Curious about how you can skip college and still create a successful career path? Meet Justin Pickell, a young entrepreneur who bypassed the ivory towers to carve out his own journey in the world of real estate investing. Ever wondered how day trading in the stock market compares to real estate investing? Listen in as Justin reveals how he navigated from the fast-paced world of day trading to building a sizeable portfolio in real estate. Get set for a conversation that will make you reconsider your assumptions about investing and wealth creation.
We also tackle the critical issue of aligning education and career paths. Is the traditional educational system truly preparing youngsters for their future careers? We chat with Justin about how his path diverged from the norm and why it's important for young people to understand their own career aspirations early on. Learn how making informed career choices early in life can unlock true potential and pave the way to wealth creation.
Finally, we dig into the nuts and bolts of real estate investing. From subject-to deals and seller financing to the crucial role of networking, Justin shares real-world strategies that have helped him succeed. Discover how he leverages other people's money and credibility to seal deals and the vital role of networking in finding the right partners. If you're seeking inspiration and actionable advice on transforming your side hustle into your main income source, don't miss this enlightening discussion.
As you're inspired to embark on your own side hustle journey after listening to this episode, you might wonder where to start or how to make your vision a reality. That's where our trusted partner, Reversed Out Creative comes in. Specializing in strategic branding and digital marketing, Reversed Out Creative is an advertising agency dedicated to helping you turn your side hustle into your main hustle. With a team of experienced professionals and a track record of helping clients achieve their dreams, they are ready to assist you in reaching your goals.
To find out more about how they can elevate your side hustle, visit www.reversedout.com today and start your journey towards success. Our blog is also full of great information that we work hard on to provide you with a leg up on the competition. We also recently launched our YouTube Channel, Marketing Pro Trends, which summarizes all of our blog posts.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 2 (00:11):
Welcome to Side Hustle City And thanks for
joining us.
Our goal is to help you connectto real people who found
success turning their sidehustle into a main hustle, and
we hope you can too.
I'm Adam Kaler.
I'm joined by Kyle Stevy, myco-host.
Let's get started, all right.
(00:32):
Welcome back everybody to theSide Hustle City podcast.
And guys, i got a special guesttoday.
We actually met at a conferencedown in Miami.
He randomly came up and startedtalking to me.
Justin Pickle, how are you?
doing man.
Speaker 3 (00:46):
I'm doing great.
How are you, Adam?
It's a pleasure to be on theshow and looking forward to
seeing what we can do to helpthe world.
Speaker 2 (00:56):
Thanks for reaching out.
Wanted to be on the podcast inthe first place And we were
standing in line for a booksigning down in Miami, in
Winwood.
I was talking to a broker ladywho's from Miami, and a buddy of
mine was with me too, and youjust kind of randomly came up
and you're a young guy, right.
What were you?
18, 19?
(01:17):
, 19.
, 19.
Yeah, yeah.
So I mean you just had someinitiative.
You're just like hey, i'mstanding in line.
I might as well start talkingto people, right.
Speaker 3 (01:26):
Yep, exactly Your network is your net worth.
You just got to figure out howyou can collaborate to see what
value you can bring to everyindividual.
Speaker 2 (01:36):
That's right, That's right.
So what got you into?
I know your dad had mentionedhe was in real estate and when
we were talking and you guys areup in Michigan, What got you I
mean outside of, maybe, yourfather what got you kind of
involved in this real estategame?
Speaker 3 (01:54):
Yeah, just overall, wanting to pursue on the
entrepreneurial side of thingsand really not wanting to go to
college and be taught bydifferent mentors of stuff
they're not doing actually.
So I want to really learn abouteverything about business and
real estate made the most senseto begin to build wealth.
(02:18):
I did do stock market daytrading for a few years before
real estate and a little bit ofthat on and off, but this is
mainly the main pursuit that I'mworking on.
Nice, i'm working on buildingthe wholesale operation and
build my buy and hold portfolio.
Speaker 2 (02:39):
I love it, man.
So, yeah, i mean real estate isreally the way to go.
I mean, at the end of the day,you got to have some kind of
hard asset And I think for mostpeople, if you're just starting
out, real estate is probably oneof the best ways to leverage
kind of a small investment andbe able to, like, have access to
a much larger asset that'sworth something that you can
(03:02):
make money at.
So you know, for a $3,000investment you can control, say
you know a $200,000 asset that'sgoing to bring you in, say,
$2,400 a month in revenue.
Say you get a four family orsomething like that, i mean
you're going to be able to paythat small investment back in a
matter of no time And peopledon't understand this.
(03:24):
And now you've got somethingthat you know you don't have to
pay for, necessarily outside ofyour down payment.
That's going to be bringing youin residual income, as long as
you have good tenants and theydon't tear up your place and
constantly move out, which I'vehad those problems and I'm sure
at some point you will too.
But you just got to pursue man,you just got to fight through
(03:44):
that stuff, you know.
Speaker 3 (03:46):
A hundred percent.
That's what it's about Reallyjust got to know what kind of
investment makes most sense foryour personality as an investor,
to know that your goals arealigned and actually knowing how
much time and energy and moneyit'll take to achieve the goal
you're trying to hit.
Speaker 2 (04:06):
I love it, man.
Well, you got your head in theright place, i know that, and I
mean you've already tried daytrading and everything.
How'd that go?
What just made you decide it?
Maybe this is too much work, oryou know what got you kind of
out of that, or do you stillplay around with it a little bit
?
Speaker 3 (04:22):
Not really much, but pretty much I did enjoy it a lot
and it helped like understand,like really going back into it,
Like if I probably didn't dothat it wouldn't have built my
mindset enough for theentrepreneurial journey, because
it really taught me a lot abouthandling my emotions, staying
(04:46):
disciplined, being greedy, beingfearful of the marketplace and
different things that can comealong and damage what you're
trying to head towards Mainlyfocusing on charts before.
So it's a little different withimplementing that kind of stuff
into real estate.
But the reason I shifted awayfrom it is I made good money but
(05:08):
the market was just not reallysuper volatile, Like kind of
just hit some bigger plays offof it.
That helped me make money forthe couple years I was doing it,
but it was more of like aroller coaster journey, So it's
not as stable as if you're goinginto real estate.
(05:28):
You know you're getting aguaranteed check because you did
your due diligence.
Speaker 2 (05:33):
Yes, And you can't really control those factors.
I mean, really it's a gamble Alot of times when you're day
trading and you're, I meanyou're destined and you got a
50% chance.
Is it going to go up or is itgoing to go down today,
especially if you're doing likeoptions trading or something.
Speaker 3 (05:46):
That was, that's what I was doing, yeah.
Speaker 2 (05:49):
And it can be really, really expensive to play around
with options unless you reallyknow what you're doing.
And you know, the good thing, ithink, for you is that at some
point you're going to need tofigure out where am I going to
put all these gains for my realestate.
How am I going to invest thesegains?
You already understand thestock market.
You already understand how toplay the stock market.
(06:09):
You understand, you probablyhave a bunch of symbols dancing
around your head.
You, i could tell you, hey,what's Cisco's symbol?
You know it's CSEO, like.
What's Microsoft, msft, like.
you just know that right.
So, yeah, and you know the way,these some of the better stocks
, i mean if you traded for a fewyears.
Unfortunately, you tradedduring a time when our country's
kind of heading into arecession right after COVID, so
(06:30):
that that probably sucked foryou.
We're not necessarily in a bullmarket After we were in such a
great bull market, for I don'tknow the last 10 years, 20 years
.
Speaker 3 (06:40):
I started with the bull market.
Speaker 2 (06:41):
It was kind of hit, i'd say, okay, well, that was
good, well, at least you gotsome of that.
But you know, playing the downs, playing things as the market's
going down's a lot harder.
You know everybody's smart whenthe market's going up, you know
, and when it's going down it'sa little, a little bit more
trouble.
But to your point, real estateyou can.
You know you're going to getthis money.
(07:01):
Well, at least you hope you getthe money, as long as people
pay the rent on time.
But you know you can predictwhat's going on in real estate a
lot easier than you can withwith the stock market.
And you know, being such a youngguy I mean 19 years old,
already out there, i mean, youknow my co-founder in one of my
businesses.
I think he bought his firsthouse when he was 18.
(07:21):
He started becoming a realestate agent, you know, and and
he's always wanted to be anentrepreneur and he's been very
successful at it And he helpedout a lot of people, including
myself, bringing me into hisidea and just being so you know,
dedicated to what he's involvedin and not giving up even
though people said, hey, weshould.
You know this isn't going towork.
(07:41):
Da, da, da.
You know he just keeps goingwith it.
Right, you just got to be.
You gotta have that grit, yougotta be able to keep moving
forward with stuff.
And I always ask you know you,being a young guy not too long
out of high school, what wasyour experience in school?
So you know every old person.
You know, like me, we alwayslook at the generation before,
(08:01):
like, ah, generation is lazy.
