1703: Special Guest Steven Andrews (Part II)
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Jennifer (00:00:01) - Welcome to episode three of season 17 of The Growing Empire show. Today I'm back with my special guest, Stephen Andrews, for part two of our conversation regarding how to climb out of debt with real estate investing, how to get off the fence and start your investing journey, and how to create powerful real estate partnerships. Make sure you stay tuned!
Speaker (00:00:24) - 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 (00:00:45) - Do you specifically invest in? Only multifamily?
Steven (00:00:50) - So I do invest in some multifamily. I also invest in single family homes to.
Jennifer (00:00:55) - Okay? Okay. But you're in the residential housing market. Are you invested in any other asset classes like industrial storage facilities, anything like that?
Steven (00:01:06) - No., strictly just in residential rental property. And the reason why when when you're first trying to get in this business, there's so much easier to get a loan on residential rental property compared to commercial.
Steven (00:01:20) - , and then Covid hit, right? You know, I started thinking about getting in commercial and then Covid hit. And I'm so glad I'm in residential because I know a lot of people that are in commercial and they really, really hurt during Covid because these businesses had to shut down and a lot of them couldn't pay rent. And so and a lot of the people that I know in commercial real estate had to defer payments and stuff. I didn't have to do any of that. And don't get me wrong, there was things that you couldn't file a known and but there was plenty of agencies out there that would help people for for the rent during Covid and stuff. So,, it was really a blessing to, to not to have that happen. But before I got into commercial real estate, to really be able to take a step back in and just be an expert in one thing.
Jennifer (00:02:07) - Yeah, I always say multifamily or residential housing is recession proof, right? It's it's,, it's it weathers storms very well because there's there's flexibility in it.
Jennifer (00:02:18) - Everybody needs a roof over their head. Right. And they're going to care about that before they care about anything else.
Steven (00:02:23) - That's right, that's right. And I think what we have all learned, you know, especially coming out of Covid, I mean, there was restaurants that had been open 50 years,, where I live,, that shut down, never reopen their doors. And so you're completely right that I feel like if you have the right kind of residential rental property, it is recession proof. I mean, everybody always has to have a place to live, and that's not going away. You know, when you start looking at the younger generation, they don't want to be tied down to just one property. They want to rent. They want to be able to move when they want to move. And so I just think the demand for residential rental property is just going to continue to go up.
Jennifer (00:03:01) - I agree. So you had mentioned earlier, you know, when we were talking about investors investing in areas outside of their maybe hometown, just understanding the local ordinances, codes, different things regarding that.
Jennifer (00:03:14) - So tell me why that's important. And and what specifically would would investors be looking for to learn about their local ordinances. And what is it. Why does it even matter.
Steven (00:03:24) - Absolutely. You know, the it's so important because your city or the town in which or even the county where your properties are located, you know, they they run the show, you know, so, you know, if you're if you buy a single family home and you're trying to put a business in there and it's not, it's not zoned commercial or it's not zoned as a business district, the city can shut you down. You know, the city can say, hey, there's supposed to be a single family home where someone lives in it., and so it's so important to do that research upfront, and there's so many great,, things that you can do and look up. I always tell people, create a great, good, authentic relationship with your municipalities in which, where your properties are located and some of that, your inspections department, some of that, your zoning department and some of that.
Steven (00:04:16) - Sure. Code enforcement, code enforcement normally takes care of of minimum housing standards, takes care of if there's any high grass or trash in the yard or or what they would classify like a junk car if you didn't have,, if it didn't run or if it didn't have a license plate., you're and so they govern that. And so there's every city normally has a, a code of ordinances that, that you have to go by. Same thing with zoning. They also have ordinances. They help you. Hey, this is this is on residential. This is on commercial. These are the things you can do with these properties. They can give you all that information., and then also your inspections department, you know, you want to make sure that you have a great relationship with them and you know what needs to be inspected, you know, so just say, if you put in a new HVAC system that needs to be inspected, if you change out a door that doesn't need to be inspected.
Steven (00:05:12) - So, so knowing those things to keep yourself out of trouble is just it's a game changer. And plus you're building a great relationship where if you ever need them, if you ever need hey, I need some guidance on that., they can really help you. I mean, it even goes down to, like, zoning. I still remember this,, several years ago, I was looking at buying a house, and it had a retaining wall down the side, and,, the retaining wall was falling down. I knew I had to replace it, and and so I called a city, and I said, okay, you know, what can I do with that retaining wall? And what I found out was there was there was an easement down through there. It was the city's retaining wall. And they had no,, they didn't want to replace it. And so they said, that's not on our radar to replace it, but it was a it was a safety risk if I would have bought it.
