Can you imagine if you’d started your real estate investing life in college? Antoine Martel from Martel Turnkey was studying for finals and flipping rentals thousands of miles away. And in the last year, he’s added hundreds of single family homes and multi-family units to his portfolio.
Recent college graduates may have just graduated with a mountain of student loan debt, but they also want to get started on building long term wealth too. So I sat down with Antoine to ask him how he adapts Millennial goals and strategies to the real estate world.
Millennials’ Advantages in the Real Estate World
Millennials aren’t interested in the slave-and-save work model that their parents adapted, and that rejection of the traditional way of earning wealth gives them the reputation of being lazy. I think that they’ve taken a completely different approach to investing in real estate because they’ve quickly adapted to technology and automation as a way to do less work.
I think that understanding how Millennials want their life to go is a key to understanding why they have a huge advantage in the real estate world. Their focus is always going to be the “work smarter, not harder” method, and they’ll use every technological tool available to stop doing mindless, stupid tasks that suck up too much of their time.
If you have a huge list of little stuff, you might procrastinate doing it, because who wants to get stuck emailing follow-up questions to everyone involved in a transaction? Antoine takes his CRM and customizes it to send emails to the insurance guy or to keep exact track of how much cash he has on hand. For any given transaction, Antoine might have up to 20 automated emails scheduled to fire off when a deal closes. This frees up huge amounts of his team’s time.
In the old days, you might have to make all of your cold calls yourself, or hire an assistant to help you out in your office. But today, the internet lets you connect with VAs in the Philippines, so Antoine takes advantage of that as yet another way to free up his time. He can focus on building a system that works rather than getting lost in the tiny details.
How Millennials Can Invest in Real Estate
Most Millennials were in their teens or early twenties during the housing crash, so they never really felt the pain of it. For many of them though, there are still a lot of obstacles to investing in real estate. From heavy student loan debt to a general lack of job history, Millennials like Antoine have to get creative to find ways to work around the money issue.
Antoine has an audience of nearly 48,000 listeners, but he estimates that maybe only 20-30% of them are doing anything with the knowledge that he’s putting out. Markets like California make them feel like they’ll have to save forever to put a down payment on an investment property.
When Antoine started out, he had a lot of the same hangups about investing. As a sophomore in college, he definitely didn’t have the money for a down payment or the W-2 history that could land him a bank loan, and he was accruing student debt instead of paying it down. So he turned to his personal network, and the Bank of Dad, to help him fund his first deal.
Once Antoine moved his market search beyond California, he realized that his dad’s $40,000 loan could go a lot farther. And after completing his rehab and refinancing it for the cash, Antoine realized that the $40,000 he’d started with could go a lot farther if he leveraged other people’s money.
This is one of those myths about real estate that everyone gets hung up on, even if they’re 23, 43, or 73. You do not need to be a millionaire to invest in real estate, and using hard money lenders like myself to leverage your real estate investments can help you start stacking those properties and building wealth today.
A Turnkey Strategy with a 12-18% Return
After doing over $10 million dollars in real estate last year, Antoine looks like he’ll be doubling that amount this year, and part of his success lies in his ability to scale and the fact that he pivoted into what people want. Once he realized that passive investors were interested in turnkey properties that could immediately start returning between 12-18% a year, Antoine totally changed his business model.
Focusing on tertiary markets like St. Louis, Memphis, Birmingham, and Cleveland, Antoine’s been able to pick up cheap homes that can survive a recession. On an $80,000 house, a 10% dip in the market value is only an $8,000 loss. And if the home is already a cash flow machine, a passive investor can wait out the dip.
A lot of people saw Antoine’s success, but they didn’t want to work as hard as he did. And they didn’t want to build up to the scale that he’s at. Pretty quickly, Antoine realized that he could find a property, renovate it, rent it out, and then sell it to an investor. He even arranges property managers for each property so that an investor can just come in, hand over their down payment, and start enjoying cash flow from day one.
An $80,000 house only needs about $16,000 down, plus a little for insurance, and it can turn around and pay $200-300 a month. It’s a great way for an investor to get their feet wet in the real estate world without taking up a lot of their time or money. All they need is a full-time job, $20,000 in the bank, a good credit score, and a W-2.
Despite student loan debt and a short work history, there are still ways that Millennials can take part in real estate investing. Technology, innovation, and building better systems will be just a few of the ways they’re going to change the face of real estate. In the meantime, turnkey rentals may be a safe way for them (and you) to park your money while you dip your toes in the real estate investing world.