Table of Contents - Retire Early and Do More of What Matters with Chad Carson
Dave Debeau [00:00:08] Well, hey there, everyone, this is Dave Debeau with another episode of the Property Profits Real Estate podcast today. It is my pleasure to be interviewing Mr. Chad Carson, calling in all the way from South Carolina. How are you doing today, Chad?
Chad Carson [00:00:22] Doing great, Dave. Thanks for having me. Great to be here.
Dave Debeau [00:00:24] My pleasure. So Chad is a very interesting fellow. He's a real estate investor, entrepreneur. He's a writer. He's a coach. And the cool thing that Chad has done is he has used real estate to really create an ideal lifestyle for himself and his family to be able to retire early, to be able to live for a year and a half overseas down in Ecuador, which is that resonates with me because I spent almost 14 years living down in Latin America myself. So it's near and dear to my heart. So, Chad, great to have you on the call.
Chad Carson [00:01:02] Great. Thanks for being here. And it's a work in progress. The lifestyle thing. It's like every year you learn a little bit more about what you what you want to accomplish. But real estate, as we'll talk about as a it's a good vehicle to keep changing your mind and doing stuff different every year.
Dave Debeau [00:01:14] That's right. It gives you that freedom. Right. That's what it's all about. So, Chad, how did you get in this whole crazy world of real estate investing?
Chad Carson [00:01:21] Well, I graduated from college with a degree in biology, and that put me right in the opposite direction of real estate investing. But I decided that I wanted to take a break from the sort of medical school route path that I thought I was going to go down. And I decided to become sort of a deal finder, bird, dog, whatever you want to call it, for more experienced investors. And I thought I'd be a little short term gig and end up I got the bug. I tasted that flexibility and not having to go to a job, going to a normal desk. It wasn't that I didn't work 80 hours a week, but I really enjoyed that lifestyle of being an entrepreneur, have a background in sports and setting goals and having big challenges. And it just felt like that kind of you have to climb that big mountain. And it was really exciting and challenging. So I just jumped right into it and cut my teeth doing that as finding deals and sort of grew into some other business models from there.
Dave Debeau [00:02:09] So how did you even know about bird dogging and all that kind of stuff? How about a university kid clue into that? What did you see an advertisement somewhere for somebody looking for one or what?
Chad Carson [00:02:19] Well, I was fortunate that my father had rental properties and he also educated himself. So he had books on the shelf. And I think I was at home during Christmas break reading. I look at Dad's got books on real estate investing. That's interesting. And up until then, when you're looking for a job, you don't listen to your parents as much as you probably should. He was probably telling me all along you ought to think about doing this. And now that I was ready. Oh, did you think I should look into this? Yeah, that would be a good idea. So he was fortunate to have him as a mentor and helped out early on, borrowed his books, went to some seminars with him and then actually bird dog for him. For the first year, I found deals. He was a landlord, but he also flipped a couple of houses. And then after that first year, I sort of went off on my own and moved to South Carolina. I was from Atlanta, Georgia, originally.
Dave Debeau [00:03:06] OK, very cool. So, yeah, I had a built in mentor. And your father. That's exactly fantastic. So once you got out of the bird dog, you once you started doing your own deals, what kind of real estate investing did you focus on?
Chad Carson [00:03:20] I was almost exclusively focused on flipping. Some of those are wholesale flips where I would just find a deal, get it on the contract or buy it and then quickly turn it around without doing a lot of work to it. But then I ended up teaming up with a business partner who a friend from college. So the two of us started doing this in year two together. We're still in business now, 17 years later. But we first two or three years is almost exclusively flipping houses. I use those skills I had from bird dogging, finding deals. My business partner would be the one managing the properties. When we bought them, he managed to fix up and then so we sort of teamed up that way. I was the acquisitions guy. He was the get rid of it guy and we would make some. Sometimes we made very small profit. Sometimes we made some good ones, but it took us a few years and doing that flipping before we started looking at other types of business models.
Dave Debeau [00:04:06] Yeah, because flipping is great, but it's definitely not a passive income kind of gig. You it's very active. Yeah.
Chad Carson [00:04:13] Yeah. And that was a realization for me. This is a job, this is a full time gig and not only is a full time job, it's a business. And I had no idea what I was doing running a business, you know, should I hire people, should I not? And it was more of a story to that. But we got started getting on a volume and a lot of overhead. And I was borrowing ideas from people. I learned from saying, oh, they flip fifty houses here. That's what I want to do. That's I really didn't have a good idea at that point what what I wanted real estate to do for me. I just knew I wanted to be successful and I just try to copy some other people who did a lot of volume and flipped a lot of houses and
Dave Debeau [00:04:47] sexy on TV.
Chad Carson [00:04:47] Man sounds good on late night infomercials, right? But it happened to be two thousand four or five and six and seven over the years. I was building up and flipping. So we are all your audience probably knows what happened in twenty eight nine with the global downturn. So that was, that was an interesting experience.
Dave Debeau [00:05:04] Yeah. So what did you transition into it during that time.
