\n<\/p>\n
Do you lean into data when analyzing real estate deals<\/strong><\/a>? In a competitive market<\/strong>, ANY kind of advantage goes a long way towards helping you land better deals. And guess what? Harnessing the power of data is much easier than you think. Today\u2019s guest delivers a handful of helpful tips, tricks, and tools that all rookie investors<\/strong> can use!<\/p>\n Welcome back to the Real Estate Rookie<\/em> podcast<\/strong>! Today, we\u2019re joined by Ariel Herrera<\/strong>\u2014data scientist<\/strong> by day and real estate investor<\/strong> by night. Five years ago, Ariel decided that real estate was going to be her path to financial freedom<\/strong><\/a>. Like any eager investor, she devoured as many articles, podcasts, videos, and books as she could get her hands on at the time. Once she realized that she could combine her love for data science<\/strong> with real estate<\/strong>, there was no looking back!<\/p>\n In this episode, Ariel shares about the competitive edge you can gain by being a data-driven real estate investor<\/strong>. She recommends several tools and systems, all of which are easy to implement and require ZERO coding<\/strong>. Additionally, you\u2019ll learn how to choose your market<\/strong>, invest out-of-state<\/strong><\/a>, and save a ton of time with a few deal analysis<\/strong><\/a> shortcuts!<\/p>\n Ashley: Tony: Ashley: Tony: Ashley: Ariel: Ashley: Ariel: Ashley: Tony: Ashley: Tony: Ariel: Tony: Ariel: Ashley: Ariel: Ashley: Tony: Ashley: Ariel: Ashley: Tony: Ariel: Ashley: Tony: Ashley: Tony: Ariel: Ashley: Tony: Ashley: Tony: Ariel: Tony: Ariel: Ashley: Tony: Ashley: Ariel: Tony: Ariel: Tony: Ashley: Ariel: Ashley: Ariel: Tony: Ashley: Tony: Ariel: Ashley: Ariel: Ashley: Ariel: Tony: Ariel: Tony: Ariel: Tony: Ariel: Ashley: Ariel: Ashley: Ariel: Ashley: Tony: Ashley: Ariel: Ashley: Ariel: Ashley: Tony: Ariel: Tony: Ariel: Tony: Ariel: Ashley: Ariel: Ashley: Ariel: Ashley: Ariel: Tony: Ashley: Ariel: Tony: Ashley: Tony: Ashley: Tony: Ariel: Tony: Ariel: Tony: Ariel: Tony: Ashley: Tony: Ashley: Ariel: Ashley: Ariel: Ashley: Ariel: Ashley: Tony: Ariel: Ashley: Ariel: Tony: Ariel: Tony: Ariel: Ashley: Tony: Ashley: Ariel: Ashley: Tony: Ariel: Tony: Ariel: Ashley: Ariel: Tony: Ariel: Ashley: \u00a0<\/p>\n<\/div>\n Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here<\/a>. Thanks! We really appreciate it!<\/p>\n Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Email <\/em>[email\u00a0protected]<\/span><\/em><\/a>.<\/em><\/p>\n Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n
This is Real Estate Rookie, episode 349-er. My name is Ashley Kehr, and I am here with my co-host, Tony J. Robinson.<\/p>\n
Welcome to the Real Estate Rookie Podcast, where every week, twice a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. Sometimes, we bring you data, and tools, and tips, and that is what today\u2019s episode is all about.
We\u2019ve got an amazing guest, Ariel Herrera, and she\u2019s a data science by day, real estate investor by night, and she\u2019s going to give you some really cool tips and tricks about using data to be a better real estate investor.<\/p>\n
All I want to say is happy holidays, and this is our present to you from Ariel. She is going to give you guys so much information that you are going to want to just sit down and start implementing what she is talking about to accelerate your business. This was also a Christmas present to Tony. If you are watching this on YouTube, you will see Tony, all smiles and distractions, as he tries out every tool that she will suggest today.<\/p>\n
Yeah, at one point, you\u2019ll hear my browser kind of crash, because I\u2019ve got so many tabs open from other tools that she\u2019s rattling off. I want to give a shout out to someone that left us a five star review on Apple Podcast, goes by the username of Hammond\u2019s Fam, and Hammond says, \u201cA fountain of information every week. I\u2019ve deep dived into real estate investing these past three years, and I\u2019ve been listening four years, and this podcast always has great information that I can leverage in my life and in my real estate journey.\u201d
Hammond\u2019s Fam, we appreciate you for supporting the podcast. Listen, for all of our rookies that are in the community that haven\u2019t yet left us an honest rating and review, please do. It\u2019ll take you two minutes at most, but your review helps us reach more people. The more folks we can reach, the more folks we can help. That is what we\u2019re all about here at the Rookie podcast.<\/p>\n
It\u2019ll also be your Christmas gift to us, so you can go ahead and write that into your review as to Merry Christmas or Happy Hanukkah, whatever you are celebrating this season in there for that. We would love that. Let\u2019s welcome Ariel into the show and get right into it. Ariel, I want to start off with talking about your epiphany that you had sitting on a bus. Can you tell us about that?<\/p>\n
Yes. About four or five years ago as I started real estate, my real estate journey, I was commuting in and out of New York City for my day job. One day, as I was sitting on the bus around six AM, looking at the New York City skyline, I realized I did not want to do this for the rest of my life. Even though I achieved what my parents wanted, which was to go to a good school, get a good job, I was unhappy.
