The RentalRookie Podcast: Recent Episodes
Emily Du Plessis: Real Estate Investor, Online Entrepreneur, Blogger
Emily Du Plessis from RentalRookie.com shares her journey in going from knowing absolutely nothing about real estate or finance to owning multiple properties with her investing partner and husband, Kirk. Now, she's on a mission to share her experiences with rookies in the real estate investing field to show that anyone can find success if you take the time to educate yourself. While she is no 'guru' in the field, she's just an everyday wife, mom, and teacher who is passionate about helping others start to take control of their financial futures with investing in buy and hold properties.
Yes, that's right. The podcast will be returning to this summer!
I can't tell you how excited I am to be chatting with you each week again as I feel like there is so much we have all learned and experienced over the last year that we can share.
On this quick announcement episode, I share some details about the return of the RentalRookie Podcast and what to expect.
I also invite you to a Virtual Real Estate Investing Summit happening April 22-24, 2021.
It's 100% FREE and is comprised of 18 buy and hold investors who are coming together to teach and share with you what works and what we've learned in our experiences building rental portfolios.
You can expect to learn:
- About creative investing strategies that could yield double-digit returns
- The steps to take to become a full-time real estate investor
- How and where to buy your first rental property
- The build-to-rent and BRRR strategies, two of our favorite investment strategies
- Financing strategies to get unlimited rental property loans
- and more...
If you're interested in grabbing your spot to attend for free go to rentalrookie.com/summit to learn more!
Lines of credit can be a great financial strategy when it comes to financing rental property.
Whether it be a HELOC, secured line of credit or unsecured line of credit it allow you some flexibility to acquire property.
What is an unsecured line of credit?
An unsecured line of credit is a revolving account that allows you to draw and repay based on your need for the money.
What's great about an unsecured LOC is that you don't have to put any personal funds or properties up as collateral for the access to the money.
This is the fundamental difference between a secured and unsecured line. For a secured LOC you must put up property or cash as collateral so that if you can't pay the line back the bank may take your assets.
In this podcast episode we shared how we were able to take our secured line of credit to an unsecured line of credit...
...then we were able to get it increased by 50%.
Tune in to hear the strategy we used to reach this goal.
**Read More: The Ultimate Guide to Financing Rental Property**
Yep....not just a new year...it's a new decade.
And with that comes excitement and inspiration and motivation.
It's like you wake up one morning a totally changed and motivated individual....
because that's what happens.
We go to bed on December 31st every year and wake up a new person the next morning.
Right?
I'm here to tell you that this year.....is your year.
Stop letting your fears get in the way....
Stop letting what other people think about you get in the way...
Sit down and take control of your life and where you want to go.
Be intentional about what you want your like to look like.
Because I can tell you that Kirk and I sat down 8 years ago and sketched out what we wanted our life to look like.
Why?
Because we wanted to be different.
We wanted to live a life not like the average Joe.
We wanted freedom and flexibility and financial stability.
We committed to the family we one day wanted to have.
We committed to it so hard that we started working on that dream and that commitment two years before we even had children.
I can tell you that this ride that we have been on over the last ten years and has been wild and sometimes scary but it has been intentional.
I can look back now 10 years later and say that the things we wanted our life to look like when we were just babies who had just been married...
...they've come true.
You guys.....they've come true!
But it took a level of commitment and courage that few will pursue.
But I can tell you that it's worth it.
So make this year yours.
Take action...dream big and commit to making those dreams become a reality.
Because you're worth it!
We've made it to the end of our 12 days of Christmas and I hope I've inspired and motivated you to kick some butt in 2020.
So to end our 12 day long focus of learning about investing in real estate I'm giving you 4 things to do right now to jumpstart your journey toward buying that first property.
!. Do a financial audit of your finances
Take a look at everything.
- Calculate you total monthly income (include work income, side job incomes, child support, etc.
- Add up your fixed expenses (the expenses that you HAVE to pay each month)
-
What you are currently saving each month
What does your current investment portfolio look like -
Get knowledgable
Get some new books and podcasts to add to your list for the new year.
- The Millionaire Real Estate Investor by Gary Kellar
- The Book on Rental Property Investing by Brandon Turner
- Rich Dad, Poor Dad by Robert Kiyosaki
- How to Rent Vacation Properties by Owner by Christine Karpinski
- Building Wealth One House at a Time by John Schaub
- Real Estate Tax Loopholes & Secrets by Stephen Nelson
-
The Book on Managing Rental Property by Brandon & Heather Turner
-
Determine your why
Think about the following things and spend some time reflecting.
- Do you want the property to provide you with monthly income or gain appreciation for future resale?
- What type of demographic do you wish to rent to? (families, low income, high end, etc)
- What types of properties do you want to invest in? (condos, duplexes, mobile homes, etc)
- Where do you want to invest?
-
What is the financial goal you are working toward with the investment in rental properties?
-
Join an investor's group
RentalRookie Private Facebook Group
National REIA Groups
BiggerPockets
Rental Property Accelerator Challenge
It's the 11th Day of Christmas
Stage fright.
Have you ever felt this?
When you've worked so hard at something (dance, piano, athletic event, choir concert)
you've put your blood, sweat and tears into really mastering the skill so you can perform well.
And you get to the event…..and your slammed with stage fright.
It can totally inhibit your performance.
Fill you with anxiety and fear,
Even when you know you've done the work to get out and do your best.
Some of us can push through and face that stage fright head on …..
…while others can't.
I see this same 'stage fright' happen with newbie real estate investors.
They'll spend months and years learning, reading, listening, mentoring with seasoned real estate investors.
They'll listen to podcasts.
Read book after book.
Buy online courses to learn
Attend events
Find a mentor
Not just that but they'll do the work to learn the market and master running the numbers and know what questions to ask.
And then it happens.
They find a potential deal that checks all of their boxes.
And the stage fright comes barreling in.
In our world we will often refer to it as 'analysis paralysis'
The paralysis of moving forward and actually making the offer sometimes is so strong that it will paralyze newbie investors from ever taking action.
And this kills me.
I see smart, steadfast rookies who are determined to reach their goals stop just footsteps before the finish line.
And it comes down to fear.
Those fears and limiting beliefs pop back up and hold us back.
And what is important to realize is that even when you make the offer and get under contract there is still protection for you.
As a newbie investors making sure that you include the contingencies in the real estate contract are huge for giving you protection and peace of mind.
Home inspections protect you the buyer form anything unforeseen with the structure of the house that could ultimately make the deal bad.
Maybe there's some foundational damage that you didn't notice that would cost a ton.
Maybe some work hasn't been done up to code and would require a heavy investment to fix.
These things that come up with the home inspection that are unforeseen give you the chance to walk from the contract if it would ultimately inhibit the deal and the numbers.
The appraisal contingency is in place to protect you from buying a property that isn't worth the value that you are paying for it.
If you were to get an appraisal and find out that the property isn't valued at what the agreed on sale price is and is lower you have room to renegotiate or walk.
The financing contingency is there to protect you if there's anything that goes wrong in the loan process which would result in you not being able to get the loan you plan to use to buy the property.
But you have to be sure to include these contingencies in your contract.
And as a brand new investor…I would always include these for your own peace of mind and protection.
So don't let the stage fright or analysis paralysis stop you from going after that first property and reaching your financial and lifestyle goals.
We are about to kick off a brand spanking new year.
And if you already own a rental property but have not kept track of your tax deductible items for investing in rentals now's the time to clean that side of the business up.
If you're coming in hot to 2020 ready to buy your first property…then knowing the things you should be keeping track of from the start will make your life 100x more easier when it comes time to do your taxes.
----Tax time of the year can be such a drag for a lot of people.
Although it is a time to financially reflect on your year, it also is a time that can cause a lot of headaches if you haven't stayed organized throughout the year.
Whether you complete your taxes on your own or hire a tax professional to do them, there is always work that you need to do. Yes, more work if you desire to tackle this challenge on your own. But if you hire an accountant to do your taxes you still have to organize and compile all of your documents and tally up business expenses.
The reality is that even if you are a newer investor with one or two properties you had a year of rental activities and whether it feels like a business or not….it is a rental business.
So it's important that, especially during tax time, you treat it as such.
This can be scary for rookie investors, especially if you feel accomplished that you were able to find, buy, and manage your very own rental property.
If you are reading this before you've started investing, great, you will know what things you need to keep track off throughout the course of the year when you finally get a property.
If you already own a property, then hopefully this will reinforce or shed some light on something you hadn't thought of or kept track of before.
What Do You Need To Track…
Below is a list of the documentation and expenses that you will want to keep track off to give to your CPA.
1098- This statement should be supplied by the bank that services your loan and is an overview of the mortgage interest you paid in your mortgage payments throughout the year. In the 2018 tax year you can only deduct
Real Estate Tax Records- This record you must seek out on your own and it can be found on the county website or on your escrow statement.
HOA Dues/Condo Fees- Each month you should keep the statements that are sent to you so that you can total it up at the end of the year. **Tip: Hang on to these statements in a file in case you are ever audited.
Management Fees- If you use a property manager, keep track of the monthly fee you pay them.
Advertising- Any advertising fees that you have throughout the year should be totaled and given to your CPA.
Utilities- If you, as the landlord, pay any of the utilities keep the statements so that they can be totaled and included in your overall analysis.
Rent- You should use some sort of tracking system throughout the year that every time you received a rent payment, you enter it into a tracking system. You will need to total your gross rental income for your analysis and you should have a record to show these payments.
Operating Expense List- This is a record that you create that keeps tally of expenses related to the operation of the business each year: gas, meals, contractor service calls, lawn maintenance, snow removal, etc. These expenses are deductible.
Improvements- Any one time improvements that you make on the property should be tracked throughout the year. However, they are not included in your annual tax analysis and you cannot deduct the cost of those one time improvements. That record will be utilized whenever you go to sell the property to reduce your cost basis.
What's that mean?
You are going to sell your investment property in 10 years for $200,000. You originally bought the house for $100,000. So your gains would be $100,000.
But, if you've kept track of these improvements, you add it to the $100,000 (original price) which then reduces your gains for tax purposes, requiring you to pay less in tax.
Rental Property Tax Benefits
One of the many features of investing in rental property is that as rental business owners we are able to have tax benefits each year.
While we don't necessarily feel these benefits as in money directly going into our bank accounts every month (like cash flow) tax laws do offer us an advantage in terms of mortgage interest reduction and depreciation that allows us to reduce or cost basis for tax purposes.
For example, if you have a $100,000 property (structure only not land value) you are able to calculate your depreciation by dividing the value by 27.5 resulting in a tax write off of $3,636.
This is savings that you don't feel every month but ultimately helps your business profits.
There are multiple resources out there for you to use to keep your records. One specific one I use is the iSpending app on my phone. I can easily input information anywhere and it allows me to export my information to print to take to our CPA when it's that time.
Yes, there are many things that you need to keep track of. But if you get a system in place, it can be rather easy and at the end of the day, when April 15th comes around, you and your CPA will be breathing much easier!
It's the 9th day of Christmas and it's my birthday!!
And in the spite of gift giving in receiving I want to talk about tenant experience and how providing tenants with unexpected gifts can be huge in having proud, loyal tenants.
Think about it.
We put a lot of effort, time and money into buying these investments and we want to have a great experience ourselves so we need to have our tenants have a great experience.
How do we do this?
- We have welcome packages for our new tenants.
We provide new tenants with a welcome gift. It could be a gift card, welcome flowers, a gift basket of items you need when you first move in. This gives the tenants a great feeling when they move in and get things kicked off on the right foot.
We also provide a welcome package that gives them important necessary information that will help smooth the transition so that there aren't any hiccups with the move in.
- We give holiday gifts to our tenants
Providing tenants with an unexpected small gift at the holidays leaves tenants feeling so appreciated during the holidays. We've had the sweetest messages and emails from tenants after we've sent cookies, gift cards, gift baskets for us thinking of them.
It goes to the notion of being seen, heard and appreciated by us as the landlord.
When we do this with our tenants, it helps create a better experience for all!
What is awesome about investing in real estate is that we know before we ever close on a deal and sign the dotted line whether a property is a good deal.
The process of buying rental property is in a lot of your control.
Which either…
A. people love because they like control
or
B. scares the daylights because they don't want to be responsible for the make or break of their financial investment.
And a big part of this comes down to knowing how to run numbers.
Knowing how to determine the return on investment that a property is going to yield you.
Knowing how to property find and estimate potential costs on the property.
It really comes down to knowing what to look, what questions to ask and how to calculate it.
When it comes to running numbers on properties…this is the part you want to get right!
I can't stress enough the idea that when you invest in rental property the numbers should really make the decision for you. It's not an emotional decision.
It's an investment decision.
And you need tools to help you ensure that you are looking at the numbers the right way.
1.) Use a Property Analyzer/Calculator
When you're just getting started you're probably wondering….ok I can find out all of the numbers you mentioned earlier….but what the heck do I do with them?
And it's a valid question. Most of us aren't going to sit down and create an elaborate excel spreadsheet that runs the numbers for you.
No sweat.
There are tons of resources out there can help you run the numbers on properties. There are free analyzers (grab our analyze here) there are free apps that are mortgage calculators that can give you an idea of what a mortgage would look like so that you don't have to figure this out on your own.
The best thing about these analyzers/calcuators is that you simply input all of the information about the property (list price, taxes, insurance, rent, fees, etc) and it will calculate your return on investment and cash flow…
…so that you know right away whether that property meets your return on investment goals.
If it does then you can start going down the path of finding out more information and potentially scheduling a showing.
If it doesn't meet your ROI goal then it's easy to say…no way.
….and keep looking.
Not only does having a tool like this make it easier to qualify or disqualify a property for you but it ultimately saves you a lot of time too.
2.) Numbers are Black and White
For some this makes them breathe easy…
For those who like some gray area, this might be difficult to deal with.
But the truth is numbers are not subjective.
There is data and information out there that you will find on each and every property that will allow you to run a black and white analysis of a property.
This actually is what you used to drive me crazy about math classes. While I was an ok math student, I never really enjoyed the black and white nature of math.
As an English teacher, I lived in the gray area.
Symbolism and subjectivity lived in my classroom on a day to day basis and my students and I would spend class periods building arguments for the different interpretations of the mockingbird in To Kill a Mockingbird or the ibis bird in the story The Scarlet Ibis.
But what I have found is that when it comes to dealing with our money that we have saved and sacrificed for….
I want things to be black and white.
I want to know, with much certainty, if I buy this property it will make me a certain amount of money each month and year so long as it is rented.
In this niche of investing in rental property, there is subjectivity in some of the decisions. The location, the type of tenant you put in the property, the condition of the property.
Those things aren’t so black and white.
But when it comes to the numbers…it should be.
When you run an analysis on a property and it spits out your projected ROI and cash flow, you’ve got to trust it.
You take out the emotion and focus on what the property will make you and whether that reaches your profit goals as an investor.
The Hard Truth
At the core of investing in rental property, we do it to make money.
Yes, that money that we make allows us to reach those personal freedoms, whether it be leaving your job, spending more time with your kids, traveling the world.
But in order for us to reach those freedoms, we have to buy the right properties at the right price.
And the only way to know that a property is the right price is to do your due diligence in learning the market you plan to invest in.
And
Know how to run the numbers so that you can get a pretty darn close estimate of what type of return that property should make you.
Guess what….I love to travel.
IT's my passion…it's my jam.
So I subscribe to many different email newsletters dedicated to travel.
Travelzoo, Sherman's Travel, Hotel Tonight, you name it I'm on it.
And I don't just let those email go to my junk email address and not read them
I know what days those emails come out every week and I look for them in my email inbox week in and week out.
WHY?
Because I want to see what the deals are this week.
Are there any that we want to jump on and schedule for the upcoming year.
I once was able to get Kirk and I RT flights to Denver for about $170 per person RT. I rarely see that go that low…if every anymore.
And guess what….the day I saw that deal…
I booked the flight.
Again Why?
Because I knew that it was a good deal because week in and week out I'm watching what trips are going for, what flights are going for.
I monitor the travel sites and emails so I'm ready to jump on the deals when they come up.
GUESS WHAT…
This is exactly what I do with real estate investing too.
Once you take the time to learn your market and complete a market audit where you've been watching for listing prices, closed sale prices and rental prices….
…you'll be able to keep your eye open for emails from your agent or scroll through the Zillow app to see what's new for sale.
And when you see something pop up that seems like a good deal…
you'll be able to jump on it.
Without having to spend a few days researching and running numbers.
Because you've done the work in learning your market you can run a quick less than 5 minute analysis on the deal to see if it's worth calling about, viewing or even making a quick offer.
The same concept I use with travel and booking trips and flights applies here.
It's all about learning your market and keeping a pulse on what's going on.
And I mean a weekly pulse.
Not that you did some researching two months ago and knew what it was like and now a few months later you're trying to determine deals.
I'm saying keeping tabs weekly on what is happening.
Watching…
Monitoring….
And when you see something come up you'll be ready to grab that great deal.
So when I get asked how or where do I find great deals.
I always say well how well do you know market?
If you don't know your market you're not going to be able to find great deals very quickly
Should I self-manage my property?
This is one of those questions you will have to ask yourself when you decide to buy that first rental property. But I will say that it is a loaded question.
It goes a lot deeper than just a yes or no question. There are a number of things that you need to think about when it comes self-managing and a number of questions you can ask yourself to help you determine what might be best for you and your current life situation.
Just like any other decisions in life, there are pros and cons to both. One of the biggest pros to self-managing your property is the fact that you keep more money in your pocket.
There are a number of questions that you need to take some time self reflecting on or discussing with your investing partner.
These will help you determine whether or not you should plan to self-manage your property or if being a landlord just isn't in the cards for you.
Consider some of these questions to help you decided if self-managing is right for you. All of the following questions relate to the varying aspects of managing property.
Do you have the time or desire to show your property?
Do you wish to keep all of the profit from the property in your pocket?
Are you willing to trade some money for a more passive investment option?
