\n<\/p>\n
Could ONE multifamily<\/strong><\/a> rental property<\/strong> change your life? Just five years ago, Jaryn Pierson<\/strong> was sleeping on his grandma\u2019s couch, working a minimum-wage job<\/strong>, and getting sober. But when the right deal<\/strong> came along, it altered his financial future<\/strong>!<\/p>\n Welcome back to the Real Estate Rookie<\/em> podcast<\/strong>! Jaryn discovered real estate <\/strong>during the lowest point of his life. <\/strong>When friends and family warned him not<\/em> to invest, he bought a duplex<\/strong><\/a> in his hometown. Today, that property nets $30,000 in <\/strong>cash flow<\/strong><\/a> each year! Since then, he has only added to his portfolio\u2014buying an eight-unit apartment building<\/strong> through a RARE seller financing<\/strong><\/a> opportunity and launching his own property management company<\/strong>. His old minimum-wage job? He\u2019s still got it, only he has been promoted to general manager<\/strong> of multiple locations<\/strong>!<\/p>\n In this episode, Jaryn shares some of the biggest lessons<\/strong> he has learned during his real estate journey<\/strong>\u2014from becoming a better Airbnb host<\/strong> to raising rents<\/strong><\/a> on long-term tenants<\/strong>. You\u2019ll also learn how to find properties to manage<\/em><\/strong>, as well as why you should focus on stabilizing your portfolio<\/strong> rather than scaling<\/strong> it!<\/p>\n Ashley: Tony: Ashley: Jaryn: Tony: Ashley: Jaryn: Ashley: Tony: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Tony: Jaryn: Tony: Jaryn: Tony: Jaryn: Ashley: Jaryn: Tony: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Tony: Ashley: Jaryn: Ashley: Jaryn: Tony: Ashley: Tony: Ashley: Tony: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Tony: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Tony: Jaryn: Tony: Jaryn: Tony: Jaryn: Tony: Jaryn: Ashley: Jaryn: Tony: Jaryn: Tony: Ashley: Jaryn: Tony: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Tony: Jaryn: Tony: Jaryn: Ashley: Tony: Jaryn: Tony: Ashley: Jaryn: Tony: Jaryn: Ashley: Jaryn: Tony: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: Jaryn: Ashley: 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 359-er. My name is Ashley Kehr, and I\u2019m here with my co-host, Tony J. Robinson.<\/p>\n
And 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. And as always, we have a great story for you. Today, you\u2019re going to hear from Jaryn and how he went from grandma\u2019s couch, making 15 bucks an hour, to cash flowing over $30,000 in his first year investing in real estate.<\/p>\n
We are going to understand the power of buying your first home and how it can unlock your investing journey. Jaryn, welcome to the show. Thank you so much for joining us today. Can you paint a picture for us and tell us a little bit about life before you bought your first property?<\/p>\n
Yes, I can. First thing I wanted to just clarify or get out there is I want to say thank you. I think sometimes, when we do stuff like this, whether it\u2019s to grow our own brand or whatever, our intentions are maybe a little different than actually what comes out of it. But four years ago, maybe five, I was unpacking the timeline a little bit this morning. I was sleeping on my grandmother\u2019s couch, not by choice, and I can\u2019t say that I\u2019m much of much, but literally because of listening to this podcast and buying the books, getting my hands dirty a little bit, I have some rental properties. It\u2019s not that magic and it really is the community and people like yourselves who do this that it\u2019s crazy, just the life that\u2019s been given to me over the last few years. I\u2019m not even going to cry, but it\u2019s emotional.<\/p>\n
Oh, Jaryn.<\/p>\n
Don\u2019t worry, we\u2019ll make you cry by the end of the episode, Jaryn.<\/p>\n
It\u2019s emotional. It\u2019s real stuff.<\/p>\n
Yeah. Well, that was very heartfelt. Thank you.<\/p>\n
I just want to add, man, kudos to you for taking the action because across the BiggerPockets community, the podcast, the books, there are millions of people who consume the content that we put out through BiggerPockets, but only a fraction of those people actually use what they\u2019re learning to take action, to implement, to do the things they need to do. And you\u2019re a part of that group, man, so kudos to you. And now you get to inspire the next generation of real estate rookies to follow in your footsteps, man, so super excited to have you on the show today.<\/p>\n
Yeah. So quick backstory. Basically, like I just mentioned, I would say four or five years ago, I was living on my grandmother\u2019s couch, sleeping on my grandmother\u2019s couch, not by choice. I don\u2019t need to go too deep into this, but basically I was getting sober in that process. And because I was in my mid to late 20s at that point, I was partying too much and I had no direction in my life. That pain created this positive feedback loop and I just didn\u2019t really know where to go with life.
So started to get that foundation together, started to move forward, and this is all going to tie into my job at the bike shop because it\u2019s been five years now, which is amazing. I just needed a job where I could go to work, leave work, at work, and focus on myself outside of work. I say that I\u2019m a recovering restaurant industry professional. My time was up in that career and I needed to make a change and it needed to be simple. I\u2019ve always been a bike rider, so the bike shop felt like a good fit. I was living on grandma\u2019s couch. I didn\u2019t need a ton of cash, so $15 an hour, a.k.a., better known as minimum wage back then, was fine. I didn\u2019t really care.
I had been doing that, really happy, some of the best years of my life. Those first two years at the bike shop, I was riding my bike all the time. I was focusing on myself. I was learning about different things, where I wanted to go, and I didn\u2019t think about money once for those one or two years. It just was like something that came in my bank account and then I would use it to buy a candy bar and a bike ride. That was it. I wasn\u2019t thinking about financial education or setting myself up for the future. I was just trying to build a foundation that maybe a lot of people got in their late teens, early 20s. I was just doing it in my late 20s.
So get the girlfriend. That starts to come together. And she had moved home because of COVID, and we had known each other for a long time, but we got together in a romantic way during COVID. I would say about halfway through that, she is all excited because she had been laid off three times through that process of COVID, whatever, and finally gets a job offer and it\u2019s a six-figure job offer. And at this point, I feel like I\u2019m doing really well. And then she\u2019s like, \u201cOh, my god. I\u2019m moving back to New York. I just got a six-figure job.\u201d And I\u2019m trying to be happy for her, but I\u2019m like, \u201cOh, my god. What is six figures?\u201d I\u2019m making 16 bucks an hour or something at this point.
