Real Estate FIRE w/ Alan Corey #806

We love real estate! Any long-time listener of the podcast knows that we’re fans of investing in real estate. We both have a handful of rentals and a decent chunk of our financial success is due to those houses! That being said, we also approach the conversation with a degree of reservation because we don’t think it’s for everyone- it’s not nearly the source of passive income like many would lead you to believe. Not to mention we happened to dip our toes in the waters at a historically great period of time. So we’re nuanced, but our guest today is NOT! Here to preach the real estate gospel is Alan Corey who is all-in: he’s a realtor, author of A Million Bucks By 30 as well as House FIRE, which we’ll be discussing today, and of course an investor himself. Alan is a self-proclaimed ‘real estate maximalist’ here in our wonderful city of Atlanta, and we’re going to talk about all things real estate- the current state of the market, why first time home buyers shouldn’t wait, why he doesn’t care about interest rates as an investor, the role of leverage when investing in real estate, if umbrella insurance is enough to mitigate risk, how to think about investing in an Airbnb, vacation rentals, and more!

 

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During this episode we enjoyed an Oost by HighGrain Brewing- a big thanks to Mike and Kristy for donating this one to the pod! Please help us to spread the word by letting friends and family know about How to Money! Hit the share button, subscribe if you’re not already a regular listener, and give us a quick review in Apple Podcasts or wherever you get your podcasts. Help us to change the conversation around personal finance and get more people doing smart things with their money!

 

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Episode Transcript

Speaker 1 (00:00):
Welcome to How to Money. I'm Joel and I am Matt,
and today we're talking real estate fire with Alan Corey.

Speaker 2 (00:25):
That's right. Yeah, So any longtime listener of the podcast
knows that we're fans of investing in real estate. We
both have a handful of rentals and a decent bit
of our financial success is because of those properties, because
of those houses. But we also approach the conversation with
a degree of reservation because we don't think it's for everyone,

(00:46):
first of all, but also we got into the market
at a historically great period of time, and so we're
nuanced when we.

Speaker 1 (00:54):
Talk about real estate.

Speaker 2 (00:55):
But our guest today is not so here to preach
the real estate go is Alan Corey, who is all in.
He's a realtor, he's author of House Fire, which we'll
be discussing today, and of course he is an investor himself.
Alan is a self proclaimed real estate maximalist here in

(01:15):
our wonderful city of Atlanta, and we're going to talk
about all things real estate. I also heard that he
wanted to be a stand up comedian in a previous
slave show, so maybe we'll talk about that a little bit.

Speaker 1 (01:25):
But Ali, we.

Speaker 2 (01:26):
Really appreciate you joining us on the podcast today.

Speaker 3 (01:29):
Glad to be here. You're right, real estate is not
for everyone. It's only for people who want to make
a lot of money.

Speaker 1 (01:35):
There's the first is the stand up comedian. I can
tell Alan the first question we ask everyone who comes
on the show. Matt and I. We splurge a lot
on craft beer. Even while we're being intentional, we're saving
and investing for our futures. What's that for you? What
do you like to suplore? John?

Speaker 4 (01:52):
You speak craft beer?

Speaker 3 (01:53):
And then I turned forty, and then my gut was
telling me that I can't have I pas anymore.

Speaker 4 (01:58):
And that time I got.

Speaker 3 (02:01):
Really into flat caps, which are basically the hats that
Sherlock Holmes wears, and the only reason I've it. I'm
fighting every urge. But when you hit about forty five,
which is my age, now you start turning into your father.

Speaker 4 (02:17):
And it's just.

Speaker 3 (02:18):
Genetically predisposed that I'm going to wear these hats that
he wears. What my grandfather where and my great grandfather.
I don't know what it is. I just can't stop
buying them, and my wife is going crazy that our
closets getting filled with these caps.

Speaker 4 (02:32):
I end up buying one a month.

Speaker 1 (02:33):
For tweet and stuff. For that, I'm guessing.

Speaker 3 (02:37):
You get the plaid, you get the tartan, you get
the tweed, you get the Saint Patrick's themed one, you
get the you know, there's a new holiday.

Speaker 4 (02:46):
I need a new cap.

Speaker 3 (02:47):
And you know, my wife's like, you look forty years
older when you wear that, and I know I do.
It's just I cannot stop myself. I don't know what's
going on.

Speaker 2 (02:57):
So it's not like I thought the direction you're going
with it. I thought you were gonna start talking, You're
gonna mention hair loss or something.

Speaker 1 (03:03):
Yeah, yeah, yeah, but.

Speaker 2 (03:04):
You're saying that just truly it's in your DNA, not
that you're going to lose your hair, but that you
are turning into your father and your grandfather.

Speaker 4 (03:10):
Yeah.

Speaker 3 (03:11):
And my dad's really into you know, the ancestry and genealogy.
And we're from Ireland and Scotland and England, uh, you know,
but we've been in America as far as we can
trace it back for over two hundred years. I just
can't shake this this flat cap thing. And it's all
my ads.

Speaker 4 (03:29):
On every social media.

Speaker 3 (03:30):
They know that this is my weakness and that all
the ad I get, and I just keep buying them.

Speaker 1 (03:36):
So I just hope you're sitting on the front porch
smoking a pipe on a rocking chair, also telling the
kids to get off your lone while you're wearing it.

Speaker 3 (03:42):
Yes, then then I've I've metaphorphed into my dad and
cycle continues to my son.

Speaker 2 (03:48):
I do feel like there's a way you could. You
could kind of change the script and what people expect.
Alan as long as you're not walking like clasping your
hands behind your back while you shuffle down the sidewalk,
because if you do that, I don't know, it reinforces
the character I have.

Speaker 3 (04:03):
You know, perk. I have solved three crimes since this,
so you know it comes with some perks.

Speaker 1 (04:10):
Matt would be happy to be your doctor, Watson, I'm
not gonna handle that.

Speaker 2 (04:13):
So even though you're here in the city, we've ever
we've never actually met, we've never hung out. This is
truly the first time we've ever talked, and so we
would love for you to share a bit about your history,
like tell us about how you became a super saver,
like when you're first starting out, because if I understand
you were making something like forty K. You're living in
New York, but you were investing a massive chunk of that.

(04:35):
I'm assuming you weren't living large. So I want to
kind of hear the I guess the Alan Corey origin
story here.

Speaker 4 (04:42):
Yeah. Sure.

Speaker 3 (04:42):
So I moved to New York with dreams to be
a comedy writer. And so to be a comedy writer
you basically have to be a stand up comedian and
then hopefully you're funny enough that people hire you to
write some jokes for them.

Speaker 2 (04:56):
So the next Liz Lemon, Yes.

Speaker 4 (05:00):
Yes, exactly. And so because in my head, I was like.

Speaker 3 (05:05):
Entertainers are rich, and I had no entertaining skills. I'm
not an actor or singer or dancer or anything like that.
But I was like, well, I was class clown in
high school. Maybe I can turn this into a lucrative
side gig or a full time gig. And so I
moved to New York City. I found a tech support job.
And this was the year two thousand. It was the

(05:26):
dot com boom and everything right right after that actually,
and and I was like, let's live the fire life,
the lean fire. This was before all that existed. But
the cheapest place I could find was an illegal sublet
in the Spanish Harlem project. So you know, I had
a roommate who lived in the projects and he gave
me his room for four hundred bucks a month, which

(05:46):
was great. And then I just started reducing my expenses everywhere.
I'd save on food by going to the bodega in
Spanish Harlem and buying ram noodles for thirteen cents each
if I bottom in bulk.

