The Good Stewards Real Estate Podcast

BRRRR Strategy Overview (feat. Homicide House Deal)

Episode Summary

The Good Stewards dive into the BRRRR Strategy and highlight a slam dunk deal on a property that was previously a homicide crime scene that lead to a cash out refinance of about $53,000. We believe the BRRRR Strategy is the best way to get into buy and hold real estate and we will be buy-and-hold real estate is the best way to make become wealthy with real estate. And we believe that real estate is the best way to become wealthy in general.

Episode Notes

Show Notes:

Buy-And-Hold isn’t Flipping:

1:00: You want to buy something generally and rehab it to the point that you'd be willing to live in it, but you're not trying to make something that is going to shine. This is not your dream home. You're not buying in higher-end neighborhoods. You're not buying for homeowners, you're buying for residents.

The Homicide House:

9:03: On this particular deal we bought it for about $64k. Our rehab was right at about $45k-50k. We ended all in for about $115k. This one was a bit of a risk because of its uniqueness of having an 8-car double stacked garage. We come to find out from the neighbor across the street that someone was murdered in the house and stored in a crawlspace under the kitchen.

12:50: We were looking at about $800-$900 a month based on comps, and at $115k all in, that would make this a bad deal. But we stuck on a $1500 rent price.


16:23: We just didn’t know exact financials with this property. But we ended up expecting a $160k-170k appraisal but the appraisal came back at $224k and with a 75% to value, cash-out refinance, we walked away with a nice check in hand.

18:33: BRRRR works better than you know had we flipped this property. Let's say we made 50k how much of that's gone to taxes immediately? With the BRRRR strategy, we've got a cash flowing asset that's going to pay down the debt and cash flow every month.

Strategy Recommendations:

19:30: This is not a no money down strategy. If you do, you have no margin for error. When I started I was looking for no money down deals when I had no business doing a no money down deal because I had no money, right? Something breaks, you're screwed. It takes longer to rent than you think it's going to, you're bleeding cash that you don't have.

21:50: Buy and holds or the BRRRR strategy really doesn't work with hard money. It's too expensive.

BRRRR Finance examples:

24:56: Now if you're new at this you might be able to get an FHA loan for a long for a long-term financing. There may be other options, but we're looking for commercial loans on Residential Properties and that is definitely a loan product that not every bank is comfortable with.

What the hosts are up to:

27:07: Oregon market is doing a lot of loan assumptions (kind of like subject to) where maybe we find a borrower that's in distress and has a great loan on their property and we're able to bring their loan current, do some repairs, take over their loan, slip into an ownership position.

29:41: Indy market is in growth mode.

30:48: Kansas City market is working on several refinance packages.

Connect with the Good Stewards:

Episode Transcription

Ryan: It works better than you know had we flipped that property. Let's say we made $50,000, how much of that's gone to taxes immediately. This way, we've got a cash flowing asset that's going to pay down the debt. Every single month is going to cash flow every single month and quite frankly. We got a pretty decent little nest egg out of it and just the first year and a half.

[00:00:20] Intro: Welcome to the good Steward podcast. The only podcast dedicated to season Real Estate Investors who want to maximize the cash flow potential. In their business, we are Buy and Hold investors with a thousand plus properties in markets across the u.s. To 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 net worth you're in the right place.

[00:00:54] Ryan: Welcome to this episode of the good stewards podcast. I'm Ryan dossey.

[00:00:58] Amanda: I'm Amanda Perkins.

[00:00:59] Bill: and I'm Bill Syrios

[00:01:00] Andrew: and I'm Andrew Syrios.

[00:01:02] And we are the good Stewards, so to speak please go to our website can subscribe to the podcast and get our free ebook. It has all sorts of fantastic information will make you smarter. It'll make you wealthier. It will basically change your life for the better and every, well, we'll say a substantial number of ways, maybe the majority but it will certainly make it life better. So do it do it now. Anyways, we are here to talk about the BRRRR strategy which is what we've been doing for. Basically 30-odd years. I mean not myself. I'm just a little over 30 but, dad, you're what 45?

[00:01:35] Bill: Uh, yeah 59?

