WEBVTT 1 00:00:00.960 --> 00:00:05.200 The inspiring interviews with today is Top Landlords, This is 2 00:00:05.240 --> 00:00:10.679 the Rental Income Podcast and no damnly, Joe, you used 3 00:00:10.679 --> 00:00:14.080 to tell people that you were buying rental properties for freedom, 4 00:00:14.599 --> 00:00:17.199 but today you've kind of changed the way that you 5 00:00:17.199 --> 00:00:19.519 were thinking about that. Can you explain what you mean? 6 00:00:20.120 --> 00:00:22.719 And I did. I use freedom for a long time 7 00:00:22.960 --> 00:00:26.960 and now I've switched over to using flexibility. And because 8 00:00:27.000 --> 00:00:30.640 like I have a lot of responsibilities. I have responsibilities 9 00:00:30.679 --> 00:00:34.240 to my tenants, to my clients, and so I don't 10 00:00:34.280 --> 00:00:36.719 say I'm free, but man, I can be flexible in 11 00:00:36.759 --> 00:00:38.960 my time, and I you know, I can do a 12 00:00:39.000 --> 00:00:41.719 lot of stuff. I went on a ten plus day 13 00:00:41.799 --> 00:00:45.039 trip with a few days notice to Florida and I 14 00:00:45.119 --> 00:00:47.679 kept everything running smoothly from out there. I did work 15 00:00:47.719 --> 00:00:50.159 a little bit, but it was a great family time. 16 00:00:50.320 --> 00:00:53.880 And so that's the type of flexibility slash freedom that 17 00:00:53.920 --> 00:00:54.880 real estate can give you. 18 00:00:55.240 --> 00:00:58.000 Joe was with us on the podcast about a year ago, 19 00:00:58.159 --> 00:01:00.240 and on the show today, we're going to follow up 20 00:01:00.240 --> 00:01:03.240 with Joe see how he's been doing with growing his 21 00:01:03.359 --> 00:01:08.079 rental portfolio in the last year. Joe has bought four properties. 22 00:01:08.599 --> 00:01:10.239 On the show today, we're going to figure out how 23 00:01:10.239 --> 00:01:13.439 he found them, how he financed them. When we talked 24 00:01:13.439 --> 00:01:15.680 to Joe last he was using his hee lock to 25 00:01:15.719 --> 00:01:19.120 buy properties. We'll see if that's still working today and 26 00:01:19.239 --> 00:01:23.000 we'll talk more about how Joe is getting time flexibility 27 00:01:23.079 --> 00:01:26.560 from investing in rental properties. Joining us on the show 28 00:01:26.560 --> 00:01:30.040 today from Kansas City is Joe Blackshear. We'll take a 29 00:01:30.159 --> 00:01:32.959 quick break to thank our sponsors, will come right back 30 00:01:33.079 --> 00:01:35.359 and we'll talk to Joe. It's a lot of work 31 00:01:35.400 --> 00:01:37.760 to find a really good rental property, and when you 32 00:01:37.799 --> 00:01:40.200 actually find that property, you want to make sure you're 33 00:01:40.200 --> 00:01:42.840 working with a lender that can get that loan closed. 34 00:01:43.319 --> 00:01:46.359 The lender that I recommend is jay Lee Ridge from 35 00:01:46.480 --> 00:01:50.640 Ridge Lending Group. She's a nationwide lender and her specialty 36 00:01:50.760 --> 00:01:54.359 is helping investors finance rental properties. She has a ton 37 00:01:54.400 --> 00:01:57.480 of loan programs and she can find something customized to 38 00:01:57.599 --> 00:02:00.560 you for your situation. If you want to find out 39 00:02:00.560 --> 00:02:02.840 more or you're ready to get started today, just go 40 00:02:02.920 --> 00:02:08.439 to Ridge Lendinggroup dot com. That's our Idge Lendinggroup dot 41 00:02:08.479 --> 00:02:12.159 com n MLS four two zero five six. Are you 42 00:02:12.280 --> 00:02:15.719 thinking about investing in rental properties, but maybe you don't 43 00:02:15.759 --> 00:02:19.599 know where to start? My friends at Midsouth home Buyers 44 00:02:19.680 --> 00:02:23.039 make it simple. For over twenty three years, they've been 45 00:02:23.080 --> 00:02:27.879 selling fully renovated, turnkey rental properties in Memphis and Little Rock. 46 00:02:28.439 --> 00:02:33.520 We're talking new roofs, plumbing, electric, kitchens, bathrooms. Everything is 47 00:02:33.599 --> 00:02:36.759 brand new and done right. And here's the best part. 48 00:02:37.199 --> 00:02:40.840 Every property comes with a well qualified tenant in place 49 00:02:40.919 --> 00:02:44.240 before you close. That means you get cash flow