Conquering the Real Estate World: Insights from Jonathan Greene

Recently, REsimpli Podcast’s host, Brandon Barnes, has the privilege of being joined by an extraordinary guest, Jonathan Greene, a successful real estate investor, expert team leader, public speaker, podcast host, writer and what’s not. In this podcast, Jonathan shed light on the tips that can help people grow in the real estate business and also talked about his exception journey and much more.

Want to know what you should do to conquer the world of real estate investing? We can help

Show Notes

The real estate business is not everyone’s cup of tea. Most newbies don’t know what to do or where to start. Jonathan is a great example and role model for them all.

He is a real estate investor, team leader, concierge agent, and certified life and real estate coach. He left his job as an attorney, gallerist, museum curator, and educator to pursue his passion for real estate investing full-time.

He runs Streamlined Properties, a company that sources off-market deals in New Jersey and other cities. He also has a team of 34 investor-friendly agents in four states that aim to understand exactly what investors seek. They have been involved in real estate transactions for over 30 years and provide investment guidance and workshops nationally. He is a national speaker and hosts two podcasts, Dad and Assemblage.

He really admires the usage of REsimpli software as it simplifies the lives of real estate investors.

Want to know more? Scroll ahead!

Key Takeaways

• Exceptional and remarkable real estate journey of Jonathan.
• How to use your money as an investor?
• How Jonathan manages his team of 34 agents?
• What’s the importance of meet-ups in the real estate business?
• At what age Jonathan owned his first residence?
• How to grow your business as a real estate investor?
• Who are baby investors, and what should they do?
• How to win an investment deal with real estate agents?
• Do you need to inspect your property?
• What’s the key to winning?
• What does Jonathan teach in his podcasts?
• Where to find Jonathan?

Transcription

Brandon Barnes 0:06

Hey! Want to welcome everybody to the REsimpli podcast. We have our guest, Jonathan Green. How are you doing today?

Jonathan Greene 0:12

I’m doing great, Brandon! Thanks for having me on!

Brandon Barnes 0:14

Yes, sir! Thank you for taking your time to hang out with us and tell some stuff about real estate investing and agent side. Tell us a little bit about yourself, Jonathan.

Jonathan Greene 0:23

Yep, so I’ve been investing for more than 30 years. I grew up with a dad who was an investor as a kind of side hustle, but it was really his main hustle. So from five years old on, I was going into foreclosures, unlocking the doors, going to yard sales, making offers on yard sales. And as I got older, I started to manage my dad’s properties when I came home from college in the summer, did collections on all the rentals.

So I technically owned a lot of properties before most people when I was, like, below ten. My dad knew how to maximize tax benefits and trust and stuff like that. So I’ve been playing with real estate my whole life, and then I’m still an active investor, and now I run a big on market team of 35 agents in four states. And of course, I have, just like you, I have my own podcast called Zen in the Art of Real Estate Investing. And I personally love being on other investing podcasts because I just love helping investors not make the mistakes that I see a lot of people making out there.

Brandon Barnes 1:24

That’s awesome. Yeah, I know. So you talk about being in it from a young age? Definitely both my kids, I have a four and a seven year old. They love it. In the beginning, they were kind of bored. Now, like, Daddy, we’re going to walk houses today. Are we going to drive by a house? They understand construction zones and stuff like that.

Jonathan Greene 1:41

Well, it’s good for you to know then that I didn’t really get it all when I was younger, but then as I was getting older, 18 to 22, it all started to crystallize and I was like, all this stuff he’s been telling me is now starting to make sense, and I wanted to take action. And now my kids are 21 and 19. My son, who’s the oldest, is now ready. He’s ready to start helping with investing. He wants to house act, and he’s also ready to get his license, too.

So I kind of wait on my kids, and I’ve always showed them we’ve lived in a lot of different houses because I don’t like to stand still, fix it up, sell it, move again. But, yeah, I think it’s important a lot of people get into it because it is the legacy type business that they’re looking for that they can leave property that is going to churn income to their kids.

Brandon Barnes 2:28

Yeah. Especially if you understand how to use some of the tax stuff with CISA accounts and different things like that your kids can own properties at whatever age and really benefit them, kind of start their future a lot better.

Jonathan Greene 2:42

Absolutely!

Brandon Barnes 2:43

Let’s say you started managing or helping your dad with collection stuff at 18. That 21, 22. When did you start buying properties on your own?

Jonathan Greene 2:54

Around 21. Yeah, I had owned a bunch, and I was fortunate enough that my dad kind of looped me in. So even probably from about 14 on, I knew which properties were in my name with my sister and with my dad, so we would walk those properties. So I started buying directly on my own, just in my low 20s. One thing that I’ve been good at my whole career is something that most people don’t talk about. It’s just I’m really good at buying my personal residences, and that’s always what I’ve done. I started buying when I was in Florida because I had gone to Florida to go to law school.

So I was 22 or 23 at the time, and I just know how to buy in areas that will appreciate. So I’ve been basically an appreciation investor more than a cash flow investor my whole life. And I think that the investing world never focuses on personal residences, but I’ve made huge amounts of money on just buying right. Living there for a few years and then selling and leaving and doing it again. And you can do that as an upgrade, and also you get the personal benefit of enjoying the houses that you live in as well.

Brandon Barnes 4:05

Yeah, I’ve actually talked about it a little bit last couple of weeks, how people don’t look at the personal residence as a form of an investment type thing, strategy vehicle. But I’ve had a handful of friends really ride that three to five year appreciation window and have moved into some really nice areas with nice homes, have either no mortgage or mortgage amounts, less than a lot of people living in a lot of different areas.

