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Rich Dad Radio Show: In-Your-Face Advice on Investing, Personal Finance, & Starting a Business
How I Escaped Crushing Debt with ONE Real Estate Deal
00:40:03
👉 Get Your Free Copy of "How to Buy Your First Investment Property" - https://bit.ly/3NJLquO In this episode of the Rich Dad Real Estate Show, I sit down with the incredible Henry Washington – a real estate investor with over 130 properties and a...
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- [00:00]
A
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- [00:59]
B
Welcome to the Rich Dad Real Estate show where we talk about the good news and bad news of real estate hosted by yours truly, Jaron Sussar. Go down in the show notes. I got a free training come up where I'm going to teach you how to buy real estate using other people's money with the best strategy in the entire world. It's coming up so make sure you go in the show notes and sign up today. Today I have a special guest, one of my favorite investors in all the world. Love hanging out with him when I see him in conferences. Henry Washington. Henry's got 130 plus rental properties. He's done wholesaling, he's done fix and flips. He's a co host on the Bigger Pockets on the Market and the real estate show. He's the author of Real Estate Deal Maker and coaches people all across the world country to to be able to do real estate deals and he's personally helped me along my journey as well. So Henry, thanks for being on the show today. I'm excited to hang out.
- [01:47]
C
Hey man, thanks for having me. This is cool man. You're stepping it up now, huh?
- [01:51]
B
They, hey, they must have been hurting bad. They were hunting for talent.
- [01:55]
C
Lost the hat and, and, and got.
- [01:58]
B
The collared shirt on. I'm telling you, they got me buttoned up over here. Rich dad, it's a, it's a great brand. I love.
- [02:04]
C
Your shirt's tucked in, isn't it?
- [02:06]
B
Hey, if the truth or on I got shorts on underneath. I gotta, I gotta stay on camera. But I, I love your entire real estate, all of it because you've, you've really done it all. You know when hear, when I hear your story when I talk with you. But if we were to rewind it back. How'd you get into it?
- [02:27]
C
I. I woke up one day and I was married. And then that's. That's literally how it felt because we got married so fast. Like, we only. We met each other and knew each other for 365 days, and then we got married. So I woke up one day and I was married. And. But my finances weren't grown up yet, so I had debt and bad credit, and it was just. I was. Let's just say I was financially holding my spouse back and I was supposed to be the financial head of household. So I, I knew I needed to make a change. So I, I desperately looked for a way to, at that point, was to just make extra money. And that's how I learned about what real estate investing was, was just through that desperation Google search. And I don't know, man, I felt a peace with it. I felt like if there are all these people, these regular folks had figured out how to do it, then I should be able to figure out how to do it too. And something just felt right with it. You know, I can't really explain it. You just know when something feels like, all right, well, this. This seems like something I'm supposed to do. So we started. I started down that path and of education. And 90 days after that Google search, slash panic attack, I bought my first house.
- [03:49]
B
Wow. Wow, wow, wow. So it sounds similar to mine. It's like I remember waking up one day and I was like, dude, I, I. Something's. Something's got something right, but, but something I think there's a. There's a lot of correlation to people I talked to have had success in real estate, but they started kind of broken behind the eight ball.
- [04:07]
C
Yeah.
- [04:08]
B
And I think what me and you try to do and other. Other folks who have had success in investing and they have brands and they're able to teach people now is I think we try to, like, grab people and get their attention and say, hey, don't wait until you're in the position that Henry was or that Jeremy was before you start to decide to change your life. We don't have to get the quote, unquote, rock bottom. Do these things now, and the climb will be a little bit easier for you.
- [04:34]
C
Yeah, yeah. It'd be nice if, if, if that's how it would work. You know, a lot of the times people need that come to Jesus moment where they go, oh, man, I got like, this. Something has to change because this business is hard, dude. Like, you know, unless you have that thing that's gonna either that. That you don't want to go back to or that thing, that reason that you're doing it that's bigger than yourself. It's hard to stick to, man, because it's not easy. I still, like, I still. Some weeks, I'm. I'm like, man, why did I do this? Why. Why am I doing this right now?
- [05:13]
B
But then you're able to go back, like you said, to that foundational piece and say, all right, this is why I started it in the first place. I think I say this a lot on this show. There's a reason they call people who are successful the 1 percenters.
- [05:23]
C
Yeah.
- [05:24]
B
Remember why? I love that. If you're not looking on YouTube, Henry's got a photo behind him that says, remember. Essentially, remember why you started. Just keep going back to the why. Because it's going to be hard. And to become a 1 percenter, that means you got to be different than 99% of other people when you do that. It's not easy. It's. It's very uncomfortable. And there are times, as your journey progresses, will it become more comfortable? I think so. I think it's like you go and you ride a bike, and it's uncomfortable to ride a bike at first, Then you get it, then it becomes comfortable. But still, no matter how close.
