\n
Ashley:
This is Real Estate Rookie, episode 286.<\/p>\n
Tony:
We run a lot of our flips through our credit cards, buy materials and stuff. All of our events are run through our credit cards. All the different things we have in our business, we run through our credit card as much as we can. For all of the real estate investors that are out there, I think a common thing that people overlook is the ability to use credit card points to help fund your vacations.<\/p>\n
Ashley:
My name is Ashley Kehr and I am here with my co-host, Tony Robinson.<\/p>\n
Tony:
And welcome to the Real Estate Rookie Podcast where every week, twice a week, we\u2019re bringing you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. And today we got some Q&A. I love the Rookie replies because we get to deep dive the thoughts and deepest darkest fears and desires of our Rookie audience. The topics we\u2019re going to cover today are first when you should not use a HELOC, because there are times when you should and times when you shouldn\u2019t. We\u2019re going to talk about how Ash and I are changing our investing analysis strategy for 2023 and what changes you should make. And we\u2019re going to talk about why you should say no more often than you should say yes when it comes to choosing your strategy in real estate investing.<\/p>\n
Ashley:
Tony does a big reveal on today\u2019s episode of how he went on this glamorous $12,000 vacation for, what was it, five days?<\/p>\n
Tony:
Five days, yep.<\/p>\n
Ashley:
For $200. And how you can do it too. I just really wanted to use that punchline, but great real estate information today, but also as real estate investors, how you can take your business and use it personally for some of your own benefit. Tony talks about how he was able to recently do this with his wife and shares his secrets.
Our first question today is from Nicole Roy. Something I really don\u2019t understand is what is the benefit to doing an interest only HELOC to fund another deal? It makes no sense to me to never be paying down the note and then potentially paying a mortgage on primary, plus mortgage on investment property, plus HELOC payments throwing into the gutter. I don\u2019t get it. Am I missing something? She is saying that you have your primary residence, which you have a mortgage on, and then you\u2019re going and getting a HELOC from your primary residence for the additional equity that\u2019s in your property, and then using that HELOC to purchase an investment property. And now I think in her example, she\u2019s saying that she would use the HELOC for the down payment and then it would be, she would go and get a mortgage on the investment property. Now she has the mortgage on her primary, the HELOC interest only payments, and then also she has her investment property mortgage. She is asking as to how can this make sense where you are paying these bills to purchase that investment property?<\/p>\n
Tony:
Yeah, I mean, my thought, and I haven\u2019t pulled the HELOC on my primary residence before, so I\u2019m just kind of speaking from what my thoughts are on how to use this. But I\u2019ve always looked at the HELOC as almost less expensive hard money. You wouldn\u2019t use hard money typically for a long-term buy and hold, that\u2019s not going to be your long-term debt. People are typically using hard money for six to 12, maybe 18 months as they purchase and renovate a property. Then the goal at the end of that time period is to refinance with cheaper long-term debt and then pay off that hard money.
When you think about using your HELOC, I would use it in that same way where you\u2019re going out, you\u2019re maybe buying a distressed property, and then you\u2019re using that HELOC to either fund the down payment or the rehab, and then after whatever time period, 12, 18 months, you go back and you refinance with some long-term fixed debt. I do know some people that have purchased short-term rentals using their HELOC, and they\u2019ll use their HELOC to fund their down payment. But then what they\u2019ll do is because the cash flows and short-term rentals tend to be a little bit bigger, they\u2019ll take all that cash flow from the property and then aggressively pay down their HELOC in 12-18 month period. Same concept, but I typically would only want to see someone using HELOC in a short time period. What are your thoughts on that, Ash?<\/p>\n
Ashley:
Yeah, I agree. I guess in the case of the down payment, using your HELOC for a down payment, I think it\u2019s more common for people to use the HELOC as their full purchase price or maybe just to fund the rehab, as in they found another way to purchase the property and then they\u2019re just using that as the rehab. Then when they go and refinance the property, they\u2019re paying back that HELOC, whether they used it for their mortgage or they used it for the rehab or whatever, or to purchase the property in the beginning. If you are using it as the HELOC, as your down payment and you\u2019re going and getting a mortgage, it\u2019s important to know what your term is going to be if you\u2019re going to refinance. If you know that you are going to refinance the property in a year, then you want to make sure that you\u2019ve added enough value to the property where you are able to go and refinance to pull enough money out to pay back your HELOC and that original funding you got to purchase the property.
