Snowballing to 7 Properties in 6 Years with This Rinse-and-Repeat Formula
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Our guest today started investing in real estates six years ago, and he has already snowballed ed his portfolio to seven properties. What set them apart in a competitive market is a ransom repeat strategy that is perfect for rockies. Listen on to find .

out what IT is.

Welcome back to the real state rooky podcast i'm actually care and i'm joined with my cohoes, tony jay Robinson and this is .

the podcast to help you kick start your real, say, investing journey. And today, we are so excited to welcome to the show jeffson called jeffson walk to the show.

much for welcome.

Why don't you start off with giving us a little snapshot of your life, where you're based and what your career rose when you started investing in real state?

Yes, first. So right now among on the eastern shore, so i've got I work in phildee's a have a homework del in the company there and then live back and forth between new jersey, delaware, some way of on the east coast. And right now, what i'm not doing, the home remodeling thing, we're investing in real estate. I just used one to make money, want to place the money and then um you know just trying to build the portfolio like i'm sure everybody else is now.

And why did you decide on real estate? Well.

I guess that's the interesting part. I really didn't. I was in the army when I first started of how the whole thing I started. I wasn't a home on her, and I was twenty nine at the time, thirty right on the brink there. And I was looking for this was down in alabama station at fort rucker as as a military officer at flight school for helicopters.

And the year before I got out, I was looking for a place to live, didn't want to run anymore, and a body of minds like i'm selling my house. And he turns out he was a real estate investor. I didn't even know what that meant at the time, but he had one of these little town houses in an alabama, the real state, very cheap.

The town house was maybe seventy thousand dollars. I think that's all he wanted for IT now was like, okay, I know anything, but bye houses. But that should be easy enough. So since I was in the army, I just want got my v alone, bought IT, moved in.

And then when I got station back up in marylin and had to leave and get out of the army, he was like, well, I don't want to a believe just yet. So why don't you let me rent the place you just bought? I'll pay you in rent more than what the mortgages is.

And I was like, that sounds like a great deal to me. So same thing. I came here to maryland. Bt, another place kept that rented IT out and that's how it's just the whole thing kick started IT was I was in the army and that that would happened to by accident.

yeah. So that sounds like you kind of stumble into the server. And I guess what was your initial exit plan when you ve got that first tasks? Were you thinking let me put this into a real take porfolio or what what was the initial strategy going into?

Yeah, that's I guess that's the whole thing. There wasn't one. So I was going to step by step and everything he was suggesting, I mean, I really, oh, this was my body, the change.

And he he offered to sell the property to me. He and I, we didn't use any brokers. We just set at his dining room table and just talk IT out, negotiated, agreed about IT.

So then when I moved down, he moved in and I was up in maryland and he was still down there. That is what accidentally got me into remote investing, because when we are right now have to manage this property. But I got a really easy because I already knew him.

He was in a stranger. And so I accidentally got into remote investing. I was managing the property remotely.

I didn't never property manager, so but luckily he was very hands on his attention. He took care of everything himself. We have a bad infestation.

I didn't know that this is about twenty five hundred of box to clear the bats out the attic, and reinsured ate all that. So I learned a lot of good lessons that very first year. And then when he moved out, he first send me the text.

I have to move out. I'm going down south to penny collar, florida. That's when I really the panic started to set and he's like, look, just go get a property management company.

They're all over the place. They only charge eight to ten percent and they'll do everything for you and else like sounds too good to be true. But okay, so I did IT, and that is rude.

One thing started to blow up because on my your right, I could do this anywhere. So that's kind of how I started. IT was by accident in blood, was a very happy accident.

I just want to ask one clarifying question to the the ten that you had was also the person that sold you the .

house that's .

going to be like the world's best like tended to have like i'm going i'm going to sell your house and i'm going to move into IT and pay the rent and then i'm going to show you how to manage IT once I move out of IT, that's got to be like the world's best first tenant.

I'm telling you he was like a mentor, the world's best tenant. I mean, IT was really everything I got very lucky that that's how I got my start.

Is he looking into in any homes and three for the region? Because if he is, I might go back into that market if I can get him as a ten.

He has actually gone on now to invest in big multi family buildings, and we still keep in touch to this day, so don't think he'll ever be running again personally.

So now that you've switch to property management, you realized you can do this again. What was the next deal and how did that come about?

