He Started 8 Months Ago. He Already Has 4 Rentals ($6,000 Cash Flow!)

0:00Tony J. Robinson:Hey, everyone. Ashley and Tony here. Happy Labor Day. To celebrate, we are going to share an episode of Bigger Pockets Real Estate with you that we think you will love. We'll be back on Wednesday with a brand new episode on how to maximize the income from your rental properties. But until then, we'll let Henry Washington take it from you.

0:21Hey, everyone. I am Henry Washington here, co-host of the BiggerPockets podcast. And today, we're bringing you an investor story with Joe Crocker from Houston, Texas, who just started investing but is already well on his way to replacing his income with real estate. Let's bring him on. Mr. Joe Crocker, welcome to the show. Hey, thank you. Well, Mr. Joe, why don't we start off and tell us a little bit about your background and what got you into real estate in the first place? Sure. So my background is long. I'm not a young man, but I'll give you the highlights. I have a W-2 job that keeps me on the road a lot.

0:56Due to that, I had to relocate recently into last year. Came down to the Houston, Texas area and started research in real estate. I started studying the Burr method particularly was kind of what I honed in on. And I work with My mom and my wife both helped me out because I'm on the road a lot. And so mom came down. We went and looked at some property, said, hey, let's do it. And so we closed our first transaction in December of last year. Why don't you tell us what traveling a lot means to you? Because I think it's important to your story. Okay. Yeah, it is. So traveling a lot for me, it means I'm on the road about 300 nights a year.

1:35That's wild. And I work six 12-hour days. You work six 12s and you travel 300 days a year? Correct, yeah. There's a lot of people that are listening that want to get into real estate and they think they don't have the time to fit this into their schedule. Well, my mom helps me a lot, so you need a good mother. Yeah, yes, yes. Everybody does it with some sort of help. That is very true. For sure. So you said you moved to Houston and you started researching real estate, but why? What made you look into real estate at all? Why was that even on your mind? So it's been on my mind prior to being in my current career.

2:12I worked in commercial construction. So I've been around real estate a lot throughout my life and have done well on personal properties. And so part of it also is with that lifestyle I just described, I'm getting older. I don't want to do that forever. So I kind of a backup plan, I guess you would say, is trying to plan my exit. and so I had to come here for work and I saw some opportunities and decided to jump in with both feet so to speak. Did you have a goal getting started or did you just want to jump in? Well yes to both of those things. I would look on Zillow and for about two months probably I would go every night and I would just go drive properties that I saw and just check out the area and see what I like and just kind of get familiar and then I think it got to a point where we just went, Hey, you know what?

2:59You got to pull the trigger. And so we made offers on several properties and ended up with actually buying two at the same time. And so, yeah, so we definitely jumped in with both feet. It's one thing to say making offers, but it's another thing to like be making the right offer. So like you have to know how to analyze the deals and what makes a good deal in the first place. So like, was all that like new to you or were you studying and analyzing prior to just making offers? Definitely studying and analyzing prior to making offers. I spent a couple months probably of actually driving every day and looking at things.

3:33I listened to your podcast and some other things, so it was familiar to me, but I really got serious about it. I would say I spent about two months of almost daily looking at properties, doing my own analysis, watching them, the MLS properties, but you could see them. The ones I think are good deals, they all sell right away. Then that makes you go, okay, maybe that was a decent one. And so I spent about two months, I would say, before making offers. Well, why don't you tell us about that first one? How did you find it? And what was the goal of it? The first one was on the MLS. It was a listing that had been up for a long time.

4:10One observation I made is that sometimes when things are listed for a long time, nobody looks at them anymore. The price goes down and the seller gets super motivated. So So this was, I think, kind of one of those situations. And what it was was an estate sale where the guy was mid-flip and passed away. So what was attractive to me about it is, number one, it was two homes. It was a house and an ADU on the same property. So my goal was to hold it as a rental. So what attracted me to it is it was pretty easy. You know, the cabinets were in, but there was no countertops. Needed some trim work. the bathrooms were tiled, but not grouted.

