Join us for a comprehensive journey through the highlights of Season 1 of the Hacking Real Estate Podcast. Tune in as we relive the valuable advice shared by our 24 distinguished guests. From Taylor Brugna's wisdom on investing with patience to Sean Pan's insights on relationship building and J. Scott's pointers on goal setting, this episode is packed with priceless knowledge.
Our conversation also features an in-depth discussion on the strategies for furnishing short and midterm rentals. We emphasize the significance of budgeting, reveal sourcing tips, and explore the importance of cash flow and market targeting. Additionally, you'll hear crucial takeaways from industry leaders like Chastin Miles, Julie Aragon, Alik Levin, and Ian Cameron on topics ranging from building banker relationships to reevaluating old real estate approaches.
Get ready for a lively dialogue on lender interactions, pet-friendly rental challenges, and the intriguing world of HUD property investments. Our chat with Ira Fishman, an expert on HUD properties, is not to be missed as he sheds light on property diversification, HUD payments, and market understanding. Whether you're just beginning your real estate journey or looking for fresh insights, this episode offers a wealth of information for every listener. Tune in now!
1. The podcast provides comprehensive insights into various aspects of real estate investment from experts in the field. These include understanding the long-term perspective required in investing, the importance of building relationships within the industry, and the necessity of having clear goals and priorities.
2. It emphasizes the need for conducting your own due diligence and underwriting while dealing with properties. It also discusses the significance of networking and mentorship in real estate, the importance of having a good property manager, and the advantage of partnerships in opening doors to bigger deals.
3. The podcast also delves into the strategies for furnishing rentals, focusing on the significance of budgeting and sourcing, the power of cash flow over appreciation, and the need to define a target market carefully. Other topics include understanding the challenges of pet-friendly rentals, investing in HUD properties, and the pros and cons of diversification in real estate investment.
0:00:00 - Vikas Gupta
Hi everyone, welcome to this week's episode of the Hacking Real Estate Podcast. As we draw the curtains on our inaugural season, we're pausing to celebrate the knowledge and insights shared by our incredible guests. From emerging innovators to industry veterans, each guest has provided a unique perspective on the ever-evolving landscape of real estate. In this special compilation episode, we're revisiting the key takeaways from each of our 24 distinguished guests. Whether you're just starting your real estate journey or seeking fresh insights, this episode is a distillation of the very best from season one. So sit back, relax and let's relive the highlights of the Hacking Real Estate Podcast's first season.
0:00:47 - Azibo
Episode one, Taylor Brugna. Key takeaway Real estate investing requires a long-term perspective and patience.
0:00:57 - Taylor Brugna
If you're going to invest passively, there is a chance, or actually there's a certainty, that your property manager is not going to do things 100% the way that you want them done. It's not going to be perfect, but the fact that you're getting started and you're getting involved is way better than doing nothing at all. It's not perfect, but being able to do what I've done while spending limited time, while kind of focusing on my full-time career, has just been invaluable and I think, kind of long story short, getting started is way more important than having it perfect from the start.
0:01:36 - Azibo
Episode two, Sean Pan. Key takeaway the value of building and maintaining relationships both within one's own organization and with external partners and customers.
0:01:48 - Sean Pan
I would say when you're first getting started, the most important people to have on your team is going to be your real estate agent and your property manager. So the real estate agent or wholesaler whoever it is is sourcing you the deals. They should also have some local knowledge of pricing your negotiation strategy. Again, when people are buying homes for the very first time, there's a lot that goes into it, like understanding how to read contracts, understanding how to negotiate, understanding the whole escrow process. So there's a lot to consider and I would say for someone who's just getting started, you don't need to go for the super supreme number one deal. Just get a solid base hit. Make sure the numbers are good, so at least you learn a lot through the first process. The other team member that you really need is a property manager. So this person is going to be in charge of managing your property for years and years to come, putting in a tenant, screening it and make sure that it is being rented at market value. So a good I mean a reason why you should have a good property manager is also when you're looking for properties that your agent is selling you, you can just send it to them, say, hey, is this a property that you would manage? Are there concerns for this area? What do you think it will rent for? Because that way you can put the numbers into your spreadsheets and see if it makes sense or not. So those two are the key moments.
And when it comes to silent scene, the way that I also figured it was, at the time I was not a real estate expert, so you could put me in the house and I personally wouldn't know what to look for. You know, like I didn't do any construction work, I have no idea if this electrical box is good or not. So you hire an inspector, aspects and costs 400 to 700 bucks depending on where you're at, and they'll show you hey, here's all the deficiencies with the property. You can either take that and go, you know, buy the property. You can leave, or you can negotiate with the seller, say, hey, your property has all these things wrong. Can you give us a credit back to make these repairs? You know so there's a lot of flexibility there, but me physically going there was not really something that I found super beneficial.