from 50 00:02:44.319 --> 00:02:48.759 day one. Plus, Midsouth continues to professionally manage the property 51 00:02:48.840 --> 00:02:51.599 for you after the sale, and they back it up 52 00:02:51.639 --> 00:02:55.439 with two powerful guarantees. You get a one year total 53 00:02:55.479 --> 00:03:01.439 maintenance warranty and a lifetime occupancy guarantee. Personally, I've bought 54 00:03:01.479 --> 00:03:04.759 five properties from them and I couldn't be happier. If 55 00:03:04.840 --> 00:03:07.080 you want to talk to someone that's been through the process, 56 00:03:07.159 --> 00:03:09.680 feel free to reach out to me. I'm happy to 57 00:03:09.759 --> 00:03:12.719 answer any questions or if you're ready to get started, 58 00:03:13.280 --> 00:03:17.639 just go to midsouthhome Buyers dot com. That's midsouthhome Buyers 59 00:03:17.680 --> 00:03:18.360 dot com. 60 00:03:18.439 --> 00:03:18.719 Joe. 61 00:03:18.719 --> 00:03:22.039 For anyone that maybe didn't hear your first interview on 62 00:03:22.400 --> 00:03:26.240 the podcast, can you remind us what does your portfolio 63 00:03:26.280 --> 00:03:26.680 look like? 64 00:03:28.000 --> 00:03:31.240 Well, it's you know, we're probably up to just over 65 00:03:31.360 --> 00:03:35.000 thirty doors. You know, we're probably I don't know how 66 00:03:35.039 --> 00:03:36.759 detailed you want me to get, but you know we're 67 00:03:36.919 --> 00:03:43.759 around forty forty forty five percent leveraged just single family homes, 68 00:03:44.240 --> 00:03:48.879 you know, probably four or five duplexes all in in 69 00:03:48.919 --> 00:03:53.520 and around the surrounding areas of Kansas City, Missouri. And 70 00:03:54.400 --> 00:03:58.800 we started eight years ago, and really we've got some 71 00:03:58.879 --> 00:04:00.840 great loans on quite a few of them. So they're 72 00:04:00.879 --> 00:04:02.960 they're cash flowing pretty well. We're pretty happy with it. 73 00:04:03.719 --> 00:04:05.680 And what kind of neighborhoods do you buy in? 74 00:04:07.360 --> 00:04:09.800 We have gone kind of where the deals have let 75 00:04:09.879 --> 00:04:13.000 us led us to. I would say, as we have progressed, 76 00:04:13.080 --> 00:04:17.399 we've gotten into nicer homes, little a little little higher 77 00:04:17.759 --> 00:04:20.480 you know, price point of homes just makes it a 78 00:04:20.480 --> 00:04:25.160 little easier to rent, a little easier for ownership what 79 00:04:25.279 --> 00:04:28.639 I call less brain damage, you know, like staying out 80 00:04:28.680 --> 00:04:32.040 of the urban core where crime could be a consideration. 81 00:04:32.240 --> 00:04:34.839 So but so yeah, we have moved out of some 82 00:04:34.879 --> 00:04:37.560 of those areas. And but really just the Kansas City, 83 00:04:37.759 --> 00:04:39.480 I would say suburbs. 84 00:04:40.800 --> 00:04:40.879 B. 85 00:04:41.439 --> 00:04:44.639 You know, I hear people grade grade areas like B 86 00:04:44.639 --> 00:04:47.839 B plus blue collar neighborhoods and above. 87 00:04:48.680 --> 00:04:51.040 So what made you decide to go on a buying spree? 88 00:04:51.120 --> 00:04:54.879 Mean adding four properties in a short period of time. 89 00:04:54.879 --> 00:04:56.759 I mean that that's a lot of work. Like what 90 00:04:56.959 --> 00:04:58.360 made you want to do that? 91 00:05:00.199 --> 00:05:02.040 My wife might just say I'm crazy. I don't know, 92 00:05:02.160 --> 00:05:06.360 but uh, I think. I think I just wasn't happy 93 00:05:06.399 --> 00:05:10.279 with with with our cash flow, to be totally honest, 94 00:05:10.319 --> 00:05:12.800 I wanted to get it back up to the levels 95 00:05:12.800 --> 00:05:15.360 it was at when I retired with twenty five doors. 96 00:05:16.000 --> 00:05:17.959 And a big part of that was, you know, I 97 00:05:17.959 --> 00:05:21.399 think every landlord, if you will, or you know, housing 98 00:05:21.439 --> 00:05:24.639 provider are feeling the crunch on their cash flow based 99 00:05:24.639 --> 00:05:28.680 on you know, not only just the cost of things, 100 00:05:29.439 --> 00:05:32.800 but the in my area specifically, and I'm sure others, 101 00:05:32.839 --> 00:05:37.519 property taxes have gone rampant with the increases, and then 102 00:05:37.639 --> 00:05:40.800 also the cost of insurance, and so those have really 103 00:05:41.000 --> 00:05:43.519 ate into the profit margins. And so you got to 104 00:05:43.519 --> 00:05:46.680 own more doors obviously to make the same amount of money. 