Sean Pan is an engineer turned real estate investor who "makes real estate easy" on his TikTok, Youtube, and Instagram page @seanlovesrealestate with over 2.7 million followers. In the past, he's worked as a hard money lender, flipped several houses in the Bay Area, and owns a portfolio of 34 units with his wife.
Brandon Hall | 0:55
Hey, everyone. Today we are joined by Sean Pan, who's an engineer turned real estate investor. He makes a lot of great content on TikTok, YouTube and Instagram. He has over 2.7 million followers, which is pretty incredible. Sean, welcome to the show. Give us a little background on how you got where you are today.
Sean Pan | 1:14
Thanks so much for having me on. I'm a real estate investor, content creator, former engineer,
For me it all started after I graduated from college, and I was super excited to start my career as an engineer for the next 30 plus years. And while the work was cool, hearing my coworkers complain every single day about how they weren't satisfied financially made me really sad. These guys are engineers, people that I was going to be in the next 30 years. And they couldn't even afford to buy a home within 30 minutes of work. They would have to commute all kinds of crazy ways. They're complaining how the company wasn't giving them the raises they expected, the bonuses, the prestige, and I figured I can't be here, I have to try something different. So I tried a whole bunch of different businesses, and eventually fell into real estate.
Real estate to me made a lot of sense, because you can buy a property. The property rents for more than the mortgage, insurance, and property taxes, and you get a pocket sum every single month. So how hard is it to just buy more of those, and eventually earn enough cash flow to then sustain your lifestyle? That's the long story short of how I got into real estate. And then eventually, over a few years, I understood how real estate worked. I was doing some profit from it. But I wasn't feeling really fulfilled. You know, I felt like I was the only one winning. I wanted a way to give back, and content seemed like the best way to do it. So I actually started a podcast, it's like this one, and then got into YouTube, and then Tiktok, Instagram, etc. So that's where we are today.
Brandon | 2:35
So talk to us about your first deal, that first entrance into real estate. What did that look like?
Sean | 2:40
The very first piece of real estate that I bought was actually my mom's house. She was about to move to Taiwan. I loved that house. I grew up in it. And I said, Mom, I can't let you sell this to some stranger. I'm gonna buy it from you. At the time I was living and working in Los Angeles. And this property was in the Bay Area. So I thought, okay, I'm gonna keep it as rental property, whatever, I renovate it. And then somehow, by some fate, the company I was working for needed someone to move to the Bay Area. And I was like, Okay, I'll accept. It's funny, because they went through all the ranks, right? The managers, the higher level. Everyone said no, because they were satisfied with their life in LA. And I volunteered, I said, yes. Fate had it. I moved back to my hometown, lived in the house that I bought. It had extra rooms and I thought, well, it's super lonely here. All my friends were in Los Angeles. I had no one here in the Bay Area. Who wants to live with me? So I started recruiting friends. Anyone that wanted to work up in the Bay Area. Said, oh i have a place for you to stay, super low rent, you know, come live with me. And as they moved out, I started getting coworkers in there. And that was house hacking, right? It just kind of happened.
Brandon | 3:44
When was that?
Sean
This was in 2015/2016.
Brandon
So you were house hacking. I was house hacking around the same time, too. Yeah. But I didn't realize it was called house hacking. I think it was actually coined a little bit later. So you were kind of house hacking before it was cool, too.
Sean | 3:58
I guess so. But actually, it's funny, because during that time, I realized the power of real estate. I started consuming a lot of content, a lot of podcasts, and actually heard your podcast. So you were one of my inspirations.
Vikas Gupta | 4:11
After that first deal that got you into real estate, how long did it take you to get your second deal? And what was that?
Sean | 4:20
The second one was truly my first real estate investment because that time I was actually buying for investment purposes. It actually took me over a year. So during the year, you know, I moved from Los Angeles to the Bay Area. I was house hacking, and it's hard to understand. Okay, real estate sounds like a really good thing to get into. That's when I was pouring myself into podcasts, books, but most importantly, meetups. So I was attending the local meetup groups in the Bay Area, and just joining all of them. They may meet once a month. But since there are so many groups, basically every single week, there was another meetup to attend. And the real estate investing community is pretty small. So you see the same faces over and over and over again. And it's really cool because you can talk to these people and they can give you advice that isn't found in books. No one's going to tell you on paper or on a recorded message to do this. But in conversation, they'll tell you, yeah, just do this, you know. So it was really cool to make friends, build a community, but also create a good support group too.
