Jason Hartman hosts his mom, Joyce, and a client, Drew, to discuss their respective property management approach. Drew is in the process of going towards self-management but currently uses property managers. Joyce is an advocate of self-management and answers some of Drew’s questions, including those about tenant relationships, longer tenant retention, rent collections, and many other aspects of management.

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This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.

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Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 1:04
Welcome to the creating wealth show. This is your host Jason Hartman episode number 952 952. Today we have part two, with my mother and our client drew Baker. They’re actually both clients. My mom is actually a client. Just so you know, she is the extreme do it yourselfer. And drew has, I believe 10 properties Now in addition to his own home with property managers, I take a middle ground on this, as you know, I think the hybrid approach is the best approach. I do want to mention two areas of potential danger and pitfalls. And this is if I haven’t pointed out enough in this, I do think a hybrid approach is a good idea for many people, not all people. You’ve got to have some experience and you can get some experience by beginning your investment career having property managers and learning from them what they do well what they do poorly etc. Just a couple of pitfalls. Areas number one, occasionally, you will have difficulty with insurance for self managed properties, insurance companies, you know, they feel the kind of safe one size fits all benefit or situation is to just have a professional property manager. And sometimes they require that to get a certain rate. So your rates might vary, and companies might vary based on whether or not you’re self managing. That’s one thing I don’t know if I pointed out in this interview, I do want to point that out. So check that carefully. You know, make sure that you are always when you have an insurance policy, you are filling out applications correctly telling your insurance broker the correct things and you’re not misleading them in any way. Okay, so that’s obvious, goes without saying should go without saying at least. And then the other thing is, I’m the most tender and I guess risky part of this is the turn. I believe it’s the term Over, I think collecting rent on a monthly basis, it’s actually quite easy. A lot is made that it’s a big deal. I’ve never found it to be any big deal. And all the times I’ve self managed over the years, I find that to be the really the easy part, the tenant turn is the more difficult part. And that’s where you’ve got to pay attention. You’ve got to make sure you hire a property manager on an all ecard basis, or a real estate agent on an all a carte basis. And you’ve got to really hold them accountable and make sure they’re doing the things. They meet with the tenant who’s departing. They check the property, they send you photos, they do the final walkthrough as they move out. You make sure the utilities are on in between. If it’s a cold climate, and you may need consider winterizing the house pay attention to that. That’s another area where you know you could have a pipe break or something like that look at I know, we’re talking about all these complexities and difficulties. But look, income property is the most essential Quickly proven asset class in the entire world, you got to know what you’re doing a little bit, you got to pay attention, you know, my philosophy, there’s no such thing as a passive investment. So, you know, just learn a few things, pay attention to a few things and you’ll be fine. Okay? It’s the most historically proven asset class in the world. It’s a multi dimensional asset class, where you earn return in many ways, versus the Wall Street, the modern version of organized crime on Wall Street, where they’re skimming all the profits off the top, and all of the other pooled money investments out there, income property, the most historically proven asset class in the entire world. So that said, note the things that I’m mentioning, so be careful on the turn. Ideally, you’re hiring a property manager to do all a cart, lease up and walk throughs in and out and things like that between tenants. But the best thing is to keep your tenants for a long time. And when you self manage a lot of times, you can do that more effectively than you can with a property manager. And we’ve talked about that over the years. If you’re a member of our j h, you can find out about that at Jason hartman.com. And if you’re a member of that, we have a couple of conference calls where we go in, in depth on self management. And we’ve talked about this many times over many years. There are prior podcast on it as well. So here we are with another one. Today is part two. So we will dive into that. By the way, next week, we’ve got some exciting shows coming up for you also flashback Friday tomorrow. But next week, we’re going to talk about slicing pie, as it applies to real estate investors, how you can equity share and share profits in income property investments with partners and do it very effectively using this wonderful methodology called slicing pie. We had the founder of the slicing pie methodology speak at our venture lions mastermind event in Chicago a few months back, it was quite interesting. So we’re going to talk about it as it applies to income probably I think you’ll like that that’s coming up next week, as well as a bunch of other great stuff. And remember, for the Ice Hotel trip, we got a couple more spots left. Venture Alliance and non venture Alliance members are eligible for this trip. The information on that is at Jason Hartman, ice hotel.com. I know it’s a long domain name. Jason Hartman, ice hotel.com that’s the world famous Ice Hotel in Sweden. This is a bucket list once in a lifetime trip. So consider joining us check it out. Jason Hartman Ice Hotel calm. We’ve also got our San Jose Jason Hartman University event ja to live in San Jose on March 3, check that out at Jason Hartman calm and let’s go to part two of hybrid property management. Here we go. So one more about how you deal with tenants on an ongoing basis. I mean, rent collection problems, repair problems. Those are the things people are concerned about. What else do you want to share?

Joyce 7:10
Well, I have some people, which, again, if it’s Los Angeles, I get all of these vendors from the apartment Owners Association. They just have hundreds of vendors. And they know you’re not dealing with Miss little housewife who stays home teaches and bakes cookies. They know that because you’re part of the apartment Owners Association, that you are going to get a better price. And if you don’t get a better price, you simply turn around and call the apartment Owners Association and tell them about it. So there’s painters, there’s electricians or plumbers, there’s everything. And that is very, very helpful to me for the properties that are in Southern California. Otherwise, you simply have to go online and I also get tell them phone books, which is kind of like ancient things that aren’t online, you always can look in the Yellow Pages and find people, again, you just make those 10 phone calls, and you get a good price. It’s a lot cheaper to help a lot of people come to you and give you bids, rather than you taking three bids and trying to get a decent price.

Jason Hartman 8:26
Yeah, right. So you you get a lot of phone calls.

Jason Hartman 8:30
Yeah, you get a lot of people out to that property. Now, here’s another self, man. Two things I want to say. Number one is, you know, we obviously don’t recommend investing in overpriced Southern California. But these are properties that you bought, you know, decades ago. So you still own them. And I haven’t convinced you to sell them on 1031 exchanges yet and buy 20 more properties. So that’s one thing. We’ve talked about that on other shows, so we won’t go into it here. But the other part that’s interesting is that the tenant when it’s occupied, you’re referring To the tenant turnover in between tenants and the make ready. But when the property is occupied, the tenant does the work for you. It’s amazing to me, like I have literally had tenants in my self managed properties, call me and say, Hey, the air conditioning isn’t cooling. It’s not coming out cold anymore. And I already called, and I got a couple of bids on fixing it. And I said, well just email them to me. And I’m like, they’re doing my work. For me. It’s incredible. They’re at the property. I mean, the nice thing about not living near your properties is you can’t go over and meet anybody. So the tenant or the real estate agent or the property manager hired for all carte services during the tenant turn, or even not. We’ll help you do that. One of the things I’ve done effectively and I know my mom has is I’ve used local service providers like realtors and property many managers to just do things for free. Because remember, you’re a potential customer for them. They want your business, they’ll go over and take a look at your property. Mom, I remember, I was with you one time, when you were on the phone with a realtor who was going to look at your property for you and tell you if the tenant had moved, like you didn’t hear from the tenant, you didn’t get the rent. And so you asked this realtor to go over there and the realtor saw the tenant and handed her cell phone to your tenant. They were like in the driveway or something of you know, talk about that a little bit. They idea of getting people to help you out local people.

Joyce 10:39
Yeah, I can’t remember that too much. But I do remember taking

Jason Hartman 10:45
it was the best

Joyce 10:47
Bond. Yeah, but, you know, lots of times, I will ask a realtor, if I am having I haven’t had problems lately, for quite a long while as a matter of fact, but sometimes when you’re doing an eviction You have to know if that tenant has left or not, because you don’t want to travel there, you know, until, and so I’ll just ask the realtor to go by and take a look and see if the tenant is still living there or not. And of course, that realtors quite happy to do so, because she thinks she’ll get a listing to sell the house, or at least she’ll get a listing to rent out for you.

Jason Hartman 11:23
Right, right. And so there’s a whole army of people out there that are more than willing to help you and provide services to you some for a fee and some for free just as a goodwill gesture to try and get business. Okay, so talk to us about evictions a little bit when a tenant goes bad. I want you to talk about retaining tenants because you have your tenant stay a long time in your properties mom, and then that in the best thing is to retain them of course, and to not have a lot of turnover. But the second thing is to handle evictions. Well, if they turn out to be deadbeats, talk to us a little bit about that if you wouldn’t how you handle those things.

Joyce 12:00
Okay, well, if the rent is not there, first, I have a process server for $35. Do a three day notice to pay rent or quit. And you don’t have to wait the three days. If you have one of those terrible clauses it you know, not late until five days, the first day that the rent is not there in your bank account, you email that form or fax that form to the process server and have that process or service. Okay, that makes your tenant know that you serious on top of everything. And once they get that legal notice that attitude changes almost magically. Good. Yes, you don’t get that rent, within three days. Just start to eviction, because you know what, a bad tenant will only get worse and worse and worse. So it’s imperative that you get Get out as soon as possible.

Jason Hartman 13:02
The concept being you know, you’ve all heard it with, like, if you have children or pets, if you give an inch they take a yard. Right. So, yeah,

Drew 13:10
I have a question. I have a question. You know, I think that that might work on paper. I don’t know how that works in practicality. You know, if somebody I know everybody the dog ate their homework, but, you know, sometimes things in life happened where somebody lost their job, and they need a little bit of flexibility. I have maintained a new philosophy that zero tolerance, it’s an impersonal thing, I’m gonna have to just go through I need to do what makes sense for me. And it’s not constantly making exceptions. But Joyce, is there any flexibility because I think when you have a more direct line of communication with tenants, and you’re being you know, friendly and trying to make them happy as a tenant, since they’re your you know, they are your customer. You’re right, yeah, I mean You can’t just kick them to the curb in every situation. But I don’t know, if you have any flexibility or what how your approaches because my issue with the property man doing it self management style is that if you’re now having a relationship with the tenant, is it awkward at all to raise the rents on them? Because that now feels like you have this relationship that now you’re sort of, yeah, we get it good.

Jason Hartman 14:26
We can through the, you know, how does it feel? So, I’m not maybe that’s like 10 questions in one, but give me your thoughts. Let me tee that up a little bit. It’s counterintuitive, true. It’s the opposite. A lot of times, because the tenant has the pressure of pleasing you, of maintaining a relationship with you when it’s some third party property management company, man, they’re just taking all they can get. They’re gonna ask for everything and object everything when they have to maintain that relationship with you personally. They want to be careful they want To maintain a good relationship with our landlord. Go ahead, mom.

Joyce 15:03
Okay, Drew, there are certainly cases, and especially if that tenant has been there for a long time, that you are certainly going to cooperate with that tenant. What I’m talking about if that this was a new tenant, and if that rent isn’t there, like within, say, the first six months that they’re in your house, okay? You send that three day notice to pay rent or quit via Process Server immediately. And pretty soon, you’re going to train that tenant to have that rent their honor before the first day of the month. Okay? That’s really important with a brand new tenant. But when a tenant has been living in your house for six years, for two years in things do happen. Okay. So definitely you’re going to give some consideration to that tenant. I’m just talking about that you get rid of your property manager. All sudden, the tenant doesn’t pay his rent. Right? So the first six months are really critical.

Jason Hartman 16:09
So it’s the probationary period deal with that tenant. Yeah, you set the tone. Yeah, that’s training them up to your standards. You got to set the tone.

Drew 16:16
Yeah. What I do like about kind of the approach is that you’re sort of training your tenant because I think the issue that I have with the property manager is, even though Jason It sounds like you have a great property manager in Florida, I find it very hard to teach an old dog new tricks these property manager I know and pinion they have their box, and if it doesn’t fit in it, they just are like,

Jason Hartman 16:42
totally agree.

Drew 16:43
Both of your point I think attendance is much more flexible than a property manager.

Jason Hartman 16:49
I agree. And the property manager will lie to you or shade the truth, at least sometimes, and act like it’s the tenant demanding something when it’s really useful. them, because you’re you don’t have a direct line of communication. The other thing I wanted to say a few minutes ago about that concept is that when you make it the responsibility of your tenants to deposit the money in your bank account, you got to have a national bank account, obviously, you know, with a big national bank. But there’s other ways they can do it cozy. As you know, there are other options too, when you make it their responsibility to do that every month, you are on top of it, you are attached to it very directly. And you know, the first is the first, a property manager will, you know, send you the rent on the 20th after the check clears and they process the payment, and sometimes the property managers late and one property manager does one thing and another does another thing. And it just gets all confusing. The way my mom does it, it’s clear. The first is the first there’s 12 times a year that you’re going to look online and look at your account, make sure those deposits are there. And that’s the end of the discussion. It’s just really clear.

Joyce 17:59
Okay, so Look at three or four of my tenants now regularly deposit the 20th or, you know, any time before the for right now.

Unknown 18:11
Yeah, it is funny because I was really kind of happy with one of the property managers because they promptly deposited on the first and what I realized was they were depositing

Jason Hartman 18:21
the prior month. Yeah, right. Exactly. I know.

Drew 18:24
Yeah. Yeah. So I there is there is something to be said about that. Now Joyce, how do you handle you know, raising the rent when you know, you’ve now had kind of a personable experience with the renter and do you build that expectation and early or how does that work? Because you know, one of the properties i have i’ve had a tenant, they’ve been great for five years never complained. And I was a little leery about raising the rent because I hadn’t done so he was never ready. I roll my mind mentality well, you know if you if you pull comps in the neighborhood, You know, it’s not like rents have gone bananas. And there is argument that you know, I mean, I think we’re at the Masters event meaning masters, which was great. I think one of the property managers was talking about, you know, the reasons why tenants leave. And one of them is for, you know, they find something cheaper now, not saying you should never raise the rent in five years, that was a mistake on my part because I wasn’t a hawk. But you know, I’m not sure on your end as far as self managing, and in general, you know, how do you set up that allocation? And what if you What if you haven’t raised the rent, let’s say in a five year period or a few years, like, Is it too late to do that? Tell me what you think.

Joyce 19:43
Okay, Drew.

Joyce 19:46
There’s a good chance you might lose that senate if you haven’t raised the rent in five years, when finally you decide to do that, because again, you have to train your tenants to your way of doing business like the guy to have the rent there. before. First day of the month, and then look, every year your taxes get raised every year your insurance costs more money. And you know what? You’re always going to have to spend some money on a hot water heater, a new refrigerator, a toilet, or whatever. Okay, so you have to have some money paid into that. You have to give him a raise What’s in here? There’s just no question. But the way I do it, is I go on to Zillow and Trulia. And I look and see what the rentals are for the area. And if you can’t decide yourself, call a local real estate agent and ask or call two or three of them. So you get a really good idea as to what the price should be. Now your property manager doesn’t ever want to raise the rent, because they don’t want to have to go to the hassle of finding a new candidate.

Jason Hartman 20:55
That’s interesting. And we’ve had we’ve had the debate about that before as to whether Not, that is the motivation that you just outlined with a lower rent, right? Or the motivation is to raise the rent too high so that the tenant leaves so they can charge you a lease up fee again. And I don’t know what’s true, nobody really does, because nobody knows what’s in anybody else’s head. But I’ll tell you something. When you self manage, you remove any of those kind of conflicts of interest. It’s, you’re going direct. Go ahead, Drew.

Drew 21:25
I want to throw a real life scenario that happened with me, and I think it’s kind of a to the point of the conversation. I had a property and the tenant was unhappy with the management company, I think over late fees, or they weren’t getting what they wanted. So somehow, they managed to find my information. I still don’t know how they did. I asked them and I didn’t get a clear answer, maybe through the county recorders office. They can they can

Jason Hartman 21:51
find it. It’s big data man. They found you can find anything.

Drew 21:54
They called me. Yeah, they called me and said, Hey, we’re unhappy. We’ve had this issue and property managers and getting back to us when they’re charging me a late fee. What do I do Bubba? So I kind of became this like party now added to the mix. So one day it was Thanksgiving. Okay. And it was the night of Thanksgiving. The ceiling fan had fallen off the roof when it was off the ceiling. All the drywall, all the insulation, everything had just dumped in their master bedroom. Wow. Jason is a huge

Jason Hartman 22:31
I never heard of something like that. Yeah, go ahead.

Drew 22:34
Wow. Yeah, well, apparently the builder or the person doing the rehab did not use the correct drywall screws or something. And there was some sort of issue in that regard. That was not meant, you know, was obviously impossible to know.

Jason Hartman 22:48
So what’s the question? What’s the question?

Drew 22:51
Yeah, so the question is, it’s Thanksgiving. This has fallen onto the tenants master bedroom, it broke their TV and you know, They said their their wife was afraid and all this stuff and I’m sitting here having to deal with this, you know, looking at the Thanksgiving dinner going, I don’t even know what to do. The question is, is like, now when I talked to the property management company, they had, you know, hey, we’ll get somebody out there, we’ll fix it. The tenant is like, hey, how much are they charging you? I can have my uncle do this. And oh, who’s gonna fix my TV? And it just became this real weird situation where they wanted Well, that’s that’s

Jason Hartman 23:31
insurance. The TV is insurance. That’s an insurance claim for the TV at least if not the ceiling fan to but the TV is definitely an insurance, you know, that’s their insurance first and your second I can answer that one for you. Okay,

Drew 23:44
okay. Okay. That was taken care of, but I guess that so they want to have their uncle do the job and they’re trying to bargain with you. And, you know, when you have a property management or hiring someone real that’s not part of the that doesn’t fit in the box. So it’s The tenant is trying to kind of cut corners. And you know, I don’t know how to deal with that. How do you do just tell the truth?

Joyce 24:09
The first thing, I think, because you, you have that property management company, that has got to be their responsibility for fixing it. I wouldn’t deal with a tenant because you don’t know the debit from Adam. You have no clue if they’re responsible people. If the guy is a real good, Handy guy, you have no clue, because you’ve never met them and you’ve had no relationship with them. So you’ve got to let that property management company handle that problem. And then I would get rid of that property management company.

Drew 24:43
Yeah, well, my main question, Well, my my, my hypothetical was more like, this is your home. This happens to you. You don’t know their work and they’re trying to bargain with you and my uncle can do the work for cheaper than this other person. I had to do the bid. You know,

Joyce 24:58
the question is it I don’t know. No, that cannot. And so I can’t try. You can’t do that.

Jason Hartman 25:05
Yeah. Because you may have a bigger mess on your hands. That’s another reason for self management. So there you go. Because then you’ll know the tenant, you’ll know who you’re dealing with. I mean, my aunt Joan, who was, of course, another speaker at meet the Masters, you know, she’s got, I think, now like 80 properties or so, and has always self managed everything. But you know, admittedly, what my mom is doing and what am Joan is doing is kind of old school. But I think there’s a lot to be said for it. I think, folks, we got to wrap up. We’ve been talking for a long time here. But the point is, I really believe that the hybrid approach is the thing to do. You have someone help you a property manager or a real estate agent, all a CART services, just to do the lease up. Here’s what they do. Again, let me just say this, okay, because we’ve gone into a lot of this that you don’t need to do while you’re listening. They they handle meeting the old tenant, they do. walkthrough of the property, they send you a bunch of photos, they help you determine what to give back and what to keep from the old tenant security deposit, then if any rent ready stuff needs to be done, and hopefully it doesn’t. But if it needs to be done, they line up the repair people, the painter or the whatever, and they have them get the house ready. And then they do the marketing for the new tenant, they screen them, and they’re responsible for all of this. And then they lease it up and they transfer the keys over. And they By the way, they also give you pictures of the house before it’s delivered to the new tenant. So that you have pictures to see that everything was now fixed, right? And then the new tenant when the next rent is due on the first of that following month, they pay you directly. This is the best system if you asked me, okay, and you know, I don’t do it with all of my properties. I do it with some, but oddly, these tenants they just don’t bug you like everybody thinks. One thing. I do want to close with We didn’t get to the tenant retention question, although drew asked a little bit about increasing rent and Mom, you said that you train people to expect rent increases, which I think is a very good policy, even if it’s a small rent increase, get them in the habit of knowing every year there’s a rent increase. Okay. But the longest tenant and we’ve talked about this on the show before you’ve ever had one of your properties, is the guy that’s been there since 1989. He got a bought the house by now, his mortgage would be paid off, right. But you’ve had some other tenants that stay a long time. What is your average tenancy before you do a turnover and what are some of your other like long tenants Mom, how long have they stayed?

Joyce 27:42
I think 5 6 7 years. Mm hmm. Yeah, it’s pretty typical. There’s an area I believe that valley where the lower class of the tenants and during the 2008 910 11 years, I had turnover because tenants lost their jobs.

Jason Hartman 28:00
So they weren’t they were moving around.

Drew 28:03
Okay, do you think that this style that you have? Does it change at all? Or do you have? Would you have a different approach? If it were in a class neighborhood versus a C class neighborhood? Or Jason, do you recommend? Do you think that you might have better success in a more affluent areas than you would dealing with people that are maybe a little bit more of a lower economic status? When you think about that? affluence? misnomer?

Jason Hartman 28:27
I mean, you know, a and b properties are generally the easiest to manage C and D properties are harder. But go ahead, Mom, what’s your answer?

Joyce 28:34
I think one of the things that you learn when you do the lease up if if the person is handy, or what kind of work he does, and sometimes that counts for a lot or just, I have a tenant in Northport and a lot of things went wrong with that house because it was a really cheap builder. And she It was very intelligent woman and she’d get estimates or she Have her ex husband do the work. And because she was smart, and she was good, I trusted her with a lot of things. And she saved me money. But that only comes with knowing that tenant,

Jason Hartman 29:11
amazingly, the tenant will do a lot of this work for you. And I don’t mean that they’re necessarily swinging the hammer, okay, but sometimes they are, I mean, that they will meet the repair people, they will screen them, they will get some quotes for you. They will save you a lot of time. I mean, I’ve had tenants call around and find the best vendor for me, I’ll end up paying for the thing, but they’ll say hey, I think I found you the best deal on this repair or that repair and this I can do myself, but you know, they’re trying to get brownie points with you. They’re trying to get like extra credit sometimes. And you know, make you know, they’re a great tenant, and you know, they want to help you out. They got to maintain that relationship. When you have the property manager in the middle. It’s not that way. It’s different. So look, let’s wrap it up. We Going on very long. This is

Drew 30:01
why I have I have my last question. Really important. I want to know Jason, would you want your mom to be your your landlord? No. Okay, Joyce Joyce, would you want? Would you want Jason to be your tenant?

Joyce 30:18
Well, I wouldn’t mind if I if I didn’t know him this my son.

Drew 30:24
I had to ask. Sorry.

Jason Hartman 30:24
Oh, that’s fun.

Unknown 30:28
He could afford my rent rate. Yeah.

Jason Hartman 30:31
Oh, that’s funny. That’s a funny question. But the point is, look, if you have a great property manager, they can be worth their weight in gold, a great property manager is great, but a mediocre or a lousy property manager, you know, you might want to consider the self management. I’m not saying it’s for everybody. It is for some people. If nothing else, you learn some stuff from this. We’re gonna have to split this into two episodes because this interview is so long. But I just want to thank drew and my mom. Thank you. So much, you guys for sharing some of the stuff.
Yeah, go ahead.

Joyce 31:03
Can I just say something to drew? Sure, you know, Drew, if you have five properties in, say, Indianapolis or something,

Jason Hartman 31:10
you got six there and four in Memphis? Yep.

Joyce 31:12
Okay. You know, you might really consider just totally self managing, because you could go there when I have to re rent a house. If it doesn’t work for one tenant, they always say, Well, do you have anything more in the area? Do you have any more houses? And in Moreno Valley, I’ve got four houses. So if another two houses up for rent, you know, I can show them that house. That becomes a real good point for you. You would know that neighborhood, you’d begin to know all of the good vendors. And you just might want to just

Jason Hartman 31:46
let me let me say something about that. This is a strategy I’ve talked about. See when you make the mistake like I did of over diversifying, you don’t have that if you’re going to buy or you already have, you know 20 properties 30 properties say that’s your your portfolio goal at this point, right? Don’t over diversify. If you can get 10 in each of three cities, you’re gonna have that what I call the pinball effect, like a pinball machine, right? They can bounce off one and go to the other. And, you know, you can start to actually influence comps in the market and rental rates, ultimately, sometimes. So I think that’s a good goal to move toward. And that’s another thing to think about, folks, we got to wrap this up. We’ve been on for an hour and 10 minutes here. So Drew, and my mom, thank you very much for sharing some of this stuff. It’s been just a very casual discussion today. Many of our interviews are much more formal than this, but I really appreciate you sharing this stuff. So thank you and happy investing to all

Joyce 32:49
good luck, Drew.

Drew 32:51
Thank you.

Jason Hartman 32:53
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Hybrid Property Management Strategy with Joyce and Drew

Jason Hartman brings on two guests, his mother Joyce, and client Drew. THey discuss their experiences with property management. Joyce is an advocate of self-managing and gives tips on how she has become successful at doing so. Drew discusses using a property management as he doesn’t feel ready to step into self-management. Jason brings up the idea of doing both, in a hybrid set-up.

Announcer 0:00
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.

Announcer 0:13
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 1:03
Welcome to the creating wealth Show Episode Number 951 951. Thank you so much for joining me today. This is your host, Jason Hartman. And we are going to do a show with three people today. We’ve got our client drew Baker on the line, and our other client, my own mother on the line. We are going to talk about self management. There are a lot of misconceptions in this area. And I want to clear some of those up today. Drew has several properties. He has property managers for all of them. My mom has several properties, and she’s self manages all of them. So we’re going to go into this great, maybe great debate today about these different concepts and different ways to deal with self management and how that opportunity is available to you. But first, a couple quick reminders and announcements if you were at meet the masters of income property. Thank you so much for joining us for that Go to Jason hartman.com slash photos. Jason hartman.com slash photos and get your photos. And if you are into voyeurism. You can go there too. And check out the photos of everybody else. How do you like that? Check that out. And for the Ice Hotel, we’ve got another registration. Congratulations to Jeff and Shannon who are joining us for the bucket list Ice Hotel adventure in Sweden. We need a few more people to greenlight this trip. Check out the details at Jason Hartman Ice Hotel calm Jason Hartman Ice Hotel calm. Also we’ve got another event coming up a J. Jason Hartman University in San Jose, California Silicon Valley, and that is coming up on March 3 very exciting event. We haven’t done this one in quite a while. We only do these about once a year. Let me just explain kind of the overview of some of our events just real quickly before we get our two guests going. Hear, basically we do a couple different kinds of events. We do our annual conference meet the masters of income property. And at that conference, I don’t talk very much. That’s basically a conference where we have a bunch of different guest speakers. And you kind of know what that’s about, probably because I’ve been talking about it lately. Then we have our creating wealth, one day seminar, okay, creating wealth. And that’s my core content that I’ve been teaching for 14 years. And we’ve had thousands and thousands of people come through that it’s sort of philosophical in nature, philosophies, mega trends on investing, things like that. And then we have Jay Chou. And we added Jay Chou, Jason Hartman University A few years ago, because people were requesting some real interactive content. They wanted to know how do i do the math of investing? How do I keep score? How do I decide which properties to buy in which properties not to buy? How do I figure out the calculations. And so this is a very hands on event where you will need a pen and paper or maybe a pencil, and you will be writing and you will be doing the equations and analyzing investments. It’s a very interactive event. So that’s what Jq is, this is on March 3, early bird pricing at Jason Hartman calm in the events section. So grab your tickets today. We’ve only got 15 tickets available at that early bird price. So we do have a partner on this event selling tickets for us as well. A local Ria Real Estate Investment Group up in San Jose, and so they will be selling tickets as well. These will sell very, very quickly. So Jason Hartman, calm in the event section for your tickets for that. So first of all, Mom, welcome. How are you? I’m fine. Jason, it’s good to have you back on the show. You’ve been on several times. And people always love it when you’re on the show and have You’ve spoken meet the Masters as well with my aunt Joan, your sister talked about the way you guys built and manage your your real estate portfolios. And then we’ve got drew Baker Drew, welcome. How are you? Hey, thanks for having me back. It’s good to have you. Good to have you and drew thanks for setting up the three way call. You know, folks, a lot of things bugged me in life. I complained a fair amount. I know that horse leaf blowers are one of the biggest evils and scourges in modern history, modern life. The other one that just amazes me and shocks me on a daily basis is What a pathetic piece of junk Skype is. We’re talking on Skype now. And it has the world’s worst user interface. And every time they update the program, it gets worse. But it does have a benefit. It has very good sound quality when it works. So I drew had to set up this three way call because for whatever reason, Skype cited it Didn’t want to do a three way call today. It’s mind boggling. Anyway, enough of my pet peeves. But you know what else really annoys me? Maybe you guys will have a comment on this. People that drive really loud cars and motorcycles. I mean, how is that legal? to have these incredibly loud vehicles that I can hear in my high rise when I’m trying to sleep? They make noise, they echo for blocks and blocks around. It’s crazy. Do you guys agree with this?

Drew 6:29
I’ve heard that there’s a strategy behind it to say that they don’t want to get hit.

Jason Hartman 6:3d
That’s for the motorcycles. But how do you explain the obnoxious cars that are modified? And you know, and they modify them so their exhaust is really loud? It’s just obnoxious, frankly. But yeah, I know the safety

Drew 6:46
every time somebody drives by like that. I just look at them and say out loud, Wow, you’re so cool. In irony, because it’s such a joke. It is really a joke, mom.

Jason Hartman 6:56
Now you have allowed car only because it’s an old car. My mom and drew have the same philosophy on automobiles, they drive them forever and get a lot of value out of them.

Joyce7:06
Why should I throw away something that works perfectly?

Jason Hartman 7:12
Well there,

Drew Baker 7:13
I’m just the steady horse. I want to just stick with something and drive it till it dies. And it’s our creature of habit. So why change it? If it ain’t broke? There you go, there

Jason Hartman 7:22
you go. Well, there is something to be said for a rational amount of frugality in life. I agree. But hey, both of you are pretty darn wealthy. I gotta say that much. You both have, you know, had different issues and frustrations with your property portfolio. And that’s what I want to talk about today. Because drew every time you come to me and talk about a property manager problem. I talked to you about how the hardest part of our business is property management. It’s where the rubber meets the road. It’s challenging, and I have recommended to you self management and I would recommend For a lot of people now, look, folks, this is not for the newbies. If you don’t know anything, don’t self manage, right away, learn some stuff from your manager, learn about management. But my mother has been self managing her real estate forever. And I always self managed my local properties when I was strictly investing locally. But now that I invest across the country about 10 years ago, and I’ve told the story many times, I became an accidental self manager of a property I had never seen, and with tenants I had never met. And I still haven’t seen that property. And you know, I have self managed very successfully, actually, several of my properties for years at a time. And the self management thing I think, is really something to consider. You know, in every area of life. Sometimes, it’s actually easier to just go direct and cut out the middleman Sometimes it’s better to delegate things, I admit, but sometimes it’s better to just do things yourself. Right. And with management, audibly, it might be counterintuitive to some except my mother. My mother is an extreme do it yourselfer. That’s what I call you an extreme di wire. Okay? She’s self manages everything and she’s got properties in several parts of the country. So I just wanted to compare and contrast these two approaches for bet. So Drew, you’ve always had managers you started buying in Indianapolis, how many years ago did you start and how many properties do you have now?

Drew Baker 9:37
I started in 2010. And it was sort of a funny thing because I’d saved up a bunch of money to put a down payment on a house in California. And when the prices went in half, I had enough to put about half down for a house. And since I was self employed, everybody just looked at you and laughed. If you were thinking you were going to get a loan, so I took the money and bought investment properties at a state that required cash only deals because they were all bank foreclosures through your network and I’m up to 10. Now, so

Jason Hartman 10:09
congratulations. I picked in Indianapolis and I have four in Memphis. Okay, so six in Indianapolis four in Memphis. And I remember you were buying stuff. I mean, you got some good buys on stuff back in 2010. So did everybody else, you know, of course, and I think the first property you bought I remember that property in Indianapolis. It was about what 55 $60,000 something like that.

Drew Baker 10:32
Oh, Jason, how dare you know, I got some. I got some amazing deals. all the places I bought in Indianapolis were between 40 and 50,000. Wow. Wow. All fairly new construction. You know, I think my prep my crown jewel was I got a four bedroom, two bath 1400 square foot house, you know, built in 2003 and I got it for 40 grand.

Jason Hartman 10:59
Oh my Got it. And so that was that was that was really a class a property, wasn’t it? I mean, it’s an adult in 2000. No, Class B.

Drew Baker 11:07
Yeah, I would say the problem is that with these areas that everything was built at the height, the market sort of evolved where everyone that came in got foreclosed on. So the neighborhood is sort of a little bit destabilized. But you know, build isn’t a build. So you got an A house, but you know that the neighborhood is probably more of a C plus neighborhood. Right? Right. Hey, house,

Jason Hartman 11:32
because because, because they were giving loans to everybody who could fog a mirror. Yeah, absolutely. So thanks for sharing that. And Mom, tell us about your situation. I mean, you were investing all around Southern California. And then you move. And I finally even though you never listen to me, I finally got you interested a little bit in investing in some of these lower priced markets. And you’ve got a couple of properties in those markets. Right. Alabama, Mississippi. Yeah.

