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Show Summary
In this conversation, Colter Hansen discusses the current state of the real estate market, emphasizing the importance of adaptability and long-term investment strategies. He highlights the significance of understanding interest rates and market dynamics, while also advocating for an abundance mindset in real estate investing. Hansen provides insights into the resources available for investors and encourages a focus on wealth creation over quick profits.
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Investor Fuel Show Transcript:
Colter Hansen (00:00)
I think that the problem that a lot of us get into is ⁓ analysis paralysis. Now we have to do our research, but if it is so crippling that it doesn’t allow for us to ever make a decision to actually move forward, then it’s counterproductive. In order to reach our goals, we have to makedecisions and take steps, and often steps and leaps of faith toward the goal that we have set for ourselves.
Kristen (02:08)
Welcome back to the Real Estate Pros podcast. I’m Kristen and I’m here with Colter Hansen, who is a full-time real estate and business investor focused on acquisitions, development, and long-term wealth creation. Thank you so much for being here, Colter .Colter Hansen (02:20)
Thanks for having me, Kristen.Kristen (02:21)
So you built a really impressive portfolio, you got into the game in 2009. Tell us all about how you got into it.Colter Hansen (02:28)
Well, I had talked to lots of family friends and had ⁓ developed an interest knowing that real estate was one of the avenues I wanted to use to be able to build wealth and passive income. in ⁓ 2008, my wife and I got married and then quickly we moved to Pocatello, Idaho. And we moved into a house, it was actually a duplex and that duplex was actually in foreclosure.And so I was working with the owner and I was working with the bank and I was trying to get that bought out of foreclosure and working a short sale and working with loss mitigators. And ultimately I failed at getting that deal done. It foreclosed on the owner and ⁓ my wife and I received a three day eviction notice. And in that process and going through my mind of, you know what, I need to figure this thing out. ⁓ We got moved out in three days.
Kristen (03:25)
⁓ That’s really cool.Colter Hansen (03:25)
good and founda place really fortunate. We weren’t just thrown out onto the street, which definitely felt that way. And so a few weeks later, my dad called me and says, hey, let’s go to this real estate thing and learn about real estate. I know that you want to figure it out. I did that in that process. dove in, got educated, wanted to learn about real estate, to know all of the tactics.
And in that process, I set a goal that I would buy one property every single year. And in doing that, starting in 2009, I’ve been able to buy one and up to 40 plus doors in any given year since 2009. And that was really the kickoff. I knew that I wanted to do it. I didn’t know it. I didn’t know. I lost out on one deal.
impacted me and my wife, they were newly married and ultimately I was like, I’m going to figure it out and I believe at this point we figured a few things out with a lot to learn still.
Kristen (04:26)
Absolutely, I mean that’s so cool. I mean you were able to kind of bounce back from a rocky start into it, which I think a lot of people face that but then give up. So what was kind of the turning point where you really wanted to keep with it?Colter Hansen (05:29)
Well, you think that I would have quit after a couple of raw deals that didn’t go as well in 2010. in those deals, I call it my Harvard cost equivalent education. We lost in the six figures on a couple of deals. We bought them at an auction. We fixed them up. They were beautiful properties. And ultimately, the market in Seattle, Washington just wasn’t ready for these two properties.Nothing was moving at that time and ⁓ we ended up needing to sell those for what we owed on them. ⁓ Not what we were owed, ⁓ what we had put into the properties, but short of definitely the amount of cash we put into them. so that could have been a turning point, ⁓ but I think it really just comes down to either my determination or my stubbornness. It depends on who you’re asking. ⁓
as to whether I would continue on with this dream of being able to develop a real estate portfolio. And so my wife and I had some pretty frank conversations. And like, hey, you know what? Is this for us? And how are we going to manage this? And now we’re students still, and figuring this whole life thing out. Now we’re in a bunch of debt. And we’re going to pay it off. So now let’s figure it out.
Kristen (06:29)
ring.Colter Hansen (06:51)
2011, we bought another property. In 2014, 2012, we bought four and we just kept accumulating. so the turning point definitely had, I had opportunities to step away, ⁓ but we just, it was for us. We want this life.Kristen (07:06)
Right.Absolutely,
So as you were building out your portfolio, how important was it to do your research and how important was it to just learn on the job?
Colter Hansen (07:21)
I think that the problem that a lot of us get into is ⁓ analysis paralysis. Now we have to do our research, but if it is so crippling that it doesn’t allow for us to ever make a decision to actually move forward, then it’s counterproductive. In order to reach our goals, we have to makedecisions and take steps, and often steps and leaps of faith toward the goal that we have set for ourselves.
That doesn’t mean that you’re going to be able to eliminate all uncertainty. But as we sharpen the saw, we can definitely prepare ourselves to cut the tree down. But if we never take the saw to the tree, will never
We’ll never accomplish the goal. If we’re trying to down the tree and that’s the goal, we have to sharpen the saw. But there’s a point when it’s sharp enough in order to chop that tree down.
