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Becoming The Person Capable of Success with Kari Lyke

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When you’re a real estate entrepreneur, you can achieve some pretty great successes and accomplishments. But the real reward is the person you become along the way. In this episode, Jeff interviews Kari Lyke—a real estate investor, mentor and host of the Investor Warrior podcast. In the interview, Jeff and Kari discuss a wide variety of topics about the entrepreneurial experience, and real estate investing specifically—from mindset to understanding your ‘why,’ to deal structuring and much more.

Episode Transcript

Kari Lyke 

achieving a goal is awesome, right? When you achieve you achieve a financial goal or a personal goal, you lose that weight, or you hit that dollar monthly income. You feel good about it. But you feel even better about who you become right in the process. And Jim Rohn has a famous quote that says, you know, and I'm not going to quote it exactly, but it's not about what you accomplish. It's who you become in the process.

Jeff Stephens 

Welcome to Racking Up Rentals, a show about how regular people, those of us without huge war chest of capital or insider connections, can build lasting wealth acquiring a portfolio of buy and hold real estate. But we don't just go mainstream looking at what's on the market and asking banks for loans nor are we posting We Buy Houses signs are just looking for “motivated sellers” to make lowball offers to. You see, we are people-oriented dealmakers, we sit down directly with sellers to work out win-win deals without agents or any other obstacles, and buy properties nobody else even knows are for sale. I'm Jeff from the Thoughtful Real Estate Entrepreneur. If you're the kind of real estate investor who wants long term wealth, not get rich quick gimmicks or pictures of yourself holding fat checks on social media. This show is for you. Join me and quietly become the wealthiest person on your block. Now let's go rack up a rental portfolio.

Jeff Stephens 

Thanks for joining me for another episode of Racking Up Rentals. Show Notes for this episode can be found at www.thoughtfulre.com/e62 for episode number 62. Please do us a big favor by hitting the subscribe button. Your podcast app right now just takes a quick second, it really does help other fellow thoughtful real estate entrepreneurs to find the show. Onward with today's episode.

In today's episode, I've had the pleasure of interviewing a new friend, Kari Lyke. Kari is a longtime investor herself. She is a mentor, and she is the host of a brand-new podcast called the Investor Warrior podcast. And I think as you listen to our interview, you're gonna find that the way Kari approaches things is just very, very aligned with how we work and think as thoughtful real estate entrepreneurs. And in this conversation, she and I talked about everything from like mindset and understanding your why and maybe even the evolution of your why a little bit over time, to the totally the other side of the brain about deal structuring and whether you should be measuring yourself in terms of the quantity of deals you do or the quality of deals. And I think you're going to find that Kari is just an absolute delight. And her way of thinking is so well aligned with hours as thoughtful real estate entrepreneurs. So without further ado, I'm going to stop my yapping I'm going to get us right in to this interview with Kari like from the Investor Warrior podcast.

Okay, awesome. Carrie, thank you so much for joining me on racking up rentals.

Kari Lyke 

Hi, Jeff, thanks so much for having me. This is this is gonna be fun. Yes, I'm so glad that we met recently. And I was excited to chat with you, kind of as soon as we met and it seemed like we had some things in common that were gonna make for great conversation.

Jeff Stephens 

Yeah, absolutely. So okay, let's start the I'm a big picture kind of guy. I'll start at 60,000 feet. Who are you?

Kari Lyke 

Oh, man. Well, I am a wife and a mother of three amazing boys. And I actually didn't start out in real estate investing. I started out as a physical therapist. So I was in the medical fields, when I met my husband, and we decided to start our family. And I was, uh, you know, probably a lot of your listeners. And you can relate very traditional background, go to school, get a job, retire. That's exactly what my parents did. In fact, my dad had the same job at the same company for about 35 years when he retired as an engineer. And so I went, I went on the same course I went to school for six years, got my master's degree started climbing the corporate ladder and physical therapy. And I slowly got burnt out about three years into it. I was tired of the nine to five job, I was tired of not having flexibility in my schedule patients every hour commute on both ends, right. And then I'll tell you this in school that you don't get paid for commute time, you might have to bring your work home with you and you don't get paid for that either.

Kari Lyke 

And I'm like, man, I you know, I want more flexibility in my life. And I remember sitting down with my husband one night, and I was telling him all the things that I wanted to do in our life when we started our family, go to Europe and the summers take the kids here and there, you know, RV around the country and he stopped me and he looked me in the eye and he said Carrie, we're never going to be able to have this life if we continue at it with our nine to five jobs. And at the time, I was making a really good salary for you know, 23-year-old I was making, you know, 70,000 a year but we got pregnant with our first son. And I decided I wanted to do something different. So I got into real estate when, you know first read Rich Dad, Poor Dad, Robert Kiyosaki went to their trainings that led me to join my local Ria, and I found a coach and I started educating myself in real estate. But I did not do a deal for over a year, I was paralyzed by fear of talking to sellers, about making a mistake about whether this was all legal or not.

