Andy Dane Carter on Real Estate Investing, Why Invest In or Out of California, and Finding Deals

Today’s Investor Highlight Series features a special guest, Andy Dane Carter. Andy is a real estate social media icon, but more than that he’s a real estate expert and broker. He owns several businesses throughout Southern California. He’s a business author who wrote a terrific book on real estate investing called “100 Doors”, and he’s a sought-out speaker.

All-in-all, Andy Dane Carter is a powerhouse real estate professional who is well-known here in the Long Beach community and we have so much to learn from him and how he views real estate investing.

Here is the transcript of our interview:

What first inspired you to get started in real estate investing?

Andy: So I have a crazy backstory. When I got into real estate, I hadn’t worked in about a year and a half. I was teaching yoga here in Long Beach. I was racing triathlons. I just lost like 65 pounds ’cause I was coming off of this like crazy career, corporate grind and I took a pause on my life. And so either really good friend of mine whose home in Naples burnt down so he was living with me and he was an investor, he was a flipper here in Long Beach. So he’s like, ” Hey, have you ever thought about ” doing real estate? ” You’re a smart guy, ” you’ve own businesses and teams and companies. ” What about real estate? ” And you can still do all this like hippie yoga stuff ” and race your bike and do all this other stuff.” And I was like, “Oh, maybe I’ll give it a shot.” So I go in my backyard, huge like, like, you know fire and bonfire and I go into a meditation and I just get this yes, I was like, okay. I go at my house, sign up for the real estate course, I get my license and I went to go work for his little firm for free, at like 30 years old, I’m now 44. Had about 400 bucks left in the bank ’cause I burned through all of my money and we started to flip houses. They were already flipping houses, in the tune of about 20 a year. We scaled that very quickly to about 160 a year and I got really good on the phones and really good at getting deals. So I became a deal junkie very fast.

Juan: Andy so talk to us like, so what was the role that you were playing for the company, what were you learning?

Andy: It was like the whole thing from the ground up. I looked at the multiple listing service like it was a different language. I was like, I’m never gonna be able to learn all of this. This is so overwhelming. So I just basically locked myself in that office for like a few days and just learned that. And I learned really quickly that I needed to get deals. Deals was the thing that was hurting us. We were going to the auction and we were bidding against everybody else. That’s when the hedge funds were coming in like you know 2000, you know, nine, 10, 11. So we scaled really, really quickly on how to make me like an acquisitions specialist. So I became a savage. Like I wasn’t married, didn’t have any kids yet and I was just like, I would work 16 to 18 hours a day and get these deals drive all over LA and just start to vet deals and find ones that were good.

How did you find real estate investment deals? And what makes something a great investment deal?

Andy: It was a totally different market back then. An absolute knucklehead that knew nothing about real estate could crush the industry. Like it was that easy. You go to the auction, you buy a house for 210, you put 30 grand into it and then you make 100 on the exit, over and over and over again.

Juan: Now this was on the recovery after 2008?

Andy: This is on the recovery side. So yeah, this is 2009, 10, 11, 12. And then we started to realize this is a lot of work. And I was like, how about we start buying buildings? So on these long bike rides that I used to go on I would listen to these investing books on tape from all the best investors, all the big gurus, all the people that were actually doing it correctly. Then I got around some really wise old mentors. But all they messed with was multifamily real estate. And all of a sudden these numbers started to make sense to me and I’m like, what are we doing? Flipping houses, working our faces off, paying short term cap gains, getting our heads kicked in every year. So I start taking all these commission checks from the buy-side act for the company plus all of my splits with them in return and start buying duplexes, triplexes, fourplexes. And then we started to buy bigger buildings and I kept mine. I continue to keep mine.

Juan: So you said that during that time, any knucklehead. But I was in the real estate industry during that time, I saw the peaks, I saw the valleys and there was a scary moment of, “Oh my gosh, how long is the recovery gonna take?” So although you might make it seem like it was easy. I would say that you guys were taking risks, and now looking back we knew that it was gonna come back fast, but in the middle of it even when I was trying to convince my friends like, “Hey this is the bottom, this is where this is, or etc.” here’s what I would tell people: I would tell my friends, let’s partner up, let’s get a good loan, like everything is cash flowing in the city of Long Beach ’cause at that moment it legitimately was.

Andy: Agreed.

