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Crushing Your Real Estate Investing Goals with Podcaster and Author Josiah Smelser

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In this episode, Jeff interviews Josiah Smelser, host of The Daily Real Estate Investor podcast, and author of the new book “Dream It and Build It: How to Crush Your Real Estate Investing Goals.” In this conversation, Jeff and Josiah discuss how Josiah has created a strong, synergistic business partnership, how he and his partner set a stretch goal for 2019 and crushed it, how to strike a balance between making a living and doing long-term investing, and how to make the transition from investing in single-family homes to much larger apartment complexes with multiple partners.

Episode Transcript

Jeff Stephens 

Before we jump in to today’s episode, I want to tell you about something new. And something cool that we just made for you. I wrote it myself. Now, here’s my assumption, if you are listening to this podcast, it probably means that you want to build long term wealth with a rental real estate portfolio. And you would probably like to do it with some creative financing. And as I talk to people who want to do that, I know a lot of questions come up. And I thought there’s really no great single resource that really captures the entire picture of how that works. But I have solved that problem because I have written a new PDF that is just for you. And it’s called the step by step guide to buying your first or next rental property without relying on a lender to approve you for alone. Like I said, I wrote this thing myself. And if I do say so myself, it’s pretty thorough. And in this, you’re going to learn a few things. I’m going to teach you about the three key strategies to find and negotiate quality off market real estate deals that nobody else even knows are for sale. I’m going to teach you about what I call the YESSES Framework for getting off market sellers to accept your offers. And then I’m also going to teach you the 11 simple steps that you need to take to get your first or your next deal accepted without needing to go to a bank and apply for a loan and just hope that they give it to you. So if you would like to get this free downloadable PDF, just go to rental wealth guide.com and you can download it right now, www.rentalwealthguide.com and get your download of the step by step guide to buying your first or next rental property without relying on a lender to approve you for a loan. Now on with the show.

Successful real estate investing isn’t all about we buy houses and motivated sellers. That’s the lowbrow approach, and it gets real estate investing a slimy reputation. Gross. There is a better way, a more genuine human approach. We are thoughtful real estate entrepreneurs and this is Sleaze Free Real Estate Investing.

This is Jeff from the Thoughtful Real Estate Entrepreneur. Welcome to episode number 28 of Sleaze Free Real Estate Investing, a show for those of us who never have felt at home in the We Buy Houses crowd. In this show, we take a stand against what we call the lowbrow approach, the mainstream guru seminar distressed seller approach that ends up giving real estate investors a slimy reputation. Instead, we discuss the strategies, tactics and philosophies we call the thoughtful way and enlightened approach to real estate entrepreneurship that focuses on constantly sharpening the sophisticated real estate entrepreneurs three most critical capabilities, seller relations skills, deal architecture, skills and opportunity vision. When all three of these capabilities are successfully in motion, you can make an excellent living today and build long term wealth, while creating value for everybody that you touch along the way. Show notes for today’s episode are at thoughtfulre.com/e28. Please do yourself a big favor do us a big favor as well hit the subscribe button in your podcast app. Right now, before you go on any further. In today’s episode, we have a special interview with guest Josiah Smelser. Now, you might remember Josiah interviewed me recently on his podcast, which is called the daily real estate investor podcast. So Josiah is a podcast host. He is, of course, first and foremost a fellow real estate investor. And he’s also author of a brand-new book called dream it and build it, how to crush your real estate investing goals. Now in this conversation in this episode, Josiah, and I have a great discussion about lots of different things, including how he and his partner have created a way of working so well together and really synergistically complementing each other how he and his partner set a stretch goal for 2019 and ended up not only meeting it, but crushing it. beyond their expectations. We talked about the balance between making a living and doing long term investing and the way that he approaches that and making the transition from single family home investments to much larger apartment complex deals with multiple partners. And of course, a whole lot more. I want to know there are a couple spots in our interview where the audio is a little bit imperfect. And I apologize for that. But I encourage you keep going keep listening because the conversation is worth it. So let’s dive right into the interview. Okay, Josiah, welcome to the show.

Josiah Smelser 

Happy to be here. Thanks so much for having me, Jeff.

Jeff Stephens 

Absolutely. I’m glad that worked out to get together and catch up a little bit. I wanted to spend time talking about kind of two broad things in my mind I want to learn about what you do really, as an investor and kind of, you know, everybody’s sort of got their own little flavor and little nuances to what they do. And then I want to hear about how that’s translating into all the stuff you’re doing. You’re becoming very prolific as an educator to podcasts and books and everything. And so I want to then dive into that afterwards. That sound good.

