Starting Young in Real Estate Investing

Mike Hambright (00:00.812)
Hey everybody, welcome back to the show. Today I’m excited to talk to Jake Carlile. We met a few years ago at a couple different events. Young guy, 24 years old, doing a bunch of…

new construction and development now has flipped a lot of houses, a lot of things going on. Having been in this business for a long time and pretty much knowing, you know, everybody in the industry, the single biggest thing that people say that they wish they had done differently is they wish they had started earlier. And so I was just telling Jake how impressed I am with them that they are getting after it at such a young age and they have such a bright future ahead with all the things they have going on right now that the sky really is the limit. So if you’re young or you’re trying to get your kids or your grandkids even,

into this business, definitely need to listen to this show and have them listen to it as well. So Jake, really excited to have you here,

Jake Carlile (00:47.65)
Absolutely, I do appreciate it.

Mike Hambright (00:49.196)
Yeah, yeah, so I’m excited to talk about, you have more going on than I know. So I told you, I’ve been kind of following you along a little bit on social media over the past couple years. Ever since we met, you’d pop up. I knew you guys were flipping houses. We met, think, at a multi-family syndication event. And I know you guys started a property management company. You’re doing new construction now and a lot of other things. So maybe you could just tell us a little bit about how you got started. And I’m really curious, because I don’t know this. You alluded to it a second ago and I was like, I’m not going to ask you.

ahead of the show, I want to learn on the show about what inspired you to get into real estate while you were still in college because

Something something happened to trigger that usually most people that I know get into real estate after they get out into the kind of quote real world and realize that There’s not that you know, there’s more out there for them than what they’re doing right now You’re at such a young age that you didn’t have that experience out of going into a shitty job that you hate or anything like that So I’d love to kind of hear what influenced you to jump into real estate

Jake Carlile (01:52.27)
Yeah, well, so I I can back it up really to my childhood. I think it may have always been in my blood. I just didn’t really know it. My mom was actually a realtor.

when I was born or before really and uh… story short she ended up and this is crazy but she ended up getting struck by lightning and kind of losing half of her ability to do any math or anything like that so she basically like semi-retired but I grew up from when I was born to three four five years old under a realtors desk I just didn’t really know it I have no recollection of it

So it’s kind been in my blood. However, let’s fast forward to high school. I competed as a CrossFit competitor at the CrossFit Games twice. And so it took a lot of training, took a lot of drive, took a lot of focus, which is kind similar to where we are now. Graduated high school from Brenham.

and kind of didn’t really have a plan. I was just going to blend, going to go to A &M, get my degree. Didn’t really have a specific type of degree I wanted. I ended up getting an agricultural economics degree. I like economics. It’s just kind of interesting to me. Helps me a little bit now, but really what happened was when I was detailing cars and I was detailing planes, kind of from high school to early college,

and I would just go see these nice cars and I would see these nice planes and I would see these nice ranches and I would like all this stuff I’m like man this is is kind of this is fine money right now but I want to be the guy calling myself to

Jake Carlile (03:43.106)
clean my plane and my car and go to my ranch, you know. And I’ve had some really good role models in my life. My uncle, he’s a partner at a public company. So I’ve gotten a lot of examples to follow that are really awesome. But really the click was in COVID.

I had kind of, I was kind of starting to run down my detail business. I knew it wasn’t what I wanted to do. I was working at a private FBO here called station called Astin Aviation, kind of just doing groundwork, filling up planes and being a carrier boy basically. And COVID hit, everything shuts down, they lay everybody off. And now I am stuck doing nothing. And so it was kind of the fresh start that I didn’t really want, but I got.

needed.

and then I had a long time to think and read books and listen to podcasts and do this, that, and the other. I just ended up like, what do I want my life to look like when I’m 40? At this point, I was 20 years old. I was like, hey, what can get me there? Real estate was one of the obvious answers. I love stocks. love playing with stocks too. Real estate was kind of the active, I can go do stuff.

you gotta have some money and I had a little bit but you know that was just kind of that was just kind of fun to me. So long story short I meet my partner at the gym in Brenham during COVID just randomly no you know I don’t know who this guy is we met he has some construction background

Jake Carlile (05:31.034)
we met at the gym, we’re like, hey, I want to buy a house. Oh, you want to buy a house? Let’s go buy a house. And like literally kind of stupid, zero forethought, probably not the smartest thing to do.

we ended going and buying a, well I say that back, we actually ended up wholesaling a house in Brenham. We didn’t really know it was wholesaling at the time, we kinda just got on a contract, we thought we were gonna buy it. We figured out we weren’t gonna buy it, we didn’t have any cash, so we went and found a buyer. Hey, can you take this off our hands? And it’s like, well we can make, know. So we made $10,000 there. And I kinda took that and put down on a condo in Bryan.