Jonathan Greene 4:33

Yeah, I mean, real estate is all about riding the waves and knowing when to sell, when to buy, what areas are up and coming, which areas are going to gentrify, which areas are going down. And I think studying the markets and watching where my dad wanted to buy and where I thought was interesting and starting to trust myself helped me. I bought in areas that I thought were really nice. The prices were just better, and then you turn around. In those days, it was like, I either double my money on some, but the first property I bought was just I bought, like, a standard single family in a development in Florida, where, at the time, all of them looked the same.

 But there was like seven on the market at the time, and I bought the one that looked the worst, which pretty much was still good. They weren’t old houses. It was just like it just needed everything. I moved in, I painted it, recarpeted, did a few things. I mean, you can’t really do much with these townhouses and the HOAs in Florida and then I lived there for like a year and really liked it. And then I just turned around and sold it.

And that one I probably made not a ton, I made like maybe 25, 30 grand. But that’s kind of the light bulb moment that was like, oh, all these things that my dad taught me over the years. Now it makes sense. I barely did anything and by the when I sold, some of those were still on the market because it was just like it was a weird cycle of time.

This was 1996 maybe. And the stuff just sits on the market. There’s plenty of properties, they all look the same, it’s just how you can trade them. And then after that I moved to more non development type and that’s where I really think is interesting. I love houses, so finding unique houses is kind of exciting to me.

Brandon Barnes 6:17

Yeah, and that’s the non-development stuff. The older ranches, the older subdivisions, those houses can have a lot of character and you can do a lot of fun stuff with them as well.

Jonathan Greene 6:28

Yeah, absolutely. I mean, you learn along the way what you can get the most for. Sometimes you’re presented with an opportunity, especially if you’re doing off market where you’re going to be able to make little money. And to me, any positive money is good as long as it’s not a drain on my life.

Brandon Barnes 6:45

Correct. Yeah, because I’ve made money and it’s drained and I’ve made less money with no drain and I’d rather have that consistently over and over again.

Jonathan Greene 6:58

I agree.

Brandon Barnes 6:59

You bought your personal residence and then did you grow the investing side? Did you go more agent side? Like what was kind of where you directed your business?

Jonathan Greene 7:11

Yeah, no, I mean, when I started again, that was the first one I bought by myself. But I owned a lot of properties at that time that were part owned with my dad and then later on, maybe ten years after that, my dad passed away and then my sister and I turned into full management of the properties that we had already owned anyway. So I had a lot of properties active at a time. Even then at 20, I don’t even know.

I had a lot of doors to kind of play around with. The ones that I was managing when I would come home from college or at the end of high school were the same doors that we still owned. But I never really was one of those investors that tried to grow my own personal empire indoors. I never got into multifamily at the time and I still not. I love it, I love to counsel other investors on it, but it was never my thing.

I like living in houses, I like flipping. I’ve done a lot of flipping, but not ever at scale. Like, I’m someone who can flip two or four a year, and I feel like fine with that. And some of them I live in, and I like to flip at the end, which is I’ll live in a house that’s nice, but then when I know I’m leaving, I go buy another house, and then I flip the house that I was in. I call it back, flipping. And I find that I’ve already gained the maturation and appreciation from three to five years.

And then I also upgrade the whole house on the way out, which for people who get emotional about houses, they feel like, oh, I wish I could have lived there when it was that way, but I don’t care. I have no emotional attachment to homes because of how I grew up.

We would get the house every way that we wanted, and then my dad would say, we’re leaving, say, why? And then he’d say, well, we’re going to make this amount of money because now somebody wants to pay us more, we’re going to go do it again. And that’s how I grew up on weekends with him. So I understood it as I moved forward.

Brandon Barnes 9:07

Yeah, I haven’t heard of anybody doing it that direction, though, but I can see the benefits of that. And then you probably even get a little bit bigger push because the renovation you’re doing is now brand new. Nobody’s even lived in it.

Jonathan Greene 9:20

That’s exactly why. So backflipping is just people think of it like, oh, you’re living in a bad house. I’m not, but I’m not living in a perfect house either. And like you said, if I did the renovation when I moved in, by the time I move, it’s going to be five years old and there’s going to be other stuff wrong. So if you have the leverage to do what I do, which is just leave, buy another house, and then focus on the house and then flip it, you’re already ahead.

So say at the time when I lived in Montclair in New Jersey, I bought my house for like 550, I think in 2013. Lived there for six years with my kids. And then I flipped it, but I was already way up. But when I flipped it, I didn’t have to spend that much because it was a nice house. I probably spent like over the whole course of the six years, I may be spent a total of 100 grand, which included a sewer renovation, but then it sold for 883. So over time, you’re just getting appreciation. Plus, like you said, you’re catching a market.

And then the whole house felt brand new. And I didn’t do everything. I’m not taking away the character of the home. I’m making smart decisions on where if you can get a primary suite with an en suite, you’re going to want to do that. If you can upgrade all the bathrooms, fix the kitchen, make more house flow, great. But I didn’t even knock down any walls or anything. I just created different types of spaces that I felt at the time were more conducive to modern buyers.

Brandon Barnes 10:48

I like that I’ve never heard of anybody doing that, but I definitely because we just bought or just moved into a house that we renovated back in August, and already I’m already in my mind, like, what’s next? Because I have no emotional attachment to it at all. And I like the idea of maybe living in it and then kind of reversing the renovation on the backside.

