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Show Summary
In this conversation, Joseph shares his journey towards financial independence, highlighting the challenges of stagnant wages against rising inflation. He discusses how he turned to podcasts for inspiration and education, particularly focusing on real estate investment. Joseph details his innovative approach to financing renovations through a zero-interest credit card, ultimately leading to a successful rental income stream.
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Joseph (00:00)
renovating the whole thing for about 12 grand and then we rented it out and then the rent paid off the credit card so that the debt ⁓ was removed but the income remained and so that was kind of my first taste of you know I think what the big leagues do you know what private equity does is they borrow money and they buy an assetQuentin (00:08)
Yeah.Joseph (00:26)
And then they’re able to either refinance or use the income to pay off their finances and own an asset. And so that was the first time that I did that. And that just made me so excited that I was able to create income out of nothing.Quentin (02:13)
Everyone. Hello, hello. Welcome to the Real Estate Pros podcast. I am your host Q Edmonds. Excited about my guest that we have coming up. This guy, listen, when you talk about somebody that’s building while they work, the more I got to know this guy, the more I understand he is definitely building why he worked. He’s doing some incredible things, know, family man, you know, taking care of his home, but also building up his real estate portfolio.Joseph (02:21)
you you ⁓Quentin (02:41)
And so I am super excited to introduce you guys to Mr. Joseph Reed. Mr. Reed, how you doing today,Joseph (02:49)
I’m doing great. It’s actually cool right now here in Arizona, so we’re enjoying it.Quentin (02:57)
You know, I’m being honest with you. I don’t know if I ever heard somebody say cool in Arizona, kind of in the same word. So I’m glad, that it’s cool that you’re enjoying it right now. I really, really am, man. That’s great to hear. And so listen, like I said, I’m excited to have you here. I’m excited for our listeners and our viewers to be able to look at things from your perspective. so Mr. Joseph, just take us into your world, man. Tell us what’s your main focus here.what your main focus is these days, kind of maybe how you got started in real estate and what markets you’re operating in.
Joseph (03:34)
Yes. So like I said, I live in Arizona in Maricopa County and that’s where I’ve decided to build my portfolio. It’s ⁓ somewhat luck that where I grew up just happens to be really popping off that there’s a lot of companies who who come here. And so it’s been it’s been a good opportunity for real estate with people retiring here and coming here for work. So thatthat gives you a good population. concerning how I got started, so just like everybody else, I had the goal of owning a home one day. so I, let’s see, I graduated from my undergrad in 2017, got my first big boy job right out of college and moved to Arizona. And from there,
We saved up and at that time back in, let’s say that next year, 2018 is when I bought my first house and it was a $9,000 down payment. And for us, that was probably our net worth. was, that was everything we had at that time. And so, you know, just got out of college. Um, my, my wife and I, we had our first child and so it was kind of like, hit all the life events.
Quentin (04:48)
Alright.Joseph (05:01)
in one year where graduated from college, got a job, had a baby and bought a house. I was, know, stress was probably up to here, just trying to manage it all.And so at that time, ⁓ we were blessed that we were able to find a four bedroom house. ⁓ our interest rates were about five, a little bit over five percent at the time. And my wife
you know, she’s amazing. She wanted to help contribute to the household income. And because I studied entrepreneurship in school, I just thought if she still wanted to be a mom and wanted to be able to have that time flexibility, probably it would make the most sense for her to try to start a business. And so she started doing, ⁓ before we moved into the house, she started a little preschool out of one of the rooms in our apartment. And then once we transitioned to the house,
the demographic was a little bit different and so she transitioned it to more so daycare. And so we had an extra room that we could dedicate to the daycare. But after a few, think about maybe a year of that, she wasn’t excited about that anymore and just wanted to focus on her own kids and not watching other people’s kids, as you can imagine. And so that room now became an opportunity.
Quentin (07:09)
Yeah.Joseph (07:14)
And I wanted to increase our income. And I was noticing at work that, you know, you’re only getting maybe two or 3%, you know, pay bumps a year. And at the rate of inflation, you know, you’re, you’re not really keeping up. So I thought there had to be a better way. So I started listening to podcasts, bigger pockets came up, ⁓ stumbled upon Robert Kiyosaki devoured all of his content. And so that’s where I got the opportunity. And I started thinking to myself, maybe I could do this.And so what I did was I took out a zero interest credit card and I renovated that fourth bedroom. Now it had its own sliding glass door, so exterior entry. And so what my plan was, was to renovate the whole thing on the credit card because I didn’t have any extra money. And from a zero percent interest rate perspective, you only have to pay maybe one or 2 % of the total balance per month, which was very manageable. So we ended up
Quentin (07:50)
Yeah.Yeah.
