How to Avoid Real Estate Investing Sharks|Ginger Faith on Bad Deals,Brokers, & Buyer Beware

Ginger Faith (00:00)
So if you’re to get involved in real estate, you’ve got to be really, really careful because there are sharks everywhere. And they smile and they’re really nice. And they’re very respectful and polite, but they just want to get the job done. They just want to get a deal sold so they can get the commission in their pocket. And they’ll just represent. It really is a buyer beware in the investing world. There’s nothing to protect you. And you need to know that.

Michelle Kesil (01:59)
Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil, and today I’m joined by someone I’m looking forward to chatting with, Ginger Faith, who is a commercial property investor, as well as a realtor and developer who has also done many fix and flips. So all across the board. So very excited to have you here today, Ginger.

Ginger Faith (02:21)
Thanks for having me.

Michelle Kesil (02:21)
Of course, let’s dive in. First off, for those not familiar with you and your work yet, can you share what your main focus is?

Ginger Faith (02:30)
Right at the moment I’m building a couple of luxury homes in a beautiful area of Danville, California.

We’re building two 4500 square foot homes. California has been very, very pro building lately. The cities and towns not so much, but the state is. And so right now we’re building two 4500 square foot homes on one and a quarter acre lots. We’re splitting the lots. We’re building an ADU in the back. It’s got a dry creek in the middle of it, so we’re getting California Fish and Game involved. Very fun. But it’s going well. Of course there’s obstacles, but that’s part of

game. It’s going well so far. So that’s what I’m doing right now. I’m also in contract to purchase a retail center and doing my due diligence on that. So other than that, helping a lady buy a home and doing five remodeling projects.

Michelle Kesil (03:22)
Amazing. And are you only operating in the California area?

Ginger Faith (03:27)
⁓ have an Airbnb outside of the state and if I found an opportunity out of state only in commercial, that’s the only only in retail commercial and only I have partners all over the country that we meet once a week on zoom and we meet once a quarter in person. So if I found one of my friends was in the area within an hour and they wanted to partner with me I could go all over the country but for the most part I’m right here in the Bay Area Silicon Valley.

Michelle Kesil (03:55)
I know that you mentioned you’re in all different walks of real estate. How did you learn and get into each different asset class?

Ginger Faith (04:08)
Well, in real estate, if you’re going to be getting involved in real estate at all, you absolutely always have to be learning because it’s going to leave you in the dust if you don’t. And that’s the exciting part. You know, there’s a lot of people who are comfortable with their W-2 employee jobs and some of them are phenomenal. They’re doing, know, around here you got W-2 employees who are, you know, AI workers and you know, they’re learning and they’re at the cutting edge of the future. But there are some people who are really comfortable just, you

⁓ time stamping the clock and then going home and watching TV. And that’s not real estate. Real estate, if you’re going to dive in, it’s a very encompassing job. But it’s what it is, it’s a career that makes you mentally alive, mentally engaged, because you’re collaborating with people who are smarter than you, if you’re pushing the envelope, if you’re curious, if you’re learning. If you’re not curious and learning, either you will be left in the dust or you’re have to learn to be

curious. So because it’s always dynamic and changing. So in the 90s, I was built buying apartment houses because I could find them with a great deal. But in 1989, when I was too young to even think about that, people were buying them and then they lost them because the market shifted. There was a big

crash because of a tax change, like in 1990. And that’s when Donald Trump got in trouble. That’s where people, older friends of mine lost every, you know, all their other…

Wealth at the time they had to build it back up again, and I started in 94 picking up picking up the pennies You know pennies on the dollar picking up apartment houses because that was the market then and then things changed again We had the dot-com crash in you know 1999 2000 but then the mortgage rates were really low and I became a mortgage broker, and I helped people to get mortgages

