Podcast 198. Real Estate Investing in the 2023 Market with Dani Beit-Or

Average Joe Finances:
0:00

Hey, Welcome back to the Average Joe Finances podcast. I'm your host, Mike Cavaggioni, and today's guest is Dani Beit-or so. Danny, I am super excited to have you on. We're gonna be talking about some real estate today and that always gets me pumped up, so thank you for joining me today.

Dani Beit-or:
0:17

Oh, my pleasure. Thanks for having me. Such a great opportunity. Always. Thanks. Thank you very much.

Average Joe Finances:
0:22

Yeah. Absolutely. The pleasure is mine because I get to ask you questions and pick your brain and it's what I enjoy doing. Before we get started with that, I wanna start this off the same way I start every podcast episode. And I want my audience to get to know you a little bit. So if you could share a little bit about yourself. Tell us your story. Who is Danny Beit-or?

Dani Beit-or:
0:42

That'll be terrific. Glad to do like you said, I'm Danny. I live currently in Southern California. Married. I have one gorgeous little boy who's almost 11. Love of my life. I was born in Israel. You may be able to see, to hear some accent in the background. Not at all. I trying to get rid of, not at all. Thank you. Sound like a California, get rid of it. Like you've been in California your whole life. That'll be a first. By the way, not trying to get rid of my undistinguished accent. So I was born in Israel. I grew up in Israel just outside of Tel Aviv. I spent two years in Washington, DC for high school. But other than that, my whole upbringing was in say a middle class family. My dad was military, career military, an officer in the military, and I spent three mandatory years in the Israeli Special Forces. So that was quite an experience. Let's put it in, let's just put it this way, and post my my military service. I got my engineering degree, and while I was working for some veteran startup, not a new startup the startup, but it was already kinda few years down the, down the line. I just noticed that financially I am not on the right path. I felt like I'm on the wrong path financially. I'm on the path that everybody's taking around me, probably without even trying to, or putting me, life is putting you on a path because you're just seeing what everybody else is doing and you're doing. About the same. And very early on I realized something is wrong, something is off, something is not. Something doesn't add up to the way I perceive my life to be. And I knew that I have no problem. Even back then, I knew I'm a hard worker. I had no problem with working hard and working long and putting the time and effort and caring, even if it wasn't my own company. But I just told myself, Danny, you're gonna work for other people and you are gonna be doing okay. I don't wanna do, I didn't want back then. Still don't want just to do okay. I wanted to show, to have something to show for all the hard work that I know I'm gonna put in the coming years. I didn't even think of decades, but the coming years to show for all that long time missing on live stuff, missing on social stuff, traveling because I'm working and I just started looking for another avenue, another way to propel or Excel financially. I didn't know how to do it. I just knew the default is not something I'm not excited, and also not okay with. Yeah.

Average Joe Finances:
3:10

Yeah, absolutely. As you were describing your background, I was taking some notes as you were going. So now I know you spent some time in DC right? You said you finished your last two years of high school in Washington dc. Is that because your father was doing something with the US military? And over here, or?

Dani Beit-or:
3:29

No, my dad was a military at Attacher from Israel to the us It's

Average Joe Finances:
3:33

so you came over with him?

Dani Beit-or:
3:34

Exactly. So it's a family assignment for two years. For me it was it was one of the best things that happened to me in life because when you get as a teenager to dc my English was poor at best, right? So my English was not very good. Hopefully it's it's gotten a little bit better than science. So I had to really work on my English very quickly because that was a survival tool with the girls. So my English improved Within two weeks, I had no choice. And I got my diploma, my US high school diploma. So that was also good. I got my social security number also benefits for many things those two years gave me. So many treasures for the future without even realizing. At the time, and that I don't wanna, I don't wanna say set me on for life, but it gave me a better foundation to, for the future journey that back then I had no idea that's what's gonna happen. So that's was really. Amazing two years for me, and I had a good time. I had a blast for those two years. I was just enjoying my life, as a young teenager, but still, I was just having fun.

Average Joe Finances:
4:35

Yeah. No, that's fantastic.

Dani Beit-or:
4:36

Yeah.

Average Joe Finances:
4:37

After you finish up high school, you wound up going back to Israel, and you served your mandatory time in the military, the three years. When did you actually move back to the United States?

