Quitting His Job with Real Estate After Cracking the Cash Flow Code
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Ever wondered how some investors are maximizing cash flow in today's competitive real state markets? Today's gst has cracked the code with a unique strategy co living by creating shared community oriented spaces. He's achieving impressive cash on cash returns that outperform traditional rentals. Tune to learn why colliding might just be the ultimate strategy for real city investors looking to boost their returns and how would could work for you, too.

This is the real state rooky podcast. I'm actually care and i'm here with tony j.

Robinson and walk into the podcast where every week, three times a week, we're bringing you the inspiration, motivation and stories you need to hear to kick out your investing journey. And today, super excited to welcome Miller mix wain to the podcast. Miller.

thanks so much for japanee this day. Talk about living.

Miller, colic even became involved in your life. Give us a snapshot of what you were doing before real estate yeah.

So before a real estate um I was a nuclear rocket scientist so interesting title are very hard to do and so i'm glad that i've sense transitioned um to being full time real state. Yes, that's what I was doing before this. There was a great w two that kind of got us started as far as that was a great income that we could use to buy our first handful, a house hacks that turned into, you know larger portfolio down the road. But that was kind of the kick start that gave us our our .

initial portfolio. And Miller, why did you decide to choose? Will state, as the wealth of vehicle net, you wanted to dump that money and to, compared to all the other investments there are out there.

IT wasn't the original idea. One of I was in high school. I had a coach who was teaching economics, and he did not teach economics at all. He just three day and I videos up on the board.

I mean, honestly, not a bad thing, like I can remember anything I learned in economics in high school. But I do know dambray and principal, he teaches yeah .

like he was much Better than knowing about you know Better serve and know maybe that's becoming more applicable now. But I found that much more valuable to know about how to budget, what are mutual funds, index funds, you know those kinds of things really.

That's why I kind of learned what compound interest is because dave are great about shown all these plots like if you put in thousand bucks for the first five years by forty IT turns into this first is of the guy who started investing fifteen years later and put in like ten grand a month, whatever. Um that's kind of where I learned that principle. And so throughout college, as I was doing internships, um you started making money.

I would dump all that into index funds, mutual funds. And honestly, that did grow to be pretty a pretty decent chunk that helped by our first house sec. But I was sitting there in college thinking about what all these returns look like.

And I remember that my parents had mentioned that they would buy me a duplex in college. I could learn how to manage and all this kind of stuff. And that did not happen.

I'm sitting in an apartment you as i'm thinking about this. So no is great that they planned at that seed. But then I know started doing some research like, oh, this is a potentially a faster way to build.

Well, it's a little bit more involved. You have a little bit more control, which is something that i'm in of. Um so then that can I get me started on the real state path?

I want to get into the the code living strategy, which you've kind of nail help you scale this portfolio on a profitable way. But before we do you share with this, before we hit record that you you had a recent life event as a relates to to your day jobs. So what what was that man and and kind of give us the backs and how you got there so quickly.

So I working that w two for probably two and a half years as of a couple of months ago, I quit that to to full time you know purchase more colliding properties, focus on optimizing management even more. And you are just focus on on the self employed business side of things. Um the way that I was able to do that, honestly, I think I ve made that jump earlier than a lot of people would.

So I I know a lot of Ricky out there like that to go right you anna, get your w two. You quit your job job and focus on something that you can build yourself and this kind of the spectrum of win, people feel comfortable enough to quit. So in my case, my advantage was that I have a .

wife who has a job, okay, we go get wife that has a job.

Yeah lasting strategy.

So so so SHE SHE works .

a job um SHE makes I mean, I don't mind saying here, I guess so SHE makes around sixty granted year, and we've kept our expenses low enough to wear that covers all of our expenses. So whenever I did have a job that was great beyond top and that was like, great, you know, that helped us scale, but we ve got to the point towards like, hey, I can lose, you know, the the money that I was making.