I was the only one out of everyone I knew buying real estate, which is a very scary place to be in. Instead, I'm part of a community of people buying it all the time. Like, it's no big deal. So, you know, it took about a year, but eventually, I bought my first rental property over in Florida. So on the other side of the country, sight unseen, you know, not even meeting my team in person until way after I bought the properties. But yeah, there was a simple rental property over in Jacksonville. At the time, it was going for about $80,000 and already rented for $900 something. And the cool thing about that particular deal was that it was already rented out to tenants. So I knew that no normal homebuyer would buy it, it was only investors who would buy it. So that even gave me a bit of a competitive edge to buy the property in the first place.
Brandon | 5:56
That's awesome. Do you still have that first property today?
Sean | 5:58
I do. And now that $80,000 property is worth over $250k
Brandon | 6:00
Yeah, I bet. Being in the Bay Area
Sean
Well, actually, that property is in Jacksonville, Florida.
Brandon
Oh, the Jacksonville one. Okay, do you still have your bay area property?
Sean | 6:10
Yes, I have that property. So it's funny itself. Now, my wife and I, we moved from the Bay Area to Dallas, Texas. But again, that's my childhood home, I'm not going to sell it. So we actually converted it into a midterm rental. Because like in the city, where I had the property, I couldn’t do a short term rental Airbnb. But I could do a 30 day plus situation. So we're renting it as a fully furnished rental.
Brandon | 6:30
Now, we have a few clients in the Bay Area, and they have done extremely well. Since 2015. I presume that your property also has done extremely well, from an appreciation perspective.
Sean
Oh, yeah, for sure.
Brandon
The last eight years kind of puts in perspective, cash flow versus appreciation. It's almost just do I have enough cash flow to pay my debt service, and my expenses and maybe a little bit on top of that, that I can pocket? Because if I can hold long enough, we're gonna run this thing up. Maybe that's just the fed policy of easy money. But that's kind of been my observation over the past eight years.
Brandon | 7:18
How big is your portfolio today?
Sean
My wife and I own 34 units. Including our primary residence, which because we move so often, it is going to be a rental in like a few months.
Vikas | 7:35
Are you geographically concentrated?
Sean | 7:40
We have properties spread across the country. We have some properties in California, in the Bay Area. We have properties in South Georgia. We have properties in Florida. We have properties in north and mid Texas, across different cities.
Brandon | 7:58
What was appealing about the Florida and Georgia markets?
Sean | 8:00
When I was first getting started, it was very hard to determine where to buy. You get analysis paralysis, because there's so much opportunity out there. I could have bought in Cincinnati, I could have bought in Florida, I could have bought here and there. For me, when I was first getting started, I really had no idea. I research demographics, and I'll just go into the meetup groups, and they would consistently discuss the top 10 places to invest in. Jacksonville just happened to be in those top 10 lists every single time. It wasn't always number one, but it was in there. The other ones that were also on that list consistently, were in locations that I didn't feel comfortable investing in as a first time investor. These are places that typically had snow storms or tornadoes. You know, at the time, I felt like Florida's kind of like California. Except hurricanes, which I’m thinking about now. But luckily, the hurricanes haven't damaged the property. But you know, now that I own properties with ice and snow issues, I’m glad that my first property was not in one of those terrains.
Vikas | 8:57
Our episode one guest, Taylor has pretty much a fully concentrated portfolio in one place. And he talked about just the expertise that he's built up in that market over the past 10 to 15 years, and how you can go sort of block by block and know what the rents are and know what the good neighborhoods are. You've obviously taken a different approach. You've invested across a wide swath of the country. How do you weigh the trade-offs between geographic diversification, chasing opportunity in different cities versus becoming an expert and leveraging that expertise as your competitive advantage?
