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3 Rentals Right Out of College as a Young Dad and First-Time Landlord

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A successful investor finds their “why” where other people find excuses. Real estate investing isn’t without its challenges, but as you overcome more challenges, you become a better investor. Today’s guest’s strong “why” led him to real estate, and it’s what pushes him to break through barriers, overcome obstacles, and build the life he’s dreamed of.

Hunter Lewis’ “why” came two weeks before his senior year of college when he found out his girlfriend was pregnant. Knowing he was to become a father forced him to get serious about his future. He found a college mentor that was successful in the commercial real estate space and began working for his company. Hunter then saved up enough to buy his first property in July 2020. Since then, he’s closed on two other doors and is working on his fourth!

Hunter became a first-time landlord with his second property, and while it was a challenge initially, he learned more about property management and how to compromise. Becoming a father at a young age also taught him how to take advantage of opportunities and reframe obstacles. As a real estate investor, he’s learned how to structure partnerships with family and the benefits of patience. Hunter is now working towards his five-year goal—$10,000 of passive income per month.

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Read the Transcript Here

Ashley:
This is Real Estate Rookie, episode 219.

Hunter:
I would say, if you haven’t already, go right down your why. For me, it’s my family and my freedom. And when things get tough, when things get stressful and overwhelming, because they definitely will, especially… Probably early on. Being able to lean back, and really know your why and why you’re doing everything and putting yourself through these overwhelming or stressful situations will help you push on.

Ashley:
My name is Ashley Kerr, and I am here with my co-host, Tony Robinson.

Tony:
And it should be episode 209er teen, that’s the right number.

Ashley:
It should be episode 219er, I think, actually.

Tony:
219er. Okay. There you go. That’s probably where I would say it. But either way, welcome to the Real Estate Rookie podcast, where every week, twice a week, we bring you the inspiration, information and motivation you need to kickstart your real estate investing journey. And I love, love, love to get in front of this mic every single time because we get to share some good stuff with you guys. Ash, let’s get into our boring banter for today. What’s new? What’s going on?

Ashley:
Well, I’m just headed to Idaho tomorrow. Going to Cour d’Alene, to meet up with some real estate friends. So, I’m excited about that. I haven’t packed or prepared or done anything yet. I actually just changed my flight. So, I actually leave 12 hours later, so that I have more time to get ready.

Tony:
That’s hard but… Get your life in order?

Ashley:
Yeah, yeah. So, but that’s about it for me. And just looking forward to the summer, it’s finally getting really nice here in Buffalo. And we had a boat day yesterday. So, yeah. What about you?

Tony:
Yeah, it was good. Wait for the crew on boat day. So, Ash and I were supposed to record yesterday, and she texted me. She was like, Hey, anywhere we can move that so I can get on the boat instead? I was like, Yeah, of course. We’ll make it happen. But…

Ashley:
Tony, there will be one time where we do a short rookie reply where I will be on the boat and recording from there.

Tony:
On the boat? I would love that.

Ashley:
That will happen.

Tony:
I would love that. We’ve got to make that happen. As long as I’m on the boat with you.

Ashley:
Yeah. There we go.

Tony:
I’ve got to make a trip out to Buffalo at some point this…

Ashley:
Yeah.

Tony:
But now, things are good on my side too. You know what? I actually just had my first reel on Instagram pass a million views. So, that was cool.

Ashley:
Oh, whoa! That’s awesome. Congratulations.

Tony:
And it’s always the bad stuff that goes viral on social. It was a video about these… They were actual crack heads that booked our place. There was actual drugs found left at the property, and they trash the place. But anyway, we had a video that showed about what the property looked like. And I guess people love hearing about the bad stuff happening at Airbnb.

Ashley:
They like hearing bad stuff happen to other people.

Tony:
Yeah. Not when I talk about how to analyze a property or the motivating stuff. It’s like, crack heads destroying an Airbnb, goes viral.

Ashley:
Yeah, yeah, yeah, yeah. Well, that’s really cool. What video I thought you were going to say is, the one about the bear coming onto your property, where there’s the garbage all over the porch and it got into the dustbin.

Tony:
That one also went viral, but that was viral on TikTok.

Ashley:
Oh.

Tony:
That one has almost three million views right now. So, this is our first one that hit a million on Instagram.

Ashley:
Yeah. Yeah.

Tony:
So, if you guys want to hear more about bears digging into our garbage and crack heads destroying our places, then follow me on Instagram @TonyJRobinson. If you want to see more about boat days in Buffalo, follow Ashley @WolffromRentals, and you’ll get a good mix of everything.

Ashley:
My content is so sporadic. It’s like, Okay. Today, I took a boating reel and I turned it into why you should get life insurance on your business partner.

Tony:
Because you never know what could happen on the boat really.

Ashley:
Yeah. I got dumped off the boat, just laughed off the back. And I was like, This is one of the risk you take when you get life insurance on your business partners. Near death experience is always around the corner. So, they can take over the business. But then I just added into my description about what is getting life insurance on your business partner? Why it’s important? So, you guys can check that out on my Instagram page, if you want @wealthfromrentals.
But today, we are bringing on Hunter, who just got started in real estate. I think the coolest thing about this episode is he talks about how he took advantage of a college opportunity that you just signed up for. And he got paired with a mentor who ended up being such an awesome tool and motivator for him to actually get into real estate and investing himself.

