Jordan Moorhead - House Hacking & Mobile Home Parks
LISTEN TO THE FULL EPISODE ON:
EPISODE OVERVIEW:
Guest Jordan Moorhead shares his journey from personal training to real estate investing, including duplexes, sixplexes, and a transition into real estate sales. Moorhead's story spans multiple states and investment strategies, from house hacking to mobile home park investing. He shares insights into scaling, the importance of aligning investments with personal goals, and leveraging real estate professional status for tax benefits. The conversation delves into the nuances of cash flow versus equity, highlighting the multifaceted returns of real estate investments. Moorhead also discusses his experience building and leading a real estate team, emphasizing the value of an investor mindset in agents.
GUEST BIO:
Jordan Moorhead is a real estate agent and investor experienced in house hacking, BRRRRs, as well as mobile home parks. In addition to that, he's moved around the United States a bit, allowing him to build strong real estate investing connections and teams in multiple states. This has allowed him to invest in Kentucky, Minnesota, as well as his current home in Austin, Texas. Most recently he's jumped into mobile home park investing, having closed on a park in 2023. He runs his real estate team, The Moorhead Team, based out of Austin, with a focus on helping those investing, and is host of the Austin Real Estate Investing Podcast.
In this episode, you will be able to:
- Learn how to make strategic real estate decisions to build towards financial freedom on your investing journey.
- Uncover the secrets on how Jordan was able to start and grow a successful real estate team.
- Explore the untapped benefits of mobile home park investing for lucrative returns.
- Discover clever house hacking strategies to maximize your real estate investments.
- Learn how to transition from active to passive income in real estate for long-term wealth.
The key moments in this episode are:
00:00:00 - The Gift and Curse of Real Estate Investing
00:01:01 - Jordan's Diverse Real Estate Journey
00:06:01 - The Evolution of Investment Goals
00:10:30 - The Shift from Equity to Cash Flow
00:13:44 - Launching a Real Estate Team
00:19:15 - Tax Benefits of Real Estate
00:24:18 - The Power of Real Estate Investing
00:26:02 - Connecting with Jordan
Follow Jordan 👇
https://www.themoorheadteam.com/
https://www.austinrealestateinvestingpodcast.com/
https://www.instagram.com/jordan_moorhead
https://www.rangelandhomebuyers.com/
https://www.linkedin.com/in/jordan-moorhead-74277859/
SUBSCRIBE IF YOU'RE LOOKING TO BUILD WEALTH THROUGH OPPORTUNITIES IN THE REAL ESTATE INDUSTRY
✅ http://relfreedom.tv
GET STARTED INVESTING TODAY AND ACCESS OUR DEAL LIST!
📈 http://investwithelite.com
PARTNER WITH US ON BIG DEALS!
💵 https://eliteadvantagepropertieshq.com
BUILD YOUR REAL ESTATE AGENT CAREER WORKING WITH INVESTORS
👨👩👧👦 http://eliteadvantageagent.com
LEARN ABOUT REL FREEDOM & HEAR MORE REAL LIFE STORIES
🎙️ http://www.relfreedom.com
FREEBIES: DOWNLOAD YOUR FREE FREEDOM FOUNDATION BLUEPRINT
💵 https://www.relfreedom.com/blueprint
LOOKING FOR A REAL ESTATE AGENT ANYWHERE IN THE US? FIND A TOP AGENT IN YOUR COMMUNITY
🏠 http://www.eliteagentreferral.com
JOIN OUR FACEBOOK COMMUNITY
👨👩👧👦 https://www.facebook.com/groups/relfreedom
SUBSCRIBE TO THE REL FREEDOM PODCAST
🎧 Apple Podcasts: https://podcasts.apple.com/us/podcast/rel-freedom-podcast/id1535281574
🎧 Google Podcasts: https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5idXp6c3Byb3V0LmNvbS8xNDA3NjIyLnJzcw==
🎧 Spotify: https://open.spotify.com/show/5nXA5hLHbDzRwxypc2wLur
LET'S CONNECT
👉 Facebook: https://www.facebook.com/mswenson13
👉 Instagram: https://www.instagram.com/getrelfreedom/
👉 TikTok: https://www.tiktok.com/@relfreedom
🏠 Minnesota Real Estate: https://www.eliteadvantageteam.com
Jordan Moorhead
There's so many different ways to do it that's both a gift and a curse because there are so many different things that can get distracting. And I don't regret anything I've done. It's all worked, and it's all worked out well. I wish I would have started buying bigger deals earlier.
