Ekabo Home Financial Freedom Mastermind Podcast
A podcast for those who do not believe they were put on this earth to work 40 to 50 hours per week for 40 to 50 years, to hopefully retire at the age of 65.
Ekabo Home Financial Freedom Mastermind Podcast
105. Harnessing Spring Market Secrets: Real Estate Investments, Neighborhood Gems, and Mastermind Synergies
Get ready to unlock the secrets of the spring real estate market with the help of Nyra Sanders in our Financial Freedom Mastermind Group Podcast. This episode is a treasure trove for those aiming to navigate the choppy waters of rising interest rates and seize investment opportunities in vibrant neighborhoods like Atlanta's Ponce City Market. We'll also share a client's triumph, which truly embodies the strategic acumen needed for achieving financial independence through property investment.
House hacking isn't just a buzzword; it's a financial game-changer, and we're breaking down the numbers to prove it. From detailed expense planning to the intriguing 'Trader Joe's Whole Foods effect' on neighborhood potential, our discussion arms you with the tools and insights to make savvy investment choices. Plus, discover why certain retailers can be your crystal ball into a property's future prospects and how amenities and business movements around your property can significantly sway its attractiveness.
The real magic happens when we explore the synergies of real estate partnerships within mastermind groups. With anecdotes and strategic advice, I highlight the immense value of clear communication and solid terms for successful collaborations. Influencers like Rob Bill and David Green get a tip of the hat as we pay homage to resources that fuel our collective knowledge. This episode isn't just a listen; it's an investment in your journey to financial mastery.
🗓️ Tune in every Wednesday at 7 PM Eastern! Don’t miss out on our journey toward financial freedom through smart investments.
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Niyi Adewole is a licensed realtor in Georgia, brokered by EXP Realty. Feel free to reach out at Niyi.Adewole@exprealty.com if you would like to work with an investor friendly real estate agent.
Welcome to the Financial Freedom Mastermind Group Podcast. Here we're all unbreaking free from the 40 to 50 year world ride and accelerating our journey towards financial freedom. Join us every Wednesday at 7 pm Eastern as we explore different types of investments that get best track your path to financial independence.
Speaker 2:We serve as a hub for connecting with fellow members during our sessions, seeing them share successes, past questions and keep the momentum going this is Nii Adewale, a host of the Acaba Home Financial Freedom Mastermind Group, and I'm excited to be joining you here on the 1st of May, and it's an exciting time to be in real estate. There's a lot of different things that are happening as far as interest rates, as far as even home selling, home buying, and we're actually going to have one of the Acaba Home team's very own, Nyra Sanders, joining us here shortly. We just released the May edition of the Acaba Home newsletter and she's going to be walking us through that, some of the highlights, and we're going to dive into what's going on with the market here shortly. Nyra, how are you doing?
Speaker 3:Hi, I'm good. How are you?
Speaker 2:Come on now. Super good and welcome back to the podcast, thank you. So I was prepping it a little bit with those that are on the line, and every quarter Naira actually puts together a market update and a newsletter, and so we sent that out this morning to keep our network updated. But, naira, I'm going to kick it to you for some of the highlights.
Speaker 3:Yeah. So this month's newsletter is the spring edition and spring is like the prime time for real estate, so there's a lot of insightful and helpful information on the newsletter. But first I go into talking about the market update. So one major thing that I did notice compared to the last newsletter that was published in February were definitely the interest rates. So before it was like 6.6% interest rate fora 30-year fixed mortgage and now we're looking at about 7.1%. So it's a little bit of an increase.
Speaker 3:And I also added two new sections to the newsletter. One is a featured listing where I just show a little bit of a spotlight on one of our new listings that we newsletter. One is a featured listing where I just show a little bit of a spotlight on one of our new listings that we have, which is a beautiful home located in Atlanta. So you know, if you know anybody or even yourself are interested, definitely check that out before it's gone. And then also I added a Q&A part where I just answered a couple of frequently asked questions from our clients and other investors. And then I go into the neighborhood spotlight and this month I chose Ponce City Market. It's a great area. They have shopping, restaurants and then a beautiful rooftop area where there's carnival games. It's awesome and it's located on the Beltline. And then I close off with a client success story.
Speaker 2:Okay, and this is a pretty consistent outline that you do. I love the additions to the newsletter. If you don't mind, I just want to dig into a little bit of these and kind of understand why, the first being the interest rates. Right, when we kicked off the year, the whole narrative was hey, it's going down, it's starting to get below seven and, as you mentioned during the last newsletter, it was 6.6. Why do you believe it's jumping up to that?
Speaker 3:7.1 out of nowhere, I do believe, because they're raising the prices for the houses. That's definitely a factor that plays in. But I do believe later on hopefully later during the summer or towards the end of the year there'll definitely be a little bit of a decrease, like they said there was. But we'll. We'll have to see. True, it is.
Speaker 2:And it all comes down to that timing piece that you just mentioned. Right the Fed, when they say, hey, we're going to cut three times next year, I think all the optimists out there and I'm one of them was thinking that's going to be in the first half of the year, right before you get to summer, before you start getting toward the election. And the fact that they have not cut interest rates now it's pushing it out further and further. The economy reports that keep coming out are stronger than ever. It's making people start to question that piece.