Joseph (08:13)
renovating the whole thing for about 12 grand and then we rented it out and then the rent paid off the credit card so that the debt ⁓ was removed but the income remained and so that was kind of my first taste of you know I think what the big leagues do you know what private equity does is they borrow money and they buy an assetQuentin (08:22)
Yeah.Joseph (08:39)
And then they’re able to either refinance or use the income to pay off their finances and own an asset. And so that was the first time that I did that. And that just made me so excited that I was able to create income out of nothing.⁓ And so from there, that’s where I really started to get that momentum of what else can I do? How can I do this again on a bigger scale? And so what we did was at that time, COVID hit,
Quentin (08:55)
Yeah.Joseph (09:10)
And we were blessed that ⁓ our, tenant that we had wasn’t the trucking business. So people still needed their products from Amazon, you know, so ⁓ he didn’t lose his job. So we had that renter whilst we were in the midst of COVID trying to figure out what’s the next move and interest rates were super low, right? And so first thing I did was to lock in the low rates. got a HELOC and so we just had that.for any opportunities that popped up and interest rates at that time were below 3%. And so the thought process there was could I do this with a whole house? And so that’s what I did was the house we’re in now, we used the HELOC as a down payment. And then because interest rates were around 3%, financing the whole thing with the HELOC and the mortgage,
was very doable for us, especially because, and this is very unique, anybody from Arizona or America County would know this is unique.
Quentin (10:08)
Yeah.Joseph (10:50)
This house has a basement exterior entrance that’s fully renovated for somebody to live in. has a full kitchen, it has a bathroom. And so the game plan was, hey, let’s do the same exact thing. We’re going to buy this asset.Quentin (10:56)
Mm. ⁓Joseph (11:09)
and then the rent is going to pay down the key lock. That was the easy part of the story. That was in 2021. But then, of course, you know, things happen. You know, it’s never a pretty straight line story. And so after about a year, the sewer line went out, the water heater went out, and then also we had to keep fixing the AC over and over and over again.Quentin (11:29)
Mmm.Joseph (11:39)
So all that ate into the profits and we had to use up our HELOC, the rest of our HELOC, to pay for those things because those are very big expenses. And so it took us probably about two or three years of not only the rent payments and our other real estate portfolio payments, but also, you my bonuses, you know, all went down towards paying down that huge HELOC.which we finally paid off last year. So it took us about three years to get it paid off. But at the end of the day, I now have the home, the home that we were first in, which has two units, technically the main house and the little studio that I created. And then here, where we’re currently at, we have the basement also generating income. And so it’s a very small portfolio, but it’s something that I felt very proud of that it
It was something that I didn’t have to really go to anybody besides the bank and say, hey, this is how good I am with my finances. Will you trust me? And thankfully they did it. It was not a reflection of how I looked. It wasn’t a reflection of how I talk. It was a reflection of my financial stewardship that the bank was willing to trust me. And I was able to move my portfolio forward. And I really appreciated that and value that.
Quentin (12:42)
Yeah. Yeah.Hmm. Man, Mr. Joseph, sir, thank you, man. Thank you for walking us through that journey. One, let me just tell you a great storyteller. So that was, that was great. And I love it. I love, I love how you started. I love where you are. I guess my question is, you still have that passion burning about real estate? I know, you know, it gave you that, that first, that first move just gave you that excitement and gave you that spark. But now I’m sitting after, you know, some trying to
some adversity, some trials, is that passion still burning for real estate for you?
Joseph (13:40)
It is, you know, I’m still looking at opportunities. ⁓ It’s just a factor of my time now. You how much time do I have? So the opportunity there is I can either partner with other people, you know, I could take on investors or I could take on a partner who, you know, maybe has the financial expertise and we could go in together to do a deal. ⁓ But yeah, time is my enemy at this point. You know, being a husband,Trying to be a full-time dad as best as I can. didn’t my dad passed away when he was 30 years old ⁓ In the military and so it’s not something that I got to experience and so it’s something that I want to make sure that my kids don’t miss out on and So trying to do that be a husband. ⁓ I am working full-time and then I also go to ASU I’m getting my MBA and so time is just not on my side like it was previously When I only had one baby
you know, and my wife and that was it. And I had all the time in the world to dedicate to it. And so I’m still passionate. I’m still looking for opportunities. It’s just, yeah, time has gotten in the way of ⁓ being able to move on something quickly because now I know how much time it takes to manage it and to get it together and to deal with problems. And just knowing all those things, has to be a very particular type of deal that I can do right now if I’m going to do one.
