From Agent to Investor Mickey the Realtor Tells All!

TJ McGraw (00:06.446) All right, everybody, we're here with Michael Smith. This is kind of a part two of last week's episode. We talked about being an agent and working with investors. Today, I'm bringing my good friend on, Michael Smith, to talk about being an agent investor. Because Michael's done it well, he just hit the ground running, and really just got, went all in on investing as an agent. So we're just gonna kind of talk about that. today, because it's definitely an option. And as I said last time, I recommend that every agent should be thinking about investing, getting into investing because real estate's a great way to build wealth. So Michael, man, thanks for coming on. How are you doing today? Michael Smith - Agent/Investor (00:50.261) I'm great man, thanks for having me, I appreciate it. TJ McGraw (00:52.874) Yeah, absolutely. I've been looking forward. I've been thinking about having you on for a while just because it's a great, a lot of agents say they want to get into investing and never do. So hopefully you can inspire some people and I'm inspired by you just from, from what you do and how you just kind of took a leap and went in and just attacked it and you're doing great. So let's start from the beginning though. Like what were you doing? What were you doing before real estate? And then how did you get into real estate? And then we'll kind of go from there. Michael Smith - Agent/Investor (01:23.257) Yeah, so I've just kind of, I've always done construction jobs growing up. Worked with my hands, remodeling stuff, became an electrician, went through a five-year apprenticeship for that. And I just got tired of the nine-to-five grind, and I've always been interested in real estate, having some rental properties. maybe doing some flips and stuff. So it's always been in the back of my head. And during COVID, when it really went full force, my profession became essential. And the job site rules got really crazy and just sick of the monotonous grind and going to the construction site with the COVID mask on. So I was like, you know what? I've got some savings. I don't really know anybody in real estate to help me get going. So I decided to get a real estate license through 2021. And it was the best decision I ever made because it definitely put me in the room with the people who are experienced in real estate. And, you know, I met you and you've been a great mentor to me in my success. So, you know, I. TJ McGraw (02:49.81) Oh, thank you. You're making me blush. No, that's awesome. So you, so this is, I, I'm glad you that you started there. I'm glad we started with that question because most often when I talked to agents about why they got into real estate, it's because they wanted to invest. They wanted to be investors and they figured they would just get closer. That's why I got into real estate. Actually. How's my motivation for getting my license? And it is for a lot of agents out there, but then there's something happens with, with like, Michael Smith - Agent/Investor (02:50.861) I'm not sure if you're here, but... TJ McGraw (03:17.934) I don't know, you just hit this grind in sales and that, you know, you can definitely make money doing that. So a lot of agents just kind of like either pause or they put their aspirations of investing aside. So, but you went in with the intention, I'm going to get my real estate license and then I'm going to leverage that into investing, right? Michael Smith - Agent/Investor (03:20.238) Yeah. Michael Smith - Agent/Investor (03:39.877) Yeah, so I used, now don't get me wrong, I still enjoy helping clients and helping people list their homes and sell it too. But when you come across deals, you know, as agents, we see stuff all the time. And I think what really just holds people back from doing it is just fear, you know, or, you know, limiting beliefs on, you know, I can't do this, I don't have the money to do it. And, you know, instead of asking. Instead of saying I can't do it, just ask the question, how can I do it? It's kind of the thing. TJ McGraw (04:16.382) Yeah, that's a good point. Let's dig into that a little bit. Let's just hop right into it to the mindset and the fear behind it. Um, let's, let's do it from the lens of like your first deal. Uh, your first, your first flip, once you, once you got your, your sea legs, as it were for real estate, as a, as a salesperson, then you went, you, I remember the first deal you bought. Like what were the fears around that? And like, what, what did you have to kind of power through? Michael