Today’s guest is Greg Saylor, a corporate software engineer who listened to the Creating Wealth Podcast. He now has six income properties earning him $4000 in monthly income. Greg shares what got him started in real estate investing and the details of his first income property deal, including the flaws. They also talk about property taxes, debt to income ratio, planning for additional expenses, and having a reserve fund.
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.
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 show. This is your host Jason Hartman episode number 665 665. And today we’ve got a great show for you. We’re going to have a client case study. Yes, it’s our client, Greg Saylor, who purchased six properties in six months, six in six. And I think you’ll really like his story, six properties in rapid succession. And he’s doing great with him and you’re going to hear firsthand his story of how he looked at alternatives and came to real estate, because it is the most historically proven wealth creator in the entire world period. There’s nothing this good. I mean, everybody has access to it. It’s just it’s just such a great thing. So a couple things before that. I want to make sure listeners that you have made our Relationship official Yeah, are we go and study, I hope so, what you need to do is make sure you press that subscribe button in iTunes or whatever podcast platform you’re using. To make sure you do not miss any episodes. We’re coming at you three times a week, every Monday, Wednesday and Friday. And occasionally, we might slip a little announcement in there on a an alternate days, so you don’t want to miss any of that stuff. We got some great stuff coming up for you been doing a lot of good interviews. I did one today that I think you’ll like and just a lot of a lot of good things coming up. I gotta get the schedule all outlined for our upcoming episodes as we move toward episode number 700. Whoo. That’s a big deal. 700 Wow, we’re getting up there. And remember, overall, I’ve got about 3000 podcast episodes out there with all of my other shows. You know, I rarely mentioned these others. shows, so of course the longevity and biohacking show the jetsetter travel show. on that show we talk about expat living. We talk about all kinds of interesting stuff, offshore investing, which ain’t so great tell you the truth. I’ve certainly looked at that up, down sideways. And we’ve just never found anything internationally. That makes as much sense here as it does in the good old US of A Gosh, holistic survival show. If you’re feeling depressed, do not listen to that show, because it might push over the edge. It’s definitely not the optimistic stuff. But you know, there’s two sides of the brain. We’re all we all have a positive and negative side, right? I was gonna say we’re all bipolar. No, unfortunately, we’re not all that. But we all we all have ups and downs. We all think of the positive and the negative. And it’s interesting. I’ve been reading this book, and it talks about what I’ve talked about on the show before many times, which is that constant Have What will you do more for Will you do more and this is such an important part of how we think as humans and how we invest as real estate investors. Because what will you do more for? Will you do more to go and earn 2535 4045 even percent on your on your money by investing it in income property the most historically proven asset class or will you do more to save some money? Will you do more to avoid loss or to gain something? What is the stronger motivator in our psychology Well, since we have been conditioned by aeons of scarcity, our mentality is always to preserve, to conserve, that is the that is the way we operate in fact, I was reading another book and I can’t remember they they use a funny phrase. Oh yeah, here it is. Cognitive misers. Yes, we are cognitive misers. So even with our own brainpower, we can serve. Because, interestingly, the brain compared to the rest of our body doesn’t weigh very much. But you know, it takes like 20 or 30% of the energy that your body uses. That’s pretty amazing. If you think about it, our brain is very greedy when it comes to energy. And if you think about it, we’re kind of lazy as people. I mean, that’s just the general propensity of of all of us. I think, I mean, I get I’m certainly get this way. I hope you share that with me and you do.
Jason Hartman 5:53
I hope it’s not just me, I guess I’ll say, but we don’t want to make a big effort to think Earl Nightingale used to say that will Go around when we have a problem last are neighbors what to do our families what to do our parents or children or uncles or cousins? You know we’ll look at our horoscope we’ll do everything. But the last thing we’ll do is sit down and he said, with a pen and paper and actually think the problem through, right? actually think the problem through and that’s because of this propensity to conserve, to conserve our energy to conserve even our thought energy. We are cognitive misers. That’s what the that’s what the experts say. And I was gonna say that’s what the psychologists say, but I don’t know if it’s a psychologist or a biologist or a physiology. I don’t know. I don’t know exactly what experts said that But some experts said it Trust me. Oh, anyway, so so we will do more to avoid loss than to gain insights. Certainly I noticed this in my own behavior all the time. For example, when I shop for clothing, one of my favorite places is Nordstrom Rack. I think Nordstrom Rack is a pretty great deal. And it’s funny. It’s just funny. Yeah, this is, I mean, time is money. And we will search around online and look for the best deal on something. But when it comes to desire for gain, because the gain is speculative, and the conservation is not it, that is also speculative, by the way, but it’s not as speculative is that as the possibility of gain. So we will take the old saying, a bird in the hand, is worth two in the bush, right? A bird in the hand is worth two in the bush. And so because we’ve had scarcity throughout our history as humans, we still think that is the world in which we Live, and it’s not we live in this world of massive abundance, even in bad times, even living under Obama anism. Yes, oh bomb unionism, slight communism, but it’s got a different flavor. What will they call it? If Bernie Sanders becomes president? Well, he’s probably not going to we’re either going to have a very weird, loud, boisterous guy, you know who I’m talking about Mr. T there, or we’re going to have the criminal known as Hillary Clinton. Yes. That will probably be our two choices. It’s always it’s always that we don’t really ever get a choice, do we? We always have to just vote for the Yep, you guessed it the lesser of two evils, right. So given that one, you know what my decision is going to be listeners. But again, certainly not my favorite. My favorite was discovered FIDE A long time ago, and that was Mr. Rand Paul, of course, Ben Carson, us and kind of an interesting guy. We had him on the show before. We’ve had quite a few presidential candidates Austin Peterson, the Libertarian candidate, john McAfee, of course, another Libertarian Party candidate for President. I don’t know who’s leading. I mean, Rand Paul endorsed john McAfee, on the Libertarian Party side. I don’t know we’ll see who’s living. One of our clients said a great thing to me today. She’s so funny. I just cracked up when I heard her say this. We were boxing back and forth. Yes, that’s you, Michelle. And she says, it gets lonely being libertarian in the San Francisco Bay Area. That was the funniest stay.
