Episode 30 – JD and Annabelle Monroe on The Military Millionaire Podcast

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Episode 30 – JD and Annabelle Monroe on The Military Millionaire Podcast

00:00 - 05:00

David:

Hey, what's up military millionaires. Today's episode is super exciting.

Today, JD Monroe and I talk about how we went from blowing all of our deployment money and making all these poor financial decisions to real estate investing joint ventures and just successful financial futures.

So if this is your first time listening, thanks for joining the community. This podcast is produced every week for your enjoyment. Show notes are found at frommilitarytomillionaire.com/podcast.

Now relax and enjoy the show.

Intro:

You're listening to the military millionaire podcast, a show about real estate investing for the working class. Stay tuned as we explore ways to help you improve your finances, build wealth through real estate and become a person that is worth knowing.

David:

Hey, what's up everybody? It's Dave here. And I'm here with JD Monroe who is an Air Force active duty Air Force Station out in Vegas right now. And he's a pretty big time investor that I've been following on Facebook. We've been talking back and forth, we get along really well. So I was like, man, gotta get you on the podcast. Let's do it.

And here is JD tell us a little bit about yourself. Oh, and welcome to the show.

JD Monroe:

Hey, thanks. I really appreciate it.

Before we get into my story, I just want to tell you how much I appreciate what you're doing. For military investors and real estate investing, I think it's super important that we get the military involved in taking control of their finances. And I think you're doing a great job at that. So I just want to make sure that you know that me and my wife are really appreciative of the stuff that you'll do every day.

David:

Oh, well, thank you. I like hearing that. It's not wasting my time.

JD Monroe:

Well, it'll be something for your kids to watch. Even if nobody else does.

David:

Yeah, there'll be like, what was up with that mustache in Hawaiian shirts Dad? You were so weird.

JD Monroe:

I wish my dad had a Hawaiian shirt and mustache.

So, um, yeah, well, it's just if we want to talk a little bit about my story, I came from a pretty small town of, you know, middle class background and joined the AirForce, because going to college wasn't really an option. And I didn't want to take out student loans. But once I was in the Air Force, I didn't really have any financial literacy at all. And in 2005, I went on my first deployment to Iraq, and came back from Iraq and had you know, $10,000 saved up, I spent the about one year from that time that I got back with $10,000, blowing my money on DVDs from the beer and clubs. And I bought a $2,000 TV and a $2,000 truck. And a year later, I was in an airport ready for my second deployment. And I had to check my bank account to make sure I could buy a drink from the airport.

And at that moment, I realized like, what the heck did I do with $10,000? It's just vanished into empty beer bottles. And and from that point on, I started looking and thinking like, what am I going to do, I knew that I wasn't going to let that $10,000 disappear again. And so when I got back from my my second deployment, I went to my local bank in my hometown while I was on leave and said, Hey, I really want to invest, what can you guys help me out with and they said, Oh, we got this awesome CD for you at a 5% interest rate. But you gotta lock it up for two years. And because I didn't know any better, I didn't know if 5% was a good interest rate or bad interest rate, I just knew that I didn't want to leave that money in my bank account.

So I put it into the CD and just left it there and went on about my business and didn't pay attention to my finances after that. Once my CD rolled over a couple of times the crash in 2008 happened and my interest rate went from 5% down to point 01 percent. And I realized I needed to do something else with my money. So I started looking into the stock market because that's what everybody I knew of was doing. And I couldn't wrap my head around like what makes a good company what makes a bad company? Why does this stock go up and this stock goes down? I started reading all the books I could looking at all the forums that I could and trying to interact with people who are actually doing the stock thing and that led me to the rich dad poor dad book which completely changed my life and the way that I view the world I look at the world through a different lens now because of that and Rich Dad Poor Dad led me to real estate which led me to bigger pockets. And the bigger pockets you know kind of changed my life and set me up on the path to Real Estate and you know, that's that's kind of how I got my start.

05:00 - 10:00

David:

Man, that's awesome.

I was really hoping like, this is such a terrible thing. But I'm kind of glad that you said you blew your $10,000 from deployment because I would have felt like a schmuck if you were like, Yeah, I was this young guy and I was right out of my first deployment and I started buying real estate and I made all these great decisions. Because Yeah, I bought a Harley, I totaled like two years later.

And a rifle that's not legal in any of the states. I've been stationed since so it just sits in my parents house.

JD Monroe:

Well, I mean, you'll be out before you know, before you know it, and you can live wherever you want.

David:

I'll be able to shoot it again. I need to just sell that dang thing. But then I play with it. And I'm like, Ooh, this is nice.

JD Monroe:

It gives you a good reason to visit your folks.

David:

There you go.

So okay, so you get started in real estate, which, you know, I mean, I kind of played around with the stock market, and I didn't do so hot either. And then obviously, Rich Dad, Poor Dad, bigger pockets, you know, that part is a solid framework. But okay, so you get started? And what did you start doing as far as investments? Like, how did that? How did that next step look?

