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In today’s unpredictable economic environment, there’s never been a better time to diversify into multiple streams of income. Because we don’t know what’s ahead, it’s important to be nimble enough to adjust your strategies along with the market. The great thing about real estate is that it changes direction at a much slower pace than the stock market, so you have more time to adjust.

My friend Blair Halver has seen a ton of success in real estate, and he shares where else he’s been investing to diversify his portfolio. When it comes to housing, he’s a big fan of subject-tos and does a lot of creative financing deals. Outside of real estate, the first additional source of income Blair got into was drop shipping. He’s also getting into crypto, and a strategy known as “yield farming” where you invest in a vehicle that kicks out high APIs. When you’re just getting started in real estate, it’s important to pour all your focus into making it work before moving on to the next shiny object. Once you get your business to a place that you’re happy with, it’s time to start thinking about building something else that can bring in more money.

Watch and Learn:




Listen and learn:

What’s inside:

  • Blair’s diversification strategy and the areas he invests in.
  • Why it’s important to stay focused on one business before moving on to diversification.
  • Blair’s successes with crypto and why he thinks it’s a smart investment.

Mentioned in this episode:

Transcription:

Download episode transcript in PDF format here…

Joe:   Welcome. This is the Real Estate Investing Mastery podcast. Hey, what's going on, guys? Joe McCall, Real Estate Investing Mastery podcast on this episode, we're going to be talking about diversifying into multiple streams of income. You know, it's a popular phrase you've probably heard it before. It's been around for a long, long time, but it is a really, really important, especially in this kind of economy. We don't know what's coming ahead. It's important to be agile, agile and nimble and be able to adjust your strategies and do different things when the market shifts and adjusts. And we all know, excuse me. We all know that it's going to because markets do that kind of thing, right? The cool thing about housing and real estate is it's not like the stock market that where it just drops on a dime and immediately shifts direction, it's a lot slower process. And so what we're going to be talking about on this podcast episode here is how you can be better prepared to start making the changes now that you need to in your business to start looking at multiple streams of income. Different ways you can make money doing deals with real estate. I got a good friend on the podcast today, his name is Blair Halver, and we're going to be talking about that with him first. This podcast is brought to you by my book REI Secrets. If you want to get this book for free, just pay shipping and handling. Go to REI Secrets dot com. This is a book I wrote called Daily Nuggets of Real Estate Investing Wisdom to help you get more leads and close more deals. And again, you can get it for free. Just go to REI Secrets dot com if you want a free PDF of the book, I'm looking for reviews. If you go from your phone, go to Review Joe Dot Net and leave me a video review from your phone. Then I will give you a PDF of this excellent book for free. I had a good friend. Call this the the tools of Titans by Tim Ferriss that the tools of titans for real estate investors. So, yeah, whatever. Why don't you go find out for yourself if this is real or not? It is a good book. I wrote it in short chapters. Each chapter is only one or two pages long, so you can kind of read it like a devotional every morning to help you get some inspiration to help you just activate things in your brain, to think about things differently, to look at things differently and understand what is really most important in your business. All right. So go to review Joe dot net that if you want that, book a PDF for free. No tricks. Not that I'm going to sell you after that or go if you want the PDF, the real book Just pay shipping and handling. Go to REI Secrets dot com. All right, is that enough of that? Let's bring Blair Halver on Blair. How are you, man?

Blair:   Doing great, man. Glad to be here. Thanks for having me on, Joe. Thanks a lot.

Joe:   Had you on a couple of years ago, we were talking about lease options and creative financing back then. I'm assuming you're still doing a lot of that, right?

Blair:   Yes. Still doing a lot of that. Yeah, I haven't been buying as many houses lately, but turning the houses that we do have into more cash, we're doing a big cash out refi on a bunch of them. Nice. We're selling off a couple to the tenants. You know, you always think the lease option tenant buyers are, they'll probably never buy well. Now they're buying, you know, they're going to get the loan, you know, whereas we might we might normally expect maybe 20 percent of them to come through. Now it's like 30, 40, 50 percent of them, 30 40.

Joe:   Why do you think that is?

Blair:   You know, it's like probably a multiple factors of easy financing or lower interest rates makes the payment easier for them to qualify for. Number one number two, real estate is kind of like this fever pitch right now, and I don't know if you agree, but it feels like five or six or seven. You know what I mean when everybody and their brother wants to buy a house, right? So that's probably those two biggest factors.

Joe:   All right. So what are you seeing right now going on in the market? We haven't just talked about it, but what are you seeing is things going on in terms of some strategies that are working better today that maybe didn't work as well a few years ago or. Well, let's answer that first. What are some of the strategies that you're seeing today working well?

