How to Use the Same $70,000 to Buy 7 Single Family Rentals Long Distance with Alex Felice

Brittany Henderson: 00:00

I'm Neil and I'm Brittany.

Neil Henderson: 00:01

We are a family on a journey towards financial and location independence. Each week we interview successful real estate entrepreneurs about their chosen investment strategy, and rate it based on how much money it took to get started, how long it took to educate themselves, how passive it is, and whether or not they could do it from anywhere in the world.

Brittany Henderson: 00:19

Welcome to the road to family freedom.

Neil Henderson: 00:21

In Episode Two, we sit down with our friend Alex felice, who's well on his way to financial freedom building a portfolio of single family homes.

Brittany Henderson: 00:29

You can find the show on iTunes, SoundCloud, Stitcher and Google Play or wherever you listen to podcast. All right, and I thought of us, let's hit the road to family freedom.

Neil Henderson: 00:47

So Alex, thanks for joining us, man.

Alex Felice: 00:50

Thank you for having me. Very excited to be here.

Neil Henderson: 00:52

We're excited to have you.

Brittany Henderson: 00:53

Yeah.

Neil Henderson: 00:54

So tell us the story of how you found your way into real estate.

Alex Felice: 00:59

You know, I got sick of being broke. Really, that's the crux of it. I think most people go through American life somewhere in the in the realm of I'm between trying to figure out what I want to do with my life. And what do I want to spend my next paycheck on? And you get wrapped up into that cycle? And it's, it can be, you know, well, you're a good example, you wake up at 40 and a little bit, and you're like, I don't want to do this anymore. How can I stop? And the earlier you can ask that question, how can I retire early, you can ask that question, the better off and so I just started moving towards ways that would get me to retire early in real estate man, it really seemed like the way to go. And I'm glad I found it out. Because I am in fact, correct. Real estate is the way to go. Or as far as I am concerned, I wanted to retire. I was 29. Or so when I figured this out and then said how can I? How can I do this fairly quickly. And real estate will really, you know, on the surface, it's it's far more lucrative than it seems at first. And at first, it seems pretty easy. And pretty, pretty limited. So you start diving in and it really take it really took over?

Brittany Henderson: 02:07

Yeah. So retirement, that's your desk. That's your destination? Are you there yet?

Alex Felice: 02:14

Well, retirement, when I said retirement, what I really mean was I hated my job. And I wanted not to have to worry about what the next job what I hated to. So really what I wanted wasn't retirement as much as well, what you call freedom, flexibility, I wanted to tell any boss that gave me grief, to go pound sand at a moment's notice and not have to worry about, you know, my responsibilities. So in some ways, Brittany, I, I am there because I have enough money where I can look at my boss and say, I don't ever need you again. But I also but I can't do that. And then also worry about lifestyle inflation, actual inflation of costs, my health is going to become a higher burden of income as time goes on. And I want to be able to grow. So I still work. But from a very short term perspective. Are I really, I could retire now.

Brittany Henderson: 03:06

Very well. So that's kind of the ultimate goal is is to get to where you're you are ready to retire fully. And,

Alex Felice: 03:13

yeah, yeah. Well, I don't know that I think, you know, when I started, I think a lot of guys in real estate have this deal where they're like, I want to get 10 houses and retire. And that's how I started. And that seems to be a really common deal. Like, I can get 10 houses paid off, then I can retire and you can. And then what happened was, it didn't take long before, you know, I got seven. In a No, I said I'll get 10 years to get 10 houses and retire. And it really it took like two and a half years. And I got seven when way faster. And I was like, I don't want to retire. I want to capitalize on my talents. So in some ways, my ambition to retire, unlock a different ambition that now wants me to succeed are are beyond any than I had originally hoped. And I think I hope that most people who enter real estate have that problem where they go, hey, how can I make retirement for myself turns into how can I really satisfy my ambitions and do something much bigger than I had planned?

Neil Henderson: 04:03

So it sounds to me like what you're describing is kind of like you started off with one sort of milestone that you were headed towards. And then you got like you thought that was going to take you 10 years to get there. And then it took you two years to get 70% of the way there and suddenly like, Oh, this is this is maybe easier than I thought or maybe this can be done bigger than I thought. And now that opened up a new milestone.

