The Good Stewards Real Estate Podcast

Are Airbnb's A Good Opportunity Now?

Episode Summary

We’re starting to hear a bit more talk about our cities reopening. But we’ve still got a ways to go and some investors may still be in a tight spot, specifically Airbnb investors. This is a great time to check to see how your business functions and in the case of Airbnb, can you still cash flow independent of their business?

Episode Notes

State of Business Discussion:

1:45: we got a deal under contract on Monday, had it assigned by Tuesday. Um. Wholesale deals are still closing.

3:24: I think we've closed since COVID three properties. We've closed a couple of refinances that were in process. We've started refinances, um, during this process.

4:55: I have heard from various investors that, uh, banks are getting tight with LTVs and lines of credit.

8:10: I read an article on a study of rent paid in April saying that 35% of people didn't pay their rent. And then if you read in their article. When they did the study the previous year, it was like 25% of people were late, so really there was a 10% dip based on their data.

11:00: Ryan’s team has 17,000 pieces of mail going out in May, while many investors are holding back and expects that to translate into eight or nine deals. With values, our team dropped down to 70% of ARV initially, but first-time home buyer inventory hasn't changed, so we're back at 75%.

15:45: Of the people that couldn't pay, our group has had communication with about 80 to 90% of them. They've been really proactive about communicating their circumstances

Is Airbnb an Opportunity?:

20:20: Most people who bought Airbnb properties overpaid, over remodeled and over furnished. That's why those investors are in so much trouble as the only way they were cash flowing or breaking even was off of that premium.

23:05: really good thing to just keep in mind of building your business on the back of an industry that you don't control or on the back of another company that's susceptible to issues or changes.

24:45: I would say if you're going to get into Airbnb. Maybe you have properties that you can rent out conventionally and maybe you choose to Airbnb them, but you know, you can drop back to that.

What We’re Doing Now:

27:00: The best time to start buying is right before you hit the trough. That way you've got a little bit of lead up, but you don't want to buy right at the beginning of the down point, so Kansas City isn’t buying too much just yet.

28:20: every legit buy and hold investor I know has overextended themselves then started to struggle with property management or construction

29:30: It took 10 to 15 years to get property management like into a well oiled machine in Oregon.

33:00: You as a business owner have to always kind of be in the driver's seat of your feelings and your emotions, especially kind of on the logical side.

Connect with the Good Stewards:

Episode Transcription

Ryan: The problem with like, Oh, I'm going to scoop in and buy Airbnb properties. Most people who bought Airbnb properties overpaid over, remodeled and overfurnished where it's like, that's why they were in so much trouble as the only way they were cash flowing or breaking even was off of that premium.

[00:00:21] Intro: Welcome to the good steward podcast, the only podcast dedicated to seasoned real estate investors who want to maximize the cashflow potential in their business. We are buy and hold investors with a thousand plus properties and markets across the U S who bring an insider's view into the nitty gritty details of real estate investing. If you're looking to develop the mindset teams and systems that can dramatically build your real estate business and network, you're in the right place.

[00:00:53] Ryan: Welcome to this episode of the good stewards podcast. I'm Ryan Dossey.

[00:00:57] Amanda: I'm Amanda Perkins.

[00:00:58] Bill: I'm Bill Syrios

[00:00:59] Andrew: and I'm Andrew Syrios.

[00:01:01] Ryan: Good morning. Good stewards. May is well on its way, and we've definitely been as proactive as possible in our businesses to be prepared for who knows what's coming. Um, kind of feels like the opening scene of independence day around here lately, but before we dive in, we do want to connect with you and make sure you check us out .at thegoodstewards.com obviously, subscribe to the podcast. Tell your friends because, well, we're awesome and make sure you snag your free copy of our ebook.

[00:01:33] Now. I kind of want to just dive right in here to kind of what I've seen in my local market, what I've seen from the investors that are inside my mastermind. And then I'll, uh, I'll let Andrew and Amanda talk about things like economics cause I'm not that well-versed. So what we've really seen, um, wholesale deals are still selling. Uh, we got a deal under contract on Monday, had it assigned by Tuesday. Um. Wholesale deals are still closing. We had a deal that was a couple of weeks old that closed a couple of days ago for a $20,000 net to us profit. And on top of that, uh, we had two kind of wholetail properties. We listed on the MLS that both flew off the shelf, uh, one sold and I think 12 hours, the other went and under 72.