Mike Swenson
Welcome to the REL Freedom show, where we inspire you to pursue your passion to gain time and financial freedom through opportunities and real estate. I'm your host, Mike Swenson. Let's get some REL Freedom together. Hello, everybody. Welcome to another episode of REL Freedom as we talk about building time and financial freedom through opportunities in real estate. I am your host, Mike Swenson. And if you are interested in starting your real estate investing journey, feel free to check out our website, freedomthroughrealestate.com. Got some great information there. Videos, articles to watch for you to get started and educate yourself on your journey. Now for today's episode. Really cool story of somebody that has done real estate in quite a few different areas. You're not limited to just where you live, and in some cases, you bounce around a little bit and you meet different people and you pick up things along the way. And so that's certainly Jordan Moorhead story. He is our guest today from Louisville, Kentucky. Lived in Minnesota for about ten years now, down in Austin, Texas, investor, have done burrs, run a real estate team. Mobile home Parks is kind of where you're at right now. So all sorts of stuff that we get to cover in this episode. Jordan, I'm so excited to have you on.
Jordan Moorhead
Thank you so much, Mike. I appreciate it.
Mike Swenson
Why don't you just give us that background story and kind of let us know about what you've done.
Jordan Moorhead
Absolutely. So, yeah, like you said, I lived in Louisville. I moved up to Minnesota, was in college for quite a while, didn't finish college, got into the entrepreneurial side of things, started my own small business. Eventually, I got tired of the small business, which was personal training, and I had a couple trainers working for me. But I saw the ceiling, and it wasn't where I wanted to be. You know, this ceiling could have crept up slightly over time with a lot of work, but I saw real estate and said, hey, I want to start making passive income. So I bought a duplex while I was still running that personal training business. Then I bought a sixplex while I was still running the personal training business. About six months after buying the Sixplex, I said, hey, I really like real estate. I want to be more involved. I feel like, I could offer a lot that a lot of agents don't have, and that's understanding house hacking and investing. So I got a real estate license. My first year full time as a realtor, I sold 24 houses. So that would have been my first year. My first full year was 2018. I got a license in 2017. I started investing in 2016. In 2018, I also bought another two six plex properties on the same street as the first one. And then at the same time, I found another one off market and flipped that over to my dad, who was interested in getting in real estate investing, who's also an agent in Louisville, Kentucky, who sold me the other three. So he still owns that. I do not own those three six plexes anymore, but 2018, at the end of the year, I got in a bad motorcycle wreck down here in Austin. I was actually working on moving down, back down to Austin, got in a bad motorcycle wreck, ended up in the hospital for a little over a week, was in an intensive rehab, like an inpatient rehab for about another month. Then I was down in Florida for a while at my mother's house recovering because it's all flat, there's no snow. Went back to Minnesota, was there about another year and a half. Came back down here to Austin. Kept buying properties here in Austin and then started doing the bird deal with a partner in Louisville, Kentucky, with the profits from my second house hack that I owned here in Austin. So I've just kind of been working my, like you said, there's so many different ways to do it. What you think is going to be your forever strategy may not be. I was committed to multifamily. I met a Todd decksheimer. He's a there in Minneapolis St. Paul, at a pizza parlor, at a local meetup. It's the apartment. Investors meet up in Bloomington down there. Saw how well he was doing in multifamily around this time. Multifamily was super, super popular on all the podcasts, all the books online, and said, I'm going to get into multifamily. Oddly enough, before that, I had a personal training client who I still talk to today, actually now lives in Dallas. It seems like everybody's moved to Texas. He lives in Dallas. He told me about mobile home park investing, probably back in 2015. Said, I met this guy, I went to this guy, Frank Rolf's mobile home park boot camp, and I want to say it was somewhere down here in Texas or something, and mobile home parks are the way to go. I'm going to get into mobile home park investing. You got to learn more about it. He gave me his book from the boot camp. Read that book, learned more about that, and in 2019, actually took the MHU boot camp mobile home university boot camp from Frank Rolf down here