How do you get started in house hacking? There’s several strategies for brand new investors getting started and the biggest investors in the industry looking to pocket some serious change and save a buck or make an extra buck.
Today, Clint Coons of Anderson Business Advisors talks to Kelton Todd with Women’s Real Estate Investor Network. Also, Kelton is co-owner of Todd Team Investments.
Whether mentoring one-on-one or delivering a keynote presentation, there is one word that describes Kelton’s goals—results. Kelton inspires others to take action and change the direction of their lives through creating their own financial freedom. He is now offering Empire Academy, a fully comprehensive, results-oriented real estate investing education program.
Highlights/Topics:
- College Roommate Strategy: Buy a house, live rent-free in bedroom, rent out the rest
- Vacation Home: Rent out just a bedroom or entire place temporarily to generate revenue
- Challenges: Look out for drugs, parties, and things like that in college towns
- Relationships: Know if you can live with person; different personalities create conflict
- American Dream Strategy: Buy property using government-backed loans with little down
- FHA: Via same loan process, acquire duplex, triplex, or quadplex and rent out other units
- Women’s Real Estate Investors Network: Good foundation, education, understanding
- Ultimate Empire Builder Strategy: Buy something small and turn it into something big
- Moving Up: You become the Joneses that everyone’s trying to keep up with
- Risks: You must be willing to take some risk to make money—inflation isn’t slowing down
Resources:
Women’s Real Estate Investors Network
Women’s Real Estate Investors Network Terms of Use
Full Episode Transcript:
Clint: What’s up, guys? Hey, it’s Clint Coons here. In this episode, what I want to do is talk about house hacking and how to get started in it. I can think of no one better than Kelton Todd with Women’s Real Estate Investor Network.
He’s an author, speaker, mentor, coach, and more importantly, he’s an actual client that I’ve been working with for several years. I’ve seen this growth in his portfolio and I’ve seen what he’s been able to do with people that he’s worked with when it comes to real estate investing and he’s done a lot of it through house hacking.
The thing about his strategies, because we’re going to talk about some of the ones you may already know about, but he’s got one strategy that really blew me away and really piqued my interest. We’re going to get into that as well as we go on during this conversation. If you ever wanted to learn about house hacking, it’s good that you join me today because with my special guest, we’re going to go into that. Kelton, how are you doing?
Kelton: Doing great, Clint. Good to see you and I’m super excited to get to share some specialized knowledge that we’ve learned over the years. House hacking is one of my absolute favorite strategies. I love it because it’s applicable to brand new investors that are just getting started and are looking for a way to save a buck or make an extra buck, all the way up to some of the biggest investors I know in the industry.
As we’ve discussed, we’ve put together one of the most advanced house hacking strategies that allow you to pocket some serious change that’s a little more than written out of your bedroom. It’s ideal because it gets to cover all the spectrum. I love it. I love the topic and am super excited to have the chance to get to join you guys.
Clint: It’s great because I know especially a lot of people who are new investors and they’re trying to get started and build up their portfolio. This is a great strategy for them. It’s a way for them to get a larger house than they might otherwise be able to afford, allows them to start that rental portfolio.
Why don’t you start off and break it down? Go through your first strategy and explain to everyone who’s watching how it works and what you teach people?
Kelton: We’ll talk about a few different ways to house hack because again, I think it’s important that no matter who’s listening right now understands what we’re about to discuss is applicable to you. I promise you, if you’re listening to this right now, one of the strategies we’re about to discuss is something that you can do to either earn some extra cash flow, like you said start that portfolio, or actually earn some serious cash and some really cool tax advantage ways that obviously Clint and team over there at Anderson can help you out with and walk you through quite a bit.
The first strategy that I’ll share with you is starting out more like that beginner that’s looking to jump in and get started. I like to classify them or tier them. For me, the first house hacking strategy that you want to understand and learn—and it’s good to learn about all of them, no matter which one you’re going to do so that you at least know that the others exist and know where you fall on that scale of which one you might want to start out doing next—is probably the most common version. I like to explain it in the form of the college roommate theory.