Kari Lyke 

There was just so much fear getting in my way. And so, one day I was driving from Florida to Georgia. We did a lot of commuting back then, because we lived in Georgia, temporarily, but I was still kind of home based here in Florida. And so I would listen to a lot of audio books in the car. And I was listening to Robert Kiyosaki talk. And he said, it doesn't matter how the how doesn't matter if the Y is strong enough. And I was like, Oh, my gosh, I've been at it for a year. I don't really know why I'm doing it. I mean, I know I want to replace my income as a physical therapist, but maybe that's not a big enough. Why? Right? Like, why do I want to replace my job as a physical and physical therapist, why don't want to I want to get into real estate investing. And so I really came home from that trip. And me and my husband took out a big poster board, and we started writing down like, why are we doing this? Why am I getting up at 5am? To start, you know, writing out handwritten letters, envelopes? And why am I putting the baby down for their nap instead of me napping, I'm picking up the phone and calling sellers. And honestly, when it came down to it, my number one why was to prove my family wrong. Because I did not get a lot of support in the beginning. And in now that I look back at it, I'm so glad that I didn't because that was my hunger. That was my drive, I wanted to prove to my family that I could do this. They were concerned that I was leaving the corporate world and the safe job. And they supported me financially and emotionally through that six years of school. And so of course, they were concerned when I wanted to give that all away after three years and start my own real estate investing company, which I had absolutely no knowledge in. And so it was very fear based, their lack of support. And now as a mom, I can understand why that was my number one Why is proved my parents, you know, prove my family wrong. picking up the phone, and calling a seller was way less painful than the thought of failing in front of my family. And so sure enough, when I got true to my why's, and some of you might think well, that's, you know, might not be the best Why? But for me, it was for me, it drove me. And we started, we did our first flip led us to our first wholesale, which then led us to our next flip, then we wanted to start building our wealth with long term, long term rentals. So we started acquiring rentals with owner financing and subject to transactions and private lending. And that just led me down this whole journey. And it catapulted me into the belief that I could do this. It's just created this lifestyle that we were always wanting, and we were never going to get with our nine to five jobs. And, you know, that ultimately led me here today with you. And that now I want to share that message with the world. I want to share all this information with the world because I think there's a lot of people out there right now who might want to get out of the nine to five grind or might want a better lifestyle for them. And real estate is certainly a vehicle that can get you there.

Jeff Stephens 

Yeah, absolutely. And if there's ever been a year that has encouraged us all to you know, ask the big questions and say, is this am I really doing what I want to be doing? And, you know, questions on assumptions. It's been it's certainly been this year so it's awesome that you got to that why because that was the first question I had actually when you were started telling the story was all right, you are raised in a very like kind of traditional mentality about work and stuff and I can see there being you know, resistance or friction around that. So would you say then that you know, after you kind of conquered that initial why like, it has a different one evolved, like what is the fire Now that you have, you know, kind of come to peace with the family side of things like when you wake up now the why that is like the fire burning inside you. Now, how is it evolved?

Kari Lyke 

Oh my gosh, yes, absolutely. It evolved and to be quite I mean, as I of course proved my family wrong, right. I had to I had to conquer that. Why first? I realized it wasn't about them. It was really proving it to myself, right, instilling that belief system in me because I had so much fear going into this. And you know, I'm a woman. I'm a woman. I was 27 years old at the time when I started. I had a new baby so I was worn down mom, new mom, I felt very out of place in the real estate investing world. So I felt like, maybe I was making a mistake getting into this, maybe I needed to go back to physical therapy. And I always remember my husband was my biggest coach at the time. And he said, Carrie, I've always my mentor told me one day, never look back, never look back, if you've got a goal, just keep moving forward, because I kept saying, I have this job back here that I can fall back on. He said, never look back. Because you will always think about what could have been, and you will never be fulfilled. And so, we just kept driving forward, and my wife did change over time. And in fact, I own real estate now, with my parents, I, they call me my fit, my whole family calls me now for real estate advice, which I love, and I love helping support them now. And so their beliefs have also changed. And that has helped me, you know, because now I do have their support. But it really ultimately was about believing in myself and proving it to myself that I could do this. And naturally, you know, I proved it to those who didn't support me in the beginning. And like I said, I'm glad I didn't have that support. Sometimes when you don't have the support, or sometimes the thing that you think is so challenging, that you wish you had, you wouldn't be here today without that challenge. So now that I look back at it, that challenge was really an opportunity. And I love my parents, and I'm glad they didn't support me. You know, and it was just your base, it was fear for me, they love me, they want me to have the best life possible. And they were afraid that I was throwing it all away for this new, you know, this new career which I had no knowledge in?

Jeff Stephens 

Yeah, absolutely. I think it's a great, great point that it's everybody just been gushing with, Okay, great, it might not have lit the same fire in you. And I was actually thinking similarly, when you were talking about like, never look back, that when you have when you in the back of your mind, you know, there's a safety net, like it always kind of go back to the physical therapy world, then even if you're not really considering just knowing it's in the back of your mind actually can be dangerous like it can I think it can lead to maybe complacency. So I think it's, it's fantastic that you were able to just say like, No, these are, these are things driving me forward.

Kari Lyke 

Yeah, my favorite quote, laughs So I have a lot of favorite quotes of Tony Robbins. But he says, if you want to take the island to burn your boats, if you want to take the islands and your boats are gone, you have to take the island. If you know those boats are back there, well, then that's your fallback plan. And so, I you know, I've kept my license active because it's actually given me some opportunities recently that I actually needed my license for, for a different part of my life that I'm going through right now. But I only kept it for that reason is one day, I might need this for something else. And that something else has occurred just last year, and I was so thankful that I had that license. But it took me about three years of buying and selling real estate, to tell people that I was a real estate investor for three years. I said, I'm a physical therapist, but I invest in real estate. And it wasn't until I made that switch. I mean, I don't know how many flips I had done, how many rentals we had acquired, I wasn't I had, I was three years out of practicing, hadn't touched a patient in three years. And you know, we're still telling people, I'm a physical therapist, I invest in real estate though. And now it's hard for me to get those words out. Because I'm just not used to seeing them anymore. When you proclaim yourself as something, I am a real estate investor, or I am a real estate entrepreneur. And you keep saying it, it's it becomes you. And I didn't make I just didn't make that transition for that first couple years. And I think when I finally made that tradition, that transition is really truly when I realized that I can do this, I have more potential than I ever thought imaginable.