So same thing. I moved up to maryland. And because I I was still very, very new, I don't only done this one time.

So I rented a place when I first got to maryland, but IT was only about a year. So before I started having that same feeling again, I sure the same feeling a lot of people have. Why am I renting? Why am I throwing away the money? And we'll talk about interest and expenses and everything.

But when you went, that's one hundred percent interest, basically. So I sums, I get up there just paid rent for about a year, and then bought the place where I was living there. And that turned into one of my second deal.

And that actually happened to be a duplex. Another happy accident, I just moved into the duplex because he was cheap right now, was coming back to my land for the first time in many, many years. And so now, oh god, right now I know how to buy a single family, multi family, small multi family. But and that same thing turned into a great, what I didn't know at the time, how hack, because I just remain in out the bottom and lived in the top, and then I actually went out of bedroom in the top. So I was really how hack in that thing.

I know IT sounds like you're kind of using your primary residents to fuel your your relate investing, which I love because as you mention is a great way to kind of get in low cost. Just give us a quick snapshot. What does the portfolio look like today in total?

So I have I very recently got a seventh, so I personally would have had six no seven um and that's properties and they are a very a collective max. Its single family, multi family, all small multi family. I have one six plex and hagars town that actually I bought as a small multi family or residential multifamily four unit or less.

But they didn't know I had two units attached at a small commercial unit that you could barely even count. And then a nice garage conversion unit, so accidently got into six. Four units are above.

Five units are above. And then now it's five or six different states. Now, because IT was alabama was the start and i've got a couple more there since then.

Then maryland and then now I made my move up to this new company that I brought up in philadephia, one there and then jersey because it's right next to philadephia all the house action. Obviously, you're living in IT. They're all in close proxim ity.

But since then, like last year, there was won in ohio that we just actually sorry to in ohio that we did because now i'm like that's one of the best part about parts about remote investing is that you can go anywhere if you've always got a whole sale or sending your stuff. I'm not relegated to my local area, and I think that scares a lot of people. But once you do a few times, you realize it's not scary. It's very lucrative.

Yeah, jefferson, we're duffing going to have to get into building teams and all these markets. But I have another question for you as to how are you able to grow capital? Where did the funding the money come from to continuously keep buying these properties?

I mean, in the army, even even as an officer and a pilot, you know you're still not at the sixth figure, mark. That's not why we're in at most of us in the serve our country. But once I got out, I became an x ray engineer for a few years, and that was a good living.

So I was able to generate a lot of cap. I live very frugally. IT was I have been a very, very less than a thousand square foot too, Better than that first duplex else tell you about.

I've never had the livings s trafficking tly. And so if know the extra company, he was not a killing, but I was making six figures there. So if I just save, save, save and live very, very frugally, you're able to save up enough to buy one or two things a year.

And the other thing is, as you're aware, if you live in the property, you are offered such incredible terms, lower interest, lower dow payments, and you can just get such incredible leverage. I always just wonder, why is everybody not doing this? You cannot lose if you even and I am not a smart guy, i'm not anybody can do that. So it's a very proud, I guess why have awesome into IT because IT was such an easy strategy and made was a no brainer once I started doing IT.

Stay tuned after a break for more from jeffson. If you're hoping to invest out of state, you will need a team to help manage your properties, go to bigger markets, I com slash property.

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very not available in all state of situations. Part welcome back to the show were joined by jeffson at callaway. I was actually going to say like I I I love what you said, jeff son, because I think it's so unsexy and and it's funny like as as you are saying that our producers like this is going to be a great social clip.

But I was thinking the opposite. I was like, this is not going to work on social because what you said is so unsexy, yet so simple, that people were just going to class over like a minute. It's got to be some overnight get rich quick type thing that jefferson's been doing.

You're just, I do. I made some decent money. I kept my living expenses low and I just saved money and put that in the real state when you break IT down that way. That sounds so simple, right.

right? And I couldn't agree more. And that's kind of, I guess, the animal of the whole thing. So what I come from body building, power lifting, strong and the strength sports, and it's the same thing there. The stuff that works the best or the fundamentals know they are not sexy.

Nobody when they say, hey, was IT come up all the time, was to seek out what you do for this, what you do for that. My guys eat a lot of food, train really hard and heavy. It's gna happen. So the simple stuff is not sexy, but i'm here to tell you IT works even for not smart people.

