- Introduction to Luke Andrew
- Accumulating experience and how he relates with his clients
- Differences between Rental doors
- Why a good team is an important investment
- Investing right in what you know
- The importance of a good team
- Email: @lukeandrews.us
- Luke’s LinkedIn: https://www.linkedin.com/in/salesandnegotiationcoach/
- Website: https://lukeandrews.teachable.com
- Contact Number: 843-619-3005
- Instagram: https://www.instagram.com/exitstrategiesradioshow/
- FB Page: https://www.facebook.com/exitstrategiessc/
- Youtube: https://www.youtube.com/channel/UCxoSuynJd5c4qQ_eDXLJaZA
- Website: https://www.exitstrategiesradioshow.com
- Linkedin: https://www.linkedin.com/in/cmelette/
- Email @: firstname.lastname@example.org
CORWYN: So good morning, good morning, and good morning guys. Welcome to another fabulous episode of Exit Strategies Radio Show. I’m your host Corwyn J. Melette, broker and owner of Exit Realty Lowcountry group in beautiful, beautiful North Charleston, South Carolina. This is your first time listening to this show, you Sir or Ma’am are in for a treat because our mission here is very, very, very simple. That is to empower our community through financial literacy, and real estate education. We’re legacy building, that is what we do. So, guys, you’ve been with us on an amazing journey, and guys, today, we do not stop. As one of my homeboys likes to tell me: Can’t stop, won’t stop. That’s how we get down. That’s what we do around here. So we’re always elevating, we’re always making progress. We’re always pushing forward. And most importantly, we’re taking you along with us on the journey. So guys, today, we have managed to, you know, again, to get the time of someone who was doing the things in this industry, in this business that many of us endeavor to do. And that is none other than Luke Andrews, real estate investor. Luke, how’re you doing?
LUKE: I’m doing fantastic, man, I appreciate it. How are you?
CORWYN: I am incredible. Thank you so much, thank you so much for taking time out of your busy schedule to be with us today. So Luke, look, I didn’t give our listeners the real skin. But we’re gonna talk about that as we kind of go through. So if you don’t mind, give our listeners, kind of, the elevator speech version of who you are, your company, and what do you do.
LUKE: Sure. So you know, as you talked about, I’m a real estate entrepreneur. And I really kind of have three facets to my business. So I am a real estate agent, I do help people buy and sell homes. I have a real estate team. So I operate as a sales director, essentially, I’ve got twenty-one agents underneath me. So a big portion of my day is recruiting, mentoring, training, you know, kind of answering those quick little got-a-minute questions for them, making sure that they thrive. And then finally, the third aspect is real estate investment, as you talked about, you know, fortunate enough to be in a club of what I call the forty under forty. So I was able to purchase forty investment properties before turning the age of forty. Barely squeaked it in, right before I turned forty, we closed on the fortieth. Now I have sold a few here and there, I’ve kind of traded around but have quite a bit of experience with it and everything from single family to multifamily to fix and flips to flipping apartment buildings and then also starting to venture now until a little bit of Airbnb as well.
CORWYN: So that is a broad swath and you know, we have been having a lot of conversations here on air about, you know, very matter of fact, I think nearly everything you just touched on. So I’m very excited, very anxious to kind of, you know, touch on some of these with you, as someone who actually has done all. You know, sometimes people have only done, you know, one segment of the market, so to speak, as far as investing. Sometimes they’ve done a whole lot, a whole lot of others. So what first drew you– what, what first gave you the bug man, as far as you know, investing in real estate?
