615: A Newbie’s Investment Journey

SHOW NOTES FOR EPISODE 615: A NEWBIE’S INVESTMENT JOURNEY

Taking that first step is sometimes the most difficult task for any new real estate investor.  In today’s episode, former Hollywood actor and advertising executive Ian Gilligan shares how he got interested in real estate investing, overcame some big challenges and eventually moved into financial independence.

What You Will Learn

• How to find and invest in an emerging market
• Why real estate investing is the perfect business start-up
• The importance of surrounding yourself with people who are doing what you want to do but are more experienced and talented
• Why he moved from Hollywood to central Texas
• How the BRRR strategy is also the very best education for new real estate investors
• The importance of treating your real estate investing as a business from the very beginning
• How Ian is helping his parents with their retirement as he lays the foundation for his own retirement

Intro

I talk a lot on this show about the importance of education to your success as a real estate investor.  And, I’ve also said, the real education begins not with the training courses, home study courses, boot camps, books, podcasts, webinars, etc. (although they certainly help) but the REAL education begins when you sign your first set of escrow papers for your first investment property.

Well, we’re doing something a little different of today’s show.  Most of the time we feature people who have gone from humble beginnings to massive success.  Well, today’s guest is someone I actually first met in Haiti while we were serving there as missionaries.  Years later, we stayed in contact and he ended up getting into real estate.

He is a person who has done all the research and has boldly taken the critical first step!  The way he is moving forward,  I’m sure he will be back on the podcast but it will be more on how be amassed his first billion.

About Our Guest

Ian Gilligan

Ian Gilligan is a 33 year old real estate investor living in Waco, TX.  With a background in the entertainment industry, Ian’s interest in real estate investing was piqued after listening to an episode of the Old Dawg’s REI Network Podcast back in 2018.  A year later, he purchased his first single family home in Dayton, OH.   After recently stepping down from his full-time job in entertainment marketing, he purchased 3 more homes in Dayton, OH in the last 3 weeks, is finishing up a flip in Waco, and is taking steps towards actively wholesaling in McLennan County, TX.

More About Ian

• Born and Raised in San Diego, California
• Grew up doing theatre and acting
• Moved to Los Angeles when he was 19
• Got into acting in Hollywood for a number of years
• Found out it was not his passion so he got out of acting
• Got into advertising
• In 2018, he listened to the Old Dawg’s REI Network Podcast for the first time because he Bill and his family from a Haiti missions trip he went on
• He found the podcast with Robert Kiyosaki and listened to it and a few more episodes
• After that, he was sold on real estate as an investment and how smart a move it would be financially
• After about 6 months, he found a good potential market to invest in (with Bill’s help) in Dayton, Ohio
• In 2019, he bought his first rental property in Dayton

Why He Chose Dayton

• One of the reasons he liked Dayton is because he was studying emerging markets and saw Dayton as a market that was poised for increased prices and market activity
• As he looks back, he can see that he was right and prices have gone up significantly since 2018
• He still sees it as an excellent market where prices are continuing to increase
• He is now very familiar with the market and has a team in place (property manager, agent and contractor)
• All the pieces were in place to ramp up

Making the Move to Texas

• He was sitting in his house during the summer of 2020, just a few months into the pandemic
• He had already bought his first two properties in Dayton
• His company said that he could work remotely from anywhere
• The thought of owning his own house and house hacking really appealed to him
• But he knew that he could never do it in Los Angeles because the homes are so expensive
• Timing wise, it seemed like the perfect time to do that
• He had some friends that were looking to move to Waco and there was a church there they all liked
• He ended up moving down to Waco, buying a house, rehabbing it and renting out rooms to some of his friends
• Initially, Ian was going to have a short stay in Waco, rehabbing a house and working remotely
• He ended up loving living there
• He also liked the numerous investment opportunities in Waco (in total contrast to LA) to buy long-term cash flowing rental properties
• Also, he liked the quality of life in Waco
• Waco has gone up in price since 2018 for a number of reasons:
  • Baylor has done a lot to boost the area
  • It’s located right between Austin and Dallas (some of the fastest growing cities in America)
• He wants to continue buying in Waco
• The rental market is very strong
• He tried to buy a house at an auction in Waco
  • One of the properties he wanted to bid on, for some reason, didn’t show up at the auction
  • A few days later, a friend of Ian’s sent him a screenshot of a property he saw that popped up on a local Facebook page for local real estate investors in Waco
    • It was the exact property he wanted to bid on in the auction that never showed up
    • Apparently, a local wholesaler got a hold of the property
    • It didn’t make sense for Ian to buy it from the wholesaler
    • It looked like the wholesalers likely made $30K on the assignment fee for that house
      • That incident affected Ian in a number of ways
        • It made him want to find his own off-market leads
        • If these guys can do it, Ian figured he could do the same
        • He figured he could hold the good ones for rentals and wholesale the others

