The SFR Show

Emil:

Hey everyone. Welcome back for another episode of The Remote Real Estate Investor. My name is Emil Shour. And I'm joined by my lovely co hosts,

Tom:

Tom Schneider,

Michael:

and Michael album.

Emil:

And today we're going to be talking about year end review. So we're going to look back at the 2020 goals we set for our real estate businesses at the beginning of the year. We're going to analyze what did we achieve from that we're also going to look at how did we pivot? You know, things change throughout the year? How did we pivot? What else did we do in our businesses, and then also look into 2021. And our goal here is to help you guys you know, as you're thinking through your strategy, hopefully help you guys come up with what that can look like and set some lofty goals. So let's hop in this episode.

Alright guys, so we're gonna be talking 2020 goals, what did we achieve? How did we pivot? What else do we do? And then looking in the future for what do we have set up for ourselves for 2021 goals? And I think the way we decided to structure this episode is we're gonna do hotseat. Normally, on episodes, we kind of talk about a topic and we go round robin in a circle. I think this one, each of us will sit in the hot seat, go through these kind of three parts of the questions. And then we'll move on to the next person in the hot seat. So any volunteers who wants to go first?

Michael:

Let's put let's put grill marks on Tom.

Emil:

Let's do it, dude.

Tom:

Let's do it! Sssssssssssssss sizzle.

Emil:

Tom Schneider.

Michael:

Hey, yeah. Okay, Tom, what was your goal starting 2020, or goals de parentheses around the “s”.

Tom:

I knew that 2020 was going to be a slower year on that side of my business. So wife delivered first baby in November of 2019 had a pretty massive house project, adding a bathroom on. So going into it, I knew it was sort of maintenance time, just maintain and possibly do some acquisitions near the end of q4, it was a definitely a quieter year, with the new rates that are available for financing. I was hoping to do a little bit more within the end of the year by possibly for refinancing some of the properties, I need to do a little bit of work on my insurance. I didn't get to some of those different items, but it's just like a weirdly busy time in my life with new baby in big projects on the homestead. So all in all, a pretty quiet year on the investing front. But you know, throughout all this, the portfolio performed. It just kept moving on not a lot of growth within it. But it was a known slow year within my personal portfolio.

Michael:

Have you done any refinances on the investment stuff? Or on your personal

Tom:

I did some refinancing not in 2020. And I actually I did do refinancing on my personal so you're right Michael, not a total do nothing kind of a year so did quite a bit, I had a key lock on my personal closed it out to refinance, finished the refinance and reopen the HELOC. So sort of a refresh on that side of my finances, which is all kind of tied together, which and it's a there's a huge queue, there's a huge line of people doing refinancing. So it took them honestly way longer than I was expecting to and like a little bit more work than I was expecting to. So I guess you're right, Michael, it wasn't a total do nothing. It was moving some of the personal finance stuff around and hopefully be set up for a big 2021.

Michael:

And so on the investment side of refinancing, let's get personal here. Why didn't you refinance any of the investment properties with rates being as low as they are?

Tom:

Well, I view as being a little bit too conservative. Usually banks don't want you doing like too many transactions or like new refinances at the same time. And the most important one that I had to get done was related to my personal so I don't I'm not going to be too hard on myself just because I had the other stuff going on. But where I definitely could have done more was redoing my property insurance that I have. That's something that's been on my list to do that I just kind of keep putting on the backburner, and it's okay. And that it's not something that you know, you necessarily need to lose sleep over and doing right away and re optimizing your property insurance that you have. But something definitely I don't want to put off too much longer. But that was something I you know, looking back on 2020 is like darn I should have just gotten that done because it's those things once you set it, you forget it what happened to me the mistake that I made is I was using this insurance broker and they had terrible communications with my lender.

So I paid to like re up my insurance. My insurance didn't do the proper like notification to my lender. And then my lender went and bought insurance for me. And then my property insurance company that I bought that originally they sent me back the money that I paid for them for the insurance like this is just totally me just kind of dropping the ball a little bit. I mean, I didn't Double pay for insurance, but I'm definitely paying way more than I should right now with some crummy insurance that my lender bought me. So this is my, like, bad Tom, I'm making myself accountable by throwing it out there, go fix my insurance. And Nick, who's a member of the Academy, who is also has some expertise in insurance, I owe you a call, we got a we got to connect?

Michael:

Well, I don't think you should be too harsh on yourself. But you feel like you didn't do a whole lot in the investment side of the refinances. There's only so many hours in a day, and everyone's got priorities. And if I had to guess I would say that the refinancing of the loan on your primary is probably more impactful than refinancing on those investment properties. And, you know, I don't see rates going anywhere in the next couple months, the near immediate future. So you could probably get to those in 2021 if you wanted to, anyhow,

Tom:

Yeah. You know, and the rates aren't that bad. I mean, the ones that I have that I was looking at redoing their low 4% I mean, I guess I could get to from what I hear like sub three, which makes it worth it. Mm hmm. Think probably 2020 at least read refine.

