Episode #1: Introducing the Sleaze-Free Real Estate Investing Podcast
Listen to the episode on iTunes
Podcast host Jeff introduces the Sleaze-Free Real Estate Investing podcast and tells his own story of how he went from being a struggling real estate investor to cultivating the approach to real estate investing he now calls The Thoughtful Real Estate Entrepreneurship approach–a strategy that focuses on honing seller relations skills, deal architecture skills and opportunity vision.
Links and References in the Episode
Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!
The ABCs of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss
Rich Dad’s CASHFLOW Quadrant: Rich Dad’s Guide to Financial Freedom
Free PDF Guide: 5 Critical Mistakes That Make Most Real Estate Investors Accidentally Lowbrow
We’ve created a free PDF guide just for listeners of the Sleaze-Free Real Estate Investing Podcast, called “5 Critical Mistakes That Make Most Real Estate Investors Accidentally Lowbrow.”
For instant access to the PDF, just go to http://Pod.thoughtfulRE.com
The theme song is an excerpt of “No More” off the album “Golden Era” by Forest For The Trees. You can check them out on Amazon, iTunes, and Spotify.
Full Episode Transcript
This is Jeff from the Thoughtful Real Estate Entrepreneur welcome to episode number one, the inaugural episode of Sleaze-Free Real Estate Investing. This is a show for those of us who never really felt at home in the quote we buy houses crowd. In this show, we take a stand against what I like to call the lowbrow approach the mainstream guru seminar distress seller approach that ends up giving, real estate investors a slimy reputation, and instead we’re going to discuss the strategies tactics and philosophies that we call the thoughtful way. Now this is an enlightened approach to real estate entrepreneurship that focuses on constantly sharpening the sophisticated real estate, entrepreneurs, three most critical capabilities, number one seller relations skills. Number two, deal architecture skills. And number three, opportunity vision. Now when all three of these capabilities are successfully and fully emotion, you can make an excellent living today, but also be building long term wealth, while creating value for everybody that you touch along the way.
So the show notes for today’s episode, you can find at WWW dot thoughtful r e.com, slash, the one so thoughtful r e as in thoughtful real estate, thoughtful rt.com, slash, the one, please do yourself and us a big favor by taking a second right now to hit the subscribe button in your podcast app as well.
So I want to tell you a little bit about how we’re going to do this podcast, moving forward. Typically, we’re going to have a couple different segments in the episode. The first one will be a segment we call food for thought. And that’s going to be a reflection, a thoughtful reflection about something that’s not tactically about real estate, but it’s a more philosophical concept that ties back to our pursuit of real estate entrepreneurship. The second segment is going to be what we call the main course and the main course is more of a practical, real estate, lesson or thought or story that you could take and put to work right in your business immediately interviews are we going to do interviews, maybe sometimes. I know that the interview podcast format right now is extremely popular, but at this point we’re going to be mostly focused on conveying ideas for you to be able to think differently about real estate entrepreneurship.
And if necessary interview fits into that nicely did fantastic we will go ahead and do that. But today’s episode is going to be a little bit different. Today’s episode is an orientation orientation for you, and it’s an orientation for me.
I am Jeff Stephens, I am a full time real estate entrepreneur in the Portland, Oregon, market. I’m a first time podcast or maybe you can tell that already, which means that this isn’t going to be perfect. I haven’t really spent time and energy focused and worrying about a fancy setup or fancy equipment, which Mike to use or which software to use here and there. I’m more focused on the content and giving you my very very best thoughts, ideas, suggestions and sharing my own experiences the things that I think are going to be as valuable to you as possible. I will always do my best and I’m sure that we will get better as time goes on with the actual production of the podcast.
So today’s goal is just to give you context about me and tell you how we got to this point. How do we get to the place where it seemed like it made sense to create a podcast.
So here’s my story and how I got to this point where I decided to hit the record button, and start telling you what I’ve learned along the way for you to pick up on as well.
So I used to be self employed as a marketing consultant I had a brief stint in corporate marketing of an advertising degree from college, and I had a small business doing marketing and branding consulting for small businesses actually banks and credit unions in most cases.