Tony:
Also, one of my favorite parts of this episode was the mindset segment, we brought that back for this episode. And Hunter’s response to that was just really… I think it’ll be really eyeopening for a lot of our listeners today. So, make sure you guys take a listen for that as well. But overall, he had a… Not a setback, but he had an obstacle he had to overcome in college, where he had a kid right before he graduated. And I can obviously relate to that situation as well. And he talks about how that framed and shaped his approach moving forward. So overall, just really good episode. Hunter’s a great guy who shares a lot of really good information. So, excited to share the story with you guys today.

Ashley:
Hunter, welcome to the show. Thank you so much for joining us. Do you want to get started with telling us a little bit about yourself and how you got started in real estate?

Hunter:
Yeah. So, I’m Hunter Lewis, 25 year old investor from Southeastern, PA. Currently have three doors and I’m in a process of selling my second one to 1031 exchange into a small multi-family property. So, three doors, working on number four. My journey started, my sophomore year at Penn State Altuna. Similar to how’d investors started with me, reading Rich Dad Poor Dad, that’s what lit the flame inside of me. One year later, junior year, met my girlfriend, Emily. And then, two weeks before my senior year, found out that Emily was pregnant. So, life threw me a curve ball, slapped me in the face and forced me to get serious.
April of 2019, we had my daughter. And real quick, this is actually a funny story. So, Emily and I were living in two separate college apartments at the time, obviously not ideal for a newborn. So, we had the rent an Airbnb for the month of April, leading up to me graduating at the beginning of May. So, first month as a father, I’ve been at Airbnb, which is funny. July of 2019, couple of months later started my career with Sheets, as an associate real estate sites right there. So, doing commercial real estate work for them. And then fast forward almost exactly a year later, is when I closed on my first single family rental. Six months later, closed on my second in January of 2021. And then closed on my third in August of 2021.

Ashley:
Hunter, what made you take that position at Sheets? And Sheets is a gas station, right? A big brand, like a Bucky’s or something. Not as great as a Bucky’s, I’ll say that, but like a-

Tony:
The heck is a Bucky’s?

Ashley:
A big convenient store.

Hunter:
I’ve never heard of that.

Ashley:
A Bucky’s is down in Texas, and I think they’re along the Southeast. So, it’s the best gas station you’ll ever go to in your life. But-

Tony:
My favorite gas station is Costco, guys.

Hunter:
[foreign language 00:06:57].

Ashley:
So, what got you to that position? Because you mentioned real estate as part of your job description. Can you maybe elaborate on that more?

Hunter:
Yeah. So, after reading Rich Dad Poor Dad out my sophomore year, I knew real estate is everything I wanted to do in the path I wanted to go down. So, pretty much just was trying to connect with people and put myself in a position to come out of school, hopefully with a job that was real estate related. Going in the senior year, find out Emily was pregnant, before that, didn’t really… Wasn’t really taking life too seriously, didn’t really have any set plans of what I wanted to do. Then that happened, and that forced me to get serious. And actually had Steve Sheets, who’s one of the brothers who founded and helped start and grow the Sheets company and brand, as my mentor in my senior year. And he hooked me up with the internal real estate department, and that’s how I got my foot in the door and started with them coming out of the Penn State.

Ashley:
Here’s the question we always want to know is, how did you find your mentor?

Hunter:
So, actually it was pretty easy from the student perspective. We just filled out a form of what we were looking for in a mentor, and then the administration paired us based off what we answered. So, I didn’t really have to do too much to the legwork.

Ashley:
But you took advantage of an opportunity to pair with a mentor. So, I think-

Hunter:
Yep.

Ashley:
… Yeah. So, if you are in college and that is an opportunity that you have available to you, definitely take that resource that’s offered to you.

Hunter:
And I guess off that speaking to being open and telling everyone and everybody about you wanting to be involved and get into real estate because that’s how I got paired with the mentor that was able to provide me and open up the doors for me to get into that position in the real estate department.

Tony:
Hunter, one follow up on the mentorship piece because obviously, a lot of new investors, especially those of us that are younger in life, I think long for that quote-on-quote mentor, but that relationship looks different from person to person and mentor and mentee. So, what exactly did that relationship look like for you guys? Were you meeting every week? Was it every couple of months? And how long were the conversations? What kind of challenges and things were you bringing to that person? Just give us some insights on how that relationship looked.

Hunter:
Yes. We tried to meet once a week, if not every other week. And really, it was… At first, really just starting to build a personal relationship with him and build that friendly, open conversation with him before I really started to dig in and ask business related or professional questions to help me advance in my career. So, I think send the groundwork of building a personal relationship first and then digging into the professional and business related questions was useful.

Tony:
I think it’s pretty cool that you guys met on a weekly basis. Most folks that I know that have mentors, it’s as far less frequent than that. So… And this was someone that seems like has found a lot of success on their own, then those people are typically the busiest. So, looks like you might have shred gold, Hunter, with your mentor.

Hunter:
I did. I did. Steve is an amazing guy, super down to earth and, yeah, he’s incredible with being able to build personal relationships and maintain them with how busy he is. One cool experience that actually got to do with him that sticks out. He was on Gary V’s podcast. So, he invited me along and I got to fly up there with him and sit in on him doing a podcast with Gary V. So, just being able to sit in with him and be exposed to experiences like that, it was… It was just insane.

Ashley:
That is so cool. And I think that’s probably something that when you have scaled and you have grown as an investor yourself, that you’re going to pay it forward and provide somebody else that opportunity. I know the investor that I’ve worked for, he let me sit at the closing table before. And he had me as a signer on the bank account form, he was doing this huge acquisition and I sat there at the closing table and I was the one that wrote these huge checks, signed my name on it. And it was just such a cool experience for me because it really just showed me the whole process of how he worked as an investor. And just me, getting to actually write those physical checks means such an impact on me because I had never even seen close to that amount of money before. So, it definitely would… It would be cool for me to be able to do that for somebody… Someday for somebody is, to bring them on along with me and let them experience what I do day to day for sure.

