Buying 4 Small Multifamily Rentals in Just 2 Years (While Working a W2)

18:22Derek Brickley:You talked about chiseling away at the floor every three inches or so. Did you have experience in like renovation already? Like were you handy to begin with or was this more of a YouTube university route? And if so, what made you feel that DIY was the best approach for you specifically?

18:41Tony J. Robinson:It was mainly focused on cost at the time as the reason for why I did a lot of it. Now that's not to say there was certain things that I could not and would not do because I'm not handy. I am not that guy. So for me, I knew right away that there was going to be things if they came up plumbing, electrical, I needed somebody who's experienced and wouldn't burn the house down. So yes, there was those certain things, but otherwise anything I could do myself was basically one of those things of, well, it seems to make sense because it's going to save me the money of hiring somebody else, but then you quickly learn how much time that actually takes away from you.

19:24Tony J. Robinson:And that's when I immediately started to realize, okay, I got to figure out what my time is worth too, because at the end of the day, right, you only have so much of it. And it's not scalable to do all of the rehabs and everything yourself. It can be fun, a little frustrating at times, especially as you're trying to learn it all, but you take away those lessons.

19:44Derek Brickley:And I want to get into the systems and the scale, piece because I think that's important for the rookie listeners. But just one last question on the renovations. How much time did you initially plan for the renovations and how much time did it actually take to get through it all?

20:00Tony J. Robinson:Wow. So it was a pretty big jump. I thought initially that again, it was just going to be cosmetic. What can go wrong, right? You're just going to lay down some new floor, maybe put in some new cabinets. What was expected to be maybe four to six weeks turned into about six months of just trying to go through it all. And the other thing too is timing it because, wait, okay, great. I got the floor done. Oh, wait, did we ever call that guy that's supposed to come next? It's like, no, we didn't actually think that far ahead. So it took a lot longer than we initially thought it would. Thankfully, again, as a house hack, right, I had that flexibility where I was able to take a little bit of time to do that.

20:50Tony J. Robinson:I wasn't in a huge rush. I know some people that we help with house acts on our side, right? They do more of like a fix-in or sorry, a live-in flip where they might go in and actually do the construction while they live there. But with what we were doing, that wasn't in my cards.

21:06Ashley Kehr:So where did the plan like start to break down and you have to really systematize faster than expected? What were some of the first systems you put in place that maybe you wish you would have done even before buying the first deal?

21:21Tony J. Robinson:I should have known right away before buying the first deal, what work was going to be done and who was going to do it. And that's the part that I missed. The second part specifically is I just knew a general idea. You look at it when you buy the, you know, you buy your first deal, you're going to get a home inspection most likely to get an idea. and when you go through it, they'll tell you a few things that probably need to be fixed, which is what their job is, that's expected. So you should have an idea even before you buy the property, who's going to do at least those basic things. And if you're going to do a cosmetic rehab, knowing who's going to put the flooring, knowing who's going to do the plumbing.

22:01Tony J. Robinson:Because when you don't know, when you haven't reached out to a contractor or some handyman who can help with some of the little things, you don't know what your time frame is going to be. And so that was the biggest thing that got away from us is just knowing ahead of time and planning that process out.

22:21Derek Brickley:And Derek, I think that's a common challenge that a lot of rookie investors face. And there's a book from Bigger Pockets written by Jay Scott. It's the book on flipping houses. You guys can pick it up at biggerpockets.com slash bookstore. But I remember when I did my very first rehab, I read that book like front to back multiple times to try and figure out, okay, like what am I actually getting myself into? And maybe what are some of those common pitfalls that most rookie investors make that kind of sets them back? and it's a really great book. And Jay Scott's like one of the smartest guys that I know.

22:52Derek Brickley:So again, if you guys want support on that, it's the book on flipping houses. But as you were going through this, Derek, there were obviously a lot of unplanned challenges. And I think that is part of doing your first deal. Like that's the purpose of that first deal is to educate you, to teach you the lessons, to lay the foundation so you can then scale on and up to your next deal and your next deal and your next deal. And I guess I'm just curious, you didn't stop. How many deals have you done in total now?

23:22Tony J. Robinson:I'd say since then. So just to give the listeners context, I bought that first duplex in December of 2023. So now here we are two years later, and there's been three additional deals.

23:36Derek Brickley:Right. So you've continued to transact as a real estate investor. So obviously you continued. So I would assume though that there was a moment when you questioned on that first deal, is this even worth it? Like, like, you know, are Tony and Ashley just like spewing lies in this real estate rookie podcast about what it means to be a real estate investor? What, what pulled you through that moment to allow you to continue on to do number deal or do deal number two and three and four?

