SWP: 109 Using Other People’s Money to Build Your Real Estate Portfolio

Edna Keep’s journey from single mom at age 16—living in subsidized housing with a daughter in subsidized daycare—to multi-millionaire real estate entrepreneur and coach inspires others. Her major operations are long-term buy-and-hold rental apartment buildings. Her claim to fame is a $60 million real estate portfolio built with “other people’s money.” A proponent of education and inspiration, Edna offers live training with her “Free Real Estate Coaching Fridays” and “Mindset Monday” live events on Facebook each week.

Insight of the Week:

What is reverse wholesaling and how can you make it work for you?

Spiritual Foundations:

1 Peter 4:12-13

Dear friends, do not be surprised at the painful trial you are suffering, as though something strange were happening to you. But rejoice that you participate in the sufferings of Christ, so that you may be overjoyed when his glory is revealed.

In this show, you’ll learn:

  • Edna’s origin story
  • Her opinion on financial planners that don’t have a lot of money
  • On using other people’s time, money, and knowledge
  • How she ended up coaching people
  • First couple of steps she teaches when it comes to approaching people
  • How she bypassed single-family and went straight to multi-family
  • How she was able to create a 5-year financial freedom plan versus the traditional 40-year plan

Quote

“We tell them ‘we need you for your energy’ and they tell us ‘well, we need you guys for your gray hair and your knowledge’.”
“You can’t do that stuff by yourself.”
“They got the opportunity, but they took that and ran with it.”
“When you don’t have money, start expanding your mindset, expand you dreams.”
“Your coach sees the future you while your friends and family sees the present you.”
“Now whatever I teach you, you teach it to somebody.”

Link

Primerica

Profile: Edna Keep

Edna Keep’s Website
Edna’s Youtube Channel
Free Training
Edna’s Email Address: edna@ednakeep.com

Thanks for Listening!

Transcription

Brian: Because a play is going to play play play play and the hate is going to hate hate hate hate hate.

Brett: I am just going to shake shake shake shake shake. Shake it off, Shake it off.

Brian: Shake it off, shake it off.

Brett: This is the Simple Wholesaling podcast episode 109.

Welcome to Simple Wholesaling. A Christian podcast that supplies simple, yet effective content for real estate investors and business entrepreneurs. Get advice, tips, and tricks so that you can stay true to your values and achieve your dreams with real estate investing you can trust. Now, introducing your host, Brett Snodgrass.

Brett: Hey, hey, hey. What is going on? Thank you for joining us again on another episode of the Simple Wholesaling podcast. I am your host, Brett Snodgrass, and I am with my co-host, Brian Snider.

Brian: What is going on, Brett?

Brett: What is up man? That was a good intro.

Brian: I think so.

Brett: I am very moved by that. Like I am welling up with tears, I am just so emotional.

Brian: So emotionally moved by Taylor Swift, shaking it off.

Brett: Yes, yes. Stay tuned guys. You are going to want to not want to miss this interview with our guest today, Edna Keep, and the reason we did the ‘Shake it off’ intro was… Stay tuned. But yes, we got a great guest for you guys today, Edna Keep. She is from Canada and just an amazing inspirational story. Single mom at the age of 16. Has grown to build this multi multi million dollar investment company using other people’s money to buy apartment complexes and now she is training. She has over a 150 students, training them to do the same thing. She got some young young bucks in her classes. These guys, they started their class at 19. I will let her tell the story but just killing it at such a young age. You guys will want to stay tuned for that.

Brian: It is so cool just because I hear people all the time saying they do not want to get into real estate investing because they do not have the money behind it but is very… You can work in this business, you can do well on this business by using other people’s money every day.

Brett: Yes, definitely. We really get deep with her telling about her story. Just about the fears and how she built up going from job to job, living from paycheck to paycheck, to just getting out all that and realizing wow there is so much more that she could do. Great great interview. You guys are going to want to stay tuned. Before we do that, we want to talk about our show a little bit and what is going on here at Simple Wholesaling. If you guys have not listened to any of our other episodes, I would start off with going back starting from the beginning. We have grown so much, this is episode 109.

We have been doing this for two years and we really talk to real estate investors all over the world about how they have built their successful business whether it is through buying apartment buildings or wholesaling or flips or whatnot, we can all learn so much from our guests here today. We are out of Indianapolis, Indiana. If you guys are interested in investing in Indianapolis, we would love to know you and who you are. You can check us out, our education materials, our podcast, you can look at even all of our properties on our website at simplewholesaling.com. Check that out right now.

Brian: For those that do listen to our podcast, we would love to hear what you think. Jump on iTunes and give us how many star do you think we are worth and give us a little feedback on what you think of the show. Maybe things that you like to hear, what you like about us. We would love to hear and love to get that feedback.

Brett: I would probably give you six star.

Brian: Six stars?

Brett: Yes.

Brian: Thank you. I appreciate it. That makes me feel very nice.

Brett: I would give your beard one star though because it is scrubby. I am just kidding.

Brett’s Insight of the Week

Now, simple tips and tricks that make real estate investing easier, faster, and better. Brett’s Insight of the Week.

Brett: Each week, we like to give an insight, a quick tip of something that we have learned in our business. Typically it is with marketing, it is with real estate, it is with wholesaling. Today, we are going to talk about reverse wholesaling. If you guys have not heard of reverse wholesaling, basically what it is it is going out and finding buyers first before you find the deals. In that, if you find buyers and you get exactly what they are looking for, you can basically create a shopping list for them. Would it not be so much easier if you knew exactly what someone was going to buy and then just go shopping and that makes that decision process, when you are negotiating with the seller, so much easier.

