Curious about how real estate can grow your wealth? Get ready to have all your questions answered as we chat with Brandy Williams Harrington, a seasoned broker and investor with an impressive 15-year stint in the real estate industry. Her insights into different types of real estate investment - from residential properties to Airbnb rentals - are a goldmine for those eager to diversify their investment portfolio. With real estate promising better returns compared to traditional methods, there's a lot to gain from understanding the nitty-gritty of property investments.
Our conversation doesn't stop at that. We also delve into managing personal income in real estate investing and the steps you can take to kick start your journey. Emphasizing the importance of self-education, professional guidance, and realistic expectations, we aim to equip you with the knowledge to navigate the real estate market confidently. Plus, we share effective investment strategies, discussing everything from understanding the importance of numbers, partnering with seasoned agents, to considering property management. This episode is a rich resource for anyone looking to step into the world of real estate investing. Whether you're a novice or an experienced investor, there's something for everyone.
Join the The Financial Moment community on:
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Website
Email: info@thefinancialmoment.com
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Curious about how real estate can grow your wealth? Get ready to have all your questions answered as we chat with Brandy Williams Harrington, a seasoned broker and investor with an impressive 15-year stint in the real estate industry. Her insights into different types of real estate investment - from residential properties to Airbnb rentals - are a goldmine for those eager to diversify their investment portfolio. With real estate promising better returns compared to traditional methods, there's a lot to gain from understanding the nitty-gritty of property investments.
Our conversation doesn't stop at that. We also delve into managing personal income in real estate investing and the steps you can take to kick start your journey. Emphasizing the importance of self-education, professional guidance, and realistic expectations, we aim to equip you with the knowledge to navigate the real estate market confidently. Plus, we share effective investment strategies, discussing everything from understanding the importance of numbers, partnering with seasoned agents, to considering property management. This episode is a rich resource for anyone looking to step into the world of real estate investing. Whether you're a novice or an experienced investor, there's something for everyone.
Join the The Financial Moment community on:
Instagram
Facebook
Website
Email: info@thefinancialmoment.com
Grab this FREE guide with 10 easy tips to keep your budget on track!
Submit guest suggestions HERE
Hello everyone. My name is Carolyn. Welcome to the Saving for your First Home podcast. I am the CEO of the Financial Moment. We offer money coaching for those who are ready and willing to make financial changes in their lives.
Speaker 1:For the most of us, there comes a point in time where we think to ourselves it would be really nice to own property, but it sometimes can feel like a pipe dream and not very easily obtainable. So I created this podcast to give you all the information and tools you need to take the steps forward toward home ownership. Take it from me my husband and I started our lives together, working part-time jobs with a young child. Fast forward, through many hiccups and failures, we stepped our feet into our very first home. For us it was a pile of dirt, but eventually our family home was built on that dirt. Now we are in the midst of growing our investment property portfolio. I created the savings for your first home podcast to give you easy, actionable tools for you to do the same. If you have that same gut feeling that I did and want to create a life for yourself and your growing family, but don't know where to start, you are in the right place. Let's do this.
Speaker 1:Hello everyone, welcome back to the Saving for your First Home podcast. Now, today is kind of a bittersweet day. This is our 60th episode and we are going to making a shift in our podcast. I have enjoyed so much providing information on how you can save for this big purchase that comes around in your life, and I hope you've enjoyed all of the information and the special guests that I have brought on to the show to really give you as much information to go ahead and start planning to purchase that property. But, like everything in life, sometimes we need a shift, and so this will mark the last episode of what you know as the saving for your first home podcast. I will still be continuing with the podcast, it'll just have a little bit of a different look and flair. So look forward to that next Thursday as we launch our new series. But I can't go out without a bang.
Speaker 1:So today I am excited to welcome on another guest, and her name is Brandy Williams Harrington, and she is a highly dedicated investment broker, developer, real estate advocate with more than 15 years of experience in the real estate investment industry. Now, she's originally from Chicago, but Brandy's interest in real estate was peaked by watching her grandmother manage rental properties. Despite having no coaches or mentors, her first venture into real estate investment led to a loss of her entire portfolio. However, she reentered the industry two years later with a fresh mindset and strategy which enabled her to invest and grow her portfolio. So now Brandy is well versed in buying and flipping, owner financing and wholesaling real estate investments. So please welcome her to the show.