in Austin. Didn't do anything with it for quite a while. So if you think, pay attention to the timeline. I got started investing in 2016. I took that boot camp in 2019. I owned something like 22 units at the time there. In 2020, I started doing Burr single families. We did almost 40 of those. We did 37 burr single family properties, maybe 38. I lose count sometimes. And I didn't buy my first mobile home park till the end of 2023. So you talked about in the beginning here, there's so many different ways to do it that's both a gift and a curse, because there are so many different things that can get distracting. And I don't regret anything I've done. It's all worked, and it's all worked out well. I wish I would have started buying bigger deals earlier. So we just bought, like I said, a 31 lot mobile home park. So 30 lots in one single family house in Louisville, Kentucky, in November of 2023. The returns are better than anything else I've ever bought, and it was a challenge to find it. And so we bought 31 at once, versus we bought 38 over two and a half years, and we were running around like chickens with their heads cut off getting these deals together, we ran into a million different problems. We could spend the whole podcast on that. All the problems that I ran into with bird that I could tell you not to do. Um, and I. And I love bird. I'm glad we did the burr, but we didn't do it right a lot of times. And there's some ways that you just make sure you don't run into those same issues.
Mike Swenson
Yeah, there's definitely scalability issues that people run into with the burr. And obviously, yeah, a lot of people have been very successful at. A lot of people have figured out how to scale. But kind of, to your point, you are honing in on where you're going to kind of put yourself in the future based on what you've done in the past. It's kind of like a funnel. Like, you're doing some things, you're learning, like, oh, I like this, or I don't like this, or I like how this works. Or maybe you get a key relationship in one area that might propel you forward, and so you're slowly getting closer and closer to kind of where you want to be, but it's because of that journey that you know where you want to go because you've experienced the pain of your past deals. Now you see mobile home parks as that place for your future, but you wouldn't have known that had you not done it. And I think that's the thing, is I talk to more and more people who want to get into investing or start investing. It's like you got to just get in the game and do something to determine what works, what doesn't work. And you're slowly going to adjust and get better and better and find that sweet spot, but you're not going to find the sweet spot just listening to podcasts and reading books about investing.
Jordan Moorhead
No, and you're absolutely right. And what I've learned is you absolutely have to get started. You have to get out there and do something. I got advice early on, scale up as fast as you can. You know, stay away from the if, if you're, if these are your goals, maybe don't focus on the small stuff, but the small stuff is easy and that becomes a kind of a curse at some point. So my biggest mistake that I did wasn't that I did any certain sort of asset or didn't do any certain sort of asset class. It's that I didn't pay attention to my goals. My goals were x. Let's say my goals are good x amount of dollars in cash flow and instead im just looking at whats the best deal or what deal can I find, rather than does that deal help get me closer to my goals? And that was my biggest mistake personally. I did a lot of stuff that you can look at it on paper and say, Jordan, that worked great, but that didnt get me that much closer to my goals, which were financial freedom. In fact, the two duplexes I still have here in Austin have gotten me closer to my financial freedom number than all of those single family properties that I have in Louisville and then all of those multifamily properties I had in Louisville ever did. So two duplexes in Austin.
Mike Swenson
It comes down to that. Figuring out where on cash flow versus equity, kind of a sliding scale. Typically you might find more cash flow. Where you find less equity, there's some where there's a balance and every investor has different goals and your goals might change. Early on, I tend to find that people want to focus on the cash flow to be able to kind of build some cash flow going and then maybe they shift towards equity. But other people are like, forget that I'm just going to go towards equity it really doesn't matter at the end of the day when you start to get work through that. But once again, you're not going to know that until you, you get moving into it. And so it would have been easy to say, Jordan, just wait, buy these two properties in Austin and you'll be good. But you probably wouldn't have gotten there unless you did all the stuff you did in the past. Yeah.