0:03:32 - Azibo
Episode three J, Scott Key takeaway. It's important to have a clear and realistic understanding of your own goals and priorities when deciding which real estate investing shot a G to pursue.
0:03:45 - J. Scott
I am a business guy, I'm not a real estate guy, and a lot of people, when I say that, trying to look at me and laugh because I'm done a lot of real estate transactions. But at the end of the day, I'm not the person that you want on the ground leading your real estate team. I'm not the person you want managing contractors you're swinging a hammer or even leading marketing and sales and all that sort of stuff. I'm the person that you kind of want leading the ship, not the person that you want poisting the sale lack of a better metaphor there. And so what? The way I was able to grow my flipping business from 2008 to 2016, my wife and myself is we were really good at building systems, building processes, hiring people, surrounding ourselves with people that were really good, and kind of treating it like a business not like a real estate business, but like any business and I wasn't involved in the day-to-day. I wasn't involved in managing the contractors again or doing any of the day-to-day stuff, and so it went well for five, six, seven, eight years, but we got to the point where we couldn't handle the scale without creating a lot of issues that would have required me to be kind of in the day-to-day issues. Basically, we were able to scale a good bit without having to put in too much thought-time or effort, and we got to the point where the next level of scale really would have been difficult. And after eight years of flipping houses, I was a little bit burned out and I just wasn't ready for that next challenge. And so I said, hey, I'm going to pull back and I'm going to find something else to do, and for a year or two there I actually thought about going back into tech After we sold all of those flips that we're holding.
While I was trying to figure out what to do next, we ran into a little problem. We had all this cash that came back to us, and for eight years it never really occurred to me that we had all this cash because it was always deployed. And suddenly we had all this cash sitting in the bank and we needed something to do with it, and I couldn't figure out what to do with it. And so I started investing passively in where called syndications, which is basically large real estate deals where you pool passive investors to buy a property. The passive investors have no voting rights, they have no day-to-day decision making. Basically, you turn over your money and you hope to get a big return.
As someone who is kind of a type A personality and doesn't deal well with other people controlling their money, that was hard for me, and so I wasn't really comfortable investing in other people's syndications. But what I realized was that this whole model, this whole syndication model of doing large real estate investments, was something that I think I could really enjoy, and it provided me that additional benefit that while I could be the operator the person that's putting together this indication, the person that's running the deal I also have all these passive investors that are putting money in. I could also be a passive investor in my own deal. So I have basically this vehicle, this passive investment vehicle, where I'm also the person operating the deal, so I don't have to trust somebody else to be doing the right thing and operating the deal well.
0:06:48 - Azibo
Episode 4, Nick Giulioni. Key takeaway being connected with more people for more deals will progress you and your investing career more than you'd expect.
0:06:59 - Nick Giulioni
Be around the football, even if you don't know how you're going to get involved, even if you don't think there's anything that'll benefit you. The number of times where I've just had a conversation with somebody or I've tried to help somebody get a deal over the finish line and I somehow have gotten involved in this deal, somehow ended up with a 2.67% interest rate on a wedding venue just by being around the football, it's probably been five times in my career that have helped me gain millions of dollars worth of equity in that time. So be around the football. Don't always look for how you're going to get paid in a deal. Just be there and see what happens. You're going to be shocked at the outcomes.
0:07:34 - Azibo
Episode 5, Sarah Weaver Key takeaway when it comes to furnishing short and midterm rentals, it's important to have a budget and stick to it.
0:07:44 - Brandon Hall
What are some furnishing tips that you could share with our audience?
0:07:49 - Sarah Weaver
Yeah, the first and foremost is don't break the budget. Like, don't be like, oh, my wife is really good at furnishing. Well, yeah, she's probably also really good at spending money, and that's no dig on anyone, especially any wives, but that's just. You have to have the mindset and the discipline as an investor. And so, even though, like that let's call it, I don't know, that coffee table is so cute. If it's $75 more than the other coffee table, is that a good investment? As long as the other coffee table isn't like an IKEA POS, then, yes, go with something that's cheaper. So you have to know where to spend your money. So that brings me to my next tip Buy great pieces of art. So whether you like this piece or not, I don't really care, but my guests tend to really like this, and so I buy, like unique pieces of art. And then they're not that unique because you guys are buying them at home or hobby lobby. So they're not that are not anything fancy, they're just unique, right. And so know where to spend your money. Throw pillows are going to be what I call seasonal, meaning you're going to get a few seasons of tenants and then you're going to throw them away. So don't break the bank on them and still buy them like they are, and they make your unit look really nice.
