An increasingly hot topic amongst young adults and beyond: Real Estate Investing. Joey believes RE (Real Estate) Investing is a multi-phase process beginning with mindset training, expectation building, increasing your earned income, real estate education, mentorship/partnership, executing the investment, and finally management and growth of the investment. He emphasizes that this process can take months to years depending on the individual. You may have begun some of these steps through other experiences and ventures, and will progress much more quickly than others. In Joey’s case, from start to finish, this process took him about 7 years. His mission is to shorten this timeframe as much as possible so others can achieve financial independence sooner and with more ease than what he experienced.
- Mindset Training. Joey believes a “Rich Dad” (quoted from the best-selling book: Rich Dad Poor Dad) mindset is essential to achieve success as a Real Estate Investor. If you have read and understand the book well, excellent. If you have not, he highly recommends the read as it will set you aside from your peers in a substantial way. The fundamental tools Joey asserts are essential to take away and understand are 1) assets vs liabilities, and 2) (4) methods of income generation.
- Assets vs Liabilities. In an extreme summary, he defines the two words to gain an understanding. Assets: something that earns you money. Liabilities: something that costs you money. Simple enough? Yet confusing for many, due to how we were raised and conditioned from a young age. For example: you grow up and go out in the world and purchase your first home. Your biggest asset… Right? By this definition, no, that home is now your greatest liability. Purchasing your personal residence will cost you a monthly mortgage, repairs, etc. If your rebuttal mentions “what about appreciation, the fact I would spend money on rent elsewhere so a mortgage is better” etc – please read the book and understand these definitions, as it will help shape your mindset much more quickly when accepted than when challenged. Joey spared us the explanations in this interview, and is leaving it to author Robert Kiyosaki.
- Methods of Income Generation. This is from the book following Rich Dad Poor Dad: Cashflow Quadrant. The four (4) quadrants are broken up into a left side (these people work the hardest and pay the most tax), and the right side (these people have freedom and are the most tax incentivized). On the left side you will find an E and an S, that stand for Employee and Self-Employed. On the right side you will find a B and I, that stand for Business Owner and investor. It is simple, but a small piece of this information reshaped Joey’s entire mindset and understanding of business – and that small piece of information was the separation of self-employed and business owner. Growing up Joey always wanted to be a business owner. Continuing, “opening my own bowling alley, brewery, coffee shop, french fry store…” – being Self Employed. Once he learned about these four roles and their entire breakdowns, he then wanted to become a business owner and investor like he is now.
- Expectation Building. This will come with mentorship, experience, and self-education. Understand what is possible and the speed of which it can become possible. Joey is an eager and inpatient individual, and initially thought he could go from mindset building to executing within months. The more he learned, the further that reality drifted and his expectations became realistic and began to serve him. Especially for a young person, going from employee to sophisticated real estate investor will take time. Joey claims it’s not as easy as all the guru’s selling courses make it out to be. He continues, “with that said, you can likely achieve more than you realize is possible, and there is blessing and excitement that comes with the wait and dreary”.
- Increasing Your Earned Income. If you are a five+ figure-a-month earning sales person already, you can skip ahead. If you aren’t, re-read the previous sentence until it sinks in. Without a degree in Engineering, becoming an Executive, Doctor, Software Developer, Lawyer, or similar position – your key to a high income likely lies in sales. Joey hated it, you might hate it, but he suggests it is still the highest paying, most accessible, and niche non-specific occupation available to earn multiple-six figures as a regular Joe (or Joey in this case) and will be your fastest route to financial independence and access to wealth multiplication through real estate. There are methods to begin investing without significant capital upfront, but typically require excellent credit, years of qualifying W-2’s, co-signers, and added strategy and know-how. Joey recommends finding both a mentor and stacking capital prior to beginning your investment journey. In his case, he had a mentor with just over 800 units (including a mall, storage unit complexes, and more), as well as $150,000 in cash reserves ready to deploy.