And then the generation afterthat, oh my God, that generation
is even worse than the previousgeneration.
What are they teaching thesekids in the schools?
They're not teaching them to beself-sufficient.
They're not teaching themcritical thinking skills.
You know, to me I would hate tosend a kid to like a public
school now.
Speaker 3 (08:20):
With my school experience on like the actual
education of what they'reteaching.
I'd say like, maybe math classhelped me understand some
analytical perspectives andstuff.
I would say, like socialstudies, i didn't really learn
much.
If they're going to teachsomething about history, they
(08:40):
need to focus on something thatpeople can utilize within their
life really And it needs to bebroader towards different people
who want to go differentdirections in their life And it
needs to be like more choiceselected to as you're going up
in the education system.
(09:01):
you really need to be able topick your path, not just you go
into finish high school, thenyou can start picking your path.
You got to be able to yeah, yougot to start picking your path
in like elementary school, not ajob or anything, but you need
to figure out what kind ofactual skills and different
things you want to learn.
Speaker 2 (09:21):
Well, i've been, i've been looking at it and I've
thought about this too.
It's almost like if you couldgive people personality tests,
right, because a lot of theseyou know there's 16 different
personalities, myers-briggspersonalities, and I believe in
it.
Some people say it's like Idon't know, weird or like
astrology almost, but you knowthere's science behind it And I
(09:42):
think there are personalitytypes that are just geared to be
entrepreneurs.
We're not workers Like you.
Go out in the workforce, you geta job, maybe you go to college,
you know you're always like, ah, this really isn't for me.
I'm going to college but Ireally don't want to work for
somebody else, but you do itanyway because that's what
you're supposed to do, you know.
(10:02):
Then you get out, you work inthe workforce for a couple years
and you're just not performingbecause you're not a follower.
You're just not one of thesepeople.
You got ideas, you want toshare them, but you're not that
high up the totem pole yet towhere they care about what you
got to say.
You know, and it just kind ofputs you off when it comes to
working for other people.
And then the idea of justsitting there working away for
(10:24):
the next 40 years just toscratch and claw your way to the
top and fight off all thehaters and the company that you
know.
They're trying to do the samething And it just seems like I
don't know, like you're puttingin all that effort for what?
Like to work for somebody elseand make them rich, and then
maybe you save up a few nickelsevery once in a while and you
could throw it in the stockmarket And I don't know.
(10:45):
You retire at 65.
They give you a little plaqueand a gold watch and off you go
to enjoy your life with badknees and you can't see very
good out of one of your eyes.
So like I mean, that justdoesn't seem like something that
appealed to me And some people.
It's for some people which isnot for me, and I'm guessing
it's not something for youeither.
Speaker 3 (11:04):
No, sir, definitely you got to really figure out
what your personality type isand understand how it can be
aligned with the goals you'retrying to achieve, and like how
you can utilize that to helpother people is what I'm
thinking, because most peopleare not even familiar with their
(11:26):
skills and what they're doingon a day-to-day basis.
They just took on what theschool system or their family
and friends told them into theirbelief system And now they're
running a program and live intheir life that way.
Speaker 2 (11:40):
Yeah, yeah, i mean it's, and you got to be able to
unlock these things And it's notsomething I think you can even
learn in school.
I mean they could.
They're teaching you the basics, right.
They're teaching you just, it'sessentially daycare And you
learn some things that you'reprobably not like.
50% of what you learned you'reprobably never going to use
again.
I maybe I'm wrong.
I haven't been in, you know,high school or any of that,
(12:02):
since 1995.
I'd say more than 50%.
Well, yeah, okay, so.
So you're using some of thestuff.
It really depends on the typeof school you go to.
I mean, i went to an inner citypublic school and you know I
was lucky that I went to onethat was a magnet school that
was focused on the arts, becausenow I own an ad agency and that
you know design skills andthings like that led me into
(12:23):
start up a company with someother guys because they needed
my skill set, and then that ledone thing, led to the other and
now I'm doing all right.
But not everybody has a path inschool doesn't really
necessarily help you select apath.
You know, when you're a kidyou're like, hey, somebody says,
hey, what do you want to bewhen you grow up, justin?
Oh, i want to be a fireman, iwant to be a policeman, i want
(12:45):
to be a doctor, i want to be alawyer, because those are the
only things you're exposed to.
Yeah, those are the only thingsthat you really know that are
out there, and school doesn'tnecessarily do a very good job
of teaching you about all theother wild stuff.
What's a wholesaler, a realwholesaler?
you're not going to learn thatin school right.
I mean the stuff you're doingnow.
(13:05):
You know how does a real, howdoes real estate investment work
, like the things that actuallyhelp people really build wealth.
They don't really teach youabout you know, because they're
teachers that you know theycould teach you to be a teacher,
maybe a mathematician, maybe ahistorian, but you know things
that are kind of outside the box, like what you're doing now.
(13:26):
You didn't learn any of that inschool.
I mean, you had to watch yourdad, i'm guessing, right, yeah.
Speaker 3 (13:31):
I watched my dad definitely and learned tons from
his experiences.
that were successes andmistakes and definitely better
to learn from other mistakesthan do it on your own And that
helped a lot.
And that's more of a schoolbeing within the experience And
just even though, like someinvestors are just like, how am
(13:54):
I supposed to get experience inreal estate?
Just find someone who's localin your network of real estate
investors.
Oh, you're doing flips.
Could I like maybe come to thehouse a couple of times when
you're talking to thecontractors, like reviewing
stuff or something that actuallyyou're trying to learn and
figure out about their business.
(14:15):
it could be any part of it.
How do they find that deal Orhow do they find that good
contractor and build arelationship?
See, that's a big challenge.
That's a big challenge.
Speaker 2 (14:25):
Finding contractors, especially right now.
well, when the job market wasgoing really, really well and
you had a lot of home buildersout there scooping up all the
good contractors, it was hardfor, like, small investors to
find people like that.
You know, that's the one thing.
That's the one limitation toreal estate investing is can you
get the projects done?
Like a lot of times there's noshortage of buildings and
(14:48):
properties, especially up inMichigan.
I mean you go to Detroit, Imean there's probably tons and
tons of properties that coulduse some TLC, 100%.
But can you?
Speaker 3 (14:58):
get the people.
I'm trying to sell it toCincinnati too.
Speaker 2 (15:01):
Oh yeah, we got those problems, don't worry.
Yeah, we got most major cities,older major cities, especially
in the Midwest, the Rust Belt,you know where a lot of us have
those kinds of issues.
But talk a little bit about,you know, when I went to the
conference and I you know youwere there too how do you
separate yourself with yourthesis on real estate investing,
(15:24):
from other people that are outhere syndicating deals and doing
this kind of stuff?
When I went it just seemed likeeverybody was kind of doing the
same thing.
What separates you and yourthesis from what a lot of these
other people are out here doing?
Speaker 3 (15:37):
Yeah, so what separates me currently is I'm
not actually running a fund yet.
I'm working on building my fund.
But what separates me is youreally have to create a vision
and goals and a mission thataligns with a specific group of
investors.
Everyone may be similar, butlike there can be like a couple
(16:00):
of few differences within theirfund or syndication that okay,
well, they may have that kind ofreturn, but maybe their values
don't align.
So like maybe you can go toBlackRock or maybe you can go to
the next biggest hedge fund,but like which values or which
kind of assets or what kind oftime in their life are they into
(16:23):
?
like wanting to invest intosome private equity funds, or is
it a real estate fund or a debtfund where people are going to
lend out your money?
you got to really understandinvestment criteria.
So what I'm going to be workingon is creating a fund of funds.
So raising money to be able todiversify into those three main
(16:44):
other kinds of funds where theycan have diversified kinds of
asset classes with backed namesis what I'm going to be doing.
Speaker 2 (16:54):
Love it Well and you're also focused in a
particular area.
You're trying to buy housesright now in Southeast Michigan
is what it sounds like, and yeah, that's a pretty big population
, so you have a lot of housesyou could purchase potentially.
Speaker 3 (17:08):
Yeah, definitely I'm interested in definitely
Southeast Michigan, but itreally doesn't have to be
Southeast Michigan because itreally comes down to
metropolitan areas and being agood deal.
But a good deal for me is itcan be a bad deal to someone
(17:28):
else and a good deal to someoneelse could be a bad deal to me.
So you got to come down to acriteria, so like for my
personal buys and not likeraising money and doing funds
and all that stuff.
I'm mainly looking to purchasesubject to deals, seller
financing, and build a buy andhold portfolio for either long
(17:49):
term rentals or I can wrap itand pretty much become the
lender on it and create termswith the original seller and
then create a second note whereI find someone who wants to live
in the property and increase adown payment in a monthly
payment.
Speaker 2 (18:05):
So you're kind of doing the pace morbidly kind of
model there where you're lookingfor the subject to properties
where somebody's like, hey, look, I'm trying to sell my house,
Maybe it's sitting on the marketa little longer than they like,
and you come in and you say,look, I'll take over the payment
.
