Episode 9: Hurdles to Buying Real Estate Investment Property – Part 1

Kyle Pearce: Welcome to the Canadian Wealth Secrets Podcast with Kyle Pearce, Matt Biggley and Jon Orr.

Matt Biggley: Get ready to be taught as we share our successes and failures encountered during our real life lessons, learning how to build generational wealth from the ground up.

Jon Orr: Welcome invested students to another episode of The Canadian Wealth Secrets Podcast.

Kyle Pearce: All right, my friends, we are excited to dig into yet another episode. As we've mentioned each and every week we look forward to this opportunity to chat all things investing. And in today's episode, we actually want to start tackling some of the hurdles that we might be experiencing, not just investing in general, but in particular with real estate investing. Something that we've been getting a lot of feedback from you, the invested students are, how do we actually get started? People are intrigued out there. We've had a few people reaching out with specific questions about what to do next, and we really just want to unpack some of the common hurdles that you might experience when you are considering investing in real estate. Because let's be honest, the ones that are on your mind right now are probably not all of the hurdles that you may encounter.
So why not just dig into them here today? Matt, get us started here. Let's start with, and again, there's no order here, but probably something some educators or invested students out there, if you're not an educator listening in, might experience when they are starting to try to dip their toes into the investment in real estate game.

Matt Biggley: Thanks, Kyle. Yeah, I think about us as learners, teachers especially, but I think anyone in a professional capacity who has been to and enjoyed school and maybe gone on to post-secondary, like we're such learners, so many of us, that also means that we can get into a real analysis paralysis with this. It's like we want to learn, read about, listen to podcast and audiobooks before we ever really do it. So a lot of people you'll find in this space are just now stuck on the learning part. And I was certainly this way as well. What's great about the real estate investing community, there is so much shared knowledge out there. I remember listening to every episode of multiple real estate investing podcasts, went to some training, bought some books, but just like with our students, we know that the best way is to learn by doing and to learn with some support.
And so to have a partner or a JV can just really help flatten a learning curve, remove some of the scary fears that people might have that oftentimes are easily solvable or even irrational and move forward in their real estate investing journey. So to me, I always think that the hardest part is finding the right properties. I think that's the biggest hurdle in real estate investing. Now, that's my perspective as a veteran experienced real estate investor, but finding the right properties is fundamental to all of this. If you choose the wrong one, you're going to smack into that proverbial brick wall really fast. You're going to maybe get yourself into too big of a project. You're going to select perhaps a property that isn't in an area of that's highly rentable or isn't attractive to a great tenant profile. So I think the biggest hurdle is selecting the right property.
And thankfully we have a really good process that we've created and learned to find the right properties, and it actually doesn't even require you to go and visit the properties. You can actually do a lot of this right from your computer, right from your desk. It's one of the neat things about investment properties maybe as opposed to your own personal residence where there's so much emotion and there's so many more maybe fundamentals and intangibles that you're looking for there. You can really scout a lot of properties. The volume of scouting you can do before ever sitting foot in a property is pretty fantastic.

Jon Orr: And I think selecting a property is a big barrier, and I agree with you in some extent, Matt there, that it is the biggest, but I think the one that you said initially is one of the bigger ones. And I think that's what held me back for a number of years before I took that plunge. And it was because if we're a beginning investor, we've never done this before, that fear of picking the wrong property, even if you've done all of the tips that we're going to give you today on choosing the property, I think there's still that fear. How do I know I'm doing this the right way? And I think that's the scary part for a lot of people to dip their toes in the water is because we don't know. If I've never done this before, how do I know I'm going to do it right?
And the best way, what you said, Matt, is to partner. How do I find that partner? Finding someone to do this with, especially if they've done it before, will actually take all of that fear away because that's what I did. I partnered with the two of you to buy a property, but I had done all the reading, I had done all the analyzing in prior years, but I never had the guts to go alone. I had to have, and for my own peace of mind, for my own safety, for my family's safety, it had to be with someone who knew what to do when. So it's like you count on them to handle things and then through that learning process that helps get your feet wet so that you have more confidence to go, "You know what, the next one, maybe I don't need to have the partners. Maybe I can try this smaller one on my own. Or maybe I have a next one on my own."
Matt, when we say partnering, what does a JV mean? I think we've thrown that term out here on the podcast a number of times, but we became joint venture partners. What would you say to define that here for everybody moving forward? We are going to talk about lots of other hurdles, but this one being the first one.

