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Speaker 1: Welcome to How to Money. I'm Joel, I'm Matt, and

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Speaker 1: today we're talking from pharmacists to full time real estate

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Speaker 1: investor with Ryan Shaw.

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Speaker 2: Yeah, Joel, so, newer listeners to How to Money may

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Speaker 2: not realize how obsessed we were with investing in real

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Speaker 2: estate back in the day. True. Actually, when we were

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Speaker 2: batting around the initial ideas for a podcast, we thought

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Speaker 2: it might be focused only on real estate. How to

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Speaker 2: real Estate doesn't quite have the same ring as as

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Speaker 2: How the Money. Luckily we sumed out enough to cover

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Speaker 2: personal finance more broadly. But it's not that we are

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Speaker 2: not excited about rentals anymore, although the current state of

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Speaker 2: the economy maybe has changed our approach to which hopefully

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Speaker 2: we'll have some time to get to. But we've just

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Speaker 2: turned our efforts elsewhere. But our guest today, Ryan Shaw,

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Speaker 2: is most certainly all in all the real estate, which

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Speaker 2: is why we are stoked to have him join us today.

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Speaker 2: Ryan grew his net worth two one point five million

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Speaker 2: dollars at the age of twenty eight. He was able

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Speaker 2: to completely replace his pharmacist salary when he was thirty

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Speaker 2: one years old, and now man he's helping others to

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Speaker 2: do the same as a real estate investing coach, So

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Speaker 2: we're excited for him to share a story with listeners

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Speaker 2: today and perhaps to what listeners real estate investing appetites. So, Ryan,

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Speaker 2: thank you so much for joining us today on How

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Speaker 2: to Money.

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Speaker 3: I appreciate it. Thanks for the invite, Matt.

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Speaker 1: And Joel glad to have you Ryan. First question we

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Speaker 1: ask everyone who comes on though, is what do you

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Speaker 1: like to splurge on? Because obviously you're doing the smart stuff,

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Speaker 1: you're investing, growing your net worth, thinking about your future.

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Speaker 1: But what are you splurging on in the here and

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Speaker 1: now simultaneously? What's your craft for your equivalent?

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Speaker 3: Yeah, it's definitely food. I'm a big foodie. I would

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Speaker 3: say we eat out at the Michelin star restaurants quite frequently,

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Speaker 3: especially when we go to visit like foreign countries like

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Speaker 3: Korea or Japan. We do try to book ahead for

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Speaker 3: those Michelin three star restaurants because those get booked out

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Speaker 3: like two months in advance, but we always have at

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Speaker 3: least week how Yeah, one experience for sure.

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Speaker 2: All right, So the fact that you said the three

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Speaker 2: star restaurants, first of all, that's like a slight flex.

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Speaker 2: That's next level but then, like you're saying you're doing

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Speaker 2: this frequently, how often would you say that you are

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Speaker 2: showing up to any Mission Star restaurant.

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Speaker 3: I think one year we probably went to ten or

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Speaker 3: twelve Michelin Star restaurants. It was a little bit.

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Speaker 2: Okay, well right, well this is like a hard Yeah,

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Speaker 2: this is like a line I'm on Ryan's budget.

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Speaker 1: Yeah, well we started before we start recording, Ryan, you

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Speaker 1: talk to us about the meal delivery that you use

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Speaker 1: called cook Unity, And at first glance you told me

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Speaker 1: that you basically all you have to do is heat

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Speaker 1: the food and it's pretty good, and so that's a

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Speaker 1: kind of a splurge, but in another way, it's not,

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Speaker 1: and it prevents you from meeting out more than you

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Speaker 1: otherwise would too.

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Speaker 3: Right, yeah, yeah, exactly. So I have you know, date nights,

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Speaker 3: like once once a week or so, and then the

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Speaker 3: rest of the week. I use cook Unity because it's

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Speaker 3: a meal prep saves me a lot of time, you know,

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Speaker 3: driving to the restaurant, waiting forty minutes for our food

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Speaker 3: and driving back. It takes up a lot of my

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Speaker 3: time and I just you know, don't necessarily have that

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Speaker 3: time available to give, so I just you know enjoy

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Speaker 3: using the meal prep cook unity.

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Speaker 2: All right, well, maybe folks can start doing co community

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Speaker 2: and Mission Star restaurants. Wants to start investing in real estate,

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Speaker 2: because evidently that's how you arrive there, Ryan, you didn't

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Speaker 2: start out doing real estate. You were a pharmacist, and

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Speaker 2: I think a lot of folks would consider that, like

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Speaker 2: that's a respectable job. You make a decent amount of money.

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Speaker 2: You've arrived. I think a lot of pharmacists once they

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Speaker 2: are able to finish school and start doing that. Why

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Speaker 2: did you start pursuing real estate investing when it seemed

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Speaker 2: like things were set for you from my career.

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Speaker 3: Yeah, there's a couple reasons. The first is my grandpa

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Speaker 3: invested in real estate back in the fifties in the

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Speaker 3: San Francisco Bay area, and we all saw the houses

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Speaker 3: appreciated like crazy, rents went up, and he was not

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Speaker 3: only able to kind of retire early, but also able

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Speaker 3: to help cover part of my college tuition and that

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Speaker 3: of my brothers as well. So that's when I saw

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Speaker 3: that real estate is the best way to create generational wealth,

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Speaker 3: and so I wanted to get started as soon as possible.

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Speaker 3: The other reason why is because when I was working

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Speaker 3: in pharmacy. I would see these you know, fifty or

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Speaker 3: sixty year old pharmacists and I asked them like, Wow,

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Speaker 3: you've been here for so many years, right, what did

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Speaker 3: you like best about the job, And like several of

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Speaker 3: them told me the same thing. They're like, dude, I

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Speaker 3: would have quit a lot sooner, like a decade earlier,

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Speaker 3: if I could, but I have bills to pay. And

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Speaker 3: you know, they had that kind of attitude. I was like, man,

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Speaker 3: I don't want to be in my fifties and have

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Speaker 3: that attitude for something that I did for thirty years.

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Speaker 3: And I was like, man, I I want to pursue

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Speaker 3: something that I'm more passionate about that I can create

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Speaker 3: and build on my own. And that's what real estate

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Speaker 3: allowed me to do, is to kind of build my

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Speaker 3: own thing, to build my own empire. And so I

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Speaker 3: stumbled upon a really good strategy, which is renting by

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Speaker 3: the room, which actually increases obviously your rental income a

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Speaker 3: lot more than traditional real estate investing. And I just

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Speaker 3: kind of went off to the races. I bought one

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Speaker 3: property a year, poured all of my pharmacists salary into it,

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Speaker 3: and then I just continued on from there.

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Speaker 2: All right, So I'm curious too.

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Speaker 1: You had the example of your grandpa to look to, like, hey,

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Speaker 1: he did well with real estate. Look what he was

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Speaker 1: able to do. He was even able to pay for

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Speaker 1: my college and college for my siblings, or at least

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Speaker 1: part of.

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Speaker 2: It, which is really cool.

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Speaker 1: What was your goal when you're starting getting into real estate,

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Speaker 1: where you like, hey, I just want to be able

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Speaker 1: to grow my net worth more quickly, or I want

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Speaker 1: to retire early. Like, what was maybe the why behind

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Speaker 1: your real estate endeavors and why you ramped it up

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Speaker 1: so quickly.

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Speaker 3: I would say financial freedom was ultimately the goal. At first,

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Speaker 3: it was a little bit hazy for me. I was

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Speaker 3: just getting started. I didn't know how to do anything.

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Speaker 3: I actually my grandpa was in the Bay Area, so

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Speaker 3: I couldn't like rely on him for constant advice or

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Speaker 3: anything like that. So I was pretty much on my

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Speaker 3: own when I started out, and I lost a lot

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Speaker 3: of money. But I guess, you know, when the times

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Speaker 3: got tough, I really looked to my grandpa for inspiration.

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Speaker 3: I was like, well, if I stick with it, I

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Speaker 3: could end up like my grandpa did, being able to

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Speaker 3: pay for future generations and never have to worry about money,

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Speaker 3: and so I was like, you know, I got to

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Speaker 3: keep at it. I lost over thirty thousand dollars, but

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Speaker 3: you know, I mean I could always make that back

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Speaker 3: working at my pharmacy job and working overtime, and so

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Speaker 3: I did. I worked a ton of overtime. I would

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Speaker 3: work like fourteen or fifteen hour days, double shifts because

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Speaker 3: I was working at the hospital, so I would get

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Speaker 3: in at seven thirty am and get out around eleven pm. Wow.

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Speaker 3: And so I did that for about two or three years,

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Speaker 3: just build up as much capital as possible, and eventually

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Speaker 3: I ended up creating kind of something that was self sustaining.

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Speaker 3: So every red toal that I purchased actually had cash flow,

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Speaker 3: so I was able to reinvest that cash flow to

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Speaker 3: buy the next one even faster. And then eventually, with

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Speaker 3: their appreciation and the cash flow, I was able to

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Speaker 3: buy multiple properties a year. So now I have fourteen

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Speaker 3: properties after doing this for about eight or nine years.

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Speaker 1: So those three years working overtime, working your butt off

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Speaker 1: and saving up, So is that kind of your was

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Speaker 1: that your ability to roll the snowball uphill more quickly

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Speaker 1: so that once you got to the top and it

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Speaker 1: was going downhill, like you had more momentum. Yeah, because

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Speaker 1: a lot of people would say, I don't know, man,

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Speaker 1: that sounds really difficult to work fourteen to fifteen hour days,

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Speaker 1: you know, the way you were doing to amass a

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Speaker 1: big chunk of money so you could buy real estate,

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Speaker 1: and then so on top of the work, like you're

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Speaker 1: having to do the part time side hustle of investing,

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Speaker 1: of thinking through real estate and digging into the details

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Speaker 1: and finding out which properties are worth making offers on

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Speaker 1: and going to tour those homes. So it's not like

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Speaker 1: real estate's passive, like you're just tossing that money into

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Speaker 1: an SP five hundred index fund or something like that.

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Speaker 2: That's a lot of work.

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Speaker 3: It was a lot of hard work at the beginning.

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Speaker 3: I was very young though. I was twenty three at

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Speaker 3: the time, and when I started my pharmacist job, and

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Speaker 3: I just wanted to get at it, and I kind

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Speaker 3: of had I approached it with like do whatever it

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Speaker 3: takes mentality, you know, so when things came up, I

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Speaker 3: just pushed through it. And yes, it was tough, I

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Speaker 3: would say for the first two or three years, especially

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Speaker 3: because I was working all that overtime. But eventually, because

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Speaker 3: I built up my reputation as a really good student

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Speaker 3: housing provider, so I actually invest near college towns and

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Speaker 3: doing this rent by the room model. But because I

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Speaker 3: built up my reputation, I started getting a lot of referrals.

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Speaker 3: So every student that came in, they had a couple

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Speaker 3: of friends that were also interested in staying at my place.

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Speaker 3: So after about the second or third year, I didn't

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Speaker 3: really have to do my own marketing anymore. I basically

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Speaker 3: had students always refer others to me, or they would

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Speaker 3: stay for like one or two or three years, and

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Speaker 3: so it kind of was self propelling. I didn't have

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Speaker 3: to do any marketing. All I had to do was

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Speaker 3: manage the property and if like an appliance broke down

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Speaker 3: or a toilet's not working or something like this. But

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Speaker 3: those problems maybe came out once every two months on

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Speaker 3: average or three months on average, and I only had

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Speaker 3: like maybe three or four properties at that time, so

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Speaker 3: it actually wasn't as much work as I guess people

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Speaker 3: would think just having a few properties. Now, once I

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Speaker 3: got to fourteen properties, now I have you know, virtual

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Speaker 3: assistance and all of this, But at the beginning, it

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Speaker 3: was just me.

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Speaker 2: Before and we're going to talk about that strategy because

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Speaker 2: it's something we've touched on the show recently. But to

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Speaker 2: be able to for you to really to be able

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Speaker 2: to unpack it, it's something that we want to do.

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Speaker 2: But before getting to that, I kind of met a

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Speaker 2: little bit because you talked about how I mean, you

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Speaker 2: said that you were doing whatever it took, right, like

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Speaker 2: you're working a ton of overtime. Do you see your

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Speaker 2: ability to get after it at a young age as

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Speaker 2: responsible for your ability to have saved up the money

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Speaker 2: to purchase these properties? And that leads me to I

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Speaker 2: guess another train of thought, which is do you think

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Speaker 2: that your higher education was sort of wasted time?