Juan: And I said, this is where millionaires are made. And I said, that’s right over and over and over and over. But it was hard to convince people because why? Because rents actually for the first had dropped in the city of Long Beach, values were low and at that point there was like, no, I remember being there and trying to convince them like, hey we’re gonna recover. And they’re like, at what time and I didn’t know the future, right? So we’re having this conversation. Now ultimately it recovered faster, but I wasn’t able to convince enough friends to pick up enough buildings because all I saw was opportunities. And so kudos to you were, I mean, I know you said that it was kind of easy and one could have made it. It was still kind of a tricky time to make money.

Andy: It was a very tricky time. For me, it was like a perfect storm ’cause I had nothing to measure it against. I was like, that’s a great deal, I didn’t know how long it was gonna take ’cause I had nothing to measure it against. So I was like, it was all just gut for me and a little bit of luck went a long way as we start to buy more and more. We were buying like these humongous flat swaths of land and closing them all cash, ’cause we didn’t know any better until I sat down with like a real builder. And they’re like, no, you’re tied up for a year, you get it entitled and then you sell it off or you just build it. And I’m like, what, we’re just buying them like flip. I did everything like a flip. That was my like entire model. So for me it was the same thing. There was so much fun for me ’cause I didn’t really know that it was gonna take two years. I didn’t know I was going to take a year I was just kind of in it. And I got lucky and Long Beach is just a, I mean, there’s a lot here.

Juan: And I think if you take the risks, right? And that’s what you’ve been doing, you take the risk you’ve been opening your own doors. No one’s opened the door for you like, so luck will come into play once you take that risk. But if you take no risks, there’s no luck that’s gonna support you or help your growth. You went from flipping houses to multifamily investing.

When you look at an apartment building what is it that you look for? What is important for you to decide to buy it?

Andy: Yeah, so for me, it’s like the basics. I look for little bit, you know, of like deferred maintenance, probably been owned by like a mom and pop operator, small little family, maybe they own three or four properties total, they’ve kept the rents really low so I have a lot of opportunity. One of my favorite things is the gross rent multiplier. So go look that up on YouTube if you don’t know what that is yet. Understand a cap rate super important. And I just look for those little things. I like buying buildings that are tenant occupied. I like them when they’re already there, they’ve been there for a long time. We’ve bought plenty of buildings now where I can tell if it’s like a good tenant mix, if it’s a bad tenant mix, I’ve literally dealt with everything in between. We liked the C & B markets. I don’t like the A Plus markets never have, I don’t like the D enough markets for the obvious reasons. But that little sweet spot of those, like D plus C minus areas, they just crush.

In the areas that you would invest, what would you consider a good gross rent multiplier?

Andy: Alright. It kind of depends on the building. So I’m super old school where it literally depends on the deal. What’s my plan for the deal. Is it a two year hold to exchange it? Is it gonna go from a 41-8? What is my plan? Where’s the market at right now? I’ve been going really slow the past two years. I thought for sure, this market would have already corrected by now. I’ve been wrong for two straight years, but at the same time, I mean, I was going so fast in the beginning now I’m going much, much slower per my mentors. I like the well, and then here’s the other caveat is we now have statewide rent control, right? So there’s only certain things we can and can’t do. That has also helped me buy a lot more because you have these seasoned landlords that have owned it for 20 plus years or whatever, they fully depreciated the asset, they might be ready to just get out. So they look at somebody like me to buy it. So like there’s not just a singular formula, it’s super, super deal specific. That’s what I tell all my clients as well.

Juan: A lot of times people will reach out to us and we’ll say, Juan, when do you know it’s a good deal?

Andy: That’s right.

Juan: And so we created our actual formula, the Sage 5-2-1 Formula. And one of those formulas obviously is gonna have the cap rate in the gross rent multiplier. And so here’s the best way that I could describe the gross rent multiplier. So when we do like an analysis on a property, I tell the our clients, hey, there’s, this is a two-pronged approach. There’s gonna be the market analysis, that’s gonna tell me, in this market everything sells at a 13 times gross rent multiplier, right? So you take the income you multiply to it and it gives you a value, right? And I tell people, if you could buy in this 13 times but under a smaller multiplier, then we’re making money.

Andy: That’s right.

