If you’ve ever wondered what it’s like to transition from being a hands-on real estate investor to a full-time private lender, this episode is your roadmap. I’m joined by Jon Chan, who shares his journey from managing his father’s properties to scaling a BRRRR portfolio—and ultimately finding freedom through lending. He’s candid about the lessons, headaches, and hard pivots that reshaped his strategy. Whether you’re in the middle of your first flip or looking to transition to more passive income, Jon’s story will give you the insights and mindset shifts you didn’t know you needed.
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Hello everyone and welcome back to another episode. I am excited to have with me here, thank you so much for joining me for this episode.
And thank you for having me.
Now I have known for a few years now and so I am excited for him to share his investing journey. I think there’s a lot of lessons to learn here and make sure you stick around because he’s going to tell us about partnerships and different kinds of partnerships and his wisdom there because he’s done a really great job of making a whole system for his investing now with everybody working in their zone of genius. So stay tuned to hear all of that wisdom and how you can 10x your results by partnering. Now, let’s start at the beginning. How and why did you get started in real estate investing?
So real estate investing was something that I never really thought that I could do. I went to school with an accounting degree and worked my way up the corporate ladder, moved over to consulting, and then my dad had some properties and asked if I wanted to take them on as a property manager. And so, decided, sure, why not? I like real estate. This will be a great way to learn. And then I was doing that for a couple of years and had heard that you get rich in real estate, but when I was running the numbers, it just didn’t make any sense. So I went on YouTube, how to scale in real estate and realized that owning rental property is just one piece of how you build wealth. And so I really got started going through bigger pockets and learning the burn method and how to acquire properties in different ways. And really the biggest motivator was COVID.
I was sitting across from my pregnant wife at the time, where we had our oldest in the living room because we had to pull out of daycare. I got really nervous, not really knowing what was going to happen. And I realized that if something would happen to either one of us, then it would put the other one in a bad financial spot. So I really decided to go all in, pulled money out of my retirement account, my wife’s retirement account via the CARES Act and just did long distance burrs.
Awesome. I love how you jumped in, realized there was a problem and that you were going to solve it. And what was your first real estate investing strategy that you did personally?
The first thing I did was the burn method and where I lived in Northern Virginia, the numbers didn’t really make sense in terms of what I was looking for, which was cashflow. Like if you buy a house in Northern Virginia, it’s going to appreciate like crazy, but you’re going to be negative in rent. And so I just honestly went on a journey of what city I wanted to invest in and just ended up picking Huntsville because I had been there for work. I saw the place called Research Park and there’s a huge military base. So I figured pretty stable economy and the prices were still pretty low at the time. So it was just finding an agent down there who invested themselves and then finding houses that needed work and just started doing that.
And how did burring go for you?
So for the most part, it went really well. I ended up getting five houses in the Huntsville area, two in the Chattanooga area. The one that my wife found in Chattanooga was actually the best bird we ever did because we were actually able to get all of our money back out, even with all the headaches that we had to deal with with our contractor there. And then at the tail end, the rates started to spike. So I had moved over into Baltimore and they were okay. Like they still cash flow, but not as profitable as I wanted so ended up ending my bird journey there.
Well, and I know you did run into challenges with births. Like it’s totally normal, right? It’s a strategy that can give you a great reward and yet it comes with some risks. And I think when people run the numbers on paper, they don’t realize all of the kinds of headaches that can happen. So are you open to sharing, you know, one or two kind of speed bumps that happened on your birth experience?
Yeah, I mean, I have a ton of speed bumps. One of them was a foundation fix. Well, I did two foundation fixes in the Huntsville area. The first one was supposed to be a $14,000 fix and was supposed to take, I think, like two weeks. Luckily, it was only like 15,000 because they didn’t need an extra beam, but I had to put in gutters in the back so that the water would stop running into the back of house. I didn’t realize that when you’re doing the foundation work, you can’t do anything on the inside of the house. So that slowed down renovations. The other foundation fix, same thing, supposed to be a $24,000 fix, but in three weeks, it ended up taking about two months because of the weather and all these different things. And now having to go back and rip out all the subfloor and redo that because the vents were not allowing enough airflow even though I put down the vapor barrier. And so that’s another one. The contractors in Chattanooga for whatever reason, it was supposed to take a month, ended up taking six months and I think 4.5 times the amount of costs to renovate. So, I mean, I ran into a lot of issues, but at the same time, I’m still better off now having them than not and a lot of lessons learned too.
Right, right. That’s great wisdom on that. Like things popped up, it wasn’t a smooth journey and yet in the end it’s still a win.
Yeah, and a lot of it is because we had, you know, my wife and I had good paying jobs. I think I see a lot of people where they see, you can buy a house with no money down or no money out of pocket, but it doesn’t mean you should have no money in the bank either because things pop up. So if you plan to buy, then you got to have good income to cover all of these unexpected costs.
Right? I mean, I think of burying as it’s a high reward strategy because it’s a high risk strategy. And one of the ways you can mitigate that risk, like you said, is you have an alternative income source, right? You have other money you can bring in, not if, but rather when things get more expensive than planned. Right?