Alex Felice: 04:28

Both exactly correct. It's easier than I thought. Now, maybe you know, I have this debate with a friend of mine. He always tells me how hard real estate is. And I always say well, not for me. So I don't know how hard real estate is I? It takes a certain level of tenacity, because it's a long term play. And so yeah, it's certainly easier than I had originally anticipated. It seems much harder than it really is. That's for sure. Real Estate. If you're just getting started and you're just learning on it, or you maybe have a dealer or you're trying to get your first deal, man. It's see way harder than it really is. You look back you're like I mean, high school seems hard when you're in middle school. And then you're like, really that's a that's a challenge. You know, nobody brags about graduating high school, no offense to some people. But the other one, so not only was it easier, my goals with too small and man, you know that as a group, if you read any motivational speakers or you read any really successful people always tell you set your goals bigger. And that is a mistake that I have actually made. I think most people do, don't set your goals too, too small because you don't, you might hit them. Right, that's really the so goal setting as a talent is, is really something that's important to flesh out because you goes too high. You can't get anywhere, it goes too short, you might get there. And then you're, you know, sitting around on a Sunday, I wrote an article about this, I call it finding your close carrot, right, you got to find if somebody is dangling a carrot, if you're in a road race and somebody standing dangling a carrot 20 miles ahead of you, you can even smell it, you're not getting excited. But if they're dangling 10 feet ahead of you, you might sprint that last or 50 feet, you might sprint that last bit. So I find a guy who is doing just a bit better than me, or that's what everybody should do find somebody that you want to find somebody that has 600 million in real estate, and someone's got five houses, and you're trying to get your first they're closed carry, you can see the heels of their shoes, you can catch up to

Neil Henderson: 06:21

Yeah, a breakthrough I made recently is I stopped really setting one year, five year goals, I still have them. But I started set setting 12 week goals. Interesting where you know, and it's so it's right up there, it's constantly it's a constant companion, it's looking staring me right in the face, I can't be sitting there going, you know, all I can take a break. And you know, I can get there, you know, I can work a little harder next month, because it's always it's right there. And then

Brittany Henderson: 06:53

we'll have the longer call, I do have the shorter term goals

Neil Henderson: 06:57

and interim goals to get you there

Brittany Henderson: 06:58

to push that accomplishment energy so that you know, and those those goals are 90 day goals. If you want to go with the Todd Herman 90 day year sort of piece there, they are still ones that feel hard, like you're saying, they're not like, Oh, I'm gonna immediately get this, they're still pushing, but they're just ones that you're gonna get in a quicker time period, or the goal is to get them in a quicker time period. And then you build that accomplishment energy so that those one year two year five year goals start to be feel even more doable. Because you've done all these little parts. It's not just like, I have this goal. And this is all the things I need to do. You're kind of breaking it down into little bits and saying this is I'm doing this first.

Alex Felice: 07:44

Yeah, for sure. A regression analysis essentially is you know, get the one year goal and then break it into 490 day goals. And they should all be they shouldn't match up perfectly. It should be they should be a little too hard. Like you're saying and that snowball effect really matters. You know, this is a business I tell me all the time, small wins, small wins matter. And so you just need that, man. I had a good week, man. I had a good week. Well, next thing you know. 12 Yeah. 12 good weeks. Well, productive weeks. And breakthroughs happen?

Neil Henderson: 08:13

Yeah. All right. So before we before we dig in any more, I want to make sure that we have a clear understanding of what your what your current real estate Empire looks like.

Alex Felice: 08:24

Well, that is I don't know, if we have like a get it all out in an hour. I mean, so much. I started by buying single family homes, as rentals. I knew real, real early on that rentals was the way to go for me not flips. So I knew I was playing a little bit longer game, and I didn't have that much money. So I do the bur method that's buy rehab, rent, refinance, repeat. And so what I what I essentially do is I spent a bunch of years saving up capital, and I can buy a house and rehab it with my cash. And then I go and I create the 20% equity. And so then I go to put a loan on it, and they give me it's 80% or 75% of the loan to value. But it's 100% of my funds. And so I've done that a bunch of times and gotten so good at it now where I consult for other people who want to do it. And so if you want to buy a developer, and you have the money, but you really don't have the experience or the conus to go out and drop 70 grand all at once. Maybe it's new for you, maybe it's just you're a bit risk averse. What I do is I handhold and help people to buy a house just like I do. I just did one for a guy I basically made him 20 grand in equity plus cash flow. I turn it all over. He's got a property manager I helped him install and a realtor and I took a small fee. But essentially that's that's kind of what I'm working on now. In terms of day to day, and then we're really looking to transition and get out of single family and move to large Commercial, excuse me, medium, very medium commercial 3040 units in the next gotcha. Six months or so. Gotcha. Okay, so

Neil Henderson: 10:07

let me make sure that I've got this like clear for everyone. for newbies that are maybe listening you are you have you saved up a chunk of cash, let's call it 70 grand. And you're able to find a distressed single family home somewhere and buy it for, let's say, $50,000. But it needs 30. What's that?

Alex Felice: 10:28

Yeah, it'd be more like we'll pay 35 grand and put it or say 30 grand, and we'll put 35 in rehab. Or actually, to be fair, what you said was on the last one, I did pay 55. And we only did nine grand and repair. Okay, so

Neil Henderson: 10:44

it didn't, it didn't need a lot of work. But once you're done repairing it, it's now it now appraises for what?

Alex Felice: 10:52

Yeah, so the one we just did will be all in pr 65. And it'll appraise for 90. So I make 35 grand in equity, you create the equity, you force the appreciate thin air like magic baby.

Neil Henderson: 11:05

And then you're able to then go to a bank and request long term financing on it correct?