Juan: So for me, and I’m gonna tell you this ’cause a lot of people will ask me when do you decide to buy and there’s probably two main factors that we’ve narrowed it down. If the cash on cash return is high which no one ever even talks about cash on cash returns, they want to talk about cap rates. Cap rate is so one year, well it’s it’s a 12 month period snapshot. And if you’re gonna make an investment on a 12 month period, you’re gonna own this for 20 years. So why would you ever make a decision off of that? So my thing is, if it’s a cash on cash return that I think is sufficient, then I go for it. And if I could buy into equity. So anytime where I’m like, okay I’m buying a property, that’s a million but I know it’s worth $1.1 M or $1.15 M, we’re all over it.

Cash flow versus appreciation? Investing in California versus out of state?

Andy: I’ve purchased a lot out of state, we did a of syndication and some big deals. I sold a lot of my properties out of state last year just because I wanted a whole lot of gunpowder for when this thing does actually move, when I’m correct and not wrong. But for me, it depends on what your model is for you and your family. What’s your strategy? I like to do both. You’re never going to get better appreciation than Southern California Real Estate. It’s just a good market, it’s gonna go up, Long Beach is a T1 city. If you look at just like the trajectory of real estate, I bought in so many buildings that were like 25 grand, 70 grand and now they’re like 1.7 and this sweet old lady still owns it. So I liked those numbers. I also like the cash flow from out of state. That’s what enticed me about six years ago to go out there. It was Cleveland, Ohio. I had a buddy of mine who was flipping houses out here. He went to Cleveland and never came back and was just buying tons of multi-family properties. So I finally went out there, I finally got my first deal and I was like, this is a joke. I flew out there and I was like, “I can’t believe this is this inexpensive”. The cash flow was bananas, it was through the roof. I think all those properties have gone up maybe 3% the whole time, so there’s no appreciation. The one reason why certain States are so great as their landlord-friendly States. Here in California it is a nightmare to get people out. On Cleveland, it’s $300 and 12 days [to vacate]. And that’s a sheriff lock out.

Juan: So after you probably made some wealth and some appreciation in California, and when you had some money to invest then you went out of state.

Andy: Correct, right so in capital.

Juan: Because it’s not get rich quick, it’s get rich guaranteed but it’s a 15-20 year plan, right? So what I’ve told everyone is first, we’re gonna invest for appreciation because that’s where we’re gonna build our wealth.

Andy: That’s the foundational piece.

Juan: That’s it, we need that. So then 20 years have passed, you’re a little older, more sophisticated. You picked up more assets then one by one, start trading into out-of-state. Now we go with a cash flow approach. Because when you’re younger, you may not need that cash flow. You’re gonna have a salary, you have a career and everything else. And so you’re a perfect example of that where you made money and then we go out of state.

Andy: And then I started to experiment out of state. Here’s what I really want to kind of share with your entire audience: If you’re a real estate professional, a real estate broker, or you’re a real estate agent and you’re closing deals here in SoCal and you own your house. And you’re like “look I’m never gonna be able to buy something here, I just want to test the market.” How about you take one of your $20,000 or $30,000 commission checks and go buy a duplex in Cleveland, Ohio for $70,000? Go put it down, get a little bit of cash flow. See how it feels to be a landlord out of state. You might hate it. And instead of going all in out of state (plus you got to fly, you got to drive the neighborhoods, you’ve got to walk the neighborhood, you’ve got to feel into the communities). Do you know how inexpensive it is to fly to Cleveland? Meet with a broker, meet with the property manager, fly home and have a really amazing perspective on what it’s like to invest in that city? And it costs you like a thousand bucks to do all your due diligence to build relationships. That’s what we did and it’s worked out great. But you got to just go and test it, just seeing it.

Juan: And I’m glad you said that. At this point where we’re very pro Long Beach pro Southern California invest here, let’s get that appreciation. Again, I don’t mind the low cap rate because that’s it’s just a 12 month photo of what’s going on with that asset. And so what you’re talking about is going there, figuring out what the tenant base looks like, what the rents go for, the vacancy rates. That’s what you’re doing, you’re doing research. And I’m afraid that some of the folks that reach out to me aren’t gonna do the research. They’re just gonna go buy something based on, oh my gosh, I can’t believe I’m paying, you know $50,000 a door or something. And they get mesmerized by this one metric, not realizing that maybe vacancy there is 20%.

