E51 | How to Scale Your Portfolio After You Run Out of Money | Cory Jacobson

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What if everything you've been told about getting rich through real estate is wrong? Cory Jacobson of Wealth Juice — who started with $25K and a house hack while earning $35K/year at the Philadelphia 76ers — reveals why cash flow is NOT the goal, how he turned a $40K investment into $160K in 4.5 years, and the exact strategy he uses to build wealth through equity exits, mid-term rentals, and 5–20 unit multifamily deals that institutions overlook.

Key Takeaways:

• Cash flow is a defense mechanism — equity is where the real money is made
• The 1% rule still works in markets like Indianapolis, Detroit, and Augusta
• House hacking is still the #1 starting strategy for anyone without kids
• Out-of-state investing forces you to build systems and remove emotion
• The 5–20 unit multifamily space is a blind spot for institutional capital
• You can own properties you've never visited — boots on the ground is the key
• With $20K, you can either house hack or buy in a lower-cost market
• Analysis paralysis is more exhausting than actually buying your first deal
• Good insurance isn't optional — it's what saved Corey when a property caught fire
• Patience over 5–7 years is the single most important skill in real estate

Resources & Links:

• Connect with Cory on Instagram: @WealthJuiceOfficial
• Wealth Juice Podcast: Available on Spotify & Apple Podcasts
• YouTube: Search "Wealth Juice"
• Mentorship/Inner Circle: DM @WealthJuiceOfficial on Instagram

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LEGAL DISCLAIMER:

This podcast is for informational and entertainment purposes only. Nothing discussed constitutes financial, legal, tax, or investment advice. Always consult a licensed professional before making financial decisions. The hosts are not financial advisors and results discussed are not typical.

Transcript

SPEAKER_00 0:00

How can you relate to being a broke millionaire? I crossed over the millionaire threshold like this year, actually. But I think what ends up happening is that what you realize about real estate, it's really not liquid. If you want to pull money out of properties, you have to take home equity lines of credit or you have to sell. So you have all this equity in these properties. And as soon as the equity hits a certain amount, the thought process is, well, I need to exit or I need to trade up. But every time you trade up your equity, it just gets locked in another asset. But your personal liquidity is oftentimes dwindled down, cash for an asset rich. And I think a lot of real estate investors have that issue. Wait a second. Do we keep trying to buy these duplexes and trifluxes and quads ourselves? Or do we find people that were better than us and partner with them and find a skill set of somebody who's looking at 15, 20, 30 unit projects? I'd rather own 30% of a larger deal than 100% of a small deal because I couldn't figure out a way to not continuously run out of my own money.

SPEAKER_01 0:51

Welcome back to The Broke Billionaires, where we document our daily struggles and building wealth while raising a young family. Join us as we talk creative wealth building for everyday people and couples that are struggling in a down economy. I'm Lauren.

SPEAKER_02 1:04

And I'm Joshua Massari, and we'll be your host.

SPEAKER_01 1:08

We are so excited today. We have Corey Jacobson from Wealth Juice. How are you, Corey?

SPEAKER_00 1:13

I'm doing great, guys. Thanks for having me on. I really appreciate it.

SPEAKER_01 1:16

Good. We're excited to chat with you today. Let's just jump right in it. Um, what is the biggest lie that people are being told about getting rich through real estate right now?

SPEAKER_00 1:25

Oh man, the biggest lie is that cash flow will set you free, I believe. And um, I think if you were telling the story in 2010, 11, 12, 13 in that, in that range, I think that when nobody wanted to invest in real estate, by the way, I think the story was go buy 10 rental properties, let the cash flow pay for your lifestyle and go live on a beach, or or that is attainable through 10, 12, 15 rental properties. But now when you hear when I hear that online, I literally cringe because I know that the biggest exits and the and the most money that I've made through the real estate game has not been based on cash flow whatsoever. It's been the fact that I'm a real estate professional and I can write off my taxes and I have these liquidity events, we call them, where you know I take a property, buy it for $135,000 and exit for $350, and you turn our $40,000 investment into $160 in five, four to five years. That's the real money in real estate. So the lie stems from cash flow is the only important metric.

SPEAKER_02 2:19

I think that's changed a lot from when I kind of first graduated. I graduated in 2007. And when I got out, like I was kind of I had been exposed to real estate, but I would say like three or four years later, I bought my first house in California. And then I really kind of bigger pockets podcast came out. And I like the first hundred episodes was kind of like where I got all my real estate knowledge and a lot of strategies that I used. Back then it was like the 2% rule. You know, you got to find 2% rule and it's gonna cash flow, and then you get like you're saying, get 10 of those and you'll be good. That doesn't exist anymore. So like the like that narrative has changed a lot just because the landscape has has changed so much in real estate. One, there's a lot more people in it, you know, the interest rate environment, and then just prices going up, it's just not attainable. But yeah, you're right. The equity is where the money is these days.

SPEAKER_00 3:02

Well, especially for people like you who live in California, maybe one of the most expensive areas to buy real estate. You know, I know people that have owned real estate there for 10, 15 years and like, you know, they're multi-multimillionaires because of a few properties, you know, and not because of the cash flow that these properties were spitting off, but because of buying real estate and waiting. And I haven't seen any deals that the 2% rule works out, but I will tell you that there are 1% rule deals that are out there. You just need to know who to talk to, how to find them, how to build your team, and how to build your network to the point where you can acquire these deals. And cash flow is important. It allows you to play defense and hold on to these properties long enough for you to have actual exits. If you're real estate, if you're thinking about the short term, like one to three years, I think it's pretty tough to win in real estate. But five to seven plus, it's almost hard to lose at that point. And that's because of the devaluing of the dollar and the inflation and all those things that real estate carries, you know, um, as benefits as a hedge against. So I think real uh cash flow is extremely important. It's just, I think people need to flip it on their head as to why it's important.

SPEAKER_02 4:06

Yeah, that makes a lot of sense. And you know, here in California, cash flow is not a thing. It's not you get like 3% or 4%, but we've we've switched to uh we we started doing midterm rentals, so we are able to cash flow and we're able, we've been very successful at that. So we've kind of figured out a way to cash flow these properties and figure out a way to hold them for that longer term and get that appreciation. As the the you know, the dollar goes down. We saw that a lot in the last five years. So we've got three properties and we've we've you know gained massive amounts of of equity by holding these properties the last few years. So definitely took advantage of that.

