The Real Estate Investing Club

From 0 to 7 Cash Flowing Rentals in 2 Years with Shawn Horner | The Real Estate Investing Club #27

Transcript for “From 0 to 7 Cash Flowing Rentals in 2 Years with Shawn Horner | The Real Estate Investing Club #27”

Gabriel Petersen 0:02
Hello and welcome to another episode of The Real Estate Investing club. Place investors go to learn tips, tricks and stories from other investors in the field. If you feel we provide value to you go ahead and hit that thumbs up, share whatever it may be. And if you’d like for us to cover a specific topic, let us know in the comments or reach out to us on our website. Today we have a very special guest. So buckle up and grab your pen and paper and enjoy the ride.

Shawn Honer 0:33
All right, we are

Gabriel Petersen 0:35
live. Sean, thank you very much for joining us today. How you doing? I’m doing good. Thanks for having me. Absolutely. Absolutely. Thanks for joining us. It’s a everybody listening. There’s a little bit of construction going on. This is COVID time so I am doing this from my house. So you might hear a jackhammer too. So you know, that’s fair warning. Shawn. Yeah. Again, thank you for joining on. To get us started, why don’t you tell everybody who you are, where you’re from and how you got started in real estate in the first place.

Shawn Honer 1:07
Okay, my name is Sean Horner. I am originally from North Florida little town called Malacca

Unknown Speaker 1:17
for a second.

Shawn Honer 1:18
I did I’ve been going for a while. So since 1993. So, um, I actually

got into real estate about two years ago, got my mom had a property that she had and she inherited a property from her mother. And basically she said, hey, look, getting too much for me. Do you want it? Absolutely. Thank you. And I took that property from her did a rehab on it. He probably put about seven or $8,000 to that property. Um, got it up and gone and found a tenant rent the house out. And I’m like, wow, I like this. So after six months, I say, you know what, I can do this again. And when I found a second property, you know, I did. And, um, and from there on exactly two years ago, it’s been, it’s been good. It’s been almost like a tattoo, you know, getting addicted to it, you know, saying, you know,

Gabriel Petersen 2:28
I love. That’s a great analogy. I love that.

Shawn Honer 2:30

Gabriel Petersen 2:32
So that’s a cool story. So, you know, what were you doing before you got into real estate?

Shawn Honer 2:37
So I actually worked with Homeland Security. And I’ve been doing this for security for 20 years. And before Homeland Security, I was actually a US military. Oh, wow. So with the, my homeland security position now, and US military. I mean, I travel a lot of places you Been all around the world imagine, oh, my God is taking me over 40 countries that I’ve been to. And so just seeing the cat lady just being in a position where you see so many business deals gone, you know, with my current job, you know, like, wow, I want a piece of that to suddenly my mom introduced me to that property, you know, I mean, I took that experience I’ve seen in the past years, and just put it together. And I’ll tell you, it’s been phenomenal. I mean, I can I explain to you how good this real estate game is for me.

Gabriel Petersen 3:36
I love it. I love it. I’m excited to dive into that. So just to recap, it sounds like you know, you were in homeland security for over 20 years, which is an awesome, awesome career and before that you were in, in the military. And just a couple years ago, your your auntie said, Mother, your mother, your mother in law, you inherited a property. It needed a little bit of love you gave it that love that it needed And then it’s you started reading it out. And you just, you know, the light bulb kind of clicked like, wow, damn this, this works. I like it. Absolutely. You You went on to your next property and and it’s only been, you know, uphill or downhill however you like to see it since that point.

Shawn Honer 4:19
Yep, that is true. That’s exactly what has happened. And Gabe, I tell you

just from that two years ago from that first property week of June of 18, there’s been many more afterwards. So, again, what’s your Total Nonstop?

Unknown Speaker 4:41
What’s your total number right now?

Shawn Honer 4:43
So the total number now

Unknown Speaker 4:47
we own

Shawn Honer 4:49
actually seven properties. That’s right now. It’s good are late. Our latest deal was actually triplex. Ooh, Gran, that deal was down in Florida, actually. And, um, it was just in that drop, like spacely is situated in the main city of stay down in Florida, where it’s fun, like a acre acre and a half lot is triplex. And so my goal is do something more to get that property on there. So

Gabriel Petersen 5:28
I like it, you’re already thinking from the developer?

Shawn Honer 5:32
Yes. That’s a really, really am. I really am.