At one point, many, many years ago, I read a book that I’m guessing that some of you have read if you have not checked the show notes, I’ve got a link to this here because this is very foundational Rich Dad Poor Dad by Robert Kiyosaki, and boy did I get excited about that. I started just studying my brains out and I went down the rabbit hole of everything related to Rich Dad Poor Dad I read all the other books in the series anything that they ever published that led me to podcasts, podcasts led me to learning about events in the real estate investing space. And at one point then I went to a conference in Atlanta, I took my wife, and then that conference led to a conference in Charlotte, where we learned lots of little tips and tricks about all sorts of things related to real estate investing we came home and boy where we fired up so we started putting what we had learned to work. And that’s when an interesting thing happened. So one thing we did right away is we started trying to find properties to buy and make offers on. And I went ahead and tied up a property that wasn’t listed property with a real estate agent. Now, today. Sure. This this is not something I would really recommend doing, but at the time I was just excited to like be taking action so I did that.
And somehow the agent caught wind that my intent was to try to assign the deal or wholesale the deal for a profit.
Yeah, I don’t think he even really knew exactly what that meant. And frankly, I was so green I barely even knew what that meant either, but let’s just say he turned out to be not happy about that. And here’s how I found out that he was not happy about that. One day, I think it was a Sunday. I heard a knock on my door at home, and I opened the door and unannounced here is this guy he had introduced himself to makes I didn’t know what he looked like or anything.
He, he introduces himself to me and then basically starts yelling at me and calling me sleazy to my face at my own house.
And I’ll tell you I was so rattled by that I, it really messed me up.
My whole life had been up to that moment and this is like my mid 20s up to that moment my whole life was Jeff is a good kid. Jeff does the right thing, Jeff does what he’s supposed to do he does what he says he’s going to do. He more or less follows the rules and he’s a good person and everybody had told me that along the way and here’s this guy standing in front of me, yelling at me on my doorstep calling me a sleazeball, and it messed me up so bad that I completely stopped pursuing real estate investing. Because I knew I wasn’t a sleazy person and this this this conflicted so hard with my self image that it caused me to do almost nothing for seven years, seven years. I was on the sidelines because this experience happened.
So I fast forward, and I continue to run my marketing business and I was just funny though I was less than less happy in my work. I was kind of just getting tired of doing the same thing is starting to seem mundane and repetitive. And I really wanted to build something for the long term. I wanted to build real wealth, you know my business created good income for me, which was nice, but it wasn’t creating anything for the long term. I wasn’t building any wealth and, you know, I had left a job in corporate America to create a business, which I had succeeded it I mean it wasn’t a huge business but it was, it worked. And it made me money and here I was like considering leaving it voluntarily shutting down voluntarily something that was totally functional and that like millions of people would kill to have the, the for the good fortune of having a business where they can work for themselves and be their own bosses and here I was thinking about just shutting it down so that I could do something that would build more wealth and I, you know, as I talked to my friends and family they thought I was crazy. I started to ask myself, man. Am I crazy, I started to have little bits of self doubt.
But I’ll tell you what was really going on in the back of my mind, though, was.I just could not stop thinking about this guy standing on my front door and calling me a sleazeball.It continued to haunt me over and over again but I was also being haunted by the idea that I knew that I wanted more in terms of building something for the long term. I wanted to build wealth and that haunted me too. So I have this total struggle this this conflict this this poll intention in my mind about, I want to do this but I don’t want to be a sleazeball. And the idea of compromising who I felt like I my was compromising ethics and being a sleazeball just to buy real estate and build wealth.I just, it hurt, it hurts even think about that.
So I decided to make the plunge and I did start winding down a perfectly good business.
Meanwhile, just wondering to myself you know trying to keep it to myself and not tell everybody else that I was wondering Jesus is the right thing to do it seemed kind of nuts but I did start moving forward with winding down this business and started doing real estate.
So to avoid any potential for, you know, sleaze because that was something that was big, big to me is to not feel sleazy. I just tried to do it everything, super conventionally I was looking at listed properties I was using hard money. Just doing everything the sort of normal, normal way, I wasn’t doing anything off the market at all.I did a deal I did a flip it worked out okay, I made a little bit of money. the second the second flip though, did not go well. I lost 25,000 bucks on that deal, which pretty much erase the profits I had from the first one so here I am like six months later, two deals under my belt in a net zero dollars to show for it and especially looking back on the mistakes I made on that second flip it was just so I felt so stupid. Because I should have known better on a couple things.
