Jason Hartman uses this Flash Back Friday show to showcase a client study with Gary Pinkerton. Gary discusses his experience in real estate investing, specifically outlines issues with tenant turnover. He talks about how he reduces maintenance costs by buying and upgrading durable replacement materials. He also discusses preventative measures he uses to minimize turnover expenses. Gary talks about why he likes two year leases with built-in rent increases and shows listeners how.
Jason Hartman 0:00
Welcome to this week’s edition of flashback Friday, your opportunity to get some good review by listening to episodes from the past that Jason is hand picked to help you today in the present, and propel you into the future. Enjoy. Hi, Jason, thanks for inviting me on the give a quick preview of the new YouTube channel. As many of you know, Jason has been podcasting for many, many years delivering a lot of value to his audience, and providing thousands of episodes of free education. And he brought me onto the team a couple of months ago to help him dive into the world of video in order to expand his educational platforms. So we recently launched a new YouTube channel that is now the official YouTube channel of Jason Hartman and his company. And you’ll find a couple of older channels on YouTube that are specifically for some of Jason’s podcast shows. But this new channel is exclusively for original educational content. All About Income property investing. It will include a select amount of a few full podcast episodes that are the most popular. But for the most part, it’ll just be clips from podcasts and original videos. The channel is just Jason’s name Jason Hartman. And the channel setup is almost like an online course where you have playlists that are categorized into key areas that cover the whole gamut of real estate investing. And that way you can easily find content about specific topics that are relevant to you. And so subscribing to this YouTube channel will be like attending an income property investing school. If you’re a beginner, you’ll find value there. If you’re a veteran, you’ll find value there. The categories of education that you’ll get to enjoy in this channel include my 10 commandments of successful investing and your most of you are probably aware of his 10 commandments. He goes into some depth in the series that we have on that channel, finding the right markets and properties, analyzing real estate deals, managing your properties and tenants current laws and rules for income, property investing, debt, taxes and how those two things affect real estate, economics and current trends related to real estate investing, financial freedom mindset and inspiration, and popular podcast episodes, and then clips from different events. Those are the kinds of things you can expect from this channel. And you’ll also get some short clips of some key training that was pulled from specific podcast episodes that are within those different categories that I mentioned. So I encourage you to go subscribe now, the link to the channel will be in the show notes. But for now, you can just search Jason Hartman channel on YouTube, and then scroll down to where you see Jason’s name with his face. And the blurb for the channel reads, we provide real estate investors with education, research resources and technology to deal with all areas of their income property needs. And so once you see that description, oh no, that’s the right time. channel so we hope to see you there.
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 3:55
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Jason Hartman 4:51
Welcome to the creating wealth show. This is your host Jason Hartman with episode number 836 836. Thank you so much for joining me today as I am happy to be back in the good old US of A Yes, I have left the land of scarcity and lack and that is the European continent. I know, it may be a surprise to some of you that I say that but, you know, from an economic only standpoint, I am only talking about economic and standard of living. I am not talking about culture and history and lifestyle, but only from the economic standard of living kind of kind of point of view. America is the land of abundance and Europe, where I was born is the land of scarcity. You know, it’s like every time you walk into a hotel room, you got to put that stupid card and the light switch to get the electricity to go on. Every you know, the cars are small, the houses are small, everything is little, you know, like you take a shower and the little water heater that heats the shower water runs out. It’s just a land of lack, you know? If you live in the US, or Canada would be included in this, or you know, many other countries, of course, you just you just don’t know how lucky you are, you know, it blows my mind, again, that the Obama and Bernie Sanders crowd wants to make America more like Europe. I just don’t get it. It made blows my mind. I mean, look, I was born in Europe. I’ve been to Europe a zillion times. I love going there. But America is the land of abundance. Now, of course, the waistline of Americans is too abundant. And the end, you know, that’s there. There are problems with it. It’s not all good. But I just tell you the the free market, the abundance thinking is such a important part of your success as a real estate investor and as a person in life in general. Today, I want to welcome back to the show, our client and venture Alliance member, Mr. Gary Pinkerton, former nuclear submarine Captain Gary, welcome. How are you?
Gary Pinkerton 7:04
Thanks. Thanks, Jason. I really appreciate it. This has been two or three times I’ve been on but and it’s always humbling, but I you know, I feel like it’s a it’s an awesome experience. So thank you for inviting me back.
