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Show Summary
In this episode of the Real Estate Pros podcast, host Erika speaks with Jake Butler, a successful real estate investor and educator. Jake shares his journey from struggling financially to thriving in the real estate market, emphasizing the importance of education and overcoming fear in investing. He discusses his initiative, Rich Kid Camp, aimed at teaching financial literacy to young people. The conversation also covers the transition from teaching to full-time investing, insights into the current real estate market, and the advantages of commercial real estate. Jake provides valuable advice for aspiring investors and highlights the significance of mentorship and community support.
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Investor Fuel Show Transcript:
Jake Butler (00:00)
Definitely fear. Fear is one of the main things of getting started. Fear, one, that you can lose your money, and two, that you don’t know what you’re doing. In my real estate mentorship program, I’ve actually gone on the contract with some of my students because they were scared to submit the contract, even on a really good deal. So one of my students had a deal last week that had over $100,000 in equity and profit, $100,000 in profit, and she was scared to put in the contract. I said, look, put my name on the contract with you.And you know, we’re going to submit this contract. fear and ⁓ fear in two ways. One, can I really do it? And two, I don’t want to lose my money. The little bit of money I have, I don’t want to lose it.
Erika (02:12)
Hey everyone, welcome to the Real Estate Pros podcast. I’m your host, Erika. And today I’m excited to be chatting with Jake Butler. He’s been making serious moves in the investing space. Jake, I’m glad to have you here.Jake Butler (02:27)
Hey, how you doing? I want you to define serious moves.Erika (02:31)
Hey, you’vea lot of experience here. Don’t underestimate yourself. Really, I think our listeners are going to have a lot to take away from your experience. So Jake, I want to dive into your story. Can you share with our listeners who aren’t familiar with your world how you got started in real estate? ⁓ started that bug you could say?
Jake Butler (02:37)
Yeah, people tell me that all the time.What started the real estate bug was being broke. That’s what started the real estate bug. I never, my God, I never forget where, you know how they have payday advance loans? Where I had to go and get a loan every week because I was like short on my bills and I needed my next check. I couldn’t wait for it to pay X, Y, Z bills. And I drove past the place the other day and I’m like, wow, that place is still there. And it got my mind going back to…
you know, when I first started and what real estate can do for you.
Erika (03:36)
Yeah, so, you know, talk a little bit about that, you know, the early part of your journey. you know, where did you start? What was instrumental when it came to your own growth?Jake Butler (03:49)
Instrumental, most important instrumental component, think, would definitely say education because, you know, I have a master’s degree and the things I started learning in real estate, I only needed probably a elementary or middle school education to do some oftransactions, maybe more than that, maybe at minimum high school. But ⁓ it’s just the educational component that is not taught in the system.
I don’t think it’ll ever be taught in the system because I don’t think they want us to know. You know, some of these things, if you can make your full year salary in one transaction in 30, 40 days, employers wouldn’t want you to know how to do that. My employees, I’ve taught them they have access to the information because I want them to grow. But I don’t think that the average company or every CEO wants their employees to know that. Definitely the government doesn’t want
people to know how to do it because the whole system is set up so they can continue to live off of people’s labor.
Erika (04:57)
Yeah, yeah, absolutely. And I know that you really are passionate about this because you started your own program about this for kids. Can you share a little bit about that?Jake Butler (05:57)
Yeah, sure. Once I started doing some various real estate transactions and progressing in that area, I said, man, I wish that I would have known this when I was in high school, though I wish I would have known this when I was in college. And then going back to high school, ninth, tenth, eleventh, twelfth grade, that’s when you have a lot of time to, one, learn, and two, begin to learn about yourself.And three, start putting effort into areas where you think you may be interested. So if you’re into sports, that takes up a lot of time if you’re in high school. But you still have to do your work, your schoolwork. So if you can incorporate financial literacy in some way during that 8th, 9th, 10th, 11th, 12th grade year, you begin to have a whole different outlook as to
how you can make money and then once you start, get out of school, if you don’t go to college, you can still start making money separate ⁓ just by getting a job but still doing investing on the side. Or if you do go to college, you can still start investing while you’re in college. But you don’t have to wait till you get to college to learn how to start investing. So that was the whole premise behind starting Rich Kid Camp.