We can you know reduce our income by half, still survive, you know paper groceries, pay for my many houses covered because we house hack, but pay for all the things that we need to pay for. And that will give me the time to really scale the business so that you know if we did stay with the w two three years down the line, we might be one hundred and fifty thousand a year growth. But is that we're going to cut IT right now. But then three years on the line will be way higher because we've had that example, tal growth because I had time to spend on the business first.

Little congratulations on taking that leap. I think um it's always cool to see someone use realised as a vehicle to actually achieve some level of financial independence. But two things I want to comment on because I think they are important for the rookies.

Understand first was that you didn't just jump off Willy nearly right you you were very methodical and intentional about keeping your expenses low enough to the point where you could survive on on a single incomes or even if Millers realization investing you know activities didn't bear the fruit that you were looking forward, you could still make sure that the lights were paid, you the lights are on, bills are paid and everything saw there. So I think that's the first piece. But the second, you've got a degree in an experience as an engineer that is probably going to be just as marketable two years from now, five years from now, ten years from now.

So the absolute worst case scenario for Miller is that you attempt to go full time and you realize business you tried for twelve months, twenty four months, thirty six months doesn't work, and then you just go dust off the old resume, get a job as an engineer making the same amount of money you are probably making before, maybe even more. So the the worst case scenario for you is, is what you were already doing. So I think there's a lot of comfort in knowing that, hey, this doesn't work out. I can just go back to what I was doing before IT to that crush him and all you are can walk into that decision yeah yeah.

That wasn't important peace. I think it's important to maintain good relationships uh, at your job like you know don't bring the all of that so you know be a good you know great employee why you're there because whatever I did give my notice um also be generous with that like anyway I was going to quit but I gave me know like two or three months just going to help keep things alive there yeah I mean they were like you please stay part time like please and i'm like, I don't know you know maybe but I I feel like I susie, you know, totally. You cut us off and go do my thing, but they offered that and then they're like, okay, well, whenever you want to come back, you know then you're welcome. So I think keeping those bridges a is a great idea before you make the jump.

before we get further into the show, Miller kind of give us an overview of what your portfolio looks like today.

Yeah so right now we're at six properties, which is forty one rooms um and that just quick you know recap is that was we had one house sak, we had a second house. Ac, I still live in the second house. ACC.

This is totally rookie applicable strategy. We've been here for a couple of years, and since then, we bought four more than we do not live in. So that's how we .

get the total of six. So let's get into that strategy. I mean, five properties is at forty one unit that's a lot of units packed into his properties, and they're not small multifamily.

These are single family homes. Zn, that you're purchasing. okay. So let's go into co living.

Give us the breakdown of what this is and how you implemented the strategy into your properties? yes. So I think when you're .

thinking about buying a property today or anytime within the last couple years, we're higher Price, tight market in higher interest rate, tight markets. So in most cities across the U. S. Is going to be difficult to buy a long term rental just out of the box, twenty percent down, five percent down, whatever um and make a cash ful.

So you're gna need to do something a little bit special to can get that cash ful out so you can live off of IT and reinvestment or what if we want to do so, kind of the three strategies that always come to mind as, like you could short term rental a property and you can do this. All these strategies you can do when you live there, there's a house hack, or you can do IT and something that you don't live in that you move out of. But either you're going to short term IT, you're going to be term IT know thirty days or longer and it's furnished whole private space or you could rent out rooms.

Um and so we evaluated kind of all of those strategies and landed on renting rooms. And historically, there's been some stigma that can go along with that. It's like, hey, um you're just claiming a bunch of people into a house.

And even more recently, if you look around online, a lot of people are getting rid of living rooms, getting rid of common spaces so that they can pack in more rooms and eat more. Cash flow out and I think is because of the interest ate environment and it's tougher to cash flow than ever. But um i'm not a fan of doing that.

So instead of just renting rooms, i'm doing what we're calling co living which stands for the coast community is like community living and the idea behind this is yeah you're renting out room but you have a big emphasis on keeping the living room um having house events, doing all these things, going to spur friendships within the house because I mean a lot of IT was really lonely out there honestly. So this kind of helps helps out with that and of course helps out with. A lot of the affordability issues that renters can see in these, you know.

bigger cities. Ricks, we want to hit one hundred thousands subscribers on youtube, and we need your help while we take a quick ad break. You can go on over to youtube dot com flash at real state rookie and make sure you subscribed to the channel. Stay tuned after a break for more from Miller.

