1702: Special Guest Steven Andrews (Part I)
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Jennifer - Welcome to Episode Two of Season 17 of The Growing Empires Show. Today I'm here with my special guest, Stephen Andrews, and we're going to talk about how to climb out of debt with real estate. What inspired him to write his book, The New American Dream A Simple Roadmap to Purchasing investment Properties and how he aspires many real estate investors to get off the fence and start investing in real estate. So make sure you stay tuned.
Speaker 2 (00:00:31) - Welcome to Growing Empires, hosted by real estate entrepreneur and trusted investment advisor Jennifer DeJesus. Growing empires provides insight to building wealth through passive income, producing real estate investments for those who want to build and manage a more profitable real estate portfolio.
Jennifer: (00:00:52) - Welcome, Steven to the Growing Empire show. I'm so glad that you're here.
Steven (00:00:56) - Yes. Thank you for having me.
Jennifer: (00:00:57) - Absolutely. Let's kick off this episode with you, sharing a little bit about your background and the work that you're doing now.
Steven (00:01:04) - Absolutely. So I got my start in real estate a decade ago after taking a real estate class in college and and really falling in love with real estate.
Steven (00:01:12) - And I grew up in a blue collar family where my parents owned a business and, and I wanted to to have something more. I wanted to have a business myself. And,, when I graduated college, I was $75,000 in student loan debt. I was making $45,000 a year being a retail store manager. And I knew I wanted something more. And so I thought about my time back at High Point University whenever I took a real estate class there. And I took a leap of faith. And so a decade ago,, I got linked up with my mentor named Joel, and he was looking at downsizing his real estate company. He wanted to spend more time with his family, and I wanted to grow. And,, it was just a great match. And. And I still remember him telling me to read a book called Building Wealth by Russell Whitney, which really, really helped kind of lay the foundation of me getting in this great business called real estate. And so when you fast forward a decade, several hundred rental units later,, flip houses on loan money now just wrote a book called The New American Dream.
Steven (00:02:16) - A simple road map to purchase an investment property just went number one,, best seller this week, which has been great. And also congrats, I appreciate it, I appreciate it. And,, just launched a company called Shorts Consulting, which really kind of takes a step further and an extension of the book to really go even deeper into how to become successful in this great business called real estate.
Jennifer: (00:02:42) - Oh, excellent. So I am really excited to talk to you about all of these things. Today we're going to specifically focus on, you know, how you really climbed out of debt with real estate. And, you know, I've asked Steven to join me to share his wealth of knowledge on the tips and tricks that he's gained throughout his years in the business thus far. I'm going to jump right in with a couple of questions for you. Going back to you talking about, you know, how you initially started in the debt that you were in. Can you share a little bit more about the key turning points to to that, you know, to that role? So your $75,000 in debt, you're taking a leap of faith and a new essentially a new industry to some extent.
Jennifer: (00:03:20) - What were some of those like pivotal moments that really helped you kind of develop and get your feet wet and get started initially?
Steven (00:03:28) - Absolutely. You know, I have to give a ton of credit to my mentor, Joel. You know, anytime you do something new, it's very scary, right? You know, that's just human nature of it. And so it's really good when you surround yourself with people that have been there before you and that has had some success, made some mistakes, and they're able to kind of guide you. And that's exactly what Joel did., he really helped lay that foundation. And so it became so much easier. You know, I give him so much credit because when I initially started thinking about real estate, I thought you had to have money, and I thought you had to be well connected. And you don't have to have either one., you know, I still lived at home because I didn't make enough money to be able to pay my student loans, to be able to live and to have a rent or mortgage of myself, of for a property, you know, to live in.
Steven (00:04:21) - And so it just really helped me. And that was kind of the turning point., once I got linked up with Joel, he said, hey, you don't need those things. He said, you know, that's what the world might tell you. That's what social media might look like. But anybody can get in this business if you do it the right way. If you surround yourself with people that have experience, that have been there before you and you lay that foundational groundwork, anybody can do this.
Jennifer: (00:04:47) - Sure. So how did you meet Joel?
