Insider Secrets Podcast with Mike

Insider Secrets Podcast
Episode #32
Featuring Guest: Brad Roth

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Shownotes:

Standout Quotes:

  • “I never put my commission before my clients’ needs ever, and I always feel like that’s the most important thing” – [Brad Roth]
  • “A lot of people call themselves investors Michael, they’re not.” – [Brad Roth]
  • ” When it comes to money and contractors, never let your contractor get ahead of you financially” – [Mike]
  • “We always tell our investors, ‘prepare for the unexpected’.” – [Brad Roth]
  • “Why do we only count our blessings or be grateful for things on thanksgiving?… I think every day we should be grateful” – [Mike]

Key Takeaways:

  • The average real estate agent sells between 12 and 15 houses a year, Brad sells over 50 houses a year
  • Brad describes himself in one word using the term “Character”
  • One bad move can cripple you financially
  • Brad explains that he believes there may not be good Real Estate deals in the next 6 months due to the pandemic, but rather in a year and a half.
  • Investors need to do due diligence to create plans A, B, and C for getting capital.
  • When trying to get a deal, investors need to ask “what are my core intentions?”, that’s the key question
  • Brad’s first step before buying an investment property is to go through and look at Cycles, which is best done by a real estate agent.
  • When selecting a contractor to rehabilitate a property, sign a contract with a licensed contractor who will work in phases and they only get paid after the completion of each phase, rather than huge upfront payments at the risk of non-completion of the work.

Guest: Brad Roth

Brad Roth

Brad grew up in the San Fernando Valley where he graduated from Granada Hills High School. He went on to study Psychology and Communications, and then studied Improve and Scene Study while working as an actor for a number of years appearing on shows such as Beverly Hills, 90210 and Saved By the Bell. But these last 20+ years he has taken all that knowledge he gained and put it towards a very successful career in Real Estate.

With his focus in Southern California residential real estate, he has sold over 400 homes ranging from single family and condominiums to luxury estates. When you walk into Brad’s office you will see it showered with awards and certificates that he has been honored with over these past 20+ years. Brad loves giving the knowledge back to those new agents that show promise. He has spent the last 15 years mentoring and Coaching agents. Brad prides himself on being more of a life coach who can help an agent navigate through a busy life and wanting to become a top producing agent. Brad has many techniques and will cater to each individual agent as each agent has their own story with they own individual strengths and weakness.

Brad has seen many cycles in the Real Estate market which has given him the foresight of being able to navigate the ups and downs which in turn he can help agents through their most difficult and exciting times.

Growing up Brad was given a shining example of what it means to have a successful client focused business. His Father, Len Roth, was  a financial advisor for over 40 years. He taught Brad how important it is to listen to his clients needs and to Tailor a specific plan for each agent.

Timeline:

Episode Timeline:

[02:56] About today’s guest, Brad Roth, discussing “Insider Secrets for Investors”.

[05:32] Brad narrates events leading up to his entry into the Real Estate business.

[08:10] With all your knowledge and expertise, what’s your real passion about Real Estate business today?

[12:10] Can a Real Estate Investor ever time the market?

[16:31] Making high stake decisions in Real Estate

[20:50] What are some of the lessons that you’ve learned over the years?

[23:29] A Real Estate investing secret from Brad

[26:01] What Investors should look for in the marketplace today

[28:23] Brad describes his planning process before buying an investment property

[31:34] When buying an investment property that needs to be rehabilitated, how do you go about picking a broker or contractor?

[36:43] Most memorable moment in the last 6 months

[39:03] How to contact Brad

 

Guest Links:

Website: atrepodcast.com

Email: atrepodcast@gmail.com

Transcript:

Mike: [00:00:00] Hey everybody. It’s Mike with insider secrets brought to you by My Core Intentions. And today’s guest is Brad broth with A T R E, the host of that podcast brad say hi to our guests and tell them what they’re going to be able to, hear from you today.

[00:00:18] Brad: Thank you, Michael. so guys, today we are going to hear some insider secrets for investors.

[00:00:24] If you want to know, we’re going to talk a little bit of shop. We’re going to talk about different ways to be successful when you’re investing. It’s going to be a lot of fun. I can’t wait and you’ll have to tune in Tuesday 12. O’clock talk to you soon.

[00:00:38] Kristen: Welcome to this week’s edition of insider secrets. The show that turns multifamily investing into reality. Each show we interview guests who are seasoned professionals, actively closing and managing real estate deals. Your host Mike Moraski has more than 30 years of multifamily, real estate investing and property management experience.

[00:01:01] Mike is the founder of my core intentions. And he’s been involved in over $285 million of transactions focuses on helping you create short term cashflow and long-term wealth. Here’s your host, Mike.

[00:01:17]Mike: Hey, good afternoon, everybody. It’s Mike, your host of insider secrets. Again, brought to you by my core intentions. Hope you’re doing well today. Hey, have you been thinking a lot lately about your intentions, about your, why? Your goals, it’s getting to be that time of year where you want to start thinking about that.

