7 Properties in 10 Years by Turning Equity into a Rental Portfolio

Ashley:
To be successful in real estate, you don’t need a massive portfolio. You also don’t need to buy several properties a year or have hundreds of thousands of dollars in capital to get started. Today’s guest shows the power of slowly building a portfolio of seven properties over 10 years focused on appreciation and not cashflow. This is the Real Estate Rookie podcast. I’m Ashley Care, and I’m here with Tony Jay Robinson.

Tony:
And welcome to the show where every week, three times a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. Now, today we’re going to discuss why house hacking is such an incredible option and how to do it even when you have a family, how to leverage a cash out refinance in a HELOC to scale your portfolio. And lastly, why appreciation is the focus of our guests today’s portfolio. So welcome to the show, James Ku. Super excited to have you, brother.

James:
Thank you for having me guys. I listen to you all the time. It’s a pleasure to be here,

Ashley:
James, to kind of start off the show, give us a snapshot of your life, where you’re based, what career you’re in, and then we can kind of go into your real estate journey.

James:
Sounds good. So again, my name’s James. I live in Boston, Massachusetts, born and raised locally. I’m a former teacher, now assistant principal of a big K to eight school in Boston public schools. And so yeah, I’ve got started real estate investing a long time ago and sort of slowly grown it from there. So excited to talk with you all about it.

Tony:
James, one super important question before we move on with this podcast. So I’m a southern California native. Obviously I’m a huge Lakers fan. I think the million dollar question here is are you a Boston Celtics fan?

James:
Tony, I’m really sorry for you and your life choices in some regards. Yes, I am a Celtics fan. You got that right? I’m feeling really good. Basking in my championship glow. Oh yeah,

Tony:
You guys had a good year, man. I’ll give it to you.

James:
We’re ready for another one, boy. Hey, we’re after it. No, I love my cs, so they spur me on. They inspire me with their excellence in my real estate investing too.

Ashley:
Okay, so were you a teacher when you started actually investing or were you an assistant principal at that time?

James:
Yeah, no, I was a teacher at that point. Actually, the way I got started was growing up my parents had owned a condo and that’s where I was born, that’s where we lived. And when my brother was born, that’s where we lived and then sold that condo to buy a two family and that’s where I grew up and where they still live. And so very early on I was aware that there was somebody who lived next door that they were helping pay for the house and I thought, oh, this is a great idea. And sort of growing up, one of the things that always stood out to me from my dad is that he was really disappointed that they had sold their condo. And so I was like, okay, going forward, I know I want to own property, I know I want to have something for myself, but also this makes sense numbers wise as something that could work. I’m a former math teacher, the numbers all make sense to me in terms of house hacking at that point. Didn’t know the term, but I was like, that’s what I want to get into. So that was in my second year of teaching, coming out of a master’s program, did a couple years of teaching and bought my first property a condo in Boston.

Ashley:
We kind of talked about your first strategy is house hacking and you kind of led into why you chose house hacking because you learned growing up that someone else could help pay the bills for you. So when you first started this, you went after this first property, was there a reason why at that point in time you decided now is the time for me to start investing in real estate?

James:
It was good timing. It was 2013, so we’re coming out of the crash and Boston did better than a lot of other places in that regard, but it was actually, I was looking and saw that if I was going to rent, then my now wife then girlfriend, Ivy Rose, I was looking to move closer to her and I was looking at prices and I was like, I’m going to be paying a little bit more to rent than I would to own and if I own and have a couple of roommates, I’m going to be paying a lot less money. So that’s what got me started there. It wasn’t until later that I started really taking on real estate investing as versus just home ownership. At that point it was more like I wanted to own a home. I knew that if I had some roommates it would make it more affordable. So later on is where I got more into the real estate investing bug per se.

Tony:
And was that first house act, James, was it a single family home where you just rented out the rooms or was it multifamily, duplex, triplex or whatever?

James:
Yeah, so in a lot of multifamilies in the city in Boston are triple deckers, so it’s three condos stacked right on top of each other. So it was a three bed, one bath condo that I moved into had two roommates, two friends who moved in with me and right off the bat I went from paying what my mortgage at that point would’ve been about 1700, 800, $1,800 to paying about 300 out of pocket myself. They were getting a good deal on rent, I was getting a really good deal. So it was a win-win situation and I did that for about five or so years where I had roommates and then eventually my now wife moved in as well. But so we house hacked that for a while and that really gave us a lot of flexibility, helped us do a lot of other things financially while we were getting our foundation set.

