Welcome to Cleveland real estate investor. On this podcast, you'll hear about every aspect of the real estate investment business. You will talk to your rockstar investors about their businesses, how they built them, where they came from, and where they're going. Who am I? I'm Joe Lieber and I've made millions of dollars from the real estate investment business over the last 20 years. If you're ready to hear the good and bad from a guy who's learned this business from the school of hard knocks and get educated by some bad ass entrepreneurs, then put your helmet on, strap on your chin strap. Let's ride.
(00:34): Yo, hello. Hello. Welcome to the first episode of Cleveland real estate investor. So I thought I would take this first episode to introduce myself, tell you my story and kinda, you know the reason why I'm doing this and started to launch a podcast. So thanks for tuning in. This podcast is called Cleveland real estate investor. It's all about things in Cleveland for now at least. I mean that could change. We might interview people and things like that. But I wanted to start a podcast because I have a lot of experiences, business. You know I started investing in real estate in 1997 and I've definitely done my time done in many different market cycles and I've learned a lot and I feel like this is an opportunity to kind of give back and educate a little bit. That seems like the natural progression for most experienced people.
(01:23): They learn it, they do it, then they, they end up giving it back. So that's my intention. Obviously everyone has a strategy with a podcast or things like that. And I do too. Maybe you are a wholesaler and you didn't outlive your deals. Well, I'm actively buying houses. Maybe you're trying to get in a business and you need private lending. I lend money. Maybe your private lender wants to lend money. I mean there could be a situation where I might want to take some private money and joint venture on something. There might be multiple situations. Maybe you want to flip a house and learn it needs a buyer. I have turnkey buyers all over the country don't want to buy, invest in real estate. So [inaudible] that's kind of my reason for doing this. Just to get out there a little bit. People know who I am trying to make impact and things like that.
(02:07): So I'm going to take you on a little journey, a little story. So sit back, relax or keep pumping harder on your elliptical. That's what I do. And, and I'll tell you this story about Joe Lieber and who cares? Who really cares, right? So 1996 I'm 17 years old and I'm sitting in my bedroom at my parents' house and if you remember late night TV, there was like Carlton sheets and Russ Whitney, those were the guys man in the 90s there that I remember at least. I remember sitting there watching as a young boy, 10 30 at night Carlton sheets, his infomercial would pop on and he's interviewing people about how they made a fortune in real estate. And there'd be a background of like a Palm tree and the boat and the water. And that's interesting. It was interesting to me, even as a young kid coming out of Cleveland where I got a father who's in the manufacturing business, right?
(03:02): Dirty fracture worker and a mom who's, you know, a secretary at the bank kind of thing. You know, I wanted something different, right? And I'm like, how am I going to do this? You know, the only thing you're really trained at your board of advisors is you're trained to hate this. Finish school, get good grades, get a degree and make something of yourself. But I even knew back then, like, that wasn't gonna work for me. I didn't want to go get my business degree and get a job at the bank. I wanted to figure out a better way. And I even knew back then that was not going to get me rich that was going to get me by. And you know, there's a difference there. So that was my first thing that got me really excited was I would watch those infomercials and I even actually bought Carleton sheets.
(03:42): His course, like a PRI a lot of us did and I didn't really understand it, you know? And yeah, if you have no board of advisors, so to speak, or no one to really bounce things off of, how are you going to put these things into place? Especially as a young man like that. So the next thing that I remember was June 7th, 1997 graduation day from high school and I'm sitting in the, the, you know, the attendance there and we through our captain gown or my buddy looked over at me and said to me, well, what do we do now, man? She's, man, you know, I don't know. I guess I'm going to go on and go to college. That's what my mom and dad would want me to do. And he said, Hey look dude. He's like, I got a job in construction and I'm making really good money.
(04:31): I said, well, what are you doing brother? He goes, I'll start next week and I make $19 and 45 cents an hour. I was like, no way. No, not even possible. 18 years old, 97 $19 45 cents an hour, not happening. And at least I thought, right? So a week later he stopped by after work. Mid June shows me his pay stub. I couldn't believe it. This dude gross, almost 800 bucks for the week. I mean, it was all the money in the world to me. I was like, dude, dude, you've got to get me a job. You've got to get me into this. So he tried and I don't, to this day, I don't know. I didn't get the jobs. I don't know if he couldn't get the job or he just didn't want to give me the job. I don't know, whatever. So I did the next best thing though. Midsummer, when I realized this wasn't happening, I said, Hey man, look, you've got this pay stub and you can probably get financing.