LUKE: So from an investing perspective, it started you know, pretty simply how a lot of people probably start you know, my wife and I built our first house in two thousand six. We were young, newly married, we overbuilt for the neighborhood, and you know, we, you know, two thousand eight, two thousand nine happened. And we were in a spot where we were starting to have kids and so we needed a little more space. And we were fortunate enough to be able to carry both notes and be able to keep our first property as a rental because you know, during that time it was very, very inexpensive to upgrade. Everything was on sale, but that also meant that our current house was underwater. We were we would have had to have brought a pretty sizable check to close in order to be able to walk away from it. But we could carry both notes, the market was flooded with a lot of really qualified renters, who just happened to get themselves in a bad spot for a little while, and who needed a place to go. And so we rented that out, we upgraded, that was actually out in Denver, Colorado, and we moved to Kentucky a few years later, kept that rental. And I met somebody here who was also interested in real estate investing, and we just kind of started talking back and forth. And we’re like, hey, you know what, let’s, we need to buy a property together, we got to partner up on this thing. And so we sold the property in Colorado because by that point, marketing kind of shifted a little bit, and I was able to pull a little bit of cash out. And so I’ve got this buddy here, and we decide we’ve identified a neighborhood that we feel is really up and coming. And there’s a spot with, you know, why don’t we go find a little shotgun house, you know, that needs some work, you know, that we can pay thirty thousand dollars in cash for do the work ourselves and just gradually just start building a portfolio. As we were searching every single day, and as luck, fortune, whatever you want to call it. He is at his girlfriend’s parents’ house having dinner. They’ve got some friends over and so they’re talking and they’re like: What do you like to do young man? he’s like: Well, you know, I do this and this for a corporate job but my real passion is real estate investing, I’m looking at buying some properties. And they said, well, interesting enough, they owned a bunch of properties. And they were looking to completely liquidate and retire. So and we were like, Okay, well, let’s buy one or two of them. And they said, No, you gotta buy the whole package, we’re [inaudible] package. So we’re trying to go from buying one property, to all of a sudden, thirteen fall into our lap. It’s one of those things where it’s like, I could analyze the deal. I knew it was a great deal. There was no way in hell, I had enough money to come up to be able to purchase thirteen properties. And so we started asking questions, we went to some people that we knew that had bought properties before, and we had them look at the deal for us to make sure we weren’t crazy. And then just started asking questions like Hey, if you were in this situation, what would you do? What would you do? And we finally got one that said: Well, if I was in your situation, I’d pick up a partner like myself. And I said: Okay, well, that’s interesting. You know, we’re talking about being partners on one, why not be partners with somebody else on thirteen? You know, the number still adds up. Now, the problem was, is that even with bringing in this partner who had all of the contacts, the banks, the lender, you know, the contractors, everything that we needed, we still didn’t have enough for the downpayment, of our fifty percent of the downpayment, which was broken up between the two of us. So really, I only had to come up with twenty-five percent, the downpayment, and my partner, only twenty-five percent, and we still didn’t have enough. And so again, it was like, we keep hitting these roadblocks. But I said, you know, what, if, because we’re going to have to manage these properties, we’re going to have to hire a property manager. What if, instead of hiring a property manager, we bring what we can, you know, our new business partner makes up that difference for the downpayment, we stay fifty-fifty partners, but we manage the property for free on a schedule that says that, you know, our equity will be paid back. So that did a couple of things for us. One, it got us in the game. Yeah. Two, it got us all that property ownership. And three, we learned so much managing those properties, that it’s just the time spent managing has been worth its weight, you know, ten-twenty-X over the years, just by going through and learning that, but it allowed us to get in and be equal partners, and share in the financial upside, without having to bring all of that cash on the front side. Because we just like I said, we flat out didn’t have it. And so at a certain point, you know, we, the plan was that we were going to have that money paid back in about eighteen months, we were actually able to end up doing it in seven, because we increase the rents so much, we turned him over, which brought our you to know, we just accelerated that schedule. So that’s really how we got into it, we kind of fell into this big thing by accident. And then we took thirteen and all of a sudden another package of twenty-seven came in. It’s like okay, well now we’ve built up equity in this, this property over here. And so, no, I’m sorry, fourteen that took us to twenty-seven. But we had built up the equity in the thirteen that we could refinance out of it, we could pull some cash out to actually be able to pay for that fourteen and so now our portfolio doubles we go from thirteen to twenty-seven. And, you know, a year and a half, now it’s not always going to be that easy, and boy there were days where I thought: What in the world did I do here but it has been worth it over time and I’ve not only helped build myself a portfolio and a nest egg and showed my kids a few things. But I’m also– it allows me to better work with investors in my real estate sales business, I’m able to help significantly more investors because I know what I’m doing, I can come at this with some credibility, and I can show you: Yes, you can listen to what I’m saying because I’ve been there and I’ve done it.