What do you plan to do if there is an emergency at the property? Who will take care of it? Who will you call?
How do you plan to screen your tenants to ensure you get a good tenant?
Are you aware of the national and state landlord-tenant laws that you will need to abide by as a landlord?
Is your rental a single family home that requires one person/family or multi-unit that may require more work?
If it's your first property finding it doesn't have to be fancy or expensive
There are tons of resources available to help you find potential rentals.
The key is knowing and using the variety of resources available for you because not all properties are listed on every platform.
And sometimes properties aren't listed anywhere at all.
Yes, you actually have to get out and talk to people and get deals through word of mouth.
But sometimes these can be the best deals.
So let's go over some of the places you can find deals.
1.) Traditional Real Estate Apps/Websites
While I mention these above in passing of course this is one of the most used ways people find property today. And one I use week in and week out. (I just don't rely only on this one).
There are a number of Apps/websites out there that you can use to find properties (Realtor.com, Zillow, Trulia, Redfin, etc) Find one that works for you because they are all a little bit different and offer some different information.
Pros: They are easy to use and navigate. They list all properties, not just residential, not just investors. Since they have Apps you can access them anytime, anywhere.
Cons: They don't list every property for sale and may not list the distressed or foreclosed properties that investors often go after. Sometimes the information that is presented (taxes, insurance, etc) isn't always the most accurate.
2.) Facebook Market Place Groups
This is an up and coming way for investors to find deals and is not in every town or city yet. However, even in my small town in PA we have a group that is a For Rent/For Sale Group where people can go on and list properties for rent or for sale.
It's great because it's accessible by many and easy to get information from the sellers because of the notification system within Facebook. Also, you can get a feel for feedback people are giving on properties and use that as good data for you while you learn your market.
Pros: It's Facebook, so many of us are on it numerous times a day. They have the notification system so you can get notified when there's activity in the group so you can respond to deals quickly. It's easy to gather information and ask questions about potential deals without having to go through a realtor.
Cons: If you don't know what questions to ask then you might get stuck. Some don't like to mix personal and business and view Facebook as a personal platform. You can end up working directly with the seller without a 3rd party representative.
3.) Work with a Real Estate Agent
When you're just getting started one of the key things that can help you find comfort in the process of buying an investment property is working with a real estate agent.
But I caution that you don't just want to work with any agent. I recommend working with one that is 'investor friendly'. Meaning that they already work investors or are investors themselves.
The truth is that buying and selling property for personal consumption is very different than for investment purposes.
There's a tweak in mindset that has to happen and if you're looking for someone to support you in the process you need someone who understands that this is different.
When you choose this type of agent, they'll know what sorts of questions you should be asking, what numbers you need to know and how to analyze the deal to see if it makes sense for your ROI.
Pros: They do the searching for you, so you don't have to. This saves you time. They can even preview properties for you to see if they meet your goals/standards as an investor before you waste your time scheduling showings.
Cons: If it's not an investor friendly agent then they might not give you the best advice. You have to work around your schedule and someone else's to find time to see the property.
This is always one of the top issues.
I hear it time and time again from my community of rookies..
"How do I finance my 1st property"
What sucks about investing in rental property is that there is most definitely a high barrier to entry…
20% is a lot of money.
IF you plan to buy a rental property using a conventional loan and not living in the property you can expect to have to put down 20%
So in real numbers…
…we're looking at
$20,000 on the purchase of a $100,000 property.
That's a lot of money
And is often one of the bigger challenges and obstacles that newbie investors have to overcome.
Where do I get the money?
If you're anything like Kirk and I we had to save our money like crazy. We got married in 2010 (put our finances together while we were engaged in 2009) and bought our 1st rental property in 2012.
And did I mention we used most of the money we had saved at this point in our lives to buy it.
That's scary stuff.
But two things here…
- It took us time to save to buy that 1st property. In fact, from June 2009 when we combined our finances to August 2012 when we closed on the first rental.
Granted, we weren't specifically saving that whole time for the intention of buying a rental (while Kirk maybe…but me no) but we were saving like crazy to do something with it.
So that took us over 3 years.
- Even though it was a lot of our money we still did it.
Yes, we were newly married, young ( I mean we were 23 years old) and had no kids.
So we could have survived if something bad happened.
But we still took the leap.
We had faith in the numbers we ran over and over again and the fact that we were committed to this thing working.
And so we did it.
Even with me knowing nothing (thank God for Kirk and his finance brain)
So if financing is the issue for you….
…the mountain that is standing between you and your first rental
Here are some tips:
- House hack your rental so you can put less money down. Using an FHA loan and living in the property first allows you to put as little as 3.5% down.
Remember that $20,000 down payment I mentioned earlier?
Using this strategy now makes that a down payment of $3,500.
That's much more manageable for someone facing the money mountain obstacles.
- Partner Up Find someone else who has similar goals and interests as you with investing in rental property and put your money together to buy the first deal.
Just because you buy one together doesn't mean you have to buy all of the rest of them together.
You might be wondering…."Emily, I don't know anyone who is interested in doing this"
Have you asked?
Have you told people that you are interested in investing in rentals?
My guess for most of us is NO.
We tend to not talk about the things that make us vulnerable.
Start talking about it.
My guess is you'll be surprised who you find that is also interested in reaching financial independence.
3 Be Patient and save the money I know this one isn't sexy or fancy.
But for crying out loud….get a budget, set some savings goals and just start putting your head down and doing the work.
Saving isn't always easy. Especially if you're a spender.
But the things you're wastefully spending your money on now…are they getting you any closer to your financial goals?
Is Netflix and magazine subscriptions and eating out 5 times per week getting you any closer??
No.
So make some sacrifices, commit to yourself and your goals and save the money.
Remember investing in rental property is a marathon not a sprint.
Keep in mind…saving for the 1st one is the longest and hardest.
Each time it gets a bit easier.
All in all….instead of standing and staring at the money mountain standing in your way of your goals….
…start climbing the dang thing so you can reach the top and buy that 1st property.
With every new year comes the excitement of a fresh beginning…
…a new start…
…a new you.
Right….many of us sit down and make audacious goals about what we want to accomplish in the new year.
And trust me…Kirk and I are here for it!
We LOVE sitting down and talking about what we want to accomplish in the new year
and looking back on what we accomplished the previous year.
We actually used to get made fun of by much of our family for not just setting goals but creating action steps that actually helped us reach our goals!
My mom will still joke to me on the phone about her action steps for the day when she's trying to tackle cleaning her house!
But anyways…the truth is there is a lot of power in fresh starts and goal setting.
At the same time, it becomes pretty easy to lose sight of those goals 30-60-90 days into the new year.
You know what I mean.
For anyone who is a gym rat throughout the entire year (this is me) you know how frustrating it is to walk into the gym on Jan 1 and in fact most of the month of January to find the equipment that usually is empty you now have to wait in line to use…
Yep….and while it's sooo frustrating for the regulars usually by mid February it all goes back to the typical regulars who are always there day in and day out.
But this is what happens.
Yes, you need to create long term goals for the year.
But you need to create shorter, more measurable goals (action steps, sprints) that you can use to keep you on track toward actually reaching your goals.
Otherwise….hello empty elliptical.
In applying this to your real estate investing journey you need to give yourself timelines for what you want to achieve.
Kick off 2020 with the goal of buying that 1st rental property or saving a certain amount of money for a down payment.
And create monthly and bi-weekly check ins that you can use to keep yourself on track.
To help with this I've included a 3 month goal calendar that you can print out and use so that you don't lose sight of buying that 1st rental property in 2020.
Click here to download it now!
So set some goals, create some measurable action steps and start building momentum to a great 2020.
If you're anything like Kenny who recently said his obstacle is "worrying about the fear of failing"
or like me
who was scared to start because I lacked confidence and knowledge.
Then you're not alone.
And sometimes it can be reassuring to know that others are feeling the exact same way you are in your journey right now.
Getting started with rental property is not easy and is very intimidating as a rookie investor.
You've probably thought to yourself…
"I'm not smart enough to do this"
"I don't have the money to be doing this"
"What are people going to think when they hear we are doing this"
"I don't know anyone else who does this…what will my family say"
"What if we buy a bad property and lose money"
"What if the market turns and we bought at the top of the market"
Give me a 'hell yeah' if you've said any of these things….thought any of these things…or felt any of these things.
You are not alone!
But as Warren Buffet has said "risk comes from not knowing what you are doing"
The good thing about all of those limiting beliefs that we all feel is that we can overcome them by simply realizing 2 things.
- There are people who have gone and done this before you who are here to teach you what they've learned, the mistakes they've made and how to find success.
Investing in rental property is controllable. You have a lot of control over the outcome of the endeavor.
So if you put the time in to learning and gaining the knowledge the risk factors go down dramatically because you will know what you're doing.
Lean on those who have been there!
Find a mentor to learn from.
Find a friend to learn together.
- People don't think about you.
This might be harsh but I feel like in a lot of podcasts and books I've been reading lately this is a common statement that keeps coming up.
So I will pass it on to you because it hit me like a ton of bricks when I read it.
All the time I spend worrying about what my family will think or what our friends of parents of our children's friends will think…..
No one cares.
Everyone cares about themselves.
Most people are not spending any extra energy thinking about you and what you are doing.
Why??
We are all busy and tired and going 100 miles per minute.
We are so focused on ourselves and what we are doing there isn't much time to sit and think about what Sally's parents from Jamie's school are thinking about you.
Forget about others.
Focus on you, your family and the goals that you want to achieve.
If you believe so deeply in what your mission is together and what you want to achieve you can't take time letting the fear of failing or the fear of what other people think stand in your way.
So commit….right now and as we begin a new year…..
Commit to your goals and your mission because this is your life.
Are you going to stand up and fight for your life?
You only get one chance!
Yes, it's true.
I love this time of year.
The holiday songs, decorations, lights, trees.
I love the way our house feel all decorated and at night when only the lights of the tree and our decorations are lit.
It's cozy.
So I thought it would be fun to end the year and prepare for the new year by starting the 12 days of Christmas- our edition.
Meaning that we've taken some of the most asked questions from the year, topics we've covered and put them into short, digestible snippets of content for you to take in everyday for the next 12 days.
Why?
Because this is a crazy time of year for many.
So being able to spend 30-45 minutes listening or watching content is nearly impossible.
So for the next 12 days we're brining you 3-10 minutes short spurts of both education on topics you've been asking about and motivation to help you get your mind and heart ready for a new year.
The topics we will be covering include:
- Getting over the fear of failing
- Goal setting for 2020
- Financing the 1st deal
- Finding properties
- researching your market
- self-managing your rentals
- how to determine great deals
- and more....
I invited you to tune in and celebrate the holidays with us here at RentalRookie!
The journey to buying that first rental property is no doubt a bit scary.
When you actually commit to stepping out of your comfort zone and seriously tackle the endeavor you can find yourself a bit lost and confused and overwhelmed.
While there are a number of things that you need to be aware of and learn about the journey to that first rental property (which we cover in our Rental Property Roadmap) there are foundational pieces of the process that are a bit more critical than others.
I'm not discounting any part of the process here; however, I want to draw your attention to the areas that I have found are the ones where you need to spend extra time understanding so that you can set yourself up for major success.
In this LIVE training that I recently hosted I break down those four pillars and talk about how they impact your journey.
We talk about #1 MINDSETand how your view and understanding of wealth has been shaped since you were a kid.
And how if you associate negative things with money and wealth you are ultimately self-sabotaging yourself from finding it.
Wondering why you haven't bought that property yet.....there's one answer!
Next, we move into talking about #2 Financingbecause 8 out 10 newbie investors have this as an obstacle they have to overcome to buying that 1st property.
So we break down two strategies that are great ways for newbie investors, who don't have a ton of cash, to use so they can make that a reality.
#3 Understanding Your Market...this is my favorite and to me the most important piece of the puzzle.
This is where confidence is built and knowledge is truly mastered.
When you know your market you know how to spot good deals which ultimately makes a force in the investing world.
Lastly, I touch on #4 Analyzing Deals the next most important piece of the puzzle. As this is where you know before you every buy a property whether it will make you money.
That's what's awesome about real estate.
You can know before you buy the deal that it will cash flow you so much each month.
But you have to know how to run the numbers and what your ROI goal is.
So we cover A LOT in this training to help you continue kicking over dominos on your journey.
#
When you're just getting started with investing in real estate everyone goes through a period in their journey where they don't know where or how to start.
And let's be honest...in today's society many of us want to know the answer now.
We hate having to go down the road of figuring it out and mostly because time is the thing that we all seem to never have enough of.
So for years of working with brand new investors we've answered the most frequently asked question when it comes to starting the journey to that first investment property.
Where do I start?
We've put together this roadmap that has been used and refined over the last 6ish years in our investing journey to show where to start AND how to get to that first property.
#1 Personal Financial Audit In order to move forward in this journey you have to know where you are now. You have to get your financial house in order, so to speak, and truly take stock of what your financial picture really looks like. Taking time to determine a budget to ensure that this long term investment will work for you is critical.
#2 Goals & Overcoming Fears You have to give yourself a path to follow. It's easy to get distracted and chase the shiny object but if you can determine your why and set goals to keep you on track your journey will be much smoother. Thinking about the type of property you'll pursue (single family home, vacation rentals, commercial properties, etc) will help you stay the course.
#3 Financing Once you've determined your financial picture, it's time to actually figure out what you can afford. A lender will help you determine what kind of monthly mortgage payment and interest rates you could afford given what you earn and what type of property you own now. Also, they will be able to get you pre-approved so that you can take action quickly when you find a rental property that is a great deal!
#4 Learning the Market This is HUGE. Once you've figured out how much you can spend, now you have to figure out where to buy property. I stress this step so much because I truly believe you have to take time really researching and understanding the community/town/city you want to invest in. What does this mean?
Learn about the industries, employment rates, entertainment, population growth, good and bad parts of town. What do the property taxes look like in the area and how does that affect your budget. Learning what properties sell for, list for and rent for will all help you become a better investor and know when a good deal comes up.
#5 Running an Analysis This is the next huge part of the roadmap. You've got to learn what types of numbers to look and for and how to take those numbers and run an analysis so you can see what kind of cash flow this property will earn you. We get into buying rental property to earn a return and the cool thing about investment properties is that you can generally know what you can make before you ever even buy it.
So knowing how to calculate the rental income a property will generate is critical to you not setting yourself up for failure.
By spending time in the previous step and learning your market and what kind of monthly rents you can actually earn, talking with real estate agents to get even more in depth understanding of an area married with running an analysis is the cornerstone of finding success.
#6 Due Diligence Once you've figured out where to buy and whether the property makes financial sense, now it's time to really dig deep into the deal to make sure the property itself fits the other pieces of the puzzle. This is where you are looking at the quality of the property (cap ex) and getting verified information from the current property owner about current rental amounts, leases, utilities etc. A true and verified idea of the operating expenses will be huge in this part. And because they are selling the property they obviously want rid of it for a reason. But ask for documents to verify all of the information they are giving you.
#7 Offers & Closing You've got to figure out how to put together competitive offers together so that you put yourself in the best position possible to getting the deal. There are definitely things you can do when putting the offer together to allow yourself to give a bit in the negotiations so that you are working with the sellers to get the best deal. We deep dive into this in our course.
When you're just getting started with investing in real estate it's easy to get caught up in the overwhelm of everything there is to know.
You are learning everything on the fly and trying to put it into practice and it's easy to let things slip through the cracks.
We see it happen with new investors all of the time and admittedly we have fallen victim to some of these too.
So we’ve put together 7 mistakes that are often made by newbie (and even seasoned investors) to help save you from yourself!
#1 Not asking for verification of numbers Be invasive. This is your hard earned money that you’ve saved and plan to invest to help build your short and long term wealth.
#2 Underestimating maintenance costs You want to account for this when you are running the numbers BEFORE you buy property.
Because those costs will eat into your net cash flow and actually make your return less than expected.
#3 Starting the eviction process too late So even though you may want to give people multiple chances…
…remember that this is business and this is your money.
Follow your lease when it comes to starting the eviction process.
#4 Not screening tenants thoroughly So my advice to you is take the time to really vet out your potential tenants.
Make the phone calls, pull the credit, do the background check.
Because ultimately you want to get the best potential tenant living in your investment.
The person who is going to take care of it like it’s their own and respect it and you.
#5 Not treating your venture as a business A huge mistake that rental investors make is viewing this as a hobby and not as a business.
Even with just one property you need to begin to realize that it is a business and you are buying it to make money.
#6 Overestimating potential rents So when you are running numbers on potential deals be sure to take time to research what properties are actually renting for where you are investing.
Don’t guess….do the due diligence.
While it may seem annoying in the beginning it’s only going to ensure you make a good investment.
#7 Underestimating the importance of cash You don’t want to put everything you’ve saved into your investment and be left with barely anything in reserves.
First, if you are using financing the bank will required at least 6 months of reserves…but even still
I would recommend having even more than that available.
So tune in to hear us deep dive into each of these topics to save yourself from making these same mistakes!
When you are just getting started when it come to real estate investing there's no doubt that it is overwhelming.
You're probably asking yourself questions like:
where do I start??
how do I start??
What investment strategy should I use?
Are the market conditions right for me to buy a property right now?
And while we have an entire roadmap that we've put together to help you figure out where to begin and what things you need to know along your way.
You have to spend some time sitting down and really asking yourself some hard questions and reflecting on where you want to go with investing and what you want this journey to look like.
We often talk about figuring out 'what type of investor' you are early in your journey so that you can filter out a lot of the things that will get in your way.
But another thing you can consider is the conceptual ideas or high level thinking around investing and how they can apply to real estate and your long term investments.
In this podcast, Kirk and I break down 5 critical factors to investing and apply the concept to real estate.
We talk about:
- Persistence
- Pervasive
- Robust
- Investable
- Intuitive
So tune in for a 100 foot view of the investing world and why you need to be considering these factors in your REI journey.
