Side Hustle City

Skipping College and Building Wealth: A Deep Dive into Real Estate Investing with Justin Pickell

July 10, 2023 Adam Koehler & Kyle Stevie Season 4 Episode 30
Skipping College and Building Wealth: A Deep Dive into Real Estate Investing with Justin Pickell
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Side Hustle City
Skipping College and Building Wealth: A Deep Dive into Real Estate Investing with Justin Pickell
Jul 10, 2023 Season 4 Episode 30
Adam Koehler & Kyle Stevie

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Curious about how you can skip college and still create a successful career path? Meet Justin Pickell, a young entrepreneur who bypassed the ivory towers to carve out his own journey in the world of real estate investing. Ever wondered how day trading in the stock market compares to real estate investing? Listen in as Justin reveals how he navigated from the fast-paced world of day trading to building a sizeable portfolio in real estate. Get set for a conversation that will make you reconsider your assumptions about investing and wealth creation.

We also tackle the critical issue of aligning education and career paths. Is the traditional educational system truly preparing youngsters for their future careers? We chat with Justin about how his path diverged from the norm and why it's important for young people to understand their own career aspirations early on. Learn how making informed career choices early in life can unlock true potential and pave the way to wealth creation.

Finally, we dig into the nuts and bolts of real estate investing. From subject-to deals and seller financing to the crucial role of networking, Justin shares real-world strategies that have helped him succeed. Discover how he leverages other people's money and credibility to seal deals and the vital role of networking in finding the right partners. If you're seeking inspiration and actionable advice on transforming your side hustle into your main income source, don't miss this enlightening discussion.

As you're inspired to embark on your own side hustle journey after listening to this episode, you might wonder where to start or how to make your vision a reality. That's where our trusted partner, Reversed Out Creative comes in. Specializing in strategic branding and digital marketing, Reversed Out Creative is an advertising agency dedicated to helping you turn your side hustle into your main hustle. With a team of experienced professionals and a track record of helping clients achieve their dreams, they are ready to assist you in reaching your goals.

To find out more about how they can elevate your side hustle, visit www.reversedout.com today and start your journey towards success. Our blog is also full of great information that we work hard on to provide you with a leg up on the competition. We also recently launched our YouTube Channel, Marketing Pro Trends,  which summarizes all of our blog posts.

FranchiseU!
FranchiseU! is for those in, or considering, careers within the world of franchising.

Listen on: Apple Podcasts   Spotify

Support the Show.

Subscribe to Side Hustle City and join our Community on Facebook

Show Notes Transcript Chapter Markers

Send us a Text Message.

Curious about how you can skip college and still create a successful career path? Meet Justin Pickell, a young entrepreneur who bypassed the ivory towers to carve out his own journey in the world of real estate investing. Ever wondered how day trading in the stock market compares to real estate investing? Listen in as Justin reveals how he navigated from the fast-paced world of day trading to building a sizeable portfolio in real estate. Get set for a conversation that will make you reconsider your assumptions about investing and wealth creation.

We also tackle the critical issue of aligning education and career paths. Is the traditional educational system truly preparing youngsters for their future careers? We chat with Justin about how his path diverged from the norm and why it's important for young people to understand their own career aspirations early on. Learn how making informed career choices early in life can unlock true potential and pave the way to wealth creation.

Finally, we dig into the nuts and bolts of real estate investing. From subject-to deals and seller financing to the crucial role of networking, Justin shares real-world strategies that have helped him succeed. Discover how he leverages other people's money and credibility to seal deals and the vital role of networking in finding the right partners. If you're seeking inspiration and actionable advice on transforming your side hustle into your main income source, don't miss this enlightening discussion.

As you're inspired to embark on your own side hustle journey after listening to this episode, you might wonder where to start or how to make your vision a reality. That's where our trusted partner, Reversed Out Creative comes in. Specializing in strategic branding and digital marketing, Reversed Out Creative is an advertising agency dedicated to helping you turn your side hustle into your main hustle. With a team of experienced professionals and a track record of helping clients achieve their dreams, they are ready to assist you in reaching your goals.

To find out more about how they can elevate your side hustle, visit www.reversedout.com today and start your journey towards success. Our blog is also full of great information that we work hard on to provide you with a leg up on the competition. We also recently launched our YouTube Channel, Marketing Pro Trends,  which summarizes all of our blog posts.