[00:02:18] And if I'm being blunt, um, these were like your. Two-tone ugly rentals that we listed for 100% of ARV. One of them sold for over our asking price. Didn't appraise, wasn't shocked, but the, uh, the other one, we took a 1031 cash offer for 5,000 below our list. So. One thing that I do think is kind of important to point out with what I'm seeing in my market is these are primarily nicer properties. Um, you know, I would say A- to B class, you're kind of first time home buyer, vinyl-villagey , um, you know, nicer assets, you know, think like attached two-car garage. We haven't done a whole bunch of deals lately that have been in the lower end or kind of like the higher and, you know, fix and flip. So I think that that's part of it is just kind of desirable inventory. But I mean that's really what we're seeing. Stuff is still selling stuff is still moving. And we've actually seen an uptick in leads from February and March into March and April. I don't know what are, what are you guys, what are you guys seeing.

[00:03:24] Amanda: Kind of the same. So we've, um, in various different locations, we've continued to close. I think we've closed since COVID three properties. We've closed a couple of refinances that were in process. We've started refinances, um, during this process. And I mean, not related to this. My, um, my sister who lives in Oregon, she listed her house on Sunday this week. And. It'll probably, I mean, they're expecting an offer today. They've had tons of showings in the house, and again, it goes back to, it is kind of a first time home buyer product, and I think that's a really strong place to be. So that's not to say, you know, we do have a development here that is . Higher end, really nice houses on small lots. They have been flying off the shelves. My attribute that to a mortgage rates, which are still low, although it's taking longer to close, but they're still closing. We've continued to close houses in our new development in Oregon. So, and those are, um. You know, there's just like higher end, like 1700 to 2200 square feet on very tiny lots. And the price point is around $500,000 and those are closing.

[00:04:41] Ryan: What did you, uh, you refi'd Amanda, what was your rate at and what did you get

[00:04:44] Amanda: 3.125%? Uh, pretty excited about that.

[00:04:48] Ryan: Noah did the same and I think his payment on his house went from like $1,200 or $1,300 down to like $890. So.

[00:04:55] Andrew: Rates are good. I have heard from various investors that, uh, banks are getting tight with LTVs. They're getting, they're pushing those down. Uh, but rates....

[00:05:04]Ryan: Lines of credit pulled back as well.

[00:05:07] Andrew: Yeah. There's an uptick in forbearance agreements. Um, so the mortgage industry is teetering a bit and we're not sure which direction is going to break. Uh, the rates are so low cause the fed keeps basically printing money and pushing them down, but at the same time, they have a lot increased forbearance, risk of defaults, uh, all sorts of issues like that. So, and then what, and no one really knows what the government's going to do. So there is a lot of uncertainty there, but if you can get a loan. It, you know, I mean, they, uh, if you need one and you can get one, uh, you can't beat the rates. Right now

[00:05:40] Amanda: I have banks, um, two of our regional banks that we have loans with in Oregon. They have asked me for our rent collection numbers for April. That's nothing that they would ever be checking on. But I think firstly, you know, basically they wanted kind of take our temperature of how we were doing. And, you know, luckily we're in pretty good shape, but, um, you know, I gave them the information they wanted and I think a lot of them, you know, um, I think they're probably just testing, like, are we going to keep our line of credit extended with them? That sort of thing. And, um, you know, I've never had a mask for that kind of information, but I think they're just trying to be proactive because...

[00:06:16] Andrew: I mean, there's other issues that we've, our leasing has gone actually accelerated, which is interesting. We've had no break and all, and actually an increase in uptake and leasing activity. We've had a few issues with sales, mostly not with activity. We've been getting plenty of interest. We haven't been selling much, but we're one house. We had one person back out right when the crisis broke, they got scared. And then another person backed out on a house because they lost their job right after they got it under contract because of coronavirus. And so we finally got it again under contract, it's gonna, sell now. So we've had some issues like that, but for the most part it seems like activity is still pretty strong. It's definitely strong in the leasing market and sounds like a the only major change that I've seen thus far, although I've seen plenty of things about, like there's a CNBC report about.

