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Balancing a Career, Family, and Lots of Deals with Active Duty Service Member Adam Whitney

Real Estate Rookie Podcast
35 min read
Balancing a Career, Family, and Lots of Deals with Active Duty Service Member Adam Whitney

Feeling stretched for time in your investing career? Today we talk with Adam Whitney, an active duty military member, working full-time, with children, a wife, and an active investment portfolio!

With so much going on at once, Adam makes it look easy, juggling his hectic military life while accomplishing his long term goals.

Adam started learning about real estate over a decade ago, but didn’t dive in until 2017. Thanks to his “ruthless work ethic”, he’s been able to stack up his rental portfolio, make meaningful mentor connections, and join masterminds in only a few years!

Adam talks about getting 0% down loans, locking down long-distance real estate deals, doing thorough inspections when buying sight-unseen, and how to start relationships with mentors and real estate professionals you look up to.

With a healthy portfolio of rental properties spanning across the country, Adam is the perfect example of someone who found the time to accomplish his (and his family’s) dreams of financial independence!

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Listen to the Podcast Here

Read the Transcript Here

Ashley: This is real estate rookie show number 38.

Adam: If you’ve never purchased at home, it’s not that difficult. So just getting that mental block out of the way was huge for me and gave me a ton of confidence to invest long distance.

Ashley: am your host, Ashley care, and I am here with your brand new host, Tony Robbins

Tony: guys. Happy to be here. Happy to be Ashley’s new co-host and, you know, hopefully I can, uh, I can show you guys some new things and enjoy this journey with

Ashley: you. Yeah. So this Tony was on last week and makes you guys go back and listen to hear his story, how he’s evolved, grown and scaled just from when he was on back in.

Was it may I think on the original episode? Yeah. So today is the first guest that we got to interview together. Um, the real estate rookie and his name is Adam Whitney. He talks all about doing an investment out of state because he’s in the military. So we’ll talk about two deals he successfully went through and then even a deal that fell through after a very expensive due diligence.

Tony: Yeah. And I also liked this conversation because he talks about mindset a lot. And for me, you know, a lot of what holds people back from getting started. It isn’t because they don’t understand the mechanics, but it’s because they’ve got these mental hurdles that they’re trying to get through. And he talks about how he pushed through those.

Um, he also talks about, you know, like networking and finding a mentor and how that played a role. So overall, a really good conversation. Um, I’m sure you guys are gonna love it.

Ashley: Yeah, I go through during the show and I’ll write down these time codes, um, just like really great wisdom that I think would be great social media clips.

And for him, I wrote down so many things. I was like, wow, that was really good, Adam, thank you so much for joining us today. Do you want to start and tell everyone a little bit about yourself?

Adam: Thanks for having me very grateful to be here. Yes. And my name’s Adam Whitney. I’m married to my brother, Jenny and, uh, my, my two kids.

They’re wonderful. I think that’s probably the most important thing I’ve been in the military since 2004, serving. I’m still active duty today and started a real estate investing a couple of years ago. Seriously. And I’ve been a lifelong learner before that. I’ve got some incredible stories that I think can bring value to your listeners.

Ashley: That’s awesome. We’re excited to hear them. So what was the first step that made you want to get into real estate investing? Was it a book? Was it a mentor? How did you get there?

Adam: Yeah, so it, it actually was a seed planted, uh, quite a long time ago, 2007. I got an education opportunity to. Work on a real estate license.

I was still in the military thinking about getting out, which obviously I didn’t. So I took the opportunity and I started to learn about real estate. Then that next summer in 2008, I moved and I just happened to stumble upon you guessed it. Rich dad, poor dad. And I listened to that book as I transitioned from California to Virginia, but I never really did anything with it, but I was always interested.

It’s a little busy in the military for about the next decade. And then, and 2017, I bought my first primary residence, which was like an eye opening experience for me. I used a VA loan and I thought, Hey, I’ll, I’ll buy this. And then I’ll rent it out. When I leave, I didn’t really understand numbers. And I spent the next year, 2018 and, and a little bit into 2019, really just buckling down and aggressively learning everything.

I possibly could. A hundred, a hundred plus books thousand plus podcasts. Like everything I could learn. So,

Tony: so you said that you first got exposed in 2007, but you didn’t buy your primary residence until a decade later. Was it all just the military and you’d be like being busy with your job or was there also just like some fears and hesitation around like actually making that first big

Adam: purchase?

Yeah. So I, I mean, it was a number of things, so number one, a hundred percent committed to service. And so I was on multiple deployments when I went to, uh, the middle East a couple of times, and I was really focused on my career. I’m still focused on my career, but I was really growing at that point and I needed to be a high performer.

So it kind of just went to the back burner. And then I just didn’t know. I didn’t understand real estate to the level I wanted to. I just knew it was interesting and I knew it was powerful.

Ashley: And, um, first of all, I want to thank you for your service. Um, we really appreciate that. So once you you’ve done all this research, were you married at the time?

Did you say?

Adam: Yeah, I’ve been married to my bride for about 15 years.