Smith - Agent/Investor (04:28.429) Absolutely. Michael Smith - Agent/Investor (04:37.01) Mm. TJ McGraw (04:46.037) And can you tell us about that? Michael Smith - Agent/Investor (04:46.997) Yeah, absolutely. So I started off real estate just doing kind of retail sales, helping buyers and sellers as you know. And started going to some investment groups on the side and learning a little more about fixing flips and rental properties and stuff. And my main goal is I want to build a rental portfolio and have some passive wealth one day. But The first deal, I ended up going to a listing appointment and the lady was in a little bit of trouble. She's not necessarily trouble, but she had a wholesaler. And for those of you who don't know, wholesalers take a fee. They get a property under contract and then they try to sell it. And then they try to take a fee out of that. So she was fed up with the wholesaler. So she called me to list the home to try to get it to sell. So I go there and she wanted a quick cash offer, quick closing, and I told her, well, you know, I made an offer, just a cash offer right there on the spot. Didn't have any of the money, obviously. I made a $150,000 offer. I definitely don't have $150,000 in the bank to pay for it. But I took a leaf of faith. went and got it under contract and then immediately took that deal. I ran the number so I knew it would be a good deal. It's in a good neighborhood. I knew it would sell pretty quick. So I took that deal to my investment group and met a partner who helped me figure that out. So he loaned me rehab funds and what actually ended up happening is I talked the seller into a... Michael Smith - Agent/Investor (06:48.714) I ended up making the offer for $150 cash. She didn't necessarily like that much and I was like, okay, well, I'll tell you what, I'll give you $10,000 more, so make the offer $160, but you sell or finance it to me and I pay you when the house is fixed up and sold. You know, everything was f**ked up. in contracting stuff, so it's legit. So she put her trust in me to make it happen. And then I borrowed 40,000 for the rehab from a investor that took trust in me. And we've done several deals together since then too. TJ McGraw (07:31.506) Yeah, this is a, there's so much to unpack right there. That's amazing. Michael Smith - Agent/Investor (07:35.861) Yeah, it really is. And I want to say one more thing. When I wanted to do this originally, I went about it the wrong way. So I started going to these investment groups, trying to find money, hard money, private money. And everybody, nobody would give me the time of day. And then I got a really good piece of advice saying, look man, just go find the deal and the money will come. If you find a good deal, there's plenty of people out there that are willing to lend their money on a good deal. And that's basically exactly how it happened. As soon as I found the deal, the money came right after. TJ McGraw (08:22.258) Yeah, I think that's the biggest thing too, is we often look at it like, oh, we probably, a lot of agents listening to this episode right here have been at a house doing a listing appointment saying to themselves, wow, this would be perfect if I had the money I would offer on this. It would help the seller, it would help me, it'd be great, but I still have the money to do it. And that's backwards thinking, like you said. I think it's awesome that you had the courage. I'll keep it clean here. Michael Smith - Agent/Investor (08:45.667) Right. TJ McGraw (08:51.446) the courage to the intestinal fortitude to make an offer before you knew where the money was coming from. I think that you have to take, you just kind of got to put yourself out on a limb. And because really what's the worst that would happen if you couldn't get the funding, you wouldn't buy the house. I mean, that's really at the end of the day. Michael Smith - Agent/Investor (08:58.902) Yeah. Michael Smith - Agent/Investor (09:10.213) Right, and I explained to her too, because I want to make everybody feel comfortable. I want everybody to have a good deal. I'm not out here to lowball, cash offer, and offend people. She was in a predicament. She needed to sell the house. Her husband had passed away. It needed to go. She had already been tied up for six months under contract trying to sell this house with somebody else. And I explained to her that... If I couldn't get the money together to do it, then we would just list it and I would try to help her sell it for top dollar. Either way, it's a win-win. She actually came out better because she saved on realtor commissions