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Speaker 3: Right?

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Speaker 2: Like we talk about the declining value of college degrees

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Speaker 2: on the show from time to time. Do you think

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Speaker 2: that you would have been better served to become a

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Speaker 2: real estate investor straight out of high school or perhaps

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Speaker 2: that was the formative process that was necessary for you

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Speaker 2: to be able to get after it like you did

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Speaker 2: after graduating.

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Speaker 3: Yeah, that's a very common question. If I were to

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Speaker 3: go back in time, would I do it the same? Yes,

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Speaker 3: one hundred percent. Actually, I really enjoyed my career as

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Speaker 3: a pharmacist. I enjoyed helping others providing that service, and

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Speaker 3: I think I really translated into providing services as a

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Speaker 3: landlord to really know how to deal with customers and

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Speaker 3: just that communication and pharmacists they kind of have a

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Speaker 3: system going on, and I had a lot of fun

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Speaker 3: kind of analyzing the system that the hospital had and

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Speaker 3: applying that kind of to real estate. That system based thinking,

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Speaker 3: having like a SOLP standard operating procedure for everything that

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Speaker 3: comes up in real estate. And so I created those

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Speaker 3: SOPs for my business and I found that it made

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Speaker 3: things a lot simpler. So definitely a lot of the

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Speaker 3: stuff I learned in pharmacy I actually did apply to

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Speaker 3: real estate at some point. And having that capital starting out,

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Speaker 3: I think is very important because real estate is very

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Speaker 3: capital intensive. But if you have the capital, you get

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Speaker 3: better interest rates, you get better loan terms. Having that

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Speaker 3: W two job I mean, and so I think it's

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Speaker 3: one of the best ways to get started is to

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Speaker 3: have that stable income so that you're you're not work

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Speaker 3: like let's say there's a three thousand dollars repair or

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Speaker 3: five thousand dollars repair you have to make at least

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Speaker 3: you have that income coming in to not worry about,

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Speaker 3: you know, coming out. I mean, obviously it sucks to

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Speaker 3: come out of pocket for that repair, but you know,

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Speaker 3: you also have the income to kind of stabilize yourself.

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Speaker 3: You know, there's no real estate takes over.

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Speaker 1: Nother paycheck coming in two weeks as well. Right, So

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Speaker 1: there's all that that is from a conservative approach. You're

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Speaker 1: not like, you know, throwing the dice on the crab stable.

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Speaker 1: You have a methodical plan in place. I'm curious to.

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Speaker 1: So you said you invest in a college town, Let's

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Speaker 1: talk about the way in which you invest in real

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Speaker 1: estate because it is different. It's it's unique in a

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Speaker 1: lot of ways, and it does have potential benefits and

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Speaker 1: potential downsides. So why was renting individual rooms to college

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Speaker 1: students in your mind superior to other routes you could

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Speaker 1: have taken when it comes to getting into real estate investing.

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Speaker 3: Yeah, So when I got started, I tested near my

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Speaker 3: alma mater college to other pharmacy students. So these are

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Speaker 3: people that I actually knew in school, and I was like, well,

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Speaker 3: why not rent out to you know, some friends or colleagues.

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Speaker 3: And so the very first one I bought in twenty sixteen,

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Speaker 3: I essentially rented to like healthcare professionals, so these were

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Speaker 3: pharmacy students. There was a pt students, dental students, and

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Speaker 3: so I found that this model makes a lot of

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Speaker 3: sense if you rent out to professionals, renting out to

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Speaker 3: people who are really studying hard to get that degree,

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Speaker 3: so you know, instead of throwing like wild house parties,

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Speaker 3: they're really focused on passing their mid terms and finals.

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Speaker 3: And even if you have one or two people who

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Speaker 3: are really focused on their studies, they kind of create

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Speaker 3: a culture of, hey, you can't have any house parties here.

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Speaker 3: I'm really focused on trying to get my doctorate. Right,

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Speaker 3: So I found that that market turned out to be

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Speaker 3: a really good market. I found that those turned out

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Speaker 3: to be really high quality students, especially if you invest

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Speaker 3: in our colleges that are you know, like IVY League

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Speaker 3: colleges for example. They don't have to be IVY League,

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Speaker 3: but I usually target top colleges that have a lot

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Speaker 3: of doctorate degrees healthcare degrees, engineering, MBA, law degrees. And

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Speaker 3: then I also found, like I mentioned earlier, that students

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Speaker 3: like to talk a lot, right, so work kind of

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Speaker 3: spreads like wildfire. If you turn out to be a

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Speaker 3: really great landlord and provide really good housing for students.

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Speaker 3: Like you'll get a ton of referrals just from that.

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Speaker 3: And like I said on my I would say around

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Speaker 3: year three it was kind of self propelling. I would

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Speaker 3: get so many referrals that I didn't have to do

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Speaker 3: my own marketing, and like one hundred percent of the

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Speaker 3: tennis that I got came from a referral at some point.

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Speaker 3: So yeah, that's where I started out, near my alma

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Speaker 3: mater college and it just kind of went from there.

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Speaker 1: I just read a book about kind of some of

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Speaker 1: the crazy parties and stuff that happened at schools like

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Speaker 1: College of Charleston. So maybe don't invest in your College

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Speaker 1: of Charleston. I think you're picking the right school and

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Speaker 1: going after the right kinds of students, the right client

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Speaker 1: tele I guess to live in that house.

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Speaker 3: Yes, yes, yeah, exactly.

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Speaker 2: He said too. So I mean these are like, yeah,

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Speaker 2: like doctorates phdu students at the very least, students who

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Speaker 2: are getting their graduate degrees.

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Speaker 3: Yep.

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Speaker 2: How long did it take for you to save up

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Speaker 2: that initial down payment? Because it sounded like you graduated

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Speaker 2: you were a practicing pharmacist and then you were saving

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Speaker 2: up the cash in order to buy that first property.

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Speaker 2: Is that right?

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Speaker 3: Yep, that's right. I had some money I put into

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Speaker 3: stocks when I was younger, but essentially I just worked

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Speaker 3: a lot of overtime that first year.

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Speaker 2: Okay.

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Speaker 3: I graduated in twenty fifteen, and then I put a

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Speaker 3: down payment in my first house. I think it was

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Speaker 3: October of twenty sixteen, okay, but back then it was

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Speaker 3: a two hundred and sixty two thousand dollars house in Stockton, California.

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Speaker 3: That's the first one that I bought.

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Speaker 1: Okay, talk to us about maybe the overarching pros and

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Speaker 1: cons of the specific investing approach you take. So you

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Speaker 1: talk about trying to avoid the party house thing because

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Speaker 1: that would certainly have an impact on the wear and

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Speaker 1: tear right of the house, but also renting out by

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Speaker 1: the room means you have individual leases with a bunch

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Speaker 1: of different folks. How what Yeah, what is What are

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Speaker 1: the pros and cons? It sounds like this is potentially

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Speaker 1: more profitable as well, whereas if you're running it out

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Speaker 1: to a family or something like that versus running it

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Speaker 1: out by the room, you wouldn't be able to make

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Speaker 1: as much. So talk to us about like the Yeah,

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Speaker 1: the pros and cons there.

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Speaker 3: Sure, the biggest pro course is the increased the amount of

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Speaker 3: cash flow, which allows you to really scale your portfolio.

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Speaker 3: So let's say I get the Let's say it starts

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Speaker 3: out as a three bedroom house. Usually I'll add two

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Speaker 3: or three bedrooms to make it a five bedroom or

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Speaker 3: six bedroom house. And if I rent it out to

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Speaker 3: six students and rent out about seven hundred dollars per

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Speaker 3: month per student, that's six times seven hundred is forty

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Speaker 3: two hundred dollars a month and rental income. And this

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Speaker 3: is on a house that you know, I bought for

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Speaker 3: like three hundred thousand or two hundred and fifty thousand

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Speaker 3: or something like that.

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Speaker 1: Are you selling square footage or are you getting creative

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Speaker 1: with the square footage as it exists.

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Speaker 3: I'm getting creative with the square footage as it exists exactly,

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Speaker 3: because I don't when I'm adding. If I add square footage,

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Speaker 3: that's obviously going to be a lot more expensive. I

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Speaker 3: have to, you know, go through a more rigorous permitting

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Speaker 3: process to add an addition to the house. But it's

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Speaker 3: much easier just to repurpose existing space. So let's say

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Speaker 3: there's a living room, family room, library room, office room, whatever.

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Speaker 3: Most of that I will turn into bedrooms and then just.

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Speaker 2: Keep bedroom, bedroom, bedroom, exactly. Yeah, I'll go do that

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Speaker 2: Truman bathroom. That's all we need. Maybe a kitchen, yeah.

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Speaker 3: Yeah, exactly. So what's cool about students is a lot

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Speaker 3: of times they're you know, studying, they're out of the house,

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Speaker 3: they're hanging out with their friends maybe, so they don't

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Speaker 3: need a whole lot of common space. Most of the

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Speaker 3: times they actually hang out in the rooms, maybe watch

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Speaker 3: Netflix or something like that. So I actually have houses

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Speaker 3: that do have a lot of common space, but they

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Speaker 3: don't even use that common space.

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Speaker 2: So yeah, it's like wasted space, like for everybody. Yeah, basically,

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Speaker 2: it's obviously wasted for you. But I guess I hadn't

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Speaker 2: thought about that from the standpoint of just how our

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Speaker 2: culture has changed, and in some ways, like I almost

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Speaker 2: see that as like a negative, right, the fact that

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Speaker 2: folks are spending less time together. But what you're saying

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Speaker 2: is when it comes to students, I mean, some of

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Speaker 2: these students, I guess don't even really know each other,

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Speaker 2: and so they're probably keeping in this stuff that they're

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Speaker 2: fighting or anything. But maybe they're not like best buds,

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Speaker 2: where they're wunning that common space. Truly, all they're looking

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Speaker 2: for is somebody to keep the kitchen clean.

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Speaker 3: Yeah, exactly. So they just you know, enjoy their own

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Speaker 3: private spaces. And it makes a lot of sense for

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Speaker 3: them because they're only paying six hundred or seven hundred

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Speaker 3: a month maybe versus on campus housing is charging over

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Speaker 3: one thousand a month and you have to live with

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Speaker 3: a roommate and you have to pay for a meal

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Speaker 3: plan and parking. And so what's good about the off

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Speaker 3: campus housing is it's like half the price of you know,

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Speaker 3: on campus housing. So for a lot of people it

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Speaker 3: makes sense, especially people who are trying to save money.

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Speaker 3: A lot of times these students have their parents paying,

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Speaker 3: and so the parent is not going to just stop

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Speaker 3: paying rent all of a sudden and risk their child

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Speaker 3: getting evicted from the place they're staying in college. And

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Speaker 3: what's cool is, again, like you guys were talking about,

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Speaker 3: I rent mainly to graduate students because campus housing provides

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Speaker 3: on campus housing for undergrads, but they don't provide enough

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Speaker 3: housing for graduate students. In fact, a lot of them

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Speaker 3: don't provide any housing for graduate students. Sometimes I call

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Speaker 3: up the university and I ask them, oh, what type

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Speaker 3: of grad housing do you have, and they'll say, like,

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Speaker 3: we don't have any available because we have so many

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Speaker 3: undergrads that they pushed out some of the grad students

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Speaker 3: for the housing. So that's when I realized, like, oh,

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Speaker 3: you know, this is a really big market because there's

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Speaker 3: like three thousand grad students and they don't have anywhere

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Speaker 3: else to stay but off campus. So those are some

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Speaker 3: of the pros.

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Speaker 1: Yeah, so tell me real quick, then you buy, you buy.

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Speaker 1: Let's say it's just a three hundred thousand dollars house,

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Speaker 1: it's a three bedroom, two bath, what would that have

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Speaker 1: rented for? And then you turn it into a five

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Speaker 1: bedroom six hundred bucks a pop. You're making three grand

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Speaker 1: a month. What did it have rented for? And then

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Speaker 1: what do you get?

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Speaker 3: Yeah, so the typical rent rates around like Stockton, California.

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Speaker 3: It started out around fifteen hundred a month I would

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Speaker 3: say for a three bed, two bath, but it went

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Speaker 3: up to around two twenty one hundred or so. But

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Speaker 3: if I rented out to six people at seven hundred

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Speaker 3: dollars a month, the rental income is more like forty

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Speaker 3: two hundred a month. My largest house I rent how

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Speaker 3: for about six fifty per bedroom in Cleveland, Ohio, And

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Speaker 3: it's a ten bedroom house that I bought for three

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Speaker 3: hundred and sixty seven thousand, and I rented out for

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Speaker 3: six thousand, five hundred and fifty dollars a month, and

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Speaker 3: the mortgage payment was around twenty three to fifty or

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Speaker 3: twenty four hundred a month, So it was about four thousand.

