Episode 380

House Hacking in New York with Chad Braungart

Today is a special episode as Jack chats with Chad Braungart. We discuss her he got into Real Estate Investing, how he has been focusing on House Hacking, what he's learned in the process, and his future plans.

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"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - Jack

Transcript
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Welcome to the REI Mastermind Network where host Jack Hoss gathers amazing stories from leaders in real estate investing.

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In each episode, our guests will tell you what they're doing that works what they've tried that failed, and best of all, you'll learn actionable steps to take your real estate investing.

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To the next level now, here's Jack with another value packed episode.

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We have Chad Braungart with us here today.

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Chad, I appreciate your time.

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This is going to be kind of a treat because you and I connected through Twitter.

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And frankly, there's only one other person besides you who've who's been on the show now because of Twitter and yeah, and he was, he was on recently, actually.

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I'll, I'll have that link in the show notes too, but you probably you probably know him.

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Uh, but it's.

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It's been great.

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You and I were just chatting before I hit record that Twitter has become kind of a great place to connect and ask questions and and do a bunch of things.

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So, it's great to chat with you in person.

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Finally, I know we've been exchanging a lot of Twitter comments.

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Oh yeah, yeah, I have some.

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I have some wacky comments out there.

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So, the previous fellow is Tom Brickman.

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Yeah, if you know Tom.

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Yeah, so yeah, he was on the show recently.

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It was a great conversation.

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Not once.

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Great chat.

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But he's got a lot of stuff going on.

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Yeah, I was.

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In a good mood.

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Yeah, he does.

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He's in Texas and Ohio.

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Yes, he seems to be doing quite a bit.

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Yeah, and then.

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He's the.

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He also still has his, his other business going onto they he's got he.

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He buys stuff at like thrift stores and and whatever and then resells them on eBay.

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These cells are needed.

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So, it's kind of a storefront is a storefront going on so that that was.

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Interesting, but you are in New York, so let's talk a little bit about you.

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Yeah, it's been fun.

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Let's start things off by how did you find your way into real estate investing?

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Well, it was kind of by accidents really.

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Well, I wouldn't say accident, but I was.

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I've been living in this apartment building.

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It was a four unit and we actually lived there for me and my girlfriend for about 3 three years, and there's no laundry in the.

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Facility and we always had every other way you.

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Got to go and do laundry.

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And I kept talking to the landlady.

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I got hey.

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You mind putting laundry hookups in the basement?

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There's already hookups for water and electric.

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And I would drop off 'cause I I'd have to drop off checks to her house 'cause she lived locally, and I drop off my.

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Check and then I'd put.

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Like coupons for.

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You know sales of washer dryers locally.

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Just to you know.

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Drop hints, but it never it never stuck.

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And then finally I was.

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Like you know what?

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Maybe I can buy?

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Buy my own little house and.

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You know, and kind of.

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Get my own laundry and I don't have to worry about this so I.

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Had and I had some.

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Money saved up; I've been since.

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I graduated college I was.

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You know, I had a lot of student loan debt, and I was not very financially savvy.

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What up in college and I kind of had to become an adult really quick.

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And so, I was very frugal with my spending.

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Was able to save up enough to come up with.

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A down payment but.

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Essentially, I literally wrote my bike.

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I was calling around about to local banks.

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I was.

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Like hey, I you know I want to.

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Buy a house I.

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Had no idea how to buy a house.

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Or contact or anything.

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I was just completely close.

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And so, I, she's like.

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OK, I met with the.

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Loan officer there to talk.

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About funding and everything, and a realtor also.

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She goes up.

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I'll bring one of my really good friends and you can talk with.

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Her and blah blah.

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Blah this was in:

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,:

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I literally rode my bike with my with.

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My backpack, I felt like a little.

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Kid, you know I show up to the.

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Bank and so.

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We go into one of the offices and the realtor there.

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Her name is Peggy and.

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I actually still.

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She's a good friend of mine.

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I still work with her to this day.

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We've done a number of projects and stuff, and so we're talking financing, you know, and you know, listening intently and.

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And I was like, yeah, I was.

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Looking at some.

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Of these houses, you know.

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These small little houses:

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I don't know if you know you remember, but it was prime time.

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Every it was a buyer's market, and you couldn't buy a house that you couldn't make money on unlike today.

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Right and.

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So, I had no idea.

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What I was doing, what to get into?

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You know, I you know, I've mechanically inclined, but I've never done anything on a house before, but so the realtor there she goes.

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It's like you you're so you've been saving money and everything she goes.

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Why don't you?

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Would you like the idea?

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Of living for free.

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Sounds like living for free.

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And of course, you know me.

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You know trying to save all.

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My money as much as possible, how, how?

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Does that work and?

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So she goes, well, you live.

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In an apartment, right?

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I go yeah.

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I live in apartment.

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What if you?

