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When Does Your Company’s Website Need A ‘Coming Soon’ Page?

When Does Your Company’s Website Need A ‘Coming Soon’ Page?


By Daman Jeet, co-founder of FunnelKit, a suite of sales tools that helps over 18,000+ businesses streamline their checkout process.

Are you wondering if your business could benefit from a “coming soon” page? If so, you’re likely not alone.

This marketing tool can make it easy to educate your audience, grow your lead list and connect with people who might find value in your product or service.

As the name implies, a coming soon page gives users a teaser of things you and your team are working on. If someone is genuinely interested in a new product or service, they can subscribe via your sign-up form so they can stay up to date.

Through my company’s work providing sales tools to e-commerce businesses, I’ve found that the mistake many marketers make is assuming they don’t need a coming soon page once their site is live. The truth is, this type of landing page can be helpful regardless of your industry or how long you’ve been in business.

Below are four situations when a coming soon page can help your business.

1. You’re launching a brand new website.

The most common instance when a coming soon page would come in handy is when you’re launching a brand new website. I’ve seen that many business leaders create a standalone landing page while they prepare the rest of their site for the public.

Use this opportunity to invite visitors to join your email list so they can receive updates along the way. You can even incentivize users further by giving early subscribers an exclusive coupon on launch day.

When developing a coming soon page in this situation, it’s important to give visitors enough information to care about your website. Avoid generalized statements, and instead focus on addressing your target audience’s goals, pain points and needs.

2. You’re expanding your product catalog.

You can also use a coming soon page to promote a new product or service.

For example, let’s say you’re the owner of an email marketing software-as-a-service solution, but, recently, you chose to dive in and tackle social media marketing. You decide you want to keep your first site email-specific, so you create a new brand and website for your social media marketing software. Instead of hoping visitors will stumble across your site, you can add a coming soon page so existing visitors will know your new product is in the works.

The key to maximizing early conversions with this strategy is to give users time to sign up and anticipate your product. A coming soon page that’s only up for a week won’t get much traction. Meanwhile, people will completely forget about your brand if you leave a coming soon page up for six months.

As a general rule of thumb, I suggest promoting your landing page for one to three months before launch.

3. You’re in the process of rebranding.

Rebranding is the process of changing details about your company, such as the logo, products or color scheme. There are plenty of reasons why a company might want to rebrand. Common causes include the following:

• Modernizing the company to meet today’s socioeconomic standards

• Separating the company from a sea of competitors

• Expanding market reach (similar to creating a new product)

• Creating distance between negative associations

Some rebrands don’t change much, such as Apple dropping the word “computers” from its name in 2007. But other rebrands are a bit more drastic. Consider Starbucks, for instance, which dropped its entire name from its logo and stuck with the iconic siren.

Regardless of the size of your company, you shouldn’t change from one brand to the next overnight. Consider creating a coming soon page to connect with users and let them know what changes are coming in the future. Keeping your audience informed will prevent them from panicking when they see a shiny new logo on your site the next time they visit.

4. You’re building interest in other marketing platforms.

Finally, coming soon pages can help you build interest around other marketing platforms. For instance, if you’re a new business owner and setting up your email list for the first time, you should create a coming soon page so users know what’s in store for them if they sign up.

You can use this strategy for growing social media channels, too. Let’s say you want to start a group on LinkedIn, but you want to build a community around the idea first. Including a landing page that explains what you hope to achieve with a community can help your message resonate with users.

Some business owners use this strategy to promote upcoming partnerships. Coming soon pages are extremely beneficial in this context because it links your company to another reputable brand, which acts as social proof.

Back To You

As you can see, there are plenty of instances when a coming soon page can assist business leaders and marketers. The most important thing to remember is these pages are designed to appeal to your audience. Whether you’re rebranding, offering a new product or starting a new website, users want to know how interacting with your brand will help them reach their goals, and a coming soon page can help.



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Q2 2023 Housing Market Update: Homebuying Could Get Harder

Q2 2023 Housing Market Update: Homebuying Could Get Harder


Homebuyers are gearing up for a hot summer housing market as demand starts to surge. At the beginning of 2023, nobody thought it possible that we’d be in the position we’re in today. Days on market have shrunk in some areas as listing attendance explodes and buyers’ home-owning dreams resurface. But it’s not all sunshine and rainbows in the world of real estate; something bleak is on the horizon for large-scale investors.

We’re halfway through Q2 of 2023, and the real estate market is changing fast month by month. Multifamily buyers are sitting on the sidelines, foaming at the mouth to dig in on deals that will soon be dead, but primary residence shoppers are facing another challenge. With a lack of inventory and mortgage rates on the verge of falling again, the buyers who were kicked out of the market last year are hungry to get back in the game.

Don’t know whether now is the right time to buy your next rental property? Kathy and James give up-to-date advice on what they’re pursuing in today’s market and whether or not now is the time to get aggressive. If you want to get the data these (and many other) experts use to make their investment decisions, check out Dave’s newest Q2 housing market report!

Dave:
Hey, everyone. Welcome to On the Market. Today, you have me, Dave Meyer, Kathy Fettke, and James Dainard. Kathy and James, how are you?

Kathy:
Great.

James:
Good. The sun’s back out in California.

Dave:
Yeah, you were over in my neck of the woods in Northern Europe for a while, and you saw how bad the weather is here.

James:
That weather’s emotional out there. It was like it would rain for two hours and then it’d be sunny and then it’d be raining for two hours. It was almost like a tropical storm in Seattle collided together.

Dave:
Yeah, it’s very unpredictable, it’s very gray, but once it turns this time of year, it starts to get better. I think you just got the tail end of it, but unfortunately, it’s not like where you both live and sunny and glorious all the time.

Kathy:
It’s been cold, but we were supposed to be in Amsterdam right now. We at least had talked about it, so what’s the weather like? Would we have enjoyed it?

Dave:
Yeah, it’s super nice out right now. Actually, as your daughter knows, I just had lunch with Kathy’s daughter who is here visiting, which was super fun to see her, but yeah, it would’ve worked out great. I think we’re going to have to do that next year for our two-year On the Market anniversary. We’re going to have to do an Amsterdam trip.

Kathy:
Yes.

Dave:
Maybe we’ll do a meetup.

James:
Oh, a European takeover?

Dave:
Everyone listening, everyone come to Amsterdam. We’re going to do a European party and Amsterdam’s a good place to party. We’ll have a good time.

Kathy:
That sounds like a great party.

James:
Can we do it on Yacht Week though?

Dave:
Oh, we got to go to Croatia for Yacht Week. That’s where you want to be, so let’s do that next summer. All right. Well, we are here to talk about real estate and we have a really cool show for you today. We’re going to do a roundup on the housing market and some of the economic indicators that we are watching and that you can be watching to make sense of the very confusing market that we’re in. And honestly, a pretty changing, rapidly changing market right now, even faster than normal. And just so you all know, we’re going to be talking about a report I wrote, and if you want to follow along, download it, read it, get my full thoughts about what happened in the housing market in the first quarter of 2023, you can download that for free. It’s at biggerpockets.com/q2report, it’s Q2, like quarter two, report. So go check that out and you can see everything that James, Kathy and I are going to be talking about today. We are going to take a quick break, but then we’re going to dive into our Q1 roundup of the housing market.

Dave:
All right, let’s get into this thing. There’s so many things to talk about, and I know we talk about some of these things a lot, but if you, Kathy, had to pick one indicator that you think summarizes or epitomizes the Q1 housing market, what would it be?

Kathy:
Ooh, one indicator. If we’re talking about housing in general, I’ll pick multifamily housing and say that the indicator that I’ve seen, because I just got back from a couple of conferences, it’s interest rates again, I mean, what a boring thing to say, but interest rates are really causing complete devastation in multifamily, not in all, but in many. And we did see a 229-million dollar foreclosure in Houston.

Dave:
Whoa.

James:
Whoa.

Kathy:
Yeah, as in perhaps one of the first ones to go down. If you were looking at 2% interest rates and now, most of those multifamily are adjustable if they didn’t have rate caps, most did, but some didn’t, they are dealing with payments that are unsustainable, they just can’t pay them. So I was just at a multifamily conference literally a few days ago and there was a lot of pain, a lot of people trying to figure out how they’re going to avoid foreclosure.

Dave:
Wow. All right. Well, that is foreboding and very interesting to hear because when I see interest rates now, they’re down from where they were in November and in February. And from everything I’ve heard in the residential side of things, it seems like now that rates are down in the mid-sixes, some buyer activity is coming back.

Kathy:
There was a huge difference because I was actually at two events in Dallas, one was a multifamily conference and the other was my event, which was single-family and also a focus on our single-family fund and they were about 20 minutes apart, so I was running back and forth between the two events. And the sentiment couldn’t be more opposite because people in the single-family sector are not feeling the pain because either the portfolio that they already own is locked in generally in 30-year fixed rate or even if it’s five or 10-year, they were not feeling any pain in their buy and hold properties. And in fact, they were there, it was 150 people there and a packed bus of people ready to buy more and very excited to buy more because of the fixed rate debt. It has come down, mortgage rates for single-family is tied, it’s different than on the short-term.

Kathy:
So over at the other conference, with multifamily, they are tied to the SOFR and they are definitely more tied to what the Fed is doing, whereas the single-family mortgage rates are tied to more what the bond market is doing. So to see the dramatic difference of how the multifamily investors, their world has changed so dramatically if they’re not on fixed rates, and for many of them where their rate caps are due and the bill is really just nothing they could ever have imagined, it could be the difference of 20,000 to 200,000 a month or even more. And then some of the people who bought coastal also saw massive increases in insurance, so it was really devastating to see how they’re feeding these properties.

Kathy:
They’ve stopped doing distributions and putting all that money into just trying to keep the property afloat, but with the first major foreclosure, I don’t know if it’s the first, but the one that have really hit headline news because it was a syndication, it was people, a lot of investors lost everything in that, including the bank. The bank lost about 20 million as well. So it was two completely different worlds that I experienced, in the single-family not feeling the pain and in the multifamily feeling a world of hurt.

James:
Doesn’t this remind you a little bit of the 2008 liar loans and that’s why we’re not seeing the issues? They did such a good job verifying people’s income the last five, 10 years to buy your single-family house that you had to be under a certain DTI, they really verified the income so you could weather a storm if you had consistent income, whereas, the multifamily space became the liar loans the last three years. A lot of these banks, they were signing off on really juiced up performance and they were giving them credit for that. People were forcing the deal to get paid and so they were maybe under budgeting these properties and getting too aggressive in there. And I feel like that’s why this is coming to fruition in a bad way because people were buying on greed for the multifamily.

James:
They weren’t buying to invest, they were buying to get a deal done, and that’s never a good thing, right? The best deal you can ever do is the deal you pass on sometimes, but when you’re ready to go and people, there was so much greed in the market, were starting to see the pain come around now. And I think it was also just a bunch of over [inaudible 00:08:06] performers that they were not accurate. Even with the rates changing and everything, they were going in already very, very slim and there was zero room for error. And this cost of money and these insurance and the rents declining a little bit, it can be very detrimental.

Dave:
Yeah, it seems like generally speaking, if you had to summarize Q1 in terms of interest rates, I would say the residential market adapted quicker than I thought, I’ll just say that. And I do still think prices nationally are probably still going to come down a little bit this year, but the bottom is not falling out and we’re starting to see things actually start to pick up seasonally. But to me, everyone I talk to in commercial is just waiting for the shoe to drop. We haven’t even seen really the beginning of the pain that it seems like everyone is expecting. Well, I guess Kathy, as you’re saying, we’ve seen the beginning of it, but it seems like there’s a long way to go.

Kathy:
Yeah, and I did actually talk to a few lenders and I don’t know how bad it will be because it may be that the lenders decide to do something creative and extend the loans, or I don’t know what they’re capable of being able to do in a situation where the cash flow of the property is not enough to cover the debt service, right? I don’t know what you do besides foreclose, so I think there are more. And it was hard to watch. I could not agree more with James that it feels like the same thing, only this time with multifamily and not single-family, I still am a strong believer that single-family’s on, or one to four units, conventional is on solid ground because of the loans.

Kathy:
It’s the adjustable loans that took down the housing market in 2008 because when those loans adjusted, people couldn’t pay, very different situation. It was a credit bubble, but, well, I guess similar, it was a credit bubble. The bridge lenders were giving money for the renovation too, so yeah, so you could get I think up to at least 80% LTV, maybe more, plus renovation costs. So that my mentor was really firm with me. He’s an older guy and he’s like, “Do not go over 65%”. Well, I couldn’t get a deal at 65% that, but he said there’s reasons why you want to stay at 65% LTV with multifamily because it can be volatile.

Dave:
Yeah. So I guess we’re going to have to see how that goes, but thank you for the insights. That’s super helpful. Let’s move on to a second indicator, which is the reason we’re in this situation, which is inflation. And as everyone knows by this point, inflation is why interest rates have been hiked, that’s what the Fed is trying to get under control. And as of this recording, which is in the middle of April, we have data now for the first quarter of the year and what we’re seeing is that inflation, at least the headline CPI has come down to 5%. It was peaked back in June at 9.1%, which is good. That is good and encouraging.

Dave:
The flip side of that though is the “Core CPI”, which is what the Fed honestly really cares about because it’s a better prediction of future inflation, is at 5.5 or 5.6% actually and is not coming down nearly as much. It was at 0.4% last month, so even if you annualize that out, that’s still almost nearly 5%. So I’m curious, how are you guys seeing inflation right now? In one respect, the numbers are coming down, but I’m not quite sure this is enough for the Fed to take their foot off the gas.

James:
I’m happy to see that the trends in the reporting are shifting the right way. As a consumer that buys a lot of products for real estate construction and just in general, I’m not-

Dave:
Boats.

James:
… boats, but yeah, I don’t even want to talk about the boat bills right now. I don’t think that’s an inflation issue, that’s just a boat owner issue, but it’s… I mean, I’m still paying a lot right now. Everything is expensive. I mean hotels, flying, buying materials. The only thing I am seeing a little break on is the labor market a little bit, but it’s-

Dave:
Okay.

James:
… but materials in general are… Now, we can get them a lot quicker now and we’re not in this like, we can’t get a product and we’re having to pay outrageous product just to get it, but everything is substantially more money. I mean, all my building material costs are 20%, 30% more and there’s not a lot of ease going on and we’re trying to negotiate and we still can’t get it down.

Dave:
And is it higher than it was but stable, or is it still going up?

James:
I would say it’s stable. We see where it goes like little dips in valleys, right? It’s almost like the housing market right now. It’s like teetering, but it’s staying flat. It dips and then goes up, it’d come with the interest rates. Same thing’s happening with material costs. And we are doing certain things, like we are just ordering in advance, buying out stuff early. We just bought 10 sets of appliances all at one time just to lock a price in. And so you just have to get a little bit more creative, but I’m not seeing it on the pricing. And honestly, I think part of it too is the vendors, they can sell it cheaper, but the demand is still there and so the pricing is just fixed right now. I do think there’s some things that are never going to come back down.

Dave:
Oh, for sure.

James:
It’s just people have realized that they can get that much money and it is, especially your mechanicals in construction, those costs are stuck. I don’t think they’re moving.

Dave:
Yeah, it’s pretty rare for prices to go back down once they go back up. I mean, yeah, like food, energy, those things tend to fluctuate, but in terms of durable goods, that’s why the Fed is more concerned about these sticky prices, like this kind of stuff you’re mentioning James, because it doesn’t really go back down and they really have to get it under control. Kathy, do you think, given what you know about Fed policy and inflation, do you think we’re in store for more interest rate hikes?

Kathy:
The Fed has made it really clear what their target was and it was to get over 5% in the overnight lending rate and we’re getting close, but not totally there where they said that we’d be. So I’ve expected that they were going to continue to raise rates until they get there, so I do think we’ll see another small rate hike, but based on some of the research and some of the interviews that we’ve had and people I’ve talked to, one is MBS Highway and he is very, very bullish on the idea that in May, we’re really going to see things change with inflation and that because of the year-over-year data, like you said in your report, inflation really peaked last summer. Now when we get to this summer and we’re comparing today’s numbers to last year, which were very high, everything’s going to look a little bit better on a year-over-year basis.

Kathy:
So it’s his very, very strong opinion that we’re going to see much, much better inflation numbers and that as a result, mortgage rates for conventional, not, again, this couldn’t be more opposite than multifamily or commercial loans, but in the residential that we will see rates come down in mortgage-backed securities for one to four unit. And when that happens, there could be another frenzy in real estate because we do, again, according to your report, inventory levels in housing just keep coming down and because it’s so stuck, like you said, and as soon as rates come down, there could be multiple offers again, there could be a buying frenzy, which is why we’re buying like crazy, but the opposite is true for the adjustable rates. If you’re tied to the Fed fund rate or the SOFR, you’re going to see rates continue to rise.

Dave:
Yeah. And just so people know, what Kathy’s talking about is if you’re getting a loan on a multifamily or office or retailer commercial, the bank’s underwriting and where they borrow from and basically how they consider rates is very different than it is in residential and so it is very possible and seemingly very probable that rates for commercial and rates in residential might head in different directions over the course of this year.

Kathy:
And they have been.

Dave:
Yeah, and they have been. Exactly.

Kathy:
Yep.

Dave:
Kathy, you hit on something that I want to move on to Another indicator, which is basically demand. It seems like every time there is a slight decrease in interest rates, mortgage rates, demand just keeps coming back to the market. It just seems like people are just waiting on the sidelines. And even when they go down, not even that much, it seems like demand comes back into the market. And I’ve heard this anecdotally speaking to agents and lenders, but the Mortgage Bankers Association does a survey every single week of how many people are applying for mortgages and you can see every time there’s a dip in residential mortgage rates, there is a spike in the number of applications, and I’m honestly surprised. I personally thought more people would be sitting on the sidelines of waiting it out, but James, I’m curious to see what, in your business, are you seeing this, especially in a market like Seattle that has seen probably one of the biggest corrections in the whole country?

James:
Yeah, I’m definitely surprised with the amount of buyers I’m seeing coming through housing right now because we saw on these West coast or expensive market cities, we basically saw a 15% to 20% compression off-peak pretty quickly. And then now, what we’ve seen, I think part of it has to do with rates because the rates have been swinging just a little bit, but it’s not that impactful for what we’ve seen over the last nine months. I think this is all psychological, it’s people are really… Because I’m seeing the inventory, like in Washington, there was a couple stats that came out this month that were very interesting to me. One is days on market went down by 35% last month, so homes are now selling for 35% faster. They went from 28 back down to 16, which is a big, big drop in a month.

James:
Inventory is back down to two to three weeks or two to four weeks worth of inventory, whereas it was creeping up more in certain neighborhoods. And so what’s happening is there is a lot of FOMO in the market where people are watching things sell and there was this stall out and they saw this sudden drop and now, they’re seeing things just trade and they’re also seeing things trade close to list price and people will wait that 90, 120 days. And so it’s a psychological thing to where, I mean, buyers are just getting back in the mix no matter what, but we are seeing, I mean, on some homes, I was getting two showings a month on that would’ve been like 90 days ago, we’re getting 20 to 30 showings a week.

Dave:
Oh my God. Whoa.

James:
It is crazy. The weirdest thing is people aren’t moving still. It’s like they’re still in this confused lamb.

Dave:
They just want to go see some stuff?

