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
109. Transforming Your Financial Future: Timeless Wisdom, Real Estate Strategies, and Innovative Investment Tips
Are you ready to transform your financial future? Our latest episode of the Financial Freedom Mastermind Group Podcast promises to deliver life-changing insights through the power of influential books. Join me, Niyi Adewole, along with my co-host Liban, as we dive into the timeless wisdom of "How to Win Friends and Influence People" by Dale Carnegie, a cornerstone for mastering effective communication and leadership. We are also joined by Justin, who shares the eye-opening financial strategies from "Rich Dad, Poor Dad" by Robert Kiyosaki, and Alexandria, who offers her perspective on maintaining emotional balance from "The Four Agreements" by Don Miguel Ruiz. Get ready to expand your mindset and take actionable steps toward financial independence and personal growth.
Shifting our focus to the real estate market, we tackle the complicated landscape of high-interest rates and limited inventory. Learn why homeowners are reluctant to sell their low-interest mortgaged properties and how millennials, still scarred by the 2008 financial crisis, are navigating these challenges. Discover the creative strategies that younger generations, like Gen Z, are employing to enter the market, including innovative house hacking techniques and leveraging online resources. We also provide a glimpse into the future market conditions, examining the potential impact of the Federal Reserve's actions and the post-election period.
Finally, we explore the latest innovations in rental property management software and new construction options that could revolutionize your investment approach. From user-friendly alternatives to QuickBooks to the financial advantages of building Accessory Dwelling Units (ADUs), we cover it all. Learn how to maximize your property's value and rental income, understand the intricacies of financing new projects, and discover the potential of co-living arrangements. This episode is packed with insights and practical advice for both seasoned investors and those just starting their real estate journey. Don’t miss out on these invaluable tips and strategies!
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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 about breaking free from the 40 to 50 year work grind and accelerating our journey towards financial freedom. Join us every Wednesday at 7 pm Eastern as we explore different types of investments that can fast track your path to financial independence. We serve as a hub for connecting with fellow members during our sessions so you can share successes, ask questions and keep the momentum going.
Speaker 2:Good evening everyone. This is Nigi Adewale, host of the Ataba Home Financial Freedom Mastermind Group, and I'm excited to be joining you here on this beautiful Wednesday, and it's the first Wednesday of the month of June and today's going to be an open session. We've been doing a lot of those lately, so we're going to have a couple more guests. We've just had a couple of scheduling issues, but today is going to be an open session and we're actually going to be kicking it off with some books that have been influential to both me and my co-host, lebon, who's joining shortly. Hello, lebon, how you doing? I'm doing good. Can you say that one more time? I'm doing good. Can you hear me? I can hear you. Perfect, hear me, I can hear you. Yeah, I was just queuing us up right for a little bit of the, the kickoff of the open session, which is talking about books that have been influential in our lives, and I know you had one kind of top of mind?
Speaker 3:Yeah, so when people ask me that question, I have always top of mind a book and that's how to win friends and influence people written by Dale Carnegie. For people who don't know, I'm sure everyone you know has read that book. At least it's one of the first books that I always recommend when people are looking to you know, learn how to better communicate with people, and specifically with us. It kind of the field that we're in, we do it all the time. I mean, it's the primary driver of how our business works and even, you know, in daily life. I think communication is the single most important skill because it is how you convey everything you know. So being a better communicator not only is going to help you career-wise, it's going to help you personally and I think it's a skill everybody needs to have. And that book really goes into not just here's what you know. We think you know. These are actionable and they're also not that difficult too.
Speaker 3:So I mean, it's one of the first things they tell you oh, you know, never criticize, because people tend to. If you start on the criticism, tune out whatever else you're saying, right, and then in the book I'll give you a little teaser. Right, he talks about with the construction workers. You know there's a manager who goes hey guys, you know we got to have our hard hats. Why don't you have our hard hats on Right? I think he just froze.
Speaker 4:So there's a construction worker right and he goes.
Speaker 2:Levi, you froze for a bit. You said construction worker yes, there we go.
Speaker 3:Hopefully this doesn't happen again, hopefully it's just the booting it up. But no, I'll say with the construction workers they have a time where they will. There's a manager who comes out and goes hey guys, you know, we got to have our hard hats on the law, labor unions cracking down, da, da, da da. Why don't you have them on? Um, if you don't have it on, I'm docking, you know.
Speaker 3:And he comes out very aggressively versus a secondary manager who comes out hey guys, I'm noticing you guys aren't really wearing the hard hats, you know, are they uncomfortable? Is there you know something about them that you know? Do they not fit what's going on? And more so comes at it with a more compassionate, not as aggressive approach. And when they've done that, it's kind of shown that they're more responsive. And even you know most of the people who have, I'm assuming if you've ever been a manager, one of the first things they teach you is kind of don't criticize, because once you've started on the criticism foot, it will just go down that route and it starts on a more so negative communication than more so positive.
Speaker 2:Agreed, agreed. No, that's an awesome book, justin. Have you read that book? How to Win Friends and Influence People?
Speaker 4:I have not, I'll put it on my list though.
Speaker 2:Yeah, great that was Dale Carnegie, right, yeah, dale Carnegie. Yep, awesome book, awesome book. Justin, what about you, man? We're kind of going in a circle here, but what book or books have been influential in your life that you'd recommend?