Joyce 12:00
I do. And I had property managers for both of them. And the happiest day was when I got rid of those property managers.

Jason Hartman 12:10
I love it. And folks, I want to tell you, you can be free of property managers too, if you want. But there’s an interesting thing and I think I want to, I’m gonna take the middle ground in this discussion between the two of you on one corner, you know, if it’s a boxing match, we’ve got my mother who’s the extreme, do it yourselfer. And in the other corner, we’ve got Drew, who has property managers for all of his properties. But Drew, since I know you, you’ve been a client for many years and a friend before that. You are a do it yourselfer in many other areas of your life. So I don’t think you’re like afraid of doing this but you do have questions about it. And so I’m in the middle of all kind of referee this discussion. And here’s what I want to just start with to make the conversation faster. I do a hybrid selfie. management approach. That’s what I recommend. So the hybrid part comes when you need to get a new tenant, when you’ve got a tenant that is moving out, and you’re between tenants. That is the part where I believe you should always hire a real estate agent, or better yet a property manager just to simply do the lease up between tenants. Now really, you give them a little more responsibility than the lease up itself, okay? Because of course, in order to do the lease up, they need to meet with the tenant who is leaving, they need to get the keys from them. They need to go and say hi to them. They need to do a walkthrough of the house and take pictures and send them to you. So that you see what condition the house is in when that tenant was leaving. And you know, they can help you determine how much of the security deposit you want to give back and so forth. And you need to send the tenant away letter saying, Hey, you know, your security deposit was 1500 dollars, but I kept $300 for this, that and the other thing, and you need to itemize that. And there is, by the way, a time limit on that security deposit letter, I think in California, it’s like three weeks around the country, it’ll vary. So just know that and then you get the real estate agent or the property manager, doing all a CART services, all a CART services, if they’re a manager, okay, where they will screen that tenant, they will take applications they will advertise the property, etc, etc, and you will pay them strictly to do the lease up. Now, if you had a full property management contract, what that would include is them receiving the rent every month in handling everything. Okay? So this is understand. My opinion of this is it should be a hybrid approach. Now, Mom, the funny thing about you, and I loved I loved it. I thought it was hilarious when you said it. You said it from the stage it meet the masters. I think I was bugging you or someone had asked a question about why do you do all this yourself? You do it 100% yourself. You don’t get the help of anybody except maybe some free help from a local realtor occasionally and, and you can comment on that. And you said, Well, I’m retired. I don’t have anything else to do. I thought that was so funny. You carry comment on that?

Joyce 15:24
Well, yes. Because, you know, it just keeps you kind of active in in the game. When you’re retired, you have to go to all these stultifying women’s luncheons and raise money for charity and that is the most important thing in the world. So I like I like to begin business.

Jason Hartman 15:43
Drew, does that just make you laugh with my mom? It’s hilarious.

Drew Baker 15:49
Yeah, I love it.

Jason Hartman 15:51
You’ve got to go to all these stultifying women’s lunches.

Joyce 15:56
I mean, you have to do something with your life.

Jason Hartman 15:58
No, of course not. I

Joyce 16:00
think that’s a little bit boring to me. Yeah,

Unknown 16:03
yeah. Good.

Jason Hartman 16:04
Well, I agree. You know, I have zero interest in ever retiring. You know, I think he’ll the people that live the longest are the ones that keep themselves busy and occupied and stimulated. So I love that you do that mom, I think it’s great. But it doesn’t mean that you need to deal with every little thing on all your properties. But Drew, what were you gonna say?

Drew Baker 16:24
Oh, I just was gonna say I remember one time that’s an April Fool’s. You said you were gonna retire?

Jason Hartman 16:29
Yes, I did. I did write that on Facebook once. Yeah. Anybody who knows me knows that. That ain’t never gonna happen because I have you know, I don’t care how rich I get. I like working you know, you got to do something. You got to stay engaged with life very important thing and in my opinion. But mom, tell us about some of the issues and things that you deal with self managing your I mean, your self managing long distance, and you are the extreme do it yourselfer. Tell us a little bit about it.

Joyce 16:58
Well, let me make it suggestion. First off to drew crew, there is a wonderful organization called the apartment Owners Association in California

Jason Hartman 17:10
and the country by the way, just go ahead.

Joyce 17:13
Okay. Well, the one that I particularly belong to is the one in California, it’s $79 a year. And with it, you can run your credit reports, and every form that you ever need in the world to do everything legal is a part of that association. Plus, they send you a monthly magazine with all sorts of interesting articles. One of them is cases by you know, a landlord eviction attorney, and it’s just fabulous advice. Okay. So that would be that if you’re going to self manage, that would be the first thing I would suggest that you do.

Drew Baker 17:51
Okay. Great.

Jason Hartman 17:52
Apartment owners associations are not just for fun, go online. It’s a old usa.com Okay, so apartment owners associations aren’t just what they sound, the name is a little deceiving. I just want everybody to know that they have these all over the country. My mom happens to be a member of that one just because that’s where she used to live in Southern California where I used to live and spent most of my adult life. Let me just give you a little context here to for the conversation. We of course have sell properties nationwide through our referral network. Drew lives in orange, California in Southern California. My mom and I grew up in Southern California and Los Angeles and Orange County. That’s where both of us started investing. You know, she was investing when I was a kid. And then when I grew up, I started investing there too. And I found it to be very speculative. And I wanted to invest in better sort of cash flow oriented properties. So you’ve heard me talk about that before. But just a little context there. The apartment Owners Association, the associations all around the country that they have Have are for any type of properties. So it’s the name is a little deceiving. If you own single family homes, you know, you can still join an apartment Owners Association. And my mom does everything herself. So she runs the credit for the prospective tenants herself, does the background checks, and you can get that service yourself. I am not suggesting you do this. I think for our investors, the hybrid approach is the right approach to have. So let’s talk about that a little bit. Drew, you have questions and concerns about this. And I’ve said a lot about it. Talk to us about some of your questions and concerns and let’s just answer them for you.

Drew Baker 19:40
The first thing is, is I think it’s important to just basically started off with some assumption that you know that you’re not going to live near the property. I know you guys have some property in Orange County, or at least did or LA County. And it was

Jason Hartman 19:52
I wanted to say By the way, my mom now lives in Gulf Shores, Alabama, so she doesn’t live in Southern California anymore, of course. Neither do I. Okay, so she’s she’s across the country, just so you know. Yeah. But she also owns property in Alabama and Mississippi. And even the Alabama property’s not near her home, but go ahead.

Drew Baker 20:11
Yeah. Okay, so yeah, so you’re not you don’t live near the property, you’re not particularly handy. So it’s not like you can go over there and change the light bulb or whatever. She’s

Jason Hartman 20:19
way more hands than you might think. But go ahead. Okay

Drew Baker 20:22
All right. Okay. All right. Well, okay, maybe we’ll change the light bulb we can handle, you know, doing something more complicated, maybe. And you’re not afraid to make mistakes, you know, so make small mistakes, but you’re very afraid of making a big mistake. And then obviously, there’s exceptions to every rule. So, you know, you have to be flexible, because you’re basically a small business owner when you’re having to deal with a tenant and the tenant as almost like your employee, so you have to have some sort of business he feels to approach this and be successful. I hope so. That’s kind of the assumptions I think are fair to make. Starting off. Yeah.

Jason Hartman 21:00
And Mom, you know, if you didn’t do the lease ups on your properties each time, really, I think the rest of the stuff you do is really quite easy. So I’d like to talk about that. I see, I think the area that, like I said, the hybrid approach, hire a property manager to do the lease up, they will probably woo you, and court you to try and get the ongoing account because that’s the part that’s easiest and most profitable for them, I believe. Okay, but you don’t want to do that you want to have the tenants send you the rent every month. So mom, talk to us about how you do that. I love the way you do it. It’s super simple. You make the tenant responsible for just putting the money in your bank account. And you look online, and you’re really on top of it. You know, every month on the first you look and see if those deposits were made. Talk to us about that.

Joyce 21:56
Well, the first thing before that happens you have to let that tenant know that you are an absolute stickler for getting your rent on or before the first day of the month. And that’s what makes it easy. Well, I do that when I meet with a tenant, of course, you want to let the real estate agent handle that? Well, the first mistake they’re going to make is that they’re going to give the tenant that grace period in the reef. And so when it says, you know, when the rent is due, you cross out that grace period thing and you say zero days, and then you inform the tenant, that the late fee will be $70 if the rent is not there in your bank account rather on the first day of the month, and it is $5 each day until the rent is paid in full.

Jason Hartman 22:52
Okay. Let me say something on this. Let me say something on this. The laws regarding late fees do vary, but yours is actually in Not that bad mom, you’re actually kind of easy about it, remember it meet the Masters, when one of our property managers said it’s $25 per day. And I asked them, and that was in Memphis, by the way. And I asked him, I said, Is that legal? And he goes, Yeah, it’s legal. So, you know, you’re gonna have a tenant pay out pretty darn quick. If it’s 25 bucks per day. That’s expensive. So what you’re saying is that a lot of the leases have a boiler plate in them that say, you know, rent is due on the first and on the fourth, you’ll be billed before Yeah. Which is kind of silly when you got to stop doing that. Yeah,

Joyce 23:35
right. That’s just ridiculous, because that means you’re always going to be chasing your rent, right? My rent are typically in my bank account the first day of the month. Mm hmm.

Jason Hartman 23:47
Right. Okay. What else do you deal with on a monthly basis? Because again, my recommendation in this whole discussion, just make sure you hear me is that the owner the investor, the landlord deal With the tenant on the ongoing monthly basis, but not on the lease up in the screening, I think that’s the hard part. So you delegate the hard part and do the easy part yourself. Your tenants, you know, Mom, everybody talks about how, oh, you’re gonna get a call at three o’clock in the morning that the garbage disposal doesn’t work. I mean, I never get those calls. That’s just complete. Like,

Joyce 24:22
that’s ridiculous. First of all, that’s ridiculous.

Jason Hartman 24:25
Tell us about that. Your tenants bug you all the time. This is what people envision. No.

Joyce 24:30
Yeah. Okay. No, the longer you have the tenant, the less hassles you have with that tenant because they start regarding it as their house and they start fixing things. So you never get those. The garbage disposal is clogged, the toilet is clogged. And besides your lease states very clearly, that any garbage disposal that is plugged up because the garbage disposal works perfectly when they take over the house. That is their response. ability to call the plumber, because they’re the ones that put the bad stuff down. It’s the same thing with a toilet. The same thing with changing light bulbs. The same thing with a yard. They’re responsible for watering for growing, edging, trimming, all of those things are clearly spelled out in the leaf. And you do not get those kinds of calls. That’s ridiculous.

Jason Hartman 25:21
I know. It’s kind of like all the lawyers that talk all about this asset protection, you know, this huge need for more asset protection. You know, what if the tenant does a slip and fall? I have never heard of that lawsuit ever. I mean, I hear people talk about how it could happen. And it could I admit that, but I’ve never heard of it actually happening. Mom, have you ever had a slip and fall lawsuit or has a tenant ever actually sued you for anything other than you know, like a dispute in the rent or an eviction when you’re trying to evict them?

Joyce 25:53
No, they’ve never.

Jason Hartman 25:55
And how long have you owned a rental property for 40 years now? someplace, you know, his stuff is just folklore. A lot of times this is just mythology folks

Joyce 26:05
about 1980. I would say,

Jason Hartman 26:07
okay, since 1980, you’ve owned rental properties and a tenant has never sued you drew questions. Oh, I was just gonna add a point of humor. So my wife growing up the bottom unit, the kind of bottom two bedroom apartment that she she lived in a house where the top unit was the main house and the bottom unit was the granny flat and her grandma slipped on the front porch and had fractured her hip. And her parents said, we’ll sue us because that way you can take advantage of the homeowners association.

Drew Baker 26:43
That’s the one that I’ve only heard of. So grandma.

Jason Hartman 26:47
Okay. So mom with this ongoing monthly, you know, rent collection, repair issues. Do people call you and say there’s some answers cockroaches in my house, you know, send over a pest control company. Do they do that kind of stuff?

Joyce 27:05
It’s not my responsibility to do pest control, planning. And you know, you’ve had the company come in, you know fumigated, okay, type of thing. That is a tenant responsibility. That’s my judgment. Okay. And I will not I had a tenant in Canoga Park, who, after three months, she said, the dog got fleas in the backyard. And I said, Well, most people have their backyard sprayed when they have pets. You know, it’s just not your responsibility.

Jason Hartman 27:38
Yep. So here’s the other thing, Andrew, you know, and all the listeners, I’ve talked about this many times when it comes to the self management discussion. The property manager has an inherent conflict of interest. A lot of good property managers will get complaints on Yelp on you know, online, right? Because they’re tougher. With the tenants, you got to notice whenever you’re looking at a property managers reviews online, who are they coming from? Are they coming from owners or tenants? The property manager is inherently and I feel a little bit bad for them. They’re caught in the middle. So they’re trying to serve two masters and you can’t serve two masters. That’s the rule of life, right? It’s an inherent conflict of interest. So they will tend to maybe be soft on the tenant, costing the investor or the landlord or the owner more money, because they don’t want the tenant to go write bad things about them online. You know, they don’t want to argue with a tenant about stuff so they’ll give your money away. It’s kind of like these liberal politicians, you know, they give other people’s money away so that they can be seen as the nice guy like their frickin Robin Hood or something. You know, it’s it’s ridiculous. Talk about like, the late Ted Kennedy. Oh, he was such a nice man. No, he was a person who stole money from some people and gave it to other people to buy their vote. He’s uh, you know, I mean, how is that generosity? Yeah, everybody’s generous with someone else’s money aren’t they? Crazy? Less we digress. Well

Drew Baker 29:10
don’t let him drag you don’t let him drive you to a party. Yeah,

Jason Hartman 29:13
exactly. So, oh, Haha, yeah Chappaquiddick Chappaquiddick.

Joyce 29:19
Why don’t we talk about if a toilet needs to be changed or some particulars, then you might have in mind drew something.

Jason Hartman 29:30
Drew ask ask the extreme do it yourselfers. Yeah.

Drew Baker 29:32
What what I think the important thing is to say I think we’ve already touched on it a little bit. But Joyce, I’m curious. Step one, you have a vacant property. What are you doing? are you flying and putting getting posters and putting them up in the neighborhood? Yes, you know, how are you executing that to get the tenant if you’re not using a management company? I want to start there and then we’ll get into now you have a tenant. But first, how do you have a vacant property? How are you terming the unit and how are you getting the tenant?

Joyce 30:03
Okay, well, this is because I’m doing this all of my all myself and I come to Los Angeles or I go to Gulfport, Mississippi or I go to Northport, you know, Alabama and before I go there, I line up painters and gardening people because I don’t expect the property is probably going to look kanak ready. And so instead of wasting time, I will call 10 different painters and I will make appointments with them every half hour or so now you can’t control when they show up, but they will all give you estimates on painting that property and at the end of the day, you will know what’s a good price for painting that house and what isn’t. And I’ll also have gardening people show up and tell me getting the place you know shaped up what what this like to close. If you think you’ve got plumbing problems, call and have five different plumbers show up. You handle all of that stuff the first day. And in your phone call prior to ever arriving at the property, you say I will be in Los Angeles on January temps. And I would like to meet with you at such and such time. And if we can agree upon a price, you need to be able to go to work immediately or the very next day, because you don’t want to spend a lot of money on motel bills. So within three days,

Joyce 31:40
have no strangers over the band, because those people want to go to work immediately. Right.

Jason Hartman 31:47
And this is the part everybody that I am saying you delegate This is what the real estate agent or that property manager will do for you in the tenant turn but there’s Magic things about what my mom does I disagree with her doing all this herself. But you know, it’s like her retirement fun, I guess. So, whatever, you know, to each their own. But you know, one of the things I will say is, my mom gets great deals on stuff and drew you get great deals on stuff too. And I’ll just share a personal example. I didn’t even know this I didn’t realize that I have a very good property manager for some of my Florida properties. Okay. You know, I’ve been with this property manager for years. She’s great. Okay. And this is how I decide whether I’m going to have a manager or not. If they’re good, I keep them if they’re marginal or they’re terrible. I get rid of them and self managed that’s sort of how I make my decision. Kind of by default whether I’m going to do it right. And so the other day she reaches out to me I’ve got her trained now to use voxer that’s another thing that makes things very convenient. She reaches out to me on boxer says, Jason, your property on I can’t remember the address, but your property, it needs a new refrigerator and I bought Her back right away. And I say, I didn’t know I owned a refrigerator there. And she says, Yeah, you know, all our properties. They have refrigerators. Okay, well, fine. She says, and it’ll be $870 or something. And I said, That’s ridiculous. I’m not paying $870 for a new refrigerator. I said, you know, maybe we should just go to the tenant and say, we’ll reduce the rent by 10 bucks a month, and they buy their own refridge. And she was like, Oh, no, we can do that. Blah, blah, blah. You know, it’s ridiculous, right? And I said, Well, that’s just too much money. So somehow magically, she finds a better deal for me. And the next deal is, well, I’ve got this one. It was returned this refridge there’s a mom and pop appliance shop here right nearby. And this refrigerator is returned. She sends me pictures of it looks beautiful, looks perfect. Right? And you can get it for $350. It’s basically new under full warranty. It was just returned and my guy will pick it and install it and get rid of the old one for 160 bucks. I said, that’s fine. I’ll do that. But the hundred and $60 is too much. I’m happy to pay 350 for the refridge then somehow that refridge sells out from under me and I’m a little bummed out. Then she finds a new one. Brand new one on sale with delivery included. And disposal. The old refridge included, okay, from I don’t know, maybe it was Lowe’s or something I can’t remember. She sends me the link and the whole price all in for everything brand new, beautiful. refridge was like $460 Isn’t that amazing? Just because I resisted and didn’t accept what she told me. This is one of the things I’m saying, look, folks, I’m a wealthy guy. Okay, I got more than enough money, okay. But why waste it number one and number two, it makes you better to go through the exercise sometimes and push back a little bit. And you’ll be amazed just by asking a couple questions. Suddenly you See $400 It’s amazing.

Drew Baker 35:04
Yeah, one time I had a tenant who wanted a security door, you know, others have wire mesh doors on top of their door because they felt like they heard that there’d been a local break in or something. And so the property management came to me and said, it’s going to be $300 to do this. And I said, Well, if they want to add some security door to the front door, that’s their prerogative. I mean, that they rented it as is. And I said, Well, you know what, okay, I’ll do it. We can add $10 to their monthly rent, or I’ll split it with them, you know, and so they ended up going with a split, and then I thought that was fine, because they’re adding it to my property. So I shouldn’t have to pay for some of that,

Jason Hartman 35:43
in theory, it’ll improve the value of your property. Right. And so that’s the other principle I want to say and Mom, I I kind of doubt you do this, but I’m willing to do it like Drew. I did that deal on that first self managed property in San Antonio, Texas, where I didn’t know the property didn’t have a great garage door opener. And you know, the tenant sends me a note with the rent when my property manager gets out of the business, suddenly I’m self managing by default. That’s how it happened property I’ve never seen tenant I’ve never met. And he says, you know, I’d really like to get a garage door opener. So what I did is I basically said, Look, if you will pay, I think, I can’t remember the amount so forgive the exact numbers here. But I think I made a deal with him. If he would pay like $15 a month more in rent, I would buy the garage door opener, and he actually installed it. He was a super handy guy, and he installed it Now I know what some of your thinking you’re thinking, Oh my God, that’s gonna create liability. You know what if he gets hurt installing it, you’re gonna get sued? Yeah, I guess so. That’s possible, but it didn’t happen. And so here I am basically financing his garage door opener. And in about 14 months, he paid me back for it and I improve the comp, the value of the rent overall. So You know, there are lots of options here. Yeah, make deals. Don’t be afraid to make deals with your tenants. A lot of times they want to improve the property. And you know, improving your property is okay. They’ll help you finance the improvement many times. This will be continued on the next episode. Thank you for listening and happy investing. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website Hartman. Mediacom for appropriate disclaimers

Jason Hartman 37:34
and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And the Sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.

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Jason Hartman hosts Brandon Cook, a young member of the Venture Alliance Mastermind. Cook describes his journey into real estate and insight into his growing income property portfolio. He talks about the challenges of investing and gives us some of the rewards as well.

Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:52
Welcome real estate investors, lifelong learners curious people. This is episode code number 971 971. And this is your host, Jason Hartman, thank you so much for joining me today, as we do another one of many client case studies. Now I know a lot of you really like hearing from young people that are doing good things in the world. And this one is certainly one of those. Our client and youngest venture Alliance member Brandon cook. We just realized he hadn’t been on the show before. So he’s on today, and he’ll share his story with you and how he’s investing and started very young and he’s been coming to our meet the Masters event and really all of our events for many years now. I just saw him in San Jose at our Jq live Jason Hartman University live event just a couple of days ago. So he’s on the show today, and I think you’ll enjoy it but couple of housing stats for you some of the latest stats This is from our friends at NAR National Association of Realtors. I used to be a member for many, many years. They publish a lot of stats, you got to take them with a grain of salt, because, hey, they’re out promoting their agenda. So just understand that but hey, stats are stats, I’m assuming the stats are accurate. They do some good research. So thanks to them for this data today. So home sales, home sales are very strong. They are ticking along at a an adjusted rate of 5.38 million looking like what’s gonna happen. The median price is about $240,000 just in December Now remember, there’s always a lag in these statistics, a lag because is it you know, it took so many years for NAR to finally come around. And create a pending sales index which I could never understood what took them so long to get to this, but they finally did it. This is not pending. Remember, things have to close. And then they have to get the data from all of the various county recorders and the places they get data from the MLS systems. And so there’s always a lag time in this stuff, understand, lag, lag lag, the stats are almost always 60 to 90 days behind. So literally, when you’re hearing about housing stats, they are number one, they’re never localized enough. That’s the first problem. But number two, they lag like a whole quarter a quarter of the year. They’re a quarter behind many times. So this is from December. New Home Sales, reporting in at 625,000. When we look around the country, and we look at January, and we look at the median number of days on the market, right? The red hot places are mostly the usual suspects, but not completely, not completely the usual suspects. They are mostly the cyclical high flying markets with glorious highs and ugly ugly lows, lots of bankruptcies and foreclosures during the bad times. And home sales are clicking along at a very very rapid pace in places like the Socialist Republic of California. Washington State very hot Oregon, not as hot but still moving well Nevada where where I live in the no income tax state of Nevada, Utah, very hot Colorado very hot, but oddly ready for this one. This one is outlier, where our friend Rand Paul is from his dad spoke at our meet the Masters event Ron Paul, right. He was one of our keynote speakers. Kentucky, Kentucky market homes are selling in less than 31 days, less than 31 days. And looking around the country, you know, most of the country, it looks like things are selling in 46 to 60 days. That’s the vast majority of the country. So that’s kind of interesting to look at that stuff as well. So what we have coming up in the world, what do we have coming up? Well, we’ve got our first Northeastern event coming up, Carrie and I just got off the phone with our national Yes, we’re moving up in the world. We now have a national accounts manager. We are looking at locations in Philadelphia. We may not pull that off. By the way we may end up in Washington, DC In May, working on event in Washington, DC or Philadelphia in May, so more to come on that. And then also our venture Alliance mastermind in the Big Apple, New York City in May as well, of course, sooner than either of those is the Ice Hotel coming up in just about a month. Well, a couple days less than a month. That’ll be just great. A bucket list once in a lifetime trip to the Ice Hotel in Sweden. So if you’re interested in that, let us know. We may if we’re lucky, be able to get you a room. And ice cold art sweet. Yes. One night in there one night in the warm room. Don’t worry. People don’t die in these rooms. They they live but they are really glorious. It’s just a such a unique thing. Look it up. Don’t google it because Google is evil. Bring it, bring it bring the Ice Hotel in Sweden. And check it all out. It’s really neat. So what is the most expensive market? Well, I just got back from they’re the most expensive housing market in 2017. We just had our Jason Hartman University event there in San Jose. Technically it was in Sunnyvale, but San Jose, Sunnyvale Santa Clara, that Metro. The price of Whoa, whoa, whoa, whoa. $1,270,000 Do you know what the cheapest market is the least expensive housing market? Cumberland, Maryland, weighing in at just $84,600. That actually kind of surprises me. I mean, not in a really blighted area in the inner city of Detroit. I guess not because it’s always a metropolitan area. It’s always an MSA. You know, it’s just like voting districts. Right. You’ve heard the term Jerry. meandering right? Well, the gerrymandering concept of course, if you forgot what it was, you probably learned it in school. That concept is where the Democrats and the Republicans, they will cut things up to try and get the election to work in their favor right? They do this because the republicans absolutely suck at public relations. And they never seem to get their message across the democrats always seem to own the message even though their philosophies the less desirable of the two. Not that either are that great. You must be a libertarian because it’s the only way to be it’s the only honest answer in politics. But anyway, our misnomer that we have a binary system because, hey, the powers that be want us to be arguing with each other all the time, right? They would make you think because the democrats are much better at campaigning, and much better at public works. They would make you think that Oh, those evil republicans are doing all the gerrymandering, right? No democrats do it too. They both do it. You know, it’s, it’s just the way it is. So gerrymandering is pretty much like the essays, but the EM essays, so far as your humble host knows, do not change every four years or every two years in an election cycle. But, but they do cut up in odd ways, where you get good areas, bad areas, maybe that’s the reason Detroit wasn’t the lowest price homes or some funky area and, you know, North Dakota, right, or something like that. Just because, you know, you’ve got a lot of very nice areas on the outskirts of the very bad inner city of Detroit, right. So that’s what happens there. Oh, okay. Well, hey, let’s get to our client case study. And let’s look at young people doing Great stuff. And also remember that we have a junior membership now, a just newly announced Junior membership for the venture Alliance available. Prices nice. So you younger members, we want to get you involved. We want to get your new thinking we want to get your excitement and enthusiasm for life in the venture Alliance. We just think it’d be fun, so that’d be good. We’d love to have you What else? Oh, yeah, book recommendation. I’m always going through tons of books, tons of books. As far as just audio books alone. I probably do a good hundred and 50 of those a year. So average of maybe three a week. I’m always learning stuff. It’s almost like a compulsion and addiction. It’s like OCD. I must be learning. abl always be learning always be learning. Well, an oldie but a goodie. You know, I’m always telling you, you had got away Watch old movies, and you got to watch old TV shows, and even read old books. You got to do this. So you gain a perspective, for many reasons, not the least of which is to watch how far society has fallen. Yes, it is an amazing time to be alive. But in many ways, society is just falling apart. I don’t know whether I should be an optimist or a pessimist. Some days, I just don’t know. But mostly I’m an optimist. So there you go. The famous the late, great, Peter Drucker, the management guru of the century of the last century, right. An amazing, amazing person. You know, I haven’t studied his stuff for several years. I check in with his his works once in a while, and they will live forever because they are brilliant, brilliant, brilliant. Peter Drucker was a brilliant man. No question. Anyway, the effective executive, well, that was really good. Now it’s about management, but really not relating to property management. Or it’s related to corporate management, but it’s also related to self management. And I don’t mean that in the sense of self managing your properties, I mean, managing oneself, right self management, Peter Drucker, highly recommend it. Really good stuff, not about real estate, but about management and life. And it’s interesting to go through that material and it’s just so old fashioned, but in a good way, in a good way, in a very positive way. So Peter Drucker’s effective executive, I would highly recommend, so not a real estate book, but a good one nonetheless. Okay, let’s dive in and talk about a plank case study. Today with Brandon, here we go. I’m looking forward to sharing with you another great case study today and I love it when we have our younger clients, Millennials, Generation Y, that is really making a difference in their own lives and the lives of others, inspiring us to be better investors and, and just better all around people. Brandon cook who is on With me today is our youngest venture Alliance member he joined right as a founding member right in the beginning a long, long time ago. It’s just great to have him here. He’s a fighter pilot in the Navy. He’s the only guy I know that knows how to land and take off on an aircraft carrier. Brandon, welcome. How are you?

Brandon Cook 13:50
Hey, Jason. I’m great. It’s really good to be on the show.

Jason Hartman 13:54
Yeah, I can’t believe that through all the years we’ve known each other that we haven’t had you on the show before. I mean, you’ve spoken a few words here and there, like in a venture Alliance event when we’ll pass the mic around. But we haven’t really done a show about your journey, you know,

Brandon Cook 14:08
like small appearances, but nothing, nothing dedicated then on some of the other, the other shows in the Hartman Media Group, but not this one. So I’m looking forward to a good discussion.

Jason Hartman 14:18
Yeah. Well, it’s good to have you on thank you in advance for sharing your story with clients. And it’s really quite inspiring. Because, you know, I remember seeing you way back in maybe 2009 or 10, eight, nine years ago, maybe more even at some of our meet the Masters events back in the old days. When did you discover my podcast, for example, and how did you get involved with us and what was the start of your interest in real estate?

Brandon Cook 14:45
Well, as far as my interest in real estate that came from reading, Rich Dad, Poor Dad reading some of the other Kiyosaki books and he lists different asset classes. Real Estate interest me the most because it was something I knew I could go on deployments with. It would still kind of keep around and you know, I wouldn’t if I did a small business as soon as I went on my first deployment in the Navy, it fall apart so I was looking for something passive and more proven system. And then that’s how I found you. You were one of the first companies that I basically sought information from, believe it or not, I found you in print. Can you believe that? I don’t know. I don’t know if he still marked it in print at home. I don’t

Jason Hartman 15:26
really not really we we don’t really advertise at all anymore. But what did tell me what you found. I found

Brandon Cook 15:32
an ad it was an ad in in like an Entrepreneur Magazine are so I was in a bookstore and saw a small It was kind of like in the back pages where they put like 12 ads on a page, you know, there was your role there. facia, you know, item properties investor and when I went home and googled you, I think it was Google but yeah, yeah, it wasn’t it was like

Jason Hartman 15:55
this was around back.

Brandon Cook 15:58
Yeah. 2009 Okay. I found the creating podcasts. And when I did I subscribed. I remember the newest show was get this episode 48 Oh my

Jason Hartman 16:11
gosh. So as we speak, Episode 959 is being released today. And you know, I don’t know when the listeners will hear this obviously they may hear away in the future we may be in Episode 1700 by then. But Episode 48 was the first show you heard that is amazing. Oh my god, what was I talking about? And did I make any sense?

Brandon Cook 16:36
It was it was I can’t remember. I mean, it was some of those early shows had a lot more core content, real estate. And I loved it. So I didn’t just start from there. I went to just episode one and just listened through that. Wow, I think it took me to, you know, Episode 60 before I had caught up and then then I was just listening to each one. It was one a week or one every two weeks. back then. And now I’ve been listening to you ever since the first event I went to was at the it was Hyatt Regency in Irvine. It wasn’t in the room.

Jason Hartman 17:10
Yeah, it was in that room. I

Brandon Cook 17:12
remember that. stadiums audience style room. It was it was a side room, maybe? I don’t know. 35 to 40 attendees.

Jason Hartman 17:21
Yeah, yeah. Yeah, I remember that. I remember when you were there. And I think the one you were at was the one where one of our clients and he’s probably listening, and I’m gonna forget his name. Sorry, but he actually made a song. For me. He made a song out of my 10 commandments, and he brought his guitar. And he flew out from I believe it was North Carolina, and he performed the song about the 10 commandments and refi till you die. Like principles. That was awesome. We got to find the recording of that. It was so great.

Brandon Cook 17:53
Yeah, that was it. That was the first event I bought my first property with you. Shortly after that. Meet the Masters in Phoenix, and then just started buying one per year to kind of today where I have six rentals.

Jason Hartman 18:07
Yeah, absolutely fantastic. Okay, and so you’re 31 years old. So young guy, you bought your first property in Phoenix that that wasn’t where the meet the Masters was. I just wanted to make sure that was clear to the listeners. That was back when we were recommending Phoenix. So you made a lot of money on that property because Phoenix went up, we can’t recommend it anymore, because it’s too expensive. Now,

Brandon Cook 18:29
that was a great property. If I could have afforded 10 of them. I would have, you know, obviously hindsight is 2020. But it’s because it was so cheap. way below construction. Nearly half. I mean, I think I remember doing the math, it was like $42 a square foot that.

Jason Hartman 18:45
Oh, my gosh, you can’t do that anymore. Yeah.

Brandon Cook 18:49
And here I am trying to figure out how to get a mortgage for the first time because I’m at this point on 23 I believe 23 or 24 and You know, had never been a renter my whole life and was kind of nervous. I’m like, What is going to happen with this? I’ve never seen this property. But, but honestly, your educational material gave me that confidence to go on. That’s fantastic.

Jason Hartman 19:14
You know, Brandon, you’re definitely one of our youngest clients starting at age 23. I mean, you’re not the youngest anymore, but we’ve got some young clients, but 23 is pretty young. That’s just awesome. That’s just awesome that you, you did that. Obviously, it’s working for you. So that’s just great news. Now, the other interesting thing is, you got your family involved with this. I think you got them involved. Maybe they got you involved, I don’t know. But your mom and your dad come to our events. I’ve met them both several times. And tell us about that. What are they doing?