Hunter:
Yeah, definitely. And I think just getting exposure to as much as possible starting out before you jump in yourself is so beneficial in so many ways.

Ashley:
So, when you did decide to take the leap and to get your first deal, what made you decide, Okay. Now is the time.? Did you have a lot of analysis paralysis? Was there some kind of hesitation? Or were you like, Today’s the day I’m going to go buy a deal.?

Hunter:
I knew I wanted to jump in as soon as possible. Coming out of school, I had very little money in my back account. So, I took my first year working with Sheets to save up and cut expenses as much as possible. And quite honestly, COVID played into advantage because we packed up and moved… Or not moved, but came back home to stay with my parents during that time. So, I was able to cut back on expenses. And finally, was just ready to pull the trigger. So, I just started taking action. I stopped holding myself back and I just went online, went to citizensbank.com and figured out how to get pre-approved. And the snowball started rolling from there.

Tony:
Can we talk a little bit more about the snowball? Because I think that’s also the thing that a lot of new investors, where they get stuck is, maybe they can wrap their head around getting property number one, but the idea of doing properties number two and three, especially in a short period of time is where they get stuck. So, just to reiterate the timeline for folks. You got property number one in July of 2020. And then about six months later, you get property number two. And then about seven months later in August, you get property number three, right? So, you saved up the money for property number one, COVID, moving in with your folks. But what about property number two and number three, how did you fund and finance those ones?

Hunter:
Yeah. So, property… Once… Finally got in with my first one, that was proof of concept and proved to myself along with my close family friends that I actually could do this. Six months later, I finally convinced my dad. I said, Hey dad, listen, this is what I gotten out to. And he was pretty involved in the process to buying the first one. I show him the numbers. I show him what I planned on renting that one out and how much I wanted the cash flow on that one. And convinced him to put up the down payment and closing costs for the second property. So, I partnered up with my dad on the second one, we put 20% down and he actually exercised 25 grand of his employee stock for the down payment and closing costs. And that’s how I financed that second one.

Tony:
Something I want to point out is that you said on that first deal, that was proof of concept to yourself, your friends and your family. And I love that you phrase it that way because that’s exactly what it was for us in our business as well. When we started, we knocked out four short term rentals in the span of, I don’t know, six months maybe. And as those property started to perform, that was proof of concept to us and other people in our circle that the short term rentals are a good asset class and that we know how to set them up, manage them and run them on a daily basis. And as you start to communicate what you’re doing in the world of real estate investing, you’re going to start gaining interest from other people who you may not have even known were involved in real estate.
So for you, Hunter, was your dad. But for the rookies that are listening, maybe it’s the person that you, I don’t know, you do yoga with on Tuesday mornings or maybe it’s the person that you… When you’re at the daycare and you guys sitting there watching your kids play, maybe it’s that person. You never know who in your circle already has an idea of investing in real estate, but they don’t have the time desire or ability to do it themselves. And if you can show proof of concept, now you’ve opened yourself up to potential partners to help you continue to scale.

Ashley:
So Hunter, what would be your advice for somebody who is just starting out and maybe in a similar situation to you, where they have these resources at their work or have a mentor? What are some tips and advice you can say is, what are the things they should really focus on and maximizing having these advantages to them? For example, is it the network of that other investor that’s mentoring you or that you get from your job? When I first started out, I built a really great relationship with a loan officer as doing loans for this investor. And so, when it was time for me to do a loan, we had a great relationship and he knew I was responsive. And so, it went really smooth, getting them to give me a loan because of that. So is, there any advice or things that you took away for from the opportunity you had with your mentor and your job?

Hunter:
Yeah. And I would also shout out to my real estate agent that I found for that first deal. She was really crucial in… You touched on the network. So, digging into the network and the relationship she has already created and whether or not I was going to have access to them was a big thing. The lender, she had a contact at Citizens Bank, who I was already getting pre-approved with as she hooked me up with. We used her closing company, she… We used her inspector. All these people that are really crucial and big time players and purchasing a property, they either can make your life really easier or really hard. And fortunately, she had that network and those people there, they made my life a lot easier buying that first property.

Ashley:
So, when we move on to our next segment, we’re going to go into an actual deep dive of your deal. But before we do that, I want to talk about… So, you mentioned before that you had a child very young. So, what… Is that part of your why? What has driven you to keep going and to build and scale this portfolio?

Hunter:
Definitely. Yeah, definitely. Having Teagan at, I think I had just turned 22. Emily was 20. Had no money coming out of school and being the man in the family, I obviously had to put the team on my back and away with Emily still having two years left at school. So, I knew, financially, it’s going to be on me for some quite time. So, that was letting me understand that this is now much bigger than me. And it’s up to me to provide for my family, that… That’s definitely driven me in many ways.

Tony:
We talked about this on another episode as well. It was someone that we just recently interviewed. I’ll have to try and go back and figure out who it was, maybe we can throw it in the show notes. But they talked about how a lot of people use their family as an excuse instead of as motivation to really bust their butt and do the work that needs to be done. And I’ve shown them the podcast many times. I was 16 years old, my son was born. I was a junior, just started my junior of high school. And there are a lot of folks who are in similar situations that use the fact they had kids young as an excuse as to why they can’t achieve great things instead of a motivation to achieve those great things.
So, for all of you that are listening, there may be things… Maybe you didn’t have a kid as a teenager in your early 20s, but maybe there’s something else in your life that you feel is an excuse, that’s holding you back from really going forward as a real estate investor. But I challenge you to think of ways to reframe that obstacle as a motivating factor as opposed to an obstacle for you. So, really appreciate you sharing your story Hunter, because I’m sure it’ll inspire some of the folks that are listening right now.