24:05Ashley Kehr:And just to be clear, the only time I lie on this podcast is when I tell Tony He looks great in his black shirt. I have every single recording.

24:15Tony J. Robinson:Well, yeah. So the thing that really made it stand out for me is seeing that it was possible and knowing what was on the other end of it. No, that deal wasn't. I still own that property. And it is not a home run. It doesn't cash flow a ton. It basically breaks even at this point. But the lessons that I took away from it, I knew would set me up so that the next one was just even better. And that's what I had fortunately started to see with a lot of the investors that we work with. That's what I started to see with the personal network I started to grow is that we all have our first deal. And everybody does.

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28:13Ashley Kehr:I think my first deal, it cash flowed like$150 a month. And then I had even forgotten to include snow plowing. So it ended up being even less than that. But it still got me started. I bought the second deal within three months after that. And that's such a great lesson. It's like it doesn't have to be a home run. It doesn't have to be the most perfect deal. So Derek, what did this deal permanently change about how you evaluated future opportunities that came your way?

28:46Tony J. Robinson:The biggest thing that that shifted for me was qualifying your tenants. and you guys probably have some horror stories about these, but starting to realize, right, when you buy an investment property, chances are you're going to inherit one or more tenants that are already in the property. Maybe they've been there for a long time and that's great. Good for them, but you got to make sure you're doing your due diligence. And so going forward, making sure that you know exactly who's in your rental property, right? And I say that for a reason, but whoever is in the property, who's on the lease, what does that look like?

29:31Tony J. Robinson:And what are their terms and understanding what your responsibility is to them as well. Because as a real estate investor, right? Our job as a, I should say a long-term real estate investor is to provide housing for these people. It's to make sure that they have a safe place to live, a good place to live. And so sometimes things have to change in order for that to actually happen. And not everybody might be on board with that, but in the end, that was the biggest change that I had to have then and going forward is making sure that, again, you know who's in the property, you know your tenants, and you're actually serving them in the way that you should.

30:16Derek Brickley:Derek, I feel that maybe that lesson is based on an experience that you've had with some tenants. So do you self-manage all of your properties?

30:26Tony J. Robinson:Yes. Well, I was going to say, how much time do we got? Because with that, and to summarize it, I came across this where the tenant that was in that original duplex is still there, but she's a great tenant, always pays on time. She's been on the lease for seven years with the prior owner. And what happened is over time that I had purchased the property and started to own it and operate it, we got a little flexible. and you know i'm trying to think with that specifically because when you are flexible on one thing maybe you know oh okay you have a new cat i didn't know about that that's okay though right a cat can't be a problem until again long story short next thing i know there's three people and nine cats in a two bed one bath duplex and like okay well this is not the best for anybody.

31:31Tony J. Robinson:So staying on top of it, making sure you know what's actually happening in your properties as well. And not just, we all want things to be as passive as possible. We don't want problems. We don't want maintenance, but the routine maintenance, the checkups, the things that you'll do in the middle are what are going to protect you, your asset. And again, make sure that the tenants actually have a great place to live. And it's something that is good for their situation.

32:00Derek Brickley:Ashley, I want to ask you, because you always talk about how you don't like conflict. And there's probably a lot of folks listening who feel the same way. And I think it's even harder, especially as a first-time landlord, to enforce rules on other people. So what have you found to be the best way to make sure that tenants are respecting the lease, respecting the property without all of that like internal dialogue or, you know, internal turmoil over creating conflict with your tenants. And don't say that you may dare, I will do it.

32:38Ashley Kehr:That was definitely going to be one option. You will let somebody else be the person that communicates. And it either goes that he can be the bad guy or he's saying, I'm so sorry. She said that no, whatever. So I don't even have to, you know, save face. But really, one of the best ways is lease enforcement is so like having as much as you can in your lease and just saying like, this is in the lease. We both signed it. We both agreed to it and making the lease the bad guy. So that I think really should be the number one thing. And then the second thing is to have somebody else that's maybe the communicator, the middle person or whatever.

33:27Ashley Kehr:There was a time period where people just thought that I was the property manager and that I was not the owner of the property. So I always blamed stuff on the owner, even though it was me, and they just thought I was the property manager. Um, but over time I just, I, I felt like that was almost like deceitful in a way, but it really did help diffuse situations by not letting people know that I actually own the property. And, um, but yeah, there, there's a couple of different ways, but I think really the best way, uh, is to, you know, enforce the lease and then have that communication and writing emails.

