{"id":3305,"date":"2022-07-28T07:31:29","date_gmt":"2022-07-28T07:31:29","guid":{"rendered":"https:\/\/imsfund.com\/?p=3305"},"modified":"2022-07-28T07:31:29","modified_gmt":"2022-07-28T07:31:29","slug":"15-rentals-in-1-year-by-putting-time-first","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2022\/07\/28\/15-rentals-in-1-year-by-putting-time-first\/","title":{"rendered":"15 Rentals in 1 Year by Putting Time First"},"content":{"rendered":"


\n<\/p>\n

Vacation rentals<\/strong><\/a>, real estate agent commissions<\/strong>, brokerage fees, insurance quotes, and everything in between just start to scratch the surface of who Christian Bachelder<\/strong> is. Some of you may have seen Christian before on our YouTube channel where he talks about interest rates, loan products, and other future financing projections. But today, Christian gets to talk about how he not only built a large rental portfolio<\/strong> but did so while running multiple businesses<\/strong>.<\/p>\n

Even as full-time workers, many Americans feel like they don\u2019t have enough time in the day<\/strong> to relax, let alone invest. So how does someone with a jam-packed schedule, a lot of pressure, and a mountain of responsibilities find time to not only buy one rental but fifteen rental properties in a year<\/strong>? To Christian, it took a bit of trial and error, but the answer is simply making your time as efficient as humanly possible<\/strong>.<\/p>\n

He\u2019s been able to heavily invest, start and run one of the top <\/strong>mortgage brokerages<\/strong><\/a> in the country, work as an agent, and provide insurance to clients as well. He drills down into what business owners and investors alike need to do to reclaim their time<\/strong>, and once it\u2019s theirs, use it to the highest and best use. He also drops some financing pro tips<\/strong> that may help you lower the <\/strong>down payment<\/strong><\/a> you need or close with a better-than-average <\/strong>interest rate<\/strong><\/a>!<\/p>\n

\n

David:
This is the BiggerPockets podcast show 641.<\/p>\n

Christian:
But you never know, right? Your next relationship, your next lead, your next investment partner could come from anywhere. If you\u2019re always thinking of maximizing the time that you\u2019re spending through your life, it compounds just like money does, right? Everybody has their 401k that compounds on interest every year. Time is the same exact way. And if you choose very carefully where you put that first minute, before you know it, you\u2019re getting five or 10 minutes out for every minute you spend.<\/p>\n

David:
What\u2019s up, everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast here with my co-host Rob Abasolo. Rob, how\u2019s it going today?<\/p>\n

Rob:
I\u2019m feeling good, man. I\u2019m feeling really good. I\u2019m closing all my rings on my Apple Watch. And that\u2019s honestly the only goal that\u2019s a requirement every single day is to close my rings, get my steps in, burn some calories and hopefully get a little bit towards the who I used to be physically. It\u2019s my big project for the next two or three months.<\/p>\n

David:
It\u2019s no joke.<\/p>\n

Rob:
And then it\u2019s over. Then I\u2019m done. I\u2019m just kidding. Yeah. Obviously.<\/p>\n

David:
Trying to maintain fitness while you\u2019re able to make money is really hard. It\u2019s so hard because you\u2019re like, \u201cOh, if I take off two hours and I go work out, I might lose 10 grand.\u201d It\u2019s always in your head. It\u2019s very hard to stay disciplined with that.<\/p>\n

Rob:
Yeah. The channel, pandemic, everything just really put a\u2026 Oh, having kids put a pause on anything physical for me for the last two years. As someone who\u2019s always on camera, I was like, \u201cOkay. All right. All right, buddy. It\u2019s time. It\u2019s time to trim you up, pal.\u201d I give myself motivational talks in the mirror every day.<\/p>\n

David:
Well, let\u2019s keep at it. You can always send me those gym selfies, man. We\u2019ll keep each other accountable.<\/p>\n

Rob:
That\u2019s right. You send me those every so often.<\/p>\n

David:
Today\u2019s show is nothing short of incredible. In today\u2019s episode, Rob and I are interviewing my business partner, Christian Bachelder, who I built the One Brokerage with, who\u2019s also a very prominent real estate investor. Christian has bought 15 homes over the last year through partnerships and by himself. And he shares a lot of the information that helped him to do that. So we get into Christian\u2019s buy box, the criteria he looks for, which is very specific.
He\u2019s also my partner in the One Brokerage. So we talk a lot about how he helps with financing of my deals, angles that we see that other people don\u2019t know, what you should talk to your real estate broker about, how you could make your agent better. I mean, I could go on and on and on. This was a very, very, very detailed show that does run a little bit longer, but I want to make sure you listen all the way to the end because we share where you guys can get some more information to help make your realtors that you\u2019re working with better. Rob, what were some of your favorite parts of the show?<\/p>\n

Rob:
You know, I think it was a really nice\u2026 It was nice to hear him talk through his, I don\u2019t know, the linear progression of why he started new companies and really evaluating his time. But we spoke a lot really about the return on time, which is really, really big. I think that\u2019s a metric that people ignore quite often. We\u2019re always chasing the cash on cash or the return, the ROI, right? But the actual time investment and reinvesting your time so that it starts to compound, we talk all about that and how that affects his businesses. I thought it was just a really interesting viewpoint.<\/p>\n

David:
That is a very good point, and that will lead us to today\u2019s quick tip, which is if you\u2019re working with a realtor and you\u2019re not thrilled about the service you\u2019re getting, maybe they\u2019re good, but they\u2019re not great. Maybe they\u2019re not even good, but you like them and you\u2019re loyal to them. You don\u2019t have to be stuck with a bad realtor, and no I\u2019m not going to tell you to switch and go with me as your realtor, because I\u2019m not licensed in every single state. What I am going to tell you is that there are resources out there that you can provide for them that will help them be better. BiggerPockets itself is the very best one. Tell your realtor about this podcast, get them listening to this, get them on the website. Many of them would do a much better job for you if they had access to the information that you do.
I write books to help realtors. You can find them at biggerpockets.com\/store. Sold and Skill are the first two books that I wrote specifically meant to help the BiggerPockets community be better realtors and get better service from their realtors. In today\u2019s show, Christian talks about how you can send your realtor to us and we will get them a free education to help you close more deals with them. We all get better when we share information. So if you\u2019re not thrilled about what you\u2019re getting, instead of getting frustrated and yelling at them, just be like, \u201cListen, I\u2019m texting you a podcast, listen to this thing and then get back to me.\u201d
All right. Today\u2019s show is really good and a little bit long. So I want to get to it right away. Rob, is there anything you want to add before we bring in Christian?<\/p>\n

Rob:
No, no. I don\u2019t want to make the podcast even longer. So I\u2019m going to amp here for a little bit and let\u2019s get into it.<\/p>\n

David:
Christian Bachelder, normally I would ask you to introduce yourself to our audience. However, because this is a special occasion, I\u2019m going to take the liberty to do that myself. Let\u2019s see how much of this I can get right.
Christian Bachelder is a UC Berkeley graduate with an engineering degree, a BJJ purple belt. He owns an Allstate Insurance Company. He is my partner in the One Brokerage, which might be the fastest growing loan company in the country. We just got back from a trip to Michigan, where we got invited out to learn from United Wholesale Mortgage because we did so much business with them. We got connections to the CEO and some other people within there that Christian works to get our clients better deals. Let\u2019s see what else. You\u2019re also a real estate agent that has sold houses. You own short-term rentals in various states.
We own one together in Tennessee and you\u2019ve got several others you own as well as others that you have with partners. And we have plans on creating an actual lending company where brokers would come to us and we would be the one financing the loans for the investors. So what we would like to do is to create a situation where we go to the investors and we say, \u201cWe\u2019re going to offer a product to real estate investors.\u201d And then your local mortgage broker, if it\u2019s not us, comes to us and we put a deal together that works for you as an investor.
Maybe most importantly, Christian and I shared a very important vision. So about six years ago, when I started the David Greene Team, I had a vision that I would like to have the real estate agent and the insurance company and the lender and the appraiser and the contractor and all the pieces that you will need under one roof so that you don\u2019t have to worry about if the person that you\u2019re working with is any good or not.
And I met Christian, and not only is the guy brilliant, as you guys are going to hear on this podcast, he\u2019s got a brain like a computer, but he also had that exact same vision as he\u2019s selling houses and he\u2019s doing mortgages, and he\u2019s doing the insurance and he was doing it at a smaller scale. And then like most people, we partnered and you ended up drinking from a fire hose. I will say you\u2019re the only person that did not drown from that fire hose. So you impressed me, and we went into business together.
Now we are pulling back the curtain. For a long time people have heard about Christian, but didn\u2019t really know who he was, and you guys are going to get to know him today. Christian, did I miss anything?<\/p>\n

Christian:
Man, I think you cleared it all up. I think, well, that\u2019ll be our show. That\u2019s it, right?<\/p>\n

Rob:
I think that\u2019s it. Thanks for tuning in everybody, and we will catch on the next episode of BiggerPockets.<\/p>\n

Christian:
There we go.<\/p>\n

Rob:
Well, it\u2019s just such an impressive resume. You\u2019ve done a lot. You\u2019ve got a lot of plans here. I guess my question just to get us started here in the podcast is, how the heck did you get here? You know, this is such a journey that you took to get to this point. What led you here?<\/p>\n

Christian:
Yeah, it\u2019s a question I\u2019ve gotten a lot. I would probably argue that there\u2019s not a whole lot of chemical engineer, mortgage brokers, real estate insurance brokers out there, but for the one other person that may be in the world, maybe we have some similarities. After graduating, as David shared, I did attend UC Berkeley. I was in a industry that had no fulfillment for me. I\u2019m a people person. I can\u2019t sit behind a computer, type in an algorithms and code all day.
Actually, I had a pretty early on mentor. A really good buddy of mine growing up, his dad kind of had a similar goal on a smaller scale of building this so-called one-stop shop, right? Where I always joke, my ultimate goal, if I reach where I\u2019m trying to go, is to never write a referral check again, right?
If we could just create a network where people can go to, if you\u2019re looking to invest, you don\u2019t have to talk to anybody else. Right? We can find the home, finance the home, protect the home with an insurance policy, build your finances, maybe manage the property for you. That\u2019s the idea. And then building a place where people can go just for a general advice. Right?
But to get back to the question, how I started, it was really just seeing every time that I sent a referral to a State Farm or an Allstate, there was never the level of service that I wanted for my client. Right? Similar to how David, David gives a lot of referrals out as well. And that\u2019s his name, right? His name is attached to those people that he refers to. Now that I\u2019m on the scale of him, you really feel that, right? If you refer to one person who gives the borrower a bad experience, it\u2019s your name, right? They say, \u201cThis was your guy, your guy failed me.\u201d Right?
I hold myself to a really high standard and it\u2019s hard to hold other people accountable to the level that you hold yourself. So I\u2019ve gotten really good at squeezing 25 hours out of a day, I guess, could be my best way to put it. You know, I sleep on average, I think Kawasaki said this the other day, too, sleep about five hours a day. It\u2019s definitely a grind. But at the end of the day, if you can build processes and systems around you that allow you to maximize your time, you\u2019re going to be able to succeed in building a company.<\/p>\n

