Mike Swenson: Real Estate Investing 101

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On REL Freedom podcasts, we've heard a lot from real estate investors. In addition, host Mike Swenson runs the Elite Advantage Team in the Minneapolis/St. Paul area, and works with a lot of real estate investors. In this episode, Mike is going to go through many of the key things to consider for those looking to invest, or those agents out there looking to branch out and work with investors. We cover setting investment goals, exit strategies, types of properties to consider, property locations, financing types, how to run the numbers, what numbers to look for, as well as other tips and key information to consider.

In this episode, hosted by Mike Swenson, we discussed:

• Mike has 40 episodes after the first launch of his podcast.
• Mike explained that if you are just getting started you must know what your goals are going to be and write them down.
• Mike’s tips are to think of appreciation, what type of equity that you are going to put in, type of property, and location.
• The next step in Mike’s tips is to run the numbers, engage insurance agents and think about finances.
• Mike explained how important in getting a property manager whenever you are investing, and you do not have any idea on what to do yet.
• Mike talked about the value-added opportunities and potential deals along the way.

Timestamps:

00:00 - Intro and overview of the previous podcasts and great investors.
01:54 - Mike shares the most important thing about real estate tips.
04:20 - He discussed the exit strategy.
04:58 - Mike explained about the cash flow or cash-out refi, location, and rental license.
09:53 - How important is investing to gain a fund.
20:51 - Mike explained about cash-on-cash return.
22:08 - He provided examples of value-add opportunities.
33:24 - Mike introduces his teams and their specialization in working with investors.

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Full transcript here:

Mike Swenson 

Welcome to the REL freedom podcast where we inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate. I'm your host, Mike Swenson, let's get some real freedom together.

Mike Swenson 

Welcome everybody to another episode of real freedom stories. And today, what we're going to do is we're going to give a little bit of a summary. So in our time running our podcast, we've had about 40 episodes now. And we've had a lot of great investors on specifically wanted to focus on the topic of investors today. So we've had investors like Van Sturgeon, who's invested in over 1500 units. We've had people like Eric Martel who's started a business, running turnkey investments. We've had large scale investors like Todd Dexheimer, somebody like Shawn DiMartile, who started out pursuing large investments right out of the beginning, where a lot of people might start with small single family homes and eventually work their way up. You know, people like Bryan Driscoll and Chad Keller, who have done the burst strategy for those that know what that is. And we've had a whole bunch of others, a lot of great programs, a lot of great tools.

Mike Swenson 

So one of the questions we get a lot is, how do I get started in investing? Or if I'm interested in investing, what do I really need to consider? So this episode is really kind of taking some of the best of the best from all those people that I named, all the people that I've interviewed that have had real estate investments that I haven't named, you know, and really helping you guys to have kind of a blueprint here for getting into an investing, or perhaps as an agent, if I'm wanting to work with investors, what does that look like? So this is a great summary episode of all those great tips and tools that we've gotten from all those episodes in the past. So I want to start out just a little bit and, and talk about investments with you guys. So real estate investment tips, the first thing that's most important is you want to start with your goals, right? So we always want to begin with the end in mind.

Mike Swenson 

Now, if you're just getting started, you don't necessarily know what your goals are going to be. So that's okay. It's okay. You don't feel like a lot, a lot of times people, you know, have this goal of 30 years from now, I'm going to have this many units or this much passive income, or a billion dollars or a trillion dollars. And you might feel like, well, I just want to get my first investment. I don't necessarily know if I want a billion dollars or a trillion dollars or 1000 units or anything like that. But write it down, you know, what is it that you're looking for here? Is it something that you're looking to fund for people like a medic ball, it was created passive income, so he could retire from his day job, and really have the freedom to choose what he wants to do.

Mike Swenson 

So it could be something as simple as that it could be something to be able to have enough passive income coming in where I can make my car payment every month. So starting with small goals like that, and they'll change over time. That's okay. A couple of things to think about, what type of cash flow am I looking for? Is it something where, you know, I just want to breakeven on cash flow? Because I know I'm going to get some tax advantages from from doing that? Or is it I want to have, you know, $250 per door, or is it you know, I want to buy a multi unit, and perhaps have $500, or $1,000 per door coming in as cash flow every month. The other thing to think about is appreciation. When you guys invest in different neighborhoods, obviously, there's different appreciation that goes with that.