34:07Ashley Kehr:If you have a property management software. Like I use TurboTenant. You can message right through there and have the conversation in writing. Having things in writing has saved me so much. I had a tenant sue me for their security deposit. The judge dismissed it. One of the reasons right away was because I told my VA, I told my contractors, anybody, I said, do not take this person's phone call only in writing. So emails only, text messages only. And because we did that, we had everything in writing, which helped our case and it got dismissed. And so I think that would be another big thing too. And it gives you time to think.

34:51Ashley Kehr:Definitely when I was very early on being a property manager, like I can think back to sometimes where I was immature. I was not professional. I was reacting with a hot head and frustrated and just like, how can they even be asking this? Like, this is ridiculous. And, you know, thinking those things. And I think also having it in writing, it gives you a second to, you know, think about what's the appropriate way to respond to this. And like, I, like for my, a PMS system for short-term rentals is hospitable and they have their AI chat, you know, respond for you. And it's just like, that is the best.

35:33Ashley Kehr:If you can put, throw your response into AI and like have it approved, like, okay, yep. This is how we can make it sound nicer. And you're more customer service. Like that's also a great way to handle conflict too, is to have AI actually write your responses.

35:50Derek Brickley:There you go. Well, there is a masterclass on enforcing the rules of the lease without creating a bunch of conflicts. I appreciate you walking through that, Ash.

35:58Ashley Kehr:I have a book recommendation too. It's by Jay Baer and it's called Hug Your Haters. And it goes through like basically how to kill people with kindness and customer service. And I think that is super great for handling tenants.

36:13Derek Brickley:One additional book recommendation, it's called Crucial Conversations. And there's like a few folks who wrote that book, but if you just Google crucial conversations. It's another book that does an incredible job of giving you frameworks to use when you have to have somewhat difficult conversations. So once Derek realized that real estate investing wasn't a fluke, the question stopped being, can I do this? And became, how fast do I want to? So up next, we're going to talk about how that clarity created a real timeline to get Derek potentially out of his nine to five. All right. So now that the model works, everything else starts to look different.

36:47Derek Brickley:So Derek, how did your decision making change once you knew that this path of real estate investing actually worked?

36:54Tony J. Robinson:So once I started to see the bigger picture, that's when I was able to go ahead and say, what do I need to do to get there? And again, that's the way that my mind thinks. I know I've said that a couple of times already, but it's always thinking about next steps because getting to the end goal can seem like a huge jump. It's like, how do I get from buying my first property to get where you guys are? How does that even happen? It happens one deal at a time. And so just focusing on the next one and the next one and the next one and what I want to get out of it, that was the biggest shift that allowed me to go.

37:34Tony J. Robinson:Working a nine to five didn't get me that. that wasn't something that I saw being scalable, right? Because if you have all of your time tied up, you're in the office and I say that, right? But I mean, working as a lender, yes, I'm still in the real estate industry, but like I needed to not do something that wasn't going to play out that way. Something that wasn't going to help me figure out how to get exactly where I wanted to go. And so being able to actually be in the business allowed me to focus all of my effort and thoughts and energy around what I can do to better myself and allowed me to see a lot of context, too, for what other people are doing.

38:21Tony J. Robinson:And that was one of the things that helped me grow my network.

38:23Derek Brickley:Right now, you're still working your your day job, Derek, but what is your exit timeline look like now? And why does it feel more realistic given what you've accomplished so far as a real estate investor?

38:37Tony J. Robinson:For my time frame, I just look at it as a supplement. Right. This is something that I enjoy to do. And I think that's one of the biggest things a lot of people underestimate is I need to get out of my nine to five as quick as I can or my day job. I got to quit. I can't do this anymore. That's a good goal by all means. But having that there can sometimes actually be the reason that you're allowed to keep buying properties, right? You can have multiple sources of income, multiple income streams that help grow that. And so in terms of to answer the question of an exit timeline, it's like, why would I stop until I get to a point where I can't when I don't have the time to do it but as long as I put the systems and delegate the things that I need to do I'm just living life right like I'm just enjoying what I do and making the most out of it and that's kind of how I get to approach every day at this point is I can look at it as something I get to do rather than something I have to do.

39:43Tony J. Robinson:And that is the goal. That is the end goal. It's not about necessarily, well, I can't wait to leave this place. It's, do I have the flexibility that I want out of life? Can I do the things I want to do? And for a large part, I've been able to already do that, which is insane to me, but I'm very fortunate to do that. But it's taken a lot to get here.