Speaker 4:Well, I mean, I think everybody talks about this book. Right, when you get into real estate investing, you talk about finances, but one for me would have to be Rich Dad, poor Dad. I think most people that we come across have read it, but I always encourage people who haven't read it to give it. You give it a spin because it's a ton of gems in that book. Obviously, you know, it may be some things that you don't align with, but it gives you a good basis when you start thinking about how to take control of your finances.
Speaker 2:I see Alexandria in the background. What is a book for you that has been influential for you?
Speaker 5:I would say the Four Agreements. I don't think I've read that one, that's.
Speaker 1:Ruiz right.
Speaker 5:Ruiz, super, even just the first, like don't take anything personal. I think that, for me, is something that I try to constantly remind myself in like all aspects of life, like whether it's doing endeavors, real estate, or just even like personal life, like don't take it personal.
Speaker 2:100 agree, and it's one of those things um, I read that book when I was still in corporate and that is where you can use it majorly right, because people will do things. They're like like, just come to me, why are we going? And you know, and so you really gotta take that to heart and just understand, hey, everybody has their own things going on and people have, you know, issues that we don't even know, right, that are happening in the background, and so you want to make sure that you are continuing to not take it personal and focus on how you can get through your goals and kind of help as many people as you can. And one of the books that was influential to me because I was talking to Liban about this a little bit earlier. I think everybody's read this too. But Rich Dad, poor Dad Well, you actually mentioned the Rich Dad, poor Dad, so you took my side from the Rich Dad, poor Dad. I'm actually like a who, not how, right, which is a book written by Daniel, trying to find it on my shelf.
Speaker 4:We talked about this book though, me and you both, dan Sullivan.
Speaker 2:Dan Sullivan Amazing book and it's one of those things where everything he's saying makes a lot of sense. But until you get into situations where you're trying to build and kind of do more, that's when you start to realize like, hey, right, we can start to empower others to be that point of contact to make things happen. And more and more I'm trying to do that right, trying to encourage others to really take point and make things happen right and kind of oversee from a distance.
Speaker 4:I think that also reminds me of something that's very important community, right, you know we get together and we join this call so we can have that sense of community, so we can help each other. We can talk about these books that have influenced us. So not only in empowering people to do those tasks, but also putting people in your community who can tell you the knowledge that you need, because sometimes it's not about the information you can obtain, but who can you obtain it from and how quickly can they help you get to your goals.
Speaker 2:A hundred, percent agree, a hundred percent agree. I always have fun Anytime we link up. We're having pretty deep conversations about about a lot of things, right, but always have fun seeing somebody who's in their element. I know for you it's the production, the videography, things of that nature and just watching and kind of learning, right. I think you can learn from people that are doing things that they're passionately brought and that they love, and take nuggets from that, and so I enjoy it when we get together on these calls or in person, kind of just learning from everybody around me. It's kind of fun.
Speaker 2:Leemon, what you got, man? I think it just froze. Go ahead Leemon.
Speaker 3:Yeah, I was just going to a disclaimer PSA. Go ahead, lebron. Yeah, I was just going to disclaimer PSA. I'm sure you all noticed I haven't been speaking much. I'm spending a lot of this call frozen, catching every. You know this real. I had to be transparent with you guys. You know it's just us here right now. You know it's just us. I had to have a heart-to-heart. I can't sit here, all right. Hey, that's fair. That is fair. I don't know what's happening. We might be due for another outbreak, another outage, you know, another outage, I don't know. Hopefully not. That's usually what happens.
Speaker 4:Shoestring and Boba Gama over there. Lee Bond Shoestring. Come on, man Magala. I got a couple things to talk about. Man, I know we don't. I'm an anchor of that group on Facebook. We put a link out.
Speaker 4:They had a meeting about ordinances that's only been written up right now for DECAB. Technically, according to them, short-term rentals are prohibited in DECAB because they're not in the land usage rights or whatever they were saying in the table. In the table usage they were saying but of course they're not enforcing that rule. But now they're trying to put an ordinance in place to kind of make sure that the people who operate in SDRs properly can continue to operate those SDRs. They've had some issues with the party houses, so that's what they're trying to crack down on.
Speaker 4:But they're taking a lot of feedback from the community in order to figure out what legislation needs to go into this ordinance. It's had a ton of people in there giving their feedback, so I think they're going to get it wrapped up sooner than later. But you know, it's going to be one of those things where you just want to make sure you're getting on board and make sure you get all those SCRs licensed so they can continue to operate in DeKalb County Because it's on the way. If you check out Amstra, they may have a recording of that call today and there's no, that may be a quick place to go get that information.
Speaker 2:And from what you saw, what were the regulations looking like? Was it looking similar to what was in Fulton County proposed as far as like hey, you pay X amount you can get grandfathered in and then if you have like three violations they can shut you down?
Speaker 4:It's a pre-strike rule. They did talk about being grandfathered into the program and at first they had some issues in there to where they were saying you only could have SCR if you had a homestead exemption, so that would be primary occupancy. But they did remove that, so that won't be an issue. I know that's still an issue in Atlanta In full account. Is it officially completely as yet? I'm not.
Speaker 2:It's still similar to Cal, but they did remove that piece in the proposed. But it's not. Nothing's been passed yet. They haven't started enforcing anything.