Blair:   Yeah. You know, I'm still a big fan of my number one deals strategy is by sub two. If there's some equity, will give them a carry bag, no payments, no interest, no balloon and then sell them on a lease option. However, these days, what we're ended up doing is if we get a deal under contract sub two or whatever, we'll end up selling that out to our buyers list and make a quick 10 to 15 K Olin assignment fee, that sort of thing. Instead of taking it down ourselves,

Joe:   Talking about it to somebody doesn't know what is a sub to?

Blair:   Sub to is when you buy a property subject to a seller's existing debt, so you're basically taking ownership of the property, acknowledging that there's a mortgage on it and you're agreeing to take responsibility for that mortgage. Yeah.

Joe:   So you're taking over the mortgage instead of getting a new mortgage, you're taking over their existing mortgage. The deed stays in their name. Correct.

Blair:   Actually, we haven't signed the deed over to us.

Joe:   Yeah, that's right. The mortgage stays in their name, mortgage stays when he gets transferred over to you. So you basically take responsibility for the house. Does the owner? Do you let them stay in the home now?

Blair:   No.

Joe:   All right. Good answer.

Blair:   And even, yeah, even if we had like, you know, hold back or anything, it's like, it's just too risky. Yeah.

Joe:   All right. So then you're just saying you would sell it to one of your buyers, would that who is that a buyer? Who buyer? Is that not an investor, buyer, an owner, occupant, buyer? Who do you sell it? Contract, you're selling the contract, right?

Blair:   Yeah, when we do that sort of exit, we're selling it to another investor who wants to buy that deal from us and then take it down themselves and put it out on a lease option or stick it into the rental rental portfolio, whatever they want to do with it.

Joe:   OK. And then is there so there's enough, but there's not much equity in there, right? Is there is your cash flow,

Blair:   there's cash flow. Yeah. And you know, each deal varies, but we try to put the ones out to our list where they've got a decent amount of cash flow, maybe two or three hundred bucks a month. Net cash flow at least. And then maybe 20 K minimum equity and something like that.

Joe:   And 20 K would be what percentage about?

Blair:   These days? We're not getting huge discounts, maybe five, 10 percent. Wow. So but we'll take him over because we've got that built in financing. You know, we don't we don't have to go to a bank and come out of pocket. We're buying them no money down.

Joe:   Are you nervous? Because I used to do a lot of that. Blair and I did a lot of that back in that time. We were just talking about between 06, 07 08. I bought a lot of houses subject to with very little equity in it. When the market collapsed and all of a sudden they had a bunch of properties, well, I didn't. I wasn't on the mortgage, but I was on the deed of properties that were upside down and that little bit of cash flow that I had was disappearing with vacancies, right?

Blair:   Yeah. Yeah. So and that's one of the reasons we're not taking them down ourselves as much anymore unless the numbers are just really good. But, you know, to somebody else, to another investor, these are smoking hot deals.

Joe:   Why is that? Why is it a smoking hot deal to them? There's not much equity. There's not much cash flow. What's going on?

Blair:   Because they can they, you know, we're talking about the investor who maybe they are, have their own profession or their job or whatever. And they've been looking at, for example, turnkey rentals, but they don't want to come out of pocket 20 percent on a down payment. And so then they come watch our webinar. We're talking about no money down deals. They just think it's like the coolest thing since sliced bread, right? So they're walking into the shoes of a seller who and then they can take over the house and start getting some cash flow on it. And you know, these people are not necessarily guys who, you know, we're not like taking food off their plate, we're not taking their grocery money. This is people with discretionary investment income, right? Heard or saw an article recently talking about how, you know, a month or two ago everybody ran out of crypto or and all these other high risk assets. So it leads me to believe that a lot of investors, a lot of money out there is looking for more and more places to put their money in. So they're looking at higher and higher risk assets, such as a sub two house with maybe only five or 10 percent equity and two or three in a bucket of cash flow.