Jason Hartman 7:14
Well, thank you for joining us. And yeah, so you retired from the Navy? What about a year ago now?
Gary Pinkerton 7:20
Pretty close. Yeah, I stopped. Stop working. And officially was August 1, but almost exactly a year ago when I finished in uniform. Well,
Jason Hartman 7:28
during the Great Recession, you know, we heard a lot about people being underwater. You used to be underwater, too.
Gary Pinkerton 7:33
I did. I did. But it wasn’t an accident that was on purpose.
Jason Hartman 7:36
That was on purpose in that submarine is. This is such an amazing thing. You know, Gary, I tell you, we have got to line this up as a venture Alliance weekend trip. You got to take people onto a submarine sometime we got to make that work somehow.
Gary Pinkerton 7:52
Yeah, you know what I could, I think we could totally do that just as a tour and I can guide the tour with the whoever’s on the On the ship would probably appreciate me doing instead of them doing it. But, you know, would be a great opportunity to kind of add just some personal insight to it. I think it might be a great tour. And anytime that we line this up near one of the coasts, we could do that.
Jason Hartman 8:11
I definitely want to do that. And, and you know, what we’ve got to do, as part of our this would be a great venture Alliance mastermind photo op, is if we could, you know, have one of our venture Alliance members stand in one of those keys. And another one you see at one of the keys, you know, in the movies, how you turn the key to launch the nuclear missiles, can we launch a couple nuclear missiles just for fun?
Gary Pinkerton 8:33
No. And in fact, we’re not even gonna get that photo. I don’t think
Jason Hartman 8:37
they do it in the movies and they do it you know? Is it really like that, by the way, is it like that you got to turn to keys or a kids probably not like that anymore. It’s
Gary Pinkerton 8:48
pretty close. Because there certainly is a whole lot of redundancy and backup and more than one person involved which many of you think about it as it now I’m a private citizen with some with a family here and I’m really happy. The fact that there’s a whole A lot of backup before, you know before we make those kinds of decisions. So yeah, it’s pretty similar.
Jason Hartman 9:04
Yeah, well, interesting, very interesting stuff. Well, hey, Gary, you said something to me today that I thought was really important. You know, we were we were using boxer in boxing back and forth the best way to communicate ever invented in human history. voxer we were doing that this morning before we started recording the show. And you said that you wanted to talk about something that’s really I think, super important to real estate investors. borrow a phrase from poker thinking of Keith, our venture Alliance member who’s a professional poker player, and it’s called the turn the turn, okay. Anyway, that’s important to a real estate investor, because this is the area where yet you just lose money, and it’s on the tenant turn. So it we’ve talked a lot about this over the years, of course, but it begs the question, what can we do to number one, keep our tenants longer. Number two Make those turns between tenants, I’m talking about the time between the tenant when you may have to do a make ready to get the property ready for the new tenant, this is something that can really eat up, you know, eat up a lot of your return on investment. And and the turn is vitally important. So the first thing on the term, I think we want to say to our listeners and investors is don’t have the turn. Okay? So, try to avoid the term completely the tenant turnover and keep the tenants there. But don’t do that. At the risk of being one of these dumb landlords that doesn’t maximize yield, there’s a balance between these two, right? You want to increase rents, but not enough to motivate the tenant to move, obviously. So maybe, let’s talk about that. But then let’s also talk about what can we do to make our properties more bulletproof. So That it’s cheaper so that you don’t have to spend a bunch of money on the turn. And the other thing is we have this constant issue, Gary, of the property managers if you’re not self managing your properties, okay? Now, this is something that if you’re self managing, you’re not going to run into it as much, as long as you’re not wimpy with your tenant. Don’t be wimpy with your tenant, okay? You know, be a business person and have expectations for them and make them live up to it. And here, I’m talking about security deposits, okay. But with property managers, we have this inherent conflict of interest. You know, there’s an old saying you can’t serve two masters, right. And property managers kind of do serve Well, two masters and then themselves. So they serve the owner that’s truly their client, okay, that they have the fiduciary obligation to, hopefully that’s a fiduciary obligation. I don’t know if it truly is in every state, but it’s an obligation because the only is the one paying them right and that’s who the contract is with. And but then they also have the tenant. And you know, they don’t want their name all over Yelp and all these complaints sites when they are aggressive or maybe not even aggressive, but force their the tenants to uphold their part of the bargain. So if they, you know, if they damage the property, the property manager can be reluctant to charge the tenant for repair items. Okay. And this is one of the reasons I really like self management, one of the many reasons I do like it, you know, and maybe whatever else you want to talk about, and of course, you’re a very experienced investor, you’ve got many properties that you’ve purchased through our network. And you know, you’ve been investing with us for years. So tell us about some of your thoughts and experiences on the turn.