(05:24): Why don't we go out, buy a house, we'll fix it up and we'll flip it and you have the income. So let's maybe try to do this together. You know, a little partnership. So we did, we went out and started house hunting and that fall I started going to Cleveland state university, the local university. And they were handing out anyone who's went to college probably knows, they hand out credit cards like they're candy. I am always trying to get you to sign up for these dang credit cards. And I went and got a student to discover a card because our hand 'em out on campus. And Lloyd and I, it was, we buy this house together on a West side suburb of Cleveland and we go in there and start fixing it up. The reason why I told you the discovery card, his story was because I use my discover card to pay for the material and not having any money.
(06:12): We had to do the work ourselves. So I remember going into home Depot and he had a little more construction experience than I did. I ain't know anything, man. Woo. Just a quick side story. I was so bad that I remember cutting drywall with a circular saw and the neighbor came out going, Whoa boy, I, boy, what the hell are you doing? You don't do that. You're going to cut your hand off. And it was funny with the true story, you know, and I use my discover card bought material from home Depot. I would get those orange books that say home Depot one, two, three. And I would like to read those to try to figure out how to do general carpentry general work because there was no YouTube back then. You know, all the Google didn't even exist and I would just do the best I can.
(06:55): So we, we go and we rehab this house and we get this whole thing done and made a lot of mistakes. We did, Oh, we didn't know what you're doing and we get to the end of it and we can't sell it. We can't sell it. We call it some of the sharpest best real estate brokers in our town and they cannot sell this property. Oh man. Was it tough? One of the brokers though that came, a guy named Tim who I'm forever grateful, I'm forever grateful for Tim because he ended up taking me under his wing. And I ended up working for Tim as a real estate agent for quite a number of years. But Tim came out and he said, gosh man, you're a young guy. You got a lot to learn. Why don't you come work for me at my brokerage as an agent and really learn this business.
(07:41): And then as these investment properties come up, you know, you can kind of do both. But that way it keeps you in the same wheelhouse. Right? See, I didn't want to have a different job that had no relevance to real estate by day and then tried to do invest in real estate at night. That's not good. So like I didn't want to be a plumber by day and then at night try to play investment real estate investor. I figured if I can be all in this business, you know, an agent by day looking at deals in the field and then by night doing my investments. That was cool. And that worked very well for me and Tim brought me on and ended up working for him as a real estate agent for a lot of years. But I'll go into that story a little bit later. So during this process though, I met a guy who came over and at this time we had penned through two brokers and we could not sell the house.
(08:30): We were back to going for sale by the owner. We figured, let's go for sell buyer. Let's get the brokers out of the way, lower the price of the house because we have no real estate commissions and we'll sell it for sale by the owner. So a guy comes over and he was the young guy, you know, we were 19 at this point. He was like 23 years old and he pulls up in a shiny yellow Hummer. Hummer each one, let me tell you something. If you're a car guy like me, and then nineties, Hummer H one was the stuff. It was the cats ass of cars. All right? It's like having a Lamborghini Aventador today or something. So this young dude shows up in this yellow Hummer H one. And he says, Hey, I'm a real estate wholesaler. Well, I don't even know what that is.
(09:11): What does a wholesaler, this is, this doesn't matter. He's, here's what we're going to do, man. He goes, let's make a deal on this house. So we signed a purchase contract with him. It was for an $8,000 loss. My business partner and I were each losing $4,000 on the deal. At that point, we were so burnt out, we were done making mortgage payments on a vacant home. We were like, fine, just whatever, dude. So we sign up this deal at an $8,000 loss and he says, Hey man, just put all your marketing stuff away, your brochures. You know, I have a buyer coming over. I like what? Like it's happening so fast, we don't even know what's going on, you know. So he runs this buyer through the properties. Like, all right guys, Hey, thanks. Meet me at my office and about a half an hour. So we go bebopping in there and once again, be in 19 wet behind the ears, don't even know what's going on.
