Reducing Inflation Will “Bring Some Pain”—What Should You Expect?

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2022-08-31 16:50:40

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What’s Homesteading All About? – RE/MAX Canada





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A home is the biggest transaction most of us will ever make. That’s why it’s important to work with an experienced and knowledgeable real estate agent. For more than 20 years, RE/MAX has been the leading real estate organization in Canada and beyond. With a presence in over 100 countries and territories, the RE/MAX network’s global footprint is unmatched by any other real estate brand. RE/MAX has always been an industry leader, adopting the latest technology and creating innovative marketing programs. RE/MAX was the first brand to expand its reach world-wide through a revolutionary global listing site, featuring listings from more than 80 countries, displayed in over 40 languages. Closer to home is RE/MAX’s deep commitment to the communities we operate in. Our exclusive Miracle Home Program allows RE/MAX agents to donate a portion of every home sale to Children’s Miracle Network.

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2022-08-31 13:24:17

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Living for “Free” with 63 Self-Storage Units

The older you get, the more you realize how much life costs. As a kid, it’s easy to take for granted the free rent and free meals, but what if you could get back to that? What if you could live mortgage or rent-free as an adult? What if you could have your meals paid for on someone else’s dime? In today’s episode, our guest, Nate Weintraub, shares how he lives for “free” with his three properties that total sixty-five units.

With a real estate investor as a father, Nate has always been around rental property investing. He never saw himself getting into real estate until he worked his first W-2. After seeing the realities of a nine-to-five, Nate decided to buy a property after college and pursue real estate. In March of 2020, he put a house under contract in Rochester, New York. Since then, he has purchased a sixty-three-unit storage facility in Alabama and is currently house hacking in Florida.

As Nate works toward financial freedom, he has made steps toward reducing his cost of living while still living a life he loves. In addition to being an investor, he does what he loves as a self-employed copywriter—BiggerPockets’ copywriter in fact. At only twenty-four, Nate lives rent-free in his house hack, his rental property covers most of his food, and his real estate investment trusts pay for his car.

Ashley:
This is Real Estate Rookie, episode 213.

Nate:
I don’t count on any of the income that comes from the rental or the storage facility as true income. I don’t touch it. It’s just for reinvesting for right now, but in my mind I can allocate that stuff. So basically, I’m living for free right now in the house hack. The rental property covers most of my food every month. And I invested in a bunch of real estate trusts, which you can invest in the stock market and that pays for my car. So we’re slowly ticking the things off, with each property that comes up it becomes how can I live my life for free? And if you keep your expenses down to a pretty low amount, it’s very easy to do that with a small amount of properties.

Ashley:
My name is Ashley Kehr, and I’m here with my co-host Tony Robinson.

Tony:
And welcome to the Real Estate Rookie Podcast, where every week twice a week, we bring you the stories, inspiration, and information you need to kickstart your real estate investing journey. And if you guys have not yet done this, we would really, really appreciate an honest reading and review for the podcast on Apple, Spotify, or wherever it is you consume this content. And before we get started I just want to highlight a recent review that came in, this one’s from Iscriminator. And Iscriminator said, “Every episode is unique. I’m glad you guys do what you do. I’m addicted. I discovered you guys three weeks ago and I’ve been binge listening and catching up. Hopefully, soon I can share my success story with you.” So guys we appreciate all the honest ratings and reviews, it helps us reach more like-minded investors just like yourselves. So Ashley Kehr, let’s get into some boring banter. Tell me what’s going on. What’s new in your world today?

Ashley:
While we were actually recording this podcast, I was having an inspection done by a home inspector on a lake house that I have under contract. And this is the first time that I’ve actually hired a home inspector in probably five years I think. So really exciting to have a bit more peace of mind of what’s going on in property than just buying such a dilapidated property, where I already know there’s so many big issues that it would be a thousand page report from the home inspector, so why even bother hiring them. So excited to see how it turns out. My business partner went there and met the home inspector and there was no big red flag, so we’ll just get the final report and hopefully be moving forward.

Tony:
That’s awesome. The reason you haven’t gone much is because you knew you were going to have to gut the whole place anyway.

Ashley:
On other properties. Where this property it’s turnkey, we really shouldn’t have to do anything to it. But we just wanted to get just an inspection report on it, just because we’re buying it at a turnkey price.

Tony:
And want to make sure it’s solid. For all the inspection reports that we’ve done, I don’t think I’ve ever been there in person when the inspection was actually taking place. Usually, I’ll just get it afterwards and I’ll call if I have any questions. You said Darrell was there at the property today walking with the inspector?

Ashley:
Yeah. And actually the seller was there too, because he let them in. But when I first started out and I had inspections done on every property, I would go and I would just follow the inspector on just because I wanted to learn.

Tony:
Learn. Right.

Ashley:
Darrell brought back this binder of stuff that I’m like, “Wait, where’s the inspection report?” He’s like, “Oh no, they send it later.” Where five years ago when I was having it done he would hand write it as he was going along, and he got it at the end of the inspection and would go over it with you. And so when I stopped using an inspector, I would go through the property using his inspection checklist and-

Tony:
Template.

Ashley:
… his sheets. Yes, template and go through the properties myself and look at everything. And obviously I couldn’t do everything like check the electrical outlets, things like that, but it really helped me get familiar with what actually a home inspector does.

Tony:
There you go. What a great tip to start today’s episode.

Ashley:
So Tony, what about you? What’s going on?

Tony:
Yeah. So much is going on. We’re still working on our big BRRRR deal, so we got until the end of August to get that one closed, so making steady progress there. We’ve got a few flips that we’re working on. We’ve got a new short term rental that just went live two days ago, another one we literally just published today. So just lots of things happening, so we’re excited for the next couple of months here.

Ashley:
Yeah. Well, that’s awesome. And I think we are both very excited about the guest that we have on today.

Tony:
Yes.

Ashley:
So we have Nate on who is actually the copywriter for our podcast. We’ve never really gotten to put a face to his name that we see all over the podcast stuff, so this is awesome to really be able to meet him too along with hearing how he got started in real estate.

Tony:
There’s this misconception maybe about all the folks at BiggerPockets that everyone’s just this massive successful real estate investor, but it’s not the case a lot of people are just getting started. And Nate’s at three properties right now, two of those are single family type residences, but one is a self-storage unit. So we spent a pretty good amount of the episode talking about how he graduated up to self-storage, how he educated himself on analyzing and the process that he’s gone through to manage that property as well. So overall, just a lot of really good nuggets from Nate about breaking into the world of real estate investing.

Ashley:
So if you read the description of this podcast and you did not think it was great, blame Nate.

Tony:
Nate, welcome to the Real Estate Rookie Podcast, we’re super excited to have you. And before we get into your story, I just want to let everyone know that Nate you are actually a very, very, very important part of this Real Estate Rookie Podcast. Literally, every piece of copy that anyone has ever read about the Real Estate Rookie show came from Nate’s fantastic artistic marketing. I don’t know I’m running out of adjectives. I’m trying to be like you man, but you’re the copywriter for everything Real Estate Rookie. So super excited to have you on the show, man, but tell folks a little bit about yourself.

Nate:
Thank you so much, it’s been fun working with BP. And I’ve gotten to see every single time Tony’s worn a black shirt, it’s every episode, it’s just black shirts. There’s never a gray, there’s nothing, so he keeps that vibe going the whole time. So I’m the copywriter for the BiggerPockets Podcast. I started about a year and a half ago, we were probably in the high 300s on the regular show. You guys were much, much earlier than that, but I basically look at and watch every podcast that comes out from the BiggerPockets Podcast network. We write all the titles, the descriptions, so if you don’t like any of them, you can email what’s your email Tony?
[email protected], that’s the email you can email. But it was slightly before I started working with BiggePockets, I had just started getting into real estate investing. So obviously, digesting this on a daily basis, a multiple daily basis has helped out a lot. And it’s just been great to listen to Ashley and Tony give insight to other investors that are new like me.

Tony:
Yeah. I think there’s this idea that everyone that works at BiggerPockets is already a real estate investor, but it’s not the case. There’s quite a few people who haven’t started yet, or at the very beginning phase of their journey. And obviously, Ashley and I get to chat with a lot of folks at BiggerPockets, and it’s always so cool to see people start from zero and build themselves up. And Nate, you’ve got an interesting story as a real estate investor as well. Just give us the background. You were already thinking about real estate investing before you came on at BP, but take us through where that journey has led you so far.

Nate:
Sure. So from the very, very start, I grew up with a real estate investor as a father. My dad had been investing in rental properties before I was born, so that has been ingrained in me for a long time. The problem was growing up with someone who is heavily into single family and small multi-family rentals, you can see the headaches that come with it. So every single day it was not unusual for my dad and I to be talking and then he’s like, “Hold on.” And then he’d pick up the phone and it’s his handyman and a strong Southern accent, and I still have no idea what that guy was saying. Talking about a plumbing issue, a lighting issue, painting, something like that because he was running this small portfolio with his partner. And there was just a lot of things to take care of all the time.
So the 5:00 AM phone calls, the toilet calls, all that stuff that everybody dreads that’s scared of. It wasn’t a thing that I had to really like, “Oh, is that a possibility when I buy a rental?” I saw that growing up the entire time. The downside of that was because I saw that so much, it didn’t really seem like an option for me because I saw my dad stressing so much over it. And obviously, it had huge benefits for the lifestyle we were able to live. I never had to worry about any mortgage being paid or food or anything like that, because he was investing from a pretty young age. But I didn’t know that was exactly what I wanted to do because I seemed to only see the downsides of it. I didn’t see the nice life I lived around me.
I just saw, “He’s always on the phone. He’s always talking to these guys. He seems stressed a lot, there’s eviction, stuff like that happening.” So I remember when I was 16, he tells me he’s like, “Nate, when I don’t want to do this anymore, I’m going to give you all these rentals.” And I was like, “Please don’t do that. I don’t want that.” Which I know for everybody listening is like, “Are you kidding, that’s the opportunity of a lifetime.” But I think when you’re growing up, you just see the hassle a lot.
So it wasn’t until I started working at an internship close to the time I was leaving college when I was like, “Oh, this is how people actually work W-2s in the real world. I understand why he was doing this the whole time.” Because I had always had small businesses that I relied on for money from age 16, up to early 20s. So when I saw what the other reality was, which I know you both know very well, it clicked to me that, “Okay, there is a reason for all this stress.” It’s a worthwhile pursuit to do that.

Ashley:
That stress is better than working a 9:00 to 5:00 job.

Nate:
Yes. And that’s the thing is you always have to think about that, you’re going to suffer either way in life. And so are you going to suffer doing what you like and having control of your life, or are you going to suffer at the helm of somebody else and that’s your choice. So he chose the right thing in my opinion, but as I’ll tell later in the story I went a different way because I didn’t want to have the full throttle amount that he was handling.

Ashley:
We had this guest on once that was talking about how when he got his first rental, he got his first call from the tenant and they had a maintenance request, and he was just panicking and full blown anxiety and just like, “Oh my God, this is the worst thing ever,” and blah, blah, blah. And then he hung up with the tenant, he called somebody to go take care of the plumbing issue. And then he was like took a breath and was like, “Wait, that was just five minutes of my life and this lady is paying me a $1000 a month,” or whatever it was.
“I just made a $1000 for five minute phone call. That’s the only issue I had that whole month, it was that five minute and I panicked for no reason.” And I think that’s a great example, there’s going to be headaches, there’s going to be things you don’t want to do, but it’s so minimal and minuscule compared to other opportunities such as 9:00 to 5:00 jobs to make money in life.

Nate:
Exactly.

Ashley:
So tell us a little bit more about what you did before you started in real estate, and what made you decide to actually buy that first property.

Nate:
So during that internship, when I was looking around at everybody and I was like, “What are you guys doing?” And everyone’s just the same thing it’s like, “Oh, on the weekend I go out, I come home, I sleep and that’s it.” And I would talk to people about their finances because I’m generally interested. Now you can do that when you’re a younger person at an internship because people will just be like, “Oh, he’s young, he’s stupid. He doesn’t know that’s pushing the boundary.” Use that, do that when you’re young because people won’t mind. But I was talking to people like, oh, financial stuff, “How are you investing? Are you doing your Roth? Do you have any rental properties, stuff like that?” And the amount of people I talked to who were doing nothing really scared me, and I was just watching it week in and week out.
So I kind of clicked where I was like, “I think I should try and buy a rental property after college.” So at the internship I started going on Zillow and it was just looking at markets, looking at how much the prices of every house was in different places that weren’t crazy unaffordable, like my home state of California. So after I got a W-2 after I left college and then a year after that this was during about a year and a half after, so this was March of 2020. So the best time to buy real estate ever, nobody said it was a stupid decision at that time, everybody said, “Great. Buy during the pandemic.” I put a house under contract in Rochester, New York, Ashley, which I know that you’re probably well aware of.

Ashley:
Yeah. It’s like an hour from me.

Nate:
Yeah. This is a very heavy cash flow market, and I think when you’re young you care about that a lot more and you’re just like, “Oh, I got to get cash flow so I can retire early,” stuff like that. So I put a full cash offer in on a $40,000 house in Rochester, New York. And I had it under contract March of 2020, we didn’t close until June of 2020, it took that long, and that was the first investment I made.

Tony:
But before we keep moving Nate, can you just give us a brief overview of what your portfolio looks like today?

Nate:
Yeah. So I have the house hack I’m currently living in Florida. I still have that Rochester property and we also bought a self-storage facility, a 63 unit self-storage facility, me and two partners last month. So it’s just three properties, but I guess I can say 65 doors, which makes me sound really impressive. Can I say that at a meetup?

Ashley:
I would say don’t say just three properties because that’s still impressive. I think there’s people already drooling right now, “He has a self-storage facility. I want one of those.”

Nate:
That was me for a year, I was like, “How are you people doing this?” But with that first property it was really entirely cash flow. It was not a good market, I’m sure I can talk to Ashley about this later. It’s not a very good market. It was a C neighborhood. It was a C house. It wasn’t super taken care of. The saving grace, which was the reason I probably still invest in real estate now is that I had really good inherited tenants, really good people who the entire time during COVID, when they couldn’t have paid me, tried their hardest they could to pay me the whole time. And it was the same thing Ashley that you were saying before where as soon as I closed on the property, I remember I was going to sleep that night after everything was done.
And I was like, “Oh my God, they’re going to call me and something’s going to happen. I’m going to have to call someone else.” And that happened and you just get over it. But that was the first property and I think buying in a C neighborhood, a C property with still very good tenants, but not the best house, not the best area, the cash flow was fine. But buying that residential real estate and realizing that I was like even if I’m picking up the phone three or four times a month, and it’s maybe taking me one to two hours of work to do this rental property stuff. The scale of doing that isn’t that fast with just buying a single property at a time, and that led me into maybe we should try something a bit bigger.

Tony:
And I definitely want to get into the self-storage piece Nate because I think people are always intrigued by the idea of going bigger. But before we do, so you’ve got a property in Rochester, where’s the self source facility at, what state?

Nate:
The self source facility is in Alabama and I’m in Florida.

Tony:
Alabama. Okay. So you got one in Rochester, one in Alabama, this other one in Florida. So walk us through your process for choosing a new market to go into. What is your analysis and due diligence looks like? And at what point do you say, “Okay, this is a good market let me sink my teeth in. Let me start submitting offers.”

Ashley:
When you bought the Rochester one, was that when you were living in California, that’s literally the farthest point across the country to choose.

Nate:
I don’t know what it was, but I’ve never been to New York. I tried to go to upstate New York one time to look at the house during COVID and they were like, “Get out. You’re from California.” I was like, “Okay.” So I couldn’t do that. I don’t know why I chose the farthest part-

Tony:
Wait. So Nate, you still haven’t seen the property in person-

Nate:
I still haven’t seen the property in person, and I’m probably going to sell it soon so I can move it into more self-storage. But no, I never saw it, I don’t know why I picked that far away. But when I was doing it, I wasn’t very educated on choosing a market in the first place. It was literally just does it cash flow? Is my house going to get damaged by some really bad thing? And if it basically was there’s two to 300 plus dollars of cash flow and I feel like my tenants can safely live there, that was kind of it. That’s not the way you should do rental property analysis at all, but it’s worked out until now, it was very basic. I was a complete beginner.

Tony:
But Nate there’s several thousand miles in between California and Rochester and there’s thousands of other potential cities in between those two location, so what was it about Rochester that made you even begin to look there?

Nate:
They don’t have an increasing population, but they have a pretty large population, it’s 200,000 plus, their houses are relatively cheap. I bought the first house 40k in cash and I’m a very financially anxious person probably as it is. So for me buying something in cash took away that fear of a mortgage collector’s going to come after me. I just wanted to do the first one in cash just as a complete learning experience. Because I didn’t want to mess with any leverage when I really didn’t have any idea of what I was doing. So that was a market that hit, the population was relatively big, I knew there was a lot of renters. The cash flow was giving me two to 300 plus bucks a month, that’s true cash flow after everything. Their Section 8 laws are also really good. So that was another thing because I was buying in a C class neighborhood, I knew that I could probably get Section 8 renters there.
The thing is the house I bought it for $40,000, it could be rented on Section 8 for 1480 right now. So what is that like a three point something percent, it’s insane. But I just knew that there were options that I could take if something really went bad, because there is a pretty strong Section 8 market in Rochester and they seem to be able to give out the money quite freely. I had a few points where I felt like I had some defense going into the deal that I felt comfortable with that. Why I didn’t do anywhere in the Midwest it was just I looked at so many markets and nothing was matching that I can buy this in cash, making cash flow metrics. As soon as I got there I was like, “Let’s just do something,” because I was tired of waiting.

Tony:
So Nate something else you mentioned that I want to dive into is the fact that you still haven’t seen this property. So for a lot of new investors there’s a high level of fear and anxiety around buying property sight unseen, but you were able to do this nonetheless during a pandemic. So walk us through what your process was for completing your due diligence on this property that you were never able to see in person.

Nate:
So the first thing I would tell people is if you’re going to buy a residential property, probably see it in person, unless you have a really good team. I had obviously we did a full inspection and everything and we had about three months of closing, so there was time to do it multiple times. I had an investor friendly agent who I found probably through BiggerPockets that I got to go into the house and do the full Zoom videos with me, so I could see everything. Also when you’re buying a rental property in Rochester they make you go through a certain I forgot what it’s called, but you have to get a certain rental qualification.
Someone has to go into it from the city and make sure that it’s livable, so that passed. I looked at it with my real estate agent and I got an inspector to look at it. I also had a few months after I bought it, now this was after the fact. I had a handyman that my father knew in a neighboring state drive up there and do a full deep dive into everything that had to be done there. But it was basically inspector, the city and my agent who were all able to lay eyes on it before I wanted to dip out of the deal if I wanted to.