105 00:05:46.720 --> 00:05:50.639 Interesting, Okay, so because things are more expensive, you just 106 00:05:50.680 --> 00:05:53.759 have to buy more properties to be at the same level. 107 00:05:54.240 --> 00:05:58.079 Yeah, unless you're you're in a lucky situation and you're 108 00:05:58.120 --> 00:06:00.279 able to you know, keep your rents kind of in 109 00:06:00.439 --> 00:06:03.959 pace with those increase of cost and and and you know, 110 00:06:04.120 --> 00:06:06.439 so it's it's probably a happy medium of doing both. 111 00:06:06.639 --> 00:06:10.079 So deals are hard to come by right now. There's 112 00:06:10.120 --> 00:06:12.360 just not a lot on the market. How did you 113 00:06:12.519 --> 00:06:13.720 find your properties? 114 00:06:14.560 --> 00:06:16.879 So, you know, I I am a real estate agent, 115 00:06:17.000 --> 00:06:19.399 so I have kind of an insight as far as 116 00:06:19.439 --> 00:06:23.600 working the MLS. So and I and in my overall portfolio, 117 00:06:23.720 --> 00:06:25.600 I do have quite a few from the MLS. So 118 00:06:25.680 --> 00:06:28.519 there are you know, there are diamonds out there that 119 00:06:28.560 --> 00:06:31.079 you can find, you can mine, so to speak. And 120 00:06:31.160 --> 00:06:35.240 I use a I use a real specific key word 121 00:06:35.319 --> 00:06:38.800 search that I have set up. But but really though, 122 00:06:38.839 --> 00:06:43.800 having great relationships with wholesalers has has been huge. I'm 123 00:06:43.800 --> 00:06:48.160 looking at the four that I purchased specifically, one was 124 00:06:48.199 --> 00:06:50.639 off the MLS. It was, you know, closed before the 125 00:06:50.800 --> 00:06:54.519 end of the year. You know, this lady had didn't 126 00:06:54.519 --> 00:06:56.319 want to have two mortgages or at least was moving 127 00:06:56.360 --> 00:06:57.800 into a home, so you know, we were able to 128 00:06:57.800 --> 00:07:00.800 get that home at a good price. But the other 129 00:07:00.839 --> 00:07:04.160 ones I mentioned relationships, I'm looking here and two of 130 00:07:04.199 --> 00:07:06.319 them were from the same wholesaler, and then another one 131 00:07:06.439 --> 00:07:09.160 is just from a from a wholesaler who you know, 132 00:07:09.199 --> 00:07:10.800 I've been friends with both these guys for a real 133 00:07:10.839 --> 00:07:13.000 long time. We start to do more and more business. 134 00:07:14.120 --> 00:07:18.639 So with doing four rehabs, were they back to back, 135 00:07:18.800 --> 00:07:21.959 like were you constantly working on a property? 136 00:07:22.639 --> 00:07:26.199 No? No, because I think they started around October and 137 00:07:26.279 --> 00:07:31.279 probably finished around February. So some of them did overlap, 138 00:07:31.560 --> 00:07:35.600 are a different phases of different stages, and in you know, 139 00:07:35.720 --> 00:07:38.199 some cases, I had a different crew work on one 140 00:07:38.279 --> 00:07:42.079 and the same guys work on the other three. So yeah, 141 00:07:42.160 --> 00:07:45.319 I mean, I'm not such a big operator that I 142 00:07:45.480 --> 00:07:47.360 that I do a whole lot of things all at 143 00:07:47.360 --> 00:07:50.759 the same time, like that multiple properties at the same time, 144 00:07:50.759 --> 00:07:54.000 but they just all worked really well where one's finishing, 145 00:07:54.079 --> 00:07:57.079 ones coming online, and I got to a point where 146 00:07:57.079 --> 00:07:59.920 I had, you know, multiple people that I was keeping busy, 147 00:08:00.279 --> 00:08:02.360 so you know, I made a point to go out 148 00:08:02.399 --> 00:08:04.519 and find these deals so I could keep them going. 149 00:08:04.560 --> 00:08:06.439 And it gave me the confidence knowing that I had 150 00:08:06.519 --> 00:08:09.959 them to help me with these properties get them ready. 