Ashley:
And another thing we like to talk about too, is we find us all bring this up is, what about… How was Emily on board with you getting started into real estate investing?

Hunter:
She’s been great. She really has. She’s never once really even questioned me. She’s always just been in open ear and ready to jump along for the ride. And actually for the third deal, we split the down payment and closing cost for that one. So, she… We technically, I guess, are partnered up on that third property. So, she was definitely a big role and a lot of help throughout this journey so far.

Ashley:
That’s awesome. That’s really cool to hear because I think that’s sometimes a struggle for people is, getting your significant other or even just somebody on board with you to do it together. So, that’s awesome that you’ve had that support and that definitely helps a lot. Do you have any advice for somebody that is maybe trying to get their significant other on board?

Hunter:
Just give them Rich Dad Poor Dad.

Ashley:
Yeah.

Hunter:
That was the book that lit the flame in me. And I gave it to her. That was actually after I bought the first one and was really pushing to continue the scale and grow. She read that one and I think she was like, Wow! She’s completely on board after that.

Tony:
Yeah. We always say Rich Dad Poor Dad is the gateway drug for real estate investing, right? It’s like you read that first and then it… Or the gateway drug or maybe it’s like the matrix, right? It’s like the red pill or the blue pill. It’s like, when you finally take the right pill, opens your eyes up to what’s really going on.

Hunter:
Yep.

Tony:
But I want to go back to the partnership speaks hunter, because you said you took the on the first one on your own, you saved up some money from your job, moving in with your parents. Now, the second one, you got your parents involved. And the last one it was with you and Emily. So, can you talk us through how you structured those partnerships? So maybe first, with your dad. What did the structure of that partnership look like?

Hunter:
Yeah. So, being that… It’s been close family members so far, I haven’t got anything too crazy. So, neither or none of the properties are in LLCs. With my dad’s, just a written agreement that we are going to split equity. So, we bought the house for $80,000. And not to get too deep into this one yet, but we bought it for $80,000 with 20% down as a $16,000 down payment. So, the equity split is 50-50 after the $16,000. So, whatever the equity is, minus 16,000 and then divide that, 50-50 would be the split. And then we just split cash flow 50-50. But this early on in my investing journey, I have not been spending any of the cash flow. I’ve just been letting it all accumulate in these separate bank accounts per property, trying to keep my eye on the prize of saving up and continuing to reinvest in the business.

Tony:
So, what you described hunter as a capital recapture. So on the equity piece, and we’ve done this in some of our partnerships as well, is that whatever equity is available, before we split that, the person that put up the initial capital has to get repaid first. So in your situation, it was a $16,000 down payment that your dad put up. And say, you guys go to sell that property or refinance or any kind of capital event that 16,000 would get paid back to your dad first. And say, there’s like, whatever, $10,000 left over, then your dad would get an additional five, you would get an additional five. And that’s a really common, I think, lever to pull inside of partnerships to try and keep things balanced. Now, here’s what I will say, right? Because I know I get this question a lot. Ashley, I’m sure you get this question a lot as well, is like, Tony, Ashley, what is the best way to structure a real estate partnership?
And I will tell you, Ashley will tell you there was no one size fits all solution for any partnership, it’s all going to depend on the unique desires, wants, abilities, time availabilities of each one of those partners. At the end of the day, the only thing that matters is that A: You’re not breaking any laws and B: That both partners are happy. As long as you can check those two boxes, you can structure the partnership however you want to. If you want to say that partner A has to give partner B a lavish birthday gift every year as part of this partnership agreement, then you can do that, right? There is no right or wrong answer for structuring a partnership.

Ashley:
Let’s go… I would like to go into just break down a deal for you, Hunter, and see how you made a deal happen. Is there one in particular that you’d like to go over?

Hunter:
Sure. Yeah, we can go over the second one with my dad.

Ashley:
Yeah. Cool. So, I’m just going to do some rapid fire questions and then if you just want to spitball them, and then we can go through just the whole story of it.

Hunter:
Cool.

Ashley:
So, where is this property located?

Hunter:
Altoona, Pennsylvania.

Ashley:
Okay. And what is the strategy you’re doing with it?

Hunter:
Well, originally, was a long term hold rental property. But with the crazy appreciation we’ve seen over the last couple years, I’m currently listing it on the market to try the 1031 exchange into a small multi-family.

Ashley:
Okay. Cool. Yeah. We’ll definitely have to talk more about that. And what is the purchase price of the property?

Hunter:
$80,000.

Ashley:
Okay. And did you put any rehab into it and how much was that?

Hunter:
New carpet and some paint. So, very minimal. Probably like $1500 all in.

Ashley:
Okay. And how did you finance the property?

Hunter:
So, me and my dad partnered up. He put up the down payment and closing costs, which all in was about $23,000 with 20% down. So, we just used a local mortgage lender in the area.

Ashley:
And how did you find the deal?

Hunter:
With my agent on the MLS.

Ashley:
Okay. Cool. Yeah, if you just want to go into that story and maybe just start off as to maybe how your agent sent it to you and then go from there.

Hunter:
Yeah. So, finally got my dad on board and he was coming up to Altoona because my hometown’s about three and a half hours away from there. So, he was coming up. We were actually going to put some new flooring in the first property that I had bought. And I knew he was already on board. So, I had scheduled with my agent four or five houses that weekend that we were going to go tour.

Tony:
Wait, did your dad know or is this a surprise? You’re like, Hey dad, I knew you’re here for this, but let’s go check this other thing up.