- Real Estate Education. Hopefully, you read this in advance instead of going step by step, because Joey certainly recommends doing this for the duration of your journey through the previous and next steps. He personally took multiple courses including Robert Kiyosaki’s Legacy Education course, but his greatest takeaways were with Lifestyles Unlimited. He proclaims, “their 2-day program taught me more applicable information to actually begin investing in real estate than all of the other resources combined, and for a small cost of a couple hundred dollars. Their model is based around the BRRRR (Buy, Renovate, Rent, Refinance, Repeat) strategy, and is great for those who have some initial capital. Their strategy allows you to reuse the same cash over and over again, allowing you to build a large real estate portfolio without the need for more and more out of pocket money.” He assured that during your research you will figure out the best strategy for you and your goals, whether that is BRRRR, Section 8, storage units, focusing on single family or multi-family, etc.
- Mentorship and/or Partnership. If there is anything in life that you want to be great at, Joey highly recommends finding a mentor in that subject. A mentor will shave years and possibly millions in missed potential/losses off your learning curve. As mentioned before, Joey found a mentor with over 800 units that recommended books, courses, and more to me that developed who he is today, and that mentor is now a partner with Joey on his current 24 apartment unit holdings. Joey emphasizes, “keep in mind, a mentor will only teach you so long as you learn. Nobody will continue to shed out information if you are not going above and beyond to absorb, regurgitate, and execute with what you are given”. When Joey met his mentor, the mentor recommended reading several books, and taking a $997 course. Joey had less than $100 in his checking account at the time, and a burning hatred for reading. He took the time to read and found a way to save up the cash by Ubering and doing food delivery until he saved up the $1000 to take the course. This showed the mentor that Joey was serious, and his mentorship has spanned 7 years now, and will likely be a partnership for life.
- Executing the Investment. If you completed all the previous steps, Joey insists this part should be the easiest of them all. You have the mindset to create recurring income, have built expectations around timelines and returns, have built a cash reserve, learned about RE investing and have chosen a preferred strategy, have a mentor/guidance, and are ready to buy your first deal. This process may be different depending on the type of property you chose to acquire. In Joey’s case, he opted to perform two BRRRR deals on out of state multi-family properties. This took $150k in initial capital from each partner ($300,000 in total). Within 12 months, they have force appreciated the properties by a cumulative $600,000, pulled out their initial $300,000 investment on the refinance, and are now cash flowing over $2,000 a month with over $600,000 in equity in the properties, and have their cash back to invest into more property. This was a 2x return on their initial investment, and is now generate an infinite cash flow % return on their cash remaining in the deal ($2,000/mo with $0 of their own money remaining in the property). Joey exclaimed that this is the reality and exciting part of RE Investing.
- Management and Growth of The Investment. Joey notes that this will also vary from strategy to strategy, and from personal objective to personal objective. With section 8, you may focus on guaranteed income from the government, while with a BRRRR strategy you may focus on initial ROI on the refi or monthly cash flow. In Joey’s case, he hired a property manager who assisted in the management of not only the tenants but the renovations while he and his mentor worked to raise the rents. The property management fees range from 4-8% of the rent depending on if renovation work is being conducted on what they are managing, or if it is completed and simply a tenant. Joey continues that there is continually an opportunity to weigh the reward of the investment based on its updated cap rates, cash on cash return, etc. He explains, “make sure to continually evaluate your properties, as what was a good deal when you bought it may not be meeting your return requirements later down the line. This can happen for reasons beyond “a market downturn”. A positive way this can happen is through debt paydown. Over time, you have more equity in your property. That means your cash on cash return is decreasing year over year. At some point, you will want to refinance or sell to enter new positions that meet your cash on cash return requirements and ensure you are making the most of your capital.”
This is a relatively quick summary of how Joey got started investing in real estate, some of his returns and real-world breakdowns, and advice to new/prospective investors looking to achieve financial independence through real estate. If you have more questions, feel free to contact Joey Fraser via direct message on Instagram: @Joeyjaf , or book a call with him on his website: imjoey.me . When asked for his rates, he asserted, “I don’t charge for services currently, and am just offering a helping hand to those who seek mentorship and have questions”. Take advantage of the opportunity, and connect with this young entrepreneur and real estate investor.