and fees associated with that. TJ McGraw (09:57.81) Yeah. So it's really bringing, if you think of it in a way of like, you're just finding solutions for people. Because it's, yeah, it's a good case in point with that wholesaler that was just in it to collect a fee, just to cash a check and didn't really have her best interest in mind. And then, you know, she found you or you ended up in front of her. Michael Smith - Agent/Investor (10:05.737) Yeah, basically. Zero service suffer. Michael Smith - Agent/Investor (10:16.183) Oh yeah. TJ McGraw (10:25.886) with the solution to fix it and not only one solution, but you had several. So you had like a, if this doesn't work, we can do this. We can list it and you're going to come on top. You gotta have your best interests in mind. Like a lot of, a lot of, um, a lot of investors don't, a lot of investors do for sure, but there are wholesalers out there just with, you know, the dollar signs in their eyes, just trying to get a house under contract for as little as possible and then turn around. Michael Smith - Agent/Investor (10:44.657) Mm-hmm. TJ McGraw (10:55.678) and assign the contract to somebody else for as much as possible without really concern. Michael Smith - Agent/Investor (10:59.329) Right. Yeah. And some of the wholesale fees are ridiculous. Way more than a realtor commission. So people just need to be careful with that. But the investment thing as an agent definitely adds another tool to your tool belt. Because I can go to a listing appointment and have that as another option for them. So depending on their situation, I can go in. TJ McGraw (11:06.396) Yeah. TJ McGraw (11:09.641) Most definitely. Michael Smith - Agent/Investor (11:26.809) to the listing appointment. You know, we can either list it and try to sell it to you for top dollar, but that's not always what people want. Sometimes people have a different situation. They're tired of living there. They need to get out. They've had somebody pass away in the family, either going through a divorce, and they just want to get out of it. So, you know, I can also have the ability to give them a cash offer. And if it doesn't work out for them, if that's not... my cash offer is in a number that they want that can always go the other listing approach. I'm in it for the people. I'm not here to... I'm about building relationships. I want to have a business that I can get referrals from. TJ McGraw (12:10.142) Yeah, doing it the right way. Because in the long run, it's going to be more lucrative for sure. And you can sleep at night and look at yourself in the mirror. Michael Smith - Agent/Investor (12:11.85) Right. Absolutely. Michael Smith - Agent/Investor (12:19.489) Right, right. And I've had people refer me and you know, send me deals and different things now. I've had somebody send me three deals this morning of somebody that I worked with in the past. TJ McGraw (12:31.902) Nice. Yeah. That's it. That wouldn't happen if they thought you took advantage of them for sure. And do you use that? Do you use this in your, in any of your marketing? So let me, let me back up because I haven't even asked you this question. What percentage of your business right now is investing and what percentage is retail sales. Michael Smith - Agent/Investor (12:36.601) Right. Michael Smith - Agent/Investor (12:53.377) I would probably say about 50-50, but this year I plan on diving deep in the investment. Really I plan on diving deep on both sides. I'm really leaning on having that cash offer option for retail clients if that's a plausible outcome for them. But yeah, no. I really want to... TJ McGraw (12:56.673) Okay. Michael Smith - Agent/Investor (13:23.89) I want to do some buying holds. I want to do some burrs. For those of you who don't know, that's buy, renovate, refinance, rent, and repeat. TJ McGraw (13:29.239) Yeah. TJ McGraw (13:37.674) Right. And repeat. Yep. Yeah. Just basically buying, buying a house, fixing it up, refinance it and buy another house. Michael Smith - Agent/Investor (13:44.973) Yeah, get your money back out of the house, stick a renter in it so they pay for it for you. And then use that, leverage that equity in that house to buy. TJ McGraw (13:53.706) Exactly. Yeah. So, so currently you don't have a, like a specific, like system or program in place to, as like part of your marketing to like, you know, like the Mark Spain out there, like who was like your, you know, cash, whatever, whatever it is. Michael Smith - Agent/Investor (14:11.422) I do send mailers to neighborhoods that I like and find interesting. Right now I'm working in