Matt Biggley: When looking for a partner in real estate. And I should say from the outset that I started my real estate investing journey with partners and I'm a huge proponent, a huge believer in partners. They say you'd rather have 50% of something than a hundred percent of nothing. So to me, when looking for partners as I started this journey, of course I was looking for people who had different attributes than me, people who brought different things to the table.

Jon Orr: That's a good idea.

Matt Biggley: So finding Kyle as my partner, he's a real numbers guy, incredibly analytical, can just comprehend and run numbers like no one I've ever met. He's like a human computer and also a real passion for real estate. We had another partner at the time who had a construction background, and that was actually one that when we started, that was my biggest hurdle. I thought, "Oh God."

Kyle Pearce: That was definitely a confidence booster, right?

Matt Biggley: Yes.

Kyle Pearce: For us to go into some of those earlier deals.

Matt Biggley: 100% I'm better with a phone than a hammer. That is so true. Anybody who knows me knows that. So I'm not someone who's going to be able to fix a plumbing issue or even necessarily analyze at the time. I wouldn't have been able to analyze a property from that construction integrity standpoint. So that was important.

Jon Orr: So I don't know, this could go to either you, maybe Kyle, coming from that point of view. Let's say I'm a person who's looking to get into this and I'm looking for a partner. You mentioned having a number analyzer. You also mentioned having, you felt like that person who knew about construction, housing, could look at, almost be like the inspector walking through with you to go, "You know what? We're going to need to fix this. This is not a great property because this is going to happen." Would you guys say that you need that construction partner, that finance partner, that analyzer partner? Is that a necessary formula, do you think moving forward?

Kyle Pearce: Such a great question and I would say no. And the reason I say no is because everyone is so different prior to having that partnership form. And this was a formal partnership, meaning we had sort of long-term goals to together continue to scale up using our own money, but pooling our mental abilities and strengths and skills. But I would argue that 10 years prior, I was starting my journey by doing all of the work. And I'm a stubborn person. You guys know this. It's like when I commit to something, I go through with it. And at the time when I first got into this world, I did all the reading, I did all the research, I did all the searching of the properties, I was saving my own money. So not using other people's money, I did all of those things on my own, but it took me probably 10 times longer.
So it's like right, can it be done? Absolutely, it can be done without partners. But now knowing what I know, I feel like I would be way ahead of the game had I not thought of doing something with others. And to be honest, early on what I should have done was I probably should have came in simply with the money, continue to do my learning. So I'm not suggesting people don't continue to do the learning, but going in with someone who has experience or a group that have experience and continuing to learn alongside them so that when I'm doing that reading, when I'm reading this book, when I'm analyzing properties independently on my own, I could reach out to those co-venturers, if it's a joint venture or I could reach out to that partner if it's a formal partnership. I could go and I could learn and I could essentially be mentored by them and expedite the process.
So Matt, you just nailed it. It's like typically if you go into say a joint venture agreement with a party, what you typically are doing, usually there's a money side, the person who brings the money and the mortgage, and then the other side is all the rest. So finding the property, vetting the property, ensuring the roof's not going to cave in tomorrow, all of those things are happening. And typically you split the profits 50/50 after the money partner is paid out. So that's the key there. It's not like you're going to give half of your down payment to the other party, you're just bringing it. It's going to help make this deal go forward. And then at some point down the road, oftentimes it's five years, but really it can be over any length of time, you're either going to plan to refinance it, to pull equity out and then pay the money partner back, or you are going to maybe even sell and then pay the money partner back and then split the profit.
So that's a typical joint venture that you may have heard of. And ultimately what I want do is I want to make sure that I am not, I don't want to say wasting time because the learning process is so worth it, but I want to make sure that we actually move forward at a faster pace so that I can slow down the time of learning. So when I bought that first property in 2011, I had started reading about real estate and learning and investing in general, probably back in, I mean really all the way through I was learning about investing, but specifically about real estate. It was probably a good five years of learning about it. And then within the two years prior to buying, It was an every night thing, literally vetting properties, but I had no one to talk to. I had no one to ask questions to, and it was all me. And it was over time, I almost had to force myself past that finish line to go, "I'm buying this property."