Joe:   I got to tell you, makes me nervous. Some of these deals that I see people buying in some people saying it doesn't matter how much equity it has, doesn't even matter if it has much cash flow. You're buying this property that at least pays for itself. Worst case, as you hold it, you got that you lock in that low interest rate and you pay that loan down. So I just I would say this to be to people who are thinking about this. Maybe you can add to this as well. Like what? You've got to be careful. And this this isn't going to work for somebody that is looking to quit their job from that cash flow from these houses, right? Like if this got a couple of hundred dollars in cash flow, that isn't money you should even be spending. Every single dollar of that should be going into savings because when that house gets vacant, you're going to have a thousand two thousand dollar mortgage payment that you're going to have to make right. And that right there is at least five, six 10 months of cash flow that disappears poof in one month a vacancy. Sometimes you might have to. That's another two to four grand that you're going to have to cover in that seller's mortgage payment. I'm just saying from experience, trust me on this, I got severely burned. I had about a dozen subject tos when the market crashed. I never missed a seller's mortgage payment, but there were a lot of day twenty nine hour, twenty three minute, fifty nine when I was robbing Peter to pay Paul to make their mortgage payment at the last second so that the seller would not get a 30 day lead on their credit. Yeah, and I was doing stupid things too. Like I was borrowing private money, so I had too much debt. So do people just kind of be so, so careful with this? And this is one of the reasons why I got in trouble. If I would have held onto those properties, I would have been fine. But I had zero reserves. I had zero margin for error. I didn't have savings to cover for the vacancies when they happened, right? I did not have the money set aside to cover these vacancies. And so what happened was it was a downward spiral. I would take the next person, the next tenant, the next tenant buyer that could fog a mirror. I didn't care. They could put down three grand. I could make the next month's mortgage payment. Man, that's all I cared about. So I just kept on getting worse and worse. Tenants worse than that caused more damage, more vacancies. So anyway, man, be careful, guys, do that with you.

Blair:   Yeah, I'm with you and a couple of points. You know, first of all, it was like you said you're going to take the next tenant buyer who could fog a mirror. But I was thinking, you know, if you go in and if you've got a cushion of reserve and you can find my tenant, who's going to give you 10, 12, fifteen thousand dollars down if you want to be extra conservative with it, keep that in your reserve. Like that's your reserve now, right? Cover all the potential issues. But yeah, for sure. Buying and holding real estate is a lot more fun when you've got cash reserves.

Joe:   It's a long term play, though that's the point. This is not a quit your job strategy. This is a long term investment that you have to think that way. Yeah, yeah, I agree. Now you can maybe get some good cash flow if you turn it into an Airbnb. If you can turn it into a long term rental where you get higher cash flow, right, but then you get a figure still. Even with Airbnb, you're looking at 20 percent fees when it's all said and done at the end of the day and you're paying the property manager when you're paying for all of the extra stuff that you've got to put into that thing. You're looking at 20 percent that you have to calculate and figure for long term Airbnb's short term rentals. Yeah. All right. So Blair, you're diversifying. So what does that mean to you? Are you just doing? Are you diversifying how you're acquiring the deals or are you diversifying how you're selling them? What do you mean by that?

Blair:   I'm actually diversifying my income outside of just real estate. So we talk about cash reserves and really what we're in my opinion, what we're talking about is being able to sleep well at night. Yeah, right. Cash reserves is like step one. At least this is how I did it. Soyou get your real estate business going, you build up your cash reserves. Now you're sleeping a little better at night and then you start diversifying into multiple streams of income, not just within real estate, but maybe it's something else affiliate marketing and crypto drop shipping, whatever that sort of thing. And now if you've got two or three or four income sources, now you got three or four legs that your stool is sitting on, right? And so if real estate takes a dove, you still got these other two or three. See what I mean? Nice.

Joe:   All right. So can you be a little bit more specific on for you? What are those two or three other legs that you're standing on?

Blair:   Yeah, the thethe first one I got into outside of real estate and real estate coaching was this whole drop shipping thing. I don't know if you've looked into that now is a little bit off topic, but you basically like, you know, you partner with these companies and they set up an Amazon store or Walmart.com store, and then they list items for sale and then the order comes in and then they go, order it from another website and shipped to the customer. And so it's kind of like a retail arbitrage thing, but you know, there's some ups and downs with that. But you know, in a low months, I might take home maybe four or five grand and a good month, maybe seventeen, eighteen thousand dollars. It's phenomenal. Yeah, yeah. Yeah. And the other these companies, they do all the work. You're just providing the the credit line for them to use to go order the product and that sort of thing. So, you know, everything's got its risks. Like last month, our Walmart store got shut down or got suspended, and so we had to appeal that. And so we were down and they were holding all our money for a month. And then I got a float that cash, you know?

Joe:   You signed up with a company that was selling this course taught you how to do this. You sign up for their program and they basically are using your credit worthiness, your credit to buy the the stuff that they can sell. Is that right?

Blair:   Yeah, it's actually not even a course. It's like you partner with these guys. And I don't know if you've seen these ads out there done for you, drop shipping store, you know, that sort of thing.

Joe:   So there's a famous real estate guy who kind of went into start into doing that. We won't mention his name. OK, but it was it him or somebody else.

Blair:   I bought one through another real estate guy. It was a referral through him.

Joe:   Not that real estate guy, another real estate guy.

Blair:   I'm not sure which guy you're talking about, but if it's the same guy, then yeah.

Joe:   He was on Instagram a lot. Yeah, very flashy. All right.