SPEAKER_00 4:36

I love the I love the midterm strategy too. I have we have a me and my partners have a 10 unit that uh we invest in Vermont and New Hampshire, and we have a 10 unit near Dartmouth Health. So we six of the 10 units are being rented to uh to traveling nurses at the healthcare institution. So that is a strong strategy. It's just it's a little bit of a different model because you you have to have you have a little bit more turnover, you can get higher rents for it, but you know, the management has to be a little bit more on point, and you have to oftentimes you have to furnish these properties too. But I think that is midterm or co-living or either one of those, I think is a great play in in 2026.

SPEAKER_01 5:09

That's so funny. The the travel nursing is kind of what why we started our midterm rentals. And didn't we figure out we haven't had actually one single travel nurse as well?

SPEAKER_02 5:18

We've had maybe maybe one or two, but we've got just a myriad of people like we never even expect, like, like it's just there's so many people looking for these midterm rentals that we had no idea there was a market for. So we kind of fell into that and got lucky with that.

SPEAKER_00 5:30

I think traveling nurses like lead the way in like who you'd potentially be renting to, but it's really like traveling professionals, right? And there's a lot of professionals that are on site as consultants for a period of time or they're in a place for a year doing a construction project or something of that nature. And I think because of what has happened since COVID and the the ability to travel for work in terms of like, or people just switching jobs at a high frequency that people want to experience new cities, I think that's played a role into it too. But yeah, you're right. It's uh it's not just traveling nurses, it's just traveling professionals.

SPEAKER_02 6:02

Yeah, for sure. All right. I want to ask a question about a little bit about you yourself.

SPEAKER_00 6:06

What were you doing before you got into real estate? Yeah, this is a this is a good question. So I actually uh I'm in Philadelphia and I actually worked for the Philadelphia 76ers uh and I ran their youth programs. So I'm a basketball junkie at heart. And uh what but I what I realized is that they pay the players a lot more than they pay the rest of the organization. And you know what? They should, because that's the product that they're putting out on the floor, and that's that's it's it should work that way. But I was making like $35,000 to run their youth programs and working crazy hours. I loved it. It was like the most fun I ever had. But my boss told me, I really want to keep you here. I can get you to $40,000 or $45,000. And I was 26. I'm like, dude, I don't know if that's really gonna work. Like, I eventually I need to make money. He's like, all right, this is what you should do. You should buy a five-bedroom house and you should rent four of the bedrooms out to people that work here, all these young people. That would be great. That'll allow you to, I can't pay you more, but that'll allow you to save money so that you can stay here longer. And I was like, I kind of took his advice. I bought a three-bed, two bath. I lived in one of the bedrooms, rented out the other two bedrooms. I went from paying $1,000 a month in rent to living for free. And that is when the switch flipped for me. And I was like, wait a second, okay, I can I can duplicate this. And, you know, this is before I'm engaged now, I don't have any kids yet, but this is before all that came into play. So it allowed me to save up, you know, my uh my my income. I got a sales role, I bought a duplex here, I bought a triplex here, and I just one at a time. My goal was one a year for 10 years. And then the sales aspect of the job change allowed me to make more money and then just save up and deploy, save up and deploy until we got to about eight units, 10 units, and then we ran out of our own money. And that's how like the podcast and the social media and all of that took off, and we were able to grow from there.

SPEAKER_02 7:45

Nice. Um, so that that actually brings up a question. Uh, you know, the name of our podcast is The Broke Millionaire. So you're sitting on 10 properties and ran out of money. What can how can you relate to being a broke millionaire? Because a lot of people have a hard time understanding that concept.

SPEAKER_00 7:59

Yeah, I I crossed over the millionaire threshold like this year, actually. So it's it's a new thing for me. But I think what ends up happening is that what you realize about real estate, there's so many beautiful things about this real estate game, but it's it's really not liquid. So if you want to pull money out of properties, you have to take home home equity lines of credit, which is great, they work, or you have to set to sell. So you have all this equity in these properties. And as soon as the equity hits a certain amount, the thought process is, well, I need to exit, or I need to trade up. But every time you trade up your equity, it just gets locked in another asset. That can be good, but the problem is that, yeah, your your personal liquidity is oftentimes dwindled down. So you have all this, you know, it's it's cash poor and asset rich. And I think a lot of real estate investors have that issue, which is why Ryan and I were like, wait a second. You know, should we keep trying to buy these duplexes and triplexes and quads ourselves, or should we find people that were better than us and partner with them and find a skill set of somebody who's looking at 15, 20, 30 unit projects? And our skill set is marketing and sales and investor relations and underwriting and management of our property manager, and then he manages the construction. So we were able to grow that way by saying, I'd rather own 30% of a larger deal than 100% of a small deal because I couldn't figure out a way to not continuously run out of my own money. So that I I don't I don't know if that totally answered your question, but that's why you pivoted.

SPEAKER_02 9:27

That's absolutely, I mean, we we have, you know, especially here in California, we have so much equity locked up and you can only do so many HELOCs and third positions and cross-collateralization, and you just we just end up with a lot of equity stuck in these properties. People have a hard time like grasping that if they don't really understand that, like multi-millionaires, but you're broke. So because we've got you know big pro the projects here that we do are are pretty big, and we'll buy a property, it's $1.2 million, and you know, we got to put three, four hundred thousand dollars into it to get it to the next level. So it it definitely takes a lot of capital, but it's just yeah, it's the game we play.

SPEAKER_00 9:58

So it definitely is the game we play. And I I think that the uh but the whole thing is that even with your equity tied up in these properties, it's you know it's still going to work for you. Like it's still working, and like you uh there are opportunities as the market shifts to trade into new markets, to trade into new assets, and you're playing this real life monopoly until you have I and I haven't hit this stage yet where I'm like liquidating any. I'm still in the building phase, but I I have been able to sell a couple properties and I've been able to uh take home equity lines and do refinances where I get large chunks of cash, or I'm sorry, tax-free wealth. And then you do realize it along the way, but I think it's hard as an investor to like be like, oh, I have all this money in the ground. Like, what do when can I actually realize that cash and use it? And it's to me, that day hasn't come yet either. So I'm in the same boat.

