How he Built a Portfolio of 75 Units in 5 Years

0:00This episode is brought to you by Indeed. Stop waiting around for the perfect candidate. Instead, use Indeed Sponsored Jobs to find the right people with the right skills fast. It's a simple way to make sure your listing is the first candidate seat. According to Indeed Data, sponsor jobs have four times more applicants than non-sponsored jobs. So go build your dream team today with Indeed. Get a $75 sponsor job credit at Indeed.com slash podcast, Terms and Conditions Apply. America leads the world in medicine development. It matters. We get new medicines first nearly three years faster. Five million Americans go to work because we make medicines here at home. And not relying on other countries keeps us safe. But China is racing to overtake us. Will we let them or will we choose to stay ahead? When America leads, America cures. Let's tell Washington to keep us in the lead. Learn how at AmericaCures.com. Paid for by Farma. Already folks, one of the things I love to do Sunday morning is bring you new faces with new

1:03stories. We've got the one and only Jason here this morning. What that's how you doing, Jason? Great. Thanks for having me, Mike. Absolutely. I love what you got behind you there. What is that behind you? Well, this is my little escape from my kids. This is our base. It was set up as a 1950s cafe style by the previous owner. I like it. So I thought I can find some peace and quiet here. There you go. There you go. Well, Jason, thank you for reaching out saying, hey, I want to do one of these conversations with you. Why don't you just kind of give us a resume and where you're at and then we'll kind of get into how we can help folks? Sure, sure. So my background primarily has been in like investing more like stocks, commodity stuff like that over the years while I was raising much for daughters. About six years ago, I go kind of headfirst into the rental business and it's been quite an experience. Some of the things I've learned along the way, some of the mistakes I've made, I try to pass on some of those insights. People come to me all the time and ask me,

2:08I do what you do. I'm mostly single family and I do have a couple of duplexes. I have about 75 houses that I've acquired in five years. So it's been quite an adventure. Not bad. So it was all running go the first and I started right when COVID was breaking out. So an interest rates were rising. So hopefully, the information that you guys bring to people beyond is just invaluable for people at different phases in their journey. And one thing I want to stress is that for people who listen to you guys, everything may not be relevant at that particular point in time. But as you evolve, as you grow, as you learn, I have these moments where I'm kind of like, well, what would Michael do? What would Matt do? And it's funny because they don't come out in the beginning. As it gets a little bit more complicated, it's okay to be a little bit of each of you

3:11at different points in your journey. For sure. And attributes and certain your portfolio has some characteristics of mine. I'm a little bit still at that growth, the end of that growth phase, and I'm starting to sort of evolve into other, but go ahead. Yeah. So I got a couple of questions. First off, you mentioned early on you were doing investments, more stocks and commodities. I'm just going to ask a commodity question because I actually have no idea where my conversations go. We obviously have this thing going on with Iran. One of the most important commodities in the world is oil. So any thoughts off the cuff of what might be going on with oil over the next week or so? So I'm not a big oil trader. I have traded it over many years, like in general, like longer term trends. Right now, I don't have a lot of insights on oil. I wouldn't feel comfortable making a recommendation. I think it's going to kind of hover between this $50 and $70 a barrel for quite some time. I don't

4:11see it breaking out of that range and I don't see it going. Let's blow that range. Yeah. I guess the one question I will ask you just having looked at it over the last decades. The one variable, really, the unknown, right? The unknown, unknowable, is can they or will they keep the straight of Harmuth basically shut down? Right now, it seems like a lot of ships have just simply anchored, waiting for, I don't know if it's permission or insight, if it's safe to go through there. But if they keep that thing locked down for any length of time, that's got to be a problem, at least for part of the world, I would think. Yeah. In the shorter midterm, it could be a bump, but I think we produce enough and there's enough. Okay. Where there's a will, there's a way. They'll find a way to sell their oil on the road. Got it. Very, very cool. Let's get back to real estate. 75 properties in five years. That says at least 15 properties a year. I'm curious, how are you financing these? Are you buying portfolios, paying cash? What was that kind of like in the beginning? Well, in the beginning, it was whatever way I could manage. So I raised four daughters for