Speaker 1:I am so excited today to invite Brandy onto the saving for your first home podcast. She is a broker and an investor and is going to drop some serious knowledge for us. So we got some questions for her and I'm super excited to learn tons of stuff about the real estate investing market. We talk a lot about on this show buying your first home, but you know, sometimes we need to level up right and think about how we can actually improve our investment portfolios, and so Brandy is going to give us tons of information about that. Welcome, brandy.
Speaker 2:Thank you so much, carol, for having me on your show. I'm super excited to be here. I'm excited to share with you all things investing, so absolutely All right cool.
Speaker 1:So just give me an example or provide me with a kind of an overview of real estate investing, and why should people really add this as an addition to their investment portfolio?
Speaker 2:Well, it's a little stuff, and let's think about real estate. I know you do a lot with regards to first time home and ownership and I think that's an amazing job, so thank you so much for spreading more attention to value there. But let's just say, for whatever reason, you are ready to step up into the real estate investment market, and you're like you know, I want to diversify. You know things are not making my money.
Speaker 2:Sitting in the bank is not necessarily growing right, but with real estate investing, you can actually get a better ROI, or return on investment when you are into real estate investing, and it's been said that mostly all your millionaires have some form of real estate investment. So guess what? There is some truth in there. So real estate investing is a huge opportunity to grow your network and your money and your income, and so this is one of the ways to do it. I like to tell people that, with regards to real estate investment, obviously you have your traditional house that you own, but when you're in investing, there's so many things you can do from rentals, you can do wholesaling, you can do flips, you can buy and hold. There's a whole lot of other different things that can grow your wealth while someone else is actually helping you to build, pay down that debt and or ensure that you're able to do more diversification within your real estate investing.
Speaker 1:Absolutely. I mean, what kind of investment can you think of where someone else is actually contributing towards it? Right?
Speaker 2:Exactly and all you have to do is just basically just collect that money. And it's really a cycle where we're seeing time and time again, but it's tried and true, you don't have to necessarily do anything that has not been done. And I think that's the real reason why real estate investment works so well is that we've seen it and it's been an investment that we know that you pretty much. When I say real estate, it's definitely something that's constant.
Speaker 1:And if we think about real estate investing, are there different types, like I know? Like obviously we're talking about residential but there must be other things that are involved.
Speaker 2:Absolutely. I mean, there's obviously everyone knows about the residential side, which is the whole. The buy and flips, the Airbnb's, is another form of real estate investment. There is, obviously, the long and short term rentals as well, but then there's commercial real estate investment. There are things that you could do from a commercial standpoint. If you have People renting out certain things within a commercial space, you're actually returning Money when you do that as well, as there's industrial rental space as well as Ritz, and so that is when you're actually allowing companies to operate and finance different deals that they feel are be very good for you, and it's really passive because you don't get a chance to be more hands-on, but it definitely helps bring in additional income for people who like that type of real estate investment.
Speaker 1:That's good, because then we were hitting all the spectrums right. We're putting people that are risk-adverse and, you know, just want to put your money in a little gild dabble, and then you're hitting people that really want to jump in full force and Monitor and do everything themselves. So it really is a big Range of type of investments that you can actually think about.
Speaker 2:Yes, I think it's just for people who, depending on how their risk tolerance level, it really is like I don't know if I'm super ready to do all of this, but let me put my foot in to your point and I think that's where the benefits of real estate allows you that flexibility. People really have to think about their risk tolerance because, again, I will not say that with real estate investment there will not be guarantees and there won't be any risk. No one, I think whatever, should tell you that. But if they've told you that, run number one, yeah, but never to be in realistic.
Speaker 2:That is a risk but at the end of the day your reward, depending on the risk, outweighs. You know the the hesitancy that we typically see with investing.
Speaker 1:And now I think what also contributes to the risk is market conditions, and so right now it's a really kind of an interesting time that we're in right, and so how does that kind of affect the real?
Speaker 2:So I'll be completely honest right now, being in that real estate investment for marketing conditions is impacting Obviously, no matter if you're a residential or commercial. We're seeing it on both sides and it's impacting it greatly. I'll be completely honest, and we've seen what happened when the interest rates was at a 2% Right right and the frenzy it created and it did so much where people were, everyone was super excited. It's like everyone gets a house right but we weren't ready and there's not enough inventory for that type of Market conditions. And now I get people are like well, you know, I'm waiting for those days to return.
