Building Wealth with No Capital: CJ Harris's Personal Real Estate Strategy

Meet real estate tycoon-in-the-making, CJ Harris, who shares his whirlwind journey from having no capital to creating wealth by leveraging resources like HELOCs, personal lines of credit, and credit cards to fund his investments. CJ's story is a testament to the power that lies in hustle, creativity, and smartly utilizing available resources, making him an inspiration for anyone who is looking to step into the world of real estate.

CJ doesn't just stop at sharing his inspiring journey. He also offers a comprehensive guide to long-distance investing and property management. Learn how CJ managed to hold down his regular job while juggling his investment duties. Delve into his strategies for finding investment-worthy properties, leveraging local connections, and the significance of having a reliable person on ground. His advice on how to successfully vet a property manager is indispensable for anyone planning to get into real estate.

Capping off with a discussion on his investment strategies, goals, and future plans, CJ shares his experience of a duplex renovation project during the Covid-19 pandemic. He reveals how Scott Trench's book, 'Set for Life' led him to shift his goal from becoming a millionaire to achieving financial independence, a valuable insight for anyone on a similar journey. With a sneak peek into his upcoming BPcon, CJ leaves us with golden nuggets of advice on hard work and persistence, making this episode a treasure trove of knowledge and inspiration for both seasoned investors and newcomers to the real estate market. So, don't miss out on this enlightening conversation with CJ Harris!

Contact CJ: cjharrisgroupllc@outlook.com

--------- HIGHLIGHTS ---------

0:04:22 - No Money Down Real Estate Investing (97 Seconds)
0:08:46 - Confident in Real Estate and Finance (102 Seconds)
0:14:19 - Long Distance Real Estate Purchase (30 Seconds)
0:16:09 - Creating a Property Manager Protocol (97 Seconds)
0:21:21 - House Hacking and Airbnb Rental (84 Seconds)
0:26:51 - Building Chaos and Uncertain Decisions (75 Seconds)
0:29:41 - Real Estate Strategies and Creativity (87 Seconds)
0:32:50 - Fund Real Estate Projects With Credit (125 Seconds)
0:39:05 - Real Estate Investing and Strategies (73 Seconds)
0:44:04 - Optimal Rental Strategy for Oil and Gas Tenants (91 Seconds)

Real Estate, Investor, HELOCs, Personal Lines of Credit, Credit Cards, Hustle, Creativity, Long-Distance Investing, Property Management, Investment Strategies, Funding, Goals, Future Plans, Duplex Renovation, Covid-19, Scott Trench, Set for Life, Financial Independence, BPcon, Hard Work, Persistence, Equity investing, Untapped Equity, Rookie investor, Employed Full-time,

Transcript

0:00:04 - Marcus
Welcome back to this week's episode, mvp Real Estate podcast, season three, episode 21. We got CJ Harris this week A very interesting story, especially for those who are starting out or thinking about getting to real estate. His hustle is incredible. What he's done in three years with no money, none of his own money, is impressive. He's flipped. He's house hacked. He talks a big portion of a flop that he had that he turned into actually a nice generating rental property. So he considers himself a rookie. You guys can take a listen, see what you think, but I don't think there's much rookie about him in three years. But what do you think rookie? I would say no. 

No he has been. He's gone through helocs. He's gone through commercial residential loans. Yes, cr, yeah, he's, he is a good person. If you're thinking about starting, he left his contact information at the end. If you're going to BP con any of the listeners he's going to be there. But, man, he's a really good story for anybody trying to start out. Let's bring him on. Well, cj, thank you for coming on the show. We appreciate your time. Yeah, are you traveling right now? Because I know before the show you were saying you travel a lot. 

0:01:34 - CJ Harris
I am. I'm in a hotel right now, all right, where are you at currently? I am in Bowling Green, kentucky, awesome. 

0:01:43 - Marcus
And you said originally from Mississippi but living in Florida right now, right Over it. That's it, that is correct, awesome. Well, we always start the show the same way about a little bit of background, about you, okay. So I always say like 30 seconds to a minute of like where you came from, and it can be a little bit longer. I just don't want to put like a five minute limit on it. 

0:02:05 - CJ Harris
So just absolutely Okay. 

0:02:07 - Marcus
Who is CJ? Where did CJ come from and how do we get to where we're at? 

0:02:12 - CJ Harris
Got it. Well, my name is Clarence Harris, they call me CJ Harris and I am a I consider myself a rookie real estate investor. I started back in 2020. And I have. I bought a duplex back in 2020, where I did a Burr project on and I had no money when I started, so I used the HELOP, I use the personal line of credit, I use credit cards and a lot of different things. 

So, when it comes to properties that I have owned, I've done full gut rehab. I've done one, three burrs. I have used commercial lending, I've used private lending. I have a house hack. I have had short term rentals. I, you know, converting some of my long term rentals into short term rentals. Man, I've done quite a bit. I've used commercial lending, dscr, lending, personal mortgages and, honestly, I think I'm the type of rookie that has have. I've done a lot in real estate and I'm now at the point where I'm dangerous enough about a little bit of everything to where I'm ready to start investing. It's been very hard to call myself a real estate investor because I just hadn't found the perfect niche, but I've put my hand in a lot of different places so far and I think now I'm ready for tier two, investing, if that's a thing I like that. 

