From there, I looked around at what I had, and that was that mobile home and all that was there. I decided to flip the mobile home, bought a house, and the rest is history with how I started with real estate. I saw the power of rental income. I saw the power of flipping one house into a bigger house for more equity, and things like that. That’s where I realized, “Hey, there’s something to real estate.” I dug into BiggerPockets and every real estate book that I could find out there and, like I said, the rest is history. I’ve been growing since then.

Robert Leonard  05:53

You started by investing in yourself and your own business when you started your moving company. There are a lot of other things you could have invested in, so why, specifically, real estate? You could have just sold the mobile home, gone a traditional route, bought a single-family, and done what most people do. So, why? What drew you to real estate investing? What was that moment where you knew this is what you wanted to do?

Felipe Mejia  06:13

I saw the power of real estate investing. So, since I had a mobile home, I had never paid a mortgage on my own. It was always either my tenant was paying half or full, and I never wanted to go back to paying my mortgage and getting comfortable doing that. I wanted it to be uncomfortable for me to have to pay a mortgage. So, that’s kind of how that happened. From there, the same tenant that I had in the mobile home, I brought with me to my first single-family. Still, I was not paying a full mortgage.

Like you mentioned, I did have labor or moving company. I had that because I was looking for the highest paying job per hourly basis that I could get with my degree, and, unfortunately, most jobs with my degree were paying $40,000 to $50,000 a year, and I just needed more than that to invest in real estate. I opened the labor-only moving company, which paid double, and spent all of my time looking into real estate. First, it was just because I didn’t want to pay my mortgage. I wanted to make sure that I would have tenants coming in. It started a little bit with Airbnb, but it was growing to be more traditionally renting by the room, personally, house hacking, if you will. From there, it just grew. What if I just buy another house and a house hack it to other individuals? That projected me into buying more and more properties of the same concept.

Robert Leonard  07:21

If someone listening to the show today isn’t fully convinced that they want to go into real estate, but they’re kind of on the fence and considering it, why should they go into real estate?

Felipe Mejia  07:30

I would say it depends a lot on their goal. Luckily, with real estate, it hits a lot of targets. If you’re a high-income earner, and you’re paying a large amount in taxes, a real estate or a house or an investment property can be depreciated, right? So that can positively affect your taxes. Let’s say that you’re paying $30,000 in taxes. I don’t know what that looks like, but let’s say that you buy a single-family home that you can depreciate over 27 and a half years. You’re able to offset some of those taxes by depreciating your property, which is allowed in the tax rates.

If you’re just looking for, you know, another source of income, rental income is great for that. You’re able to produce more income, and, at the end of it, you’re also getting a tenant that’s paying down your loan. On top of that, you’re also getting cash flow. Also, on top of that, your house appreciates, statistically, over time. Your house is going to rise in value. As your house is raising value and your tenants are paying your loan down, there’s starting to become a gap called equity, and you’re getting cash flow. There are tons of reasons to invest in real estate. I would say take the plunge and just try it out.

Robert Leonard  08:32

When I was first getting started in real estate, I thought that I couldn’t become an investor because I didn’t have the money network or expertise to invest. I always thought it was just something for the rich. What were some of the limiting beliefs that you had when you were just starting on your real estate journey? And how did you overcome those?

Felipe Mejia  08:49

Perfect question. Honestly, for me, it was a lot of thoughts of, “Well, I don’t know anyone. I don’t have any connection. All I know are framers and drywall guys and electricians and plumbers. All I know are these blue-collar guys. I don’t know anybody that has money. I don’t know anybody that’s going to lend me money to buy real estate.” But when I started saying those things to other real estate investors, they almost laughed at me. They would say things like, “I would kill to know good plumbers.” “I would do anything to know a good electrician.” I found that interesting, and so buying a rental property wasn’t scary anymore because I was able to use and leverage the people that I know around me to help me reach my goals. And if it’s about knowing those people around you, I would say: Look around. Who is your influence on people? Who’s around you? What strengths do they have that might be able to add value to you as you do real estate? All of a sudden, real estate doesn’t look so big. It starts looking smaller, because, mentally, you’re starting to have thoughts of tapping your friend who’s a flooring installer, in case I need to fix the floors, and so on. You start thinking real estate’s not as big as it really is anymore. It looks a little bit smaller when you start creating a mental team.