(09:59): He pulls out another contract and goes, Hey, I need you to sign this contract. This is between you and the buyer. He, cause I'm just in the middle of this deal. And just to give you some numbers. So we signed at $72,000 with him, the wholesaler, and then we signed a contract for $97,000 with this buyer. So he was taking the difference, the spread in the middle. W once again, we're just like, what do we know what's going on? Well, it was happening so quickly. We just didn't, he explained to us, don't get me wrong, but when you don't know any simpler, the first time, we just weren't grasping it. So about a month and a half later, we get a call from the title company, Hey, I need you to come in and sign closing docs. So we do. And we go in there and I'll never forget, I'm not going to say the guy's name because he's still a dear friend and probably not cool to disclose all that.
(10:46): But I see the guy's name, Bob blop blop right on the settlement statement and a net check to him at 21,000, $700. Holy crap. Right? I was like, I can't believe this dude. I'm losing four grand business. Probably isn't four grand. He's making 21 so right. Then my business partner looks at him and goes, I don't like your style. I don't like this. I'll sign these docs, but we're done. And he signed them and he left the closing. I looked up and I said to him, I said, listen sir, we're close in age, whatever. You might not know this, you might not even like it, but we're going to be best friends whether you like it or not. And you know what to this day, it's been over 20 years and I talked to him almost every day. He is not only a dear friend, but a mentor and he's been nothing but a class act and a great guy for over 20 years. And he taught me a lot of stuff in this business and that was really my first experience. First couple years of getting into the real estate business. Then after that, things started to get crazy.
(11:51): Well at this point I want to go become a real estate agent and work at my friend Tim's brokerage. And I was going through that process and trying to learn real estate, really traditional real estate sales and just learn contracts and how a real estate deal floats. It's very important to understand those things. So I did that. I learned a lot. I would always keep my eye on what other people were doing or there was other realtors on my office or it was investors. The thing is when you're selling real estate in your 19, 20, 21 years old, you're a really young man. And you know, it's hard to, yeah, older folks that were buying property, you know, just the natural progression of life. They just, they knew more stuff and they could see a, you know, a young man trying to make his Mark but wet behind the years.
(12:43): And I sold houses. I just wasn't making a bunch of money. So I decided to keep going to the university here, Cleveland state and I would sit in my broker's office and just take floor calls. Again, this is the time before the internet really and floor time was how real estate agents got leads. And I would just sit there and study my books and take floor calls and I made money, you know, nothing really to speak of though. And then one day right around, I want to say it was the summer of 2000 it all changed for me. A friend that I went to high school with, just a normal dude, shows up at my office and a brand new Mercedes Benz and I said, wow man, I haven't seen in a while. How you doing dude? Like what are you doing? You get out brand new Benz, I guess we got to talk.
(13:29): And I found out he had a really nice luxury apartment. I was like, dude, like what are you doing? He was a loan officer. I didn't really even understand what a loan officer was. I'm like, you mean a loan officer at a bank? No, he exclaimed, no, a loan officer at a mortgage company and we charged commissions, basically fees to get people loans. I was blown away, you know, he's living this good. We're the same age. I think I might've been 21 at this time and there was a big deal. So we hung out. He was back in Cleveland, he lived out of state and he was back in Cleveland. So we hung out, went golfing, and it was living good. Like I barely had the money to go golfing and Oh, let's get a little beers and you know this and that and paying for it.
(14:13): And I'm like, man, I'm like, dude, kinda money to make doing this lone thing. He goes, well, last year dude, he goes, I made 120 grand. I'm like, no, no way. Like that's all the money in the world, especially when you're 20 health, a lot of money now. And, and to do that in the late nineties early two thousands I'm like, dude, come on. So it was true. He pulled his W2 out, he showed it to me, and that image is forever burned in my brain. Just so you know. It was one 19 seven 68 I'll never forget it. I saw his W2. I was blown away. So it didn't take much convincing for me to become a loan officer. Well, this is dude, I got to get my hands into this business is crazy. He was gracious, he was awesome, taught me a lot of stuff and I, I went and did that.
