WEBVTT

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<v Speaker 1>Inspiring interviews with Today is Top Landlord, This is the

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<v Speaker 1>Rental Income Podcast, and now.

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<v Speaker 2>Damnly Greg, So what happened? You were homeless? Like you

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<v Speaker 2>lost everything and you were homeless? To tell me what happened?

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<v Speaker 1>Well, Yes, I was a veteran who got out of

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<v Speaker 1>the military and really could not cope in society, and

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<v Speaker 1>I did not know how to manage my money, so

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<v Speaker 1>I made really bad financial decisions. So at the age

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<v Speaker 1>of twenty five, I was sitting in a homeless shelter

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<v Speaker 1>wondering how I got there.

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<v Speaker 2>You eventually ended up getting your life turned around. And

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<v Speaker 2>how many rental properties do you have today?

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<v Speaker 1>I have thirty seven doors.

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<v Speaker 2>On the show today, we're going to hear the inspiring

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<v Speaker 2>story of how Greg went from having absolutely nothing to

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<v Speaker 2>building a rental portfolio of thirty seven units. Joining us

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<v Speaker 2>on the show today from Alabama is Greg Thompson. We'll

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<v Speaker 2>take a quick break to bank our sponsors. We'll come

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<v Speaker 2>right back and we'll talk to Greg. It's a lot

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<v Speaker 2>of work to find a really good rental property, and

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<v Speaker 2>when you actually find that property, you want to make

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<v Speaker 2>sure you're working with a lender that can get that

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<v Speaker 2>loan closed. The lender that I recommend is jay Ley

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<v Speaker 2>Ridge from Ridge Lending Group. She's a nationwide lender and

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<v Speaker 2>her specialty is helping investors finance rental properties. She has

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<v Speaker 2>a ton of loan programs and she can find something

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<v Speaker 2>customized to you for your situation. If you want to

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<v Speaker 2>find out more or you're ready to get started today,

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<v Speaker 2>just go to Ridge Lendinggroup dot com. That's our Idge

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<v Speaker 2>Lendinggroup dot com n MLS four two zero five six.

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<v Speaker 2>Are you thinking about investing in rental properties but maybe

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<v Speaker 2>you don't know where to start. My friends at Midsouth

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<v Speaker 2>Home Buyers make it simple. For over twenty three years,

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<v Speaker 2>they've been selling fully renovated, turnkey rental properties in Memphis

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<v Speaker 2>and Little Rock. We're talking new roofs, plumbing, electric, kitchens, bathrooms.

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<v Speaker 2>Everything is brand new and done right. And here's the

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<v Speaker 2>best part. Every property comes with a well qualified tenant

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<v Speaker 2>in place before you close. That means you get cash

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<v Speaker 2>flow from day one. Plus Midsouth continues to professionally manage

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<v Speaker 2>the property for you after the sale, and they back

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<v Speaker 2>it up with two powerful guarantees. You get a one

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<v Speaker 2>year total maintenance warranty and a lifetime occupancy guarantee. Personally,

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<v Speaker 2>I've bought five properties from them and I couldn't be happier.

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<v Speaker 2>If you want to talk to someone that's been through

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<v Speaker 2>the process, feel free to reach out to me. I'm

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<v Speaker 2>happy to answer any questions, or if you're ready to

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<v Speaker 2>get started, just go to midsouthhome Buyers dot com. That's

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<v Speaker 2>midsouthhome Buyers dot com. Ray, let's kind of figure out

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<v Speaker 2>what happens. So you're twenty five, you lost everything? How

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<v Speaker 2>did you end up on the streets? How does that happen? Like?

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<v Speaker 2>How did you become homeless?

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<v Speaker 1>I made a lot of bad financial decisions. I had

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<v Speaker 1>a car repossessed, all of my credit cards were in default,

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<v Speaker 1>I owed back child support, and I had not filed

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<v Speaker 1>federal taxes.