Kristen (08:28)
Yeah, and I feel like a lot of people, the more they learn, the more they get nervous and they almost know too much. I feel like there has to be kind of a part of you that has the optimism still that it’s gonna work out.Colter Hansen (08:41)
Yeah, I I think that there ⁓ are steps in our decision making as business owners or as investors. And ⁓ we start out in an uninformed optimism. Then we enter this stage of informed pessimism. And if we can get through that stage of informed pessimism, then we canre-enter the place of optimism, but now it’s an informed optimism. And I think that that’s really important for us to accept that there are going to be stages in either the transaction or transactions ⁓ where we’re going to be informed. It just might have made us pessimistic because it wasn’t the perfect scenario that we were looking for.
⁓ If you’re looking for perfect scenarios, investing probably isn’t for you. ⁓ You have to be adaptable ⁓ and be okay with a few curveballs, ⁓ but there are also ways to prepare for those curveballs and it’s again taking steps. So some of it’s on the job to come back to your original question is like, yeah, we have to do our research, ⁓ but some of it is just in the process of doing the work and.
making the decisions and proceeding forward and learning in the process and ⁓ not being afraid of learning while we go.
Kristen (10:43)
Absolutely, I think that’s really good advice and kind of finding that fine line. ⁓ So what’s interesting about how you built your portfolio is you set out to buy one a year. It seems like you grew in a very thoughtful way and a very manageable way. Can you talk more about that?Colter Hansen (10:58)
Yeah, that goal set in 2009, obviously, I was starting from zero. I had nothing to my name. And then in 2010, I had much less than nothing. We went in the hole. But setting that one goal and starting in 2009 and knowing that we wanted to buy one property every single year wasa meaningful accomplishment, especially because of how the goal was set in 2008, 2009, when we knew that we wanted a real estate portfolio. But then every time we conquered that goal again the next year, it was this new sense of accomplishment like, you know what? We did it. And now why can’t we do it again? so doing that in
09, 10, 11, 12, know, all the way to 2025. ⁓ It’s every year, I know that I’m doing at least one thing in the year, and I can check that off the list and I can say, yes, accomplished. And ⁓ that’s also opened me up to a lot of other opportunities. ⁓ My belief and my mantra has become ⁓ the opportunity of a lifetime.
comes around but once a week.
Kristen (12:19)
I love that.Colter Hansen (12:19)
Andso, yeah, it’s just, but that’s my mindset now. ⁓ And I think that as I share my story or as other people share their story, I think if we can all enter into this mindset of, you what? The opportunities are abundant. It’s just a matter of me being open-minded enough to finding what those deals are, where they are, and then being willing to do the work to…
make them happen and add them to the portfolio.
Kristen (12:47)
Absolutely, I think that’s such a good mindset to be in. Yeah, the once in a lifetime opportunities don’t exist. You have them all the time. I love that. And so you’ve, you you started in 2009 and you’ve been investing ever since. You’ve seen so many ups and downs in the market. What have been kind of your insights from the last, you know, several years and where do think we’re at today?Colter Hansen (13:12)
So obviously we’ve seen ⁓ COVID influenced real estate markets, ⁓ an interest rate market that was crazy low in my opinion. And the more that I visit with economists and I ask them like, hey, know what, what is normal in the market? And where do you think that it’s going? Well, it’s all everyone’s best guess. But from like an interest rate standpoint,as the quantitative easing enters the marketplace and we reduce the interest rate and we allow for an inflow of additional capital into the market. ⁓ And we also introduce ⁓ new options in the market like a 40 or a 50 year ⁓ mortgage option for the consumer. ⁓ It’s obvious that our regulatory environment
is wanting for more capital to enter the market so that it can increase ⁓ the ability for the consumer to buy. ⁓ You also have many in DC that are real estate investors. And so they are personally interested in influencing their own real estate portfolio. And so I think they’re doing everything that they can to protect the market, which I mean,
All politicians, I would think, should be doing that in the interest of general public. But I think that what they’re looking at is an opportunity to continue to have capital flow into the market, not see this gigantic real estate crash. The market is definitely settled in the last year. And when I say settled, it means that ⁓ the days on market are increasing. ⁓
all the time or at least have in our market and I’ve seen that in other larger markets is that the homes in the median and even in the high income categories, the days on market are increasing. And in our market, if it approaches a million dollar price point, it’s sitting on the market for eight to 12 plus months. But now is…
as capital is allowed to inflow into the markets more so you have interest rates that are easing. We’re not going to get back to the 2 or 3 % interest rate anytime soon. I think that that would be irresponsible. But the economists that I’ve been visiting with, they say that a normal interest rate is around 7 to 9%. And if we’re coming down to a 6 % interest rate, I think that people should jump on that.
