REI185: 90 Days to Your First Investment w/Ashley Kehr

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26:51That's public.com slash T-I-V-P. Paid for by public investing, full disclosures, and podcast description. Just like everybody else, there was a time when I was a beginner investor, and I have to say, investing is particularly filled with jargon that can just make it so difficult for new investors to understand what is going on. But it's never too late to get smarter about stock investing from the ground up. At The Investors Podcast Network, we've made a habit of studying the world's best investors, and now I'm distilling those learnings into a simple course for you or for anyone in your life who you might want to share the gift of knowledge with.

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28:02And for a limited time, you can use code stocks15 for a 15 % discount at checkout. All right, back to the show. I know you're kind of a productivity person. Do you have any productivity tools that personally, I love getting things done, the David Allen program. I'm not sure if you're familiar with that. But do you have any ideas on how to just stay organized and keep the documentation in order? Yes. We use monday.com. It's like a project management board. So that's how I communicate basically with my assistant is everything is through there so it can be tracked. So if there is a task that I need to be completed, I can forward the email right to her Monday board and she'll get an alert that there is a new assignment.

28:48And then she can update me as to the progress on it and then let me know if it's finished. So instead of me texting her, emailing her, hey, what's the status of this? Or did you finish this? I can just go into the Monday board and look. So it's a great tool for that as to kind of working with others on a project, managing that part. And then also I have somebody who's building me out right now, a new rehab template. We had this one that we kind of put together ourselves And then we hired a consulting firm to kind of take it far and above what our computer skills are capable of to actually manage rehabs and track all of that in there.

29:25Monday.com for project management. And then for property management, we're currently using Appfolio. And I love them. They're more expensive than most other property management software. And there's definitely cheaper options out there. But I do that. Petfolio has all the bells and whistles, things you definitely don't need, but things that make your life a lot easier. So a lot of automation that way. And then for the short-term rentals, we use RemoteLock to set up key codes for everyone before they check in. And then we use Hostfully to kind of manage our channels. And yeah, so that's kind of the big software that we use right now.

30:04And then we use Google Drive just for storage of all of our documents and everything. like that and have a good little organization system in there. I wanted to talk a little bit more. You talked about banking. You mentioned LLCs. Do you think someone needs to have a background in accounting? I know you have a background in accounting. Is that something you would recommend that they learn basic accounting skills? And then I also want to hear your thoughts on using an LLC from that very first deal. Is that something people also need to do? So as far as the bookkeeping and knowing accounting, I think the bookkeeping is one of the easiest things to outsource for someone.

30:42You can go on Upwork or Fiverr and you can hire someone in the Philippines for$6 an hour to do your bookkeeping that has experience doing it for real estate investors. Yeah. So if you start doing syndication deals, things like that, you may need to expand and pay a large company to actually oversee your bookkeeping. But starting out, it's something very easy to outsource. So I don't think that you need to take an accounting class or have a ton of knowledge on it, I think that you should be able to read financial statements. So I do kind of go over some of the financial statements in the book that you should be able to read like a balance sheet and a profit and loss because you still want to be able to understand the health of your company and where it's at.

31:25But if somebody is listening to this and they're in high school and your high school offers an accounting class, 100 % take it. Or if you're in college or you're going to college and you already know you want to be a real estate investor, take an accounting class, take marketing classes, take business classes that are going to help you with real estate. And I definitely think accounting is definitely an advantage that most if you're going to be an entrepreneur, it's going to help you no matter what industry it really is. Yeah, absolutely. And then what are the thoughts on the LLC structure? Yes, for an LLC, if you are doing it with a partner, 100%, I suggest that you do an LLC with a partner or a joint venture agreement.

32:09But I do not recommend that you go and put it in both of your personal names starting out or ever even. And then if you are doing it yourself, the property, and you want to go and get a 30-year fixed rate, lower interest rate mortgage, it's going to be beneficial to keep that property in your personal name. Let's go into partnerships a little bit. Chapter four is about partnerships. And you talk about how there are four items that someone is going to need when they get started in real estate. One is time, money, experience, and then security. And then generally starting out, most people don't have all four of those.

32:46And this is where the importance of partnerships come into play. You talk about five things that someone new can offer to a potential partner. Can you go into some of those five items? Me first starting out, I was afraid. I had fear. I needed that security blanket of a partner. So I took on a partner that had extra cash that had a lot of savings. I also didn't have a ton of money. So I took on that partner to bring the capital to the deal. And my benefit was that I had experience. I had knowledge. I had done a ton of research and I was also working as a property manager. I also had the time, which my partner didn't have the time.

33:24So those were the big elements that I say, the pieces of the puzzle that put our puzzle together to make our partnership work so well. How would you say to somebody that's just getting started, how do they find a partner that aligns with their goals and their values? That can be a tough thing to do. Do you have any tips on that? Yeah, I would start talking to anyone and everyone you know about real estate. I wouldn't ask them if they want to partner with you. I would go up and ask if they know of anyone that's interested in real estate investing. And it takes the pressure, but also gives them the opportunity to say, actually, I would.