Emil:

Come on. This is this is the hot seat. We got to grill Tom here? Yeah. Why do you think you didn't get all this stuff done that you'd want to do? I know, I know. life gets in the way. But what do you think like in 2021? What can you do differently to like, make sure those things get done?

Tom:

I just I need to just not be lazy about I think I got a little lazy about it. Yeah, the hard thing about grilling me is I'll just like put my hand on the grill and precedent. Yeah.

Michael:

I love it. I love it.

Tom:

Give it to me. No, I think acquisition stuff I think turned back on and 2021. But the falling short, is definitely just getting some of the insurance stuff because right now, I'm probably paying like a couple extra 100 or 200 bucks a month, but it's just lighting money on fire like stupid, stupid, Tom. And another coverage I need. Okay. Take it easy talk don't grow too hard. No.

Emil:

Michael’s like, it’s Okay. Grill him,

Tom:

So all in all, kind of a boring year, but I didn't take care of the important boring stuff. And you know what, but you did or did not take care of the employee? Didn't I mean, enough, you know, but I didn't take care of the playing a little bit of offense on the insurance side. But that's why they make tomorrow, so.

Michael:

yeah, I mean, the good thing about insurance is that you don't have to restructure the entire portfolio. Yeah, you can just go redo that one. And that's like, like an hour's worth of work.

Tom:

Yeah. You know, honestly, like, I think, dude, this is going somewhere, this is going somewhere, something that that whole communication breakdown between the insurance company and the lender, kind of like made me I don't know if nervous is the right word. But there's like, just concerns of me of like, you know, making sure that that doesn't happen again, not that it was like a huge deal, but I don't know it. Do you have any thoughts on that? You guys on changing your insurance kind of mid flight and making sure you're not double paying? And

Michael:

Did you crack some skulls? Because of that? I mean, it sounds like I mean, obviously, the buck stops with you as the owner. But it sounds like the ball was dropped at multiple stages as well.

Tom:

I didn't crack skulls, I didn't crack skulls, and maybe I just need to be like a little bit more of like, a ballbuster. But you know, skull cracker. Michael, what would you do with your advice right now?

Michael:

Oh, I would cancel that insurance today. Yeah, I would go get on the phone with an insurance Rep. Either somebody I knew or Nick from the Academy, talk to somebody and just go place new insurance because that's totally unacceptable, and frustrating, right? The lender doesn't really care how much it costs you. They're covering their behind because they've got the loan. But so you know what you need for your insurance, you can send an existing declaration page of a policy that you'd like to an agent, you know, wherever that property is, I just get it done and cancel the other one.

Tom:

Just do it. Okay, screw it, I'm going to do that in 2020. This episode is honestly bearing some fruit. And I think the other thing that's kind of a mental block for me is knowing that I don't have to get onto a phone tree to talk to the mortgage company and like, okay, just light an hour of my time on fire. I'm working my way through the phone tree and in talking to who I need to from the mortgage company to let them know like, Hey, I have a new, any thoughts to…

Michael:

Your insurance person should do it,

Tom:

They'll do it all?

Michael:

All you need is the contact for that insurance company that they've placed for you. And you can call and cancel and then show proof of your binder that your new policy is bound.

Tom:

Will the lender then send me like whatever escrow that they have? Yeah. So we'll get a check from them.

Michael:

They should Okay,

Emil:

I just did this. I don't know if the lender will but like your insurance company, right. So let's say you're halfway through your policy costs $500 a year, whatever, just use easy math. If you're halfway through, they'll send you a check for that 250 prorated and that's left. That's I'll talk about it when I'm in the hot seat, but I've just recently did this and that's what's been going on for me. I get it from the insurance company and prorated amount.

Tom:

Ooh, I'm gonna take care of this. Hopefully by the time this is published,

Emil:

Do it. We still got time in 2020.

Tom:

Yeah, right I really am like super juiced about this. Okay, good. Yeah, I'm gonna take care of it.

Michael:

I guess Tom, you can send me all nice commission checks directly to us. 10% fee, easy,

Tom:

Perfect.

Emil:

So So what's what's lined up for 2021? You're gonna get that done in 2020. So what do you think is lined up for 2021

Tom:

I think I want to add kind of get back on the two units. One, two, I'm going to have this this big HELOC available…

Emil:

Make it specific which one, one or two?

Tom:

Two. Yeah, making it to…

Michael:

You heard it from the horse's mouth everybody.

Tom:

Yeah, going to 2.

Michael:

This time next year, we're going to look back and see if Tom has his two units.

Tom:

Two units and two refinances. That's what I’ll do.

Michael:

Whoo. All right.

Tom:

If I am refinancing though, I can pull a little money out. Okay. Three. All right, And HELOC? Okay, that's it. That's it. That's 2021 three units and 2 refinances.

Emil:

Solid.

Tom:

Awesome, and it feels good putting it out there.

