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- [00:00]
Ashley Kerr
This is the Real Estate Rookie Podcast. My name is Ashley Kerr and I'm here with Tony J. Robinson. Welcome to the podcast and today we have a very special bonus episode for our rookie listeners.
- [00:15]
Tony J. Robinson
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- [01:16]
Diana
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- [01:58]
Unknown
On.
- [01:58]
Ashley Kerr
WhatsApp, no one can see or hear your personal messages. Whether it's a voice call message or sending a password to WhatsApp, it's all just this. So whether you're sharing the streaming password in the family chat or trading those late night voice messages, that could basically become a Podcast your personal messages stay between you, your friends and your family. No one else, not even us. WhatsApp message privately with everyone. As content creators around real estate, we are trying to get better at showing you guys behind the scenes things that happen and not just the podcast recordings. We recently received an email and this email was from a principal and they do all of these programs with their students to teach their kids about financial literacy and getting started in real estate. Tony and I are really passionate about helping young people get started. One of my biggest pet peeves is that I've seen people graduate high school and not even know how to read a check or write a check. And I think financial literacy is so important and is not taught enough in a lot of homes or at schools. So Diana reached out to us asking if we would be open to answering some questions for, for her that she could relay and bring back to her students. So we went ahead and pushed record on this interview so you guys could be like a fly on the wall and listening in. Hopefully this is helpful to you guys so this won't be like a normal interview. I'm just gonna hit play right now on the interview. And Diana kicks it off with asking us the first question.
- [03:48]
Unknown
If educators had one hour to teach people something about young people, something about real estate, what do you think is like the most important piece that they could get? If you just had one hour for every single kid, no pressure in every part of the United States, what would you tell them to teach them?
- [04:05]
Ashley Kerr
I would have to teach them how to analyze a deal and to understand the numbers of like, this is what buying a piece of property can do for you as far as appreciation, building that equity, that long term wealth, but also the cash flow. And I think looking at the numbers, being able to visualize, we say this all the time with like trying to get your spouse on board as to like, show them what it looks like on paper, map this out, analyze the deal for them, show them where the money is coming from to buy it, show them where you know what the expenses are going to be, show them what the cash flow is going to be, what does the risk look like? So that would be the biggest thing I would say is like how to actually analyze a deal and show them how to do that.
- [04:51]
Unknown
Yeah, Ash kind of stole my answer. I love that. So I guess I want to, I want to try and give something slightly different. I think maybe what I would focus on is, is what is the alternative look like to not investing in real estate? Because I think that was the the, the lesson that my dad drilled into me when I was younger, and it was, if you don't build something alongside your W2 income, then you'll have to get up and go to work every day until, you know, you're however many years old. But if you start to plant seeds and you start to do things today, then one day, that day will come, hopefully much faster where you can wake up and have some choice, some freedom around what it is you choose to do. So, yeah, I love the idea of, like, the tactical side of analyzing, but maybe it's also that mindset piece of if you don't do this and what are. What are you actually signing up for?
- [05:43]
That's what you would start with. Kind of like the mindset, the conceptual piece as well. Or maybe pair them alongside each other.
- [05:50]
Yeah, yeah. Just, you know, I don't want to say, like, the big lie, but, you know, it's like we've all been fed this one version of what the American dream looks like. And. And I think most people who get there realize that it's not all that it's cracked up to be, you know, and it's like you've got the choice of making some different decisions to hopefully get a different outcome.
- [06:08]
Ashley Kerr
This really, like, shows, like, the difference in me and Tony. Like, I am so analytical and like, Tony is such a better, like, visionary.
- [06:16]
Unknown
Yeah, but that's what it plays. That's what plays well together, you know, especially with youth, because you want to, like, inspire them and get them excited to get that initial, like, click and like, oh, wait, we can do things different. But then it goes the other way and you want to, like, be able to ground them in something realistic as well. Be like. Yes. And. Right. So what do you think is a common being? The. What I kind of just said, but, like, what's a common myth about real estate investing that students should know is not true?
- [06:43]
Don't believe everything you see on social media. Right. Like, the. There's so many young people, and I know this because I have a son who's 17. There's so many young people on social media who are talking about how easy it is and how much money they're making and what it looks like, but there's so many of those people who aren't necessarily making money in real estate, but they're making money by teaching other people how to do this thing they did one to one or two times. And I think if you get caught up in the, the, you know, the, the influencers who are driving fancy cars and living in high rise apartments, you start to get this unrealistic view of what real estate actually looks like and the amount of work that actually goes into it. My son, he went virtual this year. Like he, he did like homeschool basically. And one of his goals during this semester was that he wanted to get his first wholesale deal done. And I told him, I was like, I love that you're doing this, but I don't think you're going to do it in the five months you have for this semester. I was like, you'll be lucky if you get one deal before the year is over. And you know, we're in May. Sue hasn't closed the deal yet, you know, so I think having realistic expectations about the time, the effort, the energy that actually goes into it.