Finding Off-Market Properties

• Ian has been focused on get the lists of distressed sellers
  • Foreclosure lists from County Clerk’s office
• If you can be the first point of contact for these sellers, you have a pretty good chance of working with them
• The trick is getting to them first

What Helped in the Beginning?

• He had an initial education phase that lasted around 6 months
• At 3 months, he felt like he had enough education for him to need at that point
  • He realized, that the next phase of his education had to be the “hands on” investing type of education – learning by doing!
• He had a great broker in Dayton (Ryan Ingram) that helped him out a lot in the beginning
  • See our interview with Ryan on episode #461
  • Ian wanted to surround himself with other people who have been successful in real estate or in aspects of real estate
    • Ian didn’t know anything about rehabbing
      • He found good contractors
    • He did the same with other real estate investors, lenders, property managers, etc.

Biggest Mistake

• He wished he would have put more effort into setting up his real estate investing right as a business
• He wishes he would have had the conversations with his CPA and attorney to focus on foundation business things and systems

Biggest Successes

• Surrounding himself early on with people much more knowledgeable and experienced in real estate investing than he was
• He also was glad that his first deal was a BRRRR strategy
  • You hit all factors of establishing a successful rental property investment
    • Buy – You learn about researching markets, analyzing properties and the whole purchase/acquisition side
    • Rehab – It needs work so you have to learn all the aspects of rehabbing, construction, etc. and coordinating a rehab team
    • Rent – You become a landlord and have to learn how to find and keep good tenants
    • Refinance – You learn the whole money part – banking, credit, fees, interest rates, etc.
    • Repeat – You learn how to apply everything you’ve learned to your next acquisition – and can do it even better!
  • He was able to pull money out of that first deal to buy the next one

Advice for Old Dawgs Looking at Real Estate Investing to Help Them in Their Retirement Years

• First you need to ask yourself some questions:
  • What’s your pain threshold?
  • How involved do you want to be?
    • It’s not terribly complex but it is a lot of hard work
  • How much effort do you want to put into this?
• Once you can answer those questions, you can determine your level of involvement:
  • I’m all in and roll up your sleeves and go
  • I’m interested but will need help:
    • Find a partner or partners
    • Find a young person who has the time and energy to do the time-consuming stuff
  • I want to be a passive only investor
    • Invest in syndications
    • Be a hard money lender

Plans for the Future

• He wants to make sure his parents are set for retirement – help them build up their portfolio
• He also wants to grow his own portfolio so that it can sustain itself
  • If one of his properties, 6 months from now, were to take a bad hit, for example, because some tenants trashed the place, that could hurt pretty bad right now
  • But, when he has 10 or 20 properties, later on, that wouldn’t hurt as bad and he could recover fairly smoothly
• Once he “earns his stripes,” he would like to syndicate some deals
• He wants to become known as a “trusted operator”
  • He has private money he has borrowed and it starts with them!
• He wants to hold onto his properties as a hedge against inflation and taxes and to hold on to maintain great rates for his long-term debt

Rap-It-Up

• Favorite Real Estate Book: Long-Distance Real Estate Investing by David Greene
• Favorite Business Book: The 12 Week Year by Robin P. Moran
• Favorite Website for Success: BiggerPockets
• Favorite App: Things to-do list
• Favorite Quote: “I am the way, the truth and the life. No one comes to the Father except through me.” – Jesus Christ
• If you lost everything – all your assets – and had to start all over, knowing what you already know, and you only had $1,000, what would you do to re-launch your real estate investing business? … I would buy a computer and go to the first real estate meet-up I could find.  I would pay for the appetizers.  And then I would just start working the room..”

How to Reach Ian

• Email: ianrgilligan@icloud.com

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