Andy: Correct, and some places it is. And then certain places they’re, like the taxes are paid in arrears. Every single zip code has a different tax basis. Didn’t know that when I got there. So certain areas like it doesn’t pencil in all but the deal looks amazing on paper. It’s those little nuances that you really have to get into. There was this one broker. She would not take me to the East side of Cleveland ’cause it’s ghetto and gangster there. I went there, It’s like, tree-lined streets, dear I’m like, I’ll take you to gangster. I’ll take you to the hood. It was amazing so we started buying where East side Cleveland got it. And then we started to exchange and move things over and be like some nicer areas. But we found that the rent basis there is about four 50 to 800, like that’s the strikes. But it’s also, there’s a lot of vacancies. So if like you do get evicted you just go to the building next door. So you have to take that into consideration. It’s not just the like, oh I’m gonna take my money out to Cleveland or out to Tennessee or out to Casey and just make money. And that’s why I’m such a big proponent of boots on the ground. Like I value deals and combat them all day long on my computer. I stand and touch and feel every property I’ve ever purchased.

Juan: Andy, you’re the third person we’ve interviewed. Mark Malan and Brian Maginnis, their thing is, “I buy in-state because I can go touch it.” It’s very important to be there, to see the tenants, to know that when there is a vacancy there legitimately is a vacancy. And so I think you’re doing it the right way. That if you’re considering out of state that you are involved. It’s not so much, hey I’m gonna buy out of state and I’ll pretend like it doesn’t exist. And it performs the way it performs. You’re not gonna win. It’s kind of a contact sport. You need to be involved.

Andy: It’s a very much of contact sport. Yeah and you can do a lot of things now because of the space is now digital, right? You can literally put out an ad saying, here’s the six properties that you want and you want photos of them. You can pay a kid 50 bucks to go shoot you real photos of real time of those properties and then report back to you. Like there’s so much you can do and it’s not that expensive to fly. But you know there’s like an old school thing. And that’s what stopped me for so long to go out of state was like, if you can’t drive there within two hours, don’t buy it. That was like the old model. It’s somewhat changed, so like there’s opportunities everywhere, you just have to be.

Are we in a real estate bubble? When is the real estate market going to crash?

Andy: I’ve been wrong, like I was saying before, here’s what I know for sure. I know that in the history of the globe the market has never gone up forever. There is always some kind of correction. If you study the history of real estate as I do like a crazy person, it’s never a dip, it’s never a correction. Those are cycles within cycles, right? Crashes are exactly what they are. They’re a crash. In my opinion, this is the first time that we have like kind of a tech bubble, kind of like a stock market bubble, kind of a student loan debt problem crisis in the trillions bubble, we just printed $5 trillion to the value of them. I mean, there’s a lot of things in factors. Here’s the other thing, no one cares. Like people are still buying like crazy people. Interest rates are the lowest in our country’s history and we have the supply and demand issue. You have an entire generation that’s waiting longer to get into deals. Some of them were actually buying duplexes and triplexes now instead of condos or houses as their first investment pieces. So like there’s a lot of support to keep this market going. I don’t see something pushing it down. So I’m just cautious. I think we’re in this constant state of a bubble, it just takes something usually really big to kind of push it over the edge. But what I’ve learned over this past, whatever 12, 13 years is you have to be cautious but you have to behave within the market that you’re in. And that’s what I didn’t do for three years. I mean, I literally passed on some amazing deals because I was like, ooh, it’s been 10 years and I was wrong.

Juan: We interviewed Brian two weeks ago, what Brian Maginnis said was that “I’m not smart enough to follow the cycles and I’m not gonna make a decision based on what may or may not happen.” He said, “If I’m in a position to buy real estate, I buy it.” And so that’s what I tell my clients, “interest rates are really really good. Inventory has gone down all over with most asset types. So it’s getting a little tougher.” But what I tell folks is if you buy something that has 30-year financing (four units or less) although the values might drop. If they do the rents, typically stay consistent. So you still have cash flow.

Andy: Agreed.

Juan: The rents pay the mortgage, you’re safe. In Southern California vacancy is literally zero, right? When someone moves out and somewhat, even before you put the for rent sign outside, the neighbors have found out that there’s a vacancy coming and they get your number they’re calling you before the tenant even moved out. I mean, that’s what I know. So I always tell people when you’re buying a small apartment building, you’re buying a business that you don’t have to go to every day, you don’t have to check in every day. Maybe once a month, maybe once a week, maybe sometimes there’s three months, you don’t check on it, but the day you close escrow if you had a vacancy, there’s a line waiting outside and you never announced it. I mean, it’s kind of a beautiful thing in terms of a business. And I think people need to look at it as a business because that’s really what it is. And so going back to, if you could buy something, do it. And then going back to everything and Southern California it seems to double every 10 to 12 years on average, we’re in a safe position. And that’s sometimes they’re just basic metrics and I don’t let all this craziness going on in the news affect what we’re doing, or affect the advice that we’re giving our clients.

