Speaker 1: I leverage pretty much everything. I think that's the best
thing you can do for velocity. You know, the more
money I can keep in my pocket, the more I
can keep forward down payments. You know, whether it be
seller finance, we do a lot of creative finance, that
kind of thing. You usually need something at closing costs,
et cetera. So we leverage everything we can.
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Speaker 3: And welcome you are listening to and latching the Financial
Survival Network. I'm your host, Kerry Let. A lot of
people go into real estate, a lot of people are
successful at it. What I find fascinating about the state
that everybody finds their own entry. And person you're about
to hear from the newcomer to the show first time
on the show is name is Jefferson Calloway. Jefferson, you
are a vet, and thank you for your service and
you got into real estate investing while you were serving
the country.
Speaker 1: Correct, Yes, that's correct, and thank you very much for
the support. YEP. Joined in twenty sixteen, got out twenty
twenty one, and it was that last year that I
bought my very first rental property by accident. I was
just going to buy a house and live in it,
but moved away, decided to rent it out, and just
kept on going from there. The rest was history.
Speaker 3: That's great. So you got twenty seven. Now, like, how
what's your cash flow and your pre cash flow on
the property? Can give me a range up and tell
me the exact amount?
Speaker 1: Sure, I mean it's ranges, but I would say the average.
You know, I pay all my mortgages that are probably
a total of maybe fourteen thousand, but you know, the
properties in general bring in you know, eighteen to twenty
thousand in total, so after all expenses, I would say
four or five grand a month.
Speaker 3: That's pretty good. Pretty good? And yeah, so how do
you scale this up? How can you have one hundred disease?
Is there a particular type of property? Are you looking
for a military base near military basis?
Speaker 1: As that were? Yeah? I mean the first one turned
out so well. It was an enterprise Alabama, which is
near Fort Rutger, southern Alabama, right near the Florida border.
And I have since gotten a bigger, sing single family
portfolio there just because I love the area. The price
to rent ratios are great, they work for cash flow
really well. The fact that there's a lot of soldiers
cycling through is really just a bonus. I mean, you
can't act a fool as a soldier in rental property
or your command will find out. And there's always tenants
because there's always soldiers cycling through. But I don't make
that one of my criteria anywhere else. You know, like
I said, we're in seven different states now and I
have found that not a lot of other military but
you know, building your rental portfolio around a military base
would be pretty limiting. So I still invest in Alabama
near the base. But everything else is not near bases,
not near universities. It's really wherever you can find cash
flow in this in this climate. And in the beginning, yeah,
in the beginning it was mostly single family, but I
have since moved on very very hard into multifamily just
because the cost of maintenance and capital expenses per net
cash flow and per door are just less. I mean
you've got four or five six units under one roof.
That helps the same thing with HVAC. And also the
risk is lower. I mean if you have one or
two tenants missing, that's fine. I still get half the rent.
Single family, you go six months without a tenant, you
get zero. So definitely moving into multifamily and doesn't have
to be around military basis.
Speaker 3: What are you looking for, like, how do you what
kind of valuation do you do, and what type of
cash flow analysis?
Speaker 1: Sure, so I leverage pretty much everything. I think that's
the best thing you can do for velocity. You know,
the more money I can keep in my pocket, the
more I can keep for down payments. You know, whether
it be seller finance, we do a lot of creative finance,
that kind of thing. You usually need something at closing costs,
et cetera. So we leverage everything we can. But I
would say at this point it's really total gross monthly
rent for the property. Mine is twenty five to thirty
percent for expenses that's maintenance, capex, lawn care, utilities, et cetera, vacancy,
and then minus the mortgage payment whatever that would be.
PIPI and whatever's remaining is your ultimate net cash flow.
And my minimum is a few hundred dollars, maybe two
to three hundred dollars per door. So if I've got
a four plex, if I've got a five plex, it
better be bringing a net free cash flow eight hundred
to one thousand dollars a month for that one property.
And that's anywhere in the continental US. You know, that's
one of the best things about being remote investor. When
a wholesale or a realtor sends me a deal, I
don't care where it is. Texas, Ohio is another great
market we just got into. I can buy anywhere, so
I'm not limited to my local market. A lot more
opportunity that way, all right.
