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AJ Pettersen: From MN Twins to 275 units & 10 rentals in 6 years

Uncategorized Sep 23, 2020

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AJ Pettersen was an All-American baseball player at the University of Minnesota and was drafted by the Minnesota Twins. In just 6 short years, he went from baseball to real estate agent, to launching his team, to owning 10 rental properties in St. Louis Park, MN. 

 

In this episode, hosted by Mike Swenson, we discussed: 

  • How AJ got started with real estate and ran a team   
  • If you are new to real estate, it is smart for agents to join a team 
  • The goal he has for his team is to have 15-20 agents doing 40-60 units per year 
  • How hiring the right people that you can keep around is vital & can grow the team quickly
  • Retention of staff is important because when you lose somebody, you lose a lot of time and money 
  • How people aren't simply overhead, they are an investment in your business' future. They are going to return more than you are paying them because you can focus on other things 
  • How AJ, along with some family members, are starting to grow their rental empire. They are now the largest private owner of single-family homes in St. Lous Park 
  • The BRRRR strategy for investing consists of Buy, Rehab, Rent, Refinance, Repeat
  • When getting into rentals you need to figure out a strategy and make sure its long term
  • His family is about to inherit a birdseed distribution company  

 

Timestamps: If You Want To Jump Ahead To Your Favorite Part 

0:00 - Intro and overview on AJ and his background 

2:02 - What future looks like for AJ and his team 

5:19 - How AJ gained leverage through people and efficiency with his time 

13:21- AJ's Investments 

18:48 - The importance of having rental properties in a close vicinity 

21:47 - Other things that AJ has on his plate 

26:50 – Advice that AJ would give to people on how to get started in real estate 

 

Links Based On This Episode: 

AJ’s Real Estate Team: https://www.theadvisorymn.com/ 

 The Honey Brothers Website: https://honeybrothersmn.com

 The Honey Brothers Instagram: https://www.instagram.com/thehoneybrothers/

Wizehire (for hiring staff): https://wizehire.com/

Paperless Pipeline (for transaction management): https://www.paperlesspipeline.com/  

Follow Up Boss (real estate CRM): https://www.followupboss.com/

 

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Full transcript here:

Mike Swenson 

Hey, Mike Swenson here with REL freedom. And today we've got a very special guest with us, we have AJ Pettersen. And AJ runs a team locally here in the Twin Cities. And we'll talk a little bit with with us about his journey going from starting out in real estate to where he's at today, and ultimately, where he's going in the future to be able to achieve financial freedom. So AJ, why don't you say hi, and give us a little bit of a background about yourself?

 

AJ Pettersen 

Sweet. Yeah. Thanks for having me. Mike. I'm happy to be on here. Yeah, so that that's a that's a little bit of the, you know, a little just about kind of what I'm about. I started my journey in real estate. About six years ago, I had just in terms of, I guess, financial talks, I had about 12 $100, I think we had in our bank account when I was done playing baseball with twits, and we drove home, and not quite knowing what was next. And I had a friend that had gotten into real estate.

 

AJ Pettersen 

So I met with him and said, Hey, would I be good at this and just kind of stumbled into it. And it's kind of led me down this crazy journey of being on a team and then being an individual agent, then running a team, investing in real estate, and everything in between. So it's a it's been a fun, a fun journey to where I am now. From a team perspective, I guess, real estate wise, like you mentioned, I run a team. for employees, nine agents will do about 275 transactions in 2020.

 

Mike Swenson 

Fantastic. So let's start out first, let's talk a little bit about the future. So when you think about kind of the the end game for you, and we know for everybody, it's it's not necessarily about hitting the point on the wall, it's about where you can allow yourself the choice to do what you want to do. A lot of real estate agents really love it, and they want to work till they die. Some people are excited to be out of the rat race and do something else. But when you think about your future, kind of what does that look like? Where you have the ability to make the choice of kind of how you spend your time what you want to do? Is that a specific number, what does that look like for you?

