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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 about what makes a good rental property

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Speaker 1: and Matt super cheap glasses? What why are you switching

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Speaker 1: up the order here? Man? You have to talk about

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Speaker 1: my glasses? Well, you know, good host knows when they

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Speaker 1: shake things up. And I saw you in these fancy

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Speaker 1: looking glasses. Tonight is my photography glasses. I only wear

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Speaker 1: these typically when I'm only shooting. And so why why

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Speaker 1: did you break about tonight? And my I couldn't find

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Speaker 1: my other ones? And how much did they cost? I

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Speaker 1: want to know that, so you should know that all

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Speaker 1: my glasses are from Zenny. Did you know that optical? Literally? Yeah,

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Speaker 1: so is any optical. They're one of those cheap overseas players.

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Speaker 1: And dude, I have I'm gonna guess eight or nine

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Speaker 1: different pairs from them, and they're great. They're super cheap,

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Speaker 1: which allows you to purchase two to three at a time,

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Speaker 1: and you know, if it doesn't work out, it's like,

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Speaker 1: well I only dropped twenty bucks on them, all right,

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Speaker 1: So twenty bucks a pair? Is that roughly what you're spending? Yeah? Yeah,

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Speaker 1: it's been a couple of years. Maybe two or three

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Speaker 1: years since I've ordered some. But yeah, typically you can

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Speaker 1: get like the fancier coatings on there where it's like

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Speaker 1: smudgeproof for different like UV. I don't know UV coading.

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Speaker 1: I think all that's kind of bull crap anyway, So

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Speaker 1: I love Zenny. I don't wear glasses because if you did, though, man,

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Speaker 1: I think you would love Zenny. I totally go to

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Speaker 1: so cheap. Yeah, that's awesome. I've totally you know, dug

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Speaker 1: around on the website before and stuff like that. By

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Speaker 1: the way, not an ad Matt just has any glasses.

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Speaker 1: And so if you want to check out any optical,

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Speaker 1: like literally an awesome money saving strategy if you wear

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Speaker 1: glasses is to shop at ennypple, so it's any optical

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Speaker 1: Z E, N N I, and then Optical dot com.

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Speaker 1: So we'll put a link in the show notes. And

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Speaker 1: then there's other actual, you know, similar companies online, like

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Speaker 1: there's Goggles for you, and I've heard of them, I've

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Speaker 1: never checked them out. I thought about hopping on there

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Speaker 1: to check out one of their styles, see what they

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Speaker 1: look like. But like the glasses you're wearing like legit,

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Speaker 1: like like like Warby Parker or something like that. But

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Speaker 1: you're talking about a hundred dollar glasses, and if you're

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Speaker 1: going to one of the traditional eyeglass shops, you're probably

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Speaker 1: spending or if you're even going to Costco, which hundreds

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Speaker 1: reasonable hundreds, you're dropping at least two hundred bucks minimum

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Speaker 1: on glasses. And so yeah, you know, go go to

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Speaker 1: your eye doctor, you know, get your prescription, and you

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Speaker 1: get the pupillary distance. That's an important How do you

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Speaker 1: know all this? I know you don't even wear glasses,

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Speaker 1: and you know you know about pupillary distance. I know

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Speaker 1: all the numbers, of course, And so you gotta get

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Speaker 1: all those things, plug plug them into a site like

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Speaker 1: Zenny or goggles for you and just save joy, saving

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Speaker 1: tons of money, tons of money on glasses and don't

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Speaker 1: worry about it, because I think that's the biggest hang

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Speaker 1: up people have. They're like, what if they don't fit

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Speaker 1: me and or maybe I won't like them, you know,

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Speaker 1: and just order a few pairs and they've got the

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Speaker 1: different kind of sizes on there, and you know, take

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Speaker 1: the measurements and do all that and if one or

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Speaker 1: two don't work out, that's fine. You still got a

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Speaker 1: new pair of glasses for sixty bucks. Assuming too of

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Speaker 1: them to work out, you know, and you can I think,

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Speaker 1: upload a picture of your face, right and yeah, yeah,

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Speaker 1: you can do a virtual triogh Yeah, super funny because

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Speaker 1: they I mean, they were doing this years ago, like

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Speaker 1: seven years ago. Maybe it is when I got my

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Speaker 1: first They've been around a long time at this point,

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Speaker 1: and I remember the first time I did that. Nobody

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Speaker 1: else had ever done something like that. I thought that

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Speaker 1: was the funniest thing. You're an observant, dude, commenting on

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Speaker 1: my glasses. Saw the new glasses. I was wondering, what

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Speaker 1: was up, dude. I wanted to mention too. I finally

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Speaker 1: got my uh, speaking of photography, I finally got my

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Speaker 1: business checking accounts set up, and I'm about to kick

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Speaker 1: Wells Fargo to the curb. Finally, high five my friend

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Speaker 1: because I don't know. They suck so bad. We talk

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Speaker 1: about this that they're essentially the devil. Really, yeah, Wells

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Speaker 1: Fargo is the worst. So if you are banking with

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Speaker 1: Wells Fargo right now, please please do yourself a favor

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Speaker 1: and leave them. I have we have an article on

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Speaker 1: our site about you know, how to switch banks and

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Speaker 1: which banks you should consider switching to. But like dude,

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Speaker 1: thank you, way to go, thank for leaving Wells Fargo.

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Speaker 1: Like that's just a good American thing to do. Congratulations,

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Speaker 1: it's the middle of the summer now, you know, there's

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Speaker 1: nothing more American than kicking a giant conglomerate bank to

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Speaker 1: the curve when they have treated people very poorly, literally

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Speaker 1: committed crimes and and still no one goes to jail

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Speaker 1: and there and their executives and CEOs get huge bonuses

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Speaker 1: batty bonuses, thirty fifty seventy millions. What do you think

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Speaker 1: about their new ads? Have you seen them? With the

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Speaker 1: World Cup being on, They're like, we've been around since

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Speaker 1: whatever year, but rebirth or renewed, you know, basically, I

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Speaker 1: feel like it's just the lame way of like admitting

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Speaker 1: that they screwed up. It feels very disingenuous because it

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Speaker 1: feels like it's just branding, you know, right, Like it's

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Speaker 1: a good it's a good way to brain yourself. I

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Speaker 1: always but most people don't even know, aren't paying attention,

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Speaker 1: I don't think. But the amount of stories that came

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Speaker 1: out over the last what year and a half, of

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Speaker 1: all the things that Wells Fargo has done to the

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Speaker 1: American people. Uh, it are astounding, and you know, creating

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Speaker 1: fake accounts and people's names just to hit the like

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Speaker 1: the branch quotas manager is pressuring teller is basically to

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Speaker 1: make it happen no matter what. Essentially, it's like, all right, well,

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Speaker 1: when you put that kind of pressure on your on

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Speaker 1: your on your employees, what do you what do you

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Speaker 1: expect that they're gonna do? You know, if they're going

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Speaker 1: to get fired for not hitting a certain number of

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Speaker 1: new accounts opened within a period. So terrible culture to

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Speaker 1: work in, and what they did to you know, so

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Speaker 1: many of their own customers and um human people who

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Speaker 1: weren't their customers that they were signing up for accounts.

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Speaker 1: It's pretty awful stuff. If you just go to Google

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Speaker 1: and type in Wells Fargo and then hit the news

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Speaker 1: button and then just scroll through like the last year

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Speaker 1: and a half, you'll you'll be amazed at all the

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Speaker 1: terrible things they've done and how everyone's gotten away scot

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Speaker 1: free man in the whole process. So I feel like

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Speaker 1: we've said their name enough. Let me I do want

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Speaker 1: to say who I'm switching to. It almost sounds funny

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Speaker 1: to say because they don't sound like a real bank.

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Speaker 1: But but there let me the best online free business

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Speaker 1: checking account, did I say everything? Yeah? So their online

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Speaker 1: they're not based in the location. It's for business, which

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Speaker 1: is tough. For years, I've been looking for a great

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Speaker 1: free online busines this checking account. Business accounts are the

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Speaker 1: hardest one. It's so hard as a personal, as a human,

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Speaker 1: as a single individual, but it's really hard as always

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Speaker 1: a business to get a good free checking account. Yeah.

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Speaker 1: Only recently have the business checking accounts kind of come

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Speaker 1: on board specifically with what I'm looking for to which

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Speaker 1: is not maintaining a balance. And that's one of the

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Speaker 1: things I hate about my my wealth Fargo. And it's

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Speaker 1: a grandfather to account, so I've got perks. So they've

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Speaker 1: probably gotten like a lot worse. Yeah. Yeah, And so

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Speaker 1: I don't know what what what the requirements are, but

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Speaker 1: I know that they're worse. It's the only reason I've

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Speaker 1: held onto that account because I try to sort of

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Speaker 1: reorganize my accounts, and I realized it was gonna I

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Speaker 1: was gonna have to increase the amounts either that I

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Speaker 1: spent every month out of that account, or I was

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Speaker 1: gonna have to maintain a higher balance. So I'm looking

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Speaker 1: forward to only having to keep zero dollars in my

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Speaker 1: Bank of the Internets, which is their name by the way,

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Speaker 1: I don't know if I have I not said their

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Speaker 1: name yet, Bank of the Internet. No you haven't, so

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Speaker 1: that it's yeah, Bank of Internet. I think the actual

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Speaker 1: name maybe Bank of the Internet. And that's amazing. You've

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Speaker 1: read like you d C insurance that all that completely.

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Speaker 1: It's it's b of I is there is like their

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Speaker 1: shorthand Bank of Internet, be of Viye, But they're the

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Speaker 1: one I'm on though now is the basic business checking account.

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Speaker 1: And for them you do have to make a one

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Speaker 1: thousand dollar initial deposit, but then after that you can

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Speaker 1: just pull it out and then you're sitting there with

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Speaker 1: a zero balance and I can use them to make

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Speaker 1: my my business deposits remotely with my phone. And their

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Speaker 1: limits are way higher than any big name bank like

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Speaker 1: Chase or Wells Fargo. And their daily limits are higher,

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Speaker 1: their monthly limits limits are higher, a much higher dollar

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Speaker 1: amount than I mean, let's be honest that I'm ever

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Speaker 1: gonna pull in. Yeah, it's They're like, oh the limits

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Speaker 1: are I mean there's something like fifty a month. I'm like, okay,

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Speaker 1: that's not gonna be a problem for me, trust me, dude.

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Speaker 1: I know you've been kind of on that this hunt

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Speaker 1: for a long time, so I'm glad you've just been busy. Man,

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Speaker 1: it just takes some time to finally sit down. Yeah,

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Speaker 1: I'm glad you found something that you know works on

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Speaker 1: all those levels for you. And you know, we'll we'll

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Speaker 1: put a link because I know there's a lot of

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Speaker 1: small business owners that listen to this podcast and they

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Speaker 1: probably are paying, you know, monthly fees every month for

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Speaker 1: having a checking account or their limits or there's all

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Speaker 1: these hoops have to jump through and it's just a

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Speaker 1: huge pain having to do twelve transactions a month in

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Speaker 1: order to keep it free. They accidentally click a view image, view,

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Speaker 1: check image, deposit and then they get charged three fifty

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Speaker 1: if you're listening, yes, yes, well as firego man, they

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Speaker 1: do it, dude, that's the dirtiest thing I've ever heard of.

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Speaker 1: I'm not even kidding. When you go and you log

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Speaker 1: into your account, it's got your transaction summary and it'll

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Speaker 1: say deposit and I'll have a little link and it

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Speaker 1: says view image. And remember the first couple of times

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Speaker 1: I did that because I like to see I just

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Speaker 1: make sure, like, is that the one with that that

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Speaker 1: I think I think it was because sometimes the amounts

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Speaker 1: for the same and yeah, I was getting hit with

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Speaker 1: these charges. Man. It wasn't until maybe a year later

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Speaker 1: that they put a disclaimer kind of next to it

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Speaker 1: explaining that that's what that was for the year before

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Speaker 1: that though, when I was figuring it out myself, I

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Speaker 1: mean I called them up. They said, oh, that's because

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Speaker 1: you clicked view image, which freaking costs them nothing. Yeah

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Speaker 1: that's crazy, that's crazy. That's so that I think to

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Speaker 1: takeaways from the to takeaways if you are if you're

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Speaker 1: a business owner, you should totally look into Bank of Internet.