Jonathan Greene 11:14

Well, think of it this way. If, you know, I mean, people get too emotionally attached to houses anyway, you’re going to leave. Rarely are you going to try to stay in a house for 20, 25 years. That’s like a nice thing, just like storybook relationships are, but that doesn’t really always work like that. So to me, houses are assets. I like living them. I appreciate the time in them, but I can go create the same feel somewhere else.

And if I can do something smart with the property, that means that I can give the wear and tear on it and know that when I leave, I’m going to already fix everything so I don’t really have to overthink it. And I feel like I’m just ahead again, you either have to have the money to go buy the second, or if you’ve had the good job on the appreciation, you just take a HELOC at the end just to go buy the other one, and then you just cash it out when you sell. And you have to watch the market cycles too. I got lucky because I sold that one that we were talking about.

The pandemic literally was just coming, and it just happened. And closing took longer. We got worried, like, we weren’t sure what was going to happen, but it closed. But again, that property that sold for 883, it’s probably worth like 1.3 now because the market in that town is just insane. So I never get upset that somebody else did well. I love a win-win. I did well. The new buyers who bought from me a renovated product, they’re doing well. They’re going to sell to somebody else who’s doing well.

I think too many people just get a little bit insular about real estate and think it’s all about them, but jobs to find as many win-win scenarios as possible. So you can feel like, okay, everybody’s benefit. Instead of fighting about properties in a state like New Jersey, which is the densest state, there’s houses everywhere. Like, this isn’t the last best house. There’s just going to be another one that I see next week that I like just as much.

Brandon Barnes 13:03

Yes, 100% agree with that. Let’s talk a little bit about the agency side of what you do now. So you said is it 34 agents?

Jonathan Greene 13:11

Yes, I have 34 agents in four states been running this I’ve been licensed for about ten years. This team, this particular team, it’s called Streamlined Properties on Market, and we’ve been running this team for almost three years now.

Brandon Barnes 13:25

Okay, do you have like, a brokerage or is it like a team because is…?

Jonathan Greene 13:32

It streamlined properties on market brokered by EXP Realty. So brokerage is EXP. They’re an umbrella for me. We kind of run like a mini brokerage. We have all our own systems, all our own back end services, employees and everything on that end. But when I had started this team, we really started by focusing on investors and being the investor friendly agents. That’s what people knew me for when they went to bigger pockets.

So I had a lot of people coming to me for investing advice, and I wanted to make sure that I could then put that in play. And New Jersey is a tough state because the taxes are really high, highest taxes per capita in the country. So you have to be a different type of investor. You can’t use your standard spreadsheets. In New Jersey, I have the same conversation every week. Somebody says, hey, the deal doesn’t fit in the calculator.

And I said, well, I told you that that’s not how it works in New Jersey. The taxes are too high. You’re buying assets. You’re buying assets that are going to appreciate. And I have lots of investors who are cash flowing very well. But in a state like New Jersey, especially right now, you need to be putting 20% down and have no PMI to be hopeful for cash flow. So that FHA House hack is very difficult in a state like New Jersey right now just to be even okay on the money side.

So we do everything. We work traditional buyers and sellers. We do probably this year we’ll do about 250 deals, but we have a big investor portal. We do meet ups under the same name as the podcast. So we have meet ups once a week where no pitches, investors just come talk about their deals. We help a lot of investors buy multifamily and then help them learn to manage it themselves because we’re not advocates of property management, at least not in New Jersey.

Brandon Barnes 15:16

Got it! Okay, so let’s talk about the investor realtor relationship because I think a lot of people I know myself, when I first got into real estate investing, it wasn’t a relationship I took very seriously. I’ve since changed my opinion on that in the last couple of years. And we talked about a little bit before recorded about how important you think it is.

Jonathan Greene 15:36

Yeah, I mean tantamount and it goes both ways. We were talking about this before. There’s terrible investors out there. I mean, unscrupulous, complete BS on the proof of funds. So from an agent side, it’s hard to trust just a regular investor who you don’t know going the other way. It’s the same though. I mean, most real estate agents are terrible and the majority 99%, don’t know anything about investing.

So I don’t blame people for thinking that it’s worthless to have a good investment, investor friendly agent. You will know it when you have one, though. And the one that you know is in your corner is the one who’s always telling you, no, don’t buy that. That’s where I really kind of earned my keep with people. They called me the deal killer because they would come with me with a deal they were so excited about with another agent.

And I’m like, if you want to be friends with me, even you do this deal, I’m never going to talk to you again. It’s a horrendous deal. You’re going to lose all your money. And then they would see it through eyes of someone who really wants to help. And I think that’s the difference. I don’t blame either side agents or investors for being leery of each other because that’s warranted. The thing is, the more relationships that you build, it’s why we do meet ups. We want people to develop those relationships.

From an agent side, an investor is your best friend. Just four flips a year is eight deals for you as an agent. You find them a property, you’re on the buyer side, then you list it, and then you’re always listing flips. So you’re listing better than average quality homes, which helps you get more listings. So from an agent side, I tell everybody all the time, we’re coaching people. If you just have one really good investor, you can add so much to your deal portal. You could do twelve deals. That’s just six flips.

I mean, for people who do volume, that’s not a lot. Four flips is good for a year, but that’s eight deals. And then on the other side, I just think, like, we’re vetting investors the same way. If an investor doesn’t want to show me a proof of funds, I’m not going to go out of the house because I need to know with the people that I know I can’t risk a relationship that I have by trying to bring someone into a deal who I haven’t fully vetted.

And I think it’s a trust thing. But to your point, you’re only going to know when you find it. But finding that agent who really gets you knows how to run the numbers and is willing to tell you like, no, I will tell people flat out, I’m not writing that offer for you. That’s stupid because I’m not the type of agent I’m busy. I have a big team. I work a lot of regular on market. I’m not writing low ball offers. We don’t write low ball offers. It’s just a waste of time in this state if you can verify if somebody’s priced super high and your offer seems like a low ball.