Emil:

And now it's no it's like real public. It's not just like you shared it with a friend like it's it lives on the internet now. So

Michael:

Right, this is recorded, dude. All right, man.

Tom:

Yep.

Pierre:

Do you want to do one of those little equity challenges Tom? where you give me like $1,000. And if you don't get it done you don’t get it back?

Michael:

That's so good. Yeah, Pierre will be your escrow account. If I ask.

Pierre:

Yeah, there you go.

Michael:

And Tom tells you like, wait, Pierre, I need that 1000 ago by the third unit. So I need that in the down payment.

Tom:

I like it. All right. I feel good, guys.

Michael:

If you feel good. We feel good.

Tom:

Good. Good. Good. Good. Anything else in the hotseat, or are we ready to mix it up?

Michael:

Let's mix it up. Starting to stink out there.

Tom:

All right.

Michael:

It’s like burning flesh.

Tom:

Michael,

Michael:

Let's do it.

Tom;

You’re in the hot seat.

Michael:

Is it gas or charcoal?

Tom:

It is oil baby.

Emil:

He's falling around on fire and running around.

Tom:

Alright, 2020 What did you What did you want to get to? What do you What did you want to get done?

Michael:

Oh, man. So 2020 I had really high hopes Wait, dude, I'm like losing track of the days and years here. So okay, so 2020 started off crazy. I had two fires in my in a commercial mixed use building that I'm redeveloping converting commercial space and residential space that happened in the end of 2019. And so I was really hopeful and optimistic that that project was going to get done here in 2020, because we started it in late late, late 2018, early 2019. And so that's just been going on dragging, dragging, dragging. So the problem was that, because of these fires, I had to go work with a public adjuster to get the insurance to pay what they owed. And that just just been drugged out, like unbelievably long. And so I had to pause work on the building because they had to do investigations, and the whole building was affected. So we couldn't disturb any of the evidence and the whole building. So it's just a whole frickin mess. So by 2020 got massively derailed. In that sense of the word.

Good news. on another project I had, I had a kind of contingent loan refinance, I was able to pull cash out for rehab I did. And they were going to give me draws for the refinance cash as those units got leased up. And so we got all four of those units leased up. So I was able to grab all that cash out from a refinance I did, which was very exciting. Then I also wanted to add a few more units to the portfolio, but kind of like Tom, I was just so busy kind of putting out other fires kind of pun intended, so to speak, that there just wasn't a whole lot on the acquisition side. So it was just kind of managing the ongoing stuff. And so I wanted to finish up a couple other rehabs that I was able to get done in 2020. So that's super exciting. Of course, they took longer and were more expensive than anyone anticipated, but dealt with a crooked contractor and had to fire some people and hire some people. So 2020 was a whirlwind to say the least,

Emil:

I'm surprised we've all talked on the podcast and off the podcast. I'm surprised that part of your 2020 was to add units, given how much stuff you already had going on. That is shocking to me that you…

Michael:

Yeah, well. So I mean, part of it was to because I had this great vision for how on the rails things were going to be operating. And then that immediately got debunked and it was like Ozzy Osbourne's Crazy Train. And I was like, Oh, well, like we got to pump the brakes here a little bit. I got to focus on what's going on, restructure some things, get some things reined in. And so that was able to get a lot of that done, which was super exciting. But still a long way off on that big project. But wrapping up, have put the bow on several others, which is very exciting.

Emil:

I don't even think you've mentioned your international project and all that either.

Tom;

Oh, yeah, I totally spaced on that. So last year, my wife and I were traveling for the better part of the year. And then in the beginning of 2020. We're also traveling, and then came home in like April because a COVID. So we are working on we made it a 2020 goal to get our Portuguese permanent resident status. And so that's via an investment in Portugal. So we purchased an investment property in Portugal in 2020, which is very exciting. And then we're in the process of flipping an investment property in Portugal as well. And so that'll happen in 2021 as the borders reopen in Europe, and people are traveling more because it's tough to sell a kind of high end unit without folks traveling there. So that'll likely be in the q2 or beginning of q3 and 2021. But yeah, so we were able to get all paperwork signed in and submitted to the Portuguese government, which is super exciting. So now we're just waiting on confirmation that they have everything they need. And then we can of course, pay more fees and taxes to the government, and hopefully get our status and then we'll need to travel to Portugal at some point 2021 to do some paperwork.

Emil:

Hot Dang. So pretty slow year for you is what you're saying overall?

Michael:

Yeah, pretty typical. I hope 2021 is more exciting.

Emil:

What do you think was the obviously a lot of stuff happen? What do you think were a couple, or just maybe the top learning for you that you want to take in the 2021.

Michael:

I think one of the biggest takeaways for me is how amazing public adjusters can be when it comes to dealing with insurance claims. Because I came from the industry, I used to work for a really reputable property insurance company in the commercial sector. And so I never had experience in public adjusters that wasn't something that I was ever exposed to, because it was never a thing that we dealt with in our business. So I haven't been on the other side. Now the user side, the insurance side, that was a real eye opener and about how powerless we as the little people can feel going up against these massive insurance companies. And so just knowing that there is help available, there are people and professionals out there that can be your voice that can help you and really go toe to toe with the insurance company on your behalf. And so I think a big takeaway is to reach out and get help sooner than you think you might need it. Because this whole process could have been expedited a little bit.