Mike Hambright (05:59.917)
Hahaha.

Jake Carlile (06:12.76)
which is probably the worst condo in Bryan, Texas, I think. So we remodeled that by ourselves, rented it out, thought we were rich. A year later, ended up selling that, got our money back, and ended up just starting to flip houses from there. I was going to college the whole time.

And we’ve since flipped 50 to 60 houses and built six to seven new construction projects so far. And we’ve got, I don’t know, 25 in the pipeline right now. So, and now I’m in grad school for property development. So it’s kind of been a whirlwind, but.

Mike Hambright (06:54.102)
Yeah, you’re doing all this while you’re in college or now grad school and you guys have started a property management company as well, right? Yeah, yeah, that’s awesome. Now the cool thing is you’re doing some new development, but a lot of it you’re, you brought on investors to fund it, I gather, and you’re keeping these, right? So these are, mostly building for yourself at this point, or some of it at least.

Jake Carlile (07:00.228)
Correct, yes sir.

Jake Carlile (07:13.164)
So it depends. So it kind of just depends on what it looks like on the front end. So with the duplexes or the spec comes or the small multifamily, obviously the small multifamily looks way better to hold. It’s just the scales there. The duplexes look just fine. We build them with a really, really good margin and a really good price to where we can hold them. But we’re kind of wanting to get that cash going to where we can offload these to investors who maybe they want a turnkey rental.

Mike Hambright (07:17.571)
Yeah.

Jake Carlile (07:44.68)
They want something that’s pretty new, that doesn’t need a lot of catbacks. So that’s kind what we’re targeting now. So we’ve got three duplexes for sale. And so it just kind of depends. if we can’t…

Mike Hambright (07:57.73)
Yeah.

Well, you need to, you I talk about this all the time. You got to have active income. You got to have like today money. You need money today to pay the bills. Right. And then you got to tuck some away, too. So I said up front in our intro, the single biggest regret people have is that they wish they’d started earlier. The second biggest regret is that they wish they had kept more of their properties as rentals. So for what it’s worth, because I can tell you, at one point, I thought rentals were a nightmare and I hated them and I still don’t like them. But I’ve generated a lot of wealth from the ones I did keep. And I just, you know, I

Jake Carlile (08:04.932)
For sure. For sure.

Jake Carlile (08:16.312)
Yeah, no, 100%.

Mike Hambright (08:28.238)
I kept like less than 10 % of the houses that I flipped in hindsight. It’s like, man, I wish I’d kept another hundred, you know? Yeah, yeah, that’s awesome. let’s talk about, so you kind of started with flipping houses. So I’m curious, while you were in, but let’s just say before you started grad school, but while you were in undergrad, how many houses did you guys flip while you were in undergrad?

Jake Carlile (08:33.25)
Right, no kidding.

Jake Carlile (08:48.25)
Let’s see, so I graduated from undergrad in December of 2023, and we started in February of 2021. So you’re talking almost three years, almost three years. We probably flipped 40 houses in that time.

Mike Hambright (08:49.89)
roughly.

Mike Hambright (09:06.956)
Yeah, that’s awesome.

Jake Carlile (09:07.596)
maybe a little more. At this point, it’s been so many, I’m just trying to kind of forget. yeah, it was a lot. It was a lot.

Mike Hambright (09:17.314)
That’s impressive. Yeah, most college kids are not thinking about flipping houses. They’re thinking about tossing beers back. So that’s impressive. Yeah.

Jake Carlile (09:22.53)
Right. Hey, and to be fair, my first semester of college, that’s what I did. And I had some fun, and then COVID hit, and everything kind of just changed. And so I’m lucky it did.