So that was super painful. The pain of a tenant calling you and saying that the toilet is overflowing and you need to come get it, I promise, anybody listening, is much less than falling behind. That is way more painful. So that was the catalyst though, to, all right, dude, you\u2019ve got a lot of other things going as a foundation in your life right now, exercise, morning routine, reading at night, whatever. But financial something, it wasn\u2019t anything I was looking at. It was like, okay, I\u2019m uncomfortable. There\u2019s some growth that needs to happen.<\/p>\n
Well, okay, so what happened with the girl? Did she go off to New York and now you\u2019re home and you\u2019re trying to figure it out? Did you break up? Did you stay together? Is it long distance? We need some more details.<\/p>\n
Great question, the girl, the girl. Still in a relationship with the girl, going on four years, basically three and a half, four years. She moved to the city. She took the job. And I, throughout this whole time at the bike shops, I had been trying to figure out how I could be of more value to the bike shop. I love the business. I wasn\u2019t thinking about getting a new job. I was thinking about how can I learn more things to help this bike shop grow? If I fast-forward a little bit, I started as just whatever employee at the bike shop. We didn\u2019t have roles or an org chart back then and we read books like Traction or all these books, and now we have four stores. I\u2019m the general manager of the whole business, grew that business, added value.
So basically, girlfriend moves to New York City and we\u2019re like, \u201cOh, my god. How are we going to figure this out?\u201d And she had a few months from when she got the job offer to when she moved to New York. So I had a little bit of time or we had a little bit of time to figure it out. So I very quickly started watching Graham Stephan YouTube videos. He\u2019s like a financial influencer YouTube guy or whatever, and he was talking about buying duplexes and investing in real estate. I needed a place to live. I wasn\u2019t on grandma\u2019s couch anymore, but I was renting a house. It was whatever. I wasn\u2019t paying any equity to myself, that\u2019s for sure.
And pretty quickly when the pressure is on, we take some action. Got pre-approved, had some money saved up from getting lucky with some Tesla stock. To be honest with you, I had no clue what I was doing. And was like, all right, I\u2019m going to buy a duplex. Not a huge plan beyond that. It was basically like I\u2019m going to buy a duplex, rent out one side of it, with this idea in the back of my head that maybe I\u2019ll rent my apartment out on Airbnb if the relationship works out because I\u2019ll probably be in the city quite a bit.<\/p>\n
So that was a big influence on your part as finding housing that would maybe suit your new lifestyle of traveling back and forth to New York. You want to have a better, strong foundation for your personal finances because this girl is going off making a hundred thousand dollars and you want to provide a better life for her and yourself. So you start to realize you want to look at duplex.
So I want to get into when that moment hit, how long did it actually take for you to actually take action and to purchase that? So start to think about that because we\u2019re going to take a short break and when we get back, I want to dive into that momentum that propelled you from learning about duplex investing until actually taking action. And we\u2019ll be right back.
Okay. Welcome back. Jaryn here is going to tell us about that period of time where he learned about real estate investing and where he actually took action and purchased his first duplex. So Jaryn, tell us about the feelings, the emotions, what you learned and that roadmap you took during that period of time.<\/p>\n
Okay, great question. The duplex, the first house purchase for me, which was about three years ago at this point, a little less. I was reading a lot at that point. I was reading all the BiggerPockets books. I was watching the YouTube books. When I get into something, I can get pretty obsessed and pretty focused on it and it\u2019s really easy to do the work. I also had the pressure, girlfriend was definitely surpassing me in careers, and I had the pressure to keep up and figure it out. And so I had some money saved up, not much, like 15 grand. That was my whole net worth, and it was really negative because of other stuff, but we\u2019ll call it 15 grand in cash I had.
Googled real estate agent. Found one. Picked the first one. She ended up being amazing. We\u2019re friends to this day, but I just got lucky basically. Got pre-approved from the bank. It was just the only reason I picked the bank is because they were the only lenders, actually a broker that had a traditional proper FHA loan. All the banks had products that were similar, but they\u2019re the only ones that had three point a half percent down, and that\u2019s pretty much what I needed.<\/p>\n
And how did you find that out? Were you calling loan officers? Were you Googling different banks? How did you find that out that that was the bank that had that?<\/p>\n
Good question. There\u2019s a few people in my life that are a little ahead of me on this journey and I would just be chatting with them. How did you do it? How did you do it? Local people who are in the same market.<\/p>\n
Yeah. Why reinvent the wheel when you have resources?<\/p>\n
I just want to add too, that\u2019s a really important lesson for rookies to understand, is that banking is almost like a commodity. It\u2019s like any other product that\u2019s out there. You can\u2019t go to Wal-Mart and buy the same things you\u2019re going to buy at Target. You can\u2019t go to the 99 cent store and get the same things you\u2019re going to get at Dollar Tree. So banks are the same way. Each bank has its own suite of products, and sometimes one bank might not have what you need. That doesn\u2019t mean there aren\u2019t 10 other banks that have it. So I see a lot of rookies that feel a little discouraged when they talk to maybe one or two lenders and can\u2019t seem to find the right product for themselves. But there are so many loan products out there and so many different lenders and so many different institutions. Keep looking until you find the right person that matches your unique situation. And it sounds like that\u2019s what you did, Jaryn.<\/p>\n
Yeah, a thousand percent. And if I could add a little bit there. I think a topic that\u2019s discussed a lot on here, but I think sometimes is easily forgotten in the moment, is that the banks make money off us as a consumer or an investor. They need us. So there\u2019s a lot of fear walking into the bank. I had a lot of fear of like, I\u2019m going to get rejected. I\u2019m not going to get approved for a loan. But realistically, if you actually have a little bit of money saved up and your goals or your target is realistic, the banks are going to open the door. They\u2019re going to open the door for you.
So I went to one other bank actually. Got approved for a loan, but the down payment they wanted was a little more than I had to spend. So I went with the FHA loan even though I had to have mortgage insurance and stuff like that. And it was probably, to directly answer your question, it probably was about three months until I started actually writing offers. And we\u2019re in the middle of the pandemic, and so a lot of the noise you can hear is like, \u201cOh, don\u2019t buy real estate. Prices are really high.\u201d<\/p>\n
Dude, we\u2019ve heard that so many times. So many of our guests bought during COVID and ended up being their best deal. I can say for me, my best deal was a property I bought right in the middle of COVID, hands down. Purchase prices were lower. Interest rates were super low. It\u2019ll be hard for me to ever match that deal again. But before we keep going, Jaryn, because I really want to get into the details of this duplex, I don\u2019t think you\u2019ve mentioned what city you\u2019re in yet. What city are you buying this duplex and what city are you shopping in?<\/p>\n
So the first duplex was purchased in Pittsfield, Massachusetts. It\u2019s my hometown. It\u2019s where I was born. I moved away for a long time, but I know the market. I understand the market. At least for that type of purchase, I understood the market enough. I knew the neighborhoods. I knew where the multifamily houses were. I knew where the multifamily neighborhoods that I maybe didn\u2019t want to go into and I knew where the multifamily neighborhoods where I would be okay living and investing in were. It\u2019s not a big city, 60,000 people, post-industry type area. It\u2019s that part of the Berkshires. When I say the Berkshires, it\u2019s like the western part of the state is pretty rural, but Pittsfield particular is like a small metropolitan area.