Gary Pinkerton 12:49
Yeah, so I’ve had quite a few recent experiences. I’ve also had a lot of conversations with Fernando and everyone. I think he’s very familiar with Fernando and, and he and I, it’s really funny. My hat is off to that that guy because he I went to the venture or excuse me, the meet the Masters in 2012. When we were both basically starting right there, I went a little bit different direction with a couple investments syndicated things that I participated in, I wish I hadn’t, I didn’t lose a lot. But you know, kind of long story short, and then I’ll get back to the property management, Fernando went directly into properties, it has, you know, quite a few more. And so he’s seen this a lot more than I have. And but I’m starting to see quite a bit of the turn as well. And I think that kind of generalize things, what seems to happen when you get a you know, recently rehab property in a B class kind of neighborhood, whether it be a, you know, a four Plex, or a duplex or even a single family is that there’s this churn at the very beginning, because you don’t always have the best tenants in there. But the thing is that when you do get that really good, dependable tenant, eventually you may take the second or third time, then when you get that tenant, you got to recognize that you have that tenant and you don’t really want to lose the tenant, and they will typically stick around on their own because that makes them the good Dennett and and so there’s a lot How to turn at the very beginning on a property it seems, and then you settle into had somebody for five years and then I had somebody for two years and then you know, maybe was another one year one, but then I jump back in and I get a three or five. So it’s real important to find that person and then do things that is necessary to hold on to them. But also, as you pointed out, don’t be wimpy. Don’t be a bad business person. So, for example, I have a class a building in San Antonio that I bought before you know, I joined the network several years ago, I had a tenant there that was really good. But the market had you know, she was there for two years and this spring it can do for her to renew our lease and she said Listen, I just haven’t been keeping up with the rental increases. So I actually lowered her rent not raised but lowered it by $50. I put us about 150 on the market, but it’s a class a building. So that’s not a large percentage. It’s like less than 10% and I let her renew for that year, but we did a two year lease so the next year was higher. And and so that helped me not have to have a 1500 dollar turn. It helped her not having To spend money to move and most importantly, I had been to the property recently, I knew she was taking care of it well, so it was it was a win win for everyone. If you go to like, you know, I have a property in St. in Memphis, for example. And, you know, I have several properties there. And this is a bad egg, but I have several good eggs. This one I got in October and put a 24 month lease on. And so now we’re approaching six months in the
Jason Hartman 15:24
independent right right there is one way to decrease the churn is to write your leases, works, right? Well, yeah, it does nothing, hey, nothing always works. Okay. But as a general rule, I believe you should try and do two year leases on your properties. Okay. And if you want to, you can build an escalation into that contract. It doesn’t mean you’re leasing for you know, say the properties leasing for $1,000 a month doesn’t mean you’re committed to $1,000 a month for two years. You just say the first year is $1,000 per month and in the second year is a Thousand $30 per month. Okay, and that’s pretty easy to do, you know, to have an escalation built in. That’s maybe, you know, 3% right. 30 bucks. So yeah, go ahead. So two year leases first first first rule. Yeah.
Gary Pinkerton 16:15
Right. And, and I like the idea, right? And this isn’t a new idea, but I like and have had good experience with the concept that you always want to and you’ve said this a lot, Jason that you always want to have your clients with the understanding that rent will go up each year when it’s renewed because the market economy inflation is going to go up in most areas, right. So a small
Jason Hartman 16:34
rent your tenants your tenants and, and get them that’s a very good Gary, get them used to that, like you’re training them, okay? Even though it’s just a minimal increase. You’re putting it in their mind right, planting that seed that that’s just normal. That’s what happens rents go up.