151 00:08:10.000 --> 00:08:14.959 So I'm I'm I'm very grateful at the at the 152 00:08:15.000 --> 00:08:16.920 whole process that I that we went through over the 153 00:08:16.959 --> 00:08:20.120 winter with these these gentlemen that came on board with us. 154 00:08:20.399 --> 00:08:22.439 So talk to me about the financing. I know when 155 00:08:22.480 --> 00:08:25.319 we talked to you last time, you would use your 156 00:08:25.439 --> 00:08:28.399 heelock to buy a lot of properties. Is that still 157 00:08:28.439 --> 00:08:30.639 what you were doing with these properties? 158 00:08:32.080 --> 00:08:36.879 Yeah? So looking at these, I think I used my 159 00:08:37.080 --> 00:08:40.919 own lines of credit that we had, you know, for 160 00:08:41.039 --> 00:08:43.480 either paid off properties, we put lines of credit on them, 161 00:08:44.039 --> 00:08:46.799 So I use those for probably at least half of them, probably, 162 00:08:46.840 --> 00:08:51.000 and then a couple others I used just private, private 163 00:08:51.080 --> 00:08:53.879 hard money lending for you know, short term loans to 164 00:08:53.879 --> 00:08:56.360 to do the rehab and to and to buy the 165 00:08:56.399 --> 00:08:59.720 property and then and then you know, eventually pay the 166 00:08:59.799 --> 00:09:03.960 pay those individuals off once we put long term financing 167 00:09:03.960 --> 00:09:07.120 on the rehab properties. But yeah, definitely the lines of 168 00:09:07.159 --> 00:09:12.080 credit or what propelled the growth at this timeframe. 169 00:09:12.559 --> 00:09:16.679 That's a really smart use of equity. So you have 170 00:09:16.840 --> 00:09:19.799 rental properties that you've paid off, but then you have 171 00:09:19.840 --> 00:09:22.559 lines of credit on them so that you can access 172 00:09:22.600 --> 00:09:28.360 that equity to do burs or to buy more properties. 173 00:09:28.799 --> 00:09:32.919 Yeah, exactly. And you know, this may be an introduction 174 00:09:33.000 --> 00:09:36.360 of a new strategy for your listeners, but something I 175 00:09:36.360 --> 00:09:38.480 would encourage everybody to take a look at when they're 176 00:09:38.480 --> 00:09:40.840 trying to do things like this. Or payoff debt or 177 00:09:42.279 --> 00:09:45.960 you know, taking on debt to eventually you know, it's 178 00:09:45.960 --> 00:09:49.159 an asset, but is a strategy that we've used for 179 00:09:49.279 --> 00:09:53.039 years called velocity banking, and so it's just kind of 180 00:09:53.039 --> 00:09:57.000 a debt weapon, so to speak, or an asset accumulation 181 00:09:57.879 --> 00:10:01.840 net worth growth kind of a strategy where you use 182 00:10:01.960 --> 00:10:06.559 lines of credit to attack your debt or to make 183 00:10:06.600 --> 00:10:08.879 purchases and then and then you put all of your 184 00:10:08.879 --> 00:10:14.799 cash flow against that line of credit to bring down 185 00:10:14.840 --> 00:10:18.360 the average daily balance. So you're paying the least amount 186 00:10:18.399 --> 00:10:21.399 of interest because all of your cash flow sits against 187 00:10:21.440 --> 00:10:23.399 that line of credit, and then you can turn around 188 00:10:23.440 --> 00:10:25.039 and use it if you need it to pay bills 189 00:10:25.080 --> 00:10:29.559 throughout the month. And so that's how we've been able 190 00:10:29.600 --> 00:10:32.679 to use the line of credit while we were working 191 00:10:32.840 --> 00:10:36.320 W two's too, both my wife and my wife and I, 192 00:10:36.399 --> 00:10:38.799 you know, we each at one time had wt's. I 193 00:10:38.840 --> 00:10:42.000 left my job in twenty twenty two. But we used 194 00:10:42.159 --> 00:10:45.120 our lines of credit to kind of grow our portfolio 195 00:10:45.159 --> 00:10:50.879 slow and steady, and you know, nothing spectacular. She's a teacher, 196 00:10:51.519 --> 00:10:53.919 I was a retailer, and we just kind of did 197 00:10:53.919 --> 00:10:56.879 it slow and steady, putting twenty five percent down on 198 00:10:57.759 --> 00:10:59.840 different properties, you know, some of them we did create 199 00:10:59.840 --> 00:11:03.919 a but and then over time you have this larger 200 00:11:03.960 --> 00:11:05.879 cash flow to pay those lines of credit down and 201 00:11:05.879 --> 00:11:08.200 then just keep keep circulating that money. 