So jerez, then as you're looking in these different markets, how are you staying competitive with your offers and where most of your deals coming from? Are they even on market?

Well, there's a couple different strategies if its own market, like I do a lot of male stuff, but that's because I was but only buying in markets where the which is Price to rent ratio make sense, alabama, delaware, parts of maria and ohio. And that's exactly why I choose us markets because I can work with a local realtors and I hack that. I found if you work with the local real ter, then that's that's one of the biggest concerns.

Well, I don't know that market. I don't know that market. Okay, you don't have to partner with a real ter.

They do all the work for you. They know the Marks. They'll be able to tell you yes to do this. No don't do that.

They're not allow to tell you you know if neighbor od good or bad, but they can give you all kinds of little hints. And so you just rely on their expertise. They're part of the team.

Same thing with local contractors. There are all types of google reviews and recommendations in referrals. So I buy a lot of I bought a lot of these own market because the you get all this expertise, it's easy to do.

You work with the real time they take care of all the papers. You don't have to know contracts, they have a tittle company. And then if you go off market, that's pretty easy too, because it's almost all whole sailors.

For me, i'd love working with whole sailors. They're good at talking to sellers. I'm not so I just let them do that and pay them their fee.

So it's been a mix of both by to stay competitive. And I bought a lot of on market when interest rates were low. And then as soon as they got up to where they are, I immediately was like, this isn't going to work now.

So I started looking into creative finance and the pull pays more be movement. So now we've bought subject to and cell er finance accommodations of both. And now I can still seek competitive. And though i've got the one I just bought, ohio is two and a quarter percent interest cash for is beautifully.

So let me let me ask because these are two different strategies. That percent, you have the on market, you have the off market. And I think similar fundamentals, exactly different skill sets in the way that you execute on those different channels. So when you're going on market, what I guess, what resource if you found to really find those good agents in those markets, how are you find in those folks and connecting with them?

I mean, I wish the answer were again, sexy, but it's really about google. So I mean, I just love that I can go on and find an agent in that market and then see what other people have said about him. And they don't even necessarily have to be investor friendly. They really don't um they're just good. They just know the market.

All I need to know is how affluent is the area? Is the population growing over their starbuck around like all the same stuff we all investors are looking for? And then what will the units rent for? That's the most important thing for, I guess, in my opinion, for a long term, a real portfolio and will IT cash low and how much will look cash?

Alo, so I rely heavily on the on the agents for that. And the best part of that IT is I have no apprehension about doing that because the sellers paying their commission, you get IT all this for free. So another no brainer in my opinion.

our plug, shameless plug here. Um the bigger pockets agent finders. So if you guys get a bigger pox on flash asian finder, there are tons of qualified realised agents and cities all across the country who specialized in working with real city investors like all of us here in this podcast, if you're looking for someone to go there.

Um but I I want to ask a person about the the off markets. I because I think for most people, the idea of going on market make sense. Open up, jill, open up red fin.

You reach out sets and folk there. There's like A A building process for that. But off market there is no there's no equivalent for the off market.

So what have you found as a way tracks ally finding deals off market? Are you door knocking or you cold calling or you like? What are you doing to find good .

deals off market with the new home modeling company in philology? I have almost no time. It's a very, very busy, eight hundred thousand homes in there, all one hundred years old.

So I stay very busy with that. I don't have time to do that. So whole sailors, whole sailors, all sailors, there are another member of the team, as I say.

So you've got a real turn, and the whole sailors, they are just happy as a claim to send you deal after deal after deal. My email, my facebook messenger, just fall every day. What about this deals in this market, this Price in this house? And they'll ask your yearly box, I tell them I only want creative.

Don't send me anything that's over four hundred thousand or it's in to the ohio, you know, you tell them whatever you want and they just fled your inbox, which is a good thing most we going to want to a bunch of sales solution, whatever I do, because I used to buy animal less like you said, but now they are mostly off market. They do all the hard work, everything you said at dore, knocking mailer's fires, talking to sellers. They do all of IT.

I pay on their, whatever, five ten thousand note phy, and I get a beautiful property that already has all the heavy lifting done. So I always just try to find a whole sailor and then get on their buyers list and then just gets constantly pitched. And I take my pic about with one hundred.

One hundred is good. Okay, that's fine. I get about a hundred week. So easy to find deals that way, in my opinion.