Josiah Smelser 

Yeah, absolutely. Yeah. So I’m located in Huntsville, Alabama, Alabama. Long story short, I started off in 2005, and residential appraisal, I got my appraisal license then, and also got my real estate license. And so I was going at a lot of houses in Dallas Fort Worth doing appraisal work. And I think I was actually blessed to be a part of this. But I got to kind of see the mania that was going on in real estate up until 2008. As you know, as a beginner, so I, you know, the second I started in real estate, people were just going crazy trying to buy everything they could, and everything was going up and up and up, you could lose money in real estate, you know, and then all of a sudden, everybody was losing money in real estate overnight. And, and so that was good for me, because I realized that real estate isn’t a game where you always make money, it’s a game you have to be careful with. But you can make a lot of money in it too, if you do it right. So, so anyway, I started in oh five started in appraisal, got my real estate license was using that on deals when I would come across people who had something they wanted to sell or buy. And so I got I got experience on the agent side as well. And so I’ve upgraded my appraisal license now to a Certified General, which is a commercial appraisal license. So I can do residential or commercial, I currently run my own appraisal business. And that’s how I make a living. And then I’ve got all my investment property work that I do is kind of my side hustle. It’s, it’s honestly, probably equal and time spent throughout my week. But I’m not taking money out of my business. And I’ve talked about this on several podcast episodes recently on this, a couple of guys had me on their podcast, and we were talking about how we’re structuring my business. And our goal is to reinvest all of our profits. Because if you take the profits out of your business, and you spend it, you can’t really experience that dynamic growth. And so my goal has been to live off my appraisal income and my real estate license income, and then to reinvest all of my real estate investment profit back in the business to continue to acquire more assets that are producing cash flow, as well as you know, pretty much have enough reserves in place that make me comfortable with the real estate market where it is in my investment. So in a nutshell, that’s kind of what I’m doing.

Jeff Stephens 

Yeah, that’s a great, I appreciate that really clear explanation, because I think that that is I mean, for me and for everybody listening, I know that’s a that’s a question on everybody’s mind is and what exactly is the right model to use so that you can, you know, have a living, and pay for groceries and whatnot today, but also be building something for the long term? And then, in your case, those two things probably kind of feed off each other, obviously. I mean, they, they’re both in the real estate world. But do you ever see intersections where your your skills and your experience as an appraiser or maybe even your access to deals that way are is helping you as an investor there?

Josiah Smelser 

So absolutely yeah, it was, it was the best education I could have gotten to be an investor. Because as an appraiser, you know, you’re tasked with the job of figuring out what something’s worth. And to me, that’s the foundation of investing is knowing what the potential investment is worth. You know, a lot of times investors you know, in the single-family space or one to four family space, you’re, you know, you’re looking at buying something that’s distressed, typically fixing it up, getting it rented out and then refinancing it. And really the whole deal hinges on the rent, what you can rent for and then the refinance what it’ll appraise for, and I’m not, no one not even appraisers get the ARV 100%, right, because you’ve got a third party coming in giving their opinion of value on something. But what you can do is you can kind of lower your risk and the whole thing of it not appraising by really covering your bases on value. And knowing what something’s worth, within a certain range. You know, it’s impossible to know what a third party is going to say about something exactly. But it’s, you can do better than just taking a shot in the dark and not knowing.

And so, you know, the appraisal experience helped me really work on the skill set of just understanding what something is worth. And then I just started applying that to finding good deals. So it was funny, one of my best friends came to me and said, hey, I’ve had a really good year in my business. And he had money to invest. And he knew that I was investing in roles, say, I have my appraisal license, he said, you know, I feel like, you know, I want to own real estate, you know, what do you think about us teaming up, and it’s really worked out? Well. So we ended up teaming up. And what we did is we split everything 5050 after he gets paid his money back, and we’re not paying him back out of cash flow from the business, we’re gonna pay him back after everything is paid off. And we liquidate, so this kind of this kind of a, this is kind of a retirement plan, we’re not living off the cash flow, our goal is to get everything paid for and, and completely eliminate the risk there, and then to take our profits. And so it’s been great, because, you know, he’s been able to take control of millions of dollars of real estate, without having to basically develop the knowledge and skill set that I did as an appraiser, I’ve been able to take control of millions of dollars of real estate using someone else’s money. And, and so it’s been a really good fit there. And, you know, the funny thing is, he and I were best friends growing up. And so I really trust the guy. And he’s probably the best partner I could ever have. Because our schizo skill sets really balanced well, and we happen to take personality profile test after we joined up here, and he is the exact opposite of me, personality wise. So like, I’m one that’s very optimistic and very, like, I’m okay with taking a lot of risk and going for things and trying new things. And I’m always coming up with ideas. And he’s one that’s kind of reining me in sometime. And the more of the more of the, hey, let’s, let’s put the brakes on this. And I’m pulling him out of being too conservative. And so, it’s actually a really good fit. So, you know, I’ve heard people say, like, Don’t partner up with anyone, like, it’ll ruin your business and all this stuff. Like, I think if you find the right partner, it will, you know, the sum is greater than the part. So if you can find the right person, it’s a really good thing, it’s been a really good thing for me. So I know, it’s a lot of information, the average deal we do, we’re buying something that’s distressed, we’re getting it fixed up, we’re getting it rented out, and then we’re refinancing it. And we’re using that money that he put in when we started. And after the refinance on our average deal, we’ve got 25 to 30% equity. Okay, so and then we get our money back most of our money, I’m going to be completely truthful with you, it’s very difficult to get all your money back on the refinance. And even if you do get all of your initial investment back on the refinance, you still got the payments you’ve been making the whole time, right. So you know, if you’ve had three months of holding costs, and you get the full amount back, you’ve still got that three months of holding costs that’s come out of your bank account. So there’s going to be some burn off on your reserves as you do this. And so that’s why it’s good to not be spending money out of the profits from the cash flow of the rentals, because that money goes back in to pay for that, that that cash burn-off. So anyway, that’s kind of in a nutshell, how we’ve structured our business and what we’re doing.