- [05:58]
C
Yeah. But then you start navigating rough terrain in that bike. So then you're still uncomfortable.
- [06:03]
B
Yeah. You want to go mountain biking now you're not riding around the driveway.
- [06:05]
C
Yeah.
- [06:06]
B
With training wheels anymore. Yeah, you're exactly right. I love. I love that analogy. Did you use real estate to clean up your finances, like, to get out of that bad debt, or did you do that through, quote, unquote, a job and then you started investing in real estate after?
- [06:20]
C
No, I started where I was with bad credit and no money. So the. The thought that buying a house was going to fix my financial problems was absurd when you look back at that. But no, the drive to want to succeed at it helped me start to clean it up. So a lot happened in that 90 days from when I had that Google search panic attack to when I bought that first property. You know, the. The laundry list of things that happened were the first and foremost, I had to figure out how to do it. So I surrounded myself with as many investors as I could in my local market. Like, I didn't even know meetups were a thing. Like, I was just Google searching, like, real estate investors in northwest Arkansas. And then if there was a meeting or something, I would Just go. Like, I didn't even know, like, if I had a member membership. I didn't care. Like, I just showed up. Like, I'll figure it out. I was just inserting myself around as many investors as I could because I wanted to see who was doing it and how they were doing it. And I just figured if I was around them, I would learn something. The next thing I did was we started to save 10% of our income just because I figured at some point I'll need some money, and so, like, I'll just save 10% of my income, and if I don't have enough money to pay my bills, well, then I'll figure it out. Right? Like, but we just started to save and pay ourselves first, which I had never done in my life. But the drive to want to be successful just forced me to say, all right, we're going to start saving. We'll figure out the rest. I'm going to get around these investors. And then I had to start cleaning up my credit. And so I hired. I hired, like, a credit repair company, like a virtual company, who helped me to clean up my credit. And I hired somebody to kind of talk to what was going on. And it's funny, I probably didn't need to hire that person because they were just like, you know, you know what you should do to fix your credit. And I was like, no. Like, let's hear it. And they were like, you see this stuff here that. These balances that are bringing your score down that have been reported to collections. Yeah. Like, you should pay them.
- [08:29]
B
Well, I was gonna ask you, are these guys legit?
- [08:33]
C
You should pay those people, and then your score will just go up. This is crazy.
- [08:38]
B
It's 2500 for some common sense education, baby. Well, I always wondered. I'm like, are these credit rep folks?
- [08:44]
C
So. So some of them. Some of them are completely legit, and some of them are scammy, and you got to kind of do your research. The. The company, the virtual company I used to help me. They just kind of helped me, like, file disputes on some stuff. And. And that was helpful. It did raise my score a little bit. But the thing that raised my score the most was just paying off some of the bad debt. You know, I tell folks, like, that's the best credit repair hack I've ever. I've ever seen was just pay what you owe. Now I get it. Some people can't, because medical debt's crazy, right? And, you know, if you have some crazy, astronomical debt that you can't pay off, then, yeah, you have to go search for some way to try to figure that out. Maybe it's a payment plan, maybe it's something else. But for me, and I think for a lot of people, we all have like some stuff on our credit that like, like for me, I had two things specifically that I knew was on my credit report, that I was just on my high horse about it. I did not feel like they should have charged me for it. I felt like they were in the wrong and I wasn't going. I wasn't going to pay them for this because they didn't charge me right. And yada, yada, yada, but it was, it was stopping me from getting to my wealth or financial freedom. And so I had to just bite the bullet and say, you know what, I'm just going to pay these people even though they wrong. Because my mom used to say, you can be dead right? Like, you can be right, but it still can impact you negatively. So how many people you think live.
- [10:05]
B
With that mentality overall? I mean, I feel like it's something that the majority of people fight is they allow other people's actions toward them, which can be terrible at times.
- [10:15]
C
Yeah.
- [10:16]
B
But they let it just literally suppress everything that they could be if they would just forgive or move on.
- [10:24]
C
Yeah. Swallowing your pride is tough sometimes, man. I mean, that's what it was. I was prideful about that these people did me wrong with these charges. I mean, it's funny because one of those charges was a landlord charge. A landlord charged me to replace the carpet in a unit that I was like, not the, like the carpet wasn't replaced right before I moved in. Like, I was like the fifth or sixth tenant who lived there. And then I got stuck with the bill for replacing the entire carpet. And, you know, I didn't really do anything to it. So I, I felt some type of way about it. Now it's funny that I'm a landlord and I don't do that to tenants.
- [11:00]
B
Do the right. That's, that's how you do not do the right thing.
- [11:03]
C
Right.
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B
You don't follow the. You do not follow the lead.
