I Built a Real Estate Business That Replaced My High-Paying W2 (Here’s How)

0:00Today's guest proves you don't need to live near your investment to make serious money in real estate. In fact, his very first deal was sight unseen, and it turned into a$250 ,000 profit. And here's what's even crazier. He didn't just luck out. He used data, strategy, and a strong team to make that deal work. So if you've ever said, man, I'd invest if I could just find the right market, then this episode is for you. Steve Keery joins us today to share how he's researched the right market, built a local team from scratch, and avoided the classic Ricky pitfalls of long-distance investing.

0:37This is the Real Estate Rookie Podcast, and I'm Ashley Kerr. And I'm Tony J. Robinson. And with that, let's give a big warm welcome to Steve. Steve, thanks for joining us today, brother. Thanks so much. I'm really excited to be on the program. Steve, take us back to that very first deal. What gave you the confidence to get started? I mean, it took a lot of learning. I was really into investing. I wanted to invest, and I got around people that were investing. I joined a mentorship and I just decided I wanted to do it. But then I started to look at data. So, you know, I lived in Australia. I was in Sydney.

1:14It's the second least affordable city in the world based on income to price. So it was really expensive and not a good market to invest in. So I realized that I needed to find a better market. So I really learned how to do that. And, you know, I just searched for the best market in Australia. That was my goal. I didn't have a specific, you know, criteria of being local or just what's the best market. And I set about doing that. Now, you did your first deal sight unseen. So explain that process of getting comfortable with being able to buy your first property without even seeing it. You know what?

1:48I actually really think that I saw the property better than most people do because I had a lot of friends that were in real estate. And they thought I was crazy buying sight unseen because they're like, how do you know the local cafe? and the hotspots and they really had this thought that you need to see of your eyes but not having my eyes I went really deep on the data so I built a spreadsheet of data I narrowed down to properties sorry areas that had like a high enough yield and I started to look at what's the median income what's the change in median income what are the demographics the home to our families live here?

2:24Is the median income moving? And when I started to zone in those areas, I looked at infrastructure in the areas and like, is there solid infrastructure? So I really had a very solid idea of why I was investing in that market and it wasn't based on any gut. Not seeing it also wasn't that big a deal. So I, when I decided the area I wanted to invest in, I started interviewing local property managers and I would speak to the property managers to firstly figure out who I want to use but as well I was asking them where are people buying where do I need to avoid what sort of like bed bath counts do I need in this area so I got a really clear understanding what renters were looking for and when I negotiated on deals I started just based on numbers I'd see a deal that I thought would meet my criteria I would negotiate on the price and if they were open to that price I would send my property manager to go do an inspection because they were impartial.

3:20They would tell me the truth. They're like, will you be able to rent this? Are you going to have any issues? What's the market rent? Is there a cemetery across the road? Is there something wrong with the property? And they would give me the real answers. And then when I went under contract, I would obviously get a professional property inspection done. So I had a full inspection report. I had clear visibility on the property. So to me, I felt confident in the area. I felt comfortable on the property. I felt comfortable with the condition and I was good to go. And I never had to see it. Steve, everything you just laid out, I think, makes a ton of sense logically.

3:57But oftentimes, rookie investors don't make decisions simply based off of logic. There's often a lot of emotion involved in that decision-making process as well. And while I think we would all agree what you said was very rational, for people who are doing this for the first time, I think there's still fear around the unknown of I haven't been there before. I don't know it like I know my own backyard. And I guess what I'm trying to understand is aside from the rational piece, did you have any of that fear? And if so, how did you overcome that to say, hey, we're still going to do this because the data makes sense?

4:33I mean, I absolutely had the fear for sure. It was like a big investment. But I just did it anyway. And, you know, I guess I guess I probably am rational. So I probably rationalized the fear, but, but my, I was prepared to make a mistake because to me, you know, I wanted to invest. I wanted to build a better future. So I was prepared to make some mistakes. I'd done a lot of research. I really felt like I'd minimized like the mistakes that I could get, but of course I may get some. And I just, I just did it anyway. Knowing that if I made mistakes, I'd learn from them and I'd be able to apply that to future investments.