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Guys, welcome back to the show where we are .

joined to by Miller.

So with a client, what are some things you're looking at our minutes that you're looking at when you're purchasing a property? What does your I box look like as your analyzing them?

Yeah so I I think that starts with the market um like not not every markets going to be great for this. Um a lot of them will be but um but not everyone will also.

So when you're looking at the market piece, the first thing that I look for is how unaffordable arrest there because of you guys have heard with mid terminals like you ve had, you know traveling nurses, that's like the typical person that you're gonna to and the code living space, the typical average tenant that everyone is kind of looking for is just lower income workers like we have elementary school teachers, social workers, security guard, minimum wage people. Um so if you can find the city where those people exist, then you're probably in good shape. So what that means is you're going to look for rental and affordability.

So specifically, if you look at like studio rents in the market or you look at like one Better apartment rent that's like the most comparable to a room like historical, that's going to be the cheapest thing that someone can go after. So if you look at that and divided by like what the typical income is in the area, the higher that percentage means its rooms should be in more demand because people need cheap er housing there. So say like you know kind of start up by doing that.

But when you started looking at houses specifically, the easiest thing to screen them out on IT is parking. Most houses do not have sufficient parking and that's a lesson that we learned the hard way. The first two houses that we bought, the the two house hacks um at both of those I didn't really care about parking too much like I do legally we can park on the street wherever we want to so like you know legally i'm in the right so I will buy this house. And we've had had issues at both houses. At the first one, once we get the house filled up, I had a parked across the street in front of the neighbor house, and I came out one morning and all my d cows have been pride off on my truck and they're sitting on the ground.

oh my god, juice.

So, you know, maybe that you know, extreme case, but even like in my current house sec, sometimes neighbors come asking me, hate, what's up with all the parking? And fortunately, I live here right now. So i'm like, oh, you know, mortgage just expensive of some romains, so I kind of goes over low bit easier.

But if I didn't look here as I got on property, then you imagine you could start to see some issues. Um so first things looking for parking that can be garage parking. So two car garage you can have two people there. Um IT could be street parking in front of your own house. IT could be a corner lot where you park along the side of your own house or kind of the the sneathy one that you can that you can put in there is across the street if it's like a neighbors side yard like they are on a corner lot and never since along IT then I don't mind if we part there because the the other you know the owners is not going to see the cars and all of that um we've found that that's been okay but never apart in front of someone .

else does the first thing to look for preciate down kind of what to look for. And the the affordability focus, I think is such a smart waited to kind of tackle that because if one bedroom I K I pull that up, and like in the air that I map, we have one bedroom gone for one hundred to over two thousand bucks for a one bedroom. You know, there are some that are close to three grand, which is oka rise of makes sense.

like seven fifty .

even where I live, where there's opportunity .

yeah like if you do see that rents are seven fifty and that isn't indicated that hey, why would anyone rent five hundred, six hundred dollar room when they can have their entire private space for seven hundred bx? So that's a great example of why we do look for the places with the seventy hundred doors, eighty hundred dollar rents and then incomes are not keeping up with that.

I want to get into kind of how you choose in the property here. But before we transition over there, will I just want to really clarify for the listeners what the difference is between co living and just like a traditional rent by the room types strategies. So I guess, is there a difference? And if there is, can you clearly identify what those differences are?

Yeah, there's a difference now that it's become a need to differentiate those two things just because in the space at this point, it's becoming more common, like I said, to get rid of those community type spaces. I mean, in twenty, you know twenty, when you could buy things that like a decent Price and you so how like the lower interest rates, IT was easy to buy a five bedroom house that would cash for if you went to that five rooms as times get tougher so that people can maintain cash flow. They started cutting out those community spaces. So that's why I think why I different rate this into like a little bit different of a class because even in the current environment, you can still like we catch up very stronger, very strongly on these properties. But IT does take more work to do that like we look at eight hundred listings before we close on one where the guy who is cool with getting ready of this living room could probably look at five listings.

find one that works. Can you clarify what .

do you mean getting rid of? Yes, good question. So it's becoming more common to wall off. You basically turn the living room into a bedroom, which building bedrooms is the name of the game with the strategy like we do build bedrooms and houses all the time.