Coffee table books coffee table books. Coffee table books. You can buy them on eBay. You can buy them at half price bookstore. They make a huge difference. Anything that like can create texture and different levels. That makes a huge difference. Blackout curtains in the bedroom are an absolute must. I buy my net target because when the dog eats them and my nurse goes in, she can just run over to target and buy the exact same panel, whereas unfortunately, if we buy them on Amazon then we have to replace all of the curtains in the room because they don't match. So I buy those from Target. Any other questions about furniture? I can talk about furniture all day.
0:09:41 - Azibo
Episode six Chris Hsu Key takeaway A real estate investor should focus on cash flow rather than betting on appreciation in uncertain market conditions.
0:09:54 - Chris Hsu
Is it a stable market Like? The thing about the coast is you knew when I bought these several years ago, you knew the coast real estate markets were going to get crushed. I don't know. It would be a rocket science to look at a chart that goes like this and then at some point in time, it goes like this, and so I just didn't want to touch that, because one of the things I've learned over the years is if you bet on appreciation, you're toast.
If you're a real estate investor, you're betting on appreciation, you're toast. Now you can make money on the way up, but the problem with real estate is when you're a long real estate and it goes down 30%, you're a lover. That could be ugly. I do think real estate markets are pretty resilient over a long period of time. If you have the ability to cash flow and hold an asset for 10 years, you can make a lot of money on it, even through the downturns, and so I never count on appreciation. It doesn't even exist in my models, so I just focus on cash flow. And that's a tricky thing too, because a lot of assets you can't touch because the prize assets are not going to have great cap rates on them.
0:11:00 - Azibo
Episode 7 Zane Harris. Key takeaway Define the target market carefully, taking into account their interest, age group and lifestyle.
0:11:12 - Zane Harris
I took a step back and said what if I took the approach that I take at work to making my next decision on investment here? And so that's what I did, I like. I sat down, I defined my target market. I said who are these people, what's their persona, what do they care about, where they want to live, what will they pay? All of it Like traditional, just user research, old school. And so, as I was trying to define, you know how can I get rid of all the things that I don't like about this condo? You know some of what I just talked about dealing with an HOA that got marked off. I said I'm not doing that anymore.
But other things I said to myself what is a target market that isn't going to turn over frequently? And so today, for instance, I target pretty young families. Typically they'll have a child and a three, two or three. Three really meets their needs. They care a lot about school districts. It's like very, very important to them and they're willing to pay more for it, which I found out while doing some research just asking friends and family kind of fit in this segment. They really care about the school districts. Other things like crime ratings important to them. Access to a highway and like commute routes is another one. So I'm targeting that group because they turn over very frequently. But also many of them it's these are their own words they're three or four years from buying their own home. So I find that they treat the properties very well. They keep them clean. They want it to appear as if it is their home. They're probably not mentioning that they're renting to some friends and family, so that's very ideal for me, and so I'm targeting those people.
But then, when it comes to the actual property, there were also some things that I do a little bit differently. So the age of the condo and things like that definitely taught me that you want the internals to not have a lot of issues if you want to keep your op-ex low, and so whenever I'm looking at purchasing a home, one of the things I'm betting is the age of. I have a spreadsheet of all the internals that could be in a home and the average lifespan from some research I've done, and then the actual age of it. Whenever I'm looking at a home, I calculate the difference and I try to basically forecast what my operating expense might end up being for that home, based on the age of all the internals. And I'm looking for very low op-ex homes, typically built after like 1985, stuff that just reliable builds, reliable materials.
I just don't want to see a lot of things breaking down, because that combo of tenants who don't turn over and often don't complain, with homes that don't break down equals no work for me. So, and that's what, that's what we're shooting for. So that was really that's what the process looked like, is like how can I minimize all the effort that I'm putting into this one property and not have to go through those things again? And and try to really make sure I was paying attention to what the the people who would be moving in would want and ultimately, what they pay for them.
0:13:45 - Azibo
Episode 8 Chris and Ashton Levarek. Key takeaway having a clear end goal in mind is important when investing in real estate.
0:13:55 - Christ and Ashton Levarek
For us. We knew we wanted to build a business, and so it was important to have that foundation strong from the start. So not every that doesn't apply to everyone, but if you want the business, build the foundation. Yeah, you know, that kind of goes back to just knowing what you want, like what you want out of life, what you want out of that, where you're going. Are you just buying a rental or are you trying to create multiple streams of income that create tax free wealth, that create generational wealth that will be protected over years, over years? So how do you do that? You don't just buy it. There's got to be a lot of stuff that goes into it. So I think having that end goal in mind is very important. We knew that we wanted, we wanted $10,000 X. We want $10,000 a month from passive income. That was our goal. All right, how do we do that? We backwards plan from that and how do we protect ourselves and protect our investors? And so, yeah, having that end goal in mind and planning backwards is very crucial, like Chris said.