Gabriel Petersen 5:35
One of the things that I love about real estate most is how, you know, once you get your toe in the water, and you just start to see, you know, you start to see the different possibilities that are that are available in real estate. You just get excited and you’re like, I can build it. I can build another lot over here and I can just branch out into all the different niches so I can

Shawn Honer 5:54
absolutely but Yeah, yep, that’s absolutely correct. And that’s one of the things I think we all should be doing. You know so i mean there room to grow I mean jump on it you know so and with this triplex

there’s so much room to grow on that

grounds i mean i’m looking at either another triplex or even

bigger one there. So I love it. Yeah.

Gabriel Petersen 6:21
Awesome so I mean that’s a great starting out story I’m really excited to dive in a little bit more so why don’t you Why don’t you tell us more about you know your the nuts and bolts of your business? So you’re doing you’re you’re doing buy and hold it sounds like so um, tell us what is your bread and butter? Is it buying holds? Do you do flips as well and how do you go about you know, sourcing those properties?

Shawn Honer 6:43
Okay, good question. So

when I first dived into it, that was my main goal with just the purchase my real estate, he just keep way over. I’m not selling the property. I’m keeping this property Spiritually good teacher. And when I first started, you know what the real estate game, I spent too much money, you know, gets trying to get these properties going, you know? So finally I said, You know what, if I can flip one, I probably can free up some debt and actually pocket some money and I can’t invest, you know, to for the properties. Okay, that’s exactly what I did and I sell it never sell a property I will always keep them in for my property. Um, so earlier this year, I ended up selling that property that I basically inherited from my mom. Okay. And, um, that was the first property. It was bittersweet, you know, kind of getting in and getting given back away selling the property, you know, but I knew it needed to be done just to really get some money. So what that saying Both phones, what I used for was basically a couple of things, I actually broke another house with the proceeds I got from that flow. And I also made a great down payment for that triplex that I just purchased. And then I want to do is figure out some debt and basically pay some bills, you know, with the proceeds of that sale. Now, my goal going forward is to hold, you know, everything I have, you know, just my preference, you know, I don’t knock anyone who wants to, you know, just filter. But, um, so, now, seven properties I have, my intention is to keep those profits for a while. And one of the things why I do that, again, I mentioned to you that I work at Homeland Security, and I am retiring from the agency, three years when I retired from the agency Basically, I just don’t want to have my pension coming in, but also this income from my real estate, you know, because I like to travel, you know, so and that’s one of the things going forward is find them useful properties, you know. So again, four years ago don’t retire. So I have a lot more buying to do. negotiation, you don’t say, just to get work I want to get, but my goal is to get at least 30 properties by the time I retire in three years. Once I get those 30 plus properties I want to have this may sound kind of corny, but I’m going to tell you this. My goal is to hell. Each property on a certain due date, one on the first one on the second, the third, that every day, money has come into my my account Every day

Unknown Speaker 10:04
you know what? Yeah, man. So I think it’s funny, but you know, that’s

Gabriel Petersen 10:09
awesome, though. So yeah, so you’re trying to go from from zero properties to 30 properties in five years flat. I that’s a good goal. And it sounds like it’ll be it’ll be great for your retirement coming forward. So, going back to, you know, how you actually operate your business itself. You know, you’ve got seven properties so far over the course of two years, which means you know, you It sounds like you’re pretty good at locating these properties. How is it that you go about you know, finding the deals that you’re investing in, besides that first one, because that was a Gimme

Shawn Honer 10:43
that there wasn’t Give me that wasn’t give me so I’m one of the ways that

I’m probably online looking at least four to five times of the week. Can. website buy real estate calm Yeah, I turn it up. What I’ve gotten into here is this properties that’s up for auction, they basically think on properties. And I just purchased one for $25,000 this property appraised easily 75,000. Okay. And was it nice and easy work? You know, most of them do, you know? And so I’m really going for it now I got a great rapport with the company that basically asked me properties off and that’s what I’m going through. And that’s probably doing the rest of the year, you know, so. Yeah, yeah, that’s uh,

Gabriel Petersen 11:50
I’m, so I’m located in Seattle, which is a little bit different of a market. Which market are you investing in again? Well, single family Which market which location?