a couple niche neighborhoods that I'm kind of starting to create comps in the neighborhood. So I'm kind of adjusting the values of the houses by doing this and making the houses in the neighborhood worth more. So I'm helping people's real estate that live there accelerate. in a way. TJ McGraw (14:41.222) Yeah, that's a good point that you mentioned that because I was actually, I just went with an investor out this morning to look at a property and we were talking about the good that investors do. They come in, they take properties that would otherwise be like, they would just rot into the ground. They come in, they renovate them and bring the values up slowly, little by little, which is good. It's just good for everybody and it provides housing. It's a good... Michael Smith - Agent/Investor (14:48.824) Mm-hmm. Michael Smith - Agent/Investor (15:01.197) Yeah. Michael Smith - Agent/Investor (15:06.829) Yep. Cleans up your neck for good. TJ McGraw (15:10.314) Yeah, it's a, if you do it the right way and you truly have the heart for, to care for people then it's just, it is great for the community. It's great for you. It's great for the people that you're helping, the people that you're buying the house from and the people that are, that are either buying or renting the house from you. It's just, it's just all around. If you're doing it the right way, it's, it's just a good solid thing for the community for sure. So what, so it's a Let's go through your net. How many flips have you done in the past? Was it a year and a half or so? Since that one, that first one? Michael Smith - Agent/Investor (15:42.702) Uh, it's been a year. It's been actually a little less than a year, so like 11 months and I've done 3. 3 years. TJ McGraw (15:49.806) Three flips. Yeah. That's pretty, that's pretty good. Like I said, you just dove right in started. Michael Smith - Agent/Investor (15:55.393) Which I made a goal in 2022 to do one flip. That was my goal, was to do one flip. I wrote it down, do at least one flip, sell a certain number of homes, and I ended up hitting both goals. The flips, I never would have imagined that I would have done three at this point. I'm gonna drop. TJ McGraw (16:11.328) Nice. TJ McGraw (16:16.934) Yeah. So what, so what, tell us about the second one. And then I want to know if like, what was easier about it and what didn't you expect? Michael Smith - Agent/Investor (16:25.781) Yeah, so the second one. So that was an MLS deal. It had been on the market for a little while. It was in the same neighborhood as the first one. So I already knew comps. It was a little bit different floor plan. So it was a little bit less than the first deal as far as after renovation value. It was about in the 260 range, whereas the other house sold for 280. And... Yeah, it was an MLS deal. I had noticed that it had fell, I was watching it for a little while, I noticed that it had fell out of contract. It went under contract and out of contract three different times. So I knew there were pain points for the seller. I went to look at it and it was flat, full of trash, smelled horrible. The listing photos were cell phone pictures and they were all taken with all the junk in there. So I already knew, you know, it wasn't very crazy marketing, no offense to the agent that listed, she was great, but you know, it is what it is. So it was listed for 199. The first contract they had was for 209. So after they fell out three times, I shot an offer in at 175. Michael Smith - Agent/Investor (17:58.249) with the intention to try to get that down a little bit when the inspection report came because I knew there was going to be some stuff I could just tell and my numbers really wouldn't work at 175 so I needed that needed to try to negotiate and get that down a little bit so I sent 175 I didn't think they were going to bite on it at all they ended up taking it they were just upset ready to sell Which in all honesty that was a more than fair price 165 for the condition because we did a lot of that one and Yeah man, I just offered him $175 and then the inspection report came and of course there was a few things that came up so I asked him for a discount. I asked him to go down to $165. They agreed and again the money came from the guy that I used the last time. We'd already had that first relationship. He gave me a private loan. Michael Smith - Agent/Investor (19:11.713) basically paid him a interest only payment every month for six months. We had a six month agreement. Uh, property was renovated and sold in about three months. So I only paid three months of the interest