[00:01:38] Andrew: Doing it since, just before graduating high school, I believe. And the BRRRR strategy is the buy, rehab, rent, refinance and repeat strategy the rinse and repeat strategy of real estate investment. And we believe that this is the best way to get into buy and hold real estate and we will be buy-and-hold real estate is the best way to make become wealthy with real estate. And we believe that real estate is the best way to become wealthy in general. Now, it's not a quick process, but it is as well as I've kind of been repeating a bit here the best process in our opinion.

[00:02:09] It's basically flipping a property to yourself. So you need to get that equity margin in the same way that you would get with a flip say going with the 70% rule where you're trying to get, you know, the purchase price plus the rehab and a 30% margin to cover all your costs and make a profit in this instance though that profit is not a profit but a down payment that you use to basically turn the property into either if you buy with cash then you use that as your down payment so you don't have to leave any cash into the property or more commonly the way we do it where we get private loans on to the property upfront to cover both the rehab and the purchase price.

[00:02:47] Then we refinance out that entirely because we're getting the property refinance at its appraised value not the amount of money we have into it will get into this more in the when we talk about a little bit about financing. But whenever you're doing this strategy, whenever you're refinancing and you need to refinance the appraised value, some banks will make you wait for a seasoning period for a certain period of time, but generally they will let you go as soon as you get to that point and you can get to the point where they'll refinance at appraised value.

[00:03:14] If you have that Equity margin in it, you have a down payment and you can pretty much buy a property for free. It's not it's not free in terms of time. It will take some time to define the property to rehab the property and then to actually get appraised and go through all that that all that fun stuff. But if you do it right, you will have a property for free because you will bought it say with a private loan. You will rehab it. You'll have this Equity margin because you're buying right just in the same way that you'd be when you're flipping. But all of a sudden, and once you refinance it, you have no money left in the property if you do it right. Now. There are certainly some risk. There's some challenges with this is not a get rich quick or easy scheme real estate is the ultimate get rich slow scheme something we like to say a lot.

[00:03:57] We're not some gurus pitching the the great life that you'll get in six months, you know, six weeks after you buy our program for $29.99 or whatever. $29.99 meaning $2,999. If you haven't experienced the guru's they're not going to sell you to for 30 bucks, but it is something that you can get that that certainly works in the long term very well.

[00:04:18] The first thing I would say is is you do need to look at a little bit differently than when you look at flipping because you're looking at rental properties. So you're looking with regards to, you know, residents. You want to buy something generally and rehab it to the point that you'd be willing to live in it, but you're not trying to make something that is going to shine. This is not your dream home. You're not buying in higher-end neighborhoods. You're not buying for homeowners, you're buying for residents. And and in that in that instance, you want to stay in sort of the middle to lower-middle price range for the most part when you're doing BRRRR and it works the best in certain markets and a bit less-expensive markets.

[00:04:56] Although can work in just about any Market maybe not, you know Manhattan, but it can certainly work and pretty much any Market you find. And then the other thing you need to, In the same token, I probably stay out of the so-called "War zones" or whatnot which are very challenging even if they're deceptively looked good on paper just because the numbers are so good, but you're never going to see that because you end up rehabbing at all of your Equity because it's so cheap. A roof cost the same on a $30,000 house as it does on a $300,000 house. So we have a lot of examples of this we've done it quite a few times. We've done it. We're in multiple different markets. I'm here in Kansas City both my dad, Bill and Amanda are out in Eugene. Oregon and Ryan's in Indianapolis, and we've been doing this strategy for a long time.

[00:05:40] I think Ryan is sort of our go to marketing guy probably has the best at least most recent examples. Ryan, why do you take it from here and kind of go over some may be one of your more interesting when you more interesting real estate escapades will call it.

[00:05:53] Ryan: Yeah. Absolutely. I'm so we're actually going to kind of go over one that we actually just closed on pretty recently.

[00:06:01] Unfortunately. This has kind of been known as the homicide house. On our end due to some facts we discovered after our purchase now,

[00:06:10] Andrew: They we're kind of murdered?

