Show Summary

The Florida real estate market has come roaring back, and some of the investors that are doing the best are ones that lived through the roller coaster of the last 10 years, like Lex Levinrad. Investors like Lex were forced to work hard and get creative during the downturn, which hit Florida particularly hard, and those lessons are now paying off in a big way. Armed with lessons learned, Lex uses and teaches others many different exit strategies and tactics to run a successful real estate operation. In this FlipNerd.com Flip Show, Lex shares more about what it takes to be successful as a real estate investor in Florida.

Highlights of this show

  • Meet Lex Levinrad: Investor, Speaker, Author, Coach and Mentor.
  • Learn from lessons learned over the past few years, and how that’s allowed Lex to become a better real estate investor, and a better teacher.
  • Join the discussion on what it takes to be successful, no matter where you’re at.

Resources and Links from this show:

Listen to the Audio Version of this Episode

FlipNerd Show Transcript:

Mike Hambright: Welcome to the flipnerd.com podcast. This is your host, Mike Hambright, and on this show I will introduce you to VIPs in the real estate investing industry, as well as other interesting entrepreneurs whose stories and experiences can help you take your business to the next level. We have three new shows each week, which are available in the iTunes store, or by visiting flipnerd.com. So without further ado, let’s get started.

Hey, it’s Mike Hambright with flipnerd.com. Welcome back for another exciting VIP interview where I interview some of the most successful real estate investing experts and entrepreneurs in the industry to help you learn and grow.

Today, I’m joined by Lex Levinrad who’s a real estate investor, speaker, author, coach that teaches others how to successfully invest in real estate. Now, Lex is also the founder of the Distressed Real Estate Institute, and today we’re going to talk about successfully investing in Florida real estate. Before we get started, though, let’s take a moment to recognize our featured sponsors.

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We’d also like to thank National Real Estate Insurance Group, the nation’s leading provider of insurance to the residential real estate investor market. From individual properties to large scale investors, National Real Estate Insurance Group is ready to serve you.

Please note, the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions as real estate investing can be risky.

Mike Hambright: Hey, Lex. Welcome to the show.

Lex Levinrad: Thanks for having me, Mike.

Mike Hambright: Yeah, yeah. Glad you’re here. So, for those that don’t know you, why don’t you take a moment to kind of introduce yourself and really even go back to the beginning. I know you haven’t been investing in real estate for longer than me, but only 10 or 11 years, but kind of talk about how you got into real estate before we go too much further.

Lex Levinrad: Okay. Well, I started in Florida real estate in 2003 and prior to that, I was a stockbroker for 12 years and I got pretty much, let’s say, wiped out in March of 2000 when NASDAQ tech crashed. From that I started getting interested in real estate. Ironically, the first book I read was “Rich Dad, Poor Dad,” and I bought a Carlton Sheet’s infomercial on late night TV and from there I started going to couple of boot camps like Robert Allen, etc., and decided that I wanted to get into real estate. I came to Florida in 2003 and I was very fortunate to meet a guy who also became a good personal friend of mine and he became essentially the guy who taught me the business, my mentor.

I worked for him for two years, for him and his partner, and they taught me pretty much everything I needed to know about investing in real estate, fixing, flipping, wholesaling. We were doing a lot of buying and landlording and that’s how I got into the business.

Mike Hambright: Yeah, yeah. And then talk about how you’ve kind of evolved from getting in to where you are now because I know you’ve got… you’re basically taking over the world with your empire. So just talk about kind of how you transitioned to where you are today. And then I know, from my own instance I know, as you kind of grow, you get to a logical step where you’re like it makes sense to bolt that on. I mean whether it’s economic sense or just, “Hey, we’re not using these leads,” or “People keep asking me to do this, but I don’t do it, so let’s do it.” I know you’ve effectively kind of bolted other things on as you’ve grown. Talk a little bit about that.

Lex Levinrad: Well, what happened is effectively, when I started out, we had hurricanes that came in in 2004, 2005, 2006, so we were primarily running ads saying, “We buy hurricane-damaged houses for cash,” and we were coming in, we were buying these houses and assuming their mortgages. And then we were just fixing them up and we were going to the bank and refinancing them. So we were essentially holding a rental portfolio.

