Justin Rademacher - Growing An Investment-Focused Real Estate Team
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What is it like getting into real estate, growing a real estate team, and getting started on the investment side of the business? Hear from this former furniture salesman about his journey into leasing commercial real estate, launching a real estate team, working on a flip home, and picking up and moving 1700 miles from Minneapolis, MN to Fort Myers, FL and launching a real estate business in a new location. We discuss what it's like working with investors, getting started investing yourself, the benefits of working on a real estate team and much more!
In this episode, hosted by Mike Swenson, we discussed:
- It's quite difficult to succeed quickly in real estate by being an agent only part-time
- The most successful people are the ones who can solve problems
- Build passive income through real estate investing in addition to doing transactions as an agent
- The benefit of passive income is freedom of time
- If you're not failing you're not learning
- Compound effect on investment side is really strong
- Agents help by giving people information to make informed decisions
- We need to have conversation to overcome roadblock
- Roadblock is not an excuse to halt in investing
- Relationships takes time to build and reinforce
- Learning curve expedited quickly as we build relationships
- Building passive income through real estate is possible
- By understanding the economies of scale your mind can can grow quickly
Timestamps:
0:00 - Intro of Justin’s Career
2:17 - Introduction in Real Estate
8:02 - Sacrifices
12:16 - Perspectives
19:55 - Transactional residential real estate
24:53 - Doing a flip together
35:10 - Investor focus business vs Residential focus business
39:15 - Positives of working with investors
42:35 - Agents are not salespeople
43:27 - Partnering on your first deal
47:35 - Roadblocks
57:50 - Get ahold of Justin
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Full transcript here:
Mike Swenson
Oh welcome everybody, so today's episode of The REL freedom podcast, where we talk about building wealth and gaining time and financial freedom through opportunities in real estate. So today we have a special guest one that hits very close to home, we have Justin Rademacher who is the team leader for the elite advantage team, our real estate team that we have here. So he's going to share with you how he got into real estate, talk about building and starting our team and his transition to investors as we've moved to a focus on working with investors. And then some exciting news for him and his new move that he had recently as well. Moving down to Florida, so a lot of stuff to cover. But here is Justin's journey, getting into real estate working on a team with me and working with investors. And then we'll talk a little bit about the future as well. So Justin, we are so excited to have you.
Justin Rademacher
Yeah, I appreciate you having me on. It's an honor to be on one of these episodes. And looking forward to it.
Mike Swenson
Cool. Well, why don't you just go ahead and share a little bit about your background, kind of what you did before real estate. And then we can even talk a little bit about kind of how how we got started and and how we started the team?
Justin Rademacher
Yeah, absolutely. So it was a few years ago. And now that I was working in furniture sales, I was a team leader for a furniture company there in Minnesota. And I just got really sick and tired of the constant nights constant weekends, it was a great job learned a lot, it was a lot of fun. And was looking for a way to get into real estate, I've always liked real estate, in some facet. You know, it all started from what everybody else is probably going to say, HGTV right watching those shows, Million Dollar Listing, things like that. And then I did my own research. And I was like, Man, this is, this would be a fun, fun industry to get into. I just didn't know how I wasn't in a place where I could just kind of drop everything and jump into real estate.
Justin Rademacher
So my first introduction into real estate was actually leasing commercial offices, like office space, downtown Minneapolis, that was my first introduction. So I left the furniture company. And I was actually doing that for a while. Fun, learned a lot and networked with a lot of commercial agents and started learning just the very, very basics of, of real estate in downtown Minneapolis real estate and things like that. Not exactly what I wanted to do for sure, with real estate, I wanted something a little different direction.
Justin Rademacher
But it was a really good introduction. I was looking for my next opportunity where I saw a posting for a team leader position. I was like, Well, I've got you know, a lot of background in that. And that's where it kind of led me to you and I was like this is this kind of fits the bill of what I'm looking for. I feel like you know, some of the strengths that I have acquired over a lifetime in sales and in leadership roles. I felt it would be a good fit. And so reached out. And I guess the rest is history. Here we are a few years later, Team Leader with the elite adventure team. So it's been a fun run. And it's been a lot of lot of learning. A lot of learning, I think we both would attest to real estate's a lot harder than than it looks. It's definitely a lot harder than what it looks like on Million Dollar Listing for
Mike Swenson
sure. Yeah, and I think for for a lot of people that are outside of real estate, they're trying to figure out how to get into real estate. And for some people, it's, you know, maybe I do something part time, and that transitions to full time. If you're doing production, that's really hard to do, because you're trying to build and start a business and build momentum when you don't necessarily have all the time and energy devoted to building that momentum. And so for you, you were able to come on the team and to be able to kind of earn, earn while you learn and get in that way. And yeah, you're right.
Mike Swenson
There's there's a lot of learning. For those that don't know, kind of the the past history of the team. We started this new team, we started this new location while I was working on the operations side for large real estate team and this was a kind of a new branch off of that team at the time. And so the goal was for you to get in, recruit some agents be able to start get the footing of that team. And then at the same time I was kind of helping out with the operations and admin side of the kind of the larger team. That's that's how we got started. So that would have been kind of summer into fall of 2019 and then we kind of jumped in full time together. Are 2020 spring of 2020 and move forward from there. So when we first started the team, it was just a residential real estate team, we weren't at all talking about working with investors.
Mike Swenson
But you knew my passion for building wealth, financial freedom, the whole idea of trying to get off the hamster wheel, because there's so many agents that don't make enough money, they either have to go back to their day job, they have to go back to part time at their day job. And it's really hard for them to get enough momentum to stay full time. And you, you've been on the recruiting side, you talk to lots of people that were in those shoes of I don't know how to get their full time or I'm trying to get their full time, or I'm doing it full time, and I'm not making the money that I want to make. And eventually, then they go back to their jobs full time. It's just really hard to find that momentum. The early days is you had some conversations with agents, why don't you just talk about that a little bit?