Speaker 1 (06:00):
That's what I'm talking about.

Speaker 4 (06:02):
Yeah, yeah, And.

Speaker 3 (06:02):
Then I'd go to the bakery as they were closing
and about to throw off away all their fresh break
baked stuff for the day and get them at fifty
percent off or sometimes free. And I would just try
to cut all my expenses. And I even went to
my HR person and said, listen, I want you to
put fifty percent of my income or whatever my take
home pay into this bank account that I use every

(06:24):
single day, and the other fifty percent in this one
way across town that is really difficult for me to
get to. And this was pre online banking and all
that as well. I mean, I'm not that ancient, I'm
forty five, but you know, twenty years ago this was.

Speaker 1 (06:38):
This was what were the horse and carriages like in
New York, exactly, exactly, Well, I pass.

Speaker 2 (06:42):
Changed a lot in the past twenty twenty five years,
but no, I honestly, just to interrupt those for a second,
I love that you set that barrier between you and
your money to make it more difficult, because I assume
you're socking that money away and hopefully you were planning
to do something with it.

Speaker 4 (06:57):
Right.

Speaker 3 (06:57):
Yeah, Well, so everyone I felt like everyone in New
York was wealthy. Like you see the nice restaurants, you'd
occasionally see a celebrity, and you see people driving and
even taking cabs. I'm like, look at that rich person
who can take a cab? And so I was like,
how do they do it? And so I went to
the library because pre podcast, pre social media, pre YouTube,
all that stuff, and I just bought every book I

(07:18):
could on wealth building and stocks and everything. And what
I realized is with stocks, like I felt like I
was gambling it was like a thirty year horse race.
But real estate, I felt like I could control it
and that I could, you know, determine what I was
going to buy, how much I was going to buy
it for, how much was going to put to renovate it,
how much I could rent it for what my financing

(07:38):
terms are. I felt like I had a little bit
more control, a lot more control, actually, and so I
sort of reverse engineered that. You know, I was burning
the midnight oil going working my nine to five and
then I would go to the comedy club still three
o'clock in the morning. And it wasn't sustainable. It was
terrible at both my day job and at comedy. But
I was like, man, if I could just buy one
piece of property a year for five years, then I

(08:01):
could probably replace my day job income. And so that's
where I went to that bank account that was collecting
fifty percent of my take home bay every single year,
and I would just say, whatever's in that, that would
be my down payment.

Speaker 4 (08:13):
For a property.

Speaker 3 (08:14):
And every year I would say fifty percent and whatever's
in that, you know, let's apply it to That was
my get out of like corporate plan in five years.
So that first year I had ten thousand dollars saved up.
It was right after nine to eleven. Everyone's trying to
leave New York. You know, Alan, you're an idiot, You're
trying to buy a real estate. You know, everyone's so
fearful it's the worst time ever to ever buy a

(08:35):
real estate. You know, you don't know what you're doing.
And I found one property that I was one hundred
thousand dollars in Brooklyn. I had never been to Brooklyn before,
and I went to Brooklyn and homeless people were right
outside all this stuff that.

Speaker 4 (08:48):
You see in movies.

Speaker 3 (08:49):
And I was a naive kid from Georgia. But I
was like, I got to buy it. This is the
only property I can buy. It's a one bedroom apartment.
And you know, if things go bad bad into the projects,
like I'm already in the projects, like it can't get
any worse. I'm buying living in the projects whatever, right,
or I have tremendous upside if I can, if I
can make this work, like I thought it was going

(09:10):
to work. And what I did is I bought it
and it was a big living room and I was like,
I'm not going to have any people over. I don't
have any friends, so I.

Speaker 4 (09:20):
Uh, I'm working big heavy. Yeah, exactly.

Speaker 3 (09:24):
In New York, no one ever goes to your apartment.
You meet in a bar or a restaurant or everything.

Speaker 4 (09:27):
Like you have no idea what.

Speaker 3 (09:29):
People's lifestyle is because they all live in Jersey and
Brooklyn and Bronx or whatever. But I just took a big,
heavy curtain and sectioned off the living room and I
rented that out to a friend of mine, another comedian,
And that was like house hacking before else I existed.
And that would pay off my mortgage. Right, So I
went from paying four hundred bucks in the projects to

(09:51):
paying nothing and I own it, yes, And I was like, Okay,
there's something to this, right, And then the next year
I was able to save up fifteen thousand dollars on
January first, and so then I bought a duplex and
then I just you know, saved up some more money.
And my third property, I did a flip, and I
didn't have enough money, but I found the deal and

(10:13):
I found my next door neighbor was a contractor and
he would work for free for equity. And then the
only person that I thought was rich or knew was
I was dating a girl at her time at the time,
and her dad was a lawyer, and I was like, well, he.

Speaker 4 (10:27):
Must be rich. He has a job in New York City.

Speaker 3 (10:29):
He's a lawyer in New York, so he must be rich,
you know, I asked him if he would pay for
the down payment and you know, twenty percent down on
the renovations here on this deal that I found.

Speaker 4 (10:38):
He said sure, and.

Speaker 3 (10:39):
We bought this property in Red Hook, Brooklyn, which at
the time no one knew anything about, for four hundred
thousand dollars. We put two hundred thousand dollars into it,
and we sold it for one point one million dollars
a year later. I was twenty five years old at
that time, and the buyer was Barbara Corcoran from Shark
Took and that gave me the boost of confidence, like, wow, okay,

(11:00):
I found a deal, I renovated it, and Queen of
New York City Real Estate bought it for your own
personal investment. I'm doing things right. And I was like,
all right, I don't need to do comedymore. Let me
let me lean and do real estate there.

Speaker 1 (11:14):
That's cool. Well, yeah, I love that combo of like
early sacrifices. There's I think there's a lot of stuff
that we can glean from that. The fact that you're
kind of divorcing yourself from that money until you're ready
to invest it. I love that. Yeah, siphoning it off
elsewhere so it's not a temptation for you, and I
want to talk a lot more about We want to
talk a lot more about investing on this episode. But
you're you're not just an investor, you're also an agent,

(11:35):
and so in spring is just the hottest time for
the housing market. What are you seeing right now? I'm
curious because there's a lot of a lot of our
listeners are interested in buying a house. Maybe they've put
it off because what's happened over the past couple of
years with rates and prices. Do you are you starting
to see things moderate, things chill out a little bit
in the housing market or yeah, I'm curious to hear

(11:55):
your perspective.

Speaker 3 (11:55):
Yeah, so you're not going to like this or your
listeners are not going to like this, but it it's
hot and everything's a bidding more.

Speaker 4 (12:02):
If you have a property that doesn't.