At one point, we were actually the largest landlords; myself and the two guys that trained me in that county. And that was great as long as the banks were giving money. You know, the banks would give them blanket portfolio loans across the board and you just had a blank checkbook to buy more properties.

But that all changed in ’07 when the market started coming back and we saw it initially with initial price drops. And then the next thing was the banks pulling their portfolio loans, and when that happened that’s when we realized, you know, even if we have private lenders that are funding our purchases and everything was funded by private lenders, many of them from my stockbrokerage days, and now we started saying, “Well, how are we going to pay these people their money back in three years when their note is due?” And from that we evolved to fixing the properties and starting to put them back on the market.

Mike Hambright: Yeah.

Lex Levinrad: And then we noticed the price of it dropping so quickly that we said, “Let’s just move these properties real quick before they drop anymore,” and then we started adding on the wholesaling component. So we evolved from landlording, to fixing and flipping, and then to wholesaling. And then from there we kind of melded all of them together when the market started picking back up in 2009. We opened up the Distressed Real Estate Institute in 2008, and by 2009 we did our first boot camp and pretty much telling people you got to get into real estate and we started buying again for the purposes of holding and selling some of them, keeping some of them as rentals, selling some of them lease/option seller finance.

As our inventory and our demand and appetite for buying became larger, we got to the point where we couldn’t manage all of them as rehabs or even as rentals. So it became easier to just wholesale most of our investors and that’s where the wholesaling component really grew.

Mike Hambright: Yeah.

Lex Levinrad: At the same time, there was wholesale dumping by all these banks and that’s where the whole component of, “Hey, we need guys. We need bird dogs out in the field to get these deals.”

Mike Hambright: Yeah.

Lex Levinrad: And that’s how that whole, you know, partnership program arose essentially.

Mike Hambright: Yeah. So talk a little bit about… I mean, I’m not the only one, a lot of folks have always preached to people the importance of having multiple exit strategies and kind of a lot of these, a cheesy cliché, a lot tools in your tool bag about how… I don’t get too exotic, but I think that’s even more important in markets like Florida, in which you’ve been through over the last few years, but just talk about your kind of philosophy on the importance of having multiple exit strategies or a lot of different ways to make money so you can ebb and flow as the market changes.

Lex Levinrad: Okay, so what you’re talking about now is like really, really critical stuff because my experience has been, and you know this, of course, with your experience working with your… in real estate with your business that many people cannot close on a property because they don’t have access to capital.

So if you have the abilities, you have access to capital, then you can choose which houses you have under contract that you actually want to close on and hold on the books, and sometimes you’ll hold them on the books for a month or two and then you’ll sell them for a profit.

And if you’re borrowing at a reasonable interest rate, your cost of holding that property for a couple of months is miniscule compared to the profit you can make on it. If you have additional exit strategies, like, for example, you’re willing to fix it up, throw a tenant in there, and now you can sell it, sell it as a turnkey property.

If you’re willing to just do what we call, “lipstick on a pig,” like just basic paint and tile and clean it up a little bit, you might be able to move it for 10, 15,000 more than what we paid for it.

So you have to have the ability to close and you have to have an exit that will work for you. So we incorporated a lot of the lease options and seller financing. Dodd-Frank changed that quite a bit in January. We used to do a lot of seller financing to owner/occupants. Now it’s changed with doing more turnkey seller financing to landlords.

Mike Hambright: Okay.

Lex Levinrad: So we’ll buy a bank-owned property, we’ll clean it up, we’ll throw a tenant in there, and then we sell it with seller financing to someone who’s a newer real instate investor who wants to get into being a landlord and will have a healthy profit margin built into that deal.

Mike Hambright: Yep, yep. So I know you teach people in a number of areas; wholesaling, rehabbing and things like that. Talk a little bit about, and you kind of alluded to it a little bit about why you started wholesaling more when prices were decreasing because you didn’t want to effectively get stuck holding the hot potato and I understand that. But talk a little bit about strategically, in your business, how you decide what exit strategy you’re going to use when you buy a house.