JD Monroe:

Well, it was April, I think it was April of 2014. I started getting in bigger pockets. And I started reading everything. And there's a whole bunch of terms and things like how do you calculate ROI? What is Capri? All those kinds of questions that I didn't understand, but bigger pockets, you know, have that awesome form with a bunch of people who had already asked all these questions, because there's nothing in real estate that's new. So I would look up the term. And then while I was reading the definition of whatever it was, if there was something else I didn't learn, I'd open a new tab on my computer and search for that. And I just did that.

And so sometimes I would have like 35 tabs open. And I would read it, I probably read for about three hours a day on bigger pockets, which really sucked my life away. And that started in April. One of the things they preach on bigger pockets is don't get paralysis analysis, or analysis paralysis, rather. And so I was really convinced that I needed to take action.

So I started looking at HUD home stores and found a foreclosure in my area that was only about five minutes away from base. I talk to a really good guy. He ended up being a pretty good mentor of mine, he was a retired Master Sergeant who was also a real estate agent in that area and had you know, 30 or 40, single family homes, did you know a dozen flips a year, that kind of guy. And I called him up and he came over to the house with me, we looked at this house and he's like, I can't believe that you found this before me. If you don't put an offer in I will, if you put an offer in to get it accepted and don't like it, I'll buy it from you for more than what your offer is. And, you know, I'll help guide you on the way so that, to me, was a huge safety net. And that's one of the reasons that I try to offer my services and my help to other aspiring real estate investors because this guy literally held my hand with the purchase and walked me through it and it helped me a lot more than a realtor wouldn't, you know is required to.

David:

Yeah, that's awesome.

JD Monroe:

So after I purchased the property, I was pretty confident that my wife was pregnant with our second son so she didn't have a lot of energy to come and help do the rehab. It was a disgusting house. It needed a lot of work. One of the ladies that I work with was a retired Chief Master Sergeant, and he was also a home inspector and they owned 12 properties in town. They paid cash for everything. He was a very conservative investor but he's a really really smart guy.

He came over and literally worked on that house with me for the entire six months we were having it. He let me use all of his tools and showed me how to do plumbing and how to do some of the electrical work. I didn't even know how to patch a hole in the wall. And he showed me how to do everything like hold my hand. It was his name's Matt. He's a super great guy. Really, really good mentor of mine.

And we rehabbed that whole house. The way that we purchased it, I purchased it with an owner occupied by a construction loan, and put $16,000 in materials into it. And we did all the work ourselves except for Hfac and some of the electrical wiring from the box stuff.

10:00 - 15:00

JD Monroe:

It was the total was 16 Grand i refinanced it within internal refinance VA loans. They cut me a check for 19 grand. So I got all my money back out of it plus a couple grand. And then I lived in it for about a month and a half before I got orders. And so we moved out. And that was the intention. I knew I'd been at my first base, which was Barksdale, for 10 years. And so I knew, like, orders are on the horizon, but I don't know when they're coming exactly.

And so the intention was to make that a rental. And we rented it out about three days, three days after I left and it's been rented with the same tenants, they pay about $1,000 a month, I have $100 a month property management, I only have cash flow about 120 bucks on this property. Now, my standards, my deal standards are a little bit higher. And I want more cash flow for my deals now but at the time, and I still believe that that was a really, you know, a really solid deal for me, and I got it and now it's kind of you know, an infinite return because I got all of my money back out through the VA refinance.

David:

Yeah well and most importantly, you learn more by having someone walk you through everything and the rehab for six months, then you probably have on a lot of your other deals because now you're probably able to be a little more hands off because of that one.

JD Monroe:

Absolutely. And I'm kind of a very, like I need to know every single part of the business which is sometimes a benefit and sometimes comes at a detriment because really, business owners don't need to know every single thing. But that's what I needed to feel comfortable to start doing this to take on this monumental real estate thing that looks so intimidating. I needed that security through the knowledge of doing that first deal and having the help with the rehab and purchase and refinancing and that stuff.

David:

I'm blown away by the fact the Air Force let you homestead for like 10 years. My first 10 years I've been stationed, Okie San Diego, Missouri and Hawaii intent in the first like eight.

JD Monroe:

Well, that base in particular at that time, it's a little bit different now but at that time it was known for like I knew a guy who was stationed there as an airman. He cross trained into Kadam which is our gun range guys. And got stationed back at Barksdale, and he did his entire 20 years at Barksdale, and he was from that town too.

They tried to get away from that now. And really, as far as that goes, it probably hasn't been the most beneficial for my career because I didn't have that breadth of experience that you get in those first 10 years. But I don't know if I would have gotten into real estate if I hadn't stayed there. So I'm happy that it worked out the way that it did.

David:

Yeah, no, that's awesome.

Alright, so you buy this house? And now I just saw your Facebook post today. So I'm just gonna ask, like, because I saw you did a house, you did a house, you got some duplexes, you're working fourplexes. Now you're working on something bigger. What has allowed you to scale so quickly in the last couple years?

