Welcome back to the Discount Property Investor podcast. Our mission is to share what we have learned from our experience and the experience of others to help you make more money investing like a pro. We want to teach you how to create wealth by investing in real estate, the discount property investor way. To jumpstart your real estate investing career, visit freewholesalecourse.com, the most complete free course on wholesaling real estate ever. Thanks for tuning in.

David: Alright guys welcome back to the discount property investor podcast, I am your host David Dodge. Today I'm joined by a fellow investor, flipper, wholesaler, and coach, Joe- and Joe I need help with your last name man, I'm gonna screw it up. Can you help me with your last name?

Joe: No no you know it, there's no- there's no one way to say it. Go for it.

David: Arias.

Joe: Done, done.

David: Did I get it right? Alright Joe Arias, alright.

Joe: Arias, Arias, I love it.

David: We are rocking and rolling, rocking and rolling. Well again Joe is a fellow investor, flipper, and a coach, and I wanted to get Joe on today and just talk to Joe a little bit about what he's been up to and learn a little bit more about Joe at the same time and I'm sure Joe is gonna have some value that he is going to be able to spread and pass along to all of our listeners and viewers. So Joe welcome to the discount property investor podcast my friend, how are you today?

Joe: Thank you so much. I hope you appreciated the sound effects I was doing.

David: That's right, I like that, that's great. Thank you for that, thank you for that.

Joe: You're welcome.

David: Joe let's start with telling us a little bit about how you got started in real estate.

Joe: Yeah so I- you know, let me give you a little bit of story. I'm from Argentina originally, I'm 39 years old and I came to- I actually went to school in Saint Louis.

David: That's where I live.

Joe: I know, I actually went to a school St Charles which is you know 20, 30 miles from Saint Louis.

David: Mmhmm, yup.

Joe: And you know, I was about 19 and I graduated when I was 23 and I you know, packed my car and I drove to Los Angeles 'cause I wanted to be a filmmaker.

David: Okay.

Joe: And I made movies for you know, 10 years and about 10 years ago I you know, I was working, I was making money but I was also spending it and about 10 years ago I put my foot down and I said I am ready to- ready, willing and able to create you know, the dream, the real estate dream which is much more work than what it's you know advertised out there but nevertheless it's a beautiful dream that you can pass to generation and generation and you know real estate works if you work it, right?

David: That's exactly right. I like that you added that, real estate works if you work it 'cause it does require a lot of time and a lot of energy and maybe even money if you were gonna take the marketing approach which is what we teach a lot-

Joe: Definitely the money sure.

David: -a lot on this podcast, right? You make your money when you buy, you get paid when you sell. It doesn't really matter and I would imagine you're gonna agree with me on this Joe, this is 17 years of experience speaking here but it doesn't really matter if you're a fix and flipper, a wholesaler, a landlord, if you're not buying deals, it's very difficult to make money in real estate. I mean you have a long time horizon sure but if you are- especially if you're trying to wholesale or fix and flip, you make your money when you buy, you get paid when you sell.

Joe: You know, that's a lesson that I learned. My dad is you know, my dad is a little hero to me or a big hero to me and when we were kids- when I was kid he was younger and he says: Joe, what do you think is more important: buying or selling? Not just in real estate but in any transaction, and I said dad it's equally important and he said son it's actually buying is more important than selling, why? I didn't know why, I couldn't- I said no it's equally important. He says well not really because if you buy cheap, you can still sell cheap.

David: Right.

Joe: But if you buy expensive, you only have to buy exp- sell expensive.

David: Sell expensive, that's exactly right.

Joe: And that was like boom, it was- that's it.

David: Yeah, that's it. We align, I like it man, I like it. So 10 years ago you decided hey I wanna get into real estate and roughly 10 years ago, and then what did- what did you do? How did you start? What was your method? Were you wanting to fix and flip? And by the way you're still out in Cali right?

Joe: Mmhmm.

David: What part? Where do you live?

Joe: Los Angeles. I'm in Santa Monica right now in my office but yeah.

David: And have you been there this entire 10 years that you've been in real estate?

Joe: Yeah, yup.

