How To Build Wealth And Strengthen Your Bond Investing As A Couple | Ep 60

James: Welcome to the Furlo Capital Real Estate Podcast, where we dive into the intricacies of love. I'm kidding. We dive into the intricacies of passive real estate investing.

Jessi: And

James: our mission is to equip people to invest wisely, to love their investments both properties and residents. And so that together we can build wealth while Improving housing and

Jessi: lost your train of thought there.

I was

James: trying to figure out if I could stick in one more love joke in there, but I was like, how's this going to sound good. So I wasn't going to do it anyways. I'm James and this is my lovely bride, Jessi.

Jessi: I had a different intro in my head, but I have to say, I'm kind of glad we don't do like a love podcast or relationship.

Welcome to

James: the love show with James and Jessi Folow. These two love birds, love real estate. Delilah. I used to, I used to work at Arby's. And that was every night, dude, Delilah would come on

Jessi: and yeah,

James: I, I used to try to guess what her like, sometimes like people would call the question and she'd give advice, not like, not like Dr.

Laura, but like. And yeah, they call like with

Jessi: a request and she's like what are you doing tonight?

James: Yeah. Yeah. Yeah, man, a hundred percent Oh, yeah. Oh, man. That was that was it

Jessi: Wow.

James: Oh Amazing

Jessi: not where I was going, but okay.

James: Okay, that's right But we went there and the reason for all of this is because Valentine's Day is coming up.

Whoo Man, we got good plans yeah, I thought we don't have any yet, but that's okay. We will figure it out. And it's also okay if you don't yes. So what I want to talk about is love and money. Specifically what I want to talk about is investing as a couple with somebody. That's something that's been known to happen and oftentimes.

What has happened in my experience is you get one person, usually the, the dude in the relationship who's like, who they suddenly discover real estate. And they just like, they go down the real estate hole and they're like, this is amazing. And then they come to their wife or girlfriend, whoever. And they're like, we're going to invest in real estate.

It's going to be the most amazing thing ever. I learned all these numbers. We can make so much money doing, it's going to be amazing. Okay, slow down. And then what they do is, Oh, and by the way, I found this perfect property for us. You got to check it out. And it's just like too fast. It's not good. And yeah, and they very quickly get to like, Oh, I don't know about this.

Or the, the, the significant others, like, all right, like let's proceed. But they have some questions about it. There may be not really on board and it's cause it could just cause troubles. Yeah. And create tension for sure. And that's because sometimes like risk tolerances are different. Yep. Mine is a lot higher than yours, for example, there's so many things I would love to invest in and you're just like, no, like, ah, come on.

And, and sometimes too, there there can be issues with like just time commitments, especially in the real estate world, right. Where it's like. Hey, now that we've bought this place, yeah, so a, we can't afford to go traveling anymore. And B, instead of us going off to the beach to have fun, we got to finish re grouting the shower, stuff like that.

And you know, and that can cost you,

Jessi: especially if you're considering DIY types of investments or projects like.

James: Yeah, you got, but there's obviously positives because you got two in the trenches, not just one and you can support each other both in terms of like you have strengths. I have strengths and and there are definitely bonding moments that happen.

Like I remember how excited you got when you got your first sawzall and then we were underneath the house. It was so good. Yeah. I just think those are good. And in general, it's good to. I, one of the things that I liked about it was, is you and I were like, it felt like we were moving in the same direction.

We had some shared goals. Cause often like you have a separate job and that's totally cool, but there's not a lot of overlap there.

Jessi: Right.

James: And, and honestly it's like, okay, keep, you got like five more minutes to tell me about your day and then we're done.

Jessi: Yeah.

James: Whereas. Which is

Jessi: typically the norm I think for most couples.

Yeah.

James: But the cool part about investing together is like, oh, now we have this thing that we can talk about. It's a shared project. And obviously you gotta be careful about it not always devolving into that. There's other stuff to talk about. Yeah. If you're. But but yeah. So anyways, I, what I want to talk about is how to do it successfully.