But we make sure to preserve the living room because we want to have space for the community events that we threw. We want people to come on from work and sit down on the couch in turn the TV, and then someone else walk through the living room and all you're washing the show and watching IT too. Look, let's set down and your hang out and and watch IT. So so that's what I mean .

is turning the living room into a bedroom. You mentioned community events a couple of times here as well. Miller are like explain that as well.

Like are you actually hosting as as a landmark like different things with in the property itself? Or do you mean like you're getting all of your different properties together? And one kind of communal described the community peace.

There's no set guide for how to do this strategy at this point. So there's a lot of different ways you could do things that could be the right way. What I mean by this personally, is that everything that we do in our properties, I want to be able to do remotely because if I do have to go over there, IT is gonna ender scale.

But if you want to be, if you want to have five places you want to live next to all of them, that's totally cool. If you go over there, like fire up the girl and have your residents come out and, you know, get feedback and chat with them and everything. So I think that is a great idea. But in our case, what I mean is we're doing things like having pizon nights uh totally doable remotely. I can pull up the pop Jones APP and schedule for three days on the line to deliver pizza seven P M.

And then just message all the all the residents um hey Peter is gonna here come downstairs gravis slice and you know meet meet you meet your house mates and kind of the the the idea behind this is that one IT allows people to meet each other and socially you they can get friends and help with mental health and all that kind of stuff. But too, I really does help out me as the landlord, as the investor as well because as soon as somebody meets one friend. They're likely to stay there for like three months extra, six months extra just because they have a body in the house.

Now because like by default, when you move into these houses, you can like stuff on around, like avoiding people. But just by providing like Spark for people to meet, that really helps you reduce your turn over and all that while you know make friends as well. You could also do game nights and movie nights, and there's a lot options.

And then there's me who hides when the male dy comes just a drop up. We can try. So the the big question that I think a lot of people are always wondering in these situations as what are some the expectations you have to set. So there are not disagreements and how do you handle the disagreements?

There's a lot of preemptive things that you need to do to reduce conflict before what happens. I guess I would say far as when when conflict does happen, you just got to handle IT you you got a email people and call people and you it's going to be different, different situation. But you can stop these things from happening in the beginning.

Um so my wife and I we lived in you know room rentals throughout college. So we were when we went to go you know to your first house, we knew what could go wrong because IT happened to us. Um so for example, I want to I moving moved into my college apartment.

All the other guys dari lived there. I didn't know them. I was moving in. You're just a new guy and I bought toilet paper for the for the room, for the bathroom. That means sky.

And I noticed that my toilet paper staff is going on a way quicker than that should be. Like there's no way using this much. So you know, obviously, the other guys using IT and that's gna happen like that's just that's that's that's what's going to happen in these sort of properties.

So to mitigate stuff like that and you know prevent friction that would kind of occur between residents, we provide all shared supplies for the house. So you can think of this kind of like a short term rental. We a lot of the things we do, we really model after that strategy because we do want to provide an exceptional experience with, you know, good living.

So but I mean, that may sound like a headache. Like, oh, how are you gona provide to that paper? So any consumable that used by multiple people were gna provide.

So like how do we provide two of paper and paper towels, trash bags and distal open hand sop and all of this um I i'm not driving around every saturday drive and supplies off like like I say we we want to do this remotely. So IT is as easy as just ordering the stuff on amazon two days later shows up. And I guess just like a quick tip like on the label for the name, we just put resident put in supply closet.

So IT shows up it's label to know exactly what it's for. And though i'll put in a supply closet, and the way that we get notified about this, we used to just have people text us, like, Y, I pulled the last toler paper role, you know, I can get order somewhere. And that worked for a while.