Ashley:
What was the next step after that your now wife moves in, how long did you stay there and then when did you move on to the next property?

James:
Yeah, we were in that condo for about six and a half years and a couple years before that. So we bought it in 2013 or I bought it in 2013 and then come 2019 we’d been looking for a two family for a while. Again, that was sort of anchoring back to my parents. That was the goal was like, let’s get a two family, let’s keep this single or let’s, let’s keep this condo. We’ll be in a really good spot. At that point we’d been really patient, we’d been looking on the MLS, seeing different two families that had come on for about two years. Made a couple offers but weren’t being super aggressive. And then we stumbled upon the place that we’re in now, which has a ton of space compared to a typical place in Boston. And at that point we were thinking we were going to use a home equity line of credit and somebody introduced me to a cash out refinance, had never heard of that before. So we went ahead and lined that up, did that while we were still in the condo and pretty much within a month and a half turned around and bought the two family that we live in now. And so that’s where we got a little bit more into it. And then shortly after that is when I was introduced to BiggerPockets and then we sort took off from there with more real estate investing bugs. So

Ashley:
I need you to break down the comparison there of the HELOC and the cash out refinance. And why was the cash out refinance actually better for you in this situation?

James:
So a home equity line of credit is where you’re using your house as collateral and you effectively, a line of credit is similar to a credit card where you can use it or not use it, but it’s secured by your property. And so they’re looking at your total loan to value your mortgage plus the home equity line of credit amount versus the value of the property. And that’s something you can use and then repay however you want. A cash out refinance is when you’re getting a brand new mortgage and they’re giving you a difference in cash at that point and then you’re carrying that new mortgage going forward. So I’d only known about a home equity line of credit. I was not BiggerPockets educated at that point. I’d only learned about that from my parents as well. And I thought that was sort of the only way to tap into the cash.

James:
And at that point I knew back in 2013, I bought our condo for 357,000 and I knew it was worth upper 500 600 at that point. And so I knew that there was a lot of cash sitting in there that I could do something with. I just didn’t know the way to get to it. And so that’s where at that point, as it’s still being our primary residence, doing a cash out refinance allowed us to still get a really competitive rate on a 30 year fixed rate mortgage. And so we decided at that point, let’s take the cash out versus going with a home equity line of credit where we would have to sort of pay that off over time as well just roll it up in a new mortgage instead.

Tony:
One follow up question on the difference, we get this question a lot on the rookie replies, should I heloc, should I cash out refi? And for a lot of people, at least right now, if you locked in a 3% interest rate, maybe refinancing into a six doesn’t make as much sense. But I guess when you looked at the numbers for yourself, what did you see in the refinance that made it more attractive than the heloc?

James:
Absolutely. What I saw was the interest rate was going to be about the same. We were in historically low interest rate environment, well I guess it got even lower in the pandemic, but we were in at that point a historically low interest rate environment, so we weren’t going to take a big hit on the interest rate. And I knew that when we moved out because that was the plan is we were going to do the cash out refinance while it was still our primary residence, which it wasn’t going to for long because we knew we were going to move into this new two family that we’re in process on that at that particular point, the cash we could use would be more advantageous going into that new property. Even though the condo at that point when we went to go rent, it was effectively cashflow neutral. There was no big spread there. It was effectively just paying for itself, but that was five years ago, so it’s looking better now, but at that point it was like as long as it can handle itself and allow us to continue to own and control that property, then we’re going to feel like that’s a win. And so that’s sort of how we thought about it in terms of that trade off.

Ashley:
So kind of looking forward here, house hacking has been your strategy. Have you ever gotten shiny object syndrome to go after anything else?

James:
Yeah, all the time.

Ashley:
How do you control that

James:
Right now? Not, I mean we got a couple different projects going on at this point. The big thing for me has been we went from being really patient and really sort of diligent. So like I said, the condo was about six and a half years. We’ve been in this two family for five, we’re not going anywhere. I’ve got two boys, we’re all growing up here. This is the house that they’re going to be in. But with shiny object syndrome, the ideal long distance real estate investing always really stood out to me. The numbers made sense to me and as I hit a point of thinking about more of what do I actually want to do with real estate? How can this be something that really supports us as a family now and later, that’s where we started thinking more about going long distance and that’s ultimately what we decided to do long distance with long-term rentals.

