Podcast Summary: Real Estate Investing School Podcast

Episode 174: REAL DEAL: Building $500k in Equity on My First Deal with Jake Ebert
Date: July 11, 2024
Host: Brody Fawcett
Guest: Jake Ebert

Episode Overview

This "Real Deal" episode features Jake Ebert, a young and successful real estate investor who shares the detailed story of his very first real estate purchase at age 22—a duplex in Provo, Utah. Jake and host Brody Fawcett dive deep into how Jake found, funded, and “forced” value into this deal, resulting in building approximately $500k in equity in just a handful of years. The discussion addresses fears and misconceptions around buying the first property, how to approach deals in pricey or uncertain markets, cash flow numbers, the mindset required to take action, and practical advice for aspiring real estate investors.

Key Discussion Points & Insights

1. Background & Context of the Deal

• Jake’s Age & Experience: Started at 22 after a year of summer sales (01:43–02:52).
• Deal Selection: Chose to discuss his first deal, as it's typically the hardest and most educational (02:13–02:52).
• Property Details:
  • Duplex in Provo, Utah, near BYU campus
  • Purchased for $275,000 (03:21)
  • Built in 1912, side-by-side units
  • Family and friends were skeptical, concerned about the property's age and condition (04:00–05:26)
• Current Use: Jake still owns and rents it out as a long-term rental.

2. Numbers Breakdown

• Purchase and Rehab:
  • Bought for $275k
  • Invested ~$80k into a full remodel (05:39–05:41)
  • All-in cost: ~$355–$360k (05:42)
• Current Value: Estimated at $700k (05:44–05:52)
• Mortgage and Rent:
  • After a cash-out refinance, owed ~$200k with a $1,250/month mortgage (19:42)
  • Both units rent for $1,400 each; total $2,800 monthly income (19:39)
• Cash Outlay: After refi, Jake has ~$30k of his own cash in the deal (17:42)
• Return: $12,000/year cash flow, about a 40% cash-on-cash return at one point (17:43–17:59)

3. How Jake Found the Deal

• Was house hunting without an agent, met an agent at another property who told him about the Provo duplex (08:32)
• Bought the cheapest multifamily property he could find in Utah County at the time (08:48–09:12)

4. Mindset: Overcoming Fear and Analysis Paralysis

• Facing Doubts: Family told him he was "crazy" for buying such an old, expensive property. The sentiment was: "Everyone's calling you crazy and that whole stage" (02:13–03:21, 12:37–13:40)
• Buy and Wait Philosophy:
  • "Don't wait to buy, buy and wait" (07:41)
  • Look for the best deal available in the current market rather than timing the market (07:49–09:12)
• Difference Between ‘Scared’ and ‘Stupid’ Investment: “There's a difference in doing it scared and doing it stupid. You shouldn't invest stupid, but, like, you should invest scared.” – Brody (09:56)
• Impact on Identity: "You become the person who invests in yourself…that alone...would have been worth it because I became the person who…now [is] an investor." – Brody (15:15–16:06)

5. Funding & Forcing the Deal (BRRRR Strategy)

• Funded with Cash: Used summer sales earnings and savings (16:51)
• Cash-out Refinance: Refi’d after renovation, pulling back most of his cash—ended up with just $30k left in (17:42)
• Value-Add (‘Forcing’):
  • Heavy remodels/upgrades, increasing rental income and property value (18:00–19:39)
  • Allowed gradual rent raises and increased tenant quality over time

6. Advice for New Investors

• Don’t Over-Study: “If you start studying real estate and you spend any more than 30 days studying it before you buy something…you're making a mistake.” (24:22)
• Learn, then Leap: Spend a month learning, then buy something as soon as you can afford to (24:32)
• Don’t Get Caught Up in Excuses: "You can always find an excuse. You can always find a way to do it. It's up to you." – Brody (22:11–22:14)
• Don’t Chase Other Investments Blindly: Jake points out that each time he invests outside of real estate, he regrets it compared to the dependable returns from real estate (25:40–26:02)
• Accept that Fear Is Normal: Everyone is nervous until you do your first deal—no one is immune! (11:04–11:30)
• Cash Flow Isn’t Everything Day 1: Even if the numbers just break even, rents/appreciation often improve, and simply getting started matters (27:32–28:09)

Notable Quotes & Memorable Moments

• On Taking Action Despite Doubt:

  "Everyone's going to tell you not to do it...If you can afford the payment now—and you can afford that mortgage with rent from your own units or from your own job...you'll never go wrong. In five years, you'll jump on a podcast like me and say, I'm so glad I bought that."
  — Jake Ebert (13:41)

• On the Mindset Change:

  "You become the person who invests in yourself. You become the person that invests in real estate. You now become an investor...and that's what I do. That's who I am. That's how people saw me. So that's how I saw myself. That's how I acted."
  — Brody Fawcett (15:15–16:06)

• On Learning By Doing:

  "My advice is just learn a little something...but after a month of learning...start looking and just buy something and jump in."
  — Jake Ebert (24:22–24:32)

• On Excuses vs. Action:

  "You can always find an excuse. You can always find a way to do it. Like, it's up to you."
  — Brody Fawcett (22:11)

• On Not Waiting for the 'Perfect' Time:

  "Don't buy and wait, don't wait to buy; buy and wait."
  — Jake Ebert (07:41)

Timestamps for Key Segments

• Introduction and Jake’s Background: 00:00–03:21
• Property Details and Purchase Logic: 03:21–05:52
• Renovations and Value Creation: 05:34–09:47
• Mindset & Facing Fear: 09:47–13:40
• Cash Flow Numbers and Funding Mechanics: 16:47–19:54
• Strategic Advice for New Investors: 23:46–26:51
• Reflections on Lessons and Identity: 14:04–16:06
• Wrap-Up, Social Media, Where to Find Jake: 28:34–29:40

Closing Thoughts & Call to Action

Brody wraps up with encouragement for listeners to not just be inspired, but to take the information, write it down, and apply it—reminding everyone that the real value is in action, not just knowledge.

Where to reach Jake:
Instagram: @jake_ebert (Jake_ Ebert)

Final Note:

• “Don’t just let this sit in your noggin…go apply it…go make something happen.” – Brody Fawcett (29:40)

This episode is a deep dive into the real numbers and realities of a first-time property investment—reminding new investors that imperfect knowledge and a little fear are normal, but the biggest regret is waiting too long to get started.