Quentin (15:47)
Like I said this off, know, Cameron, when you and I was talking, you know, backstage, and I’m gonna just double down again, man. Every time you talk about your family and being a dad, and even thank you for, you your gift, your vulnerability, Shannon, about your dad passing away, I think you said when he was, when you were 30, is that correct? When you were 30, right? he was 30.Joseph (16:06)
when he was 30 years old. I was three years old, my sister was one, and my mom was pregnant with my last sister. And so she was a military widow with two young kids and one on the way. And by the grace of God was able to raise us all.Quentin (16:08)
Got you. Got you.Yeah.
Yeah, amen, man. Congrats to your mom. mean, and just, again, I’m just so impressed when you bring your, the dad, wanting to be the best dad you can be in a conversation. That’s inspiring because sometimes in our journey to be successful, some of us, that can get lost. They can get lost sometimes, you know, that gets lost out of our vision. So I just got to say again to you, know, hats off to you. There’s no doubt in my mind.
that you are an incredible dad because that awareness is right there in your forefront. And so I just had to come back around and say it again, man. when you, when when you start talking like that, it’s, it’s cool to see you, man. And it’s, it’s, can see why you’re building, you know, why, know, why you work because you’re the main thing and the main thing. And I love hearing that man. And so Mr. Joe’s, I just want to ask you this. Like, so what is your, what’s the real next goal? Like what’s the real goal? What are you looking to scale next?
Joseph (17:24)
You know, right now the idea for me is that I’m wanting to, with my MBA, still trying to increase, you know, my status in my company where I’m able to grow and toother forms of ⁓ leadership or roles and take on more responsibility. Also though, the MBA is helpful. You know, it actually does teach you, as long as you’re not looking for just, you know, a thousand dollar online program that, you know, it’s just going to give you the letters. You know, I am looking for an education and that’s why I chose, you know, ASU accredited, respected, and I can understand why. It has, you really good teachers and I’m learning.
I’m actually learning a lot of really important principles that I’m able to take into my business. you know, it’s like looking at operations and looking at capacity and bottlenecks and processes and being able to think through that. How am I going to be able to spend time with my kids unless I create a process that can take care of itself? And so for me, the next the next steps are to complete my MBA and get those higher levels ⁓ within the company.
and then continue to scale the real estate portfolio on the side. So that could look like, you know, ⁓ maybe buying another single family, or it could look like trying to buy a duplex, triplex, quadplex, ⁓ either using my Hewox again, or finding a partner that I trust and that we go in together and we get something going. And so that would be, would say the next step from the real estate portfolio perspective. ⁓
It is challenging house hacking. And for those listeners that that’s the first time they’ve heard of that. That’s where like in my first example, I had a house and I rented out a room to somebody and they’re helping contribute towards the household finances. That’s house hacking that you bought a house, but you’re able to create different sources of income within the house or renting out the rooms. So I did that there. I’m doing that here.
that’s difficult for any family, you know, trying to figure out, cause you also have, you know, my wife who wants to be safe and wants our kids to be safe and having to think through, okay, well, how do I do this and have her and the kids feel safe at the same time? And those are all things you got to think about. And so I would say that is difficult. And we, it’s not something that’s on the forefront. And you know, if we move into our, another house, it probably will not have that aspect to it. I will say for those who are interested in doing something similar, but
don’t want to have to maybe go through the hassle of creating a new space. You can do what’s called a foreign exchange student program where they actually pay you to house a foreign exchange student and you just have to take them to school and give them an American experience if you’re in America. And yeah, I mean, they pay you for that. So mean, that’s another way that you could house hack, but it’s a little bit more comfortable because it’s a student. They’re not really there. They’re out at school or
hanging out with other American kids. So that’s another thing that we’ve done that was really helpful. So I just want to make sure that people know there are multiple ways to increase income if you’re curious about this journey.
Quentin (20:46)
Yeah. No, man, this is exciting. I thank you. I thank you for sharing your plan. Thank you for sharing the hacks. ⁓ it’s no doubt in my mind, man, I’m listening to you. Have been listening to you. You you put a plan together and it succeeds. I love how you were talking about the stewardship that you show. Like we had to go to the bank because of your stewardship. They was able to look at pretty much kind of who you are and how you do things and, they able to trust you and say, no,We’re going to go ahead and move forward with this gentleman because we know that he has shown a pattern of stewardship. And so I say that because I can just see the plans you’re putting in place with your NBA, how you’re going to use the NBA, how you’re using the house hacking, the different things you’re putting in place. There’s no doubt in my mind that it’s going to lead to success because I’m listening to you and it seems like you have a trail of success. And so I love it, man. I love the nuggets that you’re dropping and I’m really, really thank you for sharing.
Joseph (21:27)
you you ⁓Quentin (21:41)
I think the last question I kind of want to ask you is kind of around relationships, especially business relationships. And I just want to see what’s your viewpoint or your vantage point when it comes to relationships, like, you know, growing yournetwork, building relationships, has that made a big difference or impact on you?