We had to learn a completely different skill set to do that. And then in 2008, we had another crash. So with that crash, what do you do? You don’t sit around and pry. You have to figure out what to do. So then I started flipping properties back. Kind of like did my first flip in in 96, but I didn’t pursue that as a career. And then when I moved to California in 2001, became a mortgage broker, there was no flipping that made sense to me. People flipped, but then they flipped, got flipped on their head in

2006 they made money and they lost it all then I started again in 2009 Flipping until 2014 so it’s really just a matter of looking around talking to people being aware reading Now you can watch podcasts you couldn’t watch podcasts in 1994 when I started just kind of look around and you Look in the newspapers and you look at them see what’s going on and ask questions and try to find mentors There’s real estate investment clubs all over the country and there’s podcasts now you can get you can dive in

But the most important thing for a person getting involved in real estate at all is to realize that ⁓ real estate is hyper local. And if you know your area, find out what the opportunities are in your area. Bay Area is very tough in a lot of ways, but luxury home building, there’s a niche for that. You just have to find the land.

We have a formula for finding specific types and then we, you know, and we’re not just regular flippers, we’re luxury home builders. So that’s, but there’s a formula for that. And so find out what, who’s doing what in your area, who’s successful and join their team, you know, or do it on your own. So it’s just a matter of, it’s impossible to say, you know, what, where I learned, cause you’re always learning. You learn here, you learn there, you know, attend the more real estate workshops that you go to, the more you’re to learn. You’re always going to pick up something.

network. yeah, just just it’s more fun. It’s more invigorating to always be having your mind engaged rather than, you know, having it dormant.

Michelle Kesil (08:56)
Absolutely. And so you just mentioned that there’s the process for luxury home building and finding the lots and the pieces. What can you expand on what that process looks like?

Ginger Faith (09:08)
⁓ For us, it’s a matter of letting people know what we do and like realtors and letting them know what our criteria is, what our buy box is. It’s the same thing when I’m buying commercial, real brokers, commercial brokers know what your buy box is. Finding out what is it that you want, what are your goals and what’s the best opportunity, right? So in this particular case, you had one and a quarter lot, ⁓ acre lot in a phenomenal location in a great city. We know the demographics because my business

partner lives there, lives like within walking distance of this house. And so he was out there chatting with people at a networking meeting and the guy said, hey, you need to take a look at this lot. I’m selling it and take, know, and so, then the other day somebody asked me, it has a 17,000 square foot lot in Lafayette. They’re off market, they’re selling, but I didn’t find it by accident. I was at a networking meeting for a weekend a month ago, right? Made the connection. So that’s how it, that’s, you know, that’s how it happens.

find you find out what it is that you want. Obviously, we need to know the laws. What are the compliance laws? How can we squeeze an ADU in? Because it’s about square footage, right? So in that area, you can get about $1,000 per square foot. But you’re if you get with a good contractor, he can get to the property and you can get into it for like $500 a square foot. So there’s your margin, right? So it’s just a matter knowing your area learning learning from other people. I’m learning a tremendous amount.

from my business partners. They know more than I do in a lot of ways, but they’re willing to teach me because I’m willing to learn and I’m willing to help. It is a giver’s gain kind of mentality with everybody. How can I contribute? When you always have that attitude of always adding value, people see that and then they want to hang out with you because they know that you’re always growing and you’re always adding value to somebody, so then they have value and then it’s just an upward cycle. And that’s the way like to live my life.

much more fun than the other ways.

Michelle Kesil (11:10)
Yeah, amazing. That’s a good way to look at something that is your career and making it this more of an interactive learning experience.

Ginger Faith (11:19)
Mm-hmm.

Michelle Kesil (11:22)
What advice would you give to someone that’s wanting to get started as an investor?

Ginger Faith (12:01)
I would say know your market.