And jeff son, how are you finding whole sellers in these markets?

A lot of facebook groups. So there are so many, as IT turns out, every single market, a lot of nationwide facebook groups, and they're spamming constantly. And what I actually like about the facebook algorithms, as you has already know, whatever you click on, whatever you pay attention to, they give you more of that.

So now every morning when I wake up inadvertently, i'm just getting spend with deal after deal after deal after deal. And once you get your head, what's your criteria is like I always just take growth monthly rent in total minus thirty percent for expenses and then subtract your projected pi if you're going to leverage IT and then just go that around. So facebook groups are in happen in the best tool for having whole sailors send you stuff, meet meet more whole sailors the whole night. They're really, really great.

You mentioned to having a byo x that you're giving out to this whole sellers. Can you give us an idea of what type of properties that you're buying?

Yeah yeah. So I started a lot in single family and that was also IT served its purpose, especially with low interest rates. But i've just know that they're a lot harder to make cash flow.

And even though the appreciation, you can make the argument that it's Better. The problem is I have found the security has lot Better with multi family. If I have licious keep a conservative four units, if one or even two tenants are gone, okay, i've still got half the rent right there.

So i'm not totally out where, as you know, single families, binder or you to have that you don't you're out of no rent for six months. And then per door least, you get four or six doors in one building. That's one roof, a lot less hvac, a lot of less, a lot less capital expenses and maintenance per door.

So I have just started really moving more into the multifamily space, especially with interest rates where they are. And whole sailors will now only pitch me that. So I only even, even waste a time. Jeff son.

you heard on something that was, I think, a big decision point in in my real, say, portfolio o this year was. As we look to scale up what actually makes some sense for us, our dinner tious single family short term rentals and most of the properties we have purchase like the most expensive was probably like six hundred came.

And when we thought about scaling this business up like a kid, do we continue to buy more of these know half million in eight hundred, two thousand another single family homes, or do we maybe go bigger than we buy like A A two million dollar mancha and sedona or something? right? And the question that I asked myself was very similar to what you say, but it's how do I really mitigate and reduce the risk? And I could buy one eight thousand square for shorter mental mansion for two million books, or we could gotten by maybe a small blue e hotel with thirteen rooms for two million books.

And now even if one of those room system D I so have twelve others that are getting filled. And for me, there was there was less risk associated with spreading that big mortgage out across thirteen rooms under one roof, as supposed to, if I have one vacancy, i'm getting zero cash ler, right? And that may be nervous on such a big mortgage.

Absolutely, completely understand yet it's that's exactly what that is. And not only that, I mean, short term versus long term. I have heard a rule a long time ago at one of the bp ons that it's not necessarily a good idea to buy short terminals that would not also work as long terminals because municipalities are changing so often i've seen that happened twice.

Now somebody tells me with the bigger rush of airbnb. Es, hey, I went to go buy one. Munster, pali changes rules now they don't allow anymore.

I just went through IT. I have one in mile in that do place the first one I want. I made the bottom unit just to try IT an airbnb. Sure as heck.

I get a letter from the local town saying, no, airbnb s IT was the first one in the town, so they didn't know how to handle IT basically, so they just plan. No, I guess I had to go before the town council literally showed drove down from philadephia came in one night to one of the meetings. And before the board was like, guys, my guidebook has all the local businesses in IT.

This is a business I have had artists, people from other countries come and spread their culture to this area, like I really just pitched IT. And now they allow they made in the exception for mine and it's still the only one. But I bet you moral, come now. So the municipality changing, even though worked out well in that situation, that's another big risk. So yeah, I completely agree with is a beautiful thing and it's easy handle.

We had a every carleon before who said that when she's looking at search of rental, she's looking at ones that already have strict laws in place so that you don't have that risk of them being changed. But you're pretty much setting the president of those laws in your mark up being the very first one.

I think you might be the first first. And i've met who like launched the first short term tal in the city like that that kind of crazy.

yeah. Well, that was what I learned. I learned a lot of viable lessons.

In addition of that, this is an a little town called trap, which is not a big town. There's farmland. And around this in the million, nowhere.

And I was just like one just going to try, if IT doesn't work, IT works as a long term rental. Well, sure as heck, if we had worked beautiful IT might be, might be because it's directly on the way to ocean city. So you have to go right by IT off for fifty.