So then I tried direct marketing, and I thought okay I don’t want to go into the sleaze category here but I need to do something that’s going to generate a different type of deal that not everybody has access to by just looking at listed properties. So we started sending letters, we’d send some, we’d send some letters, using like a website that would send the letters for you and it’d be fake yellow paper and people would call and they’d say, Jeff yeah I see that you sent me this letter that supposed to look like a legal pad and handwriting, but I can tell it’s not. And that made me feel super sleazy again. I hated that that felt so wrong so then we just started sending letters ourselves that were typed out.
That felt a little bit better. And I could tell that this was hoping I was getting more face to face meetings and that was good. And I knew that I was a pretty easy to get along with guys, face to face and pretty likable. And so when when I would show up to meet with people that tended to go well. But what I found is that it was, I was kind of like making them more friends with sellers but I wasn’t getting more deals. And I thought that that was going to be the right result to getting more deals but I wasn’t really getting more deals I was just having more nice interactions, but I wasn’t making money.
And I started to wonder yet again like Jesus did I make the wrong decision here was I just insane quitting my business and moving to this thing that I have, I’m not proven in and I don’t even know what I’m doing. I started wondering if I should go back to doing the marketing stuff full time. And it was kind of a mess but I kept going.
And then came and interesting experience.
I met a seller name Larry I’d send them a letter he gave me a call back. I went to visit Larry His house is in sort of a C plus kind of area, not really great it’s kind of a busy street in that C plus area. It was a fixer.
But as I started to talk with him I realized there was a potential for seller financing, and so I got super excited sounds like this is gonna be my first seller financing deal. I’m not going to have to go to a bank I’m not gonna have to go to this hard money lender.
I’m gonna have a low down payment I got super fired up. I finally had to deal it was going to make sense.
And we did our due diligence and found that this this place was a little more of a fixer than I realized it was. And so I went back to Larry and I said Larry look you know there’s foundation problems I was kind of main thing was the foundation problem here. I’ve got a quote for fixing that but I need to adjust our deal, and the price, based on what I found here. And he understood but he couldn’t.
He couldn’t get to the point where he was willing to take that kind of a discount for this problem. And so what I had, I just had to let the deal go there goes the great seller financing There goes the opportunity to make some money. And I was bummed out I mean it was sort of like well there’s yet again another deal that isn’t working for me but I was bummed out.
So, I felt bad about myself but I just kept moving on, because I had other lots of other dead end conversations to work on. At the same time, a funny thing happened though, about two months later, I have some friends in my market here who are have a similar business to mind but are were ahead of me in terms of their level of success and figuring out how to make it work and they decided to offer a bus tour. So, you know, 10 or 15 of us got in a rented van bus, and they drove us around town and they showed us deals. He gave us handouts they gave us little basically verbal and written miniature case studies on all of these deals that they had done successfully.
And the last property on the bus tour was Larry’s house so we pull up in front of Larry’s house and my job just like hits the floorboard of the bus I’m like, Oh my god, I couldn’t make this work. But they, they, they did make it work. And not only did they make it work they made it work so well. There’s no case study that they’re telling us about I’m like, oh my god. So we get out of the bus and, and I pulled my friend Mike aside, who’s one of the guys running the tour I’m like Mike.
I had this property in contract. I did my due diligence I’m sure you found the same thing I did foundation problems like, how did you get this deal to work. And he looks at me and he, he basically said something that was sort of like well we did this we did that we get some seller financing we did some rap notes. There’s some substitution of collateral here and there and making margin on the financing, blah blah blah. And I just looked at him. With that was like I had no idea what he was talking with like he might as well have been speaking like Chinese to me or something because I had no clue what he was saying, and here I was, I had studied my brains off for, you know, years learning everything I could about real estate investing.
And here he is explaining something to me and I could not even follow his explanation.
And that really hit me hard.