Mike Swenson 

So take a look at some of the past trends, if I invest in this city or this neighborhood, what's happened over the last three 510 years in terms of appreciation, because you're going to get that back in where you can get that back as if you want to do some sort of, you know, refinance, and get your money back out. If you have appreciation that happens on your property, and you're able to get some of that money back out. Now you can go do something else with it. So something else to think about other goals you might have, what type of sweat equity Am I looking to put in here? Is it going to be I'm hiring out work to up the value of the property and, and gain more cash flow? And, or am I going to do all that work myself and put it into myself and house hack, which is also something that's really popular right now as well. And when you think about those things, also think about an exit strategy, right?

Mike Swenson 

You may want to buy and hold and hold that for a long time. Or you may think, hey, in five years, I might want to sell that property. So that's where the conversation of appreciation comes in. But also just thinking about the age of the property, the layout of the property, am I going to have a hard time trying to sell this in the future, you might get a good deal because nobody wants to buy that property? Well, then you might have a hard time on the back end actually selling that property. So think through that. Is this a property that I could see myself selling and what type of condition would it need to be in for me to be able to sell that as an exit strategy down the road. Also, like I said, mentioning about the cash flow. cashout refi you know, you want to think about those future values in those regards. So and then like I said, goals can change, plans change. So you don't have to feel like, you know, I have this 15 year plan well plotted out.

Mike Swenson 

The key is for most of this is just get started. So think about that. If you have a great plan, if you want to put together a great plan to begin great. If you're like, I just want to get my first property, think of through some of those things and then go get your first property. One other thing to consider is property type. So am I going to start with a single family home? Am I going to do something smaller like a duplex or a triplex or quad? You know, for a lot of people, maybe they don't go larger than that starting out. But like I mentioned, we had people like Sean D. Martel, who started out and went big, because they found a great mentor to help them so. So think through that there's an economies of scale, right? I have a four Plex, a lot of times they're laid out pretty clean, where each unit is the same, it's a it's a square, you've got the bottom two, or the bottom floor is laid out pretty much the same way as the top floor.

Mike Swenson 

So if I need to get new flooring, if I need to get new cabinets, or anything like that, I could just buy four. So there's an economies of scale there. That's helpful when you get into you know, probably the the four unit, duplexes depending on the the duplex, sometimes our limit laid out similarly triplexes, not quite as often. But think about those types of things. And then also that that dictates the neighborhood where you want to be, which is the next thing to consider. So what location do I want to be in? You know, they have a neighborhoods, B neighborhoods, C neighborhoods, everybody has a different level of comfortability, when they think about what type of neighborhood they want to invest in. So you might only want to invest in a neighborhood that you're comfortable living in, you know, if I wouldn't live there myself, I don't want to own a property like that. Or you You may think differently about it.

Mike Swenson 

So think through those things. What type of neighborhood do I want to be in and things can change, you know, block by block. So really hone in on that specific area that you want to target? Do you want to be the type of person that you own a property, or you're renting out a property in a neighborhood where there's a high ownership rate, some people like that, because they know that the property values are going to stay high, because most of the people in these neighborhoods own? Or do you want to appeal to a more renter, heavy neighborhood, because you know, there's always going to be a supply of renters that are looking in those areas, you know, if I'm going to be downtown, here in the Twin Cities, you know, Minneapolis or St. Paul or, or maybe some of those neighboring neighborhoods just on the edge of downtown, proximity is important to jobs and entertainment, and, and all those additional things that people want when they're a part of a larger city.

Mike Swenson 

So maybe you want to be close to the action, because you know, tenants are going to want to be close to the action. And that's where jobs are found is close to the action. So think through that. The other thing in regards to location, if you're somebody that's newer, some cities or counties have rental licenses, so you might want to look in, you know, if I purchase a property in this city, I'm going to have to get a rental license with that probably comes some additional costs, which we'll talk about in a little bit here. And then also some additional inspections. So you know, it can happen city by city. So look into that, you know, if I want to invest in St. Paul, here as an example, you're gonna have to have a rental license. And so so and things can change as well.

