Table of Contents
[00:00:00] Scott Dillingham: Welcome to today’s episode. I have a really cool guest today. His name is Scott innocent date. He worked full time. At a government job, then he became a multi property investor. And now he’s a full-time real estate agent. So welcome to the show, Scott.
[00:00:17] Scott Innocente: Thanks guys. I really appreciate you having me on.
[00:00:18] Scott Dillingham: Yeah, no worries.
First time I’ve had another Scott on the show, so it’ll be fun.
What were the
[00:00:22] Scott Innocente: last time?
too. I want to be the only one.
[00:00:24] Scott Dillingham: There
you go. No, that’s awesome. Scott, I’m very curious about how you got started. Like what. What gave you the idea to go from a full-time government job to an investor?
[00:00:36] Scott Innocente: I hear this story a lot. So I think this is going to resonate with a lot of people, but basically I was out of job that I just felt unfulfilled that, and.
10 or 11 years in the same position where it just feels like a dead end.
It had me thinking for 5, 6, 7 years. I was thinking of ways to escape. I just. All that ever came to mind was another job. So it was kinda like I’m just, I’m gonna trade this job for another job. It’s gonna be the same problem.
And somewhere along the way, I had a friend of mine, a colleague at my old job who.
Kept talking to me about real estate investing.
And I just, I, the light bulb didn’t go off for me for probably a couple of years. And then one day clicked. Wow. Real estate is really powerful. It’s more powerful than I thought it really is. The ticket to financial freedom.
[00:01:18] Scott Dillingham: Yep Once
[00:01:19] Scott Innocente: I click happened.
[00:01:23] Scott Dillingham: Yep
[00:01:24] Scott Innocente: And I started the process of getting my real estate license. And then in the meantime bought my first couple of properties. And the rest is history, but it started with a light bulb moment. If I had to say
[00:01:36] Scott Dillingham: no. That’s awesome. I know
it did too. I was working full time. It was really tough. I read rich dad. Poor dad. Yep.
[00:01:43] Scott Innocente: Yup. Me too. Me too.
[00:01:44] Scott Dillingham: Yeah. And then that opened my eyes to investing. And the one thing that I tell everybody that’s a new investor is once you get that first rent check,
It becomes the easiest money that you’ve made.
because you just sit on your couch at home And the rent checks come in. So to me, it’s the most addicting type of income to make because it’s you do the least for it. So you find that too, so that’s awesome.
So now. So obviously you’re so you’re a multi-property investor.
was the motivation to become a realtor? Yeah,
[00:02:17] Scott Innocente: Originally I didn’t actually want to be a real estate agent.
I got my license so that I could buy my own properties, access to the MLS show properties to myself. Anytime I wanted. It was. It’s just a tool as an investor. Nice. And along the way, I just happened to the real estate agent I was using before I was licensed. Paul Germany’s, he was starting a team up AWS for you.
[00:02:37] Scott Dillingham: along the
[00:02:37] Scott Innocente: I told them I was getting licensed and he said Hey come join my team. And I was like I don’t really want to be a real estate agent. Yeah.
But I knew, he’s a really successful agent.
The team seems really cool. We get along great.
Maybe I should give this thing a shot.
And also would fast track me, quitting my job.
because now I’d have a source of income. So anyways I took the leap. I joined the team all while, I’m still buying real estate.
And I found along the way as I’m starting to help other people, because I know where I came from. I came from a government job and I started hearing the same story from clients and customers over and over again. They’re thinking the exact same thing as I was thinking. Yep.
[00:03:13] Scott Dillingham: And
[00:03:13] Scott Innocente: they’re looking up to me because I actually did it. I actually left my 11 year government job with a pension and a hundred K salary and the golden handcuffs as we sometimes call it. Yeah.
So I really resonated with other people and they resonated with me and helping people do what I did is now become a passion of mine. And.
awesome. Very fulfilling, very rewarding.
[00:03:32] Scott Dillingham: No, that’s awesome. So is there anything mindsets related that you had to go through to make that transition, or you just instantly knew, like I want to be an investor.
[00:03:44] Scott Innocente: question. So a couple of mindsets come to mind. Number one is fear.
[00:03:48] Scott Dillingham: Yeah and I
[00:03:48] Scott Innocente: want to let people know that fear can be packaged in a lot of different forms. It can be packaged in the market’s going to crash It can be packaged in. I’m not going to get good tenants. It’s it can be packaged in
Trying to time the market or predicting blocks Swan events. or I know that this is going to happen in the next year that they’re going to raise interest rates and then all buy right. But it’s really fear.