Speaker 3 (12:04):
Need any work, it's going to go under contract with
multiple offers and there's not going to be comps that
support it. That the data just doesn't make sense. But
that's what's happening. Why is that happening? We have a
housing shortage. Has the housing shortage improved since last year? No,
the year before that, No, the year before that. No,

(12:25):
we are twenty years behind on building to match the
demand that makes prices go up regardless of the interest rates.
People want to wait, and they're going to wait. Oh,
let me save up twenty thousand dollars. You know, I
don't like the homes that I see right now. If
I save another twenty thousand dollars, I can go up
a price point. I can move my budget from five

(12:45):
hundred thousand to five hundred and fifty thousand dollars. It
doesn't work that way with inflation and the housing demand.
When you save up twenty thousand dollars, that house you
looked at five hundred thousand dollars is now five to fifty.
You're just buying the exact same house a year later
for more expensive price, And so you can't outsave inflation.
And you know, so you have money in your bank,

(13:05):
but inflation is eating away at that and you're trying
to outsave it. You're trying to outsave the rising housing market.
It's one of those things where it's never a good
time to buy real estate in that if you're waiting
for the perfect scenario of interest rates and price point
and what you get combined with it's always a good
time to buy real estate because tomorrow is always going

(13:28):
to be worse than it is today. You know, every
real estate investor, everyone who's ever bought a house, they're
always like, Wow, I'm glad I bought two years ago.
You know, ask them. You know, I've in real estate,
in real estate for twenty five years. Every single person's like, man,
I should have bought two year ago. I should have
bought two years ago. There's just not enough homes to buy,
and so it's it's tough, and so there's two ways

(13:49):
to look at real estate. Is whether you're looking as
an investment or a primary residence. But a primary it's
an emotional decision. Sometimes many times the numbers don't make
sense in terms of an investment, but you're buying for
life lifestyle. You want to be close to your work
or school district, or you just like the walkability or
close to the interstate, whatever it is.

Speaker 4 (14:09):
That's fine.

Speaker 3 (14:09):
You can pay extra and pay a premium for those
things because that's for your lifestyle and that brings you happiness.
But you can't always look at your primary resident is
going to be the best investment for you, and real
estate investors look at property differently. They look at it
as a spreadsheet decision, not an investment decision, and so
they might like the uglier house or the one that's
in the floodplain. And I always like to say, you
want to buy the you want your house to be

(14:31):
ugly in the street and sexy in the spreadsheets, and
so that's what makes a good investment. And typically the
opposite is true for primary where it's sexy in the
street but ugly in the spreadsheet.

Speaker 2 (14:42):
Yeah, you wanted to have that curb appeal something that, Yeah,
your family is excited to come home too. But I mean,
I totally agree with what you're saying as far as
the overall trend of real estate. I mean, it's one
of those things that continues. It's almost like the stock
market in that way, like, yes, there are little fluctuations
here and there, but generally speaking it's up into the right.
But mortgage rates are crazy high compared to where they

(15:04):
were years ago, and they have a massive impact on
your monthly payment. It has a huge impact on individual's
ability to afford a home or not. And so I'm curious, like,
I know it depends on from market to market, but
how have you seen folks cope with that. And I'll
say where we are where we're not down in the

(15:25):
city and the small neighborhoods around central Atlanta like you are,
but we are seeing things slow down a good bit here.
There is not as much mobility because it seems like
a lot of folks are locked in. They've got folks
are hanging on to the three percent mortgages because they're
seeing what move into something at six and a half
and seven percent, what that's going to do to their payment.

Speaker 3 (15:45):
Yeah, that's as adding to the housing shortage.

Speaker 4 (15:48):
Right.

Speaker 3 (15:48):
People don't want to sell because they have a three
percent mortgage, or if they do need to move because
of a birth in the family or a death, or
a marriage or a job transfer, they'll keep that as
a rent because the interest rates so low, and so
that adds to the housing shortage. But if you have
to move, right, you have to get into the school district,
you do get a job transfer, you got married, or

(16:09):
whatever it is you have to move, you have like
ten choices to choose from within your buybox, whether that's
your zip code and your price right, And so then
that's where these bidding wars go nuts, because you have
to move, you don't have a choice. A real estate
investor doesn't think that way. A real estate investor will
buy and get a thirty year fixed and hold it

(16:32):
until it's the right time to sell. For instance, I
invested all through the real estate the great financial crash,
and my property value went down fifty percent, but I
wasn't selling. And when people aren't buying homes, that actually
increases the rental demand. There's actually more renters because they're
not interested in buying homes because the lenders at the
banks aren't giving money or the interest rates are so high,

(16:52):
so there's actually more renters. And then even though my
property value went down, I'm not selling. I'm just waiting
and renting it out and collecting cash flow month to
month until it is a good time to sell back
when interest rates are low again or there's you know,
high demand, and I can sell it there's been a
lot of appreciation on my property, then I sell it.
So that's what's great about real estate investing is you
don't time the market. You just wait out the market

(17:15):
until you want to sell. And but primary investing is
you hear the horror stories and they make the headlines
because they're they're just time, you know, independent.

Speaker 1 (17:23):
Yeah, yeah, that's a that's really important. Actually, I think
your history owning rental real estate through the Great Recession,
because yeah, you can write it out if if you
have a long long enough time rise, and then if
you have enough cash reserves. I want to know too, Like,
let's let's pivot, let's specifically talk about real estate investing,
Like what's your philosophy there? Do you you think of

(17:46):
it more like buying a small business? Right? And then
how do you how do you talk to people who
are like I'm interested, I'm curious about real estate investing,
but I'm just I'm not sure if it is for me.
Maybe I'm not. I'm not quite as gung ho as
you are. Alan, Maybe I should keep going with thein
k in the roth I rate kind of like Matt
and Joel talk about too. Why like what do you
tell folks when they're when they're kind of debating the two?

Speaker 3 (18:06):
Yeah, So the number one way to get wealthy, like
really really wealthy is through leverage. Leverage is borrowing money
and making more money with that money. That's what a
mortgage does. You can't buy stocks with mortgage. It's very safe.
Every investment is a mix of you know, the risk
heer it is, the more money you make. But what's

(18:26):
great about real estate I think is actually safer than stocks,
and you make five times as much money as stocks.

Speaker 4 (18:32):
So, for instance, let's say you.

Speaker 3 (18:33):
Have one hundred thousand dollars and you buy one hundred
thousand dollars in stocks one company and it goes under,
you lose one hundred thousand dollars. You can also buy
one hundred thousand dollars of a house right by buy
one house for one hundred thousand dollars. It can be
out of state or whatnot. A property manager in a
rural town where homes may be more affordable than where
you live, and you're making one thousand dollars a month

(18:57):
an income, and then let's say you take that one
hundred thousand dollars, you rent it out for a thousand dollars,
and you know, let's assume after all expenses, you're taking
home one thousand dollars. Now, if that burns to the ground, okay,
well I could still sell the land, right the lot's
probably twenty thousand dollars. You can't do that with stocks.
So in some ways, you're a little bit protected. But

(19:17):
I like like to take a mutual fund approach to
real state. Similar to stocks. You wouldn't put one hundred
thousand dollars in stocks. You would probably spread it around
in mutual fund, which buys hundreds and a bunch of
different stocks. I do the same thing. Let me take
that one hundred thousand dollars and let me put it
is five different down payments on five different one hundred
thousand dollar homes twenty thousand year, twenty thousand year, twenty

(19:38):
twenty twenty. And now I have a mutual fund of houses.
So what's great about that is if one burns down
to the ground. You know, let's say after mortgage, I'm
making two hundred bucks, tw hundreducks, two undreducks to undred,
I'm still making a thousand bucks a month. One burns
to the ground. Oh well, I'm making eight hundred bucks
a month.

Speaker 1 (19:55):
Right in that scenario. Let's hope you have insurance.

Speaker 4 (19:57):
Yeah, yeah, yeah, you have insurance.