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Speaker 2: A month for as a keeper, you know right there?

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Speaker 3: Mortgage Yeah, yeah, yeahly kayh sure.

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Speaker 2: Well awesome. So you're getting at a couple of things

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Speaker 2: that we want to talk to you more about. You're

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Speaker 2: talking about kind of different locations. We're going to get

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Speaker 2: to that and more specifically too, I guess some of

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Speaker 2: the other ways that you are figuring out whether or

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Speaker 2: not these properties are going to work for you moving forward.

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Speaker 2: We get to all that and more right after this.

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Speaker 1: All right, we're back from the break, still talking about

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Speaker 1: real estate investing with Ryan Shaw and how Hey, you

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Speaker 1: can make more money as a real estate investor than

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Speaker 1: you can as a pharmacist if you play your cards

437
00:21:28,040 --> 00:21:31,320
Speaker 1: right and you work your butt off. So Ryan, I

438
00:21:31,359 --> 00:21:34,119
Speaker 1: love just kind of the way that you found a

439
00:21:34,359 --> 00:21:37,560
Speaker 1: specific model of real estate investing, and you replicated it

440
00:21:37,960 --> 00:21:41,960
Speaker 1: in order to increase your revenue and decrease some of

441
00:21:42,000 --> 00:21:44,639
Speaker 1: the downside too. I'm curious how do you vet properties

442
00:21:45,240 --> 00:21:48,440
Speaker 1: because every every investor has different metrics they want to hit.

443
00:21:48,920 --> 00:21:50,600
Speaker 1: What is it that you're looking for?

444
00:21:51,280 --> 00:21:51,320
Speaker 3: What?

445
00:21:51,800 --> 00:21:53,840
Speaker 1: Yeah, what do you need to see in a listing

446
00:21:53,880 --> 00:21:55,320
Speaker 1: to make you to pequk your interest?

447
00:21:55,640 --> 00:21:59,960
Speaker 3: Yeah, I definitely have a very specific buybox. So for students,

448
00:22:00,000 --> 00:22:02,720
Speaker 3: so you have to think about for any real estate, right,

449
00:22:02,760 --> 00:22:06,000
Speaker 3: you have to think about who is your target client,

450
00:22:06,080 --> 00:22:09,520
Speaker 3: who is your client avatar, and what are they looking for?

451
00:22:09,960 --> 00:22:13,800
Speaker 3: So for college students or grad students, they're typically looking

452
00:22:13,880 --> 00:22:16,679
Speaker 3: for how close am I to the school? Because if

453
00:22:16,720 --> 00:22:19,000
Speaker 3: they're waking up for their eight am classes, they want

454
00:22:19,040 --> 00:22:21,600
Speaker 3: to be as close as possible. So I try to

455
00:22:21,600 --> 00:22:25,159
Speaker 3: buy within a walking distance to campus if possible, or

456
00:22:25,200 --> 00:22:27,199
Speaker 3: if it's more of a commuter college where you have

457
00:22:27,280 --> 00:22:31,040
Speaker 3: to drive to campus than usually within a five minute

458
00:22:31,119 --> 00:22:33,520
Speaker 3: driving distance. Now, a lot of things I do for

459
00:22:33,600 --> 00:22:38,680
Speaker 3: students include providing transportation for them. So I might actually

460
00:22:38,720 --> 00:22:42,840
Speaker 3: purchase an electric scooter. Haven't signed a liability waiver and stuff,

461
00:22:43,040 --> 00:22:45,439
Speaker 3: but I might purchase an electric scooter for them to

462
00:22:45,560 --> 00:22:49,480
Speaker 3: use free of charge to get to campus. So that's

463
00:22:49,520 --> 00:22:52,920
Speaker 3: the number one thing is location and proximity to campus.

464
00:22:53,520 --> 00:22:56,720
Speaker 3: Number two is safety. So if you are a parent

465
00:22:56,800 --> 00:22:59,440
Speaker 3: of one of these students and you're driving around from

466
00:22:59,520 --> 00:23:02,440
Speaker 3: your house to the school, are you passing through any

467
00:23:02,600 --> 00:23:05,080
Speaker 3: unsafe areas? Do you see a lot of homeless, a

468
00:23:05,119 --> 00:23:07,959
Speaker 3: lot of maybe gang members or something like that, Because

469
00:23:08,240 --> 00:23:10,800
Speaker 3: then the parent, if the parent feels unsafe having their

470
00:23:10,880 --> 00:23:14,280
Speaker 3: kid there, obviously the kid's probably not going to live there,

471
00:23:14,480 --> 00:23:16,600
Speaker 3: and obviously the kids don't want to be held up

472
00:23:16,640 --> 00:23:19,639
Speaker 3: at endpoint or anything like that. So buying in a

473
00:23:19,640 --> 00:23:24,840
Speaker 3: safe neighborhood is super important. And then affordability. So these

474
00:23:24,840 --> 00:23:28,480
Speaker 3: students they're looking for trying to save some money, and

475
00:23:28,720 --> 00:23:31,280
Speaker 3: you know, maybe they want more money for groceries and

476
00:23:31,320 --> 00:23:34,359
Speaker 3: food and hanging out and so they will you know,

477
00:23:34,440 --> 00:23:37,000
Speaker 3: stay off campus to save money as well. So you

478
00:23:37,040 --> 00:23:39,560
Speaker 3: do have to make sure your pricing is very reasonable

479
00:23:39,680 --> 00:23:43,280
Speaker 3: for the area, and that requires doing like market research,

480
00:23:43,600 --> 00:23:47,800
Speaker 3: talking to students, seeing what their budgets are typically around

481
00:23:47,800 --> 00:23:51,120
Speaker 3: that area, so that you're not overcharging, because even if

482
00:23:51,119 --> 00:23:53,960
Speaker 3: you're like twenty dollars above their budget, they will just

483
00:23:54,040 --> 00:23:56,560
Speaker 3: write you off, like if their budget is seven hundred

484
00:23:56,600 --> 00:23:59,800
Speaker 3: dollars flat or less and your place is seven twenty.

485
00:24:00,000 --> 00:24:01,880
Speaker 3: They're going to go like, oh, that's above my budget,

486
00:24:02,000 --> 00:24:03,760
Speaker 3: and they're not going to look, you know, look at

487
00:24:03,800 --> 00:24:05,879
Speaker 3: second look at your place. So you really have to

488
00:24:05,880 --> 00:24:09,840
Speaker 3: get the pricing right. And then the last thing is community.

489
00:24:09,960 --> 00:24:13,879
Speaker 3: So students want to stay with other students or maybe

490
00:24:13,880 --> 00:24:18,400
Speaker 3: healthcare professionals like medical interns, medical residents, and medical fellows.

491
00:24:19,040 --> 00:24:24,120
Speaker 3: So I market myself as exclusively for students and medical

492
00:24:24,160 --> 00:24:28,720
Speaker 3: workers or healthcare professionals. And because you know, I'm trying

493
00:24:28,720 --> 00:24:31,960
Speaker 3: to keep a certain culture at the house and students

494
00:24:32,040 --> 00:24:36,040
Speaker 3: may not be comfortable let's say living with a family

495
00:24:36,119 --> 00:24:38,520
Speaker 3: of five or something like that. It just feels a

496
00:24:38,560 --> 00:24:41,520
Speaker 3: little bit uncomfortable for them. So yeah, I typically just

497
00:24:41,640 --> 00:24:42,840
Speaker 3: target students.

498
00:24:43,240 --> 00:24:45,879
Speaker 1: Are you paying for the utilities and or are you

499
00:24:46,400 --> 00:24:50,280
Speaker 1: essentially taking the utility amount, subdividing it and sending everyone

500
00:24:50,359 --> 00:24:52,359
Speaker 1: a bill at the end of the month, because you know,

501
00:24:52,400 --> 00:24:54,159
Speaker 1: some people might be taking those long hot showers and

502
00:24:54,200 --> 00:24:56,680
Speaker 1: other people might be might not be. Ye, how do

503
00:24:56,720 --> 00:24:57,600
Speaker 1: you do the utility thing?

504
00:24:58,000 --> 00:25:00,399
Speaker 3: Yeah, the fairest way to do that is, like you said,

505
00:25:00,400 --> 00:25:03,560
Speaker 3: add them all up and subdivide them equally among the tenants.

506
00:25:04,240 --> 00:25:08,040
Speaker 3: The only utility technically that I pay for is the landscaping,

507
00:25:08,560 --> 00:25:12,040
Speaker 3: which is not really a utility. But yeah, everything else,

508
00:25:12,080 --> 00:25:16,400
Speaker 3: the electric, gas, water, garbage, sewage, the students cover.

509
00:25:17,000 --> 00:25:21,920
Speaker 2: Do you lean towards newer constructions versus older houses, because

510
00:25:21,960 --> 00:25:24,679
Speaker 2: I've heard you talk about some of the massive problems

511
00:25:24,680 --> 00:25:28,000
Speaker 2: you had with the first house that you purchased, problems

512
00:25:28,000 --> 00:25:31,359
Speaker 2: that would sink most investors talk about that. I guess,

513
00:25:31,560 --> 00:25:33,720
Speaker 2: like I hear you talk about this ten bedroom house

514
00:25:33,800 --> 00:25:37,600
Speaker 2: in Ohio. Huh do they make houses that big these days?

515
00:25:37,640 --> 00:25:39,720
Speaker 2: It sounds kind of like this old mansion they do.

516
00:25:39,800 --> 00:25:41,919
Speaker 2: If you recommand hear all the other rooms.

517
00:25:41,720 --> 00:25:44,000
Speaker 3: Yeah, it's kind of like an old mansion.

518
00:25:43,760 --> 00:25:46,200
Speaker 2: Used to be a library. Yeah. Now this is three

519
00:25:46,200 --> 00:25:48,080
Speaker 2: bedrooms that I fit in here. Yeah, I guess talk

520
00:25:48,119 --> 00:25:50,439
Speaker 2: about newer versus older properties.

521
00:25:50,160 --> 00:25:53,720
Speaker 3: Yeah, older properties definitely tend to have more problems with them.

522
00:25:54,280 --> 00:25:57,159
Speaker 3: It could be the plumbing, the electricals, it could be

523
00:25:57,400 --> 00:26:00,719
Speaker 3: like the roof or the HVAC. So well, typically, what

524
00:26:00,760 --> 00:26:03,640
Speaker 3: I do is I just do more due diligence before

525
00:26:03,640 --> 00:26:06,680
Speaker 3: I purchase a property, whereas most people might just get

526
00:26:06,680 --> 00:26:10,960
Speaker 3: a typical home inspection I might add on inspections, like

527
00:26:11,000 --> 00:26:13,879
Speaker 3: I'll have an HVACT technician go in there to see

528
00:26:14,359 --> 00:26:17,119
Speaker 3: how old the HVACT is and if it's in proper

529
00:26:17,280 --> 00:26:19,719
Speaker 3: order or if it's going to die in a couple years.

