Real Estate Investing Truth: Joanne Reid on Gurus, Private Money, and Flip Mistakes

Joanne Reid (00:00)
So I feel like people think that one size fits all and they’re chasing, as I like to say, the golden carrot. So I did this mistake. I was like, oh, wow, know, five years to passive income. Amazing. And I can do this before my kids have left home. This is great. But then you slowly realize that actually they’re making money because everyone keeps giving them five, 10, $15,000 to join their groups. That’s how they’ve made the money. And when I’ve gone full cycle, I’ve realized that

So many people behind the scenes struggle and are embarrassed to tell other people.

Dylan Silver (02:05)
Hey folks, welcome back to the show. Today we’re joined by Joanne Reid, entrepreneur, coach and truth teller who’s challenging the traditional guru model and the promises that come with it. She works with individuals who feel stuck despite following all the advice, helping them realize they were never actually the problem. She’s focused on exposing what actually holds people back and giving them a more honest approach to success without the noise, hype or false expectations. Joanne, welcome to the show.

Joanne Reid (02:32)
Thank you for having me.

Dylan Silver (02:33)
Now, I’d like to start off at the top talking about your pathway into real estate investing.

Joanne Reid (02:39)
I’ve always been interested in it. More millionaires are made by real estate than any other business venture in the world. And essentially, it sounds a bit mean to say it, but I don’t want to end up how my parents are. I don’t want to have a mortgage until I’m at pension age and then have to live off a pension and live restricted. So you get your time back because you’re no longer working, but then you’re restricted because you just live off the state pension. I was like, no, no, no, no, no, I don’t want to do that. let’s hustle now. Let’s work smart and not harder.

And so that when I come to the age that my parents are, when they’re just nearly 70 years old, you know, then life really opens up. I’ve got the time freedom and the money freedom and real estate has done that for me. And the word passive, it gets banded around a lot, but you still have more money coming in without having to give a full-time you know job per week for that money and go live your life and enjoy it. That’s what motivated me. I didn’t want to be like others around me.

I wanted more when I got to that age.

Dylan Silver (03:38)
We were talking in the green room. You’ve been in the US for five years. I’m curious, you know, coming from England, is there this, you know, entrepreneurship, you know, get wealthy in real estate investing mentality that you’ll see in a lot of markets in the US?

Joanne Reid (03:56)
Yes, so I actually was in the British military in the army until 2018 and I left because me and my husband couldn’t stay together. We had a young child. So I left and I then really delve into real estate investing in the UK. So I fixed and flipped a house. I did an Airbnb. We had our own house that we were living in and renovating. And then coming over to America, we moved here because of my husband’s work and

my goodness, it’s just a playground. It’s just normalised. There’s so much information out there to go and fight. You have to be careful what you believe and who you believe. there’s just so much. The laws are more relaxed here as well for what you can do and where you can do it. Obviously, the UK fits in Texas. So obviously there’s a lot more space and variations of price points.

for what model you want to do in real estate. So I much prefer doing it in America, I have to admit.

Dylan Silver (04:53)
What’s the biggest mistake that you see people make when they’re evaluating how they get started investing in real estate?

Joanne Reid (05:48)
So I feel like people think that one size fits all and they’re chasing, as I like to say, the golden carrot. So I did this mistake. I was like, oh, wow, know, five years to passive income. Amazing. And I can do this before my kids have left home. This is great. But then you slowly realize that actually they’re making money because everyone keeps giving them five, 10, $15,000 to join their groups. That’s how they’ve made the money. And when I’ve gone full cycle, I’ve realized that

So many people behind the scenes struggle and are embarrassed to tell other people.

