MI346: The True Total Money Makeover w/ Ali & Josh of The FI Couple

23:12And for a limited time, you can use code stocks15 for a 15 % discount at checkout. All right, back to the show. Once you got laid off, Josh, weren't you taking Allie to her master's program and you guys had a lot of time to talk to and from in the car? Yeah. Well, so the year prior to getting... Well, one, the year prior to our wedding, and then the year prior to me getting laid off, Allie actually had graduated with her master's. And that was in the planning of the wedding. That was actually... And we've been together or five years or so at that point. The act of planning a wedding, I think, was the first time we ever actually sat down and started to calculate our income, our expenses, because we're like, well, how are we going to pay for this wedding?

23:55And she had just graduated with our master's. It was our first time actually tallying up car loan, credit card loan, massive student loans. And then at that time too, Allie and I were talking, well, I'm gone all the time. We're about to get married. We have all this debt. How does life ever change? And that kind of thrust us into the world to personal finance. And we started with Dave Ramsey, how do we pay off this debt kind of stuff. And so we kind of made that commitment of becoming debt free in 2017. But I was still working all the time. And then Allie was working out too. So then I get fired.

24:25Now I'm unemployed, I'm driving Uber for eight hours a day. And so for the first time ever, yeah, I would bring Allie to work in the morning. And during those whatever it was 30 minute car rides, we would just talk about our goals and our vision. And then I drop Allie off to work, I would drive for Uber for seven or eight hours a day, I'd go pick up Allie. And it was more time I feel like that we had spent together and us actually talking about our goals. That was more time we'd ever had in five or six years that we'd been together at that point. And again, that was really transformative. Instead of this is what Josh is doing, this is what Allie is doing.

24:59It's like, well, this is what we could be doing. And specifically that we thing was real estate. So when you first started getting, you had what,$102 ,000 of debt, I think was the number that I heard. You got into Dave Ramsey and the debt snowball pay down thing. Talk to me a little bit about that, how your understanding of personal finances has changed since you got into Dave Ramsey and how it's evolved over time. Yeah. I'm really grateful. We found Total Money Makeover because I think it was as simple as like, well, how do you pay off debt? And Dave Ramsey popped up. And so we found that and that learned to coach us into talking about finances, having a budget, which we'd never had prior, to delineating between needs and wants.

25:41And so we started that and we took it really serious. So we were doing the, you know, the rice and beans lifestyle for a few months there. And of course, at that point, I was like, Allie, we need to sell our cars, we need to sell our material things, we need to pay off debt, blah, blah. And we skipped going out on date nights. And we realized that while there's some value to it, and I'm really thankful for, you know, some of the fundamentals that taught us, it wasn't sustainable for our life. And so conveniently, at that time in 2017, this was the author, Scott Trent, she's the CEO of BiggerPockets, released a book called Set for Life.

26:12And I remember discovering this book and it was honestly perfect because it felt like it was a roadmap that we could follow that work for our values and our lifestyle. And it didn't feel as, I guess, maybe as extreme or limiting as like the total money makeover. And so once we kind of use that book as our roadmap, if you will, it felt, yeah, we now had a clear path or a more clear path by which we could achieve our financial freedom goals. So is that reading Set for Life in Scott's book, is that when real estate really came online when you started to pursue goals towards acquiring some properties and building a portfolio?

26:52Yeah, absolutely. I mean, our biggest thing was, I mean, we were, as we expressed earlier, we were pretty low income professionals, even with Allie with a master's degree. And so now that we had a budget, there was a glaring number in our budget, which was rent. And we didn't really have the capacity back then to earn much more. And so it's like, well, we can't really earn more. So what levers can you control? Well, if we can't earn more, we can try to spend less. So we were cutting out, like I said, the date nights, the Starbucks, the Netflix and stuff like that. And those are valuable. We talk a lot about using spoons versus shovels to get out of debt.

27:26So when we actually read that book, and we realized, I think it's 70 % or so of the average person's budget is housing, food and transportation. Food, we tightened up a little bit, but really, it was our car payments and rent. And so our kind of push into real estate wasn't necessarily to build a portfolio as much as it was, what's the most expeditious way that we can greatly reduce or even cancel out our rent such that we could pay our for debt faster. And that was kind of how we got started in real estate. And that, Allie, that was house hacking, right? Your first purchase was a house hack. Tell me a little bit about that, what that looked like.