Sean | 9:35
That's a great point. I think honestly, if you are super good in one area, then no matter what the economic conditions are, you should be able to make something happen. An example of that, a lot of my friends who are in those Bay Area real estate meetup groups, they only flip in the Bay Area. They don't really buy out of state properties. They only do stuff in the Bay. They can find good deals, and they're consistently making seven figures a year like doing stuff in the Bay Area. I personally am not the kind of person that goes block by block to know every single city. Instead, I prefer to diversify my overall portfolio because, you know, I am worried. What happens if something doesn't go well in Jacksonville? What if there's a crazy hurricane that destroys all the houses there? We like having diversification. And it's also cool to be able to travel to different locations as well. I guess that's it in a nutshell. But don't get me wrong. While we are in those markets, my main focus is building up the team members who have that expertise and knowledge, so I can rely on them to help me. I can basically leverage their knowledge to help me with my assets. So I think the biggest part is creating a good team. That's what's important to me. And opening to different markets, the hardest part is creating that new team. So we're not always trying to spread out but, that's kind of how we've naturally grown slowly over time.
Brandon | 10:56
Let's say I am working and living in the Bay Area. Real estate prices are astronomical. And I want to look at a market that's not in California. How did you identify these other markets? What sort of advice do you have for somebody that's trying to figure out where to invest in the United States?
Sean | 11:18
I think there's two ways to do it. It also depends on how much time you have, and how much you want to deep dive into it. When I was first getting started, I'd look at these top 10 lists and it provides a good start. But the problem with that is, everyone else is also looking at those lists. So the deals you're going to get are going to be, you know, average, at best. If you really want to find your own niche market, that no one's talking about, and find the best deals, you have to do some research.I found this from just talking to a lot of investors on my podcast. But we do a lot of demographic work now. We go on websites like citydata.com, we've looked at the job data, even the census. And you just want to see common trends. Overall, with real estate, it's relatively simple. If the population is growing in an area, that means that more people are moving in. More people moving in typically means demand is going up, so rents can go higher, the value of the property goes higher. But in some cities, the number is different. You see people leaving it, the population is declining. So then properties aren't as in demand, rents go down, prices go down.
Brandon | 12:26
Something else that I want to add to that conversation real quick is just, if you are looking in other areas, something that you can do is to look at the annual financial report of the city. So if you were to Google, like Raleigh, North Carolina, CAFR, it's a cumulative Annual Financial Report, those are audited reports that the city puts together. And it'll go through a lot of the trends that you just mentioned, as well as give you a lot of insight into what the city is spending their money on, and what's coming up, like what's in the development pipeline and stuff like that. So once you identify a couple of potential markets that you want to jump into, that's another way that you can take a deeper look into what exactly is going on in the city.
Vikas | 13:14
You mentioned that when you bought your first property, it was sight unseen. When you bought that first property, did you know your team? Had you met them before? How did you vet them? How did you start putting that together?
Sean | 13:31
When you're first getting started, the most important people to have on your team are going to be your real estate agent and your property manager. So the real estate agent is sourcing the deals, and they should also have some local knowledge of pricing negotiation strategy. Again, when people are buying homes for the very first time, there's a lot that goes into it, like understanding how to read contracts, understanding how to negotiate, and understanding the whole escrow process. So there's a lot to consider. And I would say for someone who's just getting started, you don't need to go for like the super supreme number one deal, just get a solid base hit, make sure the numbers are good. So at least you learn a lot through the first process.
The other team member that you really need is a property manager. So this person is going to be in charge of managing your property, you know, for years and years to come. Taking care of tenant screening, and making sure the property is rented at market value.
Also, when you're looking for properties, you can send them the listing. Ask, is this a property that you would manage? Are there concerns for this area? What do you think we'll rent for? That way you can put the numbers into spreadsheets and see if it makes sense or not. So those are the key items.
When it comes to sight unseen, at the time, I was not a real estate expert. So you could put me in a house and I personally wouldn't know what to look for. You know, like I didn't do any construction work. I have no idea whether this electrical box is good or not. So you hire an inspector. Inspection costs $400 to $700 bucks depending on where you're at. And they'll show all the deficiencies of the property, and you can decide if it's worth the investment or you can negotiate with the seller. There's a lot of flexibility there but me physically going there was not really something that I found super beneficial.
Vikas | 15:54
How did you find your property manager?