I mean, the process itself takes a while. But I kind of waited a long time to do it, because I didn't think it was going to go south. But it did, it went really south. The other takeaway that I have is that, you know, I was managing this whole process from Nicaragua, and Costa Rica, when it first happened. And so I mean, this whole remote investing thing, you can do it in the States, you can do it outside the states, a phone connection, internet connection is really all you need. Because what's the difference? If you're in the states versus somewhere, not in the States, timezone is the biggest difference. So if you're comfortable with the remote thing, I think the possibilities are limitless. Another big takeaway I have is don't spread yourself too thin. And it's one of those things that you're not going to realize that you're spread too thin until you are and so don't try to bite off more than you can chew because it's really attractive or sexy or exciting, even though it might be all of those things. Because it I mean, I definitely like my mental health took a big hit in 2020, just from juggling all this stuff. And so I had a lot of sleepless nights and stressed moments from man, how am I gonna make this come together? And how am I gonna make sure I get this project done. So just don't bite off more than you can chew. And always, always, always overestimate the time and cost of projects because they always go over both in terms of time and budget.

Tom:

How about 2021? Sorry, a meal, we're adding one more, how about looking forward to 2021?

Michael:

2021, I am highly confident we're going to get that big redevelopment project wrapped up and finished, I'm also going to be selling a property that I was looking to sell in 2020. But that didn't come to fruition. So we're gonna be lowering the price a little bit, getting it back on the market. And then I'm going to be tying up two refinances that I have just started now one is a commercial refinance on a triplex. And then another is a refinance conventional refinance on an investment condo that I own that I was kicking the idea around of selling, but I'm able to take out a bunch of cash and get the interest rate significantly lower. So I'm toying with a couple different ideas. But that's what I've got lined up for. For 2021. Oh, and then I also am doing a loan modification on a commercial portfolio loan I have that's two properties. I went and got a competitive bid to have it refinance elsewhere, and then went back the original lender and said, Hey, can you beat this? And they said, Yeah, sure. So

Tom:

Oh, nice.

Michael:

I'm really excited about that

Emil:

Awesome, man. So no new acquisition plans for you more. So just like getting everything,

Michael:

I take that back. So I've got a couple of cash partners that want to get into the real estate space that have reached out to me and asked if I would help him do a couple of deals. So I'll be either 50% or a minority partner looking to secure a deal and then get it rehabbed or refinance and kind of be running point on that for some folks are international and some folks who don't have any investing experience so they want a helping hand in how to do it. So it's almost like a syndication but not really just because folks have approached me and said, Hey, take my money. Can you do real estate for me? And I said, Yeah, sure. So we'll probably add, I don't know anywhere between 10 to 15 units in in 2021 using OPM.

Emil:

Nice. What is OPM?

Michael:

Other people's money?

Emil:

Just in case Yeah,

Michael:

yeah, no, it's great question. Ah, yeah, that's what's that's what's on tap guys.

Emil:

I'm looking forward to you having a calmer 2021 and getting things done.

Michael:

Dude. Makes, makes two of  us makes to us. Thank you.

Emil:

I get stressed out just hearing about all the stuff you're doing

Michael;

Well, like Tom said, it's kind of nice to put it out there it's almost like a therapy session you guys can invoice me, bill my insurance.

Emil:

Yep. I'm gonna bill you for you know, listening to all that and carrying the brunt of it.

Michael:

Laden you with all my…

Emil:

Exactly.

Michael:

All right, Emil, ready to step up to the plate.

Emil:

Let’s do it baby.

Michael:

All right, sizzle sizzle 2020 in the rearview mirror. What did it look like from the beginning? and What did it look like at the end?

Emil:

Yes. So my goal was really simple. I think I mentioned it early on, when we started the podcast, my goal is to buy two properties in 2021 or 2020. on that front, we ended up buying one property. You know, it's funny, I think these acquisition goals, they're kind of like this double edged sword where you're like, Alright, I want to buy x properties. But it's like, you should never just buy properties to hit a number. It should be like, if you find the right things, buy them. Right. So that was kind of the case for us. We found one property we liked. We made offers on a bunch of others, but haven't closed anything else that we've liked. I actually just submitted an offer on a 12 unit on Friday that I was really excited about, but we lost on that one. So that was a bummer. But I just I wrote down some of the other things we got done.

So we bought this property. It was a small multifamily triplex. So that was one of my goals was to buy multifamily this year. So we bought that tribe.

Michael:

Welcome to the dark side.

Emil:

Ah, yeah, well, we'll see if, if I'm here to stay, but we're testing it.

Tom:

You're dipping your toe!