Putting itself into a form that makes you feel good about yourself for not doing anything.
Ah, that’s a big one. And then number two would be analysis paralysis, which is something that I suffered from when I started. which is thinking that I needed to learn more and more.
and watch more of YouTube videos and listen to more podcasts.
and go on more forums and read more books. And learn more strategies. And I actually wasted a good year and a half to two years doing that. And in that time I actually made no moves.
[00:04:36] Scott Dillingham: Okay.
[00:04:37] Scott Innocente: want to tell people, especially beginners out there. Michael Jordan didn’t become a good basketball player by reading books. Okay. He became a good basketball player by getting it in the game over and over again and taking those shots, those big shots over and over again, to get against good competition.
[00:04:50] Scott Dillingham: Yep.
[00:04:51] Scott Innocente: So you only need a very baseline level of knowledge for really anything in life. And the real knowledge is going to come from doing and stop don’t waste a year or two, like I did. And maybe you’re the same way Scott out and all, but. The what the analysis paralysis.
[00:05:06] Scott Dillingham: I didn’t, I was forced into it. I did I took a rich dad, poor dad course there was two of them. I did wholesaling and I did rent to owns.
What I did was I found a wholesaler and what I was going to do is I was just going to find the properties.
And sell it to this guy. And he said he would buy it. So for me, I was like, great. So I went out, I found a home, he told me to put in a cash offer.
because if there’s conditions, you’re not going to get it, whatever.
So I put in a cash offer.
Then I gave him the offer. Like I signed it to him or tried to anyways, and he was gone.
He totally ran away.
So it actually, like I knew I wanted to invest in real estate.
But that forced me to do it. And it was a crappy property.
Like it needed Everything.
but I’m so thankful because I learned all my mistakes and everything were on that house.
Awesome. And we Renovated we had to do everything.
on it like roof. We had one of those octopus furnace things.
knob-and-tube wiring kitchen bathrooms. So I was forced into it. So for me, I didn’t have that problem, but after going through everything, I realized there was nothing to be fearful of
[00:06:05] Scott Innocente: And that’s why there’s the old saying, right? When you burn the ships or
[00:06:09] Scott Dillingham: Would there
[00:06:10] Scott Innocente: Where there’s no turning back. You put your back against the wall. That’s when people are typically most successful, I find is because you have no other choice.
And that’s why I quit my job. I, I was doing real estate for about six months.
Yeah, and I ended up quitting relatively way quicker than I thought I thought.
I was gonna be at my job.
For five more years.
And I say, you know what, it’s time to burn the ships. I’m going to put my back against the wall. And that’s when you work the hardest, that’s when you figure things out the most. That’s when you have to start making moves because you have no choice. So
[00:06:35] Scott Dillingham: Yeah
[00:06:35] Scott Innocente: it’s a blessing. Sometimes. Yeah.
[00:06:37] Scott Dillingham: And to touch on the other fears,
I think a lot of people like it’s fully self.
imagined and it’s not even a real fear.
Because when you learn and you.
Like you get a property manager, then you don’t have those bad tenants.
When you run the numbers you don’t need to make a thousand, 2000 a month profit, but even if you make a couple hundred. Off the cashflow.
You’re good. So I agree with you. I think fierce a lot of people, even today,
with what’s going on in the world, there’s a lot of fear out there.
[00:07:04] Scott Innocente: only way to get over the fear is by doing it. And like you said,
as I was afraid on my first buy, my first couple buys.
But then you realize, like you said, oh man, there are actually good tenants out here. Oh man.
If I just buy a good property, I’m going to get good people. If I buy a good location. Okay. I know the city pretty well. I can do this. And then all of a sudden after property two or three, my fear has gone. I don’t have any fear anymore.
[00:07:24] Scott Dillingham: Yep
[00:07:25] Scott Innocente: Because I know what I’m doing. But the only reason I got over that fear is because I. Did it, despite the fear
[00:07:31] Scott Dillingham: and
[00:07:32] Scott Innocente: get over it, but the fear will probably be there for most people to start. And that’s fine.
[00:07:36] Scott Dillingham: And what I tell people too, is it’s all in your team. So they could call up any real estate agent, or they could call someone that specializes in working with investors like yourself. So when you work with someone who’s strong, that understands real estate.