Tony:
Nate, I’m so glad you mentioned that because that is exactly the same advice that I give to new investors as well. It’s like Nate, you had never purchased a rental property before, so how much value do you believe you would’ve added on top of the city inspector, your agent and a professional property inspector?

Nate:
Oh zero. I’m a first time homeowner right now house hacking. I was impressed that I installed a sink in the bathroom. I don’t know anything about construction. If you show me an electrical box and you’re like, “How many volts?” I’ll be like, “I can’t even read this. I don’t know.” So if you’re someone who’s new that’s getting it and you know that there’s people, who have experience that you can trust that can do the things that you can’t do. I could say you could feel pretty confident buying an out-of-state property that you’ve never seen, because it’s like what you said what are you going to provide that they can’t?
If you’re coming from a background like mine where it’s like, “I know the numbers, but mechanically I know zero,” there’s not much I can add to that besides do I feel safe in this neighborhood physically, and for some people that might be worth it to go see it. But I asked my agent, “What do you think about this? How do you feel? Is it okay as a rental?” And he got back to me on all those questions, and we were talking every day about this stuff. So I had someone I could trust that I could ask.

Tony:
Nate I do think there’s a ton of value in obviously being able to see the property in person, but not so much for anything other than emotional. I think for a lot of new investors there’s just a sense of emotional, I don’t know, you just feel better as a new investors if you can see the property in person. But usually if you’re a new investor, that’s never purchased a property before, you’re just going to walk around, take a look, “Oh, this looks good.” You’re not going to have a really technical or critical analysis of what needs to be done to that property.
But you can get an inspection report and see that, “Hey, this panel is an old panel that might need to be upgraded,” and you can take that and get a quote. Or you can see that, “Hey, there was some leaking in the roof here in this bathroom that looks like maybe it was a bad patch.” You can take that and say, “Okay. What’s the quote to get that corrected?” You can take all the information that’s in an inspection report, shop that around to other qualified professionals, and then you’ll get an idea of whether or not that property’s still a good deal. So that’s always my advice for new investors is to have a property inspector agent, if you can get a contractor to walk through it, let the professionals be the ones to give you their opinion on the value of that property.

Nate:
Yeah. For the house hack I’m living in right now I came here. I came from California for me to look at all the properties because I’m living in this property. I’m also going to be living with other people in this property, that’s emotional value to me that I need to feel safe in my own neighborhood. If it’s your own house you’re living in, you’re like, “Oh, there’s a fountain out there. I love that fountain. I don’t know why, I just like it.” But that’s something that it’s not the same with a rental property as it would be when you’re living in there, so I completely agree.

Ashley:
There are those differences. And especially even with doing the due diligence, there may be things that you’d be able to live with if it’s your own house or versus if it’s a rental, it can go either way. But Nate, I want to know are you managing this from afar or did you hire a property management company?

Nate:
I learned from my father that 90% of property management companies are not great. And most people told me they’re in the Rochester area, I talked to so many agents and every single one said, “None of the property managers are good.” I tried to reach out to someone they didn’t even get back to me, that was like, “Oh, that’s the sign.” So I’ve been self managing it for two years now. I have a very good relationship with my tenants. They’ve done right by me so many times and as soon as they need anything fixed, they call me and I call whoever needs to come out and take care of the house.
It’s worked out fine for me, I haven’t gotten a call from them in a month and a half. If it’s a busy month I’ll get maybe three calls and it’s just stuff you have to deal with. But not even the money saving part of it, I felt like it was important for me as a first time investor to manage the property myself, even if it was out of state. Because I feel like I know so much more about not only my tenants, but the house through just talking to them through any issue that comes up.

Ashley:
Are you using any software or anything to make them pay their rent online, or they submit their maintenance request online or anything like that?

Nate:
I wish because I work for BiggerPockets I hear this enough. No, but I don’t though. It’s just because I had that one rental, I think if it was beyond that I would. But it’s so easy for me to manage everything internally, that I don’t have anything. I tried Stessa for a bit, that was fine, but I don’t know why I’m such a spreadsheet freak that I like my own stuff much better.

Ashley:
So you’re a lady in the streets, but a freak in the spreadsheets.

Nate:
Yes, I am a lady. I think if it’s just one property and you’re really trying to get nitty gritty, it’s fine. But I think anything past that where you have multiple tenants, it makes no sense to not use all the free property management software that’s out there.

Tony:
So Nate, I want to talk a little bit about your move as well. Now you were in California, you’re SoCal like me and you packed up a move to Florida, and I just want to know what prompted that move, was it a cost saving thing? Was it because you wanted to invest there? What was the motivation and what have been some of the benefits of making that move?

Nate:
I lived in San Diego, so for me being by the ocean is very, very important. Now there’s no waves here because I’m on the Gulf side, but there still is the ocean in a relatively short distance, so that was nice for me, but the biggest thing was probably affordability. Tony and I lived in California or he lives in California, I lived in California. I think the average home price in San Diego is about $800,000 right now. And even if you can afford that it’s hard to make that sense. I have friends who are house hacking in San Diego and even with the subsidies from renting out another room as a medium term rental, something like that, they still have to pay three to $4,000 a month just towards PI, CI stuff like that. So for me it was a lot of cost savings.
It’s not only that, you can buy a house here for 400,000, my house is 428,000 and I should be able to subsidize the rent by about 75%. And on top of that, I also now don’t pay any state income tax. So even though I’m not living for free on paper, I am living for free because I’m saving enough from state taxes that covers the rest of what I would be paying on my mortgage. So for me it was like, “I can be close to the beach, this area’s growing a lot.” I’m in Sarasota, so it’s close to Tampa, so it’s growing a ton. It’s a very nice place to live. The school systems are great. You’re close by the beach and I get to essentially live for free. I don’t really know why I wouldn’t do that, especially when I don’t have so much physical attachment over to San Diego that I couldn’t.

Ashley:
Do you have any other tips or tricks? It seems like you’ve gotten a great plan in place to live for free, but do you have any advice for our rookie listeners of some creative strategies that they can do to reduce their living expenses?

Nate:
I mean you can rent hack if you’re renting a place and it allows you to sublet it to other people, you can rent out another room that you’re not using. I know people that have rented out their garages as storage. You can get a couple hundred dollars a month for that. If you’re thinking about making a move for house hacking, definitely visit the area first, but look for the places that seem like there’s a lot of businesses going into them. Tampa’s a big part of that and that equals job growth, which usually equals more pay, so then everything is probably just going to increase in price.
Also Sarasota’s a place with very, very low inventory and you have to basically whack down jungles to build here, so there is some barrier to entry for new homes. So if you’re looking for some place that is going to appreciate that you are going to be able to subsidize your costs, just look at where the population is moving towards. Look at your total cost with state tax savings, if you’re going from one state to another state and go on roomies.com or roommates.com and look at what a room could rent for. And then just use the BiggerPockets calculators to go calculate out how much money you would save.

Tony:
So Nate, I know you’ve got the house hack going on, which is fantastic, and we recently had Craig Curelop on an episode where he gave all the ins and out outs of house hacking. So if you guys haven’t listened to that episode, go back and listen to that one. But Nate I know something else that a lot of folks use, as they’re building their portfolio they’ll say, “Hey, this rental is to cover whatever my credit card debt or this rental is to cover my student loan payments.” Are you using any of those strategies as you build your portfolio?

Nate:
Yes. 100%. I don’t count on any of the income that comes from the rental or the storage facility as true income. I don’t touch I. It’s just for reinvesting for right now, but in my mind I can allocate that stuff. So basically, I’m living for free right now in the house hack. The rental property covers most of my food every month. And I invested in a bunch of real estate trusts, which you can invest in the stock market and that pays for my car. So we’re slowly ticking the things off, health insurance is going to be a tough one because I’m self employed. With each property that comes up it becomes how can I live my life for free? And if you keep your expenses down to a pretty low amount, it’s very easy to do that with a small amount of properties.

Ashley:
So Nate earlier you said that you’re getting about $200 per month cash flow was it on that Rochester house?

Nate:
It’s probably 300.

Ashley:
300. So you said that covers most of your monthly food costs.

Nate:
Yes.

Ashley:
How much are you spending on a meal?

Nate:
I bet the producer Eric told you guys about this. I watched The Money Show because I’m also the copywriter for that. And I’ve always been a pretty frugal person and it’s made sense to me my whole life that the less I spend, the closer I am to financial freedom. So my girlfriend and I consistently will eat out for probably $25 or less. And if it’s over that we look at each other and we’re like, “What are we doing? This is insane.” We just buy a bunch of vegetables and beans and stuff like that and eat that stuff all the time.

Ashley:
The Dave Ramsey, beans and rice.

Nate:
Exactly. Oh my God, I get those Taco Bell, just bean and rice, no cheese. Just bean and rice burritos those are a $1.50 and I’ll just eat four of those at a time. There’s ways to do this people.

Tony:
So Nate, I want to talk a little bit about the self-storage piece because I know that’s an asset class that I’m super excited about. And I think honestly after we do short term rentals, self-storage would be the next asset class we move into. So I’m just curious, so you have this new one that you just got on your contract, 63. What do you call them in self-storage? They measure by the square footage, however many square feet typically. But anyway, so you have these two residential properties and you leveled up pretty quickly into this massive self-storage portfolio. Talk us through, A, why you made that decision to kind of level up, and then, B, how did you even start educating yourself on what is a good purchase in the self-storage asset class?

Nate:
Learning about this whole different asset class it’s just weird if you’re a residential investor. Because for a long time you don’t think you can buy these things, you think that’s for really rich people. Only they can buy self-storage facilities, only they can buy hotels and motels and camp sites and all this stuff that you guys are doing now. It takes a big mindset shift for you to realize that there’s not really a barrier in entry to any of this. There’s just, can you do it? And if you think you can do it, you probably can. So what was happening was I have someone who I used to work for, she was my manager at my old job and we were always talking about real estate at work. So she ended up buying a duplex in Cleveland around the same time I was buying the single family house from Rochester.
About a year later, she texts me and she’s like, “Can I pay you money to help real estate coach me?” I’m like, “I don’t think I can accept money. I have one unit, that doesn’t really seem like an acceptable amount to do coaching.” But I was like, “Do you really want to buy more real estate?” She said, “Yeah.” I said, “Why don’t we just go at it together and then just pull our money and do it together?” Because I trusted her, I worked with her for so long. So originally, we were thinking apartment complexes, but then we got on the whole topic of the toilets and the trash and everything else like that. And that over time it blended into, “Okay. So what should we do?” And we were thinking, “What can we do that’s not residential?” And then we had two options, mobile home parks and self-storage.
They both kind of operate the same, because both of them you’re literally just paying for a spot somewhere, that’s how it works. For mobile home parks, most of the time the mobile home owners will pay for all their own maintenance. Is self-storage, I have a concrete box. And it’s like in those movies where the angel scene because someone realizes something, that’s how I felt when I realized that somebody would pay money to put their stuff in a box. I didn’t realize this before, but it was so amazing when I realized it, so we shifted gears towards that. And then we hunted around for a deal for about a year before we finally got one. But the way that you would get educated on that is you read books, you read books by AJ Osborne. You read books like what is it Crushing It in Commercial Real Estate, is that by? Why am I forgetting his name?

Ashley:
Brian Murray.

Nate:
Brian Murray. And there’s sites. There’s tons of people talking about it on BiggerPockets, there’s sites like Storagerebel, stuff like that. It’s very easy to get self-storage information. And anytime I had a question, “Does it need to be climate controlled. What unit breakup do you guys have on your facilities?” I could just ask it in a forum and someone would answer it, and that was pretty much how we got educated on it. I don’t know if I answered the full question, maybe I went on a tangent.

Ashley:
Well, Nate, can we use this as your deal dive here?

Nate:
Yes, we can do the rookie deal review. Let’s go.

Ashley:
See, he even knows the name of it better than I do.

Nate:
Yeah. I’m ready for this.

Ashley:
Okay. So I’m going to rapid fire you some questions and then you can go into the story of it.

Nate:
I’m completely unprepared.

Ashley:
Okay. So you had mentioned this deal was in Alabama?

Nate:
Yes.

Ashley:
And how did you find the deal?

Nate:
So when I was looking for off market self-storage deals, I would be calling everybody throughout Florida, Alabama, Sun Belt area. And I found a deal that didn’t work for me, so I called a wholesaler whose list I was on and I said, “Just take this information. I don’t even want anything for it. Can you just keep sending me more deals?” And he was like, “Sure.” So luckily enough four months later, he’s like, “I’m on the email list and there’s a deal that’s coming up in Alabama.” I saw him start to drop the price over time and nobody was bidding at it, so I thought it was overpriced. We ran the numbers. We realized it would work at some level or some price, it wasn’t the price that he was asking for. So I got it through a wholesaler. Can I explain what a wholesaler is for people who don’t know what wholesalers are?

Ashley:
Yes, that’d be great.

Nate:
Okay. So a wholesaler is basically someone they’ll either send letters to or call properties that aren’t for sale on the market. And they’ll ask owners who might want to sell the property, “Would you sell the property to me?” If the owner of the property says, “Yes.” They’ll lock it up in a contract and then the wholesaler legally because there’s a stipulation in that contract that says, “Even if I don’t buy this, I can hand it off to another person who can buy it at the same price, same everything in the contract.” And they usually charge a fee for this, so our wholesaler did charge a fee. But that’s how a wholesaler works, they’re basically just the matchmaker between an off market property and you a person who doesn’t want to do all that work and they collect a fee at the end, so we got it through a wholesaler

Tony:
Nate really quick, before you move off the wholesaler piece, how did you find this wholesaler in this new market you’ve never been in? What advice would you have for someone looking to find a wholesaler?

Nate:
If you want to find wholesalers, if you’re looking at residential houses or anything, the easiest thing to do is look up on Google cash for houses, insert the city you’re looking for and there will be tons of websites that come up. You can email any of the people on those websites, and they’ll put you on a buyer’s list where they’ll send you deals. They like to blast a lot, Facebook groups, I’m part of a bunch of self-storage Facebook groups. People always say, “If you need deals sign up for my email list,” I know there’s people who will probably say it on BiggerPockets. You might even be able to look up wholesaler, my city and you can find a website and you can sign up for people’s buyers list on that website.

Tony:
That’s so funny, I’ve never thought of doing it that way.

Nate:
Oh yeah.

Tony:
I just Googled cash buyer or cash for houses Pigeon Forge and there was six, seven websites that popped up saying, “We’ll buy your house in Pigeon Forge.” That’s a great tip, man.

Nate:
Quick tip. There you go.

Ashley:
Wrong podcast. Back to the rapid fire. What was the purchase price on this property?

Nate:
So he wanted 400,000 for it, it didn’t make any sense at 400,000, it made sense around 360, but not 400. So I went to the wholesaler and I was like, “Dude, you’ve been emailing this out maybe four or five times, nobody wants it at this price. What if you just let the contract go, void it with the seller, give me the seller’s contact information, and then I’ll just pay you the same wholesaler price if I lock down a deal with him.” And for him that’s a zero risk way of doing it. We signed kind of a JV agreement with each other that if I got the deal, he would get paid his wholesaler fee. So there wasn’t any way of me going around him, so he says, “Let me wait for one other buyer to see if he wants it.” The other buyer didn’t want it.
He comes back to me and he goes, “Okay, I’ve just voided the contract with the seller. Here’s his information.” So remember the wholesaler was asking 400. I called the buyer and within about five minutes the buyer says to me on the phone, “I’ll take three 50 for it.” And I go, “Okay.” So that’s how we got to that price and that was a price that worked well with me, it was also a very, very nice owner. He’s helped us the entire time moving over to our management, sending us everything we need, going to the facility cleaning out units that he had stuff in.
He’s like, “I’ll mow the lawn for you the whole summer.” That’s fine. I’m like, “Okay.” I think people get hung up a lot of times where this is the price and it’s never that this is the price, there’s ways to get around that. But we ended up at 350 and the wholesale fee was 14,500 and that’s on a 2% interest only loan for two years. So hopefully, by the time we refi we can just give him that… Yes Tony, pretty crazy, right?

Tony:
2%.

Nate:
Oh no, sorry 5%. Two year at 5%. That’s still pretty good though.

Tony:
Oh, gotcha. Gotcha.

Ashley:
Yeah. Still.

Tony:
Okay. But still really impressive. Still really impressive. Wait, so if I can keep going, how did you guys finance this thing? Was is it a cash offer? Did you guys bring some debt? What did this look like?

Nate:
It was just a 20% down commercial loan from the local credit union who the seller was actually a commercial underwriter there. So he was like, “Hey, if you buy this and use our bank, I will give you a 4% interest rate for 15 years, 25 years amortized.” And I was like, “Yeah. Let’s do that.” So that was the thing, that closed on the first of this month. Interest rates were not 4% at the first of this month. I don’t know how they’re doing this, I don’t want to ask, I’m just getting the loan.
Let me explain that again for the rookies who don’t know what I was saying. It is a 4% interest rate, the loan will last 15 years, but the length of the loan is over 25 years. So at the end of that 15 year period we will in theory owe the next 10 years worth of loan payments at once. But we’re probably going to refinance out sooner than that or sell it before that even happens. So for us, it’s more a long term, low mortgage, low interest rate loan.

Ashley:
And instead of having it amortized over 15 years, the length of the actual loan spreading it out to the 25 years makes your payment a lot smaller, and hence gives you more cash flow the longer you can amortize-

Nate:
Exactly.

Ashley:
… out to, which is awesome. Your strategy with this is obviously self-storage, but how are you managing it? You had mentioned that the owner helped you switch over to your own type of management. What are the differences there compared to what he was doing?

Nate:
So before he was like everything’s on a piece of paper, that’s how he sent me everything. Every customer info phone number, address, contract is a written down piece of paper. I love the gentleman, he’s so kind. I would not do what he was doing, because it seems like such a headache. And my partners had to take the time to transfer 45, 50 tenants worth of all information contracts and everything onto spreadsheets and then into an online system that’s called ESS, it’s Easy Storage Solutions.
And that’s kind of a property management software for storage that allows people to put in their credit cards and have recurring billing, purchase insurance, stuff like that. But it was basically a Nate is on the weekend, Nate turns on a Netflix show, Nate tries to understand what this man scribbled on a piece of paper and put it into a spreadsheet, but we got it. We got all the customer info in after a month, it’s amazing, I’m so happy about that.

Ashley:
That is really cool, so what is your exit strategy on this? You said maybe you’ll sell it or refinance before 15 years, but what are some of your immediate goals that you have for it?