Alex Felice: 11:12

Yes, I can go to a bank and get a Fannie Freddie under it loan. That's the standard mortgage that most people know a 30 year fixed low interest rate, mortgage, and they'll put it in my personal name. And they will do that for a low cost. And the only thing I'll tell people is make sure that you have your financing lined up before you purchase the house, don't buy the house, then rehab it, then get stuck and find out you can't do the loan. The loans are fairly easy to get. But they do have you know, they're not giving them out willy nilly, they're gonna do pretty significant underwriting. So that's, that's one big thing that people get jammed up in this program. But yeah, that's essentially what I do, I go to the bank and say the house is worth 90 grand, right? You'll give me 75 for it. And I've done that, where they give me 75 for a house that I paid 65 for, I still have the equity and it's still cash flows. Pretty good. I mean, there's testament to how amazing America is.

Neil Henderson: 12:06

And the cash flow is, you know, just give us an average, sort of what you're looking at per door.

Alex Felice: 12:12

900 on average, and I try to go I'm trying to raise that average. But that's the top of the line rents for the kind of properties I'm buying. So I'll be all in for 65 of the rent of 950.

Brittany Henderson: 12:24

Where are you? Where are you located? Because that makes a big difference. I mean, here in Las Vegas and $900 rent is in the data.

Alex Felice: 12:34

On Windows? Yeah, no, that's, that's a good question. Actually, um, I buy in a small town in North Carolina. It's a military town, I get a good stability. I don't necessarily rent all military by any means. But the area crew does afford itself some increased stability because of the base being so close. Yeah, I mean, look, not all markets work. I mean, people love to try to make biggest work for rentals, but you can't spend $150,000 and get an 850 a month, income and rent. You just can't. It's just I mean, you can but it's gonna be a sad day or every egg. I love paycheck. I love when the rents come in, right? I don't want to have to the rents come in, and it's like, well, I was negative. That's not fun. So the return on the return investment is important. But people forget that there's a return on equity is a return on asset, right? There's more than just Hey, you know, your cash on cash. If you if you buy a house in Las Vegas, $450,000. And you make 100 bucks a month. And it's 100. We'll say the 100%. Finance, the return on investment is infinite. And you say, well, that's really good. Well, it's the same as mine, mine is infinite. There's not the same thing. Because the return on cash spent is different. And you know that that makes a big difference. So what you asked, which is that what market does this work in? Well works in a lot of them, but not all equally. If

Neil Henderson: 13:51

you're making you're charging 950 909 50 and rent per month, correct? Yeah. And you're after all your expenses, your mortgage, everything like what do you cashflow?

Alex Felice: 14:03

When you do underwriting for these everyone's gonna tell you to underwrite really conservatively. So they're gonna tell you building 5% cap x building 5% 8%, meaning build in 8% for vacancy, I do all these things. But, you know, I haven't had vacancy and I'm gonna how long not against all seven properties, I mean, not not more than 10 days. The new one we just renovated we had rented in six days. I mean, I don't have vacancy. So I account for that when I do my underwriting, but my real expense ratio is has been closed at about 41%. Very low. And since the one thing that I do, which costs me a little bit is I take higher interest rate loans in lieu of low cost loans, or low points rather. And so I'll take a 5.75 mortgage instead of a 5% mortgage, but it would cost but I don't have to put out 2200 bucks in downpayment,

Brittany Henderson: 14:57

okay, okay, so you're not having to put as much in Initial,

Alex Felice: 15:01

right, so I'll get more of my cash back. Now, when I do the cash, I'll get more out, it'd be less cost alone, but I'll have to pay a higher rate. Well, you know, the devils in the details, the higher rate half a percent or, or 75 basis points on 60 grand is like 10 bucks, I've done the math. So we're 20 bucks. So really, I get the 20 $600 at 20 bucks a month, the payback period is so long that it makes sense, get my money back now and go reinvest it and pay a higher rate. So that's something that people you know, you got to really make sure if you're buying a house, that's $200,000, you might want to take a lower rate, gotcha. cost, the cost of loans don't go up as much. Whereas the interest rate does affect the payments more as cost goes up. Okay, so

Neil Henderson: 15:45

once you decided that single family homes, single family rentals was kind of the way you wanted to get started the way you wanted to go. How did you go about getting yourself educated on on executing on that niche?

Alex Felice: 16:00

education? You know, education is the most important thing you can do, by far, hands down here. So that's a good question. The way I started was I started listening to that BiggerPockets podcast. I don't know how I stumbled across it. But you know, I was commuting to college, three days a week, 45 minutes, and I popped that BiggerPockets podcast in three days a week, or better and, and I got through all of them in a few months, and I bought a house. And I felt confident to do so the education for this business is the education ramp up is high. If you're just starting out, and you're listening to podcasts, and you want to get into real estate, and you have two, three months education on your belt, you got a long way to go. I mean, that's the fact of it. But once you can get into a community, you can meet other people that are doing it, you find some people that can that can mentor you and show you the ropes a little bit. And you can you can spend a real good time, Real Estate's a big field. And there's a lot of complex parts and they're moving over a 30 year timescale. And so you gotta have a good grasp of the material before you can really feel competent thrown around. I mean, $70,000 is an extremely large amount of money for me. You don't want to go ahead and say, No, please, please.