Jeff Stephens 

Yeah. Okay. I appreciate that. And, you know, before we started recording, you were talking about doing different types of deals, right. And I have this expression called deal mix, which sort of like, what percentage of deals Do you do that generates short term profits or long-term wealth and things like that? are most of the things you’re doing then those longer term? Would you? I mean, would you call that a burr? But like, the bigger pockets?

Josiah Smelser 

Yes, yes. Yeah, absolutely. Yeah. So about a year ago, we decided, Okay, we want to set some pretty aggressive goals, and really, you know, get this done. So we, we, that we wanted to purchase in the next 12 months, we wanted to puppy class areas that were going to be worth $200,000 apiece, on average, that would also cash flow. That would all go up in value at a rate that, would we you know, and why did we pick that? Well, we started off doing the $40,000 C class properties. And we quickly learned that that wasn’t what we wanted to do. Because there were a lot of repairs. There were a lot of problems managing the tenants. And we just didn’t feel like we were very successful with that. I know some people are I’m not knocking it, it’s just not what we ended up going with. So we had a lot more success with a higher quality properties, we would get tenants in there that weren’t as difficult to deal with. There weren’t as many collection problems. And the properties tend to like we’re buying in areas that we really felt good about. And data was showing the values are really going up quickly in these areas. And to me, like you can’t predict, you know how much something’s going to appreciate. You can get a good feeling when you’re looking at a market and looking at an area within a good market. Whether it’s The trend is going to continue or not just based on what’s going on around that that area because real estate is pretty slow moving, you can drive a you can drive a neighborhood and look okay, they just put a wholefoods in here, they just put a target in here, they just put a chick fil a in here, they just put a Starbucks, like that area is not going to all of a sudden just plummet like it’s going to take a while. So what we try to do is look at those areas with good schools, good development going on around good appreciation, historically, we try to invest in those pockets. And so our goal was to buy 10 $200,000 properties in these high quality areas that we felt like we’re going to appreciate, and, and you know, and acquire 2 million in real estate, and we ended up buying about 3.5 million. So we had a really good year. Thanks. Yeah, we Yeah, and so it was really great. So now we’re at a point where you’re talking about the deal mix. Now we’re at a point where we’re not wanting to continue to buy single families because you hit a, you hit a point where you don’t want more single families because it’s so it’s so much to manage. That’s why people go into multifamily. I’m now working on multifamily; we made our first offer on our first apartment complex; it was a 54-unit deal that was a purchase price about 6 million. And I’ll tell you about that in a second. But anyway, we’re now flipping to raise capital for our business. And that’s primarily what we’re doing now. So now we’ve kind of shifted over from keeping most everything to now flipping most everything and we’ve still got that portfolio there. You know, it’s three to $4 million of high-quality single family I don’t know it may be worth more now because it’s appreciating Of course, but it’s all rented out. It’s all cash flowing. It’s all managed by a third party and now we’re trying to buy larger deals which will help us scale quicker and doing the doing the flipping to generate cash.

Jeff Stephens 

So yeah, that’s an exciting transition. And I would think to I mean maybe as a commercial appraiser that this helps you bridge the difference between single family homes and large multifamily but that for most people that’s a you know, it’s completely like apples and oranges you know, it’s all sure but you know the way you would look at it underrated finance it manage it all that is super different. So yeah, what’s your like learning curve like with that?