They should be
ready to buy and also realize that because sellers have been sitting on the market for several months or if not years, ⁓ ready to sell their homes and they’ve been waiting for the interest rates to drop, I don’t know that they’re going to drop any too quickly. And so making the decision to move right now and buy those homes, buy that investment property is probably most advantageous for them to pull the trigger and
and enter the market, buy assets, add assets to the portfolio and start creating that wealth through real estate.
Kristen (17:16)
Totally. I mean, I think that’s a really good breakdown. I think a lot of people are very confused and they don’t know if it’s a good time to enter and I think, kind of speaking to what you were saying earlier, I think people kind of freeze and maybe don’t enter. But it’s good to hear optimism around the market.Colter Hansen (17:33)
I’m very optimistic, but I can also be a little bit more optimistic, ⁓ I think because of the mindset that I find myself in. And it’s because I’m not looking for a quick turnaround win. I’m not looking for a 20 or a 40 or a $100,000 winfall of cash on a fix and flip. While those are nice, ⁓ I’m really looking for the long-term wealth creation. I’m thinking 10.15, 20 years down the road and the kind of cash flow that I can create in passive income that allows for me to pay bills and go on vacations throughout the year and not just be like, hey, you know what, let’s go and blow this 100 grand on a single vacation and then, oh wait, we got to go and do another fix and float to do it again. I’m looking for the long-term solution and that’s where, if you can be patient.
You know, in 10, 20 years, any real estate that you buy right now, in my opinion, and on average is going to increase by, I think it’s 3.7 % on average in appreciation. So, you’ll be okay in 10 to 20 years, if you can hold on to it and cashflow it in the meantime, you know, but I’m cashflow focused.
Kristen (18:42)
Yeah.Yeah.
Absolutely. I mean, I love your abundance mindset. What are your tips for kind of getting into that space if you maybe aren’t naturally like that?
Colter Hansen (18:56)
I think that ⁓ my abundance mindset comes from what I call it, they call it a recency bias. ⁓ And in recency bias, the philosophy is that if you have had a string of successes ⁓ or accomplishments that went as planned or as close to planned ⁓ as you thought, thatyou are biased toward the idea that you will succeed on the next one. And so I think that creates an optimism in us. ⁓ Look, I’ve done everything from flip cars, ⁓ buy cars and sell cars, to buy RVs and sell RVs, and buy houses and add them to a portfolio. But it doesn’t have to start with the
40 unit multifamily complex that is going to require a million dollar rehab and you’re going have to manage contractors as a project manager for the next year in order to get that done. Like pull the trigger on something and if it’s just buying a $3,000 car and flipping it for $3,200 and making a couple hundred bucks, like that’s a win. And so it doesn’t have to be this overnight success.
Kristen (20:13)
Yeah.Colter Hansen (20:17)
And I think that that’s what we get in the habit of as humans, like it’s just our human nature to say, Noah, because I thought of it, it will be. Now, it can be, it just doesn’t happen because you thought of it. ⁓ And I like what… ⁓I like a quote and I will remember who it’s from, ⁓ but a lot of people won’t get rich because they’re not willing to get rich slow.
Kristen (20:45)
Mmm. That’s a really good point.Colter Hansen (20:48)
So it’s just steps, right? We’re looking for a subset of principles that are truths and applying those principles and taking steps toward the kind of success ⁓ or accomplishment that we’re looking for. But it’s slow sometimes. And most often it is slow, because if we’re trying to push it too quickly, we’re going to make mistakes. And that’s where people get burned.And that’s what I’m trying to avoid.
Kristen (21:13)
Absolutely.Yeah.
I mean, I think you just gave such great advice and I think that people, if you can kind of function out of a place of gratitude, you’re more likely to see winds around you and kind of to your point, success breeds more success. So kind of getting into that mindset I think is super powerful. Well, I think you’ve given great advice on people entering the market, people who are scaling. Tell everyone where to find you and how to work with you.
Colter Hansen (21:41)
Yeah, absolutely. So I’m in Idaho primarily, but there’s a couple of websites that I would suggest people go to, some free resources on those. One is an analysis tool that we’ve built that’s called Analyze360, and that’s on analyze360.org. it has, so,There’s that tool. It has everything from business valuation tools to ⁓ fix and flip analysis, buy and hold analysis, BRR analysis, et cetera. And it’s a free resource. We just want people to utilize it and put it to work and help make decisions in how they can put real estate together. And then another one would be investre360.com. investor.
⁓ We’d love to have you go there and get in touch with us. At the end of the day, we want to work with more awesome people and be able to grow. We buy real estate and we buy businesses. If there’s an opportunity of a lifetime that you want to talk about, then we would love to be in touch and look at those opportunities.
Kristen (22:56)
Love that. Well, thank you so much for being here, Colter .Colter Hansen (22:59)
Absolutely. Thanks, Kristen.Kristen (23:01)
And thank you everybody for listening. I hope you learned a lot and had a lot of good takeaways to maybe look at your business and your mindset a little bit differently. We will see you back next time. Bye.