In a nutshell, the Berkshires are a beautiful place to live. And what feels like is happening is that more and more people are moving here daily, especially the southern part of the Berkshires. The southern Berkshires, because it\u2019s a little bit more affluential, high-end area, it\u2019s a great short-term rental market. A lot of people are coming here on vacation and they\u2019re coming here on vacation, it used to be summertime, but that seems to be more of a nine-month calendar.
From that, the other part of Pittsfield, which I\u2019m interested in or the Berkshires that I\u2019m interested is Pittsfield is pretty open for the taking right now. There\u2019s a lot of old multifamily between two and four units that have been old houses that have been renovated, chopped up into four units, that kind of thing. 50 to 75,000 a unit you can get into pretty affordably, and the rents are strong, 1,200 to 1,500, depending on the bedroom. So if you do some back-of-the-napkin math there, the market checks out not only for cash flow and if you want to bet like me, I\u2019m hoping 20 years down the road that it\u2019s a pretty nice place to live. And people have moved here and we see that appreciation that we hope in the markets that we\u2019re investing in.<\/p>\n
So I just had to look up Pittsfield on the map, the Daily segment of the Rookie podcast where Tony gets his geography lesson. You\u2019re like right on the border of New York state, it looks like, so far West Massachusetts.
Now let me ask this question. And I tell this to a lot of new people that are looking for cities when they\u2019re asking that question of what city should I invest in? I always say there\u2019s really two types of data you have to look at. You have to look at the qualitative information, the qualitative data, and you have to look at the quantitative information. Since you grew up in this city, you had all of the qualitative information. You knew where things were. You knew where the better parts of town were. You had a general sense of is this a good city to invest in? But did you take it a step further, Jaryn? Did you identify any of that quantitative, those hard numbers that still validated your decision to invest in that city?<\/p>\n
Short answer is no, but I have a gut, and a lot of it was based off that for this. It\u2019s like, all right, we\u2019re okay as a city. I live here. I know plenty of people that live here. Things aren\u2019t really going up or down, fairly stable. And to me, the benefits of having a network in the area, whether it\u2019s a friend who can hold a ladder for you or a friend who\u2019s worked with a local real estate agent, that to me for a small duplex purchase was way more important than what are the bigger economic trends in the area.<\/p>\n
For your first deal, you can\u2019t know everything anyways. So there has to be that little bit of gut check like, okay, I don\u2019t know everything. It\u2019s my first deal. I have to take action.<\/p>\n
Analysis paralysis, right? I needed to buy a house and really, I needed a living situation. All the other stuff was ancillary. So it\u2019s like if I started to think about population growth and what new businesses are coming into the area, and I think a lot of people do this, there\u2019s going to be something in that web of data that\u2019s going to tell you this is a bad idea. So I\u2019m just like, I\u2019m just going to do it and see what happens.<\/p>\n
Yeah. I think there\u2019s a benefit, too, that you were looking for something to house hack, something that you could live in and rent out the other side because it just almost automatically force you to circle in on a certain area. So you land on your backyard, your hometown as a city you want to invest into. How long does it actually take for you to find that first duplex?<\/p>\n
I would say three months to get my stuff in order to write offers. I would say 60 days or less to actually have an accepted offer. I probably wrote five to seven offers in that time. My criteria wasn\u2019t anything that crazy. It was like $200,000 or less, two family, couple of different neighborhoods. And beyond that, I was writing offers on anything that fit that bill. I didn\u2019t know enough to be picky.<\/p>\n
So tell us a little bit about that deal. What was the asking price and what did you end up getting it under contract for?<\/p>\n
I think asking price was 179. I think I wrote an offer for 179. I had gone around the merry-go-round a few times of last and final on some other houses and missed out. And basically, the conversation with my real estate agent moving forward was like, \u201cIf we\u2019re going to write offers, let\u2019s just write our last and final offer every time.\u201d There was no writing an offer and then writing an offer under market value. It was different times than today. It was like, this is what they\u2019re asking for. I can make the numbers work enough at that price. I need a house. And that\u2019s how we did it. So it was five or seven offers. Got it under contract at asking price when they asked for last and final. I didn\u2019t change my number. They accepted it. Under contract, learned that I was going to need to have flood insurance.<\/p>\n
So that had to change your numbers a lot-<\/p>\n
Yes.<\/p>\n
\u2026 having to figure out flood insurance. What did that end up costing you a year?<\/p>\n
Well, when you\u2019re stubborn and desperate and need to make something happen, sometimes as things fly in your windshield, you just put the windshield wipers on and keep moving forward. Everything was getting scarier and scarier as we were going through it, but it ended up costing me $2,300 for the first year, which is crazy, but I knew I needed to just make something happen or I wouldn\u2019t be here right now. I knew I could afford it. I maybe wasn\u2019t going to make any money, but I knew I could afford it, so I was like, \u201cWhatever. Screw it.\u201d
Now after the first year, there\u2019s a little bit of stabilization, all this thing is happening or whatever. Not that there\u2019s much stabilization in the two family, but it felt like it at the time. I\u2019m paying 1,050, so 1,050 bucks a year moving forward for flood insurance, which as far as I\u2019m concerned, it\u2019s the cost of doing business at this point. It\u2019s not a big deal.<\/p>\n
Tony, you had a really bad experience with flood insurance, right, in Louisiana [inaudible 00:18:59].<\/p>\n
I was trying to avoid reliving that terrible, terrible experience. Yeah. Our very second single family home, I can\u2019t remember what the exact numbers were, but ours, I want to say our flood insurance premium tripled from one year to the next. And we shopped around to different providers. We talked to different insurance brokers and for whatever reason, we couldn\u2019t get it down, and we ended up having to sell that property. We end up selling it at a loss because either way, we\u2019re going to be losing money on it.