Ashley: Okay. So what was her take on this? Uh, she thinks that’s great.

Adam: Yeah, she’s she thinks I’m crazy in the sense that when I latch onto something, there’s no other option, but to win. So. When I said, I’m going to do real estate. That means not on the expense of my family.

So I’m up four in the morning, I’m studying, I’m listening to podcasts. Like I cut music out of my life. I only listen to podcasts when I would work out any opportunity I got or I’d be reading. That’s why she thinks I’m crazy. Not for wanting to invest in real estate, but how aggressive I am when I have a goal to get after.

Tony: And Adam, if I can add one thing, right. So a lot of folks always ask, like, how do you have time to, uh, invest in real estate? Because I also have a W2 job and you know, I’ve got a family and I’ve got all these other responsibilities. What do you feel has helped you balance, you know, building your real estate business with all of your other responsibility?

Adam: Yeah. So here’s what, before I was just working hard three in the morning to six in the morning before I started my job. But one thing that my wife and I both did was we went on a goal setting date. And 2019, and that’s important for a couple of reasons. One, we realized what brought value to our lives and we put a lot of emphasis on that.

Everything else that didn’t make that list, we cut out ruthlessly. So when you get clarity like that, it’s a lot easier to prioritize. Now I’ll tell, I’ll tell you. It’s it’s hard work. You have to be. Disciplined in what you’re doing. You have to cut out stuff that maybe you’re interested in, but it’s not as important to your goals.

So it’s not easy and it takes time. You gotta be willing to get up early, stay up late, things like that.

Ashley: I love that Brandon Turner talks about that too. How him and his wife have a yearly meeting at their, their special spot. I don’t know if he still does the same spot now that he lives in Hawaii, but those alignment meetings, whether it’s with your spouse, your business partners, or, you know, both of them, your spouse and your business partner and their spouse.

It’s just a great to make sure that you guys are staying on the same track. You guys have the same goals. And you’re moving towards the same target. Do you mind sharing with us what some of your goals were that you had put together in 2019? Yeah,

Adam: absolutely. Well, so what we were after was time freedom. We knew that, you know, for me, my horizon is I’m going to retire from the military at some point in the near future, probably the next three years or so.

So we were trying to figure out what are we going to do this year? What’s our vision for three years. And at the end of the day, what we decided was we wanted to be able to, from a financial perspective, make enough money that we could give most of it away. So that was kind of our larger foundational vision.

And then going into 2019, uh, previous to that, we discovered the financial independence retire early community. So we had goals like saving over 50% of our income. We had physical fitness goals. Each of us, individually, my wife had a number of goals that weren’t necessarily the same as mine. Her mindset was different.

My mindset was different, which was absolutely fine. And, um, you know, faith goals, fitness goals, family goals, like so for my wife and I, as an example, 12 dates in the year, at least one day a month. So there were goals like that from a real estate perspective. Uh, we wanted to generate a thousand dollars in cashflow when we started investing that for that year.

Tony: Yeah. And I love the specificity of that goal, right. Like a lot of times when folks get together and they start talking about goals, are there these kinds of, you know, ambiguous things that you can’t really wrap your head around, but a thousand dollars a month in cashflow, it’s really easy to know. Did I achieve that goal or did I not?

And if I didn’t what happened and, and you know, what were the obstacles that prevented it from happening? So I love that.

Adam: Yeah, absolutely. And one of the books I’d read called the four disciplines of execution. I don’t know if you guys read that book, but it talks about lead and lag measures, right? So a lag measure is something that is tangible that thousand dollars a year.

The lead measures are the things you’re doing in order to get to the lag measure. So in order to get a thousand dollars in cashflow, then you probably need four houses that produce $250 in cash flow per month. Right? So. That, that was like one example. And there’s a million ways you can, you can, um, kinda cut that up and figure out exactly what your process is going to be or what your strategy is going

Tony: to be.

Yeah. And not to go too far down the rabbit hole, but that book, the four disciplines of execution is one of my favorite books of all time. And it’s not really a real estate book, but it is, it is a business book. Right. And, and building your real estate portfolio, it means you’re also building a business.

So it talks about metrics and how you like influence your business in the right way. So like, if you guys haven’t read that one, do yourself a favor, it’s a short read, but it’s great.

Ashley: We can put a link to that in the show notes too. If you guys want to go to biggerpockets.com forward slash rookie 38, we’ll put the link there to that book.

Okay. So Adam, I want to hear about how you purchased your first deal. So your primary residence, how that purchase happened, you had said you used a VA loan and then what was it like running it out when you were stationed away from the house?

Adam: Yeah, so that, that was a great experience. Um, well, first off, being in the military, one of the challenges I have, maybe even an opportunity is all everything I’ve done has been long distance.

So I was in California. I was moving to Virginia and I was looking for a house to live in with the thought that we would rent it out. There are some challenges with that. If you’re going to live in the house, there’s some emotional attachment from your family. So we bought a house, um, using the VA loan.