Jon Orr: And what was it Kyle that pushed you over that finish line?

Kyle Pearce: Honestly, I think it was almost like a sunk cost thing. We've read some books about sunk cost fallacy, this idea that as soon as you invest some time or effort or money you into something,

Jon Orr: That's the throwing bad money after bad money.

Kyle Pearce: Yeah, you've got to keep going. But I had invested so much time and energy and like I said, I'm a stubborn guy. So that's a thing about me. I set out to do this thing, so I'm going to do it. I flew out to Florida multiple times. I flew out to different parts of Florida. And when I found, and here's the interesting part, it was like it took me probably like I said, five years or so through this process to finally find what I'm going to call as an informal partner through my realtor, the realtor Brett Krumb down in Fort Myers in Florida. So anyone listening from Fort Myers, Florida, Bret's your guy. Brett, took care of me. And honestly, he had owned investment properties, so he got it essentially acted like that mentor for me. So it worked out great. And I know Matt, you do that for so many of your clients that are looking to get into real estate, do it in sort of an informal way.
But ultimately, had I been smarter, I would've found someone already doing the work and I would've said, "Listen, I've got this much money I want to get in, so that I can one, get into a good asset and property. Benefit from it. Maybe not benefit a hundred percent of the upside, right? We're going to split that upside 50/50. But the benefit is I'm going to do it so much faster and I know I feel confident so that maybe the next time around I choose to do it on my own or maybe I learn that actually this isn't for me to do all the work. I just want to be that silent money partner over here." So for us, we enjoy doing that work, but for many others, they're going, "You know what? It's great. I want to learn about investing in real estate, but I actually don't have the time, don't want to commit the time or I don't enjoy the work that's necessary in order to find good properties and do this work all by myself."

Matt Biggley: Yeah, and I think Kyle, what's interesting about what you just said is it really is a chance for you to dip your toe into real estate investing without having to dive right in. And as you experience it and as you learn it's really scaffolded so that maybe you start with a joint venture and you are the money partner, but you start to learn the operational side, the active part of owning and managing properties. And you say, "You know what? That's awesome, that's great." Or yeah, maybe you just continue to sit back and be a passive partner and build your portfolio that way. And I think it's important to differentiate between joint ventures versus just friends. A lot of people, and Kyle, we were friends in college before we started. Jon and Kyle, you guys were friends and Jon, we've become friends. So there's some community to be built from this. And there's some obviously friendship to be found in these common interests. Some people go play golf on Sunday mornings, we analyze properties and talk about real estate. Everybody's got there different-

Kyle Pearce: Not always on a Sunday morning.

Matt Biggley: Not always on Sunday morning, but it's the equivalent. But I want to really make clear to people that this is business. And so all of this is very transparent, it's all documented. We actually just went through a major JV purchase together and it was hours and hours of honing our joint venture agreement working with our legal team. So it's important to have a great power team behind you. By that I mean lawyers, accountants, eventually property managers, handyman, all those types of things that come with owning real estate. And so we worked through that process and we had some really great back and forth with our joint venture partner to ensure that all of his questions were answered and that he had peace of mind making a major investment with us, and albeit he's going to be on the passive side. So we're the ones who found that property, we're the ones who vetted the property, did the inspection, did the negotiating, and ultimately he came in after the fact, so we had done all that upfront work and overcome all those hurdles.
And this particular property was months and months and months. And so he was able to come in and have the opportunity to come into a deal that we had already vetted, negotiated, selected, and to ultimately become the money partner of that side. But it's all legally documented, it's all transparent. And just like any good business, you have to plan with the end in mind, we say in teaching or we have to plan with a divorce in mind. What are all the eventualities and how could those be addressed if someone at the end of that five year term wants to sell, wants to refinance, wants out, whatever it might be, all those things are addressed up front in any partnership I've been in where that has been the case, it has always allowed for a much smoother and more problem free partnership for sure.