[00:01:36] So as you come into the next year, you’re really able to, strike while the iron’s hot, right? You want to build those goals. You want to build that intention around what you’re doing. So at MCI, we want to invest in our client’s future. And we do that through an educational platform, teaching you how to create short-term cashflow and long-term wealth.

[00:01:57] You know what. We try to empower you with sound real estate investing and property management principles, helping you live a well-balanced lifestyle. I think one of the biggest things that can happen is in the real estate business, we get so busy that our lifestyle gets out of balance. It gets distorted and things get out of whack.

[00:02:16] And what we want to try and do is keep you in balance. So we want to develop some strong, foundational, practical principles around that. I share a lot of these principles in my new book. I just published, which is a exit plan, your complete guide to multifamily investing and why you need an exit plan before you, you buy.

[00:02:36] So pick up a copy today at the website. If you have questions, let me know. Hey, if you’re looking for some direction, give us a call. Let’s jump on a quick call and see what we can do to maybe give you some ideas and some tips. Hey, enough of that, I’m really excited about our guests today and my F my friend and real estate agent and investor, Brad Roth.

[00:02:57] Brad, would you say hi to everybody?

[00:02:59] Brad: Hey everyone. How are you today?

[00:03:01] Mike:  Glad you’re here, Brad.

[00:03:03] Brad: Thanks for having me, Mike.

[00:03:04] Mike: Yeah, you bet. listen, let me read your bio here a little bit. Brad grew up in the San Fernando Valley. and that’s in California for those that don’t know place that a lot of people might want to live.

[00:03:16]No. He went, went on to study psychology and communications. He worked as an actor for a number of years, appearing on shows such as Beverly Hills, 921 Hill and saved by the bell. But these last 20 years he’s taken that knowledge. He gained and put it towards highly successful real estate career.

[00:03:34] With this focus in Southern California, residential real estate, he sold over 40 homes, raging from single family and condos. To luxurious States. Brad loves giving, the knowledge back to those new agents and showing that show promise Brad coaches, agents, but prides himself on being more of a life coach.

[00:03:56]who can help an agent navigate through their busy life and wanting to become more of a top producing agent? Brad’s the host of the podcast? ATI ATRT. Brad has seen many circles or many cycles in the real estate markets, which has led him to the foresight of being able to navigate the ups and downs of the markets.

[00:04:19] So that’s what he works on when he coaches his agents through their most difficult. And exciting times because we know that in the real estate business, we can have both. Brad definitely my goal. that’s pretty impressive. A TV star look at that. done a couple of things here and there.

[00:04:36] Brad: [00:04:36] Hey Mike, Michael, just to correct you a really quick, you had said 40 homes. It’s actually 400.

[00:04:42] I don’t want them to go.

[00:04:43] What I read that I thought.

[00:04:45] Mike: [00:04:45] Geez. That might be a typo. I might’ve sent you the wrong thing.

[00:04:48] I apologize.

[00:04:50]Brad: [00:04:50] it’s okay. So we I’m glad we got that corrected though.

[00:04:53] Mike: [00:04:53] Yes. Because there’s a little difference between 40 and 400.

[00:04:56]Brad: [00:04:56] just a little, yes. thank you for having me.

[00:05:00] Mike: [00:05:00] Hey, you bet. I’m glad you’re here. Hey, obviously you’re a top producing real estate agent. anybody who sells 400 houses in a career, that’s a lot. And I think that one thing that maybe our listeners don’t. Can’t take into perspective unless we make this next statement is the average real estate agent in the country sells between 12 and 15 houses a year.

[00:05:22]And when you take someone who’s selling a hundred houses, 50 houses, 60 houses a year, that’s a lot of production. And, it takes a lot of work and it’s not something that somebody can really do on their own. Brad, tell us how you got in the real estate business, how they came about for you.

[00:05:38] Brad: [00:05:38] It’s a great question. When I was about 27. No, I’m sorry. 25. I was, yeah, exactly. I wish I was selling cars and I was acting cause, I used to be a bartender actor, like we all did in LA and I was like, I’m going to make a little bit more money. I’m always been good at sales. So I got into car sales and I was doing car sales.

[00:05:57] Everything’s going well, doing my acting. Everything’s going well. And my mom got sick. My mom was 54 years old. She got Alzheimer’s. And she was in her last stage is like her. She was already really losing her memory when we really figured it out. So my brothers and sisters said, Hey, we’ll take care of mom.

[00:06:17] Don’t worry. You just work on acting. You’re going to be a star one day and you’re going to do this. And I said, no. I said, I am, responsible for mom, just like you. And I started trying to figure out what I could do to make. A really good living and help take care of my mom. And I said, I’m going to get into real estate because I knew that if you’re going to be in sales, you either want to be in insurance or you want to be in real estate because there’s high money in each one.

[00:06:46] And insurance was residuals. I just, I was, my problem was I looked like a baby at 25. I looked like I was 16. when I was undoing, say by the bell, the new class, I was in my twenties playing like a 15 year old. 16 year olds. so insurance wasn’t for me. So I got into real estate and, I used to bring my mom with me on appointments because there was no one that really take care of her.