Dani Beit-or:
4:48

In 2004, I moved to the States. At beginning of 2004. As your modern day immigrant, we just packed our bags, our, my wife and I, our suitcases, and flew over just like that. No, there was no relocation packaged, there was nothing, right? We were just in Israel, there is a very, Israel invented one of the most successful unknown managerial systems. In free translation it's called. It'll be Okay. That's a very known thing in Israel. I'm translating. So that was my mo It'll be okay. 20 years later It is okay. So far, I think. So that was the what drove us over, so to speak. I did start investing in US real estate, very like one rental property and another two little investments in a group investments before coming over. So I made one and a half investment, so to speak. I don't know even how to quantitize, it's something not very exciting, but for me it's super exciting. But looking back, nothing too exciting as an investment wise, but that got me excited about US real estate investing, right? So that got me started in as soon as I started investing. Very early on, I knew that this is something, not only that I like it, and I wanna do, I felt that I need to immerse myself, surround myself to be a professional, to know what I'm doing. I need to really, dive in all in. This is not even it's funny. I'm using those terms thinking now. I wasn't jumping to the deep order. I was jumping straight to the deep order of the ocean in a way, cuz I was buying a property from Israel in the United States 2002, no Zillow, no public records, no all that stuff, all done remotely. Yes, I had some English with me, basic Englishs, at the time my English was not very good, but was just okay. That helped. Maybe spoke a little bit American. Not even two years. I don't think you even learn. I really distinguish between English and American.

Average Joe Finances:
6:48

There is a distinction between.

Dani Beit-or:
6:49

Yeah.

Average Joe Finances:
6:50

English from the UK and English.

Dani Beit-or:
6:52

Yes.

Average Joe Finances:
6:52

From the United States, that's for sure.

Dani Beit-or:
6:54

Yeah. Yeah. And that was what got me excited and I decided I wanna, and. In a way that got me encouraged to make the move and jump over the ocean and come over.

Average Joe Finances:
7:05

Yeah. So you, yeah. You didn't even just jump into the deep end of the pool. You got on a boat, went out into the middle of the ocean and dove right in. Who cares about the sharks, right? You no. Pass 'em or punch 'em out.

Dani Beit-or:
7:14

When you are a young ex special forces, you don't care about sharks.

Average Joe Finances:
7:17

Ah, there you go. There you go. All right. So there was something else you were talking about in your background, right? When you came over here, you saw what other people were doing, right? And it was one of those things that you said I feel like, you were comparing yourself to the other people saying that you were not on a good financial path. And that's the first thing that comes to my mind is how, it's a very popular saying too, is how comparison is the thief of joy. And I feel like when you compared yourself to those other people and you were pulling that joy away from yourself, you said how do I get this joy back? And that's when you started that search to figure out how to, build passive income and and things like that. So what was it? That turns you towards real estate. I know you started before you came over here that, you said you had one and a half investments, right? But what was that trigger for you where you said, this is what I want to do to build my legacy?

Dani Beit-or:
8:10

Earlier when I said that I knew that I was looking for the path to do well financially in life. Knowing, I had some realization at a young age. I knew that hard work is not gonna get me there just by hard work. And then the second thing is, I did not know how to get rich quick. That was all obviously a fantasy in my mind, but I just didn't know how to execute it. So I just started saying, if I don't know how to get rich quick, I need to start looking for another mechanism that will help me get rich slow. And then I also realized after investing for maybe a year or two in stocks and options that. I wasn't happy with the returns relatively to the risk I was getting from stocks and options.

Average Joe Finances:
8:57

Okay, so you started off in the stock market.

Dani Beit-or:
9:00

Yeah, I think many of us, the first thing we do, we like, it's, this is like what everybody's doing, right? So I just started.

Average Joe Finances:
9:06

Same here. Same here.

Dani Beit-or:
9:07

Yeah. Cause first of all, the threshold to the barrier two entry is kinda low. Cause you don't need a lot of money. To buy one stock, right? Actually you need very little, so to speak. And so that seems like the right way avenue to start. But I was looking, I was like, okay, what is going on here? Putting I'm taking relatively high risk and getting okay rewards, not reflecting the risk I'm taking. And I didn't like that. I didn't like that completely that formula, was not working well with me. So I knew that also, I think that I started realizing that being, watching the star ticker or, and reacting emotionally, I knew this is not a healthy thing for me. I wanted to find a way to shelter myself from emotional decisions quick decisions, and the real estate was in a way, And answer or a way to answer to address that. So the real estate for me was first of all, you can't, you can react emotionally. It doesn't matter because you don't normally buy on a Monday sale on a Tuesday, a piece of real estate. Yes, you can do it in certain ways, but normally that's not typical with real estate. So I knew that's a good thing for me. And the second thing I realized I realized is that to this day, when I do some mental exercise and think about different, investment, opportunities altogether, not just real estate, I always try to evaluate what would be high rewards, lower risk, and there's still, to date, I found one avenue that offer high rewards, lower risk, and that's long-term rentals. Long-term rentals. I think many types of real estate may, but especially residential long-term rental, kinda. Helps with that formula of of high rewards, lower risk. And I like that cuz that was the opposite from stock. It was the opposite of investing in other, more risky adventures, right? So for me, it fit very well. The fact with the rewards, the risk, and the fact that I don't I'm not gonna be able to make fast, emotional decisions. So it was kinda, in a way, it was shielding me more than anything else.

Average Joe Finances:
11:07

It forced you to slow down.

Dani Beit-or:
11:09

It forced me to slow down perfectly.

