Real estate investing is hard work, which is the opposite of what many newbies generally believe. To be successful and create a sustainable real estate investing business, you need to do whatever it takes to make it work. In this interview, Jimmy Tu and Christy-Ann Olivares share more on what it takes, even if you’re in the most difficult market in the country. Don’t miss this FlipNerd.com VIP Flip Show.
Mike: Welcome to the FlipNerd.com podcast. This is your host, Mike Hambright and on this show I will introduce you to VIP’s 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. Welcome back for another exciting FlipNerd VIP flip show. Today I have with me Christy-Ann Olivares and Jimmy Tu, who are a couple that invest in the Bay Area. We’re going to talk about some of the challenges of investing in the San Francisco Bay Area, which is probably the most competitive marketplace in the country. And some of the lessons that we’re going to learn there are about how if you could survive there, you could survive anywhere.
So, this is really a lesson in how to be successful in real estate investing anywhere in the country. They’re also the founders of the, San Francisco Bay REIA and we’re going to talk about that a little bit as well. Before we get started though, let’s take a moment to recognize our featured sponsors.
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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: Hey Jimmy and Christy, welcome to the show.
Jimmy: Hey, hey.
Christy: Thanks for having us, Mike.
Mike: How are you guys?
Jimmy: [inaudible 00:02:17]
Mike: I’m glad you guys are on. So, for those that don’t know you, talk a little bit about how you got started in real estate investing. I already know it’s an interesting story, it’s like a lot of folks like myself, you leave the corporate world and jump in with both feet and find a way to be successful. But tell us a little bit about each of you guys and how you got started as real estate investors.
Christy: I met Jimmy, this was back in 2007 and one of our passions was real estate investing. We were trying to find ways to get started and Jimmy and I, we would attend other REIA groups as well, and finally one day he gave me a phone call during his lunch break, and we signed up for the Robert Allen Institute.
Jimmy: Yeah, it’s a pretty interesting story. Actually, Christy was involved with real estate in her early teens as well. I was working for a broker when I was pretty young, the tender age of 16, I believe. I was one of the top earners for during the time, the business was hot, I’d cold call and talk to potential clients that we’d get them to re-fi.
Mike: You were in the mortgage business.
Jimmy: Exactly. So, beyond that I really didn’t know much about real estate. It was more or less, “Man I want to get into it but I have to have a ton of money to get started.” Or, what my parents would do is buy a property and rent it out and that’s, all I knew. And it wasn’t until.
Mike: That was all in the Bay Area?
Jimmy: Yes. It wasn’t until I met this lovely young lady here that . . . we’ve always had some sort of drive to say, “Hey, there’s got to be a better way.” So, like Christy mentioned, Christy and I signed up for a three-day teaser class. That was during lunchtime and I came back to the office and found out that my department wasn’t going to be around anymore. So, rather than mope about it, I looked at it as an opportunity and said, “Hey you know, maybe this is a calling. Let me give this real estate thing a shot.” And went and had some tequila and drinks later on that day and it was pretty much sink or swim, Mike.
I took the three-day course and although they didn’t give me all the strategies and such, it gave me enough to say, “Hey, this is what I want to do.” So, I took out whatever I had in my 401(k) at the time, which was like a 101(k). And so, it was really sink or swim. I have quite a bit of responsibilities being a single child taking care of my single mom as well, so that was the driving force behind us getting into the business.
Mike: I talk about this a number of times, and not to rehash my story again whether you guys know it or not, but a lot of folks that have been successful in real estate came to a point where failure just was not an option.
Mike: Whether it’s you just had a child or a parent, you have to take care of a parent or a spouse, or whatever it might be it’s just not an option. And I think a reason why maybe a lot of folks are not successful is they’re not backed into a proverbial corner. They don’t like their job but at least it seems safe. Seems safe, right? There’s no such thing as a safe job anymore, but it’s easy for folks to fall back and say, “I’m comfortable here, there’s no perceived risk.”
But talk a little bit about some of the things I want to talk to you about is how challenging it is in the Bay Area to be successful as a real estate investor. Of course, when you get a deal, the deals are some of the highest priced deals in the country so you have the potential to make some very real money, but talk a little bit about how you overcame some obstacles, had to be successful in probably the toughest market in the country.