202 00:11:08.480 --> 00:11:11.600 I love it. Yeah, that's so so exciting what you 203 00:11:11.639 --> 00:11:15.960 guys have done. So all right, now with the properties 204 00:11:16.480 --> 00:11:20.440 once they were all fixed up, did you get individual 205 00:11:20.480 --> 00:11:24.000 mortgages on all four properties or did you get a 206 00:11:24.000 --> 00:11:25.799 blanket mortgage for everything? 207 00:11:26.679 --> 00:11:30.240 So we got a blanket mortgage like a portfolio loan 208 00:11:31.639 --> 00:11:34.840 on those four properties, and then I had three other 209 00:11:35.159 --> 00:11:38.960 rentals that were due in the same year or some 210 00:11:39.039 --> 00:11:40.679 of them. In some cases, you know, in a couple 211 00:11:40.639 --> 00:11:43.120 of months that were you know, they were like a 212 00:11:44.399 --> 00:11:47.240 three year note if you will, like a balloon payment. 213 00:11:47.279 --> 00:11:49.000 I had balloon payments coming up on three of our 214 00:11:49.039 --> 00:11:53.039 properties with smaller banks. So I ended up just doing 215 00:11:53.039 --> 00:11:58.960 a seven seven property portfolio loan all in one and 216 00:11:59.240 --> 00:12:01.519 rolled them all into into one, so there's one payment. 217 00:12:01.639 --> 00:12:05.279 What's the advantage to having one mortgage for all the 218 00:12:05.320 --> 00:12:09.519 properties versus having seven individual mortgages. 219 00:12:11.080 --> 00:12:14.159 Well, it definitely helps you stay like organized. And in 220 00:12:14.200 --> 00:12:20.240 this case, the finance company lender, they required us to 221 00:12:20.279 --> 00:12:23.279 create a new LLC and hold them all under that 222 00:12:23.320 --> 00:12:27.960 one LLC and create a new bank account. So the 223 00:12:28.000 --> 00:12:30.600 advantage there is asset protection for one both for the 224 00:12:30.600 --> 00:12:34.440 bank and for ourselves, meaning like these seven properties, we 225 00:12:34.440 --> 00:12:38.840 were now not in a overall portfolio with all of 226 00:12:38.879 --> 00:12:42.320 our other properties. So that is an advantage in itself, 227 00:12:42.399 --> 00:12:46.120 just not getting too many homes inside of one LLC. 228 00:12:47.360 --> 00:12:51.320 So I guess the other advantages, you know, like it's 229 00:12:51.360 --> 00:12:56.120 one application, one kind of underwriting process, went out with 230 00:12:56.159 --> 00:12:58.120 the appraisal and did all of them in the matter 231 00:12:58.200 --> 00:13:01.919 of a half a day. So it's just there's just 232 00:13:01.960 --> 00:13:06.200 synergies and doing them all together, and you know, so 233 00:13:06.200 --> 00:13:08.840 I'd say that's the biggest thing. You probably get some 234 00:13:09.840 --> 00:13:14.519 savings on different fees, you know, because you're doing so 235 00:13:14.559 --> 00:13:18.080 many at once that sort of thing, So there are 236 00:13:18.120 --> 00:13:20.960 some some savings up front too. 237 00:13:21.000 --> 00:13:24.360 I think, now, what would happen if you wanted to 238 00:13:24.480 --> 00:13:28.480 sell one of the properties. You know, maybe for whatever reason, 239 00:13:28.519 --> 00:13:31.559 a property isn't working out, or maybe it appreciates a 240 00:13:31.559 --> 00:13:33.799 lot and you just want to capture some of that equity. 241 00:13:34.399 --> 00:13:37.200 Could you sell off one of the properties and still 242 00:13:37.320 --> 00:13:38.120 keep the mortgage. 243 00:13:39.279 --> 00:13:41.440 Yeah, So those are definitely things that you want to 244 00:13:41.480 --> 00:13:44.240 look into the terms of your loan, and so for 245 00:13:44.320 --> 00:13:48.159 mind specifically, most of these types of loans, because there's 246 00:13:48.159 --> 00:13:50.480 a lot of costs up front for the lender. They 247 00:13:50.600 --> 00:13:54.639 obviously make their money through the interest payments. There there's 248 00:13:54.679 --> 00:13:58.519 a pre payment penalty, so you got to look at 249 00:13:58.519 --> 00:14:02.320 those terms, those details closely. In my case, I could 250 00:14:02.360 --> 00:14:04.360 have paid a higher interest rate and not had a 251 00:14:04.399 --> 00:14:08.440 pre payment penalty attached to these properties. But for what 252 