For example, let us say I am talking to a gentleman buyer out of California named Brian. I say, ‘Hey, Brian. We are Simple Wholesaling out of Indianapolis. We are the leading provider of discounted properties here in Indi. You are interested in Indi, that is what you called right?’

Brett: ‘Yes, that is exactly why I called. I would really like it if you could help me out. I am looking for a flip opportunity and a hot area in Indianapolis. Can you do anything with that?’

Brett: ‘Yes, definitely. Before we get started, I love to share some of the areas with you. Do you have any in mind that you are looking at or do you want me to kind of help with that?

Brett: ‘I have heard of the Fountain Square and Bates Hendrix and stuff like that. Is there anything else? Are there any other places I should be looking at?’

Brett: ‘Yes. Fountain Square, Bates Hendrix, they are great. There is another one called Windsor Park that we have found that there are some great opportunities there, flip opportunities. We have a few properties there. I tell you what, I am going to put a list together, I am going to email it to you. You can kind of look at the hot areas, this can describe each one, and we will start from there. That is the areas, what type of money are we talking about? Are you looking at buying something for $50000, $200000, what is kind of your budget?’

Brian: ‘I am maybe looking at being all in about $125000.’

Brett: ‘$125000, okay. That kind of puts me in some different areas and then when you say $125000, I know a lot of people sometimes get scared of big rehabs. Would it scare you if you bought a house at $25000 and had to put $100000 of rehab into it or are you more like the guy who wants to buy a $100000 house and put $25000 into?’

Brian: ‘I could go either way. I am okay doing a bigger rehab, I am okay with the smaller rehab. I just want to be all in at $125000. Is there any way you think you could help me out with maybe set me up some contractors as well?’

Brett: ‘Yes, definitely. I will email you over a couple of contractors that I know, that I kind of recommend, and yes we have a couple of great ones. I think I got some great information. I might also ask Brian Bedrooms Baths, he has consideration, just things like that. But I am giving a shopping list of what he wants.’ Now I know he wants flip properties in certain areas, now I can go shopping in those areas and I know he wants to be all in at $125000. Let us say I find a house that is $80000 that needs say $30000 in rehab, that is $110000.

Now, I can work it backwards to build in my wholesale fee. That is what exactly a reverse wholesaling is and if you get a long list of those, you have a huge shopping list. I got Brian the flipper, I can have someone the buy and hold investor, hedge-fund companies, buying cookie cutter houses, whatever it is, that is a great way for you guys to get started is to try to find the buyers first.

Spiritual Foundation

Do you dream of a life that is purpose-driven and makes a difference? Spiritual Foundation.Spiritual Foundation.

Brett: Last week on the Spiritual Foundations, we actually went to a topic that really hit home with me and I asked a question when was the last time that you were filled with so much joy that you cried. I answered that question on episode 108. If you guys want to go to our website and listen to that one, I really shared from the heart. It was real and raw on that. Today, I am going to give the mic over to Brian and he is going to use that same question and answer that.

Brian: You asked that last week and I was kind of reflecting on that. There was one thing that just kind of really stood out in my mind that I just kept on just coming back to. This was about 10 years ago now but my younger brother, Jason, was in a really really bad car accident. Like I just remember him lying there in the hospital and it was one of the situation where basically he should not be alive today just by God’s grace, God’s hand, God’s prayer, like everything that God did for him is just amazing and it is just a crazy story but I remember this one specific day that Jason was laying there in the hospital and he had, this was probably maybe a week to week and a half even after the accident, was still with complete paralysis on his lower half of the body.

It never had any kind of reaction to they do like the pinpricks and stuff on the feet, in the hands and stuff and just no reaction at all on his feet still after a week and a half. You can only have two people back there at the time with him as visitors and this was like in time where I think it was my mom and I were back there and then my brother and my dad were like coming back like kind of switching off. They were like four of us back there that time and they came through and do the pin prick and like I remember him moving like his left foot.

It was like just such an amazing… All the emotions that went through me at that moment was just unbelievable. All four of us we are like kind of going crazy and stuff like oh my God, he moved it and they are like trying to, all these doctors and nurses, they are trying to do their thing and we are kind of creating a little bit of commotion. You guys need to calm down, you need to get out here. ‘No, you do not realize like this is the first time we had seem him move his feet. It was just an amazing just kind of I always think back to that moment, just think of all the emotions that went through me right then and just to see just how great God is. When he actually does answer our prayers, even those times that we think he does not answer prayers, but really he is in his own way. He knows what is best for us and stuff and it was just an incredible thing.

When you asked that question last week, I was just kind of praying about that. That one moment that I remember. It is just like all the joy that was just overcome in that moment was just incredible and kind of this verse I was kind of reading through and just kind of pick this verse out to kind of encapsulate and that was from 1 Peter 4:12-13, ‘Dear friends, do not be surprised at the painful trial you are suffering as though sometimes strange were happening to you but rejoice that you participate in the sufferings of Christ so that you may be overjoyed when His glory is revealed.’ That is so true just of all I think. All the sufferings we go through and all the times that may not be as easy for us, whether it is in work, whether it is it with family, whether it is just in everyday life, that are suffering is nothing like His son but that His son did suffer for us. The suffering that we that we maybe go through, it allows us to be better people, it allows us to understand what has God has plan for us each and every day.