Speaker 2:And the thing about interest rates, especially with real estate, is it's not exactly tied to the Fed rate. Right, it's tied to the bonds and things of that nature and those don't move unless the Fed rate moves and the bonds try to price in what the Fed's going to do in the future. Right, as well as mortgage rates, if they think it's going to lower, they're OK, giving you a break right now because they want to get people in, because it's not going to close for 30, 45 days, right, so they can offer you this interest rate. But if the Fed is starting to signal that, hey, we may not drop this interest rate for a while, they don't want to drop the interest rate and you get higher interest rates right 7.1 on average, lee, how?
Speaker 4:are you doing? I am doing. Well, I'm out in the field, as you know, so we're at Grady right now getting it done.
Speaker 2:Come on now. And Lee, we know you're out in the field because the video is clear and it's not breaking up. We know you can't be at home right now.
Speaker 4:Now, if I get internet issues, I can blame someone else.
Speaker 2:Yeah, I think the internet is going to be fine over there, but we were diving into a little bit of the newsletter, so we talked about the interest rates. The next piece that you mentioned that I'm excited about, too, is that fully furnished rental that we have. Do you have any highlights on that one?
Speaker 3:Yeah, so it is a short-term rental, and then also it is four-bed, three-bath and it has spa-like showers. It's very spacious and it's fully furnished, which is a plus because you know, not a lot of homes come with the furniture and everything, so that's definitely a plus.
Speaker 2:Agreed and I know Lebon's been successful in negotiating deals where you've gotten places fully furnished. What value do you put on being able to get an STR that's already furnished? Lebon, oh, Lebon furnished. What value do you put on being able to get an STR that's already?
Speaker 4:furnished. Lebron, oh, lebron, yeah. So I mean, biggest, biggest expense you're saving is a lot of the upfront cost. I mean, we know, specifically when it comes to Airbnb, one of the biggest upfront expenses that you're going to have to deal with is that furnishing piece, and it comes out to typically 5K. A bedroom right is what we typically advise. So when it Now I'm putting it on his computer- this has definitely got to be his computer.
Speaker 4:Hello, there we go, we're back, we're back. We can hear you now. The tale is old as time, y'all Okay.
Speaker 2:But to that point, to LeBron's point, it's saving you money, right? If you're able to get that furniture included in the deal. Now you're only bringing the down payment. So say you're using a vacation loan to buy a house and you're putting 10% down. With this house that we have listed at 350, that's fully furnished, you could put down 35K and have a fully operational B&B, as opposed to you typically have to put down the 35K plus another,000 to furnish a four bedroom, right? So $5,000 per bedroom. You're saving a lot of money and you can just pocket that money. So that's kind of one of the benefits. And, nyra, do you mind just going through a couple of the Q&As.
Speaker 3:Maybe like two of them. Yeah, so these are two frequently asked questions since we work with investors. One was the 15% rule for short-term rentals and it's basically just determining. You know what is the 15% rule? And basically you want the revenue the revenue generated, revenue for the property to be at least 15% of the purchase price. So say, the house is like 400,000, you want to make sure that you're making at least $60,000 annually off of the short-term rental in order for it to be considered a good deal. And then you have the 1% rule for long-term rentals. So it's kind of the same, but you basically you want the median rent to be at least 1% of the purchase price. So if the house is $200,000, you want to make sure that you're making at least $2,000 off of the rent every month.
Speaker 2:Lee anything to add to that?
Speaker 4:Hopefully my internet won't cut out, but yes, I think one of the things that a lot of people look at specifically and they don't take into fully account is that 15% rule is the starting point. Right, that's the minimum. If you can get more, always shoot for more. Right, but just don't be. And also, another thing I see is don't try to will the 15%. It's happening If something's at 14 and you can say, oh well, I could maybe charge a little bit more if I did X, y, don't overcomplicate it, right, because a lot of times I've seen that situation happen, where people will try to overcomplicate it and fail, trying to make the numbers work instead of just taking the numbers as is and at their face value.
Speaker 2:And piggybacking off of that. I think that's huge, especially the one caveat I'll give is what you said is especially true for somebody who's new. If it's your first or second deal, you want to stick to some of those rules of thumb and just rule out the ones that aren't going to hit there, because what you can do is you'll see a house like man, that house looks amazing. I know people would want to stay here, but the numbers aren't there and you can get in trouble. Now, if you're experienced, and you've done at least two of these, now I believe you can start to quote, unquote, make a market because you know what needs to go in that. And so the example I'll give and I've talked about on here before but that fourplex in Snellville, right, like the numbers, from an RDNA standpoint actually didn't make sense, right, when you look at it I'm like, ah, you know, if I was going to give this to a client, I would not recommend they do that. But for me, having a couple other shorts and rentals, understanding what we can put in this to make it, you know, kind of pull people to it, I just knew it could work out. Plus, when I looked at the map I saw. Okay, we got a Chick-fil-A right here, so it's a great neighborhood.
Speaker 2:We have a couple of Quintas and extended stays and there's not many Airbnbs. The reason the numbers aren't here is because there's not any comps close by. So if we create a market, build something special, we may be able to pull people from the La Quintas or the extended stays and it's worked out so far to the tune of about three grand a month per unit, right, and people are booking for 30 days at a time. We've had one person who's booked for a combined 120 days. They booked for 60 days and they kept doing week extensions and then, unfortunately, somebody booked for a weekend. They're like dang, they didn't get to it, so they left for three days, came back and did another extended stay until somebody else booked Right, and they're probably going to come back, and so it works. I just would not recommend that. On your first one, nyra, anything else from the newsletter that you want to highlight specifically. I know you talked about Ponce City a bit.