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Speaker 1: And we'll put a link on our show notes. Yeah

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Speaker 1: you love to create, like write a post or something,

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Speaker 1: but at the very least we'll have a link up

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Speaker 1: there directly to them, because I mean, they're not advertising

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Speaker 1: with us that it's just they're just a great, great

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Speaker 1: service that they're putting out there, great resource for small

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Speaker 1: business owners. And then if you do your banking with

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Speaker 1: Wells Fargo in any way, former fashion and I probably

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Speaker 1: have police stop and you know, I don't think you know,

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Speaker 1: we're not usually here to bash companies. That's not usually

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Speaker 1: what we're about. But I feel okay to doing that

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Speaker 1: about right I. It feels cathartic. Actually, I think to

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Speaker 1: to talk about how terrible they've been and uh and

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Speaker 1: and if you do your business like things like that,

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Speaker 1: we get our money taken from us as as consumers,

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Speaker 1: as individuals because we don't fight back and because we

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Speaker 1: don't move when a company takes advantage of us like that.

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Speaker 1: And the competition in this country is so stiff, especially

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Speaker 1: in the area of banking. There's so many good banks

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Speaker 1: out there offering such great services. That for you to

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Speaker 1: stay with the company that hates you, that doesn't care

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Speaker 1: about you, and then it's going to charge you exorbitant

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Speaker 1: fees for ridiculous things like clicking to see an image

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Speaker 1: of your check, then insane. We're doing it to ourselves.

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Speaker 1: And so leave a company like that, immediately go to

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Speaker 1: another bank as quick as you can, you know, hustle

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Speaker 1: up and uh. And it's good for our country, it's

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Speaker 1: good for you. I mean, we should just not be

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Speaker 1: supporting companies like this to treat their customers in this way. Yeah,

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Speaker 1: I feel bad for even having waited this long, you know,

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Speaker 1: I feel like I've I've I've been on the wrong

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Speaker 1: side of history. Uh, but like waiting and not taking

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Speaker 1: steps to kind of further go down that path. And

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Speaker 1: you know what, last thing about the big banks, they

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Speaker 1: continue to pay point zero one, all of them on

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Speaker 1: your savings. So lame it? Need we say more? Yeah,

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Speaker 1: all right, onto the beer for this evening. Um. Our

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Speaker 1: friends Michelle and Jen just got back from Iceland. They

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Speaker 1: actually went to a few countries and I was one

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Speaker 1: of them, did a little tour. Apparently it's the land

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Speaker 1: where there's a waterfall around every corner, which sounds awesome.

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Speaker 1: Definitely want to go to Iceland at some point. Oh

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Speaker 1: and the flights are actually really cheap to Iceland, Yes,

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Speaker 1: in the wreck of vic Yeah, because Iceland Air flies

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Speaker 1: there from like some of the Northeastern cities, and so

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Speaker 1: if you want to get to Iceland, you can actually

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Speaker 1: do it pretty reasonably if you fly out of the

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Speaker 1: Northeastern corridor. So is Iceland still like the hit of

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Speaker 1: city to the flant I think Iceland is the place

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Speaker 1: to go, man. Like, I've got tons of photographer friends

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Speaker 1: and everybody always post pictures from from Iceland. It's like

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Speaker 1: the cool place to take a picture of horses and waterfalls.

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Speaker 1: Waterfall like a black church like on the hillside. Yep, yep,

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Speaker 1: that's it. That's it. That's Iceland. So we have an

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Speaker 1: Icelandic stout from a brewery called Borg. Let's pop it.

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Speaker 1: You sure that's how you say it? We we botch

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Speaker 1: any other European uh name or phrase. I'm sure that

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Speaker 1: I'm not sure that that's how it said Borg. So

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Speaker 1: do you know anything about this actual? I don't. My

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Speaker 1: friend Michelle texted me from Iceland and said, hey, we

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Speaker 1: wanna get you a beer. Do you know what Icelandic

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Speaker 1: breweries are good? And I didn't off the top of

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Speaker 1: my head. So I went to the trust the old Internet.

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Speaker 1: One of my favorite websites for looking up what beers

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Speaker 1: are good, what breweries are good in a place, Beer

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Speaker 1: advocate dot com. It's a great site. Like when I'm

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Speaker 1: going to a city or to a country, I always

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Speaker 1: go to be your advocate just to kind of see,

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Speaker 1: you know, what people rate these breweries and the beers,

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Speaker 1: and then I kind of know, you know, where my

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Speaker 1: priorities lie for where I want to go drink. And

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Speaker 1: so I looked him up and always a good way

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Speaker 1: to play your travels. Yeah, yeah, and borg was was

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Speaker 1: pretty well rated, and so Michelle and Jen were kind

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Speaker 1: enough to bring back this Icelandic stout from them. And again,

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Speaker 1: I don't know how to pronounce it, so I'll just

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Speaker 1: say Icelandic stout. Not surprisingly, this poor is a nice,

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Speaker 1: crazy dark color, not able to see through at all,

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Speaker 1: nice brown head. It smells like a stout, which is

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Speaker 1: actually kind of refreshing, just you know, like I feel

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Speaker 1: like lately the stops we've had are bigger in their

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Speaker 1: barrel age, and so it's kind of nothing but like

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Speaker 1: barrel and bourbon and oak and wood. It smells like

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Speaker 1: bourbon or some of the adjuncts that they put in it,

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Speaker 1: like coffee or manilla or something that smells like classic

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Speaker 1: stout smell, no doubt, no doubt. It's really clean. It's

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Speaker 1: like a really clean stout. Yeah, that's actually funny that

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Speaker 1: we kind of mentioning that. And then it's, uh, it's

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Speaker 1: got this kind of nice boozy edge to it, like

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Speaker 1: because and it is eleven and a half percent alcohol,

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Speaker 1: so it's a you know, it's a bigger beer man.

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Speaker 1: It tastes like a classic, delicious, bigger stout. I like it.

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Speaker 1: So how far we get through this podcast? I want

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Speaker 1: to run this morning, and I don't think I've rehydrated

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Speaker 1: since then, so I'm just gonna just drink this real

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Speaker 1: fast for you might want to sip because we have

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Speaker 1: a lot of information to get to. That's right, man,

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Speaker 1: we do. But first let's take a quick break. Let's

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Speaker 1: get onto the topic in hand, what makes a good

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Speaker 1: rental property, And ultimately we're assuming that you want to

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Speaker 1: be a landlord, and that you don't want to be

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Speaker 1: a landlord just for a few years, that you are

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Speaker 1: kind of in this forward of the long term, because

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Speaker 1: very few properties make good rental properties. If you're only

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Speaker 1: planning to be a landlord for a couple of years,

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Speaker 1: you should really realistically be looking at a longer time

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Speaker 1: horizon and also be looking at a bigger percentage to

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Speaker 1: put down. We'll get into kind of the specifics of

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Speaker 1: what what we think makes up a good rental property,

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Speaker 1: but no going into it that if you're not in

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Speaker 1: it for the long haul, and you don't have twenty

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Speaker 1: or likely to put down on a property that you're

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Speaker 1: buying as an investment, probably a lot of this advice

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Speaker 1: you know doesn't apply to you. Yeah, Jo, that's right.

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Speaker 1: And we're also gonna be talking specifically about what makes

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Speaker 1: a property good, right, so like we're talking about specific houses,

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Speaker 1: specific homes. We've done a previous episode about investment properties,

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Speaker 1: and we kind of covered more of the general basics

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Speaker 1: where we talked about everything from your personal flanances way

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Speaker 1: more than just how much to put down, but all

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Speaker 1: the way from if you know, should I be handy

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Speaker 1: all the way through to the different things you want

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Speaker 1: to consider if you are looking at investment properties. Go

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Speaker 1: back and listen to that one that is episode four.

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Speaker 1: You know we're gonna come back to real estate again though, dude,

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Speaker 1: because we just we love it so much and there's

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Speaker 1: just so much you can talk about with when it

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Speaker 1: comes to it. So yeah, I was gonna say that too.

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Speaker 1: I mean, I think there is a lot for us

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Speaker 1: to discuss, and there are a lot of episodes that

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Speaker 1: over you know, the next coming months that we will

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Speaker 1: create about investment properties because for you and I, there's

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Speaker 1: such an integral part of kind of our ultimate path,

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Speaker 1: the financial independence. There's something that we enjoy, we see

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Speaker 1: a lot of benefits from and you know, for the

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Speaker 1: long haul, I think real estate is if you're smart

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Speaker 1: about it, if you're buying well, if you're holding for

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Speaker 1: the long term. Uh, it's just as good, if not

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Speaker 1: probably even better in a lot of ways than investing in,

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Speaker 1: uh the stock market over the long term. So I

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Speaker 1: mean we believe that, right. That's that's why it's such

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Speaker 1: a huge part of our personal finances and uh and yeah,

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Speaker 1: like you said, O, our path to sort of financial

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Speaker 1: independence and in the long term. That's why we want

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Speaker 1: to do this is because we want to be landlords.

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Speaker 1: Like we both sort of see ourselves long term being

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Speaker 1: landlords and this being something that we can kind of

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Speaker 1: continue to do in our ripe old age as we

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Speaker 1: continue to drink beer. So that's why for us, it's

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Speaker 1: important for us to get a good deal on a property.

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Speaker 1: We're not in this to just collect homes. I think

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Speaker 1: sometimes people think they're like, oh, I would love to

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Speaker 1: have a home up in so and so city, or

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Speaker 1: you know, like even on the beach or and things

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Speaker 1: like that. And that's fine if you want to have

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Speaker 1: that for personal reasons, uh, you know, or to also

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Speaker 1: kind of parlay that into a beach house or or

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Speaker 1: something else like that. But if you're looking at it

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Speaker 1: from the standpoint of generating income and to have that

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Speaker 1: become more and more how you are able to feed yourself.

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Speaker 1: You know, like if that's how you put food on

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Speaker 1: the table, That's what I'm going for, is to be

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Speaker 1: able to put food on the table that way and

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Speaker 1: in the you know, ultimately I would love to be

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Speaker 1: able to do real estate full time. And so because

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Speaker 1: of that, we want to find a good deal because

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Speaker 1: obviously the better dealer that we can get, the sooner

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Speaker 1: we can get to that point. Yeah, So that's definitely

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Speaker 1: one of the main keys in you know what makes

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Speaker 1: a good rental property finding that deal, and you know

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Speaker 1: when you've spotted a deal because you have been studying

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Speaker 1: the market in your area. So just like grocery shopping,

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Speaker 1: like I know when a bag of spinach is a

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Speaker 1: good price at aldi because I've been to Kroger and

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Speaker 1: I've been to publics and I know that, you know what,

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Speaker 1: for a bag of spinach at all the is pretty

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Speaker 1: dang good. And so in the same way, you want

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Speaker 1: to be that familiar with the real estate market in

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Speaker 1: your area, and what that means really for you is

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Speaker 1: to specialize in a specific part of town or two

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Speaker 1: or three. You want to know the streets in that

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Speaker 1: area well enough to to know when a deal hits. Yeah,

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Speaker 1: if when you see an address pop up and like

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Speaker 1: your MLS listening for that morning, Like there should be

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Speaker 1: certain street names that like jump out to you when

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Speaker 1: you when you see a name, you're like, oh, let

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Speaker 1: me let me click on that one to check it

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Speaker 1: out because you know that street and that should sort

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Speaker 1: of trigger something for you. Once you've gotten to that

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Speaker 1: stay age, you're you're well on your way to becoming

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Speaker 1: a real estate nerd. And so yeah, the beginning to

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Speaker 1: finding a deal is essentially you know, studying Zillo Redfin,

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Speaker 1: you know the FMLS, having an an agent that that

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Speaker 1: feeds you properties every day, Right, you're getting stuff into

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Speaker 1: your inbox, studying those leads for months essentially. Yeah, I

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Speaker 1: mean even a year. Man, There's been times when I've

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Speaker 1: been like really trying to get to know neighborhood, and

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Speaker 1: every morning when I check my email, that's the first

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Speaker 1: one I go to just a real quick make sure

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Speaker 1: that there's nothing that popped up that was a really

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Speaker 1: good deal, because like you said, yeah, you've been watching

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Speaker 1: it and you just need to be that familiar with it. Certainly,

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Speaker 1: that's the way we approach it. I think a lot

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Speaker 1: of folks take it to a whole another level when

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Speaker 1: they're buying even out of uh state or you know,

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Speaker 1: like not locally to them, or sometimes folks are buying wholesale.