David:
So this is probably a good time to talk about just like transparently what my life is like and what Christian\u2019s life is like now that we\u2019re partnered together. We worry constantly that we\u2019re going to let somebody down. We\u2019re in this position where people look up to us. Rob, you\u2019re now in that same boat. And they say, \u201cHey, David, can I talk to your CPA? Can I talk to your mortgage broker? Can I talk to your real estate agent?\u201d They\u2019re thinking in the back of their mind that that person is David. They get to know me. They hear me talking.
Podcasts are weird. I remember the first time I met Brandon Turner, who\u2019s actually flying into San Francisco. I\u2019m going to see him tonight. I\u2019m like, \u201cHey, you don\u2019t know this, but we\u2019re already friends. I already know what coffee you order at Starbucks. I know all this about you. You don\u2019t know me. So it\u2019s kind of weird.\u201d But that\u2019s one of the cool things of a podcast is you get to know a personality. The downside is we are always worried. If a mistake happens and you trusted me, that takes it, it hits you so hard. But because of the level of volume that people are drawn to us about\u2026 That\u2019s a terrible way of structuring that sentence. Because we have this platform and there\u2019s so much volume of business we\u2019re doing, our employees are going to make more mistake because they\u2019re working with more people.
They\u2019re going to be busier than somebody else might be, who\u2019s in a similar situation. We\u2019re constantly training them, pushing them, trying to get them to be better. But they\u2019re not me. They\u2019re not Christian. They\u2019re not Rob. They\u2019re not going to be quite as good, especially in the beginning. So we always are crossing our fingers and holding our breath like, \u201cOh, please nothing go wrong.\u201d There\u2019s a lot of stress that\u2019s involved in that.
Part of how Christian and I have structured things is we\u2019re not starting a business that we don\u2019t do ourselves. Basically when someone comes to us to get a loan product, these are the products Christian found for me, because I\u2019m probably the worst loan client in the world, which he can tell you about later. How do we make this work for David? Because if it\u2019ll work for David, it will work for anybody. When you come to me to buy a house, you\u2019re getting trained by agents that went through what I tell my buyer\u2019s agents to do or when I\u2019m selling my house, this is the way I do it. They got trained in the same thing.
Same for insurance and for the property management company will have at a certain point. My opinion is these are the best ways to run businesses is you did it yourself, you took what you learned and now you help service clients. The downside is when you have so many people you\u2019re trying to help and your staff is new, there\u2019s always going to be a little bit of hiccups. Maybe we could start off with just getting the downside out of the way. I\u2019ve never really asked you this, Christian. What has your stress level been as you\u2019re trying to keep up with the volume of business we\u2019re doing and protecting my reputation while you\u2019re doing that?<\/p>\n

Christian:
Yeah, it\u2019s a task. I mean, not only\u2026 When we first started, it was pretty much me, right? I was taking everything onto myself because I had such a high standard and I didn\u2019t want to let you down. I didn\u2019t want to let your customers down, your real estate team, all the people that we work with. And the most difficult part of the process was demanding that same level of work ethic and accountability from the people that we hired. Right? And the people that we joined on a team to tell them, \u201cHey, you\u2019re going to get a level of leads and a level of customer access that you\u2019re not going to get anywhere else.\u201d Right? I mean, people come to us and they expect you, right? This is the similar struggles that you have with your real estate team.
It was about a 16 to 18-month grind unlike\u2026 You know, and this is somebody coming from arguably one of the most competitive majors at one of the most competitive schools. And that 12 to 18 months was like nothing I\u2019d experienced. I mean, that I was driving all night mentally just through every recess of my brain to try to make this thing work. Right? I\u2019m proud of what we built. It\u2019s still a work in progress. But even today that\u2019s a huge test to make sure that we\u2019re holding up the name of BiggerPockets, the name of you, the name of everything that we represent in a good air.<\/p>\n

David:
Yeah. And in a year we became one of the top mortgage brokerages in the country. Right? That\u2019s very fast. It\u2019d be like, imagine putting on that\u2026 I don\u2019t know of the good analogy, but putting on 50 pounds of pure muscle in one year, it\u2019s a strain on the body. It\u2019s very difficult to do something like that. So we do take our job very seriously and we\u2019re always trying to do things right. But I think, right, Rob? You had an experience with us where we funded the loan that we bought the property we bought together. One of the reasons Rob got, and I got a really good deal on that property is it sat on the market for a long time. I thought I was going to go buy four more of those properties after we closed. I don\u2019t know if I told you, Rob, everything is more expensive and not as good as that house. That thing was a steal.<\/p>\n

Rob:
Oh, yeah. Yeah. Scottsdale. Yeah, we got a good deal.<\/p>\n

David:
But part of the reason is that it was sitting on five acres. Normal conventional lenders won\u2019t fund loans when there\u2019s that much land, because the concern would be well, are we funding the house? Are we funding the land? Because if we have to foreclose on land, we don\u2019t know how to sell that. We can sell a property. So they put a limit on how much acreage, which most people would have no idea that that\u2019s a requirement. I wouldn\u2019t have had that idea if I wouldn\u2019t have run into it. Well, having Christian on my side, he can go out there and he can find the lender that will do it. Or sometimes we can twist their arm and say, \u201cHey, we\u2019re bringing you this many loans. You\u2019re going to fund this one for us because you want to keep our business and we can help our clients in that way.\u201d
The downside is just, it\u2019s hard when you\u2019re in Rob\u2019s position, when the person you\u2019re working with is also working with other clients and sometimes they\u2019re not as experienced as Christian and I would be. So I\u2019m noticing when you start these companies, there\u2019s always positives and negatives. You kind of have to take both. But the benefit of, I think what the three of us are doing is we\u2019re in the game, buying these properties ourselves, running into problems. Later in the show, I\u2019ll talk about the 1031 problem that I just ran into when I was with Christian. He and I worked through that thing, but I would\u2019ve never known that was even a problem. Now I\u2019m able to come share it with everybody else. So this is the benefit of doing your business with a company that also does stuff themselves.
If you guys are going to partner with Rob on something, he has tiny homes, he has short term rentals. He\u2019s very, very good at knowing what a person cares about when they go into the home. So if he\u2019s helping you with what you\u2019re trying to do, it\u2019s experience. With Christian, he owns an insurance company. He knows angles other people don\u2019t see. Same thing with mortgages. We can solve problems ways that other people can\u2019t. Whoever you\u2019re working with on your stuff, I\u2019m always encouraging people. Try to do it with someone that owns homes. If your agent also owns properties in the area you\u2019re buying, that\u2019s the one that you want to use. And that\u2019s how we\u2019ve structured things. I went off on a little bit of a trail there, but Christian, do you feel like you are able to provide better service, solve problems, build a better business because you\u2019re in the game of real estate yourself?<\/p>\n

Christian:
Absolutely. This isn\u2019t a pitch to just use us, right? I mean, there are mortgage brokers that invest out there in the world, but on just an average, working with a company with the morals and the foresight and the experience that we have, you\u2019re not going to get that from a phone rep at Quicken. You\u2019re not going to get that from a phone rep at better.com, right? I mean, you\u2019re going to get that from somebody who practices what they preach, right? Who do it, who invest, who own properties. In my situation, I bought an insurance agency because frankly, I saw people get screwed with insurance coverages. Right? I saw people\u2026 I mean, David, after I reviewed your insurance policies, I was like, \u201cYou\u2019re not insured correctly.\u201d
Right? Like, \u201cLet\u2019s get this taken care of. Right? We got to get you insured properly.\u201d I mean, that happens so much because the only advertisements you fee for insurance are say 15%. Right? People aren\u2019t actually talking about what you\u2019re getting.<\/p>\n

David:
Or more.<\/p>\n

Christian:
Yeah. There you go. You know? And a lizard\u2019s the one telling you, right?<\/p>\n

David:
Right.<\/p>\n

Christian:
At the end of the day, if you\u2019re working with somebody, it\u2019s like that fiduciary relationship. If you\u2019re working with a representative with your finances that is going to put your best interest first, you\u2019re in a good spot. If they have the experience and the knowhow to know what your best interest is, you\u2019re in the right spot.<\/p>\n

David:
I\u2019d like to point something about that, and then I\u2019m going to\u2026 Rob, I\u2019m going to toss it to you for an example. One thing that I\u2019ve learned being in this business is how that person decides what\u2019s in your best interest can be very different than how someone else does. So what I\u2019m saying is if you\u2019re going to a discount agent who says, I\u2019ll sell your house for 1%, or a discount insurance company that says your premium will be this low. That is a way that they believe they\u2019re bringing you value. \u201cWe\u2019re the cheapest, we\u2019re saving you the most money\u201d until something happens. Or maybe a property management company that says, \u201cI\u2019ll manage your property for 3% or something\u201d until something goes wrong. And then very quickly you\u2019re like, \u201cOh wait, this was a terrible idea. I can\u2019t get anyone on the phone.
I\u2019m bouncing around in other countries. They\u2019re denying me coverage. I\u2019m going to come out of pocket $12,000 that I don\u2019t have.\u201d Your listing agent doesn\u2019t sell your house for nearly as much money in there. Then they\u2019re always frustrated later. I\u2019ll tell you guys just a sneak peek. When we\u2019re helping on the David Greene Team to buy houses for our clients, I purposely trigger listings that I know are bad brokerages or bad listing agents because we will out negotiate them. They\u2019re not going to be as good. You don\u2019t always realize that you\u2019re losing out on something when you\u2019re just looking for the cheapest thing. So in our world, we typically see like, we\u2019ll get someone pre-approved for a loan. And then some other mortgage broker will say, \u201cOh, I can do it for less. Your interest rate will be less. Your closing cost would be like, not a lot less, just minimal amounts.\u201d And they\u2019ll go with that person.
The reason it was less is because their entire staff is in India on a different timetable that is not very incentivized to get your loan closed, and it takes them 60 days instead of 14 days. And you lose the entire deal because what you thought was you were getting value from a cheaper rate. I know before I got into the business with you, Christian, I had more than most people, but it was still a very limited understanding of how the mortgage industry even works. Like, why am I talking to you but the loans being done with somebody else over here? And why shouldn\u2019t I just go to Wells Fargo? That\u2019s where I bank. I could just get my loan there. There was all of this nuance that I never understood.
I\u2019ve since become very skeptical when the first way someone says they bring value is they\u2019re cheap. If that\u2019s what you open with, right off the bat, I\u2019m very nervous. Rob, this was a thing that you and I experienced together in Scottsdale, where you found an agent for us. And I was like, \u201cI don\u2019t know, man, that property management seems like\u2026 It seems kind of expensive what he\u2019s looking for.\u201d And you\u2019re like, \u201cYeah, but the guy does this and this and this. And he knows all these things and he has\u2026\u201d And I\u2019m like, \u201cOh wait, this, yeah, this is incredibly valuable. We\u2019re not just getting his management. We\u2019re getting his entire list of resources, the people that fix things when they break. We\u2019re getting his expertise. We\u2019re getting to know about the area.\u201d
In that sense now, it becomes incredibly cheap. So I wanted to give each of you a minute to maybe give an example of a person you\u2019ve used or an experience that you\u2019ve had where you went with the more expensive option, but it either saved or made you much more money.<\/p>\n