Sean | 16:04
I used bigger pockets. I use this for many cities, actually, because I was interested in a few. And I will just post and say, Hey, I'm this investor, I have this, this and this, and I'm looking for this and this, you know, what are your thoughts? A lot of people are very helpful, and they will reply back to that thread. And a few of them, you know, naturally are property managers and real estate agents and they want business. So then I would actually call and talk to meet these people. And just by talking to 10 people or so you can get a feel of who jives with you. And who doesn't. There's some people who are more reserved. There's some people who talk way too much. And there’s people who BS you. You sense it out and find people who you really like working with, then when you find one guy that you really like, you can ask for the referrals, and they can refer you to better people as well.
Brandon | 16:50
So you live in Dallas, you've got property in Florida and Georgia, I presume that those properties are being managed by a third party property manager. How do you hold them accountable? How do you manage a property manager from a distance?
Sean | 17:06
With 34 units naturally, that's a lot of things to look at. Right now my team is set up where every single month, I have a virtual assistant who goes through all of the portals that we have. So that's something that you know, you don't really think about when you're first getting started. But every property manager does things a little bit differently, and they'll have different portals based on how they do things. And consolidating, that can be a pain. That's why I hired someone else. And actually, we use Azibo to combine all of our information into one dashboard, so we can review everything. And during our monthly reviews, that's when I will notice something that's out of whack. A repair may seem abnormally high, so then I'll go to my property manager and ask what's up? Most of the time, for long term rental properties, you do not have major issues, you know, maybe once a year you have AC go out or need a new roof. Fine. I know what that is. But then you notice some problem properties with consistent repairs. And that's when I need to have a conversation with the property manager and ask what's going on? Again, with real estate investing, it really is a team dynamic. You work with people. So you have to be good at talking to people and coming up with solutions together.
Brandon | 18:12
And when you do see the properties with the consistent repairs, you're having a conversation with your property manager, what does that conversation look like?
Sean | 18:22
Just ask, what's going on here? And then you say, is this going to be an issue? Is this problem resolved? You want status updates. I'm not one to usually sell my properties. Like sometimes if it's really bad, we could consider it. But we just try our best to make sure that it's done and done right. If it’s consistent repairs, I might tell the property manager to get whoever they hired to come back and fix it for a reduced cost because they didn't get it right the first time.
Brandon | 18:50
Do you ever walk the properties? Or have your property manager send you photos or videos?
Sean | 18:55
I have walked properties before when I'm visiting town, and if it's a major issue, sure they send us photos. But again, usually that's not the case.
Brandon | 19:07
Got it. And so from an operational perspective, you said you're using Azibo? What does your team look like and what sort of tools are you using to manage your 34 units?
Sean | 19:16
It's usually just one guy and he goes through all of our portals. Every property manager has a different portal. Then you just get the reports, enter them into Azibo, so it’s all in one place for us to look at it.
Brandon | 19:48
Interesting. That's been one of our big pain points at our CPA firm with real estate clients. When you get to the level of a syndication fund, and you're talking about millions and millions dollars, they have professional property managers who do a lot of the accounting for you and send you very professional reports. But for like you and me, if we're not doing that, then we have a lot of property managers who are in all sorts of different markets and use different software stacks. And give you these PDF reports. So the question is, how on earth do you get all that information out and into some sort of accounting system that you can start tracking things on an ongoing basis? But you have a VA? Where's your VA based?
Sean
Philippines
Brandon | 20:32
How did you go about finding your VA?
Sean | 20:34
There's this website called onlinejobs.ph. I use it all the time, whenever I need to find a teammate. Instead of going to a firm, onlinejobs.pH connects you directly with them. It's up to you, as the boss, to interview all these people who apply to your positions.
Brandon | 20:50
And do you use that site to also help with your marketing, the content creation that you're doing?
Sean | 21:00
I have one main VA, who's my guy. And then I have editors who are more on a contract basis. Every video I put out, I pay them a certain amount. Basically only one guy right now. And he does everything I need, whether it's content or checking out my brand portfolio. I've been with him for four years. And I've helped him grow, he's helped me grow. So he's my only guy that's on salary. He's just more flexible. He can learn new things here and there, but you have to train people, and give them the responsibility slowly, not here's everything I want.