Well....if there's an elephant in the room when it comes to talking about the market I think it's this question that Tatiana (from our community) asked.
Kirk and I jumped right in to talk about it.
There's no secret that right now all over the news there's some talk about the market and what may happen in the somewhat near future.
It's been over 10 years since the big recession hit in 2008 and the housing market has been on an upward swing since.
The reality is that the market is cyclical and after an upward tick there's going to have to be a market correction at some point.
We talk about how it's not necessarily always about timing when it's going to happen (unless you have a crystal ball) but realizing and thinking 3-5 years down the road from buying property right now.
Ask yourself questions like if the market should turn a bit can I hang on to this property through the swing?
If the market drops 20% will the numbers still work?
We can't predict when it will happen but we can be forward thinking in our investing and set ourselves up to be able to handle the downward turn.
These are a few of the questions we unpack on this episode. Tune in to hear more answers to common investing questions.
When it comes to buying rental property as long term assets one of the most important things you need to pay attention to is the capital expenditures of a property.
You’ll often hear people refer to things like Cap Ex.
And really, what those are, are the big ticket items that you may eventually have to replace on a property that are going to cost a lot.
These capital expenditures are including things like the roof, electrical, plumbing or having to repave a parking lot. Depending on how big the physical asset of the property is will dictate the amount of money you'll need for those projects to be complete.
And I'd be lying if I said that we were super focused on these in the beginning of our investing journey.
We knew about them and that they were important, but we rarely even used it as a line item when we did our financial analysis on a potential deal.
Now in our defense we were buying properties that had a cash on cash return of around 20% so we had wiggle room for these expenses if they came up.
But the reality is that these capital expenses can kill your cash flow and if you're not prepared for them with the right amount of reserves they'll demolish your account or put you in debt.
One of the things that a lot of investors will do is in their property analysis, they will include every month a line item for Cap Ex expenditures.
And so, maybe they save every month a certain percentage or a certain amount of money each month from their rental income that they make and they will put it in a Cap Ex fund.
Capital expenditures is essentially saving for the idea that Cap Ex expenses are the major expenses that a property is going to entail over owning that property for the life of your ownership. If you buy a property that just has a brand new roof, that might not be something that you’re going to have to worry about or think about unless you’re planning on owning the property for 15, 20 years.
You might not even have to think about a roof. Maybe you bought a property that just had updated plumbing and electrical. Again, an issue you might not have to think about.
But you have to look at the property as a whole, make note of some of those large ticket items, find out how long the furnace has been there, how long the hot water tank has been there, those sorts of things and then that will allow you to determine how much you should be saving each month toward that Cap Ex fund.
In this podcast episode we share our own story of how the impending capital expenses on a property in our portfolio caused us to decide to sell the property.
While it was a cash flow performing property, the reality was that we were going to have to sink so much money into the property in the coming 3-5 years that it would eat up so much of our cash flow it didn't make sense to keep it.
Even though we had amazing tenants in there. Which ultimately helped us when it came to selling because we were able to talk about the great tenants that we had.
No one wants to buy a property with crappy tenants.
>>>Click here to learn more about how to get started with Rental Property>>>>>>
Buying rental property as a new real estate investor can be overwhelming, scary and flat out hard.
There are a number of obstacles that come into play when beginning to invest in real estate and one of the major ones is with how to find the money to buy properties.
A great investment strategy for both newbie investors and seasoned investors is using partnerships to acquire investment properties.
It can be a huge struggle when you are just starting out to save up thousands of dollars for a down payment.
That's actually one of the tough parts about investing in rentals is the high down payment amount (usually 20%ish).
There's a high barrier of entry.
But if you're looking to invest long term to make great cash flow then finding others who have similar goals shouldn't be too difficult.
The cool thing about partnerships is that there are a variety of ways that partner structures can come together.
There's no one way to partner.
Depending on the need you have can help determine what type of partner you can look to team up with.
It could be another brand new investor, family member, friend, colleague or even another property owner.
This week on the podcast, we are sharing a behind the scenes look into one of our video lessons from our Financing Avenues for Buy & Hold Investors all about partnerships.
This is critical for newbie investors because many rookie investors run into obstacles with funding their first deals.
This is a great option for rookies who want to start and need some help and creativity with financing.
Because purchasing a rental property doesn't have to be a scary thing.
In this lesson, we explain what a partnership actually is, why it can be a great option for any investor and we share actual example structures of partnerships to help get you thinking about how you can use this strategy in your own journey.
Lesson Objectives:
- learn how partnerships can be a viable option for investors
- see examples of partnership structures (with monthly profit splits/property management) that you can use in your own investing
- learn where to find potential partners
Grab the rest of the Financing Avenues for Buy & Hold Investors >>https://bit.ly/2N4LW8tr
You guys....this week I'm here to inspire.
Kirk and I often jump on the podcast to share practical tips and strategies that we've learned in the 7 years we've been investing.
However, this week I want to inspire you.
I want to share with you a dream I've had since I was a kid.
One that, for a period of my life, thought it wouldn't be something I could achieve until I was in retirement.
But believe it when I said that we've achieved this dream of mine when I was only 32.
Yes...not 65.....32.
And without a shadow of a doubt I can tell you that when we bought our first rental property...
...a 2 bedroom, 2 bath condo I never imagined that this investing road would take us where it has.
I never actually thought that it would replace my income as a teacher.
I never actually thought that it would allow me to stay home and raise my babies and live a flexible life that we designed.
I never actually thought that it would allow me to buy a beach house in my favorite beach town at such a young age.
But it has.
And even though it was scary as hell to buy that first rental property.
It truly took that first one to change everything.
Tune in to this week's podcast to get inspired!
Even if you're not married this podcast is for you.
Because think about it....
Anybody that you become a partner with when it comes to buying property is like a marriage.
You're committed to each other and your joint venture.
So it's important whether you are investing with your spouse or with another individual to really know the foundational pieces of real estate investing.
That way your relationship, whether a true marriage or an "investing marriage" doesn't come crashing down.
This week on the podcast we share a story that we, or should I say Kirk, experienced first hand with a couple who got in a bad situation.
While Kirk went to help and offer advice or guidance on the situation it turned into a real awkward situation for him and a very sad outcome for this young couple.
Tune in to this week's podcast as a reminder why it's so important to not forget about some of the basics when it comes too investing.
Because it not only saves you money but your relationships as well.
I get this question numerous times a week from members of our community. It's definitely one of the things that many newbies want to know.
You're nervous and scared and want to know exactly how to find those great deals.
The reality is finding a great deal is a process.
It's not something that you're going to learn overnight.
It takes time, once you determine the market you want to invest in, you've got to put in the work to learning everything you can about what properties are selling for, listing for and renting for.
You've also got to know your goals and path as an investor. This will give you the guidelines to help you determine if a deal is a great deal within your search parameters and goals.
Sneak Peek into our Course
I decided that this summer I would give y'all a sneak peek into some of our courses that we have here at RentalRookie.
And on this week's podcast I want to share the actual lesson from one of our lessons inside our ZerotoProperty Course.
So enjoy getting a sneak peek inside what our course looks like and my teaching style to see if it's a good fit for you!
Grab the rest of the course by going to rentalrookie.com/zerotoproperty
We've had a ton of really great questions asked about the investing process recently.
The reality is when there are great questions there are often others who have the same one.
In this podcast episode, we break down some of our most recently asked questions from our RentalRookie Community Members.
Real Estate Investing Tips
Some of the questions we answer in the show are:
What are some of common mistakes for newbies?
It's easy to make a lot of mistakes when you're just getting started but we share 2 of the biggest ones: not verifying and running numbers correctly and not having and keeping reserves.
Should I do a refinance or a HELOC?
This really depends your situation and what sort of equity you have in your current property and also what the rate is. We break down why in some cases one may be better than the other.
How to understand if the rent will cover the mortgage and expenses?
This really comes down to knowing what numbers you need to have in order to run a proper property analysis. In most cases, you should be able to have true numbers and know exactly whether the property's rent will cover your expense/mortgage and cash flow BEFORE you buy the property.
These are juts a few of the questions we unpack on this episode. Tune in to hear more answers to common investing questions.
>>>Click here to learn more about how to get started with Rental Property>>>>>>
This is a can't miss episode if you've been wanting to invest in rentals but are a newbie and are nervous about taking the plunge.
Grant and Sheila were right there with you in wanting to make this a reality but facing many of the fears that we all face when we are getting started.
Not to mention they have 3 daughters, run a business and Sheila homeschools the children.
So they are busy!
But they didn't let that stop them in their goal of pursuing and buying rental property.
Their story is one that is so inspiring especially because they took quite a U-turn from where they actually thought they were going to buy and the type of property they were going to buy.
They started going down one road and were open to trying another type of property and area that aligned more with their expectations of what they wanted out of investing.
Tune in to this week's show to get inspired, find direction and learn about an area of investing that we haven't talked that much about here on the podcast (short term rentals)
If you want to check out Grant and Sheila's gorgeous Nashville Rental click here to check it out!
Often it can be thought that buyers are typically the ones who ask if seller financing can be an option.
The reality is that there are a variety of factors that have to be in place, in truth, for seller financing to work.
Things like the property being owned free and clear or with a very small mortgage are favorable things for seller financing to work.
Because the seller ultimately becomes the bank in a seller financing deal.
What is seller financing?
It's ultimately when traditional banks are eliminated from the process and the seller of the property holds the mortgage note to the property and the buyer pays the seller each month not a bank.
So this is favorable for buyers especially because you have the chance to negotiate on interest rate, down payment, loan terms, etc. without having to adhere to government or Fannie/Freddie guidelines.
Recently we decided to put one of our properties on the market.
We originally bought the property with the intention to flip it and decided that we would hold on to the property as a long term rental for a period of time.
We had great tenants show up on our door step who from the beginning were using our house as a transition home from their thousand mile move back to the area to their forever house they planned on buying.
So we rented it out and once they had found their own home to offer on we put it on the market and had it under contract in 2 weeks.
In this podcast episode, we share how we negotiated the counter offers to include seller financing so that we could lock up this great, qualified buyer that we had.
Since we owned the property free and clear it was a no brainer for us to counter back with this and get the property under contract in our slow moving market!
Let's be real...
There are plenty of obstacles and fears that hold us back from getting started with investing in rentals.
The fear of losing money
The fear of what people will think of you...
The fear of getting a bad tenant...
The list can go on and on.
So when it comes to trying to find the time to schedule showings and meet agents and lenders etc, it's easy to say I can't because I don't have anyone to watch my kids.
This episode is a shout out mainly to parents about the fact that stop using your kids as an excuse as to why you can't take action and move forward toward your real estate goals.
The solution is simple...
Take your kids with you.
We've taken our kids to meetings with banks, looking at properties (even with no floors) closing tables and more.
You name it and they've been there right along with us.
And recently all of that paid off in a pretty cool way.
Recently our 5 year old started asking questions about why we buy property?
And how does property "give us money".
And it could have been really easy for us to say "honey you're too young to understand." and just blow her off.
But we decided to jump on the curiosity that she had and try and teach her through showing her just how it works.
So we sat her down and talked to her about how she could save some of her money and help us buy our next rental property.
And as a result each month she would get an envelope in the mail with money that would be hers.
Like any kids, she was ecstatic at the thought of earning money each month.
She totally jumped into the process, helped us look at properties online, and when we found the one she put her money in a plastic bag and put it in the freezer labeled.
The coolest thing was when it came to closing we had talked to her about how important it would be.
She went upstairs and got herself ready by wearing a dress, heels and tons of bows in her hair!
She went to closing, signed her name and now is a "Part-owner" in a property with us.
But the point of the story is this...
...take your kids.
They'll learn so much from watching you even if you don't realize that you are teaching them these valuable life and financial lessons.
Investing in Student Rentals Within the rental property investing niche there are many different paths that you can take. The different types of property you can invest in, albeit single family, duplexes, mobile homes, vacation rentals, etc, all offer their own variances in the investing journey.
While they are all classified as rental property each one offers a unique twist that allows investors to find the one that resonates with their goals for investing.
In this mini-series on the podcast we are going to break down student rentals and really dive into what they are, how they are different, what types of returns they can make for you and more.
This is 2 of 3 podcasts episodes that are going to focus on this topic.
What do the real numbers look like behind student rentals? Like we mentioned in the first podcast of this mini-series student rentals can be a lucrative addition to your rental portfolio. For example, a 5 bedroom house the normally could only rent for $800-$1000 brings in over $2,000 per month as a student rental.
So the ability to charge a higher premium for the property is definitely an added advantage to investing in student rentals.
In this podcast episode we give you a behind the scenes look at the actual number behind our student rentals in our portfolio.
We break down purchase price, total money invested, gross income, utilities, taxes, renovations and more so that you can see how these properties have given us a great return on our investment.
Even more, we talk about how we've structured a partnership that we have on one of our student rentals.
Therefore, you have to know what sorts of things are important to ask in the screening process with students.
>>>Click here to learn more about how to get started with Rental Property>>>>>>
Podcast Mini-Series 2 of 3
Stay tuned for the next episode of our student rental mini-series so you can learn everything you need to know about investing in student rentals.
Investing in Student Rentals Within the rental property investing niche there are many different paths that you can take. The different types of property you can invest in, albeit single family, duplexes, mobile homes, vacation rentals, etc, all offer their own variances in the investing journey.
While they are all classified as rental property each one offers a unique twist that allows investors to find the one that resonates with their goals for investing.
In this mini-series on the podcast we are going to break down student rentals and really dive into what they are, how they are different, what types of returns they can make for you and more.
This is 1 of 3 podcasts episodes that are going to focus on this topic.
What is a student rental? A student rental is a rental property that investors rent out solely to university students. They could be undergraduate or graduate students and these properties are located in university and college towns.
One of the major perks of investing in student rentals is the premium rent you can charge.
For instance, we have a 5 bedroom house that we use as a student rental. If we were to rent it out to a family we could maybe charge somewhere between $800-$1000 for the house.
But as a student rental, we got over $2000 a month for this same property.
So you can see that having it as a student rental vs. a single family rental is more advantageous for return.
Student Rental vs. Single Family Rental Rent revenue is not the only thing that differs between a student rental and a regular single family rental.
When it comes to the tenant screening process, it differs quite extensively.
In some cases you are screening 18-20 year olds who have no credit history, have probably lived with their parents for the last 18 years, have no employment and no salary.
So you can immediately see that the normal qualifications that you use to screen a prospective tenant can't really work.
Therefore, you have to know what sorts of things are important to ask in the screening process with students.
>>>Click here to learn more about how to get started with Rental Property>>>>>>
Podcast Mini-Seris 1 of 3
Stay tuned over the next two podcasts to hear a cast study about the revenue our student rentals produce for us as well as hear an interview of someone else who invests in student rentals and get their insight as well!
REIT Investing When it comes to investing in real estate there are so many different avenues that you can take. Many times we have broken down the various avenues that one may pursue: flipping, rental properties, wholesales, tax liens, syndications to name a few.
One of the things that most of these investing ventures have in common is that the process of investing in and owning the real estate is very tangible. You buy the property and you can walk up and touch the property that you own.
In most cases, it may be a sot of active investment in that you are actually doing work related to owning and making money on the deals.
In this week's podcast episode we break down REIT investing and how you can still invest in real estate but in a much more passive manner.
What is a REIT? REIT stands for real estate investment trust and are companies that invest in income producing real estate properties. These assets can range from residential real estate to commercial real estate, gas stations, grocery stores, movie theaters, etc. This allows individuals investors to own real estate.
Which means that investors can earn profit from investing in real estate without having to go and obtain financing or manage any properties individually.
They simply invest by purchasing these portfolios of assets- similar to how one invests in a stock or exchange traded fund (ETF).
One of the signatures traits of a REIT is the fact that companies must pay out 90% of their taxable income to shareholders.
Not only do investors earn profit from the performance of the REIT but they also pay out a REIT dividend yield which allows you to make money despite the performance of the REIT in the market.
REITS trade on many of the major stock exchanges which allows you to invest in them through brokerage companies. (similar to an index or mutual fund)
REIT Categories One thing to realize is that there are different categories of REITs that differ slightly in their performance.
Equity REITs-These are REITs that own income producing real estate and the most common publicly traded REIT. This is the type of REIT that most investors ultimately end up investing in.
Mortgage REITs-With a mortgage REIT the income is generated based off of the interest that is collected on the loans which they invest in. So whereas a regular (equity) REIT invests in real estate, mortgage REITs invest in mortgages and mortgage backed securities.
Single vs. Index REITs - Investing in a single REIT means that you are investing in a single company. With an index REIT you are investing in a curated group of companies who invest in real estate.
>>>Click here to learn more about how to get started with Rental Property>>>>>>
Why this might be a good option for you as an investor?
Let's face it investing in rental property as a solo investor requires some cash. The high barrier of entry to the real estate investing world often leaves many from actually taking action and buying property.
I get it...real estate syndications are intimidating.
For pretty much the entirety of our real estate investing career I have stayed clear of this path of investing because the term itself just scared me.
It sounded so serious and seemed like it would require a ton of money and so I basically ruled them out as an option for us.
As always, Kirk approached me about actually getting involved in one and so the real homework began to learning what they were all about and to see if they were as intimidating as I once thought.
The idea of being a passive investor when we have been such active real estate investors ones terrified me. I felt like I was giving up control.
And one of the things we really love about investing in rental property is the control you have on your cash flow and return.
Even more, to this point we've only invested in residential real estate so taking the next step into the lad of commercial real estate was also a bit nerve wrecking for me.
What is a real estate syndication?
In its most basic terms, a syndication deal is when a group of investors all contribute a certain amount of money toward the acquisition of a deal.
Think of it as real estate crowdfunding.
Let me break it down...
Let's say we have Paul and Mark and they found this awesome 50 unit apartment building that they feel they can get below market value.
Not only that they can add value because the units haven't been updated, the common places haven't been updated and the rents are below market value already.
So in an effort to be able to purchase this property, they decide to raise money from investors to help purchase the property.