Blair:   Yes, yes. Yeah. But it's been a good experience.

Joe:   All right. Well, that's good to hear. Nice. Yeah. All right. And a low month you're making, what did you say, four to five grand?

Blair:   Yeah. For four thousand bucks, maybe. And they do all the work now. The thethe upside is, you know, I don't have to do anything. The downside is I can't do anything. I have no clue what they're doing, you know? So like I said, there's pros and cons. There's risks, there's upside. It's all that cool. What else are you doing then after that? Lately, I've been getting into a lot of the crypto stuff. I know the I'm not so much on the NFTs. I know that's like the big craze right now or has been for the past six to eight months or whatever, but that's what got me started in it. I saw one of my Facebook friends last summer, he posted, Hey, just go buy one of these NFTs are coming out. It was like six hundred bucks, thousand bucks or something like this. I was like, All right, I got to learn this stuff sometime. Otherwise, I'm just going to be the old old guy who doesn't know what's going on anymore. And you know, the best way to learn is to go put your money on the line right? And like, actually, go do it right. So I bought one of those NFTs. I wish I had bought 10 of them because three months later, I sold it for about 10 times what I paid for it. Wow. So that's what got me hooked, like I said, though, I don't do the NFT stuff anymore, there's a there's probably a million different ways you can make money in crypto. The thing that I've found and gravitated towards is more colloquially known as yield farming, if you're familiar with that.

Joe:   No,explain that just as simply as you can please.

Blair:   You basically put your money into this thing that kicks out like insanely high APIs so that your annual percentage yield API, IPR. So like, you know, anywhere from 50 to 250 percent API, right or more.

Joe:   So you're putting your money in and people are borrowing against that and paying you back a percentage.

Blair:   That's one way to do it. Another way is you put your money in and they use that liquidity to offer exchanges on decentralized exchanges. It can get very technical and want to keep it like high level, easy to understand.

Joe:   But I'm looking at bitcoin right now and we're recording this. It's up six and a half percent. There you go. Week. Yeah. A lot of that has to do with Russia and Ukraine. What's going on there right now? Isn't that true? Now, I don't want to get political here. Obviously, it's pretty tragic what's going down in the Ukraine right now. But the people who run the crypto stuff, they've been under pressure to block Russia from trading or buying or selling any bitcoins, any cryptocurrencies. And from what I understand, they've said no. Whoever manages that? Right. But I mean, so a lot of Russians and people who are now concerned about what happens if all of a sudden the European Union does decides they don't like us anymore and they want to shut down our economy, what are we going to do? And so a lot of money is going back into crypto. Am I right? Am I reading this right right now?

Blair:   I think so, yeah.

Joe:   And it's just shooting back up again. It's very volatile. Are you have you been spending a lot of time trying to figure it out and study it and all of that?

Blair:   Or, you know, I mean, I spent the first six, seven eight months like kind of exploring all the different avenues in it and found one that really kind of caters to my preferences as an investor. You know, we want to invest for cash flow and then possible appreciation over time. So if you're Kiyosaki fan, you invest for cash flow and appreciation is gravy. So that's the way I try to approach every investment, including crypto. So the last thing I want to do is go buy a coin and hope it goes up bitcoin, Etherium, whatever. Or, you know, any of these thousands of altcoins. That's what most people understand about making money in crypto. This is like trading or buying and hoping it goes up. That's not what I want to do, right? Because that's just gambling. In my opinion, I would rather find something that's going to earn a pass of yield, so I get cash flow off of that thing. So whether the value of it goes up and down doesn't matter to me as long as I never have to sell that underlying asset and I'm still getting the cash flow just like a rental house right now, I don't care so much if the value drops 10 percent next month and then comes up 20 percent the next month. Not that it does that fast, but as long as we're getting enough cash flow out of that, you know, it's I want to hold it, OK?

Joe:   And how has that been going for you? The last was six months or whatever that you've been doing it.

Blair:   Yeah, it's actually going really well. So I started a yield farming thing in November, and I set a goal that OK, by end of January, I want to have yielded or received enough cash flow to pay for a new kitchen remodel. And right at the end of January, after all my calculations had come out, they came out just right. I pulled all that profit off the table. Now we're remodeling our kitchen. My wife's happy.

Joe:   Yeah. All right. Anything else you're looking at or playing with?

Blair:   You know, just as you and you and I, as marketers, you know, we get like to get creative, I think, with the whole marketing aspect. So I dabbled in affiliate marketing and all that sort of thing. But it hasn't made a whole lot of money for me, and I find that even if I was super successful, then it is just another job, whereas these other things are a bit more passive.

Joe:   Now when you say affiliate marketing, can you be a little more specific? What?