Nate:
Part of the reason we liked the storage facility, it was so heavily under rented or not under rented, the rents were way below market. It was about at 75% occupancy when we bought it, so pretty close to full, but for something that might have been $85 a month unit, the old owner was charging $40. And every single self-storage facility in the area was charging 85, $90. And this one had no online presence, nobody knew it existed unless you drove by it.
So our long term thing is basically we’re going to try and increase the rents over time, by either, A, getting new customers at the full price it should be, and slowly through a multiple tiered way that we’re doing it increase the rents of the current occupants. That should take us probably about a year or two, because I don’t want to do things too quickly and get people to just dip all at once. But when that’s done, when we get everything to market rent, start selling self-storage insurance, which if you don’t know this, if you offer self-storage insurance you get a kickback from the company, a pretty significant amount that increases your profit.
Once we get it all rented out like 90% plus, we’ve calculated the facility should be worth at a minimum with a pretty high cap rate $500,000. So then there would be 150k profit made over about a year or two. And then we could either choose to should we refinance and buy a same size facility or should we sell the whole thing and 1031 into a bigger facility, and just repeat until we’re bajillion, trillion, fafillionaires.

Tony:
So Nate, gosh, so many questions rolling through my head right now. So first I know you said that you’re using the Easy Storage Solutions software, but are you personally managing this thing or is Bubba still playing some kind of role in the day to day management for you guys?

Nate:
So we’re managing all that, we’re managing that ourself. I have two other partners, so one of them handles the customer service. I kind of manage getting everything into ESS, my other partner then just takes it from there. So we have everything in there, it’s super streamlined, you can text people, email everyone through that system. We’re handling all the management, the old owner isn’t handling anything besides just helping us continually get it rolling, because he lives in the area, but we’re self managing that whole thing.

Ashley:
Have you been there to that property?

Nate:
Oh no. She asked me this question. No I have not. I will be going in… I think we’re going to try and go in September. But the thing is which is cool is because it’s about an hour outside Huntsville, and I have a good friend who invested in Huntsville and had a great property inspector, so I got that guy too. And he looked around the facility, sent us a lot of pictures, we asked him his opinion of stuff and it’s been pretty good so far. And every single time we’ve had a new customer come in and say, “You guys have any open units?” And we say, “Yeah.” And they go, “Okay.” And they accept the full price that we ask them for. So we know we’re not completely off base for the area, but no, I haven’t visited. Why did you ask me that Ashley? Now I seem like a rookie.

Ashley:
No, I think that’s so cool that you’re able to get all this stuff done and you don’t even have to go to the property or look at it.

Nate:
Have partners.

Ashley:
I think that’s awesome.

Nate:
Have partners that do things that you don’t want to do. Doing this alone, I guess it’s cool because you get all of the clout if you’re like, “Oh, I own a 63 unit self-storage, I get all the profit.” But dude, it sucks if you’re doing all this on your own, it’s less fun, it’s so much pain. Everybody’s asking you for something all the time. When you spread the risk it’s just way better.

Ashley:
I have to 100% agree with you today while I’m recording podcasts, which I love to do. My business partner Darrell was out at the lake house where we’re buying and getting with the inspector getting this section done. And for me that is not something I enjoy standing there waiting for the inspector to be done, small talking a little bit with the seller, that’s things he loves to do. So you’re exactly right, it makes it way more fun doing it with somebody else. And especially when they enjoy the things that you don’t want to do.

Nate:
I hate calling people. I think it’s the worst thing ever. I just don’t like talking to people, even though I’m a very social person. So I have a partner who has no problem with it, I’m like, “What do you mean?” He’s like, “I’ll just pick up the phone from people.” And that’s the weirdest thing to me, but I’m so blessed. Thank you Alex, I love you, that he’s taking care of this for the business because there are things you’re good at. I think I’m good at the learning about real estate side and there’s some things my partners are good at, like calling customers who won’t pick up the phone and calling them five days straight, stuff like that, so I’m very thankful for them.

Tony:
So Nate, I want to talk a little bit more about the analyzing piece. So you talked about how you guys stumbled into this one and a little bit of the educational piece. You’ve talked about maybe 1031-ing wanting this property into something larger. So it makes me wonder, what is your buy box for these self-storage facilities? What kind of boxes do you need to check to say, “Okay. This is a good investment for us our team.”

Nate:
So off of the first one, we didn’t really want to borrow anybody else’s money. We wanted to make sure that we could do it all on our own. So we had a half a million dollar was the max price. We wanted it in an area that had at least a population of around 6,000 people, and there’s ways you can figure this out. How many storage facilities per a certain area does the area need to fulfill the demand? So that was another thing we checked out. I think this town is 9,000 people that we invested in and there’s four storage facilities. And if you can count up all the units under demand of what people need.

Tony:
Can you dive into that a little bit more Nate? What is an adequate number of supply given 9,000 residents in a city?

Nate:
So I’m not AJ Osborne, so please don’t quote me on this. But the way that it works is about… I think the recent numbers show that 10.5% of US households use self-storage, and there’s about two to three people per household. You can look that up in the county website, how many people per household on average is there in the city? So if you think there’s about a 10.5% need for how many households, you can divide it and say, “Okay, how many storage units are there available?” And if it’s under what the demand shows you can start up a storage facility in there. If it’s way over and there are some cities like small towns that have… I’ve seen towns with, “It’s a 300 person town, I have a 400 unit storage facility.” I’m like, “I don’t know if that’s going to work.”
So that’s some way to look at it is because it’s like this is a business. It’s more of a business than rental properties I think, even though obviously rental properties is a business. But it’s a real business, you’re on Yelp, people are looking you up on Google reviews. You need to make sure there’s actual demand there. And another great way to look at this is because ours wasn’t online, nobody knew it existed. We looked at all the other facilities within a 10 mile radius, every single one was booked minus a parking spot here, a one unit there. That shows you already that if everything’s filled to the brim in the area, there’s probably a good chance that other people want to get in. Especially, if you can call other places and they say, “Oh, we already have a 10 person waiting list, so you have to get on it.” 10 people, those are my 10 customers. Let’s go. There’s a few ways to figure that out.

Ashley:
And Nate real quick, he mentioned AJ Osborne, who is the self-storage king. If you guys haven’t heard of him and you are really loving this episode with Nate talking about self-storage. So you can listen to AJ Osborne on the BiggerPockets Real Estate Podcast, episode 286. If you really, really want to dig into the mind of a self-storage genius and check that out.

Nate:
Aren’t you friends with him?

Ashley:
Yeah. Yeah. He is an awesome guy too. I plug him every single day. Not only as a great real estate investor, but just a really awesome person in general.

Nate:
All right. Don’t show him this episode in case I’m wrong.

Ashley:
You know what’s funny I was thinking as you were saying that, I was like you could probably give him the exact town and he’d like, “Yeah, that’s about-” He’d be able to throw off some statistics, just a random town in Alabama.

Tony:
Cool. Well, can we talk a little bit more about the marketing aspect. So I know you said that this place had no online presence whatsoever. So what has been the plan for you all to beef up the online marketing for the self-storage facility?

Nate:
So the good thing about this is I come from an SEO background, and now a kind of SEO combo copy writing background. My partner also comes from an SEO background where she worked at multi-billion dollar companies and knows everything about organic search. So basically, the way that we’re doing this now is obviously you get your Google page set up. You have to submit all the information about your self-storage facility to the billions of listing sites out there, so you’re on every single one of them. And we’ve just been doing that, we’ve been hitting all those listing services.
We’re going to start trying to get in reviews because you’re in short term rentals, you know this, it’s the biggest thing if you’re trying to make your business just grow out of nowhere. So we’re getting set up with Google Business, all the listing services, Yelp, SquareFoot, everything else like that. And then we’re going to start a referral program with the current customers, we’ll look at X percent off of rent in two months if they refer someone over and that person also gets X percent off. I think in these small towns referrals is way bigger than for us in big cities, so we’re going to push on all those angles. My SEO partner could go more into this than I can because she’s doing all of it.

Ashley:
How are you going to track those referrals? Is that something you’re manually going to have to track or is that built into the software?

Nate:
We can set that up with different UTM URLs and stuff like that, where we can set up different URLs that people come in from. So on Google Analytics or other analytics softwares like that, you can see which site someone came from or which code they used or which ad campaign they came from as well. Again, it’s a business, less of a rental property, so if you know your stuff it’s kind of helpful, which thank God she does.

Ashley:
So to wrap up the deal here what is your cash flow going to end up being here?

Nate:
I think if we do it right, we should be cash flowing somewhere between two and a half to $4,000 a month off of it, and that’s after the mortgage payment. So it’s pretty good for three partners as a split, especially if it’s 3k, it’s like a $1000 each, but it’s more important that we get the cash flow up so we can refi. Because this is a commercial loan they’re looking at income, we need to just show as much income as we can to get the value of the property up.

Ashley:
And what do you think that value is going to be after you increase the rent to where you want them for everyone? What do you think that value will be on them?

Nate:
Hopefully, low estimate around 500k, it could be anywhere from five to 600, if things go really well. But we always set up these parameters in our calculations where we have a worst case, okay and best case scenario. And I always look the worst case scenario, I’m like, “That’s the one.” So if I can at least hit that I’m doing all right.

Ashley:
Increasing a property value by 150k in a short period of time, that’s awesome, that’s great. That’s 50k in net worth for you and each of your partners.

Nate:
And it’s cool because the partners I’m working with no one’s really concerned about taking profits or spending any of this right now. All of us are just thinking, “Okay, we’re going to use this for the next one and then do that for the next one.” And then in about five to 10 years when we’re all like, I’m tired of working with you, “I’m done with this,” then we can be good.

Ashley:
Just sell it all cash out, take your money and run.

Nate:
Put it in REITs and then just go to sleep for a while.

Ashley:
Yeah.

Tony:
Well Nate, congratulations, man. It sounds like you got a pretty killer deal there and we’re excited to see how it turns out. And again, just before we move off of this, I think that’s obviously the big power of commercial real estate is that you do have the ability to manipulate the value of that property in a way that you can’t really with single family residential properties. Because your commercial properties are based off of your NOI, your net operating income, and then the prevailing cap rates, where other big properties are selling for and you divide those things, whereas your single friendly residences are all based off of appraisals. So if you can buy this property, increase the NOI by increasing the income, decreasing the expenses or some combination of both, you’ve just immediately increased the value of that property as well. So really, really love the approach there, man, and we’re excited to see where you take that one.

Nate:
I’m going to try guys. I’ll do it just for you two.

Tony:
All right. So I want to take us now to our rookie request line. So for those of you that are listening, if you want to get your question featured on the show. You can give us a call at 885-ROOKIE and if the question is a good one, maybe we’ll use it for the show. So today’s question Nate it’s actually about partnerships, which you just talked about. So are you ready for today’s question?

Nate:
I think so.

Tony:
All right. So today’s question is from Davidson D. And Davidson says, “Having multiple properties with the same partner, should it be one big LLC or multiple single member LLCs owned by a parent LLC that is then split 50/50? Thanks so much for your time.” So what are your thoughts on that Nate?

Nate:
It’s multiple rental properties.

Tony:
That’s what it sounds like having multiple properties with the same partner, how have you guys structured your legal setup with you and your partners?

Nate:
The way that we want to do it long term thinking is each property has its own LLC. We want to limit the way that people can go after us. I’ve listened to a lot of the what is it asset protection on this show and the other shows. I can’t say because I’m not a lawyer, but we’re going to set up each property in its own LLC. And then eventually when it’s probably worth over a million dollars worth of things, we’re going to try and put it in a trust as an umbrella for all those LLCs, and then one day do the, “That’s in Bermuda, you can’t touch me,” type trust.
So I think that pretty much is our plan going forward. It’s so cheap to file LLCs that if you feel like there’s even a smidge of protection extra that you’re getting, it probably makes sense to pay the 100 to $200 to just set up for each property. And then I think you may know this better than I do, is it easier on an accounting end because then you each have each entity instead of just this whole scrambled seven properties and one LLC, and all these expenses for different houses type thing.

Tony:
For me in California, it’s actually, I think it’s 800 bucks to open up a new LLC, and then the tax returns is only 1200 bucks a year. So it can get pricey, especially on smaller family residences if you’re trying to spring up an LLC for each one. But to your point I think everyone’s going to have a different risk profile. And if you’re you’re really concerned about potential litigation or protecting your assets, then obviously it might be worth that extra expense. But I think our approach moving forward is that we’ll have a collection of properties that fall under one LLC. So maybe five in this one, five in the next one and so on and so forth, and then eventually we’d like to put a trust in place as well.

Nate:
And then it probably also matters on how expensive the properties are, you’d probably not want three $3 million properties in the same LLC. But if you have five 50k properties, that’s probably fine, don’t quote me on that. I’m not the lawyer.

Ashley:
I want something that Tony said to be a reminder to everyone, how he said it costs $1,200 for an LLC tax return in California and to do his return. So I think a lot of people forget to actually add that into their numbers when they are doing a rental property. If you don’t do your own tax return and you are hiring an accountant out, if you get an LLC that’s a separate tax return you have to pay for, I think mine runs 250 to $300 per year, per tax return. But if I were to go and put an LLC on every single property, that’s $500 plus that $300 for the tax return. And if you are just buying a small single family rental cash flowing, maybe a 100 bucks a month, you have a mortgage on it everything, there goes your cash flow it’s gone, if you don’t remember to add in that accounting cost.
But for my partnerships, each partner I have an LLC with them and we put our properties and I think Nate’s point is very valid. I’m buying $50,000 properties, we’re throwing a bunch of them into an LLC and then it just depends on the equity split. So with one partner we actually have two LLCs, one, we are 50/50 each and the other one we are 60/40 each. And it just depended on the money that each we’re putting in and the workload that we were each taking on, that determine that we are changing some of the properties to that 60/40 split too. So I think there can be a lot of costs associated with having multiple LLCs. I actually like having more properties under an LLC, because if you are using bookkeeping software like QuickBooks, they charge you per an entity.
So if you have an entity for each property, you’re going to have to pay 50 bucks per month per each property that you have, where if you have the LLC with five properties in it, you’re just paying for that one QuickBooks file. So I think there’s definitely an advantage. And as far as asset protection liability, if you have mortgages on these properties and there’s not a ton of equity, there’s not $3 million of equity in the property, you don’t have a ton to protect anyways, if you only have $50,000 in equity in your portfolio.
I think that kind of plays into factor too, because no big time attorney hotshot is going to go after your LLC, if it only has $10,000 in equity. Nate, we’re going to go to our rookie exam and this one is special for you, we actually have four questions for you today. So the first one is the most important, which podcast is your favorite to copyright for of the BiggerPockets platform?

Nate:
It’s not a hard decision. It’s the new podcast On the Market, which you guys should check out. More people over there because it’s a really good podcast and Dave Meyer does a very good job talking about up to date information. No, Rookie’s a really good podcast. Every single time it’s good because you see people who are in the same situation as you. And it’s just good because sometimes you’re learning the same lessons over and over again, but with just a different flavor, so you’re like, “Cool. I won’t do that thing that that person did.” So I love the Rookie Podcast, but go check out On the Market, it’s a great podcast.

Ashley:
On the Market is such a good answer because I love it too, my friend James Daynard who’s one of the hosts on it and I’ve been listening to every episode, it’s really great. Especially, now with a lot going on in the market to stay informed.

Tony:
And in the economy.

Ashley:
Yeah. Okay. So the next question, what is one actual thing rookies should do after listening to this episode?

Nate:
Just talk about real estate more. I met my partner through work because I just talked about it a lot. I’ve had people offer me money because I’ve talked about it a lot. She’s had multiple people offer her, they’re like, “Oh, you did a self-storage deal. You don’t want money for the next one?” It’s weird just post on Instagram, even if you’re not that comfortable with it, post once in a while, talk to people at work, talk to family members, just talk to everybody. Because most likely someone might not even be thinking of it, but it might be able to change their life in a way that they can do something that they love, so just talk to people.

Tony:
Yeah. That’s fantastic advice Nate, love that, man. Ashley and I have preached the same exact thing many, many times in this podcast, so love that. All right. Question number two what’s one tool, software, app or system that you use in your business?

Nate:
Easy Storage Solutions, it’s pretty intuitive. I like it. I know there’s two big ones for storage, storEDGE, it’s something called storEDGE. And it’s called Easy Storage Solutions, those are I think the main two that people use. But if you’re trying to get into self-storage, watch some videos on that because when you get a self-storage facility, it’ll be way easier, but it just makes running everything really easy.

Ashley:
And Nate, the last question, where do you plan on being in five years?

Nate:
Probably with more storage units, hopefully doing less. My goal is to do nothing, not in a lay around all day thing, but really just taking your brain away from things that, I don’t know, just putting your brain to the best use possible. And I feel like if you invest in real estate and you like investing in real estate and solving these fun financial problems that are fun for you. Buying more real estate probably will give you more energy than taking away from it even though it’s work. So hopefully with more units, hopefully doing less, maybe with a gator farm in Florida, who knows. We’ll see.

Ashley:
I can’t wait to come visit that.

Nate:
Yeah. Please.

Tony:
Yeah. I’m excited too, man. All right. Before we close this out, I just want to highlight this week’s rookie rockstars. So again, if you would like your story featured on the show, get active in the Real Estate Rookie Facebook group, which honestly one of the most active, the most engaged Facebook groups out there. Get active in the Real Estate Rookie forum on BiggerPockets, there’s a wealth of knowledge.
Almost any question you can think of asking has probably been answered somewhere at some point on the BiggerPockets forums, but today’s rookie rockstar is Andrew White. And Andrew says, “Started last week on our most ambitious project yet. This will be our fifth property in our fourth Airbnb, it’s a 1930s historic build in San Antonio, Texas. The plan is to Air-BRRR-nb this property and it’s a doozy.” Almost 4,000 square foot main house with five beds and four baths, as well as a two bed, one bath casita, so seven bedrooms in total, but they purchased it for 265,000.
They’re planning a whopping $210,000 for the rehab, and the ARV is projected at 70 or I’m sorry, $700,000. And then they did a cash out refi leaving about 10 grand into the property. Right now the monthly revenue is about 11 grand a month and they’re cash flowing about 5,100 bucks a month, which gives him a crazy cash on cash return of 660%, which is-

Ashley:
Wow. That’s awesome.

Tony:
Pretty solid.

Nate:
Get Andrew on the show. Why am I here? Drew’s killing it.

Ashley:
Well, Nate, thank you so much for joining us, really enjoyed hearing about your Rochester property and the self-storage. Can you tell everyone where they can reach out to you and find out some more information about you?

Nate:
Sure. If you have any organic content SEO copywriting needs, you can go to calicocontent.com, that’s calico like the pirate or the cat, calicocontent.com. Or you can email me at [email protected] You can also find me on Instagram at natelikesmoney, that’s actually my handle.

Ashley:
That’s a good one. I like that.

Nate:
Yeah. So that’s basically it.