And so I’m going to share, you know, with the world, my nightmare, terrible stories. I won’t curse, but they were. So I’ve been through and I’m still going through some of it now of just absolute nightmares and trying to sell things off and go, right, let’s put that to bed. Let’s do better next time. And if I can share my experience rather than being embarrassed about it,

so many more people will come up to the forefront and be like, yeah, this happened to me too. This happened to me also. And this over here, which is not what you did, but this also happened to me. And I think then people can learn from each other and you don’t have to keep sharing $10,000 with other people that you just trust blindly because they said like, you know, hey, here’s how I did this and give me the money and follow me. Yeah, I really have an issue with that when you don’t need to necessarily do that.

especially if it doesn’t fit your model. I’ve seen people that are millionaires already go full in on the same business model where people are like me, where you’re just a normal family on an average salary, just lived a very sort of working class life, try to compete with that. And why are they doing it? Well, because they came in a lot more capital than you did. So yes, they can just buy without having to wait and lenders and all that. So

Dylan Silver (07:41)
Yeah.

Joanne Reid (07:44)
This is what I want to say to people. It’s OK. Not everyone is the same. Much like going through, when you go through school, everyone has different academic levels. Some people are interested in DT, other people are interested in math. Everyone’s different and everyone starts in different place. So let’s just have more open, real conversations about that.

Dylan Silver (08:03)
I also think when folks are getting started, especially if they’re in these rooms where, you know, I think this is kind of a common thing that you’ll see. There may be like a low cost room and then there’s, you know, something that may be a higher tier and then a tier above that and then some type of private coaching. I think a lot of people when they’re just starting out feel like, if they’re not spending money, what value can they get? As someone who started and cut my teeth really,

in the single family space and distress real estate and then wholesale, you can be networking for months, even a year or more before you get an opportunity where it actually transacts. And I don’t think there’s any shame in that, right? Just networking itself has a lot of value.

Joanne Reid (08:47)
Absolutely. I feel like that is the bottom line core of real estate investing is your network. So I will fund fix and flips now and I don’t ever use a lender and you know, as in a company lender, a hard money lender where you need to bring money to the table and there’s points and they look at your credit score. So what I do is I use people. So I’ll say to people, hey, I need $100,000 to purchase this distressed property to then fix it up.

When I’ve done it and the other end, roughly around six months later, it doesn’t always work out. Just, you know, and I’ll be honest, sometimes it’s shorter, sometimes it’s longer. But I have, you know, a penalty behind that. So they get more money. But and then I say, and I’ll give you 10 % back. So your $100,000 is now $110,000. And if we do two a year, well, you’ve just made $20,000, 20%. You can now go on a very nice, luxurious vacation.

and then still end up with your 100,000 back in the bank, or he goes buy a car, or you can help put your kids through college. I’ve done all the heavy lifting. I have grinded to work at my team for doing ⁓ fix and flipping. And actually I do it for 15 hours a way. So most of mine is done over in St. Louis because I started there with another model. It didn’t work out. So I ended up fixing flipping there.

I don’t really want to do it where I am now because I just have worked so hard for my networking, going from the good and the bad with contractors and boots on the ground, photographers and stages and all that. yeah, once you’ve got your network, stick with it. And if it works, just keep doing the same thing and just keep stacking the money. And then when you’ve got enough money, then you can move on to the next thing.

Dylan Silver (11:09)
So do you take out any kind of debt to finance these rehabs?

Joanne Reid (11:14)
Not of my own, not of my own money, no. They even put down the earnest money deposit. And yeah, then they, through closing for a title company, obviously there’s a mortgage note, a promissory note that’s all notarized and recorded. So they have, you know, the house is collateral.

And that, you know, there’s something sound there. They’re not just, hey, Joanne, here’s my money and off you go. Because I get it. It’s nerve wracking to give somebody a lot of your money, especially people that I’ve not even met in person before. And I just think, gosh, wow, what trust. I if I was on the other side, I had to treat them as if I was on the other side in their shoes, you know, how that make me feel, OK, I need to reassure them, here’s photos, here’s where we’re at. This is what’s happening. And I’ve also learned over the last few years that

So many variations with fix and flipping is what time of the year you end up coming to market. September, October, November is disastrous. It is a nightmare. I’ve never sold on my actual listing price compared to if I’d have just listed it in July. It makes such a difference. So things that you learn over the years, you see the seasons and the patterns. So now I’m buying, now I’m actively looking, ready to sell for the summer.