Oh, God, she really made me laugh on that one. But yes, it does get lonely being a libertarian sometimes, but I tell you, it is rising that ideology, I’d say probably has a stronger foothold. than it has at any time in my lifetime, at least I would say that Ron Paul, Rand Paul, Ron Paul, the father, of course, he was surprisingly popular with Generation Y with the millennial generation. Now, hey, you know, folks, we’ve talked a lot about Gen Y, by the way, and the fact that they’re going to make great renters they’re going to be renting for a long time. This is the reason why we’re seeing such strong rental demand, virtually everywhere in the country in virtually every market. We did a call today with our local market specialists, not all of them, but most of them. We had about 25 people on the line. And we were talking with our different teams in Indianapolis and Memphis just all over the place, you know, all our different markets, right? I don’t need to explain Little Rock, Arkansas, etc, etc. So anyway, we had them all on conference call today. And the first thing I did is I went around the virtual room. And I asked them all what was going on. And without Well, I actually cannot say in all fairness without exception, because there was one exception.
Virtually all of them 2424 out of 25 said, inventory shortage, really tough to get good inventory battling to get inventory, way more buyers than sellers, etc, etc. One of them said they weren’t having too much of a challenge with inventory. So kind of interesting there as we went around. Jason, what was your point? You’ve gone all over the board. Presidential candidates, there’s no choice. Lonely libertarians in Northern California. That’s kind of like being Sleepless in Seattle. Inventory shortages. I don’t know what was my point? Maybe someone can write me and remind me and I’ll talk about it on the next episode after flashback Friday, of course. So, a couple things, make sure you subscribe to the podcast. We so much appreciate your reviews of the podcast on iTunes or Stitcher, radio, whatever your podcast platform is, go and review the show, make sure you’re subscribed so you don’t miss any important episodes. And we very much appreciate your ratings, your reviews, and telling your friends about the show to spread the word so they can join us as we get toward episode number 700. We got a big sale going on. Before we get to our guests here. I want to tell you about this because we just launched it and you probably haven’t. Now, here’s the thing at Hartman education comm our new little website Hartman education.com just my last name, education comm Hartman education comm we used to just have one point There. Now we have three Yes, we have the meet the masters from 2015, the meet the masters from 2016. And the first ever j h you live or Jason Hartman university course, from San Diego. Now I know a lot of you listening have attended all of these events, right? So if you’d like to get a copy of the video or the audio download, look people I know that you don’t always need to see this stuff. Sometimes you want to download the audio have it with you so it’s portable. And then if there’s something in there that strikes your interest, or the speaker mentions a visual aid, and you want to see that, then you can just go back to a very well organized portal with these three courses. And you can log in and you can watch the video at your convenience. So super handy course. I’m really happy. This is the first time we’ve had these all online. And we are kicking it off with a big huge sale. Yes, a big sale. So normally, each of the meet the Masters courses are 497 apiece. And the Jq live is 297. But bundled together, we normally sell this for 1197, which is basically 100 bucks off, it would normally be what 1291 all together, but for a limited time. What will be the limitation here? See, when you’re in the marketing world, you got to create this false sense of scarcity. And folks, let me tell you, this is complete bullshit. Oh, Doc, you’re not supposed to swear on this show. It’s complete BS. You know, I’m a little punchy here or not. It’s it’s the end of the day. had a big day here. So Yes, you’re not supposed to swear on the show. We are a clean family friendly show here. So Well, most of the time, anyway. And normally These are 1291 if you buy them separate 1197 if you buy them together, but for a limited time, because we got to have some urgency, we got to create urgency, right? Otherwise, you’re never going to get off the dime and make a decision. So what is the limited time gonna be for a limited time? What should be the time limit for this sale?