Speaker 1:I Don't think we're gonna see yeah.
Speaker 2:I know people don't want to hear that, but no, that in itself was a is a rarity. Unfortunately, I just have to share that with someone earlier that I don't think we may see two and a half three percent the market conditions based on what we're hearing. We literally would again have another frenzy. We're not prepared for where we are now, and so how can people think that we're gonna see it again when we weren't ready for that?
Speaker 1:And so.
Speaker 2:I get. People are ready to jump into this investment market or buying a purchase house, but so much went on with that that it be set up you can't do that anymore. But specifically now we're seeing high interest rates. So now everyone is like, oh, I'm not spending any money, right, and I get that, and then it reduces how much property and things that you can buy. So from our investment standpoint, we're seeing investors like, do I really want to do this? Because again it's costing them more money to borrow to do the type of Investments as on you start looking yet from a cap rate and and those type of rates that your indicators are Marking you to, and you're not seeing where you normally should land.
Speaker 2:It starts making people really wonder if this real estate investment is going to give produce the yield they really want. And that's a scary part, because real estate has always been a more of a safe. You know, done right, you should be able to see the returns. So when you have high interest rates, you have all of these different factors that goes into the making Analysis for people to be able to project their RRIs and their cap rate and I are all these other different rates we can go through and you're not seeing that, because again it gets scary. Then it makes some of our investors start and say, hmm, I wonder if I should do this, or let me see if this is really what I'm Going to yield. So right now, I like to sell me, no matter what, if the property is there and it meets everything else While I get that it is a little bit more expensive what you can always refinance with that property still be there, though, and that's what you have to think about.
Speaker 1:Yeah, that's a really good point because you know an investment is an investment. If the numbers were working for you, regardless of what the industry currently is, things will change right, and so maybe you're not making as much right now, but maybe there's a potential to make more in the future. So it's really about kind of, you know, mitigating your risks, right? So is there a specific way that we can? Or? I know you talked about some of the different indicators, but is there something that we should really look out for if we're trying to mitigate risk?
Speaker 2:So that's gonna vary, but of course you definitely can think of a couple indicators. You gotta really think about market risk. I mean, I think everyone knows that of course the market is going to be what the market is going to do. Now how do you mitigate market risk? Well, a Crystal ball will tell you, just by low and the time is right. But what if there's not the court case?
Speaker 2:I think you really have to look at diversifying your property and those type of properties in order to really help Understand market conditions. Maybe you don't put everything into, maybe commercial, maybe the commercial industry is not doing the best, maybe residential is a little bit more steady and have better ROI for you. So maybe from a market conditions, you will look and diversify that. I think that helps you be able to not Put everything in one particular Component which would then unfortunately give you Some numbers that may not be the best that you really would like to you. And I think you have to be able to know from liquidity type of avenue, what would that look like for you? What does that really look like for you to be able to say you know what, maybe after this hold a little bit longer, maybe I would have to be able to not get a higher buy-of-hand people telling me why I need to produce a 12 15% ROI on this.
Speaker 2:I'm like you may not get that this year. You may have to understand that that's just the reality of what we're dealing with, because at the end of the day, it's not realistic because again, your Interest rates is affecting that and impacting that, and then you also have to think about interest rate. I think that's a different risk that most people don't think about, but again, that ability to come and at a different time, renegotiate lords that. To help you understand that. Okay, well, maybe I'm not seeing it, but in time I will be able to get whatever that number looks like, whatever your Management team have yielded. Then that may be something you need to look into and maybe just wait also something to think about is the financing.
Speaker 1:Now for my listeners, I am sure they are super novice and so they're think just thinking about how do I even get into this Real estate investing situation. So what would be the advice you would give to someone who's fairly novice and Wants to get some financing to do this type of investment?
Speaker 2:So that's a great question. I'm asked that pretty much regularly like how do I start right for people who are just trying to get into the market? And I think, again, I'm a real estate broker, so I'm gonna start from what my knowledge is and how I got into it and then we give you all the obviously the ways you can do this. I really started with my own income and most people was like, oh my gosh, you should never do that. Well, for me, I didn't know. Again, I started.