5:16I was at home for 14 years with my daughters and I still have, and this is something where if you want to touch upon later, I'm on balancing work at life under mistakes. But knowing the beginning, I found a local bank that would let me open a portfolio. And during COVID, and after 14 years of being at home, I was right or roll. I had business experience earlier in my younger years. I'm about your age, I think I'm 54. When I was 21, I had started and failed businesses. So I had a little bit of a toughened skin. I built a company in China at the age of 21 back in 1992. It failed after a year and I started a few other ventures and they failed. I knew though that I was an entrepreneur. I left medical school to get into any. Yeah, things were bumpy for a lot of years and I'll spare you all the in between, but it took me about 10 years to get on my feet and to really pull life together. So I say to people, it's okay to fail. In fact, you need to fail. You have to fail and not to beat a dead horse. I know Mike has mentioned this before, but it's how you react to

6:20those failures, how you grow, how you learn, and how you just get up and do. And like Mike says, do the work. And yeah, I have my own interpretation of that. Do the work. It's do the work. Do whatever it takes to succeed. And sometimes it's not as brutal and as miserable as you think. You just have to make those small steps in the right direction. I have not been perfect. I've made a lot of mistakes. And I have not been always diligent. I have made mistakes on the back end of the business, on the front end of the business, on the people end of the business, but it's okay. So I started off with portfolio loan and the bank was a local bank and they were a little to my luckily during COVID, they were a little bit disorganized. So I just kept telling them, I want to buy this property. I want to buy this property. And I saw, I think what a lot of people didn't see, that housing was becoming scarce. And like you brought up Youngstown, Youngstown is a relatively blue collar city area. Some people say it's one of the poorest areas in the country, but I wouldn't be completely fooled by that. Some of the suburbs are very stable, very linear as you refer to.

7:26I mean, the owner of the 49ers lives nearby. This area has some money. But there are a lot of people struggling, which doesn't make it a challenge. My rental world versus like yours or Matt, I can't combine those kind of rents, right. Most people can't go above $1,500 or $1,500. With that being said, the growth, I utilized to exhaust the portfolios one day they called me and said after about 10 houses, we can't go. Yeah, no more, no more. I had so many wonderful deals lined up. And this comes back to where you start running into people who are naysayers, people but I was crazy. The bank called me and the vice president of this regional local bank and said, hey, we got to cut you off. I said, why? I'm doing everything right. I'm getting these rehab during COVID with a couple guys. I have one alcoholic and it's okay. It's okay to utilize health. That's not perfect. There are times where you're going to be tough to find someone who's really

8:28qualified and really fits your model of rehabbing and preparing. And it's okay. I used to get very frustrated in the beginning. Find the people with the skills you need and utilize them. And it's still a mutual benefit. But after I exhausted the portfolio loans, I went on to personal loan, like just a regular structure. When I exhausted those 10, the DSR was becoming popular. In the beginning, I did focus heavily on price, on buying right, even before I'd ever seen any channels on YouTube at this point. It's so important to buy right. It's the one thing it's very difficult to overcome. In fact, sometimes it was too a fault. I passed up many amazing deals that I was holding out over like a few thousand dollars. That's fine. I mean, that's fine. But sometimes, you know, there's that sweet spot and persistence. But from there, I think it was the stress of COVID and wanting to get out of the house. And I just ran with it. The first three

9:32years, I grew the most. And I probably should have been working on my numbers a bit more. I knew they were good deals. And I could see that the mark where the market was going. And I think, but yeah, yeah. And then I slowed down the last year or two. I have a couple of deals ongoing right now. I'm negotiating. But in the last year and a half, I think I've only done like five. Okay. So you were so definitely more active the first three years. Were you also self-managing these at the same time? I think the self-managed. I oversee the rehabs. Wow. I drive around in the evenings. And this is where it's nice to have your rentals relatively close. None of my rents are outside of a five mile radius. There you go. Five miles. Okay. But one thing I probably should have done and this kind of goes under my little mistakes. I mean, it is I probably should have not micromanaged so much. I think I was just determined to handle so much. And in the evenings, I found myself driving around checking the properties. I probably bought too many class A properties for the time period when I could have bought class B