5:09Yeah. Steve, three things I want to highlight really quickly. Number one, I love the concept of I just did it anyway. I've got three kids. My oldest is a teenager right now. And like his whole life growing up, I always shared with him that bravery isn't the absence of fear. It's doing it in spite of your fear, right? Despite your fear. And I think that's exactly what you laid out here. It's, hey, I do feel a little nervous about this. But the truth is, if we only do things that keep us comfortable and we never do anything that scares us a little bit, there is a good chance we're not going to achieve a whole heck of a lot in life either.

5:41So we've got to be able to find that tipping point of taking that step towards that fear when we know that it's in our best interest. And the second thing that you said was, you know, you were prepared to make some mistakes. And I think that is the absolute correct mindset that rookie investors need to have, that the purpose of the first deal is not to make you a millionaire. The purpose of the first deal is not to retire you from your day job. the purpose of the first deal is to give you proof of concept, is to give you confidence that you can go out there and do your second deal. And I think that when we can take off some of the monetary pressure around this first deal has to be a home run, it then allows us to do what you did where you can step into that fear because the risk is a little bit lower.

6:26Steve, when you decided to invest out of state, you had that foundation of knowing people in that market, but what were some of the data and the metrics that you looked like to actually analyze the market on paper? Yeah. So I used a lot of census data. So Australia has pretty good data like that. So I started with, we have like realestate.com, which is like a Zillow realtor. So I pulled that to figure out the yields, like the rental returns, and that eliminated eliminated like a lot of areas based on the yields. And so I made the list smaller. But then with the census data, I really pulled out the median incomes, the income quartiles, like what quartile are they earning income in.

7:13But I went back a few years. So what I was actually looking for was the change, right? I wasn't looking for the best market. I was looking for the market that was changing. I would also look at the growth that the areas had had. What I did probably different to what most rookies would do was I wasn't looking for the areas that had grown a lot because my belief was when they've grown a lot, like you've sort of missed that. And I was looking for growth. So I was looking for areas that had really good fundamentals so that it showed to me the incomes are growing, the population is growing, there's infrastructure, like it looked good, but it hasn't grown significantly.

7:47And then once I limited that down, I looked in the areas around them. So I found some pockets where it looked good on paper, it hadn't really grown, but the areas around it had actually grown nicely. So to me, that was a clear buy signal that the market was coming up in that area. And that was really a lot of the data I pulled. Did you have any experience in the past, like, pulling data or metrics or analytics? What has been like your career up to this point that did you have any advantage? I mean, maybe. I mean, I'm a marketer. So I had a tech business. So I ran marketing and sales. So I was sort of comfortable looking at data and analyzing things from a marketing perspective.

8:30So I might have had that advantage. I had a lot of data scientists and people around me. I wasn't that person, but I've seen how they operate. So that might have helped. But to be honest, I don't think I needed that. I did join a group of people that were doing the same thing. So So in Australia, there's this lady, Margaret Lomas. She was a good teacher there, one of the biggest ones in Australia. And she had a group. So we joined and we all were looking at our own markets and discussing. So that gave us a bit of confidence too. So, I mean, I am pretty comfortable with data, but I don't think you need to be.

9:04I think to the rookies listening, I think that it's not rocket scientists and you can do it. Yeah. And I think too, the fact that you had a marketing background, we get all the time people saying like, I don't have a job that can help me in real estate. I don't have any kind of advantage or opportunity, but you're marketing your property. You're marketing yourself to find leads to buy properties. Steve, I just want to get a sense because it wasn't in your backyard. Obviously, I'll show it as a big place. How far was this property from where you were living? Was it a two-hour drive? Was it a six-hour flight?

9:42Just ballpark, how far away was it? Yeah, it'd be pretty significant. I mean, it'd be a full days of travel, you know, a couple hour flight. It's a different state. It was in Queensland. I lived in Sydney, New South Wales. It was a whole different state. It was a faraway way. And by the way, I sold it about two years ago. I'd never seen it. I still, I still, I never, I made, I made a lot of money on it. I managed it. I've never seen it in my life. We're going to take a short break, but when we come back, Steve actually started to make some investments in the U.S., so we're going to start and touch on that when we could be right back.