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<v Speaker 2>All right, So everything just kind of piled up. Everything

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<v Speaker 2>kind of went wrong at once, and you end up

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<v Speaker 2>like were you living on the street or were you

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<v Speaker 2>in a homeless shelter.

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<v Speaker 1>I was in a homeless shelter, and from there I

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<v Speaker 1>got an apartment in a really bad neighborhood. So the

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<v Speaker 1>rent was not very high.

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<v Speaker 2>Okay, all right, So then like how did you turn

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<v Speaker 2>things around? Like I gotta imagine your credit is probably shot.

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<v Speaker 2>I mean you you owe money to people, Like, how

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<v Speaker 2>did you turn things around?

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<v Speaker 1>Well? I started working two jobs seven days a week

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<v Speaker 1>to pay back all of the money that I owed.

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<v Speaker 2>Okay, okay, So then then, how how did you go

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<v Speaker 2>from there to actually buying your first property?

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<v Speaker 1>Well, through a series of jobs, I ended up overseas

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<v Speaker 1>and it wasn't until nine years later that I bought

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<v Speaker 1>my very first property.

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<v Speaker 2>How did you get the money to buy that property?

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<v Speaker 2>Was it just just saving up money over time?

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<v Speaker 1>It was. I was a government contractor overseas and I

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<v Speaker 1>was able to save up the money and invest it

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<v Speaker 1>in the stock market.

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<v Speaker 2>Okay, So now you've got some money, and tell me

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<v Speaker 2>about this first property.

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<v Speaker 1>I bought a three bedroom house that had a basement

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<v Speaker 1>apartment for a teenager, and I had them at a

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<v Speaker 1>bathroom and a kitchenette, and then I lived in the basement.

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<v Speaker 2>Okay, so you were house haacking. You were living in

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<v Speaker 2>the basement renting out the upstairs. Did that feel like

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<v Speaker 2>a sacrifice? You know, It's like you're living in the basement.

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<v Speaker 2>You could have been living upstairs and maybe renting out

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<v Speaker 2>the basement. Did that feel like a big sack sacrifice?

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<v Speaker 1>It did? Not feel like a sacrifice to me because

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<v Speaker 1>I was single. I also when I lived overseas, I

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<v Speaker 1>lived in a little one room apartment.

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<v Speaker 2>All right, so let's talk about your portfolio today. So

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<v Speaker 2>what does your portfolio look like?

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<v Speaker 1>Well, mostly single family homes. They're all small multifamilies, duplexus

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<v Speaker 1>and three units.

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<v Speaker 2>Okay, all right, so let's take a look at your numbers. Like,

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<v Speaker 2>so if you were to add up what you paid

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<v Speaker 2>for the properties, like, what's the total amount that you've invested.

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<v Speaker 1>The equity in the properties is one point three million.

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<v Speaker 1>The value of the properties is three million, one hundred

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<v Speaker 1>sixty two thousand, seven hundred and ninety three.

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<v Speaker 2>Wow, so you've created a lot of a lot of

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<v Speaker 2>equity there. How did you do that?

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<v Speaker 1>Like?

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<v Speaker 2>Were you buying properties and fixing them up or was

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<v Speaker 2>that the market just appreciating?

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<v Speaker 1>It was mostly the market appreciating. However, every time I

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<v Speaker 1>refinanced properties from one bank to another bank, they would

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<v Speaker 1>give me a property or two free and clear.

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<v Speaker 2>How did that happen?

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<v Speaker 1>As the properties appreciated, the bank would say, we only

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<v Speaker 1>need ten of these properties to satisfy the loan, So

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<v Speaker 1>you can have two of these properties free and clear.

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<v Speaker 2>Wow. Wow, that's pretty crazy. So how many properties did

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<v Speaker 2>you get free and clear by doing this?

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<v Speaker 1>At the beginning of twenty twenty five, I had three

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<v Speaker 1>properties free and clear, and I use those three properties

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<v Speaker 1>to buy eleven more properties.

