Cory Jacobson (00:03:35):

And that’s kind of a little bit about what happened with my family. I actually work for my family business and my father and my uncle are the owners and they’re extremely good at what they do, but money and investing was never something that we really talked about growing up, it was something that I kind of learned just on my own, and on my own path. So, it wasn’t something that I grew up having a lot of knowledge on, as I hit my mid 20s it was something that really, I was able to figure this out with this guy.

Ryan Bevilacqua (00:04:03):

Yeah. Actually I kind of have a similar story. So my dad, his brother, he actually has two brothers, so all three of them are entrepreneurs and they have their own companies, but on the blue collar side. So one’s in construction paving, craning, and it’s like I said, blue collar, and money was really rarely discussed at our dinner tables. And it kind of took self in education and going through the process on my own to figure it out. And I knew at some point I was going to be an entrepreneur, it’s just in my blood. It’s clearly like all the men in my family that they have done that.

Ryan Bevilacqua (00:04:29):

So I was like, at some point I’m going to have something of my own. My dad said at a young age, he’s like, “You always want to be the guy that’s essentially working for yourself and paying yourself. And because you’re going to feel restricted and there’s going to be a ceiling, whether you go corporate or some other route.” So I always knew it was in me, but I didn’t know when it would come out, what age. He was about like 29 when he started his company and it’s odd, but 29 is kind of right when it hit Cory and I were like, dude, we got to do this thing and just start building our own future.

Ryan Bevilacqua (00:04:55):

When it comes to kicking back to your question about talking about money, it wasn’t a thing at all like investing, it’s just kind of like, I want you to go to college. My dad never went to college and he said, “Here, I’m going to pave the way, I’m going to put you into college and you’re going to get the education.” Little did I know going through college is, for me, I learned it was like all about the experiences, it wasn’t so much the classes and the things I learned in there. So it was like meeting different people, networking and going through college didn’t totally set me up for financial success, it took the self-education after college and doing the research and networking with people in the industry or in the FIRE community that really got me going to a path of my own success.

Ryan Bevilacqua (00:05:27):

So, it’s just very interesting you think that someone coming from a family of entrepreneurs or people that are successful, they know what they’re doing with their money and, or they talk about it and it’s not so often that they do.

Robert Leonard (00:05:37):

That distinction between being an entrepreneur and being good with your money hits home for me because my dad has been an entrepreneur nearly my whole life. I believe he worked a regular corporate job in the blue collar field before I was born, but ever since then he’s just been run his own business. But he’s not necessarily specifically good with money, he’s not an investor, he doesn’t do necessarily anything with it. So I think too often people think just because you’re an entrepreneur, or even a successful entrepreneur, that you’re also a great investor or great with personal finances, and that’s not always the case.

Cory Jacobson (00:06:06):

There’s actually a huge distinction between somebody who’s good with their money and somebody who’s an entrepreneur. In fact there’s a ton of people in our space that work 9:00 to 5:00 jobs and have that security and then use their extra 5:00 to 9:00, if you will, to build their side hustles on the side, to a point where they can get it to a sustainable position to be able to leave their job, and they actually may use that security and be better with money than the entrepreneur who’s running around doing all the tasks and has no time to think about what they’re doing with their money, making it work for themselves when all they’re doing is trying to run their own business.

Ryan Bevilacqua (00:06:40):

There’s such a rabbit hole you can go down here and I’m just thinking about, now that we’ve interviewed so many people and I start to kind of parlay these questions into my inner circle. You’re going out to dinner, you’re at family parties and you see successful people you start asking them questions a little bit. And recently have come across a pretty successful person and our circle and I was kind of asking him questions about his finance and how he set everything up and he’s like, “I don’t know, I just pay a guy.” And I’m like, it kind of blew my mind where it’s like, I tried talking about mutual funds and index funds and ETFs and he’s like, “I don’t know. I give someone, and I get a check at the end of the year, I get dividends.”

Ryan Bevilacqua (00:07:11):

And so it kind of blew my mind. I like to be in the weeds a little bit more, I have a financial planner but I also have my own money management, or I manage my own funds in a separate entity just because I like to play with it. It’s more of a game, not really a gamble because I’ve done a lot of research at this point, but I don’t like just passing off all of my money, my financial future into someone else’s hands that I don’t even know truly how successful that person is. It’s an interesting debate going back and forth, whether you should do it yourself, DIY or pass it off.

Robert Leonard (00:07:39):

Not to say that this is always the case, but what I’ve seen from a lot of entrepreneurs that, if they’re investing a lot of times they do hire an advisor, typically the 1% annual SS under management type of financial advisor. Just they don’t know any better so that’s just the route that they go. When you guys decided to go down the rabbit hole of self education, you probably found that there are a lot of different ways to achieve financial independence and become wealthy. In the FIRE community there’s a lot of people who choose to forgo real estate and just invest heavily in the stock market. Why did you guys choose to make real estate a big part of your strategy?

Cory Jacobson (00:08:13):

I originally started off with the house hacking strategy. And when I was 25 years old I was working for actually the Philadelphia 76ers. And I realized that my paychecks were money in and at the end of the month I was pretty much breaking even. And a mentor came to me and he was like, “Hey, you know a way that you can subsidize some of your living is if you buy up two unit property or buy a three or four bedroom property live in either one of the units, or one of the rooms and rent out the other.”

Cory Jacobson (00:08:42):

And once I did that, I had a mentality shift that I was like, I actually want to create this spread between my income and my expenses. So I bought a three bedroom property and I rented out two rooms, and I lived for free. I wasn’t able to make money, but that $700 plus utilities so $1,000 expense that I was spending, I was able to wipe that out and live for free. And then that was my first introduction to real estate. I wasn’t really a real estate investor yet, but I understood the concept.

Cory Jacobson (00:09:12):

So then I was thinking, wait a second. If I don’t live in the these properties, I can run the numbers correctly and bring in cashflow every single month, not only the cash flow, but the appreciation eventual of the property that builds long term wealth, the tax benefits that you get, and then you’re paying down your loan in the same sense so that you can either refinance in the future, or pull money out as a home equity line of credit or something to buy more properties. And then I figured, if I had enough of these properties, I actually wouldn’t have to show up to work. I wouldn’t have to trade my time for money anymore.

Cory Jacobson (00:09:43):

And so we, Ryan and I, we realized that we’re kind of on the same path, we started to buy real estate together and we’re on this journey towards, okay, I understand that I can potentially build a stock portfolio, but it doesn’t pay me every single month to eventually be able to alleviate the need to go to a job every day.

Ryan Bevilacqua (00:10:03):

I think it’s an interesting one, we always talk about financial independence and you can put a number on it, right? It’s like 25 times your annual expenses and you reach your FIRE number, right? So 60,000 bucks, you need $1.5 million invested, and then with the 4% rule, the drawback, you’ll be able to pay yourself 60 grand a year. So to translate that over to real estate, there’s also a way to compute it. And Cory and I when we got together we’re like, wow, we can find a X amount of properties that we’ll need, and then we’ll reach our FIRE number and then you work optional at that point.

Ryan Bevilacqua (00:10:30):

So for example, if you run the numbers and you find a property that cash flows for 500 bucks a month, you need 10 properties to be financially independent if you have $60,000 worth of annual expenses. So, just to run the numbers, that’s 500 a month times 10 properties, it’s 5,000 bucks, times 12 months, then you get your 60,000 number. So, that’s just like the bare bones even. If my annual expenses are 60K and I have 10 properties that are paying me 60K, I’m at like dead even. And then anything else is icing on the cake so, and then you can use your W2 income, right?