Right, exactly. I mean, $10,000 for $45,000 is a huge jump in cost. And if you’re struggling financially, buying probably isn’t the best way to go.
Right. Yes. And what I’m hearing too is that you didn’t decide, hey, I want to do this lending thing and immediately sell all your properties and transition all the funds. You got started with what you had. You built up expertise. You got reps in, and now you realized, hey, I know this is a tried and true strategy that I’m going to pivot to 100%. Does that seem like a fair description?
Yeah, I mean, the biggest reason why I didn’t sell to begin with is because I wanted to make sure that my mom’s money was protected. And for me to hold onto assets and make sure that my balance sheet was asset heavy, I could then say, well, if something were to happen, then I could sell my portfolio and then, you know, pay her back. But now I’m just getting to the point where I’m done being a landlord at the moment. So now it’s just time to unload everything.
Right, right, that makes sense. So what does your private lending look like?
So I have done everything from first position short term to second position long term. But now I’m really focused. One of the biggest things is I see a lot of people that are making mistakes. They think again that you can get into property and real estate with no money out of your own pocket in terms of ownership. And so I’ve seen a lot of people make mistakes. A lot of people lose money. So I’ve kind of cut down my lending to just be one type of loan, which is first position only in one market with a super experienced operator. Experience is something that is, I see it as undervalued in a lot of ways because everyone wants to scale quickly, but that causes a lot of problems. So someone who has been doing this for a long time is where I’ve focused all my energy.
Is there a certain type of loan you’re doing now? You said you did a broad range before.
Yeah, so they’re all short-term, first position, all on single-family homes. Very simple, very easy to rinse and repeat, all in the Atlanta market. Because my partner knows it really well, has been doing it for 27 years, and it just makes life really easy that way.
Right. And what I’m hearing with that too, with you niching down is you have managed to avoid something that is tricky for a lot of real estate investors, which is shiny object syndrome. You’ve found one thing, you know, and you’re just sticking with it. Can you speak to like, do you ever think about doing a different market? Do you ever think, ooh, maybe I want to do that instead? Or how are you able to stay focused on this one thing and not get distracted?
Yeah, that’s a good question. The biggest thing is my partner’s been doing this for 27 years and he’s never had to leave his market. I mean, I’ve heard other private lenders do the same thing. I don’t know them personally, but when I talk to or network with others, I hear someone say they’ll never leave Houston or they’ll never leave Philly. And if these people can make hundreds of millions of dollars in one market, it means there’s more than enough opportunity. And even from my own experience, I have houses in Huntsville, Chattanooga, Baltimore, Ohio, and it’s a huge administrative headache having to keep up with all the different rules and regulations. If I had just picked one market, my life would have been a lot less stressful and I probably would have made more money. So yeah, really niching down to one area is really underrated, in my opinion.
I think so too. We all tend to think the grass is greener and hop to a new market. So very good point. Now I’m sure what a lot of listeners are wondering right now is how did you find this operator with this 27 years of experience?
It really is just being in a real estate community and then networking. I met him three years ago when I had first joined my real estate community. And I didn’t really think that we would ever work together. He was light years ahead of me and still is. But I just kept trying to bring him value. And eventually one day just asked like, if we were to work together, what would it look like? It’s just kind of how it happened.
Right? Because that’s the worst that’s going to happen. They say no and you’re right back where you started.
Yeah, exactly.
Now, I know you’re not based in Atlanta, so were you meeting in like an online community or what did that look like?
Yeah. It’s an online community that’s pretty much international, mainly US-based, but there are some people that are overseas. But yeah, the power of the internet. Like you and I are meeting and we’re across the world. Sometimes things aren’t always to your benefit in terms of just legal processes. Like if I go through a foreclosure here in Florida, I hear it’s a very lengthy process, but in Georgia, it’s like a month or two at most. So your location doesn’t really stop you from doing real estate transactions.
Okay. Perfect. So all of that. Now let’s talk more about partnerships. I’d love to hear—you partner with this operator, you partner with other passive investors who are bringing your funds. What would your wisdom be overall with having successful partnerships in real estate investing?
There’s a lot, right? It’s understanding each other’s values. I guess the biggest thing is understanding your own strengths and what you want to do and what you bring to the table. I spent a lot of time just kind of looking outward and not so much time looking inward. It wasn’t until May of 24 when I just started trying to figure out, what am I good at? What do I want to do? Where are the bottlenecks?
Because I was doing this on my own for a very long time and was able to accomplish a lot, but when I finally started to partner, was when I was able to accomplish more and do more. At the same time, I ran into a lot of issues with different partners. Some of them were my fault because I just didn’t know what I didn’t know. So one of the biggest things is knowing what is it you want to do and what you’re good at, and then finding people that complement you.
In my case, lending is what I want to do. So one of the biggest things that we needed are deals. So I found someone who’s an operator who knows the area, knows the market better than anybody else. Then I bring him value by bringing him capital. And when I was working, one of the biggest bottlenecks was underwriting. I don’t enjoy that. Operations, I don’t enjoy that. So then I found someone that is good at it, our values align.