[00:07:03] The expected, uh, volume of housing sales to go down 35% doesn't appear that that's happened yet. But if this continues for the longterm, I expect those trends to accelerate, right. First, if it's a short term blip, probably won't be a big thing. But I mean, that's one of the things with regards to just even taking advantage of the situation is trying to get an eye, of of how long and how deep this is going to be before really. Going all in and making a big play, as is, would be my recommendation to be sure. Don't stop buying if you're buying, but, uh, try, it's, while there's still uncertainty about how long and how deep this is going to be, I be careful about making big decisions.

[00:07:45] Ryan: We, I know in Indy, I mean, we've had, we had a couple of properties actually that were sitting that we were having a hard time filling that we've, we've now filled, um. To some people in the medical field, it's like, Woo HooWhoa, they're going to be there for a minute. Um, I, I do think, you know, you've got to just be careful with any of the stats or articles you're, you're getting or reading, cause they'll, I saw one that was talking about rent collection in April that was like, you know, 35% of people didn't pay their rent. And then if you read in their article. When they did the study the previous year, it was like 25% of people were late, so really there was a 10% dip based off their data. But I've even had a couple of buddies be like, you know, I don't know where they're getting their stats. It's not for me.

[00:08:28] Andrew: Yeah. I that was posted around a variety of real estate investment forums and people are like, ah, this is. That has nothing to do with my experience.

[00:08:34] Ryan: It's just trash.

[00:08:36]Andrew: It sounded actually like maybe it was more of a New York thing. I could see it being more concentrated in the higher end cities

[00:08:41] Amanda: like New York, San Francisco

[00:08:43] Andrew: $1200 will get you by in Kansas city and Indianapolis for the most part in Eugene. Uh, where we're located here, it will not get you by in New York or San Francisco.

[00:08:54] Amanda: Weird side note about the stimulus. I had to go to the spa place to pick up like a vacuum cleaner for our hot tub yesterday. And I kinda just asked, you know, the girl working, I said, so, I mean, I'm surprised you guys are open, are you staying busy? And she goes, Oh, we've sold 30 hot tubs in the last three days. I was shocked to hear that because basically she goes, I guess people are using their stimulus money to buy a hot tub, and you know, they're home a lot. And I was like, Oh, well, I mean, good. I was like, I'm glad you guys are thriving, but I am shocked to hear a year business is thriving. Because

[00:09:35] Ryan: of all the, of all the niches I saw doing well with this hot tub is not one of them

[00:09:40] Amanda: exactly, but it was, I was like, Whoa, okay. Well good for you. But

[00:09:46] Ryan: I will, uh, I will throw out just cause I think it's worth mentioning, I would, I would pay special attention to your vacants right now. If you can. Um, we had somebody break into a property in Indianapolis and literally remove our entire kitchen, like appliances, cabinets, even tried taking the granite, it cracked. So I think they decided to leave it.

[00:10:04] Amanda: They didn't take everything. They left the trim above the countertops,

[00:10:08] Ryan: They left our ugly backsplash, like of all the things they could have taken, they, they, that could have gone. So, I mean, I would just say. You know, and it's, we were out at the property on Friday. Everything looked good. Went on a Monday to take leasing pictures and it was gone. And it's in a pretty high traffic area. So I would just recommend if you only have one or two projects going, you know, setting up cameras or, you know, it's probably not a bad idea as you have more people that are bored and looking to potentially cause trouble or potentially out of work.

[00:10:41]Amanda: Um, so going into may, what are your thoughts as far as like buying Ryan? Like, what are you looking for wholesale wise? Like are you expecting prices to be about the same? Like what are you kind of thinking?

[00:10:55] Ryan: So, first off on the volume end, um, we've 17,000 pieces of mail going out in may. So I realistically expect that to translate into eight or nine deals is about what I would expect based off that volume. Um, as far as the values go for like a minute and a half, we dropped down to 70% of ARV expecting about a 5% dip. What we've seen on this, like. First time home buyer  inventory is, it hasn't changed. So we're kind of back at 75% minus repairs to property. We're going to wholesale, you know, obviously subtracting out eight to $10,000 in potential profit and then pushing it a little bit with our buyers trying to sell it for not 75%, but maybe 76% 77%. Um, you know, that property we shot out. On Monday, actually needed a pretty decent amount of work. It was in a pretty good area. Sold sight unseen, cash, as is, no inspection contigency.