And we have a way to explain why it’s not, then that’s fine. But there’s a subset of investors who learn this terrible thing where let me send out 100 offers, all 50% of the price, and just see if someone, whoever is going to take that deal. There’s so much wrong with that house. No chance anyone’s taking that deal, especially like the markets are steaming hot now. So I do think it’s really important and I do think that it’s something that’s really overlooked in the field. Investors in general think I mean, the public in general thinks real estate agents are just rotating bobbleheads who open doors. But when you meet the top 1%, you’ll get it. And they are hard to find, though.

Brandon Barnes 18:54

Yeah, I didn’t know too much about it. My wife became our agent for our flipping business. It just made sense. But dealing with a lot of the agents we’ve dealt with on selling them has been some total nightmares. Then we’ve had some amazing ones, and now I’m starting to see the difference in what people do and how they work and negotiate. And it’s like we have a list of agents that if they put an offer on our flip, we’re not working with them anymore. It’s not worth.

Jonathan Greene 19:25

I have a blacklist. I mean, everybody should you should have a blacklist for investors, too. People you won’t work with wholesalers should have a blacklist, and investors should have a blacklist on wholesalers because that stuff is going to keep coming up. But one thing you said is interesting. You did meet a lot of agents that you’re like. They’re good. That’s the thing that investors don’t understand.

If they’re working with somebody like me, who I know all the agents and I know how to present an offer and I know how to present an investor, I’m going to win a lot of deals just because of the relationship. If we’re close on price, I’m going to be the tiebreaker in. That because they know I’m going to close. My clients close. I always vet my clients. I have the proof of funds. I can tell you other deals that they’ve done.

And when you’re dealing as a listing agent and you’re listing nice properties and some rando comes to you with an investor and they just send you like this hard money letter that’s not going to get anything done. Most agents and even most investors don’t understand that there’s a big difference between cash hard money, private money, HELOC cash is cash. The other stuff’s not cash. HELOC is the closest to cash because it’s unvetted.

It goes into your account. Hard money and private money usually have some form of an appraisal, so that’s not cash. Like a mortgage is cash then, and it’s not. So they have to understand, and a lot of people are I was saying before, a lot of real estate on all sides, investing agent listings is just puffery. People want to look bigger than they are, but you’re not going to get anywhere like that. You’re going to be a one hit wonder like Kajigu. No offense to them.

Brandon Barnes 21:07

And what happens is as you build these relationships, it’s unique how they continue to kind of help. And so I’ll give an example. We bought one from an agent back in August of last year. We flipped it, sold it, and then my dumpster guy called me and said, hey, this guy just evicted a tenant he’s going to sell. I gave him your number. Well, he already had an agent. The agent was somebody that we had already worked with in the past. And so the minute his name and my name came together, he vetted the client. He said, there’s no need to put it on the market. These guys will close price.

Jonathan Greene 21:48

Exactly!

Brandon Barnes 21:48

And it was done and we saw no competition from it.

Jonathan Greene 21:53

Yeah, and that’s what you want? I mean, I don’t like competition because I think most of it’s kind of BS. It’s like if you go say you’re doing off market. This is a little side tangent, but that’s my specialty. Say you’re doing off market and you show up. You think you have a direct appointment with the seller and you show up and then there’s five people there. Most people are sitting around trying to fight to get the property. I just leave.

I have no interest in it. Already too many people, like, I know somebody’s going to say something dumb to them and they’re going to offer more than I am because I know more. But the first thing that I say when everybody’s there is I said, well, ask everybody in the room to show you a proof of funds on their phone. And if they do it, 99% aren’t going to be able to show them a proof of funds because most are wholesalers and they don’t understand that it’s wholesalers.

I like real investors. I like wholesalers who are ethical wholesalers. I just don’t go down with the whole business. Like, if someone’s there to buy for cash, then show me the money. And if they can’t show you the money, there really shouldn’t be in the room. And that’s just the way that I do it. And it’s also the way that I leverage myself to win deals because I’ll just open my phone and show them.

At least somebody needs to be explained to an unsophisticated seller how wholesaling works. To be able to be in that room and to explain like, I am going to get an extra cut on this. This is why I’m going to bring people to the table. You don’t have to do anything. It’s easy to explain good wholesaling. You can’t hide it. And when you hide it, I think that’s part of the problem with that part of the industry.

Brandon Barnes 23:25

I will say in the last couple of years, I have seen more wholesalers be more transparent with homeowners, and it makes everything a lot easier, the showing, the closing, the whole process. If they say, hey, this is what’s going to happen, as long as they do what they told the seller they’re going to do and everything works out, then it generally pays off for everybody.

Jonathan Greene 23:49

It’s because there’s a subset of people who finally started to take wholesaling as a business. And business involves client service and accountability to both parties in the transaction. Like you said, if you’re a wholesaler, you have a list like they know you, they’re going to say like, hey, Brandon, do you want this property I’m going to give you? You’re going to be on the first list of people to get it. I think what investors don’t understand, if you’re a baby investor and you get an email from a wholesaler, that’s like fourth servings, we’ve all seen the deal, we’ve all passed.

So you’re getting the thing that nobody else wanted because it already went through the VIPs. It doesn’t mean it’s a terrible deal, but it’s not nobody else wanted it. It’s like when an investor is looking on the MLS and they send you as an agent, they’re like, oh my gosh, this looks great. And I said, it’s been on 193 days. It means every single investor in this area has passed on it. Everyone because they all know ten agents.

