S4E27 – Joel Farrell – The Future of Real Estate Investing

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Key Timecodes

• (00:43) – Show intro and background history
• (03:07) – Deeper into his background history and business model
• (08:36) – Understanding his business strategies
• (18:33) – Deeper into his real estate strategies
• (26:50) – His thoughts about the real estate market
• (29:01) – A bit about his book
• (39:31) – Deeper into his networking strategies
• (42:43) – What is the worst advice he ever received
• (43:06) – What is the best advice he ever received
• (45:08) – A message from the guest
• (45:47) – Guest contacts

Transcription

[00:00:00.320] – Intro

Hey, this is Sean Tapper, the host of Payback Time, an approachable and transparent podcast on building businesses, increasing wealth, and achieving financial freedom. I’d like to bring on guests to hear authentic stories while giving you actionable takeaways you can use today. Let’s go.

[00:00:17.600] – Sean

My next guest is a real estate investor who got started in the 2000s. He talks about his journey of investing through the recession of ’08 to ’09 and how much properties have appreciated from 2010 through early 2022, 2023. We do spend a lot of time talking about where real estate may be going from here, which is a really interesting conversation I haven’t had on this podcast before. So with that being said, please welcome Joel Farrell. Joel, welcome to the show.

[00:00:45.570] – Joel

thanks, Sean. I’m pumped to be here.

[00:00:47.700] – Sean

All right, good to have you here. So why don’t you kick us off and tell us about your background?

[00:00:51.200] – Joel

So I got into the mortgage industry in 2006 out of college. So I’ve been doing that for a long time. I got into real estate officially in 2009, started building a portfolio here in Missouri, also started scaling into Florida. And then myself, along the way, started a podcast last year called Strive for 25. It’s all about helping somebody increase income, save, and have options to invest 25 is, Hey, somebody can save 25 % of their income. They’re going to be in great shape, which is obviously a massive goal. But anyway, I wrote a book. So just finance-related is really my focus.

[00:01:26.730] – Sean

Awesome. So you’ve got a few irons in the fire, you could say.

[00:01:30.130] – Joel

Probably too many, but that’s okay for right now.

[00:01:31.930] – Sean

Hopefully not too distracted. But this podcast is all about building wealth, financial freedom. So I really like the name of your podcast there, Strive for 25. We do with our platform, Tykr, we actually encourage people to try to invest between 15 and 30 % of their income every month. And if you can do that, you’re going to be in good shape. However, if you can’t get to 15, we say just work your way up to that. Start small, work your way up. But I like the philosophy there, very much aligned. But let’s get into the passive income stream, real estate. So you got started in 2009, right? Right at the crash. Way to go.

[00:02:10.490] – Joel

Yeah. I bought my first house as a condo in, I don’t September of, I’m sorry, 2009. So the first-time home buyer credit had just come into place, and it was not repayable. So that was end of ’09. And me being in the mortgage industry, rates were dropping. So in that In the time frame, when I got in in 2006, rates were like seven %, seven to a quarter, and they started to come down to the 6s, and then the crash happened. And being in the mortgage industry then and also now, I will tell anybody, and maybe this is just me personally, but this has been a harder go than that was. We were doing more loans in that time frame, and that’s a whole different story. But by the beginning of 2009, rates dropped from six and a quarter to five and a quarter within four or five months. And so we were busy doing a lot of loans in that time frame. So I felt I had the confidence to be able to purchase a home at the end of ’09. And that’s how things started for me personally with real estate.

[00:03:08.210] – Sean

Got it. And with a lot of the guests that are on this podcast that talk about real estate investing, what they do is they keep their day job, which mortgage industry, that’s the one stream of income in your case, and you still have that today. And then you use the investments from real estate to keep investing in other properties. Is that what you did essentially? 2009 was the first property. When did you get the second?

[00:03:29.390] – Joel

Yeah. So So people have different philosophies on real estate. I’m a buy and hold type of person. And having a full-time job, I only have so much capacity to be doing other things, whether it be finding off-market properties or whatever or flipping properties. So I’m a big proponent of what I call the stair-step method. I didn’t know what I was doing at the time, but this is what I call it in my book, How Literally Anyone Can Be a Millionaire. It’s a 70-page parable type of book. But buy a property, live in it for a couple of years, save up, buy the next one as a primary residence, and turn the old one into a rental. And I did that a couple of times. And property values go up, pay the mortgage balance down. If you can just even just break even on cash flow over the long term, you’re going to have a net positive with the equity buildup. So that’s been my philosophy early on. And as things evolved in my journey, I was able to get into a few more other things along the way.

[00:04:23.680] – Sean

Got you. So do you still do single family, or did you level up from there to multifamily?

[00:04:28.880] – Joel

Yeah. And In 2017, I got my first multifamily in St. Louis, and then also a commercial building that we rehabbed. Actually, we run our mortgage operation out of this commercial building, and then got a short-term rental in Dest in Florida, a couple of other multifamilies along the way in St. Louis. And then now I’m doing a land development project, going to build some homes in Florida, Santa Rosa Beach, Florida as well. So a whole gamut of different things. Yes.

[00:04:57.850] – Sean

I haven’t had too many people on the show So talking about land development. So I want to touch on that in a second. Let’s touch on the multifamily. Are these four unit, eight unit or bigger?