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Lived in another apartment and those other people paid.

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You I was like OK what's I?

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You know, I did.

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I was just so skeptical 'cause I was.

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Just so new to this and.

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And but I was.

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Like, alright, let's look at some houses and you know the 1st house I remember looking at one of it was a studio apartment.

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And the guy who was kind of tending to the yard and everything he had toilets in the back with plants in it.

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It was, it was like what is this place, and we go into his apartment, and he has like little dolls, just kind of hanging from the ceiling.

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You know, and just be really dark and black painted.

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Walls and there's no.

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Bed in there.

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He was sleeping on.

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A sleeping bag on the floor and I'm like.

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I don't know.

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If this is for me, I go this is.

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So out of my realm.

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You know, I just gotta take you know, and then she kind of like has like, OK this is this is not a place that for you I.

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I can already tell.

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And we looked at a number of other places.

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You know, met with other, you know the listing agents and we go through and she's.

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She's not your typical you know realtor.

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She she'd be very upfront and blunt and that's why, as my lover, you know she's just very like.

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You know what do you?

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What do you like?

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She tries to find your personality and then she's trying to fit something to you and come, you know, and I remember we were at a wedding, and she called me, and we were driving back from Connecticut and so she calls me, and I end up by answering the phone.

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He's like hey we need to see this house now.

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Or else it's gonna be gone, I was.

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Like oh OK, so go on.

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And like.

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Three hours away and we saw the house at 6:30 and we met there. We walked through all three.

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It's a 3-unit apartment and she goes. You're going to get sellers concession. You can do 3 1/2 percent down. There's FHA and there's no you can get PMI waived after 10 years.

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So, I ended up waiting a day and then I said, alright, I had no idea how to calculate numbers.

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What I

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Needed to do and I was.

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Like, alright, let's do this and.

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We ended up moving in and I became a landlord that day and.

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That we were in the two-bedroom downstairs apartment.

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And then we had a.

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3 bedrooms, 2 Bath and a two-bedroom 1 bath above us and they were existing tenants there for a while and.

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It's I never had any issues.

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Thanks, thankful any issues that weren't manageable, and that's kind of how I stumbled into too real thing.

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When you know the next month rolled around and then they were literally just dropped off checks in.

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The mailbox and.

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Like is this this how it?

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Works I go you.

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Know it seems I go.

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This seems so easy.

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It seems so.

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Good to be true, you know.

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And you know, I started reading up and that's one of the things I wish.

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I did was reading more books and and then.

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I found our local.

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Area to kind of get acquainted with other like-minded people in real state.

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And I kind of kind of took off from.

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There and you know I started.

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Buying more and then I, you know, I believe has hacked a number of different places and we're actually in our current House hack right now.

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It's actually two separate houses, and we're we already have the front house rented out and we're not even finished yet because the market is just there's so much demand for these areas, so and it's.

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It's nice you know you.

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You can practically look.

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For free

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And somebody else kind of takes care of your mortgage, insurance and all that.

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So, it's.

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And the funny.

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Thing about that whole story about us buying that.

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That that triplex was there.

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Was no laundry in the basement.

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There's no laundry into units, so I actually my brother used to be an HV AC technician and so he kind of showed me what I needed to do is like I.

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So, I tapped into like the gas lines, and I was.

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Able to run the gas lines and for the dryers and.

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There's already electric for the foot down there, so I was able to just kind of hook it up and.

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That's kind of started.

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Our little journey of you know kind of renovating overtime and getting places up to you know a good standard and then we move out and kind of.

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Do it again.

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You know with Vince and repeat.

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Right?

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Well, that's a.

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Neat, that's a neat story.

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I mean, I, I think you were really lucky to run into a realtor that that took the time to kind of show you kind of guide you through this.

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Yeah, super.

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Yeah, and me, it's uh, she's.

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The one that she always says her mom always says it that she doesn't let grass grow under her feet and so she was always wanted to push.

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And I guess it worked well with my personality then.

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I needed a.

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Little push from somebody else and and you know, now we're you know we have managing 20 units right now.

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Well, it'll be 20 months once they.

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Move in, but that's you, know, 20 units, and it's been quite a quite a little whirlwind of you know.

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Some sacrifices that we've had to make.

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You know, spending time on nights and weekends, getting things done, but you know.

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And now you know you, you get to a point where things start building up.

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Then you find that you need to make systems and you need to find the right people, so it becomes more of a uh, people of a people investment to find the right.

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Contractors and cleaners to help you out.

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'cause you know when you first start out, you can do every.

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You have all the.

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Time in the world.

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You can do everything, but it comes a point.

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You have you have to.

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Part ways with your money.

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To get your time back and now I'm in the kind of that aspect of my investment.

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So, whereas as you mentioned earlier, working on you know automating your repair requests and you know I've been jotting down how I'm doing things and how I can improve.