Brett: Amen, amen. Thank you for sharing that and I just always get amazed by things like that and, like you said, how great is just by those little things sometimes we take for granted. I think that when life becomes real, you just think about who you are and your whole creation in the miracle of life in and of itself. I always get overjoyed with tears, obviously, when the biggest one we just had our baby girl, Olivia Jane. I will just share a quick second of this. It was just so fast and my wife is just super champ. She went all natural and the doctor came in and says alright it is time, you are ten centimeters dilated, let us go.

Literally, the next thing she got up, she got on the bed, she pushed one time and the doctor’s hands was our baby girl, I will call her Olivia Jane, and just thinking about the miracle of life I was just welling up with tears. Really, I was welling up with tears but on the other thing I was like what the crap just happened? Like the baby was in you, my wife, and now it is not and what? It is just crazy, it is just the miracle of life, how is that baby living in there and the one miracle thing was baby Olivia, she came out with, my wife’s water never broke, she came out with the sack still attached around her head which is just crazy. It is the miracle all and of itself. God is good, God is great and that is just super cool.

Interview

Brett: We are going to interview a very special guest today, Edna Keep, and you are going to want to listen to her story. She has had an amazing journey. She was a single mom at the age of 16 where she lived in subsidized housing with her daughter and her daughter was actually in subsidized daycare. Since then, she had gone through many career moves from working in a doctor’s office to secretarial work, to an accountant clerk, to a financial planner, and then she got into network marketing companies and which now she runs a multi-million dollar real estate empire and she coaches and trains a mastermind group and she has other students, 150 to be exact, that she helps build wealth through passive income, through multifamily properties and single family properties. She is a multi-millionaire, real estate entrepreneur, and a coach and she inspires others.

Her major operations are long term buy and hold rentals and apartment buildings. Her claim to fame is a $60M real estate portfolio built with “other people’s money”. She has built it this way. She is a proponent of education and inspiration and Edna offers life training with her free real estate coaching Fridays in mindset Monday, live events on Facebook each week. We are so excited to have Edna on the show, let us get to the interview. Hey, Edna. How are you doing today?

Edna: I am doing great, Brett. How are you?

Brett: I am fantastic and we are just kind of giving a little chat before we start recording. I am really excited. I think your story is amazing, I think that our guests are really going to love hearing how you started out in life and through your decisions have become one of the most successful real estate investors out of Canada. Super excited but before we get into all that, I want to start with your origin story. How did you get a real estate investing, where did you come from and how did you become such a success buying multi-million dollar apartments?

Edna: Well, I was a single mom at age 16. I kind of start my story there because it was kind of when I had to make some different choices. My brother is just older than me, he was a teacher and he is actually a successful real estate investor as well, I will go not on the scale that we are. He said yes, when I was 16, I was thinking pretty small. I was not thinking about what life could be like and my only true goal in life was to become a mom. I just always love kids and I wanted to become a mom but when I became a mom at age 16, it was not easy. It was like so hard especially being a single mum and it limited my choices. I was not able to go to university or college so I just got a job straight out of high school. Really that was all I thought. I would have a job and have kids and be married. That is kind of what everybody around me did.

Nobody seem to have a real career or did very many business owners. It was really limited thinking but at one point in my life I just kept getting told by family and friends because I did have some dreams. I wanted to make more money and people would say you got to learn to live within your means. At that time I think I got like a $2000 credit card debt which when you are earning $1200 a month is a lot of money. I kept getting that lecture. I thought crap, if I got to learn something, I am going to learn how to make money. I would rather learn… it sounds to me as more sounds more fun to learn how to make money as opposed to learn how to budget. Learn how to save money and learn how to live within my means.

I started studying that stuff. I read books and took some training. I started a job right out of high school at a doctor’s office and I liked it. It was nine to five, Monday to Friday, which is something that also my friends did not, they were waitresses and cleaners and stuff like that so they all thought I was pretty lucky that I had a job where I had weekends off but again I wanted more. I was bored, quite a boring job after being there for a little while so I started taking some correspondence courses like secretarial, accounting clerk, different stuff like that. I moved myself up slowly. I got a secretarial position and I got an accounting clerk position and then I got to office administrator position. It was always what is my next step?

It was not like we are on left field. I was still actually living, my first job, my first eight years out of high school, I actually lived in subsidized housing and my daughter went to subsidize daycare. That is when I started looking at things. I wanted to, I wanted more, I wanted to build up and do more so that was when I was taking extra classes. While I was working as an office administrator, again, I got bored and I started looking around for what else I could do. I had seen an ad in the paper that somebody was looking for somebody to learn financial, I was not sure if it is financial planning business, but some financial business.

I had seen the ad over and over again and I knew I could not give up my full time job because that is what paid the bills. By this time, I am living in an unsubsidized apartment so I still have bills to pay rent and car payments and stuff like that. I just could not give up and go into some straights sales position but it looked like the person was not getting what they were looking for. I finally I phoned them up and I applied. I said is there any possibility you take hands on somebody part time and they said yes. I said okay. They had a, and I realized now what it was, it was an opportunity meeting for a network marketing company, but at the time I did not realize what it was and what it was a company a company called L. Williams, now known as Primerica, but their premise was buy Term Life Insurance and invest the difference. Not people be buying whole life insurance.