Rob:
Yeah. I got this one locked and loaded all the time. I mean, I always talk about on the channel quite a bit is hiring what I call your Airbnb Avengers. These are the people that are actually running your property when you\u2019re doing self-management. So your Airbnb Avengers are going to be like your cleaners, your landscapers, your pest control, your pool maintenance, all that type of stuff. But the lifeblood of your business is always going to be your cleaning crew. And so very rarely do I negotiate with my cleaners because if they say that they want a hundred bucks and I say, \u201cHow about 90?\u201d And they\u2019re like, \u201cOkay, I\u2019ll take you on as a client.\u201d Well, they\u2019re going to give you 90% of their effort in my opinion. And so for me, I don\u2019t really negotiate.
I had my cleaners for a long time. They were charging me $70 to clean my tiny house for about two years. And then I got the dreaded text about a month ago. He was like, \u201cHey man, we\u2019re raising rates.\u201d I was like, \u201cAll right, let\u2019s talk about it. Why are you doing that? I want to understand.\u201d He was like, \u201cWell, it\u2019s been two years and I\u2019ve never asked for an adjustment. So I\u2019d like $85 instead of 70.\u201d I was like, Okay, that\u2019s\u2026 You know, it\u2019s significant, but I was like, \u201cOkay, well, you deserve it because I have 293 reviews on this listing. I have a 4.95, which is really freaking hard with 300 reviews. And they all talk about how spotless the place is. So it\u2019s worth it for me to pay an extra 15 bucks to keep my amazing cleaner, because then I know that it\u2019s always going to be clean and I\u2019ll always have great reviews. And thus I\u2019ll always be more bookable.\u201d So for me, I\u2019m never really skimming out on cleaning when it comes to my short-term rental portfolio.<\/p>\n

David:
What\u2019s the cost of a cleaner that doesn\u2019t show up and actually cleaner doesn\u2019t do a good job, and your next guest walks into your property and it\u2019s messy? What do you think that costs you when they put [inaudible 00:21:32]?<\/p>\n

Rob:
Hundred to thousands. I mean, one bad cleaner cost us thousands of dollars one month in just refunds where they didn\u2019t show up or they forgot, or they were really bad. We had to obviously let them go, but we had to let them go because we were like, \u201cLook, dude, I\u2026\u201d We\u2019re paying them. They\u2019re cheap, but we\u2019ve just refunded $900 in the last week. They\u2019ve cost us $900. If we had just divided that over a year and just hired someone better, we would have better reviews. So it\u2019s always one of those things that we\u2019re learning constantly.<\/p>\n

Christian:
Yeah. I mean, I\u2019m just thinking as Rob\u2019s talking here, I\u2019m thinking their cleaning\u2019s not worth that extra $15, that relationship you built was. Right? I mean, you\u2019re paying $15 to keep the same people who you have two years of trust in, right? I mean, you have two years of relationship that you built with them and good work. Like you said, one bad cleaning is thousand dollar refund, $1,500 refund, depending on what your nightly rates are. I mean $15 increase, of course, nobody wants to hear it, but man, when you\u2019re saving a relationship and trust and time out of your pocket, right? I say time out of your pocket, because it\u2019s going to segue a little bit into this idea of your return on time. I mean, how much would you have to spend to fix a $15 error that you didn\u2019t want to pay for?
Right? Obviously, with people like us, I\u2019m pretty sure each of us would rather be doing a couple different things rather than trying to keep an Airbnb clean or I mean, we have a lot of different ways to spend our time and that relationship is just man, that\u2019s\u2026 And it\u2019s the same argument, right? Coming to a mortgage broker, coming to somebody that you trust, coming to an advisor, somebody who understands you. Okay, you\u2019re talking about a difference of a couple thousand bucks on your closing cost or 8% or a quarter percent difference in your rate, but that other lender may not understand what you\u2019re trying to do. Right? They may hinder your ability to continue to grow your portfolio with the product that they place you into. Right?
This is a really good example. Last time I did a video with you, David. We were talking about that loan product that came out the day that you went into escrow on your last property. If I didn\u2019t know what you were trying to do, I wouldn\u2019t have even told you to go get it, right? That completely changed your game plan for that property. Right? Obviously, we\u2019re partners, but if you weren\u2019t linked up with somebody who understood your position, that wouldn\u2019t have even been an option. You would\u2019ve had to completely pivot your financing strategy. I think it saved you like $300,000 on your down payment, something crazy, just because I knew what you were trying to do and I was actively thinking when I saw that product.
So a hundred percent, I mean the cheapest option\u2026 You know. We have a saying when we hire people here. Do you buy everything that you own at Walmart? Right? You could probably get the cheapest option at Walmart, but you don\u2019t own everything from Walmart. You probably don\u2019t want to get the things that you really care about from Walmart, right? Your finances should obviously land in that category. Right?<\/p>\n

David:
Well, I think the average investor takes the perspective of they\u2019re the hub and all of these ancillary companies are spokes that they need to make it happen. I need a lender. I need insurance. I need an agent. I need a property manager. That isn\u2019t inaccurate, but that perspective creates this idea of I have to go tell them all. I have to solve my problem and tell them what I need. Right? So then I need to get a loan. What\u2019s the cheapest rate I can get? I need to get a loan. What\u2019s the best down payment program you have? And then they spend all their energy trying to figure out to solve their problem and then go to someone and say, can you fix it? Which isn\u2019t bad, but it\u2019s much better when you\u2019re all sort of in the hub together. Like how Christian and I, we were just together for 10 days.
And while we\u2019re there, we\u2019re brainstorming on the most efficient way to put these things together because he knows what I\u2019m trying to do. He\u2019s like, \u201cOoh, this would be better in this situation\u201d or \u201cLet\u2019s make sure we don\u2019t make this.\u201d Those little things he catches save us hours and hours and hours of time and money later. I guess you don\u2019t pay money in hours, but you know what I mean? They cost money to do because we are working in it and he knows what my plan is. Those relationships are valuable. Property management companies that give me ideas. Like, we were just looking at properties in the Smoky Mountains. And when you have a good property manager that says, \u201cHey, here\u2019s an idea. You could take that sleeper bed from this property you\u2019ve got and you could move it over into this one. And if you got an extra two people sleeping here, it goes from 10 to 12. That\u2019s probably going to be an extra $25,000 in revenue a year.\u201d
Ideas like that that I wouldn\u2019t have naturally thought of right away. Maybe four years later, I think of it. But in the moment, their experience is helping me a ton. It\u2019s hard to see that when you\u2019re just thinking like, I got to fix all my problems and what\u2019s the cheapest option. That\u2019s one of the reasons that we talk about being relationship based because not only do they make you money and save you time, but they let you stay focused on the things that are more productive for building a business. That\u2019s one of the things I want to ask you, Christian, you\u2019ve mentioned that I talk a lot about velocity of money. This concept that put your money out in the world, have it create equity, have it create cash flow, pull it back in and then send it out again.
You\u2019re constantly sending money out in the world to add more value and then come back to you. That\u2019s one of the ways that you build wealth, but you talk about the velocity of time. So would you mind sharing your philosophy because frankly you wouldn\u2019t be able to do all the stuff that we do together. Run a mortgage company, run an insurance company, buy your own investment properties, train the guys. We\u2019re working on creating a program for loan officers that want to learn how to do loans, where they can actually come to us and take a course where they will teach them. Here\u2019s how you\u2019d be a loan officer, similar to real estate agents. How do you put all this stuff together? What are you doing with your time to make that possible?<\/p>\n

Christian:
Yeah, that\u2019s a really good question. And even following up on Rob\u2019s first question as well, this is kind of a fusion answer. We\u2019ve hosted talks. We did one down Long Beach on that velocity time and I just couldn\u2019t help but think when I was sitting there hearing you talk. I mean, people say time is money all the time, but really the equivalent, when somebody\u2019s thinking of investing strategies and investing mindsets, everybody gets broken, you know just completely fed up with running analysis. You know, you get into analysis paralysis just on money, right? Like what\u2019s your ROI? What\u2019s the down payment requirements? Just like you\u2019re saying, David, oh, I need the minimum down and the highest return. Right? But nobody\u2019s thinking, man, in the time that it took you and this paralysis that you had to identify these properties, run numbers and you had to run a hundred numbers to buy one property.
You know, if you pivoted a little bit, right? And put some processes in place that allowed you to maybe buy three instead, your return would be three times as much. It\u2019s that transition from thinking of where are my dollars going to where my time\u2019s going? This is really the foundation of how I believe I arrived where I am now and why we continue to grow. A lot of people would look at what I\u2019m doing and say, \u201cThere\u2019s no way there\u2019s enough hours in the day.\u201d But if every hour that I spend is being compounded in the similar avenue of how David talks velocity of money, every dollar you put in investment property, whether you\u2019re borrowing it or whether you\u2019re long term renting it, you\u2019re hopefully getting multiple returns on that dollar. Right? That\u2019s how I think of time.
I\u2019ll give a couple examples. When I first started out, the first example was I was a realtor, right? I was referring people over to a lender and I was referring people over to insurance agent. I started doing all three. So now every minute that I was spending with a client is now technically three minutes. I\u2019m spending a minute with them as their insurance advisor, their real estate advisor and their lending advisor. Right? That was the idea. I\u2019m maximizing every minute of time that I\u2019m spending with the customers, and the customers felt that. They\u2019re like, \u201cOh my God, I\u2019ve never had a mortgage broker who could advise me on my insurance policy.\u201d Right? That would lead to me getting referrals and getting people who\u2026 A real estate agent is never going to get an insurance referral, but I did. Right? Because I was maximizing the time I spent.
And even transitioning that into now with how we\u2019re building our company, David and I, as he shared earlier, we bought a property together. So every minute that I\u2019ve spent with David building our business relationship and our personal relationship has now evolved into a partner, a real estate investing partner relationship where I didn\u2019t know when we first started a mortgage company that we would own property together. But every minute that we spent building this company was also building an investing relationship. Right? So my minutes have been compounded with David. And I told her, I\u2019d give her a little bit of a shout out, but one of my\u2026 She just started as a client, Karen. Karen Skrabanik. David, you know her.<\/p>\n

David:
Who you met because she was a client of the David Greene Team, started doing loans with us, right?<\/p>\n

Christian:
Hundred percent. Absolutely. She came, she was a client of David\u2019s on real estate side. We did her loan. And funny enough, I own a number of rental properties with her now. And every minute that I spent with her, I didn\u2019t know, but I was spending it with an investment partner. Building a mindset together and analyzing properties together, and realizing that we were on the same page with a lot of our investment strategies, and eventually that led to a really good partnership forming. I can say there\u2019s a million situations. I mean, David and Rob, you guys are co-hosts of this podcast. You guys bought a house together. You\u2019re compounding the time that you spend with each other. Right?
So just in every avenue of life, and I know this is hyper specific to me, but the people who are listening, who are W2, when you go out on the weekends, right, you go to the beach, you go to the bar, you go out with your friends. Those could be future partners that you don\u2019t even know yet. Right? I mean, it could be people that you buy your next property with. When you\u2019re at your family reunion, whether you\u2019re a salesman or you\u2019re W2, and you\u2019re looking to invest, your family members could be your partners, and you could be compounding that time.
Obviously, don\u2019t make everything about work, right? You need your family time. But you never know, right? Your next relationship, your next lead, your next investment partner could come from anywhere. And if you\u2019re always thinking of maximizing the time that you\u2019re spending through your life, it compounds just like money does. Right? Everybody has their 401k that compounds on interest every year. Time is the same exact way. And if you choose very carefully where you put that first minute, before you know it, you\u2019re getting five or 10 minutes out for every minute you spend.<\/p>\n

Rob:
That\u2019s really interesting. So I\u2019m kind of curious, do you think of\u2026 Like, any decision you make or any business decision you make, do you ever think about the value of your time? Do you actually assign a dollar amount and thus use that to guide how you move forward or if you empower someone else, to sort of take the load off your plate or whatever?<\/p>\n