Tony:
So tell us a little bit more about that transition going from the second house hack where you’ve kind of laid your roots that you don’t want to upend and do another house hack. How did you make that transition into going long distance? I think a lot of people love the idea of investing in their own backyard, but when it turns into going somewhere that they maybe don’t know is intimately, there tends to be a little bit more fear, a little bit more hesitation around that. So maybe walk us through what steps did you take to build up the confidence to do that remotely?

James:
At that point, a friend had introduced me right after we closed on the two family to BiggerPockets and so that was fall of 2019 and I’ve listened to thousands of podcasts, read books, been in the forums, just trying to educate myself as much as possible, the comfort with long distance real estate investing, give David Green a shout out for his book on that in particular. Going through that and just understanding the steps made a lot of sense to me. Hearing case studies from other folks who are doing it, I’m like, okay, this is a thing people do. It’s not like I’m the first person to do this. And just looking at the numbers and thinking about it, those were the big things. And at that point too, having a family having, by the time we started investing long distance, we had at that point a 3-year-old and a 1-year-old.

James:
Another big thing for us is Boston is a high cost of living area. The numbers on the condo are really exciting, but it also comes with a bigger mortgage payment every month and I knew going long distance we would be at a lower price point, but still in a quality neighborhood the numbers would work out in terms of what the rent was versus the value. And so it was just looking at it and sort of thinking about the trade-offs there and deciding, you know what, that is something that we want to try and do. I talk to folks a lot about it when they hear that I invest long distance, they’re like, but you haven’t seen the house. And I’m like, I’ve been in a lot of houses as I was looking for my condo with my two family. I know I don’t know as much as an inspector.

James:
I don’t need to be there to confirm that that’s just a fact that I already have. They’re going to be there, they’re professionals and really just setting up those win-win situations where we have multiple professionals involved. We know that if we execute this successfully, everybody’s going to benefit those. The those team dynamics are things that I rely on the lot going into the long distance and also frankly, being a dad, being busy as an educator as well. Another thing is instead of me going and driving somewhere locally to walk a property and see where we’re at with a project, I can just ask somebody to take a video and send it to me. I watch the five minute video, I feel pretty good about what’s going on. So there’s efficiencies there that come in too when you do long distance while there’s, in terms of how hands-on you are, there are also benefits in terms of how hands-on you actually need to be and still getting the information that you need. So those were things that made me comfortable to think about going long distance to begin with.

Tony:
James, you laid out a lot of great points there, but the one that I want to quickly highlight is the whole inspector thing. Nationally, I talk about this a lot in the podcast as well. It’s like, especially as a new investor, how much value are you going to provide above and beyond what an experienced investor friendly real estate agent will provide? What an experienced, maybe a general contractor, if there’s rehab work that needs to be done that they’re giving to you in their bid and that an experienced property inspector will give and an appraisal report, all these different things, people going through the property. So I love to hear that. I do want to know in Boston, when you went long distance, what market did you actually land on?

James:
We went Kansas City to start. That’s where we’ve got my wife and I, we used a home equity line of credit that time to fund two long-term rentals in Kansas City. And then from there we’ve continued to scale up and grow there as well in addition to looking at my wife’s from Grand Rapids, Michigan, so that’s another market that we’re looking at now and getting active in as well.

Tony:
How did you guys land on Kansas City? What was it about that market that made you say, Hey, out of all 19,000 cities, this is the one that makes sense for us?

James:
Again, just like looking at the numbers we did go through, we got started with a turnkey provider just because we thought the extra set of eyes as we talk about building a team and having that mutual accountability would be helpful and just looking at the price to rent ratio more or less and saying, okay, we think this will make sense. We’re seeing there’s good inventory that’s both on the MLS and off that we can pay attention to here. And so that’s sort of what took us there. Honestly, Tony, at that point it was weighing multiple markets and then also sort of swimming in all this knowledge of things I could put to use. But until we actually picked the market, there was only so much we were going to do. And so I’m a big believer on you just make a choice, you go forward with it, you learn through it and that it’s not about necessarily maximizing a return or trying to get the best deal possible. It’s like if I start and continue the work there, I know I’m committed to doing this and so I know ultimately I can have things shake out the way I need them to shake out for me and my family.