Shawn Honer 12:03
Oh, Georgia. Sorry. In not here in Oh,

Gabriel Petersen 12:06
Georgia. You said Georgia. That’s great. Georgia. Hmm. Yeah. So, I mean, up here, there are people that do it but, uh, paying cash for foreclosures, I mean, you got to be using hard money loan. So it sounds like it’s a lot. It’s a lot, you know, more feasible down in that area. Do you use your own money to buy these properties on foreclosure? Or are you using hard money loans? This is my this is

Shawn Honer 12:29
all my money. I have never used

hard money. Lenders.

The good thing about this game is that, you know, again,

my job is you know, I do pretty well, you know, so I’m able to tap into, you know, savings, you know, to go get these properties. So, um, and then remember, when I tell you that I actually have sold one, the first property so the process Space Time has been going towards buying the property. Now, with that being said, I have use owner financed as well. Oh, nice. Oh yeah. Oh yeah, I’ve used owner financing as well with two properties that I have. And that worked very well, you know, using those in financing. And I’m in matter of fact if up if I can’t get it from the auctions, you know, we just paid off my pocket. That’s where I go, usually with owner financing. And, again, I’ve had great success with that, you know, so I’m sure some horror stories owner financing, but me Everything is done through an attorney, you know, so I think the JIT so it’s nothing come back where, you know, one bite, right, yep.

Gabriel Petersen 13:56
Now, I mean, in my opinion, owner financing is the best way to go because you don’t have to Deal with banks. You don’t have to go right not to put your own money out there. So I mean, whoever says, whoever’s against owner financing, I am not in their camp. I think you’re doing the right. Right moves there for sure.

Shawn Honer 14:12

Gabriel Petersen 14:13
So, so sounds like you’re to get the properties, you know, the first one you got from an inheritance. And since then, you’ve been kind of looking to buy them at foreclosure. And you’re using your own money as well as the money that you got from flipping the first house that you had Is that about right?

Unknown Speaker 14:31
That’s right.

Gabriel Petersen 14:33
Awesome. I love it. So do you have any specific criteria that you look for when you buy these houses?

Unknown Speaker 14:40
I do. That’s a great question. Because

Shawn Honer 14:45
I’ve had someone come to me say hey, you know, I got this property and you should really take a look at it. And my first question is, is it brick? Is it a cinderblock? Is it is a wood house. Fresh, so after fluoridation, you know, that want to fundation Yeah, I want something that’s 30 You don’t say it’s 30 that I can go in there and and build it one because unfortunately you know you have a lot of homes with homes are just not as solid, you know as you know the word home but it means block home. So and I have much success with that. So it’d be very hard for me to go buy anything, you know, besides a brick. And so each one of my homes I mean this triplex down here in Florida, I mean, it’s a cinderblock home, you know, and make well, that I think was built in the 60s or 70s. You know, and my intention is to you know, throw some paint on the wall and update some of the stuff inside you know, and there you go again 2020 home with you.

Gabriel Petersen 15:59
So when you look for properties you really look for properties with good bones. You don’t. You’re not looking for the the ones, the near tear downs, the ones that you got to take down to the studs, you want a property that’s, it’s on, it’s on a foundation, you know, no mobile homes, you want good bones, you’re not looking for, you know severe rehabs.

Shawn Honer 16:17
Right? Because, again, when I went to the first inherited property, I put too much money into it. Yep. You know, I really did. And that’s a mistake that a lot of new comers they’re doing, they’re throwing their savings, I don’t know borrowed money into a home just to get it. You know, rehab and get it back, you know, going again for a tenant or for sale. But, no, I have a limit. Probably. No more between again. I mean, 10 is the max what what are the stickers, seven 8000 Oh, where I go by in play. able to find a tenant, you know. But the home has to be somewhat decent, you know, I cannot just go

anything and purchase you know, so

Gabriel Petersen 17:11
yeah, that’s a seven or 8000 in rehab is is like literally just painting the walls here in here in Seattle. So I’m jealous and really, oh my god, it’s more than just painting the walls but oh my god that much that amount down here so are up here. But I love it. I mean you got your strategy, you have your location, you have your acquisition strategy as well. And so you’ve got your business. It’s buttoned up. And it’s only been two years, which is a major accomplishment.

Shawn Honer 17:38
But congratulations on Thank you. I appreciate that. I do appreciate that. And you know, one of the biggest thing is also just really learning to take my time learning to be humble. And that comes with asking the questions that comes with reading solid books by authors, you know, The TPO things, um, but definitely don’t stay humble with this thing. So,

Unknown Speaker 18:07
I love it. I love it.