 

AJ Pettersen 

Yeah, I'm starting to transition into doing less transactions starting probably, I mean, now, really, so that'll be reflected in 2021. I'm still probably on pace to do somewhere around 70 transactions in 2020, which, for those that have done that many, it's, it's a lot, especially with like probably 45 buyers, which is a pretty big number of people I'm running around at showings. So what I've what I've started to do to get the wheels in motion for just backing myself out of that a little bit is in the interim, I have a personal assistant, now who also is licensed, my transaction coordinator also is licensed my team, I have an agreement with my team to do shut like to trade off on showings and stuff.

 

AJ Pettersen 

So I've increased my bandwidth in that way, but long term, my goal is to continue to support my team and essentially just run the team, you know, maybe 15 to 20 agents that are super high producing, I got crazy ideas like I'd like I'd like to have like 15 or 20 agents doing like 40 to 60 transactions a year, that's really my end goal with this. Because I think I can have an impact on that many people and doing that amount of business would be a you know, obviously have a large impact on their lives. So that's the part that I do enjoy about this. And then on the flip side of that, me and my brothers are along with our wives building out a somewhat of a rental empire in St. Louis Park.

 

AJ Pettersen 

So we're trying to always be increasing that we currently own 10 properties. So that obviously kicks out a nice amount of dividend payout, if you will, each year. We're I mean, we're very serious about increasing that to be much larger than it currently is today. So but I'm always like looking for what's next. I love owning a small business. So running a real estate team is really, really fun for me, just to kind of pull levers and navigate things, and then to see the impact it has on the agents on my team.

 

Mike Swenson 

Yeah, and as we talk about financial freedom, you know, a big part of that is, you know, we I really believe that you don't want to go at it alone, I mean, you can put your head down and you can sprint for a while, eventually what's going to happen is you're going to get burnt out. Whether it's it's it's either you're going to personally get burnt out, or you're going to leave kind of a path of destruction behind you and all the relationships that you have or the rest of your life might get completely off balance you might be out of health, you know that kind of stuff or you know, just just have this this this chaotic path behind you.

 

Mike Swenson 

So I really believe in the power of leverage and that's working. You know, working smarter, not harder, getting more efficient with your time, leverage through people so that you can bring others along you and that's what I really love about you know, you Going to accomplish your vision when you help, you know, 15 to 20, other agents do 40 to 60 deals, and they're going to be really excited to be in your world, and you're going to be really, really excited to have them in your world so you can achieve financial freedom with them and through them. And then also, we talked about leverage through different technologies.

 

Mike Swenson 

So do you want to talk a little bit about how you've gained leverage through, you know, primarily people, but also efficiency with your time as you've grown? From where you were to where you're at right now?

 

AJ Pettersen 

Yeah, so um, I talk about that often with our team, because I think when I say like, I'm gonna do 70 to 75 transactions, I've, I've learned every year how to do more sides in less time. And that's been really, really important. And like you said, That's twofold. That's having a transaction coordinator, having a marketing manager, like those things help a lot. My personal assistant, Ryan, I just added on, like, has taken a ton of things off my plate, like starting to manage emails and things like that.

 

AJ Pettersen 

So I can, you know, doing some of the amendments and contracts, since he's licensed and doing some of the showings and doing all these sorts of things. So leveraging those people has been massive, and finding the right people I think has been really important. I've learned over the years, like how to find the right people. Don't just necessarily like, you know, if you're looking for a transaction coordinator, don't just like hire your best friend, just because it probably be a dumpster fire and don't hire people like you hire, do things better than you do it different skills.

 

AJ Pettersen 

So I use a application. So speaking of, you know, switching that over to technology, instead of, you know, trying hard to network and find some of these full time positions, I actually use an application called wise hire, hire, and it it does a disc assessment, along with the application. And so it spits out and says, You know, I know 100 people apply, but here are the 10, you need to talk to right. And that saved me, like so much time hiring for the last two jobs. And then what it also did, you know, when you lose somebody in any of those roles, you lose a lot of time, and he was a lot of money, like we were without a transaction coordinator for a month, our business almost dried up, because no one knows how to work, the systems they were doing.