Surprise question that wasn't on my list.

JD Monroe:

No, no, no, that's a really good question. I and I got a perfect answer to it. It's a little bit like making the decision that this is what we wanted to do. That's the fluffy answer.

The real answer is, when we PCs to our next base, which was Montana, I bought a duplex and started rehabbing that, but because of our duty schedule, I wasn't able to devote as much time to rehabbing the duplex as I had on our first house. So we had to use a contractor. And because we use a contractor, it cost a little bit more money up front, but it dramatically decreased the amount of time through rehab and so that allowed us to get paying renters into that property sooner which allowed us to bank our cash flow and save up for the next down payment. And actually, the next property that we bought was another duplex that we paid cash for. But because we became comfortable using contractors and and outsourcing the work that's allowed us to put more on our plate, and then we went from that duplex to another duplex, which I walked to the initial walkthrough I flew back to Louisiana which is where our primary market is in Shreveport and Boulder. And I did a walkthrough on that and then I flew back to Vegas and forgot about it and then there was a huge price reduction from the wholesaler that we deal with in Louisiana by 25000 and the property just barely didn't meet my criteria at 40 something 1000. And then when she dropped it down to 25, I knew I snatched it up right away, because I knew all the numbers would work.

15:00 - 20:00

JD Monroe:

And then I never haven't even been back to that property. Since we purchased it, I had the contractor do all the work, send me videos and FaceTime. I'm not saying going there blind and just hope that it's being done right. But being able to rely on contractors and having a network in the area that you're investing in, helps with scale. And then the part about making the decision is we decided if we're going to continue to increase our portfolio size, that we have to find alternate means of purchasing the properties because even if you were Warren Buffett or Mark Zuckerberg, eventually those guys are going to run out of their own money. So we had to start thinking about ways that we could use other people's money to help us purchase the other units.

And so then we started looking into the owner finance options and partnerships, and private money lenders and all that kind of stuff. And that's kind of where we're focusing most of our attention now. Because we feel like we have a pretty good grasp on the contractor real estate agent team.

David:

Yeah, the system is huge for being able to scale. And I like that you mentioned not just trusting the contractor blind but facetiming. Because David Greene, who wrote the book on long distance real estate investing, talks about having his property managers realtor poke their head by every now and then just to make sure things are being done.

Because the reality is, you know, stuff happens, even even the best of people get stuck in a rut sometimes and are almost forced to do things they wouldn't normally do. Or shoddy work or whatever. You want to have a system in place. But yeah, being able to trust someone and the fact that you're able, like, you know your numbers well enough that you're like, yep, buy in that. We'll figure it out as we go. That's huge. I mean, that's awesome. Which is, which is something that I would say to when I, so my first property was outside the duplex, I lived on one side. And living next to it, I found that I was always like, oh, man, the tenants are cleaning their house, or they let this crap out, or it looks gross, or what are they doing to the house, you know, like, but like, I'm a nosy person, but like, well, I wouldn't, I don't like I don't know how I feel about someone treat my house like that. But I move away. And all of a sudden, like I spend an hour a month on my box.

I get my report for my property manager. And I put it in my little Excel document for bookkeeping, because I just have an outsourced bookkeeping yet that hour is the only thing I do with my properties at all, most months. And just because I was forced out of system, and now I'm like, oh man, I'm never going back. Like now I'm like, man, if I ever live in another house hack, which I fully intend to do, I'm not even gonna tell them, I own it, I'm just gonna pretend on another tenant, and I'm gonna tell the property manager like, they do not find out, do not tell them.

JD Monroe:

Yes.

David:

Gonna mind my own business. And then I'll read them out to the property managers, you can be bad yet.

JD Monroe:

From a lot of the people that I've talked to, I feel like it's almost in maybe this is just the way that I want to justify it. But I feel like being a property owner in the same town as your property is a disadvantage, because of the emotional attachment that you, when you drive by. And you see the blinds and the front window are broken, that sends something to your brain that says this person is not taking care of my property the right way. And I don't you know, out of sight out of mind, maybe that's what it is. And I'm not saying don't pay attention to your investments, because I'm kind of a control freak. But it's almost like I feel as if I have the advantage of being removed. So I don't have to deal with the day to day problems that arise because, you know, I also have a good management team in place.

And I think I think that's a you know, they talk on bigger pockets, they do talk about an unfair advantage, and we have so many unfair advantages being in the military, whether that's our leadership skills, our VA loan, our ability to, to, you know, just see the world and like, you know, realize that in Hawaii, there's houses that you can't afford, even with dual military BAH and then there's, you know, houses in Louisiana that you can literally buy for pennies on the dollar. And, and just that experience, there's so many unfair advantages of being in the military and one of them is I don't have to live in the same town as my properties.