Christian:
Yeah. A hundred percent. I mean, I wouldn\u2019t say I\u2019ve ever necessarily tied it to a dollar amount, although that\u2019s really good advice. I should probably start doing that, but I just think it\u2019s just\u2026 Like I said, there\u2019s just so many opportunities where this could\u2026 I mean, it could be walking your dog at the park. Right? I mean, when I bought my mattress that I sleep on, I refinanced the guy who sold me my mattress. Like you never know. Right? I mean, there\u2019s people everywhere that you can strike up a conversation with. There\u2019s a lot of people, realtors who do it part-time and loan officers who do it part-time. They know because they\u2019re in a sales position that every minute you don\u2019t know where your next lead\u2019s coming from, but if you\u2019re really living with that, and I think that\u2019s great advice, Rob, even tying it to a dollar amount. Like, Hey man, how much? If you had to get taken away from what you\u2019re doing, I mean, I can even imagine with you or David.
I mean, imagine you guys couldn\u2019t work for two weeks, how much money are you losing? Right? Imagine your phone died, you had no reception and you couldn\u2019t leave your house. I mean, the amount of dollars that you would lose, and that\u2019s a short period of time, that\u2019s a week or two. Right? But the amount of impact and compounding on your time that you guys have in your networks and your spheres would be massively valuable, right? I mean, it\u2019d be hundreds of thousand dollars probably if you guys couldn\u2019t work for a month. Right? Not only for you, but David runs a team, right? David\u2019s team would lose money. David\u2019s businesses, Rob, your short-term rentals, your management companies, all that. I mean, how much would be lost there because of the way that you guys have compounded your time. I just think it\u2019s such a valuable mindset instead of always making it about the dollar, right?<\/p>\n

Rob:
Yeah. For sure. Well, you run that little exercise, man. I mean, I think it\u2019s very eyeopening because that was for me, as I start to scale and really kind of run with all of the different businesses that are floating around in the ether right now, it\u2019s tough because I have a tendency of wanting to do everything. But like you said, it\u2019s like I\u2019m trying to squeeze 25 hours out of a day and it\u2019s really, really, really tough.
About six to 12 months ago, I really started calculating what my actual hourly rate, just so that I know, and effectively, it\u2019s really eye-opening to see that because then I\u2019d look at everything else that I do and everything else that I get cheap about and I don\u2019t want to hire people for. I\u2019m like, oh yeah, I\u2019m losing thousands of dollars by just even thinking about this for two days. You know what I mean?<\/p>\n

Christian:
Absolutely.<\/p>\n

Rob:
It definitely helps guide me and empower me to delegate and develop teams a little bit more for sure.<\/p>\n

Christian:
Yeah. It pushes that priority to the people that you do delegate towards. I mean, David and I have both have experiences with we hired the wrong person. Right? It took more time that we invested into them that didn\u2019t have a reward. Right? I mean, especially if you\u2019re teaching that mindset with people that you\u2019re partnering with and your employees or whoever it is and the listeners\u2019 lives that you\u2019re using this with, if you\u2019re also imparting that onto the people that you\u2019re building with, now you\u2019re compounding two people\u2019s time. Right? And by you, whether it\u2019s Rob, you using leverage, or David and I hiring an employee and having them do a job that we would do otherwise, if they\u2019re also compounding their time, I mean you go four or five people deep in this mindset and you got five people doing a job of 50, right? I mean, that\u2019s really how you build a team culture. You can build this mentality that man, time is so valuable that everybody\u2019s now getting the maximum value from it.<\/p>\n

David:
I think it would be valuable if we gave some practical examples of how we work this into our life. Like your example of I went to buy a mattress and I started a conversation, so I refinanced the guy\u2019s house. I got a free mattress and I made money by going to buy something. I had the same experience where, when I bought my car, I ended up selling the guy a house, and so that paid for my car and then some. I got a free car out of it. If you have that perspective, everywhere you go, if you\u2019re talking to people about, Hey, do you know anyone that might want to be selling a house? Do you know anyone who\u2019s got a hoarder house or something?
Everybody remembers that weirdo in their life that has just crazy stuff in their home and their house is falling apart. When you ask those questions, they might get answered. So do you guys mind giving some\u2026 They don\u2019t have to be actual examples. They could be hypothetical, but something that a listener who\u2019s hearing this concept could walk away from after hearing this and say, \u201cI\u2019m going to start doing that.\u201d<\/p>\n

Christian:
Yeah. I can start. I think, everybody\u2019s thinking of side hustles nowadays, right? It seems like everybody that we pre-approved drives for Uber or DoorDashes or whatever. It\u2019s funny. I mean, it sounds like a joke, but everybody that we pre-approved got multiple sources of income on their tax returns. So I think of it from the analytical, like the mortgage broker side of things, right? When I see people give me their tax returns that have five or six different avenues of income, both of you guys are like this, right Rob?<\/p>\n

Rob:
That\u2019s me.<\/p>\n

Christian:
Yeah. I mean, you got your courses, you got your real estate, you got businesses that you\u2019re running, you got the podcast. Right? I mean really the easiest way for me to say that is that building multiple streams of income, maximizing the time you spend in each one. Right? I mean something like, and it doesn\u2019t have to be driving for Uber. That\u2019s the dumbed-down bare bones version, but it could be something as simple as that. Right? It could be something as simple as, hey, I want to\u2026 You know, if you\u2019re good at something, right? I mean something that David and I are working on, as he alluded to, is creating this course. Right?
If you\u2019re good at something, share it with people, right? Try to fill a niche. Try to fill your time with something that can benefit other people, and maybe you end up building a company around it. Right? I mean, I don\u2019t think David or Rob, either of you guys probably predicted you\u2019d be in the spots that you\u2019re in, but because you were building a team surrounding yourself with people and maximizing your time, you guys really built something. Right? That\u2019s the most bare bones version of it that I can think of.<\/p>\n

Rob:
Right. You seem like you\u2019ve gone down this\u2026 I was going to say rabbit hole, but it\u2019s way more that. Well, it kind of is because you\u2019re going down the intricacies of building businesses, and you\u2019re very successful at this, and you have several businesses that are producing income for you. What was that moment\u2026 I guess in all of this sense, you have businesses and teams. What was the moment you decided to actually start investing in more real estate or more short-term rentals? Why did you do that versus continuing to pour into those businesses?<\/p>\n

Christian:
That\u2019s a really good question. Funny enough, I bought my first house, I think within the last 50 months. It\u2019s been about two years and I could have purchased way sooner than that. Absolutely. I set a goal for myself where I wanted my businesses to be not self-running, but be a method of income that would be my safety net. Right? It would be, I can now invest with confidence knowing that if something did go wrong, I\u2019ve built enough aside from real estate to withstand any windfalls that come. Right? I probably started investing a little bit late. Of course, now everybody goes back and says, I wish I bought more, but knowing that my businesses were my first pursuit, that\u2019s where I felt like I got the biggest bang for my buck.
That allowed me to now grow at the level that I wanted. So I guess to answer your question, I didn\u2019t start buying until I could buy at the speed and the level to which I really wanted to. Right? I hadn\u2019t gotten there yet. Until I could, I mean, I purchased 15 homes in the last year, right? I mean, that\u2019s more than one a month. Right? I wouldn\u2019t have been able to do that.<\/p>\n

Rob:
[inaudible 00:38:26].<\/p>\n

Christian:
Yeah, I wouldn\u2019t have been able to do that unless I built a really strong foundation that had enough cash flow coming in, had enough ability or had enough time where I had the ability to go dedicate time and resources to buying these properties because everyone\u2019s an analysis. Everyone\u2019s a partner that I partnered with or a property management company. I mean, you guys know the drill of property managers. You got to find boots on the ground, and everything that David writes in his long term investing book. I started only once I felt I had the confidence to do that, the way that I wanted to. I wanted to invest on my own terms. That was a little bit of when I made the switch.<\/p>\n

David:
This is an awesome segue into how you take your compounding of time. I often talk about that same concept, but I use the word synergy. I always say, you want to get more than one benefit out of a single action, right? Like you and I were at dinner with our agent two nights ago, or maybe it was last night. It was two nights ago.<\/p>\n

Christian:
Two nights ago.<\/p>\n

David:
And we were talking to the agent and his brother is the property manager in the company. So while this is a dinner where we\u2019re meeting to talk about the deals that I was looking at and get to know the agent, we\u2019re also like, \u201cThe property manager\u2019s right there. Let\u2019s get his opinion on things. Let\u2019s ask questions.\u201d And then he tells us, yeah, these are the properties that tend to do the best. Now we work that into the conversation with the brother who does the sales and we\u2019re like, \u201cHey, how would you find that property?\u201d
And in one dinner, which we had to do anyways, because people have to eat, we built a relationship. We got to know about what properties perform better as a property manager. We got to learn how the buyer\u2019s agent could find those. I honestly think, I see this all the time, that asking the right questions, we make them better. They walked away like, \u201cWe didn\u2019t even think about that. These guys are really smart. They have the right ideas.\u201d That\u2019s synergy. That\u2019s the velocity of your time. That\u2019s improving the return you get on the time that you\u2019re spending.
Now, as you just mentioned, buying properties is a time suck. I was just thinking on the way to the office to record this today. I have to fly to Tennessee to learn the area. And then even if I\u2019m not flying to look at individual homes, I have to review the house, pull it up on a map, ask what the numbers are, run the calculation on those numbers, try to get a feel for what could be wrong with this property that I\u2019m not seeing. That\u2019s all before you even go in escrow. Now you\u2019re looking at inspection reports and surveys and getting insurance quotes and having to talk to contractors about fixing things and having to order furniture and trying to figure out how you\u2019re going to get that delivered.
One property is not just\u2026 You\u2019re not just putting money into it. You\u2019re putting a lot of time and energy to make this thing actually fruitful. Having a specific buy box that you know these are the numbers that I want to hit, these are the properties I\u2019m looking for can be immensely powerful with saving you the time when you\u2019re analyzing a ton of stuff and making sure that the work you do after going into escrow is not wasted. It\u2019s actually going to turn into a return. Can you share us, Christian, how you came up with your numbers that have created your buy box and then what they are?<\/p>\n

Christian:
Yeah, absolutely. So just to lay the foundation, I do invest in short-term rentals. That\u2019s actually the entirety of my portfolio. This is specifically catered towards people obviously trying to follow suit in that regard, but I\u2019ve developed what I call the 15%, the golden ratio, so to speak. That\u2019s what I call it. But basically I want to see the gross revenue projections for the property. People are going to say, \u201cWhere do you get those?\u201d Right? I wouldn\u2019t say live and die by AirDNA. I wouldn\u2019t say live and die by\u2026 I think Rabbu is the new one that\u2019s out now. BiggerPockets has a short-term rental calculator. For those who aren\u2019t using it, check out BiggerPockets. You can use a Rentalizer for free, pretty sweet.
But I wouldn\u2019t say live and die by those. Especially once you form a partnership, whether it\u2019s a property manager or somebody with some experience in the area, if you guys are looking in Tennessee and Florida and Virginia, this is something that I could help with. If you\u2019re looking at other areas network, BiggerPockets is great, all the resources that they provide. But really getting some hands-on data of not just\u2026 AirDNA is a good estimate, but is there a comparable to my property that did this? Right? Did X percent this year. I like that to be 15% of my purchase price. So if a house is a million dollars, I want to see it gross 150,000 a year. Now, to be mindful, that does include my property maintenance. It\u2019s not my net, right? A property\u2019s not going to net 15%.
That would be a home run, go buy it right now. Right? But that\u2019s before cleaning fees. That\u2019s before taxes, all that. But I like to see a property that, just to add, let\u2019s pull a specific example. One of my properties in Tennessee, I bought it for 650. It did right around a hundred thousand last year. That\u2019s right around that 15% ratio. Right? It\u2019s a little bit off, but it\u2019s really close. The reason why I chose 15 is that 12 is where I actually want it to be. So I\u2019m actually building in a 3% safety net. I\u2019m building in a buffer, right? If I hit my 12, it\u2019s a successful purchase in my mind.<\/p>\n