28:01Well, we were very interested in getting a first house hack to reduce our cost of living. But in 2018, which is crazy to say, because now the market is even crazier, but the market was very competitive. So we didn't really have any money. So we scraped together like every dollar we had, we plan to put 5 % down. And we were looking at properties on the MLS on Redfin that everyone else was seeing. And we were putting in offers and we were getting outbid by people that were putting in$50 ,000 more, they were paying in cash, it just seemed outrageous. So we like painstakingly put in probably half a dozen offers, eventually finding our first house hack, it was an off market deal, our realtor at the time found it for us, it was one of his clients that was selling.

28:49And it just was like the perfect situation. I think often when we think about house hacks, we think about, you know, well, you must be living in a bad area. It must not be nice. I mean, this was an upgrade from our quote unquote luxury apartment. It was three bedroom, private backyard, you know, garage. It was beautiful. It was so nice. And I think that was where Josh got the buy in from me because I saw that our quality of life didn't have to diminish. I think one thing that I'll add is very often when couples are trying to get on the same page, and we've talked to so many couples about this.

29:23One person is super gung ho about investing money, whatever the other person is kind of being dragged along. And I think that's not sustainable, because it creates more of like a power imbalance in a relationship, like we should both be equals, but somehow it reverted to like, Josh is my manager. And he's telling me what I need to do and how I need to manage my money and what I can spend money on. And I don't think that's a healthy dynamic for couples, because you should be 100 % equal. So I think that getting on the same page and getting buy-in from your partner is so critical because no one should feel like their spouse is their manager.

30:01They should feel like they are completely equal partners and we're making these joint decisions. So the buy-in is essential. And I think seeing how nice that duplex was like the first piece of buy-in that Josh got from me because I was like, oh, it's really nice. I'm excited to live here. Real estate doesn't seem that bad anymore. And that definitely helped. And just one thing I'll add to that is I was very much the Excel sheet. It's got a cash flow. What's the return on investment? Thankfully, Allie has a better perspective than I do because full disclosure, I was bringing us to the worst neighborhoods.

30:36I was just trying to find the best return on investment. I was completely negating the value of feeling comfortable where you live. And early on, there was a lot of, I think that caused a lot of strife. And so we go back to the importance of having a joint vision, sharing your values, communicating. And so the first property that we got, I think was a home run. But a lot of that was because we jointly agreed upon it versus me leading the charge and just going through what the Excel sheet said. And like you said, doing a house hack, just pursuing FI takes a lot of sacrifices. Allie, were you on board with the house hacking idea?

31:12Because you've got roommates or you've got somebody living next to you in a duplex. How did you think about that? It sounds dramatic, but I really felt like Josh was borderline ruining my life. I was so, so opposed to all of it. I was going to get my state job and work it for 30 years. and I wanted to get a nice midsize SUV and a nice two-story colonial home. And just like, you know, we went on one family vacation a year and it was this nice like cookie cutter life. And I think there's nothing wrong with that. It's the only route that I really saw because it's the only thing that I thought existed.

31:49So when Josh started saying crazy things like invest and be landlords, and it just seemed a little too wild for me. It seemed a little too exotic. I was like, I don't know what this is. It seems scary. And it just doesn't seem like the life that I pictured. And I think when we have a vision of what we want our life to look like, and then we take like a hard left turn, it's hard to get our brain into that new reality of like life can look different. So I was super opposed. Even when we bought the house hack, I liked it. But I would not call us real estate investors. It's like we're doing this to pay down our debt.

32:24We're not going to be like people that own a lot of rentals. So it was a lot of painful conversations and disagreements before I drank the Kool-Aid and got really into it. So tell me more about that. At what point did you decide, we want to build a portfolio? We want to do more than just this one simple house hack. We want to build your empire, let's say, your portfolio of real estate that is going to fuel your financial independence. Talk to me about that process, how the steps you took and the strategies that you had for that. I think that all along, Josh wanted that. He wanted it, but he knew he had to temper his approach with me.

33:02So we bought the first rental property. And in my mind, I'm like, well, after the first rental, we're going to get the single family home. And then we ended up finding a second rental that we house hacked again. It was six houses down from our first. It was great. And then I was like, well, after that one, we're going to get the single family home. But that second rental was a game changer because we lived for free. The cash flow from property one, plus everything from property two, we were now living for free. We had a$0 housing payment. And that's when it got a little more fun. We were aggressively paying down the debt.

33:34We had more disposable income. We were able to travel more. And we were seeing those quality of life ripples from making more prudent financial decisions. So then from there, it was like, well, where do we want our life to go from here. And I think once you kind of get into it and you see the potential, your mindset kind of opens up to like, how far can we take this? And I think that second property definitely opened me up to more possibilities. And I would say too, that second property came in October of 2020. Seven months prior to that, the world shut down. And similar to 2018, when I got fired and Allie and I had more time than we'd ever had prior to that to really sit down and just talk, but actually listen and kind of cast this joint vision.

