Podcast Summary
Stay informed with keyword alerts on BiggerPockets: Set up keyword alerts on BiggerPockets to stay updated on relevant discussions, network, learn about local events, and potentially discover new business opportunities.
Using keyword alerts on BiggerPockets is a powerful tool for real estate investors and professionals. By setting up alerts for specific keywords, you can stay informed about relevant discussions in the forums and be the first to respond, positioning yourself as an expert in your field. Keyword alerts can help you network, learn about local events, and even find new business opportunities. Don't miss out on this valuable resource – set up your keyword alerts today at biggerpockets.com/alerts. And who knows, you might even get a surprise visit from a wolf-like dog while you're at it! (Just kidding about that last part.)
Invest in real estate with minimal upfront costs using Rent to Retirement: Leverage discounted rental properties and investor loans to secure cash flow, appreciation, and equity with little money down. Learn from industry experts and explore tax savings opportunities with 1031 Pros.
It's possible to invest in real estate with little to no money down through programs like Rent to Retirement. This company offers new construction turnkey rental properties at discounted prices and investor loans with low interest rates and minimal down payments. By leveraging these opportunities, investors can secure cash flow, appreciation, and equity with minimal upfront costs. Another important takeaway is the value of learning from industry experts. By tuning into the Walker webcast, listeners can gain insights on commercial real estate, entrepreneurship, leadership, and the economy from renowned figures like Willie Walker and AROD. Lastly, 1031 Pros offers a significant tax savings opportunity for those selling properties through 1031 exchanges. With their expertise and experience, they've helped clients save over half a billion dollars in taxes. Overall, these resources and strategies can help investors make informed decisions, maximize their returns, and stay ahead of the curve in the real estate market.
Building a solid foundation in real estate: Start small, learn the ropes, and wait before scaling up to grow a real estate portfolio quickly.
Growing a real estate portfolio takes time and patience. The speaker started with a few properties in Chicago and slowly expanded into the Milwaukee market. They house hacked triplexes, bought a single-family home, and rehabbed it to grow their portfolio. They only bought three properties in three years but then bought 18 properties in the past year. The key to their rapid growth was building a solid foundation, learning the ropes of landlording, and waiting until they were comfortable with their abilities before scaling up. For those starting out with a few rental properties, the speaker's advice is to consider leaving a full-time job when real estate becomes an obstacle, finding a reliable property manager, and exploring commercial financing options. With a strong foundation in place, growth can come quickly, but it requires patience and a solid plan.
Finding the right property manager and incentivizing them to prioritize tenant satisfaction: Investing in a trusted, passionate property manager part-time and incentivizing them to keep tenants happy can lead to reduced turnover, a sense of community among investors, and a more profitable and sustainable business.
Having an in-house property manager can be beneficial for a real estate business, especially when it comes to keeping tenants and reducing turnover. This was the experience of the speaker, who shared how they were able to bring in a trusted property manager named Carlos, who had a good rapport with tenants and a passion for real estate but couldn't afford to leave his job full-time. The speaker and Carlos worked out a plan where he would work for them part-time until they could afford his full salary, and they incentivized him to keep tenants happy by not charging lease ups and offering bonuses for tenant retention. This approach not only helped keep tenants in place but also created a sense of community among investors in the same ZIP code, allowing them to afford a full-time staff. Overall, the speaker's experience highlights the importance of finding the right property manager and incentivizing them to prioritize tenant satisfaction, leading to a more profitable and sustainable business.
Investing in repairs and improvements to keep tenants happy: Maintaining high tenant satisfaction leads to longer tenures and increased portfolio growth, but requires significant investment and management efforts.
Property management involves making tenants happy, even if it means incurring additional costs. This was evident in the discussion where the landlords shared their philosophy of investing in repairs and improvements to keep tenants satisfied and in place for longer tenures. This approach led to the acquisition of 51 units in a year, growing their portfolio significantly. However, this growth came with its challenges, including managing the workload and maintaining high standards for tenant selection and unit condition. Despite the stress and hard work, the landlords emphasized the importance of attracting and retaining good tenants, as they contribute to the overall success and value of the rental properties.