Average Joe Finances:
11:10

Yeah. It can be pretty detrimental. If you're a new investor and you are, on Robinhood or some other app where you can buy and trade stocks almost instantaneously, right? That can cause. Issues if you don't know what you're doing. I don't recommend Day trading because it is very volatile if you do it. There's a lot of people that do it, and some people are successful and some people lose their shirts. Yep. But at the same time you are like, Hey if I do this real estate piece, I can't just buy it and then sell it the next day. Or, I can't just, hurry up and try to turn a quick profit. Maybe you could, if you were flipping a property or wholesaling, sometimes you can do things like that. But you were looking more for the long term.

Dani Beit-or:
11:52

Correct.

Average Joe Finances:
11:53

And what am I gonna do to keep. To get an asset that's gonna keep paying me. So your focus was on building long-term wealth, which.

Dani Beit-or:
12:00

Exactly.

Average Joe Finances:
12:00

Which I feel like, a lot of people, could benefit from hearing something like that. Because it's not about getting rich quick, it's about building your wealth over time.

Dani Beit-or:
12:09

Exactly.

Average Joe Finances:
12:10

And when you do that, yeah. When you do that's how you. Find these successful people that everyone thinks are overnight sensations, but what, in reality, what happened? It was years of work.

Dani Beit-or:
12:21

Years.

Average Joe Finances:
12:22

That they put in. Yeah. Let's talk about that a little bit. You got over here, you got into real estate. What was your first deal like, what did that look like for you when you said, this is what I want to do?

Dani Beit-or:
12:33

The first, I think this has been a while. The first day that I did, when I come, came over, I think, bought just another rental property in south of Fort Worth, Texas. Brand new property from the builder. Probably 142,000 ish. It's funny. I haven't I don't have that property anymore for years, more than 10 years. But like it'll be interesting to prospect Hill Drive 2606 probably.

Average Joe Finances:
12:58

Oh, see, remember the address?

Dani Beit-or:
12:59

I'm, and I'm, now I'm curious to see how much it's. It's worth, it's probably worth it. The three hundreds by now. That would be my guess.

Average Joe Finances:
13:05

I wonder what year was this that you purchased it?

Dani Beit-or:
13:07

2004, I believe.

Average Joe Finances:
13:09

Okay.

Dani Beit-or:
13:09

Probably, yeah. 2004.

Average Joe Finances:
13:12

Yeah. As real estate was on, it's boom, right?

Dani Beit-or:
13:14

Yeah.

Average Joe Finances:
13:15

Early two thousands.

Dani Beit-or:
13:16

Yeah. Just kinda getting to it that little house I bought in Phoenix, probably around 2005, I refinanced it. For the second time, I wanna say. And that little house purchased four more properties for me.

Average Joe Finances:
13:30

Wow.

Dani Beit-or:
13:30

Just by refinancing, pulling cash out. Yeah. Then I bought another one. I bought a bunch. I can't, I don't even remember all of them at the moment, but I bought a, I remember I had, I bought another one, east Orlando with a tenant inside. The tenant has been there for a long time and it's funny that property in East Orlando, again, it's a middle class even, I would even say maybe lower middle class community, small age o a, 1400 square foot, four, two with one car garage on a corner lot. Nothing fancy, I mean nothing. Just a nice single family home. Nothing exciting. That house is probably, I bought it for 190. 180, 190. That house is worth 350 now. It has it, it had over the years, three tenants, so we're talking about 2005 to 2017 years. Three tenants.

Average Joe Finances:
14:25

That's pretty good retention right there.

Dani Beit-or:
14:28

Unbelievable. Not all my stories are like that, but that's definitely one of them. It's again, you would think that I've done, I perfected all the decisions. No, I just bought a, I knew one thing. It's a good area. It's a good area. I had no idea it'll hold tenants for such a long time. I don't think ever any of my Micro tenants, really sweet people. A couple, they were having some issues just towards the end of Covid, right? She lost her job, he lost her job, so I was actually carrying everything for about three months. And then they started, got a job, started paying. So that was the most difficult thing with this house was those three months of the towards the end of Covid that they had went through a rough patch. And I said, listen, you guys, I know you are. I know you've been great tenants. Never, always take care of the property. Let's just hang in there for a month or two or three and reevaluate. And they're, and since then, they already paid and the rent was increased, and then they made up every dollar they missed. They made up over time. It's really a really good story, in many ways.

Average Joe Finances:
15:28

Yeah. All right, Danny, so listen, this is what I wanna do now. I want to gear this conversation towards, The current economy and what it's looking like right now. Okay? So there's a lot of uncertainty right now in the real estate market. Now, the reason why I asked you when you started investing over here, right? That it was 2004, 2005 timeframe you were buying properties. Obviously 2008, 2009 happened, right? So you went through that. You went through a down market, and it looks like you survived it. So what was your experience when that happened, when 2008, 2009 hit and we had that crash in the real estate market? How did you overcome that?