Lex Levinrad: Okay. So, first of all, what happened in 2007, 2008 market, you know, it’s great to buy property and buy more and more and more and rent it out, but when you have a lot of homes you can get to the point where the insurance, and the taxes, and repairs, and the maintenance, and the vacancies can really, really get to you.

Mike Hambright: Yeah.

Lex Levinrad: And also, if you’ve been landlording as long as I have, the tenants can get to you, too.

Mike Hambright: Yeah.

Lex Levinrad: So having a strategy, I like to call it like the rule of thirds. You know if I fix and flip a third of the houses and I hold as rental a third of the houses and then a wholesale to balance it it’s a healthy strategy. But what happens in reality is that if you’ve built a relationship, let’s say, with an REO listing broker and then they know that you’re going to buy inventory, they’ll start bringing you their deals. And if you’re going to shy away and not close, they’re going to bring them to someone else. But if they get paid that commission check each time, they’re going to close.

So for me, the only thing that matters is if the house is a decent deal. If the house is worth a hundred and I can buy it for 70 and it’s decent shape, CBS, you know, decent area that I know well, I’m going to take the house down. I’ll worry about the lenders, I’ll worry about the exit strategy afterwards because I know that there’s 30,000 of equity in there.

So whether I buy it and keep it as a rental, whether I fix and flip it to an investor, whether I rent it and turnkey it, or whether I do a lease/option, I know that there’s an exit strategy that will make money.

Mike Hambright: Yeah, yeah. And talk a little bit about, since you teach it to a lot of people, about why most people tend to start off with wholesaling.

Lex Levinrad: Well, you know, I mean it all starts really if you go to the book store and you look in the real estate section, probably 80% of the books are talking about wholesaling. Wholesaling is a natural appeal to people because if you’re broke and you don’t have any money, what could be more appealing than to say, “Hey, I’ll show you how to make money with no money.”

Mike Hambright: Right.

Lex Levinrad: So that’s been kind of the appeal of our partnership program because we’re telling them, “All you have to do is just get a house under contract and we’ll flip it for you to a buyer.” That’s very appealing for new investors.

Also, I think it’s really a great way to learn because if you had capital in your account and you just got a little interest in real estate and you ran out there and bought the first house that came along you might make a real bad mistake.

Mike Hambright: Right.

Lex Levinrad: But if you don’t have cash and you’ve got to go out and borrow, let’s say, from a hard-money lender, they’re not going to loan you if it’s a bad deal. And if you get a house under contract and you’re trying to wholesale it to someone and a cash buyer doesn’t want it, well, then, guess what, it’s probably not as good of a deal as you thought it was because, if it was and you got a big buyer’s list, why is no one buying it?

Mike Hambright: Right.

Lex Levinrad: So it’s a great way for you to learn that. Once you learn and you know your markets and you know, “Hey, I can buy this market for 80 and I can sell this market for 110 or 120,” and you know your repairs, etc., then you can feel a little bit more comfortable and you can close with cash, you can close with borrowing and you know that, “Hey, worst case scenario, I can throw this on the MLS and I can probably at least make $10,000.”

Mike Hambright: Right.

Lex Levinrad: But for most new investors that sounds like a very scary proposition. In fact, even signing a purchase contract for most new investors is a very scary proposition that…

Mike Hambright: Absolutely, yeah.

Lex Levinrad: The biggest fear that new investors have is they are afraid to make offers, they’re afraid to talk to realtors on the phone, you know, and those of some of the things, those are some of the obstacles that they need to figure out how to get through in order to get houses.

But really the most important thing to me is knowing how to identify a deal. That’s hands down the most important.

Mike Hambright: Absolutely, absolutely. I know you talked early on about the way that you got started was you had some folks that mentored you and kind of showed you the business and helped you through. And I think that provides a lot of comfort for new investors is, “Hey, is there somebody I can call and talk to about a deal?” The reality is after somebody does a few deals, they don’t need that help nearly so much and a lot of it is just the confidence. Right?

Lex Levinrad: Absolutely.

Mike Hambright: Yeah.

Lex Levinrad: Absolutely.

Mike Hambright: Yeah. Talk about kind of what having a mentor… I mean you would never would be where you are today if you didn’t have that, I assume.