Blair:   Yeah. Like, big, big, like mass market stuff like refi leads. I can go generate a refinance lead and sell that lead for 60 bucks like in an instant, and they'll take as many as I can generate. You know what I mean? So you have to get creative, though, because it's an extra competitive industry or competitive vertical.

Joe:   OK. Yeah. Of all the things that you do, you know you're doing deals. You're coaching in the real estate space very successfully. By the way, you're doing crypto, you're doing drop shipping. Yeah, there's a three or four things, right? Which one's your favorite?

Blair:   My favorite right now is the crypto thing. I just think there's so much upside. The real estate thing is still running in the background. And, you know, one of my mentors that I'm sure you might call them, that you were on the ground. He always said, you know, don't don't forget to dance with the one who brings you to the dance or something like that, right? Don't ever stop doing single family house deals because the. It's just so easy just to keep doing that in the background, and we've got a small team that handles all that for me now, and you know that that actually, you know, so I still at two or three years ago and we've still got rentals or lease options that we own that we bought back then sub two. And I think I mentioned earlier, we're doing a big refi on those are going to pull a bunch of cash out and go buy more assets with it. And I was probably right place, right time. You know that now the pandemic is here, all the values have gone up. And so we've been able to do this refi we're in the midst of.

Joe:   What do you tell somebody who you know, it's just getting started in real estate because one of the problems that we have as coaches is getting our clients to focus right. It's easy to get excited and I've been there. You get excited about something. You're chasing down that thing and then you get this other shiny object. And then there's another. I've always said focus will make you rich and shiny. Objects will make you go blind, right? But there is a point where you know you're already, you're already making a million dollars doing this. You already got the systems in place, right? So it maybe it's OK then to diversify at that point? So what do you take? What do you say to somebody who's listening to this maybe kind of new in the real estate and they're they're getting excited about crypto, but they just bought this real estate investing course?

Blair:   Yeah. Well, I'll tell you, it's that the acronym for Focus follow one course until successful. Yeah, I wholeheartedly believe in that because what I found and you have to go in like all in on something, if you're going to make it work, if you're going to build up enough inertia and momentum to get it working, you've got to have the focus. However, once you get that thing up and running, and this comes from a book written by Felix Dennis. If you read this, how to get rich. And he's like this super wealthy guy over in the UK, he said yes. Focus, Focus, Focus until you've got your first one, your first business running. And then once that's running, go build another one as quick as you can because you don't want to have all your eggs in one basket. So that's what I've taken to heart and I enjoy it.

Joe:   Would you agree, though, if you did have to have all your eggs in one basket, real estate might be the best. Yes, ask it to have them in our little nest egg to have in your backyard.

Blair:   Yeah, and partly because it's like, you know, one of the ways I look at real estate is it's like an end of the world financial plan. Like, no matter what happens, the Russians bomb America. People still need to live in houses and they're going to pay me rent. You see what I mean?

Joe:   Well, that's why I love real estate. I think it is the best investment class. I've got some friends that are really deep into forex, foreign exchange trading, currency trading right now, you know, and other people that are into options and other people that are still in old fashioned buy and sell stocks, day trading crypto. And there's a hundred different ways to go into crypto. There is, but man, if there is one thing, I mean, your returns may not be as sexy as crypto, but they're more predictable. Yeah, they're more reliable, right? But there is nothing better, I think, in my opinion. And then then real estate than doing deals. And I don't know of any other faster, simpler way to make money than just wholesale, whether it's land or or subject to it's like you're doing traditional wholesaling for cash houses and things like that. Yeah, great way to get started. Now, looking at all these different things, these different streams of income. Blair, what would you say would be the best for somebody who just wants to quit their $75000 a year job? You know, they they just want to make seven or eight grand a month? What would you tell them to start doing?

Blair: I'd tell them to start doing house deals that, you know, it's like you always talk about. You want to get the cash now. Cash flow and cash later start. Put in as many of those into your portfolio as you can. You start building up that cash flow and then you've got cash reserves from the option fees and all that sort of thing from the down payments. And then, you know, you get two or three years down the line and you look up and you're like, Holy cow, I got like, all this money coming in. I don't know what to do with it, right? And then then you go out and start looking for other fun things to do like crypto and, yeah, shipping and all this stuff.

Joe:   All right, cool. Let's talk a little bit about marketing. Yeah, houses, you're big on Facebook. You've been doing Facebook ads for a long, long time. Are you still heavy into that? Is that still one of your favorite sources for leads?