Dani Beit-or:
16:09

Okay, that's excellent question. So first of all Mike, what you only see my head. You don't see my arms. My, my heart. You don't see all the scars that I have from those years. And I do have, not physical scars, but financial scars, wallet scars, emotional scars. So it, I was in the middle of that storm. With many properties, with a lot of my clients. So this is not something that flew by my, by me, I was like in the eye of the storm for sure. So when the storm start dying actually, let's put it this way. One of the things that I was, I think I'm lucky with, I was able to understand early on what was going on. So early on I could see things are going like very early on, and I'm saying I'm using, I'm saying, or using early on because I've seen people around me that. We're fighting tooth and nails to kinda weather the storm. And what the decisions I made early on such as letting some properties go for closure actually helped me rescue others. And I've seen other people not doing it a year later, maybe a year and a half later. Losing more money because of it. Only to come to the same realization much later. So that's actually hurt them even more. Why did I have this early epiphany or understanding at the 30 year old, beginner investors? I have no idea to this day. Just a good common sense. A good grasp of reality. I don't know. But that's how I operated. And that actually was turned out to be smart eventually. Also, When you think about, people talk about foreclosures, I think a lot of people know that when you run through a foreclosure, it takes seven years until the banks wants to touch with, give you a loan again. It's not necessarily true banks were willing to work with me much less than seven years, but to really clear your credit report with the crappy stuff from the foreclosure for those crisis years, it takes time, right? So the sooner you start. The sooner those items will be out of your report, right? Sooner it takes a long time. But so that was, that's something that I only realized many years later. Ah, another smart thing that that happened in that case. And I did let some property go, for foreclosure. Not all of them. I hang on to the others. I fought on some of them with even legal actions. Personally. My income was, which was real estate dependent, dropped dramatically. So my biggest struggle was to stay afloat. And I had to make a lot of changes, in-house with me and my wife just to get by. So they were not tough easy years, but as soon as, not as soon as you prob I, as I saw things are dying out in the crisis mode, then came back to my, I circled back and I said, okay, I need to start things fresh from the beginning. Alright, let me reevaluate everything in my life financially, everything in my business. And, in many ways the business, my business today is sitting on the ruins or on the devastation that happened through the crisis of 2008. So a lot of the decisions to this day, we're talking about 14, 15 years later, are still. Coming back to the root or the root of the decision, the core of the decision were what happened in the crash of 2008. Even today, we were looking at properties in a new, geography. And I'm like, I don't know. This geography doesn't seem resilient enough for me. Why would I say something like that all comes back to 2008, 2009.

Average Joe Finances:
19:28

You got just from that event.

Dani Beit-or:
19:30

Yeah, exactly.

Average Joe Finances:
19:32

Yeah I asked because, I got out of the real estate game after 2008, 2009 because I had to short sell a property. And it financially put me in a very bad place, and it took a long time to recover from that. And it was.

Dani Beit-or:
19:45

Hello Club member.

Average Joe Finances:
19:47

What's that?

Dani Beit-or:
19:48

Hello Club member.

Average Joe Finances:
19:49

Yeah. But it was, so I stayed outta the real estate game for a long time until just till 2019 when I started getting back into it. So that's why I wanted to ask you about that, because a lot of people right now are like, Hey, okay. We're seeing some trends that feel very familiar, high debt. And lower income people losing their jobs it's looking rough out there. The economy's not doing so hot. We've seen the stock market tank a couple times. We saw crypto rise and fall, right? So with all things being said, real estate was still going pretty steady. Now we're starting to see some of these prices drop, right? But. Nothing significant, right? Not like 2008, 2009. I'm curious, do you think that's coming? Or do you think we're just slowly bringing it down and managing it better because of our past experiences?

Dani Beit-or:
20:47

Okay so here's my personal opinion, super biased opinion. I love real estate. 20 years in real estate, I've never stopped buying, right? So no matter what the economy was doing, maybe there was a period of reevaluating, reassessing, but few months, right? So just keep that in mind, to be completely open and honest about how I operate. But I think there's a lot of mixed signals, a lot of mixed messages out there. You read that companies are letting, firing employees and then when you actually read behind the title, that the numbers are not that big. So even Walmart announce they're letting 2300 employees go 2300 out of a 1.3 million people. That's nothing. That's more than they know that's what they normally let go, just people. That's probably what people, just leave their job in Walmart on a weekly basis or monthly basis easily, or even less so 23 is such a small number, right?

Average Joe Finances:
21:41

Yeah.

Dani Beit-or:
21:41

To a 1.3. So that's mixed signals, right? And you hear something like that in multiple companies around the, which I think we're going first of all through a correction phase. I dunno if a crash. We went up like we were accelerating so fast. Now we are slowing down. Makes super sense, in the economy, that's obvious. Then a lot of people, at least the ones that I come and talk to us they think that they can go out there is oh, real estate is slowing down. Prices are dropping. This is a buying opportunity. I should be a buyer. Those who understand it which like myself. Yes, but let me be, let me surprise you a little bit. We are still competing on houses, multiple offers, not multiple offers. Like a year ago of 10 offers or 20 offers. Three offers, four offers and good houses. And then when we run searches on different areas that we invest in, And we look at the properties that we like to buy after we filter things out. The inventory is so small, no wonder it's gonna be, multiple offers. It's a very strange market, real estate wise out there. First of all let's keep in mind every metro is different, right? Austin is maybe going through a rougher correction because it also went up like crazy. Then I don't know then. Nashville or maybe Tampa, right? For that matter, or Hawaii. So every market is.