Speaker 3 (19:58):
Yeah. If you have a mortgage, you have to have sure.
So let's maybe don't be so drastic. If I have
one house, let's say I raise the rent fifty bucks. Great,
I'm making a thousand and fifty bucks a month. But
if I have five houses and they're all exactly the same,
and I raise the rent fifty bucks over time because
of inflation or whatever, well now I'm making two hundred

(20:19):
and fifty bucks a month. I've scaled my wealth up right.
If I do nothing and I never raise rent and
just wait thirty years, if I have one house in
thirty years, maybe that one hundred thousand dollars house is
one hundred let's let's say one hundred and seventy five
thousand dollars house. But if I have five, I have
five houses that are paid off that are one hundred

(20:39):
and seventy five thousand. So that five x my wealth.
And if five x is my rental income, if I
raise rent twenty five thousand, if one goes down, if
one is vacant, maybe doesn't burn to the ground, I
just can't rent it or whatnot, then the other four
booie it like like a mutual fund. And then I say,
every house comes with a lottery ticket, hidden lottery ticket.

(21:01):
I was investing in Brooklyn and different neighbors in Brooklyn,
and all of a sudden, Brooklyn blew up and became
the next hot neighborhood, not because of anything I was doing,
not because i'd need foresight or I was smarter trying
to time the market. But if I had one property
and I kept trying to pay off that mortgage and
I wasn't trying to scale and leverage and buy more properties,
I wouldn't have gotten quote unquote lucky.

Speaker 4 (21:22):
And so there's all these things that sort of happened.

Speaker 3 (21:24):
If you borrow money and you put it to go
make more money, and the more properties you buy, the
less risky it is, and the luckier get and the
more money you're gonna make.

Speaker 1 (21:34):
Sure.

Speaker 2 (21:35):
So yeah, the mechanics behind it certainly makes sense. But
do you think that this is something that everyone out
there should consider, Like should everyone out their own rental
real estate? Because it's when you are just looking at
the numbers, you're like, oh, man, who wouldn't do that
with say it was a spare twenty thousand dollars, which
I'm not sure I everyone has to spare twenty thousand
dollars sitting around, but even.

Speaker 1 (21:54):
And I'm not sure houses cost one hundred thousand dollars.

Speaker 2 (21:57):
But so I guess with all that in mind, like
there's a an element of time that's required to manage
these as well. It's got like a part time job
element to it. It's not nearly as passive as a
lot of real estate influencers want to make it sound.
And whether it's managing renovations, showing the property, screening tenants.
I guess what would you say to somebody who is

(22:19):
assuming that it's going to be a set it and
forget it kind of deal.

Speaker 3 (22:22):
It wasn't ever a setate forget it until you get
to a certain scale.

Speaker 4 (22:25):
And when you have, you know, you can.

Speaker 3 (22:27):
Get property managers. You can find one hundred thousand dollar properties.
I mean, as of four years ago, I was buying
properties for thirty thousand dollars just an hour south of
Atlanta in a town called Griffin, Georgia, and I recently
sold them all for sixty thousand dollars each two years ago,
and they're probably eighty one hundred thousand dollars now.

Speaker 4 (22:44):
So they exist.

Speaker 3 (22:45):
They just might exist in your hometown and you're not
looking for them, so you don't really see them because
they're not in your neighborhood. But what I would say is, yes,
it's going to take a little bit of work. It's
leveraged work. Going to have to leverage and build the connections,
build a network. I always say, find a rock star
in the town you want to invest in, whether that's

(23:06):
a rockstar agent or rockstar property manager, a rockstar lender,
because rock stars hang out with other rock stars, and
you just leverage their network and say, hey, I want
to invest in real estate in this town. You're a
rockstar in this town, can you help connect me and
to the other players, and you can just leverage their network.
It's much easier to do it that way. But if
you have twenty thousand dollars. This is my sort of

(23:26):
approach to my book House Fire, where it's should you
ask me and should everyone do this? And it's like, well,
if you like math, you should do it. If you
trust math, you should do it. Because I look at
my internet bill and my internet phone bill combined is
one hundred and fifty bucks a month. And if I
follow typical fire movement, which is fire, you know, financial independence,

(23:47):
retire early. I know you've talked about this plenty of
times of your podcast. It says it takes twenty five
times or your annual expenses of that bill and as
long as you have that in stocks, and you withdraw
four percent each year, then you've got that. And so
that would be let's see, one hundred and fifty dollars
bill would be eighteen hundred dollars a year, forty five
thousand dollars in stocks. As long as I have forty

(24:08):
five thousand dollars in stocks, I can pull out four
percent of that, which is one hundred and fifty bucks
a month, and that internet bill's paid for my life.
That sounds crazy to me, Like, yeah, of course, if
I do that for every bill in my life, I
have to be a millionaire. And that just seems too ambitious.
I will never get there, and that then I'm living
on a constrained retirement. So instead, I was like, how

(24:29):
can I apply this to real estate, this fire method,
because I'm not doing that. I'm done living below my means.
I did that in my early twenties. I'm not going
to do that anymore. When what I just what I
took was half of that, so forty four forty five
thousand dollars, half of that's twenty two thousand, five hundred dollars.
I went and bought these hundred thousand dollars properties fewer
than one hundred thousand dollar pperties. I built up a

(24:50):
portfolio of fifty single family homes, all under one hundred
thousand dollars. And what I realized is if I put
down twenty percent on one hundred thousand dollars property, and
then there was two thousand, five hundred dollars of closing costs,
that was my twenty two thousand, five hundred dollars. I
could cash flow after expenses, property manager vacancies, capex repairs

(25:10):
like a big roof, and things like that, I could
cash flow one hundred and fifty bucks.

Speaker 4 (25:13):
So all of a sudden, I have right away.

Speaker 3 (25:16):
I don't have to wait until I save forty five
thousand dollars and withdraw four percent. I took twenty two thousand,
five hundred dollars, put it in the market, and it
would kick off one hundred fifty dollars to pay my
internet phone bill. And I was like, Aha, that's my
AHA moment. And so then I went down to my
next bill. Wow, if I collect all my utility bills,
my gas and electric, you know, that's probably one hundred
and fifty bucks there. Okay, I just need to save

(25:38):
another twenty two thousand, five hundred dollars and then that's
going to pay off my bill. And then I just
started matching my houses for each bill, and then that's
my house fire method, and I would just this house
for that bill, that bill, that bill, and that is
my retirement plan. And what was great now is that
I live larger and larger each year in my retirement.
Because rent goes up, you charge a little bit more

(26:00):
in rent, my mortgage payments go down a little bit.
I still get great tax breaks, and the properties are
appreciating more and more. So I'm not pulling four percent
from my stock, keeping that at a artificially low level,
because as you withdraw money from your stocks, you can't
appreciate as much. I'm not pulling any money for my
real estate except for the cash flow. And so this

(26:22):
is the retirement plan that took half the time, half
the money, and I get to live larger and larger
each time in retirement. It just makes sense to me.
So yes, I think everyone should do it if you
like math, if you're willing to put some upfront work.
It really only takes five properties over five years, and
that's better than working at your day job for another
fifteen twenty years to retire.

Speaker 1 (26:40):
I love how well you said you have to like math.
Then you really wait a second, No, no, you have to
trust mathing because I don't really like math, but I
trust math, and so there's a difference there for me,
and I think maybe for a lot of people out
there who are like, yeah, now, algebra wasn't really my thing,
but I trust the math. I trust the way some
of the basic numbers work, and so I too can
get behind the idea of investing in real estate. But
we've got more questions to get to you with you, Alan,

(27:01):
specifically about your house fire method, how it works. There's
a lot of details we want to unearth. We'll get
to those questions right after this.