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C
And so I was like, I ain't paying that. And it was just negatively impacting me to the point where, you know, it was hurting me be able to get loans.
- [11:13]
B
That's frustrating. Hey, that guy's got what's coming to me. And I know that you're not that type of landlord. I've heard you talk about how you help your tenants. And we can, we can break some of that down a little bit. It's interesting when you talk about paying down debt. We had 115k that we did and we knocked it out. Took us about five years.
- [11:29]
C
Yeah.
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B
And it wasn't fun. But our secret was the same thing. Take the debt that you have and pay it off. And we use the debt snowball. So we started with the smallest debt, got it paid off and the next one, next one, next one y. And we were able to eventually get it, get it knocking out. I tell people, if you are trying to build wealth with a lot of debt, consumer debt, and I mean, you will talk about good debt, there's really good debt. But bad consumer debt, I equate it to quicksand. It's like you keep trying to trudge, you're trying to climb out and it just keeps grabbing you and pulling you back in.
- [12:00]
C
Maybe that's what they meant in all the cartoons. Because I've always felt like when you were a kid, like quicksand was going to be this thing you had to deal with at some point in your.
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B
Life you were dying from.
- [12:10]
C
But I've never ever seen quicksand. Like it's never happened. So I was like, that's a lot of preparation for. But it's, it was a metaphor for debt. Oh, see, that's it.
- [12:20]
B
We need to get a T shirt made asap.
- [12:23]
C
That's it.
- [12:24]
B
I'm claiming rights to that. Henry, do not take. So what was that first deal? Like, what did you, did you buy rental? Did you flip wholesale? How'd you get in?
- [12:32]
C
Yeah, it was a rental property. Man. I'll tell the story, I'll try to tell it as briefly as possible. But the, the way I found that first deal was also one of the things I did in that 90 day period was I'm just a firm believer in, in this world, you get what you give. Right? Like, I don't care if you believe in Jesus or the universe or whatever. Like the principles are very similar. It is you, you get what you put out into the world, right? Like, you know, so if you want money, then find a way to give somebody some money or give some organization some money. And it's, it's, it's, you know, magic, how it just seems that, you know, you get what you need when you need it. And so I was like, I'm just going to tell people I'm a real estate investor. I don't. I want the things real estate investors have. And so I'm going to put that out into the world. If I don't believe I'm going to do it. Then nobody else should believe me. So I was just putting it out there. And so that's literally how my first deal came to me. My buddy called me and asked me to buy his house. He said he was. He was stuck between a rock and a hard place. He needed to sell his house. In 30 days, he had let somebody move into it, and they were paying the mortgage. They were supposed to fix their credit so they could buy the house. By this particular date, he needed to sell the house so that he could use that money to buy another piece of property. And the time had come for him to buy that piece of property. And he was like, man, I got to get this money fast. And so he was like, dude, if you can close on my house in 30 days, I'll sell it to you for 1 16. I know it's worth 165, 170, but I don't. I don't care, because 116 gives me the exact amount of money I need. Can you buy it? And I was like, man, yeah. Yeah, I can buy it. I didn't know how to buy it. And so he was like, all right, well, what do we do? I literally had to Google how do I buy a house without a real estate agent? And follow, like, the steps for putting it under contract? Because I didn't know what that meant. I had to download a contract off the Internet. We signed this vague contract I downloaded off the Internet, which is terrible legal advice, but great action steps.
- [14:38]
B
You made it happen.
- [14:39]
C
Right? Right. And I. We signed this contract, and then I was like, all right, man, I need some money, because I only had $1,000 in my savings account. And so I went to a bank, and I did a very thorough analysis of which bank I should go to. And that analysis was that the bank was close to my office. So I walked into the bank closest to my office, and it just happened to be a community bank. And I just happened to talk to the commercial lender because he was standing in the lobby. Wow. And. And he looked at my contract and said, bro, this is a great deal, and we would love to finance it. And he hadn't pulled my credit or anything. And. And so he talked to me about it. He was like, we'll lend it to you. We're going to lend you 85, and we'll lend you the rehab money. 100 of that if you have a 15 down payment, which was like 17 grand or something, which I did not have, but I didn't tell him that. But I walked into that bank needing 116, 000, and I walked out needing only about 15 grand. So it was a win. It was a win in my book. So I had to go find the down payment.
- [15:48]
B
That's a huge win. Knocking that. Knocking that down by $100,000. We can make that happen. We'll talk about it after the break. We'll be right back with Henry Washington. Welcome back to the Rich Dad Real Estate show, where we're talking about the good news and bad news of real estate with Henry Washington. So, Henry, you're working on that first deal.
- [16:07]
C
Yeah.