Mike Swenson 

Obviously, as you're as you're analyzing the finances, which we'll talk about later, you're going to want to know what type of downpayment Am I going to have to have, but then talk to a couple different lenders as well and find out what programs that they offer. In addition, you know, I like to believe that if you find find a great investment, you'll be able to find a way to help finance so there's people out there, hard money lenders, or other types of investors that might be willing to fund that for you where you may have to not put any money down. You know, I think a lot of times people use, I don't have the money as an excuse, I shouldn't say as excuses as a reason as to why, or a limiting belief as to why they can't invest in something. And I think that for the right investment, that money can show up. So look at building some of those relationships with people where you can find ways to tap into money.

Mike Swenson 

So know that you may buy a property right now, where a rental license is not required, and the city might decide next year, that now all properties do have to have a rental license. So you need to stay on top of what's happening with the legislation as well. So that covers location, the things that you want to think about. Next up, we have financing. So when you're thinking about financing, you've got a few options to think about here. Where am I coming up with my downpayment? Is that going to be from cash that I have? Is that going to be maybe I've got some some equity in my home that I could use as a home equity line of credit that I could put down, you're definitely one gonna want to have a great relationship with a lender who can help guide you in the right direction. There's lots of different programs out there, you know, if you buy a property and you tend to owner occupied that property, even if it's a, you know, like, like a duplex and you want to live in half of that at the beginning, you're not going to have to put as much money down. So those are things to think about.

Mike Swenson 

Now obviously, if you're borrowing more money from people you have to look at, there's an additional cost to that. So it's going to be harder to hit your numbers, but and that person is going to want to return. But if you're not the one putting up your money, you can scale faster through using other people's money. So that's where then the work has to go into finding a good property or finding a good investments that somebody else is going to want to invest in with all of their money and potentially none of your money. Another strategy that people use is the burb method. So basically, you, you go in and you buy a property and and you rehab it and fix it up and rent it out. And then you can refinance and get some of that money back out and move on to the next property. So when you're thinking about, you know, kind of going back to goals, if I invest in properties that I can fix up, put renters in and and then potentially do some sort of refi on that property and move on to the next one, I can build momentum and move on more quickly. So look at some of those things as well. So that kind of covers the financing piece of what you need to consider.

Mike Swenson 

Next step, what you're going to want to do is run the numbers. And you know, whether it's putting together a spreadsheet for those of people that may not be math minded, you're going to have to have to find some time to put together some type of spreadsheet to analyze things. And the nice thing is, is when you have a spreadsheet, you don't have to do all the calculations yourself, you can set it up in a way. Or if you reach out to me, I'd be happy to provide something to you just to give some basic analysis. So you know, what are the costs to consider if you've never owned a home before, and you maybe want to invest in a property as your first home, you know, you obviously you've got the downpayment to figure out. So whatever your financing, or whatever you're putting down, you don't have to finance but then when you do finance, there's there's a number associated with that, which is your mortgage payment.

Mike Swenson 

So you've got your mortgage payment, you've got your taxes, your insurance, which is going to be a part of that, that's kind of through the process, you're going to have to find a great insurance agent, that's going to give you quotes on your property. And so make sure you reach out and engage some insurance agents along the way. So you can kind of get a rough estimate of what those costs are going to be for insurance. And then the other thing to think about is utilities. So this is where each rental property is different. It depends on the city, it depends on the county a little bit in terms of what standard. So what you might find is there are rental properties where it's expected that the owner pays for things like the gas and the fuel the heat for the building, they might also pay for the water, the trash and those types of things. Or, depending on where the location is, it's not customary for the owner to pay for the gas and electric. And potentially even there's places where the water bill can split out.

Mike Swenson 

So that's something that's a little bit more city to city. So you're going to have to take a look at that if I'm looking at two properties side by side, and one of them the owner pays for all the utilities, well, then now that's additional risk that I'm taking on. So if I could have a single family home, that I rent out to somebody, and I just say, Hey, you know, because it's a single family home, here's what the rent is. And then you as the tenant are responsible for electric gas, water, trash and all that. Well, now my risk just went down big time. But if I have a large four Plex, and you know, let's say it's an older home, we happen to live in Minnesota, and it gets cold in the winter. And it's customary, or the way that the building is set up, they're not able to split out electric and gas, well then in the winter, if my tenants aren't paying for their own heat, guess what they're probably going to do and it's cold outside, they're going to crank up the heat.