34:23You know, we were both home from March of 2020 until April or May. So we had like two, well, even maybe three months or so. It was our first time being home together for extended periods of time and not just for the purpose of vacation. And I'm not saying that it was a good thing. Obviously, we all know what happened. That was a life-changing experience for us in the sense that we said, well, we own a couple of properties now. Our debt, I think we had paid off maybe half of our debt at that point. But we said, this is kind of nice. How can we craft a lifestyle where we're home together all the time?

34:57Because again, prior to that, we were both back to working nine to five jobs. Prior to that, I would drive with Allie to her job. I'd drop her off at work. We would talk about our visions. And yeah, so then I feel like that kind of further instilled in us the importance of we need to buy as many deals as possible, as well as keep our expenses low, because we'd gotten rid of car payments too. So we were living at that point on about, I think,$2 ,400,$2 ,500 a month, because our housing and transportation were almost nothing. And so then it was just like, okay, we need to do whatever we need to do to build a portfolio such that we can be together home all the time.

35:32And at that point too, we began the conversation of starting a family and how could we make that happen as well? Yeah. I mentioned my wife's a therapist and when COVID hit, she saw that couples went... I mean, it was a real test for all couples, right? You're home together day in and day out. You really learn whether you like your spouse or partner or not. So it's a really great test to see, can you run a business together too? Because running a business, as you guys know, you're doing the grind together and you've got the marriage, but it's also like Ali, you said, it's a business relationship too.

36:05Yeah, it absolutely is. I agree with you. Yeah, you're constantly, especially now as young parents, in the span of 60 minutes, we could rotate. We're husband and wife, we're co-CEOs, we're parents, all in the span of 60 minutes. So it's constantly being able to compartmentalize this work talk and transition to family or interpersonal talk. Yeah. Like mom Allie is really pissed off at you right now, but business Allie needs to make a decision with you and problem solve effectively. So being able to take those hats off and kind of put a pin in something. Yeah. Yeah, exactly. Exactly. I wanted to hear during this time, Josh, were you reading...

36:44I mean, you mentioned Set for Life, but were you listening to a lot of podcasts? Were there other books that were making a big influence on you as you were thinking about how we can escape traditional employment and get financial independence? Yeah, I remember reading the book, Seven Habits of Highly Successful People. And I think one of the things that they talk about in the book is basically turning your car into a virtual library, if you will. So I will say in this was 2017. So from 2017 until now, anytime, you know, unless it's Ali and I, if I'm in the car, I'm learning. I always have a podcast going.

37:20I haven't really like listened to the radio in the better part of seven years per se. So yeah, I am a voracious, I could say reader, full disclosure, I struggle with sitting down with an actual book. Now put it on audio or, you know, different means of listening to it. I'll consume the same book five times and hear it six different ways each time. And so, yeah, I'm constantly learning, constantly studying. I'm grateful the fact that like, so folks like, you know, Set for Life's author, you know, Scott Trench, Chad Carson, he's another real estate investor, author, podcast host. A lot of these people have become good friends of ours.

37:53And so along with learning from their content, also learning from them directly has been really helpful just as our life in business and real estate has evolved. So I want to hear how you guys actually made the move completely away from traditional employment to full-time real estate investors supporting your life and being able to work from home and being able to have the freedom to essentially do what you want. Tell me a little bit more about that. COVID changed everything. And I don't want to minimize the global trauma that COVID caused for so many people and like the negative things. But like for us, a lot of there was some positive that came from COVID in the sense that we were home together for three months and we wanted more.

38:39We were obsessed. We loved being able to have time with each other than like I'm grumpy in the morning and I'm exhausted in the evening. I think that I was a school social worker. The schools were hit so hard from COVID. So going back to the schools was really challenging and I was really burnt out. So the career that I thought I wanted for 30 years, I was like, I don't know if I can do 30 more minutes. So immediately I was like, I need to craft my exit plan. And Josh was like, this is great. Okay, let's do it. I've been waiting for this moment. Yeah, exactly. You know, so I think for us, it was we're very data driven and numbers driven.