Hunter:
I threw him a ball. I didn’t give him all the details until he showed up. I wanted to see his reaction. So, he showed up. And yeah, we got the floor done. I told him, I said, Hey, before you leave, we got to go look at some houses first. And I think he was like, Oh crap! He was being serious about this. So, he went and looked at him and I think it was the last house of the day we actually went and looked at. And I could just tell walking through it, my dad liked it, I liked it. And it was in a good area near the Penn State Altoona campus. And I said, This is the one we’re going to pull the trigger on. So, I think the end of the weekend, I ended up driving back home with my dad and we put in an offer. And on the way back, we had already heard back that they accepted. So, they had already did two price cuts. So, we came in at $80,000 and they accepted our offer right away.

Tony:
Can I ask one follow up question, Hunter? So, for a lot of new investors, when they see multiple price reductions, they get scared. Because I think the initial response is, Oh, there must be something wrong with this property because it’s been sitting, no one’s made an offer. And now, the sellers are getting desperate. Did you have any of those thoughts as were looking at this property? And if so, how were you able to push past those?

Hunter:
Yeah, it was always a yellow flag. I never want to look at that as a red flag. Just proceed with caution and try to figure out what might people be shying away from this house for? There was a couple issues that looked like they used to have a little bit of water in the basement. They dry locked the walls and installed some French drains around the house. And we haven’t had any issues since. So, just proceeding with caution and trying to figure out what may be deterring other people and trying to solve those problems. And if the deals still makes sense, I would still push forward. And that’s what we did.

Tony:
Ashley, what about you? How do you feel about looking for price reductions in your market?

Ashley:
Well, actually my flip right now is in a price reduction. So, if anyone wants to buy my flip in Seattle, we have reduced the price. Yeah. So, when I see a price reduction, I… Price reduction and if it’s sat on the market for a long time. But this was three months ago and for the past year before that, during that timing period. But a house wasn’t selling within a week, especially two weeks, and then they reduced the price. It was an automatic, Okay, there’s something wrong with that. But those are the houses to go after because it might not even be anything wrong with that or maybe it fell out of contract because it was something with the buyer where they couldn’t get financing, things like that. So, I think those are definitely great opportunities looking for properties with price reduction, especially if it’s like every two weeks are dropping the price. And that usually shows that they have some kind of reasoning that they want to get out of it, they’re motivated sellers. So yeah, I think that’s a great thing to look for.

Tony:
Yeah. My thoughts on the price production are that it could just be that they overpriced the property to begin with, right? It doesn’t even necessarily mean that something’s wrong with their property. It just means that the sellers were asking for more than what it was worth. And I love seeing price reductions, especially on a property that I offered on before that they rejected the offer. Because now, I can go back and say, Hey, you just reduced the price. Can we get a little bit closer? And we’ve actually closed up deals that way.
And for me, as long… Any property that we buy, we’re going to do an inspection on. I’m typically going to have my crew walk it during escrow to make sure that it fits within our rehab budget. And as long as I can do those two things, I’m going to uncover most of what I need to uncover, so that I’m still protecting myself as a buyer. So, I know a lot of you listening right now, maybe you’re shying away from the price reductions. But if the numbers still make sense, like Hunter said and you know that the deal will still be cash flow positive, then don’t be afraid to pull the trigger, right? The only caveat is if you’re in a flood zone in Shreveport, Louisiana, then do not buy the deal because there’s a good chance you might end up losing money on it. So…

Ashley:
I think there’s actually going to be quite a few price reductions for property. Especially now, where maybe people listed a month ago as interest rates spiked up and now they’re not getting what… So, if you purchase a property and flipped it like I did, and we listed it probably a $100,000 dollars less than what we had thought as we were going into the flip because the market was already changing. And then we had to do one price reduction since then. So, I think there’s definitely going to be a lot of price reductions, especially for people who thought the market wasn’t going to come down at all and priced it super high because three months ago, that’s what you could get. And now, they’re going to have to try and keep up because just the amount of people that can afford houses now have decreased. Because with the interest rates, their monthly payment for a mortgage is going to drastically change than if they got the mortgage at 3% compared to 6%. So, I think you might see a lot of price reductions now from people that have maybe listed their property a month ago.

Tony:
Cool. Sorry, I didn’t mean to take us down that, that rabbit hole there. But hopefully… Hopefully, it’s good information, man. But I just thought it was a really interesting point you made. So yeah, I just wanted to touch on that.

Ashley:
So, what else happened with the property? We are doing the deal dive, yes. So, what else happened with the property? So, you purchased it, you’re going through rehab.

Hunter:
Yeah. So, this comes back to having a really good agent, especially in your early days. She already had tenants lined up. So, we put in the new carpet. And within six days after closing, we had the tenants in there, and we’re already starting to collect rent. So… And that was my first… My first time in my dad’s first time being an actual landlord. The first property, I was still living at the time as an owner occupant. So, that was… Having those tenants already lined up from the agent, that was crucial in getting my dad over the hump and giving him the confidence to pull the trigger. So, they were pretty good tenants, that’s the first couple months. For my first couple months of being a landlord and figuring out how to compromise if you will, on certain things. And then we rented it out for another year and a half up until this past May actually.
And he was a Marine, our one tenant, and he got new orders to move somewhere else. So on short notice, he was out. And I asked my agent, I said, Hey, What do you think we could get for this property now? And she said, Probably between $130 and $150. And that was a lot more than I was expecting, especially after a year and a half. So, I was like, Holy crap! Let me go talk to my dad and see what do we want to do? And so, we decided to go the route of listing it. So, it’s currently on the market. And speaking of price reductions, full disclosure, it’s been on the market for, I think 12 days now. The first 10 days, we left it at $140. And we actually had to reduce the price to $130. So, we went a little bit higher, not anticipating the previous market flows over the last month with interest rate hikes.