Josiah Smelser 

It’s been like this. I mean, you know, so when I got my commercial appraisal license, I was with CBR II Yeah, you know, most people know CPRA, their fortune 500 company largest real estate services firm in the world. They’re all over all over the place. You probably have CBRT office in your city if you live in a large city. But on my appraisal team there I was the multifamily specialist so I was appraising apartments. I was appraising mobile home parks and I did some other stuff like retail strip centers and industrial and office and all that but I was I became the apartment specialist I did that because I wanted to invest in apartments one day so I had some experience on that side like running the numbers and all that and look you know figure out what something’s worth. But on the other side like we went after this deal we did recently I learned so much because just I mean just literally like the offer process is different we you know with putting in eyes and then highest and best offers are expected on everything and if something’s on market in a good area there you know, we put a guidance on our deal was 5.9 million It was a 54 unit apartment complex. And in Dallas, Fort Worth and a good area. The guidance from the broker was 5.9 million. We, I mean, we figured out we drove the I flew out there first of all because I live in Huntsville, Alabama. I flew out there with some of my teammates on this drove you know when in the view the property then drove the cops got an idea of which comps were our best comps figured out what our rent rates could be. Then we interviewed property managers which property management’s a huge part of multifamily. You got to have a good property manager if you don’t, they can really mess your deal up. So we found a good property manager we figured out what our tax increase was going to be we figured out ways to cut costs on our on our utilities and you know, all the insurance was another thing like insurance rates are crazy. We got to get handle on that. We I mean, we beat this thing to death I finally figured out we could afford a little bit above 5.9 million. So you know, we put our first offer and they said you know the advice was don’t put your highest offer in your first time through because they’re going to go to highest and best and you won’t have any room to go up. But our first offer and there were 16 offers on this thing. And I was like gotta be kidding me. 16 you know, and so then they told us we made highest and best that the top eight offers went to highest and best. I think we went in at like 5.6 million with our first offer. Went the highest and best round and waited till the last second to put our offer in because we didn’t want the broker shopping our deal to everybody else and telling them what we put in and so they could come in and beat us and we went in at 5.9 million full Offer $100,000 in earnest money there. And the broker called us and told us we were the high offer. And so we think we’re going to get the deal, right, because I’ve got a team, two guys on our team owned about 6000 multifamily units they own I mean, they may own 20 apartment complexes. And that’s just what they own is the general partner, not even the limited partners. And then my other teammates, she owns three apartment complexes in Birmingham, Alabama. And then I don’t own any apartments, but I have the one to four family stuff. And then I was multifamily guy on my appraisal team. And so anyway, we have a we have a good team on paper, we felt like we’re gonna get this thing. Well, the broker calls us back a couple days later, and says that they went with a lower offer that had more earnest money involved. So we lost the deal. I was like, You gotta be kidding me a lower offer. So like, in my mind, this is like the craziest thing, the seller took $50,000 less, because they had $250,000 of earnest money, instead of taking our $50,000 higher offer where we had 100,000 in earnest money. And so in my mind, the seller embrace a $50,000 loss in the off chance that the deal falls through. And I’m like you had 16 offers like, you’re not gonna lose, there’s gonna be people standing in line to buy this, like, take the highest offer. If that doesn’t work out, get your hundred thousand dollars, then work the second highest offer like so anyway, but yeah, we didn’t get it. So it multifamily is a much different animal. And, and whoever said it takes as much time to buy a single family as a multi-family was lying. It’s not true. It takes me like 30 minutes to buy a house and it took us we worked on this thing for a couple months and then get it. So I do believe that when you do get one, you’re getting more units for your times. But you know, yeah, but I don’t think it takes the same amount of time to buy an apartment complex as a house.

Jeff Stephens 

Yeah. Yeah. So now how do you tend to find most of your deals? Whether it’s a single-families or some of this larger stuff more recently? Are you working with brokers? Are you marketing off market? You mentioned a lot of its distress. How are you finding those?

Josiah Smelser 

Yeah, pretty much. I mean, I would say I would say 95% of buy single families are about one to four family stuff comes through wholesalers, I think wholesalers are the best resource for finding for me, they’re the best resource for me for finding deals. We’ve tried the marketing thing, and, you know, Warren Buffett’s that, as you know, stay in an area of competence, do what you know. And I believe I could build an area of competence in and direct, you know, direct marketing and that kind of thing, finding off market deals that way. But to me, my, my area of competence is in in knowing value, recognizing a deal and putting a deal together, that’s what I’m good at. And so I’m spinning my wheels, trying to find off market stuff myself, whereas I’m happy to pay a wholesaler that’s found a good deal, I am more than happy to pay them a fee. To get that deal. As long as I can recognize my numbers work and I can I can make that deal work and refinance out and get most of my money back. So when we were trying to do finding stuff off market ourselves, we were going very slow. When we shifted our strategy and try and focused on doing mostly deals with wholesalers, it the business took off. So I think I think if you are a wholesaler, that’s your thing. And you’re making a lot of money off that and that’s good. If you are a burned buster, like you either need to be, you need to focus on what you’re good at. And if you can focus on what you’re good at, you’re gonna experience a lot, a lot faster growth and stuff, you can’t do everything, you can’t be good at every part of the whole thing. It’s just not, it’s just gonna take you too long to develop that competency. So we leave the we leave the direct, you know, finding the off market deals to somebody else. We have found some off-market deals, and we love it when we do, but I’m not spending all my time trying to do that.

Josiah Smelser 

And then on the on the apartment stuff. That’s kind of it for brokers have developed relationships with and that’s again, you’re talking about the difference in one to four family and commercial. A lot of the commercial stuff is transacted through broker relationships. So a lot of this stuff doesn’t even hit the market until after it’s gone through the brokers and all their networks and nobody wants it. So if you want Yeah, if you want an apartment if you want a good apartment deal, talk to as many brokers as you can and also go try to find off market stuff off market to me is much more attractive on that side.