- [16:07]
B
You got to buy for 116 grand. You go into the bank, the banker didn't look at your personal finances or credit. He just looks at the deal, what it could cash flow, what you're buying it for, what it could be worth. And he's like, bro, we're going to loan you, what, 80% of that. You got to go find the other 85%. You got to go find the $16,000 down payment. How'd you go about that?
- [16:26]
C
Yeah, and. And to clear things up, they eventually did run my credit. But he was. So. He knew that it was a good situation for the bank when he saw how good the deal was, and he was like, yeah, man, we want you to. Want you to bring this here. And so, yeah, I didn't have that money, obviously. And so I. I leaned on my network of invest. Been building relationships with. Since I started the. The. The. The journey of trying to learn how to do this. And I went to that real estate investment group, and I was like, how the heck do y'all find the down payments for these, like, and one of the guys kind of brainstormed with me a bunch of different ways to try to get access to capital, none of which were going to work. And then he ended up talking to me about borrowing from my 401k, and I didn't know what that meant. I. I thought you could only cash it out, but you can borrow against your 401k, and your takes the payments out of your paycheck directly and with interest, but the interest is yours because it's your money to begin with, so you're paying yourself back with interest. And he was like, and if you rent the house out and it cash flows, technically your cash flow is paying back the money to you, so your tenants are essentially paying back that loan. And I was like, boom, that's what we're going to do.
- [17:34]
B
Then let's do it.
- [17:35]
C
Let's do it. I just got to go find a 401k because I didn't have one. He thought I did, but I did not because I was not smart enough to invest in one when I was. So we borrowed it from my wife's 401k and we bought the property. We raised the rents, kept the same tenant in it because he wanted to stay there, put the rents at market rents, and we did just that. The property paid for itself and paid us some cash flow and paid off the. Paid back the loan that we used to to borrow with the down payment. And then that lender contacted me and asked me to take out a line of credit on the equity in that property. And I didn't know what that meant either. So he had to explain to me what a line of credit was. I applied, got the line of credit, and then now I had access to about 20 to 25 grand or something like that on the line of credit that I could use. And he basically told me, he was like, hey, so now we want you to bring us more deals like this. If you bring us more deals like this, we'll fund it 85% again. We'll give you 100% of the renovation, and then you can use this line of credit as your 15% down payment so that way you don't have to spend any of your money. And then if you sell that house, like, you flip it, then you pay off the line of credit with the proceeds, or if you rent that house out, you can refinance it and pull the cash out and pay off the line of credit. So he was explaining to me the burr method before there was a fancy term for it. Like, he was, like, walking me through how to leverage other people's money to grow my real estate business. Because he really, I mean, I brought him a house for 116 that was worth 160. He knew in his head, like, if Henry doesn't make his payments, we'll just take the house back. Then we'll go sell the house ourselves. And even if we don't sell it for 160, if we sell it for 1, 130, 140, we'll make way more money doing that than we will on the interest payments he's making. Like, it was a safe investment for a community bank. And so he wanted us me to keep bringing them. So he helped me form this, like, banking partnership where I brought them good deals, they financed them, and we grew together.
- [19:29]
B
There is nothing, in my opinion, that competes with buying undervalued real estate.
- [19:34]
C
Oh, that's it.
- [19:35]
B
And I don't care what asset class you're in. I had Devon own, you know, Devon Canard last night.
- [19:41]
C
He literally.
- [19:42]
B
I'm pretty sure Devon mentioned it the same way. He either said, that's the sauce or that's the game. It's like everybody that I interview and talk to and the way I invest, whether you're doing single family self storage, I talk with AJ a couple weeks ago. AJ's doing it with self storage, apartment complexes, Warren Buffett buying businesses and stocks. The key everybody listening to this is go find undervalued properties, properties that are worth this much, but you're able to get them at a huge discount. Then you can force appreciate them, make them more valuable through rehab, and then either keep them in your portfolio, you sell them. It's. It's not rocket science. You got to learn the blueprint of how to do that.
- [20:20]
C
Right.
- [20:21]
B
But that is. That is the outline.
- [20:24]
C
People think that, you know, that it's just hard or impossible to do. Right. But no one thinks about literally with every thing in the world, cars, chairs, furniture. Like, look around your house. Everything in there was bought undervalue by somebody and then sold at a higher price.
- [20:47]
B
Yeah.
- [20:48]
C
You just have to figure out how not to be the. The end consumer. You have to figure out how to be the wholesaler, the distributor of that property, of that, of that item. Right. Like, yeah, cars are expensive, but car dealers get them at a discount. Right. Like somebody buys something at a discount and sells it for a profit. You got to figure out how to be on the, on the side that's buying at the discount.
- [21:09]
B
I love that. That' basis of business.
- [21:11]
C
That's it.