530
00:26:20,119 --> 00:26:23,359
Speaker 3: I get a breofer. Sometimes I get a plumber and

531
00:26:23,480 --> 00:26:27,320
Speaker 3: electrician to check out the plumbing and electricals, and I'll

532
00:26:27,359 --> 00:26:31,040
Speaker 3: get a sewage inspection as well, especially for older houses

533
00:26:31,480 --> 00:26:35,359
Speaker 3: if it's built before the nineteen eighties, usually it's using

534
00:26:35,760 --> 00:26:39,040
Speaker 3: cast iron piping, and cast iron can brust and have

535
00:26:39,119 --> 00:26:41,800
Speaker 3: roots stick in to them. So I've had to replace

536
00:26:41,840 --> 00:26:45,240
Speaker 3: several sewage lines before, which can cost like nine thousand

537
00:26:45,320 --> 00:26:50,320
Speaker 3: dollars a piece potentially. So I learned my lesson, and

538
00:26:50,400 --> 00:26:52,919
Speaker 3: what I do is I do extra inspections during the

539
00:26:53,000 --> 00:26:56,760
Speaker 3: due diligence phase so that I can tell the seller, Hey,

540
00:26:56,840 --> 00:26:59,560
Speaker 3: this is what it's estimated the cost to replace the

541
00:26:59,600 --> 00:27:02,919
Speaker 3: sewage line that currently has a bunch of roots sticking

542
00:27:02,920 --> 00:27:06,040
Speaker 3: into it. Can you cover that cost? Because you know,

543
00:27:06,040 --> 00:27:07,520
Speaker 3: I'm not going to buy the place if it's not

544
00:27:07,760 --> 00:27:10,600
Speaker 3: in a decent enough condition. So a lot of that

545
00:27:10,640 --> 00:27:15,520
Speaker 3: I negotiate, and I mean I've gotten houses for like

546
00:27:15,600 --> 00:27:18,040
Speaker 3: one of them, I got for eighty three thousand dollars

547
00:27:18,119 --> 00:27:22,119
Speaker 3: under asking price. I've had up to fifteen thousand or

548
00:27:22,160 --> 00:27:25,320
Speaker 3: twenty thousand of seller credit before. And it's just all

549
00:27:25,359 --> 00:27:27,960
Speaker 3: about doing your due diligence and so that you can

550
00:27:28,000 --> 00:27:30,800
Speaker 3: negotiate with the seller. And it's always okay to walk

551
00:27:30,800 --> 00:27:33,200
Speaker 3: away from a deal. That's the first lesson I learned

552
00:27:33,440 --> 00:27:35,439
Speaker 3: from my realtor. That's the first thing he told me,

553
00:27:35,520 --> 00:27:38,720
Speaker 3: is like, don't feel like you have to be attached

554
00:27:38,720 --> 00:27:40,479
Speaker 3: to a deal, you know, don't feel like you have

555
00:27:40,560 --> 00:27:42,919
Speaker 3: to buy this deal. You can always walk away if

556
00:27:42,920 --> 00:27:45,360
Speaker 3: the seller doesn't want to work with you. And having

557
00:27:45,440 --> 00:27:49,320
Speaker 3: that mentality allowed me to basically be in a better

558
00:27:49,440 --> 00:27:52,760
Speaker 3: negotiating position for a lot of these deals that I purchase.

559
00:27:53,160 --> 00:27:56,000
Speaker 3: So you know, I might have a give me fifteen

560
00:27:56,040 --> 00:27:59,600
Speaker 3: thousand dollars to replace the HVAC, you know, and I

561
00:27:59,640 --> 00:28:02,520
Speaker 3: can just replace it right after I close on the property,

562
00:28:02,760 --> 00:28:05,000
Speaker 3: and that way I have a brand new HVACT I

563
00:28:05,000 --> 00:28:08,040
Speaker 3: don't have to worry for the next thirty years. And

564
00:28:08,160 --> 00:28:11,159
Speaker 3: you know, same thing for roofing, electrical as plumbing, I

565
00:28:11,200 --> 00:28:13,720
Speaker 3: will get credit put towards that if it's in bad shape.

566
00:28:13,920 --> 00:28:16,600
Speaker 1: Yeah, the most important elements of the house. I'm curious

567
00:28:16,760 --> 00:28:19,879
Speaker 1: if someone is listening and they're like, wow, what Ryan's doing.

568
00:28:20,600 --> 00:28:24,879
Speaker 1: This makes no sense going directly for the single, you know,

569
00:28:25,119 --> 00:28:28,199
Speaker 1: running out by the room to graduate students, and it

570
00:28:28,200 --> 00:28:30,240
Speaker 1: sounds like the cash flow is pretty sweet if you.

571
00:28:30,440 --> 00:28:31,159
Speaker 2: Use this model.

572
00:28:31,560 --> 00:28:35,119
Speaker 1: Do you think that other people should follow your specific

573
00:28:35,200 --> 00:28:38,880
Speaker 1: route to real estate investing success or is it important

574
00:28:38,880 --> 00:28:41,040
Speaker 1: for them to find their own niche I'm curious what

575
00:28:41,120 --> 00:28:41,680
Speaker 1: you think about that.

576
00:28:42,400 --> 00:28:44,840
Speaker 3: I think this strategy is one of the best out there,

577
00:28:45,160 --> 00:28:48,760
Speaker 3: hands down. Like it's very hard to do traditional real

578
00:28:48,840 --> 00:28:50,840
Speaker 3: estate investing where you buy a house and then you

579
00:28:50,880 --> 00:28:53,360
Speaker 3: rent it out to a family and be able to

580
00:28:53,400 --> 00:28:57,080
Speaker 3: make cash flow. For this method, if you're making you know,

581
00:28:57,680 --> 00:29:00,920
Speaker 3: seven hundred times six bedrooms forty two hundred dollars a month,

582
00:29:01,240 --> 00:29:04,800
Speaker 3: it's it's kind of harder to like not make cash

583
00:29:04,840 --> 00:29:07,920
Speaker 3: flow using it, right, And that's why I think it's

584
00:29:07,920 --> 00:29:10,200
Speaker 3: one of the best places for people to get started,

585
00:29:10,320 --> 00:29:12,840
Speaker 3: because you really do need that cash flow at the

586
00:29:12,880 --> 00:29:16,720
Speaker 3: beginning so that you can continue to reinvest. You don't

587
00:29:16,720 --> 00:29:19,320
Speaker 3: have to come out of pocket for expenses. You know,

588
00:29:19,400 --> 00:29:22,480
Speaker 3: let's say your roof needs to be replaced, Well, that's

589
00:29:22,520 --> 00:29:26,200
Speaker 3: like fifteen thousand dollars or like, you know, twelve thousand

590
00:29:26,200 --> 00:29:29,840
Speaker 3: to fifteen thousand dollars. And so if you're only making

591
00:29:29,840 --> 00:29:33,560
Speaker 3: one hundred dollars a month in cash flow, basically the

592
00:29:33,600 --> 00:29:35,920
Speaker 3: next fifteen years of cash flow is going to be

593
00:29:35,960 --> 00:29:39,800
Speaker 3: wiped out by one roof replacement. Versus if you're making

594
00:29:39,960 --> 00:29:42,480
Speaker 3: let's say fifteen hundred a month in cash flow by

595
00:29:42,520 --> 00:29:46,600
Speaker 3: doing the student housing model, well you're gonna after what

596
00:29:46,760 --> 00:29:48,920
Speaker 3: ten months, you'll be able to replace a roof if

597
00:29:48,960 --> 00:29:52,160
Speaker 3: you wanted to with the cash flow, and you know,

598
00:29:52,360 --> 00:29:55,480
Speaker 3: not every year the roof breaks down obviously, so you're

599
00:29:55,520 --> 00:29:59,080
Speaker 3: going to be a lot more profitable. So I think

600
00:29:59,440 --> 00:30:01,320
Speaker 3: for that reas it's one of the best ways to

601
00:30:01,320 --> 00:30:05,600
Speaker 3: get started. It's not as complicated as like doing Airbnb

602
00:30:05,760 --> 00:30:09,400
Speaker 3: and having to provide all that service, having to text

603
00:30:09,440 --> 00:30:12,040
Speaker 3: back and forth between all the tenants all the time.

604
00:30:12,680 --> 00:30:15,760
Speaker 3: So I think it's like a lot less time investment

605
00:30:15,960 --> 00:30:18,840
Speaker 3: to get started and a lot more return. But if

606
00:30:18,840 --> 00:30:23,360
Speaker 3: that being said, everyone has their own, you know, passions.

607
00:30:23,480 --> 00:30:26,120
Speaker 3: So if you like to flip and you feel drawn

608
00:30:26,160 --> 00:30:29,240
Speaker 3: towards flipping, then yes, find a mentor who's really good

609
00:30:29,280 --> 00:30:31,920
Speaker 3: at flipping, and you know, get in touch with them

610
00:30:31,960 --> 00:30:35,080
Speaker 3: and maybe have them teach you through one of your

611
00:30:35,080 --> 00:30:38,760
Speaker 3: first flips. But everyone's a little bit different and so

612
00:30:39,000 --> 00:30:41,680
Speaker 3: obviously one size doesn't fit all.

613
00:30:41,760 --> 00:30:44,240
Speaker 2: Yeah, that makes sense. I feel like what you're doing

614
00:30:44,320 --> 00:30:48,200
Speaker 2: it's somewhere in between airbnb versus renting long term do

615
00:30:48,240 --> 00:30:50,840
Speaker 2: a single family because it's not like you're every three

616
00:30:50,920 --> 00:30:52,760
Speaker 2: days you're having to get a new tenant in there.

617
00:30:53,200 --> 00:30:54,960
Speaker 2: That's it does take a whole lot more work to

618
00:30:54,960 --> 00:30:57,160
Speaker 2: do that. But like you said, if you've got six

619
00:30:57,200 --> 00:30:59,800
Speaker 2: tenants in a house, that's five more than I've got

620
00:31:01,080 --> 00:31:03,120
Speaker 2: who I'm having to deal with. But at the same time,

621
00:31:03,280 --> 00:31:05,960
Speaker 2: you've got more money coming in, so there's more work involved,

622
00:31:05,960 --> 00:31:08,440
Speaker 2: but there's also certainly more more cash flow, which is

623
00:31:08,480 --> 00:31:10,600
Speaker 2: what you're talking about here. And you actually you just

624
00:31:10,640 --> 00:31:14,040
Speaker 2: shared the example of like a roof replacement. You have

625
00:31:14,120 --> 00:31:17,000
Speaker 2: you had any issues with especially I'm curious too, with

626
00:31:17,000 --> 00:31:20,760
Speaker 2: you being out in California the insurers and what it

627
00:31:20,840 --> 00:31:23,200
Speaker 2: is that they're willing to take to take on a

628
00:31:23,240 --> 00:31:27,120
Speaker 2: lot of insurers showing up at properties and inspecting and saying, hey,

629
00:31:27,160 --> 00:31:29,640
Speaker 2: you got to get this repaired. How have you factored

630
00:31:29,640 --> 00:31:31,880
Speaker 2: that into your overall business model.

631
00:31:32,280 --> 00:31:35,400
Speaker 3: You know, I was kind of lucky. I purchase like

632
00:31:35,640 --> 00:31:40,520
Speaker 3: five technically six properties in California before State Farm decided

633
00:31:40,560 --> 00:31:45,000
Speaker 3: to not ensure any houses in California anymore. And so

634
00:31:45,200 --> 00:31:48,000
Speaker 3: what's nice is California, I guess, or for State Farm

635
00:31:48,040 --> 00:31:51,120
Speaker 3: at least they kept their legacy clients. So I got

636
00:31:51,160 --> 00:31:55,280
Speaker 3: locked in luckily to that home insurer. But yeah, it's

637
00:31:55,320 --> 00:31:58,240
Speaker 3: definitely an issue if the house is in poor condition.

638
00:31:58,640 --> 00:32:02,040
Speaker 3: So for example, there's something called knob in tube electricals,

639
00:32:02,400 --> 00:32:04,560
Speaker 3: and if the house has like knob in two, there's

640
00:32:04,600 --> 00:32:07,040
Speaker 3: a lot of insurance who don't want to ensure that

641
00:32:07,200 --> 00:32:11,560
Speaker 3: because of potential fire hazard with that type of electrical

642
00:32:11,960 --> 00:32:14,160
Speaker 3: So a lot of times, you know, you could negotiate

643
00:32:14,200 --> 00:32:17,440
Speaker 3: with the seller to replace it or replace some of it,

644
00:32:17,520 --> 00:32:19,760
Speaker 3: or you know, a good amount of it, or you

645
00:32:19,800 --> 00:32:22,000
Speaker 3: can find a mature who eventually does it, but you

646
00:32:22,080 --> 00:32:25,240
Speaker 3: might have to pay more. Typically for I would say

647
00:32:25,320 --> 00:32:28,640
Speaker 3: yearly insurance costs, it could range from twelve hundred to

648
00:32:28,720 --> 00:32:33,680
Speaker 3: twenty four hundred per year. But yeah, I think nowadays

649
00:32:33,680 --> 00:32:35,880
Speaker 3: it's a little bit harder to find somebody. But once

650
00:32:35,920 --> 00:32:39,320
Speaker 3: you find a good insurer who will cover all that stuff,

651
00:32:39,800 --> 00:32:42,200
Speaker 3: then you just use the same one for every one

652
00:32:42,240 --> 00:32:42,920
Speaker 3: of your houses.

653
00:32:43,040 --> 00:32:48,800
Speaker 1: Yeah, a little less competition in California, specifically on the

654
00:32:49,040 --> 00:32:53,080
Speaker 1: home insurance market. Sadly, I'm curious too about tenants. You've

655
00:32:53,120 --> 00:32:55,960
Speaker 1: talked about this. This seems to be a lynchpin of

656
00:32:56,000 --> 00:32:59,600
Speaker 1: your investing model is catering to the right tenant, the

657
00:32:59,640 --> 00:33:02,240
Speaker 1: tenant you want who's going to take care of your property.