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Speaker 1: We're not talking about that because that's not what we

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Speaker 1: do personally. It takes a lot more money to kind

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Speaker 1: of go down those paths, and we are definitely not

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Speaker 1: at that point yet maybe someday, but we we kind

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Speaker 1: of do it like Mama Pop style, you know, like

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Speaker 1: what we know everything that goes on within our sort

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Speaker 1: of portfolio of real estate. We're familiar with our parts

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Speaker 1: of town and specifically what you know. We we know

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Speaker 1: our city real well. Yeah, and we I think we

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Speaker 1: like to keep it simple. You know, there are a

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Speaker 1: lot of people that that like to grow big, grow fast,

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Speaker 1: you know, a massive, big portfolio whatever. You know, we're

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Speaker 1: kind of the mindset, you know, both of us that

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Speaker 1: slow and steady wins the race. You know, smart solid investments,

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Speaker 1: you know, with solid underlying financials, like we talked about

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Speaker 1: an episode four. Then when we're buying, you know, we're

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Speaker 1: making a long term investment, but we also we're using

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Speaker 1: our own money that we save over time to put

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Speaker 1: down on these homes. Super simple. There's nothing fancy about that,

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Speaker 1: you know, Like folks are like, how do you do that?

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Speaker 1: It's just like, well, just try to be frugal, save

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Speaker 1: out that money once you get enough money. It's old school, right,

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Speaker 1: there's nothing really like special about it. And there's all

427
00:19:45,480 --> 00:19:48,640
Speaker 1: these you know, real estate conferences and seminars and hotel

428
00:19:48,680 --> 00:19:51,719
Speaker 1: ballrooms like they'll they'll tell you here's how you get

429
00:19:51,800 --> 00:19:53,840
Speaker 1: rich in real estate. Here's how you buy real estate

430
00:19:53,840 --> 00:19:56,160
Speaker 1: with none of your own money, and you use somebody

431
00:19:56,160 --> 00:19:59,160
Speaker 1: else's money to finance these deals. And I'm not gonna

432
00:19:59,160 --> 00:20:01,560
Speaker 1: say that hasn't worked out for anybody. I'm sure you

433
00:20:01,560 --> 00:20:03,800
Speaker 1: know at least two people speaking at those conferences have

434
00:20:03,880 --> 00:20:07,000
Speaker 1: gotten rich off of your fees to end or but

435
00:20:07,240 --> 00:20:09,800
Speaker 1: they're really good at writing books. Yeah right, but yeah,

436
00:20:09,880 --> 00:20:11,960
Speaker 1: like we're the of the old school mentality. If how

437
00:20:12,000 --> 00:20:14,800
Speaker 1: you should approach and buy rental properties, and that's with

438
00:20:14,840 --> 00:20:17,960
Speaker 1: your own money saved up over time, going slowly but surely,

439
00:20:18,000 --> 00:20:21,320
Speaker 1: knowing your market and finding that deal and on that note,

440
00:20:21,600 --> 00:20:24,240
Speaker 1: to buy that underpriced property that we're talking about. You'll

441
00:20:24,280 --> 00:20:27,000
Speaker 1: also need to, once you know your market, be ready

442
00:20:27,119 --> 00:20:30,359
Speaker 1: to move quickly because when a deal hits, you're not

443
00:20:30,359 --> 00:20:32,640
Speaker 1: the only one seeing that. There are other people out there,

444
00:20:32,920 --> 00:20:35,360
Speaker 1: you know, that are looking for a deal as well

445
00:20:35,400 --> 00:20:38,280
Speaker 1: in real estate, and so when something hits, you need

446
00:20:38,320 --> 00:20:40,040
Speaker 1: to be ready to pounce. You need to have your

447
00:20:40,080 --> 00:20:44,040
Speaker 1: finances ready, You need to have your relationship with a

448
00:20:44,119 --> 00:20:45,920
Speaker 1: lender if you need one, if you're not paying all

449
00:20:45,920 --> 00:20:49,640
Speaker 1: cash established, you need to have an agent that's ready

450
00:20:49,680 --> 00:20:52,960
Speaker 1: to write and offer day of when you see that

451
00:20:53,040 --> 00:20:55,200
Speaker 1: deal hit the market. And so yeah, you're just gonna

452
00:20:55,240 --> 00:20:58,240
Speaker 1: want to be ready to pounce when the deal actually

453
00:20:58,400 --> 00:21:00,720
Speaker 1: hits the market. And that's someone in these days with

454
00:21:00,760 --> 00:21:02,520
Speaker 1: the market being as hot as it is. Man, if

455
00:21:02,520 --> 00:21:04,400
Speaker 1: you're able to jump on a deal like that, and

456
00:21:04,760 --> 00:21:07,080
Speaker 1: you know, hopefully even trust snaggett sometimes if you can

457
00:21:07,119 --> 00:21:09,720
Speaker 1: get it before it makes it to the weekend, then

458
00:21:09,760 --> 00:21:11,760
Speaker 1: I mean then that's like really good, right, because once

459
00:21:11,800 --> 00:21:13,439
Speaker 1: you get like right through the weekend and everyone's had

460
00:21:13,440 --> 00:21:15,320
Speaker 1: a chance to come to the internet and see what's

461
00:21:15,320 --> 00:21:17,480
Speaker 1: out there, well, they're gonna have like highest and best

462
00:21:17,520 --> 00:21:20,960
Speaker 1: offer by like next Saturday, and you know they're gonna

463
00:21:21,040 --> 00:21:23,119
Speaker 1: end up paying twenty thousand more or somebody's gonna end

464
00:21:23,160 --> 00:21:24,680
Speaker 1: up paying twenty thousand more than maybe what you could

465
00:21:24,720 --> 00:21:26,560
Speaker 1: have gotten it for. Yeah, man. And so a good

466
00:21:26,560 --> 00:21:28,720
Speaker 1: way to know if you are getting a deal when

467
00:21:28,720 --> 00:21:32,000
Speaker 1: it comes to specifically an investment property is the one

468
00:21:32,040 --> 00:21:34,040
Speaker 1: percent rule. And we talked a little bit about that

469
00:21:34,080 --> 00:21:36,840
Speaker 1: on the Investment Property Basics episode that episode four that

470
00:21:36,880 --> 00:21:40,280
Speaker 1: we mentioned earlier. One percent rule states that you should

471
00:21:40,320 --> 00:21:42,320
Speaker 1: be able to get one percent of the purchase price

472
00:21:42,359 --> 00:21:45,920
Speaker 1: of the home in monthly rent. And you know, it

473
00:21:46,119 --> 00:21:48,880
Speaker 1: is a real sort of quick math, like not even

474
00:21:48,960 --> 00:21:50,760
Speaker 1: back on the napkin, because you don't need to write

475
00:21:50,800 --> 00:21:53,600
Speaker 1: it down. It's just it's just like taking the price

476
00:21:53,640 --> 00:21:55,480
Speaker 1: and moving to this that's one plays two places, and

477
00:21:55,560 --> 00:21:57,879
Speaker 1: think could I get this amount and rent for this

478
00:21:57,920 --> 00:22:01,159
Speaker 1: house every month? And that's just a good way. It's

479
00:22:01,160 --> 00:22:03,639
Speaker 1: sort of a good rule of thumb. I'm actually curious

480
00:22:03,680 --> 00:22:05,520
Speaker 1: to hear your thoughstral On, if you think that this

481
00:22:05,560 --> 00:22:08,360
Speaker 1: still sort of holds in today's market, because specific to Atlanta,

482
00:22:08,720 --> 00:22:11,560
Speaker 1: the market is so stink and hot right now that

483
00:22:11,640 --> 00:22:14,280
Speaker 1: I mean, on my most recent purchase, which was last year,

484
00:22:14,840 --> 00:22:16,760
Speaker 1: I wasn't quite to one percent. You know, it was.

485
00:22:16,800 --> 00:22:18,400
Speaker 1: It wasn't quite the one percent rule, and I knew

486
00:22:18,440 --> 00:22:21,320
Speaker 1: that going into it, but uh yeah, even still, you know,

487
00:22:21,320 --> 00:22:22,879
Speaker 1: I felt that it was still going to be a

488
00:22:22,880 --> 00:22:24,880
Speaker 1: good deal, uh and I was still gonna be able

489
00:22:24,880 --> 00:22:26,600
Speaker 1: to to make a good return on that. Here's my

490
00:22:26,680 --> 00:22:28,879
Speaker 1: quick thought on that. I think of these areas that

491
00:22:28,880 --> 00:22:31,679
Speaker 1: we're gonna talk about as kind of like weights, and

492
00:22:32,200 --> 00:22:35,919
Speaker 1: if one area is weighted more heavily, I'm okay with

493
00:22:35,960 --> 00:22:38,199
Speaker 1: the other area being a little bit lighter. Right. And

494
00:22:38,240 --> 00:22:40,520
Speaker 1: so let's say a property doesn't meet the one percent rule,

495
00:22:40,560 --> 00:22:43,080
Speaker 1: I don't write it off immediately. I think it's almost

496
00:22:43,280 --> 00:22:45,080
Speaker 1: we should probably call it the one percent rule of

497
00:22:45,119 --> 00:22:49,159
Speaker 1: thumb because if I buy a property that is a

498
00:22:49,200 --> 00:22:51,760
Speaker 1: hundred twenty dollars, but I can only get a thousand

499
00:22:51,840 --> 00:22:54,920
Speaker 1: dollars a month in rent, well, I still don't write

500
00:22:54,920 --> 00:22:57,520
Speaker 1: that property off just because it doesn't meet the one

501
00:22:57,560 --> 00:23:01,280
Speaker 1: percent rule, because what about potential ciation or you know

502
00:23:01,320 --> 00:23:04,840
Speaker 1: where that property is headed and the neighborhood, and you

503
00:23:04,840 --> 00:23:07,800
Speaker 1: know the infrastructure, the changes that are happening, uh, the

504
00:23:08,000 --> 00:23:12,080
Speaker 1: potential growth in that city or or particular part of town.

505
00:23:12,440 --> 00:23:13,960
Speaker 1: I mean, I think there are a lot of questions

506
00:23:13,960 --> 00:23:16,840
Speaker 1: to ask, and so uh that the one percent rule

507
00:23:17,040 --> 00:23:19,720
Speaker 1: of thumb is a really good one. It's just great

508
00:23:19,720 --> 00:23:25,040
Speaker 1: way to kind of coal favorites and eliminate loser properties.

509
00:23:25,480 --> 00:23:28,080
Speaker 1: But it is also it is not this and all

510
00:23:28,080 --> 00:23:30,160
Speaker 1: be all, because you know, the last property I bought

511
00:23:30,240 --> 00:23:31,480
Speaker 1: was you know, similar to what I just said. It

512
00:23:31,520 --> 00:23:34,200
Speaker 1: was actually a hundred fifteen thousand dollar property. I'm currently

513
00:23:34,200 --> 00:23:36,919
Speaker 1: getting a rent amount of a thousand dollars. But I'm

514
00:23:36,920 --> 00:23:39,320
Speaker 1: almost positive I can meet the one percent rule next

515
00:23:39,359 --> 00:23:41,639
Speaker 1: time around when I least to somebody else. And on

516
00:23:41,720 --> 00:23:44,560
Speaker 1: top of that, I feel like the appreciation potential for

517
00:23:44,720 --> 00:23:47,879
Speaker 1: this particular property is really really good. And so you

518
00:23:47,920 --> 00:23:51,560
Speaker 1: know weighted averages, right, I'm taking these things and I'm saying, well,

519
00:23:51,600 --> 00:23:53,679
Speaker 1: if I bought this other property, you know, and a

520
00:23:53,680 --> 00:23:56,600
Speaker 1: lot of real estate investors invest specifically for cash flow.