[00:05:07.940] – Joel

Four units.

[00:05:08.890] – Sean

Four units? Got it.

[00:05:10.160] – Joel

Yeah. So I didn’t house hack. Now, obviously, I would have loved I’d be able to do that younger if I knew more about it. Buy one FHA, 39% down, live in one unit, rent the other ones. I didn’t do that. I bought them outright as investments. I did them with commercial loans. And that’s a whole… That’s another thing that I did some pretty crazy stuff back in that time to be able to create a scenario with cash flow, but also minimizing the out-of-pocket at closing. That’s a whole different thing. But that was in 2017, so it feels like a lifetime ago, to be honest.

[00:05:43.010] – Sean

Yeah, six, seven years now. Why don’t you drill into that a little bit? What are the risks you were facing at that time?

[00:05:50.100] – Joel

So I think there’s two sides of that question. You have risks of when you get in and what you’re facing, because you’re dealing with a lot a lot of unknowns. You don’t even know. You can do as much research and talk to as many people and do all the data crunching. There’s stuff that you just don’t know. The things that I didn’t know and weren’t prepared for were just that these are old buildings. They were built in the 1920s, they were brick. They’re just more stuff that I had to fix and update and repair over the course of a number of years. And along the way, I’ve started to fully gut rehab some of the units one by one. You go into it thinking, Hey, I think the expenses are going to this dollar amount or this percentage. But for me personally, just the unknowns. Just know what you don’t know a thing. But the biggest thing for me personally is that I was able to just… Some years cash flow a little bit, break even, but the values basically doubled in a short amount of time.

[00:06:51.530] – Sean

Can you give us some raw numbers here?

[00:06:53.270] – Joel

Yeah. So I bought one property for 150, and it was not in the best shape, so I had to do some rehab And then this, I guess a couple of years ago, it appraised in the 330 range. Nice. And then going back to the scenario where when I’m talking to somebody on a residential loan, there’s limits on what you can have a seller cover in closing costs. If you’re buying a primary residence and you’re going to do a primary residence loan, conventional, 5 % down, 3 % is the limit of seller credits that a seller can get towards closing costs. And an investor, if you’re doing a commercial loan for an investor loan, it’s 2 %. In this scenario, because it’s a commercial loan, you don’t have all those federal regulations that restrict you. So I had a 135K agreed upon purchase price with a seller, off-market, essentially. And what I did is I got to that point, and I knew the value of the property would come in higher. So I took the contract price to 150. So up 15, Out of 15. When I say out of 15, I mean a $15,000 credit towards closing costs.

[00:08:03.800] – Joel

Got it. So that helped me minimize my out-of-pocket. And then the appraiser came in 172. And then I was able to research a couple of things to even lower my out-of-pocket with that as well, with prices and loan amounts and things like that, which you can do on commercial loans, you can’t do with typical conventional loans.

[00:08:21.050] – Sean

Got you. Okay. Very interesting. All right. And then today, how many properties do you have?

[00:08:26.250] – Joel

Like 15 units, I think.

[00:08:28.240] – Sean

Okay. Got you. And they’re all spread out? It sounds like not just in your area, but outside the state.

[00:08:33.240] – Joel

The majority are in St. Louis. I’ve got a couple of units in Florida.

[00:08:36.590] – Sean

Got you. Okay. So why don’t you tell us about what’s your strategy? Do you aim for a certain target price or maybe a part of the city? I’ve talked to people. They like, in some cases, investing in working class areas, areas that I mentioned this in the podcast before, like areas close to hospitals because you have nurses, sometimes doctors in med school. They’re rarely in their apartment, so That’s a great renter, like when they’re paying their rent, but they’re not always there. I want to hear your strategy here.

[00:09:06.300] – Joel

Yeah. I mean, from a multifamily standpoint, here in St. Louis, there’s a certain geographical area where you’re going to have multifamilies. Then within that geographical area, if you are hyper-focused on a certain area, you’re going to get a better feel for which neighborhoods are more risky, which are less risky, which are up and coming, which are not. Here in St. Louis, my properties are in North Hampton. If you look at the South city area, it’s northwest of the city. The further south you get, the less the rent are, certain pockets are maybe more risky. So I think being hyper local and looking at it from a longer period of time is a really important thing to be thinking about because you’re going to be able to get those lovely nuances and details that you wouldn’t get if you’re spread too far. But at the same time, I had somebody on my podcast, I’m not going to name any names, Chris Stout, and he’s in New York, and he’s talking about hyper local, and he advises people to not invest over state borders. Don’t invest outside of your local market. And I agree with a lot of the principles, but if you live in California or Hawaii or New York, the affordability levels are just off the scale.

[00:10:21.140] – Joel

So if you want to buy real estate and get it to gain, you’re going to have to go across state borders. Maybe it’s in the Midwest or Ohio, or Florida, or the Southeast, whatever. So I don’t like the whole rule of thumb thing. I think there’s always exceptions to the rule. And that’s I got stuff in Florida, and I wouldn’t have gotten down there if I didn’t expand my horizons.

[00:10:40.450] – Sean

How did you do deal like that? That’s out of state. Do you have a network of other people that are like, Hey, I’ve got this property you might be interested in. You want to take a look?