Dylan Silver (12:25)
⁓

Contrast, there’s a lot of people who are, you know, taking out hard money loans. I’ve learned recently about, you know, more traditional rehab loans, which people can take out. But you’re talking about effectively purchasing these properties with cash from investors. So not as leveraged or not leveraged at all as some other folks. Of course, that means that, you know, every dollar is now

maybe even more important than it would be in some other circumstances, because it’s tied to someone else’s actual cash reserves.

Joanne Reid (12:57)
Yes, yeah, and you know, and it weighs heavy on me to be like, right, I need to get them paid back. I need to get this done and sorted. And so I just, some people are like, how do you even do that? Literally, I’ve been in this country for five years and I’ve managed to just build up this network slowly, slowly. I put in a lot of hours, a lot of grind, ping on the telephone, all hours. But now I’ve got there and it should start easing up and slowing, but yeah.

These lenders, they’re just normal people who just want a higher return on their money rather than just sitting in a bank getting two, three, 4 % interest per year. Well, I’m like, well, hey, I can just give you a whole number. We do 100,000 twice in a year. You’ve got 20 grand. Wow. Yeah. And eventually I’ll stack my cash with my profits and then I will start merging in some of mine that I pay.

Dylan Silver (13:43)
Yeah, I’ll sign up for that, right? ⁓

Joanne Reid (13:53)
cash for all by my own money, but I just have to slowly work it up and get enough, you know, my own profits there.

Dylan Silver (14:01)
Now are these flips?

Joanne Reid (14:02)
Yes, they’re fixed and flipped just normal by a distressed house. Sometimes they’re on the market, sometimes off the market from wholesalers, people I know who’ve just had a nightmare of other business models and go, this didn’t work out. I just want to go on. like, I’ll take it. Obviously, if it all fits the criteria. But yeah, they’re all from, I just pick up the houses from all kinds of places.

Dylan Silver (14:25)
How can people avoid losing money on flips?

Joanne Reid (14:29)
Like I already said, you time it out for the right time of year. I found that September through November, the bad time to list it on the market, but I get it. If you’re under a time crunch with a lender, you need to just get it on and just take what you can. I get paid last. So if it ends up that there’s any $5,000 profit for me, whatever. I initially thought there’d be 25,000. I ended up with five. Let’s just move on to the next.

So that’s, yeah, one thing that could go wrong. Another is when you peel back the walls and you realize that, ⁓ the plumbing stack and the wiring and this, I’ve even had it where a house passed occupancy inspection over in St. Louis. And then my contract, and then I purchased the property. My contract was doing work and something was lifted. And so when a building ⁓ permit official guy came round,

He saw that and he went, well, that’s not right. And so my contractor said, well, no, you’ve already passed this as, you know, as past for occupancy. You can’t make us change it now. And he said, well, I’ve seen it now. So, and I couldn’t see it before. So you’re going to have to change it. $8,000 just gone on that out of a profit. It was so frustrating when you think that you’ve got a home run and you know exactly what your numbers are going to be. There’s always things that come out when you just don’t expect it.

Dylan Silver (16:28)
Yeah, I think it’s like you mentioned, once you take down a wall or take up a floor, then you start to see other issues behind the wall underneath the floor that you didn’t know were there before. It might have looked fine on the outside, but now you have a better picture now that you’re looking at things behind the wall. Bonus question for you here, Joanne. ⁓ For folks who are thinking, hey, is real estate right for me? Which area do I get into? This isn’t ever something that’s asked, but.

Are most people actually capable of success in real estate? Or is that a myth that people sell, that everyone can be successful in real estate?