Ryan Bevilacqua (00:11:02):

You can live off that for your lifestyle, or you buy more properties. We typically would advise probably 12 to 15 properties at that $500 a month in cash flow, just so that way you have more of a cushion. You’re not just at your breakeven point, and that’s with that $60,000 example. But I love that, and it’s a something tangible for me. I know 10 properties at the 500 bucks a month of cash flow, I’m good. And we love real estate also because it’s tangible. It’s something you can go and transform and increase. You can force appreciation by doing a number of things in the property over time to help that go up in value and increase the rent over time. So we love it and, I don’t know, just it’s hands on proven.

Robert Leonard (00:11:39):

The 10 properties you mentioned at 500 a piece, that’s going to get you to your FIRE number, the traditional sense when FIRE was created, that is FIRE. What I think is interesting that’s come about, I don’t think it started when FIRE first originated, but over the last few years there’s been a couple different deviations of FIRE, like fat FIRE. And so that might be 20 properties because you don’t want to live just, you’re putting in all this work, you don’t want to live just how you have been forever, you want to live a little bit better, and so that’s what some would consider fat FIRE. And so there’s different kind of levels of FIRE as well as just the traditional FIRE sense.

Ryan Bevilacqua (00:12:11):

Totally. There’s fat FIRE, coast FIRE, lean FIRE, traditional FIRE, there’s a lot of things. And it’s evolving right, this whole little cult community of the FIRE movement, it’s awesome, it’s cool. You get everyone’s different opinions. There’s some people that are extremely frugal and they trim out all their expenses and live very, very frugally and they’ll reach FIRE way faster. Then there’s others that if you go the fat FIRE route they’re like, they just want a ton of cash flow coming in so they can live the lifestyle they want, have the big house, multiple cars. So it’s just interesting to go back and forth and hear the stories of everybody and what their FIRE, I guess, identity is.

Cory Jacobson (00:12:43):

It’s funny you asked this Robert because we have recently been talking to a number of entrepreneurs and just trying to figure out where we fit in this space, and what the ideal lifestyle for us would be like. Obviously we mentioned that $60,000 number per year, and I think that’s each of our baselines for financial freedom, but I forget what YouTube video we were watching where it said, $20,000 a month. If you can bring in $20,000 a month that is that point where your lifestyle starts to … you start to be able to do the things that I think that we both want to do.

Cory Jacobson (00:13:10):

And that is, be work optional, take the vacations, take our families to new places, explore the world and then have some nice things. So that is the number that I think if we can bring it in and within passive income in that structure, and I think that’s the route we want to go, and that might be, I guess, that’s fat FIRE. That’s a beast FIRE maybe, I don’t know.

Ryan Bevilacqua (00:13:31):

Yeah, yeah, yeah, for sure. Definitely fat FIRE. I mean it goes in stages, right? So I’d like to hit, we’re on pace to hit traditional FIRE too, so that’s where you want to get first. So once we get that 60K each year it’s like, okay, now let’s just ramp it up and get to fat FIRE. Because that’s, as Cory mentioned, where you can truly feel autonomous and feel the freedoms of your time freedom, your location freedom and we’ll be able to work wherever we want. If we just keep accumulating these properties, I’d love to pop open the laptop be in Dominican and just chilling on the beach, have the kids running around, hanging out and I’m like, just managing a couple calls from the property manager or finding another avenue to increase my income.

Ryan Bevilacqua (00:14:07):

That’s what we love doing right now as we’re exploring other options outside of real estate as well, just to bump up that income, and there’s so many fun options out there. But you truly need a lot, it takes money to make money. So to even be comfortable to explore other options and have your risks tolerance go up, you have to have that baseline and that’s where real estate comes in for us.

Cory Jacobson (00:14:26):

Yeah and the best part about this Robert is that, we found that it actually gets easier. The hardest part is, for us, was the first two years, we’re like in year four together, working together on this. But the first two years where you’re starting to get your first couple properties under your belt, those start to compound, they appreciate in value if you’re in a solid market, and then you’re able to use those properties to buy additional properties and expand your portfolio by having different layers and different income strategies.

Cory Jacobson (00:14:53):

So, the hardest part is trying to figure out your niche, and then once you figure out your niche, you take step one and two, and then actually steps three, four, and five have become a little bit easier, not because they’re actually easier, but because we’re better.

Robert Leonard (00:15:06):

Yeah I talk about that frequently. Because for me it was a log to get that first rental property. And then I was able to bur my second one and I got into that for $0 down, and I had like say $15,000 in equity. I put $15,000 into my first property and so I essentially, in theory, got those for zero. I got two rental properties for $0. But that first one was really, really hard, and then one to get past that, next thing you know you’re buying multiple properties, leveraging the equity in previous properties and it just becomes significantly easier.

Cory Jacobson (00:15:38):

A lot of investors that we talk to, real estate investors, talk about a seasoning period. We’ve been fortunate enough to invest in a real estate market that has not had a crash. I started in 2018, it’s been pretty good on the appreciation side since then. That’s why we run our numbers to make sure that the cash flow pays for the property, whether or not the actual value of the property goes up or down. But I think that there’s a seasoning period, that 18 months to two years where your property can appreciate at a point to where you’re paying your loan down enough to say, that’s when you can play with the money that’s inside the property, that’s your equity.

Cory Jacobson (00:16:11):

And what we’re doing right now is we’re taking out home equity lines of credit on our personal residences to go buy rental properties out of state. That’s that point that we’re talking about that we get to where, you got to get the first one before you can get the second. And then the second one can spill into the third. And as you do that you have a lot more options.

Robert Leonard (00:16:29):

What was the transition like for you guys? We’ll get into the exact specifics of what your first strategy was, and how you went from there but I’m curious, what was the timeline like from your first property to your second? And I’m asking because, I bought my first traditional rental and then I think I waited maybe two years before I bought a second one, and then I bought three in one month. So it was kind of like a weird scaling timeline.

Cory Jacobson (00:16:51):

Yeah, that’s a great question. And I bought my first property in 2018, and then I bought a duplex by myself … well so first of all let me back up. It took me about two years to save up the money that I needed to buy that first property. It was an FHA loan, I only put 5% down. But I wanted to live in an area that costed me $25,000 out of pocket, or maybe it was a little bit less $20,000 out of pocket, took me two years to save up. 18 months later, so that’s only 75% of that time, I bought a duplex. And then nine months after that, we bought a duplex together.

Cory Jacobson (00:17:24):

And then six months after that, we bought another one. And then now we’re getting ready to go purchase properties out of state just four months after that. That is kind of the period between where our cash flow is starting to roll into other properties and we haven’t spent a dime of it, it’s just helping to build our business up so that we can now go buy properties within our LLCs and banks look at us and say, “These guys they’ve started to build a real portfolio for themselves.” And I imagine that four months will turn into two months, which will turn into, hopefully we’re buying properties every month if we have enough income coming in to support it.

Robert Leonard (00:17:57):

I know you guys are both into real estate and stock investing. What I’ve found though is that a lot of real estate investors actually look down on stock investing or talk badly about it, or if you listen to a lot of real estate shows they just say that real estate is the only asset class. Why do you guys think that is?

Ryan Bevilacqua (00:18:13):

We were talking to someone the other day about this and it’s very interesting, it takes a lot of work to get into find a property, analyze deals, win the deal, get it under contract, and then you have to start managing it. Whether it’s you personally or I’m talking about long term rentals. So that’s either you managing it or you’re hiring a property manager, that is so much to do in so many different steps in building out a team where some people rather just go completely passive and say, “Hey listen, I have a lump sum of 50K, rather than going in and putting 20% down on a property, I’m just going to dump that into the stocks that I feel like are going to go up.”

Ryan Bevilacqua (00:18:43):

You could make the argument last year it was like between 20 and 30%, I think the S&P went up so it was a crazy year for it. And if you could make the argument that, “Hey, that’s going to continue to rise and I don’t have to touch anything of the property, I don’t have to deal with any of the extra BS and I’m just going to let it ride and keep going.” And so that’s why I think people may argue stocks are easier. For me, I don’t like throwing darts when it’s like, okay, could I pick the next Tesla, Amazon, Facebook? I don’t know that I could pick that.