10:36and C plus at a third of the price. Now they're renting for as almost as much as my class A properties. Oh, really? Okay. So when I drive around and I look, I'm like, I could have bought that house for 20,000. I see it for rented for 1,400. And I think this like the other mistake I made, I think in the beginning is I tried to make the houses too perfect. I think one of the videos you touched upon this that if you have a house that's clean and decent and livable and you would live there, it's okay to rent it in the beginning and get it rented. I had too many empty houses for too long. And that was hurting me because I really, it's okay. You can care. I really truly cared, but I was putting in new kitchens. Yeah. It just was just dragging me out, but, but anyway, yeah, you've really got to understand what produces the rent, what gets thing rented, especially when you're adding. You're at, you were seemingly adding a new property every month for, for a couple of weeks at one. Yeah. And you're talking eight, nine and 10%. You're not really, you know,

11:39it was, yeah, there were times where I should have been really pushing to get those rented instead of concentrating, but you'll have people tell you, oh, you should take one property and just do it right and rehab it from start to finish before you move on to the next one. And I tried to explain to people, this is not economically viable. You have to bring the votes up on all fronts. You have to, like, as long as progress is being made somewhere, that's a good day. It doesn't have to be all on one. And the other thing, well, I have people tell me, oh, why don't you get a system in place? Why don't you just, like, get a computer program and organize the thing? And I'm like, this isn't an inventory business. Yeah. These are people. This is people business. You just don't log it into your computer and make it all neat and tidy. You know, systems are important. I wish I had more systems in place in the beginning, even simple ones are helpful, but they have to be customized to your needs and your situation. Yeah, give me, give me some numbers. Like, I want to, I want to, I want to dig into that, you bought Class A and you should have bought Class B. What,

12:43what was a Class A purchase? And then what, what have a, a Class B been around the same time? I mean, how big a delta was there? Absolutely. Good question. So in Poland, Ohio, which is a really nice suburb, very like old school vibe, you know, just a nice town. I was buying homes for 90 to 180. Okay. A few in the 200s. And then I rent a couple of my own personal homes over 4,000. But those all eventually, those, those don't fit them all. Right. Where you could go down the road in the same zip code, but in over the youngstown city limit. And you could buy houses for 20 to 50,000 all day long. Oh, wow. So you're, yeah, that does a six figure spread all day long. And I told people that I knew my realtor, I told them, look, this area is growing. Families are moving in here. It's a nice area. It's separated from the main part of the city by the main highway. It's like a, it's like a Poland on the way up. Yeah, a little pocket, a little unique pocket. Exactly.

13:47And even the town near that struggles Ohio, houses you can buy for 15, 20,000 that just needed modest rehabbing. And they're almost as much as Poland today. Wow. It's just insane. But you know, you don't know. Back then, I had my account telling me, Jason, be careful. I'm worried. I'm worried that you're going to collapse. I can see why. I mean, it's real. It's 15 a year, 20 a year. That's that's not common. But as you look around and you see people returning to the area who have lived in other places and you see people looking and you see what's happening, you know, with property in the dollar and you can't build a house. And this comes to like the doom. So the dooms. I know you rag on the dooms a lot. And I do too. When I talk to people, but I think it's a more complex picture than than like just yeah, they they're just scare tactics. I think in some circumstances, in some regions, they're insights maybe applicable at some price levels at some price points. I like like anything. I think dooms like any creative exercise has a kernel of truth in there.