4:50As it turned out, I had to totally rip that all out. But anyhow, it was a fairly light one. And so that was my thought on it was, hey, for the first one, I don't want to go huge. I want to try and go as easy as I can. But anyways, we bought it for$134 ,000. $134 ,000. When did you buy this property? End of December of 25. So this isn't some five-year-old deal. You paid$130 ,000 for a house in Houston, Texas. Yeah, and a guest house. And a guest house. And you found it on the MLS. Correct. There's probably tons of people in Houston right now talking about, I can't find a deal. There's no deals to be found.

5:35There's too many investors here. You can't do anything here. So it can be done is what you're telling me. It definitely can be done. So we've done three this year. About two of them were MLS deals. And I have one that we're closing next week that's also an MLS deal. So they're there. So tell us the rest of the numbers. You paid$134 ,000. How much work did it need, if any? Total budget was about$44 ,000. And I actually came in a little bit under that. So I think we spent about$40 ,000. So you're all in at$175 ,000. And I'm assuming this was a rental because you said you honed in on the BRRRR strategy.

6:08So were you able to refinance this one already? We did. So we refinanced it right at 90 days. I did the refi. It's$161 ,200 is what our new loan was. So that was a successful BRRRR. It's rented for$2 ,350 between the two units. Not a perfect BRRRR, but that's okay. I don't think you need to pull off a perfect BRRRR. It looks like you pulled out about$13 ,000 and you were able to rent this for$2 ,300 on a loan of$161 ,000. That sounds like a pretty decent cash flowing deal that you found on the MLS basically in 2026. So I don't want to hear anybody saying you can't do this or you can't do it in cities that are very investor heavy.

6:50Houston's one of the most investor heavy markets in the country. And you walked in the door, found something sitting on the MLS. I love everything about this. I love how you found it. I love how you took it down. I love that you did everything people say you can't do right now in 2026, all in one deal. Perfect. But you also said you bought two at the same time. So I'm very curious what the second deal in this two deal package looked like. All right, well, get ready for this one. So I said I bought two, but they both had two separate units. The second one had an ADU2? It had two full homes. Oh, wow.

7:24Yeah. So I bid off a lot. Let's put it that way. But that one was an MLS deal too. And I'll tell you that the way that I found that one, and I'll go through the numbers with you, but that one was one that was tenant occupied. So it was like impossible to see. There was no sign in front. It go terribly. I couldn't even hardly get ahold of the realtor. And then the square footage was wrong on the MLS. And the big thing on that one is the tax assessment. I paid$295 for it, and it was tax assessed at$780. So the taxes in Texas are huge. So the taxes were$13 ,000 a year. Yeah, it was crazy. So especially for an investor that's buying rental properties, that kills your cash flow.

8:08See, everybody's like, come to Texas, there's no state tax. But the property tax is crazy. But here's the opportunity there. Since then, I appealed those taxes, and I got them lowered to$5 ,000. whoa yeah it was that was a big cash flow pickup before we get there i gotta know the numbers on this deal okay tell me about it there's two homes so the front home is uh about 1500 square feet it's a three-bedroom two-bath and then the rear home at the time was a two-bedroom one-bath the front home was vacant the rear home was occupied and i paid 295 for the whole package and the the rear house at the time was occupied he was paying 1200 a month for the rear house and the the front house had been rented for 2000 for quite a while and so i was like kind of looking like one percent ish and it seemed to work so we ended up converting the garage in the rear house so that's now a three bedroom nice and then we redid the front house completely it's two blocks from the beach.

9:14So we're going to end up doing it as an Airbnb and doing the short-term rental. You said two bucks from the beach. So I assume this is Galveston. Yeah. Down Galveston. Yep. Man, that sounds like a screaming deal. What kind of condition were these properties in? I mean, people were living in one of them. So I assume that it was okay condition. Well, so it was decent condition. I mean, we ended up spending partly because we're doing a short-term rental. We ended up spending about a hundred fixing it up. We ended up just doing a DSCR loan out of the gate. We just put 20 % down and got no prepay and just paid cash for all the improvements.