Ashley:
Stay tuned after a break for the details on how James pulled equity out of his primary residence to grow his portfolio out of state. You’re hoping to invest out of state, you will need a team to help manage your properties. Go to biggerpockets.com/property manager to learn more. Okay guys, welcome back to the show. We’re joined by JA kus.

Tony:
James, if you can just really quickly define what exactly is an FHA 2 0 3 K loan because I think some people maybe know FHA, some people don’t. What is that? And I guess why were some of the contractors not so eager to work with you?

James:
The FHA parts comes from a federally, it’s a federal program. The 2 0 3 K loan is, it has to be your primary residence and you’re getting money as part of your new mortgage to do the renovations and whatever kind of scope of work you would like to do in the property to bring it up to the quality that you want it to be at. And so the reason contractors don’t particularly love that is because they, instead of getting paid any amount of money upfront, they’re getting paid on these draws after the work they’ve done is complete. That’s not how every contractor wants to work. So that’s sort of one of the hangups for folks is that there’s going to be another set of eyes. I think most contractors are fine with that, but the actual pay structure and when they’re getting paid and how they’re getting paid, those were things that I think were a hangup for a lot of the contractors we spoke with.

Ashley:
So let’s go back to the financing piece of things here. So you got your first house hack and then the second one you did the cash out refinance on your first house hack, deployed those funds. And did you just use those funds or did you get a type of loan product to purchasing that second property?

James:
Yeah, the second property was a little bit of more of a project necessarily than we knew we were getting ourselves into. We did an FHA 2 0 3 K loan, so we did roll pretty much all the cash we pulled out of the condo as the down payment. And so an FHA 2 0 3 K loan is where it rolls the renovation costs into the mortgage ultimately. And that’s another process where you’ve got sort of a third party involved with the bank in terms of paying attention to the work that’s being done. And so that was a major renovation that we’d done, the house that we moved into to really make it the home that we knew we wanted to be in. And so that’s how we sort of got the home that we wanted even though we didn’t find it that way when we first got there.

Ashley:
So before we move on to how you funded your other properties, what are some things that we need to know today about going through that loan process with that loan? What are some things you wish you would’ve known ahead of time?

James:
First thing when you start calling contractors, when you’re using that kind of loan, tell them you’re using an FHA 2 0 3 K loan. I didn’t even at that point, another example of, I didn’t even know the exact name. I thought we were doing a renovation loan and then as we got deeper, they were like, no, it’s called a 2 0 3 K loan. A lot of contractors not interested in a 2 0 3 K loan turns out. So we were scrambling to get a contractor in and get a bid and get everything approved. The big things are you have the support of somebody who comes in and gives you a full scope of work based off of what you would like to do. And then you’re vetting contractors who are giving bids off of that. There’s a draw process where that same person comes out and inspects the work and make sure it’s sort of not necessarily up to code because there’s still inspectors who are doing that, but making sure the work, if they said they put in flooring, making sure there actually is flooring put in before they’re releasing draws.

James:
And so it was definitely, we learned by doing it, I would do it again. It was stressful. I don’t know exactly how we got all the way through it, but it ended up turning our home from a four bed, two bath to a four bed, three bath with a hole renovated upstairs with a master suite that didn’t exist before, added another bathroom up there, which is really wonderful as well for having family visiting and had a rental unit on the first floor that was already in good shape, but did some minor more cosmetic things down there as well.

Ashley:
Okay. So after this house hack and you decided you wanted to go investing out of state, where did you get the funds to go and deploy into these markets?

James:
So at that point we then started using a home equity line of credit on our primary residence. So our new two family, that’s where we got the capital from. And our thinking on that was, I know this is not like a, I wouldn’t say people should do exactly what we did, but we used the home equity line of credit to fund down payments rather than a quicker turnaround on that capital. And our thinking was at that point we had the rental income from the condo, we had the rental income from downstairs. We felt like we’re in a pretty sound financial place and on our personal finances side of things and the trade-off was basically we’ve been doing all this learning about real estate investing. We’re really finding this as something that my wife and I are interested in. We see it as a hobby that makes us money and it’s something that we know we want to do long term.