- [21:11]
B
You hit the nail on the head. Doesn't matter. You're right. I literally look around this room, and everything is the same thing that we do in real estate. Just maybe it's a different product, or maybe there's not as good a margins, or maybe there's better margins, but somebody niches down on it and, you know, then you get into the conversation of, okay, well, why wouldn't I go just, you know, buy furniture and resell it? Well, now you can, yes, create cash, but what you can't do is hold on to that piece of furniture for a long period of time. It pays off the.
- [21:40]
C
And you can't leverage it to go buy more.
- [21:43]
B
And you can't leverage it to go buy more. So then. So then if somebody wants to get smart and try to say, well, I can just do that, it's easy. You can, that's flipping. You make some money. But if you want to build wealth, you got to buy assets.
- [21:53]
C
You got to hold on to them.
- [21:54]
B
You got to hold on to them. And you know, you've done it 130 plus times. So, yeah, it's hard. It's not easy. But guess what? Henry has gone out and done it 130 plus times. You heard other people on the show, you can do it if you take the time to learn. How important to you is networking. Because I heard you talk about it and then I hear everybody talk about. I said this last week. There are two, two things that I hear from wealthy people that made them wealthy. Number one is networking. Just forcing themselves into rooms that maybe they weren't even invited to, but they found their way in it. And the second is sometimes you got to. And then the second is delayed gratification. Those seem to be the two main ingredients for successful people.
- [22:38]
C
Now that's, that's truth, man. And I think it's. Yeah. Who you choose to surround yourself with lets you know what's possible. So if you don't think you can do something, you, you probably can't, if that's the mindset that you have. But I would urge you to go find people who are doing it and see if you can't put yourself around them in some way. Maybe it's that you're going to, you know, do some work for one of them. Maybe it's that you're going to. I don't care if, if you're going to babysit for them, right? Like if you can put yourself around two to four people who are doing the thing that you think you can't do, or that's impossible. I promise you, after six months to a year, it won't seem like you can't do it anymore. It'll be more like, why, why aren't I doing this yet? You know, I interviewed a guy on a podcast once, his very first real estate deal was like a 200 unit apartment building. And we asked him, I was like that, you know, most people don't do that. Most people start with a single family and then they buy a duplex and then they buy like a, you know, 6, 8, 12 unit and then they sell all that and they go buy an apartment building, right? Like 1031 into something, something bigger. Like people step their way up into multi family. Like, why did you start there? And. And he basically said, he basically said like my favorite quote from like a comedian, Louis C.K. he said, I I didn't know I couldn't do that. Like, he was like, he was like, every one of my friends buys multifamily apartments. He's like, that's just who I'm around all the time. Wow. And so I never, like, I never had that limiting belief that it's not something I could do. Like I see everyone do. That's just what I did. Right. And, and so your network truly does show you what's possible.
- [24:40]
D
Donald Trump returned to office and Republicans take control of the House and Senate. It's huge news, but the challenges we face as a nation are still here. In four years of chaos, the dollar has lost value. Inflation run rapid, interest rates through the roof, and wars rage across the globe. Trump has inherited an economy that's a total mess and the burden to rebuild is huge. This isn't going to get fixed overnight. Especially with the ongoing assaults of the dollar from brics nations and our growing national debt. Your savings are still vulnerable. Gambling with your wealth is not an option. If we have learned anything is that we need to take action and protect what we've worked so hard to earn. That's why we partner with Allegiance Gold, a company we trust to help you protect your financial future. Gold and silver are time tested ways to hedge against economic chaos. They're not just investments, they're peace of mind for your wealth. When you start your investment with Allegiance Gold today, you'll get free silver as part of their exclusive offer. Just mention Robert sent you and they'll take care of you. Don't sit on the sidelines. Act today. Secure your wealth. Go to protectwithrobert.com or call 8443-robert. That's 844-376-2378. Let them help you get started. For techwithrobert.com Donald Trump returned to office and Republicans take control of the House and Senate. It's huge news, but the challenges we face as a nation are still here. In four years of chaos, the dollar has lost value, inflation run rapid interest rates through the roof and wars rage across the globe. Trump has inherited an economy that's a total mess and the burden to rebuild is huge. This isn't going to get fixed overnight. Especially with the ongoing assaults of the dollar from BRICS nations and our growing national debt. Your savings are still vulnerable. Gambling with your wealth is not an option. If we've learned anything is that we need to take action and protect what we've worked so hard to earn. That's why we partnered with Allegiance Gold, a company we trust to Help you protect your financial future. Gold and silver are time tested ways to hedge against economic chaos. They're not just investments, they're peace of mind for your wealth. When you start your investment with Allegiance Gold today, you'll get free silver as part of their exclusive offer. Just mentioned Robert sent you and they'll take care of you. Don't sit on the sidelines. Act today. Secure your wealth. Go to protectwithrobert.com or call 8443-ROBERT. That's 844-376-2378. Let them help you get started.