Jon Orr: Sure. Awesome. I think, Matt, you just outlined another hurdle that I heard right there, and I think especially for newbies is thinking about time. Do I have the time to do this? I want to change the trajectory of my wealth in the future. I want to have passive income. I want to have this lifestyle that allows me to retire early. And we know that from all of our previous episodes, investing in real estate can be a pathway to get there. But the question is, I work a full-time job, I have a family. If I have younger kids, I'm hurdling them around at their sporting events or their club events, and when do I have the time to analyze or look at or learn about the investing and then go through what you said, you had mentioned that you had spent hours and hours working on this deal.
Kyle said he spent every night analyzing properties to learn. I heard time is a barrier for sure, and I think that is true in anything that we're going to kind of go through. But I think you've also answered that hurdle Matt, and Kyle has as well when talking about the joint venture opportunity, is that you can actually take that time off your plate and work with partners who are experienced that way and then they get to invest that time and use their expertise to shorten that up. And then you get to kind of benefit in that partnership. So even though time's a hurdle, I think we've kind of answered that. It doesn't have to be.

Kyle Pearce: And before you go on there, Jon, because I think you want to get us into this next piece. I just want to mention too, it's one of those things that you might have some time, but the thing is you don't get to just go like, "Hey, every couple of weeks I'll dedicate some time, right?" Because that's not how it works. When a good deal, when I say good deal, something that isn't just the average of what's out there, because you can go pick pretty much any property out there and buy it for a pretty decent price, and you'll probably be okay in the long run. But I'm guessing most people who are listening are like, "I don't want to just buy whatever's out there. I want there to be some advantage." Almost like that safety. You want to have that margin of safety there. When we're buying a property, we always know that Murphy's law will take over.
Something isn't going to go exactly as it seems. So having a margin of safety is really key. So I might have a couple hours a month to commit to this, but if I only do it once a month and I spend three hours, a deal may have come and gone, right? Or the deal that is coming tomorrow, you're not going to see because you're not going to be on the computer looking at it in the next month. So I think that's another piece that we have to also think about. It's not just time, but it's also a consistent amount of time, consistent habit of sort of just doing this thing that each and every day, or it might not be every single day, but within every couple of days.
I mean for us it's pretty much every day. We're watching what's happening and we're digging in and we're always analyzing something. There's always something on the plate for us to consider and we just have to figure out whether it's worth eating or not, whether it's worth actually gobbling up or whether it just passes by. And let's be honest, Matt, I don't know, throw a percentage on it. How many of the deals we analyze are just going right into the garbage, right? I mean it's got to be...

Matt Biggley: Like 95%, like an overwhelming, vast majority of them we never even set foot in, which makes it convenient from that standpoint. But-

Kyle Pearce: It also makes it easy to give up.

Matt Biggley: It does make sense.

Kyle Pearce: You might analyze a hundred deals and you're going, "Oh my god, is this ever going to pay off?" And it's like if you don't have that habit, the commitment, the dedication, sort of like that sticktuitiveness, this is going to pay off, a lot of people it's right away they're like, "Ah, I spent my hour looking and I don't see anything, so I'm just going to move on to the next thing." If that's you and you're listening to this, that's totally fine. That might just be who you are and maybe it doesn't mean that you can't be a real estate investor, I think is the key messaging that we've been trying to highlight here.