I realized I was like, I was, I was trying to play a game that I was really not even close to being equipped to play, but I thought that I was. And this really, really, really freaked me out so after we were done you know I pulled Mike to the side. It’s like Mike Look, I gotta, I gotta admit here I’m embarrassed but I did not understand what the heck you just described, about how you did this deal and Mike said, Jeff Look, there was a whole world of real estate out there that they don’t teach it seminars, they don’t teach in the mass market books that you’ve read.
And there’s a couple reasons for that. One is, frankly, is just more sophisticated than the mainstream gurus even know how to teach.
And secondly, the mainstream masses wouldn’t understand it, even if the Guru’s could teach it.
And, and, frankly, it’s not as sexy as the ideas of just buy low, sell high quick flips and quick profits and all this that the Guru’s like to teach it, it’s not going to these concepts don’t put the butts in seats, so to speak at seminars, like, like other things too.
And he described this to me kind of In summary, and he’s like, you know basically this is a more sophisticated people oriented approach to negotiation, and a more sophisticated approach to structuring finance and he’s like Jeff, if you are serious about being successful as this at this and I think you are, if you are a successful, or if you are as serious as it seems like you are, then you need to learn this stuff. And I was like, Okay, I mean, I don’t even know what this means I don’t know what it is but frankly at this point I have no choice. I need to learn this stuff and so Mike pointed me in the right direction. He’s like here’s who to talk to.
Here’s how to start learning about this stuff. And he connected me with his coach.
And that coach then connected me with educational materials. And again, I just went down the rabbit hole because I started learning about this. It was so interesting to me. It was so inspiring and I could see, in my mind, I can see how this stuff can work. So I started learning, learning, learning and just practicing and listening over and over and over again to this stuff. And I quickly discovered that this sort of secret.
Meaning just not really mainstream understood world of real estate investing. It kind of came down to three things.
One was human relations, people skills, and knowing how to use those people skills to guide a conversation towards agreement, especially with sellers. Number two is about understanding the different ways of financing, and how it could be structured, things that I had never even crossed my mind before.
And how, if you did this, a certain way, the terms of the financing that you negotiated could be just as valuable if not more valuable than the actual property itself. And that you could actually overpay for a property, if you got the right terms, and that that could make total sense blew my mind.
And then the third thing was like the idea that there’s lots of different strategies you could use for each deal but understanding how to choose which strategy to use for each deal that would create the right mix of income today, to keep the bills paid keep the lights on at home, and long term wealth, the understanding that how to create the right mix of those was also critical.
So I’ll tell you I as I learned this stuff there was one aha moment especially that just absolutely blew my mind. And I thought about this and the idea was, what if just consider what if I was not actually out shopping for properties like I thought it was, what if what I was really doing was shopping for reasonable people that I could connect with reasonable people who own properties that I could then discuss buying from them.
But what if I was looking for people first and property second absolutely blew my mind.
So, back, back to reality. I was like running out of sort of runway, to make this work I was kind of running out of time. I have a very very supportive wife which is absolutely amazing but this is now several months without really making any meaningful money. Having voluntarily shut down and perfectly good business and so I decided I have to go all in to make this work. So here’s what I did.
I decided that I had to improve my ability to turn report into deals. So I started studying ways to further improve not only my people skills, but negotiation, in the context of seller conversations. I rewired my ideas about what negotiation even is. I learned that negotiation is not what most people think it is it’s not about compromise and splitting the difference and, but it’s about working towards creating a state of agreement. I had to, I rewired my brain about what that even meant. I decided that I needed to learn to frame.
What I wanted in the way that was in the sellers best interest. So that when I proposed it, it didn’t feel like I was asking them to do me a favor. It felt like I was suggesting something that was aligned with their own objectives that they had told me.
I started tuning into the differences between all the types of sellers and understanding that boy based on you know a seller’s age based on whether they’re an owner occupant or non owner occupant whether this is a house or a duplex, or whether they’ve owned two three years or 30 years that there were there are patterns, and I did committed to learning those patterns and sort of codify those, those patterns. I decided I had to train myself to recognize opportunity where I’d never even seen it before. opportunity that like I would have just glossed over it or totally discarded it without even realizing that there was potential there and I had to learn to see all those different types of opportunity.