Andy: For sure. And it’s the safest vehicle that I’ve found for my family’s money and for all my investors money. I mean, and I’ve looked at it all and I completely agree with you. So who cares if the market takes a dip, you lose a little bit like on paper you still have a full, like, you know, rock of like tenants basically paying for your asset, taxes and expenses even if your cash flow and a little bit. I’m third generation Long Beach. The rents in Long Beach are crazy right now. They’re not going down, they’re not gonna go down. We’re seeing a massive push from Santa Monica, Manhattan, Redondo Beach people moving to Long Beach because of the beach, the art, the restaurants, lifestyle, everything and you’re still 20-30 minutes from work. I think Long Beach is going to continue to grow as the city grows with the ADUs (accessory dwelling units). I mean, there’s so much growth potential here. I would be looking heavily to Long Beach as an investor.

Juan: Yeah so one of the things, and I obviously, we love Long Beach where we’re with you. So Long Beach is considered the last affordable beach city. It’s the last affordable beach city, you know, the walk-ability, the lifestyle. And so we’re always promoting Long Beach and we do you know, we are getting investors from out of the area. Hey, we typically would only invest here, but now we’re looking at Long Beach and I think that’s a safe play.

Andy: Agreed.

What does it take to become a great real estate investor?

Andy: Like you have to fall in love with the numbers. It’s just, I mean, this is a numbers game. This is not like an emotional game, I’ve literally talked people out of deals ’cause I’m like, I don’t care if you’ve always wanted this beautiful Spanish duplex in the shore, this thing couldn’t pencil on its best day. But I’ve always wanted, I’m like, then I can’t help you. Like, I’m here to help you make money. This is not gonna make money. So for me, you have to kind of love real estate too. I mean, there’s like a love affair that has to happen. ‘Cause it is hard, it is like it does work. And as soon as it gets to a certain point it’s kind of a set it. But at the same time to make a good investor, it’s the same thing with anything. I think you have to love it a little bit. You have to be okay with it’s gonna be a home run every time. And that was hard for me ’cause you know, for four years straight, I couldn’t miss. And then you miss a couple of times and you’re like, oh I’m vulnerable, you’re like, oh I can take a punch, you know? And then, but that’s when you actually grow. I don’t learn anything from my wins. I learned everything from, you know, those losses. I also get around people that are so much smarter than me. Like all my mentors are so much more superior and you know there’s just seasoned. And like you I’m sure, I follow what they do. If you’ve seen four cycles, and you’re still in business, you’re doing something right. And a lot of it’s walking versus running.

Juan: Alright, and so this is the reason for our shows. Let’s learn from people that are making the right moves. And again, not everyone makes every right move. You know you’re gonna win, you’re gonna lose but ultimately the, the goal of, listen we’re all doing this for, we want passive income, we want to be able to retire some day, right? That’s why we’re doing it.

Andy: Freedom! This whole thing with investing is absolutely freedom based. Most of our investors are doctors, lawyers, surgeons, like you know, dentists. They have a profession that eats up most of their time. So they can’t really spend their money. They’re too busy in their field and their practice. So we help them make money by buying buildings. And that works really, really well for a lot of people. So I don’t know for me, it’s just a really good place to park your money. I’m a multifamily nerd.

What do you tell an investor who is worried about rent control or eviction moratorium?