When I went to college, unfortunately, I was not an educated investor at the time, but my roommates were. Or my roommate’s parents were, I should say. My roommate’s parents bought a house, and went to Texas A&M in College Station. They went and bought a four bedroom, two bath house, nothing fancy, about a 2000 square foot home. They were smart enough to let their son stay in the master bedroom, but they told him that he had to rent out the other bedrooms. That’s exactly what happened.
As a matter of fact, ironically, he was the best man at my wedding and still to this day my best friend and golf buddy. We golf at least a couple of times a week and that’s actually how we met. He had an extra bedroom in his house and he needed to get that thing rented out.
A buddy that we were connected to put me in touch with him and I moved in. From that day forward, I paid his parents $500 every single month for the last several years that I was in college to rent that bedroom out from him. It wasn’t just me. It was a couple of other roommates.
We had three roommates that are paying him $500 a month to live in this four bedroom house. Three of us paid $500 a month to live in our three bedrooms. Interestingly enough, now that we’re good friends, I found out later, after the fact, that his whole mortgage and everything all in was right at $1500 a month.
His parents got them to buy them a house, and put him up in the master suite. It was a nice home and a nice little subdivision right outside of College Station. Not only did they not have to pay a penny for his room and board, but we lived in that house for a few years, of course, in college. Then when he graduated, they went on to sell that thing and make a whole lot of money.
I like to explain it through that lens because I lived it in the real world, but that’s applicable for you that are listening because don’t be me and don’t be the guy that was just renting a bedroom, be my roommate’s parents and be the guy that actually owns the house.
You can do that in multiple different ways. You can do it for yourself. If you want to live rent-free, buy yourself a house, and rent out the other two or three bedrooms. If you want to get really creative, you can even make some money but at the very least, live rent-free.
We chopped the bills up four ways so the only bills he was paying was one-fourth of each of the utilities and that was the only cost for them to pay for him to live there. You could do that yourself. Or if you have kids in college or anything along the concept that I just explained, you could do something like that.
It’s a lot of different ways to get creative about it. The whole theory is basically to rent out a portion of your house but live in the other portion of the house and just hack the home that you’re living in to create some additional income.
With things now like Airbnb, VRBO, and HomeAway, there are a lot of other ways to get creative where if you don’t want a full-time roommate, but you don’t mind someone hanging out for a weekend in one of the bedrooms or something like that, you can literally rent out just a bedroom temporarily to bring in some revenue.
I know quite a few people who have second homes or vacation homes or even friends. I’ve actually got some people that I talked to, strategy to that loved it. What they do is they will rent out their entire house on Airbnb, VRBO, whatever it is, and they will go stay with a friend who has a guest house in a pool house and they love it.
They get excited anytime somebody rents their house, they set it at a premium, and they’re like heck yeah, we get to go stay at my buddy’s pool house all weekend long while we make $1000 this weekend for renting out my house. There are a lot of different ways to do it, but it just all revolves around, hey, get some extra revenue coming in from the home that you already own.
As you said, the cool thing is you can also take it to the next level and buy a little bit higher-end house or a little nicer house than maybe you would have been able to afford, knowing that hey, you’re not going to be the one stuck that’s got to pay that mortgage every single month.
Clint: Yeah, renting out your house like that. I guess that would work until your wife comes home and finds that four pairs of underwear are missing from the drawer.
Kelton: That’s right, or an extra four pairs. More importantly, an extra pair laying around.
Clint: You’re right. With that, when you rent out rooms in the house, we did the same thing for our daughter when she was going to the University of Arizona, and the thing about that was when she was down there, the people that came in, you got to have a rental agreement with them. We had a drug policy there as well that they couldn’t smoke pot or use drugs in the house, and split up the bills. What of the challenges, if you do that, that you’ve seen people run into or you yourself have run into with renting out rooms?