SPEAKER_02 10:47

Yeah, but you know it's you know it's coming. We've kind of we so we do out of state investing as well. We uh we invest in South Carolina and some in Texas. And we kind of went through our five to seven year cycle in South Carolina and we've sold off most of those properties. We still have a few, but we've kind of recycled that and then we kind of started moving into Texas as the landscape changed in South Carolina with just taxes and and and everything. And so now we're we've got like an apartment building, and so we're kind of building up that, but we've also got these California properties that we're now considering exiting some of those because there's just so much equity that's locked up, and it's like, let's take that win, move that in, buy a couple more properties and start the process over. So I can definitely relate there.

SPEAKER_00 11:23

Yeah, absolutely.

SPEAKER_01 11:24

Was there one specific deal that kind of changed everything for either you personally or you and Ryan together?

SPEAKER_00 11:31

Yeah, I think there's there's two that come to mind. Um, and we've we've had our bumps in the road and some and major mistakes, but we I'll give you an example of one deal that did really like shift. I actually just sold it, but it allowed me to think about the velocity of money in a totally different way. I bought this property for $135,000 as an estate sale in 2021. And we did what's called a home style loan. So you you wrap the renovations of your loan into the mortgage. So we bought it for $135, we put $60,000 of renovations into it. So we were all in for $195, day one, it appraised for $250, and we were like, great, we're cash flowing. The mortgage was uh $1,600 a month, and we rented it out like within a couple weeks for like $2,800. So we were cash flowing probably around six or seven hundred dollars a month. And but what I realized is like after this run-up of appreciation in COVID, I kind of looked at this market and thought, hmm, am I gonna get this level of appreciation over the next five years like I did the last five years? And the answer was no, I don't believe so. Ideally, we would at 1031, but we like did an appraisal. We got the value of this property, we found out it was about $350,000. So, and that was from 2021 to the end of 2025. So four and a half years, we turned a property from $135 to $350. We put $40,000 into it and we were able to exit with $160,000. And I thought, man, if four Xing my money in four and a half years, like that's you're you're not gonna put four 40 grand into the stock market and four X four X it in four and a half years. That's without additional contributions. What other asset can you do that with? I think the key is patience, but then also knowing, like, I thought I was gonna hold on to these properties forever. Like I thought I'm gonna have them and they're gonna be paid off, but I realized that 160 grand was more useful to me in another investment. So I think that deal, and that was just a single family home, but I think that deal that we recently sold was like, okay, now I really understand where we where do we want to get these properties to? Like, what's the actual exit strategy, not just six, seven hundred dollars a month in cash flow? Because think about how many years of cash flow it would have taken for me to four and a half X my my return like that. So that deal was huge. And then we started to buy larger deals and say, okay, if we can do it on a single family scale, why can't we buy a two million dollar asset and then try to exit it, even if it was double four million in in four years to five years, that's now kind of our business model. So that deal was huge for us and it kind of paved the way. What do you think that deal taught you that a lot of beginners miss? I think patience, really. Um, because I can tell you, this is one of those deals when we were more in the weeds in our in our business and we were at the property and we were fixing stuff, and we had a contractor who was like more of like a handyman, but he served as a contractor and he he was great. He did a lot of stuff, but he was calling us every day, you know. And then once we put the management systems in place, I realized I could remove myself from that, but really patience. That's what it was because I couldn't see the money. I'm not looking at it in my bank account, growing steadily at 10% or whatever it is in the stock market. It was like, when is the right time to exit this? And I realized I had never been through like a real, true, full cycle of real estate. And I think you know, going back to just like staying the course and realizing that time will allow you to win, um, as opposed to I think what happens is you kind of feel like you need quick wins. I want to get rich quick. And real estate is not fast, it never has been. I don't think it's designed to be that way. Um, and I think the more people that that talk about it in like trying to get rich quick, I think it's it's kind of it's it's opening up the door for the wrong people to try to get involved. That's kind of my take.

SPEAKER_02 15:18

Yeah, no, that's good. You you everyone everyone thinks real estate, the first thing they that comes to mind is flipping because of all the shows and stuff. So they always think flipping and you're, oh, they made this amount of money. We don't flip. I don't like flipping. There's so many negatives I think about flipping. Yes, you can make good money. I'm not knocking it because there's people that do real well at it, but you there's a lot of risk. We've had we've known people that have lost hundreds of thousands of dollars on single deals when the market turned a couple of years ago and they got stuck holding the bag. Um, you know, you don't have, you can't do anything with the taxes. It's it's literally just income and it's really hard to offset that. So, you know, our strategy is we'll hold for a while, get it, get it renting, and then if we do exit, we've got a lot more options. You know, we can 1031 because it's been a rental property. You know, we can we've got time and we can strategically plan it. And now that bonus, well, see here's the thing. Now the bonus of depreciation is back. We were holding this one big property that's been just it's it's a very high carrying cost. And we're like, you know, was this the right move? I don't know, I don't know. And people are like, why don't you just sell? Why don't you just sell? And we're holding on, holding on, holding on. And all of a sudden the tax law has changed this year. So now we're looking at a very large exit on this to be able to get that. And now we've got an option to be able, and it's been renting. So we have an option to 1031 some of it, and then also acquire more properties and take bonus depreciation to offset that. So yeah, holding like for the right time is is huge rather than just get in, get out. I think that makes sense.