Mike Hambright (09:33.474)
Yeah, that’s great that you had, mean, something that came out of it that was positive. Like I think that was a time for people to either get lazy and depressed or I guess get inspired to say like.

Jake Carlile (09:45.466)
100%. Absolutely.

Mike Hambright (09:46.114)
this is bullshit and there’s more out there than this. so, glad you were on the right side of that. And I think probably most weren’t, honestly. So, that was a weird time for just our country, So, when did you kinda start transitioning into your flipping houses and then how did the development stuff start coming on? You started doing infill lots. Was that just, you came across some land and you’re like, hey, we could just do this? Or was it a strategic move to say,

Jake Carlile (09:54.51)
Right. 100%.

Mike Hambright (10:13.632)
If we’re flipping them, might as well, like building them would be easier. Let’s go fine land or.

Jake Carlile (10:16.76)
Yeah, so it was a little bit of both. as we started flipping, sometimes you come across extra lots or you find some lots and you’re like, these are really good. Let’s build on them. So we ended up with a couple of lots that we had bought with a flip house and just cut off and had.

We had also had some land that we thought was a really good spot and Hey, this is an this would be an amazing development one day. Let’s go buy it. We had that land And then you know to even back that up we I had met a guy Who is one of my best friends now? but our investor and we kind of killed kindled that relationship over the last three or four years

And we finally got to the point where it’s like, hey, let’s go do this. so we kind of just kicked it in the high gear last June, July, and have been kind of rolling hard ever since. And so it was kind of a normal evolution, which I think a lot of guys do. But it was also a significant choice. like, hey, we’re not necessarily going to stop flipping. We will still do that if a really great opportunity comes.

But to be honest with you, new construction is so much easier. It’s like putting a puzzle together. The margin is pretty predictable and the bank’s like it a lot better.

Mike Hambright (11:43.404)
Yeah, yeah, that makes sense. So one thing that you mentioned up front is that you guys are actively working with cities to try to build a relationship with them, maybe changing the zoning or things like that. And so I know most real estate investors are going the other way. They’re fighting with the city, trying to force something through. so it sounds like you’re being a little more strategic about it. Share some examples of that.

Jake Carlile (12:09.85)
Yeah, so I think a lot of people kind of approach it maybe not wrong. I think it’s just a little misguided, right? It’s kind of a natural tendency to, hey, we want to go do this. You’re telling me I can’t. Okay, go watch me go do it. That’s kind of the natural human, and I do it too. I get it, right? But you kind of just have to understand that whether these people that are frankly in positions of power,

Mike Hambright (12:23.987)
Right. Especially entrepreneurs. Yeah.

Jake Carlile (12:36.184)
that maybe they’re not getting paid a ton, but they are in the position of power. They can make or break you, literally. And you just need to get along with them. And it is what it is. And there’s a lot of great people, cities. A lot of people do want to see things happen. And a lot of them are really passionate about it. But you also have to drive them to the conclusion that you want. So for example,

We’ve done lot of infill development in zoned areas that are just, you know, by right. We can go to the duplex or a fourplex or what have you. On the other hand, we’ve also found pieces of property that are not zoned correctly, but they maybe they’re zoned or maybe they’re located, you know, close to a piece that we like that’s zoned right or kind of a transition area that kind of just makes sense. And so we took this one piece of land in Brenham and that’s six acres.

And it’s kind of right in the middle between an industrial area and a single family area. And there’s not really a transition in between. And one thing that Brenham really struggles with, and that’s a lot of these smaller communities, is small multi-family town homes and affordable, literally just affordable rentals. None of them have any. I don’t know if you’ve looked at any rental pricing in small areas, but it’s crazy. There’s just no supply, and none of it’s new.

And so we took this six acres and we presented to the city council for a rezone from R1 to R2 and all that literally means is it goes from single family only to single family and small multifamily. That’s all it means.

