Listen to the Episode (19:28)
Today, we are joined by Rich Fettke to talk about how to make an investment make sense. He has a passion for helping people improve their businesses, grow their wealth, and live more fulfilling lives. He’s also the author of The Wise Investor Extreme Success in the Audio Program.
[00:01] – [04:16] How It Started
- Rich sharing how a misdiagnose made him and his wife start a group called: Real Wealth
- Helping people invest in real estate across different markets and his main focus today is ground up residential development
[04:17] – [09:59] Lessons Learned: Investing in a Cash-Flow Property
- When buying a property, make sure it’s a cash flow property that you can cover if things turn bad
- Why Real Wealth advises investors to stay invested and not bet on appreciation
- Why it’s important to focus on yourself and building a team of motivated individuals who are focused on the same goals
- How Real Wealth has core values that are constantly reinforced and talked about
[10:00] – [15:24] A Parable About Creating Financial Freedom
- How a lot of uncertainty in the market right now is causing many investors to sit on the sidelines
- Rich discusses about the affordable housing crisis
- How investors can make a difference by serving more effectively
[15:25] – [19:25] Closing Segment
- Reach out to Rich!
- Links Below
- Final Words
Tweetable Quotes
“When you put that work in on yourself, that’s when all the other stuff works so much better.” – Rich Fettke
“When you’re keeping score, everyone gets all stoked and they wanna win and they wanna move up the ladder to the championships.” – Rich Fettke
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Connect with Randy! Follow Rich Fettke, and Real Wealth on LinkedIn. Website: fettke.com
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Want to read the full show notes of the episode? Check it out below:
[00:00:00] Rich Fettke: Really, I think it’s about educating yourself. Really, really looking to experts who are not the mainstream media. Who are these kids? Just outta college writing articles for the New York Times or Forbes or whatever, who you might be, or these internet things and uh, you know, or listening to people on social media who call themselves experts and they’ve been in the game for five years.You know, I think you have to really look to the economist. To the experts and really source that out and turn to the investors who’ve been there, done that. [00:00:41] Sam Wilson: Rich Fete has a passion for helping people improve their businesses, grow their wealth, and live more fulfilling lives. He’s the author of The Wise Investor Extreme Success in the Audio Program. Momentum Rich, welcome to the show. [00:00:52] Rich Fettke: Thank you. Good to be here. [00:00:54] Sam Wilson: Pleasure. Look forward to it. Absolutely. Thanks for coming on today, Rich.There are three questions I ask every guest who comes on the show in 90 seconds or less, can you tell me where did you start? Where are you now and how did you get there? [00:01:04] Rich Fettke: Oh man. 90 seconds or less. Okay, I’ll do this quickly. My wife and I have a real estate investment group that we started when I was given six months to live., Kathy had to rally. She was a stay at home mom and uh, it was a mis uh, diagnosis. They call it a false positive. They. The melanoma that I had on my skin had spread to my liver. Um, but it was a false diagnosis, but it was that type of, that was the impetus really for Kathy to say, how am I gonna earn an income if Rich dies? So we started this small group that we thought would be, uh, you know, maybe a hundred investors. And that group called Real Wealth we started in 2003, has grown to over 67,000 members today. So we’ve helped a lot of people get into investment real estate around the country.
[00:01:49] Sam Wilson: Wow. 67,000 members. That’s an astounding number. [00:01:56] Rich Fettke: Not, we’re grateful . [00:01:57] Sam Wilson: Absolutely. I mean, there’s so many questions I would have from that, but maybe just if you can quickly give the background on what real wealth, what type of, uh, real estate you guys are investing in. [00:02:09] Rich Fettke: Back then, back in 2003, we were helping people get into single family properties in different markets. Cathy actually had Robert Kiyosaki on her radio show way back when, and he said this was like 2003. He said he was selling all his high priced California properties and moving everything 10 31 exchanging into, uh, Texas. So we followed his advice. We did the same thing. We did a cash out refi on our property up in the San Francisco Bay area when we were living. And we invested in Texas and that’s when we had listeners of Kathy’s radio show, our friends, our family saying, how did you do this? Are you living here in the Bay Area and investing in Dallas? So we, that’s when we started to help people just connect with property brokers, property teams with one to four units, uh, investment properties available. So that’s how, that’s what got us started. And so it was slow on those beginning years. We had a couple hundred members and I remember we had a thousand members and we were so stoked on that. Then we got to 10,000 members and all, and then we started to syndicate. So we syndicate as well, mostly for residential ground up development is our main focus there. [00:03:18] Sam Wilson: Gotcha. And is that what you guys, is that the main focus here today is ground