140. Taking Immediate Action and Overacheiving Your Goals with Henry Washington

Hey, welcome back to the Average Joe Finances podcast. I'm your host, Mike Cavaggioni, and today's guest is Henry Washington. Super excited Henry to have this conversation with you today. Thank you so much for joining me on the show.

Hey, thanks for having me, man. I appreciate it. I love doing this stuff.

Yeah, absolutely. I know you love doing this stuff and that's why, I hear you on another podcast and I was so excited that I'm getting you to come on mine because when you talk with passion you really love what you do, and I wanna share that with my audience, who they can experience who Henry is. Speaking of who Henry is, if you could share a little bit about yourself share with the listeners, who is Henry Washington?

Yeah man. Fairly new to investing, I guess in the grand scheme of time. So I've only been investing for about five years. Bought my first house five years ago after I had a panic attack cause I didn't have any money and I had a new wife who needed me to have money. And that was scary and started to realize that. Even though I had a good job and I did all the things society tells you to do, that I still wasn't in a good place financially. It's those things. Like we know that in the back of our mind, but like in my head I was like, Oh, at some point I'll figure it out, and I guess I wasn't totally wrong, but , had a panic attack cause tried to buy a house with my wife and I, be on the loan cause my credit sucked. And then I started to realize that's just one of the things that like I as a provider wanted to be able to provide shelter. She, we talked about dream homes. I couldn't afford to dream home, couldn't be on the loan for the home we were in, kids, I couldn't even imagine having enough money to support another person that was barely. Trying to support my new wife. And so I knew I had to make some sort of financial change. And so I had a panic attack at three in the morning cause I was realizing all these things. And I was like she's gonna leave me at some point and then I'll be stuck. And so in my panic, I started to Google, how can I make some extra money? I was googling I just I tried to google all the money buzzwords, so it was like cash flow. Passive income side hustle, like anything that was like money related, I was like, Tell me how to get to it. And the theme I was seeing across all these random 3:00 AM Google searches was real estate. There was some form of somebody doing something in real estate. And so it just made me think, it made me think a couple of things. One, it made me, it opened my eyes to the fact that real estate was a legitimate path for me up until that point, I just assumed rich people and corporations on real estate. So I just, it never crossed my mind to be a landlord. And then I started to notice they're like just regular people and I was like if all these regular people are building wealth and becoming financially free and. Making all this extra money on the side. I was like I'll figure it out. So that's how I found real estate and I just made a decision to go for it. And I started to immerse myself in anything I could that was real estate related. And it took me about 90 days of research and immersion before I bought my first property. And then I bought that property and it was such. An eye opening experience for me that I realized a couple of things. One, I realized, hey, I did it. I did. I found this thing that's gonna actually make me some extra money. And the other thing I realized was that it was way more powerful than I ever thought because that first property, through leverage, we were able to buy maybe 10 or 12 more just from leveraging a HELOC on that first property. And I was like this is insane. And I remember I wrote down my goals with my wife, that before we got started and we were gonna buy a house, one house every year for the next five years was our goal. And when I bought that first one and got the itch, that's how powerful it was. I was like, Oh man, that's bad goal so we ended up changing it and we bought for, we bought five deals in our first month We went crazy and that's my origin story. I don't do much different now than I did then. I'm still a buy and hold guy. I just acquire as much as I can.

All right. Yeah, Henry. Right on. What a way to get started, that 3:00 AM panic attack, nothing good

00 AM but something good came out of this one, right? . So you're sitting here couldn't sleep that night, just ah, I don't know what to do. I need to figure out a way to make more money. And I think a lot of. People fall into that category, especially, people in my audience as well, right? Like these Average Joe's and Average Chain's, right? They're like, Hey, middle class Americans, and, we wanna figure out a way to either increase our income, increase our cash flow find a way to get out of our nine to five job. If that's what their, what their goal is. And a lot of times people look to. The internet, right? They look to the Google and you're making that search and you start looking at some of those buzzword you can get down so many rabbit holes. Yes. I'm glad you found that consistency of real estate and decided to go that route because man, there's sometimes you can google some stuff and wind up getting caught up in something, so now I'm glad you found Real Estate Henry, because your story is just awesome and I've listened to a couple episodes with you being interviewed on Bigger Pockets. I remember the first time you were interviewed and, you were sharing how you acquired so many doors right off the bat when you first got started. And that's because you set this expectation for yourself that you were able to attack. And I love how, you talk about what that initial goal was. Oh yeah. We're gonna maybe do buy five properties over the next five years or so, and you were like yeah, no, we need to crush that, get that outta the way move on to something bigger. So that's awesome, man. I'd like to touch on something that you mentioned. So you realized when you bought that first property, you were able to leverage the equity in it by getting a HELOC, right? . So what made you initially look at that as an option? Because I feel like a lot of people would buy that first rental property, not think to myself, Oh, let me borrow against it right away to go get more deals. So what, what made you do that?