Jeff Stephens 

Yeah, that makes sense.

Josiah Smelser 

Yeah, so if so if I’m looking for off market and single family, it’s you know, and I spend all year trying to find one deal, it’s not going to be worth my time whereas if I’m looking for off market and multifamily and I spend all year and I find one deal, it will be well worth my time. So, so our you know, the decision we made with our business was network with as many wholesalers as we can for our one to four family stuff. Because it’s high transaction, and, you know, quick turn kind of stuff, network with as many brokers as we can on the multifamily. And, and also try to find off market stuff on the multifamily as well. So that’s kind of how we decided to go. I’m not saying that’s right for everybody, you may be a great wholesaler on a one to four family, and you’re located your own deals more power to you like, if that’s what you’re good at, do it. I’m not good at that. So. So that’s why we’ve gone the direction we have.

Jeff Stephens 

Yeah. Isn’t it amazing that the breadth and the scope of, of real estate and just how there’s, I mean, a million different ways people go about it, and little niches and approaches and strategies?

Josiah Smelser 

And yes, there. It’s crazy. It’s crazy. And, and like I said, you know, like, I’ll listen to a podcast, and I hear some one guy doing something that sounds really, really cool. And I’m like, man, he’s killing it doing that, I’ll go over and try it, and I just don’t have the same success they are. And then I’ll go and try something myself and have a lot of success with it. And then I’ve got people that have asked me, hey, why am I not making the same traction, you are with this? And maybe it’s just not their thing? I don’t know. But like, I truly believe that real estate is a really great way to grow your wealth long term. You just have to find what niche within real estate, that is your thing, and then run with it, you know, and like specialize in that. And when you do like, I think I think you know, focusing on being really good at one thing in real estate is going to make you a lot more money than being kind of good at everything, you know, to me.

Jeff Stephens 

So yeah, I agree. that’s a that’s a great segue to one thing I was going to note is I’ve heard you say now like in the description I read of the book, and then in your new podcast intro to you talk about use that expression play the long game. Can you talk to us just a little bit about what that means to you? Because that really resonated with me like, yeah, I feel that way, too.

Josiah Smelser 

Yeah, yeah. Yeah. So I mean, I think I think you always end up in a bet? Well, I would say most times, you end up in a better place, playing the long game, instead of playing the short game, meaning, if you’re trying to get rich quick, there is there are some people that get rich quick in real estate. But it’s not, it’s not the average result, right? The average result of somebody trying to get rich quick in real estate is they go broke really quick. So the average result of somebody playing the long game investing, for the long term investing over a long period of time and hanging on is they get really wealthy. I’ve never, I’ve never had anyone on my podcast that was not taking profits out of their cash flow properties I never had, I’ve never had anyone who’s really successful, that is taking all the profits out of their cash flow property, cash flow, investment portfolio, all of them are reinvesting, I find that to be very interesting, because, you know, you kind of have this idea, like, Oh, go get yourself some rental properties, and then you can just live off of it and you’re good, you know, well, it’s not that easy. Like you have to the properties have to be producing a robust amount of cash flow before you can live off of it, and still have enough money to take care of all the problems are going to pop up. So all the investors I’ve seen that have that have grown a lot of wealth over time and have been doing this for a while and done really well. They don’t hamstring their business by taking profits out too early. They don’t kill the goose that’s laying the golden egg, right? They reinvest the money, and they have proper reserves, and they live off something else. So it doesn’t really matter what else you’re living off of. But for me, I wanted to leave my nine to five, I did not want somebody looking over my shoulder at work every day driving me crazy. That’s just not my I don’t do well with that. So I said I want to work for myself. So I took my appraisal license and started my appraisal business. I’m also upgrading my real estate license to broker and I’m going to try to open a brokerage, that can be my source of income, then I’ll have the investment portfolio, it’s going to be paid off in you know, 2025 years. It’s compounding it, you know, three to 4% a year, I know what that it’s going to turn into once it’s paid off, and there’s going to be millions of dollars there. Lord willing, if you know something bad doesn’t happen, it’s out of my control. And then I’ll have that money 20 to 25 years in the future when I’m you know, in my 60s, and I’ll have that equity there. So that’s the long game. I’m not getting rich quick, but it is a get rich, slow scheme. And it does work if you stick with it.

Jeff Stephens 

So yeah, yeah. I always think of this metaphor of like planting seeds. You know, you can’t turn back the clock and go plant seeds five years ago, but you can plant some seeds today and just know that you keep watering them. In the future. You’re going to be thanking yourself.