Once they have secured the funding (from investors) that they need they purchase the property and move forward with renovations and property management of the real estate.
Now it is Paul and Mark's job as the "sponsors" of this syndication deal to do all of the due diligence on the property, the market in which the property is located, the bank terms, etc.
This all is presented to investors before any money is collected so investors can decide if the deal and the information meets their individual goals as investors.
4 Things to Understand About Real Estate Syndication 1. The sponsors of the deal will typically collect an acquisition fee and a management fee for putting the deal together and continuing to manage the deal through closing and renovations. 2. As an investor you should look to received a preferred return. Which basically means that before any sponsors can collect any profit from the cash flow of the property, the investors must be paid out what was quoted to them in the terms of the deal. Typically you see this anywhere from 8-10%. 3. Real estate syndications can be set up as different entities. You may see them structured as a limited liability company (LLC) or a limited partnership (LP). Be sure to pay attention to how they are structured. 4. Be sure that when you are reading through the information packets for the deal that you look at the cash on cash return and that it meets your goals as an investor. Each investor is different and it's important to be sure you're comfortable with the terms of the deal.
In this week's podcast episode, Kirk and I break down our own syndication deal and how we went about determine whether it was right for us.
Even more we share the details of real estate syndications so that they can be less intimidating to you as a novice investors.
As we move forward and look ahead in setting our goals for 2019, we can't help but take some to reflect on the year prior.
If you've been in our community long enough you know Kirk and I love the beginning of a new year and goal setting for what big things we want to accomplish in the new year.
In the past on the show we've always had a show at the beginning of the year that broke down our goals for the new year.
However, this year we decided to share with you the actual numbers behind our rental portfolio.
Yes, what we actually made in profits from our rentals.
>>>Click here to learn more about how to get started with Rental Property>>>>>>
Not only do we give you the number we made last year, but we break down our properties and talk about which ones were the winners and losers.
And in spending some time looking at the spreadsheets and numbers from last year, it's allowed us to realign our thinking for what we may want to go after this year in our investing.
It's easy to briefly look at the profits and losses from the year before and gloss over what actually goes on in your investing business.
However, taking time to really look at what your properties are doing for you and it may make sense to shift your focus can only help you grow your portfolio the smart way.
Tune in to hear our candid conversation about 2018 and what we plan to focus on in the new year.
Believe it or not, we are into another new year.
As quickly as 2018 came and went we are starting into a new year of new goals and huge plans of what we want the year to look like, what goals we want to crush along the way.
Instead of kicking off the year talking about our goals we wanted to kick off the year answering your questions
>>>Click here to learn more about how to get started with Rental Property>>>>>>
We get tons of questions inside our Private Facebook Group and wanted to take some time to answer some recent questions that were asked.
In this week's podcast episode, we break down why you need to get a pre-approval for each property and each offer that you make.
We discuss making offers without real estate agents and why it could be beneficial as a buyer to use an agent as it costs nothing out of your pocket.
A huge fear that a lot of newbie investors have when it comes to scaling is how to grow your portfolio without blowing all of your cash.
We break down how this is similar to the fitness New Years resolution that so many make and the idea of going to the gym to lose weight is like growing your portfolio.
Tune in to hear these questions and more answered from our own experiences in growing our rental portfolio and networking with other investors.
Believe it or not it sometimes is not always about the money.
While that seems hard to understand because as investors we plunge into real estate investing in an effort to make more money and build wealth.
But what we've learned in our time as investors is that while money plays a huge part in the acquisition of property (both in paying for the deals and the money they generate) there are some things that just aren't worth any type of return.
>>>Click here to learn more about how to get started with Rental Property>>>>>>
In this week's podcast episode, we have done something new.
We've taken one of our very early episodes, Show12, and brought it out from the vault because we have found that we reference this episode so much that it would be good for our new listeners to hear.
The reality is the first shows that come out with a new podcast often don't get listened to a few years down the road because new listeners tend to listen to new shows and the most recent ones.
Yet, we have a lot of great information in those first handful of shows.
So, in this episode we discuss the pieces of the investing puzzle that come into play beyond the ROI.
While, we break down what an ROI is and why it is important, we also share what other things can come into play when deciding whether a property is the right fit for us.
Join us, as we share a personal story about how they turned away a deal that would have yielded them an 80% ROI.
«Grab our trainings, spreadsheets, and videos inside our Pro Community»
It's no secret that real estate investors love to find ways to save when it comes to taxes.
Heck, I'd say any investor who makes a profitable investment would love it if they could somehow cut down on some of the taxes that they have to pay in order to keep more money in their pocket.
And if you've been around the block in the real estate investing niche for some time then you've probably heard of things like a 1031 exchange.
Which in essence allows investors to defer their need to pay tax when they take their gains from the sale of a property and roll those gains into the acquisition of a "like-kind" property of a higher value.
This tax deferment plan has been around for some time and is definitely a great way to take advantage of using capital gains to grow your investing portfolio.
Click here to learn more about 1031 Exchanges with Rental Property>>>>>>
While a 1031 is a great avenue and one we have used in our own investing journey...
...I"m particularly excited about this new opportunity that was established in the new tax code that was adopted in December of 2017.
As a real estate investor, we have an exiting chance to not only save on taxes from gains but also spur economic development in areas that could use a little boost.
What is an Opportunity Zone? According to the new tax code, investors can choose to take the gains from the sale of any investment (real estate, stock, bonds, business, etc) and use those gains to invest in real estate or business in selected areas of the United States called opportunity zones.
These opportunity zones (which you can see on a map by clicking here) have been determined as places that could use some economic boost and as such have been chosen to allow investors to reap some benefits if they choose to invest their capital there.
How does the Opportunity Zone save me with taxes? If you would decide to invest in one of these so called opportunity zones as a long term investment you will have the chance to save in how much tax you would actually have to pay on the gains from the sale of your original investment.
For instance, if you make an investment in one of these zones and hold onto the investment for longer than 5 years there is a 10% exclusion oft he deferred gain. Even more if you hold the investment (in the zone) for more than ten years than you will have the chance to not have to pay any tax on the gains that you had made.
In this week's podcast episode, Kirk and I break down what we have learned, so far, about this new opportunity for investors. We are in the early stages of learning about it and also in the process of setting up the qualified opportunity fund which we need in order to hold the money we plan to use to invest.
In the show we answer these questions:
- what is an opportunity zone
- why you have to put the money into a qualified opportunity fund
- the purpose of investing in an opportunity zone
- How this can be an advantageous move for real estate investors
- and more...
Investing in rental property definitely has its advantages.
But the problem is that there is a lot to learn.
Not only do you have to figure out where you want to invest and what types of returns your looking to make on property, you also have to pay attention to things like financing options, taxes, condition of properties, and more.
So I would recommend to anyone looking to get started with investing in real estate...
...don't jump in blind.
In fact, take time to really get to know the various facets of investing.
Because it's your hard earned money that you will be investing.
And you want to make sure that you are making a great investment.
In this week's episode, Kirk and I cover some hot questions that have been asked recently by members of our community. We break down each question and share our insights from building our rental portfolio over the last few years.
We are on a mission to help regular people, who may have no experience or background in real estate of finance reach financial stability and flexibility through real estate.
In the show we answer these questions:
- I'm 51, is it too late for me to get started?
- Do I have to follow the 1% rule or will I still be ok as long as I cash flow positive?
- Should I create an LLC or title newly acquired properties in my name initially?
- How to find deals in a small, competitive market and what are some good markets to invest in outside of my area?
- and more...
When it comes to being a property owner there are a variety of hats that you must wear.
Especially when you plan to be an investor landlord, meaning that you are the one finding the properties, analyzing the deals, buying them and then managing the property.
And you specifically chose not to hire a management company so that you can keep more money in your pocket.
There's no doubt it can get overwhelming and sometimes even small things can fall through the cracks.
But what we have found in our own experience is that those small things can really help foster that landlord and tenant relationship and keep those great tenants staying longer and resigning your rental agreements.
How to Get Tenants to Resign Residential Lease Agreements? When we first got started with investing in rental property it was a learn by doing type of situation. I speak of this often that I knew nothing about investing when we got started.
So we've used a trial and error approach.
And sometimes that meant just keeping our head above water as we sifted through phone calls, leases, deal analysis, rehabs and so on.
So there was little time to do the 'extra' things that helped tenants know that you appreciated them.
When I say a little goes a long way it's really true.
Think about it.
Don't you get a good feeling when someone goes out of there way in an unexpected way to make you feel appreciated.
Maybe it's a simple card in the mail letting you know they're thinking of you.
...or a gift basket at the holidays.
Why shouldn't we do these extra things for our really great tenants.
I'm not saying that you do this with the tenants who you can't wait to get out of your property.
However, on the flip side maybe this would help them become better tenants ( I don't know you'd have to try it out and report back).
But those great tenants deserve to know that we appreciate them and the fact that they are taking care of our investment.
I mean we put our hard earned and saved money into buying this property and then we just turned it over to someone else to do as they wish with it (within reason).
We have found that when we've done these extra things for our great tenants they are so surprised and feel so appreciated that they become even better tenants and end up staying longer in our properties and want to automatically renew their leases for another year.
In the show we discuss these tips:
If you've followed our story for the last year or so you know that we started dabbling into doing complete renovations on properties with the intention to sell them.
As primarily long term rental investors, this was a new avenue that we were pursuing and wanted to do it in a effort to diversify our investing and be able to report to you what we learned in the process.
While we started down the renovation road with the purpose of selling the properties to make a small profit, we ultimately decided to keep the properties and turn them into long term rentals.
We learned a ton along the way in relationship to hiring and working with contractors as well as getting a better idea of what it costs to renovate properties from the bones up.
Meaning, we bought these properties and basically took them down to the studs fixing everything: electrical, plumbing, HVAC, structural elements and more.
How flipping houses showed us a new rental niche in our town. When we finished our first renovation project we were excited to get it on the market. It was completely updated with granite counters, stainless steel appliances, exposed brick fireplace in the kitchen, brand new bathrooms.
I mean everything was new.
And ultimately in our small town, where the market takes a couple years to sell properties, the property sat.
For about 10 months.
And we decided that instead of continuing to drop the price just to get it sold, since we didn't need the money back out of the property, we would keep it as a rental and earn approximately $10,000 for holding it as a rental.
Fast forward to the beginning of 2018 and we went after another property doing the same thing we did on our first project.
This time we let it on the market for only one month (definitely not long enough) but decided instead of rolling the dice and heading into fall/winter without a sale we would rent it so we had guaranteed income of another $10,000 (net profit) in our pockets.
In this episode, Kirk and I break down our flip projects sharing some of the numbers and why we specifically chose to turn these "flip" projects into long term rentals. Ultimately, because we didn't have the pressure of liquidity we were able to make a sound decision as to what worked for us given our market.
Have you wondered how to acquire properties using other people's money?
Hands down this is on e of the most asked questions I get inside our community especially for those buying that first or second property.
Fining the money to be able to enter into the real estate investing game is no question one of the harder aspects of investing. There's no question that buying rental property has a high barrier of entry because in the most basic form, getting a conventional loan to buy a rental property results in having 20% of the purchase price to put down.
Over the last year we have been working with a local bank to build a relationship, starting with a secure line of credit, so that we could eventually get an unsecured line of credit to use in growing our rental portfolio.
What is an unsecured line of credit? In essence, an unsecured line of credit is like a credit card with a bank. You have a certain limit, say for instance $50,000, and you can draw on it any point. Once you draw some of the funds you will pay interest on those funds until you repay the amount you drew back to the line.
There is not a fixed payment structure, like a loan, it fluctuates depending on how much you draw.
When we talk about 'unsecured' this means that we did not have to put up any collateral to the bank, meaning we didn't have to deposit money into the bank or put up our properties to back the funds.
Since we built the relationship, the bank trusts us to use the line wisely for investing purposes.
In this week's show we break down what is a line of credit (both unsecured and secured), why we've worked over the last year to build up a relationship with a local bank and how we plan to use it in the future to help us with our investing portfolio.
It's hard to imagine what life was like before you could easily hop on the internet and book a condo or house rather than a hotel room while going on vacation.
While in the last few years, the rise of popularity for AirBnB and the like has become a way of life for travelers, for those who are on the investing side of the spectrum...this really can be a new strategy for building your rental portfolio and maximizing the profits that one property can actually earn.
This week's show welcomes Pedro Obregon, a real estate investor from Florida who is using the strategy of buying smaller multi-family properties (5-7 units) that were originally long term rentals and transforming them into short term rental properties where he can rent them out on a weekly basis in order to sometimes more than double his profits.
His strategy is an ever growing one in popularity, but definitely comes with important things to consider when dealing in the STR space. Things like turnover with tenants each week, financing options for these commercial properties, restrictions for zoning and more.
He shares with us how he got into investing, specifically with STR, and things we should consider if we are planning to try to add this type of property to a rental portfolio.
Learning from others who have gone before you is huge when it comes to reducing your learning curve.
And the same theory is true when it comes to investing in rental property. There are many investors who are out there sharing their knowledge and expertise so that others can be successful with less mistakes and failures.
This podcast episode is all about sharing tips for real estate investors.
In the show, I share 5 quick tips that can help investors, whether new or seasoned, become more strategic and confident investors.
When it comes to learning the niche of real estate investing, there's a lot of information that can often lead to analysis paralysis. Meaning that you spend all of your time learning and never actually taking action. Tip #1 is all about not trying to learn everything. Realize that you will constantly be learning throughout your journey as an investor and that what you need to know when you're getting started is really just the simple process to buying that first property. Obviously as you grow as an investor, you can begin to get more complex and creative; however, learning just the basics of what you need to know to make a great first deal will be critical to building the foundation of your success. In the show I cover: * Don't try to learn everything * Setting actionable goals for yourself * Sitting down with someone (in person/digitally) who invests already * Learning from others mistakes * Acting fast when something isn't working
"Someone’s sitting in the shade today because someone planted a treea long time ago."
As I read this I felt like it was something that related to many of us who invest in rentals. I know for Kirk and me, we began this investing journey 6 years ago and had big dreams of how it could impact our lifestyle goals. At the time we had been married for just about 2 years, I was in grad school and we were both working full time. We knew wanted kids, but that was still a little ways off.
While we had a great life and we're having so much fun...we couldn't help but look to our futures. We would often spend our weekends sitting at the local vineyards drinking wine and talking about our dreams.
I often think about those times now and I can't help but smile and think WOW....I knew we had these dreams.. ..but I didn't know if we'd actually reach them or if it was always just the wine talking!
Then we decided to start taking action toward these dreams of financial and lifestyle independence.
We took risks, saved like crazy, invested and made major sacrifices. We hoped one day that we would have a family and not be stuck in the life that many of us feel like we are stuck in...
...you know that one where we wake up before the sun comes up and get ready for work..
..while getting kids ready to go out the door and to daycare... ...we work all day long and for many of us in a job that we don't really like...but we do because it pays the bills ...then we pick up our kids from daycare around 5-6ish and in most cases have about 3ish hours to spend with them before they need to be in bed for the next day...
...not to mention everything you try and fit into those couple of hours at night...practices, exercising, dinner, homework, etc.
Before you know it it's the end of the day and you're mentally and physically exhausted...just to get up and do it again tomorrow.
We knew that was not the life we wanted. And so we did something about it.
It's true....when it comes to scaling your business as an investor landlord, while financially it can be a profitable and strategic business decision, there are some uglies that can come along with it. Anytime you are growing whether it be personal, financial, academic, etc. there are changes that have to be made and tweaks to current systems.
In this episode, Kirk and I talk about those 'ugly truths' from our own experience of scaling from those first initial properties to 15 units. While we know that this is a hot topic within our community and many newbie investors want to get past those initial first properties, it can indeed be a challenge. Time and money can become external obstacles, yet again, for the early investor.
We talk about the importance of time and accounting for management fees early on in your analysis so when the time comes you can pass on those properties to others to manage and still be making good cash flow. We also talk about the importance of systems and process and why eventually you may have to build a team.
When it comes to investing in rental property there are a number of things out there for you to learn and the truth is you can be inundated with reading books, listening to podcasts and reading forums.
Yes, I'm a big advocate for educating yourself and making sure that you know what you are doing before you throw your hard earned money into an investment...
...but at the same time there comes a point where you just have to take action.
In this week's episode we talk about three big tips to think about when you are investing in rental property...and they're not just for the newbies.
Even seasoned investors need to be reminded about not letting their emotions make decisions. I tell myself this often when we are looking at new projects.
We break down why you need to leave the emotion out of investing, why you shouldn't try and learn everything and the importance of asking for help when you don't understand something.
deal and going broke, so to speak, when we actually start investing in rentals.
Truth be told, I think this is a feeling most people feel when they invest their money into anything albeit stocks, bonds, cryptocurrencies, real estate, etc.
We all hold that money that we worked so hard to earn near and dear to our heart and the last thing we want to do is make a bad investment.
I know this was my fear when we got started.
Recently, we had a new member join our Private Facebook Group who asked this exact question..."how do I continue to buy property without going broke."
This is definitely a pain point for many in our community as I get asked about moving past that first property so many times by members. We work hard to save to buy that first property and we finally get over the hump of making the big purchase...
...and then we realize we want to do it again.....and also realize we have to save a boat load of money again to make that work.
Not necessarily.
You can continue to grow in a smart manner and that's what we share on the show today.
Yes...yes...yes...
I LOVE this question. Call me crazy but this question brings to light one of the things I get most excited about when it comes to investing in rentals....knowing your markets.
While there are so many of you out there who wonder this question and think about specifically when you hit the roadblock of not being able to afford to buy in your area.
I hear this from people in San Francisco, NYC and even the DC area.
True story...this exact problem happened to us when we bought our first rental.
WE couldn't afford to buy a true rental property where we lived...so instead of giving up...
....we started looking in neighboring towns and communites.
So if you've been asking yourself this question and wondering whether you should invest in your small town that you live in or the big city that you romp around in...