Steven (00:04:50) - , my dad knew him., so my dad had known Joel for quite a few years, and,, my dad told me, hey, you know, if you're really interested in getting a real estate, you know, I can. I can link you up with. With Joe. I don't know if he would help you. I don't know, you know, if he's. He's looking at selling anything. You know, my dad didn't know a little bit about Joel, but he didn't know a lot,, about maybe what Joel's role might be.
Steven (00:05:16) - And,, that was the great part. You know, it's it's crazy how life works sometimes. And just that one introduction has paved the way for quite a bit of success.
Jennifer: (00:05:27) - So what did that look like initially? So you met this mentor. Your dad knew him. You kind of connected. Now you're talking him about real estate and how to get started. What were some of the first things that he did? Did you guys buy deals together? Did you, you know, were you working for him at some point? Like how did that actually, you know, go from the meet up to now we're actually doing real estate.
Steven (00:05:49) - Right? So I was working in. Retail linked up with Joel and and Joel told me very honestly up front. He said, hey, I've had five, ten, 15 people over the last ten, ten plus years that said they wanted to really learn how to get into real estate and be successful at it. And he said, I'm just going to be honest with you, none of them really wanted to put in the work.
Steven (00:06:11) - And he said, this is work. You have to do certain things. And so before Joel would really even put a bunch of time and effort into me, you know, he said, hey, I need you to read this book called Building Wealth by Russell Whitney. And I started getting through that book and he saw that I was serious about it. So then he started to put more effort into it and said, listen, you know, I'm looking at trying to downsize my business. I want to spend more time with my family. And I think this could be a great match. But, you know, I really want you to be a sponge. You know, of, you know, the knowledge I'm giving you really, you know, sponge it up and and learn from my mistakes. You don't make the same mistakes I did. And and it was just a great match. You know, he wanted downside. I wanted to grow. And it was just it was perfect timing for it all.
Steven (00:06:57) - And a lot of people say, well, you know what if what if I can't find my Joel or whatnot? There's there's things out there. And that's the reason why I created this book, and that's the reason why I created for it, because I want to be able to help people., just like Joel helped me. And I think there's plenty of different avenues you can do even today to be able to do that.
Jennifer: (00:07:18) - Well, let's talk about this book, The New American Dream A Simple road Map to purchasing investment properties. And if I read correctly, it's it's now live. Right. You can purchase the book now.
Steven (00:07:29) - Yes., went live and published March the 12th., where it is actually,, sales have really just went through the roof and I am now number one best seller, which is really cool to see.
Jennifer: (00:07:41) - Wow, that's really awesome. Congrats. So I assume it was March of last year because,, ironically, March 12th was just yesterday.
Steven (00:07:48) - Well, no.
Steven (00:07:49) - So it was it was yesterday. Oh, okay., wow. Just a ton of different sales. The publicity team did such a good job getting the word out of the book. And I've had such a ton of outpouring of support,, just in the 24 hour period. So it's been a little bit overwhelming, but it's also been really fun to see.
Jennifer: (00:08:09) - Yeah. Well, that's really awesome. Congrats. So what actually made you decide to write that book?
Steven (00:08:16) - So during Covid, a couple of years ago,, during Covid, I had several different realtors come up to me and said, hey, you know, people want to know what you know, there's so many new people wanting to get into this great business called real estate. There's so many new realtors that want to be investor realtors,, and specialize in that for people that buy investment properties. But there's not a ton of courses. There's not a ton of guidance out there for people that want to specialize in single family homes, duplexes, triplexes, quad plots to small little,, dwellings.
Steven (00:08:50) - And and there's not, you know, when I started to do the research, there's a ton of information if if you want to go bigger and commercial and, and in apartment complexes, but there's not a lot of single family stuff or duplexes, you know, the smaller deals. And,, because I guess that's just not as sexy as, hey, I get to own an apartment complex, and, you know, I get that part. But,, for me, this business has been so great, you know,, not only do you get to use someone else's money to buy you somebody else, make your mortgage payment, which your tenants pay the rent, and then you also make money,, every single month. But then you also, you know, the deal is appreciated over time. And so there's nothing else in this world that allows you to do that. And so I started to think, you know, Joel poured so much into me, you know, how could I give, give back? And, you know, can I transition into to doing a lot more of that and giving back and and that's what really got me started.