FranchiseU!
FranchiseU! is for those in, or considering, careers within the world of franchising.

Listen on: Apple Podcasts   Spotify

Support the Show.

Subscribe to Side Hustle City and join our Community on Facebook

Speaker 2:

Welcome to Side Hustle City And thanks for joining us. Our goal is to help you connect to real people who found success turning their side hustle into a main hustle, and we hope you can too. I'm Adam Kaler. I'm joined by Kyle Stevy, my co-host. Let's get started, all right. Welcome back everybody to the Side Hustle City podcast. And guys, i got a special guest today. We actually met at a conference down in Miami. He randomly came up and started talking to me. Justin Pickle, how are you? doing man.

Speaker 3:

I'm doing great. How are you, Adam? It's a pleasure to be on the show and looking forward to seeing what we can do to help the world.

Speaker 2:

Thanks for reaching out. Wanted to be on the podcast in the first place And we were standing in line for a book signing down in Miami, in Winwood. I was talking to a broker lady who's from Miami, and a buddy of mine was with me too, and you just kind of randomly came up and you're a young guy, right. What were you? 18, 19?, 19., 19. Yeah, yeah. So I mean you just had some initiative. You're just like hey, i'm standing in line. I might as well start talking to people, right.

Speaker 3:

Yep, exactly Your network is your net worth. You just got to figure out how you can collaborate to see what value you can bring to every individual.

Speaker 2:

That's right, That's right. So what got you into? I know your dad had mentioned he was in real estate and when we were talking and you guys are up in Michigan, What got you I mean outside of, maybe, your father what got you kind of involved in this real estate game?

Speaker 3:

Yeah, just overall, wanting to pursue on the entrepreneurial side of things and really not wanting to go to college and be taught by different mentors of stuff they're not doing actually. So I want to really learn about everything about business and real estate made the most sense to begin to build wealth. I did do stock market day trading for a few years before real estate and a little bit of that on and off, but this is mainly the main pursuit that I'm working on. Nice, i'm working on building the wholesale operation and build my buy and hold portfolio.

Speaker 2:

I love it, man. So, yeah, i mean real estate is really the way to go. I mean, at the end of the day, you got to have some kind of hard asset And I think for most people, if you're just starting out, real estate is probably one of the best ways to leverage kind of a small investment and be able to, like, have access to a much larger asset that's worth something that you can make money at. So you know, for a $3,000 investment you can control, say you know a $200,000 asset that's going to bring you in, say, $2,400 a month in revenue. Say you get a four family or something like that, i mean you're going to be able to pay that small investment back in a matter of no time And people don't understand this.

Speaker 2:

And now you've got something that you know you don't have to pay for, necessarily outside of your down payment. That's going to be bringing you in residual income, as long as you have good tenants and they don't tear up your place and constantly move out, which I've had those problems and I'm sure at some point you will too. But you just got to pursue man, you just got to fight through that stuff, you know.

Speaker 3:

A hundred percent. That's what it's about Really just got to know what kind of investment makes most sense for your personality as an investor, to know that your goals are aligned and actually knowing how much time and energy and money it'll take to achieve the goal you're trying to hit.

Speaker 2:

I love it, man. Well, you got your head in the right place, i know that, and I mean you've already tried day trading and everything. How'd that go? What just made you decide it? Maybe this is too much work, or you know what got you kind of out of that, or do you still play around with it a little bit?

Speaker 3:

Not really much, but pretty much I did enjoy it a lot and it helped like understand, like really going back into it, Like if I probably didn't do that it wouldn't have built my mindset enough for the entrepreneurial journey, because it really taught me a lot about handling my emotions, staying disciplined, being greedy, being fearful of the marketplace and different things that can come along and damage what you're trying to head towards Mainly focusing on charts before. So it's a little different with implementing that kind of stuff into real estate. But the reason I shifted away from it is I made good money but the market was just not really super volatile, Like kind of just hit some bigger plays off of it. That helped me make money for the couple years I was doing it, but it was more of like a roller coaster journey, So it's not as stable as if you're going into real estate. You know you're getting a guaranteed check because you did your due diligence.

Speaker 2:

Yes, And you can't really control those factors. I mean, really it's a gamble A lot of times when you're day trading and you're, I mean you're destined and you got a 50% chance. Is it going to go up or is it going to go down today, especially if you're doing like options trading or something.

Speaker 3:

That was, that's what I was doing, yeah.