up, residential? [00:03:24] Rich Fettke: Both. Um, yeah, so we syndicate ground up residential. That is a major focus. We also have a fund with single family properties in it. So, um, that’s growing to be a 20 million fund for credit investors. And then we still today help a lot of people, especially first time investors, busy professionals who don’t have the time to hunt and find properties. We connect them. Brokers and property teams in emerging markets that are really growing, where the population’s moving there, where businesses are moving and we help a lot of them get into their first investment property, which as you know, can be a groundbreaking, you know, just groundbreaking and mindset shift. When you get that first Andre investment property, you kinda like, wait a minute, I’m an investor now. I get this, and then they go on and they’ll buy, you know, 10 or they’ll get 20 investor loans. Move on up into multi-family, whatever that might be. [00:04:16] Sam Wilson: Right. Oh, that’s really cool. , do you ever just pinch yourself and go, how? I never actually imagined I’d be here [00:04:22] Rich Fettke: A hundred percent. Yeah. I never knew. Man. No, absolutely. I’m so grateful. You know, I do a lot of visioning. I was a coach for 15 years before we started real well. So I did a lot of visioning and future self and where I wanted to be. And so I’d write out what my future house looked like, who I was like, and this was work I was doing, you know, 25 years ago. So yeah, I’m really grateful I’ve become that future self. I’m living in Malibu, California in a beautiful home. I got an amazing wife, couple daughters, a grandson. Yeah, and the business that we’ve built, we’re a conscious capitalism company, so we’re always about giving back and making sure all of our stakeholders are supported and honored. So yeah, I do pinch myself consistently. See, remember to be grateful, rich. This is awesome. This is what you work for. [00:05:09] Sam Wilson: That’s fantastic. What, what have been some of the, I . Guess, toughest. Lessons maybe that you’ve learned that you said, man, these are things that I would, I would tell anybody getting into real estate, involved in real estate avoid this or do it differently. [00:05:25] Rich Fettke: Yeah. On the real estate side of things, it is, uh, cuz Cathy and I went through 2008 and we got leveled, we got rocked, and we had foreclosures, we had short sales. It really hit us hard and so we recovered from that obviously, but it took some. So, I mean, real estate wise, it makes sure that any investment makes sense from day one. When you buy it, make sure it’s a cash flowing property. Make sure you’re not doing short term, um, bridge loans or any short term financing that you know you can’t cover. If things turn cuz things can turn, you know, things can turn quick. We’ve seen it. So that’s the main thing. Make sure everything makes sense from day one. Don’t bet on appreciation. Don’t bet. This is all gonna go well, you know, this is what they say. You’re looking at a multi-family and you got this seller and they’re saying, oh yeah, you can improve management. You can improve this. Assume that you can’t, and make sure it still makes sense from there. Right. So that’s on the real estate side. On the personal side, it is, honestly, it’s work on yourself. What I’ve seen with the 67,000 members of real. Myself, the people that I network with, my colleagues in real estate. It’s the people who work on themselves to be better humans, to be more focused, to be more effective. When you put that work in on yourself, that’s when all the other stuff works so much better. [00:06:41] Sam Wilson: Wow, that’s great. That’s great. Tell me about building a team. I mean, you can’t possibly have 67,000 members in the Real Wealth Group without having an amazing team behind you. What’s that process been like?
[00:06:57] Rich Fettke: That’s so true though. It’s so true. You know, one thing I’m always saying to my team is, the only thing more important than a great idea is the team that can see it through. And I just, I believe that on our core level, it is my unique ability. It’s what I bring to real wealth. You know, my wife, Kathy, Is the co-founder of Real Wealth, and she is like the magic maker. She understands markets, she understands market cycles. That’s why she’s on, you know, bigger pockets on the market as a co-host on that. And just awesome. What I bring is being able to lead a team of amazing people, , to follow our purpose, our mission, and our goals. So for me, it’s all about making sure people have autonomy, making sure that they have responsibility for their own part of the. It’s really inspiring and to be about something bigger than just making money, you know, it’s important. Money’s really important. What we do is we donate 10% of our profits from real estate transactions to organizations that change the world, like Habitat for Humanity and Operations, smile Mentors International, and then that just rallies a team.So we’re not just about let’s hit this income goal, or let’s sell this many properties, or whatever it might. Often it’s, let’s do this because we can continue to give back and we have a profit sharing plan. So everyone, the better the company does, the better everyone in the company does. Everyone’s on our profit sharing plan. I think those are some of the keys to really inspire a team to everyone collectively work together and be in sync and have an awesome culture. All that good.