Justin Rademacher
Where do I want my future to be? It's all about where I want to go. Now, not everybody was in a position to be able to drop everything and just kind of go for it. Right. And I respect that. And I understand that. Because I've neither was I right, you know, when I was making that transition from, you know, selling furniture and whatnot, I was not in a position to be able to do that comfortably. What I have found and what I you know, I'll speak to one of the agents that's on our team, right, Mike angler, you know, he ultimately made that decision, you know, we we brought him on, he was, you know, still had another job and, and all that kind of stuck for a little while while he was on the team. And ultimately, he just made the choice to just go all in and go for it. And he's taken off. And a lot of great ways. He's been pretty successful, and he's continuing his success right now is snowballing.
Justin Rademacher
So, you know, my advice for people is there's always going to be, there's always going to be things that come up, there's always going to be roadblocks, there's always going to be something that happens that says, maybe I shouldn't do that. And I feel from the conversations that I've had the the people that succeed are the ones that say, Okay, well, how can I get past that? How can I? What can I do? They're they're great problem solvers. Right? So when I was talking to people about, I want a part time job, and I'll do this part time and, and that's great. For some people, that's absolutely great.
Justin Rademacher
For some people, if they want to do real estate on the side, that's fine. From my personal opinion, I just don't think you're going to get to the level of financial freedom, that you're looking for just doing real estate part time, if that makes sense. So the people that want that financial freedom are going to find ways to get past that to get past the I can't quit my day job, okay, well, if you can't quit your day job, then you might have to be working more hours, you might have to, you might have weekends off? Well, if you want to transition into real estate, what sacrifices are you going to make? Are you going to work on the weekends? Are you going to work at night? You know, when when you're putting the kids to that? What are you doing? Are you sitting down and watching TV? Or are you actively trying to find properties for other you know, clients of yours, you know, are you prospecting things like that? Right? So there's, there's always solutions, it's just the most successful people that I've seen are the ones that can problem solve and get past some of those obstacles, if that makes sense. Yeah,
Mike Swenson
well, and I think to their their, if getting into real estate is your full time desire. Like you said, there's a lot of people that are successful part time agents. It's probably because they just want to be part time and have it be extra money on top of what they're making. But if your desire is to get into real estate full time, there probably has to be some sort of jumping off point, like you said, in Mike's case, he literally just called us out of the blue and said that he quit his job. You know, we talked about that transition. But he just said, Hey, I quit. And the key thing there is like there's that all in moment. Because if you're going to have one foot on your current career and one foot into real estate, it's going to be hard to to get that success when you're one foot in both.
Mike Swenson
So the jumping off point is either you're saying I'm going to go all into real estate, and quit my previous job so that I can devote all of my attention. You probably have to have some money saved up, you probably have to have some plan in place. Otherwise, like you said, the alternative is you're just going to have to work a lot of nights and weekends for quite a while to gain that momentum. And what I tell people is you can only do that for so long. You can only maintain a sprint right like a lot of times in real estate. They glorify the grind like I'm really grinding it out. Well you can only do Do that for so long before either your your body gives up the the amount of sleep you're getting gives up, your relationships give up. And so I would say that transition has to have a deadline to it have, I will be full time in real estate at this date.
Mike Swenson
Because otherwise, if you just kind of do your job trying to do real estate, you're just not going to get that momentum. And we've seen that time and time again, I think now I'm almost about seven or eight years, eight years in real estate. It's just really tough. The number of people that have succeeded, doing their day job, building the momentum, you know, on nights and weekends, it's just really hard to do. And so there's, for those that have made it, there's that tipping point, at some point where they say, both feet are in the boat, I'm going, I'm gonna give it a run and do that. And then when you fully commit, that's when you start to see that success start to build otherwise, it's just a challenge. And eventually, you're just gonna give up and go back to doing what you were previously doing. Yeah, 100% Agree, continuing on the timeline here for the team.
Mike Swenson
Why don't you just talk about, you know, as we transition from a team that worked only with residential people, you know, as we continue to talk about building wealth, financial freedom, getting off the hamster wheel, naturally, we started keeping our eyes open and thinking about working with investors. And, you know, we talked about when you help investors out, you're exploring good deals, you're exploring good investments, you're networking with agents that work with investors. And slowly over time, that's blossom to now where I would expect this year, probably 85% of our closings, maybe 90% of our closings are going to be investment related buyers and sellers. So talk about that transition and how you experienced that, right?
Mike Swenson
Like you, you're following kind of what where my head is transitioning and evolving over time. And as I said, it's the idea of wanting to get off the hamster wheel, because so many agents eventually get burnt out. You're only as good as your last transaction, you're only as good as your last quarter, you're only as good as your last year. And now that commission check comes in and I got to start back over again. And so, you know, we've had this conversation talking about building wealth. So share your perspective and working with me, maybe, as we've evolved now to working with more and more investors. Yeah, absolutely.
Justin Rademacher
You said a key word right there, you said transaction, right. And most agents are transactional. And I'm not saying there's anything right or wrong about that, but it doesn't build, it doesn't build wealth, or reoccurring wealth, or really get you off the hamster wheel by doing the transactional side, I can actually relate that back to working in the furniture industry, right? Working in the furniture industry every single month that they're getting in the month, you're at zero for your sales. And you You work all month, you work all month, and you crush it, whatever. And then it's depressing. The next month, you're at zero again. And so it's just that that vicious cycle, right. And for people that really want to build wealth, that's just really not the path to go down.
