\n<\/p>\n
Don\u2019t know what to do AFTER closing on a house<\/strong>? You\u2019ve found your market, done your due diligence, passed your inspections, and now you\u2019re asking, \u201cwhat\u2019s next?\u201d Two of our three mentees <\/strong>are about to close on their first (and next) rental properties<\/strong>, but they don\u2019t have to go in blind, thanks to the expert guidance of experienced investors Ashley and Tony. But we\u2019re not just talking about a post-closing checklist. Instead, we\u2019ll get into the nitty-gritty of getting a new <\/strong>short-term rental<\/strong><\/a>, how to handle inherited tenants<\/strong>, when to switch your investing strategy, and what happens when you discover a BIG plumbing problem<\/strong> in a property.<\/p>\n We\u2019re back to conclude our final meeting with our ninety-day mentees. Brandon<\/strong>, Lawrence<\/strong>, and Melanie <\/strong>have made MASSIVE strides to become real estate investors. Brandon and Melanie come back with deals under contract<\/strong> and close to closing, while Lawrence is looking to switch up strategies<\/strong> and potentially re-enter the cash-flowing world of college rentals<\/strong>. All the mentees have taken significant steps to success in just three months, and you can do it too!<\/p>\n Stick around if you\u2019re trying to get your next rental property under contract<\/strong>, as Brandon, Lawrence, and Melanie discuss why having community<\/strong>, accountability<\/strong>, and pressure for success took their investing to the NEXT LEVEL. If you want to break through your biggest goals, sign up for <\/strong>BiggerPockets Pro<\/strong><\/a> today<\/strong> and join our next Real Estate Rookie Bootcamp<\/strong><\/a>!<\/p>\n Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Melanie: Ashley: Tony: Melanie: Ashley: Melanie: Tony: Melanie: Ashley: Melanie: Tony: Melanie: Tony: Melanie: Tony: Melanie: Tony: Melanie: Tony: Ashley: Melanie: Tony: Melanie: Tony: Ashley: Melanie: Tony: Melanie: Ashley: Tony: Melanie: Tony: Melanie: Ashley: Melanie: Ashley: Brandon: Ashley: Brandon: Ashley: Brandon: Tony: Brandon: Ashley: Brandon: Ashley: Tony: Brandon: Ashley: Brandon: Ashley: Tony: Ashley: Tony: Ashley: Brandon: Ashley: Brandon: Ashley: Brandon: Ashley: Brandon: Ashley: Brandon: Ashley: Tony: Ashley: Brandon: Ashley: Brandon: Ashley: Brandon: Ashley: Brandon: Ashley: Brandon: Ashley: Brandon: Ashley: Brandon: Tony: Lawrence: Ashley: Lawrence: Ashley: Lawrence: Tony: Lawrence: Ashley: Lawrence: Ashley: Lawrence: Ashley: Lawrence: Tony: Lawrence: Tony: Lawrence: Ashley: Lawrence: Ashley: Tony: Melanie: Tony: Ashley: Brandon: Tony: Lawrence: Tony: Melanie: Tony: Brandon: Tony: Brandon: Ashley: Melanie: Ashley: Brandon: Ashley: Lawrence: Ashley: \u00a0<\/p>\n<\/div>\n
This is Real Estate Rookie episode 269.<\/p>\n
It\u2019s so fantastic the power that community has and a lot of us have probably heard the saying that you\u2019re the average of the five people we spend the most time with. And I think that\u2019s so true, and I don\u2019t mean this to sound like ruthless, but if you can protect your time, who you spend your time with, to only the people that are on the same journey as you, only the people that are supportive of you and your goals and your dreams and your ambitions, those are the people that will help you make those dreams of reality. It\u2019s so cool to see the three of you leaning on each other throughout this process to support one another. It\u2019s a really cool thing to see.<\/p>\n
My name is Ashley Kehr and I\u2019m here with my co-host Tony Robinson<\/p>\n
Welcome to the Real Estate Rookie Podcast where every week, twice a week, we give you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. I want to shout out someone by the username of KSP 75. KSP said, love it. I own a multifamily home and my family lives in part of the house, so I have some exposure to tenants and leases, but Real Estate Rookie is fantastic to listen to as it gives information, guidance, and confidence to move to the next level of real estate investing. I plan to devour every episode, take notes, read, research, and be 100% ready with absolute certainty to pounce on my next deal when the conditions are right.