Steven (00:06:01) - And plus it just didn't look good. And so it was just so many hoops I was going to have to go through. I went away from that property. And so I think if you do that research upfront, create the great relationships, you'll be much better off in the long run.
Jennifer (00:06:13) - Okay. Let's talk a little bit about diversification and why that's so key to your financial security even when you're investing in real estate.
Steven (00:06:24) - Absolutely. You know,, the biggest part of my portfolio is certainly investment properties, because you make money every single month with a monthly rent, but also appreciates over time. And so if you're looking at building wealth, that is one of the best wealth drivers you can possibly have. But that's not the only thing I have., I love good compounded interest. And so I have several different accounts that allow me to do that where I put money in it and it just compounds some of it gets five and 6%., but it's just compounded every year. And so, you know, I think of it almost as liquid real estate, those liquid real estate units that I that's what I.
Steven (00:07:06) - Local real estate units., they don't call in for maintenance. You know, nothing. Nothing ever breaks., you know, you you know, there's nothing wrong with any of that, right? So I just get a monthly check every single month and there's nothing else I need to do. And so,, I always think that that's a very good idea to be able to diversify, to have that. And then if you want to take it a step further, certainly, you know, setting yourself up for the future and having other investments as well. But I would certainly say those two things,, you know, good rental property that's going to produce some income, but then also some good compounded interest where it just constantly goes up, you know, it doesn't yo yo like the stock market does. You want something that's almost like the roller coaster. You know, when you start going up the hill, it's just constant. It's constantly going up. It doesn't go down. It's going to get you compounded interest five 6% a year.
Steven (00:08:00) - And I'm telling you, after 30, 40 years,, really before that. Because you can certainly have the monthly income in. But some of that compounded entries have all again five, 6% that goes up like that sometimes that will outdo some of the stops you can get.
Jennifer (00:08:15) - So do you ever think there's too much investing? Is there ever too much? Can you ever should you ever stop?
Steven (00:08:23) - So the last chapter of my book is called When's Enough? Enough? And so for me, when I, when I look back, you know, during Covid, I kind of had this idea when I was throwing around, you know, the book ideas. And I said, you know what? Let me compare myself., I'm 35 years old. Let me compare myself to 25. And would my 25 year old self be okay and be happy with where I'm at? And the answer for me was absolutely. You know, I never in a million years would have dreamed that, you know, I would have went from $75,000 in debt, $45,000 a year to a seven figure year business and hundreds of rental properties later, and write a book and launch a business coach business and flip houses loan money.
Steven (00:09:08) - And, you know, I started comparing that because it's, you know, I think Covid taught a lot of people that, you know, life is very fragile. And it's one of those things where,, what do I get out of instead of having a couple hundred units having, you know, 500 units? Of course I'd make more money, but like, do I really need that? You know, and so I tell people to look yourself in the mirror, and only you can decide this. You know, the world is not going to give you the right answer for this. You know, you look to the world. It's keep going and keep going and keep going. But there's I think there's a huge movement right now in this country, especially fortune 500 CEOs. There's plenty of studies out there. If you want to go take a look at them that they ask these fortune 500 CEOs, hey, you know, it's taking your entire life to get there. Was it worth it? And a lot of them are saying now, it took me my entire life to get to the top.
Steven (00:10:04) - I've missed my kid's soccer games, Christmas,, birthdays, family events, friend events. And I don't have that much time in life left. Right? You know, I'm in my 70s and 80s and and I've spent my entire life and I've accumulated a lot. But now I don't even get to enjoy it because life's a little harder when you get older. And so now they're saying, you know what? I wish I would have not spent my entire life doing that, and I wish I wouldn't have spent my entire life building something that someone else is going to enjoy. And so for me, when I hear a term called generational wealth, I'm just not a huge fan of it. You know, source consulting is about time, wealth and freedom. You know, we want to create more time, which you can do that with wealth. Wealth creates more time, but it also gives you the freedom to do what you want to do now. And so I don't I didn't build this company just to be able to give it to someone else, because I believe that's what generational wealth means, is I'm just going to spend my entire life to just give it to my kids where they don't have to work as hard and they're just going to have this money.
Steven (00:11:10) - But when you really think about it, do you really want to spend your entire life doing that just to, you know, give somebody that hadn't worked for this huge platform or all this money or all these properties? And so I tell people to evaluate that. And certainly there's no right or wrong answer. You know, only you can decide that. But, you know, get what you want and then enjoy life, you know, and and a part of the reason why my company saw its consulting, saw its is all capital., because s is your starting,, starting spot at his at smarts, the spot. That's kind of the end of the journey. But for me, it's about everything in between. And so if you're not enjoying what you're doing,, you know, you can have too many rentals. You know, if you can't physically manage them all, you know, one person can't do all that. Like if you don't have the infrastructure in place, then you can have too many.