- [08:00]
Ashley Kerr
Yeah. And I guess a little piece to add on to that is that this isn't like a, in most cases isn't a get quick rich scheme. Like, yeah, you may make a bunch of money off doing a flip here and there, but then there could be deals where you lose a lot of money that basically wipes out that profit you had made from a previous year. But I think really focusing on the long term play of real estate and what, how that can impact your life of just building retirement, building generational wealth. I think touching on the personal finance piece too, as far as reinvesting what you're making from real estate into buying more real estate or into paying off your mortgages and having free and clear properties, but like not using that cash flow or the initial money to actually increase your cost of living and like still being able to be diligent by living below your means and not inflating your lifestyle as your, you know, cash flow grows and grows so that you can keep reinvesting it.
- [09:10]
Unknown
The lifestyle creep concept. So like, so I mean, you can use. Both of your kids are kind of teenage age, right? I think, Ashley, you have like, you have a couple in that range, right?
- [09:20]
Ashley Kerr
Middle, high school, three boys. But my oldest, he's only 11.
- [09:22]
Unknown
So then, so with students with kids like that, like, how do you, how do you balance the, the excitement and the like wanting them to believe the pieces about generational wealth and also the inevitable, like, not if, but when something goes wrong. How do you kind of like, do you prepare them or are you just kind of like, I don't want to prepare you because I want you to figure it out and like the, the negative experiences you have are actually going to be positive for you. Like, how do you counter that the.
- [09:48]
Ashley Kerr
One thing I will say is like talking to them about what is happening in the business, like what is going on in the properties, including them in the conversation, like letting them know about the highs and the lows and not necessarily telling them what to do, but just like talking about it so they're there listening and understanding all the ups and downs. But, but honestly, Tony is the best one to talk about this because like, for the first couple years we were podcast hosts. He literally every day would come out with this lesson that he taught his son and you know, this life lesson. And so Tony, you really are knowledgeable in this thing.
- [10:26]
Unknown
Real estate stories, bedtime stories.
- [10:29]
It's hard, right? Because I, I think that I, like, I was literally just, we were just talking to my son like a couple weeks ago and he was kind of like down on himself because he felt like he's like, like behind from where he should be and, and behind because AKA he hadn't like done what he was hoping to do. And you know, we, we sat down and we told him and we're like, out of all the 17 year olds that are walking around on the planet, you've probably done things that maybe 1% of them have actually done. And it's like if we had started doing what you're doing at 17, we would be in a very different situation now because we would have had such a huge head start. So I, I think the lesson that we were trying to tell him in that moment was like, you, you failed, I guess, in hitting your goal of getting the deal, you know, while you were still doing this whole virtual thing. But failure is a part of what's necessary to, to be successful. And when you meet someone who hasn't failed a lot, you're t typically meeting someone who hasn't succeeded a lot either. It's hard to be super successful without having failures along the way. So instead of looking at the failure as something to avoid, you've got to look at as something that's necessary to get to that next step. And if we just what it means to fail, it makes it easier to keep moving forward when you meet those obstacles.
- [11:42]
Yeah, that's, that's a, that's a huge one. And I think maybe because this generation is just, it's more seemingly more immediate, that's. They see successes that seem quicker. Right? It's, it's a little bit more difficult for them to, to fail and believe that they're still on the path. It's always hard in general, but like, I feel like we didn't Always have so many levels of success that seemed like they happened so fast right in front of us. But so what continuing like, so what small steps can young people take now to prepare for investing later? Whether they have a parent like you in the house, more likely than not, they probably don't have having people like that to kind of guide them. So what can they do even on their own to prepare?
- [12:24]
Yeah, I think maybe the biggest things are just continuing to educate themselves. And that's something that we tell to rookies of all ages. Listening to podcasts, watching YouTube videos, reading books, just like engrossing yourself in the knowledge. But I think the huge advantage that a teenager has when talking about becoming a real estate investor is that everyone wants to help them. Everyone wants to help the, the 16 year old that wants to buy their first real estate deal. So even if you don't have a parent in the house or someone that you know personally that's doing real estate, if you go and you know any, you know, Facebook, meetup.com wherever. Bigger pockets, if you find where some of the local real estate events are happening in your area, you know, and Dana, you're, you're in New York, right? So there's tons of real estate groups and meetups and things in, in the city that you're in. Go there and just be honest with people. Hey, I'm. However old you are, I'm just looking to learn. Can I come work for you? Can I do this for you? Can I, can I intern with you?