I didn't Yeah, the bank made me do it, okay. It was all this big realization. I guess the number one lesson is you just have to make a decision. And when you decide to do something, like truly decide, like plan A, there's no plan B, it's gonna work or it's gonna work, and there's no looking back, right? Truly decide with your head and your mind, like how you're gonna figure that plan out will start to reveal it. It's too many times we want to do all the how, we want to get all the how laid out in a row before we take any of the action. And it actually works in the exact opposite fashion. Imperfect action is better than perfect in action. And, done is better than perfect. Those are the two phrases that, that seem to work perfectly with this realm. So because I made that decision, I just started to do. Because I didn't know what else to do other than just give it a shot. So I surrounded myself with a bunch of investors everywhere. There were investors in my town in a room I got in that room, and I just listened and and tried to be, of value in any way that I could because I didn't know how to do it. And so I was like, I just need to be around people who do it and I'll learn something. And then I wanted to learn what was possible. You don't know what's possible, right? When you've never done it. I thought five deals over the five years was a stretch goal, right? Like I didn't know what was possible. You start to learn what's possible by surrounding yourself with people who were doing it. I I've always heard the story about a guy whose first deal was a, over a hundred unit apartment building, and they asked him how did you do that for your first deal? Why was that your very first deal in real estate? And he was like, I didn't know it wasn't supposed to be all my friends own apartment buildings. And so that's just what he did. So if you surround yourself with people doing it that put, that will give you the boundaries, right? Of what you think is possible. That's what frames it. So all that to say, I didn't know about leverage. What I did was when I got that deal under contract, I was just like, I gotta find money. Who has money? Banks have money. Where's a bank? There's a bank right by my office that I work at. So I literally walked into that bank with my contract, pay for contract in hand, and. I would like help buying this piece of property. And they said they looked at it and they were like, Hey, this is a really good deal. And I was like, Yeah, that's awesome. Can you finance it? And long story short, they ended up financing it and it was a real good deal. So after I closed on it, the bank called me and they said, Hey. You've got equity in that property cause it appraised for 160 and it was, you bought it for 115. So we'd like to talk to you about maybe getting a line of credit against that equity and that'll give you access to more money so that you can go bring us more deals to finance like that. And I was like, explain this to me. And so they broke it down and I was like yeah, let's do that. And that's how I learned about HELOC's and that's how I learned about and it was really my stepping stone to learning about small local community banks. Cause that's the bank, the kind of bank I walked into it wasn't some grand strategy to know about community banks. It was just the bank closest to my office. And it just, But what I learned through talking to them was that they were like, Hey man, we have to loan money. That's how we stay in business. We have to loan money to small businesses, and we would much rather loan to someone who's gonna bring us something that has more value than what you're paying for it, than loaning to somebody who's gonna start a restaurant. Right? And we get all this restaurant equipment that's worth less now that they bought it. And I was like I, that makes perfect sense. And yeah, started to learn that strategy. So I didn't know at what they schooled me.

That's great. That's one of the beautiful things that, the fact that you went to a local bank, right? Because they know what's going on there in the community, in the market, right? So they have a better understanding. Like when you found that good deal, they said, Okay he's gonna have some equity, he's got some stuff to play with here. And it wasn't even something you would think about, which is awesome. So there was a lot to take away outta that answer, right? One Check out the small banks around you, right? Because a lot of times people think, Oh, I can't get a loan because they're going out to these bigger, big lenders or these bigger banks and they have tighter restrictions, right? Especially when investing outside of their normal area. But when you go out to one of those local banks that know the market and know the area, they know what they're working with the with the investor that they're working. Now when they talked to you about the whole HELOC thing, what was going, I'm just curious, like what was going through your head when when they brought that to you as an option? You were like, cause for me, I'd be very surprised Oh, the bank's bringing me an option to go buy more real estate. Yeah, please tell me more.