Speaker 4:Yeah, because I still need to get my primary residence, that I'm house hacking. I still need to get that STR application completed. I got everything done. I don't have a printer. It's like who has a printer anymore?
Speaker 2:I sent it my way. Actually, this is from a Baxter days, though Don't call me a little fashion.
Speaker 4:We had a printer, but now, since we've downsized, it's like more patented everything up. I was like, okay, we don't need a printer, we print something, maybe once or twice a year. So that's one of the things we got with. Come on now.
Speaker 2:No, if you said it my way, I can seriously get it printed for you. But yeah, to that point you getting approved now, especially with the House Act, it's going to be pretty quick. And I actually have one of the guys' phone numbers within the Fulton County. He's one of the people that's been there from the beginning, because it does get a little tricky If you do the email back and forth bit longer. If you just call him or text him, he'll be like oh okay, I got it and just, hey, send me this and he'll knock it out solid, I'll get with you.
Speaker 4:Uh, I'll get all the information I'll get with you so I can get that taken care of you know and uh and leave on, it looks like you're back with us, man, anything top of mind how long, I don't know.
Speaker 3:Hopefully longer than the last, but no, nothing top of mind as of right now. I mean, uh, we've kind kind of been seeing, I guess. More so, a question to you why do you think there's such a limited inventory? You know, I've seen like a bunch of reasonings, for instance like hey, why would someone with a two or 3% trade out? But I mean, you know that still doesn't account for people who are moving. For instance, is it we're quite literally not building enough homes? I know we haven't been building enough homes, but kind of, what is, in your opinion, the biggest driving factor for that?
Speaker 2:And this is just my take, right, interest rates staying this high for this long has taken a lot of buyers out of the market. Right, and if you're a seller that does not have to sell a house right now, this is not the time to sell. We'll just put that out there. Right, this is not the time you want to sell. When it's interest rates going down, a little bit more confidence in people having the funds to be able to go and buy those houses, that's when you want to list it.
Speaker 2:What we've seen even across, we got like six listings live right now, right, and it's been a weird mix of people coming through.
Speaker 2:Some of them that are really like well done things that age, your world price, boom, you're in there. But a lot of them, even though we have it priced where the comps are, we've marketed and things of that nature, it's still tough to get the right buyer to come in because these buyers have, even with the little inventory, the ones that have to buy something or feel compelled to buy something right now, have a few more options, and so you got to get creative with credits and with kind of meeting the needs that they have. But long story short, I think this is a time period where, if you are looking to sell a property, and you can wait, you know, up to 12, 24 months. I would wait until after the election, when the Fed starts to drop that rate and more people flood back in, because it's literally a lot of individuals that are going to be buying houses. The millennials, right, are all of house formation age, a majority of them. But now it's just can you actually afford the houses that you want?
Speaker 2:Okay, Justin what's your take on it, man?
Speaker 4:Yeah, man, I definitely agree. I actually saw an interesting case study the other day to where the generation after millennials actually have more buying power right now than millennials because of the lost years after the recession. So they're looking at the generation behind it as they'll get funding from their parents because they're still kind of in that phase where they can get a gift from their parents, like millennials can as well, but like more common to the generation behind us, and there's a huge influx in that generation that has foregone college. So they have a lot less debt to their name. So now they have a lot more options to be able to afford housing.
Speaker 4:And there's been the FI community that has encouraged house hacking, but now they're doing it with friends. So it's like people are getting together with their friends and they're doing it with friends. So it was like people are getting together with their friends and they're buying their first property. So it was like, even with interest rates being a bit higher, you get three friends that would have lived together throughout their college years. They're just doing that in their twenties and the destination, their desire and their house hacking in that way, but they're all getting a piece of that equity.
Speaker 2:That is pretty incredible, and we actually have a Gen Z run here. Lebon, can you attest?
Speaker 3:to that I can. Yeah, I can, yeah, I mean. So, to put in perspective, yeah, I agree a hundred percent with what you've kind of said, because, as kind of the generation and I've noticed this as well the millennial generation doesn't really own a lot in terms of just generally, they do not really own much property et cetera, because of kind of circumstances, and they're growing up and so, to that point, I think, because of the fact that pricing is going to stay pretty stagnant for a while at least, if at least everything stays the same, you know, don't quote me, but if we keep going how we're going, I don't see anything like 2022, you know happening again, and on the opposite end, I don't see anything like 2008 happening again. So, because it's going to be steady and, to your point, because of the fact that many of them forego college, they don't have much debt to income in comparison and they're also able to take, you know, I think the internet, specifically YouTube, that general education also has allowed them to kind of become smarter buyers.
Speaker 3:Previously, you know, if someone wanted to buy a house, there wasn't, you couldn't just go on the internet, hey, what to do to get a house, how to get a good, you know, like the internet alone has given so much access to Gen Zers especially, and them. Just being more so tech savvy as well kind of helps them, because I don't know anybody that doesn't do a ton of research, like, for instance, when they're buying their car and this is a much lower. I guess you could say um type of purchase right, but on that same end I think it'll work. More so better. I think our generation is going to have more ownership if they can get their foot in. The door is the thing it might be harder to get in, but you're in, it's like now you're rolling in comparison.