Brandon | 21:40
If I'm a new investor, and let's say that I picked up a couple properties, and I'm thinking, I need some help, I want to go look into that outsource VA option. What are common mistakes that you've seen other people make when hiring anybody from the Philippines or any other offshore country?
Sean | 22:00
Not vetting someone. I mean, I think it’s the same, regardless of whether you're hiring in the Philippines or hiring here in the United States. You need to vet your team members before you bring them on board. And make sure that they have just the right amount of access to your accounts based on trust. If they are a brand new person, I don't know if I would give them all my passwords right off the bat, definitely not my bank account statements. With my platforms, seeing my monthly reports, to me, is not a big deal. So I give them full access to my portals, for my property managers, because I know that he can’t just go to my property managers and steal funds from me. Same thing with Azibo, like I can give them access to my personal Azibo account, because, you know, they don't have access to my actual bank accounts, only access to the read only view.
Honestly, it's more that you have to be careful with yourself. Are you hiring for the right purpose? Do you know how to lead a team? Are you just gonna, like dump random things on someone who has no idea what's going on and expect the world? Because that's not going to happen. You have to be reasonable with your requests. Again, I’ve been with my VA for four years, and only slowly integrated him with my systems.
Vikas | 23:10
You're fairly hands off with respect to the day to day operations of your real estate portfolio. What decisions, if any, do you have to make from a day-to-day operational perspective?
Sean Pan | 23:27
As far as a long term portfolio, if they're done, and in the property manager’s hands, I usually don't do much. But again, if there's anything weird, I do have to go back and talk to property managers. We are still doing projects. For example, my wife and I bought a property just 15 minutes from our home in Dallas, and we're doing a full renovation. And of course, that requires a lot more effort from us. Mostly, because we want to do it. We want to have design choices, it's fun for us. It's kind of like flipping houses. Except it's not, because we're not selling it. So we're doing that, you know, we're doing that for the real estate side. Luckily, again, long term real estate investing does not take a lot of your time. As long as you're good at finding deals and being able to execute when you need to. Once that's done, it's set and ready to go and just earning you passive income.
Brandon | 24:10
Let's change gears and look forward. What are you doing in 2023? I mean, are you still in acquisition mode? Or have you pressed pause? I mean, we just had this banking crisis over the past week. How are you feeling?
Sean | 24:26
Real estate in the long run will always be good. That's my core philosophy. I don't want to be super active and like worrying about the day to day minutia. If I can find good deals, and only care about how the market’s doing, I feel the deal is really good. We can still pounce on it.
Now the way you buy might be different. We're not out there, leveraging and getting the highest loans like we used to. When we were first getting started, I was getting 80% loans, maybe 90% percent loans, with a hard money loan. Now we're actually buying a lot of properties in cash. And we're funding everything in cash. And then we know that okay, yeah, our money's in here, maybe down the line, we can refinance, maybe not. We don't really need it. So that's kind of what's different. I know a few years ago, we were in the acquisition mode. So we were buying a lot of properties, we were doing that with a lot of leverage as well. Now, I think it's more about slowing down, stabilizing the portfolio, making sure that they're all performing really well. You know, this is the year for us to make sure that if we need a new roof on the home, let's put a new roof on the home, all that kind of good stuff. So that's what we've been doing. We bought this property about a month ago, we're renovating it. But after that, we may slow down on acquisitions. Until we see what happens.
Brandon | 25:44
The theme that I've heard from many investors is that this year is for buckling down and focusing on operations, because the money is not as easy as it used to be. So it compresses margins, and you have to make sure that you've got great operations in place. And it sounds like you're ahead of the game there with your outsourcing philosophy. So kudos there.
I want to switch gears and just talk about your content. I mentioned it very briefly at the beginning, but you are a prolific Tiktok. But I was doing Tiktok, I think it was early 2022, and I kept stumbling across your stuff. And I was like, oh, man, Sean knows what he's doing. I need to model my Tiktoks after him. I didn't have the consistency on Tiktok needed to blow it up. But I'd love to hear from you - Why create content? What's the purpose?