KSP we appreciate that five star review. And if you were part of the rookie audience and you haven\u2019t yet left us an honest rating review, take the two and a half minutes it takes to do that. Log into your phone, open up the app, hit the five stars, say what you got to say, and we would be forever grateful for that. Ash, I\u2019m excited. We\u2019re going to get to hang out in-person in a few days here.<\/p>\n
Next week as of this recording we\u2019re doing a meetup and a host retreat for all of the BiggerPockets host. I don\u2019t think we\u2019ve all actually been together since On The Market started, because Scott Trench, the host of the Money podcast was having his beautiful baby girl and wasn\u2019t at the conference. So this will be the first time all the hosts are together. I think everyone is going.<\/p>\n
But this\u2019ll be the first time we actually get to hang out with each other. I feel like it will be pick on. It was so fast and it was just the whole stage thing, but this time it\u2019ll be us really getting to hang out and know each other, so it\u2019ll be fun.<\/p>\n
Awesome. Today we have a great episode with our 90-day mentees. So Melanie, Brandon, and Lawrence are here to close out their 90-day journey and to let you know what they accomplished and what they learned and what they\u2019re going to do next.<\/p>\n
It\u2019s so crazy, these 90 days went by so fast. It feels like we just chatted with them for the first time. It\u2019s really cool to see where they\u2019re headed. And for those of you that are listening, let us know. Let us know in the reviews, let us know in the Real Estate Rookie Facebook group, how did you guys like hearing their journey? And if you are enjoying it, we\u2019d love to keep doing this and showing behind the scenes of how new investors really start taking the steps to kickstart their journeys.<\/p>\n
I think it\u2019s so cool they thank us, but they did everything. They did everything. Just watching their progress and the things that they implemented and doing the action items assigned, just amazing mentees that took our advice and they ran with it and we\u2019re so proud of them. I feel like a little mother scattering my little chicks. But it is so cool. And it\u2019s going to be amazing to continue to watch them grow and expand and blow past us on this real estate journey. For sure.<\/p>\n
Melanie, welcome back. Super excited to have you on. So give us and the Rookie audience an update. What\u2019s been going on since we last chatted with you?<\/p>\n
Thanks, Tony. Good to be back. It\u2019s been a good couple of weeks. Since our last conversation I dove into PriceLabs and did a lot of research per your recommendation to just get a little bit more comfortable with how bookings were looking the next couple of weeks out. And my other homework was to submit 10 offers. So at that time I actually within a couple of days submitted three offers, wanted to jump on that quickly, and one offer was accepted the next day. It was a backup offer and the original offer fell through. So went under contract and I close in just a couple of days now.<\/p>\n
Oh my gosh. Congratulations.<\/p>\n
Congratulations, Melanie. That\u2019s super exciting.<\/p>\n
Thank you. I\u2019m so excited.<\/p>\n
And it only took three offers, not even the full 10.<\/p>\n
Exactly. It only took three. It was lucky number three, and I\u2019m super excited you guys, so thank you for all of your support.<\/p>\n
No, of course. I think that\u2019s such an important lesson that you were the backup offer on another deal that fell through because that happened more often than people think. The second deal that I ever closed on as a real estate investor was the same exact thing. I had submitted the deal or that offer months and months before. And they wanted a contract with someone else and had fallen out, then they came back to me afterwards and said, hey, if you\u2019re still interested, we are still here. So that is super exciting, Melanie. Can you give us the details? What city? What\u2019s the purchase price, the size? Give us all the details.<\/p>\n
Totally. I stuck with Savannah. I\u2019m really, really excited about that city. The purchase price was 240 and I got 5,000 in seller credits. It\u2019s a three bedroom, two bath. I\u2019m still looking at 200 average daily rate. And so I think it\u2019s going to do well on Airbnb. I had a lot of fears around that and the uncertainty, but ultimately I just wanted to continue moving forward and go after this goal.<\/p>\n
We are so proud of you and I know that you thanked us, but this was all you. You did all of the fight work. All we did was tell you that you could do it. So congratulations, that\u2019s really awesome. What are some of the next things you have to do maybe before you close and then as soon as you close, and is there anything we can help with for that?<\/p>\n
Thank you. Really I\u2019m just waiting to close. I am using a loan and so I\u2019ve been working through the lending process, but other than that, it\u2019s really just going to come down to getting out there and setting up the Airbnb. I\u2019ll close remotely with the power of attorney and I basically have a giant spreadsheet and a bunch of just handwritten notes of all the things I want to check off. I\u2019m ordering furniture and washers and dryers and getting the utilities set up and just trying to have it as organized as possible so I can get out there, set it out and set it live.<\/p>\n
I love that. Melanie, have you downloaded our, mine and my wife, we have a free shopping list. Have you downloaded that yet?<\/p>\n
I haven\u2019t downloaded yours. I\u2019ve just been watching a bunch of YouTube videos. I would love to download that. I think any list, all the lists, I definitely I\u2019d love to get that because I\u2019m just trying to think of everything, so I\u2019ll have to find that.<\/p>\n
