Real Estate Investing School Podcast - Episode 226: REAL DEAL: Leveling Up in Life with the Fausett's
Release Date: January 9, 2025
Host/Author: Real Estate Investing School
Title: REAL DEAL: Leveling Up in Life with the Fausett's
Introduction
In Episode 226 of the Real Estate Investing School Podcast, hosts Brody (Speaker A) and his wife, Andrea Fausett (Speaker B), delve into their personal journey of leveling up their life through real estate investing. This special episode focuses on a unique farmhouse flip that not only enhanced their living situation but also significantly contributed to their financial freedom.
1. Overview of the Farmhouse Flip
a. Identifying the Right Property [00:00 - 05:14]
Brody introduces the episode by emphasizing the power of dissecting a single real estate deal to extract valuable lessons applicable to listeners’ own investments. He introduces Andrea as a special guest to discuss a family project that has been instrumental in their success.
Andrea explains their transition from house hacking—where they lived in properties while renting out others—to seeking a more permanent and personal residence. They aimed to find a home that wasn’t a "cookie cutter" property, allowing them to add personal touches and increase its value over time.
"We wanted to find something that we like that we can put some TLC into... a nice home that we really love and enjoy being in."
—Andrea Fausett [02:33]
They meticulously watched a farmhouse listed around $340,000, which had been stagnant on the market. Recognizing its potential despite its dated interiors, they saw an opportunity to purchase it below market value after several price reductions.
"We got it for under $300,000 because they kept dropping it by like $10,000 each time."
—Brody [05:11]
b. Financing the Purchase [19:28 - 20:26]
The Fausett's leveraged an owner-occupied loan, allowing them to secure the property with a low down payment of approximately 3.5%. This strategy enabled them to minimize upfront costs and allocate more funds towards renovations.
"We could avoid capital gains tax by living there for two of the last five years before selling."
—Brody [15:30]
They highlight the importance of understanding leverage in real estate, noting that many potential investors are deterred by the perceived high entry costs. By occupying the property themselves, they not only reduced the down payment requirement but also positioned themselves advantageously for future financial benefits.
c. Remodeling the Property [05:15 - 17:30]
Upon acquiring the farmhouse, the Fausett's embarked on a comprehensive remodeling project. They adopted a "live and flip" approach, renovating parts of the house while residing in it. Key renovations included:
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Basement Remodel: They focused on updating the basement before moving in, allowing them to live upstairs while working on the lower level. Andrea personally handled tiling, adding a kitchen bar to increase the basement’s functionality and value.
"We ended up doing the tile ourselves and hired out the painting because that was something we always hire in the trade."
—Andrea Fausett [10:20] -
Kitchen Updates: The kitchen received new countertops and painted cabinets instead of replacing them entirely to manage costs while enhancing aesthetics.
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Structural Changes: They removed an obstructive walkway to create a more open staircase, significantly altering the house’s interior layout.
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Cost-Effective Upgrades: Small investments like new vanities and slider doors were implemented to modernize the home without substantial expenditures.
"Vanities are so inexpensive to upgrade... and add in a fun mirror and it adds so much."
—Andrea Fausett [11:27]
Throughout the renovation, they balanced doing some of the work themselves to save money while hiring professionals for tasks that required expertise or were time-consuming.
d. Selling and Profits [16:09 - 17:30]
After investing approximately $80,000 in renovations over two years, the Fausett's sold the farmhouse for around $800,000, yielding substantial profits. Additionally, they leveraged the property as an Airbnb during summers, which not only covered the mortgage but also generated extra income.
"We made a couple hundred thousand dollars, which was awesome for us."
—Brody [16:47]
This successful flip allowed them to reinvest the profits into new projects, perpetuating their cycle of growth and financial independence.
2. Investment Strategy Insights
a. House Hacking and Owner-Occupied Loans
The Fausett's transitioned from traditional house hacking to purchasing a primary residence that doubled as a long-term investment. By living in the property, they secured favorable financing terms, demonstrating a strategic blend of personal living and investment growth.
"Leverage is the name of the game. You can use strategies like qualifying for a primary residence loan by living in the property."
—Brody [19:28]
b. Creative Financing and Market Awareness
They emphasize the importance of viewing the real estate market through a creative lens—seeing potential where others see obstacles. By continually monitoring the MLS and being open to unconventional deals, they identify opportunities that align with their investment goals.
"There's always a deal, and there's always a way to make money off of any market anywhere."
—Andrea Fausett [22:36]
c. Balancing Personal Life and Investing
Maintaining a balance between personal life and investment activities was crucial. The Fausett's managed to renovate the farmhouse in phases, allowing them to enjoy the house and host social gatherings even during the remodeling process.
"We did it in phases, so it wasn't like we were always just living miserably and doing it smart."
—Andrea Fausett [17:30]
3. Implementation vs. Information
The hosts discuss the critical distinction between acquiring knowledge and taking actionable steps. While consuming information through courses, podcasts, and social media is valuable, actual implementation is what drives success.
"There's a difference in information and implementation. Information is a course you buy... but the key is to spend more time implementing and less time just learning about them."
—Brody [26:30]
They advocate for investing in mentorship and coaching to bridge the gap between knowledge and practical application, ensuring that investors can effectively execute their strategies and achieve tangible results.
"If you want to get to where you're going and you want to get there fast, hire a coach."
—Andrea Fausett [25:50]
4. Encouragement and Final Thoughts
Andrea and Brody conclude the episode by encouraging listeners to take ownership of their financial futures through proactive real estate investing. They stress the importance of mindset, creativity, and willingness to take risks.
"You have the power to live that dream life. Once you start, you're going to want to keep moving forward."
—Andrea Fausett [22:36]
They invite listeners to join their Real Estate Investing School for further guidance and support, emphasizing that with the right mindset and resources, financial freedom through real estate is attainable for anyone.
"Stop saying you don't know what you're doing and take action. The only way to move forward is to take action."
—Andrea Fausett [24:53]
Conclusion
Episode 226 of the Real Estate Investing School Podcast offers a deep dive into the Fausett's successful farmhouse flip, highlighting practical strategies in finding, funding, and refurbishing a property to achieve both personal and financial growth. Through their authentic discussion, they provide valuable insights for aspiring real estate investors, emphasizing the importance of creativity, strategic financing, and decisive action in building a prosperous investment portfolio.
Listeners are left inspired to evaluate their own investment approaches, adopt a proactive mindset, and leverage available resources to accelerate their journey towards financial independence.
Connect with Andrea Fausett:
- Instagram: @AndreaFausett
- Fitness Coaching for Women: @mamalayfit
Join the Real Estate Investing School to transform your investment strategy and achieve financial freedom.