Ryan Bevilacqua (00:19:09):

So we do stock invest but it’s more the index fund route. And specifically there’s a book that I love and I recommend for beginners, it’s The Simple Path To Wealth by JL Collins and he talks about essentially a three fund approach where you pick the total US stock market, the total international stock market and the total US bond market and just change your asset allocation over time essentially based on your risk tolerance. So like when you’re younger you have it more so in the VTSAX, which is the US stock market.

Ryan Bevilacqua (00:19:37):

And it’s an index fund that covers the whole market in these different sectors, and that’s not like me picking one stock hoping that it goes up. Because if it doesn’t then I’m screwed and it could go down a ton of value. So I’m more of an index fund kind of guy.

Cory Jacobson (00:19:50):

Yeah Robert but to answer to your question on a more granular level, I think people are just generally proud of what they do in their own niche. And I know real estate investors, we know what the behind the scenes are like, it’s not always pretty. So maybe it’s just because they feel like what they do, what they’ve created is, I don’t know if it’s an egotistical thing, but they just think it’s better. But what we’ve learned is that the average millionaire has seven streams of income.

Cory Jacobson (00:20:13):

So, what we want to do is diversify, not diversify too much but if the real estate market takes a crash, there’s a lot of people looking at it laughing like, “See, I told you so.” So we want to have enough buckets where we’re buying enough income producing assets. Real estate just happens to be what covers probably 75 or 80% of what we do. But as Ryan mentioned, we do index funds, we invest in our 401k just because it’s there from our W2 employer and we’re adding other streams of income so that we can, hopefully, if one or two of these legs on the table, so to speak, get kicked out, you still have other legs to stand on.

Robert Leonard (00:20:47):

An interesting question or challenge that I was posed with recently from somebody that I think is well educated and well intentioned, but doesn’t necessarily know a lot about real estate, they come from more of a traditional academic stock investing background, and they’re trying to learn more about real estate. But they asked me, “If you had money to invest and you can only do one thing, would you put it into a retirement account, whether it be a Roth IRA, 401k, something along those lines? Or would you put it into real estate?” And I know what I’ve been doing over the last few years and I’m curious to hear what your guys’ thoughts and approach would be to something like that.

Ryan Bevilacqua (00:21:22):

Sure, what’s the sum of money?

Robert Leonard (00:21:24):

Obviously that’s a big variable, but let’s just say it’s really any sum. I know obviously there’s limits to your IRA so, if it’s more than that you could put it to both. But let’s just say you could do either one, but you can only do one.

Ryan Bevilacqua (00:21:36):

I think it’s just common, the main common thing for people is when they first get their job, it’s like you invest in your 401k and you automatically go up to the employer match. Then you open the Roth IRA that it’s a $6,000 max for 2022. And you go that route because it’s a tax advantage account. However, I think the earlier you can get into real estate the better, because it’s going to generate you, if you run your numbers right and you find the right property, you could start a house hack, where you subsidize your housing, and then also … say you have a duplex, Cory’s done this, he could probably explain this better than me.

Ryan Bevilacqua (00:22:07):

But essentially by a duplex live in one unit, and then you have a tenant live in the other unit and they pay down your mortgage, and you ran your numbers properly you might even have a little leftover of cashflow per month. You could take that cash and start investing it however you like. Whether you want to dump that into your IRA, or you just want to save it and build up your emergency fund. So there’s a lot of different ways, real estate’s continually gone up over time. And if you can start somewhere, I would definitely go to the real estate route.

Cory Jacobson (00:22:33):

Yeah that’s a great point Ryan. I think for me, it comes down to control. And what I know about stock investing is that, I am not a CEO in any of these boardrooms, I don’t make the decisions. So to know if a stock is going to go up or down by whatever percentage, I am extremely hands off. We’re type A guys, we think that real estate gives you the control. What area are you going to buy in? You have the decision making power that you watch a path of progress in a city and it may go up and say, I want to plant my flag here.

Cory Jacobson (00:23:03):

And I think the control aspect of saying, I bought a property for $200,000, but I put $60,000 worth of work into it and now it worth $340,000, you can control the asset. So my vote would always be real estate, but that doesn’t mean that with the proceeds of my real estate I wouldn’t be then turning and investing into the market. And I’ll just give you one example. This is an example that Ryan and I probably will never get to see, and it’s rare that an investor does get to see this. But we know somebody personally who bought commercial buildings in Soho in 1960 for $70,000. He sold them in 2013.

Cory Jacobson (00:23:39):

And if you want to take a guess what he sold them for, you’re not going to create that type of leverage in the stock market and come out with, I’ll just tell you, 13 million at that point. So that is why the answer will always be real estate. And for me, that doesn’t mean that we have the knowledge base to find those types of properties, but it’s the power behind it is really what excites us.

Robert Leonard (00:24:01):

I completely agree, but it’s even more than just the amount, because like you said, that Soho example is a great example, but it’s kind of a outlier. You could also argue that you bought Amazon in the ’90s, and-

Cory Jacobson (00:24:12):

Totally.

Robert Leonard (00:24:13):

… 2000, and the stock market does really well. So I think what a lot of people miss is that, they think that the stock market appreciates much more than real estate, which is on average, probably true. But the difference here is that you have somebody paying off your property. So you might put 15 or $20,000 into a property that’s, if you house hack it, you could buy something worth say 400, $500,000, now in 20 years you only put $20,000 into something and it’s worth paid off 500,000. Turning 20,000 into 500,000 in the stock market is probably not going to happen over a 20 year period.

Cory Jacobson (00:24:47):

Exactly. And what we always like to say is that, we are not, after we make our initial investment, as long as the numbers are run right and you’re cash flowing properly, you’re not actually the one that’s paying for the repairs, paying for the capital improvements, your tenants are doing that. And then also giving you cash flow in addition to it. So, that would be the reason why we advocate heavily towards real estate. And yeah, it can be a smaller amount and you can also go the dividend route. I would say that if you want to be completely hands off and 100% passive and you have enough money to make yourself a difference, stock investing might be for you. We would never knock it. We just know that real estate is, I would suggest for our tolerance level, real estate’s the way that we would start off.

Robert Leonard (00:25:28):

Yeah I’m not knocking stock investing either at all. I’m a big stock investor. I put a lot of money into the stock market and I spent eight to 10 years studying stock investing before I even got into real estate. I do love it I just think that there’s this interesting dynamic of people who are in real estate that think that you should have no money in the stock market just because real estate’s an option. But Ryan you mentioned JL Collins and for anybody that’s interested in hearing more from JL, I love JL’s book I actually just recently reread it. Had him on the show not too long ago so you can go back and find that episode.

Robert Leonard (00:25:59):

But other than that one book, what other resources or material have you guys leveraged and leaned on to teach you everything that you guys know?

Cory Jacobson (00:26:10):

There’s a lot. I could FIRE off a million different books to you. Actually I’ll give a little plug here. We actually have all recommended books on our Instagram, so it’s @weeklyjuicepod, you click the link in our bio and we have a whole Amazon store of our favorite books based on financial independence, mentality, and then also real estate. So you have a cluster there but I’ll go through a couple. The first one we read that really set our mind off is the one that you’ve heard a million times, but it’s Rich Dad, Poor Dad.

Cory Jacobson (00:26:33):

And that’s a mentality one where it just changes your mindset to become an investor versus a consumer, and I love that, and it taught us about real estate and how cashflow can help set you off to freedom. That’s that one. Then we also read Retire Early With Real Estate by Chad Carson.