Emil:

Exactly. Toe dipping. I knew that buying two properties, just saving money was going to be tough. So at the beginning of the year, in an attempt to put some money back in our pockets, to buy some multifamily to test that out and to consolidate because we were in just several markets. And I you know, I think I've expressed that I'm not a huge fan of that strategy anymore. I'm trying to consolidate over time and really focus on like one market. So I end up selling a rental property we own in Memphis basically broke even on that when you factor in cash flow and turn costs and all that stuff to sell it but put some money back in our pocket to be able to go out and try to hit that two new properties goal, refight our primary twice because at the beginning of the year rates dropped a good amount and we're like, Oh, sweet, we got to do it dropped our payment a couple 100 bucks. And then like two months ago, they dropped sub 3% and it lowered you know, our monthly payment, a couple $100.

More so to revise in one year, which is interesting. We did a cash out refi on our single family home in Jacksonville, which I think I've talked about that one on an episode ended up appraising for way less but because it lowered the rate, put some cash in our pocket, nothing huge. I think it was like 6000 bucks, but the payment didn't change at all because the rate lowered so I was like, Okay, why not, I just started the process of doing a cashout refi on our Indianapolis single family that one I'm pretty confident has appreciated enough where we'll get 80 to 90% of our original investment out and the rate has dropped enough where I think our monthly payment changes 510 bucks a month. So it's like a total no brainer with rates being as low as they are I end up getting new insurance on the st louis and the Indianapolis single family and just because like Tom I think in doing these episodes with insurance and Michael having the background that he does in insurance just realizing that I was under covered and paying too much so we end up getting more coverage the the rates actually ended up seeing the same but we just got much better coverage. So feeling much better about those properties. And then I had an umbrella policy on one of our properties and cancelled that and got a new umbrella policy for the entire portfolio in our primary and it wasn't much more than what I was paying for the original umbrella so…

Michael:

And did you add your auto on that?

Emil:

I did not add auto it made it jump a lot huh for me personally and like doubled the cost hopefully I'm not kicking myself in the years.

Michael:

right right

Emil:

Don't put it out there Michael, you insurance whatever.

Michael:

Hey, man, we're grilling up grilled Emil sandwiches here man.

Emil:

Michael the insurance. Do you have everything in your life insured you're just you're just setting yourself up?

Michael:

Man you have to you have to. It's funny coming from the pessimist, the self proclaimed pessimist you should be the one that's insuring everything.

Emil:

We don't have enough time on this episode. To go through my silly logic of why I do it but you know what? Why don’t you go insure that mustache okay?

Michael:

There's not enough coverage in the world to insure this mustache man!

Emil:

Sir, your mustache is not full enough for us to offer you coverage.

Michael:

I need what's called gap coverage to fill in. God insurance jokes.

Emil:

Yes, I'm probably still under insured on some things. I probably should have rolled the autos in but like, just with, I don't know, our insurance costs went up. So I was like, ah, even more. No thanks,

Michael:

Baby steps you got to ease into it.

Emil:

Exactly. So you sound like my brother was like, you know, the autos are what really matters. That's the biggest thing that people usually use the umbrella for fun fact.

Michael:

Whatever. It costs too much like

Emil:

Thank you moving on. So that was the 2020 recap.

Michael:

When you started the year. Remind us were you targeting a single family. are you targeting as one multifamily?

Emil:

No, my goal was to target All multifamily. So probably in the three to four unit range, I was actually looking to do originally I was looking to do like a bur on those. So buy all cash, fix it up, go refi later, and put in find properties that made sense in a hot market like this, I think, especially in a rise, you know, in a market like we have right now just just couldn't find one that made sense for me. And so found a triplex where I think there's still value add and a couple of the units have market, the rent is way under market, and they don't need that much to get to market. So try that instead, we'll see how that goes.

Michael:

I think you also did something here in q4 of 2012, that you didn't mention with regard to that 12 unit and getting yourself lined up to make a move next year. Right?

Emil:

Yeah, so with that 12 unit, I had to basically scramble and like create what's called a personal financial statement, which is what a commercial lender wants to see. So when you do conventional that, you know, it's more like just your income. And what personal financial statement is like literally your entire net worth all the assets, you own all the liabilities. So that was a little bit of a new process. I didn't have all that at the ready, and I had to just go aggregate it from everywhere. Now I'm approved for a commercial loan. So now we can start looking at properties that are five plus units and you know, have a we have a pre qual letter. And so like we're much stronger on making offers on those types of properties moving forward. So, you know, before I was looking at just two to four units, and now it's like, I don't know, I might might go five plus, we might do something commercial in 2021.

Tom:

That's awesome. you've gotten that back in. Yeah, even though you didn't get it like it's,

Emil:

It was cool to finally like, obviously, we didn't win on it, but at least to like make an offer on one go get the process going with the lender to be pre approved there. So just at least now we're set up to do more of those offers in 2021 if we want to.

Michael:

And so what does 2021 hold for you?