Jordan Moorhead
And I think that I have a perspective that it's backwards. I think you should focus on equity at first when you don't have anything. So I got started house hacking. I had like $6,500 that I had to put down on that first house hack. And I had to cash out the majority of a Roth IrA to even get that money. I had no equity, is the point. I had no equity at that point. So I needed to focus on how can I keep my expenses as low as possible and grow as much equity as possible. Now that I've done that, the equity has started to have diminishing returns. You can't eat equity, but if you have this equity, you can then invest to make cash flow. And I think you need to figure out at what point do I want to start turning the equity into more of an annuity stream or cash flow. And what does that look like for me? I had a long argument. You mentioned Gobundance before we got started on this call. Not an argument. I had a conversation with the guy at Gobundance here recently. He said, hey, I just focus on growing the equity. Because for me, when I get to the point that I want to turn that equity into cash flow, I'll have such a massive amount that I'll just turn into cash flow. And for me personally, I'm a little bit opposite. Now I just want to get as much cash flow as I can. I don't necessarily care about the equity because the equity doesn't do anything more for me at this point in my life. You know, I've built pretty good equity and net, pretty good net worth. And this is against like any fi or financial independence or I want to spend some of it, I'd like to have extra cash that I could spend on luxuries. I subscribe to that line of thinking of if I'm going to buy things that are frivolous, I want to buy them with passive income. I don't want to buy them with active income. I want to use the active income to plow into more passive investments or more investments that are either going to make me more equity or make me more passive income.
Mike Swenson
Even as you explain that, you can hear the journey of your thought and how it's evolved or changed over time. And I think that's going back to that person sitting on the sidelines like, that's the stuff you've got to get in the game for. You're not going to come to those conclusions or you're not going to learn those lessons until you do something. You know, find a way to get in the game. Manufacture your first involvement in investing some way, shape or form, and then you'll start that journey.
Mike Swenson
So talk a little bit about your real estate team, you know, in addition to your investments, launching a real estate team, moving to a different place, launching a team and growing a team. Tell me more about that.
Jordan Moorhead
Yeah, so, you know, we talked about when I got started real estate investing, I actually hit rookie of the year at our brokerage. I almost hit rookie of the year in the region. And I think I might have had a good chance had I not gotten a bad motorcycle wreck at the end of October. I was just, I was hairs away from it. I was runner up for rookie of the region. So I got really involved in how do I help as many people as possible? Do this same thing, get into house hacking, get started with financial freedom. Because I really, truly believe if you don't do something more than just max out your Roth IRa, you're going to be living on the minimum at the end of your life saying, how can I save money? How can I not have enough? You know, not spend too much? Because I don't. Personally, I don't believe Social Security is going to be around for that much longer. It sounds like it's going to go insolvent by mid 2030s. Maybe they'll print other way out of it, but who knows? So, yeah, I was really passionate about that, because I know if I get one person into a duplex, let's just say duplex is $500,000 here in Austin. I get one person into that duplex, in 30 years, it's likely to be worth around a million dollars, and it's likely to be throwing off cash flow of anywhere in the five to $8,000 a month. So you either sell it, you have that million dollars, or you have another five to eight of them thousand dollars a month. Of course, you're going to have property taxes, insurance, those types of things, but that's still a lot of extra money, almost a replacement of what your Social Security check would have been. So every time we can get somebody involved in that, awesome. And then, of course, we do help some people that want to buy regular homes, but the majority of them are house hackers, investors. So I got started doing that myself. I had a really good first year. I had a really good next couple years. Eventually, I had more business than I could handle. And I had a buddy getting started in the real estate industry who was also doing this house hacking thing. He had three at the time, and he said, hey, I'd like to come work with you. And I know we talked about it, and that didn't come around right away, but he started working with me. He hit rookie of the year the first year, and that was my first team in Minnesota. I actually had my now fiance working on the back end of the team. She has done a lot of administrative roles for real estate teams in Minnesota and then bigger companies after that. But when I moved down here to Austin, I kind of started that same thing over just an abbreviated version of it. Within about a year and a half to two years, I had agents on my team again here in Austin. Again, you know, you talked about move to Austin. I didn't know anybody in Austin. I knew a handful, maybe ten to 15 people, because I actually did live down here in 2016 for six months. Moved down here, was ready to be down here, did not plan it well, did not have enough money, had to go back to Minnesota and restart that business I talked about earlier on. So we. Within about two years, I had a team. I had one agent, I had two agents, I had three. I think my. My peak has been four agents and two admin staff. Right now, we're at three agents. They are all house hackers. They all have experience investing in real estate. That's a requirement to join our team because of who we work with, and I don't care if you have experience selling real estate. I care that you understand real estate, because I can teach you how to be a real estate salesperson. I can't. I can't teach the investor mindset, though, not that easily, unless you're really interested in learning. But, you know, my requirement to be an agent is that you're a real estate investor.