Average Joe Finances:
23:04

It's very market specific.

Dani Beit-or:
23:06

Yeah, exactly. So some markets are declining faster, some markets are de declining very slowly. Inventory demand, supply and demand dropped a lot on both ends of it. So that means that, but still there's more demand. Much higher demand than supply out there. I'm having, in just the past few days, conversation with different teams and different realtors I work with, and they're saying, what are you talking about? There's such high demand for housing we can keep up with the demand. We only think that in our market, and this is something, a repeat conversation in multiple areas, prices will start going up again cuz it's crazy. Supply and demand is the basic, force here. And that dictates a lot of what the market will do. And that's where we are in terms of real estate. We think it's nobody's market. It's not really a buyer, it's not really a seller. But we are seeing, like when we are out there making offers, It's challenging. It's challenging to find and it's challenging to buy, and we have to spend a lot of time being creative, to make it work. So if someone is listening saying, oh, market is slowing down, it's an opportunity for me to buy, it is, but it's not a great opportunity as you may think, because out there. There's still low inventory and you will be fighting. And again, if you are in I don't know, in Bozeman, Montana, you may be in a different situation than if you're buying in Orlando, Florida. Completely different situation in inventory wise and demand, or demand wise. So it's tricky. It's very interesting. It's a nobody's market at the moment and it could very soon turn into, again, seller's market because, if you really think about it, the. Correction or the slowing down started July of 2022, so that's about nine months ago or so. And we're not crashing. We're just still slowing down. We're not crashing. So people are like, okay, the crash is coming. The crash is coming. Wait, we've been waiting for nine months. What's going on? They promised me a crash. So it's weird where we are with the market. And it's strange how things now, maybe spring is coming, so we'll see more houses will come on the market.

Average Joe Finances:
25:14

I've been saying it too, like I didn't really think that we were gonna have a crash, like 2008, 2009. A correction. Yes and we're seeing that, but it's a longer term. Like correction versus a rapid decline. And what, I'm also an active real estate agent out here in Hawaii. And what I've told my clients is, in our specific market, we saw this spike in prices during the pandemic and, just like everywhere else did. But Hawaii's pretty unique. Ices don't drop here that often. So we kept going up and up and up, and then we got to a spot where it dropped and then guess what happened? It dropped a little bit. And it plateaued.

Dani Beit-or:
25:49

Yes.

Average Joe Finances:
25:50

And I was telling everybody, I said, look, it's plateauing right now. We're flatlined. This is the time. Cuz it's gonna start going back up. What happened? Guess what? Two months later it's back up to where it was before and then it's continuing to go up right now as I speak. It's again, market specific. So you have to know the specific market that you are investing in, right? So that's, I think that's a great point, and I'm really glad you brought that up. Now, let's say, real estate investors now, they're like, Hey, okay, I know what market I wanna get into. I studied it. This is where I want to be at. What would you say to them to mitigate risk? In this environment that we're in right now with this slow correction that's happening around us. And also to mitigate, because again, none of us have crystal balls. Of course. But also, how do you mitigate it if there is that sudden drop?

Dani Beit-or:
26:38

Of course. So the way we are trying to go about it is to really, when we make offers and, and how, like if we value as an investor, right? Investor, not a homeowner. I'm looking at the numbers now. I know with the high interest rate, the numbers are gonna be tough on the cash flow, right? So what I used to have, maybe, $2,500 realistic a year after everything in cash flow, I'm now maybe 1500, right? Which is still okay, but it's not where we are. So the cash flow is tough. So the first thing I'm telling my clients is listen, Look at the property as is waste on how we analyze it today with today's current rate. And then once you've got everything you know, in order and you are maybe just okay with it, take a step back. Change the interest rate from 7% or six and a half to five or five and a half percent. Let's just evaluate for a second in a normal interest rate, environment. And now when are we gonna be there? I don't know. But my experience of being in real estate for 20 years tells me that there's very lightly, somewhere in the next year or maybe two to four years, we will go down again, not down to 3% and three and a half, 5%. Five and a half. And now look at the property at five and a half, right? I'm making, an educated guess. How are the numbers now? Oh, the numbers now are look great. Okay, so let's assume in the next 3, 4, 5 years, it's gonna be tough on cash flow and then you'll have an opportunity to refinance and get better cash flow. But along the same time, let's try and remember one thing you're buying now, the sooner you buy the better and there's a good chance properties will start climbing back up even slowly. I'm not talking about what happened in the craziness, right? Just right. Slowly resuming, going up. And the second thing is, Let's see if we can try to mitigate the cashflow with a little bit of equity. It's tough cause there's not a lot of inventory, but can we get find a house that maybe we can buy for 10, 15, maybe even $20,000 below? Remember I'm talking about the 200,000, $300,000 home. How about some. 10% below market, right? Which is not a lot, but the reason I want to buy just a little bit below market, I wanna buy a lot below market, but it's not unrealistic. So maybe like $15,000 be below asking or market value. It's for two reasons. First of all, it helps me the cash flow. Second, psychologically it tells me, okay, I have a little bit of buffer if the market crashes, we still have the mindset. I'm mitigating on that and it's a way for me to mitigate with the with or to compensate for the lack of that cash flow. So that little buffer, little gap, if I'm able to get that. And we are not always, but we are helps with that mindset. So the lot of it is psychologically thinking about those things, evaluating them. It's very difficult for me, I think from what I'm seeing for investors to kinda divide and conquer all those little boxes, right? But once you tell them, do one, do two, do three, do four. And even if we get three outta the four, that's pretty good. If we get four to four, amazing, three outta four, it's pretty good. And that's how people are like, okay, now I get it. I see, I understand. And then I also tell them, be patient. Right? There's no rush. Yep. It may take us three months to buy, maybe a month, maybe more. If you be patient and you don't pressure us while you're not seeing anything, it's because it's a tough market and we will help you find the right property for you.