Kelton: Obviously, what I would recommend and again, I think that college example is great because everybody understands it or wraps their head around it and then all of a sudden you just have to spin it around and say, okay, you be the person that buys the house and you’d be the person that rents it out.
This doesn’t only apply to college towns. You can do it in any town that you live in. As you said, in a college town, there are going to be some more things to look out for, i.e. drugs, parties, things like that. Even if you’re not in a college town or even if you’re just living in the house yourself, the one big thing that I wouldn’t do is I wouldn’t go out and buy a house that’s four times more than you can afford because you can afford to rent one of the bedrooms. You’re going to have vacancies. You’re going to have times where you don’t necessarily want to put somebody in every single one of the bedrooms.
I would recommend not necessarily relying on it as a huge portion of the income because there are going to be times when it’s just not ideal. Maybe as you said, your wife, or your girlfriend, or something at the time is like, hey, I don’t want to be living with all these other strangers or whatever it is. Don’t over-leverage with the strategy. Just capitalize on it as additional income that you can do.
I’ve also heard of people just taking that money and putting it towards the mortgage to just pay down their mortgage if they don’t even need that cash flow to save a little bit there. That would be a big tip, is just make sure that you’re not necessarily relying on that income. You don’t want to put yourself in that position.
You’ve got your tax and asset protection set up in a way that you’re not going to get sued by another one of the tenants and all of those things, but let Anderson take care of all that for you, or at least that’s what we do. I won’t speak on that part, but really as you said, just get a good lease in place and make sure there are clear guidelines of what they can do and what they can’t do.
The best piece of advice I could probably give you if you’re going to go that exact route and do that version is to interview them as if you were interviewing a friend. Pick somebody that you don’t mind sharing some space with and a bedroom with. Make sure that you set some clear expectations of how clean the house needs to stay and all those kinds of things, but you just don’t want to get in a situation where you’re having to “evict” somebody out of a bedroom.
I think you really nailed it by just getting a good agreement in place that clearly states that they’re not renting the entire home and that they’re only leasing a portion of it.
Clint: A couple of things about that, too, is what you hit on is knowing people. One of the kids that went to school with my son when he started working, I think he works at Raytheon or McDonald Douglas, I’m not sure, when he went to work there before he bought a house, what he did was he got to know his coworkers, found out about their living arrangements.
When he found people that he aligned with, he then approached them and said, would you be interested in renting out a room for me? He got details on how long they might be interested in doing that. Once he figured out those details and he went out and bought a house and he knew right away he had three tenants who were willing to commit prior to that to live in that property, and he knew he got along with them. I think that’s important.
Same with our daughter. When she was interviewing people to stay on the property and rent the rooms from her, there were typically other girls in her sorority or other girls in other sororities that she knew and already had an existing relationship with. Only one time she dealt with someone that she didn’t have a relationship with, didn’t know, they came in and wouldn’t you know, that’s the one that did not work out.
I think that a relationship is important because you want to make sure that you can live with that person because a different personality could be a conflict. You put your dinner in the fridge, you come home and you find your friend ate it.
Kelton: No, that’s right. You just triggered another good one that my brother’s girlfriend a long time ago actually did. Traveling nurses is a great opportunity. They’re typically looking for a place for about a six-month time period and they want it fully staged and furnished and ready to go, but you get to charge a premium.
She actually rented hers out and she was in that industry. As soon as we told her about it, she was like, this is a no-brainer. This is crazy. Why don’t I do it? She started renting them out. It went so well that she actually moved out and just kept renting all the rooms out in the house and didn’t even live with them.
Again, it went back to knowing people. Even though maybe she didn’t know everybody that moved in, at least she knew they were in the industry, she knew the company that they were working for. If it turned into this big nightmare, she could at least go and talk to their boss. Go and talk to people that are in the same industry that are associated with them.
I think you nailed it. I would find a way to get people that you somehow, some way know, and it doesn’t necessarily always need to be like a college town or even a traveling nurse. It can just be anything that’s applicable to you and your situation.