Yeah, no, it was I was all for it. The community bank is, this is what you said, right? It's a community bank. They're, they understand the community. So this person who was my banker didn't, they didn't just feel like my banker. They felt a friend, someone who wanted me to succeed. Obviously part of the team as an employee of the bank, they have a vested interest in my success. They don't want me to fail. They don't want me to lose. He looks bad if I lose. They, and And then it was somebody who's been around lending for years. And I'm not saying believe every lender and everything they tell you right off the bat, use your gut and your best judgment. But and then do your own research too. Like I didn't just say, Okay, I'll take it out. I had to go do my own research. I had this network of investors. That I had been working or building relationships with over the past 90 days. And I was able to go to them and say, Hey, is this a thing? Do you guys do this? And they were like, Yeah absolutely. We do this. And yeah, do your own research and find out. And then even understand a little bit about leverage, right? There's some risks that comes with leverage. If I had to leverage that money and then I went and bought a bad. And I bought a deal that doesn't make money, so it's costing me money for the deal. Plus I still have to pay back the HELOC money, right? That, that, that could be painful, right? And understand yourself if you're just not a person who's good with borrowed money. If you've got lots of credit card debt, cause you can't not go buy that cool pair of shoes or that, for me it's car parts. I'm a car parts guy. So if I cant

Right on,

I can't not go buy those car parts right with that money, like then leverage isn't for you. You're just gonna have to have a different method or maybe a little slower method to building a portfolio. But if you can be disciplined with the money and you're good at finding good deals, you can scale pretty quickly.

I love that. And still unpacking more from that, that that first answer. One of the things that you mentioned was that you started going to these meetups, and meeting other people surrounding yourself with like-minded people. And I wanna point out something that you said, when you talked to that one person that didn't know that buying a hundred unit apartment complex for the first deal is not a qoute unqoute normal thing. It's because they surrounded themselves with those people. I've said this on my show several times, and you hear this on a lot of these different podcasts, but it's a hundred percent true, right? If you surround yourself, let's say you're hanging out with five millionaires, You're gonna be the sixth one, right? You're gonna start taking on those things that they're doing, and it's gonna start becoming second nature to you. So I'd like to talk about that a little bit more too. So you started going to some of these meetups, right? And you started seeing what some of these other folks are doing. What kind of questions were you asking as a new investor to really accelerate the way that you did? Because you did, you scaled super fast. So I'm curious as to what kind of questions did you ask when you went to these meet.

I don't really know what kind of questions I asked. I'll tell you my strategy for going to meetups especially when I was new is naturally people are scared. When you walk into a room full of people you've never met doing a thing you don't know how to do. And people are scared of rejection, right? So they, there's some fear at some point that they're not gonna accept you, and then people are scared of being called out as the guy who doesn't know anything, right? And my whole, I told my whole working career in corporate America, I was like, I'm just waiting for the day that somebody figures out that I have no idea how to do my job. And that's not true, right? But we all have some level of fear like that, right? And you have to know that going in cause you have to fight against it. And most people don't do that. So they don't get the value out of the things that they're trying to do. And so I, my plan to fight against that was to fake it till you make it speak with confidence. Not lie, never lie. If somebody asked me if I ever done a deal, I'd absolutely tell 'em I hadn't done a deal, but I was gonna speak as if I had right. I was gonna speak with conf like I belong there. So you have to make a conscious effort to carry yourself with confidence when you don't feel like you have it. And I've always been a, like even in school, I would sit, you gotta sit in the power seats, right? And I knew wherever we went, if we were, if it was an audience set up in the chair, set up in row, I was gonna be front and center, right front and center. The people who are front and center are the people who want to be there. They're the people trying to get the most out of whatever's happening. They're the people who tend to know the most, right? Because they're sitting in the competence seats. They're sitting in the seats of people who know what the heck they're doing. And so just by you sitting in those seats, people view you differently than the people who walk in and hide in the back

I like that a lot.