Ryan Bevilacqua (00:26:48):

I was going to go there.

Cory Jacobson (00:26:50):

Chad’s the man, he is such an excellent way of relating his story and real estate to the average person. And he has amazing YouTube videos online where he takes his little whiteboard, like as a coach would do and just outlines every different function that you’d possibly need, how to run numbers and just really love his story and his book set us off too. Those are the first two that we read in the real estate realm that painted the picture and helped us get to where we got.

Ryan Bevilacqua (00:27:14):

Yeah. And to go back to Chad’s book, because I think Rich Dad, Poor Dad is a staple. And I would tell anybody to read that book, but the amount of times that I’ve heard people mention it it’s almost nauseating. So I don’t want to just say to read that book because that’s like the foundation, that’s where to start. But Retire Early With Real Estate and Chad, hopefully he gets some more book sales from this, but he does case studies. So, I think there was 20 or 30 case studies from people all over the United States. And we’re talking about every single different market that you could imagine in the United States, and they have people relating their own stories to how they actually retired through real estate.

Ryan Bevilacqua (00:27:45):

And to know that it can be done anywhere and with people from all different socioeconomic statuses and backgrounds, it made me think like, I’m going to give credit to these people, but I don’t think they’re smarter than me, I can figure this out. And then that was the reason why we decided real estate’s the way to go.

Cory Jacobson (00:28:01):

Yeah. And I will say there’s probably a lot of people listening that they’re just turned off by books for whatever reason. They’re like, “Hey listen, I barely read in college. I barely read in high school, I’m not reading right now.” Self education’s so vital if you do want to take yourself to the next level and take control of your financial future. You need to read whether it’s … but you don’t have to physically pick up a book and scan it and read it. Audible is amazing and it’s just essentially an audio tape for the book. And almost every big book has that now, and I think it’s by Amazon. Download audible, podcasts are insane for resources, obviously we love podcasts. We’re on them, we host one.

Cory Jacobson (00:28:33):

And I would say just peeling one layer back is like another resource where it’s, if you’re going to hit a home run every time is bigger pockets especially for real estate. They have an online forum where everyone engages and they help build a community and you can share resources depending on market. And then they also have property analyzer tools, and they have a bunch of books that are published by their company. They created a publishing company, Bigger Pockets, and they have experts in each area that write the books. And we just went and read the books.

Cory Jacobson (00:28:57):

And for me I like to, I just call it like my Bible, I have a bunch of these things that I carry around I highlight like my scripture. But I keep it so that way if we have a question in our business I’m like, hey, hold up, let me go back and go to the masters, and this is how they did it and then we can formulate a plan. So we’re big advocates for them and we’ve come to know a lot of people in that community as well.

Robert Leonard (00:29:15):

I completely back everything you guys said about Chad, I’m thankful to be able to call him a friend and be able to text with him frequently and chat about all these different business concepts. He’s been on the show, I don’t even know now, three, four times. And funny enough I haven’t actually read his book, but I know, have watched a lot of his YouTube videos and chatted with him a lot so I know a lot of the content that he puts out is …

Cory Jacobson (00:29:35):

We’re like Chad’s, I don’t know if he knows this, we’re like his mascots. Everywhere we go we talk about him and we [inaudible 00:29:40]. But we were just actually messaging him on Instagram the other day because we were helping him grow his Instagram a little bit. Yeah he’s a great guy.

Robert Leonard (00:29:48):

What’s great about it, and what’s interesting as a case study is that, Chad is probably really relatable to us three because we’re all athletes and Chad’s an athlete. So I mean, Chad has great content and he teaches everyday people who are not athletes to do great things in real estate, but just he really probably speaks to us three because of us being able to connect with him.

Ryan Bevilacqua (00:30:06):

I think as like, I don’t want to judge this each way, not be like sexist, but as men, I think we are visual people. And I like to see things in front of me written down, charts, graphs, et cetera. When Chad pops up the YouTube video and he has the whiteboard, it brings me back to my days where we’re playing sports and I’m like, all right coach, here we go, what’s the play we’re running? And then he breaks it down with different color coordination and the markers, it’s so basic, but you really feel like you’re going back to school, but the way he talks about it’s super relatable to us and you want to engage. You’re like, all right, cool. If he did it, clearly I can do it too because you feel like you’re kind of cut from the same cloth.

Robert Leonard (00:30:40):

Ryan you also mentioned that a lot of people don’t like books and what I’ve found both myself, but also from a lot of other people is that, they say that they were not readers in school or when they were younger, they didn’t read in middle school or high school, or even in college, they did everything they could to get out of reading. But now that they’re not being forced to read and they’re able to choose what they read, and they’re choosing about things that they’re passionate about, they love reading and they’ll happily do it. So I’m sure there’s still definitely people who don’t like to read but I think that there’s a lot of people who prefer it in this case, over what they had to do in school.

Ryan Bevilacqua (00:31:13):

Completely agree. It’s hard to go back and tell an 18 year old, you have to decide what you want to do for the rest of your life right out of high school. And then some people pick a major, some people don’t go to school, which great, but some people pick a major that they think they’re interested in and then like year three, when they’re about to graduate the next year, they’re like, whoa, I hated pretty much everything I read, I don’t understand why I picked this major, and then you get into this big head space where you’re like, am I doing what I’m supposed to be doing? Did I make a mistake?

Ryan Bevilacqua (00:31:39):

So I just think it’s very hard for people to figure out what they want to do with the rest of their life at such a young age. And that’s why a lot of people are like, damn, I don’t want to read this book, I’m not interested in it. They think the major’s something for them and they’re like, nah, it’s not for me. But there are so many resources online, it just goes back to self education. If you find something that you’re interested in, you can literally find that online today and dive into the deep rabbit hole of educating yourself on that topic.

Ryan Bevilacqua (00:32:03):

So, I think it does come down to money, money rules the world, hate to say it, you don’t have to love it, but you have to get good at managing it and using it, and personal finance is not going anywhere. Once you leave school or you get to a certain age, you’re going to start to have to fend for yourself. And you don’t want to wake up at 40, 50 and say, whoa, I never took this serious and I lost all this time and I have to play catch up now because that’s what a lot of people, I think, are doing now. I know millennials we feel like we have a lot on our plate because we do.

Ryan Bevilacqua (00:32:33):

We’re fighting the 7% inflation, but also we’re young, we want to go out and do stuff where we’re like, we’ve seen whether it’s our parents or the older generation, it’s not cutting it. Whatever they did, it’s not cutting it. So we’re trying to pave the path at a younger age for our future generation. So it’s heavy weight but I think it’s something Cory and I really like pursuing and sharing as much knowledge as we can.

Robert Leonard (00:32:53):

Not only do you have to decide what you want to do with the rest of your life at 18, but also the world is evolving so fast. I think back when the narrative was created, that everybody has to go to college, the world wasn’t evolving that fast. When you’d go to college, four or five years later, the world was relatively the same as what it was when you entered. For us, and we’re not even that old, we’re all similar in age, but we’re not that old, the world is so different now than it was when we went to college. I went through, got my MBA and I don’t do anything with that now.

Robert Leonard (00:33:19):

And I love what I chose so I didn’t go down a path that I didn’t like. I love what I chose but who knew that I’d host a podcast full time, or invest in real estate? That just wasn’t a thing when I went to college. So it’s just totally opportunities outside of just liking what you choose at 18, there’s opportunities that come up that you couldn’t even expect. Ryan you also mentioned an interesting thing about personal finances, there’s a lot of problems, I think JL Collins taught me this on the episode that he was on.