521
00:23:56,680 --> 00:23:58,720
Speaker 1: That's what people want, you know, they want to make

522
00:23:58,760 --> 00:24:01,080
Speaker 1: money every month, and I that's fine, that's a that's

523
00:24:01,080 --> 00:24:03,760
Speaker 1: a fine way to invest as well. It usually depends

524
00:24:03,760 --> 00:24:06,320
Speaker 1: on where you're investing kind of what you're gonna pay

525
00:24:06,359 --> 00:24:09,200
Speaker 1: a little more attention to. And but here where I'm investing,

526
00:24:09,640 --> 00:24:13,640
Speaker 1: I'm paying attention to the cash flow. But even more so,

527
00:24:13,920 --> 00:24:16,639
Speaker 1: I'm really thinking about the potential of a neighborhood and

528
00:24:16,680 --> 00:24:20,000
Speaker 1: the potential of that property to appreciate over time. That actually,

529
00:24:20,000 --> 00:24:22,399
Speaker 1: for me is a bigger influencer when I'm looking at

530
00:24:22,400 --> 00:24:25,840
Speaker 1: a property than just meeting one percent rule of thumb. Yeah,

531
00:24:25,960 --> 00:24:27,760
Speaker 1: even though I think it's a really good rule of

532
00:24:27,760 --> 00:24:29,960
Speaker 1: thumb to use. Yeah, I mean said, I mean cash

533
00:24:29,960 --> 00:24:31,840
Speaker 1: flow is still important. Like when you say that you

534
00:24:31,840 --> 00:24:34,359
Speaker 1: don't wait cash flow as much, like you're still talking

535
00:24:34,400 --> 00:24:36,840
Speaker 1: about like a couple hundred at least in positive cash

536
00:24:36,840 --> 00:24:38,960
Speaker 1: flow a month, right, Yeah, I think probably the worst

537
00:24:38,960 --> 00:24:40,600
Speaker 1: thing that I've ever I can never hear out of

538
00:24:40,600 --> 00:24:43,359
Speaker 1: an investor real estate investor's mouth, is you know what,

539
00:24:43,520 --> 00:24:46,520
Speaker 1: and it's covering the mortgage. The rent is covering mortgage. Right,

540
00:24:46,720 --> 00:24:49,680
Speaker 1: That's that's a terrible thing to say. That's a terrible

541
00:24:49,680 --> 00:24:51,439
Speaker 1: way to look at it, because you can put that

542
00:24:51,480 --> 00:24:54,000
Speaker 1: money in an online bank account, and you know what,

543
00:24:54,119 --> 00:24:57,359
Speaker 1: the online bank is not calling you about a broken

544
00:24:57,359 --> 00:25:00,520
Speaker 1: toilet or a leaky a leaky roof. And so I'd

545
00:25:00,600 --> 00:25:02,800
Speaker 1: rather if I my money wasn't going to make almost anything,

546
00:25:02,840 --> 00:25:05,399
Speaker 1: I'd rather just have it in savings and not be

547
00:25:05,840 --> 00:25:09,640
Speaker 1: dealing with the headaches of humans and fixing things. So

548
00:25:10,000 --> 00:25:11,680
Speaker 1: it's definitely not the way you want to look at it.

549
00:25:11,760 --> 00:25:13,359
Speaker 1: But back to the one percent rule real quick, I

550
00:25:13,359 --> 00:25:16,240
Speaker 1: wanted to talk about it actually doesn't always just include

551
00:25:16,240 --> 00:25:19,280
Speaker 1: the purchase price. Because let's say you're buying a house

552
00:25:19,359 --> 00:25:21,720
Speaker 1: that is a complete dump, it needs a major renovation,

553
00:25:22,119 --> 00:25:25,119
Speaker 1: and you are buying that house for thirty dollars, but

554
00:25:25,160 --> 00:25:28,600
Speaker 1: you have to put seventy dollars into it. Well, you

555
00:25:28,640 --> 00:25:30,920
Speaker 1: know what your hope is that at the end of

556
00:25:30,960 --> 00:25:34,200
Speaker 1: those renovations of making that house livable, that you're able

557
00:25:34,240 --> 00:25:36,600
Speaker 1: to then get a thousand dollars a month for rent.

558
00:25:36,720 --> 00:25:38,920
Speaker 1: So essentially, what you're looking at, if you're boiling this

559
00:25:38,960 --> 00:25:43,040
Speaker 1: one percent rule down, it is purchase price and immediate

560
00:25:43,080 --> 00:25:45,160
Speaker 1: repairs and improvements that you need to make in order

561
00:25:45,160 --> 00:25:47,640
Speaker 1: to get that house rentally or deferred maintenance. Sometimes it's

562
00:25:47,640 --> 00:25:49,440
Speaker 1: college just like the things that you know you needed

563
00:25:49,560 --> 00:25:51,879
Speaker 1: to basically dump into the property in order to kind

564
00:25:51,880 --> 00:25:53,960
Speaker 1: of get it up to speed certainly where you're not

565
00:25:54,040 --> 00:25:56,600
Speaker 1: kind of over improving it for the neighborhood or the market.

566
00:25:56,960 --> 00:25:59,480
Speaker 1: But yeah, you definitely want to take that amount into

567
00:25:59,520 --> 00:26:01,879
Speaker 1: the sort it's total costs there as well. And I

568
00:26:01,880 --> 00:26:03,919
Speaker 1: think if you're not in the ballpark on one percent,

569
00:26:04,240 --> 00:26:07,240
Speaker 1: you know, that's a great just ballpark estimate thing to

570
00:26:07,520 --> 00:26:09,760
Speaker 1: think to look at as you're you know, looking at

571
00:26:09,840 --> 00:26:12,440
Speaker 1: you know, fifty sixty properties a day as you're doing

572
00:26:12,480 --> 00:26:15,119
Speaker 1: your research. It's just this awesome way to say, you

573
00:26:15,119 --> 00:26:17,760
Speaker 1: know what, I'm keeping these five to do a little

574
00:26:17,760 --> 00:26:19,959
Speaker 1: more digging, a little more research on to see if

575
00:26:19,960 --> 00:26:22,960
Speaker 1: they meet the rest of my criteria. Yes, r O

576
00:26:23,080 --> 00:26:25,520
Speaker 1: I man, so your turn on investment is for me

577
00:26:25,640 --> 00:26:27,960
Speaker 1: a great way to kind of dig in beyond the

578
00:26:27,960 --> 00:26:30,800
Speaker 1: one percent rule, uh, to figure out if, if if

579
00:26:30,800 --> 00:26:32,760
Speaker 1: a property is going to be even better, since the

580
00:26:32,760 --> 00:26:35,040
Speaker 1: one percent rule can just kind of be almost too broad.

581
00:26:35,240 --> 00:26:38,640
Speaker 1: So let's say, for example, you get a hundred fifty house, right,

582
00:26:38,680 --> 00:26:40,840
Speaker 1: and so the one percent rule a rule of thumb

583
00:26:41,520 --> 00:26:44,719
Speaker 1: says that your monthly rent should be fi a month. Right,

584
00:26:45,080 --> 00:26:48,480
Speaker 1: It's easy math ye, And you think, okay, I can

585
00:26:48,520 --> 00:26:50,240
Speaker 1: I can definitely do that. If so, great, maybe you

586
00:26:50,240 --> 00:26:52,639
Speaker 1: should jump on that property. But if you're short, you

587
00:26:52,720 --> 00:26:55,080
Speaker 1: might think, oh, maybe maybe this isn't a good property.

588
00:26:55,119 --> 00:26:57,560
Speaker 1: But if you're doing one percent rule on that with

589
00:26:57,640 --> 00:27:01,320
Speaker 1: a typical down with today's rate, you're looking at an

590
00:27:01,400 --> 00:27:04,800
Speaker 1: r o I that is easily over and that's huge.

591
00:27:04,960 --> 00:27:07,440
Speaker 1: I mean, if you're looking at something that's closer that

592
00:27:07,480 --> 00:27:09,320
Speaker 1: you're earning on your money. You can't make that in

593
00:27:09,320 --> 00:27:12,080
Speaker 1: the stock market. And obviously a property takes a little too,

594
00:27:12,240 --> 00:27:15,040
Speaker 1: maybe a lot more work, depending on if it needs

595
00:27:15,520 --> 00:27:18,520
Speaker 1: additional improvements or anything like that. But all that to say,

596
00:27:18,560 --> 00:27:21,040
Speaker 1: if it falls short or the one percent rule, we're

597
00:27:21,080 --> 00:27:23,560
Speaker 1: saying that you could still potentially be earning a lot

598
00:27:23,640 --> 00:27:26,280
Speaker 1: of money. But then, on the other hand, if you'd

599
00:27:26,280 --> 00:27:28,600
Speaker 1: be happy with returns even less than that, right, so

600
00:27:28,640 --> 00:27:31,560
Speaker 1: say you'd be happy with returns closer to say, which

601
00:27:31,600 --> 00:27:34,199
Speaker 1: is still outperforming the market. And that means on that

602
00:27:34,240 --> 00:27:36,919
Speaker 1: same house that you paid a hundred fifty four, you

603
00:27:36,920 --> 00:27:39,760
Speaker 1: could rent that out instead for fifty a month, and

604
00:27:39,800 --> 00:27:41,880
Speaker 1: that's more like you know, if you do the math

605
00:27:41,920 --> 00:27:43,679
Speaker 1: on that, that's closer to like the point eight percent

606
00:27:43,800 --> 00:27:45,800
Speaker 1: or the like point a five percent rule rather than

607
00:27:45,840 --> 00:27:47,800
Speaker 1: like the one percent rule. What I say is all

608
00:27:47,840 --> 00:27:49,679
Speaker 1: that to kind of help put it in context, is

609
00:27:49,720 --> 00:27:51,800
Speaker 1: that you might see that a property may not completely

610
00:27:51,880 --> 00:27:55,119
Speaker 1: perform at the one percent you know rule level, But

611
00:27:55,160 --> 00:27:57,280
Speaker 1: if you run the numbers a little deeper and see

612
00:27:57,480 --> 00:27:59,680
Speaker 1: and take the mortgage and just all the other repairs

613
00:27:59,720 --> 00:28:02,200
Speaker 1: and maintenance costs and insurance and all that into account.

614
00:28:02,680 --> 00:28:05,800
Speaker 1: All that included, you might find that you would still

615
00:28:05,840 --> 00:28:08,720
Speaker 1: be making a ton more than you would if that

616
00:28:08,720 --> 00:28:11,760
Speaker 1: money was just passively invested in the market. Yeah. So

617
00:28:11,840 --> 00:28:14,000
Speaker 1: for me, one percent rules is helpful, but our o

618
00:28:14,119 --> 00:28:16,680
Speaker 1: I it's just a much richer way to really kind

619
00:28:16,680 --> 00:28:19,400
Speaker 1: of dig in and sort of compare should I take

620
00:28:19,440 --> 00:28:21,639
Speaker 1: this money and invested in real estate or should I

621
00:28:21,680 --> 00:28:24,320
Speaker 1: just dump it into the stock market? Yeah, Matt, So

622
00:28:24,359 --> 00:28:27,000
Speaker 1: that one percent rule, right, is a great way to

623
00:28:27,160 --> 00:28:30,080
Speaker 1: kind of initially check and then rule things out and

624
00:28:30,720 --> 00:28:33,280
Speaker 1: decide what you want to look at more deeply. And

625
00:28:33,320 --> 00:28:35,520
Speaker 1: then the r o I is a great way to

626
00:28:35,560 --> 00:28:38,440
Speaker 1: kind of assess in a little bit more detail the

627
00:28:38,480 --> 00:28:40,440
Speaker 1: particular property. And on top of that, you want to

628
00:28:40,440 --> 00:28:44,800
Speaker 1: find properties and separate them by condition, neighborhood, risk, and

629
00:28:44,920 --> 00:28:48,560
Speaker 1: potential appreciation. So how much work is this house going

630
00:28:48,600 --> 00:28:50,840
Speaker 1: to take? Now? How much work is this house going

631
00:28:50,880 --> 00:28:53,120
Speaker 1: to take over the next few years? Does it have

632
00:28:53,360 --> 00:28:55,800
Speaker 1: a roof that needs to be replaced or an aging

633
00:28:56,000 --> 00:28:58,440
Speaker 1: HVAC system? Those are the kind of items that could

634
00:28:58,520 --> 00:29:02,080
Speaker 1: separate a potential a winner from one that you decided

635
00:29:02,120 --> 00:29:05,440
Speaker 1: to discard into the I don't want to buy pile.