Sean | 26:42 /
Basically, my wife succeeded and Tiktok first, and we first met she was doing more of the blogging side. And as even more the podcasting side. In 2019, we started doing YouTube videos, but it took me three years before I got maybe 7000 subscribers. But then she started doing Tik Tok in the middle of the pandemic. And her account blew up to 100,000 people. That's insane at a time, right. And, you know, flash forward to maybe 2021 should be doing for about a year now. I said, Okay, fine. I'll try Tiktok, too. And probably like you, I tried really hard for 30 days straight. I made one tick tock video. And the first 10 days were great. I had great content, I was doing stuff, maybe getting 200 views, but whatever it is what it is. But then the other 20 days in the month, I ran out of ideas. I had to make another video and you end up just spitting out garbage, for the sake of putting something out there. It's what happens. You just post something random. And so that's my first few days on Tiktok in January of 2021. And I didn't really go anywhere. So then I took a break. I said, You know what Tiktok is not for me. Let's continue with the podcast and YouTube videos. And then in November of 2021, my wife, Sharon, had an opportunity to work with the Byte Dance team, which is the head parent of Tiktok, on some live promotions. They were trying to get people do more lives. But then they shut that down and said we actually want to try this new creator branch. And she suggested it to me.
And all they really did was give me a regiment. They didn't actually even help me with algorithms or anything. He just said, Here, do this, this many times a day, and boom. And so I stuck to it. So all it was was two videos a day, for the first 14 days or whatever. And you basically have to just find, like the best videos in your niche and make your versions of them. That's it, you know, of course, make your profile nice and everything like that. You have to establish stuff with a good channel. And for the first two weeks, I was getting under 1000 views as well. So I was thinking oh man this is a failure. And the Byte Dance team was also losing faith in me. But then somehow, one video popped off. It got 10,000 views. They're saying, Wow, this is great. Then later, another video got 100,000 views. Oh my god. And then another week later, another video got 12 million views. It was insane. So my Tiktok channel blew up from zero to 1 million within three weeks. It was insane.
I understood the pattern. Okay, I know people want. I’d tried to model more videos based on that knowledge. And then now you know, like on Instagram, I have a million followers. On YouTube. I just hit 400,000. And it’s often the same content. I understand the short form content pretty well now. It really was not inherent. I had to learn over time and try it out.
Brandon | 29:25
So if somebody is trying to get into Tik Tok, or I guess even YouTube, you want to look at what are the top performing videos or pieces of content in your niche, model those or do your own version of them and do it consistently? And other than that, there's really no secret it's just consistency?
Sean | 29:50
And also making sure you're not putting garbage out there. It has to be planned. We script every single line, every single word, because even if you take a breath during a TikTok, the viewer can leave. So you can’t even breathe during Tiktok. And editing has to be on point too. I even have this big green screen in my background right here that you can pull up.
Brandon | 30:15
Amazing. And what opportunities did that open for you?
Sean | 30:20
I mean, tons. I'm able to hang out with you guys here. From the real estate perspective, when it comes to working with new agents, when it comes to work with new contractors, they see who we are, and it instantly gives us some sort of credibility. Versus, when I was first getting started with real estate, they say, Oh, we're not looking for new clients right now. Oh, like, I don't really want to work with you and find you deals because like, who are you? But now it's like, oh, we can work with these people. Cool. And also has connected with some pretty big real estate investors as well. So I mean, all these things just help overall.
Vikas | 30:52
Do you find that you're also getting access to off market deal flow?
Sean | 31:00
Off market deal flow and private money, we get offered that all the time. The question is, do we accept it? And right now the answer has been no. I haven't felt comfortable enough to accept private money from random people, yet. And same thing with deals like, if I'm not in the market, you're giving me a deal from Columbus, Ohio, but I'm not there. I don't really want it. I only want deals in my market, that I know.
Brandon | 31:22
Accepting private money is a completely different ballgame. We see clients struggle with it, where they've been really great at their own stuff. But when accepting private money, you have to have really great systems in place – financial management systems, communication systems, people systems. It’s different and it's a transition.
Sean | 31:45
We've accepted private money from friends and family. And I know how that conversation goes, if something goes wrong. If the project is delayed by a few weeks, or you got overruns for a few $1,000? Maybe a deal lost money? How do you have that conversation? It's really tough with a friend. Imagine what it's like with a stranger. It's not something that I want in my life. I don't need the extra deal or the extra money. Why put this extra burden on my life when I'm chilling?