The reason being is that the time taken away from the commute, working full-time, I wasn\u2019t able to be with my family as often. When I was, I wasn\u2019t always present. With that, I started to research what are the ways I can get out of the rat race? There were three things that kept popping up. One, start an Amazon business, two, daytime stock trading, and three, real estate. Real estate was the one that spoke to me the most. I dived deep into about nine months of research, listening to podcasts, reading books, and watching YouTube videos.
With that, there was one consistent theme that I got from real estate was that there are people who have done this for hundreds of years with less resources than I have, less time, less money. I thought, if they could do it, why can\u2019t I? That\u2019s when I decided to make my journey into going to my first house hack in New Jersey. At that stage, as I was analyzing my own deals, I realized, oh, my God, the data is everywhere. It\u2019s disparate. It\u2019s hard to actually analyze a deal quickly. That\u2019s how I got my journey into real estate and technology.<\/p>\n
Tell us about your background in tech. Give us a little bit more in how you\u2019ve actually progressed that into incorporating it with your real estate.<\/p>\n
Sure. My technology journey kind of found me, in that I graduated at Rutgers University in business management. Never thought I\u2019d be a programmer, but coming out of school, as I was in my first job, I took a course that another employee was hosting in the middle of the day, and really, it was just to get out of work for an hour. In that process, I learned that VBA, a coding language for Excel, can help automate tasks that you do every day in Excel, it could be lookup, or copying and pasting information. I was mind blown.
I was like, \u201cOh, my God, this task that takes me two hours a day, I could just code it and automate it within seconds? Sign me up.\u201d From there, started my journey in the data science space. As I started to analyze my own deals, I started to utilize web scraping, APIs, which I could get into, to be able to leverage data to really understand the properties that I\u2019m evaluating and analyzing them.<\/p>\n
Before we get into more of your backstory and hearing about your investing journey, we are going to take a short break.<\/p>\n
Ariel, we\u2019ve talked a little bit about the epiphany that led you into real estate investing, and then you had the shift in your W2 job that led you to data science. Before we go too far, maybe in layman\u2019s terms, talk to me like I\u2019m a fifth grader. What exactly is data science, and how do you think that\u2019s helped you on your real estate journey?<\/p>\n
Or just like you\u2019re talking to me?<\/p>\n
Yeah.<\/p>\n
Sure. The exciting thing is that data is all around us. It\u2019s basically information. Say, for a property, some data you might be familiar with is the size of a home, if it\u2019s a single family, number of bedrooms, number of bathrooms, for example. You may want to look at this data, say, on a spreadsheet, where you have all that information. Now, you could probably analyze all properties in, say, New York City within a given spreadsheet, but what if you want to do that across all properties in the US?
A spreadsheet\u2019s not going to handle that, and that\u2019s where data science comes in. We look to derive insights from data, usually large scale of data. To do that we use programming languages like Python to do so, and ultimately create charts, visualizations, and models to help understand characteristics about the data, and what can happen in the future as well.<\/p>\n
I want to lean into that just a little bit more, because I think for a lot of new investors is that when they\u2019re starting out, one of the biggest questions that they have to ask themselves is, \u201cWhat city do I want to invest in?\u201d It\u2019s a big question that a lot of people just honestly never even answer because they\u2019re so overwhelmed.
There\u2019s 19,000 cities across the United States, and trying to whittle that list down to something that makes sense for Tony, or for Ariel, for Ashley, it\u2019s hard sometimes. How did you leverage your W2 experience of data science, and taking that list of 19,000 down to a few select cities that made sense for you to invest into?<\/p>\n
Yeah, so I looked at economic factors, such as job growth, population growth, unemployment rate, median household income, and some more to analyze a particular area to see if it\u2019s improving or if it\u2019s on the decline. Where I got those metrics from was from government sources like the US Census, Bureau of Labor Statistics, and was able to aggregate that across cities to see it in one single view within a spreadsheet, and then be able to actually draw up charts, and analyze which of these we\u2019re ranking towards the top in their own categories, and start to eliminate cities.<\/p>\n
Do you think that a new investor starting out needs to be an expert in data science to analyze a market or a deal?<\/p>\n
Not at all, especially with tools today like ChatGPT, that helps to aggregate and lift up information. You don\u2019t need to learn how to code. You can just know how to use the right tools at the right time to answer the specific questions. There\u2019s a lot of free tools.