You just hand the deed over tome, write the deed over to me,
So now you own the property,right?
(18:27):
The bank may or may not callthe you know have a problem with
that, And a lot of cases theydon't.
According to PACE I think thevast majority of those.
The bank never bothers anybodyas long as they keep making the
payments And essentially.
And then you work the sellerinto the deal a little bit,
(18:47):
right?
Maybe you give them a littlesomething to, you know, for
allowing you to essentially takeover their mortgage payments,
because you're a lot of times,what's going to happen, guys, is
these people got these loanswhen rates were really really
good 3.5, you know, to 5% maybein a lot of cases, yeah, why
would you buy them?
(19:07):
2.1.
That's crazy.
That's crazy.
2.1%.
I don't even know why you givethat loan up.
That just seems crazy, but yeah, but what's happening is is
you're taking over theirpayments.
You're not refinancing themortgage, right?
You're just taking over thepayments.
And the good thing about this,too, is is they've probably paid
down a big chunk of the PrinceBarry, right?
Speaker 3 (19:28):
Yep, definitely It's a case-by-case scenario, but
most of the time it's definitelya couple years at least, but it
depends on the scenario beforeclosure, or like what I come
across.
A lot is like veterans who wantto, or have to, relocate or
going back home have no equity,since they put $0 down and just
(19:52):
need to get out of their houseand want to do it immediately.
Oh, wow.
Speaker 2 (19:58):
So it's really, you know, it's a thing where people
are kind of in a hurry to sellbecause I, you know, personally
I would just wait it out.
You know, i'd be like ah, i'mno big hurry, i'll just wait it
out.
You know, if I'm trying to sellmy house, i wouldn't, you know,
want anybody taking over my, my, my payments, right.
So it's like man, what if theymiss?
what if they miss the paymenton this thing?
(20:20):
and then I'm screwed and I'vegot another house I'm paying on,
and what are the documents youhave to sign in order to kind of
put their mind at ease withthat whole thing?
Speaker 3 (20:29):
Yeah.
So we set up a servicingcompany, a third-party servicing
company that would be connectedto our LLC, making the payments
to the mortgage company And bytheir choice they can decide how
to get notified every monthwhen we make the payment or if
we didn't make the payment Andin the worst case scenario, we
(20:50):
fell off the face of the earthand stopped paying them.
We signed something called adeed and lieu foreclosure and a
performance deed, which means ifwe were ever 60 days late on
that either mortgage balance orif it was a regular seller
finance on their note they wouldget the deed ownership of the
property back through a quickclaim deed and they keep the
(21:12):
down payment.
Speaker 2 (21:12):
We gave them any rehab, we did any appreciation
with the property, And that'sreally their best case scenario,
in my opinion, And a lot ofcases too, there's a tenant in
there, so really they may noteven have to worry about making
their payment because chancesare you've got a tenant in their
paying.
But I mean, i guess if you'renot paying it, then maybe maybe
(21:33):
the tenant's gone Somethingwrong, maybe something happened.
And what would scare me is islike oh man, this company put a
tenant in there, they stoppedpaying, the tenant destroys the
property And now I got to go inthere and fix up things.
You know, that would freak meout a little bit, and I guess
they've got to be able to trustyou and you've got to have a
long enough track record or atleast have a really good plan in
(21:55):
place to show them that, hey,i'm going to put your mind at
ease here.
This is, you know, this is whatwe've got going on.
We know what we're doing.
You act professional.
You've got all your paperworklined up.
You don't seem like you'refumbling through things.
I mean, that could probablyhelp as well, and I'm guessing
that's something you've beendoing for a while.
Speaker 3 (22:14):
Yep, you got to build credibility within the
relationship.
Even though I may not have thelargest credibility at this
young age.
The key thing is leveragingothers credibility.
So like I actually justpurchased my first sub two deal
the other day, but I had tobuild up some credibility with
(22:34):
the seller, so I brought on apartner who's already done 30 in
the past few months And thathelped build the trust that they
knew I could actually get thedeal done.
Speaker 2 (22:47):
I love it.
So what else are you doingoutside of the sub two stuff?
Are you doing any kind of buyand hold and flip type stuff?
Speaker 3 (22:55):
For flips.
I don't really want to do itanymore But it really depends on
the deal.
Like I did one flip in the pastthat I finished up in March and
bought that in October for like160,000 and got the private
money lender to fund it 100% andjust had to pay closing costs
(23:19):
And they funded the rehab And wewere into it about 80K with
like the realtor fees andeverything else When we sold it
and then we walked away withabout 20K each.
But different roadblocks alongthe way that you have to learn
from with the contractors, withdoing wrong work and Oh God,
(23:42):
yeah, Yeah.
Speaker 2 (23:44):
Do you ever have to deal with architects too?
Speaker 3 (23:47):
Uh, not on that specific building, but uh, yeah,
i talked to a few differentarchitects that um kind of were
mentoring me a little bit, basedon building some apartment
buildings in the past And uh, mydad's actually a project
manager with a constructioncompany, so now it's getting a
(24:11):
little bit better when we usetheir company.
But like, like we have adifferent kinds of crews.
So like we got like sort of theunlicensed crew with, like the
Mexicans, and then we got theactual licensed people who can
pull the permits or whatever weneed to do, or he sells, like
(24:31):
roofs or whatever.
Speaker 2 (24:33):
So you got to mix up both.
Yeah, you got to mix up both,because you do need somebody to
kind of GC the whole thing andmake sure things are getting
done correctly.
And it's good that you have adad in the business.
So how, how difficult do youthink it would be for someone
who is starting out in thisbusiness, who may not have a
father, who was involved in realestate, you know, doesn't
understand how constructionworks?
(24:54):
You know you're just out heredoing whatever.
Maybe your dad was a, i don'tknow.
Your dad was a doctor and yourmom was an attorney, you know.
Well, i guess then you'd havecash to be able to do stuff,
probably, but you know they,they were just completely
unrelated in this, in the field.
Like, do you think it would bemuch, much more difficult for
you to be able to do this?
And if you were doing it andyou didn't have somebody in the
(25:15):
business, how would you networkand find the right people to
help you with these, with thesebuildouts?
Speaker 3 (25:20):
Yeah, well, i would go to local meetups, definitely,
and find everyone that actuallyhosts like a monthly meetup,
and there's usually a fewdifferent ones in each city.
There's probably like four overhere in Michigan that I go to,
and that's the first step Andthen kind of just asking
(25:42):
questions constantly.
Really joining these Facebookgroups is where you can find
them or you can just Google it.
These people are everywhere.
Speaker 2 (25:51):
And what are some of the searches you would use to
find them?
Speaker 3 (25:54):
I would use, like real estate investors Michigan,
metro, detroit or whatever cityyou're really in Like you can do
that on Google, facebook, oryou can search up wholesalers,
you can search up contractors,depending on who you're looking
for, and you can get advice fromdifferent kinds of people doing
different things in theindustry.
Speaker 2 (26:14):
Do you have a group of wholesalers that you work
with that send you deals?
Speaker 3 (26:19):
Yeah, Well, pretty much it's not like a specific
one group, but like I do get alot of my people from the Pace
Morby group and kind of justfeed off of his network, I'd say
Because there's 100,000 peoplein his Facebook group.
There's deals like people postthere all day long.
You can scroll through there.
(26:40):
You'll find sub two dealsseller finance deals.
You can just make a post, Likewhen I first started wanting to
network, I made a post saying Ican help you negotiate deals and
find buyers and analyze dealsAnd then got 300 people wanting
to chat with me.
Wow And yeah.
(27:02):
So you just got to make thepost at the right time and
actually provide value to peopleor ask for value.
You can't be scared to takeaction.
Speaker 2 (27:12):
Well, and explain the good thing about the sub two
mortgage, because people mightbe listening to this and still a
little foggy is, like you and Iboth know, because you know
we're at the conference andyou're obviously in the Pace
Morby group, but yeah, you know,explain to people why you would
even want, as an investor, do asub two mortgage.
Speaker 3 (27:30):
Yeah.
So, like some of the mainreasons is like you don't have
to use any of your credit orcredentials or anything.
You don't have to show up thatyou make any money in general.
And let's say I'll give you aquick example I got a $100,000
house.
They want $10,000 down and it's500 a month.
I don't want to put that$10,000 down plus closing costs
(27:54):
myself.
I'm going to go find someonewho wants like 10% cash on cash
return or like a 12% interestrate and give them interest.
Only Now I'm getting into adeal for free And I know that
there is a certain amount ofcash flow and I can scale up and
buy more properties because Idon't have to use any of my own
(28:15):
money.
Speaker 2 (28:16):
So you're finding investors who want, you know, a
decent return on their money,and then they're the ones who
put up the money because youdon't have $10,000 sitting
around.