34:04I have all this money that I want to get into a deal. I just don't know how. And I think that's a great way. And then just connecting. I've had people in my bootcamp communities that have partnered together just from meeting in the community of the bootcamp, people in the Real Estate Rookie Facebook group on the BiggerPockets forum. There's definitely a vetting process you have to go through. You definitely don't want to just partner with anyone. But I think a great way to do that first partnership, especially if you're meeting online and matching online, is to do a joint venture agreement first.

34:35And it takes away some of the liability of being stuck together as partners in an LLC. Do you recommend partnering for that first deal? Or do you think it's too risky to go out on your own and start it off without any partners? I think if you can start without a partner, if you have everything you need, then yes, definitely go ahead. Go out on your own. I think it would have been a lot longer before I actually started. So if there's something you're missing and you don't have that, go and find a partner to at least take action and get that first deal done. Just because you take on that first partner doesn't mean that they're your partner forever.

35:13And make that clear too. Make that established. We're partnering on this one deal. The next deal, let's talk about it. Let's see what happens. But this isn't guaranteeing that I'm going to be your partner forever. You're not getting married to the person. So for me, I partnered maybe four deals, I think, with my first partner. And then I took on another partner for a deal because he had a different skill set than what my first partner did and something that I needed in this deal. And then I started buying some properties on my own. And you're able to have multiple different partners and all start building your own little portfolio too.

35:49That's a great thing about real estate is it gives you lots of options. You had a really good money-saving tip on how to use a lawyer and do the partnership agreement. Can you talk about that a little bit about what you've done to save money on the fees from a lawyer? Yeah. I usually ask my attorney for the draft that she uses to basically fill in the blank of doing any kind of documents. So for example, operating agreement, a partnership agreement, I have her draft of that and I go in and I fill in the LLC name and I fill in mine and my partner's name. I fill in what percentage we are, addresses, different things like that.

36:30If there's something different about this partnership as far as rules or responsibilities. I go in and change that. And then I send it to her to look it over. And she's like, yep, good. Or maybe she'd wear this differently or change that and then sends it back to me. This saves time and money and legal fees because first of all, I'm not sending it to her, typing out everything I want in it anyways, and then her going through and then me waiting for her to have time to actually do it and then send it back. Then she's not taking a lot of time except just glancing through it, making sure everything's correct and looks good.

37:04It's a lot cheaper. And I'm pretty sure some of the times she doesn't even bill me for doing that either. And if she does, it's$200 or$300. It's not the end of the world, right? Yeah. Let's get into financing. So obviously, the financing is a key part of investing. And it's another area that can trip people up and be a little confusing. What are some common financing strategies that you like for somebody new? Aside from partnering with somebody, are there any things that you really like that you would recommend that people focus on in terms of financing a deal? The biggest thing I think is an advantage is doing seller financing to finance a deal.

37:41When I first got started, I had no idea what this was until I was working with the other investor, where he actually was selling a property where he held some of the purchase of the property as seller financing. So what he did on that transaction was the seller couldn't afford the down payment or the buyer couldn't afford the down payment that the bank wanted. So I don't remember the exact numbers, but I know the seller, the guy I worked for, ended up seller financing$60 ,000. And this was the amount he needed for the down payment. And the bank looked at the numbers and said, okay, you can pay us and you can pay the seller financing and the deal still makes sense.

38:23You're still going to be able to pay your other expenses. You're still going to be able to cash flow. We don't care if you have that second lien on the property. So this was on the commercial side of lending. So this guy bought this property with zero money down. And that was my first eye-opening experience. And then I went and did seller financing for a property where it was 7 % interest only for 12 months. And it gave me time to give do improvements. And then I went and refinanced the property. But I think that with seller financing, it's so negotiable and flexible as to the different ways that you can get the deal done.

38:59I've sat at a table with someone where they were just like, I just want$3 ,500 a month. That's what I need to live on. So I went through and I was like, okay, this amount at 3.5 % amortized over, I think it was like 25 years. That gives you your$3 ,500 a month. And it was like, perfect. 3.5%, super low interest rate. The payment was still low for me, amortized over 25 years. I think just that you're able to negotiate and that there's tons of flexibility. The biggest thing you should do is if you want to do seller financing, is when you ask somebody if they are interested in doing seller financing.

39:36If they say no, obviously, if they say yes, great. Continue the conversation. If they say no, follow up. oh, I didn't know if your CPA or account had talked about the tax advantages of it at all. And that usually just gets a little wheel turning. And most commonly, the response is, well, I guess I could talk to them and see whatever. It's interesting, just that little change that... So talk to us about those tax advantages. What is it that is advantageous to somebody that they would want to consider seller financing? Because a lot of people initially, you ask them that and it's no. If they don't have any experience with it, the answer is going to be no.

40:14But I like that idea of like, well, do you know about the tax advantages? Can you talk about those? Yeah. So that spreads out their taxable income in one year. If you're buying that property for$500 ,000, and even if you're going to the bank getting a mortgage, however, you're paying it to them, they're going to get taxed on that$500 ,000. Unless, of course, it's been their primary residence and they're not paying tax on it because of that, or if they're doing a 1031 exchange or something. But if they're just want to sell it, maybe they're just all done with their real estate and they're going to be taxed on that 500 ,000.