Speaker 2 (27:16):
All right, we are back from the break talking with
Alan Corey about investing in real estate, specifically real estate fire,
achieving a sense of financial independence via real estate. And
now I'm having a hard time, I guess, getting past
the just where mortgage interest rates are right now, and
given the fact that they are higher and that most
folks are likely looking to the banks in order to

(27:38):
finance their properties, how are you approaching that, I guess,
because obviously, when you're paying three and a half percent.
Your numbers look one way, but better you're paying six
and a half to seven and a half percent on
an investment property, it's going to have an impact on
the numbers. You know you're mentioning the math right before
the break, talk to us about the math behind where
rates are right now, and specifically from an investor's standpoint.

Speaker 3 (28:01):
So, as an investor, I completely don't care about interest rates.
Let me explain that, because you're gonna be scratching your head.

Speaker 4 (28:08):
Here's what matter.

Speaker 3 (28:09):
I've found great real estate deals that would be great
to even good with twenty percent interest rates. I found
terrible real estate deals that would be terrible even with
zero percent interest rates. It's just a variable. You plug
it into a formula. It's a variable. It doesn't it doesn't.
It's just like the purchase price. I look at it

(28:29):
this way. If with today's rates, let's say it's a
seven percent eight percent, or if I'm doing hard money,
I got to do ten fifteen percent.

Speaker 4 (28:37):
Whatever it is.

Speaker 3 (28:38):
You put in your spreadsheet and you look at the numbers,
and if it's cash flowing, this is I've got three
things that are going to happen, Like I only get
fixed debt. You won't get in trouble with fixed rate debt,
meaning thirty years fixed. And every time there's a crash
the commercial people right now offices, it's because they have
adjustable rate mortgages back in the actually two thousand and

(29:00):
eight is because of adjustable rate mortgages. If you have
thirty year fixes, your golden and you you'll just get
rich by longevity. And so the three things that are
going to happen are this, I lock in a ten
percent interest rate. In ten years, twenty years, thirty years,
interest rates stay the same and it never moves off
ten percent. That's fine. I'm still cash flowing. I'm making

(29:24):
money each month. This is a little ATM machine for me.
So I'm glad I bought and that I didn't wait
for interest rates to change or interest rates go up.
And you know, the day after I close, interest rates
go up to twelve percent and forever and they never
go back down to ten percent. Well, that's fine, I've
locked into ten percent. I'm glad I bought. Third thing,

(29:45):
interest rates go down, Well, I'm making money right now.
If interest rates go down to eight or seven, then
I refinance. I'm glad I bought. So that's how real
say investors look at it is they're not going to
make They're not going to buy anything that's not making
money into day's environment, in today's prices and today's interest rates.
But if you buy a residential property which is four

(30:07):
units or fewer with a thirty year fixed loan, you
and you can find a way to cash flow it
today with the numbers. I don't care about interest rates.
I can either stay locked in or I refinance if
they get better. Like I'm just glad I bought because
I'm trying to buy a property to pay my bills
that one hundred and fifty dollars here, two hundred bucks here,
trying to buy the car, pay off my car note,

(30:27):
my student loan debt. That's what I'm using my real
estate for. I'm not trying to flip it. I'm not
trying to sell it. So that's why I say that's
irrelevant what the interest rates are.

Speaker 1 (30:36):
Okay, talk to me about how you determine what's a
good deal and what's worth investing in, because it can't
just be oh, it's cash flowing two bucks a month,
because then you're like, eeah, it's not worth my time right.
So like your philosophy is always be buying, but you
also you don't seem to put as much emphasis on
finding the property with the absolute best returns. And my
thought is fewer better properties maybe means less hassle with

(30:58):
the same amount of income. But I'm curious to hear
your philosophy.

Speaker 3 (31:01):
Yeah, this is where everyone freezes analysis paralysis. They they'll
create their bybox. You have to create a bybox because
what happens is someone's going to say, well, I found
this airbnb in Florida, I found this duplex in my hometown,
and then I've found this single family home in my neighborhood,
and they'll come to me and say which one should

(31:21):
I BUYO. I'll typically say, well, if you found the
best duplex in your in your old hometown, and you
found the best single family and you bought the best
you know, short term rental because you've been looking.

Speaker 4 (31:31):
There, then buy them all. You can't really.

Speaker 3 (31:34):
Compare and contrast. And what I say is you don't
have a buy box that's strict enough. It's much easier
to narrow that bybox and only look at the duplexes
from your own old hometown.

Speaker 4 (31:44):
Why is that, because.

Speaker 3 (31:45):
Then you could become an expert and you're gonna get
the word out there that hey, Alan buys duplexes in
his own hotown, and then everyone knows to call you
if there's a duplex and you just buy duplex, duplex,
and all of a sudden, you are a market expert.
You know what a duplex rents for, how much is
cost to renovate, what the property texes are going to be,
the insurance. And so if you sort of concentrate and

(32:05):
become an expert in one niche, rather than trying to
diversify off the gate, you were going to go much
further and you're gonna learn more.

Speaker 1 (32:13):
And that's exactly what you did with quadplexies, right like
you were the quadplex guy.

Speaker 3 (32:16):
Yeah, I'd learned this. There wasn't any foresight. I just
bought one and then I bought another one, and then
the neighbors come and like, hey, you bought two in
the street, you want to buy this one, And all
of a sudden, I became the duplex guy. It's just
your reputation becomes a lead magnet and I become an expert. Obviously,
I'm not going to make a ton that first I'm
gonna learn a lot of lessons on that first one,

(32:37):
but then then I can apply it to the second
one and third one, and then you become an expert
in that niche So if you want to hone the
skill set without buying anything. I realized I was doing
this when I lived in Brooklyn. I went to every
single open house on my block, and I would just
track every sale on my block, and then I would
predict what I think it would sell for and whatnot.
And then I would predict what I think it should

(32:58):
list for. And I tracked my block and once I
sort of was like within five percent of getting it.

Speaker 4 (33:04):
Right every single time.

Speaker 3 (33:05):
Then I went to my street, and then I went
to my zip code, and then I went to the
school district or whatever. You just widen it, and I
just started tracking numbers and data. It's fun for me.
And I was just looking at it on Zillo like
everyone looks at Zillo.

Speaker 4 (33:18):
I hate math.

Speaker 3 (33:18):
I'm not a big math guy, but real estate math
is just addition and subtraction. It's not anything to you know,
you don't have to have a degree in. It's great
if you have a passion and you can hear my passion.
People call me after this podcast, Alan, let's buy real
estate together?

Speaker 4 (33:32):
Can you help me?

Speaker 3 (33:33):
Like, you just got to get your word out and
share your passion and it'll change your life.

Speaker 1 (33:37):
I like what you were talking about there with kind
of zeroing down into street level, and that's kind of
where I started to It's like investing all inside of
a neighborhood. And then I was like, wait a second,
I can invest in the neighborhood over and maybe the
neighborhood over from that, But it was all kind of
within this limited sphere, all within kind of driving distance
and my ability to thoroughly understand the market. You've now
invested in a bunch of different markets. You've invested in
New York, you invested Atlanta, You've invested in South Georgia,

(33:59):
evest in different kinds of properties too. How do you
think is that just like do you grow that over time?
And how importance is it maybe to start off with
a like a niche inside of a particular neighborhood or
small geographic location, so you can kind of become an
expert before you expand.