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Improve that, so it's a definitely a learning experience and you know there's a lot of other people on you know.

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Twitter that you know you know.

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Do probably 10 times as much as I.

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Do but you.

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Know I I'm happy with kind of what?

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We've built up and.

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And the you know, I, I could consider myself financially independent so I could put my job today and and be just fine.

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But you know, I.

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I kind of want to build up.

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A little bit bigger nest egg before I.

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You know, make.

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Any of those decisions just yet?

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Yeah no, that's really neat. You know? So how many properties you said you got 21 doors coming up 21 doors? How many? How many? How many?

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Yeah,:

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Buildings is that?

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It's 11 buildings.

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OK, and you've done this over how much how, how much time?

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Yeah, so about less since.

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2000 end of two.

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1011 is when we first started, so it's if I ever just, you know, a couple doors per year so it's not the you know you.

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OK.

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You read about some people who get 100 doors in six months. Now it's kind of been.

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The slow and steady

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And then the past.

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Eight years and just kind of realize that the cash flow.

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Just starts catching up with.

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You like well at night.

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Now I have cash too.

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Redeploy and then you know you know it's.

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Right?

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Compounding is it's.

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It's fascinating.

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You don't.

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You don't realize it until it until.

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It's there and.

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Then you're like, wow, I could walk away from my job right now it's amazing, you know?

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So, it and it builds options for us.

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So, you know, I may not.

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Want to stay?

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Here so it kind of gives us options.

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Maybe we could.

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Move somewhere else.

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So, I've been working on, you know, systems to kind of automate things, and seeing as I know people around here, I can get.

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Contractors to kind of show up kind of automate the whole maintenance request.

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Repairs, turnovers, turnovers is obviously the.

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Hardest one to.

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Kind of.

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Because there's a lot of.

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Checklists that you have to go through and find trustworthy people.

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Uhm, if I were to continue self-managing from afar, I would say, but yeah, it's that's definitely an investment that I do not regret one but.

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So, you know, since you since you've kind of gone came into this in such a unique way, you probably have a very interesting perspective.

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Then like what?

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What are a few of the things that you wished you would have known ahead of time that maybe the real estate investor didn't think of telling you?

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Yeah, so I mean I think BiggerPockets was, uh, in its infancy at the time when I started, and I didn't know anything about it.

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It it's funny, I wish I was.

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I wish.

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I could have found my.

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My original spreadsheet and it involved.

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100% vacancy and 0% vacancy and trying to see whether or not I could afford to pay for that triplex when I bought it and I went through the number.

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The numbers which I thought.

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Were.

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Accurate, until I realized that it said, you know, I was looking at it totally wrong and that that.

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I hardly have any vacancy like maybe a few days just.

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Because somebody wanted to move in on the.

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6th or the OR?

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Or mid-month.

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Which is nice, 'cause it actually allows you to get in there and get either myself or somebody else to come in there and do some repairs and painting and check for you know, making sure everything's up the speed 'cause we had five.

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Turnovers in end of March end of May just reset.

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Really, and handling that all at once made me realize that I need to really improve on my systems.

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And what I do?

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So, you've mentioned a few Times Now that you've been implementing some systems and processes like what some of the automations or a few things are that you've that you've implemented that has made the biggest differences.

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So, I still do my own bookkeeping I use.

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Stessa and that.

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Sure, yeah, the founder of Steps has been on the show.

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Yeah, yeah.

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He's they.

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It's a great platform.

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To kind of combine all of your to pre categorize everything and my CPA.

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Thanks, me, you know I.

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We I can do I.

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Can do my taxes in less than two hours when I show up and he's very grateful for how or he goes.

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He goes, you're the most organized person.

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I mean all I do is take it from stessa.

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And make sure that everything is kind of accurate.

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I asked them to make sure that I've classified them properly.

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And it, you know, the bookkeeping is kind of a small part of what I do.

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The hardest part about bookkeeping is when you have to do a renovation, you know, but usually most of the expenses are going to one property at that time.

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Yeah, it's, but besides that it's finding you know using a platform.

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Is definitely the biggest one and then sticking to processes and checklists, so I'll have checklists that I've created, and I've used a Trello before.

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And I still use those.

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So, I have a template for like a turnover and I have a checklist that I go through and it's like.

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Check the faucets for leaks.

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Check underneath and flush the toilet.

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Make sure it's not running, you know, and then you know lights and all that smoke detectors so.

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When I?

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Have the checklist I don't have to.

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Think about anything I.

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Just go through the list and just.

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Knock them off and I'm done and my you know my next plan is to implement somebody who can go in and with some idea of how to how to do that.

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Or maybe I have to show him how to do it in her and then they can go in and then do these run through these checklists form?

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And that's the one thing that I can do, and then they can go through it.

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Alright, we need to paint this.