Speaker 3:Yeah, so the neighborhood spotlight. So, like I said, we chose Ponce City Market. I think everybody should go check it out. It's a big attraction in Atlanta. You can ride your scooters down the Beltline, go to different restaurants, the shops and, like I mentioned, they also have that rooftop area. I've actually never been there. I need to go check it out. But they have, like carnival games and, like you know, sitting areas. It's just, it's a lot to do up there too. But yeah, you guys should definitely check it out if you haven't been up there already.
Speaker 2:Okay, hey, ponce City shout out. I have been up there and it is as cool as it looks. It just takes a while to get up there and you do got to make reservations if you're trying to go to that restaurant up there. Just a word to the wise, but we're going to kick it to some questions in the chat here, and the first one's from Robbie. Is there a spreadsheet that you use to calculate expenses for a house hack to see if a deal makes sense? Levon, when you're doing that for clients, how do you typically calculate that for a house hack?
Speaker 4:So you mean in the sense of expenses. So, ihmm, so always, your biggest, biggest, biggest, biggest, biggest expense is that mortgage. That's the thing that's eating you up. It's the kind of dragon in the cave, as people like to say. The thing that you're looking down at every month, oh my God. So that is the main, most important expense, I would say, is that mortgage.
Speaker 4:Another one people don't really account for is you need to figure out in your house hack are you paying the utilities or is the tenant paying the utilities? And you need to decide that kind of fundamentally early, because that can. Also, if you decide, hey, I'm the one paying the utilities, okay, you need to charge enough of a premium to where that tenant who's living up there isn't going to just run that water, run them lights, and now you're kind of bleeding because of it. So those two are the major ones, I would say. Another one too is potentially, of course you got to account for your maintenance, repairs, capex, all of that stuff. I always run them traditionally, in the same way like you would a normal rental. So all the expenses that you're going to have in a rental you have in a house hack, essentially, because that's what you're doing. Yep Agreed Go ahead Nuri.
Speaker 3:Oh, I was just going to say they also have on BiggerPockets the property rental calculator where you can plug all those things in so you can see if you're making a cash flow or not.
Speaker 2:Agreed, agreed, and I see that, justin, thank you. He just dropped one of the spreadsheets that the Real Estate Robinsons use, which is Tony Robinson from the BiggerPockets Rookie Podcast. I'm more a fan of what Naira said, though, using the BiggerPockets property calculator. I'm not a huge spreadsheet person I don't know if you noticed, but you've probably never seen me send out like a whole spreadsheet, because I like keeping it simple and that bigger pop-up calculator makes it clean. It asks you for every single category and you can plug it in there.
Speaker 2:But when I'm looking at a house hack, the main thing that I'm looking at is okay, how much am I paying out of pocket right now and what am I trying to get to paying out of pocket? And so, for example, when I bought the current house that I live in, it was like, okay, I want to ideally stay under $2,500 out of pocket, so I don't care what the mortgage is. The mortgage could be $8,000. But if I can configure that house in some way in the house hack to where I'm bringing in X amount and maybe a little bit overage to account for utilities to Leibon's point then that deal makes sense right, and I think a lot of people, especially when looking at house hacks, they overthink it a bit. What you're looking to do is save as much as you can of your personal money. How much are you paying right now? If you move into this house hack, are you going to save that amount of money? Okay, it makes sense. Okay, anything else?
Speaker 4:top of mind, not really. I had a question, so you kind of mentioned that offhandedly. When you're talking about the snellville quadplex being next to a chick-fil-a meaning hey, there's some hope here I always, uh, use, like the trader joe's whole foods I call it the trader joe's whole foods effect, where essentially, if trader joe's or whole foods is in an area, that's a good area, no matter what it looks like. You know, like Whole Foods Joe's yeah, those because they're doing so much market research on their back end that, hey, I'm going to take a chance if they're taking a chance. You know, are there any other kind of brick and mortar stores that you look at and saying, hey, this area might be a little rough on the edges, but it has X, that's a good one.
Speaker 3:Go ahead area might be a little rough on the edges, but it has X, that's a good one Target possibly.
Speaker 4:Target, yeah, and if Target's leaving, that's because Target just left California. So, hey, that might be good, yeah, yeah. So in San Francisco they're closing down the targets because it's not profitable. They're losing more from theft and Teddy crime than they are gaining, so they're just like it's too expensive for us to be here. We're, we're bouncing out. So in the.
Speaker 2:That's actually crazy body moving in?
Speaker 4:What is if someone moving out? You know, same thing.
Speaker 2:Yeah, I don't necessarily have. It was just a nice to have to see the Chick-fil-A right there. I'm like this is awesome and I've set of places. I'm like, all right, I'm going to Chick-fil-A but I look more for is it like close proximity to where people need to get stuff, if that makes any sense? So, like that strip has a Chick-fil-A, there's a Home Depot less than a mile away. There's a bunch of different stores that you can go to, a bunch of different restaurants, and so when I'm looking at, this is an area that people would like to live because they don't have to go far for different things like that, whereas you know there's other properties you can buy from a rental standpoint, where you have to drive 15 minutes to get to the nearest grocery store, and that's not ideal, right. It's going to lower the value that you can bring in. Robbie, how you doing? I'm good. What's going on? Come on now, nothing much. You coming up. You're coming on Friday, right?
Speaker 5:Yeah, I was just about to say looking forward to it, Come on now.
Speaker 2:And you haven't seen the mansion yet. Oh, it's going to be dope, it's going to be cool.
Speaker 5:Yeah, and I missed the. I missed the first, you know little networking event that you guys had too. So I'm excited to meet everybody, catch up with you guys and just talk shop a little bit. Come on, man.
