Today’s guest is Brittney, a long-time team member of the Jason Hartman network. Brittney shares her journey, from working for Jason 13 years ago to being a client. She talks about the first property she bought and the fantastic news that came before her first tenant even set foot in the house. Jason also points out the benefit of renegotiating your real estate deal as you go through time.
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 1000s 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 1688. And it is a pleasure to have someone back on the show you’ve heard her on before. But this time, she is coming on for a different reason. Actually, she’s coming on to share her client case study. And that is our longtime team member, Brittany Roberts. Britney. Welcome.
Thank you. I know this is my first visual podcast I’ve been on before audio. But this is my first
Jason Hartman 1:19
audio only we actually are on zoom so people could see this on the YouTube channel. But certainly on the creating wealth podcast, it’s there. Britney, you’re coming to us from Chicago. And you started working with us back 13 years ago, that was in our office back in Orange County, California. Did you ever think this job would last this long?
I think so. I’m thankful that it has I’ve learned so much. But at the time, I had just graduated from college. I don’t think I was thinking past maybe a year at the time, you know, you know, when you’re 22 years old, and I was happy to land a job during the time and, you know, because that started a recession time. Right? jobs were kind of hard to come by and learned a lot. I mean, it’s I think that’s kind of when at least one of the roller coasters started with real estate and oh, it sure did. That
Jason Hartman 2:12
was right on the precipice of the Great Recession. So I got a front row seat to the you. You saw all of that in the real estate business, for sure. You went to Vanguard University, majored in public relations, and we hired you to do some public relations work for us some PR, and we wanted to get out there in the media and get media attention. But it turns out, you didn’t really end up doing much of that you ended up doing all sorts of other things, right?
Yeah, I’ve worn lots of hats. Over the years, I’ve done marketing, I’ve done design I’ve done what haven’t I done? I feel like it’s a time we had, you know, many people, it was a booming office, but lots of people working. And we kind of downsize over the years and then you know, grew again. So I don’t think there’s much I haven’t been technically an investment counselor. I’ve sourced some properties. And but that’s probably one of the only roles that I haven’t done. That’s
Jason Hartman 3:07
true. Fair enough. Absolutely. But So today, we want to sort of share this with you not to talk about your history with the company. But let’s touch on that a little bit. Because I think it’ll be interesting because clients always want to know the kind of the origin story, right? But we’re talking about your client case study, because you actually became a client last year, closed on a property and had some really surprisingly good news that you just shared yesterday on our messaging group, and I wanted to share that today. So where was this property?
This property is in Coleman, Alabama, the little in between, like Decatur, there’s Tuscaloosa, Montgomery, you know, it’s kind of all in the middle of those bigger cities. But it’s a pretty big city itself. It sounds pretty small. I hadn’t heard of it before, but it’s a decent size. And it’s growing. A lot of tourists go there for I guess the lakes that kind of goes back and forth between the second and third cleanest lakes in the US. So a lot of people go there for the lakes and the outdoor attractions. Only, like a mile from one of the lakes.
Jason Hartman 4:16
So how much was the property?
Jason Hartman 4:19
And when did you buy it? Because it took a while to close? Right? Yeah,
I started looking at properties serious. I mean, I’ve been looking for years, but a little over a year ago, my husband and I are like Alright, it’s time. Let’s buy and then COVID so we drove we looked around kind of we have some markets near us here. Close like in Indiana. So we looked at some there. We probably fell out of some serious you know, we were trying to put contracts on at least to one got snatched up really quickly as we were trying to turn in the contract. Another one we were under contract for a while the inspection didn’t go great. So we ended up back Out of that one, and then we went under contract in January for the one in Coleman.
Jason Hartman 5:05
Okay, so it took a few months to get it closed, you originally thought in the performance said that it would rent for I think you said yesterday 915. Is that correct?