Cause I think if you can do it, it can be an awesome experience and not horrible. So first thing you gotta do, you gotta sit down and you gotta decide why you're doing it. I think that's important and, and it's a boring first step, but I think you gotta be on the same page. Are we investing for retirement?

We're not touching any of this. For 40 years or more. Are we just trying to get a little bit of extra money so that we can go on vacation a couple more times a year? Are we doing this because I want to retire early?

Jessi: Right.

James: You know, and are we

Jessi: creating investments for our children leaving a legacy or

James: no, but yeah

I'm on the vacation side of things. No kidding. I mean

Jessi: other couples might have different

James: Yeah, which is fine and you want to be on board with that I think that's important because that will also dictate the level of craziness and involvement that you get with that And then I think this is super important.

I actually think a lot of these like things are just important when you're buying a house just in general, but you want to align on what I would call the non negotiables. Okay. You want to figure out what's important to me. And then what's important to, to you, right? So like, for example, you want to align on the strategy.

Are we flipping houses? Are we doing long term rentals? Are we investing in syndications passively?

Jessi: Like

James: you want to figure out like, what are we doing in like, you know, do the research together, figure out what the pros and cons are of each. Don't just try to like. Hey, this is what we're doing now. Yeah, also you want to talk about the budget.

You know, I think that's important. Like how much house are we going to actually spend here? What percentage of our budget are we going to go up to? Which now that I think about it, we had a couple come over and I knew that was one of the questions. And we never got to it. The answer is 25 to 35 percent for when they listen.

Your income? Of your monthly, of your monthly, of your, yeah, of your income, that's how much you should spend on your housing. Oh. Your PITI.

Jessi: On, on primary housing, not on investments. One's gonna help you figure that out. Yeah. So

James: don't worry about it. Again, I think it's also like you gotta talk about your risk tolerance.

Mm-hmm . And again, I know I talked about that can be a mismatch, but you gotta figure that out.

Jessi: Mm-hmm .

James: The best way to figure out your risk tolerance is to play what if scenarios. Okay. So, because someone's gonna be like. Oh, I'm higher risk than you, right? Well, okay, great. Like, what does that mean? It's still kind of super fuzzy, right?

So like, so you can play what if, so would you be willing, would you rather, I guess would be the way to do this. Okay. Let's see if I can do this off the top of my head. I didn't think this through enough. As I'm curious on your answer, would you rather have 50, 000 invested? With a guaranteed return of, say, 12%.

Or would you rather have 10, 000 invested? And so at let's make, let's make some real numbers here. Not just two percentages 50, 000 with a guaranteed return of 5, 000. Okay. Or would you rather have. 10, 000 invested with a 50 50 chance that you either make 10, 000 or you lose it all.

Jessi: The first one.

James: Interesting. And,

Jessi: cause I'm gonna make less but it's guaranteed.

James: Yeah, or what would let me think if I can, if I can make this. Make more sense. Okay. Okay. Okay. 50, 50 chance, 50 chance of making 15, 000 or losing it all.

Jessi: I think I'd still rather do the first one.

James: Okay. So technically from a probability standpoint, they're exactly the same. So from an expected outcome standpoint, but they speak to your different risk profiles, right? One person's like, no, I get it. I will probably make less. And I'm okay with that. I don't want the risk.

Whereas the other one's like, man, I only got to put 10, 000 down, like, and I think I can manage it and do whatever it's going to do to, to work out well. So like,

Jessi: I think there's another layer there too. Like risk tolerance is definitely involved, but it's, and I don't know if this is on your list somewhere, but it's like the complication of the deal.

You know, it's like as it gets more complicated, I get less and less interested because I just, I can't keep it all in my head and I can't wrap my head around it. And so it's like, ah, this doesn't feel comfortable anymore. Yeah.

James: And I think, I think for a lot of these things, it's worth scenario planning out honestly.

And the best way to do it would be to. To analyze some deals, say we're not buying this. I don't care how amazing it is. We're not doing it. We're just looking at it. Valuing like to run through and to do a variety of different types because you'll find out like, Oh, okay. If I'm going for a 10 unit place right out the gate, yeah.