Speaker 2:It's going to be good. I actually got a text a little earlier from Ricardo. He landed safely in the ATL and we're actually going to go check out my new house hack tomorrow just to go so he can get eyes on it and push hard for some cool lending terms and kind of go from there. But yeah, it's going to be fun on Friday. Looking forward to you being there and, Justin, how you doing man.
Speaker 6:I'm doing good, man. You said you got a new house hack you looking into.
Speaker 2:Yeah, it's already under contract. It's just timing thing. It's still getting built out Right and they're they're falling behind. So it I don't know, May right, it's definitely not done right now. It's probably going to be done toward the end of June.
Speaker 6:Gotcha Good luck on that then, matt. You know, working with those builders it can get tricky sometimes.
Speaker 2:Oh yeah, oh yeah yeah, but this is a cool one. I think you're going to like it.
Speaker 5:We'll definitely swing by at some point once it's wanted to know about. So my I was just, you know, just for my property. I got a little excited because the high appreciation. Looking at it right now and it's saying that over the last three years the home value has grown an average of 40.1%. And so I'm just curious so well, it says your home value. But so I'm just wondering is that calculated Like just it's not just my home specifically? I'm assuming it's it's like the area or comps basically, is that is that kind of how that works, or?
Speaker 2:Exactly, and so this is more accurate than a Zillow, because Zillow is super broad. They don't have any region specific data like that, at least not as tight as this. Homebot is an AI system that actually runs a CMA on the backend based on the numbers that we put in to try to get you close. It's still not a hundred percent accurate, you know, I'd say plus or minus. I need to look at it Right. But it's one of those where, if you start seeing the things in your neighborhood trending up, it's going to alert you first, and then, if you want a true CMA, you would just send hey, I want a CMA and it will alert our team, and we would actually pop into the FMLS pull comps that recently sold in the last three to six months and send you the accurate value of your house, as close as we can get it to it.
Speaker 5:Yeah, I've seen there's no Chick-fil-A there yet, but I've definitely seen some construction sites and you know a little I'll say a little bit more of a diverse group of people like around the neighborhood. So I'm, you know, I'm optimistic that, and I don't know if you remember exactly where my place is, but you just got the belt line there. So you know, I'm definitely I'm not, I'm not going to keep my hopes up for the 40%, that would be crazy but I think that it's still just an optimistic look at the appreciation for that area.
Speaker 2:Yeah, and honestly, I was looking at, I started following this.
Speaker 2:There's actually an Atlanta Beltline Instagram account that I started following yesterday, and today they just started pouring concrete on another part of the West side, like to kind of get it connected.
Speaker 2:They've been actively working on the South side I know it's getting close to you, yeah. Yeah, justin's probably looking out the window like, hey man, let's get it going. But what's cool about this is the goal for the city. At least, what the mayor says is he wants to have 17 miles of this completed by the World Cup, which is in 2026. And so they are actively working to get this thing done, and I look at that date as the impetus for what could be a good time to refinance or sell. If you can hang on until then, the Fed should be lowering interest rates at some point late this year, maybe after the election or early next year, and kind of stabilizing it there. And then, when you see that influx of all these internationals coming to Atlanta, we saw what happened back in 96 and how that just accelerated it. I think it's going to be even more so right now, and so I'm excited for the refinance and selling opportunities that may come up.
Speaker 5:Yeah, and I'm assuming that they're going to have to. I mean, for the Olympics, I'm sure they did, but for the World Cup, I'm assuming they're going to have to use, you know, the whole city and different areas. It's not just going to be in, you know certain high wealth areas. It's going to have to be spread out. So they're going to want to make sure everything is, you know, looking good, safe, and you know things to do all around the city.
Speaker 7:It's like super slow right now. I'm like super lagging. I feel like LeBron on the camera.
Speaker 2:Oh, yeah, desmond, aj, how you doing? What's going on? Everybody Just trying to figure that out. I'm like, hey guys, you want to leave me hanging? Oh man, what a stray Catching strays out here, man Dang. On the same day that Kendrick DeMar replied, he said in shots.
Speaker 4:He looked at me when he said that that was not as strange. Is there a pool? Hey, don't worry guys, I'm getting better.
Speaker 2:Getting better. Yeah, yeah, we just had to move him out of his house into a place with internet. But anyway, that's me and AJ. We're looking forward to seeing you both on Friday as well. I think it's going to be a cool event, awesome networking, and you guys haven't seen the mansion in a long time. Aj, I don't think you've ever seen the mansion actually, but Desmond, you haven't seen the mansion in a long time, and now the whole back's finished, so it's going to be pretty dope.
Speaker 8:Yeah, I'm looking forward to it.
Speaker 2:Oh yeah, pool hot tub If anybody plays chess. We got this massive chest set outside so we can get that going if you come early. I do have an affinity for the game, but yeah, there's a lot going on over there. It's pretty cool Y'all going swimming. I can't. I'm hosting.
Speaker 4:I'm hosting.
Speaker 2:I can't do that, you don't know what happened last night, desmond, aj, what you guys got going on, man, I'm done, I'm done. I still got my little brace here, so I'm good. But I was balling Devon, you got to admit I was making every shot, yeah we were, we were.
Speaker 4:It just cost him his arm yeah.
Speaker 2:But AJ Desmond, what you guys got going on, Anything new.
Speaker 8:Same old, same old. I think one of my main goals and priorities is obviously networking, but I want to have a goal in mind and one of the things that is coming to mind just right off the bat is just kind of figuring out different financing options that I could use. Right, there's so many different ways to fund a deal and so I've been just doing all sorts of research. I've already used two different methods. You know it's simple, conventional. Then I went FHA.