It made sense to me. It was enough for me to understand and I went oh yes I could do this. This this could be something that I can do on the side. I can still keep my job and go around sell people life insurance, right? Then they told me that I needed $350 to buy my books. Well, that was another big stop sign because I did not have the $350. I was living on, what was decent money to me at the time, but maybe $2000 a month. It was not huge and I was paying rent and car payments and have a life and all that kind of stuff. I did not have that money in savings. I said to the guy I really liked to do this but I guess I will have to save my money because I just do not have $350. He said, ‘Well, if you had $350, would you start today, Miss? ‘Absolutely. I think I am pretty sure I could do this.’ He sponsored me and he actually paid for my enrollment fee, whatever that was, these set of books so I could study to become a life insurance salesperson.

That was kind of a break that I got and within a couple years I left that company because I did not like the network marketing aspect of it. I started working with another company that was more courage to me to become a certified financial planner and do the whole rounded out business. Within a couple years of doing that, I went full time into selling mutual funds and my future as a certified financial planner.

Brett: Wow. You have had a lot. I am just kind of like putting the pieces together and I always had to relate myself to different stories and just hearing your story, a lot of similarities. I did not have a child at the age of 16 but I had a child when I was in my upper 20’s. I was broke, I did not have any money and I remember we were actually on the WIC program. We would go and we get free cheese and free milk and all these different things just because I could not afford to provide for my child that well. A lot of similarities.

Let us really take your story into your financial planning. I want to get your opinion on something. What is your opinion on financial planners that do not have a lot of money? Because maybe you are in this position and I always get a little fearful if I am meeting with Edward Jones or some financial planner but they might not be successful at their money, right? What was your opinion on that going into this arena but you are still not making probably the most money yourself? What is your advice on that?

Edna: You know what? It just makes me laugh when I think about it because you know what? I did not have anything. I was still broke as could be when I was doing that but I had to increase my job income before. I went full time. I had increased my job income to just over $40000 a year. I got to go by a lot of people. I was crazy to go into a full time commission because I have got it made by that time. I was working Monday to Thursday, I was taking Fridays off so I could extend my financial planning business and while I was still doing it part time, I made $24000. To me that was huge. Like that was in $60000, $63000 because I still had my salary.

My manager at the time said to me, ‘When you are full time, you do not have to earn as much money because you do not have all the taxes and you got some write offs and all this kind of stuff.’ He says, ‘Your $24000 that you earned on the business side will probably replace your $43000 you are doing as a office administrator.’ He says, ‘Then you would be freed up to earn more.’ I thought if I place it off and yes, you know what, I could. If I had more time, I definitely could at least double my income. I did it, I bit the bullet, I went full time into financial planning. Right just before I left my job, my car broke down. I had on only been able to put a $1000 into RSP and I had to cash out that RSP so I could buy this stupid car because I needed to get around, right? That is where it was when I become a financial planner.

I wonder, when I look back, I wonder about all these people that took financial advice from me when like I had nothing. But I started small too. I started people on savings plans and I did not have very many people who had lots of money. Most people I was working with was let us get started. Let us get you on a 50 a month plan, a 100 a month plan. My boss where I worked before, he let me set up a group plan there so I had an instant a hundred clients and every one of them had to put in 3% a year of their income into this plan. It was like to take place of a regular pension plan because we used to lose employees to another company in local because they had a pension plan.

That was a big deal for me, I had these hundred clients, that they were all putting money away. That was a little bit different than dealing with people this many. That was really my focus. It was getting people into monthly plans because that was a recurring income that came in and I did not have to do the work over and over again. Like I would make larger sales, three or four or five thousand and that is what would help me make the extra money. But the first year full time, I made $67000. I had more than doubled, tripled what I earned a year before partime and I was able to make the same amount I made with the two jobs. Then my second year full time I hired an assistant, I made $187000. That is when I really knew that I was on to something.

Brett: Wow.

Edna: I started putting money away left and right. I was making this money, I was used to living on a lot less and I put away a lot of money too. Then as I put money away, I felt more confident attracting clients with bigger amounts of money. By the time, I left my financial business. I would not take on a client that did not have at least a $100000 to invest in me at one time. Like it was a little bit and there, I am moved up that far. But, you know what again, I got a little bit bored doing the same going over and over again. I was not challenge, I kind of made the same money for like eight years between I got up to both $250000 a year and I made the same for about eight years and I tried different things but you know what? I just always kind of felt like, when I talk with different coaches, it is all what is special about you?

Why should people deal with you as opposed to another financial advisor? I really have nothing to say. There was nothing special about me. I sold the same thing everybody else did. I was a C student so I did not understand all that. Must have been a racial stuff that some of the people in my office talked about. I just knew that at the time that mutual funds were the way to go, right? That is the only thing I knew. I was trained by mutual fund companies, I drank the Kool-Aid, I believed in mutual funds. But it was not until I started deciding that what I needed, another income source. Because I did not like ups and downs in the stock market, it affected my residual income because people would not buy as much.

They would stop their monthly plans when the markets went down, silly stuff like that that they are not supposed to. We thought we would buy a rental property or two, that should help, and we started taking our classes, our big goal, our five year goal. If we could buy 50 doors, we were taught if you can make roughly a hundred bucks a month per door cash flow, 50 doors would give you $5000 a month and I went that is our goal. Five years, $5000 a month, extra residual income, that is going to offset all the ups and downs of mutual fund fluctuations.