For example, you could use Redfin. Redfin has data section, where you could download information on a particular market, understand if it\u2019s trending upwards, downwards in terms of pricing, or if its price drops, for example. That can help to analyze a market without using code at all.<\/p>\n
Can you give us an example of what you would actually type into ChatGPT? Like say you\u2019re looking at Buffalo, New York, and just give us an example what you would say and type in there to get information back.<\/p>\n
What person in their right mind would live in a city where it\u2019s negative 20 degrees everywhere? That\u2019s what I would type into ChatGPT about Buffalo.<\/p>\n
I literally have two blankets on my lap right now. I\u2019m freezing.<\/p>\n
Yes, you could use the ChatGPT and ask, \u201cBuffalo, New York, new development, and growth.\u201d From there, you\u2019d get a synopsis of probably population growth as well as job growth. The new development part I love to put into place, because it will tell you if there\u2019s specific areas where there\u2019s new construction coming, maybe there\u2019s new luxury apartments in the area, and that could also signal growth as well.<\/p>\n
That\u2019s very interesting. A couple other resources that I\u2019ve used before were Bright Investor and Neighborhood Scout to actually collect data too. Before that, I was searching every separate single website myself, going to Crime Mapping, going to the GIS County mapping software, every little place I could find data from, but that is very time-consuming. I appreciate you giving us some insight on that, of how to actually accelerate getting all of that information together.<\/p>\n
Yeah, ChatGPT, they\u2019ve been making some updates to their tool as well, so it\u2019s like 20 bucks a month, like their pro version or whatever it is. Now, you can upload data sets to ChatGPT, and it\u2019ll analyze it for you. It\u2019ll automatically browse the web for you now as well. The tool\u2019s gotten really, really cool in terms of the information it can pull in quickly.
I think for a lot of rookies that are doing that initial research, using a tool like ChatGPT to say, \u201cHey, what are some markets across the country that have low crime scores and good population growth?\u201d That\u2019ll at least give you a good starting spot. Man, the way these tools are progressing, it\u2019s pretty crazy.<\/p>\n
Yeah, it is at a rapid pace. Actually my secret is actually not ChatGPT exactly, but using Bard, Google Bard, its ChatGPT equivalent, but I find it a little bit more superior. It also pulls in data from Google Maps and the whole Google Suite products. That\u2019s actually my favorite one that I use, and it\u2019s free.<\/p>\n
Oh, awesome. Thank you for sharing.<\/p>\n
Yeah, we need do a whole episode on just all the AI tools that are out there. I haven\u2019t tried Bard yet. Ashley, have you?<\/p>\n
No, I haven\u2019t.<\/p>\n
Yeah, me neither. You said it\u2019s free?<\/p>\n
Yeah, it\u2019s free. You just activate it on your Google account and you could start typing away.<\/p>\n
Well, we know what Tony\u2019s doing the rest of the day. Holding a baby.<\/p>\n
Yeah.<\/p>\n
Using Bard.<\/p>\n
Playing with some AI tools. Well, so let\u2019s go back to your journey, though, Ariel. You do all this data kind of collection, and where were you living at the time when you first started? You said in New Jersey?<\/p>\n
Yes, in New Jersey.<\/p>\n
Gotcha. Okay. A somewhat more expensive market, right? New Jersey, New York, California, all these places are a little bit more expensive. Do you decide to initially invest in Jersey, and if so, what data did you see that kind of supported that decision?<\/p>\n
Yeah, so there were three things I was looking into, which was one, first, how am I going to invest? What\u2019s going to be my strategy? New Jersey, being an expensive market, putting 20% down in a 300K home, so $60,000 down, wasn\u2019t viable for me at the time. I started to realize that the strategy I could take was one where I would live in the property first, and then rent it out after a year, so owner occupying it.
Once I understood my strategy, the next step was, where was I going to invest in New Jersey? Even though it\u2019s a small state, there\u2019s a lot of areas you could find. I wanted to do a 50 minute to one hour commute into New York City, and there were two options there, train or bus. Bus can have traffic, so I chose train. I started to look at different train lines, and what train stations and cities were near those train lines. North Jersey was too expensive, so that was Xed out. The where ended up becoming on the east coast of New Jersey.
There were three towns in particular, Woodbridge, South Amboy, and Matawan that were most interesting. Then the last piece there was, \u201cWell, what am I going to invest in?\u201d I really wanted to invest in a duplex, but again, didn\u2019t have the capital to fund that. I decided on a single family home, but I used data to be able to analyze properties that had an additional bedroom opportunity.<\/p>\n
How did you do that?<\/p>\n
Yeah.<\/p>\n
When I think of it, I see like, \u201cOkay, I\u2019m analyzing a Zillow photo, being like, \u201cNow, could I turn that room into an extra room?\u201d Trying to figure out what the layout is just from the photos, have somebody on my team going to look at it or on the MLS. Please, tell us more about that.<\/p>\n
Yeah, so my agent that I used at the time was one of my friends. I said, \u201cJeremy, this is getting difficult to go through Zillow, property after property. Could you send me just a list of the properties in a spreadsheet from your view in the MLS?\u201d He sent me that, and what I was looking for were properties that the size of the square footage was larger than the number of bedrooms, to see if there was maybe a dining room, or some extra space, maybe an office nook, that I can transfer into a bedroom in the future.
With that, I did a quick calculation of square footage divided by bedrooms, and found this one property that was about 1,300 square feet with two bedrooms, which in the area I was targeting, I knew there could be possibly a third bedroom in there. We went to visit the property, and we saw the master bedroom was facing the street, which was kind of unusual. When we went upstairs to it, we saw that there were two closets on each end, two windows, and it looked as if it had been two separate rooms at the time.