- [13:34]
Oh, people would eat that up in a second. Yeah, for sure.
- [13:37]
You know, they'd eat it up. So I think that's the biggest thing.
- [13:39]
Ashley Kerr
Even in the Bigger Pockets forums. Like if someone were 16 and they were to post in there. I'm 16. I'm just getting started. Here's what I've learned so far. This is what I'm looking to do and wanting to learn more about. There will be so many more comments than if somebody who's my age went and commented the same thing. I'm so and so I want to do this like to the, a younger person there would be way more response because there would be excitement of like people like me regretting not starting at 16 that they'd want to help this person get started. Yeah. I think the only other thing I would add is understanding personal finances as to like, what are some of the basic elements of having a strong personal foundation, learning how to live within your means. What do you actually need to do to get pre approved for your first loan? Like when you know, if you're deciding you want to buy a house hack when you're 18, what are things that you know a lender is going to want from you? And the same thing, reach out to a local lender in your area. Even when you're 16, you can email and say, I want to buy a house in two years and I'm 18 and what would I need to do in the next two years? Instead of waiting until like okay, you're ready, then going and then saying, well, you have no credit. You needed to have X amount saved for the type of property you want. You don't have enough. Like be having that time to get yourself ready is such a huge benefit.
- [15:24]
Unknown
Yeah, I think that's a great idea. That's actually, that's something I hadn't even ever thought about is like teaching them in terms of like the, the networking piece and like we, we talk about it but like, but showing them exactly where forms are or where meetups are. Because you're right, like I've been to, you know, X amount of meetups in my life, but like showing them how to access those. I think that's, that's a great idea. I'll do that next week actually. And also for that generation too because they're not as person to person, obviously they live in more of a digital world. So that's interesting. So segueing kind of a little bit more to. Actually no. Do you have any off the top of your head, do you have any specific episodes or stories from your interviews? I know I remember a few of yours that I have shared with them in the past. But off the top of your head, what stories seem to do you think would resonate with, with young students that like maybe educators couldn't use in the classroom or something?
- [16:22]
Ashley Kerr
Yeah, we actually had an episode with Dan Sheiks and he does something similar where he works at a school and teaches a lot of financial literacy and stuff like that. It was episode 179, so episode 179 and it's from freak to financially independent as a full time teacher. So he went, he goes on and talks about like lessons that he does to educate his kids in his classroom about becoming financially independent and what do you think about.
- [16:59]
Unknown
So in terms of educators who have limited real estate experience, how do you think they can effectively teach these concepts? Like what are a couple of steps that they can take specifically to make themselves feel more confident to kind of engage students in this topic?
- [17:16]
Ashley Kerr
Read the book real estate rookie. 90 days, your first investment. It's a book that I wrote and it basically lays out a blueprint of like, these are the steps you should take and in which order you should take them. And it's just like a very easy to understand breakdown of each of those steps to actually get your first deal and what that looks like. And it's just like all encompassing. Like there's so much information on the Internet about real estate investing and what I tried to do was really take that information and condense it into steps and a path. So I think that book would give you like a good overall understanding of what it looks like to do real estate investing.
- [18:00]
Unknown
Yeah. Because I'm putting a couple of books in the, in for each chapter, I'm putting some books in the appendix like to support the, the outside learning when people are continuing to become educated. And I love, I would love something like that.
- [18:11]
I think Rich Dad, Poor dad is probably the other book that should be required reading for like everyone before they graduate from high school just to get the right mindset. Because it's not, you know, it's not as much an X's and O's book about real estate investing and it's not even, honestly the book isn't even really just only talking about real estate investing, but it's just a good mindset book about what does it mean to actually build wealth today. And you know, how do you put together assets that pay you versus buying things that become liabilities for you. So even for teachers who aren't investing. Yeah. Ashley's book on the tactical side. And then Rich dad poured out on the more like mindset side.
- [18:52]
There you go again with your mindset. Yeah, no, I did, I did. I, I did that. This the last two years. I do the intro in the first chapter because I feel like those are the, like they really grip the kids really quickly and then we like segue into exes and old books. Like writer was cute like right after that. So yeah, it's a great. They really like that one. What hands on or real world projects do you think could help students grasp real estate basics? Like let's say like. So I, I do a unit that's about three weeks. So I have my own like concept of it. But like if you had your choice to teach them for a couple weeks or a month or something like that, like what would. What kinds of projects do you think that the young people should experience?