But in general, you can make an airbnb work if you make IT unique enough anywhere. And yeah, you're exactly right. I think as of now, there has been I thought I thought one.

two more pop up. Well, are there any other places to stay? Because I have two very small, very small tone. But IT works because there's only one hotel that's discussing and everybody hates there is nowhere else to save. You are coming the visit family.

If you're going to a wedding, you know you are visiting people that are in the nursing home or the hospital that's there. So is that town kind of anything like that where there's not other options? Yeah.

a little bit. But on either side of IT or cambridge sales, berry and eastern and those two areas are very affluent. So I think probably more often what i'm getting is people that don't want the hotels because there are a lot of them, but it's highly populated, is a very affluent area.

They have a lot of events like when iron man, the big bike race comes through and there's lot of other stuff like that. I'm sure all those hotels are completely booked up, plus we all know, myself included, i'll always go to an a bnb before a hotel. I get to see a new place, get to see how somebody else runs their bnb.

They're so unique. It's also I don't know why anybody would choose a hotel so that could be part of IT yeah room service that's true. Good boy.

Good for I mean, I can see a door dish now.

So it's true.

very true. Yeah.

guys, we have to jump for the final outbreak, but will be back with more from jeffson in just a moment. Ricky, i'm telling you right now, it's not everyday you find a game changer like rent ready. They're not stopping with just tiny screening.

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Okay, let's jump back in. Well.

jeff son, one of things you mentioned was that know you started focusing on the small multifunction because the cash low on the single families became a little bit more chAllenging as interest rates elevated things of that nature. And I think that is a kind of ongoing debate in the real state investin community is what's more important is a cash flow today or is IT equity growth and appreciation for tomorrow. So as you've kind of built your portfolio out, how have you approached to that decision of casual verses appreciation?

That is that is the e question. Every I go to be peak on every year. It's my favorite place in whole world world. And every time they have a workshop about the people are talking about IT and I have seen investors try both things.

I like listen David Green all the time and he's got all these high and properties he makes maybe and bees, i'm sure you guys do that too and that's such a great you're guaranteed wealth in that case. The only chAllenge, I guess, is how to make IT cash yet to either do something creative if the'd get a really great deal. But I have noticed that all of the guys that do um a lot of cash flow only plays low purchase Price properties, low purchase Price areas.

That cash though really well, but i've low appreciation. The only way to make that really work long term is to just buy a whole slum like I don't I see tom cruise, not the actor. There's A A section at for all the time, for years time.

Cruise does pitches section at all the time and IT works for him with catches because you ve got five hundred of them. But I IT is my opinion that balancing the two, and I can always speak for working investors, but balancing the two is really the way to go. You can find areas very easily, in my opinion, like maryland, del, where obama have lots of markets that are one to three hundred thousand and the rents or still know fifteen hundred to two thousand per unit.

So I think it's easy to find both. And I think that's absolutely the play like my portfolio as of this year across the big miles and equity. And that's because I didn't choose the lower income areas, but um it's still cash lose relatively well. And I think that's the perfect baLance. I myself would never go for anything other than that because it's you want to build wealth, but you will also want to eventually one day quit your job and retire on the cash flow.

So yeah, I agree with you. And at six male long time to make that realization so good to steer no singer than I did. But at first I was all about cash flow because I just wanted to reach that monthly goal that I was driving for of cash law. But then, you know, I realized that way I could sell one of my properties and I could make based off of the appreciation and the equity paid down more.

It's just like that delayed gratification of like, okay, hold on to our property, hold IT for three to five years and then go ahead and you can do at ten thirty one exchange and do the same method or you can just pull that capital right out and you know there's your cash low that you could have gotten on another property. Over time, just one chunk of change. So and I think it's a lot easier to invest right now in today's market if your looking for a mix of both instead of just really striving for an extremely high cash flow, which is getting harder and harder to get. Um but as far as your equity milestone as how much equity do you want to have that you're gonna kind of reach and then maybe sell IT all social?

Yeah, I couldn't agree more. I think it's and I heard a lot of other higher level investors that myself talk about IT, the whole like cash low. Within the first five to ten years, I have found most degree quitting your job and living off the cash low.

It's just not it's not realistic. I think you have to really build a certain amount of a certain size portfolio. You realize that's not a thing. It's just not you can invest in something really creative, large and expensive maybe, but building the portfolio the way most people do equity is the play wealth, the long term wealth appreciation is the play. The cash flow may be in a decade or three, but that's not really what it's for.