If you are just using that HELOC money for a down payment and then you\u2019re getting long-term fixed rate mortgage on it and you have no plans of refinancing, then you need to have a plan to pay back that line of credit and not just paying the interest only payments. Maybe you have a high income but you just haven\u2019t saved your money, but you know that going forward, you could afford to throw $3,000 a month and you can pay off the HELOC in full, in 12 months, 18 months or whatever that is. But instead of waiting 12 or 18 months to purchase an investment property, until you\u2019ve saved that down payment, you\u2019re going in getting the HELOC. The biggest thing is running the numbers and make sure it makes sense having those payments. If you are repaying your HELOC, your whole cash flow, maybe some of your W2 income is even going towards paying off that line of credit.
My old co-host here, Felipe Mejia, he used to go and he used to use lines of credits as down payments on properties and he would just take all the cash flow from all of his properties and throw it at the line of credit until it was paid off, and then he would start taking the cash flow out himself again. Then when he bought another property, do the same thing, take off the line of credit, throw all his cash flow at it until it was paid off, and just keep reusing that same line of credit for down payments on properties.<\/p>\n
Tony:
Yeah, I think we\u2019re on the same page here, is that you really just want to use that HELOC as short term debt and not get into a situation where you\u2019re holding onto this for forever. Before we move on to our next question, Ash, I just want to give a shout out to someone that left us a five star review on Apple Podcast. And it\u2019s actually a kind of lengthy review, but I\u2019ll read it because I think there\u2019s a lot of good information here.
And this review says, \u201cI absolutely love your content. I married into a house hack. Through the years we wandered into a few more rental properties. My husband is in the trades and knows lots of people, so fixing things is easy for him. He took on the maintenance side and placed the management stuff into my lap. I had no idea what I was doing and had a poor attitude towards the rentals. Then I found the Real Estate Rookie podcast, and for the first time in my life, I\u2019m actually excited that we own these properties. I\u2019m grateful for your knowledge and I see these properties as a great tool. I don\u2019t know if we will ever scale larger than the 12 doors that we have, but for the first time, I have clarity and goals. I know what my next steps are. You guys provide the direction that I\u2019ve never had before, and I appreciate the Real Estate Rookie podcast more than words can say, thank you so much.\u201d
Yeah, like I said, a longer review, but what a great one. And we appreciate those kind words and for all of our Rookies that are listening, if you haven\u2019t yet left to say rating and review on whatever platform it is you\u2019re listening to, please do. Because the more reviews we get, the more folks we can help and the more folks we can help, the more stories we get just like this. We appreciate you guys for hanging with us.<\/p>\n
Ashley:
Okay, so our second question today is by Natalie Ann. \u201cHow did you narrow your focus to determine your strategy? I\u2019m all over the place with purchasing a buy and hold duplex and also intrigued by doing a flip and having short-term rentals.\u201d<\/p>\n
Tony:
This is a common question, Ashley, that a lot of Rookies have is like, where do I go? Where do I take my time or spend my time? And for me, it always comes down to a couple of things. I think first is understanding what your goals are as a real estate investor, and then second, really understanding where your strengths and weaknesses lie and what you enjoy doing in the role of real estate investing. If your goal is to quit your day job as fast as humanly possible, then investing in a much of turnkey long-term rentals might be a slower path to getting you there. But doing something like flipping or wholesaling or short-term rentals, that might get you there a little bit faster. I think the first thing is understanding what your goals are and trying to identify which asset class or which type of real estate investing can help get you there the fastest.