Robert Leonard (00:33:44):

But, there’s a lot of problems in life that if you just let them go long enough, they eventually go away. Like health and personal finance are a couple of the few things in life that will never go away, the problems just get worse and worse. He said to me, “Just deal with it now so that when you’re 60, you don’t have to. Because if you don’t deal with it now it’s just going to get harder and harder, and at 60 you’re still going to have the problem, at 70 you’re still going to have the problem. It never goes away.” So it’s one of those things that you just kind of, like you said, even if you don’t like it, you have to get a control on it.

Cory Jacobson (00:34:11):

Robert I think one of the goals of life is to do what you want to do when you want to do it, and what you’re passionate about and make that something that you can do consistently. You can do that but if you are always thinking about money, it causes a time in your life where you’re going to be desperate and you may not be able to make free, clear thinking decisions about you being able to do something that you love. You may have to make sacrifices to do something that you don’t love.

Cory Jacobson (00:34:34):

But if you put money at the beginning and then you say, I’m going to try to build income streams that are coming in so that I have enough freedom in my time to be able to do whatever it is that I want to do, whenever it is that I want, then you can become an artist at 44. And it’s not like somebody’s going to look at you like, you’re going to ruin your financial future if you’re not successful because you have already laid the groundwork to make your housing covered, your living expenses covered in the past so that you can do whatever it is that you want.

Cory Jacobson (00:34:59):

And not just at 65 Robert, but maybe at 30 or 25, or 40, or somewhere where you still have your mobility, capability to travel and do all the things that you want to do. So we just put it at the forefront and we’re saying, let’s not get it out of the way, but I have a lot of passion projects that I want to work on that if I never thought about money and how it can work for me, then I would never be able to do it until I’m way too old to be able to make it happen.

Ryan Bevilacqua (00:35:23):

I don’t know if it’s just my personality but I am type A and I like things organized and efficient. So when I feel out of place somewhere, where I feel like my things are all scattered around it’s not good for me, I like to feel like things are flowing in the right direction. And I think a lot of people are genuinely like that where they’re like, listen, my career is … I’m having fun, I like what I’m doing but I might not be making enough. And it’s kind of one of those things then you start butting heads with like damn, should I go pursue something else that pays me more, but I have less passion for?

Ryan Bevilacqua (00:35:51):

And that becomes kind of like Clash of the Titans there. So for me, bringing it back to the whole, when we bring this up is like systematizing your life and making it run efficiently will clear so much head space and make you feel freer, you’re like clear body, mind, and essentially having your freedoms back. So for me like right now, we’re in the process of essentially restructuring the business a little bit, working with our real estate attorney and CPA, just to get everything funneling and flowing in the right direct action.

Ryan Bevilacqua (00:36:17):

And once that is like perfectly clear and in motion, I know that I’m like, good, we’re done with that, we can move on to the next thing, my personal finances, right? You have all your buckets flowing into each other. And once they do, you’re just in a better head space and you feel like you can go attack the next thing. I will say, you ask for resources again, one book that I think people should read to get their financial house in order is, I Will Teach You to Be Rich by Ramit Sethi.

Ryan Bevilacqua (00:36:39):

I read that recently after I thought I had my financial house in order, which compared to most, I definitely did, but this helped me like sharpen the acts, if you will. And just make it so streamlined that you can’t really go wrong. It’s a six week program in the book but you can make it more efficient than that. Definitely read it, I sent it to both my younger cousins that are 18 in college, they’re both bookworms so they’ll absolutely read it which, and if not, I actually told them I expect a book report on it because they were like, “Hey listen, I see what you’re doing on podcasts, you seem to have an idea of what you’re doing.”

Ryan Bevilacqua (00:37:07):

I’m like, here’s your starting point, and I’ll point you in the right direction. And if you read it, we’ll go to the next step and I’ll just continue to teach you along the way because I’m happy to. I don’t want to keep all this knowledge that I’ve learned and keep it to me, we’re preaching to everybody else, you got to take care of your pack. Just want to make a point there, go read the book Ramit Sethi, I Will Teach You To Be Rich, it’s a game changer.

Robert Leonard (00:37:25):

Funny enough I actually didn’t read that book for a long time solely because of the title. And it felt like a gimmicky book to me. And I didn’t know much about Ramit at the time, but I was like, this title’s gimmicky, I’m not wasting my time or money on this book. And then eventually I did and like you said Ryan, I really actually like the book, I think it’s a great starting point for a lot of people. There’s a lot of people who get stuck in, what I call the knowledge trap where they just learn, learn, learn, and they never take action.

Robert Leonard (00:37:50):

And I think learning is super important, people need to do that of course, but there’s a point where you need to just not necessarily stop learning, but prioritize action more than more learning. How did you guys do that? How did you know when you were ready to actually start taking action?

Cory Jacobson (00:38:03):

The short answer is we weren’t. And I think that that’s important to note, is that you’re never going to be 100% ready. And if you try to wait until you are 100% ready, you will take it directly to the grave because you won’t be. I have a little bit of a blueprint that I think I could share with people that would give you an idea. Depends how many days a week that you’re thinking about actually taking the knowledge but, if you do six to 12 months, because you got to learn, especially if we’re talking about real estate.

Cory Jacobson (00:38:29):

Six to 12 months and you just learn everything that there is to know, we just gave you a bunch of resources to do so. Our podcast we like to think is an authentic version of our own journey, and a resource that people could latch onto to learn. So six to 12 months of learning. And then once you hit that 12 months point, it kind of gets to a point of diminishing returns where it’s like, you may learn some new things along the way, but it may not help you enough, taking action would actually be better. So then it’s the action phase.

Cory Jacobson (00:38:53):

You take action and then while you do this, you learn so many things through your experiences then you pivot. Taking this action and then you pivot along the way, and I can throw an example out there just in my life, I was pretty ready to buy my first duplex but not 100%. I did it, I made the move and it turns out I didn’t realize that, you’re supposed to fix up these properties when you buy them and I didn’t put any money. So for the first year it was a complete money pit. But in doing that, I broke even in cashflow so I thought, I’m supposed to be making X amount of money, I broke even in cashflow.

Cory Jacobson (00:39:24):

Then the following year after I made all these fixes, I made about $450 a month in cashflow. Good that’s a win, that’s a pivot. Now I know next time we buy a property, we’re going to do all the fixes up front. I wouldn’t have known that in the beginning. And in doing that, my property has appreciated $70,000. So now I have this equity in the property that I can figure out what I want to do with it and how I want to play that game. So, learning, taking the action, making that actual mistake, learning the mistake the hard way, as long as you can sustain it through having enough income coming in to support it, learning the mistake, pivoting, and then going, taking further action, I would say that is how we created a system to, just can’t be afraid to fail because failure will then create your next success.

Ryan Bevilacqua (00:40:07):

The most important thing I think for us is, or not the most important thing, but one of the important thing is like, when we interview people on our show, it’s to hear unique stories of people that have done it before us successfully and the hopes that someone that’s listening says, “I can relate to that story.” We bring on all walks of life. I don’t care what you look like, what age you are, what you’ve done in the past, you’re sharing your story and you’ve seen success. So someone is going to say, “Hey, she looks like me, he looks like me. We’re from the same area.”

Ryan Bevilacqua (00:40:35):

Latch onto that story and potentially you can learn from their systems that they put in place, and their strategies that they’ve implemented. For us, let’s just say, call it like it is, we latched onto coach Carson. We were like, damn, he’s an athlete, he’s literally writing it out for us and teaching it the way we want to interpret information. And once we felt like we had 75, 80% of the knowledge, we’re like, dude, we just got to do this thing. I think there’s a quote that I love is, life begins outside your comfort zone.

Ryan Bevilacqua (00:41:00):

So you’re going to get in this wheelhouse where you’re comfortable reading and researching, and you’re going to get a ton knowledge and you just keep on that cycle. And you’re going to analyze hundreds of properties and you’re like, maybe once the next one’s done, once I’ll feel comfortable. This one only cash flows a little bit so I’m not going to take any action. The average person that makes, I think about between 15, 10 to 20 only offers before they get a property even accepted and to move to the next stage.