[00:06:12] Ryan: Well, I mean they were murdered

[00:06:14] Bill: It wasn't "they" either right? It was a

[00:06:19] Ryan: yeah, it was a it was a it was a gal unfortunately, but not going to get into the details of that too much.

[00:06:27] Normally we're going direct to seller. So we're buying off Market properties. We're looking to be all in for 75% what they're worth minus the cost of repairs, but I do want to touch on something Andrew mentioned and that's also including things like holding costs. So when we're looking at deals, we actually subtract out the repair cost as well as an additional $5,000 buffer and that tends to cover are holding costs as well as the cost of our acquisition. If you don't budget that in you're going to start to have this large amount stack up.

[00:06:58] In fact in 2018, it would have cost us about $95,000 just here in. Had we not started to account for that about halfway through the year. So typically we're going direct to seller off-market direct mail and online advertising are kind of our favorite ways to Source deals.

[00:07:17] But this particular property were discussing today actually came from another wholesaler in our market now, we haven't bought a ton from wholesalers here in Indianapolis, but there's one guy in particular that we tend to buy about a property from a quarter and this particular deal was. He closed on listed on the MLS and was having a hard time moving it.

[00:07:39] It was in an area that's definitely undergone rapid gentrification. Lots of new builds. Lots of full-on guts the problem. He was having with selling this particular property to a flipper or a developer is it actually had a detached heated block a car garage? So kind of a very unique

[00:08:00] Andrew: eight-car garage?

[00:08:01] Ryan: Yeah. Yeah. It's a too wide. For deep that's literally larger than the house go. Well, a lot of people didn't want to deal with the issues of removal and all of that. So he's having a little bit of a hard time selling it and then what we do anytime we look at a wholesale deal. We treat it the same way as an off-market property.

[00:08:20] We make them an offer of this as what works for us regardless if they're asking price so we actually came in quite a bit lower than what he wanted. He was good to go. He didn't have another offer on it. So he ended up ultimately selling it. Now this particular property. We actually funded a hundred percent with private lender funding.

[00:08:40] We're paying 8 to 9% interest only in then we typically get a two year term benefit to two years something go slow. Something takes longer than normal or like We've ran into here in Indianapolis our local Community Banks want the property to have seasoned for 12 months. So really I need more than the term that a hard money lender would give me I need more than you know, six to nine months.

[00:09:03] So. On this particular deal we bought it for about 64,000. Our rehab was right at about 45 50. We ended all in for about a hundred and fifteen K. So on the property, it was a little bit of a gamble on our end just due to how unique it was we knew we'd get a premium for the rent, but we didn't really know quite how much I will say kind of an interesting thing that came up with this one with the properties track record.

[00:09:32] We are about. Way through our Remodel and I got a call from igc that said hey, the contractors aren't going to finish your project. Like what on Earth what's going on? And the neighbor came over and basically briefed the crew who is working on what had happened in the house a couple years before we'd even purchased it.

[00:09:50] So they're worried about it being haunted ghost cetera and the unfortunate thing. Where the body was hit in the house. They actually knocked out some brick to get into the kitchen under it and we needed to replumb so we thought you know, hey, there's kind of this nice access holes that I don't blame them for not wanting to crawl into so the only way we actually got them to finish this portion of the kitchen was.

[00:10:14] One of the guys would go in and leave his legs dangling out and another guy had to be there holding his legs to pull them out in case they quote, you know felt anything weird. Nothing happened. The weird thing with this house is I was even there alone by myself a number of times at like one am checking on stuff and I like never, you know felt or you know, there was never any issues with it.

[00:10:38] So that's kind of how we found this house and how we funded it. Bill, I'll pass it on over to you to talk about how we got at least and kind of the interesting scenario with who ended up there and what sort of a premium we were able to get.

[00:10:54] Bill: Yeah, I actually happen to be in Indianapolis at the time that Ryan was looking at this house.

[00:10:59] So I looked at it with him and felt, I think we both felt boy. This has got a tremendous amount of potential because it has a niche market appeal to it in terms of rentability. Now, we all know the Axiom, maybe the most important Axiom in real estate, is you make your money when you buy but there's a second not unlike that and that is you retain your value when you do Quality Property Management, and that's just the bottom line.