We found a realtor first that was recommended referral-based, uh, which I highly recommend that realtor was fantastic. Because we were virtual we’ve we would FaceTime through many, many houses. We found a house that we loved, but we didn’t know how to analyze for an investment. So we purchased that house for $324,000 using a VA loan.

So no money down, you do have to pay a VA funding fee, which you can roll into your mortgage, but you can get into that house with no money down. So we got in that house with no money down and we lived in it for. You know, a little over a year and then we moved and we rented it out. So I said to, I paid $325,000 for it.

And it rents for depending on the time, 2000 to $2,200 a month. And I think anybody new who knows how to analyze deals and knows that you’re not making a whole lot of money.

Ashley: So what was

Adam: that? It has appreciated though. Um, I’m looking to sell that house and I’m looking at three 95 to 400 K.

Tony: Yeah. So I want to, I want to pause on that a little bit, right?

Because a lot of folks in there hunting for that first deal, they want to hit the 2% rule, the 1% rule, but you didn’t on your first deal. So some people might look at that and say, Oh, you know, you didn’t do it the right way. But my, you know what I always tell folks is that the purpose of the first deal isn’t to make a ton of money anyway, right?

The purpose of the first deal is to educate yourself and give you the foundation to get your second, fifth, 10th deal. So even though maybe financially, it wasn’t super beneficial. What were some of the lessons you learned in that first deal that helped you, you know, build to future rental?

Adam: Well, I think, uh, incredible lesson is it’s not that difficult if you’ve never purchased a home, it’s not that difficult.

You just, I mean, I did it from California so that in most people’s mind, that’s a huge life event. It’s this big challenge and possibly obstacle, but then once you purchase a home, you just go through the process, getting a bank, getting a lender, going in and signing the purchase agreement, closing on the house, getting an inspection, like the things that come along with it.

And the reality is, is there’s a whole infrastructure to walk buyers through that in the most seamless way possible. So just getting that mental block out of the way was huge for me and gave me a ton of confidence to invest long distance with

Ashley: that deal. What advice would you give to our listeners who are looking to buy a primary residence, maybe similar situation to yours, but we’ll use it as a rental, whether it’s now or down the road, what would you have done different?

Adam: Yeah. So there are very simple formulas to understand if a rental property is going to be. Profitable for you. And you’ve got to balance your emotional attachment of living in it with the analytic side. In my opinion, the simple math is you’ve got to understand what expenses there are going to be, which I didn’t have a full understanding of that.

Most people will say my mortgage is this month. So for me on that house, my mortgage is like 1600 and some dollars and I can run it for. $2,000. So therefore I’ll make $400 a month. We obviously, as investors know that that is not accurate.

Ashley: Okay. So let’s move on to the next property that you purchased.

What was the next investment?

Adam: Okay. So remember, I’m, I’m learning a lot here. And I think there’s one important piece of this. As I’m learning, I also started networking aggressively. So I was listening to BiggerPockets podcast. I was listening to other podcasts and people would say, Hey, you can contact me here.

So I did that. And that was important because I reached out to a guy, which I think I’ll probably talk about later, who was running a turnkey company. This was a military guy. And I was looking to invest out of state and, uh, and a good market. Um, and I found a guy doing turnkey properties in Milwaukee, primarily targeting veterans, um, but not limited to veterans.

So my first true investment after I’d learned how to analyze it was a turnkey property in Milwaukee, Wisconsin

Ashley: real quick. Before we go into that deal, how many people did not respond to you of those that you’ve reached out to.

Adam: I think everybody responded to me in some sense.

Ashley: Yeah. I want everyone to take that away because the real estate community is great like that, where it’s not a secret, what investing is.

And there’s so many real estate investors that are willing to help you. If you take the chance to reach out and worst thing that could happen, they just don’t respond. But it’s worth getting that question out there, introducing yourself, trying to make contact. It doesn’t hurt anything. So. Everyone’s homework for this week is to reach out to one or two other investors or people you want to network with.

Tony: Yeah. No, and that’s great advice. Right. And not everyone though is super comfortable. I think reaching out to folks that they don’t know, right. Like I’m, I’m lucky enough where I feel comfortable walking into a room and just striking up a conversation with strangers. But like I tried to get my sister to go to meet with me and she’s like, I can’t do that.

She’s like, I’m not doing that. So Adam, you know, whether it’s in person or whether it’s online, if I’m a new investor, I’ve never done a deal. How do I introduce myself? Like, like how do I break the ice so that it’s inviting for a response to come back?

Adam: Yeah, I think, um, a lot of people talk about if you’re trying to reach out to somebody, bring value to them, but quite frankly, I think, you know, you just need to be a good dude.

Right. So like I see guys that or gals that I align with and I love what they’re doing. I just tell them, I love what you’re doing. I’m super interested. I’d love to jump on a call with you. Here’s who I am. Here’s what I’m trying to do. And it is very abundant. The real estate community is incredibly abundant with information with deals.

It’s it’s unbelievable. So. While you as a newbie may not have a ton of value in your to bring to people, just be a good person, just reach out and tell them you love what they’re doing. You’re very interested. This is what you’re trying to do. These are some obstacles you think you have, and I can almost guarantee you most people reply.