Andy: Sure, there are tons of opportunities everywhere. If somebody freaks out because of rent control ’cause there may be like a little bit senior and they’ve been worried about this for four decades and it finally passed. So there’s an opportunity for you to maybe buy that property from them. So that’s an opportunity for maybe a young buck to take on that, you know, new risk and responsibility. So maybe we can set up a special deal with them with some seller financing, now we’re doing creative deal structures because of rent control. Everybody’s like doom, gloom and rent control, I’m like I went to town soon as that thing passed, I couldn’t send out enough mail. Hey, did you hear what happened? Just want to let you guys know what happened in California, you want stuff all over the country. So for me, there’s opportunities. If you’re new, it’s a real fear. I mean, it’s a legitimate thing. So when we were flipping houses, I got really good at cash for keys. I got really good at rent control lock ’cause we were flipping a lot in Los Angeles. I got really good at writing checks for $18,678 which was the cap per unit. And I was just like, that had to factor into my deal. So I never let that stop me from buying a deal because of it pencils at pencils even if I have to like get everybody out, cash for keys. It’s a real thing but you have to have somebody who’s a professional like Juan, like myself, who knows how to talk to a tenant, how to like, and just how to structure the deal where it’s going to work. Every tenant is furious when the property gets sold. Every tenant, it’s just, so what I do is it’s fear. They’re not really mad, they’re not angry at me. They hang up on me, all this other stuff. They’re afraid. So I get to that core part of them, that’s afraid for their family, afraid they’re gonna have to move. And I go, listen, we’re gonna work this out. I changed my tonality, I get down to their level, I start talking about my past, how I was raised really poor, you know, I moved 26 times in Long Beach. Like, you know, I just, I can relate to them and now we’re having a conversation around what’s possible. And then, but that part’s important because I love those opportunities. Most investors like, oh, tenants right now, I’m over it. But that’s where you can get a great deal possibly.

What parts of Long Beach do you see opportunities in right now when it comes multifamily real estate?

Andy: There’s this middle zone, 7th Street to Anaheim from I mean pretty much Redondo to Long Beach Boulevard. There’s a really cool stretch there. It’s been fun for me to watch this entire transition of Long Beach, but there’s also huge opportunities from like Broadway to 6th and 7th Street. You know, there’s so much product here.

Juan: And why don’t you tell our viewers, like what is it that you’re seeing. Like, oh you’re here boots on the ground, you live here. Like what are you seeing in those areas so that it’s not coming from me like I’m selling it all the time, but like what is it that you’re seeing that you like?

Andy: So it’s the same thing that we saw in certain parts of Los Angeles, certain parts of East LA you saw certain places that were like a little hood, a little sketchy at nighttime to then like yoga mats fixed gears and farmer’s markets. So like, those are those little markers that we look for and it’s the same across the whole country. Like, those are things that I’m like, they’re just put in a trader Joe’s. I’m like interesting. I try to find that stuff out before it goes in, obviously. So we can buy way ahead of time. But I look for just like, what’s the demographic doing? Is the demographic coming in or is the demographic going out? Where’s the gentrification happening? Gentrification is always happening all over the place. Where is it and where does it make sense? Like there was a 10-unit building that we bought off of 10th Street probably nine years ago. Every unit was a drug dealer, every single one. We slowly got them all out, that thing now is like, got like, the slat-wooded fence is like “hipster-ville” with like all this stuff. And I was just like, this block was very different you know, nine years ago. And so we call that the hipster fence.

That’s all over East LA. I mean, that was the model that we used to use. We would literally put that thing in there and it would be like right next to like a full-blown like crack house and then you’d have a hipster fence with the big numbers.

Juan: Yeah, and so the areas that you’re describing would be maybe like what maybe like Midtown, Mid City we would call here in Long Beach. And so we sell those areas. And so those areas the best way to describe it’s in the path of growth and there’s something that’s been going on in city of Long Beach, where the tenant base wants a walk-ability, they want lifestyle, right? And so work, where can I ride my bike, where can I get a coffee? And where can I go to the, you know the bookstore or where can I hang out? Where’s the park, they love that. And so when we’re looking at buildings now and it’s important for an investor to know this because ultimately you want to position the property that you’re doing this as a business, right? So you’re doing this so that you can maximize the rent, you want to make this and so like what some of these buildings, what you’re really selling, it’s not so much the building we want the building to be nice, what’s good is a lot of people are improving their properties. And I think it’s a really good thing for the city of Long Beach. And ultimately has a domino effect on other buildings, right? And so, but what you’re selling is a lifestyle to the tenants. And the tenants sign up for that lifestyle, they stay put long-term tenants, everyone wins. And so that’s kind of what we’re seeing is where people will use the word that Long Beach has got this eclectic feel to it. And it does, you know, and not to mention its proximity to typically we’ll get couples and where one works Downtown LA, one works in Orange County Long Beach is right in the middle, it’s like the perfect city. So it’s still in the path of growth. I personally like North Long Beach, you know we have the Lab coming, which is kind of a big secret. They haven’t broken ground yet. That is gonna completely transform that area.