[00:11:29] So many folks who are doing buy-and-hold kind of strategy in real estate. I don't think they take seriously, the second R of BRRRR which it's buy, rehab and rent. That's the point which well that'll just take care of itself, and in fact renting doesn't take care of itself. Property management is a really big deal and it's pretty easy at first when you have one or two, but then you have to think about building out an infrastructure for property management and we'll continue to get into the specifics of that as we go along. But in this particular case this house had just such great appeal as I looked at it because I'm kind of a niche guy anyway, I think Ryan is too, and we saw, boy there's got to be somebody out there who really would just die for this heated eight-car garage. And we thought okay, we're probably looking at a somebody maybe that did auto repair or you know on the side was an amateur Auto. Or he just had collectible cars or something like that. Well, we didn't really know who we'd get, but the the factor of that for us was let's push the rents on this one and just see. I mean many things in this neighborhood maybe of this size three-bedroom, one-bath would rent for oh, I don't know, maybe you could correct me Ryan. You know the Indianapolis Market much better than I do. I would say.

[00:12:50] Ryan: Yeah, we're looking at like eight to nine hundred.

[00:12:53] Bill: Yeah.

[00:12:53] Ryan: Was kind of the typical rent comp. So if I was going to be all into something for $115k, I wouldn't do that deal if I thought I can only get eight or nine hundred in rent.

[00:13:02] Bill: Right? So but this again we felt appeal to a niche market. So Ryan said, let's push it I said, yeah, that sounds good to me and he put the number of 1500 a month on it which was a fairly staggering number for this. But in fact, it wasn't long before we found a very qualified resident who really wanted that exact setup and they rented it for us and then they had a pet.

[00:13:27] We got pet rent on top of that which made it 1550. Now the other factor of this he ended up we thought okay, it's perfect for you know Auto Repair whatever, you know, or you know, Low-key Auto Repair. It's not a business location, but he ended up just using it for storage and taking a bunch of his toys and knickknacks out of various storage units and collecting them all in one place.

[00:13:51] So be it. That's how he used it, but we felt like that was a great return on our investment, Roi. In terms of what we had into it and the rental income that we could get out of it.

[00:14:02] Andrew: Probably long-term residents too, given I don't think he's going to find a lot of other eight car garages.

[00:14:08] Ryan: Yeah, not to mention who wants to move three to four storage units worth of stuff once a year.

[00:14:14] Right?

[00:14:14] Andrew: Right or once a decade, maybe?

[00:14:17] Ryan: Yeah, they've already renewed.

[00:14:19] Bill: Yeah, so we started out with a year lease, which is fairly typical and then some some folks go month to month after that some. Folks go to you know, let's up it again for another year and there's an opportunity to have people back into their back into their office or a setting where they can talk another year. Maybe they're upping the rent a little bit or maybe there's some some things that need to happen on the property. So it's a opportunity to touch base with the resident there and and then move forward into the second year. Why don't I pass it on to the next R of BRRRR

[00:14:58] Amanda: which is refinance.

[00:15:01] Bill: There you go.

[00:15:03] Amanda: So, you know we make it sound like it's so simple and it is a very simple strategy but it takes time. So we initially purchase this property at the end of 2017 and it took us a couple months to get it rehabbed. I believe it's been rented since about February or March of 2018. And here we are in May of 2019 and we just closed our refinance with a local lender Regional lender in the Indianapolis Market.

[00:15:33] One thing that is always going to be a challenge is the refinance piece. You're not going to be able to just go take it to any Bank. You're going to have to talk to Banks about their qualifications. Make sure that they're looking for the type of properties that we're trying to refinance. In this particular case we got to our third Bank before we were successful at closing a refinance. So we've been working on that, you know, the refinancing a group of properties for the last six to nine months and you know what that means is going out pounding the pavement, meeting Banks, building a relationship with a bank which means putting your money in their account.

[00:16:18] Ryan: They want your money.

[00:16:19] Amanda: Yeah, they want your money.

[00:16:21] Bill: They want a personal relationship.