David: And most of the deals that you've done I would imagine are in your backyard.

Joe: That's right.

David: Within you know, an hour drive basically, right?

Joe: [inaudible] yeah.

David: Got it. I just wanna clarify.

Joe: I actually started- I started 10 years ago, I- the market was much lower, I started in a place called Palm Springs which is you know, it's about 2 and a half hours away from where I lived. It's not something I would advertise now tell our students our investors to do it but the pricing point was you know, Los Angeles is very expensive.

David: Right.

Joe: Nothing under $500,000.

David: Yeah.

Joe: So I decided that if I was gonna make mistakes, I'd much rather make mistakes with a hard money loan paying you know, a few hundred dollars a month than a few thousand dollars a month.

David: Yeah. So that's why you went there 'cause the real estate was cheaper I would imagine, right?

Joe: That's right. I bought my first property for like-

David: Or cost effective.

Joe: Yeah exactly like a hundred thousand dollars.

David: Cause cheap is a relative term but more cost effective.

Joe: Cheap is relative.

David: Right.

Joe: Cost effective yeah.

David: Got it okay cool.

Joe: And that's what I did.

David: And you- and mostly in your 10 years of doing this, were you wholesaling? Were you fix and flipping? Are you doing rentals? All of the above?

Joe: Fix and flip.

David: So mostly fix and flip?

Joe: Fix and flip myself.

David: And before we jumped on, you said you had done about 100, man that's great. Great work, that's a good amount.

Joe: Yup, yeah we you know-

David: [inaudible] 10 year period, that's average about 10 a year, that's awesome.

Joe: Yeah and you know, what happens- you know, what happens is you start- I know this happened to you, we haven't talked about it but you start making- hopefully you don't start making the same mistakes but you always are gonna make some kind of errors and especially as you grow and as you scale, you know scaling-

David: If you're not making mistakes, you're not taking enough risk.

Joe: Yeah.

David: You know? You can always play it safe but you know what that looks like? Sitting on the couch not doing shit, right? You gotta get out there and you gotta- you gotta take a little risk every now and then, and with risk comes reward but you also can make mistakes too, absolutely, and mistakes are part of the game.

Joe: Risk also could be calculated and I think as investors, we learn how to calculate risk. You know, is it worth for me to spend an extra $500 for a sewer inspection or not, right? And you gotta make those decisions, you is it worth for me to open this wall and see how is the plumbing here and there? So those other things that you have to- is it worth for me to buy this property right now and you know, we'll see what happens with the market in a few months, right? But as long as you buy the right price, there's always an opportunity to scale it.

David: Yeah that's exactly right, that's exactly right. So you've been in the game about 10 years, you've done about 100 flips. That's amazing for fix and flip, over the 10 year period, that's almost one a month basically, 10 a year if you average that out. Have you done any wholesaling or rentals along the way or just fix and flip?

Joe: We have- I have partners, I have partnered up with colleagues, friends, and we do teach it like Rudy's one of my partners in wholesale, Rudy averages about you know, 3, 4, 5 deals a month and some of the commissions he's making are like north of the $30,000. So I- my expertise is on fix and flips, I don't put my time on wholesaling, and rentals I had rentals in the past, I you know, building the rental portfolio is the end game for anyone and everyone, right?

David: I agree.

Joe: We have a strategy called the 50/50 which is you know, everyone has different strategies. My strategy is if you do want to start wholesaling or flipping you know, from the profits take 50% of profits put it back on your business and then take the other 50 and then go back and buy rentals, right? Keep on buying rentals, keep on scaling your rentals because that's what's gonna put food in your you know, in your table in 20 years from now when you retire.

David: Yeah wholesaling is a quick check, fix and flip is a big check and a rental is a forever check, right?

Joe: That's right and-

David: And when you buy rentals your income is now tax- is classified under passive income instead of earned income which is if anybody is listening knows, passive income is taxed a lot less than earned income and when you do a fix and flip that's earned income whereas with a rental, it's passive income so definitely some tax advantages there as well.

Joe: You can defer. You can do a 1031, right? There's the strategies where you can defer the taxes and you know, just push you to when you actually cash them out.