Chad Carson [00:05:07] Well so Twan. Seven right before the downturn was still a lot of flipping, but we had started buying some rental properties as well, both some shorter term rentals where we would lease the property to a tenant for a couple of years and then try to get them qualified to buy it and then sell it to our tenant. Yes, that was kind of a good business model for us. This sort of a transition from flipping to rentals, you know, wasn't exactly a long term rental. But we still could we could get long term capital gains. We could hold on to it. We didn't have to pay realtor commissions. So that was our transition point. But we also started keeping some rentals as well. And the way I typically did that was getting seller financing or some kind of creative terms, either from a private lender or a seller financing just from the owner. And so it was kind of a mix. And so two twenty eight nine sort of forced their hand a little bit. It was a little harder to flip where we were in our market. And so we just had to figure out how to hold on and become good landlords and become good at owning properties. And that was sort of forced upon us. But we learned how to make that business model work.
Dave Debeau [00:06:06] So is that your main focus is nowadays is on buy and hold of single family homes as rental properties?
Chad Carson [00:06:12] Well, for a single family, that was originally what we did. We do buy and hold. Yes, that's my main focus. I'm in a small college town. And so we sort of stumbled upon college rentals a little bit in that same period. And we stumbled upon it because I moved into a fourplex. I bought a house where I lived in one unit and rented out the other three units. So I was living for free that entire time. That helped a little bit. But then that was that was successful at work. The rent started going up a little bit even during the recession. And I saw other opportunities for fixer upper properties like that. So we had a ball now to the point where most of our units, I'd say three quarters of our units are college student rentals and we're sort of in the lower price range of the college, the rental market. We don't have the nice new stuff with lazy rivers and pool houses. We have affordable houses, you know, people, grad students, people paying their own way through college. We try to find that little niche within our our market.
Dave Debeau [00:07:01] So is it a house with multiple rooms in it and each student gets a room or is it is it a house that you rent out completely to?
Chad Carson [00:07:07] One tenth is truly a multi unit. So we have duplexes for perplexities. We have a twelve plex. Most of them are smaller than we are. Twelve is the biggest we have, but we do have some houses, but a lot of the towns, this might be common in other towns too. But Clemson, where I am, they have a rule that you can only rent it to people who are unrelated if you have a house so you can have a seven bedroom house if you wanted to. But inside the city limits, you can't rent to more than two people. So they sort of got rid of the rooming house, just eliminated that. And so you have to find multiunit properties that you can rent. And it depends on the zoning. So it pays to know your zoning in the town. But we have to find that true apartment buildings to get more data.
Dave Debeau [00:07:46] That's really interesting because my my understanding of student rentals and I based up here in Canada is the big appeal is to get a house with seven rooms and get seven tenants in that house. That's how you really think cash flow. How are you able to make a normal rental, a superior cash flow by renting to students versus anybody else? It sounds like a normal, normal rental to me, right?
Chad Carson [00:08:11] Yeah, it's I mean, it's more about the typical like any other real estate deal, just buying low this buying a good price. Like, I'll give you an example. One of the best deals we did in the last couple of years was just finding a landlord who kept up with the rent prices in town. And so he had a twenty eight unit property that rents were just under four hundred dollars per month for a two bedroom apartment. While the market price even in our market, which is a lower price, should have been about six fifty if they were fixed up really nicely. And so we bought the property for basically the market value with his current rents and then put a lot of work into it, about ten thousand per unit, and then raised the rents. And so that was that's more of the play. And a lot of that is just your typical value. Add finding a depressed rent, finding a mismanaged property and then turning it around. That's kind of a square deal for us.
Dave Debeau [00:08:59] So then why do you prefer to rent to students versus normal tenants
Chad Carson [00:09:04] in our market? I like it because there's a there's a constant flow of tenants. So that's good and bad. It's a little bit more like a short term rental and that every year or two they turn over. So you have higher turnover costs. But we basically had zero vacancy for about seven years. And so they in part of that, as the university has grown, so is kind of looking at your college town and understanding where student enrollment is increasing. And that's certainly the case with us. I don't prefer college rentals just because it's absolutely better than every other niche. But in my town where I am, it's the niche to be if you want to keep your rentals fall, if you want to get a little bit more of a premium, it's not a huge premium. But I rent to college students for about three quarters of them, also rent to faculty members. So I like those professors who come in and stay for seven, eight years instead of just always running. So kind of a balance between those two nights.
Dave Debeau [00:09:53] It's OK. That makes sense. So you've been in the gig for a long time now. How many years of you?
Chad Carson [00:09:59] Seventeen. Seventeen years. Twenty three is when I started.
Dave Debeau [00:10:02] OK, so that's a long time. So you've got a lot of experience under your belt. What would you consider to be your secret weapon or your unfair advantage when it comes to real estate investing besides your experience?