My dad was a police officer for quite some time. That would have been an ideal pull to pull from fellow people that were police officers. That would be a good group of people that you would be open to renting places out. I think connections and getting somebody like you to say that you either know or have some association with that you can trust is a huge advantage.
Clint: There’s a nugget right there that I hope people picked up on because what you said about the traveling nurses, that is exactly what a friend of ours did. He and his wife no longer had any kids in the house. They met someone who was a traveling nurse while they were on vacation. They just found out that she was going to be coming to Washington. They said, hey, do you want to rent a room? She ended up staying with them, I believe it was six to eight months and they collected income.
If you already have a property and you’re wondering, I’ve got all this extra space 5000 or 3500 square foot home and it’s pretty empty between me and the wife and cat, reach out there for traveling nurses.
Well, great. That’s one strategy. Tell us about the second strategy you have when it comes to house hacking.
Kelton: The second strategy gets a little more advanced and a little more fun, in my opinion, because now you’re not necessarily the way I always like to put it. All right, we’re done with the college thing, we’re done with renting out a room. Let’s grow up a little bit and hey, I want my own space. I don’t want to share. Maybe I’ve got a girlfriend or serious girlfriend, or fiance, or wife that’s not okay with strangers coming in and out of the house.
It’s just taking it to the next level and taking advantage of it. When buying a property, we have a lot of different government-backed loans nowadays. It’s the American dream. We get to own a house instead of having to put 20% down for an investment house. One cool thing about when you’re doing house hacking is you get to acquire these houses with little down.
You can do FHA loans and put as little as 3%, 4%, or 5% down and taking advantage of that homestead. What a lot of people don’t realize is it doesn’t have to be a single-family residence. It can actually be a duplex, a triplex, or even a quadplex or fourplex.
You can get a loan for a one to four-family residence. Typically, you’re going to go through the exact same loan process. Instead of now renting out a room, you can rent out the other unit.
Let’s just take a fourplex for a simple example and treat it just like the four-bedroom analogy. You buy a fourplex. Again, you can get approved very easily with FHA-type loans to buy these types of properties, put very little minimal down payment down, and now you move into one of the units and then you rent out the other three units.
I would use the same rough numbers. We’re here in Texas so our numbers may be a little lower than some of yours, but we’ve got students all over the nation that do these strategies in just about every single state they work. The number just moves a little bit.
Let’s say you rent each unit out for $1500 a month. You’re collecting $4500 a month. As long as you’re all in for under $4000 a month, then you’re living absolutely for free, as well as cash flowing $500, $600, $700, and $800 a month.
I’ve heard of people even cash flowing as much as a couple of thousand dollars a month by simply renting out the other units and still getting to take advantage of the homestead where you can actually go and buy those homes with very little money down. Just a cool way to do it without having to share the kitchen with somebody else.
Clint: The thing about it is I’ve seen some developments going in now where my clients have been investing in them, where they’re buying a fourplex. These are new builds from the ground up and they’re really nice—1700 square foot put units. Each individual unit in that fourplex. You got about 6000–6500 square feet. The rents that they can charge in the areas in which they’re buying is pretty phenomenal. Everything works out. They’re going to cash flow right away off of that when they’re living in one of the properties themselves.
I believe when you’re applying for financing, you can count that income, the expected income, and the average income towards that loan, if I recall. I may be wrong on that, but I thought that can help you get into that property as well.
Kelton: Absolutely, and what they’re going to do is they’re going to run rental comps so they’re just going to cop it out and say, hey, what do these rent for based on the other homes in the neighborhood that are renting like this? Depending on which lender you’re working with, you’re exactly right.
You might have to find a little more creative lender. You may not be able to go down to Chase, or Wells Fargo, or Bank of America and do it there. If you get a little creative and find a local mortgage company, they’re usually able to guide you through that process and tell you what you would need to have. The cool thing about it, of course, is we all understand appreciation is incredible, especially at a time like this. Hopefully, everybody understands the value of owning a hard asset when they’re printing money as fast as they are right now.