Mike Swenson
That makes a lot of sense. I mean, when you think about a lot of real estate agents, they tend to think of themselves as salespeople, where it's like, I could be selling homes, I could be selling copy machines, I could be selling whatever it might be. And so they think of themselves as salesperson. So it's like, when's my next commission check? They don't have that mindset of an investor, and so they're just focusing on deal to deal to deal. I'm making my calls to get my next deal, where that investor mindset is thinking about, how are we building something over time, building a business, building streams of income, building wealth. And, yeah, to your point, that's the harder part, because I work with agents on my team that have sold a lot of real estate, and it's just so hard for them to even think about, like, how to start investing. When I show them a deal calculator, like, here's how you analyze a deal, their eyes gloss over. They don't know how to think about that. And they've been in real estate for 510 years, and, you know, haven't bought a property, haven't worked with an investor, and just don't understand how to, how to analyze a deal. So it is a different mindset shift.
Jordan Moorhead
It is, and I think a lot of it is something that can be learned when you understand the power of it. And another something we talked about before we got started here is you have just such amazing tax benefits as a real estate salesperson when it comes to investing in real estate, because you are, you automatically get the real estate professional status. Of course, talk to your accountant. Make sure your accountant files you as a real estate professional. But that gives you the right to unlimited depreciation from passive investments to offset your active income. So, for example, and again, I'm not an accountant. I'm not an attorney. I'm not a tax professional. Make sure to talk to your tax professional. But, for example, if you made $200,000 selling real estate and you had $200,000 of write offs, provided you have, and I learned this the hard way, paid your Social Security, maybe you're on a w two from your own business, that kind of stuff, you can wipe away that active income with the depreciation from real estate. So we have unlimited depreciation. Real estate professionals, I think that is the biggest benefit for real estate salespeople as real estate investors, because, yeah, you can go make really good money as a real estate agent, but then you're going to get slapped by the tax man. Think in Minnesota, you're eight to 10% state income tax, something like that. Yeah. And then you've got 30% from the federal government, roughly. I mean, that's almost half of your earnings gone day one. But if you can reduce that with depreciation from real estate investments and all the other write offs from real estate investments, you can invest that money and grow it further later on.
Mike Swenson
I remember that with my first journey. We bought our first property right as the market crashed, and we stayed in it for four years, turned it into a rental, and then bought a short sale and house hacked that. But I remember with our townhouse, you know, we were cash flow, even maybe just a slight loss, kind of depending on the year. But come tax time, we had those write offs. It's different then than it is now, but we had some of those write offs, and then at the same time, you know, the mortgage is getting paid down. And so I remember even when I wasn't in real estate full time, I was like, oh, $300 a month is coming off the mortgage, and on average, a couple hundred bucks a month is coming off on the taxes. Even though I wasn't feeling that extra income because we were cash flow pretty even, I was still building wealth because of that happening, just because we were able to make the cash flow work. And it's that little bit that will continue to grow over time that people just don't think about.