Joanne Reid (17:05)
I find it depends on the person. It depends on your resilience. Is it worth it for you? And also I find that when people think they’re doing, like I said before, they’ve managed to get one real estate model nailed down. So now I’m doing like fix and flipping, I’ve got it nailed down to a T and now go, do you know what? I’m going to buy a thousand door unit and I’m going to do multifamily and I throw any profits are made here into that and it’s a disaster.

I’ve seen people just go, no, I want nothing to do with real estate again. This is a nightmare. If they’d have just stuck to what they knew and what was working, why do you keep trying to go for more? And this is where I like to say with my platform, the investing Wiki is you can hear what other people have done in all in their real estate investing and then go actually, gosh, I was going to join that. And now I’m glad I didn’t. Or you keep getting bugged by somebody on a Facebook ad for

doing section eight and here’s how I made my millions doing section eight. You can too, just give me $10,000 and I’ll show you how. I’ve seen some absolute, I’ve been on the phone with people crying, crying that the disaster they’re in. My husband told me not to do this and now all our savings is gone and you know, I’m upside down on the money and it’s just awful. So I think you have to really research what you’re gonna do.

before you go straight into something just because somebody thinks they’re like selling you the dream doesn’t mean it’s actually going to work out for you. And, and again, it’s what your circumstances are. Are you coming in with a load of inheritance money? Are you just a working person and you want to find a bit more money? And so like one thing I say with that is, I, some people might a bit of a stigma with it. It’s just donating plasma to two adults in a household don’t need any more skills or

⁓ Go to college. You don’t need a second job. You work it around your kids and you can make $12,000 a year between you both and And then you can invest that you can either invest it into stocks or whatever or you can just build it up and then start doing Real estate investing yourself. You can join your local network groups and just go mingle and meet with people You can shadow somebody who’s already doing it

You can go be a gopher for them, but in exchange you can then learn. I’ve seen people do boots on the ground, go and take photos and videos for wholesalers that are remote, but then they’re learning from the wholesaler about what they’re looking for, what’s a good deal, what’s not, but they do the photos for free. And so, yeah, there’s lot of different ways you can do it. Yeah.

Dylan Silver (19:35)
Yeah, bootstrap. There’s a lot of ways

to ⁓ jump in. ⁓ And I think, you you mentioned ways where people can just earn an extra couple dollars to get started in their journey. And, you know, for some folks, like especially if they’re check to check, right, putting a whole bunch of money into a real estate asset might not work out in the short term. Right. But in the long term, real estate hardly ever fails. That said,

you know, if you’re banking on a fix and flip, this is your first flip, right? And things are going wrong. Once you take down that wall, take up that floor, etc. It can certainly be a tough learning lesson. We are coming up on time here though, Joanne, any new projects that you’re working on and then as well, what’s the best way for folks to get in contact?

Joanne Reid (20:23)
So new projects I’m working on is, like I just spoke about doing Plasma. So I’m doing this social media sort of campaign at the moment where for one month, I’m going to donate Plasma, make $500 and record it all to show everyone. And I’m going to then screen record what I’m going to do with that money, just to show that I’m a normal person with no extra job or one hour a week of my time to make this money. And here’s what I would do with it. And then I’m also just

carrying on with my platform, the investing Wiki, where it’s only $365 for one whole year. So a dollar a day to just listen to triage, to see what other people are doing before you jump into a $10,000 course and then realize it’s a whole disaster. And then also I have my book, the unreal estate and it was a Amazon bestselling and it’s all my journey from coming here in America, my

Very normal person. I’m a mom, I’m a wife, I work, I do side hustles. And this is my journey into starting real estate investing here in America and the ups, the downs, the ⁓ gasping. Wow. And leads me to where I am now. I just want to help people do better because I wish I had that help when I started.

Dylan Silver (21:40)
Joanne, thank you so much for joining us today. Thanks for your time.

Joanne Reid (21:43)
Thank you for having me.