I have always said in last couple years now make your money, find a way to make active income, your job on a company business, real states where you put the money to let IT grow like a stock market or something. It's not meant to make you money. It's meant to be a store of value in a growth of value.

The money here put the money there. And that's just my opinion. But I I feel like a lot of the higher level guys, that's what i'm hearing from them.

So think well, I think you and you look at a lot of people who are pitching that they you know I just have renters and they're just a really set investments. Well, if they did that, I can do IT, but also a lot of them have, you know coaching programs. They have different income streams like tony managers has a management company for all the short term rentals.

I have a property management company where i'm getting income off of that. So like there are other ways to stay kind of in the realm of real estate to be a full time and faster, but then have these little kind of you know not side hom, but these comparable businesses that work along with being a reality investor and jeffson. You mentioned in the beginning that you have a home remodelling business, and i'm sure that has come in handy in here investing. Yeah IT IT actually did.

And and that I actually didn't think that is a good point just made because even if you can just do real estate, is that really the best thing? Is that really the fastest way to grow? Because if you can make a lot more with our business and an active income stream versus just living in reinvesting, you know, dividends and rent, I probably shouldn't do that.

But so that's a good point. But yeah, it's the cynical gy is crazy. I can walk into a home now being a general contractor in general, it's more of a marketing agency because we set up a lot of hv c and stuff that we can do.

But the point is yeah walking through a home and not having to rely on somebody else's expertise and opinion for what needs to be done for about you had type stuff. What problems are you going to run to? What mean in some capex are you most likely to run to in the few years? Hugely viable plus it's lucrative.

So it's such a great business to be. And I ish I discovered a years ago because I could have been a lot faster in the investing side if I had known know how much these contractors are making that here. So it's it's really been an awesome syndication to the real estate.

Yeah, I think finding that baLances is important. Like we interviewed Olivia ati on the podcast a couple years ago now, but SHE house hacked just like you did jeffson, and he was able to keep her living expensive super law.

SHE was an engineer working at chevron with six figure salary and with the money he was saving on the house sag, I think he had like one or two other rentals that you kind of like you moved around and turn all primary residents into into lt. r. But SHE then launched a design business where he was consulting on design for real city investors.

So SHE had the pass of income from her portfolio, plus the money SHE was saving from the house sac, plus the active income from the design business when he added all of those things up. So here, this is actually enough for me to sustain the lifestyle that I went to live in that you made that leave. So I couldn't agree more. I think sometimes people put too much pressure on just the cash low and really as okay, can we add some additional streams to make that leap .

a little bit easier for us. So I think if you have a portfolio that's any significant counter cities and you just never have to come out of pocket for big expenses, unexpected stuff, roof h VC systems, your casual covers all of IT, then you you're doing pretty you're doing final cash. Low IT does not need to just be a whole other separate large income stream .

IT doesn't have to jeffson. What are some tips that you have for somebody to manage actually having another job or another business that is really active and then taking on really seat and posting here?

So I mean, i'm nobody, but just what I have found works for me is to just delegate as much as humanly possible. I mean, if you're really running a business and it's doing well and you're really, really busy, you do not have the time and shouldn't and don't have to manage very actively your real state portfolio.

I know they say there's no such thing passive and they're right, but you can get pretty turned close like my maybe maybe over six or seven different states. Now get email a week from my property managers like he this ice maker went to pay this range went out and i'm just don't I don't didn't even require response for me most of the time. I'm just like sounds good to IT.

So it's super duty per easy and that's the way of I have to set up. And I would encourage everybody to do that because if you're serious about scaling, you really, if you think about IT, don't have a choice. If you're doing any more than a certain amount of management with each property as you go, that's more and more time.

So just delegate everything you can trust these companies if you've picked the right one, which google reviews and a lot of online told, help you do that. Just see what everybody else is saying about IT. Pick of trustworthy one in a professional and then you shouldn't have to do really much of anything.

I mean, they'll take care of i've had them take care of evictions and um getting new tenants in. They do everything and it's for eight percent IT almost seems like a steal most of the time. We sometimes have negotiated down to that. But once you get IT and they almost all will, you're getting a huge, huge value. So just always factor in eight percent is what I do and then just assume you're going to property manage and then pick a good one and you'll you'll be able to focus all your energy on making the money that we can go by reality faster.