Justin Rademacher
So when we started transitioning into working with investors, I got really, really excited, like really excited about doing it for a variety of different reasons, right? It is a step in the direction of not no longer being transactional, and actually transitioning into investors being investors ourselves, right? You know, we and I know we're gonna talk about this a little bit later. But, you know, doing an investment property and owning property or stuff, like I've always wanted that in the back of my mind, there's always been that man, I would love to own property, but I just don't know how to do it. I just don't know how to do it. And that's what's so exciting about where we are right now. And where we're going. I'm more excited about where we're going, and the trajectory that we're facing here.
Justin Rademacher
Because there's so many opportunities that I just when we first started the team, like, we never had this really in mind, that's an investor focus, you know, it was more transactional, it really was. And so I'm just really excited about where we're at and some of the experiences that we've had. And like I said, I'm a lot more excited about where we're going. Because if it doesn't provide just opportunities for us, right now, agents that want to come and be a part of our team. We're going to teach them and grow them and show them how they can build passive income, true passive income, through through real estate rather than being just transactional.
Justin Rademacher
Whether it's, you know, investing in short term rentals, whether it's long term rentals, mid term rentals, whatever whatever the case may be, you know, and what's exciting about where we're at now is, you know, finding the ability To where, you know, in my mind, there's always been that, that obstacle of, I don't have the money, right, I just don't have the money to do it, I don't have the capital or I don't want to spend my capital, maybe I have, you know, 60 $70,000 in the bank saved up, but I don't want to invest that in real estate, I don't want to use my own money.
Justin Rademacher
We're at a point now where it's like, we can help people potentially do that without having them have to use their own money, right. And so that's what's really exciting is just the transition over the last, I'll call it three years of where we were, to where we are, and to where we're going, you know, I would say, three years down the road, when we look back, we're gonna be like, Well, that was fun. But now look at where we are, right. And just having that trajectory is really exciting to watch
Mike Swenson
when you're working. And this is where now that we're working with investors, it opened up the path for you to be able to make a move to Florida, and we'll talk about that in a second. But, but think about when I'm on a regular residential real estate team. Now, a lot of residential, real estate agents do also work with investors a little bit like, Hey, I might have an investor client here, I might have an investor client there, you know, maybe we do a deal or two throughout the year, fantastic. So much of an agent's time working with residential clients is spent nurturing relationships, right? Like you have a database, and it's how big of a database can I grow, you might have 200 300 400 people, and you're networking, you're constantly working with all those people to get to 20 transactions a year, or 30 transactions a year, you know, if the average person moves every seven to 10 years, let's say every 10 years, if you want to do, let's say 20 transactions, you have to have at least 200 people.
Mike Swenson
And those 200 people have to all choose to work with you, when they have a closing now I get it, there might be some double ends that happen in a year. Or you're asking for referrals, you're you've got lead sources, you're making calls and all that, when you're working with investors, it's kind of flipped a lot of your time is spent finding good properties. When you build up a database of investors. Now, your focus is on finding good properties, getting those properties in front of your investor group. And they select the ones that they want. And so you could potentially have, let's say, five, well, let's just make it super simple. Those same 20 transactions. If you had five people that bought four properties in a year, now you have 20 transactions.
Mike Swenson
Now you can make the argument maybe they're lower price point, whatever they might not be, I mean, we're doing more larger multifamily, you know, four units plus. But what if you only had five people to talk to, and you just had five really good investors that bought four properties a year now I don't have to talk to 200 people not that we don't want to talk to 200 people I would love to. But if you had five really good relationships, you could still do 20 transactions? Or what if you had 20? Great relationships? Now you could do you know if that if let's just say They even bought one a year or two a year now you're looking at 2040 6080 closings with the same 20 people? And how much deeper can you go in those relationships when you've got only 20 people that you're working with? And so I think that's where the mindset shift is different working residential versus working with investors as a sole focus.
Mike Swenson
Now, like I said, there's there's teams out there that you have some investors you work with, but we're kind of all in on the, the the investor side, it's how can we go find those 20 people that just purchase and purchase and purchase again with us. The other thing that I'll say then is your entire day because you're you're focused on finding great deals. Now you find a deal, you might want to be in on that. And as we're building good relationships with property managers and lenders and that sort of thing. You're able to double dip your time in a way that you haven't. You know, as you're working in residential, you find some great investment properties. But if your sole focus was finding investment properties, you're just in a totally different league, in terms of finding great deals, finding big deals, finding, you know, investment opportunities to partner with people and that sort of thing. So why don't you just chat about that a little bit.
Mike Swenson
Over the past year now you've developed some really great relationships with some investors that have purchased multiple times with you. And you've also found some great agents that you've worked with, that have properties that come to you now and say, hey, you know, here's a great property and you have a chance to maybe buy something before it goes on the MLS too.
Justin Rademacher
Yeah, um, yeah. So the key no matter what you're doing trend, transactional. What I would call transactional residential real estate or whether you're working with investors is obviously still to build those over Relationships, right? The difference is, you spoke before about right? Want, you know, maybe essentially doing one transaction with one customer, one client every 10 years seven to 10 years, right? The difference here is I have had in one year, I've had one, one investor buy, you know, for four properties with me, right? And that's that's one of the key differences. And the reason why we did that is because I've built up a trusting relationship. But it's less, it's less, I don't want to say it's less work, because it's just different work, right? I'm not building the relationship, I'm not driving, you know, this client around because he's in Washington, right? So I'm not I'm not driving him around.
