Podcast Summary: Real Estate Investing School Podcast Episode 208: REAL DEAL: The Three Key Factors to Being a Great Investor Release Date: November 7, 2024 Host: Real Estate Investing School (Brody) Guest: Alex Mashburn
Introduction and Guest Background
[00:00] Brody: The episode kicks off with Brody introducing Alex Mashburn, a seasoned real estate investor and one of the first to purchase a program from Real Estate Investing School over two years ago. Brody expresses enthusiasm about Alex’s journey and achievements in real estate investing.
[00:08] Alex Mashburn: Alex reciprocates the greeting, setting a friendly and collaborative tone for the discussion.
Alex's Real Estate Journey
[00:37] Brody: Brody reflects on Alex’s initial foray into real estate, noting that Alex owned his first property with the intent to convert it into a rental a year later. He highlights Alex’s use of no and low money down strategies to build wealth without needing substantial initial capital.
[00:51] Alex Mashburn: Alex confirms that he and his wife owned their first property, initially living in it before deciding to house hack and rent it out. He mentions reaching out to Brody for guidance during the early stages of his investment journey.
Overview of the Recent Deal
[02:31] Brody: Brody introduces the focus of the episode: a recent real estate deal that Alex undertook a few months prior. He outlines the structure of the summary, which will cover how Alex found, funded, and executed the deal.
[02:43] Alex Mashburn: Alex provides an overview of the deal—a single-family house listed as an Airbnb property. He emphasizes the property’s unique features, such as an 1100 square foot patio near a canyon and national parks, making it attractive for Airbnb guests. He also notes the importance of both emotional and logical factors in selecting such investments.
Finding the Deal
[03:47] Brody: Brody seeks clarification on the property type and the factors that influenced Alex’s decision to pursue this particular deal.
[04:10] Alex Mashburn: Alex explains that he found the property on Zillow, highlighting that many lucrative deals are available on public listings. He points out that the seller needed to offload the property quickly due to financial strains, leading to a favorable purchase price. The property's unique features and location near the canyon were key attractions.
Notable Quote:
"There's so many deals out there, people don't know how much equity they have." [04:10] - Alex Mashburn
Funding the Deal
[06:21] Alex Mashburn: Alex discusses his funding strategy, which diverges from traditional 20-25% down payment loans. Instead, he utilized a 10% down investment property loan offered by Mountain America Credit Union, avoiding mortgage insurance and reducing initial cash outlay.
[08:51] Alex Mashburn: He elaborates on negotiating the purchase price from nearly $400,000 to $315,000, with the seller covering $10,000 in closing costs. This approach maximizes leverage and improves cash flow potential.
Notable Quote:
"We got it for $315 and had them pay all 10 grand in closing costs." [08:51] - Alex Mashburn
Partnering Strategy
[10:00] Brody: Brody transitions to discussing how Alex partnered with others to finance the deal, emphasizing the importance of collaboration in real estate investing.
[11:08] Alex Mashburn: Alex admits that partnering was initially challenging as he preferred solo endeavors. However, he recognized the value in helping others invest their money into real assets. His partnership model focuses on mutual benefits, aiming for substantial cash-on-cash returns for both parties.
Notable Quote:
"I’m just telling them to move it into a real asset that makes them money." [12:36] - Alex Mashburn
Structuring the Partnership
[18:11] Alex Mashburn: Alex details the partnership structure for this deal: a 50/50 split on both equity and cash flow. His partner contributed the $30,000 down payment, while Alex managed the operational aspects, including obtaining a business license, setting up the Airbnb listing, and overseeing renovations.
[20:17] Alex Mashburn: He explains how utilizing a solar improvement loan with zero down allowed for additional renovations without impacting his own financial input. This strategy enhanced the property’s value and cash flow potential.
Notable Quote:
"We’re in it at zero, and then my partner is really, really high. That’s a win-win scenario." [21:50] - Alex Mashburn
Cash Flow and Returns
[22:00] Alex Mashburn: Alex outlines the financial outcomes of the deal, projecting an annual profit of $30,000 to $40,000. He anticipates fluctuating monthly cash flows, with higher earnings during summer months due to the property's Airbnb status.
Notable Quote:
"Each deal is a million dollars when you consider taxes, appreciation, and cash flow over 30 years." [27:03] - Alex Mashburn
Advice for Aspiring Investors
[24:32] Brody: Brody prompts Alex to share advice for listeners looking to scale their real estate portfolios and generate passive income effectively.
[24:45] Alex Mashburn: Alex encourages investors to maintain a humble mindset focused on continual growth. He emphasizes the importance of leveraging partnerships and the education provided by Real Estate Investing School to identify and execute profitable deals.
Notable Quote:
"Have a humble mindset of continual growth and let other people do some of the hard work for you." [25:20] - Alex Mashburn
Conclusion and Contact Information
[25:47] Brody: Brody wraps up the episode by thanking Alex for his insights and encouraging listeners to connect with him on Instagram for further discussions and deal inquiries.
[26:05] Alex Mashburn: Alex emphasizes the value of the Real Estate Investing School in accelerating his learning curve and achieving success in his investments.
Notable Quote:
"The value from that is so infinite. I probably have like a 2000% return on Real Estate Investing School." [26:20] - Alex Mashburn
Key Takeaways:
- Leverage Low Down Payment Loans: Utilizing special loan products can significantly reduce initial investment costs, allowing for better cash flow and portfolio expansion.
- Strategic Partnerships: Collaborating with partners who provide capital while you handle operations can create a mutually beneficial investment structure.
- Maximize Property Potential: Investing in properties that require renovations or have unique features can enhance their marketability and profitability, especially in platforms like Airbnb.
- Continuous Learning and Networking: Engaging with educational resources and building a network are crucial for identifying and executing successful real estate deals.
- Long-Term Perspective: Viewing each investment through a long-term lens, considering taxes, appreciation, and cash flow, can transform the perceived value of each deal.
Notable Quotes:
- Alex Mashburn: "There's so many deals out there, people don't know how much equity they have." [04:10]
- Alex Mashburn: "We got it for $315 and had them pay all 10 grand in closing costs." [08:51]
- Alex Mashburn: "I’m just telling them to move it into a real asset that makes them money." [12:36]
- Alex Mashburn: "We’re in it at zero, and then my partner is really, really high. That’s a win-win scenario." [21:50]
- Alex Mashburn: "Each deal is a million dollars when you consider taxes, appreciation, and cash flow over 30 years." [27:03]
- Alex Mashburn: "Have a humble mindset of continual growth and let other people do some of the hard work for you." [25:20]
- Alex Mashburn: "The value from that is so infinite. I probably have like a 2000% return on Real Estate Investing School." [26:20]
Connect with Alex Mashburn:
For more insights or to discuss potential partnerships, listeners are encouraged to reach out to Alex Mashburn on Instagram @AlexMashburn.
This episode offers valuable strategies and firsthand experiences from a dedicated real estate investor, making it an essential listen for both novice and seasoned investors aiming to enhance their investment tactics and build substantial passive income streams.