658
00:33:02,520 --> 00:33:04,840
Speaker 1: You have something called the prime method, right, And this

659
00:33:04,920 --> 00:33:06,360
Speaker 1: is something also, by the way, that Matt and I

660
00:33:06,400 --> 00:33:10,320
Speaker 1: have talked about many times. That is the thing, sadly

661
00:33:10,360 --> 00:33:13,560
Speaker 1: that many landlords pay the least amount of attention to

662
00:33:14,280 --> 00:33:16,720
Speaker 1: is the tenant that they pick. They don't go through

663
00:33:16,800 --> 00:33:20,600
Speaker 1: all the proper vetting requirements to find a person who

664
00:33:20,680 --> 00:33:22,000
Speaker 1: is going to take care of their property and who

665
00:33:22,040 --> 00:33:24,840
Speaker 1: is qualified to rent the property. So what's the prime

666
00:33:24,880 --> 00:33:26,320
Speaker 1: method and why is that so important?

667
00:33:26,680 --> 00:33:29,840
Speaker 3: Oh? Yeah, So the prime method is for basically a

668
00:33:29,840 --> 00:33:33,400
Speaker 3: method I use to find really high quality tenants. So

669
00:33:33,520 --> 00:33:36,320
Speaker 3: first I figure out, okay, who's my tenant avatar, right,

670
00:33:36,320 --> 00:33:40,000
Speaker 3: who's my perfect tenant? And then I try to figure out, okay,

671
00:33:40,000 --> 00:33:43,160
Speaker 3: where does that tenant hang out? So P stands for

672
00:33:43,400 --> 00:33:47,480
Speaker 3: placement of advertisements or you know, basically where you're placing

673
00:33:47,480 --> 00:33:51,800
Speaker 3: your ads. So if I'm like marketing to college students,

674
00:33:51,840 --> 00:33:54,640
Speaker 3: I will want to maybe post on and you don't

675
00:33:54,680 --> 00:33:56,120
Speaker 3: have to do this, but you know, you could post

676
00:33:56,200 --> 00:33:59,960
Speaker 3: on campus bulletin boards. The most common method I use

677
00:34:00,200 --> 00:34:03,560
Speaker 3: is getting out too these Facebook housing groups. There's a

678
00:34:03,680 --> 00:34:08,120
Speaker 3: specificly a lot of off campus Facebook housing groups for

679
00:34:08,200 --> 00:34:11,960
Speaker 3: student housing, so I will post there. I will go

680
00:34:12,000 --> 00:34:17,279
Speaker 3: on like roomies dot com. Obviously there's like Craigslist. There's

681
00:34:17,280 --> 00:34:21,440
Speaker 3: something called u loop, which is university Loop. It basically

682
00:34:21,520 --> 00:34:25,120
Speaker 3: is a site specifically for university housing. And so I

683
00:34:25,120 --> 00:34:28,839
Speaker 3: will just get onto all these student affiliated sites and

684
00:34:29,480 --> 00:34:33,080
Speaker 3: student housing sites so that I specifically can find students

685
00:34:33,960 --> 00:34:38,720
Speaker 3: our stands for reviewing social media. So like for Facebook

686
00:34:38,719 --> 00:34:42,840
Speaker 3: housing groups, somebody contacts me through Facebook, I can quickly

687
00:34:42,840 --> 00:34:46,040
Speaker 3: click into their profile and see are they like partying

688
00:34:46,080 --> 00:34:49,360
Speaker 3: all the time, you know, drinking alcohol and drugs and

689
00:34:49,360 --> 00:34:52,000
Speaker 3: stuff like that, or are they you know, somebody who's

690
00:34:52,040 --> 00:34:55,080
Speaker 3: more serious about their studies. Maybe they're pursuing a doctorate

691
00:34:55,200 --> 00:34:56,000
Speaker 3: or something like that.

692
00:34:56,239 --> 00:34:59,120
Speaker 1: So if you see keg stands, you stop that conversation immediately.

693
00:34:59,280 --> 00:35:04,520
Speaker 3: Yeah, exactly, So, yeah, I really pay attention to that stuff,

694
00:35:04,560 --> 00:35:07,439
Speaker 3: and once you get one good quality tenant in there,

695
00:35:08,040 --> 00:35:11,640
Speaker 3: typically they also have really high quality, you know, tenant

696
00:35:11,680 --> 00:35:14,080
Speaker 3: friends that they can bring in. Like let's say I

697
00:35:14,080 --> 00:35:16,319
Speaker 3: bring in a pharmacy student, and then they bring in

698
00:35:16,360 --> 00:35:19,680
Speaker 3: their group of five pharmacy friends. You know, it just

699
00:35:19,719 --> 00:35:22,880
Speaker 3: turns out to be a much better culture. I stands

700
00:35:22,880 --> 00:35:26,680
Speaker 3: for identifying what type of tenant are they? So when

701
00:35:26,680 --> 00:35:29,480
Speaker 3: you talk with them through email or phone, are they

702
00:35:29,600 --> 00:35:32,480
Speaker 3: very needy? Are they like asking for a lot of things,

703
00:35:32,640 --> 00:35:35,839
Speaker 3: or they kind of act a little bit entitled? You know,

704
00:35:35,880 --> 00:35:38,520
Speaker 3: I try to avoid that type of tenant who's like

705
00:35:38,600 --> 00:35:44,439
Speaker 3: very needy. Let's see M stands for measuring responsiveness. So

706
00:35:44,719 --> 00:35:47,799
Speaker 3: the more responsive they are, like if they're getting their

707
00:35:47,800 --> 00:35:51,040
Speaker 3: paperwork back to you really quickly, I find that they're

708
00:35:51,360 --> 00:35:53,000
Speaker 3: you know, those types of tenants are a lot more

709
00:35:53,040 --> 00:35:57,000
Speaker 3: responsible as well. So kind of figure out, okay, are

710
00:35:57,000 --> 00:36:00,160
Speaker 3: they responsive and getting everything back to me really quickly?

711
00:36:01,080 --> 00:36:04,600
Speaker 3: And then E stands for ensuring proof of income. So

712
00:36:05,160 --> 00:36:08,279
Speaker 3: I always check the proof of income to make sure

713
00:36:08,320 --> 00:36:10,839
Speaker 3: that they're able to pay the rent. Usually I want

714
00:36:10,880 --> 00:36:13,839
Speaker 3: three times the rent coming in as income. So let's

715
00:36:13,840 --> 00:36:16,160
Speaker 3: say they're paying seven hundred a month, I want to

716
00:36:16,200 --> 00:36:18,439
Speaker 3: see at least twenty one hundred dollars a month coming

717
00:36:18,480 --> 00:36:21,239
Speaker 3: in from usually one of the parents, or if the

718
00:36:21,280 --> 00:36:25,240
Speaker 3: student has a financial aid or a stipend or student loans.

719
00:36:25,560 --> 00:36:29,040
Speaker 3: They have multiple ways to pay the rent, and usually

720
00:36:29,120 --> 00:36:33,640
Speaker 3: I invest in universities or nearby universities where the student's

721
00:36:33,680 --> 00:36:37,359
Speaker 3: paying like twenty thousand or forty thousand dollars intuition, So

722
00:36:37,680 --> 00:36:40,319
Speaker 3: to pay seven thousand dollars in rent, you know, if

723
00:36:40,320 --> 00:36:42,520
Speaker 3: they have the means to pay forty thousand dollars intuition

724
00:36:42,600 --> 00:36:45,160
Speaker 3: a year, they have the means to usually pay seven

725
00:36:45,160 --> 00:36:46,520
Speaker 3: thousand dollars in rent a year.

726
00:36:46,680 --> 00:36:49,759
Speaker 2: Very cool you. So you talked about how originally you

727
00:36:49,800 --> 00:36:53,600
Speaker 2: were purchasing in Stockton, California. Sounds like a pleasant, nice

728
00:36:53,600 --> 00:36:56,879
Speaker 2: place to live, but then you also mentioned Ohio. Talk

729
00:36:56,880 --> 00:37:01,560
Speaker 2: about the logistic challenges of investing in different parts of

730
00:37:01,560 --> 00:37:04,520
Speaker 2: the country because like a lot of what you're able

731
00:37:04,600 --> 00:37:07,800
Speaker 2: to capitalize on when you're purchasing properties in the same

732
00:37:08,160 --> 00:37:11,920
Speaker 2: town or same neighborhood are it's the scale that you're

733
00:37:11,960 --> 00:37:14,799
Speaker 2: able to achieve and the ability to line up a oh,

734
00:37:14,800 --> 00:37:16,880
Speaker 2: I've got this great plumber by the way, swing by

735
00:37:16,880 --> 00:37:19,960
Speaker 2: this house as well, do this exactly, or you pay

736
00:37:20,040 --> 00:37:24,200
Speaker 2: for long care exterior maintenance. I'm sure you've seen the

737
00:37:24,239 --> 00:37:27,799
Speaker 2: advantage there. Talk about lining up contractors and some of

738
00:37:27,800 --> 00:37:30,880
Speaker 2: the other logistical challenges when you are purchasing in separate

739
00:37:30,920 --> 00:37:32,040
Speaker 2: cities and separate states.

740
00:37:32,200 --> 00:37:35,840
Speaker 3: Oh yeah, definitely. So you know, I say that I

741
00:37:35,880 --> 00:37:38,640
Speaker 3: felt very lonely when I got started in real estate investing,

742
00:37:38,680 --> 00:37:40,480
Speaker 3: and I felt like I was on my own. But

743
00:37:40,560 --> 00:37:42,680
Speaker 3: the truth is in real estate you're never on your

744
00:37:42,719 --> 00:37:45,200
Speaker 3: own because you always have a team, or you start

745
00:37:45,239 --> 00:37:48,040
Speaker 3: building up a team. And what I recommend is to

746
00:37:48,600 --> 00:37:50,359
Speaker 3: kind of like what I do is I have an

747
00:37:50,400 --> 00:37:53,960
Speaker 3: Excel list of all the contractors that are you know,

748
00:37:54,000 --> 00:37:56,920
Speaker 3: I vetted, I found that they're trustworthy, and I have

749
00:37:57,040 --> 00:38:01,000
Speaker 3: one for every profession. So I'll have like one or

750
00:38:01,000 --> 00:38:04,040
Speaker 3: two actually for every profession because you want to have backups.

751
00:38:04,239 --> 00:38:06,680
Speaker 3: So for example, like plumbing, I will have like two

752
00:38:06,719 --> 00:38:11,400
Speaker 3: contractors for plumbing, or two plumbers. I'll have two four electricians,

753
00:38:11,960 --> 00:38:15,120
Speaker 3: I will have two roofers. I will have two people

754
00:38:15,120 --> 00:38:18,080
Speaker 3: who are great at HVAC. I'll have like two people

755
00:38:18,080 --> 00:38:22,160
Speaker 3: who are good at sewage line replacements and so on

756
00:38:22,200 --> 00:38:25,960
Speaker 3: and so forth. And basically, once you create that list.

757
00:38:26,800 --> 00:38:30,120
Speaker 3: If something happens to your property, like there's a backup,

758
00:38:30,400 --> 00:38:32,799
Speaker 3: all you have to do is call plumber number one

759
00:38:32,840 --> 00:38:35,240
Speaker 3: or plumber number two. They'll go over to the house.

760
00:38:35,600 --> 00:38:37,720
Speaker 3: You know, you might give them the lock box code.

761
00:38:37,719 --> 00:38:39,560
Speaker 3: Maybe it's a temporary code to get in if you

762
00:38:39,600 --> 00:38:42,680
Speaker 3: don't trust them, but usually eventually I end up trusting

763
00:38:42,760 --> 00:38:45,359
Speaker 3: these plumbers and electricians and then they'll go in.

764
00:38:45,520 --> 00:38:47,800
Speaker 2: Basically, then are you doing this across all the different

765
00:38:47,880 --> 00:38:50,480
Speaker 2: cities and states that you are looking to invest in.

766
00:38:50,560 --> 00:38:53,080
Speaker 3: It's just yes, I do. So that's why it's so

767
00:38:53,120 --> 00:38:57,239
Speaker 3: important to really scale up in one market at a time.