Speaker 8:So you know I think I made a post on bigger pockets and just kind of having some small discussions about, you know, subject to financing. And then also, you know it was interesting you guys started to talk about home values and things of that nature, because that's another way, you know, I could tap into potentially my equity if I have any. But that's just, it is trying to figure out the most reliable source of your home's value, because at this point I've been sitting on my first home for a little over two years now, so could have some equity, maybe not. But again, it's tough to kind of check out Zillow or maybe Realtorcom, especially when they have such differing values. That's one thing that I have been trying to research and figure out, you know what's the best source of information for maybe your home's value. So just all those sorts of thoughts in my mind, because my next step is to try to figure out. Okay, there's so many different ways to fund a deal. What card am I going to play this time around?
Speaker 2:Yeah, and along those lines. Two things. One, before I forget, if you shoot me an email with the address of your previous home, I can set you up on HomeBot for that one so you can get a more accurate value. But two, I think going hand in hand with the financing is what type of strategy do you want to do? Because if you're like hey, I want to do a fix and flip or a burr deal, you need just short-term financing. You can go get a HELOC on your property, you can go get hard money to where they're paying for most of it. There's many ways to do it. But I think that strategy comes first Like hey, how do I want to acquire this next property? What? I think that strategy comes first Like hey, how do I want to acquire?
Speaker 8:this next property. What do I want it to look like? And then you look at the financing. Right, that's a good point, um, I think my. So my plan, uh, so far has been to pretty much, uh, buy every year whether that be a single family and then move into it, live in it for a year and it rents and repeat. Or, more ideally, uh, uh, duplex or multifamily, up to four units, because then the more units the merrier. Then you're sitting there looking like Desmond owning the whole block. So that's kind of been my plan.
Speaker 8:But I also like to be adaptable. You know, a flip, fix and flip, that does sound nice, but it is a bit, you know, it's scary, it involves a lot of different resources. So I think I've always kind of been like this slow and steady, wins the race kind of guy, you know. But again, I always like to be adaptable, things like that. But that's a really good point, just trying to nail down what exact strategy I would like to employ and then maybe dig into the financing, whereas maybe I was trying to figure out the financing aspect first and maybe I don't have the strategy down. So that definitely makes sense.
Speaker 5:And shifting over to Desmond, you said you do you have anything going on and he may be frozen actually, hey me, I was going to mention to you in one of the other calls that we had recently. You were talking about strategies for your long-term tenants. You know, the ones that have just the year-long lease and different things like that. So I actually reached out to mine, who's been there, for she's coming up on her third year and she pays pretty much on time every month and everything like that and I offered her I upped the rent. This house is in Baltimore and I upped the rent. What was it Like? 200 a month, because she was actually getting a pretty good deal beforehand. But I upped it to. I upped it 200 a month and I offered her the 25 percent discount on the first month and she was like so happy about that, so got her locked in for another year and you know, should be good.
Speaker 2:So, dude, that is awesome, and you know how much it costs to do a. 25% is definitely worth it for, yeah, to up that rent, and now that house is worth more, it's more valuable to other people, right? So it's interesting. Baltimore I have a cousin out there that just moved out there. He's working at John Hopkins. He moved out there maybe a little over a year ago and I still have, yes to go visit. I need to, I need to get out to Baltimore, but everything that you hear in the news, media, things of that nature is that it's still a pretty rough city In the areas that you're investing in. Are these more up and coming? Is it more like, hey, it's street by street? What would you say about Baltimore as a city overall?
Speaker 5:I would say it's a good. It's a really good opportunity for investors because it has one. It's a city with one of the highest ratios of cost to rent versus cost of actually purchasing the home. So you can get a really good deal in a home compared to what you're actually, you know, have to pay to and what their tenants have to pay in rent. Just for example, I got this house for $175,000. It's a three-bedroom house. It's actually close to John Hopkins, the university, not the medical school, but it's in North Baltimore and she's paying now $2,100 a month. So my mortgage is only just a little over a thousand bucks. But it's definitely still a very like rough city and most cities are street to street. They're actually I don't know if you guys have seen on Instagram they're doing a.
Speaker 5:The city is putting a bunch of houses out there for and selling them for a dollar and I think what the plan is there is just really to get investors, you know, push investors to actually buy the property, because a lot of these houses you're going to have to put in, you know, 60, 70k to renovate and basically build a whole new house, but you can still get the property for a dollar and then, you know, down the line, even if you buy it for the dollar and hold it till other people invest, you know, and put the money into their properties, it's it's it's definitely going to increase the value of the city.
Speaker 5:You know, long term I think so, and my dad lives in Baltimore. He's got a house right by the um, the uh stadiums there for the Orioles and the Ravens and his house has gone up in value a lot and he has a couple of neighbors that you know rented out to medical students and stuff like that. So I think it's a good, a good area to to invest, but definitely be careful because it's it's a, you know it is a rough city for sure.
Speaker 4:So these dollar homes, are they quite literally being sold, like you? Just they're being sold for that dollar, but it's more so hey, these houses aren't really worth anything. We might as well give it to you for the dollar.
Speaker 5:But you take on all the responsibility of taxes, maintenance, repairs, et cetera. Exactly so. The city is your city. It helps the city because these homes are vacant, you know. So they're going to get that money on taxes. But then also, if they sell, you know, a whole block for a dollar each. You know, eventually, three, four years from now, that block is going to be nice if they sell it to investors, you know, and people like that. So it really just raises the value of the city.
