Podcast Summary: Real Estate Investing School Podcast - Episode 234
Title: REAL DEAL: $500K Equity Win at 22 Years Old
Host: Brody Fawcett
Guest: Jake Ebert
Release Date: February 6, 2025
Introduction to Episode 234
In Episode 234 of the Real Estate Investing School Podcast, host Brody Fawcett welcomes Jake Ebert, a 27-year-old millionaire and seasoned real estate investor, to discuss his remarkable first real estate deal—a $500K equity win at just 22 years old. The episode delves deep into Jake's journey, exploring how he identified, funded, and successfully executed his inaugural property investment.
The First Deal: A Bold Move at 22 [00:00 - 05:26]
Brody (00:00):
Brody sets the stage by introducing Jake Ebert, highlighting his impressive achievements in real estate at a young age. He emphasizes the significance of first deals in building momentum and learning the ropes of real estate investment.
Jake (02:13):
Jake recounts his first deal, purchased when he was 22 years old. Fresh from a year in summer sales and with limited real estate knowledge, he took a bold step by buying a double side-by-side duplex in Provo, Utah, priced at $275,000. Despite skepticism from his family, who viewed the property as a "crap" investment, Jake trusted his instincts and made the purchase without a real estate agent.
Key Insights:
-
Property Details:
- Location: Provo, Utah, near BYU campus and Pioneer Park.
- Type: Duplex built in 1912.
- Purchase Price: $275,000.
-
Family Skepticism:
Jake shares how his family couldn't believe he would invest nearly $300,000 in an old, seemingly dilapidated property:
“The price will go down. They've been going up the last seven, eight years... You're crazy.” [02:52] -
Long-Term Vision:
Despite doubts, Jake's confidence in the long-term appreciation of real estate paid off as the property's value surged over five years.
Remodeling and Refinancing: Building Equity [05:26 - 16:51]
Brody (05:34):
Brody prompts Jake to discuss the current value of the property, considering Jake had invested an additional $80,000 into remodeling.
Jake (05:42):
Jake explains that post-remodel, the property's value increased to approximately $700,000. He details the financial maneuvers that amplified his equity:
- Initial Investment:
- Purchased in cash for $275,000.
- Invested $80,000 in renovations.
- Cash-Out Refinance:
- Refinance at 80% loan-to-value, drawing out $30,000.
- Cash on Cash Return:
- Returns $1,000 per month from rent, equating to a 40% annual return on his initial $30,000 investment.
Notable Quote:
"For $30,000, I make $1,000 a month. You know, like I make 12 grand a year for 30 grand. That's like a 40% return just for my cash on cash." [16:12]
Key Points:
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Rent Strategy:
Initially, Jake rented each side for $750 per unit. After remodeling and refinancing, he increased the rent to $1,400 per unit, significantly boosting monthly income. -
Mortgage Details:
- Post-Refinance Mortgage: Approximately $200,000 remaining.
- Monthly Mortgage Payment: Reduced to $1,250, making the rent highly profitable.
Overcoming Doubts and Market Skepticism [09:48 - 16:06]
Brody (07:33):
Brody addresses the potential misconception that real estate always appreciates, cautioning against overspending based on assumptions.
Jake (07:37):
Jake acknowledges the double-edged sword nature of his advice. While he encourages investing despite market fears, he emphasizes the importance of due diligence:
-
Buy and Wait Philosophy:
“Don't buy and wait, don't wait to buy, buy and wait.” [07:33] -
Finding the Best Deal:
He underscores the necessity of identifying a great deal in the current market to mitigate risks, advising against random purchases without proper analysis.
Notable Quote:
"Everyone's going to tell you not to do it. Everyone's going to tell you rates will come down. Everyone's going to tell you that the price will drop. [...] If you can afford the payment now... then you'll never go wrong." [13:41]
Jake's Strategy:
-
Independent Searching:
Jake found the duplex without an agent by networking with an agent showing the property and seizing the opportunity when it presented itself. -
Risk Management:
Even if initial cash flow seemed tight, Jake prepared for fluctuations by ensuring he could still cover mortgage payments through rent or his primary income.
The Importance of Action and Education [23:46 - 28:09]
Brody (26:03):
Brody highlights the significance of taking action despite uncertainties and shares the philosophy that investing, even without immediate gains, fosters a long-term investor mindset.
Jake (23:46):
Jake advises aspiring investors to educate themselves minimally and then take action:
-
Education Before Action:
He recommends dedicating about a month to learning through podcasts, books, or other resources before making a purchase. -
Learning by Doing:
“Start looking and just buy something and jump in.” [23:46]
Key Takeaways:
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Hands-On Experience:
Actual investment experience outweighs prolonged theoretical studies in building investor confidence and knowledge. -
Avoiding Diversification Pitfalls:
Jake shares personal regrets over diversifying investments too early, emphasizing the benefits of focusing on real estate's proven returns.
Notable Quote:
"When you're trying to get financially free, like, don't try and remit the will. Don't try to find that one crypto that's going to pop off." [25:40]
Final Thoughts and Encouragement [28:34 - End]
Brody (28:34):
Brody encourages listeners to connect with Jake and apply the lessons shared. He emphasizes taking actionable steps toward real estate investing.
Jake (28:34):
Jake shares his social media handles, encouraging listeners to reach out for guidance and support in their real estate journeys.
Closing Remarks:
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Empowerment Through Investment:
Both hosts underscore the transformative power of real estate investment in achieving financial freedom and personal growth. -
Community and Support:
Listeners are invited to engage with the Real Estate Investing School community for mentorship and collective learning.
Key Quotes Highlighted:
-
Jake Ebert on Cash Flow:
“For $30,000, I make $1,000 a month. You know, like I make 12 grand a year for 30 grand. That's like a 40% return just for my cash on cash.” [16:12] -
Jake on Overcoming Fear:
“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 or whatever it is, then you'll never go wrong.” [13:41] -
Jake on Education and Action:
“Start looking and just buy something and jump in.” [23:46] -
Brody on the Investor Mindset:
“You become the person who invests in yourself. You become the person that invests in real estate. You, you now become an investor.” [16:06]
Conclusion
Episode 234 of the Real Estate Investing School Podcast offers invaluable insights into the mindset, strategies, and actions that propelled Jake Ebert to achieve a $500K equity win at a young age. Through candid discussions, practical advice, and motivational anecdotes, Jake and Brody inspire listeners to take control of their financial futures through informed and decisive real estate investments.
Connect with Jake Ebert:
- Instagram: @jake_ebert
- TikTok: @jake_ebert
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