Your 19 years old, you knowwell, maybe you do now because
you've been doing this for awhile, but, but you know, you
don't have just 20, 10, $20,000sitting around, like I mean,
most houses.
And that was a $100,000 deal.
Imagine if you were doing athree or $400,000 deal.
(28:37):
I'm sure, yeah, over the pastfew years, people's equity has
gone up and they're going to,they're going to want more,
right?
They're going to say, look,i've got $100,000 in equity in
this house.
You know, if I go to sell it,that's how much I'm going to
make.
So what are you going to do forme?
Right?
So you got to be able to findinvestors or at least have
enough cash sitting around thatyou could actually make that
(28:59):
deal.
Speaker 3 (29:00):
Yeah, investors, family or friends just network
and ask Like that's what?
like with my first deal that Ijust did, i had to leverage
someone else it's credibility tobegin the track record of the
buying sub two and using otherpeople's money.
But then now I can say that Iuse other people's money on this
(29:22):
deal.
Now I can when I'm finding adeal and I know these other
lenders and they want to seecredibility or ask for a
referral does this guy pay ontime or anything?
Speaker 2 (29:33):
They can go to them and see that he's viable to do
more deals with us Nice, andthen I'm guessing that also say
you had a deal and it started tonot look so good.
Maybe the tenants stop payingrent.
You don't have enough money tokind of cover it.
You could probably go into yournetwork of investors and say
hey man, i did this sub two deal.
(29:53):
I don't think I'm going to beable to pay the rent three
months from now.
Do you guys want to take thisthing over?
You know you could probably dothat too.
That way they don't lose faithin you.
You've got a partner that cankind of be your backstop, so
that you're not going in alone.
And you say to them like hey,look, i'm going to want to
leverage your credibility, butif the deal doesn't work out,
(30:13):
you could take over these deals.
Speaker 3 (30:15):
Yeah, exactly, or like yeah, well, the lender
could take it over, or you canjust get it sold and get them
paid back.
If that depends on who thelender is and what their needs
are.
These maybe like for differentkinds of deals.
Like for this rap deal, thelender is taking 50% equity.
(30:37):
So well, technically it was a$30,000 down payment with, like
the rehab and closing costs inthe cash, the seller and
wholesaler.
So then we pretty much getsomeone to actually live in the
property, we make them do therepairs, we just do a clean out
(30:58):
And then we get an extra downpayment.
So we're going to list it for40k And then we can give the
lender their 30k And then wecome to an agreement on whatever
profits on top of that is split50 50.
And the payments like 1200.
And we're going to increase itto about 2000.
(31:19):
You don't have any managementin the property And you give the
new buyer the deed And now it'sstraight cash flow and you
split 50 50 on the net profit.
Speaker 2 (31:30):
Nice, we seem like you know what you're talking
about.
You got your stuff together onthis.
You must have really paidattention when, when Pace was
going over his stuff and youprobably gone through and you
know you've probably seen abunch of videos and trainings
and all that other stuff, do you?
do you have your real estatelicense?
you're playing on getting yourreal estate license.
Speaker 3 (31:49):
I do not have my real estate license and I do not
plan on getting that.
I think it could be useful forcertain kinds of people, but
overall, based on what I'm doing, is just a completely different
operation.
I'd rather just refer anyonethat wants to list their home to
my dad and get paid a referralfee to that.
Speaker 2 (32:11):
There you go.
Hey, yeah, so you got a systemin place.
So what do you plan on doingwith this?
Like, i mean, what do you, whatdo you think your potential is
for something like this?
There's a lot of people thatyou know they're like I don't
know if I want to get into this.
I don't know if I want to getinto that.
Is it going to replace myincome?
What do you think yourpotential could be?
Like, say, you know, what doyou think your monthly revenue
(32:36):
could be that you personallycould manage before you'd have
to go out and start hiringpeople?
Like, what, what could you beprofiting after you pay off?
you know you you're going togive a little bit of money to
the homeowners and things likethat, so that's going to take a
little bit of money away.
What do you think you could getto per month?
Speaker 3 (32:53):
Like monthly cash flow, like my actual goal for
the year, or like yeah save forthis year save for this year,
cool Yeah.
So my monthly cash flow goalfor the year is a 5,000, and
passive cash flow just fromproperties.
Speaker 2 (33:09):
And when did you start doing this?
I started last June, last June.
So now you could be, you wouldhave a $60,000 year job.
that's completely passive.
You don't have to go to it.
All you do is go out and findhouses, find deals.
Speaker 3 (33:24):
Yeah, and that's not with the wholesale operation or
anything like that.
That's mainly just the sub twoand seller financing with family
properties and not fixed andflipping or anything like that.
Speaker 2 (33:38):
So the potential for this.
I mean you could multiple.
You could earn multiplehundreds of thousands of dollars
a year in passive income, andthere's a lot of people out
there doing it, so it's possible.
And you know, you didn't, yeah,and you didn't have to go to
college.
You used a creative financingway to purchase real estate.
(33:59):
You're building a network ofpeople that are interested in
real estate wholesalers,contractors, real estate people.
You know, people like PACE thatare into this kind of stuff So
you're able to create yourself anice little chunk of income
that then can then be turnedinto investments and other
(34:21):
things if you really wanted to.
So you could use your own cashat some point to start
purchasing these properties, oryou could develop properties, or
you could take that money andyou could put it in the stock
market.
Speaker 3 (34:33):
Yeah, or I can lend it out.
Speaker 2 (34:35):
Or you can.
Yeah, then you could turnaround and be the investor,
right, so you can just continueleveling up and leveling up and
changing the game.
Speaker 3 (34:43):
Yeah and it's awesome .
Yeah, i would have wanted to.
Probably like stock market islike I'll probably do a few
different things, but like whatI'm thinking, what I'm going to
do with the passive cash flowand everything is invest into
more properties and then moveinto businesses, like actually
buying the businesses andputting operators in and scaling
(35:04):
those.
Speaker 2 (35:05):
That's a really good idea.
Yeah, on the last podcast wehad a guy who sold multiple
businesses, landscaping and abunch of other stuff.
Now he owns a whole bunch ofrestaurants, but that's exactly
what he did.
I mean, he doesn't even hedoesn't know any grass.
You know he just he'll go outand find a business that's, you
know, making money, somebody'sinterested in selling.
Maybe it's mismanaged a littlebit or it's managed okay, but
they've already got customersand you know, maybe they need to
(35:27):
go on some sort of deal whereyou, you know you cut their
grass every month and they justpay a flat amount every single
month instead of every once in awhile.
They call you.
You know some subscription orsomething like that, some way
that you can figure out whatkind of income you've got coming
in every single month.
And it's a business that ismore attractive to maybe a
(35:48):
larger investor and you just goin there and you fix the
operations up a little bit.
You stick somebody in there andnext thing you know you're
selling that business.
You maybe you buy it for 100grand and you sell it for 500
grand and you know there's a lotof those out there or you buy
businesses that are related towhat you're doing.
You know, and now you've got alandscaping company.
Every time you need alandscaping company, you've got
(36:09):
a interior designer, you've got.
You know I don't know about anarchitecture firm, but but maybe
contractors.
Speaker 3 (36:15):
You know all that painters Yeah, definitely,
that's, uh, definitely.
what I've thought about doingfirst, like staying, if I do buy
businesses and or when I do, isreally like title companies and
these contractors and creatingthe lending business is some of
the first steps, i'd say, andthen you can branch off into
(36:37):
other industries because youhave to focus on building the
first powerhouse.
Speaker 2 (36:42):
That's right, the money maker.
Yeah, that's right.
I like it, man, i like the wayyou think and this is, uh, this
has been a great conversation.
So tell people you know ifanybody's out there wants to
sell their house, or if you knowsomebody says hey, man, i want,
i want my kid to talk to you.
How do they find you?
Speaker 3 (36:58):
Yeah, everyone can find me on Instagram, facebook
or you can even reach out to mynumber, but at Justin Pekel,
p-i-c-k-e-l-l.
Pickle, whatever is preferredfor you guys.
And, um, you can call or textme whenever you guys have some
deals or wondering aboutentrepreneurship and how we can
(37:21):
collaborate in any way for allof us to grow.
Speaker 2 (37:24):
I love it, man.
This is awesome.
Well, i appreciate you being onthe podcast.
I'm glad you came up to me andchatted with me, man, and uh,
yeah, if I'm ever in Detroit,i'm gonna have to hunt you guys
down and maybe we get a lunch orsomething.
Your dad was awesome, man.
he was really cool, yeahdefinitely.
Speaker 3 (37:38):
Well, let's make it happen.
Uh, we'll go to the nicesthotel in Detroit that you said
Yeah, yeah, that's right man,they took care of me at that
hotel.
Speaker 2 (37:46):
I couldn't believe it .
I was like man, what a nicesthotel I've stayed at and any of
my trips was in Detroit of allplaces.
It was crazy.