Speaker 2:

And it can be really, really expensive to play around with options unless you really know what you're doing. And you know, the good thing, i think, for you is that at some point you're going to need to figure out where am I going to put all these gains for my real estate. How am I going to invest these gains? You already understand the stock market. You already understand how to play the stock market. You understand, you probably have a bunch of symbols dancing around your head. You, i could tell you, hey, what's Cisco's symbol? You know it's CSEO, like. What's Microsoft, msft, like. you just know that right. So, yeah, and you know the way, these some of the better stocks, i mean if you traded for a few years. Unfortunately, you traded during a time when our country's kind of heading into a recession right after COVID, so that that probably sucked for you. We're not necessarily in a bull market After we were in such a great bull market, for I don't know the last 10 years, 20 years.

Speaker 3:

I started with the bull market.

Speaker 2:

It was kind of hit, i'd say, okay, well, that was good, well, at least you got some of that. But you know, playing the downs, playing things as the market's going down's a lot harder. You know everybody's smart when the market's going up, you know, and when it's going down it's a little, a little bit more trouble. But to your point, real estate you can. You know you're going to get this money. Well, at least you hope you get the money, as long as people pay the rent on time. But you know you can predict what's going on in real estate a lot easier than you can with with the stock market.

Speaker 2:

And you know, being such a young guy I mean 19 years old, already out there, i mean, you know my co-founder in one of my businesses. I think he bought his first house when he was 18. He started becoming a real estate agent, you know, and and he's always wanted to be an entrepreneur and he's been very successful at it And he helped out a lot of people, including myself, bringing me into his idea and just being so you know, dedicated to what he's involved in and not giving up even though people said, hey, we should. You know this isn't going to work. Da, da, da. You know he just keeps going with it. Right, you just got to be. You gotta have that grit, you gotta be able to keep moving forward with stuff.

Speaker 2:

And I always ask you know you, being a young guy not too long out of high school, what was your experience in school? So you know every old person. You know, like me, we always look at the generation before, like, ah, generation is lazy. And then the generation after that, oh my God, that generation is even worse than the previous generation. What are they teaching these kids in the schools? They're not teaching them to be self-sufficient. They're not teaching them critical thinking skills. You know, to me I would hate to send a kid to like a public school now.

Speaker 3:

With my school experience on like the actual education of what they're teaching. I'd say like, maybe math class helped me understand some analytical perspectives and stuff. I would say, like social studies, i didn't really learn much. If they're going to teach something about history, they need to focus on something that people can utilize within their life really And it needs to be broader towards different people who want to go different directions in their life And it needs to be like more choice selected to as you're going up in the education system. you really need to be able to pick your path, not just you go into finish high school, then you can start picking your path. You got to be able to yeah, you got to start picking your path in like elementary school, not a job or anything, but you need to figure out what kind of actual skills and different things you want to learn.

Speaker 2:

Well, i've been, i've been looking at it and I've thought about this too. It's almost like if you could give people personality tests, right, because a lot of these you know there's 16 different personalities, myers-briggs personalities, and I believe in it. Some people say it's like I don't know, weird or like astrology almost, but you know there's science behind it And I think there are personality types that are just geared to be entrepreneurs. We're not workers Like you.

Speaker 2:

Go out in the workforce, you get a job, maybe you go to college, you know you're always like, ah, this really isn't for me. I'm going to college but I really don't want to work for somebody else, but you do it anyway because that's what you're supposed to do, you know. Then you get out, you work in the workforce for a couple years and you're just not performing because you're not a follower. You're just not one of these people. You got ideas, you want to share them, but you're not that high up the totem pole yet to where they care about what you got to say. You know, and it just kind of puts you off when it comes to working for other people.

Speaker 2:

And then the idea of just sitting there working away for the next 40 years just to scratch and claw your way to the top and fight off all the haters and the company that you know. They're trying to do the same thing And it just seems like I don't know, like you're putting in all that effort for what? Like to work for somebody else and make them rich, and then maybe you save up a few nickels every once in a while and you could throw it in the stock market And I don't know. You retire at 65. They give you a little plaque and a gold watch and off you go to enjoy your life with bad knees and you can't see very good out of one of your eyes. So like I mean, that just doesn't seem like something that appealed to me And some people. It's for some people which is not for me, and I'm guessing it's not something for you either.