Jeff Stephens 

We all do. And you have to become what you are doing in order to become a master of it. And it's proclaiming it to the world and not being afraid to gosh, oh, that is so important. And I totally relate to struggling with those things to it kind of always wanted to hedge a little bit like well, I kind of do a little bit of this too, instead of just truly owning it. And it's so much easier said than done. But I absolutely agree that once you do, proclaim it your self-identity starts to solidify and then it actually manifests into reality, as well.

Kari Lyke 

Yeah, and you know, Jeff, you asked I have had my y's changed, and my y's have dramatically changed. It used to be about me, right? My y was, I wanted to prove my family wrong. I wanted to have this lifestyle. I wanted to do these fun things with kids. It was me, me, me, me, me. And while in the beginning, that's okay. My y's have completely shifted. My y's now are I want to inspire others, like I want other people to see the success and see the challenges. And I want to inspire others to go on this journey. Because achieving a goal is awesome, right? When you achieve you achieve a financial goal or a personal goal, you lose that weight, or you hit that dollar monthly income, you feel good about it. But you feel even better about who you become right in the process. And Jim Rohn has a famous quote that says, you know, and I'm not going to quote it exactly, but it's not about what you accomplished. It's who you become in the process of accomplishing it, is the greatest Feat. And so, I used to look at problems and challenges in this business, because we all run into problems and challenges in any business. And we certainly have enough of them in real estate investing. It's not all roses every day, I used to look at problems and challenges is like, Oh, another challenge. Another problem? Why does this always happen? Why is my day always filled with problems? And then I realize now that's just part of my journey. And now I get to share that with other people how I accomplish, I would literally, I remember my, because my y had changed that I'm now going to inspire others. My y made me visualize more. And so when I was really going through a challenging time or a problem in our real estate investing world, I would visualize myself, I'd close my eyes, like every night and meditate and visualize myself overcoming this problem. And then later on sharing that problem with the world with people who may be going through the same thing, or might be going through something on a personal level where they can relate to what I was going through, and helping other people get through it. And so now my problems again, became opportunities just to share my journey with people and share the challenges that we can all overcome.

Jeff Stephens 

Yeah, absolutely. Now, yeah. So and that, you know, that to me sounds like a coach's mentality, right? How can you use some of your experiences to help other people with their current situations or help them even maybe reframe their current situations in their thoughts about them so that they can get different results? So if I remember correctly, at some point, then did you started transitioning to coaching others as well as that, right?

Kari Lyke 

Yes, what happened was about three years into investing when I proclaimed, you know, I was a real estate investor, my coach asked me to come on board in his coaching program, you know, he, you know, I was the, quote unquote, Rockstar students, and, and I'm going to get back to that in a second. You know, because I was doing lots of deals, and I was doing it, basically, with a baby on my hip A lot of times, because I was pregnant many times throughout these years that we were doing it. I mean, I was bringing babies to closing tables constantly. And so he asked me to come on board and say, Yeah, I coached and his coaching program for a few years, I ran the coaching calls, and I got on stage and started doing public speaking, which I was terrified to speak to people. I would say, I was terrified to speak to a few people never mind 100 people. So that was a transformation that I went through. And all of a sudden, I realized that this part of real estate investing, really fed my soul, right? It was like food for my soul, where I could get up and I could share my challenges and my experiences with other people. And I think you're spot on with coaching. Some people think that coaching is okay, they're gonna teach me how to do something. There is plenty of information out there that you can get for free. You can go on YouTube, you can listen to podcasts, you can download all kinds of free, you know, downloads that will give you the information. And I remember hearing Les Brown, he quoted his mentor and he said that his mentor told him one day, he said, brownie, if information made everyone he if information made everyone skinny, happy and rich, we'd all be skinny, happy and rich. So why are we all not skinny, happy and rich. There's enough information out there. So a coach's job is not there. They're not there for you to learn from them to learn the strategies and all that that's a portion of it. What a coach does is it they bring the best out of you. They help you realize your potential. They believe in you sometimes before you believe in yourself, and my coach did an excellent job of that he saw me and he said, I want you to speak on stage. And he knew I was terrible. I mean, I had never spoken, he knew my fear around speaking. And that was the same fear I had was speaking to sellers. And one day, he said, you're going to get on stage and you're going to speak? And I said, No, I'm not. I'm not getting on stage. And he said, Yes, you are. Because I think you could be an amazing speaker, I see it in you this, this first time you do it, you might be terrible at it. But I am giving you an opportunity here, you're not going to say no, you're going to get up on my stage and you're going to speak I see this as a privilege that I'm giving you. And I said, Okay, so I got on stage, and I did terrible. But that was when I realized that I love doing this part. I love coaching, I love seeing other people go through the transformations that I went through. And so that's basically what a coach is there for you for you to help you through the journey of transforming into the person you want to become.

Jeff Stephens 

Yeah, gosh, that's so well said, you know, you and I met at an event just a few weeks ago. And one of the things that's really stuck with me from that event, was one of the speakers talking about, he sort of itemized and distinguished between teaching is different than coaching is different than mentoring is different than consulting. And that that distinction really was powerful to me. And I just absolutely agree that coaching is about Yeah, helping other people, bring up their potential not telling them what to do and asking great questions. And I can also think back to my own experience as a coaching student, those periods were not just the periods in which I did the biggest, best most deals that was true to but it was also when I was the best version of Jeff and many other senses to is when I was most creatively prolific. It's when I was most on fire in terms of learning new things, you know, like learning a new language or playing music or whatever. And I really think that like the, you know, the well roundedness of a person really contributes an important way and coaching can help bring out those best elements of everybody.

Jeff Stephens 

Yeah, absolutely. I totally agree. That's awesome. Okay, so I want to hear about your life as a real estate investor, right? So we, we can we can talk about coaching and all that stuff. But like day to day, we're doing deals. And so I like to say that when a person finds the right strategy that clicks with them and feels right and authentic, that's when things start to take off. And I call that process like finding your voice. So what is the voice for you as a real estate investor that you found that has become the right formula for you.