0:03:52 - Marcus
I like that as you were going about your story, you're farther and farther away from a rookie investor. I mean, you've got multiple properties, you've dabbled, in short term and long term, different types of investing strategies. That burn method is actually where where I started as well. I love the ugliest house on a really cool block and just like giving it a second life. I thought that was very satisfying for me to see the time to go through. 

0:04:21 - CJ Harris
Me too as well. My first, second, third I had first bought a duplex and then I bought a single family home and then I bought a house that I wanted to be a flip, but it turned into a flop. 

0:04:35 - Marcus
But you know, back in those days, you could. 

0:04:40 - CJ Harris
I think I still had a little equity and it was, in a sense, my third accidental burn because, so that I wouldn't lose money on it, I just refinanced it and kept it. And I think one of the things that's pretty unique to my story is that I started off with absolutely zero money. I did own a home and I took out a home equity line of credit on that home. I went to the bank and they wanted to give me a 80% loan to value on that, but I was persistent enough to find a bank that could do 100% loan to value Good for you, this particular house that I owned. And it was the difference between $15,000 and $50,000, you know. In this scenario. But as I was sitting there, they were like hey, we already ran your credit, so here's another $20,000 credit card. You know that we can add, and the unique thing about this financial product is that you can move all of that cash into your account and use it like cash. So now I got $70,000, all borrowed money. Right before all of that, I had got a $20,000 personal line of credit, so now I got my little $90,000. I'm thinking, okay, let's go ahead and do this birth. 

I bought a property in Mississippi while I was living in Florida. It was a duplex full good. This house was just trash, but I paid $65,000 for a duplex that nobody wanted Probably like you guys do find those properties and the rehab ended up being $65,000. So, as you can see, I didn't have enough. But I went back to another bank and asked for a personal line of credit. I just asked for money and they gave me a $14,000 line of credit. Same day, I went to another bank and they gave me a $10,000 line of credit, and I was like I told my wife, I said, hey, you need to go and get a line of credit as well. And this was. 

This was January 2020, right before COVID hit, where banks were offering lines of credit, and so one of the things I did, I was able to complete this rehab. It was $165,000. It appraised for $200,000. Of course, I refinanced it and the bank only gave me 65% loan to value, which was $130,000 that I had initially paid for that project. So I was able to pay off all of those loans and now they're back to zero. I was able to go into the second property with the same money. Essentially, all of my portfolio was actually acquired in the same way and it was using somebody else's money. 

Again, none of the money came out of my own pocket and I tell that story all the time and people always ask me about how did I make the payments on those all those lines of credit? Well, honestly I'm gonna use this term I think it floats around the internet now with velocity bank. Now I don't know if I want to call it that, but I have five lines of credit. Let's pretend like one was $500, one was four, one was three, two $100 payments. A lot of people will see $510, $1500 amongst those lines of credit. But because I was doing the Burr method, I only saw $500, because I could put $500 in to pay this account off and I could pull a 400 out. And I could take that same 400 and pay this one and pull a 300 out, because I knew I was trying to get to the refinance step. Even those holding calls were not as high as somebody may think they were, and so I was able to float it and I was able to get to the end. 

And then, once I learned that and once I became confident with real estate and financial products, because the both of us know that those two things go hand in hand. 

It doesn't matter you got a cheap property and your financing is awful, it doesn't matter that you got great financing and you're paying too much for your property. 

And so I know I mentioned earlier from a, I guess, a certain perspective I do still consider myself a rookie, but as I was thinking about that, talking about that on this podcast, I thought about that Right now I'm at the point that I have learned so much with so many different products. Like I said, I think I'm ready now to know which product is good for which situation. We talked about experience A lot of times. Some of the things that did not work in a particular situation that's what experience teaches you is that you can use that for another situation because you've done it. You know it didn't work right here, but, wow, this will be perfect for right here. So, yeah, I've used hard money, I've used private lending as well, and so, like I said, I haven't niche out yet, and that's what I really wanna do is try to find my niche, and I think that I'm ready to. I don't know. 

0:10:16 - Marcus
I guess I just wanted to talk about it because one of the things for- An awesome, awesome story, and what the listeners don't know yet is all of that being done and all the chaos that's going on. You still had a W-2 job during the whole period. 

0:10:32 - CJ Harris
Yes, right, yeah, that's true. 

0:10:34 - Marcus
The stressor's not only of starting the investing route, while also doing your duties as your W-2 employee hat as you're wearing that's a lot of stress going on so if you consider yourself, in terms of time, as a rookie. Your hustle is like veteran level, because that's commendable. 

0:10:56 - CJ Harris
I guess so. And you know, like I say right now, I've done so many different things. The creativity comes to them and I think I like real estate because of the creativity, not just from changing the layout to a house, but even the creativity when it comes to financing. And you know, right now I still own three properties. I've sold some of those birth projects since then and, you know, made good money and honestly, of course I want to do it for money, but I have not made it to that point to where I can say I really got a good income coming from my properties. I do it now just because I love it. You know, I love the systems, I love the processes, I love the creativity. You know it fits my personality. 

So yeah no, that's awesome, that's awesome and. 