Looking back at court records, it actually was. That was what initiated me to put an offer, and ultimately go through with that property.<\/p>\n
We got to pause there for a second. That is such a ninja trick. I\u2019ve never heard of anyone doing that before, like, \u201cHey, I\u2019m going to get an export of all of the properties, and then just put a little formula in Excel that compares the bedroom count to the square footage.\u201d Then basically, you were just looking for properties that had a really good ratio between square footage and bedroom count. That is awesome.<\/p>\n
Exactly. Simple, but effective.<\/p>\n
Yeah, because especially now, given where we\u2019re at in the interest rate environment, it\u2019s getting harder to find good deals. You\u2019ve got to get more maybe creative on the front end to find those deals that have opportunity to maybe add some additional value. What you just described is that\u2019s something that every single person listening right now can do is just ask their agent for an export, and then search and filter, and do that little trick. That was cool. I really liked that. Sorry, the nerd in me is geeking out over that one. That was cool.<\/p>\n
Usually, you\u2019ll hear people talk about scrubbing the detail of the listing, the description, and looking for office, or bonus room, or something like that to look for an additional bedroom. Yeah, that is great insight, comparing the square footage to the actual bedroom count.<\/p>\n
Yeah, multiple ways to go about it.<\/p>\n
Yeah. You find this property, and then tell us what happens next.<\/p>\n
Yeah, so once we sign to the property, next thing was actually house hacking it. What that meant was having other people live in the property alongside myself. It was my partner, him and I, as well as a family member. My mortgage of $1,800, I was only paying 600 of it, and that really helped to propel me to save more money for my next deal.<\/p>\n
I was just going to add some clarification there, because I think a lot of times, when people hear the phrase house hack, they immediately think like small multifamily, where I\u2019ve got to go out and get a fourplex or a triplex or a duplex. You can house hack in a single family home.
I don\u2019t remember which episode it was, we interviewed Craig Curelop, and he authored the book on house hacking for BiggerPockets, and he said one of his first house hacks, it was a single family home, I think, but he was renting out every room in the house, and he was sleeping on the couch. Isn\u2019t that what he said, Ash?<\/p>\n
Yeah.<\/p>\n
He was renting out every room and he was sleeping on the couch. Even if you go out and you buy maybe a big, single family home, even if you\u2019re only one person, you can still house hack that. I love that you took that approach, once you realized that the small multifamily wasn\u2019t necessarily in your price range.<\/p>\n
Yeah, 100%. Honestly, at first, I was nervous about living with two boys. I was like, \u201cOh, my god, this is going to be like a pigsty every day,\u201d but it wasn\u2019t at all. It worked out very well.<\/p>\n
You know what, there\u2019s no drama, though.<\/p>\n
Yes, exactly. Just sports playing in the background all day, but that\u2019s it.<\/p>\n
Okay. After you got this first property in your house hacking, is this where you got bit by the real estate bug?<\/p>\n
Yes, it was. I wanted to continue investing. I wanted to live in the property for a full year, though. I started to look at other investment opportunities that would be solely an investment where I put 20% down. Unfortunately, New Jersey being expensive, I started to look out of state instead. I particularly looked at Detroit, Michigan, with affordability for properties being lower, as well, I had someone in my network who had invested there and kind of leveraged their knowledge.
What was really exciting there is I started to now get more in depth with my data analytics. I didn\u2019t feel as comfortable at that stage asking the agent for just a download of the data. Now, I\u2019m looking at a wider scope since Detroit\u2019s pretty large. With that, I actually use web scraping. Web scraping is copying information from the web as if you were going to Zillow, and copying down the property address, bedrooms, bathrooms, but instead of doing that manually, you could do it automatically.
I was copying that information down, and I started to get a little bit down on myself because the duplexes were a little bit out of my price range, about 150, 160, and I was looking to spend around 130. I started to look at single family homes, and I put them up in a chart. I wanted to see the distribution, so the characteristics about the data of the properties, to see how many were three bedrooms, four bedrooms, et cetera.
I saw there was one single property that was five bedroom, two bath, single family. I\u2019m like, \u201cOkay, that\u2019s kind of odd.\u201d I go to look further into that property at the description, and long and behold, it says duplex in the description. The agent actually listed it incorrectly, and it was priced about 25K lower than the other duplexes. I was able to make an offer in that case, and get it accepted at a lower rate.<\/p>\n
Wait, so sorry, I just want to pause and make sure I\u2019m understanding what the scraping process was. How did you scrape all of this data? Is there a tool that you\u2019re using? What are the steps to do that if someone wanted to replicate that?<\/p>\n
Sure. At that time, I was using Python to do so, so programming language, but today, it\u2019s even easier. You could use tools like Browse AI, for example, where you basically screen record how you would manually go about the process, what information you want to capture, and then it will automatically get that data for you, either when there\u2019s something new on the web page, or if you want to set it every day, every week, it\u2019ll get that information, and put it into a spreadsheet.