CORWYN: And, you know, that’s one of the things, you know, Luke that you know, people miss a, you have the experience, you know, whether it be fortunate, unfortunate, you have the experience of, you know, not only the acquisition but also the management, you know, of the doors, because that’s one of the things that a lot of people are missing. You know, maybe they can, you know, bump funnel their way, if you will, through an acquisition. But what happens after, you know, I sometimes, you know, talk and say this thing about, you know, you see dogs chase cars, all right, when they catch the car, what is the dog gonna do? Dog gonna [inaudible]. So, you know, sometimes we chase after things and have no idea what we’re going to do after we catch them. So you’ve been able to share that experience on the back end, okay, well, this is how you get in and drive the car, so to speak, is impressive, now you are an author. You’ve written books, you know, you share like and thank you so much for everything you share so far, but if you don’t mind, your most recent book, tell listeners a little bit about that.
LUKE: So the most recent one that I have is really geared towards real estate agents and trying to help agents. There’s been just this influx of new agents into the business over the last couple of years, the hot market tends to attract agents that follow along. And the barrier to entry, I don’t know how it is there in South Carolina. But in Kentucky, the barrier to entry to becoming a real estate agent is very, very low. So there’s a lot of just undertrained agents that are out there. And a lot of them didn’t invest a lot of time and money on the front side but ended up flaming out after a couple of years because they just don’t have the guidance. And so what I’ve tried to do is take the six most common mistakes that I’ve seen, not only for myself, but helping new agents in the business, as I mentioned, I lead twenty-one agents that are out there. And so taking those mistakes, and trying to help agents recognize and avoid them on the front side to shorten and flatten that learning curve. And so that’s what I did, I just took these mistakes. And you know, my last couple of books, the first few I wrote, I was selling on Amazon, it was a great little additional revenue stream for me. But as I got to a point where I really wanted to have more impact, and more scale, and actually truly help people, somebody said, and he was like you’re charging this money for your books he was like, but if you’re genuinely interested in helping people, you need to put your money where your mouth is. And I said, okay, why not. So I made my last two books, one on real estate investing. And then one for these agents in the mistakes that they’re making. I made them absolutely free. I made them ebooks only. But they’re absolutely free people can go and download them and do whatever they want with them. And hopefully, there’ll be able to come away with a couple of nuggets out of there, that will help keep them in the business just a little bit longer because that’s all it is. It’s all about longevity and sticking around. You know, there’s this great quote by the actor Kevin Bacon, who you think about it because they’ve mentioned it’s crazy to think he’s been around. But he’s been a movie star. I mean Footloose came out in nineteen eighty-two. It was forty years ago. There’s been making it for forty years. And they said: So what’s the secret to longevity? And he said, and he said there is no secret to longevity, he said longevity is the secret. Sometimes it’s just about hanging on and hanging through tough times. And anything that I can do to help people hang through those tough times. And to shorten that flat and flatten that learning curve for him. I’m going to try to do it in any way I can. So that’s why I wrote these two most recent books.
