Real Estate Investing School Podcast

Episode 178: REAL DEAL – Turning Education into Execution with Noah Evans

Date: July 25, 2024
Host: Real Estate Investing School
Guest: Noah Evans

Overview

In this special “Real Deal” episode, host Brody sits down for a candid, conversational deep dive with investor and returning guest Noah Evans. The focus: a complex recent real estate flip that didn’t go as planned—and how Noah creatively turned significant setbacks into a long-term win. The episode brims with lessons on humility, resilience, structuring creative deals, and why sharing your wins and losses can have unexpected power in the real estate world.

Key Discussion Points & Insights

1. Noah’s Background & Inspiration

• Noah reflects on his journey into real estate, crediting Brody as his initial inspiration from their college days ([01:14]).
  • He moved from Utah to Washington, lost his startup network, and after realizing traditional employment wasn’t working for him, reached out to Brody, found BiggerPockets, and dove in.
  • Early days were marked by repeated failure (“failed forward”), but persistent learning and scaling, eventually doing 20–30 flips a year (“Don’t ever want to do that again!” [01:52]).
  • Core lesson: “The education is worth way more than any dollar amount… just becoming a competent business person and becoming less afraid of failure.” ([02:38])

2. Embracing Failure and Personal Growth

• Noah and Brody underscore the importance of learning from losses rather than being devastated by them ([04:17]).
  • “You have to forgive yourself and be gracious… there’s some things out of my control.”
  • “What’s important is more so your connections with people… focus on how much you’ve grown as a person and how much more capable you are rather than worrying about a dollar amount.” – Noah ([04:46])
• Daily self-evaluation: Brody recommends rating yourself in key categories and course-correcting early ([06:01]).

3. The Power of Sharing Publicly

• Both reflect on how public sharing and education (on podcasts, social) can light the spark for others.
  • “Had you not been sharing what you were doing, I wouldn’t have known…” – Noah ([07:53])
  • They want listeners to do the same: share real, unfiltered stories, including the tough moments.

4. Deep Dive: The Real Deal Flip

Property Overview and Initial Plan ([09:37]–[18:23]):

• Purchased: April 2022, “distressed farmhouse on three acres” near Boise, Idaho.
  • Noah admits up front—it was a bad time to buy in that market, just before a sharp downturn.
  • “My first mistake… if I would have caught it here and removed my ego… I probably would have not done the deal.” ([09:49])
• Mistake #1:
  • Overestimated after-repair value (“ARV”) due to ego and poor comping for outlier features like a barn and acreage.
  • Skipped due diligence on real value for barn (was worth less than assumed).
• Mistake #2:
  • Delegation fail: Gave full rehab control to an employee without proper oversight or accountability. “Delegation doesn’t mean I don’t have to do it—it means assigning roles, expectations, KPIs.” ([10:47])
• Mistake #3:
  • Undisclosed plumbing disaster: Seller claimed plumbing was brand new, inspector missed major issue—bathroom drained to dirt; surprise $18K expense. ([12:51])
  • “From a zero dollar budget to $18K just like that…” – Noah

Deal Funding Structure ([14:10]–[17:06]):

• Purchase Price: $326,000
• Planned Resale: $460–$470k
• Rehab Budget: ~$55k
• Goal: $75–100k profit
• Funding:
  • Hard money (first position)
  • Private lender for rehab funds (second position)
  • Seller carryback: Structured $40k of the price with the seller in third position (“Most people are too scared to even ask… but I told her carrying some debt could get her more money overall.” – Noah [15:16])
  • His own funds unsecured.
• Interesting point: Hard money lender (Fixated Funding) was “creative” and allowed the seller carry to count toward down payment (with post-closing recording) ([17:06]).

Market Shock & Creative Pivot ([18:23]–[24:16]):

• Market crash: Listed at $450k (break-even), zero activity, just as Idaho was seeing “fastest drop in real estate history.”

• Lowered price to $419k—still no offers, even after negotiating with buyers to build extra features.

  • “At $419k I was just going to lose all my money, but my investors would be paid off. That’s better than owing somebody else money.” – Noah ([18:48])

• Instead of selling, Noah pivots:

  1. Long-term refinance: DSCR (Debt-Service Coverage Ratio) loan at 8%.
  2. Rental experiment & creative multi-use ([21:50]–[24:16]):
     • Rented house + garage: $1,850/month (higher than expected).
     • Barn: $1,100/month (high demand, found by listing on Facebook marketplace).
     • Plan: Add 3 RV pads ($20k infrastructure cost), with each as separate income sources.
     • Potential to rent out remaining pastures for livestock.
  • Outcome: What would have been a $1,400–$1,500/month loss becomes projected $750/month positive cash flow, with upside for more.