We didn’t just jump into a partnership right away. We worked together for six months first just to see how we interact with each other before we even started that conversation. Getting to know who you’re working with, getting to know yourself—because you are getting into a marriage when you work with partners.
Taking as much time and effort as you would to choose a life partner. Very good point. Now, let’s talk about the other side of it. You have these people who want to be passive investors who come and you partner together where they’re bringing capital to the deal and you’re helping connect them with the deal, right?
Right, yeah. So the way that I got started with lending was through my mom. Then I saw the money she was making and I have a lot of friends back in Northern Virginia who all make good money and are putting their money in CDs. So I started bringing them in on lending opportunities as well.
But one of the things that I wanted to make sure of was I want everyone to make money. And in order to do that, I have to find a way to protect them. One of the ways was to personally guarantee all of their loans. So no matter what happened with the borrower, if I had to, I’d write a check, make them whole, and just take the hit. That was great for them. But then I realized I was putting my own family—my wife and my kids—at risk, and it’s not fair to them.
So I looked for a partner who really knows what they’re doing, has experience, and has the infrastructure to be able to protect our lending partners. I found it. He’s been in real estate for 27 years. He’s been fix and flipping, doing 15 to 20 per month. He’s also been lending for about 10 years. He uses $10 million of his own money and brings in about $17 million from capital partners.
If a borrower were to default, which has only happened twice in thousands of loans, he pays the lending partner their principal and interest, and adds that house to the fix-and-flip portfolio. He ends up making more money that way, so really, nobody’s at risk. That’s what drew me to him. Now I feel comfortable bringing in friends, family, and even people I don’t know that well into these opportunities.
I’m hearing a couple of great big-picture points. First, it’s a good green flag when the person you’re speaking to is invested themselves. Second, have a plan B—like your operator can fix and flip the home if needed. What else would you recommend if there’s passive or want-to-be passive investors listening to this call? What should they be looking for?
Understanding the security. Handing money to someone you don’t know well can be very scary. So there are ways to protect yourself.
First: who are you working with? Who’s your borrower?
Second: do you have all the correct documents? Title policy? Are you listed as a loss payee on the hazard insurance? Do you get a deed of trust or a mortgage on the property? Is everything going through a title company?
If someone asks you to send money directly to their bank account, that’s a red flag.
Then there’s a promissory note—how much money, what’s the return, how often you’re paid back, what late fees apply. And the personal guarantee—only useful if the guarantor has assets.
Assignment of rents is optional, but another layer. The key is making sure you’re secured by real property and it’s all done correctly.
So for someone coming in as a passive investor, how is everything set up structurally?
We manage the loan—we don’t touch anyone’s money. Borrowers come to us, we do our due diligence, and then present to potential lending partners. They review the deal, say yes or no. They’re the ones making the decision.
We prepare the documents. If corrections are needed, we fix and finalize them. Then it all goes to title. The title company sends wire instructions. Once everything’s recorded, they receive monthly interest-only payments during the life of the loan.
That’s great. What about the fear of foreclosure? What do you say when people worry about that?
It’s not your problem. You get your principal and interest back. We keep enough liquidity to cover that. If foreclosure is needed, we handle it. We have attorneys in place, and the investor doesn’t have to get involved.
And it’s so rare, right?
Yeah. If you have solid underwriting and experienced operators, foreclosure is rare. But if it happens, we still make it right. We’re all in this together, and we want everyone to win.
And if you keep everything local to one market, it’s easier to manage all those moving parts.
Exactly.
In the past five years, how has real estate investing changed your life?
It’s transformed everything. I started thinking real estate was just “see house, buy house, collect rent.” But it’s led me on a personal growth journey. The money is nice. But more than anything, it’s changed my relationships—especially with my wife and kids.
Growing up, I thought rich people were bad family people. But now, all I want is time with my wife and kids. Whether they want to hang out or not—I just want to be around them. Real estate helped me grow into someone more patient, more understanding. Weird that business would do that—but it has.
Let’s end with a few quickfire questions. What’s your go-to tool for managing operations?
Slack. That’s how my team communicates. We use Zoom to record walkthroughs and pass tasks via Slack. Everything stays centralized. Emails get lost.
What’s one piece of advice you’d give your younger self?
Slow is smooth, and smooth is fast. Don’t try to scale too fast. Build systems. Treat it as a business. A lot of people scale quickly and fail. I almost did. Systems and team building matter more than anything.
And a book that’s been transformational?
Chop Wood Carry Water. It taught me to enjoy the journey. We all focus so much on the destination, but the struggles of building are part of it. If you can enjoy the journey, the people around you will be happier too.
How can people connect with you?
Instagram: @jonchanrei. Send me a message. I love sharing education and experiences. I want everyone to make money. I don’t want anyone to lose money.
Awesome. Thank you so much, and thank you to our listeners. If this helped you, please like, subscribe, and share with a fellow investor. See you next time!