It’s cool because now you’re not only owning your home that’s appreciating, but you’re owning all four of these residences. The value, you may pay a little more to get into it, but you live for less every single month. We all know the higher the value of the asset, the higher the cash amount that it’s going to appreciate. Your appreciation is basically 4X as what it would be if you just bought a house a fourth of that size and just lived in it yourself and paid all the rent. There are a lot of advantages to doing it.
Clint: Then the other advantage that I see is that once you’ve done that, as it appreciates, you can go in, you can refinance the property, pull some cash out, take that unit you were living in, start renting that one out, and then take that money and go buy a new personal residence.
Kelton: Exactly. A lot of different ways to build a portfolio. You just added four doors to your portfolio and you did it with 5% down or under a loan, little money out of pocket, lived for very inexpensive, and boom, you got four doors on your portfolio. Most people take a lifetime to acquire four rental properties.
Clint: Okay, that brings us to your ultimate strategy that when we were talking about it, it’s like wow, that’s really cool. I’d never thought of that technique. It’s just not the way I invest. I really like you to share that with everyone as well and tell them how they can take something small and turn it into something big.
Kelton: This is the one I’m probably the most passionate about. We teach a lot of different strategies. We teach everything from whole selling to flipping to buying rentals. We’ve pretty much done it all. We’ve had countless students going to be super successful using all these different strategies.
When COVID hit, we took a step back from running networks, teaching, and mentoring ourselves. However, my mom said, no, this is the time that people need it the most, so she really launched the Women’s Real Estate Investors Network.
Now we just help her. We do some coaching for her students and help her educate women on how to get into the business and get started. It’s been really fun. This strategy has been their absolute favorite. They love, we call it, the ultimate empire builder, but the ultimate house hacking strategy. More of our students have done this strategy than any of the other strategies we teach because it allows you to check off so many boxes.
We all love making money. The only thing better than making money is making a lot of money tax-free. We love that aspect of this strategy. The coolest part about it is, again, as told you at the beginning, that the strategy is applicable to everybody listening.
If you’re starting out with a lower budget, maybe a couple of the other strategies we mentioned are ideal for you. But if you’re going okay, those all sound great, but I don’t want to rent a bedroom out and I don’t want to live in a townhome, duplex, triplex, or quadplex. This strategy is ideal. Not only do you get to live in a single-family home, but ideally you get to go pick a home out in your dream neighborhood. The bigger, nicer, and better the neighborhood, the better this strategy actually works.
You get to take it a step further if it could get even better than that. The first thing we do is design the house, we rip it out and design it exactly like we want so we get to live in a beautiful home in our dream neighborhood, design it and live exactly like we want.
We get to live in it at a fraction of the cost that everybody else is paying to live in the same neighborhood. Then when we sell it, we get to take advantage of the 121 that we were talking about and not pay any capital gains or taxes on those profits up to the first quarter million if you’re single, all the way up to half a million if you’re married.
It’s a super cool strategy. I’ll walk you through the process. I’ve always found the best way to educate is to actually go through some case studies and some examples. If you don’t mind, I’ll just talk about my first one and then I’ll really briefly hit on the last one. Currently not far from the last, but the current one that I’m doing now.
I’ll share the strategy with you real quick. The key to this strategy is to buy a small house in a high-end neighborhood. The reason I say high-end neighborhood is we’re looking for homes that are at least about minimum $250 but really about $300 a square foot and up.
If a home is 1000 square feet, it needs to be selling for at least $300,000. If a home is 2000 square feet, it needs to be selling for at least $600,000, which in this day and age is very easy to find. That’s the starting point and the higher you go, it’s actually better.
The first one that I ever did, the prices were going for about $250 a square foot. Again, this is one of my favorite strategies because I developed this myself. For all the other strategies that we teach, I have to credit all of my mentors. My mentors taught me all these strategies, I didn’t create them. This particular strategy, I took some advice from different mentors and pieced some strategies together, but I really figured it out by doing it myself.