00:14:08.480 --> 00:14:12.559 we got, it's a step down. Meaning a real popular 253 00:14:12.639 --> 00:14:15.320 one is five four three two one. So you sell 254 00:14:15.360 --> 00:14:17.240 it in the first year, it's a five percent pre 255 00:14:17.279 --> 00:14:20.840 payment penalty, and then each subsequent year four three two one. 256 00:14:21.559 --> 00:14:24.080 So just really pay attention to the terms of your 257 00:14:24.080 --> 00:14:27.200 loan and ask those questions what's best for you. For me, 258 00:14:27.240 --> 00:14:29.679 I'm a long term buy and hold. I just rehabbed 259 00:14:29.679 --> 00:14:33.480 all these properties. I'm not you know, I don't foresee 260 00:14:33.559 --> 00:14:37.519 me selling any of them. But what in most cases 261 00:14:37.519 --> 00:14:39.879 in a portfolio loan like this, if you did sell 262 00:14:39.919 --> 00:14:43.840 one off, they would kind of grow rate the value 263 00:14:43.879 --> 00:14:47.559 that was inside of that loan, and then just recalculate 264 00:14:47.759 --> 00:14:51.320 the payment and recalculate the overall loan you'd pay back 265 00:14:51.360 --> 00:14:55.000 a portion of the underlying debt that's in the portfolio, 266 00:14:55.039 --> 00:14:59.200 and then probably you know, so, yeah, that's kind of 267 00:14:59.039 --> 00:15:02.799 the thing. And because of that that's seven well that 268 00:15:03.120 --> 00:15:05.480 seven percent interest, you know, we definitely wouldn't sell them 269 00:15:05.480 --> 00:15:08.120 in the first year because that could mean you know, 270 00:15:08.200 --> 00:15:11.240 over ten thousand dollars on a two hundred thousand dollars property. 271 00:15:12.320 --> 00:15:14.919 Now, let's get into to some numbers here, right. I 272 00:15:15.000 --> 00:15:18.600 want to see how much how much revenue you're you're 273 00:15:18.600 --> 00:15:22.960 creating here? So for the four properties that you did 274 00:15:23.000 --> 00:15:26.840 the Burson how much rent are you bringing in every month? 275 00:15:26.919 --> 00:15:28.440 Now off those properties? 276 00:15:30.399 --> 00:15:34.159 Okay? So off of those four properties, it's sixty five 277 00:15:34.279 --> 00:15:35.200 hundred okay. 278 00:15:35.279 --> 00:15:39.399 And then all seven properties in the loan, how much 279 00:15:39.720 --> 00:15:41.039 how much revenue is that. 280 00:15:42.919 --> 00:15:45.759 Ten thousand, four hundred and thirty okay? 281 00:15:46.080 --> 00:15:49.399 And then after you pay the mortgage? How much how 282 00:15:49.440 --> 00:15:51.840 much is left over after the mortgage payment. 283 00:15:52.120 --> 00:15:56.240 After mortgage tax and insurance it's twenty three hundred okay? 284 00:15:56.720 --> 00:15:58.720 And then how does it seem like does it. 285 00:15:58.679 --> 00:16:01.919 Seem like a lot? But you know, in this case, 286 00:16:01.960 --> 00:16:05.159 we we h with the financing out that we did, 287 00:16:05.159 --> 00:16:08.480 we did take a max cash out, so we virtually 288 00:16:08.480 --> 00:16:10.440 don't have, like, you know, really a lot of money 289 00:16:10.440 --> 00:16:11.519 into these properties at this. 290 00:16:11.480 --> 00:16:13.840 Point, which is great because you got all your money 291 00:16:13.840 --> 00:16:16.639 back to pay down your line to credits and now 292 00:16:16.720 --> 00:16:19.480 you can do it again if you want, which is uh, 293 00:16:19.679 --> 00:16:21.480 which is really good. So I mean, I think the 294 00:16:21.559 --> 00:16:26.519 key here is that you bought these properties. Is it 295 00:16:26.600 --> 00:16:28.600 no money out of pocket or did you put a 296 00:16:28.679 --> 00:16:30.480 little money into the properties. 