(15:00): I did just that. I became a loan officer. Great thing. By the way, just a little side note, you really need to understand finance. If you're gonna be in real estate, it really serves you in all aspects of life. But especially in the real estate business, you need to understand loan to value. C, L, T B debt to income ratio, front end, back end at the income ratio. Need to understand how that stuff works. If you really want to be a successful real estate investor or whatever it is in real estate. So I went and did that for a number of years. I made really good money. I wasn't as good as bill. That's my dude, by the way. I wasn't as good as him, but I did make good money for a 2021 year old kid. It was pretty sweet. So during this time that I was making a living now are real living.
(15:46): It's hard to buy rental property and back then you could be your own realtor and your own loan officer and you could sell yourself houses and finance them yourself and you were constantly up on all the new products and programs the banks were offering because these lender representatives would come into our office and say, Hey, I can do a stated income stated assets, no money down with the six 20 score and you're thinking damn, invest in property purchase. Like I'm going to buy that dude. So I started buying houses like that during this process. It was like free, right? Cause I was getting the commissions if I was buying them off MLS, which I did a lot of and no loan fees and I started acquiring my stack, right? This one a couple of years. And then one day it all changed for me. I had a lender rep come in the office from a company called Argent and for any of you has been around the block for while, you know what I'm talking about?
(16:40): And he said to me, Hey man, we can do five 80 credit score stated income stated assets, a hundred percent loan to value with a 6% seller concession. Now just to break that down for people who don't understand the lingo, it means you have to show any income. No W2 is no pay stubs. They're going to give you a loan up to $400,000 no money out of your pocket and the seller's gonna pay the closing costs. Whoa, right now you know why the mortgage crash of 2007 and eight happened, right? Cause the loans like that. So when that happened though, I said, Holy smokes, I have like 30 Reynolds that I bought. And I quickly realized I can sell these homes to my tenants and they can become homeowners for the same amount of money they're paying in rent. So I quickly started smiling and dialing.
(17:27): And the pitch, the talk was easy. I was like, Hey mr tenant, you've been living in my house for a year and a half. Now you're paying 100 bucks a month in rent. You know, I'm in the loan business, I can actually get you a loan to buy this home and you can own it the same amount of money you're paying her rent. How's that sound to you? Needless to say, it wasn't very hard to get people excited about it. All right? So what started happening is I'm selling to my tenants. I'm making a killing. I'm making, you know, it can be 20 $30,000 a deal on these houses. Thanks for giving money away. Appraisals are coming in high, and it's a great script. People are owning homes for not much more than they're paying her rent. So I started doing this. I'm gonna start getting real darn exciting, real quick.
(18:08): So needless to say, my stint in the loan business was coming to an end. And the reason why I was coming to ask, I had no passion for the business. It was a way to make money. And I can tell you this as I take these different paths in life, and this journey is, if you're not passionate about what you're doing, don't do it. Don't wanna do not do it. You're never gonna make any real money at it anyways. You have to lead with passion first and the money will follow. Now I learned that way back in 2003 so I started doing this and started doing more and more of it. And at that time I figured, you know what, it's time to switch back into the real estate business full time. And I came home one night to be out with all those mortgage guys, you know, I can like maniacs.
(18:48): It was, it felt, it was like the boiler room of the 80s you know, a bunch of young dudes making money driving nice cars. It was just so cool. So I came home from the bar one night and I saw the real estate magazine was just mailed to me cause I was a licensed agent, you know, talking about the different courses available at the real estate school here in this area. And I started seeing the requirements for a broker's license. I was like, Holy cow. I'm like, I think in just a couple years I might be able to get my broker's license. I fit all the requirements and this could be a good opportunity for me. So I started on that path. You know, I took the required courses, I switched back to being an agent full time cause those are some of the requirements. And I was waiting, I was doing my time so to speak, to be able to get a broker's license.
(19:33): I thought, you know, I have no broker's license. Look, give me some great control. I can scale a brokerage that way, maybe have something else going on there and it's time to get out of the loan business. And that's exactly what I did. So 2004 late Oh four happens and I got my broker's license open, my brokerage started with a couple agents and started riding that whole train. Now 2005 2006 as we all know, it's like high times, right? I'm solemnly sanctions. I'm trying to bring agents on board, just really just running a million miles an hour, just putting time everywhere and really given 20% of my effort to every little thing I had going on. Which by the way, it doesn't work. Don't do that. That's an easy takeaway. Focus on one thing. Give it 100% of your effort. Don't spread your time out like that and to five things and given each one 20% because guess what?