SPEAKER_00 16:34

Yeah, there's no real right time, right? Like who knows when the right time is? No, no one's there's no crystal ball. And I think that you just make the the best decision that you can with the information that you have. But I would agree, flipping is owning a business, buying rentals is like you're an investor. It's it's different. Now you can do both. And I know a lot of people that because you're around the real estate game, you can certainly do both. It's a lot harder to make you know um rental properties work today. But to your guys' point, you're in California, you're not buying rental properties in California, you're buying rental properties in Texas and South Carolina. There's members of our community that we teach. I started my in my backyard, like Philadelphia, New Jersey. That's where I was buying rentals. And then I realized that the landlord like tenant laws were not really favoring me in New Jersey, and I kind of the prices started to skyrocket. So we started to go to other markets, but you know, you can find deals that are $120,000, $150,000 properties that rent for $1,700 a month in markets like Indianapolis, Indiana, or uh Milwaukee, Wisconsin, or Detroit, Michigan, or Augusta, Georgia, just to name a few, that you don't need to live near these properties. And you you guys are living proof. Like you don't need to live there. I think people think, oh, back in my backyard, paint on my jeans, I'm the landlord. Like if you think that way, you're gonna get stuck in that way. And I think as soon as we started to go out of state, actually forced me to not be the one being at these properties fixing stuff, allowed me to hold on longer because I wasn't thinking about all the problems that could come up with these properties. I think that's the emotional decision that a lot of people make. It's like, well, I I literally was coaching my good friend through this. He's owned properties in Philadelphia for like six years, and he texted me, he's like, I really want to get rid of this. And I was like, what are you doing right now? He's like, I'm fixing this lock on this door. I'm like, yeah, you're at the property trying to make an emotional decision that you don't want to be at this property. I was like, why don't you hire a property manager? He's like, I don't want to, I don't want to pay them. I'm like, how much are you cash flowing? He's like, well, my mortgage is $2,900 and I pay $1,300. I'm like, what are you doing, dude? Like, get a property manager. You'll lower that cash flow from $1,100 a month to $900 a month and not have to be there fixing, you know, locks on your door. So it's because he lives in the area, he thinks that he has to do it all. And that is the shift that we made in our business that changed things. And I think there are a lot of people that can do out-of-state investing. They just don't know how to do it or how to build the right team. And I think that's what separates like people that really want it from people that are like, oh, well, there's no deals in my backyard. I'm not gonna, I don't know where to look. Sorry, I can't. I guess I can't invest in real estate. I guess I'm not rich in it.

SPEAKER_02 18:55

Yeah, no, that's so good, especially people in markets where it's harder to get in. They use that as an excuse where, you know, we we've got a portfolio in South Carolina, in upstate South Carolina, and then also in kind of like suburb areas in Texas. We've never been to either state. I've never been to South Carolina, never been to Texas, I've never been to the cities that we own properties. I've never even been there. For all I know, they don't exist, but I know that the cash flow is real. I know the equity is real because when I exit, I get the money, so it all works out.

SPEAKER_00 19:17

Um, but you know, we find people that's brilliant though, by the way, that you're good, you own properties and you didn't even go there in the beginning, like to start, to look at these properties at all. And I think that scares people, but the numbers don't lie. And building your team is is is the most important thing. So I know that you have boots on the ground over there that are clearly doing the work, or else you, you know, isn't it?

SPEAKER_02 19:38

Yeah, no, I got a yeah, absolutely. I got a partner in South Carolina, a girl I actually went to high school with. She's a realtor out there, became an investor. And so she's my boots on the ground. She'll go walk it. Because like you see something that looks pretty in the pictures, and you know, it may look nice, but you don't know that it just totally like smells like cat urine or it's got like mold, like those are things you don't see in the picture. So she'll do the walkthrough, do a video walkthrough with FaceTime, she'll point these things out, she'll go in there and be like, the sort of the you know, the floor is caving in if you don't want this house. So, like those things that I wouldn't normally see and might end up buying something bad, I get that that feedback. Because a home inspection is only gonna tell you so much. I've got that home inspectors have a lot like missed major, major issues in the properties we bought. So having somebody that actually knows what they're talking about to walk the property is is so, so huge, I think.

SPEAKER_01 20:18

Yeah, I agree. What would you tell someone listening to say if they have $20,000 to invest? Like what strategy would you tell them to kind of run with?

SPEAKER_00 20:25

Uh okay, this would depend to me at the stage of life that you're in. So um I'll there's a couple ways to do this. So if you have $20,000 and you are single or maybe don't have kids yet, I I still think you should house hack. And I I still think that will set you up financially. Now, what does that mean? You could you could do what I did and share rooms, uh, not share rooms, like share, yeah, share rooms in your house, basically, of three bed, two bath, live in one bedroom, or you don't even need to go that route. You could buy a duplex, a quadplex, a triplex, whatever it might be, and live in one unit and rent out the other units. That is still the best way to be a landlord on training wheels, like and learn the game and learn what to do, what not to do. Get your organizational structure for your management in place, start to build your local team. The stakes aren't as high because you need to pay for housing some it's some way, right? And you're there. So that is still, in my opinion, the best way. And the problem that people run into is that they think, well, you used to be able to live for free. Well, let me give you an example. In Philadelphia, if you were to get a downtown apartment and you were to get a nice place for even if it was just a one bed, you're paying probably $1,800 or $1,900 a month, and which I know probably in your area is like a joke. That's like not even possible. But just bear with me here. So, uh, or $2,000 a month for a really nice place downtown. You don't have to try to live for free, but what if you could reduce your expense from $2,000 a month to $800 a month, and then you have twelve hundred dollars a month of Delta that you're able to go and invest in whatever you'd like to invest in. So That's the lowest barrier to entry without a doubt. We tell people if you have $20,000 to $30,000, and actually that it's funny that you mentioned $20,000 because about $20,000 to $30, is like where we say, okay, you're ready to potentially start. Now, you can go buy a $110,000 property in Detroit, Michigan, and people think Detroit is shitty everywhere, but it's actually not. Like there is there's a booming economy in Detroit, and you can buy a property that's $110,000 that rents for $1,300 a month, and you can have a property manager, you can build a team, and you can start that way. That would probably you'd probably need 20 or so to get into that property, depending on repairs and everything, if you're going to put 20% down. So there are ways to do it. And I think it's either if you're young and you're hungry and you don't have kids, house hack. And if you do have kids or you're just not in that stage of life where you want to house hack, go to an area where you can get in the game. And that might mean buying a property that's $150,000 instead of buying a property that's $600,000 because you can trade up to that equity and that equity position at some point. But don't try to wait 10 years until you have it saved up to try to go buy an $800,000 property if you can get in early, because then your properties will buy you properties, not you at work. And I think that is probably the the the biggest misnomer. People just don't think they can do it because they don't know where to look or how to find it.

SPEAKER_01 23:17

I love that you said that so much because I think so many people's mindset is like get into a house and just kind of stay there, right? They don't have that kind of goal of working their way up and um Or they think that they sell it to get the next one.

SPEAKER_02 23:29

They don't think about leveraging it or using that property to buy two more and and and build it up that way.