0:14:49 - Azibo
Episode nine Gino Barboro Key takeaway the importance of having the right mindset when pursuing financial freedom.
0:14:59 - Gino Barboro
And you know that one night I was out at the restaurant. It was a Friday night, I'll never forget it. It's snowing in New York. I got about eight inches of snow, no one's around. I'm in the parking lot, thrown salt and we own the building. My mom owned the building and she had three apartments upstairs and I see one of the lights on in the bathroom in the apartment and I'm like, huh, I'm a sucker out here not getting paid. Again this Friday this week I'm not getting paid because of the snow. Meanwhile my mom's collecting rent from those three apartments up there. She's getting paid every single month and that really stuck to me. I'm like I'm just not in the right business. I'm actually she's home, sleeping, getting paid, and I'm out here freeze my ass off, throw in salt in the driveway and I'm not getting paid. I'm doing something wrong. So for me that was just a light bulb moment.
I said I need to start investing and I know everyone says, oh, you know, millionaires are made by real estate. But I didn't understand the business potential of real estate. I think we all go into it thinking, hey, we're going to buy a few assets, we're going to, you know, become landlords. But at Jake and Gino we say we create multifamily entrepreneurs. You get into multifamily specifically because you want to scale up, to be able to hire property managers, to be able to hire maintenance techs. You need to start out as the IMA guy. Jake and I were the ultimate IMA guys.
I'm going to do this, I'm going to do that. I'm going to do whatever I need to do to get 100 units. But once you get to that 100 units, it's like, well, I need to grow out of that person. I need to start hiring. I think that's in any business In the beginning. We all need the bootstrap In the beginning really learn the processes and the systems and then start building them. But once you're at that point where you need to start growing, I think you need to get rid of the ego and say there's people out there that can do it at least as good as me, probably better. How do I get those people on the team?
0:16:37 - Azibo
Episode 10, Steve Trang. Key takeaway Don't rely on a wholesalers estimate of a property's value. Always do your own due diligence and underwrite the deal yourself.
0:16:49 - Steve Thrang
I wouldn't say it's necessarily a common mistakes, but it's a glaring mistake when I see it happen and it's believing the wholesaler when they tell you what the house is worth. So I say, hey, brandon, I've got this property. It's worth $300,000. It's $200,000 to you. Are you interested? You better underwrite that deal yourself.
Do not rely on a sales person's perspective. Their job is to maximize revenue. So recognize you're dealing with a person whose goal is to get as much money revenue from you as possible. And I've got no qualms about it. I'm a capitalist through and through. So for your side, in working with a wholesaler, it's caveat mentor. Buyer, beware Do your research, verify that those numbers make sense, because if the numbers don't make sense to you, don't jump on it just because you feel like you have to. And, by the way, urgency is something we're also really good at as well. So don't feel like you have to jump on it because, like, if you don't take it now, I got five of the buyers lined up. Don't commit to multiple six-figure decisions on a gut feeling. That's what I would say Caveat, mentor.
0:18:04 - Azibo
Episode 11, Zoe Fox. Key takeaway Don't be afraid to become a landlord.
0:18:11 - Zoe Fox
Don't be afraid. Like I said, a meteor could fall out of the sky at any time, but still get up every day and do your best. But yeah, don't be afraid to get into landlording, because I think there's a huge misconception that landlords are evil and sucking the blood out of the world. No some people are providing a nice livable space to people until they can go on and hopefully become homeowners themselves. So don't be afraid to go out and be a good landlord.
0:18:39 - Azibo
Episode 12, chastin Miles key takeaway Relationships with bankers, mortgage lenders and hard money lenders can be essential for obtaining funding and navigating potential challenges.
0:18:53 - Chastin Miles
I feel like the biggest asset and what's helped me the most is those relationships with people. So those relationships with a banker, those relationships with a mortgage lender, those relationships with heck, even hard money lenders like you never know when you're going to need some money Building business credit, having a relationship manager at American Express like those relationships, I feel like, saved me out of a few situations because I was able just to make a call, even though on paper I may have looked like I was deep in to something that I shouldn't have been. But those relationships really saved me because you know they were able to come through when I needed them.