14:50But I believe the purpose of a doomer is to produce negative content for clicks to pay their rent. So I will not let dooms off the hook. I think they're evil people at their core. But yes, there's certainly a kernel of truth nuance positioning for sure. But if you lean in to be a doomer every day for the last three years, you're just evil in my book. I mean, you've or just, you know, falling in love with your own narrative, I think is basically and trying to make some of them. They got to pay their rent somehow, because they're not. Yeah, you know, they might be trying their best to make their narrative, but yeah, that's okay. So let's get back to the 70. So and then you mentioned, you're slowing down a little bit. So you know, actually, I want to go back to raising four daughters. I only had one. I could not imagine four. Like what are their age gaps? So I have I have a 18 and a 17 and then I have a 10 and a 12. So you got two little two two. Yeah, that's four daughters. Whoo. How was that? You know, I've enjoyed, you know, it's it's been hard as

15:54as a as a male being a little bit older. But I think when you know, I have a wonderful beautiful wife. She's originally from Egypt. Way too beautiful for me. But I lucked out. Yeah. And we got married when I was 33. So I was a little bit. I had already had a lot of setbacks in life where I think I was at a good place. I had been a nanny when I was younger. I had babies. I don't like, you know, I enjoyed I loved fatherhood and I still my two youngest are both black belt instructors at the low high. I mean, I love spending time with them and doing stuff. I just I think earlier during when when I started all this on 2020, 2019, I think I should have learned to separate maybe the the business aspect of it. The first two years are just like we just there were times during COVID. I was literally scrubbing a floor before someone was moving in. I had COVID. I was dripping sweat. And I almost I had tears in my eyes. I was like, what have I done? Why am I away from my family? My wife was at COVID and then she was it was just a really, but you know what,

17:00you do what you need to do. You just do what you need to do. And there were times now where sometimes I feel like, why am I doing this? But just remember to be thankful that you have the opportunity. Yeah. If you default back to that position when you're feeling down or you're feeling like it's too hard, just think I'm thankful to have this opportunity. And and I have this ability to grow and evolve with this opportunity. So we can be in a dad excited challenges. My right now though, you know, and this comes back to commitment. My wife has been working in North Carolina for the last two years and we go back and forth. I'm still here wrapping up the last eight or 10 houses. And this is a part of the commitment of getting things to that optimization phase and we drive forth, but it hasn't been easy. And I've been researching the North Carolina market the last two years. I'm going to have some ideas to kind of evolve, maybe 10, 30 from out of some of these. And it just it's just insane. The high country, what they get near like boom. I don't know if you're familiar with AppState and that area. Oh, three thousand dollars for

18:04something I would rent for 12 hundred bucks. Oh, wow. Yeah. Just an entirely different market. Yeah. I don't know what people do there, but I do have some ideas for there. Nice. So yeah, let's talk. So again, you got the portfolio. You're tightening it up. You're cleaning it up. You're optimizing now. Sounds like a move is in the future. You're going to go from Ohio to where your wife is. It sounds like that might be coming in the next year or so. Is that kind of the next plan? And then, you know, do this again over there? So eventually we'll be down there full time. You know, Poland's my home. I'll always come back, you know, the young seminary of here and there. But I do. I have been training. This comes back to not doing everything yourself. I have a great young man, young in his 40s. I get it. I get it. Everybody's young. Yes. You know, I've learned to let go in the last eight, 10 months. I've been trained. I've shown them all the properties. He's taken the lead over some of my misfits that I've been working with. Like, you know, you just got to make lemonade with

19:04the lemon you have. You know, my I have an over gentlemen who could fix anything, build anything. I mean, commercial resident, but he, you know, he's a drinker. And I provide housing for him. But, you know, you just got to, you know, he's a great asset. And if you set your expectations at a reasonable level, you can find good people who just need help and want to contribute, want to be productive. So I will eventually take my way down there. I also have someone now who takes phone calls for emergency repairs. Oh, that's good. I focus on the rehab. I meet all tenants. I handle all rent. I plan everything. I still manage that end of the business. And I have my realtor. He handles phone calls for like, he does evictions. And that's another thing. I was way too nice in the beginning. I would give people opportunities. And we've all done that, you know, a people that just, it seems like it rarely works out. Now it has worked out. And that kind of leads to another thought, don't let this business change you as a person. Yeah, you can get