David:
Can you define what you mean by 12?<\/p>\n

Christian:
Yeah. If it\u2019s a million dollars, I\u2019m shooting for it to rent for 150,000. And just so everybody understands, that\u2019s 15% of a million, right? If it rents for 120,000, that\u2019s 12%. So I missed my mark by 30 grand and I\u2019m still where I\u2019m comfortable being.<\/p>\n

David:
So you\u2019re willing to accept a property that will rent for 12% of what you pay for it, but you make your target 15% in case you miss it by a little bit. Okay.<\/p>\n

Christian:
The reason why I don\u2019t make the goal 12 is that then I hit nine and I\u2019m not happy with it. Right? So I always build in\u2026 And be careful guys with projections, with estimates. You know, I write 30 contracts to put one in escrow, right? I mean, our realtor out in Tennessee, David, can attest to this, right? We\u2019ve put them through the grinder a little bit. Stick to your numbers, guys. I have another one as well. So it either has to fit that box, and if it does, it has to be in an area where I have no concern over the short-term rental regulations. It has to be an area that I can do. So no HOAs. I don\u2019t really invest in HOAs unless it\u2019s what are called condotels. This is similar to what I think you bought in Hawaii, David, where they\u2019re protected short-term rentals.
So I would feel confident investing in there, but then you have your HOA fee, right? So that\u2019s one buy box, 15% in an area where I have confidence in the future projections, or I have an alternative. If it\u2019s potentially going to pivot away from short-term rental allowance regulations wise from the state government, it has to be able to pivot to a longterm rental and still cash flow. I\u2019ll give an example. I purchased a 300\u2026 What was it? $350,000 single family in Virginia Beach in the state of Virginia. Lower property values, it\u2019s something that I wasn\u2019t shooting for the stars on them. However, I ran the numbers and my mortgage all in, I want to say it was about 1,700 bucks. The rental estimates was 2,200 that\u2019s on a long term, 12-month lease, right? That was actually on the appraiser, so that was based on comps in the area.
Now it rents for, I think, four to 5,000 a month. We\u2019re expecting it\u2019ll do about 60,000 this year. So it\u2019s hitting my numbers that I like, but it\u2019ll transition well, because I don\u2019t have a hundred percent confidence that the city of Virginia Beach will be short-term rental friendly for the foreseeable future. So I made that investment, knowing that my exit strategy is a really good long-term rental hold. That\u2019s my second buy box. Those are the only two conditions where I\u2019ll buy a property. I\u2019ve said it to be super simple. I\u2019ve given that to my realtors and I\u2019ve given them a free for all write it, if it meets these numbers. And I work with two or three agents that I have some confidence in and not much more.<\/p>\n

Rob:
Wow, that\u2019s actually pretty simple. So a lot of people are usually like, okay, it\u2019s got to be in this market and it\u2019s got to have this bed, bath count, and it\u2019s got to have this view or this amenity. Yours are strictly just on the numbers.<\/p>\n

Christian:
Straightforward.<\/p>\n

Rob:
Like you, as long as you can project it to be a 15% gross, I guess, 12 to 15%. And then your second criteria here that it can work for a long-term rental, then it doesn\u2019t really matter. So your buy box is effectively national.<\/p>\n

Christian:
It is, and that\u2019s one thing. For instance, in Florida, insurance is high in Florida, right? They got the hurricanes. They got the wind. They got the water damage. So that\u2019s something where if it\u2019s in Florida, I do want to see it really hit in that 15. Right? I don\u2019t want to get something in that 12 to 15 range, because I know that insurance is going to be a higher cost of owning. So you can pivot a little bit based on certain areas, especially if somebody kind of settles in to an area, you\u2019ll be able to project those expenses a little bit more as opposed to Tennessee. I own a number of cabins in the Smoky Mountains. This is where David and I were last week actually. Some of them have indoor pools. Some of them have really good views, right?
Some of them are on lots that I believe will continue to appreciate as the city of Pigeon Forge, Gatlinburg, that whole area continue to be developed and improved and tourists keep staying high there. So I may be open to accepting a 13 or a 14% ROI there, not ROI, but this ratio, right? Because I know there\u2019s a lot of other compensating factors that help that strike confidence in me as an investor. Right? I like the pool. Maybe we can use\u2026 David and I are considering using one of them as like a corporate retreat, right? So that may be a benefit where we can take our team there as a reward for high production or whatever the case is. That could be a really cool experience. So even if the properties don\u2019t meet the perfect numbers, I set them that way because I\u2019m setting a limit that if we underperform, I\u2019m still okay with it.
Right? That disqualifies 90% of properties, because most of them don\u2019t do that. But my realtors understand the ones that do meet this, we\u2019re going to write competitive offers. We\u2019re going to be aggressive and we\u2019re going to get them in contract. Right? A realtor, David can speak to this, keeping it simple for a realtor, keeps the relationship healthy. Right? If I tell you that I\u2019m going to buy this property, David, there\u2019s no worse feeling than an investor telling you, \u201cI will buy this property if you put it in front of me.\u201d You put it in front of them and they say, \u201cOh, well, let me talk to the wife.\u201d<\/p>\n

David:
Yeah. \u201cI don\u2019t like the color.\u201d<\/p>\n

Christian:
\u201cLet me think about it.\u201d You know, that, right? I mean, it\u2019s very clear. The realtors that we work with are\u2026 You know, and that\u2019s once again, return on time, right? So I\u2019m not spending time doing all these analysis.<\/p>\n

David:
Here\u2019s what I like about what you\u2019re describing. It hit me when you were talking like, this is what\u2019s different about working with us than with other people. It\u2019s not a huge difference, but it brings clarity. What I think most people are doing is they\u2019re saying, I want to hit this ROI. I want to be in this neighborhood. I want the ARV to be this much more than what I paid. They have all these criteria and it\u2019s good to have criteria. Maybe they have seven criteria just like that. I want to be 10% under market value. I want blah, blah, blah. Very rarely does a property hit all seven. And so what happens is you just spin your wheels. You spend time, you don\u2019t get anything. You never get a reward. You never get into the fun of this.
You never learn from swinging the bat. And so you just get stuck and you get discouraged. But what you\u2019re describing is here is step one. I want it to be at 12 to 15% gross yearly revenue of what I\u2019m buying it for. Here is step two. I would like it to be in one of these areas, because I know I can rent it out. Here\u2019s step three. I\u2019d like to have a backup plan. So the floor plan itself matters because I have to be able to rent this thing out if it doesn\u2019t work as a short-term rental. I would also like for there to be some kind of upside. Now when I see, Ooh, this property is different. Like, I\u2019m looking at one right now in an area where there\u2019s not many more new construction. It works with the numbers, but over the next five years, it\u2019s going to crush it with the numbers because they can\u2019t build anything more. Okay?
What you\u2019re saying is, \u201cHey, I may not hit my 15% number, but if I have something like what I just described, I will go down to 12 or maybe I would even go down to 10.\u201d Right? Like there\u2019s this balancing act that occurs in your head when you see the whole big picture. So you start with solid criteria and then you look at the pros and the cons and you weigh them out and the decisions become much less complicated, sort of become simple. And then you learn from it and you take that into the next thing. That is, in my head, the right way to be analyzing properties. It\u2019s not letting a spreadsheet do all the work. There\u2019s an element of creativity, of vision, right? A lot of the properties that we\u2019re looking at, I looked at one, the one I just described, what I liked about it was it had six bedrooms and it had a game room.
It had plenty of places to put in sleeper beds to put enough people in the house and I can take one of the bedrooms and make it into a theater room. It\u2019s perfectly set up for that. Okay? That is going to now add value to the property. People are more likely to book it and it\u2019s not like it was a three bedroom house where I lost a bedroom. I can only do this because it\u2019s six bedrooms. When the realtor is bringing me to the properties, they don\u2019t see that. They just know, Hey, this one hits the numbers that you said. So I want to take that deal, and individually look at how I would maximize the value of the property.
And on that one, particularly because they\u2019re not building them anymore up there, and I have the theater room thing and there\u2019s a few other things that I can do to add value to the property, I\u2019m going after it. Even if that one comes out at a 9% return instead of the 12 or the 15, it\u2019s going to go up over time. What you\u2019re getting into is ways that people can analyze deals without spending their entire day and getting discouraged.<\/p>\n

Christian:
Yes.<\/p>\n

David:
Can you share how you came up with these criteria that you operate by?<\/p>\n

Christian:
Yeah. I came up with it with buying my first property with no mindset with no analysis, with no\u2026 I basically said I want a property of cash flows. Like most people get in Airbnb, I\u2019d like to make some money. Right? Then I started seeing, oh, this one did pretty well. And I\u2019m seeing on average, it seems like they\u2019re doing 12 to 15%. I like that. Right? That helps me cash flow. That allows me to be profitable. That allows me to be able to restabilize it after a big expense, a roof, an AC. In one of my properties in Tennessee, I had the well pump go out. I live in California. I don\u2019t know what a well pump is. You know, there\u2019s no wells out here unless you\u2019re outside of the main areas. Right? But that was an expense that I had to pivot from. Right?
But because my numbers were hitting my projections and where I am eventually ended up modeling this mindset after, it was very easy to cover. Right? I had, I guess 8,500 bucks, I think it cost to completely redo the well pump and it was in the account and we were able to make up for it in one month of rent. Right? I wish I could say I brainstormed this and was just the perfect analytical tool before my first purchase. But this was really built from my successes and my failures on doing it and seeing the ones that hit the numbers that I liked seeing.<\/p>\n

David:
Which is why we\u2019re always telling people, you got to take action. You can\u2019t just wait till you have all the answers.<\/p>\n

Rob:
Yeah. You got to kind of just figure it out as you go. For sure. I mean, pretty much my philosophies on what pencils on, what doesn\u2019t just comes from really averaging out how things have really worked out for me in the past couple of years. So it\u2019s the same thing, Christian. For me, it\u2019s like, I don\u2019t have this perfect set system that I developed in the lab or anything like that. Really it\u2019s just an average or the median of what all my other properties perform at. Right? So for me, like you talk about your 15% gross. For me, just a 20% cash on cash. I keep it real simple, and as long as it hits that metric, then for the most part, I\u2019m pretty happy with it. I agree, I don\u2019t really take AirDNA to heart, not nor do I take Rabbu to heart.
It\u2019s really just a gut check to be like, okay, this is the median aggregate that AirDNA is putting together. Now I need to go in and actually research the calendars of my competition. And so if AirDNA and Rabbu and Mash Buys or AllTheRooms, if they all kind of put out figures that get me to a 20%, then I\u2019m like, \u201cOkay, that\u2019s a good starting point.\u201d Now I need to actually go and examine my competition. I\u2019ll go in and do what I call like a market audit where basically I\u2019ll go and just look at everyone in that market and see overall, does this market tend to really level up on design or on amenities or on views? I really try to match up. You know, see where I match up against them or where the properties that I\u2019m buying will match up against that demographic.
If I feel like I can outperform 90% of the market because I\u2019m always aiming for top 10% of my market. If I feel like I can perform 90% of the market, then I already know my cash on cash will likely be more than that 20%. You know what I mean?<\/p>\n

Christian:
Absolutely.<\/p>\n

Rob:
It\u2019s a new acronym here that I call LILS. Or no, LALS, little art, little science. You know, when we\u2019re getting to it.<\/p>\n