768
00:38:57,600 --> 00:39:00,560
Speaker 3: So the first market for me California, I scaled up

769
00:39:00,560 --> 00:39:02,919
Speaker 3: to six properties and then I sold my first one,

770
00:39:03,400 --> 00:39:07,000
Speaker 3: and then I bought eight in Ohio, eight student rentals

771
00:39:07,040 --> 00:39:11,279
Speaker 3: in Ohio, and then I scaled up there. I'm sorry, yeah,

772
00:39:11,400 --> 00:39:13,520
Speaker 3: I bought one at first obviously, and then I scaled

773
00:39:13,520 --> 00:39:17,040
Speaker 3: to eight. So basically, you want to be in a

774
00:39:17,080 --> 00:39:21,240
Speaker 3: one or two or maybe three cities. But the reason

775
00:39:21,239 --> 00:39:23,319
Speaker 3: thing is because every time you started in a new city,

776
00:39:23,360 --> 00:39:25,840
Speaker 3: you've got to build another team, right, But once you

777
00:39:25,920 --> 00:39:28,759
Speaker 3: build up that team, it becomes self sustaining because like

778
00:39:28,800 --> 00:39:31,799
Speaker 3: as you said, you know that plumber. He can swing

779
00:39:31,920 --> 00:39:34,560
Speaker 3: by all your houses and check for all the plumbing

780
00:39:34,560 --> 00:39:35,160
Speaker 3: problems that fix.

781
00:39:35,600 --> 00:39:38,840
Speaker 1: So you talked about, Hey, I started off as a pharmacist.

782
00:39:38,960 --> 00:39:41,600
Speaker 1: I'm working extra. I'm building up the bank roll to

783
00:39:41,880 --> 00:39:45,760
Speaker 1: have the down payment to buy these initial properties starting

784
00:39:45,760 --> 00:39:47,960
Speaker 1: at one a year. So you started using your own

785
00:39:47,960 --> 00:39:50,399
Speaker 1: money to build that rental portfolio. But now I think

786
00:39:50,440 --> 00:39:52,680
Speaker 1: I've heard you say that you're using capital. You're raising

787
00:39:52,719 --> 00:39:57,799
Speaker 1: capital to grow your real estate holdings faster. Yeah, what

788
00:39:57,880 --> 00:40:00,000
Speaker 1: are the pros and cons of raising capital? How you

789
00:40:00,040 --> 00:40:00,480
Speaker 1: doing that?

790
00:40:00,920 --> 00:40:02,120
Speaker 2: And what's that look like?

791
00:40:02,640 --> 00:40:05,640
Speaker 3: Yeah, first off, it wasn't until like year seven or

792
00:40:05,640 --> 00:40:08,080
Speaker 3: something where I was like, oh, you know, I have

793
00:40:08,160 --> 00:40:12,280
Speaker 3: some family members who they know what I'm doing, because

794
00:40:12,280 --> 00:40:16,600
Speaker 3: you know, family members can be nosy, and they're like, hey,

795
00:40:16,640 --> 00:40:19,560
Speaker 3: can I get in on this. I'm like maybe. So

796
00:40:20,600 --> 00:40:23,120
Speaker 3: I've raised I think about two hundred thousand or something

797
00:40:23,160 --> 00:40:28,040
Speaker 3: from family members, not one hundred percent necessary again, but

798
00:40:28,520 --> 00:40:30,759
Speaker 3: you know, when I first started again, I bought like

799
00:40:30,880 --> 00:40:35,200
Speaker 3: maybe seven before I actually got on my first investor.

800
00:40:35,320 --> 00:40:38,360
Speaker 3: But I guess like once you start building a reputation,

801
00:40:38,960 --> 00:40:41,920
Speaker 3: I guess people start noticing and then a lot of

802
00:40:41,960 --> 00:40:44,319
Speaker 3: times they want to invest with you, and if you

803
00:40:44,400 --> 00:40:48,120
Speaker 3: trust them, you can go ahead and make a deal

804
00:40:48,160 --> 00:40:50,560
Speaker 3: with them. A lot of my deals, though, are structured

805
00:40:50,600 --> 00:40:54,160
Speaker 3: as debt deals. I never really want to give out equity.

806
00:40:54,600 --> 00:40:57,279
Speaker 3: I prefer to do debt because there's a lot of

807
00:40:57,600 --> 00:41:01,240
Speaker 3: more legal ramifications if you offer equity in your property

808
00:41:01,280 --> 00:41:05,000
Speaker 3: to investors. In fact, there's like the SEC that gets involved.

809
00:41:05,200 --> 00:41:10,040
Speaker 3: You have to do something called like a PPM private memorandum,

810
00:41:10,160 --> 00:41:13,399
Speaker 3: private something memorandum, and so it just it's a lot

811
00:41:13,440 --> 00:41:16,600
Speaker 3: more complicated, and like a PPM, it costs like like

812
00:41:16,719 --> 00:41:18,719
Speaker 3: five thousand and seven dollars or no, actually I think

813
00:41:18,719 --> 00:41:23,640
Speaker 3: it's like ten thousand to fifteen thousand, sorry to do. So, yeah,

814
00:41:23,760 --> 00:41:26,319
Speaker 3: usually it's better to do debt. And so what I

815
00:41:26,360 --> 00:41:29,040
Speaker 3: do is, I'll, you know, borrow let's say fifty thousand

816
00:41:29,080 --> 00:41:31,600
Speaker 3: dollars from a family member and it's a minimum of

817
00:41:31,680 --> 00:41:36,320
Speaker 3: fifty thousand, and it's a twelve percent return. So basically

818
00:41:36,920 --> 00:41:39,399
Speaker 3: they send the fifty thousand and then they get five

819
00:41:39,480 --> 00:41:43,160
Speaker 3: hundred dollars a month from a debt payment, and it's

820
00:41:43,200 --> 00:41:46,920
Speaker 3: just interest, not equity. Again, So and then I'll do

821
00:41:47,040 --> 00:41:49,600
Speaker 3: like a five year loan term or something like that.

822
00:41:49,840 --> 00:41:51,640
Speaker 3: And at the end of the five years, like a

823
00:41:51,719 --> 00:41:54,160
Speaker 3: year before, like a year four or something like that,

824
00:41:54,400 --> 00:41:56,440
Speaker 3: I'll ask them, Hey, do you want to extend that

825
00:41:56,560 --> 00:41:59,640
Speaker 3: loan or you want your fifty thousand dollars back? And so,

826
00:42:00,320 --> 00:42:02,560
Speaker 3: you know, I need some time ahead of time to

827
00:42:03,000 --> 00:42:05,560
Speaker 3: let's say I save up a couple months worth of

828
00:42:05,640 --> 00:42:07,480
Speaker 3: cash flow to pay it back if they want to,

829
00:42:07,920 --> 00:42:09,759
Speaker 3: you know, get out of the deal. But a lot

830
00:42:09,800 --> 00:42:12,800
Speaker 3: of times, you know, once somebody is seeing that return

831
00:42:12,960 --> 00:42:15,480
Speaker 3: for like five years, they're like, Oh, might as well

832
00:42:15,560 --> 00:42:17,560
Speaker 3: keep it in there, unless I'm really desperate, you know.

833
00:42:17,640 --> 00:42:22,440
Speaker 2: So we don't often advise folks to take money from

834
00:42:22,560 --> 00:42:24,799
Speaker 2: family members. It feels like it can be something that

835
00:42:24,840 --> 00:42:30,279
Speaker 2: could lead to hurt relationships issues, maybe at Thanksgiving. What

836
00:42:30,480 --> 00:42:32,520
Speaker 2: are you outlining when you enter into some of these

837
00:42:32,560 --> 00:42:35,680
Speaker 2: agreements with your family members, Like, it sounds like you

838
00:42:35,719 --> 00:42:38,319
Speaker 2: are outlining some very clear terms. It sounds like you've

839
00:42:38,320 --> 00:42:42,239
Speaker 2: got good communication. What are some other highlights or specific

840
00:42:42,280 --> 00:42:43,920
Speaker 2: points that you're making sure to include.

841
00:42:44,239 --> 00:42:47,279
Speaker 3: Yeah, you definitely need a written agreement. Some people are like, oh,

842
00:42:47,360 --> 00:42:50,320
Speaker 3: it's family, you know, maybe you just do it verbal.

843
00:42:51,200 --> 00:42:54,680
Speaker 3: Absolutely not. You definitely have to have a contract written.

844
00:42:54,920 --> 00:42:57,920
Speaker 3: It should be written by an attorney, and the attorney

845
00:42:57,960 --> 00:43:01,920
Speaker 3: will be able to kind of give everyone, tell everyone

846
00:43:02,080 --> 00:43:05,120
Speaker 3: what's going to look like and what are some things

847
00:43:05,160 --> 00:43:07,759
Speaker 3: to look out for. Like let's say I don't know,

848
00:43:07,840 --> 00:43:12,080
Speaker 3: maybe the investor passes away. What happens to that mode, right,

849
00:43:12,520 --> 00:43:15,839
Speaker 3: What happens is the operators pass away. Right. So those

850
00:43:15,840 --> 00:43:18,799
Speaker 3: are awesome things you really have to think through when

851
00:43:18,800 --> 00:43:22,919
Speaker 3: you do the loan. But typically if you do more

852
00:43:22,920 --> 00:43:26,960
Speaker 3: of like a loan versus your investing in equity, it's

853
00:43:27,040 --> 00:43:29,319
Speaker 3: just a lot simpler because it's just like you get

854
00:43:29,320 --> 00:43:32,120
Speaker 3: a twelve percent rate for five years, you're not allowed

855
00:43:32,160 --> 00:43:34,799
Speaker 3: to take out that fifty thousand before to five years ends.

856
00:43:35,080 --> 00:43:38,839
Speaker 3: And you know, those are the biggest two terms that

857
00:43:38,920 --> 00:43:41,759
Speaker 3: you need to know, and so it's pretty easy to

858
00:43:41,800 --> 00:43:45,000
Speaker 3: explain to people, and you do have to be very

859
00:43:45,000 --> 00:43:47,480
Speaker 3: clear upfront that this is what it's going to look like. Like.

860
00:43:47,560 --> 00:43:50,080
Speaker 3: You can't just, you know, emergency take out that fifty

861
00:43:50,120 --> 00:43:53,040
Speaker 3: thousand if you want your fifty thousand dollars back. Basically

862
00:43:53,120 --> 00:43:55,359
Speaker 3: you would have to find a replacement on the loan,

863
00:43:55,800 --> 00:43:58,359
Speaker 3: so somebody else to put in fifty thousand in order

864
00:43:58,400 --> 00:43:59,880
Speaker 3: for you to take out your fifty thousand.

865
00:44:00,080 --> 00:44:03,239
Speaker 1: Yeah, it's it's not a very liquid investment. They have

866
00:44:03,280 --> 00:44:04,080
Speaker 1: to know that upfront.

867
00:44:04,280 --> 00:44:06,959
Speaker 3: Yes, exactly, that's the most important thing I would say.

868
00:44:08,200 --> 00:44:11,360
Speaker 3: But yeah, I mean I don't really see. I mean,

869
00:44:11,400 --> 00:44:15,560
Speaker 3: other than those things you have to think about, you know,

870
00:44:15,680 --> 00:44:18,440
Speaker 3: I enjoy doing business with family because the way I

871
00:44:18,480 --> 00:44:21,279
Speaker 3: see it as like we're also building their wealth too,

872
00:44:22,080 --> 00:44:24,719
Speaker 3: because they are making a very good return, better than

873
00:44:24,719 --> 00:44:28,160
Speaker 3: the stock market, and so it's like we're building not

874
00:44:28,280 --> 00:44:30,600
Speaker 3: just our wealth with the family wealth. And I was like,

875
00:44:30,800 --> 00:44:33,200
Speaker 3: you know, once I kind of reframed it that way,

876
00:44:33,520 --> 00:44:36,640
Speaker 3: I felt like more comfortable with it. Obviously, never do

877
00:44:36,719 --> 00:44:40,640
Speaker 3: business with somebody don't like one hundred percent trust. But

878
00:44:40,800 --> 00:44:43,160
Speaker 3: I grew up with these family. I'm very close with

879
00:44:43,200 --> 00:44:45,400
Speaker 3: my family, and I grew up with them and everything.

880
00:44:45,760 --> 00:44:49,520
Speaker 3: So I feel, you know, comfortable taking on an investment

881
00:44:49,680 --> 00:44:50,320
Speaker 3: from family.

882
00:44:50,560 --> 00:44:51,399
Speaker 2: Yeah. Very cool.