So we were navigating neighbors calling us and people protesting and this, that, and the other, but we kind of presented to them, hey, we’re local guys, we’re young guys, our parents live here, we have vested interest in this area, we wouldn’t come in and try to blow this up just for nothing, right? We’re not trying to force this in here. We kind of gave them our vision. We met with the city developer, we met with the city planner prior to see what kind of…

Jake Carlile (14:48.538)
pushback we’re gonna get, if any. And they were like, hey, this is the pushback we’re gonna get, so you need to figure out how to attack that. And so we went through the preliminary process through PNZ. We got through that, went to city council, and they were all for it. But I think it really just depends on how you approach it and how you kind of sell it to them.

Don’t try to fight a losing battle because you’re going to lose. You’re just going to lose. If you go try to spot zone a piece of property, R1 and R2 in the middle of a single family property.

you gotta make their lives easy. Those neighbors are gonna give you hell and also they’re gonna vote out the city council the next time, the next chance they get because they ruined your neighborhood. So I mean like whether it’s right or wrong you have to make their lives easy.

and you’ll get what you want. I know it’s political, but at the end of the day, you gotta think of it in a bigger term, a much higher view, instead of getting all wrapped up in the political ball and egos fighting and all that. Just lay to the side.

Mike Hambright (15:59.224)
Yeah, It’s salesmanship ultimately. You’re trying to figure out how to accomplish what they want and accomplish what you want at the same time, right? A win-win-win-win situation. Yeah. I had a, so I had a house, this is a long time ago now. This is in Farmers Branch, this is like a north suburb of Dallas. And it was a little frame house. It was a burnout and it was a hoarder house. It was just, it was a terrible thing. And they just wanted to get, they just, they wanted to just scrape the lot, you know?

Jake Carlile (16:06.338)
Absolutely. Absolutely.

Mike Hambright (16:28.494)
And I had rebuilt several, like, this was like a total loss burnout. Like it was not much salvageable other than the slab. And so, you know, I had to persuade them on how…

Jake Carlile (16:36.846)
Yeah.

Mike Hambright (16:42.38)
this was gonna be an awesome house and increase the values in the neighborhood. And by the way, they were owed several years of back taxes. like, the moment I close, like you’re gonna get paid, you know, all the back taxes and everything. And the truth is, is I did not go at it from your angle. I went at it from the, like, you’re fucking stupid. Like, why wouldn’t you do this angle? And I’ll just say, like, I pushed it through, but.

Jake Carlile (17:01.646)
Yeah. Yeah.

Mike Hambright (17:07.406)
It was a fight. There were people that were just like, we don’t care. We want to hit bulldoze. And I was like, this doesn’t make sense. But I know it was because I was trying to attract them with, as they say, vinegar and not honey.

Jake Carlile (17:12.228)
Right.

Jake Carlile (17:19.247)
Right.

And it works, it works sometimes and you’ll get stuff through. man, whenever you end up learning that your life’s a lot easier when you can work with these people, because they don’t really want to fight with you either. They’re just doing their job, whether you agree with it or you don’t. That’s what they’re doing. unless you just want to kind of go run for a P &Z and make a huge drastic change, then we’re have to work with them. So I’ve found that to be true in Brian, called Station, called

Mike Hambright (17:30.488)
Yeah, for sure.

Mike Hambright (17:45.24)
Yeah. Yeah.

Jake Carlile (17:49.772)
Well, Brenham, it’s been pretty true across the board. all, they think it’s out of a box, so you’ve got to kind of drive them to that end goal.

Mike Hambright (17:59.19)
Yeah, and I guess once you get to know people like it potentially opens up more opportunities, right? You’re like, hey, you see what I’m trying to do here. We want to help the city that we care about to this city. Like how else can we work together? How else can we help you, you know, get more of what you want here, which is probably affordable housing generally, right?

Jake Carlile (18:08.505)
Absolutely.

Jake Carlile (18:16.346)
Well, and to tee off on that, I’ve met with economic directors of areas, whether it be Brennan, Brian, Caldwell, I’ve met with developers, city developers, or heads of development, I should say, and they’ve called me before. Hey, I’ve got this lot on 123 Bridge Street.

you know, take a look at it, it’s about to be condemned, like this needs to be developed. And it either works or it doesn’t, you know, getting those type of calls really reinforces, you know, the reputation that we have or our building.