Speaker 4:I think that goes back to what we were talking about earlier. Like they're, who is literally the internet right? Yeah, it's at their fingertips and with AI and being able to leverage it and utilize it the proper ways. Like their generation has literally grown up the entire time with the internet. Like you were introduced to the internet yeah, much more so than our parents entire time.
Speaker 2:agree, and it's one of those things where, uh, to just this point, like I still remember bittly before like, oh, everybody was getting online and stuff just going outside. You know, you're outside just running around until until it got dark out, right, and then all of a sudden it's like, hey, uh, we have social media and all these other things which I mean. When you think about it. Instagram even didn't come out until we were in college, like midway through, and so I think it's definitely a benefit for the gen Zers to be able to listen to podcasts, to look at YouTube and kind of understand what it means to have that home ownership. Justin hit it on the head earlier.
Speaker 2:What happened in 08 definitely scarred a few millennials, right, because we were kids. You know, depending on what happened to your family, you may or may not have a positive relationship with real estate, right? It took me a good amount of time to even feel comfortable going into it, and it was only because I read Rich Dad, poor Dad and then started listening to Bigger Pockets constantly. I was like, okay, you can do this thing. I didn't even get a credit card because I was so nervous about what happened to our family during like 08, 09, until I was a junior in college. It's because, like, this close friend was like, hey, man, you got to get a credit card and start building like actual credit because you need this. I was like, hey, I'm going to pay cash for everything. Actually, I didn't. I started building that.
Speaker 2:But long story short, I think if you're like, the sooner you can get started, the better. Right, I was able to get started at one a four and fast forward, and now it's just grown like exponentially. I think that goes for anything Like when you look at sports. Right, when somebody first comes into a professional league, they're not going to be at their best. Right, it's not going to be like, hey, there's going to come in and start dominating. Only few few people do that. Usually it takes five, six years to acclimate and then their skills start to show through. Same thing in this investing world right, if you could just stay consistent, keep problem solving, you're only going to get better and better along the way.
Speaker 3:And then one thing I'd like to add too. That is a factor that, to your point, our generation benefits from, because, when you mentioned, all the technology, stuff is working at home. I mean, if you don't have to live in the city, right, if you don't have to live in the city, your cost to buy your first house quote unquote just drastically dropped right, and so now, specifically, we're not really limited to where we have to live. In terms of jobs, that flexibility allows for a lot.
Speaker 4:That leads me to my next point, lee Bunn, the work from home aspect. Right that has increased the amount of co-living I don't know if you guys have heard about the phenomenon of co-living, right? So where friends and family want to live close to each other or essentially with each other. So we all love multifamily real estate because of house hacking, right? So now we have this new marketing strategy.
Speaker 4:So where if we have these multifamily properties or say you have a property, it has a duplex and you can put another duplex or either an ADU or something on that and you can market it as like hey, this is a property ready for multiple families to live on. So you can get three families living on that one property. So they're essentially all living together but living separately. You can really start to market that to a very niche audience, but you can start fetching those high dollars amounts because they can buy that property together the same way we're talking about with your generation, right? So sometimes as an investor it's hard to find another investor that can pay that $900,000 for a triplex or someone who's trying to get into a paying for not paying for a tri-place but or marketing to just a single family. But when you can market it to three single families like, hey, you three people can buy this together. It'll be cheaper than buying one single family. You get way more home than what you would have got if you can buy this property together.
Speaker 3:Yeah, that's a good point 100% agree, 100% agree.
Speaker 2:And it's one of those things where every market has an opportunity, right, and in this market, I see it for the buyers Like even the type of deal that we're negotiating for this duplex that we're getting ready to close on, to move into over in People's Town, the credits that we're getting toward closing are crazy.
Speaker 2:And then all the stuff that we're getting ready to send as a request for appears is stuff that a year ago, two years ago, made out of flow right, but right now there's not as many buyers that are out there to take something like this off their hands, and so people are willing to work with you and you can really get an incredible deal and you just got to keep your eye on the horizon for being able to refinance that and make a good deal into a great deal down the road. But a lot of people have that hey, I need instant gratification. I know the people that join this call are more long-term thinkers, which is awesome In the world. A lot of people are like, hey, if I put X in, can I have this tomorrow? And it doesn't work like that. If you're willing to think about five years, 10 years, even three years, right, you can build something pretty incredible.
Speaker 4:I mean, you spoke about it earlier, man, when you talked about sports. It's all about positioning right. The Oklahoma City Thunder they were bad for a long time but they acquired all these assets in their draft picks and now they've been able to get to the playoffs and they're going to continue to grow because they have the youngest, best talent in the league. So that's the same thing you're saying now. If you could position yourself to where you can weather the storm for the short amount of time, you'll come out of the end unscathed and everybody will be like man. I wish I would have gotten what he got.
Speaker 2:On a complete side note and this has nothing to do with investing as somebody that's been able to spend time up close with a bunch of different athletes we got the Celtics on the map heading into this final.
Speaker 4:I think the difference is going to be Porzingis. Is he going to come back and he's going to be able to play? Because the rookie, derek Lyle, lives with the Dallas Mavericks. He's been the difference in all these series that Dallas has played in. So I think, if Porzingis doesn't come back, I think the Mavericks are going to upset Boston to win the NBA championship. Lee.