Speaker 3:

No, sir, definitely you got to really figure out what your personality type is and understand how it can be aligned with the goals you're trying to achieve, and like how you can utilize that to help other people is what I'm thinking, because most people are not even familiar with their skills and what they're doing on a day-to-day basis. They just took on what the school system or their family and friends told them into their belief system And now they're running a program and live in their life that way.

Speaker 2:

Yeah, yeah, i mean it's, and you got to be able to unlock these things And it's not something I think you can even learn in school. I mean they could. They're teaching you the basics, right. They're teaching you just, it's essentially daycare And you learn some things that you're probably not like. 50% of what you learned you're probably never going to use again. I maybe I'm wrong. I haven't been in, you know, high school or any of that, since 1995.

Speaker 2:

I'd say more than 50%. Well, yeah, okay, so. So you're using some of the stuff. It really depends on the type of school you go to. I mean, i went to an inner city public school and you know I was lucky that I went to one that was a magnet school that was focused on the arts, because now I own an ad agency and that you know design skills and things like that led me into start up a company with some other guys because they needed my skill set, and then that led one thing, led to the other and now I'm doing all right.

Speaker 2:

But not everybody has a path in school doesn't really necessarily help you select a path. You know, when you're a kid you're like, hey, somebody says, hey, what do you want to be when you grow up, justin? Oh, i want to be a fireman, i want to be a policeman, i want to be a doctor, i want to be a lawyer, because those are the only things you're exposed to. Yeah, those are the only things that you really know that are out there, and school doesn't necessarily do a very good job of teaching you about all the other wild stuff. What's a wholesaler, a real wholesaler? you're not going to learn that in school right.

Speaker 2:

I mean the stuff you're doing now. You know how does a real, how does real estate investment work, like the things that actually help people really build wealth. They don't really teach you about you know, because they're teachers that you know they could teach you to be a teacher, maybe a mathematician, maybe a historian, but you know things that are kind of outside the box, like what you're doing now. You didn't learn any of that in school. I mean, you had to watch your dad, i'm guessing, right, yeah.

Speaker 3:

I watched my dad definitely and learned tons from his experiences. that were successes and mistakes and definitely better to learn from other mistakes than do it on your own And that helped a lot. And that's more of a school being within the experience And just even though, like some investors are just like, how am I supposed to get experience in real estate? Just find someone who's local in your network of real estate investors. Oh, you're doing flips. Could I like maybe come to the house a couple of times when you're talking to the contractors, like reviewing stuff or something that actually you're trying to learn and figure out about their business. it could be any part of it. How do they find that deal Or how do they find that good contractor and build a relationship? See, that's a big challenge. That's a big challenge.

Speaker 2:

Finding contractors, especially right now. well, when the job market was going really, really well and you had a lot of home builders out there scooping up all the good contractors, it was hard for, like, small investors to find people like that. You know, that's the one thing. That's the one limitation to real estate investing is can you get the projects done? Like a lot of times there's no shortage of buildings and properties, especially up in Michigan. I mean you go to Detroit, I mean there's probably tons and tons of properties that could use some TLC, 100%. But can you?

Speaker 3:

get the people. I'm trying to sell it to Cincinnati too.

Speaker 2:

Oh yeah, we got those problems, don't worry. Yeah, we got most major cities, older major cities, especially in the Midwest, the Rust Belt, you know where a lot of us have those kinds of issues. But talk a little bit about, you know, when I went to the conference and I you know you were there too how do you separate yourself with your thesis on real estate investing, from other people that are out here syndicating deals and doing this kind of stuff? When I went it just seemed like everybody was kind of doing the same thing. What separates you and your thesis from what a lot of these other people are out here doing?

Speaker 3:

Yeah, so what separates me currently is I'm not actually running a fund yet. I'm working on building my fund. But what separates me is you really have to create a vision and goals and a mission that aligns with a specific group of investors. Everyone may be similar, but like there can be like a couple of few differences within their fund or syndication that okay, well, they may have that kind of return, but maybe their values don't align.

Speaker 3:

So like maybe you can go to BlackRock or maybe you can go to the next biggest hedge fund, but like which values or which kind of assets or what kind of time in their life are they into? like wanting to invest into some private equity funds, or is it a real estate fund or a debt fund where people are going to lend out your money? you got to really understand investment criteria. So what I'm going to be working on is creating a fund of funds. So raising money to be able to diversify into those three main other kinds of funds where they can have diversified kinds of asset classes with backed names is what I'm going to be doing.