SPEAKER_01 23:34

And then also we think about it this way for four kids.

SPEAKER_02 23:36

Right. Go ahead.

SPEAKER_01 23:37

Oh no, I was gonna say before kids is probably the biggest thing because that's the one thing we say is like we wish we would have started this earlier because now with I mean, we have four kids that are six and under. And so doing this with four kids has been quite the challenge for sure.

SPEAKER_00 23:51

That household is that's a busy household. That's a rare thing too, which is which is, you know, and if you do have that, I don't know any way that you could house hack at this stage, nor would you want to, right? Right. You want to live your life and you want to have, you know, and enjoy your space. But I will say, I think one of the biggest mistakes that anybody makes, and I know it's so much harder to buy a home now, just a primary residence than it used to be, but I think the biggest mistake that people make is just going and trying to buy their dream home before they own any other real estate. And my whole thing is like, I'm 34. Uh, marriage, kids, all that stuff's on the way. Like, I want the big life in the house and all that stuff, but I have delayed the gratification so much so that my houses are gonna buy me my dream home, not my like my income. So buying a house hack and buying a duplex and buying a quad and then trading up all of those properties, like Barbara Corcoran says, you can have the house on the hilly, but you just gotta buy the crappy house first. And I think there's an ego thing that goes along with it that people do not want to do that. They say, well, I deserve this. Well, sure, you you may feel that way, and that's fine. But it's hard to go backwards and start over. If you start and get in and buy a crappy house and learn, learn all the mistakes and do it that way, then the trading up process ends up being not even your own money. It's it's the money that grows with the market. So that's the biggest like issue I think people have is they buy a house, they max out their DTI, and they're like, well, I'm spending $5,000 a month with this home. Now I don't have any extra money to go invest. Well, you did it in reverse. That's the problem. So it's and it's it's people listen to this. I hope they don't feel bad. It's like you can fix it. It's just harder to fix when you're on that side of it than if you had started the other one.

SPEAKER_02 25:26

Yeah, for sure. We bought here in California, my first property that I bought before we were married, I bought with uh an FHA. This was in 2011 when prep property prices were like the lowest they've ever been. Um, I pulled out money out of my 401k and it was you know 3.5% down. I bought that first property, that property bought our next property, and then that property bought our next one and funded all the renovations along the way as well. So that's you know, $15,000 initial investment has turned into a $5.5 million portfolio.

SPEAKER_00 25:56

Yeah. And I could, I it's so interesting that you say that. And it's I didn't even know that this was the case for you, but it's very similar to me. I put $25,000 total down and you know, I saved up for the next few properties. But that I like if I trace that $25,000, that initial $25,000, I mean, you know, it's start it was the catalyst that allowed me to become a paper millionaire, right? And you know, I don't have a million dollars in my bank account, but that we that's what we were talking about. But it's it's it's the catalyst, and and who would want it in their bank account? It's not doing anything there. But that's the I totally agree. And it's it's all about I think if anybody can do this for five to ten years, like if you can really just it seems long, it is long, but like my properties that I bought in 2018 when I started are the biggest returns that I'm getting now. So it's all time that's just taken to get to this stage. Um, and the properties that I'm buying in 2024, 25, and 26, they're not even bearing fruit yet. So it's it's all a long process.

SPEAKER_02 27:10

Yeah, I always say like nobody regrets a house they bought 10 years ago. You know, there's cycles when they go up and down, but 10, a 10 year will give you in and out of a cycle and like you're you're good at that point. Very few people are gonna be upside down or regret that purchase if they've held on for that long. No, no. Uh it's funny you brought up house hacking because that's how I started. I I bought my first house at 18, house hacked, then bought my next one at 21, house hacked, and then took a few years off when I got to California because there were a lot bigger houses. I would still be house hacking today if my wife would let me, but well, okay.

SPEAKER_01 27:37

So we were when we got engaged. Literally the day we got engaged, he moved in and we had roommates in our it was a three-bedroom.

SPEAKER_02 27:44

We didn't own we didn't own that house.

SPEAKER_01 27:46

No, that's true.

SPEAKER_02 27:46

But that was our the first house that we did buy together did have an ADU in the back, which of course we rented out. So immediately we were house hacking up until just a couple years ago.

SPEAKER_00 27:55

Yeah, that's the thing that like once you start that, it's almost hard to be like, well, now I don't have a house that pays me. So it's kind of it gets like a little bit like, well, I guess eventually, with you guys have four kids, right? I mean, it's you're in a totally different stage now. But you know, I I was talking to somebody the other day who I'm kind of mentoring, and he's like, Yeah, right out of right out of college, I bought a house and it was great, and I was like living for free. And then I sold that house to get to my my house that I now have with my wife, and he texts me and he's like, Man, I really wish I still had that house. Like I so it's kind of hard to let those things go. But if you can hold on to them, um, even that's why I like portfolio optimization too. It's like you don't need to grow just to grow. You don't need 60, 70 units. Like if you had, if you buy and hold 10, 12, 15 units over a 10, 12, 15 year time frame, like if you if you can hold on to those, some of those properties can start to really cash flow. That the cash flow really kicks in at like that five to seven year mark. That's when it really starts to get fun. And it's like, well, I can actually realize some of this cash flow. It's not all getting reinvested just in the property to hold it. So yeah, for sure.

SPEAKER_02 28:59

Um, what's your your quick filter for knowing if a deal that you're looking at is worth pursuing?

SPEAKER_00 29:03

That's a great question. I analyze so many deals in so many different markets, so I think it would be difficult to pinpoint that. But if I'm an out-of-state investor, I still think the 1% rule is something that could that does work. Like in any of these markets that I just mentioned, like you can still find deals that are uh $150,000 that rent for $1,500 a month all day long. Um, so that's still an out-of-state thing. But for us, you know, we're looking uh when we buy like five to 20 unit multifamily in Vermont and New Hampshire now, what we're looking at is the infrastructure of this area. There's a big tech scene, there's eds and meds. But what I'm noticing is that there's a 0.4% vacancy rate in this area called the Upper Valley. And the problem is that they're about 10,000 housing units short of what would bring them current. So the demand for rents is just skyrocketing. So, you know, that's not like a back of the napkin math thing that I can just walk through in one second, but the the areas that have high rental demand, and why is that? And it's sometimes it's highly regulated areas because builders are not able to build. And I know California is like this too. It's that's why the ADUs came into play, is because builders weren't building, and you have all this area on people's yards, and they're like, this is the only way to sort of make a dent or an impact on the affordable housing crisis. So you have all these properties with ADUs. And I think that was a long-winded uh way, a roundabout way, but I think it depends on which market you're looking at.