Right. So it took a while to close only because it was a new build. Yeah. 950 is What was projected, which was pretty conservative, obviously. But the property manager there was pretty bullish, and was like, You know what, I think this can go for more. So we listed it at 1100. And within two weeks, we had we had several offers or several applications and quality tenants within the first couple of weeks. And it was, you know, they moved in two weeks later. Sure. So
Jason Hartman 5:46
your rent was more than 15%? higher than expected. Right? Yes. Awesome. Sound Effects? Yeah, that’s really great. Brittany. And, you know, I think when you said that in our message group yesterday, I really thought that, you know, wanted to share the point. And one of the properties I sold recently, one of our clients bought it, he’s renting it for way more than I rented it. And he sent me the thing and, you know, showing it for rent, and I said, Hey, I’m now I’m a little jealous. Why did I sell that? It is really amazing how much pressure there is in the marketplace. To see rents go up. Obviously, prices have been increasing a lot. But the rent thing is a little more opaque. And let’s talk about why because I think it’s really important that listeners and investors understand the opacity issue in the real market. Number one, rents lag, they go up slowly. And they do that because typically, they’re on one year lease renewals, and they can’t raise the rent, except in those one year intervals. But owners, when they have that property, the tendency is to want to keep the tenant and not raise the rent too much. So they will make the mistake of being really conservative on those rent increases, not really understanding the market, not really understanding how short and scarce housing inventory is. And they’ll give them in a booming market, a measly $25, or $50 rent increase. Now, granted, we don’t like tenant turnover normally. But sometimes the tenant turnover really is a good thing. Because if you raise that rent 200 or $250, you might find that the market will totally accept that rent, just lickety split. And that tenant that is currently living there may not be able to afford that house any longer. The market may have passed them by sadly, but that’s just the way it works. Okay. And so you may have to return in it. But that may be the best thing that ever happened to you. So I just want to say to people listening, don’t be too scared of returning your property. There are investment groups, and apartment syndicators, who literally have that is their business model. They buy a shabby apartment complex. And, frankly, I’ve done this twice myself with my own investments. They buy a shabby apartment complex, they fix it up, then they re tenant the units one by one, when leases end, they fix it up. And you’ll find that that newly renovated unit will go for $200 more than the old unit. They call it the classic unit versus the new upgraded in Orange
County where office was before that was happening quite a bit when I was there.
Jason Hartman 8:46
Yeah, yeah, it happens all over the country all over the world, I’m sure but in the US, you know, it’s much
to say to that you get a higher quality tenant, you know, if you’re going up 200 $250,000 a month, your tenant pool can generally be from
Jason Hartman 9:01
when these apartments, they’ll wait till the leases expire one by one. And they’ll just you know, do some minor renovation to the unit. And then that unit will be up way above the price of the units next door to it quite literally. And it’s the same exterior, it’s just the interior is different. And I’m not even saying you have to fix up your properties. I’m just saying these rents are a lot higher than you think folks, and the landlords have a lot more leverage than you think. Because housing is in such scarcity mode right now. So raise your rents. If you don’t raise your rents outright charge pet rent charge for extras. If your property has some kind of storage unit on it. You can charge extra for some things now and then, and we’ve talked about that on past episodes. But Brittany got $150 more than expected on the first rental and probably you could have been gotten a little bit more right based on all the offers, and maybe
I didn’t. So in this area, there’s a small row of new homes. So I don’t know if I wanted to go too much higher than the other ones that are renting forward just to keep maybe the tenant happy. But yeah, maybe even more, we’re thinking 1150 to start, but we settled on 1100. Yep, good.
Jason Hartman 10:19
So you got a lot more than the 950 you were expecting. So that’s great. And, folks, when you’re looking at some of these properties to buy, you’ve got to realize that some of these rents are just understated, or they’re undervalued, you know, like my own property that I sold to one of our own clients, you know, I had it rented for like, $200, less than he’s renting it for. So shame on me, not a very good landlord all the time. Sometimes, I could do better, I could pay more attention to my own portfolio, you know, it’s the shoemaker with no shoes, right? That old story, too busy working for other clients. And sometimes I got to pay more attention to my own portfolio. So that’s true. But Brittany, when you came to work for us, let’s go way back 13 years now, when you came to work, originally, you weren’t looking to get into real estate, that wasn’t one of your particular interest. You had a public relations major, you wanted to do marketing and PR work, which you’ve done for us for many years. When you got around it? What were some of your initial thoughts, you know, you went to some of our conferences, talked to a lot of clients, and the investment counselors and so forth. What were you thinking back then?