Ashley:
Well, thank you everyone for joining us this week. If you love the podcast, please leave us a five star review on your favorite podcast platform and check out our YouTube channel and make sure you are subscribed at the Real Estate Rookie. My name is Ashley Kehr at WealthFromRentals and he’s Tony Robinson @TonyJRobinson on Instagram. And we’ll be back on Saturday with a rookie reply.

Band:
(singing).

 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

2022-08-31 06:02:45

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Maybe I’m Wrong. We Can Avoid A Burst Bubble If These Four Things Happen

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Find & screen tenants: get full credit, criminal, and eviction reports.”,”linkURL”:”http:\/\/www.rentredi.com\/?utm_source=biggerpockets&utm_medium=paid&utm_campaign=BP_Blog.05.02.22&utm_content=button&utm_term=findtenants”,”linkTitle”:”Get Started Today!”,”id”:”62740e9d48a85″,”impressionCount”:”80686″,”dailyImpressionCount”:”285″,”impressionLimit”:”150000″,”dailyImpressionLimit”:”5556″},{“sponsor”:”Guaranteed Rate”,”description”:”One-Stop Mortgage Lender”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/06\/GR-512×512-1.png”,”imageAlt”:””,”title”:”$1,440 Mortgage Savings”,”body”:”Whether you\u2019re buying new or cash-out refinancing to upscale the old \u2013 get started today and we\u2019ll help you save!”,”linkURL”:”https:\/\/www.rate.com\/biggerpockets?adtrk=|display|corporatebenefits|biggerpockets|july2022_blog||||||||||&utm_source=corporatebenefits&utm_medium=display&utm_campaign=biggerpockets&utm_content=july2022-blog%20%20%20″,”linkTitle”:”Buy or Cash-Out Refi”,”id”:”62ba1bfaae3fd”,”impressionCount”:”37374″,”dailyImpressionCount”:”251″,”impressionLimit”:”70000″,”dailyImpressionLimit”:”761″},{“sponsor”:”Avail”,”description”:”#1 Tool for Landlords”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/06\/512×512-Logo.png”,”imageAlt”:””,”title”:”Hassle-Free Landlording”,”body”:”One tool for all your rental management needs — find & screen tenants, sign leases, collect rent, and more.”,”linkURL”:”https:\/\/www.avail.co\/?ref=biggerpockets&source=biggerpockets&utm_medium=blog+forum+ad&utm_campaign=homepage&utm_channel=sponsorship&utm_content=biggerpockets+forum+ad+fy23+1h”,”linkTitle”:”Start for FREE Today”,”id”:”62bc8a7c568d3″,”impressionCount”:”40188″,”dailyImpressionCount”:”311″,”impressionLimit”:”200000″,”dailyImpressionLimit”:”1087″},{“sponsor”:”Steadily”,”description”:”Easy landlord insurance”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/06\/facebook-business-page-picture.png”,”imageAlt”:””,”title”:”Rated 4.8 Out of 5 Stars”,”body”:”Quotes online in minutes. 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2022-08-30 19:03:08

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Why Fall Might Be the Best Time to Sell Your Home





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  • Best Time to Sell Your Home_autumn
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A home is the biggest transaction most of us will ever make. That’s why it’s important to work with an experienced and knowledgeable real estate agent. For more than 20 years, RE/MAX has been the leading real estate organization in Canada and beyond. With a presence in over 100 countries and territories, the RE/MAX network’s global footprint is unmatched by any other real estate brand. RE/MAX has always been an industry leader, adopting the latest technology and creating innovative marketing programs. RE/MAX was the first brand to expand its reach world-wide through a revolutionary global listing site, featuring listings from more than 80 countries, displayed in over 40 languages. Closer to home is RE/MAX’s deep commitment to the communities we operate in. Our exclusive Miracle Home Program allows RE/MAX agents to donate a portion of every home sale to Children’s Miracle Network.

Learn more about RE/MAX and real estate franchise opportunities in Ontario-Atlantic Region and Western Canada.






2022-08-30 12:49:51

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6 Tips for Selling your Home this Fall





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  • Tips for Selling your Home this Fall
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Follow us on Facebook,
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A home is the biggest transaction most of us will ever make. That’s why it’s important to work with an experienced and knowledgeable real estate agent. For more than 20 years, RE/MAX has been the leading real estate organization in Canada and beyond. With a presence in over 100 countries and territories, the RE/MAX network’s global footprint is unmatched by any other real estate brand. RE/MAX has always been an industry leader, adopting the latest technology and creating innovative marketing programs. RE/MAX was the first brand to expand its reach world-wide through a revolutionary global listing site, featuring listings from more than 80 countries, displayed in over 40 languages. Closer to home is RE/MAX’s deep commitment to the communities we operate in. Our exclusive Miracle Home Program allows RE/MAX agents to donate a portion of every home sale to Children’s Miracle Network.

Learn more about RE/MAX and real estate franchise opportunities in Ontario-Atlantic Region and Western Canada.






2022-08-30 12:55:58

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Time to bring back the limited dividend company model to build affordable housing

There’s no silver bullet to end the housing supply crisis but an initiative called the limited dividend company (LDC), if resurrected, might be a good way to gain traction for affordable rental housing projects.

The idea comes from Phil Rubinoff of Laurier Homes who is well known in construction and home building circles. He is a chartered accountant, former chair of the Residential Construction Council of Ontario, and founding chair of the Residential and Civil Construction Alliance of Ontario.

I was speaking to Phil about the housing situation the other day and he suggested it might be time to revive the LDC model as a way of tackling the affordable housing problem. The concept worked before in the 1960s and 1970s and resulted in tens of thousands of new rental units being built.

The Canada Mortgage and Housing Corporation (CMHC) previously used the LDC program with much success to get shovels in the ground for affordable housing. The model encouraged private investors to build and operate housing that was geared to low- and moderate-income individuals and families.

Owners of an LDC who built affordable housing benefited from government loans at interest rates that were below normal lending rates. In return, the company had to offer units at rental rates that were below certain income levels. Additionally, restrictions were placed on rent increases.

Rental rate increases were based on a model that limited a rate of return on the building to five per cent a year or less. Under the deal, LDCs did not have to pay tax on income earned from the building. 

The deal between the LDCs and CMHC remained in place throughout the mortgage which ranged from 30 to 50 years. There was an option whereby the owner could prepay and terminate the mortgage.

It was a win-win as the agreement benefitted both builders and those who needed affordable housing.

The LDC is very much like the approach used by water and energy utility companies, whereby the providers charge a specified amount for the service that reflects costs incurred for the commodity, its delivery and depreciation, plus an allowance for a reasonable return on investment.

Unfortunately, The LDC initiative is no longer active. It would require action by all levels of government. According to CMHC, to operate any government program, the agency needs legislative, policy and financial approvals. “There would need to be a process followed and approvals obtained by the Government of Canada in order for CMHC to implement a new program,” a spokesperson said. 

Today, many working families can no longer gain a foothold in the housing market due to high prices and limited supply. By the same token, rental units are also in short supply and rates are going up rapidly. 

According to data from the Toronto Regional Real Estate Board, rent for the average one-bedroom unit is up 20.2 per cent year-over-year to $2,269 a month, while the average rent for a two-bedroom unit is up 15.3 per cent to $2,979.

Developers and builders are facing a perfect storm of challenges these days which make it difficult to get shovels in the ground. Rising interest rates are affecting the market. Builders are contending with inflation, supply chain issues, increasing costs for materials and labour, as well as shortages of trades.

There are also other very serious, self-inflicted issues affecting the build of new housing and rental units.

Government fees and charges impact the cost of building a home by as much as 24 per cent in major Canadian cities. Government charges in the GTA are by far the highest in North America. The cost of a dwelling in Toronto would be 10-to-24-per-cent lower if the government charges were removed.

The City of Toronto has added to the problem by raising development charges by a whopping 46 per cent. Development charges for detached and semi-detached houses are being raised to $137,040 from $93,978 by May 2023. For an apartment with two or more bedrooms, the charge will rise to $80,218 from $55,012.

We were pleased to see Toronto Mayor John Tory come out with a re-election plan that included initiatives to streamline the development approvals process and get homes built faster.

He also pledged to incentivize the construction of purpose-built rental housing by reducing fees and development charges as well as prioritizing the applications. This will certainly help the situation. However, we still have concerns about development charges and fees on condos and other forms of housing.

If we are to solve the housing supply problem, governments at all levels must work together to remove barriers and help builders get shovels in the ground. Resurrecting the LDC model would be a start.

 

Richard Lyall is president of the Residential Construction Council of Ontario (RESCON). He has represented the building industry in Ontario since 1991. Contact him at [email protected].



2022-08-30 09:28:00

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Rates, Returns, and Protecting Investors

Private money lending has become a hot topic over the past few years. With rising equity and asset prices, more lenders have come out of the woodwork, and an equal amount of investors have sprouted up to match the need. But taking on private money isn’t a light decision, although most investors think of it that way. Doing a deal the wrong way could put your reputation in jeopardy and rack up an expensive bill you’ll need to pay back.

Before you accept (or lend) private money, there are a few things you should know. But you don’t have to go through trial and error to figure them out! Back on part four of this private money series is Amy Mahjoory, investor and private money expert. Amy goes into the nitty-gritty of private money, from debating debt vs. equity to the risk of raising capital, protecting your investors, and the type of interest rates you can charge and returns you can expect.

If you haven’t raised or lent private money before, we recommend watching the entirety of this four-part series, as it answers crucial questions that rookies can often overlook. We also follow up with some Q&As from the comment section about how to pay a private money lender back, why coaching is seen as scammy, and the three documents you’ll need to do a private money deal.

David:
This is the BiggerPockets Podcast Show 655.

Amy:
And never say, “I don’t know.” And a lot of us are still learning, right? A lot of you are going to get out there and implement that four-second power pitch and you’re not going to know what to say next. So instead of saying, “I don’t know,” just substitute that with, “That’s a great question. Let me turn back to my team of experts and I’ll get back to you within 24 hours.” And then get on the phone and reach out to your community or other people in your network who have done this before, if you have a coach, and be like, “This just happened, what do I say? What do I do?” So we always want to position ourselves as the polished professional poised for aggressive growth.

David:
What’s going on everyone? This is David Greene in the Smoky Mountains, checking out cabins, recording from one of my own cabins. I’m actually in the theater room right now joined by my co-host, Rob Abasolo, fellow cabin investor, fellow short-term rental investor, and fellow co-host of the best freaking podcast in the world, the BiggerPockets Real Estate Podcast. Rob, how’s it going?

Rob:
Good, man. Yeah, it looks like you’ve got the whole theater system there, so you can finally watch Interstellar after all this time.

David:
You know, you did see that I posted and tagged you on an Instagram thing, but I wasn’t able to watch the whole movie. It just took too long to get going to that.

Rob:
What? How did you stop watch… Oh my god. I would rather have you just not watch it. How are you going to tell me this on air? You didn’t prep me for this?

David:
No, I got to watch it again. That’s what I’m getting at. I’m trying to be honest here and confess that. That doesn’t count.

Rob:
Right.

David:
We were shooting pool and I kept winning and I just couldn’t stop. Nobody could beat me. I ended up getting distracted. Wasn’t able to watch the show. There’s a little humble brag about how I was better at pool than all the people that never play it, which really isn’t saying a whole lot. But our house is just so much dang fun, man. It’s hard to do one thing at that property in Scottsdale.

Rob:
You’ve seen the final product of our Scottsdale mansion, right?

David:
Yeah, I was there. I will be going back. So if you guys follow me on social media, you will see about a potential trip that you can sign up for to take. But I’m going to be going back there again, because that place is so much fun. I just like being there. Rob, when’s the last time you were there?

Rob:
When we set it up, but I am flying out there hopefully in the next month to go and get the final footage of it so that I can release like my… I’m cutting together like a TV show, HD TV riff on… I’m trying to make a very funny version of an HD TV show out of the episode that I shot out there. So stay tuned for that. That’ll be fun, I think.

David:
Did the episode that you made with me in it, did you put that out yet?

Rob:
No, that’s not out. That’s the one that we’re editing together. It takes a long time to edit a 40-minute video in my style with Caleb and stuff. It’s taken weeks. But we need the final B-roll that shows everything coming together and then the resolution, and then boom, we’ll get all the TV offers.

David:
If the length of time that you took to get that place ready for the market is any indication of the speed you work at, I’m sure that video will be released sometime in 2028.

Rob:
That’s right. Yeah. Well, we’ll see. Stay tuned everybody. 2028.

David:
Yes. Stay tuned. And tune in for today’s podcast. I suppose you already are. That is really good. So this is the finale, the wrapping up of the four-part series with our guest, Amy Mahjoory, who specializes in raising capital to put into deals and teaching other people how they can do the same. So in the first three episodes, we went over Amy’s four-part system. It’s an acronym that spells out FACT. I will let Rob give that to you guys in a second here. But in today’s episode, we actually dive really deep into what to do with the money once you’ve raised it, red flags to avoid getting into both in raising money and who you should be giving your money to. And then we get into some questions that people asked on previous episodes where Amy and Rob both weigh in.
It gets a little spicy at the end. So I want to make sure you listen all the way there, because this episode turns down Tapatioville and I want to hear what your guys’ comments are. So listen to the stuff that we talk about, leave us a comment on YouTube, ask some questions there. We read those. In fact, today’s questions that we played in the show came from the YouTube comments. We look at all of them and we try to include them in future shows.
Part of the topic is free content and for today’s quick tip, I’d just like to remind you, BiggerPockets is almost completely free. 99.9% free. So use it. Go to the forums and read the questions or ask your questions. Go to the blog and read the stuff that people have taken their own time, effort, and I can’t really say sweat. Because typing on a keyboard doesn’t make you sweaty, but I suppose you do get a little bit of finger exercise when you’re doing that. Listen to all the podcasts that we have. Listen to the other podcasts that we have. Cruise through our YouTube channel. You can immerse yourself completely in BiggerPockets and get a free education that will make you much more money than you would spend if you went to actual college. I’m going to put a pin in it right there and I’m going to leave it with you, Rob, for last words, before we get into the show.

Rob:
No, nothing significant here, other than I want to say that actually, this might be my favorite episode of the series. Every single one is always an eye opener, but we get into some pretty tactical nuances of just, oh man, private lending and the power of that can just be so specific to every scenario. So we kind of talk about the good and the bad and the ugly for every single scenario. No, not every single scenario, but a lot of them.

David:
I never thought about this till right now. But you built almost your entire portfolio up to this point using private lending, right?

Rob:
It’s true. Yeah. [inaudible 00:05:15]. Yeah. Yeah. The first couple were privately funded. And then after that I just started partnering up with people and using all my sweat equity to basically run it for them. And yeah, it’s paid out very well and-

David:
Yeah, but partnerships is a form of still like-

Rob:
Yes for sure.

David:
… private lending. They’re lending their money and they’re getting equity in the dea.

Rob:
100%. Yeah. So it’s worked out really well and now I’m scaling even past that. So it’s been really exciting and I think a lot of people will be really empowered after this.

David:
All right. Well, BiggerPockets Nation, thank you for being here. We are going to get into the show and we’re happy to bring it to you. Amy Mahjoory, welcome back to the BiggerPockets Podcast. How are you today?

Amy:
Thank you, sir. It’s great to be here. I’m doing well. Excited to catch up with you guys.

Rob:
Awesome. Well, I’m really excited to get into the rest of the final installment of the series, where we’ve talked about how to raise money for newbie investors and even experienced investors. We learned a lot, me and David, just in how we can apply your different principles to the practice of actually going and getting money.
So to sum up here, you have a framework that we call FACT, F-A-C-T. And that F stands for foundation. So that’s where you go in and you meet somebody and you set the foundation. You let them know what you do. So you call this your four-second power pitch. It’s 13 words. And if I recall correctly, I believe it’s, “Hi. I’m Amy. I teach people how to make double-digit returns in real estate.” And so if they’re interested, depending on their interest level, you follow up with them.
And then you go to the A, in fact, which is action. You take action. This could be many different ways, but I believe some of the, I think you gave us four or five different ways, but this could be hosting a meetup to basically establish yourself as a local professional. There are many different ways that you can take action. But however that is, it’s effectively moving your leads down the quote, unquote pipeline, if you will.
Then we have C, where you establish credibility. And this is where you basically go from a group setting or the more informal setting down to a very personalized setting where you’re actually telling them about the financials of the project, what you do, your experience, and just basically proving your financial acumen and that. If they give you your money, you’re going to deploy it correctly.
And then finally we get to T, which stands for transaction. And that is actually closing the deal, right? They wire you the money. And what happens at that point? What are the logistics of them giving you the money? And then after that, we move into a little bit more of the complex side, which is nurturing and making sure that there’s a little bit of a high touchpoint there after you close them. And you make sure that they’re excited about the deal and that there’s communication to make sure that they understand that their money is safe. Did I sum that up correctly?

Amy:
That was perfect.

Rob:
Whew. All right, good. I was getting nervous. I was like, I’m pretty sure this is all correct. But I know all this, because we just did it like an hour ago. But I believe we left off on the last episode with a bit of a cliffhanger. David was going to answer it and then he was like, “Hey, let’s do it on the next episode.” And I believe that question, David, was, how do you feel about getting your investors kind of involved in the project? Not necessarily giving them a job responsibility, but actually having them come out to the site and getting them amped up about the different project that they are investing in.