payment. Paid him back. Um, and for the rehab on this one, uh, I borrowed funds from another person. See, a lot of people don't know this, but your mother could be... your lender, your grandfather, your best friend, somebody who owns a business, and they don't even have to have the money either. They can have a retirement account, they can have an IRA, 401k, you can take loans against all that stuff and lend your money out and then get a return and make money for basically doing nothing. And the beauty of it is, is you know, their interest is secured in the house. So if I was to not... come through and rent, do the house or whatever, I drop the ball, I quit playing, quit paying, then the person who lent the money just gets the house right back, which is worth more than they lent anyway. The private money people will only lend on a house that they actually want, so. I always try to keep worst case scenario in mind. So yeah, that's how my. TJ McGraw (20:39.926) That's a good point. Michael Smith - Agent/Investor (20:40.993) Yeah, that's how my second deal went. TJ McGraw (20:43.506) Yeah, that's good. I want to, I want to dig into that. You said something that I want to dig into, but let me, what, what were, did you have the same fears when you, the second time around, the third time around? Like what was it easier? You said you did that one in three months. So it was a little more streamlined. Michael Smith - Agent/Investor (20:56.3) Okay. Michael Smith - Agent/Investor (21:00.085) Yeah, yeah, yeah. Actually the first one I think I did quicker because I was doing my first one and I was so nervous about it. So I was really tedious and really on the ball with it. The second one I had, even though it was only three months, it wasn't that long. It felt like forever because the first couple of weeks I was having issues scheduling contractors and stuff to get out there. Which that's a whole other debacle. TJ McGraw (21:05.297) Okay. Michael Smith - Agent/Investor (21:28.701) It's not easy to flip a house. As you know, you've done it. Contractors are a nightmare sometimes. TJ McGraw (21:32.31) Yeah. TJ McGraw (21:35.978) Yeah, I went through a couple. A couple. Oh yeah. Michael Smith - Agent/Investor (21:38.149) Yeah, we got stories. But, um, yeah man, no, the, the Sega one was a little bit smaller, so it wasn't as crazy as the Sega one. TJ McGraw (21:51.746) Gotcha. Michael Smith - Agent/Investor (21:51.865) But and yeah. TJ McGraw (21:55.53) Be alert, you're stacking lessons though. So each time you do it, is a little more, like you're a little more comfortable, you're a little more knowledgeable. Michael Smith - Agent/Investor (22:02.685) And in the rehab for this one, so I borrowed $20,000 from a private lender. They just took it out of a, excuse me, a retirement account they had. Paid them, um, three grand back on their money or no, excuse me. I'm sorry. I paid them 10% on their money, which was like, like $2,000 for three months of them doing nothing, which isn't a bad. And then, but the total rehab ended up being like 50,000. So I leveraged credit cards to do that one and just paid them off after the house sold. So yeah, that's how I did that, which made me nervous towards the end because once those credit cards start stacking up, you're like, oh no, it's dead. But it's good debt, it's good debt to have. There's such things as debt and back up. TJ McGraw (22:55.186) Yeah, for sure. TJ McGraw (23:00.106) Yeah. It's like Dave Ramsey, hold your ear muffs, Dave Ramsey. Michael Smith - Agent/Investor (23:04.533) Yeah, not listening to the tape. TJ McGraw (23:06.506) Yeah. So if you're a, yeah, if you're a Dave Ramsey fan out there and in your, you're thinking about, I, I agree with the philosophy of you're talking about your personal spending, but when it comes to investing, like you, it just makes more sense to use somebody else's. Michael Smith - Agent/Investor (23:20.897) Yeah, if the debt pays for itself, why not? So you don't have to use any of your own money. TJ McGraw (23:23.85) Yeah. Yep. Yeah, exactly. You basically get free real estate if you're creative enough. Michael Smith - Agent/Investor (23:29.397) Yeah. And that's part of the second one. So I never came out of any money out of pocket on the second one. It was all leveraged through debt. TJ McGraw (23:40.778) Nice. Yeah. And the more reputation you get as somebody who does a good job and makes people money, then really the less you got to dig into your own pocket. Right. Michael Smith - Agent/Investor (23:53.333) Yeah, yeah. And right now I'm actually coming up with a template because