Justin Rademacher
But my time is spent looking for deals that fit his criteria. So it's similar in the sense of, I'm still doing those conversations, those client needs analysis conversations, just like I would on the residential transactional side of things. The difference here is, I'm looking for an investment property. And my time is just spent differently, if you will, if that if that makes sense. The nice thing, too, is you talked about this before, I can have five, six investors. And that fills up my time. Rather than having 2030 45, six investors, because most of these, most of these investors are what I would call serial investors, right? They're not just looking for one property, and then like, Okay, thanks, I appreciate it. Most of these, and there's nothing wrong with that.
Justin Rademacher
The difference is these investors are, are actively they're doing what we're what we're on our path to do, which is they're, they're building their passive income. And most of the investors I work with, are actually trying to work themselves out of their day job. So I just had a conversation today, with this morning with an investor out of California. And he's a doctor at a clinic. And he had said, exactly what what we're doing here is, I want to have enough properties where I can choose whether or not I work, so he loves what he does. But he wants to have the choice. And I think being investor focused, it's just a different conversation. It's, if I want to go work, if I want to go do these things, I get to choose what I do with my time. That's the benefit of passive income. And that's the benefit of working with investors. Because you're we're aligned, what we're trying to do what we're helping them do, we're doing ourselves.
Justin Rademacher
So there's that there's that synergy. And there's that alignment. And that's just fun, fun to see. And that's fun to be a part of, to have those investors and have those conversations and building partnerships and building the possibility of partnering with some of these agents, you know, I've had these conversations, not agents, but these partnering with the investors on properties, right. So that's a fun conversation to have, when when you're having those conversations about building passive income.
Mike Swenson
Some of the investors that you work with are actually agents and other states. And the beauty is, is they're busy, they're doing their their day job, which just happens to be be a real estate agent. And you're still adding value because you're finding great investment properties for them to invest in other states. So they can still build their agent business, build their team business, and still be an active investor, because you're adding value, right? What what agent doesn't appreciate the value of an agent should appreciate the value an agent provides. And you're able to do that. And so that's where Yeah, some of the investors we work with their day job, is there an agent in another state, and they just want to find good investments?
Justin Rademacher
Yeah, well, it's the leverage of time. That's what that's what we're providing, and expertise. There's, there's a lot more that we're providing. But like the doctor, he's super busy, he works Monday through Friday, he just doesn't have the time to be able to go get his real estate license and do this on his own. So I'm providing time and I'm providing expertise, and I'm providing knowledge and, and that's, I love doing it. It's a lot of fun. But that's what we're providing.
Justin Rademacher
So with this other agent in Washington, who's an agent and investor, he's doing his his daily going out and helping clients and on the residential side, where he's building his investment portfolio to work himself out of that daily grind. So he becomes a full time investor. We're we put an offer in on a short term rental, just the other day. So he's building his portfolio and it's just fun to be a part of that. It's fun to to be in that network of individuals that are so like minded. It's fun to see it's fun to be a part of, and it's just exciting to see where we're going.
Mike Swenson
Yeah, let's talk about doing a flip together. Right. So part of what we want to do is build experience I'm working on investment properties. And you hadn't had the opportunity yet to be able to do a flip together. So the cool thing about being on our team, I guess is we did that together with a few of the agents on our team. We selected the property, we put together the plan, and we learned a lot along the way. So why don't you share just a little bit of your perspective, and then to how that's now helped you, as an agent. And as somebody on our team that focuses on investors give you that perspective that you hadn't had before?
Justin Rademacher
Yeah, that was a, that was a really, really good opportunity to be a part of, in regards to that flip. We learned a lot. I mean, really, from day one learned a lot like, Okay, well, here we go. We're in this now what? And it was a lot of it was a lot of learning on the go, we all learned something. And that was a lot of fun to be a part of. And, you know, I would, I would say the biggest takeaway there is, it's a lot harder than people think it is, again, it's not what you see on HGTV, it is not what you see on HGTV, I wish I could just snap my fingers and oh, hey, look, we're done. It doesn't work that way.
Justin Rademacher
And at the same time, you know, there were some failures along the way, for sure. But that's how we grew. And that's how we learned. And if you're not failing, then you're not learning. And so for us, we you know, making some, and we made some really great successes, don't get me wrong. But some of the you look at those failure failures that we had. And some of the mistakes we made. It's like, okay, great. Now I know for my next one, what not to do, or how to do it differently, there's no substitute for that experience, right, and going through that someone can tell you what to do, or you can or you can learn, and learning some of those those techniques. And some of the tools that we that we've picked up along the way were are, in my my opinion, invaluable. From, you know, structuring the deal in the very beginning to getting, you know, getting the proper relationships that you need in regards to vendors and things like that.
Justin Rademacher
A lot of those things, you're just not going to know until you just jump in and do it. I mean, you can watch YouTube videos, but you're not gonna really learn anything until you just jump in and do it. You just gotta jump in and do it. So it was a fun process. It was an educational process. And what it's helped me learn down the road is now I have experience, right? Well, have you ever done a flip? Yes, I have. I haven't done a flip. And that's fun to say, right. And the nice thing is, and we may or may not go too in depth into this is we didn't use any of our own capital. Right. So what how did we do that? Right? That's a great question. That's why we should have a conversation with conversation with you if you're looking to get into that realm and not have to put in any of your capital and how does that work? Well, great. That's a really good question. And we wouldn't have that story to tell if we didn't go and go and do it. That's just been it's been a really, really interesting journey. For sure. I'm excited about it.
Mike Swenson
What things popped up that we didn't know about, you know, there's a few things that come to mind. Some of them are bigger ticket, some of them are smaller ticket, like one of them. You know, we had a tree out front that got tagged for emerald ash borer, the city came through after we purchased the property or after our investor purchased the property, you know, came through and tagged this tree that had to be cut down. Well, either we arrange for it to be cut down, or the city does that. And they charge you for that, you know, that was something unanticipated. It wasn't super expensive, but it's still enough, right. We had the kitchen layout, we had kind of loosely talked about the layout that we wanted, well, we made a change at the end. And, and the electrical inspector came in and said, well, the outlets not in the right spot, because we had shuffled things around.