 

AJ Pettersen 

And we don't need backups. And there's all this paperwork, and it's just a total disaster. So hiring the right people that you can keep around is like vital, vital, vital. So the people I've had in these roles now I've had for a little while. And they're getting better at everything, too. So yeah, you know, that transition from people to systems with wise hire and the systems that my employees use to be more efficient. I always believe like, a very efficient staff person is going to be happier in their job, and they're going to feel less stressed out because they're more organized.

 

AJ Pettersen 

So I'm always talking about like, Okay, if they feel stressed out and overwhelmed, well, what did we either gave them too much to do, or we didn't give them the right skills to complete it in less time. So that's what we're always looking at in terms of systems. But yeah, I've got a ton of systems that they're using specifically paperless pipelines, a big one that we use for transaction management. Follow up bosses are CRM, and that's, it houses free and everything. And it's a great way to communicate from staff to agent. It records, phone conversations with leads, it records, text messages, you get unique phone numbers are signed calls route through them, like it's got literally everything on there.

 

AJ Pettersen 

And then we use a couple of other different platforms. And we have some third party contractors for a couple of different things. Tech based, you know, looking at the SEO contractor, and we have pay per click like Google Pay Per Click contractor as well. So we work we we've pared down the number of systems we're using on a daily basis. If if all the agency was going to follow up boss and work through that, they could make it accomplish a lot, as long as they understand how things are coming and going through the system. So I don't know if that completely answers all of that. But that's from the real estate team side of things.

 

AJ Pettersen 

That's, I think you kind of if you're running a team, you, you get to a point where you're like, Okay, we have, like I'm constantly following Dwight, our transaction coordinator, how many pending sales we have. So he got to 50 pendings. And he's like, I feel fine, I could do a lot more, then you get to 60. And he's like, I could I'm still fine. So like, we have to realize at some point, like, Where does my system break? And then do I either need to fix the system? Or do I need to add another person.

 

AJ Pettersen 

So you realize you get to like peak efficiency and organization. And once you hit that and you can feel that then it's like, Alright, let's hire Ryan, or let's get another transaction coordinator to handle, you know, be at 20 hours a week to start and maybe rotate into like a full time position. So that's all I'm trying to do all every day. I'm just trying to figure out like, Where is the system breaking down? We need to fix the system or do we need to add more people that's those are the two things that we're you know, always is trying to do.

 

Mike Swenson 

Yeah. And I think there's a few things that people sometimes overlook, you know that what I tell people is in real estate, you technically can do it all, you know, there, if you think about any other business out there, you know, let's just insert another sales job, let's say it's medical device sales. The person that's doing the medical device sales is also not the person figuring out, you know, how to have the knee replacement, you know, and so, and they're also not doing the bill, the billing, they're also not doing the scheduling at the hospital for the surgeries.

 

Mike Swenson 

And yet, in real estate, because you can do it all people tend to think like, Oh, I want to learn everything about the business. And what they don't realize is, there's a sacrifice, it's a sacrifice of time. And it's a sacrifice of getting to mastery, because you're trying to figure all these things, you're trying to become a master generalist versus a specialist. And for somebody like you, you realize the value of having great people around you, because you get to do more of what you want to do and what excites you. And then those people get to do more of what they want to do and what excites them.

 

Mike Swenson 

Because you know, the are a lot of your admin staff probably don't want to be frontline with clients, showing houses, you know, there might be a season or they might do that part time. But it's, it's not the thing that really excites them and energizes them. And so pretty quickly, you've been able to go from playing baseball to now you have a high performing team in a short period of time. And it's through leverage of systems and through leverage of people and understanding that and you're not sitting there going, Oh, but I want to do this and this and this and this, and I have to have my hand and everything. You're saying no, I want this person to run with this, this person to run with this. And that's how you get to mastery faster. And that's how you can build a larger team a lot faster.