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We need to, you know there's a leak here and then and then and then from there it's contacting the contractors to come in and scheduling to do the work. And usually, you know when you're turning over on the 31st.

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And new people are.

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Moving in on the 1st, it's a.

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It can be very hectic.

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Especially when we did 5 turnovers that day.

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The cleaner didn't show up to one of the houses and they were there for five years.

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And it was pretty dirty.

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I mean, a lot of grease in the kitchen and so we ended.

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It was four guys, their recent grads and they moved into the house and then their.

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Their parents helped them clean, clean the house.

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So, I gave a.

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Cleaning credit and everything.

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Else just kind of worked out I stopped over 'cause I actually didn't meet some of them face to face.

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So that's another thing that I've been working on.

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I've done a few.

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Virtual showings, so I have a 360-degree camera so you can do a kind of a virtual walk through. That's something we get applicants who are out of state, and they can't physically be there and.

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It's, you know you could do a.

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Video tour with your phone.

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But it's not the same as having this 360 where they can.

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Kind of, they have little data points where they can stop and then kind of look all the way around.

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Look up look.

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Down, see the flooring and then they can physically.

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See the layouts.

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And I did that with a tripod and.

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It works very well.

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I had a.

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Had a tenant who moved in from Texas in one of my properties.

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And then there's a lock box there.

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He's able to get in on his own time once we receive.

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Payment I never met the guy face to face.

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He was there and he was a in a dental program, and he moved bouts and then he left the key in the box, and you know I show up and the place was so spotless.

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I mean he was super clean, but yes, the first time I've had a renter where I've never physically.

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That before it so.

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So, I'm thinking of ways that, ah, I mean.

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It doesn't always.

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Work that way.

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So being local, it's like, well, I'll just.

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I mean, it's a minute away, so I'll just drive over there so it's not too much of an inconvenience, but having systems like that to remove yourself makes things so much easier and.

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The rent collection thing is definitely one where when I first started it was cash or checks and then Venmo and everything started coming around, and then I realized that Venmo has certain limitations.

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And you know you have to classify your Venmo transactions, and it found out it's much easier to have it all in one place.

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So, all the new tenants when we when I onboard them, they have to pay through.

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You know our one platform that we use and and then I can see it automatically adds a late fee if they're if they're not paying by.

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The 5th.

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And, uh, I mean for the most part, that's it in a nutshell, but it's the stress testing of having a lot of turnovers is what made me realize that I need to improve on things.

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You know you if you can save 5 minutes here, but you do it repeatedly every week.

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That adds up to hours and.

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Days a year so.

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That's kind.

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Of the next plan of what I what I'm trying to do.

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To kind of automate things.

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Yeah, yeah, it sounds like we do a lot of the same things actually.

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You know you.

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You said Trello, I use asana for the exact same thing.

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Asana Yep.

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I've kind of went a little further now too though.

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Is that when I do.

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I have like I have a handy person in in one of my one of the towns and I I'm just invite them to the to the asana tasks so that we assign let's you communicate back and forth too.

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So, on that task.

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So, if she finds some additional problems or whatever, so then it prevents the emails.

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And the text going back.

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And forth we keep the conversation to that it it's really, it's really kind of improved that part of the.

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Mutual study.

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Process and like you I have a template.

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Somebody moves out, I just copy and paste.

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It's really beneficial and and it's interesting you bring up the lock box too because I've started resorting to this and and it if anything has come out of the whole lockdowns and and everything.

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Yeah no.

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It was me.

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You know just trying to adapt to a situation of how do you show these apartments now?

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And you can't really be there. So, I did and I've just kept going with it. A lock box on the door I you know, for $30 you can buy a Wyze camera, put that in there so that I can see people coming and going.

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But if somebody wants to see an apartment, I give them the key.

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The locks box code they go check it out.

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Themselves right there.

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Oh, really.

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Convenience so that I don't even have to.

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We don't have to try to schedule a time or arrange anything and then if they like the place, everything is done electronically.

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DocuSign and.

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What have you so it's?

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Yeah, that's yeah, I've just done that to.

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The all the.

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Leases I used to.

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I used to sit down at a local coffee shop and walk through the lease and I'm.

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I'm glad I did that, by the way, because I learned the kind of the foundations of what this lease.

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Was all about.

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And I know some people who've gone through.

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Right?

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Lawyers to get a kind of a boilerplate lease and, and I've I actually took my old land landlady lease and and then I was able to use leases from.

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The closing documents and I kind of merged them all together and then after looking at numerous leases you kind of see all the.

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Ooh, this is a good something good to put.

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In there but.

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The you know the best thing that I learned was the networking was.

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The crucial part of.

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Learning you know that that's one thing.

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That I wish I would have done before I did anything, but I'm glad I actually jumped in first and then you know, looking back and I go, I could have done it.

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You know getting the cart before the horse?

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But you know, having the.