like a presentation, which this is a good tip for people who are trying to borrow money from private or hard money lenders. Come up with a presentation. If you have experience doing it, make a resume, send it to these private lenders, kind of like a job. You know, you want to send a resume, you want people to vouch for you, have references. TJ McGraw (23:55.003) once you establish. Michael Smith - Agent/Investor (24:23.321) So now I'm making a resume of the flips and stuff that I've done to just try to get more funding. Eventually I wanna raise capital, some kind of venture capital. I haven't really figured out the bone structure of it, but that's been on my mind lately. Cause there's... I'm gonna go ahead and start the video. TJ McGraw (24:43.018) Yeah, I have no doubt that you'll do it. Just considering the track record of you just diving into investing and buying a house, making offers on a house with no money in your pocket or in your bank account. Michael Smith - Agent/Investor (24:51.225) Yeah. Yeah, that's a great new thing. Listen to a lot of bigger pockets. TJ McGraw (24:57.906) Yeah, there you go. Yeah. So I want to dig back into what you said before about borrowing on a 401k and private money like that. With private money, there's really no, I don't want to say there's no regulation, but you don't have the red tape and the stuff you have to go through with a bank. Michael Smith - Agent/Investor (25:17.542) It is so much easier. Your credit card needs to be pulled so you don't get... TJ McGraw (25:19.442) Yeah. And yeah, credit, like all that stuff doesn't matter. It is really just the, it's the, the real estate, the real property and what the value is of that real property after the renovation. If the numbers work, there is somebody out there with money that will, that will pony up and do the deal with you. Michael Smith - Agent/Investor (25:41.326) And if you're thinking about lending money, definitely do your own research and make sure it's a good deal that you would want to own yourself before you... TJ McGraw (25:50.654) Yeah, absolutely. Yeah. Michael Smith - Agent/Investor (25:53.209) People won't just buy money on any deal. You can't just be like, oh, I got this house over here. I need $150,000. They're going to look into it. So it's not like that. Taking people's money and just all willy nilly. Ha ha. TJ McGraw (26:02.504) Yeah, 100%. TJ McGraw (26:09.131) Yeah, if you are thinking, that's one way to invest also. I mean, that's if you got an extra, and you don't need a whole bunch too, you can just get in on a deal. If you got 20 grand, like pay for a rehab on a light rehab, just pay for the renovation costs and then make the money on the other side. And you can structure the deal anyway. We all know that in real estate, just about everything's negotiable in a transaction. Michael Smith - Agent/Investor (26:21.89) Yeah. Michael Smith - Agent/Investor (26:25.391) Yeah. Michael Smith - Agent/Investor (26:29.358) Yeah. TJ McGraw (26:35.702) And it's just about anything you can think of as a way to structure a deal in investment, you can do it. As long as everybody agrees and everybody's going to be happy with the outcome, worst case scenario and best case scenario, then you can really structure it anyway. If you get five people together, everybody has 20 grand to put into it, then put the deal together. It's kind of that easy. Michael Smith - Agent/Investor (26:57.143) Yep. Michael Smith - Agent/Investor (27:01.557) And when you start, it really is that easy. That's the thing, people, I think the hardest part is biting the bullet and actually starting. I mean, cause it really is that easy. I mean, once you know all that stuff, I mean, that fear just kinda goes away. Like I don't really have it at all anymore. I'll send an offer right now, I have no idea how to pay for it. But I guarantee you one thing, figure out how to pay for it. TJ McGraw (27:20.404) Yeah, absolutely. TJ McGraw (27:27.489) Yeah. Exactly. And we're smart enough, like every agent out there should be smart enough to know, like just put a couple days due diligence in there. And because A, you want to vet the property a little further, obviously. And B, it gives you a couple of days to come up with the funding. I mean, you shouldn't, don't lock yourself into something where it's, you don't have a like a plan B or an exit strategy. For sure. Michael Smith - Agent/Investor (27:31.013) It's a good one. Michael Smith - Agent/Investor (27:42.667) Yeah, for sure. Michael Smith - Agent/Investor (27:55.506) And don't string anybody along too. Like that one lady