Speaker 3: So when you're looking at a property, what about the
condition of the property to age all of that? How
do you evaluate that?
Speaker 1: Yeah, I mean you always just allow for more of
a percentage of your gross monthly rent to accommodate older homes.
But the thing is a lot of multifamily they are
older homes, so I account for an additional five percent,
But ultimately even newer properties seventies, eighties, nineties, ohs, they
still have problems. I mean, most of the time, I
find that it's not the property itself that you end
up spending more money on. It's usually your utilities HVAC,
roof A lot of time to apply in this, you know,
stuff that has nothing to do with the age of
the home necessarily. So I don't mind buying age old stuff.
I just bought a six plex and Hagerstown that's over
one hundred years old. Haven't had many problems with it
at all. So we're buying pretty much everything we can
get our hands on that don't make them like that anymore?
Speaker 3: Do that?
Speaker 1: No, they do not. Not a lot of small multi
family in general anymore. It's mostly single family now.
Speaker 3: All right, So somebody look to get into the real estate, now,
somebody you do that on the street, What would you
tell about the house haack?
Speaker 1: Always, always, always, the best thing you can do, in
my opinion, is house sack. And for those who don't know,
that is just living in a home and renting out something.
It doesn't even have to necessarily be another unit like
a duplex, triplex, squad plex. It can be, and you
can get up to four units with any conventional loan.
Fha USDAVA doesn't matter what kind of loan. You can
get up to four units and live in one, run
out all the others. But you don't even have to
do that. I used to back when I was first starting,
I rented out rooms if I could. My current house,
I rent out a horse stall that's in the barn
in the backyard. You know, we are on a couple
of lakers now, I'll run out of anything to bring
in some cash flow. And even if you're not cash flowing,
like if you're not making money on the property, the
average American spends over thirty percent of their total net
income on their living expense. So even if you buy
just a duplex and your buddy rents out a step
to the other unit for twelve hundred a month and
your mortgage is fifteen hundred, Okay, your mortgage is now
only three hundred dollars. You just knocked out an enormous expense.
It's the same effect. So saving keeping your money, it's
the same thing as not spending it.
Speaker 3: Right, So that the idea, So you're in the market
for a new for a home, your first home, buy
a dude.
Speaker 1: Yeah yeah, yeah, or by a single family home. It's
got a lot of bedrooms.
Speaker 3: You know.
Speaker 1: The only downside is I understand you know a lot
of people have messaged me and said, you know what
if I've got four kids and a wife and they
don't want to You're right, that's that's more difficult. So
you can run out rooms. You don't want strangers living
next to your kids and your woman. She's not going
to like that either, But you know, I still stand by.
You can get a multi family, or you can figure
out how to rent something. Let them put parking r
V on the property if you've got acreage. A lot
of ways to get creative, and it may not be
very comfortable, but hey, so is being broke. So pick
your poisons.
Speaker 3: I like it. I like it all right. I know
that people out there are going to want to connect
with you on the web. I want to talk to you.
How do you How do we find you on the web? Connected?
Speaker 1: So you can message me on Instagram, Facebook, I'm at
Jefferson Callaway on all those I'm easy to find. You
can also email me Jefferson at Calcapital dot us. That's
the real estate company, so it's CALC A L Capital
c A P I T A L dot us. You
can always email me and I'm pretty busy. I've got
a Homer modeling company up here in Philadelphia, so I
can't respond to stuff. But I mean, if somebody wants
some paid consulting, I have no problem doing that. You know,
spread the wealth around a little bit.
Speaker 3: Appreciate you coming on the show. Got a question, comment
or Jefferson myself. Shoot me an email k L at
Kerry Left dot com and to find a link to
jefferson site to show that this interview on Financial Survival
Network dot com. And I'd ask you to sign up
for your pre newsletter.
Speaker 1: Join.
Speaker 3: I think we're up to about sixty thousand subscribers. Now
join those sixty thousand people get the newsletter for free. Jefferson.
Appreciate you coming on and we'll talk to you soon.
Speaker 1: Sounds great, Thanks Lochey, I really appreciate it.
Speaker 2: Thanks listening to Carrie Letz's Financial Survival Network your solution
to today's trying times. For the latest, go to Financial
Survivalnetwork dot com. Financial Survival Network now more than ever