It's like a Marriott orsomething, i think, or maybe a
Hilton downtown.
But uh, yeah, it was.
It was awesome.
I couldn't believe it.
And then if you guys are everin Cincinnati, man hit me up and
uh, yeah, we'll all gettogether, we'll take you and
your dad out or something.
Speaker 3 (38:06):
Awesome.
Looking forward to it, adam Allright.
Justin, it's been a pleasure.
thank you for having me and uhlooking forward to seeing what
we can do.
Yes, sir.
Speaker 2 (38:15):
Yes, sir, all right, see ya.
Thanks for joining us on thisweek's episode of Side Hustle
City.
Well, you've heard from ourguests.
now let's hear from you.
Join our community on Facebook,side Hustle City.
It's a group where people shareideas, share their
inspirational stories andmotivate each other to be
successful and turn their sidehustle into their main hustle.
(38:36):
We'll see you there and we'llsee you next week on the show.
Thank you.
Welcome to Side Hustle City And thanks for
joining us.
Our goal is to help you connectto real people who found
success turning their sidehustle into a main hustle, and
we hope you can too.
I'm Adam Kaler.
I'm joined by Kyle Stevy, myco-host.
Let's get started, all right.
(00:32):
Welcome back everybody to theSide Hustle City podcast.
And guys, i got a special guesttoday.
We actually met at a conferencedown in Miami.
He randomly came up and startedtalking to me.
Justin Pickle, how are you?
doing man.
Speaker 3 (00:46):
I'm doing great.
How are you, Adam?
It's a pleasure to be on theshow and looking forward to
seeing what we can do to helpthe world.
Speaker 2 (00:56):
Thanks for reaching out.
Wanted to be on the podcast inthe first place And we were
standing in line for a booksigning down in Miami, in
Winwood.
I was talking to a broker ladywho's from Miami, and a buddy of
mine was with me too, and youjust kind of randomly came up
and you're a young guy, right.
What were you?
18, 19?
(01:17):
, 19.
, 19.
Yeah, yeah.
So I mean you just had someinitiative.
You're just like hey, i'mstanding in line.
I might as well start talkingto people, right.
Speaker 3 (01:26):
Yep, exactly Your network is your net worth.
You just got to figure out howyou can collaborate to see what
value you can bring to everyindividual.
Speaker 2 (01:36):
That's right, That's right.
So what got you into?
I know your dad had mentionedhe was in real estate and when
we were talking and you guys areup in Michigan, What got you I
mean outside of, maybe, yourfather what got you kind of
involved in this real estategame?
Speaker 3 (01:54):
Yeah, just overall, wanting to pursue on the
entrepreneurial side of thingsand really not wanting to go to
college and be taught bydifferent mentors of stuff
they're not doing actually.
So I want to really learn abouteverything about business and
real estate made the most senseto begin to build wealth.
(02:18):
I did do stock market daytrading for a few years before
real estate and a little bit ofthat on and off, but this is
mainly the main pursuit that I'mworking on.
Nice, i'm working on buildingthe wholesale operation and
build my buy and hold portfolio.
Speaker 2 (02:39):
I love it, man.
So, yeah, i mean real estate isreally the way to go.
I mean, at the end of the day,you got to have some kind of
hard asset And I think for mostpeople, if you're just starting
out, real estate is probably oneof the best ways to leverage
kind of a small investment andbe able to, like, have access to
a much larger asset that'sworth something that you can
(03:02):
make money at.
So you know, for a $3,000investment you can control, say
you know a $200,000 asset that'sgoing to bring you in, say,
$2,400 a month in revenue.
Say you get a four family orsomething like that, i mean
you're going to be able to paythat small investment back in a
matter of no time And peopledon't understand this.
(03:24):
And now you've got somethingthat you know you don't have to
pay for, necessarily outside ofyour down payment.
That's going to be bringing youin residual income, as long as
you have good tenants and theydon't tear up your place and
constantly move out, which I'vehad those problems and I'm sure
at some point you will too.
But you just got to pursue man,you just got to fight through
(03:44):
that stuff, you know.
Speaker 3 (03:46):
A hundred percent.
That's what it's about Reallyjust got to know what kind of
investment makes most sense foryour personality as an investor,
to know that your goals arealigned and actually knowing how
much time and energy and moneyit'll take to achieve the goal
you're trying to hit.
Speaker 2 (04:06):
I love it, man.
Well, you got your head in theright place, i know that, and I
mean you've already tried daytrading and everything.
How'd that go?
What just made you decide it?
Maybe this is too much work, oryou know what got you kind of
out of that, or do you stillplay around with it a little bit
?
Speaker 3 (04:22):
Not really much, but pretty much I did enjoy it a lot
and it helped like understand,like really going back into it,
Like if I probably didn't dothat it wouldn't have built my
mindset enough for theentrepreneurial journey, because
it really taught me a lot abouthandling my emotions, staying
(04:46):
disciplined, being greedy, beingfearful of the marketplace and
different things that can comealong and damage what you're
trying to head towards Mainlyfocusing on charts before.
So it's a little different withimplementing that kind of stuff
into real estate.
But the reason I shifted awayfrom it is I made good money but
(05:08):
the market was just not reallysuper volatile, Like kind of
just hit some bigger plays offof it.
That helped me make money forthe couple years I was doing it,
but it was more of like aroller coaster journey, So it's
not as stable as if you're goinginto real estate.
(05:28):
You know you're getting aguaranteed check because you did
your due diligence.
Speaker 2 (05:33):
Yes, And you can't really control those factors.
I mean, really it's a gamble Alot of times when you're day
trading and you're, I meanyou're destined and you got a
50% chance.
Is it going to go up or is itgoing to go down today,
especially if you're doing likeoptions trading or something.
Speaker 3 (05:46):
That was, that's what I was doing, yeah.
Speaker 2 (05:49):
And it can be really, really expensive to play around
with options unless you reallyknow what you're doing.
And you know, the good thing, ithink, for you is that at some
point you're going to need tofigure out where am I going to
put all these gains for my realestate.
How am I going to invest thesegains?
You already understand thestock market.
You already understand how toplay the stock market.
(06:09):
You understand, you probablyhave a bunch of symbols dancing
around your head.
You, i could tell you, hey,what's Cisco's symbol?
You know it's CSEO, like.
What's Microsoft, msft, like.
you just know that right.
So, yeah, and you know the way,these some of the better stocks
, i mean if you traded for a fewyears.
Unfortunately, you tradedduring a time when our country's
kind of heading into arecession right after COVID, so
(06:30):
that that probably sucked foryou.
We're not necessarily in a bullmarket After we were in such a
great bull market, for I don'tknow the last 10 years, 20 years
.
Speaker 3 (06:40):
I started with the bull market.
Speaker 2 (06:41):
It was kind of hit, i'd say, okay, well, that was
good, well, at least you gotsome of that.
But you know, playing the downs, playing things as the market's
going down's a lot harder.
You know everybody's smart whenthe market's going up, you know
, and when it's going down it'sa little, a little bit more
trouble.
But to your point, real estateyou can.
You know you're going to getthis money.
(07:01):
Well, at least you hope you getthe money, as long as people
pay the rent on time.
But you know you can predictwhat's going on in real estate a
lot easier than you can withwith the stock market.
And you know, being such a youngguy I mean 19 years old,
already out there, i mean, youknow my co-founder in one of my
businesses.
I think he bought his firsthouse when he was 18.
(07:21):
He started becoming a realestate agent, you know, and and
he's always wanted to be anentrepreneur and he's been very
successful at it And he helpedout a lot of people, including
myself, bringing me into hisidea and just being so you know,
dedicated to what he's involvedin and not giving up even
though people said, hey, weshould.
You know this isn't going towork.
(07:41):
Da, da, da.
You know he just keeps goingwith it.
Right, you just got to be.
You gotta have that grit, yougotta be able to keep moving
forward with stuff.
And I always ask you know you,being a young guy not too long
out of high school, what wasyour experience in school?
So you know every old person.
You know, like me, we alwayslook at the generation before,
(08:01):
like, ah, generation is lazy.
And then the generation afterthat, oh my God, that generation
is even worse than the previousgeneration.
What are they teaching thesekids in the schools?
They're not teaching them to beself-sufficient.
They're not teaching themcritical thinking skills.
You know, to me I would hate tosend a kid to like a public
school now.
Speaker 3 (08:20):
With my school experience on like the actual
education of what they'reteaching.
I'd say like, maybe math classhelped me understand some
analytical perspectives andstuff.
I would say, like socialstudies, i didn't really learn
much.
If they're going to teachsomething about history, they
(08:40):
need to focus on something thatpeople can utilize within their
life really And it needs to bebroader towards different people
who want to go differentdirections in their life And it
needs to be like more choiceselected to as you're going up
in the education system.
(09:01):
you really need to be able topick your path, not just you go
into finish high school, thenyou can start picking your path.
