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Show Summary
In this conversation, Jim Beavens shares his journey into real estate investing, discussing the importance of cash flow, building a network, and navigating the current market landscape. He emphasizes the benefits of turnkey properties for busy professionals and provides insights into how to get started in real estate investing. Jim also highlights success stories from his investing group and encourages listeners to take action in building their investment portfolios.
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Investor Fuel Show Transcript:
Jim Beavens (00:00)
Yeah, definitely. mean, and you know, this started and even now there’s even more reasons. Like, you know, a couple of years ago, it was all about retirement and like, you you can, if you do this, you know, even just buying one or two houses per year, you know, you get that leverage cashflow growth, that leverage appreciation, you know, in 10 years, you could have financial options open to you that you can’t even fathom today. And, you know, and if you reinvest your cashflow, you can just really, you know, kind of get that income snowball going and replace your salary.Kristen (02:00)
Welcome back to the Real Estate Pros podcast. I’m Kristen and I’m here with Jim Beavens, who is the owner of Cashflow Engineers. He’s a 30 year old computer engineer that pivoted his retirement savings to real estate and he’s helping others do the same. Thanks for being here, Jim.Jim Beavens (02:14)
It’s great to be here. Thanks so much for having me. I’m excited.Kristen (02:17)
So let’s get into your background as a computer engineer and when you started kind dipping your toes into real estate.Jim Beavens (02:23)
Yeah, so as a 25 year engineering veteran, ⁓ I went through my second divorce and life had thrown me too many curve balls and my retirement strategy was just not working. You know, I’d done everything right, put money in my 401k and ⁓ then it got, it just got slashed through divorce and just through life. ⁓ so, you know, there I was in my late forties trying to figure out how to make things work. I was probably going to work into my sixties.And I got turned on to an investing group that focused on turnkey investing, basically, you know, buying turnkey properties, freshly rehabbed houses in out-of-state markets in the South and Midwest that are affordable and actually cashflow. And I’d always been interested in real estate. I read Rich Dad Poor Dad back in, you know, the year 2000, and had actually tried to make real estate work before in my local market. I live on the West Coast and it’s always just always expensive. And, and
tried to make it work, never really could, was turned on to this methodology and basically went ahead and went for it and pivoted a good chunk of my savings in retirement to buying out of state rental properties. once I bought one and saw how easy it was, then in fact before I closed on that first one, of course you sign up with these turnkey providers and just get emails every week. And I saw more deals, it’s like there’s another one, I actually got my second one under contract.
Basically in a span of about 15 months, I bought six properties in three different states and you know, they cash flowed at the time, at the time I bought them, about $1,800 a month after fixed expenses, know, mortgage, taxes, insurance, and property management fee. And you know, now that was a few years ago and now a few years later, you know, the cash flow has grown and my mortgage payments stay fixed. And so you kind of get that leverage growth. And so now it’s like it’s
you know, 2,600 bucks a month. So that has become kind of my retirement strategy of, you know, taking my money and my RSUs and bonuses and those, you know, those piles of cash that tech companies throw at us and putting it into buying cash flowing assets.
Kristen (04:32)
Yeah, absolutely. I mean, I think that you’ve touched on a lot of different interesting things. think some people are intimidated by the investing game because maybe they think it’s too much work for too little money. But I think you brought up two good parts about it where, you know, you’ve been able to do this in a pretty easy way, a passive way. And you’ve also been able to compound, you know, over a lot of different properties. Can you talk about for people who are in these high pressure careers, how this can stillbe a good way to invest.