Mike Swenson
So we had to move an outlet, you know, little things like that. There's a change order for the electrician, you got to pay for that, right. And then the big one was the week before we were ready to be done. The furnace went out. And we needed a brand new furnace, which you know, cost over $5,000. And, and I think the reality is that's that's real money, right? So that's either we tried to sell it for a little bit more than we thought, or now our expenses grew by $5,000. And so those are the little things that you can plan for we could have planned a different kitchen layout, right? We know that going forward. Now. Let's not make a last minute change. That means an electrical outlet needs to be moved. But we couldn't plan for the city coming through and telling us we got to cut this tree down. We couldn't have planned for the new furnace.
Mike Swenson
I mean, I guess we could have anticipated it was nearing the end of its life but you're not all He's going to say, with every every property, new AC new furnace, because that gets to be expensive. And so, you know, there's there's little things like that that pop up and, and you have to learn and, and figure out but at the end of the day, the plan we had in place, the budget we put in place what we thought we were gonna sell it for. We were pretty close on that. So all you know, it took more work than we thought we had some hiccups along the way. But at the same time, the plan executed pretty much beginning to end about what we thought it would be, which was, which was a success.
Justin Rademacher
Yeah, and the only thing I would add to that is the only absolute when going into these types of properties is something is going to go wrong. It just it is and that's okay, something is going to happen. Some something isn't going to go quite as planned. It's not what happens, it's how you respond to what happens. How do we fix it? Right? The tree the you know, the tree? The the furnace going out? Okay, well, it is what it is. Now what do we have to do right there, there was work that we had to either redo or, or shift some things around, because what we had originally thought in our head just really wasn't going to work. So we had to adjust accordingly on the fly. And that's okay, that's a part of the process.
Justin Rademacher
And just know that just because something goes wrong doesn't mean that it's going to derail the whole deal or anything like that, like you said, we were almost almost exact in terms of our budget, and what we wanted to sell it for. And that's okay, because that's part of obviously, that's just a part of the learning process. And that's just a part of going through the going through the cycle of doing this. And now we have that experience, you know, we've got got that under our belt. Now under onto another one, you know, the next one
Mike Swenson
for us, you know, our goal isn't going to be to flip 30 homes a year. But what I love about the human element of what we accomplished was the previous owner had lived in the property, they got older, the property kind of got on top of them, he couldn't get outside and do the stuff that he needed to or wanted to, for exterior maintenance, the interior started to kind of fall apart a little bit. And when we were talking with the neighbors on each side, they both reiterated how immaculate that place was for you know, probably 10 to 20 years ago. And then over the last 10 years, it kind of got on top of them and more and more dilapidated. And so you know, the the cool human piece out of it was number one, we made great friends with both neighbors on both sides, they were fantastic, people really nice, we had some really good conversations. And number two, now that property is back to a spot where it's livable, you know, the roof doesn't leak, which the roof had previously leaked quite a bit, which, you know, cause some issues will now you've got a new set of owners moving in there that have a property that works for them.
Mike Swenson
And so I think that's the human element of it's not just we do a flip, like flip just sounds so impersonal, I think renovation might be a better word for but but now you've got a property that you know, wasn't serving its purpose. You know, people would drive by you couldn't even see the front of the house, because there are so many trees and brush and, and bushes in front of it. And now you can see that, you know, it's it's new sighted new roof, a new families living there, that's going to be able to maintain it now, and it's not going to get on top of it. And that's the other cool experience and to be able to build some relationships with the neighbors along the way. There was a lot of cool other stuff that happened as well.
Justin Rademacher
Absolutely, very, very well said in terms of the human element. I mean, we're in the business of helping people, right, and we were able to help two families really, without one without one flip, renovation, whatever you want to call it.
Mike Swenson
So let's talk about your move then. Because I think this is the other cool thing about working with investors. You know, and once again, going back to the residential side, hey, I don't necessarily or I'm considering moving to a different location, my entire database is built on residential people in that area, that when I move, I don't have those relationships. I'm moving somewhere where I don't know anybody. Now you might move to a city, maybe you're moving back home or something like that, where you have some connections. But in your case, you're moving to a city where you didn't know anybody.
Mike Swenson
And because you're working with investors because these investors don't necessarily just invest in Minnesota, your business was able to just hop in your suitcase along with you and travel with you down to Florida and so you have the ability to where now you already have the same relationships the same people that you've done a lot of work and buildings of relationships now Hey, instead of an bested in Minnesota, let's invest in Florida. So why don't you talk about a little bit maybe about your move, and then kind of how you've been able to just plug back in as a result of having an investor focus business versus a residential focus business?
Justin Rademacher
Yeah, I mean, I still remember like it was yesterday, January 9. One of the reasons why when we wouldn't be down in Florida, no, no secret here, the weather, right? Negative 20 degrees outside and a negative 10 degree wind chill was when we were packing our car up and coming down. So that's when I knew we were making the right decision. But, you know, it's been a really fun process, you know, coming down here. And you're right. I mean, there's the two main things, right. So there's investors that I'm working with that are continuing to invest in Minnesota, which is nice, because that's the benefit of the team, right? I'm still licensed in Minnesota, I've got boots on the ground in Minnesota, if I need to have someone go check out a property go to a inspection for me or whatever, right. So it's one of those things where having having that back in Minnesota, I can just kind of keep going with the with the investors that only wanted to be in Minnesota.