Steven (00:12:05) - And so,, you know, yes, it's good money. Yes, it's great wealth building. But you know what the the thing that's priceless is your way of life is your mental health of am I happy? And so if what makes you happy to continue to build and that's what you want to do, hey, go! Great. Go for it. If you're in a place where you know what I think I got enough and I want to take a step back because I want to enjoy life a little bit more. And that's also okay. And I think that's the great part about it all. Only you can answer that question.
Speaker (00:12:37) - The episode will continue in just a moment.
Jennifer (00:12:40) - 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.
Jennifer (00:13:07) - 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. 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. So as the founder of Salk's consulting and nearly a decade of experience in real estate, I'm sure you've seen a lot of people come and go in this marketplace, but also make some some mistakes that are repetitive, repetitive mistakes. So what are some of those mistakes and how could somebody avoid the pitfalls?
Steven (00:14:01) - Absolutely. You know, I think a lot of the mistakes happen when you first get in. What I'm seeing right now, you know, I've started to sell just a few of my properties because the market's just so high and I want to be able to capitalize on that appreciation.
Steven (00:14:13) - And I've had two different instances where beginner investors were getting in this business and they did not get an investor realtor, and they just got a normal realtor that that sells luxury homes. And I promise you, there's a huge difference between rental property and luxury homes. You know, you don't look for the same things., you don't they're not finance the same way. And I've had two different deals fall through., it was about $1 million worth of deals., Realtors missed out on $60,000 worth of commissions. Not only my realtor, but their realtor. The buyers missed out on their due diligence money that they put down, and their earnest money because they went past the due diligence date and everybody was out money. Right. You know, it's it's like it's kind of crazy to see. I don't want to throw away money like that. I want to do the research up front, have all my ducks in a row where nobody's losing money. And so really, the only person that won and really nobody wins because I lost the deal too.
Steven (00:15:15) - But at least I put, you know, the due diligence, money and earnest money in my pocket. But the buyer has now such a bad taste about what real estate really is. And it's all because they had the wrong realtor, and we tried to God as much as possible, but the realtor was just guiding in a completely different way. And we told them, listen, this is going to make it all fall apart because you can't do it the way you're trying to do it. And, and, and they didn't get into real estate, you know, both of them said, you know what? Real estate is just not for me. And I think it's just because of the bad experience that they had. And they didn't have to have the bad experience., so, so I think that's the first thing when you, when you really start trying to get in this business, link up with the right people. The second is don't get complacent, you know, so continue to learn new ways to do it.
Steven (00:16:01) - , I just recently took my,, rental management company fully virtual. If I wasn't open to learning something new, I was old school. I like the brick and mortar building and and and all of that. Like, I really enjoyed that. But now I have it all virtual. I have a better structure of of how I manage it all,, bringing in more money than I ever have because of that new structure., and it was all due to me being open to other things. Same way with writing this book and creating sorts. You know, if I wasn't open to new ideas,, I wouldn't be doing it. And so I just tell people, you know, when you get in this business, you can say, you know what? I know a lot and I know everything, and and I don't want to do anything else. But I promise you, if you stay open minded, you can have some even more success and make your life even better because you're doing things the better way, and maybe not the harder way.
Jennifer (00:16:58) - That's awesome. So how do you stay motivated to continually grow in your real estate business, but also your coaching endeavors?
Steven (00:17:08) - Absolutely. You know, that's that's a hard one. You know,, I've always been one that you always want to put in all the effort,, you know, 110% and into anything that you do. And, you know, it's hard when you start,, you know, spread yourself out a little bit. And I think if you have great,, policies and procedures in place, you can still do both. And so for me, there's certain things I do every single day. It's kind of my week is kind of planned out. How do I maintain a successful rental business? This is what I have to do. This is my part of the role. And then I have people in place to support that role in the same way with sports consulting., you know, I do the same thing. And so I think that you can certainly do both. You have to be very well organized.
Steven (00:17:53) - You got to have some good time management., but you can certainly do anything that, that you put your mind to, you know, as long as you have a great support system in place, which I do. You know, my parents are great, my brothers are great, my family is great friends. And my support system really, really helps with all that. Along with everybody, you know, my tribe of people that that are a part of both of my companies.
Jennifer (00:18:16) - Do you have specific habits or practices that you've found particularly helpful in your professional development?