Oh, yes, shut that thing. Okay. That just goes on way too long, doesn’t it? How about if we say for the next week? Yes, one week sale on this? Well, maybe we’re better make it a little longer. Because what if you’re not What if you’re not caught up on your episodes and you haven’t listened to them all? Let’s make it. Let’s make it two weeks. Let’s make it a two week sale. Okay? For two weeks, you can get all three of these for only 797. And that my friends, is a great deal 797 all three courses, audio and video beautifully well organized. We got a great little online university sort of website for that. So check it out. Take advantage of that. Hartman education comm also we’ve got our Ohio property tour and creating wealth seminar coming up. That’s going to be fantastic Cincinnati area, Jason hartman.com. Click on events, check out the details for that and join us a bunch of you have already so we’re looking forward to seeing you there. And that is coming up in early June. So check that out. Without further ado, let’s get to our guest a client case studies Six properties in six short months with Greg Saylor. It’s my pleasure to welcome a another case study a case study from one of our wonderful clients. We love hearing from you. And we would appreciate having any of you on the show. Let us know if you’re interested in being on and sharing your story. This is where the rubber meets the road. These real stories from clients really inspire our listeners. It’s my pleasure to welcome Greg Saylor. Now, let me tell you a little bit about Greg. He is a software engineer. He’s in the cybersecurity field for big corporate enterprise applications. And he started investing with us just about five months ago. So he’s pretty new at this and we love to hear from investors at all levels, even investors who haven’t started their journey yet. Once in a while that’s really interesting, or maybe they just started or they’re just a few months in like Greg or there’s several years in and they’re veteran And investors and they can tell us the good, the bad and the ugly about investing.
So let’s just dive into it and welcome Greg Saylor. Greg, how are you?
Greg Saylor 18:09
I’m doing really well. Jason, thank you so much for inviting me on the podcast.
Jason Hartman 18:14
It’s good to have you and you are closing on your sixth property. That’s you’ll have a six pack next week, right?
Greg Saylor 18:21
Greg Saylor 18:23
Yeah, I’m really happy about that. I couldn’t, couldn’t be happier with how things are going good,
Jason Hartman 18:28
good stuff. Well, it’s new. So there will be bumps in the road and problems. I’m just gonna warn you. It’s not all roses, but I’m glad to hear. It’s all going well, it’s mostly roses most of the time. So first of all, what got you interested in real estate investing? I mean, I’m sure over the course of your life, you’ve you’ve done and tried a bunch of things, maybe stocks, maybe maybe you work for a publicly traded company and you have stock in that company? I don’t know. But what’s the interest with real estate?
Greg Saylor 18:57
Well, actually, I do work for a publicly traded company. Right now, but I’ve never really done much investing. I mean, the 401 k thing. I did try to trade stocks a few times, and quickly discovered that when it comes to trying to time things, I’m just not good at it. And I can’t. Some people might have that skill. It’s not one that I possess. And the other thing, I guess, I’ve always had an interest in real estate. It seems like I think everybody says that, but you know, it’s always I’ve always just been fascinated by it as kind of a necessary human need, you know, and we’ve moved around a lot when I was a kid. So I never really had, I guess, a kind of a stable place to live. I, my mom, you know, tried to buy a house at one point and succeeded at that, but then we lost it. And so it’s just kind of always been sitting back there that this made sense, but I didn’t know how to make it work. You know, that’s kind of where I came from? And I said success in anything else, you know?
Jason Hartman 20:03
Well, well, let me first tell you, Greg, I, you mentioned that when you were referring to the stock market, that you weren’t good at timing, and just to make you feel better, nobody’s good at timing, no matter what they tell you. And here’s how you know, all of these fund managers, all of these different mutual funds, and I don’t just mean fund managers out of mutual funds. All of these different advisors, there have been numerous surveys on them, that by and large, none of them beat the index funds. So they’re, they charge big management fees. And you can pretty much get the same result. It’s been this has been this has been documented over and over for decades, okay, and you’ve probably heard this stuff, you can get the same result by just buying that index just by the s&p 500. If you’re into stocks in the first place, and I think stocks suck, you know that it’s the modern version of organized crime. But don’t feel bad if you say you can’t time the market because nobody can. The people that do it full time that made it have made a career out of it can’t time the market either.
Greg Saylor 21:09
Yeah. And then you have all these shenanigans that are going on behind the scenes in the stock market to probably have a whole many our discussion around some experiences I’ve had with that. But you’re exactly right. I finally just put my 401k into the total market index fund. And I think it’s good to have that. But I started investing in real estate, you know, last November, in the stock market, I managed to lose about $20,000 between November and December. So,
Jason Hartman 21:41
yeah, you could with $20,000. As you now know, having purchased six properties, you could buy another property. Exactly right.
Greg Saylor 21:48
And, you know, I, yeah, that’s it. I mean, I like cash flow. I think cash flow is really, really compelling. Because I just like everybody else, I can’t find the market. So why even try my perspective at this point?