You can throw those fears out the window because.
you’re going to help. I’m sure you help guide your clients and show them what’s right. And what to do. And
[00:07:57] Scott Innocente: percent, nobody’s going to know the Mar the average. Person’s not going to know the market better than me. They’re not going to know the little. This is what I do every day. Basically. Yeah. If you that’s a good point. If you work with somebody that’s not an investor agent.
They, there’s a risk that they’re going to put you in something that’s not right.
It’s not cashflow positive or it’s not the right location to get good tenants.
[00:08:14] Scott Dillingham: Yep they
[00:08:14] Scott Innocente: haven’t been through enough.
Investment experience to guide you properly. So.
really good point.
[00:08:19] Scott Dillingham: Yeah, No, I agree.
So we have to take a quick pause here, but as soon as we come back, I want to go into some issues that I’ve experienced in you’ve experienced with investors, with buying properties.
And how they overcame them. And.
we’ll go from there.
[00:08:32] Scott Innocente: forward to it.
[00:08:33] Scott Dillingham: All right, we’ll be right back.
Okay, welcome back. So over the quick pause there, Scott and I were talking and he had a really great story. So one of his clients went to a real estate agent to buy an investment property. And it was a terrible scenario and then they met you. So why don’t you tell us about that? Yeah,
[00:08:54] Scott Innocente: It comes down to, again, working with an agent that doesn’t specialize in investment properties. They haven’t seen enough bad stuff to know what to avoid. So essentially.
My client. Now my now client ended up buying a duplex with a third illegal basement apartment. Okay. And what I would classify as a D minus west Windsor location, close to a strip club. And.
The big thing with real estate people have to understand is that if you’re going to make a lot of money in real estate, it’s going to be over a long period of time.
A property will generate you a lot of wealth, but you have to hold it right. You have to hold that asset. So what happens when you buy a crappy property is you don’t want to hold it because you’re having too many headaches and you end up selling the asset and not partaking in the longterm gains. Yeah, so sure, sure. His day he somehow got ahold of me. I don’t know if he followed me somewhere or whatever.
Told me his story.
And ended up basically working with me to sell the property, to sell the asset. And.
He maybe made a little bit of money, but five, 10 grand or something like that, because it’s hard to lose money in real estate, even when you buy wrong, it’s really hard to lose, honestly.
So we ended up making a little bit of money, but now that asset is nowhere to be found. He’s back at square one with zero assets.
[00:10:01] Scott Dillingham: Yeah.
[00:10:02] Scott Innocente: the agent put them in a bad situation and I don’t even blame the agent. I honestly. I just think the agent didn’t know any better. He didn’t know what kind of tenants that property would attract.
And they were social assistance. Tenants low income. headache after headache, misread payments, et cetera. Yeah.
[00:10:18] Scott Dillingham: Nope.
And I fully agree it probably wasn’t the agent’s fault. It’s just lack of knowledge.
You don’t know what you don’t know.
Just like with lenders, right? If the client goes to one specific lender,
but You don’t know if they’re brand new, if they work with investors, because every lender will say, oh yeah, we do rental properties.
[00:10:36] Scott Innocente: I’ve seen a lot of my clients go to inexperienced mortgage blenders, or banks like the 21 year old kid that just started as a mortgage lender at one of the big banks. They don’t have the psychology to guide you property. They don’t know. It’s not their fault.
Yep. They’re not investors. They don’t understand the game and they’re going to end up hindering your future growth because they’re not going to put you in the right product.
They’re going to foot you. It puts you in a fixed. Five-year fixed mortgage. Yep. When really you want to refinance that property next year. There’s a lot of things that are going to limit your growth. And the biggest things got my opinion is they’re not going to help you psychologically. They’re not going to give you the right advice and say, yeah, do this and this. And we can help grow your portfolio. They’re going to.
They don’t understand enough to.
[00:11:16] Scott Dillingham: My
[00:11:17] Scott Innocente: job is not necessarily finding somebody a good property. That’s a big part of it, but it’s really the psychology. I’ve seen the barriers over and over again.
And I know how to break them down because I’ve done it for myself.
[00:11:28] Scott Dillingham: Yeah.
no, I fully agree.
And Jay, just to touch on that, there is a specific order of lenders that clients should apply for. Just to give you an example and touch on that.