Average Joe Finances:
30:02

Yeah. All real estate investors need to have that buy box, right? What is the criteria for you that works for you? That will make this deal work, right? If it does not fit in the buy box, then you walk away from that, right? And that's one of the things too, like somebody might think, oh, I got this really good deal. If it was just, maybe a little bit less or if I just had a little bit lower interest rate or whatever, like then this would work. It would cash flow and this and that. And sometimes they'll find themselves tweaking things a bit to make it work. And that's when you get yourself into trouble.

Dani Beit-or:
30:37

Correct.

Average Joe Finances:
30:38

So don't set that criteria for yourself and hold yourself true to it. That's one of the ways you're gonna help mitigate that risk. And the other thing you were talking about too was, having that equity piece right? You, if you're able to get it, at a 10% discount, which is fantastic, right? 10, 15%. That's wonderful. If you can do that, you're giving yourself that buffer for these dips that are happening, right? Because they're smaller dips. But again, too, that is also market specific, right? Because there are markets that will appreciate very well and maybe not cash flow that great. There are markets that will cash flow. Fantastic. But they won't appreciate and value that. Great.

Dani Beit-or:
31:14

True. Very true.

Average Joe Finances:
31:15

You have to figure out what it is you are looking for, figure out what your buy box is and stick to that and be consistent with yourself and your actions. Yeah, absolutely. Okay, so what are some of these like important factors that you believe people should be looking at with the market changing so much? We know it's market specific, but what should somebody look at if they're going into a deal like, like the baseline?

Dani Beit-or:
31:42

You already, you just said it yourself a minute ago and this is something, the same terminology I'm using is the buy box and the criteria. And the thing in a lot of investors, what they're doing is the, they like, it's crazy. Why aren't you taking five minutes when you start this journey? You know what, maybe you went to and attended. 20 different real estate meetings online or in person. That's great. At some point, stop, sit down, decide on your strategy. It doesn't have to be long-term rentals, whatever, short-term rentals, flipping house, whatever, and put your buy box together, sit down and create that baseline criteria, which you, me, you mentioned I'm using it all the time and I'm like, it's only gonna take you five to 10 minutes with your coffee in the morning or wine at night. To write those criteria and those criteria. For me, it's like the simple question I have. You, what is a qualifying property for you? Not for me, not for Mike, for you. Size, age, location, I don't know. Price, mortgage. Maybe seven criterias. Maybe 10 criterias. And that should tell you not what's the ideal? Not what the perfect, what is the. If you see this one, you say, this is something I should consider buying, or at least pursue, more research. Most people, they sign up for databases. They go and look at photos. I. Why take a minute, with yourself, set that up. And then when you see looking at properties, you have to see if they're matching what your criteria is. And this is should tell you, I should focus on this one or not. I should move forward to something else or not. And that will help you be more focused on the relevant properties for you and not waste time over just some email. Was that irrelevant? There's always another great deal around the corner. Always. Always, right? Don't worry about it. Forget about it.

Average Joe Finances:
33:30

Yeah. Spot on Danny. Cuz the thing is, if it meets that basic criteria of your buy box, now you're like, okay, this meets the basic criteria. Now you really sit down and take a look at it and say, okay, this is the offer I could put in that makes sense by, this is the number that makes sense and, it might be a lot lower than you thought you were gonna offer. And, the seller might even feel disrespected by it. But at the same time, it has to meet your criteria, submit the offer. Worst thing they could say is no.

Dani Beit-or:
33:58

Exactly.