But now we have like a laminated sheet on the on the supply closet with A Q R code on IT that just goes to something like a google form, and you could totally use that. And they just drop down. What have you at drop down amount of batteries for the TV remote? You don't boom, it'll show up in two days. So so that's one thing. There's a probably a .

lot of steps we can go into. Yeah, that's awesome. I think there .

the Q R code is such a great idea. And my mi, you're managing short term side, but I just want to plug I have no relation to this company, but I I met them at the owner and seemed like a cool tool. But supply mate dot I O, supply mate dot I O. And there are tool. They initially started off in the automotive industry where they were helping people in, like service department, said dealerships, management tor, but that kind of recognize the needs of management ventres in different industry. But supply me that I O and basically what you say, like there is a different Q R codes associated to different products and then a kind of fees into the software that you get notified as a person, you can kind of Tracy was in order, what hasn't? So just if if folks are looking forward tool to manage that, supply me that I want to check out.

Tony, a question for you, is there any other property management soft that has integrated already, like for long term rentals, like ephod o has an inventory integrated and music for our locks and smoke alarms, just things like that where we can buy in bulk and then we go in, you know charge whatever property that went to. But does any short term rental, softer have that already integrated? Yeah.

some of the P. M, S, S. Might have that built in, but there is a total we use called breeze way that has an inventory kind of functionality and breezes that we use for like all of our back a house Operations schedule cleaning secure of our maintenance tasks.

But there is no Q R code functionality. So IT really is just like as the cleaners take things, they can kind of demand systemically, like as we're doing their cleaning. But there's like Q R code to say, hey, we need to reorder this things. So IT works in a slightly different way that you achieve the same in result OK.

So Miller or any other tips and trips up process here you want to share because that this is also some, I think, really valuable for someone you know even if they're not doing clive, I think a lot of the stuff is applicable to any kind of system you're creating to run rental.

Yes, some other big ones that we've done that I really hope things um we have a handy man that goes through those quarterly inspections on the properties. So you know with with colic, you know you have six seven people in the house. You're gonna have you're gonna more valentine.

Um for some reason there's always a toilets seat that has a crack in IT. I don't know why, but at any given time one of my toilets seat to scratch. Uh you know you'll get um more use on the forest.

I have just going to leak faster um A A lot of these things you're gonna doors stoppers to go missing because people are open in seven doors. Um so whenever we get those sort of requests that aren't super immediate like our missing the door stop, okay, alam is going to add that to a list. Not going to have my handyman go out to just install one door stopper um because they're okay without that for the next you know month, that's fine.

So they will have our handy man come through on this you know every three months hit all of those things at the same time, I guess. So we want to be able to manage totally remotely. I I do live near my croppies, but I don't want to go to them um if I don't have to. And so we haven't record the entire house, record inside of all the bedroom. He has access to the electrical clocks, everything, so goes to the bedroom records, everything uploads that I can review IT to make sure no one has a dog, nobody has holes in their walls, that sort of stuff.

Our guys, we need to take our final head break, but will be right back after this.

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Okay, let's jump back in with Miller. Miller, before you go into the next one, what are you paying the handyman to do these inspections per property?

Yeah, I think it's like one hundred box per r like eighty box per effective ly, like two hours of his time or so. Um and you know the more properties you have, I guess i'll say the Better you can get on pricing. So all kind of lead that into the next uh, tip as we have a cleaner that comes through on, in our case, on a monthly basis.

So a lot of our residents are military, so they are typically clean and orderly and all that. If you had students, for example, like that's another categories to cator two, maybe you need to go every two weeks or every week. You know like there's just to be a little bit messy, are probably um so so know they need to get some sort of frequency.

But the cleaning are a lot cheaper than you would think because you know, if the cleaning in your market usually runs like three hundred dollars or two hundred and fifty, let's say that's we're cleaning the whole house. We don't need the entire house cleaned. Residents take care, their own bedroom there are going to back you and do whatever they need to do.