They see you, if you walk in and hide in the back, people think a certain thing about you, right? And if people think a certain thing about you, you start to think that thing about you. And so I was just trying to fight against all these things. And so I, whenever I go into new rooms, meetings, I try to sit in the power seats. I don't wanna sit in the back. Because that's great networking too. I'm gonna be sitting next to the people, the movers and the shakers. Like I wanna talk to them. I wanna build, and I want them to see me. And like if somebody was confident. So I would start to notice is people were talking to me, right? And they'd say, we start talking about it, and then you'd just be talking to me as if I've done a deal. Oh, I haven't done a deal yet. You've never done a deal. They assumed I did because of how I carried myself, where I sat. And you're able to have people have confidence in you without ever even opening. Just by doing some of those things. And then the other only thing I could think to do was to try to figure out some way to be of service. And I think, like it's a cliche answer. People say, if you want help, you gotta give help. That's true. But that help doesn't have to be in the thing that you're there for. I didn't know anything about real estate investing. I wasn't gonna walk in the door and be of service to some real estate investor before I knew anything. But I knew a lot about technology and I knew a lot about building software. I knew a lot. Different tools that could be useful for a real estate investor. I knew a lot of connections in the technology world, and I tell people when you're in a room and you're trying to figure out a way to add value, first of all, that should be your goal When you go into a networking meeting, your goal shouldn't be to see who I can meet so I can see what I can get out of it. Your goal should be to see who I can meet so I can find, so I can figure out who I can help. If you walk in there in a mindset of giving, instead of taking, people will remember that and they will naturally want to help you. We naturally want to help those that help us, right? And so change your mindset. Sit in the power seats and look for someone to help. When you open your mind to looking for someone to help, you'll find it. You'll hear someone say something and be like, Oh yeah, I got a contact for that. And then go above and beyond. And when I say that, sometimes if somebody has a need that you can meet, maybe it's outside of that group and it's not gonna take you that long. Maybe it takes you 30 minutes, maybe it takes you an hour, maybe it takes you 15 minutes to do the thing. First of all, do the thing. Don't tell 'em you're gonna do the thing. Just do it and give it to 'em and do it on the spot if you can. Because if somebody has a problem and you come to them and say, Hey, I heard you say X, Y, and Z. Here's a contact that I know does A, B, and C. I just called them, told 'em you might be reaching out to them. Their name is this. They're expecting your call. Mind blown, right? You solved a problem. They didn't even tell you that they had, and you went outta your way and you didn't even know them. So now they will feel like they have to help you. And so as you start your journey, if you have questions, they will be glad to answer them. They will volunteer to answer them. They might volunteer to have you shadow them, all these things. And so many times we try to do the opposite. We try to walk in the door and say, Hey, I'm Henry. I'm new. Can I shadow you? That's creepy. I don't know you. But if you say, Hey, I'm Henry, I heard you say you were struggling with. Your website. I know a great SEO guy. I called him and he said he'd be happy to give you a chat with you and maybe start, giving you some SEO tips. Here's this number. And we're like that's amazing. Thank you. And then they'll volunteer to help you.

Yeah. No, Henry, I absolutely love that. If you sit here and you go to these meetups like you said, get in those power seats, but go with their, with the mindset of who can I help here? Or how can I. You know, as you're talking to these people and if they're telling you that they have this issue or that issue and you know somebody that can help them and you get them connected. That's huge. That's one of the things that I love about what I do here with the podcast and when I go to these meetups too is connecting people. Cause that right there is one of the things that such a stronger network for you, right? When you're able to connect the right people together, you don't necessarily have to be the right person. As long as other people in your circle and you can get them connected together, that's a power play right there. It really is. Absolutely love that. Now, I know over time that you've, you were working in your nine to five and you were doing real estate as a side hustle, and as you were networking and getting more involved in this I know that later on you were like, I want to. Get outta my nine to five. I want to replace my income completely. So you went from being an employee to a full-time entrepreneur. So I wanna talk about that a little bit. And I know that this networking piece was a huge part of that, but what was some other things that, when you made that decision to step away from that nine to five, what were some other things or other actions that you took to make that happen?

Yeah I didn't quit my job until I absolutely had to where it, until it made no financial sense for me to still have my job. So I could have quit a couple of years before I did, but I probably would've had to alter my lifestyle a little bit and I didn't wanna do that. I also wanted to make sure that I had at least two years of income from my business. So two years of positive income coming from my business before I quit. Because when you quit your day job, the first thing that the banks are gonna be concerned about is you don't have your day job. But if you can show that you've been operating a business for at least two years, that is, showing a profit, then you can use that to stay bankable. And so obviously with my strategy of leveraging small local banks, being bankable is a big part of that. So that's part of the reason why I stayed. My decision to leave came because basically my job said, We need you to do more work. And they did, they needed me to pick up my pace a little bit, and they needed, it was just, we were in a time that they needed help and my natural inclination is to say, Yeah, I want to do that. Of course I wanna help you. I wanna do what's needed. But when you have a business or a side business that's also making money, you have to look at it from a financial perspective. And so it was really my wife who was like, Hey, you may want to do the math before you make that decision and see if it's really the right decision. Is it gonna cost you money to give them more time? And I was like, It may. So I really just, it was a math decision for me. It was. Take what you're making in your coaching and teaching business and in your real estate business and whittle that down to an hourly wage, right? And then whittle your salary job down to an hourly wage, and then see what it's gonna cost you to work for them for those hours versus working for yourself. The numbers were drastically different, and I said that doesn't make any sense at all, so I can do that. And when I looked at it that way, it was really. It was less personal. It wasn't a personal decision. It was a financial decision and I had a responsibility to do the thing that was gonna benefit my family the most. And that meant focusing more on my business instead of working for somebody else.

Yeah. Henry I love that is huge because, you had to take the, Your personal feelings out of it, right? You had to separate that and say, Okay, we need to look at this from a financial mathematical equation perspective. Not how I personally feel about it, cause personally, yes, I wanna help this company and help them grow. But I also wanna help my own business grow. So it's like, What's yours is yours and what's that? Other companies that other companies. Guess what? I'm pretty sure after you left they replaced you.