Lex Levinrad: Absolutely not. In fact, in my home study course when you open it up on the acknowledgement page right on the beginning, I acknowledge the two guys that have trained me because, you know, one of them taught me everything about rehabs and repairs, and he used to renovate huge hotels, and the other one’s a real estate attorney and he taught me everything about contracts and notes, making offers, talking to realtors, you name it.

So together I got a very valuable lesson from working with both of these guys and I worked for them for two years. In other words, what I did was find deals for them and bring it to them and they paid me a fee of $5,000 and they kept the house. I didn’t have any additional profit in the house, but it was great because when I got a deal and I brought it to them and they didn’t want it I’d say, “Why not?” and I’d learn.

And when I brought a deal and they said, “That’s fantastic, ” sometimes I think, “Why did you like that? It looked marginal to me,” and I’d learn their thinking process. And when I’d go out in the car with them, we’d drive out and I’d see them, you know, visit 15 rentals in one day. I’d say to myself, “You know, how can these guys that are 40 years old own so many houses? How is that physically possible,” because I don’t understand the concept between, you know, how they were financing, etc., etc.

But once you start realizing what they’re doing, it’s not really that complicated of a business. It’s actually quite a simple business. There’s a lot of people out there that are new investors that have high IRAs, they have home equity lines of credit that could be doing this and the only thing stopping them is education and fear and having a mentor, having someone to teach you…

Mike Hambright: Right.

Lex Levinrad: … is really the difference between overcoming that fear and doing something with it or not acting upon it.

Mike Hambright: Yeah, yeah. I don’t ask you this for some sort of softball for those that are listening, but, you know, in terms of finding a mentor, because you mentor folks, I do too. But what advice would you give to people what to look for in a good mentor, somebody that can really help you get started?

Lex Levinrad: Okay. So I would say one thing that’s very important is someone who works in your market is very, very important because it doesn’t help to be only working at one market and work with someone who’s never worked in your market or worked in a different state. I would say that if your focus is to learn landlording then get a mentor that specializes in that. If your focus is wholesaling, get a mentor that specializes in that. In other words, get a coach and a mentor that’s an expert in your field, and I think that that’s really a key criteria and that’s really what separates a lot of the programs that are out there that people might not necessarily be in the field every day doing deals like the way we are.

Mike Hambright: Yeah. And, I think, you know, my advice is that folks seem to be more comfortable paying a ton of money to get more and more training, but they’re opposed to maybe splitting the profit on a deal to where they’re going to get the best education by actually doing a deal. Right?

Lex Levinrad: Right. And I see that all the time.

Mike Hambright: Yep. Yep. Awesome. So, and talk a little bit about how things have changed over the past few years in Florida and how… I mean, the market has obviously just roared back and Florida is hot, but I assume somewhere along the lines there you started to get real comfortable with rehabbing again. And, you know, the market where I’m at has gotten so hot that we’re doing more of, you called it putting lipstick on a pig, sometimes we use the PC term of wholetaling, I mean, yeah, wholetaling so we’re kind of cleaning it up a little bit and putting it on the MLS and passing a deal along to somebody else. Not always, but we don’t feel like, because the market is so hot, that we have to put in all the bells and whistles necessarily anymore because there’s less. It’s a seller’s market now. But just talk about how things have evolved there in Florida and where you see things going.

Lex Levinrad: Well, they’ve evolved a lot because I mean in local markets, you know, we’re picking up houses back on ’09 for $35,000 that were 3/2s, concrete block homes, you know, good rentals and those same homes today are going for double that price.

Mike Hambright: Yeah.

Lex Levinrad: And I see that in a lot of the markets. I’d say that on average the pricing in the lower end at the lower price spectrum has doubled approximately. Now what we’re running into is the lack of inventory and there’s more buyers than there are deals.

Mike Hambright: Yeah.

Lex Levinrad: And so that’s, you know, a key concern because now we have, you know, hedge funds. I’ve got a hedge fund from Brazil that wants to buy 500 homes in the next 18 months and my struggle is to give them the inventory. There’s so many buyers and that’s causing pricing to move up, so much so that in some cases I’m seeing the comps lagging a little bit to what’s really going on because if you’re online on these auction sites and you’re betting all day on multiple sites like, you know, HomeSearch and Auction and sites like that, then you see what things are going for in certain markets.