James:
And so the trade off is do we wait a couple years where we’d have a down payment to buy another property long distance or do we use that home equity line of credit and just sort of use the cashflow from our portfolio overall to help pay that off. And so that was the trade off we decided to make is we went with the home equity line of credit to fund it so that we could start getting into it and start learning our lessons sooner because I knew that whether we waited another couple of years and bought our first property long distance or did it sooner, we’re going to have the same growing pains either way and just wanted to move that timeline up in terms of getting right into those growing pains and learning as much as we could as quick as we could.

Ashley:
I just want to point that out as having that option available, but making the comparison. So in reality you could be taking a chunk of money every month from your paychecks and setting it aside in a savings account, but instead of doing that, you drew off your line of credit and now you’re taking that chunk of money and you’re paying back your line of credit every month. So this definitely is a tool that can be used, but as you said, you were in a good financial position, you had your other income streams coming in plus your W2 job. So I just want to give that with a word of caution, but also a great tool of how to leverage debt to build wealth. So from that moment when you decided to buy those long-term properties, how long has it been and how much have those properties appreciated over that timeframe?

James:
So that was spring of 2022, so we’re two and a half years in Kansas City continues to be a pretty steady market, the appreciation’s five or 6% a year, I think the last couple. So properties that were, I think when we bought ’em, they’re around one 60 ish each. The two that we got now, they’re around 180, so it’s nothing crazy. They’re cash flowing a couple hundred dollars a month, they take care of themselves. We’ve had a couple sort of bigger rehab pieces or bigger repair pieces that we’ve had to do with one of the properties in particular that’s hurt it a little bit, but again, I’m looking at it as I’m holding these properties for a long time. I’m doing it to build wealth. I don’t need, the thing I need the cashflow to do is to help me hold the properties so I don’t have to sell them at the time. I don’t want to sell ’em, but I don’t need the cashflow for anything else right now. That’s just sort of a long-term play that we’re just sitting on and letting them do their things, let rent continue to increase, which it has been doing out there in Kansas City in addition to here in Boston. So just sort of playing that slow and steady game.

Tony:
James, do you have a specific cashflow number that you are shooting for right now

James:
In terms of for myself as a overall number I would like to get to, getting to somewhere like $5,000 a month would allow me some flexibility in my work life. But on each individual property, are you asking individual property?

Tony:
Both, yeah, I mean overall and I guess individual if you’ve got targets there as well.

James:
I think on the individual properties front, that’s where I want to make sure if we’re at least like a hundred to $200 at a starting point, once I’ve accounted for vacancy maintenance, CapEx, et cetera, I feel good about moving forward with that deal provided that the properties in an area that I feel good about investing in. And then overall looking to just continue to build a portfolio where we can get to a place where we can create some work flexibility for myself or my wife. My wife’s not interested in leaving teaching anytime soon. I could do for maybe not working full time, but we’ll see when we can get there. The goal is to do that in the next few years and just to sort of be again, slow and steady with getting a little bit more aggressive with some of the work that we’re doing now in terms of setting up a partnership as well.

Ashley:
James, I also bought my first property in 2013. It wasn’t a house hack, it was a duplex as an investment property, but I had never even bought a primary residence yet for myself at that point. But just over that timeframe from 2013 to 2022, so almost 10 years, I did sell a couple of the properties that I had first initially bought and just over that timeframe, some of them doubled in value and I was able to sell them and then to take that money, that capital and put it into something better. So I started off with these small little cheap properties and kind of maintained them. They had very little cashflow. It was not a lot at all, some more than others, but it was after that waiting game, I was able to sell them for way more money than I expected. And that really at that timeframe really opened my eyes to, there is a second side of investing that I want to tap into more is the appreciation because I never bought for appreciation to start, I never looked at that. It was all cashflow like I want to quit my job, I want to quit my job.

