On today’s episode of The Real Estate Nerds Podcast, our host and real estate attorney Scott Smith welcomes Jacob Ayers. Jacob is only 28, but has already made his first successful real estate investment. If you’re new to the game, or waiting until everything is perfect to get started, or just uncertain where to begin, Jacob has tips for you. He believes there’s a step that anyone can take in the direction of becoming a real estate investor. His own story is a great example of not letting anything, whether it be lack of experience or capital, get in the way of pursuing real estate dreams. Tune in to hear Scott and Jacob’s full conversation.
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Jacob Ayers’ Life and Business Philosophy: Striking a Balance Between Security and Freedom
Jacob Ayers joins Scott to discuss his background, as well as how he balances his day job with his investing career to reap the rewards of both.
- [1:00] Jacob is only 28, but began investing at age 25. He shares about the expectations placed upon him by society and his family, which he ultimately found unfulfilling. He graduated from college, joined Corporate America, and knew he wanted something more. He developed an interest in personal finance and investing around age 23, and gave himself an education.
- [4:00] After educating himself with the many free resources available online and getting some money together from his day job, it was clear to Jacob what he had to do next: “I bought my first rental property, and here we are today.” Scott points out that it’s possible there are personality types that want the safety and security of a “normal” job, while others are driven to strike out as entrepreneurs and do something different. The two investors speculate whether this is a matter of personality, fundamental values, or something else.
- [5:30] Jacob believes “you’ve got to be a little bit crazy to go down this path.” He considers real estate investing his side hustle and works full-time as an engineer. In this way, he’s struck a balance between security and freedom. Scott acknowledges the wisdom in this: “There’s a middle ground, and you have to consider your worst case scenario. For you, that’s ‘I still go to work on Monday, build up more capital, and try again.’” [6:38]
- [7:20] Scott points out that Jacob has built up a community around his philosophy towards work and real estate balance, especially as a young person. Many people approach Jacob with their fears around real estate investing, and that drove him to start his podcast to share his knowledge and experience.
- [8:15] Jacob digs deeper into what drives him and his investing: “I think people have a duty to themselves to chase their passions, and real estate investing is a vehicle that allows you to do that.” Even if investing itself isn’t your passion, it can give you the opportunity to pursue the things that you do what truly moves and inspires you. Scott agrees: “Money can’t get you anything. It can only motivate you to pursue another passion.” [8:54]
[bctt tweet=”I think people have a duty to themselves to chase their passions, and real estate investing is a vehicle that allows you to do that.” username=”Royal_Legal_Law”]
Jacob Ayers’ Best Deal: A $25,000 House With a $140 Mortage
Jacob shares the details of his first real estate investment, an almost unbelievably cheap property in his hometown. Yet it has maintained steady cashflow, and perhaps more importantly, taught him many investing lessons.
- [9:30] Jacob’s best deal began when he was around 23 or 24, having just spent a year researching opportunities, listening to podcasts, going to meetups, and otherwise getting his free real estate education. He bought a rent-ready property in his hometown in Oklahoma for $25,000.
- [10:20] Jacob bought the house with traditional financing for $5,000 down and rented it out immediately. He knew the worst-case scenario was a loss he could afford, as his mortgage is only $140–comparable to Scott’s cell phone bill.
- [11:15] Jacob went into his first deal with the commitment to treat it as a learning experience: “I treated the whole thing as kind of an experiment…When I got that first rent check, it was my proof of concept moment.” He resolved to rinse, repeat, and expand.
- [12:00] Scott asks Jacob whether he’s ever had a bad deal. He tells a cautionary tale about his first tenants, whom he didn’t screen at all. They bailed from the house after six months and trashed the place. But Jacob says this taught him to screen tenants, rather than taking the first qualified people to offer. He has learned to treat these mistakes as lessons in becoming a better landlord.
- [13:45] Jacob discusses how he’s a details guy who wants to know all of the numbers and have his spreadsheets perfectly laid out, but ultimately he has to take the plunge sometimes. He acknowledges a truth about investing: “You don’t know what you don’t know” [14:30] But all the reading in the world couldn’t prepare him for the lessons that just doing deals and managing property has taught him.
- [15:55] Scott notes Jacob’s natural entrepreneurialism: “You probably learned more in a year of dealing with that property than you could have in a year of listening to podcasts and reading books.” Jacob agrees: “You can only learn so much by paper, and the rest is just by doing.” [16:00] He acknowledges that cheap properties like his aren’t everywhere, and encourages investors to investigate affordable properties
- [17:00] Jacob talks about how he talks investors through examining markets. This is something he does often with friends who live in expensive, hot markets like Austin and Houston, TX.
- [18:00] Scott drops his own bit of advice, explaining why he’s a big believer Jacob agrees: “Partnering as early on as possible is a really good idea. At least having a coach or a mentor to informally look over your shoulder and be a sounding board, voice of reason, and somebody who’s done what you’re doing.” The two investors share their methods for getting expertise. Scott likes to throw small amounts of money at consultants for their expertise. He puts his money where his mouth is, and encourages investors to use and abuse his own law firm, Royal Legal Solutions, in this way.
The Takeaway: Take Action Today to Succeed Tomorrow
The two investors wrap up their discussion by sharing their takeaways. Both Scott and Jacob agree that if you want to succeed in investing, you have to just get out there and try.
- [20:00] Jacob’s advice to new investors is to just get in the game: “To get started, you have to take that first step. It can be big, or little. It can be picking up a book or going to a MeetUp. It can be anything, just take the first step.” He encourages investors to get out there, take action, make mistakes, and keep going.
- [21:00] Scott agrees, and points out that Jacob’s spirit of not letting fear win the day has contributed to his success. Not allowing “no” to be an option and finding a way to get in the game is essential. Scott offers words of encouragement to those hesitating to get started: “If you keep trying, you never lose. Otherwise, it’s just learning. You only lose when you quit.” [22:00]
[bctt tweet=”If you keep trying, you never lose. Otherwise, it’s just learning. You only lose when you quit.” username=”RoyalLegalLaw”]
Connect With Jacob Ayers
Connect with Jacob through his website, www.JacobAyers.com. His web site includes many resources, including his podcast The Real Estate Way to Wealth and Freedom. You can also reach him by email at email@example.com, and he’s happy to talk with you.
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.
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