Lessons from investing in real estate: Investing in real estate requires careful planning, attention to detail, and a network of trusted professionals to avoid costly evictions and ensure success.
Investing in real estate requires attention to detail and making the right decisions to attract desirable tenants and avoid costly evictions. The speaker shared their experience of purchasing a run-down triplex and renting it out as-is, only to face two evictions due to attracting undesirable tenants. They spent around $10 in eviction costs and damages, which could have been prevented by investing in painting and improving the property's appearance. The importance of hiring a reliable and efficient attorney was also emphasized, as the speaker shared their experience of hiring a slow attorney, resulting in longer eviction processes and lost rent. The speaker recommended using resources like BiggerPockets.com to connect with other investors and learn from their experiences to make informed decisions. Overall, the lesson learned is that investing in real estate requires careful planning, attention to detail, and building a network of trusted professionals to ensure success.
Building connections in real estate industry leads to valuable opportunities: Connecting with industry peers through meetups and online forums can lead to finding contractors, learning about markets, and securing properties. Utilize various sourcing methods including MLS, off-market deals, and direct mail campaigns to find properties in urban environments with a focus on the lower price point market.
Building connections in the real estate industry, whether it be through meetups or online forums, can lead to valuable opportunities and help solve problems more efficiently. For example, the speakers in this conversation shared their experiences of making valuable connections through meetups and online forums, which led to finding contractors, learning about markets, and securing properties. Additionally, they discussed their investment strategies in urban environments with a high density of duplexes and above, focusing on the lower price point market with a B to B-minus tenant class. They find their properties through various methods including MLS, off-market deals, and direct mail campaigns, with the latter yielding significant results. Overall, the importance of building relationships and utilizing various sourcing methods in the real estate industry cannot be overstated.
Finding Deals Through Multiple Strategies: Successful real estate investors use various methods to secure deals and maintain a manageable workload. Persistence and building relationships are key to finding opportunities, and closing multiple deals at once can increase deal size and efficiency.
Successful real estate investors employ multiple strategies to find deals and don't rely solely on one method. The speaker shared his experience of using direct mail campaigns, cold-approaching sellers at closings, and striking up conversations at restaurants to secure deals. He emphasized the importance of being persistent and letting sellers know that he's always looking for new investment opportunities. The speaker also revealed an unconventional approach of closing multiple deals at once to increase deal size and make it more attractive for lenders. He mentioned that this method can be challenging but allows them to manage their workload and stress levels better. The speaker is a broker and writes his own contracts, ensuring a smooth transaction process and minimizing surprises. Not all properties are move-in ready, and the investor tries to balance the number of buildings requiring repairs with those that are rent-ready to maintain a manageable workload.
Milwaukee's strict code inspections lead to unexpected costs: Milwaukee's code inspections can result in numerous repairs, ranging from minor to major projects, causing unexpected financial burdens for property buyers.
Buying properties in Milwaukee comes with unexpected costs due to strict code inspections. These inspections can result in numerous code violations, which the buyer is responsible for fixing. The extent of the repairs can range from minor issues like painting or screen repairs to major projects like roofing, regrading, or tuckpointing. The severity of the violations depends on the inspector's strictness. A bad inspector could cause significant financial trouble. For instance, the speaker bought a five-unit property for $55,000, which had 63 code violations and required approximately $45,000 in repairs. Despite the challenges, the property could potentially generate $21,100 in monthly rent once renovated. However, it's essential to account for out-of-service units when calculating potential profits. In the speaker's portfolio, three units were currently out of service, reducing their total income. To mitigate potential losses, the speaker excluded the rent from these units when calculating potential profits. Overall, Milwaukee's code inspections add unexpected costs and require careful planning and budgeting.
Reliable data, peace of mind, and effective tax strategies: Invest in off-market deals with DealMachine for quality data, secure homes with SimpliSafe, and defer taxes with 1031 exchanges through First American Exchange Company.
Successful real estate investing requires reliable data, peace of mind through security, and effective strategies for tax savings. DealMachine offers high-quality data for off-market deals, while SimpliSafe ensures peace of mind through advanced home security systems. 1031 exchanges, facilitated by First American Exchange Company, help investors defer capital gains taxes and build rental property empires. The speakers shared their personal experiences and emphasized the importance of preparation, scalability, and commitment to achieving ambitious goals in real estate investing.