I was a young pup at the time.
Jason Hartman 11:30
You’re still young, but well, you know, I
was just so so fresh, so wrong, as far as you know, just jumping into the workplace and to finance and investing. And, you know, I was eating it up. I loved every minute of it. I love going to the conferences, learning as much as I could talking to clients, I’d say the client testimonials and the case studies. I mean, those are always a favorite. Right? And they were for me at the time, they kind of still are now, just hearing real life stories. But here I am, 13 years later, finally doing it. You know, I probably looking back, you know, like you say, you know, I wish I would have done it two years ago wish I would have done three years ago,
Jason Hartman 12:07
or 10 years ago.
It’s true. And I remember at the time, there’s $5,000 down properties. That was the big thing at the time. And obviously that’s not now but I wish I would have snagged one of those up even with my little money that I had at the time.
Jason Hartman 12:22
Yeah, no question. We all have our shoulda, coulda woulda is, you know, we all we all have that. And it’s like the old saying, What’s the best time to plant a tree 20 years ago, the second best time today, you know, you got to just put your foot in the water and start somewhere, right? And everybody can only start where they’re starting. But once you get into this, I promise you, it’s addictive. And it’s addictive in a very positive way.
Jason dadri question. I think inflation just like, you’re just the fact that you hammer in the idea of inflation. That’s probably what hit me the most. And what I took out initially is just the fact that you know, your debt over time, inflation just destroys it. And I think that was what really at least kind of hooked me in. And obviously I’ve learned a lot deeper and wider, you know, in my knowledge since but that’s probably one thing that I first remember the light bulb going on?
Jason Hartman 13:16
Sure. Yeah. By the way, folks, if you see our graphics out there, Brittany creates a lot of those graphics, she’s got a very good eye for design. And she created a great new one for us inflation induced debt destruction graphics. So thank you for that. Britt because it looks awesome. You know, let’s also talk about inflation in the sense that not only does the inflation destroy your debt, but let’s look at the real price of properties today. And I think this is interesting. Now, we talked about the coulda, shoulda, woulda thing. But when you look at it in some other ways, it’s not as bad as you think. Right. And I’ve been talking a lot lately on the podcast and the YouTube channel about how nobody has been forcing any of us to store our wealth, whether it be big or small, in dollars over the past 10 years or 20 years, we could have stored that in gold. We could have started in oil, we could have started, you know, for all for the last 12 years or so in cryptocurrencies, we could have started in silver in corn futures in soybeans and coffee, you know, whatever any commodity on earth could have been our storehouse of our wealth. Most people think of everything in dollars, even around the world, not just in the US because the dollar is the reserve currency of the world. But we also always need to look at not just the price of the property and the prices have gone up enormously. And that can be very discouraging for some who think Gosh, am I buying at the peak? am I paying too much? I wish I would have done it 10 years ago? Yes, of course I get it. I understand that. Okay. But remember, it’s also about the payment on the property. And that’s the way most people really buy a house, one of our clients that you know, all too well, because he used to come into the office, Brittany, that’s drew Baker. He’s been on the podcast many times. He just bought a high end property for himself and his family in cornado, in Southern California, San Diego, Erie, Coronado Island. And he keeps sending me messages, you know, since he bought that property last week, saying, I can’t believe how cheap the payment is, it’s incredible. And he said this today, by the way, let me play this message for you. This is really, really telling, because I was looking at the the like amortization schedule of a $1.5 million loan in 30 years, you only pay back like half of it in interest. So like, if you borrow $1.5 million, and pay it back in 30 years, you only pay like seven or $50,000 in interest. I mean, so in 30 years, you don’t think you can make 50% of your money? I mean, hello, how much is how much is inflation going to be? 30 years? It’s probably gonna be way more than 50%. So yeah, free money. So Isn’t that incredible? So three decades, and you borrow 1,000,005, and you pay back? $2,250,000? That is absolutely incredible, right? That you only have to pay $750,000 to use that money for three decades. Until 2051. That’s just incredible. It really,
interest rate was so low.