James:
Yeah. It’s like they either want to be opportunistic and low ball like crazy, or I don’t need to call it low ball. They’re offering what they think it’s worth. And the other thing is that they’re looking for any reason not to buy the house, but they’re still out looking. And so what that tells me is there’s buyers in the market no matter what, and if you’re putting the right product out, things will sell. But we did sell three homes over the list price last weekend.

Kathy:
Wow.

James:
It depends really on your price points. And so as you’re an investor or a flipper developer, focus on those markets, or not the markets, focus on the sale price that moves. We know where our two sweet spots are in Seattle. And if you’re listing below a million bucks and you’re a certain type of product, it is selling and it will sell very quickly. And so a lot more buyers, a lot more movement going on in the last 30, 60 days. It’s actually looking… I feel a lot better about the market after the last 60 days.

Kathy:
That’s why you need such a good real estate agent, if you’re using one, because you better be able to know how to list it properly.

James:
Yes. Yeah. And that’s key right now is putting that magical list price on it, there’s two approaches. You either go high because you know the buyers are coming in, depending on where your demographics and who your buyers are, they’re going to come in 2% to 5% off list just naturally, or you price it a little low. And if you price it low right now and you have a good product, the frenzy starts. I think we had six offers on one house and it was 800,000 in Snohomish County where the median home price is $670,000, so we were $130,000 above the median home price and we still had that much action, which is really, really promising.

Dave:
Wow, that’s unbelievable. Well, let’s talk about the flip side of demand now. We’ve covered inflation, we’ve covered interest rates, we’ve covered demand. I think as we’ve talked about before, but I want to revisit here, to me, the reason that the market is still showing some signs of life is just that there is such low inventory. It’s just remarkable to see that while people were saying it was going to spike and home prices were going to crash because inventory was going to surge, it’s just absolutely not happening right now. And that combined with strong demand seems to be creating a housing market that is pretty robust right now. Kathy, I know you’re in a single-family fund and buying single-families. Are you finding it hard to find properties right now?

Kathy:
Not at all.

Dave:
Oh, okay.

Kathy:
We’re trying to grow our fund as quickly as we can because there’s more opportunity than we can keep up with, but what we’re buying is not what a first time home buyer would buy because it’s got issues, right? We’re buying stuff that does need to be fixed up and that a bank wouldn’t lend on as is, and that’s why we’re getting massively steep discounts on them because what we’re noticing is that our competitor isn’t there today where our competitor is not the first time home buyer because we’re buying homes that need fixing. And usually, a first time home buyer doesn’t have the time, knowledge or money to do that. But what we don’t have right now is a lot of competition from other investors and I think that’s because our fund, we’re raising money, we’re raising cash and we’re buying these properties with cash, so we don’t need a loan.

Kathy:
So a flipper might say, “Wow, I don’t know if I can make these numbers work with today’s financing or with hard money loans” or maybe they can’t even get those loans. Whatever it is, we are really not seeing competition, wholesalers that just maybe wouldn’t have come to us before are coming to us now because they’re just maybe aren’t the buyers, or whatever it is, I feel like we’re the only ones out there playing the game in the area that we’re in where in addition to all these opportunities, there’s nothing but growth happening, so it’s just mind-boggling to me. I was, again, just there. There’s freeway expansions and there’s cranes everywhere and new development and chip manufacturing coming in and yet, we’re still buying stuff for under 100,000. My last purchase was 65,000. We had to put 20,000 in it, it’s worth 200. I can’t make this up. And every time I say this, I’m like, “Ah, why’d I say that? Because now, everybody heard it and now, I’m going to have competition”.

Dave:
Well, they probably don’t have cash.

Kathy:
Maybe.

Dave:
But just for context so people know, back in the fallout of the great recession in the 2012, 2015 timeline, inventory used to be right around 2 million housing units. Prior to the pandemic, it was about 1.5 million. Now, we’re at a million, so we’re still down 33% prior to pre-pandemic levels. And yes, they have come up a bit from where they were last year, but we’re still talking about insanely low levels. And I do want to be clear that housing prices can fall with low inventory, we’re seeing that in a lot of markets, but it does, at least in my mind, provide a backstop for prices. If there is demand and there is always some buyers and inventory is so low, it just can’t fall that much. Inventory, if there were to be a crash, has to go up. So I don’t know, I just think that this is fascinating, and we’ll get into one other topic about why this is going on, but James, first just wanted to get your opinion on inventory and what you’re seeing.

James:
I’m not in the same market as Kathy because it is hard to find a deal right now.

Dave:
You can’t find anything?

James:
No.

Kathy:
You can’t find a $65,000 house in Seattle?

James:
No, I’m finding a $65,000 permit fee, but [inaudible 00:25:16] then architect and plan fees, but I would say there’s deals… What it’s came back to for us is, and we’re just rebuilding our systems for it is like Kathy said, if it’s a hard project, it needs a lot of work. That stuff’s not moving that quickly because cost of money’s up, the people, they don’t have good control in their construction. And then also just the jurisdiction issues where things, these cities can take a really long time on things, which means your debt… So all the cost of money, timelines and construction costs has got people out, so we are getting really good buys on the major fixers. I just paid $740,000 for a house and the house next door sold for 1.4.

Kathy:
Wow.

James:
And they’re model match houses, and I’ll be nicer, and there was zero competition on that house because it just needed so much work. And so if it’s a clean product, there is no inventory, there’s nothing to buy. But if it needs work, we’re able to get some deal flow in, and we’re doing less deals but better margin deals, much, much better margins.

Dave:
That’s so interesting because I was a guest on a podcast the other day and the host asked me what strategies I thought were good and I’m not a flipper, but I was saying that I think it seems like a good time to flip because not all homes and prices decline and accelerate at the same rate. We on the show talk about home prices on a national level, which is far too broad, but even talking about it on a regional level is probably too broad because like you said, fix and flips tend to, in downturns, fall further than stabilized asset, which just gives you more margin just right off the bat even though expenses are high.

James:
Yeah, and it’s like the rules that got broken the last two to three years with the… The market was so hot, it was also people were breaking the rules. If you’re buying certain types of product, I would say that the margin shrunk 10% to 15% on all those products. And if you’re putting in that much, it’s like people are buying big fixers to make the same amount of margins they would on a cosmetic fixer, and that’s not how it’s supposed to work, right? The stuff that you have to rip down, reconstruct, deal with numerous… That you’re in that deal for a year, you’re supposed to be making more money because A, your capital’s outlaid for double the time and then B, it’s just substantially more brain damage.

James:
And so it’s gotten back to the stuff that’s hard work, you get rewarded more. And if it’s not that hard work, you’re not going to get rewarded that well because even the last 12 to 24 months or 24 to 36 months, the stuff that wasn’t hard was making a ton of money because the appreciation factor. And so I think those days are over, but you can get back to, if you want to put in the work, you want to put in the energy, you can get that good buy, and they are out there. I mean, we have bought then better deals the last six months, but we just bought fewer of them.

Dave:
Well, I do want to get to one of my favorite indicators of Q1. I think this, to me, is maybe the number one thing which is new listings. Basically, this is the number of people who put their house up for sale. It’s different from inventory just so everyone knows because inventory is how many things are for sale at a given time, so it factors in both how many properties go up for sale and how quickly they come off the market. But new listings just basically measures how many people decide they’re going to sell a home, and it is just absolutely in the gutter right now. It is down about 25% year-over-year and falling. It’s going down more and more and more. People just absolutely do not want to sell right now. And I’m curious what you guys make of this. We’ve talked about this, there’s the lock-in effect, there’s a couple other reasons that we’ll get to, but do you think this is sustainable? Do you think this is the new normal where people just aren’t going to be selling their homes?

Kathy:
I don’t know if it’s the new normal, but if you’re locked into a 2% or a 3% or 4% interest rate, it sure is tempting to just stay put versus looking at a very limited amount of inventory out there and having to pay more for it. A lot of people just did not realize that today’s homeowners are probably in the best position ever. Their payments, compared to their income, is the best it’s ever been, at least in the data that I look at because they’re locked in at a fixed rate, but we’ve seen wage growth and then of course, appreciation. So for them, for people to walk away, there would have to be a really good reason. Even if they’re moving, even if they’re going somewhere else for a new job, they might be thinking, “Maybe I should just keep the house and learn how to be a landlord” and just rent it out.

Kathy:
I’ve heard that from a lot of people saying, “I just don’t think I want to let go of this interest rate”. And like you said in your report, a lot of people don’t realize that buyers or sellers, it’s usually somebody who sells a house who buys another house. And if someone’s not selling, they’re not buying. So it’s just like this stuck inventory and I don’t really see it changing until rates get to a point where people are like, “Okay, maybe at 5.5”. There’s some psychological thing about 6%, I don’t know what it is, but when it gets into the fives, it’s like, “Okay, that’s acceptable. I could do that”. So could you go from a 2%, 3% or 4% to a 5%? Sure. Were you going to go to a 6%? Maybe not. And again, MBS Highway says that’s what he’s predicting is going to happen this summer is we’re going to get down into the fives, which is why he thinks that we will start to see things unlock a little bit this summer.

Dave:
Oh, yeah, that will be very interesting to see. If you listen to our last episode, we had Tim Birkmeier, who’s the president of Rocket Mortgage come on and he was confirming a lot of things Kathy just said. Number one, he told us, if you didn’t hear this, that the average American has $170,000 of equity in their home right now, which is a record, which is unbelievable. And he also said that they’re seeing a big uptick in HELOCs and Cash-Out Refis right now even at higher rates. And he said that when they talk to these people who are doing this, they’re taking out money to improve their own homes and do renovations because rather than doing a move up like they would normally do, in normal times, they’d sell their home and maybe trade up to a larger home, they’re just renovating their homes and staying in place. And this is a trend in how people are dealing with higher interest rates where they can’t really afford to trade up like they normally would.

James:
Yeah, I wonder if that the Cash-Out Refis though, because I don’t see a whole lot of inventory switching up or much movement in because there isn’t any pain in the market yet. It’s weird, we’re in this weird recession, on the in and out, but there’s still, like you talk to the day-to-day American that is the home buyer buying a lot of the product, they still, there isn’t that pain. The labor market’s good, the job market’s good. And so until something happens like that, it’s probably going to stay where it’s at.

James:
I mean, one indicator I would think, if they’re saying there’s a huge uptick in Cash-Out Refis is because there was so much liquidity in the market for two years and people got really drunk on the liquidity. They were drinking it, it was just like part of their day-to-day life. You look at how people spend money today, it is substantially different than it was 36 months ago. And I feel like a smart guy told me one time, once you turn that faucet on, he told me to stay frugal because once you turn the faucet on, it’s really hard to turn it off. And I feel like America turned the faucet on, on full blast-

Dave:
The whole country.

James:
… and they don’t know how to turn it down, but that’s why we’re seeing these Cash-Out Refis, and I mean, that would be the dangerous part, right? They’re pulling out more liquidity and it’s like this bandaid that is just going to float for another 12 to 24 months, but that’s going to end poorly typically and so that’s actually a stat I want to track now, like how many Cash-Out Refis were going on, and is that constantly increasing?

Dave:
He did say that some of it was for debt consolidation, like to pay off credit card debt because you can get a Refi at a lower rate than a credit card debt, but that’s not a great position to be in.

James:
That just goes back to over-leveraged.

Dave:
Yeah.

James:
America is over-leveraged. Credit card debt is at its all time high. People, they’ve shredded budgets, budgets that Dave Ramsey would be very sad. People, they’re loose with their funds right now.

Kathy:
Well, I wonder, I’m wondering, we got a credit line or an equity line on our house and it was 9% or something like that. So it was one of those things we got just in case we need it, but we’re not using it, but I think it shows up as if we did. So I’m curious if some people are just getting these equity lines and not using them but just keeping them.

Dave:
That’s true.

James:
That’s a valid point.

Dave:
Yeah.

Kathy:
Yeah. I’m not sure how much on the credit report it shows whether it’s been used or not, but when I was in mortgages, it would show up as you’ve used it because you’ve got that credit available. But I had this really interesting conversation with one of our investment counselors at RealWealth, who honestly, these people, they know more than me at this point, but Leah, one of our investment counselors, said she just refied some of her investment properties that she had at very low interest rates and she refied at a higher rate to take the Cash-Out because she had so much equity in this fourplex that she had bought a few years ago in Florida, and I’m like, “You got to be kidding me. You went from a three to a six and took the Cash-Out, why would you do that?”

Kathy:
And she enlightened me on her thinking there, is that if you have several hundred thousand of equity sitting there making zero and you average it out, even if you’re borrowing at 4% on half of the property but you’re getting zero on the other half, in her mind, she’s like, “I’m better off just paying a little bit more, getting that money out and reinvesting” because she’s at a phase in her life where she’s an acquisition, she’s in her early 30s and she’s not looking for the cash flow.

Kathy:
And I told her, “Good, because we want to keep you as an employee so don’t get cash flow today”. That she’s really looking at acquiring in markets that are growing because that’s her plan, and that was really enlightening to me. I would never have done that, just cash out in a higher rate, but when she added up all the numbers and put it in her spreadsheet for what her 10-year goal is, it made sense.

Dave:
That’s super interesting. Yeah, I mean, as opportunities increase, you might see that a little bit more just because if there are deals like the both of you are talking about, you probably want to get a little liquidity even if you’re sacrificing cash flow.

Kathy:
Yeah.

Dave:
All right. The last indicator I want to talk about was rent. Rent is still up year-over-year 7%, but the pace of change is coming down pretty consistently. In a lot of markets, we’re starting to see that rent is flat or even starting to decline, particularly in multifamily. Curious what you both are seeing. James, are you seeing any changes to rent in your market or your business?

James:
No, the rents have stayed pretty… We saw it in the luxury condo market where if stuff was like 5,000 it came down into the low 4000s, which definitely could be detrimental. Luckily, we don’t buy a lot of that product. Our rent growth is actually still stable. We’re staying 97% full in our whole portfolio and we’re still getting our steady increases. And I think that just comes back down to the cost of rent is substantially cheaper than the costing to own right now in Washington. And until I see that metrics close, I think we’re… Now, I don’t think we’re going to see the rapid growth we’ve seen in the last 24 months, but we haven’t seen much adjustment at all. It’s very stable, there’s still way more demand than there is product, and as long as you’re in that right wheelhouse, things are leasing up pretty quickly.

Dave:
Nice. What about you, Kathy?

Kathy:
We were way too conservative in the underwriting for our fund because the rents are coming in much, much higher and they continue to climb, and that’s been the case that we’ve seen in all the markets that we focus on at RealWealth. I think the reason for that is we’re already looking for… That’s just part of our metric. We’re looking for areas that have job and population growth, but that are still really affordable for the average person in that area. So because it’s still affordable but there’s growth, we’re seeing prices increase and rents in those markets, which has surprised me.

Dave:
It is surprising me. I still think it’s going to slow down, but in certain markets, obviously, like Dallas has such strong population growth and I’m not surprised to hear that, but on a national basis, it’s still higher than I at least expected it to be.

Kathy:
Yeah.

Dave:
All right. So that is where things stand in terms of some of the major indicators that we are watching. Of course, interest rates are pretty volatile, inflation is falling, but is still higher than I think anyone wants it to be. Prices are down a little bit, inventory is not budging, demand is still pretty good, so we’re in a really interesting time for the housing market and I’m fascinated to see Q2. I think this is going to be really interesting to see. We had a little bit of correction, now we’re showing signs of life. I think it’ll be really fascinating to see what happens. James, I’m curious if you had some advice for people how to navigate, let’s say the next three months. Usually, we talk about 2023, but given the way things are, I think you have to look even almost at a shorter time period for some decisions. So how would you recommend people navigate the next couple of months?

James:
I mean, the biggest thing for any, and I know for me is always just staying on top of what my buy box is. It changes from quarter to quarter based on what I’m seeing in the market, right? As the market changes, you have to change up what you’re going to buy and why. And so for us, it’s about we just redid our buy box again, what fix-and-flip properties are we going to buy? What kind of development product are we going to buy? What is our expected returns? And as long as we know, if everything hits that return, we are pulling the trigger on it so just stay on top of it. But I would just say, don’t be greedy, run your numbers very conservatively, and if it hits all the numbers, then buy on that. I think where people are getting in trouble, like we were talking about earlier with the multifamily, is people are being too aggressive on their performance.

James:
So just go with the median. Like for us, when we’re pulling comparables or even rent comps, sale comps, whatever it is, we’re using the median, not the high. And so as long as you’re staying in the middle, we’ve seen a lot of stability the last three to four months, you’re not going to get hurt that bad. I mean, there’s going to be a little bit of upside, little bit of downside, and then try to time what you think’s going to happen in the market. We do think, I don’t think rates will be in the fives in the summer, but I do think they could be in the high of fives by the end of the year.

James:
And that’s why I’m going after big projects because they’re huge margins and then the timing works. By the time I go to sell that, my rate will be cheaper to my next consumer. And so it’s funny, we were getting out of the big projects and now, we’re going right back in because it works best with the buy box in addition to it goes to my core beliefs of I think rates will fall. And if you’re timing that right, it’s going to click out a lot better.

Dave:
That’s great advice. James, I’m just curious, is your buy box, is that something [inaudible 00:40:58] you said quarterly or do you do it even more frequently than that?

James:
I mean, it depends on the trends. And I would say right now, we can go more quarterly because the market’s very stable for the… I would say from May until October, we were checking it every 30 days because there was so much more volatility in the market. The money went up what, 40%, 50% during that time. It was when there was that much volatility in the market, you want to do it constantly. But right now, we’re doing it about quarterly. And then me and my business partner get together, we figure out what we also are evaluating what’s working best for us, and actually randomly right now, building homes is more consistent than flipping for us because it has all and it has everything to do with the labor market, has nothing to do with the product, what we’re buying, the margins, it’s the professionals that we’re working with and the timelines they can get things done in.

James:
And in addition to as inflation, like we’ve been talking about, has been starting to go down, they’ve been more consistent with the pricing coming down with that trend, whereas, your remodel contractors are a little bit flying by night, so they’re not. And so just based on that one principle alone in efficiencies and cost, we’re buying a lot more dirt than we are fix-and-flip. And so it’s your buy box, there’s so many little indicators to form that. And I would say if you want to buy anything right now, buy what you’re good at and then you will be safe.

Dave:
All right. Great advice. Kathy, what’s your advice?

Kathy:
Very similar, not surprisingly, but I’m going to compare it to yoga and the tree pose, and if anybody knows what I’m talking about, it’s where you stand on one foot and you’ve got the other foot up and then you’ve got your hands up to make it a tree, and it’s a really easy way to fall down and wobble a lot, right? And the whole, the key to doing tree pose correctly is to look far away in the distance and focus and not look around you or anyone around you who’s wobbling because you’ll probably fall.

Dave:
I was wondering where that was going, but you brought that one around. That was good.

Kathy:
Bringing it back. You’ve got to be super clear what your long-term plan is and focus on that and don’t let all the wobbliness around you affect that plan. Know what you want. And again, in the case of Leah, our investment counselor, she knows what she wants, she’s building a portfolio. She’s young, she doesn’t need the cash flow right now. She knows what she’s looking for and she runs it through the spreadsheet and it works, even at a higher interest rate. She’s leaving a low interest rate for a higher one because she can deploy more cash that way. So have your focus, be clear about it, and don’t look at anything else, just focus. Keep your eye on the horizon, as they say it, Marcus & Millichap. That’s the big one. And it all really depends on what you’re trying to do. If you’re trying to buy your first home, maybe it’s a home you live in, does it matter what’s happening?

