Summary of Real Estate Investing School Podcast Episode 239: "Low Risk High Upside Real Estate with Tanner Huber"
Release Date: February 24, 2025
Introduction
In Episode 239 of the Real Estate Investing School Podcast, host Joe Jensen welcomes Tanner Huber, a seasoned real estate investor and the Director of Sales at V3 Electric. At 30 years old, Tanner has amassed a substantial real estate portfolio, currently holding over 36 units that generate approximately $200,000 in annual cash flow. This episode delves into Tanner's strategies for low-risk, high-upside real estate investments, his approach to building a successful team, and valuable lessons learned from his investment journey.
Balancing a Sales Career and Real Estate Investing
Tanner shares his journey of managing a demanding sales career while simultaneously building his real estate portfolio. Initially, real estate was a primary focus, but recent career changes have shifted its role to more of a secondary endeavor. Nevertheless, Tanner emphasizes the importance of transitioning real estate investments from an active to a more passive role through effective team building.
Notable Quote:
"The better that you get at it, the more that you do it, you can do it a little more passively, and it takes less and less time." — Tanner Huber [02:00]
Mentorship and Assisting New Investors
A significant part of Tanner's investment philosophy involves mentoring new investors. He actively refers individuals to his trusted real estate agents and professionals, helping them overcome the initial hurdles of investing. Tanner believes that supporting newcomers not only fosters a community but also strengthens his own investment endeavors.
Notable Quote:
"I help my new reps get into real estate because that first one's the hardest. Once you do your first one, then you get the confidence that you can go and take down a bunch more." — Tanner Huber [02:20]
Shifting Perspectives on Real Estate Investment
Tanner discusses how perceptions around real estate investment have evolved, both for himself and those around him. Initially skeptical due to rising interest rates, Tanner realized the multifaceted returns of real estate—appreciation, tax benefits, principal paydown, and cash flow—which rekindled his passion and commitment to the market.
Notable Quote:
"When I started, after looking at the spreadsheet and seeing all the potential revenue streams, I realized how good it was and just went full-time." — Tanner Huber [06:34]
The Importance of Building a Reliable Team
A cornerstone of Tanner's success is his dedicated team comprising a real estate agent, a general contractor, and a property manager. By collaborating with professionals who understand his investment strategy, Tanner ensures seamless operations and efficient property management, allowing him to focus on scaling his portfolio.
Notable Quote:
"My agent and her husband are just real estate 100% of the time. They handle everything from walkthroughs to prepping properties for Airbnb." — Tanner Huber [12:08]
Strategic Leveraging and Cash Flow Management
Tanner emphasizes the importance of leverage in maximizing returns while maintaining low risk. He prefers maintaining a 1:5 leverage ratio, ensuring that each investment is adequately funded without overextending financially. This approach allows for continued portfolio growth and mitigates the impact of potential market fluctuations.
Notable Quote:
"I like to try to get back to a 20% or a 1 to 5 ratio. If I can maintain that, great." — Tanner Huber [26:14]
Identifying and Evaluating Lucrative Deals
Tanner employs a clear buy box strategy, focusing on specific metrics like price per bedroom to quickly assess the viability of potential investments. By setting strict criteria, he filters out subpar deals and concentrates his efforts on properties that align with his high-return objectives.
Notable Quote:
"I found this ratio of what I'm looking for per bed that helps me analyze deals just real quick. If it's worth $70,000 a bed, I gotta open that up and see where the flaw is." — Tanner Huber [37:10]
Innovative Approaches: Student Housing and Multifamily Investments
Tanner highlights the profitability of student housing and multifamily properties. By optimizing units for student use or increasing the number of bedrooms, he significantly boosts rental income and property value. These strategies result in impressive cash-on-cash returns, sometimes exceeding 100% in the first year.
Notable Quote:
"I bought a duplex at a discount because it was listed at 8 bedrooms instead of 10. After modifications, my cash flow increased by $2,400 a month." — Tanner Huber [30:17]
Challenges and Lessons Learned
Tanner recounts a significant mistake involving hard money loans and encountering a potential Ponzi scheme. This experience taught him the importance of thorough due diligence and understanding the legal aspects of real estate transactions. Despite the setback, Tanner managed to mitigate losses and extract valuable lessons for future investments.
Notable Quote:
"I lost maybe $25k in the whole thing, but it sucked, dude. I learned a lot." — Tanner Huber [49:08]
Final Thoughts and Recommendations
In closing, Tanner advocates for a realistic and disciplined approach to real estate investing. He encourages investors to align their strategies with their strengths and realities, emphasizing continuous learning, active searching, and the importance of leveraging professional networks.
Notable Quotes:
"Understand your strengths, understand your weaknesses, and work on those weaknesses and close that gap." — Tanner Huber [44:34]
"Real estate investing is active. You need to be actively searching, creative, and educated to find better deals." — Tanner Huber [29:56]
Conclusion
Episode 239 of the Real Estate Investing School Podcast provides invaluable insights into low-risk, high-upside real estate investing through Tanner Huber's experiences. From building a robust team and employing strategic leverage to innovative property management and learning from mistakes, Tanner offers a comprehensive roadmap for both novice and seasoned investors aiming to maximize their real estate portfolios.
Podcast References:
- "Low Risk High Upside Real Estate with Tanner Huber" — Real Estate Investing School Podcast, Episode 239
- Transcript Coverage: [00:00] to [52:55]