0:19:42 - Azibo
Episode 13, Taylor Hou Key takeaway Choosing the right property manager for your investment can be challenging, but it's important to find one that is knowledgeable and experienced in real estate.
0:19:54 - Taylor Hou
If I was an owner and I was evaluating a property manager, one of the first questions I'd be asking is when do you send distributions? All right, and there's not technically a real answer here or a right answer. It's more so how they respond. I'll give you an example of how they could respond. One could say oh, we're going to send you a distribution on the 10th, no matter what. I would say there's a red flag there if they say that. Another one, which realistically, is probably the most realistic answer, is we actually have no control over when we send distributions. Right, we're kind of beholden to when rent is paid. So once rent is paid and it's finally cleared our bank, then we try our best to not hold on to your money. We're going to send a distribution as quickly as we can.
0:20:41 - Azibo
Episode 14, Julie Aragon Key takeaway Real estate investing strategies and evaluation.
0:20:50 - Julie Aragon
So I love FHA financing, especially if your plan is to become a real estate investor and house hack and keep this property long term. I love buying FHA 3.5% down on a duplex. Now I know in some areas you can do three and four unit if it passes a certain test, but in our area really it's like duplex and FHA is a great product because they're a little less judgy on the lower FICO scores. So if you are coming off of a past event like a bankruptcy or foreclosure, you can get back into the market much sooner on an FHA loan versus a conventional loan. So then the 3.5% just makes it a lot easier. 3.5% down.
0:21:33 - Azibo
Episode 15, alik Levin Key takeaway Unlearn outdated approaches and embrace contrarian views for success in real estate investing. Thank, you.
0:21:43 - Alik Levin
I think one of the things I like to repeat this day is unlearn. Unlearn and learn and make room for seemingly new and contrarian views and approaches, paraphrasing Mark Twain. he has this complex quote, but paraphrasing it it's, you normally get in trouble, not? because you don't know something, it's because of what you know, but it's actually false, false, right. So knowing all those false or fake things, is my advice? to unlearn and make room for new and contrarian things and learn them.
0:22:23 - Azibo
Episode 17, Ian Cameron Key takeaway Establishing partnerships in real estate can be a lucrative step, opening doors to bigger deals.
0:22:34 - Ian Cameron
When I first kind of started, I definitely wouldn't use the term wealth preservation. I was in my early 20s. There wasn't much wealth to preserve, but I would say that it was. You know, hey, how can I invest in something that isn't the S&P 500? It took my mom to really get me to do my first deal.
But as I was doing number two and number three, I think what I appreciated from seeing the first one was, I think the thing that really attracted me from continuing to go down the real estate route even though it wasn't what I was doing full time was just kind of the power of leverage.
And so I saw kind of what the returns looked like in real estate and I saw that, you know it was really easy, and especially at the time, you know the financing was really really easy, and so I saw it as a safe way to lever.
And so it's you know, somebody in their 20s who's starting without a ton of wealth that leverage really matters. So I think that's kind of how I first viewed it. And then, because getting to your question of you know, starting solo, moving to a partner, I would first push back and say that I, nor anybody, is truly solo, and so for me, it was an important partner my mom on the ground, who was managing the properties, and so, yes, financially I was the 100% owner of everything. But having somebody that I trusted on the ground to not only was she finding the deals, but then she was managing them, that's important and that's something that every real estate investor needs to find. I was lucky that my mom was able to do that and serve many different roles, but every single real estate investor, especially somebody who's investing remotely needs to find deal flow, needs to find somebody to manage the properties, and so that's a partnership that's just as important as a financial partnership.
0:24:14 - Azibo
Episode 18, Gorden Lopes key takeaway leveraging real estate investing like remote property management.
0:24:22 - Gordon Lopes
Things become easy when you trust. You build that trust right. So I gradually increased my properties to my property manager and it gives you a leverage of negotiation right. So normally there's a 10% property management chart, but with that many properties you can easily get it down to like six or seven percent you can trust but you need to verify. So there's like a monthly statements that comes in right and there's also I need to make sure that anything about $300 or $400 in expense right Is raised immediately so that there are no surprises between. So communication for long distance investing right. Trust and communication are like the two important piece of the puzzle and those are my non negotiating terms with any of my property manager. Like you have. Like, if I text you, I need a response immediately or within, say, within a day, right, like that's that's the expectation that I set. But things become easy once you have the trust already established.
0:25:21 - Azibo
Episode 19,. John Tripolsky Key takeaway the importance of networking and mentorship in real estate.