Mike Swenson 

And, you know, if I don't have central air in that building, and I've got window air conditioners, they're going to crank up the AC in the summer. And so as the owner, if you're taking on that expense, just understand that risk, and you could have a large fluctuation in those energy bills throughout the year. So you want to be ideally, if I'm picking a property here, looking for properties where I probably don't have to pay for gas and electric, and I maybe don't have to pay for water, but that depends on the city. And so just know that as you're running those numbers, those things can change and that drastically affects your potential profitability and your cash flow situation. So take a close look at utilities. You can have utility split, if they're not currently split A lot of times with multifamily properties, if the listing agents doing a good job and this is an on market property, they'll give some estimates of what the utilities have cost in the past.

Mike Swenson 

This is something where I've seen all over the board. So, you know, similar sized home, or similar size property doesn't necessarily mean similar utilities. So you just have to really look into those numbers. And a lot of times the utilities, whether they're owner paid or tenant paid, and how much they are, can be the reason that a deal makes or breaks as far as whether you want to move forward with it or not. So So spend some time looking at the utilities, other costs to consider. So property manager, if it's something where you know, you you have a full time job, you've got something else that you're doing, you may not want to be the person that's the property manager, what's the property manager going to do, depending on who you choose, they'll they'll help you find a great tenant and put in there, they have some sort of screening process, some sort of background check process, you know, looking at their credit, now you can do that yourself if you want to.

Mike Swenson 

But if you haven't invested before, you may not necessarily know what to do. So great property manager can help with that. They can also be the go to person, if there's maintenance requests or repairs, things like that, they may do it themselves. Maybe they're a handyman, and there's stuff that they can do themselves, or they've got a great vendor list of people. So you know, if I get a call from a tenant saying, hey, the water heater went out, what do I do? Now you don't have to go Google water heater companies, installation companies, or go, you know, try to find a reputable company, you can just go to the property manager, they're like, Oh, we use so and so for all of our new water heaters that we need. So you're also outsourcing problems as well. And just the time that it takes to find those types of vendors. So a good property manager is going to have have that long vendor list for you where they can go take care of that stuff versus you. So that's what you get with the property managers is some of those utility though some of those tools as well, they can collect rents, they can handle a lot of the issues, where they don't come to you, everybody uses the example of you know, the toilet that won't flush at 2am.

Mike Swenson 

If you have a property manager, they help take care of that, not you. So think about that it comes with a cost, but at the same time, it comes with the benefit. So depending on your strategy, what you want to do, and depending on your job, or what else you have going on, that may help affect your decision. So another thing to factor in when you're looking at properties is a vacancy rate. So while we would like to believe that there's always a tenant in there at all times, that's not always going to be the case, there might be a tenant moves out. And because you know, depending on the day that they move out, and you didn't have enough time to find a new tenant, there might be a month that it sits. So factor in a vacancy rate over time where, you know, I've planned for that if you have a duplex or a triplex or a quarter, or even something larger, they just have a built in vacancy rate where you know, you know, it might be 5% of the time, it stays vacant.

Mike Swenson 

And so that helps you with your financial projections as well, because 5% can really make a big difference if that's $1,000 per month rent 5% is 50 bucks and overtime, 50 bucks a month is $600 a year. And so in Minnesota, where we live, we have a really low vacancy rate. There's other cities out there where you know, we're under 5%. There's other states out there where it's 10 15% or higher for vacancy rates. So as you're looking at different states in different cities, take a look at those vacancy rates as well, because you want to plan for the worst. And hopefully that doesn't happen. But you don't want to not plan in any sort of vacancy rate, and then not hit the numbers that you want to hit. The other thing to think about with buildings is maintenance, repairs and capital expenditures. A lot of the multifamily properties that are out there are older properties, you know, in Minneapolis, St. Paul, here, there's a lot of great duplexes and quads that were built in the 1900s.