(20:20): It's not going to work. They're all going to be 20% and they're gonna suck. So it was doing that though, and I'm trying to make my Mark, I'm in my mid twenties here and we're trying to go. So then 2007 comes March to be exact. March, 2007 Lehman brothers closes at stores. Well, what does that mean? What does that mean? Everything turned off like literally overnight. Well, you couldn't sell houses, right? There is no money to buy him all that. No income state income say to assets, all gone. Companies are going on a business left and right. The media hype is even worse. And I'm thinking, what the hell am I going to do now? 2008 we're in the middle of one of the biggest mortgage crashes that this country has ever seen and no one's making any money, including me. And I dunno what the hell to do.
(21:11): I gotta figure out how to make ends meet. So I started to acquire more rental property. Now it was a challenge to do that because there's no lending out there. And that was really the first time that I heard of private lending. I didn't even know what it was that he didn't realize that people, rich people who have money and people do have money out there, they will lend you money to buy real estate. They love it because it's secured right by real estate. And usually stuff's bought, it discounts because if you're a real estate investor, you should be buying discounted real estate, right? So who wouldn't want to make a loan on that? Everybody apparently did not know that. I know that now. So I started to get introduced to private lenders, right? And when you're in the real estate business, you start digging into the weeds and talking to people who don't know what to do with their money.
(21:56): They don't want in the stock market and people lost fortunes in the stock market and therefore one case and they still need to make a return. So because I was young and didn't know, I was overpaying people, private lenders for money, but it's okay because it worked out and here's what I was doing. Didn't know what I was doing even at the time, but I started buying houses here. You could buy them real cheap. Buy 'em for 20,000 bucks, right? So I buy these houses for 20,000 bucks. I buy five for a hundred grand and then I would go in and I would turn the heat, the water and the lights. I wouldn't even rehab them. And I would sell them on owner financing to an end buyer and they would pay a monthly payment to me. Although the title remained in my name. I don't want to get too granular here, but I owned the house and they were buying a massive lease option, right?
(22:38): Owner, fancy lease option. And then I would sell them to them. They would pay me the monthly payment and I wouldn't turn. Give it to the lender basically, because how I schedule this was I buy five houses for a hundred grand on a five-year fully amortized loan. All right? So I could pay 12 hell, I even paid 15% on a couple of them. And I remember the payments being like 2300 bucks a month, but I had five houses bringing in 800 so I'm making four grand a month gross minus taxes insurance. But I would pay the lender and still cashflow a little bit, but the benefit was in five years they were paid off, right? So I could have five homes paid for in five years. So I started stacking. I started doing, I started racing a hundred thousand dollar blocks of money on five-year AMS, anywhere from 12 to 15% and I would just, I would just crush it.
(23:23): I was buying everything I could get my hands on, wasn't doing massive rehabs, just heat water and lights, kind of give them to them like a work for equity situation, very low down payment. Put them in there. 800 bucks a month, they'd just go baby go. That was the plan that wasn't making a lot of money still because you know, you'd have some fallout, you'd have, Oh Joe, you know, the furnaces I don't want to do. And we'd still do repairs, right. So I had to sell real estate. So I'm a real estate broker at this point. I've got a brokerage, even though there's not a lot of agents, I don't want a business, but I would sell houses at night. So I work at my investment business all day and then the evening and I go out and I would sell traditional real estate, whether it's run a buyer's around or taking some listings, like whatever it took, just make ends meet, you know?
(24:02): But at least it was all one thing that goes back to that, at least it was all in the same business. I wasn't a plumber by day and doing this by night. So that's a great takeaway by the way. So I go out to sell real estate at night and that did that for a lot of years. Did that for a lot of years, to be honest, you know? But I kept acquiring, kept acquiring, keep acquiring, kept acquiring. I started getting over a hundred, 150 houses, right? Mortgages. But I had these assets short-term, the debt was going down at a rapid pace. I was like, man, if I can just see through the forest, this is going to work out one day it's going to work out one day. I know it is. And trying to stay positive cause you're basically killing it, you know? So that went on for a very long time.