Vikas | 32:14
I took some money from friends, when I did my last startup. And that was not a fun conversation, when I had to tell them I'm shutting this business down, we're not finding the right traction. Here's 20% of your money back.
Sean | 32:31
At least they got 20%.
Brandon | 32:36
Maybe we should talk about that sometime? Probably a great story. I mean the results but I'm sure there's tons of great learning lessons in there.
Vikas | 32:45
Oh, I learned a ton. Absolutely. And definitely I'm questioning my decision, going forward, on taking money from friends.
Brandon | 32:54
Sean, tell us a little about why you wanted to add this layer of creating content?
Sean | 33:06
In 2018, I had just come off a really big flip. And I did pretty well for myself. But then I felt kind of empty afterwards. It was kind of weird. I remember working so hard to get a promotion at my job. And then this one flip just made like three times my salary at my day job. It just didn't make sense. And then I thought, why isn't everyone doing this?" My contractor didn't really make that much profit due to my real estate agent. So it left me feeling pretty empty inside. So I wanted a way to give back. I figured a podcast would be a great way to do it. The cool thing about podcasts, too, is that you can invite someone on your show, you can ask them all the questions that you personally want to hear for your own knowledge, and then share it with the world. It's much better than asking someone Hey, do you want to have lunch with me someday? And they're like, I don't want to drive to wherever just talk to you for lunch. But for podcasts? Oh, yeah, sure. I'm down. So it helped me in many different ways to learn more about real estate investing, to give back to the community. And it was just fun to do. So naturally, that transition into just making videos and then content in general.
Vikas | 34:14
So in the real estate space, you flip, you have long term residential, you have mid term residential, you've clearly looked into Airbnb. You're playing across a fairly wide spectrum of different types of investments. Are you all residential? Do you do commercial or are you looking at other land development? What else in the real estate game have you looked at?
Sean | 34:34
Most have been residential, for now. I've tried to break into commercial but it's been a little rough. So for the past few years, especially around 201, the commercial multifamily space has gotten really really big. Joe Fairless talking about it. Grant Cardone talking about it. That it just didn't make sense. You can buy this multifamily property. And on a per unit basis, you're getting less money and if you bought just single family houses, with the same unit count. If that’s the case then I’ll just buy single family houses. So that's what happened so far, but I'm definitely not opposed to it. iIn the future, if a deal makes sense and I can finance it – I'll go for it.
Vikas | 35:11
What about like retail strip malls?
Sean | 35:13
I'm not sure if retail is going to come back in a very big way. You go to malls, and they're mostly dead now. And unless you have some cool like, swanky spaces. People do love triple net stuff, right? It's just not for me.
Vikas | 35:30
So it sounds like mainly sticking to single family homes, and looking into multifamily commercial but haven't found anything promising?
Sean | 35:40
Yes. We have some fourplexes here and there. But most of them are single family.
Vikas | 35:43
At the beginning of the podcast, you mentioned going to these meetup groups. You had conversations with people, they were willing to tell you things that they weren't going to write down. Is there anything there that you're willing to tell our audience about?
Sean | 35:53
It was more the logistics of things. For example, do I need to pull a permit for this? Or how do you 1099 somebody? I didn't know how to do that stuff when I was first getting started.
Brandon | 36:20
Yeah, I had the same experience. When I was in Maryland, there were lead paint laws. And the local real estate society would tell you, the lead paint laws are important. But the reality was that if you just Windex, your window sills, rub them really hard right before the guy comes to inspect them, then generally you pass. So go to your local real estate meetups, because you can get the local tips. don't do anything illegal or bad or wrong, but definitely go and engage the local community, because you just never know who you're gonna meet
Sean | 37:04
The cool thing is, you can also ask your random questions. And yeah, you can't really get that from listening to a podcast, because they might not talk about your specific problem.
Vikas | 37:14
It's the same exact dynamic and tech startup founders. You get a few founders together, and you're going to get to ask all the questions, you're going to hear all the questions and you're going to even get the quote, unquote, boring operational stuff that you absolutely need to know to run your business that no one's gonna write a blog post about, like, how do you turn 1099 people? Or do I really need to contract for this? Or do I really need this level of business insurance? My lawyer is telling me I do but does it really matter? And all those things you only learn by being in it.