[00:16:23] Amanda: And when we initially bought this property, we didn't know how much that garage would add we didn't know exactly where we'd be. But we had a good idea of the market. We felt really good about this area and why are we thought we'd be with that purchase price of about 62k and are all in a rehab about 55k, you know, we were in to about 115k.

[00:16:46] We felt pretty good that our number appraised value safe conservative number would be 160k. So we got down the line, we got approved with a bank which means you have got to have your finances in order you that's a really important piece that will probably discuss more in depth down the line and when it came down to it, you know, we were expecting an appraisal and the 160k-170k range this particular property actually appraised for 224k when all was said and done and we were able to refinance at 75%. So we have a loan on it now of $168,000 and we were actually into it for about 115k. So what that means is that we have a little extra there to take on to our next deal and you know, we have a great property nice and fixed up. We're collecting fifteen hundred fifty dollars a month in rent. It covers the mortgage property taxes insurance and limited repairs. We did quite an extensive rehab at the beginning which we like to do to try to limit our repair and maintenance costs down the line and you know, we're ready to take that and on to the next property which is what we like to do.

[00:18:07] Andrew: Somebody really butchered that valuation want to have a podcast about that.

[00:18:11] Ryan: Yeah, I'm horrible. How, how dare, how dare I.

[00:18:15] Bill: You only got 53,000 in return from that was that what the amount was?

[00:18:21] Amanda: After mortgage, closing costs, all of that appraisal fees? Yeah. I mean, it's pretty nice when you can walk away from a bank refinance with a check and you're not writing a check.

[00:18:33] Ryan: Well, I mean it works better than you know had we flipped that property. Let's say we made 50k how much of that's gone to taxes immediately, you know this way we've got a cash flowing asset that's going to pay down the debt every single month, is going to cash flow every single month and quite frankly we got a pretty decent little nest egg out of it and just the first year and a half.

[00:18:53] Andrew: Yeah. Absolutely. That's I mean, I won't use the the joke I was going to. A killer deal it's probably not appropriate.

[00:19:04] Bill: But you did.

[00:19:07] Andrew: I wasn't going to and then I was like probably

[00:19:10] Ryan: I'm proud of you.

[00:19:14] Andrew: But yeah it I will say this it's generally even even once you've done this a lot even once you've done a lot of work on this you're generally not going to,  you're generally not going to get a deal that's that good.

[00:19:26] I mean that is the goal for sure, but you know, I think our average here in Kansas city is about, we're all in for about 81%. So we're a little bit extra there and I think a few key takeaways here is one. This is not a no money down strategy. I mean it can be but if you go in without any any any cash or anything like that it you have no room for error. You have no margin for error and so like that is that I mean the deal were just described as one of our best, you know, we have some deals here in KC that certainly we've more than BRRRR'd out. We've also had some deals that we did that we just we miss things or we we didn't do the valuation as well and we weren't able to get all of it out.

[00:20:07] And so if you have no money going into that, this is probably not the strategy to start with. For example, if you're not if you don't even say if you're semi somewhat cash poor at the beginning that would have been a great flip to get you start to get that cash in your in your pocket to then start BRRRR-ing. So there's multiple ways to look at this. We're not trying to diss flippers or anything like that.   

[00:20:26] Ryan: I do want to point out real quick Andrew. I think a really powerful point you made and that's a lot of us, myself included, when I started I was looking for no money down deals when I had no business doing a no money down deal because I had no money, right?

[00:20:40] Something breaks, you're screwed. It takes longer to rent than you think it's going to, you're bleeding cash that you don't have. So I think that's an important distinction to make.

[00:20:49] Bill: All of us would say we see flipping as a as a noble ambition, if, if it's a means to an end a greater end and the greater end is Buy and Hold. Because that's where you're going to create wealth over time. So there is a strategy of 123 you buy one and flip it you buy the second one and flip it and then you buy the third one and with the proceeds you've made you hold it. You do that again, one, two, three, and maybe then you get to the 1/2 method, you buy one, flip it and then you hold the second one and on and on. So flipping is a great means to an end, we just don't see it as an end in and of itself.

[00:21:31] Andrew: Yeah. I mean, I'm sure there are those that would disagree with that's what we are buy and hold fanatics of sorts or something along those lines.