Jimmy: Yeah. I think, when we initially first got started, Mike, one of the things that they taught us how to do was go out and make a bunch of offers on MLS listed properties. So, me not knowing any better, that’s what we did. And at the time I was fortunate enough to meet an up and coming realtor, real estate agent in the area. And bless his heart, he was very patient and that’s what we did. We went out and made hundreds and hundreds of offers. So, we didn’t, land anything significant until six months later. And as you can imagine, all sorts of things are going through my head. “Wow, will this even work, we’re six months in, I haven’t found anything yet.”
Christy: And we’re running out of his money from the 401(k).
Jimmy: It’s scary times. I think part of it was we persevered and we eventually got a lead on a property that was in probate actually in the Berkeley area. And it was an interesting story. It was a property that was owned by the guy’s mother and she had passed away and he was a few payments behind. We had gone out to the property looked at it, assessed the repairs, it was in really bad shape. It needed foundation, pretty much a complete gut job, and, we were able to . . . actually he had a property that he owned in Texas in the Fort Worth Area, so it was just a matter of catching up on the payments and making sure everything was on the up and up and we were about to put together an agreement and that was our first deal.
But had we not been persistent and hung in there. I could see why a lot of people give up, especially in our market, with so many, with such a high demand. You’re competing with the hedge funds guys, you’re also competing with the dot-commers. There’s so any people looking for inventory, there’s just not enough of it.
Mike: Absolutely. And your area is a lot like — there are other areas that are like this but — the areas that were undesirable 10 or 20 years ago are new again, are hot again, right?
Jimmy: Yeah. Exactly. There are actually some parts now that were complete – you wouldn’t even want to go there a couple of years ago in the daytime, and they’re turning them around. It’s different demographics of people and a change in the area, people starting to develop, and a lot of changes going on here in the Bay Area.
Mike: Yeah. So, talk a little bit about . . . what I’m hoping to get out of talking to you guys is I talk to a lot of folks about how to be successful in real estate investing and it always takes a mindset that you’ll do whatever it takes to be successful; I’m going to make this work. Failure is not an option. I know that is harder in your market that in most markets, but it’s difficult everywhere. So, talk a little bit about the mindset that it takes for somebody that has an interest in getting in. Unfortunately, I think a lot of the late night TV, with the TV shows, they tend to make it look like it’s easy. And you and I both know that it’s not.
Christy: It’s very difficult. We’re only human. We do have daily rituals. Every morning we say our daily meditations, our morning meditations, our affirmations, and always give thanks. Even when a deal doesn’t go through, there’s always a lesson learned. Not every deal is a deal, so if it doesn’t work out, you just have to keep on moving and find the next deal that comes along. You don’t want to waste your energy on that deal that’s not working and trying to figure out why it’s not working.
Jimmy: I think for the most part Mike, it’s like what Christy says it’s tuning your energies to the right point, keeping yourself in line and grounded. Both Christy and I, we wake up in the morning, we have our routines, which help us stay focus and in line and clears us up for the day. And part of it is, and I think that’s one of the things that we’ve learned from one of our great mentors, Sean Terry, is having, being in line spiritually and giving back.
And so, I think part of it is really important and just, being able to persevere. And like you mentioned Mike, I think the downfall is a lot of the people that see the shows on TV, the late-night infomercials, you could be a millionaire in a month; it’s just not realistic. And myself being a coach and mentor as well, I always advocate that the process is simple but it takes a lot of hard work. So, that’s what people that are looking to get into the business is it really is a lot of hard work. However, once you get that going and you systematize things, things become a lot easier.
Jimmy: It still requires work.
Jimmy: And I think they fail to mention that and people get started in some of these programs, they get caught up in the glitz and glamour of what they see in the infomercials et cetera.
Mike: Right, so talk about one of the challenges that I think real estate investors have everywhere in the country is people to talk to. The challenge is mot real estate investors see everybody as competition, and so they don’t share ideas. And that’s why having a mentor, or being part of a mastermind group are much more commonly, being part of a great REIA club, is such an important thing.
And I know that you guys ultimately just started your own REIA club, maybe for one reason or another you decided to start one rather than attend one. But talk a little bit about why you started your REIA club and the importance of REIA clubs in general for real estate investors that are looking to get started.