So jeffson, how do you find a good property manager? How would do you find these boots on the ground? People to make a less scary, especially as a rocky investor, maybe they're never even purchase a property and learn about to buy out of state. What are some of the tips that you have to tell them as to this will make things easier for you? These are the things you need to do to feel more secure about making your purchase sure.

yeah. And I mean, there's no way you can ever one hundred percent be risk for is just not going to have and but just to mitigate, I have found between google referrals and the size of the company so that you have recourse. Those are three things you can do, right there are to mitigate a ton of risk.

So for example, google are a great thing. I mean, if if you have a property measured company that's been around a long time, you can find that on google and you um and i'm pressure even your pocket fit has a tall for this by now, I would assume. And if you're looking at how what other landlords have said about them and you find a good one that's in there a long time, great.

That's a great place to start. Then referrals most of time, like I said, if you're working with an agent or another landlord, you know somebody else in the area or a contract or and they can recommend one, that's a great way to. The third thing is the size I have only done at one other time.

And I heard a lot of horr stories about IT is getting just a property manager that's like just a guy or two. And that's where i've seen a lot of IT go wrong because there's not a lot of recourse with that. If they go take your rent money or whatever what he supposed to do about that, you can only sue somebody so long, but especially they don't have anything to get.

So if you do a company that you can go forget I hat v use the word, but if you have to sue, i've never had to do that or if you have to write them a bad review or they're held to a standard, they have a reputation. So a big company, or at least just a property management company that has a team, I haven't going wrong yet. Just doing those three things, this works really well.

I throw in one red flag. There is far as vetting the property, mention company. I didn't realize us in the beginning, but when I had outside of property management, they actually had in their contract that you could not talk about about them, that you couldn't you know say anything that about them. And you know when things started to fall apart like that, they like highlighted that clause and send IT back to me. Like just know like this is in our contract and like that should have an a big rud flag.

So like even if you wanted to write a bad review on google, but um yeah, so I think when you're managing at the state, whatever, could you just give us a little maybe by the month of what you're actually doing, maybe as the asset manager? Or you know what are some the test that you are still taking on? And maybe how many hours a week, he said, actually taking you with having these property managers in place?

Very, very little. I mean, literally an hour or less per week. But I think that IT is a personal preference thing. Like I said, if your business is doing well and you're very busy with IT. There's almost nothing I can think of that would happen from mine neglect that would cause a big issue.

You know, I purposefully just delegate every single thing, like if I have a tenant or there were the local township, reach out to me because on the owner of the property, I immediately afford IT directly to the property management property manager. Can you take care of this? Or the upstairs unit at the trap property in maryland, I had attendant reach out to me.

They ve got my number of somehow. And like, hey, there's a couple things we need fixed and like no problem, i'm on IT took on a list center right to the prime measures. So I just literally on purpose, don't do anything.

And that's just because I foresee if you are keep growing this way, it's not going to be possible to dedicate a lot of time for property. But I know a lot of people are not like that and maybe not comfortable with that. And that's fine, you know, to reach their own if somebody wants to be more hand on, hands on IT doesn't make sense to me, but IT doesn't have to hear my so just my two cent.

I love the the strategy, jeff son, that you taken to automate, I guess, the majority of your long term tal management and and we talk early about the the whole debate of cashle versus equity. So if you look at your portfolio, what how much equity do you have currently, you just ballpark and how much casual do you think you're producing on an annual basis a month?

What I was easy for to calculate was the big I was talking earlier, and I probably put down an average of like, I don't know, I guess, between some of the ones I have bought straight up from whole sellers in the ones that I used unrecovered loans for, like fifteen percent, twenty percent, maybe on average. But that back in march was when we cross the million dollar mark for the total value of the portfolio and equity. And thank you very much.

appreciate. But that's the whole thing. A cash flow wise, I would say just as a ballpark. I've haven't looked at the account a while, but IT seems to be in mortgages and expenses, some of the vicinity of twelve to fourteen thousand a month, and then the actual income is like eighteen and one thousand eight thousand a months. So I usually amended up netty four to five thousand dollars a month from the portfolio.