So you’re saying that you think this is the diamond in the rough, that 100 of the best investors in the area have passed on. There’s something wrong with it. It’s not for you. You’re brand new. And that’s what I think. Where the desperation principle of today’s investors? Because you’re on social media, you see everybody with all their alleged 500 doors and you get FOMO about doing it.

And I do think there is a thing to get started, but I think people get a little bit too desperate and they make bad decisions. And that’s why we look at ourselves as advisors with licenses to help people not make mistakes. Because if you mess up the first deal, you may not be back in investing five, six years, you have to climb out a hole. A lot of people have had to.

Brandon Barnes 25:28

Yeah. So for somebody looking to build a relationship with an agent, and let’s say they don’t have the cash, can’t pull their app up and show up, but they do have reliable private money or whatever it is, how do they start that relationship with the realtor and start to kind of build something there?

Jonathan Greene 25:47

Yeah, one work on the relationship, and I think the best new investors, I call them baby investors, not because I think they’re babies, just because they’re getting started, like they’re still learning how to walk. As an investor, the best investors who are new, present, what the future is, not in the way that people I’m going to do 20 deals. You’re not going to do 20 deals. I don’t even know you. You haven’t done a. Deal. So I don’t know if you’re going to do 20 deals.

I want someone with a plan and who understands their financing. I interviewed someone on my podcast, Drew Brennaman. Great guy. And as a kid, he did eBay. He was just making, like, a crap ton of money at, like, 16, and he found an agent by exactly doing this. He presented himself well. He was clearly young, but he said, this is my funding. I’m already vetted. This is how much cash I have. These are the types of properties that I’m looking at.

And then he found an agent in the beginning who listened to him was like, I don’t care how old this kid is, he really has it going. And I think that’s what you want to build. You can’t blame a real estate agent for not wanting to show you 20 houses when you’re unvetted. If you show me houses, we’re going to go on a journey together, because I love to look at houses. I don’t care how many houses we look at, but I want to make sure that I’m taking you into houses that you can prospectively buy, or else it’s not fair to the seller.

And that’s one thing that nobody understands. They’re just thinking about themselves all the time. If I can’t confirm that someone can afford a $500,000 multifamily, it’s not in anyone’s best interest for me to bring them in for a showing, because then the seller is like, oh, how’d the showing go? Oh, turns out they weren’t even qualified. And multifamily are hard to show. There’s tenants. You have to be even more respectful of the tenants time when you’re showing multifamily. So making sure that people are vetted and then helping them, like you said, they’re brand new. They come to you.

You want to work on a cooperative relationship. And I would say that I like people who ask more specific questions when they’re new. As an investor, anyone who asks, how can I be a good investor? It’s too broad. I want someone to say, like, I’ve been looking at FHA and think, I’m okay with doing renovations, and then I can explain what the difference between the two is. But I think you need to come to the table with more than like, hey, I want to do ten deals in ten months, and I want to use hard money.

Hard money right now costs, like, 15% for a new investor. So that’s, like, not attractive deal for anyone. And I’m not comfortable having someone brand new trying to flip a house on 15% and two points right now, because they’re not going to make any money.

Brandon Barnes 28:29

Yeah, you got to move that quick.

Jonathan Greene 28:31

But again, correct. But you’re brand new investor. It always costs twice as much and takes twice as long. So you’re putting yourself behind the eight ball. And again, the way, you know, going back to what we said before, that an agent really cares about you is when they’re saying, like, definitely don’t do this deal. The bad reaction from investors is, oh, you’re trying to steal this deal? This is the worst deal ever. I don’t want it. I just don’t want you to lose all your money. And 2023 is not a great time to be a first time flipper, because even if you have the money to burn, you’re going to burn more of it than you think.

Brandon Barnes 29:10

Yeah. 2023 is also unique because we have inventory going up and prices going up, which is not seen very often.

Jonathan Greene 29:22

Yeah. And it’s very market specific. There’s a lot of people who are looking out of state. That’s a whole different landscape. But if you’re looking local, you really need to understand where your market’s going. If the prices are high, maybe it is a good time to look in the outskirts. I think you have to know basically your two hour radius, which is important.

I find it really hard to believe that there’s not an investment opportunity within 2 hours of where everybody lives. Even people in California, 2 hours each way, there’s something available, a town that may be on the up and come up. If you keep doing your research, there’s going to be something out there and that’s like just drivable enough. But also you can’t go there all the time.

Brandon Barnes 30:04

Yeah, I agree with that. 100% people that go in these crazy virtual spots. There’s always something you can get to within a certain radius.

Jonathan Greene 30:11

As a new investor, I think there’s nothing more important than being able to see, feel, and touch your property. So being at least in an area where you can see it enough to have a connection to it. Not an emotional one, but a connection to this asset that you may turn, because then you’re going to know when to sell. A lot of people buy turnkey and then they’re just like sitting on $100 $200 a month returns, but then one furnace breaks and then all of your turnkeys are losing money. They forget that one thing can go wrong and you can tank a bunch of tiny investments. Yes.

Brandon Barnes 30:46

And it’s one big thing. And your cash flow is gone for a while. And it can be gone across multiple years.

Jonathan Greene 30:54

Yeah, it could be. Think about it. Someone who wants to get excited, they have ten doors. They’re all cash flowing. Just $100 a month. That’s $1,000. Then a furnace break. 7500 for just like a half multifamily furnace. So that’s seven months that you just lost on ten investments because you think that $100 a door is okay. But if you know that they’re all appreciating, great. But a lot of times if you’re buying turnkey, they’re turned out to you at their max value.