They were just fine.

Yeah, exactly. I said the same thing too. When I retired from the Navy recently, I said, You know what? I said at this point where I hit 20 years of service, I said, I'm working for half my pay. It's not logistically or financial or fiscally really. Great for me to stay and I've got my other side businesses going on. I wanna start focusing more on that full time. And I did something very similar. I just did the math and said, Okay, if I stay in the Navy and I'm putting this much time into this versus what I could be doing here with my business. It was a no-brainer.

Of course.

Absolutely man. Absolutely love that. As you made this transition and you went full time into your business, I like the way that you did that. So you said that you wanted to make sure that you had that two years of positive income from the business before you did that, cause I, and I wanna point this out to the people that are listening. If you start your own business When you lose that W-2 income the banks will not look. Too favorable on that because they're gonna look at your business and then, especially if you're claiming a lot of business losses on your taxes.

That's right.

They're gonna look at whatever that positive cash flow was. That's great that you had all this real estate and you claimed all this loss and you were at negative hundred thousand dollars for the year. You had no income. That's the way they look at it. You had no income. Now I like that you pointed that out cause I think that's an important piece that people need to understand that yes the other side of real estate's great, those tax savings that you get, but you still wanna make sure that you're quote unquote, making enough money to still be lendable, to still be able to go out and get these loans to, to purchase more real estate. Unless you've gone past that at that point, and you're buying stuff with cash, then hey, good for you. That's awesome. But a lot of times I know for Henry, I know for you.

Or your pace and you're just subject to everything, right?

Yeah. I like to leverage debt. I I'm a fan of Velocity Banking. It's one of the things I do myself. I think it's just a great way to borrow against a smaller interest. Invest into something that makes double or more than what that interest rate is that I'm paying.

There is not one single wealthy person that doesn't use leverage to build wealth. Even Dave Ramsey.

Ooh, shots fired . No, that that's very true. It's very true. Debt is just another tool if you, if used correctly. And I've talked about this on this show a lot too, cause it there's a lot of people that listen to this podcast that are at the point where they're, they're trying to get out of debt so they could start. Getting into investing, right? They're trying to get outta that consumer debt. They have a lot of credit card debt and things like that. And yes, you wanna get rid of those things. If it's debt that you're getting into that's not bringing you income, then that's something you wanna consider like moving away from. still use credit cards, I use the heck outta credit cards.

That's amazing.

Get all my points and everything, and I pay them off before interest hits. It's one of the beautiful things about being able to leverage your debt. But I saw you shaking your head a little bit. So I wanna know what that was. When I was talking about some of the credit cards. So what was your thoughts on that?

Yeah. My theory about paying off debt before you invest is obviously if you have high interest, That should be a focus of yours that money is costing you money that you could be using to abrest. But if you've got low interest debt and high and low are relative terms. So for me, high interest is gonna be above 10%, right? If it's below 10%, I can get, I know I'm getting above 10% cash on cash returns on my real estate. So it makes more sense for me to take the money that I would use to pay off that debt that's under, under 10%, invest it and let my investment pay off my debt. If it's over what I would average on a cash, on cash return, then I should then I would focus on paying it off because it doesn't make sense to take that money and invest it probably to take, makes more financial sense to pay off that high interest debt. I think, don't get me you can do both. As I guess what my answer is because I think people use, I'm paying off debt as a crutch to not get started investing.

Ooh that's, yeah, that's a very fair point.

Cause they're scared and so what I'm saying is just be smart. I had somebody tell me, I can't wait. I'm almost gonna pay off my student loans. And I was like, How much you got to go? 20 grand left. Oh, that's cool. So you're going, And they were about to get a payout and I'm take that 20 and pay off my student loans. I'm like, what's your interest on your student loans? That was like 3%. The heck are you gonna pay off 3%? Who cares? Go invest that 20 grand in something that's gonna make you 13%. Take 3% of that and pay your student loans and keep the other 10. That's just be smart about the debt that you're paying off. You can do both. If you focus on paying off all your debt and you pay thousands and thousands of dollars of debt and it takes you 10 years to do it, in 10 years, you'll just be, and it, and if you live in a shoebox while you're doing it in 10 years, you'll just be debt free in a shoebox. Start to be smart about the debt you're paying off, pay off the high interest stuff and invest in but it takes more discipline. And I think that's where people get scared away. Because now I have to be smart about an investment and then take the difference of the cash on cash return, and then use that money to go pay off my, like it's a little more complicated. It's a little. It's not easy, it's not an easy button.