883
00:44:51,760 --> 00:44:53,839
Speaker 1: We've got a few more questions to get to with you, Ryan,

884
00:44:53,880 --> 00:44:58,600
Speaker 1: including how how does what's happening in the macro economic

885
00:44:58,640 --> 00:45:02,080
Speaker 1: the overall real estate market and the shifts there, how

886
00:45:02,080 --> 00:45:04,799
Speaker 1: does that change how you think about investing. We'll get

887
00:45:04,800 --> 00:45:06,040
Speaker 1: to that and more right after this.

888
00:45:13,880 --> 00:45:16,200
Speaker 2: We are back from the break talking about investing in

889
00:45:16,320 --> 00:45:20,279
Speaker 2: real estate with Ryan Chaw, specifically student housing. I think

890
00:45:20,320 --> 00:45:22,960
Speaker 2: it's a it's the strategy we haven't really talked too

891
00:45:23,000 --> 00:45:25,960
Speaker 2: much about here on the show. But Ryan, are you

892
00:45:26,160 --> 00:45:29,160
Speaker 2: planning to continue to expand your overall portfolio, your your

893
00:45:29,239 --> 00:45:30,560
Speaker 2: personal empire?

894
00:45:31,400 --> 00:45:31,600
Speaker 3: Sure?

895
00:45:31,680 --> 00:45:33,960
Speaker 2: Because I mean now like you're financially independent now. You

896
00:45:34,239 --> 00:45:36,880
Speaker 2: talked about how you were wanting that financial freedom, Like

897
00:45:36,920 --> 00:45:39,040
Speaker 2: that's how it is that you got into it. Have

898
00:45:39,160 --> 00:45:42,720
Speaker 2: your ambitions grown? Are you wanting more Michelin Star meals?

899
00:45:42,719 --> 00:45:45,040
Speaker 2: Like not just once a month? Maybe it's like every night?

900
00:45:45,400 --> 00:45:47,239
Speaker 2: How about it like once a week? Baby?

901
00:45:48,000 --> 00:45:50,359
Speaker 3: I think I would get really fat if I did

902
00:45:50,400 --> 00:45:53,560
Speaker 3: once a week. Those meals are like three thousand calories.

903
00:45:54,080 --> 00:45:57,279
Speaker 3: But yeah, I mean for me, I always want to grow.

904
00:45:57,440 --> 00:45:59,560
Speaker 3: I don't see why not, right, I always I like

905
00:45:59,600 --> 00:46:03,360
Speaker 3: the child, for one thing, And I don't feel comfortable

906
00:46:03,520 --> 00:46:07,839
Speaker 3: just sitting on a beach sipping Margarita's, you know. So

907
00:46:07,920 --> 00:46:10,759
Speaker 3: I would say I'm always definitely wanting to grow. And

908
00:46:10,840 --> 00:46:14,120
Speaker 3: a portion of the cash flow that I'm making I

909
00:46:14,160 --> 00:46:17,600
Speaker 3: will obviously use to cover all my expenses, but everything

910
00:46:17,600 --> 00:46:20,160
Speaker 3: else if I'm not using it or bookmarking it for

911
00:46:20,280 --> 00:46:24,440
Speaker 3: vacation or you know, a missilin Star restaurant, then I

912
00:46:24,480 --> 00:46:27,960
Speaker 3: will reinvest it because why not, right? And so I

913
00:46:28,040 --> 00:46:31,000
Speaker 3: still still stick to buying at least one property a year,

914
00:46:31,800 --> 00:46:33,920
Speaker 3: and I hope to eventually someday get to like one

915
00:46:33,960 --> 00:46:36,799
Speaker 3: hundred properties. We'll see. You just have to have a

916
00:46:36,840 --> 00:46:39,840
Speaker 3: really good team with that. And so one of my

917
00:46:39,840 --> 00:46:43,320
Speaker 3: biggest focuses right now with the scaling is just training

918
00:46:43,360 --> 00:46:46,680
Speaker 3: my team. I meet with them every week, and you

919
00:46:46,719 --> 00:46:49,120
Speaker 3: don't necessarily have to do that, but I have a

920
00:46:49,160 --> 00:46:52,759
Speaker 3: full time VA, I have a twenty hour week via

921
00:46:52,920 --> 00:46:56,000
Speaker 3: as well, and I have a bookkeeper. So, you know,

922
00:46:56,280 --> 00:46:58,719
Speaker 3: just investing in them so that I can continue to

923
00:46:58,760 --> 00:47:00,000
Speaker 3: scale has been my phone.

924
00:47:00,800 --> 00:47:04,040
Speaker 1: How how do you like the macroeconomic realities that are

925
00:47:04,080 --> 00:47:08,000
Speaker 1: happening when it comes to supply in the housing market, prices,

926
00:47:08,200 --> 00:47:11,120
Speaker 1: interest rates, How does that impact the offers you're making

927
00:47:11,200 --> 00:47:14,600
Speaker 1: in your likelihood to because because also if you were

928
00:47:14,640 --> 00:47:16,080
Speaker 1: like I'm going to get I'm going to buy a

929
00:47:16,080 --> 00:47:19,279
Speaker 1: house every year no matter what. Well, what if it's

930
00:47:19,280 --> 00:47:22,440
Speaker 1: a year where deals are harder to find and I

931
00:47:22,480 --> 00:47:24,479
Speaker 1: don't know, maybe maybe you say I'll maybe I'll hold

932
00:47:24,480 --> 00:47:26,000
Speaker 1: off for now? Do two next year. I don't know,

933
00:47:26,000 --> 00:47:29,560
Speaker 1: how are you thinking about growth when it's become harder

934
00:47:29,560 --> 00:47:30,440
Speaker 1: to find great deals.

935
00:47:30,760 --> 00:47:33,719
Speaker 3: Yeah, So, first off, the first rule I learned in

936
00:47:33,719 --> 00:47:36,239
Speaker 3: real estate has never try to time the market. Like

937
00:47:36,440 --> 00:47:38,880
Speaker 3: I know, there are definitely bad times in real estate,

938
00:47:39,000 --> 00:47:42,719
Speaker 3: right but like two thousand and eight obviously, But what

939
00:47:42,760 --> 00:47:45,120
Speaker 3: you want to do is actually double down when nobody

940
00:47:45,120 --> 00:47:48,759
Speaker 3: else is buying, because in many ways, because a lot

941
00:47:48,800 --> 00:47:51,319
Speaker 3: of buyers are scared away, they're like, oh, interest rates

942
00:47:51,360 --> 00:47:54,319
Speaker 3: are so high, I don't feel like I really want

943
00:47:54,360 --> 00:47:56,319
Speaker 3: to buy a house, And so the sellers who are

944
00:47:56,320 --> 00:47:58,120
Speaker 3: trying to get rid of the house they have nobody

945
00:47:58,160 --> 00:48:01,400
Speaker 3: to sell to. So you have a law more negotiating power,

946
00:48:01,640 --> 00:48:04,440
Speaker 3: and you could get a very significant discount on a property.

947
00:48:04,719 --> 00:48:07,359
Speaker 3: And then let's say, you know, interest rates are high now,

948
00:48:07,640 --> 00:48:10,480
Speaker 3: but in like two or three years, maybe five years, whatever,

949
00:48:10,680 --> 00:48:13,319
Speaker 3: interest rates will eventually drop because they always do it

950
00:48:13,400 --> 00:48:18,279
Speaker 3: cyclical with the depth cycle that you know occurs, and

951
00:48:18,560 --> 00:48:21,520
Speaker 3: eventually that seven percent interest rate will be like five

952
00:48:21,560 --> 00:48:25,200
Speaker 3: percent maybe, and you can then refinance all of your

953
00:48:25,239 --> 00:48:28,239
Speaker 3: properties and save Not only you get a discount on

954
00:48:28,280 --> 00:48:31,719
Speaker 3: the property, but you also, you know, get that ability

955
00:48:31,760 --> 00:48:34,080
Speaker 3: to refinance, so you kind of get the best of

956
00:48:34,080 --> 00:48:37,560
Speaker 3: both worlds if you buy now, for instance. But what

957
00:48:37,600 --> 00:48:41,040
Speaker 3: I would say is like, if you look back in

958
00:48:41,120 --> 00:48:44,000
Speaker 3: time and you look at like where prices were back then,

959
00:48:44,760 --> 00:48:46,680
Speaker 3: almost always are like, oh yeah, you got it for

960
00:48:46,760 --> 00:48:50,759
Speaker 3: a really good deal. It's so so cheap. But you know,

961
00:48:50,920 --> 00:48:53,240
Speaker 3: back then in the moment, it felt like that house

962
00:48:53,320 --> 00:48:56,600
Speaker 3: was very expensive because of where wages were, et cetera.

963
00:48:57,040 --> 00:49:01,640
Speaker 3: So with inflation, basically what happens is the dept in

964
00:49:01,719 --> 00:49:05,719
Speaker 3: real estate gets the inflation roads away at the depth

965
00:49:05,760 --> 00:49:08,200
Speaker 3: it gets. It makes the depth cheaper and cheaper every

966
00:49:08,239 --> 00:49:13,080
Speaker 3: single year. So by that logic, basically they say the

967
00:49:13,080 --> 00:49:16,560
Speaker 3: best time to buy is now. Are technically the best

968
00:49:16,560 --> 00:49:18,600
Speaker 3: time to dubuy was ten years ago. Sorry, but the

969
00:49:18,600 --> 00:49:21,239
Speaker 3: second best time is now. And that's always going to

970
00:49:21,280 --> 00:49:23,800
Speaker 3: be true in real estate because real estate prices always

971
00:49:23,840 --> 00:49:30,799
Speaker 3: appreciate over time, and with how inflation works, it basically

972
00:49:31,040 --> 00:49:33,960
Speaker 3: just it rolls away at that depth and creates more

973
00:49:34,000 --> 00:49:34,759
Speaker 3: cash flow for you.

974
00:49:35,080 --> 00:49:38,239
Speaker 1: Yeah, I think that's part of the Those are two

975
00:49:38,280 --> 00:49:41,840
Speaker 1: strong appeals for real estate investing. Is, hey, the inflation

976
00:49:41,920 --> 00:49:43,840
Speaker 1: is actually going to make your debt look less bad

977
00:49:44,280 --> 00:49:48,759
Speaker 1: over the years, and the price appreciation is kind of

978
00:49:48,760 --> 00:49:52,160
Speaker 1: happens like clockwork with the with the random exception of

979
00:49:52,239 --> 00:49:55,040
Speaker 1: the Great Recession, things like two thousand and eight. Ryan,

980
00:49:55,080 --> 00:49:57,799
Speaker 1: Thank you so much for joining us today on the podcast.

981
00:49:57,880 --> 00:50:00,680
Speaker 1: Where can our listeners find out more about you and

982
00:50:00,800 --> 00:50:02,280
Speaker 1: your investing advice?

983
00:50:02,600 --> 00:50:05,560
Speaker 3: Yeah, so I do provide coaching for getting started and

984
00:50:05,640 --> 00:50:08,680
Speaker 3: this method because it led to financial freedom for me,

985
00:50:09,120 --> 00:50:12,200
Speaker 3: and I'm just so passionate about like helping others with

986
00:50:12,320 --> 00:50:15,759
Speaker 3: doing this because it's been so powerful for me. And

987
00:50:15,960 --> 00:50:17,480
Speaker 3: so if you want to reach out, you can go

988
00:50:17,520 --> 00:50:22,040
Speaker 3: to www. Dot Newbie real Estate Investing dot com slash

989
00:50:22,120 --> 00:50:25,160
Speaker 3: guide and you just sign up your email there and

990
00:50:25,200 --> 00:50:28,000
Speaker 3: it'll give you a free pdf on how to get

991
00:50:28,000 --> 00:50:31,440
Speaker 3: started and student housing, how to get started in real

992
00:50:31,520 --> 00:50:33,840
Speaker 3: estate in general, and a lot of the tips and

993
00:50:33,920 --> 00:50:37,759
Speaker 3: mistakes that I made so that you can learn from them.

994
00:50:38,120 --> 00:50:40,880
Speaker 3: You also get on my newsletter list where I also

995
00:50:40,920 --> 00:50:45,720
Speaker 3: provide like random real estate tips and help or getting started.

996
00:50:45,960 --> 00:50:46,399
Speaker 2: Very cool.

997
00:50:46,719 --> 00:50:48,800
Speaker 1: Ran, We appreciate you man, thanks for joining us today.

998
00:50:48,920 --> 00:50:49,480
Speaker 3: Thanks again.

