The Science of Flipping Episode Summary: "The Low-Cost, High-Return Strategy for Affordable Housing | DJ Thielen"

Host: Justin Colby
Guest: DJ Thielen
Release Date: September 27, 2024

1. Introduction of DJ Thielen

Justin Colby welcomes DJ Thielen, a former professional baseball player for the San Francisco Giants, who has successfully transitioned into the real estate investing world. Their shared passion for sports and business forms the foundation of their engaging conversation.

Justin Colby [02:00]: "He is an ex professional baseball player and played for my favorite team, the San Francisco Giants. But he's also an incredible real estate investor, businessman, coach and just an all-around great human being."

2. The Power of Belief and Mindset

The discussion delves into the critical role of self-belief in both sports and business. DJ emphasizes that self-confidence is paramount for achieving success.

DJ Thielen [03:25]: "If you don't believe in yourself, nobody else is going to. The level that you believe that you can do something is a level that you're going to be able to achieve that."

Justin expands on this by highlighting the contrast between the strong belief people have in Jesus and their often weaker belief in themselves.

Justin Colby [05:07]: "But people won't do the same thing for themselves. That's where I go, whoa, bro. Like, this is insane."

3. Overcoming Adversity and Choosing to Be a Victor

DJ shares personal experiences of overcoming a challenging childhood marked by financial struggles and parental issues. He underscores the choice between becoming a victim or a victor.

DJ Thielen [06:13]: "You either become the victim or the victor, but it's really a choice. There's a lot of people that grew up with alcoholic parents and they either become just like that or they go, I'm never going to do that."

4. The Importance of Mentorship and Avoiding Common Pitfalls

Justin and DJ discuss the significance of having a mentor in real estate investing. DJ recounts his early mistakes, such as purchasing 10 homes for $50,000 each without proper guidance, leading to substantial losses and lessons learned.

Justin Colby [17:08]: "But if you had a coach at that moment, you probably would have avoided the pitfall of the experience you just went through."

DJ Thielen [17:43]: "I can show you how to do that, too. And we did. And he did."

5. Why Affordable (Cheap) Housing is a Strategic Choice

DJ explains his focus on affordable housing, citing its low risk, high return, and low barrier to entry. He highlights the benefits of various exit strategies, such as seller financing and land contracts, which provide flexibility and profitability.

DJ Thielen [19:07]: "It's super low risk, right? So it's a super low entry. Almost anyone can get into it. Low barrier, low barrier of entry. Two is that if you know the right exit strategies... then I just feel like it's a low barrier of entry, it's low cost, high return and low risk."

6. Creative Real Estate Strategies: Seller Financing and Land Contracts

The conversation shifts to advanced real estate techniques like seller financing and installment contracts. DJ provides a detailed example of how he helped a client acquire a property for $1,000 through creative structuring, ensuring both parties benefited.

DJ Thielen [26:38]: "So we're going to use a quick claim deed... we're going to record it... then you take the stamp copy, you go to the house, you talk to the lady, and then here's how you approach them."

Justin adds valuable insights on the importance of using proper legal instruments to safeguard investments and maximize equity.

Justin Colby [28:37]: "Anytime you buy a property on seller financing, you need to use a promissory note, a mortgage and a deed, run it through the title company, get title insurance."

7. Tax Benefits and Turnkey Investing

DJ elaborates on the substantial tax benefits associated with real estate investing, particularly through depreciation. He explains how high-income earners can significantly reduce their tax liabilities by investing in real estate assets.

DJ Thielen [39:13]: "If you're 50 like me, 53, and you live to be 103, I hold it for 50 years, that house will pay me over a million dollars."

Justin echoes the sentiment, stressing that real estate offers unparalleled advantages regardless of one’s age.

Justin Colby [39:27]: "Everybody needs to be in real estate. Yeah, yeah, everyone. I don't care if you're 19 or you're 91."

8. Future Opportunities in Real Estate

In a forward-looking segment, DJ predicts unprecedented opportunities in the real estate market over the next four to five years. He anticipates increased willingness among sellers to offer favorable terms amidst economic uncertainties.

DJ Thielen [43:40]: "I believe that the opportunity in the next four to five years is going to be like nothing that we've ever seen."

9. Conclusion and Final Thoughts

Justin and DJ wrap up the episode by reinforcing the immense potential of affordable housing and creative real estate strategies. They encourage listeners to invest in themselves, seek mentorship, and seize the burgeoning opportunities in the real estate market.

Justin Colby [44:27]: "So the next 10 years is going to be the best 10 years to be in real estate period."

DJ Thielen [44:43]: "Thanks, guys. See you on the next episode."

Key Takeaways:

• Self-Belief: Essential for success in both sports and real estate.
• Mentorship: Critical to avoid costly mistakes and accelerate growth.
• Affordable Housing: Low-risk, high-return investment with various profitable exit strategies.
• Creative Financing: Seller financing and land contracts offer flexibility and maximize returns.
• Tax Benefits: Real estate provides significant tax advantages through depreciation.
• Future Prospects: Upcoming years present unmatched opportunities for real estate investors.
• Diversification: Investing in affordable housing allows for multiple strategies and sustained growth.

Notable Quotes:

• DJ Thielen [03:25]: "If you don't believe in yourself, nobody else is going to."
• Justin Colby [05:07]: "People won't do the same thing for themselves."
• DJ Thielen [19:07]: "It's super low risk... low cost, high return and low risk."
• Justin Colby [17:08]: "A coach... would have avoided the pitfall."
• DJ Thielen [39:13]: "That house will pay me over a million dollars."
• Justin Colby [44:27]: "The next 10 years is going to be the best 10 years to be in real estate period."

Resources Mentioned:

• Cheap Homes University: For mentorship and real estate investment strategies, visit cheaphomesuniversity.com.
• DJ Thielen’s Instagram: Follow DJ at @djtheilen.com for more insights and updates.

This episode of "The Science of Flipping" provides invaluable insights into the strategic advantages of investing in affordable housing. DJ Thielen’s journey from professional sports to successful real estate investing underscores the importance of mindset, mentorship, and creative financial strategies. Listeners are encouraged to leverage these lessons to build a profitable and sustainable real estate portfolio.