Jim Beavens (05:52)
Yeah, I mean, it really is ideal for, this isn’t for everybody, know, ⁓ the turnkey investing model, we’re basically buying rehabbed homes that are being sold at retail. If you can think of a fix and flip, know, an investor that’s doing a fix and flip, instead of fixing it up and turning it, selling it to homeowners, they’re fixing it up and selling it to investors. ⁓ And so ⁓ from our perspective,It is, from the investor perspective, it’s very attractive because all the work’s been done, the rehab’s been done. But it’s not for everybody because it is capital intensive. It requires a down payment. You’re putting 20 or 25 % down. It requires good credit. And so it really is ideal, though, for people that have basically more investment capital than time. And so as a busy professional, it really appealed to me because I had looked into, you know, how do I make
how do I make real estate work in my local area? It’s like, okay, I’ve got to do like a big rehab. I need to like look for motivated sellers to try to find, you know, good terms and get in with no money down. And that’s a whole marketing campaign that’s needed. And nothing ever worked over the years, but this, it’s like, once you’re plugged in and find these providers, then it’s like, then you just get inventory in your inbox and you basically see one that looks good in an area that you like. And it’s like, and then you just send an email saying, I want that one.
And so the ease is very, just that it’s not time intensive at all. So as working a demanding engineering career, it was ideal. And so that’s really, it’s an attractive model for those busy professionals that again, have basically more money than time.
Kristen (07:29)
Yeah, and how did you go about finding these people that are able to source these deals?Jim Beavens (07:34)
Well, I basically at the time I joined an investing group and that was investing group kind of they kind of went belly up it was you know, it was a mastermind that I joined and ⁓ and then and and what I ended up doing was I actually you know without I really enjoyed having that group of mastermind and just it kind of like crowd sourcing knowledge and so I kind of started my own and ⁓ you know and that’sof where Maybus’s cash flow engineers ⁓ came about. ultimately, once you know that this methodology exists, it’s actually fairly easy to find a lot of these providers. And in fact, I kind of have a little introductory kit to help people get started of how to search for it and a list of providers and whatnot. But ultimately, you can just pick a city, anywhere in the south or midwest, and just Google.
you know, city turnkey provider, you know, Kansas City turnkey provider, Detroit turnkey provider, anything like that. And it’s, you know, they will come up. Now, obviously not all providers are the same and not all areas are the same. And so there’s, you know, it’s like turnkey investing kind of replaces one set of problems of if you invest locally, you have high prices, high regulation, no cashflow.
You can fix those problems by going remote, but now you have a whole new set of problems like, know, where do I invest? Who do I buy from? And, you know, how do I know who’s working good? And so, you know, it’s a new set of challenges, but those are all solvable challenges. you know, you’re not going to be able to solve high prices and high regulation in your local area, but you can do research and figure out, you know, where do you invest and who do you invest with.
Kristen (09:18)
Yeah, I’m curious about how you kind of decided which states to invest in, which areas to invest in, because I think everyone has their own localized market. How did you learn more about that?Jim Beavens (10:02)
Yeah, honestly, in my case, so I got into this during COVID and, you know, when rates were super low and it was just a madhouse. Everybody was buying real estate and honestly, I just went wherever I could find deals. And so I went into a couple markets that were like a couple hours apart. So I actually made a trip, flew out there toward the area, toward the other nearby area.got to know some turnkey providers and bought a couple of houses there. And then just became saturated, it became so hard to find properties. And so I actually got turned on to another turnkey provider inside my investing group where I actually had to pay to get access to their inventory because it was just so, it was crazy. And so honestly, ⁓ I wouldn’t say I actually have a favorite market. ⁓ I mean, there’s about, you know.
In fact, I put together kind of just a market research report of like 12 markets across the South and Midwest that I think are all attractive. And I see that all the time when I talk to other investors. There are people that are killing it in cities, in all these states in the South and Midwest. And so it’s really just a matter of where do you want to focus your time? Where do you want to do a deep dive and become intimately familiar with those neighborhoods?
I definitely have those markets that I’m intimately familiar with, and so that’s where I focus my attention. honestly, again, I see people killing it in all sorts of markets that I’m not in. So the opportunities are definitely there. It’s just a matter of, in my case, it’s like I just got properties wherever I could. And so those are the markets I’m familiar with now.