Robert Leonard  09:54

Yeah, I felt the same way as you did. I didn’t know anyone. No one in my family had ever even gone to college. No one had ever made any type of investment. I was the first one to ever go to college and even be interested in investing, so I faced a similar challenge. I didn’t know anyone. I didn’t even know any plumbers, really, nor any blue-collar people. I didn’t know anyone in the real estate space. My dad was a mechanic, so he could do cars and stuff, but nothing real estate-related. And so, for me, what really worked was the law of the first deal. When you get that first deal done, you realize that you could do it too, just like everybody else does.

Felipe Mejia  10:24

And that first deal is not going to make or break you. That first deal is more about learning. You earn so much wisdom from that first deal, and you overcome things that you never thought you’d have to do. So, for your listeners, that first deal is going to teach you way more than it’s going to make you money, but it’s worth it. Those lessons are worth it.

Robert Leonard  10:44

That’s a good point. Now, I want to see how you think about this because I hear a lot of “real estate gurus” say that people should go as big as you can on your first deal, and I disagree with that. I think people should start small. Start with a little deal, and get your experience because, as you said, it’s not going to make you rich, no matter how big or small the deal is. But I think if you get a big deal, and it goes against you because you don’t know what you’re doing, it could put you in a really big hole and more or less screw you for your future career. So, I usually recommend to start small, get some wins under your belt, learn, and then go from there. How do you think about that?

Felipe Mejia  11:17

I agree 100%. I think everyone should start small on a small single-family or a little duplex. You’re still going to run into the same issues that a large-scale 50-unit apartment complex is going to run into, without running into it by 50 times. You’re just going to have one refrigerator go out or one toilet gets clogged up or one electrical problem that needs to get fixed instead of spending all your money on a 10 to 30 -unit apartment complex and have 20 refrigerators all of a sudden going out at the same time and you don’t know what to do. If you have a single-family home, you know how to solve that small issue. Then, you’d able to explode that solution up if you do have 10 or 30 rentals. You’ll know where or whom to call if a certain situation comes up. I agree, start small, and then grow from there. Build a strong foundation.

Robert Leonard  11:22

Yes. To add, one of my favorite things was that my first property, the mortgage was about $300 to $350 a month. And I said, If things go completely horrible, as wrong as they could go, I can’t find anybody to rent this thing. I can cover that $300 to $400 a month, so I’m not going to get, you know, completely destroyed from this property. I said, well, super low-risk from that perspective, from the downside. And then I mean, huge upside potential, not because it’ll make me a lot of money, but in terms of education, and then you have that one success that you go on from there and grow and grow and grow.

Felipe Mejia  12:36

That’s exactly right. I mean, even with me when starting with a mobile home, right, I ran into like, oh, the toilet is clogged. How do you fix that? Or who do you call or the door won’t close right? Or, you know, whatever the case may be, so I started small with a mobile home and you know, it still had all the attributes of a home that had plumbing, electrical doors, showers and all that those, you know, those little problems came up but they weren’t such an emergency, as if I would have started with a 20-unit apartment complex. 20 doors don’t work or 20 toilets didn’t work. I love the concept of starting small and gaining your knowledge that way.

Robert Leonard  13:07

Let’s walk through that first deal. How did you find it? How did you finance it? And what type of property was it?