Emil:

2021, two properties. Again, that's the main goal. I definitely want it to be multifamily. I don't know if it's going to be small multifamily that two to four unit range or five plus, I think it's just if we find a good deal, whatever makes sense. Makes sense. Right?

Michael:

Awesome.

Emil:

I like to to for a lot right now, just because you still get conventional financing and 30 year interest rates are so low to get that locked in for 30 years just is like sounds amazing. But again, if an awesome deal comes across and it's five plus, I'm not going to do that either.

Michael:

Right on is that it is at the end of the list for 2021.

Emil:

There's another goal I have for myself that's like the the big one for me. Usually every year I feel like real estate is the big ones talk about that other one right now. It's secret, and we'll talk about that maybe at a later date. Awesome. That's that's a big focus for me. But I still want to keep some activity going with the real estate portfolio. So two properties.

Michael:

Awesome. If I can borrow both yours for a minute, I have a question. Speaking of 30 year fixed rates, so I have this investment condo, I'm trying to figure out what to do with I can either I'm thinking about selling it just kicking the idea on selling it, I could also refinance in rate only, and drop it from a four and a half to a three and a quarter, which would save me about 230 bucks a month, or I could do a cash out refinance and get about 100 grand out. And that rate would be three and three quarters 3.75 my payment would go up from where it is right now. Like 250 bucks.

Tom:

100 K, that's what should be taken out.

Michael:

Yeah.

Tom:

 You got a plan for that, to park that 100 K?

Michael:

Vegas man. First on red. Yeah, I do have a plan for that 100 K, I mean, I'm going to use it to wrap up that development project. And so I think I'm leaning that way. I mean, a half a percent spread on 100 K, over a 30 year fixed like, almost seems like a no brainer and to get sub fours on that. But also like three and a quarter is pretty amazing, as well.

Emil:

What is your cash flow? Does your cash flow become negative on that property? With the cash out refi?

Michael:

Right now? It's like 50 bucks a month.

Emil:

So would go negative?

Michael:

It would go negative? Yeah, there we go negative. But it'd be negative today. But I think you know, in the next 2,3,4 years rents, I'm assuming are going to go up they climb steadily since I've owned that property.

Tom:

If you were to take out the extra 100,000, what would that put your loan to value at?

Michael:

That'd be 75. Yep. And there's no and I asked the lender, there's no additional break in interest rate if I went lower LTV, like if I took 70 or 65 it's still that same three and three quarters.

Tom:

Yeah, if you're in a position to like take a little bit more risks that seems like really cheap capital to close out that other project. So right I would say that's probably like the less conservative route but it could be opportunistic by kind of like what you're describing.

Michael:

Yeah.

Emil:

And you know, my opinion I'm very bought in on Michael Zuber is don't create alligators don't create anything negative cash flow. I know even though you would be able to like put it towards something that will probably make up for it, right? The negative cash flow somewhere else. The idea of having a property where you're basically putting money in it all the time. Just it does sound terrible. And it's like I love that as a rule of thumb, just like don't think Don't break this rule. So I wouldn't I would try to find the cash somewhere else. You know, you mentioned that six unit you're trying to sell like, Can you just I don't know, try to bring the price to a place where it's that could sell faster and that'll get you the money or something, I would try to go something else. And just refi it, lower your payment. This is a California property, so to like have cashflow on that property? And obviously, the equity is awesome. I don't know. That's, that's my take personally.

Tom:

Yeah, I mean, or the, you know, option C's just to sell it. You take all the that's right there. I obviously have a bunch of equity in it if you wanted to close a deal, right? And you didn't want an alligator? Right? I don't one of the two extremes, either refi 100,000 out or just sell it and unless you're gonna be living in it.

Michael:

Right, right, right. I need a place to live in, which I won't be or option D is just take less cash out. So it doesn't go negative.

Emil:

Yeah. That's not a bad idea, either.

Michael:

All right. Well, I have to keep y'all posted on what I end up doing good insight, tips. Thank you both.

Emil:

Awesome. Cool. This is fun. I'm glad we got to do this.

Michael;

This is a lot of fun.

Tom:

Yeah. And I'm inspired. I'm definitely going to be the next time. We record every week. The next recording, hopefully, we'll have my insurance stuff.

Michael:

Hopefully?! That's not a plan!

Tom:

You're right. I will right.

Emil:

That's right, our next episodes…

Michael:

Use power words.

Emil:

We're starting the next episode, we're gonna we're gonna follow up and see if you did it.

Michael:

We're gonna bring out the grill again.

Tom:

Excellent.

Emil:

The reason I think we did this episode. Yes, it's fun to talk about what we're all doing. But hopefully, it just inspires you guys. Hopefully you get some ideas in, you know, as you're forming your 2021 goals, it inspires you in some way, shape, or form.