David:
I’ve had some time to think about that since you first asked me. I think for some people, the short answer is every investor, every person raising money is going to have a different skillset, a different value to add. So they’re going to want to structure it differently. And I think in this episode we can cover some of the ways that it can be done. And so as people are listening, they can ask themselves, well, where do I fit in? And how would I want to structure mine? Because it’s definitely not a one size fits all. The way that Rob raises and deploys money is going to be different than the way Amy does it, different than the way I do it. So it wouldn’t make sense to put the same system together, because we’re all deploying the capital differently and we’re appealing to different lenders or investors depending on how you structure it.
So if I was trying to set something up where I had repeat business, you were going to give me your money, get paid back, give me your money, get paid back. I think it makes sense to bring them out to the project. Have them walk the property, see what’s going on, meet the contractor. He comes up walking with this hard hat and a big smile and they get to feel good that they’re meeting the people. It sort of becomes personalized. It shuts off the part of their brain that’s always saying, what if this and what if that? And what if this is a big scam, or what if they’re not even putting the money in the property? If they can drive by and they can see progress being made, oh, the framing is up. Oh, the drywall’s up. That’s going to put people at ease. I think that’s a smart idea for a situation like that.
I personally don’t want something like that, because what I’m going to get is a bunch of people that are going to say, oh we’re here. We have a full-time real estate investor. Let’s ask a bunch of questions. Let’s see if we can get some of these contacts for our own deals, right? Or let me use this as an excuse to say, I need an update on every single thing that’s going on because they want to learn. Then I’m not going to want to be raising money from those people. I’m going to want the passive investor. And I’m going to turn down that person who would’ve been able to make money and now they can’t, because they kind talk themselves out of the deal.
The other thing that I would point out is there’s different ways to structure how people get compensated. So I would say the more common way is you give away equity in a deal. So they get the upside, but they also get the downside. And while the market has been rising, which it has been for the last eight to 10 years, very rarely did downside come into play. And that’s why I want to make sure we highlight this. Because you could do everything wrong and there was so much appreciation, you still paid people back. Maybe they didn’t get as high of a return as what they wanted, but they didn’t lose capital. And as we’re entering into this bear market, no pun intended, because I’m in the Smoky Mountains and there’s bears everywhere up here, that’s changing a little bit. You’re at a point now where, if you miss your numbers, if you don’t execute on the deal right, it is very possible that your investors could lose money, especially when it’s structured with equity.
So the first thing people have to understand is, if you get the upside, you also get the downside. If you lose the ceiling, you also lose the floor. There’s nothing wrong with that. You need to know going into it that’s the case. I don’t want to structure my deals that way because to be frank, if somebody lost money in a David Greene deal, the hit to my reputation would be worse than if I just paid them back their money so they didn’t lose it. Right? If I lost money with the platform that I have as a level of trust that I have with the audience that makes BiggerPockets look bad, that makes me look bad. That makes real estate investing as a whole look bad.
I’m not a random person without a platform who’s like, hey, invest at your own risk. If it doesn’t go well, well, that’s investing. I don’t think I’m in a position I can get away with that. And then there’s an emotional price to pay. I just wouldn’t sleep at night. If I lost my money, I can make more money back. If I lost someone else’s money, I think, as just my personality, that is not worth it. The price I would pay feeling bad is bigger than the upside if I made them some money and made some myself. Basically, I’m going to guarantee any money that anyone lets me borrow, they’re going to get it back. They’re getting their capital back and they’re going to get back the interest that I told them they were going to receive.
So that doesn’t make sense for me to invest with equity just based on that strategy. If I’m going to guarantee their return, which I’m going to have to, I might as well just make it debt. I will pay this interest rate on your money for the period of time I have it. Now, I’ve structured mine where not only is it a guaranteed payment to you that isn’t dependent… When I say guaranteed, I mean, it’s not dependent on the performance of any one property that I put the money into. It’s guaranteed by income from that property, income from other properties, income from book sales, income from the businesses that I own, income from every single thing that I do is guaranteeing that person their return. So I know that I can pay them back their debt. And because I know I’m set up this way, I also want to make it as convenient as possible.
So what a lot of syndicators will do is they’ll say, “Okay, I’m going to borrow your money. In five years, when the deal sells, you’ll get all your principle and you’ll get all of the interest. You’ll get it back at the end.” Or some of them will say, “You’ll get a check every quarter when my bookkeeper reconciles the books and you’ll get some money.” There’s nothing wrong with that, but it makes it harder for the person who let me borrow their money to sort of use it. So I’m set up towards more convenient. They get a check from me, or not even a check, they get an electronic deposit in their account every month for agreed upon whatever the interest rate is. Right now I’ve been lending at 10%. So they let me borrow their money. They get a 10% annual return.
One 12th of that every month goes right into their account. They don’t have to think about it. They don’t have to ask about it. It goes right there. They can use it for whatever purpose they want. They want to pay down other debt, maybe they’re lending money to me at 10% to pay down interest at five or 6% on something else, they’re actually making money to do that. Maybe they want to live off it. That becomes passive income to them. It’s paying their mortgage for them. It’s paying their rent. It’s easier for someone in that position to figure out, what can I expect? What money do I have coming in? How much do I have to work?
So I try to make it as convenient as possible and as safe as possible. The downside is they’re not going to get an amazing high return in case I go do an incredible deal with that money. If I go find the best deal ever, they’re not getting half the equity in that deal. But on the other end, if I go after the best deal ever, and it doesn’t work out, I run into permitting problems, construction balloons, the cost of supplies, everybody’s kind of dealing with that right now, they’re not on the hook for it.
So I think this is a good example of how someone in my position, I feel much safer giving a guaranteed return versus someone in a different position. Maybe for them to be able to raise money, they almost have to offer more of an equity position with less guaranteed money because they don’t know how the deal’s going to work out. I’ll throw it back to you, Amy. What are your thoughts on these different approaches and who should be taking which approach?

Amy:
Oh man, that’s a loaded question and my mind is all over the place, in a good way, because I’ve experienced all this stuff. Wins, losses. What do we do? Liquidating assets, draining my retirement account. Because similar to you, David, I mean 2017, and I’m very transparent about this on webinars, from stage, it was the worst year of my life. And, David, I didn’t sleep. I’m getting emotional now. I cried every day. I problem solved every day. It was the perfect storm for these properties I’d bought in Downtown Chicago and I could have filed for bankruptcy, but I came up with every solution. Half those deals had personal guarantees, which I still sign personal guarantees today, because I agree with you. And it sucked.
And it was just a matter of liquidate, selling all my rental properties, draining my retirement account. I had to put private money lenders on payment plans. I mean some people, eventually I had nothing more to give. I secured their investments on future projects. Those projects went south. So eventually some people didn’t even get their interest back. Most got their principle back, but it was like, I have nothing more to give. I gave everything that I could. That was also… However, the silver lining is that’s why I’m way more conservative now in my analysis of projects. Back then when I was buying properties, I had assets. So I was going into these deals and buying them. They were a little riskier. I wasn’t sticking to my standard net ROI of 10 to 15%. I didn’t do my due diligence as my company blew up and hiring general contractors. One guy took off on me. Anyways, it was the perfect storm.
To your point, there are so many ways that we could structure deals. It’s a matter of what works for you and what your goals are. So even today, 10 years later, I still raise all of my capital from private money lenders who they’re debt investors. And I also make it very clear in a respectful way like, “Hey, you’re a silent stakeholder. You’re not going to have a say in the design aspect. I will proactively keep you informed every single month through progress picks and executive reports, whether it’s good or bad. I’m very transparent. And at the same time, we’re going to start syndicating deals.” So those offers are going to look very different.
Even in today’s market, one of the things we’re going to be talking about in the October conference is everything is shifting. Even hard money lenders, they’re not allowing second lanes now. So how do we structure deals with our private money lenders who are in a equity position and bring them onto the LLC so that they feel better about being in the first lane? But then you’re right. Do they take a loss if we take a loss or do we eat all of that? Right? So there are so many ways you can structure it. You have to do what makes you comfortable and what makes sense for you.

David:
Yeah. And this is especially relevant right now because, like I said, the market is turning and technology, social media, I mean you can be a person with a charismatic personality and relatively good looks and get on TikTok and get a million followers pretty quickly and raise money very easily. And to the person who’s new, listening to this podcast as maybe one of the first because they just saw someone talk about real estate investing or they heard passive income for the first time, they’re getting into the space, very naive. They wouldn’t know what questions to ask. They wouldn’t know how to vet if this is a person. That’d be terrifying to be in that position where someone’s saying raise money and they’re offering a return. There’s no way you can know how accurate that would be.
And then you throw into it, all these fake spam bots that are online that are pretending to look like us and they’re using our likenesses to raise money. Then they’re having different people say, I made this much money in crypto. I made this much money in NFTs. I made this much money in real estate. So your FOMO is at an all-time high like, well, I have to do something. I need to take action. Which one of these people should I give my money to? It’s hard to know how to go about doing this. I don’t think that there’s an easy answer. I know people want to say, well, who should I give the money to? I don’t think it is a quick, easy answer. There’s principles that you can follow that will reduce the risk. Rob, what’s your thoughts on this entire thing?

Rob:
It’s a choose your own adventure, Dave. I mean, I really don’t think that there is a right or wrong. I’ve done a little bit of both and I think that it makes sense in certain applications, right? So you’re talking about your structure, which we’ve talked about this at length, even for our partnership and raising money on different luxury properties and everything. And I like it, because it is property specific and it keeps the equity side out of it. And you don’t have to really answer to investors in the same way, because there is a difference. If you’re raising money from somebody at, let’s say a 10% return like you’re talking about, basically I feel like that’s going to be different than if I bring on a partner that’s 50/50, because now they’re vested in it. Now their name is probably part of the debt and there’s a little bit more emotion there from the investor. Not everyone can be a passive investor.
And so I think that’s a little bit tougher to manage. So I certainly see the application of, hey, I’ll give you a 10% return. You give me your money. I don’t really think the equity thing makes sense for anything that’s necessarily in the short term, right? If you’re doing a flip or if you’re doing a set of flips, those in theory are very quick investments a lot of the times. If you go and you buy a house, you’re going to remodel it within three months, maybe sell it within six, depending on how big that remodel is. And in that instance, I think a quick flip and a quick return for that investor makes sense.
But it also comes down to what options do you have? Some people don’t have options, right? If you’re new into the real estate space and you’re approaching a private investor about money and it’s your first deal and they say, hey, I want 50% equity. I think that newbie should take it. I don’t think they should say, oh, it has to be a 10% return. Because again, like I said on the last episode, I think the experience is incredibly valuable to work through the nuts and bolts and learn what it’s like to actually get into an investment like that. Now, obviously there’s a lot of caveats to specifically that scenario, I’m not saying just give up everything, but there are scenarios where that makes sense.
But I think where I disagree on the fun side of things is, and where I don’t like this model nearly as much is, yeah, I mean we can go and we can raise 10% and you’re guaranteeing that. And I like that. I mean, I really do. I think that’s a very good way to do it on a deal-by-deal basis. But how, David, can you go and buy a 100 or a 200-unit apartment complex? I think there’s a moment there when it comes to scaling that you’ll need to go and raise some of those funds that you… I mean, there’s some level of guarantees with funds and syndications, but if you ever want to go the big 100, 200, 300-unit complexes, I just don’t really know how that model really makes sense at that point. And if the investor doesn’t want that, no big deal.
But for me, I am. I do want that. I do want 100 properties or 200 or 300 properties. Right now, this year, I’m going from 15 units. I just closed on another 20 units. And I actually raised that with a private investor funny enough. So now I’m at 35 and then I’m raising money for another 23 units. And pretty soon I’m going to be at 50. I’m going to be halfway to my goal of 100 units this year. But the only way I can do that is by going out and raising money and kind of going to that next level because the small secured debt, that format to me, doesn’t seem to make as much sense.

David:
I do what you just described sometimes. So I closed a couple months ago on an apartment complex in Fort Walton, Florida. If you guys watched the episode with Andrew Cushman, he and I buy apartment complexes together and we do structure them that way. Those are a little different because people know when they’re buying one of those, they’re not investing in… How do I want to say this? That’s very clear this is a deal outside of David. It’s an entity that is not David Greene. They’re not lending money to David, right? It’s marketed very differently. That’s made more clear.
And you’re also dealing with a different type of investor. That’s typically someone who understands that space, has done that a little bit more. I sleep well at night knowing this is a credited investor who understands these deals. This is kind of what they do, right? That’s not the same person who’s like, David, I have $100,000. I think the market’s going to go down. I don’t want to buy anything right now, but I want a return on my money. Can I let you borrow it for two or three years? And then I’ll get it back from you right around the time I think the market’s dipping. That person doesn’t really know real estate very well and I would never want them investing in the apartment complex, because they don’t understand how to even read the prospectus that we put together.
Amy, I’m going to ask you for your opinion on, in today’s market, how this should be approached. Because there’s certain people that are used to seeing the syndication model where the risk is shared amongst the investors, and then there’s other people that are terrified of getting into this because they want to invest and they don’t know what they’re supposed to look for. In my mind, maybe they should be debt investors as opposed to equity, but they don’t even know that they’re supposed to ask for that.

Amy:
Right. So one of the things I always try to do is I explain to private money lenders, “Hey, if you’ve never done this before, or even if you have, I’m always going to just educate you, educate you on our standard process. I will educate you on the different types of investment options that we have.” There was a gentleman I spoke to a couple of weeks ago and he said, “Hey, I only want to invest into commercial syndications.” So I don’t feel like there’s a right or wrong way. I just feel like there are different ways of investing your money. And we, as the real estate investors want to just educate our private money lenders on the different investment options that we have. And I still will tell them, like the gentleman who wanted to invest in a syndication, I didn’t have a syndication available at the time, but I said, “Hey, I’d be more than happy to introduce you to a credible investor in my network who is launching a syndication right now and raising capital. And if you want to park your money with him, great.”
So I’m all about collaborating and sharing resources. I just want our lenders to know what their options are. I’ve even gone as far as getting my underwriter on certain deals on the phone, my CPA to explain benefits of investing and leveraging out of your retirement accounts or life insurance policies, because that’s not something I’m an expert at and I don’t want to be an expert at that, but I want my private money lender to have enough knowledge, to make an informed decision for what makes sense for him or her.

David:
Let me share an example of how money flows in and out of smaller deals versus bigger deals. Because I think this can clear up some of the confusion that people may have with what type of deal is better for them. Most people that are investing in real estate, we’re looking for cash flow. At its basic general level, real estate with training wheels, you go buy a house, it collects a certain amount of rent. You figure out the expenses. The rent is more than the expenses. You take the difference. You multiply it by 12. That’s how much you make in a year. You divide it by the money you put in, you get an ROI and you want that ROI to be high, right? Double digits would probably be pretty good, right? Then maybe you factor in a little bit of, is it appreciating or is it stagnant? And that’s kind of all, you got to figure out. At entry level real estate, that’s how it works.
When you start getting into these bigger deals that someone needs to raise money for, because the ones I just described, you don’t see a ton of people raising money to buy stuff like that. The thing is, value is being created in these bigger deals, like a development or an apartment complex that someone’s going to buy and they’re going to put $6 million into a $20 million apartment complex that’s going to raise the rents over a three-year period of time and then add $10 million of value to the apartment complex. The tricky thing about understanding those is that the deal can be progressing just fine. The rehabs are happening. Rents are slowly going up, but they happen over a 36-month period as tenants move out, then you fix up that unit. Then the rent’s up on that one, but you still have the other 300 that you haven’t got to yet. You can’t just go in there and rehab the whole thing if it’s a duplex that people are used to buying.
So you run into a scenario where value is being added. Equity is being added. The NOI is going up, but your cash flow does not keep up with the rate of return that the investor would want. So when you’re offering a 15% internal rate of return, you can’t get that money every single month like you would when you bought the duplex. I’m trying to make sure I’m explaining this right. Maybe you guys could clear it up for me. Cash flow is one way that money flows in and out of deals. Like, if you look at blood, you need blood flow coming in and out.
But then there’s other ways that value is created inside of the deal that you can’t necessarily pay people back with. So with a bigger deal, you may have to wait five years before you can get that money out because there isn’t enough cash flow being generated, even though there is value that’s being created. And at the end of five years, there typically would be that kind of cash flow. And if you don’t know that just because it isn’t cash-flowing, doesn’t mean it’s not working or it’s not performing, you would be afraid of those kind of opportunities. Am I explaining this very well?

Rob:
Yeah, I think so. I mean, there are a few ways that that works out, especially if you’re talking about a bigger deal like that. I mean the cash flow typically, obviously you want to… That goes into the return. But a lot of the times the funds and the syndications, like the ones that I’m doing, for example, we put a sale date on it between it’s usually three to seven years. I think the one I’m doing right now is five to seven years. But because of the added value that you’re talking about, a lot of the times what we’re doing is we’re going to go in and we’re going to fix up a hotel, for example. And we get into pretty specifics here, but you’re talking about an apartment complex. There’s tenants. You have to wait for them to leave. I like the hotel model, for example, because people are in and out every day. And so we can just block off that.
But our idea is we’re going to go in, we’re going to renovate it. We’re going to get the value up. And then ideally do a cash out to pull most of that money back out and pay back to the investors. Every single fund is obviously very different. Not everyone does this. But for the funds that I’ve been a part of, we try to pay back the investors as soon as possible. That way, basically whatever cash flow does come from that, it usually ends up being a good return because a good portion of the capital has been returned at that point. But again, that’s like one way to do it.

Amy:
Yeah. I mean, there are some private money lenders who don’t need the income in the form of a monthly cash flow. And they’re more interested in taking advantage of all of the tax benefits they get by investing in a commercial syndication, forwarding the depreciation, 1031 exchanging certain investments. So it really just depends on… This goes back to knowing your audience and understanding what they have experienced in the past as a private money lender and what their expectations are moving forward.

David:
Yeah. That’s a great point. So thank you guys, you’ve kind of brought me to the point where I can clarify it now. If you’re trying to build wealth, you’re probably not going to have access to your money during the period of time it’s working. Okay? You’ve sent it out overseas for five years. It’s out doing its job and it’s going to return with a … full of spices that they’re going to make you are rich. Okay? That’s how the people that make good money in real estate, that are putting into these bigger deals, they don’t expect cash flow to come in every month or even every quarter. But when the money comes back, it comes back with a very big return.
If you’re someone who’s trying to find financial freedom, if you’re someone who’s trying to get yourself out of debt, if you’re someone who’s just trying to build momentum to where you can get yourself financially solid so that you can save money easier so that you can go take on some of these deals, maybe you want to focus on something that will get you monthly cash flow in the beginning. And I don’t think it’s an either or. I don’t think it’s which way is better. I think it’s, in this season of your life, do you need money coming in every single month so that you can get ahead or are you relatively safe and now you’re at a point where you don’t need to see that money right away, as long as you know that it’s working?

Rob:
This is quickly becoming my favorite episode of the series, simply because we’re actually getting into very… It’s very nuanced, right? I hate that, as a educator in the space, a lot of people ask you a question and it’s always like, it depends. But it really does, because every single investor’s different. And I’ve talked to at this point 100 investors in my real estate career and every single one is different and some care about one thing and the others are like, no, I don’t care about that. I just care about what’s the ROI on it or what’s the IRR, right?
I wanted to ask you, Amy, because I know you do raise a lot of money. This is what you do, right? And you talked about in the credibility aspect of the FACT framework, how you take them through how the money is deployed. So when you’re raising money and, again, I know this will probably be a “it depends” answer, do you not necessarily have a project intended for that money? If you’re going out and someone says, “Hey, Amy, I’m going to give you a million dollars.” Are you like, great. I’ll take that. And then you then go and figure out how to deploy it. Or do you usually present what deal that money is going to go into?

Amy:
So I’m always proactively looking for capital and building rapport and trust with individuals. If I don’t have an active project… Like right now, I have a couple. If somebody says they’ve got capital to invest, then I will turn to other trusted investors in my network and make an introduction. Hey, I’ve got a friend of mine in Scottsdale right now, who’s doing a million-dollar raise on a small syndication. And there’s more money coming in to my business than I need based upon my project. So I’m introducing them. So I’m all about collaborating. No, I don’t have that scarcity mindset where I’m worried about what if I get a deal tomorrow and then I need that million dollars. Because when you’re following a proven system and you know how to raise capital the right way from the right people, it’s not going to be difficult to get out there and raise capital from your existing network or a new network that you’re developing.