10:16You ever head out on a trip, lock your door and think, cool, my most valuable asset is now doing absolutely nothing. Because while you're off traveling, your home is just sitting there, quiet, empty, not contributing, which feels like a missed opportunity considering it has solid Wi-Fi and a very comfy bed. With Airbnb's co-host network, your place can earn money while you're away. You can hire a vetted local co-host with real hosting experience to handle guest messages, prep your space, and manage reservations so everything runs smoothly. Your home might be worth more than you think. Find out how much at airbnb.com slash host.

10:50Do you ever notice how every passive investment somehow turns into a very active lifestyle? Active spreadsheets, active phone calls, active stress. Here's a better question. What if you could buy brand new construction homes, 10 % below market value, in the best markets across the country, without making real estate your second job? That's exactly what Rent to Retirement does. They're a full-service, turnkey investment company handling everything for you. In some cases, investors get 50 % to 75 % of their down payment back at closing, plus interest rates as low as 3.75%. They've partnered with BiggerPockets for over a decade, helping thousands invest smarter.

11:27If you want to do the same, visit biggerpockets.com slash retirement to learn more. Okay, we're going to shift gears for a minute to cover something important, especially for new landlords. The shows often talk about getting stuck doing everything ourselves and the cost of sweat equity. The key question is simple. Is my time better spent elsewhere? I use a tool that cuts down on a lot of landlord hassles. And the wild part is, it's just$12 a month. It handles rental screenings, rent collection, maintenance requests, and accounting all in one platform via a mobile app or desktop. It saves me time in tenant communication and keeps me organized for tax season.

12:01It's called RentReady, and you can sign up for a six-month plan for just$1 with promo code BP2025. Pro users get it for free because we believe in it. Just sign in through your pro account to get started. RentReady helps ensure on-time rent with auto reminders, keeps communication professional, and lets you post listings to multiple sites. Check it out at rentready.com slash biggerpockets. That's rent, R-E-D-I dot com slash biggerpockets. Okay, welcome back. We are here with Steve, who started out investing in Australia. So Steve, what made you pivot to investing in the US? Well, I did move here.

12:38So I bought six rentals in Australia and I moved to New Orleans, came here for vacation and fell in love and decided to stay here. So I had left my old business in Australia and I wanted to figure out what I wanted to do next. And I did want to do more real estate. I've sort of got in the bar, but I've loved it. So I looked around and decided that I wanted to do real estate as a professional. What I think I did in Australia was I was definitely a rookie. I didn't have any advantage. I was retail investing and looking for where the market was growing. And I decided because I moved here, I'm going to actually become an expert in my market and become a professional investor and focus more on buying with making money on the buy as opposed to relying on the market to make that money.

13:29Steve, so you come from an entirely different country with, I'm assuming, no contacts, no resources. The community that you're a part of in Australia is no longer here with you in the States. So what do you do first to start building this actual business that you're looking to build? The first step was I went to the local REIA. We had an REIA here in New Orleans Real Estate Investors Association. So I went to that to actually start to say what's going on in this market like what's happening i started to meet some investors and that sort of got my head around it so that was really my start because i did i knew nobody my whole family's from australia the first person we met here was our airbnb host because we had an airbnb when we first came so like literally zero network so starting with the rears and meetups was how i started to build that network and through through noria i did a little i actually bought a deal off a wholesaler okay um To get my visa to move into Australia, I needed to invest in a property.

14:21So I bought a deal off a wholesaler and I wanted to learn what wholesalers did because I didn't know what that was. I don't think we have them in Australia or I didn't know about them if they existed. So I wanted to learn what a wholesaler did. And I did a course through the Real Estate Investors Association on wholesaling. And when I learned what wholesaling was, I realized that I ran sales and marketing for my company. And I'm like, wow. oh, and we were a two-sided marketplace. And wholesaling to me was a two-sided marketplace with sellers and buyers and marketing. I'm like, that's my skillset.