David:

Yeah, there are a lot of advantages. People think, you know, I just saw yesterday on BiggerPockets someone posted something like, Oh, I'm stationed out of state or actually I think he's out of the country. You know, what can I do? Because I can't get started because of XYZ and I'm like, actually, like, I started to write this really long post and then I finally was like, Okay, I'm gonna give you some highlights and then just shoot me a message because I can't you know, if I say like, Hey, here's a an article I wrote BiggerPockets is gonna be like deleted.

JD Monroe:

Yeah.

20:00 - 25:00

David:

And if I say, hey, shoot me a message and let's talk, you know, then I can let them know. But man, there are so many opportunities out there for us that you know, I mean, and the funny thing people think, Oh, your military doesn't make any money like, okay, you're right, we don't make millions of dollars, but we also don't pay very much in taxes and we get all these awesome allowances. And, yeah, there's so many advantages, but Oh, sorry.

JD Monroe:

I was just gonna say I have. So this is where you and I have a little bit of a disagreement. But I want to clear it up that you asked, you know, do you make enough money? Or would you say that you make enough money? My answer is always No, 100% of the time.

And I'm not saying that we don't make a lot of money. I'm not saying that. If you don't if you use your money the right way. You can't, I'm just saying that. I'm more valuable than that. And I want more income. So it's not, we're not that far off. But if somebody asked me, Do you make enough money? My answer is always No.

David:

I would agree with you on the mentality of like, my time is worth more than this.

JD Monroe:

Yes.

David:

Especially now that I'm doing some stuff on the side where I'm like, man, my time is worth a lot more than this. Because in the three hours I did this. Yeah, yeah. Anyway.

JD Monroe:

I agree. But..

David:

Yeah, I don't, but I also, whatever, I'm not gonna say that, because that doesn't have the right effect. I'm just kidding.

JD Monroe:

Well, I will say you make a lot more money. If you don't spend it on Harley's or $2,000 TVs, or DVDs and beer, you make a lot more money. If you don't buy that stuff.

David:

It's always the expenses that kill us. Always.

Alright, so hey, I want to prompt you, because we talked about this before recording, but we wanted to talk about joint ventures. And I would love to hear your thoughts about it.

JD Monroe:

Alright, well, our most recent deal that we closed was a 10 unit, which was a duplex and two, fourplexes on the same property, or the same lot in Shreveport, Louisiana. And that property was a little bit too big for what we could take down on our own without having a huge surplus of cash at the time. And we negotiated an owner finance, lease purchase deal with the owner, and it ended up where we were going to need about $45,000 cash to close the deal. And we didn't have that amount of cash on hand at the time.

So we started looking, you know, do we want to get private money? Do we want to get a hard money loan? How do we want to take this property down. And the thing that made the most sense to us is, we had developed a couple relationships with some good people. And one of them is a girl named Melissa. And she was willing, because she trusted us. And we trusted her to develop this joint venture relationship and come in as 50-50 partners on the 10plex, she put in 50% of money, we put in 50% of the money.

And now you know, we own a deal that was bigger than what either of us could have taken down at that moment on our own. And the reason that I wanted to talk about it is because I think a lot of times when you're starting out in real estate investing, and you're just looking into this kind of stuff, you feel isolated and that you kind of have to do it all on your own. And that couldn't be further from the truth. If you can't, if you can't handle your deal by yourself, there's no problem getting somebody to come in and, and partner with you. And partnerships, you know, can be arranged for a lot of different things.

If one person has no money and one person has all the money. If one person has no knowledge and somebody else has all the knowledge, like there's a whole bunch of different reasons you can you can build this partnership. And the idea behind partnerships, is you want to be stronger together than either one of you would be individually. And if we could get some of our younger military guys or younger investors into the mindset of one, there is an abundance and two, if you partner and build each other's business, it just helps everybody man, I think that's the most important part is like, you don't have to do it on your own and you can be stronger working with a partner.

David:

Absolutely.

Although, you know, my deal may not have ended quite as great as yours yet.But my biggest deal to date has been with a partner and again wouldn't have been able to take it down without a partner. And I think that's very valuable. for a lot of reasons. For one, you know, as I've heard a couple people say right you need knowledge, hustle and money to make a real estate transaction, you need all three, you just don't have to have all three. If that's three people and one's really smart and one hustles really well, and the other has a crapload of money, great if you have the knowledge and the hustle, but no money, find someone with money.

25:00 - 30:00

David:

You know what, if you find a deal, the money is not always that hard to get a hold of. It's finding the deal and finding the people, right? And so if you can find a solid partner, and even better, right if you both have knowledge, hustle and money, and you find another investor who's like minded, man, make some crazy stuff go down.

JD Monroe:

Yeah, absolutely. I've always heard it as time, knowledge or money. And, and you can, you can do real estate with two of the three, it helps to have all three. But if you have time and money, you can pay somebody for their knowledge. If you have knowledge and time, you can work hard and get that money.

David:

Maybe that's what I meant. Either way.

JD Monroe:

I mean, no, yours is also equally...

David:

This is the JD podcast, he's running the show, because he remembers what I meant to say.