40:50If you do seller financing, they can actually spread out the taxes that are paid on that. So the taxable income in each year that they're paid on that. So having that tax benefit of not having to pay all of those taxes up front and spreading it out over the time period that you're making those payments. So maybe it's amortized over five years and then there's a balloon payment at the end or something like that. But also a really nice thing too is that maybe you're offering to pay them$500 ,000, but you can say to them too is like, I can pay the bank interest or I can pay you interest. So you're going to make that$500 ,000 plus 5 % interest or whatever you offer them.

41:33And I love to print out an amortization schedule that shows like, okay, in year one, I'm only paying down$30 ,000, but you're making$50 ,000 in interest or whatever it may be. and show them that. And then how much... And usually depending on when the balloon is or how long it's amortized, I'll be like, look at it just after five years, you'll have made$100 ,000 more on this property because of doing the seller financing too. Yeah. It's a great strategy. Do you have any other tips for people on how to get their financial house in order to get financing? Read Dave Ramsey's book, The Money Makeover.

42:14I don't necessarily agree with his investing advice, but I think his debt pay down advice is really great and really motivating. That's something you did as well in your own life, correct? Yes. Yeah. Yeah, I did that. I had already started real estate investing. So I used my cash flow to really do the debt snowball as to continuously pay off the personal debt that I had. So go into that a little bit. Talk about the debt snowball, how you can get rid of debt, what he recommends in the book? It's budgeting is a big thing. And I've never, honestly, I've never been good at budgeting just as... I've always just known what's in my bank account and I've never spent above.

42:56So we never had credit card debt or anything like that. It was... We had a line of credit on our house from when we built it that we had to pay off. And then we had our vehicle loans and then we had farm equipment. And it just felt normal that we We're paying these loan payments. And I just, I didn't want that anymore. We just did the debt snowball. We started with the loan that had the highest interest rate and just put as much money as we could towards it every month until it was paid off. Then we went to the next one while continuing to pay the minimums for all the other ones. So we did that.

43:27I think it took us a year and a half and we paid off about$150 ,000, I think it was, in debt that we had. And it was a great feeling afterwards for sure. So I highly recommend that book for anyone that wants to get started. You can get out your whiteboards, your chalkboards, your Excel spreadsheets to keep track of every little payment. I remember I used to sit and look, okay, six months from now, if I keep putting this much towards it every month, how much will be paid off? been. I wanted to hear your thoughts on somebody that does have a partner or married or otherwise that is going to get into real estate investing.

44:04How do you get your partner on board? Because I think that's a really key thing to make sure that your partner's on board with you. Do you have any thoughts on that? I didn't really have any trouble with this at all, but my husband was never involved at all really with the real estate. It was just, you do what you want, that's fine. I think the biggest thing that I've seen just from having guests on the show and talking with other couples that are real estate investors is actually showing them, doing a visual of look at where the money is coming from. This is the money we're making. And just printing out a bare pockets calculator report somewhere and saying, we're going to take this money because showing the visual instead of just saying it to them will make a difference.

44:48as to here's how much money we have in, let's say they have a brokerage account with$100 ,000. They say, okay, here's our statement showing we have$100 ,000 in here. I'm not gonna take this money. I'm gonna leave this money here, but I'm gonna go and get a line of credit and use this brokerage account as collateral. And so I'm gonna take that line of credit and let's say they're gonna give me 30 ,000. I'm gonna use that 30 ,000 to buy the single family house. Here's the listing of the property, okay? here's a couple other properties that have just sold in the area. Look at how much they sold for.

45:23Here is what the rehab needs to be. Here's what it's projected to cost. And I know I can do this and have comments in yourself. But I think doing that visual and really showing the numbers and then saying, okay, even if we go 10 % over budget, we're still going to make this amount of profit. So I think make it as foolproof as possible, but really sitting down with them. taking the time to go over everything. Because I'm definitely a person that things just go through my brain so fast that sometimes it's hard for me to actually stop and slow down and explain it to someone else because I just want to take action and get started on it.

46:01Do you have any other thoughts on financing? I know you've done some interesting things on how to finance your own deals. Can you go into some of the ways that you've used personally? Yeah. So I did the seller financing deal. And then I've also done a subject to deal. So if you guys have heard of Pace Morby, he talks a lot about sub two. We actually purchased a farm doing sub two where the person that owned the farm could no longer afford their mortgage payments. They were behind and they were at the risk of foreclosure. We talked about doing a short sale with them where we would negotiate with the bank and buy the property.

46:37There was also a lot of back taxes on the property too. And the thing with the short sale was if we did a short sale, that the person that owned the farm could no longer live there. And the person wanted to stay living there. And it was my husband's cousin and all this stuff entailed in it. So we actually went through with doing a sub two where this way, we didn't even have to go and get bank financing. We just took over his current mortgage, which since it was his primary residence. It was a USDA loan. It was a low interest rate and amortized over 30 years. And so it was way better terms than we could get.

47:17We went to the bank and said that we're buying this as an investment property. Basically, it had three rentals on it and then it had 100 acres for farmland. We paid the back taxes and we paid the back mortgage payments and interest that was due. And that was less than what our down payment would have been if we would have won and put 20 % down. And then our monthly payments going forward, just paying on his behalf, that is way lower than what the mortgage would have been because of the rate that we would have got as an investment property. And doesn't PACE have a book that just came out that details how to do all of this, The Bigger Pockets is published?