...it's a bit deeper than a simple black and white answer.
In the show we talk about the things that you should be considering and weighing in your decision of where you should invest.
Most importantly, it all comes back to numbers.
When it comes to both buying and selling property that has tenants in place, it can get a bit tricky for the landlord and investor. What's most important is that when it comes to this topic you need to understand that tenants have rights. Even if it is your property that you are trying to sell, you can't necessarily spring the news on your tenants the day the property goes on the market.
Especially if they are in a long term lease with you.
The biggest thing to keep in mind, in both cases, is that these are real people living in these properties and this is 'their home' so to speak. So coming in and selling and them having to potentially move can be met with some resistance. You want to remember to treat them like you would want to be treated.
Not to mention that there are state laws that require it.
Even when buying a property that has tenants in place, in most cases you can't come in and make a ton of changes to what's been happening right off the bat. Again, if long term leases are in place there's very little that you can do until that long term lease ends.
In this episode, Emily and Kirk break down both sides of this spectrum and share what sorts of rights the tenants have in each situation and how you need to think about making the transition as easy as possible for the tenants in place.
When it comes to investing our money, it's critical that we have a good understanding of what different options are out there for us. More importantly, educating ourselves on these options, whether we use a financial planner or not, is important because at the end of the day it's your money.
You should want to know what it is doing, what it is making you and if it's not what other options are out there for you.
While we are big proponents of putting money into real estate, I'd be lying if I said that's the only place we invest our money. As important as it is to diversify your rental portfolio, it's as important to diversify your entire investing portfolio.
In this episode, Emily asks Kirk (the Finance "dude") many different questions about investing in rental property vs. other asset classes like: stocks, equities, bonds and cold hard cash. Using the article, Real Estate vs. Stocks: Which has performed better over 145 Years, as a premise for the discussion, Kirk shares insights into the various investing paths including pros and cons of each.
We even question whether rental property investing is worth it in the discussion? So tune in to see what we decided!
Investing out of state is fairly hot topic when it comes to investing in real estate. Especially when it comes to those who like in super expensive areas, like San Francisco or LA. There are plenty that want to get started with investing in rental property but simply can't tap into their own market.
But that shouldn't stop them from pursuing financial independence through rental property.
The key is having a good team on the ground that you trust and are comfortable with.
Our guest this week, Jennifer Beadles, has quite the experience when it comes to investing in rental property. From buying her first property/rental at 21 she has grown into quite the investor and has experience with a variety of different niches within the rental property space.
From developing and building properties, to real estate sales, and now coaching and consulting with other investors she has a plethora of great tips and strategies to share with us all.
In this episode, Emily and Kirk really have Jennifer focus on her experience with property development and building out of state teams that enable her to invest in states across the country from where she leaves outside of Seattle.
When it comes to the topic of investing, it's hard not to see the word risk not too far from the conversation. We talk about risky investments and risk protection, diversifying risk and lowering risk. It's hard to not see those two words working simultaneously together.
Yet...what if we thought about risk in a new way.
I've recently been re-reading Gary Kellar's book The Millionaire Real Estate Investor,and he has a whole section where he breaks down myths around investing in rental property and combats those myths with truths. In particular he speaks about investing being risky. While we all believe that investing in rentals do have some sort of risk, he poses the argument that the real risk is what we, as investors, bring to the table.
In this episode, Kirk and I talk about this tweak in mindset and how valid it can be when it comes to investing in rental property because as the investor you do have so much control. Not only do you have control but there are so many knowns that it actually should be harder to make a bad deal than a good deal.
When it comes to getting financing for the purchase of a rental (or even a personal home) there are some things that are important to keep in mind that can hurt your ability to qualify or even close on the house.
The truth is these are common mistakes that are made all the time by borrowers because they just don't realize that these small things can really impact the qualifying process. Banks want to see a stable and reliable recent financial history and if you've got crazy things happening, it will most assuredly become a hindrance in the qualifying process.
In this episode, Kirk and I talk about three mistakes that are made often by borrowers and why to avoid them. Kirk shares stories from his time as a loan officer, even one where a loan didn't close because the lady bought a brand new car on the day of closing. We share these mistakes in hopes that you won't make them in your own financing process.
It's always inspiring to hear what other newbie investors are out there doing on their own investing journey and how they've managed to overcome those initial obstacles that hold us all back when we get started.
In this episode, Kirk and I bring on Freedom Check Club member, Ryan Ohri. He is a Law Enforcement officer in Nebraska who always had a knack and interest in finance and investing. While his day (and sometimes night) job keep him very busy, he's managed to begin his investing journey and by surrounding himself with like minded individuals grow to 3 properties in less than two years.
If one thing is for sure Ryan and his wife, Kristen, followed the slow and steady wins the race mindset. They started by paying off all of their debt, educating themselves on all things investing and rental property and then after spending months and months doing this, were able to set themselves up to buy that first property.
All in all, Ryan shares a lot about investing, financing, tips for newbies that he's learned along the way so far and above all else inspiration for others to get out there and take action.
I think it's safe to assume that at some points in everyone's life or even weekly routines there's a need for improving our productivity and consistency. We can easily get caught up in 'life' and lose focus on our goals and what we are trying to accomplish. As a result, it can be that much harder to get back on track.
The truth is all of us face this and while we don't claim to be experts when it comes to consistency and productivity (we can definitely improve ourselves) we felt that it was good to talk about these terms in relationship to investing in rental property and the journey that we are all on toward financial freedom and lifestyle independence.
In this episode, Kirk and I talk about some of the tips and strategies we use and have heard others using to help stay consistent in what we do and improve how productive we actually are. We dive deep into talking about the importance of really learning the basic skills of investing in rental property (similar to dribbling a basketball and shooting a foul shot). Once you've mastered the skills, it's easier to be consistent in your efforts which can ultimately impact productivity.
We've decided to spice things up a bit on the podcast over the next few months and bring you something brand new that we've never donebefore!
In this episode, Kirk and I bring on RentalRookie Pro member Michael Youssef for a live coaching call. We spoke with Mike about a variety of things related to investing in rental property and recorded it so that you could get a glimpse into the journey other newbie investors are on and what questions they are asking.
If one thing is for sure, when one has a question typically many others have that same question too. So bringing on current Pro members to get their specific questions answered to help them in their journey and allow you to tune in and learn along with us all is an exciting addition to the RentalRookie Podcast.
All in all, we talk about a variety of things like international investing, AirBnB, financing options, budgets and more.
As we enter into tax season in the US, it is definitely a topic that is in on many of our minds. Whether it be completing taxes for the previous year or starting to think ahead and make changes for our we keep track of expenses for the upcoming year. Either way it's something, as an investor, you need to be thinking about.
If you're a brand new investor, there are quite a few things related to owning rental property that can be deducted for on your taxes and you'll want to make sure that you are keeping great records of those expenses. I know when we first got started there were categories that we completely didn't track and it ultimately had us leaving money on the table.
Fast forward a few years and how many tax returns later and we've got done exactly what we should be tracking. Because in truth whether you own 1 rental property or hundreds it is a business and you need to track expenses and run it like a business.
In this episode, we talk about what you can expect with taxes including what a Schedule E is and why you need to complete it. We also break down each category on the Schedule E and spend some time talking about what each one means and what you should be tracking so when it gets time to do taxes you're not playing catch up.
Capitalization "cap" rate is one of those terms when it comes to investing in rental property that can be a tad confusing. With all of the different ways to analyze the return of a property, it can become confusing as to which analysis works for which type of property. In truth, cap rates are typically related to commercial real estate investing; however, it's still a good thing to understand for the small time rental property investor.
In this episode, Kirk and I break down and explain what exactly is a cap rate and how it allows you to compare properties side by side without a lot of "fluff" involved. Meaning, you can look at the raw income and analyze it against the property value in order to figure out a rate of return.
We talk about when exactly it works for you to use a cap rate analysis and how you shouldn't analyze property just with this calculation, but also look at things like cash on cash return and IRR. But as a starting point to compare various properties against one another, using the cap rate calculation can be a good place to start.
«Watch Our Training Video on Setting Parameters for Your Search» In the show we discuss:
=>what is a cap rate
=>when you can use a cap rate analysis
=>how it helps compare returns of various like properties
=>helps understand the associated risk with a property
=> and more...
When you are just getting started with investing in rental property, it can be overwhelming to choose what type of property you should invest in. You're questioning cost and maintenance. You're thinking about location and potential tenants. Needless to say, there is a lot on your mind.
In this episode, Kirk and I break down the two most popular types of properties that newbie investors start with: single family vs. multi-family. We aim to share with you what exactly these properties are and hope to clarify which one might be best for you.
We talk about the pros and cons of both types of properties and things you should be considering when it comes time to actually run numbers on to calculate potential returns. There are a variety of things that differ between the way you analyze a single family vs. a multi-family and we help break that down for you.
All in all, either property type is a great choice for getting started. It all comes down to where you are in your life at this moment, how much you have to spend and the type of inventory available to you where you plan to invest.
«Watch Our Training Video on Setting Parameters for Your Search» In the show we discuss:
=>what is a single family vs. a multi-family property
=>how running the numbers differs for each type of property
=>the pros and cons of each type
=>how financing differs between the two types of properties
=> and more...
As we are in the midst of tax season and the deadline for taxes to be done is around the corner, we wanted to share one of the strategies we used at the end of 2017 to help us acquire new property tax free.
In this episode, Kirk and I break down the concept of a 1031 Exchange. The IRS actually has this opportunity and it benefits investors so that we take profits from the sale of property and roll it into the acquisition of new property to help us grow as investors.
However, there are rules and deadlines that you have to follow to ensure that you do it the right way. In this show we share with you the rules, deadlines and outcomes of doing a 1031 exchange ourselves and what we learned along the way.
All in all, using this strategy we were able to take over $43,600 and roll it tax free into the acquisition of two new properties in our investment portfolio.
«Click here to Grab our FREE 1031 Exchange Cheat Sheet»
In the show we discuss:
=>what is a 1031 Exchange
=>the two rules that you need to follow in order to qualify
=>what deadlines you will need to work with in order to keep your money tax free
=>how we were able to take our funds and purchase two new properties
=> and more...
Yes you read the title right. We've recently gone through a water damage repair in one of our properties that could have cost us over $25,000 in mold mitigation and repairs. But because we had insurance....it will only cost us $1,000.
Insurance can often be one of those topics where a lot of questions arise and a lot of misunderstandings can happen.
In this episode, Kirk and I wanted to share with you the story of what happened to one of our properties (that we happen to own in a different state) and how insurance played a major role in getting the property back on its feet.
The property was in between tenants when our real estate agent walked in and noticed water leaking from the ceiling. She immediately called us and told us that this was a new leak, as she had been at the property a few days prior to this, and we would want to get it checked out immediately.
We never imagined the damage that one small little leak could have caused on this small 2 bedroom townhouse. The repairs alone cost 1/4 of the total cost we paid for the property.
Luckily, insurance was able to play a huge role in covering the mold mitigation and the repairs needed to make to the property after many of the floors, walls and kitchen were torn up.
In the show we discuss:
=>why you need to call an insurance agent immediately when something goes wrong
=>the importance of using local agents (real estate and insurance)
=>the extent of the damage that was in the property
=>how the whole process worked of using claims adjustors, paying checks and using contractors
=> and more...
Whether you own property already or you're looking to get into buying rental property, many people fear the dreaded stories that surround being a landlord. The "my tenant called me at 2 AM with a clogged toilet" story that inevitably many of us here when it comes to landlording.
And those stories often hold interested investors back from actually buying rentals.
But what's often left out from those stories is the back story of how that tenant got there in the first place. What processes and systems were in place to ensure that the best potential tenant actually got the apartment. And while most won't want to admit that maybe they didn't have the best tenant screening process in place...that's typically what leads to the "bad tenants" we often hear about.
No don't get me wrong...you can have a solid tenant screening process and bad apples can squeak through. That's inevitable. But the truth is when you have a process in place that helps you sort through your applicants to find the best possible one...
...in most cases you can end up with really great tenants who respect and take care of your property.
And that's what it comes down to for a lot of us. We put a lot of our money and livelihood into buying these properties and there's nothing worse than finding a tenant who destroys your hard earned asset.
In this week's show, Eric and Steve (from Rentprep.com) share with us some mistakes to avoid when it comes tenant screening. They share what they are seeing week in and week out from their community of landlords and what tips we can use to make our systems better.
When it comes to all of the things that you need to learn when getting started with investing in rental property, I'd be lying if it didn't feel like a fire hose being sprayed in your face! There really are so many moving parts and it's important that you take the time to understand the different parts and how they all work together.
The reality is the more knowledgeable you are...the better investor you'll be. Not only will you be more confident in your decisions, but you'll invest in better properties and hopefully make less mistakes. I mean that's really one of our main missions here at RentalRookie is to share with you what has worked and what hasn't so hopefully in your own journey we can help you avoid some mistakes we've made or almost made.
One major thing that I've learned in our own journey is that there's a bit of heavy lifting up front. What do I mean? When you're just getting started there's a ton to learn. You'll truly have to commit to learning and making some decisions. But once you've set your goals and learned the market you want to invest in...the process really is simple. You put into place a way to find deals and you watch for good ones to come up.
Then take action. And it's a rinse and repeat system. So while it may be overwhelming at first, know that it is not so much of a burden once you get over that hump.
This week's show is a bit different. I"m actually bringing you the audio of one of our recent LIVE trainings that we've been having in our Private Facebook Group. Each week I've been jumping in and doing a live training on various topics related to rental property.
In honor of Valentine's Day, we felt it fitting to talk about some of the things that we love about investing in rental property. Whether you are a newbie just starting out and trying to decided whether rental property makes sense for you or...
you're a more seasoned investor it's good to be reminded about the core principles behind investing in rentals and why they are so advantageous for people to use in their investing portfolios.
The reality is there are a lot of different avenues for us to take when it comes to building an investing portfolio. And while it's great to diversify and have different assets in your hand, it's hard to argue against the nature of rental property and how it can really be a predictable and stable investment.
Even if you're worried about taking control of your finances, which you do when you become a real estate investor, you have to realize the pros of bulding your portfolio with tangible assets that you can mostly control and know before you ever sign on the dotted line what it should make you each month and each year.
In the show we discuss:
=>how rental property is a predictable and stable investing strategy
=>the control that we as investors have over what the rental property does for us
=>how it allows us to build short and long term wealth simultaneously
=>the tax advantages to investing in rentals that we don't always "feel"
=> and more...
We've made it to Show 100 of the podcast and couldn't be more excited to continue to bring you practical advice and strategies each week on the podcast. Our mission with the podcast, over 100 episodes, has really stayed the same. We want to show you that regular people with crazy schedules and kids can be successful with investing in rental property. That you can begin with knowing nothing, spend some time learning and go out there and take action.
I hope that we continue to inspire you all each week.
To commemorate our 100th episode, we felt it would be great to share with you some reflections on our journey from when we started to when we began the podcast over 3 years ago to now. A lot has changed in our life to say the least and we have grown in knowledge and confidence in our investing journey.
We decided to share with you 4 things that in looking back we may have done differently or lessons we've learned along the way to hopefully give you some things to think about in your own investing journey.
If you can continue to take away at least one golden nugget of information each week from us then I continue to think of our mission here as a success.
In the show we discuss:
=>why we would have accounted for property management in our early property analysis (but that we're ok that we didn't)
=>really looking at the long term costs of acquiring older homes in our portfolio
=>using creative financing early in our journey
=>why we should have made more offers and not worry about offending sellers
=> and more...
If you haven't learned yet, there are plenty of different avenues investors can travel within the rental property investing niche. While to an outsider, it may seem like one direction. Within this niche, there are various types of properties and investments that can be made.
This was reinforced in this episode with Kevin Bupp, an investor for nearly 20 years, he shares insight into how he focuses on investing in mobile home parks across the East coast. An experienced investor, he has invested in single family homes, multi-units, apartment buildings and ultimately now mobile home parks.
Since he has been investing for so long, he shares insight into the crash and how that impacted his investing and why it made him take a shift in his investing journey.
Tune in for some great nuggets of information any investor can learn from.
In the show we discuss:
=>how single family homes and multi-units were a good place to start as an investor but lacked his ability to scale
=>he shares about his past as an "ok" student who started investing when he was 19
=>the importance of dedicating time to learning the niches within rental property investing
=> how "success is uncomfortable so get used to being uncomfortable"
=> how he plans to go from owning 1200-1300 lots to 10,000 in 5 years
=> and more...
It's always great to kick off the year with a fresh start, new goals and a positive outlook. It's a new beginning and many of us feel ready to take on the world.
However, without a plan it is easy to find yourself getting lost along the way and life getting in the way of those once grand plans for the new year. That's why it's important to have a plan and be strategic with the goals that you set. You need to make sure that you are doing more than just writing down a goal for the year, but thinking about how you can achieve that and what things you need to do each week and month to accomplish those bigger goals.
In this episode, we wanted to helped you start the new year off right by giving you 5 things that you can do now to get yourself on the path to that first (or next) rental. The tips we share are small micro-projects that you can complete in a fairly short amount of time but will give you a quick win and help you set up to getting to the point of being able to get out and view properties and potentially buy one.
If you want to learn more about this specific topic and these tips you can join me on a Facebook LIVE on January 17th or watch the replay of the training anytime.
In the show we discuss:
=>why you should complete a personal financial audit
=>Getting knowledgeable about investing
=>determining your why
=>Joining a community
=> and more...
We've been hinting for a while that this episode was coming because we've been excited to share it with you. Our very first rental property that we ever bought has gone full circle and we sold it at the end of 2017.
Rewind 5 years and when we first bought this property...we really didn't know much. Honestly, I knew nothing. Kirk knew a bit more than me. But we jumped into this rental property investing thing really only knowing how to run the numbers.
We didn't know how to manage tenants or even where to find them. We didn't know how to manage contractors or complete renovations. It was a total learning process for us both. And it's so fun to look back over the course of the 5 years we owned the property and see how much we've grown as investors.