So my lesson is just I pretty much just don\u2019t buy anywhere that\u2019s in a flood zone any more just because I don\u2019t want to run that risk. But if it\u2019s stabilized and you can project what it\u2019s going to be, maybe it makes sense still.<\/p>\n
And that\u2019s happening in Texas and Florida right now too for hurricane insurance and also flood insurance and different things like that where insurance is just changing so drastically. In Houston, for example, there\u2019s large multifamily apartment complexes that are having a hard time getting insurance or it\u2019s going to be super, super expensive. And it\u2019s like when they purchased the deal two, three years ago, the numbers worked, but then when your insurance just skyrockets like that, it\u2019s an expense you don\u2019t account for, and now you have to figure out as the operator or the owner of these properties as to how to make that deal work, especially when you have investors involved too.<\/p>\n
Yeah.<\/p>\n
So that\u2019s always something to be cautious of. You have your property taxes increasing and your insurance. And property taxes, you\u2019re most likely always going to have unless you turn your property into a church or something like that. But for your insurance, you don\u2019t always have to have insurance. I\u2019ve bought a couple of properties where the guy tells me, \u201cOh, I\u2019m self-insured. I don\u2019t have insurance on this place.\u201d Technically, you don\u2019t have to have insurance on the property if you don\u2019t have a mortgage on the property, but pretty much every single bank is going to require you to have insurance on the property. So those are two things that you really want to understand and know what your increases could be to building out your numbers going forward too.
So Jaryn, when you were analyzing this duplex, did you account for your income for a long-term rental and a short-term rental or did you just do it as one? What did your income look like that you were accounting for when you analyzed this deal?<\/p>\n
The short-term rental thing was an idea. It\u2019s not what you would consider to be a traditional short-term rental neighborhood. It was more like, okay, the house is going to cost me roughly this much. The rent from downstairs is going to be roughly this much. Here\u2019s my income. Can I make it all work? And I was like, yeah, I can just barely make this work. We\u2019ll see what happens. And then from there, it snowballs. It\u2019s like, all right, I\u2019m going to fix the apartment up. And while you\u2019re fixing the apartment up, because I was in the situation I was in, I\u2019m like, how can I make a little bit more money off this apartment? I don\u2019t need a lot in life. I don\u2019t need a huge house to live in for my three kids. In the Berkshires at least at that point, it was just me. I was going to New York City to be with my girlfriend on the weekends. So short-term rental revenue during the pandemic was a pleasant surprise, let me tell you.<\/p>\n
So Jaryn, I want to get into those numbers here in a second because obviously, I\u2019m a big short-term rental guy, and I love it when I hear smaller cities like this that maybe you wouldn\u2019t even think would be big for short-term rentals tend to do relatively well. But before we do, we want to take a short break to hear from our show sponsors.
So Jaryn, we\u2019re back and I want to dive into the revenue from your Airbnb, but before we do, Ash, I just got to say before we broke, you said that churches don\u2019t have to pay property taxes. I did not know that.<\/p>\n
I\u2019m pretty sure, right? Did you Google it to confirm what I said is correct?<\/p>\n
I did. I Googled it. I Googled it. You\u2019re absolutely right. Churches are exempt, at least in California, from paying property taxes. So now I\u2019m thinking like, okay, how can I turn all of my Airbnbs into churches?<\/p>\n
No, and then you just do what the Kardashians do. You have all of your friends donate to the church, but then you do like church retreats to Puerto Rico or Hawaii or whatever and all their money is a donation, but then they can send it however they want. I don\u2019t know. You can Google Kardashians\u2019 church and how they funnel their investing through a church.<\/p>\n
Yeah, that\u2019s a crazy idea. All right. Well, enough about skirting the tax laws by creating these churches. Let\u2019s talk about the revenue from your short-term rentals, Jaryn. I just want to paint the picture here. So you have a duplex, and are you renting out one entire side as short-term rental? Are you renting out rooms? What was your exact strategy for the Airbnb side?<\/p>\n
Well, so you mentioned the market. So basically, the Berkshires are a slice of Western Massachusetts, like way Western Massachusetts. There\u2019s a lot of different things happening here. Pittsfield, working class city. Southern Berkshires is where a lot of people come up to go on vacation from New York City, Boston, that kind of thing, so it\u2019s pretty high end. It\u2019s like the Hamptons basically. It\u2019s very bougie.
And so when I said I\u2019m going to house hack my duplex and put my apartment on Airbnb, people did not think of my apartment in a C-plus, B-minus class neighborhood as somewhere where you could have an Airbnb. And I believed them, but I believed you guys a lot more. It was like there\u2019s a lot of different shapes and sizes that these things can operate in. So I was like, I\u2019m just going to go for it. Renovated the apartment myself. I have no clue what I\u2019m doing. I\u2019m trying to never pick up a hammer again. I\u2019m doing pretty well at that but not perfectly.<\/p>\n
So were you living in it while you were renovating it or did you wait to move in?<\/p>\n
I was working probably 50 hours a week, trying to ride my bike three times a week. I was in the Berkshires from Monday morning at 8:00 until Thursday afternoon at 6 PM, and then I was driving to New York City to be with my girlfriend Thursday night through 5:30 in the morning on Monday.<\/p>\n
So nobody else has an excuse to not get started in real estate investing.<\/p>\n
There was no time, but it worked.<\/p>\n
If you want it bad enough, you\u2019ll make time for it.<\/p>\n
Yes, and I feel bad for the people who \u2026 the tenants I inherited downstairs because I was sanding the walls from 8:00 at night until 1:00 in the morning, and they were patient, and yeah, you get a little bit less sleep. Not a big deal. We will survive.<\/p>\n
So you get it done. Yeah. You post it up on Airbnb, and how does it go?<\/p>\n
I post it on Airbnb. I thought I had it ready. Here comes grandma again. I go on vacation to Cape Cod actually. I post it on Airbnb but I don\u2019t turn it on yet. I just get it listed, and I have no clue how to build an Airbnb listing at this point. I\u2019ve built dozens of them now, I know how to do it, but back then, it\u2019s the first one, you\u2019re poking your way through. I\u2019m in Cape Cod and I\u2019m talking to my girlfriend. I\u2019m like, \u201cYou know what? I\u2019m just going to turn it on.\u201d Now, mind you, it\u2019s summertime in the Berkshires. That\u2019s when everyone wants to be here. I turn it on and I get 10 bookings in 24 hours.<\/p>\n
Oh, my god.<\/p>\n
The first one is the next day. And so I call my grandma and I\u2019m like, \u201cGrandma, the craziest thing happened. I did this short-term rental thing that I\u2019ve been talking to you about. Is there any way\u201d \u2026 My grandma and I obviously have a great relationship. I talk to her all the time. \u201cIs there any way you can pop over to my house to just make sure it looks good and is ready to go?\u201d She calls me back the next morning, maybe not swearing, but, \u201cOh, my god. I can\u2019t believe you thought that was going to be ready to rent like that,\u201d things I know now that I didn\u2019t know, which is the tub has to be clean, not work at the bike shop boy clean, like clean. And so she, thank god for grandma and for a million different reasons, tuned it up real quick. First person checks in and the rest is history from there basically, but it worked out.<\/p>\n
Can we talk numbers, Jaryn, because I\u2019m curious, man. You\u2019ve got this smaller city, not a major vacation destination but something that\u2019s good for that regional area. In that first year that you had it, ballpark, what did the numbers look like?<\/p>\n
Yeah. So this is where it was, for me, it was so life-changing because I was making so little money. I had a tenant or, to use Brian Murray\u2019s word, resident, which I like to try and start using that lingo, downstairs, paying a thousand dollars a month in a long-term lease. I put it on Airbnb and I was trending to do maybe $15,000 in the year. But then again, BiggerPockets, forum, books, something, I learn about dynamic pricing. I load the listing on to PriceLabs and I learned that I don\u2019t have to charge $87 a night for this short-term rental. I can charge $349 a night. I never would have known.