- [27:23]
C
For techwithrobert.com I think the challenging part for people is people don't know how to network. I think people just expect to show up someplace and then magic happens and you learn something. And that's not how it works, right? Like you when Pete, when we're telling people, hey, you need to go grow your network or you need to be networking, it's, there's a, there's a formula for you to be able to do it right. And so the way I tell people to network is be super, like, be relentlessly consistent in your networking. And what I mean by that is like when I went down this journey after my panic attack, I wanted to find people who did this. And so I just found real estate meetups and I went to all of them. I went to all of them every month no matter what. And most people don't do that. Most people, they find a real estate group and maybe they go for the first couple of months and then the third month life starts happening. You got this thing and you want to do this other thing and then you fall off for a couple of months and then you show back up a few months later like you're not building a solid network that way. Right? You build a solid network by consistently being in the room every time. Be diligent about where you sit. Go sit in the front of the room, front and center. You know, people go to networking events and they go sit in the back. You know who sits in the back? Everybody else who don't want to do nothing, you know, sits in the front. People who ain't afraid to be called on or be involved in the conversation. So typically those people are doers. They're typically the people who are getting deals done. Go put yourself in proximity to the people who are doing the work. If you go sit in the front of the room every time and you're there consistently, people who are successful will automatically think you're successful because you're moving and Shaking like a successful person does. And when they find out that you haven't done a deal yet or that you're just getting started, you know what they're going to want to do, Bro, come on, let me show you how we do this right. Come on, let me help you. You build that network. You got to act like people who are successful. Don't just go sit in the back of the room and go to one or two meetups every here, there. You got to go every time. And then when you're networking, people think that the secret sauce to networking is just being in the room. But that's not the secret sauce to networking. Networking is not about what you get from networking. Networking is about what you give. Stop thinking about what it is that I need when I go to a networking event. We need to take human nature and use it to our advantage. So when you network, you go to a networking meeting and write this down before you go five times. I will find somebody to be of service to. I will find somebody to be of service to. Just get your brain ready and listening for people for what you can help somebody with. Maybe it's something related to real estate. Maybe has nothing to do with real estate, right? But if you write that down and you turn your brain on to start helping you listen for who can I help? When you're having conversations or you're overhearing conversation in networking events, you'll start to figure out how you can help. Maybe you'll overhear somebody saying, I'm struggling with my website and you might know somebody who's great with websites. You don't even have to be the person to provide the help to be of service. You can just say, hey, I heard you're struggling with your website. My buddy is great with websites. Do you mind if I just make a quick email introduction? Boom. Do an email introduction. That person is going to remember you over everybody else in the room because you tried to help them and you didn't ask for anything in return. Whether they end up using your friend or not, they'll remember you for trying to help. Maybe you'll hear somebody say they need a babysitter and you have your wife can do it or you can do it. Maybe you'll hear somebody go to the people who are hosting the meetup and ask them, can you help them? Can you take names and emails out the door? They always need help. Find a way to be of service. When you start helping people a you stand out. People remember you and they'll want to work with you, they'll want to help you be successful. But B, when you give, you get like, put human, put that in the universe to work for you by being a giver. And then you'll start to get these great relationships and resources. People will want to help you because they feel like they owe you for all the help you're providing.
- [31:42]
B
The key to living a blessed life is blessing others. I truly believe that. And everything you said could not be more true when it comes to networking. And it will open up doors. And all you need is one big connection. You don't have to have five, six, seven people on your team. You meet that one person and they can completely alter your life in a positive way. I want to talk about your portfolio. Where you are today, how you got to where you are today, and what your operation looks like more from a tactical standpoint of, you know, how you're buying deals, how you figure out what to buy them at, how you decide if you're going to wholesale them or flip them in rental. So we started with that one. We're at 130 today. How'd we get there?
- [32:23]
C
Yeah, so I, I learned early on that, like, there's two problems to wanting to build a real estate business. The first problem is you got to have something to buy at a discount. And the second problem is you got to have money to buy that thing, right? And that bank basically told me, we're gonna give you the money, so you gotta go figure out how to find something to buy at a discount. And so I said, okay, if I can figure out how to find more deals like this, then I can build my business because I have the money already. And so the money problem was solved. Need to solve the deal problem. So I started to research who in real estate is great at finding deals so I could be around them. That's when I learned that's what wholesalers do. They, they do all this net marketing and then they get these deals and then they assign them. Well, I said, I don't want a wholesaler. I just want the deals for me. But if I can operate like a wholesaler, I can go find those deals. I can take the ones I want and then give the rest to somebody else. And so I started to shape my business like a wholesaler. I started to study what are all the marketing tactics that they use. And then I figured out what's the marketing strategy that I could use that I could afford to fund with my money or my time, and that I was comfortable enough doing that I could do it. Consistently. Because I think that's where people make a lot of mistake. Either they don't fund a strategy appropriately or just too uncomfortable for them to stick with it.