was strung out for six months. She wasn't strung out for six months. She was strung out for six months. TJ McGraw (27:57.601) Yeah. TJ McGraw (28:03.786) Strung along. Yeah. Because he had that greedy wholesaler was trying to make his full Nut if he if he just wanted to help her he could have still made money and gotten the household. There's no doubt in my mind Michael Smith - Agent/Investor (28:10.046) Yeah. Yeah, and Michael Smith - Agent/Investor (28:16.619) This VML is going to be like 45,000 TJ McGraw (28:19.566) 45,000? That's crazy. Michael Smith - Agent/Investor (28:21.721) It wasn't any wooden buds either, which is a shame. So, you know, just, you know, to put that in reference for other people, my commission on that would have been about $5,000. So if he would have just went with a realtor in the first place, he would have done a good realtor. They would have done a better marketing job. They would have had professional photos. You know, they would have been able to really blast it out. But this whole store just... TJ McGraw (28:26.121) Yeah. Well, he got nothing. TJ McGraw (28:35.508) Yeah. TJ McGraw (28:48.673) Yeah. Michael Smith - Agent/Investor (28:50.477) Got it under contract, paid the MLS service to list it. As a matter of fact, he had a picture on the listing from the house when it was built and it wasn't even the same color. Yeah, didn't look like the same house anymore. TJ McGraw (29:04.872) well. TJ McGraw (29:09.298) Yeah. So let's say, well, let's just say there's a lot of, there's a lot of, um, like in any business, there's a lot of unethical people that don't know what the hell they're doing and, and don't, and don't care to take the time to learn to do it the right way either. So does that just be cautious? But I mean, you gotta be cautious of that. Just being a regular real estate agent. So, Michael Smith - Agent/Investor (29:19.177) It's a shame. Michael Smith - Agent/Investor (29:30.581) in life in general. There's people. TJ McGraw (29:31.818) In life in life in general for sure. So yeah. So the 401k let's just talk about that for a minute. So if you if you if you're looking for money and somebody's willing to take money out of their 401k as like a loan what I don't even know what it is what the interest rate would be on that right now. But let's just say it's just say it's 6 percent 7. Let's just say it's 8 percent even then you lend that money to someone for six months. Michael Smith - Agent/Investor (30:02.017) Yeah. 12%. TJ McGraw (30:02.182) at a 12%, 10, 12% interest rate. That money is still making money for you. And not only is making money in your 401k, it's also making money in the real estate investment. Michael Smith - Agent/Investor (30:17.337) Right, right. Because the beauty of it when you take that loan against your 401k, you're not cashing out your 401k so the money is staying in there. So you just pulled this money from over here, made a clone of it, pulled it out over here. So it's still making money over here and it's also making almost double, 6% over here too. And there's certain tax benefits, which I'm not a CPA, talk to your CPA about that, about doing it this way where you don't have to pay little to no gains. TJ McGraw (30:53.046) Nice. Yeah, definitely. Yeah. If you're, that's a good point too. If you're going to get into investing, definitely get a CPA. That's something that I did not do that I wish I did upfront. And I was, um, yeah, I did, I did a lot of things. I did a lot of things wrong. Let's put it that way, but yeah, talking to a CPA to, so that you make decisions that are best for your taxes from the beginning are, are pretty crucial. And most of them, they, if there is a consulting fee, it's only like 50 bucks or so. Michael Smith - Agent/Investor (31:09.453) Yeah. TJ McGraw (31:22.7) Well worth it. Michael Smith - Agent/Investor (31:24.33) Yeah. TJ McGraw (31:26.094) Cool, man. Well, I'll tell you, what are you doing as far as real estate sales? What are you working on now as far as that goes? Are you putting any marketing into that or you're just working sphere? Michael Smith - Agent/Investor (31:43.545) Yes, so, mailing spirit. I wanna be one of those agents that's word of mouth type agent. I do need to up my social media game a little bit, which is always something that I've been needing to do. I plan to make a hire, my first hire this year, a BA to do stuff. But as far as marketing, I send letters and... TJ McGraw (31:52.552) You're good. Michael Smith - Agent/Investor (32:12.545) I skip trace houses that I'm interested in and I call people. And then I've got a few