Brandon Cook 19:44
Sure. So my dad was the first to hop on board the real estate bandwagon. I took him I think my second meet the masters. I took him with me so and he went to nearly everyone after that there was a year To in there that he and I both missed, but for the most part we’ve been been an ever meet the masters. My mom’s more recent. She just came to this last one in January. And as far as properties Yeah, I convinced my dad took him a little bit to act. You know, and I have talked to you about this, I think, at one of the property tours, you know, just said to Jason, my dad, he, he understands the material. But taking that first step jumping into that first property, it’s a big obstacle, big barrier for him. And honestly, I think, especially with your young listeners, that’s probably an obstacle that they have is well, it’s always the first one that’s ours, isn’t it? Yeah,

Jason Hartman 20:42
it is. And, you know, maybe Brandon, you know, because you’re a fighter pilot. Maybe you can draw some comparisons. Of course, everybody thinks being a fighter pilot is like super cool. At least I do. We all saw Top Gun and you know, you guys have this great coolness image being fighter pilots. For sure.

Brandon Cook 21:00
It’s not like the the I can assure you.

Jason Hartman 21:03
I believe you, I believe you. Yeah, I believe I believe that. But I’ve never been able to break the sound barrier and you have so I’m a little envious, okay. I want to break the sound barrier sometime. Here’s the question though, with real estate income property investing getting off out of your comfort zone to buy that first property, that’s the hardest. And I think there’s this tendency among everybody with everything in life is that a lot of us we want to learn about everything before we do it. And a lot of it, you just got to actually do it. Right. Right. You know, can you learn how to fly a fighter jet in the classroom and ground school? No, at some point, you got to actually fly right. And I think there’s some parallels for like first time investors Of course we have a lot of people that aren’t first time investors, you know, that own dozens and others. And dozens of properties now. But the first one, it’s kind of the hardest, you know, speak to that a little bit,

Brandon Cook 22:05
you know, back to the classroom versus getting in the aircraft. You’re absolutely right. In fact, I would say, sometimes we try to do too much academics and not enough execution of what you know, if you like your if you wait to 100% solution and knowledge before you act, you’ll never do anything. And I haven’t read anything that says this, but just a gut feeling is that younger generations and millennials and younger, I think this is going to be a worse problem for those generations because we grew up in the information age where information is so easily shared and you can binge read you can go ahead and knowledge and not in actually execution. So as a fighter pilot, you know, you have to be able to scan quickly. If the solution is there, then you pull the trigger. Mm hmm. You You know employ the the missile or bomb or whatever it is you’re doing. I’ve also heard the other kind of analogy that’s like, people that will aim forever, you know, Ready, aim, aim, aim, aim and never fire. Right. Yeah. So, I guess, with my background with being a fighter pilot going through that training, I think absolutely that helped helps me in my investing, and soon my entrepreneurial endeavors. Mm hmm. Of course gonna become knowledged in what I can, but I’m gonna go for a 90% solution, realize I’m gonna still make mistakes, most likely, but it becomes time to do

Jason Hartman 23:33
Yeah, all real life education and real life training is on the job, if you will. So it’s on the job of being a real estate investor. It’s on the job of doing anything you’ve got to actually do there is a certain learning that comes by doing only and, you know, look, I kind of hate to use this comparison already because it’s a family friendly show. But I’m sure everybody listening has made love before. Okay, could you read about that in a book and understand it? No, you know, there’s no way to read about that academically, right? You just have to actually do it. Right. You know, I think that’s kind of a it’s actually a pretty good comparison. I hate to bring up that, you know.

Brandon Cook 24:20
Speaking of love, you know, it’s Valentine’s Day. You didn’t mention that in the intro.

Jason Hartman 24:25
I know but but they’re not gonna hear. They’re not gonna hear this for probably a couple of weeks.

Brandon Cook 24:30
Do bachelor guys talking to each other on Valentine’s Day? I can’t think of anything more lonely.

Jason Hartman 24:36
I know, man. Life is. Life sucks.

Brandon Cook 24:40
Yeah, Valentine’s Day. Yeah, that’s what all the single guys say. Yeah. Well, I don’t

Jason Hartman 24:45
know. I think it depends. I think as far as the related like the Valentine’s Day episode that actually goes out tomorrow. So you know, folks, you will not be hearing this obviously on Valentine’s Day. You’ll be hearing it in a couple of weeks. Okay. But the Valentine’s Day episode that goes Tomorrow as Episode 960 is a good follow up to when I have the author of the Five Love Languages on the show, which was a good Valentine’s Day episode too. But what was I gonna say about that? Oh, yeah, I think people who are either married or in relationships I’m guessing this is nobody knows, because you never get any real data on this. I think people in relationships and marriages they kind of toe the company line if you will, and they want to be good people and so you don’t really get like honest data about how is it you know, what’s the like, and then there are the complainer they’ll just complain Oh, it’s terrible or my wife or husband this or that. But I think the 20 to 25% of them that are happy are probably like the luckiest people on earth. Because that’s just you know, it’s life’s greatest gift. Possibly, you know, maybe children also. So, yeah, anyway, little sideline there once we get off on a tangent

Brandon Cook 25:58
overcoming the analysis paralysis and acting and and to bring it full circle, although that was maybe an obstacle for my father at first he is in two property area. He owns two and he’s getting into his third right now. And my mom has I think she has one and is in escrow on her second and then my sister with her brother in law are on five or six in Memphis. So yeah, it is a family affair now and it works in our conversations at you know, home for the holidays talking about this real estate things awesome works. That’s awesome. Hey, Brandon, how old is your sister? My sister’s 32. We’re nearly a year apart. Yeah.

Jason Hartman 26:38
So she’s a year older than you and she’s accumulating quite a few properties too. It’s interesting that the kids are buying more than the parents. Yeah,

Brandon Cook 26:48
it’s kind of interesting. Yeah. Yeah. They, the parents were victims of the conventional model. They been employed their whole lives diligently contributing to a money market. It counts and, and of course, that doesn’t really secure your retirement, especially in an inflationary environment. We’ve, you know, come to discover

Jason Hartman 27:08
well, right, yeah, no, that’s definitely what most people do. And we’re trying to talk them out of that, that standard plan. So that’s good. But when you were talking about learning versus doing basically, that’s what it came down to, you reminded me of two things. Number one, one of my favorite quotes, let me see if I can remember it. Because something like this successful people make decisions quickly, as soon as all the facts are available, and change them very slowly, if ever unsuccessful people make decisions very slowly, and change them often. And, you know, that’s the thing when you just go for it to some extent, and you force yourself to get out of your comfort zone to be uncomfortable, you know, and you just get in there and you look, you know, look, I’m a capable person. I’m gonna figure it out. I’m not going to know everything before doing this, there will be some mystery, but I’m just going to jump in and deal with it as best I can. And those are the people that just went in life because there’s just a certain amount of like, extra credit you get from life or, you know, points, you just get a certain amount of points and wisdom from actual action. It has like its own inherent value. And it also reminds me of one of my favorite books by Michael Masterson. That’s his pen name. And I had him on the show. It’s called ready fire aim. And that’s what you were talking about. And I, I heard, you know, one of our clients, Doug Guttenberg, who’s been on the show before and you know, Doug Brandon, yeah, he was in the Navy also. Or maybe it was the Marines I think was the Navy. He talked about how, when you learn to shoot, that’s actually the technique because the way your brain works, and maybe you can speak to this, you actually have to Fire almost before you aim. And I know that sounds completely weird, but he explained it really well to me. I don’t know, maybe you got some of that in your military training, and you can speak to it.

Brandon Cook 29:11
Yeah. Yeah, I also think that what he maybe also talked about there and that example was that you can dry fire or shoot without, you know, pull the trigger, work on your grip, you can do all that without a bullet in the chamber. And you’ll be smooth all day, but then as soon as just the cartridge is is put in the breech and you know, that you’re actually going to send around downrange. It changes your, your technique, it’s like, psychologically, you know that you’re actually going to shoot the gun, and it changes and I see that too with my pilot training as well. We’ll do just dry runs with no ordinance all day as soon as we have ordinance coming off the aircraft or shooting the gun. We don’t fly as good of a profile a weapons delivery profile. So there is that there’s that psychological element where reading it in the book and visualizing it is important. You’ll be a perfect investor in that realm, right? You move actually executing, it’s gonna be different. You’re gonna make mistakes and think back and go. I can’t believe I made that mistake. Right. And that’s okay.

Jason Hartman 30:18
Yeah, we all we got to just do things in life, I always say, and my saying is cultivate rational recklessness. Be willing to be a little bit reckless in your actions, because otherwise you’ll just never take any actions and you’ll be textbook smart. You know, you know, the world’s full of educated derelicts as the same goes, Brandon, what have you learned over the years as an investor as a young investor, share, like any tips, you have any technology, you use applications, organizational techniques, and it just anything you want to share?

Brandon Cook 30:51
Yeah, sure. I learned, man. There’s a lot that I’ve learned that I can’t even think of. It’s, I would say productivity is something I I really, really struggled with early on. Maybe that’s a product of the information age to that kind of lack of focus or not distraction to the idea. So when I initially started investing, I was severely disorganized. I was not keeping track of my books. So I didn’t know where money was going in and going out. And I started doing my own bookkeeping. And I think that is a must. Everyone should either do their own books, or even better you pay someone to do your books for you. Because if you’re going to be a investor and an entrepreneur, you’re more or less you’re making decisions, leadership decisions, and working in teams. You shouldn’t be pushing paper and in the mechanics, that’s not really the life of an investor or a business owner. Real Estate Investing is kind of running its own little business.

Jason Hartman 31:52
It’s definitely a business. Absolutely. Yeah,

Brandon Cook 31:55
it becomes it’s kind of on business. Even if you have property managers, So I think that was it was a mindset shift, I think, for me initially was to learn how to delegate and learn, you want to have good records, and then make decisions based off good reports, you know, so early on doing books and and having my income statement, having my balance sheet and reviewing them once a quarter was an absolute must a, I was stalled until starting that

Jason Hartman 32:26
what we’re using, but it’s, it’s

Brandon Cook 32:31
moving away from again, QuickBooks is the standard and I’m not going to learn QuickBooks, I’m going to pay someone to start doing that for me, but it’s into it as well. So it’s gonna move over very easily. And I just recently started using the property tracker as well, so I can actually track more investment specific.

Jason Hartman 32:48
Yeah, so So in other words, Quicken or QuickBooks is used for the General Accounting, but property tracker is used for the specifics of managing the real estate itself, managing the leasing calendar, the insurance calendar, you know, the taxes, you know, helps you do your taxes. It’s just a great tool. I love property trackers. So that’s that’s good. Okay, good. Well, we got to wrap it up. But you know, just any other comments you want to share with our listeners. You know how why to do it. We want to talk

Brandon Cook 33:19
about pension Alliance.

Jason Hartman 33:20
Oh, that’s right. Thank you for the reminder. Yes, just quickly, with Brandon’s help. So thank you, Brandon, for helping on this. You were one of our founding venture Alliance members, we developed a junior membership to welcome some younger blood into the venture lines. So if you are under 35, you can join the venture Alliance now for $5,000 per year rather than the normal fee of 8000. For two people, it’s 7000 per year if you’re under 35 versus 10,000 for the normal fee. So Brandon, hopefully now you’ve talked to a couple of our clients about this right

Brandon Cook 33:58
now I have it Oh, okay. Nice. Yeah, no, yeah. Okay. Now Yeah, I had some issues with contact numbers. I had a number that was bad and, and I was looking to get another couple. So stay tuned for some of you I will be reaching out just to explain how much value I pulled from being in the venture Alliance and also answer any questions about kind of the normal flow of our weekend and things like that. And I, I didn’t mention that in my case study earlier, but I was able to join for the very first event and it was very valuable for me to surround myself with other business owner who will really with business owners because I don’t have any business other than my six rentals. Being an entrepreneur is about being creative and about surrounding yourself with others and overcoming obstacles. And that’s all you know, all we talked about at the venture alliances. It’s a positive weekend. It’s a positive event. And so I’ve felt honored honestly to be in the presence of the other members. And I thought, well, this would be a great opportunity if, if more younger of your clients could get on board. Yeah,

Jason Hartman 35:06
we’d love to have more younger investors in the venture Alliance. That’d be great. And venture alliances our elite mastermind group. It’s a lot of fun. Brandon, you joined us at our first event in San Diego. You went to Dubai with us and Jekyll Island in Newport, Rhode Island. You’ve been on all the trips, right? Have you missed any of them? I miss Chicago. Chicago trip. Okay,

Brandon Cook 35:29
God, I came in for the last day. That’s right. Yes, I had another weekend engagement. But yeah, other than that, I’ve made every single event. It’s been fun.

Jason Hartman 35:37
Good, good stuff. Well, thank you so much for being involved in venture Alliance. And if your peers are out there listening Brandon, your younger peers who are interested in real estate investing and entrepreneurship and and just having fun and going on neat trips. And you know, once in a lifetime experiences, join us go to venture Alliance mastermind calm, Brandon. Thank you again for coming on and Sharing your your story and your case study with us. We appreciate it. appreciate being on as well Jason, thanks. Happy investing.

Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website Hartman. Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.

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Jason Hartman starts the show discussing the lack of affordable housing. Supply continues to drop across the nation. Jason gives his advice on how to profit from this. In the interview segment, Jason continues a two-part interview with Scott. Scott gives us insight into how Jason’s network helped him complete his 1031 exchange. He also tells us about the difference in self-management in office space versus residential.

Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:52
Welcome listeners from around the world. Thank you so much for joining me on a windy day from the Windy City. Do you know what the Windy City is? While most people think it’s Chicago, I disagree. I think it’s Las Vegas. It is windy today. Beautiful clear. Not too cold or cool. It’s a little bit cool just ever so slightly cool I should say it’s in the 60s. And it’s gorgeous out but it is windy. Las Vegas is the Windy City. I’m telling you. We are going to have 30 mile an hour winds today. So I Love it. Love it. Love it. Love weather phenomena. I think it’s super interesting when when the weather changes. I love it when God puts on a show. And he does that with whether he or she sorry, I don’t want to offend any anybody. So there we go. We have got part two of our interview with Scott and Kelly today hearing about their client case study going from shopping centers to single family homes, lots and lots of them using the 1031 tax deferred exchange. Income property is the most tax favored asset plants in America, and the most historically proven asset class in the entire world. But before we do that, you know, I’ve talked a lot about the inventory shortage, the lack of supply in the marketplace. We’ve talked about absorption rates. We’ve talked about, hey, why aren’t there enough properties in which to invest? You know, why was the supply so limited? Well, that may seem obvious. And I’ve talked about many factors that are influencing that. But one of them was given a name by none other than one of our meet the masters of income property speakers, and one of our multi time guests on the show, and that is a real estate market researcher john burns. He calls it the barbell, the barbell that is crushing the supply of affordable homes. And so, a barbell as the name would imply, has weights on either end right waiting the bar and of course You’re gonna benchpress this barbell or whatever and the weight is on both sides of the barbell. Otherwise, it would just be a dumbbell. Well, no, it’s actually on two sides of a dumbbell too, but you get the idea. I’m not gonna go into trying to explain this anymore. The barbell of housing demand, and I’ve talked about this a little bit before, but this article with some statistics, I think will help you really see how formidable This is. And then I will attempt to provide a solution for you before we get to part two of our case study today. So first off, we’ve got the millennials. Now the millennials, we talk a lot about these millennials, this generation, I tell you, they were the most coddled waited on catered to generation in world history, right. We all know about the millennials, Gen Y. We’ve talked about them a million times, you’re probably sick of hearing about them. I’m getting a little sick of it too, but Anyway, they are finally moving in to the housing market. Yes, they are. The oldest millennial today is what that would make them about 35 years old or so. This is the generation right after yours truly a Gen X or myself. And then I followed my generation followed the baby boomer generation, and before them was the mature generation, okay, what’s sometimes known as the greatest generation, right? And so, here we have these millennials. Now, they are not moving into the housing market in any great compared to what percentage, right? Because you’ve got their entire demographic cohort, about 80 million strong, slightly bigger than the baby boomers at about 76 million. I know these numbers vary because they’re kind of guesses, you know, demographers will fudge around the edges. They’ll say that well, you know, if you’re a Gen X, or you’re really this Hear that you’re in terms of birthdate, if you’re a millennial, you’re really this year to that year. And there’s a little bit of disagreement here. There’s a little bit of disagreement as to the size. And hey, we’ve got all this on documented workers, or as Hillary Clinton calls them workers without papers. And you know, we don’t exactly know how many people we have in the country, right, or how many aren’t in each demographic cohort. But we do have a decent idea. So that’s the number we’re going with. We’re going with 76 million baby boomers, we’ve got about 40 million give or take Gen Xers and we got about 80 million millennials or Gen wires, and then we’ve got Generation Z, hey, in a few years, we’re going to be talking about Generation Z and then you’re going to be sick of hearing about them too. But by then you’ll be so rich from all your real estate investing that hey, you won’t even care. Okay, so we’ve caught the millennials now compared to what is always the question to ask, see, they are moving into the housing market, but not in a big way as a compared to what percentage of their overall cohort. But their demographic cord is so large, it’s massive, it’s 80 million people that even if a fairly small percentage moves into the house buying market, now, most of them are renters, or a lot of them are representing the shadow inventory. They are the live at home or they’re living in mom’s house live in a dad’s house. Hey, hopefully mom and dad are actually married, if anybody actually does that anymore. I know it’s not so popular as it used to be on. And I say that’s unfortunate, by the way, but whatever. Let’s not go into that rabbit hole and talk about how the birth rate has been destroyed. And the traditional nuclear family has been destroyed and the culture war goes on. right but that’s another subject So they are moving into the market a little bit, but their numbers are so large that it matters, right? So they’re finally doing family formation. They’re buying houses to live in. Okay. But then at the other end of the spectrum, you’ve got the baby boomers. They’re the other side of the barbell, and they’re moving down. And interestingly, and this is a new trend, and it’s one that I’ve talked about, and I believe john actually talked about it at meet the Masters during his speech. It is that these baby boomers, oddly, are renting, a lot of them are renting, but some are renting and they’re just taking advantage of the appreciation built up in their homes after the last several years, and they’re cashing out and they’re moving to their empty nest home. So with the two sides of this barbell, the millennials at one end, the move down baby boomers at the other end, or even the matures, Moving down, right? They are creating a huge demand on an already small supply of entry level housing, or lower price tier housing. Now, an interesting chart here. This is a chart that burns company put out, and this database on 31 markets, interestingly, and I’m not sure why he did this. But there’s always these interesting ways to slice and dice statistics. And this is why you gotta be careful. You can’t just look at data, you’ve got to, you’ve got to use some, some reasoning with the data. All right, that’s what the brilliant human mind was built to do is reason and isn’t it scary, that we have so few people that are willing to do it anymore? If you’ve had a debate about virtually anything on social media, you know, that critical thinking is all but extinct, right? Isn’t that scary? Well, another rabbit hole We could go down but we won’t. So you’re over your change. This chart I’m looking at shows the rapid, insane decrease in low price tier listings on the market. Okay. Now, he doesn’t define low priced here. So I’m going to make the assumption that he’s doing this based on the market, but you know, in relationship to that market. So the first stat is the Bay Area of California, you know, that Silicon Valley and by the way, we’re having an event and Silicon Valley coming up San Jose, March 3, Jason Hartman university.com We look forward to seeing you there tickets have been selling briskly for that event. March 3, Jason Hartman university.com in San Jose Silicon Valley event that’s a full day. It’s a full all day Saturday event. So come to that. Join us. Jason Hartman University comm for details and tickets, so in the Bay Area, low priced here listings are down year over year by 48%. Wow, that is scary bad in terms of lack of inventory in Denver, a market we used to recommend until it got too expensive. But hey, a lot of you listening bought properties from us in Denver years ago, and you made a fortune. Congratulations. I appreciate you. I don’t know if you can hear that. But you were just patting me on the back for helping you do it. Well, thank you very much. So Denver, they are down. 44% Raleigh Durham. Hey, another market we used to recommend. Don’t have inventory there now but many of you purchase from us in the Raleigh Durham area, the tech triangle at the other end of the country 35% decline. Seattle 34% decline we’ve never recommend Seattle’s always been too expensive. Orlando many of you were at our Orlando property tour a few years ago. You bought tons of properties from us in Orlando or the greater Orlando area and low priced listings in Orlando. by many considered to be one of the ground zero locations for foreclosure activity by the way, down 32% from one year ago, Minneapolis down 31% los angeles down 29% san diego down 24% Orange County, my former hometown along with Los Angeles and San Diego I’ve lived in all three of those places down 24%. Jacksonville, a market we’re currently active in in recommending but are suffering from an extreme lack of inventory. Down 24% low priced here listings from one year ago. Phoenix 23% down Charlotte down. We’ve had hundreds of you have purchased from us in Charlotte Down 23% Tampa. Down 22% Portland down 20% Riverside San Bernardino, down 18% in Atlanta, hundreds of you have purchase from us in Atlanta. Down 16%. Philadelphia down 15% Chicago land area down 10%. Washington DC down 9% New York. Really? Is there such a thing as a low price to your listing in New York, down 9% and Boston down 7% Miami down six, Dallas down 2%. Hey, you know the only market out of this survey that actually has a slight increase in low price tier listings. I wonder if you can guess I couldn’t have guessed. It’s Sacramento, California, where my aunt Joan, who was one of our speakers and who’s been on the show. One of our meet the master speakers where she owns about 100 properties give or take in Sacramento area. So actually a very slight increase in low price tier listings in that market. So I just thought that’s interesting. Now, what is the prescription from yours truly your ROI director, Jason Hartman, what would he recommend you do? What would his solution to this be? Well, he doesn’t have a solution. Sorry about that, hey, I can’t solve all your problems. I try. I really try to solve all your problems, but I can’t solve them all. My solution is, don’t wait to buy real estate, buy real estate and then wait, get what you can get. Get while the getting is good. Inventory will probably increase a little bit as we see interest rates go up or at least, that’s my hope. I really do hope the market calms down a little bit. And I also hope I don’t regret saying that business has been fantabulous The last several years I mean, really? Well, I don’t know, really the last eight years, it’s been fantastic. But I gotta tell you, it’s hard to operate in a low inventory market. So we would like to see inventory increase a little bit, so that you would not be so disappointed when you can’t buy enough properties because we know you want to buy more. And look what will happen when inventory increases, prices will probably soften that upward trajectory and price will probably calm down. Hey, that would be fine with me, because I’m not a capital gains investor anyway, if it comes, I can spend it just as well as the next guy. But really, we invest for yield, and at the same time we see prices either stop increasing so much, or even soften a little bit. It would be a welcome change in my opinion, we will see upward pressure on rents and that’s really What were in the game for yield, increasing rents, cash flow fine with me fine with me. So that is my thought that is my prescription for you get as much as you can lock in these low rates while they last, they are going away, that ship is pulling out of port. So catch it while you can, as the ship is pulling out a port as the train is leaving the station, whatever metaphor you want to use, okay? Just buy your properties, buy good properties that makes sense the day you buy them, go and find those properties at Jason hartman.com. Click on the properties section, and we’ve got properties for you there. And our investment counselors will diligently help you find good properties. So join us March 3 in San Jose, come and meet some of our clients. We’re going to have one of our lenders there to talk to you about financing. We’re going to have at least one maybe two of our local market specialists there to talk to you about properties and their management processes in team, and you can meet them in person. So it’s a great opportunity coming out to San Jose March 3. Jason Hartman university.com of course, we’ve got our Icehotel trip coming up. If you want a bucket list experience, talk to us about that as well. You can reach us through any of our websites, including Jason Hartman calm and let’s get to part two and hear more about Scott and Kelly from Washington DC and their case study on why they moved from commercial properties to residential properties for their investing portfolio. Here you go. That’s why I created this business is because I tried to do it myself also told the story you may have heard it but I’ll just recap a really quick In 2004, I was in negotiations to sell my traditional real estate company in Irvine, California to Coldwell Banker. I knew I was going to have a big check from the sale I was thinking well you know, I’ll just retire and do rental properties and not have another business you know, at least not for a while just take a few years off or something you know, I’m not the kind of person that is very interested in taking time off, but I figured I’d find something right you know, certainly didn’t need to work but I wanted to buy more properties and build my portfolio and I wanted to do it nationwide because I’d been through a couple cycles in California they were pretty severe. I thought you know, now I’m older wiser more conservative, I don’t want to do that again. I want to invest in diversify nationwide and I was researching all these markets Scott and I was like, reading like the best places to live in America books and you know the places rated Almanac and, and then I would go online, I would just spend hours I was, you know, like trying to digest data on the US Census website, which is nearly impossible, by the way, there’s just too much there. You know, I was just trying to figure this out, you know, what are the hot places to invest? And I’d seen it before. You know, I remember when there was the big downturn in Southern California in the 90s. I saw my clients just like abandon their houses. It was amazing. And I remember I had all these vacant properties listed when I was a traditional real estate agent for for REMAX. You know, I’d saw them go to Arizona, Texas, Colorado, Georgia, you know, like places it seemed like there was a commonality of like these few sort of states and cities they were all moving to right because that’s where the opportunities were. And I thought, you know, when one market is down, another market is up because all those people are leaving and bringing their money there right. And that’s where the jobs are going the employers do it and and so forth. And I thought this is this is why you got to diversify. You know, you got to invest with nationwide. And then I tried to actually do it myself. I just flew. You know, after doing all this research, I flew to these different markets. And I mean, it was terrible. Honestly, I couldn’t find anyone to help me anyone that knew what they were doing, you know, these real estate agents I was talking to, they just, they didn’t know anything and much less. They didn’t know anything about investing, right? Like, it’s like when I was in Austin recently, and this agent was trying to tell me about the cap rates on these multimillion dollar houses. I was looking at one for rent, it was 7500 a month. And, you know, I asked her what the value of the house was. And she said, Well, this one’s worth about $4 million. And I thought that’s pretty good deal for that for 7500. Which you can do you know, and I was thinking of renting this house, myself when I when I was there a couple months ago. And she started explaining to me about the cap rates. She had no idea Scott how to calculate a cap rate. I mean, it’s just it’s just mind boggling. It really is. And then I think Well, I’m gonna be relegated to just putting my big check from the sale of the company into you know, the stock market. And so I went met with all like concurrently I went and met with all the, you know, financial advisors in the private client group, you know, for the people that have a few bucks at Merrill Lynch, Ameriprise, Charles Schwab, etc. They didn’t know anything, either. I mean, they just said the same thing. It was like the same speech. It was the same pie charts. And none of them were wealthy. You know, like, they were just talking to wealthy people all day, but they weren’t, you know, they weren’t wealthy. And I thought this isn’t the way to go. I love real estate. Why am I even here? You know? You know, I just thought there’s got to be other people that want to do what I want to do. And sure enough, there you are. There’s a lot of people like you.

Scott 20:47
Yeah, yeah. And it creates great value for people like me. I’m very appreciative that I even have the opportunity to do this. My father was invested in real estate starting back in the 80s and And he never was really able to make it work in residential, just a hard way to earn income.

Jason Hartma 21:06
He was in commercial real estate then right?

Scott 21:08
He went into commercial, he went into warehouses and other stuff,

Jason Hartman 21:11
okay, like industrial type properties. But he tried it in residential. And he said he was never able to make it work, right?

Scott 21:17
No, he was never able to make it work

Jason Hartman 21:19
told us what do you mean by that

Scott 21:20
he had a hard time identifying properties to begin with. This was before the internet, he had a hard time with knowing what to charge for rent, it cost them in a lot of fees just to get a standard lease together. And then he didn’t have a good way to check people’s credit. And so he ended up leasing to people who didn’t have very good credit. And they were actually pretty good at using the court system. So when he tried to get them evicted, they knew that they couldn’t be evicted, at least in the state of Maryland. They couldn’t be there during the winter months. They could just quit paying the rent in October. And by the time you get them into court, it’s already December. Yeah. And the judge will say Well, I’m not gonna throw a fan. out in the cold right let’s talk again in April right around Christmas.

Jason Hartman 22:03
Oh my god.

Scott 22:06
guys just got over November. Just think it’s seven months of free rent. Yeah, yeah. And guess what the next year they can do it too.

Jason Hartman 22:13
Yeah, yeah, they know how to play the game in any of these liberal, you know jurisdictions you don’t want to be a landlord folks that are just not landlord friendly. We have a client years ago I remember he used to get up at our meetings, he did it a few times. And he talked about how he owned a property in Washington DC, you know, had rented it out, and then the people wouldn’t pay and he tried to evict them and there was this rule, this law that you can’t evict someone whenever there’s more than like a certain percentage chance of rain or snow. And that is like, every day practically, you know, you’d and you’d have to pay and schedule the sheriff each time to go and do the eviction. And it just got postponed and postponed and they just Capital isn’t there for free. It was unbelievable. You know? Yeah, yeah. Wow. Yeah, that’s how it is out here. That doesn’t work. Yeah, that doesn’t work.

Scott 23:07
And you get through your company, I’m able to go out and purchase, you know, 12 homes in Memphis over just a few days or every few months. And most of them I’ve never even seen and they’re able to cash flow. Well, the checks just arrive and I speak to the property managers if I want to, but most of the time, I don’t. Right. It just works out. It’s amazing. I’m glad you’re amazed and happy with your

Jason Hartman 23:30
experience. Tell us about property management. You know, the experiences with property managers are most certainly mixed. Okay. You know, some are good, some are bad. It depends on the manager that also depends on the circumstances. luck, I think plays a part in everything in life. What are your experiences with our property managers and, you know, do you have any tips for the listeners?

Scott 23:52
I’ve had a lot of experience. in Memphis alone. I’ve worked with four different property management companies. I will say that some provide are better providing homes and some providers have a better property management. When you’re considering a purchase, you want to look at the home itself and make sure it’s a wise decision. And you can always change management down the line. We have found a property manager that we prefer in Memphis, mainly because they keep in touch with us a lot and let us know what’s going on. Other ones just didn’t respond much by the phone or the checks, rent checks would arrive late. In some cases, you know, the rent checks were missed for an entire month and we had to go back and forth for months to find out what happened. That’s no good. We have a property manager were you given the perspectives on the property when we purchased it, there was a high rent and a low rent and after purchase, they wound up renting it out at the low rents, which was a little bit disappointing, but they also leased it out for two years. Well, when that lease was over, we asked them to please raise the rent. And that’s not what happened instead, they leased it out for another two years. Still. At that low rent,

Jason Hartman 25:01
so they just ignored your instructions.

Scott 25:03
They completely ignored our instructions.

Jason Hartman 25:05
Yes. lievable. Unbelievable. Yeah,

Scott 25:08
yeah, that particular property is coming up in September for a renewal. And so we’re trying to get on top of it. We’re seven months early here, notifying them and saying, Hey, we really need to bring this up on rent. You know, according to the websites, it should be rented for about 1550 a month, but it’s being rented out for 1295. So that’s about $250 a month that we’re missing out on. We’d like it the rent to be raised quite significantly. Well, we just sent back a reply. It’s just a form reply that we’ve seen many times. Now, unfortunately, that said that they’ll try to get the rent raised by 75 bucks, but they might only be able to get 50. And if the tenant refuses, maybe they won’t be able to get that at all. Well, I don’t know. Jason, do you think I should change to another property manager?

Jason Hartman 25:54
Yeah, I think so. That sounds like it. The interesting thing is though, you know, in I complained A lot about property managers and local market specialists when they’re not doing their job. I mean, Scott, you’ve heard me on the show, and boy, I got an episode coming up for you, too, that we’ve recorded with another covers. What’s interesting, you know that you always have to keep in perspective, and I think you’re pretty good at doing this. Even though you may have a bunch of complaints, and you have things go wrong, the investment can actually still be a pretty darn good deal at the end of the day cannot.

Scott 26:29
Absolutely, yeah. You know, there’ll be some good surprises, and there’ll be some bad surprises. But once you have a few investments, they tend to even out they tend to do pretty good. On average. Yeah, if you see chronic problems like repairs or just recurring and at high expense, then it might be time to switch property management. But if one isolated incident happens, you know, I would try to work it out before I’d switch it up.

Jason Hartman 26:55
Now make sense? make sense. Tell us about like your overall portfolio and how That’s working out, you know, do you have any metrics you want to share or anything like that?

Scott 27:03
Well, we really set out to get an 8% cap return

Jason Hartman 27:08
on our portfolio Spoken like a true commercial real estate guy. cap rate.

Scott 27:15
We’re trying to replace a certain investment with another investment is impeccable cap rate or better cap rate. Our target was 8%. And it’s been performing at almost precisely 8%. But once you take financing into account it does a little better than 9%. So we get very good returns on our investments ends very regular. We don’t really worry about how much money we’re gonna make this month. We know that it’s gonna be pretty good.

Jason Hartman 27:41
Yeah, yeah, good stuff. Good stuff. Have you considered self management?

Scott 27:47
That’s what I’m trying to get away from. Right, right.

Jason Hartman 27:49
Well, no, that’s that’s why I asked you that because you self manage the shopping centers. But you know, I tell you, I have rented I think seven commercial properties. As a tenant, you know, for my real estate offices in Orange County, and man, you know, that is just a high maintenance deal in terms of the management. In many of my properties, I would see or communicate with the management every business day. I mean, that’s far different than, like now, for example, I mean, I’ve you know, I own lots of investment properties, but I rent the high rise condo in which I live, and I hardly ever communicate with my landlord. He self manages it, we’d all send him an email every three months, maybe. I mean, there’s almost no communication between us. So self management in residential is a lot different than with a shopping center.