[00:10:48.650] – Joel

I bought that property sight unseen. And I say that with a caveat because I knew the neighborhood. We had a friend of the family that has a home there. And this is short term rental market on the beach, Emerald Coast, Northwest Florida. So I stayed in that person’s home for a couple of different holidays. And so I knew the area. I knew the scope of what was going on. So I had a realtor that I knew personally that helped me do some FaceTimes and whatnot. So I say sight unseen, I didn’t physically see it, but I had a grasp for the area, the numbers, the markets. And so in that time, are you familiar with 30A? Like Alice Beach, Seeside, Rosemary. Okay, the movie Truman Show? Oh, yeah. With Jim Carrey? Yeah. That was filmed in Seeside. And 30A is a series of 12 different little bitty towns that all have a unique little vibe and feel. Rosemary has this French feel. You’re talking $15 million, $12 million, $20 million on the water. Alice Beach is this white stucco area, 3,000 square foot villas that are $7 million. So that area was super high priced in terms of the rent you’re going to get.

[00:12:06.760] – Joel

And so you’re buying the lifestyle, you’re buying the long term value and appreciation. And Destin is where my property is, which is the hub where it’s been there for a long time. The values in 2021 hadn’t really matched the rental potentials. And so that’s the reason why I decided to buy there at the time. And there’s more that goes behind that story, how I got there. But I’ll I’ll say that for a different day.

[00:12:32.040] – Sean

Sounds good. Yeah, because some people are… They want to know, how do you do those deals that are outside your city? Right away, of course, I assume with all your properties, you’re using a property management company. Is that correct?

[00:12:44.760] – Joel

Yeah.

[00:12:45.490] – Sean

When you first started, did you do the fixing on your own? Did you just go right into a property management company and have them do the heavy lifting?

[00:12:53.970] – Joel

So the Florida one, it was already fully, fully, already operating. They already had all the Bookings ready for the summer. So it was just buy and then just Coast in and things keep rolling. And the four families, that’s obviously a little bit of a different game, long term rentals. That was more work that had to get done and getting contractors in there, getting some things set up. But the best advice I would give somebody is that you don’t have to rush. You can take your time and really talk to people, meet people. And it’s okay to put offers on properties, especially if they’re aggressive, because then you They’re not going to get a feel for how a seller may respond or how a seller may counter, or they may not respond at all if you’re too aggressive. But if you feel like you done the work, done the math, run the numbers, and, Hey, if I got the property at this price, I know that there’ll be a little risk. Now, that may be some work on an agent to do that work for you and put the offer in, and they may shy away from it if it’s too aggressive.

[00:13:51.490] – Joel

But what if somebody says yes? If somebody says yes on your aggressive offer, then you got to be prepared to press So have the financing ready to go and be able to operate and execute.

[00:14:03.880] – Sean

We’re coming out of… I’m looking at this from a stock investing standpoint, which is our main model. 2022 was really a bear market recession, I would even argue. In 2023, the first part of it, we really felt it. People were sitting on the sidelines when I tell people, Hey, you should be taking action now because this is where you make your big returns. What are you doing right now? Are you waiting for opportunities? Or are you hitting the market? Like finding some deals?

[00:14:32.580] – Joel

I love this conversation because there’s the question of, If I’d have known this 10 years ago, this is where I would be today. I hate that question because I know me personally, even if I had all the golden nuggets of what I know today, And I was there telling myself in my ear, Hey, do this. Like, what I listened. It’s like, what I have been in the right to frame my mind to be able to take the information and actually execute it. And the question is, I don’t know. But besides that, the way that I look at things right now is real estate, for me personally, this is how I look at it. Real estate is the tip of the iceberg. And what I mean by that is that you may see somebody with a multimillion dollar portfolio, $20 million dollar portfolio, whatever the numbers are, and you say, okay, that guy is successful. That woman is successful X, Y, Z. But the most successful investors, in my opinion, are the ones that are focused on other things to drive income, to build context, to have confidence to be able to get in the market.

[00:15:25.640] – Joel

For me personally, I look back at that 2009 time frame, I was working all these hours doing mortgages, trying to be able to make money and save money. As my career evolved and whatnot, that was my focus. I was focused on my clientele, focused on the business, and trying to be able to increase income. And so that gave me the ability to have the money saved and also the confidence to be able to take a risk. Because I remember 2013 was a unique year where prices were going up and things were going in the right direction. And there was all this talk of, what if prices go down? What if there’s another crash? I remember. Yeah. And so I was hesitant on doing anything. And when I first put my first dollars in the stock market was in 2007, and then it gets cut in half within a couple of years. I was scared to put money in the market. I didn’t want to do that. I’ll just do it. I’ll do it on my own. I’ll day trade here and there. And that’s a whole different story. But I ended up buying a property in 2013.