Gary Pinkerton 16:54
Okay. Right. In this one property 24 month lease. recently read had been it was newly rehabbed in October, and the tenant never once paid on time, right? So we knew from the beginning, my wife, Sue does, you know the books for this. And she kept telling me, Hey, we’re not going to want to keep this tenant around. But the other thing she said, and this was really insightful. She said, that, hey, that the management company in this case, and this is not uncommon, the management company is keeping all of the all of the late fees, which is fairly standard. But again, it goes against this idea of the manager and the owner having our interests align because what is a
Jason Hartman 17:36
conflict of interest? I hate that part of it. Remember, you’re listening to flashback Friday. Our new episodes are published every Monday and Wednesday. And we’ve spoken out about that a lot. You know, and what we mean there, folks, is that when the management company keeps 100 percent of the late fee. Well, you know, follow the money, right? What’s their motivation going to be? It’s going to be to, to make the tenant pay late fees and that makes them predatory on the tenant. Okay? It’s like incentivizing them to have this bad relationship with a tenant. Now tenants are late, okay? Doesn’t mean that happens. But you don’t, you know, you don’t want the that to be such a high profit motivator for the management company, you know, $50 late fees every month 5% of say $1,000 rent, right? You know that. That’s a big difference. When the management fee is only 100 bucks a month, for example, or 90 bucks and they get a $50 late fee. What you know, they’re going to almost encourage that they’re going to train them to be late. And then the tenant feels like they’re getting ripped off. You don’t want the tenant the tenant ultimately leave you you mentioned it but it like is your they’re not really your client. But you said client And they are your customer. Okay? So you want to have that relationship good. You don’t want the tenant to feel like you’re getting ripped off every month.
Gary Pinkerton 19:07
Right, exactly. And so and Sue even mentioned, she’s like this guy is paying later and later every month. And so he would scrape together 150 $200. And 100 of it would go or 75 of it would go to the management fee. And then he would leave there dejected and you know, upset that he has scraped that together, and it didn’t pay off even half of what I owe this month. And so you could just see it happen. Well, eventually here. And in the beginning of May, we get a notice from the the property manager, and this was our first indication that that the place was ratings today, your property is vacant, here’s your make ready and make ready was 20 $300. And the place just, you know, got rehabbed in in October. Now there’s some contributing things to that. One of them is that they made the client Sorry, I said it again. They made the tenant the customer very upset every time you had an experience with him and he did no favors and trying to keep that property in good shape. But But Also, you know, there were some mistakes on the rehab that, you know, should have been things that should have been done that were fixing this round. And it was a fresh set of eyes from the management company didn’t happen to be the same company that did the rehab. So, you know, some of that 2500, I will admit is, you know, stuff that needed to be done at the beginning, but about 1500 of it really wasn’t. So if we go Jason, back to where you were, you know, we were talking about what incentivizes the management company, they, you know, they placed the first tenant got paid for that, they got a ton of late fees, they’re going to get a really nice, you know, 15% markup on all of the the make readies, they’re going to get to place another tenant. So, you know, that’s fairly tough. And I think the way around that, again, some of this when you get a new property, just have to keep working and making sure that you know, maybe you get involved in who they place there and ask them questions. I do that often. So I think you know, you just turned through but but how do we prevent that from being expensive, I think is one of the things we want to talk about. Right? That term? Yeah.
Jason Hartman 21:01
Yeah, no question about it. Okay. So do you know, I want to make a comparison as you were speaking, Gary, about your experience with the property managers and the late fees? Do you know what some of these property managers are? They’re kind of doing they’re basically running almost like a payday loan business. Yeah. Or a payday check cashing business that’s not, you know, cashing your check in a bank, right? Where these fees are just exorbitant. And these people live hand to mouth, you know, a lot of them and there are a bunch of very expensive financing options, you know, that the term predatory lending comes to mind because that’s what it is where, you know, these these people are not financially sophisticated, and they’re just trying to get by and, you know, you put them in a position where your tenant is basically spending five to 10% extra per month, just because they’re late on the rent in is this vicious cycle. You know, I almost sound a little bit like a socialist here, you know, but but it’s really it’s not fair. You know, it’s not fair, I’m going to stick up for the tenants. It’s not fair to the tenants. So one of the principles that we constantly talk about here on the show and in all of our teachings is you’ve got to have an alignment of interest, okay? And if you if you don’t get control of the relationship, and you do decide to have property managers, which is fine, there are some great property managers out there. And there are some bad ones too, no question like anything. But if you don’t get control of that relationship, either by self managing or just controlling the property management agreement and relationship there and making sure things are in alignment, you know, your interest and your tenants interest, and your managers interest should be in alignment as much as possible. I won’t go into that because we’ve talked about that deeply could take you know, another hour But you know, and past episodes, it’s their go to Jason hartman.com. You can search terms like that property management, flat fee, property management alignment of interest. You there’s lots of discussions about that on prior episodes. But But yeah, how can we minimize cost of that, that tenant turnover when you have it?