Justin Rademacher
Now I have investors that want to be in Minnesota and want to be in Florida, right. And I planted a bug in their ear before I made the move, just to kind of gauge interest, right saying, Okay, I'm making this move. What do you think about the Florida market and just talking to them about some of the research I've done and prepping them, not, not everybody wants to be in Florida, not everybody wants to be in Minnesota. That's the great thing about for me being in both states, right? I can't physically be in Minnesota, but I have a team. And I grew up in Minnesota. So for me, I know that area really, really well. So I just need boots on the ground right? Here in Florida. I don't know that area as well. I've done a lot of research I'm doing getting in the truck and driving around and learning that the area. But the experience for Minnesota has helped me with my learning curve, my learning curve is just so much faster now, because of what we were doing.
Justin Rademacher
And the experience over the last year, were really the only thing I needed to learn down here. I shouldn't say the only thing but one of the one of the things that need to learn quicker than than later is just the areas, right? What are the good areas to invest in terms of what's going to yield the best returns and saturation and things like that. But really, it's like that to get to the second point. It's I'm not only taking the investors that I was working with now I have a new group of investors who maybe don't want to be in Minnesota, but they also vote but they do want to be in Florida for the short term rental aspects of things or whatever reason they have. So my my business is starting to expand. Because Because I'm down here, not to mention, the average price point right is a little bit nicer down in Fort Myers, Cape Coral Naples area. So that's just the benefits of you know, me being in both both areas, learning the market down here and already knowing the market back in Minnesota.
Mike Swenson
Yeah. You know, the the cool thing is, is, you know, because you had investors that wanted to focus on Florida, you know, right now, you just wrote a purchase agreement for was it about 800,000? Ish? Yeah, a purchase agreement for 850 for an investor that you already had a relationship with, before you move down to Florida, so you can turn that business on. Now. If you move to a city or a state that you don't know, yeah, you're, you're gonna develop relationships. But the cool thing is, is your first purchase agreement for 850,000 came from somebody you already knew, because you worked with investors. And so it's, it's somebody that knows you likes you and trusts you. And hey, let's write that purchase agreement within your first week of being licensed in Florida because you had that relationship. So you know that that is the beauty of working with investors.
Justin Rademacher
Yeah, and the other beauty of working with investors is because they they're a lot of these investors network with similar minded individuals, right. So when you when you take care of one investor and you do a really, really good job with that investor, just like the residential side, you're looking for a referral, right? They can introduce you to another investor. And that's happened, right. And so that's, you know, I got two random phone calls this week from and it was a referral from an agent I don't even know. They just know that we that we focus on the investments. They know that I moved down to Florida, from you know, watching Social Media what Ever, however, they got my information. But I got two random phone calls from two random investors who I'm still now I'm looking for properties for them. One's up in Massachusetts, and one's actually local here in Florida.
Justin Rademacher
And so that's just how the compound effect really on the investment side is really, really strong. Because you just you just never know. And these these investors, like I said earlier, they're not looking just for one property, it's 234 properties in a year. So okay, well, if I have 10 investors, and they all want four properties in a year, that's 40. Transactions, right? That's 40 investments, not to mention, am I am I working with them? You know, am I partnering with them on this deal? Right. So that's, that's where the things can, that's where things get really fun and interesting.
Mike Swenson
Our mindset around this is, we want to help you pick great properties that help you make money, because when you make more money, you have more money to invest in more properties with us. And so I think that's the responsibility that we take is, we don't just want to sell you a property, we want to sell you a great property or help you find a great property that's going to earn income for you. Because you'll you'll build the cash flow that you need to get another property or it appreciates to where you can refinance it, pull some of that cash out to pour into another property. And so I think that's where, you know, we will see more of a hockey stick growth, because these people are purchasing great properties that are helping them to make money, which leads to the ability to afford more property.
Mike Swenson
So that's how it's able to grow. So when we're talking about, you know, buying three, four or five properties a year for somebody, if you've never invested in real estate, maybe like how is that possible? Like how do you have that much money where you can just do that? Well, it starts with one. And so when you invest in that first property, you make money on cashflow, you make money on appreciation, you refinance out, you're able to put that money towards another property. So if you haven't invested yet at all, and you're buying your first property, well, your second property may not come for a year or two or three. And so that's okay, we're going to be patient with that.
Mike Swenson
But the people that are buying three, four or five years because they have other properties, they've gotten the cash flow, they've built the appreciation, they refinance out. And they're able to do that again and again and again. So I think that's where for somebody new, don't be spooked when we say we're helping you buy 345 A year, it starts with one. And that's how it grows.
Justin Rademacher
Absolutely. And the other thing, too, is as as agents, we're not salespeople, I think that's the biggest misconception is we're not selling somebody a particular property, what we're doing is we're, and I've used this line before, I know, I know, you are familiar with it, but we're really just giving them information so that they can make an informed decision, whether they choose to invest in that, I mean, because we've seen properties where we were like, this is a no brainer, and investors just don't want to touch it right? All we can do is give people the information so that they can make their informed decision. And based on that, this kind of move forward.
Justin Rademacher
That's where having the relationship, a really trusted relationship with these investors is key. And you know, when you were talking about, you know, it always starts with one, you know, if you don't know how to get started, we'll get started with one. Right? And if you don't know what that looks like, talk to us, we'll help you. Right. Maybe it's partnering or somebody on your first deal? Well, you know, what does that look like? Well, that's a great question. We can help you with that. So how do I get started? You know, I get I get asked quite often. Well, how do I get started investing in real estate? That's a great question. That's why we should talk.