47:57Yeah. It's Wealth Without Cash, I believe it's called. Yeah. Yeah. I think it's still in pre-order, but coming out soon. Yeah. I just got a copy from BiggerPockets with your book as well. So it's kind of cool to take a look at. I wanted to hear too, haven't you used a line of credit that you'll have in place to make some of your purchases and then you'll get permanent financing? Can you go into a little bit about how that works when you do your deals? Sure. I've gotten a commercial line of credit on three of my investment properties. One is a portfolio line of credit where it has two duplexes on it for collateral.

48:34And the other one is a single family house that was actually my old primary residence before we built our own house. And that property had no debt on it. So we went and got the commercial line of credit on the property. So the way I use the line of credit now is to purchase the property and to fund the rehab. I've been playing around with hard money this past year and I used hard money to actually fund the deals. And then for the rehab, I used my line of credits and it helped me be able to scale more and do more deals at once because I was using both of those things simultaneously. But I've also done private money too.

49:13I have a private investor that I do a lot of deals with that he lends me money on. And then the same thing, I usually just use my lines of credit to fund the rehab. And then a couple of times I have done a 0 % credit card where I'll open one up where it's 0 % for 18 months to fund materials for a rehab. Then when I go and refinance, everything is paid off because that's one of the things, one of my whys is I want to be able to sleep at night. So being over leveraged is something that does not let me sleep. I've done the same thing. You really got to keep an eye on when that 18 months or 12 months is up because that's when they whack you with an 18 or 20 % interest rate.

49:56So you got to be careful. But yeah, it's a good strategy if you can use it in the short term. In terms of your hard money loans, what kind of interest rates are you paying on those? So I actually just paid them off. I finished... I did three deals with them and it was actually a great interest rate. It was a line of credit through them. I still had to go. And so it was almost like I was pre-approved up to one and a half million. That's what my line of credit was. And it was at 6.7%. So it wasn't like a HELOC on your primary where I could just pull the money off or whatever. I still had to submit the properties for approval.

50:34And then they would still put a lien on the property while I was doing the rehab on the property before I'd pay off the hard money loan. So 6.7 % was a great rate for a hard money lender, especially now. I see that it's like 9, 10 or even more going. So that was a great rate to get. Do you have an order of your preference on how you would do financing for your deal? What you would try first, second, and third? Do you have any preferences in terms of what you like to do? Yeah. Private money would be my preference just because the people that I do work with are so great and it's so easy. It's literally like that morning, I need a check and afternoon I get the check.

51:16Seller financing would probably be second. My least favorite, and then probably I would say bank finance after that, my least favorite has been hard money. It has been the most difficult as far as like customer service and just issues with the loan. So I've had an awful experience with the hard money lender that I use for that line of credit, such as notifying me that I don't have insurance on the property. Me resending them proof of the insurance that their loan officer actually got for me because I went through the insurance company that he recommended and just all these little things that they need better systems and processes.

51:57Is that a niche that you're interested in? I think I heard maybe in an interview that you might be interested in hard money lending at one point and further down in your career? I think more of a private money lender than a hard money lender. I want to get into a little bit about market analysis. There's a ton of real estate markets, so many different possibilities. And again, that can be hard for a newbie just to figure out where they should focus. I had one guy that I interviewed that focused on just one zip code. And that's all he focused on. I think that's really great advice. What do you recommend in terms of researching a market and sourcing deals?

52:35In the book, go into some of the ideas that you have on figuring out a market that makes sense for you, and then how to source deals. If you already live in a market that makes sense, go and tackle that market. The second thing you should look at is what are the laws though, especially if you're going to be a landlord? Are they tenant-friendly? Are they landlord friendly? Because that can definitely play a key role into the outcome of your cash flow. So I live in New York State where it is more tenant friendly than landlord friendly. And I have somebody right now that's been in the apartment for a year that still keeps going to court.

53:12It keeps getting pushed because of some kind of funding they applied for. And obviously, that has put a big damper on my cash flow for that property of having somebody living there for free for almost a full year. I would look into definitely that if you're doing that. But as far as you have no idea where to start when analyzing a market, look where other people are investing. So look in the BiggerPockets forums, look on Instagram, where are people showing that they're flipping, showing that they're buying rental properties. Also, BiggerPockets puts out a data analytics on market data for different zip codes or even different cities.

53:52Dave Meyer puts that out. And I think you might have to be a pro member to get a piece of it. But there's an article on there that really breaks down what are the best cash flowing cities. So you shouldn't just take any of this without doing your own research and finding your own data because the best city that comes up for cash flow is Detroit. Detroit is also high crime. It's not, there's really no appreciation in some areas of it. That may not be the best investment for you. So maybe going through these lists and compiling and looking like, wow, Columbus, Ohio has good cash flow. It also has good appreciation.

54:30You know, I see that there's job growth. In the book, I include this spreadsheet and you get it as bonus content where it's like, here's all of the factors you should consider. and then almost giving them kind of like a score and like, okay, here's the three properties or the three markets that actually look like they could be feasible for me for rental properties. Because you wanna look at what is the housing price? If you have a down payment and you can only afford$150 ,000 house, you're not gonna wanna be looking in San Francisco or New York City for a property either. Just kind of going down through that list.