14:54So I realized that I could do wholesaling in this market to buy my own deals and to really add value in a way I wasn't doing in Australia. Steve, I want to dig a little bit deeper into your transition to wholesaling. But before we even get there, you glossed over, I think, something that a lot of rookies struggle with. You casually said, I went to the RIA, met this person, you know, made some connections. But as someone who's brand new to a country, no connections, no friends, you walk into that RIA, there's, I don't know, 50, 100 people, however big the RIA is. Like, who do you walk up to first?

15:28What are you saying to people? Like, how are you breaking the ice to actually start building some of these connections? I mean, the thing you'll find about real estate people is they're really friendly. Like, if you go to those RIAs, these people want to help you. So, you know, I found I just was going up to people and saying like, what do you do? Like, how does that work? I was just being really curious about what they were doing. And I found that most of these people wanted to tell you they and when they found out you're new to the country that you're new to investing, like they want to help you.

15:58I mean, you got the Australian accent who's not gonna be drawn to a guy with an Australian accent. The Aussie accent helped. It's funny because like it was a disadvantage being Australian for like trying to deal with sellers because like I was like, you know, I obviously wasn't from here. I would mess up street names, but I did become like, people started calling me Aussie Steve. So like, I realized that like, it was a disadvantage, but it's also an advantage, right? So I definitely played up the Australian side, might've even enhanced my accent slightly, dropped a few more get a, a few more get a's than I normally would have.

16:30So Steve, you say, Hey, I'm learning about this thing called wholesaling, which wasn't a thing where you were coming from in Australia, but there was this matching of skills and abilities. And I think for all of our Rickies that are listening, even if you're not maybe in the exact same position as Steve, the lesson to be learned here is that Steve saw an opportunity within real estate investing that was a natural fit to his current skills and abilities, like what he already knew and what he was already good at. And I think all of us should be doing that self-assessment to see or to ask ourselves what strategy aligns best with what I'm actually already good at.

17:05I joke, I mean, I actually joke all the time that she would make a terrible a wholesaler because she hates talking to people and knocking on doors and cold calling people, right? So like, you got to know where your strengths and your abilities lie. So Steve, once you found out about wholesaling, and I guess for maybe folks that aren't familiar with that phrase, just define it for us first. Like, what does it actually mean to wholesale? And then once you decided if that was the right strategy for you, how did you actually get started? So wholesaling is really flipping a contract as opposed to flipping a house.

17:34So if you're marketing for the stressed sellers, you will negotiate a price based on what you know someone will pay for it. You get the contract to purchase that property. But instead of actually buying the property, you assign your rights to purchase that property to another investor. And you can assign them at a higher amount and therefore you earn that spread. So it's really good for if you're good at marketing and good at talking to sellers, that's how you can find deals. And on the other side, people like Ashley, I'm guessing then people that like they want deals, they want to renovate, but they're not good at the marketing and sales.

18:10So you really form that function for people. Yeah. Steve, when you started doing this, was it just through the meetups that you started to build your buyers list and your lead list? Like how did you actually find buyers that would want to buy the properties that you found? Yeah. I mean, the meetups were a big part of it. And then like through the meetups, like going further. I went through BiggerPockets. I made connections through BiggerPockets, the Facebook groups, many ways. I made friends with other wholesalers who had lists as well. So it can be quite good when you're getting your first deals, you can joint venture with them.

18:48So they can actually help you like understand the right numbers and they can help you move that deal. So it's a combination of all of those things. Steve, just from what you've Jared so far, you seem like someone who's really nailed the process of building your network. And I think Ashley and I both have benefited tremendously from the people that are in our network. For all the rookies that are listening, what is your advice to become good at networking? And I don't want it to sound like transactional, like I'm just networking for the sake of my own personal benefit, but I do think that building a network can be a win-win situation for both parties.

19:26So if our, you know, if you were to give me like a 30 second crash course on how to effectively network, because you talked about, Hey, you know, I found the first property that I bought, found it about wholesaling. I built my list all through the connections that you made. That is a skillset. So 30 second crash course, how can someone replicate what you've done in building your network? I mean, I think, I think add value and be curious, like asking questions, just really find out what people do and just help where you can definitely don't be transactional. like be the opposite of transactional.