At that time, I did do it with Python, and I was able to get the information across the city for all properties listed on market in a spreadsheet to analyze.<\/p>\n
Ariel, you\u2019re saying that this tool, Browse.ai, I can sign up for this website, go to any website that I want, screen record the information I want from that website, and this tool, using AI, machine learning, whatever, will pull whatever data I want from that website automatically?<\/p>\n
Yes, exactly. There\u2019s many tools similar to it.<\/p>\n
That\u2019s crazy. I could go to Zillow. This is one of the things I\u2019ve been thinking about recently, and now I\u2019m just asking you selfishly for myself at this point, but we\u2019re looking to do more rental arbitrage, and part of the issue is like, \u201cMan, there\u2019s so many listings for rents, and what\u2019s a super easy way to kind of compare the short-term rental revenue projections to the long-term rental revenue projections?\u201d
That way, I can see what that margin is, and ideally, I only want to reach out to listings that have more margin. Could I use Browse.ai to scrape all of the listings that are currently for rent, and then also scrape the revenue projections from an AirDNA and then compare those two things together? Could I set it up to do that, or am I thinking too far ahead now?<\/p>\n
Yes, you could definitely set that up. What\u2019s really cool about Browse.ai is that they have readily available bots for Zillow as well, and I think Redfin too.<\/p>\n
Well, I know what I\u2019m doing tonight.<\/p>\n
Yeah, and just to add, no code, and it takes about anywhere from 10 to twenty-five minutes to set up.<\/p>\n
I better text Daryl to get me an Alani, because it\u2019s going to be a late night. I\u2019m just going to go into a big deep hole of researching all this and setting this all up.<\/p>\n
To get started, you could do it all without code using Browse.ai, and there\u2019s actually videos that I have of tutorials, where I take you from beginning all the way to the end of creating these web scraping bots, all on your own, within 20 minutes to set up.<\/p>\n
Make sure you check out the show notes after the episode where we are going to link everything. If you get distracted and go to the show notes now, you may miss another amazing link that Ariel has for us, so make sure you wait until the end, but we\u2019ll put them all in there.
Thanks to our great producers and editors that will catch all of these amazing resources that we are learning here. We know Tony has already, have all the web browsers open of each one, making sure he doesn\u2019t forget to go through it.<\/p>\n
Yeah, I\u2019m just so surprised that Ash and I live, eat, and breathe real estate investing, and that neither one of us have heard of this tool. There are so many things out there now that make it so much easier for the rookie investor to find their first deal. Ariel, thank you so much for showing these tools to people that otherwise never would\u2019ve heard of them before.<\/p>\n
I want to say something about that real quick, because I think that\u2019s almost, in a sense, just like real estate investing. When you\u2019re starting out with real estate investing, there are so many different strategies, so many different ways to make money that it\u2019s just overwhelming with all of the options. I almost feel that\u2019s how AI is getting today, that it\u2019s so overwhelming with all of these different things and capabilities that you don\u2019t even know where to start, or things that are available, things like that.
Think about just on this podcast, all of these things that we have learned, like, \u201cOh, my god, you\u2019re doing what to this mobile home? That\u2019s amazing. We didn\u2019t even know that was a thing.\u201d You\u2019re still constantly learning so much and being educated of all these different ways that you can make money, and also be efficient and effective at running your business.
Ariel, let\u2019s get back to your story, now. Now that we\u2019ve got on these tangents, and I am sure there\u2019s going to be another one that me and Tony are wowed by and need to implement immediately into our business. We left off that you were looking into Detroit. You were scrubbing for properties. Did you find one?<\/p>\n
Yes, I did. It was that property that was a five bed, two bath listed a single family, but was actually a duplex, and was able to get that at a discount of around 25K because of that.<\/p>\n
The discount was 25K, or you got the house for 25K?<\/p>\n
Oh, no, the discount. That would be incredible, right?<\/p>\n
I was going to say, we have heard of houses being cheaper in Detroit, but I was saying, it\u2019s been a long time since we\u2019ve had anyone say they got a house for 25,000.<\/p>\n
You said it was listed as a duplex, so did you have to go in and do any work to it, or was it truly already a duplex, and they just listed it incorrectly?<\/p>\n
Yeah, truly a duplex. I went to the county website just to confirm, and it was. It was just listed incorrectly by the agent.<\/p>\n
Wow, that is insane. You found two killer deals just by finding little nuances in the data, which I think is super interesting.<\/p>\n
Yeah.<\/p>\n
Then I guess just one side question, Ariel, a lot of people, I think, have fear of investing out of state, and even more so people, Detroit, with some investing groups, has a bad stigma. Were you not nervous at all about investing out of state for your second deal?<\/p>\n
I was nervous, and I went in person to get some boots on the ground, just to solidify what I saw in the data. Prior to, I was looking at Niche.com, which gives overviews of neighborhoods, and I wanted to find a neighborhood in Detroit that was more so skewed of ownership versus renters. Since usually there\u2019s pride in ownership, maybe the lawn is more up kept, less trash.