 

AJ Pettersen 

Yeah, for sure. And I think the hardest thing for people like and it was hard for me to when I got started is people think that, um, that first, that first staff person is like the hardest one to hire, because you're like, do I need them? What if I end up like not being as busy as I thought I was gonna be? I don't like I'm not making that much money. Like, how can I afford this? I went part time to start with somebody until I realized that I needed someone full time. So that's, that's a tough one. I think on the other side of this, it's like, it's been so much easier for me just to be like 50 grand for this person, like I need this person like that's, that's gonna become easier and easier for me because I have realized that they aren't and they aren't overhead.

 

AJ Pettersen 

They're like an investment, like, they're going to return more than I'm paying them like, no question. Because I'm able to do higher dollar things. Or I'm able to spend on my bill cook dinner for my family more often, or I'm able to be there for bedtime, or go for walks in the middle of the day, or whatever it is. And so yeah, I think you're you hit the nail on the head, like it's, it's, that's been, I mean, once I hired my first assistant, I went from like, 29 to 56 deals in one year. And it's like, okay, so 27 transactions at right, like, you do the math on that. And you're like, that's like 250 $300,000 but I pay the person 50 grand. So like, and was I working a little more? Yeah, probably. But at the end of the day, you're looking at that going, I just got a 6x return because I got one person that was so simple.

 

Mike Swenson 

Yeah. Okay, so let's, let's dig in a little bit. So you've got you know, you had your your agent business, you've got your team business. And then another big piece from you is investments. And so I know you had mentioned you had 10 investments, primarily you're using the birth strategy. And so do you go on to kind of walk through that a little bit? How did you how did you get started on the first one? And then kind of what's your mindset is, as far as how did that grow to where you're at today?

 

AJ Pettersen 

Yeah, so like you said, we did the bur method by literally by dumb luck, like we I had owned a home in St. Louis Park. I pulled all my own permits to the basement, I pulled my own permits, and did all of the electrical, plumbing, ah, back and like everything for a bathroom in the basement. And so I had I had run ins with all the city inspectors I talked to, I got to know them. And then I did my kitchen. And then that was like, right at the time where like, let's we should think about like, my brother and I are like this would be fun just to have a like once a rental property. I'm like coos Park seems like it's kind of blowing up, maybe let's look there.

 

AJ Pettersen  

So that was that was about as complicated as we made it. Like we just started like making offers on properties. And I'm like, I'm a big risk taker, and my older brother who was with at the time on him isn't as risky as me. So it kind of balanced each other out. We also were both making pretty good money. So that was pretty helpful to fund the whole operation because the upfront capital investment can kind of be a lot if you're not going to you know, house hack it and you know, doing a duplex owner occupied or whatever, which we were just buying straight up 20% down rental property.

 

AJ Pettersen 

So we buy the first one not knowing kind of what the birth strategy is. And how we stumbled into it is I called the agent who was actually like from Elk River. And he didn't understand the point of sale inspection stuff very well. Because these third ring suburbs, there's no rules right and right St. Louis Park, for all who know is pretty hardcore about their point of sale inspection program. And so the house was on the market. And I went into the basement and I noticed that the, the floor drain was the shower was the drain for the shower in the basement. And I'm like, that's an unvented plumbing line. And that is not to code. And it's a finished bathroom. And the previous listing didn't have a bathroom down here. Like, you're gonna get killed.

 

AJ Pettersen 

So I called the agent. I said, Have you had your point of sale inspection yet? And he's like, Yeah, no, it's scheduled for Monday. I'm like, they're, they're gonna make you rip out the entire bathroom. Your house is on the market, right? And he's like, No, no, I don't, that's not gonna, I'm like, No, seriously, like, and I'm gonna write you an offer, like for full price. And we'll take that on, we're fine with it. But they're gonna make you rip it out. And like five hours later, he calls back, I said, we're making a full price offer, let us know if you get another offer, because we'll probably raise ours. He said, Well, we got an offer, we accepted it, they blocked like they did no inspection guarantee as is yada yada, yada and like, call me back when that dumpster fire falls apart.