Jordan Moorhead
Yeah. And I think that real estate investing versus, let's say, stock investing, or ETF's a retirement account, you're putting it all in VTI through Vanguard. People look at that and they just see the principle grow over time. And they say, well, I'm getting 8% in my VTI. That's great. And they say, well, you're telling me to go invest in real estate. My cash on cash return would only be 8%. Why am I going to do all that work for that same return? That, that misses everything you just mentioned, that misses the loan pay down, that misses the depreciation, which comes off your taxes, and that misses the appreciation of the real estate. So when you look at your real estate investment holistically, the same way as you would look at your stock investing, the returns are double a lot of the time, sometimes better, especially when you're doing your own real estate investments. I've seen some of my investments be 1020, 30, 40, 50% upon sale, you know, way more. My first duplex, just quick numbers. Bought it for $182,000, put $6,700 down, something like that. Spent about $15,000 rehabbing the property. I lucked out, and I got the siding replaced by hail, storm damage, which happens a lot in Minnesota. So I'm in it for roughly 20 grand. I sold it two and a half years later for $327,000. What's that? 700% return? You know, good luck finding that in an ETF. That's abnormal, but not completely uncommon with real estate. Again, like you said, you have to be in the game because some of them might just be 20% returns compound over time, but you can hit those just massive home runs. And I bought that property not knowing that, too. I bought that property thinking, I mean, this is an okay deal. It'll work. I thought at the time it was going to be worth 230 after the rehab was done, and I lucked out, I got that siding. So, again, there was some luck with the storm damage, which, again, also does happen from time to time in Minnesota. And the market did well. But you have to be in the market. It doesn't mean you can't do other investments, but especially if you're a real estate professional, you have to be investing in real estate. So essentially practicing what you preach.
Mike Swenson
Well, and even to your point, mentioning about appreciation, you'd mentioned, let's just say, five to 8% cash on cash return, somebody might hear that and think, oh, well, my stock might outperform that. But then if you talk about the appreciation just for clean numbers, say it was $100,000 house. Now, I know you're not going to really find $100,000 house, but if I'm only putting 20 or 25% down on that, that house appreciates by 5%. Right? We hear appreciation is 5%. That's $5,000. But remember, I only put in 20 or 25, so it's actually multiplied by four x or five x. So it's actually a 20% to 25% return on my money for that appreciation. And that's not including the depreciation, the tax benefits, the mortgage, pay down, the cash on cash, like, all that stuff compounds. And one year, two years, three years, you might have a step back in one of those areas, but you have all of these things adding up over time, and that's the huge win of real estate investing.
Jordan Moorhead
You know, biggerpockets actually has. It's a very simple calculator. I would. It's similar to an excel spreadsheet, but they spit out these graphs and numbers at the bottom of it after you run a property through their calculator. I've not used it in a long time. I have other spreadsheets I use now, but I remember seeing that and saying, wow, you know, this is a 10% or 8% return, but over a couple years, the returns are high double digits. And this is amazing. So it's good to look at it holistically, we just mentioned.
Mike Swenson
Absolutely. Well, thank you, Jordan, so much for coming on and sharing. We talked about a lot of different stuff. You've certainly had a lot of experience in a lot of different areas for people that want to reach out to you. Learn more about what you're doing in Austin and other places.
Jordan Moorhead
How can they do that if you're on social media? I'm very easy to reach on Instagram. Jordan Moorhead. My phone number is 512-88-9122 and my email is Jordan dot Moorhead comm. And morehead is spelled m o o r h e a d. Lots of people put the e after the r, and there is no.
Mike Swenson
That's the beauty of being a real estate agent is you want to be found, right? So find yourself, phone number and email anywhere.
Jordan Moorhead
So, yeah, it should be very easy to find me. So just google me and you'll find it.
Mike Swenson
Yeah.
Jordan Moorhead
Cool.
Mike Swenson
Well, thank you so much, Jordan, for coming on and sharing. It's exciting to hear your story and excited to see where you grow with more about your mobile home park investment.