55:06So just off the top of my head, a couple of things to start for. Is there somewhere like we talked about in the beginning of this episode? Is there somewhere where you have an advantage? You have a boots on the ground. You have somebody that knows that area already to kind of walk you through the streets. Because I think of one area just right in Buffalo, where if you are above this one street, you don't want to be there. But if you're below it, you want to be there. And there's almost like this little triangle of like, that's the sweet spot. That's where you want to be. That's where everybody wants to live.

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56:39No hard feelings. I'll be waiting for you back here. Just like everybody else, there was a time when I was a beginner investor. And I have to say, investing is particularly filled with jargon that can just make it so difficult for new investors to understand what is going on. But it's never too late to get smarter about stock investing from the ground up. At The Investors Podcast Network, we've made a habit of studying the world's best investors. And now I'm distilling those learnings into a simple course for you or for anyone in your life who you might want to share the gift of knowledge with.

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59:01All right, back to the show. What do you think about going outside in tertiary markets? If you live in a, I don't know, San Francisco or I don't know, Minneapolis or New York, what about going out like two or three hours. What are your thoughts on that? Is that something that you would recommend to people? I'm investing... Pretty much all of my investments except for two properties are within an hour outside of Buffalo, some even an hour and a half. So those rural areas, there definitely is cash flow there, just not a ton of appreciation, at least what I'm seeing in my market. I think you got to be a little bit closer to the city to see that really in the suburbs of the city.

59:43That's where we see the most appreciation a little bit north of the city and a little bit south of the city. Now, I can't speak to every market, but I've had great success in investing in the rural areas. Rehabs go so smoothly because enforcement is not like in the cities where it may take... I did a flip out in Seattle and the permit process there, it can take forever just to put a deck on. What do you think about making a purchase remotely? I know my co-host Robert has done several remote purchases, I believe in Texas. What are your thoughts on that? If your investment is several hours, maybe even a plane flight away, what are your thoughts on that?

1:00:25I don't ever drive to any of my properties or go to any of them. I think that if this is your first investment and you're taking your life savings and you're buying this$150 ,000 house or whatever it may be, I think it's worth the plane ticket to go out and look at it for your first time. You definitely don't have to. You can have a real estate agent take a video through. You can have a contractor go through and give you a scope of work of what needs to be done. So it's definitely 100 % feasible to go out and buy in a different market and never ever even see the property. One way that you can do that and find more comfortable is or feel more more comfortable is partnering with somebody who is in that market.

1:01:08That's what I did with my Seattle house was, that was like almost the farthest away that I could from Buffalo to Seattle, the farthest across the country that I could invest. But I partnered with somebody who invested there every day. And so I didn't see the house before we bought it. I flew out there a couple of times just to do YouTube videos in the flip process. But other than that, I think if you have the right people that can help you in that area. So even if you're going to manage it remotely, which you're perfectly capable of doing with so much technology these days, but you still need a handyman, somebody that's going to go and do repairs or at least contacts and vendors to do that for you.

1:01:50You're going to need somebody to probably show the apartment for you when you're leasing it or change the locks out. Yeah, if you can find those key people, then it's definitely worth. And the way to find those key people is referrals, asking in different Facebook groups or the BiggerPockets forums. Kind of on the flip side of that, I interviewed a guy that refused to buy something that was... He would not buy anything that was more than a 30-minute drive away from his own house. So he just wanted to stay concentrated and not have to deal with stuff that was too far away from his own home. In my own case, all of my rentals are a five-minute drive away.

1:02:26So it's convenient. I can check on things really, really quickly. And I think there are benefits to that as well. I think the biggest benefit is that you're staying focused in one area. That's the main thing. And then maybe you pivot and you go to a different market if your stock's working. But instead of like, oh, here's four different areas I want to buy in, it's going to spread you too thin. Yeah. 100%. I agree with that. Let's get into deal analysis. When you're looking at at a property. What are some of the criteria and the metrics that you look at on deciding whether or not to make an offer?

1:03:00The biggest thing is that I'm looking at first the price to rent ratio. And then I literally get out my phone and I estimate what my mortgage payment is going to be. So I think about, okay, what are current rates at? Something I check all the time. And then I'm thinking, okay, I'm probably going to do this on the commercial side. so I'll be able to amortize it over 15, 20 years. I right away do, if I purchase this property at what they're asking price is, is this even going to cover the mortgage payment? So yesterday I saw a for sale by owner, we pulled in, we called on it and the person was like, it's 875 ,000.

1:03:41And so I said, okay, can you let me know what the rents are? And she said, well, I'm sorry, but I don't wanna give you too much information unless you're a serious buyer and are you serious about this? And I said, honestly, I can't give you an answer until I know more information. I said, I can find a lot of information online, but if you could just tell me what the rents are, I can kind of figure out if it would be feasible or not. So the rents ended up being$4.75 for one unit,$4.25 for another unit,$4.75 for the other one. And then the two others were vacant because she couldn't get them rented for what she wanted.

