Today, my guest is Lauren Hardy. Lauren is a real estate investor with a people first approach to business, investing in hundreds of properties in our career, Lauren has the unique reputation of being a virtual investor having not lived in many of the states she's invested in. And in just a minute, we're going to speak with Lauren about how virtual investing differs from investing in your home market, and how to determine the right market for you.
I'd like to ask you, Lauren Hardy, what is the BIGGEST RISK?
Lauren Hardy 41:31
For wholesaling houses, specifically, the biggest risk, I would say I've seen a lot of people do this would be spending too much money on marketing. And by not making any money. I mean, just too much money and overhead expenses, not enough profit, not enough revenue. I see that a lot. There's a lot of people that will listen to a podcast like this and get real excited. And then they'll start a TV ad and spend, you know, $5,000 a month on a TV ad, but they've never closed a deal before. And they don't they don't know how to put a deal together. They don't know how to comp the house out. They don't know how to talk to a seller. They you know, they have absolutely, you know, just don't know what they're doing. And the next thing you know, is they could they go broke. So I think it's the overhead expenses. When you're just starting out. People spend a lot of money trying to get into wholesaling houses, they send out direct mail campaigns, a big one was direct mail campaigns, less people are going straight for TV, but direct mail campaigns, they'll they'll hear on YouTube university to send out you know, 5000 postcards a month, and some of these people they don't have that kind of money to play around with but they'll do that and they'll do it for six months straight. And they'll not realize you know, this isn't going anywhere and you're not just going to get that one deal that got you $100,000 at the end of six months, but they keep going thinking that that deal is going to come and then they just end up you know broke. So I think that's the biggest risk right there.
Today, my guest is Michael Zuber. Michael is a former Silicon Valley accounting professional turned full time real estate investor and the author of one rental at a time where he promises if you can get to four doors, it will change your life. Additionally, he he hosts the every day, I want to say the everyday daily YouTube channel, one rental at a time, where he dispenses tons of useful info investor knowledge by discussing current events and their effect have effect on the real estate market. And he also has a panel of real estate experts. He interviews regularly for additional knowledge. And he's also got an online course. And he's got a challenge to get to 500 deals of which I have participated in here and grateful member of his audience there and I can't encourage you enough to check him out. And in just a minute, we're going to speak with Michael about rentals and rental market.
J. Darrin Gross:
I'd like to ask you, Michael Zuber, what is the BIGGEST RISK?
So the biggest risk? And again, I asked myself this all the time, right? Because I look at it, I go, what is my biggest risk? And if I can, if I can survive the downside, right? up through all those things, those that I think about it all the time. So in my portfolio, my biggest risk that I've been working on all year is variable interest rate risk. I have commercial loans, I own apartment buildings. And those loans reset 357 10 years, depending on what you have. And over the last year, I have feared that I could see at point of refi, where rates, you know, I had a rate of three and a half. I was like, what happens if this is seven, seven and a half? Right? So what I had been doing actively over the last year or so is taking all of my loans and looking for ways to get 30 year money. One thing you can do because there's now for the first time, really in the last couple years are these vendors called non qm lenders, non non qm lenders. And I work with a lender who has taken all of my apartment risk and allowed me to get 30 year money at 3.99%. So it's not a Fannie Freddie loan, it's a 3.9 non qm lender. So I've been I've been actively working to get all of my apartment buildings, and I'm even paying prepayment penalties on one of my loans. Because I I'm deathly afraid of interest rates shooting up. And if that happens, of course, apartment buildings, if rates go to seven cap rates, gotta go to what 910 and then the valuation calls and they're gonna say, hey, you're now in technical default and you got to cut a big check. That freaked me out for a while. So I've been working very hard to Take all of my just double rate mortgages on apartment buildings and go get 30 year money even if I have to, even though my payment goes up slightly now, I'm okay with that. So that was the biggest one for me. Cuz I looked out years ahead and go, wow. Because again, I've been through the last crash, what caused the last residential crash? It's all those adjustable rate mortgages that popped up that and their payments reset. I looked at that going, Oh my God, if that happens to my apartment buildings, and then the cap rate goes up and the value is cut in half. You know, where do I go? So that was a big one for me. So that's, I'm working on my last one right now.
Today, my guest is a returning guest and a favorite. His name is Vinney Chopra. Vinnie is a multifamily syndicator, Senior Living care facility developer, and also a mentor for investors and an author and a podcast host and on and on and on. And he's multi talented. And in just a minute we're gonna speak with Vinney about the opportunities in multifamily and also senior living.
Vinney, what do you see is the biggest risk?
Vinney Chopra 32:17
Wow, that's a very good question. You know, they're not see that, as a businessman, any entrepreneur should always, always always get the insurance, you know, to come back the risk, because we syndicators are using other people's money, you know, to get into LLCs, and buying these properties and all that, if there is a slip and fall, or if the contractor came on the property, not properly insured. I just believe that we need to have the highest amount of insurance and umbrella insurance at the same time to directors insurance, I've had that in the past cyber insurance I've had that. I've been, you know, before big lawsuits, but I just kind of walked away from them, because I had people like you, you know, who really took care of and they were able to write good policies. Were they settling mediated and settled? You know, with the, with the plaintiffs, I think, right, you know, defendants via the defendants, right, ya know, all those things happen in life. So we should really always be looking around us what can go wrong, right. Even in the due diligence side, when you said, you know, risk involved, a lot of risk is there because we get the key to the property, then it's our choice. I mean, it's our baby, no matter what we did. So we need to really mitigate the risk, I call it you know, by taking proper measures about like, I talked about, like sewer lines, running the cameras through, and then, you know, foundation people, termite people to come digging deeper into, you know, if there is some termite and mold and all that stuff. So, no, those risks are there. As business people, we need to, it's the small amount we pay, it's an investment. That's what I say. I mean, one time in my life, I was paying 1.2 million 1.2 million insurance premiums for by so many properties. Yeah, yeah. You know, so that way, it was definitely definitely needed help, you know. So the risk factor is very much there, and especially for us syndicators, and we need to really listen to people like you. Definitely.
Today, my guests is Stephanie Walter. Stephanie is a capital raiser syndicator and the CEO of Erbe Wealth. She recently retired and sold her insurance agency of 16 years by following the key principles she's learned from her wealthy investors. And in just a minute, we're gonna speak with Stephanie, about how to unlearn what we've been wired to think about money.
J Darrin Gross
Stephanie Walter, what is the BIGGEST RISK?
I think you know what? That's a good question. I think that the biggest risk, if it comes down to people investing in syndications is I guess, really understanding the team of people that you invest with? Seeing that they have a track record. I actually have, on my website of, I think about 30 questions that I get from almost every investor, and they involve risk and how to mitigate it. And so that's definitely a good, a good, you know, spot to start. I think the largest risk that I've seen personally of you know, people who have invested in syndications and kind of maybe not done so well, the last few years, I think, and knowing your market, or at least, being with people that really understand the market, that they're working in. That that I think, is huge. Because, you know, we've seen dramatic differences, like I said, between say, a B property, how it's performed through COVID versus a C property. As far as rent collections, we've seen differences in the way that you know, that these properties have done in Florida as opposed to say, Indiana You know, there's just there are definite you know, things about these these different markets that either you need to trust the you know, team that's bringing you these deals, but these are there are risks, you know, and you're doing your due diligence is is definitely important.