Blair:   It is. Yeah, that's where we're getting all our deals right now. We've had to adapt a little bit. You know, we used to just optimize for quantity. Now we're trying to optimize a little more for quality. In other words, we're putting more questions on the lead form, that sort of thing instead of just name, email, phone. And so that has helped it. The KPL, the cost per lead goes up a little bit, but you know, we find it's worth it because we can actually make contact with the people. Then there's higher intent. Cool.

Joe:   Facebook has been going through a lot of changes lately. They lost $300 billion in market value in one day. And they're blaming it on the Apple iOS changes and things like that, right? So have you been finding is it been harder to get seller leads? Is it been getting easier because there's fewer advertisers?

Blair:   You know, it's relatively stayed the same, except the quality has dropped. And so that's where we we come in with the extra questions on the lead for him to try to increase the intent of the person who's submitting the the lead form of the lead ad right now. Having said all that, I recently got banned from Facebook because they decided they didn't like a meme I posted last July. They had a picture of Jeffrey Dahmer in it. And, you know, I can't even run the ads anymore anyway for the next 30 years.

Joe:   Your personal profile?

Blair:   Yes. Yeah.

Joe:   You pasted a picture of Jeff for Jeffrey Dahmer, who was a serial killer.

Blair:   Yeah, it was just a funny meme, and he had his photo in there. Wow. You know, anyway, you go into your anecdote. Well, no. They banned me personally from going into that account and managing the ads. Fortunately, we've got a team that that does all that now. So it didn't shut us down, unfortunately. But you know, they they locked me out on Thursday and then Friday I go to the ads manager and there's the big red x. Them like about threw up. I was so scared. Like, I just ruined our whole business over Jeffrey Dahmer meme.

Joe:  So they at least they told you what it was, right?

Blair:   Yeah, yeah, yeah. Yeah, they showed me the meme and I appealed it. And they're like, No, you're glorifying serial killer. I'm like, Come on, it's a joke, guys, give me a break, you know?

Joe:   So where do you stand?

Blair:   On Jeffrey Dahmer? Serial killers?

Joe:   No, no, no. Where do you? I mean, like, where does it stand with Facebook? Are they reviewing it or can you appeal it now?

Blair:   They appealed it, and they immediately came back. It's like, No, now you're out for the next 30 days. So I think I'm a week into it. I got another three weeks to go, but it's all good because we get, like I said, we got a team running ads now anyway, so.

Joe:   It might be nice to get off of Facebook for a little while.

Blair:   I know, right? One thing that it taught me though.

Joe:   I'm on Facebook right now, so I can't even type in Blair.

Blair:   Can you not? No, you can find me? I think they just restricted my advertising and I can't go live on Facebook, which I never do that anyway.

Joe:   So I you're still there. Yeah, but you're you had a post yesterday? Yeah, at eight a.m.

Blair:   Yeah, they'll they'll let me post, but I can't run ads or go live. But what it taught me was, there's almost no I mean, what is the upside of posting there? It seems to only be downside risk, right? So if anything, it just makes me want to post less on Facebook.

Joe:   Man, there's something here that says you posted something and says one of the best crews we ever had. And then it says it's something is like the contents not available right now.

Blair:   That may be some of the post from a friend that was

Joe:   January twenty eight. Yeah, OK. Yeah, crazy. So what are you? What are you looking at? What's your prediction for the next in the next year or this year in 2022 for Facebook? Is it still going to be? I got so many friends that are just sick of Facebook. They're getting off of it. They, you know, just for political reasons. But what are you seeing with Facebook?

Blair:   You know, Facebook, I think, is still kind of the big gorilla in the room. Like, if you're not going to use Facebook, I mean, Facebook is that thing that you can put 20 percent of your effort into and get 80 percent of your results out because they've got so much coverage, in my opinion, regardless of political views or whatever, I don't get much involved with that. I don't really care.

Joe:   So really, there's nothing else bigger right now than Facebook yet.

Blair:   But we are going into TikTok now because they've got the they've got the organic reach thing figured out. And so this might be a golden era for TikTok.

Joe:   So like, are you doing the TikTok videos? Are you doing the ads?

Blair:   At this point, we're just doing organic videos and actually really just primarily on the coaching side of the business as opposed to motivated sellers, and you're seeing success with it. Well, we just started, but you know, it's like we posted a video. We have no followers. You posted a few videos and two of them already have several hundred views like how does this even happen? We wouldn't get that on YouTube. Like, I think our whole collection on YouTube as a few hundred views. Now we've got more on TikTok already.

Joe:   You know, I'm willing to go to my grave kicking and screaming. I'm never going to use Tik Tok. It's so obnoxious.

Blair:   I never go in there. I'm just saying, like, we have their VA. He posts on the videos and then the marketing guy.

 

Joe:   Yeah, oh, you know, here's the thing I said the same thing about Snapchat. I hated Snapchat, and sure enough, it faded away. I think, you know, nobody talks about it anymore.