1:04:17So right away, we We almost were laughing like, okay, 875 is definitely not going to work. And it ended up being that it would break even at half a million, this property. So it was way off what her number was, but just going through and running the numbers, doing a soft run on it. So we use monday.com where a lead will come in. And my business partner, Daryl, that's like, he does the lead flow as to like somebody calls from direct mail or whatever that is he puts it into there. And then I go through and I pull the prop stream report. I'm looking at more of the data side of it, whatever we can get online, what are the property taxes, things like that, what information we know.

1:04:59So that way too, if we look at this deal and it ends up being a dead deal, we actually send it to a dead deal line item on our Monday board, but it's always there if it comes back up. So we recently just had a property that we had offered on a year and a half ago and the deal fell through and now the property has come back up to us. And it's like, okay, we have all this information still. We have documented all, we've kept track of it all so that we're able to go back and analyze it. But figuring out just like the numbers on it is the biggest thing. And then as far as your criteria, like really sticking to your criteria and what your kind of goal is, because there are so many shiny objects that are flashy out there that can get you sidetracked.

1:05:47Like there's properties out there. They're like, oh my God, this could be a wedding venue. It's so beautiful. Like we want to hang out here. Like, okay, no, no, you got to reel yourself back in as to what are you focusing on. So right now we're focusing on land with cabins. We're turning these cabins into like super modern, nice inside. We're doing like brand new kitchens. We're putting in tile showers, different things like that, that you wouldn't really see in like your hunter's cabin in the woods. and then turning them into short-term rentals. So along with still building the long-term buy and hold portfolio too.

1:06:23So kind of a mix of strategies you're doing right now. Yeah. So I'd like to keep that strong foundation of the long-term buy and hold. And then we're kind of doing as our passion project, I'd say the cabins with the land to short-term rentals. And then we've been casually seeking a campground too. Nice. So are you buying existing cabins or are you actually building them? I wasn't clear on... Yeah, we're buying existing ones. So like old, dilapidated, you go into the bathroom and you're like, there's only been hunters that have ever stayed here in this bed. And so we just completely gut them basically and remodel them.

1:07:08Let's go into a little more about tools that you use to analyze a deal. You mentioned BiggerPockets has some calculators. Is there... Kind of go into that a little bit, the tools that are available that somebody should be looking at and utilizing when they are running the numbers. Yeah. So BiggerPockets has the BiggerPockets calculator reports. There's pretty much one for every strategy that you're trying to do. And so I think that's a great resource because every line item has a little info box that tells you where to find that information and why you need that information, which I think is so helpful for learning about analyzing deals.

1:07:45And you just want to build that muscle memory. Analyze one, two, three, even five deals a day. Even if you can look at the Zillow listing and see there's no way this would make sense as a rental property, just run the numbers just to practice. Practice pulling the data. The property taxes aren't always going to be accurate on the MLS listing. Find out how to verify it. Usually you can Google your county along with GIS mapping system and you'll be able to pull that data up. You don't know what rents are going to be. So BiggerPockets has a rent estimator tool where you put in the address and they'll show you other properties that have what they have rented for in that same area.

1:08:25So you can get an idea of comparable size. So if yours is a two bed, one bath. If it was listed online, it will sometimes still show the photos. You can get a look at the inside as to how it compares to yours as far as finishes. So those are two really great tools. And then just keeping up on market data are the articles that BiggerPockets puts out on their blogs. So a lot of them are just for pro members. So if you're a pro member, go and look for the pro articles. But it'll just, you know, what's going on in today's market, but also what are real estate strategies and markets you should be looking at right now and different things like that.

1:09:03Yeah. And the pro membership's totally worth it. I mean, there's so many... I mean, you'll save what you spend on the pro membership if you utilize the tools that are available on that. How much is a pro membership these days? I think it's like 300 or something. Okay. Yeah. That's what I thought. Maybe 95 or maybe less than that. Yeah. Yeah. Definitely worth the money. Let's go into a little bit about building a team. You touched on this a little bit earlier, but I wanted to hear about when you are looking at your deals, are you using a realtor? Is that something you do at this point? Or do you just look at them on your own?

1:09:36What other team members are you using when you are doing and running your portfolio? I love going to showings. I love looking at properties. I know it's something that I shouldn't do because it's not the best use of my time. But yesterday, I drove around and looked that for properties, I think it was. That's how I want to spend my day is just get to that point where I'm just driving around looking at properties. But I have a couple of real estate agents that I work with. And it just really depends on what town it's in, what agents send it to me or who's available to do a showing first as to how I choose it.

1:10:15And then sometimes my partners will go and do the showings. Last year was the first time I, besides the flip house, I bought a house sight unseen, sent my business partner. He went with the agent and I didn't even see the property until after we closed. And that was very unusual for me. But it's like finding good partners where you can trust them and you don't have to worry about making sure that you're there. I think I was speaking at a conference or something like that and being able to manage doing different things. What other team members would you recommend that somebody needs to have? I've got so many people that have come on the show, and I'm sure you have as well, that just talks about the importance of their team and they just simply couldn't do what they do without the great people that are around them.

1:11:01What other people do you recommend that people start developing relationships with and making sure that they have a great team in place? Yeah. So definitely a bookkeeper because that can be a big shireen and just something you can easily just let pile up and forget about. And it's very cost effective. As far as property management, that's something that you can easily outsource. There's tons of property management companies. You can just make sure that you really vet them to make sure that they're a good fit for you. But you can also do a lot of automation with property management if you want to do it yourself.