Erika (07:21)
Yeah, that’s really great. Are there any stories that have come out of having that program now?Jake Butler (07:28)
it depends how many do you want. That’s a podcast by itself. two things I would say on YouTube, if you type in Jake Butler, CBS mentor, which the news station CBS, CBS, cat boy, Sam are the most people are familiar with CBS and NBC. But if you put in Jake Butler, CBS ⁓ mentor, you’ll see a whole story that they did.Erika (07:32)
youJake Butler (07:53)
But as far as personal stories, just last week I had two students call me from seven years ago. They said, hey, Mr. Butler, how you doing? ⁓ I wish I still had them notes from high school. I wish I had those notes right now. I said, really? So those principals kids don’t implement right away what they do on the assignments that we give them. But once they get out into the real world, that’s when they really start paying attention. And ⁓some of those kids from five, six years ago, and now looking at buying a house, now have money to start investing, and now thinking about rich kid camp. So the kids that are on rich kid camp that are supervised by their parents while they’re on it, they actually end up doing the best because they have conversations within their household. Some kids that don’t have parents with that type of IQ or that type of commitment to their child financially,
financial literacy commitment wise, then they may not have start having those conversations until a little bit later in life. But those conversations are being had and kids are now implementing buying their first share of stock, buying their first property, buying their first rental property, starting their own business. And that all came about because of what they learned in Rich Kid Camp. So I’m excited about that.
Erika (09:15)
That’s wonderful and I know you’ve helped a lot of people when it comes to investing. What would you say are some of the biggest misconceptions that people have when they’re just getting started?Jake Butler (09:29)
fear. Fear is one of the main things of getting started. Fear, one, that you can lose your money, and two, that you don’t know what you’re doing. In my real estate mentorship program, I’ve actually gone on the contract with some of my students because they were scared to submit the contract, even on a really good deal. So one of my students had a deal last week that had over $100,000 in equity and profit, $100,000 in profit, and she was scared to put in the contract. I said, look, put my name on the contract with you.And you know, we’re going to submit this contract.
and ⁓ fear in two ways. One, can I really do it? And two, I don’t want to lose my money. The little bit of money I have, I don’t want to lose
So those are the two things that are really the fear component of people that when they want to start investing and they’re scared to start investing.
Erika (10:54)
Yeah, did you find yourself struggling with that too when you were getting started early on?Jake Butler (11:02)
Did but I kind of really didn’t have a choice because because of my sickle cell anemia My my class was very very stressful and stress Releases a hormone that causes your red blood cells to separate to break apart average person wouldn’t know because they don’t have sickle cell but So I would leave class on Fridays from teaching at the school all day Go check into the hospital stay at the hospital all weekend get out late Sundaycome home and be back teaching on Monday. And this went on for like an entire year and my class was stressful. So going to work every day was actually very, very painful. So I said, I’ve got to get out of this job. What other job can I do? Where else can I go? Cause I can’t keep going to the hospital every week in and coming back to teach on Monday. That’s just like, there’s no type of longevity in that. So I was fortunate enough to transfer to a private school.
Actually begin to teach kids that actually wanted to learn so that changed things tremendously But I still had those hospital visits maybe not quite as frequently But I still had those plus there was a local clinic a simple cell clinic I could go to for treatment So that whole thing where no matter if I was scared or whatever Being scared or spending a weekend in the hospital every week I think you probably rolled a dice and take your chances like if this doesn’t work. I’ll try it again. I’ll try it again. I’ll try it again
And that determination combined with going to the local investment club in my area, listening to ⁓ every month, and that’s the thing, it was only once a month where that’s why I made my program every week, because you have to be tied in to people that are trying to do what you wanna do. That determination and hearing those stories, even though they were only once a month.