Speaker 2:I've gotten Licensed since, so I know a lot more, but at the time I didn't really know how to get into the market. So I use my own income, which, for novice Entry-level individuals utilizing home equity lines he locked lines, that's your income that you have, maybe a savings account, using that income to buy at least your first one right. Start getting comfortable with understanding exactly what that process looks like Understanding purchasing or property repairs, what your property management fees all those things are gonna come into knowing what you were doing your first one. So you need to be able to understanding, you have to educate yourself. You really have to know that. This is super important. It's not something just jumping in. I know people make it look so easy.
Speaker 2:But, you know how, that you know and I learned all of these things with, again, my own income and I would idea is just take my own income and made myself alone. I use my own money as my collateral to go to the bank to say, hey, I want to borrow against my own money. So I became my own bank. So guess who's going to pay yourself back first?
Speaker 1:You are Exactly.
Speaker 2:For me that work, and so that's how I started my career. So now there's obviously all kind of ways to be able to help you do that without that, but it helped me understand the value of again what my money was looking like, the value of all the things that I wanted to do. I had all these grandiose I had, and it's like you know, I'm paying for this right and it's a little bit, you know, different when it's not just given to you. Yes, I'm still paying it back, but again, how much money do I personally have? And then how do I be able to maximize that based on me putting my own money up and I think that was a good way for me to be able to market but at the same time, making sure that I could be able to obviously pay the loan back. But, more importantly, make sure I knew the dollar and how it impacts what my decision making skills will be.
Speaker 2:And I think that's one thing that people who need to know from a novice standpoint is really understanding those different concepts from research, from education, making sure you really are hiring people who have been in the game, because it changes and there's certain things that you there are constant, but there are certain things you just have to know, and if you're not just getting into real estate investment while it does produce a lot of different things you have to have a baseline and somewhere to help you understand. Okay, following these worlds leads me to this success, and that's one of the great things that you'll learn when you do it and you are utilizing your own income to get there.
Speaker 1:Yeah, you made a great point about the value of a dollar right. I think sometimes borrowed funds can sometimes not feel like it's tangible right, and so when you're only using your own money and you work for it, it's your income and you're putting it on the line. All of a sudden, now you're more careful about how you spend it, you're more careful about what you're going to do, and so it's a great point, because we teach that not just real estate investing, but even for your day to day spending right.
Speaker 2:And I think the reality is start small. I mean, people want to get these. Oh, I'm going to go out and buy 20 houses. Wait a minute, you know. You know one goes because you may not want to be that aggressive and that hands on. Maybe this was just like, hey, let me hurry up and make my money back and not say, okay, let me get a more passive approach. But you will not, won't know that until you start small. And I think that's one thing that people I've told people all the time don't think that you have to go buy this four flex or six plus eight plus right now, because you have to understand that that four or six flex is not funding or it's not producing the right number, just stuck with that huge debt that you've taken on. I understand there's so many different creative financing terms thrown out to people, but you all still think about the mortgage has to be paid.
Speaker 1:Absolutely.
Speaker 2:People don't think about these things. They just think, oh, I can make X amount when I get it up and running. Yes, when it's up and running, mm. Hmm, when it's running, exactly. I still think about it has to be up and running. How is going to cost per unit? What is that looking like? How long is the contract are going to be in there? What materials are going to do? What is that paint costing you? I mean, I can go on and on and you're like what? Yeah, and it is going to cost X amount. And if you're, you put this money, think about it. Where is that money coming from? You purchase it, repair it, exactly the return, and people don't hear all of those different things. No, you don't understand the nuances of what that may look like and I think we don't overstate that enough.
Speaker 1:I'm not hearing people.
Speaker 2:I'm saying be very much aware of it. Don't think, because you close Monday, that you have this huge amount of money that's going to come on on two weeks from now.
Speaker 1:Exactly.
Speaker 2:You still have to market. You still have to do background. Your property managers still have to do their due diligence. It's still so many other things that goes into this particular arena that most people overlook and it gloss over their like influences here on this particular market. Oh yes, you're going to make all this money.
Speaker 1:No.
Speaker 2:Not yet, exactly Not yet, but that's great. So that's that's my best advice for people.