[00:11:54] Amanda: So are you changing the location, like the areas that you're targeting? Are you,

[00:11:58] Ryan: No.

[00:11:58] Amanda: Okay.

[00:11:59]Ryan: No, I mean, we've always kind of targeted that niche in Indianapolis. Um. I would say I'm, I'm not shying away from low end stuff, but I'm also, I'm not going particularly after higher end stuff. Uh, we have that marketing campaign, I believe 7 or 8,000 of it is inherited property owners, um, that we pulled through prop stream looking for people that got a property they don't want. And the other, uh, 10,000 is properties that are basically just kind of like a driving for dollars list almost. So, um. Yeah, no, we're just, I would say for may, um, I'm still doing what I did in April, which is, I'm just pretending everything's normal. Like I have to still function. I still have to show up and go to work. I still, I mean, it's a. It's not business as usual, but the reason we're making money is because we're still showing up to business as usual. So I would say it feels really different. I mean, every deal feels kinda like awkward. It's kind of this like, I won't cough on you if you don't cough on me. Kind of a feel. But, you know, I, uh, I really think like. Uh, most of my competitors I know are like, Oh, yeah, I'm, I'm pausing marketing. So I think part of that is that's benefiting us of we're the ones that are still sending stuff out.

[00:13:20]Um, we, we've also even had, like, we had a couple of sellers who told us absolutely no to our offers. Then went to the better business Bureau and left us five star reviews saying, we operated with professionalism. So it's like super weird. It was like, okay, so I don't know if it's just like people have more time on their hands, so they're like, well, you know, okay, that was a good interaction. I don't know if it's that, but. I mean, I would say, you know, like with our construction in Indianapolis, we're trying to get everything done, everything on the market as fast as possible. With our leasing stuff, we're trying to get stuff filled with good people. Um, with our marketing, we're still looking for good deals. I would say my comfort level is down, but like our level of activities' not, if that makes sense. Like we're, we're still showing up. It just feels kind of awkward.

[00:14:11] Amanda: Right. I will say like during my Workday, it actually kind of does feel business as usual because I. Working in the same space. And you know, a lot of what I'm doing is the same stuff I was always doing. But every single thing I'm doing takes four times as long as it used to do as it used to, you know, um, the title companies are, um, aggravating, um, to say the least. They were always aggravating, but now they're like. Making me insane with how slow everything takes. And I do understand, you know, and I think, um, basically they've been blasted with all of this refinance activity coming in and that goes towards that, taking up all of their bandwidth. But, um. You know, I think that's fine. Those are some of your customers. But for those customers that are repeat customers, you know, it's like, we want some of your bandwidth too. So, you know, I have to be the squeaky wheel a lot more and I have to follow up three, four or five times now what I didn't use to have to, and you know, I, I feel like people probably feel that way a little bit about me too. You know, I just, my, you know, our job sort of exploded, whereas some people, you know, were without things to do. It's weird how. Many more things...

[00:15:21] Ryan: I think as an investor, just extra things got put on your plate of, you know, before it was kind of like you waited for rent to come in and you reached out to people when it didn't. Now it's like, Hey. I don't know if you're going to pay rent or not. I would like you to. So here are the resources for you to get money so that you can pay us. Um, so I think that's part of it too.

[00:15:43] Amanda: If we want to talk about rap a little bit. So we've been pretty, in all our markets, we've been pretty, we've done pretty well with collections. And I would say of the people that couldn't pay, we've. Uh, had communication with, I would guess 80 to 90% of them. They've been really proactive about communicating circumstances and that sort of thing. There's a couple that we just haven't heard from, and I think there's one in particular that basically said, I'm not gonna pay because I don't have to. And that's fine. I mean, eventually you'll have to

[00:16:15] Andrew: You don't have to pay...For now.

[00:16:18] Amanda: For now.

[00:16:19] Ryan: Yeah.