You gotta be disciplined to do that, right? It's like you had mentioned earlier it's that mindset, right? You have to have that mindset shift and you gotta look at money from a different perspective, right? You need to employ those dollars, not just make those dollars, right? Make your, have your money, make you more money, and then with that more money that it makes pay. The the other items, right? So usually every time there is a promotion where I can get 0% interest on a credit card, I'm usually swiping that sucker. And then, paying it off over time until I pay it off before the interest kicks in. But at the same time, it's kinda man, I'm taking advantage of this quote, unquote free money that's being given to me.

Yeah, that's exactly how I paid my own first direct mail marketing campaign.

Then you take your profits from that direct mail and you're able to pay off that credit card interest free. So you basically took free money. It was like here's a free loan for you to go do what you gotta do. And then boom. So yeah. I love that. Okay. Awesome. Now I just wanna hit one more thing before I transition this into the final round. And so there was something that you said earlier when you were talking about with these banks, they said, Hey, this guy can come in here. Henry can find us great deals. We know that we wanna lend to him. So speaking of finding great deals, what would you recommend to somebody that wants to learn how to find great deals?

Yeah You gotta find, we don't buy in this real estate investment world, right? Our goal is to buy something for less than its market value, add value to it in some way, shape, or form. So typically that's fixing it up, but it depends on the asset. It doesn't have to always be fixing it up, but add value to it, right? And then disposition it. So you're either gonna sell it at its market value, or you're going to rent it at its market value and create the cash flow, right? Whether that's short term rentals, long term rentals, midterm rentals, flipping it, whole tail wholesale, it's all the same strategy. Buy it low, add the value, sell it with the value in it. So typically, in the real estate world. No one's just like randomly volunteering to take a loss seller property to give up money, right? So if people are doing it, that means there's a reason they're doing it. That means there's some situation that they're in that requires them to sell this asset at a discount in order to solve some sort of problem. Maybe the problem is the property itself. Maybe the problem is they need the money from the property to go fix the problem. So we are not in the business of buying houses. We are in the business of buying situations. And so if you're gonna be a deal finder, you gotta be a situation finder, right? You gotta learn how to market for situations. Maybe that situation is a ton of distress on the property. Maybe that situation is they inherited a property, they don't know what to do with, maybe that situation is their tenants don't pay rent. And they can't kick them out. I've bought multiple properties from people who have tenants in there who aren't paying, and they were friends or family or some sort of personal connection that they did not want to evict them. So they just sold it within minute so that I, so I have to come back and fix that problem, right? There's a bunch of different ways to market for situations. You can literally Google how to market for off market deals, and essentially all you're gonna find is figure out a situation that you like to look for. Look for it relentlessly, consistent. Don't stop, keep looking. It will bear fruit. Then you buy those properties.

Absolutely love that. So you need to get in the business of being a problem solver, right?

Yep.

And that's, yeah that's huge. I've heard this many times from some very successful real estate investors. Even Brandon Turner said that recently on my show, which was awesome. It, you get, I think what he said was you get paid commensurate to the level of problems that you solve, right?

That's right.

So absolutely. Awesome. I love that. And I wrote, I, one of the things I wrote down here is buy situations, not properties.

That's right.

That might be the name of this episode. I don't know.

Yeah. , Average Joe Finances: No, Henry. That's awesome, man. I really love this. This has been like such. informative interview already. And now I wanna transition this into something called the final Round. And this is gonna give our listeners an idea of how Henry Washington is when he's under some type of pressure or dealing with a problem, which which I'm pretty sure I'm confident that you're gonna give us some great key nuggets here. Awesome.

All right. You ready to go?

Let's do it.

Let's do it. All right. So the first question is, what's the biggest mistake you've ever made in real estate?

Biggest mistake I ever made was it was a two part problem, same property. Not understanding the quality of tenant that I wanted to keep and being so excited about the numbers, cause this is a numbers business, right? They say don't get too excited about, the look and the feel and don't get your emotions in it when you go look at it. I didn't have that problem. My problem was I saw the numbers and was like, yeah, this is the deal. This, look at that cash flow. I'm buying this no matter what. And because I got so pumped up about the numbers looking so great, I overlooked the quality of tenant that I would have long term, and I overlooked some of the due diligence. I didn't get into every single unit in this property and investigate every unit with a fine tooth comb. Like I would've investigated it if it was just a one unit, single family home. And so we ended up spending a whole lot more on the rehab and a whole lot more. It was still a great cashflow deal, but even once I got the units fixed up and rented out, I was just having problem after problem with the tenants. And when you buy a property that's got a, C class or below tenant, it takes a special kind of property management. Sometimes you can't manage those properties the same way that you manage A, B, or a C plus property. And there's not a lot of good managers that want to manage those things, and I care about people. I think that's part of who I am. And I couldn't find a manager who would manage the people the way I wanted them to be managed. And this was the kind of property and the kind of place where if I had to put them out, there probably wasn't any place else for them to go. And I just didn't want to be in the business of making people homeless even though it's not my fault, right? Like their situation is their situation. If they can't pay rent, they can't pay rent. That's what most landlords think and feel. That's fine. I'm cool with people thinking that, but I still feel, I don't feel great Having to be in that situation. And so I didn't think through any of those things before I bought the property, so we ended up selling.