I know I

Ashley: will. That’s great advice. Thank you. So let’s talk about Milwaukee. What happened next?

Adam: Okay. So this turnkey company, we can talk turnkey. There’s a lot of problems with turnkey, but I found a great turnkey company. The way they do it is they get a property that needs about 25 to $30,000 in rehab.

And they show you it before it’s rehabbed and they say, do you want to purchase this property? Here is the proforma analysis on it. So once it’s all done, we think it’ll make this much money. And I said, yes, absolutely. Those are great proforma numbers. I think the cashflow conservatively estimated from this company was about 200 to $250, very conservatively.

So I got an opportunity to fall along their rehab process. So basically every week is the re I got the statement, the scope of work. So I saw everything they were doing every week. I’d get a video and at the end, I’d close like a normal property. So on this particular property, I’ve purchased it for $108,000.

It appraised for $120,000. So on closing with just this one signature or multiple signatures, I added $12,000 to my net worth.

Ashley: That is great.

Adam: Yeah. And so this property rents for $1,300 a month. It’s uh, my, my principal interest taxes and insurance. Is only $639 if you want. I can go into all my expenses on that as well.

Ashley: Yeah, definitely. We love the breakdown of the numbers.

Adam: Okay. So my vacancy, so I calculate property management because I’m long distance and I would probably do it even if I was managing myself, vacancy, CapEx, maintenance, and repairs. Okay. So for me, since it’s a fully rehabbed, w a well done rehab house, I only calculate about 5% for CapEx and maintenance and repairs.

So for. That was $65 for each of those a month. And then for vacancy and property management, between seven and 8%. So that’s $91 for each of those. And this house actually cashflow is $350 a month.

Ashley: That is awesome. Great job on that deal.

Tony: There’s a couple things I want to unpack there. Right. So you, you said that as you were kind of vetting this property, that the turnkey provider gave you a proforma, I guess first, can you define proformer for folks that don’t really know what that is?

And then for someone that’s a newbie, how would you, how would you vet that that’s actually accurate, right. Because some turnkey providers might, you know, flip some of the numbers to make it look more appetizing than what it actually.

Adam: Yeah, absolutely. So proforma is just their estimate of what the numbers will be given certain parameters.

So. They’re saying at this purchase price with this amount down at this APR for the loan, you’ll get on the house and these expenses, this is how much you’ll cap. This is how much you’ll cashflow on that house. Couple of other things are going to show you is what your capitalization rate is and what your cash on cash return will be.

So I think that’s important for newbies too. People are uncertain, what their criteria should be. So for me, cash on cash return, I was looking for 11% or better, and I’m just baselining that off of like what I could get investing in stocks or something else. So 11% return on my cash is good for me. And then they give you a cap, an estimated capitalization right now.

I will tell you this about turnkey companies just for a last point is they don’t always the bad ones. Don’t show you all the expenses. Right. So you’ll see them leave out capital expenditure because they’re rehabbing the house. If they’re doing that. I, I’m not sure. I would personally trust

Ashley: them. I want to ask real quick, Adam, about the proforma that the turnkey company gave you, was it close to the actual numbers for the unresolved?

Adam: So it was actually, my end result was better.

Ashley: Oh, then what they had said

Adam: significantly better. So they purposefully conservatively underwrite it, they use the bigger pockets analysis tool for this. They give you that the PDF print out of that, and they actually do a video walk through on YouTube of it.

And they do it very conservatively. Like as an example for your mortgage interest rate, they were right in five and a half percent. We all know. That even for investor loans, you’re getting, most people are getting significantly better than

Tony: that. In terms of the actual rehab itself. Adam, did you have any say on what the turnkey company was going to do or were you just kind of the recipient of the, of the end product?

Adam: So no, no real decision authority on that, but you could have some conversations. I’ll give you an example. My also bought a duplex from this particular company. And when I said, who’s going to be responsible for cutting the grass. Cause there was no garage. So nowhere to store lawnmower, they said, well, the first answer was, well, maybe you could hire no hire somebody to do that.

And I told him, I’d prefer not to you. And I asked them to put up a large enough shed to put in a lawnmower and they did that for me. So there, there was an example of like some influence I got, but no real decision authority on that.

Ashley: I found that to be common with turnkey companies. Where they set the standards like our houses, especially for new development, our houses are built like this.

These are the cabinets we put in. This is the flooring we put in. You maybe get two color choices. This is the paint we put on the walls. This is everything we use. And basically you’re just getting exactly what they build brand new. And you don’t have a ton of say in that the Duke care at all, Adam, that they kind of handled everything and picked everything out that actually make it easier on you not having to make a ton of decisions.

Adam: Yeah, I was not emotionally invested in pink colors or anything like that. The questions I had up front were, what kind of materials are you going to use that are gonna last a long time? So like vinyl plank, flooring, types of countertops, stuff like that. This was, this is like a C neighborhood. Work in middle-class neighborhood.