Jon Orr: For sure, for sure. And Matt brought up another hurdle early in the episode about hunting for deals. You guys have mentioned that a few times just now as well about hunting for that deal and what does that look like, because I think that can be a hurdle for many people. But before we get into that hurdle, and I think what we're going to do, was we're going to save that hurdle for the next episode. We can go forever on all these hurdles and trying to answer them for you, and I think we should dedicate time for that. So I wanted to discuss a hurdle that I have always thought about before we get into the hunting because a hurdle that, I think has to come first, come before hunting for a deal and deciding can I hunt for that deal is thinking about can I afford to invest?
Can I afford to buy this property? And I know that we've talked in previous episodes about creating that cushion, creating the down payment, finding different ways to start your investment fund. If you have not yet listened to some of those episodes, especially our Blueprint series, go back and listen to those three episodes on the blueprint to your financial wealth building journey. But I think what I'm getting at is let's say I have my fund, I've got my down payment fund ready to go, to go and purchase a property that we're not going to be able to purchase it full cash. And if you can, that I think might relieve this hurdle. But I mean if we're going to go and buy this $250,000 home, I have maybe the down payment ready to go because of how I followed the Blueprint series, or maybe I have this cash on the side or I'm ready to go, but I'm going to have to get a loan.
And I've always wondered about going to a lender and going like, "Okay, I'm at a lender, will I get approved? Should I go and get pre-approval?" This is a hurdle I think for many people, this is a stumbling block that might go, "I'm not going to go, because do I have to go to the bank and ask for permission? When I do select the deal, do I want to be in a position where I put an offer down and it's conditional on financing or do I put an offer down that's like, let's waive that because I've already pre-approved. How do I know, especially if I've already got a property on this already going?"
So let's say I've already got a property, it's a rental property. I was already approved for that because it was like my second mortgage. I've got a house. I've got my mortgage on my house. I got approval to have another mortgage on another house, will I get another one? There's this hurdle of how many houses can I ask the bank to give me money for? I think that's a hurdle right now. Well guys, what is your experience on that? I know that I've been approved with you guys as that joint a venture, but I'm curious about the next one. Will we get approval to have a mortgage for as many properties as we want?

Kyle Pearce: Yeah, I love that, Jon. And it's funny because I remember back when we engaged in that first joint venture, you and I having worked so closely together and knowing each other so well, I knew essentially all of your finances, right? So yeah, this wasn't even really something we talked about explicitly simply because I knew the answers to these questions, but you never really did. You were just like, "Oh, okay, it's going to work out." And I mean, I'm sure myself having my mortgage license and having that experience is obviously helpful, but when I look at that and I think back, I go, well wait a second. A lot of people who are listening are probably wondering how much of a down payment do I even need? If you're listening to this and maybe you're early in your career, maybe you're just starting out in a profession, be it education or be it in the health sector or some other sector where again, you're a salaried employee and you're going, "I want to get into investing in real estate. How much do I have to put down?"
And one benefit, if you've never purchased a home before, if you're a first time home buyer, you could actually put down 5%. I would definitely recommend for anyone in that situation reach out to us and we'll do our best to help you get going. Because I would recommend the house hack, which would be either buying a house and renting out some rooms so someone else is paying for part of your mortgage, or you might buy a duplex for example. And again, you could put down that 5% and it is definitely worth it if it means getting you into the market. Now, if you are like Matt, Jon and I, we own our primary residence, which is fantastic. We all have mortgages on our primary residence. So that means that when we go and purchase another property, and it's not a second home, so it's not a vacation property, it's not a second home, it's actually an investment property, there's some things that we have to consider.
And one of them that I'll mention right now is first off, typically you're looking at 20% down for your down payment. Now why is it different than say the 5%? Well, not the investors, but the lenders know that if this is an investment property, you have less, I guess, incentive to follow through with your obligation because it's not where you're living. It's not your primary residence, right? You probably have less emotional attachment. Matt and I talk about this all the time. It's like there's no emotions in what we do investing in real estate. So lenders know that and they say, "We want more skin in the game. We want more of a sunk cost from you, the investor to make sure that you're serious about this thing." So you got to get that 20% going, but then you're going, where's the other 80% coming from?
And that's typically going to come from a lender. Now typically you're looking at what we call a primary lender, like a big bank. They're going to offer the lowest interest rates. The interest rates are still going to be a little higher on an investment property than they would be on your primary residence. So keep that in mind. That should not be a shocker to you when you go into the bank and they go, "Wait a second, you're offering this person over here, this rate, and you're making me pay this rate." Well, guess what? It's because it's a riskier proposition for the bank. They still know it's against real estate, which they're all happy to do, but they want to make sure that you're serious about the thing that you're about to do. So higher interest rate, but then it comes down to can you afford it?
And that piece is really important because what you may or may not know is that many lenders actually don't take all of the rental income and add it to your personal income when they're actually running, whether you can afford it or not. A lot of them will only take 50%. So again, they're trying to add a margin of safety for themselves to make sure, "Hey Jon, are you earning enough money? Should you be doing this? Is this good? What happens if a tenant vacates the property and you don't get rent for two months in a row? Are you going to be able to do this?" So they don't want your income to look inflated with the rents. So they kind of minimize that. This is if you're buying personally in your own personal name. And once you've done that, then they're going to run through essentially all of your expenses.
And I think in a future episode, we can maybe dig into each of those items that will actually be analyzed by them, but essentially it's your debt to income ratio that they look at. And they want to make sure, they'd like it to be under 36% typically, but sometimes you can push it all the way up to 42, 43%, which I would not recommend. If you're going to push it to that level.