David:
And that’s why we wanted to have this conversation. Because if you follow the steps that Amy has laid out, you’re going to have people that say, “Yeah, I’ve got some money. What do you have in mind?” And you don’t want to be like, “I didn’t think I’d get this far.” Right? There’s that old meme of you start talking to the pretty girl. And then she’s like, “Yeah, you can have my number.” And you freeze like, I don’t know what I’m supposed to do now. You want to have some idea. And so I’m trying to plant some seeds in people’s minds that depending where they are, what opportunities to deals they have, how they can structure that.
And then the reason I think that’s valuable is, if I know I’m looking for someone like the people that I described, I’m looking for a person that has a lot of money in the bank, doesn’t want to invest in the market right now, whether that means they don’t have enough time, they don’t like the risk factor. They think that the market’s going to drop. Doesn’t want to have to learn the asset class. They just trust me. I’m looking for a different avatar person to give my 13-word speech to versus someone in Rob’s space. He’s looking for a very different classification, a person who’s going to put their money into his hotel that he’s going to be building. And then the money that Rob and I are going to raise eventually for the Scottsdale place that we bought, completely different person. You want to know who you should be talking to in the elevator, right? You’ve got a couple different people in there who you should be focusing your time on.
I want to ask you, Amy, as someone who is experienced in doing this for a while, what are some of the red flags that people should look out for if someone’s trying to raise money from them? And then, also, if they are raising money, what are some red flags they should avoid so that they don’t trigger that stereotypical Nigerian print syndrome that other people think, oh, this is a scam. I don’t trust you at all.

Amy:
Sure. As I’m putting myself in the shoes of a private money lender, if you guys are approaching me and you’re trying to raise capital from me, a red flag to me would be you on the first phone call asking me for money, trying to convince me of this amazing deal that you have. Or if I get an email from you that says, “Hey, I have a deal.” We’ve never even met. We’ve got no rapport. “Hey, I’ve got this deal.” Don’t put your private money lenders on an email blast until you have an established relationship with them. So if I see those types of emails come in, it’s a red flag to me. I will not give you guys the time of day.
If you reverse that and now we are out there and we are raising capital, things to look for in somebody that’s lending you money, I mean, there’s a lot… I always say, hey, we’re going to raise money the right way from the right people. And it starts with mindset. We have to believe that we really are providing these private money lenders with an opportunity to invest. And I believe that we are. Where else are they getting double-digit returns backed by real estate, above and beyond all the other controls we put into place, right? Because as control goes up, our risk goes down. And we control everything in our real estate business. So it’s a matter of educating this to our private money lenders.
So number one is we have to have the right mindset. If our private money lender doesn’t share a common mindset, if we don’t align on our moral or ethics, I don’t have time for that. That’s not somebody’s money who I want to put to work in my business. There are going to be people who… This has happened to me. I had one private money lender who just bullied me around with his money, but it wasn’t until he had actually processed the wire. He was great. He was my best friend. The minute he processed that wire, the next seven days were the most daunting.
He actually showed up at my property unannounced, which means he flew in from Florida on his private jet to Downtown Chicago, left me a voicemail saying, “Amy, we’ve got some big problems. I need you to come to the property right now so we can talk about what’s going on.” I didn’t call him back till the next day. And then in my passive aggressive voice, I was like, “Oh my god, I understand you were in town. Did I miss the memo?” And I said to him, to make a long story short, “This isn’t working now. I’m going to need your wire instructions and I’m going to just cash you out.” And I gave him seven days of interest. I don’t have time for that, right? You’re a silent stakeholder.
Other red flags for us is let’s make sure that we’re not data dumping on people. Until a private money lender asks for more information, don’t just give it to them. And never say, “I don’t know.” And a lot of us are still learning, right? A lot of you are going to get out there and implement that four-second power pitch and you’re not going to know what to say next. So instead of saying, “I don’t know,” just substitute that with, “That’s a great question. Let me turn back to my team of experts and I’ll get back to you within 24 hours.” And then get on the phone and reach out to your community or other people in your network who have done this before, if you have a coach, and be like, “This just happened, what do I say? What do I do? Right? So we always want to position ourselves as the polished professional poised for aggressive growth.

Rob:
Yeah. There’s a lot of gold in what you just said. I mean, I think first of all, just because you can take money from somebody, does not mean that you should. And obviously this is a good problem to have, if you do have all those options, but you really do want to vet your investors just as much as your investors are vetting you. And this is something I don’t think a lot of people realize because we’re so hungry to get into a deal. We’re so ready to get into our third or fourth and scale up, right? And so when someone’s like, “Take my money,” in your mind, the obvious answer is like, heck yeah, give it to me.
But for me, for example, I get people that reach out, I mean, several, several times a week, that will just out of nowhere, say like, “Oh, I’ve got a million dollars. I’d be interested in investing. Give me a call.” And I’m like, “Thanks, but no. First of all, how about just say hello first? Don’t just say, give me a call right now.” Because that right there shows they’re expecting a phone call. If they’re expecting a phone call from me before we’ve ever met, that already for me is a red flag. I don’t want that. And plus I don’t have… This kind of goes back into, don’t just take money because people are offering it to you.
You might disagree with me here, Amy, but because of the influx of investment inquiries I get, I don’t always have projects to deploy them in. And so that for me is my struggle right now is I actually have really great investor deal flow, several times a week people reaching out, I just don’t have anywhere to deploy it. And so it’s always like a, “Hey, thank you anyways. When I have a project, I’ll let you know.” So I’m always now actively working on what the other side of this equation is, which is deal flow, right? I think investor deal flow is important, but the actual deal flow is equally important.

Amy:
Just to piggyback off that. The power of raising capital, it is endless opportunity. Whether it’s to the listener out there, those of you who are experienced or not experienced, when you know how to raise capital within raising in ethics, you can do whatever you want in the real estate world. You don’t have to be a fix and flipper. You don’t have to wholesale properties, go raise capital and become an equity partner to somebody who is syndicating a deal. This is an opportunity that someone just presented me with a few weeks ago. I’ve been doing this for 10 years and I never thought of it. He said, “Go raise capital. I’ll give you 5% equity in this syndication.” So you don’t even have to have experience in flipping or wholesaling. You don’t even have to want to flip or wholesale. Just go raise capital and partner with other people who will give you equity stake in their company.

Rob:
Yeah. I’ve figured this one out recently where I was like, I should probably not always just not follow up with these investors that are like, “Take my money.” Because again, for me, I do have the fiduciary duty to perform well. So if I can’t perform well, if I don’t have a deal that I feel I can do that, I’m not going to really pursue that lead.
But I want to go back to what you were saying about what newbies are saying that could be a red flag to an investor because I think that’s where most of the people are going to be at for this episode. And you said one already, “I don’t know.” And just a very small shift in your language going from I don’t know to that’s a great question. Let me figure that out for you because actually partner handles this side of the business. Or, we have a couple ways we do that, but before I speak too quickly on it, let me send you the actual document where it’s written after this phone call or after this meeting because I don’t want to speak out of turn. Because what people will do is they’ll either say, I don’t know, or they’ll try to fake it till they make it, quote, unquote. And by faking it till they make it, they’re going to give bad information that they’re going to be held accountable to whenever the actual terms come to light. So are there any other things that newbie investors say that are kind of in that camp?

Amy:
Aside from what they’re saying, I mean, that’s a huge one. A lot of it is also our body language and our tone going into these conversations in person or over the phone. We got to be confident in our delivery. If anyone senses any sort of timidness or uncertainty in our voice, they’re not going to invest with us. Right now, take the script we’ve given you, that four-second power pitch, practice it at home. Perfect it. Even if you don’t know what comes next, just be able to rattle off those 13 words with confidence because that will be a red flag to a prospective lender is if you don’t sound confident in your delivery.

Rob:
Yeah, for sure. I think there’s a few ways you can do this. So A, if you end up not closing an investor, I actually don’t think that there’s anything wrong to ask like, hey, where did I go wrong here? What was something I said? If you’re close. Because a lot of the people that I know will reach out and you may have that relationship with somebody, but, hey, I’m just curious. You’ve already said you’re not interested. That’s totally fine. I’m just curious. Where did I go wrong? To not mince words here. And kind of find out and then also talk to other people who have raised money to find out their tips and tricks.
I recently had a similar story. It’s a little bit adjacent to real estate, but I’ll tell it anyways, because it’s something that I figured out that talking to a pro was really able to help me out. I’m becoming somewhat of a watch guy. I’m wanting to get into watch collecting and build up that side just because I’m fascinated by this asset class. And so I started doing a lot of research and I got pretty knowledgeable. I fell on watches and these are tough to get. So I’ll go into the dealer and I start saying like, “Oh, I want this and I want this.” And, “Oh, you know what, give me these four. Whatever’s available, I’ll take.” And they’re like, “Sorry, bud. It’s a yearlong wait list.” And I was like, “Oh, okay. All right, sure, fine, whatever.” And I left.
And so I got connected with another watch expert/reseller. And I was like, “Hey, man. Yeah, I kind of struck out several times.” He was like, “All right. Well, tell me about the conversation.” And I said, “Well, I said I wanted these five watches. I said that I was willing to whatever it takes to get it.” I said this and this and this. And he’s like, “Oh, these are all the red flags that you just said in one conversation.” He’s like, “Congratulations, you actually broke the record for listing all the same red flags in the initial conversation.” And he was like, no worries. Here’s what you got to do. Here are the tips and tricks. This works for me every single time.
And so he said, “Hey, go in. And instead of talking about watches, why don’t you talk about your life? Strike up a conversation with the watch seller, the time piece seller, if you will. And let them know that you’re a person, that you’re not just there to get a watch.” And he’s like, “And also don’t go in guns blazing saying, ‘Hey, I want any watch. As soon as it’s available, you let me know and I’ll come by and I’ll buy it.’” He’s like, “The last thing you want is for that watch dealer to think that you’re a flipper because the moment that they think that you’re just going to flip the watch and sell it, then you’re already blacklisted.” And he is like, and also do this and this and this. And I was like, “Oh, okay. All right. I did mess up.”
And so I went back to two and I implemented exactly what I said. And I was like, all right, I’m not going to say these five red flags. And I was able to actually get the watch, instead of waiting a year, within three weeks, both times with two different dealers. And I was like, oh. So there is a practice to working with somebody and making sure that you are educated and that you’re not just, like you said, data dumping and trying to prove that you’re smart. Because I think what we’re trying to do at the end of the day is prove that we’re people first, that we’re people that we want to work with. And if we can prove to an investor that they want to work with us, then at that point you can start leading with a little bit more data and kind of nurturing that relationship.

Amy:
Yeah, absolutely. I get a lot of investors out there who will say, “Shouldn’t I be marketing my company?” And I believe it’s the opposite. We’re marketing ourselves. And when people know us, like us, and trust us, the individual, then they’re naturally going to invest in our business. And we really have to just wrap up mindset and confidence. Remember, we’re not asking for money. So we don’t ever want to approach a private money lender and say something along the lines of, “Hey, I’m looking for $100,000. Are you comfortable lending me money?” Right? It’s, “Hey, I’m in the middle of a capital raise. This is the investment opportunity. Let me know if you’d like to know more.” And we just got to deliver that with confidence.

David:
What do you think about the red flag, Amy, of starting with the interest rate before you give them ease that they’ll have the return? That’s something I’ve seen where there’s someone raising money and they’re like, “Hey, I’m offering 18%. Are you interested?” And immediately they’re like, “Oh, that sounds scary.” Versus, “Hey, I’ve got a deal and it’s under market value and this is the plan to add value.” And they’re going to receive their capital back after 24 months. And we’re anticipating a return of this much. I think that’s a pretty significant red flag where someone comes out and says, “Hey, you want to invest with me and get a 75% return?” as the way that they open the conversation.

Amy:
Right. Like, I don’t even know you, right? Along the same lines of what Rob said, I don’t know you. I know nothing about the deal, who you are, and what you’re doing. I don’t care about your 18% return. So it’s going to be the latter of the two. I’m going to highlight how we protect, secure and ensure their investment, how long we’ve been doing deals in Downtown Austin. And by the way, we offer double-digit returns backed by real estate. If you’d like to know more, great, let me know. And I’m still not going to ask when I frame it that way.

David:
One of my favorite books is Pitch Anything by Oren Klaff. We’re working on trying to get him on the show. The title of the book is a little bit kitschy. I understand, like it kind of turned me off. I didn’t read it for a couple years just because pitch sounds so negative. But what he is really getting into is how the human brain processes information. And one of the key points in the book is that the very first thought emotion anyone experiences to any form of stimulus is, is this going to hurt me? So when you guys say, I don’t even know you, nobody’s assumption is you’re probably nicer than Santa Claus, a stranger. No one’s like Will Ferrell and Elf is what we’re getting at.
Their first thought is always, how are you going to take advantage of me? How are you going to hurt me? They don’t listen to a word you say until you’ve already proven yourself to be safe, which is why, like Rob was saying, by leading with here’s who I am. This is what I do. I’m a regular person. And eventually this is why I want the watches. I’m a big fan. I want to give them to my kids someday, whatever the case is. Now that part of their brain that says, threat, bad, negative quiets. Now they can actually hear what you have to say and then the appropriate time to bring up the price you want to pay for the watch or, Amy, in your case, what the interest rate would be.
I love highlighting that because that’s a mistake I see a lot of people say, “Hey, huge returns. Invest here.” It gives you that same feeling of in the ’90s when a little popup would come on your computer that you just knew there was a virus behind that. Like, this looks so shady. Even I’m afraid to tap the X to make it go away, because for sure this is going to hurt me. There’s human beings that walk around giving that same vibe and you don’t want to have that if you’re an honest person looking to put money to use.
Right. I’m going to move us on to the next segment of our show. In this segment, we are going to read questions from people that have asked about this specific topic and we’re going to let Amy and Rob answer them. Question number one comes from Stephanie Mokris. She says, “Okay, I am officially addicted to the BiggerPockets Podcast. I’m a travel nurse with a one hour 20 minute commute. And I love listening to you guys while driving. Thank you for all the value you provide to your audience. I do have a question regarding this series. What is the strategy used to pay the private lenders back? I can see in a flip or a BRRRR, but how about if the borrower used the private money for a turnkey property?”

Amy:
Sure. I get that question often. You can still raise private money for a turnkey rental property. There are going to be a few differences. Number one, you’re more than likely not going to offer double-digit returns because the numbers just don’t make sense. What I have found is it’s going to be around a 6% annualized return. Number two, it’s not going to be a 12-month term, a 12-month promissory. No. At a minimum you’ll want to get a commitment of two years. And number three, you will make similar to Dave monthly interest-only payments out of the cash flow. And number four, just make sure you’re targeting rental communities that are in preferably type A markets so the property appreciates, so that in two years you can do a cashout refi. Even if you’re not implementing the BRRRR strategy, we want to make sure there is a little bit of work you can do with the property and it’s in an area that will appreciate so you can do the cashout refi in two years, pay off your private money lender, and then the house is yours.

Rob:
Yeah, I think that’s great. We’ve done it a few different ways. I actually have a buddy who said that whenever he’s buying his short-term rentals, he exclusively will go to friends and family and raise the money private. He says that they don’t know the power of HELOCs or they might have a HELOC line of credit where it’s just sitting there. I mean, I guess a HELOC is a line of credit. But a HELOC for those of you that don’t know is a home equity line of credit that you can use. And so they have that sitting. And so he’ll say, “Hey, your HELOC interest rate is 4%. If you give that over to me, I will give you a 6% return on that.” So a total of 10% debt for him. And he just chips away at that every single month.
Now caveats here, obviously that is pretty close to hard money rates. So if you’re going to do that, make sure that your deal works pretty comfortably and that there is margin on that just for errors and for market stuff and everything like that. But he does that and he loves it. And his plan is exactly what you said, Amy. He wants to go out and cash out in two or three years. In fact, just because of the crazy year that we had, he said he could cash out already and pay them back. But for him, he’s like, “Well, I’d rather just keep the cash flow and keep chipping away at everything.”

David:
All right, next question. Rob, I’ll let you take the last one. This one’s pretty good. And I like getting into this stuff that other people avoid. “What happened to the good old days where BiggerPockets had real estate investors on, who were willing to share their successes and failures? They just loved talking real estate and weren’t trying to sell anything. As soon as I hear a guest say, ‘One of my students,’ I immediately write them off, not as a real estate investor, but as some wannabe guru. The people who are out there really buying real estate, don’t have time to sit on the phone and coach people.”

Amy:
Another loaded question. So using myself as an example, I’ve been doing this for 10 years. It took eight years of investors all over the country asking me to coach them on how to raise private money because we all have strengths and weaknesses. I’m very good at raising private money. I’m terrible at a lot of other things. I’m terrible at marketing. There’s a lot. Because this comes so easy to me, for example, and because it is one of the top two most challenging things that we are tasked with as real estate investors, I enjoy coaching and helping and teaching others. Earlier I said, I wanted to help Josiah because he just seemed like a great guy who is actually implementing what I teach and starting to see results.
All that said, I’m still a student of the industry. I’m still learning. I’m still growing. I still go to events myself. So even through my coaching community, I learn from my students all the time. So I believe that when you coach and give back to others, that tool will find its way back to you, whether it’s in that same topic or other parts of our real estate business, or even other parts of our lives personally. So that’s why I do this.

Rob:
Yeah. I’ll try to answer this diplomatically. If you go to an electrician or a plumber and you said, “Hey, man, I love that you’re a plumber. Will you come do that for free?” What are they going to say? They’re going to say no, because you are paying for their experience and their time. And that’s effectively what education is. You’re paying for your educator’s time to help you go to the next level.
But outside of just the loaded aspect of this question, there’s a lot of free content out there. For me specifically, most of my content out there, it’s all free. Like TikTok, Instagram, YouTube, I give everything for free. Now, obviously I do have coaching and everything like that. But for those people, I’m always like, well, you’ve watched 20 of my YouTube videos and those 20 YouTube videos, they’re all 15 minutes each, it takes one hour to edit every single minute in that YouTube video. So, if you watch a 20-minute Robuilt video, that took 20 hours to create. So if you watch 20 of my videos, you’ve just watched 400 hours worth of my work and that is for free.
So I don’t think that there’s anything wrong with online education if you trust the person that is there to educate you and if they’re credible. On top of that, I think the way you can really start sniffing this out and really getting to things is, is that person still doing what they’re teaching? It’s very easy to rest on your laurels and not continue specializing in the thing that you’re teaching, right? But for me specifically, it took five years to get to 15 units. So far I’m at 35. Now I’ve more than doubled it so far and I will quadruple it by the end of 2022.
So I think if you’re having a little bit of pause with the online education part of it, go and see what that educator offers and then make sure that they’re still doing it. And if they’re not, then, at that point, I think you can start to question it a little bit. But education is so underrated. Hormozi was just on the podcast. He got super fired up about this too. And I was like, thank you, amen. Because why is it such a bad thing to become smarter, Dave? Why is it such a bad thing, David?