[00:16:28.380] – Joel

I looked back on, thank God I did that. I call it the eye of the storm. You’re in this period of time where you’re working on stuff. You may not see results. It’s calm and nothing’s going on around you. But in all reality, all the things that you’re doing are either helping you or hindering you. All that storm is boiling around you, and you may not see it. All those little things you’re doing, actions that could be happening for you or against you, they’re compounding it a little bit of increments. And it may be five years, seven years until you see the results. And that’s how I look back from 13 to 17. 17 is when I got the four families, and then a couple of years later, it wasn’t until 2019. So really 10 years into my journey like, Oh, sugar. I’ve got something here. I should have been buying more stuff along the way. What was I thinking? But I wasn’t seeing the results. I wasn’t seeing how the whole picture fit together. I didn’t have the blueprint. I didn’t have a mentor. And that’s why I mean the eye of the storm.

[00:17:26.230] – Joel

I didn’t know what was going on. And it Hindsight is always 2020, right? But the results, they come in time.

[00:17:34.410] – Sean

That’s investing for you. It’s such a delayed gratification strategy, and it’s this slow process. And all of a sudden, years later, it’s like, bam, big numbers start to show up in your If you’re investing in the stock market in your broker or the real estate, the cash flow really increases or the value. You gave a great example of a property that doubled in a short time frame. It’s like, no, you’re not going to see that overnight. You have to wait. Go ahead.

[00:18:03.900] – Joel

I was just going to say another thing that I’ve been talking about on my platforms is Gen Z. Gen Z, is this going to be a generation of people and beyond who don’t own homes? Because the affordability is gone off the route. The prices, the money you need to be able to have for down payment closing, it’s just widening and tightening. And so that’s something that gets me fired up is, are we in the middle of a brewing of a generation of of renters. And that’s scary to me.

[00:18:32.950] – Sean

Yeah. What are your thoughts on that? Because I think about that all the time. My wife and I were talking about how, how are these kids that are now 22, 23, 24 coming out of college? If they get into a decent job, still, the home are ridiculously expensive. Are they going to buy a home? Are they just going to stay in a renting situation?

[00:18:50.690] – Joel

So there’s two parts of this conversation that I think are important. And the first part is the price conversation. Hey, prices have gone up so much in the last three or four years with coming out of COVID, and the prices have to come down, especially with rates coming up. You would logically think prices would have to come down. There’s a supply and demand imbalance. But what some people may not be aware of is that there’s also a lack of inventory, and that lack of inventory is holding prices up from the residential standpoint, not so much commercial real estate standpoint. And so you dig deeper on that. Scenario. And people in 2020 and 2021 were refinancing their mortgages and the threes and the twos. Three and a quarter had always been the floor of rates that I had ever seen. It wasn’t until COVID that rates went below that floor and we saw rates in the twos. Those people are probably never going to sell that house. Even if they move and buy a house that maybe has a higher rate, they’re going to keep that as a rental because a rate that’s two and a half %, that’s an asset in this environment.

[00:19:54.820] – Joel

So you have this lack of motivation to sell. So you’re going to keep it, stay there, or you’re going to rent it out. So that’s pushing pressure on the minimal amount of inventory out there. So prices are stabilizing. So I believe that you’re going to have… That lack of inventory is going to be the new normal. In the mortgage industry, 2021, there was a stat. I think there was like 180,000 people that were a lending loan officer license, the bank or a mortgage company, whatever. That number is like cutting half as of 2023. So people are getting out of the industry. Same The grand thing with realtors, I don’t know the number, but going into 2024, it’s going to be even lower because this has been the hardest year. My numbers are down by 50 % overall. So I say that because we’re in this new normal in the real estate industry. So I don’t think prices are going to go down. Maybe they go down a little bit. I don’t think you’re going to see a crash. There’s nothing really that shows data that there’s going to be a massive amount of people defaulting and then having the supply increase.

[00:20:56.170] – Joel

So if that is where the data really is heading towards, and then you have the idea that, hey, rates went up so fast. So in 2021, we were locking rates in the low threes in December of 2021. By May of 2022, rates were in the mid fives. By June, we’re in the mid sixes. So they went up so fast. And And the markets weren’t really able to handle that, I don’t think. And so as fast as they’ve gone up, now this UBS article that came out a couple of weeks ago, talking about predicting that the feds are going to lower the Fed funds rate 200 to 275 basis points in next year, which I think a lot of the information makes sense with economic data slowing. We were in an election year, so I think there’s probably going to be a push to make the numbers look rosy. So if rates go down considerably next year, everybody that has been on the sidelines is going to jump back in. So I think prices are going to continue to go up. So which, coming back to the Gen Z conversation, if prices in five years are, say they go up 5 % every year, 4 % every year, your median house price I think it’s in the mid-fours now.

[00:22:01.560] – Joel

It’ll be in the fives or six, where the math is. And then coming back to the income side of things. So if prices are going to continue to go up, you have more people in the country, you have a limited amount of housing supply. I think the construction industry is like five or six million new construction starts behind from historical standards. So there’s a need there, and that’s not catching up anytime soon. So what’s the end result? What’s the solution? You’ve got Gen Z making average wages, not able to money with inflation. The only way to solve that problem is to be creative as hell and understand why it’s important and then go do it. And I’m going to stop there because I have some more thoughts on that. I’ve been ranting.