You got to be able to yeah, yougot to start picking your path
in like elementary school, not ajob or anything, but you need
to figure out what kind ofactual skills and different
things you want to learn.
Speaker 2 (09:21):
Well, i've been, i've been looking at it and I've
thought about this too.
It's almost like if you couldgive people personality tests,
right, because a lot of theseyou know there's 16 different
personalities, myers-briggspersonalities, and I believe in
it.
Some people say it's like Idon't know, weird or like
astrology almost, but you knowthere's science behind it And I
(09:42):
think there are personalitytypes that are just geared to be
entrepreneurs.
We're not workers Like you.
Go out in the workforce, you geta job, maybe you go to college,
you know you're always like, ah, this really isn't for me.
I'm going to college but Ireally don't want to work for
somebody else, but you do itanyway because that's what
you're supposed to do, you know.
(10:02):
Then you get out, you work inthe workforce for a couple years
and you're just not performingbecause you're not a follower.
You're just not one of thesepeople.
You got ideas, you want toshare them, but you're not that
high up the totem pole yet towhere they care about what you
got to say.
You know, and it just kind ofputs you off when it comes to
working for other people.
And then the idea of justsitting there working away for
(10:24):
the next 40 years just toscratch and claw your way to the
top and fight off all thehaters and the company that you
know.
They're trying to do the samething And it just seems like I
don't know, like you're puttingin all that effort for what?
Like to work for somebody elseand make them rich, and then
maybe you save up a few nickelsevery once in a while and you
could throw it in the stockmarket And I don't know.
(10:45):
You retire at 65.
They give you a little plaqueand a gold watch and off you go
to enjoy your life with badknees and you can't see very
good out of one of your eyes.
So like I mean, that justdoesn't seem like something that
appealed to me And some people.
It's for some people which isnot for me, and I'm guessing
it's not something for youeither.
Speaker 3 (11:04):
No, sir, definitely you got to really figure out
what your personality type isand understand how it can be
aligned with the goals you'retrying to achieve, and like how
you can utilize that to helpother people is what I'm
thinking, because most peopleare not even familiar with their
(11:26):
skills and what they're doingon a day-to-day basis.
They just took on what theschool system or their family
and friends told them into theirbelief system And now they're
running a program and live intheir life that way.
Speaker 2 (11:40):
Yeah, yeah, i mean it's, and you got to be able to
unlock these things And it's notsomething I think you can even
learn in school.
I mean they could.
They're teaching you the basics, right.
They're teaching you just, it'sessentially daycare And you
learn some things that you'reprobably not like.
50% of what you learned you'reprobably never going to use
again.
I maybe I'm wrong.
I haven't been in, you know,high school or any of that,
(12:02):
since 1995.
I'd say more than 50%.
Well, yeah, okay, so.
So you're using some of thestuff.
It really depends on the typeof school you go to.
I mean, i went to an inner citypublic school and you know I
was lucky that I went to onethat was a magnet school that
was focused on the arts, becausenow I own an ad agency and that
you know design skills andthings like that led me into
(12:23):
start up a company with someother guys because they needed
my skill set, and then that ledone thing, led to the other and
now I'm doing all right.
But not everybody has a path inschool doesn't really
necessarily help you select apath.
You know, when you're a kidyou're like, hey, somebody says,
hey, what do you want to bewhen you grow up, justin?
Oh, i want to be a fireman, iwant to be a policeman, i want
(12:45):
to be a doctor, i want to be alawyer, because those are the
only things you're exposed to.
Yeah, those are the only thingsthat you really know that are
out there, and school doesn'tnecessarily do a very good job
of teaching you about all theother wild stuff.
What's a wholesaler, a realwholesaler?
you're not going to learn thatin school right.
I mean the stuff you're doingnow.
(13:05):
You know how does a real, howdoes real estate investment work
, like the things that actuallyhelp people really build wealth.
They don't really teach youabout you know, because they're
teachers that you know theycould teach you to be a teacher,
maybe a mathematician, maybe ahistorian, but you know things
that are kind of outside the box, like what you're doing now.
(13:26):
You didn't learn any of that inschool.
I mean, you had to watch yourdad, i'm guessing, right, yeah.
Speaker 3 (13:31):
I watched my dad definitely and learned tons from
his experiences.
that were successes andmistakes and definitely better
to learn from other mistakesthan do it on your own And that
helped a lot.
And that's more of a schoolbeing within the experience And
just even though, like someinvestors are just like, how am
(13:54):
I supposed to get experience inreal estate?
Just find someone who's localin your network of real estate
investors.
Oh, you're doing flips.
Could I like maybe come to thehouse a couple of times when
you're talking to thecontractors, like reviewing
stuff or something that actuallyyou're trying to learn and
figure out about their business.
(14:15):
it could be any part of it.
How do they find that deal Orhow do they find that good
contractor and build arelationship?
See, that's a big challenge.
That's a big challenge.
Speaker 2 (14:25):
Finding contractors, especially right now.
well, when the job market wasgoing really, really well and
you had a lot of home buildersout there scooping up all the
good contractors, it was hardfor, like, small investors to
find people like that.
You know, that's the one thing.
That's the one limitation toreal estate investing is can you
get the projects done?
Like a lot of times there's noshortage of buildings and
(14:48):
properties, especially up inMichigan.
I mean you go to Detroit, Imean there's probably tons and
tons of properties that coulduse some TLC, 100%.
But can you?
Speaker 3 (14:58):
get the people.
I'm trying to sell it toCincinnati too.
Speaker 2 (15:01):
Oh yeah, we got those problems, don't worry.
Yeah, we got most major cities,older major cities, especially
in the Midwest, the Rust Belt,you know where a lot of us have
those kinds of issues.
But talk a little bit about,you know, when I went to the
conference and I you know youwere there too how do you
separate yourself with yourthesis on real estate investing,
(15:24):
from other people that are outhere syndicating deals and doing
this kind of stuff?
When I went it just seemed likeeverybody was kind of doing the
same thing.
What separates you and yourthesis from what a lot of these
other people are out here doing?
Speaker 3 (15:37):
Yeah, so what separates me currently is I'm
not actually running a fund yet.
I'm working on building my fund.
But what separates me is youreally have to create a vision
and goals and a mission thataligns with a specific group of
investors.
Everyone may be similar, butlike there can be like a couple
(16:00):
of few differences within theirfund or syndication that okay,
well, they may have that kind ofreturn, but maybe their values
don't align.
So like maybe you can go toBlackRock or maybe you can go to
the next biggest hedge fund,but like which values or which
kind of assets or what kind oftime in their life are they into
(16:23):
?
like wanting to invest intosome private equity funds, or is
it a real estate fund or a debtfund where people are going to
lend out your money?
you got to really understandinvestment criteria.
So what I'm going to be workingon is creating a fund of funds.
So raising money to be able todiversify into those three main
(16:44):
other kinds of funds where theycan have diversified kinds of
asset classes with backed namesis what I'm going to be doing.
Speaker 2 (16:54):
Love it Well and you're also focused in a
particular area.
You're trying to buy housesright now in Southeast Michigan
is what it sounds like, and yeah, that's a pretty big population
, so you have a lot of housesyou could purchase potentially.
Speaker 3 (17:08):
Yeah, definitely I'm interested in definitely
Southeast Michigan, but itreally doesn't have to be
Southeast Michigan because itreally comes down to
metropolitan areas and being agood deal.
But a good deal for me is itcan be a bad deal to someone
(17:28):
else and a good deal to someoneelse could be a bad deal to me.
So you got to come down to acriteria, so like for my
personal buys and not likeraising money and doing funds
and all that stuff.
I'm mainly looking to purchasesubject to deals, seller
financing, and build a buy andhold portfolio for either long
(17:49):
term rentals or I can wrap itand pretty much become the
lender on it and create termswith the original seller and
then create a second note whereI find someone who wants to live
in the property and increase adown payment in a monthly
payment.
Speaker 2 (18:05):
So you're kind of doing the pace morbidly kind of
model there where you're lookingfor the subject to properties
where somebody's like, hey, look, I'm trying to sell my house,
Maybe it's sitting on the marketa little longer than they like,
and you come in and you say,look, I'll take over the payment
.
You just hand the deed over tome, write the deed over to me,
So now you own the property,right?
(18:27):
The bank may or may not callthe you know have a problem with
that, And a lot of cases theydon't.
According to PACE I think thevast majority of those.
The bank never bothers anybodyas long as they keep making the
payments And essentially.
And then you work the sellerinto the deal a little bit,
(18:47):
right?
Maybe you give them a littlesomething to, you know, for
allowing you to essentially takeover their mortgage payments,
because you're a lot of times,what's going to happen, guys, is
these people got these loanswhen rates were really really
good 3.5, you know, to 5% maybein a lot of cases, yeah, why
would you buy them?
(19:07):
2.1.
That's crazy.
That's crazy.
2.1%.
I don't even know why you givethat loan up.
That just seems crazy, but yeah, but what's happening is is
you're taking over theirpayments.