CORWYN: That’s awesome, man. You know, and it’s interesting that you should that you share that. So I’m going to take part of our conversation today, my man as a degree of, of confirmation of the same, you know, we have to get– we gain experience in what it is that we do. You know, I’ll and I’ll say this briefly, I just recently had a conversation with one of my agents, along with a partner who called me and wanted to run a scenario by me in relation to a prospective investment deal they were looking at. And in turn in my [inaudible], you know, in my somewhat immediate response, I just kind of went rattling and just because that’s what we do. I mean, you know it. So you just start rattling it all off and I’m rattling this thing off and the partners. It just you know, when I got to the end of it, it’s like: Look, you should be a speaker or something, you should write a book like all this stuff, right? Because we go through that. So let’s talk about so the forty houses, man, I mean, you know, that’s it. First of all, that’s, that’s impressive as a single, you know, as, as an investor, you know, and as you rack up and accumulate doors and just your strategy, you know, some of this stuff, just kind of, as you said, just fell in your lap. But you’ve done– you said, Everything you’ve done single doors, you’ve done multifamily, small Apartment, apartment buildings. So let’s what– what is your preference, like, if you had to go back and say, Look, if I can have all of this kind of property, all of that kind of property, what kind of property would that be? And why?
LUKE: You know, it’s pretty simple for me, I mean, I, in some of it is, is in relation just to my market and the way that it works, but I love that small little single-family houses, you know, like, two to three bed, one to two bath in an in a very just kind of blue, blue-collar area, you know, people who we have, we have a lot of warehouses and factory work here. And so those blue collar those, as I said, two to three beds, I don’t like anything significantly larger, because it, you know, tends to attract more people, which you know, tends to have more wear and tear. You know, the multifamily that we’ve got here, unless you’re able to get into like big multifamily, like twelve, twenty-four, thirty-six units. You know, that the kind of four and six and eight plexes that we have around here. The numbers just don’t really, they just don’t really work for what I’m looking for, they’re not appreciating as much, the rents aren’t rising quite as much, and they tend to if, if they do have a decent purchase price in relation to the rents, they’ve got a lot of deferred maintenance that’s on them. And so I’m looking for stuff, I mean, honestly, pre-twenty-twenty, so kind of the two thousand eighteen, two thousand nineteen. I can find a really good rent-ready house that I wouldn’t have to put a dime into for seventy-thousand, that was going to rent for seven fifty a month. And then, give me all those, I can get. But, you know, now we’re kind of looking at, you know, the market is appreciated significantly, so now we’re looking at, like, a hundred and fifteen thousand, that’s going to rent for nine ninety-five a month, a thousand, somewhere right in there. And again, I still really liked those, they were appreciating significantly faster than these fourplexes that I’m finding. And again, the fourplexes that are around here, they just tend to need a lot of repairs, and there’s a lot that’s going on with them, that the risk that just isn’t worth it for me. So for me, I like it very, very basic. And just give me those small little single families that I can, I can just keep turning over and just turn one into two, two and four, four to eight and just build the portfolio that way.
CORWYN: So, you know, one of the things that, you know, that we’ve been kind of working on listeners through has been, you know, that, you know, where do you start, and, you know, all that stuff. So thank you for sharing kind of what your purposes are, you know because we have some people that are really focused on, you know, like, you are like, you know, single door, you know, whether it’s, you know, a single detached door, some prefer attached units, because obviously, you know, with, you know, condo a townhouse, the, you know, the maintenance sometimes is a little bit less, you got less yard to worry about if any yard to worry about, you know, some of the other expenses and stuff kind of, you know, get absorbed in other places. So, you know, we stress to our people, number one, to identify, what is their preference as quickly as possible and sometimes they don’t know until they experience it, you buy a detached door and find out well, I got to put a roof on I got to do this, I got to do all this other stuff. I don’t want that. So maybe the next property I moved myself to I transitioned out of this into that, because you made mention of some of the properties that you purchased, you have moved on. So you have sold those properties and acquired others. So let me ask you this, we recently we talked about the stock exchange versus 1031. Are you leveraging investment tools such as that or those types of strategies in your business as well?