Average Joe Finances:
33:58

And even if it's completely off the walls to you, you think, oh, I'm, I'm asking for 40 grand off of this, $210,000 property. There's no way they're gonna say yes to that. Who knows? Maybe they're in distress and they just need to get this property off their hands. Or maybe a relative passed away and they have this property sitting here and they just wanna get rid of it and offload it. You never know what somebody might say yes to.

Dani Beit-or:
34:19

You never know. Yep.

Average Joe Finances:
34:20

So I think that's huge. So thank you so much for pointing some of that stuff out, Danny. Now this conversation's been super valuable, especially when we're talking about, how. How the market has been shifting and we're seeing this correction happening live as we talk right now. This episode will be out in about three months, right? So hopefully we've seen some changes, but if not, like this is so everybody knows. This is April when we're talking about this.

Dani Beit-or:
34:44

Meet april, 2023.

Average Joe Finances:
34:46

Spike in the market. We didn't know about it. And my crystal ball doesn't tell me anything. It's just cloudy.

Dani Beit-or:
34:51

Broken.

Average Joe Finances:
34:51

It's broken. But yeah, so this has been great. Like I, I've gotten a lot of value outta this, and I'm sure my audience has too. So what I'd like to do now is transition this into something I call the final round. Okay. I'm gonna ask you the same four questions I ask every, that comes on the show, and it gives us a good idea of how you are when you get asked pretty tough questions. You ready to go?

Dani Beit-or:
35:08

Okay. Yep.

Average Joe Finances:
35:10

All right, Danny Now you've been investing in real estate for a while, so I'm sure throughout that timeframe there's plenty of things that you look back and be like, man, I wish I could have done something a little bit different about A, B, C, or D. So what would you say is the biggest mistake you've ever made in real estate?

Dani Beit-or:
35:26

I think that one of my biggest mistakes was overleveraging buying as many properties as I can, and looking back, you know what? I wish I just bought half the number of properties, less leverage. I like to look at it as I want every property to be an independent of me. Meaning if I lose my job and I cannot work, I don't need to feed the alligator as they call it. So I want every property to be independent of me, and I have. By design early on in my career, highly leveraged negative cash flow. We wanted, I wanted to buy as many properties as I wanted, and that turned out to be not a good thing. I wish I've not done that.

Average Joe Finances:
36:06

Yeah, absolutely. Thank you for that. Thank you for your transparency. Appreciate that. That's just the way it goes with a lot of us, right? You get that time that you make a what you think is a small mistake and it turn it snowballs into something else. So over-leveraging yourself is that could put you in a really bad spot, especially if you did it around. 2008.

Dani Beit-or:
36:25

Yep. Absolutely.

Average Joe Finances:
36:26

Yeah. Hey, so I appreciate that. Now, the next question, Danny, ties into that one. These all kind of tie into each other. And that is what is something that you've learned that you wish you knew when you first started out?

Dani Beit-or:
36:38

Again, lesson learned from the crash of 2008 will come it seems like it's a repeated theme here. For me it's all my life is part of it. The way. I started analyzing and evaluating properties in a very comprehensive way after the crash of 2008. When I look at what the dec, how I made decisions before the crash and after this is not even amateur re back then. And what what a comprehensive way to, with the Excel and how we look at properties, how we make decisions, how many decisions are going into each and every property. Knowing that maybe some of them will fail, and then if we have multiple important decisions in the decision. Process. And let's say out of 25 important decisions, even five failed, there's still 20 smart decisions that are holding everything. And when I say something fails, it doesn't mean that five decisions completely failed. It just means I thought you would be X. And it's only half X. So it's still half successful decision, half failing. But there are still 20 other decisions along the way that support that decision on that property. I'm using very, abstract, but the whole idea is like, there's not a single or two or three-legged decisions on every single investment property that we make. It's like many legs allowing not of them, not all of them, to obviously we don't know what will happen, so we're allowing some of those legs to not live up to their. Promise, so to speak, and we're still okay. And that's really important.

Average Joe Finances:
38:03

Yeah. So sounds like you wanna be like a centipede or a Millipede, right? You have all these legs that carry the body across to where it's trying to go from point A to point B. I like that. All right, Danny, next question is, do you have any tips or tricks that you would recommend to someone that is just getting started out today?

Dani Beit-or:
38:22

Yeah the first thing I would say is we already mentioned about setting up your criteria. The second thing I wanna mention is like, what not to do, right? So there's a lot of things that I think people are doing and they're not realizing they're doing it. And that's, for me, a shame. Don't listen to conventional stupidity. And when conventional stupidity, there's a lot of knowledge out there that people are copy pasting without knowing. For example, someone comes to you and say, you only use the 1% rule. No maybe not. So no, the 1% rule, it's not always correct, actually many times it's incorrect. So I call it conventional stupidity. Another example would be always buy with an LC. No, some instances are requiring or good for an LC and some are not necessary. So it's not a yes or a no. Okay? So those things that people are just repeating and they're not clearly thinking for themselves. The way I like to suggest for people a tool, how to evaluate a suggestion and advice. Ask the person who's giving you your the advice, what's their experience? When someone tells you only you use the 1% tool and they've never invested in their life cuz they heard it in multiple events, you got a question that the advice, right? But if someone is telling you, always use the 1% rule. I've done thousands of deal and this always works still until yesterday. I will value that advice, a whole differently, right? So ask that person, oh, how long have you been investing? How many properties you have? Cause a lot of people have been investing for years that they haven't had a single property. They're just dancing in the niche of investing, right? So value the advice based on the person who's providing in their true experience. And don't just take blank answers or conventional stupidity.