David: That's exactly right. Awesome man, well that's good. So the majority of what you've been up to is fix and flip and you've done a couple you know, 10 a year basically or 100 over 10 years which is amazing, great work. Joe you've also written some books.

Joe: Yeah yeah yeah we got-

David: Tell us a little about the books you've written.

Joe: Yeah I wrote 3 books, I mean I'm right now working on the 4th book, you know, partnered up with some really great people so I- one is in investments in general, talks about you know all the different stocks and all the different crypto and all different types of investments and why I believe that real estate you know it's the you know, the most permanent investment and the safest one of all. And then I wrote a second one called 'Flipping with Real Success' that's about flipping and my journey. And then the other one's called 'Rentals' and then there's one coming up for wholesaling where I partner up with one of my partners and we are- yeah. It's- the concept is very similar, right? Reverse wholesaling, wholesaling, finding the deal, signing the contract, you know, adding a fee and moving on to the next project.

David: Nice, I love it man, I love it.

Joe: Yeah but-

David: Well you definitely are qualified, you got 100 flips under your belt and you got a couple different books out there. That is awesome man, that is awesome.

Joe: Yeah I did a lot of- a lot of the flips- not to interrupt you I-

David: No you're good.

Joe: A good part of the flips also came a few years ago when I partnered up with a friend of mine and we opened a construction company and we were able to work in a lot of projects and that's how you know, you start working with different cities, different permits and you know, every city has their own you know, their own stories and their own like waste pulling permits or whatnot so I think that there's a lot of value on just learning whatever you can.

David: Oh absolutely, absolutely, I love it. So you are starting to coach now as well, tell us a little bit about that and I know you have an event coming up and I wanna share that link and help you promote that to get some people you know, to come to your event 'cause I'm sure that there's a lot that you can teach and the fact that you've done this in LA Los Angeles is rather impressive because that is definitely one of the harder markets, the property values are more expensive and you had mentioned that when you first started, you were going you know, 2 hours away or plus to where you can find you know more cost effective deals but I'd imagine you've probably done some flips closer than that over the last couple years as well too. So you have experience in outside of LA and inside of LA which is huge so anybody that's in the Los Angeles area would you know, I'm sure find a ton of value in learning from you and having you on as a coach as well as you know, come in to one of your- one of your live events so tell us about the live events.

Joe: Yeah so you know, depending when do you listen to you know, this podcast by, we're doing events all the time. We do monthly events at the office, we do meetups, we you know, we're doing this 2-day event, we're gonna do a 3-day event later. This 2-day event, the reason why we're doing this is there's so many data, there's so many information everywhere and you learn- you learn little bits in life, right? You learn about this and you learn about that but having an opportunity where you're sitting down you know for a full 2 days taking notes learning from the source, right? Really learning how do you find off market properties in your local market, how? Like literally, like breaking it down. How do you find money? How do you leverage OPM other people's money? How do you leverage hard money? How do you leverage private money? Are you gonna look for a lender? Are you gonna look for an investor? Are you gonna partner up? Are you gonna do a JV? How do you leverage contractors, right? There's a million ways that you can- you know when I meet my contractors, I- you know if I am in a local, in a new area and I'm looking for a new contractor which usually you always want to build your team, you wanna work with the same people over and over and that's what's in my opinion success is about taking everyone to the top. And so you know, you just wanna be mindful of doing the same projects with the same people but sometimes you have to use different legal documents and you know, different agreements and liability forms and it's really important, indemnification and it's very important to have the right legal documents and to know that when you're meeting a contractor, you're not going to sign their contract, they're gonna sign your contract. And all this is education that you know, there's things that you can learn and you know, like riding a bicycle you can never like really learn that unless you do it.

David: Right.

Joe: That's the plan of this 2-day event where we can actually have people take action on the seminar while they're learning information but also you know, getting real actions that will you know, cause there's so much money out there.

David: Right.

Joe: I say that flips are- I always say that flips are- it's like having a treasure map and if you knew how many steps you're gonna make to the right and what you're gonna do here and there, you're gonna end up in a property that is gonna have money, golden coins way for you, right? But you just need to know what that plan, what that map is.