And there we're just cleaning the shared spaces, living room, kitchen, shared bathroom. So it's about half of the house that works out to be about half of the Price. We have to find a company .

willing to take that on. That seems like you have a lot of the common things that could cause issues taken care of and included in the rent, which I think is a great idea, specially like not having to fight over a dirty bathroom. The person you're living with her, you know, who's using all of the toilet paper one fall .

of us before we move off this space. And I I guess someone connected, right? Because you you're including a lot Miller, the property, which is maybe more than what a typical tenant is a custom to, right? Like they're getting the consumer balls are getting the cleaning there is mainland inceptive involved. How are you marketing this when you're actually posting these places for rent to really communicate all of what's included?

yes. So of course, there's rental descriptions, but no one reads those. We we have all of that in there.

But in reality, what happens is people hop on facebook or you know whatever listing site they are going to and they work by Price and they message the top you know ten and they ve ever replies first you know who you're gonna look into further. So I guess I say they reply really quickly. But as far as we um how are conveying these these benefits?

I think the biggest thing that we do is whatever we reply, I include a youtube blink to the specific room that they're interested in, which gets them personally kind of involved you like. So so for example, like if you're on zillow when you're looking for a house to buy, and I think they do this for rentals too, but you know you can do those three like walk three things we like walk around and can get a Better sense of the space. That's cool, but it's so cold, right? Like no one's talking over IT.

You even like when there's like old sailor sending videos s they're just walking around like not saying anything. And IT is a very like cold like sales approach. So instead, we have this youtube tour of the whole house plus that room that they're interested in. And i'm talking over the entire thing. And my god, yeah, here's the kitchen you can think of IT like a short term mental we're going to provide everything you need except for your, except for your food um you know here's the wifi you know the wifi included as i'm talking over explaining the benefits and people are very likely to watch that youtube blink? Or is there are not very likely to check out that that listing description?

Mother, I can tell the year you've got like an engineering background because every question there will be ask you like here. Here's the exact process that I have laid out for how to tackle the singer and said, I love that .

almost like he was a rocket .

and I know it's interesting.

okay. So along the lines of you create all of this information to give ahead to your perspective tenants, but what are you doing the kind of give them to ensure some kind of privacy and violin so that it's not just all shared, all community, is there anything that you're doing for that kind of aspect of IT? Or maybe somebody who doesn't want to, you know completely live with other people?

Yeah so um I mean, first thing I think their bedroom totally private. I've talked to some Operators in the space don't put locks on the doors that I cannot imagine not having a lock on a bedroom door, especially when you've live with random people uh so so first of of course there's locks on the doors um and they're electronic and that's great.

We can program them from a far that's that's super great um so they can retreat to you that space at any point that they want to um but the all the community stuff is totally optional. I mean, we find that even if somebody doesn't seem too keen on IT, eventually they happen in. And like, you know, it's kind of benefit to them. But if they don't want to, they definitely don't have to. But I just kind of does improve the experience I would.

Now what about this screen of them? There's definitely different rules. If you are living in the property, you can be more selective and don't have to be as strict with fair housing.

But what about the properties you are not living in? How are you screening them? Is there anything specific you're doing to make sure they get along with the other residents that are already in there?

A super engineering answer. There's a fun all and we put a lot of things into the top and a certain percentage will convert along each steps. So so breaking this down, um we're going to bring a lot of people into the top of this fund.

So let me start by saying this. So if you have a long term mental, for example, let's say, yeah you're a lucky and you have uh, two properties that you move out of, you turn the mental terminals. The marketing headache there is very low.

It's like you have two properties they're going to stay there for three years on average. Let's say like okay, you're feeling a bit and see you every year or or less than that. Um so you can kind of willingly like, oh, there's a baccy let me go, let me go handle that is nothing too crazy with a colic property.

Let's see up two properties, six bedrooms each, and they stay on average for a year. You're never to turn over every month on average in that case. So you're always basically you're always looking for someone knew that's where a fun al does come in handy because you're always bringing people in.

You always need a certain amount to come out of the bottom and then become residence. So bring people into that function listing on facebook and zilla and some of these places. But then the next piece that we do is part of the screening is everyone who messages us.