Jason Hartman 22:08
Yeah, absolutely. But even if you could time the market, it doesn’t mean that you’ll win the game, but doesn’t mean that you outperform good solid income property investments anyway. So yeah, very, very good points. Okay. So Greg, tell us what you did when you started getting interested in real estate investing? Because you knew you could you could do better there than you could in the stock market. What do you do first,
Greg Saylor 22:33
I kind of knew I started looking around locally in California. And it was sort of, I guess, the same sort of general direction that I took when I bought my property, which is I started looking for properties that seemed like they would make sense.
Jason Hartman 22:50
Now. Does that mean the house you live in?
Greg Saylor 22:52
Yeah, that’s right.
Jason Hartman 22:53
So you don’t you do own your own home. And just so the audience knows you live in the Bay Area, San Francisco Bay. Right, that is correct. Okay. And whereabouts Do you want to be more specific I mean, it’s a deal of in San Jose or where
Greg Saylor 23:06
I live in is up in the unincorporated part of Alameda County. And in Hayward, which is right about halfway between San Francisco and San Jose, or kind of near Oakland on the East Bay. But that’s so when I was looking at buying a property. Of course, I was living in San Francisco at the time. And I just started, you know, expanding my search until I found a property that had the amount of land that I wanted, that was something I could afford, that I liked, and that put me into Hayward. So as the same kind of thing with investment property, I started looking in areas I knew and I just kept expanding and getting bigger and bigger, bigger. Finally, I realized I was up in Chico of all places, looking at you know, rental housing for college students. And I’m thinking I really want to get into that not really a and they didn’t even make that much sense. There’s like kind of subtle There has to be another way there has to be another way to invest in real estate. And that’s when I started listening to your podcast and a couple of other podcasts. And, you know, I knew it wasn’t gonna be California. I knew it had to be somewhere else. I just was trying to find a solution to that.
Jason Hartman 24:17
Right, right. And by the way, you know, there are no other podcasts on real estate investing to ever listen to. So, we are the only one.
Greg Saylor 24:27
Certainly my favorite.
Jason Hartman 24:28
I would like to think of that. It’s, it’s not true, unfortunately. But yeah, good stuff. So you started listening to the podcast, and when was that? I mean, your first purchases were in November of last year about five months ago. How long did it take? How long were you educating yourself listening to podcasts. And then before you did your first deal,
Greg Saylor 24:49
I would say about 45 days, but I listened to a lot of podcasts. I have quite a commute between my house and work. So I have, I’d say about two hours a day so about 10 hours a week. A listening to podcasts. So it, I got through quite a few of them pretty quickly. And then I called and left him a voicemail and Oliver called me back, we had a very nice conversation. And I just knew it was the way for me it made sense to me the investment vehicle makes sense. It’s not complicated. I mean, the transaction might be a little complicated, but the investment itself makes a lot of sense and seemed relatively simple, you know?
Jason Hartman 25:33
Yeah, yeah. And you know what, I’m so glad you mentioned that because I find that a lot of these different investment promoters out there who are promoting whatever type of investment, they hide things through complexity. And the world is not a really complex place, as it might appear on the outside, you know it. Sometimes the simple things just are the best I mean, the concept of just owning a property renting it to someone. I mean, there are things you have to know, no question about it. We saw a lot of time on this podcast talking about many different aspects of real estate investing. But overall, I mean, you don’t you don’t have to understand the Fibonacci curve, or all of these crazy things these Wall Street guys would have you understand, you know, some of these other investment schemes out there. It’s just, it’s just not really that complicated is that it’s just a simple workable thing. Right.
Greg Saylor 26:29
Yeah. I mean, there’s like the acquisition. I mean, there’s, you know, a number of players involved, of course. So it does get a little bit, you know, not I would say cumbersome, a little, you know, there’s movie pieces during the acquisition piece. But after that, you’re right. I mean, it’s, for me, it’s pretty straightforward. Yeah, they’re organized the tenant, the insurance, property management. That’s maintenance. What else is there? Really?
Jason Hartman 26:53
Yeah, you got about six components, I’d say you know, 567 components depending on how you look at it. Depending on whether or not you have a homeowner’s association, so there are a few moving parts, but it’s a really small number of moving parts in comparison. So what was your first property? Which, Which one did you buy first?
Greg Saylor 27:11
Yeah, let me add one more thing. And the other thing is that those moving parts are ones that I feel like I can have influence over. By Dolly my insurance carrier, I can go get a different one. I don’t like my property manager, I can get a different one. So I think that’s like, if I want to raise the rent, I can raise the rent. If I need to lower the rent, I can lower it. You know, it’s that having that flexibility in all the dimensions i think is a good thing.
Jason Hartman 27:36
Doesn’t it feel nice to be in control of your investments?
Greg Saylor 27:39
Yeah, it really does. Yeah,
Jason Hartman 27:40
it just makes such a difference. It really does. Yeah, good. Good stuff. Okay. So your first deal. Tell us about that.