39:18So it was very like, what do we spend every month? We spend$2 ,500. Well, how can we make$2 ,500 not from jobs to replace our income that we need? So it was really like Josh and I have been hustlers. We never had money. We never had family money, resources, network. So it was literally like, let's network our butts off. We both had full-time jobs and multiple part-time jobs. We launched The Phi Couple on Instagram, not really thinking much of it, but then realizing this can become a business within itself as well. So we just did everything we could to find different types of income streams. We continued to buy some more rentals, but slowly because we were paying down so much debt and it was really just doing it in steps.

40:04I think so often, like we had a hundred thousand dollars of debt. We need to pay that off. No, let's pay off 5 ,000. Then let's do it again. Then let's do it again. So with replacing our income so that we could leave our full-time jobs, it was the same thing. It was how can we make$1 ,000 not from W-2s? How can we make$2 ,000 and kind of just building it from there? And I think too, in like entrepreneurship land, there's like the old adage, like jump out of the airplane and build your parachute on the way down. We're way more conservative than that. And so as Allie was saying, as we kind of did all the math, we started kind of, okay, we're 25 % of the way there, 50 % of the way there.

40:40Eventually, especially once we began the family planning process, and we began the process of in vitro fertilization, and frankly, seeing the toll that it was taking on Allie, we got to that point where we knew, maybe we can't yet go, you know, leave our jobs full time, but at the least, we could drop down to 50%. So maybe work 15 to 20 hours a week for maintaining our benefits. But also, let's see how this feels kind of part time, you know, financial freedom, entrepreneurship, if you will. And it was amazing. And I think we made that transition. Was it 2022? Everything we've done has been in steps.

41:16Like we quit our full-time, now we're part-time. We quit our part-time, now we're full-time entrepreneurs. So we've been very cautious with it and calculate it. And I think that's helped us. That's a really good way to think about it. Instead of just going cold turkey from a W2 job to nothing, kind of scale it back. Take some part-time work, take some side gigs, work your way towards that. That's a really smart way to do it. I wanted to talk a little bit about how you thought about paying down debt versus making investments in real estate, let's say. So let's say you had a high credit card, 18 % you're paying.

41:48That's a pretty good return to pay that off. Talk to me a little bit about your strategy for how you used your money, whether to decide to pay off debt or to use it to buy a new investment property. Well, I think the first challenge that we faced, as we've alluded to, was we had limited income and we weren't in industries where we could radically increase our income. So number one was how can we reduce our expenses? Because that's something that felt like it was more in our control. So we invested money to reduce our cost of living by house hacks. So that was number one, we optimized our expenses and got it as low as possible.

42:25From there, it was this cool scenario of we have some disposable income now, do we use it to further pay down debt or to invest to make more disposable income. We balanced it with quarterly goals. Josh has 20 whiteboards and we're big on goal planning and setting this kind of stuff. We do it by quarterly sprints. Quarter one, we're focused on debt payoff. Quarter two, we're going to save money towards rental properties. Quarter three, we're going to recoup. Quarter four, we're going to pay some more debt. Instead of, again, looking at it like we need to pay off$100 ,000 by breaking it up into more smaller manageable chunks.

43:02It helped maintain momentum and motivation. And it kind of kept it fresh. It wasn't so monotonous. Like every 90 days, we were kind of shifting focus a little bit. I'd agree with you. We always prioritize very high interest debt, but it got to the point where like student loans are at 5%. So we wanted to pay those down because there was the emotional component. but we were pretty good with pivoting back and forth to have a balanced approach with that. And we also knew, frankly, our debt to income ratio, especially when we got started, our lenders were very transparent with us. They're like, I think we can underwrite you.

43:37This is pretty tight. But if you shave off some of that debt, knowing what you guys want to do, it'll help you. So yeah, we would buy a piece of real estate and then which inherently would add to our balance sheet. Yes, good debt, bad debt. But either way, it didn't always help our debt to income ratio. So then it just became a matter of we were kind of like almost interest rate agnostic. It was just like, what's the thing that's going to increase our probability of getting another mortgage? Oh, we have to pay down X amount of debt. And sometimes we had it down to like a specific number. Okay, let's pay that down.

44:08So that when we go to buy that next rental property, our probability of getting qualified so we can subsequently buy would go up. And then we kept doing that until, I think it was February of 2022, we submitted our final student loan payment. And again, that was a pivotal moment because no longer it was, well, do we pay off debt or do we buy more real estate? It was just, well, now we can just invest. It was exciting. And that was one of those hockey stick moments for us. Let's take a quick break and hear from today's sponsors. Hey, it's Sean O'Malley, just popping in with a quick message. If you like this podcast, well, I've got great news for you.