David:
I can understand… It was Matt Spangenberg’s comment here. I can see his point that if you are good at doing this, you wouldn’t be teaching it. And I think that applies to a certain subset of slimy people who talk a big game and they are internet marketers, and then they go sell information that you could have got for free somewhere else. There is many of them. It’s easy to throw the baby out with the bathwater. But there’s other people who do this at a high level, who can reach more people via the internet than they could possibly do individual deals.
So like I mentioned, I’m out here in the Smoky Mountains. It’s been three days in a row, I’ve been driving around, looking at cabins all day long. I can’t really talk on the phone. The Internet’s in and out. You’re on these windy cabin roads. You can’t really do much of anything other than look at these cabins. I’m not being productive for anything else while I’m out here. It’s not the best use of time. Now I won’t do this forever, right? I will learn the area. I will figure out how this works and then I’ll buy cabins with my long distance investing techniques.
But what I’m getting at is, if I was to coach 1,000 people at one time on how I do this, that would be more money per hour than I could possibly make buying these cabins when I’m having to drive around, to look at all of them, and then write all the offers, and then talk to the agents. And you know how agents love to talk, right? So every time you want to get anything done with an agent, you got to listen to them talk forever with their high I personalities. You can tell that I’m a high D and that kind of drives me nuts a little bit. There is a scenario where it’s not necessarily true, Matt, where, if they could invest, they would be doing that instead of coaching people, because you can reach so many people at one time. You’re also spot on with the fact that there are some slimy people.

Rob:
Oh my god. For sure. 100%.

David:
And that’s one of the reasons that BiggerPockets grew to what we did is we firmly stood against the slime bots, right?. There’s people making a whole lot more money than me selling those courses instead of being on this podcast, but I’m not going to do that because I don’t want to be associated with those kind of people. It’s something you have to… I get it a lot of the time from, “Well, he’s a real estate agent. Of course, he says to buy homes.”

Rob:
15.

David:
I just bought $15 million worth of real estate in the last 30 days. Because I’m an agent, I’m telling people to go buy houses. Amy, go ahead.

Amy:
But this goes both ways as far as expectation and personality is concerned. As a private money coach, for example, there are plenty of people who I have turned away and I said, “You’re not a good fit for my coaching program.” Because in the beginning, because I really love this, if you can’t sense the passion and energy, it’s been like this for 10 years, I’m tired trying to convince people on the opportunities that they’re missing out on, how they can go buy five rental properties tomorrow, they can grow and scale their real estate tomorrow just by knowing how to raise capital. So if you don’t have that mindset, I don’t want to coach you. I just turned someone away the other day. I was like, “Keep your money and go figure it out on reading books or listening to podcasts or on YouTube.”
I’m the type of person, and this is exactly how I started, I want the fast track to success. I want the shortcuts. I don’t want to make a bunch of mistakes that’s going to cost me more financially in the long run. Again, we all have different goals and expectations, and there are plenty of coaches who will respectfully turn away your money as well, if your expectations don’t align with theirs.

Rob:
100%. Hormozi, I think he said he spent $170,000 for each of his four calls with Grant Cardone. And he said it was worth it 20 times over because of the value that he got from it. So you just have to ask yourself, what value am I getting from this? Is it something that’s going to help me? And if not, then move forward. Or, if you’re not going to get the value, then move on.
All right. So let’s move on here. So this one is Tamaz Poznanski. Sorry, Tamaz. I feel like I mispronounced that, but I gave it my best shot, Tamaz. Okay. Question. “Hello. What the entire paperwork process looks like and how it’s backed up for the investor, for the house that I’m trying to buy. So I want to see what the pros are of private money over hard money. And also how do I set it up?”

Amy:
So you’re going to want to use three standard contracts and the three standard ones I use in my business to protect, secure and ensure my private money lenders include, number one, the security’s going to be in the form of a recorded mortgage. Go get that from your real estate attorney or a title company. But that’s what secures your private money lender’s loan to the property. You cannot sell the house unless you get their written authorization.
Number two, the way you’re going to protect the investment is through a promissory note. Go get that from your real estate attorney or title company. A promissory note is just a one-page term sheet that summarizes the conditions of your loan. I, Amy, promises to pay you, Rob, $100,000 over the next 12 months at a 12% annualized return. And this loan is secured by the property located at 123 Main Street.
So, so far you got the recorded mortgage, the promissory note, then the third thing you’re going to do is talk to your insurance agent and say, “Hey, I got to make sure that my private money lender’s listed as a beneficiary or lost payee on our builders risk insurance policy for their loan amount.” You’ll give a copy of that two-year private money lender. This way, if a natural disaster happens, your insurance will pay back your private money lender. Those are the three pieces of paperwork that you will use as a part of your standard process.
Now, why private money over hard money? I love them both. Love my hard money lenders. Love my private money lenders. It depends on you. It depends on the deal. When you work with private money, you’re not going to pay any points. Because I don’t offer my private money lender points. You’ll pay a couple of points in hard money. It’s the cost of doing business. You’re going to have higher interest rates. They’re going to check your W-2. They’re going to check your credit. It’s all a part of their standard process, but you’ll have the money tomorrow. They’re still not going to give you 100%. So whether you work with hard money or not, you still got to come to the table with that gap funding, the difference. I don’t want to come to the closing table out of pocket. I want to use whatever money I have to go build my passive income portfolio, buy more rentals, lend to other investors, and then use other people’s money in my fix and flips and wholesale deals to make that infinite return. Anything you guys want to add to that?

Rob:
No, that was pretty good. That was pretty good. I think you summarized that very concisely and intelligently. I’m going to step back from this one.

David:
I do find it slightly ironic that Tamaz’s question, one of the first thoughts I thought was this is such a specific question that this is probably best directed to somebody who is coaching you. We get this a lot like, “Hey, can you share your spreadsheet with me?” And this is a spreadsheet that maybe Rob has spent four years developing and tweaking and making mistakes to try to get it to where it’s at. Or, “Can you just send me the document that you use to do these deals together,” that maybe Amy spent $50,000 over lawyers to put together. And you get someone who is getting free content, here’s about what they do and then says, “Now, can you give me the thing you spent $50,000 for,” and gets kind of salty if it doesn’t happen.
It doesn’t hurt to ask, but just don’t get upset if someone’s like, “Yeah, I’m not comfortable giving you my entire system that I’ve spent years and hours and made so many mistakes and lost so much money to come up with for free.” That would be more appropriate if you’re being coached by that person and you’re paying them to coach you. And then they say, “As part of my coaching program, I’m going to give you my complex spreadsheet or my legal documentation I use.” Do you guys disagree about that?

Amy:
No. And it comes up all the time.

Rob:
Yeah. Fun fact. I give mine away for free. All my docs. I give that, furniture shopping lists, templates. That’s why when people are like, “You’re just slimy.” I’m like, “Dude, it’s free. I’m sorry that it’s free.”

Amy:
I give away plenty for free. I just had someone call me the other day. And I’m at a point now where it’s like, again, I don’t need your money. Keep your money. You’re not a good fit for this coaching program. Because I don’t do one-on-one coaching anymore. And he said, “Hey, can I just give you like 500 bucks per call and do a couple of calls with you?” And I said, “Thank you for the offer. And no. Save your $500 because I’ve got 71 different strategies that I teach. And whether you’ve done this before or not, we all start with module one. So I can’t teach you everything to get out there and raise money the right way with two phone calls. I could literally talk about this for two months. So if you want to be a part of this community and raise money the right way, then,” I told him, I said, “let me know if you want to talk more about my coaching program.” And he ended up enrolling that night. But it’s like, it’s more than just two phone calls.

David:
Yeah. And by no means are we saying you have to go pay for a coach or even that you should go pay for a coach. I never did that for a long time in real estate. I’m going to use a gym analogy, because it just always works out so good.
The gym has everything you need. It’s got all the machines, it’s got all the weights. It’s got the cardio, it’s got the different levels. It’s got the sauna, it’s got the pool. It’s got the basketball court. It probably even has instructional videos on how to use this stuff, but that is different than hiring a personal trainer. The personal trainer will get you in shape faster. They will provide more than just access to the gym stuff. They will show you how to use it. They will push you. They will make sure you get there. They’ll teach you how to use it better than you would’ve been able to use it without them. They are going to sharpen your learning curve and your success curve. And that’s why you’re paying them. But that doesn’t mean you have to. If you don’t want to do that, you could just go to the gym.
BiggerPockets is a gym. It’s got forums. It’s got blogs. It’s got very cheap books. It’s got this podcast and five or six other podcasts. It’s got a YouTube channel. It has free webinars. It’s got tons and tons and tons and tons of stuff that you get to go use completely for free. But if what you’re looking for is a personal trainer, it’s okay to pay the personal trainer for their time and for their experience, because this is how they make their living. They got in really good shape and now they teach other people how to do it. I’ll kind of put a pin on it there. Let me know in the comments, as you guys are listening to this on YouTube, what do you think about what we said? Was this too controversial?

Rob:
Give us some hot takes, guys. Give us some hot takes.

David:
Do you agree with us? Did we not cover anything that we should have? I’m not afraid of the conflict. You guys can go ahead and bring it. Tell me if you don’t like something I said or what you didn’t like about it or, if you did, I will be happy to address that maybe in a different YouTube video for BiggerPockets, because this is a very controversial topic, but I don’t see any reason why I need to stray away from it.
Okay, Amy, this has been fantastic. I think this was a very good interview. I appreciate you being willing to wade into these murky waters that we just did, because borrowing people’s money is a very nuance and complicated topic. And I want people to get good at it. I want them to use your system. I want them to have success, but then once you get the success, you don’t want to be stuck saying, I didn’t think I’d get this far. What am I supposed to do? Because we want people to be successful with their investing. Do you have any last words of advice that you can offer?

Amy:
You guys got this. Again, you’ve got plenty of resources out there. Let us know. Let me know. I manage all of my social media. I am here for you as a resource. Any question you have, I will respond within one to two days. Just send me a DM. And I got you. I’m going to try to get through as many of the comments and questions as I can in these videos. So whether you work with me or not, you guys, I’m always here for you as a resource in any part of your real estate business. So don’t ever hesitate to reach out to me.

David:
Rob, how about you? Any last thoughts on this nuanced and complicated topic?

Rob:
No, I think it’s exactly that, it’s nuanced. And honestly this whole four-part series was really, I mean, gosh, just a really good rollercoaster of knowledge, right? Because we talk about the actual tactile concepts from start to finish for the first and second, and even the third one. Today was all about the application and the nuanced aspect of it, because I think this is probably where we were answering a lot of the questions that people have been developing over the past three episodes. So Amy, thank you so much. I mean Josiah already did, but I know a lot of people are going to benefit from just putting themselves out there. A power pitch. The power of four seconds and how it can change your life with the real estate is absolutely amazing. And I don’t think people should sleep on that.

David:
I’ve got one last question for each of you. I’ll start with you, Amy. In today’s market, where are you seeing the best opportunities?

Amy:
Best opportunities to invest or to lend in, or all of the above?

David:
No. For someone who’s either going to place their money with an investor, someone who has money, they want to invest.

Amy:
It really is deal specific. I always say, even in a recession or an economic downturn, we make our money when we buy. So private money lenders, those of you listening, if you’ve got money you want to invest, just make sure that you are talking to somebody in a market where they know how to buy. They’ve got a strict buying criteria. They’ve got a proven track record and they know what they’re doing. But you can really make money anywhere as long as you know how to buy properties.

David:
Wonderful. Rob, same question to you.

Rob:
What a curve ball, you. What a curve ball, Dave. Okay. Obviously I’m biased, so I’m going to move on from this really quickly. I think short-term rentals are going to be the place where people are getting the most return on just most of the typical asset classes, because obviously with interest rates and prices going up, I think the longterm returns are going to go down. And so that means that with short-term rentals, maybe we’re not going to get those super, super crunchy 30 to 60% returns like we were in the golden days, but those will now go down a little bit and I think be the gold standard for returns for the everyday investor.
However, with that said, where I personally am seeing the opportunity with where I am in my life and the way that I’m scaling up is I’m actually going and I’m acquiring the hotels, like I talked about, which is something that I’ve been very anti for a long time, anti hotels, and basically renovating and turning them into my version of Airbnb. So I’m taking down hotels by turning them into Airbnbs and raising money to do that so that I can basically just scale up a little bit faster than, I mean, it’s a lot more faster than I have over the five years. So I think I’m going to have a lot of fun here. The returns will still be really, really, really massive because of the amount of value that we’ll be adding. But it’s still in the short-term rental space. I don’t feel like I’m leaving my first true love quite yet.

David:
Wonderful. If you guys want to know what I think about that, you can find out and you don’t have to pay for it. Just go to BiggerPockets’ YouTube channel and look for a video of Christian Bachelder and I, talking about where we see opportunity in today’s market, what we’re both buying. And then another video with Kyle Renke and I, talking about negotiating strategies that we are using to get the best deals possible. And this is all on-market stuff that anybody can find. All right. Thank you both. Amy, really appreciate your time and your transparency here. Thank you for sharing your four-step system. And Rob, thank you for being you.

 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

2022-08-30 06:02:45

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How to Complete a Partial 1031 Exchange