No, thank you. You're right. You’re right.

All right. Hey, I'd like to transition into a couple of the questions that I have normally asked.

JD Monroe:

Awesome.

David:

If an E one, E two, or for those of you who aren't military officiated 18 to 20 year old youngsters walked up to you asking for advice, you only had a few minutes to give them what would be your best tip be?

JD Monroe:

So one, don't blow your money on Harley's and booze.

David:

It's so much fun.

JD Monroe:

It is, it is so much fun, it's totally worth it. But if you just set a budget and said, I'm going to spend $100 on booze instead of $500 on booze, and I don't have to buy drinks for the entire club, I think you would still be moving towards the right direction.

But my number one piece of advice for these young kids is, is try to find a way to do a house hack. If you're in the military, using your VA loan on a four bedroom house or a four unit apartment, and running out all of the rooms to your buddies, so you can live for free banker BAH and start to save up for your next investment. I think that's the number one best idea. And it's also super, super valuable. Because you're living for free, you're kind of learning what it's like to deal with real estate. And you're getting your feet wet without over committing and putting yourself in a lot of danger.

If you're just an 18 to 21 year old, I would say to look into the FHA loan 3.5% down type loans, and do the exact same thing house hacking is gives you such a leg up on, you know, every everybody else in your peer group, if you're thinking about that from the beginning, instead of, you know, 10 years down the road.

David:

Yeah, and for those of you who decided to stop listening, we said no Harley's and tattoos and booze. The way I like to justify this for myself is with opportunity costs.

So I recently sold my baby, my toy, my love this little roadster that I turbocharged recruiting and put a bunch of money into a beautiful car. And I finally decided to just sell it. I told myself, I was never going to part with it. But I realized like, I hadn't driven it in a year because I've been here. And the justification for that was if I sell this now and invest the money 20 years from now I'll be able to buy a much nicer car.

And that's, you know, that may or may not work for you. But that's how I try to justify putting off all my whims for fast fast toys and loud toys. And yeah.

JD Monroe:

I've never been a very materialistic type of guy, I wasn't super into cars, I wasn't super into hot rods, I do like tattoos. But recently, I've started looking at watches a lot. And I think that's kind of my vein side coming out. I really like the high end watches. But what I've decided is until I can buy 10 of them in cash, I'm not going to buy any of them and just put them off like that. And then, you know, once I get enough money to buy 10 of them in cash I might, you know, then I'll make the decision. I can buy this house or apartment or one of these things and then I'll you know be able to tell if it's worth it.

David:

Yeah, I kind of like yeah, that's been like recently my wife is making fun of me because we'll go to the mall and I'll end up like, you know, the really fancy watch storage like what are you doing? Like, it looks so nice. Some of them are just not my style. But yeah, I'm like, okay, no, no, get out of the store down. Don't don't don't talk to him about financing, leave.

JD Monroe:

It's a doodad trap.

David:

Man, you know, and the funny thing is like, what am I gonna do three days later I'll have it all scratched up. So..

JD Monroe:

I'll buy a real nice watch. I'll keep it in the closet. And I'll wear it once a month, maybe for date night and then go back to my mud man.

30:00 - 35:00

David:

You know, it's funny for those of you watching the video show, so I have one of these little like rubber wedding ring things that I have worn. So I have a nice ring. I have a really nice ring. And I think I've worn it five times in the last like, four years, whatever, three years.

Because this thing I've had since day one, and I can work on my car I can work out like now. So yeah, same thing. The nice one just sits in the closet.

JD Monroe:

Yeah, no reason.

David:

Alright, so anyway, I digress about watches and rings and toys.

What is? So I asked this question. I understand it's kind of a loaded question. People always tell me, it's not their job, I get it. What is one thing you wish the military had taught you about real Estate Investing or finances earlier on?

JD Monroe:

I think that's a great question, actually. And if I had to pin it down to like, one thing, when I first came up, nobody talked to me about wealth, they tried to force the TSP on me, but I felt like it was hard sales tactics. And I don't necessarily think that that's the best place for me to put my money. I know, there's a lot of people and if your decision is put money in the TSP or do nothing, 100% of your money should be going into tsp, you know, but my thing is, I wish I would have known that you don't have to be 30 years old, with a wife and a kid on the way before you can have access to your VA loan.

And I know there was a lot of like, in the Air Force, we have family advocacy, and a lot of these programs that will give you free classes to teach you about the VA loan and using the VA loan. But if I'd known that, that it was even a possibility for me to move straight out of dorms into a house that I purchased, instead of into an apartment that I shared with a couple of buddies that cost us you know, $1,000 apiece. And I could have been using that to buy a house if I would have just known that that was a possibility or in the realm of possibility. I think I would have been a lot further on now than I am because I didn't even realize that kids, you know, 2020 year old kids could buy a house, I didn't think that that was even possible. And it definitely is.