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47:53That's theinvestorspodcast.com slash tip-finance. All right, back to the show. So I wanted to get into your buy box. When you guys are looking for properties to buy, what are you looking for? Are you interested in doing a value add? Are you looking for something right out of the gate that's going to cashflow? Talk to me a little bit about what your strategy is there. Yeah. So for us, we always joke, we're not Chip and Joanna Gaines in the sense that we're not doing these heavy value add, full gut rehabs and stuff like that. It looks great on the internet. For us, it would just be really overwhelming.

48:29So for us, we always would try to find properties that weren't so much distress, but maybe the owner had some type of distress. Are there problems that we can help solve? And in a roundabout way, that's actually something from our human services background is our focus was never the property, it was on the person. And so that kind of gave us at a time when real estate gets progressively more competitive. That was always something that kind of gave us a unique edge, if you will. But we like properties that are in, I would say, B-class neighborhoods, small multifamily, so two to four units within close proximity to a walkable downtown.

49:03I joke, but I'm pretty serious about it too. I always like to buy within, say, two to three miles of a Starbucks, as well as maybe like a Target or Home Depot, these big economic drivers, because they have a bunch of data that says this is a fortuitous area for us to operate. And then if there's ways for us to improve the property from a cosmetic perspective, great. A lot of the properties that we buy, the owners have had it for a long time. So the rents are quite a bit below market. So we can improve the operating efficiency from there. I want to say too, for folks that are listening, that might be like aspiring investors or new investors, Josh just very articulately rattled off the buy box that we have.

49:41When we were looking for our first even second rental property. It was like, I want to feel safe here. And I don't want it to be like a total horrific property. We did not even know what the word buy box was. It was really like, I think that oftentimes we ask investors, what's your buy box? And if you're new, that can feel overwhelming. Like you may not know what your buy box is. We didn't realize certain aspects until we got a few properties under our belt. And we're like, oh, we definitely need to look for this in the next one. So I think the more experience and time you have in the game, you really refine what makes sense for you as people and investors.

50:21As Josh said, there are many people doing way more exotic and crazy things in real estate. We're pretty basic and we're going on fundamentals and it works for us. We're not doing crazy gut rehabs. We're not buying mega complexes. We're consistently buying one to two properties a year and it's going to get us to our goals just fine. So I think it's really knowing who you are and what you want to take on and what you want your life to look like. And then that will help you inform what types of properties and investments you want to make. And are you guys doing your own property management or do you farm that off to somebody else?

51:00So we self-manage our units in the sense that we are our main point of contact for all tenants and contractors, but we definitely hire out for the vast majority of work that needs to get done. So if we have a property maintenance issue or something like that, we definitely hire that work out. But we are still very, very hands-on with speaking to tenants and turning over units and finding new tenants for our properties. Because I think that... I don't know if I'll ever be able to hand over the reins for that, because I think no one cares more about your property than you. And it's really important that we have people in there that are responsible and going to treat the spaces with respect.

51:41And then as our portfolio has grown, we still manage most of the bookkeeping, but we also have a CPA in service to help manage that as well to optimize those tax deductions. We talked about that you were on the podcast with Robert Leonard about three years ago. So I wanted to hear a little bit about how Ali and Josh have changed from three years ago to how you are now, like how your mindsets have changed, how your strategies have changed, just how you're different from those people three years ago that did that interview with Robert. I think one of the biggest things is, so I was an entrepreneur already.

52:16And I, in the sense of when we did that interview, but even then my understanding of what my value was, like limiting beliefs around the value of our time. And for us, we'd always been nine to five workers and stuff like that. And other people always told us, this is how much your time is worth in essence, And this is what will pay you for your time. And so I would say that today as predominantly real estate investors, but also entrepreneurs, understanding the earning potential, depending on the skills and knowledge and expertise that you have, I think that can be incredibly important. And something that, you know, Allie brought up prior to us kind of getting on is maybe early on when you're just getting started, not having a lot of money doing scrappy things.

53:00Sure, you have to get started there. But I think sometimes what I see too much on the Internet now is kind of this like, let's just quit your job and figure it out. Quit your job. You don't need good credit. You don't need any money. You can buy a bunch of rentals and get rich. And like, I think that right, as Josh said in the beginning, we had no money. We didn't have resources. We were very scrappy. And we were also very fortunate that nothing went wrong. But now on the other side of it all, it's a little terrifying to think what would have happened if things did go wrong. We would have had to put repairs on credit cards, we would have gotten into more debt, and we would have had to figure it out.