David: Right.

Joe: So if I can help people with a treasure map, letting you know the steps that they need so they can actually make- I like to profit an average of $50,000 per flip, I don't like to do less and I don't usually like to do more. I like to do more but I don't take the risks to do more. I don't do- I don't take a lot of risks on you know, I don't do- I only do over the counter permits, I don't do additions with this strategy, I like to do it safe and that's what I share with all of my students.

David: Nice, I love it man. So is the business- is your coaching business, is it 'Real Success'? Is that basically the name of it?

Joe: It's called 'Real Success' and yeah it's about- and you know, it's what is success? Right? And that's- what is it that you know, for you what would you say- what is your definition of success?

David: My definition of a success is to have time and financial freedom, not one or the other but both.

Joe: Yeah and that's why we call it 'Real Success' cause it's- people's definition of success is different every time and that's why it's your real success, whatever is real- your real definition of what success means and yeah.

David: I like it.

Joe: It's called 'Real Success' and it's committed to helping people to get started and make money, put money in their pocket pretty quick you know within the next few months since they sign up either wholesaling, flipping and we also have a rental portfolio. We have over 100 rentals, we do not do any rentals in California, it's all out of state. Great deals right now you know, in Saint Louis. I was talking to an agent yesterday, great returns.

David: Yeah.

Joe: You can buy houses for even $50,000 and get you know, pay the mortgage and get you know, 4, 5 hundred dollars in passive income.

David: I got almost 90 units here in Saint Louis so I'm well aware. I like the Midwest market and that doesn't have to just be Saint Louis for rentals, really anywhere in the Midwest.

Joe: You do single or you do multi family? What are you doing?

David: So I have about 50- don't quote me on this number but I think I have 56 houses right now.

Joe: Single family?

David: And then I have about 30 units, the majority of my units are in an apartment building I just purchased, it's a 24 unit but I do have a couple you know, 2's and 4's sprinkled in there, not a ton of them. Single families are easy, that's what I like to teach.

Joe: What's your average on the single families? 50 thousand? 100 thousand? 130 thousand?

David: So that's a loaded question. What's the average that we buy for or what's the average ARV?

Joe: The buy.

David: So the average ARV is typically gonna be between 80 and 150 but we could buy something for as low as 50 or even less.

Joe: So you buy it at 50, do you remodel?

David: But it just depends you know?

Joe: Do you buy it at 50 and you remodel it? And then you just rent it or you just- yeah you rent because these are rentals.

David: Yeah they're rentals so we use the BRRRR method so we're buying them, we're typically- I mean we don't pay retail. Nobody listening to this podcast should ever do that. Avoid retail, avoid the MLS like the plague. Yeah you can find deals on the MLS but Joe I bought 162 houses last year, I think that's the number it's plus or minus a few, and like 3 of them came from the MLS, 3. So like yeah you can find deals there but like don't spend all day and all night searching the MLS for deals 'cause they're not there, you know by definition a realtor, their job is to get you as much they can for you, not just find the first person that's willing to buy deals, right? Or to pay cash or have interest in that property. So to answer your question, I'm always looking for properties that need work because I can get them direct to seller, I can get them at a discount hence the name of this podcast 'discount property investor' and I refer to myself as David the discount property investor, I do not pay retail, right? But to answer your question: BRRRR so we buy, we rehab, we get it rented out and then we refinance and the goal is to use little to none of our own money and my portfolio at this point, the average amount of money that we leave in a deal is about 1000 bucks, and if you're getting 300 bucks a month in cash flow, 3 and a half months later, you don't have any money invested in that deal, you have all your money back out. We leverage it on the front end with private and hard money lenders, we leverage it on the back end with a long term bank or credit union to refinance it out and that's really my passion, it's building assets, building a portfolio filled with assets with little to none of my money and that's really why I love the BRRRR method.

Joe: So let's say you buy something-

David: [inaudible].

Joe: Let's say that you buy something at 50 thousand, you put it let's say $10,000 you know whatever, right? And then you get $500, right? You're getting like $500, well they're paying the mortgage down so there's probably a mortgage of 275 dollars, $300 if you do a 20% down on a 30 year fixed at you know 4% whatever, right? So you're probably having the renter paying the mortgage down for let's say $300 including taxes which in Saint Louis I think it's 9.9% for property taxes.