Like it's different type of financing, different all sorts of stuff. You quickly may go, Oh, this is awesome. Or no, I don't think so.

Jessi: Honestly. Yeah. That, that was when we very first started investing, I remember just looking at a bunch of deals and it was, it was like, We weren't necessarily going to get them, but it, it, of course you did.

Yeah, of course you did. But yeah, your perspective was like, I can make any deal work. We, this, we can make this work. And I was just like no. So, but by looking at. a variety of different places, actually seeing them in person, looking at spreadsheets, just evaluating a bunch. We were able to get to that equilibrium of like, okay, we're not getting the craziest.

Like there's a big hole in the backyard that looks like a swimming pool, but wasn't like, wow, that was bad. It was pretty bad. And we didn't go. To that extreme, but we also didn't go the other extreme to where it was like, there's zero risk at all. It's a super nice property. We're not going to make, we're going to rent it out.

Yeah, but we're not going to make that much. You know, it's not really worth the investment. You know, but yeah, but so we found that equilibrium totally. We were both comfortable with,

James: I think like analyzing deals as scenarios and just like quickly looking at them and then you could just start out with like going on Zillow.

Oh, what about this one? Can we make this work? And you'll quickly narrow it in. And the same thing you want to agree on property type.

Jessi: Yeah.

James: And I think you'll have a natural inclination on which direction you want to go for that, but it's good to talk about. Location. I think that's a big deal to get on, to get on board, right?

I mean, like for us, right? We Corvallis, would you move to Albany? Would you move to Sweden? Would you move to Newport? You know, Salem, Eugene.

Jessi: Well, but you're not, you're. If we do invest

James: in them, right. And I mean, it depends on, yeah. Would you invest in them? Right. And I think like it's two things. If you're doing it actively and you know, you're going to manage it yourself, like, am I willing to drive that far, but then also passively.

Right. Like for me, I've decided Oregon is my boundary. I'm sure that there are amazing deals in Washington, in Idaho, in Florida.

But I just don't care. I'm that's, that's too far. I don't know those markets well enough and I'm not willing to put in the time and energy right now to learn about those markets.

And so I'm just like,

Jessi: well, and that totally makes sense. Since to me, if, if the, if the deals caused you to have to consider moving, yes, you would want to talk to your significant other about what the implications are.

James: Or again, like I think about like our sweet home property, I guess an hour, one way. Yeah.

Yeah, that's true. There's,

Jessi: there's, Bigger asks on your time. Yeah, if it's something that's sometimes

James: kids are out of school, man. Guess what guys we're going to NW. That's right

Yeah, I think another one is your return on investment expectations, yeah, right and this was a big one for you, right You're like it has to be profitable has to be casual positive the first year. Yeah Like that was one of your non negotiables, like, Oh my gosh, that's quite okay. All right, here we go. And and I just think that's, that's important to figure out what those are because otherwise you're gonna be looking at deals and you're gonna be like me go, this is amazing.

We should get it. And you're gonna go, no, it's not. And you just want, you want to be able to articulate why.

Jessi: Yeah.

James: One's good. One's not I think it's important. So I think like, once you kind of figure those things out, the other thing you want to do when you're actually like, okay, we're really looking is I think you want to evaluate them independently.

Okay. I think that's something that could be super helpful because the problem that people run into couples run into is you get someone like me, I look at a deal. I'm looking at, I'm looking through all the Zillow stuff and I'm reading about the market and I'm going through. All the information and I'm throwing it into my own little spreadsheet and I'm running all the numbers and I'm getting excited about it.

Right. And then what I do is I go to you and I go, Hey, guess what? I found this awesome deal. It's so good. It's going to sell for, you know, we can buy it for this. We can rent it for this. I think in five years we'll be able to sell it for this. And we only got to put this much money into it. It's a great deal.