We include that youtube link and then we include a link to something like a google form that ask the exact same questions. The application like the exact same thing, it's just free and it's unverified information. So instead of of running a credit check, IT just says, hey, what do you think of credit cards? Instead of having another pasta, just say, hey, what do you think Green come is?

Um and based on those responses, we can you can do automatically or you can do that manually in the beginning, but we can reply to them and say, hey, that looks like you qualify. Here's a link to the application. If IT looks like they may not, you don't need to allow them to apply because haven't technical you know been denied but you can say, hey, that looks like your critical with me, the requirement for free to apply if you want to um so then the certain percent as will apply.

And at that point, that's where the real screening kicks in. So the application um the data that we get back super standard to any long term rental that you could read about in and any book out there. Um we're onna check their credit.

We're gonna do look at their payment tests and see if they make enough. But where I get a little bit special for client, I mean, everyone should do this, but we do actually check the rental references. We actually do call them and text them and email.

And the reason that we do this is because it's a really good indicator of if they have good references, they probably have pretty good behavior though, though, you know mingle in the housework, know there there's be less issues if we have references from people who actually met them and said that they left the place clean, were they were nice and all that sort of stuff. So we will actually reach out to them. And I think one special thing that we do is actually adjust the security deposit based on how many positive references we get.

So the reason behind this that say that someone has three awesome references, lin ord say that they are great. They were clean, they moved out and gave us notice and all that. They're not a risky tenant to us at that point, right? They've proven to three people that theyve been great.

So I don't need a whole month of the security deposit, and they need half a month, let's say. So now they only bring me four hundred dollars for security, depart instead of the whole thing. And where is really interesting is if they provide zero rental references, right, that's kind of a red flag, is like, do they really not have any history or do they have bad history and they they don't want to provide.

So in that case, we charge a higher security deposite that you are you are a very risky resident to us. You have zero referenced so are going to charge you one point five times or two times a monthly rents um you know whatever you decide. And that honesty screens out a lot of people automatically who would be bad residents because they have that poor history.

And then they see that they don't provide any references and now they get the higher security deposit and they don't want to pay twelve hundred box just for the security deposit. They move on and go play somewhere else to live. So I guess that's one big tip there for how to get Better .

people in one follow questions that Miller, you're not a lot of screening up front, which i'm sure helps prevent this. But I would assume that maybe there's been a few bad actors, bad apples, not good fit that have maybe slip through the cracks. Has that happened? And I guess what were the repercussions of that? And how do you actually deal with that inside the house?

yes. So there's a couple of examples. So over the years, we've had, I think, close like eighty residents.

So of that, I can't think like to you know incidents where I really had to step in like we're talking about at some point, you do have to step in and take care. Like the preempt of the product of stuff won't always help. So there's a couple of things that have slip through when we just get rid of this person.

Like three weeks you um he was in our personal house tag and uh my wife and her started having issues so like you know I get really motivated to get the first place and my wife is on me about IT like rightly so. Like things were not going well, but if something that I messed up on the front end, I let her in when he did not meet a certain criteria. I think IT was I think IT was.

Credit score was the main thing, but I think her rental references like which can be like kind of weird or something like that, but anyway, I still let her and even though he didn't meet a few things because and this is a good lesson for the rockies. But moving from the first house sac to the second house sac, especially if you're renting rooms, is actually really hard because we left the first house. Sag had two vacancies there because now we're gone without occupying the basement with the two rooms.

Now we're the second one, and we have four new rooms that gets a lot of vacancy to take all on at one time. Um so so I have all of these i'm working on get everything filled up and I feel like I have to start compromising on the criteria in order to get that filled up. Instead, what we do now like we bring a new house on, we'll have six vacancies.

Again, like similar situation. What I do is to drop all the Prices of everything by twenty percent. So then more people are in that funnel.