Speaker 2:

Love it Well and you're also focused in a particular area. You're trying to buy houses right now in Southeast Michigan is what it sounds like, and yeah, that's a pretty big population, so you have a lot of houses you could purchase potentially.

Speaker 3:

Yeah, definitely I'm interested in definitely Southeast Michigan, but it really doesn't have to be Southeast Michigan because it really comes down to metropolitan areas and being a good deal. But a good deal for me is it can be a bad deal to someone else and a good deal to someone else could be a bad deal to me. So you got to come down to a criteria, so like for my personal buys and not like raising money and doing funds and all that stuff. I'm mainly looking to purchase subject to deals, seller financing, and build a buy and hold portfolio for either long term rentals or I can wrap it and pretty much become the lender on it and create terms with the original seller and then create a second note where I find someone who wants to live in the property and increase a down payment in a monthly payment.

Speaker 2:

So you're kind of doing the pace morbidly kind of model there where you're looking for the subject to properties where somebody's like, hey, look, I'm trying to sell my house, Maybe it's sitting on the market a little longer than they like, and you come in and you say, look, I'll take over the payment. You just hand the deed over to me, write the deed over to me, So now you own the property, right? The bank may or may not call the you know have a problem with that, And a lot of cases they don't. According to PACE I think the vast majority of those. The bank never bothers anybody as long as they keep making the payments And essentially.

Speaker 2:

And then you work the seller into the deal a little bit, right? Maybe you give them a little something to, you know, for allowing you to essentially take over their mortgage payments, because you're a lot of times, what's going to happen, guys, is these people got these loans when rates were really really good 3.5, you know, to 5% maybe in a lot of cases, yeah, why would you buy them? 2.1. That's crazy. That's crazy. 2.1%. I don't even know why you give that loan up. That just seems crazy, but yeah, but what's happening is is you're taking over their payments. You're not refinancing the mortgage, right? You're just taking over the payments. And the good thing about this, too, is is they've probably paid down a big chunk of the Prince Barry, right?

Speaker 3:

Yep, definitely It's a case-by-case scenario, but most of the time it's definitely a couple years at least, but it depends on the scenario before closure, or like what I come across. A lot is like veterans who want to, or have to, relocate or going back home have no equity, since they put $0 down and just need to get out of their house and want to do it immediately. Oh, wow.

Speaker 2:

So it's really, you know, it's a thing where people are kind of in a hurry to sell because I, you know, personally I would just wait it out. You know, i'd be like ah, i'm no big hurry, i'll just wait it out. You know, if I'm trying to sell my house, i wouldn't, you know, want anybody taking over my, my, my payments, right. So it's like man, what if they miss? what if they miss the payment on this thing? and then I'm screwed and I've got another house I'm paying on, and what are the documents you have to sign in order to kind of put their mind at ease with that whole thing?

Speaker 3:

Yeah. So we set up a servicing company, a third-party servicing company that would be connected to our LLC, making the payments to the mortgage company And by their choice they can decide how to get notified every month when we make the payment or if we didn't make the payment And in the worst case scenario, we fell off the face of the earth and stopped paying them. We signed something called a deed and lieu foreclosure and a performance deed, which means if we were ever 60 days late on that either mortgage balance or if it was a regular seller finance on their note they would get the deed ownership of the property back through a quick claim deed and they keep the down payment.

Speaker 2:

We gave them any rehab, we did any appreciation with the property, And that's really their best case scenario, in my opinion, And a lot of cases too, there's a tenant in there, so really they may not even have to worry about making their payment because chances are you've got a tenant in their paying.

Speaker 2:

But I mean, i guess if you're not paying it, then maybe maybe the tenant's gone Something wrong, maybe something happened. And what would scare me is is like oh man, this company put a tenant in there, they stopped paying, the tenant destroys the property And now I got to go in there and fix up things. You know, that would freak me out a little bit, and I guess they've got to be able to trust you and you've got to have a long enough track record or at least have a really good plan in place to show them that, hey, i'm going to put your mind at ease here. This is, you know, this is what we've got going on. We know what we're doing. You act professional. You've got all your paperwork lined up. You don't seem like you're fumbling through things. I mean, that could probably help as well, and I'm guessing that's something you've been doing for a while.