Streamlining rent collection and reducing vacancy: Offering flexible payment options and incentives can improve rent collection efficiency and decrease vacancy rates in real estate businesses.
Implementing systems and processes is crucial for scaling a business, especially in real estate where managing multiple units requires efficient rent collection and quick turnaround times for vacant units. The speaker shared how they addressed the challenge of rent collection by offering various payment options, such as PayNear Me and PO box rent deposits, reducing the property manager's responsibility. They also implemented a more aggressive approach to renting out units, offering incentives to their property manager to lease up units back-to-back, resulting in a 4% decrease in vacancy within four months. This example demonstrates how creating effective systems and offering incentives can lead to significant improvements in business operations and growth.
Finding the Right Real Estate Agent and Managing Tenants: Investors should prioritize a real estate agent who aligns with their objectives and provides necessary services. For multifamily investments, carefully run numbers to consider additional expenses. Evaluate tenant history before eviction process, and build long-term relationships while being prepared for tough decisions.
When it comes to working with a real estate broker or agent, investors should prioritize finding an agent who aligns with their objectives and provides the necessary services. If the relationship isn't working out, it may be time to switch, even if it means signing a shorter agreement or starting the process over with a new agent. Additionally, multifamily investments can offer greater financial benefits compared to single family rentals, but it's crucial to run the numbers carefully and consider the additional expenses. In the case of late rent payments, it's important to evaluate the tenant's history and potential excuses before starting the eviction process. In general, investors should aim to build long-term relationships with their agents and tenants, but also be prepared to make tough decisions when necessary.
Effective communication and preparation are crucial in managing tenants and investing in multifamily properties.: Serve eviction notices promptly, prioritize key metrics like rent, taxes, and DSCR, and ensure accurate financial information for successful property management and investment.
Effective communication and preparation are key when dealing with tenants in distress. The speaker emphasizes the importance of serving eviction notices promptly to secure legal rights and protect against potential lies or false claims. Additionally, when purchasing multifamily properties, the speaker prioritizes key metrics such as rent, taxes, and debt service cover ratio (DSCR) to ensure a profitable investment. DSCR is a measure of cash flow and helps determine if there is enough income to cover mortgage payments. The speaker also mentioned the importance of accurate financial information from sellers for underwriting purposes. Overall, effective communication, preparation, and financial analysis are crucial elements in both managing tenants and investing in multifamily properties.
Making Sacrifices is Key to Real Estate Success: Successful real estate investors make sacrifices and dedicate time to learning and growing in the industry through reading, traveling, and networking within a community.
Successful real estate investors make sacrifices and are willing to put in the hard work and dedication to achieve their goals. Brie Schmidt, a real estate investor with an impressive track record, emphasized the importance of self-sacrifice in her journey to success. She keeps a to-do list with goals like reading books on real estate strategies and traveling, which she considers essential for personal growth and business success. Brie also emphasized the value of being part of a community, like BiggerPockets, where she has learned a lot and connected with others in the industry. Overall, her advice for those looking to get started in real estate investing is to be willing to make sacrifices and put in the effort to learn and grow.
Consistency and long-term commitment are key to maintaining a strong market position: Investing in real estate requires consistency, long-term commitment, and expert guidance to navigate market fluctuations and achieve financial freedom.
Maintaining a strong position in the market requires consistency and long-term commitment, rather than trying to time the market. Josh Dorgan, from Bigger Pockets Radio, shared his perspective on this during a podcast episode where he discussed the uncertainty of the global financial system and the potential impact on his Greek falafels. Despite the market fluctuations and changing headlines, the ultimate goal remains the same: achieving financial freedom. To help investors navigate the real estate market and make informed decisions, BiggerPockets Agent Finder offers a solution by connecting them with investor-friendly agents. These local market experts can provide valuable insights and guidance, helping investors get deals and move closer to their financial goals. Remember, investment in real estate or any asset involves risk, so it's essential to consult with qualified advisors and only risk capital you can afford to lose.