Speaker 4 (00:18:26) - Yes. You know, do the hard things.
Steven (00:18:28) - You know, I think that,, it's it's always easy to just put off whatever's hard. And, you know, I tell people to and I do this for myself. Lean into what's hard. You know, normally if you do what's hard, you're doing the right thing. You know, sometimes doing the right thing, it's not always the easiest. And so if you continue to, to lean in and do the right thing and do the hard things on a daily basis, you'll be much better off if you put all of that to the side and say, you know what, I'll just do that tomorrow because it's hard.
Steven (00:19:01) - That's going to pile up, you're going to get overwhelmed and you're not going to have as much success. And so for me, I always try to do the hard things first, because I don't want to get to the end of the day and just say, you know what, I'm going to do this tomorrow, but then also prioritize,, some things you can do tomorrow., some things have to be done today. And so I think that if you have a good,, priority system, if you have a great sense of urgency, good time management, and do the hard things and do the right things, you know, at the end of the day, you're going to be much better off.
Speaker 5 (00:19:35) - Yeah. Again.
Jennifer (00:19:36) - So looking ahead, what trends or opportunities do you see emerging in the real estate market and how can aspiring investors prepare to capitalize on them?
Speaker 4 (00:19:46) - Absolutely. You know, like I said.
Steven (00:19:48) - Earlier, I think there's going to be a big transition of people that own real estate here in the coming years.
Steven (00:19:55) - You know, all the baby boomers are getting older. And so a lot of them are in their 60s and 70s and 80s now. And so,, they're going to have to start offloading that, you know,, a lot of what I have seen,, a lot of their kids don't want anything to do with real estate. And so I do think there's there's going to be this huge transitional of real estate,, really over the next several years. And I think that's great. You know, let's get it in the hands of, of people that want to do it. And and that's the great part. I also think that prices have went up so high. Don't wait., I do think prices are going to, in some areas, kind of come back just a little bit on other areas they're not going to. So it's got to you got to look at your area very specifically and not worry about interest rates. Interest rates come and go. Election years. Historically, interest rates,, always come down a little bit.
Steven (00:20:49) - And historically the year after the election, they normally always go back up a little bit. And don't be the people that wait and say, hey, I want a 3% interest rate. I'm not getting in until it comes back to that. It's not coming back to that. It's just not. There was experts last year that said it was going to, and I was telling people, listen, it's not going to. Historically, those were the lowest interest rates in US history, right? The historically interest rates have been somewhere between probably five and 7%. And that's a healthy interest rate for everybody. And so just don't wait. Like if that's your reason for not getting in real estate, don't use that as a reason. Because I just don't see that coming down and you don't want to miss out on it, you know, keep in mind, this is the only thing in this country or in the world that you can use someone else's money to buy it. Someone else makes your mortgage payment your profit money every single month, and it depreciates over time.
Steven (00:21:49) - And you don't have any of your own money tied up in it, potentially. And so don't miss out on all the fun.
Jennifer (00:21:55) - Oh that's awesome. So, Steven, you've been a great guest and you're full of so much knowledge and experience that you've added as well. So how would my listeners get in touch with you?, if they would like to continue the conversation and see what what you offer as far as your consulting services?
Steven (00:22:14) - Absolutely. You know, I'm on social media so you can find me on Facebook, Instagram,, Twitter, YouTube. It's,, Schwartz Consulting. You can also go to Source consulting.com. And so that is s o a r x consulting.com. And all the information's there, you know, the link for the books there. The book is also on Amazon. If you search the new American Dream by Steven Andrews it will pull it up. Great wealth of knowledge there., but then also all that's on the website,, there's also a course on the website that goes a step further than the book and very diligent of, of how I outlined the course.
Steven (00:22:55) - It goes hand in hand with the book, but much more in depth, and it doesn't leave it out. Anything that I've learned over the last decade, which is which is really good. And so really looking forward to this part,, that kind of the next chapter of what I'm doing here, to be able to really help and give back to the next generation that's getting into real estate.
Jennifer (00:23:14) - Well, again, thank you so much for all your expertise and and all that you're doing to give back to the the community that is interested in investing in real estate. It was a pleasure talking to you today.
Steven (00:23:26) - Yeah. Thank you so much for having me. I really appreciate it.
Jennifer (00:23:30) - Thank you for listening to my interview with Stephen Andrews. I hope you enjoyed this episode and got a lot out of the content. And until next time, take care.
Speaker (00:23:42) - For more information about how Jennifer can help you plan, develop and manage a strong real estate investment portfolio, visit Growing empires.com.