Greg Saylor 27:47
It was in Indianapolis, it was a duplex. And actually, I had in mind that my first three properties are going to be duplexes because of the way that the lending, lending works as the first four properties that are duplexes are 25% down. And then after that, they go to 30%. So I kind of wanted all of my after for, of course, the single family homes go to 25%. And I just wanted to keep it putting 25% down on my properties. So I loaded up on the duplexes for the first three, because I have my primary home, which was number one, and then switch to single family homes.
Jason Hartman 28:26
So Indianapolis was one duplex or you bought a couple of them there.
Greg Saylor 28:31
I bought two in Indianapolis,
Jason Hartman 28:32
and where those new construction or resales
Greg Saylor 28:37
I’m sorry, do you mean like rehabbed or,
Jason Hartman 28:39
oh, no, what were they were they brand new or from a builder? Or were they, you know, rehab. I mean, all of our properties, pretty much our rehab. So that kind of goes without saying, but or were they resales where they already owned prior to you’re buying them?
Greg Saylor 28:53
Oh, I bought them from your network. From
Greg Saylor 28:58
yesterday, were rehabbed
Jason Hartman 29:00
Okay, good, good stuff. And so you’ve closed on those properties probably by now, I’m sure. And you’re closing on your sixth property next week. So tell us about the process of buying and, and how that all went and getting them closed and so forth.
Greg Saylor 29:16
Well, it was it was pretty smooth. I mean, I’ve I had some issues early on with, I was working with a lender that you guys did not recommend, or hadn’t recommended. And I didn’t like how that was going. So I asked Oliver, and he suggested some other folks that you guys recommended and that just went because greatly simplified everything.
Jason Hartman 29:43
What was what was the problem with the the first lender that you didn’t like so much?
Greg Saylor 29:47
It was just kind of a lack of communication, you know, as a new somebody new to investing. You know, I just didn’t know there’s a lot of questions out here. You’d have answered and I was not getting clear answers. You know, it could be me, you know, sometimes, you know, people could communicate differently. We were just not communicating well with them whether it was my fault, their fault? I don’t know. It just wasn’t a good. Sure.
Jason Hartman 30:18
Yeah, absolutely. And one of the things I say frequently is that investment property financing is a specialty. So going to the person that did the purchase of your home or the refinance on your home, it won’t necessarily work out very well. You really got to have someone who specializes in financing investment properties. It is a different thing, even though even though those investment properties are residential properties, in other words, they’re four units and under, it’s still a different deal. It’s really it really is a specialty we’ve, we’ve we’ve seen that all too many times over the years.
Greg Saylor 30:55
And actually, on that point, I know I’m reflecting back on this because it’s so new if you’d asked me this Two or three years from now, I probably would have completely forgotten about it. But at the same time, I was closing on two properties simultaneously those two duplexes actually holding on three properties simultaneously, I started three investment properties simultaneously, and decided to throw into the mix to refinance my primary residence. That was a mistake, because as soon as they were getting like close to ending the refinance my primary residence, all of a sudden on the soft credit pool, they saw the credit pool from another lender. So it was like, now they want documentation on all the investment properties I was buying. So it’s like
Greg Saylor 31:37
it was an interesting December was an interesting month. Yeah,
Jason Hartman 31:41
yeah. The stuff to do there. Definitely. Okay. So you got those properties financed in you got them closed. Tell us about whatever part you want about the property management about getting tenants, just whatever you’d like people to know.
Greg Saylor 31:58
Okay, so I guess I’m a software engineer. So I’m kind of a numbers guy. And, you know, I’m going to be looking at some of the things you call it property manager. I’m gonna be looking at that software soon. But you know, I started building these spreadsheets in the spreadsheet here has gotten bigger and bigger and bigger and it’s becoming increasingly difficult to track this but
Jason Hartman 32:20
yeah, use property tracker makes it so much easier. You’re not doing that yet. Hmm, not yet. Okay, that’s what I’m gonna bug you about. I want you to use that because you’re gonna find it’s so much easier to to keep track of your properties when you use that software.
Greg Saylor 32:37
Yeah, so I guess I’m kind of in I don’t want to say negative thinker, but I as my profession, I kind of look for problems. Right. So some of the i’d edited a couple of like minor snags along the way. And you know, don’t I’m not trying to be negative here, but the like on the I know,
Jason Hartman 32:58
we will listen we want it to be realistic? Like, yeah, one of the things we really try to do, Greg is, is provide real transparency. Other people out there will hide the flaws. Look at this is there are problems, I’ll be the first to tell anybody. It’s not perfect. But like Winston Churchill said of either democracy or capitalism, it’s just better than everything else. That’s all. That’s the only thing I say. It’s better than everything else.
Greg Saylor 33:24
So one of the things that I found, like, when I’m looking at properties, using your website that I found a little tricky was the providers. Some of them put 20% down, other ones put 25% down, they put different interest rates in there. And it doesn’t really translate to what interest rates I’m able to get. So I that’s why I had to build the spreadsheet right there because I needed to be able to take that numbers, put them into my spreadsheet so I could see what the actual, you know, numbers we’re considering the financing. Right, exactly.