I bought a house that was just under 1500 square foot. It was 1400 square feet and I paid just over $100 a square feet for it. I paid about $120 a square foot because it was a run-down house. It never even had an air conditioner here in Texas, 1950s, all original and it was one of the smallest houses in the neighborhood, which is key to this strategy. So a 1400 square foot house and all the other homes are ranging from 2000 all the way up to like 2700 and 2800.
I bought this house for a really low price per square because it needed everything. Bought the house and we completely renovated it and then we went down and we got a home equity line of credit to get an additional loan against this home that was now valued at a lot more. We took that money and did an addition.
That’s where the ultimate empire builder comes in, as you do an addition. On average, it costs about $100 a square foot here to build a house to build an addition. As long as you’re over 6700 square foot, then that average holds constant. It’s going up a little bit with building material now, but so is the resale price.
Those are just the rough numbers we use. If you know you can sell for about $300 a square foot, but you know you can build for about $100 a square foot, or you can build an addition. We’re not building kitchens. We’re not building the expensive stuff that’s already there. We’re not building new driveways and new garages and all of those things. We don’t have to re-turf the entire front yard and sprinkler. All of that is already in. We’re just adding an addition.
That’s exactly what we did. We added a 700-square-foot addition. We bought that house for about $160,000. We put about $40,000 into renovating it. We were all in for about $200,000. We went and got a home equity line of credit and got for $75,000 and put that into a 700-square-foot addition.
We were now all in for about $275,000 and took it from a 1400 square foot house to a 2200 square foot house or 2300 square foot house, depending on how you looked at it. We did a little conversion. Then we were able to sell that house for $550,000 because we made it the most beautiful house in the neighborhood. It was now one of the larger houses in the neighborhood. We completely remodeled everything.
We did a huge master en suite. We had a huge walk in the closet and a nice, massive walk-in bathroom. We went from the least-appealing house to the most-appealing house. My favorite part about it is why we lived in it. We were still paying $1300 a month for the original loan amount, and then we had another few hundred dollars that we were paying for that home equity line of credit.
I’m all-in paying $1700 a month for a $550,000 house. Taxes eventually would have been assessed, but that happens down the road. You’re just living for a fraction in this dream house, and we have pictures of it and it’s a super cool house that we went on to sell.
Really and truly, my ultimate favorite part about it is when we sold the house. We sold that house for $550,000. We actually pocketed $245,000. That was our profit, $244,600. The best part about it was we paid $0 in taxes on that quarter million dollars and took advantage of that 121 and an extra $250,000. That’s a chunk of change, but you add the tax-free benefit to it and that’s a massive game changer.
Clint: Plus you got back the money you put down on the house. So all that came back to you, and then you just roll that into another deal that is probably similar to that, right?
Kelton: Exactly. And really, whenever we dive in and go through the whole case study of it, we used 3½% down to buy the house. I was out of pocket $5000 throughout that entire process. We used some 0% interest credit cards and put the rehab on that and then paid them off when we did the home equity line of credit and got a really aggressive rate on that. We were out of pocket $5000 throughout the entire process and put $250,000 into our pocket.
As you said, now you’ve got some serious capital and equity to really put into the next deal. We call that sweat equity, of course, but I won’t bore you with all the details because I think most people probably understand the concept by now on that one. But just because I love the strategy and I want to share, I got to mention that the current property that we’re doing right now, we took it to the next level. As you start doing some flips and doing these things, you get more experience.
The one we’re currently doing started out as just under 2000 square feet and it is now 5006 square feet. A little over 5000 square feet. As you mentioned, we were chatting earlier. It’s called pop on the top. We took the roof off, took it from 8-foot ceilings to 10-foot ceilings, added an entire second floor, and extended it out on the back to have a really big covered, nice patio. I almost won’t even offend you with all of the details on all of the numbers, but it’s absolutely insane what that one’s going to pan out to.