And so there\u2019s a lot of stories in there of accidentally charging too much just because I could. I\u2019m getting greedy because of the sake you can get away with it, and that caused some problems, which I fixed with some integrity, I would hope. And landed on that pricing strategy for that property that worked out really well. And I think year one of being on Airbnb, I did, let\u2019s call it 30, 36,000. It was more than three times what I was getting from the downstairs resident and I was living in the house four days a week.<\/p>\n
Wow. So breakdown, what was your cash flow for the year or average on monthly? Were you having to pay anything towards your mortgage at all or was it completely covered and you\u2019re walking away with cash every month?<\/p>\n
Great question. So cash flow is always a little bit of an interesting, tricky word for me. I think a lot of people, not necessarily on here, but just in general, talk about cash flow of whatever they\u2019re making but maybe not setting aside money for reserves or this, that and the other thing. So I\u2019m trying to be more careful about that. Basically, I brought in $50,000 in revenue in that first year, and if I look at the bills on the things that I didn\u2019t have to pay, the bills were somewhere around, mortgage is 1,400, I have a whole P&L for this, but let\u2019s call it 25 grand. So there was 25,000 or so available that I was able to hypothetically put in my pocket. But really, me as a landlord and where I want to go with this and because I\u2019m lucky enough to have a day job, is that I really want to keep all the money in the properties, whether it\u2019s-<\/p>\n
You\u2019re reinvesting it.<\/p>\n
Reinvesting them to make the property nicer or leaving it in a bank account tied to the property to then use as a down payment for another property down the road. I don\u2019t need the cash flow anymore. In the beginning, maybe, but now as long as the property is completely supporting itself, I\u2019m okay and I\u2019d rather push the money in to try and drive the value on an appraisal down the road because I want the big chunk of money. I want the 200 grand from a new appraisal. I don\u2019t care as much about the $200 a door a month or whatever that number is.<\/p>\n
So, Jaryn, just to give some clarity to the listeners here. You have a duplex. You\u2019re renting out one unit long term. And then when you go back to the city to see your girlfriend, you\u2019re renting out the unit you live in short term. So on a part-time basis, between the short-term rental and then the long-term rental downstairs, you did over $50,000 in revenue. I just want to make sure I\u2019m tracking correctly.<\/p>\n
Yeah. And the asterisk to that is that that was learning how to do Airbnb during a pandemic when demand was very strong. Now, I would say at this point, I\u2019m fairly I would say very confident with my abilities on Airbnb or short-term rental platforms. And I think this year, I\u2019m going to do exactly like 31 or 32,000 from the Airbnb. So the rent downstairs is a little higher, like 45 grand gross in that house. But that\u2019s being further along with learning how things work.<\/p>\n
And on that note, Jaryn, you mentioned that you learned some lessons as you were pricing and other things. What were some of those lessons you learned that you feel have helped you become a better host today?<\/p>\n
I\u2019m juggling a lot of things. We have four bike shops. I got a relationship in New York City. I got a bike I want to ride. I want a community I want to be a part of. What I don\u2019t necessarily think is a great use of my time is cleaning the sheets and cleaning the apartment. So first thing I did is I started dropping the laundry off at a linen company. They charge me a dollar and a quarter a pound. It comes back way better than if I do it myself. That was number one. That bought me back a little time, and that\u2019s when I was like, I\u2019m going to start an Airbnb management business and start Googling how that works. And then it\u2019s like I need a cleaner, got a cleaner. All of a sudden, I\u2019ve gotten back six hours a week of my time or five hours a week of my time and I\u2019m putting that time, I\u2019m not watching TV, I\u2019m Googling how to start an Airbnb management business. That\u2019s been the evolution there.<\/p>\n
Yeah, there\u2019s a great book I read recently. It\u2019s called Buy Back Your Time by Dan Martell. And basically, what you just described, Jaryn, is the premise of that book, is that as you\u2019re building your own business, you want to identify opportunities for you to hire someone who can take away some of those tasks that you\u2019re doing that aren\u2019t the highest and best use of your time so you can continue to focus on growing the business at a higher level. And it sounds like that\u2019s what you did, man. So let\u2019s talk a little bit about the transition to the management side of things. I guess how many properties are you currently managing?<\/p>\n
It changes a little bit because sometimes, people are like, \u201cI want to live in the house. I don\u2019t.\u201d But about 10 basically.<\/p>\n
That\u2019s awesome, man. And what period of time, how long did it take you to go from zero to 10 properties under management?<\/p>\n
That\u2019s a great question. I would say 12 months, give or take. And then eight to 10 felt like enough for where I was at as far as availability to put into that business. The reason I went down that road versus trying to be a contractor or a real estate agent or something is because of my living situation, I needed to do something that I could pretty much fully operate from my phone because I\u2019m in different places all the time. So running short-term rentals for other people felt like the best fit. Now, today, I have a handyman. I have two cleaners. There\u2019s people that make money in this business besides myself, plus all the homeowners. But that was the best fit for me. If I wanted to go deeper into real estate, that was the best fit.