Scott 28:40
Don’t you agree? You know, I don’t know with office space, it tends to be very management intensive. Yeah, I agree with the retail shopping center, not so much. A shop owner just wants to be able to be open and be in business and they don’t want to see their toilets. Their interior is all owned by them. They manage the maintenance of the windows and doors and They pay their own utilities. So it’s really not that bad. The problems can be, you know, on the outside of the building, if someone comes and dumps a pile of debris in the parking lot, that can be an issue. I personally have security issues at the shopping center. And so I actually go there personally to deal with that at all hours of the night.

Jason Hartman 29:20
Wow, I can see why you don’t manage if that’s your background.

Scott 29:25
Well, part of what I’m trying to do here is get away from a workplace situation where I have to answer the phone when it rings. Okay. I would rather detach, fair enough, I totally understand. So, any tips on managing your managers that you want to share with listeners?

Scott 29:42
Basically, you have to remain active and remain interested. You don’t have to be going crazy over it all the time. You don’t have to worry about it. But do read the emails. do read the reports when they come in? If you have questions, call and ask and get answers. You may want to keep track of where repair are happening a lot, because often, you will find that the same thing will get repaired over and over. And that’s something that as an owner, you can identify and make sure the property manager becomes aware of. So that next time the repair happens, it’s, you know, final. Or maybe you can get reimbursed for some of those repairs, if they weren’t, in fact, successful repairs, right? And just pay attention. There’s some signs of bad management, if your rent check doesn’t show up. If the reports don’t show up. I would be concerned and I would take action on that. Call them up and find out what’s going on. reacted, yeah, but you don’t have to sweat it. Right. You don’t have to be fearful as long as things are going well, you know, do something else with your time. Yeah, right. I agree. I agree.

Jason Hartman 30:43
What are you doing with your time other than other than your properties or, you know, I mean, you’ve still in the shopping center business, obviously. So you’re you’ve got to do that reactive. And then you know, you’ve got to do some management of your managers on your single family home portfolio, but just out of curiosity, What else are you doing? enjoying life?

Scott 31:02
I am enjoying life. Yeah, just so happens that Valentine’s Day is tomorrow and my wife and I are gonna fly to Cancun and take some time off. Uh huh. Yeah. Awesome. But other than that, you know, I’m on a quest for the best real estate investment I can find right now. I’m just looking at all different opportunities, all different styles of investing. And the worst thing about is I keep finding great investments.

Scott 31:28
So it’s so good right

Jason Hartman 31:30
now. It keeps you tempted when you keep finding these great deals, you can’t refuse. Good stuff, good

Scott 31:37
stuff. I want to try to find the best opportunity. But you know, there’s so many good ones that come up. I just I want to get them all. Yeah. It’s like being a kid in a candy store. I totally get it. I totally get it. I feel the same way. A lot of times. totally understand.

Jason Hartman 31:51
Well, good stuff. Scott, thank you so much for sharing your story. And really just appreciate this and you know, just anything you want to say in closing before We wrap it up, I just wanted to say, Jason, I said this to you and Phoenix, I really mean it, I really appreciate that you created Platinum properties. It’s improved my life, the life of my family. And as far as I expect, you know, it will continue to do so for years to come. I’m just really appreciative of the impact that this has had and will continue to have on my life. And so I just want to thank you for what you do. Well, thank you, Scott. That’s so nice of you to say that, and then thank you, we should be thanking you for being our customer. So we, we appreciate you being a client and you know, of course, appreciate your business, and will always help you any way we can. So and then, also, thank you so much for sharing your experience on the show really, really great. Every listener always says they love to hear the client case studies. So, listeners, if you’re out there and you’re listening to this, and you’re a client of ours, Hey, come on the show. We’d love to hear from you. And Scott, thank you so much and say hi to Kelly for me.

Scott 32:55
I sure will thank you, Jason.

Jason Hartman 32:58
Hey, I hope you’ll join me in San Jose. On March 3, as we host, our Jason Hartman University event, now this event is for the real practical hands on interactive education on income property investing, where you will learn how to actually do the math, how to evaluate the deals, we will go in depth into this subject of how to analyze a real estate deal. And once we do that, we’ll talk about how to build a portfolio, how to properly structure a portfolio, how to diversify it, how to sequence your mortgage financing, and it is a fun event. We do some gamification. You’ll meet a lot of people because you’ll be working with the people in the class, and it’s a one day event. You can check it out at Jason Hartman University comm Jason Hartman University comm we’ve been doing this event for about three or four years, and people absolutely love it. We’ve done it in San Diego and Salt Lake City. Now we’re doing it in San Jose. We’ve done it other places as well. I just can’t remember where offhand, but it’s a great event and we try to do it about once a year. I asked her we did it in Oklahoma City. This time we will be in San Jose Silicon Valley on March 3. Jason Hartman University comm Jason Hartman university.com. Get your tickets today, and we’ll look forward to seeing you in Silicon Valley on March 3. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional and we also very much appreciate you reviewing the show please Go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.

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Jason Hartman starts off the show today with a reminder: housing is NOT at an all-time high when it comes to payments (which is how people base their decision to buy), and housing is still where it’s at.

Then Jason has the first part of his client case study with Scott, from Washington DC. Scott owned a bunch of retail property previously, but recently sold all but one of them and shifted his focus toward residential real estate. Jason talks with him about why he made that decision, what the process was like doing his 1031 exchange, how his experience with property managers has been, and more.

Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:52
Welcome listeners from 165 countries worldwide. This is your host Jason Hartman with episode number nine 159 959 thank you so much for joining me today as we have yet another client case study. A lot of you met Scott, and maybe Kelly, at several of our events, Scott was at meet the masters. I don’t believe Kelly came with him. But they are a young couple that is doing great things with their real estate portfolio. You’re gonna hear about it today. They have moved from shopping centers, to single family homes. And I know what some of you might be thinking, why would you do that? Don’t you want to own a bunch of shopping centers and be a bigwig? Maybe not, you know, housing is where it’s at folks. Housing is where tap that is where you should be. I’ve told you all the reasons over the years over the last 14 years I’ve been saying you know, they can always outsource all the office jobs offshore. They can outsource them Manufacturing offshore, they can outsource the retail to the internet. And all of this has a huge impact. But everybody still needs a place to live. It’s a fundamental human need. What are the three fundamental human needs? Food, clothing and love? Happy Valentine’s Day by the way, everybody, it is Valentine’s Day. No, it’s actually food, clothing and shelter, and food, clothing and shelter. But I will tell you I was kind of hoping the day here today would fall on a 10th episode show because I have a special Valentine’s Day episode for you. And I guess we will run that is episode number 960 coming up, remember every 10th episode every show that ends in a zero, we run something of general interest in Hey, love is of general interest right to all of humanity. Well, almost We will run our Valentine’s Day show a little late. But hey, it’s better Nathan lover. I mean late than ever. We’re gonna get to our case study today. That’s what we’re gonna do. That’s what we’re gonna do. But first, I want to tell you a few things. The good old National Association of Realtors, you know them, that largest trade group in the world with like 1.4 million members. Yeah, they’re big. They’re big. We’ve had their chief economist on the show before. We’ll have him back again to talk about stuff but they’re out with some new research as they are all the time. today. They just published that nearly two thirds of us housing markets see home prices hit an all time high. While housing inventory hits an all time low. And I know what some of you are thinking. Is it a bubble Jason is Little Bubble Pop. No, it’s not a bubble yet, but it will be eventually. So sit tight. Stay tuned. I’ll let you know when I think it’s a bubble. But hey, what do I know? I don’t even know. Nobody knows. You know, nobody knows. The head of the Federal Reserve doesn’t know, the President of the United States doesn’t know. NAR certainly doesn’t know. JOHN burns doesn’t know Jeff Meyers doesn’t know Jason Hartman doesn’t know. But you know, we can get some clues here and there can’t wait. The question is not what is the price of the home? The question is, compared to what is it an all time high compared to the monthly mortgage payment on the home? Or is it an all time high compared to the price of the home See, there in lies the problem as you know, because you are a sophisticated A smart investor, because you listen to my show, you’d have to be smart and sophisticated to listen to my show. Otherwise, you wouldn’t be able to keep up with the superior information we are. We are sharing here. Okay, so Hi, I don’t know, I get kind of goofy sometimes don’t I? So people buy house on a payment, not a price. In fact, they don’t care what the price is. If the payment is low enough, that’s what they’re buying. They’re buying a payment. So it is not at a all time high based on the payment. And then you have to ask, geographically, where are you talking about? Two thirds, two thirds of us housing markets? Well, is that of the Case Shiller 20? Or is it all 400 ish housing markets nationwide? And that is the question we need to ask. Right? We need to know this stuff because the Case Shiller is here. heavily loaded. In fact, three fourths of the Case Shiller 20 are cyclical, bubble oriented, crazy markets that I wouldn’t touch with a 10 foot pole. In fact, where do you think that saying came from? Do a lot of people carry around like, in the old days when someone came up with a 10 foot pole saying, did people carry around 10 foot poles and decide not to touch things? I don’t know. It’s Goofy, funny saying, right. Okay, so, consumer satisfaction research. That’s boring. Who cares about that? You know, these groups are always doing surveys to say how great they are. Right? I’m not gonna share anything with that with you. But this one’s interesting also from an AR. housing affordability declined from a year ago in December, moving the index down 2.3% moving down 2.3% from a year ago, and this is just cember to December obviously, it’s it’s not December anymore as we know, because, hey, there’s a clue. It’s Valentine’s Day. We know that’s not in December don’t leave. So yeah, housing affordability declining, but still in the linear markets, it’s not far off. housing affordability is still pretty good. And that’s why inventory is so low and the market is booming. In the cyclical markets, though, man, there’s going to be a bloodbath. Some people are gonna get hurt, they’re gonna get hurt. I’m telling you, watch out. You know, we’ve got this event coming up in Silicon Valley, March 3, San Jose, hope you’re going to be there and join us for Jason Hartman University. Go to Jason Hartman University COMM And one of our clients, Greg, who was at meet the masters of course, and many of our other events. He sent me a voxer message this morning and he said, Jason, I will be there on March 3 in Silicon Valley and I am Trying to get some of my California friends to come and hear what you have to say. And I just can’t peel them away from thinking now, he didn’t exactly say this I am I’m using some poetic license. So let me run with it. Because this was the gist of it. I can’t peel them away from the fact that they think they are all brilliant geniuses, because they speculate on a house in a cyclical market, and the price went up. And you know, the old saying, you’ve heard me say it. I don’t know if this is actually an old saying like that 10 foot pole thing. But at least I say this. Everybody’s a genius in a bull market, aren’t they? Everybody’s a genius in a bull market. A rising tide floats all ships. You’ve heard that one right. I didn’t make that one up that everybody’s a genius on bull market that could be made. I don’t know. I’m not sure. I’m not gonna take credit because I’m not sure I deserve credit. But anyway, you know, if I was Bill Clinton, I would take credit for everything, even though I didn’t do it. If I was Obama, I would too. So I picked on the democrats check. What else can I do today? Okay, yeah, we can ever client case study. We talked about some NAR stats. Those are interesting course. I look forward to seeing you in Silicon Valley, San Jose, March 3, Jason Hartman calm or Jason Hartman University COMM And this is a great event. Well only have it once this year, I think you will learn the math of real estate, you’ll learn how to do the math. In fact, that’s another thing that Greg said to me. He said, You know, these California people, they just don’t know how to do math. Now. He didn’t mean that broadly. But if they knew how to analyze a real estate deal, they would never invest in these total fluff crazy nutty markets. what goes up must come Down. Hey, that’s an old saying to like that 10 foot pole thing. So yeah, just remember that the higher they fly, the harder they fall, all of these markets will eventually fall, how much longer can they go? Nobody knows for sure. But believe me, they’re not going to go forever. So that’s what you got to know about that. So linear markets, where the conservative, prudent real investors invest, that’s where you want to be. Let’s go to part one. And let’s talk to Scott about how he went on his real estate investing journey that started just 10 years ago. That’s it in 10 short years, just did an exchange exchanging one of his commercial properties for 30. I think 37 Oh, no, not on the exchange. He bought some others from us before the exchange, and then a bunch more during the 1031 exchange. So it’s good stuff. The most tax favored asset class in America. The most historically proven asset class in the world. And guess what? You can find those those great things at Jason hartman.com slash properties. Jason hartman.com slash properties. Alright, Jason, stop talking. Get to the guest part one plant case study, Scott and Kelly, you’re gonna love this. Here we go. Hey, I want to bring to you another case study. We have a couple of wonderful clients that volunteered to be on the show. They’ve got a big story and just a great outlook and attitude on real estate investing and the long background in in the income property investing world from commercial to residential. So we’ll talk about that transition now. It is Scott and Kelly. They live in Washington, DC. And Scott, welcome. How are you? Hey, Jason. I’m excellent. How are you? Yeah, good, good. It’s good to have you on the show. Thank you for coming on and sharing your story. Give us a little bit of your background, you and your wife. And you know, just kind of tell us about that. And then we’ll dive into your story.

Scott 12:09
Yeah, sure. Kelly and I are kind of your typical, hardworking, well educated people. We went to graduate school, we got jobs in the corporate world. And then when the real estate market crash came along, we came across an opportunity to buy a portfolio of shopping centers. And so in 2009, we acquired five shopping centers, and tried to shepherd them through the real estate crash. And we were able to do that. And recently, we’ve been selling off the shopping centers and converting to a more residential. Mm hmm.

Jason Hartman 12:42
Cool. So Scott, first of all, everybody’s gonna, you know, they’re begging the question that everyone’s begging task probably is, how did you get the money to acquire all those shopping centers? That’s a pretty good head start, isn’t it? Or no, you know, sometimes, these kind of stories can surprise you a bit.

Scott 13:00
We get lucky this is a person that I had worked for doing their bookkeeping when I was in college, and in contact with them over the years. And when the real estate crash came, this individual was really looking forward to retiring and selling all the property. And suddenly, they weren’t able to. And so they were looking at holding a portfolio of shopping centers through another business cycle. And the way it was looking is gonna be quite a long one. And so I was just having a conversation with this person and said, you know, if you really want to sell those things and retire, why don’t you sell them to me? And so he did. And he sold Kelly and I the entire portfolio. No money down. Wow. Oh, my gosh, that’s fantastic. What

Jason Hartman 13:45
What an amazing story. So when you say you worked for him, was he in the business of being a landlord or was there another business? What do you mean by that?

Scott 13:57
Yeah, he was fully in the business of investment. Real Estate, okay, and I was just doing his bookkeeping and collecting rents from tenants while I was going to undergrad.

Jason Hartman 14:08
And fantastic, what an amazing story. So here is the secret, then folks, the thing you can take from this is go to work for some big time real estate investor, do the bookkeeping, so you know the numbers. And then when the next recession hits, see if you can buy it. It’s great story. Totally awesome. So these were, you know, retail shopping centers. So interesting, you know, during the Great Recession, were you worried about the retail Apocalypse, as they call it now? Did you see it coming? I was just kind of wondering, what was your outlook? What was Kelly’s outlook on that? At the time?

Scott 14:44
Yeah, we were definitely concerned. We had, you know, careers that were based on, you know, graduate degrees and all this that we’d been working on for decades, or about decade and a half. And we had to make the decision to give up on both of those careers and go full time into it. Managing shopping centers. So yes, we were very concerned about all the risks associated with that. But in the end, we found that we didn’t have that much difficulty. I mean, retail definitely changing. But all neighborhoods need a barber and a beautician and a nail salon and a liquor store and those kinds of things and the kind of neighborhood strip centers that we have. they’ve survived. Okay,

Jason Hartman 15:21
right, right, because they don’t have the big box and the other stuff that’s affected by the online, online takeover retail. And, you know, I gotta tell you, it concerns me, the typical thing that happens in every business is you get whenever you get some big player, they’ll come in and essentially buy the market by undercutting it. auto companies do this, you know, Uber has done this. Yeah, I mean, you know, it’s a common practice in business right? By the market. Even if you have to run at a loss or, you know, just very low profits, by the market, kill your competitors and then raise the prices and abuse your customers. You know, that’s sort of a typical story. So that concerns me very much about, you know, big centralized power like Amazon. Any thoughts on that just as a tangent?

Scott 16:07
Yeah, absolutely. Yeah. These tech companies are able to run at a loss for years and years in a row. And somehow their stock price just goes up. And they’re able to generate more funds from investors. And so it really would concern me if I was a grocery store, and Amazon was coming in to the grocery market. I would be very concerned because, you know, a local grocery store chain just isn’t able to raise money that way. Yeah.

Jason Hartman 16:33
Right. They don’t have the scale. That’s what’s sort of perverse about the marketplace in the ways of venture capital system works and, and so forth, isn’t it?

Scott 16:41
Oh, absolutely. And you know, it’s scary being a small business person, when you’re going up against corporations who, you know, have tax advantages that maybe small business just doesn’t have, or the ability to borrow funds at rates are much lower than small business has always been scary, but you kind of hope that being nimble and taking Your own talent and really putting it into something full time that you’ll be able to find a way find a niche in the market. And we were able to do that. Yeah,

Jason Hartman 17:09
yeah, good stuff. Okay, good. That’s obviously a tangent. But it does concern me for I mean, for the customers from a customer perspective them mostly, you know, why and when did you get the idea that you should sell the shopping centers, or at least some of them and then buy residential properties, buy single family homes and tell us about that evolution?

Scott 17:30
Sure. Well, it was never our goal to be full time owners of shopping centers. It’s just an opportunity that was too good to say no to that we decided to take on. Really what we want to do is just have a nice life and not work too hard. And these particular shopping centers took a lot of effort to run. Part of the reason for that is they were in parts of town where it’s hard to hire professionals to come and do the management for us. And so we had to do our own property management and So part of the reason that we’re selling the shopping centers and exchanging them for single family homes, is that we’ll be able to get property management with these portfolios of homes, so that we don’t have to do so much work ourselves. Right, right. Okay. Okay, good.

Jason Hartman 18:13
What did you do? And when did you do it? Well, I guess maybe the first question is, when did you discover I guess you discovered my podcast, you you and Kelly came to a couple of events. Tell us about that.

Scott 18:24
One thing that happens when you don’t have a real estate background and you instantly buy, you know, very expensive portfolio of real estate. realize you don’t know anything about this field you have to learn so I didn’t really have friends in the real estate field. So I was looking for resources. And podcasts was really something that I could do on my own schedule, and get information about the real estate market without having to you know, know any individuals or pay for classwork or anything like that. Just really convenient. Since we bought this portfolio, I started listening to your podcast in 2009. And we were sold The idea we really like the idea of turnkey single family, especially as a way to grow our portfolio as time went on. And so in 2012, we bought our first property in Memphis for your group. Now, Kelly was not as excited as I was at the time about it. So I had to convince her so I had to invest with my own money. So I actually use my IRA. Mm hmm. And purchased a single family home in my IRA. Mm hmm. And it’s worked out great.

Jason Hartman 19:28
So okay, this is interesting. So your wife wasn’t excited about it. So she says, Hey, use your own money in your retirement account that you had before we if you want to do it, honey, put your money where your mouth is. Don’t put my money there.

Scott 19:48
There’s, there’s not a lot of money. That’s just mine, you know? Yeah. But and this is, you know, I think a lot of Americans probably work this way. But my my retirement fund is something that I squirreled away on my own I really thought it was gonna work out and to prove the point. You know, I went and I bought a house. Yeah. And it worked.

Jason Hartman 20:07
Yeah, yeah. Good stuff. You came to our Memphis one of our Memphis property tours. Right. And you bought one property. That’s, that’s it. Just one. Initially. I just bought one.

Scott 20:17
Okay, and then the next year, I think we bought one more. Mm hmm. And then the year after that, we bought two more and then the after that we bought another two more.

Jason Hartman 20:28
Okay. What are those all Memphis by the way? Were you staying in that same marker? Ah, man. Okay. Okay, so you just kept doubling down in Memphis for a while. And what happened the year after that you were about to say?

Scott 20:38
Yes, sir. That was last year. And so last year, we bought 12 in Memphis. We bought 15 in Jackson. And we bought four in Oklahoma City. Okay, cool.

Jason Hartman 20:48
So you’ve got through our group. Now Scott, what do you have about 36 properties or something like

Scott 20:54
3737.

Jason Hartman 20:55
Okay, good. And what happened last year. As it was the big change of acquiring all these additional properties,

Scott 21:04
they really happened on the commercial side, we saw that interest rates look like they’re starting to go up. And commercial real estate is valued primarily by the cap rate, or the return rate that people can expect when they purchase it. And so when the interest rate goes up, that will deteriorate the value of the shopping center, as far as your ability to sell it. And so we saw interest rates coming up, they’re still low at the time last year. So we decided to sell the shopping center and switch over into residential, primarily because residential prices are still a bit low. I think there’s a lot of opportunity to pick up value there. And also, it looks like homes are going up in value kind of quickly. Whereas shopping centers are going down in value as the interest rate rises. So it’s just a good time to take advantage of the difference between the two markets.

Jason Hartman 21:55
I couldn’t agree with you more By the way, I think that’s very insightful that the rest rental market just has a much better future than retail properties do. We talked about the retail Apocalypse, obviously, you know, most people understand what’s going on there. But at the end of the day, you know, Scott, like I will say everybody needs a place to live. And that is just not going to change. Right?

Scott 22:18
Absolutely. As you know, the markets were buying in a robust markets, they’re the population is stable and growing. And the values are stable and growing. It’s not like we’re just buying residential anywhere. We’re buying in good markets, right. You know, what are the other benefits? Jason is with our shopping centers. They’re all located in one geographic area. Mm hmm. But with this residential, we’re able to diversify across three different markets,

Jason Hartman 22:43
right. So you’ve got you’ve reduced your risk by diversifying like that. That’s one of the other good reasons it’s good to not have, you know, like one lump of an expensive property, or, or anything like that, because you can definitely diversify geographically. Real Estate is local, as I like to say, certainly not my saying that’s an old saying, but but Yeah, it does. It does allow you to do that. But you know, Scott, I mean, you and Kelly, as you were thinking of doing a 1031 exchange on, you know, shopping centers, and you were also, you know, just buying real estate before you did the first exchange, you could have done anything. I mean, you could have adopted numerous different strategies you live in Washington, DC, that’s obviously an expensive cyclical market, why not just invest right around the corner from where you live?

Scott 23:36
Well, you know, we try to invest for the investment makes sense. And so in the case of the properties that we acquired from you guys, we were able to make sure that we get a nice return, that they’re in good solid markets where we know we’ll get that return over a long period of time. And we have property management in place. We don’t actually have to do the work ourselves to run the property right.

Jason Hartman 23:59
So Let’s talk a little bit about property management with the shopping centers. You did your own management By the way, what do you still own in terms of retail properties? And what did you sell? Did you only sell one of the centers are two of them.

Scott 24:12
We sold three of them last year, we sold one in years gone by so we’re just down to one last shopping center. Okay,

Jason Hartman 24:18
got it. Got it. Yeah. And by the way, isn’t the 1031 tax deferred exchange? Just a beautiful thing?

Scott 24:25
It’s so great. Yeah, it’s gonna do so much good for us. Having done this exchange last year. I’m just thrilled. Yeah, good, good stuff. You don’t even realize some of these benefits until you do it yourself.

Jason Hartman 24:37
Yeah, the benefits for depreciation are just amazing. And I did it last year. If I were to do it in 2018, it would be even better. And you mean because you got to restart the clock on your depreciation and plus the residential properties have a shorter depreciation schedule. It’s about 25% shorter, which means you get more tax benefit more quickly. Right.

Scott 24:58
Right. And the I have my investment is probably not going to be 40 years long. So in the case of a commercial depreciation schedule that almost certainly never get to the end of it. But with the residential, I’ll be able to get a lot more capture a lot more depreciation, right? Right. If there’s a

Jason Hartman 25:15
couple of newbies listening to the real estate game, depreciation, makes income property the most tax favored asset class in America. It is the most wonderful benefit. And it’s such an oxymoron, that you can have appreciation and make money on that. And you can have depreciation and save a ton of money on that at the same time. It’s It’s such a great, great asset class. It really is. You did that exchange, you’ve shortened your depreciation schedule. Before we talked about property management. Before we started this, this recording for the show, Scott, you were telling me about how your exchange went and you know just sharing a couple stories about working with our network. I thought that was pretty interesting. Did you want to share that with the listeners.

Scott 26:00
Well, luckily, when you’re selling commercial real estate, the timeline for selling a property is quite long. So we were under contract and still had 90 days to go before we got to the actual closing of the commercial property. And so I had a few extra days to do some property tour. So I got in contact with Sarah, my investment coordinator over there. And we went and visited our I went and visited a few markets and got to know property managers got to see their product, and I was pretty sure I knew which markets I was going into, on the closing day. On the closing day, I had 45 days to identify my properties. And within a week, I’d identified the properties in Oklahoma City and in Jackson, Mississippi, but I still had quite a bit of capital leftover that I need to allocate. And I was planning on allocating that to certain market and the vendor the provider of the homes actually went through bankruptcy and the bankruptcy was announced. In the newspaper, just before I signed my sales documents to purchase that portfolio. And so I spoke to my attorney and they said, well, being a 1031 exchange, you can’t be guaranteed that you’re going to be able to buy these in case there’s some kind of action in the foreclosure court. And so I actually had to back off of a rather large investment, just a couple weeks into my selection process. Right, I found a new market. And I was all set to reinvest with this other company, another provider, this time in Memphis,

Jason Hartman 27:32
right, another one of our local market specialists.

Scott 27:35
Yeah, I had lined up another rather large portfolio, and I was getting ready to sign to purchase these. And I showed it to the bank I was borrowing money from and they said that they didn’t want to finance any new home purchases. So they’d never said that to me back when they’re giving me the commitment, the loan commitment, but when it came time to identify houses for these portfolios, The financing company I was working with actually didn’t want to do the deal if they’re brand new homes, construction. And so once again, I had taken the time to identify these homes. And then the last minute, I had to abandon my plans. Wow.

Jason Hartman 28:14
Yeah. So were you were you? Were you worried? I can’t really describe how worried I was. I was very worried. I like to say that I aged about two years and that 45 days, okay, so let me just explain this to the listeners. So this is because, you know, you have these tight deadlines, to complete 1031 tax deferred exchanges. And if you don’t, you know, for example, like you could lose some of the properties you were buying and not be able to acquire them or identify them, and you would just have to pay tax on the, the amount of money you didn’t reinvest. Okay. So it’s not like the whole thing was off, but anything outside of the exchange is going to be taxable. So you want it to not have any tax liability and training. For all of the gains from the sale of the shopping center into the new single family homes you were buying, and this is the problem you’re describing. Go ahead.

Scott 29:08
Yeah. So I, you know, especially when you’re dealing with large sums of money, and the tax rate comes out to something like 23.8%, it can be really scary. So I was looking at about 10 more days left in my identification period. And I was calling Sara and I was freaking out. And she did some good digging for me, and put me in touch with a provider in Memphis, and I was able to allocate the final 800,000 in our purchase, with just about seven days left in our selection, period. Mm hmm. And so that worked out great. That provider basically saved me. They gave me all their inventory for the next two months. Just let me buy it all at once. Yeah, lo and behold, three months later, we closed on all that property all in one day. Right, right. Yeah.

Jason Hartman 29:56
Yeah. You know, you’re reminding me of a story. Not this part. Specifically, but we had some clients a few years back and we talked about their story on the show, they sold a another single family home that they’d inherited it was in California, it was about two and a half million dollars. And then they purchased, I think 36 or 38 homes through us on the exchange, you know, income properties, obviously, I shouldn’t call them homes, their investment properties, but but single family homes, they were pretty amazed that we were able to help them pull that off. You know, that’s all there’s a lot of properties to acquire in one swoop like that really quickly, especially in a market where, you know, the market is obviously tight, right, and things are selling like hotcakes. I mean, there’s very little inventory, so that can make it really worrisome. I’ve done a few exchanges over the past few years. And personally, even though I’m in the business of doing this, I have the same problem. You know, I was really worried that I couldn’t complete the exchange and I don’t want to get stuck paying the tax on the capital gains from the the relinquished properties. Yeah,

Scott 31:04
yeah, good stuff. It can be serious. Yeah. But you know, I don’t think this opportunity really existed before companies like Platinum properties were around, right? If I were to try to go out and use the MLS to purchase 31 single family homes so nightmare and try to negotiate on all 31 on and try to get them all inspected and close, it would never happen. It’s completely impossible. Yeah. And especially with the financing I used, I had to be able to close on at least half a million dollars at once at the same closing on the same day in order for them to do the financing. Right. I tried to do that with you know, 31 different single family home. Oh god sellers,

Jason Hartman 31:44
you would have never happened. Yeah, that’s that’s really amazing how you share that story. This will be continued on the next episode.

Thank you for listening and happy investing. Hey, I hope you’ll join me in San Jose on March 3. As we We host our Jason Hartman University event. Now this event is for the real practical hands on interactive education on income property investing, where you will learn how to actually do the math, how to evaluate the deals, we will go in depth into this subject of how to analyze a real estate deal. And once we do that, we’ll talk about how to build a portfolio, how to properly structure a portfolio, how to diversify it, how to sequence your mortgage financing, and it is a fun event. We do some gamification. You’ll meet a lot of people because you’ll be working with the people in the class, and it’s a one day event. You can check it out at Jason Hartman University comm Jason Hartman University comm we’ve been doing this event for about three or four years, and people absolutely love it. We’ve done it in San Diego and Salt Lake City. Now we’re doing it in San Jose. We’ve done it other places as well. I just can’t relate Where offhand, but it’s a great event and we try to do it about once a year. I asked her we did it in Oklahoma City. This time we will be in San Jose Silicon Valley on March 3. Jason Hartman university.com Jason Hartman University comm Get your tickets today, and we’ll look forward to seeing you in Silicon Valley on March 3. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional and we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using, and write a review for the show, we would very much appreciate that and be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.

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Jason Hartman starts the show reminding us that the best insurance is a high loan balance. He welcomes client, Adam Jackson, on the show today to discuss how in five years he was able to get 14 properties with infinite returns. Adam shares his journey and discusses his career from the USMC vet to his work in the aerospace industry.

Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multimillionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:53
Welcome to Episode 1541 1541 today, we’ve got a fantastic Stick client case study and you are going to want to learn from how this guy did it. We’ve got our client, Adam Jackson on with us. And he’s been investing with us for the last five years and get this, almost half of his portfolio is now in the infinite return phase. He’s a former Marine, and now in the aerospace business, and just doing a little investing on the side, and this is the beautiful thing about income property, you can acquire the asset and then you can get all your money back as if you sold the asset, but you don’t have to sell it. You can still own the asset and still get the returns from the future of the assets performance. After you received all your money back. That is fantastic. Isn’t it Alright, so in our intro portion today, and by the way, this guest will be in two parts. So we will have him today and the second half of tomorrow but the first part you’ve got yours truly. And I’d like to start off with a quote. And this quote is a Shakespearean quote. So what does the Bard have to say to us? Well, in Julius Caesar, act four, comes this gold nugget of wisdom. There is a tide in the affairs of men, which, taken at the flood, leads on to fortune omitted, all the voyage of their life is bound in the shallows and in miseries. On such a full sea. Are we now a float, and we must take the current when it serves or lose our ventures. That’s good. I mean, Shakespeare talks weird. We all know that right? But really, really an incredible quote. And it just really goes to show us that so many times, we are faced with such incredible opportunities. And you know, we just finished our team call and we were talking about our clients who had purchased properties through our network over the years and people that purchase properties 10 years ago, eight years ago, five years ago, three years ago, even a year ago, have made great money. But you know, what’s interesting about that? Is that the same time there were people saying 10 years ago, eight years ago, five years ago, one year ago. Oh, the bubbles gonna pop on. I’m gonna wait until they were saying this three months ago. What am I talking about? I’m gonna wait I’m gonna keep my powder dry. I’m not gonna buy anything yet, because I’m gonna wait because it’s going to all collapse. And then I’m going to buy everything when it collapses. Yeah. Good luck trying to time the market. It sure seems like every brilliant market timer would have been out in force in March. That was only six months ago, folks, well, five months ago, depending on how you look at it, and they would have said, Wow, we’re in a pandemic. Yeah, the markets gonna collapse. Now again, you know, I’ve said this, we’re in the third inning here, folks, we got a ways to go here. But look, just buy properties that make sense from day one, and that is your insurance. You can ask for a better insurance policy than that. Just buy properties from that makes sense from the day you buy them. And you’ve got a very nice insurance policy. Now there are other forms of insurance policy included in your properly structured properly purchased real estate deals that follow Jason Hartman’s 10 commandments of successful investing, and even the next 13 of them up to the 23 commandments, but you only really have to follow the first 10. And you’ve got all sorts, all sorts of insurance. One thing I say is that the best insurance has a high loan balance. Well, that’s going to come true again here, folks. Our heart goes out to the people affected by the recent hurricane. And I’ve got an article in front of me Of course, this pushes up the prices of commodities, which are already more than high enough, right. This article says hurricane Laura Wallops areas with high mortgage delinquency rates. Wind surges hit over 150 miles an hour in Louisiana with dead Damage estimated in the billions. Insurers will have to fork over billions of dollars to pay for the damage that property owners incurred from Hurricane Laura last week. By the way, just a side comment, this wasn’t my point. My point will come in a moment. But my side comment is in every time you see one of these hurricanes, or really any natural disaster for that matter, sometimes, many times actually, it is an example, in another odd way of Joseph Schumpeter, the economist Joseph Schumpeter, his creative destruction. Now, it’s not very creative, admittedly, but it’s destruction. And sometimes, and I know this may sound cold and heartless and awful. But sometimes when you step back, and you look at the big picture, you see that a lot of this destruction was actually good for the people whose home was destroyed. Now, nobody will feel that way in the thick of it, certainly not. It’s terrible. But many of these people, and I’ve talked to them over the years and some of them are clients, like in Hurricane Katrina, I remember one of them. property was completely wiped out. And at first he thought, This is terrible. But then, but then he got his insurance payout. And a developer bought the property, because they were doing an assemblage assembling a bunch of properties to build a high rise where these little single family homes used to be. And that is an example of, in a way creative destruction. Because he made a ton of money off that deal. Okay, you wouldn’t think it you’d think oh, you know, it’s terrible. It’s tragic, right? A lot of times, tragedy seeming tragedy can turn out to be Really, really positive thing. And you’ve all seen this before in your own life. You all can think of examples in your past, where one thing, you know, a lot of times it’s a relationship, right a relationship that ended maybe you got dumped. Right? Maybe you got dumped, and you’re sad about that. And then you realize later, Oh, am sure glad I got dumped, because that can make room for someone a lot better. Right? And a lot of times, it turns out exactly that way. So you know, it’s, um, one of the key things in life is the concept of gaining perspective, perspective, perspective perspective. You got to stand back from the canvas of your life and stop focusing on one or two brushstrokes. And as the old saying goes, look at the big picture, you’ve got to look at the big picture in that big picture, it can turn out to be much more positive, much more positive than you think at the time. So hurricane Laura, okay, here’s the thing. As I’ve always said, the best insurance is a high loan balance. The best insurance is a high loan balance. I promise you, there will almost assuredly be a bailout. It’s common votes. It’s always coming. It’s always coming. But guess what? What will be the bailout for the people who own their homes free and clear? I bet it will be nothing. Okay, Jason, you’re overdoing it on the sound effects chill out. You know, it’s like a kid who gets this new toys new sound effect machine. It’s not new, but I just pulled them out of the drawer the other day. And so I’m liking the sound effects. So There will undoubtedly be a bailout program coming for the people who have mortgages and likely it will be a moratorium on mortgage payments, a forbearance program of one sort or another. It’s common folks. It’s always coming. And that’s the thing. You know, you’ve got everybody right now asking, Well, you know, I don’t know, I think the economy is going to crash, the housing market is going to collapse. Everything’s going to get really bad. Because what happens when all these moratoriums and what happens when all of the bailouts and what happens when the extra 600 bucks goes away, etc, etc, etc. Let me tell you what happens in today’s world. And I know you know, normally normally normally if the world were rational, I would never hang my hat on this. Now looking over at the hat on the top of my bookshelf, because in Florida, you know that Sun’s pretty hot in the middle of the day when you’re walking the dog Got to wear a hat. Especially because my hair is getting so thin. When does the cure for hair loss going to be invented? I’m waiting, I’m waiting. Otherwise, maybe I’ll shave it. Maybe I’ll just shave the head someday. Anyway, tangent alert. So you see all these people, you know, and they’re all worried about this, that and the other thing, but I think we really are in an era where we can hang our hat. hang our hat on the idea that there will be another bailout program coming. And certainly, as long as Jerome Powell is head of the Federal Reserve, Uncle Jerome is like the man with the goodies. Wow. More so than maybe any other Fed Chair. I mean, a lot of others. And you know, our email newsletter that will go out this week. I’ve been writing that and you know, I’ve been looking at and researching Fed policy over the years For that newsletter, this next one is going to be good folks, be sure you’re on our email list. Just go to Jason hartman.com. And make sure you’re subscribing I’m really dedicating some effort to that. I never really did before, I’ll be honest with you, really dedicating some effort to it, and our email newsletter that’s going out this week is going to have a lot of good content. So make sure you’re on the list, go to Jason hartman.com, put in your email address somewhere anywhere doesn’t matter. You’ll get on the list, you’ll get our email newsletter and make sure you whitelist us check your junk folder because sometimes they get filtered. That’s just the way it is, you know, the powers that be want to censor you when you’re talking about and by establishment. They don’t like you bagging on the Federal Reserve or questioning the establishment, which is what we do here. By the way, folks, we do that in case you haven’t noticed. Anyway, I’ve been researching that and you know, the fed you still really only have very blunt policies to deal with these these various crises. And now it has just invented so many really sophisticated tools. I mean, they all sort of at the end of the day come down to the same thing. Hashtag money printing. But, you know, the tools they have are much more Um, well, they’re much more, I guess I want to say they’re subtle. In a way either. I don’t know. I don’t know. I don’t know how to explain it. And I don’t know. I just don’t know what to say. But read the newsletter. It’s all there. Okay, what else? What else? Well, I think we probably better get to our guests today. really a wonderful interview. This guy was a great guest and, and Adam, we really thank you for being our client and really impressed with what you’ve done. So thanks for coming on the show. I know we’ve got a couple more client interviews, booked client case studies. And if you’re out there listening, and you want to come on the show and share your case study, we would absolutely love to have you you’re certainly invited on and All of our listeners really love to hear these stories. So a couple of announcements before we get to him. Number one, we have for our empowered investor inner circle, we’ve got our first private meeting this Friday, you should have all received an email on that with the link to the zoom meeting. And also this Friday, we have a meeting for all the people who purchased the asset protection program. Okay, we really wanted to do a deeper level kind of advanced meeting on that, where we can really dig in, take more of your questions. And you should have also received an email on that. Be sure to join us for that on Friday. And we look forward to seeing you there. A lot of you have asked about the empowered investor inner circle. We’re going to have a webinar on that soon and open it up to our broader audience. So thank you very much for your interest in that. So that’s coming, you know Rome wasn’t built in a day. No, Rome was not built in a day. You know, it takes us some some time to get all this stuff together. But we’re doing it we’re getting there. So it won’t be long before you’re invited to check out the webinar and then join the inner circle group and we open it up to the meet the Masters attendees first, but we’d open up to everybody in the audience soon. If you want to check out the asset protection webinar, go to Jason hartman.com slash asset you can check that out. And yeah, I guess that’s it for today until we get to our interview here with our client. Let’s go through a case study and let’s hear about how he created infinite return on almost half of his real estate portfolio in five short years. Five short years. Awesome. Awesome. Awesome. Okay, here we go. Hey, it’s my pleasure to welcome one of our clients back To the show for a third time and that is Adam Jackson. He was on about three years ago. He’s in the aerospace industry. He’s a USMC, combat veteran. Thank you for your service, Adam, by the way, he spent a two tours in Fallujah. So it’s probably got some amazing stories there. He’s celebrating his fifth year as a real estate investor. And he’s about to close on his 14th property. And he, he voted with his feet and moved his wife and four kids out of the Socialist Republic of Connecticut, right? That’s right. Can not California to Orlando, Florida, so he’s, he’s my neighbor not too far away. Adam, welcome back. Thank you for coming back on the show and sharing your client case study story. These are the best shows and by the way, anybody out there listening who wants to come on share their story, we would love to have you because listeners just love hearing about real people doing real great things. So congratulations. Now you’re basically dollar cost averaging, you’re not timing the market, which I think is fantastic. And you talk about how you’re getting infinite returns on almost half of your portfolio. Now, what does that mean?

Adam Jackson 17:14
Yeah, so basically what that means is, I purchased a lot of the property’s over four years ago now. And since that time, they have not only had the loan paid down, based on what what I was collecting and rent and how that gets paid down by the tenant, but also the properties have experienced a decent amount of appreciation actually more than I thought they were going to experience. So in what’s kind of funny is that at the time when I was purchasing these, everybody was saying, oh, interest rates are great, they’re probably not going to go any lower. They probably won’t be like this ever again. So you better do it. Now. What what, and there was good reason to think that by the way, there was I don’t fault anyone and I fully believed it myself. Right? Yeah, don’t do but Fast Forward four years, and Now the interest rates are even lower. So you combine that with the loan pay down in the appreciation, I’ve been able to basically pull out at least as much cash as I’ve put in sometimes more, in some cases, as what the original downpayment and closing costs were, and my payment has only gone up by a very minimal amount, sometimes 20 bucks in some cases, that is amazing. So, so congratulations on that.

Jason Hartman 18:28
So before we dive in, too deep, Adam, give us a little bit of your backstory, if you will, of course, would love to hear about your career in aerospace. And, you know, what’s going on there. And I think you have, you know, some thoughts about how that’s a signal as to what’s going on with the economy as well. But you know, maybe start by when you probably discovered my podcast years ago, what When was that? What year was?

Adam Jackson 18:52
So I would say would have been 2015. Okay, at this point, yeah. So it’s been about five years now that I’ve been listening to you

Jason Hartman 18:58
and I remember you tended our meet the Masters event about three years ago, I think the 2017 event. Did you attend other events as well? Yeah. Well,

Adam Jackson 19:07
I’m not sure if that was with Ron Paul. or so. No, that

Jason Hartman 19:10
was 2008 20. Oh, okay.

Adam Jackson 19:12
So I went to that I’ve been to prophets in paradise actually the most recent one in Orlando. Oh, you a Memphis property tour. And then the most recent virtual meet the masters.

Jason Hartman 19:23
Excellent, excellent. Good stuff. So 2015 and why did you get the bug? What what interested in you in real estate or, you know, income property?

Adam Jackson 19:32
Yeah. Well, I was always somebody who religiously contributed to a 401k, a Roth IRA, saving for retirement, living below my means, and that sort of thing. And in the back of my mind, there, there was always this feeling of, well, how am I really going to save enough? I mean, I mean, realistically, it was it just didn’t make sense to me.

Jason Hartman 19:53
How would nobody ever got rich saving money?

Adam Jackson 19:56
Exactly. And so I started to embark On this personal development phase and really kind of into this program, and I listened to all the classic personal development mentors and things like that, but I ended up listening to a book called seven, seven years to seven figures. I can’t remember who wrote it. But basically, it started talking about real estate. And then I thought it was really interesting, got really into that started to read and read and read. And then I searched for podcasts. And you were really the first one that came up and once I started listening to it, I just never stopped.

Jason Hartman 20:31
Yeah, by the way that that book you mentioned. That’s Michael Masterson. He’s been on the show. That’s Pena, so that’s not his real name Michael Masterson. It’s Mark Ford. I that’s a great book. I also read that book. I’ll tell you his book that I like even better is called and I think you practice this in the military By the way, the concept and sounds weird. of ready fire aim. That is a great book of Michael Masterson.

Adam Jackson 21:00
I have read that one. That’s a great one. Yeah,

Jason Hartman 21:02
I like it. But I mean, obviously, you went through boot camp and all of that stuff. You know, when shooting, I hear that some of the training, you know, that, like the marine training is, is this concept of ready fire aim? Because I understand that if you actually think about it, if you overthink the shot, you’re less accurate than if you just fire. It sounds counterintuitive, but and I don’t know if you remember that from any of your training a long time ago, but I just thought I’d mentioned that because another another military that told me about that.

Adam Jackson 21:35
No, I mean, that’s absolutely true. Now Now, when you’re when you’re sharpshooting or when you’re on the target range, yes, like you will make small adjustments, you will take a shot, you’ll see where it landed, you might adjust your windage or elevation. But I mean, I can definitely relate this more to what my job was in the military, which was on the one tank and those are all using cruiser, fully automatic weapons. So typically what we do, there is You start firing and in with all the information that you have, you take your best first shot or burst. And then from there you walk it to that target if it’s if it’s off at all right, right, the concept does hold.

Jason Hartman 22:13
That’s a great metaphor for real estate investing. And, you know, I think you know what I’m going to say, Adam, because a lot of people, you know, I mean, we have investors who are advanced investors, wealthy that are, you know, buying up portfolios of properties, but we also have brand new people that are thinking about doing it. And you know, some of them get in this trap where they want all the information before they do it. And you can never, ever have all the information. So your example of operating the Abrams tank, is you’ve got to fire, get the information from where that shot lands, and then adjust. And that’s how life is right. It’s that the law of life and investing and whatever is that whole process of doing something getting into information from it using that information to do it better than next time. Right? I would definitely agree. And also, once you finally engage, okay, you engage that target. A lot of times what happens is you end up finding information out there might have been certain conditions with that scenario that you were unaware of that first meet, maybe had heard about them, maybe you had trained for them. For instance, the fact that I bought properties going back to real estate, and four years ago, I mean, I didn’t know if the interest rates were going to go lower. I could have never imagined that I didn’t know if the appreciation was going to happen the way it did. I mean, I invest for you. So there’s all these other factors that you can eventually take advantage of with the information that you learn after you get started. Yeah, nobody can know all the information or how it’s going to work out in advance. You’ve just got to jump in and do it and adjust adjust along the way. That’s the only way anything in life works. I mean, that’s the way surgery works when a surgeon goes in and does surgery, right? It’s the way everything works. You just cannot know everything in advance. You’ve got to give up that need for certainty, and just go do things and and, you know, I like to say, cultivate what I call rational recklessness.

Adam Jackson 24:17
I like that.

Jason Hartman 24:18
You got to be a little bit reckless, you know? Yeah. Good. Anyway, go back to what you were saying. So, you were talking a little bit about timeline and things like that. And I interrupted you.

Adam Jackson 24:27
So? Oh, yeah, I guess this would this would just kind of go back to what I was doing with the properties as far as the approach of just consistently buying and not actually timing the market, not actually, you know, waiting for any significant kind of downturn, ebb and flow. Just Just continue to do this, getting control of the asset as soon as you can. And let it go to work for you. BMB the trajectory is incredible.

Jason Hartman 24:56
Absolutely. So get in control of the of the real estate. As soon as you can, and then let it work for you and then make those course corrections, right.

Adam Jackson 25:05
And it doesn’t take very long. I mean, again, only four years, I had more of a seven to 10 year plan, which I thought would have been realistic maybe for some sort of an exit plan or some sort of harvesting equity. But it happened even sooner than I thought.

Jason Hartman 25:18
Good stuff. Yeah, that’s awesome. So which markets are you in? What metro areas?

Adam Jackson 25:23
Yep. So I’m currently in Memphis, Jackson, Mississippi, also Jacksonville and Ocala. Hmm. So you’re good to know. Yes. So they’re, they’re nice and local. I can drive to those within an hour. I know not everybody has that luxury, but but that was definitely a selling point for me. And also Talladega, Alabama,

Jason Hartman 25:42
okay, good. Good stuff. And you live in Orlando? That’s correct. Fantastic.

Adam Jackson 25:47
So how did it start? I mean, you listen to the podcast, and then where was your first property? So the first actually what I did was I bought three properties right off the bat in Memphis, okay. And Those have actually proven to be some of my my best stories, some of my best winners. Yeah. I mean, ever since then I’ve really enjoyed the Memphis market. I can tell you though, what I did was I was going through the pro formas from a Memphis property tour, not it was really like three years ago at this point. And I could not believe the deals the way that the the way the pro formas looked, you know, they’re just the amount of cash flow and the rent to value ratio. But I was told that even years prior to that they looked even better.

Jason Hartman 26:32
Yeah, I can tell you that it’s, it’s never too late to start and the deal I’m still finding deals that look great today. So yeah, absolutely. I agree with you, and you use property tracker to to track your portfolio. And are you also using it to evaluate new deals. So you know, it certainly makes you hone in and you’re very familiar with the way that first year projection looks on the performer. You know, you’ve learned how to That works. And by the way, anybody watching or listening, if you go to Jason hartman.com, if you do one thing and one thing only, go watch that free 27 minute video on the front page of our website, it’s totally free. It will teach you how to read and understand every single number on that performer. And it’ll really teach you how to evaluate a real estate deal. And it’s probably the shortest best course on real estate investing ever. And it’s free. So 27 minutes, there you go. But yeah, so at the time when you were buying those properties, Adam, did they feel expensive to you?

Adam Jackson 27:36
Well, being from the Socialist Republic of Connecticut,

Jason Hartman 27:39
they call cheap, right, right.

Adam Jackson 27:41
Because they were barely in the six figure range. So they did seem fairly inexpensive to me. However, I would still have to make a 20 to $25,000 investment. So I think that maybe just kind of getting over that, especially with a Roth IRA at the time. I think that the contribution was 5000 or 5500? And, you know, probably something similar to that with what I was doing with the 401k. So, you know, obviously it’s a bigger investment, but the thing is, is that the money starts working, the the currency starts working for you immediately. And you don’t have to put it off. So yeah, I wouldn’t say it was inexpensive, but still a good chunk of change to me at the time. Mm.

Jason Hartman 28:24
Okay. And you know, what were some of the good and the bad things that have happened to you over the years, you’ve been investing for five years, you’re up to 14 properties in all the markets you mentioned. So congratulations on all of that. You know, you said you were surprised pleasantly surprised at how some of them have performed and that the appreciation you’ve gotten. So that’s awesome. But there have been some lessons along the way. I’m sure some things you have probably some regrets. I’m guessing. Any thoughts? The real world picture is what we want to paint here.

Adam Jackson 28:56
Yeah, sounds good. Well, I mean, I can tell you right off the bat, I have zero regrets. Only because anything that happened that might have been to the negative was actually offset by the lesson, you know. So I definitely learned an important lesson. Through those negatives, I can tell you that at the time that when I was going through and harvesting all this equity to dump back into the other three properties that I’m firing just in the last few months, I can tell you that those properties performed very, very well in general. And I think a lot of that might have had to do with with where I bought and what I bought, but I can tell you that the cash flow has been pretty solid for the most part. And now I have had some some issues. I think it’s very important to stay on top of your management. I think that if you have some sort of a charge that you need more detail on or maybe you just want to question for certain reasons, I think it’s very important to stay on top of the management. Demand those answers you know, demand the answers demand pictures are real. Yes,

Jason Hartman 30:00
absolutely, absolutely like that.

Adam Jackson 30:03
I can’t hammer that home enough. Yeah. And don’t be afraid to. I mean, if you have to, I mean, have a healthy amount of tension. If you have to do that, and let them know that you’re not, you’re not afraid to take your service or your business elsewhere. I

Jason Hartman 30:18
absolutely couldn’t agree more. Now to that end. And, you know, we’ve, as you know, have been really pushing and teaching people how to do self management, long distance self management, which, you know, like I’ve said many times, if you asked me if that was possible, 1314 years ago, I would have said No way, but it’s totally possible. And, you know, we have all these great tools to do it nowadays. And, you know, we just launched the empowered investor, inner circle, and all of that stuff, too. You know, our goal is to help, you know, thousands and thousands of investors really take control of their properties by doing self management. And the amazing thing I find is that sometimes because you get at third party that intermediary that middleman out of the way. It’s actually easier. It actually takes less time. Now it sounds like you’re not doing any self management yet, but you’ve probably thought about it. I don’t know. Are you

Adam Jackson 31:13
self managing? I think I’ve thought about it a lot. And actually, I was very, very close to firing property manager at one point to do that. And then we ended up improving the situation. So I didn’t actually do that. It has been on on my radar, and that’s partly why I bought in Florida, although I’ve had no issues there, of course, so but that’s definitely something I would I’d be willing to entertain. I think it’s a it’s a great thing to do.

Jason Hartman 31:38
Yeah, just the fact, Adam, that you, you know, hopefully we’ve conveyed to you that you have the confidence to do that. It puts you in a different negotiating position. When you’re asking for justification for an expense from your property manager. You know, now you can do it hopefully with some more confidence with some more guts to say Look, if I need to pull the plug and get another manager or just self manage, you know, I know there are options, right? And it’s gonna just make you a more powerful confident investor. Right?

Adam Jackson 32:10
Absolutely. And I think it’s kind of funny because I’m seeing parallels between my read my initial reluctance to actually purchase a property. And now fast forward four years, or maybe even a little bit more. Now I’m sort of at that same Crossroads with, okay, well, now, do I take these matters into my own hands? Do I take the plunge into self management? Mm hmm. So that’s one of the one of the things I’m definitely thinking about. Yeah. But But you know, like, going back into the portfolio, some of the good some of the bad again, most of those properties have performed very, very well. I’m at infinite returns on on many of them. I can tell you though, actually, this is a good story, my worst performing property. I finally I purchased it three years ago, and it was at the lower end, so I’m probably close. To like to maybe a see property, and I finally had my first month of cash flow in about two years. So think about that. I mean, that I finally got it stabilized, I think. But what’s funny is that when I look in my property tracker, and I look at the overall return, I’m still looking at a double digit. It’s a 15% return. Right. So you know, it’s funny, because you, you have alluded to or talked about in detail in the past, you know, if the deal only goes half as well, is it as it’s projected? Yeah. You still get these double digit returns? Yeah. All right. And that’s what I’m seeing here, you know, between appreciation tax benefits, but but the lessons I think that’s that’s priceless. So, absolutely. One bad egg, though, I think, yeah, one may get one at some point.

Jason Hartman 33:49
So your worst deal is 15% annual return on investment. That’s right. I love it. Yeah, that’s the worst deal, folks. It only gets better

Adam Jackson 33:59
to believe Yeah, I wouldn’t have believed that myself. Yeah.

Jason Hartman 34:04
And that’s, that’s a lower that’s a lower end property in terms of what we sell and what’s in your portfolio, right?

Adam Jackson 34:10
Yeah, it’s a lower end property. But I can tell you that I have another lower end property, I only have two in the portfolio. And that has been outstanding. I have a I have a section eight tenant in there. And the rent comes in like clockwork, there’s hardly ever a repair, the tenants are all leasing up. But that’s another thing. I’ve received so many renewals on leases this year. It’s just incredible. So you know, I can tell you that all the properties that I have There are currently leased, and I collected every rent last month including back rent from a property that was missed from the previous month.

Jason Hartman 34:47
Okay, so that’s a good question. So at the time of recording now, you know, we’re sort of in the midst of the lockdowns are spotty as some areas some not, but you know, every world’s mass right now. Right? There’s been a lot of talk about rent strikes and eviction moratoriums and stuff like that. Has everybody been paying your rent all the way through this? Or is that just last month that you were referring to? Or tell us about the experience on rent collection?

Adam Jackson 35:14
Okay, so that would be specific to last month. I can tell you, though, that everything has been very, very consistent. I mean, there might be one property that I don’t collect rent on for a given month, or maybe it’s going through a turnover. But that’s generally the average I would say one property out of the the double digit properties that I own. My I might miss the rent for some reason or another. But, you know, I just thought it was a testament to a lot of a lot of the fear that has been out there. And I remember months ago, we were we were wondering, I mean, okay, let’s build up the reserves. This could be bad, but you’ve been you better hang on to your hats. And I think this is just a testament to the fact that every property that I have is currently leased. The the leases are being renewed and last month in particular, I collected every rent.

Jason Hartman 36:06
Yeah, that’s fantastic. So the asset is just much more resilient than most people think. Adam, I want to go back to that comment you made because I’m not sure everybody really understands it on your worst performing property, and how, you know, some people in the income property investing game and the real estate game, they think they’re losing when they’re actually winning. And the reason they think that is they don’t know how to do the math, they just don’t know how to calculate it. They don’t understand that like an iceberg. You know, most of it is below the surface of the water. And there are all these things giving you return on investment because it’s a multi dimensional asset class, and they don’t see it, you don’t see it right away. Sometimes you don’t see it until the end of the year when you keep the books on it or when you do your taxes and you get a big tax deduction. or whatever, right. But speak to that a little bit more and maybe help our listeners understand that a little bit.

Adam Jackson 37:06
Yeah, I’m actually glad that you brought that up just because recently, I had spoken with another investor who purchased a property. They tried doing it for only one year and had a major repair. This was just somebody outside of the network, and they did it on their own. And it basically wiped out whatever their projected cash flow for the year would have been. And I think it was at that point. I mean, I basically told them some version of what you just said, how there’s just a lot happening underneath the surface, right. And I took it upon myself to go in and really do a deep dive on my returns and the calculations there. Now, at the time of the I guess it would have been 12 properties I had, I was looking at roughly $3,000 a month in cash flow, which I think is pretty good. I think that those numbers are pretty solid. But what I did was I took into account the appreciation, I took into account the loan pay down. And then projected tax benefits. This is not include inflation paying down the value of the debt or anything like that. And that $3,000 turned into between 15 and $17,000 per month for the total return. So it’s actually pretty amazing when you look past the cash flow, what’s really going on, especially if you leverage these properties at a five to one or four to one, you’re really looking at some incredible returns.

Jason Hartman 38:33
Yeah, yeah, you are, you are. And because you get, you know, like people, most people just look at the cash flow. And they think, I mean, I remember there was a comment on one of my YouTube videos the other day, I didn’t have time to respond to this skeptic, you know, but I’m not going to convince him I just give up on some of these people. They just don’t get it. You know, you’re either gonna get it or you’re not gonna get it right. But this one guy watched the video, I guess. And, you know, he commented, how is this possibly worth it? I’m gonna buy a property and get 200 off A month. So what? And it’s like, oh my gosh, if you just took the time to understand, I mean, what you know, to that guy, like, I want to say, Okay, look, I’m not gonna try and explain anything to you, or teach you how it works or how to calculate return or anything. Just ask yourself this simple question. How is it that you know, and I know because everybody knows them, right? So many people who created a lot of wealth through income property, yet, you probably don’t know anybody who did that in the stock market or buying gold or, I don’t know, maybe Bitcoin if they timed it, right. But you know, I don’t think that’s a sustainable investment. How do they think it works? You know, because they certainly have looked around. And they know lots of people have become very wealthy through income property, yet they still don’t take the time to understand it.

Adam Jackson 39:52
I think a lot of this has to do with the infrastructure around what we look at when it comes to Wall Street, and the The conventional wisdom as to what investing actually is. Yeah, I mean, I know that we’ve all talked about this, but income properties are outside of that system. So there’s no one that’s going to be pushing that. But But again, like you say, the wealthiest people are the ones who either have made their fortunes in real estate, or who put their money in real estate, and there’s good reason for that.

Jason Hartman 40:20
Yep. Abby, you’re absolutely right. You’re absolutely right. This will be continued on the next episode. Thank you for listening and happy investing. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.

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Jason Hartman hosts Ross Wordon to discuss his property plan. Ross discusses how he started at an Etsy store in today’s client case study. Ross Worden started a fast-growing business from an Etsy store. His early interest in real estate sent him on an investment quest. He discusses how he became educated by listening to over 500 episodes and after purchasing his first investment property, created a 10-year plan to get to 93 properties. Jason and Ross look at his current portfolio and his plans for growth.

Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multimillionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:54
Welcome to Episode 1531. You know, I’ve been talking to you about how we’ve been working on developing some handy dandy calculators for you. Of course, we have a software company, property tracker, and real estate tools, you know, great, great software apps, iPhone and iPad apps Mac app available to you as well. But just some little calculators to do some quick stuff. Well, the one we’re going to talk about today is not a little one, actually, it’s a it’s a spreadsheet really more than a calculator. But it is super handy and powerful. And we are going to endeavor to make this one public. But this time, I can only say that your investment counselor will have this calculator available. What we did is we we took the calculator that our client, Ross Warden was nice enough to share with us and we elaborated that’s not the right word, Jason. We didn’t elaborate on it. We expanded on it. We improved it. We took his great idea. And we embellished it. I don’t know, what’s the right word? I don’t know. But anyway, we made version 2.0. Okay, so as our client our Ross is describing today, in his case study of how he plans to get to 93 properties. And that’s a pretty awesome goal for a young guy like this. I’m just so, so proud of him and what he’s done so far, and what he’s going to do, when he says, something’s gonna happen, it’s gonna happen because this guy is a Dewar. And that’s great. He joined us for our venture Alliance trip in Hawaii about a year and a half ago, and shared that this spreadsheet with us, we presented it at meet the masters. Since then, even we’ve made a few more modifications and improved it more, and your investment counselor will have this available to you. If you don’t have an investment counselor with our company. Reach out at Jason Hartman calm COMM or by calling one 800 Hartman, again, that 800 number only works in the US I understand we have, of course, listeners in 189 countries worldwide. If you are outside of the US, just go through the website, Jason Hartman, calm and inquire anywhere, any form on the website and we will get you an investment counselor who can run this calculator for you. They can do a screen share meeting with you and really show you the visuals and it’s just, it’s really awesome, I must say. But ultimately, the plan is to make this available on our website so that you can go plug in your own numbers and play with it. So that will come it will come. A couple of quick announcements before we get to this great client case study number one for meet the Masters VIP ticket holders. Remember your two bonus implementation sessions. The first one is this Thursday night. It’s Thursday, August 20 at 8pm Eastern 5pm Pacific. And then the second one is the following week, we sent you all an email today with the secret link for that. And then the for those of you who purchased the meet the Masters recordings, those will be done very soon. We’re just putting the final touches on them now. And we’re going to have a really nice portal for you to go in and access those and also an audio download. So you have the videos and the audios we really wanted to do this nicely have it indexed for you, you know, lots of others would have simply shared the link and not edited it cleaned it up. Chapter rised it if that’s is that a word chapter rising? I don’t know. Where’s that word? Jason chapter rise. I think chapter rising as a word. Yeah. Chapter rise, we’ve chapter it. Boy, that applause just goes on too long, doesn’t it? So and then we’ve got our live stream coming up on Sunday. on our YouTube channel and facebook, as well. So our live stream is there on Facebook at the Jason Hartman comm Facebook page. And on YouTube, just type Jason Hartman and you’ll find our channel and you can join us for the live stream every Sunday. That’s coffee talk. That’s not ta okay. It’s tea. Okay, caught coffee talk. So join us for that every Sunday. We had a great one last week. And by the way, you can watch the replay on the YouTube channel, so or on Facebook as well. So that’s available to you. Okay. Without further ado, let’s get into this session with the client case study with Ross talking about the calculator, and I think you’ll enjoy this. So here we go. It’s my pleasure to welcome Ross Warden to the show. He is one of our clients and he is doing a great job. And I just love to see young investors with big plans and this is no good. exception. If you’re watching on video, we will be sharing a little spreadsheet for you. So you can see his great plan to take over the world as a real estate investor. And we’ll go into that, but if not, I will share it with you here on audio. And I think it’ll be very insightful and enjoyable for you. Ross, welcome. How are you? I am excellent. How are you? Jason? Good, good. It’s good to have you on the show. And thanks for coming on. You know, the listeners always tell me they love to hear client case studies. And anybody listening. If you are one of our clients, and you want to share your case study story, please reach out to us through Jason hartman.com or at one 800 Hartman because our listeners would love to hear from you and not only give you 15 minutes of fame, but probably 2025 minutes. As it works, you know the old saying 15 minutes of fame, right? Good stuff. Well, I Ross start off, give us a little background. Where are you located?

Ross Worden 6:55
I am in Columbus, Ohio.

Jason Hartman 6:57
Excellent. And you joined us for our prophets in paradise event in Hawaii, just about a year and a half ago, I guess that was right.

Ross Worden 7:05
Yeah, beautiful. I was there for the conference and for the kind of mastermind retreat after that. So it was it was a fun time

Jason Hartman 7:11
that that’s what I was gonna say you were there for the venture Alliance retreats. So thanks for joining us for that. And that was a lot of fun. And I tell you, I miss travel. It’s who knows when we will be really traveling again, in any real way. I was looking at the TSA statistics this morning. And it it’s shocking, travel is coming back. And that’s encouraging. But it’s literally only 17% of what it was this time last year. And and that’s with a comeback. So travel is increasing for sure. But way, way way down, but you know, let’s talk a little bit about your business and background because I think it kind of relates to travel and, and that’s why I wanted to talk about it. So before we get to business, a little background. Did you grow up in Columbus, Ohio?

Ross Worden 7:59
No Actually, I’m from Findlay, Ohio, the northwest part of Ohio. I came down to Columbus in 2005 went to school at Ohio State University and graduated in oh nine with a degree in Industrial Design. Okay. And then did you do a Masters in Germany? Because you said you studied in Germany as well? No. So Germany is well known for their product design acumen, I guess. And I studied there for three months 2008 I believe it was and that was just a short stint was in my undergrad. Got it. Got it. Good stuff. Okay. So you did industrial design and then for your did you start your business right away out of school or no, it took me a while to figure out what I was doing with my life. And who really does figure it out. Right, right. No, I I worked in an industrial design or product design consultancy here in Columbus for about six years, but about two or so years into that I discovered that I had kind of an entrepreneurial gene, I suppose. And started pursuing just kind of a side gig to start paying down student loans and that sort of thing and hopefully, you know, get out of debt and kind snowballed. I turned out that I really, really enjoyed entrepreneurship and had just a passion for growth and personal growth and business growth and wealth growth and just kind of everything associated with that lifestyle. And so I really went deep into that I ended up quitting my full time job to pursue my own business full time in 2016. And that’s, that’s where I am now. That’s the path.