Then the second thing to look at is what are you actually good at? Yeah, maybe you love the idea of the cash that you can generate from flipping homes, but maybe you suck at property management and maybe you suck at managing people and that\u2019s okay, right? But if that\u2019s the case, then maybe flipping homes isn\u2019t right for you, or maybe you hate cold calling and talking to strangers and selling people. And if that\u2019s the case, then wholesaling properly isn\u2019t for you. Maybe you hate the idea of talking to the general public and providing customer service, then short-term rentals aren\u2019t for you. Every asset class has a different skillset that is required to be successful. And you have to ask yourself, do I have the skillset, the ability, and the desire to do well in that asset class? I think those are the two things I would look at, Ash.<\/p>\n
Ashley:
Yeah, I\u2019ve really thought about this a lot lately as to getting into your first strategy. The biggest thing is think about why you are getting in real estate investing. And a very common answer is because you want to quit your W2 job. How do you do that? That you need money, you need another income. And I think sometimes people get confused with, \u201cI hate my job, I want to do something I love and I\u2019m passionate about.\u201d And yes, that\u2019s awesome. And trust me, when the money flows in, you\u2019ll start to love real estate. But sometimes that passion or desire, \u201cI want to design houses, I\u2019d love to pick out the furniture and design them for short term rentals\u201d is the reasoning people choose certain options. Or even just like, \u201cWow, it looks like so many people are making way more money with short-term rentals. I\u2019m just going to do that.\u201d
I think look at what your resources are, what your opportunities are, and what you are going to succeed at first and build that strong foundation. When I started investing in real estate, I was working as a property manager for a buy and hold investor. I had some experience in that real estate strategy. I also had resources because I had done financing for this investor. I had acquired properties for him, all of these things. I had that knowledge base. I started building my foundation by collecting buy and hold rentals. And that was what created my cash flow. That is what started building my wealth. And I\u2019ve gotten very good at purchasing buy and hold properties in my market. I consider myself an expert in that. I love cabins with land and taking old cabins and turning them into these cute little cozy, modern spaces. I decided to try this out.
I\u2019ve built my strong foundation and now pivoted to doing these cabins. My first cabin I did, I went $40,000 over budget. And if I would\u2019ve started with that, that would\u2019ve dropped me. I would\u2019ve probably had to sell the project like halfway done. Once you have that strong foundation, then you can pivot and start learning the things you\u2019re actually passionate about and you have more time freedom, more money to make those mistakes as you\u2019re learning how to do things that I had the other investor as a mentor, a resource like somebody to learn on. I wasn\u2019t making as many mistakes because I had all these advantages at my fingertips. I think start looking at what those advantages, opportunities are for you, where you can be the most strategic and successful to build that foundation and use that to determine what your strategy should be.<\/p>\n
Tony:
Yeah, that\u2019s fantastic advice, Ashley. And when I started investing, I told myself, and I guess let me take a step back, right? I\u2019m 32 right now, and throughout my early 20s, I always knew that I wanted to be an entrepreneur and hopefully one day work for myself. But what I struggled with was committing to one thing. And every couple of months really it felt like I was bouncing around from one hair brained idea to the next, and I tried this thing and that thing and this thing and that thing, and I was just searching for that, how I could strike gold. But because I never really committed to one strategy, to one tactic, I never got really good at anything. And I picked up a bunch of random skills in these different places, but I wasn\u2019t a master of anything. When I started investing in real estate, I also told myself like, \u201cHey, I really want to get good at one thing inside of the world of real estate investing.\u201d
For me, it ended up being short term rentals. And that commitment to this one thing is what really allowed me to become a master of my craft. Natalie, and for all of the other Rookies that are listening, my challenge to you is to say, \u201cOkay, whatever path I go down,\u201d commit to that path for at least five years. Say, \u201cI\u2019m going to give the next five years to really just focusing in on this one thing.\u201d If it\u2019s buy and hold, then you try and become the best buy and hold investor over the next five years. If it\u2019s flipping houses, try and become the best house flipper in the next five years, and whatever asset class you choose, become a master of that craft. Then once you\u2019ve really built out all your experience in this one asset class, it becomes so much easier to branch out from there and kind of try different strategies.<\/p>\n
Ashley:
And with that cabin, it honestly would\u2019ve been way more than a $40,000 over budget if I wouldn\u2019t have had the experience and knowledge of already investing so many years and running rehabs for long-term rentals and things like that. And it was very different. And even setting it up as a short-term rental, I had only had one short-term rental prior to that, and it was in an apartment complex. I never had to really worry about half of the stuff that you do when it\u2019s a single family home as a short term rental. \u201cOkay, this property is out in the country, we have to get WiFi, is there even WiFi out here?\u201d Things like that, you don\u2019t think of when you\u2019re just starting out doing some of these things. Natalie actually had a second part to this question was how did you get good at analyzing deals?<\/p>\n
Tony:
I think the first thing, Ashley, and it kind of goes back to what we just said, is that it\u2019s hard to get good at analyzing if you\u2019re all over the place. If you\u2019re trying to flip a house, if you\u2019re trying to wholesale, if you\u2019re trying to [inaudible 00:15:43], if you\u2019re trying to turn key, if you\u2019re trying to STR, if you want to buy an apartment complex, if you want self storage, every single type of real estate investing has a process for analyzing deals. And I think that people often struggle at getting good because they\u2019re not focused on one thing. Just kind of tying it back to what we said initially, it\u2019s just choose that one type of real estate investing and then really focus in on that. Then from there it\u2019s really just repetition. The more reps you get at analyzing properties, the faster it becomes to then analyze those deals.