And I committed to learning new sort of financial architecture concepts, learning how to make deals much more valuable based on the financing and the way I structured it, and not just the prices.
So I started practicing this on every opportunity I could. And it wasn’t easy to be honest with you, it was, it was like learning any new thing. I got a lot of no’s. Every person was different every motivation was different, you know I was kind of going in there because I was doing things differently. I sellers tend to have this paradigm about. Here’s how it works. I have a property you make me an offer. I counter you counter blah blah blah. And I was going in and like destroying that paradigm because that’s just not how I was conducting myself. And in many cases that was great, you know, they actually liked that better but in other cases people were like this is just too weird. This is just too different.
Tell me what your number is and we just did just want to cut to the chase and so I had to learn how to deal with that. I had to learn how to articulate my ideas and and different ways you know it’s for like if you’re a comedian, and you write a joke, and you need to practice the joke though so that you can figure out like the right way to tell the story and unpack the joke, in a way that people get it so you have to try that out over and over again and so I there’s a lot of a lot of back and forth trying out new things that and failing and failing and failing and finally getting something that worked.
But most importantly, as I started to do all this stuff and and face the struggles.
I noticed something. I had actually forgotten….I had forgotten about the sleazy factor. I had forgotten that I was supposed to be worried about that because I wasn’t feeling that way at all. In fact, I was feeling the opposite, I was feeling like I was truly helping people. And I was creating Win Win situations, and that was amazing.
So I felt like I had been in this dojo kind of for a couple months learning all this stuff in practicing and practicing and practicing, and all of a sudden, an amazing opportunity came up now, it didn’t seem like an amazing opportunity necessarily on the surface. As a matter of fact in the call first came in and sort of like, yeah, I’m not sure how I feel about this, but it turned out that this was a big opportunity. And it was like, I had been going to soccer practice for months, and now I have my first game. And not only is it my first game, it’s a big game. And so the the deal was was really unique and frankly, it was very complicated. I look forward to presenting you kind of a whole case study on this deal specifically because it was elaborate, let me tell you but in, in a nutshell, it was a woman who was a widow, and she owned two houses next door to each other one she lived in, and the other one was a rental. They’re both kind of fixers the rental was way more of a fixer.
It was on a busy street, but on two huge lots.
Really big like, I don’t know, let’s say an acre So between the two of them. And it was on a busy street which is not great, but it was zoned for much much much higher density like you could build like 45 or 50 units on these two lots, but together.
And one of the really interesting things about it that at ended up adding a ton of the complexity to all this was one of the properties had a billboard on it, a billboard with a major inner you know national or international media company whose contract with the seller, the property owner actually gave them rights to buy the property themselves. If she were to sell it. So at any rate by using what I had learned, practicing everything and applying it into this situation.
I got a huge, huge when I was able to negotiate to buy both of these two properties from her with heavy amount of seller financing with excellent terms.
We had to, we had to navigate all this stuff with the billboard company.
And I lined up a buyer who wanted to buy these properties from me to develop them, ultimately, and I used his money to buy them in the first place. And then immediately resold them to him. 30 days later, and when it was all said and done, I got on one day a wire transfer the landed in my bank account for $250,000.
I’ll tell you what I had never experienced that before I had certainly never experienced the feeling of that before, of that $250,000, $150,000 was profit. So we bought these properties for 300,000 resold them to the sky for 450 and the other hundred thousand dollars of the 250 was a loan from the seller at 3% for eight years, and I look forward to explain to you guys all in the future how all that works but suffice it to say when a $250,000 wire transfer hit my bank account that had like maybe $10,000 in it. To begin with, that was a game changer moment in my business, but more importantly was a game changer moment in my life. And ever since then, I’ve been dedicated to continuing to hone this art, because it isn’t art. It is a craft and it there’s no finish line in terms of, of, you know, just reaching a point where hey I’ve got it nailed I don’t have to keep working on it anymore. It is a lifetime pursuit and I’ve been dedicated to continuing to do that. And now to showing other people how to do it too.