[00:07:11] And I would say, mom, can you sit in the corner over here? And we’ll go to McDonald’s later. Cause she ended up, I used to say, I am my mother’s father. I ended up, along with my brothers and sisters, we were the parents for my mom taking care of her and doing things. So that’s really long story short, how I got into it.

[00:07:28] Mike: [00:07:28] Boy brad that must’ve been tough. I, give me a lot of credit camp couldn’t have been easy that’s for sure.

[00:07:33]Brad: [00:07:33] it, you know what it wasn’t, but it actually really gave me purpose and made me who I am today. it’s a part of molding who you are as a person and, and an adult growing up, Yeah. Those struggles sometimes really shape our character. Don’t they? They do definitely. Yeah. Hey, one thing I always ask people on the show is I want you to tell the listeners in one word, what makes you up, give me one word that describes you personally and professionally good character or character.

[00:08:05] Character. Yeah. Very good. That’s good. Know, it’s always nice to see how people describe themselves, so with all your knowledge and expertise, what’s your real passion about the real estate business today? my real passion with real estate is, I absolutely love helping people. there’s my business is probably 90.

[00:08:25] 7% referral or past clients. And my clients just keep coming back and keep coming back and I can sell anywhere in California. And I can’t tell you the amount of times that I’ve, flown across the state. To help someone buy a house because they trust me. And they know that my negotiating skills are the best and that I care about them, that I never ever put my commission before my client’s needs ever.

[00:08:53] And I always feel like that’s the most important thing, and that really. Excites me and makes me happy when I see my client’s face. And I know that I’ve made a difference in their life. And especially when they’re young, when they’re young or when they’re in that, move where they’re about to move up, because I know that I’m making a difference in their financial future, and I can give them good advice because I tell my clients, I say, listen, one bad move can cripple you financially.

[00:09:20] So if we look at cycles and we look at how things are going, and we really come up with a strategy for each individual client, that makes a big difference. And that’s how you become somebody’s real estate agent for life. So you, you said something interesting, you said one bad, one bad move, and it could cripple you for life.

[00:09:41] What, expound on that a little. Sure. in California, you make big equity. there’s, especially Los Angeles where I am. So I’ll give you an example. In 2000, in 2001, I had sold, I’ll give you a perfect example, actually. So I had sold the house in 2001, my, to myself, I had sold one, a condo I was living in for, I bought it for.

[00:10:07] $189,000. And I thought I was rich, sold it for 205,000, like six months later. I’m like, wow, I made some good money. Now I turned around and I bought another house with that money. And I got, that was in 2003. And then around 2005, the house that I bought for two 59 with that money. I put about a hundred grand into it and it was worth $630,000.

[00:10:38] Now that’s big equity in California. So I said to my wife at the time, I said, listen, we’re moving. She goes, what do you mean? We’re moving like I’m nine months pregnant or eight months. What are you crazy? I said, no, we’re moving because I knew that the market was going to go down. Now, when I talk about you, you could get in trouble financially, Being crippled. If I would’ve waited. And all of a sudden the real estate market went down, which it did. And all of a sudden, I couldn’t afford that house. What do you do? But by me selling that house, taking all of that equity, putting it into my next house, it set me up for a. Bad market. I knew I was going to be able to be in the house I wanted to be in for the next 10 years, which now have been there 15.

[00:11:22] And not only that I was going to be able to afford the payment because it was a lower payment than the smaller house. so that’s interesting. so you bought the house for two 59 and you sold it for six, six 30. Okay. So what was the, when you sold it for six 30? What was the next house price?

[00:11:41] You want? Seven 75. Oh, so you did go up, I thought you would have come more some in between. I had twins coming. I needed a bigger house, so I went from about 1391, almost 3000 square feet and actually still in the house. I’ll sell that in the next couple of years as I see the market turn. if I can time it right.

[00:12:03] Which I think I’ll be able to, I’ll sell that and then, I’ll make my next move, which will probably downsize.

[00:12:08] Mike: [00:12:08] So that’s interesting. you said if I can time it, So raises a great question. Can a real estate investor really ever time the market?

[00:12:17] Brad: [00:12:17] great question. I don’t think any of us can really time it.

[00:12:20] Perfect. Cause in LA we have earthquakes and you have all sorts of different things, You just never know you can’t play it for the unknown right fires. You’ve seen the news. So you can’t, really plan for the unknown. But what you can try to do is look at cycles. as a real estate agent, I know when the market’s going to take a turn because we start to hear first about the foreclosures coming.

[00:12:42] You start to get letters from, national association of real estate car, California association of real estate. And you’ll start to see things like foreclosures are coming. Short. Sales are coming. I personally work with a lot of banks where I do foreclosure. I get. Notices from those banks saying, Hey, we’ve got a notice of default, uptick and Ken, can you time it?

[00:13:04] Perfect. No, but can you, my advice is you should always talk to an experienced real estate agent. Who’s been through different cycles. cycles are a big thing. I’m huge here. Here’s what I know though. And I tell people this all the time. I say, look, I’ve made money in up markets. I’ve made money in down markets, right?