So I’m just going to make up one right now. Not even make it up, but I’m not going to say the lender, but just the scenario.
So there’s one bank who will do five properties.
And that’s, it doesn’t matter if those properties are mortgaged with this lender or not.
They’ll do five. There’s another bank who will do five on top of whatever you own.
So people don’t know that.
So if you go to that second bank first,
Cause they only do five in total.
You just threw out five properties that you could have purchased. That’s a
[00:12:06] Scott Innocente: great point.
So Yeah. Instead of going to 10 very easily. You’ve limited yourself to five with a big, a lender bank at gray rates.
So you’ve not gotten, and I was aware of that, so I would tell my clients the same thing. Yeah, but another investor agent or another mortgage broker would not guide them properly or put them in those right.
[00:12:24] Scott Dillingham: Yeah, and less, their focus is real estate investing
[00:12:27] Scott Innocente: and growing. your portfolio.
past one or two
[00:12:30] Scott Dillingham: Exactly Yeah.
[00:12:31] Scott Innocente: And this is the psychology of the investment game, I understand that. It’s not about one property. It’s not about two it’s about 10, 20, 30, 40, 50. A lot of times for a lot of people.
[00:12:40] Scott Dillingham: No, it’s true. And so one of the biggest issues that I found with clients that go with a realtor and you actually did touch on it in your example. So I feel like I’m repeating myself a little bit, but it really is an agent that doesn’t understand investing. We’ll sell any property.
Where an investor focused agent will focus on the location of that property. What’s going on. Is there a school nearby Do the tenants? Have kids.
Like those things are important.
[00:13:02] Scott Innocente: three rules of real estate?
and The number of people and agents that I see violate this rule because the ROI seems higher on paper.
or because the property is cheap. Is astounding to me, basically. I’ll tell my clients straight up. If you like, I’m not going to let you buy a bad location. If you want to buy those types of properties, go work with somebody else. Yep. It’s just not my game.
It’s just not my game. Now that being said, I’m smart enough to spot the next up and coming neighborhood. Or that neighborhood that’s about to turn.
But those really crappy neighborhoods that I know you’re going to have headache. Yep.
You’re not going to blame me for that.
[00:13:36] Scott Dillingham: No exactly
And for those people that live in the west end as well, I do want to say the west end is not a bad area, but for your client,
Right next to a
[00:13:43] Scott Innocente: plenty of, yeah.
right? So there’s a lot of different
[00:13:54] Scott Dillingham: And
[00:13:54] Scott Innocente: also don’t buy an extra strip plug as an
[00:13:56] Scott Dillingham: problem
[00:13:57] Scott Innocente: Yeah. Yeah, I’m not blanketing. The whole west
[00:13:58] Scott Dillingham: Unless you’re a pimp. Yeah, exactly.
[00:14:00] Scott Innocente: But yeah, the whole.
west end, is it not by any means that I have more mean like the student rental area then certain pockets there’s bad pockets everywhere, by the way.
[00:14:07] Scott Dillingham: No. Absolutely. Absolutely. So that’s great. So on your end, so you’re going out with a client. What are some issues that you see for maybe financing or anything in general?
[00:14:17] Scott Innocente: a, it comes down to psychology again. Right? A lot of people start with this mindset of I’ve got a, they’re trying to plan for their 10th property.
[00:14:24] Scott Dillingham: Okay Or they bought
[00:14:25] Scott Innocente: one.
[00:14:26] Scott Dillingham: Yep.
And when you
[00:14:26] Scott Innocente: have a goal that’s too big for you to digest. A lot of people end up stuck, right?
Oh, I can’t buy this duplex because it’s going to take all my money and I’m not going to be able to buy my second property.
[00:14:35] Scott Dillingham: And I’m
[00:14:35] Scott Innocente: like no, don’t worry about that. Buy your Pyre first. And they also have this belief that they can only get five properties or two or three properties.
[00:14:43] Scott Dillingham: So
[00:14:43] Scott Innocente: they don’t have the I’ve talked to you plenty of times. I know there’s ways to get 10, 15, 20 properties with working with somebody like yourself.
[00:14:50] Scott Dillingham: Absolutely. And there’s three sort of separate types of lenders and what they’ll use for rental income. So for an example, let’s say you buy a house and you can rent it for 2000 a month.
Most of the big banks and big lenders will only use half of that rent.
So they’ll use a thousand to help you to qualify.