There was a neighborhood that I was particularly interested in, Bagley District in Detroit, and luckily, having boots on the ground helped me to confirm that\u2019s where I wanted to invest.<\/p>\n
Let\u2019s kind of talk about your confidence in investing out of state. How did you build your team there and feel comfortable investing out of state? Sometimes that is a barrier of entry for people is that they don\u2019t know anyone in a market, and they don\u2019t trust a lot of people. What are some of the things that you did to feel comfortable and confident investing out of state?<\/p>\n
Yeah, I read David Green\u2019s book, Investing Out of State, and that really helped me, because as someone who\u2019s very methodical, being like a data scientist, I like to have a checklist of what I\u2019m doing. I felt like that book was my checklist. In the back of my head, my mom, she was always like, \u201cAy Ariel, why are you doing this? Why are you investing out of state? Just sell a property you have. Sell everything.\u201d
That\u2019s always her mindset, but at the same time, she holds me accountable to follow criteria. She read the book too and she was like, \u201cDavid Green said to follow this step as well. Make sure you talk to your agent about these things, your lender about some other topics.\u201d I think properly screening my agent, my lender, meeting them in person as well really helped me to feel confident and be able to invest in Detroit.<\/p>\n
You were starting to talk about, before I rudely interrupted you, but you were talking about your next market that you decided to focus on.<\/p>\n
Yeah. Now, it\u2019s March of 2020, and I\u2019ve been able to save money by house hacking the property that I was currently in. I have some money saved, and then the pandemic happens, and a lot of people are moving to remote work. I selfishly had already been working remotely twice a week, and I was like, \u201cUgh, I wanted to keep this secret to myself, and now everyone\u2019s going to work remote, realize how amazing it is.\u201d
I thought, though, there could be some opportunity here. We always hear if you could invest in 2008 way long ago, you would be well off today. I thought even though despite this, what\u2019s going on in the world, maybe there\u2019s opportunity here. There were two things that I noticed that I liked about working remotely. One thing was, or I guess an epiphany, was weather. If I could work anywhere, why am I working in cold New Jersey where I can\u2019t do things for six months out of the year? Sorry, Ashley, I know you\u2019re a New York girl, but not my preference.
Then the second piece was income. In my head, I was like, \u201cIf I could work anywhere and program anywhere in the world, why would I do it in a place where I\u2019m getting income tax? If I move somewhere else, I could instantly give myself a bonus of 10 to 20K instantly, just by leaving the state.\u201d I thought, \u201cIf I\u2019m thinking that, other people would think that soon too.\u201d April 1st is when my partner and I, he and decided we were going to do whatever it took, eight weeks, figure out a market, figure out a place to live, and rent out our property on our own for the first time.<\/p>\n
That\u2019s super exciting. Do you want to kind of give us some of the numbers on a couple of your deals?<\/p>\n
Sure. A property that I have in Tampa, Florida, a single family home, purchased it for 274K, put 5% down, was able to house hack it. At that time, my portion that I was putting myself was 550 a month. When I ultimately rented it out, the whole house itself, it was at 2,500. My cash flow there was about 700 or so.<\/p>\n
Wow, that is amazing. I\u2019m shocked right now. These are such good deals, and the way that you\u2019re finding them, it\u2019s amazing.<\/p>\n
What has been your favorite deal so far?<\/p>\n
Yeah, my favorite deal was probably my property in Tampa, Florida in the Seminole Heights area. At that time, I had already been living in the Tampa area for about a year, but I wanted to find an up and coming area so that I could really leverage having a house that appreciates, and then be able to use that money in the future for maybe a future rental property. I was having difficulty at that stage, because it was 2021, people were outbidding one another left and right, getting a lot of people from the north who were coming with all cash offers.
I would be sitting in a meeting, I would get a notification on Zillow, a new property, met my criteria, but by the time I analyzed it at night, there was already people who saw the property and possibly already outbid me. What I decided to do analytics-wise is I paired my notifications that I got from Zillow with Zapier. Zapier is a tool that allows you to communicate with different applications. What I would do was every time I got that email, I would strip the email, take out bedrooms, bathroom, price, and property address.
I would then take that and then go to an API, so a way to get data externally for that property. Next step was automatically calculating cash flow through Zapier, just adding a couple of calculations. Then this last piece there was sending myself a text message if it met my criteria. Now, as a data scientist, I\u2019m sitting in meetings throughout the day, and I could just get notification once the property in my criteria also met my certain cash flow metrics. It saved me a lot of time down the line.<\/p>\n
Sometimes, we interview guests\u2026<\/p>\n
If you guys aren\u2019t watching this on YouTube, you need to watch Tony\u2019s facial expressions.<\/p>\n
We use Zapier in different parts of our business, but I\u2019ve never thought to use it to help with deal analysis. You\u2019re so close to the problem sometimes, you don\u2019t realize that the easy solution is staring you in the face, and what you just shared is such a simple solution to be able to move faster when it comes to deal analysis.
A lot of that high level stuff, it is just basic formula. You can kind of go in and do some nuanced if you want to, but man. Sometimes we interview guests, and we end up learning more, I think, than even our audience does. I love this conversation. That\u2019s amazing. Ash, have you used Zapier at all before?<\/p>\n
Yeah, but literally just like my National Fuel invoice comes into my email, it gets filed into my Google Drive. That\u2019s it, more of just filing stuff, the emails that I get regularly. You use it too, right?<\/p>\n
Yeah, we use it quite a bit, more so on the marketing side, but yeah, never for actual deal analysis, which that just unlocks a whole new level here.<\/p>\n
Yeah. The exciting part there, it was actually no code to set up. Pretty easy, just using all of Zapier\u2019s readily available tools.<\/p>\n
Guys, for our rookies that are listening, hopefully you\u2019re not feeling overwhelmed by some of the talk that\u2019s going on, because a lot of what Ariel said is like, \u201cYeah, you don\u2019t need to know how to code. You can probably watch a couple of YouTube videos, figure this stuff out.\u201d She\u2019s given you tools that are literally just, click the buttons you want to click, and the tool\u2019s going to do what you want it to do.