53:39But now looking at it, I think we have a more balanced perspective of like, it is important to have savings and cash in the bank and reserves and then more reserves for your reserves and plans and systems in place for when things break and when things go wrong, because they will. We have to replace a roof and we're getting quotes upwards of 20 ,000. We ended up finding one for a lot less, but like these are things that can happen and you need to be prepared. So I think that we definitely have a more, I don't know what word I want to use, but our perspective is a little more. I think it's a more balanced mindset because I think, yes, we have come to better understand that your time can be worth so much more than maybe what a traditional nine to five job will pay you.

54:25But on the flip side, until 2023, so last year, we both had part-time jobs, nine to five jobs, which was a huge asset. I think something people don't understand for those who are interested in real estate, they're very eager to leave the nine to five job because they don't need a job. Well, how are you going to qualify for a loan? Banks really like W2 work. I can't tell you how many people, Patrick, I've spoken to who quit their, quote unquote, dumb nine to five job to be their own boss. And then they thought, yeah, I'm just going to walk into a bank. And the bank said, great, come and talk to us two years from now when you have consistent work history.

55:00So I think, yes. So one, understand that your earning potential is much higher than what you thought. We didn't really understand that in 2021. We have a better appreciation for today, but also understand that what a valuable asset a good, fair nine-to-five job can be and use it as long as it makes sense and build everything else in conjunction with it. So I wanted to hear a little bit maybe about... We talked a little prior to the interview about seller financing. So definitely, I agree with you that having a W-2 in place is really important when you're getting started. It's really hard to find traditional financing.

55:36Otherwise, you're not going to find it probably. But talk to me a little bit about seller financing, because it seems like that's an arena that you're exploring or have views. Yeah, I think, I almost feel like we're kind of in a golden era a little bit, where the rate of people who are, I think, turning 65 or retirement age every day is like 10 ,000 people. So I would wager that most of the real estate, rental real estate that's owned by small landlords, most of those people are probably nearing retirement age, at retirement age, et cetera. So that's where most of the real estate is owned. We interface with a lot of people who are at that age and most of them, they like the monthly income.

56:15They're not interested in fully selling off their portfolio and taking on a really big tax hit right now. And so they're open to being creative. And a lot of times they have no debt against the properties. And so for us, especially as we were venturing into understanding how can we continue to grow our portfolio, but we can't always put down 25%. Or we don't want to. Or we don't want to. So that kind of forced us to learn what's often referred to as creative finance. And one of those strategies that we've used, we're about to use it again here in a couple months, is seller financing, where instead of us having to do what a bank tells us, the owners of the property become a bank.

56:52So we can negotiate what works best for everyone. And again, to go back to our human services background and how it parlays into real estate is what problems do these sellers have? How can we solve those in a mutually beneficial way? And so we have retirees right now that act as private money lenders. And so we're supplementing their retirement income. And we also have retirees now who are owner financing multifamily properties to us, and we're helping supplement their retirement income that way too. So it's mutually beneficial. How do you go about finding those people and how do you educate them?

57:27Because I imagine in a lot of cases, there's a lot of questions, let's say for a retiring baby boomer, they don't know what you're proposing really. So talk to me a little bit about that process. Yeah. So our biggest thing is, I mean, we network a ton. I think sometimes people want to just spend time scrolling on Zillow and in their mind, that's how they're actively searching for real estate. And in our experience, maybe more than any other industry, real estate is a people business. So Ali talks a lot about we let people know who we are, our backstory. We're grateful to have the social media platform that we do now where people can learn more about us.

58:03But we're constantly networking to meet people. And then through those conversations, better understanding the type of portfolios they have, but then also kind of what their vision is beyond real estate, what kind of lifestyle they're looking to have. And then if we get the impression that maybe the properties they own, again, these individuals tend to be a little bit older. If they're not really interested in managing real estate anymore, and we understand that the goals that they have align with something that would work for seller financing, then we open up those conversations more. Yeah, I think for us, we really...

58:34And again, this is helpful because we invest where we live. So we're able to do a lot of more personalized networking, but we're very big on being active members of our community, getting to know other investors, other real estate agents, people in our area know who we are, and they know where we buy and invest. And that's not an accident. And we try to communicate that pretty clearly to everyone in our life that we know. And I think when it comes to seller financing and those more creative deals, having that relationship and being what we term ourselves as like professional problem solvers, that's important.

59:10And I think for us, whenever we're approaching anyone about a deal, whether we're looking for a private lender, or we're interested in seller financing, we never want to make anyone feel like pigeonholed or pressured, like, can you lend us money? It's more, we're looking for private lending opportunities. We have this deal, here's the numbers. Do you know anyone in your network that may be interested? And when you frame it like that, I think it takes the pressure off of the person and it can make them more receptive to different opportunities that you may have. Yeah, those are good points. So you do you guys actively go to real estate meetups in town?