Jon Orr: There's reasons that pick that

Kyle Pearce: You're just getting into this thing and you're not exactly sure, if that's the limit that they're willing to do, it's like, "Maybe I want to rethink this a little bit and I want to again, reach out to someone who might be able to guide you through that process." Maybe it's chatting with a joint venture or who wants to do some sort of deal with you so that if there's trouble, maybe the joint venture agreement has something in it that ensures that you are not going to lose your shirt. So that's another piece there, why the partnering idea or joint venture idea can be really, really helpful.

Matt Biggley: And Kyle, I think one tip for people is to not just stroll into their current financial institution and expect them to give them the best deal, the best terms. There's got so many examples of clients of mine, whether investors are buying for themselves, they've dealt with a bank for 20, 30, like 40, their whole lifetime, and they go to get a mortgage, and they're oftentimes shocked that there's no value placed on their loyalty and on the tenure of that time with the bank. And so that's certainly something to think about, shopping around getting a second or a third opinion. And I think what I've learned as a realtor and an investor is that every bank almost has a different way of treating the same scenario. And I've been impressed and surprised by, I had an experience recently with one of the IG banks where they pulled some miracles together.
Maybe that was just an individual with, in this case it was TD that I said, "Wow, that was amazing." After we had gone some of the other routes that I would've normally gone down with clients and this TD lender pulled together some miracles. RBC, I had a great deal with them recently where they considered some overseas income, whereas another lending channel we had tried to go through wouldn't consider it. Oftentimes, I like personally dealing with credit unions because there's less staff turnover in those institutions, and you get to actually develop a relationship with your lender on a little more personal level. And I think context, even though this is all about the numbers, the context can really matter. And so I've had lenders in credit unions in my own personal financial history go to bat for us and say like, "Here's the context around why we should consider this deal."
And then mortgage brokers, and I'm talking all in generalities here, but brokers tend to be very creative and have lots of different lending channels. And so right across the spectrum of rates and terms, and these are the guys you can call when you need sort of maybe money fast or maybe the fundamentals aren't there for the lender and you need to get a loan from a B lender, which is going to be a higher interest rate, maybe different terms or all the way to private money.
So I'm actually never worried about finding the money personally because there are so many different channels out there. And I had a call last night from a big bank rep who said, we can lend up to 40 properties, which is huge, but we can't go over four units. I was telling him about the nine unit we just closed, and he said, "Oh, that would've been too big for us." So I think part of this is learning that lender landscape and not just putting all of your lending eggs in one basket and knowing what each of the lenders can maybe provide and shopping that a little bit and finding out who is going to be able to work with you on a particular deal given those circumstances. And again, maybe leveraging your JV partner, your realtor, asking them for advice about getting a second or third opinion.