Justin Rademacher
You know, it's for different people, it's, it can be very different, you know, if you have money to invest, you know, I've had conversations with people who have very little to start with, and I've had conversations with, they have a few $100,000 that they're looking to invest, right, everyone's at different point points in their investment journey. The point is, if you're looking to get to financial freedom, if you're looking to get passive income, you got to start somewhere. So what does that look like? That's why we that's, that's how we can help you out. We can we can help you no matter where you're at.
Mike Swenson
And I think that is the challenging thing is every situation is different. So we can't just come at you with a cookie cutter saying, Well, this is what you have to do. If you say, Mike, this is how much money I have right now. I really want to start investing. Okay, great. We'll work on that for you. We'll talk to some other people. We'll talk to some lenders, maybe there's hard money options, but the you know, we can we can find some way to get you going. And then once you get that first one, you get a little bit more money momentum, and that can lead to a second one. And that's how that grows.
Mike Swenson
So yeah, absolutely. You know, like you said it well and I think too, when we are working with investors, a lot of times They'll ask us like, Well, what do you think that we need to offer on this property. And we can give our opinion and tell you what we think. But what we also tell you is make the best offer that you can based on the numbers that you want to hit. And for some people, this property might be a list price offer for some people, it might be over list price for some people, Hey, for the numbers to work, how I want them to work, it's going to be under list price. And if you don't get the property, okay, we'll move on to the next one. And so I think that's the thing.
Mike Swenson
There's a an unemotional decision that happens there. Not necessarily completely unemotional, but a less emotional decision, because, hey, for me to hit the numbers that I want to hit on this property based on my Deal analysis, this is the price for me. And we can talk to two investors that are interested in the same property. And their offer might be drastically different from each other because they have different goals of what they want to hit. And for one, it might be a higher price, maybe that gets accepted. Well, for the person that offered less, we go to a different property, and we find them a fit. And so. So the nice thing is, is we're analyzing deals every day, if you don't get this one, we'll try to find your next one is as quickly as possible. For some people, it might take time I had an investor where I think we were working for six months to find a property and the property we got I thought was a great fit.
Mike Swenson
And it just took six months to get there. So you know, I think the best thing like you said, is, you know, that's why we should have a conversation if you're interested in any way. It doesn't have to be. Hey, Justin, I'm interested. Does that mean I have to write a purchase agreement tomorrow? No, it could be. I'm interested, I want to learn more. And maybe my first purchase agreement isn't six months from now or a year from now. But that's why we need to talk today. So we can lay out what that plan looks like for you based on your situation.
Justin Rademacher
Yeah, because there's so many options out there that people don't know about. And that's the thing is like, it's too much to get into now. But that's why we have to have a conversation is if you have literally no money right now to be able to invest, but you want to invest, right. So what does that look like? There are options for you. But what does that look like? And that's why we have to have a conversation. Because no matter what you where you're at, there are options there for you. It's just what is what does that option look like? It's going to be different than somebody that's further along in their journey for sure. And yet at the same time, the I don't have the money to invest. We don't want that to be a roadblock for somebody.
Justin Rademacher
So how do we get around that roadblock? And that's one of the the the evolutions of where we started to where we're at now, we have a lot of those answers for people, okay, you don't have money to invest, but you want to invest? Great. Here's what we can do. Or like you said, maybe it's 678 months, here's what needs to happen for you to be able to acquire your first property. If I told you three years from now, you were gonna have four or five properties. You know, what, how would that make you feel? Right? Oh, that'd be great. Okay, well, great. Well, it starts with one. So let's start there.
Justin Rademacher
First, let's not worry about the 3456. How do we get one? Well, I don't have any money. Okay, great. Well, how do we overcome that objection? Right? That's an objection, that's a roadblock. There's plenty of people in this industry that started with no money. And so what does that look like? That's really why we need to have a conversation.
Mike Swenson
That's what we talked about at the beginning of the year, is we said, this year, we want to leave the year where somebody wouldn't say, I don't have enough money to invest in this property if it's the right deal. And so we're committed to finding options for people and frankly, ourselves to have, we want to be able to, when we find a good deal, we jump on it, or the person who's investing with us can jump on it. We're committed to finding money and building relationships with those people that are able to do that and want to finance properties. Because yeah, we don't want that to be a roadblock, not an excuse to why you can't get started in investing.
Mike Swenson
So sometimes relationships take time, right? Like it might not be, I've never done investing before, please 100% finance my investment, like if you don't know that person, that may not happen right out of the gate, but you have to start that relationship. And so, you know, I think about the relationships that we've developed over the past year to now people know that we have your best interest in mind. And some of the vendors we're working with now the property managers, they've seen us put people in great properties, and the property managers have helped them well, that's opened up some additional doors in the future. So it does take a little bit of time and sometimes relationships take time to build and strengthen. But but you got to start somewhere.
Mike Swenson
So I think that's where, you know, we reach out Justin, if you have a question, reach out to Justin, if you want to start a conversation, and we'll do the best that we can to develop that. So why don't you just take a couple minutes and talk about the future? So we think about, you know, this this guy who was selling furniture, and wanted to get in real estate now, less than three years later, here we are, what is the future look like for you?
Justin Rademacher
Yeah, I mean, the future honestly, for me is wide open, I am looking to get my first initial investment property aside from a run of renovation slash flip, right? I'm looking to buy my own my first investment property. And that changed from from where, what I was originally looking forward to what I'm looking for now, right, because of the evolution of the team, I was looking originally, to do like a burst strategy and with, you know, things that are happening with the supply chain and things like that, I'm going to put that on hold and look for more of a long term rental. But I'm actively looking for something, I found some stuff that even in other spaces, I've seen where I'm like, That would be interesting for me, right.