Brittany Henderson: 17:20

I'm just gonna say you said community and mentors, and I just curious where you've where you found that for yourself?

Alex Felice: 17:26

Well, I'm a social guy, if you're an introvert, this is something you're gonna, it's gonna take something that's gonna take a little more diligence to work. But it's important. If you're an extrovert, it might be a little bit easier. I create my network in many ways I use it BiggerPockets has a good forum, Facebook, even Twitter, right? You can find people that are into real estate, and then you just find them. meetup.com is a great one, you find people that are local, and you go and get in front of their face, you make friends, you ask how they did it. podcasts are another great one, this exactly what we're doing, listening to somebody tell their story that's just a little bit ahead of you. You'd be surprised somebody listens to this. They're like, Man, these guys know what they're talking about. Reach out to Neal, reach out to me reach out to Brittany and say, you know, can you give me a little bit more involved explanation for some things, and that that really works? You know, when people reach out and they'll help you? And then so education networking are two things that I've been harping on for years. And those are, those are big, it takes a big education ramp up time, but, man, it is worth it.

Neil Henderson: 18:23

How long would you say that you spent getting educated before you bought your first house

Alex Felice: 18:27

longer than most. But I have a base knowledge and information, base knowledge of this material that far surpasses most of my peers because of it, and it serves me quite well. I picked up the BiggerPockets podcast until 14 I bought it moved into my first house hack in eight months. So in the grand scheme of things eight months doesn't sound like that much if you're antsy if you're listening this right now and you're antsy to buy one of the next few weeks pace yourself my friend but but and then but so that was 14 to eight months. Well then it took me another two years to buy my first rental wasn't till 2016 that I bought a rental now. Well now it's because an 18 and I got seven.

Brittany Henderson: 19:06

What does house hack mean?

Alex Felice: 19:08

Oh, excuse me. Yeah, great question. House hack just means what I did was I bought a foreclosure out, I could move into house hacking, they do that they use that term in a few different ways basically means you're living in a house that you're somehow creating an investment out of so either buy a foreclosure you move in and then you fix it as you live in it, which is kind of what we did. And then instead of selling it, I rented it but some people do fix and flips that while they live in it. Some people do I have a friend that owns a like a six bedroom house in Las Vegas. It's not you know, super nice, but it's got a lot of bedrooms and so he owns it, but then he rents out five bedrooms. So that's what we would be considered a house hack where he's like my mortgage is 900 bucks, but I make 2500 in rental income and a house that I live in. That's fantastic. Your primary residence is really not a good investment. It's a terrible way to go on a on for a day about this. But basically it's a it's a really it's it can be trap in many ways. And so if you can find a way to make your primary residence make money besides passive appreciation, that's that can help. And it helped me out tremendously. We pay I think I had three grand. I moved in this foreclosure This is back in 2014. It was a little bit easier to do it back then than it is now. But we got a foreclosure that we can move in it was moving ready that right there was rare. We moved in with FHA, we put three grand down, I paid 54 and a half $1,000 1800 square feet, my luxurious, beautiful high maintenance wife, she was fine with it. So I knew we were in good shape. 18 months later to praise for like 115 cash out a bunch of, well, some cash not as much as I should, I was still scared of the debt. So I cashed out a little bit. And my years, years and years, you're saving. I still another two years of saving, and that's when we bought the rental.

Brittany Henderson: 20:50

How long have you been saving up when you started? Was that? are you saving up for other stuff? And then you just sort of decided to put it towards real estate? No,

Alex Felice: 20:58

I was terrible with money. I was irresponsible, short sighted and, well, America, I was living week to week for a long time, and had a high cost of living. You know, I was had no assets but had a $30,000 car, which is very common. And so No, I was not saving any money until I was 30. I was I was living I was living the dream. I was making the local bars a lot of money. And so No, I won't. I had a really bad experience in my life that I know. Maybe shape up. I said, I gotta get out, I gotta get out of this. I gotta get out of this trap. So I sold my car, I bought a beater that I got a pair of shoes that cost more than carded. And so I bought a beater and I started saving every little Penny i can i think that was around 2012 or 11. So it. So by talking about the house six years, it was five years of saving, and the cash out about 20 grand in refinance money of that of that house. So like I did it the hard way. And I did it the long way.

Neil Henderson: 22:03

So let me sort of get get a feel if I understand you correctly, you saved it took you how long to save the three grand downpayment for your first house hack.

Alex Felice: 22:13

when I really started cranking out the savings, I was probably getting 500 bucks a month or something. So three grand 3500 bucks, not that much. By the time I bought the house, I had quite a bit more than 3500 bucks.

Neil Henderson: 22:24

Okay. But that's how you were able to get get a government loan, veterans FHA loan,

Alex Felice: 22:30

what's on it better than anybody get FHA? Okay, that's three half percent down,

Neil Henderson: 22:35

but they let you do three and a half percent down instead of 20%. down?