Kyle Pearce: I love it. I love it, Matt. And you just referenced something like just this idea of every lender's a little different. This is where a mortgage agent or a mortgage broker can be really helpful, a helpful tool in your arsenal. Now that doesn't mean that every deal will necessarily land with your mortgage agent or broker. What I would recommend people don't do is don't go to brokers and then make them do all this work and then try to cut them out. You don't pay anything to a mortgage agent or a mortgage broker. They get paid by the lender, just like the person at the big bank gets paid to be there that day to set up the mortgage. So it really has nothing to do with you, but you should be going out talking to the banks you do have a relationship with, right? Because they might have a program, just like you said Matt, might have a unique structure that could be really helpful.
So definitely look at that. But ultimately in the long run, it's really good to have someone in your corner because you know what will happen ultimately is if you do more than a single deal, you are going to find hiccups along the way. And the one thing that you do want is you want to have someone that's going to be in your corner trying to ensure that you are protected, but that also the deal actually goes through. And that's one thing that I know from that industry that you do get, is you get this one-on-one customer service. They're like, "Listen, we're going to make sure this happens." They often are talking directly to underwriters and saying, "Here's the situation, we've got to get this done."
And I've seen some pretty magical things happen that way. Whereas at the big bank, the call goes to the manager or the walkout to the manager and the branch, and the branch has to call the next manager, and then that manager has to call Toronto. And so that can be a bit of a concern if it is a more complex deal. Which again, deals get complex as you get deeper into this situation. So once again, having a team of people, be it through partnerships or joint ventures, can often alleviate a lot of that learning and hassle and relationship building that you may not have the time or effort or energy to do.

Matt Biggley: It's relationships, guys. It's relationships. And I think throughout this, it's been a theme. Relationships, relationships, relationships. We've dealt with the same commercial lender for seven years now. It doesn't mean we're rubber stamped, but we can have a little more candid conversations. Relationships with our insurance providers who can call their underwriters. It's relationships with home inspectors, it's relationships among our investing community. That's really what my takeaways is.

Kyle Pearce: Well said.

Matt Biggley: Should save for the end of the episode.

Jon Orr: I think we are at the end of episode, Matt, but I think that's a great takeaway, right? I heard you two just say about the lending hurdle is that, one is that you're looking to get into buying a property into an investment, you might want to think about what is your debt to income ratio? Will you meet that criteria? And then also what I just heard from you is to build a relationship with someone who can walk you through and help you along the way, like a mortgage broker in that situation. We got a mortgage broker for our deal that we did together, and they helped us kind of get that approved, go through those steps. So I think that big idea, if we summarize the hurdles we've talked about so far in this episode, one, we started with kind of that big hurdle at the beginning about going alone.
Can I do this? What is the threshold that I need to step into so that I actually go from the analysis stage to actually implementing these deals? And one, we said, "Hey, try to do this with partners, especially early in your journey." Kyle said he did that with his real estate broker. We did that together. Matt says he did that with partners to do this. So make sure that we are finding a partner to not go alone. I think that's the step that's going to get you past that initial hurdle. We talked about time as a hurdle and dedicating the right time so that you can analyze deals, which we are going to talk about in a future episode of that hurdle. How do I analyze deals? Because that's going to be a hurdle for sure to overcome. And then we talked about lending approval.
That's going to be a hurdle for us. Can I get approved? Should I go and get a pre-approval? Who should I be talking to? Where's my best action? We talked about building that relationship. So these few hurdles for sure, we have to consider. Our action item, I think right now is thinking about where can I find that partner? Where can I build these relationships? We've got some options there for you, but I think these are some hurdles, and I think walking away today, you've got a better sense of what hurdles you're going to accomplish, even though we are going to talk about some more in our next episode, but you've got some next step actions to take away here.