How people made you know X amount of money with very little invested sometimes with no money invested Once I learned that that was actually a true thing that could really be accomplished where when you hear testimonials and One county and you go to an investment club in another county and people are saying the same thing All these people are not telling us a fib. They’re not telling the story So something must be true about this concept about making money with no money
It’s not really true that you make money with no money. There’s money involved, but it doesn’t have to be your money. That’s the disclaimer that, I made money with no money. I made, like, I made my first one, my first deal was 23,000 with only a thousand dollars invested. And that 1,000 was refundable. And I actually borrowed that 1,000 from a friend of mine that had sickle cell, always, you know, talking about how great her credit was and how she had all these credit cards with 0 % interest.
So when I needed a down payment and I didn’t have it, then I went to her, she lent it to me, I gave her back the money with interest. But had I not kept hearing that concept over and over, you can make money with no money. And then actually reading the contract, sitting down with an attorney saying, is this really true? Can you explain this? Like what are the loopholes? Could I lose my money? Could I lose my investors money? ⁓ Once I became comfortable with that, then…
you know, this guy was the limit from there as far as that particular type of it.
Erika (14:28)
Yeah, yeah. And you know, it takes a lot of grit and determination for the situation that you were in and your health problems to keep going. You know what? Can you kind of break it down and that like, how did you make the leap from being a teacher to doing investing full time? Was was it like a gradual process or was there a point where you just took a big leap of faith?Jake Butler (14:55)
Well, first, I wasn’t comfortable quitting my job unless I had a full year’s salary in the bank.was the first thing. ⁓ And then the second thing, because of my health, I wasn’t comfortable with quitting my job unless I had my health insurance lined up where I knew how that was going to work because I knew that I would have sickle cell anemia for my entire life or at least until I got cured. So I knew once I quit my job, sickle cell was still going to be a part.
you know, my life. So I wanted to have enough money ⁓ lined up for one year so I wouldn’t have to, you know, I could really focus on my investing. And two, I wanted to make sure I knew that my health insurance was covered. So ⁓ once I was able to line up the 100,000, I had already arranged everything, you know, setting up a corporation, knowing what I needed from a paperwork standpoint to get health insurance, once I no longer had…
health insurance from the school. And at that point, you know, it was just a matter of if you have one year salary in the bank and you have your health insurance, the only thing you could do was fail. I was buying a house at the time, a condo, my first condo. And I purposely I purposely got a broader property less than what I qualified for because I knew I said if all else fails, I can get a job at the grocery store and bag groceries.
and make $500 a month and that will be enough to cover my mortgage. So, you know, that was my backup plan. I knew that I may not be able to teach at the same school, but I knew I could go back and teach if I wanted to. So those are the parameters I set in place before, you know, I would just jump out and quit my job.
Erika (17:21)
That was a really responsible approach and you really went for it and look where you are today, Jake. Can you share with our listeners what’s your main focus these days? What markets are you excited about? What should investors be aware of?Jake Butler (17:43)
They should be aware of the pitfalls or whatever, you know, whatever market or sector they get into. You should definitely be aware of the pitfalls. You know, even though, you know, real estate is great. This podcast is about real estate, but insurance is a very important thing. ⁓ I’ve had tenants lie and try to, you know, try to sue me to get money from the insurance company. So you have to be prepared for the pitfalls. ⁓ You know, people just talk about the upsides, but they don’t a lot of times talk about what could happen.from a negative standpoint, or what if it doesn’t work out? What is my backup plan? Or what if this deal was not successful? So ⁓ that’s some of the things that they need to be aware of. And then as far as what I’m looking forward to is just opportunity. There’s so much opportunity out here. It’s just a matter of what you want to do, because you really can live any type of life that you want to. So it’s just a matter of what you want to do, writing it down.
and committing to it on paper and being able to see it. Because if you can’t see it, then it’s kind of difficult to achieve it. Not that you can’t achieve it, but it’s kind of difficult to achieve it if you can’t see yourself doing that.