59:46And I mean, you're obviously active online, but it sounds like you've really gotten engaged in the community with the realtors, brokers, things like that. I will say I'm so grateful we did all of this before we had a kid because like life has gone out the window with a newborn. But prior to being parents. I mean, Josh has probably taken every person in real estate out for coffee in our city and just pick their brain and connect with them. So I think a ton of networking. We did go to a lot of real estate meetups. At this point, we're six years in it. The networking has paid off to the point where we have so many connections.

1:00:20We don't need to actively network as much. But with that being said, we're always talking to people in the space and all of that. But yeah, I think that sometimes it's like, well, I'm on Zillow or you want that easy button to find deals. And in our experience, finding deals comes at a cost and it's either your time or your money. So you're spending your time actively networking and making connections, or you're spending your money on people that can do like direct mailers or cold calling for you or other ways to get access to deals. So I think that there's no easy button or like passive way to get those deals.

1:00:54You're spending something. And something I would say, too, is like playing the long game. So for instance, in 2022, we bought an off-market three-unit deal for$190 ,000 cash. Now,$180 ,000 of that was someone else's cash. And the property came to us from a lawn care service provider who I had been networking with, and we had personally used their service for two years. And always kind of putting that in their ear. Hey, we're looking for our next property. This is what we own. If you hear of anything, And it was always, oh, yeah, I'll let you know. Well, one day after two years of letting them know, he said, hey, just wanted to confirm, are you actually looking for properties?

1:01:33Why, yes, we are. We found a property and 30 days later, we had it under contract and we had simultaneously been networking with a retired couple who subsequently became the lender on that. So always working those relationships. And I always tell people like a lot of times for assets, when people think of assets, they think of maybe real estate or stock or business or cash, social capital, social equity. It grows faster than probably anything else, especially if you nurture it. And that's been paying dividends now for us for many years. How do you build that trust? For somebody that's interested in a private loan and approaching people, do you have any recommendations on how to build trust?

1:02:12Because for somebody to give you$180 ,000 and loan it to you, that's a difficult ask for a lot of people. So any thoughts on that? I think that what's really important is, again, getting to know someone and maybe sharing your background and your story and your experience. I think for a first time investor to get private capital, it may be a little more challenging because you don't necessarily have like a real estate resume that you can show them of this is my experience. This is what I've done. But I think a lot of times when people are looking for private or hard money, they're going to first maybe handshake relationships that they already have family, friends, maybe they need to go more out beyond that.

1:02:51If they don't have that immediate circle, which we didn't have family and friends. So it was more so networking. And for us, we're very data driven. So we had a property that we were looking at, we had an entire write up of the property, this is the cost, this is what we think that after repair value is, this is what the rents are going to be. And this is what your return on investment would be. So we just had all of that. So it was very, it's not like, hey, can we borrow your money? It's very much like this is an opportunity, if you know of anyone, we'd love to talk. And I think that comes across in a more professional way.

1:03:24Yes, it's a people relationship building, but it's a business. So we really try to be as professional as possible. And one thing we really advocate for more now than ever is building your digital resume. I can tell you that over the years on our personal Facebooks, whenever we were buying a property or fixing up a property or just in different real estate related activities that we're doing, we were making posts on Facebook and it wasn't for the purpose of getting all these likes and comments or anything like that. Full disclosure, I knew that someone would see that who was also a real estate investor.

1:03:57And maybe it wasn't on the first post, the fifth post, the hundredth post. But at one point in time, someone would see that and it would be the right time in the right place. And again, the private money lenders who partnered with us back in 2022 on that three unit deal were friends on Facebook, right? So we were sharing with them. We were showing the world, if you will. It helps with your credibility. And that paid dividends. Yeah, I think that's such a huge strategy that people overlook. And it's easy to do like you're doing the project. So just take some photos and throw it up. And people, like you said, are going to see it.

1:04:28It does build credibility and trust. I had an interview yesterday with a guy who he's a tax professional, does taxes for small business owners and real estate investors. And he strictly built his practice through Twitter and Instagram. That's it. And it's incredible to me. It kind of blows my mind. It makes me realize I need to do more of So I wanted to hear actually about that, that when you guys first became the FI couple, you're on Instagram, sounded like Facebook a little bit. Did you have a strategy on how you were going to build out this social media presence and how did that unfold for you?