- [33:42]
B
Yeah, that's. I think that's spot on. And I think when you go to scaling it, there's a lot. There's a big learning curve too, when you come to implementing. Okay, you mentioned want to set your business up like a wholesaler. Well, to do that, you've got to learn. Okay, here's how I build my list of potential sellers. All right, so now I know who. Who I may target, which may be, you know, pre foreclosure homes, or people who haven't paid taxes, or recently divorced folks or an estate sale. So you got all these people who could potentially may be hot sellers based on their situation. That's great. I would say that's pretty easy to narrow down if a quick Google search can help you. Well, now you've got to figure out, okay, how am I going to get a hold of these people? How am I going to do it effectively, and how am I going to do it with the least amount of money to keep my costs per lead down? And so then you got to figure out, all right, here's how. I have the conversation on the phone, if I'm calling, here's what my mailers need to look like. And there's a whole method to it, but you've knocked it down. And so what's that look like, what that process look like to figure it out and then just to start replicating things that work while also still having to change as the market does over time.
- [34:53]
C
Yeah. So for me, you're right. I had to figure out that list. And the way I figured out the list when I was starting was as I was researching wholesalers, so I started listening to every podcast I could find. I would literally look through all the real estate podcasts that were popular, and then I would search through their episode list and look for the episodes with wholesalers and just listen to them. And as they were talking about, like, who they would market to, I would write it down. So I'd literally had this running list of like, here's who this person, here's who they're marketing to. Here's what they're marketing to. And as I started to see this list, I would look at the list and I would see what strategy that I see multiple times from wholesalers that they're targeting. So a lot of them were targeting absentee owners. Right. And that's kind of the thing that stood out was absentee owners. Absentee owners. And so I said, perfect. That's exactly who I do not want to target. Right. I did not want to do what everybody else was doing because I didn't want to compete with people who were so much more experienced than me. And so I took that list and I said, what's the one or two things on this list that I don't see very much? Right. And that's who I want to market to because then hopefully I would have less competition from people who are more seasoned by hitting those lesser, lesser known lists. And so that's how I would tell people to go ahead and research like, go, don't reinvent the wheel. People are marketing to people who enlist that work. So go listen to who everybody's marketing to, but then try to pick one that the, the, the, the sea isn't filled with people who are, who are fishing in that, who are fishing in that pond. So I, I did that. I picked a list that was, I would work in my market and that wasn't heavily marketed to and that's who we started to market to. At the time, I think it was senior, senior owners, owner occupied, which is.
- [36:40]
B
One of my favorite people to buy from. I would, I would say I don't know what percent of my portfolio has been purchased from those, but it's been a, it's a very high amount and they're great to work with because they, they need the help.
- [36:50]
C
They need the help. They want the help. They want to help you and they tell the best stories.
- [36:56]
B
Oh yeah. You, when you go to those meetings.
- [36:58]
C
Yeah.
- [36:58]
B
You might as well set aside a couple hours.
- [37:00]
C
Go ahead and sit down for a minute, my man.
- [37:02]
B
If you're near lunchtime, you're probably going to be eating with them. So just, just relax. But it's amazing. You just, you take the time, you get to know these people and that's a whole different conversation on how to have those conversations, what you're saying. But what has been, what have been some of your favorite channels of marketing? I know we were at a conference together in Denver earlier this year and we've actually switched our business model to what you just said to where we act like wholesalers. Now I generally hadn't done that much marketing because I just had so much deal flow from organically, from networking and all. But now we've got it set up the different channels. What do you like? What's worked for you? And what would you tell folks who are just getting started is a good place to Focus from a marketing standpoint.