I tell a lot of the students that I work with is my challenge to them initially is like, \u201cHey, over the next 90 days I want you to analyze 100 properties,\u201d and it sounds like a big task, but here\u2019s what happens. Those first five or 10, it\u2019s going to take you forever because it\u2019s your first time kind of going into the data and trying to understand how to use the different tools to analyze and what makes sense and what doesn\u2019t. But by the time you get to number 15, now you\u2019re moving a little bit faster. By the time you get to 50, you\u2019re going to know exactly what the ADR on a three bedroom is in Joshua Tree because you\u2019ve already done it 49 times. There\u2019s this kind of momentum that starts to build as you analyze deals. And Ash, I\u2019m sure if I asked you, \u201cHey, what does a two-bed rent for in Buffalo, New York?\u201d You probably don\u2019t even have to really think about it and you can just kind of rattle those numbers off. I really do think it\u2019s a matter of repetition and get good at analyzing.<\/p>\n
Ashley:
Yeah, the only thing I would add to that too is along with the repetition is experience. As you are purchasing properties, you realize things that need to be adjusted in your numbers or things you didn\u2019t account for before. One thing I think a lot of people miss is they don\u2019t account for their, if you created an LLC, you don\u2019t account for those LLC fees. You don\u2019t account for your tax return. If you have an LLC, you are paying a separate fee to your CPA or accountant to file that tax return. Those little things can add up.
I pay like per an LLC, it\u2019s increased over the years and I was from, started out in 200 maybe, and now it\u2019s gone up to 350 to 400 per an LLC, which can have one to several properties inside of it. But if you\u2019re buying your first property and you have your LLC and you\u2019re paying $200, that could be one month\u2019s cash flow gone and you\u2019re not accounting for that in your numbers. Those are some of the things I think that I\u2019ve learned over the years, investing as to, \u201cOh, here\u2019s things I didn\u2019t even think of when analyzing a deal.\u201d<\/p>\n
Tony:
And I guess before we get off this last question, I just want to comment on how we\u2019re changing our approach in analyzing deals, especially in the short term rental space. And this is going to kind of vary from market to market, but I\u2019ve been able to see data for a lot of different markets across United States, and what we\u2019re seeing is that the first quarter in a lot of states in a lot of markets is down about 15% year over year when you compare 2023 to 2022. As we\u2019re analyzing deals, now that we\u2019re looking at purchasing, we have to discount whatever that revenue was in 2022 as we analyze for 2023.
We\u2019re still purchasing properties, but the way that we\u2019re analyzing them is we\u2019re adding that discount to make sure we\u2019re not overpaying for things. And I think that\u2019s a good strategy to take. It\u2019s better to be a little bit more conservative as we kind of get into this area of economic uncertainty. And I think the more conservativeness you have in your numbers, the more confident you can be in actually submitting those offers.<\/p>\n
Ashley:
Okay. Our next question is for Montas Risavis. \u201cIs there a limitation of what you can do with the cash you receive from a cash out refinance?\u201d This is a good question because if you go to a bank and you get a mortgage, they are requiring you to use those funds to purchase a property. If you\u2019re getting a car loan and you get those funds, they\u2019re requiring you to use it to buy that car. As far as doing a cash out refinance, when you go and apply with the bank, they will first of all ask you if you have any current debt on the property as collateral. Maybe you own someone money, a private lender who gave you the money to purchase the property and you need to pay them back, or you did a hard money lender or you have another mortgage on the property, maybe there\u2019s a lien on the property for something else.