And I got an opportunity to look at the rest of their portfolio and see what other houses they’d done and how they’d been performing. So I was very confident in this particular company.

Tony: Now this was a, a C neighborhood. Where were you specifically looking for that? Or was it just because that’s what the turnkey offer or the turnkey provider offered and you said this looks good, or what was your strategy and actually selecting the properties.

Adam: So. A couple of things here. One, the turnkey provider to me was less important than the people. So the two guys who own this company are also active duty military service members. And I talked to them. Which gave me confidence in their company. I was confident. Anything they’d put in front of me would be good.

Now from the Milwaukee pers perspective, I did market analysis on Milwaukee to see things like population growth, income growth, you know, how their vacancy rates were, and it was all positive. It was all trending up. It’s a pretty good area to invest.

Ashley: So what’d you do with another turnkey property again?

Adam: Yeah, absolutely. Yeah, absolutely. It’s so easy. I don’t, I mean, all I do is manage my property manager. I probably spend no more than two hours a month on it.

Ashley: And the property manager was with the turnkey company too, or it’s a separate company

Adam: third-party company. So when you sign the lease, couple things that are really incredible about this particular company is you got the tenants in place.

And the property management is in place and you can have influence on the tenant screening. I was able to do some of that and not only that, but they, they basically warrantied all their work for the first year. So any calls or anything that comes up, they just take care of it. So you really don’t have a whole lot of maintenance repairs or cap X expenses, especially in the first

Tony: year.

So if I’m someone that’s new, right. And, and, you know, I want to get into real estate. Investing in turnkey seems like a, like a great way to get started. What advice do you have for someone that says, Hey, I want to do exactly what Adam did.

Adam: Yeah, I would tell you to vet the people and that the way the turnkey company does business, get some referrals, talk to other people, understand the analysis and what they are, including in their analysis and what they’re not including in their analysis.

Absolutely. That’s the people.

Tony: Yeah. Your point, right. About like doing the analysis. I know a lot of folks get, get kind of caught up on that because they may not have done it before, but I think it goes back to your earlier point about building a network, right? When you can kind of bounce ideas off of people, you know, whether you’re on the BiggerPockets forums or in the Facebook groups, or you’ve got other folks that, you know, if you can say, Hey, here’s the deal that I’m looking at.

And I feel like you see that all the time on, on the rookie Facebook group, right. Where, Hey, I’m looking at this deal. What do you guys think? Give me a thumbs up or thumbs down. And just having that sanity check goes a long way.

Adam: Yeah, totally agree. I actually joined a really inexpensive mastermind group, which was really powerful for me because, you know, if you’re investing, maybe your family doesn’t know anything about it, or they’re not interested.

Your, your friend group probably isn’t real big into it. So get in the BP forums, get into a mastermind group, if you can. Yeah. Surround yourself with people who you can bounce ideas off of.

Ashley: Yeah, I’ve been in a couple mastermind groups, just on Instagram. Someone will start like a group chat with a bunch of people on Instagram and just say, Hey, does anyone want to, you know, do a zoom call every six weeks or every other week.

And they’ve been really great. And those are just free ones. Not even paid ones. So I wanted to mention too. I mean, you gave great information about this turnkey company. So I think a lot of people are going to be interested now. And we did do an episode. It was episode 29, all about turnkey rentals and we had on two people, who’ve actually built their wealth using turnkey properties.

So if anyone wants to check that out, it’s biggerpockets.com forward slash rookie 29. So I had seen in the show notes, there was something about Arkansas and some deals lost in Arkansas. I want to touch base on that because you you’ve had a great deal. And now what happened with these other deals?

Adam: Yeah.

So joined the mastermind, bought that single family turnkey, and I was just all from there. So I was looking for other ways to do deals. I said, this turnkey model is great, but I want to kind of go off onto my own. So I got on bigger pockets. I reached out to a realtor who was really active on there, him and I talked, we had, you know, really aligned in kind of our thought process, incredible guy.

And he started hunting for properties for me. So I found two duplexes that were being sold together for a total of $150,000. So you’re talking four doors, two duplexes on one piece of land that came with a number of challenges. The numbers penciled out. I was ready. I was going in to buy it and well, number one, they had a commercial loan on it.

So it was two separate parcels, meaning the land it’s kind of assigned to. So it was two separate properties, but they had an investor loan. So they were trying to sell it together. The challenge there is you can’t get a, a traditional loan on that from a bank, unless you do it. Two separate things. So couple of options, it turns out you can call a County.

They’ll erase the line. On the piece of paper and make it one parcel for you, if you want. It’s really that simple. I learned that, um, didn’t end up doing that. I was going to purchase them both separately so that I can move them both separately. Um, and then I went into due diligence, right? So the numbers pencil out, I’m going through the process of purchasing it and what we did uniquely for due diligence instead of having an inspection.

What we did was we hired independent contractors to do each portion. So I sent a roof guy out there who actually did it at no cost to look at the roof. I sent a plumbing guy out there who was only about 75 bucks. I sent an electrician out there who is only about a hundred bucks. And by the time I had added up all the independent contractors, it was less than what it was going to cost me to get a generic inspection, because in my experience with the inspection.