0:11:54 - Marcus
I don't think you mentioned how did you get tipped onto the duplex that you found that first deal? 

0:12:00 - CJ Harris
Early on, I had a lender, or, let me see, I had a real estate agent in Mississippi and you know, I was introduced to him by somebody else. I knew this concept of being an investor friendly realtor and a you know, I'm selling you your dream home realtor. 

0:12:20 - Marcus
Yeah. 

0:12:21 - CJ Harris
And very unique, two different people. 

0:12:23 - Marcus
Yes, and hopefully, like that's a message that listeners can take Interview your agent cause there's different agents and they tip you off to different deals, so that is a very, very good point. 

0:12:34 - CJ Harris
Absolutely Two different people. And this guy, he found most of my other properties since then and but basically I was introduced to him. But I knew that at the time. Now I know you guys have mentioned bigger pockets but I'm a student of it. I listened to all the podcasts. I've listened to most of your podcasts cause, you know, once I signed up for the podcast I was like, let me go this route. You know you kind of got stuck in the bigger pockets world but it's a refreshing to have found a new podcast out there that I can listen to. And just you know, from that standpoint I knew that I should have found an investor, friendly real estate agent, and again, it was long distance. He helped me with some of the construction. 

He would go by there and check on, see where my construction workers were, yeah, and by this time I had found a property manager that I wanted to use and she went over and she was like hey, you forgot a closet rod right here. You know the tenants aren't going to do this and essentially like a book that I read that helped me understand how to do the long distance investing. Yeah, those are some of my key people. 

0:13:46 - Marcus
Yep, those property managers are very, very important. 

0:13:50 - CJ Harris
Oh yeah, oh yeah, Especially when they know you and that she was a friend of mine and wanted to see me succeed as well. As you know, start her property management business. 

0:14:02 - Marcus
Yeah, absolutely, that was pretty cool. You mentioned long distance. Is that because you were still in Mississippi as you bought this duplex in Florida? 

0:14:10 - CJ Harris
So when I moved to Florida, the money that I had acquired through those lines of credit was not enough. In my mind. I wanted to buy a house cash, and that's why those lines of credit allowed me to do that. But that wasn't enough. That wasn't enough cash to buy in Florida. So I said, ok, I'm familiar with Mississippi, that's where I'm originally from, I have friends over there that can help me. And that's another key point. 

A lot of people look at long distance investing. They may say, hey, let me go to I don't know the Midwest to invest. But when you do long distance investing, I think you need to have some type of competitive advantage on the ground. Yeah, I would suggest starting in places where you have family members in. You know, don't just pick a random town, because having that connection on the ground is very important, and I got a family member who lives in Timbuktu. That would be the first place I would look if your backyard is not appropriate, even though somebody may suggest that these other towns are better for long distance investing you just need somebody on the ground as well, that can tell you what neighborhood is good, what area is good. 

You need something on the ground over there to make that happen, and that's what I had in Mississippi. I had friends, family, college buddies, just the whole nine there and that's what made me pick that area Absolutely. 

0:15:38 - Marcus
Yeah, I mean, numbers are great on paper. You can look at this town and say OK, great rental market. 

0:15:43 - CJ Harris
Houses are at a good price. 

0:15:45 - Marcus
But if you have no one to move the needle, you can buy the house and you don't know that the repairs are getting done or the properties being managed. Numbers are numbers. 

0:15:55 - CJ Harris
Yep, if nothing else. Hey, do you know a handyman? You know. You call your cousin and ask him do they know a handyman? You know that's better than looking through the Google to find one. 

0:16:06 - Marcus
Yeah, absolutely. And then there's the whole. I know we did a show on how to vet your property manager. Some questions to ask and some things to do to make sure you're getting an appropriate property manager For your asset class or your investing strategy. 

0:16:21 - CJ Harris
Yeah, that's true, I am with that in mind, and this is another thing that I'm learning about. Business Is that I had a. I used the property manager but, honestly, I can remember sitting at my desk, you know, a couple of days and nights writing up my property manager's protocol and the way that I wanted to manage my property, and then I would pass that to my property manager and ask her is there something that she can follow? And she said yeah, and so essentially, that's a very good idea. 

Yeah, on one way you can, you know, you allow them to give you what they give you. But I was like, hey, let's do this, let's do this kind of my way. And so I wrote it all up for myself, typed it up you know, reading books and, like I said, I was a student of it and all the good ideas that I thought to have, and I created my own protocol and said, hey, I have a property, it's a duplex, I pay, you know, this percentage. You know I had my little things in there. You know how we handled the deposit and all of that type of stuff. And she was like, yeah, I can do this. I was like, oh, okay, well, there we go, this is our, this is it's a spinoff of my business, but it's something that she followed. Well, and she was amazing. 

0:17:46 - Marcus
So yeah, and that's actually where I started as well, when I started investing. Before I bought a house, I had wrote down what I expected to see out of me, managed my own properties and I knew future I'd be managing other people's. So. 

0:18:00 - CJ Harris
I know, that's what. 

0:18:01 - Marcus
I want to see. I know that they're going to want to see it, so I knew that the transparency was going to have to be there. 

0:18:07 - CJ Harris
Oh yeah, no doubt. 