Chad Carson [00:10:15] I think even when I was a brand new beginner, so I didn't have a lot of experience, I didn't know what I was doing all the time. But I think that's the consistent thread for me, is just being authentic with with your cellar's with your private lenders. I have found from a lot of new investors, probably myself early on, to try to position yourself as being an expert at being the best or, you know, that's pretty common in business. I've sort of taken a different approach, just had the ability to say, you know what, I don't know everything. In fact, I'm a brand new beginner, Mr. or Mrs. Private Lender. Would you consider doing business with me? And I'll give you one hundred, ten percent. I'll do my best to make sure your your money is taken care of. Here's what I do know. Here's what I don't know. So just taken that attitude of I don't have it all figured out. Here's what I do know. I think people see that as being real as opposed to always saying I'm the best yes figure. For make, that's sort of the lesson you're taught as an investor, and so, you know, I do have more experience now, but I got back from Ecuador after a year and a half, and I was telling my friends locally that, you know what is kind of interesting? Because every time you leave or every time you change, every time the market changes, you have to act like a beginner again. And I think as long as all of us, no matter how much experience we have, is are willing to reevaluate what worked before because it might not work next year. That's a pretty good approach to business in general.
Dave Debeau [00:11:35] All right. So a big, big part of your whole philosophy is to use real estate as a vehicle to creating your your ideal lifestyle. I mean, you retired at a young age and you went and lived overseas for a year and a half with your family. Talk to me a little bit about that whole mindset and philosophy around real estate investing.
Chad Carson [00:11:56] Yeah, I did. That hit me over the head. I was actually twenty five. I think it was not too long after I started. I read the four hour work week by Tim Ferriss and a lot of great things in the book. But one of the ideas was that, you know, you had this business not necessarily to control your life. You have this business that allow you to to do what it is that's important to you. And I sort of adopted my own kind of version of that mantra, like my whole website. The theme is do what matters. And so you're investing in real estate? I'm personally investing real estate. I think in order to fulfill some some things I want to do in my life. I have a family and two young kids. There's dreams I have. There's things I want to do, the things I want to contribute and get back. And so real estate is an incredible vehicle. But if you don't keep it in its role of being the vehicle and not the master, that's the whole the whole deal. I've seen it for myself. I've seen it with other people. It can drive you for 20 years just growing and getting bigger and making more money just for the sake of making more money, as opposed to saying, all right, here's where I want to do with my life. I want to take a trip abroad. I want to be with my kids. I want to work part time and then build your real estate portfolio, build your business around that goal that you have for your life, and then do what matters, make your business work. Don't do it the other way around where the business controls everything you do with your life.
Dave Debeau [00:13:09] Very well said. Yeah, that makes a lot of sense. All right. So you started teaching and training and coaching people about real estate investing. What are some of the bigger mistakes you see people making when they first get into the game?
Chad Carson [00:13:23] I think similar to what I did when I first started is we have so many different strategies out there. I think that's one of the information. Revolution is great. You have the Internet, you have all this free information, but it's also overwhelming. Where do you start? And so I think one of the mistakes that people make is just sort of window shopping. I look at the strategy that takes that one a little bit. They look at the strategy that takes that one a little bit and they never focus or go in all then on something, even if it's the wrong strategy, like I would prefer people to get into the game. And that's why I talk about strategies like house hacking or using your home to be an investment, because I just feel like that's an approachable way. It's a little bit lower risk way to get started. And there's not a gap between what you think you know and what you have to do. And so I think the biggest mistake is just window shopping. I suppose just doing something. I find some strategy. You know, you listen to a podcast, you're reading a book, take that piece of information. And I do something this month. I actually go out and apply it. And even if it's not perfect, don't worry about being perfect. Don't worry about being the best right now. Just be a beginner, go make some mistakes. Don't make the biggest mistakes. Don't go do something that's gonna make it go bankrupt, but make some mistakes. And when you and I learn to speak English, we didn't say everything perfectly. And when we learn to walk, we didn't know my little kids. They fell down thousands of times when they walk. But we as adults have a hard time with being a beginner and being willing to do that.
Dave Debeau [00:14:40] Yeah, well, I can definitely relate to that. All right, Chad, so if people are interested in finding out more about you and what you're up to, what should they do?
Chad Carson [00:14:50] Actually put together a special page just for your listeners. So I have a free course that sort of to that theme that we just talked about. How do you get started? What are the next steps and a free course on how to get started in real estate? Best thing you you've got to Coach Carson, dot com forward slash Dave and you can sign up for that for free. And I'll send you over a seven day period. Just some steps. Like what? You know, ask you a question and action stuff every day. And by the end of the week, I think you'll find that you've got more clarity, more focus, and you'll understand a little bit more about what your next steps are in real estate.
Dave Debeau [00:15:21] Excellent. Very good. All right. Chad has been a lot of fun getting to know you and being a little bit over our chad here today. Really appreciate it. And congratulations on everything that you've accomplished so far in real estate.
Chad Carson [00:15:31] Thank you, Dave. Really enjoyed it. Thank you for having me on.
Dave Debeau [00:15:34] My pleasure. All right, everybody, stay tuned for our next episode. Thanks for joining in. Bye bye. Well, thanks very much for checking out the property profits podcast. And you like what we're doing here. Please head on over to iTunes, subscribe read us and leave us to review it. Very, very much appreciated. And if you're looking to create a regular flow of inbound investor inquiries about your real estate deals, then I invite you to attend one of my upcoming live online demonstrations. And you can check that out at Investor Attraction Demo Dotcom Ticker.