The inspector doesn’t want to hold any risk. So he just says, I recommend you get a electrician out here. I see. Possibly a problem. So I just skipped the inspection. I went straight to general contractors or contractors.

Ashley: Did those contractors give you bids to, along with telling you what needed to be replaced?

Adam: Yes, I did. And that’s kind of where the deal fell apart for me. So when they looked, everything checked out, it did need some work. Everything checked out except for the plumbing. The plumbing was so poorly done, that it almost all needed to be completely replaced, which was going to cost me way too much money.

It completely ruined the numbers and that’s, uh, I had to walk away from that deal, unfortunately, and I had a similar thing actually with an apartment complex ed JV done. What

Ashley: was the total cost? It was to have all these vendors, these contractors come. And then how much do you think you would have lost if you would’ve went through with this?

Adam: Yeah, so I, I think I paid around $300 in total for all of that. And it would have been about $25,000 loss, maybe $30,000 when I penciled it all out. So it was a significant savings for me.

Ashley: Okay. Definitely worth that $300 investment to not lose $25,000.

Tony: And Adam, if I can add one thing as well. Right. So, you know, a lot of folks always ask me like, Tony, how do you invest out of state?

You know, how do you feel comfortable buying properties that are multiple States away? But what you just walked through is the same exact process I go through with every property that I buy. Right? Like I get it under contract, then I send. Experienced professionals out to look at the property and they give me their assessment.

If I like what they said, I move forward. If I don’t, then I walk away from the deal in the same way that you did, but I’ve purchased seven properties now. And of those, I’ve only seen one of them in person before I bought. And all of the other ones I relied on the, the, the, the team that I’ve built to help me make the decision on whether to buy or whether to walk

Adam: away.

That’s incredible. Yeah. I’ve never been in Milwaukee. And I own two

Tony: properties there. Yeah. I just bought a property in California, like an hour away from my house. So I still didn’t see it in person. Right. Because you know, I’ve, I’ve, I’ve got the systems, I’ve got the process in place. I love it, man.

Adam: Yeah.

That’s awesome. And I will say, I didn’t know how to do any of this stuff. I learned through networking, talking to people. And trial it kind of trial and error. This is something I think that correlates from the military that you’re, um, I think the listeners of this podcast would benefit from is as humans.

Our primal instinct is survival. Something that’s a problem for survival is uncertainty. So if it’s uncertain, we don’t want to take the risk in doing it because it goes against our natural instinct of survival. If you don’t take action, you’re not going to have progress forward. You have to take action.

And each time you take action, you’ll learn and you’ll take smarter action. The next time.

Tony: I love that.

Ashley: And I’m, I’m loving all this mindset stuff, including not just deal analysis and how you’re investing, but I’m loving the mindset stuff too. This is great information. So let’s move on to our segment called the MVP.

And this is where we want to know about a key player, someone really valuable on your team. So the most valuable player that has really helped you with your real estate investing, who was that person?

Adam: Yeah. So, um, I’m gonna go with the kind of, uh, a mentor. Maybe he doesn’t know, he’s a mentor and sometimes that’s kind of how the relationship goes, which is a guy named Stuart Grazer.

He actually owns the turnkey company I’ve purchased from. Stuart grades you’re he, it was more than just, Hey, buy a property in my turnkey company, I could call him and ask him questions about stuff. And he actually led me to a mastermind group, which you know, I got four other military guys in with me, Travis, Tom Martin, Brandon, and Justin.

And that’s my MVP because he gave me a network. He showed me a path and, you know, he let me go in and, and be a part of what he was doing. And it was really beneficial for me. It’s helped me grow exponentially.

Ashley: How do you recommend someone find someone like that? Or how did, I mean, obviously this guy is really busy.

How, why do you think he takes the time with everyone like that? Or was there something special you did so that you guys could, you know, get to know each other? What’s your recommendations to find someone like? Yeah,

Adam: I think kind of back to your first point, Ashley of reaching out and talking to people.

Once you talk to somebody you’ll know whether or not that’s a good relationship for you. Everybody’s different for me. I really loved what Stu was doing because he’s a, he’s a giver. He’s all about giving high character human. And that’s kind of what I wanted to align myself with. And honestly, I just reached out and talked to him and we kind of clicked and, uh, and I think it helps a lot of people, honestly, I really do because he is a giver.

Um, so just an incredible human. And I’m grateful to. Now, if you could

Ashley: pick out one thing that he has really given you value for one piece of advice or maybe one piece of wisdom, what would that

Adam: be? I think just talking about how you frame with your mindset of providing opportunity, helping other people when being abundant and just, he has a really great giving mindset and that has helped me.

Think about it because when you went early on in this, you’re like figuring out how to make money, which is a huge part of this. But what you find is when you give to other people, you also end up receiving. So if you can give with no strings attached, it comes back tenfold. It always does. And I think that’s one thing he’s opened my eyes to.