Andy: The whole zone at Wrigley. So like there was a house that we flipped there about a year ago. I could have never imagined that it was going to sell for what it did. And I was like, we’re in and it was on an okay street at best. And we knocked it out of the park. And then I started to walk the area and I was like, oh that’s why everything was changing quickly. I totally agree with you all of them with language. Here’s the cool part about Long Beach. You have a beach from downtown to the end of the city which is like the peninsula in Naples. You could buy a building that might only be three blocks from the ocean, but it’s close to downtown. People liked that proximity to the beach. I don’t know, there’s so much potential here.

Juan: I love it, I love it. So, who we have is upcoming investors, seasoned investors a lot of a mom and pop independent owners that are trying to figure out what do I do next? Do I refinance, do I buy something else, Juan? Do I stay put like, what’s any advice that you want to give to those folks that are just involved. They want to just want to learn.

Andy: Sure, do what’s best for you and your family and get a clear plan with a professional like somebody like Juan and paint a picture. We have clients for life like, that’s my whole goal. Like we have for five years, 10 years, 20 years, we’re more of like an investment strategy house, similar to you. So if you’re new and you’re thinking about I got so much equity in my house, should I yank out two or 300 grand, should I buy something with Juan? The answer is yes. But here’s what I want you to do is like listen to podcasts, read books get like your head around what you’re doing so then you come to Juan armed with like what you’re doing. So you don’t get stuck in this like, I don’t know if I should or not. Because when he says go you’re gonna have to go and go quickly, right, especially in the market.

What’s your book, “100 Doors” about?

Juan: Okay, so “100 Doors.” Explain the concept behind the “100 Doors” because a lot of times clients will call me and they’ll say I want to own so many doors, right? And so it could be that maybe you put that in, you know, in their mindset. So explain what that is and kind of the thought process behind that.

Andy: Sure, so I love this book. It’s very easy to read, it’s only 100 pages. Here’s this book right here, “100 Doors,” super thin, has me in the back, Cashflow is King. This is like the followup book to “Rich dad poured Out.” If you haven’t read that book totally changed my life, amazing, amazing real estate book. This puts all those principles into practice for the two, three and four model. This book covers the duplex, triplex, fourplex. That’s where my heart’s at, I love that model. So I was raised again, super poor by a single mom. If she would have known that she could put 3.5% down on a duplex or triplex or fourplex in Long Beach. Live in the front house, rent out the other three units to cover almost the entire mortgage. Her life would look very different at 72 right now. And my life growing up would have looked very different. So for all the single moms or single dads or just families out there trying to figure it out on a $700,000 duplex, your down payment is 7, 14, 21. It’s like $23,000, you put down and you’re not living in this asset. You’re paying yourself rent, you’re becoming a landlord yourself. You’re in the game, you have a foundational piece. And for me, that’s super important for people to get through their heads. If you’re in your 20s, don’t buy a condo don’t buy a house, buy a multiunit first two, three or four, use this model and then suck out 100 grand in a couple of years and buy a house. And then if you have a triplex and a three bedroom, two bath house for your family or whatever and that’s all you did for 20 years, your life looks very different.

Juan: So for some of you who hear this and say, can you do that now? So we represented a client on a three unit building four years ago. Now they’ve so they bought this property, wasn’t in the best area, but they bought it, they fixed it up, they live there. We’re now helping them buy their second property. And this is a young couple. They’re gonna get $2,000 from that property passive income once they move out and they lease it up. And they’re like, wow, that’s passive. But this being done now, it’s being done.

Andy: And I was getting the goosebumps, even talking about this stuff. It’s real and it’s so important ’cause nobody is talking about it enough and I can not shut my mouth about it. I go, I’m trying to tell everybody.

Juan: Check out “100 Doors,” check out the book, good information there. It’s it’s backed, it’s backed by data, it’s backed by knowledge and experience. You’re not just out there talking about it, you’re doing it.

Andy: No, these are real life stories.

Juan: But the book you said ” Rich Dad Poor Dad.” Would you say that’s your best book? If someone says, “Andy only got time to read one book, but what’s the book you recommend that I should check out?”

Andy: That is the book for real estate. It’s super easy to read. Again, I’m not that bright, I fully understood the book. I can tell you exactly where I was on these long bike rides. When I had these like crazy moments of like that’s really, you could do that. Why doesn’t everybody do that? It is a must read for sure.

Juan: Got it. No, and I agree, and I love the book. I got a chance to read it, like right after college. So early on and I got to breathe it, live it and then kind of experience it with the mentors that I’ve had.

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