And like I said, that's not really anywhere near what the what the business side will do and why I don't rely on that active income. It's always stays case. I've got to replace the roof and all the other stuff which have to do all the time, so don't allow on the income or the casual. I mean, and you should be encouraged.

but we're still talking about you almost fifty grand a year and cash low from an hour or two a week of your time, which is a pretty incredible return for the amount of energy that you're putting into IT, not to mention the fact that you've got seven figures worth of equity, which you can now potentially tap into to help you buy your next deal and your next deal and your next deal. And then this compound starts to happen where each subsequent deal becomes easier because you've got the capital right, you've got more a access to to to det, help you purchase these properties and and all starts to stack from there. So you say with the common called deer jeff son, but it's it's an amazing .

accomplishment. And then you will have to quit your job because you're gonna have to spend all your time turning, figure out how to saving text.

Yeah no. How is a great point? Luckily, in my Normal style, i've delegated that to the cpa, and he did a great job with the last year. So even that gets test out well .

jeffson the kind of rap us up here. Tell us a rocke about your latest deal and then what's next for you?

Yeah for sure. And I this is a really great one because I learned some very difficult lessons on IT. I mean, that's why me i'm still a rocky E.

I still learn all the time. That's part of IT. So this most recent deal, when I ran the numbers on IT, I always check what HUD the local housing authority considers to be fair market rent. I just HUD user that come and you will show you with all their data that they researched that they do what fair market rent is. And I know that the housing authority for section eight usually uses that.

And so I don't really ever go a section and i've done a few times, but I always say, okay, if I can't get this in rent from the general market, I always know I can call the local housing authority has the enormous waiting less subsection sion tenants. I can always just feel in one of those and get exactly what that market rents says. Well, I bought IT fully occupied except for the unit that I was living in, and I was a triplex in jersey.

And because jersey is so tax heavy and you know expensive in general for a lot of reasons, the closing costs almost double what I thought they were going to be. I thought i'd be twenty grand into this thing and that would be the end of IT because it's donor occupied while I ended up being more like forty and some change. So that was a lot of liquidity at one time that I really wasn't ready for, wasn't happy about.

And then as IT turns out, the property was very low rank in there was market rent of the areas about sixteen and fifty per unit. And I know my Morgans would have bit about twenty nine hundred or so, and I think I would have cash low or sorry, the total rest would have been forty six hundred. So IT wouldn't been a home run in cash low.

But I know jersey appreciates very well the first dupes S S. I ever bought there in twenty one, bought IT for two twenty and is now worth like three sixty and those two years ago. So I know jersey appreciates I was like, fine, this will be an appreciation play.

So I did IT and the rents are very low. You can't increase some very much at a time. Not that i'd want to, you know, always trying to be fair and and I look out for people.

And as of now, i've gotten rents to where I think it's a thousand, a thousand and then twelve fifty. So I think IT brings in thirty two, fifty one, two thousand, nine hundred. And if you know anything about maintenance cap, bex expenses, stuff like that, that's not cash flowing.

I'm actually coming out of poking a little bit. And so I just am over time, going to bring them up to market rents and IT will eventually be a good deal. But I like IT because I think this is a great testament to other people that are maybe considering IT or you know getting into real estate but are seeing on the sidelines that to me is a big mistake, that a wrong move.

I probably shouldn't done that. All this liquidity blown just to be still coming out of pocket every month. But i'm making IT work.

And in a couple of years, they would probably be my next year. Um it'll be cash following. It'll be a great appreciation play.

IT will turn out to be a great deal. And I think that's the case with a lot of real state each time can turn any deal into a good deal. And it's very forgiving this industry. So you shouldn't afraid to get in because even if you make a mistake, just whether the store, you will be fine in the end. So that's the just on that when I think it's a good message.

Well, jeffson, thank you so much for sharing your journey with us. Uh, we've really appreciated having you on and taking the time to share your story and also to give some great advice for others who are starting the Ricky journey into really state. So we're going to link a jeffersons information into our shown notes.

If you're watching on youtube or description you haven't already make sure you are subscribed to our youtube channel because we are almost two one hundred thousand subscribers. Or is my seven year old would tell me their subs to give them that the correct think of but um we've really appreciated the rookie community and how you guys comes together and connect in the real set rook kie facebook group and on youtube. Hopefully we'll have some more exciting community ways that you guys can reach each other. I'm actually in his tony, and we will see you guys next time. And bill estate brooky.