636
00:29:05,760 --> 00:29:08,640
Speaker 1: And then neighborhood risk. So what does that neighborhood profile

637
00:29:08,720 --> 00:29:11,480
Speaker 1: look like? And is it a neighborhood on the rise

638
00:29:11,600 --> 00:29:14,040
Speaker 1: or is it a neighborhood that has been in decline

639
00:29:14,160 --> 00:29:16,600
Speaker 1: for a few years. It's better to be buying in

640
00:29:16,640 --> 00:29:20,040
Speaker 1: a place where you are going to have tenants vying

641
00:29:20,240 --> 00:29:23,240
Speaker 1: for your property, a neighborhood where people want to live,

642
00:29:23,600 --> 00:29:27,160
Speaker 1: because the more potential tenants that are interested in your property,

643
00:29:27,280 --> 00:29:29,440
Speaker 1: the more rent you can charge, and the quicker you

644
00:29:29,480 --> 00:29:32,440
Speaker 1: can fill those vacancies. You definitely want to make sure

645
00:29:32,520 --> 00:29:34,920
Speaker 1: you're in a neighborhood where people actually want to rent

646
00:29:34,960 --> 00:29:36,760
Speaker 1: your property. So, Joel, that was a lot of like

647
00:29:36,880 --> 00:29:40,560
Speaker 1: r O I talk and numbers. My eyes closed over

648
00:29:40,640 --> 00:29:42,760
Speaker 1: for a second. Matthew, I'm not gonna lie. That's how

649
00:29:42,760 --> 00:29:44,720
Speaker 1: you just like holding your beer and just staring into

650
00:29:44,760 --> 00:29:47,120
Speaker 1: it like you're trying to read your fortune in the

651
00:29:47,160 --> 00:29:49,280
Speaker 1: tea leaves. Well, yeah, I'm kind of I'm kind of

652
00:29:49,320 --> 00:29:52,320
Speaker 1: more of a gut field guy, And I know that

653
00:29:52,320 --> 00:29:54,840
Speaker 1: sounds terrible. It sounds ridiculous. No, that's important though, I mean,

654
00:29:54,880 --> 00:29:56,720
Speaker 1: and we'll get more into that here kind of after

655
00:29:56,760 --> 00:29:58,960
Speaker 1: the break after in the next section too, because I

656
00:29:58,960 --> 00:30:01,120
Speaker 1: think a lot of the changeibles when it comes to

657
00:30:01,160 --> 00:30:03,880
Speaker 1: like location and some of that it is gut related.

658
00:30:03,920 --> 00:30:05,080
Speaker 1: It's just kind of like you kind of have to

659
00:30:05,080 --> 00:30:07,120
Speaker 1: trust your taste. I guess. Yeah, like you kind of

660
00:30:07,120 --> 00:30:09,360
Speaker 1: have to go with your gut, but I guess for me.

661
00:30:09,480 --> 00:30:11,600
Speaker 1: So here's my thing. I know how emotional I can be,

662
00:30:11,960 --> 00:30:14,000
Speaker 1: and like I get excited if I see something I like,

663
00:30:14,280 --> 00:30:17,480
Speaker 1: and for me, having numbers is just a great way

664
00:30:17,520 --> 00:30:20,360
Speaker 1: to kind of check myself and it's a good sort

665
00:30:20,360 --> 00:30:23,480
Speaker 1: of rule. Uh. And if I have spreadsheets and lots

666
00:30:23,480 --> 00:30:26,560
Speaker 1: and lots of spreadsheets, um, I can punch in the

667
00:30:26,640 --> 00:30:29,600
Speaker 1: numbers and I can say, I'm really excited about this.

668
00:30:29,720 --> 00:30:31,880
Speaker 1: But then if I just look at the bottom line,

669
00:30:31,880 --> 00:30:33,719
Speaker 1: if I specifically, for me, the r O. I if

670
00:30:33,720 --> 00:30:35,800
Speaker 1: I look at that and say, that might be like

671
00:30:35,840 --> 00:30:38,400
Speaker 1: the point eight percent rule, but I'm looking at, you know,

672
00:30:38,480 --> 00:30:40,880
Speaker 1: less than a fiften r O, I almost like, well, shoot,

673
00:30:40,960 --> 00:30:42,520
Speaker 1: I should maybe maybe I should just take that and

674
00:30:42,560 --> 00:30:44,640
Speaker 1: just dump it straight into the stock market and invest

675
00:30:44,760 --> 00:30:46,640
Speaker 1: in there instead. And not deal with the headache of,

676
00:30:46,920 --> 00:30:48,960
Speaker 1: you know, an investment property. And so for me, I

677
00:30:48,960 --> 00:30:51,440
Speaker 1: guess it's just a way to not look at everything

678
00:30:51,480 --> 00:30:54,080
Speaker 1: through like rose colored glasses and think that everything's gonna

679
00:30:54,120 --> 00:30:59,880
Speaker 1: be coming up matt Um triple sevens. Yeah, yeah, no,

680
00:31:00,000 --> 00:31:02,040
Speaker 1: I and I completely understand that. And I think, you know,

681
00:31:02,120 --> 00:31:04,960
Speaker 1: for probably for most people out there, running the numbers,

682
00:31:05,240 --> 00:31:08,520
Speaker 1: you know, thinking through you know, potential real estate purchase

683
00:31:09,040 --> 00:31:10,800
Speaker 1: with a lot of math behind you, you know, at

684
00:31:10,800 --> 00:31:13,000
Speaker 1: your back, it creates a lot of wind in your sales,

685
00:31:13,120 --> 00:31:15,560
Speaker 1: and it gives you, you know, that knowledge and the

686
00:31:15,600 --> 00:31:18,160
Speaker 1: ability to know and decide if you're running the same

687
00:31:18,200 --> 00:31:21,280
Speaker 1: numbers every time, you know, whether you're making a good investment.

688
00:31:21,520 --> 00:31:24,040
Speaker 1: For me, that's why the one percent rule of thumb

689
00:31:24,120 --> 00:31:26,320
Speaker 1: has actually meant a lot to me over the years,

690
00:31:26,320 --> 00:31:28,960
Speaker 1: because I'm not a huge numbers guy. I'm not running

691
00:31:29,000 --> 00:31:31,800
Speaker 1: spreadsheets on every property. And you know, a lot of

692
00:31:31,840 --> 00:31:35,120
Speaker 1: the reason I buy somewhere is is based on essentially

693
00:31:35,120 --> 00:31:37,840
Speaker 1: looking at that one percent rule, deciding whether the property

694
00:31:37,840 --> 00:31:41,360
Speaker 1: I'm interested comes close to there, and if it's close,

695
00:31:41,400 --> 00:31:43,840
Speaker 1: if it's in the ballpark. Then I make decisions based

696
00:31:43,920 --> 00:31:47,120
Speaker 1: on a bunch of other factors like like the condition

697
00:31:47,200 --> 00:31:48,840
Speaker 1: of the home and how much money it's gonna take,

698
00:31:48,880 --> 00:31:50,480
Speaker 1: you know, over the right now and then over the

699
00:31:50,480 --> 00:31:52,719
Speaker 1: next few years to improve and then or even how

700
00:31:52,760 --> 00:31:54,200
Speaker 1: close it is to your best friend's house that he

701
00:31:54,320 --> 00:31:58,720
Speaker 1: just purchased, right, which I think we mentioned in in

702
00:31:58,840 --> 00:32:01,080
Speaker 1: episode four that we literally have rental homes two doors

703
00:32:01,080 --> 00:32:02,960
Speaker 1: down from each other, and these are the rental homes

704
00:32:02,960 --> 00:32:05,200
Speaker 1: that are good twelve to fourteen minutes away from where

705
00:32:05,200 --> 00:32:07,680
Speaker 1: we actually live. But like the profile of the neighborhood,

706
00:32:07,720 --> 00:32:10,560
Speaker 1: where is that neighborhood going, what's the trajectory, and then

707
00:32:10,880 --> 00:32:14,360
Speaker 1: the potential for appreciation. So if it's close to that

708
00:32:14,400 --> 00:32:16,640
Speaker 1: one percent rule for me, then I'm looking at those

709
00:32:16,680 --> 00:32:18,800
Speaker 1: other factors and I'm saying, you know, does this house

710
00:32:18,920 --> 00:32:20,680
Speaker 1: is this gonna you know, suck a lot of money

711
00:32:20,680 --> 00:32:23,120
Speaker 1: out of me over the next few years? And you

712
00:32:23,120 --> 00:32:25,080
Speaker 1: know if so, if it has you know, an aging

713
00:32:25,160 --> 00:32:27,720
Speaker 1: roof and an aging h fact and it's not meeting

714
00:32:27,720 --> 00:32:30,320
Speaker 1: the one percent rule, then boom, I'm probably done. Right,

715
00:32:30,360 --> 00:32:33,640
Speaker 1: I'm out. It's not necessarily all these numbers that I'm

716
00:32:33,720 --> 00:32:36,240
Speaker 1: running on a spreadsheet, but it's all these scenarios that

717
00:32:36,280 --> 00:32:38,480
Speaker 1: I'm playing out in my head, and it's these things

718
00:32:38,520 --> 00:32:40,680
Speaker 1: that I'm looking at every single time, and I've just

719
00:32:40,720 --> 00:32:43,400
Speaker 1: gotten better and more astute at looking at those things.

720
00:32:43,640 --> 00:32:46,480
Speaker 1: The more houses I've looked at and the more properties

721
00:32:46,480 --> 00:32:49,320
Speaker 1: that I've purchased, the more offers that I've made. And

722
00:32:49,360 --> 00:32:52,480
Speaker 1: so as a potential real estate investor, that's part of

723
00:32:52,520 --> 00:32:55,080
Speaker 1: it too. You're gonna learn through, you know, knowing your

724
00:32:55,080 --> 00:32:57,840
Speaker 1: neighborhood looking at just the listings. Then you're gonna learn

725
00:32:57,880 --> 00:33:01,880
Speaker 1: by walking into actual home, looking at houses and seeing

726
00:33:01,920 --> 00:33:04,880
Speaker 1: what's potentially wrong with houses that you're looking at, and

727
00:33:04,920 --> 00:33:07,920
Speaker 1: comparing apples to apples. Hey, this house on this street

728
00:33:08,000 --> 00:33:11,040
Speaker 1: looks like this and cost this much money, and then

729
00:33:11,040 --> 00:33:13,720
Speaker 1: looking at a house two streets over that you know

730
00:33:13,800 --> 00:33:16,600
Speaker 1: might have different factors at play. And so the more

731
00:33:16,720 --> 00:33:19,400
Speaker 1: you look, the more homes you see, and the more

732
00:33:19,560 --> 00:33:22,520
Speaker 1: offers you make. That's really the biggest learning curve I

733
00:33:22,520 --> 00:33:24,840
Speaker 1: think in real estate is actually doing it. Yeah, man,

734
00:33:24,880 --> 00:33:27,120
Speaker 1: that's right, And so we're gonna take a quick break,

735
00:33:27,120 --> 00:33:29,200
Speaker 1: but after that we'll talk more about the sort of

736
00:33:29,200 --> 00:33:31,680
Speaker 1: intangible things like some of the things that are harder

737
00:33:31,720 --> 00:33:34,080
Speaker 1: to quantify that you want to consider when you're looking

738
00:33:34,120 --> 00:33:45,160
Speaker 1: at investment properties. Okay, we're back for the brake man.

739
00:33:45,400 --> 00:33:46,960
Speaker 1: So we kind of mentioned this just a second ago.