Ashley: That’s awesome. That’s really great. Tony, do you want to take us to our next segment? This is your first time doing it.

Tony: This is my first rookie requests line item. So, Hey, we’re going to take a, like an actual question from a guest. And for those of you that are listening, you can reach us anytime at one eight, eight, eight, five rookie, uh, to leave a voicemail and we might use it on the next show.

So Adam here’s today’s question.

Adam: Hi, I’m Kayla from Kansas city. Uh, I’ve heard that it’s great to invest in your hospital, which is great, but what about a military pavement? A military base near me, and I see people coming and going, and I think that sounds like it would be a good rental market for moderate to more expensive houses and not just the cheaper ones.

What do you think about that? Yeah. What a great question. So military basis, let’s talk about the pro of a military base. The Provan military base is. They usually don’t go away because it makes Congress people upset. So you always have a rental base. The thing that maybe your listeners don’t know about the military is military service members get a housing allowance.

That is non-taxable. So if they live off base, they’re getting a housing allowance. So you know exactly how much you can look it up on the internet, different people in the military, getting for housing loans. So you always have a rental base. That is a good. Thing around military base, pretty safe, secure economic workforce, right?

Some of the challenges are depends on where the base is. So there’s a base and Cora not on near San Diego, the prices are incredibly high. So you may, your numbers may not pencil out there. It is a smart move to look at those places because you know, you have a rental base there, but just know that it’s just like any other market.

Tony: Yeah. So my, my first rental actually is near a military base as well. And my, my tenants, they they’re working in the military and they’ve been fantastic. They signed a two year lease upfront. Um, I don’t think I’ve heard from them since they sign their lease. Like there’s like no issues at all. So I personally love the consistency.

And like you said, like, you know that your rent for the most part is going to get paid. They’ve done a great job taking care of the house. I love run into military families as well.

Adam: Yeah. They’re not losing their jobs.

Tony: Yeah,

Adam: they’re on a contract. So,

Tony: and that was, you know, like, like managing, you know, being a little or through COVID.

Right. A lot of folks were nervous about, you know, are my tenants going to be able to pay rent. Um, but, but like you said, having someone that’s working in the military, but it was never a concern for me and it never concerned for them. So there some you’re hedging your risk a little bit there as well.

Ashley: Yeah, exactly. Right. Essential business employee really. Okay, so let’s move on to some random questions. These are, we have a list of them. Sometimes we pick from the list. Sometimes we don’t, we’ll see what Tony comes up with today. And these can do with real estate, maybe not little mindset. So I’m actually going to take the first one because I wrote a note down and I wanted to ask you about this.

You had briefly mentioned about doing a JV. For a multifamily property. Can you explain what a JV is? And then maybe just give us a brief summary as to why that didn’t work out?

Adam: Oh yes. So that JV stands for joint venture. So you’re going to partner with, you know, one, two, three, four, five people. And you’re going to do a deal together.

Each person on the JV for multi-family will have an active role. Again, listening to podcast, I reached out to somebody who, who offered it out there. I had, um, a little bit of capital available and I said, I want to get involved with multifamily. And he said, great, we’ll bring you on the team. So there were.

Five of us. We went into a 42 unit in the st. Louis area numbers, penciled out. Things were good until we got into due diligence. There was, again, another plumbing type issue. This particular issue was it was on a commercial septic thing. And then the city water was really close. So the city couldn’t force us to pay, to get hooked up, which was going to be probably a hundred, $150,000.

We went to renegotiate with the seller to get a concession at closing, and we couldn’t close that gap, close enough for it to pencil out still. So we ended up having to walk from that, which is really unfortunate. Cause that’s, that’s a little more than a hundred dollar EMD.

Ashley: Is that, uh, something you’re still pursuing this JV?

Are you guys looking for another deal right now in multi-family

Adam: not with that team? Uh, not with that team. No. That once that those guys all kind of went separate, separate ways, they’re all still doing deals. In that space, but that team is not together anymore.

Ashley: Okay. Yeah. Interesting. Cool. Okay, Tony, go ahead.

Your turn.

Tony: So what, what would you say is your X factor? Like what’s your, your special talent that’s helping you succeed in real estate that you know, maybe a lot of people don’t know meeting you for the first time?

Adam: Yes. I think ruthless work ethic. Honestly, when just, I just want to win. I want to win to meet my goals and my vision.

I want to be able to make enough money to give most of it away. I want to have a purposeful life. So ruthless work ethic is my special power.

Tony: Yeah. And to pause in that, right, you’ve got a big, why. Right. And like you said, it’s not just money in the bank, but it’s something deeper than that. And when you, when you’ve got a family and you’ve got a W2 job and you’ve got all these responsibilities, if the why isn’t big enough, then it is easy just to lose track and give up on those goals.

So I love that you’ve connected to something deeper now, as, as we look into next year, right. We’re looking at 2021. Have you and your wife done your, your goal planning for next year yet? Or like, like what are the goals for next year? What are you guys working towards?

Adam: Yeah. So we’ll do that end of December, beginning of January, but I have one more tour in the military maybe, which would take me to retirement and I’m.

