this. But, you know, I like to ask people, like, what they, what they do to enjoy life. I don't know if you have any buck list items that you're building up for what you're doing to just like, enjoy all. Why we do all this anyway? We're not really buying real estate to buy real estate. Right.
- [55:29]
A
Yep, Yep. Yeah. So what I do, yeah, spending time with my wife and my kids, that's always the top of my priority list. But triathlons, training, I love the training aspect of it. Pushing myself and golfing. Love to golf. And I would also say, yeah, traveling and. And seeing the world and. And experiencing new, new people, places and food. So that's. That's what I like to do in my free time. There's not a whole lot of it.
- [56:09]
B
But, yeah, love it, man. Well, the St. George Ironman half is in 26 days, so I expect you to be there with me. So get on out here. You can crash at my place.
- [56:20]
A
Yeah, yeah, I'll read. Never finished. And then see my. My name on the. On the signup form, so.
- [56:28]
B
I love it. I love it, man. Well, thanks for your time. I appreciate being on the show and sharing your stories. The wins, the losses, and everything between. Thanks, man.
- [56:36]
A
All right, thanks, Joe. Thanks for having me on.
- [56:38]
B
Absolutely. This is Joe signing off for the Real Estate Investing School, the podcast reminding you. Just go do it Tuesday.