KGCI: Real Estate on Air - The Untold Truths of Real Estate Investing: An Eye-Opening Guide with Rick Albert

Episode Date: May 30, 2025

Welcome to Real Estate Riches, where Kathy Burns empowers realtors to achieve the success they've always dreamed of. Starting her career at 55, Kathy built a thriving business that offers the freedom of time and financial independence. And now she's sharing her journey to help others do the same. Whether new to the industry or looking to level up, this channel is your hub for proven strategies, inspiring stories, and the tools you need to grow your real estate business. join Kathy each week to explore global opportunities, successful systems, and expert insights to take your career to the next level. Get comfortable. Pick a video and start learning. Your journey to success starts now.

Hey, everybody. I'm Kathy Burns, and I'm here on Real Estate Riches with Rick Albert. Hey, buddy. Hey, thanks for having me on. I appreciate it. Yeah, I'm excited to have you on. We did a little conversation beforehand, got to know each other. And I have a cold.

It's not even a cold. I have allergies. So I sound a little hoarse. So we're going to have Rick do more of the talking anyway. No pressure. Yeah, none. So you've got a diverse background. I want to share how it got started in the evolution of your company.

Yeah. So I started. It was actually December of 2009. I didn't. I was still in college. I didn't know what to do. So a good friend of mine said, hey, why don't you meet my dad? He's done a bunch of business ventures.

maybe you can talk to him and it just so happened he was in real estate he was a big mortgage background was working on insurance companies things like that and that's kind of how i got into it i'm like well i love real estate i like the concept because you can be analytical and creative at the same time it's one of the few industries that you can do that so my first job out of college was actually working with him on the development side i would think hit at the courthouse steps buying foreclosures which was totally wild and then Then I'd help with project management. Sometimes there's cash for keys agreements and people are still living there. And then I'd help getting ready for sale, things like that.

And then we just slowly migrated into what we're currently doing, which is a brokerage, where I can help clients buying and sell homes because I already have a couple hundred transactions under my belt from the development side. Wow, you guys did a couple hundred. Well, you know, that was a busy time. It was. It was. Short sales, things like that.

I did a lot in the short sale part of it trying to save them from those steps. But it was too overwhelming for me to figure out that. The short sale was an easier path. I thought, how foolish was that? So tell us, you learned a lot about doing that. You probably learned a lot about people, a lot about even the area, I'll bet, because you were probably all over. It was a crash course into the city of Los Angeles.

I just moved to L.A. And for those who don't know, there's 209 neighborhoods. in Los Angeles, and they can be literally like complete opposites, and it's just a street difference. Wow. So, yeah, when people are like, hey, have you worked this neighborhood? I'm like, fun fact, I probably have. Because it's like, they're so different from northern L.A., southern L.A.

And you just kind of, but even like down to the street, hey, this street's really important because it's better schools. And L.A. is not necessarily known for their schools. So if you have a good elementary school or a good middle school. school or good high school, people need to know and people want to know. How are you? We can't talk about the schools. How are you able to do that?

Well, people at the time, and even now, I usually direct people to great schools. org. Okay. Because I didn't know we were state specific. So that makes sense. Yeah. Because schools are a big deal. Yeah.

Here typically in L.A., schools aren't as big a deal because most parents put their kids in private school. Oh. So the elementary schools tend to be more important than anything else. So it is kind of fun like when I'm hosting an open house and people are like, hey, where are the schools? I'm like, honestly, I don't know offhand. Like, how do you not know?

I'm like, because most people don't care. And then they still buy the house. Wow. Because LA is more about just like in a lot of markets, it's an affordability game. So like, hey, I'm buying in this location more about affordability. Or if it's a luxury market, it's because of walkability or something else, more than the schools. So I know he's. you do investments and you work with investors. Do you work with just regular Bill and James?

All the time. Okay. Yeah. But what's interesting, because you have the investor background, because I have the investor background, it helps me give them a different insight. Yeah. Right. So we're going through a property and they're like, I don't know. There's something funky about the house. I'm like, well, hey, here's what may be funky. Maybe it's the floor plan. Here's how you fix the floor plan. Right. So they're not looking as an investor or as an investment property, but they're looking like, okay, how can they add value? Right. Where it makes sense more for me.

Exactly. Yeah, because a lot of the clients I tend to work with are more analytical. Right? So they don't really care that the house is pink. They know they can paint over that. They care more about the numbers, even if it's for their own personal. I have a budget. I have so much cash to spend.

Where can I add value to it? Because they have other investments. right stocks whatever that they need to determine is it makes sense to put in real estate or keep it in the stock market interesting so tell us a little bit about your investment side like is that your additional stream of income that you've been creating so that you've got an end game for yourself and your family yeah so my first actually i got into house hacking so house hacking is when you buy a property at the primary residence and you rent out by the bedroom or you might rent out a second units. I gained a lot of popularity and more expensive markets. So my first place was a condo.