Kyle Pearce: I love it. I love it. So Jon, you've kind of summarized and also mentioned a few takeaways yourself and sort of the big takeaway for me in this episode and something that again, I'm going to reiterate I wish I knew a long time ago, I think I can summarize it as by partnering or by finding a joint venture that works well for you, that gives you what you need, that sort of fills in the gaps or some of the missing pieces for you, is definitely worth the while. And I guess I'll summarize it as saying don't be greedy. And I think I'm the type of person when I see, that I'm like, "Wait a second, I'm not going to get all the benefit out of the deal?" Right? Because when it's a joint venture-

Jon Orr: You've got to split it.

Kyle Pearce: ... it's like you don't get a hundred percent, but it's because you've partnered together and Jon, you and I, we run a math business together. That is a joint venture.
It's actually a partnership. We are in that together, and it's like you could have done it on your own and I could have done it on my own, but I'm guessing, I'm not guessing. I know for a fact that without each other we would not have had the success we've had in that particular industry. Matt and I are in the same boat with real estate. I could have went alone on that six unit building that both you and I were watching, but were too scared to pull the trigger on because at the time, we didn't have all the pieces fit. We didn't have that contractor, that hammer throwing confidence that was holding us back. So we found that out there. So again, I want you to just think about that when you are making that first step. Don't let greed step in the way from taking the next step for you.
I'm not saying it means you do a JV. I'm not saying that you have to partner with someone. But if that is holding you back because you're worried about not getting the upside, you're just essentially wasting time and now you're getting zero. So like you said, Matt, 50% is better than 0%. So make sure that you're keeping yourself moving forward. For those who are listening to this and going, "That's me. I'm Kyle 10 and 15 years ago, who was like, "I want a hundred percent of it."" And you're like, you want to actually take the next step? We've got a quick little form. We have a JV list of people who have expressed to us in the past that, hey, they're like, "When a good deal comes and you guys are looking for partners or co-ventures." That we reach out to them and we essentially share the deal with them.
And we just closed on one Tuesday, Matt and I, which is a fantastic deal, and everybody wins in that deal, which is great, even the seller, which is really cool. We'll unpack that in a future episode. So if that sounds like you and that's going to help you take your next step., Head over to investedteacher.com/jv, just the letters jv. Again, that's investedteacher.com/jv. It's about take it one minute. It's not a hard commitment or anything. It's just to let us know that you're out there and that you're interested. And I'm telling you, you're not going to get pelted with deals because guess what? Most of them we're throwing away. We're just taken right off our plate and we don't share those with anyone. So until we are ready to put the deal under contract, you don't hear about it. So keep that in mind. Investedteacher.com/jv.

Matt Biggley: Another great episode and one that really helps people get unstuck from some of these scary hurdles to getting started in real estate investing. We would love, love, love for you to leave us a five star rating and review. It helps others find us. We'd also appreciate you sharing this podcast with your friends and family. As we've talked about investing together, can build some great community and make for some great friendships. Make sure you hit the subscribe button on all social media platforms. We are @InvestedTeacher on YouTube, Twitter, Instagram, Facebook and TikTok.

Jon Orr: All links to the resources and a full transcript here folks can be found over on our website investedteacher.com/episodenine. Again, that's investedteacher.com/episodenine. Kyle.

Kyle Pearce: Hey friends, there's a giveaway going on and we haven't really been talking about it on the show a whole lot, so I'm going to say it right here, at investedteacher.com/giveaway. Basically the ask is that you do that sharing, that subscribing, and there's a couple other action items where you get more balance for the more sharing, the more love you're willing to give the podcast, the channels, things like that. So head over to investedteacher.com/giveaway. We've got all kinds of goodies, including some books and some gift cards and all kinds of wonderful stuff to help push you further along your journey. Well invested students, class dismissed.

Matt Biggley: A reminder that this is not investment advice for entertainment purposes only. The content is for informational purposes. You should not construe any such information or material as otherwise as legal, tax, investment, financial, or other advice.