Alex Felice: 22:38

Correct. And that's available to a lot of people, but you have to move in. Yeah. Yeah. And that was tough to find a foreclosure that you can move in. You know, because they don't want to finance it, if it's a complete dump. So, you know, but that was me and my wife, you know, she was on there everyday looking at houses trying to find, you know, trying to help me source source good deals. And so it took a little while, but you know, you got to save money, if you're not saving money, you got to start right now you have to because the opportunity is gonna come to you one day, and it's going to be now. And it's going to require some capital. And it might require a lot, and it might not require a lot. But if you don't have enough, you don't get to participate. So when the deal comes along, it's like, Hey, you need three grand for this deal? Well, why don't you have three grand, right? Because I'm not saying that three grand isn't a lot of money, or that it's not that everybody should have it. I just mean, if you want to do this business, you got to start preparing for the inevitable opportunity that's gonna come to you, you need to start preparing right now, you don't know what that opportunity to look like. But you're not gonna want to miss out on the time. And so he is prepared as possible so you can get the opportunities that are right for you when they show up.

Neil Henderson: 23:45

So how do you? How do you finance your deals now?

Alex Felice: 23:50

I pay cash, all cash upfront, pay for the rehab in cash, and then I refinance all that same money back out the same money that I'm spending the house now is the same money that I spent on that, that house until the 16. I've my nest egg hasn't, you just keep rolling it over? The most efficient 70 grand that's ever been ever been exist. So you don't need that you don't need cash for that you could do what I do with a loan, right? If I bought if I borrowed 70 grand on a house, rehabbed it, rented it out, got a loan for 70 grand paid the first guy back and then just left with the equity and the cash flow network too. So you don't need this. What I've done is proof that you don't need money to do it. I just did it the hard way. That being said, you should still be saving money. So if you had your funds, and you could borrow money, you could do two at a time. So it's just testament, you always got to be stuck on capital. Cool. All right. So

Brittany Henderson: 24:39

let's, one of the things that we're going to talk a lot about on this podcast as we move forward is time because that's one of sort of our big goals is to free up some time for ourselves and for spending time with our family and different real estate strategies can really take a different amount of time. So how much time do you do you spend a week on real estate and not just the like investing, you know, finding new things, but taking care of what you currently have.

Alex Felice: 25:10

Yeah, I'm gonna give you a maybe an answer you don't want to hear a lot. And I'll be really, really clear how much of this requires My time is very little. Like you said, How much does it require to maintain, I have to worry about one person, I property manager to maintain the six house to make sure the rents come in, because he does. Really that's the, that's the relationship that matters most. Yeah, your property manager because he maintains the tenants, he gets the tenants, he takes care of the leases, he takes care of income, and it takes care of expenses. So if you can manage him to do a good job, all you have to do is worry about rent. And so that's what I've done. But really what happens is, and I really want to encourage people here, like if you just want to retire, this will work. But you may find like I have that you unlock a ambition inside you where my goal now is not to spend as little amount of time on this as possible. My goal is to spend as absolute much amount of time on this as possible. And not because your mindset changes, right? I mean, what you guys want is the freedom to have this. So you don't have to spend all your 40 hour week work week taking care of all these other problems. And so what that what's happened for me is, I focus so much time into this, that it's grown to a point where I don't need the job, like you, which is what your goal is, well, then once you don't need the job, then I went and found a job that is casual enough that it's an I enjoyed it. Right? I say like make enough money in this real estate things where you can afford to find a job you like.

Brittany Henderson: 26:39

Yeah, I mean, and Neil and I are definitely not looking to just never do anything ever again. And, and. But it's really just being able to choose when and what and you know what that looks like so that we can have that passion rather than the, you know, drudgery of a nine to five sort of situation

Alex Felice: 27:00

100%. And so I just wanted to give a little bit clearer answer where, yeah, it doesn't take me any time to do this. But that's not a good way. That's not the way I choose to look at it. Because when I choose to look at it is like you said, I want to I want to I want to spend my time, most efficiently and on things that I like, which is essentially what you're what you're looking for, it's given me enough where the requirements are really low. And that really is, I mean, it's easier than I thought if you can get six, seven houses, you get a good property manager and you do want to retire if I want to go to the Mediterranean for three months. I can, no problem. I can send two emails a week to my property management staff and stay on top of them and not stay on top and just say Hey, man, thanks for taking such good care of my, my business like, you know, he's a he's a superstar. And so spend your time trying to find good people and implement good systems. And man it goes, it turns into easy mode to the point where you're like, it's so easy. And you go, oh, how can I make this harder, but I tried some new challenge. And so really, that's the goal is like, hey, make this so easy that you'd want to you have nothing but hard challenges to chase for the fun of it. Gotcha.

Neil Henderson: 28:06

So let me let me just sort of recount what you're saying is that you would say managing the sink six single family homes right now is very low maintenance is very, you know, it's almost nothing. But it what it opened up for you was now you want to build more of an empire.