Speaker 3:Butler, what are you going with? Yeah, I agree completely Specifically. I mean, another reason too is the Mavericks do a lot of picker rules and they cannot have Al Horford as the switcher. That'd be bad, that'd be bad and that alone is why Porzingis is vitally important, that it's going to be a problem. So I, I have the Celtics winning. Personally, I really I don't see them really losing. But again, I think I had this conversation with me if they steal a game at home, there's hope that game one or two. If they get game one or two, you, you might see me next week. I might have the Mavs jersey on, you know.
Speaker 2:No, no, you've chosen your color, man. Celtic Greer, celtic Greer man. I'm talking about the Mavs. Just because you know, I think Kyrie's going to come out there with a vengeance man. Just all the new shoes that he's going to be wearing too. Looks like he's just going to take off from the free throw line, man, and just dunk over somebody for us taking the map.
Speaker 4:It's going to be a hell of a matchup man Luka and Kyrie versus Jalen Brown and Jackson Tatum. It's like you know, the duo of Luka and Kyrie has been dominating the playoffs, something that we didn't see in the regular season. The Celtics have been one of the best teams all year long, but, as we have seen before, if you force Jalen Brown to go left, teams can get mistakes.
Speaker 2:This is true, yeah, this is true. This is true $300 million without a left is crazy. I got to see what they pay my guy, jason. They got to pay my guy, all right, they got to pay him a lot.
Speaker 3:Y'all know what Luka's about to get. Luka's about to get like $80, like $50 something a year $ like 50, something a year, 50.
Speaker 4:None of these guys are gonna sound long-term deals because it's gotta be an increased salary cap after the new tv deal, yeah, after the end of next year. It only goes up 10 a year but the contracts are still there, like 10 when you're talking a lot.
Speaker 3:Yeah, no, it's ridiculous. And then victor, he's like his second contract after his rookie deal is going to be 98 million a year. He's going to get 500 mil over five years. It's crazy he keeps balling like he is right now.
Speaker 2:It's well-deserved because he's going to single-handedly keep pop. He's going to single-handedly keep pop a lot in that game, Shifting gears back, one of the things that I'm working through right now. Still, it's taking forever, man. So I've got to actually explore other options here, which I haven't had to do for close to a decade but my taxes still working through getting the final pieces turned in because it's gotten complicated. But one of the benefits over the last couple of years have been tapping into that cost segregation and being able to save a lot on that piece. So, Justin, I know maybe not this year but heading into next year, is this something that you're considering for the Decatur House?
Speaker 4:100%. I actually have a meeting with a new CPA on Tuesday. I've been prospecting, wanting to find somebody else. I have a couple of local people from my hometown, the Hall Group. They do a lot of stuff on BiggerPockets, so I hit them up. So I'm going to see if I can get in with their group, see if we can have the right fit, because I'm definitely looking to make sure that I'm building a relationship with someone who can help me when I'm hurt. Right, I probably could get away with doing it on my own in the next year, but I'd rather start the relationship now so we can carry it on as we move forward. That way we can actually plan for all the things that are coming down the line. Like have a pretty good idea of how we want to invest as we move forward. So like being able to share that information with my CPA. That way we can start planning around the taxes. It's like all right, what can we do in order to reduce our tax liability the best way we can?
Speaker 2:One. I actually met with the whole group a couple of weeks ago. One thing they're awesome right. They're awesome right, and they're in bigger pockets, things of that nature but there comes an expense with that, so they are a bit expensive. Are you open to driving to Duluth to talk with someone?
Speaker 4:Yeah, yeah, I'm definitely. I mean, I had one person and unfortunately I had to end that commitment, but yeah, I'm looking for somebody else. At least I did a prospective thing and some people reached out for me from Atlanta. But yeah, I'm definitely willing to drive to Duluth.
Speaker 2:Okay, I just met with somebody in Lima and you would appreciate this. Naz has been looking for one too. He found somebody who's pretty solid and so I met with him last Tuesday in person. It's a long drive out there, but I met with him last Tuesday in person. It's a long drive out there, but it's from last Tuesday in person and that's definitely an option. After we get through this tax piece, we're just trying to work out the pricing and what it would look like, but it seemed like it was going to be a little bit less and this guy can do similar things. Plus, he can do cost segregations for a lot cheaper. Typically, a cost that's going to cost you, like you know, for a single family house, maybe like three grand, four grand. His costs are coming in a lot less. Yes, it costs that much to be bought, but you're saving 75K on taxes. So imagine like oh, okay, the math is there. The math starts to math when you're looking at Uncle Sam and I.
Speaker 4:Like Klaus said, a lot of people don't realize regardless of whether or not you do it or not, you're going to still have to recapture, right? So if you don't do the Kost said, you're still going to have to recapture. So it's actually in your benefit to always make sure you do.
Speaker 2:Yeah, and with the Kost said, it's one where my early years I don't even know if it was around back then. I think it shifted at some point, but my early earlier.
Speaker 4:I mean, it was always there if you were doing long-term rentals. But now we have the advantage of doing it if you have the SCR, because you don't have to be a full-time real estate investor.
Speaker 2:True, true, and I'm thinking more like residential versus commercial, because it wasn't as big in residential back in like 2016, 2017, at least not that I'm aware of, and maybe I was just blinders on trying to figure it out, but the taxes was like the last thing that kind of came on. And in the past couple of years now I'm like hyper-focused, I'm like okay, well, you probably want to take it all up front, because you weren't a real estate professional.