Gary Pinkerton 23:20
Well, I think first, you know, the customer’s always right, right? And you can’t always say the tenant, give the tenant whatever they want. That’s not really what I mean. From the managers perspective, the owner is a customer and the tenant is a customer, as you commented, they kind of work for two people. So I try to prevent the vacancy if I can do that to begin with as an example, and then I’ll get to how do we minimize the cost, but I have a property in St. Louis, a very good tenant and they’ve been there on a two year original lease, paid always on time, very, very good tenant, taking nice property, nice care of the property, but it had a roof issue, so water damage over time. Some door hinges need to be fixed and you know some other pretty, you know, minor things re cocking the bathtubs. And so they basically said, Hey, we’ll sign another lease, we’d rather not increase because there’s problems here in the property. And, and I said, Well, I if I, if you don’t sign again, then I’ll be able to fix all those properties and raise the rents substantially quite a bit above what they paid. And, and so we kind of came to basically an agreement, they say, well, we can’t afford to raise it, you know, to the market rent right now. So instead of me paying 2000 to 2500, to do a turn on a property that it’s been quite a while, so it would probably cost that. I said, Hey, I’ll take care of the highest priority items for you kind of a mini turned cost. And then they went up partway in the rent, and I got to retain a really good runner, so that that book is not yet published, but I’m hoping that that’s how it comes out. It seems like that’s where it’s going, as far as you know, as far as what can we do you guys have already Jason, you’ve already talked to you and Elizabeth both about some really Good options and I’m starting to put those into place. You know, so the the wood laminate floor is a great option. I even had a property there in St. Louis where we were going to put that in but that extra expensive 1500 dollars my property manager said, Hey, you know, the guy who doesn’t make readies for us just recommended that we just pull the carpet and we paint it because that’s standard for the properties where we are here in this location. So I think being able, you know, having a good conversation with a manager that that you trust and that you have good rapport with. They will save you a lot of money because they know the area they know what’s expected when the tenant the potential tenant comes in looking to rent your property.
Jason Hartman 25:35
Yeah, okay. So that’s all very good stuff. So you want to make the property the physical condition of the property as bulletproof as possible. And you’re referring to our our clan and venture Alliance member has been on the show Elizabeth Embry, who by the way is hosting a another show the women investing network, so check that out as well. And yeah, and she’s doing a great job with that, but Elizabeth talked about You know, the laminate floors that the flooring, I mean, you know it’s an amazing time to be alive, right? new material sciences, better flooring, it’s much cheaper to maintain over the long haul. It’ll cost you a little more than carpet in the initial part but in the long run it will be a lot less expensive. So I did one of my houses in San Antonio, you know, it came up it was like six, seven years I owned it and never replace the carpet or anything and it was finally just time to do it. Once this last tenant moved out. It was about $1,000 more and I did the entire house in the wood laminate, and that house has now got bulletproof flooring, okay, you know if there’s a tear in that flooring, it’s really easy to fix it and replace it. I don’t think you should do the dark flooring. I think you should do kind of a middle tone. Okay, color is an issue. Of course you know when it’s dark. Number one, it shows all the dust and number two makes the rooms look smaller because darker rooms look smaller. Of course in lighter rooms. Look Barger and then the other thing that I’m a huge fan of is on the paint. You either do lotion paint, or you do you know, the more like a naml ish paint. Okay, egg shell is the name of the finish, not the color. Shell is a color, but it’s also a finish. Okay, so low sheen or eggshell finish paint and rather than flat paint on the walls which scratches and in just any little thing looks awful. Okay, on the flat paint you do the low sheen throughout the house, you know, on the walls and the scuffs and scratches and fingerprints, they just wipe right off. You know you can just cleaner, any household cleaner, you can just wipe it off, and the those walls become very durable. And I just think back to one of my own houses in which I lived the last. Well actually the last house I lived in that I own back in Orange County, California, which I I talked about when I teach people about the LTI ratio in the Hartman risk evaluator that’s the house okay? I lived in that house for seven years. And I put a shelf finished paint on it, and that paint looks good for seven years and I was not easy on it. Okay. So you know, make the walls bulletproof and the flooring bulletproof by doing those two things, okay? That will really reduce your your long term costs. So you got to spec that out, you know, if you’re, if you’re buying a property today, and that local market specialist in our network that you’re buying from, you know, they do different types of rehabs, right? And they always want to deliver you the house at the lowest price, but you may want to tell them look, I would like to spec this house at a higher level, I want to, I want to spend, you know, 200 bucks more and I want low sheen paint throughout, okay, and I don’t know what the exact cost will be, but, you know, it’ll be a little more and I want to do the laminate flooring, the sort of would look at laminate flooring throughout instead of any carpet and make it a lot less expensive. So I think those two things are very valuable.