740
00:33:47,120 --> 00:33:49,959
Speaker 1: But location, I mean essentially that's what you're talking about, right,

741
00:33:50,040 --> 00:33:52,920
Speaker 1: So these sort of gut intangible things that you kind

742
00:33:52,960 --> 00:33:54,719
Speaker 1: of like to go off of, you know, talk more

743
00:33:54,760 --> 00:33:58,080
Speaker 1: about that. Yeah, I mean location is obviously yeah, you

744
00:33:58,160 --> 00:34:00,640
Speaker 1: hear right, And like real estate location, Look, it's one

745
00:34:00,680 --> 00:34:03,520
Speaker 1: of the three most important parts of finding one more time,

746
00:34:05,320 --> 00:34:08,239
Speaker 1: and so location is is the most important thing for me,

747
00:34:08,560 --> 00:34:12,840
Speaker 1: and specific location matters a ton. I mean, like we

748
00:34:12,840 --> 00:34:16,440
Speaker 1: said earlier, studying the market, studying the actual streets, and

749
00:34:16,480 --> 00:34:18,800
Speaker 1: knowing the homes that are located there. I mean that's huge,

750
00:34:19,000 --> 00:34:21,480
Speaker 1: because one block of difference in a lot of parts

751
00:34:21,520 --> 00:34:23,040
Speaker 1: of town and a lot of places you might be

752
00:34:23,040 --> 00:34:26,040
Speaker 1: looking can mean a world of difference and can mean

753
00:34:26,080 --> 00:34:28,400
Speaker 1: a world of difference as to whether a potential renner

754
00:34:28,480 --> 00:34:30,920
Speaker 1: wants to live there, and can change the r o

755
00:34:31,080 --> 00:34:34,040
Speaker 1: I can change the numbers completely. And so knowing that

756
00:34:34,120 --> 00:34:38,160
Speaker 1: location in particular, how close is it to amenities, How

757
00:34:38,200 --> 00:34:42,040
Speaker 1: close is it to the sounds of overwhelming traffic on

758
00:34:42,080 --> 00:34:45,560
Speaker 1: a main thoroughfare, is it walking distance to nearby park?

759
00:34:45,800 --> 00:34:48,000
Speaker 1: There are all sorts of things that I look at

760
00:34:48,040 --> 00:34:50,880
Speaker 1: when it comes to location, and I'm looking for that

761
00:34:51,000 --> 00:34:53,680
Speaker 1: upside potential. Right, So even if a house like we

762
00:34:53,680 --> 00:34:55,840
Speaker 1: we sit talked about the one percent rule of thumb,

763
00:34:56,120 --> 00:34:59,480
Speaker 1: even if it doesn't meet quite that, but the location

764
00:34:59,600 --> 00:35:02,160
Speaker 1: is perfect and I see a lot of upside and

765
00:35:02,200 --> 00:35:05,520
Speaker 1: rents increasing well over the years. Well, man, that house

766
00:35:05,760 --> 00:35:08,960
Speaker 1: still made it into my list of maybes that I

767
00:35:09,000 --> 00:35:13,560
Speaker 1: want to dig deeper on if it's got that awesome location. Yeah, man,

768
00:35:13,600 --> 00:35:15,719
Speaker 1: that potential for growth. You can't overlook that. You know,

769
00:35:15,800 --> 00:35:17,960
Speaker 1: you don't want to necessarily count on that from the

770
00:35:18,000 --> 00:35:21,439
Speaker 1: onset like that. Okay, well this will appreciate, so it'll

771
00:35:21,480 --> 00:35:24,040
Speaker 1: be better in the future. But if you're making all,

772
00:35:24,160 --> 00:35:26,880
Speaker 1: if you're making everything on that, you're essentially a speculator

773
00:35:26,920 --> 00:35:29,800
Speaker 1: at that. Yeah, exact, but that definitely is something that

774
00:35:29,800 --> 00:35:31,920
Speaker 1: you want to consider. It's just like you said earlier,

775
00:35:31,920 --> 00:35:33,880
Speaker 1: it's one of those weights that you kind of figure

776
00:35:33,920 --> 00:35:36,439
Speaker 1: into this sort of equation that this sort of balancing act.

777
00:35:36,880 --> 00:35:39,520
Speaker 1: And if you know that, well, you know, the current

778
00:35:39,640 --> 00:35:41,759
Speaker 1: r o I isn't quite where i'd want to see it,

779
00:35:41,840 --> 00:35:44,600
Speaker 1: but I know that this has huge potential for growth.

780
00:35:44,680 --> 00:35:47,319
Speaker 1: I know that that new local brewery branch is going

781
00:35:47,360 --> 00:35:49,120
Speaker 1: to be opening a couple of miles from here. You know,

782
00:35:49,160 --> 00:35:50,960
Speaker 1: that sort of thing where it's like people are gonna

783
00:35:50,960 --> 00:35:54,760
Speaker 1: love that or whatever it is, like you we would, yeah, exactly,

784
00:35:54,800 --> 00:35:58,000
Speaker 1: like the different amenities. And so location is one of

785
00:35:58,000 --> 00:36:02,120
Speaker 1: those special things where it's just very hard to quantify, right,

786
00:36:02,160 --> 00:36:04,080
Speaker 1: you can't really put a number on it, and you

787
00:36:04,120 --> 00:36:05,440
Speaker 1: can't just look at the numbers, you know, like if

788
00:36:05,480 --> 00:36:08,759
Speaker 1: you're only looking at numbers, then yeah, well you'd end

789
00:36:08,840 --> 00:36:12,400
Speaker 1: up purchasing uh, you know, mobile home parks or like

790
00:36:12,400 --> 00:36:14,720
Speaker 1: self storage units, because if you look at the numbers,

791
00:36:14,760 --> 00:36:17,319
Speaker 1: those you know, those kind of properties are the ones

792
00:36:17,360 --> 00:36:20,120
Speaker 1: that bring in the highest amount of cash flow every month.

793
00:36:20,120 --> 00:36:22,360
Speaker 1: Like that's that's where you're gonna see the revenue. But

794
00:36:22,480 --> 00:36:24,640
Speaker 1: are you gonna see the kind of growth that you're

795
00:36:24,640 --> 00:36:28,480
Speaker 1: gonna see in residential areas in a trailer park. No,

796
00:36:29,400 --> 00:36:31,399
Speaker 1: that's that's just not how that works. You know, double

797
00:36:31,440 --> 00:36:34,640
Speaker 1: wides don't quite appreciate quite as fast as as single

798
00:36:34,680 --> 00:36:38,080
Speaker 1: family homes. I'm not trying to like knock knock trailer

799
00:36:38,080 --> 00:36:39,560
Speaker 1: homes or anything. That's just I mean, that's just the

800
00:36:39,840 --> 00:36:42,279
Speaker 1: reality of it. Yes, So I think that's actually been

801
00:36:42,280 --> 00:36:45,320
Speaker 1: my hesitation up until this point to jump into multi

802
00:36:45,360 --> 00:36:48,319
Speaker 1: family housing. UM, and I have friends to investing in

803
00:36:48,520 --> 00:36:51,799
Speaker 1: areas of town that you can provide a really good

804
00:36:51,800 --> 00:36:54,600
Speaker 1: cash flow when you know, with very little money down

805
00:36:54,680 --> 00:36:57,720
Speaker 1: there their cheap houses, you know, they rent, they exceed

806
00:36:57,719 --> 00:37:00,879
Speaker 1: this one percent rule. But in my mind, the long

807
00:37:01,000 --> 00:37:04,000
Speaker 1: term upside potential of those homes, like the equity growth

808
00:37:04,040 --> 00:37:05,960
Speaker 1: and just the value of the homes rising. Yeah, the

809
00:37:06,239 --> 00:37:09,720
Speaker 1: equity growth and then the rent potential growth is actually

810
00:37:10,280 --> 00:37:13,680
Speaker 1: hamstrung by the location. And so while it looks good

811
00:37:13,719 --> 00:37:16,080
Speaker 1: on paper, it probably looks better on paper than the

812
00:37:16,120 --> 00:37:18,200
Speaker 1: home that I just purchased, you know, right now, if

813
00:37:18,200 --> 00:37:20,759
Speaker 1: you're running the numbers, well, I would still choose the

814
00:37:20,800 --> 00:37:22,920
Speaker 1: home that I bought in September over a home that

815
00:37:23,000 --> 00:37:25,799
Speaker 1: someone else bought that has you know, better numbers right now,

816
00:37:26,360 --> 00:37:29,680
Speaker 1: but is in a location that I don't consider to

817
00:37:29,760 --> 00:37:32,200
Speaker 1: have the same growth potential as where I'm looking. And

818
00:37:32,239 --> 00:37:35,879
Speaker 1: so that's why the numbers are really important. But these intangibles,

819
00:37:35,960 --> 00:37:39,640
Speaker 1: specifically like location and knowing what's going on around you

820
00:37:39,680 --> 00:37:42,440
Speaker 1: where you live and what locations are going to be

821
00:37:42,840 --> 00:37:44,719
Speaker 1: you know, hot and up and coming over the next

822
00:37:44,760 --> 00:37:47,720
Speaker 1: few years. You know, that has a huge potential. Whereas

823
00:37:47,760 --> 00:37:50,600
Speaker 1: rents on one house in an average location might be

824
00:37:50,640 --> 00:37:52,879
Speaker 1: increasing at twenty five dollars a year, and the rents

825
00:37:52,880 --> 00:37:55,280
Speaker 1: on another home and a hot location could be increasing

826
00:37:55,280 --> 00:37:58,640
Speaker 1: by you know, seventy dollars a year. So those are

827
00:37:58,640 --> 00:38:01,000
Speaker 1: definitely things that you want to factor in when you're

828
00:38:01,000 --> 00:38:03,239
Speaker 1: purchasing a home. Yeah, and you mentioned it's sort of

829
00:38:03,280 --> 00:38:05,640
Speaker 1: like the hot or the popular neighborhoods, And that doesn't

830
00:38:05,640 --> 00:38:07,920
Speaker 1: necessarily mean that we're looking at fads or things that

831
00:38:07,960 --> 00:38:09,759
Speaker 1: we think are going to be cool. It can be

832
00:38:09,800 --> 00:38:12,320
Speaker 1: as simple as, oh, well, this neighborhood has a sidewalk.

833
00:38:12,600 --> 00:38:16,360
Speaker 1: These are old school pieces of infrastructure that are built

834
00:38:16,360 --> 00:38:19,840
Speaker 1: into neighborhoods that you just don't always see, right, So, parks,

835
00:38:20,600 --> 00:38:23,520
Speaker 1: how close is it took, like public libraries to public transit.

836
00:38:23,800 --> 00:38:26,120
Speaker 1: I mentioned sidewalks because for a stretch of time in

837
00:38:26,160 --> 00:38:28,719
Speaker 1: the fifties and sixties, you know, when ranches were being built,

838
00:38:28,800 --> 00:38:31,480
Speaker 1: essentially like typically ranch neighborhoods, you're not gonna, at least

839
00:38:31,480 --> 00:38:34,560
Speaker 1: in Atlanta, you're not gonna see sidewalks in those neighborhoods.