Speaker 4:If you were working full-time as a real estate professional, it wouldn't have applied to you anyway. Even in long-term rentals you would have to be a real estate professional in order to take the cost segregation right, unless you're doing an SPR.
Speaker 2:But yes, for the long-term rentals I had a bunch of depreciation built up over years. It just kept rolling, rolling, rolling. And then when I moved into real estate full-time, that's when my CPA was like hey, okay, we need to take this. And he just moved it over and wiped some stuff out.
Speaker 4:Yeah, like you said, unless you were doing the SDRs in 2016, then you would have True, true, true. Speaking of that, I know you use QuickBooks. I've been looking at some other softwares as far as bookkeeping and things of that nature. Have you ever heard of Rentastic?
Speaker 2:No, you said Rentaskit.
Speaker 4:Rentastic, rent, rentastic, rentastic, so Rentastic. I dropped it in the chat earlier, but I don't know if it shows up before the call comes in. I just dropped it in again. But basically I sent an ad on YouTube, bro, and then I went down this rabbit hole. They have this program and they showed a little demo. It's very similar to Hospital Move. It seems like a group that's coming up off the ground.
Speaker 4:But I love these type of new softwares because you can speak one-to-one with the people who are making the software right. So, even if the software isn't amazing to start like, if I can talk one-to-one with someone and they can set it up properly, I think it'll be a great advantage because it's coming in way cheaper than QuickBooks and is still tailored toward rental property, so you can categorize all your rental properties separately, you can have a photo of it, you can link all the bank accounts, so all the transactions are working the same. So I'm definitely looking into it. I'll follow up with you once I kind of have the demo to see how it goes, but it's looking like a valuable option because it's very user-friendly, right, and I always try to look at these things. So basically, I may be having to pass off this task to someone else, so the easier it can be, the better is gonna be for me long term.
Speaker 2:Honestly, I love it. You already saved a heck of a lot. And it comes to the price. Last piece, that that was amazing. This wouldn't be even heavier for left. To be honest, price lives like okay, it's on me to kind of move everything over quickbooks. We now have you've got everything tied in there, so, um, it would have to be compelling, right?
Speaker 4:so because quickbooks online, if I'm not mistaken, I think it's like because we're doing the full package with the direct deposit and all that stuff, I think it's like 100 a month right, the one that's like 40 bucks, but it's just like for me it's very cumbersome, like you probably have a much better handle on it because you've been using it longer, but it's like it's just so many things that I'm learning to know how to do in it that I can't get any help with. I try to reach out to their support and they're not any help. The forms are very convoluted, so I'm just looking for something that just kind of streamlined it for me.
Speaker 2:Aged, agreed, yeah and and full transparency. I don't look at QuickBooks as much anymore. Like even for invoicing for for a lot of different STR orders, things of that nature. I send an email to a VA who then works QuickBooks to invoice. I tried to. I like I figured out one time. I'm like all right, let me record I don't think he is here he goes, I don't know.
Speaker 3:You know, I think it's finally time we have a discussion with our internet providers.
Speaker 2:Yeah, yeah, I think it's been time for a couple of weeks, but it's all good. One day, man, we're going to level up.
Speaker 3:Like how you're talking about with the customer. I'm going to do the same thing with my internet. We're going to level up slowly.
Speaker 4:Hey Nia, how do you feel about new construction? I know there's an issue with inventory and you know I just found out. I never knew this. I'm sure you guys know this.
Speaker 4:But I didn't realize, when you're doing new construction for like anything, that you only pay the interest on the loan during the building phase. So I was like man, how does anybody build a house from the ground up? But I was thinking about, like I hear a lot about leveraging the land that you already own, because that's one thing that you don't have to take over again. So, like I have a good bit of land at one of my, at my duplex, right, I was like would it ever be worth it to just build another duplex behind duplex or get a couple au's put up or something along that line? And I was like man, but how am I going to have to pay $200,000, like cash out of pocket? Like how am I going to get this done? Then I realized that a new construction loan, you only would pay the interest until the project was completed and it would be much cheaper and it would be like you know, the top of the line because it would be new units.
Speaker 2:It would. The only thing with new construction and we're doing this actively right in Kentucky, right, and we're doing the townhomes as well as the storage. It's those type of loans where you're only paying. It's almost like a HELOC you only pay on what you use, right, and so as you start to get toward the end, you're paying more and then it matures into the actual loan itself, so it converts over to it. But the one thing with new construction is it always takes longer than you think.
Speaker 2:Right, like my neighbor next door, I think you saw the whole progression, right. They were building their house, they bought the land back in, I want to say, december of 2021. And they believed they were going to have it done by, like that, august or September. And they ended up not finishing until like last year, like middle of last year, and so it took about 18 months as opposed to, hey, this is going to be eight or nine months.
Speaker 2:So, as long as you're willing to have the holding cost and understand it's going to take a little bit longer, new construction can be amazing and, to your point, there's a lot less things you got to worry about because everything's brand new. There's still going to be some kinks to work out, but everything's brand new. But what you mentioned in a love that if you already have land and you have the zoning, that's the key to be able to build another duplex you have to zoning for that is amazing. I'm actually trying to do that over at that property. I don't know if you saw this one, the one that we well, yeah, you got the one that we have off of, uh, an east of the land, are three bed, two bath with a big backyard. You remember the house?