listings coming up like three or four just from my sphere of people that I've done business with. Two of which are houses that I actually help people buy and they're ready to move so I'll help them try to make a little money on their house and maybe they'll buy again with me. TJ McGraw (32:40.542) Yeah, absolutely. Michael Smith - Agent/Investor (32:42.565) They like me enough to call me back. But yeah, for 2024, man, it's looking good. The market predictions are looking good, despite what the news says. Out in the real world, it actually seems to be opening up. Yeah. TJ McGraw (33:01.302) Uh, yeah, I feel it for sure. I mean, it's, I'm already, I'm already, they got a heck of a pipeline going into this, this year. Michael Smith - Agent/Investor (33:08.917) Yeah, that's kind of another reason I pivoted to the flips too, is because retail sales slow down some. So, you know, just be confident in yourself. TJ McGraw (33:22.399) Absolutely. TJ McGraw (33:26.87) Yeah, so before we wrap it up here, and what would you say to, I mean, what advice would you give to agents that are kind of on the fence or they might be a little hesitant? Michael Smith - Agent/Investor (33:39.893) Trust in your ability and just do it. Push yourself over that edge and just do it. It's going to be scary but even if you fall on your face, it's a lesson. So stack that lesson and then next time you decide to do it again, you'll know not to do what made you fall on your face last time. Definitely get a mentor too. Like I didn't just up and jump to my first. TJ McGraw (34:01.716) Yeah. Michael Smith - Agent/Investor (34:08.877) Real estate deal, like I said, I was in real estate like a year and a half before I jumped into the first one. So definitely do your due diligence. Find a mentor, people you trust. Go to investment groups, Google local REAs. You can find them everywhere. They're in every state, multiple ones. There's three or four around us that I've been to. TJ McGraw (34:17.207) Mm-hmm. Michael Smith - Agent/Investor (34:38.385) And some of them are actually on Zoom calls, so you don't even got to leave the house. Read books, educate yourself, listen to podcasts on the subject that you're trying to do. Bigger Pockets has some great publications. TJ actually gifted me the Flipping Houses book. I appreciate that. I read that book. It's an awesome book. Appreciate that. TJ McGraw (34:59.328) Yeah. That's a good one. For sure. What's the author's name? Um, Scott, something Scott. Michael Smith - Agent/Investor (35:08.162) What? Yeah, J. Scott. J. Scott. TJ McGraw (35:11.966) Hey Scott, yeah, it's a bigger pockets published book, something like that. But yeah, it's a good, it's what flipping houses it's called, I think. Flipping out. Michael Smith - Agent/Investor (35:16.824) Yeah. Yeah Michael Smith - Agent/Investor (35:24.161) the book I'm looking at. TJ McGraw (35:24.206) Flipping Houses, the book on Flipping Houses. Yeah, that is a good book. That was one of the first books I picked up. Michael Smith - Agent/Investor (35:30.249) Yeah, it's a good one. TJ McGraw (35:32.598) Definitely. So cool, man. Well, what give us your social media. I'll put some of your social media in the in the show notes so people can follow you and DM me if they have questions. Michael Smith - Agent/Investor (35:42.445) Yeah man, Michael Smith on Facebook, Mickey the Realtor on Instagram, Mickey the Realtor, you can Google me. Don't type Michael Smith into Google because like a million of them will pop up, so I went with Mickey the Realtor. Yeah phone numbers all over my social media, so if you need to get in touch with me or have a deal or even have a question. TJ McGraw (35:58.766) I'm going to go ahead and close the video. Perfect. Yeah. I feel you on that one for sure. The Google. Michael Smith - Agent/Investor (36:12.671) I do free consulting. TJ McGraw (36:15.422) Yeah, I can definitely attest. And that's why I felt for, I didn't even ask you if you wanted to have Viva reach out to you, but I can attest that you're such a giving guy. And, uh, you'd be happy to answer putting words in your mouth right now, but you'd be, I'm sure you'd be happy to answer any questions that just, that's just your nature. Michael Smith - Agent/Investor (36:24.261) Yeah. Michael Smith - Agent/Investor (36:30.625) Absolutely. Anytime. Always down to help somebody. TJ McGraw (36:36.062) Awesome. Well, good luck, man. I can't wait to see where you take it this year. And, uh, yeah, thanks for coming up. Michael Smith - Agent/Investor (36:42.777) Thanks DJ. Alright, see you buddy. TJ McGraw (36:45.842) Awesome.