9:49So we're in it right now, probably about 395, rough number, and should be somewhere between six and seven. Whoa. So you got somewhere between$100 ,000 and$200 ,000 of equity on a deal you found on the MLS in 2026. That's incredible, man. Congratulations. Congratulations. And so one of them is a short-term rental. You're keeping the back unit as a long-term rental. So I think our plan right now is to short-term rent both of them. I'll tell you my analysis, you asked about that is I wanted to have multiple exits. So number one, could I sell it if things didn't go my way? Can I sell it? Yeah. Two is, can I long-term rent it?

10:28Because the short-term, I mean, you said at work down here in Gousen, 4 ,500 short-term rental permits. It's pretty competitive. So my plan was I'll try to short-term rent it. If that doesn't work, then I'll just put in long-term tenants. And if that doesn't work, I'll sell it. That is a huge tip for anybody that's listening, especially if you're going to do short-term rentals. I don't mind short-term rentals. I have, I think, four short-term rentals, but every single one of my short-term rentals, with the exception of one that I sold recently, could be a long-term rental. And the one that could not be a long-term rental.

11:00I had so much equity in it, I could sell it. Because short-term rentals aren't like it was before, where you could throw furniture in anything, stick it on the market, somebody was going to rent it, it was going to make money. It's not like that now. Most of the people who don't know how to operate short-term rentals have exited the market or are actively exiting the market. So who does that leave in the short-term rental space? Professional operators, people who are very good at this, people who know exactly what their customers need, exactly where their customers wanna be, provide them the exact experience their customers are looking for.

11:33So if you're going to compete with that, you have to be good too. And if you're new, you may not be able to be as good, but you may not find that out until you get to start operating and it doesn't produce the results that you're looking for. And so if it doesn't produce the results that you're looking for, what do you do? Well, if you bought it and the only exit strategy you have is to keep it as a short-term rental, well, you're in a world of hurt. If you can't sell it and make money or break even, and if you can't long-term rent it and make money or break even, then you're going to lose money.

12:07It's just a matter of when and how much. And so I always say, buy with two exit strategies for every deal. If you've got two exits for every deal, you're better protected. It doesn't guarantee you that you won't lose money, but it makes it harder.

12:22Tony J. Robinson:Most deals don't fall apart because of the numbers. They fall apart because of the financing. You find a property that cash flows. The deal makes sense. But then the lender looks at your personal income, your tax returns, your debt to income ratio, and suddenly the deal doesn't qualify. That's the disconnect. Because as investors, we're not buying based on our W-2. We're buying based on the asset. That's why Host Financial offers DSCR loans designed for real estate investors, where qualification is based primarily on the property's income, not your personal finances. So no W-2s, no tax returns, and no DTI requirements.

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14:28Tony J. Robinson:That's why they take time to evaluate each property's unique risks and build coverage design for the realities investors face. Because anyone can sell a policy. NREG focuses on standing behind it. Visit nreig.com slash bplc to learn more. And so you kind of already mentioned that you've already bought a third deal that you are short-term renting. So did you go specifically looking for one that you would do as a short-term rental now that you had found the other two? I'll tell you what happened. I was on Facebook one day in the investor group or whatever. And I see somebody had posted a wholesaler that had posted a condo for sale at this place.

15:13So I was in Michigan at the time. So I call my mom. I go, hey, can you go check out this condo? So she goes over there. She goes, yeah, it's good. So the guy's on the phone with me. He was asking, he started at 99 ,000 and it needed some work. So I said, hey, I'd be a buyer, but not at that number. I can't make it work. There's no way. Cause I treat it like a flip, right? So I'm kind of old school. 70 % minus repairs is the most that I'm going to pay. Dude, me too. I still do that. I still analyze everything as a flip, even if I'm going to keep it as a rental, because I buy it cheaper that way.

15:44Maybe I learned that from you. I don't know, but that's definitely what I do. So as time ticks, he's going, well, what will you do? So I paid$73 ,000 for it. Did you pay cash or did you get a loan? I just paid cash for it. Here you go. Here's$73 ,000. And that was beginning of June, end of May. So since then, I've already rehabbed the whole place, furnished it. It's been rented for 22 days in the month of July we have on the books. Are you going to refi out of this thing? I already did. So we already got all our money back out of that one. And it appraised at$143 ,000. Nice. That was higher than you expected.