[00:22:43.820] – Sean

No, I think this is gold. This is really good perspective. I’ve been thinking about… I look at stocks that are related to companies that are building multifamily complexes, not single family. Almost leaning into that is maybe that… I don’t have data on this. It’s just an assumption, but maybe it’s going to be mass production of these state-of-the-art tech-infused properties in mass. It’s got everything installed. I think of like, not renovated by added, Google. My whole home is powered by Google now, thermostat and whatnot. And it felt good to get rid of the old Honeywell systems from 20 years ago. But I look at all the tech that can go in, and it’s Apartment complex starts at a record high.

[00:24:01.930] – Joel

So if you convert that energy and resources to building things like condos and downhouses, I see maybe that going or maybe that’s going to be a great solution for affordable housing. But someone’s going to have to do it. Someone has to see the vision and see the reward, because at the same time, it’s like, if I’m putting my neck out there to go build something, I need to be able to maximize the return and also minimize the risk. And building condos, I’ve never done it. So I don’t have a lot to say on it, but I just know from a standpoint of risk and reward, there’s some risks that go on. I’ve seen condo complexes not sell out properly and it gets stuck. So it’s, Dan, if you do, Dan, if you don’t, a thing. But this is the one thing. When I meant creative, For the person that’s coming into the workforce and early on in their journey, I hear and see a lot of people that are living with their parents. I lived with my parents since I was 25 when I got out of college, and I was saving money, a little a bit of money.

[00:25:00.480] – Joel

I could have been saving more. But housing, if somebody believes that that’s a positive for somebody to go down that path and own a home, okay, then putting out the vision, okay, I’m going to stay at my parents house, save X, Y, Z, 10%, 15%, work up to be able to save the money or get creative. Okay, maybe I get a gift of funds to be able to buy the house. If you think and agree that prices are going to be higher in a year from now, then maybe it’s an incentive to get creative, to to buy that house today and get in at an entry-level standpoint. Because once you get in the game, this is something I talk about all the time. Let’s say you buy an entry-level house, it’s $200,000. It’s not your forever home. And it does fall back into the stairs to buy a house, live in it for a couple of years, save up by the next one. But once you’re in the game and you got the responsibility, everything in life changes. Now you’ve got the pressure and the incentive to be able to save more, to be responsible, to do the X, Y, Z, to be able to keep things.

[00:25:57.150] – Joel

So getting creative with your resources, your family, your friends to save the money up to be able to buy, because then it’s a stepping stone to the next thing. Right on.

[00:26:07.250] – Sean

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[00:27:11.340] – Joel

I think the answer to that question, in my opinion, is completely unknown. There was a video by Patrick Bet David that was talking about, okay, if the Fed lowers rates significantly. He was comparing a hyperinflation standpoint of a Zimbabwe, and I think at the other couple of countries, where asset prices just completely rose. We When you print three or $4 trillion of money into the economy like they did, we’re coming out of COVID. I think there’s a lot of unknown. It’s never been done before in this country. So I think there’s a lot of unknown of what the effects could be from a 5, 10 year standpoint. And that gap between the best and the rest. People that bought a house 10 years ago, now they’ve got $200,000 or $300,000 of equity. Now they can be creative to be able to buy the next one. So the people that are able to make moves in this market right now with prices going up are the people that have built up the resources. So if you’re 35 years old and all you have is a 401k, and you don’t own anything else, it’s going to be challenging to be able to be nimble in this market to go get something.

[00:28:14.850] – Joel

There’s a lot of money on the sidelines. I don’t know. It could be the next two years, rate guys could go up 10 %, and then it flattens out. It could be the exact opposite. I don’t know. I think because of all the money that’s out there, it’s on the sidelines. I wish I was smart enough to be able to figure out how to evaluate that type of data of how much money is on the sidelines and cash or whatnot. I think it’d be interesting to dig deeper on that.

[00:28:39.890] – Sean

Right on. We’ll see what happens over the coming years. No, really good perspective here from your standpoint on real estate. Usually, I’m talking about people’s strategy, what their value is at, overall value, all that good stuff. But this is zooming out a more macro approach to the market in general. So thanks for that insight. What I like to do next is transition to your book, got it cued up on Amazon here. How to literally… How literally anyone can become a millionaire? Why don’t you dive into this a little bit?

[00:29:12.520] – Joel

Yeah, I mean, I have to use the word The rule again. Don’t take that message literally. But if somebody wanted to become a millionaire and they wanted to put the work in, it’s possible. People are doing it every single day. Now, it’s not easy. Not everybody wants to to it, or not everybody wants to put the work in to do it. But in the book, I have an example. It’s more of a parable, but it’s loosely tied to a couple of different clients that did this. But the book talks about wealth building and compounding and automating, which is all the stuff out there. But if somebody can save 100 bucks a month in this environment, that might not seem like a lot of money. But that’s a massive success in my eyes, because if you’re 23 years old and you’re making 20 bucks an hour and you’ve the rent and the car and insurance and this and that. When you’re that age and look back on it, it’s like, okay, when so and so comes back in town, I’m going to the bars and I’m going to go hang out with them because it’s their birthday or it’s a baby shower, whatever.