(24:43): And finally, before I say this, houses are getting paid for. We all know the result that the house has got paid for and the cashflow, it just got insane. But before that I started investing in my education. I never invested in my education from like the time we got in the business up until about 2012 I would always check out a library book or go to a Raya. Raya is like a real estate investment association or you know, just talk to people who weren't really, they were doing okay but they weren't like the heaviest hitters, you know. So I got introduced to this mastermind in 2012. I know what a mastermind was. I asked them, they were super expensive to be involved in, and I ended up joining the mastermind, and that's really when everything changed for me. I would go into these masterminds, say they're not in Ohio, they're usually in the nice, warm climate markets somewhere in the down South, you know?
(25:30): So I went to my first one and I started talking about Cleveland, Ohio real estate, how you could buy houses, and this is at this time, it'd be 25 30,000 bucks, you know, five, $10,000 rehab is referee $100 a month and people not in Ohio, people you know, from Los Angeles to Phoenix, to Dallas to Tampa Bay, they're like, damn, those are some really good numbers, dude. You know, I'd be willing to buy that. I'm like, you would never even understand that. I didn't even know what the word turnkey was. See, there's people out there that buy houses that are, have been rehabbed, they're tenanted, who want performing assets. I didn't realize that. I never knew people would do that and didn't even live in Ohio. I thought she had to live where you're on rustling property. So what happened is I started selling houses cause these guys hold my eyes to it.
(26:10): The people, not just all over the USA, but all over the world. So in 2013 I started selling houses all over the world in Cleveland, Ohio. Huge game changer. These people will come in and buy these homes and I would make a decent little profit. I wasn't killing it, but I make a decent profit and I learned the turnkey model. It was really cool. It's different flavor to the business and some great Gibbs. You know, I talked to people in different countries and California who just want to park money and enjoy diff. They invest for different reasons, right? No one was just investor cashflow, which I didn't realize that either they invest for appreciation, which there is still that here, especially at that time. There's an amortization, you know, just own it. Over time the house goes down, you can invest for depreciation, right? Tax benefits and you can invest for 10 31 exchange reasons.
(26:56): You know, there's just a multitude of reasons, but I didn't know these things and these guys opened my eyes to it. So I started doing, I started selling some turnkey while I was continuing to buy my, my steady assets, my my homes. I keep on short term financing and then it happened. So finally happen. Everything got paid for January, 2017 portfolio paid for very exciting, no debt. And I'll tell you what, it's a game changer. There's no doubt about that. So here we are, man. We're continuing to cook. We're still selling turnkey. I'm enjoying a real estate portfolio that produces a nice cash flow. Although I'll tell you why I want to say this though, it's a lot of work, man. You know, real estate is not a passive passive investment. It's an active passive investment. And the minute you think it's going to be completely hands off, you're going to lose money and you can run it like that.
(27:46): Don't get me wrong, but you need to be involved. You need to keep your hand on the trigger. Just a little bit, just making sure things are moving along and progressing. Even if you're an out of country owner, same thing. Need to be on the trigger a little bit. Make sure you're getting the best pricing, work with your manager. But I know you're engaged today. He has your attention, things like that, you know. But you know, we kept cruising here and that's it. So selling turnkey, got a bunch of Reynolds. I've been starting to do some private lending, doing a lot of that lately, doing joint venture agreements. So if you see, you know, I have these firemen for example, they want to flip houses, you know, and it's hard to get to deals so we know how to get them. So we'll bring a deal to the table, we'll bring the money to the table.
(28:26): We might even bring money for materials and rehab and they manage it, they'll manage operations and then we help them sell it. Whether it's to one of our turnkey buyers or whether it's retail. If MLS, we can use our brokerage. Totally cool. It's a new road. We're going down the last couple of years and that's working out really good. It's a lot of fun. It's different. So doing that, and like I said, I start lending money to seasoned investors and it's great. So that's kind of the story. That's what it is. You know, I'm leaving some stuff out of course, cause I can't remember it all anymore. It's like this thing I've seriously forgotten more than I can remember. You know, it's been a long crazy ride. I got a lot of bruises, you know, definitely. But I'm brushing the dirt off, getting up and doing it again. So that starts it off. That starts off the podcast and hopefully you'll tune in and enjoy some of the things I talk about. I'm going to try to come up with unique topics and just spit some wisdom at you and maybe it'll inspire you. Maybe we can do a deal together. Who knows. So thanks for tuning in though. I appreciate the time, you know, catch you on some future episodes.
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