[00:21:39] The other point. I think I'd make this really important is that you need to be able to hold whatever debt you have on the property for a decent amount of time and I'm talking about two years or something like that, but. Be at least a year some banks require at least 12 months of seasoning. We've had banks that require only 6 or that as soon as the property is rented and rehabbed and all that. They will refinance it at the appraised value, not the cost you have into it. But they're also banks that will require even longer or you might have a challenge finding a bank. Buy and holds or the BRRRR strategy really doesn't work with hard money. It's too expensive. Usually it's about three to five points about 15% And so that. 5.50% Interest and so it's just too expensive to hold long term. But if you if you hold it for if you have something like a private loan say something from somebody which will have another episode on just real briefly for somebody who's who has some money to lend a private lender could be mom and pop type 8-9 % interest in that or you have some cash or something along those lines.

[00:22:44] And you can hold it for a while and get through that seasoning period which is just the amount of time. The bank will need you to wait and own the property before they are willing to refinance at the appraised value versus the cost you have into it because if they're just going to refinance the cost you have into it. Well, then you're not taking advantage of the fact that you got a good deal and you have that built in equity margin.

[00:23:04] All right. Now that I've been parted such incredible wisdom, I guess I'll ask the rest of the Round Table any other closing thoughts or further input that you think would be worth. Worth putting out there.

[00:23:15] Ryan: Yeah. I want to I want to piggyback onto it Amanda mentioned with our struggle with banks here because this was the big fear piece for me. Right? It's I know how to find a good deal. I know how to manage a rehab I know how to get something rented. But the the bank part felt someone out of my control. I can't force somebody to give me a loan right and we actually found a local community bank that bill and I vetted really really heavily. They said hey, we'll do these all day long we've done these before will go off your appraised value, no problem. So we ended up actually banking with these folks for about a year-year and a half.

[00:23:48] They've had a lot of our money. They've seen a lot of transactions. We've used every upsell. They've got their remote deposit capture system the online bill pay, I mean, we've we have really built the relationship on our end and then when it kind of came time for them to honor their end of the agreement, it was a total 180. Andrew mentioned getting it based off of appraised, not off of cost and our bank said well, you know, we actually don't really like these so we'll do it based off what you guys have into these. Which makes no sense for us, that defeats the whole purpose of getting a good deal. So we actually had to kind of start back over and go re-shopping back through banks and Amanda mentioned there was three we went to and I want to say I went to like they dug through our financials. I mean, we got towards the end of this thing. There was probably another 20-25 that. We started conversations with and they didn't have an interest for one reason or another so, you know that is kind of the piece to this. You've got to have a local community bank that will work with you and a lot of the times you don't really know till it's time for them to send you money.

[00:24:54] Are they going to do what they said they're going to do or not?

[00:24:56] Bill: Yeah, and this is a niche loan product. I think we should highlight. Now if you're new at this you might be able to get an FHA loan for a long for a long-term financing. There may be other options, but we're looking for commercial loans on Residential Properties and that is definitely a loan product that not every bank is comfortable with but it is the kind of loan product that we're looking for and and there are many banks out there who will service people like us who need a commercial loan. And so they're really looking at the cash flow of the properties they're not looking at it from a residential point of view so much. So this is the kind of loan you're going after what you acquire a portfolio of loans like this.

[00:25:42] Ryan: I do think it's worth noting on there Bill that these aren't Fannie Freddie loans that are going to be sold on the secondary Market. These are typically loans that the bank is actually keeping in house. So a lot of people think you can only buy 10 properties. That's obviously not true or we probably wouldn't even be on this call. These are loans that are being done in the name of an LLC. Now you're typically having to sign personal guarantees. You don't really get into non-recourse until you're over a million. But this is a product that is a loan to an LLC that the bank is keeping the paper on that kind of that 10 fannie Freddie limit doesn't apply to.

[00:26:19] Bill: Right. For those who are just starting out they can get you can get 30-year loans with Fannie or Freddie backed, government guaranteed loans and it guarantees it to the bank is what's happening so they can sell that loan on the secondary market. After you get though a portfolio of loans, you move out of the criteria of Freddie and Fannie and so the bank has to keep the loan essentially they portfolio the loan is what it's called and that's that's at the place where you hope to get to soon.