[00:30:11.640] – Joel

Things come up. Saving 100 bucks a month is not linear. It’s, Hey, this month’s sucked. I had to spend money on the car, and then I got to make it up next week. It’s a roller coaster. But at the end of the year, you can save 100 bucks a month. All things going on with the cost of living going up so high. That’s a massive success. It’s a little bit step that you can build off of. So that mindset, the tonic habits, compounding. So one of the stories I talk about is the stair-step method. And this is somebody who, when I met this person, they’re making about $40,000 a year, had a 580 credit score and no savings. But they had a vision of buying a house, and they wanted to build a portfolio. They had read Rich Dad, Poor Dad. And so we looked at all the stuff. Dude, you got nothing to cut. The input and the output, there’s nothing to cut. So what are we going to do here? So we talk about the formula. The formula is so simple. Income minus your expenses equals your savings. That’s it. It’s as simple as that.

[00:31:11.800] – Joel

So okay, you got your day job. Okay, what else can we do? How can we increase income? He’s like, Well, I know somebody that’s got an installation company that maybe I can pick up some hours on the weekend. So $40,000, that’s three, three, three, three gross income per month. And he was saving zero %. So he went and got this job, worked weekends, and within two months, he was making an extra $2,000 a month. So when you do the math on that, after taxes, he was saving 20 % a month just by flipping that equation and focusing not on the expenses, but focusing on the income. And so he Saved money, paid off a couple of credit cards, got his scores up, bought his house, and then that stair-step method, bought a property for 150, saved up. A couple of years later, bought the next one at $250. Now, I’m using ground numbers that’s tied to the book. His story is different. So 150, 250, 350, 450. So that was year eight, seven and a half that he bought that fourth house. And then when you do the math on that over 30 years total from the very beginning, now I got to ask you the question.

[00:32:14.750] – Joel

Using, say, 4% house appreciation, what would you guess that portfolio would turn out to be over 30 years?

[00:32:21.620] – Sean

Multimillions.

[00:32:22.510] – Joel

Yeah. The number is like 3.1, depending on all the variables. So literally buying four houses could turn you into a millionaire. And it’s just like, okay, most of the people that are my age, I just turned 40. I got a group of people who… We just went to Mexico for our 40th birthday. And of all this group of seven, I’m the only one who’s got round properties. Everyone else has got family, job, 401(k), they’re good. And it’s like, 401(k), that’s all you got. You’re not really diversified. And I’ve helped some of these people buy houses, sell the house, get the cash, income ratios are in good shape, buy the next house, and you have more equity in the next house. Cool. So my path was different. I kept those properties. And that little bit of detail became the difference between having a portfolio or not. It’s like, what do you do on the second one? Do you keep it as a rental or do you sell it? And there’s no right or wrong answer. It’s just the path that I chose. And if somebody has that vision of going on the path, it’s just something to be aware of.

[00:33:16.610] – Joel

And when I talk about being creative in Gen Z, there’s people everywhere that are building agencies online. I’m helping somebody with their Facebook ads. I’m helping somebody with So editing videos, I’m helping somebody with copywriting, helping somebody with XYZ. There’s a way to be able to generate income. And I think that the people that I’m seeing get ahead that are younger are people that are focusing on these other income streams, which is what your show is about. And that’s why I believe that if somebody wants to do it, there’s a path to do it, but it’s not going to happen overnight. It’s a time thing.

[00:33:49.610] – Sean

Yeah, right. Love it. This is gold. Thanks for that insight. And you’re right with finding side hustles. Today, it’s so much easier. You can go to platforms like Upwork and start to put yourself out there. You can also figure out where do business people need the most help, and then go to them, try to solve that problem, whether it’s marketing. You mentioned marketing is big, Facebook ads, YouTube ads, Google ads. I think a podcast editing. It’s the most non-glamorous thing ever. Nobody wants to do it. Be the person that does the selling. Go to Upwork then. Have somebody do the editing. That’s what I do. I found great talent. I got a great team that has been able to help me build my business. Ricardo, he’s our editor. He’s fantastic. He’s been with Tykr for a few years. And it’s like, you can find awesome people to really accelerate, and they can be anywhere in the world. It’s beautiful.

[00:34:45.310] – Joel

I love it. One of the things I talk about is being stuck in the comfort zone. And when things are going good and you got everything you need, maybe you’ve got something that’s inside you. Yeah, I want more. Yeah, maybe I want to retire early. But it’s like, me personally, I look back and it’s like, I started these platforms literally like nine o’clock at night. And I had this vision of what I wanted to strive for 25 to be going back seven or eight years. And I’d done a couple of speeches and talks and got in front of groups talking about these concepts, but I hadn’t really done anything with it. So it had been inside me, but I did nothing. And then 2022 happened, and I saw the writing on the wall, and they, okay, what I’ve been doing in the past is not going to be good enough going forward. So if I don’t press on gas pedal, I don’t know how my life is going to look going forward with my job. And so I went down this path, started posting on Instagram with Strive 25, and then in September, started the podcast.

[00:35:43.050] – Joel

And that comfort zone, okay, I need to get going on this. And I’ve got kids, get up, get them to school, go to a job. My wife works as well. So she’s working till 6:00. So I got to pick the kids up at 5:00, get them dinner, play time, bath. And they want I want Daddy to sleep next to them until they go to sleep in the bedroom. So it was 8:30, rolls around. I’m laying on the ground for maybe an hour next to them, helping them go to sleep. And the wheels are turning in my brain. Okay, I need to get when they go to sleep, I need to get back to my computer, get back, I work on stuff. And that pressure of, okay, that means I have to ramp back up. When you’re laying on the ground for an hour, that energy is gone. This is good. There are days that I would do it, days that I wouldn’t do it. And that pressure, beating myself up, I got to this stuff done. That was killing me. Right place, right time, James cleared Atomic Habits. I heard about the book and I started reading it.