Kathy:
Again, does it matter what’s happening? If you need a place to live and you can still rent out rooms and house hack, you’re going to have to pay somebody something. So knowing that there’s a possibility that mortgages could go down, if you’re just trying to buy your first home, please get active in the next couple of months because it could get harder very soon, whether it’s your primary or an investment property. And I know a lot of people and I can already see the comments, “Oh, well, you’re in real estate, so of course, you’re going to say, ‘Oh, now is always the time to buy’”, but really, it really is. And we could talk next summer. Even if I’m wrong and let’s say rates go up, well, then you got today’s rates.

James:
That’s true.

Dave:
Yeah, that’s a very good point. All right, I love that. B, do your tree pose and look beyond all the instability right now and try and focus on your long-term goals. I think that’s always a good advice for real estate investors. All right, thank you guys for, first of, all reading my report. If anyone wants to check this out and wants to understand some of the more nuanced data and information that is dictating the performance of the housing market right now, highly recommend you check it out. It’s completely for free on BiggerPockets. Just go to biggerpockets.com/q2report. Before we get out of here though, I have one question from our audience that is very relevant for our conversation today. This question came from the BiggerPockets forums, and if anyone listening wants to ask us questions, that is a great place to do it. This question comes from Mathias Yonen who said, “What websites or sources do you guys use to inform yourselves about the market in any shifts and trends that occur?” James, what about you? What sources do you use most?

James:
So I use a lot of local sources because I think that depends on what kind of investor you are. I’m a backyard investor, so everything that I’m doing is very localized because we’re tracking really counties and cities. I mean, I reference the national, but I mean, and because I’m a broker, I use a lot of Northwest MLS. We use MLS data. I don’t really want to get people’s opinion on data, I just want the core stats so I can then interpret them myself. So most of the time, it’s done through the MLS or NAR, just stats and trends rather than someone telling me what they think. Maybe I’m just [inaudible 00:46:25] and I want to make my own opinion.

Dave:
That totally makes sense. What about you, Kathy?

Kathy:
I’m the opposite. I like to listen to what other people think and how they interpret the data. And so far, my two favorites are HousingWire and Marcus & Millichap, they both offer a lot of data and they take that data and interpret it. And sometimes I agree, sometimes I don’t, but I love that. And then the third way is just boots-on-the-street. Like I have said before, we’ve got property management companies that we work closely with in 15 to 20 different markets, and we have regular weekly conversations with them to see what’s going on, so we know real time what’s happening out there, and that’s important to us because the local market is not the national market, right? So we get that local information combined with the more broad.

Dave:
Great, both excellent advice, local information and getting those expert opinions about from people who really understand the data are great. If you are the kind of person who likes to check out data, some sources that I recommend are, the FRED website is great, but it’s not really up to the minute. You usually get things, some things, a month or two late, but it really does have good information on a localized level if you want to understand macroeconomics. If you want to understand housing dynamics, I think Redfin offers really good data as well. They have a data center where you could download all sorts of information about a lot of the indicators that we were talking about today, like inventory, new listings, that sort of thing.

Dave:
And then the last thing I’ll say is we had Mike Simonsen from Altos Research on I think episode 98 a couple weeks ago, and he now works with HousingWire and his company is all about tracking data in real-time for the housing market. And if you go on HousingWire, they have active inventory home sales data for the current week, which is just about as fast as data as you can get for the housing market. So those are just a couple of the sources that I personally use. And you can always follow me on Instagram @thedatadeli. I put out lots of content about where to find data.

Kathy:
I was just going to say that. I was like, “Wait a minute, and you”, I mean, your most recent report was so in-depth and it had the mixture of the data with the interpretation of it and wow, definitely make sure people know where to get that and all of your reports because they’re like little books. I don’t know how you’re writing so many of them, but it’s really packed full of information.

Dave:
Oh, well, thank you. All right, well, thank you both. I appreciate you being here. This was a lot of fun. Kathy, if people want to connect with you, where should they do that?

Kathy:
Realwealth.com or @kathyfettke at Instagram. And if you’re interested in learning more about the fund, it’s growdevelopments.com.

Dave:
Sweet. I love your new studio, by the way. It looks good.

Kathy:
Do you like it?

Dave:
Yeah.

Kathy:
Rich chose the color, pink.

Dave:
It’s perfect.

Kathy:
Representing the ladies over here.

Dave:
Yeah, it looks very nice. Very professional.

James:
I thought that was representing his underwear color.

Dave:
James, what about you? Where can people find you? Just come to the boat or-

James:
Yeah, just come to the boat whenever it’s open, you can hang out, but it’s-

Kathy:
Good to know.

James:
… best way is just Instagram, @jdainflips or jamesdainard.com.

Dave:
All right, great. Well, thank you both. And if you want to connect with me, you can find me on Instagram where I’m @thedatadeli. Again, if you have questions for us, like the one that we answered today, BiggerPockets has forums, we have an On the Market forum. Just tag any one of us and we will review any of them and might select some of yours for our parting thoughts here on the show. Thank you all so much for listening. We’ll see you next time for On The Market.

Dave:
On The Market is created by me, Dave Meyer, and Kaitlin Bennet, produced by Kaitlin Bennet, editing by Joel Esparza and Onyx Media, researched by Pooja Jindal, and a big thanks to the entire BiggerPockets team. The content on the show On the Market are opinions only. All listeners should independently verify data points, opinions, and investment strategies.

 

Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected].

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



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Want to buy a cheap house in rural Japan? This millennial farmer offers his advice

Want to buy a cheap house in rural Japan? This millennial farmer offers his advice


When Lee Xian Jie first stepped foot in the traditional farmhouse located in Ryujin-mura, a village in Japan’s Wakayama prefecture, it was “quite rundown” — with floors so rickety they shook beneath him with every step he took. 

After all, the main structure of the abandoned home was 300 years old, Lee said. But when he took a closer look around the home, he could tell it was “properly built.” 

“The pillars are all Sakura wood, which is an extremely dense and hard wood,” he told CNBC Make It. “It’s also a thatch building, which is very rare in Japan now … So it’s a building with great historical value.” 

“My interest has always been in history. I wanted to see … How did people build homes with just wood and joinery?” said Lee Xian Jie, who restored three buildings in Ryujin-mura, a village in Japan’s Wakayama prefecture.

Lee Xian Jie

The property, which previously housed four generations, is one of Japan’s millions of vacant houses known as akiya, Japanese for “empty house.” 

But unlike many akiya that are for sale, this was for rent because it’s on “good land,” and there are two family graves in the area, Lee explained. He was, however, given permission by its landlord to restore the premises. 

“My interest has always been in history. I wanted to see what it was like for people back then to live without chemical fertilizers that we use right now. How did people build homes with just wood and joinery?” 

Things to consider 

Cost of renovations



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7 Timeless Rules For Success From 6 Decades Of Unicorn-Entrepreneurship

7 Timeless Rules For Success From 6 Decades Of Unicorn-Entrepreneurship


Now that ChatGPT has opened the doors to the AI gold mine, the rush is on. Entrepreneurs who are interested in building a big business using AI may find it useful to know how Unicorn-Entrepreneurs of the last 6 decades found the gold.

Most Unicorn-Entrepreneurs, from Sam Walton (Walmart) to Brian Chesky (Airbnb), launched on an emerging trend – and dominated the trend. Emerging trends offer growth opportunities. Dominating them helps you build a real unicorn (with sales above $1 billion) unlike VC-unicorns with manipulated valuations.

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Based on my financing, interviews, and research of 122 Unicorn-Entrepreneurs, here are 7 rules to help you dominate your emerging trend.

#1. Smart entry beats slow entry: Enter before industry takeoff.

It is difficult to dominate an emerging trend after it takes off because someone else is leading the soaring industry and it may be difficult to catch up According to research by Karl Ulrich (Allen Shockley lecture at Carlson School of Management), most emerging trends take off within 3 years to 11 years after starting. Unicorn-Entrepreneurs mainly enter the trend after it starts and before it takes off. Now is the time to build a unicorn in AI.

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#2. Smart movers beat first movers: It’s about strategy and skills.

Although the business press keeps harping about “first movers,” the reality is that fast movers beat first movers 9 out of 10 times. First movers identify potential. Smart movers capture potential. They imitate and improve on the first movers as did by Sam Walton, Bill Gates, Michael Dell, Steve Jobs, and Brian Chesky. Unlike the Silicon Valley “wisdom,” it’s not about first-movers or minimum viable products. It is about smart movers with strategies and skills. Sam Walton moved smart in small towns, Bill Gates in the operating system, Michael Dell in direct-to-consumer, Steve Jobs in a music platform, and Brian Chesky by making it easier for landlords to find guests.

#3. Smart capital beats venture capital: Grow with control.

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To stay in control of your venture, and of the wealth it creates, delay or avoid venture capital (VC) by using smart capital to takeoff. 6% got VC before proving their leadership potential and lost control of both their venture and the wealth they created. 18% of Unicorn-Entrepreneurs got VC after Leadership Aha and stayed in control of their ventures. Examples are Bill Gates and Mark Zuckerberg. 76% avoided VC and kept more of the wealth created. Examples are Michael Dell and Michael Bloomberg.

#4. Smart starts beat money-losing starts: Revenues are the smartest capital.

The capital-intensive VC-model that hopes for revenues has mainly worked in Silicon Valley. If that is where you are, that may be a good option if you don’t mind being at the mercy of angels and VCs. But know that only about 100/100,000 get VC and about 80% of those who get VC end up failing. Plus you are likely to lose control of your venture. If you are not in Silicon Valley, your odds are better if you finance with cash flow and smart capital rather than relying on second-tier VCs, because the Top 20 VCs are mainly in Silicon Valley. Billion-dollar entrepreneurs from Sam Walton and Bill Gates to Joe Martin and Gaston Taratuta grew with revenues.

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#5. Smart speed beats wrong speeds: Launch to balance cash flow and leadership.

How fast you grow often influences how much capital you need. Grow at the ‘smart’ speed, which is based on your cash flow speed, market speed, and industry speed. Bob Kierlin dominated the fastener industry by growing at an annual rate of 30% with internal cash flow.

#6. Smart alliances beat well-heeled competitors: Disrupt slow corporations and dominate.

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The Internet allowed retailers, such as Amazon.com, to disrupt larger store-based retailers like Borders because online sales did not need stores – making Borders’ business model obsolete. But when corporations can add AI to existing business models, they can be a strong competitor – or a potential acquirer. So keep corporations in mind when starting your venture – for alliances or acquisitions. Google bought YouTube because YouTube was better than Google’s own service.

#7. Smart skills beat startup skills: Unicorn-Builders beat Unicorn-Starters.

Learn technical skills to develop an AI product, sales skills to find customers, finance skills to launch, and finance-smart skills to lead. Unicorn-Entrepreneurs used finance-smart skills to grow more with less. Get these skills. Or else your idea could be appropriated by someone else like Mark Zuckerberg who was approached by fellow Harvard students to write the code for what ended up as Facebook. Zuckerberg seems to have appropriated the idea. Or you could be replaced by a professional CEO, which is what happens to many founder-entrepreneurs.

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MY TAKE: Emerging trends create unicorn opportunities for fast movers. AI is taking off and will create many new industries and growing ventures. This is the time. But entrepreneurs need skills to move smart. Areas can build unicorns by training everyone.

ComputerworldFacebook, ConnectU reportedly reach $65 million settlement

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MORE FROM FORBESFrom $375 To The Newest Unicorn In Beauty: How Joe Martin Built Boxycharm.com Without VC
MORE FROM FORBES20 VCs Capture 95% Of VC Profits: Implications For Entrepreneurs & Venture Ecosystems
MORE FROM FORBESWhat Can You Learn From Airbnb: Focus On Your Skills… Not The Idea

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MORE FROM FORBESFirst-Movers Seldom Win, While First-Dominators Often Succeed And Achieve Staying-Power



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Making 0K/Year in 3 Years w/ This High-Cash Flow Strategy

Making $200K/Year in 3 Years w/ This High-Cash Flow Strategy


For real estate investors, passive income is almost always the goal. You may be making good money at your job, but the long days, longer nights, lack of sleep, and limited time off is probably leaving you feeling fatigued. This is exactly how Brittany Swait felt after a severe diagnosis put her life in danger. She was working harder than ever, but the time with her family was slowly slipping away. That was until she started investing.

Brittany was able to build a fifty-nine-unit rental property portfolio in just three years. These properties bring in a staggering $200,000 per year passive paycheck, allowing Brittany to focus on her family, not take tasks from a boss. But this portfolio wasn’t easy to build, even though it happened quickly. Brittany had to learn the BRRRR method, take considerable risks (like draining her retirement accounts), and put herself in an entirely new position.

Now, just a few years later, Brittany is building her rental property portfolio at a fast pace, but she loves every minute of it. In this episode, she’ll walk through the exact strategy she uses to make such high cash flow, her five tips for remodeling and renovating that will save you TONS of time, and how she’s been able to pull her cash out of the deals she’s doing. If you want to scale your real estate portfolio, Brittany is the person to listen to.

David:
This is the BiggerPockets Podcast show 764.

Brittany:
Just three years ago, I was working 60 hours a week for somebody else, and now I have a portfolio of over 5.5 million dollars.

David:
What’s going on, everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast. Here today with my co-pilot and partner in crime, Rob Abasolo. Rob, how you doing today?

Rob:
Good. Hey, you forgot to say that we’re the biggest, the baddest, the best real estate podcast show on the internet.

David:
I did not forget to say that. I just let you say it because I remember what it was like when I hosted this with Brandon and he never let me talk.

Rob:
Genius.

David:
I’m not going to do the same thing. So welcome to saying the alliteration to start the show, we are the biggest, the best, and the baddest real estate podcast in the world. On that tone, today’s interview was with Brittany Swait, who has accumulated 59 units over three years with a foundation in property management using techniques that we talk about on this podcast. It was an awesome show. Rob, what were some of your favorite parts?

Rob:
Very cool story. Full-time mom, full-time property manager, full-time building a real estate empire. I think for a lot of the newbies out there, they’re going to love today’s episode because, personally, I think she totally demystifies rehab costs. I think when you’re getting into rehabs in the BRRRR, where you’re like, “Man, I don’t know how much things are going to cost. It’s scary. How should I do this?” She just has a way of dispelling that and I think making it feel feasible to the everyday person. What about you?

David:
Yeah. She did a wonderful job of giving very practical information mixed with the goal setting element. So this is when you’re going to want to listen to twice. It’s an amazing story. Please share it with anyone you know. Before I throw to Rob in the quick tip, I just want to say, listen closely for the word shmedium, and when you hear it, I want you to go to the comments and tell us what you think about our business idea.

Rob:
That’s a good one. I’ve already put a deposit on a Lamborghini because I know how big of a business this is going to be.

David:
Yeah. So let’s bring us in today’s quick tip. What do you got for us, Rob?

Rob:
Buy nice and not thrice. Comes after twice. If you want to know what this means, you’re going to have to listen to the episode because we get into the philosophy of buying quality things.

David:
Absolutely, and that’s all we’re going to say. Listen more to understand why that can be beneficial in your business. Very powerful stuff though. All right. Let’s bring in Brittany.

David:
Today’s guest is Brittany Swait. Brittany has been investing for only three years. She currently owns 59 units as of this week. She added a few more since the time we first met her. She’s investing in Omaha and Miramar Beach, Florida. She loves watching basketball much like me, especially when it gives her an excuse to travel to a game and get short-term rental ideas from wherever she stays. Brittany, welcome to the BiggerPockets Podcast.

Brittany:
Thank you guys for having me.

David:
Yes, it is our pleasure. So before we dig into how you’ve accumulated such a impressive portfolio in a short period of time, was there a specific moment when your why got crystal clear for you? Can we start with that?

Brittany:
Yeah, for sure. So 2019, I was having some health issues, went into the hospital, had a surgery, came home. I was diagnosed with cancer. So came home. My son was about five at the time, and he wanted to learn his bike, learn to ride his bike. So I was really in an emotional state of I didn’t know what my future held, if I had a future, and I just felt really sad. So I said, “I’m going to give you 100% of my attention.” So I shut off my computer and my phone, nothing at that time mattered except for watching my son ride his bike. So we did that. We sat out in the front yard for about six hours, and I realized that was the first time that I had ever in my adult life disconnected from work, really. I had my first daughter at 19, and so since then I’d really been in survival mode instead of really living a life and thriving. So that was my, I guess, light bulb moment, really.

David:
Well, that’s pretty powerful. If you had to say what was stopping you from disconnecting, was it just everyday life stuff? Was it work? What was keeping that moment from happening before it did?

Brittany:
I always wanted to be the best, and I was really good at work. So I think we as mothers have this mom guilt. No matter how good or bad of a mother we are, we never feel like we do enough, but with work, I always felt like I’m successful. I can see it, I can see the numbers, I can see the promotions, I could see all that and I could feel it. So to me, it was just easiest to give my energy and attention to work because that’s what made me feel good and feel successful.

David:
Yeah, I can relate to that quite a bit.

Rob:
What was work, by the way, just so we understand what your career was at that time?

Brittany:
Yeah, so property management. At that time, I had been in it for about three years.

David:
There’s always something to do in property management. There’s never a time where you’re like, “I just don’t know what I could be doing right now.” So I can see that that would become easily become addicted. Then you measure in the dopamine of checking boxes and knowing you’re being productive, which all of us have. It’s like it’s very hard for those of us in this industry to have a day go by where we’re like, “What did I produce? What did I get done?” If there’s nothing there, then you just get this withdrawal feeling of you didn’t get any dopamine. There’s always something to do within the property management system. I can see that. Did you have a childhood or early years where you felt like you weren’t good enough for certain things and then when you got a taste of being good at something, you’re like, “Oh, I love this and I just want to keep pursuing it”?

Brittany:
I think just as a awkward teenager, I don’t know if everybody feels that, but I did, I did also take the test that tells you about your personality, and my number one characteristic is competition. So after I found that out, it all made sense. You like to do what you’re good at and you don’t do what you’re not good at. So really at that time I said, “Well, that makes sense. I know that I’m good at this so that’s why I enjoy doing so much.”

Rob:
Okay. So you’re a mom and you’re sitting on the step there watching your kid ride his bike, learn how to do all that, and you’re a property manager. I’m sure there’s a lot going on, but were you really loving being a property manager? Was that something that you always knew that you wanted to do or is that something that you just found yourself in organically? Was it an opportunity that just popped up randomly?

Brittany:
Yeah, it was a really random opportunity. So before that, I was a stay-at-home mom for a couple years, but I was in management prior to that. So I had just filled in. My cousin worked at this property management company and he was going to be out of town, and so he said, “Can you sit in on this meeting for me?” and I did. Long story short, the owner ended up bringing me on in the leasing department, and then I, in probably six months, ended up taking over the entire company, so overseeing all of operations for leasing, bookkeeping, and maintenance, and our construction crews.

Rob:
Wow, okay. So yeah, going back to when David was joking and saying, “Yeah, you’re never really bored in this.” Sounds like you probably weren’t. So were you loving this? Now you obviously have a portfolio that we’ll get into in a second, but is it the same grind property managing for someone else as yourself?

Brittany:
I always had a weird pride of ownership even though it wasn’t mine. I felt like I treated the company as it was, and so I loved it. I probably worked 60 to 80 hours a week for the first three years. It wasn’t until that moment when everything happened with my health that I said, “If something were to happen to me, if I weren’t to make it past this point, all I could say is that I spent the last three years of my life contributing to a company that is not even mine, number one, and number two, I have nothing after this.”