Mike Swenson 

And you know, that's 121 years of repairs and fix ups that have happened over time, some people have done a better job taking care of those buildings, and some haven't. And so you need to take a look at that. Now, there are a lot of great properties that were built in 19 1900 that have held up well over time. And I still think they're very strong investments for people so so take a look at that the previous person as you go through a due diligence period, they can show you the past books, maybe from the last year or two to show what type of maintenance has happened. But you can't always trust the previous property owner to provide that information for you. So, you know, put in something, you could do something as simple as you know, 5% of maintenance 5% of capital expenditures. Now you've budgeted at a certain amount as you're analyzing your cash flow. So think through that. So those are kind of the the main things that you'll see on the expense side as you're running those.

Mike Swenson 

So you can just put a spreadsheet together, plug in those expenses that I mentioned. And then as you're analyzing properties, just plug in those numbers now. What am I looking for in terms of after I've plugged in all those numbers? You know, first thing to look at is cashflow Are you going to be bringing in more money than you're spending every month, and in depending on your goals, probably want to have that if you're if you're just looking for cash flow to be even, and you're looking at the tax write offs, okay, that's, that's an option, but maybe have a goal for you know, it might be $150, a door, it might be $250, a door, you know, something along those lines, or even higher, we've seen it higher for a cash flow each month. So look at the cash flow number. We talked about appreciation, right, so we're analyzing those neighborhoods, if one neighborhood is appreciating at 5%, and other ones appreciating at 10%. And if I hold that property for five years, that makes a big difference, in other terms that people use as a cap rate.

Mike Swenson 

And the other one is cash on cash return. So cash on cash returns a great number to look at, because you're looking at how much money am I putting into the deal, whether it's a down payment, whether it's money that I factored in for repairs, and what's going to be my return on that money. And so a lot of times people look at, you know, maybe 8%, cash on cash return is good, a lot of people say 10%, or higher is what they want back on the cash on cash return. So we can go in more detail on that in the future, but just know that that's a number that a lot of investors look at, to be able to determine, you know, the viability of an investment. Other things to consider. So, you know, when I kind of go back to the type of property, the location, other things to consider is what do I want that property to become. So a lot of people look at value add opportunities. So you know, if I'm gonna put money just like people like to flip homes, or they like to, you know, fix up homes, you got to look for some value add opportunities, and there's investors out there where if I can't add any tangible value, I don't want a part of that building.

Mike Swenson 

There's people that's that's turnkey, right turnkey, is I don't want to, I really just want an investment where I can, I can take it over and collect my money and not have to do a lot of work to it. Other people look at more of the value add opportunity. So what are value add examples, an unfinished basement, the potential to turn three bedroom unit into a four bedroom unit, or add another bathroom, add some additional square footage, if I have an unfinished attic area, yes, there's going to be a cost to that. But I can charge additional rents in the future. And I don't need to necessarily have to do it right away. But I can charge additional rents, maybe it's a project I want to take on two or three years from now, once I get some tenants in, I get some cash flow going, maybe I take on one of those additional projects, maybe it's you know, adding a patio in the back, it would appeal to potential renters, if I've got a nice patio in the back with a fire pit. Or if I've got a building that or a property that doesn't have a garage, and now I've got a garage, I've got a chance to especially Minnesota to park my car, in a garage in the winter versus having to scrape the snow off.

Mike Swenson 

So those are some some value add opportunities that people look for other value adds, you know, it's just simple improvements, it could be, you know, turning a property where right now the average rent is 12 $100. But if I put in a certain amount of money, improve the bathroom, improve the kitchen, improve the bedrooms, things like that. Now I can charge 16 $100. You know, and if you're looking at some of those higher end areas, there are people that are willing to pay that higher rent, you know, for more of the the luxury or the higher end properties. So if you can find a property that you can add value to and increase those rents, that that means more returns for you. So look for those value add opportunities, you're also looking for under market rents, it could be when they they state what the rents are, if you do a little bit of research, and how do I do research? Well, you can look at Craigslist very simply and see, you know, what's what's for rent in certain areas. You can go to a lot of the rental websites and you plug in how many baths how many bedrooms and what areas you're looking in, and you can see what's available.

Mike Swenson 

That's going to give you a good general sense of you know, is it a 12 $100 per unit property? Or is it a 15 $100 per unit property? Or is it an $800 per unit property? So do a little bit of research on these areas. And you'll get a sense for what they are. But what you'll find is if you do research enough, and if you analyze enough deals, you'll you'll quickly recognize what some under market rents are notoriously people that have placed tenants for a long time in a property typically have under market rents because they don't want to go through the headache or go through the work of finding a new tenant. So what do they do, they just keep the rents lower, and instead of increasing it by 10% per year. Maybe they only increase it by five or less. And so if you have a tenant that's been in a property for five, eight years, over time, you'll see that they're charging way under market rents. So there might be an opportunity there where just in coming in and buying that property, there might be the ability to to increase the rent.