Totally. I\u2019ll send it to you afterwards. But just for those of you that are listening, if you go to the realestaterobinsons.com\/shoppinglist, you got some download, all the stuff that we buy. Something else, you mentioned design, so are you going to design this yourself or are you working with a professional designer?<\/p>\n
I reached out to a couple professional designers and priced it out. And honestly they were good deals, but I decided to do it myself. That was part of the fun for me and I really want to try that out. I am going to give it a go and hopefully it looks good. We\u2019ll see.<\/p>\n
No, I love that.<\/p>\n
But I\u2019ve been trying to get a style in mind.<\/p>\n
My recommendation when it comes to the design is see what what\u2019s already doing really well in the Savannah market and if you already have a PriceLabs subscription, you can literally just filter it down to three bedrooms, sort it by revenue and just go through the top 20 listings and see what their design aesthetic looks like. And the goal isn\u2019t necessarily to copy verbatim, but see what some of those themes are, those elements or those design pieces that make a lot of sense and try to incorporate those. And the last thing I would say is also pay close attention to the amenities, our hot tubs. Something that you need in Savannah. Do you need game rooms? Do you need, I don\u2019t know, pack and plays and high chairs? Really understand what are some of the amenities that are popular in that market. So that way as you\u2019re building out your design budget, you\u2019re making sure that you\u2019re leaving room for those amenities as well.<\/p>\n
That\u2019s a great recommendation. I think the real only amenity I was really focused on understanding was, do I need to buy a hot tub? But I haven\u2019t looked at some of those other things, so I definitely will look into that. And your recordings with PriceLabs were so helpful for me, so thank you for that access too<\/p>\n
Of course.<\/p>\n
I was at Tony and Sarah\u2019s most recent short-term rental conference and one of the questions someone asked Sarah was, should we buy the hot tub for the short-term rental? And she looks at everyone and says, what do we say? And everyone in the room yelled at once, buy the hot tub. Another thing that I also learned from Sarah during that same Q&A, was also looking at what your rules are and setting expectations up upfront for your guests. So the biggest thing she talked about was pets, put in there, pets are allow, but there will be an extra cleaning fee of $200 or whatever that is, and it\u2019s clearly stated in there, and pets on the furniture, things like that, because that\u2019s one thing I didn\u2019t have with mine. And we just had our first dog hair explosion over the brand new couch and across the whole apartment.
I think that that was a great recommendation too, is making sure you\u2019re setting those clear expectations ahead of time and then hopefully you don\u2019t have to worry about having these surprises show up at your property.<\/p>\n
I actually have a question about that. I\u2019m so glad you brought that up. What\u2019s the best way to put together your house rules? Those are great call-outs. Do you have guidance for a general list of rules that you have at every single property?<\/p>\n
You should 100% create, I guess there\u2019s two pieces to that. First you have your house rules that you put on your actual listing through the platforms. And then the second piece is that you have your digital guidebook, which outlines more of the additional rules that come along with running your property. So you should definitely be utilizing both of those. On the platform we typically only put the ones that are most important. And for us that\u2019s, typically we call out hot tub cleanliness. So if they dirty the hot tub, additional fees around that. We talk about quiet hours in our house rules on the actual platform, and usually that third one will be something specific to the property. So it could be like, I don\u2019t know, if you leave the slider glass door open in the wintertime or something like that. I don\u2019t know, just things that are specific to that property.
But then we also have the digital guidebook, which is the instruction manual and the rule book for our property. And we use Hostfully for our digital guidebook. And there\u2019s other ones out there, but Hostfully is one that we\u2019ve used. And Hostfully is cool because it allows you to create both written and video instructions for everything related to your property. Like Ashley said, we have little doggy beds at a lot of our short-term rentals, and we have in the digital guidebook, hey, make sure that if you bring a pet, that they sleep on the doggy bed, then there\u2019s a photo of the doggy bed and says if they sleep anywhere else and we\u2019re going to charge you. So you can put a lot of your extra rules inside the guidebook as well.<\/p>\n
Great. One thing I see a lot on some of the Airbnb threads I follow, are excessive cleaning requirements. A lot of people complain that we\u2019re paying for a cleaner. Why are we also required to do 10,000 things to keep the house clean? Have you run into that, do you run into that at all?<\/p>\n
I think there\u2019s a fine line that you want to walk there. We stayed at an Airbnb last summer and they wanted us to do not one load of laundry, but two. They said strip all of the beds and they were all whites, put that in, run that full cycle, put that into the dryer, and then wash all of your towels second. And we didn\u2019t do any of that. That\u2019s way too much. But what we do and what Airbnb says is reasonable is they shouldn\u2019t be cleaning more than they clean at their house. What we asked them to do is, hey, please don\u2019t leave an excessive amount of dirty dishes. If you want to leave some, cool, but don\u2019t just stockpile a week\u2019s worth of dishes into the sink. We tell them to throw their dirty towels onto the floor of the bathroom, that way our cleaners can just gather those all up.