Alex Felice: 28:24

It gave me so much freedom. Yeah. It gave me so much freedom so quick. I couldn't believe that. It's like, what do you spend your time with? I mean, look, I've I've done it, where I've sat around for six months, I quit my job already. Last two years ago, I sat around for six months. And I was like, this sucks. It just sucks. Because you know what all your friends are at work. What you really need to do, and that's why I started my blog. I'm like, I need to make some other people rich. So I have people to hang out with during the day. But yeah, this will cause so much freedom that you you end up you know, taking that freedom and re and then reinvesting it. Yeah, I literally could, I could probably Roderick, if I said, Hey, man, I'm gonna take, I'm gonna take a year off, I'm gonna shut the business down. And I'm just gonna maintain, I could probably do it on. I could probably do it on one email a week and one phone call a month. I mean, that's but but again, that's a testament to him, he's a superstar. Right? If you if you think you're gonna self manage this business. Now that's, you need to learn how to game you got to get out of that right away. You don't know self manage your tenants, you know, everything is on cruise control as much as possible.

Neil Henderson: 29:24

And so that sort of brings up you know, you mentioned systems and things like that. Are there any aside from the property management? Are there any systems that you have developed that allow you to kind of leverage your time? Or do you or have you found a need for it? Yeah.

Alex Felice: 29:39

Yeah, not so much. Really, the biggest system that I've implemented is hiring good people, and knowing how to find good people, and that's really abstract, Neil, and I know it's not hard to, that's a hard one to teach. But that really is if you can find great people. I mean, just find great people, make them fall in love either, and then ride their coattails. That is the key to success, my friend is to get somebody else get somebody else to do it and drag you along? No, just getting up

Brittany Henderson: 30:05

very fast, have you?

Alex Felice: 30:08

Really? I know. But I would have never.

Brittany Henderson: 30:11

Yeah, he's all about finding someone else to do the things that you just don't want to, or don't have to don't need to find someone else to do it.

Alex Felice: 30:19

Yeah, find the talent and then triple down on him. I think Gary Vaynerchuk says the same thing. He's like, Don't try to shore up your weaknesses by what you're good at. And man, just crank it out. And that's hard advice when you're new, because when you're new, you nobody is going to help you that as much as you got to build the basis yourself. Right, because the next guy who wants to help you, he's got to be he's building his base of his business too. So by the time you start getting a little momentum, then you can really start find out where your talents are, and shore up your weaknesses. When you're new, you kind of got to get a little good at everything, which is is tough. But yeah, I mean, now I work on, like you said, finance systems, which is people, and I'll tell you a hint, that's really worked for me that doesn't get spoken enough is I write things down in an in a, in a business organized format. So if you've ever worked in corporate, they got a process policy for everything, everything is I was an army where it's like, they got a manual to tell you exactly how to do everything to the I mean, it's designed for 18 year old idiots, you know, design for grunts, so they're like, okay, like, we're gonna, they're gonna think the dumbest guy, the dumbest bullet sponge walking, we're gonna get him to do this. So we need to make sure it's crystal clear. And so. And so this advice really has worked well for me, because what I do is, I write things down in a, in a process format on, you know, a spreadsheet or a Google Doc. And then I kind of just make it look pretty, make it look official, and I just referenced it. And you'd be surprised how much writing down your process, kind of subliminally encourage you to follow your process. And next, you know, I give it to my realtor, I'm like, here's what I'm doing. This is the process. And next, you know, she's following it. And it's like, She's not my employee, by any means. She's not my project manager to Roger, my partner. You know, it's not like I'm giving it to them in terms of I'm like, Look, this, this is a process that seems to work, right, let's write it down. Let's get on paper and just create the system out of thin air and get everybody to believe in it. Because I'll tell you what, people when they see it written, it's it gets credibility. That's a myth, kind of how the internet has ruined our understanding, our trust in what's real, because you read it, and you're like, it used to be if it was written it was in a book, which means it's probably true. Now, who knows? But so but people have this innate thing. So I write a process down, I disseminate it, I act like it's possible. And so far, people seem to believe that it that I know what I'm talking about.

Brittany Henderson: 32:36

Alright, let's move on. So you invest in North Carolina, how often do you actually go see your properties?

Alex Felice: 32:43

as little as possible?

Brittany Henderson: 32:45

Okay, all right.

Alex Felice: 32:47

I have not bought, since I moved, I did used to live there since I moved, I haven't bought one house, without with seeing but while seeing it first. Okay, well, I bought all of them. In fact, I bought one of them. Two of them. Now I bought with nobody even saw it, I bought off MLS the crappy pictures, I knew the numbers, just I just knew the numbers were gonna work and I bought it. And you know, nobody even saw the house.

Brittany Henderson: 33:12

So if you did take that Mediterranean three months off, you would be able to still do what you're doing without having to really worry about because you have that property manager.