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Property actually forced me to, you know.

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To do those things so it's kind of a kind of a lighting, a fire under me to kind of go and do those things instead of just.

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Well, maybe I'll do this and then you never do it.

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You know when you actually have.

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This house now.

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It's like, well, I need to follow up with what's code.

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What's lead-based paint?

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Asbestos with you know all these big.

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Scared molds or all these big?

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Scary things that you read about and.

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You know I'll have people reviewing the lease agreement online and they'll be.

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Like why?

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Do you send this lead-based disclosure with?

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Is there something?

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s like these houses are built:

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So, most of the lead.

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In these older houses.

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This is in the trim around the windows and the old wooden windows themselves and then usually you build the walls, so you don't.

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You're encapsulating that so, but we have to present that information that we don't have any documentation from, like closing documents that we received when we bought the property of any lead based.

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Fazers is just warning them that hey, you know we don't know if there's any, but we have painted everything all the windows have been replaced.

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And then when you take care of that, you usually don't have any issues with.

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Rochester is actually one of the places where they started.

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This whole third-party lead testing for our certificate of occupancies and they would come in if they see any lead based like peeling paint.

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Whether it's been rehabbed or not, you have to do a third-party testing and the testing strength.

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And I don't.

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Know if you've ever been through it before, so I took.

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I took a class on renovating it for to reduce lead-based hazards and you know, wearing your Tyvek suit and all that stuff.

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And the amount.

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Of lead it takes to fail a lead test.

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It could be if you.

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Have a dog and the dogs running around inside.

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There's enough lead in the dirt that it can.

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You could fail a lead test, so from talking with a lot of property managers and landlords they literally go.

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And they.

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Have the property cleaned professionally by somebody before they.

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Do the lead tests.

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They use baby wipes and wipe.

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All the windows down all the trim.

::

The you know, swift of the floors like a day before you know, even like right before the third-party blood tests and they go there.

::

and:

::

And then it confirms that, OK, there's no lead in the house.

::

And then you're then you're good to.

::

So, so as long as you.

::

Long as you remove the sort, the main source, which is typically the windows, you're it's pretty easy to pass and you know, make sure you don't have any peeling paint.

::

So do you.

::

Do you typically avoid those older houses now, or is

::

That something you'll still consider.

::

Now most of the houses here are my last house that we renovated last year was actually 170 years old. Yeah, it was a one-bedroom house, it's.

::

Less than 800 square feet? Uh, so it's a.

::

It's a small.

::

House so we had to, you know we did.

::

We did the, you know, the whole House and I have a bunch of photos that I've posted of the refinishing the floors.

::

The bathroom because and they also smoked the last people that lived there, smoked in there, for God knows.

::

Well, I'm probably like 40 years because I think we worked 4th or 5th owners.

::

And I don't know.

::

If you've ever had to rehab a house that somebody's been smoking in, but this is probably yeah, we you know we use the shellac-based primer sealer.

::

You gotta do 2 coats and get the Bunny suit in the in the mask and everything.

::

My girlfriend.

::

She's an insurance agent she loves to help me out and she's.

::

There to help me.

::

With all the design aspects of it.

::

And I'm there.

::

You know to.

::

Kind of do a lot.

::

Of the you know the grunt work, but lately I've been doing a hybrid approach to renovating.

::

'cause I enjoy.

::

It, but I only work on the things that I want to work on, so it's kitchens.

::

I usually hire out most of the bathrooms and then I do windows and flooring and then.

::

I kind of leave.

::

Kind of all the other things to the professionals and you know, electric, plumbing, those things where I could get myself into trouble.

::

I let those people handle those things.

::

And then I can focus on making sure that I'm doing things properly.

::

And you know, you get to buy some nice tools and work on it.

::

And you know our latest one.

::

It's literally right in our front house.

::

So, it's you know you can work on it in the evenings and it's fun, you know, like then you could post a bunch of photos and it's it.

::

It becomes a.

::

A hobby, it's an it's a business.

::

But you know you, it's definitely something that we enjoy doing, you know?

::

So, it's A and then you talk, you know?

::

How do you?

::

Know somebody who's a real?

::

Estate investor you know they can't stop talking about real state, you know.

::

Right, right?

::

So, it's definitely been a been a fun experience.

::

Yeah, he also knows somebody who does a lot of rehabs because if you go visit them nothing has been done in their own house and everything.

::

Everything is done in the.

::

Yeah, yeah, there's a there's a few.

::

Things I gotta do.

::

There's some.

::

Some patches in the ceiling in this this office you all gotta take care but.

::

I put it in a different window in my house and and I still need to sheetrock some of the area and trim it out.

::

And that's been sitting there like that for I bet she's closing in.

::

On a year.

::

So, but so, so you've been figuring this out as you go.

::

Has there been any big mistakes you've made that you've identified and?