Felipe Mejia  13:13

My first deal is the single-family home that I first moved into that I turned into an Airbnb. It’s my very first rental income type of deal. Basically, it was just a single-family home that I rented out. I wanted to be close enough to Nashville, but not have that Nashville traffic, and a place where my tenant can come with me. My realtor helped me find a home that had three beds, two baths, that I knew that I could rent out with somebody else without living on top of each other. My tenant was going to pay half of my mortgage, so I asked him, “Hey, what are you comfortable paying?” My tenant said, “I’m good with $500 a month.” So, I went to my realtor, and said, “If we can find a house with a mortgage is no more than $1,000, that will make me feel comfortable.” So, that’s kind of how we did that. We started looking based on rents in the area, and acceptable rents were about $1,200 if I wanted to rent out the whole house. And if I wanted to rent by the room, $500 would do it. Airbnb also seemed pretty good in that area, so that’s we found my first single-family rental property.

Robert Leonard  14:13

Everyone has a set of expectations before they do something, including buying their first property, then reality sets in, and it’s often different than we expect. What did you learn from doing that first deal that was surprising to you?

Felipe Mejia  14:25

What was surprising for the first deal was that I could do it. I think that that hits a lot of people differently. A lot of the times, you’re questioning yourself if this is for you. Can you do this? Or do you have the knowledge to do it? Do you have the grit to do it? I think that once you get that first rental property up and running, it gives you a boost of morale. Hey, I can do this one. Why can’t I do this 10 times? 15 times? Right? It’s all about fixing your processes and what you’re going to do with that property, but once you get that first one done, you just get another boost of energy to go ahead and run into that next property, into that next rental. So, I think out of that first one, I learned that I can do this. I can keep going. I can scale this.

Robert Leonard  15:08

And so, what did you do for your next deal? What did that look like? What type of property was it?

Felipe Mejia  15:13

Interestingly enough, the next deal for me would have been this six-unit apartment complex that I bought out in Cookeville, Tennessee, which unfortunately didn’t fit my model, but I didn’t know that until I established my goal. At first, I was just buying rental properties that cash flowed, with just cash flow as my goal, but after buying that second rental property, it taught me the lesson of setting your goal and sticking to it, and not buying property outside of the realm of the goal that you have, personally. That’s just going trajectory to your definition of your successful goal.

Robert Leonard  15:47

As you’ve continued to scale, how are you funding your deals? Are you using your own cash? Do you have a money partner? Are you doing a different creative strategy?

Felipe Mejia  15:56

I have a line of credit on a rental property that we paid off in cash. We use that line of credit to purchase properties if they’re great deals. We also do have cash partners that are looking for the same goals that we have regarding time, cash flow, and the type of rental properties we purchase. Basically, I put up half and they put up half, and then we meet and buy rental properties. The way I’m funding it, as I said, is basically we just paid off one rental property in cash, got a line of credit, use that line of credit to put down and rehab the property, and then, as we grow, we allow the cash flow to either pay back one credit or refinance older properties that have more equity.

Robert Leonard  16:32

And so, are you having a hard time doing the fix and refinance strategy right now, given the current environment that we’re in?

Felipe Mejia  16:40

I don’t think it’s harder. I think it’s taking longer. Banks and establishments are still doing it. They’re just taking a bit longer, and digging deep into each deal, doing their due diligence more than before. I think, before, it wouldn’t take as long as it’s taking now. So, is it harder? I think it’s only harder because it’s taking longer.

Robert Leonard  16:57

And are you still looking for those types of deals or have you kind of put the brakes on acquiring new properties at this time?

Felipe Mejia  17:04

Good question. Personally, if the deal makes sense, then we’re going to jump on it. We really don’t pivot based on the market. We mostly measure our deals based on what our goal is with that property. If it meets our cash flow criteria now, since the markets affecting the purchase ability and prices of houses and stuff, it’s going to affect our goal. That’s going to determine whether we continue to buy or not, but not necessarily anything else. We address: What is our goal for this rental property? And does it fit our goals? Does it fit our style of investing? If it does, if it meets all those criteria, then we’ll still continue to purchase.