1:05:01I wish I could say we did, but we did not. It was during COVID. We had always said we wanted an us thing. It was Allie goes to her job. Josh goes to his job. We wanted an us. And I literally had a dream. And I woke up in the middle of the night that we should start an Instagram documenting our journey to financial independence. And Josh thought it was a horrible idea because we're not social media people. If you go on our personal pages, we weren't constantly posting. We weren't really into that stuff. So it was very out of left field. But I think the drive for it was in our real life, we had no friends or family that had any interest in real estate and personal finance.

1:05:44And it felt like we had no one to talk to. So we really were craving that community. So if we didn't have it, why don't we build it? So we did. And to our surprise, a lot of people also wanted that community. And it really helped the five couple become what it is today. But we had no content strategy expectations. I don't even think we really knew that it could be like a full on business. but it's become this incredible means of helping other people learn how to invest, connecting with other investors, networking. I think that we're much better investors because of the five couple and the people that we've met along the way.

1:06:22So, and I think too, we didn't realize how much strategy and bandwidth goes into all of that. There's a lot. It's been a learning process. That's cool. And we talked a little bit about the potential of doing a podcast. Do you do a newsletter at this point? I'm just curious how you have monetized it and grown the community. Yeah. So I think at the time of this recording, I think collectively we're right around 300, maybe 300 ,000, a little bit more collective followers. Most of that is Instagram. And then as well as Twitter, I think Twitter, we have maybe 76 ,000 followers. And then we do have a fairly active newsletter of, I think, 19 ,200 subscribers or so at this time.

1:07:03And yeah, I mean, one, including today, we've loved podcasts. Allie was actually a DJ in college. She's very talented with that. And so it's definitely something that we've thought about for so long. And then there's always been a reason, really the last year or so, two years is family planning. So I do think that'll be kind of the next component of our media business, if you will. So now it's just a matter of figuring out kind of how we want to do it and do it well. I wanted to hear if it has surprised you, the success that you've had with how it's taken off, the FI couple. Yeah, I think it was totally and completely shocking where the FI couple started and then where it's gone today.

1:07:47I think that what I will say is the biggest takeaway, especially coming from human service backgrounds, of making very little income and you have a boss and they tell you that you get your 2 % raise. And it was very like in that mindset, having a digital business, in addition to a real estate portfolio, it's really opened up our minds to like, there is such an abundance of money in the world. And there is such an abundance of opportunities. And we live in a time today where you can make money through your phone. And it's amazing. And you can, it's just, it's been really powerful for us and a big driver in our five journey.

1:08:25And I think that if someone's listening and they're interested in leaving their job or creating a side hustle, there are so many opportunities through your phone and on the Internet to do so. And I would just add that similar to real estate, where we didn't really have these big, grandiose visions when we got started, it was just kind of like a means to an end a little bit. Social media, at first, we had no idea what we were doing. It was just like, hey, a lot of these stories we hear about financial freedom, they didn't really make a lot of mistakes. They had high incomes, their family was able to help out.

1:08:55That's not us. Let's tell our story. And maybe the everyday average person can relate. Well, fast forward, we've learned a ton about social media. And we have a very robust back end system now. And it's very technical. It's very calculated in everything that we do. And so one thing I will add to people is sometimes I think the image of social media looks like, oh, yeah, you just click post and, you know, making little reels and, you know, yeah, right. There's so much time, energy and effort for a six second video, if you will, that goes into that. So if someone did aspire to make it a part time business or something that they do, there is so much that goes behind.

1:09:31But thankfully, there's also so much free information on the internet, similar to real estate, that they can learn how to make it viable. Well, it's been fun watching your guys' journey. Like I said, you were on the show three years ago, and it's just fun to see how you guys have progressed. And I wish you all the best, especially with the baby. But for people who wanted to learn more about you that maybe aren't familiar, how can they learn about you, reach out to you, things like that? Absolutely. Yeah. So we're at The FI Couple on pretty much every social platform. We have a website called theficouple.com.

1:10:02There's a contact button there. So those are probably the best ways to connect with us through one of our social platforms or directly on our website. People can learn more or reach out, but it's always nice to connect with folks that hear us via different podcasts and whatnot. Yeah. Thank you again for having us, Patrick. Yeah. Thanks, Ellie and Josh. I really appreciate it. This is fun to hear your story. Okay, folks, that's all I had for today's episode. I hope you enjoyed the show and I'll see you back here real soon. Thank you for listening to TIP. Make sure to follow Millennial Investing on your favorite podcast app and never miss out on our episodes.

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