1:11:37And that's where hiring virtual assistants can come into play on Upwork or Fiverr. There's companies that help you recruit. So if you end up doing that, you can get virtual assistants to just do some of the messaging. Property management software is coming out now with call centers where you don't even need somebody to answer the phone for maintenance is that a tenant can just call into the call center. So having not even a team member, but taking advantage of, I guess, I don't even know how to explain it, but a pool of people, almost like a co-op. So everybody that uses property management software, you have the village buy into this call center or whatever that is, but taking advantage of the joint resources that are available too.

1:12:21So like hiring a VA, like if you would have thought 20 years ago, I need an assistant. Like I can't afford the salary of paying somebody full-time to be my assistant, maybe not even part-time at 20 hours. Now you can find somebody as a virtual assistant to just do a meaningless task for you that you don't want to do pay a water bill each month. And that's maybe all they do. But they're doing jobs for 20 other different people. So they don't need that income provided by you. And that's one of the great things about having all this remote work and things being so easy through doing everything virtual now, taking advantage of those virtual team members that you can have.

1:13:02I also do have a consulting firm right now too that's helping me with the Monday boards and also helping me building out my property management company even more. And then in terms of property management software, is there one or two that you would recommend? Yeah. So if you're just getting started, RentReady. If you're a pro member for BiggerPockets too, you get it for free. It's completely included. But I actually use RentReady to teach my landlord bootcamp too. So that's been a really great beneficial for everyone that's in the bootcamp. And then as you continue to grow and scale, you get to 30 to 50 units plus, I recommend Buildium or Epipolio.

1:13:42I've used both of those and highly recommend them. Yeah, I've used Buildium before and also recommend it. Let's talk about making an offer. That first offer that somebody makes, again, a nerve-wracking experience. What kind of ideas, advice do you have for making an offer that will likely be accepted or how can you get the odds in your favor? Any thoughts on that? This is a lot easier if you are direct to seller. So if you don't have two agents in between you, but is listening and finding out their motivation for selling. So why are they selling? If you go to a house showing and you see that maybe the person passed away or it's like a hoarder house or just like there's a ton of stuff left there and it doesn't look like there's somebody that's going to be moving or maybe even if they are moving, but they got all brand new stuff.

1:14:30is we always like to put in, don't worry about whatever you don't want, just leave it and we'll take care of it. And that's always been a little bit of leverage that we've added into our contracts to try to get deals done so that people didn't have to worry about that. We had bought a hoarder house last year. And I think it was, I don't know, maybe$2 ,500, maybe$3 ,000 to have it completely cleared out, everything put into the dumpster and just taken away. And that was well worth it. to get the property at what we put it into. So you just bake that cost into your numbers and make sure that it will work.

1:15:06But it was just a huge, a nice convenience for the family that they didn't have to worry about getting all of that stuff out of the house for the next person to take it over. So I think the biggest thing would be listening to someone and finding out what their motivation for selling is and how you can help them. Maybe it's letting them set the closing date because they want to enjoy their lake house over the 4th of July and don't want to close before that or something like that. Yeah, definitely. However, you can make life easier for them is a wise idea. I had one guy that actually, he would write just a really heartfelt letter to the seller and it really worked.

1:15:44He said, oftentimes they would take his offer even though it was below what other offers were because he took the time to write a really sincere letter. And that was a strategy that I'd never heard of before. And I think I might try out here sometime soon here and see how it goes. So let's go to the next chapter, which is getting once you're under contract. At that point, it can feel like it's time to sit back and relax, but there's still a lot of work to be done to actually get the deal to the closing table. What are some things at this stage of the game that an investor needs to be doing to make sure they get the deal moving forward to ensure that it closes?

1:16:20Yeah. So the first thing is creating an acquisitions checklist and using maybe your attorney and also your real estate agent or your title company if you're not in a state that needs an attorney for closing, but going through and asking them, what are the things that I need to do before I close on the property once it's under contract and create a list so that every single time you just go through this checklist and you don't even have to remember it. So getting insurance in place, getting the utilities put into your name, however you're financing the property, making sure that's all squared up.

1:16:53Are you going to be doing rehab? Get your scope of work in order, start getting bids on the property. Are you listing the property for rent right after? Get your listing ready, things like that. So really just create that checklist of things to do while you're under contract so that the day you close, you can focus on what matters and you're not scrambling afterwards like, oh my gosh, it's closing day tomorrow and I didn't put insurance on the property because that is not a good feeling because I've actually done that before. So don't wait, make your checklist and every time you're closing on a deal, just go through it.

1:17:29Yeah. That acquisition checklist that you've got is great. Thank you. Really. Well, I mean, it's worth the price of the book, honestly. I think just having that alone is a great thing and people should check it out. Let's talk now. You've closed. You're a first time property owner. This actually is a ton of responsibility at this point. Talk to us about some ways that a landlord, a property owner can be a great owner. What are some ideas you have on... A lot of times landlords get a bad rap. What are some ways that you have to recommend that people can just be a great real estate owner? Read the book, Hug Your Haters by Jay Bayer.