And they’re not huge appreciation plays. They’re like smaller cash flow plays. So, like, the taxes can go up, then you get obliterated. So these are just all things to consider. I don’t mind turnkey. I think the idea of turnkey is great. I would just rather do it one off than in like a turnkey funnel.

Brandon Barnes 31:46

Let’s talk about your podcast a little bit. The Zen of what is it?

Jonathan Greene 31:49

Yeah, Zen and the Art of Real Estate Investment.

Brandon Barnes 31:53

Got it. What’s the big focus on that? I can talk mindset, health, all that stuff till the cows come home. And so what was the reasoning behind creating it?

Jonathan Greene 32:03

Yeah, I mean, the tagline is the mindful approach to Real estate investing for a reason. I feel like there’s so much coming at us right now in every part of our lives that new investors, everybody’s looking to invest in real estate. I mean, they are, but there’s so many gurus and things coming at you that the only way to really start to understand is to first focus on yourself. Make sure you’re solid going into it. If you have a desperation mindset, you’re going to make bad decisions.

If you’re investing for reasons to try to get famous on social media, probably not going to go well in the long term. Maybe you’ll get lucky. I mean, people get lucky, but I’ve just found that the more centered I am as a person, the better investment decisions I make and the more able, again, I am able to say no to deals. It’s exciting when you’re investing first time, second time, third time, when you see a property that you love, but you have to be able to set your limit. And that’s all part of the mindful approach. Walking away is your best negotiation strategy in the history of real estate investing.

Everybody knows this. If you’re willing to walk away from the table, you have leverage. And too many people fail by not acting on their leverage and giving the other party leverage. And then you’re always going to get stuck with a deal that you could have done better on. But you have to be willing to lose some deals along the way, and sometimes those will be good deals. I’ve lost plenty of good deals that I wish I would have done, but I don’t go back and feel bad about it. It was just the way that I negotiated.

Brandon Barnes 33:32

Yeah, it’s setting limits, understanding your buy boxes, your criteria, your cash flow. There’s so many things that go into buying an asset other than just, does this one deal work outside of itself?

Jonathan Greene 33:44

Yeah. And another part of the mindful approach to real estate investing for me is outside of spreadsheets. I don’t use spreadsheets, I use them on flips just to calculate how much we’re spending and estimations. But I do not put any properties through a spreadsheet. Sorry. Commercial assets, five units and up will go into a spreadsheet because that’s a cap rate that I want to see. But in general, that’s not what I rely on.

To me, I’m buying assets like our 2023 term is asset hunting, and that’s what I’m looking for. I want assets. And assets don’t have to cash flow right away. There can be a variety of things that go on. I’m looking for something that makes sense to me that I can look at. I’m proud to own this. This has a part in my portfolio, which is why I like diversification of a portfolio. And that’s also a mindful approach.

It’s easy to get say like, oh, I’m just going to do the burst strategy or I’m just going to focus on this. But there’s so many investment opportunities out there that it’s great to widen your view a little bit, see what syndications are about, take a peek at self-storage. Just start to understand that there’s other things because you may be a really bad landlord. Most people suck as landlords. It may not be for you.

So for someone who doesn’t like people, doesn’t like management, like you shouldn’t have Airbnb, you’re going to suck at it, you’re going to be annoyed all the time and you’re not going to want to do it. Then you’re going to pay someone 25% to manage for you when you could have just got another asset that you don’t have to pay management for. So I think the holistic approach is understanding that there’s all different types of investments. The more relationships that you build, the more podcasts that you listen to about investing open up so many different worlds.

Just like you have me on as a guest, when I have people on as a guest, I’m learning something on every episode. And then I’m like, wow, I never thought of that. I’ve learned so much about syndication just from having guests on my podcast. And for new investors, podcasts are everything because you don’t have to listen to everyone. You can look at the topic, see if that person and then go, oh, this is right up my alley.

Brandon Barnes 35:58

And you can listen to specific people.

Jonathan Greene 36:03

Exactly.

Brandon Barnes 36:03

And then as you find somebody, you can follow them on some others and learn. There’s so much knowledge out there for different asset classes, different investing strategies. You don’t have to get stuck with. I only have to wholesale single family homes in the beginning to get started.

Jonathan Greene 36:19

I think I’ve seen a lot of posts that 2023 is a great education year just because prices are high. Like we said, like, dig in, go to meet ups, get on in, zoom groups. I’m not a big fan of Facebook groups because I think they all just turn into just a deluge of people just spamming their own garbage. But there are some good ones. Local Facebook groups are much better. Meet other investors who do what you do.

The reason that we do meet ups is because I can say, have someone who’s looking for their first house hack and then they come to a meet up and I’m like, here’s five people standing here who’ve done their first house act. Talk to them don’t talk to me. I haven’t done a house act. I know everything about it. But why don’t you talk to these other investors who’ve done a house act? What are the pros and cons? Where did they go right? Where did they go wrong? Do they like management?

And I think again, I like social media, I like podcasts, I like training programs, but they’re not all good. And over time, you have to try a lot of stuff to see who you can trust. If you’re going to listen, over time, can you trust it? And I think you have to put the work in to see if that’s the person you can trust.

Brandon Barnes 37:31

Yeah, you’ve kind of touched on a little bit. It’s putting in the work. When it comes to creating relationship with your agent, when it comes into understanding your asset class, you just don’t say, hey, I listen to this podcast. I’m not going to go buy 100 unit apartment building and that’s it. You have to do your research, talk to people, do some site visits, get in where you can get in so that you can start to understand and learn about whatever it is you’re trying to learn about.