- [37:43]
C
Yeah, I'll tell you what I do and then I'll answer that question. So I mostly do direct mail and I do, I have a website with a Google Adwords campaign running to it and I do radio ads. Those three things bring me the most of my deals. All three things are essentially on autopilot so that we have consistently flow. Now, for someone new who's trying to pick a strategy, the in my opinion, you need to do some research first. Too many times people just pick a strategy because they heard it and they want to get started. But in order for any marketing strategy to work, and by the way, every single one works. If you want to do direct mail, it works. If you want to do cold calling, it works. If you want to knock on doors, it works. If you want to make on market offers on the mls, it works. Agent outreach, it works. So you have to figure out, since you already know it works, there's literally data on every single marketing that you know. Google it and figure out how much of it you need to do and for how long before it produces a result, right? So you have to do some research. You have to pick a strategy that you can afford to pay for for long enough for it to work, right? And when I say afford to pay for, it doesn't have to be with your money. But people forget, if you're not going to spend money on a marketing strategy, you can do it for free. Making offers on the MLS is free, but it's going to cost you time. And you have to have enough time to give that strategy to give it to work and pay off. You have to be able to make enough offers in volume. If you want to do a free strategy like make offers on the MLS and you're making one offer a week, it's going to be a while before you get deal, right? You have to do it in volume and that is going to take time and it's going to take an agent's time. And so like you've got to calculate, do I have enough time to give this strategy to work. So do your budget, how much time or how much money do I have to devote to my marketing strategy? And then pick the strategy that you know your budget will afford to pay for for long enough for it to work and that you're comfortable enough in the uncomfortability of that strategy because they're all uncomfortable. Making offers on the MLS sounds easy until you realize you got to make offers at 50, 60, 70, 80, 90, 100, 150. Thousand dollars less than what they're listed at. That's uncomfortable. It's going to be uncomfortable for you to tell your agent to do it and it's uncomfortable for your agent to make those offers. And so if you can't deal with that level of uncomfortability or you can't talk your agent into dealing with that level of uncomfortability, that's probably not the strategy for you. Right? Like I don't door knock. Like I hate it. I don't do. I don't want to knock on somebody's door. I don't want to have a conversation like that in the middle of the day. Like I just, it's uncomfortable for me and I know myself well enough to know that I'm not going to get comfortable with it. So I don't do it. It. Right. I don't like cold calling, so I don't do it. I'll hire a third party service to do it for me. Right. Like I. You have to know yourself well enough to know what you're going to stick with. So for me, I picked direct mail not because I thought it was going to be this rock star strategy, but because it was the most uncomfortable strategy that I felt like I could be comfortable with. Because I know the people are going to be calling me and if they calling me, they're calling me because they want to talk to me and I'm okay having those conversations. Even if you're calling me because you want to curse me out, at least you're calling me. Right. Like, so I was comfortable with that strategy and I could afford to fund it. So that's what I. How I tell people how to figure out what strategy works for you. Don't just do mail because I said it works for me. Right. Do a strategy that you feel like you. Because some people are great on the phone like they want and they like cold calling. Maybe they got a sales job. Maybe you should be cold calling. Like don't do mail if you got that skill set, you know what I mean? Like pick the one that's going to fit your budget and your strat and your level of uncomfortability.
- [41:22]
B
That's spot on. I think it's very important at the beginning for both of those, especially budget. I think folks see what other people are doing, they hear what other people are doing and they automatically think they got to jump in and go do all of them.
- [41:33]
C
Yeah.
- [41:33]
B
Like for years, dude, I've never spent for years. I didn't spend money on market. I, I did what's called organic through networking. I would drive for dollars. I would get on wholesalers list, which I still am. And I have agents doing outreach for me. And then I've got so many deals just from posting on Facebook account. I'm not talking about the popular account. I'm talking about Jaren's personal Facebook page. Hey guys, I'm buying properties in the area.
- [41:58]
C
No one does that. It baffles me.
- [42:00]
B
It's crazy. I think you said this earlier. Let everybody know that you invest in real estate. Deals will start coming in and then as you understand the game, you've got a couple deals under your belt, you're ready to scale, you've got funding in place. Then we say, okay, what marketing channels can we put into place to increase that deal flow while also staying in the budget that we need? And if you do that, you can really, really, really scale quickly, you know, depending on what your journey. And I had Chad Carson on that long ago. Chad's not interested in doing that.
- [42:31]
C
No, Chad, I want to do none of that.
- [42:32]
B
And you may not, you don't have to be. And you're not a bad person if you don't want to scale up. But if you do, there's avenues to do it. And you know, it doesn't have to have to break the bank. And it doesn't have to be you sitting on the phone. I'm not sitting on the phone. Cold calling 40 hours a week.
- [42:46]
C
It's not going to happen.
- [42:47]
B
I will call when I find a target property that I'm interested in but I'm not picking up and calling all. It's just not going to happen. And that's okay. So Henry, where can everybody find you, man?
- [42:57]
C
Best place to find me is on Instagram. I'm at the Henry Washington on Instagram. Or just go straight to my website, www.henry washington.com.
- [43:06]
B
Awesome, Henry, thank you for being on the show today, man. Always love hanging out with you. Good luck and keep up the good work, man.
- [43:12]
C
I appreciate you, man. You're a rock star.
- [43:14]
B
Thank you for tuning in to the Rich dad real estate show today where we talked about the good news and bad news of real estate with my buddy Henry Washington. Look, we got limited spots coming up for our Burr Secrets webinar. We're going to teach you how to buy real estate using other people's money. We put a link down in the show notes. Make sure you sign up asap. The platform can only hold so many folks, so if you want to get in there, go sign up. Today. I look forward to hanging out with you. And I'll see you next next week.
- [43:40]
A
This podcast is a presentation of Rich Dad Media Network.