Speaker 1:No, it's so true because unrealistic expectations, right, because they see these things online and you think, wow, if I get into it, you know next month I'm going to be like raking it in and it just doesn't happen. It's actually probably going to be the opposite, because most of the cost come up front, right, just like you said. So it's a great point taken. So, having said that, do you personally have any stories could be about good or bad that you want to share? That would get a give a light on how this can go down in a good way or bad way it can be either.
Speaker 2:You know what I'll tell you about. When I first got into a real estate investment, it was a bad and I like to share this because I, like people, know this is the real, the reality of what can happen.
Speaker 2:So this is my second time into the real estate investment world and my first time was because I did got into real estate investment. I was super green, didn't know anything and I just bought up all these properties. I was under the impression like, oh, these are great numbers and this is a great deal in this house, not doing my due diligence and research. So I had several properties that I took on ownership of and in doing that, they were the properties were over inflated.
Speaker 1:Okay.
Speaker 2:So I had mortgages on each one of these properties and this was the crash of 08. And then when people started to move out of the properties, of course I was trying to work to get these properties back, like a loan modification. I was working through those different steps but guess what, when they went out to do the appraisals, they were like these numbers are not real, they're not there. And so when one or two people started moving out again I have mortgages. I still was not generating enough to cover when those tenants moved out and it's like a domino effect and I was like what happened here and it was just in the blink of an eye. And again I was like most people. I jumped in here first of all like three or four or five properties at one time, like they're good, they're cash flowing and they were going really well and then it just stopped and there was no well again.
Speaker 2:There was an OA crash. But once I went through that I lost my entire portfolio and I was like I'm done with real estate. My credit plummeted it. I just was very upset. I just thought life would have ended faithfully, because I was like oh my gosh, how did I get in here? And I vowed never to get back into real estate investment Wow. Here you are Now here.
Speaker 2:I am back and I'm happy to tell people I own multiple properties. I now have redone everything because again I understand now the value of that, starting with one again.
Speaker 2:but I didn't get a different mindset. I did a different approach and in doing so now, on multiple properties and about 60 acres of land, we're doing some commercials, things that the portfolio is really great now. But again it started from that one of getting back into the investment arena but making sure I understood my numbers, understanding the value of again that dog that we talked about earlier and how to be able to do that in a manner where it makes sense. It's not unrealistic to be able to get a return now that may be a little lower than I anticipated, but over time it grows, it definitely gets better and so I think that's one of the great things. That was in terms of a story where it could have went either way but thankfully it turned.
Speaker 2:But again it calls me not knowing my numbers, not understanding my capital, not understanding how to get into the entry. How much am I spending for this property? What does that really look like? How can I track and monitor my expenses and repairs, property management fees, et cetera, and stuff like that. So those things differently matters numbers, numbers, numbers. One plus one is always going to be two guys. I don't care what people say If one plus one is never three, meaning you're not going to exponentiate and grow in 12 months. It's just not going to happen.
Speaker 2:Not that. So that's what I'd like to tell you.
Speaker 1:It's a great lesson, because really knowing your numbers is going to kid, tip you the right way and the wrong way. If you ignore them, it's going to tip you the wrong way, and if you understand them, you know what you're getting into, and so that's a really good point and I'm glad to hear you got back in.
Speaker 2:I was like I'm done. But when he was like no, you're not, I think it really just stems from my upbringing and just being around it so much and saying you know, it's like you just didn't know what you didn't know, but it does help people understand that, even if you have at moment, it doesn't last forever and, at the same time, realizing that things happen even to good people who do everything right.
Speaker 2:But it means that you learn from it, and that's one of the things that no one can ever take from me. More importantly, it helps me be able to help have this real list of conversation with investors and people who want to get into this industry and be very transparent about it and help them understand the value that it exists with. If it doesn't go this way, it's okay too, but guess what? We can bounce back, and we just learned to pivot and make the next step the better one, because now we have all the information on how to be able to spend from this and take this one moment in time where it wasn't the best, but what we can do to make it better if we decide to get back on this horse again and decide to do back in the real estate investing Absolutely, absolutely.
Speaker 1:So, which also leads me to your expertise. Like how do you find you? You know what I mean. Like, how do you reach out and get this information? Again, the listeners are pretty much novice, so what do we do?
