"Coping with Failure, Investing Tips, and Risks Worth Taking"
Real Estate Investing Expert
Episode 37: "Bad Beats"
Listen to the Podcast Here:
We talk a lot on The Real Estate Nerds Podcast about best deals and worst deals, but the reality is often more complex. Today’s guest, Trevor Robinson, has seen many ups, downs, and everything in between. He left college to strike out as an entrepreneuer, and through calculated risks, clever strategy, and a willingness to learn from mentors and self-directed study, has established an impressive portfolio before even reaching age 35. Tune in now to hear Trevor tell our host and real estate attorney Scott Smith about his investing career, some of his most notable deals, and the finer points of the investing strategy that has given him true financial independence.
Trevor Robinson’s Unconventional Path To Entrepreneurship
Trevor sits down with Scott to discuss his background and some of the highs and lows of his investing career.
[1:00] Trevor Robinson is a 32-year-old Missouri-based investor who took an unusual road to real estate. He had a realization during business school that drove him to drop out and pursue investing. His first endeavor, a tattoo shop, failed, but Trevor persisted with an electronics repair shop. He took those profits and went all in on real estate: “I knew real estate wasn’t a get-rich-quick scheme but it was a get rich scheme.”
[2:45] Scott explores the fact that Trevor rejected traditional ideas of working life. Trevor discusses how he assessed the risk of leaving school–and offers a critique of student loans.
[5:00] The two investors discuss the necessity of failure. Scott admires the entrepreneurial spirit: “When I see people who failed while shooting for the stars but landed on the moon, I think that’s pretty damn good.”
On Failure and Required Real Estate Reading
Scott asks Trevor for some of the details about deals of his that haven’t gone as planned, as well as his analysis of what he could have done better. Both investors agree that we can all experience profound growth from unsuccessful deals, given a healthy attitude towards failure and willingness to assess our mistakes honestly. Trevor also shares some of the books that have informed his investing strategy.
[6:45] Scott asks about the bad deals Trevor has experienced. Trevor discusses some of the “steals” he found over the years before diving into one of his earliest failures. He believes his first bad deal was a remodel in a low income area that needed $50,000 worth of repairs.
[8:05] Trevor points out some of the challenges of investing in low income areas, highlighting tenant issues that he struggled with. He finds that low income items like trailer parks do not appreciate as well as other asset classes.
[9:17] Trevor reflects on how he got himself into the early lackluster deal. The seasoned investor attributes his failures to youth and eagerness: “All I could see was the upside. I was literally manipulating myself into buying it because I didn’t want to lose the deal.”
[10:00] Scott and Trevor discuss the personality type that is necessary for managing low-income property. Trevor learned that he is not personally inclined to manage these types of properties, and now leverages his time and effort in other areas.
[12:00] Ultimately, Trevor grosses $1900 per month on this particular deal. He decided to hold the property, but found “Everything that could go wrong with it went wrong with it.” He goes on to advise new investors to learn from his mistakes and stay from these types of properties. He also shares some of the positive insights he gained from this early stage of his career, specifically, how to get the lending faucet “turned on.”
[13:40] Trevor elaborates on his strategy for getting financing: “I went after duplexes in C+ working class areas, mixed in with some single-families, and I’d primarily target under-rented ones…fix them up and raise the rents to have a tremendously high cash flow.” He goes on to explain his method for using equity to make additional investments. Trevor’s approach has worked well for him. He has diversified his portfolio to include commercial and multi-family properties, and is generally successful with lenders. He shares the attitude that has helped him in this area: “Your bank is pretty much your partner on the deal.”
[16:00] Trevor explains that reading about other investor’s losses has saved him millions. He also reveals his personal strategy: “I learned from doing it and talking to other investors.” He also credits some of his success to paying attention to real estate failures. Scott agrees that this is the spirit of The Real Estate Nerds Podcast: learning from others’ mistakes.
[17:00] Scott presses Trevor for more details about his investing education. Trevor is a voracious reader and has some recommendations for new investors. In his own experience, he has found that: “You don’t want to read “Get Rich Quick” books. You want to read those humble books about someone who lost it all.” On the subject of his favorite investing books, Trevor believes Manny Khoshbin’s Contrarian Playbook is one of the best things a new investor can read. He points out that the book is written in very plain English, making the ideas extremely accessible.
[19:35] Confessions of a Real Estate Entrepreneur has also been a highly influential book for Trevor. He believes books are as important as online tools, such as Reddit. He and Scott agree that anyone can improve themselves by simply investing in their own education and developing a habit of reading.
How Trevor Robinson Gets His Best Deals
Scott and Trevor focus on some of Trevor’s more clear-cut wins. Trevor also shares about some of his most essential team members, tools, and tactics for how he finds the deals he wants.
[21:00] Trevor dives into the details of his best deal. He shares a story about a simple flip in his college town. He had observed the college growing, and bought property that “boxed them in.” This is part of Trevor’s greater strategy: “Where you can see growth coming, buy around it.”
[22:40] An apartment complex ended up being one of Trevor’s better investments, though it took two years.
[23:59] “A lot of my deals won’t be profitable for years,” Trevor explains. He also shares how investors can leverage loans. He believes his portfolio diversifies over time.
[26:00] Scott asks Trevor how he approaches new deals. His appraiser has become a useful ally. Trevor’s “dream team” is composed of his banker, appraiser, and insurance agent. These professionals offer useful information about his investments.
[28:59] Scott and Trevor break down the costs and other elements to learn about new markets. He also shares his thoughts on which deals are worth pursuing and ways to lower expenses.