0:18:08 - Marcus
Payments would have to be able to be to see in both ways. So now we're on a software system where if you own a house, we're managing it you can log on and see rent being paid. You can see damages of pictures, going up Everything is a very, very fluid system, which is something that I need for myself, and I know other people want as well, yeah. 

0:18:32 - CJ Harris
So I like that tactic. 

0:18:33 - Marcus
I do. 

0:18:34 - CJ Harris
Oh, yeah, yeah. And she took on the first two properties and then my real estate agent found another property that you know. I refinanced out of one and went right into the next one. We did the same thing and onto the third one. By the time we got to the third one in Mississippi, Just the flop. 

0:18:50 - Marcus
Yes, all right. Good, that was my description, awesome. 

0:18:54 - CJ Harris
By the time I got to my third one, I realized that I was, you know, acquiring properties. But I needed a flip at the time and things were going good. I had my same contractor for both of those properties that I had, but this one was a little bit further away from the town that I was investing in which was Jackson, mississippi, by the way and this third property was a little bit further out. So I had to get another contractor. But you know, maybe I got complacent with things going so well. You know, I got things going, but my third contractor came on site Good property. 

It turned out that I had to demo kind of the whole front side of the house more than what I expected, and I learned a lot from that. Water damage came from the roof through some of the walls on the front side of the house, which made all of the walls messed up. You can see the roof damage but you can't see the wall damage and the floor damage. And so, but now I know, yes, you know, knowing it's half the battle, but that was probably a defect that you couldn't see absolutely without getting into demo correct? 

0:20:12 - Marcus
Yes, absolutely. We had one of those as well, where it went south before you could actually get to working Absolutely. 

0:20:20 - CJ Harris
But again I was using finance money and I was still floating my bills like I needed to float them. So again, in my mind it still is technically none of my money and I had enough to finance that project, but I had put too much in it to where the sale of that property would not have been wale. So I think I put it on the market for one or two months, you know, with all my holding costs. It was like, oh my God, what am I going to do? And I was like I just have to stop the bleeding. And so I decided to burn that property. So I went to get a commercial loan and I like those now it was, you know, they still give you like the 15 year type of product, but the principal pay down per month is a lot faster than the 30 year products. 

And so from that standpoint, my goal there was still to sell this property, but I needed somebody else to pay it off. That's a tenant, that's a tenant. And so I held on to that property for about a year. Well, I actually still own that property, but I had a tenant turnover. So it was in a small town and in this small town a lot of the what I had to rent my house. It wasn't that affordable right For the tenant pool that I had in this small town and it was a four bedroom too bad. But this is where a pad split people call it pad split, you know, in some cases we call them a house hack or splitting this house. 

But, I actually literally put one, two, three, two by fours to block off the master bedroom on the backside of the house. The master bedroom had its own entrance. I added a one wall kitchen, you know, stove, sink, microwave above it, refrigerator on this wall. I basically set it up like a studio. I rented the front side of that house as a three one and the backside of that house I turned into Airbnb. And yeah, so it was a pad split that I rented the front side for the same thing that I had been renting out before too, and the backside is now Airbnb. 

That brings in more income, and one of the things now I've started to get real created with those type of layouts, because right now, long-term rent is not going to do it. It's just it's hard. I mean, I guess, if you find a property that is inexpensive enough that you don't have a lot in it, but you really got to figure out a way how to make more money on the properties that you do have. So, with that in mind, I basically doubled the rent over on that particular property by doing that, and so I wanted to sell it. 

0:23:26 - Marcus
That's your hustle, that's your expert hustle coming into play right there. 

0:23:30 - CJ Harris
I guess. So there were some capital expenses to get to that point. But now I got this 15-year product that's paying aggressively, paying down my loan, and now I also have the rent and it's performing like it needs to perform, and this flip that turned into a flop again. You just sometimes have to stop and stabilize what you have and try to make it profitable, and so I think I'm at that point now. At that property we're really stabilizing. We got Airbnb tenants coming through there, some direct bookings on that particular property, and so I'm pretty excited about that one. And so then the next property I had was a bird in Florida, because now I'm investing in Florida and that was pretty cookie cutter. But I also just turned my property. My personal property did the same pad split and now I'm ringing that on Airbnb in Gainesville, florida, and I can't keep that one vacant. 

0:24:35 - Marcus
There are no vacancies on that particular one. 

0:24:38 - CJ Harris
Very good problem to have, and so now I'm at the point where I stabilize my portfolio and I'm just sitting and I'm ready to get into my next project. 

0:24:51 - Marcus
Yeah, do you think you're going to sit more with the rental properties or do you think you'd want to go more into the flips? Well, I need to flip one or two. Now. It's in your backyard. Right Now it's in your backyard. It's a little bit more manageable. Absolutely. 

0:25:09 - CJ Harris
Yeah, I got a good friend that I joke with all the time. She's a part of our real estate investment group but we always talk about we are sometimes equity rich but cash po, so we need to flip here. I do need to flip somewhere Because the rent on its own doesn't. We do all this work, we know the equity is there but we don't really have a few dollars in our pocket to enjoy those dollar signs that we created without some type of flip. So I do need one or two flips and I think if I did that and have some cash because again I've used other people's money and I'm refinancing and my only real income is coming from the rental properties A lot of equity and I did sell one of those properties, one of the birds, the duplex that I hanged, and I got brought some income there but and it appreciated pretty good about $50,000 in two years and I was happy with that. 