Kristen (11:45)
Yeah, absolutely. And I’m sure you kind of build out a good team around you with property managers and all of that.Jim Beavens (11:51)
Exactly. Yeah, and then once you dive into that market then getting to know a you know, the the good turnkey providers property managers sometimes those are one in the same a lot of turnkey providers have in-house property management and And then of course, know having you know, I have a few lenders on tap different lenders that you know, depending on you know There’s a couple banks. I like sometimes banks get kind of not a fan of this methodology And so there’s some mortgage brokers I like and so yeah, just having that teamavailable is absolutely key.
Kristen (12:22)
Amazing. So tell us more about cashflow engineers and kind of the people you work with and maybe some success stories.Jim Beavens (12:27)
Yeah, definitely. So, I mean, this whole thing started because I went ahead and, like I said, I pivoted the investment capital that I had available to real estate. And once I invested that capital, then I had no more money to do deals. And this started because I, you know, thought, well, let’s see if I can find money partners, find some funds, private funds. ⁓ And so I started sharing my story on LinkedIn and just sharing, hey, I closed on my fifth house, I closed on my sixth house.And ⁓ if anybody wants to do more deals like this, ⁓ partner, be a money partner, help fund the deals, ⁓ reach out to me, let me know. I heard from all sorts of people. I heard from former coworkers, I heard from some people I didn’t know, but nobody was interested in partnering with me. They were all, they all told me, what you’re doing sounds really cool. Can you show me how to do that? And so, ⁓ there’s enough kind of requests for that. I put together…
I kind of a beta launch. called it the six weeks of cashflow challenge. I said, you know, basically, ⁓ you know, had people come in and we met once a week for six weeks. And basically I did a brain dump of like, here’s everything to get an out of state rental property under contract. And we literally went over financing, finding, analyzing, managing, protecting, and closing. Those are the six modules. And, ⁓ you know, the first, my
the first student got his property under contract ⁓ in like week three or four. ⁓ then, you know, I had about, you know, 15 people in that first group and, you know, three or four of them like had a property under contract before it was over. And then I’d say about 10 of them over the next several months ended up getting one under contract. And then those people went on to continue, you know, one student ended up getting… ⁓
you know, like five properties in about eight months. Another student got ⁓ four properties in like six months. Just about a year ago, there was somebody who came in, he like broke the record. like got his first property under contract after like just like two weeks after joining, and he ended up getting like five properties in just like three months, and just like boom, boom, boom.
biggest success story that still kind of blows my mind is, you know, one of the people that was in that first group, after he got a couple under his belt, he had a local rental in Oregon that he bought like back in like, you know, like 2005, like 15 years prior. He never refinanced it. So I had a lot of equity that really appreciated a lot. And it was cash flowing, maybe like a grand a month. But when you look at that return on equity, he had like, you know, half a million in equity in that thing.
just generating a thousand a month. Well, he basically, when he saw how easy this was, he sold that and did a 1031 exchange. And over the course of, you know, those several months, he basically, and he lined it all up, and he basically turned that one house, first he bought seven properties, but of course with 1031 rules, you need to maintain the debt and the equity. And so a few of those properties he had to buy all cash. So he completed the exchange, and then he took those two or three properties that were all cash,
pulled cash out and bought like six more. So he translated that one property into 13 properties and basically quadrupled his cash flow to nearly like four grand a month, I think it was, after fixed expenses. that example always kind of blows my mind. It’s kind of an extreme example that shows what’s possible with this methodology.