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<v Speaker 2>I walked me through that. So you've got three properties

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<v Speaker 2>free and clear, and then you you, I guess, use

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<v Speaker 2>the EQ and those properties to buy other properties.

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<v Speaker 1>Yes, you can use a property as collateral as a

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<v Speaker 1>down payment on another property. And for example, one of

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<v Speaker 1>the properties was worth forty five thousand dollars. However, I

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<v Speaker 1>was buying a property for seventy five thousand dollars, so

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<v Speaker 1>that free and clear property was fifty percent of the

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<v Speaker 1>cost of the other properties, so I could use that

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<v Speaker 1>as a down payment.

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<v Speaker 2>Wow. Okay, so that's how you've been able to buy

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<v Speaker 2>so many properties is just by kind of moving equity

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<v Speaker 2>around between properties. Yes, wow, wow, that's pretty pretty awesome.

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<v Speaker 2>Now let's talk about finding the properties that you bought.

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<v Speaker 2>How did you find your properties?

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<v Speaker 1>Well, my competitive advantage is my property manager. My property

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<v Speaker 1>manager brings me deals whenever he hears about them, either

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<v Speaker 1>properties from people where he manages the properties, or if

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<v Speaker 1>he hears about other owners that he doesn't manage the properties.

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<v Speaker 1>He brings me those deals.

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<v Speaker 2>Okay, so how did you How did you work that

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<v Speaker 2>out with him?

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<v Speaker 1>Well? I met him through calling every property manager and

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<v Speaker 1>asking if anyone wants to sell their properties. I was

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<v Speaker 1>told that that was a good way to market for properties.

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<v Speaker 2>Yeah, yeah, I mean that's that's pretty good. I mean,

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<v Speaker 2>you figure a property manager knows a lot of other investors.

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<v Speaker 2>There's probably always people that need to sell for whatever reason,

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<v Speaker 2>and you know they're probably a good property if he's

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<v Speaker 2>managing them. So, like, is that the way it worked out?

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<v Speaker 1>Like?

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<v Speaker 2>Were the properties all good properties? Or did you have

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<v Speaker 2>any problem properties?

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<v Speaker 1>Well? I did not have any problem properties because I

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<v Speaker 1>trusted my property manager, and my property manager would tell

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<v Speaker 1>me what repairs were needed on any given property that

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<v Speaker 1>I bought.

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<v Speaker 2>Like, so, you know, I understand that the property manager

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<v Speaker 2>is bringing you deals, But with you living in the

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<v Speaker 2>same town, would it be difficult for you to manage

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<v Speaker 2>the properties yourself or do you just not want to

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<v Speaker 2>get involved in that?

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<v Speaker 3>I would never ever want to be a landlord property

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<v Speaker 3>manager again, because renters tell you sad stories such as,

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<v Speaker 3>if I pay you the rent in December, my child

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<v Speaker 3>won't have Christmas, right right?

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<v Speaker 2>Yeah, that makes sense. That that makes sense, all right.

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<v Speaker 2>So let's get back to the numbers a little bit here.

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<v Speaker 2>So you've created over a million dollars in equity by

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<v Speaker 2>buying these properties. Let's take a look at your cash flow. So, like,

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<v Speaker 2>how much rent do you bring in every month?

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<v Speaker 1>Well, in now, because I bought eleven more properties in

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<v Speaker 1>twenty twenty five, I bring in twenty four thousand dollars

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<v Speaker 1>a month, okay.

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<v Speaker 2>And how much are your mortgage payments?

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<v Speaker 1>My mortgage payments with insurance and taxes and everything is

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<v Speaker 1>sixteen thousand a month.

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<v Speaker 2>Okay, so you've got like eight thousand dollars leftover. Now,

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<v Speaker 2>what about I mean, you've got to pay your property manager, repairs,

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<v Speaker 2>whatever else comes up. How much cash flow do you

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<v Speaker 2>typically see in a month.