Speaker 3:

Yep, you got to build credibility within the relationship. Even though I may not have the largest credibility at this young age. The key thing is leveraging others credibility. So like I actually just purchased my first sub two deal the other day, but I had to build up some credibility with the seller, so I brought on a partner who's already done 30 in the past few months And that helped build the trust that they knew I could actually get the deal done.

Speaker 2:

I love it. So what else are you doing outside of the sub two stuff? Are you doing any kind of buy and hold and flip type stuff?

Speaker 3:

For flips. I don't really want to do it anymore But it really depends on the deal. Like I did one flip in the past that I finished up in March and bought that in October for like 160,000 and got the private money lender to fund it 100% and just had to pay closing costs And they funded the rehab And we were into it about 80K with like the realtor fees and everything else When we sold it and then we walked away with about 20K each. But different roadblocks along the way that you have to learn from with the contractors, with doing wrong work and Oh God, yeah, Yeah.

Speaker 2:

Do you ever have to deal with architects too?

Speaker 3:

Uh, not on that specific building, but uh, yeah, i talked to a few different architects that um kind of were mentoring me a little bit, based on building some apartment buildings in the past And uh, my dad's actually a project manager with a construction company, so now it's getting a little bit better when we use their company. But like, like we have a different kinds of crews. So like we got like sort of the unlicensed crew with, like the Mexicans, and then we got the actual licensed people who can pull the permits or whatever we need to do, or he sells, like roofs or whatever.

Speaker 2:

So you got to mix up both. Yeah, you got to mix up both, because you do need somebody to kind of GC the whole thing and make sure things are getting done correctly. And it's good that you have a dad in the business. So how, how difficult do you think it would be for someone who is starting out in this business, who may not have a father, who was involved in real estate, you know, doesn't understand how construction works? You know you're just out here doing whatever. Maybe your dad was a, i don't know. Your dad was a doctor and your mom was an attorney, you know. Well, i guess then you'd have cash to be able to do stuff, probably, but you know they, they were just completely unrelated in this, in the field. Like, do you think it would be much, much more difficult for you to be able to do this? And if you were doing it and you didn't have somebody in the business, how would you network and find the right people to help you with these, with these buildouts?

Speaker 3:

Yeah, well, i would go to local meetups, definitely, and find everyone that actually hosts like a monthly meetup, and there's usually a few different ones in each city. There's probably like four over here in Michigan that I go to, and that's the first step And then kind of just asking questions constantly. Really joining these Facebook groups is where you can find them or you can just Google it. These people are everywhere.

Speaker 2:

And what are some of the searches you would use to find them?

Speaker 3:

I would use, like real estate investors Michigan, metro, detroit or whatever city you're really in Like you can do that on Google, facebook, or you can search up wholesalers, you can search up contractors, depending on who you're looking for, and you can get advice from different kinds of people doing different things in the industry.

Speaker 2:

Do you have a group of wholesalers that you work with that send you deals?

Speaker 3:

Yeah, Well, pretty much it's not like a specific one group, but like I do get a lot of my people from the Pace Morby group and kind of just feed off of his network, I'd say Because there's 100,000 people in his Facebook group. There's deals like people post there all day long. You can scroll through there. You'll find sub two deals seller finance deals. You can just make a post, Like when I first started wanting to network, I made a post saying I can help you negotiate deals and find buyers and analyze deals And then got 300 people wanting to chat with me. Wow And yeah. So you just got to make the post at the right time and actually provide value to people or ask for value. You can't be scared to take action.

Speaker 2:

Well, and explain the good thing about the sub two mortgage, because people might be listening to this and still a little foggy is, like you and I both know, because you know we're at the conference and you're obviously in the Pace Morby group, but yeah, you know, explain to people why you would even want, as an investor, do a sub two mortgage.

Speaker 3:

Yeah. So, like some of the main reasons is like you don't have to use any of your credit or credentials or anything. You don't have to show up that you make any money in general. And let's say I'll give you a quick example I got a $100,000 house. They want $10,000 down and it's 500 a month. I don't want to put that $10,000 down plus closing costs myself. I'm going to go find someone who wants like 10% cash on cash return or like a 12% interest rate and give them interest. Only Now I'm getting into a deal for free And I know that there is a certain amount of cash flow and I can scale up and buy more properties because I don't have to use any of my own money.