Well, it got to the point where I could not sell mutual funds anymore. The more I got to understand real estate, I really realized that I have the blinders on because I kind of always related myself to this. What do we say about doctors? Where do doctors get their education?

Brett: From…

Brian: School.

Brett: School.

Brian: By practice.

Brett: By experimenting.

Edna: Pharmaceutical companies. Pharmaceutical companies pay for most of their training. They train them. That is why the first time when we go to the doctor, and they are getting better, but everything is a prescription. Prescription, prescription, because they are taught by pharmaceutical companies. I realized I was taught by mutual funds so that was my only prescription, mutual funds and life insurance. When I started seeing the value of real estate, I could not sell them anymore.

I maintain my clients but two years after I was introduced to real estate, a so my practice went into real estate full time. I still was not making the money that I was as a financial advisor, the $250000 a year, but I figured that I needed $10000 to cover off my residual income. The first four years I was going to get that by being paid out by the person who bought my book. The rest I had already built up. As in we had actually got, in 18 months, we got 50 doors. We are at out $5000 a month in passive income and I knew I could not sell mutual funds anymore. Yes, that was when I made my big switch and that was in 2009.

Brian: Wow. Okay. Yes, thanks for sharing that. That is awesome. It is so cool just to hear your background and then here too. Let us transition to kind of where you are today.

Edna: Okay.

Brian: You have kind of taken this knowledge of kind of what you thought you knew about mutual funds, everything got transitioned into allowing it to work for you for real estate. I think you kind of made your name of being able to use other people’s time, money and knowledge for investing. Can you kind of touch on that a little bit?

Edna: Sure. In taking my classes and stuff, we kept getting asked how the heck did you grow so fast? Like we go back to the conventions and stuff they are putting on, they always kind of put you in different tables and I still remember one day we were just sitting down this couple who have been with this group for like three years. I went oh, wow, this is going to be awesome because we are going to learn some stuff. These guys had been at it for three years, we have been at it 18 months, and sat with them and they have yet to buy one property. It started like what did we have going for us that made us so successful so fast? One of the biggest things I thought was my background as a financial advisor.

When I talked to investors, I could now sell against mutual funds and not that I had a lot of my mutual fund clients follow me over to real estate, I did not, I think I did too good of a job selling it but I did get a few clients who started dabbling with and eventually probably ended up with a boat. Ten of the 300 clients I left behind as a mutual fund advisor that came with me into real estate. Most of them were new people I met after but I just knew how to talk to them. I knew what investors are looking for and you had a present to them and you had to structure deals so that they could be win-win and a lot of people did not. They heard the concept of using other people’s money, one of our favorite classes was creative finance.

We understood, we practiced getting vendor take backs in that classes and then that unit what vendor takes back are the vendor financing. We practiced that and we did a lot of it and people could not quite wrap their heads around it. That is actually how I ended up coaching people because I got asked it so often. I thought you know what, for the first while I thought well of course you cannot do that, I can do it, I am financial advisor. Then I realized that no, I learned how to be a financial advisor.

It took me I think three years to do my certified financial planner designation but I realized I could take the training and train other people how to be a real estate financial advisor and that is actually how my whole coaching program began. I pulled together a group of people who had been asking me consistently and I said okay, I think I am ready to teach you guys. I put on a one day mastermind there was nine people attended it and seven of them bought into my mastermind, by that time it was $15000 a year and we just excelled from there.

Anyway, then there was a group of us working together so we could excel even more and that is really where I started training other people because I realized that I know everything I had learned I learned as self-study. It was not like I had to go off to university or anything, I did everything in my off hours from what my regular job was and I learned how to be a financial advisor and that is what I felt the people were missing in the real estate side was to really be able to share that with people and be on the same side of the table as investors instead of trying to convince them why they invest in them.

Brett: Yes. I mean you are a very natural speaker and you are natural at using other people’s money just like you said in the financial planning space and now the real estate investing space and that is always a hot topic in real estate investing in how you approach people, private lenders or people to invest with you.

I feel like most of the world has their blinders on because they are taught, just like you were taught in the mutual fund space, is you put some money in a 401K or an IRA and you invest it into mutual funds and you make whatever that is, 8% a year, maybe 10%, sometimes less, sometimes a bit more and that is exactly what you do. Take us into what are like the first couple of steps that you teach people on how to approach someone else? I guess what does your program look like and what are those first two steps that you would advise them? How do you approach someone to invest with you rather than investing in mutual funds? What are the benefits and the pros and cons?

Edna: Well, I think as a real estate investor, Brett, you will understand why because when you say 8% or 9% or 10% in mutual funds. Like that is if you are lucky. When I started selling mutual funds, what I have been trained and what I saw is that we could get tossed to 18% returns but you know that never lasted. It went up and people would panic and pull out and then they would buy back in when things were higher and we just could not get people around that mentality. Very first of all, what I teach my students is what I call a mindset shift.