Kari Lyke 

So the way that I invest in real estate is I basically do everything because every sellers situation is different. And so very similar to you, I started out thinking I just wanted to wholesale. But I quickly realized that wholesaling is actually not a real estate investing business, it's a marketing business, you're marketing to find leads, and you're matching sellers with buyers, you never actually own any real estate, you're never actually at the closing table. I mean, you could wholesale without having much knowledge of real estate investing at all. And then that, you know, I started thinking about flipping, and that was my very first deal was I was I was I flipped a house. Even though my coach suggested I wholesale it, I ended up flipping it. And that first deal was the most challenging property I had ever done in my entire career of real estate. Entrepreneurship was that very first deal. But it was the deal that that deal was what led me to the next one and the next one and then thinking, Okay, well, I don't know if I want to just wholesale and flip. Now I want to start building some wealth. I'd like some long-term rentals. And that led us into getting educated on owner financing and subject to transactions and private lending, and then sometimes taking a combination of all three of those, if that's what the seller needed. So that led us into long term rental. And then we started thinking about converting some of those into short term vacation rentals and we got into that model. And so when someone asked me Well, what do you focus on? You know, I don't I focus on everything, because it really depends on the needs of the seller, and what they are trying to accomplish. And I can always make a cash offer work for a seller. So a lot of times I will give a homeowner a couple of different options, depending on what I'm hearing from them when I, when I prescreen them. And so, and I just think that, you know, this is this is just the way I move forward in my real estate business, if I can have as many tools as possible to give me as much creativity as possible, I can do more deals, and I'm not leaving deals on the table. And I'm also not leaving homeowners or sellers out to dry, because we've worked with a lot of homeowners where they couldn't make a deal work with another investor. So they were out there, the end of the rope, they needed to just get out of the property. And we've sent some homeowners just want to walk away from, you know, something. And there were other investors that just couldn't get it done, because all they did was cash offers, where we looked at it, we said, okay, well, what if we do this or that and this, and we made it work. And that's why I love having all of these different tools that we can, that we can choose, because every situation is different. This world is not black or white?

Jeff Stephens 

No, it is really not. And I love that. And it's exactly what I do, too. And so to use that, you know, use the word tools. I'm glad you said that, because I was thinking about that, you know, as like a metaphor. We have a toolbox, and we've got tools in it. And if the only tool in the toolbox is like wholesaling, for instance. So you know, picture, like you have a toolbox, and you open up and there's one thing in there called the hammer, your inclination is just to just find things to hit. And you know, like, well, I don't know, that might be a screw, that might be a piece of wood, but I also have the hammer on how to do is hit things. So I'm just gonna start hitting things. And when you approach it, like you just described though, you  walk up to the seller, you walk up to the situation, say, okay, what's going on here, what's the best tool to apply to this situation, but you're kind of agnostic to like which tool you use, because it's not that I get excited about using the hammer 10 times a day and the PSA twice a day, like whatever, like, I'll use the tools that I need to solve that person. So it's really it's a seller oriented approach, which I think it just it, I know real estate, investing, education is like, unbelievably vast sea of information, right. And so people have to start somewhere. And usually start by learning kind of one, one tool, but it pains me so much when I whether it's like a client, or just like somebody in a Facebook group is talking about a situation and, you know, they're, they're looking at it through blinders, they're just looking at it with their one lens, they're like, I can't, you know, I don't know how to make this work as a wholesale deal, for instance. And I'm thinking like, if that were my deal, that would be the best long term hold I ever had. But those people will walk right by that opportunity and not see it, because they don't have those tools in their, in their toolbox. So I think it's fantastic that you, you know, committed to learning all these different tools and then are likely will use the tool that's right for the situation and the seller.

Kari Lyke 

Yeah, it's funny, because I think my medical background actually helps me with my real estate investing, there's a lot of similarities. And that I remember one professor that we had used to say, this is just another tool that you can put in your toolbox because I went into physical therapy, which is a very holistic approach. A lot of times we would get patients who were coming before they went to the surgeon or before they went to the more invasive route. And as a physical therapist, you have to diagnose the person before they might have even had diagnostic tests. And so we're looking at the whole picture, if they have a foot issue, well, it might be coming from their neck, or if they have a neck issue, it might be coming from improper footwear, we're not just looking at the one thing that's bothering them, versus like when they would go to a surgeon, okay, well, you need surgery, or you go to you know, a heart doctor. And there's something obviously something wrong with your heart. I was more of a general practitioner, and it's very similar to houses, diagnosing problems in the actual physical house, right? I have to diagnose the problems of the house. But then I'd also have to take a look at the patient, which is like the homeowner. And I'd have to figure out okay, well, what's going on here? What's going on there? Why do you need the cash? When do you need the cash buy? In so it was very similar to my medical background, actually. And I think that's where I kind of had a little bit of an edge or a start on it is because I was already kind of a creative thinker when it when it came down to putting different pieces together to make sure that everyone walks away feeling good.

Jeff Stephens 

Yeah. Oh, that's cool. All right. So when you've got a big toolbox, and you are not predisposed to, you know, wanting to use any one tool more than the others that can lead you to lots of opportunities to do creative things and deal structure and I happen to know that we are both fellow geeks of the topic of deal structuring and creative financing. So can you give us a couple of examples of like, how do you use creative funding In your business, maybe like, one longer term type of aversion, but also how do you use it in shorter term deals like flips and things like that?