Speaker 3 (34:15):
Do as I say, not as I do. Definitely you
want that niche. The reason I sort of kind of
go all over is twofold one one of ADHD. But
I'm a realtor and people are you know, will come
to me and say, hey, I want to buy a
short ter mental. Hey, Alan, I want to buy a duplex.
I want to buy an apartment building. And I don't
feel comfortable giving advice unless I'm doing that too. But like, like,

(34:37):
who am I to give you advice on short of
mental unless I'm doing it. So I'm going to go
buy it shorter mental. I'm going to learn the ropes
so that I can teach those to my clients. I
also teach real say investing as well, and written books
and stuff. So I whatever people want to buy, I
want to go buy it along with them or before them,
so that I can be a better guide to.

Speaker 4 (34:56):
Them on their investment. It's all sort of fun to me.

Speaker 3 (34:59):
I always say, there's million ways to make real estate,
a million ways to make a million dollars in real estate.
Just pick one, like you can be the only by condos,
or only by townhouses, or only by single families.

Speaker 4 (35:10):
But you want to accelerate.

Speaker 3 (35:12):
Your path to expertise, and if you just rinse and
repeat and get those reps in. That's how you become it.
Don't get distracted by all the noise, the new shiny thing.
Like obviously, when I started Airbnb didn't even exist, and
so that's a new product. I don't know there'll be
you know, there's pad split out there right now where
you can rent by the room a single family house,

(35:33):
but you're renting by the room instead of renting it out.
Like there's always going to be new products. I don't
care which one you choose, pick one. I just highly
recommend that you stay at four units or fewer that
small multi family because you can get that thirty year fix,
which I love. And if you can buy a duplex,
triplex or quad, I love that much more better than

(35:54):
buying four single family homes because then I only have
one roof to worry about instead of four roofs. I
only have one property tax build instead of four. I
only have one pest control bill instead of four. You
can scale down all your expenses if you can kind
of condense it in that small multi family.

Speaker 1 (36:07):
That's true.

Speaker 2 (36:07):
Yeah, Okay, So speaking of we're gonna take a break
here in a minute, and I think we're going to
get to maybe maybe like a bunch more rapid fire
style questions with you Alan about real estate. But I'm
curious I want to follow up about the houses that
you mentioned down in Griffin. You said that you actually
sold those properties. It sounded like you held onto those
for a couple of years. The way I approach the
properties I own, I'm planning to keep them forever, and

(36:29):
so for you when it does come time to sell,
what's the trigger? What is it that makes you say,
all right, it's time to list these properties?

Speaker 3 (36:35):
Well, it's just what I just explained why I had
fifty pest control bills. I had fifty, you know, fifty
of everything.

Speaker 1 (36:44):
Too many?

Speaker 4 (36:44):
And so yeah, yeah, yeah, too many?

Speaker 3 (36:46):
Okay it And in two and a half so I
bought the entire portfolio, roughly each house with thirty thousand
dollars each. And I know, whatever you're visioning in your mind,
what a thirty thousand dollars house bought you five years ago?
Our south of Atlanta, like people were paying six hundred
and seve hundred bucks. And then they're very livable properties.

(37:07):
These were fine and mostly Section eight so where they're
guaranteed income, the government's going to pay for it. Tenants
that have been there for twenty or thirty years, and
so if I've lost you when you say you know
sure you bought a one point five million dollar portfolio.
I didn't have money to buy this property, but the
seller was a retired real state investor. His kids didn't

(37:29):
want these properties, and he was having trouble selling them
because at the time, there wasn't a ton of loan
products for large single family portfolios like there is now.
And so I went to them and said, hey, I
want to buy this and I'll buy them all, but
I can't get a loan for it. But no one

(37:50):
can get a loan for this because who's going to
get fifty different mortgages, Like, it's just not going to
make sense. So we agreed on a seller financing deal,
which means he was mortgagee. He had all these properties
paid off, so I only had to put one hundred
thousand dollars down. Again, I got another partner. I put
in fifty thousand, My partner put in fifty thousand, and
we got a fifteen year mortgage at seven and a

(38:11):
half percent interest rate. You know, five years ago that
was crazy because everything everyone was getting two and three
percent interest rates. But I only have to put ten
percent down on a fifty home portfolio, and it cash
flowed even at a fifteen year note. It covered all that,
and on top of that was making it would kick
off about eight to ten thousand dollars a month, and

(38:32):
we just took that money and put it back into
the properties, fix them up. There's a lot of deferred maintenance.
We didn't pull any of that money out. And then
eventually I bought my partner out because he wanted to
go do other investments in real estate wasn't his thing.
And then I ended up selling that property two and
a half later as a whole portfolio for two and
a half million dollars. So with I turned one hundred
thousand dollars and two and a half years into a

(38:53):
million dollar profit. And so that was one of those
things where I wanted to, you know, turn that into
apartment building. It makes much more sense to take that
those fifty single family homes and buy a twenty unit
apartment building because then I only have to go to
one address instead of fifty. It's much easier to property manage,
you know, allthough, you just it's so much easier to

(39:15):
manage when it's all under one roof, sure, rather than
spread across an entire zip going.

Speaker 1 (39:20):
May not want to start that. Might know, your first
purchase is the twenty unit apartment complex, but you scaled up.

Speaker 2 (39:25):
You commercial residential may not be the first thing that
somebody wants to dip their toes in the water.

Speaker 1 (39:30):
So we gain the skills, and you'd also gain the
financial ability based on appreciation of your other properties and
the smart moves you've made to then take go into
that endeavor.

Speaker 2 (39:39):
Yeah. Well, and you what you laid out here, Alan
is a perfect example of I love how what you said.
You said it kind of quickly, but at the time
the rate that you're paying to this owner was ludicrous,
so much higher than what anybody else out there was paying.
But for you, you were again you crunched the numbers
and you were able to see, well, man, we're making money,
but times fifty were really making money, and for you

(40:01):
it made a ton of sense and ended up working
out for not only you, but you and your partner.
But you know, just a second ago you also mentioned Airbnb,
how that's it's a new product, and how that has
an impact on real estate. So we've got a few
more questions about that, plus more. We'll get to all
of that right after this.

Speaker 1 (40:24):
All right, we're back. If you're still listening to real
estate fire conversation with Alan Corey about investing in real
estate to boost your ability to retire early to reach
financial independence, and Alan man, I so appreciate all the
great information you've brought already, Let's get it to a
bunch of like quicker questions because there's just so much
warm wun to cover and we just don't have forever.

(40:46):
But like one of the things I want to talk about,
you're against paying off mortgages. You say, you call it
the dumbest thing a person can possibly do, But that
is that flies in the face of so much traditional
personal finance advice. Why are you a fan of people
holding onto their mortgages as long as possible?

Speaker 4 (41:00):
Okay, I'll try to make this short.

Speaker 3 (41:02):
Imagine you found a dollar in the parking lot and
in the gas station parking lot. You have two choices.
You can go mail that dollar into your mortgage note,
pay off a dollar of your principle, where you can
walk into the gas station and buy a one dollar
Snickers bar. You have that life decision. A lot of
people who have extra money, they're going to throw it
to their principal mortgage and pay it off. Now, let's

(41:23):
say you left that dollar there and you came back
fifteen years later and that dollar was still there, and
you're like, fine, no one's gonna pick this up. I
want to pick it up. Then what's going to happen
is you have two choices. You're going to have that
same dilemma. I can either mail it into my mortgage
lender and get another dollar off my principal payment, like
you could have done fifteen years earlier. Or you can
walk into the gas station and try to buy a
Snickers bar and guess what your Snickers bar is now

(41:45):
three dollars thanks to inflation.

Speaker 4 (41:47):
So what does that tell you, Well, that tells.