We should get it. What do you think? Right? And it was like this thing that I took half an hour to process visually looking through taking it all the information I Verbally vomits upon you and then say give me an answer

Jessi: Right.

James: And it's just like, that just doesn't work. You know, it's not fair to you. You instantly go, no, I'm not into it.

And so what I found that works better is when I find something that's interesting. Yeah, I run all the numbers and then I send the listing to you. And I don't know if you notice I do this now, but like, I'll just text it to you. Hey man, what are your, what are your initial thoughts on this?

Jessi: Yeah, you let me evaluate first.

James: I'll let you take it in at whatever your pace is and then we'll talk about it. And usually when I, when we start to talk about it. I then go, let's go over to my computer, let's pull it up. Let's flip through the pictures together. And we both like, I will then, I will then say out loud, trying to map the house out through the pictures.

Oh, it looks like they've got this. Oh, this is a tree. And I will think out loud so you can hear the processing that I'm doing. And then, cause you don't do the spreadsheet thing. I'll go, all right, let me open up my spreadsheet and I'll walk you through like painstaking, here's all the assumptions. Here's what I'm thinking.

Here's the thoughts so that it takes a half hour for you to get there. And I usually find that by then you're, you're able to make like a good like, Oh, okay. Yeah, yeah, yeah. This makes sense or it doesn't. And sometimes half the time I talk myself out of it by that point. Cause I'm like, Oh, I actually missed this the first time.

Stuff like that.

Jessi: Which I think is, is valuable. I guess one of the things that this points to is. If you take time to look through it separately, but then come together and evaluate together and go through and take your time, oftentimes it clarifies what type of deal it actually is. And things will come up, you know.

For the property or against it, you know, to actually fully evaluate and say, Oh, this actually is a great deal. And here's why, and we can prove it and we can look at the numbers and we can tweak things and turn the knobs to make it work, you know, or you see something that you're like, Oh wow. Yeah. I missed that in my initial evaluation, you know, how come I didn't see that?

Or why was, you know, yeah, totally things come up. So I, you shouldn't just go on a gut reaction from either, either person, you know, when you're evaluating a deal

James: and same thing, if you're doing like, even if you're investing passively, I think it's good to say, Hey, think about investing in this. Read through this and even if the other person is like okay, if like, I trust you to go, I know you do, let's go ahead and read through it at the very least now we can, when I'm talking about this thing, you're aware of, of what's going on.

Jessi: Yeah.

James: Like we're, when we're passively invested, we are passively invested in a deal and. I know initially, like we went through it all and we talked about it. I don't send you the email updates because they're useless, but as I would but but yeah, I think if they were useful, I'd be like, Hey, this is worth checking and seeing here's the progress that's going on mostly because I want to show you how brilliant I was for bringing you this deal.

But yeah I have on here in my notes that I think you, you again, you want to use that shared. Framework, right? Which comes back to the ROI. Like, yeah, these are the numbers that we care about. Here's what we're looking at. You are putting up against the goals. Yes, we have the same goal for this property and for overall.

And even for risk assessment, right? You want to talk about those things and just your concerns. I think it's important to say like, all right, like area grievances, let's go. Like it's okay. If we're talking about a lot of money here, what are the concerns? And for sometimes the concern for the significant other might be like, ah, this all just seems really risky.

Okay. Like if I already, if you were to say that to me, I'm like, okay. You got to be more specific. Tell me about it. And oftentimes it's all right. We've got to dial this back. Let's talk about it. I know when we were first starting doing that down the creative path, you were a little bit like, no, what is it you're doing here?

And, and, and I was like, oh, okay. Yeah. And I found other resources, not my voice. I was like, Hey, watch this video. This like this walks you through a really, really well. What is it? And I remember there was one specific video we watched it and you suddenly went.

Jessi: Oh,

James: okay. I get this now. Yeah. And that's really sweet.

So about this deal and you're like, yep, I understand. Now

Jessi: I understand the application of it. Yeah. Oftentimes I think, and, and perhaps this is the same in most. relationships. Like you were saying earlier, there's one person who's like all gung ho, they're all into real estate. They're super excited. They did all the research and they discovered bigger pockets.