Blair:   It's for all the teens now.

Joe:   Wow. All right. What are your projections for real estate this year in the market?

Blair:   You know, who knows, man. You see all the the realtors post out. They're all real estate. We're not in a bubble or even if we are, the supply is so low, blah blah blah. So, you know, and demand is so high, the prices are going to stay up. Well, look, that's assuming everything else stays the same on the financing side. But even if you have low supply, high demand, if the person can't buy the house, literally they can't put the money together to buy the house. They're not going to buy the house. So I don't know what's going to happen. I think anybody making predictions right now is crazy because I mean, there's so much uncertainty out there. So the big thing is you got to be more comfortable with more uncertainty. I think that's how you survive.

Joe:   Mortgage interest. Rates chart, I'm looking for Google mortgage interest rates. And there is a chart that looks like it's been going down steadily ever since nineteen eighty three. Right. But if you look at just the last three or six months since January of twenty twenty one, the lowest it was was January 2021. All right. Two point sixty five percent now. Three point eighty nine percent. Yeah. So you're starting to see a climb back up.

Blair:   Three point nine over what was the one, two point six?

Joe:   Two point sixty five is the lowest I see just at this.

Blair:   That's like a 50 percent increase in a month. Right?

Joe:   That is 50 percent, is it? Yeah, it's still ridiculously low, three point eighty nine or whatever I said before. But yeah, what's going to happen? I mean, if you if you start seeing interest rates rising a point, that's a huge difference in where somebody else could afford two thousand dollars a month, let's say at three percent, that might be. I'm just throwing random numbers that might be a $300000 house. Yeah, the four percent that's only going to be a $250000 house or something less. Yeah. So it's going to push demand for housing down. It's going to push home prices down. Yeah. Who knows? You know, you'd like to think our federal government is smart enough to figure it out.

Blair:   I don't know. I don't. I don't have much faith in them anymore. No, I'm not looking to them for answers anymore.

Joe:   With inflation going up? Well, anyway, let's say Blair, the market continues to be strong in the next one or two years. Are you going to do anything different?

Blair:   No. I like the, you know, my bread and butter deal buys up to sell lease option. That is the one deal that has consistently made money for me for the past several years, and even more so now as we pay down the mortgage over the last couple of years and the value has gone up doing a cash out refi to build up reserves, buy more assets. And you just keep parlaying that stuff.

Joe:   All right. So let's say the market takes turn. Interest rates go up. Inflation continues to be pretty bad. You start seeing a softening of the demand. An increase in supply houses aren't selling as fast. OK, so now the market's starting to soften a little bit. What is your strategy going to change then?

Blair:   I don't think so, because it's kind of like that going back to the end of the world financial plan, right? Everybody's going to need a house to live in still, no matter what. So if the you know, we get this question from time to time, what if you buy all these houses and the value goes down, which is what we were talking about earlier? You know, as long as you've got reserves and cash flow and cover being able to cover vacancies, that sort of thing, there's no reason to sell the house, right? And you wouldn't sell the house if the values down, you wouldn't sell it. Buy it at the top sold at the dip, right? So you just hold on to them, keep the cash flow. But it's like we were talking about earlier, like cash reserves makes everything a whole lot easier when you're holding a portfolio.

Joe:   OK, now talk about cash reserves. What do you what do you recommend? I used to have a general rule of thumb. I didn't follow it when I owned a bunch of properties, but I wanted to have at least six months of payments in reserves for every house, which you know could be significant to Morehouse as you get right. But what are some of your general rules of thumb?

Blair:   Yeah, I think that's a good one. I usually do like three months of savings, four or three months of payments for each house in reserve. And then also keep in mind like, you know, every now and then you're going to need to replace a roof like if you own the house. Yeah, technically, you put the maintenance and repairs on to the tenant buyer. But if the roof is leaking and they don't have money to put in a roof on, you're putting a new roof on, you know what I mean? Yeah, yeah. Yeah. So I mean, you just got to have the cash reserves. There's another book I read a while back said the trick to money is having some kind of like the biblical principle. Like, you know, to those who have much, much more will be given. Money attracts money. And I find that the more money that I save and invest and I keep it as opposed to spending it, the more money comes to me. Right. So it's just it's like the I've heard Charlie Munger talk about this one time. He's like getting that first hundred K is like the hardest thing in the world. So, you know, for most people, but that's your first step. Go do whatever you got to do to save up one hundred k and then once you're there, then you'll you'll know what to do with it. By that point, because you'll have trained yourself and created the habits that you need in order to accumulate cash. See what I mean?