Jason Hartman 9:21
Okay, great. So tell us about your business. You know, I’ve been to 87 countries and, and you’ve traveled a lot and your business relates to travel. So now we’ll circle back to that. And then let’s talk about real estate investing.

Ross Worden 9:33
Yeah, very much so. So I think your observations about everyone wanting to travel but they can’t travel right now is very relevant to my business. So my business is called conquest maps. We make high quality pinnable travel maps that you put up on your wall, put pushpins on to keep track of where you’ve been where you want to go. Very simple concept. There just wasn’t what I was looking for when I wanted one for my wife and I so just given my skill set, I decided to figure out how to make it myself had a lot of criteria. For my business intentions, I guess and so I made a handful more, put them up on Etsy. And they sold and I guess long story short, I kind of reinvested all of my profits for the next four or so years. So now we just help travelers who want to see more of the world. We help inspire their, their adventures, and, and that sort of thing. And all through travel maps and travel related home decor. So it’s been a really fun thing. But particularly right now, nobody can get out. And so they’re thinking more and more about all the places that they want to go. So of all of all businesses, I think we’re in a fortunate spot, because while revenue took a serious hit, when the stock market was taken a big hit there, things have come back a lot and people are really they got the wanderlust right there. They’re really hoping to get out and they’re thinking about where they want to go. They want to put those pins in the map. And it’s been an interesting time. We’re struggling to keep up right now, in all honesty, so the best problem to have,

Jason Hartman 10:53
right, yeah, yeah, I was just gonna say that. I think people really do have serious wanderlust right now. More than Normal I mean, your generation millennial generation and you’re 33 years old, has very much wanderlust much more into experiences over things. But that travel has just been halted. So I would imagine a lot of people are dreaming of places to go when when, when times changed a little bit for sure. But with your background, in your degree in Industrial Design, and in here’s a stereotype, but it’s a positive one, you know, your age, it’s a surprisingly like low tech item. What do you think about that? speak to that if you would, it’s not a piece of software. It’s not a website. It’s a map that you hang on the wall and stick tacks and do right.

Ross Worden 11:42
Yeah, exactly. It’s a simple thing. But you know, regardless of all the tech things happening at the end of the day, people are always going to live in a home much like you preach right. And when you have a home when you have your, your own space, you want to put things up in it that represent you your lifestyle, your your desires. In life, and I think this is always going to be relevant, it doesn’t really matter if there’s a better or different or whatever, whatever solution out there, you can track your travels in 100 different ways. But at the end of the day, it’s just really, really awesome to see that map hanging up there to be thinking about it all the time. It’s when people walk into your house, you automatically have a way to discuss something interesting. Hey, I’ve been there, or Hey, I wanted to go there today. It’s just super interesting and super easy. And it just, maps are just cool.

Jason Hartman 12:28
Yeah, good. Like maps? I think so too. I think so too. What other kinds of products do you make? Besides the travel maps? You travel it related decor you said?

Ross Worden 12:37
Yeah, sure. So like Canvas prints, that sort of thing. Travel related artwork. We do like wall decals, vinyl decals, by far and away. The most popular things is our pinnable travel maps, though. So that’s that’s the leader. All right. And we’re known for is Etsy your main outlet for sales or is Amazon not at all? Not at all. That’s where I started. It was a very different landscape back there today. 2013 when I launched the store, now our best places our Shopify store our website, so conquest maps calm. Okay, so

Jason Hartman 13:08
that’s good because that means and you know, we’ve had Carmen on the show talking about Amazon being an Amazon seller and so forth and all the massive, terrible, disgusting abusers that Amazon and other big tech companies just abuse people like crazy. So you have your own store and your own distribution channel, which is great.

Ross Worden 13:27
Yeah, good. I would say yeah, I’d say I don’t know. 60 70% of our sales, especially now are coming through our website. We are on Amazon and we are on Etsy but we say own the vast majority of our customer base, which is far better, it’s better for them and it’s better for us. So it’s it’s a good thing.

Jason Hartman 13:44
Yeah, good stuff. Good stuff. Okay, let’s switch gears to real estate investing. So when did you become interested in real estate investing?

Ross Worden 13:53
To be honest, I would say sometime in high school. Oh, just like me. I was 16 book. Yeah. Yeah, I think I stumbled across a book called guerilla real estate investing. Hmm. And I read it. And I was just really interested, I never really understood the stock market like really, I mean, I get it. Now I’ve researched and all this stuff, I get it now, but it never quite clicked to me. It didn’t resonate. And so I just real estate just made sense intuitively. So I always kind of had it lurking in the back of my mind. But you know, the time when I started my business, I started this particular business because I started it with $500. I didn’t have any money I needed to get out of debt. And so real estate was a very far off dream. But now that I’ve got, you know, some revenue coming in, and I don’t, and I liquidated my 401k. There was not that much in it. I have nothing in the stock market now except, like probably $1,000 in a Roth or something. Right. And yeah, it’s just like, this was the goal I was working towards. I met you at a conference and I think, I don’t know, maybe three or four years ago. I just wasn’t ready for it. At the time. I was mostly interested in only building the business figuring that out, but it’s like, I locked that in the back of my mind. Like I need to circle back to this And when I found that it was time to actually start thinking about investment and retirement, which is not totally a philosophy I subscribe to anymore, right? I was like, Okay, now it’s time to really listen to Jason’s podcasts really dig into that. And that’s totally what I did. I’ve probably listened to 500 or more of your podcasts. Wow. Yeah.

Jason Hartman 15:15
That’s fantastic. Thanks for listening. So, did we meet at one of our conferences or someone else’s conference?

Ross Worden 15:22
No, is actually so you just had Ryan Moran on your podcast. So I joined the tribe for a while there. Actually Carmen was at that conference. I think I don’t meet her there. But yeah, you heard that and so

Jason Hartman 15:33
good stuff. So so we met at one of Ryan’s conferences, then. Yeah,

Ross Worden 15:37
yeah. It was a great

Jason Hartman 15:38
conference. Richard. Good stuff. Good stuff. So you’ve got five properties now. And you’ve got big plans to get to well on the spreadsheet, 93 properties, which is an ambitious goal, and I think it’s awesome, but you’ve spaced out very nicely over time to where it’s doable, you know, As the old saying goes, goals. should be just out of reach, but not out of sight. They should be a stretch, but still realistic at the same time. And I think that’s what you’ve really done. You’re exactly the philosophy. You’ve got a I mean, listen, you’re in the business of maps. Okay? And here you’ve got a roadmap to get to that hundred property goal. Why don’t we share screens now? And you can show us the spreadsheet and let’s take a look at that. This is really exciting.

Ross Worden 16:28
Yeah, sure. So this is obviously a dramatic oversimplification of what’s happening happening but this is this is basically my plan. So after that conference are the conferences that I went to back in 2018. I got my feet wet there in December, just dove right in got a property 2019 I bought two this year, I bought two and the goal is to buy one more and you can see the pattern here. 12345 basically every year, I’m increasing my quantity goal for target every every time so next year, I plan Do for the following year five, the following year six and so on. Around this time, that’s about year seven, my hope is to start

Jason Hartman 17:07
which is, which by the way, I got to translate this to audio. So this is now the chart starts from 2018. And now we’re at 2025. So this is seven years in. And as listeners may know, when I teach the refi till you die concept, we talked about the seven years based on the rule of 70 twos, the portfolio goes up in value by 50% at a modest 6% appreciation. So you could do a refinance there. You could do 1031 exchanges. There are lots of options here. But what we’re looking at is we see one property purchased in 2018, two in 2019, three in 2020. That’s this year, by the way, if you’re listening to this show, two years hence I just want to understand This is 2020. Now, for next year in 2021. And you know, four properties a year is a modest goal, people can do that they do it all the time through our network, five, in 2022, you’re just increasing it by only one property each of those years. Okay, so now, so seven in 2024, eight in 2025, your seventh year in as a real estate investor. And then what happens because now you’ve added a row to the spreadsheet, and and there’s a one underneath the eight. What does that mean? That means, in theory with that appreciation, or, you know, that’s the point at which I feel like it’s either a 1031 exchange or a cash out refi. So in theory, I should be able to with the money I’d previously invested in that first property in 2018, extract enough out in some capacity to buy an additional one that I’m not putting new capital into the system with. So that’s basically taking by one in 2018 and adding another one to represent that in 2025. Okay, and the same thing will happen in your saying you can buy the extra property, because you’re simply refinancing or doing a 1031 exchange on a on maybe a two for one, you might, you know, by then Ross, you probably be able to do a couple of two for ones. So a lot of your increase in purchase, like if you’re saying you’re going to buy eight properties that you’re which is two per quarter, you know, you might be able to just simply do that out of the portfolio without even putting in extra money. It’d be amazing. It’s very

Ross Worden 19:39
much like your how you explain the goals. I feel like this is kind of the well, I won’t say conservative roadmap, but relative to what it is. It’s a fairly conservative roadmap. And then yeah, if it gets better than all the better, that’ll accelerate the process. But

Jason Hartman 19:53
the nice thing I like about your your roadmap is that you’re growing at a rate of only one property. per year on that top line. And that’s very modest. You know, I see people, investors come in and they got these crazy goals. And, you know, I wish him the best, I hope they achieve it. But you know, they’re just not very realistic. This is a plan. That is, you know, it’s based on smart goals. It’s simple, and it’s attainable, like you, you could actually do this. Now, it’s the properties don’t depreciate very well, then you’re gonna have to rely on some income growth from your business to support your habit, if you will.

Ross Worden 20:37
Yeah. And that’s, that’s very much part of the equation. You know, I’m going to continue building the business or businesses as time goes on. And so while I don’t exactly know totally how this is all going to come to fruition, it’s all mapped out within part of that plan and the business continuing to grow and to support this. So yeah,

Jason Hartman 20:55
in the end, you know, that’s the other thing I want to say about investors with goals or people with any sort have goals. You never know how, at the beginning, you will never have all the answers at the beginning. Nobody ever does in any venture in a relationship, a marriage, a business and investment portfolio. You just don’t know. Nobody knows. We all have to, to some extent, throw caution to the wind, jump in with some degree of blind faith and just work through it. Obstacles will come up that you’ve never imagined. The world will throw stuff at you that you’ve got to overcome. But you know, that’s really good for someone’s intellect, their character, their self discipline. Yeah, that’s, that’s great. Okay, so, on the top line, we’re still growing at only one property per year. Very modest goal, okay. But on the bottom line, it 2025 we add that extra property we talked about Then take us through those last four years there of the of the plan, because you grow at it two properties the following year to what we’ll call extra properties. Do you have a name for that? Or, or maybe self funded properties? Yeah, we’ll find all that portfolio funded. Exactly. Yeah. So so the thought there is, if I can split my properties, after seven years, one property into two properties, my 2018 property, as we just discussed, becomes another property. So I add that in down here, my 2019, both purchases, those become two additional properties. So I still have those two, and then two more because I refined or whatever the case. And so all of those are getting essentially split and added added back in for these last four years. So 2026 there’s an additional two on top of the ones that I’m funding from actual investment, I guess I’ll call it outside investment of my own cash, three in 2027, for instance, To 2028, and five and 2029, on top of my sequential incremental increases, I guess throughout that time period as well. So at the end of 2029, represented over here is 93 properties, the monthly I’ve made the very simple assumption of $200 in cash flow per month on property, all of all of those properties and again, realistically, by the end of all of this, I should be doing a lot better on many of these by then probably with an annual income of this 220 or $223,000. Basically, the total investment required to do this is 2.3 million for all of these, it does not include the portfolio funded properties. Can you hover over the total investment so I can see your formula? Mm hmm. Okay. So that is you’re basically saying $30,000

Ross Worden 23:55
through acquisition, right,

Jason Hartman 23:58
so $30,000 per equity. position, right? Okay. Now in reality, you can get properties for 20 25,025. You can do pretty good downpayment and closing costs 20,000, you’re getting some more marginal properties, and we’re talking about downpayment plus closing costs. That’s the number, and he’s going with 30,000. So that’s nice and conservative. Now, I would say Ross, that you go from 2018 to 2026. I would say you can probably get all the way to the 2026 number, possibly on a self funded portfolio where meaning and this is rough, so forgive me on this. I’m just looking at this for the first time today with you. But if you can make it to buying the to getting to eight properties per year, yourself in other words with your own investment, I bet that one in two Thousand 25. And the two extras we’ll call this self funded in 2026. I bet you can pick up those, almost undoubtedly having the portfolio portfolio funded properties, meaning so no extra money out of your pocket to actually acquire those properties.

Ross Worden 25:18
Yeah, that would be amazing. So what I’ve calculated here, I just deleted those, you can see all of the properties $200 a month cash flow should spit out just shy of $90,000 a year. So that tells me I can at least buy about three properties with my assumptions per year with just the cash flow.

Jason Hartman 25:36
Wow, that’s fantastic. This, you know, you know what you’re really showing our audience Ross is the incredible compounding effect of just staying the course. Compound compound. You know, Einstein said that compound interest is the eighth wonder of the world. We’ve all heard that quote. And this is really an example of that compounding effect. Many of us have heard Heard, or seen the little illustration where they show? If you take a penny, I think that’s how it works. You take a penny and double it every day for just 30 days, you have over a million dollars. But the amazing thing about that is that on day, like 28, you don’t have much money at all. You know, and you really get to that amazing leap that exponential growth in just the last couple of days. And that’s that’s sort of what you’re showing us here. So

Ross Worden 26:32
that’s exactly it. I’m gonna pass on quite an inheritance. Yeah, if I can, if I can follow through with everything. Yeah. Well, you got it. Give Kids Yeah, two, two right now and one on the way actually, congratulations.

Jason Hartman 26:43
Yeah, those kids are pretty lucky. Yeah. Thanks. So 93 properties in 10 years. That is just an awesome plan. And I really appreciate you sharing that. Tell us more.

Ross Worden 26:56
Yeah, sure. Here’s a really cool tidbit about what I’m working on here. Right here around the the 2025 2026. Mark, that should be approximately the financial freedom mark. Basically, unless I choose to reinvest it, I could cover in theory, all of our living expenses around 2025 2026 with a reasonable, quite reasonable lifestyle as well.

Jason Hartman 27:21
So in seven years, on a very conservative portfolio growth, you’ve reached Financial Freedom Day. Yeah. And tell us what that number is, though. What’s the revenue? I believe I use the assumption of about $12,000 a month or I’m sorry, not even. So with bass living expenses, that sort of thing. It was like right around 7000 or something is, is our expenses seven 8000, right. And so you can see right here in 2025, our monthly revenue is $7,400. Right? But wait, there’s more. Because what we didn’t say is number one, you didn’t project any increases in cash flow, right? There’s no this is again, there’s no risk. To increase, okay, which is which is great. You’re being super conservative here. And at that point you have 37 properties in seven years. Yeah. Yep. That’s awesome. Really, really good setting.

Ross Worden 28:13
Yeah, very, it’s where so maybe it’s worth mentioning this is basically my only investment philosophy at the moment, but much like you’re well aware of with Patrick Donahoe, for example, I work with his team. I layer in whole life insurance policies. And as you mentioned, it’s good to keep 4% at least as backup cash reserves for these. And that’s where I store all of that. So it’s growing it, maybe 5% or more. Yeah, especially if we see all the inflation here pretty soon, right? And that’s where I keep all that liquidity and so it’s going to be my safety net for all of this as well. That’s a very important thing to keep in the back of one’s mind when they’re investing in this I have to be very safe. Yeah. And so I keep at least 12 months you know, that’s that’s way more than is necessary, but with the business and all of my liabilities on being as you can guess can Conservative with that approach. Sure. Yeah, that’s fair. That’s fantastic. Ross.

Jason Hartman 29:03
Yeah. Thank you so much for sharing this. What else would you like people to know? Or say? Or? I don’t know, if I asked you the sort of fundamental question you may have sort of answered it another way. But But why real estate, you said you never really related to the stock market. Any other things you want to say about income property that makes it

Ross Worden 29:22
makes it the choice for you? So to be honest, I’ve dabbled with, you know, the only only possible stock or mutual fund or whatever type of approach would be dividend investing. And I actually did that I put about $30,000 or so into the stock market a couple years ago, just to start seeing what that would be like, and it just, it wasn’t very good. And I think it was, I don’t know, a couple years ago, but the stock market started to taper off a little bit and it lost value. I’m like, this is absolutely terrible. I’ve never been a gambler in my life. I never even like playing $5 poker games with my friends. I’d be the dealer, right? So I just bailed. I totally pulled everything out. And I’m like, nope, this is this is what I’m gonna put into it. properties. And so I think especially getting to know it far better with how you explain things and just sticking with a philosophy. I mean, there’s a lot of investing perspectives out there, even within real estate. But I’ve just stuck with your philosophy. It’s just, it’s too good to argue with, you just really can’t argue with that there’s always an offense with with what is it the five or so facets of the benefits of investing with real estate? You just absolutely can’t beat it as far as I’m concerned. Now, I will be the first to admit that, you know, I’m 33. I’m a young investor. There’s a lot that I haven’t been through, there’s a lot that I don’t know. But all we can do is make the best option with the information that we’re given. And I’m making what I feel is a very, very good decision for the future of not just, you know, my life, but my family’s life and the generations to come within my family. So I feel very confident and very excited. I mean, this just makes sense to me. Obviously, I built this simply in a spreadsheet, but the numbers resonate. I understand what’s going behind. going on behind the numbers, but it’s it’s tangible stuff, right? It’s actually a property with people living in it. And it’s an it’s a thing. You can look at numbers with stocks and everything, but it’s just, they’re totally arbitrary to me. You don’t have any control, right? Either way. It’s always scary to me. I’m typing. I’m a business owner. I’ve got to control things. And this also works for

Jason Hartman 31:19
good. Yes. commandment number three, thou shalt maintain control. And that’s that’s really good. Ross, what, what markets are you invested in?

Ross Worden 31:28
So currently, I’m only in Memphis. And right now is about the time that I’ll be branching out just because of how complicated 2020 has been already. I may just go ahead and buy the next one this year in Memphis, but moving past that I’m looking at, Oh, I can’t remember I’ve been talking with Evan on a couple of markets, but I’ll probably branch out to somewhere else. I’ll just have to get the next LLC set up and there’s just a little more complication that is not really that big of a deal. It’s just things are busy, right.

Jason Hartman 31:55
It’s a crazy time we’re living in but you know what, if the end of the day All those protesters need a place to live. At the end of the day, you know, the commercial properties have been shut down. And the home has become the center of the universe. And you’re in a low density market. I was just talking to someone about, well, it was a actually a tech support person with Apple. And I asked her if she was helping me with my computer. I said, Are you you know, I’m curious. Rebecca, are you are you? Are you at home now? Are you working in the office? And she said, only a few people are in the office. I’m at home. And the people that this was interesting, by the way, you’ll you’ll appreciate this because one of the things I’ve talked about in my pandemic investing presentation is and we’re going to talk about this in our upcoming meet the Masters conference in depth is how elevators and mass transit are the two danger zones, but the and she mentioned the elevators specifically, she said I don’t want to get in an elevator and she was talking about that a little bit. But she also said that the people that couldn’t work at home, the apple employees that didn’t have the option to work at home, or those who had roommates, because they couldn’t provide the security, this, you know, it’s not just a secure connection, but it’s a secure computer. And you know, I signed up a few years ago for like a data service for real estate that, you know, would be helpful to us. And they sent an inspector to my house. And they said, I have to have an office with a locking door locking file cabinet, a paper shredder, not that I ever print any of this stuff anyway, but you know, it’s just kind of an old fashioned thing. And I can imagine like, if I had a roommate, they probably would have turned me down and said, No, you can’t have our service. And my mom did that, you know, for a tenant screening service that does credit checks because she self manages all her properties, and they came to her house. And that was the same thing you know, do you live alone? You can’t have a roommate and subscribe to some of these things. And that that was interesting. So literally you’ve doubled the amount of housing demand in the world if roommates have to split up like double double the market right right there so

Ross Worden 34:19
yeah about the divorce is hot

Jason Hartman 34:21
right? Don’t you don’t even need any divorces just roommate divorces? Yeah. And I think this is just an amazing time for us as real estate investors, investors following this specific plan that we’ve you know, we’ve outlined and you’re you you’ve bought into it and and thousands of other people have, thankfully so. Yeah, I think I think we got good years ahead. And in boring suburban real estate and linear markets, right? Yep.

Ross Worden 34:47
Yep, absolutely. I try to I try to get my my family members convinced. And you know, I’m pretty gung ho on it. Yeah. It’s exciting for me, and I think I understand it reasonably well at this point, too. So I love to kind of explain it and answer questions about it. My family and friends asked so well, yeah, Randy trying to spread the message. I guess after listening to 500 episodes of

Jason Hartman 35:05
my podcast, you’re probably a pro.

Ross Worden 35:08
You know, you know, it’s funny, Jason is I listened to them at one and a half or two acts. It’s actually weird to have this conversation here you at normal

Jason Hartman 35:14
speed. I’ll talk faster. Just for you. I’ll talk faster. That’s funny. That is weird. So are you self managing any of your properties?

Ross Worden 35:24
Not yet? Not yet. I do fully intend to eventually. But yeah, I’m, I’m self managing a business. So I don’t really have the time as well as you know, two to three kids shortly. So right, but financially, it probably will make sense. Evan turned me on to stessa. And I use that for a lot of the financial tracking and stuff that’s been really helpful. So I don’t I don’t see it being too complicated. Yeah, I mean, I do want to transition to that eventually. You know

Jason Hartman 35:48
what, and like I’ve said before, and everybody has to get their own comfort level with self management versus having a manager but I literally think it takes less time self managed. Now that may not always be true, because you never know what What’s gonna come up, but, you know, the tenant just doesn’t bug you that much, you know, because they’ve got to maintain that sort of relationship with you. And the tenants are so appreciative, like, I just, I just replaced an air conditioner in one of my properties, which, that wasn’t cheap, but you know, but it’s amazing. The tenant helped me, like, they went and found several contractors, they had them, come over to the house, give bids. And then I said, Who do you think we should go with that, you know, the prices are a little different, but they’re not that much different. Just tell me who you felt comfortable with. And they said, Oh, I don’t remember the name of the vendor. So I’ll just call it ABC air conditioning. They were much more professional. And they showed up on time and you know, they were neat and clean and they just seemed like they were running more professional operation and coincidentally, they were the cheaper one. So we went with them. And I also, you know, I asked the air conditioning contractor, you know, are you going to include a thermostat A new thermostat with the air conditioning replacement. And they said, Yes, we’ll include that. And I said, you know, I’d really like to upgrade the thermostat and get a Wi Fi connected thermostat for my tenant. And I thought this is going to the tenants will love this, right? It was like a nice surprise gift for them. But what it also does Ross is it lessens the wear and tear on my air conditioning unit. Because when they’re away, they don’t have to run it, they can control it from their smartphone. And so it won’t run all the time. It won’t run as much. And it won’t, you know, because they can set it to start running at a higher temperature. When they’re ready to come home. It doesn’t run in big heavy spurts, which put a lot of wear and tear on the unit. So I think that’s good for everyone. And I literally ordered the thermostat on Amazon. I shipped it to the tenant, I have all my tenants addresses in my Amazon account. I shipped it right to them. They said Oh, we got it and we’re gonna have a guy install it and then I got $100 off from the vendor, because I didn’t use their thermostat. And so literally, it was a $35 additional expense. The tenants love it. It’s got a real cool screen on it shows the humidity, the temperature, and you know, it’s all smartphone Wi Fi controlled. So

Ross Worden 38:17
solid investment. Yeah, that’s awesome. That’s awesome. So good stuff. Hey, thank you so much for sharing your plan with everybody really appreciate it. And anything else you’d like to say? Just to wrap it up? No, not other than I appreciate how genuine and transparent you are. I’ve learned a lot from you and your show. And you know, it’s really good to actually go and meet you in person. There’s there’s a lot of as you literally say yourself a lot of shady real estate people here tonight. So, you know, I really believe that you’re in it to actually help people and I feel like you’re a very trustworthy person. And I just appreciate all that you’ve done to help people and help me and on this journey. So I’m excited for the future. Good stuff. Well,

Jason Hartman 38:55
thank you so much. I’m honored to be your guide and you know, Our team will be here to help you through life and death through 93 properties. So all right, Ross, thanks so much and happy investing.

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Read More...

In this episode, Jason Hartman focuses on property management education. He discusses why you should identify weak spots in all your investments and create safeguards against them. He discusses that property managers tend to be the weakest link in your income property investments. In the second segment of the show, Jason continues on the topic of management with a client case study with Muthiah. They discuss issues he had with a vendor and how he was able to get support.

Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it. And now here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:53
Welcome to Episode 995 995. Guess what, we’ve got a special treat for you With Episode Number 1000 something I’ve never done before. And as there is a thunderstorm out, and it is raining some badly needed rain here. I love storms. You know, it’s like God putting on a show. It is thundering and lightning out there. It’s really cool. But I will give you a clue about Episode 1000 coming up here is the clue for Episode 1000. We’re only five episodes away.

Jason Hartman 1:44
Okay, we better shut that off quickly because you know, there are copyrights and so forth we have to respect but yes, Episode 1000 will be none other than fabulous. Colby callay right and that is her most famous song bubbly. I interviewed her yesterday. Great interview She was really awesome and talked about her music career and how she started it in such a unique way online. You know, of course the music industry is massively changing. So we’ll talk about that as well as how she writes songs and I just love singer songwriters. There’s too few of them nowadays, but it’s a lost art largely, but Colby callay, along with a fairly small number of others in the music industry are still singer songwriters. So it was great to interview her. And as you know, Episode 1000 is a 10th episode show. So we go off topic and we don’t talk about real estate investing per se, but I did ask Colby Kelly what she thought about real estate investing. You can hear her answer five episodes away. Well, actually four after you’re finished listening to this one, right. So a lot going on in the world. First of all, the self management revolution property management, getting the middleman out dis intermediation the power to The investor. Remember, I am a consumer advocate, I am all about the empowered investor empowering you. So you can get better returns, have an easier life, make more money with your real estate portfolio, and just have it all work better. And that is why we teach people how to self manage, because we have done our research. And you know, I’ve been doing this for what, 14 years now the nationwide investing thing. And before that I was in traditional real estate as a low information investor for many years before this. Now I am a high information investor, because I not only taught myself when I started getting out of my little sandbox in Southern California, thinking I was an investor but really I was a speculator a gambler. You know, I made some money for sure, but could have done a lot better. Had I been a linear market investor And invested for ROI, yield, cash flow, call it what you will. But this is the right way to invest. This is what really being investor is all about. Okay? It’s what it’s all about. So what we have discovered in our research, listen to this, folks, we have discovered that 39.7 2.1 5.17% of all property managers suck. Yeah, they suck. Almost 40% What was that number again? play it back, Mr. Podcast Producer, because I can’t remember what I just said. Obviously, I just made that number up, right? Yes. You know, I made it up. Don’t hold me to the 39% ish number of property managers that suck. They suck. And some of them are just downright crooks. And we don’t want you to fall victim to that now. Hey, listen. The question we’ve always got asked herself is what What question Do we have to ask dear listeners, we have to ask ourselves compared to what? Compared to what? Compared to Wall Street? Well, Wall Street sucks even more. Yeah, I know I’m talking slang here. But sometimes it makes more impact to talk that way. As Tony Robbins who drops the F word every other sentence, it’s really kind of repulsive. Honestly, Tony, I think we got your point. Yeah. So property managers. They’re the Achilles heel of our business. There are some great ones out there. Certainly, most of them are in between mediocre and lousy. You know what, we just want you to have more control. We believe in direct investing, you get the middleman out of the game. Think about it in the real estate game. When we invest for the long term, right? These buy and hold rental properties, the most historically proven asset class in the entire world. We only really have one intermediary The property manager and we are drilling down, finding ways to disintermediate them when appropriate when possible. Not always, if you have a good property manager, Hey, keep them they’re fine. They’re great. But if you have one that’s mediocre or lousy, fire them, you’re fired. I think our president said that right. And he said it a lot in his cabin endured quite a bit of criticism for it. Some is probably legit. But, you know, sometimes you have to shake things up, drain the swamp. Yeah, you know, drain the swamp and replace some of the people in the swamp with some other swamp dwellers.