Alex Felice: 33:21

Yeah, I got a good ground team. And I know the market really well. And so if you want to do this, what you really got to know is you got to know the market. And that's not so hard, spend a lot of time on Zillow, looking at the properties looking for what they sold or looking for what they're selling for. spend a lot of time on market analysis, because when I see a house and payable, where I invest, I can tell you if it's a deal within 25 seconds, okay, and I just can, and you can do if you looked at a deal, in that, you know, if you look at 10,000 deals, 10,001 is not going to surprise you, you're gonna know exactly what where it is and what and what to do with it. So you build your knowledge, and you set up your team. And that allows you to have that location independence, so that you can not have to live where you're actually investing. This is a trap. If you have to be close to your property, you're doing yourself a disservice. And it doesn't sound like it doesn't feel that way. But really what it is, it's given you a false sense of security to think that because you're close that you can well when the tenant doesn't pay unless you think you're gonna go on to the house and choke them, or shake their money out of them. Being close isn't going to help me it's going to be like that movie, Pacific Heights, you're going to go there, you're going to beat the tenant up and then you're gonna go to jail. Right and they're still going to be your property. So being close doesn't give you any advantage. If you can, if they're breaking the law or they won't get out. You can't go there and get him out to being close. Gives you a false sense of security instead, be far away and learn the real skill which is managing people.

Neil Henderson: 34:50

Gotcha. What do you think is the most critical skill for a new investor to foster themselves

Alex Felice: 34:57

when they're starting out? education and networking All right, educate education and networking, you got to know what you're doing, you got to know what you got to know your strategy, you got to know what in and out, and you got to know for the long term, you got to know the market, you got to know it in and out. And you got to know for the long term, you got to know how the lending side is working, because you're gonna even if you want to eat, if you're spending cash, you're going to need a bank, you need a loan, to grow eventually. So you need to know lending, you need to know, you got to know some financials, you got to know a variety of different businesses, because, you know, you got a little bit about how flips work, how appraisals work, you got to know how inspections work, you got to know how the lending side works, you got to know how interest rates and inflation work. I mean, there's just, there's a whole bunch of stuff, and you really got to have a deep understanding of it. And you, and you got to start right now, because you're competing against me, and I'm mercy. But so but if you if you educate to the to the cows come home, it's only half the portion because you really, you're going to need somebody to sit there and tell you, this is what I've found my talents to be as people that have all the information, but they don't have the gusto, where with all to go out there blindly right? Check. And so I have a talent to look at people and say, you're getting in your own way. You I can tell you know the material, go there, go there and make something happen. And that really some people, you're gonna really need people in your life like that to say, Brittany, you got this, don't be so scared, go do it, you're on the right track. And so you need people you need, you need mentors, and you need people to show you opportunities that you never thought of, and you need people to explain flaws in your thinking that you can't catch. So those two things, you need to know what you're doing, and you need people around to help you for sure. Those are two big ones. Awesome.

Brittany Henderson: 36:38

So if there was a magic reset button, for you to start this, what would you go back and maybe put into place sooner as far as systems or, you know, like, kind of, is there anything that that would change in your processing? Or how you would have gone about things? And

Alex Felice: 36:58

yeah, I I have to admit, you know, I think I'm quite happy with the way that I've progressed, it's seems slow. To many, it seems slow to me. But the knowledge base that I that I've, that I've built in that time. I think the value of that will uncover itself much more greatly over time. What can I do differently, the biggest one that I would do differently start earlier. So if you're listening to this, you just spend every day doing three things, educating, getting educated, at least every day, networking, at least every day, and building capital every day. Right now, right now, because, you know, we went on a on a 10 year real estate tear, like the world has never seen. And so if you got into real estate in the last eight or nine years, you've seen nothing but a cat A stratospheric rise in, in gains. And if you're just getting started out, you missed that. But there'll be another one, there'll be another something else, right? You need to get started now. So that's that's the real big one is, uh, if I could have done it over again, what would I have done different? Not too much, I would have set my goals higher, I started off thinking I'll just get 10 properties and retire. Now I'm sitting there going, Okay, well, I'm definitely going to buy 30 or 40 units next year and probably 250 units. Within two years after that, that was never something I thought I could do before. So get your education on because you're under estimating what's realistic, real, being able to do big things in this business is very possible. But you got to get, you gotta get you got to know what's possible, you got to understand that the systems well enough to see how easy it really is. And then you're at your goals, we'll jump. So that was really the biggest thing I did wrong was I went too slow, not too much. But I went a little too slow. And but I set my goals way too low.

Neil Henderson: 38:54

So I want you to imagine that you're you're standing in front of a room of aspiring real estate investors. And primarily, you know, because of who our audience is, people with families full time job, you know, a little bit time constrained. And they're battling their way through their fears and their doubts and things like that. What advice would you have for them?

Alex Felice: 39:14

I thought about this actually,

Neil Henderson: 39:15

what two or three strat like, what two or three strategies would you recommend for them?

Alex Felice: 39:20

Yeah, I have two or three. I actually thought about this. I want to give you a good answer. I wrote something and let me

Neil Henderson: 39:28

just send it to us. Don't worry.