Where I want to go with that business this year is I haven\u2019t put a lot of extra effort in systemizing or growing that business that much over the last 12 months. This year coming is really hopefully going to be a time to focus on putting some more time and effort into that business.<\/p>\n
Jaryn, do you think for another rookie investor, that\u2019s a great almost side hustle for them to get into to help them build their investment portfolio? And maybe you could give us some insight as to how lucrative this actually is for you. Is there money in it? Are you doing it for the experience?<\/p>\n
So any type of property management that you can get your hands on, whether it\u2019s long term, short term, medium term, cleaning houses, it\u2019s a great way for someone who wants to learn and isn\u2019t afraid of some hard work to get into. You\u2019re in the properties. You\u2019re dealing with people who are either staying or living in these properties. You\u2019re learning what to do when the, everyone\u2019s biggest fear, when the toilet starts to leak. And the other thing is that the barrier to entry is really low, well, especially financially. You don\u2019t need a hundred grand to go start a small mom and pop property management business.<\/p>\n
What was your process for finding those 10 clients? Were you networking at real estate meetups? Were you sending out direct mail? How did you find those 10 clients?<\/p>\n
How I did it in the beginning was through some luck and it\u2019s been a question that I would love to ask some people of a better way to do it. Here\u2019s how I did it. I made up some flyers that cost me a hundred dollars to get printed. I paid someone a hundred dollars to go where there\u2019s a flyer delivery service in the community and she dropped them off at a hundred different locations. That was part one.<\/p>\n
And then, Jaryn, did you actually drop them off at the Airbnb or were you dropping them off at owners\u2019 residences?<\/p>\n
Or different businesses?<\/p>\n
Bingo. So general stores, coffee shops, liquor stores, whatever stores are in the area that had a community bulletin board, we would post them there and got a few listings from that. I also started pulling a list of six months of real estate transactions in the Berkshires and then I would organize that list so it was only houses that were $250,000 or more. And then I would delete a few cities in the Berkshires out of that based on what I like and I would just send them a direct mail, which was a piece of mail that basically linked them back to my website. That worked a little bit. There is probably a million ways to create a much higher conversion rate that I am going to put some time and effort into this coming year, but that got me to 10.<\/p>\n
Yeah, that\u2019s awesome, man. So we\u2019re really focused, 2024 is going to be the year that we really focus on growing our Airbnb management company as well. And obviously, we\u2019re going to leverage the platform that we\u2019ve already built, but I think a big focus for us is going to be relationships, so talking to our agents, our lenders that we already know, saying like, \u201cHey, if you have more clients, send them our way.\u201d Direct mail I think is going to be a big piece for us also.
And then a sneaky trick that I learned from one of my friends that has a management company in Arizona, but we have a cleaning company, and he said that his back door into management was getting cleaning clients first because everyone wants a good cleaner. There\u2019s less friction in changing cleaning companies than there is changing property management companies. So if we can prove that we\u2019re really good at the cleaning process, we\u2019ve already built that connection, that relationship with the owner, then we can approach them later and say, \u201cHey, look. We\u2019ve been cleaning for you for three months, but you know we also do management.\u201d So I\u2019m super excited about growing both of those businesses because I feel like there\u2019s a big need for that in this space still.<\/p>\n
The cleaning business thing is something that I\u2019ve put some thought into of like, let\u2019s put it this way, if I wasn\u2019t running a few bike shops right now, I would be fully, not even working on the business but working in the business, Airbnb cleaning company and would be whispering into people\u2019s ears of, \u201cOh yeah. By the way, we run these listings as well.\u201d Because of my job, I don\u2019t have as much time to do that, but that is part of the plan for this coming year of how to grow that business a little bit.<\/p>\n
And then in five years, you sell it to an even bigger management company and you retire.<\/p>\n
I have five-year plans. That isn\u2019t exactly it but it is a good one.<\/p>\n
Well, go ahead, tell us yours real quick if you don\u2019t mind.<\/p>\n
Well, the whole thing for the management business for me right now is to try to keep it pretty passive. My focus is on the bike shops and taking the money from the management business and to buy bigger multifamily buildings. We haven\u2019t talked about the bigger purchase I made this past year, which is totally fine. But basically, I bought an eight-unit apartment building and I really like that size multifamily, and it\u2019s around, it\u2019s available in the area. So let\u2019s say eight to 10-unit apartment building, million bucks, you need 250, $300,000 to pull the trigger on that kind of thing. I want the money from the management company to be used for down payments for those types of purchases.
The other part of the five-year plan is that I\u2019m very much a part of these bike shops, and retail is in an interesting point right now where we need to pivot a little bit. Margins are getting squeezed in different ways and we need to think outside the box of how to bring in revenue to retail businesses. So one of my plans is I know how to run Airbnbs. Why don\u2019t we have an outdoor themed hotel, motel, lodge, this, that and the other thing as part of our bike shop ecosystem? You know what I mean? Bring it all together. I\u2019d love to see that at some point in the future. There\u2019s a million directions to go, but that that\u2019s part of it probably.<\/p>\n
Quite the visionary, I have to say.<\/p>\n
Because I put a lot of work into trying to do it like all of you. It\u2019s the same thing.<\/p>\n
Oh, one thing you had mentioned in there though is an eight-unit building. When did you get that?<\/p>\n
Oh, man, I got that \u2026 It depends how much of that can of worms you want to open up.<\/p>\n
Yeah, let\u2019s just go into it brief before we wrap up.<\/p>\n
That I closed on April 1st. I had been under contract since the end of October. I\u2019ll tell you how I got there a little bit, which is that I refinanced the duplex and I had some cash from that because I wasn\u2019t afraid to buy a property during the pandemic, even though everybody told me not to because it had appreciated like we\u2019ve all experienced, and I pulled some equity out of that. It was burning a hole in my pocket. I was making payments on it and I was like, \u201cI got to buy something. I got to put this somewhere so I don\u2019t use it to buy a car or something stupid.\u201d
So I made a list of all the multifamily homes in the neighborhood that I already was living in and I started calling. And I hear stories about a lot of people who call thousands of people. My fourth phone call, a woman answered the phone and I said, \u201cHey, my name is Jaryn. I live in the neighborhood and I\u2019m trying to buy another property in the neighborhood. Are you interested in selling your house?\u201d And she goes, \u201cFunny. We actually have it listed for sale.\u201d It had made the list two months prior and then was really busy with a few things and started calling.<\/p>\n
Oh, so you didn\u2019t see it yet.<\/p>\n
I didn\u2019t see it. And I said, \u201cOkay, my apologies. If you don\u2019t mind me asking, what do you have listed?\u201d And she\u2019s like, \u201cWe have an eight-unit apartment building listed for 550,000 I think.\u201d And I said, \u201cOkay, that\u2019s amazing. Good for you.\u201d In a real way like, \u201cCongratulations,\u201d whatever. I was like, \u201cIt\u2019s a bit outside of my buy box. I\u2019m looking for a two to four unit.\u201d And then somewhere way back in here, a voice said ask him about seller financing. And I asked and I said, \u201cWould you ever consider seller financing?\u201d And she paused for about 10 seconds and she said, \u201cWe bought it with seller financing 40 years ago. We\u2019d be open to it.\u201d And I pretty much fainted. Because we hear this stuff and it doesn\u2019t feel like it\u2019s a real thing. It\u2019s a real thing.<\/p>\n
I still get excited about it, Jaryn. Just literally yesterday, I got a text from Daryl saying the neighbor wants to sell his property and want to know if we were interested. And before I could work up my list of 20 questions, he said he\u2019s interested in doing seller finance.<\/p>\n
It\u2019s crazy.<\/p>\n
And I still got excited. I was like, \u201cOkay, there\u2019s a big step there. We could make this a better deal just for the fact that he\u2019s open to doing seller financing.\u201d<\/p>\n
It\u2019s a win-win for both sides if the situations are right, which is why it works. This ended up being perfect for both of us.<\/p>\n
And just one thing I\u2019ll mention too is that I think there\u2019s a stronger appetite from owners to offer seller financing on these bigger commercial properties or small multifamily even. We have a hotel in our contract that we\u2019ll be closing on hopefully in the next couple of weeks here, and it\u2019s a 13-unit motel, fully seller financed, and we got I think a 10-year term. First two years are interest only. It was like a six and half percent interest rate, and we got it below what it appraised for, just a killer deal all the way around.