David: It varies from city to city, county to county. Yeah it varies a little bit but yeah it's about the right. I mean basically what we do is A) if a property rents for 500, I'm not interested just because the quality of the people that live in those properties is not people that I really like to work with so I typically have an 850 to 900 dollar minimum so if it doesn’t rent for that I’m not really typically interested but I'll still buy it or wholesale it or buy it and fix it and sell it but I don't want to keep rentals that don't rent for at least 850, 900 'cause again the quality of the tenant changes a lot between 500 and 900, like a lot a lot, right? So I like to get good tenants which requires better properties, right?

Joe: So they pay the mortgage down and your cash flowing 500 bucks.

David: Yeah but to answer your question, I'm shooting for $300 a month minimum cash flow, I don't always hit it but that's my goal, and 20 thousand minimum equity capture so everybody should have a buy box and Joe I'm sure this is one of the things that you teach your students as well as in your seminars, your 2-day seminars you know, we have a buy box and if we can't get 20 grand and close to 300 bucks a month it doesn't typically make for a good rental and also if it doesn't rent for at least 850 to 900, it's probably not going to be one that we want. Now, we may buy it, we may get it rented, we may sell it, we do a lot of turnkeys, so we have a lot of exits of course but our buy box is you know, anything that rents for 850 or above, it's within a 30 to 40 minute drive of my office which is in the middle of Saint Louis so it opens the whole city including Saint Charles like you had mentioned earlier and I don't like buying properties for rentals that need more than 30 grand worth of rehab cause if you're gonna do that extensive of a rehab, you're gonna- it's gonna probably be pretty nice when you're all said and done so you might as well fix and flip it. So buying at a discount is the main thing and then also I have a rule that I don't like to buy properties that need more work than the purchase. So if buying a property for 40 that needs 50, you're going to be all in for 90, why not just buy one for 80 that needs 10? I mean come on like what's- you're going to spend 1/10th the amount of time getting it rent ready so you know, that kind of eliminates a lot of properties especially downtown Saint Louis where they're 120 year old properties because yeah they- you might be able to go pick up a property that needs 100 grand worth of work for 30 but again you're gonna be all in at 130 why not just buy one for 100 and it's 30 grand, way less time-

Joe: Do you work with a management company or do you manage it yourself?

David: Both, most of my properties are managed by a management company 'cause I just- I'm focused on growing my portfolio right now and it doesn't make sense to try to do both and quite frankly I'm way too nice so whenever I'm managing properties I end up giving the tenants more- being more lenient whereas if I have a manager that's his job to not necessarily be nice, now it doesn't mean he's mean, doesn't mean he's rude, but he's not going to go out of his way to buy somebody a microwave that we didn't provide in the beginning whereas I've been talked into it before. I'm just too nice, just whatever right? So I like having a property manager for multiple reasons but we do have some properties that they're like lease options or seller financing where we don't, we just do it ourself 'cause it's easy. We also have a couple little Airbnb's and some other you know, little random things that we'll manage but for the most part I like to get my manager to do it 'cause then it's just one less thing I gotta focus on. My goal is just to buy properties so I can wholesale them, add them to the portfolio or fix them up and make them nice. My priority is not to make sure my tenants know me or like me, it's irrelevant, somebody else can do that for me.

Joe: 100%.

David: Awesome. Well Joe we're almost out of time, tell us about the 2-day seminar. So real quick 'Our Real Success' O-U-R R-E-A-L S-U-C-C-E-S-S.com, this is where you're going to find out more about Joe, about his coaching and his program, and if you're interested in his 2-day seminar, you can find information on that link or you can go direct to 2dayseminar.com and that's spelled out with the number 2, not T-W-O but just 2, the number 2, day D-A-Y seminar S-E-M-I-N-A-R.com, 2dayseminar.com. Joe your upcoming seminar is what? February 25th and 26th and 7th? Is it 3-day or 2-day?

Joe: 26 and 27 yeah.