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<v Speaker 1>Well, typically it's only one thousand dollars a month in

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<v Speaker 1>cash flow. However, I'm expecting that to increase over.

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<v Speaker 2>Time as rents go up, both as rents.

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<v Speaker 1>Go up and as I refinance, especially with interest rates

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<v Speaker 1>coming down.

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<v Speaker 2>Yeah, so you bought eleven properties in the last year,

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<v Speaker 2>so your your rates are a bit higher. But as

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<v Speaker 2>those rates come down, your plan is to REFI and

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<v Speaker 2>that'll lower your payments.

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<v Speaker 1>Yes, And I want to tell you about the best

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<v Speaker 1>deal that I've ever done, which was in twenty twenty five.

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<v Speaker 1>My free and clear property was worth three hundred and

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<v Speaker 1>fifty thousand dollars and I used that to buy six

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<v Speaker 1>properties for five hundred thousand dollars and those six properties

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<v Speaker 1>were worth eight hundred thousand dollars.

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<v Speaker 2>Wow. All right, you got to walk me through that.

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<v Speaker 2>I'm a little bit confused on this, Like, so, like, explain,

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<v Speaker 2>explain what you did there.

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<v Speaker 1>Well, I used one of my free and clear properties,

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<v Speaker 1>which was a three unit, so it was worth two

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<v Speaker 1>hundred and fifty thousand dollars. I used that as collateral

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<v Speaker 1>to buy six properties that my property manager brought me

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<v Speaker 1>that were sold for five hundred thousand dollars, but the

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<v Speaker 1>appraisal was eight hundred thousand dollars. Wow.

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<v Speaker 2>Wow, I mean, so that's a ton of equity that

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<v Speaker 2>you created?

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<v Speaker 1>Did it is? I made three hundred thousand dollars in

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<v Speaker 1>one day?

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<v Speaker 2>Wait, so, like how did you do that? Like what

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<v Speaker 2>were you Did you just buy the properties at a

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<v Speaker 2>really good discount or did you improve those properties?

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<v Speaker 1>Well, the sellers of the properties were doing a ten

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<v Speaker 1>thirty one exchange, and so they needed to sell those properties.

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<v Speaker 1>My property manager already managed those properties. So my property

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<v Speaker 1>manager brokeer the whole deal.

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<v Speaker 2>Wow. So there wasn't really anything to do. And I

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<v Speaker 2>think what's great about the property manager you're managing those properties,

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<v Speaker 2>is like you really just signed some paperwork, Like there

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<v Speaker 2>wasn't really anything that you needed to do, Like the

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<v Speaker 2>tenants were already in place, like the rent was already

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<v Speaker 2>coming in, Like it was it really just that simple

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<v Speaker 2>that you signed some papers.

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<v Speaker 1>Well, it wasn't that simple. The first bank that I

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<v Speaker 1>went to denied my loan. They said that the rentals

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<v Speaker 1>did not bring in enough income, so they wanted me

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<v Speaker 1>to put down one hundred thousand dollars in cash in

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<v Speaker 1>addition to my rental property. Well that was the first bank.

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<v Speaker 1>I've never gone to a second bank. So I went

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<v Speaker 1>to a second bank and they only wanted me to

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<v Speaker 1>put down ten thousand dollars in addition to my rental properties.

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<v Speaker 1>So for ten thousand dollars out of pocket, I have

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<v Speaker 1>eight hundred thousand dollars worth of real estate.

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<v Speaker 2>Wow. Now let's talk about the cash flow. So you know,

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<v Speaker 2>some people might think a thousand dollars cash flow isn't enough,

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<v Speaker 2>But it seems like that's not like the biggest thing.

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<v Speaker 2>I mean that you're obviously doing creative deals. You've created

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<v Speaker 2>a ton of equity, So like, do you think that

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<v Speaker 2>cash flow is important? But you got to look at

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<v Speaker 2>the whole picture that you've created one point three million

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<v Speaker 2>dollars in equity in your portfolio.