 

AJ Pettersen 

So I'll be back a week later. And he's like, I had 60 people interested in this property. And you're the only one who really knew what you were talking about in terms of like what we were looking at? And I said, Yeah, let me just have the city out here. So I can talk with all the guys and see what they're gonna do. So I had already known all these guys. So I know my first name. I'm talking to the plumbing inspector. And I'm like, Kayla, what do you think? Like, what am I gonna have to do here? He's like, take the floor out here, do this, that and everything.

 

AJ Pettersen 

So we just built the whole thing out and made an offer. And that's how we got our first property. It was so dumb. And then we suddenly self funded all of the construction. So we're into this thing for like, 7580 grand. By the end of it, we're up 50,000 in equity, and I, we call a lender, like we just cash out, get the money out of this. And they're like, yeah, that's something people do.

 

Mike Swenson 

That's actually a strategy. And yeah, like, there's a favorite.

 

AJ Pettersen 

This was like, Oh, cool. So then, I mean, pretty much from there on out. That was what we did, we looked for, we look for homes that. So for people who know flipping like they look for ARV after after rehab value, to be 70, to be at 70%, like sort of purchasing all of my other into it, Gatsby at 70% of the future value. And some people go to 75, just because they have the fees of selling it right, there's like seven to 10% in fees around trying to get that property resold. So we tried to find homes that weren't that bad, or price that well, we knew that the flippers would be interested in that kind of property. And a lot of that has to happen off market.

 

AJ Pettersen 

So we're first starting, we're just buying stuff on the MLS. So we'd find homes where we can get 80 to 85%, maybe so we'd still make up 15 to 20% of equity. And then at the six month mark, we do the cash out refinance. And we usually the end of the property for I don't know, once we did the construction loan, so we started rolling out construction loans on them too. So then the banks paying us to redo them. And then six months later, I cash out and I'm only into it for like 20 grand, and it's kicking out, you know, 789 100 bucks a month, I'm like I'm making 50% of my money now. So for all the math nerds out there, you probably are following along with all that math.

 

AJ Pettersen 

But that's really how we did it. And then we we started just rolling and rolling and rolling. And we were pumping money into it too. And then once you get to, you know, eight or nine properties, they're kicking off, I think now like price $75,000 a year, then you're able to buy properties with the money from the other properties. So you're not necessarily investing as much of your own capital into it. But we added our younger brother and his wife on our last transaction. So now we have a team of six on the 10th property and they've got a buy an option for the rest of them. So yeah, it's been fun. It's moved really quick. Like we we've only been doing this for three years.

 

Mike Swenson 

So in all your properties are in St. Louis Park,

 

AJ Pettersen 

Yeah, they're all within about a mile. That was pretty intentional, we talk to so my mentor is Jim Rubin, he owns main properties LLC. And they own they own property. I think they still have like four or 500 units over by St. Thomas. And then they own. He owns I think he's up to like 1500 in Whittier. So he owns like half of the neighborhood. And that was one of his things he's like, if you're gonna start buying property, like you don't buy stuff in like Woodbury and then buy stuff in, you know, Maple Grove and then buy, it's like, you're gonna be driving all over eternity when something breaks, and you're gonna have to find contractors all over town. Right?

 

AJ Pettersen 

He's like, just buy him close, like, so now. It's like, okay, we have fall cleanup in three weeks. It's like we can do all the gutters and all the furnace filters and all that like in one day, you know, and properties because they're all I can do a map and I just go back home and they're the closest one is 12 minutes from my house and the furthest is 16 rally. So it's like super slick. And then the other thing about that is we we know the market way better now.