[00:13:23] Made money when the Republicans had been in office, the money when the Democrats are money machine. listen, it’s about just buying right at the time of what’s going on. So that’s right. And here’s an interesting question, right? No one where we’re at in this time with this pandemic and the moratorium on evictions on, and restaurants closed people, not making money and.

[00:13:50] Mike: [00:13:50] You think there’s going to be some good deals in the next few months. Great question. Great question. Do I think there’s going to be good deals in the next few months now, do I think there’s going to be good deals in the next year and a half? Yes. I think what’s going to happen is there’s a forbearance, right?

[00:14:05] Brad: [00:14:05] And, that’s been letting a lot of people, not pay their mortgages. However, there really hasn’t been a clear. Set plan on what’s going to happen when this ends, are they going to be asked to pay the whole thing in full right away? Are they going to be asked to put it on the back end and raise their mortgage payment?

[00:14:22] Which some people will be able to afford. Some people won’t, even if someone said, Hey, I’ll give you a hundred thousand dollars off your mortgage, lower your payment down to a minimum. If they don’t have a job, it’s they’re not gonna be able to pay. Yeah, so there’ll be underwater and that’s where we’re going to find out.

[00:14:36] So I do, I think, the banks that I’ve been talking to you, Michael, are talking about the third quarter of 2021. You’re going to start to see a shift.

[00:14:46] Mike: [00:14:46] That’s interesting. I’ve heard a lot of different opinions and I don’t even know that I have an opinion other than here’s a conversation I had with somebody yesterday, though, they said, with this, who said, Hey, I’ve got five properties for sale.

[00:14:59] They’re probably valued all five of them. Now they’re not in the best areas, but 220,000 for all, five of them. I don’t know, five houses for the price of your first one, right? Yeah. That’s amazing. and he said, I’ll let him go today for about 175. I said, that’s interesting. I said, tell me about your tenants.

[00:15:18] He goes, Oh, that’s a bad question. I said, what do you mean? It’s a bad question. He said, three of them haven’t paid in 10 months. Oh boy. They heard that they heard, our governor’s news that they didn’t have to pay him. They wouldn’t get kicked out. He goes, absolutely. They’re working the system. I think that the investor that owns a house with a mortgage on it today is probably in worse trouble than a homeowner.

[00:15:44] Brad: [00:15:44] Great point, Michael. And I tell people that all the time I go, yeah. What about the guy who owns five houses that was relying on the rent every month to pay those mortgages? Because he was trying to put himself and his family in a better position for later on in life. What happens to him, that poor guy or that poor girl.

[00:16:06]and that’s a really tough situation, to be in. And that’s another reason why I talk about, catastrophes with your financial future. You have to have a plan and a strategy, and going forward with my investors. One of the things I’m going to be doing is sitting down with them and saying, okay, let’s plan.

[00:16:23] What happens if COVID hits? What do we do? What happens if this, you, maybe we should have a year in reserves rather than three months.

[00:16:30] Mike: [00:16:30] one of my, one of the questions I always like to ask is how do you make high stake decisions? so those are, there are some decisions you’re faced with, as an investor, as a real estate agent, somebody as a coach.

[00:16:42] Brad: [00:16:42] Yeah. Oh, how do you, help your, client make decisions again? So you sit with them and you strategize and you find out a really what their net worth is. can they survive a storm, and then you want to come up with a strategy and you wanna, you want to evaluate risk versus reward.

[00:17:03] Can they handle the risk and what kind of reward are they looking for? me, if I’m doing an investment, I’m cool with a 5% return on my money, especially on a rental that’s coming in. It’s more than I’d make in the banks. And it’s a good, decent return. Some people say, Hey, no, I’d rather sell right away and make a 30% return.

[00:17:23] For me, that’s not enough if, for selling, I’d rather hold on to a property, rent it out, hold onto a property until it’s really where some money, especially in LA, right? Cause you can take, buy a house for two 50, run it out for a few years and then sell it for six 30 later. who wouldn’t want to do that?

[00:17:39]Mike: [00:17:39] And you could do that all day long. that’s a great,

[00:17:41] Brad: [00:17:41] you really can, if you have the money, when the market goes down and you, again, you look at cycles, you look at the last. Two three, four cycles. As you figure every 10, 12 years, the market takes a little bit of a shift and you figure that out.

[00:17:57] Mike: [00:17:57] Yeah. So let’s talk multifamily for a minute because what I really want to talk about, and you’re alluding to it here is economies of scale, right? So that investor who owns one single family house or own several single family houses, And he’s got a mortgage, let’s just call it a thousand dollar mortgage.

[00:18:19] And he’s got a tenant living in there paying $1,200 a month rent, but not paying because of the moratorium. He’s paying that thousand dollars out of his pocket. Now that’s pretty painful for a real estate investor. That’s why I always talk about multifamily because multi-family gives you the, economies of scale where if you’ve got.