Erika (18:53)
Jake, what do you see going on in the Florida market that excites you and is in alignment with your own goals?Jake Butler (19:01)
In the Florida market, there’s a huge ⁓ conversation about affordability. Because I used to be a school teacher, I’m always paying attention to the news on school teachers. And they’re saying that over 90 % of teachers that enter the profession look to leave after one year. Because unfortunately here, the salary is…The starting salary for teachers here is between 50 to $52,000. Teachers have taught here for a year, have left, and have made three times the salary somewhere else, at another county and another state. So I know that that has to change as far as ⁓ the amount they pay teachers. So that conversation has been really prevalent. recently I’ve initiated a launch to attempt to get teachers into my mentoring program because I know I can help them. It’s just that…
you have to try to get people’s attention now in believability online, which is sometimes difficult where before, you know, doing before COVID, I would have live seminars, which was, you know, great. I can meet a large amount of people. So I’ve just started doing that. But as far as looking for deals, it’s not really worth the time as far as the commitment that I make to my students versus what I could make, you know, focusing even more so on my real estate opportunities. But I just feel the obligation.
Not even really an obligation, it’s a desire I would say to help other people in that same position with the knowledge that I
Erika (20:33)
Yeah, that’s great that you want to help so many people. Jake, if you were to get started in investing today from scratch, what would you do?Jake Butler (20:44)
It’s funny because the other day I was telling my sister I said if somebody dropped off if somebody dropped you off in the state and gave you $100 and you had a cell phone in a car and that’s all you had you didn’t know anybody What would you do? I asked my sister that question So she gave me her answer and I said and then she asked me what I would do and I said well the first thing I probably would do based on the skill set that I haveIs I probably would get a list of properties and foreclosures will start knocking on people’s doors I would try to find as many people as I could with a real estate problem I will find as many people that could with a real estate problem, but The information that’s public information like there’s foreclosure information everywhere. There’s divorce information everywhere There’s probate information everywhere because it’s public information. It has to be listed So if you can access that information and then you know what to do with it
People that have a problem in life try to find an answer to that problem. So that’s why people become attorneys. That’s why they become doctors. So if you could find people with a problem and you have the skill set to fix that problem or a portion of that problem, you can make money rather quickly. So I would, ⁓ but if I started over, I would start with commercial real estate. wouldn’t fool with residents.
Erika (22:06)
Yeah, and that’s kind of where you’re going towards more now today, right?Jake Butler (22:11)
Yeah, because I mean the same amount of time you can make two or three times the same amount of money So when I even though I started with residential wholesaling Then buying properties fixing them up and reselling them and then commercial and then tax deeds tax certificates buying at auction The the once I got introduced to commercial The clause in the commercial contract was the exact same clause that’s in the residential contract as far as assignabilityas far as transferring your contract to someone else. So I was very comfortable very quickly in that whole component. The difference was I had to learn how to analyze the commercial property, which in residential, you know, what did the house sell for two streets over? What did the house sell for in the same street? You look at comparables. Commercial doesn’t work that way. So that was the biggest transition. But I would have started with that and I would have started meeting people and showing them how I could make money with their money.
and just organizing as much other people’s money as I possibly could when I would find a good transaction. So if I started with that, I probably will be interviewing with you from my jet right now.
Erika (23:25)
I see. And getting into commercial real estate, what do you think is the biggest challenge there?Jake Butler (23:32)
Other numbers are a lot bigger. So like I tell some of my students, if you’re uncomfortable with evaluating a two, three million dollar property, wanting, how am I going to get this money? Then I have them start, you know, obviously with residential, because if you’re not comfortable with it or you feel, you know, uncomfortable with the information, then you’re not going to do anything. And if you have ambition to start in real estate or grow in real estate, if you want to be financially independent, meaning thatYou know, if I came to visit you tomorrow, if I had to go into the hospital, I still have income coming in. But you’re going to have to eventually get to commercial real estate. ⁓ If you want to be, you can be financially independent from residential, but you have to work to do the next deal. If you wholesale a deal, you don’t make money again until you wholesale the next deal. So you have to build a portfolio that pays you every month, regardless of what happens in your life.