We are not asking people for money, we are offering people an opportunity to invest in real estate with us and make a really good return on their money. Our job is to find those deals, analyze those deals, and then manage those deals. Their job was to put up the money. We generally go anywhere 40% or 50% test that much to the investors. Sometimes as high as 60%, it depends what the deal looks like. We structure the deals so that investors get their principal back first because that is one thing I struggled with once I really understood mutual funds was if a client gets 8%, reality the fund did maybe 10% but the top 2% goes to pay all of us and the management and stuff like that. If the fund earns -8, you actually are -10 because we still get paid regardless. We get our trailer fees, the management gets their fees and when there is a big market correction it is hard to get that money back.

We used to talk about dollar cost average and stuff like that to get your money back in and but with real estate, first of all you are backed by a solid asset you can touch that does not fluctuate all over the map. It is tenants paying off your mortgage which is another huge one for me and one of my favorite aspects of real estate because even to this day I like to spend money. If I was not in a for saving situation like mortgage paid on by my tenants, I would still probably spend most of my money. It is just the truth, that is the way I am.

I love spending money but now this, you know we are sitting at 300 over 300000 a year in mortgage pay down at in all our share of our investments because we generally do not own a 100% of the building. We have a few houses that we are on a 100%, but our apartment buildings we own anywhere from 20% to 50% and our investors on the rest or managing partner, sometimes we bring in a managing partner for 20% or 25% and stuff like that but the structure of our deals is we pay our investors back first other than maybe a small acquisition fee up front and then we share in the profits. In a lot of cases we do not see the return on the investment until five years out, until the principal is all paid back but you know what? The investors love that. We cannot make money unless they do. Is everything perfect in real estate? Absolutely not but we cannot make money unless they do.

Brian: Right.

Brett: Yes.

Brian: I mean that is so true and that is the great advice. I want to kind of touch on I know a lot of people when they start with real estate investing, they usually have to start with single families for the buy and holds. How were you able to maybe bypass doing, sounds like that is what you did, and you were able to bypass the single family? You go straight to multi-family, how are you able to do that?

Edna: Well, you know, actually our very first purchase was a condo because we were scared of everything. I mean everything was brand new and we owned our own house but we did not own anything else. Tenants were scary to us because you always hear those horror stories about what tenants do to your properties and stuff. Even though I was a tenant for years and years and years and never did any of that stuff, that is not what sticks in your mind, it is the horror stories. The first condo that we bought, my oldest daughter was actually renting it.

When the realtor told us it was for sale, I went well I am buying it then because they already know I have a good tenant because she was taught, you do not ever miss paying your rent. Within a few days, she was telling us about the person living beside her. He had lived in that condo for 17 years. There we go, I am buying that one too. I got a locked in tenant, they are never going away if they have been living there for 17 years. They were friends and they fixed the place up really nice, it was nice. Our first two purchases were condos so we did start in the single family.

Brian: Okay.

Edna: But you know, after a few years we could not get mortgages anymore. Then we jumped and just started dealing with joint venture partners. In one year, we bought 12 joint venture houses. Each house we had to raise about $70000 and we thought it makes more sense to us at this point to just get multifamily. First of all, the building qualifies more than you as long as you got a decent number which we did and we like that. Once we found multi-family and we realized that it is really no harder to buy that house, we focused entirely.

That is actually what I teach my students now. You do not have to start with a single family home but you have to start with a mindset shift and that is, first of all, really I can go into multi-family? Yes, direct into multi-family because it is not all about you. I have a couple students that started with me when they were 19 years old. They are now 21 so they have been with me about two years. They started with me May, two years ago, they bought their first property in December just over a year ago and they now own 74 doors. They still live at home with their parents.

Brett: That is cool. That is awesome. They are living below their means.

Brian: I bet their parents, they can pitch in though.

Brett: Yes, they probably do not even take rents either.

Edna: You know what? Their parents love what they are doing. Their parents bought into the job thing and they see what their kids are doing. The kids convinced them to pay for my mastermind program as their university education as opposed to going to university which I think is just brilliant. They pay for their mastermind program and in the meantime in two years they have increased their net worth by $800000. When their properties start paying them because right now they are doing active management so they are getting paid about $8000 a month but when their properties cut in and they get their passive income, they are at $8200 a month. Now, it is going take three or five years for that to cut in for them but they are 21 and they have never, even own their own home, a single family rental.

Brett: Wow. There has been definitely some good nuggets there. Number one, I was listening to a podcast the other day about a young gentleman taking, instead of going and getting an MBA which would have costed him about $100000, he took that hundred and invested it into the real estate and pushed it forward, it is exactly what these kids are doing.

Brian and I worked with a couple of 21 year olds who they bought a couple houses from us and then now one of them has got his mom and dad interested and they are buying a couple of other rentals with his mom and dad and I just think it is really neat because the older generations sometimes are in that mindset, they just cannot get around it. Sometimes the younger generation can help them just ditch what their mindset alone and get to that investment. That is awesome, that is amazing.

Edna: They really have. Their first apartment building they bought, the one parents wanted to invest a $100000. They needed I think $300000 or $400000 to close that deal, they gave them their first hundred thousand which excited them and they got their first investor and then they got the rest. But their parents came back and said, ‘Oh, you raised the money.’ Then they go, ‘Yes, we told you were going.’ They said, ‘Well, we really did not think you could. We actually wanted to be your full investor.’ When they said that to me, I said well let them be your full investor. I said that is a great deal out there, in the meantime they had access to another deal that came to them because of the first deal and I said, ‘Have your other investors taken their money to all your share?’ They said no. One had they were busy with work and the other one had, I do not know. They had these excuses. I said so they are not a 100% committed.