Maybe you have another HELOC on the property, whatever that is, you are going to have to pay anything that is secured on the property, as the property as collateral, you\u2019re going to have to pay that off with the proceeds from the cash out refinance. Another thing that I\u2019ve seen where the bank will also do is maybe your debt to income is not that great when they\u2019re pre-qualifying you and they say, \u201cOkay, if you use some of the proceeds from this loan above and beyond your current mortgage, and you\u2019re going to pay off this credit card, you\u2019re going to pay off this car loan so that it eliminates that debt payment, then we\u2019ll go ahead and approve this cash out refinance.\u201d Anything the funds are going to be required to be used for would be agreed upon with the bank prior to that. But anything above and beyond that they want you to pay off with the proceeds that is you get a check or it\u2019s direct deposited into your bank account and you can do whatever you want with it. There are no limitations.<\/p>\n
Tony:
And I think the other benefit that a lot of people forget, especially new investors, is that cash you get from a cash out refinance is tax free because it\u2019s not income, it\u2019s debt technically that you\u2019re taking on, so you\u2019re not taxed on whatever those proceeds are. And that\u2019s why you see a lot of really successful real estate investors where they make the majority of their money not even from the cash flow of their properties, but they go out and they buy these commercial properties and they buy them for a couple million, invest another couple million to fix them up, and then they\u2019re able to refinance and pull out millions of dollars all tax free. That\u2019s how you see a lot of the people that are really crushing this space continue to do well without increasing their tax liability.<\/p>\n
Ashley:
The tenants are paying those payments for them.<\/p>\n
Tony:
Totally, right? And it\u2019s a win\/win situation for you as a landlord. Ash, have you cashed out refi\u2019d on any properties recently?<\/p>\n
Ashley:
Yes, I did our little a-frame short term rental.<\/p>\n
Tony:
And just, I guess if we can just talk through what that process looks like for Rookies. Are you able to tap into 100% of that equity? What\u2019s the typical process? Just kind of walk a Rookie investor through what that looks like.<\/p>\n
Ashley:
We did the commercial side of lending because it is in an LLC. We went with a commercial lender, which you can find those at pretty much any bank. We went to the small local lender and we used a hard money loan to purchase the property, and then we used cash to rehab the property. Once we were just about done with the property, we went to the bank and applied for the loan to refinance out of that. We had an appraisal done, we had to pay off the hard money loan first. Of that cash refinance, it was agreed upon that we would take that money to pay off the refinance on the property. As far as paying ourselves back for the cash we put in for the rehab, the bank doesn\u2019t say like, \u201cOh, you have to pay yourself back. That\u2019s a requirement.\u201d
They don\u2019t care about that. You can go ahead and take that money and put it into another property and never pay yourselves back, whatever you want to do with it. We did that cash out refinance, and then we closed next Friday actually on another cash out refinance where we\u2019re doing on the residential side, not the commercial side of lending. And for that property, we did do a credit card, a 0% interest credit card for any of the materials for labor. We did disclose this to the bank and we said, \u201cWe do intend to pay off that credit card when we purchased this property.\u201d We are actually having them just take the funds to pay off that credit card. We already paid off the hard money lender because the hard money loan was due before we would finish our cash out refinance. We will actually be getting a really big check, but it will be just to pay ourselves back for paying off our money lender.<\/p>\n
Tony:
Then typically, Ashley, on the refinances that you\u2019ve done, up to what LTV are they typically willing to go? The house is worth the a hundred thousand dollars. What percentage of that are they willing to give you on the refi?<\/p>\n
Ashley:
So on both, 80%.<\/p>\n
Tony:
That\u2019s pretty good.<\/p>\n
Ashley:
Yeah, I\u2019ve seen it, the one we\u2019re doing next Friday, that\u2019s on the residential side, so pretty common. Then the commercial loan, a lot of times they will only offer 70 to 75% on it, but this was \u2026 I don\u2019t know if it was because the numbers made such good sense that they were willing to go up to the 80% on it.<\/p>\n