[00:18:41]a four unit or a 20 unit and a percentage of your tenants, aren’t paying rent. Some, are you still able to soften the blow on your own pocket? And where do you see investors fitting in the VAT mix today around that?

[00:18:57] Brad: [00:18:57] So the investors that I deal with generally are single family. we do have several, so I do have several clients who like to do both.

[00:19:07] And when I do that, I usually pull in a partner who specializes in multi-family and we go from there. But I can tell you that one thing I love about. apartment buildings and things of that nature are people generally seem to be paying their rent. it’s interesting. You get the guy who’s renting the house from one person and they buck the system.

[00:19:28] You get the guy who’s paying a thousand bucks, Actually here, believe it or not in LA, a one bedroom goes from about 1800. A one-bedroom and, but you get the one bedrooms at 1800 or the two bedrooms at 2300 and people seem to be paying them. They just, I don’t know what it is, but there isn’t a real high turnover from the people, my investors that I’ve spoken to.

[00:19:52]they’re pretty happy. Yeah. Commercials getting killed.

[00:19:57] Mike: [00:19:57] When you say commercial, you mean like office and retail and then yeah.

[00:20:02] Brad: [00:20:02] Yeah. Big time. Big time. Yeah. their leases have been getting restructured and there’s been, lease reductions and just, it’s been crazy. And I think in LA, at least, I don’t know about Chicago, but, in LA, a lot of people are starting to build a multi-use.

[00:20:21] So they’re getting rid of half of their buildings and making, turning them into, on the bottom restaurants and cleaners and things that, Things that they can make some more revenue with. Yeah.

[00:20:31] Mike: [00:20:31] Yeah. W that around a little bit, especially in the urban areas, it’s interesting.

[00:20:35] Some of the you’re like where I live in Chicago and Chicago, people are moving out of the city, yeah. And I heard the same in New York. I heard the same thing in New York. They’re moving out of the city because they can work at home now, so they can go live in a cheaper area, in a suburb.

[00:20:49]Brad: [00:20:49] Exactly.

[00:20:50] Mike: [00:20:50] Hey, what, what are some of the lessons that you’ve learned over the years? So you’ve been in the business a while, give a couple of lessons that you’ve learned that really make a difference in your business and your career. as far as poor lessons, I can tell you one that I did, whether it was a horror, it was a big learning lesson for me.

[00:21:10]Brad: [00:21:10] But it was tough to swallow how to eat. there was one month. Okay. We can, it’s high risk, high reward in real estate, as and we’ve talked about it in, there was a month I made, gosh, I think it was 142,000. And I said to my wife, I’m like, look, there’s a guy at the office who has, Some really good food he’s been bringing in and he wants to open a restaurant and there’s a bunch of guys who are putting in and I want to go for our future and just throw some money in she’s I don’t want you to do that.

[00:21:40] I’m like, no. It’s just 30 grand. Who cares? And I gave him 30 grand. He had a bullshit perspective, prospectus, excuse my language, by the way, perspectives and to the editor. and I just, so my problem was is I looked at it and. I just didn’t again, I was younger. I was only in the business seven, eight years.

[00:22:02] I didn’t put enough thought into it and I didn’t study it well enough and I didn’t really know anything about it. And I was looking for passive income and what I should have done was invested in an apartment building. Instead, I gave $30,000 to a guy who never opened up a restaurant. And there was several of us that lost the money.

[00:22:21]he probably walked away with 120,000 never opened anything. So that was a really bad experience in investing really good learning experience. But it costs me because the market went down a couple of years later and I could have really used that money, That never, I’ve never gotten over that, financially I have, but emotionally I carry it like a, an open wound.

[00:22:44] Mike: [00:22:44] Yeah. isn’t it interesting how we go through those times in our lives, where we have those types of situations and those are what shape us a little bit, or shape how we make decisions. So the next time you’re faced with that type of a choice or that type of a situation, a little bit more about how to evaluate it.

[00:23:02] Yeah. an equate, a quaint, what you’re saying to the first multi-family deal I ever did. I was so excited about getting this deal closed, that we didn’t do any due diligence.

[00:23:14] Brad: [00:23:14] And I believed everything, the seller set, and we bought this bag of bricks and it was like,

[00:23:19] Mike: [00:23:19] Oh, now what, you’ll all of a sudden become adult liner and wanted somebody to stop the pain.

[00:23:25]but that’s how we learn. And I think that’s, That’s part of life. So definitely. so this show’s called insider secrets. give the listeners a C a secret, an investing secrets strategy, something we’d look at. Yeah.

[00:23:40] Brad: [00:23:40] So let me tell you as a real estate agent, what I told her to investor yesterday, So I have a new investor who has been calling me and wanting to buy a piece of land from me.

[00:23:52] And she’s very excited about it. And she, I don’t feel has been doing her due diligence and I listen, I represent the seller and I can run. I’ll represent her as the buyer. However, she. When I asked her qualifying questions like, Hey, okay, I’m sending you up with a hard money guy. If that doesn’t work out, what are you going to do?