Christian:
Yeah, I like that.<\/p>\n

Rob:
But yeah, I mean, it really\u2026 I wish it could be super objective because I teach this every day obviously to my students, but it really is just leaning on your experiences and the more you have and the more you can lock up and add to your portfolio, the easier it is to use that as anecdotal evidence on how you\u2019re going to perform in the future.<\/p>\n

Christian:
Not to beat the dead horse, but the only thing that\u2026 I mean, you don\u2019t even think about it when you bought your first one, but you\u2019re actually building a tool to better analyze future properties. So getting back into that velocity of time thing, the time that you spent buying those three properties is saving you exponentially more time buying the fourth one now. Right? And you didn\u2019t even plan for that. Right? It\u2019s like, \u201cOh, now I have a portfolio to create my own business.\u201d<\/p>\n

David:
Then you get to where they\u2019re just bringing you a deal that you didn\u2019t even ask for.<\/p>\n

Christian:
Yeah, absolutely.<\/p>\n

David:
Look at that. Right? They just bring it right to you. You don\u2019t even have to go look for it.<\/p>\n

Christian:
Yeah.<\/p>\n

David:
I think, Rob, the only thing stopping private capital, hedge funds, BlackRock from buying every single property is the art component. If it was purely objective, we would all be getting pushed out of it. Right? That\u2019s what\u2019s beautiful about the real estate we\u2019re buying is it takes time to look at it. And even though that can be frustrating, that\u2019s what\u2019s protecting you from having some computer algorithm to step in and buy every single house.<\/p>\n

Rob:
Yeah. That\u2019s very true. I was joking with one of my partners yesterday and I was like, it\u2019s only a matter of time before BlackRock calls and they\u2019re like, Hey, we were wrong. We don\u2019t know how to do this. Can you please artfully choose our houses for us?<\/p>\n

David:
It happened to Zillow, right? Some of those iBuyer programs that we\u2019re just scooping them all up thinking a computer program could beat the actual investor. That\u2019s the advantage that the BiggerPockets listener or the mom and pop investor has is they see angles like that that are not going to show up in the MLS listing. A lot of the properties Christian and I are looking at are literally in the MLS listed as a one bedroom house. So the property he owns that we stayed in is listed as a one bedroom house with 3,000 square feet. The reason is because of regulations regarding septic size and they\u2019re only allowed to market at a certain bedrooms and the septic tank is a certain size, but he\u2019s got a 3,000 square foot house. Right?
So how many big names are just going to skip right over there because it doesn\u2019t show up in their search at all? Whereas when we look at this, we\u2019re like, \u201cHoly cow, you can sleep a lot more people in here.\u201d So I\u2019m always grateful that there\u2019s errors and inaccuracy in the way that real estate works, because it gives you an opportunity to hit stuff like this. Christian, you mentioned helping me on a deal where you found creative financing that dropped my down payment from like 25% to 12%. You and I run into problems constantly. Well, really I run into the problem and I hand it to you and you have to go fix it. I\u2019m like, \u201cHere\u2019s the round peg, there\u2019s the square hole. What you going to do?\u201d And then you get to figure out how we\u2019re going to solve that, and you do an amazing job.<\/p>\n

Christian:
It\u2019s like you\u2019re saying I have the fun job. Gotcha. Okay.<\/p>\n

David:
Yes, that\u2019s exactly right.<\/p>\n

Rob:
I can confirm you guys always pull it off for sure.<\/p>\n

Christian:
There you go. Appreciate that.<\/p>\n

David:
That\u2019s one of the things that I want to talk to you about are, can you share some of the creative ways that you get loans to close, maybe the advantage you have with the one brokerage and then loan programs that a person might not know about that we can help to get them to close on a deal with better terms or just close that all, that if they were just going to a retail bank and saying what\u2019s your loan product, they would have no idea this exists.<\/p>\n

Christian:
Yeah, really, really good question. I think what really differentiates us is the time that I put in with, I don\u2019t want to call it the ownership, but that\u2019s basically what it is, the ownership of the lending entities. I mean, I sit down with CEOs, David and I were just at a private broker event for UWM, who\u2019s one of the biggest lenders in the nation. Right? We were invited and we got some FaceTime to give direct feedback into programs that they have. Right? So when you\u2019re going to regular lenders, they\u2019re not\u2026 You know, your loan officer at Wells Fargo probably isn\u2019t sitting down with the head of Wells Fargo, right? I mean, we have a really unique opportunity, and this is why it\u2019s so important also for people to respect these programs.
And if we get you a loan, we want you to analyze the property correctly because if we end up having all these default rates and all these things, it may not be a product that we can offer much longer, right? So we underwrite these things and work with the lenders to really build these products because of not only our experience, right? I want the products from me and David and Rob, and we\u2019ve done loans for all you guys, but I want this product to then go maybe trial run and then really give it out to people and say, \u201cHey, this is an opportunity for you guys to buy where you couldn\u2019t otherwise.\u201d You know, our DSCR product is a really good example of that. There\u2019s not a whole lot of lenders who will allow you to substitute in short-term rental income on a lot of loans.
That\u2019s a big one, right? Especially people who are not completely new to short-term rentals, because a lot of the products want to see some experience there. But you go to a regular conventional lender and they\u2019re not going to care what AirDNA says. They\u2019re going to say, \u201cThere\u2019s no way you\u2019re going to rent.\u201d You know, Rob, I mean that place that you guys bought in Arizona, no lender would ever buy that you\u2019re renting it for what you guys are. Right? I mean, it\u2019s just not reasonable with conventional mindsets. But I mean, that\u2019s a really good one. We have some fun bridge products. That\u2019s one where if you are able, this is a market that\u2019s going to swing. If you are able to start getting things under market now, which hasn\u2019t been possible the last two years, but we\u2019re starting to see some price drops, some more competitive offers, being able to be accepted.
You know, we can lend on the appraised value as opposed to the purchase price. Right? We can say, this is the deal that we discuss on the past video for David. If you guys haven\u2019t seen that, check that one out because we go into depth on this product. But David was able to shave off 10% of his down payment because the property over appraised by so much, right? We were able to treat that appraised value as the value of the property instead of the purchase price.<\/p>\n

Rob:
I\u2019m jealous, man. That\u2019s crazy. That\u2019s such a\u2026<\/p>\n

Christian:
It\u2019s a sweet one.<\/p>\n

Rob:
Can you do that for me, too?<\/p>\n

Christian:
If you find a property that you\u2019re under buying, right? I mean that\u2019s absolutely\u2026 Obviously, that\u2019s the unicorn property, right? That hasn\u2019t been available for the last three years but\u2026<\/p>\n

Rob:
Well, I actually think the Scottsdale property, the second appraisal on that came in about $175,000 more than we paid for it. That was a nice little surprise.<\/p>\n

David:
I found out, Rob, side note, I haven\u2019t told you this. When I was out there looking at additional property, we bought that thing for less than what the land would cost if we just bought a lot that size.<\/p>\n

Rob:
Whoa. Really? Yeah. Let\u2019s double it and sell it.<\/p>\n

David:
Yeah. Here\u2019s something to think about. What I notice a lot of clients do, and I want to get your opinion on this, Christian, is they say, \u201cHey, can you get me a 12% down payment loan? Yes or no.\u201d And if the answer\u2019s no, then they make another phone call and they ask someone else, \u201cCan you get me a 12% down?\u201d Right? You don\u2019t get that on every single deal. You work and you buy houses, and then this falls into the situation. We\u2019re like, oh, I can maximize your deal this way. Other deals, you maximize in a different way.
So one of the things that we do since the David Greene Team and the One Brokerage works together and the One Brokerage gets to hear all of the cool strategies that we use when we\u2019re working with the David Greene Team and vice versa is we will say instead of, \u201cHey, I\u2019ll give you 900,000 for your house.\u201d We say, \u201cI\u2019ll give you 875 for your house.\u201d And they say, \u201cOkay, deal.\u201d And we say, \u201cActually, let\u2019s make it 900 with 25,000 in closing costs.\u201d Then we take the 25,000 in closing costs and buy your rate down. Like what, on a normal six and a 5% interest rate on a $900,000 house, can you spitball what you think that might buy the rate down to?<\/p>\n

Christian:
Buy down to the fives. Yeah, for sure.<\/p>\n

David:
Okay. So now you\u2019re in the fives instead of six and a half. So that\u2019s significantly cheaper than anybody else would\u2019ve been able to pay, even though you paid $25,000 over, but because your rate is in the fives, that extra 25 you\u2019re borrowing is very minimal. It doesn\u2019t make your payment go hardly at all. Right? So now that deal works for you. Where it didn\u2019t work for you or anyone at 6.5%, and what everyone else was doing was trying to bring the seller down on their price.
Well, we actually gave them more, but got you the house for cheaper. There\u2019s a lot of strategies that when you\u2019re working with the right person, they will recommend to you, what if you do this? What if you do this? It\u2019s not always going to be the same thing. I think that\u2019s a mistake people make as they heard about, \u201cOh, can you do this down payment? Or can you get this rate?\u201d They\u2019re the ones asking the questions rather than saying, \u201cHere\u2019s my goal. What do you think you could do to help me?\u201d<\/p>\n

Christian:
Yeah. That\u2019s something that we pitch a lot. I mean, I think probably 50%, at least, of my properties that I bought during a really hot market were actually purchased with substantial seller credit. I mean, David, the deal that we got, we had a massive amount of seller credit, right, on the property in Tennessee. That\u2019s a great point. This is where partnering us up with a realtor, we\u2019re going to coach them on that. Right? So if you say, \u201cOh, my realtor doesn\u2019t know how to do that.\u201d Or \u201cI don\u2019t know how to do that. How do I word that?\u201d Like, just give us their contact, right? I mean, we\u2019re a brokerage that once again, practice is what we preach.
We know how these things go especially if you\u2019re working on David\u2019s team. This is something that with the market kind of we\u2019re starting to see price drops, this is something that\u2019s even more attainable now. Right? I mean, you can get the seller to pay for your rate, buy down. So all of you guys who are monitoring the market and oh my God rates are crazy. Have the seller buy down your rate, right? You\u2019re getting the rate from a month and a half ago and that wouldn\u2019t be available now if the seller didn\u2019t credit you that money. Absolutely a tactic in a rising interest rate environment to kind of reset yourself prior to the last few rate increases.<\/p>\n

David:
Which is why we get so excited when we see\u2026 It\u2019s not that we\u2019re happy rates are going up, right? Everyone\u2019s a shock to everyone. Nobody likes it. But the effect of that is the market softens, other buyers, your competition, that everyone forgets they\u2019re competing with other buyers. They always think they\u2019re competing with the seller or they\u2019re competing with their uncle that tells them not to buy a real estate. No, you are competing with all the other people that want that asset. They get hesitant and it opens up this window. That\u2019s why I went and put eight properties under contract in a couple weeks here because I\u2019m seeing, oh, this thing is in a great area. Great thing. It cash flows really well.
Everything works, but everybody else is afraid. They\u2019re holding their breath and saying, \u201cIs everything going to collapse? And I don\u2019t want to jump in too soon.\u201d But this softening gives us the opportunity, that\u2019s what I\u2019m trying to get at here, to use these techniques, to use these strategies, right? For the last six years, the only strategy has been write a higher offer.<\/p>\n

Christian:
Yeah. Basically.<\/p>\n

David:
That\u2019s it. You pay more than the other buyers are paying or you don\u2019t get the house.<\/p>\n