Average Joe Finances:
40:04

Awesome. I always like using metaphors, so it's don't listen to the parrots. Listen to the person that gave them that phrase to say. So the person that has that experience, that has done it through the school of hard knocks.

Dani Beit-or:
40:16

Exactly. I love it.

Average Joe Finances:
40:17

Perfect. Yeah. No, that's fantastic. Okay. The final question, Danny, is an opinion-based question, and it's do you have a favorite business investing or real estate related book or podcast or both?

Dani Beit-or:
40:32

Podcast. I've started listening to you as getting ready for our meeting, and I'm really enjoying the lot of content. And you know what I love about your podcast, it's not just real estate, it's business advice, it's it's marketing. So that for me, I go through a lot of a lot of podcasts. That's my thing personally as a listener. As a listener. And there's a lot of am I allowed to say crap out there? A lot of noise, which is hard to hard to filter. So for example, I don't want to name names, but I want to not dimension one. There is a big real estate forum out there. Everybody knows why the biggest one of them all. And a lot of the podcast they're putting, they're using a lot of conventional stupidity. There's a lot of blank statements, right? If you're listening to that, you are not gonna be successful, in my opinion. You gotta go to the niches. If you are, don't listen to real estate investing. Listen to the niche, the one who's doing rentals, the one who's doing Airbnbs, the one who's doing self storage. Find those niches and then listen to one of those. If you want to get really knowledgeable. On that niche and find the one who will provide quality like yours, the average o podcast, which is covering a lot of bases. So that's, for me, more important than just a specific one. There's one specific as you get that I don't really like.

Average Joe Finances:
41:48

I appreciate I appreciate your kind words there. And, yeah. It's important to listen to the stuff that you can relate to, right? The things that are gonna help you take action, right? Because you could sit here and listen to podcasts all day and watch YouTube videos, read books, but if you don't take action and do something about it, or do something with this knowledge and information that you obtain, yeah, then you're just failing yourself. And then all that you're doing right now that you think is helping is meaningless.

Dani Beit-or:
42:16

Yeah. Yep. Exactly. I love that.

Average Joe Finances:
42:18

I definitely appreciate that. Yeah. Okay, so Danny, that is it for the final round, however, I have one more question for you, and it's the most important question of this podcast, because we talked about a lot of great things. You've added a lot of value to our audience here. It's not every day that you talk about the corrections that are happening in the real estate market. And different strategies to mitigate some of those risks associated in a fluctuating market like we have right now. For one, I wanna say thank you for all the value that you added to me and my audience today. I genuinely really appreciate that. Now this question, Like I said is the most important one because people that have listened to this are gonna say, Hey, we wanna know more about Danny. We wanna know more about what he does. And I understand you help other investors and so I wanna get that information out there for everybody to to check you out. So where can people find you? Do you have a website, social media, anything like that you can share with us today?

Dani Beit-or:
43:14

Yeah. Online we are easily found under our web identity my alter ego. It's called Simply Do It. So anywhere you'll put, Simply Do it Real Estate or Simply do it dani you'll probably land in one of our pages online pages, social media. Another, the website is easy. simplydoit.net. So if you want an easy way to find us. Just look for, simply do it. And hopefully you'll find the right page that should be working very nicely. There's a lot of content that we put out there as well, teaching, educating, I always like to participate in and thank you for that, Mike, for that opportunity. Because I think this is, I always believe that sharing and letting people know, that, Helps others. They'll succeed. They'll succeed. They may come and wanna work with us or not. It doesn't matter. It's just about succeeding and doing, like you said, taking action. Very important.

Average Joe Finances:
44:05

Yeah, absolutely. Thank you so much for that. I'm gonna make sure that I have all those links in the show notes to make it easy for everybody so they don't even have to do the Google search. They can just copy and paste or click away and you can find more find out more about Danny and his his site and what he does to help educate other investors in these. Crazy times that we're in right now. Again, Danny, thank you again so much for taking your time outta your day to, to provide so much value to me and my audience. I really appreciate it.

Dani Beit-or:
44:32

Thank you very much. Pleasure. Thank you for having me.

Average Joe Finances:
44:35

Absolutely. And hey, I also want to thank all of my listeners for joining me in our special guest, Dani Beit-or on the Average Joe Finances Podcast. Make sure you go leave us a five star review and tell us what you liked about today's specific episode with Dani. Aloha from Hawaii and have a great rest of your day.