Rob:
Yeah. Do you feel like during that time, was it hard to stay positive? Are you a naturally positive person? I mean, you said you’re competitive and you always want to be the best. So was that behind any of this? Tell us a little bit about the mindset as you started to think about some of these changes in your life.

Brittany:
Yeah. So initially, I think anybody that’s diagnosed really at the beginning, there’s so many unknowns. So you lean on your doctors and you say, “Can I make it through this?” and they tell you the data. The data doesn’t make sense to me. So I said, “Well, I’m not dying. I’m going to make it through this.” So I would go to treatment and the whole time in my head I would be saying, “You’re fighting this. You’re fighting this. You’re going to make it through.” Ironically, I went through treatment. They expected to me to have another surgery to remove the tumor, and the tumor was gone when they went in there.

Rob:
Wow, that’s amazing.

Brittany:
So I said, “I won.” So my competition really came out at that point. I said, “Well, I won beating cancer.”

Rob:
Yeah. That’s amazing. Well, first of all, congratulations.

Brittany:
Thank you.

Rob:
I mean, we can say you’re competitive, and it sounds to me, really, you’re just a fighter, right? You take on things head on, and obviously, that comes into play as you started to get into the real estate world, you’re like, “All right. I’m managing for someone else. It’s time for me to do my own thing and build my own legacy.” So how did you and your husband evaluate the decision to leap into real estate and to actually drop the stability of your property management gig?

Brittany:
I was overseeing the actual portfolio. So I would see all the numbers and I would always say, “This seems really inaccessible. It seems so far out. You have to have a lot of money to get into this,” and we just didn’t. So we said, “How can we?” So we didn’t know. We ended up reading Rich Dad Poor Dad, and that lit the fire under both of us. So we looked at where we did have money. We had bought our house a few years before this. So we went and saw how much equity we had in it. We looked at my husband’s 401(k) and said, “Do we have options that we can just drain this?” Then my husband started a second job. He started a company so that we just had all this extra income that we could just throw towards investing.

Rob:
Really cool. Really cool. So what was the first property that you got into from this? Obviously, I’m sure you’re evaluating a lot, you’re researching a lot of options in front of you. Tell us about the first deal.

Brittany:
Yeah. So my closing agent that my boss had worked with for a long time had closed a deal and she had contacted me and said, “Hey, I have this landlord. He’s a doctor. He doesn’t have time to landlord anymore. He just wants to get out of it. He’s got a couple deals. Do you want me to send them over to you so you can look at them?” I was like, “Yeah, they’re probably going to be too expensive.” So she sends them over and I see a $80,000 asking price. I said, “Okay. 80,000? That seems attainable.” So I ran the numbers and I ran the numbers again and again and again because I said, “This can’t be right. He’s asking 80,000, but the current value of it is about 150,000.”

Brittany:
So to me, it was a no-brainer, and I said, “We have to buy this property. There wasn’t a if. There wasn’t a maybe.” I said, “What do we have to do to get this?” So we went and got a HELOC on our house. We drained my husband’s 401(k), and then we took all the of our savings that we had and scrapped it together and had … I don’t know how we came up with it all, honestly.

Rob:
Pretty low stakes all around sounds like.

Brittany:
Yeah. We just threw it all in.

Rob:
You’re jumping into the real estate pool at this point. Did you have a goal? Did you set a goal initially or were you just like, “I’m just going to buy a house and see where it goes”? Did you know that you wanted to build an empire?

Brittany:
So I just found our goals from 2019, and our goal was that we wanted to buy three rental properties in a year, and we wanted to own one million dollars in five years and five million dollars in real estate in 15 years. So that was our goal at the time.

Rob:
Did that seem impossible at that moment where you’re like, “Ooh, I don’t know if we can hit it,” or were you, I mean, obviously, we know you’re a fighter here, so was that like, “No problem”?

Brittany:
Yeah. It seemed attainable. So I didn’t want to create a goal that we wouldn’t be able to achieve and then feel discouraged. So I felt like it was safe to set that three-property goal.

Rob:
David is the master goal setter. We did a podcast not too long ago where we had to list out our goals. He’s like, “What are your goals?” and I was like, “I don’t know. I think, I don’t know, want this,” and then I was like, “What are your goals?” and he had 15 written out.

Brittany:
A scroll?

Rob:
Yeah. I was just like, “What?” He’s like, “I’ve got nothing prepared,” and the scroll just goes out infinitely and really inspired me to start writing it down. I think it’s good to have a small goal and a big goal the way that you did it. You had your one million dollar goal and your five million dollar goal. One of them is definitely obtainable. The other one obviously scarier, but as soon as you knock out that first goal, the next one seems pretty easy. So that’s how I approach all these things. I’m trying to goal set more and more.

David:
It’s funny you mentioned that because I just got back from Scottsdale two days ago at our house, Rob, doing a goal setting retreat. Apparently, you inspired this because you were like, “David is so good at setting goals.” I was like, “I didn’t know it was that good.” I need to share the gospel of goal setting with more people. So we had everybody out there and we went through goals and we incorporated them into business in other parts of our life.

David:
What came out of that event was this revelation to pretty much everyone there that goal setting is not as simple as write down what you want to accomplish. You have to incorporate it into, “How do I want my life to look and what kind of a person do I want to become?” because the best goals will require more of you than the person that you are right now. They force you to grow personally in order to be able to achieve things.

David:
Now, Brittany, I’m sure that that was a part of your journey. You started off working for someone else’s company, doing a great job, getting a lot of accolades. It was probably personally fulfilling, but it was taking away from the time with your kids. Cancer hits, and obviously, that’s going to shake everything up. Now you’re asking different questions, “What do I want my life to look like? Who do I want to be?” which is funny because that’s what comes right before we set new goals. So did you incorporate that into your goal setting? Was that more of a subconscious thing as you sat down and decided what you wanted your life to look like?

Brittany:
Yeah, I think. So I had read a book and I can’t remember what it was, but it basically says you imagine your life or you take what you want your life to look like and then you work backwards from there. So I said, “What do we want our lives to look like?” At that time, I said I want to buy an RV and be able to just travel wherever I want. It has since changed. I do not want an RV, and I do not want to take long road trips across the country, but seeing we want to move to Florida in a few years, and I said, “How do we do that?” and we just worked backwards from that point.

David:
I’ve always wondered if people … It’s very hard to come up with goals if we’re being honest. When you sit down, when I joined GoBundance, that was the thing that they made us do. They’re like, “What are your goals?” It was like I don’t think like that. I don’t think about what are my goals. I just think about how do I get through tomorrow. I didn’t know what my goals were, and you don’t realize how hard it is until you actually have to come up with them.

David:
Then I’ve noticed everyone has the same goals. They always involve the word freedom. There’s always an RV travel across the country, which is funny because I never as a kid was thinking, “All I want is to have an RV and to go to Omaha, Nebraska,” but yet that pops up. There’s always a beach somewhere like, “I want to be on a beach contemplating life,” which that’s like a vacation, right?

David:
I think it’s so hard to come up with goals that we just think about a vacation we would take and we’re like, “That’s what I want my whole life to be. I want my life to be a vacation,” and until you actually get real detailed about what you’re looking for, your reticular activating system, your subconscious does not know what you want your life to look like. It’s incredibly hard. So I applaud you coming on here and saying that you took on that challenge because that’s what you got to get figured out first, and then the real estate, the way you build up, will adapt to what you want those goals to be, but none of us are thinking about goals. We’re just thinking about the next unit, the next unit. Make the list, check the box, move on, get the dopamine hit, very similar to how you were living your life before.

David:
So you got that first deal, and I understand that you used the BRRRR method to stack from there. Walk us through the number of units and the cash flow that you added on every year using that strategy.

Brittany:
Yeah. So in our first year, we brought on two properties and we cash flowed just $3,700 a year. Year two, we had 10 and we’re cash flowing $53,000 a year.

Rob:
Whoa. That’s a big difference. Okay. It’s $50,000 difference. Okay. Just making sure.

Brittany:
Yeah, which we actually pivoted our strategy a little bit with that, but in our third year, this year, we’re at 59 properties and we’re cash flowing $200,000 after all of our expenses.

David:
Okay, and that was after year one. Now, was it all just BRRRR? Is that how you got there?

Brittany:
Yes, all of those were the BRRRR method. We did have one fourplex that we were long-term renting all four units, and I got weirdly scared after it didn’t rent after two days, and so I said, “Let’s furnish this thing and see if we can rent it another way,” and so we did, and that’s the big jump in our cash flow is because we have two midterm rentals in that fourplex now.

David:
Okay. So that was another unexpected blessing where it’s funny that you freaked out after two days. That’s solely a property manager, “I did such a good job. It should be booked right now.”

Brittany:
“Nobody wants this.”

David:
Yeah, “I’ve done something wrong. Change right now. Oh, wait,” which is the property managers I get are eight weeks later, “Where are we at with that? Oh, yeah. No one’s rented it. I forgot about it.” I would much rather have you working for me. So what was the paradigm shift when you went to, “Oh, I can furnish them and I can rent them out faster and for more money”? How much did that impact your strategy moving forward?

Brittany:
So I would say it’s huge. So now we look at, “Is this good for a long-term rental?” So everything that we buy, we want it to also work long-term. The midterm market is becoming really saturated where we’re at so I want that to fall back on as a plan B, but really anything near the hospitals, we found rent long-term or medium-term.

David:
Yeah. Basically, here’s what I’m hearing is you went from analyzing a property based on where a long-term tenant would want to live, which is fairly simple. I mean, that strategy is very easy. It’s why beginners start there, especially small multi-family because you take the house and then you look for what it would rent for, and you run your numbers. With medium-term, with short-term rentals, you don’t start with a property, you start with a location, then you look for the property in the location, then you try to determine what it would rent for. So it’s like a third dimension that gets added into this. I noticed that the more complicated the process becomes, usually the more lucrative it is, the more simple that it is, the easier it is to get into, but the harder it is to make money. Is that a similar pattern that you notice when you switched strategies?

Brittany:
I did, yeah. So I’d say your long-term rentals, they’re just easy. I mean, you can analyze them in just seconds, really. You type everything into your calculator, but you go to the medium-term and you say … Number one, it’s not just your purchase price. You’re looking at furnishing it, and that was a big mistake that we made at the beginning. I thought, “Give me two grand. I can furnish this thing,” and then I was $5,000 in the hole and 75% done. So making sure that you take everything into account when you are buying the property and not just your purchase price and your rehab.

David:
Rob can spend two grand on the throw pillows that go on the $9,000 couch.

Rob:
That’s a little hyperbolic, but I have been known to walk out of world market having spent a thousand dollars on throw pillows and fake plants.

David:
Oh, yeah, quickly.

Rob:
It’s actually pretty spot on.

Brittany:
Yeah, it’s so quick, but that’s my favorite part of it is the design part. So we can go in and we rehab our long-term rentals, so it’s all the same finishes, paint color, light fixtures, tile, and then we go into these, and that’s when I really get to have some fun. My husband’s always saying, “That light fixture’s expensive,” and I’m like, “Well, remember the rent though is going to be triple, so it’ll make up for it.”

David:
I make fun of Rob for this all the time. I bust his quaff about it, but the reality is I’m jealous because I am handicapped when it comes to design. Okay. I’m like a dog. They’re colorblind, right? I just don’t know. Until I’ve seen it put together and I can tell what it looks like, it is very, very, very difficult for me to figure out any kind of design element. So part of this is probably passive aggressiveness on my behalf, and I’m jealous.

Brittany:
Leave his throw pillows alone.

Rob:
You leave them out of it.

David:
I can understand the big picture of real estate very well, but when it zooms in, I’m like, “Enhance, enhance,” and there’s no enhancing. My software doesn’t work that well. I can’t actually see where I’m getting at.

Rob:
It’s because you need a keyboard that’s really loud and then you say enhance and that’s how it’s like, “Enhance.”

David:
Oh. See, it’s your background in marketing that will help you solve a lot of these problems.

Rob:
That’s right.

David:
We all did benefit from your design expertise in the Scottsdale house, so I appreciate that. People give me credit for it. They’re like, “Oh, my God, David, you designed it so beautiful,” and I’m like, “Yeah, I did. Just don’t ever ask me to do that in front of you where I would be exposed.”

Brittany:
Always take the credit.

David:
Yeah. So I love … Brittany, one of the things that Brandon and I used to say was, “Follow your fire,” okay? It’s like the passion you have because real estate is not a thing, it is a accumulation of a lot of things. As we’ve mentioned, real estate is an entire economic driver. There’s so many jobs within real estate. There’s so many strategies to put into it. You got to find the part of it that you enjoy doing. It sounds like for you, the design element combined with the bargain hunting, combined with your property management, understanding of where to look and what to do, really, you went from just working in property management knowing the fundamentals to scaling incredibly fast. Do you attribute some of that to the fire that you found in that space?

Brittany:
Oh, for sure. That’s probably the number one motivator. So a lot of times I’ll say, “Hey, let’s just stop buying and let’s just live off our cash flow and see what that looks like,” and then we’ll finish one rehab and I’ll say, “Oh, I found another deal,” because now I want to design another one. So I feel like it does have that addictive-

Rob:
Oh, yeah, no doubt.

David:
It needs to because we spend so much time and energy doing it. If Rob did not have that idea for design and flare and he could see things from the perspective of the person looking at Airbnb or VRBO where he’s like, “Ooh, that would stand out,” he wouldn’t be able to do it well. If you didn’t have your background in it, Brittany, you wouldn’t be able to pick the right houses, which is setting me up to my next question here now that we’ve gotten into why the fire’s important. How are you finding these deals? I think the people who don’t understand the fundamentals of the asset class you’re trying to get into, they just grab random houses off of Zillow and they run it and they say, “Oh, it didn’t work. Let me just keep trying.” It’s like the throw spaghetti at the wall method hoping that one of them sticks versus when you really understand what you’re trying to accomplish, you have a specific place you’re going to find deals, a specific location, a specific type of asset. You don’t waste all that energy and time. So what is your system like for identifying a potential problem and then how it’s analyzed?

Brittany:
Yeah. So my two best deals have actually been found on Facebook.

Rob:
Oh, it’s unconventional.

Brittany:
Yeah. We saw one of them posted and I saw the address. I did a quick Google search and I said, “Oh, this is three minutes from the hospital.” Ran my numbers. We ended up getting that one. Then our second one, my realtor had posted basically, “Hey, I’m looking for a small multi-family. Does anybody have anything?” This owner reached out and said, “I don’t have it on the market, but I’d be open to looking at selling it.” So we worked out our deal that way. So Facebook has been my best friend for deals.

David:
So when it comes to Facebook marketplace, are you starting with the location? What are you doing when … How are you using Facebook? How do you know which properties you want to be targeting there?

Brittany:
So I don’t necessarily go to Facebook and look for properties, but a lot of times people will post them in the Facebook real estate groups. They’ll throw their deal out there and you’ll have a hundred people say, “Send me more information.” If I see the address and I know that it’s in an area that I’m interested in, then I’ll run it, but that’s really how things are coming up for me. I’m not looking for them.

David:
So you are starting with location.

Brittany:
Yeah, always location, yup.

David:
So for someone who wants to use your Facebook marketplace marketing strategy, how do they determine what a good location would be for a medium-term rental or a short-term rental?

Brittany:
So I love anything within 10 minutes from the hospital. We used to do short-term rentals, but then I said I’m sick of having to have my phone on in the middle of the night just in case. So that’s why we moved to the medium-term rentals. So yeah, 10 minutes within the hospital and it has to have at least one bedroom. That’s really my minimum criteria.

David:
Do you notice any additional benefit as putting your property manager hat on to having two bedrooms or three bedrooms over one bedroom, specifically in the medium-term rental space?

Brittany:
I would say two bedrooms, for sure, because there’s a lot of people that travel together. I’ve only had one group of three that’s traveled together. Everybody’s usually in pairs or solo. So I do like those two bedrooms, especially, but if you look at the price that you get for rents for a medium-term one bedroom versus long-term, it’s triple of what you get. So I love the one bedrooms also.

Rob:
Yeah. Well, for reference, this is usually the … It’s a spectrum, obviously, but just like David said, the amount of work that you put into something is going to be correlated to the return. So for using long-term rentals as the baseline, that will be the smallest return. Then it’s medium-term rentals and then it’s short-term rentals. The way I like to analyze it is medium-term rentals typically are going to bring two to three times what you would make on a long-term rental, and then short-term rentals are three to four times what you’re going to make on a long-term rental in terms of gross revenue. So when you can find a medium-term rental that is three times what you’re going to bring on a long-term rental, you hit the jackpot because you’re actually not making that much less than if you were doing it as a short-term rental and you end up working a lot less too.

Brittany:
I’ve noticed that there’s way less wear and tear. Medium-term you look at, if you compare it to long-term and the short-term, I mean it’s perfect. They come home, they sleep, they eat, they go to work, whoever is renting it. So you don’t have the same wear and tear that you do with the long-term or the short-term.

David:
Yes. I heard an argument about this online one time where someone was saying, “I don’t like short-term rentals because you have all these people coming in and out of your house increasing wear and tear.” I thought, “No, I bet you it’s the opposite,” because when it’s your house, you just beat the crap out of it, but when you’re staying in it for a couple days, you don’t really have time to get comfortable enough to destroy it like you do your own thing, right? So I would bet you that there’s less wear and tear and you catch the deferred maintenance much quicker before it becomes deferred because as Rob knows, you get that complaint every time there’s a tiny little problem, whereas your tenant will let their shower slowly flood the entire bathroom for three years and you won’t hear about it until your subfloor is completely rotted out.

Rob:
That’s right.

David:
So although that is a pain in the butt that you’re getting all this correspondence, it will lead … It’s like you go to the doctor every four days.

Rob:
That’s true.

David:
Your health’s not going to get that far out of out of hand if you’re constantly getting those checkups, even though it’s a pain in the butt to go.

Rob:
Yeah, I’m thinking through it. I mean, medium-term rentals have actually been harsher on my properties in short-term rentals, but it’s because I didn’t have a good system in place. So whenever someone would book for three, four, five, six months, I’d be like, “All right, great. Set it and forget it,” right? They’re going to be in and medium-term rental tenants typically don’t bother me, but the thing is, just like you said, they live there, they use it. They may not be clean, they may not be organized, they might be messy. So whenever they would check out at month six, my cleaners would basically call me crying being like, “Oh, my gosh, it is nasty in here.”

Rob:
So ever since then, we’ve instituted a new policy where for every month that the cleaner stays at my property, we will charge a cleaning fee for every single month, and we add that to their total bill. That way, we can get our cleaner in there, some eyes on the property, they can let us know if anything looks weird, and that way, whenever the cleaner comes on month six or whenever the people check out, it’s not really a deep clean as much as just a regular turn that you would normally have on the short-term rental platforms.

David:
Yeah, that’s another thing to consider with these. Is there a name for short-term rentals and medium-term rentals combined?

Brittany:
Shmedium?

Rob:
The hybrid, shmedium.

Brittany:
Shmedium term.

Rob:
Sure, it’s a shmedium.

Brittany:
Shmedium.

Rob:
Yes, shmedium-term rentals. I like it.

David:
The shmedium industry, that’s exactly right. In traditional real estate investing where you have a long-term rental, it’s funny because we never … Long-term rental wasn’t even a thing. It was just a rental, right?

Rob:
Rental, yeah.