Just having the courage to go out there and start playing around with some of these things, I think, gets you on the road to using them in the way that Ariel has here. Backtracking quite a bit, I don\u2019t know if we asked this question up top, but if you can just set the table for us, Ariel, what does your current portfolio look like today?<\/p>\n
Six units.<\/p>\n
Across how many different markets?<\/p>\n
Four different markets, so New Jersey, Detroit, Tampa, and then Playa del Carmen.<\/p>\n
Playa del Carmen? All right.<\/p>\n
Let\u2019s talk about that one.<\/p>\n
Yeah.<\/p>\n
Did you do kind of the same market analysis, or was this because you want to vacation there? Tell us a little more about sourcing that deal.<\/p>\n
Yeah, similar market analysis, kind of thinking, \u201cOkay, if everyone can work remotely now and they have the choice to work, say, out of the country, where would they most likely work?\u201d There\u2019s two options. If you\u2019re going out of internationally, probably Canada or Mexico would be the top, since they\u2019re still in North America. Mexico\u2019s warmer. I thought more people would move down there.
I started to look at cities around major airports, so Cancun being one of them, I saw Playa del Carmen was a city that\u2019s had a lot of growth over the last several decades, and in particular, it was already growing as an expat hub. I was going into the Facebook groups and seeing people communicate there about loving living in Playa del Carmen, the low cost of living, and some information about investing there too. With that, I started to sync with multiple different agents to talk about new development condos that I could possibly invest in.
I was a bit wary at first, because there could be scams investing abroad. I read up a lot on that, and I made sure I went with a developer that already had completed 18 condo buildings. I knew that there was already backing, and felt more solidified to go through with that deal.<\/p>\n
How did you finance this deal?<\/p>\n
I financed the deal initially with a down payment that I had from a 401K from a job that I changed through, but I actually didn\u2019t have the rest of the money that I would need. The deal was 160, put 60K down, but I didn\u2019t have the 100 grand. I was like, \u201cWell, you know what? I\u2019m going to figure it out as I go along.\u201d It helped me to get creative. There were two things that I did.
One, all the knowledge that I\u2019ve had about analyzing a market and list building, I put that into courses, which helped me to raise money for my deal. On the second end was that house that I had in Tampa Florida, that appreciated quite a bit, if in only a year. I was able to get a HELOC, so a home equity line of credit, on that property, to then pay off the rest of the Mexico condo.<\/p>\n
Then you just used money from that condo to pay off your line of credit?<\/p>\n
Exactly.<\/p>\n
That\u2019s such a great tool to use is to looking at your other properties, leveraging them to purchase another property. I think sometimes, it\u2019s easy to get caught up as to like, \u201cOh, well the cashflow on my duplex, if I take a HELOC out on it, my rents won\u2019t cover the HELOC.\u201d Well, no, you take the cashflow for the rents from your new property, and go ahead and pay that off.
Just because the collateral isn\u2019t the same doesn\u2019t mean that you can\u2019t take rent payments to pay off debt that you used to purchase and fund that property. That\u2019s for another property.<\/p>\n
Then for the Playa del Carmen property, Ariel, are you short-term renting that, long-term, medium-term? What\u2019s the strategy on that property?<\/p>\n
It\u2019s a short-term rental, and the plan that, if I needed to, I could always live in the property.<\/p>\n
I\u2019m trying to look out your window right now and see what\u2019s the background there. It\u2019s not Mexico?<\/p>\n
No, it\u2019s Tampa, Florida.<\/p>\n
Just you being in Florida, building out that team that you need to run a short-term rental in a different country, I\u2019ve never even done that before, what steps did you take to find good cleaners, good handymen in that local Playa market?<\/p>\n
Yeah, luckily there\u2019s already a property management company that was synced with the condo building, as most investors are taking the same strategy. I did speak with them, asked a few questions, felt comfortable, and they\u2019ve handled that part on their own. Then I\u2019ve also Airbnb\u2019d my property in Tampa. I\u2019ve taken a similar approach of working for property manager.<\/p>\n
Let me just, final question on that piece. What made you go the property manager route, even for the Tampa home versus doing it yourself?<\/p>\n
Oh, I wanted to really do it myself completely, just to save cost, but I had to take a step back and reflect, and realize all the things that I\u2019m doing doesn\u2019t end up being worth my time to answer calls, to, say, clean a property when I could be coding, and developing solutions, and helping out other people. It had to do a give and take.