16:21Yeah, it was good. So I ended up being in it all in, including furniture and everything, about$90 ,000-ish. And it appraised at$143 ,000. So we ended up refinancing it at 60%. So we got most of our cash back. I think we had 83 ,000 was our loan. So that's good. And the kicker on a condo is that dues are 611 a month. And so you combine that with a couple hundred bucks in taxes and then your electricity, because you're paying for that. Everything else is included, but you pay for electric. And then your debt service, the payment, the payment, you know, principal and interest is about 600. So it's seems like it's going to be pretty good, but time will tell.

16:57Color me impressed, man. three pretty amazing deals in 2026, no less, in Houston, Texas, no less. And now you said, I heard you earlier, you said you had one under contract right now. So I'm assuming that's your fourth deal. So come on, give it to me. Tell me about this one. So the fourth deal, I haven't done the whole thing yet, but we're going to close the next couple of days. So again, two houses, because that seems to be my thing. So it's got a five bedroom house in the front and then a two unit in the back and there is section eight rented. So two of the three units are occupied. So I got under contract at 355.

17:32The front unit currently brings in 2800 a month. And then the rear units are 1400 a piece. Well, it gets better though. So you're bringing in 2800 in the front, $2 ,800 in the back. $5 ,600. $5 ,600 gross rents. And you paid$3 ,50? $3 ,55. My brain can't even hold on to the numbers. So my plan with that one, we paid$3 ,55. We got about$75 in our construction budget. This will bring everything up to nicer finishes. We're going to put in court, even though it's Section 8. It's going to be a nice place for people to live. And then actually the rents, when we do that, we can increase the rents. the Section 8 limits are higher.

18:17So we'll be able to go up to$3 ,300 on the front unit. And then the rear units will go, one of them will be$1 ,730 and the other one will be$2 ,328. So we should be at about$7 ,300 a month cash flow. So for the people listening, first and foremost, if you have a stigma in your head about Section 8, get it out of your head. There are good tenants and bad tenants in every price class. I don't care if it's top tier$3 ,000 a month rent or if it's bottom of the barrel, under$1 ,000 a month rent. There are good tenants and bad tenants everywhere. Our job as investors is to be great at tenant selection, regardless of the class of unit that we have.

18:57And so Section 8 can be very cashflow positive. And not only is it very cashflow positive in some markets, but obviously you get the guaranteed rents or a good chunk of that rent is guaranteed through the government. So in larger cities, places like Houston, typically Section 8 will pay higher than market value rents. In other words, you can get more rent out of a Section 8 rented house than you could if you took that house off Section 8 and just rented it traditionally. And the amount of rent the government is willing to pay per house goes up based on the number of bedrooms. So if you can add bedrooms, you get more rent.

19:37So it sounds like the one you're getting 3300 on that's probably the was it a five bedroom five bedroom yeah that's fantastic so if you're in a larger city and you've already got rentals you may want to call down to the housing authority and see what they pay for rents and see if it's higher than what you're currently getting man i love that so 3300 1730 2328 and what's your debt service on that like What are you paying for mortgage taxes and insurance? So I haven't purchased it yet. So I couldn't even tell you exactly what the payment will be, but probably about four grand a month. I'm going to guess.

20:14I mean, that's probably about right. Somewhere between 38, 42. But you're bringing in after you fix it up. 73. Wow. That's cash flow, folks. That is cash flow. Was this an MLS deal, too? It was. Jeez, man. Jeez. Man, oh, man. Man, I don't even got to do the math to know that that's a screaming deal. Man, that's awesome. And you've done it by using some of your own cash, but pulling it back out. I mean, these are just traditional things that people talk about. But I love hearing how people take these methods that we talk about and they implement them in their business, man. Fantastic deal. Why don't you give us a summary?

20:54How many deals and or units do you have? And what's that putting in your pocket every month? So we have currently five and about to be eight once we get this next one closed. And I think that should cash close at about$6 ,000 a month net after all expenses. I'll take that all day long, my man. That's incredible. And like I said, you were using some of your money, but it looks like you've been able to pull the majority of your cash back out. I would say by the time we finish up this round, I'm going to call it, we should have all of our cash back and probably then some.

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