But nobody talks about finances. Nobody talks about the VA loan. The only reason I knew about it is because we are married. The logical progression is Oh, you get married, you start to have kids, you need to move into your own house. And so that's when I started looking into it on my own. But I would have been, you know, better off had I done the VA house hack when I was younger.

David:

Yeah, absolutely.

The VA loan is like the most misunderstood or just not understood benefit that we have. It's huge. And myself, for example, I bought my first duplex with an FHA loan. Because when I talked to the local realtor and lender, they were like, Oh, I don't think you want to waste your VA loan on this. You can buy something bigger later. And now I'm looking back and I'm like, I'm paying $81 a month for private mortgage insurance that I should not be paying, right? Well, I'm just about done paying it now. But for the last year and a half, I've been paying 81 bucks a month more for my probably 70 bucks a month more for my mortgage, money just going out of my pocket, and I look back and I'm like What an idiot. You can reuse it. You can do this, you can do that. And I'm like, Yeah, but I didn't know. And the people who were supposed to know, didn't know.

JD Monroe:

They don’t know.

David:

It's so misunderstood. It's hard to find a solid lender who understands and now here's the real kicker, right? Is this the new VA renovation loan that nobody knows about, because it's brand new. I've had lenders telling me even this year, like this year, I was looking for someone so I could really get familiar with it so I can produce some good content on it.

And I sit down with like three different lenders that I'm just picking their brain and they're like, Oh, no, we don't do that. Oh, that's not a thing. Oh, no, I've heard about that. But I've never heard of Oh, I don't know, you know, and then I meet this one guy. His name is William Dew and I'm gonna plug him in here because he's the guy I'll throw questions to. And I sat down with him over a coffee shop in Honolulu. And he's like, Oh, yeah, that was a pilot program. My company was doing it as a pilot last year and the year before, because but now it's a full time program. And he starts showing me his portfolio of homes he's used it on, and I'm talking like $500,000 purchase price in Hawaii with a $200,000 rehab worth, you know, $900,000 the kid put nothing in and I'm like, why not notice about holy crap. So man, there's some pretty cool...

JD Monroe:

I have to admit that I don't know very much that we're getting ready to PC to the DC, PCs to the DC area. And we're looking at that so you know, I'll have to get with you on what knowledge you can impart because it’s a great program and if not everybody knows about it. I think we need to be shouting it from the rooftops.

35:00 - 40:00

David:

They can do tear downs, like it can legitimately, like, on the list of things that you can fix with this renovation loan is a pool, like things that just don't matter, right? You're like, oh, man, yeah, my hot tubs are broken. Let's throw that in the renovation? Well, yeah, zero down on. Like, it's super cool.

That granted, that doesn't always mean it's the perfect investment, right? It's fine by the numbers. But what a great opportunity.

So now I'm playing with the idea. Like, there's these old colonial homes back where I'm from that I love, but they're falling apart. And they were caught because they're colonial, and they're high quality they take a lot of money to fix them up, people turn them into like four units, or five units, or six units or whatever. And I'm like, man, when I go back in my house hack, I'm buying one of those colonials, and I'm using the renovation loan to fix it up into a four unit, I'm going to live in the nice little downstairs area and route the whole, we'll see what happens. But I would love to live in one of those things.

JD Monroe:

I think one of the important things is just understanding what options we have out there and available to us. And if I was in charge of all the military, I would make mandatory financial literacy classes, you know, above and beyond. Don't use your credit cards to buy stupid stuff and don't get a car loan with 22% interest.

You know, they do a pretty good job of attacking the predatory lender type stuff or at least they do in the Air Force. But I think there's a lot more important knowledge that can be imparted to the younger guys.

David:

Yeah, it's not easy. I'm a command financial specialist. And you'd be amazed how few people show up when I host a voluntary event, even during working hours just because they can't get away to go. But I hosted one where it was like a, like right before the Blended Retirement was up, I posted it as like a mandatory training for all the people who hadn't been trained on the Blended Retirement. And I talked to the bloody retirement for like 15 minutes, and that was the requirement and then the remaining 40 minutes, I talked about everything else. I got a great response. And I had like 80 people in that class. But aside from that one, I mean, it's been like, I host this event, like four kids show up. And I'm like, you know, and they all are eating it up. And I wish I need to get more people to talk to more.

But anyway, what makes the JD Monroe method of investing in real estate unique or successful?

JD Monroe:

Well, I think it's, I have a great team. And but specifically, it's me and my wife.

I'm a very, like, analytical, very researched. My wife would say, overly cautious investor, I would say very well prepared because I don't want to go into something blind. And she's very action oriented, let's get it done now, what are you doing, let's move, get this done type person.

And that, you know, combination sets us up for success because I'm pulling the brake back when we need to pull the brake and she's pushing the gas when we need the gas. And just being able to have good conversations and a partner that's heard from, you know, we bounce ideas off each other.

Sometimes we even have to be like, Alright, today, we're not talking about real estate, we're not talking about business. Let's talk about the kids parent teacher conference, because we're on the same page, but are our different qualities, accent each other, you know, and we're very, very different people, but together that that builds our team in and makes, you know, makes for good partnership. And that's really what is different about us than a lot of the other people that we know.