And I can still pick people who are qualified. There's just more than to choose from. So I think that's a Better approach there. But yeah, in that case, I compromise on some things. And he was kind of rude SHE was very rude. Uh ultimately that's not you know reason to kick them out um but there is like some least violation that we found that were you know we could use but we offered her um just basically cash for keys to leave instead so we won't have to do the eviction.

What was the amount they did for cash for .

keys that was just like a like a hundred dollars or something and actually seemed that SHE is not even really taking IT well worth IT. Yeah because because really what I said I was like, okay, I can you be out in the next seven days is like you want to pay rent for for those seven days SHE was like, no, just leave today. So I actually worked out super, super well. I was in when this happened for bp cos, I was a static that I was I was worried about at the whole time and I was just there was over.

So so Miller, I guess along those lies, that's something that you're having to do with your day to day. Like now that you're not doing your w two job, what are some of the other things that you're actively doing now as a full time investor? You know give us kind of the inside of the day to day. Are you looking at new acquisitions as IT, all just tenant management.

So in our case, we're looking to a continue scaling our portfolio. So a lot of time is spent on the management side optimizing things. We've had a few VS that we've hired, a few vert assistance, like try to help with this management stuff.

And I think i'm not good at hiring yet and i'm not good at managing yet. These are skills I really need to figure out because theyve all quit. Everyone was quit.

So now is back to me. So so i'm optimizing some things and then gonna focus on hiring so I can let go some of that. But the other portion of time is working on acquisitions.

So we're looking at more deals, uh, looking at the parking look and where we can build rooms, all that sort of stuff that I mentioned at the same time, we're looking for more money. So at this point, we do by with partners typically. So it's a lot of networking. It's a lot of following up. It's a lot of phone calls and and dinner and given beers with people, you know, all that set of maintained and build relationships to purchase properties down the road.

Will million, congratulations on the success that you've had so far building this portfolio. And I think even more cute s to you for doing getting way that was very we're going to make sure the reaction systems and processes in place as we scale this thing up because I think actually I will talk about this where sometimes you scale so quickly that you kind of look down and like there's a big hole, the middle plane, this hole, right.

it's like all in your head, and you have to stop into the time and try explain to somebody else have this, what they happen.

So could you for to doing in the right way. So I guess last question. middle. We let you go here as as the market evolves, as this model of involves against what do you think is maybe like the the future? What are some of the trains you're keeping an eye on or or maybe even more importantly, what is a Ricky need to keep in mind if they want to be successful with this strategy?

Yeah I mean, the biggest thing I think to keep in mind, especially as a rocky, is that if you're onna house hack, one of these that is the absolute best way get started like financially, that makes sense in everything.

But living in the property while you're managing IT is the best way to build your systems, right? Like whatever we lived in that house and we have three roommates you know living up above us, I could literally like we've added the cleaner that was something new that we added and I should go there and asked them like, hey, how is this um do you like this? Do not like IT how often you think we need to do.

It's like a super quick feedback loop. Be able to go b stairs and talk to them. So really nail all your systems down when you live there so that then when you move to the second one and you you're not physically and that one anymore, you still you have all those learnings ever those tips and tricks. You have the exact list, you know, things that you need to follow to give run smoothly.

Well, Miller, thank you so much for joining us. We really appreciated having you on today, sharing the systems and processes you have in place and also talking about clipping and how you've been able to implement IT into your reality investing journey. So Miller, people want to learn more about you. Where can they reach out to and find more information?

Yeah i'm actually writing a book about good living right now. So if anyone was interested by this conversation and they want to learn how to out our rooms in a house check or rents IT out when you don't live in them um and you do IT in a way that you can actually scale you know the business and it's not a huge management headache, then I I feel free to looking up on instagram.

Just my name, Millers lane mcs W A N and if you want to show me a dm book, then i'll send you a we have a link for it's coming out here soon, but we have a link for people to resign up for and get discounts on that sort of stuff. Um yeah, they'll be great. I love to chat with anybody who wants to reach out over there.

Well, awesome. You didn't add author to your day today work when you me that what you're doing the congratulations that's really exciting. I'm a and he's tony. Thank you so much for joining us this week's episode of real estate rocky, you'll see yes, next time.