LUKE: We are, you know, where it’s necessary and appropriate. You know, we pride ourselves on being pretty, pretty creative, and kind of outside of the box thinking, which kind of led us to, you know, how did– how were we able to come up with thirteen doors, to begin with. And so that strategy, held strong and it led us in the right direction on the front side. And so we’ve kind of stuck with that. In certain instances, yes, 1031 does work. You know, sometimes you get burnt on a few 1031s every now and then where you don’t identify enough properties or you don’t to secure them the right way, and so you’re under contract to sell yours. And something falls through with the deal that you’re going to purchase, you end up, eating some taxes. But it’s, it’s all okay, we work through and figure it out but again, we’re, we’re open to just about anything if it makes sense, and it meets our goals, visions, and values, and that’s the thing, we’re– my partner and me, we are trying to provide quality and affordable housing that’s out there, where we can still turn a profit and you know, you know, experience and cash flow along with some appreciation, but still making sure that we’re providing quality and affordable housing for folks out there that need it.
CORWYN: And that itself, you know, is a mission. So, so thank you for sharing that piece as well. You know, before we get too far, you know, tell listeners, how can you get in contact with where they find you at? You know, how can they reach you if they have questions or, you know, have a need or what happened?
LUKE: Sure, you know, you can find me on social: Luke Andrews, R-E.for Luke Andrews’ real estate, I tell people to, oh, you can email me at any point, @lukeandrews.us, I answer all of my own emails, I don’t have a VA or anything doing that anybody that just wants to talk real estate if it’s about you know if it’s an agent that wants to talk through different sales strategies if it’s an investor that wants to talk through some things, I love talking about this stuff. And so, I love doing those things, they can reach out anytime, or if it’s an agent or an investor who is interested, like in some of the books that you talked about some of the free stuff, if you’re an investor, you can go to 10investormistakes.com, and that’s the number 10. So one zero investormistakes.com. Or if you’re an agent, 6agentmistakes.com. And again, that’s the number six, but 10investormistakes.com, 6agent mistakes.com, anybody can go out there, they can take a look at those books. And then that’ll give them an opportunity as well, if they wanted to, they can join my email list that way, whatever they want. As I said, I just love talking to people about this, the words you use are fantastic. I have a mission here. And I’m just trying to have this scale in this impact. So that’s why I’ve been going on these shows, that’s why I’m trying to get on more stages, just get on just share a message and try to help in any way I can.
CORWYN: Well, man, you’ve provided a wealth of information to our listeners. So again, thank you, thank you, thank you so much for that. Because you know sometimes man we just get so caught up in just this one little piece that we miss all the other things, real estate investing or any type of investing, it’s not one size fits. If it was a science, if it was yellow and green and yellow and blue make green then to be blunt about it, you’d have all the green that you could ever want, you know I’m saying, but it is that it is doors and people that make money in real estate or this and that that makes money and whatever else that another thing is and you know our listeners the people who are watching or and or listening to this show or who may be coming back with their pen and paper to make notes they have to understand and figure out what is going to work for them. Your strategy, what has worked for you is your strategy, it works, but the people have to work it has to be the right model and so forth for them. Now if you purchased you say so you really like single doors you know which is interesting because a lot of people from a mindset for thought process perspective and that works in the market where you are when you invest some people maybe somewhere else maybe need to focus on more doors, small apartment buildings, eight plexes or larger so that may work as well. And you educate people in your through your books and everything as far as how to overcome one the whole mistakes I went to the website man, for our listener’s guys that’s a quick download 10investormistakes.com. You know quickly download that book ebook and get a crack in there
LUKE: A quick disclaimer on that. If you are part of the grammar police, it’s probably not the right spot for you. I’m a simple kid from Kentucky. I write like I talk so it’s what you’re hearing right now as you’re gonna get in this book. So if you see misplaced commas or paragraph structure and it’s gonna kind of give you the twitches, and my wife is one of those people. It’s probably not the right spot for you. But, you know, if you’re just looking for just kind of some real talk, it’s a good place to go.
CORWYN: That is priceless. I love the disclaimer, man I love the disclaimer because that’s what it’s about. So you know, like, you guys, you know Luke is delivering this message. You know, just like he’s delivering that book just like he’s delivering his message, which is full frontal, let’s go get it. This is what it is. And let’s make it happen. So Luke, as we kind of get to the end of today’s show, what is, you know, what is a key takeaway, a key nugget that you know you want to share with our listeners, something they can take, quote, unquote, [inaudible], and make a difference in their trajectory and their outcome as they seek to build their legacy.