David: 26 and 27, 2 day 'cause that's the name of the URL, that was a dumb question.

Joe: That's right. Nah.

David: 2-day seminar not 3-day, and the 25th and the 26th of February is gonna be your next one but guys if you are listening to this podcast 3 months from now or 3 years from now, don't worry, that link that that I just shared with you 2dayseminar.com, as Joe hosts more and more of these events, it uses the same link and he just updates the dates on there so again don't worry if you're in LA and you want to meet with Joe and you want to go to one of his events and you listen to this after February 25th or 26th of 2022, again don't worry, you can go to that link and you can find out when the next event will be but while I got you and before we wrap up Joe, tell me a little bit about the event, what you have planned and you know what would anybody that's interested- I know you only charge $195 to attend which is a steal of a deal but again tell me a little bit about the event and you know what somebody would anticipate to learn if they were to attend.

Joe: Yeah we're thinking about you know, we select a really nice hotel so we can have a nice environment and then bringing a bunch you know, a lot of investors, new investors, experienced investors, create a community, do exercises, talk about flipping, talk about wholesaling, talk about rentals, talk about the market today, talk about where we're going, you know really and you know, be interactive, have people ask a million questions and really make people think, right? It's not just taking notes but also you know building community which I think is really important in what we do.

David: I love it man, I love it. Joe, it has been an absolute pleasure to network with you and talk real estate and anybody and everybody that's out in California especially Southern California area, Los Angeles specifically, go check out Joe and Joe's program. You can find again more at ourrealsuccess.com or if you're interested in his live event, you can check that out at 2dayseminar.com. Joe, I have some more information that I will put into the show notes that will go along with this podcast episode so anybody that's listening or viewing if they want to learn more about Joe, look below this episode into the show notes. And Joe what's the best way for somebody to connect with you if they wanted to? Do you want to share a social media or an email or I mean it's really up to you but if anybody is interested obviously they can go to those two URLs that we've shared but if they want to just connect with you, what's the best way to do that?

Joe: Yeah they can do it in Instagram under joeariasinvestor and you know, just get the information there, follow me, I'll follow them back. Also real success, if you type real success investments, we also have an Instagram account there and- but I think mainly if they go to the website they'll be able to get all my information and find out more about you know, we have tons of articles in that website that you said ourrealsuccess.com, we got over like 200 articles that we wrote- that I wrote on the past so they can- anything real estate related you know, it's all super interesting to read and to expand the knowledge.

David: Hey I love it. Well Joe thanks again for coming on the show and guys don't forget ourrealsuccess.com or 2daysseminar.com. You can check out Joe, learn more about his live event and if you are on Instagram which I know a lot of us are these days, go over to @joeariasinvestor, that's J-O-E A-R-I-A-S, make sure I got that right, investor and you can connect with Joe that way as well. Joe do you have any parting words for our audience? Any little pieces of advice that you could give on the way out?

Joe: Yeah I think that carpe diem, right? Seize the moment.

David: That's a great piece of advice guys, seize the moment.

Joe: [inaudible] today, seize the moment. You know the moment that you're listening to this whatever you're doing, either you're driving, either you're you know taking a nap or sleeping or whatever, talking to your kids, just make sure that that we are present in whatever we do.

David: Man that is excellent advice. Joe, thanks again for coming on. Guys don't forget, check out Joe online, multiple links that we dropped as well as Instagram. Joe has tons of experience and he is going to be hosting a 2-day event coming up, he's also got multiple 2-day events that he hosts throughout the year so if you don't- if you can't make this next one, that's okay don't worry, just go to that link and you can find out more and with that we will be signing off guys. Thanks for listening, remember: you make your money when you buy, you get paid when you sell. Thanks for listening, signing off. Thanks for listening to the discount property investor podcast. If you enjoyed this episode, please like, share, and subscribe to help us reach a wider audience to jump-start your real estate investing career, visit freewholesalecourse.com- the most complete free course on wholesaling real estate ever. We would also appreciate it if you left us a review on iTunes or Stitcher. Thank you in advance for your support and remember you make your money when you buy, you get paid when you sell. Now let's go build some wealth.