Robert Leonard  17:40

So, how are you deciding what types of properties you want to buy? How are you deciding between single-family, small multi-family, large multi-family, maybe even commercial properties?

Felipe Mejia  17:48

One of the ways that we’re deciding is based on our cash flow goal, our cash flow criteria, and if the purchase price makes sense in the area that we specifically know is going to rent. We were looking for about $500 to $600 in cash flow per door. As long as it meets that criteria, then it’s something that we’re willing to pull the trigger on. Additionally, if it has an extra dwelling or an ADU or a bonus room in the downstairs or something else that we can house hack and add a little bit more value to, then we’re pulling the trigger. We’re not buying anything outside of the realm of single-family homes. They’ve got extra living space that we can create extra bedrooms.

Robert Leonard  17:55

And, as you said, $500 to $600 per door in net cash flow?

Felipe Mejia  18:30

Yes.

Robert Leonard  18:31

Are you still able to find those types of deals in this market?

Felipe Mejia  18:35

All day long.

Robert Leonard  18:36

Wow. How are you finding those deals? What strategies are you using?

Felipe Mejia  18:40

The MLS. We look for realtor mistakes.

When a realtor posts a house for 1,400 sq. ft. , but it’s got 1,400 sq. ft. with downstairs, and livable space. For instance, a lot of the homes out here will have three bedrooms, one or two baths upstairs, a two-car garage, and a huge loft downstairs with already plumbing, electrical, and sewage systems downstairs. We’ll just basically build out bathrooms and a couple of rooms. As long as there are windows, we can say, to code, that we’re adding value to that property. We get to turn a 1,400 sq. ft. property to a 2,600 or 2,700 sq. ft. of livable space.

Robert Leonard  19:12

So, that space down there is just like an unfinished basement that has all of the necessities needed. It just isn’t finished yet?

Felipe Mejia  19:20

That’s exactly right. We find them unfinished. Realtors will sell them at 1,400 sq. ft. for now, but we know that these houses have more like 2,600 sq. ft. to 2,700 sq. ft. of livable space.

Robert Leonard  19:29

Is this something you think that people can do all across the US?

Felipe Mejia  19:32

100%. You can find houses like this anywhere. The key is to make sure it already has the electrical and the plumbing downstairs because that’s going to cost you some money. If it’s already set that way, then you should be good. Yes, you can do that anywhere. One of the ways that we figured out to find them is by asking the listing agent, “Hey, does it have a washer and dryer hookup downstairs?” as, to me, that says that there’s water, electrical and sewage downstairs. We would just take out the washer and dryer, and create a bathroom downstairs.

Robert Leonard  20:06

Yeah, I was going to ask how you identify these properties quickly. It sounds like that’s a really good way. You don’t even have to go to the property necessarily. You could just send an email, asking, “Hey, are these things (washer and dryer) set up in the basement?” Then that lets you know.

Felipe Mejia  20:18

Exactly, yep, that’s exactly how we do.

Robert Leonard  20:21

When you offer these deals, you’re looking at it as the purchased price, and you’re adding in the construction costs, and then including the new rents. You’re not running the numbers at what it would be currently, correct? How can a new investor make sure that they’re getting the right numbers when they’re analyzing that deal?

Felipe Mejia  20:41

I run my numbers based on the mortgage. Would the mortgage be covered by a typical rental income without adding value? Let’s say the mortgage is going to be $1,000 as is. Is this an area where I can rent for $1,200 to $1,400? Can I make $100 a door? If I can do that, then it’s probably going to be a good deal knowing that I can still add that downstairs extra cash flow. We’d be looking closer to like $800 to $900 in cash flow per house if I can add that downstairs. And we only purchase properties if I can add that downstairs. But, at minimum, the house has to be able to what we call stand-alone. Meaning, without adding any value to it, right off, upon picking it up, will it cover the mortgage? Is it in an area that will rent for the amount of what the mortgage is? That’s what I would tell your listeners. Before you buy a property, make sure that, as is, it will rent and cover the mortgage, and an extra $100 to $200, whatever your goal is, before you even start adding value to it.