Ashley:
Yeah. And that’s hard to do when the market has changed so drastically, so quickly too. Is that you’re looking at comps that sold two weeks ago, a month ago, and they’re not even relevant anymore because the people that bought that, got maybe 3.5% interest or 4%. And now, it’s just getting close to double.

Hunter:
I think since those comps that we were using, it’s been, I think one and a half points higher already. And it’s a completely different market once you start making jumps like that.

Ashley:
And you always get that thing going in the back of your mind, like, Oh geez! If I would just of got that rehab done a month earlier.

Hunter:
Right. Right.

Ashley:
They had [inaudible 00:32:19].

Tony:
Totally. Totally.

Hunter:
Yeah. I think, the wait an extra week for the carpet, and I was like, Yeah. If only we could’ve got them in a week earlier.

Ashley:
But I think that’s just like… It’s good to go through that process. And it makes you check yourself because if we both would’ve listed our properties at the top of the market and made tons of money, it’s like, Oh, okay. Here’s the excitement momentum. And then we go and do the next one. And it’s like, Whoa! The market has drastically changed, we… So, I think it’s almost good to… I’m trying to be optimistic here. Obviously, it would be way better to sell a lot more, but lesson learned that you have to watch the market. And just because you start flipping a property at month one by month six, it doesn’t mean that the property is going to sell for whatever you analyze it at month one. So, just a lesson learned. Especially when we’re going through interest rate hikes right now is, if you are flipping, be aware of what could be happening down the road too.

Tony:
Can we talk a little bit about the property management piece, Hunter? You touched on it a little bit, but you said this is your first time managing a property, your dad’s first time managing a property. A: What made you guys decide to self-manage versus hiring it out? And B: What were some of maybe the tough lessons you learned along the way that you can share with the listeners?

Hunter:
Self-manage, the reason I went there about to start off is I wanted to get the experience under my belt of being a landlord so I could somewhat understand it. And quite honestly, shout out to you guys. I got the Rent Ready code for a dollar by using the bigger package code about-

Ashley:
We love Rent Ready.

Hunter:
… Whenever that time was. So, that’s the system I use. So, I got that set up and was all in using that. And I thought it was really simple and easy to use that, to help screen the tenants and get them in there. So, it’s been successful using that so far.

Ashley:
That’s good. And are you solely doing the management or is your dad doing part of it too? Both of you or…

Hunter:
So mostly, me. I fill him in on things, but I’m the one that’s completely hands on. And the point, man, for all the communication, just another way we structured that partnership. So, it’s… Yeah, it’s been me dealing with the tenants one on. Some issues I’ve had, I’ve just trying to find a compromise. They wanted to put a security door on and I just instead bought them a simply safe security system. Because I knew that would benefit me as well as benefiting them. So, just trying to continue to solve the problems that real estate will throw you and just compromise with tenants to create that win-win.

Ashley:
That’s such a great advice. And we had had a guest on for property management, Karen, who talked about that too, is where do you draw that fine line of pleasing the tenants but also making it for the property owner feasible. And I think right there, was just a great example of, Okay. They wanted this, which… That the security door is expensive, but let’s find something that will actually be long term beneficial to both of you and provide a little bit more value than just replacing a door too.

Tony:
Can we continue on the property management piece before we jump out? Are you… I know you’re managing… You have multiple properties now. So, are you self managing all of them? And then are they all in your backyard or are some of them a little bit further away? And if so, how are you managing remotely?

Hunter:
Yeah. So, the third property we bought was in Southeastern, PA. So, the first two are still up in Altoona. So, I have some experience of having to self-manage from being three and a half hours away, still using Rent Ready for both of them and still using that same agent to rely on her and her network. So, I’m actually just signed a rental agreement with her yesterday to start tenant screening for property number one because I’m having some tenant turnover. So, just ties back into building those relationships and building the network, especially early on. So, you can lean on those people in your time of need, especially once you move away and then things might get a little tough. But in the future, I think I will switch to property management companies. Just at this point, I’m trying to maximize the cash flow and return so I can keep the snowball going and put that back into more properties.

Ashley:
Well, that’s awesome, Hunter. And congratulations on those properties and taking advantage of being able to self-manage. I think it’s scary sometimes to do… Self-manage a property that’s far away. But what do you do? Are you going in and fixing the toilet? Are you making the repairs yourself or are you calling people anyways to go and do it? So, it’s not like you need to be around. What does your maintenance model look like?

Hunter:
Yeah. So, I usually just pick up the phone and I’ll either Google or use other connections in the area with local plumbers or local handymen that can help and get to the property in times of need. And some of the relationships I built from being at Penn State, Altoona, some local friends in the area, their family owned investment properties. So, I’ve relied on him to go over and check out some properties from time to time. So, it just seems like as I’ve starting to get more and more experience, I’m always on the phone, making phone calls as real estate investors. So…

Ashley:
I think one really good thing to do if you are an investor starting out or even if you are experiencing, you haven’t done this yet is, make a contractor list, a vendor list and keep track of all of those vendors and contractors that you have used or maybe you have called and gotten quotes from them or somebody referred them, you may not even need them now. But just to keep that list so that when you are in a pinch, you need that electrician, you can go through, Okay, here’s three right here. I can call and get bids on. And instead of having to Google it every time, because I used to have to do that too all the time, and finally, made that list and it’s definitely been super beneficial. And then I can just pass that list off onto somebody that’s working with me and say, Here. Here’s the people that I use and the people that I call to.