999
00:50:50,520 --> 00:50:54,680
Speaker 2: Well, all right, Jill, nice little enlightening conversation with our

1000
00:50:54,719 --> 00:50:59,080
Speaker 2: guest today, Ryan Shaw talking about student housing specifically.

1001
00:50:59,400 --> 00:51:02,920
Speaker 1: I love how real estate investing doesn't have to be

1002
00:51:02,920 --> 00:51:06,719
Speaker 1: a one size fits all thing. Uh, and Ryan shows that, Hey,

1003
00:51:06,960 --> 00:51:09,759
Speaker 1: I found my niche inside of this thing called real

1004
00:51:09,880 --> 00:51:11,680
Speaker 1: estate investing and he's doing.

1005
00:51:11,480 --> 00:51:13,560
Speaker 2: Well with it. Yeah, So what's your big takeaway?

1006
00:51:13,760 --> 00:51:17,120
Speaker 1: So my big takeaway was when he was talking about

1007
00:51:17,160 --> 00:51:20,080
Speaker 1: all of the inspections he does before he buys a home,

1008
00:51:20,160 --> 00:51:24,360
Speaker 1: pretty dang thorough, very thorough, and doing your due diligence

1009
00:51:24,360 --> 00:51:28,520
Speaker 1: before making an investment is crucial. The same when we

1010
00:51:28,520 --> 00:51:31,839
Speaker 1: were talking about high standards for tenants. Both of those

1011
00:51:31,840 --> 00:51:35,080
Speaker 1: things combined made me think, oh, Ryan's not just seeing

1012
00:51:35,080 --> 00:51:38,400
Speaker 1: the dollar signs. And then he's like yeah, and going forward,

1013
00:51:38,719 --> 00:51:41,120
Speaker 1: he said, now I see the dollar signs, but I

1014
00:51:41,120 --> 00:51:44,200
Speaker 1: want to make sure that I'm taking an approach that

1015
00:51:44,360 --> 00:51:46,439
Speaker 1: ensures that those dollars are actually going to come into

1016
00:51:46,440 --> 00:51:48,560
Speaker 1: my pocket. And then I'm not going to be spending

1017
00:51:48,560 --> 00:51:52,440
Speaker 1: them needlessly on improvements to the house because I didn't

1018
00:51:52,480 --> 00:51:56,120
Speaker 1: think ahead. So I love, Yeah, with just the forethought

1019
00:51:56,160 --> 00:51:57,320
Speaker 1: he's bringing into the investments.

1020
00:51:57,320 --> 00:52:00,080
Speaker 2: So he's making the thoroughness and it's not wasting money,

1021
00:52:00,280 --> 00:52:01,920
Speaker 2: because it sounds like in a lot of cases, if

1022
00:52:01,920 --> 00:52:03,600
Speaker 2: there's some bad news that comes up, he's able just

1023
00:52:03,640 --> 00:52:06,239
Speaker 2: to take that and negotiate that that price now, which

1024
00:52:06,719 --> 00:52:08,719
Speaker 2: it's like a no brainer to if you are looking

1025
00:52:08,760 --> 00:52:11,360
Speaker 2: at buying something to have some of these specialized inspections

1026
00:52:11,400 --> 00:52:14,800
Speaker 2: done really smart. But my big takeaway is going to

1027
00:52:14,880 --> 00:52:18,080
Speaker 2: be just this approach broadly speaking, Like though, as he

1028
00:52:18,160 --> 00:52:21,080
Speaker 2: was talking through some of these houses and how he's like, oh, no, no, no,

1029
00:52:21,760 --> 00:52:23,600
Speaker 2: it was a three bedroom, now it's a six bedroom.

1030
00:52:23,640 --> 00:52:26,600
Speaker 2: And how he's just used some of these other bed No, no,

1031
00:52:26,520 --> 00:52:29,279
Speaker 2: they're not bedrooms, but they are now. And it made

1032
00:52:29,280 --> 00:52:32,040
Speaker 2: me think through, oh, what properties do I have near universities?

1033
00:52:32,120 --> 00:52:34,440
Speaker 2: Is there a way to convert this more into student housing?

1034
00:52:34,480 --> 00:52:37,759
Speaker 2: It seems like such a low piece of hanging fruit

1035
00:52:37,840 --> 00:52:40,560
Speaker 2: gel and like, obviously, why would you at least not

1036
00:52:40,600 --> 00:52:43,160
Speaker 2: consider that if that's something that if real estate a

1037
00:52:43,360 --> 00:52:45,319
Speaker 2: is something you're interested in, but b if that's something

1038
00:52:45,320 --> 00:52:47,280
Speaker 2: you already have, I think there's a way to even

1039
00:52:47,880 --> 00:52:50,560
Speaker 2: shift your strategy when it comes to a certain property.

1040
00:52:50,600 --> 00:52:52,560
Speaker 2: So I think this could be just a good takeaway

1041
00:52:52,600 --> 00:52:55,680
Speaker 2: not for new real estate investors, but also for folks

1042
00:52:55,680 --> 00:52:57,680
Speaker 2: out there like us. You already have properties, yeah, to

1043
00:52:57,960 --> 00:52:59,000
Speaker 2: think about converting them.

1044
00:52:59,080 --> 00:53:01,239
Speaker 1: And really, what he's talking about there is forced appreciation,

1045
00:53:01,280 --> 00:53:03,680
Speaker 1: because what everybody else sees what the mlscs and anybody

1046
00:53:03,680 --> 00:53:06,680
Speaker 1: who looks and doesn't dig a level deeper, they see

1047
00:53:06,760 --> 00:53:09,320
Speaker 1: a three two and this would get me roughly this amount,

1048
00:53:09,440 --> 00:53:11,960
Speaker 1: and he says no, no, no no. With some drywall and

1049
00:53:12,600 --> 00:53:15,799
Speaker 1: uh and in a couple days worth of work, I

1050
00:53:15,800 --> 00:53:17,080
Speaker 1: can throw a couple.

1051
00:53:16,880 --> 00:53:20,560
Speaker 2: Up Extrafore it's like something even I could do. Yeah,

1052
00:53:20,600 --> 00:53:23,920
Speaker 2: maybe don't skimp on the rock woll So the sound.

1053
00:53:23,840 --> 00:53:28,640
Speaker 1: And acoustic it's amazing when somebody else sees he sees

1054
00:53:28,680 --> 00:53:30,839
Speaker 1: something a little bit extra, He's like, well, how big

1055
00:53:30,880 --> 00:53:32,320
Speaker 1: of those common rooms? And how could I kind of

1056
00:53:32,360 --> 00:53:33,840
Speaker 1: siphon off another bedroom or two from this?

1057
00:53:34,320 --> 00:53:34,400
Speaker 2: Uh?

1058
00:53:34,520 --> 00:53:37,080
Speaker 1: And sounds like it's it's working out well for him.

1059
00:53:37,239 --> 00:53:39,200
Speaker 2: Yeah, And so I wanted to mention that because so

1060
00:53:39,280 --> 00:53:41,239
Speaker 2: last week when we talked with Nick, and that was

1061
00:53:41,360 --> 00:53:44,200
Speaker 2: essentially one of his quote unquote hacks, was the fact

1062
00:53:44,239 --> 00:53:46,239
Speaker 2: that he got a property where he was living in

1063
00:53:46,239 --> 00:53:46,720
Speaker 2: the basement.

1064
00:53:46,800 --> 00:53:46,960
Speaker 3: Right.

1065
00:53:47,239 --> 00:53:49,040
Speaker 2: But it seemed like that in my mind, didn't seem

1066
00:53:49,080 --> 00:53:50,960
Speaker 2: quite as replicable because it's kind of like, oh, here's

1067
00:53:50,960 --> 00:53:52,799
Speaker 2: a diamond in the rough. They just had this thing

1068
00:53:52,880 --> 00:53:55,719
Speaker 2: categorized incorrectly. He just happened to be the one that

1069
00:53:55,760 --> 00:53:57,400
Speaker 2: found it. This is the way that you're able to

1070
00:53:57,480 --> 00:54:00,400
Speaker 2: essentially do that, possibly on repeat, as long as you

1071
00:54:00,480 --> 00:54:02,719
Speaker 2: have the kind of tenants who are looking to move

1072
00:54:02,719 --> 00:54:05,719
Speaker 2: into a house like that, specifically around a university for sure.

1073
00:54:05,719 --> 00:54:06,680
Speaker 2: So I like that.

1074
00:54:06,880 --> 00:54:07,120
Speaker 3: All right?

1075
00:54:07,160 --> 00:54:08,600
Speaker 1: What was your take on the beer we have? This

1076
00:54:08,600 --> 00:54:11,480
Speaker 1: one's called Hell or High Twilight. You're used to probably

1077
00:54:11,520 --> 00:54:14,359
Speaker 1: the Hell or High Water Island, No, yeah, twenty first

1078
00:54:14,400 --> 00:54:15,160
Speaker 1: Amendment brewery.

1079
00:54:15,160 --> 00:54:15,919
Speaker 2: But I found this.

1080
00:54:15,920 --> 00:54:19,080
Speaker 1: This is just a citrus wheat ale from a classic

1081
00:54:19,080 --> 00:54:19,520
Speaker 1: old brewery.

1082
00:54:19,520 --> 00:54:22,200
Speaker 2: What are your thoughts? Very citrusy, It's like so good,

1083
00:54:22,560 --> 00:54:25,080
Speaker 2: I would say a drink really get clean. It wasn't

1084
00:54:25,120 --> 00:54:28,239
Speaker 2: like overly complex, it wasn't overly nuanced, but it had

1085
00:54:28,239 --> 00:54:30,760
Speaker 2: a nice like citrus flavor going on. It's a citrus,

1086
00:54:31,239 --> 00:54:35,240
Speaker 2: citrusy wheat I would say high specifically in orange citrus.

1087
00:54:35,239 --> 00:54:36,480
Speaker 2: Oh yeah, and light.

1088
00:54:37,000 --> 00:54:38,440
Speaker 1: I can almost have like a little scuret of orange

1089
00:54:38,480 --> 00:54:41,680
Speaker 1: juice in yes, yeah, yeah exactly. So yeah, nothing nothing

1090
00:54:41,800 --> 00:54:46,640
Speaker 1: overly insane about this craft beer. But also with the

1091
00:54:46,640 --> 00:54:49,759
Speaker 1: warm weather firmly in hand now, it's kind of nice

1092
00:54:49,760 --> 00:54:53,200
Speaker 1: to have a light, refreshing citrus wheat beer. I think

1093
00:54:53,200 --> 00:54:54,640
Speaker 1: it's suitable for these summer months.

1094
00:54:54,719 --> 00:54:57,919
Speaker 2: What are so like a more macro widely available version

1095
00:54:57,960 --> 00:55:01,080
Speaker 2: of this would be like a shock top or is

1096
00:55:01,120 --> 00:55:03,120
Speaker 2: this Yeah, probably does. I would say that if you're

1097
00:55:03,160 --> 00:55:04,040
Speaker 2: into this, is.

1098
00:55:04,000 --> 00:55:05,680
Speaker 1: This beer has been around a long time, or this brewery,

1099
00:55:05,680 --> 00:55:07,439
Speaker 1: So I would imagine a lot of people can find

1100
00:55:07,440 --> 00:55:09,440
Speaker 1: this anything something by twenty first Amendment.

1101
00:55:09,440 --> 00:55:11,719
Speaker 2: With yeah, that's what I was gonna say, just I

1102
00:55:11,760 --> 00:55:14,200
Speaker 2: would point people in this direction as opposed to some

1103
00:55:14,239 --> 00:55:18,720
Speaker 2: of those more like even more widely available, inferior versions

1104
00:55:18,800 --> 00:55:21,520
Speaker 2: of this particular beer. I really yeah, I really dug.

1105
00:55:21,360 --> 00:55:23,000
Speaker 1: This need to all right, that's gonna do it for

1106
00:55:23,040 --> 00:55:25,279
Speaker 1: this episode, Matt, we will, of course link to some

1107
00:55:25,360 --> 00:55:28,279
Speaker 1: of the resources Ryan mentioned up on our website at

1108
00:55:28,280 --> 00:55:30,480
Speaker 1: howtomoney dot com. You know it, don't forget to sign

1109
00:55:30,560 --> 00:55:33,080
Speaker 1: up for that how many newsletter while you're there. That's

1110
00:55:33,080 --> 00:55:35,680
Speaker 1: gonna do it, though, Matt. Until next time, Best Friends Out,

1111
00:55:35,719 --> 00:55:36,799
Speaker 1: Best Friends Out.