Mike Hambright: Right.

Lex Levinrad: And the pricing, right now, that I’m seeing in some markets is up by $10,000 in just 30, 40 days.

Mike Hambright: Yeah.

Lex Levinrad: So people are bidding things up and the expectation is that prices are rising. So I think right now it’s much more dangerous to not buy than it is to buy because if you buy, by the time you close and by the time you get done with your rehab, is a fairly decent expectation that prices will have moved up.

Mike Hambright: Yeah, yeah. Do you see that? I mean that’s what got a lot of people… you got to be careful there, too. Right? A lot of people felt that way in Florida. I mean back in, you know, ’05, ’06 it almost made sense to sit on properties because the appreciation was higher than your interest cost. So you’ve got to be careful there somewhere. I mean, where do you see things going?

Lex Levinrad: Well, you know, that’s kind of like a little difficult one because I’m not a crystal ball, but if I were to take a gander at guessing it, I would say that, generally speaking, historically real estate prices have run in cycles of 10 years up and five years down. You know, we peaked in ’89 and we bottomed in ’94 and then we peaked again in ’06 and we bottomed again around 2010, ’11. So I would say, using those numbers, we could have a good seven, eight years still left on it. So a lot of people come to me and say, “You know, I’m afraid to buy at 75 because I saw that at 35,” and I say to them, “Well, how will you feel if it’s 130 in two years?” And I think that those numbers are very doable because if you look at past historical moves, you know, a house that was worth 300 dropped down to 35 and went back up to 70, but it would really have to get closer to its previous peak on a rent multiple for it to be getting really scary.

So I would say that we still have a couple of good years and it’s a great time. I mean for someone who wants to get now just to buy a rental, for example, …

Mike Hambright: Yeah.

Lex Levinrad: … this is one of the best times I can ever remember to get into rentals. I mean the vacancies are almost zero, the cash flow’s fantastic and, you know, I don’t think there’s an asset class out there that can compete with that right now.

Mike Hambright: Right, right. And that’s true, some of what’s pushing prices up is just all the institutional buying and international money is big in Florida. Right?

Lex Levinrad: Right. Absolutely. And we have probably 55 to 60% of our houses are sold to foreigners, to non-U.S. buyers. Yeah.

Mike Hambright: Wow.

Lex Levinrad: So, and they have cash. We’ve got a weak U.S. dollar, inflated real estate prices in many countries like Australia and China, Israel, many, many places. A lot of places that are worried about their currency and they decide to liquidate where they live and invest over here. So we’re having a lot of buyers coming in from Europe, Italy, France, Russia, South America, all over the world that are looking to buy real estate and they view these prices as cheap.

Mike Hambright: Yeah.

Lex Levinrad: And they’re really the ones, between them and the institutions, those are the ones that are really pushing the prices up. Not the local mom and pop investors.

Mike Hambright: Right, right. And, Lex, you have a property management company, as well, right? Do you manage your own rentals?

Lex Levinrad: We do. We do manage of our own rentals. We don’t do property management for outside people. We only do it in-house for our own properties.

Mike Hambright: I see.

Lex Levinrad: But, yeah, we do do property management.

Mike Hambright: So give some advice on property management in Florida. I mean like personally I don’t ever want to manage my own rentals, I have outsourced that and we’ve got a very good solution. I know a lot of people struggle to find that good solution, but just talk about, and in context of your opportunity costs as a real estate investor, because for some folks it doesn’t make sense to do that internally when your time is better spent doing something else. Talk about, in the context of that, and why you’ve chosen to do it internally.

Lex Levinrad: Well, I think that it’s an example of a business that needs to be scalable. It doesn’t make sense to do it yourself if you’re doing a few, but if you’re buying, let’s say, 25 houses and you can put a guy in one of those houses to live rent-free and you can give him maybe a few thousand dollars a month and he can be in charge of all the other 24 if anything breaks, going out there and fixing them and also making sure that all the rents are paid, etc., if you combine that with someone that can show the properly like a realtor and an office that can do all the accounting and track the insurance and rents collected and property taxes, then you can streamline it. But, like I said, for the average small investor, you know, it’s easier to just outsource it.