And that\u2019s pretty much it. We don\u2019t ask them to sweep, we don\u2019t ask them to mop. We don\u2019t ask them to take the trash out. I think there is a certain level of things that are reasonable and you can play with what makes most sense for your market.<\/p>\n
We do the same too, where we have them take any blankets they use too, that are maybe in the common areas, and put those also with the towels on the bathroom floor just so we know what was used, to up just extra linens and stuff like that. I think we might have them load the dishwasher. And just so we know what plates and stuff they did use is load the dishwasher too, that might be one.<\/p>\n
Were your lists learned over time?<\/p>\n
I think an easy way to do it is to just ask yourself what would you be comfortable doing at someone else\u2019s Airbnb? And use that as your starting point. And if you get a lot of feedback from folks about, I can\u2019t believe you\u2019re asking me to do this. If it\u2019s one person, maybe don\u2019t worry about it. But if you hear that as a theme across multiple guests, then it might be something worth taking out. It\u2019s always this iteration or this iterative process where we\u2019re always tweaking our check-in messages and our expectations and our house rules based on the feedback that we get from our guests.<\/p>\n
Great. Well thank you so much.<\/p>\n
Thank you so much for sharing with us and asking great questions.<\/p>\n
And congratulations. We\u2019re super excited for you and we really do hope that this first deal turns out to be a great success for you. Last thing I\u2019ll say for you, you\u2019re in Savannah, Georgia, right? You said that\u2019s where you\u2019re buying?<\/p>\n
Yep.<\/p>\n
There\u2019s a Savannah Bananas are in Savannah, Georgia, if I\u2019m not mistaken, and they\u2019re like one of the most popular minor league baseball teams in the United States. And it\u2019ll be so cool if you had some element whether it\u2019s like, hey guys, here\u2019s a free ticket to a Savannah Bananas baseball game. I\u2019m sure you could reach out to them or get discounted tickets or something, but use that cool little entertainment piece and see if you can tie it into your interior listing.<\/p>\n
I love that idea. Thank you. I didn\u2019t even know about the Bananas, but that\u2019s hilarious.<\/p>\n
Okay, well Melanie, thank you so much and we\u2019re going to have you back on in a little bit here to do a group discussion.<\/p>\n
Okay. Thank you guys so much for all your help.<\/p>\n
Okay, Brandon, welcome back. We\u2019re excited to hear your update. Last time we spoke you had gotten a property under contract. What\u2019s been new since then?<\/p>\n
Since then the closing actually got pushed to the 23rd, so next Thursday.<\/p>\n
Well congratulations.<\/p>\n
Thank you very much.<\/p>\n
Even though it\u2019s pushed, it\u2019s still happening, so that\u2019s still great progress.<\/p>\n
It was a bummer to miss basically the full month of February forage, but the purchase money mortgage that the seller was using, he has to spend so much on his construction project before he can 1031 into it, was how he explained it to me. So that was the reason for the date to be pushed.<\/p>\n
So how are you still feeling about the property, Brandon? You\u2019ve gone through your inspection processes, were there any pros or cons that you found as you were going through that?<\/p>\n
I\u2019ve got through the walkthrough, I\u2019m pretty confident and there is some things that are just David\u2019s, cabinets, flooring, it\u2019s about 2005 or seven, so everything\u2019s getting there after this tenant might be need to be gone through pretty confident in the property itself. The inspections actually tomorrow, so I don\u2019t have any big things to report from that, if it went well or if it didn\u2019t.<\/p>\n
So you did decide to get one?<\/p>\n
Yes. Yep. I did take your advice on that.<\/p>\n
Interesting.<\/p>\n
Awesome. And here\u2019s the thing, right? The inspection, and I don\u2019t know what relationship you have with your seller right now. So maybe this isn\u2019t a lever that you pull. But typically the property inspection is going to call out some things that may benefit you as the buyer to get some additional credit from the seller. So obviously if you already walked the property and you feel like you got a good feeling for most of the repairs that might need to be done, but say there is something that in that report that is a much bigger financial investment than you had originally anticipated, just know you have every right to go back to the seller and say, look, I was thinking I could patch the roof, but according to this inspection report, the whole roof needs to be replaced.