Josiah Smelser 

Yeah, absolutely. Yeah. And I go back to Warren Buffett, you know, I’m a big Warren Buffett fan. You know, he wasn’t a billionaire, the first you know, first 10 years he was working. I mean, you know, he started with zero just like everybody else. And Funny enough, he actually had some people come to him and said, Hey, you know what you’re doing investing. We don’t know what we’re doing. We’ll give you some of our money. You invest it for us, you know, and he did well with it. And you He bought Berkshire Hathaway is and then started adding businesses to that. And it was a, it was a slow progression. But if you look back over it like Berkshire Hathaway is compounded at 21% a year, over like 50 years or something I don’t even know I can’t remember how long it’s been. But you compound your money at 21% a year, year after year, it turns into a whole lot of money. And that’s why the long game is important. If you’re playing the short game, and you get $100,000. And you make 21,000. And you go spend all your money. You’re done. I mean, that’s it. But if you get your hundred, and then you take your 21 and you reinvest it, you get another 21% on that, then it turns it starts turning into a huge snowball.

Jeff Stephens 

Yeah, absolutely. So you mentioned your podcast, and I had the pleasure of being a guest, maybe nine months ago or something like that. Yeah. So what made you want to start the podcast and kind of start getting into this world of spreading the message and teaching others and whatnot?

Josiah Smelser 

Yeah, so the podcast is the daily real estate investor, I’d love for all you guys to check it out, had Jeff as a guest, and I tried to bring on high quality guests that are going to add a lot of that to the listeners. And I did that because there were two reasons. Number one, you know, I have the personality type, like my goal in life is to help as many people as I can. If I look back on my life, and I just make money, and that’s it, I don’t feel like I really helped anybody, I will consider that a failure. So first and foremost, I really want to help people, because that makes me feel good about my life and feel good about what I’m doing. And also believe that’s why I’m here. Secondly, I wanted to start real estate syndication. So it’s a wonderful way to connect with people that are interested in real estate, that have money to invest that you can build rapport with over time. So you and I met through this podcast like I wouldn’t have probably met you otherwise, this is a wonderful way to meet people, you wouldn’t be able to meet otherwise leveraging the internet, not having to go to a local real estate meetup and meet 20 people. And that’s like your that’s, that’s it. Like the internet opens a whole thing up where you can meet people around the world. Like I, I pulled a chart the other day on the listeners on my podcast, and I’ve got people all over Africa, and you know, all over Europe and stuff. And it’s like, it’s really mind blowing to me, but it’s like, man, how cool that like I can connect with these people that I wouldn’t have been able to connect with otherwise. And so that’s really why I did it. Like I wanted to help people. And I thought it gives me a large platform to be able to do that. And then secondly, it helps me network really well, which is a lot of real estate’s networking.

Jeff Stephens 

Yeah, yeah, that’s great. And, and then so you recently then wrote it a book, right? This is your first book,

Josiah Smelser 

First book. Yep.

Jeff Stephens 

All right. So tell us about the book. And what prompted that? And like, what’s, what’s the objective with the book?

Josiah Smelser 

Yeah, so the book is called dream it and build it, how to crush your real estate investing goals. And I just basically documented the process and my, my thoughts going through building this portfolio really quickly, you know, after we made the decision to try to get to million and kind of the processes that we went through to basically speed that process up. And I wrote it because I wanted, first of all, I wanted to help people, right? Secondly, I always wanted to write a book, but I wanted I wanted, I wanted people to hone in on the fact that it’s all about your mindset. It’s all about your mindset. If your mindset is, you know, I can only do one deal this year, you’re not going to do five deals, I don’t think, you know, if your mindset is I want to do 2 million, you’re going to try to create ways in you’re going to try to try to create processes and ways to get to that 2 million. And it goes back to kind of Grant Cardone 10X, you know, 10 extra goals, and that will force you to think bigger. Well, it’s all about how you’re thinking about things. So, you know, now and I’m not advocating if you have a bunch of debt, I’m not advocating trying to go after some really crazy real estate goal and that saint at that same time, because you could get yourself in a lot of financial trouble, you got to be wise about how you’re doing this. But at the same time, you know, if you’re debt free, you’ve got money saved and you want to own real estate, you’re just not doing it because you’re not thinking big enough. You know, mindset is going to be what you need to hone in on and try to fix. And I mean, you tell me Jeff, like what have you had to change with your own mindset to grow your business?

Jeff Stephens 

Yeah, that’s a great question. I, you know, I use when I talk with my own coach a lot, we use this expression, get out of your own way. And so that that expression is in my head all the time, and I’m always asking myself, what exactly does that mean? And it can mean I think different things in different moments, but it is all absolutely about what’s going on between my ears, you know, I have I have experienced phases where like, when I got started, I definitely thought of myself. We quit literally I was like, I’m a one to four-unit kind of guy. You know, it’s accessible. It’s, it’s more than most people are doing but I didn’t even it didn’t even occur to me that I could do something larger than that for a lot. Time. Right? And, and so that was one example of kind of getting out of my own way and questioning that assumption that was there for no reason, really. But I agree. It’s just all comes back to what do you think is possible? Where did some of these beliefs come from? Did you consciously decide, hey, I believe that or was it just sort of planted in there in your mind from some experience? Maybe when you’re growing up or right, consciously or subconsciously? But yeah, I think controlling what’s happening in your mind is the on a, just a day to day getting things done and staying focus level, but also on a macro annual goals 10-year goals, trajectory of your lifetime level two.