297 00:16:31.399 --> 00:16:37.639 Yeah, So we refinanced all seven properties and got a 298 00:16:37.720 --> 00:16:43.360 loan for one million, thirty four thousand. The appraisal on 299 00:16:43.440 --> 00:16:46.080 all seven properties that we got done was was one 300 00:16:46.159 --> 00:16:48.240 point four million, so we have a lot of equity 301 00:16:48.320 --> 00:16:51.279 right there. Yeah, and so we were able to you know, 302 00:16:51.320 --> 00:16:56.279 and we were all in all in at nine hundred thousand, 303 00:16:56.480 --> 00:16:59.399 so you know, I walked away with about two hundred 304 00:16:59.399 --> 00:17:03.279 and sixty thou which paid back any credit card we 305 00:17:03.320 --> 00:17:05.680 had materials on it, It paid off all of our 306 00:17:05.720 --> 00:17:12.160 lines of credit. And so yeah, going forward, if we 307 00:17:12.279 --> 00:17:14.680 wanted to just focus on those four properties, which I 308 00:17:14.680 --> 00:17:17.480 think is for the exercise, the way to go, we 309 00:17:17.559 --> 00:17:20.599 have two hundred and seventy seven thousand dollars in equity 310 00:17:20.680 --> 00:17:23.359 just on those four properties we bought since October to 311 00:17:23.680 --> 00:17:27.440 February the earlier this year, in twenty twenty five. 312 00:17:27.680 --> 00:17:31.119 So you've you've created by doing these four burd properties, 313 00:17:31.720 --> 00:17:37.680 you've created two hundred and seventy seven thousand dollars in equity. Yeah, correct, correct, 314 00:17:37.680 --> 00:17:40.640 that's awesome. And you're in a market or in an 315 00:17:40.680 --> 00:17:44.839 area where the prices are appreciating, right, So these properties 316 00:17:44.920 --> 00:17:48.559 will if everything continues to go well with the real 317 00:17:48.680 --> 00:17:52.920 estate market, these properties should continue to appreciate past that. 318 00:17:54.319 --> 00:17:57.160 Yeah, I mean these are in some good areas, ones 319 00:17:57.240 --> 00:18:01.759 in well least Summit, Raytown, Liberty, Independence, all suburbs of 320 00:18:01.880 --> 00:18:05.240 Kansas City. I think, Yeah, anywhere between four to seven 321 00:18:05.279 --> 00:18:09.240 percent per year is is achievable in appreciation? 322 00:18:09.559 --> 00:18:13.000 Incredible? All right, So let's go back to the monthly 323 00:18:13.079 --> 00:18:16.319 cash flow. So you said you have twenty three hundred 324 00:18:16.359 --> 00:18:20.480 dollars a month after you pay the mortgage, which includes 325 00:18:20.599 --> 00:18:26.279 taxes and insurance. What about like budgeting for repairs and vacancy. 326 00:18:26.319 --> 00:18:27.319 How do you do that? 327 00:18:27.799 --> 00:18:31.599 So I kind of use, first of all, that's not 328 00:18:31.680 --> 00:18:34.480 my forte the whole budgeting thing as it pertains to that, 329 00:18:35.640 --> 00:18:38.000 but I kind of use, like, just know that about 330 00:18:38.039 --> 00:18:43.000 twenty percent of our overall revenue should should be accounted 331 00:18:43.039 --> 00:18:47.279 to handle the repairs capital. You know, maybe taxes on 332 00:18:47.279 --> 00:18:50.799 aren't captured inside of alone. So I just kind of 333 00:18:50.839 --> 00:18:55.519 count on twenty percent of all revenue not being available 334 00:18:55.640 --> 00:18:59.640 to spend, meaning you know, to be in that it's 335 00:18:59.680 --> 00:19:02.119 just going to be used for the throughout the month 336 00:19:02.599 --> 00:19:04.720 each month for repairs and other things. 337 00:19:05.119 --> 00:19:08.559 And you're looking at that in your whole portfolio, not 338 00:19:08.640 --> 00:19:13.480 necessarily just for these properties. That that that twenty percent number, 339 00:19:14.039 --> 00:19:20.079 that's for all your rental income, for all your rentals. Yes, yeah, awesome. 340 00:19:20.640 --> 00:19:24.880 And you also self manage and it seems like you 341 00:19:24.880 --> 00:19:28.720 you run a pretty pretty mean and lean operation, so 342 00:19:29.359 --> 00:19:32.440 you're maybe able to do this maybe a little bit 343 00:19:32.519 --> 00:19:34.640 cheaper than someone else. 344 00:19:34.519 --> 00:19:38.039 Right, Yeah, I do self manage, and yeah probably obviously 345 00:19:38.079 --> 00:19:40.039 I don't have like eight, you know, seven to eight 346 00:19:40.359 --> 00:19:46.279 to ten percent to a property management company, so that 347 00:19:46.279 --> 00:19:50.640 that does help overall. Just looking at our overall portfolio, 348 00:19:50.720 --> 00:19:52.319 and you know, I probably have to update this, but 349 00:19:52.359 --> 00:19:54.599 it's it's up near fifty thousand dollars a month in 350 00:19:54.920 --> 00:19:59.759 rental income and you know, somewhere around thirty three