Brandon | 37:49
The best lawyers are the ones that you absolutely love when the time comes. So yes, I would have to go through this whole thing, and then something happens. And you go, man, I love my attorney. Here's a little gift basket.
Anyway, let's close this out. So we've got three final questions for you, Sean. The first is, what is your favorite book? It can be real estate doesn't have to be real estate related.
Sean | 38:15
Yeah, so I used to read a lot of books, inspirational books, how to real estate books. But lately, I found myself really liking autobiographies. And because you can like, put yourself in some really successful person's shoes. And when they encounter a situation before they tell you the result, you can think, what would I do here, and you can learn from their experiences. So maybe when you're in that same situation, you can do the same thing. So that being said, I think right now, Shoe Dog is probably my favorite book by Phil Knight, the founder of Nike, again, because he had very humble beginnings, and then created a very big empire.
Vikas | 38:49
I second that. That’s a fantastic book.
Brandon | 38:54
Yeah, I'll check it out. I've not read it. Have you ever read the I think it's the Almanack of Naval I've seen that one floating around. And it's been on my list.
Sean | 39:06
Yeah, I read that one, too. Actually, it's good for content creators because he talks about permissionless growth like, right now you can do whatever you want, you don't have a boss telling you that you can only go so high right? With us real estate investing too. You can do as much as you want. And no one can tell you no.
Brandon | 39:22
Very good. Love it. What do you think is more important with real estate investing – cash flow, or appreciation?
3932 Sean
Kind of a mix. I think cash flow is very important, up to a certain amount. So for example, if you're first getting started, and you want a way to quit your job that you really, really hate, then cash flow is super important because it gives you the freedom to do whatever you want. However, after a certain point, you actually don't need that much cash flow, right like after $10,000 a month. I don't need more cash flow to live my lifestyle. Instead, I want the appreciation to boost my net worth significantly. Like I mentioned early In the podcast, the property I have in the Bay Area is probably 1/4 of my net worth, because of how much it's grown. And I only paid so much for it. But because I got it with a loan, that money has appreciated with leverage, so it's grown exponentially because of that. So, again, long answer short, cash flow is important up to a certain point. And then appreciation.
Vikas | 40:22
You mentioned that you're currently buying homes with cash. When you do the math on those homes, and you're looking at the cash flow, are you doing the math with an assumption around a mortgage at some point? and looking at if the cash flow will cover a loan, if you want it to take one? Or are you looking at it purely from the perspective of 100% equity?
Sean | 40:47
We do think about that. We have different exit strategies. And we want that to be an option. If we decide to take a mortgage on the property that covers all the money we put in, will it still cash flow, but you don't even think about it. If you can buy a property, fix it up and do a cash out, refinance, and get all of your money you put in. And it still cash flows even just a little bit. That's really good. Because technically, you just got a house for free. That cash flows and continues to appreciate. In that sense we're not super worried about the minutia, the numbers here and there. But as long as overall the numbers worked out, and it makes sense, then yeah, we'll still do it.
Brandon | 41:22
And you're getting that principal pay down. And so you get a principal pay down for free little cash flow for free. And you got all your money back.
Final question. What is one final tip you would like to leave for our audience? If there's one thing that you want them to know or take away from this conversation? What would that be?
Sean | 41:42
I mentioned this many times before, but you got to start attending your local meetup groups, go to meetup.com. Go to your city, find some local real estate investors, hang out with them. The books and podcasts provide logistical support. But then meetup groups give you emotional support. So you have a community of people who can help you. And even if things fail. I've had failures before. I went to my real estate Meetup group guys, and they totally understand where I was coming from. None of my other friends can understand. But all of our real estate guys were like, it's okay. Same thing happened to me. I lost X amount of money. We're all gonna be okay.
Brandon | 42:18
I've become a hermit after the pandemic, you know, so I'm gonna have to go and take your advice and look at some Raleigh local meetups to go and start attending. I appreciate that.
Sean | 42:20
There are zoom meetups too. You could always do that as well.
Brandon | 42:34
Sean, tell our audience where they can find you. Be sure to plug your awesome content.
Sean
You can find me on youtube Instagram Tik Tok with the handle @Seanlovesrealestate
You'll be the first to know when our first episode drops!