Robert Leonard  21:41

Is this the only type of property that you’re purchasing right now?

Felipe Mejia  21:45

100%. It’s the only thing we buy.

Robert Leonard  21:47

Do you have any plans to go into the multi-family space?

Felipe Mejia  21:53

Technically, I am in the multi-family space. I turn single-family homes into two separate dwellings, so basically, it is a multi-family, if you will. I’m going to continue doing the way I’m doing it, adding value, because I find it harder to add value to a multi-family property and I like the strategy that I use. I don’t think there’s anything wrong with multi-family. I just think it doesn’t fit my portfolio.

Robert Leonard  22:15

Yeah, that makes sense. It’s also really good that you’ve been very clear about what you want. A lot of people talk about focus, and it sounds like you’re very focused. You know exactly what you want. You know exactly how you’re going to do it, and you put on the blinders for everything else. You don’t get stuck on the shiny objects, and you just go after what you know, and that gets you to execute on that.

You said you’re making them into two separate units?

Felipe Mejia  22:36

Technically, yes, so that we can rent the upstairs and downstairs separately to two different families.

Robert Leonard  22:42

Do they share any common area?

Felipe Mejia  22:44

The upstairs has its bathroom and kitchen, and the downstairs is the same.

Robert Leonard  22:48

Gotcha. I thought, originally, that it was just making a three-bedroom into say a four-bedroom or a five-bedroom, and adding a second bathroom.

Felipe Mejia  22:57

No, we add a small kitchen and bathroom downstairs, and there’s already a kitchen and bathroom upstairs. It’s two separate living areas.

Robert Leonard  23:04

So, for a brand-new investor who’s listening to the show today who’s yet to do their first deal, what strategy do you recommend for them? Do you think they should do a house hack? Or should they do something similar to you’re talking about doing today?

Felipe Mejia  23:16

100%, I think they should start with a house hack. Buy a house with as low as money down as you can, move in, and rent out the other bedrooms to your buddies. Start getting knowledge of what it’s like to be a landlord, what it’s like to take problems at two in the morning. Start getting your feet wet with a house hack is one of the safest and most cost-effective ways. Start and get your feet wet. From there, you’re going to be able to grow or continue using that same method. It’s a really easy way to get into real estate.

Robert Leonard  23:44

It’s really easy. You can do it with a 3.5% to 5% down payment, which usually makes it a lot more affordable. Plus, you only have to live there for a year. So, if you want to turn it into a rental, you can move out after a year, and you’ll have a traditional rental that you only had to put 5% or less down on, and you can continue operating it like that.

Felipe Mejia  24:00

Exactly. I think house hacking is like investing in real estate with training wheels. It’s really hard to mess it up.

Robert Leonard  24:07

Right. Then, when you take the training wheels off, it’s fantastic from there.

I’ve done one house hack, one live-in house flip, and I’m about to do another house hack right now. I just walked in a 3-unit yesterday, and I’m considering doing that. I don’t necessarily want to live there, but I’m going to live there for a year.  The numbers are great once I move out and turn it as a traditional rental. It’s something that a lot of people can do. And if you’re not even willing to do that, you can buy a property, live in it for a year, and then rent it out afterward. You can still get that 5% down payment. If you have a family, don’t want to house hack, and have people live with you, you can still go that strategy as well.

Felipe Mejia  24:42

Yep. Right. As I said, it’s a way to get into real estate with training wheels for those that don’t want a bunch of hiccups or to risk at all, if you will. I think what you’re doing is great, and that you’re going to be very successful at it as you continue to grow your portfolio.

Robert Leonard  24:55

From talking to all the different people that you’ve talked to in the real estate space, whether it’s on social media, on your podcast, and even just doing deals yourself, what do you see as some of the biggest mistakes that new investors are making?