Or hey, I thought I could just service this HVAC unit, but now the whole thing needs to be repaired or something like that. Don\u2019t be afraid to use the information that\u2019s in that inspection report to make sure you\u2019re compensated fairly.<\/p>\n
That makes a lot of sense. Fortunately being a townhouse, the larger exterior stuff isn\u2019t as much in play or I\u2019m sure they\u2019ll still check the attic and stuff like that, but the roofs were done two years ago in the whole association as well as siding not too long ago.<\/p>\n
Brandon, what was the cost of the inspection?<\/p>\n
I think it was about $360, something like that.<\/p>\n
I was just curious as to what it would be, especially for a townhouse. I\u2019ve never done an inspection on a townhouse before and just to give everyone an idea of what it may cost, but I still think even at that price point that\u2019s well worth it. I think the last one I did, it was at a small single family property, I think it was 300, it was 300 or 350.<\/p>\n
And honestly, for the value that you get and the detail that goes into an inspection report, I feel like it\u2019s so worth that money, because I think mine are about the same, three to 400.<\/p>\n
You can also build a scope of work pretty easily. So if you do get a property that you\u2019re going to be rehabbing, getting that you\u2019re getting all the things they looked at, all the things that need to be fixed or maybe you don\u2019t even need to be, but you\u2019re going to want to fix them and you can use their inspection as a starting point as to like, okay, here\u2019s all the exterior things they looked at and let\u2019s start with this bidding count, the siding, things like that. Then getting into interior, here\u2019s the plumbing stuff.<\/p>\n
And Ash, we get a lot of questions about, hey, how do I estimate my rehab costs? But it\u2019s like if you do the inspection and you just share that inspection report with the contractor, that could even give them enough information to give you a ballpark scope of worker or budget for that project also.<\/p>\n
That\u2019s a great idea. So Brandon, what do you have planned upon closing? Are you doing anything with the tenants in place? Are you going to increase their rent? Are you going to have them sign new lease agreements or do they have a long-term lease already in place?<\/p>\n
They do have a current lease up until May of 24. They\u2019re signing over the lease to me, so I don\u2019t plan on raising their rent. Well obviously can\u2019t because they\u2019re staying in the same lease. But the night before going over to walk through, just make sure nothing big has happened since then, because our closing\u2019s at eight in the morning. So Wednesday night I\u2019ll walk through it, introduce myself, hand out to making up a little business card for my contact information and stuff like that. Have you guys ever assumed tenants before? Anything that I should go out of my way to talk to them about?<\/p>\n
Yeah. Have you had any contact with them at all yet?<\/p>\n
I\u2019ve not. Their one daughter was at home when I walked through it before, but outside of that, no.<\/p>\n
The one thing I would do is send them an estoppel agreement, which is basically just confirming. So are you going to be there tomorrow for the inspection?<\/p>\n
I wasn\u2019t, no.<\/p>\n
Okay. Well, you can ask, I would ask the seller permission to send this to them and it\u2019s basically just everything that\u2019s on the lease they\u2019re agreeing to, or maybe when you read through the lease agreement, do you have a copy of the lease?<\/p>\n
Yes, I do.<\/p>\n
Okay. So go through that and look, does it state things like who owns the appliances in there? And just go through the lease and make sure everything is covered or if it doesn\u2019t say pets are or aren\u2019t allowed or something, then verifying with tenants, what are the rules? Does it say in the least who cuts the grass? You don\u2019t want to go into this property thinking the tenant takes care of the grass and then you find out that actually the owner paid it and that\u2019s another $500 a year you have to spend on someone cutting the grass or taking the time to go and do it yourself. I think verify with them anything that\u2019s not in the lease agreement, doing that.
And then for anyone listening that there is no lease agreement or it\u2019s like a handshake deal, verify that what the landlord is verbally telling you is correct or even what\u2019s on the rent rider that comes with your real estate contract, that the tenant is in agreement with what they\u2019re stating the rent and the terms are too. So that would be my only thing, is going through the lease agreement one more time and just seeing if there\u2019s anything that you think is missing from there that could possibly become an issue later on as to who\u2019s responsibility is that.<\/p>\n
I had gone through it, highlighting the biggest things, the rent amount, the timeline that they\u2019re staying in there. For the grass and snow is HOA, so that\u2019s one that\u2019s easy for both of us, but I will have to just make sure. The appliance stuff the landlord owns, but I also have to make sure that it\u2019s written then.<\/p>\n
And then I\u2019ve had inherited tenants before and I haven\u2019t had a problem, so I don\u2019t think that you have much to worry about. I know some people have a bad experience with inherited tenants and say never buy a property with tenants in place, but there are definitely some pros to that as you get a rent check the day that you close.<\/p>\n
Day one.<\/p>\n
And you don\u2019t have to worry about filling the vacancy and learning how to lease and market a unit. I think that\u2019s great for your first investment is to already have that piece in place and you\u2019re just going to start getting that mailbox money. One more question. Are you going to use any software to collect the rent?<\/p>\n
I was looking into RentRedi and I just had a bunch of difficulties trying to get it set up, so I\u2019m reopening and trying to see, or the current landlord\u2019s just collecting through a wire transferring or direct deposit into his account.<\/p>\n
There\u2019s so many different ways to do it and whatever makes you comfortable. RentRedi, Avail, apartments.com has one. Zillow even has one now. Those are some other softwares you could look at if you didn\u2019t find RentRedi was appropriate for you. But RentRedi is also a dollar I think you\u2019re a BiggerPockets pro member. I played around with it a lot. I like it. I think it has everything that you need, especially for your first several properties.<\/p>\n
I\u2019ll probably look into it a bit more, but I\u2019m not in too big a rush to find one before closing, just with one property, just keeping it easy for them to just do the same thing and just direct deposit into one of my account.<\/p>\n
You have access to the boot camps, right? The Rookie and the Landlord bootcamp?<\/p>\n
Yes, I did.<\/p>\n
Okay. Go through the Landlord bootcamp because I use RentRedi a lot as an example in there too. So if you do decide to use it, I did videos on how to do a lot of that stuff too.<\/p>\n
Okay. I\u2019m about a third through it.<\/p>\n
Cool.<\/p>\n
The Landlord one, I haven\u2019t seen those yet.<\/p>\n
Okay. Well awesome, Brandon, and congratulations, and you\u2019ll have to put into the Slack channel when you do close. We\u2019re super excited for you.<\/p>\n
I\u2019m excited to close and then I get to look forward to the other one in May.<\/p>\n
Well we\u2019re going to bring Lawrence on and then Brandon will bring you back for a group discussion.<\/p>\n
Okay, be on.<\/p>\n
Lawrence, welcome back. Super excited to hear how things have been going. We know that you\u2019ve been focused on trying to make some offers, getting something seller financed. So just give us an update how things have been since we last chatted.<\/p>\n
Of course. So the main thing was to submit more offers and more offers. I was up to maybe, possibly, I want to say 12 offers, almost had one that fell through. I was able to talk with a seller who has a property that\u2019s located very closely to one of my current properties, and we were going to do a deal for 10% down. The purchase price would\u2019ve been 100K for that particular one, a two bedroom, one bath, single family home. And unfortunately when I had an inspector walk that particular unit, there was some delayed maintenance from a water leak that the tenant supposedly never told the landlord. This is pretty much like a mom and pop landlord. I don\u2019t know if that particular landlord was subject to the honor code of the tenant, just either actually purporting maintenance issues or not reporting them.