[00:16:19] Andrew: But yeah, it's a feast. They'll rock up. Um, yeah, we've, we've had good luck with that too. I mean we've had some people, you know, we, we waived April  late fees and offered a free payment plan

[00:16:30] Amanda: I think we were mandated to waive late fees in Oregon.

[00:16:33] I think it was,

[00:16:34] Andrew: I don't think it's mandated here. We had checked, cause we were going to do it anyways. As long as you prove that it was coronavirus related, you know, unemployment.

[00:16:42] Ryan: Not just bad-employee related.

[00:16:45]Andrew: And we're restructuring a couple of leases, like adding it to the April rent they're like adding 12 months or lease and adding the rate. I think we're doing that two or three polices, but for the most part we've been able to work it out. I think as long as this doesn't last too long, we should be fine. Although of course, um. You know there's going to be, if it doesn't last that long and it's going to be some price deflation too, uh, just cause of all the excess liquidity they pumped into the system.

[00:17:14] Amanda: I, I mean, I'm not trying to speculate, but I do think at the beginning of may, we are going to start hearing about the plans for, you know, like our state, for instance, what their plan is to kind of start to open things back up. I mean, it's not just going to go business to usual in one day.

[00:17:32] Andrew: Yeah,

[00:17:32] Ryan: no, but that's, that's already happening.

[00:17:34] I mean, um, in California, they reopened all the parks, um, in, in Georgia...

[00:17:39] Amanda: They did?

[00:17:39] Ryan: Yup.

[00:17:40] Andrew: There's one, well, one study came out recently, and since I'm, you know, like all other users of Facebook and Twitter, a licensed epidemiologist. Um, just like if I just saw a study, interesting that...

[00:17:56] Ryan: Shared by a gun store.

[00:17:58] Andrew: It's something like. It's the number effected,one sample study in California, which just randomly sent a Santa Claus study. Randomly sample. Many people came to the conclusion that the reporting rate of coronavirus is 50 to 85 times higher than what's actually being reported, which would mean as much less deadly, and if that's that is verified, that's one study it needs to be verified, then this is really just. It is like a suit, you know, it's like another, you know, major super flu, we'll call it, but, uh, not much more deadly, just super contagious, which in which case, it's like, okay, it's probably time to open this up again. But of course that needs to be verified. But I, I've heard, yes, several Southern States are considering opening up again. Uh, really the epicenter is New York and New Jersey. I think they'll be the latest to do so. But I do think other States, we've already seen some protests and things like that. people are cooped up. I think they are going to, uh, barring extreme circumstances. Like, you know, the hospitals being overwhelmed are going to reject this relatively soon. They're not going to accept...

[00:18:56] Ryan: Oh yeah, I'm bored out of my mind.

[00:18:58] Amanda: We actually, we rented a house near the coast that what we were allowed to rent to. Many of the coast studies have been shut down, but we just needed, granted it was a lot like being in our own house, but being in a different house that we can see a Lake from and walk down to the Lake. But, um, you know, it made me, it was interesting because I did look all of the. Beach stuff is not, you're not allowed to rent it, which, you know, that's a whole nother, like for the tourist areas, not that I'm wanting to swoop in and start buying that stuff up, but people who rely on vacation rental income are going to be having issues, especially if they count on it to make their mortgage payments.

[00:19:38] So

[00:19:38] Andrew: Airbnb industry got rocked.

[00:19:40] Amanda: Decimated.

[00:19:43] Ryan: We snagged two houses for 12 guests and Destin, Florida. Uh, this is for like, $4 grand. It was like next to nothing.

[00:19:53] Amanda: Right. And I mean, so that's, I mean, that's a potential area for P like, you know, for people who live on coasts or people who live, I mean, like, I know Kansas city has the Ozarks, you know, the Lake of the, the, what is it, the Lake of the Ozarks, which is, um,

[00:20:09] Ryan: redneck paradise.

[00:20:10] Amanda: Right? But vacation destination that may have an opportunity to, I mean, I feel like there could be price fluctuation there and something to be.

[00:20:20] Ryan: Part of the problem with like, Oh I'm going to scoop in and buy Airbnb properties. Most people who bought Airbnb properties overpaid over, remodeled and overfurnished where it's like, that's why they were in so much trouble as the only way they were cash flowing or breaking even was off of that premium.