David:

Yeah, having a being able to balance each other out is huge. Like I am the Well, I'm the analytical one who tries to talk myself into a budget, but I'm also the big spender. I'm like the budget by discipline where like, I just make sure none of my money ends up in the bank account that I have a card for that way.

JD Monroe:

Yes.

David:

And my wife is like, aside from food, she could go months without making a purchase. And I'm like, I'm terrible. I'm the reserve, you know, our savings suck. And I've gotten a lot better on it. But like yeah, it's good to have that balance because she told me that stuff.

So what's a resource, a book, course, a website that you would recommend to anybody getting involved in real estate investing, or just in life?

JD Monroe:

Well, one, I'm a super huge fan of your YouTube channel. I think that's phenomenal. More and more geared towards the military military members but there's a ton of value that would be out there for people not in the military too.

40:00 - 45:00

JD Monroe:

The number one thing that I always recommend to everybody that's doing real estate, even people who think they know about real estate and have done a couple accidental landlords or living flips, or whatever, it's the ultimate Beginner's Guide to real estate investing that they put out from bigger pockets, it's a PDF course, essentially, start to finish A to Z, everything you could possibly need to know about real estate investing. And that's not everything you need to know to do real estate investing. But that's everything you need to know to start learning about real estate and investing.

It gives you all the basic terminology and kind of puts you well, at least with the people that I interact with. If they really read and go through that, then all of the terminology that we're using is the same, you know, and it gives a good breakdown of everything from marketing to deals to fix and flipping to buy and hold real estate. And it just gives you a baseline knowledge that I think you need before you actually start understanding the stuff that you're going into and, and trying to learn about.

David:

Yeah, absolutely.

That's actually, uh, I think I have the PDF on my desktop in one of my folders right now, but I know I've read that and it is absolutely great. And I like the fact that you threw that out there because that's not a resource that everybody throws out, but it is a very good one. Everybody always likes phlox, the Rich Dad Poor Dad, and I'm like, Okay, give me another one.

JD Monroe:

I'm a huge fan of Rich Dad, Poor Dad. And I actually debated like, which one should I say and I know that everyone does Rich Dad, Poor Dad. And like I said before, it was like I was walking around with blinders on and then all of a sudden, somebody removed the hood. And I could see the world differently.

But that's a lot of mindset and understanding money and the way people think about money. But it's not super tangible. But this you know, the PDF from bigger pockets is a super like, No kidding. If you follow the steps you can be successful, don't get me wrong. I think mindset is a vastly important aspect and Rich Dad, Poor Dad literally changed my life and put me in a position where I would look for the resource from bigger pockets. And I don't want to discredit Robert Kiyosaki or any of the stuff he does, because I think it's phenomenal.

I haven't met a good real estate investor who isn't like, Oh, yeah, I love Rich Dad, Poor Dad. But if we're looking for, like, tactical advice, this is a playbook that you could use to literally run your whole business or at least put you off into the right vector.

David:

Yeah, Rich Dad, Poor Dad is one of those books that should be like a high school requirement. But it's like your access card to a real estate investor. Like, I don't know, you're right. I don't really know anyone. Like if I run into someone who hasn't read it. I'm like, What are you doing? Go read this book.

JD Monroe:

And, you know, like, came out, I think it came out originally in 2003, I think is when it first came out. I don't remember. But I know that. I know that. Like they just had their 20 year anniversary. I think, maybe it was like 2000, which would have been right around the time I was in high school getting ready to come out of high school. I graduated in 2003.

If I had to read that book, then, you know, well, one, maybe I would have been like, this is stupid. I don't read books. Because my entire time in high school, I read maybe, maybe one book but if I could have been forced to read that book, it could have changed my whole life. I love the life that I have now. So I wouldn't want to change but starting out with that knowledge or that base those ideas and concepts. You know, would be phenomenal for high school kids or just really anybody.

David:

It's funny you say that. Because now I don't remember this. Maybe that's by choice.

But my mom swears I was homeschooled. And she swears that she tried very hard to get me to read Rich Dad, Poor Dad. And I was like, No, I'm not wanting anything to do with it.

JD Monroe:

The teacher appears when the student is ready or you know, whatever. That humbug and I think there is some validity to that. So maybe I wouldn't, you know, I was definitely not concerned with finances. When I was 18 years old. There were a lot of things I was chasing and financial literacy was not it.

David:

Well said, well said.

Alright, JD before we wrap things up, you got anything you'd like to add any big parting ideas or stuff that we didn't touch on?

JD Monroe:

No, no, just the main thing was that you need time, money, knowledge, hustle, and all that stuff. But none of those things. Having them or not having them is not something that should stop or prevent you from stepping forward.