0:25:29 - John Tripolsky
I mean find good mentors. I mean really really find people that are in your circle. You don't have to agree with everybody all the time. It's actually better that you don't see different points of view, right? I mean you think about business partners, networking groups, conferences, an array of stuff that's out there. Just find people and not saying latch onto them like a, like a leech, and just try to take everything you can. It's, it's incredible.
I was actually talking to Chris Bakura, who who founded teaching tax flow and the monthly recurring revenue Institute, which we can go into detail at a later time if you wish. But I mean I've known Chris for 20, 22, 23 years where he was just getting into his private practice, where I couldn't even tell you how many times and he's 10 years old, as a student and he's 10 years older than me. Just the advice that I've gotten from him, you know, as a friend, over all these years just getting into business things not to do, what to do. I mean obviously I've been skewed on the tax side because I've always had a really great tax guy, you know CPA and a private practice, you know, on my side. But just hearing that advice and then again kind of going to these conferences and finding people that you can learn from.
And then, when you're on the other side of the fence, once you are more successful, think about the opportunities that you can help others to not just moving on and, you know, throwing your hands up and say, yes, I won Teach, have the opportunity to teach to people. I still love going around to universities. I for about two years, I traveled around the country from Villanova, ucla, penn State, western Carolina, just talking to classes and half the time it was on my own dime and my own time just to do it. But I always feel like I learned something from all these students, not just, you know, telling them what to do or how to succeed. It's a two way street, to be honest.
0:27:16 - Azibo
Episode 20, Andrew Postell. Key takeaway the importance of asking the right questions when dealing with lenders.
0:27:25 - Andrew Postell
All of them had a very different perspective about investment properties, which is why we preach work with a local lender. You want to be flexible. You can certainly find lenders that are very good for us, but sometimes it's hard to find them, and it was hard for me to find them too, as somebody who was a loan officer. I didn't even know what questions to ask, but now I do so. It took me a little bit, but I'm okay. Now here's the three biggest questions. I want you to ask any lender that you choose to work with.
If you're a buy and hold real estate investor, if you're flipper, it's really easy. There's lots of different short term money challenges or money outlets out there. But if you're a long term person, you've got a lot of different, challenging perspectives from lenders. So number one seasonings. Do you have seasoning? And the answer should be no. There should be no seasoning on any loans that you get. All right, I mean you can do what you want. If they say three months, sorry, maybe it takes me a month to rehab the property and you really like that person, okay, good, fine, but if it's six months or a year, you cannot work with that lender. There's too many other lenders, that'll be more flexible.
0:28:31 - Brandon Hall
So seasoning is number one, and for people that are listening that maybe don't know what that means. What, what is seasoning?
0:28:37 - Andrew Postell
Hmm, seasoning is time. So sometimes seasoning is described in how much has your bank account been seasoned for? So just time. But for this purpose we're talking about how long have you been on title, how long have you owned the home. So if I'm doing a rehab project and I want to get out of that short-term high-interest money that I used which was good but I want to refinance, I don't want to be in that high interest rate for very long at all. I want to refinance right away. If your bank says, hey, one day of seasoning? Okay, one day sounds cool, but his shortest amount of time that I can be, that limits my costs and makes me more effective. That's what seasoning is and that's what we want to avoid it.
The second question I would tell you to ask when do you start using rental income? None of this, it's got to be on my tax returns. None of this, they've got to be in there. For you know you got to have two months of collected rent. No, no, signed lease or less, like the tenant should not even have to move in. So I need you to use my rental income Immediately to help me qualify. That's a requirement, especially if I'm doing the Burr method.
Remember, this is buying hold right by an old. And then the third thing I want you to ask this is a good test what's your loan minimum? If your lender says we don't have one, then you're in a great place. There's several other questions you can ask me there's almost endless but if you can ask those three, that'll show you that you're working with a very flexible lender, at least you're in the right place. Always, though, brandon, I would tell anybody To get a referral from another investor in your market. That to me it's not foolproof, but it certainly helps me find those lenders that might be flexible, and then just ask those same three questions to that lender
0:30:33 - Azibo
Episode 21, Sean O'Dowd. Key takeaway the importance of location in real estate investment.
0:30:38 - Sean O’Dowd
There's a, there's a noise component, so there's actually. It's called how loud. It's a Software that basically says how loud is each individual home for a variety of different noise factors. It's got to be quiet. Basically means no, no airplanes going over, coming into landing, no big roads.
There's a negative, negative view from a. From a location to a prison or jail. It can't be within within five miles of any of any kind of temporary. There has to be the Costco within five miles. They would like a Starbucks within one mile and then School score anything below a five. Is it just a non-starter for them? That's pretty all they're fine. It was a three.