Your parents are a 100% committed, I want you to go back to them and say yes, I will take you. They did, they got that first building. They owned I believe 60% and their parents own 40%.

Brett: Wow.

Edna: Their parents, one of them does all the books and they go out with them, they are painting and doing all the work on the buildings because to get the special deal in this building, it was actually quite vacant when we bought it so they did not work hard once they took ownership. I still remember one time they were at one of my event and we were out having a, I always take my students out for a nice meal, and we are having a nice meal and the parents text and they said, ‘What are you doing? We are out here painting.’ They sent him a picture of their painting job or whatever and my student sent him back a picture of his nice steak and he said, ‘And I am out for dinner.’ We went okay, is not that funny? The parents are out there working and the kids are out there celebrating.

Brian: I love it.

Edna: Masterminding with us. We always tease them about their youthful exuberance and energy and stuff and they tease us back and they go we tell them what we need you for your energy and they tell us well we need you guys for your gray hair and your knowledge.

Brett: That is right.

Edna: Team effort, right? You cannot do that kind of stuff by yourself. Yes, we love them but they have worked hard. They got the opportunity but they took that opportunity and they ran with it.

Brett: They have been studying and taking your mastery class and I think that is just a huge instead of… When I was 21, we all can say man I wish I would have started a little bit earlier, now you can really help people do that. The initial thing I think is the mindset obviously because when you are young like that you have to just switch that it sounds like they did so that is pretty cool what you are doing.

Edna: Thank you.

Brett: One last question before we go to the next section of the show is that you talk about how you are able to trade a five year financial freedom plan versus a traditional 40 year plan. I know that my parents were teachers and dad retired after thirty some years, they had that plan right? They retire with the pension and now he gets Social Security but he invest in real estate with myself but how do you teach that I guess? What do you start with when you are looking at that plan which is totally mind blowing within my looks? Wow, I can really reach that in five years so where do you start?

Edna: Well, I approach it from two levels because I work with the investors and I work with students so I can teach them both the five year plan. The student side, how I teach them is just like my classic training with the two young guys I was just talking about. You do this and then in the five years when your investors are fully paid back, that is when your cash flow cuts in. Three to five years, they already know because I get them to calculate upfront. What is your passive income going to be in that time frame? Well, they already know with the 74 doors they have that they are at $8200 a month. They do not want to stop there though, they want way more. I mean these guys are big thinkers already.

They are probably going to kick my butt when it comes to how much they are going to be able to own but that covers all their bases, now they are free to do whatever they want. That is the front, what can you do, as a student first of all, how many buildings? How many doors do you need if you own say average 25% of a building because I believe in diversifying as well. I believe it makes more sense to own 25% of four buildings than a 100% of one. How many buildings do you need to be in control of that if you are owning 25% of it to get your number? Whatever your number happens to be.

You know like the casual game that Robert Kiyosaki teaches, it is easier for the janitor to get out of the rat race than it is for the doctor because the doctor has, first of all, all their education expenses. Then they are keeping up with the other doctors and they got high incomes and high expenses, new cars, beautiful houses, I tell people stick with your janitorial job or whatever it has to be do. Do this on the side, live in those means for a while and build up that so that once you are financially free, I really believe that you can focus on what you are meant to do in this world and if we are able to focus on that, do not have to worry about those dollar.

The money is going to come, if you do not worry about putting food on the table like I did for the first 15 years of my career, it is so much easier to think differently. That is where my student’s five year plan comes in. My investors, five year plan can work the same way. You invest a $100000 here, a $100000 there because our minimum is a 100 to invest with us. A $100000 here, $100000 there, well in three to five years you are going to have all your principal back so we can still put it to work but then you are still going to be more earning, on average, if they put in a $100000, they are looking at about a $400 a month return after they have got all their money out. They do that five times, they is their $2000 a month and in most older people when they are looking at supplementing their income, supplementing their pensions, supplementing their retirement income.

But again, if they want to go quicker you can use your home equity line of credit. Maybe invest $500000 at one point instead of a 100 here and a hundred there and then five years later you have got that money back, you can roll it all over. Or as it comes back to you, you are rolling it over with and you maintain your ownership on that property. When you talk about say roughly $400000 a month after you have all your money back, that does not include mortgage pay down. You are probably getting that much again in your four savings which we can refinance out later and have that money come to you tax free without you claiming it as income because it is really just refinancing your building and pulling your equity out.

Brett: So cool, so cool. I would love to take your master class. I think there is a lot of wisdom.

Edna: Than you.

Brett: I am going to fly to Canada.

Edna: Well, hey, the first course that I call 90 days. The promise is not that you will have $5000 going in 90 days but that you will know exactly how to make $5000 monthly passive income by the time you had done that 90 day course. Then from there, you just start putting those steps in place but that is online group program.

Brett: Awesome.

Edna: Yes, so you do not have to fly anywhere.

Brett: No, I like that. I like that. Where can people find that real quick?

Edna: Well, I like them to start by going through a training series that I have set up. It is a free training, kind of gives people an idea. I know they get an idea about the call but it is called training.ednakeep.com. Then reach out to me. My e-mail address is edna@ednakeep.com and my website is ednakeep.com, so very easy. They can find me that way, they can start calling me on YouTube or anything like that. I have got all kinds of videos of training people on this kind of stuff. I teach my students the same thing I teach my investor. There is nothing hidden and I teach the students to teach investors the same way because we want them to understand all the upsides, as well as the downsides, because as we all know real estate is not an easy game. There is stuff that can go wrong so you need to protect that side too.