Jonathan Greene 37:58

Yeah, you just said something really important. It was in site visits. One thing that baby investors are making the biggest mistakes are is they’re running deals on a computer or calculator doing out of state, and they’re not looking at anything. Even if you want to invest out of state, go look in state. You need to know what properties smell like, what they look like, what they feel like, what it feels like when your feet are on laminate floors versus LVP versus hardwood.

You have to understand what renovations cost or you’re never going to be good at investing. And that’s very, very difficult. And the only way you can do it is if you’re not licensed with an investor friendly agent who you have a relation with, ship with, who likes looking at homes. Also. They have to be an investor also because guess what? Most properties aren’t going to be for you, but they may have other clients for it afterwards. But you have to look at homes.

It’s crazy to me that someone would make an offer on their first investment property if they haven’t looked at least 15 to 25 homes. And again, that is a hard spot because some agents aren’t going to want to do that. That’s why you have to build the relationship to know that I’m going to try to help this person get educated. If it turns out they don’t want to do this, I’m going to see a bunch of properties that maybe I have other investors for if they’re not interested, and that’s how you develop it.

But I found just way too many people doing armchair quarterback, running numbers and not seeing properties. Like, you have to see properties to understand what it means when they’re sloping floors. How much does the structural renovation cost? Can you move a wall? Can you do that here? These things you’re not going to know from afar. And of course, an agent who just wants to sell you a deal is going to tell you everything that you want to know from 1000 miles away. Oh, sure. There’s no structural issues.

Are you doing a sewer inspection on every property that you buy? You should be, because sewers are going to cost you a lot. Even if you’re in a public sewer. Just the line from the house to the street in my area costs 15 grand if you have to replace it. We have old clay pipes. Are you checking for oil tanks? If you’re in those areas? These are things that like new investors with bad agents are going to buy properties. If you’re in a non-attorney state and nobody’s protecting you, you’re going to end up with something. You’re going to dig some stuff up, find a sewer hazard. We were talking about a furnace. What if your sewer breaks?

Brandon Barnes 40:16

It’s bad. We learned a hard way in a new city me too. We learned a hard way in a new city that they had these things called Orangeburg pipes and they were these clay pipes and went four for four. All four homes need to have new oh my God. Yeah. And luckily two of them we knew about, so we had budgeted them, but then two we didn’t know about, and then we found out that pretty much the entire city is full of those pipes. So now if I buy in that city, it comes with a sewer inspection period.

Jonathan Greene 40:50

Always, but think about so this is what is crazy for investors. I’ll say like, hey, if we’re looking in more rural areas and they have septic, septic is different. Septic right now, we did a septic on my flip, it was 42 grand for just a full redo of a septic. We had other quotes at other properties for 60 and 80 grand. There’s investors who you say, hey, look, it’s septic. We need to do a septic inspection. They’re like, no, it says as is. I just want to get it. It could be like 80 grand.

We’re trying to protect you again which is why I do it this way. And I will not write those offers because I don’t want my name on somebody’s bad offer because I’m responsible for it. And I think on all sides you have to look at it that way. That’s like a more holistic approach. Are we all in this together? And maybe like, please don’t be desperate.

This isn’t the time to be desperate. Because do you feel like, though, when you bought those four where you didn’t know and then you were like, maybe we shouldn’t have got all four, you figured it out. But sometimes you want to get stuff because it all makes sense, but you’re too excited you miss a couple of the little things that could come back to haunt you.

Brandon Barnes 42:06

One of them we did, the two that we knew about, one of them, they had it all dug up from the backyard and so we knew it was sewer. And then another one, we actually had them escrow because we asked about it during the inspection and everything and they know it’s all, fixed it’s, blah, blah, blah. And I was like, I don’t believe any of this.

And so I was like, I’m fine to close it, but you guys need to escrow $10,000. And then whatever the bill comes back, we’ll take the bill out and then you have the rest. So we did okay, but one of those, we were in a mode where we kind of sold everything and we’re looking to move on a property and we did well in the area.

Jonathan Greene 42:49

But that’s why it’s good if you’re able to leverage properties and you’re clustering, which is buying near each other. It’s the difference between buying a four family and a two family. You’re more protected on the four family because if one unit needs a big renovation, you still have three cash flowing units. So if you’re buying three or four properties in an area, you have a hedge against one, something making a bad decision or uncovering something crazy. But everybody should be doing the max due diligence if they’re not experienced.

And if you’re a brand new investor and you’re working with a real estate agent who tells you to buy a property as is, you should fire them because you’re brand new. You have no reason to buy something as is. And if your reason is, well, I can’t win unless I do, that doesn’t mean it’s going to cost you any less later. We’re trying to protect you in the beginning. Do not buy as is. If you’re a first time investor, it will come back to haunt you.

Brandon Barnes 43:46

To add to that, if you do get in a spot, let’s say it’s even after due diligence or whatever, it’s much better to lose the earnest money than lose on the deal.

Jonathan Greene 43:56

Great point! If you do it the right way, you’re able to negotiate. I’ve had a couple where I wasn’t sure I never should have dropped some deals, but I was like over worrying about it in the middle and I want to get out. So I just called. I was the agent for myself at the time. No, this was off market property. I just called the seller and was like, listen, I’m going to ditch this. Can we just negotiate? I had probably like 15 grand earnest.

I said, can I just leave you five grand and we’ll call it a day? And he said, yeah, no problem. He was another investor. I was like, I’m really sorry. I think I was thinking at the time I was going to move. So I really didn’t want to hold the problem property. So I was transparent and it worked out. But it’s a great point that you made, losing earnest money. Okay. I mean, you made a bad decision, but you’re not trying to take the whole albatross later. It’s the same one.