Jason Hartman 33:57
So that is a terrific point. it. And that’s one of the reasons I want. Well, for the first part of that is, all of our investors need to number one, embrace the fragmentation, like I say, because that’s what keeps the institutional investors out of our business. So you do have that fragmentation, which is annoying. I completely get it, right, because you have one, one group in one area that does it one way and another group in another area does it another way, right? Yeah. So there’s fragmentation but standardize your data as much as you can by using our system the the property tracker property shopper system on the Jason hartman.com website. But the second part of it is, is that if you actually subscribe to that software, you can change the assumptions and you can make it all dynamic. It’s static when you’re looking at our website and we are working on an upgrade to that. But I’m not going to say that’s coming anytime soon. You know how software projects go in your business? But then you can Those numbers and you can make them all 25% down. Like you said, You wanted to have them all be consistent, like that are all the same interest rate or whatever you want. So yeah, good point.
Greg Saylor 35:09
Yeah. So it’s so basically I told you where I had this spreadsheet where I could enter four or five numbers. And, you know, I would use your website, your website gives you a great, kind of, should I should I look at this further, kind of, right. I mean, I can figure that out really quick from your website. But then I just take horrified numbers, punch them into the spreadsheet, I got three properties that look attractive. And I’ll punch them into my spreadsheet and figure out which one, you know, for their members looks better. So it’s kind of like the filtering that I can do on your website is really good. But there’s just another it’s like the due diligence, I guess.
Jason Hartman 35:45
Yeah, absolutely. Okay, good. Good. So tell us what else happened. What did it tell us more about the experience.
Greg Saylor 35:52
Okay. So, in addition to that, I kind of have this view of risk, I think around these around my properties that as long as I have, let’s say, good solid, let’s say really conservative single family homes, that Windows I can afford to take some other risks like with duplexes or with maybe properties in a little bit lower rent, lower grade neighborhood, you know, as long as I have that good foundation of good performing conservative, you know, really good properties and I can, you know, take a little bit more risk in some other areas. So I’m, I’m, as you would say, I think, independently owned and operated so I, you know, can take a little bit more risk in my life perhaps. So, the third duplex I bought in Chicago, and it was in a not not a very good neighborhood of Chicago and section eight tenants, but it’s been a really, really good performing property. But the trick there I think was a property manager that knows how to deal with those tenants in that area. That is like was critical for me. So I did a lot of betting on that particular property manager and wouldn’t have felt as comfortable doing that, for example, in Indianapolis, just based on, you know, not there’s anything wrong with any of the property manager there. They’re all wonderful, but it’s just experience with that type of tenant.
Jason Hartman 37:27
Right? It’s a it’s a specialty. Yeah,
Greg Saylor 37:30
no question about it. Good. And then I switched to the single family homes. I bought one in Memphis. That’s number four. And then, hopefully next week, I’ll be closing on another one in Memphis, and another one in Columbus, Ohio.
Jason Hartman 37:42
Fantastic, Eric, congratulations. Why did you pick the certain markets you picked and what was behind that? I mean, you could have picked different markets. Why that was.
Greg Saylor 37:51
It. I think it’s coming back to a bit a little bit of my view of risk, which I can’t even really argue regulate Well, it’s just sort of this innocuous thing that I wanted to be in, you know, a few different markets with different types of properties in those markets. And I liked all of these markets. I like all of these areas. I don’t like. Columbus is probably the easiest one, I guess. But that’s because I was surprised by the property taxes they’re liking. In Chicago, the property taxes are high, as we all know, but the rents kind of support that in Columbus, not so much. But I feel like Columbus is.
Greg Saylor 38:35
It’s coming around.
Jason Hartman 38:36
Yeah, I agree with you. Oh, Ohio isn’t as blighted as it used to be. I I’m not as hopeful about Detroit. But but the Ohio markets that were actually really pretty blighted in years past they’ve, they’ve come around quite a bit. I mean, when I’ve been in Columbus, Cleveland. I mean, I just I’ve been pleasantly impressed. I really didn’t expect to think as highly of those markets as I did until I, you know, till my last visit before my last visit to them, you know, and I reported on that on prior podcasts, but
Greg Saylor 39:11
and I should say, as well, you know, I lived in Indianapolis for many years, and made many road trips to Chicago and Columbus. So I was a little bit more familiar with those areas as well. So I can’t say it was conscious Lee, looking at those markets, because I was familiar with the area, but that might have been an unconscious factor. I don’t know. But But, you know, it’s like, I looked at all the markets. I looked at, you know, Atlanta, you know, all the markets and those ones just resonated with me. in Columbus. I like, like you just said, I think I just, I like the way that city feels for some reason, you know?