But there’s also a big difference, I think between commercial and single-family.

Mike Hambright: Sure.

Lex Levinrad: I think that in commercial it’s a lot easier to outsource than in single-family because a lot of realtors don’t make that much money from, you know, a $1,200 rental with a 10% fee, they make $120 a month and that’s not really high priority for them…

Mike Hambright: Right.

Lex Levinrad: … when they’re working on making it a 6% commission on a $500,000 house which would be $30,000.

Mike Hambright: Right.

Lex Levinrad: So in that kind of scenario they might put your rental on the backburner, whereas if you’re in charge of it yourself and you have an office that has systems in place where as you get a new property, you call a guy, fix it up, put it on Craigslist, put it GoSection8, Classified Ad, and then have a system to screen them, give them rental application, and get it rented, you can streamline that process and make it easier.

Mike Hambright: Okay. Okay. And so, Les, you obviously specialize, I know you work with people all over the country, but your specialty is kind of South Florida and throughout Florida, what advice would you give to people who are looking to get started in investing in Florida?

Lex Levinrad: Well, I would say the first thing is learn your market and the best way to do this is by wholesaling because if you can learn what it’s going to cost to buy these houses and you can figure out what they’re worth, then you can see how much spread there is. You also need to know what it will cost to repair them. I think if you had those three components; where you can buy them at, what they’ll be worth fixed up, and how much it will cost to fix them up, then it’s a very profitable business, as you already know.

Mike Hambright: Yep. Yep. And, in terms of, talk about some of the other things people need to consider if they want to get started and they truly want to build a business rather than have a hobby.

Lex Levinrad: Well, you see, now you’re touching on a very, very important point because the guy that trained me, you know, he was initially a friend and he hired a few people in the neighborhood before me. I think 15 or 16 people and made it materialize that well and I turned it into, obviously, something a lot larger, but the thing is, one of the things he said to me, on the first time I met him, I actually begged him, I literally begged him for three months to teach me. And we became friends. We’d go on a cruise with the families together. You know, his wife is friendly with my wife, and so forth.

And I would beg him and he would say, “No. You know, just stick to the stocks. We’re friends. I don’t want to mix friends with business.” And then finally one day he said, “You know what? If you want to do this, come into my office on Monday morning.” And I did and when I came in and he said, “Listen, I want you to give me six weeks. You’re not going to get paid. I’m going to teach you what I can and at the end of the six weeks you’ll either tell me, ‘I hate this and I want to quit,’ or you’ll tell me, ‘Wow. This is fun and I love it.’”

So I rode out my six weeks and just turned out that I loved it, even though I didn’t get a deal on those first six weeks, I made no money, but I enjoyed it. I saw the potential of the business.

Mike Hambright: Yeah.

Lex Levinrad: And on that first day that he brought me and he said, “Listen to me, this is not a hobby, this is not a part-time thing, this is the only thing.” So, in other words, the biggest mistake I think a lot of people getting into this business is that they might be unhappy with how much money they make or the fact that they hate their job or the fact that they work too many hours and they’re underpaid or they don’t have enough time to be with their family and they have too much debt and all those things that initially attracted them to real estate, but they’re really looking for like a get rich quick kind of scenario.

Mike Hambright: Right.

Lex Levinrad: And, you know, in my experience that doesn’t really exist. In my experience you have to learn the basics of the business. You have to understand the fundamentals of why wholesaling exists, why can you buy a property for less than what it’s worth, and understand what you’re buying them for, what it’ll cost to fix, what you can sell them for. But when they… if they’re willing to put that education in, for some people it could be a four or five, six-week learning curve, for some people it could be six months or a year. But if they can get through that learning curve, and there’s a lot of ifs in that because they, you know, have to be able to spend some time doing it, but if they can and they just get through to the other side and they do their first deal, let’s say, they flip their first house, and then they make 5, 8, 10, $20,000, for many people they’re hooked and they just go and quit their jobs just like I did and go and do it full time because it’s an extremely lucrative business.

I mean if you can flip 20 houses a month and you make $5,000 average per house you’re making a good living, very good living compared to most other professions, and also considering that you can, you know, start at 10:00 or 11:00 in morning if you want and you’re hours are flexible. It’s a pretty good way to make a living.