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<v Speaker 1>Yes, And I'm not living on the cash flow. I

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<v Speaker 1>have multiple screens of income. So I have a PhD,

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<v Speaker 1>I teach in colleges as an adjunct, and I have

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<v Speaker 1>a federal government pension, So the rental income is not

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<v Speaker 1>my primary source.

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<v Speaker 2>Of venia, right, Okay, So yeah, I think that's an

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<v Speaker 2>important thing to keep in mind that you know, you're

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<v Speaker 2>you're playing a different game here than just cash flow,

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<v Speaker 2>where you're creating equity. And like you said, as the

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<v Speaker 2>rates come down, you're going to REFI that cash flow

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<v Speaker 2>is going to go up, and then you know rents

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<v Speaker 2>are going to go up over time. Let's talk about

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<v Speaker 2>the neighborhoods, Like, so, what are the neighborhoods like that

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<v Speaker 2>your rentals are in.

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<v Speaker 1>All of my rentals are in C minus neighborhoods, However,

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<v Speaker 1>in the future, I want to move up to be neighborhoods.

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<v Speaker 2>And why is that? Like, have you had any have

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<v Speaker 2>you had a lot of trouble with the sea properties?

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<v Speaker 1>I have not. My property managers and I have not

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<v Speaker 1>had any problems with these properties. I just want higher rents.

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<v Speaker 2>Now, take me back to when you were first getting

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<v Speaker 2>started in Alabama. Did you have any any trouble with

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<v Speaker 2>some of those early properties.

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<v Speaker 1>I did. My second property that I bought was a

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<v Speaker 1>four unit and I have since sold that one. That

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<v Speaker 1>one had nothing but problems. The water was everybody shared

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<v Speaker 1>the water bill, So what I like is separate units

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<v Speaker 1>paying their own electricity in their own water. That was

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<v Speaker 1>a problem, and there were always people moving out. So

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<v Speaker 1>one of the four apartments I could never ever keep rented.

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<v Speaker 2>Well, was there a reason why people wouldn't stay?

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<v Speaker 1>It was a Victorian building that was separated out into

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<v Speaker 1>four apartments, and so one of the apartments was on

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<v Speaker 1>the upstairs on the rear, and it was just very

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<v Speaker 1>very hard to get furniture in and for people to stay.

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<v Speaker 2>Yeah. Yeah, So was that hard to make money? Like

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<v Speaker 2>if like, how often were people leaving?

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<v Speaker 1>People would just disappear and if you have a low

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<v Speaker 1>income rental, you know that sometimes people just disappear.

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<v Speaker 2>Yeah, so they would be there, would they pay rent

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<v Speaker 2>for a few months and then leave or were they

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<v Speaker 2>even paying rent?

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<v Speaker 1>Yes, they would pay rent for a few months and

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<v Speaker 1>then they would just disappear and no one would even

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<v Speaker 1>know they were gone.

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<v Speaker 2>Oh my god. Yeah, that's that's the worst. So what

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<v Speaker 2>was it hard to make money? I mean, when you

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<v Speaker 2>think you have you have rent for a couple of months,

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<v Speaker 2>they leave, then you know, you've maybe got to fix

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<v Speaker 2>the property up a little bit, You've got to find

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<v Speaker 2>someone else to move in. That person says, for a

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<v Speaker 2>few months, the same thing happens again. Well, was it was?

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<v Speaker 2>It just challenging to make money?

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<v Speaker 1>It was, and it was even more challenging to sell

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<v Speaker 1>that property.

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<v Speaker 2>Uh yeah yeah. So did you end up losing money

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<v Speaker 2>on it when you sold it?

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<v Speaker 1>Well, I sold it for exactly what I paid for it,

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<v Speaker 1>where there was no appreciation over the course of three

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<v Speaker 1>or four years.