Tony:
Actually, I’m glad you’re added that last point because that’s where we’re at in our business right now is that, as we’re adding people to our team, I had some vendors saved to my phone. Sarah had some saved in her phone. Omid had something saved in his phone. And as we’re trying to onboard this new person, we’re all airdropping contact because it’s all in one spot. So, we use monday.com. Now. Monday’s cool because you can… It’s like a C… It has some CRM contact management type functionality. So now, we’re building out our vendor database inside of monday.com. That way, no… As the team expands, there’s one golden source of information that everyone can go to, to figure out, Okay. If we need to call pest control in Joshua Tree, who do we go to? If we need to call a window repair guy in the smokey mountains, who do we go to? And it’s all one centralized location.
So for the records that are listening, obviously, the most important thing is to get started. But if you can take some of these little tidbits and really lay yourself a strong foundation when you have one or two properties, when you get to 10 or 20 properties, it’s going to be so much smoother and so much easier if you’ve can lay that strong foundation.

Ashley:
That’s exactly what we did too. It’s in monday.com and the same just the context of all the vendors and what we did it by trade. So, there’s a column for each trade and then list it out. But yeah, so if you guys need some property or project management resource, you can check out monday.com or there’s Asana, all these different project management of resources and tools that you can use to track your business. And they’re not a sponsor of the podcast at all, but we would love them to be if they like to. But it’s great when you’re getting started as building your systems and processes now because they’re also, you’ll be like me and Tony and you will be scrambling to get them into place when you are building your teams. Well, Hunter, I want to take us to our mindset segment. Is there anything, any kind of expectation you had jumping into real estate and then realize that the realty of it is that it’s not the same?

Hunter:
Yeah. I would say for me, the biggest thing, especially right now, I feel like I’m in a plateau where it would be the patience aspect. Once, it was like, bang, bang, bang, got the first three deals. And now, I’m in the phase of trying to continue to grow capital. So, I think starting out and moving quickly for myself in those early days, the mindset of thinking the snowballs can continue to move that fast, for me, was a mindset shift. I had to acquire more patience if you will.

Tony:
I think that’s a really interesting point to bring up, Hunter, because a lot of people who were entrepreneurial, I think by nature, are also somewhat impatient. And I always go back to this quote that I heard from, I think it was Jeff Bezos, and he talked about part of the reason Amazon was so successful, was because they had patient to capital. And the way he phrased it was like, If we can spend whatever a million bucks and we don’t need to see a return for 10 years, we’re going to be able to beat the person that needs to see a return in 10 months. And that was the ethos of a lot of the ways that Amazon made decisions. And obviously Amazon’s one of the most well funded companies on the planet. So, all of us can’t have that same time horizon. But I think the point of patience as a real estate investor, there is some truth to that. Because if you can be a little bit more selective, a little bit more patient with your deal making, then you can make sure you’re always going to get good deals.
So, I just love that point. Because I know, I struggled with patients a lot. Especially in my earlier 20s where I wanted the success now and I wanted to be a millionaire now and I wanted the capital now and I want all these things now. But as I’ve gotten older and I’ve matured, I’ve realized that there is a sense of patience that really does help you become a better business person.

Hunter:
And I think you had a great point there of staying patient, so you don’t make the wrong decisions on deals, that’s a great point. And that’s something that instead of just going out and trying to acquire as many doors as fast as possible, just so you can say you have X amount of doors, staying patient and making sure you’re still buying good strong cash flowing properties that are fit your investment criteria.

Tony:
So, I want to take a star Ricky Rockstar. But before we do, I have just a couple more questions for you, Hunter. Not necessarily related to your deals, but a lot of people who are listening still have day jobs, just like you do. Two questions I want to ask you. First, how have you been able to manage or what I guess tips, advice you have for people that are looking to invest in real estate while managing family, while managing a job, what tips you have for them to manage that time. And then the second, you feel you’ve become a better real estate investor because of the work you do in your day job.

Hunter:
Yeah. So, one thing I’ve implemented that’s really helped me and I think might be overlooked by people that are early on is meditation. Meditation is 100% been one of the biggest game changers for me to implement into. I try to do it every day. I don’t get around to it every day, but a few times a week being able to meditate for 10-20-30 minutes to decompress and detach from everything going on. It just helps me come back to everything, more focused and more ready to attack the issues at hand. To the question on my day job, helping my real estate investing, 100%. Being able to identify, investigate and analyze properties for Sheets has definitely given me the skillset from a networking and communications standpoint, all the way to being able to look at the numbers and then pencil things out. So, it’s definitely helped go hand in hand throughout my journey thus far.

Tony:
Yeah. Just one more follow up and we can go onto the next segment. But I think there are so many people that are very eager to leave their day jobs, not realizing that sometimes there are benefits to working that job that will help you become a real estate investor. First and I think the most obvious thing is, you’re more bankable when you have a job, it’s much easier to get approved for a loan when you have a steady W2 income. I remember the first loan that I got from my investment property, they were able to approve me on a job offer letter. I had gotten a new job offer where my salary had increased pretty significantly and all they needed was the offer. I didn’t even have the job yet. And they were able to approve me on that. So. There were definitely some benefits. But there were also other soft and more technical skills you pick up on your day job that will allow you to become a better real estate investor.
In my day job, I focused on leading people, building systems, managing processes. And believe it or not, a lot of real estate investing is leading people, building systems, managing processes. And a lot of what I learned in my W2 job, I still apply in my real estate investing business. And I really do believe that’s, what’s helped fuel a lot of the growth that we’ve seen. So, for those of you that are listening, just if you can find a way to use your day job as a resource and as a tool to help you become a better real estate investor, then getting up every morning and going to work becomes just a little bit easier.