David:
The problems would come from a plumbing issue or a roof leak or a door hinge, it was always something with a property itself. So it was not usually as expensive, and if you did have to dump a lot of money into fixing a problem, it increased the value of the property in some way. So there’s an issue with the plumbing, and so you have to go rip stuff out and fix it, but then you put in better cabinets when you rebuild it or something.

David:
With the shmedium rental industry, you’re replacing a couch that you just spent $3,000 on six months ago. Let’s say you spent 50 grand to furnish something. That is not the same as spending $50,000 on the property to remodel a kitchen, to remodel a bathroom. That actually increases the value of the asset.

David:
So that is a thing that’s good to highlight to people because when they’re first getting started, I think they just think, “Oh, I’m dumping this much money into getting it going.” They don’t realize that much of that money you’re going to have to dump it again depending on what you spent it in, spent it on. My last question before we move on because I really want to hear more about the BRRRR strategy and how you’re doing it is how concerned are you about oversaturation in the medium-term rental space because it is the bell of the ball these days in real estate investing.

Brittany:
Yeah, I don’t love it. So not exciting because I don’t like the competition out there, but all of our properties that we have would work long-term for long-term rentals. So I mean, it would be less cash flow, but that’s always our plan B. We do provide an amazing product and we have multiple properties. So if something doesn’t work out dates wise or something for somebody, we do have other properties that we can put them in. So that has worked out really nice.

Rob:
I have followup question on this, speaking of creating your own competition. Can you give us any tips for how you’re actually getting some of these medium-term rental tenants? I think that’s probably the question that our audience screams at the speakers every time we talk about it. They’re like, “How do you find the tenants?” Are you just getting them on Airbnb? Are you reaching out to hospitals, Furnished Finders? What’s your tactic?

Brittany:
Yeah. We do everything on Furnished Finders, Furnished Finders and word of mouth. So we’ve had a couple referrals from current nurses that have referred the next round of people, and we found them that way, but Furnished Finders has been our biggest go-to. It’s not always people that you get leads from. I have tons of people call me or text me that they found our listing there. One time we got somebody from Airbnb and they booked through Airbnb for 30-day stay, but we don’t do much on the Airbnb platform anymore, just the Furnished Finders.

Rob:
That’s interesting. I exclusively, for the most part, I would say almost every single, I think every single medium-term rental tenant I’ve had has come from Airbnb. I’ve never actually had any luck on Furnished Finder, but admittedly, I’m not a Furnished Finder nerd. I don’t know the platform. I haven’t gone in and optimized it and all that stuff. So yeah, I’m more of a Airbnb guy for finding all my things, but I have heard really great things about Furnished Finder, and I’d like to put more on there this year. So maybe I’ll hit you up for some tips.

Brittany:
Well, it might also be the area. I know it’s popular here, but if you talk about other states, it might not be as much.

David:
I was thinking the three of us need to create a new platform called shmedium.com, where we advertise short-term and medium-term rental properties.

Brittany:
I actually sent the paperwork to my lawyer as you guys were talking, so I got it trademarked and we’re good.

Rob:
I actually bought the domain.

Brittany:
Oh, you bought it already? I forgot to hit submit when I … Yeah, I was on there. Dang it.

Rob:
Yeah. Actually, it was schmedi.um. That’s the only thing that’s available.

Brittany:
.org.

David:
All right. So Brittany, getting back into your journey here, by the way, thank you for the advice you gave us specifically on this industry. I think for someone who’s worked in property management as long as you have and is managing your own rentals, that’s valuable, valuable insight that most people won’t learn until they’ve made a whole lot of mistakes trying to figure that out. You came into real estate with a leg up from your competition from the previous experience you had as a property manager. What are some tips that you would give to new investors that are trying to price out a rehab? This is a question we get a lot, “How do I determine how much a rehab’s going to cost?”

Brittany:
So I go into properties looking at the major things first. So I look at roof, HVAC, foundation, concrete, my big stuff, plumbing, electrical. If I check too many boxes and the numbers won’t work, then I say, “I’m done looking at this one.” So I’ve got the numbers pretty good. We’ve been working with the same crews for seven years now. So I can look at a house and say, “$5,000 roof, $5,000 driveway, $6,000 foundation.” Whatever it is, I add those up real quick while I’m already past my budget. So there’s no sense in looking at this anymore.

David:
That’s smart. So basically you’re saying you got to eat all your vegetables before you get to the dessert. So if the vegetables are going to make you full, then don’t even start because you want to have some room left. So looking at the roof, the HVAC, the concrete, nobody gets excited about that part. So if that’s taken up the whole rehab budget, just stop right there, this isn’t the right deal for you.

Brittany:
Yup, done, and a lot of that stuff you can see from listing photos or whoever’s sending me the deal, I’ll say, “Hey, send me pictures from every side of the house exterior and then send me a quick video walking me through it. I want everything in the basement. Show me the foundation, furnace, hot water heater, your plumbing stack, the electrical panel,” and I can really just say yay or nay at that point. If it looks good, then I’ll go hands on and look at it myself a lot of times.

David:
That is really good, and I think that advice is incredibly important in today’s market because it’s making a comeback. Years ago, back in my day, we actually cared about things like concretes and plumbing, and the market got so hot that that wasn’t … It didn’t matter, right? “Oh, it needs a new roof. Oh, it’s only 15 grand. It’s going to be worth 25 grand before the escrow’s over.” Who cares, right? Real estate really did change, and I can’t even criticize people for doing it that way because you did make, depending on the market, right?

David:
Where I am in California, you might make $250,000 over four years of owning the property where that $15,000 roof wasn’t as significant, but with what we’re seeing with the market slowing down, rates going up, values are not increasing at the level that they were, I really do think that buyers are becoming harder and harder to find in certain locations, which means sellers have to give concessions that they did not have to give for a long time. If you’re selling a property that’s in wonderful condition, you’re probably going to get what you want, but if you got some warts in there, if you got some stuff that the makeup’s been covering and the buyer goes swimming with you and the makeup comes off and they see what they’re really working with, you can’t sell a house that’s got foundation issues anymore. If you’ve got plumbing leaks, it is expensive. There is a lot more room to negotiate. So are you seeing the same thing as you’re scaling to 59 units in three years that you have more negotiating power over these issues than you did before?

Brittany:
Yeah, definitely. Even when the market was really hot, a lot of our stuff was off market. So we would be aggressive with our offers, but we always buy everything with no repairs, no inspection. My biggest thing is I just want somebody to walk it. So if it’s an agent or my husband or whoever it is, I want somebody to have eyes on it that I trust that can say, “This is what I saw.” They didn’t skip over this corner when they were sending me a video for it, and we missed out on something, but we did. We were doing flips a couple years ago, and I would say the huge difference that I’ve seen is roofs. Nobody was asking for a roof replacement. I mean, you could have a hole the size of a raccoon and they would look past it and pay you 50,000 over ask price, and now those things are absolutely being asked for now.

David:
So we’ve got assessing the major costs, which I added are the non-sexy things, but that’s why you got to look at them because they’ll be easily overlooked. Then I really like your advice of, “What can I do? Where can I save money? Does this fall within my wheelhouse of repairs I could make?” So if you’re a plumber and the house has massive plumbing issues but nothing else, maybe you lean more towards that property because you have a competitive advantage, and then what do you have next?

Brittany:
So when I look at the major stuff, I say, “Is this going to last me at least three years?” If not, then I’m replacing it with my rehab. So all of our properties we rehab at the beginning before we rent them out. So we’ve looked at what are our major things that give us problems. So galvanized plumbing is always clogging our drains, clogging the little screens in your faucet and they break when you try to make repairs. So that’s one thing that we always do. If there’s galvanized plumbing, we’re always replacing it. Then drafty windows was another thing that we heard a lot of complaints from tenants. So that’s a big thing that we look at.

David:
So the tenants were complaining that the windows were too cold, that too much cold air was coming in?

Brittany:
Yeah. A lot of our houses are over a hundred years old, so you’ll have those old single pane windows that go up and down and they’re held with weights on the side, and people hate them. They don’t stay up. You got to put your remote there to hold it up. So we just replace them. It’s not as expensive as most people think when you’ve got your crew doing everything else while they’re in there. So it’s a no-brainer at this point.

David:
That is another thing as a real estate broker selling houses for a long time. Windows being a problem was not even something that would be considered. Sellers just were not going to give you anything for that. You had me thinking. How much of this stuff that typically every 10 to 20 years a homeowner would be forced to replace things like windows and roofs and plumbing that because we’ve had such a run in real estate, nobody was spending money to fix these things up is now all going to be starting to become a part of the process because the prices are not exploding as fast as they were? I think being extra diligent at looking at what might need to be replaced is going to become a bigger part of investing than it was in the past. Rob, what’s your theory on this three-year timeframe? When do you think something should be replaced?

Rob:
Well, the old Robuilt adage of buy nice, not thrice, and this really does apply to everything. I mean, obviously, I’m coming at this for more of the furniture side of things, especially in medium-term rentals more than short-term rentals. When you buy something that’s not going to last you, let’s say even the three years that you’re talking about, it’s a really big inconvenience because a lot of times what people do is they’ll buy the cheap thing, cheap thing will break, and now they have to hire somebody to come and get rid of the thing that broke and replace it and assemble it, and because people are cheap, they’ll say, “Oh, you know what? The chances of it breaking in probably pretty low,” and then they go and they buy the cheap thing again, it breaks. Got to get someone to go and toss it in the trash and replace it.

Rob:
Then on the third time, they’re like, “I’m tired of doing this. I’m just going to buy the nice version of this,” and that’s whenever they’re out of the problems and it’s like, “Oh, if they had just done that to begin with, they actually would’ve saved themselves so much headache and pain along the way.” So I imagine that fixing up homes and renovating is probably pretty similar to that simply just because, yeah, you get what you pay for basically, right?

Brittany:
Absolutely, and that’s something that we … That’s our guideline for all of our rehabs. It doesn’t matter what area of town, how much we paid. Everything’s getting rehabbed to a high quality. So you’ve got granite and people say like, “Well, you don’t need to put granite in every house.” Well, granite actually saves me money because I’m not putting a countertop that somebody puts a hot pot and burns it. I’m paying 200 bucks every time that I have to replace it. So spend a little bit more upfront and you get higher rents and happier tenants, and you have a nice product, so your appraisal comes back high-

David:
Shows better in pictures.

Brittany:
So we touch every surface of every house that we are in.

Rob:
We just had someone on the show, oh, man, probably in the last couple weeks that said that they renovate their houses to basically be good enough for them to live in in case they ever lost everything and they needed to be able to live in there themselves.

Brittany:
That was Rick.

Rob:
Oh, it was Rick, yeah.

Brittany:
Rick Marin.

Rob:
Rick Marin, yeah. That should be coming out pretty soon if it’s not out yet, but I thought that was really nice because when you think about it that way, you can spend a little bit more, and as notated in the BRRRR Bible written by David Greene, the actual material isn’t necessarily what costs most of the money, it’s usually the labor. So you can spend a couple hundred bucks to get something nicer and it’s not really going to cost you all that much more in the grand scheme of the budget.

Brittany:
Yeah, especially when you’re doing it all at once before a tenant is in there and they’re doing everything. So yeah, I agree with that.

David:
The quick tip to take from this is when you’re evaluating or analyzing what you’re going to buy, “Am I going to buy the $200 one or the $500 one?” it’s not a $300 difference, it’s $300 plus whatever money you’re going to have to spend on labor to replace it, which is what we don’t think about. If you’re going to have to spend 150 bucks to $200 every time you send someone out to go fix the thing that you bought that was cheap, that’s what makes it more expensive. So you’re not just analyzing the cost of the item, you’re analyzing the cost plus the labor.

David:
Then I think granted in general is one of the wonder materials of real estate investing. Like you mentioned, it works at every single area. When you know a person that can install it, granite can be incredibly cost-efficient because the labor itself or, sorry, the material itself is not that expensive, which leads us to your last point here. You mentioned knowing a person that can fix certain things. So what advice do you have about knowing that when you’re buying distressed properties, fixer uppers using the BRRRR method, knowing the right people that can do this work is incredibly valuable? What tips do you have for finding those people?

Brittany:
So I like finding people who can do more than one thing because that’s where we save the most money. So I am finding or we have crews that can come in and paint, refinish hardwood floors, tile, install cabinets. They can do everything as opposed to bringing in a drywaller, bringing in somebody to do the floors, bringing in somebody to do the windows. Just finding somebody who can do it all, that’s where we save the most money and are able to meet our budgets.

Rob:
Does that come into play when you’re working with a contractor? Do you prefer to work with a contractor that has a particular trade? My contractor in Joshua Tree was also an electrician. So when it came time to building the house, he did all the electrical work, didn’t sub it out, and that ended up usually being a cost savings to me in the grand scheme of things. Is that ever similar like that in your scope of work?

Brittany:
Absolutely. Most of our guys are … Well, not most of them, but a few of them are plumbers also. So we get the plumbing done with the rest of the rehab. So that’s really nice. So our biggest tradesmen that we’re bringing in would be if we’re replacing an electrical panel or a roof, which our guys actually can do roofs too. So I would say our electrical is our most expensive tradesmen that we’re bringing from the outside.

Rob:
Yeah, that makes sense. So just to recap here because I think we went through five. One was you assess major cost items first like your HVAC, concrete, roof because basically, if you’re checking all those boxes off when you’re doing a renovation, that means that you’re not really going to have a ton of money for the design aspect and the last 10%, right? So you move on after that. It needs to last at least three years. So whatever you put into the property needs to be relatively high quality. DIY when you can. So if you got to step in and paint the house, you’re willing to do that. Always replace the windows and find a crew who can fix more than one thing. Did I miss anything there?

Brittany:
No, I think you got it.

Rob:
… and seen. I did it.

David:
All right. So that all is information that will make you a BRRRR superstar, which is still a pretty, at least as far as I’ve seen, the most efficient way to scale a portfolio once you know what you’re doing. Now, I will add the caveat. The things that make BRRRR successful for scaling quickly can also cause you to fail quickly. Scaling is not always positive. It just is amplifying how quickly something gets done. So if the plane is rising, it rises quicker, but if it’s crashing, it’s going to crash quicker too.

David:
As a property manager, as a person with experience solving the problems of managing rehabs for your clients, you walked into this with a knowledge base that is going to protect you from making the mistakes that could cause people to crash. So that’s one of the reasons I think that you were likely successful at BRRRR. How did you navigate the seasoning period that it’s become more difficult to get your money out of the deals once the rehab’s completed?

Brittany:
Yeah. We actually work with a local credit union, and we do portfolio loans. So they don’t make us wait that six months to a year seasoning period. They’ll finance us 75% of the appraised value. So we’ve been really lucky to do that. It’s actually our third credit union that we’ve worked with. The first one said that we grew too fast, so they wouldn’t do any more business with us. So then we moved on and we found somebody who would, and that’s how we’ve been able to scale as quickly as we have.

David:
So the credit union isn’t making you wait 12 months before you pull the money out?

Brittany:
Nope. We actually just finished one rehab in three weeks, and we have the appraisal Monday, and they’re refinancing it. So it’ll be five weeks total by the time we sign the papers.

David:
If anyone’s wondering why, it’s because these guidelines for the 12-month seasoning periods come from conventional loans because the broker or the lender who gives you that loan is then going to go sell that on the market as a mortgage-backed security, so there’s a guideline that the person buying the loan says it has to be 12 months before we will refi, but credit unions hold those loans on their own books most of the time. They don’t sell them so they can create their own guidelines. They don’t have to play by the Fannie Mae, Freddie Mac rules, which is why having a relationship with a local lender is so important or in Brittany’s case, having a relationship with several because when you scale as quickly as you did, you can outgrow the shoe that you were wearing and you have to go get a bigger shoe or another set of them. So congrats on there.

David:
For someone who hears this and they’re like, “You know what? I relate to Brittany,” which by the way, you’re very relatable. I think a lot of people are going to feel that. Would you say that property management is a good place for people to start looking to if they want to get started in real estate investing?

Brittany:
So I would say yes. So property management to me was almost … I feel like it was cheating because I could see what other people were doing and learn from their mistakes, other investors’ mistakes and not have it affect my wallet. So it was nice to learn that. You also learn the ins and outs of the management so you decide, “I absolutely could do this,” or, “This is something I would never ever touch. So just let me be an investor. I’ll pass it off to property management,” or you look at it and say, “I want to save some money and I don’t mind dealing with tenant issues, maintenance issues, leasing issues. I can do this myself.” So I would say the biggest part is learning from other investors even when they don’t know they’re teaching you.

Rob:
Yeah, totally. So you’re now at 59 units after closing on 30 this week, which is a relatively large deal, I’d say.

David:
Timely for this podcast recording.

Rob:
It really is.

Brittany:
I did it just for the podcast.

Rob:
I think it’s probably safe to say that draining your 401(k) was probably worth the risk. Seems like you did okay. Can you tell us what’s your total portfolio net worth and what’s your cash flow sitting at today, if you don’t mind sharing?

Brittany:
Yeah. So our total portfolio is worth 5.5 million.

Rob:
Woo! You did it. That was your goal, right?

Brittany:
We hit it. So we’re 13 years ahead of our goal.

Rob:
Oh, my gosh, that’s amazing.

Brittany:
Yeah, five and a half million and we cash flowed 200,000, and that’s after mortgage, insurance, property taxes, maintenance, capex, all that good stuff.

Rob:
So you’re, let’s see, that would be roughly 16, 17 grand?

Brittany:
Yeah.

Rob:
Not bad.

David:
So from 232 a month in a 401(k) to 16 grand a month with all the equity that you’re building, the loan you pay down, the properties going up and potential rent increases, that wasn’t a terrible decision.

Brittany:
No. It’s one we will never, ever regret. Probably best decision of our lives.

David:
Yeah, and you know what I see, Brittany, is you bet on yourself. You said, “I understand property management. I understand real estate. I’m doing this for someone else.” You didn’t get in the victim mentality of, “Well, how come it’s not fair that they’re not helping me with something?” You just said, “I know how to do it. I’m doing it for them. Let me go do it for myself now.” In a sense, you were like a paid apprentice that learned the business, and then you started your own business.

David:
I think this is a beautiful, beautiful, beautiful blueprint for other people that are doing well in the corporate world, they’re doing well at their job, they want freedom. Rather than just saying, “I’m going to quit my job and I’m going to start investing real estate full-time,” you work in real estate, you learn the industry that way, and you make it like this little jump off point in the middle. It’s not quit to W-2, pure real estate. It’s moved from W-2 into a real estate related industry, learn the business like you did, Brittany, and then move into building your portfolio while you’re still doing. It’s a much smoother transition than just going from the spa and jumping into the swimming pool and trying to figure out if you can make it. Do you have any advice for other people who are maybe sitting in a cubicle right now listening to this wishing that they had your life or the steps you’d recommend that they take?

Brittany:
Yeah, I would say just do it. I also feel like people think that once you’re successful, you have to quit everything that you were doing before. So during this time, I’ve kept my job the whole time. My husband’s worked the whole time. We don’t live off the cash flow yet. We reinvest everything. So I would say my advice would be take what you’re good at and do it for yourself because in my job, I was stuck at, “Here’s your salary. You’ll get a raise every year. Here’s your hours.” You’re stuck in this box, but when I do it for myself, there’s so much opportunity for growth that it’s surpassing my salary times a hundred.

Rob:
That’s cool.

Brittany:
Everything that I learned in property management I would say is more than I ever learned in school. This is like my college degree. I regret going and actually paying for college when I could have dived into this first.