Mike Hambright: Yeah.

Lex Levinrad: But you do need to know what you’re doing and you can’t expect to just jump into it. The way I like to compare it is I tell people, “Listen, if you wanted to go and buy a Subway franchise, as an example, you’d have to pay $250,000, another 250 to build it out, and you’d be working real hard to make 8 or $10,000 a month and you’d start every morning at 5:00 in the morning baking bread and you’d have no weekends and you’d probably work until 10:00 at night, all to make 8 or $10,000. And I say to them, “Well, what if I could show you how to make 8 or $10,000 and you didn’t have to spend 250 and you could work half of those hours and you could hang out with your family on weekend?”

Mike Hambright: Right.

Lex Levinrad: Because that’s, to me, the appeal of learning this business.

Mike Hambright: Yeah. I don’t think anybody gets into real estate investing for the houses per se. It’s, hopefully, the lifestyle that it will provide.

Lex Levinrad: Correct. Exactly. And it can be phenomenal, it can be absolutely phenomenal because, you know, I’ve got a young kid who’s 28 years old, he’s flipped, I think, 181 houses this year and he only got into wholesaling two years ago.

Mike Hambright: Wow.

Lex Levinrad: This kid’s making tons of money, he’s having a great time, he works off a cell phone at Starbucks, flexible, you know, no overhead, and it can be a really good way to make a living.

Mike Hambright: Yeah. Yep, absolutely. Well, I know you teach a lot of people in Florida, and really throughout the country, about how to wholesale and rehab and really just how to be successful in real estate investing, and I know you have a number of training programs and things like that. If folks want to learn more about you, where should they go?

Lex Levinrad: Well, we have our Distressed boot camp every October and May, and you can learn more about that on our website, which is lexlevinrad.com, and they can also call our office at 800-617-2884.

Mike Hambright: Okay. Any final words of advice for our listeners here on just how to kind of take action and get out there and make it happen?

Lex Levinrad: Well, here’s what I’ll tell you, you know, you can go out there, as mentioned before, Mike, you can go out there and you can sign up for programs and I like to use a funny example with my students. I say, “Listen, I can watch a P90X commercial on TV and I can see that guy and his abs of steel and I could say, “Wow, I’d really like to have those abs of steel.” Right? And then I can spend $130 on my credit card and they’ll ship me the DVDs, and I might put it in and watch about 30 minutes and then forget about it and put it up on the shelf and not do anything with it.

But, unfortunately, that’s what most people do with real estate courses because they think, “Hey, you know, this is so great, it’s so empowering, let me pull out the credit card and I’ll spend some money.” And then once they’ve spent their money it’s just suddenly, miraculously going happen. But it’s not because you’re going to have to actually read the material, learn it, you’re going to have to overcome your fear of picking up the phone, calling realtors, making offers. And I think the hardest thing for people to understand is that they’re so used to trading their time for a paycheck, they’re so used to showing up at a job and from 9:00 to 5:00 and then getting a check for those hours worked, that the concept of working for a week and not getting any money for many people is a allusive.

Mike Hambright: Right.

Lex Levinrad: And so many of them will quit after a week or two or three and they just won’t give it the time. That’s why we have a T-shirt in-house, and that we give it to our students, and it says, you know, “You need to learn how to stop trading your time for a paycheck.” You know, if you can work for three weeks and then get one deal and make $30,000 on it, that’s better than showing up at a job and making $10, $12 an hour or whatever it is that you make. So we teach people how to understand that concept. But it’s really a mind shift for people to understand that. If you’ve spent your whole life working on a paycheck, it’s just very hard to understand that shift.

Mike Hambright: Right, right. Awesome, Lex. Well, we’ll add the links and the phone number you gave down below the video here, so if anybody who wants to learn more about Lex and some of the great things they’re doing down in Florida, look him up.

So, Lex, hey, thanks so much for your time today.

Lex Levinrad: Hey, thank you very much for having me.

Mike Hambright: Appreciate you.

Thanks for joining us on today’s flipnerd.com podcast. To listen to more of our shows and hear from incredible guests, please access all of our podcasts in the iTunes store. You can also watch the video versions of our shows by visiting us at flipnerd.com.