Let’s just put it this way. I’m married now, and even though I get the first half a million dollars to be absolutely tax-free when we sell this house, I would still be paying quite a bit of money in taxes off of the rest of the proceeds we will make because it’s the exact same strategy we just talked about. It’s just taking it to a whole nother level.
It’s cool for us, too, because it’s in Bluffview. For those of you who are familiar with Dallas, it’s the most beautiful neighborhood in all of Dallas, and we’re going to get to live there for a fraction of everybody else for some time. Then when we’re ready to sell it, it’ll be a huge, huge profit.
Once again, it allows you to leverage and maybe buy a little nicer house or a little more higher-end house than you would, which is cool. Plus you get to live in it for less, but most importantly, they appreciate even faster. When you go to resell that thing, there’s just a lot of upside.
The way we always recommend our students is if you’re single, try to max out and get as close to that $200,000 or $250,000 as you can, especially on that first deal. As you go and graduate, especially if you’re married, start making a little bit more and a little bit more, and you buy a nicer house. A lot of people call it moving up.
You make $150,000–$250,000 on the first one, put that into the second one and move into the nicer neighborhood. Make $200,000–$300,000 on that one, put that into the next house and move up to that next neighborhood. The next thing you know you’re looking around and you’re the Joneses everybody’s trying to keep up with.
Clint: The guy that used to cut my hair years ago, that’s what her and her husband were doing the entire time. They buy a house, live in it for three years, remodel, improve it, sell it, take that cash, and they just keep ratcheting up and now they live on the water. They really only started with that small investment because of all the gains.
One of the things that I want people to realize as well that are watching this or listening to it is that you might be thinking, well, Clint, what about the real estate market? Is it going to cool down and you’re not going to get that appreciation? Personally, I don’t think that is a factor right now because we have such a low supply of housing.
In fact, one of the individuals I’m speaking with this week, a client of mine, just put down an offer on a house in the Vegas market. The day that house went on the market, it had three all-in-cash offers with escalation clauses built into it and he actually won. It just shows you that the market is not cooling off the way people say, so they think it’s too much of a risk to do that. I think that in order to make money, you have to be willing to take some risk, wouldn’t you say?
Kelton: Absolutely, 100%. Again, I don’t want to get into the fine print and the details but just look at inflation alone. Even if the housing market corrects a little bit, we know inflation isn’t slowing down. Just owning that hard asset, even if you’re worried like oh, the value of my home may drop a little bit, probably not near as much as the value of your cash sitting in your bank account.
Just look at it simply from that lens and that really eliminates a lot of the downside, is the way that we view it. That’s why we’re still buying left and right and don’t really let it affect us.
The reality is, especially the strategy we’re talking about now is, look, you’re going to have to have a place to live. I don’t care who’s listening right now. You need a place to live. You’re either paying rent, letting somebody else take advantage of all five streams of wealth generation that you can create in real estate investing, or you can get in and start playing the game and you have somewhere to live anyway.
Even if the market does go down, well, don’t sell that time, don’t sell tomorrow. One thing we know about real estate is, historically speaking, 99.9% of the time when it goes down, it comes back up. We used to say with the exception of Detroit, but even that’s caught on now. You really can’t have too many exceptions in that philosophy there.
I agree 100%, but to support what you’re saying, we are not seeing inventory levels rise. Until there’s a huge surplus of inventory, it’s simple supply and demand. We’re nowhere near a time period right now where there’s a huge surplus of properties on the market. They’re flying off as fast as they can list them.
Clint: Correct. If you’re thinking about this and you’re saying, I don’t know anything about construction, I don’t know where to find a house, or I don’t have the time to do something like this, listen, those are just excuses. You can always find an excuse not to do something and then that’s going to be the reason why you’re not going to be moving ahead in your wealth creation.
A lot of times people put these excuses in front of them. It frustrates me because they go, you’re just lucky with what you’ve done with your investing. No, I don’t put excuses in front of what I want to do, and that you figure it out as you go along, as I’m sure you did on that first deal.