Brett: Yes, definitely. You guys can find all that information and links on our website at simplewholesaling.com/episode109. We are running a little bit short on time but I do want to get a couple of questions, actually one question, into the section of the show that Brian and I like to call Going Deep.

Going Deep

Edna: Okay.

Brett: In this section of the show, I really want to dive into kind of how you got started again. You are sitting there, you are a single mother at the age of 16, and you had gone through it sounds like various jobs trying to figure yourself out and what you were going to do with your life and you thought you were going to work the exact same job just like everybody else did for the next many years of your life and just live from paycheck to paycheck and here you are building a multi-million dollar business and teaching other people to do the same, teaching young people as well.

I know you are teaching these 21 year old some great wisdom but is there any other people you have been able to mentor and what advice would you give yourself or that single mother who feels like that she does not have any choices in life, that this is all there is, that she is going to have to live off the government, some income from the government and all that. What do you tell them how to get through all that?

Edna: Well, first of all, I just want to point out that I have students from the age of 19 up to age 70 because there is still some 70 year olds out there that have not created their financial freedom. It is been all over the map, they just have different goals, right? But what I would tell that person is so many of us get our dreams beat out of us by the jobs we get and get your head out of the clouds and I get to learn to live within your means. We do not get taught to expand our means. When you do not have any money, start expanding your mindset.

Expand your dreams, get around people, and you can get around people for free that are doing what you wanted to do, making the money that you want to make then listen to them. But the biggest thing is being around them and just seeing that they are accomplishing their dreams. They are not living on minimum wage, they have made a different choice. They might be living on minimum wage right now but they got millions in their dreams. Then start taking the steps.

There are so much free resources like podcast, just like what you guys are doing, huge. Listen to a dozen of them until you find something that reflects with you and listen to a dozen people until you to find somebody that reflects with you. Follow their free stuff because like you guys you put a lot of free stuff out, I put a lot of free stuff out, you can learn a lot before you ever have to pay a dime on your education. But instead of buying that new car and making your payments of $500 or $600 a month, instead of upgrading that home or buying all those new clothes on the weekend, start putting some money into that education because it is that education that is going to help you do something with what you are learning.

Again, it is not all knowledge, you have to take action with it which is why I really think you need to be around like minded people and as soon as you can possibly afford it, get a coach in your corner because they will help, I would say this, your coach sees the future you or your friends and family see the present you.

Brett: Yes, I love that. You never stop learning, continue learning. I think I just bought six books over the weekend on my Audible.com account because I am in that space where I have read a lot of business books, read a lot of leadership books, and now I am wanting to learn different things. I do not know, I am just kind of like wanting some variety. Getting some, I do not know, some weirder types of books. But never stop learning.

Edna: Never.

Brett: Like I said, I just talked to my account the other day and he talked about our taxes and how much I am going to owe from last year and had a monster year and I was not used to making that much money so I really was not that prepared. I kind of forgot how to, like you, just shelter some of my tax income and some of that. Now, I am going back and I am just going to try and learn some of that stuff because I feel like I need to know and hire a couple of coaches, or one or two coaches, just to kind of help me through all this. That is cool. Thank you so much for the advice, Edna. It has really been a great show so far.

Touch of Randomness

It is time for a touch of randomness.

Brett: Hey, we love to end every show on a touch of randomness question. We only have time for one question. I do not know, this is going to be super off the cuff, but if you were to parent a child celebrity who would you choose? Who would your child celebrity be that you would parent?

Edna: Taylor Swift.

Brett: Okay. Is there a reason behind that? Good.

Edna: I love what she does and my favorite song is ‘Haters gonna hate hate hate hate.’

Brett: I was not expecting that to be your favorite song.

Edna: It is so true. I know, I love her. I love what she does and I love her music and she is brilliant for a young girl, brilliant.

Brett: That is funny. Actually, my daughter who is 11 years old, her mom got her tickets to the Taylor Swift concert coming in Indianapolis so I am going to have to tell her that. That is so cool.

Edna: Yes.

Brett: Hey, thank you so much, Edna, for being with us today. I know you took the time on your busy schedule.

Edna: Thank you for having me. It was a real pleasure. I love what you guys are doing sharing your knowledge because that is so huge for people. People are looking for a way and we all have a way, right? Like we have done it so now we can share what we have learned and the other thing I keep telling my students is now whatever I teach you, you go teach somebody because that locks it in, right?

Brian: That is right.

Brett: Definitely.

Edna: Yes.

Brett: Definitely. Well, if one of our audience members wants to reach out to you again, can you just really quick, tell us where is the best place?

Edna: First place is training.ednakeep.com. It is a three video series that explains about what I do and then from there I would book a call with me if it is something that interests you in taking it further.

Brett: Awesome. Well, thank you so much, Edna. You guys can find that on our website on simplewholesaling.com/episode109 and that is the wrap, Edna. Appreciate you so much.

Edna: Thank you so much, it was a great call.

Thank you for listening to Simple Wholesaling. If you enjoyed today’s show, please head over to iTunes, give us a rating and leave a review. Be sure to pick up a copy of our free e-book, This Simple Wholesaling System, by joining our community over at www.SimpleWholesaling.com/OurDashSystem.

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