Paul Shannon is a real estate entrepreneur specializing in the acquisition of value-add, single-family homes and apartment buildings with a focus on conservative underwriting and cash flow. He is the Principal and Owner of Redhawk Real Estate focusing on providing high quality, affordable rental properties to Central and Southern Indiana communities, while providing stable and predictable long-term income to his investors. He is also a passive investor and a member of the Infielders Community of Left Field Investors and has written several blog posts for our group. In this episode, Paul talks about ditching the W-2 to go full time in real estate, overcoming the 4% rule for retirement savings through active and passive real estate investing, and how relationships and networking have helped his business.
Paul talks about how he realized the 4% rule wouldn’t work for early retirement which led him to look past traditional investments and into “alternative” investments such as real estate. He also discusses the self-limiting doubt of the possibility of losing his entire investment if he put money into real estate and how he had to overcome that in order to change his strategy and get more into “Left Field”.
Paul discusses the notion that with real estate – passive or active – one major advantage is that if you aren’t forced to sell, you can wait for the market to come back while you continue to collect cash flow during the down market.
Paul mentions when you start, the first deal is always the hardest to get into – it gets easier from there. He also talks about quitting his W-2 before he had replacement income and how the first active deal gave him the confidence to make the change even though the deal didn’t work out exactly as he planned.
Paul talks about relationships and networking and how his network helped with some of his decisions, including what markets to invest in and how important it is to find quality partners and how your partners are often the most important part of a deal.
Paul discusses his decision to invest passively for diversification of markets, but also to learn as an LP to experience how to be a GP in the future.
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