Jason Hartman 6:42
You know, it’s almost impossible not to have swamp dwellers. You know, it’s just it’s just the way the political environment works. The way the system works, the establishment works. I mean, what is Trump supposed to do? You know, hire people that don’t know their way around the financial system. I don’t even know if that’s really possible to do do that. Right. So, I don’t know, a lot of his criticism against him is warranted, but he definitely deserves some credit haters. You haters need to give him some credit, too. We have Do you know that they believe I heard this on the news yesterday, they believe that the next unemployment report, well, officially, and I know the official statistics aren’t accurate, but at least we’re comparing apples to apples, right? It’s a benchmark, that’s all it is. It’s kind of like my scale in the bathroom which I rarely use and I probably don’t need to use it that much. But you know, when I step on my scale, it’s got those little electrodes in the bottom that shoot some electrical current that I can’t even consciously feel through my body to tell me what my body fat composition is my hydration level and of course my weight and something else tells you something I can’t remember anyway. Oh, you’re like bone mass index or something like that. Anyway, look at that thing is an accurate I know it’s not accurate. I know. The scale in my bathroom that cost 79 bucks and test your body fat is not accurate. I get it. But there are some things you can do to make it a little more accurate like never use it before going to the bathroom. Always go to the bathroom first have an empty bladder. And also do it at the same time of day. Do it with clean feet. Clean feet, yes, that will make the scale more accurate. And if you do that, you will have a relatively decent benchmark. Now what does a benchmark do? It tells you the compared to what question it doesn’t compare to dunk in your you know, letting every ounce of air or I should say cubic inch of air maybe or cubic centimeter that even be better of air out of your lungs and dunking yourself into a tank of water. It’s very hard to do that. That is a more accurate test than my scale. But it’s a benchmark right? And if we do it at the same time of day in the same way, every day and we do it over time we establish a pattern That’s what we want to do with our investments. So one of the best decisions I made when I got into this business 14 years ago, okay, is I decided you got to have a consistent benchmark. And that’s why we use the property tracker software. Go to Jason Hartman comm click on the resources page, get a hold of it. It’s very handy software. And we use it as a benchmark. If you go to Jason hartman.com slash properties, you will see the performance there static. If you use the software in our subscriber, you get the non static version, right, you can manipulate the numbers change the assumptions, right, but you’ve got to have a benchmark. And so many people in our business are out selling and promoting properties with no good benchmarking data, right. They don’t impute a real vacancy rate, the numbers change of the assumptions change. How can you evaluate this stuff? You can’t it’s just too hard to evaluate. things with fluctuating benchmarks. Okay, you can’t do it, you gotta have benchmarks. So that is a very, very important thing to have a benchmark and abide by the benchmark. So when you come and join us in Philadelphia on May 19, after registering at Jason Hartman comm slash events, or Jason Hartman creating wealth calm if you want to get directly there, you will learn how to benchmark better, right, and we will play the portfolio builder game that formerly we never did it the creating wealth event, we only did it at the Jason Hartman University event. But that is so popular and people liked it so much. We’re actually adding it to the creating wealth program that we will do together. Only one time this year. It’s the only one we’ve got planned on May 19 in Philadelphia. So join us go to Jason hartman.com get registered for that. And today, we’re going to do some complaining some rather serious He’s complaining now, I want you to ask yourself compared to what? Remember, the other investment choices out there in the marketplace are either I mean, of course, this does not cover everything I know there’s more. Either you can invest in this highly speculative stuff like precious metals, or cryptocurrencies that aren’t backed by anything at all talk about the ultimate Fiat, right. It’s cryptocurrency. You can invest in those things purely speculative, they produce no income. Strictly, it’s buy low, sell high. That’s the plan, Stan, good luck with that one. A lot of people have lost a lot of money with that plan. over the ages right over the millennia, buy low, sell high. Hey, you might be right. And you’ll win, but you might be wrong, and you’ll lose and you have no other recovery method. See, we were talking to one of our web development teams today. By the way, they are not a customer of ours. We just hooked up with this company recently. And we would love to be spending this money We are spending with all these outside vendors in our own ecosystem. So if you have a service that you can provide to us, we’d love to support you and keep it all in the family. You know, nepotism is good as long as you keep it in the family. Well, I’m talking about our customer family here, right? So go to Jason Hartman comm slash ask and tell us if you’re a blogger, writer, video producer, an audio editor? Do you specialize in search engine optimization or web design? Or are you a programmer? We got a lot of super smart clients out there. If you are looking for some freelance work, let us know. We’re just maybe we won’t do it today. But we’ll keep you in mind and in the future, we’ll do it. So Jason hartman.com slash ask for that. Anyway, talking with the software people today we had a two hour conference call with several people on our team and their team, you know, and we’re on the zoom meeting. And one of the things you always want to try and avoid in business In life with systems of any sort, is this concept right? the fewest points of failure possible. You don’t want a lot of points of failure. The old saying a chain is as strong as its weakest link. So as you apply this to investments, right, what is the weakest link? Well, certainly a weak link for any investment would be for it to be one dimensional, a one dimensional asset class like the speculative things, the precious metals, the non dividend paying stocks, or the cryptocurrencies, right, those are one dimensional, it’s buy low sell high, then you’ve got two dimensional well, that includes dividend paying stocks, and it includes other investments that might pay a return to investors a dividend pref rate, whatever. But then you’ve got in most of these things in the vast majority of things, you’ve got intermediary party risk, right? So you want to disintermediate because when you disintermediate you get more more control and you get better returns and you get fewer people with their hand in the cookie jar. Folks, look, commandment number three, thou shalt maintain control of my 10 commandments that without a doubt resonates with the most people, thou shalt maintain control. Three major problems when you relinquish control you might be investing with a crook, Allah Bernie Madoff WorldCom you know, I just watched a thing about Bernie Ebers recently, and you know, you got Enron WorldCom global crossing, I mean, you know, the list is like endless, right? All of these right, MF Global, blah, blah, blah, etc, etc. There’s a zillion of them. Then you’ve got the ones who are doing it legally, right. And they’re, they’re legally putting their hand in the cookie jar and they’re taking some of your money, right? You’ve got these property managers, that litigation that I’ve been in with results property management now called Quincy property management, Kansas City, Missouri, and now they branched out they got a big lawsuit from a bunch of their employees for a hotel they own. I mean, these people are taking advantage of people, okay, it’s just wrong. And in all these years of litigation, they still can produce any document that clears them. But will you win in court? I mean, who the hell knows it’s a crapshoot. You know, it’s the mood of the judge. You know, the attorneys, technicalities loopholes. You know, I’ve been watching this show, maybe you’ve seen it, it’s called Better Call Saul. Right. And he’s this kind of sleazy attorney, but I don’t know if he’s really sleazy as this character develops. You see, the guy actually seems to be a kind of like me, right? Like a person who’s a fighter for the underdog, which I love that because I used to be an underdog I spent half my life as an underdog. Whenever I see someone taking advantage of the underdog or bullying someone or you know, and there’s a lot of financial bullying out there. It just really bothers me. I want to be a consumer advocate and stick up for them. So you got these intermediaries and they’re the property managers in our world is the only one but you know, a wall street type investment, right? Even if it’s two dimensional, never multi dimensional, like income property, but two dimensional, where you get your profit from buy low, sell high if it works out for you. And maybe you get some dividends along the way two dimensions of profit, income property, multi dimensional many dimensions of profit, right? At least five. And so you’ve got this, but the one last point of someone with their hand in the cookie jar is the property manager. It’s the only last bastion right? We’ve only got one hurdle to clear with our income properties. And if we self manage them, or do better yet the hybrid approach that I recommend where you self manage on the monthly basis, but you manage the tenant turn and hopefully you will minimize those with your without a property manager. you minimize the turn with an agent or a property manager offering unbundled all a carte services to handle the term between the old tenant and the new tenant. And that is the best plan out there. That’s the best way to go. So we’ve discussed that on many episodes, we’re gonna do a little complaining today. So please don’t take this as too negative, I want you to ask yourself compared to what, throughout this interview, it’s a case study with one of our clients who’s been on the show before. He’s a great client. I think he’s up to like 21 properties now. That is Messiah. We’re gonna play about half of his interview today. And then on the next episode, we’ll play part two, but remember something you know, I’ve been accused many times of being a complainer and I want to just submit to you that I know

Jason Hartman 17:34
you shouldn’t be negative right? Yeah, ultimately, I’m I think of myself as a rather positive person. But sometimes I get complaining complaining is that a word? I had a girlfriend years ago. Name Laney Laney complaining Well, I never told her that But hey, we still broke up anyway. She She was not a complainer, but I’m a complainer people say that sometimes. Right. You’re a complainer. I would submit to you complainers are the people who change the world. Was Gandhi a complainer was Martin Luther King a complainer was George Washington and the other Founding Fathers of the country of the United States. Were they complainers? They were all definitely complainers. In fact, I remember a lot of these original complainers about England, they were complaining about England. They had a big Tea Party, didn’t they? Yes, they did in Boston Harbor. And those complainers. Well, they changed the world, didn’t they? for the better, I would submit to you the thing that came out of that the Constitution and the papers, the founding documents of the United States of America, which makes it such a special country. Hey, listen, folks. I know we got listeners from 165 countries around the world. I’m not some America freak. Okay. I’m just lucky. Okay to happen to have citizenship here. There are certainly a lot of other great countries but the US is pretty special experience. Okay, at the time, the only experiment before the US that really kind of had it right was the Magna Carta. Okay, where you actually gave people rights against the government. And that’s a very unique concept in human history. Okay. And, you know, at least up until recently, I don’t know, you know, I don’t have any specific data on this. But up until I’m gonna say 3040 years ago, the US was the only country on earth with the word happiness, the word happiness in its official chartering documents. Try that on for size. That’s pretty cool. So we’re going to give you the first half of this interview, just in the interest of time, we’ll play the next half on the next episode. And remember, compared to what, there can be difficult sellers, there can be difficult property managers, but we want to empower you against them. We want to empower you and make you the empowered investor. That’s what we’re here for. You know, we want Want you to have as much control as possible with as little involvement and responsibility as possible. Now listen, if you’re going to have control, you’re going to have some responsibilities. But again, what we do here is we make that easier. So hats off. We’ll see you on the 19th and Philadelphia. And maybe we’ll even see you the next weekend in New York for the venture Alliance mastermind. Go to Jason Hartman comm for more info about these, Let’s welcome our wonderful client, Messiah, who’s going to share some of his story with you today. In part one, here we go.

Jason Hartman 20:42
Want to welcome back a returning guest that is our wonderful client and now friend of the show Mutharika few months ago, I recommended when Messiah was having some problems that he file a complaint against the seller and property manager of his property and he did it He got some justice he got some recourse out of that. So very exciting. This is something I want to recommend to everybody listening, be the empowered investor, be an empowered investor, be an empowered consumer, do not be a victim. So there are ways you can hold people accountable without without having to go out and hire a lawyer and taking them to court and dealing with that whole mess because that is just a mess. And it usually doesn’t work. And I’m telling you that from my own experience, but you know, there are some other things you can do. We’re here to talk about those today. And and remember something else before we dive into this, an ounce of prevention is worth a pound of cure. an ounce of prevention is worth a pound of cure. Another old saying like that I used to hear from my aunt burness is a stitch in time, saves nine stitch in time saves nine so you know that’s another thing we’re doing. Talking about today, right? And Matthias is going to share a couple of best practices, learned the hard way from mistakes he made that now you know, he will never make those mistakes again, the real world University of hard knocks the school of hard knocks, and then we’re going to talk about what you can do. Even if none of that works, the prevention doesn’t work. Okay, so, so Messiah. Welcome and thank you for sharing your story with all our listeners, we really appreciate it. You’re welcome. So what happened,

Muthiah 22:27
I bought a couple of properties in Alabama. And one of those properties that I bought turned out to be a big disaster, the property had a pool and never own the property or the pool, just wanna have a pool and that brought some problems along with it. One of the mistakes I made I hope others will learn from this is to make sure that you conduct a home inspection when I’m when I say a home inspection or a home inspection the entire property I mean, not just the home in my case, I did not inspect the pool, which turned out to be a problem later on. There was some problems with the line. As the fool and so on. So, it’s important to make sure that you get a complete inspection. And after the inspection is done, and the seller has done the repairs, you need to send the inspector back to go back and re inspect it to make sure that the absolutely backed up.

Jason Hartman 23:14
That is a good best practice. So, two things there that we’re saying just make sure everybody caught those. Number one, generally speaking, try to avoid properties with pools. It’s not a hard and fast rule, they certainly can be more desirable. So you know, for the hassle and aggravation of this whole extra system and potential piece of liability of course, it could be worth it if it pays for itself and then some, but most properties won’t have a pool. Okay, but you know, here and there, you’ll see one with a pool. That makes sense as a good rental property. Okay, so I’m not saying yes or no, I’m saying mostly No, but you know, not completely. So the first thing is if you have a pool remember, in addition to your normal home inspection, you must also have a pool inspection and that is going to Be almost for sure that it’s going to be a completely different inspector that specializes in pools and pool systems. So, have a pool inspection. The other thing is when you have because you must always have a home inspection. When you have that home inspection, there will almost always be punch list items, you know, and you can decide as the empowered investor and the buyer yourself, but if they’re, you know, just minor little items, you can just let them go and trust that the seller is going to take care of them. If not, though, you must have a re inspection, you have to pay an extra fee to have the home inspector go back to re inspect the property and make sure that all of those repair items are done before you close on the property. Okay, and if they are not done, do not take a promissory note from the seller that says they will do them later. The only thing I would accept is money held in escrow In other words, part of the sellers proceeds held in escrow. If they somehow for some reason, can’t get those repairs done before closing, then the closing attorney, the escrow the title company, they withhold part of the sellers proceeds that requires a mutual instruction or at least your signature before those funds can be released and make sure those funds are adequate. So for example, if they say, Well, you know, the property needs a new water heater, right? And, you know, say you determined that a water heater is going to cost, I don’t know, 700 bucks, right? Then, you know, you withhold 700 at least, you know, maybe a little, probably some extra, okay, because you never know what else you might discover. So if they agree to withhold $1,000 after the closing of the deal, and you control that money that you know, can’t get released to them until it’s fixed, then you’re going to be okay, that’s your insurance, okay, but don’t just accept a note There’s no money behind it, you know, Show me the money as Jerry Maguire says, okay, so Messiah.

Muthiah 26:05
Okay, go ahead. That was the very first thing. You know, the next key point for me was this is something that’s always, you know, ever since I started buying property through the network, it’s been something that I’ve had success and proper with the property management company, you know, I mean, all these property management companies have this standard contract that they have you signed, you know, I think it’s important to read that properly. And so you know, what you’re getting into these also important to have a good relationship with the property management company. And I know it’s a good idea to go with the company that the seller recommends, but I think that they have a beneficial interest. And so I would just shop around if you have time to look at other property manufacturers, but you need to work with somebody you’re comfortable with because they could make it very difficult for you. Going forward by not crediting your account I’m not communicating with you properly. A lot of things and you know, and Jason play honestly, or last two years. This is just My opinion, I could be wrong with this based on my experience. So the bigger the company is, the more layers there are in the company, it’s very hard to deal with them. And you can get lost in the shuffle. I mean, I’ve got properties with something that manage thousands and thousands of properties and they’re just too many layers. Okay. Okay, so more bureaucracy, right. So there’s a trade off for that. And I’m not sure which is best. there’s sort of two kinds of companies in the world. on each end of the spectrum. There’s the big company that supposedly supposedly, okay, has really good systems. You know, they’ve invested more money in technology

Jason Hartman 27:37
and software and they’ve got protocols and got business processes, hopefully that are more established, right. But they’ve got more bureaucracy, right. So that’s the big company concept. It’s good and bad. Okay. On the other side of the spectrum, there’s the small company that is, you know, kind of winging it. Okay. In some ways But, but they’re hungry. I mean, in theory, they’re hungry. And they’re really gonna just give you a great service, right to try and make a name for themselves and, and try and get bigger, right? You know, that’s whatever, but entrepreneur wants us to be bigger, right? And so it’s kind of two ends of the spectrum. And you know, the experiences both either they can go either way with either one, the small guy, it’s sort of not as efficient in a lot of ways, usually, the solopreneur, or the small office with three people, you know, versus the big company with 30 people, you know, I don’t know, I don’t know what the right answer is. It just all depends,

Muthiah 28:35
you know, like, no, Jason a while I was trying to say was, look, I think it’s important to make your expectations very clear to the property management company from the very beginning, right, so they know you’re not just passively sitting back and, and then accepting whatever it is, they credit your account. If they do that. $500 or $10. You don’t know why they did nothing. You need to question these things. You know, you need to look at your statement. You need to look at your owner’s portal, and why did you do that? Light. Why is this my response to the attendance response early? And you know those questions, I think it’s important for investors to ask the property management company so that next time, they know that, hey, you know, maybe we should be more careful.

Jason Hartman 29:14
Let me mention a few things here. So first off, I don’t want any of you listening to be the easy customer. I don’t want you to be a pushover. Okay? You know who you are. On the other end of the spectrum. If you’re a pain in the ass, I don’t want you to be too much of a pain in the ass either. Okay? Because, you know, it’s like neither of those people gets very far in life, right? The difficult person, nobody wants to work with them. And they will just put up their hands and say, go somewhere else. Right. The pushover gets taken advantage of all the time. So I think the answer is somewhere in the middle. Right? You know, I would if there’s a continuum, between the totally difficult, impossible client and pushover everybody listening when it comes to dealing with property managers? I want you to be 6560 65% toward the more difficult person I want you to be aware empowered investor. But here’s the thing. You can have high expectations without being a jerk. Okay being a jerk just won’t get you anywhere in life. Okay, you know that always backfires. You know, there’s it’s just doesn’t work, okay? But you can still have good expectations and high expectations. When you were talking about the contract Messiah and the importance of reading it. The importance is way more than reading it, reading it as the first step. The second part is negotiating it. So just because the comment, hopefully you read it, so thank you for saying that. A lot of people don’t even read this stuff. Okay. The thing I want you to negotiate folks, is I want you to negotiate the latitude and this is not new information. I’ve said it on the last, you know, 900 and something episodes okay? But negotiate the latitude, the property manager has to charge you for stuff. So again, they will have these standard clauses in those contracts and they need them. Okay, but just how much to what degree they need them as the question. So the clause will say, in case of an emergency, in other words, a pipe is break, you know, pipe broken, there’s water leaking everywhere, you know, the property manager has the right and you want them to have the right to go over and stop the leak to stop further damage. Right. Okay. But then the next thing will be those sort of optional repairs, the tenant calls and complains about something stupid, like I saw an ant on the kitchen counter, or the light bulb burned out, you know? No, you don’t. That’s ridiculous. This is ridiculous stuff. Right? And I want you to look at that clause the way it’s written very carefully. Okay. The discretionary spending plots, where it says the property manager has the right to control In their discretion, up to $200 per incident of money that they can deduct from your your check. Okay? The funny thing is mkhaya when it comes to like my mom has been on the show several times and you’ve heard her and commented about her, you know, she’s self managing. She’s like an extreme do it yourselfer, and I really am starting to be a real believer in self management, but she doesn’t spend hardly any money on her property. Some of these property managers, they’re just giving away your money. It’s ridiculous and you got to stop them from doing that. Do not be a pushover, okay? Just say this clause, I’m going to limit it to a per month amount, not a per incident amount. First off, there’s a difference between per incident and per month. So the tenant could call twice in one month and say, Hey, Well, today the garbage disposals broken, and then you know, next week, some other things broken right, and suddenly if the property manager Conduct $100 per incident, you lost $400, you just got to eliminate that discretion. It’s not necessary. The duty, though, on you, the investor is that you have to be available and communicative and responsive. Okay, so if that tenant calls about something and says this or that is broken and needs to be fixed, first of all know what you’re actually obligated to do. Okay, you’re not obligated to do everything, you know, the tenant has some responsibilities to okay. So that’s the number one thing. And then the number two thing is you must communicate and approve or deny requests quickly. Otherwise, the managers go say, Hey, we need discretion because I couldn’t reach you for two weeks. And by then the tenants really unhappy, right. But the bottom line is, I’d really recommend people consider self managing, it’s much easier than you think. And we’ve done a lot of shows on that over the years. Anyway, so per incident, and per month, I want you to make it a purchase. month limit of no more than $200, ideally less. So don’t just read your contract, negotiate your contract with your property manager or just self manage, and you can take them out of the equation completely. Okay,

Muthiah 34:14
go ahead, right? Yep. Just let me play the devil’s advocate for just a second, you know, property managers that manage hundreds of properties. They have this standard contract and in spite of what they said, I’ve gone back and renegotiate. But they’ll say, Well, look, we can make this change for you. We’ve got hundreds of contracts, we can just change it for you that would screw up our whole system, you know, we don’t have the resources to track your particular property and say, it’ll probably comes up and you know, for some reason, so that it

Jason Hartman 34:43
can you can take your business elsewhere in the place I’d really like you to take your business is to self management without a manager at all. See, there is a inherent conflict of interest with property managers. You’ve heard me say this before, the conflict is that they’re trying To serve two masters, and you know, the rule in life is you can’t serve two masters, you can either serve the investor, which is technically the obligation is to the investor, or you can serve the tenant, you can’t serve both. So the property managers will be liberal in spending the investors money as much as they can usually get away with it in order to make the tenant happy, because you know, what the tenants do, when they’re unhappy, they go to Yelp and they start writing bad things about the property management company. And you know, it’s interesting, whenever you hire a property manager, I want you to go to Yelp and read the reviews now. Look at we all know reviews are a lot of them are false. Okay, you know, they’re false good and bad, because their competitors, you know, will write bad reviews about them that are fake, and their employees will write good reviews that are fake to it. So where’s the truth? Nobody knows.

Muthiah 35:57
Okay,

Jason Hartman 35:58
but it’s probably some We’re in the middle. That’s why you just have to not look at the star rating necessarily. But you have to actually read the things and see if they sound legit and just evaluate them with your brilliant human brain. You know, that’s why we got these great brains, they work pretty well most of the time. And so that’s one thing to do. But if the property manager has a bunch of bad reviews, and they’re from tenants, I don’t know that that’s necessarily the worst thing ever. Right? If they’re from investors, that is really bad. If there’s a bunch of investors saying, Oh, this property manager is terrible, you know, they they ripped me off or this or that, or the other thing that I really get concerned about, if they got a bunch of bad reviews from tenants, because they’re a little more strict with the tenants. That doesn’t necessarily bother me as much. We’re complaining right now. But compared to what is the question, compared to a wall street investment, or some investment in some fund, this is way better, at least hear, you know what’s going on and you have some control. Yes, when you’re a direct investor With the plan that we outline, you’re going to feel the bumps in the road. But you know what, at the end of the day, you’re going to have a lot more money, okay? Because when you buy the mutual fund or the stock or invest in some fund that’s buying apartment buildings or something, you don’t feel the bumps. But guess what? Someone has taken all your money, and you just don’t even know about it. Okay, here, at least you can see it right, and you can control it. So that’s what we want you to do is become an empowered direct investor. You know, that’s commandment number three, thou shalt maintain control. This is about being a direct investor and getting those higher yields because you’re in control. This will be continued on the next episode. Thank you for listening and happy investing. Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.

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Jason Hartman begins off the episode with Doug to talk about portfolio makeovers. They go into the idea of long-term investing and the fallacy of passive investment. Doug pulled out of the real estate business and missed out on profiting as a result of short-term thinking with his investments. In the interview segment, Jason finishes the second half of an interview with Muthiah. Muthiah explains why he had to file a claim against a vendor and how we got restitution. Jason talks about a Hall of Shame he’s created and why it’s important to file complaints even if they won’t help you at the time of your complaint. This is the benefit of a network.
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Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:52
Welcome listeners from 165 countries worldwide. This is your host Jason Hartman with Episode 997 Episode 900 97 Yes, that’s right. We’re only a couple episodes away from Episode 1000. That’ll be a 10th episode show. So we go off topic, discuss something of general interest, and we will have Coby callay, the famous singer and songwriter on that show Episode 1000. Coming up, I can’t believe we’re here already. And I can hardly wait till we get to Episode 5007 thousand. And we will get there folks. By the way. That brings me to another point. We did have a little bit of a problem with our iTunes feed. If you are listening to the podcast on iTunes. We had a bit of a an issue with it last Friday. Thank you all the listeners who reached out to me on email and voxer and told us about that problem. We appreciate that. I think we’ve got it fixed now. But one of the fixes that we had to implement was to make it so not all of the episodes show up in the feed. now know that you can always get all of our episodes And if an episode doesn’t show up on Monday, Wednesday and Friday, like clockwork, hey, you know, Mussolini said at least the trains run on time, right? To take it from a dictator, if it doesn’t show up, you can always just go to Jason Hartman calm and find the show. But we always appreciate you letting us know if there’s an issue with our feed. We think we’ve got that pretty much fixed now, but just wanted to inform you of that. So we are going to talk today with this is a two part show. We’ve got part two of our interview with mithya, where we talked about solving problems and a client case study of moving from challenges to overcoming those challenges and getting them fixed. And speaking of overcoming and moving to a better scenario, something that I created many, many years ago, was called the portfolio review. And then part two of that was the portfolio makeover and we are going to bring this back in a bit. Much better version, we’ll call it version 4.0. Maybe it’s not 2.0 version 4.0. And if you would like to meet with me in Philadelphia, on Sunday morning, the 20th after our event, we’ve got our conference there, the creating wealth conference on May 19. I will be doing personal, individualized, private portfolio makeovers and portfolio reviews. And we’re going to talk a little bit about that today. Because our client and friend who you’ve heard on the show, before, Doug has taken and really, really improved these spreadsheets, the tools that we use to do this review and make over dramatically, and he’s going to talk to us about that today in the intro portion. Doug, welcome. How are you? Good, Jason. Good. It’s good to have you on so just to give a little history because you are a client case study in and of yourself. Oh, yes. We’re not really talking about that today. But when did you first discover My podcast and start buying properties. It was right here. What? 10 years?

Doug 4:04
Yeah, maybe So yeah, I first discovered your podcast in 2008. I started buying properties in 2009. And you know, I got a couple properties go on and then I encountered just a few just biblical disasters. I think I had a property management company that took place a tenant that just totally tore up my property.

Jason Hartman 4:22
No, no, Doug, we’re with Mu theia. Today, we are talking about negativity and problems and overcoming them. So let’s not overwhelm the listeners otherwise nobody will ever buy a property. But yeah, folks look at like I always say, this is not a free ride, okay. There’s, there is no, folks, if someone is telling you that there is a passive investment, even if it’s money in the bank, they are lying, lying, lying. probably all have heard of Gary Vaynerchuk. The outspoken business person not talking about real estate, but he just Totally rips into all these people out there selling these businesses that are supposed to produce passive income. It is BS. There’s no such thing as passive income. But there are things that are easier than others. And that’s what we have. We have the most historically proven road to wealth. But Doug, yes, biblical disaster. Go ahead.

Doug 5:19
So yeah, so what happened was right, I started going pretty good. And then I kind of sputtered for a while. And now I’m really coming back. Yeah. And so I think the portfolio review and portfolio makeover process is something that I’m running both academically and for myself and looking at how I want to redeploy some of the equity capitals that I have in various places throughout my financial life. Yeah. So it’s great topic.

Jason Hartman 5:42
Yeah, good stuff. You know, what saddens me about your story a bit is that when you had this problem, where you got discouraged about the tenant that beat up your property, and you had the bad property manager, and by the way, folks, like I said on the last episode, dis intermediation get rid of these prices. property managers in less, they’re good ones, just get rid of them try self management with our hybrid approach that we’ve talked about on many episodes, I am convinced that this is the way to go, you know, I just look at the way people self manage versus having the managers and it’s just easier. So you know, get the get the middleman out of the way and make your life easier. I really think that’s the way to go. Unless that middleman is really good and really adding value, which some of them do, and they’re great. But if they’re not great, then just try it the other way and many episodes on that I won’t go into today. Doug, the thing that saddens me about your story is that when you have those challenges, it was just as the market was turning coming out of the Great Recession, and I know you sold one of those properties. And Ma’am, if you would have held on to that even though you had that bad experience, you would have made a lot of money. So sorry about that.

Doug 6:52
No, that’s all right. You know, there’s only two good times to plant a tree you know, the best time is 20 years ago and the second best time is now

Jason Hartman 7:00
So yeah, that’s a great thing.

Doug 7:01
I can’t go back 20 years you know, I was gonna say cuz yeah if I could go back to 2009 the first thing I do would be buy bitcoin but then the second thing would probably be to pick up more properties.

Jason Hartman 7:11
Remember, when you and I, you were on stage with me at meet the Masters in Irvine, California many years ago, and we were talking about Bitcoin. And people in the audience, I remember asked, What is Bitcoin? And I think the price back then was about 70 bucks. Now, look at folks, you know, that I do not recommend cryptocurrencies or speculative investments. I mean, look, maybe, you know, if you want to take 5% of your net worth, and gamble, I think that’s an okay strategy because, you know, the risk reward ratio, if you’ve got a few bucks, it’s just not a big deal. If you lose it, it’s not gonna affect your life. But if you win big, it could affect your life, right in a very positive way. So I think that’s fine. But yeah, so I know shoulda coulda, woulda, as always Everything in life is that way. You know, it’s the human condition should have could have whatever right but yeah,

Doug 8:04
remember? Yeah. When I first heard about Bitcoin it was on an econ podcast, I think it was it was trading at about $40. And people said it could grow to be like, maybe 500.

Jason Hartman 8:13
Yeah, right, right. And here we are 8000 or something like that. Right. But we’re down from almost 20,000. Right. So yeah, that’s crazy. Well, one of the things that helps cure the human condition, if you will, a little bit here is the portfolio review and the portfolio makeover because as we go through life, we keep getting our emotions tilted. Don’t we buy things that happened to us, you know, if we have a bad tenant, or a bad manager, you know, this upsets the apple cart, but one of the things that helps us keep on track is simply doing the math, right. And a lot of people with income property, they’re winning, and they think they’re losing simply because they Don’t know how to do the math even when really bad things happen. Okay, biblical disasters, if you will, amazingly, you know, you add it all up at the end of the year, and it can surprise you, you still won, you know, because the question is compared to what compared to the s&p, you know, it’s gonna do maybe 8% a year or something like that. I mean, it’s pretty easy to make 8% with income properties, you know, that things would have to go really, really bad to only make 8% all in with income properties. So we’ve got to look at what we have now and what we could have and how that affects our overall plan. Go ahead.

Doug 9:37
Oh, no, I was just gonna say on the SMP side, say you can make 15% per year but then two years will be a mirror. Yes, it but then two years before you’d retire, there’s a 45% market correction. Well, all those gains don’t mean anything to you now. And so, so yeah, I think that’s one of the other things that’s really important about a portfolio review, is it gets you to redistribute your equity. Because then what that does is it distributes your risk. Because whenever you get high concentrations of equity and you know, one investment type or another, you end up having more and more risk there. And so the more you’re able to dissipate your risk, the more you’re able to insulate yourself when disruptions happen, because the thing is, right, weird stuff is going to inevitably happen, you know, if you’re playing the game to win, which means you’re playing it actively. That means you have a lot of things that go, okay. You’ll have some biblical disasters, and you’ll have some great triumphs. And if you get to down whenever something goes terribly wrong, then you’ll never be in long enough to win. good points.

Jason Hartman 10:37
I agree. I couldn’t agree more. And the interesting thing is our minds are predisposed toward negativity. So we could have a portfolio of say 10 or 20 properties. And if one or two that would be 10%. In either case, goes poorly, that like derails the whole plan where we’ve got these other nine or 18 properties that are You know, maybe five or 10 of them, you know, I’ll take that half, I probably should have just stuck with one, number nine or 10 or 20, you know, are going pretty well. And a few are going great. And then we’ve got this one that goes bad. But the interesting thing is just part of the human condition, the one that goes bad is the one that derails the whole plan, because of the way our minds react, emotionally to things. And that’s why it’s important to just do the math and look at the spreadsheet, right? And look at the performer and know what’s really going on that grounds us I would say it grounds us right, is that a fair statement?

Doug 11:38
It is and I think one of the things that’s really important too, even with bad experiences and losses is that you know, anytime you’re doing something passive so like, say your buy and hold or and you put your money in the SMP and it rockets up. Okay, that’s great. But what have you learned that you can repeat in the future? No, the answer is nothing.

Jason Hartman 11:56
Yeah, good. Good. No, no, here’s what you learned. You got lucky. Yeah.

Doug 12:00
You know, you learned that you got lucky. And one of the things that I think that’s good about something a little more active, like an investment property is that as you go through it, you’ll start learning to make good decisions. And then those decisions are repeatable, and they’ll actually increase your performance in the future. The problem with being too passive is that you don’t learn from your successes or failures. So you don’t have the ability to get successively better as you gain experience, right? Being a 10 year passive investor or a 50, or passive investor makes no difference because you’re just writing the market. And if the market goes down at the wrong time, you have no recourse. There’s nothing you can do about

Jason Hartman 12:38
it. It just it just happens. You’re just a it’s, it’s like playing a sport versus watching a spectator sport. Okay, you can’t do anything, you know, either your team’s gonna win or lose. But if you’re playing the sport, you can change your strategy. You can try harder. You can do things you’re actively involved in, engage in You’re becoming a better person by playing the game. You’re not becoming a better person by watching the game. In fact, I would argue that you’re becoming a much worse person by watching the game you’re probably getting a beer belly number one, you know, and lots of bad things come out of that. Right I think that metaphor of the spectator sport is probably pretty valid and I know you like spectator sport so

Doug 13:23
I was gonna say yes, yeah now reminded me of all the time I’ve spent yelling at the television for refs at basketball games in the Portland Trailblazers, we’re losing in the fourth quarter.

Jason Hartman 13:31
Yeah. How did that work for you? By the way?

Doug 13:35
I swear there’s a part of me that thinks they can hear me.

Jason Hartman 13:38
Yeah, absolutely. That’s funny. Hey, we’re gonna have to wrap this up for this episode to get to our guest Messiah and do part two of his interview from last week. So, Doug, thank you so much for sharing this on the next episode. What else are we going to cover on this? Because there’s some really good takeaways here.

Doug 13:57
What we’re going to cover is the whole idea of ritual. Turn on equity and how you can use some of the tools that the big corporate finance folks do to optimize your own portfolio. And then you’re going to bring it back to how you’ll be doing portfolio reviews with people who come to creating wealth in Philadelphia so that they can use the same same techniques to make themselves wealthy instead of just making corporations wealthy.

Jason Hartman 14:21
Sounds good to me. Sounds good to everybody. Okay, thank you so much, Doug, for joining us on this. We’ll talk to you on the next episode with part two about portfolio reviews and portfolio makeovers. Go to Jason Hartman comm and click on events to join us in Philadelphia or the New York event the following week. Let’s get to part two of move fire. And remember, when you hear about this negativity in real estate, and the problems and overcoming them because there are problems, this is not a free ride. There’s no such thing as a passive investment. Remember to always ask yourself, compared to what that’s the important question for everything in life compared to what, you’ll feel the bumps in the road more in this investment because you’re a direct investor, but at least you can do something about them. And you can act and fix things. And that’s what we’re talking about here today. So let’s get to Matthias. And his story is great. So let’s go ahead and transition over that. And Doug will talk to you in the next episode. Thanks, Jason.

Jason Hartman 15:33
I’ve got some property managers that like, I mean, literally years go by and there’s not one deduction other than their management fee. I got others that man it’s like every other month, there’s this that this piddly thing that piddly thing. You know what? My mom the do it yourselfer extraordinaire, you know who’s been on the show many times talking about her best practices. You know what she does? The tenants she just gets the tenants to agree to fix stuff. When you’re self managing as a direct investor, you can actually talk to the tenant, and you can set expectations and you say, look, you are not living in a big institutional apartment complex where you’re crammed together with 100 neighbors, okay? This is your own home, it’s a single family home. So, you know, I know that you don’t own it, but think more like an owner, you’ve got to do a little maintenance here. You know, this is not a big institutional apartment. We’re not going to send an exterminator out, you know, every week, we’re not going to change your light bulbs for you. This is a home, I expect you to take pride in it, and, you know, get involved and, and take care of things. And this is what I’m about to say is probably not even legal. But I’m gonna say it anyway. But I’ve heard managers over the years are not managers, but in fact say to me things like, well, this is why I always ask them if they’re handy.

Muthiah 17:06
If they like to fix things, you know, you know,

Jason Hartman 17:11
it should almost be a test, you know, you give them a test. Well, you know how to fix a sink?

Muthiah 17:17
You know how to unclog a drain? You know?

Jason Hartman 17:22
Actually, I don’t think I don’t think being unhandy or handy is actually a protected class yet, under the Fair Housing rules, but it probably will be something

Muthiah 17:33
like but some of these property managers you know, I know that the ones in Quad Cities I think they actually put out a video they want these tenants watch the video on what they need to do. So they don’t come back and say, Well, I didn’t know how to turn the main water off when I left this and that some basic things they actually had them watch a video so and then they haven’t signed off on it as well. So if there’s any issues that comes up as a result of them, not having watched the video or not, not having followed with the video instructed them to do it and they’re held responsible. No, getting back to your mother, I love your mother, you know, I spoke to her, you know, during the last meet the masters and, you know, she sets the expectations at the very beginning, and there’s no fooling around with her, you know, you, she lets them know, hey, if I don’t get the rent by the first, then I’m going to send you the, you know, the three day notice. So they don’t fool around with somebody like that, that sets the standards of the very, very first time that you know, they don’t pay the rent and cheeses and don’t notice, you know, and then so then from that point on, they take it very seriously. So that’s why I’m saying when you when the property managers, you know, you just set the expectation, hey, look, I’m watching my account, you know, I want to make sure that, you know, if you’re going to adopt something, I need to know what it is.