Josiah Smelser 

Totally. Yeah. And I think you said what was ingrained in you and your younger, like, I look back to where that limiting belief came in my own mind. And I think it’s, I think it’s kind of taught to you, I mean, you’re taught in school to, to basically follow these processes to get a good grade, and then go to college, follow these processes to get good grades, so you can get hired to go work for someone else and follow this, these processes to get a raise. The carrot is always, you know, doing this certain thing to get a certain result. And if you can’t do that thing, well, you don’t get that result. Well. So your fear is, okay, first of all, in real estate, like I don’t necessarily know the process, I don’t have a manager telling me, here’s what you need to do. And you will get this certain result. I’m just basically reading and all this other. So you have this fear of failure, that’s going to come from like not knowing the process, right? Not knowing a product, not properly knowing the process. And so you shy away from it, and you’re like, well, they’re telling me if I go to college, I’ll make this much money at my job. And so I’m just going to stick with my job and do my 401k because that’s what everyone else is doing. Whereas like the dynamic wealth, building opportunities over here doing something that most people aren’t doing, doing something that’s more original, I’m not saying you can’t make money with your 401k, you can. But you know, unless you’re Warren Buffett, who can compound your money at 21%, like you can actually get 20% on your money over in real estate. And, and that’s why I like it, it’s like, Hey, I can’t compound my money at 20% and the stock market, and year after year in real estate, you can get better and 20%. You know, so. But that anyway, that limiting belief, I think is something that that the way that education systems set up, it kind of steers you to kind of be very risk averse, and what you’re doing with your career, and with your invest your your investing, like I didn’t even have in college, I didn’t even have real estate offered as an option. You know, and that’s what I wanted to do. I wanted to do real estate; it wasn’t even an option at my college. So, you know, I chose from the best alternatives and like, I would have done real estate, but I don’t know, I don’t know that you need to go study real estate in college to do it, you know?

Jeff Stephens 

Yeah. Well get out and practice and learn. So when you look, a few years down the road, what do you want to be doing? It’s funny, where we just hired somebody. And in the interview, I said, I’m gonna ask you the most cliche question and all. Where do you see yourself in five years, but I really like to know, like, what they’re like working here with you. Yeah, yeah. So what does that look like for you when you go a few years down the road in your mind?

Josiah Smelser 

Oh, man, that’s a good question. You know, I, I made it a goal this year to buy two apartment complexes, because that’s going to stretch me a lot. So I think my goal, I think my goal each year is to stretch myself from the year before. So last year, we tried to buy 2 million in single families. And we did 3.5, I would love to look back on this year and say, my goal was to buy two apartment complexes and I bought three or four, you know, and I’ve got detail around what I want to do there. Five years, I would love to be doing real estate syndication, doing multifamily syndication. And that’s what I started the podcast for. That’s one reason I wrote the book. That’s one reason I’m trying to acquire apartments now to get the experience to go in there and be able to do that do that well. So I would like to, I would like to continue the podcast that I’m doing right now. And I kind of made a commitment to that, that as long as the podcast is growing, and it’s and it’s resonating with the audience, I’ll keep doing it. That was my goal with the podcast because as you know, you start a podcast, there’s hardly anyone tuning in, you got to like getting that traction. So I said, you know, the easy thing to do on this would be to quit it while it’s early on, you don’t have that huge listener base. And but if I’ll if I’ll just give it enough time to grow and not kill it before has a chance to actually mature, then it could probably turn into something and so as long as it’s grown, it’s been growing. I’m gonna keep doing it. So I want to keep doing the podcast and then get into real estate syndication on the multifamily side. So I would say in five years, I would love to own a number of cash flowing multifamily properties. As well as be doing multifamily syndication. Nice. Yeah. What about you?

Jeff Stephens 

Yeah, thank you for asking. That’s a great question too. I, I feel like I want to be doing more of the same, but increasingly sort of selective, I guess, you know, I am constantly adjusting my own deal mix, so to speak, because I, I have this passion for playing the long game too. But I’m realizing I’m appreciating that I need to play a little bit more of the short game better and be just be more deliberate and intentional about it. Absolutely allowed myself to play the short game as just sort of a byproduct whenever it worked out from trying to play the long game. And now I’m realizing I really need to be a little more deliberate about making it happen. Sure, I like to be in a comfortable balance of those things.

Josiah Smelser 

Yeah. What is that? What is your deal mix?

Jeff Stephens 

Well, right now, I mean, my goodness, it’s, it’s at its price, 75% long term holds, or medium to long term holds 20% flips and 5% wholesaling. Um, and I think it would be, it would be better to increase the, you know, the wholesaling and flip mix up from that 25%, to probably closer to 50%.