Kari Lyke 

Yeah, so this is what I love about creative financing is you can use it for both long term strategies and short-term strategies. So when I think of short term strategies, I think of wholesaling and fix and flip. When I think of long-term strategies, I'm thinking long term rental, short term rental, or putting a lease option tenant in there. So I'll give you two examples of each so you can see kind of how my brain works. So just a few weeks ago, we sold one of our flips. The situation was that the sellers, the house wasn't actually in a very distressed condition, they didn't just put a brand-new roof on, they just painted the outside, very desirable neighborhood in a gated community of Orlando. But they had a job transfer. And it was like 30 days, they had to go and they needed some of the proceeds of the sale of the house to put down on they were going to be doing a rent to own where they were, they were going to another state. And I guess they just waited too long to list the house. So listing, it was no longer an option because they couldn't afford a buyer to fall through. They could not afford to not have the proceeds when they went on their way. So they contacted us the house needed $15,000 in repairs and paid carpet, we could have just sold that as is because of the area but needed a little bit of you know, sprucing up inside. So I gave them a cash offer because I knew they just needed to move on. They needed a quick closing 30 days I gave them a cash offer. The cash offer didn't work. I think I gave them a cash offer of 220. They said well, we really need like 232 35. And I said okay, and I started doing the math, they said well, you have this underlying mortgage, okay, they had a mortgage with a traditional lender for you know, 145,000. I said, if you want more for this property, what we could do is we can purchase the property subject to the existing financing, which means the mortgage is going to stay in your name, but we're going to start making payments on that existing mortgage. And we're going to give you cash for your equity, which was about $70,000. So we'll give you the cash. And we'll pay off that underlying mortgage within one year. Okay, that was the agreement within the paperwork is will pay off that underlying mortgage within one year. And so they accepted the offer, they got their cash at closing, we did not have to raise 145,000, great interest rate it was at 4%. Plus it was 15 years into the mortgage. So every time we were making a mortgage payment, it was almost purely You know, it was more principal than interest at that point. And then the taxes and the insurance, were just going into escrow, but we had an assignment of escrow. So when we sold the house, all that money would just come back to us. And so it was a very easy way to get into a property because we didn't have to raise 145,000, it was at a 4% interest rate, which you're not going to get with a private lender or a hard money lender. We gave them their cash, I actually brought an equity partner to come in, she had some money in her IRA, she said, you know, I'll fund the deal, we'll split it 5050. So she was actually an equity partner. I managed the renovation. So I put the deal together, I manage the renovation, she managed the sale of the property, and we sold it within three or four months, underlying mortgage got paid off, my partner got paid off with the cash that she made. And we split the profit, and it works for everyone. So that's how we structured that deal. And it was a short-term agreement, I knew that I had one year where I was making payments on that mortgage. So for me, I wasn't going to turn this into a long term rental for me, I knew I needed to pay off that mortgage. So in my head, I said, Okay, we're gonna flip this property. Yeah.

Jeff Stephens 

Yeah, that's such a great story. And as I listened to that, I mean, it just it makes perfect sense. And it just, it just begs the question to me, why don't more people think about that, you know, think about those types of solutions, right? You presented an offer to begin with, it wasn't quite hitting the target. Right? And they provide you some feedback. You say, Great, well, let's make some adjustments. But it's as simple as that is. It's not necessarily that that deal structure was simple, but the thought process of Okay, Plan A wasn't quite perfect. We need to make some revisions. How can I keep getting this person closer to where they're trying to go what they want, and still have this work? For me that part seems, you know, simple enough as a as a thought process. Do you have any theories as to like why isn't this stuff a little bit more common in our industry?

Kari Lyke 

I think because cash is easy to get, but it's hard to pay off right? So cash hard money. lenders are out there, they're willing to give you cash. So a cash transaction for most investors, it's easy. It's easy to get. But you don't realize how many fees are involved with hard money. I mean, the very first flip I did, I paid, I did a hard money lender. And I remember when we got to closing, I'm like, wait a second, what are all these fees, and then every time we had an inspector come out, it was like, $200, here, $200 there. And then all when we went to go pay off the loan, there was fees attached to that. Plus, we were paying 12%, you know, interest only for I think there was a year balloon on it. Very expensive. So all of that money that could have been put in my pocket went to the lender, but it was very easy to get, and it was very easy to explain to the seller, this is a cash transaction. That's it, right? I think with these kinds of financing structures, and I and I think we talked about this on your podcast show as well, is that a lot of investors, they, where they get tripped up, is presenting it to the seller, how am I ever going to present this kind of a deal to a seller, cash is just way easier, I'll pay the interest, I'll pay the fees and, you know, go on. For me over the years, I've just developed a way to present these kinds of transactions to the seller. And I think of it as presentation. So right, I'm a a student, right? I was always like a great student, I told my husband one day, if I could be a professional student and get paid for it, I think that's what I would do. So I used to love presentations, right, putting together a presentation where I could take a topic that might be complicated for the class. But I could break it down and put it into a presentation mode, where I could explain it to the class and they could learn from it. And so when I go into these situations, I think like a student, how can I create a presentation for the homeowners so that they can see how this will work for them? How it will solve either their problem, or it will work for their needs? And how they're going to be protected? Because that's honestly, the biggest question is How am I protected in this deal? What if you don't make the mortgage payments? What if you don't sell the house within a year? So I am always being you always want to be proactive, not reactive when you're going into these, these presentations with the seller. So be prepared, have a presentation, know the objections going in. And you will find from experience. They're almost all the same objections all the time, maybe just a little bit of tweaks here and there. We had we did a deal. One time I was long term rental that we still own today. And I was this was when I was a student. I was in the coaching program as a student. And so we were learning objections to owner financing where a seller might have a question. And really, whenever a seller has a question, it just means that they're not understanding something. And so questions are just opportunities for us to explain better to them, and maybe something that they need clarification on. And so I had a list of like 15 objections that I know, a seller could ask me when I'm presenting an owner financing deal. And I remember on this one particular transaction, because it was one of my very first owner financing deals. This seller asked every single question, I mean, like 15 questions, it was almost an hour on the phone. And I was like sweating. I was like, Oh, my God, you could ask the desk question. I know it. And sure enough, he asked the next question asked the next question. And by the time we got to the end of it, he said, You have answered every single one of my questions, I understand how this deal is working. Now, I trust you. Let's do it. And sure enough, we did the deal. And we still have that that rental today. And I have a relation he has passed on but I have a relationship with his wife who now receives the mortgage payments. And it's really just about being prepared to go in. So if you're going to present one of these offers, you have to know going in how you're going to present it even if you have to sit there and talk to yourself in the mirror as if you're the seller, which is what I used to do too. And you have to be prepared with the questions that might be answered. So really just putting yourself in the seller's position. If you want to do this deal, what kind of questions might you have? Because they want to know that it's they're gonna they're gonna be okay. Right? In this transaction?