840
00:38:34,560 --> 00:38:36,960
Speaker 1: And that does something to the walkability. It does something

841
00:38:37,000 --> 00:38:40,360
Speaker 1: to the community, does something to the neighborhood. Yeah, wide streets,

842
00:38:40,400 --> 00:38:43,319
Speaker 1: on street parking, especially in in town neighborhoods where there

843
00:38:43,320 --> 00:38:46,359
Speaker 1: aren't garages. You know, those are intangible things that mean

844
00:38:46,400 --> 00:38:50,239
Speaker 1: a lot. And the wide streets, the type of housing, uh,

845
00:38:50,280 --> 00:38:53,720
Speaker 1: the you know, the infrastructure, especially parks and libraries and

846
00:38:53,719 --> 00:38:56,400
Speaker 1: and grocery stores that are nearby. Those are things that

847
00:38:56,440 --> 00:38:58,480
Speaker 1: you definitely want to take into account when when you're

848
00:38:58,480 --> 00:39:00,840
Speaker 1: looking for home. Yeah, and a specific tip that you

849
00:39:00,880 --> 00:39:04,000
Speaker 1: can do is when you're considering a property man, drive

850
00:39:04,040 --> 00:39:06,600
Speaker 1: by it or and park your car and walk around,

851
00:39:06,760 --> 00:39:08,600
Speaker 1: you know, at all times during the week as well,

852
00:39:08,640 --> 00:39:10,759
Speaker 1: not just you know at noon when you happen to

853
00:39:11,040 --> 00:39:13,120
Speaker 1: have your lunch break, you know when at work. You

854
00:39:13,120 --> 00:39:15,080
Speaker 1: want to kind of check it out at all times

855
00:39:15,080 --> 00:39:16,440
Speaker 1: of the day and to see kind of what's going

856
00:39:16,480 --> 00:39:19,040
Speaker 1: on there. You want to smell the smells here, that here,

857
00:39:19,080 --> 00:39:21,080
Speaker 1: the sounds, and to see if it's somewhere that you

858
00:39:21,120 --> 00:39:23,760
Speaker 1: feel good about. Again, it's hard to kind of quantify

859
00:39:23,800 --> 00:39:26,319
Speaker 1: because you can't say that like, oh, if the air

860
00:39:26,320 --> 00:39:29,879
Speaker 1: smells fresh, you should buy it. But like there's all

861
00:39:29,880 --> 00:39:32,200
Speaker 1: these small, tiny little things that kind of plays into it.

862
00:39:32,239 --> 00:39:33,759
Speaker 1: And this is I mean, Joel that you like you

863
00:39:33,800 --> 00:39:35,919
Speaker 1: mentioned like your gut, that's when that comes into play

864
00:39:36,000 --> 00:39:37,640
Speaker 1: like that you can't really put your finger on it,

865
00:39:37,680 --> 00:39:39,520
Speaker 1: but sometimes you just have to kind of be there.

866
00:39:40,120 --> 00:39:42,520
Speaker 1: And that's one of the reasons that we love investing

867
00:39:42,560 --> 00:39:45,440
Speaker 1: locally as well, to be able to drive over there ourselves,

868
00:39:45,480 --> 00:39:47,719
Speaker 1: to be able to walk the sidewalks, to to check

869
00:39:47,719 --> 00:39:49,839
Speaker 1: it out, to meet the neighbors, all those different kind

870
00:39:49,880 --> 00:39:51,920
Speaker 1: of things that that we try to do, you know,

871
00:39:52,000 --> 00:39:53,680
Speaker 1: and when we when we do our our due diligence

872
00:39:53,680 --> 00:39:57,120
Speaker 1: before purchasing a home, yeah, and driving those streets, especially

873
00:39:57,160 --> 00:39:59,680
Speaker 1: at night after the sun is down, that can give

874
00:39:59,719 --> 00:40:02,000
Speaker 1: you good idea of kind of what is actually happening

875
00:40:02,000 --> 00:40:03,880
Speaker 1: in the neighborhood. And it can really give you an

876
00:40:03,920 --> 00:40:07,440
Speaker 1: idea two of the streets in that neighborhood what is

877
00:40:07,480 --> 00:40:09,640
Speaker 1: happening on them. And sometimes, you know, especially in some

878
00:40:09,640 --> 00:40:11,480
Speaker 1: of the neighborhoods Matt, that you and I are looking in,

879
00:40:11,960 --> 00:40:14,879
Speaker 1: sometimes the night activity can be street to street. Some

880
00:40:14,960 --> 00:40:17,880
Speaker 1: streets are super clean and you have you know, a

881
00:40:17,920 --> 00:40:20,680
Speaker 1: great community in neighborhood vibe, and then other streets in

882
00:40:20,719 --> 00:40:23,560
Speaker 1: the same awesome neighborhood that we like are just a

883
00:40:23,600 --> 00:40:26,640
Speaker 1: little sketchier, Yeah, a little dodgy, Yeah, exactly, And so

884
00:40:26,800 --> 00:40:29,279
Speaker 1: hopefully there's kids is like drawing on the sidewalks of

885
00:40:29,280 --> 00:40:31,319
Speaker 1: the chalk and not drug deals going down, you know,

886
00:40:31,280 --> 00:40:33,600
Speaker 1: the two blocks over, which might be the case, maybe not.

887
00:40:33,680 --> 00:40:35,600
Speaker 1: I don't know, right, you gotta check it out. Yeah,

888
00:40:35,600 --> 00:40:37,239
Speaker 1: if you want to be a real estate investor, you

889
00:40:37,360 --> 00:40:41,240
Speaker 1: have to start looking at things like that specific streets

890
00:40:41,280 --> 00:40:43,640
Speaker 1: and driving those streets at night because you want to

891
00:40:43,640 --> 00:40:45,880
Speaker 1: make sure that you buy the good rental property and

892
00:40:45,960 --> 00:40:48,960
Speaker 1: not the bad one. Nice. That's enough about your gut, Joel,

893
00:40:50,600 --> 00:40:52,200
Speaker 1: I mean, I make I mean, I mentioned that, but

894
00:40:52,280 --> 00:40:54,600
Speaker 1: it's it's true, and it's it's definitely worth mentioning. You know.

895
00:40:54,880 --> 00:40:56,279
Speaker 1: I feel like I kind of get pinned as like

896
00:40:56,320 --> 00:40:58,960
Speaker 1: the nerdy kind of numbers guy for a good reason

897
00:40:59,640 --> 00:41:02,360
Speaker 1: because I love them. I love the numbers. But that

898
00:41:02,400 --> 00:41:05,080
Speaker 1: being said, I mean I don't want to under emphasize

899
00:41:05,120 --> 00:41:08,520
Speaker 1: the gut and something about again being there and kind

900
00:41:08,520 --> 00:41:10,560
Speaker 1: of feeling it and you kind of just have to

901
00:41:10,760 --> 00:41:12,920
Speaker 1: trust your taste, uh, kind of have to go with

902
00:41:12,960 --> 00:41:15,279
Speaker 1: your gut and and feel like you're making a good

903
00:41:15,280 --> 00:41:18,080
Speaker 1: decision in addition to having the numbers back you up. Yeah,

904
00:41:18,080 --> 00:41:20,319
Speaker 1: And a lot of those gut decisions honestly come after

905
00:41:20,400 --> 00:41:23,440
Speaker 1: months and months and months of knowing a place right.

906
00:41:23,440 --> 00:41:25,439
Speaker 1: So it kind of goes back to the first point. Yeah,

907
00:41:25,440 --> 00:41:26,879
Speaker 1: you got to know it. I feel like, I say,

908
00:41:26,880 --> 00:41:30,400
Speaker 1: it's a gut decision, but that gut it's a learned

909
00:41:30,400 --> 00:41:34,160
Speaker 1: to gut. Yeah, exactly right, it's uh, it is a

910
00:41:34,239 --> 00:41:36,800
Speaker 1: learned gut decisions. You're not like yosebody sam like shooting

911
00:41:36,800 --> 00:41:40,840
Speaker 1: from the hip, Like you're still making an informed decision,

912
00:41:40,920 --> 00:41:42,799
Speaker 1: but you know your gut does tell you a lot

913
00:41:43,280 --> 00:41:45,400
Speaker 1: in that regard. You know that that is how I

914
00:41:45,400 --> 00:41:47,560
Speaker 1: picture you purchasing homes that some of you are saying,

915
00:41:47,600 --> 00:41:49,560
Speaker 1: I'm just like shooting from the hip. So something else

916
00:41:49,600 --> 00:41:51,600
Speaker 1: you want to keep in mind when you are looking

917
00:41:51,640 --> 00:41:54,080
Speaker 1: for a home that would make a good rental is,

918
00:41:54,560 --> 00:41:57,600
Speaker 1: for the most part, you want to look for average homes.

919
00:41:58,000 --> 00:42:00,960
Speaker 1: And by average, I don't mean average farming homes. I

920
00:42:01,000 --> 00:42:05,319
Speaker 1: mean homes that are average to the market. And and

921
00:42:05,680 --> 00:42:08,360
Speaker 1: basically you want to a home. You want a property

922
00:42:08,560 --> 00:42:11,840
Speaker 1: that is going to be attractive to potential renters. What

923
00:42:11,920 --> 00:42:15,120
Speaker 1: that might mean is that you're probably not looking at

924
00:42:15,160 --> 00:42:18,120
Speaker 1: like the smallest of all homes available in the market,

925
00:42:18,160 --> 00:42:20,200
Speaker 1: and it probably means that you're also not looking at

926
00:42:20,680 --> 00:42:24,799
Speaker 1: like the hugest homes out there, because that's gonna be

927
00:42:24,800 --> 00:42:27,399
Speaker 1: hard to rent. You know, if if you mentioned this earlier, Joel,

928
00:42:27,480 --> 00:42:31,480
Speaker 1: but you want a property that appeals to a lot

929
00:42:31,520 --> 00:42:32,880
Speaker 1: of people, because you want to have a lot of

930
00:42:32,880 --> 00:42:36,120
Speaker 1: people wanting to rent that home from you. And if

931
00:42:36,160 --> 00:42:39,600
Speaker 1: you've got something overly unique or too small or too big,

932
00:42:40,200 --> 00:42:43,520
Speaker 1: you're definitely limiting yourself as to the number of tenants

933
00:42:43,520 --> 00:42:45,400
Speaker 1: that you're gonna have given you a call. Yeah, if

934
00:42:45,400 --> 00:42:48,879
Speaker 1: you've got an eight bedroom, five bath, you're just you're

935
00:42:48,960 --> 00:42:51,600
Speaker 1: going to a limited audience, Like you're you're you're listing

936
00:42:51,600 --> 00:42:55,240
Speaker 1: it on Zillo or whatever, and you're you're just listening

937
00:42:55,280 --> 00:42:58,080
Speaker 1: to an audience that is almost non existent usually. And

938
00:42:58,120 --> 00:43:00,360
Speaker 1: so you also, if you have a hundred and fifty

939
00:43:00,400 --> 00:43:02,680
Speaker 1: square foot tiny home in the back of your house,

940
00:43:03,000 --> 00:43:04,840
Speaker 1: that's kind of cool. People like tiny homes, but for

941
00:43:05,000 --> 00:43:08,600
Speaker 1: a night exactly, that could make a good airbnb, but

942
00:43:08,760 --> 00:43:12,000
Speaker 1: it is probably not going to be a great long

943
00:43:12,120 --> 00:43:15,440
Speaker 1: term rental for you, you know, unless you're in a

944
00:43:15,520 --> 00:43:18,520
Speaker 1: you know, high density place like San Francisco or New

945
00:43:18,600 --> 00:43:21,080
Speaker 1: York City, right, something like that. Yeah, that's perfectly acceptable,

946
00:43:21,120 --> 00:43:23,800
Speaker 1: like a studio or a one one for a market

947
00:43:23,840 --> 00:43:26,400
Speaker 1: like that. That's that's perfectly acceptable, And that's probably what

948
00:43:26,480 --> 00:43:29,920
Speaker 1: you're gonna find if you're lucky. People in Manhattan are

949
00:43:30,000 --> 00:43:33,400
Speaker 1: used to living in like a coffin essentially, So if

950
00:43:33,440 --> 00:43:35,160
Speaker 1: that might be okay to to buy, you know, a

951
00:43:35,239 --> 00:43:37,160
Speaker 1: hundred thousand dollar coffin and rent it out for a

952
00:43:37,160 --> 00:43:39,680
Speaker 1: thousand dollars a week, I don't know, think about the size,

953
00:43:40,000 --> 00:43:42,080
Speaker 1: and you want it to be you know, kind of

954
00:43:42,120 --> 00:43:44,080
Speaker 1: normal for the neighborhood, right. You don't want the nicest

955
00:43:44,080 --> 00:43:46,320
Speaker 1: house on the block for sure, Yeah, that's right. I

956
00:43:46,320 --> 00:43:48,919
Speaker 1: mean you you want to have monest finishes. Most people

957
00:43:48,920 --> 00:43:50,279
Speaker 1: that are listening to this, if you're kind of in

958
00:43:50,320 --> 00:43:52,759
Speaker 1: the market for investment properties, there's a chance that you