[00:20:38]Um, I'll give a quick like side tail cause we have time for it. And I think it makes really sense. It makes a lot of sense to go into this. As a business, you want to make sure that your business is not dependent on a different business. So I'm a buddy of mine owned an exotic car rental company. This was like my dream, right? I'm a car guy. I was like debated getting into this with them. So they became Turos largest customer. Um, they had like a few hundred Porsches, range rovers, Alfa Romeo's, all kinds of fun stuff. A Mercedes. And everything was on Turo. I won't get into the specifics or air their dirty laundry, but, uh, they had a couple of problems happen. The big car rental companies Hertz, Budget, that kind of stuff lobbied to get a bill passed that any car with an open recall of any kind could not be rented out. Well, the problem with that Porsche range Rover, Alfa Romeo, Mercedes-Benz will recall these smallest things for their customers down to like, we decided to tighten this screw a bit more.

[00:21:49] So what happened is all of a sudden, a lot of their inventory they couldn't rent out and their, their model was. I mean pretty neat. They were basically leasing properties. They had co-signers that would go and lease or leasing cars, excuse me. They had a co-signer to go and lease 10 or 20 cars. They'd rent them out. They're cash flowing really, really well. So this bill happened. That was kind of phase one. Phase two something happened with Turo, and all of a sudden Turo said, you can no longer use our platform. So all the sudden they had hundreds of luxury vehicles with thousand dollar a month payments and no way to rent them. Very, very reminiscent of Airbnb, in my opinion.

[00:22:28] Andrew: Or WeWork

[00:22:30] Ryan: Yeah, exactly.

[00:22:31] Andrew: I mean, uh, yeah, we've talked about this before, but that's a fragile business model that is very susceptible to crises. You want to, right.

[00:22:39] Amanda: When it's working, it's working, but yeah, and so, I mean, it all plays into, I mean, like if your business is based on tourism, and I mean,

[00:22:47] Ryan: A hurricane hits.

[00:22:51] Amanda: A pandemic hits, any of that. You're just wiped out, decimated and yeah,

[00:22:58] Ryan: I saw a meme today that was like, I can't wait to be able to use the, you know, I did this through a pandemic with my kids. Uh, it's great. You don't want to go to school today. I went to school and there was a pandemic. Um. No, but I think that's a really good thing to just keep in mind of building your business on the back of an industry that you don't control or on the back of another company that's susceptible to issues or changes. Or one of the other problems they had was Turo changed the pay structure and basically said, you get a smaller cut, now we take a bigger fee. And you know, there. I would say it was kind of like owning a condo with an HOA, the HOA comes in and says, Hey, special assessment time. So, you know, I would be just cautious of that with any business model you're looking at.

[00:23:46] But, um, I will say in some cities, Airbnb owners were required to register and that is publicly available data. So if you're interested in trying to scoop up some Airbnbs, call your County, see if they make people disclose. And if that's a list you can get. If, so, there's your next marketing list.

[00:24:04] Amanda: Right? And maybe you make them longterm rentals and you don't repeat the short term or may, you know, maybe you balance them because maybe if you're an Airbnb person, if you had a little bit of balance, you wouldn't be so decimated by vacancy. And you know. Your inability to even rent them and having to give refunds. I don't know exactly how that works. I do have, um, you know, I had a couple things booked that have, uh, you know, they're offering to reschedule or, you know, and, but it was over holiday weekends and that sort of stuff. And they're not really giving me credit for the holiday weekend stuff. But.

[00:24:37] Ryan: I know Airbnb, I mean, we had a. We had a booking for a, an event in San Diego at like a multimillion dollar property and it was like a $15,000 rental and Airbnb just refunded it to us cause it was a gathering larger than 10. Um, so, you know, I think that I would say if you're going to get into Airbnb. Maybe you have properties that you can rent out conventionally and maybe you choose to Airbnb them, but you know, you can drop back to that. There was a condo we were looking at in Hawaii about a year ago that we decided not to do because it cashflow it as an Airbnb. It lost money as a conventional rental.

[00:25:23]Um, so, you know, I think looking.

[00:25:26] Andrew: Fragile.

[00:25:26] Ryan: Do what?

[00:25:26] Andrew: I said, fragile.