Steven (00:09:50) - , started writing the book took about a year to do. And then I started to, to funnel in for shorts consulting because I really want this to be a one stop shop for for people that want to be successful in real estate.
Speaker 4 (00:10:02) - Okay. What do you hope.
Jennifer: (00:10:04) - The readers gain from that book?
Steven (00:10:06) - So I hope the readers gain what I gained from Russell Whitney's book. And that is really the the map, the roadmap on on how to really, truly purchase investment properties the right way. And when you go into the book,, you know, the first chapters, first things are first to maintenance, to,, authentic relationships, to financing, to to be familiar with the locals, to the rental process, to the last chapter. When's enough? Enough. And and I would love to cover that to talk more about that here in a few. But,, there's so much in between. And so I didn't leave anything out of what I've learned over the last decade, because it's also.
Steven (00:10:50) - All in all, builds on one another. You know, if you if you don't get the first things right, if you don't get your company set up right, an LLC or your insurance. I mean, you know, if you don't get that foundation right, it just makes things so much harder. And so I really wanted to to have that for somebody where, you know, they had all the answers, hopefully in one book.
Speaker 4 (00:11:13) - Okay.
Jennifer: (00:11:14) - That's really awesome. So, you know, many aspiring real estate investors are hesitant to even get off the fence or get started. And, you know, I think that has a lot to do with fears, challenges, self-doubt, you know, some of the things that you've actually mentioned already. So why would you say today is the right time to if you're going to take that, if you're going to make that move or take that risk? And essentially, why is today the right day to do it right?
Steven (00:11:43) - You know, I.
Speaker 5 (00:11:44) - Think.
Steven (00:11:45) - The human nature side of doing anything new, whether it's real estate or something else, is to be afraid.
Steven (00:11:50) - And and, you know, when I think back on my time, when I first got in this business, I said, can I do this? What if one of the units isn't rented? Can I make the payment? I mean, there's just so many things that go through your mind. But I tell people that if you want to get in this business, get in this business, this business is one of the best there is, you know, where there's no better time than now. You know, I know there's a lot of hot buttons out there about interest rates and some of the prices being higher when it comes to interest rates, if that's your fear, I tell people, don't buy a property based on an interest rate. I've never worried about what the interest rate was as long as the property cash flowed. And so you run your numbers and you always do it conservatively. So, you know, you always utilize a higher interest rate to make sure,, you know, in your figures, you know, to make sure that you're not, you know, you do it from a conservative base in case interest rates do go up.
Steven (00:12:49) - And that's what I've done over, over a period of time. And so it's just great, you know, if you if you do the right thing with that and you don't worry as much about the interest rates, you worry more about how much you buy the property for and can it cash flow. There's nothing else. Like I said earlier in the world, that allows you to use someone else's money to let somebody else make your mortgage payment and for you to profit money off of that and the property appreciated over time. So you're really getting your bang for your buck. You're getting,, income every single month, but then you're also gaining,, equity within a property because it depreciates and you're paying down the mortgage. And so,, there's nothing else you can use someone else's money for, you know? So, you know, if you compare it to, like, the stock market, you have to have money to make money in the stock market, real estate. It's not that way. And so,, I think that if you're afraid to get in right now, I don't think you have all the answers you need.
Steven (00:13:46) - And and my hope is maybe you go read the book. Maybe you get your answers somewhere else, but go for it., the biggest challenge is taking that first step. And then I promise you, if you surround yourself with the right people and you do your homework, you can have some great success in this business.
Speaker 2 (00:14:07) - The episode will continue in just a moment.
Jennifer: (00:14:11) - As an investor, we know it's important to stay on top of market trends and real estate opportunities that add value to your portfolio. We also know that having a trusted source of reliable information to help you stay a step ahead of other investors is critical to your success. If you're interested in having these types of resources as well as access to me and my team, I invite you to join the Empire Investment Club, a free service that gives you an easier way to make sense of today's and tomorrow's real estate opportunities. As a member of the Empire Investment Club, you'll get access to relevant resources and investment focused experiences such as live interactive webinars, market trend presentations, and investor socials designed to equip you with what you need to succeed.