Kristen (16:30)
That’s so cool and you’re really helping people, you know, kind of get off of that stock market roller coaster and help people kind of diversify their assets. I mean, I think that’s amazing.Jim Beavens (16:41)
Yeah, definitely. mean, and you know, this started and even now there’s even more reasons. Like, you know, a couple of years ago, it was all about retirement and like, you you can, if you do this, you know, even just buying one or two houses per year, you know, you get that leverage cashflow growth, that leverage appreciation, you know, in 10 years, you could have financial options open to you that you can’t even fathom today. And, you know, and if you reinvest your cashflow, you can just really, you know, kind of get that income snowball going and replace your salary.So it was all about
know, a years ago, it’s like, wow, this is a great alternative to retirement. But what I’m finding is now, especially in the tech industry, you know, there’s a lot of chaos. I mean, there’s AI, there’s a lot of anxiety and concern about AI, you know, just rewriting job descriptions. And, you know, it’s like, we’ll, you know, even in the roles that I do, it’s like, you know, I write front end RTL code for microprocessors. And I look at this and think,
You know, I’m not sure AI couldn’t do this and is my tech role even going to exist in five years? And so now this, I’ve also come to view this as a great way to start implementing a plan B. Like while you’re getting your high income and your RSUs and bonuses, like start building these personal income streams that can really, you know, boost up your, you know, your personal ⁓ income. So you’re not relying on just an employer. And so in my own case, when I lost my job early this year,
It’s like I had that, you know, $2,500 a month that was like provided just to, you know, it wasn’t gonna, you know, support me fully, but it was an awesome soft landing. It’s like you took that, you add in unemployment, and I’m like, hey, I can actually be okay for the next six months while I really fine tune, you know, what I wanna do next and where I wanna go. yeah, just I’m finding in this chaotic times.
that it’s just an ideal way to, again, build that Plan B. we’re all focusing on, everyone’s focusing on how can I, I need to beef up my job skills. Well, don’t just beef up your job skills, beef up your income skills as well so that you’re not just relying on that single source of income. So yeah.
Kristen (18:49)
think that’s such an amazing point and I know that with everything going on with the market right now, people are very confused and I think you have a very optimistic look at the market. I’d love for you to share that.Jim Beavens (19:00)
Yeah, yeah. mean, honestly, I just feel like this, in the wake of the 2008 crisis and all of those property values dropped immensely. what it did is it just fed immense investor interest and demand in real estate. And this whole turnkey methodology rose up because infrastructure was built up. Investors came in and started buying these properties. And then Wall Street hedge funds kind of looked at this and said, hey, we went in on this.and started approaching some of these providers and was like, can, you know, we wanna buy like 300 houses this year. We wanna buy like thousand houses over the next three years. Can you make that happen? And a lot of these turnkey providers took up the call and they scaled up their operations, scaled up multiple rehab crews, built up in-house property management, and you’ve got outfits like this all over the country and it’s created this infrastructure that is super easy for individual investors to plug into because these.
providers, they don’t care who they sell to, they don’t need to sell to just Wall Street. We can plug into this. And it really has created what I feel is kind of the golden era of real estate investing, especially in these markets where you can still buy $150,000 house that has $1350 rent. And you’re gonna get that $200 $300 cash flow after fixed expenses. And then of course, the key is that, and then you can stack that, spread out your risk, grow more doors, and even just getting five to 10 houses
that gives you that $1,500 to $2,000 to $2,500 a month cash flow, then the portfolio starts sustaining itself and taking care of itself, because it’s real estate, things happen, vacancies and maintenance. But you get that baseline cash flow. it really is, it’s never been easier. And I also worry that I don’t think this opportunity is gonna last forever, because prices will rise. And it’s inevitable that…
you know, prices will outpace rents. We’ve seen that on the West Coast. We’ve seen that in, you know, fast growing markets. And we kind of have these last bastion of pockets in the South and Midwest where you can still buy and cashflow from day one. ⁓ you know, combined with just the ease of how easy it is to get in there and plug into that, then yeah, I think this is just a fantastic time ⁓ that, you know, that, it may not, know, in 10 or 15 or 20 years, I’m not sure this opportunity will be there again.