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<v Speaker 2>Yeah, that's so tough. So, like, looking back on it,

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<v Speaker 2>are there any signs that maybe you should have picked

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<v Speaker 2>up on or stuff that you would pick up on today,

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<v Speaker 2>like to avoid buying a property like that?

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<v Speaker 1>Well, my philosophy in the beginning was to build a

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<v Speaker 1>relationship with the property manager. So I bought that property

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<v Speaker 1>from the property manager. Every other property after that has

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<v Speaker 1>been a home run.

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<v Speaker 2>Like it's like the property manager is doing good by you,

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<v Speaker 2>that he's selling you good properties. Why do you think

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<v Speaker 2>he passed that one off when he obviously knew that

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<v Speaker 2>that property was going to be trouble. I mean, like,

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<v Speaker 2>I doubt that they had great tenants before you bought it,

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<v Speaker 2>and all of a sudden there was a bad tenant

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<v Speaker 2>in that unit, Like, don't you think that was probably

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<v Speaker 2>that turnover was probably going on for years.

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<v Speaker 1>That is true, But I wanted to establish a relationship

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<v Speaker 1>in this town, so I bought a bad property to

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<v Speaker 1>establish a relationship, which turned out over the years to

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<v Speaker 1>be very profitable.

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<v Speaker 2>Yeah yeah, yeah, So did you end up? I know

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<v Speaker 2>you sold it for what you paid for it, But

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<v Speaker 2>on a monthly basis, was that property losing you money?

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<v Speaker 1>Absolutely? It was the dog of my portfolio.

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<v Speaker 2>Wow. Wow, at least you're done with that now. And

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<v Speaker 2>so the other properties are all doing good. You're attracting

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<v Speaker 2>good tenants and they're all fairly simple.

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<v Speaker 1>Yes, And more importantly, is that they're all staying for

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<v Speaker 1>a long time. I have about twelve Section eight rentals.

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<v Speaker 1>If someone is on Section eight when I buy the property,

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<v Speaker 1>then they stay. But other than that, I do not

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<v Speaker 1>rent to Section eight. But any property that I buy

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<v Speaker 1>that does not have have a Section eight tenant in Alabama,

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<v Speaker 1>you do not have to rent to Section eight.

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<v Speaker 2>So why is it?

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<v Speaker 1>Like?

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<v Speaker 2>Why? Like why is that that a tenant that is

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<v Speaker 2>already there on Section eight is good? But adding a

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<v Speaker 2>new Section eight tenant isn't good? Like, what's the difference there?

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<v Speaker 1>The difference is the amount that you can charge for

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<v Speaker 1>market rent. And if a Section eight tenant is already

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<v Speaker 1>there when I buy the property, that is pretty much

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<v Speaker 1>a permanent tenant with very low turnover.

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<v Speaker 2>What an inspiring story to go from homeless to creating

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<v Speaker 2>over a million dollars in equity. It really just shows

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<v Speaker 2>you anything is possible with rental properties. I'd like to

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<v Speaker 2>thank our sponsor jayey Ridge for making today's episode possible.

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<v Speaker 2>If you're looking to buy a rental property, whether you're

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<v Speaker 2>just getting started or you want to add to your portfolio,

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<v Speaker 2>reach out to Chailey. She's a nation I lend her.

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<v Speaker 2>She has a ton of different loan programs and she

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<v Speaker 2>can find something that works for you. If you want

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<v Speaker 2>to track her down, you can go to her website.

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<v Speaker 2>It's ridgelendinggroup dot com NMLS four two zero five six.

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<v Speaker 2>Thank you so much for checking out the podcast today.

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<v Speaker 2>Make sure you hit that follow button. I put out

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<v Speaker 2>a new interview every single Tuesday, and if you're following

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00:21:26.559 --> 00:21:29.839
<v Speaker 2>the show, you'll get notified when the next episode comes out.

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<v Speaker 2>My name is Dan Lane and this has been the

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<v Speaker 2>Rental Income podcast.