That's not gonna be an issue for us because it's it's 10 across the board. Got a, we've got a whole bunch of them. Minimum square footage, minimum year I mean I've got our whole underwriting sheet is actually right here. Yeah, that's most of them right there. The ones that we just just ran through. Some were non-starter HOA's. Some do allow HOA's with very specific covenants. The whole HOA thing is it's a whole can of worms right there. No redistricting, especially if our school district is based on the thesis of school district base. There can't have been a redistrict in the past 10 years because then you'd be a written be a Redistrict. Risk related to that is no school choice. Also would be would be negative against the pieces as well episode 22 Andrew and Kamala winter.
0:32:03 - Azibo
episode 22 Andrew and camala winter. Key takeaway the power of adaptability.
0:32:07 - Andrew and Camala Winter
I mean, what is nice, though, too, about our properties that kind of dissociates as well, is that we Really kind of a focused on being a home right, and I know that that's difficult to do, but these were our homes, so we put that kind of effort in to do the small touches that really matter, whereas, like when I go to an Airbnb, usually the walls are white and there's like one or two photos you can tell they grab from Walmart. It's even more funny when you go into some houses and you can see all the sheets are the exact same, because I feel like there's like a bulk Airbnb store somewhere that somebody buys the same sheets. So our homes are really unique in the fact that we do kind of put in those custom touches that you can tell we did. What's the energy into it?
0:32:47 - Andrew and Camala Winter
Yeah, as far as being pet friendly, some of the challenges that we've had is People don't think to change air filters, for example, so those can get really backed up with pet hair we have you know forgot about the husky.
We've had a lot of fun situations where we've had a dog completely Scratch down all of the paint off of the door and like you just have to get a completely new door. And I've had I think I've had a lizard and people have asked me if they can bring their bunnies, and I've had a couple canaries and I'm like Wouldn't be my sort of pet. But you know, power to you and ultimately, how I think we were able to combat that is we have a really high price point Just to filter out some of those people who may not take care of your home. But another way that we structured our Payments was that we didn't necessarily charge a high pet fee and we really reduced that and that was really attractive To a lot of people have not seen that massive like $500 pet fee, but rather that that fee was really just bundled into the, the total fee, and the pet fee was like 50 bucks or something. So I think that really helped weed out some of the so lesser quality tenants that you want to avoid.
0:34:06 - Andrew and Camala Winter
Yeah, and I guess, touching on the the dog friendliness piece, there is a weird weird like addendum to this with Florida specifically, and that they actually have, and it's weird I think there's actually something on the ballot for for a Policy that they have discriminatory, breed specific Restrictions so you can have you can't even have a German shepherd, but you can't have a.
I think you get a lot of a chihuahua and I think that they're more aggressive but obviously the damage will be less. And I've had, like I've been around three different pit bulls that I Would have no problem hanging out with, but they're on the restricted list. So you have to be very careful about your selection process for dogs and you have to like kind of ask in pride for information Because if something does happen, you as the homeowner which unfortunately is a part of cams bad story are responsible ultimately for Damages that could ensue from it. So we've looked at like rider policies even, but even rider policies on top of our homeowners insurance Don't necessarily cover specific breeds. So how do you account for that? And there really isn't a good answer yet, other than, like I've had friends that have to go the route of doing a service animal Because they're not allowed to have a specific dog in apartment complex unless you get it certified as a service
0:35:22 - Azibo
episode 23 Taylor Loht. Key takeaway Importance of small steps
0:36- Taylor loht
Can get a lot done by Taking little bitty baby steps every single day, and those baby steps can be 10 minutes a day.
I have, for example, a few Blog posts that I've written on my website that are Number one ranks on very important keywords in Google searches. Now I wanted to get there, I wanted to have that result, but I didn't know how to get there. And the way I got there is I wear a Fitbit, I set a timer for 10 minutes and I would write for 10 minutes and then, when it's over, I can walk away, maybe wait another 10 minutes, go back, or maybe I'll go back tomorrow and continue working on it. But without putting those little bitty 10 minute chunks in, I wouldn't have achieved that particular goal that was so important to me and that just one mechanic of setting a 10 minute timer and working on it for 10 minutes.
It does so many things. It gets you those baby steps, gets you working on it, but it also gets you started oftentimes working on a big goal that we have. We don't do it because we just can't quite get ourselves started that one day and start working on it, but once we get started, we get so much done. So those little bitty baby steps, done consistently, can really make a big difference in your life and in your investments. And if you can find a Way, a method that works for you, that gets you to take those baby steps my method might not work for you, that's okay. Find one that works for you that can get you working on your goal every single day You'll be surprised what you can get done.