Know your market define what it is. What does that mean? You want to be investor? Because if you just want to be an investor you could really you could really mess it mess up right I messed up a couple times. I bought something I’ll give you a bad example. So they did wrong. I thought it was a good deal. It was like an 11 cap in, Ohio House looked good. I never actually went to see it, but I found out that it was the nicest house in a worst neighborhood later on I had a good manager

But ultimately I didn’t make any money because it looked like really really good on paper. The numbers were great, you know, like bought it for like $65,000, $900 each per duplex.

It’s like nine hundred and then twelve, no, about nine hundred a piece, you know, for a duplex. I’m like, oh, this is a great, great deal. But what ended up happening was because it was in a bad neighborhood, every month there was something. Every month there was something, even though the house was in good shape. It’s like, oh, sorry, somebody was smoking a cigarette on the deck today and they blew up the deck and it has a fire. Don’t worry, we’re fixing it, but it’s going to cost you twenty five hundred bucks.

So I would say if you’re an investor, know what you want. Don’t just throw out money there. Find somebody who’s doing it already in your area. I think it’s good to start in your area ⁓ and not ⁓ far away to start with. You can go far away. People do it, but it’s not quite the same. ⁓ So I’d say know your area and know what the opportunities are in your area. ⁓ If you are going to invest, then get a partner out of your area.

like I said, California is tough. Find a partner that you absolutely can trust and get involved. But start understanding the numbers. would say learning underwriting is critical. do banks, banks ultimately make the most money in real estate more than anybody? What do they do? They know underwriting. And they train their underwriters with precision. So you need to know underwriting. If you don’t know underwriting and you’re not willing to take that boring time,

The HTTB has been really cool and fun and you you flip a house in a half an hour. It’s really cool to do that and it looks really amazing and everybody’s happy. But the reality of real estate, I flipped my first house and I got funny, you can see it online in some other places. I had a tool belt and hiking boots and I actually was in my first flip doing the thing. I was the original tool time girl in 1996.

And that’s the reality, it’s not glamorous at all. And you have to know numbers and you have to know like, what is this really gonna net you? And that’s not exciting. What happens, people get excited because it’s been glamorized and people get hurt badly. And this is not a glamorous business at all.

It’s challenging and interesting and can be very profitable. You know, they say that you can become a millionaire in real estate, but not in the first year. Right. And so in the first year, you can actually go back. You’re going to go backwards. You know, you can lose a lot of money. People lose money all the time because they jump the gun. Last night, I was telling you that I was at 10 o’clock at night. I was underwriting this deal, this ⁓ retail center with my partner.

and there’s so many details, so many details that have to be considered. It was advertised as an 8.67 cap, but by the time we got involved in it, like really went into the details, it was really a six cap, which was a significant difference in what the true value is, but you don’t know that because the salespeople aren’t gonna tell you that.

So if you’re to get involved in real estate, you’ve got to be really, really careful because there are sharks everywhere. And they smile and they’re really nice. And they’re very respectful and polite, but they just want to get the job done. They just want to get a deal sold so they can get the commission in their pocket. And they’ll just represent. It really is a buyer beware in the investing world. There’s nothing to protect you. And you need to know that.

Your only protection is a great team.

people that care about you and your own intelligence and learning and education. But generally speaking, know that nobody’s out there to protect you. And I would say that’s like the number one thing. know, Richard Branson says that if you can protect your downside, the upside will take care of itself. But the challenge is protecting the downside. People tend to be quick in making decisions, lazy.

⁓ and they just want to get a good deal. They want the adrenaline rush of having a deal, you know, those are extremely dangerous to your pocketbook.

If that’s what you want, if you got a gambler kind of a thing going on with you, then the results are going to be the gambler’s loss in real estate. So I don’t know if that answered your question. I went around a little bit, but I made some salient points.

Michelle Kesil (18:10)
Yeah, absolutely. Thank you. Shared a lot of wisdom there. And so what are you most focused on scaling to next?