[00:24:13] Oh, we have cash. okay, where’s the cash coming from? one of my partners just write the offer. It’s okay. Everything will be fine. And I said, Hey wait. So investors that are listening to Michael pore intention show, listen to this very carefully. Here’s what I told her. I said, real estate agent, I said, can I give you a secret?

[00:24:32] She said, sure. I said, real estate agents hate. When an investor calls us and says, don’t worry about where it’s coming from. Everything’s going to be okay. Everything’s gonna be okay. We see red flags. We see, escrow’s not closing. We see egg on our face. We want to do things right. And we need to set you up for success.

[00:24:53] So if you’re an investor new or old, but generally this happens with new ones. You should do your due diligence. You need to figure out a plan. You need to look, go on a computer, go on an Excel spreadsheet, go on word, anything type, figure out where you’re going to get your money from. Have a plan, a, B, and C.

[00:25:12] If you’re asking me to do work and write offers and do things for you and you aren’t prepared, I don’t want to work with you. I see it coming. So a lot of people call themselves investors. Michael, they’re not. They’re not plant

[00:25:28] Mike: [00:25:28] planning is such a part of the process. Isn’t it? It’s huge. It’s huge. And there’s so many ways you can really, get hurt again.

[00:25:38] Brad: [00:25:38] The first time investor who says I’m going to be, make, be a millionaire because I’m going to buy this property. I’m going to build on it. I’m going to make money. you have to say to yourself, okay, I’m gonna buy this property at this time of my life. What if the market goes down, what if this happens?

[00:25:52] What if that happens? What if I can’t get the permits? How is this going to affect you? Are you using all your money? Yeah. Yeah. where’s the rest of the Capitol.

[00:26:02] Mike: [00:26:02] Hey, so what, what should investors look for in the marketplace today? So if they’re out looking, shopping a deal, what should they look for today?

[00:26:11]Brad: [00:26:11] I think that they need to identify what their core intentions are. what are your intentions? Did you get paid for that? It’s like that core intentions guys, an exit strategy, exit plan. but, what are their core intentions? What do they want, what do they want to do? Do they want to flip it or do they want to hold it?

[00:26:29] Are they okay with either? W what do they want to make? So they really have to have a plan. In order to decide what you know, what they want to do. Is there a good one? we’ll look, we’ll say. and I hate hearing this too. I want a deal. I want a good deal. listen, if you would have bought a house six months ago, when you were complaining about you wanted a deal and you said it wasn’t a deal today, that house looks like a deal or that multi-family so barring a bad market in this economy.

[00:27:01] Everything’s really going up. So it’s to say, I want a deal. you shouldn’t be working as concerned about a deal, especially if you’re holding onto something, what you should be concerned about is it going to pay me a passive income of what I like? Is it going to pay off the actual asset? How long will it take?

[00:27:21] And then again, what are my intentions? What do I want to do? Do I want to do, I want to put 50% down now? wait for the market to go up a bit and then pull my money back out and have it pay for itself. What do you want to do? that’s really the key question.

[00:27:37] Mike: [00:27:37] So that goes back to, and one of the things I really work with my coaching clients on is the why.

[00:27:42] Why are you doing this? it’s one thing to have a goal set and, Brad, if I told you, Hey, I want to make more money in 2021. you know why? yeah, first of all, what is that? That’s not really a goal. It’s not measurable attainable. It’s not, you could give me 10 bucks and say, there’s more money for you, So it’s today you have to be specific in what you want, but I always try to lead people to a, Hey, what do you, why do you want that? What’s important about that to you, and a lot of times people go, I just, I want to buy a bigger house or, but that, there’s more behind that, what does that represent in somebody’s life?

[00:28:19] So it’s the same thing with building that strategy. So if you’re planning, how, tell me a process on why you’re going to buy an investment property, give me your planning process around. First thing I do is I run, I’ve. I figured out when the top of the market was last and I look and I say, okay, if the top of the market was, let’s say 2007 last time, right?

[00:28:47] Brad: [00:28:47] I want to know what it’s sold for at the top of the market last time, compared to what I’m buying at now, we do know it will, they, it, usually they exceed themselves each market, but then I also want to look at it. What was it worth at the bottom? So if there was an asset that was worth a million dollars at the top and $400,000 at the bottom, can I sustain that if I have to sell at the 400, because I’m broke or something happens, and this is how I talk to my clients, you’re broke and you have to, can you sustain it?

[00:29:21]what can you do? And they said, Oh, don’t you? It seems to me, it’s not about that. We have to come up with a solid plan, right? Let’s figure it out. So the very first thing I do, Michael, is go through and I look at cycles. I look at what things were selling for in the worst, what they sold for in the best.

[00:29:39] Then I look at, and I try to figure out how much time I think is left in the cycle. And then we talk about again, really? What are you, what do you want out of this? What are your intentions? Yeah. so that research isn’t that hard to do either. Very easy.

[00:29:57] Mike: [00:29:57] Explain. So walk some invo, walk through how you, if you were not a real estate broker, how would you walk somebody through doing that?