Mike Swenson 

Now, what I will say is, at least in the state of Minnesota, the lease stays with the property. So if I buy a property, and those tenants are already in place, the lease is already there, I have to honor the lease sets in place. So I can't just come in and say, Well, I'm the new owner. Now you got to go No, the the leases with the property, I will give the disclaimer though. Talk to your attorney, and find good counsel, I'm not an attorney. I'm not a financial adviser. So I'm just sharing some opinions with you. These aren't material facts. So So obviously, consult your own professionals on that, so. So think about finding those places where there's under market rents. You know, we also call them, you know, tired landlords, where maybe they're just having a hard time, they don't have enough money to keep up with the property.

Mike Swenson 

And so you could potentially find some some deals that way. So yeah, so you're looking for opportunities, where can I increase rents? Where can I add value? And it could be that right now, the numbers don't look great. But if I project out pro forma 235 years, what those numbers could be, maybe it looks a lot more appealing, three years or five years from now, because of the property that I've looked at. Other things to think about, if I've invested in maybe I've invested in other states, or maybe I've lived in another state and bought a home, and now I'm moving to a different state, what are some of the things that are different state by state? What is the typical due diligence period or an inspection period? Different states operate differently on that? So is it a quick turnaround? Is it a long turnaround? You know, you might want to ask some questions from an experienced agent, like myself what that might be, you also want to ask what types of inspections happen on a property? You know, is termites, something that's customary?

Mike Swenson 

Well, in Minnesota, not as much, you know, radon, is that something that's customary? where I'm at? You know, depending on the city, depending on the age of the property, well septic and set inspections, sewer pipe, inspections, lots of different things that potentially are out there earnest money, what happens with that? What's, what's the customary percentage of earnest money that I have to put down? When I put an offer on a property? Is it customary in the state that I'm in that that I get that earnest money back? If I backed out? Or do I have to forfeit that? So those are other things to ask. And we've worked with investors from multiple states. And so those are the types of questions that they ask us, you know, what is it like you're buying a Minnesota, other tips, things for you to think about? So So now, as I'm an agent, and I'm working with investors, is this investor brand new, if they're new, I'm gonna have to spend a lot more time educating them on the process, educating them on the analysis, educating them on the long term benefits of being an investor.

Mike Swenson 

But once I've taken that time, that education window is less than less, the next time they buy a property, now they know what they need to do, or the next time they properly find a property, if you find somebody that's buying, you know, three to five properties a year, now you don't have to educate them in the same way that you would a first time homebuyer. So that's where, you know, working with investors could be an advantage for you. It's less emotional, right? investors care more about the bottom line, they care about the numbers, and can I hit the numbers with this property? Or not? And so it's not, you know, well, I can, I can picture myself, you know, in this house with my my family running through the yard, and it's, it's really close to this shop that I really like, that type of stuff doesn't happen with investors, it's it's pretty cut and dry, it's a lot less emotional. And they just make those decisions.

Mike Swenson 

Sometimes investors will write offers on properties sight unseen, if you've got a good property and a good area, and you've got good photos. Sometimes they just write an offer, because they know I'm going to hold it long term. And I don't necessarily need to walk through in the same way I would if it's my own personal residence. So you do find some ease with that. How do I find properties? You know, that's the million dollar question that people have, obviously, working with a great agent, an experienced agent, somebody that seasoned and working with investors can be a big benefit in the state of Minnesota here. Typically, if it's an on market property, the listing agent has the the buyer broker commission that's paid out. So when you work with me, on the buy side, most of the time that commission gets taken care of by the listing agents.

Mike Swenson 

So you don't have to pay anything out of pocket for working with a buyer's agent on that. You also can tap into off market networks, there's places out there where if you build relationships with great people, you might hear of different opportunities, whether it's friends or family or other agents or things like that. You might have wholesalers out there that find properties that potentially could be could be a good fit for you and and other other landlords and agents that are out there. So you're going to have to take some put in some work to find some great opportunities out there, but but it will be worth it. And so that's where networking can go a long way. And you know, when you're working with an agent that's already built up, some of those networks may it can certainly be easier.