Rob:
Sure, but it all led to this, right?

Brittany:
Absolutely.

Rob:
To this moment and to these successes. So with that, I’m just curious. I mean, so much has happened and you’ve crushed every goal and you’re 13 years ahead of schedule with your five million dollar goal. You’ve actually surpassed it. What has real estate allowed you to do? Is there anything specifically that now where you’re at you’re like, “Wow, I can do this thing now because I’ve built something”?

Brittany:
Yeah. Our favorite thing is to just take trips with our kids. We want to give them experiences instead of just stuff. So not having to ask for time off or plotting your days off on your work calendar, just the freedom to get up and go. Last summer, we spent a month in Florida, and that was really our test of can our business run without us being there. So that was a test and we passed it. So I would say just the freedom. So my biggest goal but also the goal that I don’t really talk about because it’s not pretty is my goal is I don’t want to have to set my alarm in the morning.

Rob:
That’s fuzz amazing. Are you kidding me? That’s a beautiful goal.

David:
I’ll say there’s not much more that will increase the quality of your life than waking up when you want to wake up.

Brittany:
When you want to, yes.

David:
When your body is ready to.

Brittany:
Yeah, and I don’t feel like people talk about it. I feel like when you talk about goals, you say, “How much money do I want to make?” or, “Where do I want to go?” or, What do I want to buy?” but honestly, it’s like, “I just want to sleep,” right?

Rob:
That’s not all bad.

Brittany:
I want to wake up when the sun comes up. I don’t want to hear my blaring alarm waking me up in the morning. It’s just that freedom.

David:
I don’t want to feel nauseous when I hear that sound and the first thought is, “When can I go back to sleep?”

Brittany:
Right, counting down the hours, “15 more minutes. Give me some time.”

Rob:
That’s perhaps the most beautifully honest and perfect answer, but honestly, I thank you, Brittany, because you came into this and it all started with you wanting to watch your kid learn how to ride his bike, and now you’re spending vacations for a month while your business stays relatively passive, and now you’ve got bigger goals. I’m excited to see what your next goal is. I know it’s the waking up thing, but whatever that goal in the portfolio is because based on what we heard, you’re going to do it. There’s just no question about it. So I hope that everyone listening here today can listen to this again and say, “All right, I can do it too.”

David:
Yeah, and nice callback to when we talked about how goal setting is difficult to do but it’s so important because that’s a much better goal than I want to travel the world in an RV. I want to wake up when I want to wake up, and you will design the life you want based on real estate to be able to accomplish that. Really, you deserve a lot of credit. I mean, you should be waking up every day feeling like success because you escape the 6:30 alarm clock. Please, nobody tell Jocko Willink that we just described that as-

Rob:
Yeah, I was going to say.

David:
He’ll come after me and I’m not ready for that level of smoke right now, but I do agree with you. I think that that’s very healthy. This has been a fantastic interview, Brittany. I just want to congratulate you on the success you’ve had, as well as the way that you went about doing it. I hope that we stay in touch. For people that want to learn more about your fantastic life and strategy, where can they find out more about you?

Brittany:
Yeah. I’m most active on Instagram. So it’s Destined_To_Wealth.

David:
Ooh, destined to wealth. That’s wonderful. Rob, how about you? Where can people find out more about you?

Rob:
Well, if you want to search for me and see that little blue check next to my name, I’m just going to rub this in your face all day, David, because I know you want the blue check, but I’m now verified on Instagram and now you’ll know that you’re talking to the real Robuilt and not a robot, not robotilt. So Robuilt, R-O-B-U-I-L-T. I’ll never ask you for crypto or Forex and I’ll never message you first. David, what about you?

David:
If people want to find out more about me, they can follow me at davidgreene, with an E at the end, 24.com or DavidGreene24 on all social media, but just be super, super, super careful that you’re making sure it’s spelled correctly. The minute you follow me, you will get a bunch of fake people that will follow you with fake accounts. I don’t know how they do that, what they’re doing to see who followed me. I think there’s a list of followers that maybe they can see, and as soon as someone follows me, they go, “Oh, follow me too.” So look carefully at the screen name.

Rob:
We can just blame AI for everything now.

David:
That’s what I’m … I think we’re all going to start doing like old people blame the TV for making people dumb, “It was the television.” That’s right. All right, Brittany, thank you very much for being here. We’re going to have you back on again sometime soon because this was a fantastic story. Everybody, go check out Brittany’s Instagram and send her a message if you want to learn how to be an awesome possum just like her. This is David Greene for Rob, tell me where you get them Hanes T-shirts, Abasolo, signing off.

 

 

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Inflation breakdown for April 2023 in one chart

Inflation breakdown for April 2023 in one chart


A shopper in Greenville, New York, April 30, 2023.

Robert Nickelsberg | Getty Images News | Getty Images

Inflation in April notched its lowest reading in two years, as price pressures for consumers continue to moderate from multidecade highs and costs for household staples appear to be in retreat.

The consumer price index, a key barometer of inflation, increased 4.9% in April versus a year ago. That is the smallest annual reading since April 2021, the U.S. Bureau of Labor Statistics, or BLS, said Wednesday.

The index also fell from 5% in March, marking the 10th consecutive month of declines.

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“Increasingly, we can be confident that inflation is coming back in” to target, said Mark Zandi, chief economist of Moody’s Analytics.

Inflation measures how quickly prices are changing across the U.S. economy. The CPI measures anything from fruit and vegetable prices to those for a haircut or concert ticket.

Since the CPI reading was a positive number in April, it means consumers didn’t see prices falling, in a broad sense. But it shows the rate at which they’re rising has slowed significantly from the 9.1% peak in June 2022.

Policymakers aim to keep inflation at about 2% a year. It may take another year or so to reach that target, but “we’re definitively headed in that direction,” Zandi said.

Where consumers saw prices fall in April

Where consumers saw prices rise in April

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“It looks like inflation in the [shelter] category has peaked,” Andrew Hunter, senior U.S. economist at Capital Economics, said.

Overall, households are faring much better than they were months ago relative to inflation in staples such as food, energy and housing, according to Zandi.

“Gas prices are way down from where they were a year ago,” he said. “Food prices are no longer rising quickly.”

“And rents are now flat to down,” Zandi added. “Those are the key items in people’s budget and all of them feel pretty good at this point in time.”

Why inflation surged to multidecade highs

Consumer prices began rising rapidly in early 2021 as the U.S. economy started to reopen after the pandemic-related shutdown. Americans unleashed a flurry of pent-up demand for dining out, entertainment and vacations, aided by savings amassed from government relief.

Meanwhile, the rapid economic restart snarled global supply chains, a dynamic exacerbated by Russia’s invasion of Ukraine. In other words, supply couldn’t keep up with consumers’ willingness to spend.

Inflation, which increased in economies around the world during the Covid-19 pandemic era, was initially siloed in categories of physical goods such as used cars and trucks. But the dynamic has morphed.

Now, it’s largely being driven by the labor market, not a shortage of physical goods, economists said.

Increasingly, we can be confident that inflation is coming back in.

Mark Zandi

chief economist of Moody’s Analytics

As the economy reopened after the pandemic, businesses rushed to hire workers and job openings surged to record highs. That demand tilted the job market in favor of workers, who had ample opportunities. They saw wages grow at their fastest pace in decades as employers competed to hire them.

That strong wage growth has nudged employers, especially labor-intensive service businesses, to raise their prices, economists said.

But now, “the earlier extreme levels of excess demand for workers are easing,” Hunter said.

Those labor-market dynamics should continue to put downward pressure on overall inflation.

“The trend from here is definitely looking a lot better,” Hunter said. “I think we’re finally seeing clear signs of progress.”



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11 Tips To Ensure Clear Written Communication

11 Tips To Ensure Clear Written Communication


As much of customer service is now conducted through live chat or social media, ensuring your teams are properly trained on best practices for written communication is paramount to your success. When your staff can not only educate and serve your customers but also connect with them in a meaningful way, you’re much more likely to build a loyal following that will want to recommend you to their family and friends.

According to the members of Young Entrepreneur Council, keeping these 11 tips in mind when engaging with customers in a written format can help ensure your communication is clear, helpful and likely to earn you the trust and loyalty of your customers.

1. Keep Responses Short And Direct

Customer service professionals must fight the urge to respond in a way that sounds like their spoken voice, as it can lead to long sentences, over-politeness and tons of run-on sentences. In a world of hashtags and snappy slogans, it’s best to keep your message short and direct to avoid misunderstandings. Text that takes longer than 20 seconds to read may be overlooked and the main point may get lost. – Heather Francis, Elevate Funding

2. Repeat Customer Requests Back To Them

You should always repeat the customer’s request back to them. Adding a layer of clarity will allow the customer to make corrections if needed. If they have no corrections, you may proceed with understanding their concern correctly. Summarizing the conversation is also helpful. Multiple single sentences are sent in a row with chat messages, so say something like “To summarize your concern…” and then repeat it to the customer. – Mary Harcourt, CosmoGlo

3. Use Tools To Review Your Message

Don’t send anything without reading it and checking for ways it could be reasonably (or frankly, unreasonably) misunderstood. Support yourself with a spelling checker and editor tools. Writing was never a solo venture. It was always done in dialogue with editors. Use tools that help you be your own editor. If something is high stakes—an email to a shareholder, for example—send it to someone you trust. – Tyler Bray, TK Trailer Parts

4. Learn From Past Interactions

Learn from the best practices of past interactions. These real-life examples of effective communication serve as a foundation for crafting clear messages and setting the right tone for various issues in future engagements. I highly recommend reviewing these examples with your team, as doing so will encourage collaborative learning and the development of improved communication strategies. – Alfredo Atanacio, Uassist.ME

5. Send Customers Detailed Guides And Articles

Putting together detailed help articles that you can send to customers to support more technical customer service requests can be useful for maintaining clear communication. Guides can help you provide faster responses (because you won’t need to type out a 10-step process every time) and give customers something to refer back to if the issue happens again. – Diana Goodwin, MarketBox

6. Use Plain Language

Avoid jargon and technical terms when communicating with your customers. Not everyone has the depth of knowledge to understand these words, and the last thing you want to do is make your customers feel dumb for asking something. Use plain language to explain concepts and ideas. – Samuel Thimothy, OneIMS

7. Add Bullet Points To Break Up The Text

Long-form comments are hard to read and easy to misinterpret. Instead, make it simple for customers by spoon-feeding them the main points as bullets. This is also more likely to be a helpful resource for other fans and followers who need information that provides succinct answers and is easy to identify. – Firas Kittaneh, Amerisleep Mattress

8. Leverage The ‘BLUF’ Approach

To ensure clear and helpful written communication in customer service, you should use the “BLUF” (Bottom Line Up Front) approach. In this approach, you present the most important information or solution first, followed by any necessary details. This technique improves the clarity, efficiency and readability of your texts, making it easier for customers to take action based on your response. – Vikas Agrawal, Infobrandz

9. Standardize Your Processes

It’s essential that you come up with standard operating procedures and train your teams on those to streamline your communication. The problems may vary for different companies, and so do the solutions. So, identify the issues, brainstorm to find the best possible solutions and standardize your processes. This keeps loopholes at a bare minimum and helps ensure great customer service. – Stephanie Wells, Formidable Forms

10. Ensure You Have Real Humans On Standby

Make sure to have a live human available if you are using any chatbots. While chatbots can answer basic questions and address concerns rapidly, sometimes a customer has a specific question and would like to talk to a representative. Make sure to establish regular hours when representatives are available and respond to any weekend or holiday messages. – Duran Inci, Optimum7

11. Send A Record Of The Conversation Afterward

One way to ensure you’re effectively communicating with customers is to send a record of the conversation to their email addresses. Many consumers can feel like a representative wasn’t clear when they just don’t fully remember the conversation. An automated log of the interaction can clear up confusion and make it easier for customers to find value in your advice. – John Turner, SeedProd LLC



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3 Rentals (While in College!) and Turning a Horrific House into a Cash Cow

3 Rentals (While in College!) and Turning a Horrific House into a Cash Cow


Buying your first long-term rental property sight unseen? What could go wrong? While alarms might be going off in your head right now, they weren’t for today’s guest. What seemed like the “perfect” rental property turned into a major headache once he arrived to check it out four months after closing.

Welcome back to another episode of the Real Estate Rookie podcast! After completing multiple wholesale deals, Hudson Jump’s real estate investing journey was off to a blazing start. He figured it was time to try his hand at long-term rentals next, and it wasn’t long before he came across a potential cash cow! Unfortunately, when Hudson was finally able to check out the property he had bought, the door had been kicked in, there was trash up to the ceiling, the toilet and shower were missing, and there were squatters on the property!

While this nightmare scenario would have been enough to make any real estate rookie throw in the towel, Hudson instead found a partner who was able to help him salvage the property and transform it into a rental that generates $1,400 monthly cash flow! If a bad deal has ever caused you to question your future in real estate, tune in to hear Hudson speak on the advantages of partnerships. As always, our hosts Ashley and Tony are here to help as well—offering invaluable advice on buying properties sight unseen, leveraging direct mail, and the value of building lists!

Ashley:
This is Real Estate Rookie episode 285.

Hudson:
I swear to God, I was just so brutally honest. I was like, “I am screwed. I need your help. You can have the property if you want. I’ll just eat the holding costs. I’ll lose whatever.” She was like, “Settle down. We just met. What are you talking about?” I met her there the next day and she was like, “Yeah, man, you messed up.” I was like, “Yeah.” Now we actually own that unit as a rental property. We have an operating agreement. We split it 50-50. So everything’s good now.

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

Tony:
Welcome to the Real Estate Rookie Podcast, where every week, twice a week, we’ll bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. We’ve got a heck of an episode for you guys today. We’ve got Hudson Jump, J-U-M-P, first. He’s got a pretty cool name. I don’t think I’ve ever met anyone with the last name Jump. But he’s also a senior in college and he’s about to graduate right now. I think he’s got a few exams left after this podcast episode. He’s just got a really cool story about grading it out as a young person in real estate. But a lot of what he talks about is applicable to all of our rookies that are looking to get started.

Ashley:
Yeah. Listen for the number 10,000 throughout this episode. So listen to what he does and just how monumental that number is for what he’s doing. We’ll wrap it up at the end, too. So make sure you listen all the way through the end, and Tony and I give our thoughts onto what we think was really impactful through this episode. Tony, what are some other little hints that you have or teasers about your favorite things about this episode?

Tony:
What I loved was how when Hudson found himself in a difficult situation with a deal that he thought was going to pretty much go sideways, he was able to partner up with a super experienced real estate investor who had done hundreds of flips and have that person come in and partner with him on that deal and turn it into something more profitable. I think it’s a lesson that so many folks listening can take about how to align yourself with people who are more successful than you.

Ashley:
Yeah, it’s just, once again, we’re hearing about a successful partnership. That’s not always the case, but Hudson really gives some ideas as to what made his partnership successful. A big takeaway from that was honesty up front. That was really a big thing, so it makes you listen to that part of it.

Tony:
So before we jump in, I just want to give a quick shout at someone that left us a five-star review on Apple Podcasts. Rob T. from California says, “Love this podcast!!!! Truly exceptional. Ashley and Tony have phenomenal on-air chemistry. Well, thank you, Rob. Both informative and entertaining, just what a rookie like myself needs to find the tools and inspiration to get started.”
So for all of our rookies that are listening, if you have not yet left us a review on Apple Podcasts, Spotify, wherever it is you listen, please take a few minutes out of your day and do that. The more reviews we get, more folks we can reach, more folks we can reach, more folks we can help. That’s our goal here at the Real Estate Rookie Podcast.

Ashley:
He’s really spot on about that on-air chemistry. In person, we have no idea what to say to each other.

Tony:
Yeah. It’s just awkward silence the whole time.

Ashley:
[inaudible 00:03:16]. But thank you guys so much for leaving these great reviews. It really has made it very enjoyable for us to read them on air. So if you haven’t already, please leave a review for us, and we’d love to read it on air.

Tony:
Also, just a quick heads up, right now we’re at 1,496 reviews. So we’re four reviews away from hitting 1500, which is pretty cool. So that’s 1500 rookies that have shared how much the show has impacted them. So it’s pretty cool.

Ashley:
Yeah. Yeah, that’s awesome. We especially love it when you share how the show has impacted you in some way.

Hudson:
My name is Hudson Jump. I’m actually a senior at the Ohio State University majoring in finance and I have a minor in psychology. I actually had a presentation this morning. I have a few more exams before I’m done for good.
But, yeah, I came to Ohio State actually to wrestle. I quit after a year and then just focused on work and school and just hanging out with my friends and having fun. Now I’m feeling good.

Tony:
Dude, you’re a senior in college. It always not amazes me, but I’m just always so inspired when I see younger people who are already going on this journey of financial freedom and making things happen. So I know for a lot of my friends, when we were seniors in high school, we were more so focused on … I mean a lot of people were focused on partying and all the stuff that comes along with going to a big school like that. But for you, Hudson, you’re focused already on building your path for the future. So just quickly walk us through what triggered this desire to start building your financial, I don’t know, foundation for yourself.

Hudson:
Yeah. So, at first, I actually wanted to be a psychiatrist. I was a full-time psychology major. Then my brother-in-law, he’s a big realtor here in Columbus and he is a landlord as well, he started having me do some of the grunt work, cleanouts and demolition work and whatnot. I just saw how many opportunities there were. I started listening to BiggerPockets and seeing everything that was really out there. There’s so much opportunity to explore and there’s not really one thing you need to do. There’s so many different things you can do to make money, and I just thought that was really amazing.

Tony:
Yeah. Apologies, Hudson, because I said you were a senior in high school. But you were not a senior in high school, you were a senior in college. So just a little bit of a time difference there. So it was this relationship with your brother-in-law that introduced you. But I think there’s a lot of people, Hudson, that are exposed to real estate investing. Maybe they know someone in their personal lives that’s doing it, but exposure by itself isn’t enough to really kick them into gear to want to go down that path themselves. So what was that moment for you that said, “Hey, maybe this is a path that I actually want to go down?”

Hudson:
For sure. At first, when I was working for my brother-in-law, I was just trying to make money. I wasn’t necessarily focused on learning specifics about being a landlord or owning rental properties, or even wholesaling. I was just a college student trying to make money, and that’s what I did.
I started to build up my wealth, nothing amazing, just a few thousand dollars, which is pretty amazing for a college student. But I just kept working, and then I learned about wholesaling, and then I learned about flipping, I learned about rental properties.
So, yeah, like you said, at first it was a good workout. I got some money in my pocket. It’s not very stressful. So, yeah, that’s just where I started with that.

Ashley:
Hudson, in your college group of friends, in your circle, are other people entrepreneurs or going after things, or is it more of just like, “Oh, I work at the restaurant a couple of days a week,” or things like that? Give me a little background as to the people you hang out with in college and maybe what sets you apart from other college students maybe?

Hudson:
Yeah. So this is actually interesting. Most of my friends don’t even know this is what I do or that I have properties, which I actually really enjoy. I like having one foot in both worlds where I can still hang out with my friends on the weekend and go out, but there comes a time where it’s time to work and get stuff done.
I actually really like that split. I have some friends who … They’re just all over the place. I have friends who are finance majors like me. I have friends who are biomedical engineering. I have friends who are in architecture. That’s the cool thing. They don’t necessarily know that this is what I’m doing, but we can all still connect and relate and have fun together.