Felipe Mejia  25:08

I think identifying their goal is their main mistake. I hear people say, “Oh, I’m going to buy a single-family home and house hack it. Then, I’m going to go buy a multi-family, might do a flip here, and then look at this new shiny object is wholesaling. I might try that as well.” And then, two or three years go by, and they never did because they built three or four bridges that never really made it to the other side of the destination. 

I think most people don’t specifically identify their goal as to what they want out of a real estate, which is why they hop around and do a bunch of different things. It’s like going to the gym and running on the treadmill for 5 minutes and then lifting weights for 20 minutes, and then getting in the hot tub. They’re going through so many, but they’re actually not doing a lot. It’s better to focus one thing and make sure that you’re hyper-focused on that. Be the best that you can at that. Have that system running itself, and then you can jump to something else. So, for any newbie or rookie investor, I would say: Focus on mastering one source of real estate before you jump to the next.

Robert Leonard  26:00

How do you determine what that right piece of real estate to focus on is if you’re new and you don’t know necessarily where to start?

Felipe Mejia  26:08

I would take a step back from there, and say: Pick up real estate books and figure out other people’s mistakes. We, including myself, all love to write about our mistakes and how we can help other people avoid them simply by picking up books that other people have written. There are plenty of books in the BiggerPockets library. You can pick up a book from Brandon Turner or David Green or anybody that writes about the mistakes they did or about tips and strategies that worked for them. By reading those materials, you have a foresight of what might happen. I think that’s a great way to dig into some of the mentors that you wish you had or that you follow. Get inside their head by reading the books that they’ve written. I think that’s a great way to do it.

Robert Leonard  26:50

Yeah, that’s one of my favorite ways to find a mentor. I get asked all the time: How do I find a mentor? What I always tell people is that having a one-on-one mentor is great, of course, but there are a lot of people that you can be mentored by that you don’t necessarily have to have one-on-one access to. You can be mentored via their books, their podcasts, and other things like that. There are guys that I wish I could be mentored by, but I’m never going to have the chance to, so I just listen to their podcast. That’s their way of, essentially, mentoring me. So, I think that that’s great advice.

But how does someone know when to stop focusing on something? They might decide to focus on something, and it’s going okay, but they’re not sure if it’s really what they want to do or they’re not good at it. How do they decide when it’s enough, and when it’s time to try something else?

Felipe Mejia  27:31

I think that comes at a point when you’re not happy anymore. Once you’re not passionate and not happy with a certain objective that you’re trying to reach, then it’s probably time to pivot. For example, I’ve had many sleepless nights with real estate. As weird as that sounds, I’m still happy with what I do. But that tells me that I’m not going to quit anytime soon. Now, I would tell someone in real estate, who just started flipping houses, that if they get to a point where they’re just unhappy, they hate it, and they’re just mentally not in it anymore, then it’s probably time to pivot. Now, I’m not saying run when things get hard. I’m saying turn the other way when it’s starting to take your joy.

Robert Leonard  28:06

What mistakes have you made along the way of your real estate journey?

Felipe Mejia  28:10

Chasing money. I think that’s been my biggest mistake when it comes to real estate. Instead of chasing a goal or chasing to make other people’s lives better with real estate, I was chasing money. I think that’s the biggest mistake that anyone can make.

Robert Leonard  28:23

What exactly do you mean by that in real estate? What do you mean by chasing money?

Felipe Mejia  28:27

The difference between chasing your goal and chasing money is that money is going to look like a bunch of different things daily. So, daily, you might be chasing a certain deal or category or style or strategy in real estate, and you’re never going to focus on one. But, when you have a goal in mind of a certain real estate, now, you’re not chasing the money, you’re chasing the goal. And that’s, I think, smarter than just chasing the best deal or the best money that you can find.