Gary Pinkerton 29:09
I agree I agree and the only other thing I the two other I guess quick things again kind of market dependent, but I have a couple markets San Antonio and and for whatever reason St. Louis. There are areas where the air conditioners every year have substantial problems, air conditioners and heating systems and so I have gotten into a routine where I pay for that I’m sure everyone has experienced where some local either your property manager or if you’ve ever used a heating service that then they contact you but they offer this you know this come check it out at the beginning of the season very nominal fee of $75 or $100 or something. I’m using that now because the when when your recognition or fails or when your heating system fails, it’s when the when Mother Nature has tested it and it’s tested every other one in the area too. So you will pay out the nose Your tenants will be extremely unhappy, because it’ll be delayed and getting response because they’re busy with every other house that just got tested. So I do that now. And I’ve gotten good experience and haven’t had the crises that I had every year before that. And then the other thing I would say is don’t be hesitant to use a service, something like home advisor, I love homeadvisor. I’m self managing a property in San Antonio, Texas from New Jersey. And I use homeadvisor all the time. And it’s incredibly inexpensive. Tell us how you use it. What do I use it for appliances, a stove broke a dishwasher broke. I’ve used it to have a gentleman work on replace, you know, the control valves in a bathroom. So just really for any maintenance service. I simply just put in what the problem is and the zip code and you can choose where do you want people to call you immediately. That’s typically what I do and are three different people providers will give me a call. A couple of them that will head out to the property. There’s, you know, sometimes there’s no visit charge So it’s not a big commercial about them. But there’s there’s other services available. But don’t be hesitant even with sure there are
Jason Hartman 31:05
no and of course, Angie’s List is one of them. The problem with Angie’s List, at least last time I was using it, I don’t really use it anymore because it was all localized by zip code, you know, and we’re, we’re nationwide investors. So, you know, we’d have to join Angie’s List in each of our markets where we own properties. And and that’s, you know, Gary, that’s one of the great things too nowadays, you can do this with a couple clicks of the mouse, right? You can, you can basically run your real estate Empire, you know, nationwide, yourself, and there’s so much transparency now that was not there. Think of all I want everybody listening to think of all of the 10s of millions of real estate investors over the last few decades that have made fortunes investing in buy and hold rental properties. And they didn’t have this kind of ease of use and transparency that we have today is is an amazing time to be a real estate investor, okay? You don’t need to rely on, you know, some estimate from a property manager or a contractor. You can easily compare things. No one can be su anymore about the cost of a garbage disposal or cost of whatever, because you can go to Home Depot’s website and you can find out yourself.
Gary Pinkerton 32:25
Yeah, exactly. And that’s what I was going to say, Jason is that I would not hesitate with those services available like that. And the great experience that I’ve relayed to you that I have every time with this, I wouldn’t hesitate just, you know, checking you’re doing this even when you have a property manager, for example, in that property that went vacant early. One of the things on the make ready was that the dishwasher scene seems to be broken, probably needs replaced. And when I asked them, could you explain that? They said, Well, we couldn’t get the door open. And so their estimate was $450 plus 15%. Mark and I said that’s okay. That’s okay. I’ll Take care of myself, right? And I haven’t yet achieved that the person is coming next week, but what I fully expect is that the door was stuck, you know? Or even if not, it’s still going to be far less expensive for me to put a brand new one in, then have them go do that. So it was simple. Again, it was a click of a mouse. So just another thought on how you can reduce turn by just a little bit of personal development that took me 10 minutes.