You're not refinancing themortgage, right?
You're just taking over thepayments.
And the good thing about this,too, is is they've probably paid
down a big chunk of the PrinceBarry, right?
Speaker 3 (19:28):
Yep, definitely It's a case-by-case scenario, but
most of the time it's definitelya couple years at least, but it
depends on the scenario beforeclosure, or like what I come
across.
A lot is like veterans who wantto, or have to, relocate or
going back home have no equity,since they put $0 down and just
(19:52):
need to get out of their houseand want to do it immediately.
Oh, wow.
Speaker 2 (19:58):
So it's really, you know, it's a thing where people
are kind of in a hurry to sellbecause I, you know, personally
I would just wait it out.
You know, i'd be like ah, i'mno big hurry, i'll just wait it
out.
You know, if I'm trying to sellmy house, i wouldn't, you know,
want anybody taking over my, my, my payments, right.
So it's like man, what if theymiss?
what if they miss the paymenton this thing?
(20:20):
and then I'm screwed and I'vegot another house I'm paying on,
and what are the documents youhave to sign in order to kind of
put their mind at ease withthat whole thing?
Speaker 3 (20:29):
Yeah.
So we set up a servicingcompany, a third-party servicing
company that would be connectedto our LLC, making the payments
to the mortgage company And bytheir choice they can decide how
to get notified every monthwhen we make the payment or if
we didn't make the payment Andin the worst case scenario, we
(20:50):
fell off the face of the earthand stopped paying them.
We signed something called adeed and lieu foreclosure and a
performance deed, which means ifwe were ever 60 days late on
that either mortgage balance orif it was a regular seller
finance on their note they wouldget the deed ownership of the
property back through a quickclaim deed and they keep the
(21:12):
down payment.
Speaker 2 (21:12):
We gave them any rehab, we did any appreciation
with the property, And that'sreally their best case scenario,
in my opinion, And a lot ofcases too, there's a tenant in
there, so really they may noteven have to worry about making
their payment because chancesare you've got a tenant in their
paying.
But I mean, i guess if you'renot paying it, then maybe maybe
(21:33):
the tenant's gone Somethingwrong, maybe something happened.
And what would scare me is islike oh man, this company put a
tenant in there, they stoppedpaying, the tenant destroys the
property And now I got to go inthere and fix up things.
You know, that would freak meout a little bit, and I guess
they've got to be able to trustyou and you've got to have a
long enough track record or atleast have a really good plan in
(21:55):
place to show them that, hey,i'm going to put your mind at
ease here.
This is, you know, this is whatwe've got going on.
We know what we're doing.
You act professional.
You've got all your paperworklined up.
You don't seem like you'refumbling through things.
I mean, that could probablyhelp as well, and I'm guessing
that's something you've beendoing for a while.
Speaker 3 (22:14):
Yep, you got to build credibility within the
relationship.
Even though I may not have thelargest credibility at this
young age.
The key thing is leveragingothers credibility.
So like I actually justpurchased my first sub two deal
the other day, but I had tobuild up some credibility with
(22:34):
the seller, so I brought on apartner who's already done 30 in
the past few months And thathelped build the trust that they
knew I could actually get thedeal done.
Speaker 2 (22:47):
I love it.
So what else are you doingoutside of the sub two stuff?
Are you doing any kind of buyand hold and flip type stuff?
Speaker 3 (22:55):
For flips.
I don't really want to do itanymore But it really depends on
the deal.
Like I did one flip in the pastthat I finished up in March and
bought that in October for like160,000 and got the private
money lender to fund it 100% andjust had to pay closing costs
(23:19):
And they funded the rehab And wewere into it about 80K with
like the realtor fees andeverything else When we sold it
and then we walked away withabout 20K each.
But different roadblocks alongthe way that you have to learn
from with the contractors, withdoing wrong work and Oh God,
(23:42):
yeah, Yeah.
Speaker 2 (23:44):
Do you ever have to deal with architects too?
Speaker 3 (23:47):
Uh, not on that specific building, but uh, yeah,
i talked to a few differentarchitects that um kind of were
mentoring me a little bit, basedon building some apartment
buildings in the past And uh, mydad's actually a project
manager with a constructioncompany, so now it's getting a
(24:11):
little bit better when we usetheir company.
But like, like we have adifferent kinds of crews.
So like we got like sort of theunlicensed crew with, like the
Mexicans, and then we got theactual licensed people who can
pull the permits or whatever weneed to do, or he sells, like
(24:31):
roofs or whatever.
Speaker 2 (24:33):
So you got to mix up both.
Yeah, you got to mix up both,because you do need somebody to
kind of GC the whole thing andmake sure things are getting
done correctly.
And it's good that you have adad in the business.
So how, how difficult do youthink it would be for someone
who is starting out in thisbusiness, who may not have a
father, who was involved in realestate, you know, doesn't
understand how constructionworks?
(24:54):
You know you're just out heredoing whatever.
Maybe your dad was a, i don'tknow.
Your dad was a doctor and yourmom was an attorney, you know.
Well, i guess then you'd havecash to be able to do stuff,
probably, but you know they,they were just completely
unrelated in this, in the field.
Like, do you think it would bemuch, much more difficult for
you to be able to do this?
And if you were doing it andyou didn't have somebody in the
(25:15):
business, how would you networkand find the right people to
help you with these, with thesebuildouts?
Speaker 3 (25:20):
Yeah, well, i would go to local meetups, definitely,
and find everyone that actuallyhosts like a monthly meetup,
and there's usually a fewdifferent ones in each city.
There's probably like four overhere in Michigan that I go to,
and that's the first step Andthen kind of just asking
(25:42):
questions constantly.
Really joining these Facebookgroups is where you can find
them or you can just Google it.
These people are everywhere.
Speaker 2 (25:51):
And what are some of the searches you would use to
find them?
Speaker 3 (25:54):
I would use, like real estate investors Michigan,
metro, detroit or whatever cityyou're really in Like you can do
that on Google, facebook, oryou can search up wholesalers,
you can search up contractors,depending on who you're looking
for, and you can get advice fromdifferent kinds of people doing
different things in theindustry.
Speaker 2 (26:14):
Do you have a group of wholesalers that you work
with that send you deals?
Speaker 3 (26:19):
Yeah, Well, pretty much it's not like a specific
one group, but like I do get alot of my people from the Pace
Morby group and kind of justfeed off of his network, I'd say
Because there's 100,000 peoplein his Facebook group.
There's deals like people postthere all day long.
You can scroll through there.
(26:40):
You'll find sub two dealsseller finance deals.
You can just make a post, Likewhen I first started wanting to
network, I made a post saying Ican help you negotiate deals and
find buyers and analyze dealsAnd then got 300 people wanting
to chat with me.
Wow And yeah.
(27:02):
So you just got to make thepost at the right time and
actually provide value to peopleor ask for value.
You can't be scared to takeaction.
Speaker 2 (27:12):
Well, and explain the good thing about the sub two
mortgage, because people mightbe listening to this and still a
little foggy is, like you and Iboth know, because you know
we're at the conference andyou're obviously in the Pace
Morby group, but yeah, you know,explain to people why you would
even want, as an investor, do asub two mortgage.
Speaker 3 (27:30):
Yeah.
So, like some of the mainreasons is like you don't have
to use any of your credit orcredentials or anything.
You don't have to show up thatyou make any money in general.
And let's say I'll give you aquick example I got a $100,000
house.
They want $10,000 down and it's500 a month.
I don't want to put that$10,000 down plus closing costs
(27:54):
myself.
I'm going to go find someonewho wants like 10% cash on cash
return or like a 12% interestrate and give them interest.
Only Now I'm getting into adeal for free And I know that
there is a certain amount ofcash flow and I can scale up and
buy more properties because Idon't have to use any of my own
(28:15):
money.
Speaker 2 (28:16):
So you're finding investors who want, you know, a
decent return on their money,and then they're the ones who
put up the money because youdon't have $10,000 sitting
around.
Your 19 years old, you knowwell, maybe you do now because
you've been doing this for awhile, but, but you know, you
don't have just 20, 10, $20,000sitting around, like I mean,
most houses.
And that was a $100,000 deal.
Imagine if you were doing athree or $400,000 deal.
(28:37):
I'm sure, yeah, over the pastfew years, people's equity has
gone up and they're going to,they're going to want more,
right?
They're going to say, look,i've got $100,000 in equity in
this house.
You know, if I go to sell it,that's how much I'm going to
make.
So what are you going to do forme?
Right?
So you got to be able to findinvestors or at least have
enough cash sitting around thatyou could actually make that
(28:59):
deal.
Speaker 3 (29:00):
Yeah, investors, family or friends just network
and ask Like that's what?
like with my first deal that Ijust did, i had to leverage
someone else it's credibility tobegin the track record of the
buying sub two and using otherpeople's money.
But then now I can say that Iuse other people's money on this
(29:22):
deal.