::

What did you learn from it?

::

Yeah, I think.

::

The my biggest mistake was so we started getting into rehabs.

::

Probably like 5.

::

Five years ago, and I think my biggest regret is not keeping the properties.

::

Yeah, we you know.

::

We would have these meetups at one.

::

Of the local bars.

::

And we made friends with the bartender and real estate meetups.

::

And you know.

::

We're all talking about real estate.

::

Over a week she was always asking me these.

::

Random questions, hey, how do?

::

You get financing, how do?

::

I listen that you know her.

::

Her son living in.

::

Her house that she doesn't live in anymore and then come to find out she.

::

She's like hey mind if I call.

::

You if I got.

::

A question yeah, sure, I give her my.

::

Number probably a couple months goes by.

::

And she calls me up.

::

She's like, hey, I.

::

I know you from.

::

You know, although the monthly.

::

Meetups that you guys there I was.

::

Wondering if you would want to buy.

::

My house and then.

::

It turns out that she was in.

::

Pre foreclosure and we.

::

Had to go through the banks to buy the remaining what she owed on the property.

::

Her son wasn't paying the mortgage.

::

When she was giving him the money and you know that kind of led to one thing and.

::

That that was our that was.

::

Our first flip and looking back I.

::

Go, that would have been a great rental and then.

::

The next you know, few that that we did, and I looked back.

::

I should have kept them instead of selling in paying the capital gains and then second is probably not taking on too much at once, because like there's, there's been years where you buy like a few properties and then all sudden trying to get things up to speed new tenants.

::

Orientation, that sort of thing.

::

And when I didn't have systems in place, I was you.

::

Know you kind of.

::

You have to burn through it you.

::

Know you try.

::

To figure it out, instead of you have something written down for this situation, and then you make a checklist on how to handle it.

::

You know, or a float.

::

Start and then you can map it out and then you know.

::

So alright, we have a leaky plumbing situation and then right instead of just going in straight calling the plumber we try to do some troubleshooting with the tenant.

::

Sometimes it's difficult 'cause certain tenants are not.

::

You know, as savvy and technical savvy, they may not know.

::

But others they you know I've had some where they actually fixed.

::

The plumbing was in the basement was flooding, and it turns out there was a tennis ball on one of the J traps in the basement.

::

They were able to pull it out and you know, kind of.

::

'cause we had a.

::

Just a heavy.

::

Rainfall and he sends me this message and then all sudden 30 minutes later.

::

Hey, we found the tennis ball.

::

You know there is it.

::

Was in one of the Drake.

::

Traps and was plugging.

::

Everything up, but yeah, definitely taking.

::

On too much and just having a baseline of education for knowing the numbers.

::

How to actually look at rental property to know that it will make money.

::

That's and you know one of the things that I.

::

You know, I've gotten much better at OB.

::

Obviously, and and then you know I made a spreadsheet where it tracks the tax rates so I can put in an assessed value or purchase price, and you know, readjust the taxes and I can prorate the insurance and everything so I know you know pretty much exactly what the what the expenses are going to be, and then when you go see it you can.

::

Right?

::

Kind of get an idea how old are things so you can jot down, you know, the age of everything and the life the remaining lifespan to give you an idea of how much you should set aside for capital improvements.

::

So, being, uh, so I'm.

::

I'm actually a in a mechanical engineer, so I'm kind of a I look at spreadsheets every day, so it's kind of something that I've been getting pretty good at.

::

So, you know you can you know what where's the house?

::

What's you know?

::

What do they want to sell it for sort of thing and then kind of figure out what the taxes are?

::

Straight from the assessed value of where we are.

::

And you know, boom, I know.

::

The tax I don't have to look up.

::

These taxes or anything and then.

::

I can get in a.

::

Ballpark for insurance.

::

Really quick and.

::

And then we can go and check out the property and I think I think one more thing that I wish I.

::

Would have learned.

::

Is buying in the right locations?

::

You know everybody there out location, location, location and.

::

I had one property, and it was.

::

I bought.

::

I mean I made money on it.

::

The tenants.

::

Were great, but it was such a.

::

Hassle 'cause it was like every day they're calling me or texting me. Hey, something's not wrong and it was there.

::

They weren't very responsible individuals and the place where.

::

It was is not in a safe area.

::

So, there was shootings all the time, you know, right?

::

Right near them and like, and they were on cash paying tenants they didn't.

::

I don't think they had bank accounts, so they went to the check cashing places and you'd have to stay on them too.

::

'cause they would pay monthly, right?

::

But I had to get them on a biweekly whenever they get their paycheck.

::

I would come by and collect rent and it was.

::

It was just so much time I'd stop there every day and then they want to chat about the faucets.

::

Excuse me, the faucets not working and then you go and play with the faucet and it's like look I don't know what's wrong with it and it's there's nothing wrong.