Ginger Faith (18:18)
My retail, my retail. The luxury home building is something I’m very excited about and I love it because it’s like building a beautiful home out of nothing. It’s very exciting. But ultimately, I’ve got a goal of owning four retail shopping centers. So that’s something constantly in my focus. However, realistically, I’ve got five remodeling projects. So it’s really a matter of doing what you need to

do in adding value along the way while staying ⁓ focused on the tenure picture. So and so yeah, that’s that’s that’s it.

Michelle Kesil (19:02)
Awesome. And is there anything that you kind of are predicting for where like the market is heading to or anything that you’re seeing in terms of like expansion in the market?

Ginger Faith (19:14)
I’m always hearing market reports. part of the ⁓ Commercial Academy with J. Scott Scheele and he gives us once a month. He gives us a market overview, but honestly, know, know it. No one really knows. ⁓

You know, they know little things here and there but the market is too big for any one person. And so I just watch what’s in front of me, pay attention the best I can, stay abreast of things. But I don’t get too caught up in things. You know, sometimes that’s a bad thing but normally it’s not. You know, in the 2007-8 crash, that was a problem not having foresight but nobody had foresight. So you just made the best of the situation and then

and then pivot it. So today, I would rather not spend the time. When I spend time watching the news, forecasting, I’m not an economist, I’m an opportunist. And if I spend my time being an economist, you know, and trying to figure it out, I’m going to miss opportunities that are right in front of me. And if I have to pivot with what’s in front of me, then I pivot. You know, right now we’re dealing with high oil prices, inflation, high price, you know, there’s all of that. It’s real.

Inflation is really real. ⁓ Labor costs have gone through the roof. California has become challenging, you know. But you just take things one step at a time. Live in day-tight compartments. And over the 30 years I’ve been doing that, that is the best strategy. When I watch the news, I watched the news a couple years ago. I had a boyfriend who liked to watch the news and I was getting aggravated all the time, you know. And we would just get pissed off at the end, this and that, and this and that. And then

Once Donald Trump got into office the first time, like in 2016 or something, whenever I was there, I just said, oh God, this is gonna be a shit show. I’m not gonna watch the news anymore. Because I don’t even, this is gonna be crazy and I’m just gonna get involved with the craziness. And I stopped watching the news and guess what? Nothing, it was fine.

It was fine. I was more productive, right? Not getting aggravated every day. So I prefer, like I said, keeping my peace, keeping my mind sharp and clear, keeping my my nervous system like calm. And so it keeps your brain calm. And so when things happen, you know, you can pivot. So I’m not an economist. The future is going to be the future. I mean, you hear all sorts of stuff about AI. Yesterday, I had dinner with a few people and the gentleman was part of a startup.

a very powerful startup ⁓ in the AI sphere. You hear what’s going, the race between us and China and all that.

What are you gonna do? Spend your entire life worried about what’s gonna happen with AI? Are we in a Terminator movie? I don’t know. So unless I can do something about things, I’d prefer not to think about it. And that’s worked pretty well for the most part over 30 years, and it keeps my nervous system calm, which is the big goal.

Michelle Kesil (22:30)
Definitely, I can understand that. Awesome, thank you for sharing everything. And before we wrap up here, if someone wants to reach out, connect, learn more, where can people find you and connect with you?

Ginger Faith (22:41)
My name is Ginger Crystal Faith So I’m pretty much on I’m pretty easy to find because of podcasts like this and I’m on Facebook And I think I’m the only Ginger Crystal Faith on Facebook So if they wanted to reach out to me directly I would say a Facebook message would probably be a good way because I’m on Facebook fairly regularly I want other things but not as Consistently, so yeah, that would be the best way I think

Michelle Kesil (23:04)
Perfect, well, I appreciate your time and your story. Thank you for being here.

Ginger Faith (23:07)
You are welcome. Pleasure to have you be with you today.

Michelle Kesil (23:10)
And for the listeners tuning in, if you got value, make sure you have subscribed. We’ve got more conversations with operators like Ginger, who are building real businesses, and we’ll see you on our next episode.