Jason Hartman 33:22
Just a reminder, you’re listening to flashback Friday. Our new episodes are published every Monday and every Wednesday. Yeah, and yeah, you know it then it might even take you less than 10 minutes to you know, it’s really, really amazing just didn’t have the discipline and the initiative to do some of this stuff. And at the very least, it is going to, you know, we’re all about the empowered investor, right, giving you the tools, whether they be the software tools that you can find it like real estate tools. com Okay. The software company Fernando and I purchased Couple years ago, so you know great tools there that the other tools you can find at Jason Hartman calm and helping you be the empowered investor. And one of the things you do, even if you don’t actually take any of these things to the finish line, if it’s just an email, in here’s an example of how it plays out. You get an email from your property manager or your tenant, and it says this and that and a lot of your tenants if you’re self managing, you’ll find your tenant to be incredibly helpful to you, where they will do a lot of the legwork for you. It’s amazing to me, how well that works. You know, the tenant, a lot of times, you know, they’ll say, Hey, I already called someone and and they’re coming over to look at this, you know, this repair item, right? And the property manager might say, Hey, we got a complaint from the tenant and you know, we need to fix this and you know, then they have someone go out and take a look at it. If you simply go to Home advisor or you go to you know the Home Depot or the Lowe’s website site and you look up this item and just copy the link and paste it into the email and say, Well, I checked the Home Depot website and looks like we can get this part for you know, $52 and 36 cents, right? The property manager or the tenant are going to be Wow, this guy is on the ball. Okay? And, and even and here’s a little secret, even if you’re not on the ball, you want to fake it till you make it. You know, you want to make them think you’re on the ball, that you are a sophisticated investor who’s not going to put up with a bunch of crap and overcharges and you’re not going to pay through the nose, you’re not lazy. You’re going to click your mouse a few times, and do a search or two on whatever it is, and you’re going to be the empowered investor. Okay? Simply by sending that one email that you will change the nature of The relationship that you know, that email that shows Look, you’re not just taking their word for it, you’re checking things. Okay. And that’s going to make you a much more successful investor.
Gary Pinkerton 36:09
Absolutely. So I promised to the audience that I will keep checking into this, I mean, reducing the turn is kind of becoming a passion for me, because I think it’s important, you know, very simple numbers, if you were making, you know, net $250 a month on a property. And you were in this process where where it was because it was the property managers best interest to turn it every year, not even offer a renewal, you know, then then you would be, you know, setting up to make $3,000 a year, right? Well, if your turn is 2000, every time because you haven’t thought, you know, closely about how to reduce that. That’s not a very good profit. And there’s a lot of other dimensions to real estate that make it very valuable. But that one cash flow would not be a good one in that scenario. So we have to figure out how do we extend this out to two or three years between turns and how do we get that turned down to 1000, maybe 1500. I think it makes a huge Yeah, very,
Jason Hartman 37:00
very good point. Well, Gary, I know we were going to talk about a couple other things today, but we have run out of time. As as, as usual, but I think this is an important topic. And thank you for sharing your case study as a client, with our audience again, we really appreciate it. And we’re going to have you back on soon. We’ve got a couple of news items we want to talk about about the the disappearing middle class about Mr. Zuckerberg, the biggest invader of privacy in human history besides the folks at Google. And what he thinks I you know, I think he’s got political aspirations. I can see a Zuckerberg presidential candidate, and he’s, I want to I want to talk about his universal income stuff. He sent me an article on that that’s fascinating. And we like to talk on the show about the macro and the micro things okay, because they’re both important, you know, the big picture stuff, societal government, political, and then the detailed tax. practical stuff like reducing the cost of tenant turnover. But Gary, before we go, you know, I just want to ask you about some educational stuff real quickly here and maybe share your thoughts on investor education with people. Because you, like so many of our clients have been really just very motivated about sort of being in the culture, if you will, staying in the loop, coming to events and being really involved in and we’ve got two events coming up and you’re coming to both of them. We’ve got our our venture Alliance mastermind event and and you were like, I think our third member of the venture Alliance that’s coming up in Chicago in June. So it’s a What about three weeks away, I think. And then we’ve got our Oklahoma City Jason Hartman University Jay Chou and property to recombination coming up first weekend of July. What are your thoughts about those two events?