The Takeaway: Take Risks If You Want Freedom
Scott and Trevor wrap up this episode with the major lessons investors can learn from Trevor’s investing experience and career. Both have takeaways and practical advice that any investor can use.
[32:00] For Scott, he believes Trevor’s hybrid approach to the way he thinks about investing and use of both traditional and modern resources have served him immensely. Both investors have high praise Reddit as an educational resource and means of connecting real estate investors.
[33:45] Trevor has simple advice for investors at any stage in their career: “Don’t be afraid to take risks.” If you have a side hustle, get on the grind.
[35:00] Both investors feel real estate is a pursuit of freedom. Trevor finds deep fulfilment in helping others, and advises that investors “Take care of the people under you, and listen to the ones above you.”
Connect with Trevor Robinson
Connect with Trevor directly via email at firstname.lastname@example.org. He actively helps investors with no strings attached. Trevor is one of those rare individuals that isn’t selling anything, but has a firm conviction that to keep his success, he must give back and give away the information that has helped him. He is also active on Reddit and frequents the r/realestateinvesting subreddit in particular.
Thank you for joining us on today’s episode of the Real Estate Nerds Podcast.
For even more free educational resources on real estate investing and the law, check out the Royal Legal Solutions blog. You can also reach our host Scott Smith directly, connect with him on LinkedIn, subscribe to the Royal Legal Solutions YouTube channel, or join our investor community on Facebook.
Don’t forget to subscribe to stay up to date and have the most current episodes of the Real Estate Nerds Podcast directly in your listening library. Every subscription helps us create new, custom content for you. What did you think of today’s episode? What would you like to hear more about in the future? Leave your thoughts and questions in the comments section below, or leave us a review in the iTunes store. We love hearing your feedback, so fire away. Join us again next time for another fascinating conversation and compelling story with experienced investor Trevor Robinson. Thanks for listening and joining us on our journey to become better investors!
Hosted by Scott Smith, Lead Attorney and Founder of Royal Legal Solutions. Schedule your personal consultation now. If you have questions about our content or suggestions for future episodes or guests, reach our podcast team at email@example.com.
About Trevor Robinson
Trevor Robinson is a Midwestern investor who has seen such success that he is semi-retired at only 32 years old. Trevor currently lives in Colombia, Missouri, where his investing career began. He took an unusual route into real estate–dropping out of college to pursue entrepreneurship when he rejected the idea of attending school to acquire debt and participate in corporate America. He threw himself into a broad variety of projects and habitually leverages each new asset into capital for more investments. His strategy has paid off. Trevor now owns many apartment complexes, a brokerage firm, and small businesses including the electronics repair shop that was one of his first successes.
Ordinarily, this is the space where many investors who appear on the show would include their books or services. Trevor is a little bit different. In fact, he is our first guest that does not have any promotional materials. What we know from experience He mentors many investors, but doesn’t charge a single cent. He gets a genuine thrill out of helping others realize their potential and find freedom in real estate. He is humble, so we will go ahead and say for him that his generosity and pure intentions of supporting others are unique and remarkable traits. Contact Trevor by email at firstname.lastname@example.org if you would like to connect with one of the best tactical minds in the real estate world.
When making business decisions that affect your long-term goals, like what types of investments to make with your retirement dollars and which vehicles to use, it really is best to be aware of all of your options. We frequently talk about the Solo 401(k) and Self-Directed IRA as tools for funding your retirement. But what about life insurance? And what about the stock market? What if we told you there is a tool that allows to to reap some benefits of both? It’s called Indexed Universal Life Insurance–and some investors have found it a useful addition to their retirement plans.
What Is Indexed Universal Life Insurance?
Indexed Universal Life Insurance (IUL) plans are a variety of permanent life insurance plan that features a cash-building element. One primary benefit of these plans is that the policy holder gets some of the gains of being associated with the stock market without all of the risk Wall Street is famous for. This is in no small part because of how these policies are designed. IULs earn in part because they are directly linked to a market index, such as the Dow or the S&P 500. Any gains remain within the policy, albeit a cap rate will limit how much you can make. However, you are protected during a particularly bad year for your index with an IUL. The worst case scenario with these plans is that you make nothing, but you never actually lose money no matter how poorly your index performs. The protection of your principal is actually derived in part from the same cap rate that limits your gains.
How much money do policyholders stand to make? Historically, returns run between 5-9%. The S&P Index has actually returned at 9-11%, but the upside limit on UILs stems from the account’s cap rate. For this reason, many advisors argue that the UIL can make a wise addition to a retirement or estate plan once more traditional and self-directed accounts are maxed out.
Tax Benefits of Indexed Universal Life Insurance (IUL) Plans
There are three key tax benefits of IULs. First, you may pay into the policy with pre-tax or after-tax funds. Withdrawals from the policy may be made tax-free if you are under 59 1/2. Such withdrawals are regarded as loans, with your death benefit serving as collateral. Any funds paid out to the beneficiary are also tax-free, including normal benefits upon your passing. This is true regardless of their value.
Ask the Experts at Royal Legal Solutions About Your Retirement Planning Options
Regardless of where you are in the retirement planning process, Royal Legal Solutions an assist you. We have extensive experience educating investors about self-directed investment options. Many of our investor-clients love our Solo 401k information, product, and compliance services. Our Self-Directed IRA services can also be helpful for retirement planning, as the SDIRA is yet another vehicle that allows you to diversify and take total control of your investments. To determine which of the available retirement planning strategies are best for you, consult with one of our experts at Royal Legal Solutions. You may also contact us with any questions you may have about your options.