20:08pretty jaded. Yeah. This is something that has that that that can become, you know, it can change you. And it's important to separate your personal emotions, you know, and just I kind of explain it on myself, you know, I let them in. And, you know, you can't always know, you know, but you don't want to be soft. Yeah. Yeah. Extreme ownership is a big deal in my book. It's one of my top three books. At the end of the day, I always want to assume it's my responsibility because then I have power over it. If I blame other people, I've lost all power and I won't do that. Exactly. That's it. That's probably a very good, you know, based on. I like it. Well, what would be our closing advice? We've got five minutes or so left here. What's some advice we can give people who are maybe at the beginning of this journey? What do you want to, what, what should they hear? Sure. Sure. I would say most importantly, kind of define where it is you're starting be your own worst critic. Always judge yourself. Always question yourself. Why am I doing this? But when you do

21:08reach a point of, of like confirmation, don't be afraid to act. At some point, you need to act. And it will not be perfect. It, it may be a little clumsy. And that's, that's perfectly fine. Don't be too hard on yourself. Don't beat yourself up all the time. Take what you learn and just move forward with it. A few of the things I mentioned already, you know, where we touch upon some of this mistakes, balance your life, but do have some other of a goal. And, you know, it's amazing. There's been a lot of times where I just lacked of. I'm honest. There's been times where I just took the kids and went up to Lake Erie. There's been a lot of times I should have been out doing things, but you know what? Things still get done. Progress still happens. You don't have to be on it 24, seven. But yeah, you know, don't overpay, like Mike has always said, and utilize the tools from a red date. And, and if you feel like, well, I'm not that big or I don't have Mike's low interest raise. Yes, you have very low interest rates, which are very jealous. But you know, times are getting

22:08better. Interest rates are dropping. So for five years, I made nothing. But this was the commitment I put myself into and I had that end goal. I knew Sunday, race could drop. Yeah. Sunday, you know, it will get better. And, and that day is coming. So now I think it's a very good time to be entering just by at the right price and be patient. Yeah. I mean, the other, the other option, I'm just going to guess here. If you wanted, I'm not saying you're going to do this, but if you wanted, you probably could look at your portfolio and go, here are 20 homes. I'll sell. And then I'll pay off everything else, right? Well, my tax practice or that with, yeah, it's, but it's an option. Well, what I'm going to do, I'm going to 1031. And I'm looking at, of course, like, not the flex spaces that you see like that guy advertising, but what I've noticed is there's a big need for people to have a place to just go and have a boat, have a, have a work car, have, I mean, a project car. Just to go hang out. And I find, I stopped in North Carolina. I saw these like little metal buildings,

23:10and I stopped, I thought, I need a space for some of my equipment. I stopped and I said, do you guys, any of these like going to come for rent? And the guy laughed at me. He's like, we have a three year waiting list. Oh, there you go. Metal buildings that get more rent than my homes. There you go. The reason they need, I guess what I'm saying is ideas can pop up. We at least expect it. So be open. Oh, I love that. I love this. It's been a fun conversation. What are your closing thoughts as we wrap this up? And thanks again for doing this. No, I've thoroughly enjoyed. I'm a little starstruck, you know, and I'm not easily starstruck. I mean, I used to, when I lived in Southern Ohio, there were some pretty famous people I knew. And it's been a real pleasure meeting you. I listen to you. You're doing something. You're doing great for these people, for all these people who are getting into it. And the people, and that's, I just joined school. So I'm hoping to be a part of, you know, I know. Yeah, I think you would be a very, very good addition. Thank you for doing that. Well, I hope to learn too. There's always, there's always, always a lot to learn. And I'm looking forward to learning from some of your, your other experts who

24:12have been doing it. And like, like Chad Carson, just wonderful people. But Lauren, keep learning. Yeah. The other thing you could do if you're in school, there's that little map tab or, well, I guess it's a tab. Click on it. You can see who's in your area too. Just a little helpful advice. Yeah, people did mention that they were local. That would be, I've been so busy getting these last properties wrapped up. It's just been insane. But that's, I want to be able to glide a little bit like coming. You're pretty close, I think. I think you're almost there. So Jason, you're amazing, buddy. Thanks again for doing this. Have a great Sunday. Thank you. Take care.