I hope that this episode will inspire you to get out there and take action, even if you don't know everything yet. The power of rental property investing is truly life changing. And this story should help show this to you.
In this episode, we share the numbers and the story from when we first bought the property, the renovations we had to put into the property, the pipes bursting story and how we were able to sell the property with 0 days on market.
Remember if you want to learn more about buying rental property without a finance or real estate background join me on January 10th or 11th for a LIVE training. I'll be giving you a sneak peek into the brand new RentalRookie Pro Community too
We've made it to a new year! Wahoo! One of the things I love about the beginning of a new year is that fresh new outlook on a new beginnings. It's always exciting for me to get a clean start and take what I've reflected and learned from the previous year and move forward.
While Kirk and I get made fun of a lot for goal setting (yes, even by my family) we love it and are excited to share with you our big picture goals for 2018. The truth is we aren't really done with the actual goal setting process. We've made our big goals for the year, but we are actually still working on the weekly/monthly action steps that we are going to take in order to achieve our big picture goals.
In this episode, we share with you our two big goals for the year and why it's super important for us to be focusing on systems and processes this year. (Especially with a new baby coming)
We also share with you the new direction that RentalRookie will be going in 2018. While we have spent most of 2017 researching and redesigning the website as a whole and developing a brand new membership platform.
Our new Pro Community will focus on training, community and mentorship. We have a mission to help 100 of you buy rental property this year, whether it's your first or next rental. And we realized that we need a more user friendly site with more focused trainings to help us and you reach your real estate goals.
It always amazes me when we get to the end of yet another year and it's time to reflect and look forward to next year. Time is fleeting and if ever we need a reminder of that, the end of the year is always a good slap in the face of time keeps moving whether we do or not.
I actually love this time of year. I find it almost therapeutic to look back on the year and take time to reflect on the things we've achieved and the things that we missed. In fact, we all would probably be a lot more productive if we took this time once a month to reflect. But the reality is most of us really only find the time to do this at the closing of another year.
In this episode, Kirk and I discuss our 2017 year in real estate and how we actually missed most of our goals. But not because we weren't busy in the real estate world, we shifted our focus a bit and began going after other types of projects. For instance, we completed our first flip this year which took up a fair amount of time and capital. But it was a great learning experience and we are excited to share what we've learned on the process and to do it again.
One of the most important things that I think this episode will help you all realize is that we all miss goals. No one is perfect and we can't expect to be. But in taking the time to reflect and think renewed for the new year is critical to our success.
In the show we discuss:
=>what our goals were for 2017
=>how and why we missed some of the goals
=>plans for goal setting in 2018
=> and more...
This year we definitely stepped out of our comfort zone with our flip project that we completed throughout the middle part of the year. While it was something we always wanted to do, there were a lot of new things we had to learn because we've only been buy and hold investors.
While there was a bit of a learning curve, we enjoyed the process so much that we have just bought our 2nd rehab project. With this new property, we are excited to be embarking on our second flip project and to put into practice some of the things we learned from our last job.
Even though we do enjoy the total rehabbing of properties to see them become a new, clean ,modern home again....we definetly are not leaving the rental property niche. That is our bread and butter and just as we purchased this new flip project, we've closed on one duplex and our under contract for another one in the last two months of the year.
In this episode, we share with you how we were able to get the property for only $30,000 when the seller was asking $80,000 and how our new shift in mindset enabled us to feel confident enough in offering a price that low.
In the show we discuss:
=>the importance of making offers that work for you (even if they're really low)
=>the process of negotiating a deal with a for sale by owner
=>what we plan to do with the property
=> and more...
As we come to the end of 2017, it's inevitable to not be thinking about or hearing people talk about goals for 2018. Whether it is on the forefront of your mind or lingering in the background, it's something most of us are thinking about at this time of year. It's an exciting time because it's a time for us to get a fresh start and have a new, positive outlook on what we can accomplish in the next year.
However, we want to help you get started on those goals NOW. In this podcast episode, Kirk and I share 3 actionable things that you can do in these final 3 weeks of the year to help you get a jumpstart on the new year and your new goals.
There's nothing like starting the year off knowing that you already took some baby steps toward accomplishing your short and long term goals for investing in the new year.
We share with you why you should get a budget App or software that helps you know where your finances are in your own house before you buy an investment property. The importance, as a seasoned investor, to "clean up your books" and look at what your properties actually made you this past year. Lastly, we talk about taking the time now to set up 3 appointments for January with agents, lenders, insurance agents, lawyers, investors, etc. so that when the new year comes, you already have these set up and are ready to take steps toward those goals.
When you're just getting started with investing in rental property, most newbies are out there putting in the hard work and 'sweat equity' to keep as much money in their pocket but have a nice property. In today's podcast episode, Kirk and I talk about what sweat equity is and how while it can be beneficial for the rookie investor it can put a major hinge on growing a rental business.
Obviously when you're just getting started and you don't have a lot of extra cash, you'll have to put in the time at your property making repairs, getting it rented, painting, etc. And I think on the first property that's a good thing. There's a lot that you can learn from putting in hard work and stepping out of your comfort zone.
The reality is when you decide that you want to scale your business and grow as an investor, time is limited and you won't be able to be putting in all of the sweat equity at every property you purchase.
So there comes a time when you have to think about your own time and how much that's worth. What are the higher level things that you can be doing as the investor and where you should be spending your time.
When it comes to investing in rental property, there has to be a mindset shift. While one is going through the act of buying a property; it is a very different experience than buying a home you're going to live in. They way you look at the property, the questions you ask and the way you run the numbers all differs and it is imperative you understand the thought process that goes into buying and analyzing a potential deal so that you don't make a bad mistake or overlook an important detail.
With that said, this week's podcast episode is all about allowing you a glimpse into the conversations, questions and mindset of Kirk and me as we break down a current deal we are looking at. We find it really important to share these candid conversations with our community because these are discussions that can't be taught in a course. You have to experience these conversations, listen to them and take the nuggets of information that can help you in your own investing journey.
We felt this deal was interesting to share because it can show you the importance of going out of your comfort zone, as this deal is definitely out of our investing comfort zone. But without viewing these properties and having these conversations with current owners, how are we to grow as investors
There are a lot of strategies that an investor can have in their investing toolbox. These strategies help make an investor more savvy and confident. A fairly popular strategy used by both rookie and seasoned investors it to buy a property that is below market value, do some repairs to force appreciation, so the value of the home goes up. Then the investor has instant equity in the property and could potentially even take cash back out of the property to roll into a new property.
In this episode of the podcast, we talk about what is forced appreciation vs. natural appreciation. The concept that natural appreciation is really the natural trajectory of the real estate market. It may take years for a property to naturally appreciate in value due to market conditions. On the flip side, by forcing appreciation in buying low and making some repairs, you can find that it can be rather easy to force some appreciation to a property.
We share the case study of one of properties that we used this exact strategy for (and it was our very first true investment property that we bought). We bought the property, distressed below market value. We spent about two months, on weekends, repairing the property to get it ready to be rented. It was rented immediately after we were done repairing it and after about 8 months we did a cash out refinance and took nearly 70% of our initial investment back out of the property so we could roll it into another deal.
The best part about this strategy is that it is pretty simple. You need to know your market you're investing in to know if you're getting a property below market value, but any investor-seasoned or newbie- can find success with this.
We're really excited to share with all of you that we bought our first ever piece of real estate from an auction. We recently (and I mean two days ago) attended a live auction and had the top bidding amount. What was crazy was that we didn't walk away with the property that night....even though we were the highest bid.
Yes, anyone that is familiar with an auction might think this sounds a bit odd. And it was for us, for sure. Despite us having the highest bid, there was a "seller confirmation of price" condition that went along with the auction. Meaning that the sellers basically had to approve the bid.
Even though we were the highest bid. They didn't approve our price. So it took some strategy and the ability to walk away to help us win the deal.
Tune in to learn how we were able to secure this new duplex for our rental portfolio.
In the show we discuss:
=>the importance of setting your goals with numbers before you go the auction
=>how we used strategy to help us win the deal
=>what we learned from this experience
=> and more...
It's the final show of our week long podcast blitz bringing you some of the biggest questions, challenges and obstacles that are coming out of our awesome RentalRookie Community.
In this episode of the podcast, we were asked a pretty common questions we hear among newbie real estate investors: how do I get my spouse on board with investing in rental property? It's no surprise that when many people, including couples, get started down this journey, one of the pair is not as in to the grand idea as the other.
That was definitely the case for Kirk and me. Kirk was ready to jump right in, with his finance and mortgage background. Me, on the other hand, I was not so excited about it and couldn't wrap my head around what the concept actually meant for us financially.
It definitely took some creative thinking on his part and patience and eventually I came around. And we've seen that happen with others in our community.
Kirk and I share some tips to consider when trying to get your spouse on board to hopefully bridge the gap between the two perspectives.
In the show we discuss:
=>know when to approach your spouse at their most open time of speaking (me in the morning)
=>finding something in the process that they enjoy and have them focus on that
=>the importance of having a supportive spouse, even if they're not interested in being hands on in the investing itself
=> and more...
It's show #6 of our week long podcast blitz bringing you some of the biggest questions, challenges and obstacles that are coming out of our awesome RentalRookie Community.
In this episode of the podcast, we were asked a number of questions regarding landlord insurance policies including:
-
What deductible do you normally go with to balance premium costs with coverage benefits
-
Replacement cost? Or something like 80% replacement cost to lower premium? Or just enough to cover mortgage?
-
What companies have you found good rates with on multifamily units?
-
Is there a certain percentage of rental income that you should aim for your insurance premium to be? Or just different on every property?
We know, insurance can be a tricky topic and one that we tend to maybe not master as much of the other info out there. But insurance is critical to have on your properties because when you need it, it can save the day. It just recently covered a $12,000+ water leak in one of our properties that would've killed our cash flow on that property for two years.
So lots of ideas you won't want to miss are in this one.
In the show we discuss:
=>how having insurance just covered thousands of dollars of damage in one of our properties
=>companies to look to get insurance through
=>what type of replacement cost insurance you should get on a property
=> and more...
It's show #5 of our week long podcast blitz bringing you some of the biggest questions, challenges and obstacles that are coming out of our awesome RentalRookie Community.
In this episode of the podcast, we were asked a number of questions regarding utilities as a landlord. This is definetly a hot topic and one that is important when it comes to running a property analysis. And the truth is as a newbie investor, there a variety of things mentioned in this show that you might not have thought about.
We discuss the pros of having the utilities separated (in multi-units) so the tenants have to cover them. We also talk about other ideas that we and people in the RentalRookie community have done, such as charge a higher rent and include the utilities in the rent. We had one individual share the idea of calling the utility companies and getting two years of data on the utilities and coming up with a set amount that the tenants pay each month to the landlord to cover utilities.
So lots of ideas you won't want to miss are in this one.
In the show we discuss:
=>why having separate utilities paid by the tenant is usually the easiest & keeps money in your pocket
=>calling utility companies and getting past data to come up with an accurate and fair utility cost for tenants.
=>charing a higher rent each month and just including the utiltiies
=> and more...
It's show #4 of our week long podcast blitz bringing you some of the biggest questions, challenges and obstacles that are coming out of our awesome RentalRookie Community.
In this episode of the podcast, we were asked 'how do you calculate risk and determine financial ability'? Great topic and question for newbie investors wondering whether or not they can buy a rental property and just how much risk they should be thinking about when it comes to investing in this tangible asset of real estate.
One of the easiest ways to find off market properties, meaning non-MLS listed properties, is to simply pay attention when you're driving around your town, or walking your dog, or out for your run. I'm an avid runner and while I'm out running I'm also scouting potential properties. There have been many times I've stopped and taken a picture of a For Sale By Owner home sign. You also can see what properties are distressed and look vacant if you keep an eye on them.
We share this and much more on finding off market properties.
In the show we discuss:
=>how financial ability relates to down payment and reserves & the importance of cash
=>having cash is key when it comes to unexpected expenses
=>figuring out where your starting point is (i.e. extinguishing debt)
=>how real estate is an asset and while it is debt it can help you eliminate other 'bad debt'
=> and more...
Welcome to show #3 of our week long podcast blitz bringing you some of the biggest questions, challenges and obstacles that are coming out of our awesome RentalRookie Community.
In this episode of the podcast, we were asked 'how do you find off market properties'? The truth is it's not as hard as you think. While it can sound overwhelming to buy absentee lists of people or vacant home lists and send mailers, the truth is there are some easier ways to find these properties when you're just getting started.
One of the easiest ways to find off market properties, meaning non-MLS listed properties, is to simply pay attention when you're driving around your town, or walking your dog, or out for your run. I'm an avid runner and while I'm out running I'm also scouting potential properties. There have been many times I've stopped and taken a picture of a For Sale By Owner home sign. You also can see what properties are distressed and look vacant if you keep an eye on them.
We share this and much more on finding off market properties.
In the show we discuss:
=>Paying attention when you drive around your town
=>Look for vacant homes or distressed properties in your community
=>how to find properties listed on Craigslist
=>looking at Facebook Marketplace or 'For Sale' groups in your town
=> and more...
This show is day #2 of our week long podcast blitz bringing you some of the biggest questions, challenges and obstacles that are coming out of our awesome RentalRookie Community.
In this episode of the podcast, we were asked 'how to get you acquire the market knowledge in order to make a confident investment? This is a great question and one that is relatable to any newbie investor. The truth is gaining market knowledge, specifically of the market you are planning to invest in, will take some time.
You can perhaps fast track it a bit with the help of a trusted realtor; however, it's going to take some old fashioned research and due diligence to really learn the ins and outs of a market to know whether you want to invest in. The good part is once you complete the 'market audit' (as I like to call it) you just have to maintain your knowledge and keep a pulse on the market, so it's hard work up front.
We share why and how you need to become a student of your market so that you make the best investment possible.
In the show we discuss:
=>the importance of becoming a student of your market
=>why you should run a market audit of any community you plan to invest in
=>the importance of learning what properties list for, close for and rent for in your market
=>what sorts of industries, entertainment, population growth or lack thereof is going on in your market
=> and more...
We are back on the podcast and coming to you with a week long Podcast blitz dedicated to discussing some of the biggest questions, challenges and obstacles that are coming from our RentalRookie Community.
As we start to near the end of 2017, it's a time to push forward with trying to reach those goals we set back in the beginning of the year. And if life has gotten in the way, as with many of us, we are here to help get you back on track.
In this episode, we are discussing one of the major fears that nearly all newbie investors face: will I be able to cover the monthly holding costs with the rent?
While this is a fear that everyone faces, it can easily be overcome with educating yourself on the market and on how to accurately analyze rental properties.
The cool thing about investing in rental property, is that you should know, when you buy, whether a property will make you money and have a pretty good idea what amount that property will make you each month.
You're not throwing money into a stock hoping that it will go one way or the other. You can predict with real numbers and past information what the property can make you.
So tune in and we'll share with you how to overcome this fear so that you can start making money with rentals.
The cool thing about investing in rental property is that there is always something new to learn. Whether you view this as a positive or a negative, as investors we must be open to learning and ready to take some of the unexpected when it happens. While we can run numbers to ensure a good return, spend hours on due diligence of a property and a town and screen the heck out of our tenants....sometimes there are still things that can come up that will eat into cash flow.
In this show, Kirk and Emily share a recent experience they had in a community they invest in. This blue collar, old town is finally putting in an actual septic system. Sounds great, right? Well, homeowners in the town have to front the cash in order to hook in their current sewer lines into the new system. In some cases, depending on where your current sewer lines run, it could cost thousands.
Tune in to hear what we learned and how we now will ask about community infrastructure when we research properties and new communities.
In this show, Kirk and Emily share their authentic, candid conversation about whether or not to pay off of one of their properties. While there are many things about investing in real estate you can learn through us at RentalRookie or other great sources online, you don't often get to hear the "behind the scenes" conversations that take place about strategy and investment.
As we were about to sit down and talk about this very topic, I immediately stopped Kirk and said "let's record this conversation for the podcast. Then people can hear what our conversations our like when it comes to making decisions about what to do with our property and money."
Our hope is that this conversation will help guide you in your own investing journey when it comes to thinking about the big picture of your entire investment portfolio.
When it comes to selling a property from your portfolio there are a lot of factors that investors must consider to ensure that they are making the right choice. In this episode, Kirk and Emily share the details from the recent sale of their first property from their rental portfolio.
They share the importance of "selling when you don't have to sell" and how paying attention to the current market trajectory should play into your decision of whether to sell you property.
In addition, they share some tips about selling a property that you may have house hacked in order to avoid paying capital gains tax on your profits.
In the show we discuss:
=>how we bought the property with no money in the deal
=>why we decided to sell the property
=>how you can avoid capital gains tax on profits of primary homes (house hacking)
=>the strategy behind selling a property
=> and more...
Pets can be a hot topic when it comes to landlords and tenants. Those who have pets will most assuredly argue that they are part of the family and will go to great lengths to ensure that the pets are as happy as they are in a home.
While many landlords will want to stand clear of allowing any pets in their properties for fear of the destruction that a pet may do to a home.
No matter what side of the fence you are on in regards to pets, there are always particular questions that come up and landlords need to be sure they know the right laws.
Especially when it deals with service pets.
In the show we discuss:
=>how some pets aren't allowed in properties because of association rules
=>why you have to allow service pets in your rentals
=>your rights to say no to pets as a landlord
=>and more...
Show77: Our First Flip- Part 2 Analyze Potential Properties For Cash Flow so that You Don’t Make a Bad Deal Grab our FREE Property Analyzer
What You Need to Know About Contractors If you tuned in to Show 74 then you know that we are stepping out of our comfort zone and working on our very first flip. It's been an exciting journey and so far, really enjoyable. We purchased the property for cash and jumped right in with interviewing contractors and getting the project going.
Throughout the 3 months we've owned the property there's been a lot that has happened. Whoever eventually buys the property will essentially get a brand new house on the inside. We've replaced floor supports, electrical, HVAC, and more. When we bought it the property had no floors downstairs and walls were ripped out due to busted pipes.