::

With it

::

I said, well, it wasn't working when I was.

::

You know so and and then.

::

There's always the you.

::

Know they have a lot of excuses.

::

Trying to formulate a plan to get them back on and caught.

::

Up with rent is.

::

Can be challenging, I've succeeded.

::

With it in the.

::

Past sitting down with them and going through their.

::

You know what?

::

What are they spending?

::

What, what's your budget?

::

And I was able to get one lady she was George had.

::

A dentist office.

::

But she was awful with her money and always paying leads and turns out that she was paying $330 a month for her cell phone bill, and I go. What you're spending that much money on?

::

Your cell phone.

::

So, I go here.

::

I got a I got a great plan.

::

Go down to another.

::

Cheaper a cell phone plan.

::

You didn't get a different cell phone provider and get one that's like 50 bucks a month and then and then set aside 200 of that 3:30 and then you can pay me on the back rent and then she was able to catch up.

::

In a year, you know.

::

And then, but you know.

::

Things don't always work out.

::

And she there was some safety issues I had like we had to.

::

And then she.

::

Kind of fell off the wagon.

::

It's sort of.

::

I don't know.

::

I don't know exactly what happened, but she you know, you know we had to go.

::

Through eviction and all that.

::

But also, there's some safety hazards they weren't letting me know about the some of the stairs were collapsing.

::

And and stairs are collapsing, so I.

::

Had the handyman come.

::

Over and he's like he's like I don't know how.

::

They're getting upstairs like.

::

This is this is.

::

Not safe, so I told him I said well.

::

We gotta, we gotta fix this and.

::

Then they wouldn't let us in, so.

::

It became that issue and so definitely buying in the right location and having you know quality tenants is, you know critical to you know keep staying sane in this business.

::

I would say.

::

You know, if you're.

::

We're dealing with a lot of challenging areas.

::

I mean, it's.

::

I mean, for me, I'm speaking from my experience.

::

If I if I was doing this full time and they could be a little easier because you have a lot more volume and you have a bit more of the systems in place.

::

I know a lot of the property managers who manage in those locations.

::

It's you know it's a volume place so you're not worrying about the little onesie twosie things.

::

You're just worrying about the core tenant base and making sure that they're paying, and then you're always going to have the delinquent payments, and that that's just part of the part of the business.

::

So, you kind of under right based on that.

::

Yeah, you know it.

::

It's funny you're talking about different areas.

::

A buddy of mine had a had a place in Indianapolis and we were in the in the city once.

::

And we drove over there.

::

And talking about unsafe, there were bullet holes in the in the front window.

::

Jeepers, OK, so well, no.

::

This has been a great conversation.

::

I appreciate you jumping on and and doing this here with me.

::

Yeah, no problem.

::

I want to remind everybody again, find him on Twitter at Landlord Rev and I'll make sure to have that direct link.

::

In the show notes, but.

::

I, I think I might have warned you, Chad, that I got a series of rapid-fire questions you want to tackle him.

::

Let me do sure.

::

OK, so you well with your experience.

::

You know jumping headfirst into this you cannot say rich Dad, poor dad.

::

If you're familiar with Wayne's World, it's like you can't play.

::

Stairway to heaven.

::

In a guitar shop you can't see.

::

Say that book.

::

What book would you recommend somebody start with?

::

Well, for me personally it was actually the 10X.

::

Rule from Grant Cardone.

::

You know he can, kind of.

::

Rub people the wrong way, but for me it was just kind of, you know, don't feel sorry for your situation.

::

You know everybody.

::

You know you may not be.

::

Born with a silver.

::

Spoon by any means you know my parents were never wealthy and you know.

::

I was able.

::

To build up a you know a.

::

A decent amount of wealth.

::

And very thankful for it, but it's, you know, it's hard work and and the only person that's.

::

Really going to be.

::

You know doing it is you have either it's you or you have to find somebody who can help you so it's not working and just doing it.

::

Don't think about it, just do it and.

::

It kind of helped me mentally to kind of change my mindset at that book.

::

So, it's definitely a kind of a, you know, more of a motivational book.

::

I would say than anything, and that's what kind of kept me going.

::

With the with real state.

::

So, you know this might be an interesting one.

::

What real estate investing myth have you heard that you need to?

::

You just feel like you?

::

Gotta debunk it's like.

::

Investing myth of the.

::

The late night

::

Toilet call that somebody's got, uh, plump toilets?

::

I've never had one before.

::

I've talked with one of our.

::

Friend, he's a friend now, but he manages something like 700 units, and he goes.

::

I may have one that I can remember.

::

But there's not many people really using the bathroom, you know 2:00 o'clock.

::

In the morning, so it's.

::

And then.

::

The those late night calls that you're always you know you know you're always fixing something, yeah you might be but if you have the people there it's not a lot of time to send a quick text to a plumber.

::

And then.