  “You just gotta get creative. I ain’t going to lose money on this deal.” – Noah ([24:04])

Negotiating with Seller & Recovering Losses ([25:20]–[27:10]):

• DSCR appraisal came in at $495k—annoying since it didn’t sell, but helped refinance.
• Using evidence of plumbing misrepresentation, Noah negotiated $40K seller carry down to $27,500—recovering part of his unexpected costs ([25:49]).
  • “That reduction, plus the equity built in from the appraisal report, I don’t bring any money down. So that’s pretty cool.” ([27:10])

Handling Ongoing Landlord Challenges ([27:23]):

• Even with new plumbing, immediate issues: tenant plumbing complaints, septic problems. Noah focuses on rolling with the punches and treating them as learning opportunities.

  “If you focus on all the negative, that’s all you’re going to find. Instead, I get to learn how to put in these RV pads, test a new business model. We might do long-term on two and the third on campsites.” – Noah ([28:17])

5. DSCR Loan Deep-Dive & Lending Lessons

• Brody and Noah discuss nuances of DSCR (Debt-Service Coverage Ratio) loans ([28:35]–[30:56]):
  • DSCR lender allowed Noah to use passive income from other rentals to help qualify, since the subject property alone wouldn’t have cash-flowed.
  • Process was paperwork-heavy (“They literally helped me do my taxes for the next year.” – Noah [30:51]), but worth it to refi without more money down.

6. Key Takeaways and Mindset

• Persistence and creativity can turn a sure loss into a long-term win.
• Real-world deals involve constant learning—about people, processes, and yourself.
• Sharing your journey—the good and bad—can inspire and help others.
• Memorable lines:
  • “The education is worth way more than any dollar amount… just becoming less afraid of failure.” – Noah ([02:38])
  • “Share my wins, my losses on social media… don’t ever know who that’s going to impact.” – Noah ([07:53])
  • “You just gotta get creative. I ain’t going to lose money on this deal.” – Noah ([24:04])
  • “If you focus on all the negative, that’s all you’re going to find.” – Noah ([28:17])

Notable Quotes & Memorable Moments

• On Brody’s Influence:

  “You’re the guy that actually inspired me to go into this. Like, I almost cried because it’s pretty cool… it’s a full circle thing…” – Noah ([01:18])

• On Failure:

  “Money comes and goes… one month you make a million bucks, the next you lose it all. But you, as a person, haven’t changed, or hopefully you’ve changed for the positive.” – Noah ([04:46])

• On the Importance of Public Sharing:

  “Had you not been sharing what you were doing, I wouldn’t have known… That’s why it’s purposeful for me to share my wins, my losses on social media—never know who that’s going to impact.” – Noah ([07:53])

• On Creative Problem Solving:

  “This just doesn’t work. But I can’t let this be the story… So we got creative…” – Noah ([21:50]) “We’re going to get weird, but I ain’t going to lose money on this deal.” – Noah ([24:04])

• On Learning and Mindset:

  “If you focus on all the negative, that’s all you’re going to find… Instead I get to learn… test out a new business model.” – Noah ([28:17])

• On Persistence:

  “You got a cool story… took a while to get your first deal, and you just kept grinding. That’s awesome.” – Brody ([33:36])

Timestamps for Major Segments

• 00:00 – Episode kickoff, background on Noah Evans
• 01:14–04:17 – Noah’s journey into real estate; learning from failures
• 04:17–07:53 – Lessons from losses; importance of growth and relationships
• 07:53–09:37 – Power of sharing; setting the stage for the “real deal” story
• 09:37–18:23 – Deal breakdown: property, mistakes, funding structure, problems
• 18:23–24:16 – The market tank, failed sale, creative pivot to multi-revenue rental
• 24:16–27:10 – Turning a loss into cash flow, negotiating down seller carry note
• 27:23–28:35 – Plumbing dramas, continuing challenges, positive outlook
• 28:35–31:03 – DSCR loan, paperwork, leveraging other rental income to qualify
• 31:19–34:31 – How to connect with Noah (Instagram, Freedom Hotline), fun story from early days
• Throughout – Recurrent themes of resilience, creativity, and giving back through honest conversation

How to Connect with Noah Evans

• Instagram: @NoahEvans
• Freedom Hotline: Book a free 1:1 call via the link in his Instagram bio—offering four coaching calls per week for anyone seeking advice or guidance ([31:19]).
  • “I’m happy to help people.” – Noah

Final Thoughts

This episode stands out for its openness about failure, humility, and real-world grit. Noah’s willingness to share both missteps and out-of-the-box solutions makes this a must-listen for investors at any stage. The emphasis on growth, honest storytelling, and resilience offers encouragement—and plenty of actionable ideas—for anyone facing turbulence in their investing journey.