Joe:   Nice. All right. You got to protect yourself. Be prepared in case one of the eggs in your basket breaks, right? You can't have all your eggs in one basket. Really good. You know, I was thinking, too. I forgot to mention this. One of the ways that I've been diversifying is with vacant land or starting to flip vacant land. And I love that even though it's more competitive now than it was when I first started doing it, kind of dabbling in it about three or four years ago. But it is super, super simple compared to houses. When you're when you're getting three percent response rate on your direct mail with land and you're only getting half of one percent response rate, you remember those days. Oh yes, I remember during. Tamale used to do a lot of it. Man, it's just like the good old days. Now it used to be three years ago, you'd get five to 10 percent response rate. Now you're getting three. But still, it's really, really good. Yeah.

Blair:   To your bread and butter deal in the landside. I'm just curious, what is the typical deal and lease option? Yeah. Like what is the typical deal look like?

Joe:   Well, we've done we've been doing a lot of wholesaling of vacant land, so we've been buying it at twenty five cents on the dollar, selling it for 75 cents for just quick cash. My two sons have been kind of helping do it part time, very, very part time, the last three or four years or so, and they've grossed about a hundred and fifty grand in profits, just doing it. Now they didn't get all of that right. We had somebody helping us sell the homes and stuff like that, but they did really well. But a typical deal would be we just flipped one recently for cash, and I just I'm in the process of buying five different lots right now. So let's say it's worth 10 grand. We're buying it for twenty five hundred and now we're starting to sell it for. OK, if it's worth 10, we're buying it for twenty five hundred. We'll sell it for cash for 7500, just make it quick. Five grand. But now we're starting to sell them with owner financing, so we're selling them at ten grand with a thousand down two hundred bucks a month. Nine percent interest for five years. And there's a special code in the tax code. I'm not a tax guy. You got to talk to an accountant, but and I have, but you don't have to own a house. If you don't do it right, you typically have to pay taxes on the full sale, even though it's owner finance. So if you buy it for 100 yourself or two hundred and an owner financing, you have to pay taxes on that $100 $100000 game. It's not that way with land, you're only paying taxes on what you receive every month. So there's a huge demand right now, especially with what's going on as the coronavirus and politically and all that, there's a huge demand for land. Well, guess what? Banks do not lend land banks do not lend money on land that's small and cheap like that. So we're going after rural vacant lots at least one to 20 acres where we want the bigger lots that people can just build a cabin some day, go camping, ride their four wheelers, go shoot their guns, just get away from everything, a place where they can bug out or whatever. So we like rural vacant land that's super cheap and we're selling it to the owner finance. So typically, you know, if you're looking at cash on cash returns, we're looking at 75 to 100 percent cash on cash returns in the first year. Yeah, you put twenty five hundred into it. You're going to make that twenty five hundred back in the first year. You should be at the minimum breaking even in your first year. So your cash flow is really, really good for just using a small bit of money without all of the headaches and hassles of owning typical rental properties. So that's kind of what we're doing right now, and I'm starting to do it inside of my tradition, my self-directed IRA.

Blair:   Oh, really nice.

Joe:   So that'll be I'm excited about this market. I'm excited about what's going on because again, knowing the different creative strategies you can adjust, you can do more cash deals, you can do more lease options and subject to their owner finance houses or vacant land. Airbnbs or multifamily is right. If you just surround yourself with super smart people and you continue listening to podcasts like this to me, guys like Blair who can help you on your journey. Yeah, hey Blair. Cool, how can people reach you?

Blair:   Just go to my website. Blair Halver dot com B L A I R H A L V as in Victor E R dot com.

Joe:   Let me write it down right here. Blair Halver dot com. Right? That's it. Yeah, there it is. Blair Halver dot com. Yeah, cool. Do you have a podcast YouTube channel, just a blog, or.

Blair:   Yeah, we do a YouTube and blog and everything else. But if they go to Blair Halver dot com you'll get our free webinar just lays out everything we're doing in real estate and how we do it A to Z so you can see all that.

Joe:   Cool. All right, thank you. See you next week in Tampa. Are you going to be there?

Blair:   No, no. I'll be in Amelia Island, though. You're going to be there in April?

Joe:   No for Tim. Yeah, I like Tim, but I just traveling too much. Yeah, yeah. Well, good. Cool, man. All right. Thank you, Blair.

Blair:   Yeah, thanks a lot.

Joe:   Well, thank you, everybody. Enjoy this podcast and don't forget to. What did I tell you about? If you want this book, you get the PDF for free by going to review Joe Dot Net. If you want to get the book, just pay shipping and handling, go to REI Secrets dot Com. But when you go to review Joe dot net, make sure you do it from your phone so you can leave a video review. All right, we'll see you guys. Thanks, Blair. Bye bye, everybody here.

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