Speaker 2:yeah yes, so uh, the ordinance here, and actually had an ADU guy go out there. They built an ADU for our neighbor. The ordinance here is that you have to have 15 feet of clearance at the back and 15 feet on each side, and Maynard's got plenty of that and so, long story short, he can build the largest ADU 750 square feet, two bedrooms, one bath, make it modern, looking kind of square, like for $150,000.
Speaker 4:Right, make it modern, looking kind of square, like for $150,000, right, and that's top to bottom, getting all the permits, pulling everything over to it. It'd be real property tied to the land or 80 on wheels.
Speaker 2:No, it'd be real property tied to the land 80U real property tied to the land. I've seen some of the ones on wheels. I want to have it tied to the land because then you take it from a 3-2 in East Atlanta Village to a 5-3 and the cops for a 5-3 go way up. So it's going to cost $115, but you're going to get that back. When I look at what 5-3s are selling for immediately and then when you rent that out on Airbnb, that's going to cover itself to where it's net neutral.
Speaker 4:Yeah, and I found that big homes do well. But even if you could have that same space with two separate units with the same size of a big home, you could do really well, because now you're splitting it up it's almost like house hacking again. It's like you've had to land to get double the amount of space on that one land. You got a really cheap duplex, like you said.
Speaker 2:I don't know about LeBron, but personally that's where I'm finding the deals now is especially those singles with in-law suites. Personally, that's where I've been finding the deals now is especially those singles with in-law suites. Like that's where it is Duplex, triplex, quadplex. It's almost too easy for people to find now unless you're the first one in and can like snatch it up, or you're buying in the winter which you guys didn't choose off. There's less buyers out there, and so, like the art house, right, the art house.
Speaker 2:The reason that thing works is because the in-laws seat in the back. Like we're cash flowing like crazy over there because the front is taking care of the mortgage and the back is what the cash flow is. Like we got somebody in the back paying 2,200 for the next 30 days, right, and that's just pure cash flow, because the front is carrying everything else, and so I like those type of opportunities. And then even the house that we're getting ready to buy. This house it's a duplex, but the back unit has five beds, four and a half baths, which is what I'm in right now, and that bottom bedroom is like separate, separate entrance. So all we're going to do is put money into a kitchenette, separate that out, and then you got a triplex. So I'm like, okay, this can work.
Speaker 4:Yeah, and definitely like what you were saying about building that ADU. I'm trying to position and just figure out what I can do, because we want to buy again in November. We're just trying to buy every November. That's our plan. But also I want to take advantage of this additional land that we have here, if not this year, then the next year, because I mean it's not going anywhere. But like I do want to make this, just try to get every penny out of this property that I can.
Speaker 2:Agreed, agreed. And the one thing with the ADU and this is the last thing I'll mention in that piece is financing is tough on that. Typically you can't get bank financing. You typically have to take a HELOC or come in with cash. And so for the Maynard property it's gone up so much in value. I bought it for $460. Right now it's appraised for $550,000. And so I take a HELOC out of that, use that HELOC to buy or go to ADU and then have that pay itself back. That's how I plan to do it With capital that I actually have. I want to focus on getting other houses, more plots of land and kind of go from there, and so I personally look for the equity to grow in your house and then use that to expand it and have it pay itself back when it makes sense.
Speaker 4:Yeah, I was going to look to try to take the equity from the first home that we had and then you last deploy here, because I don't have the space at the Decatur property. So I would take the HELOC from that property to pull it at this property and then buy more property, like you said, with the capital that we're going to create.
Speaker 2:I like it, man. I like it. I like it. Leave my question while you're in next work and we're going to leave you with. Go ahead.
Speaker 3:I had a quick question about that whole thing is, before my internet cuts out, hopefully the whole kind of adding to the ADU piece point. Are you then because you mentioned you taking out the HELOC to build the ADU Are you then getting a kind of refinance to then pay back the ADU, or are you using the newfound income that you're generating from the ADU to pay back the HELOC?
Speaker 4:Well, I would imagine you can't refinance because you didn't have traditional financing on the ADU, so you'd just be using the ADU to pay back the HELOC. That's how I've always understood it, because you can get the traditional financing on the ADU. I would imagine it was just the traditional financing to begin with.
Speaker 3:So you can't go to the bank and go hey, I built an ADU on my property. It now is a 5-3 instead of a 3-1 or 3-2, you know, I'm not sure.
Speaker 2:You can. I just don't know it would have to go up significantly in value, right, so significantly. I just don't know it would have to go up significantly in value, right, so significantly. I think it's a wash, like when I run the numbers over on the main department I'm okay, if I add this, it'd probably be worth roughly about 700, right, but you've just paid another 115, right, and so I think it'd be a wash at the end of the day for that ADU piece. And when you go to refinance with the bank and then have to pay some fees for that, and so I wouldn't do that immediately unless it was like a significant increase. I would just wait it out and then refinance down the road and kind of pull it out then.