[00:08:27] Sam Wilson: And that’s so true. And that’s one of the things we were actually discussing, uh, at a meeting this morning, which was how, how do we break down, you know, I won’t go into the details on it, but incentivize correctly and motivate. And I think you hit on it there with the, you know, having a profit sharing plan, having a, a part, a part of your company that gives back. Are there other things that you feel like, or some strategic shifts maybe you made that help define your culture in your company. [00:08:52] Rich Fettke: setting core values, you know, you hear it all the time, but it’s really important. Our core values spell atomic , which is, you know, a very small thing that has a big powerful impact. So we have accountability, we have, uh, transparency, which is a big one, making sure that. Share their feelings with each other that they speak up, that they don’t hold things back. We have optimism is one of our core values. So always coming back to these core values. Mastery is another one. Integrity is another one. Connection is another one. So we’re constantly reinforcing and talking about these core values. At a minimum quarterly, I do a state of the company address every quarter looking at how do we do profitability wise? How many people do. How many people filled out our real wealth assessment that have, we’ve helped them create real wealth in their lives, which is, like I said, it’s more than just money. It’s about living life on your own terms. So all these things constantly coming back to those core values and looking at how we’re on purpose and just like a sports team, you know what I mean? When you’re keeping score, everyone gets all stoked and they wanna win and they wanna move up the ladder to the championships. So it’s kinda the way it is at real. [00:09:59] Sam Wilson: No, that’s great. I love, I absolutely love that. Um, tell me this, if we can shift maybe just slightly and talk a little bit about maybe the market cycle and what you guys are seeing. I mean, you went through 2008, you said that was a super painful time. You guys, you know, you said, you mentioned the word foreclosure and short sales and all the dirty words that none of us enjoy . Um, You know, and so where, where are we now? What are you advising investors? What are, what, what’s, what’s the correct move if, if there is such a one for a podcast, you know, for everybody here today? [00:10:33] Rich Fettke: Mm. Yeah. I mean, we aren’t, we’re in crazy times. There’s no doubt about it. When, you know, it’s a completely different scenario than 2008, as you know, and I’m sure your listeners know and. . You know, it’s, it’s crazy times we’re seeing it. There’s, you know, a lot of investors are in freeze mode. Yeah. And that’s the biggest thing that’s impacting us as an organization where there’s so many investors, especially new investors who are just like, oh my God, the mainstream media is telling me there’s gonna be a crash and a recession, and interest rates are terrible and affordability’s, you know, terrible and all this stuff. So there’s a lot of investors sitting on the side. The experience. Investors are the ones who are diving in and negotiating and getting better deals and getting their property management to do free property management for a while. Or sellers will, they’ll pay for that. Even, uh, sellers paying down interest rates and that’s, I’m seeing that today, which you didn’t see back then, but you know, we still have what, I think it’s four. Homes shy right now that we need, we didn’t have that in 2008, so there’s still 4 million homes that we need because the rate of building has decreased so much. And then with the supply chain issues that we went through over the last couple years, it’s had a huge impact on builders as well, so, It’s just different. You know, back then there was too much inventory and people were on these, no income, no asset loans. And so it’s a whole different world today. But I would say the best thing you could do as an investor in today’s market and where we’re heading, I don’t think it’s gonna be a crash. There is gonna be some softening, especially in the overpriced markets, the markets, and we need it. Honestly. You know, some of these markets need a correction. They need to lower it to be more affordable so people can have a home. But with that as an I. Really, I think it’s about educating yourself. Really, really looking to experts who are not the mainstream media. Who are these kids? Just outta college writing articles for the New York Times or Forbes or whatever you might be, or these internet things. And you know, or listening to people on social media who call themselves experts and they’ve been in the game for five years. You know, I think you have to really look to the economy. To the experts and really source that out in turn to the investors who’ve been there, done that. You know, that’s, that’s what Cathy and I do. We really talk to the people who are in the game, who’ve been through 2008, who have a clear game plan and we learn from them. [00:12:52] Sam Wilson: Love it. That’s absolutely sage advice. Talk to me about the affordable housing crisis. People are calling it. What’s, what’s happened on that front? Is there an opportunity for investors? And I said this yesterday on a podcast. it was some of the effect of what we create serves the customer. Like it creates an awesome product for the customer and I am then in turn rewarded with profit. Like I’m not opposed to that, but is there [00:13:18] Rich Fettke: That’s just capitalism, right? [00:13:20] Sam Wilson: Right, right. I provide an awesome service and they reward me with profit. It’s great. Is there a way in affordable housing or is there an opportunity in affordable housing for investors to make a difference and also turn a profit. [00:13:30] Rich Fettke: Absolutely, absolutely. You know, I’ve got some good friends. Um, you know, one of ’em is Ken McElroy, who owns 10,000 doors. You know, he does a lot with multifamily and property management. One thing he does is whenever he makes, uh, a rent increase, he always does something to improve his facilities, whatever it might be. So if someone at tenant’s gonna get an rent, First he says, Hey, rent is going up and we’re also gonna do, we’re gonna put all new appliances for you, or you need new floors, we’re gonna put in new hardwood floors, or replace your carpets, whatever it might be. So that’s one way to create a win-win where you wanna just, you don’t wanna put off the rent increase because then all of a sudden you, you start your, you’re slipping behind. But to do something like that, there’s, that’s a one, a win-win that really benefits people. But you know, just provide. Affordable housing and not being a slum lord, and having people, you know, helping people get into quality properties, whether that be multifamily or single family, helping them do that as an investor, that’s, that’s really giving back. You know, Cathy was awarded, um, one of the top 100 intrigue, most intriguing entrepreneurs by Goldman Sachs for two years in a row. Wow. And she went up and she was talking to Lloyd Blankfein and she said, I don’t get it. Why? I’m, I’m here. The founders of Uber and Method Soap and Elon Musk and, and all this stuff. What am I here for? And he said, be, and this is, this is probably about 20 12, 20 13, and he said, because you’re changing the world. You are helping people. You’re going into these neighborhoods with foreclosures. You’re helping investors acquire these properties, fix ’em. And then helping, you know, creating affordable housing for people. That’s a game changer. So you are an intriguing entrepreneur. So I think that’s it. We do a service and we have to really remember that. That we are serving people, just like you said. So how can we serve people more effectively?