1:18:06So this book is focused towards customer service, but it's actually, I think, great for any landlord or property manager to read if you're going to be dealing with tenants. And it's basically kill them with kindness. And it tells you how to handle different feedback that you get. obviously you're most likely going to run into a disgruntled tenant, whether it's something that is your fault or not your fault. You're going to have to find a way to handle that. And I think that it will help you feel better about the situation and them if you handle it the way that Jay talks about in the book as to just consider what they're saying, listen to what they're saying, and then just kill them with kindness and don't argue back with them or whatever it is.

1:18:56And it's not necessarily saying the customer is always right. He definitely doesn't say that in his book. But one of the biggest things that I've learned from doing property management is communicating with your tenant. Keep them updated as to what is happening. So if it is Friday night, something happened in the unit, it's not necessarily an emergency, but it's an inconvenience. And you can't get a plumber to come out, do whatever needs to be done. communicate that to them, just to let them know, like we've contacted the plumber, no one is available to come out until tomorrow morning, you know, maybe even do some kind of gesture, like we'll take a little bit off the rent to, you know, we apologize for the inconvenience.

1:19:39This is something, you know, that we wish we could do sooner, but they're just not available, whatever that is. And I have found that just communicating what is happening and keeping someone in the loop is better than just like, oh, I can't get a plumber there. I'm just going to ignore them until the plumber says that they can come. So that would be a big thing is communication. And then just remember with the repairs and maintenance, there's definitely going to be times where you're going to get frustrated because you're going to think it's the tenant's fault that something happened. And that's why you should have an airtight lease that kind of puts that in writing as to what those situations are so that the tenant will be billed back for those things happening.

1:20:20One of the first things I think of is a clogged toilet. So we started putting into our lease agreements that if, you know, when you move into the property within like 30 days, if there's a clog, we will take care of it. After that, though, if there is a clog, it is most likely from something you put down the drain. It is not from something that's been sitting there from a previous tenant. And it's your responsibility to have the, you know, Every landlord's worst nightmare is having to get that 3 a.m. call that the toilet is clogged. So I think having airtight lease, that really writes out the rules and responsibilities of each of the landlord and tenant so that if you ever have to be the bad guy, you can make the lease a bad guy and refer to the lease and say, you know what?

1:21:06Actually, the lease states that this is your responsibility to fix this since this was your issue. The book you mentioned, Hug Your Haters, is that real estate specific or is that just customer service tips in general? Customer service tips in general. I actually first learned about the book at an Appfolio conference. He was the keynote speaker at that conference. Yeah. I have not heard of that. I'll have to check it out. My challenge is I become friends close to my renters. And that can be challenging when a tough situation comes up, how to handle that. That's one of the things I ended up just getting a property manager for in the end was I just didn't have to...

1:21:47I let him be the bad guy. So I had a hard time dealing with some of those situations once you become... I've got one lady that's rented from me for 30 years almost a place. And she's a little old lady now. And it's just, those are hard situations to deal with when they come up. It's like, I don't want to be the bad guy to her for sure. So having a property manager is definitely something that can take that weight off your shoulders. The last chapter I really enjoyed, it's talking about just keeping the motivation up. Once you've done that first deal, talk to us about some of the ways that in your own case, how do you keep the momentum going?

1:22:23How do you keep the motivation going to continue to build out that portfolio? Honestly, the podcast guests that we have on is what helps me stay motivated and inspired. Having partners too, I think, because it can get lonely working on something yourself. And I think days that I don't feel motivated, I have a partner that's like, come on, let's go do this and get this done and things like that. So I think that definitely helps. So if you feel yourself in that situation, listen to a podcast episode, go into the BiggerPockets forums and answer real estate questions for other people. And just them thanking you or starting a conversation with you, asking more questions will get you hyped up.

1:23:07Also attending an in-person networking event too. Yeah, those are great. And again, I love talking to new real estate investors. I'm trying to sell a place right now. And this guy is very interested in the showing I had yesterday, very interested in it. And it's just fun to talk to somebody about BiggerPockets, talk to them about my podcast, just talking real estate. I find energizing to somebody that, again, is new and hungry and just getting started. It's a great way to stay motivated. And again, your Real Estate Rookie podcast is excellent. And for any first time, somebody first getting started, it's an excellent podcast to listen to, and I highly recommend it.

1:23:44So Ashley, I want to wrap up here. Yeah, this has been a lot of fun. I really appreciate you, your time. The book is excellent. I really want to recommend to our listeners to check it out, to buy it, to implement it, and to take action on it. It just really is a step-by-step blueprint on what you need to do to get your first property and get started. So thank you for that. For our listeners that want to reach out to you, learn more about you, talk to us about some of the ways that they can learn more about you, the book, the podcast, et cetera. Yes, you can find me on Instagram, at Wealth From Rentals.

1:24:18I'm also in the Real Estate Rookies Facebook group. And then in the BiggerPockets forums, I have a profile, just my name, Ashley Care. Then you can find my book in the BiggerPockets bookstore on Amazon or Barnes & Noble. And it's got great reviews, five-star reviews. I hope you do great with it. So I really, again, thank you for your time, Ashley. Thank you. Yeah. Thank you, Patrick. Okay, folks, that's all I had for today's episode. I hope you enjoyed the show, and I'll see you back here real soon. Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by the Investors Podcast Network.

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