[00:36:39.330] – Joel

And one of the things that stood out to me that hit me hard was he talks about the two-minute rule. And He illustrates this person. He coached somebody to, Hey, if you want to build a habit, this is what I want you to do. I want you to go to the gym and I want you to just be there for two minutes. Don’t do anything. Don’t do any exercise. Just be there for two minutes, and then do it again tomorrow, and then I’m going to do it again tomorrow. And then I forget the exact time frame, but sooner or later it’s like, Okay, well, if I’m here, I need to go do some actual exercise. So they did it. And he uses the word mastering the art of showing up. And so I adopted that. So like, Okay, I’m going to turn on the Timer Timer, go to my computer, and then do something. That something was literally like one email. So then I turned off the Timer and it was the weirdest thing I’ve ever done. And I walked away, okay, this is weird. Okay. I did it again, and then I did it again.

[00:37:28.230] – Joel

And I did it again. And then I I’m thinking by day five, I’m doing that, I’m like, Okay, I’m here. I’m going to get to work. And by day 14, this is what blows me away. And one of the things I talk about is how the work in the process, it changes you. It’s not always about the information, but the process can change you because by day 14, that stress and that anxiety was gone. Now I was looking forward to doing that work, looking forward to opening the computer and figuring things out. I look back, I’m like, holy crap. That happened? And I think that was going on in June. And then July 12th is when I started posting on Instagram. September is when I started the podcast. And I just been going, I don’t have all the answers. I haven’t had all the answers. You don’t have to have all the answers. But by doing it and doing it, it sets yourself up to be able to get better down the road. And I’m just so thankful that I haven’t stopped.

[00:38:21.000] – Sean

Good for you. It’s like a procrastination breakthrough moment because there’s that anxiety first, and then you’re putting it off second. All right, I’ll get to it. No, I’ll worry about it tomorrow. But as soon as you get into that mode, that two-minute rule, I’ve actually never read the book. I got to check that out. But I get the principle. Just try it, all right? Two minutes, back off, next day, do it. I had a I do that with podcasting, too, to ramp up, stick to it, because you’re learning this because you’re fairly new here in the last year. But there’s a lot of podcasters, they don’t make it past two or three years. And they You don’t stick to it. And it’s like, I made the commitment, okay, it was one episode a week, now it’s two, now it’s up to three. But it’s like, All right, stick to it. This is the rhythm, and you’re not backing off the gas pedal. Let’s go. Yeah.

[00:39:14.670] – Joel

Question for you. What’s the one thing that you learned that never even entered your brain to even think about at the beginning?

[00:39:24.400] – Sean

About podcasting or just habits?

[00:39:26.900] – Joel

Yeah, about this journey. Yeah, the podcasting.

[00:39:29.370] – Sean

So What I learned, I had assumptions, and they turned out to be correct. I can drill into that a little bit. So two things, or two reasons I started the podcast. One was networking. You can’t get anywhere in this world alone. You have to be networking with people. And especially when I first started this with COVID, you can’t shake hands with people. So what do you do? So I knew networking was huge. What I guess I learned is on that note, it wasn’t just people around the States. I built friendships with people all around the world. It’s so cool. And I’m so thankful for that reason alone to start the podcast. Number two reason this was an assumption that turned out to be correct is we do promote Tykr on the podcast. We have a commercial or two, and we do get people trying out the platform. And we’re a free trial platform, low touch. So we do get leads, which is great. It worked out that way. So, yeah, the two assumptions turned out to be correct. The big surprise, a lot of fun meeting people all around the globe. That’s something special in itself.

[00:40:36.380] – Joel

Yeah, I totally agree. Finding your own tribe, a mantra, something that didn’t really hit home. And there’s somebody that I met on Twitter going down this journey that I currently am really good friends with. And now he’s got me on his YouTube channel. He’s building on. He’s got a a rotation of three people, and he has me come on. And it’s like, that person is in Hawaii, 4,000 miles away. And we’re now friends. It’s pretty cool.

[00:41:01.350] – Sean

That’s awesome. Well, this has been awesome, Joel. What I’d like to do next is transition to the rapid fire round. This is the part of the episode where we get to find out who Joel really is. If you can, try to answer each question in 15 seconds or less. You ready?

[00:41:15.280] – Joel

Ready.

[00:41:15.960] – Sean

All right. What is your favorite podcast?

[00:41:18.330] – Joel

It’s The Game by Alex Ramosi.

[00:41:21.080] – Sean

Okay, sure. All right. What is a recent book you read and would recommend?

[00:41:26.280] – Joel

The Book Winning by Tim Grover.

[00:41:29.710] – Sean

Never I read it. I have to check it out.

[00:41:32.320] – Joel

Yeah, it’s a bottom-line book because, again, Grover trained Jordan and Kobe. If you want to win, it just gets it to the bottom line. And yeah, it hits home for me.