This particular landlord I guess didn\u2019t have routine inspections. For me I constantly make sure that I am going into my particular units. And with that particular fall through with the water leak and replacing the plumbing to PVC piping, it was going to be over 30K.<\/p>\n
Lawrence, what did you learn from that inspection besides what the outcome was? What\u2019s something you learned maybe even about maintenance or doing a rehab or something that you\u2019ve gotten value out of starting this deal and doing the inspection where it wasn\u2019t just a waste of money and time so far? Where did you see that opportunity where it\u2019s now an opportunity cost?<\/p>\n
Of course. With all of my properties, I always do an inspection, but this was the one that, it wasn\u2019t contention on a bank appraisal. So I can be like, hey, it won appraise at this. It let me me know that, one, I don\u2019t delay maintenance and I don\u2019t want to ever be that person where a tenant is waiting on me to prepare something. So with my tenants it\u2019s not a matter of if something\u2019s going to be fixed, but when. And so, one, I don\u2019t do delayed maintenance and also I\u2019m very keen on having those inspections. So whenever it\u2019s a brand new tenant, I do four inspections out of the year. So the property\u2019s getting expected pretty much every quarter. And then if that tenant becomes a long-term rental, then I move to a twice a year inspection.
So definitely one thing I learned was that keep the model of not delaying maintenance. And then, two, how to factor in a what if there is a big ticket item, if I\u2019m definitely going to be doing something that\u2019s seller financing, because of course 10% down on 100K, it\u2019s 10, and then a 30K redoing of plumbing, that\u2019s almost 40K and it\u2019s not a flip. I definitely learned a multitude of different things. It was definitely a curveball that I wasn\u2019t ready for or I had not experienced had I not been a part of this mentorship program.<\/p>\n
So what happened next? You got the inspection report back, did you go to the seller and say, I need you to knock 30K off, or did you walk away from the deal? Take us through those next steps.<\/p>\n
Of course I did go back to the seller. I pretty much explained the situation, identified the quote from the plumbers. And this particular seller was like, unfortunately it would either be we seller finance it for 100K or you buy for cash at a discount value. And right now I\u2019m not buying properties for like 70K cash right now and have built in reserves to do a rehab or a flip. I definitely had to walk away from that. And that particular seller, we still have communication and it was someone who ended up buying it with cash. They didn\u2019t do seller financing, they bought it as a discount and I believe they\u2019re going to flip it. But a bright side is that particular seller does have more properties in the area and hopefully when that seller decides to deload more I can be a little bit more prepared to maybe get one.<\/p>\n
That was actually my very next question, Lawrence. Was about whether or not this seller had other properties. Just quick backstory, when I was initially investing, I lived in California, I was buying properties in Louisiana and I sent out some direct mail pieces. I met this wonderful lady, her name was Mary. Mary and her husband owned, I think 30 or 40 properties all paid for in that city. And they were looking to sell one property, tried to buy it from them and didn\u2019t work out. She came back to me almost a year and a half later. Hadn\u2019t talked to the lady after that first deal failed through. She came back a year and a half later and said, hey Tony, I don\u2019t know if you\u2019re still buying, but we\u2019re looking to really start offloading more of these properties. So have you had any conversations, Lawrence, with that seller about the other properties in their portfolio?<\/p>\n
Yes I have. And I want to make sure I be careful, I don\u2019t want to say the person\u2019s name of course, anything like that. But yes, I\u2019ve had conversations with that seller, and one of the properties that he owns us on the street of a property that I owned. And so he said the way that he sells his properties is he\u2019s waiting for people to not rent them out anymore. He\u2019s not renewing his tenants. He has been in the game for, I want to say like 40 something years, and he calls me a kid with gumption, because he was like, you really wanted to make this work, but I understand as an investor it has to be a win for both parties. And he said, I have your contact information. I actually have cards with my face on it in my bow tie. And so I gave him my card and he was like, I won\u2019t forget you. I\u2019ll remember the bow tie guy.