Gabriel Petersen 18:09
Alright, so I’m gonna I’m gonna move us along here a little bit. We try to keep these to around 25 to 30 minutes. So I want to ask a little bit about this, this specific stories we’re going to move on from the nuts and bolts. I want to hear stories, you know, what has Shawn experienced? We all know real estate, it’s a roller coaster goes up goes down emotionally and physically and financially. So take us in one of the times when you were kind of you know, hit, you know, you’re blindsided, something that, you know, jumped out of the Woodworks you didn’t expect and what was the lesson that you took out of that one?

Shawn Honer 18:42

Unknown Speaker 18:44

Shawn Honer 18:49
well, this is an interesting story here. So one of my mentors here, basically, tweet about the owner financing. You know, probably properties. So he had basically a property he said, hey, look, you know, slay this property. And I’m like, Okay. I didn’t care for too much. Because I knew it wasn’t a brick home. I told you I like to have a brick home and I’m like home. It was basically a wood frame home. I went ahead and purchased that home and that was probably my, my start home, you know, Adam out of the seven. And so going in there, I inherit some tenants who were very different. I tell you different. I mean, it they’re still different, you know, and when I say different, I’m talking about, um, they it’s hard to really just be mean to people, you know, just

I don’t know. It’s a whole nother story. But anyway, well blindsided.

Well blindsided young. him basically, if I didn’t do the inspections, I gotcha.

And it taught me a lesson where he had his tenants and stuff in his home and basically these tenants was okay with that living condition. Now one thing about sugar properties is that always still tell myself person, I also tell people each home my house, I will move in there or have my mom will just look at the quality I put into my home and I mean that game is really really great properties that I that my company buy. So this home here needed is central metal work. And I just basically trusted him to go along with them but he sold me the home, not trying to fake go behind no and sell a piece of junk. I should have just Done. The legwork actually went in there and basically done inspection walkthrough. And I did. So now that home definitely needs probably more than 10,000 worth of work in the roof at a paint job and even flooring, so that’s probably the worst. That’s the wild learn from because I don’t care who you bought it from just inspect the house, you know? Yeah, so

Gabriel Petersen 21:29
know that that is really good advice. I mean, it’s really tempting when you’re a new investor and you’re just so eager to you know, pull the trigger on a specific property to not get an inspection but you know, if you don’t do that you don’t there’s you don’t know what you don’t know and something could come up to bite you down the road. So it’s a tough lesson to learn I’m glad you came out the other side doesn’t sound like it, you know, put you put you too far in the hole. But um, but you know, we all have those lessons that comes to every realtor. So or a real estate investor.

Unknown Speaker 22:00
Awesome. Yeah, that’s true.

Gabriel Petersen 22:03
All right. So, um, I want to hear a little bit about, you know, what drives you, you know, Shawn, what drives Shawn forward? We all have those things that we do that like really, you know, it really contributes to our, our individual success. And so, what is it? Like? What habits do you have that you, you know, looking back reflecting on your career have really contributed to, you know, getting to where you are buying those seven properties, what what are the things that you do, you know, day in and day out that, that, that contribute the most to your success?

Shawn Honer 22:35
Um, I’ll tell you, the groundwork is my family, you know, I’ll tell you, my sons, so I have two teenage sons. It’s a 17 year old and a 15 year old, and I grew up basically without a father. And one of the things in life is in my life, is that I wanted something different with them. grown up in a single family household. absent father and did not have the push that I needed. Meaning that I’m someone who sit down and talk finances with me when you know, a father to sit down and basically give me a roadmap to this thing called life. So, I’m now 45 I look at this and say, okay, Sean, you have two songs, they look up to you. You have to go out there and do the best you can. And so, that’s why at 11 o’clock at night, 12 in the morning, I’m here at my table, you know, trying to make sure I execute that and make that happen. This property thing you know, this investment, it will wake people up sometimes at work. And you’re sitting here quiet in a room, you know, you’re on the air net, looking at different deals. Look at that. How can I enhance my ability to buy more, you know, so, my kids, my kids really enjoy me. Now this is like a word is Yeah, I love it.