So what was really cool for me was that I overcame my fear of being sleazy, I actually completely forgot about it because I was so engrossed in doing what I was doing and I knew that I was helping people. And I found a way to be successful in a way that felt authentic to me and I can’t overstate how important that was it felt authentic to me, and it was aligned with my self image, and I didn’t feel sleazy at all.
And I saw that I was really helping people and I was creating value for them and that felt fantastic. I started to see myself in a much bigger light, you know, I used to kind of just see myself as like a single family kind of guy you know he buys houses maybe duplex here there, but now I see myself in such a bigger way I’ve become like a much more confident person. I can sit down in the living room of somebody who’s who wants to sell me their $2 million apartment building and not freak out about that and actually be comfortable with that conversation so I’ve just experienced a lot of personal growth in that as well.
You know, I’ve always felt like my calling was to be a champion of the idea of of defining and designing the life that you want to have not just following the normal societal American process of go to school, get a job get benefits retire, you know, but to to chart your own course and design the life that you want, and then build that life, using the tools of entrepreneurship, personal finance and real estate. But up until just recently, I never really felt like I was authentically living that. But now I am and I’m so excited to be able to share this kind of stuff with you guys.
So the end result of all this for me is that this is a whole school of thought and philosophy that I feel like I’ve cultivated now by synthesizing all this stuff that I’ve learned, and it’s what I call thoughtful real estate entrepreneurship.
And the way that we play the thoughtful real estate, entrepreneurship game is by what I call the living room game. And so we’ll talk so much more about that in upcoming episodes but let me just tell you that. Five years ago, I was on that bus tour, and I had that moment of like what the heck. I can’t believe that I don’t understand what’s going on here I thought I had studied everything there was to study, but five years later, I have five x, my own network. And as weird as it sounds kind of as a sort of low brow as it feels to me to sort of kiss and tell so to speak about finances, it’s, it’s literally created millions of dollars of net worth, and equity. For me, I now have a portfolio of great excellent long term, hold real estate that I’m super proud of. Honestly, that that portfolio just crossed the $10 million mark this week as a matter of fact, I have happy sellers.
And I have happy sellers who become the beneficiaries of promissory note so I’m paying them via seller financing every month. And we have excellent relationships were, you know, I feel like they’re friends and we when we get together, it’s, it’s warm, and I really love that because that feels authentic to me. I have a full time team of three other people plus myself. And we’re doing deals now in single family multi family commercial properties. And we almost never buy properties through agents and only sometimes even work with banks so we’re just doing things face to face with real people. And that’s really cool.
So let me bring this back to you real quick to put a bow on this.
This journey that I just sort of just described to you, has been one of me finding my voice, finding my own way of doing things, that is both successful and effective, but feels authentic to me.
And that is what this podcast is about. This podcast is about helping you find your own voice because I’m guessing. If you’re listening to this. You feel like you haven’t quite hit yet on the magic formula that is getting you the results you want and that feels true to who you are.
And my goal here is to give you new ideas, new perspectives and things that will help you go on your own journey to find that exact voice for you because when that clicks. When you find that voice.
And you see that it’s not only working, it’s getting you deal with it’s making your money, and it feels good. That is an amazing thing and I want that click for you because I know how it felt for me.
So, in closing guys before we wrap up today just a few important quick notes.
One thing is that we’ve created a free PDF guide that you can download and it’s just for the listeners here of Sleaze-Free Real Estate Investing. It’s called the “five critical mistakes that make most real estate investors accidentally lowbrow.”
So if you’d like instant access to that PDF guide, just head over to http://pod.thoughtfulre.com Pod as is in podcast http://pod.thoughtfulre.com. So thank you for listening to Sleaze-Free Real Estate Investing. On the next episode, we’re going to be discussing the difference between real estate investing in real estate entrepreneurship, which is an important distinction to me again please do yourself and do us a big favor by hitting the subscribe button in your podcast app, and that way you’ll know when the second to the next episode is released. Reminder you can grab the show notes, including links and all, all sorts of things for this episode at WWW.thoughtfulre.com/e1.
Until next time, this is Jeff from the Thoughtful Real Estate Entrepreneur, signing off. Thanks for listening to Sleaze-Free Real Estate Investing.
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