People like me tend to think that you need to see step 1 and step 55 and not all the steps in between before you get started. And that's really not not the case I go back to Matt Terrio from Epic real estate investing. And he says, you know, it's like driving a car in the fog, you can only see 15 feet in front of you, you go that 15 feet, and you can see 15 more and then 15 more 15 more. What that means is when you take that initial step in real estate, then you can figure out that next step and figure out that next step. But you don't have to know all of it to get started.

45:00 - 49:00

JD Monroe:

And I believe so strongly in the power real estate has and the power it has for military members to secure their final financial freedom, that I think everybody should start taking steps in that direction.

David:

Man I like that fog analogy. I'm going to definitely repurpose that. That's awesome.

I need to start doing things like clips of my podcasts. That might be it. If I ever actually started doing that, because it just takes so much more time.

Anyway, I have this week, I hired a virtual assistant, which I haven't really, but she's more for proofreading, copywriting, stuff like that. I also hired a SEO firm to try to yeah, I don't know, we'll see basically fix everything that I did the first year while I was learning that I did wrong, that I just know that will I will never be able to time that it would take me to go back and fix it is not worth ever tried to do. So.

We'll see what happens. But I don't know. That's one of those things where I'm like, yeah, this could be huge. Or it could just be me throwing money away. But I guess we'll find out of it.

Alright, JD where can people get a hold of you if they want to reach out?

JD Monroe:

Well, we're pretty active on Facebook, when you're From military to millionaire Facebook groups. We also have our own website, which is TheMonroeBros.com.

We're on Facebook at Monroe Brothers Investments. We're on Instagram and Twitter. And we are currently building our YouTube channel before we do a poll.

So it'll be Monroe Brothers Investments. And we'll push it out there.

Our website has a couple blog posts, we have a deal analyzer, it's just a spreadsheet that I use to analyze all my buying home feels it's available in one of the blog posts on TheMonroebros.com. And people can download it for free. You don't have to put your email in, you don't have to do anything like that. You just download it if you want.

And, yeah, we're pretty approachable. We're, we're very open to answering questions. And we want to make sure that if there's somebody especially in the military, but anybody that has questions about real estate and want to know directions and how to get going and resources and stuff like that, that we're open to working with other people, helping other people learn, we're open to joint ventures, you know, we're open to all that kind of stuff and, and we just want to help other people see how important it is and and help other people succeed.

David:

Awesome. Awesome. Awesome.

And yeah, I love watching you guys on Facebook, you're always posting good stuff. So keep it up.

Cool, man. Well, hey, thank you very much for joining us on the show today. It's been a pleasure. I'm glad we finally got to do this. We talked like all the time online and you've written an article for my website, and this, that and the other. And so it's nice to finally get to do a podcast and share some of your information with the world.

So thank you for joining us.

JD Monroe:

Well, thanks for having us. We really appreciate what you're doing.

David:

Yeah, thanks. I do it again.

End:

Thank you for listening to another episode about my journey From military to millionaire. If you liked it, be sure to visit Frommilitarytomillionaire.com/podcast to subscribe to future podcasts. While you're there, we'd love for you to rate the show. Give us a review on iTunes. Now get out there and take action.

JD and Annabelle Monroe on The Military Millionaire Podcast

Episode 31

JD and Annabelle Monroe

JD Monroe has been in the Air Force for 15 years. He and his wife are both active duty Air Force, and awesome real estate investors!

JD got started as a real estate investor a few years ago. He and his wife have purchased (2) single family homes, (3) duplexes, and (2) four-plexes. They are looking at larger multi-family properties now, and have already had some great success!

His advice to an E-1/E-2 (18/20-year-old) is:

Don’t blow your money on Harley’s and booze…joking. Use your VA loan to house hack with your buddies as soon as humanly possible! Time will be a great ally to you!

the resource he recommends is:

The Ultimate Beginners Guide from BiggerPockets.com (link below) This free PDF is everything you need to know to get started in real estate!

His big idea/parting advice is:

The VA loan is a huge benefit. Learn about it, and take advantage of it!

If you want to reach out to JD you can find him online at: http://themonroebros.com/ They are also on Facebook as The Monroe Brothers, and Instagram @monroebrosinvestments

SUBSCRIBE: https://bit.ly/2Q3EvfE

Blog: https://www.frommilitarytomillionaire.com/start-here/

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Audible: https://amzn.to/2K0wzxL

Join me in the BiggerPockets Pro community! https://www.frommilitarytomillionaire.com/we-recommend-BP-Pro/

Books I recommend

First read: https://amzn.to/2KcTEww

Real Estate Investing: https://amzn.to/2ltPRNm

Real Estate Investing: https://amzn.to/2yxFBNf

Real Estate Investing: https://amzn.to/2IhQ1QI

Building Wealth: https://amzn.to/2ttiwpf

Efficiency: https://amzn.to/2K1eRdy

Efficiency: https://amzn.to/2yvuu7K

Negotiating: https://amzn.to/2tmCyT7

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David Pere

David Pere

David is an active duty Marine, who devotes his free time to teaching personal finance and real estate investing for service members, and the working class!

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