[00:41:42.700] – Sean

That sounds like it’s right up my alley, actually. I’m going to add that to my… I’m on Amazon right now with your book teed up. So we got two books going to the cart as we speak. There we go. All right, next up. What is your favorite movie?

[00:41:56.080] – Joel

Man, not to be cliché, this is what comes to my brain. And I wouldn’t have said this probably 10 years ago, 20 years ago, but it’s so cliché. It’s Field of Dreams. Kevin Costner. If you’re going, you’ll come. Just James Jones. It’s nothing more than just like The message of… I played baseball growing up, so I love baseball. It’s special to me with the relationships. So that just book just stands it. The movie stands out.

[00:42:25.160] – Sean

I love that movie. Classic film. Have you ever been to the ballpark in Iowa? No. On.

[00:42:30.790] – Joel

That’d be cool someday.

[00:42:31.990] – Sean

I’ve got to go. Yeah, I’ve got some family in Dubuque area, and I think it’s just an hour away from there. But anyway, it’s like, you’ve got to go, Sean. If you’re down in Dubuque, you got to go. That’s cool. All right, next question. What is the worst advice you ever received.

[00:42:47.100] – Joel

Oh, shoot. Okay, this is so specific, so bear with me if this doesn’t make sense. Dude, you’re a mortgage person. What are you doing? That was said to me by somebody in my circle talking about the podcast. Dude, you’re just a mortgage person. Who do you think you are? Okay, I got you.

[00:43:04.870] – Sean

Okay.

[00:43:05.860] – Joel

Not really advice, just a statement.

[00:43:08.470] – Sean

Yeah, right. We’ll flip that equation. What is the best advice you ever received?

[00:43:12.670] – Joel

Oh, man. I mean, I’m going to say this out loud because it’s coming from Hormozi’s book, 100 Million Dollar Leads. If you want to be ultra-successful, it’s about give, give, give, give, give, give, give some more until they ask. If you can do that, if If you can figure out how to do that with your business, imagine how many people are going to see value in what you offer.

[00:43:35.190] – Sean

100 % agree. I love that. I actually just picked up that book two weeks ago sitting on my shelf. Haven’t opened it. Getting there. Yes.

[00:43:43.900] – Joel

It’s okay. There’s time.

[00:43:45.900] – Sean

I’m working through who, not how, as we speak.

[00:43:49.580] – Joel

Yeah. So that’s one of the books that I have in my… I have a morning routine where I read a couple of different things that I cycle through. And so that’s one of the books I’m starting to read in that routine. So yeah, I love that book so far.

[00:44:02.200] – Sean

Right on. All right, last question. If you could go back in time to give your younger self advice, what age would you visit and what would you say?

[00:44:12.070] – Joel

Damn, I hate this question. You said you didn’t want me to prep you, and you’re like, No, let’s get into it. I hate it because it’s hard. It’s hard because what’s going through my brain is, Okay, would I have actually listened to that person? Would I have actually taken the advice and done it? What could have been the most impactful? And Yeah. The best advice I could have given myself, it would have been in 2017. 2017, focused on the long term, not the short term. Very general. Very general. But what was going on in my life, I was doing some short term things that was a distraction that distracted me from what I could have been working on at the time.

[00:44:50.980] – Sean

Although it’s simple advice, I do love it because it’s a reminder for all of us to really think long term, especially with investing. I A lot of people are just, they get back into that short term habits, and that’s not going to do yourself any favors. Think long term, stick to the plan, stay disciplined. Things are going to pay off big.

[00:45:11.560] – Joel

I add on to that for one thing. Sure. So part of what I was talking about was the tip of the iceberg, the process of searching for an investment, searching for a real estate deal, searching for the right thing. I look back on things like, if I could have spent less time on that and more time on increasing increasing income or increasing skills to increase income, I would have gotten better return for that time. So that’s something that I really talk about, I think it’s important. The investing is the tip of the iceberg. That’s the result of all the work you put in ahead of time to have the confidence to let that money go and just let it ride.

[00:45:46.550] – Sean

Yeah, right on. All right. And where can the audience reach you?

[00:45:50.360] – Joel

The best way to get me is going to be on Instagram. So you can message me anytime. That’s me personally. It’s strivefor25, I think, underscore. Honestly, I forget what it is. But if you search strivefor25, that’s the underscore somewhere in there, but you’ll find me.

[00:46:03.660] – Sean

We’ll get all your links posted below, but thank you so much for your time. This is great.

[00:46:07.470] – Joel

Thanks, Sean. I appreciate it.

[00:46:08.590] – Sean

All right.

[00:46:09.000] – Joel

We’ll see you in a minute.

[00:46:10.010] – Sean

See you.

[00:46:10.540] – Joel

Hey, I’d like to say thank you for checking out this podcast.

[00:46:13.940] – Sean

I know there’s a lot of other podcasts out there you could be listening to, so thanks for spending some time with me. And if you have a moment, please head over to Apple Podcasts and leave a five-star review. The more reviews we get, especially five-star reviews, the higher this podcast will rank in Apple. So thanks for doing that. And remember, this show is for entertainment purposes only. If you heard any stocks mentioned on this podcast, please do not buy or sell those stocks based solely on what you hear. All right, thanks for your time. We’ll see you.