 

AJ Pettersen 

So I know all the prices better. I know all the rents better. I know how much every projects gonna cost in that in that specific area based on what My contractors are gonna say about the drive time for them also, like the pain of the inspections, and all that kind of stuff, I know what my bids are gonna come back at. So the ability to make decisions quickly is much easier now.

 

Mike Swenson 

Yeah, and that's, you know, getting back to, you know, trying to keep things as tight as possible to get to mastery more quickly. That's the ability to do that. If you're looking at properties, you know, one in every suburb, you're not going to know the market as well, you're chasing people all over the place, you know, certain vendors might only work in certain territories. But if you can just double down, double down, double down on an area that you're really familiar with. And it's very convenient for you. The ability to grow that a lot faster, it, it may take time at the beginning, but then all sudden, it just blows up in a great way. Because you know, the market and it's your sweet spot.

 

AJ Pettersen 

Well, yeah, the other kicker, too, is we're probably, I mean, potentially, we're the largest private owner of single family homes in the city. Like, there's a lot of apartment complexes and things like that, and they have their own little markets. But if people are looking for a single family, I mean, we've had people, we're now running on it, we're on Instagram, we have all sorts of other things. We're feelers we're putting out in that world where you can get affiliate, you can make affiliate money, you can get free stuff, you can get all sorts because we do these big remodels, right?

 

AJ Pettersen 

We get people on Instagram that reach out, they're like, you got anything coming up, I'm looking in St. Louis Park. And it's like, because they know we are in St. Louis Park. And we're like the go to people, we have signs now that we put out front so people can call us if if they want to know something about that property. We've rented two properties literally off of Instagram, without even putting on the market just because our presence is known now there. So yeah, it's like the right size. It's a big enough city. It's close enough to Minneapolis, but it's not like too big or I don't know who's gonna show up for my inspection.

 

Mike Swenson 

What other stuff do you got? Do you have in the fire here in terms of income and different streams coming your way?

 

AJ Pettersen 

Yeah, I mean, I've started researching, I'm guessing when you're talking, we're talking about financial freedom, you know what fire is? Yeah. So that I've researched the heck out of that community. So I've gotten a much better feel for like even things like budgeting, family budgeting. And I've, I've started to look into how they do stuff on the stock market. So I have investments, they're kind of like a financial freedom type brokerage fund that I'm just funding right now, with a blend of index funds, a little bit freaked out with what's going on, who knows where it's going, but I like that I have better control over my real estate.

 

AJ Pettersen 

And then obviously, through ESP, I've got the stock investment there. So that's been probably my best returner in 2020. Just because my blended prices on 6000 shares, like around nine bucks, I think. And it's up to I think it was down 39 maybe today. So it's up before ish, you know this, I mean, it's up four to four and a half times this year, which when these numbers get big, and I'm buying at a discount, it starts to be a big number pretty quickly, along with my icon stock that I got gifted back this year, and last year as well.

 

AJ Pettersen 

So that's restricted. And then revenue share as well. So we've I've obviously because I have nine agents on my team. I have two other teams that are on my downline that I support and help so yeah, I'm making a decent chunk of cash, nothing to scoff at on revenue share, which is pretty nifty. So yeah, kind of have like a lot of different feelers, they're all really real estate related other than the stock market.

 

Mike Swenson 

Yeah, I think that's the key. You know, I've I've talked with other people where, you know, you can have, you know, a dry cleaning business, you can have, you know, Christmas tree farming business or something like that. But when you're in real estate, it's easy to just kind of double down because you already have the knowledge, you already have the connections, you already have those vendor relationships. And so you can just keep, you know, filling up one bucket, move into the next move into the next and, and if you look at all your buckets, I mean, you're you're pretty successful in each bucket.