Jason Hartman 39:51
Mm hmm. I agree with you. No, I agree. I agree. Good stuff. Okay. What else do you want people to know about the experience, just Anything else? The question I haven’t asked you,
Greg Saylor 40:03
I would say,
Greg Saylor 40:06
another surprise that I had along the way. And I feel like I’m being so negative. I don’t mean that but was, you know, property taxes. I’ve been a bit surprised a couple of times with property taxes. So I think it’s worth for me I just added as part of my workflow, whatever you want to call it, to just double check the property taxes.
Jason Hartman 40:25
I think that’s very good advice. And one of the constant battles we have, and property taxes, I would say are one of the hardest ones to hold local market specialist accountable on is they generally speaking, they are not conservative enough on the numbers. You know, they’re salespeople, okay. They want to sell properties. And we are constantly as they upload properties to our website, and we make them do the uploading so that they have to make the representation about the property and its performance and you know, it’s pretty objections and so forth. But one of the things that we’re constantly battling with him is, you know, estimating rents higher than they should be, we want them to rein it in and be more conservative. And that’s one of the nice things about having a someone like us that offers an area agnostic approach. And we’ll tell you, if we think they’re, they’re being too optimistic on those numbers. But one of the hardest ones for us to check and know is property taxes, because that’s a complex thing. And it varies by the municipality. So just always take whatever they tell you and just assume it’s not going to be quite as good as they tell you. Okay, that’s the first thing. But the second thing is and I talked about this on a recent show, about the Chicago land area. Of course, when we talk about these markets, we’re not being specific as to city we’re talking about metropolitan areas, okay. So everybody understands that, even if property taxes go up quite a bit, given their financial payrolls in the Chicago or the Illinois area, I should say the whole state. I think the numbers still work out pretty well. I mean, I took our performers and change them based on a 1020, even a 30% increase in property taxes. And those deals still look pretty good to me.
Greg Saylor 42:21
Yeah, I’m baffled in, in kind of a good way how the properties are performed. And just the general quality of the rehab work that is done there. I’ve just been really, really blown away by it. You know, I would think my brain tells me that a property in those areas at that price point with those property taxes wouldn’t perform, but we run the numbers they perform really well. Mm hmm.
Jason Hartman 42:46
Good, good stuff. No, it is surprising. And I think that has the chance to really be more of a hybrid market, where you could see some decent appreciation, as opposed to the more linear markets that just sort of chug along and appreciate more moderately, so That’s another benefit of it.
Greg Saylor 43:01
Yeah. And let me get this knocked out as well. Because I’ve said, I’ve said a couple of things about, you know, the, your website and some of the things we just talked about. But, you know, being a software engineer, one of the things we deal with is normalized data a lot. And you guys have done a remarkable job of that there’s other providers out there that are in multiple markets, they do not do nearly as good of a job as you guys do. So even though I have a few, but I’ve called almost due diligence items or not even and there’s minor, but they’re, you guys do a really good job of getting us, you know, a good idea of what a property’s gonna look like, if we were to buy it.
Jason Hartman 43:40
Yeah, yeah. Good. Thank you. We really, you know, that’s the first thing I said, when I got into this business. Many years ago, as I said, look at goddess standardize the data, because I was trying to do this myself. And I didn’t have anyone to help me. I mean, that’s why I started this business. His back in 2003 2004 I wanted to become a nationwide investor. And I mean the data I would get Greg It was like I had to be a detective work for every deal. It was just crazy the amount of detective work I had to do and I had to assemble things into my own format. And it drove me absolutely nuts. You got to standardize the data. So that’s absolutely imperative.
Greg Saylor 44:26
Yeah, I couldn’t agree more and the other thing I would put out is where’s it gonna go with this? Oh, I’m in terms of the property of course I track all my income and expenses in you know, month by month and I’ve been pretty surprised that the properties haven’t just met the Performa they’ve actually exceeded the Performa So, in general, like after, after anything is all said and done. I think the numbers you guys put up there are actually pretty conservative.
Jason Hartman 44:57
Yeah, that’s what we try to be. We just want you to Have a better experience than what we say. But even if you don’t, even if those numbers come in short, it’s still gonna be pretty good, you know, compared to whatever else you might do, I would say I would hold our, our deals up against anything else you could find, you know,
Greg Saylor 45:15
so and then here’s a real example, like the Chicago property, which I mentioned wasn’t in such a good neighborhood. But I kind of knew that I knew I was taking a little bit more risk with this property.
Greg Saylor 45:26
It we need to put a fence up, right? There’s
Greg Saylor 45:30
no say not good activities going on in the backyard at night. So we need to put a fence up, which is something that we probably wouldn’t have to do. I wouldn’t have to do if I say we, I mean, the property manager and I were in Milan that we should probably wouldn’t have had done in any of the other properties that I bought. You know, it’s just little things like that that can but ya know, it’s just a risk that I kind of knew going into that
Jason Hartman 45:53
right and so, plan for some additional expenses. Be conservative on your numbers have a result fund. That’s all good advice. Very, very good points and tell us what are your plans for your investment portfolio? I mean, you know, you got into this because you wanted to earn a higher return on your money, of course, and maybe the overall goal of financial freedom and leaving the corporate world someday, I don’t know what what are your plans?