It was a fixer condo. It was a lady who'd been there for over 30 years was a heavy smoker. So most people overlooked it. I looked at like, this is perfect because I know how to address all of this. I bought it, fixed it up, got a roommate. Then I did the heloac, the line of credit. And then I got engaged. So my wife and I then did what's called the FHA 203K loan, which I don't know if you're familiar with. It's three and a half percent down of the purchase price plus construction cost and the rest is financed, including the construction. We bought a house, renovation, did an addition on the house, and then converted the garage to an accessory dwelling unit, an ADU, which is like a rentable guest house. Like most projects went over budget over time.

We had a lot of bad luck with the city just in terms of timing. So we had a front some money and I told my fiance at the time and then we got married said so here's what we're going to do we're going to move into the studio ad you and we're going to rent out the house mark and that way we can also refinance later on yes so we did that we actually lived in the studio for two years then now we're in the main house did a line of credit did 1031 exchange with the condo and now i buy mostly out of state So knock on something. So far, I haven't had to do a down payment since 2015. Oh my gosh.

Do you teach a course on that? I don't. Primarily because I know times have changed. Oh. Right. You know, you see a lot of these real estate gurus selling all these courses. And like, oh, yeah, I've been investing over the last 15 years. I'm like, dude, you invested when rates were low and appreciation was moving rapidly.

I want to know, what are you doing today? That's a good thing. there, Rick, because, you know, agents are struggling and they're looking right now. So that's almost a cautionary tale. I like this. Yeah, right, because people are paying. Like, I'm reading online these people are charging like $40,000. I know. And it's like, well, are there, do it. Exactly. But it's like, well, these guys haven't bought anything in the last five, 10 years. Yeah. The markets change. Right. But a lot of my clients actually are into house hacking because that's how they get started. And then they kind of snowball into other things. And that's how I was able to buy out

estate. Wow. And then my mom did 1031 exchanges a lot. I was telling you that she was a realtor as well and she would buy a house and she would put it up for rent. And if it didn't go fast enough, after a while, she learned she goes, I put the house I'm living up for rent and the house that I got for rent, whichever one goes first and we move. I never knew what house she was going to. She had houses. She was bouncing around between house and house. I said, oh, my God, mom, are you nuts? She goes, hey, I'm not losing a month's rent. That's a lot of moving. Oh, my gosh. And they weren't little houses. They probably weren't big, maybe 2,800 square foot. Still, I would never want to do that. She was crazy. Yeah, that's a little rough. Yeah, I think she did two-year leases,

though. And it was all within one suburb because she did the new construction. So she bought a lot of them. And so you just move next door. Quick news. But that's interesting. I think agents today are looking for support and they're looking online. They're looking, you know, AI. I'm a big fan of AI. I use it a lot. Are you using it much in your business? Not as much yet. It's on one of my projects. list of things to look at. Yeah, I've been fortunate. A lot of my business, like this year, for example, most of my business has been sphere of influence, past clients, especially on the investment side, those clients tend to be repeats. Well, you've got a trust factor, right? Yeah, it's a trust factor. It's a, I'm where you want to be. Yeah. Right? So, you know,

hey, I'm an investor. I want to work with an agent that also invests. So they get it. Yeah. How would a new, an agent say they wanted to start the same thing. They wanted to start work with investors because it's a different breed, isn't it? Also, there's a lot of number crunching. Ooh, that's where you could use AI. You could prompt it on all the formula of what you needed to know because I'm the opposite of an antarolitical person. I'm a straight bottom line and let's go have fun. So it's very hard for me that I don't think I'd do well as ever the leader in that path. you'll be surprised. All you really need is a really good spreadsheet.

Yeah. Right? I mean, you think about it. I think, what's the rent? What's the mortgage? And then you have like certain expenses. You just type in the rents what you think it would rent for. And a lot of it calculates for you.

You know, for a lot of my clients, they have their own calculations. Because each one invests differently. Like I have one repeat client. You start off as house hacking. And then I've now helped him buy two more properties where he rents out to college students. So you rents up by the room. Right? That's a different formula.

been just a straight traditional investment. So if you're wanting to get into that space, one of the first things I recommend is like, well, how do you become an investor? Even in something as simple as renting out another bedroom, just so you understand, okay, what's the process for tenant screening? What's the process for doing showing? Right?

Like here, what I've experienced, a lot of my clients experience, we get a lot of notions when I have places for rent. Wow. So now we start doing open housing. right it's like look you want to come see it here's the window i remember years ago when i rented out one of my one of my house hacks we had like 17 scheduled showings for this window only two showed up oh man right so those are some of the things i would actually look at that way when you meet these prospective investors one year now an investor yourself and two is like okay i understand

the process yeah i know what i look at for tenant screaming yeah You know, or you can partner up, which is what I did in the very beginning because I didn't have an investment property. Sure. I partnered up with my broker who's been investing in real estate for 40 years. Oh. Right? So now you start asking him questions.