Christian:
And waive your appraisal contingency.<\/p>\n

David:
Yeah. Yeah, exactly. Now we\u2019re keeping appraisal contingency. We\u2019re keeping inspections. We\u2019re keeping loan contingencies. We\u2019re shopping around to find you better loans. We\u2019re looking for ways to get your rate lower. Or a lot of the times we get people 15% down on investment properties instead of 20% down. There\u2019s things like that we can bring into play. I think you have to be grateful that the market is softening because if you saw some of the tricks that we\u2019re using to maximize what we\u2019re doing, I think a lot of people would be really pleased.
More importantly, buyers are happy about what they\u2019re paying to get the house. No one\u2019s been happy for what they had to pay in the last six years. They\u2019ve been happy afterwards, right? A year later, you\u2019re like, \u201cWell, this is great. I wish I\u2019d bought more.\u201d But at the time, no one felt good about it. This is finally a period of time where you can actually feel good about what you\u2019re buying. I feel pretty good about the one we got, Rob. What do you think?<\/p>\n

Rob:
Yeah. I mean, I was going to say like, we got a $75,000 seller credit on that. I think there\u2019s obviously certain rules on how much of a seller credit you can get with a property and everything like that. We were like, \u201cMan, 75,000 might be, we might be maxing this out. So we had to creatively shuffle things around. I think we might have bought down our rate.<\/p>\n

David:
That\u2019s what we did. Yeah.<\/p>\n

Rob:
Yeah. I mean, we got that. We got full on, we got it fully furnished, which was halfway beneficial, halfway a bit of a torturous journey, getting rid of a lot of the grainy knickknacks, but it did end up\u2026 I think it\u2019s a net positive on that one, but we negotiated pretty heavily on that one. And then we played hardball and we got it. And yeah. Then we got the appraisal back and we came in 150.<\/p>\n

David:
Like I told you, the land is worth more than the land with a 6,000 square foot house on it. And the furniture thing you mentioned\u2026 We could do this all day because this is so fun. Let us know in the comments in YouTube, if you guys would like to hear more of these type of shows, where we talk about our deals. But you didn\u2019t love the furniture on the Scottsdale property, which is fair because it wasn\u2019t the best.<\/p>\n

Rob:
Yeah.<\/p>\n

David:
But we were also able to buy furniture relatively easy because it\u2019s Scottsdale. They have a lot of stuff.<\/p>\n

Rob:
Yeah. Yeah.<\/p>\n

David:
Some of the properties that Christian and I are buying in different areas or that I\u2019m buying in different areas, getting furniture is a pain in the butt because of supply chain issues. So being able to-<\/p>\n

Rob:
Oh dear, especially Tennessee.<\/p>\n

David:
A hundred percent, right? Being able to get that negotiated into the deal, not only saves you a ton of money because furniture\u2019s very expensive, but it also saves you three or four months of waiting to get it furnished before you could book it, which could turn into five to 10 grand a month. Right? There\u2019s a lot of ways that I\u2019m seeing this is awesome for me. Could the market go down more? Sure. Will it go down more on some properties? Probably so. Does that mean that these are bad buys? No. Not at all.
It\u2019s going to go back up again at some point, too. If it\u2019s making a lot of money and I\u2019m getting into the best areas, I think it\u2019s a mistake to try to time a market because markets are all so different. What you\u2019re seeing in Scottsdale in the luxury of really expensive space, that\u2019s slowing down a little bit. What you\u2019re seeing in Southern California, Los Angeles in the first time home buyer space has not stopped at all. It\u2019s just as hot as it\u2019s ever been. That\u2019s another thing to keep in mind.
Christian, is there any last words you\u2019d like to provide before we move on to the next segment of the show? When it comes to advice for a real estate investor who is trying to calculate like I\u2019ve got the lender and the agent and all these strategies they talk about and I read Brandon Turner\u2019s book on No (and Low) Money Down Real Estate. I really like what Rob\u2019s doing. Like there\u2019s so many things going around, where do they start? And when they walk into that position, what is it they should be looking for.?<\/p>\n

Christian:
You\u2019re saying with their first ever investment property?<\/p>\n

David:
Or maybe just a newer person who wants to start buying it or maybe wants to buy more, they\u2019ve got two or three and they\u2019re like, these are going good. I want to scale. Give them an idea of where they should go, who they should start with and what they should be looking for.<\/p>\n

Christian:
Yeah. I mean, I\u2019m biased. I\u2019d say our company, right? But aside from just who you\u2019re talking to, the mindset is really, I believe we\u2019re headed for a place in this country where if you don\u2019t own property in the next three or five years, I don\u2019t think you ever will. I think real estate is going to become such a hot asset and it\u2019s going to be so hard to get competing with investors and corporations, everything. I really think, and this isn\u2019t fear tactic. I\u2019m not trying to preach that. So please don\u2019t misrepresent, but just not be afraid to jump in. You know, I mean you can always\u2026 People are talking rates right now. America\u2019s awesome with our finance strategy because you can refinance, right? I mean your six and a half percent rate that you have right now is not the rate that you\u2019re going to have for 30 years.
Right? I mean, you refinance the moment the rates get low again. I mean, historically speaking, a 6% interest rate is not like this catastrophic interest rate.<\/p>\n

David:
[inaudible 01:09:30].<\/p>\n

Christian:
It\u2019s a fairly healthy market rate on a mortgage. It\u2019s not, you know. I mean, granted prices are high right now, but you pay down some equity if you, and obviously buy what you can afford. I\u2019m not telling people to throw every last dollar they have into real estate. But if you can comfortably afford, don\u2019t get caught up. Create a buy box. If you want to copy mine, awesome. If you want to copy Rob\u2019s, awesome. But create something that you\u2019re comfortable with.
If it hits these numbers, link up with an investor. If you\u2019re buying short-term rentals, please talk to a short-term rental agent, right? Don\u2019t go to the first time home buyer, down payment assistance person and say, I\u2019m looking to buy an investment property. Surround yourself with investment-minded individuals, ourself as a lender, a short-term rental agent out in whatever area you\u2019re looking at. And if you\u2019re surrounding yourself with people who can correctly advise you, you\u2019re going to end up in a better situation. It\u2019s just surround yourself with that mindset.<\/p>\n

David:
Yeah. I wasn\u2019t saying you should just come to us, but if they do come to us or they go somewhere else, what questions should they be asking to get the ball rolling in the right direction?<\/p>\n

Christian:
Like David was saying, don\u2019t come and say, you got David 12% down. Let\u2019s get it. Right? But really working with us, and we do consultation calls with every single person that reaches out to us. It\u2019s 15 to 20 minutes of us understanding the roadmap that you\u2019re trying to achieve toward success. I don\u2019t know many agencies that do that like that, but that\u2019s really how we have it built. Our first conversations should be come prepared, have us have a outline of what you\u2019re trying to accomplish, and allow us to build the path for you. But when we build that path, you can\u2019t be afraid to walk the path. Right? I could lay all the concrete brick in front of you that I want. If you\u2019re not ready to take that first step, that meeting was in vain.<\/p>\n

David:
I like that. The here\u2019s what my goals are. Here\u2019s what I want to do. Here\u2019s the capital I have. Here\u2019s my concerns. The person you\u2019re working with should be able to paint a decently clear picture of several options, right?<\/p>\n

Christian:
Absolutely.<\/p>\n

David:
If their answer to you is, I don\u2019t know what to tell you. What do you want? You want to get pre-approved? That\u2019s not the right person, right?<\/p>\n

Christian:
Yeah.<\/p>\n

David:
Your agent says, so do you want a three bedroom or a four bedroom search? Not the right person. Right? You\u2019re looking for that person that goes, \u201cOh, have you considered this? Or what we\u2019re finding in this market is this is the case, and I can help you with all of these different things.\u201d I think that\u2019s a much better approach to take, especially if you\u2019re trying to get into the market at a time where there\u2019s a little bit more uncertainty.<\/p>\n

Christian:
Absolutely. Yeah. An agent, a lender, even an insurance agent that really understands what you\u2019re trying to accomplish is invaluable in this time right now, in this economic climate that we\u2019re in. It\u2019s vital to your success.<\/p>\n

Rob:
Yeah, for sure. So you said you\u2019re not trying to be a alarmist or anything like that. You think we should not make the thumbnail like all red and then we give you like red sort of demonized with like flames behind you and big title printed over.<\/p>\n

Christian:
Buy right now. Yeah.<\/p>\n

David:
Yeah. Let\u2019s clarify that. Because I know in the comments we have something coming, he said, in three to five years, you won\u2019t be able to buy real estate. They\u2019re trying to get you to buy. There\u2019s a crash coming. We\u2019re not saying in every market in the entire country, you\u2019ll never be able to own a home. Okay?<\/p>\n

Christian:
Correct? That is true.<\/p>\n

David:
I think that was a bit of an aggressive statement. But what you\u2019re describing is there are changes happening that we see that the average person doesn\u2019t, where institutional capital is a bit of a Godzilla. It\u2019s coming in and smashing people and paying way more money than anyone realizes. And if some of those companies buy Airbnb, buy Vrbo, then they go buy all the properties. All of a sudden you put yours up there at Airbnb and it shows up as number 97 and the 96 above it is all the ones they own becomes very, very difficult for the mom and pop investor to compete.
I think in the hottest markets where they feel the safest, like the best areas with the best weather, the best travel, the best amenities, they will go in there and bully people out. Absolutely, I do agree with that. Real estate\u2019s very local. So if you\u2019re living in Virginia Beach where Christian bought his first property, I don\u2019t think that this is going to happen there. Right? That\u2019s not the same scenario, but I do think over time, real estate is becoming an asset class like a stock. It used to be so much labor to own real estate that the big companies didn\u2019t do it. They just traded in easier things to own like stocks. As they are learning how to make this more automated, it is turning much more into something like a security. And when that happens, it\u2019s a lot harder to buy it because your competition ramps up.
So just to be clear, I\u2019ve got a lot of properties I\u2019ve been looking at that that I\u2019m slow playing. Okay? The one I described earlier is listed at 1.5. It\u2019s dropped down to 1.45, and then 1.35. It\u2019s sitting at 1.25. I\u2019m going to write an offer at a million-fifty. Okay? I don\u2019t expect I\u2019m going to get that property, but it\u2019s been on the market for a hundred days. This isn\u2019t me going after a property that have been on the market for two days. Right? However, that million-fifty is a jab I throw and I look to see what are they going to respond with? What if they counter me at 1.125? Well, now they\u2019ve come down pretty significant from their one. That\u2019s more of a motivated person. Right? If it stays on the market, it\u2019s moving in my direction. So in some scenarios, yes, take it slow. See what you can get. And then in other scenarios, depending on the property, you\u2019re going to have to move quickly.
All right, Christian, we\u2019re going to move on to the next segment of the show. It is the deal deep dive. In this segment of the show, we are going to dive deep into one particular deal that you have done. All right. This is the part of the show where we dive deep into one specific deal with our guests. Remember you two can do more deals with the help of BiggerPockets tools, and resources. All right, Christian, do you have a property in mind?<\/p>\n

Christian:
I do.<\/p>\n

David:
All right. Question number one. What kind of property is this?<\/p>\n

Christian:
It\u2019s a single family home in Bradenton, Florida with an additional casita, two bed, one bath, additional dwelling unit.<\/p>\n

David:
Like an ADU or a granny unit.<\/p>\n

Christian:
It\u2019s an ADU. Correct.<\/p>\n

Rob:
How did you find it?<\/p>\n

Christian:
I found it through one of my local short-term rental agents out there who brought it up to us. It was on market. Wasn\u2019t some special off market deal. So yeah, standard MLS.<\/p>\n