And it\u2019s because these commercial property owners, they know that if their books aren\u2019t super solid, if their P&Ls aren\u2019t good, if they don\u2019t have good tax returns, it\u2019s going to be difficult for someone to go out there and get traditional debt on that property anyway. So there\u2019s a little bit more flexibility from those folks as opposed to going to a single-family home owner who lived in this property themselves for 30 years and doesn\u2019t know anything about seller financing.<\/p>\n
It\u2019s a different world. Once you get up into five-plus hotels, at least what I\u2019ve experienced, the transaction is a completely different world.<\/p>\n
So Jaryn, let\u2019s talk numbers on this eight-unit. Walk us through, yeah, give me the rundown of what the numbers were on this one.<\/p>\n
I want to add one thing that I did that I think got me the deal and is a tip for everyone out there.<\/p>\n
Yeah, yeah, please share with us.<\/p>\n
Yeah, please.<\/p>\n
So conversation with the woman. She basically was like, \u201cMy husband deals with the real estate. I\u2019ll have him call you.\u201d He calls me back 15 minutes later. He says, \u201cWhat are you doing?\u201d I said, \u201cLooking to buy a house.\u201d He said, \u201cI\u2019ll meet you there in 15 minutes.\u201d At this point, I\u2019m along for the ride. He shows up. He tours me through every single nook and cranny of this house. This was something that this owner was really proud of, this is where I might cry, really proud of. And it was an amazing experience for someone like myself going through an eight-unit building, being like this guy is showing me everything. It was an education. I learned so much in two hours, maybe three hours we were there.
And at the end of the conversation, it was clear that I liked him and he liked me. That part was super important. From there, we looked at each other and we were both like, \u201cWhat do we do?\u201d And he was like, \u201cYou know what? I have it listed. I owe the broker the sale at least for now. If you are interested in purchasing this, write up an offer and put it, submit it through the broker.\u201d I say, \u201cOkay.\u201d
Tony, to your point, I underwrote it a million ways to Sunday. This is where I have a lot of respect for Brian Murray. I bought the Multifamily Millionaire. I read it in three days. I learned how to underwrite bigger multifamily. And no matter how hard I squinted at it, I couldn\u2019t make it work. And I knew if the management company started doing poorly or I got laid off from my job, let\u2019s say, god forbid, or the Airbnb and the duplex did bad, I was going to potentially be in trouble. I was going to have to carry it too much for too long.
So here\u2019s the tip. I wrote the guy a super honest, him and his wife, a super honest letter, telling them about banks won\u2019t underwrite it because their rent doesn\u2019t cover the debt service, this, that and the other thing. I hope we meet again, this, that and the other thing. But currently as listed, I don\u2019t feel comfortable writing you an offer. I didn\u2019t want to low ball. I had started this relationship with this guy. So I just wrote him a letter and it was an honest letter. In the back of my mind, I\u2019m like, maybe they\u2019ll call me someday, but I didn\u2019t think it was going to happen as quickly as it did.
He called me back three weeks later and was like, \u201cJaryn, I want to sell you the house. They had it listed for 550. I want to sell it to you for 400,000. We\u2019ll seller finance the whole thing for you if you can come up with 15,000 down at 5% amortized over 20 years with a five-year balloon.\u201d And he was carrying me through this deal He said, \u201cI want you to think about it for 24 hours, and if you want it,\u201d I\u2019m almost crying, \u201cIf you want it, call me in 24 hours and we got a deal.\u201d So I fainted again, thought about it for 24 hours, woke up the next morning, moved a little bit of money around, if you will, and made sure I was good, and I called him back and got under contract, and I own it today.<\/p>\n
That is amazing.<\/p>\n
All three of us, doesn\u2019t that make you feel the emotion of like, I can\u2019t wait until that\u2019s me one day and I get this new investor that I get to give this great deal to and walk them through and hand my baby down to somebody else?<\/p>\n
To that point, it\u2019s a once in a lifetime opportunity. I think we all get to a purchase like this at some point, but I think at the same time, real estate investors, we have a lot of responsibility, and there\u2019s no question that I got to hand this thing down to somebody else someday. When? I don\u2019t know but I have to.<\/p>\n
I just want to add one thing because I know this is something that I always wondered as I was getting into real estate investing, but it\u2019s like why would anyone seller finance? And one of the things that we have to remember is that (a) there\u2019s some tax implications of selling big properties all at once that they might want to avoid. And if they don\u2019t want to 1031 into something else, that\u2019s something to consider. But also think when they own the property, they\u2019re responsible for all the day-to-day. Even if you have the property manager, they have to manage a property manager and make improvements to the property. There\u2019s work that goes into being responsible for that property on a daily basis.