Kristen (21:16)
Yeah, I think there’s a lot of people waiting for rates to drop to get in the market and you’re kind of saying the opposite. Don’t wait for the rates to drop. This is the time right now.Jim Beavens (21:26)
Yeah, definitely. Because I look back during COVID, when I was trying to, during COVID rates were super low and I was trying to buy properties and it was a pain in the ass. mean, there were, I mean, it’s like, there were some Turkey providers that like you knew they would send their inventory out every day or every week at the same time. And it’s like Tuesday at 8 a.m. I would be on there like just, and it’s like, you had to get an email out to reserve a property like within minutes or they were gone. And so my biggest concern is that when rates drop again,that’s gonna pump up demand and that’s gonna cause the big boys to get in again. Because what happened is when rates rose, all the big boys got out, Wall Street hedge funds got out and a lot of people after engorging themselves on properties kind of sat out and was like, okay, we’re good. But what that did is that increased opportunities for buyers in that turnkey providers offered incentives, they were giving seller concessions. A lot of them started waiving their property management fee for like the first year or even two years.
And so, you know, to try to counteract those higher rates. So it’s actually been an awesome environment in terms of the demand and supply, and it’s been really easy to find deals the last couple years. So my biggest concern, I’m actually worried that rates are dropping, and they’ve dropped a little bit. I’m already seeing demand hit. One of my students actually, he, you know, it took him a few attempts to get a property under contract. We review a deal, and it’s like, yeah, call him up in the morning, and you know.
⁓ you know, see if you can reserve it. And it was gone. And we did that like two or three times and we actually got to the point. It’s like, okay, we need to, what day does the inventory come out? We need to, you know, it wasn’t like in the minutes like it was before, but it’s like, we need to kind of jump on it. So I’m seeing that demand pick up. And even though a lower rate, I mean, like, okay, I got, again, I bought during COVID, I got a low rate and it’s like, you know, that probably increased my cashflow, maybe like a hundred bucks a month, compared to if I were to buy now.
which is nice, but it doesn’t really move the needle. And what I saw during COVID was people that had bought houses two or three years prior and already owned properties, they just sat back, watched their values rise, and then just calmly refinanced and pulled money out, pulled 15 grand, 20 grand, 25 grand at a lower rate, which made their monthly payment almost basically the same, sometimes even less.
And it’s basically free money, you know? And so that’s why I am so excited about this market we’ve been in the last couple years is it’s like buy now, load up now, and then when rates drop, now you’re in a position to benefit from that and reap the benefits. Whereas if you wait for rates to drop, you’re gonna be fighting with everybody else and fighting with…
you know, prices and trying to outbid others and so yeah, that’s actually, I’m not looking forward to rates dropping and in fact I hope they kind of stay high for a little while longer so that me and my students can buy more properties.
Kristen (24:25)
Well that’s amazing. I think you’ve given such good inspiration for people maybe who are in W-2 jobs to expand their portfolio like you have. Tell us where to find you and how to get involved.Jim Beavens (24:39)
Yeah, absolutely. The best place to find me is on LinkedIn and you can go to my LinkedIn profile, just look up Jim Beavens. It’s heavenswithab and I’m assuming we’ll get a link in there. there’s a link to a, I mean you can follow me, follow my posts, you can reach out to me. I do have a link to kind of a starter pack, I call it the turnkey jumpstart kit that you can just, it’s a very low barrier to entry.And a lot of people get intimidated at buying real estate. You’ve got to do all the vetting and all the research. ⁓ But before you buy, you have to shop. And shopping’s easy. And so it’s basically just a toolkit that I put together that allows you to shop. I show you where the deals are, include a property analysis calculator, ⁓ include ⁓ another kind of a planning calculator that’s like, given your current savings, how many houses could you buy per year?
what would that do to your passive income and how does that compare to your retirement. there’s some cool tools in there. that is, again, there’s a link to that on my profile. I also have a YouTube channel. I’m just starting up. It’s got five videos there now. But you can find me on YouTube, at the Cash Flow Engineer. ⁓ Or also just look up Jim Beavens.
Kristen (25:58)
Amazing! Well, thank you so much for being here, Jim.Jim Beavens (26:02)
My pleasure. This was great. Thanks so much for having me.Kristen (26:05)
Thank you everybody for watching. hope that you learned a lot, got a lot of inspiration for your own business and ways that you can increase your capital. We will see you back next time and please reach out to Jim if you have any questions. Okay, bye.