Now I can when I'm finding adeal and I know these other
lenders and they want to seecredibility or ask for a
referral does this guy pay ontime or anything?
Speaker 2 (29:33):
They can go to them and see that he's viable to do
more deals with us Nice, andthen I'm guessing that also say
you had a deal and it started tonot look so good.
Maybe the tenants stop payingrent.
You don't have enough money tokind of cover it.
You could probably go into yournetwork of investors and say
hey man, i did this sub two deal.
(29:53):
I don't think I'm going to beable to pay the rent three
months from now.
Do you guys want to take thisthing over?
You know you could probably dothat too.
That way they don't lose faithin you.
You've got a partner that cankind of be your backstop, so
that you're not going in alone.
And you say to them like hey,look, i'm going to want to
leverage your credibility, butif the deal doesn't work out,
(30:13):
you could take over these deals.
Speaker 3 (30:15):
Yeah, exactly, or like yeah, well, the lender
could take it over, or you canjust get it sold and get them
paid back.
If that depends on who thelender is and what their needs
are.
These maybe like for differentkinds of deals.
Like for this rap deal, thelender is taking 50% equity.
(30:37):
So well, technically it was a$30,000 down payment with, like
the rehab and closing costs inthe cash, the seller and
wholesaler.
So then we pretty much getsomeone to actually live in the
property, we make them do therepairs, we just do a clean out
(30:58):
And then we get an extra downpayment.
So we're going to list it for40k And then we can give the
lender their 30k And then wecome to an agreement on whatever
profits on top of that is split50 50.
And the payments like 1200.
And we're going to increase itto about 2000.
(31:19):
You don't have any managementin the property And you give the
new buyer the deed And now it'sstraight cash flow and you
split 50 50 on the net profit.
Speaker 2 (31:30):
Nice, we seem like you know what you're talking
about.
You got your stuff together onthis.
You must have really paidattention when, when Pace was
going over his stuff and youprobably gone through and you
know you've probably seen abunch of videos and trainings
and all that other stuff, do you?
do you have your real estatelicense?
you're playing on getting yourreal estate license.
Speaker 3 (31:49):
I do not have my real estate license and I do not
plan on getting that.
I think it could be useful forcertain kinds of people, but
overall, based on what I'm doing, is just a completely different
operation.
I'd rather just refer anyonethat wants to list their home to
my dad and get paid a referralfee to that.
Speaker 2 (32:11):
There you go.
Hey, yeah, so you got a systemin place.
So what do you plan on doingwith this?
Like, i mean, what do you, whatdo you think your potential is
for something like this?
There's a lot of people thatyou know they're like I don't
know if I want to get into this.
I don't know if I want to getinto that.
Is it going to replace myincome?
What do you think yourpotential could be?
Like, say, you know, what doyou think your monthly revenue
(32:36):
could be that you personallycould manage before you'd have
to go out and start hiringpeople?
Like, what, what could you beprofiting after you pay off?
you know you you're going togive a little bit of money to
the homeowners and things likethat, so that's going to take a
little bit of money away.
What do you think you could getto per month?
Speaker 3 (32:53):
Like monthly cash flow, like my actual goal for
the year, or like yeah save forthis year save for this year,
cool Yeah.
So my monthly cash flow goalfor the year is a 5,000, and
passive cash flow just fromproperties.
Speaker 2 (33:09):
And when did you start doing this?
I started last June, last June.
So now you could be, you wouldhave a $60,000 year job.
that's completely passive.
You don't have to go to it.
All you do is go out and findhouses, find deals.
Speaker 3 (33:24):
Yeah, and that's not with the wholesale operation or
anything like that.
That's mainly just the sub twoand seller financing with family
properties and not fixed andflipping or anything like that.
Speaker 2 (33:38):
So the potential for this.
I mean you could multiple.
You could earn multiplehundreds of thousands of dollars
a year in passive income, andthere's a lot of people out
there doing it, so it's possible.
And you know, you didn't, yeah,and you didn't have to go to
college.
You used a creative financingway to purchase real estate.
(33:59):
You're building a network ofpeople that are interested in
real estate wholesalers,contractors, real estate people.
You know, people like PACE thatare into this kind of stuff So
you're able to create yourself anice little chunk of income
that then can then be turnedinto investments and other
(34:21):
things if you really wanted to.
So you could use your own cashat some point to start
purchasing these properties, oryou could develop properties, or
you could take that money andyou could put it in the stock
market.
Speaker 3 (34:33):
Yeah, or I can lend it out.
Speaker 2 (34:35):
Or you can.
Yeah, then you could turnaround and be the investor,
right, so you can just continueleveling up and leveling up and
changing the game.
Speaker 3 (34:43):
Yeah and it's awesome .
Yeah, i would have wanted to.
Probably like stock market islike I'll probably do a few
different things, but like whatI'm thinking, what I'm going to
do with the passive cash flowand everything is invest into
more properties and then moveinto businesses, like actually
buying the businesses andputting operators in and scaling
(35:04):
those.
Speaker 2 (35:05):
That's a really good idea.
Yeah, on the last podcast wehad a guy who sold multiple
businesses, landscaping and abunch of other stuff.
Now he owns a whole bunch ofrestaurants, but that's exactly
what he did.
I mean, he doesn't even hedoesn't know any grass.
You know he just he'll go outand find a business that's, you
know, making money, somebody'sinterested in selling.
Maybe it's mismanaged a littlebit or it's managed okay, but
they've already got customersand you know, maybe they need to
(35:27):
go on some sort of deal whereyou, you know you cut their
grass every month and they justpay a flat amount every single
month instead of every once in awhile.
They call you.
You know some subscription orsomething like that, some way
that you can figure out whatkind of income you've got coming
in every single month.
And it's a business that ismore attractive to maybe a
(35:48):
larger investor and you just goin there and you fix the
operations up a little bit.
You stick somebody in there andnext thing you know you're
selling that business.
You maybe you buy it for 100grand and you sell it for 500
grand and you know there's a lotof those out there or you buy
businesses that are related towhat you're doing.
You know, and now you've got alandscaping company.
Every time you need alandscaping company, you've got
(36:09):
a interior designer, you've got.
You know I don't know about anarchitecture firm, but but maybe
contractors.
Speaker 3 (36:15):
You know all that painters Yeah, definitely,
that's, uh, definitely.
what I've thought about doingfirst, like staying, if I do buy
businesses and or when I do, isreally like title companies and
these contractors and creatingthe lending business is some of
the first steps, i'd say, andthen you can branch off into
(36:37):
other industries because youhave to focus on building the
first powerhouse.
Speaker 2 (36:42):
That's right, the money maker.
Yeah, that's right.
I like it, man, i like the wayyou think and this is, uh, this
has been a great conversation.
So tell people you know ifanybody's out there wants to
sell their house, or if you knowsomebody says hey, man, i want,
i want my kid to talk to you.
How do they find you?
Speaker 3 (36:58):
Yeah, everyone can find me on Instagram, facebook
or you can even reach out to mynumber, but at Justin Pekel,
p-i-c-k-e-l-l.
Pickle, whatever is preferredfor you guys.
And, um, you can call or textme whenever you guys have some
deals or wondering aboutentrepreneurship and how we can
(37:21):
collaborate in any way for allof us to grow.
Speaker 2 (37:24):
I love it, man.
This is awesome.
Well, i appreciate you being onthe podcast.
I'm glad you came up to me andchatted with me, man, and uh,
yeah, if I'm ever in Detroit,i'm gonna have to hunt you guys
down and maybe we get a lunch orsomething.
Your dad was awesome, man.
he was really cool, yeahdefinitely.
Speaker 3 (37:38):
Well, let's make it happen.
Uh, we'll go to the nicesthotel in Detroit that you said
Yeah, yeah, that's right man,they took care of me at that
hotel.
Speaker 2 (37:46):
I couldn't believe it .
I was like man, what a nicesthotel I've stayed at and any of
my trips was in Detroit of allplaces.
It was crazy.
It's like a Marriott orsomething, i think, or maybe a
Hilton downtown.
But uh, yeah, it was.
It was awesome.
I couldn't believe it.
And then if you guys are everin Cincinnati, man hit me up and
uh, yeah, we'll all gettogether, we'll take you and
your dad out or something.
Speaker 3 (38:06):
Awesome.
Looking forward to it, adam Allright.
Justin, it's been a pleasure.
thank you for having me and uhlooking forward to seeing what
we can do.
Yes, sir.
Speaker 2 (38:15):
Yes, sir, all right, see ya.
Thanks for joining us on thisweek's episode of Side Hustle
City.
Well, you've heard from ourguests.
now let's hear from you.
Join our community on Facebook,side Hustle City.
It's a group where people shareideas, share their
inspirational stories andmotivate each other to be
successful and turn their sidehustle into their main hustle.
(38:36):
We'll see you there and we'llsee you next week on the show.
Thank you.
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