Jennifer: (00:14:51) - So whether you're an active investor, passive investor, a combination of both, or just starting out the club is where you'll get what you need to build a portfolio you love. To join, just head over to Jennifer dejesus.com. Sign up and we'll see you in the club where everyone's on a journey to becoming a better investor. You mentioned a little bit about. So you started to touch on financing a little bit and how you can get started with, you know, without your own money or even just limited capital. So do you have some creative ideas for financing properties and how to really kind of turn that dream into a reality?
Steven (00:15:30) - Absolutely. When I first got in this business, I didn't have any money. You know, I really didn't. You know, when I was talking to jobs like, you know, I don't even, you know, I could get money for a down payment, I guess, if I needed to. And I said, but I don't physically have that money, and that's what I did.
Steven (00:15:45) - , there was a bank, a local bank here that was,, allowing people to sign up for credit cards, and they would give you a cash advance off that credit card. And now, let me say the credit card interest rate was only 7%, and it's like 20 some percent now. But you know, a little bit different there. Right. But there again I didn't have the money. And I said, you know what? If I want to bet on myself, if I want to get in this business, I got to take a little bit of a risk. And it was a calculated risk and I was able to pull that money off, use it for my down payment. And then what I did was go in and fix the property up, refinance and pull my my equity back out and roll to the net, still pay the credit card off. And so you can do very similar things even now. Maybe you don't want to use a credit card, but there's hard money lenders out there.
Steven (00:16:34) - , there's creative ways where you could get seller financing., there is a in the coming years, there's going to be a huge movement where there's people in their 60s and 70s and 80s that own a lot of real estate, and so they don't want to get killed in taxes, you know, you know, if you sold it right out and, you know, you got to pay,, taxes on all that money where what I have started to see and I've even bought some of my properties like this is you go to people and say, hey, I want to buy this property. What if I put down a small down payment? You, you know, you get interest on, on the note because essentially they become the bank. You have less money out of your pocket. It helps them. It helps you, you know, because they're not getting hit with all the taxes. But then it also allows you to get in to this great business. And so there's so many creative ways to get into this business.
Steven (00:17:22) - So don't allow money to be one of the barriers to keep you out of it.
Speaker 4 (00:17:28) - Okay?
Jennifer: (00:17:29) - You talked about surrounding yourself with the right people and and educating yourself, you know, reading books, doing what you got to do to get help, right, to essentially learn in the business. What is your thought on partnerships?
Steven (00:17:45) - Yeah, partnerships is a key one. I'm telling you what, it's,, if you're looking to be in business with someone else,, think long and hard. And I even covered this in the book. Partnerships. When you get in a business, it's like being married to someone, you know, it's it's not even dating. It's. You can't just break up when you want to break up, right? I mean, there's a lot of legal ramifications if if it goes south., and so I tell people that if you want to get into a partnership, know that,, things have to align. And so, you know, I tell people to, to make sure that your beliefs are the same, your values are the same.
Steven (00:18:26) - , is your work ethic the same?, is one of the partners going to do more work than the other? Clearly define what everybody's supposed to do and clearly defined. If that doesn't happen, well, these are the ramifications of it., to what kind of properties do you want? You know, everybody wants potentially something different. Well, that wouldn't work. If everybody wants the same, it potentially could work., and then make sure that egos don't matter, you know, make sure you kind of think the same. And so my experience, you know, I've shared a real estate office with people before it it's hard. It just it's hard. Everybody has their own ideas., everybody can't be the leader, right? I mean, you know, you have to be able to really align with with what you want, and it's just very, very hard to do. And so I tell people, if you don't have to do a partnership, don't do a partnership. You know, I, for example, I was talking to an investor a couple of years ago and he was wanting to do a partnership with someone.
Steven (00:19:25) - And, and I outline the same things. And so they really started thinking long and hard. And one of his partners that he was about to get into business with because he was going to take the leap of faith. He ended up getting a girlfriend. And then he was in my he he didn't want to do any more work. He just said, listen, guys, I just want to get paid. I don't I don't want to actually have to do any work, any,, on the day to day stuff. And, and that just doesn't work. And so I just caution people,, to make sure it's the right fit, because if it's not the right fit, it's not like you can just say, all right, we're done here. Because if you own properties together, if you have loans together, if you have an LLC together, you know, the bank doesn't necessarily care that you're not getting along. They just cared if care if they get paid or not. And so.