Jeff Stephens 

Yeah, absolutely. Yeah. I mean, putting yourself in their shoes, it's about empathy, right? And if you, if you can kind of get to that spot and say, well, like of course they're gonna ask that question because, like, you know, unless they're just not paying attention, like they're gonna have, they're gonna wonder about that thing. And I think that once you have those conversations a few times it gets, it gets a lot easier pretty quickly, like the first couple of times are like, Oh, boy, you know, like, you know, you just feel like really tense. But then afterward you're like, Okay, I understand how this is gonna go and you kind of get in. It sounds like you're very good at explaining things in a very understandable way, which I think is such a critical skill, you know, in these types of this element of our business is just being able to sufficiently answer a question with enough detail, but in a way that doesn't overwhelm people and, and things like that. And,

Kari Lyke 

yeah, and I will say, especially for people who are first starting, my biggest piece of advice is you are never going to know it all. And I still get questions that I don't know. And I'm completely honest with the homeowner, if I don't have if I don't have an answer to the question, I will let them know. I don't know the answer to that question. But I know how to get the answer. So I will get back with you. And I think that homeowners appreciate the fact that you can be honest with them, not try to answer it, even though you don't know how to structure it. In fact, we just, I mean, an hour ago, the seller just texted me that she's accepting our offer. This is a deal with inside of a deal. It was an owner financing. We bought this house from this couple two years ago, they're in their 70s, retired, just had a terrible time managing this rental, it was an investment property that they bought in their IRA. When I met them, they had only owned it for two years. And they were already on their second eviction. And so we sat at the kitchen table for probably five hours, I explained the deal. You know, I got to know them first in their personal life. I know their grandchildren, I know their pets, I know everything about them. Very sweet couple. We did a we structured it. So it was a free and clear property. But he was getting cash offers from investors and the cash offers were just not making sense for him for how much they put into this deal. They only had it for two years, the house hadn't appreciated much. So we structured it in a way that we were going to give them monthly income monthly income stream into their IRA with interest, and just pay monthly installments on the equity. And we gave them a down payment that worked for them. It was basically how much cash they had into it. On repairs, we gave them back as a down payment. Because that was their biggest thing is what we put 20,000 into it. We want that cash back now in repairs. And I said okay, that would be your down payment, the rest will give to you in installments. And so for the last two years, we've been paying them a mortgage payment in their IRA. She called me the other day, the wife and she said we have a condo that we're trying to sell. Now I'm not interested in the condo, very high condo fees already getting reassessed again. So I said, Well, to be quite honest with you, my cash offers not going to make sense to you. I not really interested in doing any kind of deal structuring right now on this particular property. But they're concerned because they owe taxes on this condo. And because of what's happening in the world today, they had to give a bunch of money back to people who are coming down to rent from Canada. Well, Canadians can't come down to the US right now for 30 days, because of COVID. And so they're not getting any income from this property. So they're concerned because they have a 30 $700 tax bill. And they said, Are you are you planning on selling the cottage, the one that we financed with them anytime soon? I said No, I'm not. She said is because we just need 30 $700 right now. And we don't know where to get it from. So I called her back. And I said, Well, what if we gave you 30 $700 pre payment, which is basically five months of payment, we'll give you 30 $700 upfront, in exchange for seven months of no mortgages, no mortgage payments on the cottage. And she said, Well, how would that be structured, I said, I have no idea. It can be structured, we'll probably have to call your IRA company to make sure we get the right documentation. But I have an attorney who we can work with. And she knows how to structure it with the paperwork. So sure enough, an hour ago, I just saw a message comes through, she said we will accept your offer. This is really helping us Thank you.

Jeff Stephens 

Gosh, that is such a great story. I just I feel like I just captured 100 lessons, you know from that about the power of repeat business from quality relationships and the value of you know, all those other investors you were competing with on a first deal that they weren't sitting at that kitchen table for five hours, taking as much time as they as they needed, knowing the grandkids names in the dog's name and they weren't. They weren't doing that kind of stuff. But you earned the right to do that. But one of the takeaways I got that I think is really, really interesting. Is that I see like when again, like in a Facebook group, people are posing questions and one of the questions I see people asking is so i think i Want to do this like seller financing thing? How do I like what's all the paperwork I need and my response is always like, you don't need to worry about paperwork until you have something to document that you have already agreed to, like, give you a solution that is going to meet the other person's needs? And then you can figure out how to write it up. And so I love from that story. You weren't really worried about like, Oh, well, we're using this tool and that tool and that, you know, it's just like, no, here's the simple answer is I can give you the 3700 now, and how are we going to then kind of accommodate that in other ways. Now we've got something everybody feels good about. Now, it's just a matter of finding the right paperwork to capture that. But the important part, which is the negotiation of the relationship, the agreement has already been achieved. And so I think if more people had that, like solution kind of mindset first, like, let's, let's crack the code of this problem, right? Let's put the puzzle together, then we'll figure out how to document it after that. Such a great example of that.