Kelton: 100%. There’s always somebody out there that’s done it before that’s willing to show you how to do it. It’s the best advice I can give you. Get started and take action. You’re going to figure it out as you go. If you get stuck, then don’t hesitate to reach out and find someone who’s already done it before and copy them.
Clint: Correct, and you guys teach a class on that. If someone wanted to get a hold of you to learn more about this strategy, you just talk about your ultimate strategy. What would you recommend?
Kelton: I actually recommend going through my mom’s courses. She runs and owns the Women’s Real Estate Investors Network. We jump in and do some teaching with her and training with her as well to help support and grow that. You can find it at womensrein.com but it’s just simply the Women’s Real Estate Investors Network. If you look it up, you’ll find it pretty quickly.
We just had an incredibly huge event here in Dallas. Obviously, you guys were a part of it. Barbara Corcoran, Jamie Kern Lima, Elena Cardone, and some really cool people came out and supported it. You can check out the recordings of that.
That’s the best way to hop on the Women’s Real Estate Investors Network, either Facebook Group, Instagram, or website, and go through a master class. $17 will teach you everything we just covered ten times more. It will be the best investment you ever make in your entire life, in my opinion, is $17 to get some really good foundation, education, and understanding.
There were over 2000 women that came, actually close to 3000, but over 1000 of those were her students. It was super cool to just hear the stories about how many of those women were just absolutely crushing it. As you said, they all had those excuses and those doubts in the back of their mind that were like, oh, this isn’t for me, or oh, I can’t do this.
Once they started surrounding their cells with other women that were actually doing it and seeing the results, it gave me chills whenever I saw hundreds and hundreds and hundreds of women, almost a thousand women, stand up that had already done their first investment deal and that we’re using these exact strategies and found a way to eliminate those doubts in their head because they’re always going to be there. We all have them, but they’re just simply those limiting beliefs. It’s life-changing if you can find a way to just get that first property and/or get that next property.
I’ll leave you with this. One of my favorite quotes is, “The best time to buy real estate was yesterday, but the next best time is today.” We can’t go back in time. I’ve never met anybody that said, man, I just wish I hadn’t bought all this real estate 10 years ago. I haven’t run across anybody who said that just yet. I encourage you. You can’t go back in time, but you can definitely control what you do from today moving forward.
Clint: Great. Kelton, hey, thanks for coming on. I’m going to put that in the show notes as well, one last point I do want to make. How about if you’re not a woman, can you still join?
Kelton: We retired. We laid the mic down and decided to focus on our own personal portfolio and grow our rental assets and all of that. Right now, we are only serving women. As long as you’ve got a woman in your life, a wife, or a spouse, I highly encourage them to jump on and go. Not most, but I would say probably close to 50% of her students and the women in the women’s real estate investors network are doing this with spouses and significant others. It’s still a really great way to jump in and get started.
If you’re a single male, then stay tuned to Clint’s podcast. Watch as many as you can and you may see us again in the future, but the reality is, there are tons of people out there. If we’re not your cup of tea or we’re not the ideal person for you, there are tons of people out there that are willing to show you exactly how to do it and they’ve already done it before.
Don’t try to reinvent the wheel. Don’t try to go out there and figure it all out on your own. I’m sure all of you know by now how much value you’ve gotten from Anderson and Clint’s podcast. They do this stuff for a living. They know how to do this. They know people that do this for a living.
Get out there and find somebody that aligns with your philosophies and your beliefs, and is willing to show you how to do exactly what it is that you’re trying to achieve. As George Russ said, “Real estate is simple. People make it complicated.” So just get out of your own way.
Clint: Well, if you’re a single guy, what I would do is just go to the conference and hang out in the bars and wait for those girls and go tell me everything.
Kelton: That’s right. Pick one of the hundreds that are walking out with the big plaques and awards for all the real estate they bought. That’s a great tip right there.
Clint: All right, man. Thanks for coming on. Take care.
Kelton: Good to see you, Clint. You all take care.
Clint: Bye-bye.
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