Gabriel Petersen 24:19
That’s your your kids are your WHY? And that is a very important thing. Yes,

Shawn Honer 24:22
there you go. My sons are my wife, you know, and maybe they don’t even understand it right now. But they will buy and buy, you’ll see why dad does what he does, you know? So simple, you know, yeah. And it’s not just that, you know, again, going back to the traveling piece as well. So once I do retire in three years, I want to be able to financially support my wife and I and also my sons and their family, meaning or trip. So one thing I told my wife I said why retire, I want to do an annual trip. Where not take our sons take their wives take our grandkids, we go on this vacation Costa Rica, Spain, whatever. But I want to be with the people. I want to be able to say, hey, look, I got the flight at the hotel. No, that’s my gift to you each year. So that’s what pushed me. Yeah, my family pushed me man really good. My sons, my wife, they push me. You know, I love that’s why I get up and do this thing.

Gabriel Petersen 25:30
Yep. And the vacation thing is especially because it’s something you can visualize, you know, you can see yourself out there with your family. You know, they don’t have any financial worries. They’re like, you know what, we’re here with dad. We’re enjoying it. So that’s great. I’m, I’m glad to hear that. So we are at we are at the tail end of the episode, but you know, we all need things. You’ve given us so much wisdom so far in this episode, so I appreciate you,

Shawn Honer 25:56
sir. Thank you,

Gabriel Petersen 25:57
but you need things as well. So if someone were to bring use something what would you want to receive? If someone were to bring me something? Yep, a deal, a contacts, anything.

Unknown Speaker 26:10
What I tell you, oh,

Shawn Honer 26:14
three now in the year, I am looking actually at purchasing at least two more triplets. So if someone comes to me and say, Hey, I got this deal for you I’m more than in this this South East district where I know so always my goal my I’m always flower, you know, as well, so I couldn’t buy in Seattle. I don’t know anything about Seattle, you know, so I’ll just stay down here and, you know, so but I was always looking for a deal in South Eric Sef region here where I have a triplex. So someone had a triplex deal for me and said, Hey, I got you on this one. I would love to do it. And especially if it’s on finances.

Unknown Speaker 27:02
Jerry on top right you know so

Gabriel Petersen 27:05
perfect. Well yeah Sean thank you again for coming on. I know I can speak for everybody listening and watching that we appreciate you coming on and sharing your wisdom. So if someone did want to get in contact with you what would be the best way for them to do that?

Shawn Honer 27:19
Oh, probably again, you know I’m Lincoln Are you can email me at a sugar bear again, sugar bear I’m always looking to meet new people always looking to learn new things. So feel free to reach out to me. Again leak in or my email address.

Gabriel Petersen 27:46
Perfect. Well there you heard it guys. Um, if you want to get in contact with Sean sugar bear or LinkedIn profile in the show notes you can check it out there. So again, Sean, thanks for coming on for everyone. Watching. We look forward to seeing you guys on the next episode.

Shawn Honer 28:05
Thank you.

Gabriel Petersen 28:09
Thank you for joining us on The Real Estate Investing club. If you feel we provided value, we would appreciate it if you hit that thumbs up, share with your friends online, whatever it may be. If you’d like to share or partner with us on an investment deal, we are always looking for quality projects, go to http://www.hp real estate investing club comm get contact with one of our partners. Otherwise, I hope you guys have an absolutely fantastic day and I look forward to seeing you on the next episode.

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The Real Estate Investing Club is a podcast and YouTube show where real estate investing professionals share their best advice, greatest stories, and favorite tips in real estate. Join us as we delve into every aspect of real estate investing – from self-storage, to mobile home parks, to single family rentals, to real estate syndication!

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Join us as we learn about these REI pro’s career peaks and valleys and the lessons they learned along the way!

Topics you’ll learn more about throughout our episodes:

– Using the BRRR strategy to buy income properties

– Flipping houses the right way, building quality housing and taking home a large payday

– Using hard money and bridge loans for real estate investments

– How to bounce back from bankruptcy and build a thriving empire in the wake of failure

– How to use property management companies to help scale your real estate business

– The best online and offline tools out there to take your real estate investing business to the next level

– How to do out of state investing without risking your shirt in the process

– Going from broke to 300+ deals in a month (really!)

– Investing in commercial real estate

– Stories about brand-new investors and the lesson’s they’re learning as they take on their very first flips and rentals

– How to use Google Ads and Facebook Ads to crush it in off market real estate marketing

– How to fill your pipeline with off market deals using direct mail, voiceless mail drops, and text blasting

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