That does not have to be all through rental properties. There are other assets that can pay you every month, such as a mortgage. A mortgage can pay you every month. ⁓ Owning enough stock in a REIT, a real estate investment trust, can pay you every month. So you don’t have to own commercial property to be financially independent. There are a lot of ways you could do it. But if you have an interest in real estate, then if you want to be financially independent from real estate, residential, you have to get enough residential properties.
which that will be a lot of single family homes. That’s a lot of roofs, a lot of toilets when you can just have 10 units under the same roof. That’s a lot less problems than if you got 10 different properties, 10 different tax bills, 10 different roofs, 10 different air conditions. So ⁓ that would be my takeaway if I could have started earlier. I would have started with the larger assets, 50 to 200 units.
Erika (25:28)
Yeah, it’s really interesting because on the one hand when people talk about commercial real estate it might sound like big and intimidating but then with what you’re talking about there are certain things that are a lot more simplified by making that choice.Jake Butler (25:43)
Mm-hmm. Mm-hmm. Yeah, you’re not like I how I learned commercial real estate I paid $3,000 and went to a weekend seminar That debt is not going to be taught in the school system But nowadays you don’t even have to go to college unless you want to unless you’re gonna be a doctoral lawyer So there’s so many their trades you can learn their trades where you can learn Coming out being getting an elevator maintenance certification is more than you did you get?As a four-year degree in many many many professions many professions, so You don’t even have to do that anymore, but you do need to learn how to invest because I was listening to Steve Harvard the other day and He said You can’t work that many jobs in order to make the amount of money that you want in life So a job is just over broke J. O. B. You have to learn how to invest because no job I’m not gonna say no job, but most most jobs
Won’t pay you enough to make what you want to make and retire most won’t so and even when you retire You no longer have a paycheck. So they say you need about a million five now to retire So even if you make a hundred thousand dollars a year and you live off of fifty thousand How long would it take for you to put together a million five that would take? What about 20 years little over 20 years to put together a million five so and in that 20 years ⁓
Something would likely happen. You probably would get sick, you know, a couple times. God forbid no car accident, no, you know, death in the family. But something would probably happen. 20 years of life, something would probably happen. So that full million, and that’s just 20 years to get to a million. ⁓
You’re going to have to learn how to invest because even if you make a hundred thousand or 150,000 or even 200,000, you would have to work for 15 years and nothing happened in your life. And you save every dollar of half your money, every paycheck. So you have to learn how to invest.
Erika (27:52)
Yeah, absolutely.you have taught our audience a lot today. This has been great, Jake. If someone listening today wants to reach out, connect, maybe they need some help or looking for some advice or maybe they want to collaborate on a deal. What’s the best way for them to reach you?
Jake Butler (28:14)
sure, they can go to jakebutler.info. That’s my, that’s where a lot of people go. I co-authored a book with Kevin Harrington from Shark Tank. You can go there and get a free copy and you can start there or you can always call our office by going to butlercapital.info.Erika (28:34)
This has been a great Jake. I appreciate your time, your story coming on the show today and sharing all your expertise. We need more people in this space who are helping people and lifting them up and getting people excited about investing.Jake Butler (28:50)
Yeah, I’m happy to do it. If real estate is a good option, it’s not the only option, but it’s a good option. And if I can ever help you, just let me know.Erika (29:00)
Thanks again for being here, Jake. And for our listeners today, if you got value from this episode, make sure that you’re subscribed to the Real Estate Pros podcast. We’ve got more conversations lined up with experts like Jake who are out there building fantastic real estate businesses. We’ll see you on the next episode.