And then the other thing is, hey, go to the city and ask them what they need. Hey, what do you need? They’ll gladly tell you. They have a master plan. They have a future land use plan. They’ll tell you what they need and they’ll tell you what they can do to give it to you. I mean, just yesterday we met with…

a economic advisor from Brian, and he’s like, hey, we need a lot more. And this is kind of a little different. This is some commercial space, some 30,000 square foot commercial space, because we have no more land that fits that. And we have manufacturing companies banging down our doors to get these big spaces, but nobody’s building it.

we have some land we’ll sell to you, the city does, you can go build it. And here’s the people that are gonna move in when that happens. So stuff like that, like work with them. They’re out there and just, you know, and in turn, once those jobs come, where those people live, it’s just, it’s a never ending cycle. I say never ending, it can certainly end, but it’s a cycle that can perpetuate itself. know, commercial comes in, jobs are created, they need somewhere to live. So.

Mike Hambright (19:42.178)
Yeah.

Mike Hambright (20:01.634)
Yeah, yeah. You’ve got a lot of wisdom for a young guy. I know as you’re still in grad school now and you’re getting a master’s in essentially like development, Land development and so talk about the education piece because I, you know, I have more education than the average person that’s in the real estate industry as well. I have an MBA from a top program, went to a couple Ivy League schools because when I was in corporate America they were just sending me wherever.

Jake Carlile (20:12.047)
Yes, sir.

Mike Hambright (20:29.634)
wherever my boss was grooming me for something bigger in corporate America. it’s not necessary. I say this, it’s rare in this industry. But when you and I were talking upfront, you specifically called out the importance of formal education in your business. And some of the things you just shared with us, I don’t think if you weren’t getting this degree, my guess is you.

it’s influenced, I can tell it’s influenced you towards success. So just talk about the fact that you would flip 30 houses before you graduated from college. Most people would be like, adios, maybe not even graduate. Like I see a light here. I’m just going to go flip houses, right? But you’ve kind of doubled down on formal education and stuck with it. maybe share your thoughts on the importance of formal education as an entrepreneur.

Jake Carlile (21:05.69)
Right.

Jake Carlile (21:15.77)
Yeah. So, and I would start with, you you said that it’s like, adios, I’m out of here. There’s 100 % been days where it’s like, man, what am I even doing? I’ve got my phone ringing off the hook. I’ve got these city meetings. I’ve got this, that and the other. What am I doing here? I mean, yesterday I took a midterm in the middle of the day and my phone rang four times while I was in that midterm. And it’s like, what am I doing? But if you kind of step back,

Mike Hambright (21:27.56)
Right.

Jake Carlile (21:45.722)
I know it’s not necessary, kind like you said, and it really isn’t. It’s not necessary. You don’t have to do any of it. But what it has done, it has helped me kind of take a broader view of whether it be the real estate market or working with cities or…

or even reducing risk on stuff we’re doing moving forward. I have a little bit more of a formal education in what I’m wanting to do. I’m applying what I’m learning every day.

It’s certainly not necessary, but the people I’ve met in the school, it’s MLPD, but it’s in School of Architecture. So there’s a lot of urban planners, a lot of architects, there’s a lot of developers, lawyers that work in that area. So I’ve met a lot of people that are influential at this point in my life.

And again, it kind of goes back to it’s something hard. It’s not necessary that you do and if you complete it, you’ll feel a lot better about yourself. You completed something and you’ve just kind of built that confidence up. I can go do hard things even when I don’t have to do that. You know, I force myself to do that hard thing whether it be building the house or going to grad school or doing both. Like you can do both. And I think there’s a lot of people kind of get that misconstrued.

You know, like, I got to finish school. That’s great. But I did the same thing, and I also worked full time. And so you can do both. It just comes down to your priorities.

Mike Hambright (23:21.302)
Yeah, yeah, I’ll you it’s impressive. talk a little bit about your team. Like you’ve got a lot of things going on. I know you’re not doing it all yourself. And even people that are, just to be honest, a fair bit older than you really struggle with building out a good team. So how are you doing all this? And what are your kind of thoughts on building out teams to help you?