If you see what other real estate professionals are doing, they have a goal in mind. I rarely see the word cash or money in they’re goal. They’re looking for a certain close-up deal or timeframe or return, maybe. They’re not saying, “I want a million dollars. I’m going to chase a deal that gives me a million dollars.” It’s more about chasing your personal goal in real estate and buying properties that positively affect that versus “This is a flip that can make me $10,000. That has to be a good first strategy as it’s going to make me $20,000. I can wholesale this deal for this amount.” Doing the latter, you just won’t become the master of any of it. That’s what I mean by chasing the money. I would rather tell people: Chase your goal. Strategically chase that goal, and that’s what’s going to give you more satisfaction. I don’t think money brings satisfaction. I think reaching and crushing and obtaining goals is more satisfying than just the next money if you will.

Robert Leonard  29:49

When I hear that I almost instantly think about flipping and Airbnb as a lot of people get into real estate for passive income. A lot of people want to get financial independence. They want passive income, so they do that, and they go and flip or do Airbnb. Then, they realize that neither strategy is super passive. They’re pretty hands-on for real estate, so they’re going after the money. They start with the goal of wanting financial freedom, and then they decide to start chasing the money because that’s where it is. They’re in Airbnb and flipping.

Felipe Mejia  30:20

Exactly. They lose track of their goal, which initially was probably not even the money or even passive income if we’re honest about it. I think most people’s goal is to get their time back from their W2 job or have that time free. Now, time freedom costs money, so I think that’s when people lose it. Instead of focusing on the money, you need to focus on the time, and then use the money to get there. That’s why people start going for flipping properties or Airbnb that take up their time. They do end up with the money, but then they end up with less time, bringing them right back into a W2 job except it’s named as something else.

Robert Leonard  30:57

Yeah, that’s exactly what I was going to say. They just swapped out the job. Rather than sitting at a corporate job, now, they’re just changing toilets and doing rehabilitation work. It’s essentially that same thing, except they pay more taxes. That’s probably more than anything if you don’t have health insurance, and they won’t have all the other cushy benefits of a W2 job.

How are you able to balance working a job? It sounds like it was most likely your moving company, but how were you able to balance working a job and building your real estate portfolio?

Felipe Mejia  31:23

At first, it was really hard. There will be those two or three years where you’re still at your W2 job, but also real estate investing. Then, there’s that transition period where you’re a full-time investor versus leaving. So, I closed down my moving company now, so I am just full-time in real estate. But that last year was hard. I think that’s a step that a lot of investors or newbie investors are going to take. There’s going to be that one year where you’re like going between the W2 job and your real estate investing before taking that plunge into full-time real estate. For me, it took about a year, and that was probably the hardest year, having a full-time job and being full-time in real estate. But, once you take the plunge, it’s pretty nice.

Robert Leonard  32:06

How did you know you were ready? What was the point that made you feel ready to go full-time in real estate?

Felipe Mejia  32:12

You know, it’s interesting. My wife is the one that told me I was ready. I probably would still be working both jobs stretching my time real thin, but my wife said, “Hey, I think we’re ready. You can close down the moving company. We’re good, financially, and we’re not going to have to make a lot of sacrifices. We’ve set it up to where the rental income is pretty nice.” She had to talk me into it. I guess as to the man of the house, with a little guy, as well, my thoughts were that I need as much coming in as possible to feed him and my wife, pay the bills, and all that. But I only realized after she talked to me. She’s right. If I can step out of this and be full-time in real estate, I can make it worth it. So, it’s hard to let go. But once you do, it’s definitely like a weight lifted off your shoulders. 100%.

Robert Leonard  32:57

Learning from podcasts and all the information that we’ve talked about today and even from books, I think is a great thing to do. I think it’s a vital part of success. But it’s really only half the equation. I see the other half of the equation as being equally important, if not more important, and that’s taking action on what you’ve learned. So, after someone listens to this episode, what is the first thing they should go out and do to get started in their real estate business or to grow their already existing business?