James:
No, I hear you completely, Ashley. It was actually August was a cool month. So we track our properties on Redfin and I got an email at the beginning of the month with the condo that I’ve been referencing. So it’s 11 years later and I get a little notification and it’s telling me the new value that they think of the property and it’s officially doubled in value. So it took 11 years, that’s about 6% a year, but that’s a property that helped me and my wife pay for our wedding, helped pay it off for student loans when we did our cash out, refinance helped us was the down payment to buy our two family that we live in now, which has generated a whole lot more equity that we’ve then used that equity to invest long distance with. And now we just opened up another home equity line of credit on that property as an investment property that as we are starting to transition now into thinking both about the long-term rentals but also doing some fixing flips as well. And so now we’ve got another big old chunk of money that we can access out of that same property. So my wife says it’s the gift that keeps on giving. She’s like, we’re never selling that property. I was like, we might sell it one day, but right now it’s treatment’s pretty good.

Tony:
Alright, we have to take the final break, but more from James on how he’s building his long-term wealthy real estate. Alright, let’s jump back in guys.

Ashley:
Well James, look at all the things that you were able to do just with that first property and I think that’s a great part of this episode is that you don’t have to have a large portfolio to really make a difference in your life. So I want to go back to the house hacking piece and some people listening may think that it is not possible to house hack with a family. What would your response be to that? I

James:
Think it definitely you should consult with your spouse as a starting point, but after you consult with your spouse, I think that it depends. This is all like trade-offs on comfortability versus profitability to some degree. In our case, we’ve got a two family house where we live on the second and third floors and somebody runs the first floor. And so other than having to go up an extra flight of stairs, it doesn’t cause much friction. I’m not at a point in my life with having two boys under six. I don’t know that anybody would want to share rooms in our home anyways, but we definitely wouldn’t want to take that approach. But that’s why a two family had always appealed to us is having that second unit that is a standalone unit that’s separate from our own home. And so I think it is, I know that I know how beneficial it’s been over the long run for us both when we started doing it in the condo and now doing in the two family.

James:
The rental income from downstairs pays for over half of our total monthly costs with the mortgage and it allows us to live far more cheaply for the amount of space we have in the city than we would be able to do otherwise. And so those are things where it’s not for everybody, but I do encourage anybody who’s interested in talking with me about buying a home for the first time, I’m like, you might think it’s crazy, but having a roommate having a second unit, these are things that if you do that, I think you will ultimately look up a few years from now and be very happy that you did. So I’ve encouraged some folks to go that route, but don’t put too much pressure on people, especially if that’s not the thing that they necessarily feel like they want to do.

Tony:
James, I want to get some of the details about the actual purchase. So we know that when you bought it, it was a four two, you did the renovations to turn it into really nice four three, but what was the initial purchase price and then how much did you have to invest into the rehab?

James:
Yeah, so we got it down. It came on in the summer. It was just sort of like a slow market and the property popped back up as a price adjustment and my wife was like, we should really go check it out. And at that point we’d had a son was about to turn one, it’s the middle of the dog days of summer and we’re like, sure, we’ll go check it out. We came to the property, nobody else is here. We’re looking around, we’re like, this is a ton of space. These kitchens are updated, this is a good start. And so the price had we were able to negotiate it down, we ended up paying 8 87, which is a crazy number in many markets, but for a two family in Boston, it’s not too crazy. And then with the FHA, the 2 0 3 K loan portion, our rehab was about 150,000 for the work that we did as well. And so for the down payment, we came in at sort of a random number around I think technically like 12% with the money from that cash out refinance that we brought over.

Tony:
So the total then loan balance was the, I think 8 87 plus the one 50

James:
Minus whatever. We came with a down payment at that point. So I think it was around, came to about eight 80 I think is where we started with the total balance and that’s where, just off the bat, even at that we were going to be paying about $3,000 per month I think at that point out of pocket plus the rents that we were getting from downstairs and knew that we had some different levers that we could pull as we move forward to reduce that monthly cost.

Tony:
And what is that same two family worth today?

James:
We’re around 1.3 million now, so bought it for just under nine, did some renovations. So like I said, it’s been a good equity play and we’re in a neighborhood in Boston that continues to appreciate, it’s just going to keep on marching, so we feel good about where we’re at with it.

Ashley:
James, before we wrap up here, I’m curious about the management of doing the rehab. So give us some tips and tricks that you’ve learned to managing contractors to do a $150,000 rehab.