Jason Hartman 16:25
Yeah, yeah, it’s absolutely amazing. So Brittany created a logo for my new economic index, called the H ci or the Hartman comparison index. And what it does is it compares a lot of things. Okay. So 21 years ago, in the year 2000. If you wanted to pay your mortgage, not in dollars, but in shares of the s&p 500 index, the most commonly used gauge for how’s the economy doing right, they just look at the s&p, maybe it’s GDP, but but the s&p is a really good measure. So it would cost you 11.12 shares of the s&p to pay your monthly mortgage payment based on the interest rate at the time, and the price of the medium priced house at the time. But today, just 21 years later, it only cost you 3.03 shares of the s&p to pay the monthly payment. So is it cheap, or is it expensive? It’s cheaper, okay. Now, let’s look at this in the mortgage payment based on the number of hours worked at the average wage. So that same mortgage payment, in 2021 years ago, it would take you 69 hours of work to pay your mortgage. But today, it only takes you 48 hours of work. So it’s cheaper today. Now, mortgage payment and hours worked at minimum wage. Well, most minimum wage, people aren’t buying a house. But in case they were right. It’s a good comparison. In 2000, it took 192 hours at minimum wage to pay the mortgage. Today, it only takes 165 hours. So when you look at it like that it’s cheaper. But does that mean you shouldn’t have bought a house back then? No, you would have made a lot of money. Because when the price goes up on the house, you get that in real dollars. This is just the monthly payment and the carrying cost. And one of the beautiful things about income property that I always say, and what I absolutely love about it, well, many things I absolutely love about it. But one of them is that you are never stuck with a deal you agree to when you buy the property, you always get to renegotiate the deal along the way. So for example, 21 years ago, interest rates were higher than they are today. 10 years ago, they were higher than today. So as you go through time, you just keep renegotiating the deal. And what do I mean by that you simply refinance the property, use my refi till you die program that I’ve outlined on other shows, and you extract cash from your property, hopefully buy more properties without cash, and you lower your payments. As rents are increasing. It’s just an absolutely beautiful asset class. Nothing else behaves like income property.
Yeah. And that’s one thing I’ve learned over the years to just how creative you can be you know, not depending on how your life is your you know, risk tolerance, you can kind of structure it a lot of different ways. Yeah,
Jason Hartman 19:38
yeah. It’s really just a super flexible, multi dimensional asset class. So that’s what people love about it. Britt, anything you want to say to people listening who haven’t started investing, and the reason I really wanted to have you come on the show is because this took you a while. Now. It’s not like you weren’t busy with other things. You know, you got married, you had a beautiful wedding. I was there. You moved around. A bunch, you had three kids. Okay. So you know, you’ve been busy with a lot of other stuff. But you know, just what do you want to say to people who are thinking about it or are just barely dipping their toe in the water. And
I would say, even though right now you may not be able to pull the trigger, maybe you can, you know, I’d say if you can pull the trigger, do it. Because, you know, again, even looking at prices, and just things from last year, you know, I drool, you know, look at looking at that, but just set some goals and really try to work towards that and achieve it. And it’s pretty neat. Once you get into it, you know, I’m still pretty fresh. I just had my first tenant, but I’m already you know, looking for others, like you said, it’s addicting, and just mapping out your 10 year plan and seeing what that could be. It’s really exciting.
Jason Hartman 20:53
Well, Brittany, thanks so much for joining us. Really appreciate it. And, folks, if you have any questions reach out to our investment counselors. You’ve heard Brittany on the show before, but she was never speaking as a client like she is today. And so it’s just great to to share that story. And congratulations on getting about I don’t know about what’s a workout to maybe 16 17% higher rent than you expected. That is just phenomenal. So congratulations on that and happy investing to you Brittany and to everybody listening, and we will be back with another episode in two days.
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