SPEAKER_02 30:30

Yeah, that's true. Market market is very market-specific on on some of these strategies and the things that you see in the landscape. So that yeah, for sure.

SPEAKER_01 30:37

Yeah. Is there a strategy that's working really well for you right now that a lot of people aren't talking about?

SPEAKER_00 30:42

The way that we buy right now is um now we can teach people to buy to buy all over the country, like in in trying to get started. But the way that we personally are buying right now is five. I mentioned this a little bit, the five to 20 unit. In since 2023, we've bought five properties. We have a 17 unit under contract, if all goes well in the next day or so. And what we've learned is that the five to 30 unit is like above the retail house hacker or somebody that's obviously buying a dream home, right? But you're kind of below the institutional dollars. So there's not that many institutional uh large institutions that are looking at 10 units, right? So you have this like little middle ground that I think has been forgotten, and that strategy has worked well for us to be around an education institution or a healthcare institution and kind of feed into what's called a micropolitan. And that is a micropolitan is like a city, it's like a small city of like 50 to 100,000 people, where I'm not looking in like Philadelphia or Chicago or LA. I'm looking at these smaller cities where there's a total infrastructure and need for housing, but you're not necessarily competing with like huge institutional capital. So that to us has opened doors to have deals sent to us by our relationships because they know that we're gonna continue to buy. And if we get above that 30 to 40 unit mark, there's just a lot more competition. And that's what we found. So it's it's um, I think there's there's a lot of investors that are doing this, but we've just carved out this niche and it's not even in my backyard. So it's enjoyable for me to to go up to to visit these properties and and uh and continue to grow that way.

SPEAKER_02 32:17

Now, are you buying these yourselves? Are you buying these with investor money, or how are you acquiring these properties? How are you funding them?

SPEAKER_00 32:22

Yeah, so good question. So me and my partner, Ryan, are co-GPs on uh with one other partner, his name is Sean. And so the three of us are going and we're doing all of the work that GPs do, which is underwriting the deal, putting the lending together, marketing the deal, investor relations, uh managing the property, you know, doing all of the legwork and the groundwork. And then we're raising investor capital from limited partners. So, you know, we might have friends, family, we do 506Bs, which is people that are in our circle and our network and people that we've been connected with that have grown to like and trust our brand and and and follow us for a while, some some on social, some just in our like personal spheres. So we raise investor capital from LPs. We aim to double their money in five to seven years and exit. And that's the way that we've been able to grow. Hence, meet saying, I'm like, I was just running out of my own money. I'm like, how do I get a piece of these deals without, you know, consistently running out of my own money? And that's been the way that we've been able to do it. Yeah, that makes sense.

SPEAKER_02 33:22

Um okay, I got a good question for you. Um, this is kind of a controversial question, and we've talked about this before, but is real estate actually passive?

SPEAKER_00 33:30

The only people that it's passive for are the people that I were just talking about, limited partners. That's who it's actually passive for. And it's as passive as investing in the stock market for them, because the only risk that an a limited partner has is their invested capital. As general partners, our names on the loan, you know, we're we're signing and we have non-recourse debt. So it's like we it's up to us, right? And we have the opportunity to lose further than the limited partners, but our our priority is to them. So that is where it can be passive. Now, if even if you're a long-distance real estate investor and you're investing in, let's say you live where you you guys do, and you invest in South Carolina or you invest in Georgia, um, it is significantly more passive than working your full-time job, but it is not 100% passive, and you know, and you know this, even if you have a property manager, because managing the manager becomes a little bit of a job. So I would never tell you that it's 100% passive, but I can tell you for a fact that it is, let's call it 75% as or more passive than working your job. So it's um if there's a sliding scale of passiveness, then yeah, somewhat.

SPEAKER_02 34:36

Yeah. That's that's fair. I would even almost argue that Liban partners aren't are are passive until things go wrong. I've got uh a syndication that that I was in from like five years ago that just went bad and a couple of them actually. And so now I'm having to get involved and make decisions on, you know, to sell and take the losses and there's lawsuits going around. And so it you get a little more involved when things that is true.

SPEAKER_00 34:57

That is true. It it uh you know, if something does go wrong, then it it becomes a little bit yeah, it becomes a little bit less passive. Um, do you guys do anything in the short-term market? So personally, um we started uh a few years ago, like in 2021, in we bought a couple properties in the Pocono Mountains in PA. And uh we owned like a bungalow up there, and we still co-own about 40 units in the Pocono Mountains as as GPs. Um, we're actually looking to potentially exit from there right now in the next year or so. Um, but then I have a personal property that I have in Tampa, Florida that I use as a short-term rental, just as like a kind of a lifestyle play that makes me a little money, but it's more so for me and my family to go visit because uh it is 70 degrees in Philadelphia right now, but last week it was 32. So in the winter, I like to try to escape uh, you know, the the northeast. So I the short-term rentals is a whole different ballgame. You know, it's like it's it by the way, I don't think Airbnb is dead. I think it still works, but it's like, as you know, being connected with people here in the boutique hotel space, you have to create that five-star experience and the furnishing and the front desk of a hotel with the Airbnb. So we got into it as like, hey, let's try this, let's see how it goes. And we've dwindled our portfolio a little bit, but I still have a couple properties that are kind of like staples that I really I'm using the fundamentals of long distance and long-term investing because they're in great areas and they're appreciating, but totally different business model.

SPEAKER_02 36:25

Yeah, no, it's definitely gotten a lot, I think it's gotten a lot harder in the last few years and just you know, oversaturation here in California. Most of the cities have outlawed short-term rentals. And that's kind of how what got us into midterm originally, because we were with the ADE, we were looking at doing short-term, but it wasn't an option. So we had to go midterm, and that kind of got us in the door there. And then we just started running with that because it was just it was something that was allowed, and and we just found a little carved out a niche for that. But yeah, it's definitely the landscape is definitely changing.