40:10Ashley Kehr:Yeah, it definitely has. And I think that just sharing this opinion you have about quitting your job or keeping it, like maybe if you really do detest your job this much that, you know, building this real estate portfolio can offer you the opportunity to go part-time or to maybe transition to a different job that's more fulfilling, but maybe it's less pay. So I think the really important thing to think about is not only real estate as a tool to quit your job, but also how much faster and efficiently you can build wealth by doing a W-2 job or building a business while simultaneously investing in real estate investing too.

40:57Ashley Kehr:So I think oftentimes and I think back to like, you know, COVID in 2021, where like it was a lot of people I felt like quit their jobs and went full time into real estate because it was a gold mine. Like, you know, properties were appreciating like crazy. You could flip a house and make a ton of money. But how sustainable is that? And I think there's a lot of, you know, you can feel more comfortable and confident in keeping your W-2 job and investing in real estate. And it kind of gives you that balance to have even a bigger safety net. If a deal, you know, something happens with the deal, you have your W-2 income that you can help supplement that.

41:41Ashley Kehr:Something happens with your job, you have your real estate income to supplement that. So I think there's a lot of pros and cons to all sides of it, keeping both or just doing one or the other. So definitely something to think about. But if someone listening, Derek, they want the certainty and not just the hype. What's the first thing that they should actually build out before their first deal? What should they be thinking about? who not how that's the biggest thing is you don't even need to know how you're going to do something

42:16Tony J. Robinson:because again things are going to change things are going to come up things that you didn't expect but if you know who's there to support you who's there to help get you through it who's going to do the different parts of that process that is the thing that'll set you apart as you go through it and give you that certainty of not, it's not, can I do it? It's, can we do it? My network, do I have the network to do it? Can this business and approaching it from the entrepreneurial mindset instead of the maybe DIY mindset of I'm going to do everything myself, that's great. Can you really though, are you the best person to be able to do property management?

42:58Tony J. Robinson:And I say that right as we self-manage but like there's different aspects of the real estate business that it rely on the people who know better than you do because i don't know everything and i'm not going to pretend that i do but i know people who know how to do that so it's like as long as i have that connection building that and starting to work on figuring out who can help you through it what resources you have and can take advantage of, those are the systems that will scale.

43:34Derek Brickley:Well, Derek, I appreciate so much of what you've shared on this podcast, obviously the tactical side, but more so just the mindset around getting started and the importance of that first deal. But looking back, what did that first deal actually buy you that money alone couldn't?

43:53Tony J. Robinson:It bought me the confidence that I could do it, right? Because that house hack was also my first property. So it gave me the confidence that, okay, I can buy a property and work through it. I can manage it. Like, I'll figure it out. And that was the biggest shift is from not having the certainty, being a little scared of like, what's going to happen? How does this work out? What if this doesn't work out? And that confidence shift of being able to go, oh, that worked. I can do that again. I can do that better. I can do this better. It just gave me a leg to stand on.

44:38Ashley Kehr:Well, Derek, thank you so much for joining us today. We really appreciated you taking the time to share your journey and your experience. Can you let everyone know where they can reach out to you and find out more information about your journey?

44:51Tony J. Robinson:Yeah, absolutely. So feel free to reach out to me on any socials. My tag everywhere is LoansByDB. So feel free to connect, DM me. I'm always as responsive as I can be. So if you shoot me a message, I'm sure I'll get back to you as soon as I can.

45:07Ashley Kehr:Thank you guys so much for joining us today on Real Estate Rookie. I'm Ashley and he's Tony. Thanks so much for listening. We'll see you guys on the next episode. At some point, your little real estate side hustle stops feeling little. Rent's coming in. Maybe you've got a couple properties now and suddenly the money part gets real. Your tax bills going up. You're Googling LLC versus S Corp at midnight. And you're just hoping you didn't miss something that'll cost you later. That's where Collective comes in. Collective is the first all-in-one financial solution built exclusively for solopreneurs, saving you time and money.

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46:20Derek Brickley:Hey, rookies, if you're watching this, we want you to apply to be a guest on the Real Estate Rookie Podcast. That's right. Ashley and I are looking for amazing stories just like yours to be a part of our Real Estate Rookie Podcast. Now look, you don't need to be an expert. You don't you've done one deal, your story could help inspire the next listener.

46:39Ashley Kehr:As a rookie investor, especially if you just got your first deal, it is all fresh in your minds and you are the best person to tell your story, give your experience on how you got it done to help someone else get their first deal.

46:51Derek Brickley:So head over to biggerpockets.com slash guest. If you want to be a part of our show again, that's biggerpockets.com slash guest. And we'd love to have you on.