[00:30:06]Brad: [00:30:06] I’d call the real estate broker immediately, but, and I would network, but if not, but yeah, you can always surely. And guys, I’ll tell you, this is a really good thing to do. Start building relationships with real estate agents. If you build a relationship and someone calls me and goes, Hey, Brad, look, I’m about to get into this deal.

[00:30:27]I’m sorry. You can’t be a part of it. I was buying it. It’s in another state or, Hey, it just came, fell in my head, but I, you can’t be a part of it, but I do trust you. Could you give me some advice? I’ll be like, sure, no problem. Why. Cause I like to help people for one, for two on building relationship with someone.

[00:30:42] And I would be more than happy to run the comps and the comps. look, if you’re, if you there’s a difference between running comps in the last six months to see if you’re buying at market value. And there’s a difference between buying running comps and looking at cycles and cycles, you may have a.

[00:30:59] More difficult time running. If you’re not a real estate agent to get really accurate ones, because you can go to some online sites, but they’re not always that accurate. So that’s why I say it’s best to try to build a relationship with a realtor and don’t feel bad about calling a realtor, even if it’s a newer one who wants to earn your business, call them and say, Hey.

[00:31:18] Be honest. don’t try to pull the wool over anyone’s eyes say, Hey, look, I don’t have anything for you for this deal, but I’m looking to build relationships. Can you help me figure out a price that you can do it so quickly? really quickly I could come up with a strategy for somebody. How about, let’s talk about a rehab real quick and somebody, like talking shop a little bit.

[00:31:39] Mike: [00:31:39] So when w when you’re buying an investment property and it needs to be rehabbed, how do you go about picking, in why this came to mind is you, we talked a little bit about network, right?

[00:31:50] Brad: [00:31:50] If you don’t know, broker go and build a network of those. It’s the same thing with contractors about picking a broker or a contractor that.

[00:32:00] We’ll work with you. So brokers are a little easier. they’re not working for you as long. contractors are tough. I get some contractors that are amazing that, get in and get out and then 90% of them. And I think the contractors will tell you themselves if they’re working on a job too long, they get burnout.

[00:32:20]so if it’s a job that’s going to take, six months. Okay. Oftentimes, you might go through a couple of different contractors or a couple of different trades men. it just, the way it is, unfortunately, contractors, at least in LA don’t generally save their money as well. So they’re using one month, some money from one job to get to another job.

[00:32:38] I would give you the best advice I can give you guys is. sign a contract with a contractor, a licensed contractor, who’s going to do stuff in phases and they only get paid after the completion of each phase. if you pay them half up front or Hey, more and they haven’t finished where they said they were going to be, you can often find yourself in a pickle.

[00:33:02] Mike: [00:33:02] Yeah. you should never pay somebody more than 10% going into a contract.

[00:33:07] Brad: [00:33:07] Not for supplies. Yeah. And then a little bit more at demo and those payments should be staggered. so that here’s one of the pieces of advice.

[00:33:17] Mike: [00:33:17] When you come, when it comes to money and contractors never let your contractor get ahead of you financially, you all are ahead of the contractor financially.

[00:33:27] Brad: [00:33:27] And that would, that means that he should be out of pocket on material and labor. Being able to cover it and you catching up later, catching them up later and don’t be afraid to ask your contact contractor, those questions when you’re interviewing them. Yeah. Hey look, I’m, I want you to be out of pocket some money.

[00:33:44] I want you to understand that we’re partners here and I want to give you a lot of deals, but I need to make sure that you’re in this with me. And, before

[00:33:54] Mike: [00:33:54] that’s my background, before I got into the real estate business, I was in the general contracting business and, I never let my homeowner get ahead of me or get behind me financially.

[00:34:05] I always, they were always ahead of me financially and it just always made for a much better relationship. cause there’s always an issue on the back end. So yeah, there is. and what did we say, Michael? We always tell our investors what prepare for. The unexpected, if you were budgeting for 30 budget yourself for 60, just for the worst, but hope for the best that’s Hey, listen. Let’s let’s switch gears a little bit. Let’s go to a little lighter note. you’re in a, beautiful Southern California, right?

[00:34:44] Brad: [00:34:44] Except for the smoke sometimes. Ooh.

[00:34:46] Mike: [00:34:46] favorite tourist attraction.

[00:34:49] Brad: [00:34:49] I’m a Disneyland guy. when you have children, they love it.

[00:34:53] And I just, I enjoy going to, I enjoy I’m a Southern Cal guy who won’t go to Disneyland at seven in the morning and leave at four, eight at night. I want to go, I’ll go get a passes for the whole family. And then we’ll stay three or four days at a hotel and just. get it all out. We do it like once every couple of years.

[00:35:11]and I’m sad, like we only live 15 minutes from magic mountain, which is fun too, but it’s a little hot in the summer, so yeah. I bet. I bet. Favorite restaurant, Shibuya sushi. All nice. Yeah. She Shibuya is in Calabasas where my office is. It’s where, for those of you who are listening all over the country, it’s where the Kardashians live.

[00:35:35]that’s where my office is. And shabu  is the freshest nominal. Sushi might be a tourist attraction. That’s wonderful.