[00:25:28] Ryan: Yeah, absolutely. Looking at looking at something like that, if like, okay, we only have one exit strategy here, like we don't really have a contingency plan. It's kind of like going into a flip that you can't pivot and keep as a rental or buying something as a rental and you know you're overpaying for it so you can't flip it. Right. It's, I would say. You know, if you're on the sidelines right now, um, my, my recommendation would be to still ensure that you're getting good deals, that you're following the basic formulas that you have, the equity cushion. Um, I kind of want to pivot to this, uh, this topic, if you guys don't mind, just cause I found it pretty interesting.

[00:26:09]Uh, you guys remember everybody that was like, Oh, I can't wait for the next recession cause I'm just going to go by. I'm going to go on a buying spree. I think one thing I've found is those people were all talk cause now they're like, well I don't know what's going on so I'm going to wait and see what happens. But, um, you know, what, what are you guys seeing? Are you guys, I know we bought a flip Eugene, but you know, Andrew, Amanda, are you guys buying any other rentals right now or are you just kind of maintaining what you've got and selling stuff that comes up.

[00:26:35] Andrew: We're buying a few, but we're not going crazy. You know, as I kind of said at the beginning of this podcast, um, we want to see, start to get a better feel for where the bottom is before we go. Uh, really larger. We are looking at one portfolio, but we've got, right now we've got two small houses under contract and you know, we're going to. Keep our ear to the ground and keep looking for, for good deals when they come. But we're not, we're not looking to aggressively go after it until again. You know, the best time to start buying is right before you hit the trough. That way you've got a little bit of lead up, but you don't want to buy right at the beginning of the down point or at least go big. So, uh, we are buying but not aggressively yet. Although I do think we do, once we start to see where that trough is or get a better feel for it, we will start to accelerate our purchasing.

[00:27:22] Ryan: How many say you guys are buying two this month, what do you think you guys normally average a month. I mean, with the exception, I know primarily grown by buying portfolios.

[00:27:31] Andrew: Well, no, I mean at first we primarily bought by buying houses and apartments, small apartments, largely. Then we had a portfolio buying spree. Then we continued buying houses, like individual and small portfolios, like five or three. Um, then we got behind on our turnover and slowed down for awhile, and now we're picked up back up. Right now. Honestly, it's probably been about two a month, um, for the last 18 months. But,

[00:27:56] Amanda: Well I would say in our heyday, at 5 or 10.

[00:28:00] Andrew: We were buying five or six a month, and then the portfolios on top of that, and so, but right now it's been last 18 months, it's probably been about two a month.

[00:28:11] Ryan: So totally, totally off topic and I've jumped around a ton, so we'll see if our host ever lets me run another one of these again. But I would like to real quickly in closing chat about what I think most buy-and-hold investors don't talk about, which is every legit buy and hold investor I know has overextended themselves then started to struggle with property management or construction or if you're me both, and then you kind of have to go on this like. Okay. I now have to fix what I've bought and you almost have to pause buying to then begin buying again. I mean, is that most of my friends I know that I've talked to that have portfolios, the size of mine have pretty much all said the same thing. The other thing they run into is they have too much debt at a certain point, so they start raising cash through flips or wholesaling or whatever to start to pay stuff down. But would you guys say that's kind of held true across stewardships 30 years.

[00:29:07] Amanda: I, so I can't speak to the beginning of stewardship because, and I don't think any of us could because, um, we, and we were old enough then

[00:29:15] Andrew: to, I can speak for, cause I know.

[00:29:18] Amanda: Yeah. I mean, I would say absolutely because, um, I think what happens is you get in a groove and you think the grooves gonna maintain until you keep doing that. And I do think. Overextending yourself on, I mean, I think it's rehab and turnover. I think that is your glut. That's always what, um, underestimate how much work and money things need and then to figure out, I mean, it took. Probably 10 to 15 years to get property management like into a well oiled machine in Oregon. And there's still been, in the last 10 years, there's been several different iterations of the team ever changing, ever-growing, um, you know, for a long time maintenance was done really poorly and rehab was done really poorly. And then we had to spend five years fixing, you know, that. And so there's always something.