Joseph (22:01)
Definitely, you know when I was first starting out Let’s see back in 2019 that was when I was doing the renovate I was in the midst of the renovations and I just realized that hey, know, this is still a new industry You know real estate investing and so there’s a couple moves that I did make that I think were very helpful onewas that I was looking for different real estate opportunities. And so I was just contacting a lot of different brokers, a lot of different agents, and just talking with people. Even if I knew within my heart that, you know, like, I don’t know how the heck I would put this deal together, but I just want to talk to people who are in the industry, learn the lingo. And the interesting thing about that is when you at least have a plan together, people are willing to talk with you through your plan and advise you.
And so that’s what I did was I just talked to people in the industry. They would give me contacts. like, Hey, if you’re going to do this, talk to this person. And so I have been able to build up a bit of a, a bit of a network. And so now, you know, for example, when I was moving from the first house into this house that we’re currently in, you know, I was able to use a, a mortgage broker. That, you know, had my best interest at heart and was really to, was willing to work with us to find, you know, what’s the best.
mortgage option for us. And I’m so grateful that I had made that relationship earlier before I needed it. And that enabled us to be able to do this deal and to be able to make it successful. Another example is I also, think we were talking beforehand that I’m not a part of too many groups, but I do believe in going to networking opportunities. And so in
Scottsdale there was a networking opportunity for real estate investors and an update on the real estate market for free. You know, it’s just my time and gas. And when I went there, I found a syndicator or somebody who does put these types of gills together professionally. That’s the whole business is to put a deal together, find investors and generate returns. And I was able to talk with them, you know, about their business and say like, Hey, I just want to learn the business. How can I offer value?
you know, and ⁓ they say, hey, we’re looking for an admin, like a virtual assistant. And I said, I’ll find them for you, easy. So I went home to my wife and I was like, hey, how do you feel about being a virtual assistant? And she was actually excited about it because she’s like, well, I get to stay at home and I’m, you know, type A personality. And so it worked out and she ended up working with them for a number of years virtually. And I was able to glean from them.
Quentin (24:22)
Yeah. Yeah.Joseph (24:44)
you know, how does the business work? And that was another relationship that we strongly value. ⁓ And so yes, mean, relationships have been very important to me in this journey of just being able to attach ⁓ your success to and to be able to learn from different people is ultimately going to help you move forward. exactly what they say, your network is your network. And that’s 100 % true.Quentin (25:12)
Man, Mr. Joseph, I love it. Thank you so much for sharing. You’re absolutely like, relationships are everything. And I love the way you took advantage of the relationship that you built in. And you was able to listen, you had to go on no online, put out no ads. You went right to your wife and said, hey, what do you think? And she was like, let’s do it. And I love that, man. I love that. And again, I have to say, going double and back down.I get so excited when I hear a husband that’s taking care of his wife and his family, partnering up with his wife, man. Just hats off for you. I just want to let you know you’re doing a great job. Not that you need it from me, but I love when I hear stuff like this, man. So thank you so much. And so listen, man, listen, before we wrap, I’m not sure where you are, but I just want to give you the opportunity. If there’s, if you wanted people to connect with you, if you have something that you want to put out there as far as a website or email, like,
Joseph (25:46)
you ⁓Quentin (26:10)
If someone wanted to collaborate withyou or just reach out to you, if you’re open to that and you want to share that information, what would be the best way for them to reach out to you?
Joseph (26:19)
I’m pretty active on LinkedIn. You know, I have some of my other work that I’ve done. And so if you specifically search Joseph O. Reid, the fourth Roman numeral IV, you will find me. Joseph Reid is the most European.average name, you’ll see a million people. But if you look up Joseph O. Reed IV, you’ll get me directly. Connect with me. Let’s chat. If you have questions about the journey that maybe I didn’t cover, happy to share it. If you’re in your own journey and you’re just wanting somebody to bounce ideas off of, I’m also happy to give my thoughts. Like I said, happy to be part of someone else’s network by being a part of their network.
Quentin (27:08)
Absolutely. Well, listen, there he is, everyone, Mr. Joseph Reed. Sir, thank you so much, man. Thank you for your story. Thank you for your time. Thank you for your perspective. Thank you for the nuggets that you dropped. It was a pleasure just being here with you, man. And so again, I just want to thank you for giving us some of your time.Joseph (27:27)
Likewise. Thanks so much.Quentin (27:29)
Absolutely. All right, everyone, you’ve heard of Mr. Reed. And you know what I’m going to say, if you’ve been following, you do not want to miss out on these valuable conversations. So please make sure you are subscribed. Just hit the little bell, hit the little button. That way we let you know when we come in with these good conversations. All right. So to everyone, thank you so much. And Mr. Reed, thank you again. And we’ll see you all on the next time.