Tony:
I just want to point out, I think one of the most difficult parts of the early journey of becoming a real estate investor is the lack of community, because a lot of times when you’re just getting started, you can’t talk to your friends, you can’t talk to your family, you can’t talk to your spouse, your boyfriend, girlfriend, whoever it is, because no one else is drinking the Kool-Aid in the same way that you are.
So for you, Hudson, was it difficult … Because you said you liked it, which is the opposite of what most people say. Did you find it difficult at all that no one else around you was doing it for you to stay motivated?

Hudson:
For sure. I felt like I was in limbo, and still, to an extent, I do because I’m living in this eight-person house with all my friends in college. But then I have my brother-in-law and other partners and whatnot who own hundreds of units, which is insane. So I see this split. Yeah, I definitely do feel like I’m in no man’s land at times, but that’s where connections and everything else, being with partners, has really benefited me.

Ashley:
Hudson, before we move any further, can you just give us an overview of your portfolio and how many deals you have done?

Hudson:
Yup. So I currently own three long-term rentals. I’ve wholesaled seven properties and I’ve wholetailed one. So I have two flips on the market as well. Right now they’re both contingent with my current partner.

Ashley:
That is awesome. Congratulations.

Hudson:
Thank you so much.

Ashley:
Can you break down the difference between a wholesale deal and a wholesale deal? Because we really don’t talk about a wholetail deal that often on here.

Hudson:
Yeah. So wholesale is essentially you reach out to a seller and usually you know they’re motivated in one way or another to sell their property quickly. Then you turn it around and you don’t do anything to the property. You sell it most likely to another investor for them to do the work and renovate it and keep it as a long-term rental or flip it and put it back on the market.
A wholetail would be you’re buying a property that doesn’t necessarily need major repairs. You’re doing minor things, maybe you’re painting, you’re adding new flooring, stuff like that, just basic simple stuff, and then throwing it on the market quickly. It’s a quick turnaround. You’re not necessarily trying to get the most bang for your buck, but you’re making a decent profit, more than you would if you were just wholesaling your property.

Ashley:
So let’s talk about that first deal that you actually did. Was that a wholesale then, or was that one of the buy-in holds?

Hudson:
My first deal that I actually went into contract in was a wholesale. So when I first started wholesaling, I was just looking up online like how do you wholesale? How do you find potential sellers? I started … I made phone calls. I was just on the local auditor’s website looking to see if people had enough equity in their property that it made sense for them to sell. But I really had no idea what I was doing. I just needed to take a leap and start getting into something bigger.

Tony:
Hudson, I just wanted to ask, why wholesaling? Because there are so many other ways of getting started in real estate investing. What was it about wholesaling that made you say, “Okay, this is the next step from here. This is how I want to get started”?

Hudson:
Yeah. I feel like wholesaling is a common first step or a common starting ground for investors. It’s pretty simple. Not that much goes into the process. It’s not like you’re doing all the renovations and whatnot. It’s really being a people person and going out of your way to find potential sellers. But you quickly learn, you see everyone online, like, “Oh, I’ve wholesaled 100 properties this year,” and it’s not that easy.

Ashley:
Can you walk us through the steps that you took in that very beginning as you were trying to get your first deal? So you mentioned you went online to the website, looked for certain properties. Can you just walk us through that whole thing? You made the phone calls, you went to appointments. What was that whole process like for you in the very beginning?

Hudson:
Yeah. So my process at first was, again, I wasn’t really sure what to do. I was literally … I would look up online what does a wholesaler do? I wasn’t even sure really what that entails. My methods and ways of finding leads, it ramps up as you quickly gain knowledge of what you should and shouldn’t be doing. So at first I was writing handwritten letters nonstop. Literally, in my lifetime, I’ve written over 10,000 letters. I’m not exaggerating.

Tony:
You personally with your hand have written 10,000 letters.

Hudson:
Yeah, and-

Tony:
Wow. Wait, I just want to pause for a second, Hudson, because you’re saying that very casually, but that is an incredible achievement. Most people who go into the role of wholesaling, they’re either doing just printed letters or maybe they’re just writing a signature at the bottom, or they’re hiring a company that does the … They’ve got the machines to make it look like writing. What you’re saying is that you hand-wrote 10,000 letters.
I think it’s so important to call that out because that cost you $0. It costs $0 to write those letters. All you have to do is invest your energy and your time. So for someone that’s listening to this podcast that maybe doesn’t have an excessive amount of discretionary spending, what you just said of handwriting 10,000 letters, it’s a step that any person can take to get started. So I just want to commend you on that.

Hudson:
Yeah. Thank you.

Ashley:
Hudson, I have to ask too, did you work in a nursing home and pull a Happy Gilmore here where there’s old ladies like, “My fingers are tired,” from having them write all those letters for you? So you personally wrote them all yourself?

Hudson:
Literally, yes. I used to also pay my roommates to write letters with me as well.

Tony:
Wow.

Hudson:
We would all be sitting around writing letters.

Ashley:
So how much would you pay them? Let’s get into that process, too. How much did you pay them? Did they just have to copy a script you gave them? So if somebody else wants to hire people, what should they do to do that?

Hudson:
So, like I mentioned earlier, you quickly learn so much. You learn what works and what doesn’t. At first, when we started, we were writing long letters. Literally, it would take up a whole legal pad, like a one-page legal pad. Then as time went on, I found that’s not really the most productive way to do things.
So I’ve tried so many different methods. I would say literally one sentence, “Hey, I’m interested in making an offer on your home.” I would put bullet points on some, say, “No cleaning required. No repairs needed.”
[Inaudible 00:15:32] went on, the letters got shorter and shorter, because, personally, I’ve found that short and sweet seems to work better for me. That’s just what I found. So I stuck with that.

Tony:
So you start this journey, Hudson, by first leveraging direct mail. I guess let me just ask. There are so many other ways that wholesalers can reach out to prospective buyers. There’s direct mail, there’s texts, there’s cold calling, there’s maybe using realtors who have dead listings. There are so many different ways to get in contact with sellers. Why specifically did you choose direct mail as your platform and why specifically did you choose to hand-write those as opposed to getting a postcard or something?

Hudson:
So for one reason, as you guys were mentioning, that it’s pretty cost-effective. I had time on my hands, but I didn’t necessarily have the capital to work other methods. Then, two, so Columbus, Ohio, that’s where I’m located, is a hot market. So you have wholesalers and investors really everywhere. So I wanted to look for a method where I could reach out to potential sellers that other wholesalers or investors weren’t willing to do, because I’m sure you guys probably wouldn’t be willing to write thousands of handwritten letters. It’s not really worth your time. But, in a way, that helped me reach out to a crowd that other people might not be able to reach.

Ashley:
I think this is a great example of something different. Usually it’s somebody talking about how they did a DIY rehab, because they were able to save money. It was cost-effective for them at that time, and maybe not everyone would do that. But here you are, instead of going out and doing a rehab or other things where you’re hands on, you decided to save the money this way. I think that’s a great example if someone’s like, “Well, I don’t know how to do a rehab, so I can’t save money that way.” Well, maybe you can in sourcing deals or other things.

Tony:
That’s a great point. I’m glad you brought it up, Ashley, because there’s this common misconception that as a real estate investor, time is money and you should delegate everything that you can. But when you’re first starting, maybe your business can’t afford for you to delegate everything, and you have to start doing a lot of those things yourselves.
Like you said, Hudson, there are things in my business that I did when we first started that I no longer do today. Ash, I’m sure the same is true for you, where there were things that you did in your first deal that you probably never do on a deal today.
So I just want to offer rookies to understand that when you hear me or Ashley or some of our more experienced guests talking about their team and how they delegate, we all didn’t start that way. We all started in the grind doing it ourselves. I appreciate you bringing that up.

Ashley:
Tony, real quick. There’s still things that we should delegate out that we are still doing, too.

Tony:
Absolutely. I keep a list. I have a board and I keep a list of this board of things I don’t want to do anymore. Every time I find myself doing something, I just ask that list. It makes it harder to delegate when you find that person.

Hudson:
So literally on my phone, in my notes, I have the same exact thing, a list of things I should be doing, but I just really don’t want to do. Those are honestly usually the things I’ll ask my roommates to do. I’ll try to get them to do them.

Tony:
Let me just add to that, I know this isn’t really the premise of this episode, but I think it’s an important thing to call us since we’re on the topic, is that every person in their business should be doing that. Whatever it is that you don’t want to continue to do, keep track of that somewhere.
Then to take it one step further, when you actually have to do that task yourself, document and record the steps that are necessary to do that. Then you either have a written or video SOP, so that way when you do hire someone to take on that task, you can hand them those instructions and then they can go ahead and execute themselves. So that’s something we’ve been really trying to focus on in our business, is building up this library of video SOPs that we can hand off to our team members.
So, Hudson, you land on direct mail. Obviously you get started with that. So what happens from that point on?

Hudson:
Yeah. So I just quickly started to ramp up my CRM and lists and whatnot. I got into PromptStream and a few other softwares to really weed out not bad leads, but leads that don’t necessarily make sense. So at first when I was on the auditor’s site, I was specifically looking to see if people had high equity in their property, which is a great place to start. But then I got PromptStream and I started stacking lists and working into probate and distressed owners, things like that. This all was happening over a few-month period.

Ashley:
I want to define some of those things, because when I first started out, I … What’s a list? Everyone keeps talking about a list. Where does this list come from? So can you maybe break that down a little bit more? Then also you talked about a distressed owner. Maybe just explain this is how I found a distressed owner in PromptStream, changing the filters on there. Just talk about that a little bit for us, please.

Hudson:
Yeah, PromptStream is great. I still use it to this day. I’ve used it since I started, now for about the past nine months or so. And so, when you start investing, you want to build a list. You want to have a list of potential properties that you know could turn into deals.
So you start with maybe something basic like … You could even go as basic as a specific zip code. That’s pretty broad. Then you work it down into properties that have above 55% equity, because then these people are more likely to sell their homes. You wouldn’t sell your home if you’re not going to make money on the transaction.
So then you would work down from there and you just keep getting more and more specific. So you have these high-equity properties in the specific zip code, and then you can go a step farther. Maybe there’s an out-of-town owner, which would be great. Just keep narrowing down your list. Maybe they’re on the probate list somewhere, someone passed away. So they’re more likely to sell their home. There are so many options, and you keep narrowing it down until you get to a select few properties that you really need to target hard.

Tony:
So, Hudson, did your letters lead to your first deal?

Hudson:
Yup. So actually my letters were … They led to all my wholesale deals.

Tony:
Okay. So talk us through that first one. So you sent out these letters. I think, if we can, before we actually get into the details of the numbers, just when … Because here’s the thing. I think a lot of us can wrap our heads around the idea of sending out the letters. That part is relatively easy. It’s relatively straightforward.
I think it’s what happens when the letters go out and the next steps where people start to get a little nervous or confused around what to do. So when a seller actually returns your call, or gives you a call based on your letter, and you pick up that phone and they say, “Hey, Hudson. I got your letter,” what does that dialogue look like? What are you saying to those folks to actually get them to the point where they’re saying yes about selling to you?

Hudson:
So, to be honest, at first it was probably really bad when I was answering the phone. It can be scary and challenging. You don’t necessarily know what to say. But just with repetition, that becomes so much easier. I have no problem talking to potential sellers at this point.
But, yeah, first I was frightened. Now I say basic things such as, “When was the last time you renovated the roof?” or, “How long have you lived there?” Just really simple things. Really, the thing I was trying to get to is I want to see the property in person myself. That’s the big thing.
So if you can schedule that on first contact when they reach out and call you, that’s great. But of course that’s not usually how it works. You need to keep following up to get the deals.

Ashley:
So you did your first wholesale deal. What about your first long-term rental? Was that from the letters, too? What made you decide to keep that property as a rental instead of wholesaling it?

Hudson:
Again, just taking it one step farther. I just thought that was the right thing to do. Looking back, it was definitely the right thing to do. I wanted to keep going and start getting properties to hold onto, except that deal was a complete disaster. I’m still processing it to this day. It’s given me a lot of hard times, but it’s getting better.

Ashley:
Okay, but you still continued to invest. So talk about the mindset of that, as your first buy and hold property didn’t really work out the way that you had hoped it would. So why did you continue on?

Hudson:
For sure. That really was the result of a partnership I formed as a result from that first property and how my partner really taught me that things just keep moving forward, things will work out. There’s always an answer. I couldn’t see that by myself, but it took a partner who knew what they were doing to really show me that. I don’t know where I would be, honestly, without meeting that partner.

Ashley:
Ashley, it reminds me of a JP Desmet who we had on a recent episode as well, where he lost $250,000 over the course of his first few deals. It wasn’t until he found the right partner, the right mentor to coach him through that, he finally found success on that fourth deal I think it was. So, Hudson, if you can, give us the details of what exactly went wrong with that first deal.

Hudson:
Geez, where do I even start? So, seriously-

Tony:
That’s how you know it’s a good story, when you don’t even know where to begin.

Hudson:
Yeah, you guys might shun me a little after this one. So I reached out … I sent them a letter this out-of-town owner. They reached out to me. We went back and forth for a little bit. They wanted … I can give you the numbers right now as we go as well. So they wanted $75,000 for the property.
Working with my brother-in-law and some other local investors, they helped me figure out an ARV that made sense. So we had a projected ARV of around $160,000.
The property was very unique. It was a residential, three bed, one bath in the front. Then there was a commercial unit attached to the back. So the property was huge. The numbers seemed to make sense from the outside, but this was just me not knowing what I’m doing, just like la, la, la. I offered them $60,000 and they were like, “No way. I’m not doing that.” I was just like, “Okay.”
I followed up again a few weeks later and offered them $65,000 site unseen. I had never been in the property. I actually didn’t step foot in the property until four months after purchasing the property, the closing.

Ashley:
Real quick, Hudson. Was this a vacant property? Was there someone living in there?

Hudson:
There was a tenant in there.

Ashley:
Okay. So you have to assume it’s at least habitable, I guess, when you were purchasing it.

Hudson:
Yes.

Ashley:
Okay.

Hudson:
You’d assume, right? So, again, now, even though this was only seven months ago or so, I would never buy a property that’s tenant-occupied. I just wouldn’t. It’s just extra hassle. Of course, I would never … I don’t know anyone who would buy properties that are sight unseen, at least for their first deal.

Tony:
Hudson, can I ask, what made you confident to purchase that property sight unseen, given that it was your first? Just walk through what your thought process was and maybe what some of the lessons were you learned coming out of that?

Hudson:
Yeah. Just, again, I just mentally felt like I needed to take a jump. I needed to make the next step, whatever it may be. Looking back, that was a horrible choice. It really was. But things happened to work out for the best. That is something I would never do again. I would never buy a property site unseen.

Tony:
Yeah. But I guess just for clarifying purposes, did you buy it site unseen because the tenants that were inside wouldn’t allow you to enter, or did you feel that it would strengthen your deal? Just what was the reason behind not trying to get inside before you closed?

Hudson:
Yeah. The tenants would not let me enter the property. They wouldn’t even let the landlord enter the property, which is a red flag again.

Tony:
A telltale sign by itself, right?

Hudson:
Yes.

Tony:
Now I appreciate you sharing that. It’s just something I want to … I was talking with someone. We had our event last week and someone was in a similar situation where they took a leap of faith and it didn’t quite work out for them. I shared this thing, it’s this framework that I’ve learned in the person development space.
But when you think about taking action, you have these three different phases or three different areas. You have your comfort zone, and that’s the zone that most of us operate in for the majority of our life, where we’re doing things that we know how to do, we can do with our eyes closed, hands tied behind our back.
Then outside of the comfort zone, there’s a growth zone. That’s where you push yourself beyond your existing limits and how you start to get better and develop new skills.
But then outside of the growth zone, there’s the danger zone. The danger zone is where you almost bite off more that you can chew and you end up in a situation where it’s no longer productive, but it’s counterproductive because you’ve taken on too much.
It’s a fine balance to keep because you always want to make sure that you’re in that growth zone pushing yourself, but you also want to make sure that you don’t go too far to the point that you’re in the danger zone and just totally out of your element.
So I appreciate you, Hudson, for taking that big step. But it seems like maybe weren’t one step too far.

Hudson:
Yeah, for sure. The thing is when I first started, I was scared. I didn’t necessarily know what to do. Then it’s easy to overlook things. You don’t analyze deals, property, or work the numbers correctly. You take a big risk and sometimes it goes too far. Sometimes it just happens to work out.

Ashley:
So, Hudson, after this deal, you’ve had one more property, or two more?

Hudson:
So I have two flips on the market right now after this deal. Then we currently, me and my partner, hold two properties we’re renovating as we speak.

Ashley:
Okay. Then the house that you’re living in now for college, are you renting or-

Hudson:
Yup.

Ashley:
Okay. So you’re renting and then you have purchased your rental properties. Okay, cool. I was just wondering if you were house hacking. Did you ever think about buying a house there and then renting to all your friends?

Hudson:
So that’s actually the plan next year. Our lease is up in July. We’re planning on moving just in downtown Columbus. I’m going to buy a property, hopefully, if the numbers make sense, and then rent it out to my friends. That’s the plan.

Ashley:
Okay. I have one more college-related question, then I want to get into the actual funding of your deals. But knowing what you know now, have you regretted going to college?

Hudson:
So I should say yes, honestly, but I would say no because college … It’s so fun. I would say I’m here … Literally. I’m here having fun. I’m hanging out with my friends all weekend. I have two steps, where Monday through Thursday up until about 5:00 PM, I’m grinding, I’m working, I’m working. Then I love it. I love being with my friends and just going out, hanging out, having fun.

Tony:
I love the transparency.

Ashley:
Yeah. Last night someone told me this quote, I don’t remember it exactly, but it was from Angel Garcia, that he told me that this was one of his favorite quotes. It was something about you don’t regret things that you did, you regret things you didn’t do. I just thought of that with if you didn’t go to college, you may regret not going to college.
Yeah. I always think that’s so interesting, because I think that’s a very common question for somebody that’s in high school that’s interested in real estate investing. Should you even go to college or just jump full board? It’s, I think, a very personal question, and I think there’s pros and cons to both definitely. But I was just interested in hearing that.

Tony:
Ashley, I just want to ask you, you’ve got three young boys. As they get closer to college age … And I ask because we have the conversation with Sean, my son, because he’s only three years out from college right now. But as your boys get older, what’s your thoughts on them going to college versus not going to college?

Ashley:
Honestly, I don’t care. I’m pretty sure my oldest is just going to take over the farm and run the farm. I don’t see, as of right now, him doing anything else. You don’t need to go to college for that, and that’s fine. I mean he’s nine and he can rebuild a motor. That’s good for me.

Tony:
That’s amazing.

Ashley:
He has some skill. But also we have the college 529 plans for each of the kids. Recently, they announced that they can be now turned into a retirement account and be retirement. So if they don’t use them for college, it will now be retirement for them. So I mean that makes me feel even better about them not going to college, because now we won’t pay penalties for taking that money out for them to do something else with.

Tony:
Totally. Yeah. My son’s a freshman in high school, so he’s got three years of high school left. I’ve told him multiple times, I was like, “I don’t care if you go to college or not. But all I require is that you have a plan.” I was like, “If you don’t want to go to college, then show me a clear plan of what you are going to do to be a productive self … You can take care of yourself as an adult. What you’re not going to do is you graduate from high school and seat on my couch and play video games all day.” So it’s like you’ve got to have a plan.

Hudson:
Well, I think that … So, for sure, I would be farther ahead in my career work-wise if I did not go to college. But the friendships and memories I’ve had in college, seriously, I wouldn’t trade them for anything.