Kari Lyke 

Yeah, yeah, no, it's a great deal. And this is why I love seller financing. And these deal structuring is because you actually do create a relationship with people. His wife is on my Facebook page all the time, comments and personal stuff. And it's just we've created a relationship where they can trust me, and I can trust them. They want me to buy this other house, you know, it's not working for me right now. You will get repeat business. If you structure these deals in a way that creates trust between you. And that other person, they're going to be the first person that they come to, if they have another need, or they have another house that they want to sell. And so I love it, it's still within a deal. It's repeat business, it's relationships. It's building trust, and building rapport. And I remember, after I sat down at that table, I mean, literally, it was hours and hours of going over the paperwork and the deal structuring. And after we had talked an hour of just personal things, I remember, the husband said, you know, I've received a few offers. You are the first person that has come to our house, sat down at our table and fully explained how you're going to purchase this house. And this is why we are accepting your offer. Yeah. And that was that.

Jeff Stephens 

That was that. Exactly. I mean, it's so funny, like, in some ways, just like the bar isn't necessarily that high. Like if you show up as like a real person. With a level of sincerity, you're asking questions, you know, just clearly have your own agenda. Act like a decent human follow up, like the some of those like a basic fundamental are just absolutely critical. But you realize that, somehow, I mean, astonishingly, that's not what everybody else is doing. Right? So if you just show up, start doing that. You already have a competitive advantage, which is kind of kind of amazing, but it's the truth. And it's, it's, it's great. To me, that's like part of the major definition of being thoughtful.

Kari Lyke 

Yeah, and I think for me, it's quality over quantity, I'm not, let's get as many offers out there as possible. For me a five-hour conversation at a kitchen table for 30-year fixed financing on a house that we now have converted into a vacation rental, which is netting us 1000 to 15 $100. net a month is well worth it is well worth that five, our relationship is well worth the relationship that I've established with the sellers. And now I'm you know, helping them with another, you know, deal. I just love it. And, you know, they may or may not refer me to their network. But ultimately, I love the relationship that I've been able to establish with them. That was worth taking the time to present the offer, worth the time invested. And I think a lot of investors don't want to, you know, and I'm not saying they don't want to invest the time, but they're all about the numbers, how many deals? I get this question all the time. Well, how many deals have you done? And I'm like, Well, what if I told you I had done 1000 deals, but I didn't make any money on them? Doesn't matter how many deals you do? No, it doesn't matter. That's not that's the top line. We're not concerned about the top line revenue. We're concerned about the bottom-line revenue. I mean, I've met so many people who said, you know, who say Well, I do either 25 or 30 or 50 deals a year, yet. They're very small numbers. So deals don't matter. For me, quality matters. And so if I can do a couple of deals a year if I can do a couple deals a month, it's fine. I'm not looking at the number of deals I'm doing I'm looking at the quality of the deals I'm doing. Me too. And I'm so happy to hear you say that I,

Jeff Stephens  

I think that's such a, it's like a red herring, it's a major distraction for a lot of people like this idea that it's, you really, it's all about volume. And it's not about it's not about volume, it's about quality and quality. I think even qualities like there's lots of different levels of quality, quality could be a healthier margin on a flip quality could be a neighborhood rental property, instead of A, B, or C neighborhood rental property quality could be also negotiating amazing terms and seller financing that you're going to have for the next 20 years. Regardless of like the quality of the property, there's so many, so many ways I think quality outweighs quantity, I feel exactly the same. I got on a quick sort of a preview call with this guy recently, who were just trying to explore and see if there was a fit between, he and I for like some coaching. And you know, he says super nice guy and just sort of casually like says, as if he just assumes, I'm going to relate to this. He says, Yeah, you know, I pretty much I feel like if I could if I could just get about 15 offers a day, I can quit my job, and I almost spit my coffee across the room. I'm like, did you just say 15 offers a day? I'm like, do you know how long it takes me to make 15 offers? Like, that's probably like two or three months for me, honestly, not a day because I'm not just on a machine gun. Like, because I a high percentage of the I don't actually, you know, I don't I like to say don't make offers I make proposals. And I pretty much know someone's gonna say yes, before you even make the proposal because I've taken the time to understand, you know, what they would need, and I was just blown away by that. But the more I expose myself to the rest of the real estate investing community, like that's actually a pretty common mentality. So I'm so glad to hear you say that. That's not how you're doing it. Yeah, I

Kari Lyke 

think the common mentality is numbers. How much marketing? Are you putting out? How much deals are you doing? How many offers? Are you doing? I feel that we don't talk enough about how much have you built? How much passive income Do you have coming in? How much you know, income Do you have coming in from wholesales and flips? We don't talk about like, the stuff that matters, which is the income? I got that question all the time. How many deals have you done? Oh, my god, it doesn't matter. Doesn't matter if I can do if I did one deal and made a million dollars on it. It doesn't matter. That one deal is worth it.

You know, I remember in the very beginning, I heard of a wholesaler who wholesale there. You know, it was very early on the wholesale the deal. And they made $150,000 on the deal. And I used to use this example. And I used to say guys, one deal. Right. And that's very typical for a wholesale deal. But when deal. If that's all it took, you're just one deal away. That's  my that's my like, my, my saying is you're just one deal away. You never know when that one deal could just transform your life.

Jeff Stephens 

So true. So true. And you'll miss it. If you're just looking for volume. You might walk right by that? Yeah. So okay, so transitioning, I want to hear about you've got an exciting new project underway. And that is a podcast. Can you tell us about your new show?