Speaker 2:But to Justin's point. The goal is to have the ADU just pay back the HELOC. It should be able to cover that and some and itself. Because think about it, man, these two ones it's not unreasonable to think you can pull in $2,000 a month on a 2.1, right Really more than that, but conservatively $2,000 a month. And so if you put $115K into a HELOC, typically you pay 1% back each month and so that'd be $1,000, right or $1,100. If you're bringing in $2,000, it's $1,100. Utilities aren't going to go up that much. Go up that much. You should be knocking that HELOC out real soon.
Speaker 4:Covering the spread. Once you pay it back, you're free and clear. That makes sense. You said $1,000 a month. That's 15 months. For 15 months now you're just cash flowing. Whatever you're cash flowing on that ADU, next thing you know you'll be paid off the mortgage.
Speaker 3:If you are taking it out now, it's not like your HELOC is going to go up.
Speaker 2:While we're on the subject of ADUs, I want to show you guys something that I'm actually pitching to an investor. I love it. They're looking for something unique and it's all around ADUs. So I'm going to be talking to them tomorrow about this, but I wanted to share with you guys.
Speaker 4:I think these guys went overboard with it. I love ADUs just because of the affordability process. It's nice to see that in the country right Like even with people traveling, like people want to be able to, like people are trying to cram people into smaller spaces. It's like I've noticed that our office here, close to downtown Atlanta, it's probably going to end up doing better than my five-bedroom, which is crazy.
Speaker 2:Because it's a smaller space, people don't need to have a whole crew together to come and make sure they can go and stay there. It's like, hey, I could just book this Airbnb quickly by myself.
Speaker 4:And we're getting just longer days. Longer stays man. So the occupancy rate is just going, going, going and going and going.
Speaker 2:This is an ADU or a property that they may have priced themselves out of or ADU themselves out of being able to actually sell the property. But this property sits on 2.4 acres. It has a main house that's a 3-2, but they've literally built eight ADUs on the acreage right and so when you look at conventional financing, it's not even listed for a crazy amount. The regular house is okay, but the ADUs are dope Like these ADUs are actually fire.
Speaker 2:It was nice Like this has done a cashflow but no bank wants to finance it because it's hard to and like this. One looked kind of like a cool, like treehouse ADU, like it's dope. But you almost have to come with commercial now to even be able to buy something like this, or come with cash, which eliminates a lot of the buyer pool. So long story short cautionary tale when you're doing the ADUs, I wouldn't go too crazy with it. I've seen some people want to say, hey, I'm going to put three, four. Unless you plan to hang on to that property and then sell or finance it to somebody, it may be a tight proposition.
Speaker 4:This would be one of those ones where they should definitely try to market to some people that are looking to do that co-living type deal right, like we were talking about earlier. So, if they can, there's resources out there to where you can find those people that are trying to all live together, live in like a 10-minute radius. I think this would be perfect to market to those type of people Agreed, agreed and it's actually one that it's just.
Speaker 2:There's a couple this location. You got to make sure that you're going to be clear to do the str piece on this one, because this is one where, like, these small units aren't going to work as long-term rentals because they don't have a lot of, like you know, the utilities and other things that nature and it's kind of a weird layout. Like you don't want to live in a treehouse as your main house. It's cool to go to for a weekend getaway, but I don't see Alexandria being happy in a treehouse Like, hey, this is our hurt right here. You know what I mean, and my wife would not be either. With this, it's one that's an interesting deal. I think it could be dope. It's just you got to make sure your permitting is in place. It's not going to go away to want to move forward on this.
Speaker 4:Is that the black couple that got really famous in Atlanta? That was like building the tree houses with like Airstream. Is that what they say?
Speaker 2:No, was it all in one property that they did that?
Speaker 4:Yeah, he did it at his, the first house that he bought. He did it at the first house he bought, like when he got into real estate he built a bunch of ADUs. I don't think it's that property, it's just a show. But I'm wondering if it's the same couple. I wish it'd be, because they might be really popular. They have the treehouse.
Speaker 2:Yeah, I mean, one of these was a treehouse, so it's interesting, it looks awesome, it's only 800K, right, right. I'm like, hey, this is, this is great, but you can't get traditional financing. Probably gotta come with cash or conventional. I just have an investor that I'm talking to uh, that work with company that was at before um, that was asking for something similar to this so they could uh save on taxes. Actually, like, listen, I got hit over the head with taxes last year trying to save. Can you help? I said so I'm looking at a couple of opportunities. The Maxim's.
Speaker 4:That's who I'm thinking about. I'll drop a link in the chat. This guy he went crazy. He like he deals everything himself, so cost is super low, but very interesting people, Definitely some people that we probably should try to connect with in Atlanta anywhere.
Speaker 2:Done and done. I'm going to check it out and see if this is actually their property. We are going to wrap for the night. Justin, thank you for joining. I'm Tanger Good to see you leave on. We got to fix the internet. I was part time. I appreciate it Catch me.
Speaker 4:Figure out how we can get this thing set up in person. That way we don't have to worry about his internet. We just need to really get this thing rolling and we'll just get it all together, just hanging out talking real estate and watching dollars roll in.
Speaker 2:The new crib, we honestly may just complete a setup. I think that'd be kind of cool, because now it's not. We just started from the ground and said, hey, let's put some I don't know the phone things that help protect from the sound, all that stuff. We can just set it up from the beginning and make it a little bit easier. Yeah, all right, joey. Yeah, be safe. I will catch you a little bit later. Bye, y'all.