thousand 351 00:19:59.759 --> 00:20:03.799 and monthly mortgage payments. And you know, one thing, you 352 00:20:03.839 --> 00:20:05.759 got to keep and keep keep in mind is not 353 00:20:06.920 --> 00:20:08.400 like at the end of the year when we pay 354 00:20:08.400 --> 00:20:11.839 property taxes, not every property tax that we pay is 355 00:20:11.960 --> 00:20:14.480 captured inside of a S croad, inside of a loan. 356 00:20:14.599 --> 00:20:17.279 So that's that can be a that can a lot 357 00:20:17.279 --> 00:20:19.559 of times I say a lot to my friends or 358 00:20:19.680 --> 00:20:23.680 amongst landlords specifically, not just every friend, but you know, 359 00:20:23.759 --> 00:20:26.680 like landlords are some of the richest people you'll meet, 360 00:20:27.680 --> 00:20:29.680 you know, or you know, like the whole idea is 361 00:20:29.920 --> 00:20:34.279 while you're building your portfolio is you're gonna you're gonna 362 00:20:34.319 --> 00:20:36.960 live poor but retire rich. That's kind of the long play. 363 00:20:37.039 --> 00:20:39.759 The long game is like you're just maintaining these properties 364 00:20:40.519 --> 00:20:43.960 and keeping them up and having you know, you know, 365 00:20:44.039 --> 00:20:46.480 having your tenants help pay them down, having the appreciation 366 00:20:46.519 --> 00:20:50.480 appreciation drive them up. So it's you know, I didn't 367 00:20:50.480 --> 00:20:53.880 get into this necessarily for the cash flow. It's nice 368 00:20:53.920 --> 00:20:57.519 and it did help me leave my Corporate America job. 369 00:20:57.920 --> 00:21:02.559 But but definitely you gotta be kindful that it takes 370 00:21:02.640 --> 00:21:05.599 quite a few to really replace an income, quite a 371 00:21:05.599 --> 00:21:07.039 few rentals to replace an income. 372 00:21:08.039 --> 00:21:12.240 So are you glad you left your job or is 373 00:21:12.279 --> 00:21:17.319 it ever? Is it ever a little tight? Like would 374 00:21:17.319 --> 00:21:20.920 it would it be easier if you still had your 375 00:21:21.039 --> 00:21:22.079 W two job. 376 00:21:23.200 --> 00:21:27.599 So definitely why you're in a growth phase, I would 377 00:21:27.640 --> 00:21:30.400 I would recommend you keep a W two job because 378 00:21:32.079 --> 00:21:36.359 lenders will love you, especially like the lenders that will 379 00:21:36.359 --> 00:21:40.559 give you the best terms on loans. Now you know 380 00:21:40.640 --> 00:21:43.759 the debt service coverage ratio loan where it's specifically tied 381 00:21:43.799 --> 00:21:47.920 to the the potential of a property. They don't always 382 00:21:47.960 --> 00:21:51.599 take into consideration entirely the individual. It's more of the 383 00:21:51.640 --> 00:21:55.000 deal and the and the property. So you know there 384 00:21:55.039 --> 00:21:58.200 are those things. But those loans have higher fees, higher 385 00:21:58.240 --> 00:22:00.880 interest rates. So definitely, I I would say, like keep 386 00:22:00.920 --> 00:22:04.119 your W two. If you're starting out, get max out 387 00:22:04.279 --> 00:22:06.519 the amount of loans you can get in your personal name, 388 00:22:07.000 --> 00:22:09.000 because those are going to be the best loans and 389 00:22:09.119 --> 00:22:11.119 for that a W two is the way to go. 390 00:22:11.680 --> 00:22:15.519 But for me personally, I don't. Although I didn't leave 391 00:22:15.599 --> 00:22:19.519 my work entirely how I wanted to, I definitely have 392 00:22:19.599 --> 00:22:22.920 found like freedom in my day, and freedom in that 393 00:22:23.000 --> 00:22:26.960 I would not trade for anything. A lot of a 394 00:22:27.000 --> 00:22:30.960 lot of late nights and working weekends and extra work 395 00:22:30.960 --> 00:22:33.559 put in to be able today to have I don't 396 00:22:33.559 --> 00:22:36.960 call it free financial freedom or but I call it 397 00:22:37.000 --> 00:22:40.880 flexibility for sure. I mean, like just for example, yesterday 398 00:22:40.880 --> 00:22:44.720 I went to my son's where his college, and we 399 00:22:44.920 --> 00:22:47.240 you know, just just with a day's notice, you know, 400 00:22:47.279 --> 00:22:50.240 and we put in we built a wall so that 401 00:22:50.240 --> 00:22:52.960