LUKE: Well, let me ask you, do you want a nugget for investors? Or do you want a nugget for agents? Which, one do you want to do?
CORWYN: I’ll tell you what Luke, in this forum, we are all in. So give us both. Let’s start with investors.
LUKE: All right. So the investor, I think it’s it’s a two-pronged approach. One, you need to remember that you always make your money in real estate investing when you buy, not when you sell. So it’s about that deal that you get, you can always sell, you can wait for the market to appreciate, and you can always sell for more, but you can never change what you buy for. And then number two is making sure that you have a good solid team in place, having a real estate professional there on the front side, that can guide you through that, you know, having your trades in place, your property managers, your title companies, your attorneys, or CPAs, your attorney, all of those people, you got to make sure that you’ve got a good team in place that’s there working for you. Now, from an agent perspective, you know, with the market shifting, yours is probably shifting similarly to ours. And investors are starting to heat up a little bit. They’ve been kind of on the sidelines for the last couple of years but it’s you know, the market slowed down just slightly. And so they’re kind of coming out of the woodwork. What I told my agents one, I think all my agents need to be investing in real estate or at least strongly considering it, we don’t have a true retirement plan here and invest in something you know, if it is good enough for a fortune five hundred CEO to take a big part of their compensation and company stock because that’s what they work in and what they know, it is good enough for you to go out and buy these properties. So I think you need to be investing in that. And even if you’re not, even if you think that it’s there’s only a slight chance you can get it done. If you set a goal to buy an investment property this year, I guarantee that you’re going to sell at least three more properties this year, you want to add three transactions to your bottom line at the end of the year. And the reason is if you’re committed to buying a property this year, you’re going to be out there searching on a regular basis. Yeah, which means you are going to come across a lot of deals and a lot of them are going to be really good deals, but they don’t quite fit into what you’re looking for, you know, maybe it’s priced slightly out of your reach, you know, maybe it’s only running at a seven cap and you needed a nine to meet your criteria. Those are still great deals. And then that allows you to go out and present those deals to investors. You know, my agents ask me all the time, how do I get more investor clients? I said that’s easy. You go out and find deals, you don’t worry about finding the investor, find the investment, if you find the investment, the investors are easy if it makes money they’re coming through. So if you set a goal to go out and buy a real estate, a rental property this year, you are going to add at least three transactions because you’re going to come across a minimum of three that don’t quite meet your criteria that you’re going to be able to sell to somebody else and just going to make somebody else very, very happy.
CORWYN: That man look, you just, you echoed what I say so oftentimes in my own office with our own group, man, because that’s what it’s about, you got to focus on this piece of it. And we, you know, my running joke, which is a reality in our industry, is that there is no retirement plan. There are no retirement parties for realtors, and in turn, you know most I’m going to go follow that table, try to get that one last closing in. And that’s to want to take a moment of glory. So look, I appreciate you sharing those key takeaways. So, Luke, I want to thank you from the bottom of my heart man for being here on the show. You know, taking your time again to drop such awesome information man, it is very inspirational, motivational, and most importantly, it is accurate information. So thank you so much for that.
LUKE: Yeah, it’s been a ton of fun. I really appreciate you having me on.
CORWYN: You’re welcome, you’re welcome. So for our listeners, guys, look. Y’all take this information, y’all go back. Go to our website, Exit Strategy Radio Show, y’all make sure y’all pull this episode, makes you get Luke’s contact information, and most importantly, make sure that you write the notes for the questions that you may have. Reach out, so we can make sure that Luke gets those questions answered for you and see what he can do to help you. What I always say to you guys, and you know what I say, you know how I say it, but I want you to understand the most important today that I really, really, really, really, really really mean it, every time I say it, which is I love you, I love you, I love you and we gonna see you guys out there in those streets.