Felipe Mejia  33:25

I preach this a lot, and maybe people get tired of hearing it, but if you don’t have an identified goal, that you can get out in one or maybe two sentences the moment someone asks you, they think you really might be going the wrong way, or at least not going for your goal as quickly as possible. You may be going down the interstate at 70 miles an hour, but you might be going the wrong way. So, I think, what’s more, important than just taking action is taking action that applies to your goal.

It’s like when people say knowledge is power. That sounds nice, but I think applied knowledge is power. Just knowing doesn’t do anything. So, if you get all this real estate knowledge, you need to apply it towards your goal. That’s what’s going to make you successful in real estate. Go out and take action, and use the bottom line, being your goal, to dictate what action you’re going to take. Don’t just take aimless action. Take pointed action towards your goal. Take directed action. If you want $200 in cash flow per door, why don’t you go analyze deals in an area where you’d like to invest and find out if that area works for you. Or let’s say you’re ready to invest. Have you been pre-approved? Do you have a good lender? Do you have a good realtor? Start creating your team.

Those are the things that I would say. Also, go listen to the Real Estate Rookie show. I think that’s going to help a lot.

Robert Leonard  34:38

Yeah, definitely. I love what you said about the applied knowledge because I fell in that camp where I had a lot of knowledge, but I didn’t do anything with it, so it was more or less a waste. I tell the story on the podcast, but it was two years in a row where I read almost 60 or 70 books in a year, but I didn’t do anything. I didn’t do anything about it. I didn’t put into action anything I learned. Maybe I had a lot of information in my head. Maybe I knew a lot, but it’s useless if you don’t do anything about it.

I think it’s also important to have the right goals and work on that. How does somebody define that right goal for them? How do they know? How do they go about even finding that if somebody isn’t sure of what they want?

Felipe Mejia  35:16

Good question, man. That’s a hard one because if you don’t know what you want, I wouldn’t start investing in real estate. I can tell you that. I would first work on identifying my personal goal and then investing in real estate. Because if you just start taking action, you have the possibility that you’re taking action in the wrong direction, and that’s what happened with my 6-unit apartment complex. I bought the first cash-flowing property that made more than $1,000 that I could find, but it didn’t meet my goal of time freedom. It was just another job. I bought a property for the money and not for the goal.

So, for those who don’t know what they want, go pick up a book, or interview or talk to people that are maybe where you want to be, and just ask them, “Hey, what were your goals growing up? What did you do to get where you’re going?” If I want to be the best basketball player in the world, I’m going to talk to or read a book by Michael Jordan or LeBron James or do things like that. So, find a mentor who’s where you want to be, and just start reading on them. If you can talk to them and figure out what their goals were, maybe you can get close to have or identical goals as them to reach that place.

Robert Leonard  36:19

Yeah, I think it’s really important to get your goals clearly defined before you start working towards things. I learned this because I thought, going into college, I wanted to work a specific job. I had the job title, I knew what I wanted to do, and I thought, because I never asked anyone, that I knew the major I needed to get that job. I was about two years through school, and it turns out that I was in the wrong major to get the job that I wanted. And that was completely my fault. I assumed that I knew what I wanted because I knew what my end goal was, but I didn’t know how to get there. So, you need to define those things and then find out actually what it takes to get there. I think a lot of people have goals, but they don’t know how to get there. They think that it goes a certain way, but when you learn about what it takes, it’s very different than what you expect.

For anyone that wants to connect with you further. We talked about it briefly, but tell us a little bit more about where they can go to find you?

Felipe Mejia  37:05

You can hear my voice on the Real Estate Rookie show on BiggerPockets. You can find me on Instagram, @felipemejiarei. You can find me there.

Robert Leonard  37:20

I’ll be sure to put links to everything that we talked about throughout the show, as well as all the different ways that you can connect with him in the show notes, so you guys could go do that.

Felipe, thanks so much.

Felipe Mejia  37:30

Always a pleasure, man. Thanks so much for having me.

Robert Leonard  37:32

All right, guys. That’s all I had for this week’s episode of Millennial Investing. I’ll see you again next week.

Outro  37:38

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