James:
That one learning by doing again, tried to be over here about once a week at the same time we were doing, we had contracted out a lot of the more major stuff, but we were doing painting, doing things that are a little bit more cosmetic. And so just being involved, being in communication, I think that’s one of the strengths. Just thinking about as a real estate investor, what are the superpowers, what are the things that you’re particularly good at? Building really strong relationships, having clear communication and being somebody who follows up. Those are some of the things that for me, stand out as things that I know I bring to the table. And so we were fortunate that we had a contractor who mirrored a lot of that back. We went through a process of just talking to different folks we had gotten a bid from.

James:
We did get lucky to some degree in terms of picking the right person there, but just being somebody who’s present continues to talk, ask questions, but doesn’t micromanage. That’s a big thing for me with contractors is it’s like ask questions, but be clear. You’re asking it because you’re curious, not you’re actually asking to tell them. Sometimes you do have to tell contractors what to do, certainly, but I do think having more of a curiosity and an orientation to just making sure that we’re on the same page are things that are really beneficial, whether you’re doing it locally or long distance. I think those are things that really serve you well.

Ashley:
Thank you so much, Tony. Any last questions before we wrap up?

Tony:
No, I feel like we had a lot of the important things, James and I just want to echo what you said earlier about how you build confidence going long distance because for a lot of people, they live in markets that are like California, that are Boston, that are expensive to try and buy rental properties in. So building that confidence to go out of state I think is a lever that maybe more people needs to get comfortable trying to pull.

James:
I completely agree, and I think it’s also, I think a thing that sort of getting to my why a little bit in terms of the real estate investing side of things is that as you think about getting started and if you want to go forward and you find real estate interesting, it’s something you want to do. I think those are key elements to it and you can figure it out and you can build the relationships to get the things done that you want. For me personally, I never thought I was going to buy properties in Kansas City, Missouri that I’ve been to one time in my life. That wasn’t a thing that I ever thought I was going to do, but the more I learned and the more I just thought about how that could really serve my family and just having different things that have come up over the last couple of years, I lost my job unexpectedly.

James:
At one point my mom’s had some health difficulties. We had a brother-in-Law who passed away, who had young kids. Also, it’s just sort of like I was sitting there continuing to think about real estate and I’m like, might as well get started. It’s something that I want to do. It’s things that I want to invest in. I want to set my family up and if the worst thing is that I’m going to have to build relationships with some contractors and maybe fire them or I’m going to have to work through a couple real estate agents to find the right one, or I’m going to have to argue with an inspector over something that they found. It’s like those all seem pretty worth it. Given that with just a few purchases, again, I’ve gotten more active in the last couple years, but just buying one property, buying a second, those are things that fundamentally alter the financial trajectory of your family.

James:
And if you do have kids, set your kids up for something different than what they had been on before. And so for me, digging into those relationships, working through those problems with folks, dealing with whatever headaches come up, those are just things that I just can tick off my list. I know that at the end of the day I’ve got some properties under our control that are going to pay for themselves, going to set my family up, going to set my boys up and are things that are just really worth it for me to invest that time in and that those challenges are just well worth it for me.

Ashley:
James, what an insightful way to end this episode today. And I 100% agree with you. As you were talking, I was thinking about getting uncomfortable and how some things you just don’t want to do or you get that uncomfortable feeling, but if you really look at the scope of things that it really is worth it to do these different things as a real estate investor, to have that reward, to have that feeling of financial freedom to build wealth for your family or whatever your why is what you’re trying to reach is doing. These things aren’t that bad once you look at the big picture

James:
A hundred percent. And I love our tenants locally and I manage those properties myself, and every single time I get a text message from one of ’em, I’m like, oh my God, what happened now? But it’s like that’s a momentary thing and we’ll get it solved, whatever we need to do. And it is just, there are little problems if you take the big picture. They’re just little steps along the way.

Ashley:
Well, James, thank you so much for coming on to the episode today. We really appreciate it, great insight and knowledge of your investing journey. We really appreciate you taking the time to share with us today.

James:
Absolutely. Thank you both for having me.

Ashley:
If you’d like to be a part of the rookie community, make sure you join the Real Estate Rookie Facebook group. You can also find us on YouTube and make sure you are following us on your favorite podcast platform. I’m Ashley. And he’s Tony. And we’ll see you guys on the next episode of Real Estate Rookie.