So it's been a project. And honestly it all went pretty quickly until we ran into inspection times. Honestly, inspections took up about a whole month of time. Between scheduling them and the contractor fixing a few things that needed attention. Then, we needed a more advanced inspector due to us changing the floor plan of the house.
But we're happy to announce that we are moving forward and we are to the point of drywall. Which means it will really start to look like a house now. And we'll get to see if our design ideas in terms of changing floor plan work when there are real walls.
Investing in rental property is an avenue that is not for the feign of heart. And while it is not as 'glamorous' per say as flipping houses, it can be a steady and stable way to invest for short and long term wealth.
There's a certain amount of control that comes to buy and hold investors that allows them to sleep at night and know that there money is working for them and their future. While investing in rental property is definitely a risk (as is any investment) the appealing thing about rentals is that if you know how to find good deals and run the numbers right, then you should go into each investment knowing that, unless catastrophe strikes, you will make money.
In this show, Kirk and I decided to go back to the foundational pillars of investing in rentals. What are the major pieces of the rental puzzle that attract people to choosing this slow and steady road? We break down how principal pay down, tax deductions, cash flow and appreciation offer buy and hold investors multiple beneficial perks to rentals.
In the show we discuss:
=>how tenants pay down your loan month every month
=>the benefits of tax deductions for real estate investors
=>how you can make cash flow each month from your rentals while building long term wealth
=>how you can invest in hot markets for appreciation and make some cash or invest and force appreciation to gain instant equity
Working with contractors can be an intimidating and maybe even scary thing for a new investor. Whether you are planning to use a general contractor for a renovation you need to complete on a new rental or just plan to use a few sub-contractors to tackle a few jobs on your reno, it can be scary.
You might not know what questions to ask, or where to even find a solid contractor to work with. There are so many horror stories out there of contractors up and leaving after being paid some money or contractors who just never finished a job that they started.
I'm not going to say these things don't happen, but on this week's episode we want to share with you some tips we've learned through our own experiences of working with contractors.
Especially now that we are working on our first flip project that is being completely done by contractors we've learned even more that we feel is important for you to know.
In the show we discuss:
=>how to find reputable, insured contractors that you can trust with your property
=>How to go about getting a bid from a contractor & what you should expect at walk thrus
=>Why you should set up a payment schedule for your contractors that keeps everyone accountable for the project
There's something invigorating about stepping out of your comfort zone. For those of you who have followed Kirk and I are on investing journey, you know that our sweet spot is rental property.
We love it. Truly buying rental property is a system that you follow. You just find the property and plug the numbers in the system and it either meets your ROI standard or it doesn't. It's pretty black and white.
Rental property has given a lot of financial success and freedom to us in our life.
But we've always had the desire to try a flip. Not that we want to stop going down the rental property road. The ability to build short and long term wealth rentals is something you can't find other places.
Yet, we've had the desire to take a property from nothing to a home for someone. So when we had a property come on the market for $25,000 in our town, we knew the opportunity was here.
And we jumped on it.
We won the multiple offer situation and we are off to working on our first flip.
In the show we discuss:
=>how we found the property
=>why we offered more than $10,000 more than asking price
=> how we spent the 2 weeks prior to closing
=> where we are now in the process of our first flip
Getting started with rental property is typically a pretty scary step for newbie investors. We all assume the worst and fear the new responsibility of taking on total control of our investments.
As a result, we tend to put it off. The truth is, putting off buying that first property is only making your timeline of being able to make your money work for you longer.
In today's show, Kirk and Emily share with you how when you buy your first property, the clock starts on the two year timeline of being able to allow your cash flow to help you qualify for future properties.
The biggest take away from the show is that getting started now can help that timeline get started and help you get on your way to growing your portfolio.
In the show we discuss:
=>how your cash flow can help you self-qualify
=>why 2 years of tax returns are required before your debts start working for you
In today's show, Emily and Kirk share the real numbers behind their entire rental portfolio. From their total value of their portfolio to their total equity, their total cash invested and ROI over the course of the last 5ish years.
They share that when they started investing in rental property, they weren't given a bunch of cash. They had to make sacrifices and smart financial choices and save. This enabled them to save for their first down payment on their property.
During the show, they talk about the reality that most newbies have to overcome the idea of 'fear of control'. The truth that when you invest in rental property you will now be the one who makes or breaks the success of your rentals. There isn't a stock market or financial planner to blame.
The biggest take away from the show is that investing in rental property can truly be a path for anyone to reach the financial goals and have life flexibility.
In the show we discuss:
=>total value of our rental portfolio
=>total equity for our portfolio
=>total cash we have invested
=>the ability to snowball profits to grow portfolio
=>total ROI over our entire investing career
=>overcoming the fear of control
Emily breaks down the concept of return on investment in order for rookie investors to understand the importance and magnitude this number can play in the investing niche. I shares how when we first got started I couldn't quite grasp the concept of comparing the amount of money put into the property and comparing that to the amount the property made.
I just focused on the hard cash that the property made.
And there's more to it.
I also talk about why it's important to understand how ROI can allow you to compare investing strategies across different investing niches and how it truly can level the playing field to help you decide what type of investment is best for you.
Today's show is the raw, unedited audio of our live training from Day 2 of our challenge of analyzing rental property for cash flow. In this training, Emily breaks down and explains each of the numbers you need to include when running an analysis on a property. She breaks down what numbers you'll need for a quick analysis and a more detailed one.
Even more, she walks through looking at a listing and the mindset & questions that can arise based off of information that is listed on a listing.
Today's show is the raw, unedited audio of our live training from Day 1 of the challenge. In the training, Emily breaks down many of the terms & acronyms that surround the rental property investing niche. She explains with details and examples some of the most confusing terms so that you can talk the talk of rental property investing.
There's a lot of truth in Mark Cuban's quote "I learned how to be wealthy because I asked the right questions when I was broke." Asking the right questions is often overlooked and in truth I see it as quite a skill.
We can not learn anything by ourselves and need the help and expertise of others to help propel us forward in the areas we are looking to grow.
So, Kirk and I decided to change things up this week and bring to you a raw, unedited show that is a recording of a recent Live Q & A call that we had with some new investors.
While it's great to have interviews and insights from Kirk and I, there's a lot to be learned from listening to others ask questions. While it's fun to be the one asking the questions, sometimes there are things that we don't think about that others do and allow us to learn from their own thinking.
So we are bringing you this live Q & A call in an effort to help you think outside of the box and broaden your scope of thinking when it comes to investing in rental property.
In this show we discuss:
- umbrella policies
- pet deposits
- home warranties
- recognizing market trends
- 1031 tax-deferred exchanges
- flipping vs. rentals
- unsecured/secured lines of credit
- restructuring private money loans
- tips for keeping good tenants
- and more...
Nothing is more inspiring than hearing the story of how a rookie investor buys that first property. On this show, we bring on Josh Sounder, a real estate agent and now investor from Nashville, TN. He shares his story of what it took to finally take action and why he feels one of the most important things for newbie investors is to stop analyzing and start acting.
Josh shares how he found the property, what financing option he used and what it's been like self-managing the property. Not only that, he shares what things he would have done differently looking back on the acquisition of the property.
Tune in to hear the exact numbers and what type of return Josh and his wife are making on the property.
In the show we discuss:
- How he found the property
- Why he was making 10ish offers a day before he found this one property
- Using a cash out refinance to help acquire properties
- Why tenant screening is huge to finding great tenants
- The importance of newbies avoiding the analysis paralysis mindset
- The exact numbers Josh is seeing with this property (20%ROI)
- and more...
In 2017, we are trying to broaden our topics that we discuss on the podcast, including areas that we are ourselves are not all that familiar with. We feel like we owe it to you, to cover all aspects of investing in rentals even if we, ourselves, don't have a ton of experience with it.
In this episode, we invited Brandon Bennett on to chat with us about how he really tripped into investing in rental property, specifically commercial and multi-use buildings.
By multi-use we mean both commercial and residential rentals. He shares how he just happened to make an offer and get it accepted on the first property and how that first property led him down the path of commercial rentals.
Now, he has 6 buildings and 4 plats of land in his portfolio.
He also shares some insight into finding financing for his commercial buildings and what the terms of the financing looked like for his purchases. In addition, Brandon shares how he has leveraged investing with a partner and what the structure of that partnership looks like.
Wow! What a show to kick off 2017. In this episodes, we talk with Troy Peterson, long time real estate investor who has been investing for 10+ years.
It was such a treat to have him on the show because he breaks down private lending in easy to understand terms. As an investor who has only used private lending to fund his deals, he shares great insight into where to find private money and how to structure those deals.
None of his rentals have ever been purchased with traditional financing.
He brings so much value to the show in shedding some light on the mystery of private lending. TO be honest, we hope that you learn from the questions we ask because we wanted to learn a lot about it as well.
Not only does Troy bring us a ton of great information on the lending side, he also shares some insight into investing out of state. How he finds deals and why he finds it important to actually go and view the properties and areas himself.
Having 'boots on the ground' in the out of state properties is definitely critical to finding success.
Welcome 2017! We are excited to be here with you for another year of our real estate investing journey. It's been an exciting couple of years and we can't wait to get started with what we have in store for you this year.
We're kicking off the podcast in 2017 by sharing with you our real estate investing goals. We want to be as transparent as possible and let you see exactly what we are shooting for this year. It's important for us to put our goals out there so we are not the only ones holding each other accountable.
We want to be accountable to you.
This show will hopefully inspire you to sit down and take some time to think about your own investing goals and to put goals to paper on what you want to achieve this year.
ON the final episode of 2016 Emily and Kirk reflect back on the goals they set for themselves and they real estate journey. They share with you what goals they hit, which ones they missed and why and whether or not you should roll the goals over into next year or adjust them accordingly.
Tune in to see that everyone, no matter who you are, doesn't always hit your goals!
When you're looking to get started with investing in rental property, there are so many different paths that you can take to acquiring that first property. It's easy to get distracted in has a lot of content, books, podcasts and TV shows related to teaching newbie investors the ins and outs.
We've learned through our own investing experience, that there are 6 major pillars that you need to work through when looking to acquire those initial properties. Each of these pillars is pivotal to your success in finding a good property, at a good price in a good community.
In the show we discuss these 6 pillars:
- Laying the Foundation with Goal Setting
- Getting your financing in order first
- Understanding your ideal markets you wish to invest in
- Knowing how to analyze properties
- Completing your due diligence on properties
- Understanding offers and negotiations
As a rookie investor, it seems like there are a million things that you need to learn. It also can feel like there's a million resources out there telling you what to do. The problem can come with dissecting the information and deciding what's valuable and actionable advice and what's not.
With our hyper focus being on the rookie investor, we wanted to share with you 3 of the most popular misconceptions we see. There are a lot of people out there sharing their "wisdom" with others and while sometimes it can be helpful, other times it can make us feel like we can't achieve this thing of buying that first property.
Real estate investing can seem overwhelming at times. Especially if you are investing part time while working a full time job and are busy with your family, friends or hobbies. That's why we decided to share with you these 6 hacks that you can use in your own real estate investing.
These hacks allow you to get your properties in front of the right people to get rented, allow you to easily keep track of mileage for tax time, avoid getting 'petty' calls from your tenants, pay off your mortgage faster, not get stood up at showing appointments and only look at properties that truly meet your goals and standards.
Hey Rookie Investors...this show is for you.
In show 59, we break down the deadliest sins that rookie investors make when it comes to analyzing property. We know because we've even committed some of these sins and learned through trial and error how to avoid them.
When you're just getting started with investing in rental property, there are a lot of things that you have to learn and it can be extremely overwhelming. In a lot of cases, you may overlook little things here and there just because of the lack of time to dedicate to making sure you "dot your i's and cross your t's".
We share with you why you need to spend time researching the rental market you want to invest in, even if it is the town you live in. Looking at the market and community as an investor is a little bit different than from someone who owns a home and you have to make sure that the numbers work.
In addition, we talk about the importance of "trusting but verifying" numbers related to deals. Don't believe everything the you see. Ask for documentation to verify the numbers related to a deal: rental incomes, expenses, taxes, insurance, etc.
While enjoying our summer as a family, we decided to start researching the vacation rental niche. We have always talked about adding a vacation rental to our portfolio, not just for the investment acquisition, but for our own family use.
This summer we took to our vacation spots and met with realtors and viewed properties to really see what was out there in terms of investments and whether it would be a wise investment for us.
Being an investor is a lot like being a teacher; you need to have many strategies in your investing 'toolbox'. If you do, then you will be able to get creative with the way that you buy, manage and liquidate properties. Today's show focuses on one of the strategies we recently used that enabled us totake out over $33,000 from one of our properties.
As a result of this cash out, we know own the property with none of our own money invested in the property. Which means our ROI (return on investment) is infinite.
The cash out refinance strategy is one that can be used in multiple avenues of real estate investing, but can be extremely beneficial in the rental property niche. By buying a property below market value and forcing some appreciation into the value along with the regular market appreciation, you can go back and refinance equity cash out of your property.
That money can be used to buy another property, pay off a property or invest in another avenue. Either way, this strategy can offer a lot of opportunity to the buy and hold investor.
We just used this strategy, for the second time, with one of our properties and were able to take out cash that we plan to reinvest into another property to continue to grow our portfolio.
If you're interested in rental property, most likely you are interested in the passive income that can be earned from your investment. Whether that it is a huge reason for your investing or only a minor one, the reality is that there is a huge opportunity to earn cash each month from the properties you rent.
When analyzing deals to determine whether you should make an offer, often we focus so heavily on the hard numbers of the property to determine if it is a good deal: price, insurance, taxes, utilities, interest rate, down payment, rental income potential, etc.
In NO way at all am I discounting the importance of these numbers. Running the numbers on potential deals is extremely important to ensuring that you don't throw your money into a bad deal.
However, there are other areas where you are earning 'cash flow' that you might not see in your bank account every month, but makes an impact on your overall investment and return.
Depreciation, mortgage interest reduction and principal pay down are three major pieces of the real estate investing puzzle that you should also consider when analyzing a potential deal.
In today's show, we break down how these three important, but often overlooked, elements of a deal play into the overall analysis of a property.
Today's show is geared to the self managing landlord. So whether you are currently managing your properties or plan to in the future, we discuss some of the most important aspects of tenant screening to ensure that you are choosing the best tenant out of your application pool.
Tenant screening can be one of the most intimidating aspects of landlording because it is the process by which a landlord chooses and turns over his/her investment to another. Many times, rookie investors may rent to the first person that shows interest because they want to be getting money back into their pocket as soon as possible. What's important to understand is that in some cases it may be better to hold out for a good tenant then to let anyone in your property.
In the show we discuss,
- The important of tenant screening
- verifying employment
- Running a debt to income ratio to qualify
- criminal background checks
- why you must actually call the references and previous landlords
- and more...
For anyone that has listened to the show for a while, you know that goal setting is a big part of our lives. We have goals for real estate, other businesses and personal lives that we set every year. The reality is that unless you frequently check your goals you're not going to be successful. Even more important is sharing those goals so that you can be held accountable.
In Show 54 we take some time to do a 'mid year check' on our goals that we set and shared with you at the beginning of 2016. Despite having some minor distractions- the birth of our wonderful daughter Anna- we discuss how we are doing on our journey to our goals and how we have shifted some of them to meet more of what we see fitting in our real estate journey.
We are excited to be back after our brief time away after our daughter was born. In show 53, we share with you the details of one of our deals that we closed in 2016. Before Anna was born, we bought another duplex in the same town as our other multi family property. We decided do buy another investment in this town because of the large rental pool of tenants that we experienced with the previous duplex we bought.
The process in acquiring this property was slightly different. The property was an estate sale and we actually walked away from the deal after we made our first offer. We learned and hope to share with you that patience is key when you know your numbers.
In the show we discuss,
- Why we waited to make an offer on the property
- Why buying unique properties can be detrimental
- The actual numbers that make up this deal
- How we structured our partnership deal
- and more...
We are excited to bring you this show as it talks about how one of our main goals for 2016. In Show 52, Kirk and I, discuss the pros and cons of partnership deals. We recently have closed on two properties and both were partnership deals with different partners.
Throughout the show we talk about why partnerships may be good a idea for rookie investors, especially when partnering with a seasoned investor. This can allow you, as the rookie, to take the plunge while learning from someone with experience.
One of the most popular questions we hear from lots of listeners and our members of thePrivate Facebook Group relates to Investing in multi family properties. Kirk and Emily share 3 ways that any individual, rookie or veteran, can go about investing in multi family properties.
Whether you plan to live in one of the units to ensure little money out of pocket, pay cash and refinance your money out 6 months later or use traditional financing to buy it as a sole investment, Emily and Kirk share tips on these 3 different avenues to buying multi family properties.
Are you also wondering how to improve your credit score. This show actually can be beneficial to anyone who is looking to make some gains with their score, even if it's not for investing in real estate. The question how do I improved my credit score came from our Private Facebook GroupandEmily and Kirk share 5 quick and easy ways to get your credit on the road to improving.
You can get started tomorrow by simply keeping the number of credit cards to a small number, keeping older accounts active, maintaining low balances and more. Tune in to the show to hear all 5 quick tips. PLUS...download our free checklist that reminds you of these quick and easy tricks to improve your credit and get you on the road to obtaining great terms with financing.
Are you in the same boat; wondering how to qualify for financing without a salaried job? Have you even thought about whether or not that can affect your ability to obtain financing? Not having a salaried job can most definitely impact whether you can or can't obtain traditional financing from a bank. This question, from our Private Facebook Group, allows Emily and Kirk to shed light on the reason why banks want to see a history of your income from your new venture before they agree to sign on the dotted line and give you money.
Today's question comes from a member of our Private Facebook Group who is looking to learn about how to find a loan officer to help in his investing journey. Emily and Kirk discuss why it's important to understand the difference between a loan officer and a certified mortgage planner (CMP). This distinction could help you find the right person to help with your financing options.