Speaker 3 (41:49):
You that everything around you is going to get more
and more expensive over time except your mortgage. Your mortgage
is the only thing that's going to stay the same
or feel like it's getting cheaper.

Speaker 4 (41:57):
So why do you.

Speaker 3 (41:58):
Want to get rid of the best benefit in the
world where you've locked in the most expense in your
life for thirty year mortgage, whether it's your investment or your
primary is probably the most expensive expense you can lock
that in for thirty years. Everything else is going to
get more expensive. You know, just looked at your grandparents
or your parents who bought twenty years ago, thirty years ago,
and they have like a thousand dollars mortgage payment and

(42:19):
they look like geniuses. They did nothing except wait and
not pay off their mortgage. So it's such a huge benefit.
I just don't understand the rush to pay it off.

Speaker 2 (42:27):
People will have that emotional psychological aversion to debt. Unfortunately,
not all debt is created equal. But Alan, what do
you say to folks who are trying to limit the
amount of risk when it comes to their different properties.
Like we get the question about if folks should incorporate,
if each property should be owned by its own LLC.

(42:48):
Like that's one path you can go. Or another path
is umbrella insurance to cover you as an owner. Where
do you come down on that debate?

Speaker 4 (42:55):
Yeah, umbrella is great.

Speaker 3 (42:57):
I don't think you need an LLC unless you have
over ten property or if you get to the point
where your debt to income ratio DTI, which is sort
of how you get residential mortgages in your name. They
look at this formula, how much is your debt to
your income. If that's out of whack it's more than
fifty percent, you can't getty residential mortgages anymore. Then you
got to get an LLC and commercial. But if you're
worried about getting sued, guess who gets sued. It's the

(43:18):
people who have a paid off property. Let's say you
have a million dollar property that's paid off and someone
breaks their foot or whatever. They're going to sue the
person as a million dollar asset force you to sell
that asset. But if you have a million dollar property
with a nine hundred thousand dollars mortgage, the attorney's are like,
it's not worth suing them because by the time they
sell it with realtor commissions, you're not going to get
any money.

Speaker 2 (43:37):
So you've got another argument for not paying off the
mortgage and keeps that loan around as long as possible.

Speaker 3 (43:42):
I've got fifty arguments for that.

Speaker 4 (43:44):
Yes, exactly, all right.

Speaker 1 (43:46):
You talk to me about hiring a property manager verus
self managing. I'm a big fan of at least starting
off managing the property yourself so you're learning the ropes,
and then maybe down the line, especially as that property
becomes more profitable. Maybe you can add that as a
lot on them and take that off your plate, especially
as you're kind of growing your real estate portfolio. What
are your thoughts on that.

Speaker 3 (44:06):
Yeah, I tell people to manage your first five. Hopefully
they're local and is driveable. If not your town, the
numbers just don't make sense for any good investment. Then
you know you're going to have to use a property manager.
And that's fine. But find a property manager and then
invest within their skill set. Well, you know, are they
section eight, are they luxuriality and are they a certain
part of the neighborhood. Understand who's going to manage it

(44:28):
and make sure that they can keep an eye on it.
I try to get rid of the busy work if
you find it that has just becomes busy work for
you. You know, get a property manager, and you know whether
you want to go buy more real estate or look
for more deals, or you can now go do a
hobby and your real estate's paying for that hobby. Or
maybe you can work extra hours in another you know,
side gig or something. That's what the beauty about real

(44:49):
estate gives you options.

Speaker 2 (44:51):
Okay, talk about vacation rentals, Joel and I are families.
We vacation every summer, we go to the beach, and
a lot of times when you go to the beach
or wherever you you.

Speaker 1 (45:00):
Go off to, you start dreaming.

Speaker 4 (45:02):
Yeah.

Speaker 2 (45:02):
Yeah, you start walking around, You're like, Oh, would be awesome,
what if we could just come here every other month,
you know, to our own place. But at the same time,
I start to think through maybe the pain in the
butt that that might be, especially if you're trying to
manage a vacation rental. But what are your thoughts on
investment properties that are vacation rentals.

Speaker 3 (45:21):
Yeah, it's similar to long term rentals. I usually say
you don't want to invest in properties that you want
to live in, because then you're making your own biases
and emotional decisions over a spreadsheet decision. A lot of
people want to buy that that that beach house that
they go to every single year on fourth of July,
and then what they don't realize is fourth of July
is when you can make the most money out of it.

(45:42):
So you're you're going to be staying in it and
not be able to make the most money out of it.
And then when you don't go, that's when no one
wants to rent it because in the off season you can't.
You know, you're you're renting it for pennies, and then
you find.

Speaker 1 (45:53):
Yourself you're going to the beach in January.

Speaker 3 (45:54):
Now yeah, yeah, exactly, So you're you're now altering your
your lifestyle to make sense of this investment. You go
in the off season, or you don't go on the
best week of the year. So I don't like miss
mixing business and pleasure. I do like investing in sort
of big cities. I've got some in Atlanta. I like
sort of the sub tier touristy markets. So maybe not Disneyland,

(46:19):
but maybe, you know, two hours from Disneyland, there's a
bunch of beaches in Florida.

Speaker 4 (46:24):
You don't have the.

Speaker 3 (46:25):
Big corporations that are going to invest there. You don't
have the hotel districts fighting you, and then the h
you know, the airbnb laws. As much things are much cheaper,
people will come and.

Speaker 4 (46:36):
Stay for a week.

Speaker 3 (46:37):
If it's sort of a destination rather than a weekend
pop in kind of thing. And it's probably not something
where I would want to go to every single you know,
I'll go once to, you know, every now and then,
because it's it's smallest beach town or something. But I'm
not going there, you know, religiously with the whole family
kind of thing.

Speaker 1 (46:54):
Sure, talk to us about scaling, because you have scaled,
but I think you said you had like three hundred
and fifty doors. Is that about where right now?

Speaker 4 (47:00):
Yes?

Speaker 3 (47:01):
So I've got about twenty doors in my name and
then the rest I was through partners.

Speaker 1 (47:05):
So I want to know the when you stop, like
what makes you quit? Because at what point is it enough?
And like our friend Chad Carson talks about basically the
small and mighty real estate investor, which is, hey, ten
ten paid off units, at some point is going to
be able to, you know, fund more than enough for
the lifestyle you want. When do you know when do
you stop a value of property properties? When do you
stop investing? When do you say enough's enough? I've crushed

(47:27):
it and I'm gonna, like, I don't know, be more leisurely.

Speaker 3 (47:30):
I've got through to fifty doors. But it's it's fun
for me. It doesn't feel like work. I've got a
lot of people who want to invest with me, or
they find a deal and they say, Alan, how can
we get this done?

Speaker 4 (47:42):
Achieved? A lot through real estate.

Speaker 3 (47:43):
But it's not like, oh, I'm gonna get happier if
I have more. If I get happier if I have more.
It's just I like treasure hunting. I'm like the guy
on the beach with the electrical thing. What's that called
the metal detectors. Yeah, like that guy's life going to
change it finds a wedding band. No, it's just fun
and entertaining for them. And that's me in real estate.

(48:05):
It's fun to look at opportunities. Oh, this is an opportunity, guys.
Do you guys want to pass around out and get
this done? Or should I buy this myself? Like it's
I enjoy it, it's my hobby, you know.

Speaker 1 (48:16):
I love it. Obviously.