Luckily, in that case, with the Tampa Florida house, I was able to get 15% for a property management fee, which is actually pretty low for the industry standard, since a friend and I did it at the same time for our properties.<\/p>\n
Well, thank you so much, Ariel.<\/p>\n
Yeah, so much good information. I feel like we keep talking, we just got to keep bringing you back. I got so many more questions to ask you about all these [inaudible 00:38:27].<\/p>\n
I know, once we start actually digging into it, we\u2019re going to have a lot of questions, but we\u2019re going to turn to your YouTube channel to check those out. Make sure you go into our show notes to find Ariel\u2019s YouTube channel to learn more. We do have a Rookie Reply for you today. If anyone would like to submit a question, you can go to biggerpockets.com\/reply, and insert a question that we may play on a Rookie Reply episode, or we may ask it to a guest.
Today\u2019s question is from Laurel. I\u2019m working towards getting my first property, and I\u2019m considering going off market to really be able to find a property that is a deal. I see properties posted on Facebook, but because I still have my W2 and work during the day, I tend to be too late to get in contact with the sellers, and the deals are already under contract by the time I found the listing. Is there a way to see properties or be notified when properties are posted to social media? Thank you.<\/p>\n
Yeah. Here\u2019s where we could use web scraping bots, similar to Browse AI as well as Applify. We can take the link of our Facebook group, plug it in, and then screen record how we would capture a deal, what is the information we want to get from that post, possibly the listing price, maybe an email we want to take from it. Then from there, we can have it set up on a daily structure, where we get information in a spreadsheet that came from that Facebook group.
That way, we don\u2019t have to go in manually every single day to get that, or we could even set it up on another way, where we get automatic notifications every time the page changes based on our parameters. We could set that up with no code at all, be able to read in data from Facebook groups, put it into a spreadsheet, and have that ready to analyze right away.<\/p>\n
Wow, that is super cool. I actually spend a lot of time on Facebook Marketplace. I really don\u2019t like social media in general, but there actually have been a lot of great off-market deals posted on Facebook marketplace, and they do get traction so fast. I\u2019ve been looking at lake houses. A lot of times, people will list their lake house in the Facebook group of like, I don\u2019t know, the example Lake Association, Be Neighborly, or something like that.
It will post it. People will post it in there, or they\u2019ll even say, \u201cWe\u2019re interested or thinking of selling our property,\u201d and stuff. The next day, it\u2019s already sold. It\u2019s gone.<\/p>\n
I\u2019m just going down the rabbit hole right now of all the tools that Ariel is sharing with us. I guess just for my own knowledge, between Applify and Browse.ai, which one do you like more?<\/p>\n
I like Browse.ai more. However, if there\u2019s a custom site that you want to scrape, say it\u2019s a foreclosure website, or maybe something about the county website, probably going an Applify way would be easier, because you can actually contract out specific freelancers for more intricate web scraping tasks. They both serve a purpose, but a little bit differently.<\/p>\n
Man, amazing. All right, let\u2019s go to our Rookie exam. These are the same three questions we ask every single guest. I\u2019m getting caught up in my words because I\u2019m so excited from the tools you\u2019re sharing with us. Question number one, Ariel, what\u2019s one actionable thing Rookies should do after listening to your episode?<\/p>\n
Number one thing is to be data-driven. Don\u2019t just go into Zillow, select a property at random and say, \u201cI\u2019m going to invest in that.\u201d You could use data-driven tools that are for free and readily available. We could use Bard, Google, or ChatGPT to ask questions, start to narrow down what areas you may be interested to invest in.
You could also use free resources from Zillow and Redfin. They have posts every single month from their data centers on meeting listing price, rent prices, sales cuts, and that can help you to start to analyze where you want to invest, and where has more growth versus areas that are declining.<\/p>\n
What is one tool, now, this is going to be hard to narrow down, one tool, software app, or system in your business that you use today?<\/p>\n
Selflessly it would be Coffee Clozers, the company that I\u2019ve co-developed with two other folks, to help find cash flowing deals in up and coming areas, and to tag properties that have opportunity. We\u2019re able to get information from the MLS, and aggregate that data to help pinpoint what is the right deal at this moment to be investing in?<\/p>\n
For our last question for you, Ariel, where do you plan on being five years from now?<\/p>\n
Five years from now, I hope to be full-time within my real estate startup company. It\u2019s accelerating, and we\u2019re helping people find deals, as well, I would like to be financially free, where I can help underprivileged communities learn how to program. One thing that I\u2019ve taken away from my tenure, apart of my career, is I\u2019ve never actually worked with another Dominican data scientist. I\u2019m always the only one, which has come with some barriers, but I would love to be able to help others get into the programming space.
Unlike other careers, where you sometimes need to have some wealth to afford the right degree, or have the right network, programming, you can just get started instantly. All you need is internet connection. You could go to a library and use their computer. As long as you have an interest and curiosity, it\u2019s a great field to go into and I\u2019d love to help people there.<\/p>\n
Well, Ariel, thank you so much, and you have helped a lot of people already on today\u2019s episode. Thank you so much for taking the time to share your knowledge, and experience, and for us to learn about your investing journey. Well, Ariel, thank you so much for joining us on this Rookie episode. I\u2019m Ashley at Wealth From Rentals, and he\u2019s Tony at Tony J. Robinson. We will see you guys for our next episode.<\/p>\n