Justin Rademacher
And that's the evolution of where we were, you know, more than, you know, a year and a half ago, we weren't there, we weren't even really necessarily talking about that. And our learning curve has been expedited so quickly, because of the relationships that we've built. And moving forward, I'm just really excited down here in Florida, there's so much opportunity down here for for real estate and investments, not only for other investors and for me to grow my business, but for me personally, right. And so, you know, down the road to what's really exciting is from a team perspective, and I don't want to put a recruiting plug in here, but I'm going to put a recruiting plug in here, we have so much value that we can provide to an existing agent who wants to maybe get out of the hamster wheel doing transaction after transaction after transaction. Right.
Justin Rademacher
You know, we've, in the last year, analyzed over 3000 properties submitted, you know, 340, I believe it was properties, top properties that hit a good cash on cash, you know, return, submitted those to investors and closed on, you know, 35 plus, or something like that, you know, in the first year, and that there's a level of expertise, there's a level of experience that, that people can just instantly tap into other agents. And so for the future from, from a team perspective, I'm really excited because we have, for the right agent, we have so many opportunities available for them to really just plug in and play.
Justin Rademacher
They just, there's going to be a little bit of a learning curve, if you're not familiar with the investment side of things, but that's what we're here for. And that's what I'm here for right here to be able to walk you through. Okay, how do I analyze a deal? How to, like, what numbers do I need? I don't even know where to get started. Because on the MLS, sometimes not all the informations on that. Right. So how do I get that information? Well, I don't know. That's a great question, Justin. Well, I can help you with that, right? Because I've done it myself. So from a team perspective, I'm really excited about being able to bring on you know, in the next month or two, one or two really, you know, Rockstar solid agents that want to move their business to the next level, but specifically have a passion for what we're talking about, which is building passive income through real estate, because it is possible.
Justin Rademacher
It's just tough to do if you're just so transactional, and from a personal, you know, perspective, moving on into the future, you know, becoming an investor myself, I'm active investor where I'm buying 3456 properties. Now that I've been previous to this information, I know how possible it is. I don't want to say that it's easy. I would say it's just simpler than what people think it is. Easy, there's still going to be some sacrifices that that probably needed to be made. And yet at the same time, it is a lot simpler. And so I'm excited about getting my first second, third, fourth 20th property, right, that it's literally the sky's the limit. And that's, that's what's exciting for me is the team, the team growth, what we can provide agents that are actively looking to get into, you know, some passive income investments, and maybe work themselves out of the agent role and just become become an active investor. Like how cool would that be like for me, like, that would be awesome, right?
Justin Rademacher
We've talked about that before, you know, retiring in Puerto Rico and still having money coming in every single month. You know, that's the dream. Well, is that possible? Well, people are doing it, so I know it's possible. So how do I how do I get in on that? Right? And that's where we're at in that Where we're going, we're not there yet. But that's where we're going. And that's what's exciting, is being able to share that journey with other people, and being able to be able, being able to help other people in that process.
Justin Rademacher
That is really, you know,you told me that from the from day one, Mike, which was, I want to provide opportunities for people. And that's exactly what we're doing. We're providing opportunities, not only for investors, but for other agents. And so that's, that's what's so exciting about the future is providing those opportunities for myself, or my family, or other agents or their family, for investors. Just the opportunities are endless. And that's what's so exciting about the future.
Mike Swenson
Well, and I think, too, you know, also just thinking about, you know, for a lot of people, when they think about an investment property, their mind probably is like a single family flip, or a burger or something like that, or maybe maybe a duplex, you know, and it's crazy, because now our minds have opened up to much more, we're we're looking at four plexes, eight plexes, you know, we've got one under contract. That was at 38 units. And we're looking at buildings that are 10 units, 15 units, 20 units. And so I know a lot of people could couldn't even fathom a four Plex, and now our mind has grown so much, because we've been exposed to some great opportunities, where a 12 Plex doesn't scare you mentally, you know, or for us to talk with an investor to work on a deal.
Mike Swenson
Like that doesn't scare us. And so that's how quickly things can change and continue to grow and grow and grow where the idea of 100 unit building is something that most investors wouldn't even think about. But when you start to understand the economies of scale, your mind can can grow a lot more quickly. Because you see those numbers and you think, gosh, if instead of like, you know, if I have a duplex, and one of those units is open, now I'm only getting 50% of my income, well, that unit is vacant? Well, if I had a 10 unit complex, and one of those units is vacant, I'm still getting 90% of my projected income. If I have 100 unit building, and one of those is vacant, now I'm still getting 99% of my income.
Mike Swenson
And so that's where you start to see those economies of scale. And your mind just thinks bigger than what you thought was possible before. So yeah, absolutely. We had a great conversation, a long conversation. But Justin, if people want to get a hold of you, or they want to find out more about either investing in real estate, as an investor, or maybe an opportunity, or getting into working with as an investor on the agent side, how can they get ahold of you?
Justin Rademacher
There's a few ways so you can find me on Facebook, you know, send me a direct message, just just around Miko, there's not too many of them. So you can do it that way. You can give me a phone call at 320-237-4353. That's my cell phone. I don't answer it. 24/7. But I'll answer what I can always just shoot me a text. Yeah, that's even better. And then you could also shoot me an email at Justin at elite advantage team.com. Any of those avenues would work just fine. And, you know, if you're even if you just have some curious questions that you want to ask, reach out, and I'd be more than happy to be able to help you out.
Mike Swenson
Cool. Well, thanks so much for coming on and sharing your journey from furniture sales to team leader to future investor, and how much our team has changed over the last couple of years. It's pretty amazing to see all that's happened. And it's really just being open to change and seen how evolution can happen. As you start to think bigger as you start to think more strategic new doors open up and so we are nowhere where we thought we would be we started the team and yet where we are is so much more cooler than where we thought it would be. So thanks so much for coming on and sharing your story.