::

Had them go out.

::

And you forward.

::

Him the work order and then.

::

You give him.

::

The tenant number and then then they.

::

Schedule it out tonight and then.

::

I'm kind of it becomes more.

::

Of a passive until.

::

I you know I get the pictures and the photo and the confirmation that they.

::

Actually, did the work.

::

And and then I pay them, and you know, rinse and repeat.

::

So, it's a that late night toilet plugging.

::

Yeah, I've never had that.

::

Yeah, one day.

::

Well, I can say that it has happened to me, but it was.

::

Oh, really.

::

It was a drastic experience, and I don't want to scare people off because I think this it ended up being that the sewer line collapsed to the road.

::

Wanna juice?

::

Oh wow, like this.

::

Yeah, and it and it happened like on Thanksgiving.

::

Like it was like I.

::

Terrible, it was like a holiday on the weekend.

::

The sewer pipe collapsed and now there's sewage coming into the basement.

::

Oh boy.

::

It was it was.

::

It was a terrible experience, but I don't want to freak everybody out.

::

Oh, that's rough.

::

But I mean it, it's.

::

It happened that one time it was.

::

Oh yeah, that's rough now.

::

Now, you know?

::

Why they Thanksgiving?

::

They actually call it Brown Thursday.

::

That's what plumbers.

::

Come in at least the ones local.

::

There you go so.

::

It says plumbing gets overworked.

::

Well, what's the best piece of business advice you've ever received?

::

I would say it's just getting started and you're not.

::

You're never going to have all the information; it's just finding enough.

::

Right?

::

Getting comfortable with a certain amount of risk and then moving forward and then managing things as they pop up.

::

Then the nice thing about real estate is even if you.

::

You buy it.

::

The numbers look good on paper you.

::

May have to do.

::

A lot of work up front you.

::

May not make money the first couple years.

::

Years, but over the long haul it will as long as you're not buying in a in a bad location or a depreciating market where the population is gone going down you, you should be.

::

You should be alright, and you know I say sure, but management always comes into play on that.

::

Well, let's go the flip of the coin.

::

What's the worst piece of business advice you've received?

::

Worst piece of advice, it's.

::

Doing everything yourself trying to trying to do everything yourself.

::

And I've talked with some who are big proponents.

::

Why would you pay that guy this much?

::

I can do it for half the price and then it's like, well, I might be spending 4 hours on a weeknight when I can, you know, be spending time.

::

With friends or family so that $200.00 that I could have paid somebody to take care of, and they're proficient at it. They're going.

::

To get it done quick.

::

So, they can get paid.

::

I don't care how long it takes, I'm gonna pay them so it's you know, doing everything yourself.

::

That's when I first started that was kind of my thing is, I'm going to do everything, try to figure everything out.

::

Which I don't I.

::

Don't regret but.

::

Now I look back.

::

I know I should have hired out.

::

More as I was growing.

::

You know, that's one of those things that I still struggle with, and I keep losing sight of it for some stupid reason.

::

Because, you know, I have full intentions of taking care of some of this stuff myself, and then you get a vacant unit.

::

And then I think it's going to take me a weekend.

::

Next thing you know, it's been two months.

::

To get it completely done, and now I've I missed out on the rent for two months instead of just hiring somebody, getting it done, and you know.

::

You know it's.

::

It's kind of silly, really.

::

When you think about it.

::

It is, yeah, it's you don't.

::

Think about it though.

::

At the time it's like, well, I can do this and only take this much, but life kind of gets in the way of things.

::

Yeah, and if you could go back into time and give yourself one piece of advice.

::

What would it be?

::

I can give one piece of advice.

::

If I go back in time.

::

I go buy more I would have I.

::

Would have bought more when I first started.

::

I think that was, uh, I think I would have done.

::

Not, you know, not you.

::

Yeah, I and if people are listening to this, you can probably hear the trend.

::

I that is probably the number one response that I get buy more and hold more.

::

You know, that's what I keep getting so well.

::

Is there a question or concept you wished we would have covered here tonight?

::

I'm not on top my head now.

::

OK, well I really this.

::

I know this was a bit impromptu and I kind of put you on the spot, but this was this was great.

::

Oh yeah.

::

I enjoyed this conversation quite a.

::

Yeah, so again it's landlord Rev and I'll make sure to have that link in the.

::

Show notes, but I.

::

Hope you'll consider coming back sometime and we'll you know we tried to organize a round table here tonight and I still like to try that sometime, so I hope you'll join me for that one of these days.

::

Yeah, that one.

::

Sure, yeah, definitely.

::

Have you learned at least one actionable step to incorporate into your real estate investing?

::

If so, please consider returning some of that value by leaving a positive review, subscribing to our YouTube channel, or joining our growing network on Facebook and Twitter.

::

You can find links to all of our social media accounts in this show notes.

::

See you next time.