- [19:33]
Ashley Kerr
This just shows what a bigger pockets groupie I am. But like just going on to biggerpockets.com, there's so many like calculators or tools or resources to play with. So, like just the calculator to analyze a deal. Having the students take a property off the mls, inputting the numbers into the deal analysis and seeing what the outcome is. Like, how exciting to see, like, oh, this person's having $500 cash flow. The deal this person picked has negative $200 cash flow. So, like giving them a scenario as to, okay, you each have this much money as a down payment. You're going to get a loan for this amount. This is your interest rate amortized over how many years. This is the. The area you guys are looking for a deal in these markets. And then have them go and scour the MLS and have them analyze it. And then they each present their deal and if it was a winner and a loser, and to compare, you know, and like, maybe go through and say, like, okay, this, you know, this. Why do you have zero for property taxes? You forgot this. And, like, kind of break down through each of their deals and figure out things they could have done better or done differently. But. And it kind of plays into some competition as to, like, who can find the best deal, too.
- [20:52]
Unknown
I think I would have them call homeowners, and maybe the best way to do this is if they're like, calling for sale by owner properties.
- [21:01]
Ashley Kerr
I'm dropping out of your class, Tony.
- [21:03]
Unknown
It's very high pressure. It's a very high pressure class.
- [21:06]
But the reason why I say that is because I feel like if you do that, you kind of get a mix of everything. Like, if you want to. If you really want to negotiate a deal with someone on a phone, you've got to know what purchase price makes sense. And in order to back into your purchase price, you've got to have a good sense of, hey, what is it going to cost me to rehab this property? What am I going to be able to rent it for? What kind of expenses should I include? So you get the element of the deal analysis, but then you also get just like the. The negotiation side of being a real estate investor. And to Ashley's point, like, not everyone's going to need to build that skill, you know, But I think, like, if you really want, like, the. The fastest way to get indoctrinated into the world of being a real estate investor, like getting on the phone and actually talking to someone and trying to buy their house from them.
- [21:51]
Ashley Kerr
But that is a great skill to develop. Like, I should have developed that skill at some point in time, you know, Like, I probably would be better off. Like, yeah, that's graded.
- [22:02]
Unknown
So do you in do. So I. So I generally I do a week of residential and then I do a week of. What Ashley is kind of alluding to is the analysis. I use the four square method and they analyze properties in different locations and then they. For the first time, we did a house flip project this last week to teach them kind of those numbers around that. Do you also think something like, like Airbnb or like short term rentals or are a good thing to also include or do you think that like that comes in time if that makes sense?
- [22:34]
I think exposure to the different types of investing would be good for them, you know, knowing that there's different ways to get started. Because yeah, maybe someone hears regular long term rentals and their eyes glaze over, but they hear self storage. You know, there's like a teenager out there that gets super excited about self storage for whatever reason. Right. So yeah, I think giving them some sort of exposure to the different avenues makes. Makes sense.
- [22:56]
Thank you. I appreciate that. That was so helpful.
- [22:59]
Ashley Kerr
Thank you for wanting to. To interview us.
- [23:02]
Unknown
Yeah, I'm a bigger pockets nerd as well. So I've been the last since I bought my first one. Even before I bought the first one I was. I've been spiraling into bigger pockets, holes, wormholes for a long time.
- [23:14]
So are you going to the conference in Vegas this year?
- [23:17]
No, I don. Think so. I think it conflicts with something. What is it in the summer?
- [23:21]
Ashley Kerr
In October?
- [23:22]
Unknown
Yeah, I'm. I think it conflicts with an education. There's an education conference I'm presenting at in New Orleans and I think it. The ce.
- [23:29]
Ashley Kerr
The.
- [23:30]
Unknown
Yeah, the CEE conference. Like they wrote the National Financial Literacy Standards. So I think it conflicts with that one.
- [23:35]
Oh yeah. Hopefully we can get you out to one of the. One of the upcoming BPCons.
- [23:39]
It's in Las Vegas this year.
- [23:40]
It is, it moves around every year.
- [23:42]
Let me look again to make sure that.
- [23:44]
Ashley Kerr
Yeah, and Diana, where can people reach out to you or find out more information?
- [23:49]
Unknown
Sure. Yeah. I'm on LinkedIn, so LinkedIn is. I'm on there pretty often and I post stuff about financial literacy and about students and different projects and fun stuff that we're doing. I also have an Instagram Diana Dinero underscore Edu. So either of them or I have an. I have an email as well.
- [24:08]
Ashley Kerr
Well, great. Thank you so much for joining us today.
- [24:11]
Unknown
Yeah, thank you. I appreciate your time. It was awesome.