Again, I would have paid $134,000, but I sold it for $250,000. So that was one of those scenarios, but some of those dollars went back to help me out of this flop Because I still had some debt on that flop. 

0:26:34 - Marcus
Yeah, we had the flop you had. We ended up still clearing a little bit of a profit, but it was not what we expected. Our expenses went up Because I bought it it was actually on the market, which was the first house we actually bought on the market. Usually we do mailers or calls, and there was so much water damage that the floor was deflected about three inches from the outside of the center. So we ended up having to tear everything down. 

0:27:06 - CJ Harris
There was a lot of framing issues that it would have costed the same. 

0:27:10 - Marcus
Well, probably more to try and fix what was damaged than just to tear it, and restart, so it was a complete new build. And we were right on that cusp of OK, do we hold on to this way? Too, big of a rental and just try to pay down debt. It won't cash flow, but it'll pay down and then try to sell it in a couple of years, but yet the timing was also very weird because we were right around that, covid deadline where things were scary. 

People weren't buying as much, but prices were inflated. It was a crazy, crazy time. And I think it went so fast and there was so much chaos that I lose what I was thinking Like in the moment right. This was the part of the build we were on. Was I thinking about renting at that point, or was I thinking about flipping it and selling it? 

0:28:03 - CJ Harris
And it got crazy. 

0:28:04 - Marcus
I'm just glad we got out from under. It Sounds like you did pretty well on that one as well. 

0:28:09 - CJ Harris
Yeah, and I guess, going back to what I'm calling my rookie story, it takes some experience in this business to kind of move forward. I'm a lot more patient now, I'm a lot more comfortable now and with the ups and downs. I can't say it's hard to lose in real estate, because it is. But for somebody who's wanted to get started there is a way and, like I said, I even used some private lending and I think you can. I encourage everybody. 

I know that my net worth, because now you kind of track net worth even though you ain't got no money in the bank, you track net worth and I have seen it grow over the last three years that I've started in real estate. So it's definitely doable. And not only that, like I said, I sold the property and made a pretty good penny off of it. Essentially, if you can do one a year, it doesn't take the speed, especially from a rookie standpoint. I know you guys may do 10 properties a year, but even from a rookie standpoint, if you can do one a year, one the next year, one the next year, and then you can go back and start selling all some properties that you had and keep doing one a year and then you can start getting sale income as well as rental income, and you can just keep doing that. So so many different strategies to play this game. 

0:29:45 - Marcus
Yeah, and I appreciate that I would love to be able to do 10 deals a year. No, I think the biggest year, I think, was four. 

0:29:55 - CJ Harris
So it's not as much as you think In some of them were bigger projects, like new builds, and those take time, of course. 

0:30:04 - Marcus
But obviously there are some deals that are a couple of months where you just do some minor upkeep in renovating. And then you can sell them again or put them on the market and rent them. So that's true. 

0:30:15 - CJ Harris
And that's true, and I'll tell you what, just thinking about just creativity and excuse me for kind of buttoning in right there. But even the property that I bought in Gainesville, Florida, it was a complete good rehab and I did the rehab. But it came with two lots, two infield lots on this property. I probably sold those lots for, I think, $20,000. And in my mind I really wanted to build on them because it was a lot that you can. They were combined and I could have built a multifamily on it. But I sold them and that was the easiest $20,000 I ever made in my life. And so sometimes just the risk and the reward. Again, I know I'm probably rambling and all over the place, but it's so many different ways to be creative in this business, Right. 

0:31:06 - Marcus
You just got to have the hustle and the creativity. Yes, yeah, yeah, I mean, my first deal ever that I bought was a two lot, and I didn't even realize it until I got in. 

0:31:17 - CJ Harris
And I'd send out a mail or he had called. 

0:31:20 - Marcus
I went over to the property we agreed on a price and I went home and started researching a lot, a little bit more, and I was like I noticed that this lot was bigger than all the rest on the block. And then I went into the city ordinance and I was like, oh, I could definitely split those. So this deal that I just agreed on got better, because now I get two lots out of it, exactly, exactly. But it just takes the extra thought of like what else can I do with this? 

And do you ever watch Ted Lasso. 

0:31:50 - CJ Harris
Yes, I do All right, so here's a quote. 

0:31:53 - Marcus
I don't want to be an umbrella and a brainstorm. And if you have that mindset when you're looking at real estate no options off the table. Throw everything out. What can we do? You'll start thinking of more and more options, of what you can do. I mean, you're flop. That's true. If you had an umbrella and that brainstorm, you wouldn't have thought like all right, airbnb the back half. And now I just created two streams of income on that one. 

0:32:16 - CJ Harris
Yeah that's true. 

0:32:18 - Marcus
The creativity is huge in this whole thing. 

0:32:21 - CJ Harris
Oh yeah, no doubt, no doubt. 

0:32:24 - Marcus
Funding creativity, housing creativity, and that actually touches on the next thing funding, Because I know that's the next thing that you are. You're like I want to get the next one, but right now I'm going to say you're growing your wealth and your rentals, yeah, yeah. So you've got your. You've got your long train going and it's chugging up to speed, but you're not seeing the bank account grow, but your overall wealth is getting there, which is awesome. 