[00:30:09] It was just, it's easier kind of to fix it with more of your properties are occupied than less. And so in Oregon, we've always had, especially in Eugene, we've always had a really tight rental market in that there's just always kind of been a housing crunch here a little bit. Um, except for the last recession when there really was. Um, you know, it's absolutely a buyer's market, but it's typically a sellers market here, and it probably will continue to be that. There just isn't that much inventory here for the amount of people that are continuing to move into this area. So,

[00:30:48] Ryan: no, I appreciate that, Andrew. I appreciate you chiming in on that. I mean, I think that's. I think it's really just depends what you're going for. I think if you're going to do onesy twosy and end up with a portfolio of, you know, 20 and five or six years, it's probably not a problem you'll run into. Um, if you grow more rapidly, it's potentially a problem run into. But I also love, I saw Andrew recently shared in either bigger pockets or a social media of, you know, growing for the sake of growth makes no sense. So I think that's a, I think that's a very important thing to keep in mind

[00:31:20] Andrew: Growth for the sake of growth is the philosophy of a cancer. That's the quote

[00:31:27] Ryan: that belongs on a shirt or a bumper sticker.

[00:31:30] Andrew: And it's, I mean, it's, it is something that's very common. I, it's not universal, but it's also not destiny to grow too fast and get this, this glut. So it is something, you know, learn from the mistakes of others. If you can learn from our mistakes as you can, uh,

[00:31:44] Ryan: Or ask us about our mistakes. I mean, that's, we're, uh, I would say one thing with this group are not super prideful. I mean there's, there's a little bit of egos on this podcast. Um, Bill, but I mean, um, realistically, like we're here to give you guys, uh, the ins and outs.

[00:32:01] And I only poke fun at Bill cause he's not here

[00:32:03] Amanda: to defend himself.

[00:32:05] Ryan: All right. So kind of in closing, um, one thing I do just want to highlight as we wrap up here is just make sure you kinda keep your composure. Um, you know, huge shout out to Amanda on this of, you know, a lot of the times in real estate investing, you're dealing with people. It's gonna be your lenders. It's gonna be your bankers. It's going to be your staff, and it's going to be your tenants, your contractors, et cetera.

[00:32:30] Half the time. I feel like I'm a therapist of like talking people off the ledge of, you know, while you can pay rent and stimulus money is coming. I mean, my, uh, my brother's wife is a great example. Hairstylist, she's making more in unemployment between state and federal than she normally made. She's like, this can take its sweet time, right? I mean, she gets to sit at home with the kids for more money. Um, you know, Amanda has done a phenomenal job with private lenders that are not keeping their cool that are like, Hey, uh, you know, what, what's going on? Or, you know, can I get cashed out or whatever. And I think it's. You as a business owner have to always kind of be in the driver's seat of your feelings and your emotions, especially kind of on the logical side. That's not to say we don't lose our cool at times. Trust me, there's been phone calls amongst the four of us that none of you would want to be on, but it's like at the end of the day, you have to be level headed.

[00:33:29] And you know, with something like covid happening, I think it. I think it's been a really interesting stress test for a lot of businesses, a lot of relationships, a lot of partnerships of like, how do we manage crisis together? Um, so if you're kind of struggling with some of those fears and doubts, still. Highly recommend, just maybe unplugging from the news a little bit, trying to be very logical in how you're looking at things and just make the best decisions you can based off of the data that you have. You know, had, had, we, uh, there's some things we could have done that other people were doing, like giving discounts off rent or giving people a free month and taking security deposits. States are starting to talk about opening back up and things of that nature. And, and I think, you know, had we done some of those things. We, we may have regretted it, or, you know, even like, um, our, one of our commercial leases gave us a month off and then just increased our rent every month to make up for it. You know, had you done something like that with your tenants, if you had a tenant who was already on the edge of being able to pay rent, not going to be able to pay the new premium.

[00:34:32] So, um, overall I think I'm, I'm very happy with how. We've handled this so far. We don't have a crystal ball, but we're going to continue to make the best decisions we can based off the data we have at hand. I want to thank you guys for tuning into this episode of the good stewards podcast. Please, please, please subscribe, share and tell your friends. Um, we are trying to make an impact in real estate investing and kind of be the voice of reason amongst the hype. We appreciate you tuning in. Talk to you guys next time.