Jason Hartman 18:38
I agree, you know, you you need to do that. But I tell you, it just the more and more I do this, and you know, we’ve done thousands of deals. Okay. I’ve been doing this a long, long time now. Okay. You know, just in the nationwide turnkey business what what is it? Is it covenant? Well, it’s almost 14 years I think now right? And or maybe it is 14 years. You Talking to thousands and thousands of investors. Just the more I think about it, the more I see it, the more I think that you just have this inherent conflict of interest with property managers, you just self management more and more as the way to go. But, you know, if you have a good manager, it’s great, but few managers are great, you know, I mean, some of them, you know, there’s a continuum right? There. Some are okay, some are great, some are terrible. Okay, so move. I know, just out of curiosity on the self management thing, have you ever done it considered it? How many properties Do you have from us now?

Muthiah 19:36
Well, I have about 20 properties right now.

Jason Hartman 19:40
Hey, listeners, don’t you love that Messiah doesn’t even know how many properties he has. That’s cool. You got so many You don’t even know.

Muthiah 19:49
How many do I have?

Muthiah 19:52
One so I have 20 right now?

Jason Hartman 19:54
Yeah. Okay. Okay. You had 21 Okay, got it. Okay, so Mutharika Did you self manage anyway, Never no no no i did they know what not these but you know before I started investing I owned a condo and I self managed at that point that was many years ago but you know I did that on my own wasn’t that great you know pretend would come up to my work and start screaming you know it just want to say yeah, but but CNC with this self look at I self managed when I was a local investor. You know, I self managed everything. Okay. And then I self managed long distances. I’ve told them the show before, you know, but I never had any tenants coming in screaming I never had any calls at one in the morning. All of this folklore you hear it just never happened to me. Okay. I did have this one guy. He was the funniest guy ever. In the 90s. His name was Hugo and he lived in my property in Rancho Santa Margarita. And he used to come in almost every month he had his members only jacket on. The guy was just he was just funny. And he’d come in every month and hey, Jason, is you go Sorry, the rent is late this month, he was late almost every, almost every month, you know, he come in to go in, he always had an excuse and he was just the guy was just so funny. My assistance Karen and Denise Houston. See you go come into the office, you know, like, it was always the fifth of the month, it was never the first. You know, he always handed me a check. But you know, it was, it was fine. It’s no big deal. Anyway, I’d consider self management but Messiah, we want to get to the thing of course, and it’s my fault because I’m blabbering here. Let’s talk about holding these people accountable when you get a truly bad actor. And look at folks, I don’t want you to think this happens all the time. It doesn’t out of thousands and thousands of transactions. You only get a few of these, okay? But it’s just the law of large numbers. You’re gonna get a few Okay, there’s there are bad people out there. There are bad actors. There are people that will be good for a while and then they become bad. They sort of take the relationship for granted they you know, the Napoleon I always try to remind myself and humble myself with this great quote by Napoleon. You know, Napoleon finally met his Waterloo, right? That’s the story. That’s how history tells us. And Napoleon used to say, the most dangerous moment comes with victory. The most dangerous moment comes with victory because we become complacent, we become arrogant, and we start missing things. And you know, as humans, we must never do that. We’re gonna have victories in our life, and that’s great. But we never ever want to become complacent. Okay? And that’s what happens with these property managers. You know, they get busy, and they get successful, and, you know, they just forget to appreciate it. And it’s just part of human nature. It’s not a good thing. But it’s a real thing. You know, and sometimes there are just some downright crooks out there, just some real scum, okay. And you got to hold them accountable. So what I did is I sent you my whole of shame resource list, which by the way any of you can get by going to Jason Hartman calm and reaching out to your investment counselor, if you don’t have an investment counselor, just fill out any web form at Jason hartman.com. And they’ll get it to you. And, you know, this is the list of agencies that you can simply file a complaint with for free, whether it be the real estate commission, you know, the contractors License Board, different agencies, okay. And it’s certainly by no means a comprehensive list, but it’s a good start. And, you know, this is what you pay taxes for folks. You’ve got these free government resources, these regulatory agencies, and I want you to use them, I want you to use them to file complaints against bad actors. So that at the very least, maybe you won’t get justice out of it, but you probably will. You probably will, because they’ll send them a letter saying, hey, look, complaints been filed against you fix it, that’s what usually happens. And then when they don’t fix it, they take the next step, they might suspend their license, they might sanction them, you know, the government has, you know, has unlimited power virtually right. You know, maybe they won’t pay attention to your complaint. You know, maybe it’s the first one that came in about this bad actor, and maybe they got to accumulate a couple of complaints, but they as that file grows, and there’s three complaints, four complaints, five complaints, you know, this regulatory agency is probably going to come down on them. And that’s a good thing. And you know, what, even if it didn’t help you directly, it helps the next person, okay? So really, you know, become the empowered investor, don’t be a victim. And then the other thing you can do is an online court system, like I referred you Messiah to people claim. I had them on the show, not on this show, but on my free court show and I’ve got a similar passion project startup that I’m working on called free course. That’s free court.com you go check it out. It’s an online court system. And people claim has been operational for quite a while now. You filed a complaint on people claim. And that’s what did the trick you did the administrative complaint with the regulatory agency also. Right. Tell us about what I did. And what happened?

Muthiah 25:18
Well, I mean, I found you based on your recommendation and filed a complaint with the Alabama real estate commission as safely as for you, yeah. Yeah, I know, they told me that they investigated it. And then they said that they already shut down the property management company that this is affiliated with this particular company, but they couldn’t do anything to this company and sold me the property because they were operating under a different entity was not a real estate was not under the under the guise of a real estate company. And so they didn’t have jurisdiction over them. And so that’s why they couldn’t do anything, but they did tell me,

Jason Hartman 25:48
you know, what we’ve got to do in this country, Messiah. And look, folks, you’re not gonna like this because a lot of you asked about asset protection, and you’ve heard Garrett Sutton on the show, talking about that and all that. stuff, but I’ll tell you something we really need to in this country re examine the way people are allowed to use entities to screw people over. Because especially in the big corporate world with, you know, with these bigwigs, I mean, it’s just disgusting what they do, but anyway, that’s sort of another tangent obviously,

Muthiah 26:19
you know, that’s a very valid point because you know what it is right after even though they got blind and they got suspended, the property manager company got suspended. These guys went back change the name of the company and incorporated somewhere in some other state, and they continue to do business even in Alabama is still selling property in Alabama, but under another name, I mean, you know, this just unbelievable.

Jason Hartman 26:43
Yeah, no, I know it’s a sad state of affairs, but anyway, it is what it is. Okay. So, but the thing that did work for you, though, you got some justice, and they actually folks, this story ends with, they actually bought the house back. I mean, that’s a pretty big deal. Okay, they actually took it back and gave you your money back move higher. So I’m being a spoiler there. But so Mutharika, what happened. So you you went to portal claim calm? My recommendation, you’ve you basically filed a case, right in the online court.

Muthiah 27:16
Right. Yeah. And there were people that are offering to help me even through the people court. They kept saying, hey, how can we help you? Have you? Have you heard anything? Have they ever settled with you, and so on. And so I kept updating the complaint online saying, this is what’s happening, they have not responded. And then I think from there, and they kept posting negative reviews on them. And I think eventually it got to them and they said, Okay, look, we’ll buy your back. And I saw then at that point, when they said, like, I said, I need to be made hold. Now, whatever I paid, I want you to pay me back. Plus, I need you to pay back the foundational damages that will cause is one $8,000. Right, plus, plus the closing costs on the buyback. So I mean, after all of that, I think I’ve made pretty much the whole I got out of it. So that was good.

Jason Hartman 28:02
Yeah, right. Right. Yeah. Good. So it worked through people claim, but it might have worked through the regulatory agency, they did respond to you. And they did on a separate matter. Shut down their property management company. Yeah. It wasn’t because of your complaint, but it was because of someone else’s complaint. Right? Exactly. Good. Good, accurate, folks. And they knew about this company. They knew what the reputation of this company, they said, We were familiar with this company, we shut them down because they had unlicensed agents, leasing properties and making false promises. Exactly. Everything. I said, What happened to me. So yeah, that was like, like you said, it is as you know, even though I didn’t you know somebody else in front of me and file a complaint. I came out to them and it just put more pressure on them to change their ways. It’s a compounding thing. Folks, do not be a victim. Be the empowered investor. And do your duty, you know, with AI, you spent a lot of time on this, but I want to tell everybody, you do not need to spend a lot of time on it. Okay, you can do this stuff. You can file a complaint with any one of these agencies on my list again, you want that list, Jason hartman.com. If you already have an investment counselor just asked them for it, they’ll get it to you. And, you know, do something. hold these people accountable. I don’t want to say it’s just for you. This is your duty as a citizen. Okay. You know, it’s like making a citizen’s arrest when you see someone doing something bad, right? Or it’s like that Seinfeld episode about the What do they call it the Good Samaritan law? They went to jail on the last Seinfeld episode, because you you have to be a good Samaritan. You know, I think it’s our duty. You got to do it. Okay. You got to try and hold these people accountable and make them do what’s right. So anything else people should know before we wrap it up, and I

Muthiah 29:58
think that people should just not sit passively whether it’s you know, when they’re buying the property or whether they’re doing the property manager or loading on seller, they just got to be actively involved at all times. I don’t think it’s, you know, I sit back and just think everything’s gonna be fine. I think it’s important to be an active participant. Yeah,

Jason Hartman 30:17
yeah. I couldn’t agree with you more. Thank you so much for sharing your story. I’m glad you got justice. And, folks, if you’ve been taken advantage of, this is what we’re here for. Tell us so we can help you. So we can fight for you won’t fight for you. Is that commercial used to say with that lawyer? I’ll fight for you. See, it’s where I grew up. So I’ll fight for you. There Parker got me 2.1 million. You know, that guy supposedly has no legs. That’s I don’t think I’d saw my legs for 2.1 million but adjusted for inflation. Maybe it’s better now. Anyway, see that commercial when I was a kid, but folks, do not be a victim. Let us help you. We can provide resources we can put pressure on these people. If someone’s done, you’re wrong. This is what we’re here for. We’re here to help you. And that’s, you know, one of the things we provide ongoing support for life. So reach out to us. If you have an investment counselor, Jason Hartman, calm, if not Jason hartman.com. We’ll get in touch with you there. And if you do have an investment counselor, just reach out directly. Messiah. We’ve talked a lot about a lot of negative things today. Can we end with anything positive? How do you like real estate investing? Is it good?

Muthiah 31:29
Absolutely good. No, there are a lot of good property managers out there a lot of good sellers out there, just a few bad apples, you got to filter out that’s all you know. I mean, there’s a lot of good people out there. Otherwise, how would you know people continue to invest in this property. There are some good people out there. You just need to find them. That’s all. I mean, on your own podcast, people try to you know, make it look like they’re really good. But you said earlier that hey, you know what, when people are hungry, they’ll really do everything they can do to provide you the best quality service and everything else. But what happens is when they get nice and fat, you get a bite, you

Jason Hartman 32:03
know, it’s it’s the most dangerous moment comes with victory. So keep them on their toes and don’t let them get too fat. You know, this is actually one of the informal things that we do. Okay, is that when we start to notice a provider becoming too busy, or if they do something bad, like we had another bad apple recently and I don’t know if he’s, uh, you know, sometimes you gotta judge it like on a deal by deal basis, some things can go wrong, right? It’s not as important of what happens it’s more important, like how they handle it, and what their attitude is about it, you know? And so, when something happens, like you know, it sort of reveals a person, okay, there’s an old saying, people are like tea bags. You don’t know how strong they are until you put them in some hot water. So sometimes, you know, we we noticed that it Some of these people, you know, thing goes wrong. And it’s like, we will just sever the relationship, or we will just punish them and stop referring business for a while and put them in the penalty box. And, you know, this is what we are constantly evaluating. And this is why it really does take a human component, you know, you cannot do this with a website. Okay, this is a high touch, high service business. That’s just what’s required because we got to be engaged with these people, make sure that we’re holding them accountable. So anyway, you know, I really thank you for sharing your story. There are a lot of good people. This is the most historically proven asset class in the entire world. It is a great thing, buy more properties. But you know, when you have a problem now and then you got to do something about it. And the goal of this talk with Messiah was to empower you so much. I I thank you so much for sharing your story and coming on and helping other investors. That’s the Really great have you and you know so many people listening have met you at our live events and they’ll continue to do so. And we hope to see you at some future live events. Okay, so thanks for joining us.

Muthiah 34:10
It’s Thanks for your support. Jason, I appreciate yours and Carrie support and your whole network. It’s really been very beneficial to me and, and a whole lot of others. I encourage everyone to use your resources that you have, but thanks. Yes, well, thank you and happy investing everyone will talk to you on the next episode.

Jason Hartman 34:27
Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes.

Jason Hartman 34:32
Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional and we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.

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Jason uses this 1001st episode to thank his listeners and clients. He goes through listeners’ journeys in real estate. We hear struggles and also successes in their real estate investing. Clients also give us insight into their experience working with Jason’s network.

Announcer 0:02
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution for real estate investors.

Jason Hartman 0:58
It’s my pleasure to welcome Dr. Ron Paul to the show my pleasure to welcome bill whittle to the show. It’s my great pleasure to welcome Brian Tracy. It’s my pleasure to welcome Amity slays. to the show. It’s my pleasure to welcome Cliff ravenscraft to the show. My pleasure welcome Chris Mayer back to the show. My pleasure. Welcome, Craig AR Smith to the show. My pleasure. welcome Senator Byron Dorgan to the show. It’s my pleasure to welcome back a great guests. We had him on the show a while ago, and it’s Mr. Dan Millman. It is my great pleasure to have Dr. Denis waitley. On the show with us today. My pleasure to welcome a returning guest back to the show. It is Mr. Doug Casey’s My pleasure, welcome, Eve right to the show. It’s my pleasure to welcome Frank McKinney to the show my pleasure to welcome Dr. Gary Chapman to the show. It’s my pleasure to welcome Doug Conant to the show. It’s my pleasure to welcome a returning guest and that is Mr. George Gilder. My pleasure. Welcome, great panelists to the show. It’s my pleasure to welcome Jim Rogers my pleasure to welcome john gray to the show. It’s my pleasure to welcome john Lawrence Alan to the show my pleasure to welcome john Lee Dumas to the show. It’s my pleasure to welcome john Malden to the show my pleasure to welcome john McAfee to the show. My pleasure to welcome Jonathan bender to the show. My pleasure to welcome Dr. Kelly McGonigal to the show. My pleasure welcome Matthew hooked The show pleasure to welcome Melissa Francis to the show. My pleasure. Welcome Kevin Armstrong to the show. My pleasure to welcome Meredith Whitney to the show. My pleasure. Welcome, Nick Bilton to the show. It’s my pleasure to welcome pat buchanan to the show. My pleasure. Welcome Patrick Byrne to the show. My pleasure to introduce it No, take it. It’s my pleasure to welcome Noam Chomsky to the show my pleasure to welcome Peter seller to the show. My pleasure to welcome rich Carl guard to the show. My pleasure to welcome Robert Kiyosaki back to the show. My pleasure welcome Steven Kotler to the show. My pleasure to welcome t harv eker. To the show I pleasure to welcome congressman Todd Akin to the show. It’s my pleasure to welcome Vitaly Katz Nelson to the show you’re welcome Zack Bissonnette to the show. My pleasure. Welcome Ray Boris to the show. Welcome Pope Ronson to the show. My pleasure to welcome Robert Greene to the show. My pleasure to welcome a name that you are all very familiar with. And it is Mr. Steve for my pleasure to welcome Tom Kramer to the show. My pleasure to welcome back a returning guest and that is Danielle DiMartino. Booth. It’s my pleasure to welcome john burns back to the show. My pleasure. Welcome an old friend of mine and that is Mr. Jeff Meyers. My pleasure to welcome back a returning guest and that is my friend Ken McElroy. It’s my pleasure to welcome back a returning guests. That’s Dr. Lawrence Cutler pleasure to welcome a longtime returning guests back to the show. That is Mr. Harry dent

Jason Hartman 3:07
Welcome to the creating wealth Show Episode 1001. Yes, 1001 We made it. We had Episode 1000 with Colby Kelly on Monday. And by the way, listeners, thank you for all of the kind emails and voxer messages and web form entries to our website and all of the comments congratulating us on episode 1000. We really appreciate that and I absolutely love doing this and we will keep it coming. We will keep all the great content coming for you until we get to Episode 2003 thousand and onward and upward to infinity and beyond, as Buzz Lightyear would say. So today, we are going to give you a reader’s digest, not a but many Reader’s Digest client can studies? Yes, you’ve heard us do many client case studies over the years. Well, what we did is we just pulled out a few comments from several of them, not all of them by any means. And if we weren’t able to squeeze yours in time permitting here, please forgive us. We had you on the show before and we’ll get you back in the future, I’m sure. And we so much appreciate learning from our listeners, our investors, our clients who share their experiences with all of you on the show. That’s really nice of you to do so. And if you haven’t done so yet, here is your invitation please. We’d love to have you on the show. Have you share your experiences, your best practices, your tips, your tools, your apps, your software that you like to use as a real estate investor, and a better informed investor of any kind. And someone who is going to beat the financial system scam? Yes, Wall Street, the modern version of it. Organized Crime, we do much better than that here is direct investors in the most historically proven asset class ever income property. So hey, today, we’ll do our kind of mini and our big variety of client case studies here in just a moment. I am in Fort Lauderdale today and on my way tomorrow to Philadelphia, I know I’m going to be seeing several of you in Philadelphia at our creating wealth seminar. So I’m looking forward to that. And then I’m staying back east in New York for the rest of the week. And we’ll be seeing all of you venture Alliance members and many guests. This is one of our biggest venture Alliance mastermind meeting so far in New York City on Memorial Day weekend. So I look forward to seeing you there. And next week, I think we’ll air this on Monday. I’ve got a really good guest coming up. I recorded this episode last week, and it was fascinating. You’re going to love it. And then of course, Friday, we’ve got our flashback Friday as well. So We are onward and upward episodes 1002 1003. And from there, Boy, that’s a lot of episodes. And again, thank you so much for all of the congratulations boxers, and email messages and so forth. I really appreciate it. It’s very nice of you. Let’s just hear a bunch of clips from various client case studies that we’ve done over the last 13 years on the show. And here they are.

Client 6:26
Thanks for your support. Jason, I appreciate yours and carry support in your home network. And it’s really been very beneficial to me and, and a whole lot of others. I encourage everyone to use your resources that you have, but thanks, thank you.

Client 6:38
Those who have understood that’s the paradigm has changed. And that perhaps we need to do something that’s counterintuitive. Like being in debt, which obviously we have all been told is a horrible thing. You know, maybe it’s those few early people who understand that and witness that. So perhaps the people who are more sensitive to risk or more risk averse, or I don’t know what the perfection is. But the canary in the coal mine, if you want, and, and this is perhaps what you are in like you have been. I am surprised, Jason right now that’s basically what we are saying is not yet more mainstream. I’m not saying that this should be, or that this should already be what everybody’s thinking that but that so few people are thinking that or at least that’s so few people are vocal about it. So perhaps it’s just a well kept secrets and those who know we don’t want to talk about it. But I’m very surprised because this is so much against the mainstream of what you’re reading in the paper.

Client 7:45
I first started reading the rich dad books, and that led me to looking at different motivational speakers and I’ve stumbled on Jason’s podcasts about seven years ago and then from then I was hooked in after listen to him, and I really Gotta sold on his philosophy on how he looks at the market and real estate in general and I wanted to jump in seven years ago but I decided to open up a few businesses that they went pretty well but you know, I live in New York so a lot of expenses over there. So those way not as according to plan so now I’ve saved my money up again and I’m here

Client 8:20
working with the local market specialists went really well feel like they was able to get the type of property that I wanted and and happy with with the price and the rehab job and the tenants have gone well,

Client 8:35
trying to sell a house in 2010 and I just got a little frustrated with the potential buyers I was meeting and so I decided just to turn it into a rental. I currently own five properties the one that I did originally live in I own three in in Little Rock as well as one in Mississippi. I am in those markets because I was super impressed with the turnkey operators that I met and super impressed with the renovations that they did the property The management that they had and basically it was one stop shopping and everything was in place when I basically I showed up with my money. I kept investing in real estate because I realized it was just an awesome way to build my wealth. Not a lot of effort on my part basically, once again, show up with the money and see my money make money for me. I found Jason through my friend Elizabeth and been super impressed love his passion, love his enthusiasm, and not to mention seems extremely knowledgeable.

Client 9:27
I always have had an interest in investing in general and educating myself about different types of investing. And I’ve always kind of come back to real estate in general because of all the things that we we discuss on your podcasts all the time. I read, you know, a lot of real estate books and I think a lot of people probably talk about that Rich Dad Poor Dad book which opened up some some new thoughts in my head, especially the actually the 1031 exchange they mentioned in that book. And my medical partner is the one that actually turned me on to you. network because he he had invested with you. And that’s how I came specifically to see your podcasts. I spent a lot of time educating myself before diving in. The method that I hadn’t started my investing with you was was through this 1031 exchange,

Client 10:16
I started investing in real estate to supplement our retirement for the cash flow process. I currently own 10 properties, and an additional 10 with my husband. So 20 total, we found the creating wealth show Jason Hartman, my husband going on the internet and looking around for something like this.

Client 10:39
Well, I’ve always wanted to real estate I just didn’t want to deal with tenants and all the phone calls so I just never got into it. Then when the market really went down in 2008. That’s when I started listening to radio and I heard you on radio. And Tesla decided to do it because I your method works with the world how to deal with tenants and issues that come up even though I do deal with it. It’s not the same.

Client 11:03
Just about mid 2011. I was I was leaving command I just taken over a position in a great job at the Naval Academy, a two year position there and had a lot more free time than I did on my submarine as you can imagine, and I was searching for a way to shift active income and passive You know, I’ve read Robert Kiyosaki books over the years I really just, I mean, they just spoke to me, Rich Dad, Poor Dad, and most of the others, you know, he’s prophesy it all just made a lot of sense to me. So I was looking for, you know, following his model of shifting and to, you know, passive cash flow income, and I’m a mechanical engineer. And the thing that made most sense to me, you know, not buying the coin laundry machine, although i think that that facility may be a great idea too, but for me, it was about real estate and buildings. And so, I was looking into that you happen to have a great podcast and I started listening in the teens I think it was and I’ve certainly listened to all of them. And I just kept gotta become a junkie with that I you know, so forgot my first property in the end of 2011 and St. Louis, I bought a few more there. I’m up to eight. And my wife Susan is today. In fact, we’ll we’ll get her first three, and we’ll she’ll be at six by the end of this month. And hopefully if all goes well, we’ll have Susan topped out. And then we’ll go back and start focusing on Gary again.

Client 12:15
The reason I invest in real estate is because I was previously doing a 401k and put my money there. And doing other, you know, traditional retirement plans that just doesn’t work didn’t work for us for 1015 years that we were doing it and was looking for something different. So I was doing a lot of research and listened a lot of podcasts, and found real estate as being a much better avenue for creating wealth and creating cash flow. Our first investment property actually happened by accident because of not being able to sell a previously owned house that we had, and moving out of that area. So I mean, it turned out to be a really good thing for us. So after that, that made me really interested. The first intentional investment property that we purchased was in Florida. I found Crude oil show and Jason, by him being a guest on another podcast that I had been listening to. It was about creating passive income. And he was a guest on that show and as impressed with his his knowledge. So from there, I made my way to his podcast. Right now we have a total of 10 properties. We decided to go all in I mean, we’ve been doing 401k and other traditional retirement plans and investments that most people come from with with really terrible results for lots of years. So I was okay, so we actually liquidated, everything we had in our 401k is paid the penalty on all of that, and are doing much much better with real estate and very happy about it. But I think it just comes down to being comfortable with the education. So I felt like we there’s plenty of information out there about real estate, there’s lots of people with great track records. And so I think if you follow a path of success, that it’s a lot easier to replicate and duplicate. So

Client 13:52
I felt like I was following other people’s paths of success, so I felt comfortable.

Client 13:57
I started researching on real estate investing About three or four years ago, two years ago, I was lucky enough to stumble upon the podcast when I was doing a search. I listened to you for probably three or four months, but I was hooked after the first episode, just everything from the real estate information, politics, the philosophies, the economics in about three or four months, I decided, you know, I’m going to put my information in and see what Platinum comes back with. So I plugged my information in on the website. Oliver contacted me a couple of days later. And by the way, he has been a tremendous resource for me, just pointing me in the right direction, especially as somebody with no prior experience to real estate investing, but he definitely pointed me in the right direction, helped to educate me and help to show me different sources of information where I can better myself as a real estate investor. One thing that happens when you don’t have a real estate background and you instantly buy, you know, very expensive portfolio of real estate real estate don’t know anything about this field you have to learn. So I didn’t really have friends in the real estate field. So I was looking for resources. And podcasts was really something that I could do on my own schedule and get information about the real estate market without having to know any individuals or pay for classwork or anything like that. Just really convenient. Since we bought this portfolio, I started listening to your podcast in 2009. And we were sold on the idea we really liked the idea of turnkey single family, especially as a way to grow our portfolio as time went on. And so in 2012, we bought our first property in Memphis, for your group. Now Kelly was not as excited as I was at the time about it, so I had to convince her so I had to invest with my own money. So I actually use my IRA and purchased a single family home in my IRA, and it’s worked out great.

Client 15:57
I’ve been investment for about two years. I have six investment properties. One in Kansas City. Three Memphis and Trinidad, Iran. Oh, I started to invest because I listened to Jason’s podcasts. I said, it makes sense to me. So I make a very quick decision. I think maybe in one month I decided I attended the meeting masters event, back to sans six thing. And then I start to buy property systems. Before that, I’m trying to do some study on stocks. But that makes sense to me. So I hold a lot of cash I didn’t deploy to the stock market. So finally, I get to the teachers podcast, everything he said, makes sense to me and I have a lot of agreement with he his opinion. So I decided to kick came to the event in the masters and then I decided to make the investment. I think the first thing is real, you have a real good return. It’s not a scam. But if it’s true, be careful. What I recommend is join a network like Jason’s network and get some education and then start to buy the properties. Don’t wait too long.

Client 17:21
The markets we’re buying in a robust market there the population is stable and growing and the values are stable and growing. It’s not like we’re just buying residential anywhere. We’re buying in good markets.

Client 17:34
What I’ve learned is you like to mention be area agnostic is one of your commandments in that I love that. I like to look at this is also be when it comes to real estate investing, be age agnostic, who cares what age you are, you can start doing this in 19 like you did, you could start doing this in 20s you can start doing in your 50s I started my 50s

Client 17:56
so I got in interested in real estate investing You know, I’m actually my backgrounds in finance and I. So I have a pretty strong background, but more so in what’s been traditional investing. And it’s funny that we’ve been touting diversification for so long and it’s been like that mix of stocks and bonds. And I really felt like after all this time preaching to others that you know, this should work for them. It wasn’t even working for myself and thought that I really need to venture out and, you know, real estate investing just it, it definitely interested me. It wasn’t something that I struggle with, but it was, you know, something that I don’t know I got excited about right away, it made sense to me. And so it’s more so of creating that team and you know, knowing how to go about it. That was my biggest challenge and figuring out because with traditional investing, you can figure out an ETF or a mutual fund, you do online research. This took a lot more effort. I know that I can’t do it solo, I need to come up with a good team and a good approach. So I found Jason I was listening to not his podcast, but one that he spoke on. And it was just at that time it was just trying to learn. I’m like, well, you sounded pretty smart. So I’m going to listen to his podcasts. So, you know, I actually listened to his podcast well over a year. And then I would say, you know, I don’t know it was more so just thinking, I don’t know. It just seemed like it was interesting, not necessarily something that would be right for me. And then all of a sudden, everything clicked and it was right for me to take the steps and really figure out what Jason is all about and, and the more of the program and to see if it worked for me.

Client 19:44
I started listening to the podcast did that you know, for probably a couple years before I connected with your investment counselor, Sarah, she did a great job of kind of holding my hand through the process is probably one of the the more needy clients she worked with, but ended up buying my first property in 2011 in Atlanta, and then waited a couple a few more years until my next one, but 2014 purchased in Memphis. And so that’s where I am at this point.

Client 20:13
I’ve been following Jason’s company ever since 2007. I went through a seminar in his Newport Beach office by fashion Island. And I’ve been listening to his all his podcasts since then. Always wanted to buy some more. But a couple years ago, we went on the property tour in Cincinnati. And it was great. We love Missy and her team. And we actually sold our Texas property and did a 1031 exchange with to admit these properties in Hamilton, Ohio, and it was and they’ve been working out great for us ever since. And this just in 2017. Yeah, last year. We sold our home in Chino Hills that we lived in for 25 years raised Her family and all that. And we’re taking all our proceeds and going all in and rental properties. And the funny thing is we’re kind of following Jason’s lesson to the tee. And it’s working out great for us, we’re not going to buy again, in California, we’re renting actually, in Newport Beach, California. I got into real estate investing, because I’ve been a student of the stock market for years and years, and it just doesn’t seem to make sense to me anymore. Besides what Jason says it just, it just seems like the guys at the top, make sure that they win and you don’t win, which, you know, it’s just I feel the same way even before Jason said that. And the fundamentals don’t seem to make sense to me. But there are fundamentals in real estate and income property investing that aren’t going to be able to be changed by high frequency investors or anything like that. It’s the fundamentals are there and they’re gonna stay there. I’m fine with income properties, you know, the slow and steady approach

Client 21:59
basically, found by creating wealth podcast by searching iTunes. And immediately I resonated with your message, you know, the great return on investment, significantly significant reduction in taxes, steady income that could eventually replace my corporate job income. Also, what I found very powerful is along with that message, I was impressed by the high caliber of your guests. And I remember listening to economist investors, lawyers, authors, basically people who could present their expertise and allow me to judge their response against your message. So as an example, when you talk about inflation, your your ideas about inflation going up over the next few years, I could vet that message against your guests and, and be sure that what you were saying made sense. So that was very powerful to me.

Client 22:52
If you’re that kind of person, and you’ve got the capital and you’re a great negotiator, you’ve got great people skills. You You could probably be a success. flipper, but it’s like a job. Right? If you’re not flipping, you’re not making money. And that’s why I prefer income property because you just make money every month.

Client 23:09
Well, I like real estate just because I like the benefit of being able to have a mortgage pay off real estate over time so that when I retire, I have something I like the fact that it’s boring. I want to be able to be entertained and travel and do a lot of things in my retirement. And that boring investment of real estate allows me to do that.

Client 23:34
Well, it was never our goal to be full time owners of shopping centers. It’s just an opportunity that was too good to say no to that we decided to take on. Really what we want to do is just have a nice life and not work too hard. And these particular shopping centers took a lot of effort to run. Part of the reason for that is they were in parts of town where it’s hard to hire professionals to come and do the management For us, and so we had to do our own property management. And so part of the reason that we’re selling the shopping centers and exchanging them for single family homes, is that we’ll be able to get property management with these portfolios and homes, so that we don’t have to do so much work ourselves.

Client 24:17
I think when you combine the concepts of this inventory shortage, the fact that there’s still a runway and the fact that you can’t use a standard tool to really figure out what the heck is the price of the value of houses and when it’s really good that you’ve got those investment counselors like can kind of help you navigate the waters because as much as we’d like to just automate everything it really does take knowledge experience and an overlapping of you know, some some helping hands if you will, to make sure that you’re investing in the right way

Client 24:48
from the initial market. Recommend buy from from yourself from the truth and if the prophecy right through to the leasing process with the property manager. Everyone has been just totally professional. In the communication is excellent, especially with being such a long distance away, communication has been fantastic. And even after leasing a property Platinum properties have kept in contact to check everything’s okay.

Client 25:12
The people that I’ve been introduced to from Sarah, the people in the markets, to the financing people, property managers and your local real estate experts, they’ve been just more than helpful. I mean, seriously, and that’s why I’m back for more, I’ll be buying more properties this month. And as you point out, it’s a little bit of work upfront, really the works up front and later on as with my other properties, it’s really not too bad. And the returns are just outstanding. The downside? It’s not that significant. Yeah. So I think it’s a just a wonderful program and doing a great service for people. So I would just like to add that

Client 25:47
my goal is maybe get into real estate also to help my friends do what I’ve been able to do before asking me about it. So and spend more time with my family and hopefully grandkids by gotten married three years now. So maybe in the near future, we’ll have record the ticker.

Client 26:03
2012 is when we did our first purchase. I think 2011 is when we started. You know, attending meetings, probably 2010 is when I started listening to podcasts. My husband was a little ahead of me. So he’s probably, you know, late 2009, early 2010. And you know, we’ve just obsessively listened to you. I think you’re on episode 300. At that

Client 26:26
time, though, I do very much credit you with getting me involved in real estate investing. I had tried to do a flip originally that went sideways. And I ended up having a condo that I had rented out after that after a bad flip. And I realized that being a landlord wasn’t all that tough. And eventually, I found you on the web. And that really got me into real estate investing.

Jason Hartman 26:50
So thank you for that.

Announcer 27:00
Thank you so much for listening. Please be sure to subscribe so that you don’t miss any episodes. Be sure to check out the show’s specific website and our general website heart and Mediacom for appropriate disclaimers and Terms of Service. Remember that guest opinions are their own. And if you require specific legal or tax advice, or advice and any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to iTunes or Stitcher Radio or whatever platform you’re using and write a review for the show we would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.

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