SPEAKER_00 36:50

Yeah. And also it depends on what city that you're in. But I I think that you know, people, there's kind of like fear-mongering that's gonna be like widespread, widespread banning across the US, and I think that's BS. But I do think that what's happened in Dallas or what's happened in California is like cities may not want their neighborhoods filled with Airbnbs. And I think that's reasonable to think, but I do still think it works, and I think there's people always traveling. And like for me, if I'm going with me and my fiance, just the two of us, I'm probably gonna stay in a hotel. But if I'm going with four to six people, like I don't think you can beat an Airbnb, even as a consumer these days. So I think it just has to be with a super host, with a guest favorite, and something that you have to get to that status if you are gonna be an Airbnb. You can't just throw up pictures on your iPhone like you used to be able to do in five or six years ago.

SPEAKER_01 37:36

Yeah, that's really good. I like that. Tell us about a deal that almost broke you.

SPEAKER_00 37:42

Oh man, this is this is uh good stuff here. So um my third property that I bought uh was in New Jersey and it was a duplex and it was a $175,000 purchase. And keep in mind this is 2020, so we got it at like 3% interest rate as an investment loan, which is awesome. It rented for $3,000 a month, $1,500 aside. So our mortgage payment was a thousand bucks, it rented for $3,000. I'm like, we hit a home run, this is amazing, this is awesome. Um, and this is before I had management systems in place, and I get a call one night, uh, I it was at 11 p.m. And I have a property manager, so if they're calling us, something's wrong, right? And I didn't answer because I was sleeping. I woke up to a voicemail that the property was on fire. Um, and everyone got out, everyone was safe, but we had a total loss uh from this property. And uh, so I went down there with me and Ryan went down there, and we just like kind of had a moment where like, did we make a large mistake getting into real estate? Like, I can't, I what's the worst possible thing that can happen if you get into real estate? And it did happen. But then I go back to the roots of like, why did we get in this game? Do we have good insurance? The answer was yes. Do we have good a good team around us? The answer was yes. Did we have someone to go to to walk us through that scenario? And we ended up doing okay and actually having a capital gain to pay because we the insurance paid out and we sold the property. We didn't feel like like we could have the the um the skill set to like rehab a fire damaged property. So we sold it, we got insurance money. It was actually the neighbor's house that caught on fire, so it wasn't even our property. There was no liability. And um that when I say it almost broke us in the middle of it, of like figuring out what to do and who to call and dealing with insurance and like you know how long these pro this process takes. It's it was months and months of just going back and forth and and um we ended up being okay and coming out on top. And we didn't stop buying real estate, but I could see why that would crush somebody and be like, I I I'm done. Like, I'm I'm totally done. So that one was I I shouldn't say it was close to breaking us because I never intended on stopping at all, but it was one of those wow moments, like this is what can happen in this game. This is you're dealing with people and somebody put a space heater in a garage and just you don't have any control over that. It wasn't even our property. So yeah, I mean, it's not for the faint of heart, I will say that, but we made it through.

SPEAKER_02 39:58

We had a similar experience in the South Carolina property. It was dead of winter, it was like December, and they got, I think they got evicted and they didn't pay their water bill. And so when they got evicted, they didn't go pay their water bill, meaning if it didn't get paid, the city didn't turn it off because they didn't close out the account. So the water was left on, and there was a cold front that came through. Nobody knew, property management didn't check it like they should have. I didn't know, nobody knew. I was getting ready to sell the house because it was like at that like seven years, seven, it was like six, seven years. And my my partner that was the realtor on it goes over there, and I'm at a football game, I'm at a 49-year playoff game, and she's calling me and calling me and calling me. I'm like, this doesn't look good. I'm like, I answer the phone, I'm like, I can't really hear talk right now, but what's up? And she's like, Your house is flooding. So what happened was they left the water on and it froze, pipe burst, and for weeks it was just pumping water into this house, into the kitchen, flowing out the the front door, and nobody said anything. The neighbors, I think the neighbors knew, but they just didn't say anything for whatever reason. And so it ended up being uh, you know, a loss. I ended up selling it as like got it all demoed and did all the water mitigation, sold it as is because it made more sense to take the insurance payout and then sell it as is versus putting the money into it and then putting it on the market. And so I actually end up getting probably a close to what I would have gotten if I had fixed it up and sold it on the MLS originally. So very similar to us.

SPEAKER_00 41:19

Yeah, very like we we sold it as is too. And this guy, I didn't know there was a market for fire down. Like I did before I knew any of that. And the guy, the guy who bought it as a developer, he's like, Oh, this is easy. I do this all the time. I'm like, great, get this off our hand. But it's very similar to that in the sense, I think the the hard part about the real estate it game is that you're at the 49ers game and you're enjoying yourself, and the agita that comes from that call, you like, oh man, I don't want to deal with this. And I think, but if you buy enough properties and you buy them right, the rewards on these I mean, 10, 20, 30, 100x the you know, the the downfalls of what could happen. And that's why you have good insurance. So I'll never skimp out on insurance ever. And I we haven't, but I'm just so glad that we had the right policy and you know, landlord coverage, umbrella policy, all that. And I always teach people in our community like this is real life, stuff can happen, but if you're protected, you're pretty insulated from it, and you know, you can be okay. And I had a similar situation, like my property in Tampa, I had no damage, but they had two hurricanes in 2024, and it's like you're like, okay, like this is a kind of the price you pay to live in paradise a little bit, and it just, you know, it's it's it's a little bit nerve-wracking. But I can tell you, I would have not anywhere near the optionality or the lifestyle or the fun or the money that I would if I had not taken this and just plowed through when problems came up. And I'm sure your story is similar. Like, what do you do? You're not gonna quit just because you have a problem with the property, and you ended up doing okay on that one, it sounds like. So even when the worst happens, you just think, well, what's my actual worst case scenario? And they both happen to us, but we made it. So it's uh it's just not for the faint of heart.

SPEAKER_02 42:58

And if you can control your emotions and regulate that, I think you can always Yeah, we always talk about not fretting over things or not stressing over things that you can't control.

SPEAKER_00 43:05

So, you know, yeah, there's nothing that you could have done in that scenario that would have prevented those pipes from leaking. I mean, maybe, maybe if you really dive down all the way deep into like go having your property manager go there, but it's it's out of your control. So why why stress?