So hopefully a tenant does not renew and it\u2019s not one that\u2019s a delayed maintenance. And if so, maybe that will be added to my portfolio this year.<\/p>\n
What are some of the next steps you\u2019re going to take? Are you going to continue to target the same areas or are you going to maybe look for a different market?<\/p>\n
I\u2019ve been targeting the same areas. One thing I did was I built out my list and I sent out 85 mailers and I hand wrote each one.<\/p>\n
Awesome.<\/p>\n
I\u2019m pretty much still looking into this area. I may be going up about 90 minutes out maybe to the college station area, to the college area because I do have a background in student housing, so I may try to get a duplex out there and see.<\/p>\n
Okay, I love that idea of instead of switching a total market, and that\u2019s why I wanted to ask that question because it\u2019s so easy to get discouraged as to like, okay, I sent in my letters in this one area, it didn\u2019t work out, now I\u2019m going to go to a next one. I love that you are still sticking with it, but I really like how you\u2019re like, okay, I\u2019m just going to expand a little bit because there\u2019s this opportunity here that I see and it\u2019s adjoining to what you\u2019re currently doing. I think that\u2019s a great idea. So tell us more about doing the college rentals. Why does that intrigue you?<\/p>\n
Of course. I always tell people that I am a rookie as far as an investor, but I\u2019m not new to real estate. I believe I may have said this, but I worked for two publicly traded student housing companies. I did leasing and marketing. I did high rises in West campus for UT as well as in college station for Texas A&M. I have that background of collegiate leasing, marketing and the whole buy the bid synopsis. I said, let me just pull out some of my old tricks of being able to do leasing and marketing with student housing because I knew that like the back of my hand. I\u2019ve streamlined processes so much that I do not have to be local to manage it because I know student housing like the back of my hand.
I thought I was going to leave that in the past. But if I know it like the back of my hand, if I know how the leases run, if I know everything with the guarantors and the proximity of campus, I say, you know what? Let me just go 90 minutes out into college station and see if I can do a duplex or a fourplex and go back to being able to do student housing leasing, but as being the investor instead of the employee.<\/p>\n
Ashley, you mentioned this in one of the other episodes we recorded today, about how most people have something in their day jobs that might help them in their real estate investing career. And Lawrence, I love that you\u2019re leaning into that skillset that you already have. Lawrence, as you think about next steps for you and what some action items are to help you continue to progress towards your goals, what\u2019s on the docket for you? What do you have in mind?<\/p>\n
Well, I definitely will continue to use all of the resources provided via BiggerPockets and stay a part of that strong community. I definitely always stand by, it takes a village to be a real estate investor. So through this podcast I\u2019ve grown my network of people who are telling me, hey, if you decide to do another market, hit me up. I know this market, I know that market. So definitely want to continue to use the resources provided by BiggerPockets, continuing networking, and then most of all share my story and my resources because in order to be a good mentee, it\u2019s always good to be a mentor to someone else.<\/p>\n
I love that lesson, Lawrence. And if anything, the community that you\u2019re able to build and the network you\u2019re able to build and the value you\u2019re able to provide to other people, there\u2019s so much that comes along with that, that as long as you consistently do those things, you\u2019re eventually going to get that deal that you want. I\u2019m just excited that Ash and I got to play a small role and you\u2019ve taken a step towards that bigger goal.<\/p>\n
Of course, I\u2019m so excited to continue my journey, and again, very grateful for this opportunity.<\/p>\n
Well, keep pushing Lawrence. We always love having you on and just like the glow in your light that comes up and radiates, it really transpires onto others. So keep it up.<\/p>\n
Thank you.<\/p>\n
Okay, so we\u2019re going to head into a group discussion with everyone.<\/p>\n
Awesome. So now we got Melanie, we got Lawrence and we got Brandon on the call here. So excited to get through of you all together and talk through what the last 90 days have been like. So Melanie, maybe I\u2019ll talk to you first. If you look back to where you are today and where you were 90 days ago, would you say that maybe your goals have changed since you first started, with the goals you had on day one? Did they alter as you went through this journey?<\/p>\n
I don\u2019t know if my goals altered. I think what the goal looked like altered and changed a lot. Through and through I\u2019ve really wanted to purchase my first Airbnb and make that my next investment, and that in practice evolved quite a bit from one particular city to another and the structure of how I was approaching it. And I think it started off a little chaotically, but it over time still ended up being the same goal for me.<\/p>\n
I love that.<\/p>\n
I want to change that a little bit, Brandon, instead of the lessons learned, how have your goals maybe changed since you first started the 90 days?<\/p>\n
My goals changed moving forward as the goal was to get my first rental property. Now I\u2019m getting more excited and looking forward into the next few. My biggest worry now is running out of down payment money. So exploring other strategies that might produce more cash flow a little faster, like short-term rentals or medium term as well as trying to look for more distress properties to go forth, more approach just to leave less money in deals so I can scale as fast as I want to.<\/p>\n
I guess my question, this is really for all three of you, and maybe Lawrence you can answer first. What was the benefit of doing this with someone else? Because I think so often for a lot of our rookie investors, they feel like they\u2019re on this island going on this journey alone. So for the three of you, what was the benefit of having someone else go through that journey with you? Lawrence, if you want to start.<\/p>\n
Of course, and I love that question. One, you can\u2019t run from it. I would definitely say you have that accountability because, one, this is public. I\u2019m one where I rarely talk about my goals and what I\u2019m going to do next. This was something that I needed because again, I was so focused on, I\u2019m just going to buy properties with my W2 whatsoever. Maybe I\u2019ll try creative financing one day. But putting that goal out there, one, into the universe, and then having accountability partners. It was amazing to be a part of Melanie and Brandon\u2019s journey. We would text at night talking about what\u2019s going on, whether it was something that we was excited about with the journey, with the property or something that fell through. I remember Melanie trying to find her a new realtor.