If you’re flipping and you get to the end and you’re going to make zero or you’re going to lose a little, that’s just the way it goes. You still get back to the deposit, so you have your down payment to go put into something else. But you can’t turn a loss into a win by magic. If you spent too much money, and that’s what the current value is. You either need to rent it and hope that it’s going to go back up, or you just need to bite the bullet and go try again and take the experience that you did on that one, not get too upset about it, which again, is just another mindful principle to try to keep more centered as an investor.

Brandon Barnes 45:20

Yeah, we had one same neighborhood with all the sewer lines. We contracted it and did our inspection. Our GC basically was like, dude, this house is riddled with active termites. And he started pulling up some rugs and you could see where the hardwoods were eaten out. And so we called the agent A, they didn’t disclose it. We ended up backing out. We negotiated where we didn’t lose any earnest money. And then somebody and I know bought it.

And I tried to tell them before, I was like, dude, please, you need to inspect this house where you buy it. And now they’re stuck on it. They had to turn into a rental, and there’s nothing they can do about it. And so you just have to be okay. I mean, obviously you don’t want to lose a bunch of earnest money deposits just wasting your time. But if it’s in your gut or if something comes up, big stuff, rewiring, home, sewer lines, septic tanks, man, those things can break you and brewing it.

Jonathan Greene 46:25

Yeah, I think you do have to trust your gut. And I’ve trusted my gut, and I still now I probably shouldn’t have gone out of a couple of deals, but you can’t feel bad about that because I’d rather trust myself than be stuck with a property that I don’t want later.

Brandon Barnes 46:37

Yes, because rehabbing a property that you know you’re going to lose money on, there’s nothing fun. It takes a lot of the fun out of it. Even if you have to keep it as a rental, you’re still going to leave a bunch of cash in it, which is better than losing it, but you may not have that cash to leave that moment.

Jonathan Greene 46:58

I mean, if you don’t know your rehab cost you’re a quarter of the way in, you’ve already spent your rehab costs and then you’re stuck. So you’re either going to get foreclosed on or you’re going to do like the worst job ever. And it’s going to sell for way less than you ever thought. Probably won’t even sell because you didn’t do a good flip. And it’s supposed to be a flip.

Brandon Barnes 47:15

Yeah. It’s something that as newer investors, it goes back to the Instagram, the stuff, the desperation with it. And the key is just trust it. And I like the idea of building an agent relationships. I think I’ve done a good job with it in my market and how my mind change has helped us a ton and have advocates, have deal killers that are there to give you opinions.

Jonathan Greene 47:42

I think that both sides, investors and agents, have to look at the value of the other side. If you’re an investor and you think real estate agents are stupid, you’re going to lose a lot of money in your lifetime, especially when you’re listing your flips. Like, people list flips with these 1% listing brokerages, they’re not doing a good job. You want the best listing agent in the business because they know all the clients, they know how to run it. I mean, I list my own because I have a big team, but it drives me insane to see nice properties going out with a 1% listing.

We all know that the seller is cheap and it never works because they don’t do anything. Their photos are terrible, their iPhone photos. It’s just not professional. And then on the other end, for agents need to look at investors at, wow, how much can a really good investor add to my business? A lot. A lot. Remember this, four flips a year is not a lot for like, a regular flipper. That’s one a quarter. That’s eight deals for you as a real estate agent.

Most real estate agents do two deals a year. That’s the average because it’s just a tough business. If you just had one investor client and all you did, you knew they had money. Say they’re vetted for like X million or they have funds and all you did was work that one client, you would do better than probably 98% of the real estate agents in the game with just one client. If they were a good investor who you could rely on and you built a great relationship. And that’s where both sides forget everything’s about relationships. The people who don’t value the relationships they build end up doing a lot of business by themselves and making a lot of mistakes.

Brandon Barnes 49:19

Yeah. And it’s not near as fun to do it by yourself. Whether you make money or not, it’s definitely more fun to do business with other people, do business with like-minded people and make money together.

Jonathan Greene 49:33

Absolutely.

Brandon Barnes 49:34

Well, Jonathan, I appreciate your time. I had a blast chatting with you. Is there anything else you want to leave with our guests for final note?

Jonathan Greene 49:42

No. Probably best places to find me on Instagram and most socials, you’ll find Instagram and TikTok. You’ll find me at trust Greene. Greene has an E at the end. On YouTube I have a ton of investor content. It’s Jonathan Greene on YouTube. And then if anybody is interested in working with my team, we cover all the whole state of New Jersey, Philadelphia and Bucks County in Pennsylvania, Elko County in Nevada, and then parts of the Catskills in Hudson in New York.

It’s just streamlined with a D.properties. That’s the website. And I appreciate being on your podcast. I love when people listen to mine as well, which is then in the art of real estate investing. But, yeah, it was great talking to you. You’re a great host. I mean, questions are important. You’re getting out information for investors that can help them. And I think that’s both of our missions is help people not make the mistakes that are avoidable.

Brandon Barnes 50:35

Yeah, I appreciate it and I enjoy it. And I think a big takeaway that I’ll continue from it is it’s all about learning, is build these relationships. If you’re an agent with investors, if you’re investors with agents, vet them, build them, and grow your business with that side. So I appreciate everybody go check out your podcast as well.

Jonathan Greene 50:55

Yeah.

Brandon Barnes 50:56

Appreciate it! Yeah, you have a good one. Appreciate you coming on!

Jonathan Greene 50:59

Thanks, Brandon!