SPEAKER_02 43:19

Um, okay, so what mistake have you made that cost you the most money? Was it this deal or something else?

SPEAKER_00 43:25

Well, I mean, I think in the long run, that deal didn't cost us money. Um, but uh the the second deal that I bought after my house hack was a duplex and I inherited tenants and I did everything wrong. I didn't know that you needed to fix properties up. Like I bought it and I inherited them and I bought it for $125,000. It rented for $2,000, like eight uh $800 for the one-bed and $1,200 for the two bed. And I was cash flowing a little bit, but I didn't realize that there were all these problems with the property. So like I I literally got a text on a flip phone before I had any systems or any processes, like it's flooding inside my house and it was raining like through the windows. And I'm like, oh my God, I made the biggest mistake. I can't believe it. Turns out I went there, I had a conversation with the mentor, and it was twelve hundred dollars and we we fixed it, right? So I think that you know, some of those things are are are scary in the beginning if you don't have somebody to go to to help you, but I Know what was that your question about the mistakes? Yeah, I was asking what what which one costs you the most money? Yeah, that I mean, um that cost us money. Uh a couple times contractors before we put in systems of like just running out on us, like when we pay them a deposit up front, a cut, you know, but nothing has been like catastrophic in this game. I think people think they're gonna get into the real estate game and they're gonna lose fifty thousand dollars. And like if you're flipping, maybe for sure, you could do that. But if you if you have somebody that you can go to and bounce ideas off of and get a blueprint and a roadmap, it's kind of it's it's hard to lose that type of money if you have somebody that's looking over your shoulder that had done it before. But we I mean, the day before or the month before the I had the uh the fire, I spent $8,000 on new floors for that property, and then that went to nowhere. So I mean that that those are mistakes. I guess we just kind of can't control them. So you just you let it roll.

SPEAKER_02 45:10

It's not really a mistake though, because you didn't you didn't know, so you can't really call that a mistake. And it's just it's just things that happen.

SPEAKER_00 45:15

Yeah. Yeah. Exactly. Fortunate enough that I didn't make any like large mistakes. I think if people do that in the beginning, or you lose some money in the beginning and you're like, oh, I'm never gonna do another deal, I'll just do one deal. And I think that's what prevents people from trying being able to scale, really.

SPEAKER_01 45:30

That actually went right into my next question, which was gonna be what mistake do you see new investors making?

SPEAKER_00 45:36

Not not taking action and not not actually pulling the trigger. And I I've talked to people that have been thinking about real estate for five years. Imagine the brain capacity and the power that it takes for you to think about something for five years. And it's actually harder to think about it for five years than to actually do it. Because you, it's if it's on your mind and you really want to do something, like get around people who were doing it. That is the biggest thing. The reason why we were able to grow with our social media and with our brand and our real estate portfolio is because when my goal was one a year for 10 years, I got into rooms with people who were like, I'm buying one a month. Why are you thinking so small? And I was like, Well, I didn't think I could buy anymore. Well, this is how you do it, right? So I think not getting your first or not getting your second deal is the biggest mistake that people make and they wait, I'm gonna wait till this happens, I'll wait till I'm married, I'll wait till I have kids, I'll wait till I have more money. It's like all of those things are just blocking you from the ultimate goal, which is starting and building, and then you able to realize the power of this game. So I think the biggest mistake is just sitting in analysis paralysis, really.

SPEAKER_01 46:41

We say that all the time, especially kind of in this phase of life. We see a lot of people, once they have kids, they feel like they can't do anything until their kids are like grown, right? And they've wasted all this time when, yeah, it's not easy to do it, but we're living proof that you can't do it.

SPEAKER_00 46:55

I was just gonna say living proof. Would you say four under six? Four, six and under, yep. Four, yeah, four, six and under. Like that is if anybody can build a real estate portfolio and do the and run a podcast and do the the co-living model and and and become broke millionaires, like I'm sure you're you're as busy as they come. So you you are living proof. I think it's great.

SPEAKER_02 47:15

Yeah, I don't know. That's a gr the best strategy. I mean, we take it to the next level because we do these renovations, we do a lot of in it live-in renovations. So we'll buy a house, strip it down, try to get as much done in the first 30 days before we move in, and then we're living through it the rest of the next year and a half until we get the next one.

SPEAKER_00 47:30

But that's now your kids are watching you like do renovations and do all that. I'm sure they're learning so much about what it takes, you know. Even if they're young, I'm sure they they they start to understand that. Those kids love it.

SPEAKER_02 47:40

They're like, when are we gonna tear another house down? When are the cranes gonna come?

SPEAKER_01 47:42

When would they they just they can't wait to do the ready, they've got their tools, they're working on the weekends with Josh when he's doing things. And yeah, they're antsy for another project for sure.

SPEAKER_02 47:51

For sure. Very cool. All right. Hey, Corey, really appreciate you coming on today. So uh if people want to get a hold of you, what's the best way for them to reach out?

SPEAKER_00 47:58

The best way to find us is Instagram, actually, at wealth juice official. That's me and Ryan. We post every day on social media. We have for six years. We have a podcast called the Wealth Juice Podcast. We do two podcast episodes a week, and we're basically helping you learn how to live life on your own terms. And that's what Ryan and I were fortunate enough to be able to create. And if you want to learn how to buy real estate, how to get started, how to buy your first or second deal in three to six months, you can reach out to us and we have our inner circle and we teach people how to do this. And it's me and Ryan in the trenches with you. You know, this is not like some sort of like Facebook group. It's like it's true hands-on mentorship, and we've had success story after success story. So the best way to get in touch with us is probably Instagram. And then if you like the long-form content, YouTube, look up the Wealth Juice and our podcast as well.

SPEAKER_02 48:44

Perfect. We'll get that in the show notes as well. Anything else? Oh. Okay. I really appreciate you having on today. Like the that was really good. I think that was a a lot of good info for people. So this this will be a good show.

SPEAKER_00 48:54

Yeah. Yeah. Thank you for having us. I really, really appreciate your time. This was fun.

SPEAKER_02 48:57

Cool. All right, guys, we'll get out there and make it happen.

SPEAKER_01 49:01

Thanks for listening. This has been a production of Rebuilding the Dream Studios.