Yeah. And that other person is just, they're behind in the education level of things, you know? And so it's like, it, it takes a little bit more time to get them up to speed. And, and so there's like,

James: I was just remembering, I think when we met in college, I was like, I was a hotter full steam ahead on this and you were like, you're nuts.

And I was like, so you should read Rich Dad, Poor Dad and then let's talk. And yeah, that was like

Jessi: one of our very first conversations when we were very first dating, it was kind of talking about like, what do you want to do in life and where do you want to head? And you said something. Yeah. Like I want to invest in real estate.

That's what I want to do full time. And I was like, you're nuts. Yeah. Yeah. Yeah. Like, why in the world would you want to do that? You know, I was like, you just get a good steady job and I did both. I listened. Right! Which, you know, it totally, after time, made sense to me, but I had to, you had to give me that basis of education that you already had.

Yeah. An understanding of how the system worked and how to evaluate properties and what to be looking for and

James: By the way, if you're in the area Oh, maybe we could figure out how to do this over zoom, but we have a board game. It's called cashflow. It's where you like, essentially it takes all this investing and it says, Hey, let's like, it speeds up the entire process to essentially go through a lifetime of investing.

You fill out cashflow statements. It's amazing.

Jessi: It's actually, it's actually really fun. I mean, you, you pitch it that way and you're like, Oh, you have to fill out the statements. This is so nerdy, which it kind of is, but if you're someone who. wants to know more about what real estate investing looks like just in like the bare bones of how does this actually look from like my income in and out each month?

And what, like, how do I wrap my head around a deal? What does that even mean?

James: Board game is shockingly efficient at Painting that entire big picture. Right.

Jessi: And it gives you, it gives you a variety of different types of deals, different types of scenarios, different types of markets that you would be like, Oh, okay.

So if the market did this, then I would adjust this way. And you, and then the thing I love about it is you can play the game with actual numbers and with your numbers. I mean, you, you have to tweak it a little bit, but you can. Use the same strategies to apply to real life scenarios. Yeah, that's fair. And so you can then You know, that's helpful to me as I'm like, I need concrete.

This podcast is not

James: sponsored by Kiyosaki, but if you want to, I would let you,

But my offer is if you want to play, dude, let's set up a time. Let's play. I love to play it. I can play it every single night and be totally happy. So

Jessi: that is kind of true. He asks a lot of the time.

James: There's a, there's a digital version.

There used to be a digital version. I would play it all the time. It was good. Pretty funny. So back to like going through the process. I think another thing that you can do, which I think is really important is to role play different scenarios or at least play out maybe not role plays. I thought I would.

Yeah. Yeah. Play out, but you know, what happens if a tenant doesn't pay rent? What are we going to do? Yeah. And she's like, yeah, what does this look like? What's the risk? What's the problem? What are those moves? Or, you know, Hey water heater breaks, unexpected repair. The tree falls on a roof. What happens next?

Yeah. And I think, I think that also just helps get you on the same page in terms of, yeah, what's the plan? Are you going to be comprehensive? No, but that's okay. Like, that's not the point. The point is to try to think through. Some of those processes and, and I think it's good. And then ultimately you got to do a yes, I'm in, no, I'm out.

And I think each of you have to do this or a, Hey, we modify the deal. We offer less or whatever better terms. And I think, you know, yeah, if we met this criteria, yes, I'd be in, like, I remember our very first place when we looked at it initially, we were like, no, it's 30, 000 too much. And our agent was like, what are you doing to me?

But I said, we were like, no, we're good. Like it's too expensive route. And then six months later, they lower the price by 30 grand. And we went sweet. We're in, we then offered them 30 grand less than that. And they were like, you must be joking. Come back up 15. That went perfect. And so I feel good about that, but but that was like, but that was how that worked.

We were like, ultimately it's a no until this thing gets modified. And then once it was modified, it totally made sense for us. And so I think. I think that's important. And then here's my favorite part. This is my suggestion for every single couple. You got to do a mini celebration.