They also share a resource on where to find a CMPS and what you should take with you to a discovery meeting with a potential mortgage planner.
But isn't that what it takes to grow your business? Putting yourself in a situation that is different than what you're used to, so you can learn and grow. As we continue to move forward and plan ahead for our real estate investing business, one of our major goals is to start working with partners and creating relationships with banks.
While we have bought two properties in the recent months as our first partner deals, we also decided to start meeting with banks to get access to a line of credit that we can use in future deals.
Welcome to our last episode of the Back to Basics series. In our last two episodes, we spoke about the Why when it comes to real estate investing and the How. On today's session, Kirk and Emily speak about the basics of financing your initial real estate deals.
Are there multiple ways to finance a real estate deal. OF Course.
The reality, however, is that when you are just starting out your options may be a little more limited because of your lack of a portfolio. Therefore, understanding that there are a few different avenues that you can take as a Rookie.
In episode 2 of the Back to Basics series we discuss the How.
How should you go about investing in real estate and what are some of the biggest pieces of advice we've learned throughout our journey.
Hands down, if you are a rookie, one of the best pieces of advice to go approach the "how" is to get a great real estate agent. As a rookie, you are trying to learn so many new things related to this field and it can be overwhelming. Having a real estate agent, that is knowledgeable about investing in rental properties, can not only make your life a little easier but also help you learn so much about a specific market and what you should look for when viewing properties.
What a show we have for you! Just in time for the beginning of 2016 and a new tax year. We have CPA and real estate investor Brandon Hall on the show to share with you some tax tips and his own experience thus far in real estate investing.
As a CPA, Brandon has worked for Big 4 firms, but has chosen to focus on the real estate industry. He helps real estate investors who are looking for a tax consultant to help them manage and run their business efficiently from the tax side. His in-depth knowledge consists of accounting, tax planning, entity structuring, financial modeling and valuation services.
As we continue to focus on the new year and new goals, we thought it would be beneficial for all of us to take some time to reflect on the basics of real estate investing.
Hence, the next three episodes of the podcast are focusing on our series Back to Basics. We are highlighting the main pillars of investing in rental property to help those of you who may be new to the show or for the veteran community to reflect back on the early days of beginning the investing journey.
Show 44 focuses on the WHY.
With no preplanning of the show, Kirk and I have a candid conversation about why we first got started in rental properties and how that has maybe changed over the last few years.
So tune in to our candid conversation to remind yourself or to get inspired for your road ahead in 2016.
Welcome to 2016 and I'm excited to be starting the year off with all of you in our RentalRookie Community. At the end of the holiday season, it's important to take time to stop and reflect on the previous year and begin looking ahead to the endless possibilities available to us in the new year.
Today's show focuses on reflecting on our 3 big goals from 2015 and whether or not we met them or fell short. Then, we take some time to share with you our goals for 2016.
"To Get What We've Never Had, We Must do What We've Never Done."
-Unknown
So what’s that mean to you?
You may know nothing about real estate, investing, financing, etc. but that doesn’t mean that you should let that hold you back.
Don’t let the fear of the unknown hold you back.
Had I been opposed to going doing this road with him a few years ago, I’m pretty confident that we would not financially be where we are just a few short years later.
Invest in yourself and invest in your future.
Do what you’ve never done.
So how does this relate to real estate investing?
When I thought about the quote I felt that Buffet had a lot of power in the concept of 'not knowing what you are doing."
If you are like my husband and me, we don't take decisions lightly. When we are dealing with money, family, lifestyle we take our decisions very seriously and will research and be sure that we have looked at the different ways a situation can play out.
We are not impulsive or rash people.
This concept can easily be applied to real estate.
Don't make rash decisions; don't buy properties without running numbers; don't make decisions based off of pure emotion; don't invest in a property that you haven't looked at the many different ways the deal could go well or fail.
“I am prepared for the worst, but hope for the best” English Proverb
Preparation and due diligence is a key component of savvy real estate investing. No matter where you are in your investing career taking a minute to reflect on the importance you place on due diligence.
One of the things that I feel has allowed Kirk and me to be successful in our investing career thus far is that we are overly cautious. When we are about to purchase a property or are even interested in a property, we are running detailed number analyses, checking out comparable for sale prices and rental prices. Take the time to analyze the area itself- what types of jobs are available, what restaurants and entertainment are around- are important things to think about when you are going to invest in a property.
In Show 38, we invite Ashley Wishinski on to the podcast to share her experiences in investing and building a portfolio of over 1.35 million dollars. Using only 35k of their own money, she and her husband use strategies to snowball their portfolio to continue to grow it.
As a mom of twins and an investing partner with her spouse, she shares some insight into finding, analyzing and managing properties. Not only are they property investors, but they have started a property management company and provide great resources into how they manage their own and other investor's properties.
Yes, you read the title correctly. We recently walked away from a deal literally on the day of closing at the closing table.
While it was an extremely difficult decision to make, at the end of the day walking away saved us a ton of money up front that was NOT part of the plan with this property. Emily and Kirk share with you the details of, what seemed like a great property. They break down the numbers and tell you exactly why this property worked with their portfolio and what their future plans were to make it an even better investment.
Show 36 is dedicated to sharing with you a tip when you are working on finding a closing date. As a Take 10 segment, Emily's goal is to share with you one thing about investing in rentals on the go. In this show, Emily shares with you how strategically scheduling your closing date can earn you more income from you renter. By having a closing date later in the month, you push back the date of your first payment. As a result, getting a tenant in the property as soon as you close can result in an extra month's payment that doesn't have to go toward a mortgage payment.
Show 35 is dedicated to sharing with you a tip for when you are trying to qualify for financing for an investment property. As a Take 10 segment, Emily's goal is to share with you one thing about investing in rentals on the go. In this show, Emily shares with you one thing that banks looks for when you are trying to qualify for financing for your investment properties. For the bank's protection, they require investors to have a reserve fund that can cover the PITI (principal, interest, taxes, and insurance) for a certain period of time in order to qualify for financing.
Emily and Kirk are excited to share with listeners how they manage their business as investing partners. While they are married, they each have defined roles from finding to closing and managing the properties.
They share why it is important to determine each partner's strength and to create a system that makes finding, buying and managing rentals streamlined and easy. While it can be difficult to give up some control of the process to a partner, it can create an efficient well oiled investing machine.
Show 33 is dedicated to sharing with you a tip for when you are creating and negotiating a deal. As a Take 10 segment, Emily's goal is to share with you one thing about investing in rentals on the go. In this show, Emily shares with you how you can use Seller Credit in a real estate contract as a strategy. While including it with your offer can keep some cash in your pocket at closing, it can also help you with the negotiations with the seller.
Emily and Kirk are excited to share a story about a recent event in their own community that could potentially have a major impact on the housing market. Their town recently underwent a tax reassessment, the first one since 1968- and many individuals taxes doubled and tripled. For a community where many are on a fixed income, this could have drastic impacts on property values. Tune in to hear why you need to have enough spread between your monthly payments and monthly income.
We all like to keep as much money as possible in our pockets when it comes to investing in rental properties. I mean, we are investing to make money. Often, we do this by deciding to self manage our properties. While it is absolutely doable, even if you are working full time, it can start to take a toll on landlords if you don't set up systems and processes ahead of time.
On Show 30, Emily and Kirk are focused on sharing one strategy for investing in rental property that can help snowball your portfolio and maximize your return. Getting a Cash Out Refinance on a property you financed or paid with cash can ultimately allow you to own a property free and clear within a few years and be making an infinite ROI.
Show 29 is a Take 10 episode focused on teaching you one thing related to investing in real estate. This show focuses on teaching about the debt to income (DTI) ratio that banks use to determine what you are able to qualify for in terms of financing. Emily shares with you what the DTI ratio is, why it is important in your investing journey and how to calculate your own DTI to see if you are under the number banks use. Tune in for a quick "how-to" in investing in rental property.
Tune in to Show 28 for a lively conversation between Kirk and Emily in relation to investing. While they tend to focus on investing in buy and hold properties specifically on this show, they decided to put a different spin on this particular show. As two people who take personal finance very seriously they share their experiences with investing and particularly other ways to invest your money.
Show 27 features Nicole Williamson a real estate investor from Maryland. She shares with listeners tons of great information from her own investing experiences. As an investor who balances a full time job, she has tips for balancing full time jobs and buying and managing rental properties. Nicole helps to show us all that we can invest if we put our mind to it.
In Show 26, Emily shares 9 steps to get you from no property to your first rental property. While being a rookie can be overwhelming and often you don't know where to start, Emily gives you a simplified streamlined process to taking control of your financial future.
If you're in the real estate business long enough you will probably run across some shady stuff. In Show 25, Emily and Kirk share a recent story about how they were under contract on a property that was rented to more individuals than was allowed. As a result, they had to decide whether to continue on in the process of buying the property or back out because it was breaking the local zoning ordinances.
In Show 23 Kirk and Emily talk about the tax auction that they were preparing to attend after their recent duplex purchase. Show 24 is focused on them sharing their experience at the first auction and what lessons they've learned as a result of this experience.
Get excited about show 23! Why? Emily and Kirk share, in real time, the actual numbers of the duplex they just closed on hours before recording this podcast. In Show 20, Emily and Kirk share their concerns about investing in a new market and in a new type of property, a multi-unit. Their candid conversation on the show helped them to come to the conclusion that they wanted to move forward with an offer on this property. Today's show focuses on the real numbers from closing and despite having some numbers turning out to be different, they're earning a higher cash flow each month.
Tune in to show 22 and join Emily and Kirk as they share how they are preparing for their first tax auction. As real estate investors, they have bought all of their rental units with traditional financing and are looking to make their first cash purchase in the upcoming weeks.
This show focuses on the steps Emily and Kirk are taking to prepare, research and create an action plan for when they attend the auction. Even more, they are looking for tips and advice from anyone who has experience with auctions. Leave a comment below with advice or tips we should consider before taking the plunge at the auction.
Join Emily on this take 10 show as she shares some insight into the realities of owning rental property. Using a property she and her husband own, Emily shares how they have dealt with a vacant unit, why they decided to drop the price and enlist the help of their real estate agent.
The reality of owning rental property has its definite good days and not so great days. While it is great to own properties with great tenants and earn 'passive income' each month, there are times when properties will not have tenants, when water pipes will bust or you have to evict a tenant. Tune in to hear how Emily and her husband decided to drop the price and had their property rented in just a few days.
Don't know where to start when you are going to analyze a property? Join Emily and Kirk, husband and wife investing team, as they talk candidly about a current property that they are contemplating buying. They share everything from the numbers of the property, to the pros and cons of investing in this multi-family. As investors who own property in the Northern VA area, they are looking to invest in rural western PA and share what new realities are making them nervous about moving forward. They also share tips for viewing properties with tenants currently in them and being there when you are viewing the property. Kirk's tip will get you great, realistic information about the property.
Join Emily on Show 19 with special Julie Kern. Julie and her husband are new buy and hold investors from Georgia. Julie shares her story of how they paid off all of their debt, saved their money, and bought two properties within two months in cash. Her story is one that can resonate with people just getting started as she shares what strategies they used to jumpstart their investing journey.
Tune in to the Take 10 show that focuses on sharing with you a tool for your real estate investing toolbox. Learn about the 1031 Exchange and how it can allow you to roll your gains from the sale of a business or investment property into another 'like or similar' property without paying capital gains tax on the sale. Because this is seen as an exchange you can defer paying the capital gains tax until you eventually cash out in the future. Learn more about the 1031 exchange and the different ways this tool can work for you.
Are you looking to use financing to buy a property? Show 17 is focused on teaching you about the various loan products that are available for those of you out there who want to use financing to purchase a rental. Whether you are ‘house hacking’ your way to your first rental or buying a pure rental property, Kirk and Emily share 6 different loan products for you to think about.
As a loan officer, Kirk helps debunk some myths that surround some of the government logan programs and highlight some information that can often be confusing for consumers. Not only that, he shares insight from what topics typically confuse his clients to help you better understand the loan products and how they can help you build your rental portfolio.
Show 16 is dedicated to sharing with you insight into renter’s insurance. After one of our properties recently was saturated with water from a frozen pipe that burst, it seemed like a topic that would be good to share anyone in the beginning stages of being a landlord. Although it seems that it is something that is frequently overlooked, it can ultimately save you as the landlord money and protect your tenant’s personal belongings. The best part about it is that it really isn’t that expensive, only about the cost of a couple of lattes.
Encouraging your tenants to talk to their current insurance company may offer them the opportunity to bundle in renter’s insurance to their already owned policies. Whether you required tenants to buy it or at least have an up front conversation about it with them with documents to sign that notes that they chose to opt out of renter’s insurance can only protect you.
In Show 5, Elizabeth Ciolegrove joins Emily to share her story in the real estate investing journey. Elizabeth and her husband are part time real estate investors, who have been finding success in the buy and hold niche. While working full time jobs, they successfully have acquired and managed properties in various states throughout the country. Join Emily and Elizabeth has they discuss realities of owning investment properties.
In this Take 10 show, Emily shares the importance of not only analyzing a deal for the property itself, but also analyzing the area in which you are looking to invest. Often we can get caught up in the numbers and the property itself, forgetting to think about external factors that can influence the ability of our property to get rented. She shares four things to research when looking to invest in a new area.
In this Take 10 show, Emily talks about what to consider when it comes to using your income to qualify for another property. Unforunately, just because your property may be making money every month doesn't mean that you can go to the bank and qualify for another loan. Find out the things you must take into account to help you start snowballing the growth of your rental property portfolio.
In Show 12, Emily and Kirk, her husband and investing partner, discuss the pieces of the investing puzzle that come into play beyond the ROI. While, they break down what an ROI is and why it is important, they also share what other things can come into play when deciding whether a property is the right fit for you. Join them, as they share a personal story about how they turned away a deal that would have yielded them an 80% ROI.
Show 11 is dedicated to sharing with you a resource that you can use to help with managing expenses in 2015. As a Take 10 segment, Emily's goal is to share with you one thing about investing in rentals on the go. In this show, Emily shares with you a new App that she recently learned about and has already started using in 2015 to track mileage expenses so that she and her husband are able to deduct mileage next year on their taxes, potentially saving them thousands.
Show 10 is dedicated to helping investors, especially rookies, realize that rental property investing is not a one way street. There is no one size fits all method to finding success in this niche. Even more, there are many different types of properties to invest in that fall under the category of buy and hold properties. In this episode, Emily discusses 7 different types of properties that investors can include in their portfolio. Even if you've started investing, this show can help you think about how you may want to diversify your portfolio. If you haven't started yet, great, this show is for you. Listen to the various paths for investing and start to think about what road might be the best for you to help you reach your goals.
In this Take 10 segment Emily gives you an overview of 9 things that investors should start gathering and organizing for the upcoming tax season. While this can be a headaches for a lot of people, Emily shares tips on what things you should consider keeping record or and gives advice on getting systems in place throughout the entire year so tax time is less stressful for you. Tune in to this Take 10 show to learn one thing about investing in real estateon the go!
In Show 8 Emily brings back her husband, Kirk, to co-host an episode dedicated to describing their most recent rental property purchase. Throughout the show, they talk about how they found the deal, they give you exact numbers from their deal down to the penny, and they share tips on managing properties from a distance. Tune in to learn not only about their deal, but to learn many tips for rookie investors just getting started.
Show 007 is the first Take 10 podcast of many to come that is focused on teaching you one thing related to investing in rental property on the go. Sometimes we don’t have the time to listen to extensive shows, hence the creation of the Take 1o shows. Each show will generally be around 10 minutes -give or a take a few :)- and be information dense. The hope is that at the end of the show you will have learned one thing to help you in your real estate investing journey.
This show specifically focuses on 3 contingencies that you should make sure are included in any real estate contract that you are involved in. Emily will talk about what each of these contingencies (home inspection, appraisal, financing) are and why it is important for you as a buyer to educate yourself about them. Tune in to learn something new in just 10 minutes.
In show 6 Emily is joined by Patrick Smith who shares how he and his wife were able to take the first step in investing with buy and hold properties. He shares with us how they were able to turn their first home into a rental and the different strategies they've tried all while being active in the military. If you're just getting started and nervous about taking the plunge or have been struggling with buying in a competitive market listen to Patrick's story to inspire you and let you know that you're not alone.
In show 5 of the podcast, Emily spends time talking about some of the most common excuses that people make to stop them from investing in buy and hold properties. While she admits to making some of these excuses herself at one point or another, she gives good advice on how you can overcome these excuses and use them to help fuel the need for educating yourself. Listen to the show to see if you've made one of these excuses before and see what advice Emily has for helping you avoid letting excuses become roadblocks for your future.
In show 4 Brian Davis, vice president of EZLandlord Forms, joins us to talk about how important it is to know your state's landlord tenant laws. He shares with us a variety of great resources available on EZLanlord Forms to help you through the land lording process. Even more, Brian gives us tips from his own investing in rentals and experiences in his career in real estate investing. You can't afford to miss this show!
In this show, Emily brings on husband and certified mortgage planner Kirk, to share the traditional financing realm from both a lender and an investor's perspective. Find out how and why traditional financing may be an option for your own investing and what you need to start doing now to ensure you are able to qualify for a loan when you find that perfect property.
In show 3, I talk to Matt Kucinich from First American Home Buyers Protection Corporation about how home warranties can benefit investors and ultimately save you money. Matt shares with us what home warranties are, when to buy them, how they can save you money, and more. He also shares with us the specific program for investors that First American offers if you have a growing rental portfolio.
In this episode of the RentalRookie podcast, I spend the time introducing myself to you and sharing with you a little bit about myself. One of the important aspects of the show is why I created this podcast and why I was inspired to create my website www.RentalRookie.com. Check out the show to find out about my journey in investing in rental property. In learning about how I went from knowing nothing to owning multiple properties, I hope to inspire you to take the step into controlling your financial future.