Gary Pinkerton 38:54
Well, venture Alliance has been a really, really stretching process for me. You know, if From all aspects, you know, I mean, it’s not inexpensive. And you did that on purpose to stretch people. And it certainly, you know, worked in my case, you know, especially three years ago when we started this or two years ago. And so it has caused me the stretch, it’s caused me to raise my game. And, and the people I’ve gotten around have been far more what I’ve learned from them and shared and the experiences has been far more than you know, any monetary cost has been for me and I think everyone else who tries this would would experience the same thing. So I certainly invite everyone to come join us and the bigger our group gets, the more value that gets added to every one of us so I’m one of the most motivated people off the hair, you know, trying to to tell others about it get people to join us because I’d love to have a bigger group even I’m learning a ton here and getting a lot of value, but it would be better. You know, if I just think about Keith, and and Chad, you know, Keith being our, you know, our poker player and Chad, one of our local market specialists, the most, the two most recent and john, I mean, my gosh, some great people that I’ve learned a ton from so very Caroline’s really awesome on kind of on the other side more on the basics, go to school stuff with Jade University. And that area tour there in Oklahoma City very excited to go back to that. But for me, you know, repetition is the mother of success. And, you know, Ziegler had a quote and I know you his you may know his quotes better than me, but it was something like you can change your world or you can change your results by what you put into your mind. And so I go to those kinds of events, to conferences to education events that you put on Jason, for two reasons, one, because for that, quote, by what I put in my mind, so if I’m, if I’m continuously putting that information in my mind thinking about it going over how it why this process makes sense, then it keeps me focused on that. And it kind of keeps me on target. But it also you know, refreshes things that I’ve forgotten in the past or, you know, paths I wanted to go down but kind of got distracted. But then the other quote about you are the sum total of the five people you spend the most time around Well, I want to spend my time Well, yeah, that’s right. I want to spend my time around guys like you and then venture Alliance but also people who were long term investment, wealth creation minded and everyone in that rooms like that. So, for me, it’s amazing. It’s rejuvenating for me. There’s also that repetition of learning.
Jason Hartman 41:15
You know, when we had our venture Alliance mastermind weekend on Jekyll Island, GA, the birthplace of the Federal Reserve, and we have G. Edward Griffin speak at our last meet the Masters event. He’s been on the show several times as well, the the author of the creature from Jekyll Island book, but I’ll tell you one of the things that my mom said my mom came to that event. I think that’s the only venture Alliance event she’s been to. But she said, she said to me afterwards, she said, Jason, you know, this group you have is so stimulating. They’re constantly like reading books and going to conferences and learning things and, and they’re just, they’re just so engaged in life and she just said she couldn’t believe how How stimulating that that was to, to sit around the boardroom table. But interestingly, in the room where they found her the federal reserve the Federal Reserve room, at the Jekyll Island, hotel and resort or resort and club or whatever it’s called where we stayed. And she said her mind was just expanded from that that meeting and that’s what the venture Alliance is all about. So you know, up your game, I mean, you know, get take it to the next level, check out venture Alliance mastermind.com for that, or, or just go to Jason Hartman, calm click on events, you can find information in both places. And we’d love to have you involved in that you can always come as a guest to those events on a one time basis. Of course, the property tour and Jason Hartman University event for the weekend and the first weekend of July on Saturday and Sunday, are an Oklahoma City this time so you’ll see properties properties are in short supply, inventory is very scares,
Gary Pinkerton 43:01
that’s for certainly for true or that certainly
Jason Hartman 43:04
no question about it. But we’d love to have you join us for both of those events, folks. So check those out Jason hartman.com and venture Alliance mastermind calm and and Gary, thank you so much for joining us today appreciate having you on the show and appreciate you being so giving and willing to share your your personal experiences and your your case study as a client. We appreciate that. So thank you.
Gary Pinkerton 43:25
Absolutely. Thanks so much. I look forward to round two when we finish up we’re going to talk about
Jason Hartman 43:29
Alright everybody, we’ll talk to you on the next episode 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 of 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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