Oh yeah, with those private lenders that you started with and with those lines of credits and the HELOC, do you see that as an avenue now that you'd go back to in terms of funding your next one? 

0:33:04 - CJ Harris
Absolutely. I think that, again, that's the thing that I'm very comfortable with, because I've done that multiple times. I also, you know, when it comes to I got a pretty large HELOC on my house and so it's. I still can buy cash in Mississippi with that HELOC. And one of the things about lines of credit and kind of credit card debt is that your first payment on the total balance is just $100,000 HELOC and you got a thousand dollar payment and you make that thousand dollar payment. Your next payment is actually getting less and so you know, as you hold that you can. You know those. 

Instead of being a one way loan where you put money in and you can't take it out, I could literally pay that thousand and get it back, and I can keep doing that all the way up until I refinance the project. And one of the things that was pretty cool with refinancing projects like that you can make the bank pay those creditors off in a loan consolidation. They'll pay them down to zero and they'll underwrite them like you have zero debt on those and that's helping you qualify for the loan. So I'll probably continue to use a lot of my available credit to rehab, probably even for down payments in conjunction with, maybe, a hard money lender or some type of private money, but I think, for the most part, I'll still be using my lines as my primary source of funding. Yeah, Until I get to something too big to handle? 

0:35:02 - Marcus
Is that in your future? Are you trying to go big here? Are you still in your? One bite at a time, take on the small, not the smaller things. I don't want to make them seem like they're minimal, but the more manageable projects in your backyard, kind of thing. 

0:35:19 - CJ Harris
I do like the manageable projects again. You know, as interest rates, you know, get higher, you have to be a little bit more creative on. 

0:35:30 - Marcus
Yeah. 

0:35:31 - CJ Harris
I guess trusting the asset that you have, you know to pay off you know some of the income. I don't want to turn my real estate career into a job. I really don't. The last two or three years taught me that. You know I complete good projects on almost every front. I do believe now that I can find properties that don't need a lot of rehab and the conversion strategy to where I can do a pass split on a property that makes it to where I'm seeing a single family home like, like it's a duplex. 

Most people aren't looking at those properties like that and I think in a sense that's the easy button. I'm interested in the easy. I don't know if I want to, like I said, turn my real estate investment career into a job, because that's what it has been and I'm not saying this because you know something for the last three years it has almost been a job and right now I just want to chill out just a little bit. Grow it with the easy button, and that's why I talked about my patience. Now I'm waiting on the right deal so that I don't have to bust my butt to try to make it turn it into something you know. You know I've seen some flips where it's like, okay, if I don't help out over here, then I'm going to end up spending too much money. I just changed that to a job and I'll say this the first three properties were in Mississippi and I was because it was long distance. 

Hey, I can jump on the phone and say, hey, I need, I got a refrigerator coming. Hey, I need a plumber over here, and I can get those jobs done like that. My very first property in Florida that was in my backyard. I was over there every day, every single day, doing something and I realized, wow, I've just turned this into my job. And it was the difference. And honestly, because it was long distance, I felt like a business owner, but when it came into my backyard I felt like a contractor and I felt like a real estate agent because I was trying to sell it. I felt like a property manager, I felt like a landlord and those things you know, they are there, if you know. Again, because it was in my backyard, I couldn't help but to go over there. 

It pulled me over there, but when they were in Mississippi I could call somebody, and that's how I do want to run my business. 

0:38:11 - Marcus
Yeah. 

0:38:13 - CJ Harris
Yeah, the one. Thing. 

0:38:14 - Marcus
I liked about the bigger pockets is you know I think it was the first show, which is what turned me on to it. They were saying like, if you want to get into this, it's not easy, there's going to be struggles. There's going to be pain there's going to be. There's going to be chaos. 

0:38:28 - CJ Harris
Yeah, absolutely, and it was true. 

0:38:29 - Marcus
I mean, yeah, when I first started it was my full time job. I just got my agents license that I bought this house and I felt like. I was at the house every day. If I wasn't working for my job and I had free time, I was at the house doing something. 

0:38:45 - CJ Harris
Did I know how to do it. 

0:38:47 - Marcus
No, I would sleep like when I got home. Before I went to bed I'd be YouTube University on how to do roofing. It was just drinking out of a fire hose to try and absorb all the information and it did feel like a second job and that is true, it is. And I think that first strategy it is a second job. 

0:39:08 - CJ Harris
Oh yeah, I know that, unless you have the capital to actually contract it out. 

0:39:13 - Marcus
But not everybody starting out has the capital to send to a GC and to pay for all the subs. 

0:39:20 - CJ Harris
Yes, I agree I don't have the capital yet either, Cause even on the property that I did in my backyard, I spent a lot of time over there. It cost me a lot, but I also did a lot when I did the pass split on my personal home. I did all of that construction myself, and so I know that I have to do it up to a point to where, you know, I can start finding better deals that make it to where I don't have to do it. But again, that's where my new patience comes in it, because I want to find a deal that I can pay somebody else to do it. You know, if I have to do it, you know, so be it. But at this point in time I understand real estate investing as a time-weighted type of thing, because over time it's where the value comes in. 