[00:15:24] Sam Wilson: Right. I love that. That’s absolutely great. Before we sign off here, rich, I want to hear about your latest book. Can you tell me, uh, the name of it and then, you know, there’s a lot of financial books out there. Can you tell me why is yours different? [00:15:39] Rich Fettke: Yeah, there are a lot of great financial books in, I just got this two days. It’s called a Wise Investor. This is my hard cover. I just finally got, it’s the real deal.That’s awesome. I’ve been waiting for a while. Supply chain issues. Right. I had to wait seven months for this book to get printed because the paper mills are so shy on paper. [00:15:58] Sam Wilson: for a hardback book. It was seven months? [00:16:01] Rich Fettke: Seven months from which I wrote. I finished writing this book a year ago. Wow. So what makes it different? And that’s why I’m so stoked to be able to hold it. What makes it different is it’s a parable. So if you kind of think. Blending Rich Dad, poor Dad, and The Alchemist and the Richest Man in Babylon. If you blended those all into one book, that’s kind of what The Wise Investor is. It’s a parable about creating financial freedom and also about living your best life. So it’s all about taking the lessons that I’ve learned over the last 20 years as a real estate investor and the lessons 15 years before that I, I gained as a coach working with hundreds of clients. Everything about how to be your best self, how to live a better life, how to live a more balanced life, but also how to create financial freedom. And of course it’s with a focus on real estate investing. [00:16:47] Sam Wilson: Absolutely. I love it. If our listeners wanna get a copy of that, when and how do they do that? [00:16:53] Rich Fettke: Uh, they can do it right now. It’s on Amazon. It’s on all major book sellers. Uh, hard cover’s gonna be shipping out in early December, so coming up really soon, the Audible, I mean the, um, Kindle version came out back in April. It’s doing really well. And then the Audible, which I did the narration four, which was kind of fun cuz there’s 10 different characters. Women, kids, . I had to do a little voice acting classes on that one. But, uh, that came out, um, August 30. And now the hard cover’s coming out and it’s, you can order it, you can pre-order it now on Amazon or wherever books are sold. [00:17:24] Sam Wilson: That is awesome. One last question for you. If it is like a Rich Dad, poor dad, or the richest man in Babylon, are the characters in the book based on real people?
[00:17:36] Rich Fettke: a great question. Yes, it’s a fictional story, but definitely based on real world people and real world situations. Everything from, you know, Cathy and me and the lessons that we learned going through 2008. Uh, other friends of ours who, um, I’m sure a lot of what your listeners would know, you know, based on their story and what we’ve learned from them. And also honestly, a lot of the members in real. Kathy and I interviewed them on her podcast and we call it Real Well Story. So we find out where they were, what did they do, and where are they now. And so a lot of those lessons just inspired me, like, oh, I gotta, I have to weed this into this story. So it tells a story. The wise investor tells a story of this guy who’s. Like a hard working family man. He’s got a couple kids, a wife, um, but he works so many hours and he can’t get ahead and he, so he doesn’t have time for his wife or his kids. And then he meets this wise mentor who is an investor, and he teaches him a new way to financial security for himself or his family. And this guy, the main character’s name’s Ryan Brooks. He becomes wealthy in way more ways than he thought.
[00:18:38] Sam Wilson: That’s fantastic. Rich, thank you so much for coming on the show today. If listeners wanna get in touch with you or learn more about the Real Wealth Network, what is the best way to do? [00:18:52] Rich Fettke: Super simple, just real wealth.com. real easy. [00:18:53] Sam Wilson: fantastic real wealth.com. We’ll make sure you put that there in the show notes. Rich, thank you again for coming on today. I certainly appreciate it. Bye guys. [00:18:59] Rich Fettke: Thank you.