Um, possibly going to Tampa. So what I’m doing right now is built in a transactional business. I’m going to go find deals wholesale. Um, so I am building a legitimate business on that. Not just like a hobby that I can walk into after the military. Um, that will be the foundation for. My wife, Jenny and I to kind of attack our goals.

We revisit our goals every so often. So we don’t know. We don’t necessarily know yet for 2021. There’s a lot of uncertainty in the military for us.

Ashley: Adam, you talked about, you like to win your winner. What do you guys do to celebrate your wins? Do you guys do anything special?

Adam: Yeah. So less COVID our thing is experiences with our family and vacations.

So that was part of our goal setting. Last year, we wanted to take three vacations and, um, that’s what we do to celebrate our wins. We create experiences for our families, memories for our family, all about the vacation.

Ashley: That’s awesome. Okay, Tony, you want to take the last question? Yeah, I get

Tony: one more question.

Oh, are we good to? Oh, awesome.

All right. So I want to go back to like you being able to balance things. So what is your, what is your morning routine look like Adam? Like when you get up, how are you setting yourself up for success in your real estate business?

Adam: Yeah. What a great question. So I get up around four 45, five o’clock normally, sometimes earlier I’ll spend probably.

And our kind of going through I’ll educate myself. So I’m listening to a podcast, I’m getting my normal work stuff ready. And then at about six o’clock I’ll go and I’ll work out also between five and six. I’ll do any of the tasks for business stuff. So if I’ve got to reach out to a property manager, and if I’m trying to close a deal, I’ll do all my work in those hours.

And then from six to seven, I’ll go work out. And then, um, from seven, roughly to seven 30, I get ready. And then I go into my military

Tony: day. Awesome. And so have you read the miracle morning by Hal Elrod? So for those of you that don’t know, it’s a book to kind of out, you know, uh, I guess describes what the perfect morning looks like to set yourself up for success.

Um, I’ve read it. Um, I’m trying to get back into the routine of, of fallen off a little bit, but it’s it savers such. Yeah. Right. And do you, can you define that for folks who don’t know what say, what does that happen and how does it.

Adam: I might need some help here. I know. So some of it’s like affirmations, visualization.

Can’t remember what the E is. Yeah. Exercise, right? Yeah, of course I exercise. That’s a big one for me. And a lot of it really just has to do with like preparation, like knowing what you want to do and having a framework that’s going to enable you for the rest of the day. I don’t remember them off the top of my head.

I tried it out, you know, meditation was in there and I wasn’t so good at that part because I’m just like a hundred miles an hour. But, yeah, it’s good. You just need, you need something, you need some framework. You need to be focused. You need to think about it the night before and you need to be disciplined to it.

You can use any model. Savers is a great model, um, but just be disciplined to it.

Tony: Yeah. Um, I’m a big mindset guy. So I love when we can kind of PARP in those things and dive into it. Adam, you’ve been a fantastic guest. Uh, loved your story. I’m sure the listeners will get a ton of value here in it as well.

If folks want to get in touch with you or it’s a good place for them to go work and be more, learn more about

Adam: you. Yeah. So I’m most active on Instagram. So it’s will to win investments is actually my Instagram. There’s an underscore between each of those words. And then, um, I recently started a website, no strings attached to no agenda.

Literally. I’m just trying to provide you. Hey, here’s what I’m doing. Here’s what I’m learning. You know, here’s what I know about real estate. If you will, the one investments.com there’s no, that’s all it is is here’s my journey. Hopefully that’s going to help you. I want to bring you

Tony: awesome, brother. Well, thank you.

Ashley: That’s cool. I look forward to looking at that and I did pull up savers real quick. So if anyone was wondering it, a silence, affirmations, visualization, exercise, reading, and scribing the miracle morning. Okay, well, thank you so much, Adam, for joining us today. Uh, we loved hearing your story and best of luck too, on continuing your investment journey.

Adam: Yeah. Thanks a lot. Ashley, Tony, I’m grateful to be here and I appreciate you guys.

Ashley: I am Ashley care at Welp from rentals and he’s Tony Robinson at Tony Jay Robinson. And we’ll see you guys next week.

Watch the Podcast Here

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In This Episode We Cover:

  • How to make time for investing with a career, family, and hectic schedule
  • The importance of goal-setting for you (and your partner)
  • Setting specific goals to silo your vision for a brighter future
  • Gaining the experience to get your 2nd, 3rd, or 4th deal (and beyond!)
  • Why you should start “aggressively networking
  • How to reach out to your real estate heroes (and get responses)
  • Reading and making sense of a pro forma analysis
  • Optimizing your home inspection process (for less!)
  • How to tackle a joint venture (even if it’s your first)
  • How your “why” drives your deals forward
  • And SO much more!

Links from the Show

Adam’s MVPs

Rookie Deal

  • Purchase Price: $108k
  • Appraisal: $120k
  • Rental Income: $1300/month
  • Cashflow: $349!!! On a turnkey

Books Mentioned in this Show:

Connect with Adam:

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.