0:40:08 - Marcus
Yeah, and I know you said you don't want to make it your job Do you see yourself using real estate as a vehicle to lower your W-2 position? 

0:40:18 - CJ Harris
Yes, absolutely. Is that your? 

0:40:19 - Marcus
end goal. 

0:40:20 - CJ Harris
Is that where you want to be? Yes, that is my end goal and I will say I read a book called Set for Life by Scott Trench and it was literally oh yeah. Man, that would that I've read Rich Dan Porter's too, but I'm going to be honest with you. 

0:40:38 - Marcus
That's Set for Life. Changed the game? Oh yeah. 

0:40:42 - CJ Harris
Oh yeah, and so right now, what I'm seeing is, like I said, I'm running the Airbnb out of my personal house. 

Now I don't have a mortgage this is what Set for Life talks about and if I can do that again to pay my car note and I don't have a car note. Now the need for money has just changed from I don't need to be a millionaire, I just need to be financially independent, and so that is at least my first step. Once I get there now I feel like I can invest in real estate for fun, and that's how I see this going, but initially, I am kind of focusing on trying to lower my I'm talking about need for money by house hacking my personal house and I probably buy it. My next project I'm hoping that it is another primary home so they can get the best financing for it and pass, split that one, move out the one that I'm in and rent that, because that's the income that's waiting to be realized over there and from there there's just a little bit more income to lower my need to have the W-2. 

And so. But once I get there I don't have a dollar sign in mine anymore. I used to. When I first started I'm like, oh, I need a million dollars and this much money in the bank. But I'm seeing that very differently now, because to not need income because my assets are paying for themselves is definitely a game changer To me. It's just as important as having a million dollars in the bank, which I'm a long way from there. But if you keep this thing worth? 

0:42:32 - Marcus
it'll get there, absolutely. Is your now? We're thinking future here. I know we've been talking about it. Is that agent still sending you deals that you're looking at? And, if so, what are some things that you're seeing in your market that are limiting? I guess jumping at the next one, Because we've got limits here. Dan is analyzing properties every day. And there are just things that we're seeing constantly in today's market. They're like I like that opportunity, but the numbers don't work. 

0:43:04 - CJ Harris
Yeah, mississippi as a market, they do have inexpensive homes. Now, right before I sold that duplex, I turned it into an Airbnb. And what I saw with that demographic because one of my questions on Airbnb hey, I'm so glad you booked, you're so pleased that you booked our place, but I do like to ask what brings you to Jackson Mississippi? I'm just going to ask that. And yeah, and so I began to understand what my demographics were. We had a lot of nurses that came through there and actually had a three-month deal with a nursing agency that were placing nurses in on one side of my duplex. The rent over there went from 1,000 to 2,000 on one side. 

0:43:57 - Marcus
We just started looking at that same philosophy, so very good idea. Oh my god. 

0:44:02 - CJ Harris
Yep, I'm doing it here on Airbnb as well. I got a couple of 30-day stays on my Airbnb at my property here in Gainesville. But once I did that I started to understand that, hey, I can't buy properties for long-term tenants, I have to buy them for midterm or Airbnb type of tenants to do that. But I found that there was a lot of oil and gas people coming through. There was a lot of working-class people coming through Jackson, mississippi. 

Now nobody wants a 2-1 property, but those are the cheapest ones and if you would convert those over to some type of working-class property, I think Airbnb, midterm type rentals, I think those will work in that market. And again, this is me looking at these properties through the lens of let me say, not through the lens of regular long-term tenants, because we count on them to work at Walmart, to pay our rent. But if we count on a nurse that's coming through, if we count on Airbnb for the tenant to pay in advance before they stay, it's a little bit more comfortable for me when it comes to that. But I bet you the 2-1s in that market they're probably everywhere. Nobody wants those for a family, but they work perfect for that particular model. 

0:45:35 - Marcus
Yeah, so that past split that you've been talking about, and we actually had a guest on the boarding houses. So she'd buy the four or five bedroom multiple bath and just rent out her room. 

0:45:49 - CJ Harris
Right, right, absolutely. Again, like I say, strategies, they could be all over the place, even the property. Before I passed with my house, I literally was thinking about putting up a few extra walls and trying to do some assistant living. I know there's a lot of startup with that, it's a lot of legality, but again it's a residential property that you and I can see from a contracting standpoint how to add some inexpensive 2-by-4s with some drywall sandwiched in between to add an extra room. But the model is not that of a long-term tenant. And I say that I always talk about that because I am a buy and hold investor Versus a flipper, but I never really. I guess I tried that one time to flip, but when you look at it that way, you can. In a lot of cases with the interest rates now, with whatever the mortgage is going to be, you need that extra to be able to buy property still. And it's just our cycle that we're in right now. 

0:46:59 - Marcus
Yeah, and I'm waiting for those interest rates to go down because they are clogging things up. 

0:47:06 - CJ Harris
Oh my god, yes, they are, yes, they are Fingers crossed that. 

0:47:11 - Marcus
that goes down quickly, but we'll see. 

0:47:13 - CJ Harris
Whatever that happens, absolutely, absolutely. 