959
00:43:52,760 --> 00:43:55,319
Speaker 1: can afford nicer finishes at your own home. And I

960
00:43:55,360 --> 00:43:57,880
Speaker 1: think it's really important to kind of keep in mind

961
00:43:58,120 --> 00:44:00,319
Speaker 1: that you're not trying to get this property to like

962
00:44:00,320 --> 00:44:04,240
Speaker 1: your own personal standards. You're trying to provide a great property,

963
00:44:04,520 --> 00:44:07,600
Speaker 1: a great place for someone to rent for short term

964
00:44:07,680 --> 00:44:09,040
Speaker 1: or maybe for a long term and for a few

965
00:44:09,160 --> 00:44:11,279
Speaker 1: years that they're going to be happy to live in

966
00:44:11,840 --> 00:44:15,840
Speaker 1: and resist the urge to make all these different upgrades

967
00:44:15,880 --> 00:44:17,799
Speaker 1: that you feel that like, oh sweet, now this house

968
00:44:17,880 --> 00:44:19,759
Speaker 1: is ready to ready to go on the market. Well,

969
00:44:20,040 --> 00:44:21,759
Speaker 1: well about all the people that you just priced out

970
00:44:22,360 --> 00:44:23,920
Speaker 1: by doing that. You know, if if you have it

971
00:44:23,960 --> 00:44:26,239
Speaker 1: at a certain price point, people that have a ton

972
00:44:26,239 --> 00:44:28,800
Speaker 1: of money and people that have a modest amount of

973
00:44:28,840 --> 00:44:31,080
Speaker 1: money could choose to to to rent that house. But

974
00:44:31,120 --> 00:44:32,760
Speaker 1: if you're dumping a bunch of money to that property

975
00:44:32,800 --> 00:44:34,640
Speaker 1: and you're getting like the granite counter tops on an

976
00:44:34,680 --> 00:44:37,759
Speaker 1: investment property with a bunch of nice appliances, well, in

977
00:44:37,840 --> 00:44:39,400
Speaker 1: order for the numbers to work, you're gonna have to

978
00:44:39,480 --> 00:44:42,600
Speaker 1: charge more for it, and you're kind of pricing yourself

979
00:44:42,640 --> 00:44:44,600
Speaker 1: out a little bit, and you're definitely limiting your your

980
00:44:44,640 --> 00:44:46,799
Speaker 1: potential render pool. Yeah, So the thing is you could

981
00:44:46,840 --> 00:44:48,839
Speaker 1: be you know, listing it too high where you're gonna

982
00:44:48,880 --> 00:44:51,400
Speaker 1: have nobody interested in the property, or you're gonna have

983
00:44:51,440 --> 00:44:53,239
Speaker 1: to bring the price back down, and you've just spent

984
00:44:53,280 --> 00:44:55,759
Speaker 1: money out of your own pocket for upgrades that aren't

985
00:44:55,760 --> 00:44:58,600
Speaker 1: actually going to pay off in the rental price. So

986
00:44:59,080 --> 00:45:01,719
Speaker 1: instead of putting in a four toilet. You know, there

987
00:45:01,719 --> 00:45:06,600
Speaker 1: are great low flow toilets at home depot or lows four, right,

988
00:45:06,920 --> 00:45:09,319
Speaker 1: but we know this. You can get great countertops that

989
00:45:09,360 --> 00:45:12,000
Speaker 1: aren't granite for a heck of a lot less. There

990
00:45:12,000 --> 00:45:14,000
Speaker 1: are a lot of finishes that you could decide to

991
00:45:14,040 --> 00:45:16,400
Speaker 1: go above and beyond on, you know, marble in the

992
00:45:16,440 --> 00:45:20,719
Speaker 1: bathroom or granted in the kitchen, but those aren't gonna

993
00:45:20,760 --> 00:45:24,240
Speaker 1: pay off, you know, sticking to regular tile. Making something

994
00:45:24,239 --> 00:45:27,680
Speaker 1: look good and cute, that's a great standard. But making

995
00:45:27,680 --> 00:45:30,200
Speaker 1: it look nice and fancy, you know, that's that's a

996
00:45:30,200 --> 00:45:32,520
Speaker 1: different standard and probably one that isn't gonna pay off

997
00:45:32,520 --> 00:45:35,160
Speaker 1: for you. Let's let's set back to the beer. I

998
00:45:35,239 --> 00:45:37,320
Speaker 1: love that on the ingredients section of this beer it

999
00:45:37,400 --> 00:45:43,759
Speaker 1: says pure Icelandic water. That's just good to know, right man.

1000
00:45:43,800 --> 00:45:45,880
Speaker 1: I feel like this is just a perfect example of

1001
00:45:45,920 --> 00:45:48,600
Speaker 1: just like a classic stout, which is funny because I

1002
00:45:48,640 --> 00:45:50,920
Speaker 1: think if stouts as being very kind of American at

1003
00:45:51,000 --> 00:45:54,200
Speaker 1: least the current stouts, not like the English style stouts.

1004
00:45:54,400 --> 00:45:56,560
Speaker 1: So it's kind of cool to have this from Iceland. Yeah,

1005
00:45:56,560 --> 00:45:59,480
Speaker 1: so next time you're in Iceland, pick up an Icelandic

1006
00:45:59,480 --> 00:46:02,600
Speaker 1: stout by Borg. This was definitely a fun one to drink.

1007
00:46:02,960 --> 00:46:05,000
Speaker 1: And man, I don't know why, but I always get

1008
00:46:05,120 --> 00:46:08,400
Speaker 1: so excited to drink beers from different countries. It's like

1009
00:46:08,600 --> 00:46:11,839
Speaker 1: one of my favorite things. Man, It's it's just so cool. Yeah,

1010
00:46:12,040 --> 00:46:14,600
Speaker 1: it's like you guys drink beer too, so we're we're

1011
00:46:14,600 --> 00:46:18,120
Speaker 1: the same people. We can get along. All right, let's

1012
00:46:18,120 --> 00:46:21,000
Speaker 1: move on from the beer. Let's do a quick recap. Yeah,

1013
00:46:21,040 --> 00:46:23,760
Speaker 1: what makes a good rental property? Well, first, it assumes

1014
00:46:23,760 --> 00:46:26,399
Speaker 1: that you want to be a landlord and you have

1015
00:46:26,440 --> 00:46:29,520
Speaker 1: the money for the down payment. No property is a

1016
00:46:29,600 --> 00:46:32,520
Speaker 1: good rental property if you're not in it for the

1017
00:46:32,600 --> 00:46:34,799
Speaker 1: long haul. And since we're trying to do this as

1018
00:46:34,800 --> 00:46:36,799
Speaker 1: an investment and to make money, you want to make

1019
00:46:36,800 --> 00:46:38,440
Speaker 1: sure that you're getting a deal. And the way that

1020
00:46:38,480 --> 00:46:41,160
Speaker 1: you know that you're getting a deal is by studying

1021
00:46:41,160 --> 00:46:45,000
Speaker 1: the market and knowing the areas that you're looking to purchase,

1022
00:46:45,120 --> 00:46:47,400
Speaker 1: and we're looking like down specific to the street and

1023
00:46:47,480 --> 00:46:49,719
Speaker 1: the block. You want to be that familiar with it.

1024
00:46:49,760 --> 00:46:52,000
Speaker 1: That way, when there's a deal, you can pounce. Yeah.

1025
00:46:52,040 --> 00:46:54,399
Speaker 1: And a great rule or rule of thumb is the

1026
00:46:54,480 --> 00:46:57,040
Speaker 1: one percent rule, and that means that the monthly rental

1027
00:46:57,080 --> 00:47:00,880
Speaker 1: income is roughly one percent of the purchase price, including

1028
00:47:00,920 --> 00:47:03,280
Speaker 1: those immediate repairs that need to be made to the property.

1029
00:47:03,440 --> 00:47:06,160
Speaker 1: That's right, Joel. Those numbers are very important, and you

1030
00:47:06,200 --> 00:47:07,960
Speaker 1: can dive into our o I as well if you

1031
00:47:07,960 --> 00:47:11,160
Speaker 1: wanted to get a little more specific unless back of

1032
00:47:11,239 --> 00:47:14,440
Speaker 1: the napkin type of math. But the other thing is

1033
00:47:14,440 --> 00:47:16,560
Speaker 1: is you can't only look at the numbers. You gotta

1034
00:47:16,560 --> 00:47:20,400
Speaker 1: go with your gut. That's right, your favorite go with

1035
00:47:20,480 --> 00:47:23,640
Speaker 1: the gut. You want to look for specific homes and

1036
00:47:23,680 --> 00:47:27,400
Speaker 1: neighborhoods that have that potential for growth. There are a

1037
00:47:27,400 --> 00:47:29,719
Speaker 1: lot of intangibles that are really hard to quantify, but

1038
00:47:29,760 --> 00:47:32,719
Speaker 1: you want to take into account schools, parks, other amenities

1039
00:47:32,760 --> 00:47:35,759
Speaker 1: that are going to make that property very attractive to

1040
00:47:35,880 --> 00:47:39,640
Speaker 1: your potential tenants. And don't neglect cash flow. That's often

1041
00:47:39,680 --> 00:47:43,200
Speaker 1: been the mantra of real estate investors, and while it's

1042
00:47:43,239 --> 00:47:45,320
Speaker 1: not the end all be all, it is an important

1043
00:47:45,360 --> 00:47:48,040
Speaker 1: thing to consider. You want the property that you're buying

1044
00:47:48,040 --> 00:47:50,560
Speaker 1: to be cash flow positive, and if it's not, you're

1045
00:47:50,600 --> 00:47:53,920
Speaker 1: likely making a speculative move and that's not good. So

1046
00:47:53,960 --> 00:47:56,200
Speaker 1: all these things that we mentioned, they're kind of like filters,

1047
00:47:56,200 --> 00:47:58,919
Speaker 1: they're like weighted measures. And so you know, not one

1048
00:47:59,040 --> 00:48:03,440
Speaker 1: thing necessarily disqualifies a home from being a good potential

1049
00:48:03,480 --> 00:48:08,200
Speaker 1: rental property. But the more you are familiar with potential

1050
00:48:08,239 --> 00:48:11,319
Speaker 1: investment properties near you, the more you'll start to see,

1051
00:48:11,360 --> 00:48:13,320
Speaker 1: you know, your own formula kind of come into play

1052
00:48:13,400 --> 00:48:15,200
Speaker 1: based on some of these things that we just talked about.

1053
00:48:15,440 --> 00:48:17,360
Speaker 1: So taken as a whole, it should give you confidence

1054
00:48:17,520 --> 00:48:19,720
Speaker 1: when it comes time for you to buy an investment property.

1055
00:48:20,239 --> 00:48:22,799
Speaker 1: Let's wrap it up. Thanks everyone for listening. Our home

1056
00:48:22,880 --> 00:48:25,160
Speaker 1: on the web is how to Money dot com. We'll

1057
00:48:25,200 --> 00:48:27,520
Speaker 1: have shown us up there for this episode, including that

1058
00:48:27,600 --> 00:48:30,319
Speaker 1: link to any optical cheap eyeglasses for you people that

1059
00:48:30,480 --> 00:48:32,440
Speaker 1: you know wear I'm and stuff. It's true, man, they're

1060
00:48:32,480 --> 00:48:34,440
Speaker 1: my favorite. And if you like what you hear and

1061
00:48:34,480 --> 00:48:37,440
Speaker 1: you've found this episode in this podcast in general helpful,

1062
00:48:37,480 --> 00:48:39,560
Speaker 1: we would love to hear from you guys, please leave

1063
00:48:39,640 --> 00:48:43,600
Speaker 1: us a review on Apple Podcasts. Honestly, that just really

1064
00:48:43,719 --> 00:48:45,880
Speaker 1: helps get the word out and it helps other listeners

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Speaker 1: find our podcast, and we would love for you to

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00:48:49,080 --> 00:48:51,120
Speaker 1: to kind of partner with us in that way. Thanks

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00:48:51,120 --> 00:48:54,160
Speaker 1: for listening. Until next time, man, Best Friends Out, Best

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Speaker 1: Friends Out. M