 

Mike Swenson 

And yet, if you look at where you're at three years ago, in those buckets to now there's a significant amount of growth and let's just use a nice clean number of let's just say, you know, 10,000, and each bucket will all sudden each of those goes to 20,000. Well, now you've just significantly grown your income or significantly grown your savings. And so those little things in five or six buckets really add up to one big bucket. And you can just keep adding more buckets or just keep filling up the buckets you have bigger

 

AJ Pettersen 

For sure and real and real estate's like the interesting one, because it's got so many factors working for you and not that many working against you. So like the rental thing, it's like okay, the I mean, you know, the market sales part is probably up 10% this year, so we own 10 homes, probably 3.5 million in value. Well now it's 3.85 so me and my older brother just split $175,000 in equity just by having A house literally doing nothing else, if they were sitting empty, it would have been the same thing. And you've got, you know, rents coming in.

 

AJ Pettersen 

So it's like I, when I'm talking stock, I talk, okay, equity appreciation is like a stock's value going up. The rent that we get in income from the properties is like a dividend. But then there's always other factors too, because you've got, like, just by owning it, I can say I make less money. What's the biggest tax loophole in the history of the United States, like, you get depreciation, you get to, you know, I did a big remodel project. So then we code things, different ways based on how we are supposed to do that with the tax code, and then all sudden, it spits out and says, like, you lost 80 grand, and I'm like, doesn't look like I lost 80 grand, but it counts to lose 80 grand.

 

AJ Pettersen 

So there's all these things working for real estate in terms of rentals. That, like you said, I mean, they can double triple it, and I have leverage, too. So I only, you know, I am only into them for a certain amount of money. So the banks, essentially, I mean, in this case, the bank is financing 2.5 million of it, but instead of me only seeing, you know, on my $1 million, only seeing the 10% appreciation, I'm seeing it on the whole 3.5 million, because there's like a 3x leverage, essentially, like a stock would have.

 

AJ Pettersen 

So yeah, the risk of it a lot like it just the rewards are so much greater than the risk on it. You know, one funny thing, though, that I didn't mention is, we are about to inherit kind of, and buy out a bird seed company from my father in law, who passed away about six months ago. So me, my wife, and her two sisters, and their husbands are planning to run a bird seed distribution company. So that'll be fun.

 

Mike Swenson 

Interesting. So now you do get to branch out to another industry. So what what advice would you give to somebody? Either maybe they're, they're new into real estate, and they're looking at how do I grow into either production as a solo agent, or maybe hiring that first assistant or starting a team? Or maybe somebody on the rental side? I don't really know where to start? How do I get started? What advice would you give for those folks?

 

AJ Pettersen 

I'd say on the on the real estate representation side of things. I tell everyone who's new join a team. And I don't just say that because I run a team, I literally started on a team. It's so hard to break in this industry as a solo agent, and people have done it. But you look at the numbers of like 85% of agents don't renew their license after two years, and you're like, there's such a high failure rate. So your chances of success by yourself are not nearly as good, like, give up some a bunch of your commission, it really doesn't matter when you're early on. Just getting those at bats and getting transactions on your belt is what matters.

 

Mike Swenson 

It's kind of like education, right? I mean, you're paying money to go to college, to be able to learn something, it's the same thing here, you're paying money to a team to be able to take advantage of all the learning that they have, and all the systems that they have, so you don't have to go at it alone.

 

AJ Pettersen 

Exactly, and you get transactions so much faster. So it's like, you get those at bats, you know, maybe a year or two down the road, you decide, I feel like I know this well enough. And you want to break off on your own and hire an assistant or you want to start your own team, whatever that is. But I say join a team. The other thing I say to people is, like, get organized, have a database, like most agents don't have a business plan, they don't have a CRM, they have none of that stuff. So I'm like, get a business plan, create a weekly checklist to make sure you're hitting hit that business plan.