I was asking my realtor friends in Georgia, like, hey, my buddy a part of this 90 day meeting program needs a new a realtor. I would say, one, it was making me accountable. I had to do this with someone. It\u2019s like having a personal trainer. You can tell yourself, hey, I\u2019m going to go to the gym and I\u2019m going to work out. I\u2019m going to follow this nutrition plan. But it\u2019s a difference when you have a trainer or you\u2019re a part of a challenge, a fitness challenge with other people. I had you, Tony, Ashley, Melanie, Brandon, and all of these people on social media saying, hey, I want to know what happens next. It kept me accountable and I\u2019m very much appreciative of that.<\/p>\n
I love that. Melanie, what about for you?<\/p>\n
I have to echo everything Lawrence said. The only thing I would add was also just being able to commiserate together. You\u2019re still facing some hiccups and some challenges and in the background we cheer each other on, and we\u2019re like, I\u2019m really worried about this. Where are you guys with this? Where are you with your closing, Brandon? Or where are you with finding a new realtor? That was nice. The sense of community was very motivating. It felt like you had something to fall back on. I don\u2019t know if I would\u2019ve been able to keep moving forward at the same pace without this group.<\/p>\n
I love that. Brandon, what about you brother?<\/p>\n
It was a good kick in the butt to finally be like, okay, now I have to do it. Versus going on MLS, seeing if anyone\u2019s giving away any houses. It\u2019s like, that one\u2019s a good deal. It has 30 offers now. It pushed me more to find stuff not publicly listed or check back in on other investors I had done HVAC work for, and it was just a good, now I have to do it. I can\u2019t just go through like,, start buying real estate when I find a good deal and maybe make good deals and reach out. The one in May I just followed up on an investor I put a furnace in a house for, and he\u2019s actually looking to sell it to put money into his personal house he\u2019s going to start building when that lease is up. So just reaching out and talking to people brought me two deals.<\/p>\n
It\u2019s so fantastic the power that community has. And a lot of us has probably heard the saying that you\u2019re the average of the five people we spend the most time with. And I think that\u2019s so true. And it\u2019s like if you can do, I don\u2019t mean this to sound like ruthless, but if you can protect your time, who you spend your time with to only the people that are on the same journey as you, only the people that are supportive of you and your goals and your dreams and your ambitions, those are the kind of people that will help you make those dreams a reality. It\u2019s so cool to see the three of you leaning on each other throughout this process to support one another. It\u2019s a really cool thing to see.<\/p>\n
The community aspect has been great.<\/p>\n
Well, thank you guys so much for being open and honest and sharing your successes and your struggles throughout this 90 day journey. Melanie, let\u2019s start with you. Can you tell everyone where they can reach out to you and find out some more information about you and your journey?<\/p>\n
Yes, please find me on LinkedIn. It\u2019s been great to get to connect with some people there, but yes, very active and hope to hear about people on a similar trajectory there.<\/p>\n
Okay, awesome. Thank you. And Brandon?<\/p>\n
You can reach me, I\u2019m pretty active on BiggerPockets, Instagram and Facebook. They\u2019re all my name. Instagram is my name, dot my last name, D-I-O-R-I-O. And then just my full name on Facebook and BiggerPockets.<\/p>\n
Awesome. And Lawrence?<\/p>\n
I\u2019m pretty much everywhere on all social medias. Lawrence_briggs, but I\u2019m most active on Instagram, so definitely let\u2019s be friends on Instagram. It\u2019s lawrence_briggs. You can\u2019t miss me. I have a big, huge smile and a bow tie.<\/p>\n
Thank you guys so much. We can\u2019t wait to continue to follow along you guys journey and to the success that you guys will have. Congratulations on your already success that you guys have had. It\u2019s been great to get to know you guys and to work alongside you. I\u2019m Ashley, @wealthfromrentals. He\u2019s Tony, @TonyJRobinson, and we will be back with another episode. We\u2019ll see you guys next time.
(singing)<\/p>\n