That's always a tough situation to be in. And it's, it actually brings, it's given me PTSD, flashbacks to my actual first duplex that I bought where I had that same kind of issue. I bought it site unseen. I was out here in Hawaii. The property was all the way back on the East coast in Virginia and did everything via video and pictures and said, Okay, yeah, this is good. The numbers look great. Let's do it.

I'm not saying these people don't deserve a good place to live. I'm not saying they don't deserve service. What I am saying is if you're going to buy those types of properties, your business needs to be built different. It needs to be built different. It needs to be staff different. It's a niche almost, and you need to be set up so that you can properly service that niche,

Right? You have to have the right team in place.

So they can be treated well and fairly. I wasn't set up for that and I was doing them a disservice because of it.

Yep. Nope, same here. Yeah, that's fantastic. Now great points, right? You have to have that right team in place, so I absolutely. Love that answer. Thank you so much. All right, Henry, so this next question kind of ties into that one as well. But what is something that you've learned that you wish you knew when you first started?

It takes money to buy real estate. It just doesn't have to be yours.

Ooh, I like that. I like that.

I think part of the apprehension for me It took me 90 days to get my first deal. But what a lot of people don't know is I almost stopped. Through there and just didn't do it because I couldn't figure out this money piece. And that's the piece that most people get hung up on when they're, when they want to get started. They're like, I want to do it, I want to do it. I want to do it. I have no idea how I can buy all these properties. And so they get scared and they, because they don't wanna get themselves in a situation where they feel like they don't have the money to go do something. It's embarrassing, Right? Nobody wants to be in that boat. And what I had to realize was that there's a million, there's a million ways to buy property, and several of them don't require you to have to use your money. And if I stop, once I stopped focusing on not having the money and just started focusing on find the deal, then I didn't, like none of the money thing was a problem. The deal is, what's the hard part? The deal is what's important and there's so many people out there who want to do what you do. But they don't wanna find the deal. Cause it's hard work. And so when you bring that deal, the money tends to find you.

I love that. Yeah. If you find the deal, they will come.

I would've saved so much time and stress just putting the blinders on or focusing on that one thing.

Yeah. No that's great. I definitely appreciate that. All right. This, again, this question's gonna tie into that as well, and I think this is a good follow on. Do you have any tips or tricks that you would recommend to someone that is just getting started today?

100% exactly ties into this. It is we talked a little bit about it before when we talked about. It didn't matter what your disposition strategy is. We have to buy something under market value, add value to it, and then sell it at market value or rent it at market value. It doesn't matter the strategy rentals long term, short term, whole tail wholesale flip. The common denominator amongst all those strategies that people want to use to make money is you have to find a good deal for that strategy to work. And so when you're new, like a great part about a real estate investing is that it's super flexible and there's 1,000,001 ways to make a million dollars, but that's also super intimidating and scary because where you focus if you're brand new, like it's, and people just get overwhelmed and don't do anything, right? That's, they call it analysis paralysis, but they really ain't even analyzing. They're just scared cuz they don't know what to do. So put the blinders on. Focus on the common denominator. The common denominator amongst every real estate strategy is funding a good deal. So the two things you should be focused on when you're brand new, the only two things you should be focused on when you're brand new are learning what a good deal is in your market. Every market is different. Different strategies work better in different markets. So learn what a good deal is in your market. You can do that just by going to meetups, sitting in those power seats Asking the person next to you to say, Hey, I'm just, it's your trying to learn what? Tell me about your last deal. Did you flip it? Did you rent it? Did you wholesale it? What'd you do on your last deal? How'd you find it? What neighborhood was it in? We love talking about our deals, right? And so somebody will gladly tell you, Oh yeah, I bought XYZ house and we did about 20 grand to it and we sold it for this and we found it this way. And they'll give you all that. But what you're learning then is okay, this investor buys deals in these neighborhoods. They're paying about this for it. They're putting about that into it. They're selling it for this. They're rent it for that, right? That's all metadata that you need to make note of, and you'll start to understand what a good deal looks like in your market. Once you learn what a good deal looks like in your market, pick one deal finding strategy, just one. Some people love direct mail. Some people love cold callers. Some people love cold calling themselves. Some people love text messages. Some people love just buying on the MLS, right? Some markets you can still do that, right? The market's shifting right now. There's a lot more markets. You can buy a good deal on the MLS than before right now, right? Whatever that one strategy is to find your situation that you're going to buy, pick one. Pick the one that fits your personality and your budget the best. Every strategy is gonna cost you money and or time. Pick the one that fits your budget the best cause if you can't fund a deal finding strategy appropriately, just throwing money down the drain or you're wasting time. If you're only gonna send 200 pieces of mail you just wasted whatever it costs you to send 200 pieces of mail, you're not gonna get a deal off 200 pieces of mail unless you get extremely lucky. You gotta send enough volume, so figure out what it costs to fund it appropriately. Make sure it fits your budget. If it doesn't fit your budget, move on to the next strategy until you find the one that you can do month over month without killing yourself. And then find the one that fits your personality. I'm not a a phone sales guy, so I don't cold call. I could say I need to suck it. And learn how to do this and be a beast at cold calling. But it's not in me. That's not my thing, right? And so I could lie to myself and say, I'm gonna make 30 cold calls every day until I start landing deals, and I'll get cursed out after the first two calls, and then I won't make anymore calls, right? So direct mail seemed to fit my personality better. It seemed to be something that I could afford, so that I could bid it. So pick one that fits your personality, that fits your budget And relentlessly pursue it until it bears fruit. Don't change strategies, because you're just starting that ball all over again. Once you get that first deal, take some of that money, bundle it back into your marketing strategy so that you don't have to worry about paying for it outta your pocket anymore. And. Boom. Now you're a real estate investor. Don't stop. Don't ever stop.