Michael:

And I think something else to kind of piggyback off what you said, Emil, is that stuff doesn't always go according to plan. And so don't get disheartened. Yeah, don't feel as hard or beat yourself up. If things don't go according to your plan. I mean, there's a lot of things going on that are often outside of your control. So make a plan, try to stick to it as best you can. But also be gentle with yourself and understanding that, yeah, it doesn't always go smooth. And so be able to be flexible and pivot and kind of bend be the willow not the with some more sturdy tree that breaks in the wind, Be the willow not the twig, 2020 takeaway.

Emil:

And one other thing is, you know, we all set like pretty simple goals, right? Like, buy x properties, close x projects, whatever it is. And I think if you just set that high level goal, your mind will start thinking about, alright, how do I get there, right? Like, I didn't have sell a property, or refi, or any of those things in my goals, it was just buy two properties. And so by necessity throughout the year, I was like, Well, I'm not gonna really get this cash to be able to buy those properties. So you just started thinking of different ways and things you have to do to get to that goal. So I guess the point there is, I think it's okay to just just have a top level goal instead of a bunch of like, smaller things. And like you said, be adaptable, and those, you'll figure those things out throughout the year.

Michael:

All right. Um, just quick counterpoint to that, I would say the more specific you can get, oftentimes, the better. I like the acronym smart for goal setting, because you can measure yourself and it should be attainable. And I think it helps put parameters around the goal. Oftentimes, when you have a lofty goal or a non parameter Set goal, it's tough. I find it personally tougher to accomplish different strokes for different folks. But I find putting parameters and timeframes and measurements around it helped me accomplish it.

Emil:

But you take you take that bigger one, and always break it down in a small like, let's say your goal, whatever was like by 10 units, right? Yeah, for this year, would you break that down into a bunch of the sub things you're going to need to do? Or will you just say that and then kind of figure it out as needed. as the year progresses,

Michael;

I try to break it down into smaller bite sized pieces.

Emil:

Alright, well, with that, hope you all have an awesome end to 2020 I know a lot of us are probably looking forward to put in 2020 in the books. And I don't know about you guys. I'm very, very optimistic about 2021. We have some good news. It feels like there's a light at the end of the tunnel. So hope you all have an awesome new year. Big, big things lined up for everybody. Listen in 2021 you know, we started this show in in 2020. I really want to thank you guys all for the support this year and the feedback and the support and you guys listening…

Michael:

Big time!

Emil:

in a week. So with that, we'll check you out in the new year and happy investing.

Michael:

Happy investing.

Tom:

Happy investing

Emil:

Hey everyone. Welcome back for another episode of The Remote Real Estate Investor. My name is Emil Shour. And I'm joined by my lovely co hosts,

Tom:

Tom Schneider,

Michael:

and Michael album.

Emil:

And today we're going to be talking about year end review. So we're going to look back at the 2020 goals we set for our real estate businesses at the beginning of the year. We're going to analyze what did we achieve from that we're also going to look at how did we pivot? You know, things change throughout the year? How did we pivot? What else did we do in our businesses, and then also look into 2021. And our goal here is to help you guys you know, as you're thinking through your strategy, hopefully help you guys come up with what that can look like and set some lofty goals. So let's hop in this episode.

Alright guys, so we're gonna be talking 2020 goals, what did we achieve? How did we pivot? What else do we do? And then looking in the future for what do we have set up for ourselves for 2021 goals? And I think the way we decided to structure this episode is we're gonna do hotseat. Normally, on episodes, we kind of talk about a topic and we go round robin in a circle. I think this one, each of us will sit in the hot seat, go through these kind of three parts of the questions. And then we'll move on to the next person in the hot seat. So any volunteers who wants to go first?

Michael:

Let's put let's put grill marks on Tom.

Emil:

Let's do it, dude.

Tom:

Let's do it! Sssssssssssssss sizzle.

Emil:

Tom Schneider.

Michael:

Hey, yeah. Okay, Tom, what was your goal starting 2020, or goals de parentheses around the “s”.

Tom:

I knew that 2020 was going to be a slower year on that side of my business. So wife delivered first baby in November of 2019 had a pretty massive house project, adding a bathroom on. So going into it, I knew it was sort of maintenance time, just maintain and possibly do some acquisitions near the end of q4, it was a definitely a quieter year, with the new rates that are available for financing. I was hoping to do a little bit more within the end of the year by possibly for refinancing some of the properties, I need to do a little bit of work on my insurance. I didn't get to some of those different items, but it's just like a weirdly busy time in my life with new baby in big projects on the homestead. So all in all, a pretty quiet year on the investing front. But you know, throughout all this, the portfolio performed. It just kept moving on not a lot of growth within it. But it was a known slow year within my personal portfolio.

Michael:

Have you done any refinances on the investment stuff? Or on your personal

Tom:

I did some refinancing not in 2020. And I actually I did do refinancing on my personal so you're right Michael, not a total do nothing kind of a year so did quite a bit, I had a key lock on my personal closed it out to refinance, finished the refinance and reopen the HELOC. So sort of a refresh on that side of my finances, which is all kind of tied together, which and it's a there's a huge queue, there's a huge line of people doing refinancing. So it took them honestly way longer than I was expecting to and like a little bit more work than I was expecting to. So I guess you're right, Michael, it wasn't a total do nothing. It was moving some of the personal finance stuff around and hopefully be set up for a big 2021.