[00:26:51] Andrew: Well, let's let's go around the table here. Any what is going on in your particular Market or your particular business or part of our business that that is really you say interesting or might just something that something cool something along those lines.

[00:27:07] Amanda: Well in Oregon, I would say that it's not as much of a cash flow Market as some of the other markets were in. So something we have coming down the line more often than not is, you know, we're doing a lot of loan assumptions where maybe we find a borrower that's in distress and has a great loan on their property and we're able to bring their loan current, do some repairs, take over their loan, slip into an ownership position. So that's kind of something we're gearing up for in our Market trying to find distressed borrowers.

[00:27:45] Ryan: Kind of like subject to?

[00:27:47] Amanda: Subject to, yes, thank you. Ryan

[00:27:49] Andrew: we'll have another podcast on that

[00:27:53] Bill: I'm looking forward. I'm going to make a trip out to the Midwest where a lot of our partners are at. We have Partners in Dallas and Kansas City and Indianapolis, St. Louis, Louisville, Etc few other places, but one of the fun things is going to going to piggyback a trip down to Florida.

[00:28:12] Probably the probably the Orlando area meet a fellow that Ryan knows his name is Brandon. And Brandon is very interesting. Very ambitious 27 year old who is flipped about 80 properties in his life very very impressive. He's got as a matter of fact, he's got eight va's from the Philippines who are making regular contacts with potential sellers on a you know, they work full-time doing that.

[00:28:43] That's to that machine he's got going is just impressive. I want to learn something about his acquisition skills. And I think what he'd like to talk about with myself and I might bring one of our other partners Philip, my third son with me, is just what it what it takes to build a Buy and Hold real estate investment business because I think he's very intrigued by that.

[00:29:05] He's never held one before but it's kind of like this is maybe the time and the place to start moving into that kind of strategy. You really know the front end of this which is acquisition and that's so critical because you make your money when you buy, but you you know, you can build a fortune if you figure out how to buy and hold. And I think he's seen the light you just needs a you know, somebody to walk walk through a few things with him and I'm looking forward to seeing him in about a week and a half.

[00:29:41] Ryan: Yeah, so with with us here in Indianapolis we're really. And if in the growth mode face, so Bill and I started tail end of 2017. We bought for properties. 2018, I set kind of this ridiculous goal of let's do 50 which was which was nuts and we actually ended up doing 73 units and so far in the first five months of 2019. We've actually Inked another 60 units. So the time of this were sitting at a 127 units here in Indianapolis, and so we're really kind of in the growth mode were managing a lot of rehab, a lot of or buying buildings that are occupied and taking those over setting proper expectations with our new residents.

[00:30:26] So there's definitely different phases to this. You know, Andrew is more in the optimization piece of this which he'll chat about kind of on their refinances what they're pulling out. Whereas we're more in the growth mode, but I'm definitely definitely excited. I think our goal by the end of 2019 is we want to try to be at 200 units? 

[00:30:48] Andrew: Yeah, we're a little bit more on the doing more refinances. Now, the market has certainly gotten a little bit more challenging to buy from so we'll be working on that next but we just finished a refinance on four condos. That's an interesting deal is a package of 16 well 17 condos really, we'll talk about that another time. And we have two more refinances coming up here one with 10 properties in other one with nine properties. And so we're going to get pretty much to the point where we have virtually no, no short-term debts all bank debt other than properties we just purchased or a few that have inherited residents that were there when we bought them and we kind of waiting for them to leave before we fix it up and don't want to refinance until then. So we're really getting really getting close to that point which is exciting.

[00:31:37] But so yeah, I think a lot of interesting things happening. We have all of our markets are sort of a different places. And thank you, I guess we'll just we'll wrap this one up. Thank you again for joining us for the inaugural first-ever podcast at the good stewards, please join a please go to our website, subscribe to the podcast and also download our free ebook and again next time next week. Same time same place, which of course is whenever because podcasting you can download whenever you want, but please join us again. Thank you and have a great day.