Christy: Just like you said yourself, Mike, some people don’t have experts to talk to, and you can never be successful by yourself. Even when you’re constructing a deal, you have your real estate investors, you have your representatives at the title company, so there’s everybody working together in order to get a deal done. Another reason we stated the REIA group was to help other investors build their own power team, and also build relationships as well if they’ve been in the business for quite a while.
Jimmy: And I think for the most part Mike, we wanted to create a different format. Part of which when we were first out, getting started was we would attended REIA groups, we would read as much as we could, constantly staying educated and trying to stay ahead of the curve. And part of it is surrounding yourself with like-minded individuals, people that are out there, movers and shakers, as well and connecting, with those people.
And there’s a lot of great groups in the Bay Area and we really wanted to create a format that was a little different that was geared towards networking and deal-making. And we have a great turnout, different people in all walks of the business, from title people, agents, real estate agents, wholesalers, investors, attorneys, contractors, you name it. So, it’s really a great way — it’s like a one-stop shop to be able to build your, power team, connect with other people that are actually out there doing things, and it’s a different format. And we’ve gotten a lot of really good, positive feedback from the group and it constantly continues to grow this day.
Mike: From somebody that has both attended other groups and then ultimately, started your own, how long have you been running your group?
Christy: Four years.
Mike: That’s great. And about how many members do you have roughly?
Christy: On our meetup group we have over 300 and then about 15% attend our group.
Mike: For folks that are looking to get started, they’re looking for a REIA club to call their home, what would you say they should look for in a good REIA club?
Jimmy: I think one that provides an education format but at the same time allows people to connect and share ideas. I think those are some of my top three, if I were to say. Anything you want to add on that.
Christy: Yeah. Anybody is looking for a REIA group, it depends what they’re looking for. If they’re looking for more education, normally, we don’t, have that type of structure, we’re not that structural type of REIA group but I’m not in this business for competition. I’m friends with other REIA founders as well, so I’ll even refer them to go to other group in the Bay Area.
But if they’re looking for to strictly network in a casual setting, they’re always welcome to join us. Sometimes I get phone calls from members, and they let me know that they’re not able to attend the REIA group for this month. But I always let them know that it’s okay. I’m always going to be there for you. We’re going to be there for you every month, and anytime you need anything from us whether it be a real estate attorney, or a title company representative just give me a call. So our REIA members are able to reach out to us even if they’re not attending the event.
Mike: So, give that you talked about a number of things, but what’s the overall advice you’d give somebody that is looking to get started in real estate, or they started but they’re struggling to have the wherewithal and fire in the belly, and some of the tips you would give folks to get them realigned, if you will, and focus on the prize.
Christy: For the new investors, I would suggest for them to master one area first, master one niche. Like Jimmy said, don’t get distracted by all the shiny objects. Maybe one day you might be interested in wholesaling, and then another day you might think that rehabbing is good for you. Or you might be interested in investing in real estate paper, so it’s a matter of mastering one area. If you’ve been in the, business for so long, or quite a while, I would say, the mindset. That’s the most important, to stay consistent.
Jimmy: For myself, I would say, first off, know you’re “why.” And just realize that you are going to hit bumps in the road, but take it as a lesson. And I think for them most part, just knowing your why, doing whatever it takes, I know it sounds cliche, I know it sounds easier said than done at time because – god knows – I just have that burning something inside me that kept me pushing forward. And just knowing what that is, is key.
It all goes back to mindset, Mike. Once you figure out and say, this is the reason why I’m doing it, whether it be my kids, whether it be I’m taking care of grandma or I have a wife or whatever your why is, realize what that is, continue to educate yourself and just go out there and do it. You can study all the courses you want, you can read but without actually going out and applying the education, it’s as good as the book on the shelf.
So, if there was any advice I’d give to anybody, it’s really knowing your “why”, going out there, applying what you learned, mastering your market, and mastering one niche. Don’t get caught in all the strategies and shiny objects out there, focus on one thing, get really, good at it. And then at that point, once you’ve systematized your business, and you have that specific area, then you can start looking at other strategies and things.