If they seller finance, there\u2019s an opportunity they could get even more cash flow from this new note that they\u2019re giving to you with literally zero work. So it really is a win-win situation for you as a buyer because you\u2019re getting an amazing deal. You get to come in, do all the things you need to do to improve the value of that property. They\u2019re getting a killer deal because there\u2019s no big tax bill and then they get that stable, reliable cash flow every single month. So it really is a win-win situation.<\/p>\n
Yeah. The other thing that I\u2019ll add is that they wanted a certain number for this building. They wanted half a million dollars for this building. And if you start to look at principal and interest, amortization schedule over five years, if I wait five years and refinance it on the last month that that note is due to them, they\u2019re going to end up getting pretty close to their full asking price. They just have to get it over time. So they win too. They get what they want at the end of the day.<\/p>\n
So Jaryn, to bring this full circle, what is your profit every month from this property, the eight unit?<\/p>\n
So this one for me is a bit crazier. I\u2019ll say that when I purchased it, part of the reason why no one else had bought it and why they\u2019re having a hard time selling it and why the bank wouldn\u2019t finance it is it was bringing in $3,400 a month, eight apartments. Now, market rate realistically in the area is about a thousand dollars an apartment, depending on the apartment bedrooms, etc., but let\u2019s use that as a ground rule, a baseline number. It was six months of stabilization. That was really uncomfortable in a million different ways, starting with closing, getting the keys and having to knock on eight doors of people who\u2019ve lived there for a long time and say, \u201cHey, my name is Jaryn. I\u2019m the new landlord. Oh, and by the way, your rent is going to go up a little bit probably.\u201d
There was a thousand sleepless nights of plan of how I was going to increase the revenue of the property. And I probably didn\u2019t know the exact strategy until two minutes before I knocked on the first door. I thought about it a lot, but I didn\u2019t have it locked down. I was under contract for six months, which is why I had so much time to think about it but it worked perfectly.<\/p>\n
And just to set the table here. You\u2019re saying just over 3000 bucks, but it was like 425 in rent per unit when market rents were a thousand. It\u2019s a massive difference. So I guess what was your process, Jaryn, for taking those rents from 425 and getting them closer to that 1,000 and what number did you eventually land on?<\/p>\n
Very low, and it was very scary. The house I had worked out was going to cost me about $5,000 a month, and that\u2019s right about where it\u2019s at. If I really am sucking money into reserves and I\u2019m under banking conservatively, that house should hold on to $5,000 a month. And that\u2019s right about where it\u2019s been after some renovations is where it\u2019s stabilized out to. And I was bringing in $3,400 a month. So knock on every single door. \u201cHi, my name is Jaryn. I\u2019m the new landlord. Here\u2019s the plan.\u201d No one was on leases. What\u2019s a lease pretty much, right? We deal when we buy buildings that we can get under market value. There\u2019s some problems you got to fix.
So basically, the deal was I\u2019m going to have you sign a lease. It\u2019s going to be a month-to-month lease. It\u2019s going to be for two months. Two months from now, I\u2019m going to raise your rent $50. I didn\u2019t want to kill people. I did the math and I realized that 50 bucks over seven units, because one was vacant, I would bring the rent up, what, $350, $400 a month. I thought maybe I\u2019ll get lucky somewhere and I\u2019ll put an Airbnb into the one vacant unit and it\u2019ll probably do 1,500 to 2,000 and that will buy me some time to turn some units over when people choose to leave. I didn\u2019t want to kick people out. I didn\u2019t want to go crazy with the rent. I wanted to try to meet people where they were at.
So if there\u2019s seven tenants in a building that are way under market value and the new landlord comes in and he seems like he has this together and he\u2019s talking about leases and he\u2019s talking about taking photos inside of the apartments to get a baseline of what the condition of the unit is and all this stuff. The people who aren\u2019t going to be great residents of the building, they leave. They realize that they might be accountable for some things and they decide that this maybe isn\u2019t a perfect place to live.
Pretty much what happened is out of the seven tenants, four were completely understanding and incredibly grateful of the situation. They were able to afford the payments. I have them all on one-year leases right now. Two people left. They left the apartments. Both of them left them in really good condition. One of them, I swept. It was generating 450 a month. I swept it. I took photos. I rented it out three days later for 1,250 a month.
Another one, it was the one resident who was giving me a hard time, and I didn\u2019t raise my voice or get mad but I stayed on them, \u201cHey, I really need that lease. Hey, I really need this done. Hey, I really need this done.\u201d He left and he left on good terms. If I saw him today, I wouldn\u2019t walk to the other side of the street. I\u2019d say hi to him and I feel good about that. I renovated that whole unit, cost about $10,000. That\u2019s rented for a thousand dollars a month.
So that plus two other little things. One was a section eight thing that was way \u2026 The paperwork was really off on it. That got to get raised a bit. And then I put the one apartment on Airbnb, which has done 2,000 a month basically for the last five months. All told, full circle, if I look at my rental right now, with the Airbnb income, it\u2019s like 8,500 bucks a month and it costs me right around 5,000.<\/p>\n
Wow.<\/p>\n
The last thing I\u2019ll add is that the $3,000 a month makes me feel good. It\u2019s some financial cushion, but I owe $300,000 on that property, give or take, right now. I haven\u2019t got the appraisal done yet, and I\u2019m going to wait because I want to pull money out. I want the 300,000. I don\u2019t care about three grand. I think it\u2019s probably worth between 650 and 750 right now. There\u2019s so much money tied in there for when it\u2019s time to do the next play, I\u2019ve already got it, and that is why I\u2019m really focused on the bigger multifamily at this point, and I could go buy a duplex right now, but it doesn\u2019t make sense. It makes sense to just be patient, stabilize a little bit and try to buy another big one in a year.<\/p>\n
I think that\u2019s such a valid point as too many people get caught up in the growth scale. I got to a point where I was so overwhelmed with buying duplexes that I sold one that I only owned for a year because I had taken on too much at once and I wasn\u2019t stabilizing. I was exhausted trying to manage all these properties and acquire more as rapidly, as fast as I could. So I think that\u2019s a great point, is you can actually end up being more successful not being in that constant growth scaling, I got to buy something, I got to buy something, and focus on stabilization.<\/p>\n
Yeah.<\/p>\n
I talk about this a couple of times, but we had a guest on who talks about how for her short-term rentals, they\u2019re just adding saunas. They\u2019re adding hot tubs. They\u2019re not buying new properties. They\u2019re stabilizing and increasing the value of what they already have.<\/p>\n
Yeah.<\/p>\n
Jaryn, thank you so much for joining us. You definitely have come a long way from grandma\u2019s couch. You took that first down payment. That\u2019s $7,000 for a three and a half percent loan to buy your first house, and you have come all the way to having $300,000 in equity for an eight-unit property and all just ties back to taking action on that first property. So congratulations.
If you\u2019re listening and want to learn more about Jaryn, we are going to put more information about him in the show description. You can find that on YouTube or on your favorite podcast platform. Don\u2019t forget to join us in the Real Estate Rookie Facebook Group.
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Jaryn, thank you so much. I\u2019m Ashley, and he\u2019s Tony, and we\u2019ll see you guys on the next Real Estate Rookie podcast.<\/p>\n<\/div>\n