Ashley:
I think having a degree in psychology has probably helped with your wholesaling, creating relationships and communicating with people and reading people. Then also with a finance degree. I graduated with an accounting and finance degree, and I think it’s helped me tremendously with analyzing deals, understanding financial statements, and just business in general. So I’m thinking that’s probably the same in your case too, that you can actually use your degrees to help your real estate investing.

Hudson:
Yeah, for sure. I specifically chose finance. Psychology just worked out for the better. But I specifically switched over to be a finance major because of real estate. That’s something I’ve always struggled with is in the numbers aspect of things and analyzing deals and whatnot. I’m the guy who’s just jumping in and trying to make things work.

Tony:
So, Hudson, I want to go back to that first deal, because you alluded to the issues that you ran into. But just give us a breakdown of what the challenges were, what went wrong, and how you eventually course-corrected to make it a better deal, or just how you saved yourself from everything going the wrong way.

Hudson:
Okay. So I’m going to fast forward four months from closing date, the first day I stepped inside the property. So I drove over there. It’s actually in Newark, Ohio, just about 45 minutes east of Columbus. I walked in the front door and it was kicked in. There was trash just piled to the ceiling. You couldn’t see anything. I’ve done a lot of cleanouts, and I might say it was the worst property I’ve ever been in.
So I can still vividly remember it. I walked back into the dining room, I took a left into the bathroom, except there was no toilet or shower. It wasn’t really a bathroom, I guess, even.
So I mentioned that the back half was a commercial unit. It was just a big warehouse off the back of the house, and it was just piled with trash just everywhere, just everything. I felt like I had a rock in my stomach. I just couldn’t even comprehend what was going on. I felt horrible.

Tony:
So once you get inside, Hudson, obviously the condition of the property is far worse than you imagined. Does this mean that the numbers don’t work for you? Are you now over budget? What were the ramifications or the implications of the conditions of the property?

Hudson:
Nope. Yeah. So I estimated the rehab to be $35K, and I knew immediately that wasn’t going to work. So that was another factor where I didn’t know what to do. It sucks when you have no idea what to do and you just feel lost. That’s really what happened. There were squatters in the back of the property. It was just a mess all around. This was after already holding it for four months. So I had already spent over $3,000 in holding costs.

Ashley:
How were you funding this deal with the purchase, the rehab? Was this from wholesale money, or did you get some kind of funding?

Hudson:
Yup. So I provided the downpayment. So, yeah, I didn’t have very much money at the time after doing that. Then I had a hard money lender. I used a bridge loan for the other funds.

Ashley:
So now all of a sudden you’re getting more expenses that are coming up. How did you start chipping away at that problem?

Hudson:
Yeah. So for a few days, I was just trying to recuperate, just figure out what I need to do. I reached out to my brother-in-law who had helped me the most this far in my journey. He knew of an investor in the area who was just killing it. She had flips left and right. She owns a lot of rentals and is just like go, go, go.
So he gave me her number and then I called her. I swear to God, I was just so brutally honest. I was like, “I am screwed. I need your help. You can have the property if you want. I’ll just eat the holding costs. I’ll lose whatever happened.” She was like, “Okay, settle down. We just met. What are you talking about?”
So then I met her there the next day and she was like, “Yeah, man, you messed up.” I was like, “Yeah.” But she said we’ll work through it. She’ll walk me through the renovations. She’ll help me with everything. I was like, “Yup, that sounds as good as it could be.” I couldn’t ask for anything more, honestly.

Ashley:
So with that partnership, how did that conversation turn … Did you end up giving her the property, or how did that partnership evolve? Was it her saying, “Okay, this is what I want out of it and I’m going to help you,” or what did that piece look like?

Hudson:
Yeah. So I’ve provided the financing on that property and I handled … I’ve worked with the hard money lender and whatnot and she’s handled the rehab, and we just went from there. Now we actually own that unit as a rental property. We have an operating agreement. We split it 50-50. It’s been rented for a few months now. So everything’s good now.

Tony:
Hudson, can I ask? So what support or guidance did this new partner bring to you? How were they able to make this now a profitable deal as a long-term rental?

Hudson:
For sure. She has so many connections in the area, where she can have contractors and whatnot do the work for much cheaper and effectively and get things done so quickly. I never really thought about that as a beginning to start my investing career, but it really is beneficial. She’s just on top of things immediately.
When we walked that property, she was getting … We walked that contractor and she was like, “Get on that right now. Start cleaning over there,” like, wow, she knows what she’s doing. I was just a scared little puppy in the back, but …

Ashley:
Yeah. But that is a great point, that experienced investors sometimes do have that network where they’re getting discounts or they know the right people to call. So you watch social media and be like, “Oh my God, they did this rehab for this,” and it’s like, well, that’s because they have that contractor doing three different rehabs for them at once. They keep them busy, things like that, where they’re getting that preferred pricing. So I think that’s a really great point to touch on.

Tony:
I think the lesson to take away, Hudson, is that if you’re able to do the hard work of finding the deal for an experienced investor, that is one of the best ways to build a relationship, because good deals open so many doors. Even though you overpaid for this property, given the condition of it, that experienced investor was still able to turn to a good deal for his or herself.
I think the lesson for all of our rookies listening is if you can find a way to bring value to another investor or someone that has more experience, that’s the best way to find a mentor, to find a potential partner, to find someone to guide you along is doing the hard work of finding a good deal. I think you’re a great example of that, Hudson.

Hudson:
Yup, for sure. Maybe I can’t analyze deals the best, maybe I don’t know how to do all the rehab, but my partner texted me an hour ago and said, “Hey, can you pick up these cabinets? We need to get them installed ASAP,” and immediately I was like, “Yup, I’m on it. I’m going there after this.” It’s just the small things that you’re willing to do that other people might not be willing to do.

Ashley:
Yeah, or they can do, they just don’t want to do it. Just have somebody do those things where, okay, if they have a partner that can go and do it, just doing those little tiny … Which may seem tiny tasks, sometimes it’s so hard to hire someone to do that because it’s such a simple thing where your contractor’s, “No, I’m not going to run to Lowe’s right now and pick up cabinets,” or, “I’m going to charge you a ridiculous amount of money to do that and take the time out of my day.” So, yeah, that’s a huge benefit.
Hudson, can you go over the numbers real quick for us on this deal? Just tell us the purchase price, the rehab, what you’re renting it out for, and what you ended up cash flowing.

Hudson:
Yeah. So I purchased it at the time for $65K. The rehab was around $50K, which it should have even been much more than that, but my partner saved me there.
Then we actually got it reappraised yesterday. So we don’t have it refinanced yet even. I’m still holding it. I’m still paying holding costs and whatnot. But it is currently renting for $1400 a month. I’m excited. I’m crossing my fingers for the refi.

Ashley:
What do you think that it’s going to appraise at? What do you think the ARV is?

Hudson:
So things got a little splotchy with the commercial aspect of the unit. I don’t know, I’m hoping $150,000, but we’ll see.

Ashley:
Yeah. Well, awesome. Excited for you. Thank you so much for being open and honest about the struggles of what you went through, because if just one person is maybe going through the same thing that you did and hearing your story, hopefully that gives at least somebody some kind of motivation and inspiration, like, “Hey, here’s what I did. I went and found a partner and it worked for me.” There are options out there. So if anybody else is having that happen, don’t give up. Do what Hudson did. Go out, find a partner, solve the problem, make yourself solutions.

Tony:
I guess we’re going to jump into the rookie exam, Hudson, if you’re ready for that, brother.

Hudson:
Okay. Yeah.

Tony:
All right, man. These are the three most important questions you’ll ever be asked in your life. But actually I don’t know if that’s true for you because you said I think you have an exam right before this, or right after this. So you might be the one caveat to this. So question number one, Hudson, what’s one actionable thing rookies should do after listening to this episode?

Hudson:
So when I started, it was write letters, do things that other people aren’t willing to do to connect with potential sellers. But my advice would be find someone who knows what they’re doing, who wants to help you. It’s so easy. There are so many people who know what they’re doing, but you’ve got to find the right people who really want to help you and want to grow with you.
That’s where I’ve taken off to the moon with my investing career. I don’t know where I would be without the connections I’ve made. Maybe I wouldn’t even be in real estate anymore.

Ashley:
What is one tool, software, app, or system in your business that you use today? Besides PromptStream, because you already said that.

Hudson:
Can I say making connections with local realtors?

Ashley:
Yeah, sure.

Hudson:
So, yeah, really my partner and I have connections with some great realtors around the area who focus on distressed properties and selling properties that aren’t up to market standards. So we have so many connections now that the deals are flowing to us, instead of us spending our time and effort trying to find deals.

Tony:
Love that. That’s a great position to be in. It snowballs, right? Once you get that first one, you start building relationships, and before you know it, you’ve got more deals coming in than you can use. So last question here, where do you plan on being in five years?

Hudson:
I love that question because I seriously have no idea. I was wholesaling six months ago, and then now I’m working with my partner. We’re working on a few higher end flips. I don’t know. I would like to keep working up and see where it takes me, hopefully get into apartment complexes one day, something of that sort. Just keep going and seeing what presents me.

Tony:
Yeah. Well, Hudson, if where you’re at today is any indication, brother, I’m sure you’re going to crush whatever goals you set aside, man. So we’re excited to be experiencing that journey with you.
So before we wrap things up, I just want to give a shout out to this week’s rookie rockstar. Today’s rookie rockstar is Andrew Snyder. Andrew says that, “Just closed on my first deal and made $5,000.” He’s been wholesaling off and on, but decided to take it seriously this past year.
The owner actually left him a Canada gold ring today at closing as a gift for helping him and following up. What a crazy thing to happened that he bought a deal from someone else and that person thanked him for buying the property. So it just goes show what happens when you wholesale, you do it the right way, it’s a win-win situation.
So if you guys want to get a shout out as a rockstar in the Real Estate Rookie Podcast, I’ll just post in Real Estate Rookie Facebook group or in the forums and we would love to share your success with all the rookies that are listening.

Ashley:
What is a Canada gold ring? Like a ring on your finger?

Tony:
I have no idea, but I’ll take it.

Ashley:
I’ll have to ask some of my Canadian friends. Okay. Well, Hudson, thank you so much for joining us. Can you tell everyone where they can reach out to you and find out some more information about you?

Hudson:
So, yeah, I mean I’m not very active on social media or anything, honestly. If you just reach out on Instagram or anything, my Instagram’s just @hudsonjump, J-U-M-P. You’re not going to find much about real estate, to be honest, but I would be willing to connect with some people, reach out, I would love to help, and we can go from there. But, yeah, I’m not very active on social media, to be honest.

Ashley:
Because you’re too busy partying in college, huh?

Hudson:
You would just assume. Yeah, I’m just hanging out.

Ashley:
Well, Hudson, thank you so much. We really appreciated the value you have brought to today’s show. We can’t wait to have you back on in a couple of years to see where you went with your continued success.
Tony, do you think that everyone is having the same kind of emotions, response to this episode, like pure excitement and joy for Hudson but also a pain inside as to why wasn’t I doing this at college?

Tony:
Yeah. It’s always this weird dynamic where I think we love hearing stories of people that are relatively young, who are taking these massive steps towards building their real estate business. But it also, like I said, hits you right in the heart. It’s just like, “Man, why wasn’t I doing this at that age?” But I mean it was a really cool episode. Just his whole demeanor and his approach and his mindset is super inspiring.
But I also want to call out, because he faltered at the beginning with that deal where he underestimated the rehab cost and didn’t get inside for four months. JP Desmet, who was on episode 279, he was a guy that lost $250,000 on his first few deals. The common theme between JP and Hudson was that both of them found their way out by partnering with someone else that had more experience.
So for all of our rookies that are listening, I think that’s one thing to take away is that if you find yourself from a position where you’re just in over your head, the fastest path to success or getting back on the right path is finding a partner that can potentially help you out.

Ashley:
Yeah. If you guys didn’t know this, Tony and I actually have a book launching this summer called Powered by Partnerships, which goes in depth about this as to why you should consider having a partner. So I think this episode in general was a great case study for that.
Another thing I really enjoyed about this episode are the list that you and Hudson talked about, the list that you make as to … And it’s something I’m definitely going to start doing, is making a list of things you don’t want to do, and then building off the SOPs for that, the standard operating procedure. So I challenge you to also do that, to go ahead right now and start making a list as you go through your day of things you don’t want to do that you can eventually start to outsource.

Tony:
We need to get these people on as a sponsor for the podcast, because I feel like we talked about them quite a few times. But I use Loom, L-O-O-M, to record all of our video SOPs. It’s a super easy way, just like whenever I’m about to do something that I know I eventually want to delegate, there’s like a little button on my web browser, I hit the button, I record it, I save it, file it, and then when that team member comes on, I just send them a link to that video and say, “Hey, here’s how to do it,” and they don’t have any questions because it’s such a detailed explanation through video.

Ashley:
Yeah. I use Loom, too. I really like it. Then I tie that into monday.com, which has almost like the written part out of the checklist element to add to that, or the template piece, I guess.

Tony:
Yeah, and last thing that really jumped out at me about Hudson as well was the 10,000 letters. That is just a monumental number of letters. I don’t think people can wrap their minds around how much work goes into 10,000 letters. I tried to write, I think, like 200 letters when I first got started, and that took me so long. So I couldn’t imagine doing 10,000. So just major kudos to him.
But that’s the hard work that goes into being successful. That’s the stuff that nobody sees behind closed doors, but then they want to celebrate someone’s success. So if you’re hyping Hudson up for being successful, also hype him up for doing that hard work of writing 10,000 letters by hand.

Ashley:
Yeah, and also the fact that he started to realize maybe I should hire my roommates, where it probably is relatively inexpensive to pay someone to write letters. You’re sitting there watching TV, doing whatever, and you guys are just writing letters. So maybe some quality bonding time with your friends.

Tony:
Yeah. He also didn’t clearly state that he did not go to the old folks’ home when you asked him that question. He neither confirmed nor denied. So maybe there’s a little bit of that in there as well.

Ashley:
We do also have an Instagram shout out for you guys today. So today’s shout out is Alex Camacho. His Instagram account is @realestatedealmaker. So what caught my eye today was a post he did. It was an Instagram reel about seven departments that he has created to build a seven-figure real estate investing company.
So Alex does all kinds of real estate investing strategies. I suggest you guys give him a follow, because he shares a ton of knowledge about how he has built his business and systems and processes, team members he has in place, things like that.
Thank you guys so much for joining us. I’m Ashley, @wealthfromrentals, and he’s Tony, @tonyjrobinson. We will be back on Saturday with the Rookie Reply.

Speaker 4:
(singing)

 

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Mortgage demand surged after Fed signaled potential pause in rate hikes

Mortgage demand surged after Fed signaled potential pause in rate hikes


A display for a realtor with Coldwell Banker Dynasty TC, left, is displayed as she speaks with a potential homebuyer during an open house in Arcadia, California.

Jonathan Alcorn | Bloomberg | Getty Images

Mortgage rates fell slightly last week after the Federal Reserve chairman suggested a potential end to a historic string of interest rate hikes. The drop wasn’t substantial, but it was enough to boost demand from current homeowners hoping to refinance their mortgages to lower rates.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased last week to 6.48% from 6.50% in the previous week, with points declining to 0.61 from 0.63 (including the origination fee) for loans with a 20% down payment, according to the Mortgage Bankers Association’s weekly survey. The rate was 5.53% for the same week one year ago. Mortgage rates for all surveyed loan types decreased over the week.

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The latest inflation readings are expected to show that prices are still rising

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As a result, applications to refinance a home loan jumped 10% last week, compared with the previous week, seasonally adjusted. Refinance demand, however, was still 44% lower year-over-year.

“Mortgage applications responded positively to a drop in rates last week, as the Fed signaled a potential pause at the current level for the federal funds rate in anticipation of inflation slowing and tightening financial conditions that will slow economic and job growth,” wrote Joel Kan MBA’s deputy chief economist in a release.

Applications for a mortgage to purchase a home increased 5% for the week but were 32% lower than the same week a year ago. Rates haven’t really dropped enough to offset high home prices. Prices have been cooling since last summer, but are already re-heating this spring due to strong demand and very low supply.

Mortgage rates rose sharply to start this week, according to a separate survey from Mortgage News Daily. The increase was due to investor sentiment that the regional banking crisis may be easing. All bets are off Wednesday, however, when the government releases the Consumer Price Index, a monthly report on inflation. Any large divergence from expectations, in either direction, could move bond yields, and consequently mortgage rates, decisively.



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Seven Questions To Ask Yourself When Trying To Hire A Diverse Team

Seven Questions To Ask Yourself When Trying To Hire A Diverse Team


When trying to hire a team with diverse backgrounds and skills, business leaders can be left wondering how to find candidates who are different enough from each other to ensure varied points of view and experience levels but also similar enough to each other to work well together and create a cohesive team culture.

Luckily, there are some questions leaders can ask themselves to help make the hiring process a little more straightforward. Below, the members of Young Entrepreneur Council discuss seven of those questions and why they are so effective at helping you determine whether or not someone would be a good fit for your team.

1. Is this candidate a self-starter?

The first question you must ask is, “Does this candidate exhibit the traits of a self-starter?” This is because self-starters typically bring a strong sense of ownership, adaptability and proactivity to the table. They are eager to learn, lead and take on new challenges, which can be invaluable in a diverse team setting. – Kelly Richardson, Infobrandz

2. How will they fit into the company culture?

When weighing whether or not to hire someone, business leaders should ask themselves, “How will they fit into the company culture?” They may not adapt well to a people-first business if they don’t seem outgoing or willing to work with others. I suggest preparing some questions so you can gauge how potential hires feel about this subject before you make a final decision. – Daman Jeet Singh, FunnelKit

3. Are their skills transferable?

If you want to hire a team with diverse backgrounds and skills, ask yourself if their skills are transferable. In other words, can their skills be used in a way that’s different from the primary job offer? If so, they are a safe bet for your team. Hiring people with diverse skills is important because you can shift them around as needed. – Chris Christoff, MonsterInsights

4. Will this candidate bring a unique perspective?

When you are considering hiring someone for your team, ask yourself, “Will this candidate bring a unique perspective, enhancing our team’s problem-solving abilities?” Diverse backgrounds foster innovation and resilience, leading to a stronger, more competitive company. Embrace diversity to unlock your team’s full potential. – Michelle Aran, Velvet Caviar

5. Will this person be able to grow and adapt?

It is important to ask yourself, “Does this person have the potential to grow and adapt?” I value having a team of people who are willing and able to learn new things quickly and who are also comfortable with change and adapting to new circumstances. This is especially important in today’s dynamic business environment since people who are willing to grow will be more innovative and, in turn, help you grow. – Blair Williams, MemberPress

6. Is this candidate aligned with the company’s mission and values?

Ask yourself if the candidate is genuinely aligned with the company’s mission and values, regardless of their background or skill set. Shared values and a passion for the company’s mission can help create a strong team culture, regardless of individual differences. This can help ensure that the new hire is aligned with the company’s goals and is motivated to contribute towards its success. – Adam Preiser, WPCrafter

7. Am I considering all the ways they could contribute?

An advantage of a diverse team is that they can bring new perspectives and skill sets to the table. One of the first things to ask yourself is whether you’re considering all the possible ways someone might contribute to the team. Make sure you’re not limited by preconceptions. For example, someone might have life skills or soft skills that would be a valuable addition to the team. – Kalin Kassabov, ProTexting



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