Speaker 2:

So you're finding investors who want, you know, a decent return on their money, and then they're the ones who put up the money because you don't have $10,000 sitting around. Your 19 years old, you know well, maybe you do now because you've been doing this for a while, but, but you know, you don't have just 20, 10, $20,000 sitting around, like I mean, most houses. And that was a $100,000 deal. Imagine if you were doing a three or $400,000 deal. I'm sure, yeah, over the past few years, people's equity has gone up and they're going to, they're going to want more, right? They're going to say, look, i've got $100,000 in equity in this house. You know, if I go to sell it, that's how much I'm going to make. So what are you going to do for me? Right? So you got to be able to find investors or at least have enough cash sitting around that you could actually make that deal.

Speaker 3:

Yeah, investors, family or friends just network and ask Like that's what? like with my first deal that I just did, i had to leverage someone else it's credibility to begin the track record of the buying sub two and using other people's money. But then now I can say that I use other people's money on this deal. Now I can when I'm finding a deal and I know these other lenders and they want to see credibility or ask for a referral does this guy pay on time or anything?

Speaker 2:

They can go to them and see that he's viable to do more deals with us Nice, and then I'm guessing that also say you had a deal and it started to not look so good. Maybe the tenants stop paying rent. You don't have enough money to kind of cover it. You could probably go into your network of investors and say hey man, i did this sub two deal. I don't think I'm going to be able to pay the rent three months from now. Do you guys want to take this thing over? You know you could probably do that too. That way they don't lose faith in you. You've got a partner that can kind of be your backstop, so that you're not going in alone. And you say to them like hey, look, i'm going to want to leverage your credibility, but if the deal doesn't work out, you could take over these deals.

Speaker 3:

Yeah, exactly, or like yeah, well, the lender could take it over, or you can just get it sold and get them paid back. If that depends on who the lender is and what their needs are. These maybe like for different kinds of deals. Like for this rap deal, the lender is taking 50% equity. So well, technically it was a $30,000 down payment with, like the rehab and closing costs in the cash, the seller and wholesaler. So then we pretty much get someone to actually live in the property, we make them do the repairs, we just do a clean out And then we get an extra down payment. So we're going to list it for 40k And then we can give the lender their 30k And then we come to an agreement on whatever profits on top of that is split 50 50. And the payments like 1200. And we're going to increase it to about 2000. You don't have any management in the property And you give the new buyer the deed And now it's straight cash flow and you split 50 50 on the net profit.

Speaker 2:

Nice, we seem like you know what you're talking about. You got your stuff together on this. You must have really paid attention when, when Pace was going over his stuff and you probably gone through and you know you've probably seen a bunch of videos and trainings and all that other stuff, do you? do you have your real estate license? you're playing on getting your real estate license.

Speaker 3:

I do not have my real estate license and I do not plan on getting that. I think it could be useful for certain kinds of people, but overall, based on what I'm doing, is just a completely different operation. I'd rather just refer anyone that wants to list their home to my dad and get paid a referral fee to that.

Speaker 2:

There you go. Hey, yeah, so you got a system in place. So what do you plan on doing with this? Like, i mean, what do you, what do you think your potential is for something like this? There's a lot of people that you know they're like I don't know if I want to get into this. I don't know if I want to get into that. Is it going to replace my income? What do you think your potential could be? Like, say, you know, what do you think your monthly revenue could be that you personally could manage before you'd have to go out and start hiring people? Like, what, what could you be profiting after you pay off? you know you you're going to give a little bit of money to the homeowners and things like that, so that's going to take a little bit of money away. What do you think you could get to per month?

Speaker 3:

Like monthly cash flow, like my actual goal for the year, or like yeah save for this year save for this year, cool Yeah. So my monthly cash flow goal for the year is a 5,000, and passive cash flow just from properties.

Speaker 2:

And when did you start doing this? I started last June, last June. So now you could be, you would have a $60,000 year job. that's completely passive. You don't have to go to it. All you do is go out and find houses, find deals.

Speaker 3:

Yeah, and that's not with the wholesale operation or anything like that. That's mainly just the sub two and seller financing with family properties and not fixed and flipping or anything like that.

Speaker 2:

So the potential for this. I mean you could multiple. You could earn multiple hundreds of thousands of dollars a year in passive income, and there's a lot of people out there doing it, so it's possible. And you know, you didn't, yeah, and you didn't have to go to college. You used a creative financing way to purchase real estate. You're building a network of people that are interested in real estate wholesalers, contractors, real estate people. You know, people like PACE that are into this kind of stuff So you're able to create yourself a nice little chunk of income that then can then be turned into investments and other things if you really wanted to. So you could use your own cash at some point to start purchasing these properties, or you could develop properties, or you could take that money and you could put it in the stock market.