Speaker 2 (48:17):
I think there's a lot of folks who are just like, Man,
I've got a job that I took so that I
can pay the bills. I don't enjoy my work, but
the ability that's something over time that you do want
to sit your sights on the kind of work that's
going to be fulfilling, the kind of work that's going
to be able to allow you to at some point
achieve some sense of financial freedom. But I love that
and the value that you're able to put out into

(48:39):
the world through the work that you do is It's
a huge part of life fulfillment. And I think our
opinions of retirement has even changed over the years. Joe
and I as as this is something that we've talked
about a lot. But you mentioned Airbnb earlier. Alan without
being a platform that can change the rules and not
only what say Airbnb charges folks what they charge hosts,

(49:03):
but even cities and how there's a lot of cities
that are claiming down on short term rentals. How much
should investors take that into account as they're looking to
buy a property.

Speaker 3 (49:13):
Yeah, you should take an account and that never buy
a vacation rental that won't cash flow as a long
term rental. So if the laws change, you can just
pivot it into a long term mental and you're still
cash flowing. So you run your numbers twice, you run well,
run first as a long term rental, and if it
makes sense as a long term mental, if that day
ever comes, whether it's tomorrow or ten years from now,

(49:35):
you've got that's your pivot point. I always love properties
that have pivots. The more pivots you have, the better.
And so you can say, well, I'll make four times
as much money as a short term mental and if
they change the laws on me, I'll make you know,
I'll still make money. I'm not losing money as a
long term rental. Yeah, that's how you go about it.

Speaker 2 (49:53):
I love it.

Speaker 1 (49:53):
That's a little more conservative in nature too, just making
sure that. Yeah, because that's happened. I had a friend
who bought one in Chattanooga, and then Chattanooga it says, wait, wait,
no more short term rentals here, at least of the
time being, And so he's kind of halted for a
minute at least from buying more. He's able to still
he's grandfathered in for the one he's got. But that
can be a really tough position to find yourself in.
But Alan, thank you so much for joining us today

(50:14):
on the show. Where can our listeners find out more
about you? More about your house fire method?

Speaker 4 (50:20):
Yeah?

Speaker 3 (50:20):
Sure, I'm a real estate maximalist, so you can find
me on social media real estate MAXI Also I teach
real state investing at house Money Media and we have
a podcast called the House Money Real Estate Investing Podcast,
So all those channels would be great.

Speaker 1 (50:34):
Awesome, Alan, Thank you so much for taking the time
out of your day to talk with us.

Speaker 4 (50:38):
Thanks guys, it's been blast all right, man.

Speaker 1 (50:40):
That was a good combo, a lot of interesting information,
obviously from someone who's rabbit all in on real estate,
and so it's just nice to pick his brains as
someone who I think is we like real estate. You
kind of like set it up nicely at the beginning
of the episode. It's like, we're not Alan Rabbit Dog
Corey though. Yeah, but I did his insights. I think

(51:00):
there's a lot that some people who are interested in
investing in realistic can learn from Alan And from this episode.
What was your big takeaway though from this combo?

Speaker 2 (51:08):
I think my big takeaway is being is influenced by
the fact that I don't want to alienate alien eight
folks who are listening to this, and they're just like,
three hundred and fifty doors, what the like, I'm never
gonna do that, And so I'm gonna take it back
to personal finance and at the beginning, because I think
there's a lot of folks who are saying, well, yeah,
if I had that much money on hand, sure, if
I could go to a hard money lender and drop

(51:29):
one hundred thousand dollars like, there's a lot of if onlys.
And the fact is Alan got to that point by
working his butt off when he was up in New
York and he was socking. He was setting aside fifty
percent of his paycheck. Man, wasn't a big paycheck, it
wasn't a bunch, but that percentage. Think about what folks
could do right now, who are in their twenties if
they set aside fifty percent of their pitcheck for a

(51:50):
short period of time. I'm not saying that you have
to do this in definitely, but the ability to do
that for a short period of time to achieve some
very quantifiable, measurable goals, Well, if you want something bad enough,
that is what it takes. And by doing that you
can achieve something as massive as what Alan has been
able to do.

Speaker 1 (52:06):
When he was describing that, all I could think was
frontloading the sacrifice, which is what Dachi talks about, and
that's exactly what he was doing. He was saying, like, listen,
I'm going to go the opposite of hog wild right now.
I'm going to cut to the bone just for a
few years, so that I can build up this nest
egg and then boom, I'm gonna make an investment or two,
and then eventually I'll be able to inflate my lifestyle.
He's not eating ramen every night now he was back then.

(52:28):
The sense of packet, he's about how many fancy tween
hats he has Now, I mean, like, come on, he
would not have imagined that back then. That's right, but
I appreciate that that. It's like, for a period of time,
I'm willing to do this in sacrifice, even more than
I want to do in the future. But it's because
I'm preparing that future for myself, and I think it's
a good way looking at it totally. Yeah, what about
you was your big takeaway though, So I like when
he said get reps in and you get better with

(52:50):
things over time. I remember man being so freaking scared
running out my first property, and then the second one.
I was still pretty nervous, but not nearly as frightened,
and then over time you're like, wait a second, and
some of that confidence.

Speaker 2 (53:01):
Yeah.

Speaker 1 (53:01):
Now, I think part of the reason he's so gung
ho on it is because he's been doing it so long.
He's been so successful, He's made so many good deals
and over time and he's learned from the bad ones too,
and so you just kind of then you begin to
know what to look out for, the fine print to
watch out for, maybe how to screen tenants even better,
and it becomes this well oiled machine. But it involves

(53:21):
getting reps. You just don't get better by sitting on
the sidelines and consuming information in the same way you
do by getting in there and trying the ole man
in the arena thing, I guess, right, But yeah, yeah,
So it's obviously important to do your due diligence and
know the market in and out that you want to
invest in, kind of like he was actually talking about too,
But then it's important to get in there and actually
do the thing. Start off small, self managed, learn as

(53:43):
you're doing, and the more reps you get in, the
better you're gonna get at it.

Speaker 2 (53:46):
Yeah, I think that's I think that's when he was
talking about finding a specialty and focusing like laser focus,
because I think that's so important as well, not only
getting the reps in massive number of reps, but really
narrowing in on what it is that you're going to
say specialized in it, but our beer Joel, that you
and I enjoyed today was an OOST. I wanted to
say that that's that's what it's called o sd oust.

(54:09):
This is another one by High Grain Brewing Company and
it was donated by Mike and Christy.

Speaker 1 (54:15):
What were your thoughts? Yeah, I like this when it
had like caramel vibes some FIGI notes. I thought it was,
oh yeah, smooth and warming. Uh, it was definitely warming,
So there's no joke. It's a strong strong ale. So
this is a ten percenter and you could pick up
on some of that peppery nests that came from that
basically from the higher gravity, but almost had like a

(54:35):
clove like pepperinus too it because of that higher ABV
while still.

Speaker 2 (54:40):
Maintaining it's like Belgian banana like sweetness that you get
from Belgian golden strong ales like this. But is it
is it monkey? What's the victory Golden monkey that I
feel like had that years me?

Speaker 4 (54:52):
Neither.

Speaker 2 (54:52):
I think that was my first golden Golden strong as.

Speaker 1 (54:55):
Okay, but I mean that was a classic back in
the day. But I don't think I've had a victory
beer in forever.

Speaker 2 (54:59):
It's been a but Mike and Chrissy thank y'all again
for sending this one plus the others our way for sure.

Speaker 1 (55:06):
All right, let's going to do it for this episode.
We'll have links up in the show notes to help
you if you're interested in investing in real estate, so
please do check those out, but Matt, until next time,
Best friends Out, Best Friends Out,