Speaker 2:So, in general, I would tell you to partner with a good real estate agent or broker in your area who is well versed in real estate investing. I think that's really the best way. There's obviously several YouTube, Google it's like Dr Google, right and they're good. The reason why I like to say have someone in your local area and markets, because you can get the expertise from someone who's local. I think that's super critical. I think there's so many things that you could put on online. That sounds good and it might be. I'm not saying it's not, but is it? You know, can you validate those numbers in your market? Are those numbers realistic in your market? Because at my market is the best, but my price point to entry is, let's say, in California, $600,000.
Speaker 2:Right, you know is that number realistic? If you get this property right, like let's just start there, would you yield the type of results I think people have to really stop listening to not saying. Stop listening to people, but stop listening to people that may not be in their market, for their number only and not say, okay, that is a number I could probably show. That's what I strive for. But is this realistic in my market or for the market that I'm going to invest in? And I think that helps you be more knowledgeable because you can see that it's possible.
Speaker 2:But if you're not going to do due diligence to hire the right property managers in that particular market, if you have the same different experiences with the contractors and the different nuances that goes with permits and stuff, you may not see that are a lot. Maybe they have enough people on the grounds to do that. You have to grow into that, especially when you have these huge portfolios and they can leverage certain things. I think you just have to be realistic with that and knowing that you in your market, this is where you're going to be. What is realistic that I can be able to expect from a return if I was to invest in your market?
Speaker 1:Yeah, and also, you know people tend to invest or want to invest where they live, which could be a city center, but maybe that's not a practical place to invest because, like you said, places that are in big cities tend to be a lot more expensive, and so right. And then they think, okay, well, I'll just go a little bit outside the city now. But then there's so many other factors. Do you have a property manager? Do you have? You know the contractors? Do you know the area? You know? What about a renter? Is it going to be difficult to find renters in that neighborhood?
Speaker 2:And I think people really have to understand that from a property management side, we own a property management company, but I have investors that call and their expectations is that we just do all these things and we're producing all these things for people and it's just going to happen overnight. I'm like whoa, it doesn't quite work that way. And I think to your point. Like you said, you have to realize that a lot of time and expertise goes into this. This is it's a skill set, but at the same time, we want to make sure that you're getting what you're wanting in terms of your monthly income. But we need to be able to have a product and service that be able to give these tenants the assurance that they want to stay in. Your unit is well kept, you do the repairs, and so there's that balance there, right, and you have to pay for that service.
Speaker 2:And I think when you're starting a real estate investment, you have to realize you have to account for that service and really properly pay and screen that property management company to give you that type of red. They're rolling out their red carpet service. Yeah, get that return. And I think that's one thing people have to realize because if you self-manage and you don't know what you're doing. You could literally, oh my goodness, get in trouble with Rental laws and do certain things that people don't even think about, like, oh, I'm supposed to do this. Yeah, I think that's just something people have to think about after you know what happens after I buy the investment sale.
Speaker 2:That's something people need to research as well, and having the person in local who can help them will be a huge plus to get that information as well.
Speaker 1:Oh, my goodness, this has been so great. You have shed so much light on this topic that people are not really that familiar with, so I do appreciate you coming on the show and providing all your knowledge, and we will definitely drop your link in our show notes. So if anybody wants to reach out to Brandy, please do. She is exceptional when it comes to her knowledge and her expertise.
Speaker 2:Oh, you're welcome. Thank you so very much for having me. I'm super excited. Again, I can say I just want to be able to get people a fair and balanced and a realistic approach. So if I can be of any service, please let me know. So thank you again for having me on your show.
Speaker 1:Absolutely. Thank you again.
Speaker 2:You're welcome, thank you.
Speaker 1:All right, take care Bye.
Speaker 2:Bye.
Speaker 1:Well, there you have it. That wraps up the saving for your first home podcast. Again, it has been my pleasure to bring you all the information you need to buy your first home, but don't leave us just yet, because it's time to elevate your paycheck. That is the name of our new podcast Elevate your paycheck. It is going to be filled with tips and hacks and ways that you can really maximize your money. So tell a friend to tell a friend to tell their friend that it is time to elevate your paycheck at the same time and the same place. See you soon. Thank you for listening. We are committed to helping you place your very first steps into your new home. See you next time.