Ryan Bevilacqua (00:41:22):

So what I would recommend is, do your research for about 12 months, and you’re going to find a story and a strategy that resonates with you, and then jump into that lane and dive further into that rabbit hole of saying like, okay, buy and hold seems good to me, long term buy and hold. I’m going to go that route. Then you got to pick your property type. I want to go single family, should I go into small multi, maybe I want to do the duplex and do a house hack. But for us it took to hear a story that we resonated with, and then we went like bats out of hell and did as much as we possibly could. But one day we looked at each other and we’re like, dude, we just got go, let’s just make an offer. I don’t know.

Ryan Bevilacqua (00:41:55):

We feel pretty much ready, but there is no actual time that you’re going to feel 100% ready, you have to take that leap of faith and you’re going to learn, as Cory said, through the experiences that’s been, I think that’s with anything in life, but especially with investing in your financial future.

Robert Leonard (00:42:09):

I talk a lot about how house hacking is kind of like becoming a real estate investor, or a landlord with training wheels, or doing a light version of it. So what has house hacking taught you guys that you were able to leverage into investing in traditional rentals?

Cory Jacobson (00:42:25):

You’re right about that Robert, it was like a training wheels edition to it. The number one thing that it did for us was allow us to gain personal cashflow in our lives. The monetary value was the biggest help there where, instead of spending a $1,000 a month on rent, I was actually able to save that money and save it up and then move it into the next investment. So, monetarily is the biggest thing. And then also understanding the relationships that you create with tenants. The tenants that I had, essentially, they happen to be my friends, but I had to make a distinction between what was friend and what was, oh no, this rent is due on this date and if it’s not given or you don’t pay it, there are action steps to take.

Cory Jacobson (00:43:06):

So, I think really the biggest thing was the framework that it laid for, okay I collect rent, what are my systems that I can put in place in a simple manner that will then translate into real estate investing at a distance or scaling a portfolio?

Ryan Bevilacqua (00:43:23):

Yeah. And I would say you’re going through the process of buying a property, so it starts at the bare bones of building your team. You got to find a real estate agent and then hope that that person is savvy enough to go out and help you find the right property. And then you can use their resources to find a lender, to find a contractor, to find everyone on your team. When you go through that process, say this is your first time getting into real estate, it truly is investing on training wheels. The only thing that would probably be a little different is, for us, it was having friends live with us.

Ryan Bevilacqua (00:43:53):

You’re not outsourcing and screening tenants, that was the next phase for us where we’re like, when we bought our other investment property it’s like, okay, now we really got to go through the tenant screening phase and find someone that we want in there and run background checks, and do the whole nine. But it truly is, like you said, taking the action and you’re going through the experience. You’re learning how to buy a property, you learn how to manage a property, collect rent, all that. And then you can say, okay, what systems do I need still that are not in place for my next one? And then it just helps you kind of move along in the process of just becoming a seasoned investor.

Robert Leonard (00:44:24):

There seems to be a misconception that you can’t invest in rental properties if you’re house hacking it’s, you house hack for a while and then you get into rental properties. They’re not done at the same time, they’re kind of steps. And I think you guys and myself would agree that, you can buy rentals while you house hack. I’ve house hacked three times and I continue to buy rentals, and I’m going to continue to personally house hack probably for a while. What do you guys think about house hacking in terms of a timeline for you? Are going to keep house hacking? When are you going to stop?

Cory Jacobson (00:44:52):

It’s a good question but the key word that you said was, you can’t, and I think that as a … becoming a more seasoned investor, the question has become how for us, how can we make this happen? Because we’ve interviewed investors on our show that their first investment was a 50 unit complex. And we’re like, whoa. For us we’re like, how did you even go into thinking … most investors go house hack, single family, duplex, triplex, quadplex and then they work their way into commercial. But everyone’s risk tolerance and what they’re willing to kind of, I guess, risk and go out there and who they’re going to meet and who they’re going to network with.

Cory Jacobson (00:45:22):

The timeline for us would be whatever you’re comfortable with, but we just think house hacking was the first staple in it. And now our timeline kind of went like house hacking into small multifamily, that is technically out of state but it’s pretty close to us, like an hour away, and now our next phase is real estate investing at a distance across the country in better markets that make better margins and more sense for us with people that we really trust.

Robert Leonard (00:45:50):

Do you have a specific point of when you’re going to be done house hacking? Are you going to hit a certain cashflow number? Are you going to hit a certain age, certain number of units when you’re going to be like, okay, I’m done house hacking. For me it’s maybe not a hard rule, it might change. But I think right now roughly around 30. I just turned 27 last week so when I hit 30 I think that’ll probably be the last time I house hack, but it might not be. But that’s kind of like what I’m looking at for a timeline.

Cory Jacobson (00:46:13):

I think predicting that is difficult to do because life continuously changes for us. Ry wasn’t house hacking but I decided to because he’s married and I’m single. So I think that was one of the steps that was easier to do that, easier to be like, I’ll live with people that I know, friends or even people that I don’t know. So for me, I think that I could probably continue to house hack for another three to four years if I wanted to. What I may end up doing instead of buying a single family home again and living in one bedroom and renting out other bedrooms that I’m in close quarters with people, is potentially buying a duplex or a triplex and living in one of the units where I have more secluded your own space.

Cory Jacobson (00:46:52):

And then you may be sharing a wall with few, but you’re not sharing a dishwasher with somebody. So I can do that for the foreseeable future, and even if you were raising a family, having multifamily where you live in one unit and rent out the other, it’s a sacrifice, a small sacrifice for a lot of financial gain. But I don’t know that there’s a specific age where I would say I wouldn’t do this anymore because, you can buy a new construction duplex, for example we live in Philadelphia, you can buy a new construction duplex for 450 or $500,000, and we’re talking really nice, in the path of progress, and have a two bed, one bath that’s 1,000 square feet and beautiful, and then that’s going to be worth so much more in a number of years, and you still have your own space. So kind of up in the air, I would say.

Robert Leonard (00:47:31):

What you described with that duplex is almost exactly what I’m doing. I’m not married but I do have a son, he’s three and a half. And he and I live in a duplex that’s a two by one with like 12 or 1,300 square feet and it’s pretty nice and I pay like 500 bucks a month because my tenants pay like 80, 90% of the mortgage and it’s great. And so for me I could continue to do this for a long time, but for me I’ve kind of more set the limitation of 30 to motivate myself. But if I still want to at 31, 32, 33, I certainly could. I think what else is interesting when we talk about real estate deals is that everybody has different goals and opinions on what a good deal is. So when you guys are analyzing a potential deal, what are your benchmarks and requirements, and what are you guys looking at?

Cory Jacobson (00:48:15):

Originally when we got into real estate investing, there was a number of different people that told you like $100 a month in cashflow was what to look for. The problem with that is if you have a furnace go for $3,000, your $100 a month in cash flow is then loss for potentially three years. So we figured what’s a good deal to us? What makes the most sense? We basically say that singles, we’ll call it singles, $250 a month in cashflow, that would be our bare minimum per door that we would go after.

Cory Jacobson (00:48:44):

Singles are great, you can hit them all day, you can stack them and they compound into more. Then you get of the doubles range where you’re talking about 350 to $400 a month in cash. They’re great too, obviously if you go up from there, grand slam, anything is really seven, $800 above in cash. So we try to hit as many doubles, triples and home runs or grand slams as you can, but $250 a month is our minimum. We’ve been fortunate enough to get properties that are around the five or $600 a month in cashflow number. And to get to that number we’re essentially just taking the rents and we’re subtracting out PITI, which is principles, interests, taxes, insurance.