[00:35:49] Mike: [00:35:49] Best book you’ve read.

[00:35:51] Brad: [00:35:51] Oh, you’re kidding me. The greatest salesman in the world. Bandido that’s it, baby. Love it. Love it. I have one and two here. Actually. Anything Ogman dino’s fabulous.

[00:36:03] Mike: [00:36:03] Yeah. that was probably one of the first books I ever read. You know what I have sitting over here that I’m reading right now is as a man thinketh. Oh no. Oh my gosh. Look it up. this is it. Oh, it’s great. Little tiny one. Yeah. James Allen by James Allen, probably, the granddaddy of positive thinking.

[00:36:25]Brad: [00:36:25] that’s the most important, right? Positive thinking. And he says right in the book, he just tells you, look, if you think good things are going to happen. If you don’t think good thing, not good. Things are gonna happen.

[00:36:38] Mike: [00:36:38] Yeah, it’s crazy. It’s, it’s the power is the power of the mind, that’s it most memorable moment in the last six months, I always liked this because of the pandemic going on.

[00:36:50]So people have been locked up and not going out.

[00:36:53] Brad: [00:36:53] And I would say, the last six months, we’d definitely say a pandemic. I would say. Funny enough, I got a tattoo I’m fit. I’m 50 years old, never had a tattoo. I think I’m going through a midlife crisis and I got a tattoo and, And that was very memorable for me.

[00:37:12]Mike: [00:37:12] it was actually, so people go buy a Ferrari, you buy, you get a tattoo.

[00:37:16] Brad: [00:37:16] I got a tattoo and, and a big one on my, you can’t see it. Cause with, even with the shorts, this from my shoulder here down to about my sleeve. And, I got a really beautiful sunset, with. the ocean really blue ocean. I got the sand in front and then I had the word gratitude written in the sand.

[00:37:38] And then I have two birds off to the right, which were my mom and dad, because they’re both in heaven now. And, it really is beautiful and I love it. And I love looking at it.

[00:37:47] Mike: [00:37:47] Nice. Good for you. Good for you. So gratitude is so important, right? Yeah. You know what? That’s been my, with Thanksgiving, we’re going to date this a little bit now, right?

[00:37:58] Thanksgiving is this week, but, we’ll, we’re recording this. I put some social media out there yesterday. And I said, listen, I said, why don’t we only count our blessings or be grateful for things on Thanksgiving around? And somebody says, Hey, what are you grateful for today? When I think every day we should be grateful.

[00:38:16] Every day, years ago, I said, I started journaling three to five things every day that I was grateful for. and you know what, it doesn’t have to be anything big brand. it could be the air you breathe or that you stood up that morning.

[00:38:30]Brad: [00:38:30] Yeah. It is incredible. It’s a great thing to do, and it’s a great way to keep it top of mind.

[00:38:36]Mike: [00:38:36] So don’t, I think a lot of times you find more happiness and really can open the window to your soul.

[00:38:44] Brad: [00:38:44] That’s Very profound. Michael, very profound. A little bit. I think that’s old age, right? Yeah, it is. We get more grateful as we, hopefully you get more grateful when you have more gratitude.

[00:38:54] Mike: [00:38:54] Yeah, definitely. That’s for sure. listen, this has been a blast. I’m glad that you were here today and I love talking shop and there, we got into some good shop stuff here. how do, how do, the listeners get a hold of you if they want to pick your brain or get in touch?

[00:39:09] Brad: [00:39:09] Sure. So you can go to my. Website atrepodcast.com.

[00:39:14] Now it’s all things real estate is the name of my podcast. All things real estate and it’s ATR E podcast.com. You can go on and get, if you want to pick my brain, you can, Sign up for a free 30 minute conversation with me. you can also email me, ATRT podcast@gmaildotcometrepodcastatgmail.com.

[00:39:38] And I hope that your listeners would like to listen to my show as well.

[00:39:41] Mike: [00:39:41] Yeah, absolutely. And I can tell my listeners that I have listened to your show and I’ve been on your show so they can go listen to my show on your show. Definitely. And I think, I, gosh, I wanted to say your show will be airing in January.

[00:39:58] Good well off the new year brad.

[00:40:02] Brad: [00:40:02] Hey cool. My Core Intentions. Everyone’s got to have an exit plan for whenever in life. And I figured if I put you on in January, they can really get going on that. Your goals. Yeah. Just sort of listers.

[00:40:15] Mike: [00:40:15] No, I did not pay for those two commercials. Now go by the book exit plan and right.

[00:40:21] So you’re good book. All right. everybody, Hey, thanks for being here. Another Tuesday afternoon way to wrap it up, Brad, it’s been a pleasure and we will look forward to seeing you all next Tuesday again

[00:40:36]Kristen: [00:40:36] thank you, Mike, and thank you for joining us for another great episode of insider secrets as always insider secrets is brought to you by my corn tensions. Join us on social media and visit my core intentions.com where you can get expert coaching on all things, multifamily investing in property management.

[00:40:54] We’re looking forward to having you back again next week for more insider secrets.