Mike: Sure, and that’s great advice. What would you guys say, because obviously at one point you evolved to do some mentoring, start the REIA club, things like that. I’m sure your REIA club has evolved over time in terms of how you focus. And for me one of the thing that I’ve found is this can be a lonely business, if you don’t find a way to surround yourself with others. And if you don’t find a way to give back and share your knowledge, you start to — at least for me personally — you get to a plateau where by most people’s definition, you’re successful, but internally you start to feel like something’s missing. They think I’m successful, but I don’t feel successful. You have to find some other way to take it to another level.
Some people do it to make money and that becomes their whole business. There’s nothing wrong with that. Some people do it to find other deals. For me, it’s more of, my mentoring is a business. I have to make money doing it because I have an opportunity cost with what I do with my time, but it provides a level of enrichment to see other people’s successful based off of you helping them in some way. Sometimes it’s a very small way, but talk a little bit about how and when you guys felt like, in order to take it to another level, I need to share my knowledge or surround myself with other people.
Jimmy: For me it was when we were first getting started, Mike, when we were going out networking, not everybody has the same mindset. Like you said, some people have the scarcity mindset of, “Hey this is my competition. Go figure it out.” And so, fortunately I was able to meet some really great people that shared everything that they knew. And I think for myself one of the things that I observed when going to different groups was if I ever get to that level where I have knowledge to be able to pass on to somebody else, I want to do that. Because I know how it feels to look for education, or look for answers, but how people turn their back on you.
So, I made a subconscious promise to myself that once I had the knowledge to share with somebody else, that I would do that. And that’s what I’m doing today and I find that it enlightens me because seeing somebody succeed, seeing somebody get their first deal done, seeing their face when they get the check, once they realize that it’s real, I can’t, even describe that feeling because I remember the feeling when I got my first check and being able to see somebody’s face light up when that happens and knowing that their lives have changed forever. That means a great deal to me.
Mike: Yeah, awesome.
Christy: One of the times that I felt empty inside and not successful and everybody saw us as successful was, it felt like we were having a drought in our business. We weren’t having deals coming in, and maybe part of it was marketing; we weren’t doing enough marketing. However, I also found out about tithing which is a biblical form where you give 10% of your, earnings to your soul purpose, to anything that feeds your soul. It could be your favorite church, your favorite charity, or any angels that come your way. It could be a waitress at a restaurant that’s giving you the, best customer service ever, and you just want to give them a really, big, fat tip.
I’ve learned about it before getting started in the real estate business, but when it took us six months to land our first deal and we got our first paycheck, the first thing we did was spend it. Go on vacation, go to Hawaii. I forget about tithing and we were so happy. And then, all of the sudden, things started changing and now that we apply tithing in our business, in our personal life, it really changes everything. Money just, flows like energy.
And you get back 10 fold of what you give, but you have to give wholeheartedly without a grudging heart. Because in the beginning I would clench my teeth every time I would give away my check and I’m blocking that energy. But now that I apply it wholeheartedly and I just love giving back. There’s no . . . it’s not fun being on top by yourself. Like you said, it does get lonely, but if your purpose also is to give back, it will definitely fill that hole in your heart.
Mike: That’s great, Christy. I appreciate you sharing that. I think this is one of those businesses where when you’re able to give back, especially by teaching other people how to do this, real estate, for people who learn how to make it work, is a life- changer. There are folks that can do far better than they could being an employee of somebody else, and they tend to be big ticket items, so it’s life-changing moments. So, I think that’s what makes it fun, when you can share that with somebody else.
Mike: Well, tell us, how folks who want to learn more about the San Francisco Bay REIA, where do they go to learn more.
Jimmy: Well, they can visit us on meetup.com/sfbaREIA. And just go on register, you can register for free, and you’ll get notifications on our monthly events and we hope to see you there.
Mike: Awesome I have a link down below the video as well.
Mike: Well, guys, it was a pleasure meeting you today. We definitely appreciate your insights and your experiences, and I think this is going to benefit some other folks, hearing your stories, too. So, thanks so much for joining us today.
Jimmy: No problem, thank you so much, Mike.
Mike: Stay in touch, we wish you all the best.
Christy: It’s an honor.
Mike: Thank you guys, take care.
Mike: 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 on our iTunes store. You can also watch the video versions of our shows by visiting us at FlipNerd.com.