Alex Felice: 39:30

I'm gonna, I'm gonna parse it. I'm gonna parse it out a little bit. So the first thing you got to know if you're new and you're struggling and you're, you're reading about real estate, or you're learning about real estate, and you're like, I got it in my mind, but I haven't done a first deal or maybe done one and I've still seems like a long way away. You don't yet have the experience too, to know that this works. And so, I would like to. It's important to tell people like this works. If you buy real estate and you stick with it and you do for a long time. It is inevitable for you to build wealth. So if you're new and struggling and on the fence or going through a tough time, just know that everybody does it, everybody goes through tough times, it's not always easy. Stick with it, this 100% works 100% it is tried and true. And if you do it, even if you fail a few times I have I have I have terrible deals on my balance sheet, it will still make you money in this business. So you, you should know that just stick with it. Just keep at it, you'll have breakthroughs. But you got to have some tenacity, but it works. The second thing is, when I first started, I felt it business in general was businesses very competitive, but I thought it was more cannibalistic. And really what you'll find is everybody in this business, understand that it's nonzero sum, meaning I can win, and you can win, I can win, I can teach you how to do what I do, and we can still both win. And so what you'll find is people will actually be very happy to help you succeed in this business. And so if you're out there, struggling, I know that there's a guy like me, who has pretty much, you know, just because I'm so freakin charitable, and a lot, a lot of time just teaching what I know. And I'm certainly not the only one by any means there's a lot of resources out there. And there's a lot of people out there that want to help you. So if you're having a tough time, and you can you just know that you're, you're only a few emails away from finding the right people to help you grow. People want to help you, they really they will help you, but you got to make sure you're a good investment. So the biggest thing with finding people to help you as you have to show them that you are investing in yourself more than they'll ever be able to, if I find somebody that's like, Hey, can you show me how to do this, and they want me to teach them everything I know, one by one. Like, there's no way like you have to do more than I can do for you. So be a good investment, and people will help you for sure. And the last big one, this is this is my this is this a little bit more of a somber note, this business is it is tumultuous it is it can be treacherous. It can be stressful. And it takes a long time. And there is no guarantee that you can quit at any time and it will and it will stop. So you need to take a long, hard look at yourself and take some responsibility or what you intend to have happen to your life. Because it will only happen if you take absolute responsibility and say I'm going to make this work. I'm going to work on it on Saturdays, I'm going to work on at 10am on a Sunday and try to and try to get something get something done. I'm going to blog at 1am on us on a Friday night. You know, I'm going to go to meetings like you know, Neil, you go to real estate meetings, you got a family, it's not always easy, right? But you commit for the long run. And so this business is will it won't chew you up and spit you out. It will just forget you exist. The competition doesn't outcompete you it just moves on without you. So, you know, I tell people look, this is this is a fun business it works people will help you but get real. It's not going to be a it's not gonna be quick, quick, easy, and fast. It's gonna be it's gonna take some competition. Like I said, you got to compete against me. So stick with it. Good luck, but not get real.

Neil Henderson: 43:14

alright with that, Alex, you know, this has been great, but we're out of time. And I want to thank you for, for sharing your wisdom and your experience. And I think our guests will love it.

Alex Felice: 43:26

I guess I hope so. Just wanted Yes. Yeah, I guess yeah, I'm gonna listen to it. Yeah, my, my pleasure. I'm hoping I'm always happy if I can help somebody in some way. You know, anybody who's listening us you can reach out to me. I'm very personal. I'm really easy to get ahold of.

Neil Henderson: 43:41

That's a great question. How can people get in touch with you and keep tracking?

Alex Felice: 43:45

I am not hiding on the internet. If you if you look me up, my name is Alex police. The website is broke is a choice.com and that is the truest thing I ever said broke is a choice, my friend. Come on BiggerPockets Alexander felice, on Facebook Alexander Felice. I'm on Twitter. Brooke has a choice. The email is Alex at brokers a choice calm, I'm sure you put it all in the show notes. Like I said, I'm not I'm not hard to get ahold of. And if you reach out to me, there's 100% chance that I'll respond and give you any information I can't information is always free for me. Awesome. Good.

Neil Henderson: 44:18

Thank you so much. And that and with that for show notes on this show, go to road to family freedom.com slash one, your episode one.

Alex Felice: 44:26

You know that you are welcome my friends. Look, I'm very thankful to be here. I'm excited. I'm excited for this for you guys's future and for this for this production. I think you guys are gonna do fan tastic and the energy level having both you guys be able to chat as is very, it's intoxicating. So I have no no worries about any of your success. inevitable. Awesome. All right. Well, hello.

Brittany Henderson: 44:51

Thank you for helping us ease into it. It was a awesome interview and I'm excited I have so many notes. So I'm be sharing little tidbits on so We do have all your like, awesome knowledge. Yeah.

Alex Felice: 45:05

Well happy to like said I'm happy to contribute and you know, I feel like I am that close carrot. I'm a guy who just got done from going, you know, I got none. And I built a nice portfolio and it's the best time to turn around and teach somebody so I'm happy to do. Awesome.

Neil Henderson: 45:19

All right, man. All right. And if you like this podcast, we would really appreciate it if you take just a few minutes and leave a review for us on iTunes. It's really simple to do. Just go to road to family freedom comm slash review for links and instructions. Thanks for listening. We're doing this all again next week. towbin Safe travels