David:
All right. How much did you pay for it?<\/p>\n

Christian:
Original contract was for 830. We dropped it to 818 was our\u2026 Oh, I\u2019m sorry. No, it was purchased for 830. It appraised for 818. So I actually overpaid slightly for this house.<\/p>\n

Rob:
How did you negotiate the house?<\/p>\n

Christian:
Negotiated, used a standard agent. It was when the market was very, very hot. I purchased it in 2021. So it wasn\u2019t a whole lot of negotiating power there, but we didn\u2019t negotiate, I believe four or $5,000 just for minor repairs, but it was a pretty clean cut deal.<\/p>\n

David:
Okay. How\u2019d you fund it?<\/p>\n

Christian:
Funded it 15% down, DSCR loan, and actually our kind of flagship product that we use utilizing the expected rental income that it was going to produce as a short-term rental.<\/p>\n

Rob:
What did you do with it?<\/p>\n

Christian:
Yeah, so obviously, a little bit of foreshadowing there, but I\u2019m using it as a short-term rental? This one is unique because it\u2019s in Bradenton, Florida, which is a kind of a vacation destination. It\u2019s about 45 minutes to an hour south of Tampa on the Gulf Coast of Florida. The numbers have been even higher than we expected. In six months, it did $97,000 in gross rent. We anticipated it would do about 150 to 160. So it\u2019s on track for 180.
It\u2019s by far and away out producing. The reason being we\u2019re actually running it as two separate listings. You can either rent it out as a full six bedroom or the main house is a four and the casita is a two. So in the days where the main house is not rented, we just rent the back unit. It\u2019s a shared backyard, so we have it kind of segmented where they could be two separate rentals. So really maximizing the occupancy rate on it and keeping it booked. You know, even if it\u2019s a couple day filler, we just fill in the two bedroom casita there.<\/p>\n

David:
What was the outcome?<\/p>\n

Christian:
Outcome? Awesome short-term rental opportunity. If we sold it as an Airbnb right now, it\u2019s probably already appreciated by 150,000. We got a realtor reach out to us to try to sell it. And listing price was going to be one million five. A million 50,000, I should say. So very satisfied with how that\u2019s gone. We\u2019re going to hold it for a short-term rental for the foreseeable future, but it\u2019s doing very well for us. We\u2019re very excited about it.<\/p>\n

Rob:
What lessons did you learn from this deal?<\/p>\n

Christian:
This was my first kind of bigger purchase. Everything prior to this time had been 700,000 and below. This was kind of my dipping my toes in the water of higher value properties. It made me realize if you have multiple units\u2026 This is the David Greene special, right? If you got multiple units, if you got heads and beds, added rental capacity, I knew it would have some benefits, but I did not forecast the level of the benefit that it would have with being able to fill up the days that were unrented instead of having it go four or five days unoccupied. Maybe you fill up three of those with 150, 200 bucks a night for the two bedroom. And it really, really made a difference for us. It\u2019s going to do $30,000 more than we anticipated when we first reviewed it.<\/p>\n

David:
All right. And this deal, who was the hero on your team?<\/p>\n

Christian:
The hero on my team was for sure, my partner, I shouted out earlier. This is one that I purchased with Karen and we have a partnership where she manages for me. We self-manage, but she\u2019s taken on the majority of it, everything from scheduling the cleaners to go in, to communicating with clients. We do have a perfect five star rating on that property on Airbnb, which we\u2019re excited about. She got super host status and yeah, just that property has had a lot of really good reviews. It was remodeled. It did come furnished, which was a big one, and it was an active Airbnb. I forgot to add that. It was already a existing, running Airbnb, but yeah, Karen was absolutely\u2026 Couldn\u2019t have done that one without her.<\/p>\n

David:
All right. That\u2019s going to wrap up our deal deep dive. We\u2019re going to head over to the last segment of the show. It is the world famous.<\/p>\n

Speaker 4:
Famous for\u2026<\/p>\n

David:
All right. First question for you, Christian. What is your favorite real estate book? I\u2019m curious to hear you answer this because I know you don\u2019t read.<\/p>\n

Christian:
No, I don\u2019t read. There you go. Showing my dirty secrets. Well, I think if I came onto a podcast hosted by my business partner and I didn\u2019t shout out one of his books, I think the partnership would be concluded at that point. So I\u2019m going to shout out any book written by David Greene. I do like the BRRRR one. The BRRRR method has blown up to a level that I don\u2019t think anybody who originally thought about it intended, but yeah, BRRRR book just taught principles and concepts along\u2026 You know, that partnered with the long distance real estate investing. You know, those are morals and ideas that we teach in our company and that we do ourselves. I think the influence that those books had on the market is invaluable. I think it\u2019s really, really awesome books.<\/p>\n

Rob:
Good answer. Good answer. Favorite business book?<\/p>\n

Christian:
I will say, I have read this one. Never Split the Difference, Chris Voss. I think just seeing things from the side of a hostage negotiator. If you guys haven\u2019t read that book, absolutely recommend it. It just teaches you how to negotiate in an avenue that I didn\u2019t think a whole lot before, but negotiating for people\u2019s lives obviously is a different level than negotiating for real estate, but a lot of really good principles in that one.<\/p>\n

Rob:
Great. When you\u2019re not off buying 15 short-term rentals in a year, what are some of your hobbies?<\/p>\n

Christian:
I love snowboarding. I had a pretty bad accident a couple years back that I actually haven\u2019t snowboarded since, but absolutely love snowboarding. I\u2019m one of the best five-foot-six basketball players that are out there. No, I\u2019m kidding, but I love playing basketball. I\u2019ve played it since I was very young and I\u2019m a five foot six, five foot seven with shoes on white guy. So you can imagine the challenges that I had to go through, but absolutely love my basketball time.<\/p>\n

David:
The books that Christian mentioned, if you want to buy those or any of the other BiggerPockets books, there is an entire library of stuff that will really help you get your investing career off the ground. You can find those at biggerpockets.com\/store. That\u2019s where you can buy any of the books that we have for sale.
My last question for you, what, in your opinion, sets apart successful investors from those who give up, fail or never get started?<\/p>\n

Christian:
Gosh, I would just say action. Obviously, it\u2019s easy to say, act and don\u2019t have fear, but really just maximizing opportunity. Like David said earlier, when a market downturns or when things slow down, people like David and myself get really excited, right? We\u2019re not scared of the rates. We\u2019re not scared of the added risk of the market right now. We see this as a buying opportunity, right? We see this as an opportunity to get things that you couldn\u2019t get last year.
So I think when the world presents you with lemons, try to get them squeezed. Make some lemonade out of them and make the best out of the unfortunate situation of our government printing 80% of the money supply, right? Let\u2019s try to at least benefit a little bit from it.<\/p>\n

Rob:
And lastly here, tell us where people can find out more about you.<\/p>\n

Christian:
This is an interesting one. I do not have any social media. We have our website, the onebrokerage.com. It can be spelled out O-N-E or the number one. If you\u2019re looking to get in contact with the team, I do have a BiggerPockets account. So if you just type in BiggerPockets, and put Christian Bachelder, you\u2019ll see my account.<\/p>\n

David:
How often do you check that, Christian?<\/p>\n

Christian:
I check it actually pretty frequently. So I\u2019m fairly active on BiggerPockets. If you guys direct message me, I will respond. But yeah, I don\u2019t have an Instagram or a Twitter to shout out, but I prefer to keep it that way. Yeah. And if you find yourself on our website, the onebrokerage.com, navigate to the About Us tab, you\u2019ll see my personal contact there, my email to reach out. Anything you need, advice, guidance, or to get pre-approved, I can definitely help you out.<\/p>\n

David:
All right, Rob, what if people want to find out more about you?<\/p>\n

Rob:
They can find me on YouTube over at Robuilt, R-O-B-U-I-L-T. And then you can also find me on Instagram at Robuilt, too and TikTok at Robuilto. Now, let me just take a moment to say that someone was smart enough to\u2026 So I captured Robuilto as a handle on TikTok because someone took Robuilt and someone then took Robuilto on Instagram, and they\u2019re scamming people. So this is very confusing, but Robuilt on Instagram, not Robuilto, and then Robuilto on TikTok. I\u2019m like, man, this is my life now. This is what we have to preface for everybody. So just make sure you\u2019re not sending crypto to me or David. Okay? With that, what about you, David?<\/p>\n

David:
I\u2019m davidgreene24 and on YouTube I\u2019m David Greene Real Estate. So please go, give me a follow. I still have way less followers than Brandon Turner, who\u2019s not even on the podcast, and he lets me know every single time he sees me. And then just to hammer this point home, do not send me or any of these guys money on social media. When Christian and I were having lunch, I got a call from a cop friend of mine, who\u2019s not the most tech savvy, a little bit older, and he got scammed. He sent a bunch of money to someone thinking he was sending it to me. It\u2019s freaking heartbreaking.<\/p>\n

Rob:
Oh, man.<\/p>\n

David:
I\u2019m doing everything I can to get the blue check mark on Instagram so that this won\u2019t work. Instagram has denied me about 20 times that I\u2019ve asked for it. I\u2019m still trying to make that happen, but please tell everyone you know, they may have our pictures. They may have the\u2026 It looks just like our Instagram. It\u2019s not us. It\u2019s easy to copy those and create a fake account. The screen name will be a little different. They\u2019ll put an underscore a period. They\u2019ll add like an extra E in Greene or they maybe take one of the E\u2019s and put three. Just something where you wouldn\u2019t recognize it right off the bat. But please be careful because it\u2019s the worst feeling ever when somebody that we know gets taken advantage of because they trusted us.<\/p>\n

Rob:
Stay safe, peeps.<\/p>\n

David:
All right, Christian, last question. If people would like to follow up with you and learn more about creative financing strategies, what it\u2019s like to work with us as a mortgage broker, they want to know more about the short-term rentals you\u2019re buying. They want to hear more about your buy box. They like what they heard and they want more. What do you recommend they do?<\/p>\n

Christian:
Yeah. If you navigate to our website, the onebrokerage.com, top right, there\u2019s an option for all our mastermind series. Feel free to enroll in them. There\u2019s a little RSVP button. Those will be opportunities for us to share both what we\u2019re doing personally, as well as to offer you guys some advice and guidance on potentially pursuing your next investment as well.<\/p>\n

David:
I really like what you said about if they have a realtor who doesn\u2019t know what we\u2019re talking about, introduce them to you, right? Those realtors can go to these webinars. That\u2019s free. We will teach about these loan products. Now your realtor has more information than they would\u2019ve had. They\u2019ve learned how to make a buy box for you. That\u2019s really what we\u2019re trying to do is help the whole overall experience be better because realtors aren\u2019t really that great. Most loan officers are saying, I\u2019m the cheapest, I\u2019m the cheapest. They\u2019re not understanding what investors are trying to do and we\u2019re trying to correct that. That\u2019s a great idea.<\/p>\n

Christian:
Yeah. We\u2019ll make your realtors better free of charge. We want to work with good realtors, guys.<\/p>\n

David:
All right. Rob, anything you want to say before we get out of here?<\/p>\n

Rob:
No, no thanks Christian, man. It\u2019s always nice to hear from you. I can vouch for One Brokerage and everything. You guys have been really great, and give me a run for my money if you acquired 15 short-term rentals last year. So good on you. Good on you.<\/p>\n

Christian:
Yeah. I appreciate you, guys. Yeah. Thanks for having me. Awesome. Awesome being here and yeah, hopefully we do it again soon.<\/p>\n

David:
All right, guys. Great job. I\u2019ll get us out of here. This is David Greene for Rob, our favorite client, Abasolo signing off.<\/p>\n

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