But then we’ve got other lenders with comparable.
rates. So it’s not like you’re paying a premium, so comparable rates and they’re going to use between 80 to 100%
of the rental
[00:15:15] Scott Innocente: Such a big difference.
[00:15:17] Scott Dillingham: Right there, your client Can qualify for more.
Which is great. but
[00:15:21] Scott Innocente: that’s going to your debt service, coverage ratio, and everything else is going to keep your ratios and balance. when you have that high income.
And because Windsor’s an affordable city your rent is high relative to the purchase price. So that will allow you to scale.
way easier, especially if you’re just working an average job or you don’t have a ton of money.
[00:15:38] Scott Dillingham: Yeah Just start with.
you The one other cool thing.
And, I don’t want this to be too much about us, but the one other cool thing that we try to do is a lot of lenders out there when they’re capped out or having financing issue with the lenders, they’ll go to a B lender or a private lender. And we do have those options, but we try to skip that because we have a commercial department.
And for investors, commercial is similar rates as residential.
And you don’t have all those expensive.
Interest rates and bad terms and stuff. So we shift them to commercial instead of be lending and private, and it’s so much better.
[00:16:10] Scott Innocente: huge. That’s huge people. There’s a lot of people out there that don’t have a ton of financial capacity to start and.
[00:16:16] Scott Dillingham: yep.
[00:16:16] Scott Innocente: Talk to somebody like Scott. You’re going to scale your portfolio double or triple with this type of advice.
[00:16:22] Scott Dillingham: Yep
[00:16:22] Scott Innocente: Then you would work in with the wrong people.
Like it’s very simple.
That’s great. That’s a great program. I’d like to hear more about that actually.
[00:16:28] Scott Dillingham: Yeah, for sure.
I’ll definitely show you more for sure. Now.
Cause we don’t have too much time left, but if you would say like you had one really good piece of advice for investors, and I know we’ve spoken a lot here, especially mindset, because I do think mindset’s one of the biggest things.
But is there a tip or strategy that you would give that’s quite universal. that’s really good.
[00:16:49] Scott Innocente: very simple for me. There’s basically three rules.
That I operate under number one is location.
It’s gotta be a good location. doesn’t have to be the best, but it just has to be good better than average. even slightly.
Good location, good property, which means the property is going to attract good people.
It’s not going to be a money pit. It doesn’t have a foundation crumbling, or if it does, you’re aware of it and you get a discount. Yeah, and you’re going to fix it. So good property, good location. And then cashflow positive. If you can find those three.
It’s like it’s a buy.
[00:17:17] Scott Dillingham: Yep.
[00:17:17] Scott Innocente: Anywhere on the scale. So don’t overthink it. You don’t need to learn more. You don’t need to know more.
You don’t need to read any more books. I have a few clients right now that are just. They’re stuck in learn mode. Yeah.
Good property. Good location, cashflow positive goal. Go make a move.
[00:17:30] Scott Dillingham: And And then build
[00:17:31] Scott Innocente: your right. Build the right team.
[00:17:32] Scott Dillingham: That’s right. Because for an example, say there is a property and it needs work and
cashflow positive. You can build in renovations into your mortgage.
Right So by working with the right team, you’ll learn that.
And then, so you can take a property that could be at a loss.
with the bank’s money, not even your own money. And then your cashflow
[00:17:52] Scott Innocente: Love it. Do you.
Now for that. Do you have to front the money up front for the renovations or.
do you, can you get it funded?
[00:17:57] Scott Dillingham: There’s a lot of lenders that you do have to now for doing a progress. Draw that one, we can fund it in
stages. So you do I’m making an example here, but say you did the bathroom and it cost you five grand. They’ll give you the money for the bathroom Then you do the kitchen they give you the money for the kitchen so they can do it in stages.
[00:18:15] Scott Innocente: This is huge for people with limited capital. That wouldn’t have the capital to buy a property and fund a renovation.
[00:18:21] Scott Dillingham: That’s right.
[00:18:22] Scott Innocente: They only have enough to maybe buy the property and 10 grand extra or something. I see it all the time, by the way.
So that’s a great program.
[00:18:28] Scott Dillingham: And
[00:18:28] Scott Innocente: this is the type of advice that will take you from zero to a hundred way quicker.
[00:18:32] Scott Dillingham: Exactly.
Absolutely. I really appreciate your time today, Scott. it.
was a great chat and look forward to having you on
next time Thank you. All right Take care.