19:55I really read the book when I came here, The Go-Giver. I don't know if you've read that book, but it's about just adding value. If you add value into the universe, it just comes back to you. It's not like I'll help you because I'm happy to help you, not because you need me something in return. But if you do that often enough, things come back in return and it may not be from the person you helped. So I really, and I think because I came here not knowing anyone, I had to just like, I had no network. I wasn't much of a networker in Australia. It's not a natural thing that wasn't my skill. But because I knew no one, I just like I was trying to make friends.

20:28I was trying to find out. So my advice is just to like just help if you can, like offer to help them and do something, you know, without asking for anything in return. And just ask them questions. Go deeper and understand what they're doing, why they're doing it. And they're generally happy to answer that. Now, in this market, New Orleans, tell us what your buy box looked like. What kind of deals were you going after? So, I mean, for me personally, I mean, I bought a lot of birds. So I have my wholesaler view and then I have the deals I buy myself. The advantage of being a wholesaler is that I have a very wide net.

21:06You know, I can pretty much close any deal. Now in South Louisiana, I can pretty much close any deal if it's price right. and price right. When I first started, it was like 70 % of the after repair value minus repairs was what a buyer would buy a deal for. So if I could get a contract cheaper than that, I had a big enough buyer, at least I could move any deal. The market's softened and it's more like 65%. And in some parts of New Orleans, particularly it's 60 % of the ARV. So that's my broad buy box. So I'm able to like market, but the ones I like. So again, my skill is sales and marketing, not renovating.

21:44So the deals that I liked were the ones that were priced right like that, but didn't require a big rehab because I don't want to fix a foundation. I don't want to do, I don't want to pull permits. So when I found deals that were priced right, but had a renovation I could handle, I bought those myself and did the burr and anything else I wholesale to my network. Steve, I want to go back to the whole 70 % to 60 % of ARV. Just give us an example of what the math like that would actually look like. Say the home, the ARV, the after repair value is 100K. Back us into the numbers you would need for that to be a good wholesale deal.

22:20Yep. So if the after repair value is going to be 100K, the buyers want to buy it at 70 % of that value minus repairs. So 70 % of 100K would be 70K. And let's say there's a 20K rehab budget. So they're going to want to buy it for 70k minus 20 would be 50k. So 50k is going to be the price that the buyer is going to want to buy it for. And if I'm wholesaling, I'm going to want to make an assignment fee, right? So if I get a contract for 50k, I'm not going to make any money. So I'm going to want to get it for 45k or 40k or whatever I can negotiate. I'm going to try to negotiate something a bit lower so that I can make a spread in that deal.

22:57One follow-up question to that, if I'm new to wholesaling, because there are people in our audience who I think are interested in that as a strategy, but I think where a lot of new aspiring wholesalers and just real estate investors in general struggle is estimating those rehab costs. So for you, Steve, when you came to New Orleans, again, new city, new country, how did you go about understanding what those rehab costs were going to potentially be? I'm catching a theme for myself before I an answer because it was asking people. It was the network and it was the rears. I got with the buyers and I asked them their rehab costs.

23:31I started to learn what they were using. And that's really like, what does it cost for a kitchen? What does it cost for a roof? My tip though is there's a difference between being a wholesale and a rehabber. When you're a rehabber, you're going to have a very itemized, very specific budget based on exactly what you're going to do. Now, when you're a wholesaler, all the buyers are going to do different things. So you're not trying to estimate to the dollar because one person's going to do high and one person's going to do low end, right? You just need to give enough of a budget. So if it needs a kitchen renovation, you need to make sure there's just some money for a kitchen renovation.

24:12So what I tend to do is we have a formula that's like, we put like, I think it's like seven and a half percent of the ARB is like stuff just straight away that's stuff and then we just add up big items right so it needs a roof we have a number for a roof we have a number for kitchen we have a number for bathroom we have a number for AC so we just we just do the big ticket items but we don't count like you know just small little items trim you know power points you don't count any of that so but just asking around I've got a fair enough number and I realized that most of the time it worked for my buyers.