Preview Mode Links will not work in preview mode

The GenWhy Leaders Podcast


Nov 18, 2020

Show overview:
In this episode we interview Alex Olson, a real estate investor/agent for large apartment complexes. Alex has been working in real estate for several years and wants to share his knowledge about the field and the benefits of real estate investing. 

Why real estate:
Alex states right now it is important as ever for everyone to take a big picture look at where the world is going. We need to understand that certain jobs and markets are at risk. Alex states a job investing in real estate is solid compared to a job in another field such as investing in the stock market. 

There are also multiple ways to generate revenue in real estate. Alex mentions his 4-pronged approach in real estate to gain income:

  • Income from tenants paying down their mortgage
  • Income as cash flow from property after income expenses
  • Income from appreciation with property going up in value 
  • Income from all three and choosing to take it out, leave it in the property, etc. 

During these uncertain times, a job in real estate allows Alex to feel secure in the job market. 

Real estate investors explained:

Alex explains that an investment sales real estate agent’s sole purpose is helping other investors find real estate properties. He finds larger properties and markets them to investors. When they invest in your property, you are making money and generating revenue. 

Other real estate agents simply sell the property, they do not invest in it. 

Important for millennials to start real estate investing:

Alex mentions how real estate investing is beneficial to start a diversified investment strategy or even as your first investment strategy. He states that a large amount of wealth is generated from real estate investing continuously. It is also a safer investment. Real estate is tangible and appreciates in value. People will always need a place to live. 

This differs from the stock market because it is more electronic and intangible. You don’t really have any control over that company. There is much more risk involved and it is hard to predict. 

Real estate investing provides an additional revenue stream, which is recommended by most financial advisors for your portfolio. 

How to begin investing without using your own money:

Real estate is something you can be creative in with the sky being the limit. Alex always tells people to never take no for an answer because the options are limitless in real estate.

Alex mentions you must first do plenty of research into real estate investing and understand the cash flow. He then talks about the process of utilizing something of value and using the money from that something of value to invest in real estate.

By doing so, you have invested without taking any money out of savings and you now are invested in real estate. However, Alex wants to make it clear that this is a long-term strategy for wealth building. This is not a ‘get rich quick’ scheme.  

Advice on either commercial route or residential route for investing:

Alex explains how new investors can utilize a fourplex (four unit building) and with a FHA loan (lowest rate and lowest money down option) on that building, you can occupy one of those units as an owner and rent out the other units that will pay for your mortgage. This allows you to live in this unit for free as well as possibly making additional money.

Where to find investors/properties

Step 1: Alex mentions a good place to start is the website, biggerpocket.com. The website gives good information for beginners and allows viewers to ask questions, has a weekly podcast, gives book recommendations, and much more. 

Step 2: Start messing around with zillow.com. Can search multi family apartments specifically and can actually draw on the map where you are looking to buy. 

Step 3: For more advanced investors, you can actually start reaching out to brokers and agents and ask them questions. You should also have background information to be prepared for the broker’s/agent’s questions.

Step 4: Do research on banks and credit unions to see how they can help.

Step 5: Although harder to do/find, seller financing is another option. Seller financing is when you offer the wanted price on a property that has had trouble selling and offer to do certain actions until you can pay that full price. Alex says often that property will appreciate in value as you work on it which allows you to build equity. 

Pros and cons to real estate
Pros- control over your own destiny, make decent money, having assets that appreciate over time and are generating a cash flow, etc.

Cons- all the possibilities of what can go wrong such as a fire, potential for lawsuits, overpaying for a property, etc. 

However, Alex believes it is a great profession despite the risks. 

Proudest moment in real estate
Alex mentions how proud he felt when his first investment in a duplex was leased up in 45 days. He mentions how exciting it was to see that this was something he was good at and that he was capable of. 

A tip for real estate investors
Alex talks about the importance of a good lease. But writing out the exact terms of what you as the property manager will and won’t do on the property, you can save yourself some headaches.

He also mentions the pros and cons of being a property manager vs. hiring one.

Book recommendations
Brandon Turner’s (who works with biggerpocket.com) book: The Book on Investing in Real Estate with No (and Low) Money Down: Real Life Strategies for Investing in Real Estate Using Other People's Money

https://www.amazon.com/Book-Investing-Real-Estate-Money/dp/0990711714

Sam Zell’s book: Am I Being Too Subtle?: Straight Talk From a Business Rebel

https://www.amazon.com/Am-Being-Too-Subtle-Straight/dp/1591848237 

Business ask
Alex is looking for property within two blocks of an economic driver such as a hospital, university, etc. He asks that you let him know of any property that could use some renovation around this area as well. 

How to contact
LinkedIn profile: https://www.linkedin.com/in/olsson17 

Email: alex@clemmonsrealestate.com