Speaker 5:And you know you can't. I don't know exactly what the process is for getting the home, but you have to apply, you have to show that you know you're going to invest in the house and everything like that, because there's just so many streets in the city that you know are totally vacant that there's just a lot of opportunity there. So you give these people who are investment minded, this house and then down the line, you know, you see, see the growth I think that's what they're and they're getting the tax money. They're not getting anything for those houses right now because they're just totally vacant.
Speaker 4:And do you pay?
Speaker 8:Oh, I'm sorry, Go ahead. No, go ahead. Finish Leave on. I'll go afterwards, I was just going to say so. Two part question, number one do you get a feeling that this is kind of like a too homes for a dollar is just kind of like. To me that's like screams red flag. And then, secondly, is it too late? You know what I'm saying because you know this news has been out for a decent amount of time and especially, if you're in the investor game, you know you've been looking at this right. So, um, you have any insight or or any opinion? Uh, just on those two, two questions I asked well, so one.
Speaker 5:So my uh coworker. He has about I don't know. He probably has about 40 or 50 properties in Baltimore. He bought, he got involved maybe like 10, 15 years ago, so he was buying a lot of properties for extremely cheap and you know he does mostly section eight.
Speaker 5:But you know these houses that they're selling for a dollar, like they have no roof, you know you have to put in like a hundred thousand dollars. You have to, you have to basically build a new house. You're buying the lot, you're buying that piece of land in that area for a dollar. And then you know the gamble that they're taking and that you know investors are taking, is that if you buy up the block you know what I mean Then you can get the construction done at a discount. If you build the house in the same way and then if the block is nice, you can get your money back within a few years off renters and everything like that.
Speaker 5:So I mean it's not like you can just buy the house for a dollar and there's a tenant ready to move in. You got to have money to invest in. You know, actually build the house, but there are loans for that too, and then I don't think it's too late, because I know that they're selling them off like in tears, and I've been talking to my coworker about it. He's been looking, but I think they're going to be selling them off like throughout the year. I don't think they're just putting all of them out there at one time, so, and I think that the chat Mike hometown in Indiana.
Speaker 6:They have a little show that they did on HGTV where he bought back a lot of homes in his childhood neighborhood. But there was a ton of other investors who bought homes in that neighborhood too and they revitalized that neighborhood in Indiana.
Speaker 2:Yeah, and in the chat, abdul actually is an investor out in the Baltimore area as well and apparently you need to have 90K in your account to qualify for this and you have to make the improvements within three years, which makes sense.
Speaker 2:So it's like, hey, we're giving this to you for a dollar, but you need to pay taxes, which is going to help the city, and then you need to do this improvement within a certain time period, so people aren't just sitting on the land waiting for everybody else.
Speaker 2:That makes a lot of sense and honestly, I love this move by the city of Baltimore and I like when cities think about how to involve private investors in the improvement of the city, because we've seen, you know, some of the roads and like this street work happened near my house that they started maybe five months ago and it looks like they're not going to be done for another five months and it's not even that hard.
Speaker 2:It's like, hey, we're trying to correct this little flow of the street and the reason being is because people aren't motivated, right, there's not their money. So people are coming in on Monday, they're leaving on Friday early and it's like, hey, man, you know, we'll just get as far as we get in a couple hours, whereas when private investment money comes in, when you look at this group and we're talking about getting an Airbnb up and running, dude, it's like, hey, man, we need to get this going, like this month, like two weeks. Right, let's get this thing going Because we have our dollars invested, and so I love when cities come up with creative ways like this to involve private investors, who can get it done better and quicker.
Speaker 8:So really, these are 90K homes, yeah, you got to read the fine print.
Speaker 5:Yeah, yeah, you gotta read the fine print. Yeah, yeah, but at the same time, like if you can get a ninety thousand dollar home, that you know what I mean. Like that's still right, it's a good, it's a good value.
Speaker 2:You can't get a ninety thousand dollar home in atlanta don't forget about that dollar, though right, yeah, ninety thousand and one yeah, and honestly, the numbers that you spoke about at a high level, robbie, are incredible. To buy for 175 and have the rent at $2,100, crazy. That's well over the 1% rule for a single family. Yeah, I really like those numbers.
Speaker 5:Yeah, and I actually. So after the first year I bought the house with a bridge loan and then I did a little bit of work on the house but got the tenant in for $1,900 at first and then I did a refi out of the bridge loan and I got like a 6% loan on that and the appraiser valued it at $225. So all that equity came right back to me and they're still getting a deal on the rent because rent has gone up like crazy in Baltimore. It's worked out really well. Plus it's with a long-term, you know tenant. It's like very little work when compared to the Airbnb, you know check in on rent if they're a couple days late, like fix something up if it needs that. But that's pretty much it.
Speaker 6:Okay.
Speaker 2:Go ahead Nate.
Speaker 6:I know, aj, you were talking about structuring deals and trying to figure out your next deal. I just want to ask a question to the group. I know a lot of these other, you know, masterminds and things that people are in they kind of partner on deals. Have you guys ever thought about that in one of these mastermind groups, like coming together trying to figure out? You know we're all in this space like you know, potentially at some point coming together trying to figure out how we could get in on something and you know, put something, put a deal together.
Speaker 8:Yeah, I mean that's definitely crossed my mind. I think it's just obviously you know that's a very delicate situation. Obviously you know marrying your partner in a sense, and you know you just make sure you do your due diligence and everything. I think everybody's in this group obviously you know come weekly and have a really solid real estate foundation and things of that nature. So yeah, with that being said, I mean I'm always open to different and creative deals, so long as you know we're both in agreement and we understand you know the X's and O's related to football, but the X's and O's and the game plan and things like that.