Jessi: Yeah, I love that.

That's so

James: important, right? It was fun. I even think it's important if you both come to a no conclusion to do some sort of like, Hey, let's celebrate the fact that we worked through this process. We looked at it, we fully evaluate it and we smartly said no to a bad deal for us. And I think that's worth celebrating and, and for us, many celebrations.

Kids, it usually defaults to going out to eat. But we've done other stuff like what have we done? We've done like spa days. Cause I love that kind of stuff. We did one, this wasn't a small one, but it was like, we went to Disney world for, it wasn't, again, it wasn't super mini, but it was a celebration.

We've done

Jessi: smaller trips and

James: yeah. But like, what's something that you can do? And we usually focus on experiences, not just buying stuff. But like, yeah, what can you do to just kind of. To commemorate, to make that a moment to go, yes. And to, and to reward yourself in the moment for doing what you're supposed to be doing instead of having the reward be later on, which makes it hard for behavioristic, all that fun jazz of behavioral stuff.

But but that's our recommendation. Many celebrations, plus, you know, someone you love, so go for it. Date night. Why not? Exactly. Exactly. So those are my tips. Again, I, I think it's, if I were to summarize it all, the idea is if you fall in love with a deal, don't just go and tell them verbally about it.

Let them walk through the process with you. Let them evaluate it, let them see it visually, go through it slowly. Decide on the criteria, and then you can decide on it ahead of time and modify it as you go part way through. You go, man, there's none of these deals based on this criteria. Let's rethink this.

I think that's, I think that's important.

Jessi: Yeah.

James: And heck, I was listening to this podcast today where this guy was talking about, it's like, yeah, if you want to make a deal profitable in a year, like, dude, you got to be really strict criteria. He's like, but not me. I only care about deals that are profitable in 20 years.

He goes, I can buy pretty much anything. It's like, yeah, you can, like, yeah, I want the year, but I'm willing to put in the work for it. And, and we're on, and we're on board with that. That was something we did from day one. And so I think I just think like, that's how you can do it in a successful way. And you gotta know, like, yeah, like there'll be times when you miss out going to the beach or.

Do something fun because man a tenant called and something broke or all of a sudden you got a turnover and man You're there at 2 in the morning painting done that

Jessi: if that's the way you set it up

James: Yeah, I guess you'd hire a party manager or again if you're investing passively you can go. Yeah, we're doing this deal together We get it.

We've evaluated the risk. Yeah, we're good

Jessi: And I would boil it down to like most relationship advice. It's like

James: respect and communicate.

Jessi: Yeah Talk to the other person and come to an agreement You know, it, it is not going to be successful if one or the other just plows ahead and is like, Hey, I tried to get you on board, but you weren't there.

That's like, you know, it's just, it's not gonna be great for your relationship. So like as painful as that is, and I know there have been times where you're like, Oh my gosh, this is such a good deal. It's a ton of risk and, but it's a great reward. And I know you've said no to, to certain deals because I'm like, I, I just can't get there.

You know, whether it's like, I can't wrap my head around it or it's too risky or whatever it is. And we, we communicate, I know that you respect me and I know that you're willing to make adjustments and find a different deal, you know, and it's like, okay, both of both of us. are willing to communicate that through and talk about it.

I

James: agree.

Jessi: So, it's hard, but it's worth it. Yeah,

James: I think it's good. It's been good. It's been good for us.

Jessi: Yeah! Yeah,

James: so awesome. So, Happy Valentine's Day. Hope you have a fantastic time with that. And I hope that this was helpful, inspiring for you to take a crack at investing with your significant other. It truly is a lot of fun, plus a lot of work.

It's true. Mike, get us all

Jessi: out of the deal. Oh man.

James: Could be awesome. So with that, we would love it. If you invested with us, so you can check us out at furlo.com. You can see all about us, how we invest, see our track record, all that awesome stuff. And if you like this, we'd love it. If you left a comment and with that, thanks for listening.

Have a great day.