0:47:16 - Marcus
So Awesome. Well, we are coming up on an hour. I don't want to keep you anymore. I know you're traveling. 

0:47:22 - CJ Harris
Yeah, traveling today. 

0:47:28 - Marcus
But what is like the? I know you gave a little bit of advice early on the show, so with you in your mindset, thinking you are a rookie investor? What is the tip you would give somebody who's on that threshold of like all right, I'm either in love with my W2 or I hate my W2. But I need to do something where I want to create some wealth for me and my family. What is the? 

advice you give them to try and tip them over the edge to jump in. I put you on the spot with this one. 

0:48:01 - CJ Harris
That's a really good one. No, that's a good one, but I don't want to say jump, because in some cases, well, how about this one? If real estate is what they're looking for? Get to a real estate investment need of. 

We have one in Gainesville and over the years I just this same conversation that I'm having with you. We have at a table drinking beer. Our meetup is a networking event. I'm going to train you on how to wholesale. I don't have a big PowerPoint up. 

We sit around and we talk about hey, this guy just had some lending, hey, she's trying to buy her first house and the community that I run with right now feels so much confidence in being able to do that. So I think the mindset of understanding that is regular people like me doing it may be the push that I think I would suggest to somebody. Get with somebody who is just like you, rookie, like me, who has done some different things, who has failed, who has had some success, and just meet them. In our group we got so many people doing so many different things. I guarantee you it's somebody there that's doing exactly or that knows how to do exactly what you're trying to do, but just getting the guidance, the mindset and again, like you can see, I'm decently well read in the real estate space read up and feel your confidence. 

0:49:50 - Marcus
Yeah, that's good advice and I actually didn't. The first thing I ever went to is with my dad. We went to a meet up a Rhea. Yeah yeah, In Brookfield Wisconsin. And yeah, it was so I went into it thinking like, OK, all these people are going to be suit and tie and they're all going to be. 

Yes, no jeans t-shirts, they go up hey, I got this house for sale, this is the price. And then they hand the microphone off and the next person will be like hey, I'm looking for this. Asset class is what I do. It was very, very informal. Everybody you could ask a random person. Hey, I'm struggling with this problem and either they'd have the answer or they'd say, like, go over to that table and talk to that person. 

0:50:32 - CJ Harris
Very friendly, absolutely. 

0:50:35 - Marcus
Yeah, which is super, super cool. 

0:50:39 - CJ Harris
Yeah, we try to keep ours informal on purpose, because we think that's what makes our meetup so much more unique than any other ones in our little city. 

0:50:47 - Marcus
So yeah, no, that's cool. That's a great advice. Yeah, and for our listeners, if they want to get ahold of you, is there a best way to reach out, ask you questions? 

0:50:58 - CJ Harris
Clarence Harris on Facebook. Cj Harris group at outlookcom is my email. I do really like helping people and that's what's interesting about the Airbnb space. I just like being nice to people and so I'm that guy. You can always go on Facebook. Gainesville, florida, biggerpockets Meetup group is our group. 

0:51:22 - Marcus
I was just going to ask you guys Join the group. 

0:51:24 - CJ Harris
Yeah, yes, yes, yes, we are, and I'll be at the conference this weekend. This is October the 13th, but I'm going to the conference down in Orlando this weekend, you are awesome. To kind of yes, I am, I will be there. 

0:51:36 - Marcus
So Very cool. I couldn't sneak away so I won't be able to make it, but. 

0:51:41 - CJ Harris
I began to emails. 

0:51:42 - Marcus
And I read them and then I like disappointed, like I have to back out of them because I can't make it. 

0:51:48 - CJ Harris
But Well, I tell you what I'm drinking the Kool-Aid, and you know what. One last piece of advice you know, listen to YouTube is a great place, and what's interesting about YouTube and getting advice from people? When I went to those banks to get the money, somebody said just go ask the bank. That's what I did. I just went to ask the bank they're giving. They're telling you what to do. You're probably just scared to do it. So that's one thing Listen to people. They'll tell you. They'll tell you exactly how to do what you're trying to do. 

0:52:20 - Marcus
Yeah, so yeah. Very good, very good advice. That's awesome I mean, I'm happy to hear your story, I'm happy to hear where you're going. 

0:52:30 - CJ Harris
Oh, yeah, well, thank you, and I know with your hustle that you have. 

0:52:33 - Marcus
You're going to get there. I hope so. So, we will touch base with you again Because I want to see where you're at. 

0:52:41 - CJ Harris
OK. 

0:52:42 - Marcus
I would love to come back Absolutely Well. I appreciate you spending the time. Your weather looks way better than mine, coming from your window. 

0:52:52 - CJ Harris
Oh yeah, I was just like we're rainy for the next four to five days. Yeah, it's brutal. Now it's good over here. We are good to go, so. 

0:52:59 - Marcus
Yeah, and enjoy the BPcon, like Dan was saying. 

0:53:03 - CJ Harris
Oh yeah, I'll tell you guys all about it. Yeah, I think it's going to be a blast Awesome. 

0:53:08 - Marcus
Well, thanks so much. 

0:53:10 - CJ Harris
Have a good rest of your weekend. Oh yeah, thank you so much, dan. All right, thank you. 

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