Cory Jacobson (00:49:21):

And then you’re taking your expenses, so we run all our numbers with property management at 10% included, they concede about 5%, we take about 10 to 15% for maintenance. And then obviously any utilities that may be paid by the owner, lawn care, snow removal, water bills that can’t be separately metered. We take all of that and as long as that we’re coming in and around $250 above, we’re at least looking at the deal. So we don’t necessarily like to go off the 1% rule, which is, if you’re buying a property for $100,000 do you bring in $1,000 a month in rent? Just based on the fact that it’s all market dependent. And in our area that wouldn’t work. But that doesn’t mean there’s not good deals to be found.

Ryan Bevilacqua (00:50:01):

Yeah and it also comes down to cash on cash return, like the amount of money that we have to fork up for a deal, is it going to bring us the return that we’re looking for, especially in cashflow? 250 is the bare minimum for us to look at it. We’re looking for stuff in the 400, $450 range because think about it, we’re splitting it. At the end of the day that would be 200 for me, 200 for Cory and we’re like, okay, we’re good with that. Granted it’s all funneled through the business, but that’s just kind of how our brains work on it.

Ryan Bevilacqua (00:50:22):

It’s also an area that we think is going to appreciate. Maybe we’ll take 250 for something that we’re like, we know this is going to go up or we really foresee this going up in the future to get a ton of equity in the property, that would be something we’d be looking at more so than something in an area that pretty much isn’t a stalemate that isn’t going to go up, or hasn’t gone up that much, and that would be where we would take probably the 450. It is deal dependent, market dependent and there’s so many other avenue outside of real estate where you can funnel your cash, so it’s just finding that balance of like, okay, do we want to drop $20,000 in this one specific property each? Or do we want to dump it into something else?

Robert Leonard (00:50:56):

Not to say that $250 a month per door is the right benchmark, but that’s also my benchmark as well. Just kind of so happens that that’s what I look for. I think the people that are looking at $100 a month is kind of crazy just because I actually just got a bill in the mail yesterday for the taxes at one of my properties going up. And it went up by like 50 bucks a month or so 40, 50 bucks a month, and over the last two, three years, I think it’s gone up like 80 total per month. And if you were only making $100 a month in cash flow, those taxes just going up over the last couple years, you’re wiped out.

Robert Leonard (00:51:27):

In theory you could raise rents, ideally the goal there would be to raise rents more than the taxes are going up. But if that’s not possible, if you have a long term tenant who’s a great tenant, you might not raise rents on them and then, there you go, your whole profit is wiped out. And then the other piece you mentioned is cash on cash, I think that is the other really important piece because, what if you put up $1 million and you’re only getting $250 a month in profit? I mean, that’s not great.

Robert Leonard (00:51:48):

But if you put in 5,000 total and you’re getting $250 a month, now that’s a great deal. So it is really dependent on cash on cash as well.

Cory Jacobson (00:51:56):

Yeah, exactly Robert, and that’s why the strategy that you use, the birth strategy, can be so effective because you can essentially get infinite cash on cash return if you are playing the game properly and just throwing an example out there, buying a $100,000 property with 20% down, and then you’re putting in $50,000 so you’re all in, your cash is maybe 70 grand but you’re all in the property for 150, it appraises for 250, you can pull your money back out, even that you invested in the beginning, and then any cashflow that you bring in from your rental properties, from the rents, could be infinite cash on cash return.

Cory Jacobson (00:52:31):

Those are harder to do now. It’s more difficult to do that in 2022 but it’s still possible depending upon your network. So cash on cash is a very big number, although we don’t have 100% specific, this is the cash on cash return number that we need, because there are so many varying factors that may play into a good deal and we a say, this is a little bit less cash on cash, but we’re playing the balance between the appreciation and the cash flow. We think that if we do that enough, throw our hat in the ring enough times on that, some properties are going to work, some properties aren’t.

Cory Jacobson (00:53:02):

But if you have eight out of 10 of them that are doing what you suggest that they’re supposed to do based off the spreadsheets, you’re going to be in a pretty good place.

Robert Leonard (00:53:09):

Typically, as you mentioned, the appreciation is going to work against your cashflow. If you have a higher appreciating property, you’re probably going to have a little bit less cashflow, if you have more cashflow, it’s probably not going to appreciate. It’s not a hard and fast rule but general rule of thumb typically is the relationship between the two. When you guys started to get into traditional rentals, what type of properties did you target? Were you looking at single family, duplexes, triplexes, commercial? And why did you pick that asset class?

Cory Jacobson (00:53:36):

Here’s what I’ll say, based on what you just said there, Robert, in terms of, you can’t dive 100% all in on a spreadsheet and think that just solely to trust the numbers. And I’ll give you an example why. We met an investor and we went out to Cleveland, Ohio. And there’s no knock on this place because there’s a lot of good things going on in this place. This investor that we know is crushing it over there because it’s his niche. He understands the market, he truly gets it.

Cory Jacobson (00:54:00):

But we went over there and we’re looking at investing in a specific area, the properties were like 20, $40,000. And when we ran the numbers on the spreadsheet, this triplex was supposed to give us $1,700 a month in cashflow. And that’s after all expenses. So we’re thinking, wow, that’s incredible. But when you actually go out there and you view the property and you realize that you might have more vacancy that you’ve ever had, it’s going to be very difficult to manage this property and collect rents in a timely manner every single month, your spreadsheets are lying to you.

Cory Jacobson (00:54:29):

So, that was one of the things that we said, we need to create the balance between getting all this cashflow. That’s why there’s almost like this red zone where if it’s like too much cashflow, you have to understand why you’re getting that much cashflow and go for more of the balanced approach. Our was to go into small multifamily because we understood it. And we wanted to go into a market that also played into the growth of small multifamily within that market. That was the whole goal because small multifamily really plays in that cashflow game.

Cory Jacobson (00:55:02):

Single family homes are not meant specifically for cashflow. They’re not designed to bring in cashflow because you don’t read them as a business, they’re more so like a home or where a family lives. But multi-unit apartments where if you get even at the four, five, six, seven, and bigger they’re designed and they’re purchased based on the income that they bring in. So we thought, let’s play in the small game because you can do residential loans if the property is four units of and below.

Cory Jacobson (00:55:28):

So let’s play in the two, three and four unit area to try to get our feet wet and understand the game before then we move onto larger acquisitions in the commercial space. So, small multifamily in markets that are probably B, B minus areas that may have some appreciation value that will also continue to cashflow.

Robert Leonard (00:55:46):

What have you guys struggled with so far on your real estate journey and what mistakes have you made? What did you learn from those struggles and mistakes that you’re applying to your future investing endeavors?

Cory Jacobson (00:55:58):

What have we not struggled with?

Ryan Bevilacqua (00:55:59):

Yeah I think the whole thing is, you often fail forward and fail fast and money messed up your order on those, but you learn through failure. And so I’ll just say a struggle for us has been, now, where we’re currently at, is we’re getting thrown deals and business opportunities in a bunch of different sectors, if you will, and it’s where are we-

Cory Jacobson (00:56:18):

Shiny objects.

Ryan Bevilacqua (00:56:18):

… Shiny objects, yeah. Where are we going to get the most return and what’s going to be sustainable for the longest amount of time? And then it’s like, what lane should we pick at the moment? And we kind of have to keep re-centering ourselves to say, hey listen, we said we are all about cash flow right now. We want to get to that 60,000 mark each per year to cover all of our expenses, and then we can go for maybe a different appreciation play. So, it’s exactly what Cory said, is it’s shiny object syndrome it’s like, here’s an automation system where you can invest in my online business.