Yeah. I think Chatsy-B-T could be very helpful. You just basically prompted, you know, you're a seasoned investor in residential property in this price point, even in this territory of Los Angeles, those 200-plus neighborhoods, and say, I need you to tell me what questions I need to ask you to help me analyze all this out. And then once it tells me, okay, now I give you some answers and now we create a formula. Absolutely. I also think Jet, GBT, and AI is probably going to be really helpful when it comes to laws.

Laws. Yeah, I would think because in at least Los Angeles, we do have Los Angeles run control, but it only applies to certain properties. So it would be interesting to be like, okay, here's the same. scenario, what would, it wouldn't be subject to the city, rent control, the county, the state, getting through all those nuances, because that can get really complicated. Yeah, I'll bet I can. And here we have HOAs.

Do you have HOAs there? Okay. Yeah. So you've got it compounded. You got HOAs. You got that. Those HOAs are not necessarily public, but you can get them and you can upload them in. So you can read it.

That's interesting. I like that a lot. I think that agents can absolutely glean that may be something that they want to look at. It sounds like a less expensive way to get started. And I get to see what on it. And it's worked out well for you, right? Yeah. Like I said, this year, I haven't spent a dime on marketing.

What? Wow. Yeah. And I'm almost actually on track of beating last year, which to me is a win because I have an eight-month-old daughter. So it's like from taking all the time off and I'm still able to do the same amount of volume. Yes. It's like, yeah, I'll pat myself in the back for that one.

I'm not going to happy camper. Yeah. And some of it has been just your traditional clients. Some of them have been past clients. You know, a really good resource that I recommend people check out as BiggerPockets. BiggerPockets.com. Yeah, talk to me about that. I saw that, did you write something in there?

I was actually a case setting in one of their books for house hacking. And I've actually gotten business from it. My information is not there. They actually hunted me down. Wow. Yeah. So I guess this is the plug for them, even though they're not paying me. But basically, it's a whole, they have books, podcasts, but they also have online forums,

and the forms are very active. I'm on it every day. Oh, wow. So you can pick different categories. So I'm usually involved in health hacking. I'm involved in buying and selling. And I just provide value. Wow.

So it's like a people just come on there. Do you pay for it? Nope. Get out. So it's free information. I don't. Yeah. Well, it's free to be a member and then participate in the forums.

They do have extra benefits if you want to be a pro member and you get their calculators and all that. I haven't dived into it because I already had my own calculators at the time. Sure. So it's a great. Free information. Right. And you get to hear from experienced investors. Oh, yeah.

I think that's a great idea. Yeah. Yeah. So there are a lot of agents on there. Right? And a lot of them are trying to get business. And I've noticed a lot of. agents who comment on there aren't really there to help. It's clear that they're just trying

to get business. And people don't like that. But if you provide value, they'll come to you. I've had people inbox me. Yeah, perfect example, this past Friday, I got a message to Instagram. Hey, Rick, I'm interested in house hacking in LA. I'd love to talk to you. Talk to them on Saturday, got them to sign a buyer broker agreement yesterday. And so, where did you find me originally? Oh, I saw you comment in bigger pockets. Like what you said. Exactly. Right.

You're adding value. Yes. That's a proven. Givers gain all the time wins. All day. All the time. Well, man, this was great.

You got any other last minute nuggets for our people? You know, I think going forward and I'd be curious to get your thoughts. You know, we used to be like, oh, just find your niche, right?

In real estate. It now seems like we need a niche of a niche. Right? So it's like working with first time home, buyers. Well, that's great. But it's like, no, I work with first time home buyers to have a focus on investing or who want to get into investing. Yes. Then you become an expert in that space. And then the people start coming to you. Yes. Yeah, I like that. Especially you're doing your marketing, your social media marketing where you're talking about that and you become more and more known

about it. Right. Exactly. It's just like, hey, I'm in the luxury market, but my focus is like properties. Yes. Right. Right. And they're how I do it. Right. Exactly. Exactly. So, So then they know to come to you because they want something on the lake or if they're selling properties like, hey, look, I'm going to Kathy because she knows the type of buyers are coming this way. Yes. And I do study that. I love that stuff. I'm sure. Okay. This is great. I appreciate you being on here so much. And we're going to have all Rick's information for you. So you'd be able to reach out to him and you can find him on bigger pockets. Is it bigger pockets?

Yeah. You find me there. But I'm more active on like social media. So as Rick B. Albert. Yeah. I'm going to have all his links. He's already given it to us. So you'll be able to reach out to him. Track him down. If you want to invest, he's your guy. Thanks so much. Thank you so much. I appreciate it. You're welcome. Thank you. So thanks for joining me on this episode of Real Estate Riches. Wasn't that great? I'm sure you've got a nugget or two. I know I did. So if you liked it, please subscribe below. Share it with everybody. Make some comments. We really find that invaluable. And if you're thinking that you would love to talk about this a little bit more, let's get to a business strategy call.

I'll have the link below. Let's see if we can't mastermind together and see if we can't empower each other. That would be great. So until next time, signing off. Hope to see you on the next one.