Greg Saylor 46:20
That’s an interesting one, because I really enjoy the work that I do. But you know, it’s, for me, growing up really poor, has had sort of this odd psyche, I can’t really explain it, but it’s sort of almost a fear of losing everything that I’ve had my whole life. So, to me, this is kind of more about redundancy, about redundancy of income stream. So if something does happen that has already had very positive impact on that, you know, I already feel more relaxed, just generally speaking, and you know, things are getting better, baby I don’t know if I should say this, but you know, the income that I’m getting for these properties just kind of blows my mind. I’m generating close to $4,000 a month from these six properties. Wow, that
Jason Hartman 47:12
is fantastic. Yeah, that’s what those are. Those are all based on 25% down. Yeah. Yeah. Wow. Yeah, you’re doing great.
Greg Saylor 47:20
Yeah, you be happier with this I’m like, really blown away by it. I mean, that’s that’s not county maintenance and things may come see loss. That’s, that’s how I kind of rate my goal progress, I guess is looking at the income, but then not counting vacancy loss or maintenance. That’s how I kind of track my goals, I guess. You know, yeah. I attract performance. I track my goals.
Jason Hartman 47:44
In terms of goals. Do you have a certain number of properties you want to buy?
Greg Saylor 47:47
I think it depends on what’s gonna happen after property number 10. I’m not sure. I know there’s some solutions out there but I’m still not real happy with the ones I’ve seen either
Jason Hartman 47:59
in terms of finding answering more than 10 properties, right?
Greg Saylor 48:01
That’s right. Yeah, yeah. And and the other thing that I’ve noticed is, you know, the debt to income ratio, or personal debt to income ratio is actually a really important factor in financing. And what I always thought is that as I buy more properties that I’m going to have income coming in from the property and expenses going out with it, my debt to income ratio is actually going to go down. But that doesn’t happen. It actually goes up, I suppose it depends on where you start in the debt income curve. But the way numbers averaged out, it actually kind of keeps creeping up with every property purchase. And I think that number needs to be less than 43%. I don’t want to speak for anybody but so it’s, you know, I’ve been, you know, I count for that on my spreadsheets now to just to make sure that if I’m looking at a property that it’s not going to my debt to income ratio is going to be okay with that,
Jason Hartman 48:51
right. Okay, good, good stuff. And so you’re going to get to your 10th property, and one solution because you don’t like the finance thing out there for more than 10 properties is to just get married and have your spouse buy 10 more.
Greg Saylor 49:08
There you go. Okay, now you’re just teasing me, Jason. There you go. Yeah, good.
Jason Hartman 49:13
There’s a creative solution, Greg.
Greg Saylor 49:17
Actually, here’s another creative solution I thought of, I don’t know how all this would play. But, you know, one has the flexibility to relocate. My understanding is you can buy one primary residence a year.
Jason Hartman 49:29
Well, yeah, but that’ll that’ll be a slow process. But yes, you can do that. Absolutely.
Greg Saylor 49:32
Yeah. So yeah, I’ll definitely be hitting, you know, 10 properties this year. So it’s, you know, in less than a year, basically, I would have filled out my conventional financing. So,
Jason Hartman 49:44
yeah, good, good stuff. Well, Greg, it’s been fantastic. hearing your story. Thank you so much for sharing it with the listeners. Just, you know, anything else you want to say to wrap it up?
Greg Saylor 49:54
I just want to give another shout out to Oliver because part of the due diligence that I do is of course, looking at the neighborhood. And he gave me a lot of really good ideas. And I found some on my own to about, you know, kind of how to like make it back to risk. You know, I want properties, some in good neighborhoods, I ran some I actually want some properties in some less than great neighborhoods. And some things I used to look at that are what’s around the property, like, Is it just a bunch of liquor stores? Or are there movie theaters? Are there other things like, you know, as they kind of go up the scale, there’s like more entertainment type things around the property. And then you get into a really good neighbor, you gotta like golf courses and things like that. So I kind of use Google in a very large way just to figure out what’s around the property and get a sense of, you know, is there a Home Depot nearby or Lowe’s nearby, you know, that kind of stuff. And I think that’s been really helpful for me, and of course, just walking around the street, the technology that’s out there now To be able to look at a neighborhood is just phenomenal.
Jason Hartman 51:04
Yeah. And soon as soon we’re gonna be able to dispatch our personalized drones out to do that for us, too. So it’s, it’s a great, it’s an amazing time to be alive as I always say.
Greg Saylor 51:15
It certainly is. Yeah, it’s done. Personally, thank you to you and all that you guys do. I know you guys work really hard on on everything. And I’ve been an incredibly fortunate benefactor from that.
Jason Hartman 51:29
So well, thank you so much. We appreciate your business and appreciate having you as a client and hope that we can help you build an awesome financial freedom portfolio. So thank you.
Greg Saylor 51:38
Thank you so much.
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