Kari Lyke 

Yeah, so, so excited to be starting in the podcast world. It's called the investor warrior. And the reason I started is because I just I have so much to share. And I have so much to share. You all know, my note, you know, my why now is I want to inspire others, I want to see others go through these transformations. I want to help others succeed. And so I started the investor warrior, because I think that becoming a real estate entrepreneur, becoming a real estate investor, you do have to have a warrior mentality, you have to have a discipline, you have to slay those fears that are standing in your way that sit in my way for so long. So the podcast is a lot of strategy, right? We're talking a lot about systems and strategies, because that will also make you a warrior in your business. You know, I'm not all I'm not about sacrificing my personal life or my business life I did that the first couple of years is not what a warrior does. A warrior, they know what's important in their life, and that is at the forefront of their life. And they build systems in their business to support that life. And so, you know, we talk a lot about strategy. We talk a lot about the tools and the resources because there's always new tools and new resources that are popping up in the real estate world. And we talk a lot about the mindset and the mentality that you have to have when you become a real estate entrepreneur and a real estate investor. And I don't think that we talk about this enough. I think a lot of people get excited about wholesaling. They see the numbers, right the numbers, the deals and but We don't talk about what it takes to become a successful real estate entrepreneur, there's a lot of mind shift, transformation, sometimes that needs to take place. And there's a lot of things that you might need to change in your personal life to support what you're trying to do you know, who you're trying to become. So that's why I started the podcast. I'm really, really excited. Brand new. And so that's it.

Jeff Stephens 

Yeah, that's awesome. And you're gonna be doing kind of a mix of some of like, your own topics, as well as interviews. Is that right?

Kari Lyke 

Yeah, yeah. So it'll be once sometimes it'll be me speaking about my experiences. And it will sometimes be a guest coming on, because, again, you guys that I don't know everything. And, you know, I probably have systems that I could improve, I could probably add some more tools into my world. And so I love doing the guest interviews, because I learned a lot from them, too. And so my goal, My mission is for you to, for listeners to have all kinds of different perspectives on what is possible. And I've met some amazing investor warriors. And I, they inspire me, right to speaking with them. And so I want to share that to everyone. So yeah, it's a little bit of me and a little bit of the other investor warriors that are in my network.

Jeff Stephens 

Fantastic. Well, I really love the name. And, you know, my coach, Greg, is somebody you've met recently, right? And he, he uses this expression, this language, he says that, as entrepreneurs, we're out in the arena. And every day, we're swinging the sword. And so when I heard, you know, the investor warriors, like, Oh, my gosh, that fits the visual perfectly. But it's so true. Because, you know, lots, you know, in that metaphor, like, there are lots of people, the majority of the people are sitting up in the stands, watching what's happening in the arena, but we're down in the arena, it can be scary, like, we're, you know, we have to fend for ourselves. If we're not swinging the sword, nothing's gonna happen, like swinging the sword might be marketing, it might be sitting down with sellers, it might be making proposals going back to the drawing board, whatever it is, but if we're not swinging the sword, nothing's gonna happen. And so anyway, the first thing I thought of when I heard the name that you chose for the podcast, which I think is just fantastic.

Kari Lyke 

Yeah, and one thing I want to add to that, too, is I say that the Warriors sword is just the vehicle to winning the battle, just like real estate is just the vehicle. The ultimate tool and resources, the mind is the psychology of the warrior, a warrior goes into battle, thinking that he's already lost the battle, he's going to lose the battle doesn't matter how sharp his sword is. So it doesn't matter how many strategies you think you know, or can put together. If your mindset is not there, you are not going to win the battle. And so that is the investor warrior. It's putting the strategies and pairing them with the psychology to become the best version of yourself and to create the lifestyle that you do want for you and your family.

Jeff Stephens 

Yeah, you know, and it's like you said earlier, the person you become while you're swinging the sword is the greatest gift more than just the clinking of the swords together. But who you become in that processes is awesome. So, gosh, this is so fun. I feel like we could talk for hours. Okay, so everybody knows the name of the podcast. So that go to go to iTunes, go to the other platforms and hit the subscribe button. But if people want to learn more about you or follow up with you in some other way, like what's the best way for them to reach you?

Kari Lyke 

Yeah, so the best way to reach me is through my social media. Kari Lyke is my Facebook page, I also have my Instagram page, which is Kari Buys Houses. That's my company. And so you can message me there. But yeah, definitely be sure to go on to the Investor Warrior, I promise you I will deliver over deliver to you. That is my promise to you.

Jeff Stephens 

Awesome. I have no doubt about that. And thank you so much for taking time to, to be with us and share all your wisdom with our audience.

Kari Lyke 

No, you're welcome. Thank you so much. Yes.

Jeff Stephens 

Sometimes I just feel like the luckiest guy cuz I get this opportunity to interview these awesome people. And then I get to go back and re listen to the interview and edit the episode and I get the value out of it twice. And it's so great. And I hope you learned as much from Kari as I did. I'm really glad she has decided to toss her hat in the arena of podcasting because I think her voice is one that needs to be heard. And I know she's gonna be able to have excellent guests and just really contribute a lot to the education of real estate investors and thoughtful real estate entrepreneurs.

Well, that is it for another episode of racking up rentals. Again, show notes for today's episode are at www.thoughtfulre.com/e62. Please do us a big favor by hitting the subscribe button in the podcast app right now. And if you wouldn't mind, just take two seconds to rate and review the show just a quick sentence or so, letting everybody know what you think is so, so helpful. We really, really appreciate that. Hey, did you know also that we have a Facebook group for thoughtful real estate entrepreneurs? It's called Rental Portfolio Wealth Builders and we would love to have you join us in there. Just go to group.thoughtfulre.com. It will take you right to the page where you can hit that Join button. If you liked this episode, please take a screenshot of it and post it to Instagram tag us, we are @thoughtfulrealestate. I will see you in the next episode.

Until then, this is Jeff from a Thoughtful Real Estate Entrepreneur signing off. Thanks for listening to Racking Up Rentals where we build long term wealth by being win-win dealmakers remember solve the person to unlock the deal and solve the financing to unlock the profits.

Wow, what a result. cialis Two pregnancies and 5 years ago i was 70 kg.

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