Mike Swenson 

You know, when when you're buying stuff on market, you know, that's found on the MLS, the positive is informations pretty easy to come by the negative is informations pretty easy to come by, which means anybody that's looking in that area has access to the same information as you. But if you find a property off market, there may not be a bidding war, it may not be as competitive as other properties. Because you've, you've found a property that not everybody else knows about. Now, what are those off market opportunities? It could be, you know, a lot of times it's somebody that's maybe inherited a property, or maybe you know, due to an unforeseen circumstance, they just need to get rid of that property. And so we've talked about this with other investors on on the podcast, where you're solving a problem for them.

Mike Swenson 

A lot of times people think, well, if I, you know, buy an off market property, or if I buy it below market value, I'm somehow taking advantage of them, you're not, because what you're doing is you're you're solving the problem, they might need cash right away. You know, it could be that, let's just say, you know, somebody passed away. And now the person that is responsible for that property has to continue to make the mortgage payments. Well, they don't want to have to make mortgage payments month after month, they want to sell that property and liquidate it so that they can they can cash that out. I mean, it could be due to health circumstances, nobody, you know, you can't live in the property anymore, because you can't walk up and down the stairs, because you know, something happened with my knee, and I can't walk up and down the stairs. So now I don't want this property that has all these stairs.

Mike Swenson 

So as an investor, if you're if you're buying something off market, you are helping to solve a problem and, and what they usually want is certainty and speed. So can I close this property, and can I close this property quickly is what they're looking for. versus if I put it on the MLS, you know, now it's on there for a while, then it's 30 to 45 or 60 day close, or might be a contingent offer on something else, I could close in as little as seven days cash with an investor. So that's where some of those off market opportunities can make sense for you. So those are some additional tips. What I will say with everybody that I've talked to investors over the course of my my career here as a as a podcaster is, you know, at some point, you're just going to have to jump in, there's a risk there, and there's a reward. And you can't get to the reward unless you overcome that risk. So you're going to have to dip your toe in the water, you're going to have to make the leap.

Mike Swenson 

And what you're going to learn is education, right? If I go to college, and I learn how to be a therapist, as my wife did, it cost her money in school to learn how to be a therapist, if I want to be a real estate investor. expect that, yeah, there's there's a cost to that maybe I'm not going to net as much as I thought because something that was unforeseen came up. And instead of flipping a property for $30,000, maybe it was $20,000. But I just had a $10,000 education. So for the next property, I'm going to do better. And I'm going to know the right questions to ask and I'm going to know where to jump in. So So think about those learning opportunities, you're not going to have those opportunities unless you get in. So think about those as educational expenses for you. Because the the benefit at the end far outweighs not dipping your toe in the water. So figure it out. If you have any questions, I'm here to be a great resource for you.

Mike Swenson 

You know, my team specializes in working with investors, specifically here in Minnesota, we work in the Minneapolis St. Paul Twin Cities area, we've also worked in St. Cloud and Rochester and, and some of the other larger cities out there. But happy to connect you with other agents in other states and with other investors that have a wealth of experienced lenders, property managers, you know, we have great connections that we've made with people over time, so, so always feel free to reach out to us. And if you have any questions, you can always email me, [email protected], that's [email protected] if you have questions, and I can point you to a great person, but you know, investing is such an exciting option for you. And such an exciting investment. And I want to see you guys have success.

Mike Swenson 

So in the time that we've been working with people, the time that we've been interviewing people on the podcast, these are the best tips, this is the best information that we have for you to get started in your investing career. And if you're an agent like me, and you're looking to, to work with investors, these are the types of things that you're going to want to help them through. And like I said, the final disclaimer here, I'm not an attorney. I'm not an investment advisor. And so, you know, I'm giving you examples here, but do your own research take responsibility for your own choices and decisions here. But hopefully this information was helpful for you. So that is my 40-ish episode recap here on investments, covering a lot of the questions that people had about investments. Because of the great resources that we've had with the other episodes. I've been able to host with some of these Great investors out there. So hope you found that helpful. Go get some real freedom.