Ryan Bevilacqua (00:56:46):

Or, hey I have a potential syndication deal, you just have to give us 50K and we’ll give you X amount of cash flow and it’s, oh, then you’re in the apartment building field. Or, here invest with us over in Cleveland, come invest with us in Utah. Just a lot of different places it’s like, you have to find your niche and build your buy box. And I think that’s the most important thing. It’s like, find your cashflow number that you’re looking for, find the market that you want to be in, and that’s one of the best pieces of advice we’ve gotten recently is like, pick your market and stick to it for X amount of time.

Ryan Bevilacqua (00:57:13):

You’re going to have people reaching out to you trying to pull you in every different direction, but find where you feel comfortable and where you want your business to land, and just keep hammering it over and over and over and build your base there. And then eventually you can, once you’re sustained, you can build out and go into a different field.

Cory Jacobson (00:57:27):

And to add onto that, we interviewed Matt Faircloth on our show recently, and he’s brilliant in terms of private money lending. And he has over 2,000 units himself, his company. And he says, “I have 2,000 units and I invest in three markets in the United States. I won’t even look if they’re outside of those markets.” So once you understand your niche and where you specifically want to invest, where your team is, where your network is, where you can really grow, he has 2,000 units in three markets.

Cory Jacobson (00:57:54):

It’s not like he’s looking all over the place and trying to find the next deal, the next thing that just pops up. And honestly that’s been a struggle for us because we’ve had opportunities that have come our way that we’ve had to say no to. And to be candid, some of them we’d said yes to and we didn’t think that we were going to say yes to them. We’re trying to build a number of different income streams so we just have to kind of say, if we’re going to spend 80% of our time on this niche, it’s okay to deviate, we’re not saying that you have to be super rigid because we haven’t been.

Cory Jacobson (00:58:21):

But for the most part, we know where we want to end up and hopefully all these puzzled pieces fit together to help us get there.

Ryan Bevilacqua (00:58:27):

Yeah. And it’s hard because, you want to try things. So we talk about we’re long term buy and hold guys but we had an opportunity to buy property and renovate it, then rent it out at the end. And we went through this whole renovation, it took like four to five months, that we weren’t really expecting, it was almost a DIY kind of project where we were managing the contractors, we’re at the property every other weekend and we were exhausted after. I’m like, dude, we don’t want to do that again, at least for the foreseeable future, unless it’s a home run deal, which honestly this one was so we’re very thankful for it.

Ryan Bevilacqua (00:58:55):

But we’ve been pulled in the directions again. Like I said, hey, do you want to jump in on this flip? Do you want to do this? And it really is, you have to be careful with the cash you have and make sure you’re deploying it in the right thing. And I think that gets … it’s nice that we have a partnership, because we can bounce ideas back and forth. One of us might want to be gung ho all the way in on this and then you have devil’s advocate next to you saying, hey, let’s pump the brakes, here’s our goals for the year, does this fall in line with X, Y, and Z?

Ryan Bevilacqua (00:59:20):

So I think that’s super important to have an accountability partner that will keep you in line. But I also want to say when I talked about being efficient and having your business rolling in the right direction. Another hiccup that people get hit with is, hey, should I open an LLC? Should I buy into my personal name? And how do I form my business? And people thinking they have to start with an LLC holds them back from ever taking action. So I want to remove the stigma there. You can buy in your own name and then you can transfer over to an LSD later.

Ryan Bevilacqua (00:59:45):

Probably 1% of all of these will have the due on sale clause where the lender says, “Hey, you want to transfer this over? We’re going to have your whole loan due at the time.” A, that happens you can refinance, or B, you can say, hey listen, just kidding. I’m not going to dump it into the LLC I’ll keep it for now and just buy yourself more time. That was a little side note. But for me we’ve recently come to conclusion that, hey, our business might not be structured the most optimal for tax purposes, and to be able to experience certain write-offs.

Ryan Bevilacqua (01:00:11):

So we’re going through the process now of working with a new CPA and real estate attorney to have our business structure streamlined. And so everything in flow into the right buckets and I think that just comes with time. To answer your question, there’s so many different hurdles every day and we’ve struggled with a lot of different things. But the only way you’re going to get really good at it, is to go through the struggle, you’re not going to hit a home run on every aspect of your business without having some failures and going through and pivoting. We’ve certainly pivoted a lot over the last couple years.

Robert Leonard (01:00:39):

As we mentioned at the beginning of the show, I was a guest on your guys’ show twice now so you’ve had the chance to ask me a bunch of questions. So if anybody wants to hear more questions that Ryan and Cory asked me, you guys could go check out that episode. But as long time listeners of the show know, I like to wrap up the show by having the guest ask me a question. So Cory, Ryan, what question do you guys have for me?

Ryan Bevilacqua (01:00:58):

I got one for you. If we gave you a lump sum of 50,000 bucks today, just saying, hey, Robert, you can have this 50K do what you want with it, whether you’re investing it or spending it, how would you break up or divvy up that pie of 50K and why?

Robert Leonard (01:01:13):

I would probably put some into an RV rental and real estate.

Ryan Bevilacqua (01:01:19):

Why would you pick the RV rental and real estate? And what type of real estate would you put it in?

Robert Leonard (01:01:23):

Real estate I would probably just, you guys talked a lot about knowing what you’re good at, following your box of what you know you can do and I have a really good system for buying my single family rental properties in Texas, so I’d probably just buy two, three more of those, and also I would buy an RV. And the reason I would do the real estate is because it’s a … Every benefit that you have of real estate that we’ve talked about, we get the cashflow, a little bit more appreciation, it’s a little bit safer of an asset class, not as much of a kind of speculation.

Robert Leonard (01:01:50):

Whereas RV rental, it’s going to be a lot more cashflow, it’s going to generate probably the most instant cashflow that I could generate with that money. But it is maybe a little bit more trendy, maybe a little bit more speculative, maybe not as long term, you’re definitely not going to get any appreciation. So I would be able to split that money to get the benefits of real estate, but also generate significant cash flow in the short term.

Ryan Bevilacqua (01:02:13):

Love it.

Cory Jacobson (01:02:14):

Yeah. And you go off that though Robert, I was just thinking, you kind of reminded me like, keeping yourself in that lane, you know what you’re really good at. So like we are talking about buying a short term rental and that’s something that we’re probably going to add to this lane here. But the reason that we love long term buy and hold, and that we know we’re really good at it is because if you get into the short term rental space, similar kind of the RV space, that if you can’t rent it out short term, for whatever reason, there aren’t four, five, six, seven fall back options that you have like you do in long term investing where you can sell the property, you can refinance, you can do some of these things.

Cory Jacobson (01:02:45):

But just knowing your lane, that’s why I like that answer because you’re getting really good at the RV rental stuff, and we have a show or our episode dedicated towards that. Yeah I thought that was a good answer.

Robert Leonard (01:02:55):

Guys I appreciate you joining me on the show. For anybody that’s listening, wants to connect with you, where is the best place to find you?

Ryan Bevilacqua (01:03:02):

Sure you can find us all over social. Our main hub is Instagram so our handle is @weeklyjuicepod, just for the Weekly Juice Podcast. And then also you can find us, our podcast name, as I just said, is the Weekly Juice Podcast. You can find us anywhere podcasts are found Apple, Spotify, et cetera, our episodes release every Wednesday.

Robert Leonard (01:03:21):

Awesome. I’ll be sure to put a link to those resources in the show notes for anybody that’s interested in checking them out. Guys thanks so much for joining me.

Ryan Bevilacqua (01:03:28):

Thanks Robert, it was a pleasure.

Cory Jacobson (01:03:29):

Love it man, thanks so much.

Robert Leonard (01:03:31):

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

Outro (01:03:37):

Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday we teach you about Bitcoin and every Saturday we study billionaires and the financial markets. To access our show notes, transcripts or courses go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision consult a professional. This show is copyrighted by the investors podcast network. Written permission must be granted before syndication or rebroadcasting.