Tony:
And that\u2019s again, the benefit of working with a kind of smaller, more local bank is that you get some flexibility that you\u2019re not going to get from some of the big banks out there. Yeah, I\u2019ve only done a couple of true [inaudible 00:25:23] where I\u2019m doing cash out refis and those ones I had to hit about 72, and it was exactly 72 and a half percent is what I had to be at to be able to get cash back out. Every bank\u2019s a little bit different.<\/p>\n
Ashley:
These are actually the first loans, the first refinances I\u2019ve ever done 80% at. Usually I only do, even if it appraises higher, I only do the 70 to 75 just to keep myself not to be over leveraged.<\/p>\n
Tony:
Too leveraged, yeah.<\/p>\n
Ashley:
Yeah. This is the first time I actually felt comfortable going with the 80.<\/p>\n
Tony:
So something else you mentioned was using the 0% interest credit card to help fund some of the rehab. And I just posted on my social a couple days ago that me and Sarah took this amazing, amazing, almost week long vacation in Mexico, and I want to say the trip was probably worth about $12,000 once you add up our flights, the stay, the place that we stayed at. And we literally only spent $200 to go there because everything else was covered with our points. And I\u2019m trying to remember how many, it was like several hundred thousand points that we had, but we run a lot of our flips through our credit cards. We buy materials and stuff as well. We host our events in person. Pretty much all of our events are run through our credit cards. We run ads for our events, just like all the different things we have in our business we run through our credit card as much as we can.
And we get to take some pretty cool vacations a couple times a year. We spent five days in Playa del Carmen at the super, super luxurious resort right there on the beachfront. We got private airport transfer and a Tesla that picked us up and dropped us back off. We got free access to all the parks. Anyway, it was a fantastic trip. For all of the real estate investors that are out there, I think a common thing that people overlook is the ability to use credit card points to help fund your vacations. Like Sarah and I, most of the time when we travel now, we don\u2019t pay for our vacations,<\/p>\n
Ashley:
Honestly, not even if you\u2019re a real estate investor because a lot of the credit cards have the signup bonuses, and there are people out there that are amazing at doing this where they go and open new credit cards, close them out or whatever, and they\u2019re just racking up all of these points because credit cards will have like if you spend $5,000 within the first three months, then we will give you a hundred thousand points to use for travel or whatever.
I actually have done this for probably four or five years now. I started out with doing the signup bonuses and now with doing my rehabs and everything, it definitely helps accumulate the points. But if I fly Southwest for the last four years, I\u2019ve been able to take somebody with me for free. I\u2019ve had their companion pass. It\u2019s bittersweet because if I fly Delta, I have enough points that I\u2019ve accumulated status there from the points from their credit card. it\u2019s like I usually get upgraded to first class, but if somebody comes with me, they fly for free on Southwest, which doesn\u2019t have any upgrades. It\u2019s like, \u201cYes, you get to come with you, this is great, but now we\u2019re flying [inaudible 00:28:36].\u201d<\/p>\n
Tony:
Make them pay for themselves.<\/p>\n
Ashley:
Sorry, five year old, you have to scrape up money for your ticket to come with you.<\/p>\n
Tony:
What\u2019s been your favorite credit card? Which one do you like the most for the points?<\/p>\n
Ashley:
I think the Chase Sapphire.<\/p>\n
Tony:
Yeah, the same one I was going to say.<\/p>\n
Ashley:
Especially if you\u2019re first starting out, do that one because they have the five rule, it\u2019s like some five rule thing where you can only have it\u2019s five credit cards opened by Chase over four years or something. It\u2019s something like that. Or yeah, I don\u2019t know. But they cap you out as to how many credit cards you collect for the points and if you can open the cards in your personal name. If you have businesses, you can open them in your business names, but you can combine all those points for your personal Marriott rewards number or Delta or whatever that is.<\/p>\n
Tony:
And not to go too far off the rails on this, but what I\u2019ve realized too, because we have the Chase Sapphire too, and I have one in my name, Sarah has one in her name, and even though they\u2019re personal cards, we only use them for business stuff as well. Then we have the Chase Business Ink card and you\u2019re able to do all these cool things. But what I\u2019ve noticed is that it\u2019s actually the points at Chase are worth more than the miles that I get with United. I could have a hundred thousand miles and I could have a hundred thousand points and the points with Chase go further than the miles do even if I\u2019m booking on United. Yeah, just anyway, point of this whole conversation is everyone listening, you should be leveraging debt the right way to help you fund the vacation of your dreams.<\/p>\n
Ashley:
If you do have a history of maxing out credit cards, accumulating debt on your credit cards and not paying them monthly, this may not be the strategy for you to try right now to travel hack, but if you have been very diligent and you pay your credit card off every single month, you\u2019ve never accumulated a balance, then you might as well take advantage of these points. The Travel Point guys, it\u2019s like PointsGuys.com I think it is, it\u2019s a big website. There\u2019s a whole bunch of people, I think it\u2019s Aunt.Kara, Aunt Kara or something like that. She talks a lot about travel hacking. Lots of different places you can try to learn about it.<\/p>\n
Tony:
I\u2019m glad you mentioned that because yeah, I don\u2019t want anyone to think that me and as Ashley are just racking up six figures of credit card debt. My assistant goes in and probably pays on our credit card every other day. We very rarely carry an actual balance on our credit cards as well. You want to make sure you have the cash.<\/p>\n
Ashley:
If I didn\u2019t pay it off, usually it\u2019s like a week to every two weeks. First of all, I can\u2019t like stand having high balance, but it would probably, Daryl would be at Lowe\u2019s, it would be like, \u201cSorry, it\u2019s declined. You\u2019ve maxed out at Lowe\u2019s already these last two weeks.\u201d Okay. Let\u2019s go into our next question here. \u201cHow do you go about selecting a real estate agent who is investor friendly? What questions do you ask them?\u201d I think the best way to go is just go online to BiggerPockets.com\/agentfinder, and it\u2019s a matchmaking service for investors and real estate agents.
These real estate agents, you can select them by market, so you at least have to know what market you want to invest in. Then you fill out a form and they will match you with an agent. Then you can call and talk to the agent, see if it\u2019ll be even more of a good fit for you. But I think this will give you a huge advantage that you\u2019re already talking to agents who work directly with investors, maybe even have investing experience instead of starting from scratch vetting agents.<\/p>\n
Tony:
So just one thing to add to that, Ashley, and I think this is a question that you should ask your potential CPA, your attorney, your agents, your insurance broker. The mistake that a lot of new investors make when they\u2019re talking to these businesses is they ask the question, \u201cDo you work with real estate investors?\u201d And of course their answer is going to be, \u201cYes, we work with real estate investors, we love working with real estate investors.\u201d<\/p>\n
Ashley:
\u201cWe work with everyone.\u201d No matter what you would\u2019ve asked them-<\/p>\n
Tony:
Right, the answer\u2019s going to be yes.<\/p>\n
Ashley:
Farmers, they would have said yes.<\/p>\n
Tony:
\u201cWe love farmers.\u201d But I think the better question to ask is, what percentage of your current or past clientele are real estate investors? It\u2019s a similar question, but a little bit more pointed. And now if they\u2019re like, \u201cMaybe like 5%.\u201d Now, you know, okay, cool, that this person, they like working with real estate investors, but they don\u2019t specialize in working with real estate investors. But if they say, \u201cHey, 60%\u201d or 80% or, \u201c95% of my clientele are real estate investors,\u201d that\u2019s how you know that you\u2019ve got a true investor friendly agent as well.<\/p>\n
Ashley:
You guys, thank you so much for submitting questions to us each week. If you want to submit a question, you can send a DM to Tony or I, or you can submit it in the Real Estate Rookie Facebook group. I\u2019m Ashley, @wealthfromrentals, and he\u2019s Tony, @tonyjrobinson on Instagram, and we\u2019ll be back on Wednesday with a guest.<\/p>\n
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