Speaker 3:

Yeah, or I can lend it out.

Speaker 2:

Or you can. Yeah, then you could turn around and be the investor, right, so you can just continue leveling up and leveling up and changing the game.

Speaker 3:

Yeah and it's awesome. Yeah, i would have wanted to. Probably like stock market is like I'll probably do a few different things, but like what I'm thinking, what I'm going to do with the passive cash flow and everything is invest into more properties and then move into businesses, like actually buying the businesses and putting operators in and scaling those.

Speaker 2:

That's a really good idea. Yeah, on the last podcast we had a guy who sold multiple businesses, landscaping and a bunch of other stuff. Now he owns a whole bunch of restaurants, but that's exactly what he did. I mean, he doesn't even he doesn't know any grass. You know he just he'll go out and find a business that's, you know, making money, somebody's interested in selling.

Speaker 2:

Maybe it's mismanaged a little bit or it's managed okay, but they've already got customers and you know, maybe they need to go on some sort of deal where you, you know you cut their grass every month and they just pay a flat amount every single month instead of every once in a while. They call you. You know some subscription or something like that, some way that you can figure out what kind of income you've got coming in every single month. And it's a business that is more attractive to maybe a larger investor and you just go in there and you fix the operations up a little bit. You stick somebody in there and next thing you know you're selling that business. You maybe you buy it for 100 grand and you sell it for 500 grand and you know there's a lot of those out there or you buy businesses that are related to what you're doing. You know, and now you've got a landscaping company. Every time you need a landscaping company, you've got a interior designer, you've got. You know I don't know about an architecture firm, but but maybe contractors.

Speaker 3:

You know all that painters Yeah, definitely, that's, uh, definitely. what I've thought about doing first, like staying, if I do buy businesses and or when I do, is really like title companies and these contractors and creating the lending business is some of the first steps, i'd say, and then you can branch off into other industries because you have to focus on building the first powerhouse.

Speaker 2:

That's right, the money maker. Yeah, that's right. I like it, man, i like the way you think and this is, uh, this has been a great conversation. So tell people you know if anybody's out there wants to sell their house, or if you know somebody says hey, man, i want, i want my kid to talk to you. How do they find you?

Speaker 3:

Yeah, everyone can find me on Instagram, facebook or you can even reach out to my number, but at Justin Pekel, p-i-c-k-e-l-l. Pickle, whatever is preferred for you guys. And, um, you can call or text me whenever you guys have some deals or wondering about entrepreneurship and how we can collaborate in any way for all of us to grow.

Speaker 2:

I love it, man. This is awesome. Well, i appreciate you being on the podcast. I'm glad you came up to me and chatted with me, man, and uh, yeah, if I'm ever in Detroit, i'm gonna have to hunt you guys down and maybe we get a lunch or something. Your dad was awesome, man. he was really cool, yeah definitely.

Speaker 3:

Well, let's make it happen. Uh, we'll go to the nicest hotel in Detroit that you said Yeah, yeah, that's right man, they took care of me at that hotel.

Speaker 2:

I couldn't believe it. I was like man, what a nicest hotel I've stayed at and any of my trips was in Detroit of all places. It was crazy. It's like a Marriott or something, i think, or maybe a Hilton downtown. But uh, yeah, it was. It was awesome. I couldn't believe it. And then if you guys are ever in Cincinnati, man hit me up and uh, yeah, we'll all get together, we'll take you and your dad out or something.

Speaker 3:

Awesome. Looking forward to it, adam All right. Justin, it's been a pleasure. thank you for having me and uh looking forward to seeing what we can do. Yes, sir.

Speaker 2:

Yes, sir, all right, see ya. Thanks for joining us on this week's episode of Side Hustle City. Well, you've heard from our guests. now let's hear from you. Join our community on Facebook, side Hustle City. It's a group where people share ideas, share their inspirational stories and motivate each other to be successful and turn their side hustle into their main hustle. We'll see you there and we'll see you next week on the show. Thank you.

Turning Side Hustle Into Main Hustle
Education, Personality, and Career Alignment
(Cont.) Education, Personality, and Career Alignment
Subject-to Deals in Real Estate Investing
Real Estate Investing and Networking
Real Estate Investing and Passive Income