Speaker 7:So, of course, yeah, I think for me I'm kind of along the same lines of AJ. I like y'all and I want to keep it like that. So I think to go into a partnership is a delicate situation. I think that's a good way to put it and I think it could work for sure. And you know, with the right planning and people involved in strategy it could work. But I think it's important to have those tough conversations up front. And you know, in this group we're, you know, having good, lighthearted conversations and it's nice to you know, come here and you know then or talk about whatever. But you know, I think when it comes to a partnership it's a lot more different of a relationship. So you know, having that switch in the relationship I think can be tough sometimes. So it can be delicate. Not saying it can't work, but yeah.
Speaker 2:And I would agree with both of those sentiments. I think it's absolutely something that should be explored, but explored delicately we use the same word and I've actually done some deals with individuals that have been through here, that we've interviewed, and it's been incredible. One is my realtor partner down in Louisville. That being said, we built a relationship over seven years, right. Seven years, 30 deals purchased, 30 deals sold. I know her temperament in stressful situations. She knows how I react when I'm you know when a deal just fell through and things of that nature, right, and so we knew, kind of, what we were getting into, and even then we still went to lawyers and things of that nature to put it all together and put it on paper. That's the key. As long as you have that transparency, you're going to be fine.
Speaker 2:Another individual I did a deal with throughout this group was one that was a subject to deal. It was an individual that was joining early on. We did a subject to deal actually earlier this year, and that was a win-win for both of us, right, because we had the conversations up front about goals, things of that nature and what we were both looking to do, and so it's absolutely doable, and that's part of the reason why we wanted to start having more in-person events as well is so you can actually see if you vibe with that person in person. It's great to hop on a Zoom call and have a conversation, but you definitely, if you're going to get into a partnership it is like a relationship. You do need to have those conversations up front because you are essentially married to that person, and I think we talked about it a couple of weeks ago.
Speaker 2:But one of the things that I tend to do with different partnerships like that is exactly what the real estate Robinsons do. Right, they put a time limit on the partnership just to make sure that if something's going left, at least there's a set time limit. So, for example, on the partnership I have in Louisville, we put a time limit of five years. If at the end of five years which would be the end of 2028, it's not going well. Or one of us is like, hey, I need to get out for this, that and the other reason, the other partner has the opportunity to buy that person out at market value for their share. Or if both parties say, hey, we want to continue forward, then we extend it another X amount of years, but there's a set time period. It's been going amazing. I think we're going to keep extending, but at least we know if it goes left. There's a time period.
Speaker 6:And I actually like what you said. I think that was a good point, something that leads me to my next question who are you guys following in the space? Who are some of your favorite people to kind of get some information from? I know we've mentioned the real estate robson twice so far on this call. I follow Rob Bill and David Green. Who else are you guys looking to get information from?
Speaker 7:Following on the market Figure Pockets Podcast. It's not like an Instagram but the podcast. I follow them. They're really good.
Speaker 8:I'm on David Green Big David Green Guy and Rob Abasalo um more so, like David Green's discussion, he just kind of seems more mature in how he's progressed in his real estate career. For sure, um, I can, it's pretty evident. Um, there's another guy. Um, the black guy has a beard, I think. He's kind of like. I think he might be from Hawaii or something like that. I'm not 100% sure. I need to figure out his name, but he's a part of the BiggerPockets team and he's really solid. You might be talking about Tony Tony Robbins, I don't think he has a bald head.
Speaker 8:No, no, no, he has a full head of hair.
Speaker 2:He's no. Oh, henry, yes, henry, there it is Henry Washington.
Speaker 8:So he's from Arkansas man, no, no, no, that's good, that's a good one. I don't know where I got, yeah, I don't know where I got Hawaii from, but Arkansas, but he's a solid guy. I love listening to him. I would say those are my two top guys. And then, you know, just reading like various business mindset books, just to prime myself and then get more specific to the real estate side of things. I just, you know podcasts, bigger pockets, things like sound like you are the partner Justin.
Speaker 6:So when I sound like you're looking for a partner, justin, I mean, I'm always looking to partner on deals or, you know, kind of expand my horizons as we go through this thing. Man, I'm a firm believer in if you want to go far, you got to go together. If you want to go fast, you got to go along. So you know I'm trying to go far in this game. So as much insight I can get from other people and provide insight and knowledge you know we all great at what we do I feel like I have some strong skill sets. So at some point I am going to be looking to expand and partner up there, get some more deals on the, on the under the table.
Speaker 2:A hundred percent agree with Justin and his skillset. He actually just saved me $600 a month last, last week. So I appreciate you, justin, but Robbie Nyra Levon, what you guys got for things that you listen to, that that kind of keep you or or follow, that kind of keep you on track.
Speaker 5:Yeah, I listen to a lot of the things that the guys just said. To be honest, I don't do Instagram too much just because, like, I don't know if it's my feed or whatever, but it's just too toxic for me, like it's just too many liars, too much toxic stuff going on in there, so for me it's just like I stay off. I do listen to the podcast and, you know, try to watch the lights, man, huh.
Speaker 8:You got to watch the lights and the savings man. It ain't the day.