15% ROI”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/05\/large_Extra_large_logo-1.jpg”,”imageAlt”:””,”title”:”SFR, MF & New Builds!”,”body”:”Invest in the best markets to maximize Cash Flow, Appreciation & Equity with a team of professional investors!”,”linkURL”:”https:\/\/renttoretirement.com\/”,”linkTitle”:”Contact us to learn more!”,”id”:”60b8f8de7b0c5″,”impressionCount”:”227044″,”dailyImpressionCount”:”457″,”impressionLimit”:”350000″,”dailyImpressionLimit”:”1040″},{“sponsor”:”Azibo”,”description”:”Smart landlords use Azibo”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/11\/Logo-512×512-1.png”,”imageAlt”:””,”title”:”One-stop-shop for landlords”,”body”:”Rent collection, banking, bill pay and access to competitive loans and insurance – all free for landlords.”,”linkURL”:”https:\/\/www.azibo.com\/biggerpockets\/?utm_source=biggerpockets&utm_campaign=biggerpock ets&utm_medium=affiliate&utm_content=blog”,”linkTitle”:”Get started, it\u2019s free”,”id”:”618d372984d4f”,”impressionCount”:”286245″,”dailyImpressionCount”:”301″,”impressionLimit”:”300000″,”dailyImpressionLimit”:0},{“sponsor”:”The Entrust Group”,”description”:”Self-Directed IRAs”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/11\/TEG-Logo-512×512-1.png”,”imageAlt”:””,”title”:”Spring Into investing”,”body”:”Using your retirement funds. Get your step-by-step guide and learn how to use an old 401(k) or existing IRA to invest in real estate.\r\n”,”linkURL”:”https:\/\/www.theentrustgroup.com\/real-estate-ira-report-bp-awareness-lp?utm_campaign=5%20Steps%20to%20Investing%20in%20Real%20Estate%20with%20a%20SDIRA%20Report&utm_source=Bigger_Pockets&utm_medium=April_2022_Blog_Ads”,”linkTitle”:”Get Your Free Download”,”id”:”61952968628d5″,”impressionCount”:”420761″,”dailyImpressionCount”:”279″,”impressionLimit”:”600000″,”dailyImpressionLimit”:0},{“sponsor”:”Guaranteed Rate”,”description”:”One-Stop Mortgage Lender”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/01\/927596_CB_BiggerPockets-January-2022-Assets-512×512-1.png”,”imageAlt”:””,”title”:”$1,440 Mortgage Savings*”,”body”:”Whether you\u2019re buying new or cash-out refinancing to upscale the old \u2013 get started today and we\u2019ll help you save!\r\n\r\n”,”linkURL”:”https:\/\/www.rate.com\/biggerpockets?adtrk=|display|corporatebenefits|biggerpockets|july2022_blog||||||||||&utm_source=corporatebenefits&utm_medium=display&utm_campaign=biggerpockets&utm_content=july2022-blog “,”linkTitle”:”Buy or Cash-Out Refi”,”id”:”61ccd6a886805″,”impressionCount”:”115203″,”dailyImpressionCount”:”313″,”impressionLimit”:”200000″,”dailyImpressionLimit”:”2222″},{“sponsor”:”BAM Capital”,”description”:”Multifamily Syndicator\r\n\r\n”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/02\/Bigger-Pockets-Forum-Ad-Logo-512×512-2.png”,”imageAlt”:””,”title”:”$100M FUND III NOW OPEN”,”body”:”Earn truly passive income with known assets in an award-winning market. Confidently targeting 2.0x-2.5x MOIC.\r\n\r\n\r\n”,”linkURL”:”https:\/\/capital.thebamcompanies.com\/offerings\/?utm_source=bigger-pockets&utm_medium=paid-ad&utm_campaign=bigger-pockets-blog-feb-2022&utm_content=fund-iii-now-open”,”linkTitle”:”Learn more”,”id”:”621d250b8f6bd”,”impressionCount”:”135454″,”dailyImpressionCount”:”229″,”impressionLimit”:”150000″,”dailyImpressionLimit”:”2500″},{“sponsor”:”Walker & Dunlop”,”description”:” Apartment lending. Simplified.”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/03\/WDStacked512.jpg”,”imageAlt”:””,”title”:”Multifamily Property Financing”,”body”:”Are you leaving money on the table? Get the Insider\u0027s Guide.”,”linkURL”:”https:\/\/explore.walkerdunlop.com\/sbl-financing-guide-bp-blog-ad”,”linkTitle”:”Download Now.”,”id”:”6232000fc6ed3″,”impressionCount”:”134183″,”dailyImpressionCount”:”262″,”impressionLimit”:”200000″,”dailyImpressionLimit”:”6500″},{“sponsor”:”SimpliSafe Home Security”,”description”:”Trusted by 4M+ Americans”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/03\/SS-Logo-.png”,”imageAlt”:””,”title”:”Security that saves you $”,”body”:”24\/7 protection against break-ins, floods, and fires. SimpliSafe users may even save up to 15%\r\non home insurance.”,”linkURL”:”https:\/\/simplisafe.com\/pockets?utm_medium=podcast&utm_source=biggerpockets&utm_campa ign=2022_blogpost”,”linkTitle”:”Protect your asset today!”,”id”:”624347af8d01a”,”impressionCount”:”105357″,”dailyImpressionCount”:”251″,”impressionLimit”:”200000″,”dailyImpressionLimit”:”2222″},{“sponsor”:”Delta Build Services, Inc.”,”description”:”New Construction in SWFL!”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Image-4-14-22-at-11.59-AM.jpg”,”imageAlt”:””,”title”:”Build To Rent”,”body”:”Tired of the Money Pits and aging \u201cturnkey\u201d properties? Invest with confidence, Build To\r\nRent is the way to go!”,”linkURL”:”https:\/\/deltabuildservicesinc.com\/floor-plans-elevations”,”linkTitle”:”Look at our floor plans!”,”id”:”6258570a45e3e”,”impressionCount”:”97286″,”dailyImpressionCount”:”287″,”impressionLimit”:”160000″,”dailyImpressionLimit”:”2163″},{“sponsor”:”RentRedi”,”description”:”Choose The Right Tenant”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/05\/rentredi-logo-512×512-1.png”,”imageAlt”:””,”title”:”Best App for Rentals”,”body”:”Protect your rental property investment. Find & screen tenants: get full credit, criminal, and eviction reports.”,”linkURL”:”http:\/\/www.rentredi.com\/?utm_source=biggerpockets&utm_medium=paid&utm_campaign=BP_Blog.05.02.22&utm_content=button&utm_term=findtenants”,”linkTitle”:”Get Started Today!”,”id”:”62740e9d48a85″,”impressionCount”:”79927″,”dailyImpressionCount”:”176″,”impressionLimit”:”150000″,”dailyImpressionLimit”:”5556″},{“sponsor”:”Guaranteed Rate”,”description”:”One-Stop Mortgage Lender”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/06\/GR-512×512-1.png”,”imageAlt”:””,”title”:”$1,440 Mortgage Savings”,”body”:”Whether you\u2019re buying new or cash-out refinancing to upscale the old \u2013 get started today and we\u2019ll help you save!”,”linkURL”:”https:\/\/www.rate.com\/biggerpockets?adtrk=|display|corporatebenefits|biggerpockets|july2022_blog||||||||||&utm_source=corporatebenefits&utm_medium=display&utm_campaign=biggerpockets&utm_content=july2022-blog%20%20%20″,”linkTitle”:”Buy or Cash-Out Refi”,”id”:”62ba1bfaae3fd”,”impressionCount”:”36670″,”dailyImpressionCount”:”189″,”impressionLimit”:”70000″,”dailyImpressionLimit”:”761″},{“sponsor”:”Avail”,”description”:”#1 Tool for Landlords”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/06\/512×512-Logo.png”,”imageAlt”:””,”title”:”Hassle-Free Landlording”,”body”:”One tool for all your rental management needs — find & screen tenants, sign leases, collect rent, and more.”,”linkURL”:”https:\/\/www.avail.co\/?ref=biggerpockets&source=biggerpockets&utm_medium=blog+forum+ad&utm_campaign=homepage&utm_channel=sponsorship&utm_content=biggerpockets+forum+ad+fy23+1h”,”linkTitle”:”Start for FREE Today”,”id”:”62bc8a7c568d3″,”impressionCount”:”39428″,”dailyImpressionCount”:”208″,”impressionLimit”:”200000″,”dailyImpressionLimit”:”1087″},{“sponsor”:”Steadily”,”description”:”Easy landlord insurance”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/06\/facebook-business-page-picture.png”,”imageAlt”:””,”title”:”Rated 4.8 Out of 5 Stars”,”body”:”Quotes online in minutes. Single-family, fix n\u2019 flips, short-term rentals, and more. Great prices and discounts.”,”linkURL”:”http:\/\/www.steadily.com\/?utm_source=blog&utm_medium=ad&utm_campaign=biggerpockets “,”linkTitle”:”Get a Quote”,”id”:”62bdc3f8a48b4″,”impressionCount”:”41889″,”dailyImpressionCount”:”208″,”impressionLimit”:”200000″,”dailyImpressionLimit”:”1627″},{“sponsor”:”MoFin Lending”,”description”:”Direct Hard Money Lender”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/06\/mf-logo@05x.png”,”imageAlt”:””,”title”:”Flip, Rehab & Rental Loans”,”body”:”Fast funding for your next flip, BRRRR, or rental with MoFin! Close quickly, low rates\/fees,\r\nsimple process!”,”linkURL”:”https:\/\/mofinloans.com\/scenario-builder?utm_source=biggerpockets&utm_medium=cpc&utm_campaign=bp_blog_july2022″,”linkTitle”:”Get a Quote-EASILY!”,”id”:”62be4cadcfe65″,”impressionCount”:”46953″,”dailyImpressionCount”:”236″,”impressionLimit”:”100000″,”dailyImpressionLimit”:”3334″},{“sponsor”:”REI Nation”,”description”:”Premier Turnkey Investing”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/07\/REI-Nation-Updated-Logo.png”,”imageAlt”:””,”title”:”Fearful of Today\u2019s Market?”,”body”:”Don\u2019t be! REI Nation is your experienced partner to weather today\u2019s economic conditions and come out on top.”,”linkURL”:”https:\/\/hubs.ly\/Q01gKqxt0 “,”linkTitle”:”Get to know us”,”id”:”62d04e6b05177″,”impressionCount”:”35297″,”dailyImpressionCount”:”241″,”impressionLimit”:”195000″,”dailyImpressionLimit”:”6360″},{“sponsor”:”Zen Business”,”description”:”Start your own real estate business”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/07\/512×512-1-300×300-1.png”,”imageAlt”:””,”title”:”Form Your Real Estate LLC or Fast Business Formation”,”body”:”Form an LLC with us, then run your real estate business on our platform. BiggerPockets members get a discount. “,”linkURL”:”https:\/\/www.zenbusiness.com\/p\/biggerpockets\/?utm_campaign=partner-paid&utm_source=biggerpockets&utm_medium=partner&utm_content=podcast”,”linkTitle”:”Form your LLC now”,”id”:”62e2b26eee2e2″,”impressionCount”:”21161″,”dailyImpressionCount”:”243″,”impressionLimit”:”80000″,”dailyImpressionLimit”:”2581″},{“sponsor”:”Marko Rubel “,”description”:”New Investor Program”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/07\/DisplayAds_Kit_BiggerPockets_MR.png”,”imageAlt”:””,”title”:”Funding Problem\u2014Solved!”,”body”:”Get houses as low as 1% down, below-market interest rates, no bank hassles. Available on county-by-county basis.\r\n”,”linkURL”:”https:\/\/kit.realestatemoney.com\/start-bp\/?utm_medium=blog&utm_source=bigger-pockets&utm_campaign=kit”,”linkTitle”:”Check House Availability”,”id”:”62e32b6ebdfc7″,”impressionCount”:”20493″,”dailyImpressionCount”:”256″,”impressionLimit”:”200000″,”dailyImpressionLimit”:0}])” class=”sm:grid sm:grid-cols-2 sm:gap-8 lg:block”>

2022-08-27 14:00:00

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3 Mistakes to Avoid As An Airbnb Host

15% ROI”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/05\/large_Extra_large_logo-1.jpg”,”imageAlt”:””,”title”:”SFR, MF & New Builds!”,”body”:”Invest in the best markets to maximize Cash Flow, Appreciation & Equity with a team of professional investors!”,”linkURL”:”https:\/\/renttoretirement.com\/”,”linkTitle”:”Contact us to learn more!”,”id”:”60b8f8de7b0c5″,”impressionCount”:”227044″,”dailyImpressionCount”:”457″,”impressionLimit”:”350000″,”dailyImpressionLimit”:”1040″},{“sponsor”:”Azibo”,”description”:”Smart landlords use Azibo”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/11\/Logo-512×512-1.png”,”imageAlt”:””,”title”:”One-stop-shop for landlords”,”body”:”Rent collection, banking, bill pay and access to competitive loans and insurance – all free for landlords.”,”linkURL”:”https:\/\/www.azibo.com\/biggerpockets\/?utm_source=biggerpockets&utm_campaign=biggerpock ets&utm_medium=affiliate&utm_content=blog”,”linkTitle”:”Get started, it\u2019s free”,”id”:”618d372984d4f”,”impressionCount”:”286245″,”dailyImpressionCount”:”301″,”impressionLimit”:”300000″,”dailyImpressionLimit”:0},{“sponsor”:”The Entrust Group”,”description”:”Self-Directed IRAs”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/11\/TEG-Logo-512×512-1.png”,”imageAlt”:””,”title”:”Spring Into investing”,”body”:”Using your retirement funds. Get your step-by-step guide and learn how to use an old 401(k) or existing IRA to invest in real estate.\r\n”,”linkURL”:”https:\/\/www.theentrustgroup.com\/real-estate-ira-report-bp-awareness-lp?utm_campaign=5%20Steps%20to%20Investing%20in%20Real%20Estate%20with%20a%20SDIRA%20Report&utm_source=Bigger_Pockets&utm_medium=April_2022_Blog_Ads”,”linkTitle”:”Get Your Free Download”,”id”:”61952968628d5″,”impressionCount”:”420761″,”dailyImpressionCount”:”279″,”impressionLimit”:”600000″,”dailyImpressionLimit”:0},{“sponsor”:”Guaranteed Rate”,”description”:”One-Stop Mortgage Lender”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/01\/927596_CB_BiggerPockets-January-2022-Assets-512×512-1.png”,”imageAlt”:””,”title”:”$1,440 Mortgage Savings*”,”body”:”Whether you\u2019re buying new or cash-out refinancing to upscale the old \u2013 get started today and we\u2019ll help you save!\r\n\r\n”,”linkURL”:”https:\/\/www.rate.com\/biggerpockets?adtrk=|display|corporatebenefits|biggerpockets|july2022_blog||||||||||&utm_source=corporatebenefits&utm_medium=display&utm_campaign=biggerpockets&utm_content=july2022-blog “,”linkTitle”:”Buy or Cash-Out Refi”,”id”:”61ccd6a886805″,”impressionCount”:”115203″,”dailyImpressionCount”:”313″,”impressionLimit”:”200000″,”dailyImpressionLimit”:”2222″},{“sponsor”:”BAM Capital”,”description”:”Multifamily Syndicator\r\n\r\n”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/02\/Bigger-Pockets-Forum-Ad-Logo-512×512-2.png”,”imageAlt”:””,”title”:”$100M FUND III NOW OPEN”,”body”:”Earn truly passive income with known assets in an award-winning market. Confidently targeting 2.0x-2.5x MOIC.\r\n\r\n\r\n”,”linkURL”:”https:\/\/capital.thebamcompanies.com\/offerings\/?utm_source=bigger-pockets&utm_medium=paid-ad&utm_campaign=bigger-pockets-blog-feb-2022&utm_content=fund-iii-now-open”,”linkTitle”:”Learn more”,”id”:”621d250b8f6bd”,”impressionCount”:”135454″,”dailyImpressionCount”:”229″,”impressionLimit”:”150000″,”dailyImpressionLimit”:”2500″},{“sponsor”:”Walker & Dunlop”,”description”:” Apartment lending. Simplified.”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/03\/WDStacked512.jpg”,”imageAlt”:””,”title”:”Multifamily Property Financing”,”body”:”Are you leaving money on the table? Get the Insider\u0027s Guide.”,”linkURL”:”https:\/\/explore.walkerdunlop.com\/sbl-financing-guide-bp-blog-ad”,”linkTitle”:”Download Now.”,”id”:”6232000fc6ed3″,”impressionCount”:”134183″,”dailyImpressionCount”:”262″,”impressionLimit”:”200000″,”dailyImpressionLimit”:”6500″},{“sponsor”:”SimpliSafe Home Security”,”description”:”Trusted by 4M+ Americans”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/03\/SS-Logo-.png”,”imageAlt”:””,”title”:”Security that saves you $”,”body”:”24\/7 protection against break-ins, floods, and fires. SimpliSafe users may even save up to 15%\r\non home insurance.”,”linkURL”:”https:\/\/simplisafe.com\/pockets?utm_medium=podcast&utm_source=biggerpockets&utm_campa ign=2022_blogpost”,”linkTitle”:”Protect your asset today!”,”id”:”624347af8d01a”,”impressionCount”:”105357″,”dailyImpressionCount”:”251″,”impressionLimit”:”200000″,”dailyImpressionLimit”:”2222″},{“sponsor”:”Delta Build Services, Inc.”,”description”:”New Construction in SWFL!”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/04\/Image-4-14-22-at-11.59-AM.jpg”,”imageAlt”:””,”title”:”Build To Rent”,”body”:”Tired of the Money Pits and aging \u201cturnkey\u201d properties? Invest with confidence, Build To\r\nRent is the way to go!”,”linkURL”:”https:\/\/deltabuildservicesinc.com\/floor-plans-elevations”,”linkTitle”:”Look at our floor plans!”,”id”:”6258570a45e3e”,”impressionCount”:”97286″,”dailyImpressionCount”:”287″,”impressionLimit”:”160000″,”dailyImpressionLimit”:”2163″},{“sponsor”:”RentRedi”,”description”:”Choose The Right Tenant”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/05\/rentredi-logo-512×512-1.png”,”imageAlt”:””,”title”:”Best App for Rentals”,”body”:”Protect your rental property investment. Find & screen tenants: get full credit, criminal, and eviction reports.”,”linkURL”:”http:\/\/www.rentredi.com\/?utm_source=biggerpockets&utm_medium=paid&utm_campaign=BP_Blog.05.02.22&utm_content=button&utm_term=findtenants”,”linkTitle”:”Get Started Today!”,”id”:”62740e9d48a85″,”impressionCount”:”79927″,”dailyImpressionCount”:”176″,”impressionLimit”:”150000″,”dailyImpressionLimit”:”5556″},{“sponsor”:”Guaranteed Rate”,”description”:”One-Stop Mortgage Lender”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/06\/GR-512×512-1.png”,”imageAlt”:””,”title”:”$1,440 Mortgage Savings”,”body”:”Whether you\u2019re buying new or cash-out refinancing to upscale the old \u2013 get started today and we\u2019ll help you save!”,”linkURL”:”https:\/\/www.rate.com\/biggerpockets?adtrk=|display|corporatebenefits|biggerpockets|july2022_blog||||||||||&utm_source=corporatebenefits&utm_medium=display&utm_campaign=biggerpockets&utm_content=july2022-blog%20%20%20″,”linkTitle”:”Buy or Cash-Out Refi”,”id”:”62ba1bfaae3fd”,”impressionCount”:”36670″,”dailyImpressionCount”:”189″,”impressionLimit”:”70000″,”dailyImpressionLimit”:”761″},{“sponsor”:”Avail”,”description”:”#1 Tool for Landlords”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/06\/512×512-Logo.png”,”imageAlt”:””,”title”:”Hassle-Free Landlording”,”body”:”One tool for all your rental management needs — find & screen tenants, sign leases, collect rent, and more.”,”linkURL”:”https:\/\/www.avail.co\/?ref=biggerpockets&source=biggerpockets&utm_medium=blog+forum+ad&utm_campaign=homepage&utm_channel=sponsorship&utm_content=biggerpockets+forum+ad+fy23+1h”,”linkTitle”:”Start for FREE Today”,”id”:”62bc8a7c568d3″,”impressionCount”:”39428″,”dailyImpressionCount”:”208″,”impressionLimit”:”200000″,”dailyImpressionLimit”:”1087″},{“sponsor”:”Steadily”,”description”:”Easy landlord insurance”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/06\/facebook-business-page-picture.png”,”imageAlt”:””,”title”:”Rated 4.8 Out of 5 Stars”,”body”:”Quotes online in minutes. Single-family, fix n\u2019 flips, short-term rentals, and more. Great prices and discounts.”,”linkURL”:”http:\/\/www.steadily.com\/?utm_source=blog&utm_medium=ad&utm_campaign=biggerpockets “,”linkTitle”:”Get a Quote”,”id”:”62bdc3f8a48b4″,”impressionCount”:”41889″,”dailyImpressionCount”:”208″,”impressionLimit”:”200000″,”dailyImpressionLimit”:”1627″},{“sponsor”:”MoFin Lending”,”description”:”Direct Hard Money Lender”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/06\/mf-logo@05x.png”,”imageAlt”:””,”title”:”Flip, Rehab & Rental Loans”,”body”:”Fast funding for your next flip, BRRRR, or rental with MoFin! Close quickly, low rates\/fees,\r\nsimple process!”,”linkURL”:”https:\/\/mofinloans.com\/scenario-builder?utm_source=biggerpockets&utm_medium=cpc&utm_campaign=bp_blog_july2022″,”linkTitle”:”Get a Quote-EASILY!”,”id”:”62be4cadcfe65″,”impressionCount”:”46953″,”dailyImpressionCount”:”236″,”impressionLimit”:”100000″,”dailyImpressionLimit”:”3334″},{“sponsor”:”REI Nation”,”description”:”Premier Turnkey Investing”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/07\/REI-Nation-Updated-Logo.png”,”imageAlt”:””,”title”:”Fearful of Today\u2019s Market?”,”body”:”Don\u2019t be! REI Nation is your experienced partner to weather today\u2019s economic conditions and come out on top.”,”linkURL”:”https:\/\/hubs.ly\/Q01gKqxt0 “,”linkTitle”:”Get to know us”,”id”:”62d04e6b05177″,”impressionCount”:”35297″,”dailyImpressionCount”:”241″,”impressionLimit”:”195000″,”dailyImpressionLimit”:”6360″},{“sponsor”:”Zen Business”,”description”:”Start your own real estate business”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/07\/512×512-1-300×300-1.png”,”imageAlt”:””,”title”:”Form Your Real Estate LLC or Fast Business Formation”,”body”:”Form an LLC with us, then run your real estate business on our platform. BiggerPockets members get a discount. “,”linkURL”:”https:\/\/www.zenbusiness.com\/p\/biggerpockets\/?utm_campaign=partner-paid&utm_source=biggerpockets&utm_medium=partner&utm_content=podcast”,”linkTitle”:”Form your LLC now”,”id”:”62e2b26eee2e2″,”impressionCount”:”21161″,”dailyImpressionCount”:”243″,”impressionLimit”:”80000″,”dailyImpressionLimit”:”2581″},{“sponsor”:”Marko Rubel “,”description”:”New Investor Program”,”imageURL”:”https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/07\/DisplayAds_Kit_BiggerPockets_MR.png”,”imageAlt”:””,”title”:”Funding Problem\u2014Solved!”,”body”:”Get houses as low as 1% down, below-market interest rates, no bank hassles. Available on county-by-county basis.\r\n”,”linkURL”:”https:\/\/kit.realestatemoney.com\/start-bp\/?utm_medium=blog&utm_source=bigger-pockets&utm_campaign=kit”,”linkTitle”:”Check House Availability”,”id”:”62e32b6ebdfc7″,”impressionCount”:”20493″,”dailyImpressionCount”:”256″,”impressionLimit”:”200000″,”dailyImpressionLimit”:0}])” class=”sm:grid sm:grid-cols-2 sm:gap-8 lg:block”>

2022-08-29 18:41:20

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