 

AJ Pettersen 

So break down everything you're going to do in your business plan, and stick to it, get organized. And follow up with your friends, like be nice, be friendly. And that will like that's the first step to getting transactions. And then after that, it's like you say the word mastery. It's like learn houses like understand how houses work, learn the real estate market, learn new construction, whatever the heck you want to, like really get into really dig in and learn that so that it's not just your friends, you know, liking to be around you. It's your friends like to be around you. But they also want to ask you about the electrical panel and like, what is going on there, right?

 

AJ Pettersen 

Like all of that stuff, like have a good network of people for that. And then on the rental side, I would say the biggest thing that Getting started is either figure, it's figuring out what your strategy is, which could be I have 3% down, I'm three to 5% down, I do an FHA duplex and house hack, right. Like that could be a strategy. And then and then from like your initial strategy, make sure you have some long term like we want to buy and stainless Park. So that's our first step is to buy a house in St. Louis Park, and then let's figure out the rest from there. But like if you don't have a plan for what style of property you're trying to get into or what type of situation you're trying to get into.

 

AJ Pettersen 

You're just going to run yourself ragged. And then I would say that the other thing that I think most people get hung up on is they just don't jump in and do it. Most people that I represent are like wow I talked to my friend yesterday, and they think this and I'm like, this is not you buying a house for yourself, you are buying an investment property. So if, if you're gonna make the decision based on how you feel, or the emotions of it, like, I'm gonna tell you, you're doing it wrong, right?

 

AJ Pettersen 

Like, if you're gonna do it, you just have to do it like, so just, if you have the money, and you're pre approved, and you're trying to buy rental property, and you have a plan, this is my target property, and it is you find it off market, or it's on the market or whatever, like, make an offer, don't pitter patter and analyze it to death. Like, the only way you're going to get in is just by taking the leap.

 

Mike Swenson 

And we're gonna do that point. You can, you can plan and it's, you know, maybe you, you kind of just leaped in a little bit before planning at the beginning, and yet you figured it out. And so you can have the best plan. At some point, you're going to have to take the risk, because I've, you know, I talked to lots of agents.

 

Mike Swenson 

And so many of them say, I've always wanted to get into investments, it's like, well, you have all the knowledge, you have all the tools and resources at your fingertips, you have great vendor relationships, the thing that's missing is just taking the leap, you know, and you're gonna have to dive in and learn to swim at some point in time, and you won't get better at swimming until you get in the water.

 

AJ Pettersen 

Exactly. That's I mean, that's 100%. That's a great analogy. And I think it is funny because I talk to a lot of agents, same thing. They're like, Man, you own 10 rental properties, like how'd you get there? And like, I just jumped in and did one and then I figured out like, okay, that we could actually do really well like moving money from property to property and just continuing to buy them.

 

AJ Pettersen 

And if we sit in this nice little niche of property is we're, you know, we're going to do just fine. So I think that that's usually the advice I give people, like, figure out what you want, and then do it. Just do it. jump in, you're approved. Make a move.

 

Mike Swenson 

Right. All right. Anything else that you've got that you want to share in terms of your financial journey and where you're headed?

 

AJ Pettersen 

I don't think so. I'm always it's always changing for me, too. I'm always trying to figure out what's next. But yeah, I think once you Yeah, once you get to this point, it's more about trying to figure out your time than anything. So I I've been really focusing on, you know, maximizing the important things that I need to get done in the day and then figure out where I can, you know, hand time off to other people. That's been a big thing for me last like six months.

 

Mike Swenson 

Alright. Last thing, is there anything that you want to plug? While we're on here? You've got your real estate team. You've got your homes in St. Louis Park, anything you want to plug if anybody watching this wants to reach out to you?

 

AJ Pettersen 

I don't know, I guess you know, the Advisor Realty Group. I think we're the advisorymn on Instagrams, our handle. Check out honey brother, the honeybrothers on Instagram. It's, it's pretty cool. We do some like really unique things to our properties. So y'all just plug our social media and we love interacting with people in there. So comment DMS, whatever.

 

Mike Swenson 

All right. Thanks so much for having me. I appreciate it.

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