Jake Carlile (23:43.342)
Yeah, so it’s taken me little longer and I say it’s taken me little longer to learn this, but I’m only 24, it’s taken me three or four years to learn this, but it really is, it comes down to who you can surround yourself with and what kind of people they are. You want to surround yourself with people that…

either are smarter than you or have some type of other skill set than you have to where they’ll push that ante where you may not even be thinking of that, you may not want to do that, you may not enjoy doing it, but they might, right? It may not be worth my time, but it’s worth somebody’s time. It’s kind of, is a good mantra that one of my buddies tells me. But back to my team, so I mentioned my partner at the beginning.

He had a construction background. He runs most of the construction side of things. I’m kind on the back end, whether it be brokerage, management, leasing, permits, site development, budgets, financials, anything like that I handle. And he handles mainly the construction side.

We’ve got an office guy in house that is on salary. And so he kind of handles, he pushes a lot of paper, but at the end of the day, he takes off a ton of unneeded stress off of me and my partner. And he handles a lot of things every day. Project orders, material orders, logistics.

Stupid paper stuff that we just especially with how busy we are we just we’ll just forget it’ll fall through the cracks So he’s there to kind of clean that up And then also it goes back to kind of agents it goes back to title companies it goes back to lenders

Jake Carlile (25:41.572)
who you choose to work with really matters because it can make or break a literally. we don’t partner with these guys, but we’ve got a local title company, Blue Bonnet Abstract, that is the best. I mean, like, and everybody has their best title companies, but these guys, I can call any of the owners right now and they’ll answer. I can call, they’ve got a couple lawyers on staff, I can call them, they’ll answer. If I’ve got a big issue, it’s fixed ASAP and it’s just been amazing.

and we’re still kind of working our way through the banks. We’ve got our kind of favorites in this, that, and the other, at end of the day, they’re banks. You gotta know what they want. It’s kind of like the cities. They have certain criteria.

They know what they want and need and you just gotta give it to them. And there’s always a give and take. You’re the bank’s client, they need a loan. So there’s a give and take there. I think a of people don’t realize that. like, I hope I can get this loan. It’s like, well, they need to loan this money. As long as you’re strong enough borrower and you don’t go off on your word, they will 100 % almost all the time loan you the money. And agents.

I don’t think you should be afraid to pay agents either. They can sometimes be the gatekeeper to the people you need. So I think that’s a big deal. And I’m an agent. got my license. I’ll be a broker in November. agents do get a bad rap. I think, and for fair reason, but there’s some really good ones. And if you can get with them and get into it, the results can be really, really good.

Mike Hambright (27:04.461)
Mm-hmm.

Mike Hambright (27:25.772)
Yeah, that’s great. Jake, really excited to see where you take your business from here, because I know you got a lot of life left to live. And so I’ll be keeping an eye on you, Yeah, awesome. Hey, if folks want to connect with you or follow along with what you’re doing, learn more, any of that stuff, where can they go?

Jake Carlile (27:36.982)
Absolutely. I appreciate it.

Jake Carlile (27:45.54)
Yeah, I mean, on Instagram. I don’t want to tell you wrong. I don’t even remember my Instagram handle. My Instagram, jakecarlyle2. We’re on Facebook, Aratay Property Group. I’m on LinkedIn. Nothing crazy. But look at my Facebook, look at my Instagram, and just give me a shout.

Mike Hambright (28:08.952)
Cool man, hey congrats again on early success and I think you’ve got a bright future ahead so really excited to see where you take it from here.

Jake Carlile (28:17.678)
Hope so, I appreciate it.

Mike Hambright (28:18.742)
Yeah, just keep working hard, honestly. Don’t get complacent. That’s the bottom line. So, cool. Well, everybody, hope you got some good insights from today. If you’re listening to this and you’re older than Jake, you probably are realizing you wish you’d started when you were younger, but this would be a great message to share with anybody you think could get value from being focused and young and getting in the real estate space. mean, there’s a lot of opportunity to make money in this industry and all the surrounding industries for sure. And it only gets bigger, that opportunity gets bigger if you start younger.

Jake Carlile (28:22.702)
That’s right. That’s right.

Jake Carlile (28:34.938)
you

Mike Hambright (28:48.618)
So I appreciate everybody for joining us today. We’ll see you on the next show.

Jake Carlile (28:53.338)
Thank you.