Speaker 5:It's you, I'm too, so I just I'm off. I messed it up Whatever, so I'm done. But you know, I feel like there's a lot of the people One thing about, like some of the people on Instagram, that I've noticed. When it comes to real estate, though, like you know, I just feel like so many people are on there trying to act like it's easy or it's quick, and to me that's just like a turn off, because we all know that's not what it is. You know, I was big on Grant Cardone for a while also, but you know, I just kind, kind of I don't know, I don't really listen to him anymore.
Speaker 4:I can relate to that because I swear every time I get an ad. Hey, do you want to know how I'm making $30 million from my bedroom?
Speaker 4:And all I got to do is swipe on my phone and all I do is I do it for 30 minutes. I'm like, all right, you're a charlatan. But yeah, to answer your question, I mean books. There's a ton of stuff I listen to. Oddly enough, I feel like you can get motivation from a lot of different sources, like the playoffs. I'm watching the NBA playoffs like man going after it. I got to go after it too, you know. So it's all kind of stuff for me personally. I mean, I think I look for it everywhere in my daily life, at least on ways to keep going, because one of the things that is difficult is that you got to keep on going. So, yeah, I see Bron, like I just saw Bron do it 20, 20, some years, you know.
Speaker 3:So yeah, I think I get a lot of mine from social media. Honestly, it's all over my For you page on TikTok and Instagram, so I get a lot of that information from there. And then also, like I've been looking into more of like the bigger pockets, like the blogs and everything, and also the books that Nii has given us have been very helpful. And then my dad he actually he used to flip a lot of homes, so I've been getting a lot of information from him that has been really helpful.
Speaker 2:And this is why Myra is a flipping rock star right, and so for me it's a myriad of all those things. A lot of the podcasts, you know, the Bigger Pockets, the whole Gambit. I listen to a lot of those. I like to listen to entrepreneur podcasts too, because all of us are entrepreneurs. Man, when you step into this real estate game and you're trying to build a business, especially when you're dipping between long term rentals or term rentals, you got to think like an entrepreneur and like a business owner. And so how I built this has been amazing. Just for inspiration, that's one with Guy Raz. He also has this other one called Lessons from the Top, or Wisdom from the Top, where you like CEOs to ask about life lessons, things of that nature.
Speaker 2:Books is huge. I love listening to books, reading books, and so at any given time I'm probably, you know, right now I have Rocket Fuel, which I finished a little while ago and now I'm trying to implement. I've got a couple of books, you know, by the bedside, so I try to read, you know, before going to bed, things of that nature. But yeah, man, anytime I'm working out or taking a long trip, I'm usually listening to a podcast or a book. Back in the day it used to be all music and it's crazy how, after a couple of years of corporate, it's like dude, I either drive in silence or listen to a book or a podcast. So I don't listen to music as much anymore.
Speaker 5:I will say also one book that I I do Audible, usually usually just walking my dog and everything like that. So one book that I listened to recently that I thought was really good was the 12 week year. I don't know if anyone's read that or listened to it, but I would definitely recommend it. You know it's basically a way to be more efficient and get more things done. You know, throughout your year If you break, you know break your year.
Speaker 5:If you break, you know break your goals down into shorter timeframes. And you know, for anyone that's been in the corporate world, like basically treat every three or four months like it's Q4. You know, if you guys did sales like I've been sales in corporate world so you know Q4 is usually when people make the most money and a lot. There's a lot of reasons for that, but you know Q4 is usually when people make the most money and a lot. There's a lot of reasons for that, but you know one of them is just people are really going hard focusing on certain things. So it just teaches you how to like break it down and you know basically focus on like one or two things for three or four months and then you know after that, you know, kind of just switch on to another thing or, you know, go at what you were trying to do before again or whatever it is. But it's a short listen, quick listen, short read, so I would recommend that if anyone's looking for a book.
Speaker 2:Done and done, and in the chat from AJ we also have the Compound Effect by Darren Hardy, so I'm adding that one to my list. And the 12-week year is one I read a while ago. I just need to reread it because, uh, I've lost certain pieces. I like rereading books too, but guys, are you go ahead?
Speaker 6:now? I'll just say all y'all in the facebook group right on the ecopa home facebook group or the mastermind facebook group, whatever which everyone calls it almost like start just dropping like books and stuff in there and like podcasts, because you know it's easy to talk about it here and then you kind of forget. But I think just kind of keeping up with what we're listening to and what we read is very beneficial for me, you know. So if you guys don't mind sharing what y'all got, or if you got my number, if you're reading something good, just shoot it to me, man, I'll definitely add it to my list done and done and justin's doing it better than me and lee bob man, please join the facebook group.
Speaker 2:All right if you have not already, and I'm going to throw that out there and I gotta do a better job yeah, I'm just not sure about this yeah, yeah, well, it's on me.
Speaker 2:I definitely need to do a better job of actually posting the links and things that in, but we're going to pick it up here because Justin just inspired me and we'll make that happen and I look forward to seeing all of you guys here on Friday. It's going to be good to get to see you guys in person, hang out for a bit and come hungry, because we literally have partnered with one of Justin's allies to bring in some Jamaican inspired food, so it's going to be amazing. So I will catch you guys on Friday. Go ahead.
Speaker 4:Is it too late to buy my ticket? I found out my trip got moved two days, so I'm going to be here Friday, come on now.
Speaker 2:Hey, listen, it's not too late, lebron, you can still come. All right, we're going to put you to work, but you can still come.
Speaker 4:Hey, if I got to be a waiter again, I'll do it. You know I'll go back to my roots.
Speaker 2:Hey, come on now. Hey, but everybody, I hope that you have an awesome Wednesday and we will catch you a little bit later.