0:37:00 - Azibo
Episode 24, Ira Fishman Key takeaway Advantage of investing in HUD properties.
0:37:08 - Ira Fishman
I actually two other partners. They were venturing into a HUD property in Illinois, kind of in the western part of the state. They knew my background. They knew I was interested. I wanted to get back into real estate my buddy and I have talked about for many years. Opportunity presented itself. I was going to be the one who was going to oversee the property, do the asset management etc. I was comfortable with it.
We bought a property that was 76 units. 19 or 20 were empty. It was just being run super poorly. I didn't know a whole lot about running properties but just using some common sense and some strategies I've used for my other businesses, it was full within four months. It was just a matter of getting the right people, all the right contractors, the right situation. We got filled up very quickly. We got the occupancy where it should be. It was being run. The operational efficiencies were not very efficient. We cleaned up some of that. It's working out well.
It's a family property. There's properties that are family. There's some that are for seniors and others for disabilities. Those are the main couple. I'm personally involved with both family and the disability properties. Those are the ones that I've resonated with. Not opposed to senior, my partner is actually having some seniors before I got involved with them. I certainly would welcome that. It was my first property that I did get involved with HUD properties. Life circumstances also moved me that direction. My oldest son was born with some special needs. He's got some cognitive challenges. I have a soft spot. My kids are my world. There's people out there. There's situations out there where people just need some extra help. Those are areas that I focus on. That's part of my why.
I guess the advantages, I would say, are you get paid by HUD. Usually on the second or third of the month you get an ACH that comes into your account that could account for. It's kind of a sliding scale of how much the residents make versus what HUD pays for. They have to qualify both financially and have a background check. You've got to pass both of those. Basically, if you make too much money when you first move in, they won't allow it.
You could make under the threshold when you first move in. If you get a job and it's above that, you could still live there but you would be paying the full boat Once you're in. You could do that. Hud would participate zero. We have other people who make under a certain threshold and we call them zero renters, where HUD pays 100%, it's sort of a sliding scale of how much is being paid. I'd say 70% is probably a decent amount of what HUD pays and the residents pay the other 30%. That's an advantage during COVID. As long as the government wasn't going out of business anytime soon, we were getting paid.
0:40:16 - Azibo
Episode 25. Are you Ari Rubin- Key takeaway? Diversification doesn't always equate to lesser risk. Do you want to give you a common myth in the investment landscape?
0:40:29 - Ari Rubin
The idea is diversification is a way to lower your risk. If you put all your eggs in one basket, you have more risk. If you buy a diversified index of stocks or bonds or process classes, it's a freeway as opposed to buying insurance. I'll say that's actually not true because it's not free, because if you live in Denver and you're just trying to buy invest, it's actually quite hard. There's a lot of really cool platforms out there that can help you buy trunkey properties. Or maybe it's definitely not free if you live in Denver to go to a new market and invest. I think diversification is integral to any investment strategy, but it's oftentimes hard to do that If you're going to start with one. Unless you have scale, it's hard to diversify. Again, there's a lot of platforms out there that helps you invest in a lot of different syndications or specific properties, but there's a lot of fees associated with that. When I approach this problem again, we were focusing on folks who had owned for a long time, Rather than saying to a young aspiring investor you should diversify. By the way, I don't even know if that's true. Again, if you are hoots on the ground, you know the Des Moines market or the Denver market better than anyone. Maybe you shouldn't diversify and buy halfway across the country and pay the fees associated with you.
We focused on the older retiring landlords and I approached it this I think most folks would agree with which is like okay, you've built up 20 million of equity into this one neighborhood in Denver which has gone up so much in value because you just happen to be in this fantastic place in Denver. Contrast that with Chicago, which is where I grew up and where my parents own a rental property and everyone I know owns rental properties there, and they've had a very, very different fate. And so I think we can all agree in hindsight it would have been smart if you lived in Chicago to diversify. In hindsight it was a good like bat or it was a good play to be concentrated in Denver because you far outperformed.
But no one knows and this goes back to no one knows what the next 10 years, five years or even two years are going to look like right, even go back to like pre-COVID, or even like right when COVID hit and you saw what happened in certain markets and how you're seeing what's happening today. And so, going back to this notion of diversification, I think we can all agree at a certain point in your I think we all agree it is good at investing In real estate investing. There's a certain point in your career where it may make sense to take advantage of. Again, it's hard to do. Furthermore, I think moving forward like and I think this is what I tried to bring to folks is, you know, diverse. It's a sound way to own for the long term.
0:43:24 - Azibo
That's it for Season 1. Thank you to our awesome guests and stay tuned for Season 2.
You'll be the first to know when our first episode drops!