Josiah Smelser 

I probably would agree with you, because this is just my opinion, I don’t know if this is right or not. I feel like it’s I don’t know what you’re seeing in your market. But it’s getting, it’s getting more difficult for me to find deals with enough meat on the bone to be able to do their fix up, refi get all my money back or most of my money back thing. Whereas you know, and I’ve got my portfolio rented out, it’s renovated, it’s refinanced all that it’s, it’s stabilized, the flipped the flip stuff, I can still have flips going. And if the market starts struggling, I got time to sell those flips. And I’m not, you know, I don’t have a big bunch of bird deals going that aren’t stabilized at the wrong time. And I’ve got my cash reserves there. So what I like about what you’re saying, your wholesale deals, bringing cash, your flips, bring in cash, and that cash is sitting there in reserves, you’re well, you know, you have plenty of cash on hand in the case that the market starts having more struggles or your or your rental portfolio, start struggling with more repairs and vacancies and whatnot, you got cash sitting there. I like that. I think that’s a good thing to be doing right now. Because, you know, if people were saying five years ago, the markets at a top Well, I mean, I’m glad I didn’t listen to them, and not best five years ago. But I also do feel just based on what I’m observing that it’s getting harder and harder to find deals with meat on the bone. So I’m not I’m not just gonna do deals when the numbers don’t make sense. You know?

Jeff Stephens 

Yeah, absolutely. So well tell us the name of the book one more time, please. Everybody can get it. Because I’d love for everybody. Yeah, check it out.

Josiah Smelser 

Yeah, yeah. So the book is on Amazon, and the title is, dream it and build it, how to crush your real estate investing goals. And it’s on Kindle on Amazon, you can get the Kindle version, the physical version is also on there. It’s sold out. I wish Amazon would order a lot more copies. I don’t know how many copies they order, but they got them and they sold them out. And I’ve reordered so they should have more physical copies there. Of course, if you order from them, they’re gonna send you one the second they get them, the Kindle versions instantaneous. So if you want to start reading it right now, which I would love, so please, yeah, please go check the book out. And yeah, thanks for thanks for the opportunity to share that, Jeff.

Jeff Stephens 

Yeah, of course, of course. And if people wanted to connect with you after the show, in some other way, what’s the best way to reach you?

Josiah Smelser 

Yeah, so I’m on I’m really active on Instagram. And my Instagram handle is @dailyrealestateinvestor all one word. And, yeah, shoot me a message on there. And let’s connect and stuff and have my email addresses on there on Instagram. And,

Jeff Stephens 

yeah, that’s probably the best way to connect with me is Instagram. All right, fantastic. Well, thanks so much for carving out time to be on the show today.

Josiah Smelser 

Absolutely, man. It’s been awesome. Thanks for having me.

Jeff Stephens 

Well, there you have it a great interview and conversation with Josiah Smelser. I thank you again for listening to yet another episode of the Sleaze Free Real Estate Investing podcast. On the next episode, we will continue our discussion that we started in Episode 27 on the key things that you need to uncover from a seller. And this time, we’re going to turn our focus to how you uncover those key things from the seller. So if you haven’t listened to Episode 27 yet, go back and listen to that one, because it’s gonna tee you up nicely for our next episode.

Again, please do yourself do us a big favor by hitting the subscribe button in your podcast app that we all know the second the next episode is released. If you would also be so kind as to go to iTunes and submit an honest rating and review. We would really, really appreciate that. Reminder show notes for today’s episode, including a transcript of our conversation with Josiah is at thoughtfulre.com/e28 and until next time this is Jeff from the Thoughtful Real Estate Entrepreneur signing off.

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Hey there Thoughtful Real Estate Entrepreneur. Before we got started with today’s episode, I want to talk to you for just a second about marketing. Because you can’t buy properties unless you have leads of properties and sellers who are considering selling those properties. As you know, we as thoughtful real estate entrepreneurs love off market deals, we love face to face negotiations with sellers because that’s where we know we can absolutely have the best shot at creating a tailored win-win negotiation with the seller. But the question is where do the leads come from? Well, as we’d like to do it here at the Thoughtful Real Estate Entrepreneur, it’s Direct Mail Letters, but you can’t send letters unless you know who to send letters to. That’s why I created a free PDF report for you to download right now called How to get a targeted ready to use list of quality off market seller leads without spending a dime. In this free report, you will learn the three simple steps to get the perfect list at no cost to you at all. And let’s be honest because we’re thoughtful real estate entrepreneurs. We will also explain to you why this strategy and this technique works the way it does. To get this free report immediately just go to seller direct mail calm and you can grab it. Just enter your email address and we’ll email it to you absolutely immediately. Now onto today’s episode.Thanks for listening to Sleaze Free Real Estate Investing. Remember, solve the person to unlock the deal and solve the financing to unlock the profit.

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