Steven (00:20:09) - You just have to be very, very careful when it comes to that.
Speaker 4 (00:20:12) - Sure. So you talked about.
Jennifer: (00:20:14) - The properties that you own. Where are they?
Steven (00:20:18) - I am located in central North Carolina. So one of the things that I learned very early on is you want to cluster your properties together. And so I'm in three different counties., if you're in the middle of all the properties, you could get to any of my properties within 45 minutes. If you're in the middle of the county, you could get to any of those properties in that county within 10 minutes to 15 minutes. And so I did that strategically. And, you know, I didn't think about this when I first got in the business. But my mentor said, hey, you want to cluster them together because you have to keep in mind, if you have to go to these properties, you don't want to drive hours to go get to them. You have to keep in mind if you have maintenance teams, or if you have a plumber or an Hvac crew, you want them to be able to get to multiple properties.
Steven (00:21:05) - If they have multiple things they need to do very quickly, and then, you know, you, you know, if you got to go collect rent or, or anything like that, if you got to go do inspections on the houses,, you don't want to be driving all day long, you know, you want to be as productive as possible. And so I always recommend that, that you try to cluster properties together.
Speaker 4 (00:21:25) - Okay. You found properties.
Jennifer: (00:21:27) - In your.
Speaker 4 (00:21:27) - Backyard.
Jennifer: (00:21:28) - But not everybody lives in a climate where investing in multifamily or, you know, whether it be single families or multi families, where that makes sense. So assuming that somebody could not invest in their local area for whatever the, you know, reasons are, you know, economics, demographics, whatever, what would you suggest then as kind of the next step for them?
Steven (00:21:53) - Absolutely. You know.
Speaker 5 (00:21:54) - I think that.
Steven (00:21:55) - Finding a, an investor, realtor., and let me explain what that is., there are plenty of realtors out there, but it's just like a doctor, you know, you don't have knee surgery from a doctor that would do brain surgery, right? So, you know, you want to find a realtor that is specialized in investment properties to help you find the correct properties that you're looking for.
Steven (00:22:22) - And so that's what I do. And so my recommendation would be if you if you can't find anything in your backyard, start looking, start trying to find an investor realtor and how you do that. Go on MLS or go on Realtor.com and look for the kind of properties you're looking for, and start calling those realtors that have those properties you're looking for, because sometimes they're investor realtors, sometimes they're not. But maybe they can lead you in the right direction. But I would still say cluster your properties together. And so if you can't buy in your own backyard, that's fine. Pick an area that you can buy in and then cluster your properties together there. And it's fine. If you have multiple different clusters. You don't have to just stick to one area. But I wouldn't buy 15 different properties or ten different properties. And none of them are close by each other. And the reason why I say that is if if you have to sell them at any time, it's easier when they're closer together.
Steven (00:23:19) - , if you have to go look at them for whatever reason, you have to meet an insurance adjuster for whatever reason, even if you're not in the area, it makes it so much easier,, when they're somewhat close by. And so that would still be my recommendation is to still cluster them together. But but also look to the experts. If you're not in that area, call some rental management companies that are in that area and and make sure you're in an area you want to be in, you know, really do that research upfront, because if you don't know the area, you don't know if it's a good area or not. And so you don't know if that area is starting to appreciate the value or depreciating or, you know, look to your locals to make sure,, things are zoned correctly. And, and, you know, there's they're not going to be widening a road that takes half of your yard out that that would make it not as not as pleasing for a tenant. I think if you do all that, you know, you'll be okay.
Jennifer: (00:24:15) - Thank you for listening to part one of our two part episode. Please make sure you stay tuned as I'll be back with Stephen on the next episode. Until next time, take care.
Speaker 2 (00:24:29) - For more information about how Jennifer can help you plan, develop and manage a strong real estate investment portfolio, visit Growing empires.com.