I, I love that. Be relentless. That, that is awesome, Henry. What a fantastic answer. It's so many good, great nuggets there. And I knew this was gonna happen. I knew that I was gonna get some good stuff out of these questions. Awesome. Now the final question of the final round, and I will preface this with, besides your. Do you have a favorite business investing or real estate related book or podcast or both?

Yeah. I'm not a big I'm a, like I'm a feelings guy, so like how to books aren't really my thing. But like mindset, feelings, I love that stuff. So I'll give you one of each, cuz not everybody's like that. So if you're a, if you're a feelings guy and you're or gal and you're like, Mindset, living in the moment, like doing the thing you're supposed to be doing. I love The Alchemist. It's my favorite book. Just as far as like living in your passion, doing the thing you're called to do, the universe gets outta your way. It's all true and amazing and inspiring. Love it. So The Alchemist, and then if you want a good, like the best how to book, I should say the best, the one that stuck with me when I got started that really gave me. The real estate investing guardrails was the Millionaire Real Estate Investor by Gary Keller cause it just did a great job of saying. Yes, we all know real estate investing is a thing. Here's actually what you need to go do that. Here's the people you need on your team. Here's and it just helped put the guardrails around what does it really look like for you to go out here and be a real estate investor? Who do you really need involved to help you be successful? It was it was pretty powerful book.

Yeah, no. Awesome. Love that, that, two great recommendations. I've not read The Alchemist yet though, that is on my list, cuz I've heard that one before. I've had the Millionaire Real Estate investor come up on this show a lot as well. So definitely some great recommendations. Now Henry, this. Interview has been awesome. Again, so many great golden nuggets of wisdom here. So I have to ask you probably the most important question of all, because my listeners are sitting here saying, Man, Henry's got me pumped up. I wanna know more about him and what he's doing, and I wanna, get some more of these motivational tips. So where can people find more information about you? Do you have a website, social media, or even podcast or anything that you could share with us that that they can go check out?

Yeah. Best place to find me is on Instagram. I'm @theHenryWashington on Instagram. I give away tons of free information and game on Instagram. You can also check out my website. It's www.henrywashington.com. And I think you can get a free book there on all that small bank financing that we talked about. And then you can check me out. Always check me out on bigger pockets. We're always putting out free content there. Just literally Google Henry Washington, Bigger Pockets and there's tons of videos, check out on the market podcast. That's the new podcast we got going at is super fun. It's out there. Go find me.

Awesome. All right. Hey, I'm gonna make it easy for everybody. We're gonna have Henry's links in the show notes, so you could just click or copy and paste away, or you could just Google them. And I'm gonna, you're gonna find some great information. Henry, again, thank you so much for taking the time to chat with me today. I really appreciate it.

Yeah, man, it's been super fun. Thanks for having me.

Yeah, absolutely. And to my listeners, thank you for joining me and our special guest, Henry Washington on the average Joe Finances podcast. Go leave us a five star review and tell us what you liked about today's episode with Henry. Aloha! From Hawaii and have a great rest of your day.