Ashley:
Hunter, I want to take us to our rookie request line. So, this is where anybody can call in and leave us a voicemail at 18885 rookie. And we may play your question on the show for a guest to answer. So, today’s question is from Jake Apollo.

Speaker 4:
Hey guys, how’s it going? This is Jake Apollo. I’m in [inaudible 00:46:04], Montana. Sorry for the background noise. I just started was see your podcast. And I’m in a project right now with my dad. I’m going in about 150K-200K and the house can be worth between 9 and a million, 900,000 and a million dollars, all equity. And I’m wondering moving forward in real estate, what’s the best, maybe not the most crazy profit margin, but the safest and entry level step I should take, that would allow me to get into the market without over extending myself or putting myself jumping into water too deep, that will allow me to get my footing in the real estate market, whether it’s rentals or buying a tipping. Where it would be? I appreciate it. Thank you guys. Bye-bye.

Hunter:
Yeah. I would say, from my experience, the safest, the easiest way and the smoothest way for me to get into real estate investing was the owner occupant way. So, putting 3 to 5% down, living it for 12 months and then renting it out, that was a very bite sized step for me to get into real estate investing. And then partnering with my dad, going in, holding it as a long-term play. But then recognizing that given the market changes, there’s other exit strategies and having other ways to get out of the deal if you need to. So yeah, those were two of the easiest ways for me starting out.

Tony:
So, I want to take us to our next segment, which is the rookie exam. Hunter, I know you just graduated from college a few years ago, but we’re going to take you back. This is that final that you didn’t study enough for maybe, you had to pull an all night before. But these are three questions that we want to ask every investor that comes onto the show. So question number one is what’s one actionable thing a rookie should do after listening to this episode?

Hunter:
I would say, if you haven’t already, go right down your why. For me, it’s my family and my freedom. And when things get tough, when things get stressful and overwhelming because they definitely will, especially probably early on. Being able to lean back and really know your why and why you’re doing everything and putting yourself through these overwhelming or stressful situations will help you push on.

Ashley:
The next question is what is one tool, software app or system that you use in your business?

Hunter:
Rent Ready has definitely been super crucial for me from the self-managing perspective.

Ashley:
Yeah. So if you guys are self-managing and you haven’t checked out a property management software, definitely do your research and look at them, there has become so many options even just in the…. God! How long have I been investing? Eight years, maybe. Property managing, eight years. But there’s so many options out there from when I first started. So, it makes your life so much easier.

Tony:
Awesome. So, last question for you, Hunter, where do you see yourself being in five years?

Hunter:
In five years, I would like to be close to my goal of $10,000 a month in that cash flow. So, a long way to go, but that’s where I would like to be and see myself in five years.

Tony:
You talked about a little bit already, Hunter, but it does snowball, right? And as you start to accumulate more deals, it becomes a little bit easier to get the next one. And the cash flow builds on top of the cash flow. And as you build a presence for yourself in these markets, you start to get more deal flow and it all just compounds on top of each other, man. So, for you just a few years removed from college, I can totally see you far surpassing that goal over the next five years, man. And we’ll be excited to get you back on this show, on the Real Estate podcast. Once you’re crushing it like that, and we can hear how well you’ve done.

Hunter:
Well, I appreciate that. That means a lot coming for you guys. This is like a dream come true. I haven’t listened to you guys since day one. So, this is awesome.

Ashley:
Well, we’re so happy to have you.

Tony:
Always. Always. Well, before we close out, Hunter, I just want to shout out this week’s Rookie Rockstar. So, if you guys would like to get featured on the Real Estate Rookie podcast, drop a notes in mine or Ashley’s Dms, get active on the Real Estate Rookie Facebook group, we’re in the forums. But today’s Rookie Rockstar is Alexandra Nicole. And Alexandra sat just close on our second property in eight months. Last January, when I started reading about real estate investing, I never ever thought I could get one, let alone two properties that quickly. So, property one was purchased for 100 and about 30,000 dollars with 20% down, ARV was $170,000, renovations were about five grand. And they were able to [inaudible 00:50:49] this property, get back the down payment, which they used for property two. And Alexandra bought property two for about $125,000, spent four grand on the rehab and was worth $165,000. And the plan is to be able to get the down payment back for property number two, which they’ll then roll into property number three. So Alexandra, congratulations to you on the amazing success.

Ashley:
Hunter, can you let everyone know where they can find out some more information about you and possibly reach out to you?

Hunter:
Yeah. So, you can find me on Instagram @property_profits, it’s my real estate account. And then you can email me at [email protected]

Ashley:
Thank you guys so much for joining us this week. And I hope you took a ton of knowledge from Hunter. And Hunter, thank you so much for coming on to the podcast and sharing with us, your story and lots of great advice. I’m Ashley @Wealthfromrentals and he’s Tony @TonyJRobinson on Instagram. And we will be back on Saturday with a rookie reply.

Watch the Podcast Here

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In This Episode We Cover

  • Taking advantage of opportunity and finding ways to advance your career
  • Finding your “why” and reframing your obstacles 
  • How to structure partnerships with family and significant others
  • Becoming a first-time landlord and how to self-manage your rentals 
  • The importance of understanding and watching the market
  • Investing while working full-time and how to use your job to help you invest
  • And So Much More!

Links from the Show

Book Mentioned in this Show:

Connect with Hunter:

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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  • Source: https://www.biggerpockets.com/blog/rookie-219
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