Michael:

And so on the investment side of refinancing, let's get personal here. Why didn't you refinance any of the investment properties with rates being as low as they are?

Tom:

Well, I view as being a little bit too conservative. Usually banks don't want you doing like too many transactions or like new refinances at the same time. And the most important one that I had to get done was related to my personal so I don't I'm not going to be too hard on myself just because I had the other stuff going on. But where I definitely could have done more was redoing my property insurance that I have. That's something that's been on my list to do that I just kind of keep putting on the backburner, and it's okay. And that it's not something that you know, you necessarily need to lose sleep over and doing right away and re optimizing your property insurance that you have. But something definitely I don't want to put off too much longer. But that was something I you know, looking back on 2020 is like darn I should have just gotten that done because it's those things once you set it, you forget it what happened to me the mistake that I made is I was using this insurance broker and they had terrible communications with my lender.

So I paid to like re up my insurance. My insurance didn't do the proper like notification to my lender. And then my lender went and bought insurance for me. And then my property insurance company that I bought that originally they sent me back the money that I paid for them for the insurance like this is just totally me just kind of dropping the ball a little bit. I mean, I didn't Double pay for insurance, but I'm definitely paying way more than I should right now with some crummy insurance that my lender bought me. So this is my, like, bad Tom, I'm making myself accountable by throwing it out there, go fix my insurance. And Nick, who's a member of the Academy, who is also has some expertise in insurance, I owe you a call, we got a we got to connect?

Michael:

Well, I don't think you should be too harsh on yourself. But you feel like you didn't do a whole lot in the investment side of the refinances. There's only so many hours in a day, and everyone's got priorities. And if I had to guess I would say that the refinancing of the loan on your primary is probably more impactful than refinancing on those investment properties. And, you know, I don't see rates going anywhere in the next couple months, the near immediate future. So you could probably get to those in 2021 if you wanted to, anyhow,

Tom:

Yeah. You know, and the rates aren't that bad. I mean, the ones that I have that I was looking at redoing their low 4% I mean, I guess I could get to from what I hear like sub three, which makes it worth it. Mm hmm. Think probably 2020 at least read refine.

Emil:

Come on. This is this is the hot seat. We got to grill Tom here? Yeah. Why do you think you didn't get all this stuff done that you'd want to do? I know, I know. life gets in the way. But what do you think like in 2021? What can you do differently to like, make sure those things get done?

Tom:

I just I need to just not be lazy about I think I got a little lazy about it. Yeah, the hard thing about grilling me is I'll just like put my hand on the grill and precedent. Yeah.

Michael:

I love it. I love it.

Tom:

Give it to me. No, I think acquisition stuff I think turned back on and 2021. But the falling short, is definitely just getting some of the insurance stuff because right now, I'm probably paying like a couple extra 100 or 200 bucks a month, but it's just lighting money on fire like stupid, stupid, Tom. And another coverage I need. Okay. Take it easy talk don't grow too hard. No.

Emil:

Michael’s like, it’s Okay. Grill him,

Tom:

So all in all, kind of a boring year, but I didn't take care of the important boring stuff. And you know what, but you did or did not take care of the employee? Didn't I mean, enough, you know, but I didn't take care of the playing a little bit of offense on the insurance side. But that's why they make tomorrow, so.

Michael:

yeah, I mean, the good thing about insurance is that you don't have to restructure the entire portfolio. Yeah, you can just go redo that one. And that's like, like an hour's worth of work.

Tom:

Yeah. You know, honestly, like, I think, dude, this is going somewhere, this is going somewhere, something that that whole communication breakdown between the insurance company and the lender, kind of like made me I don't know if nervous is the right word. But there's like, just concerns of me of like, you know, making sure that that doesn't happen again, not that it was like a huge deal, but I don't know it. Do you have any thoughts on that? You guys on changing your insurance kind of mid flight and making sure you're not double paying? And

Michael:

Did you crack some skulls? Because of that? I mean, it sounds like I mean, obviously, the buck stops with you as the owner. But it sounds like the ball was dropped at multiple stages as well.

Tom:

I didn't crack skulls, I didn't crack skulls, and maybe I just need to be like a little bit more of like, a ballbuster. But you know, skull cracker. Michael, what would you do with your advice right now?

Michael:

Oh, I would cancel that insurance today. Yeah, I would go get on the phone with an insurance Rep. Either somebody I knew or Nick from the Academy, talk to somebody and just go place new insurance because that's totally unacceptable, and frustrating, right? The lender doesn't really care how much it costs you. They're covering their behind because they've got the loan. But so you know what you need for your insurance, you can send an existing declaration page of a policy that you'd like to an agent, you know, wherever that property is, I just get it done and cancel the other one.

Tom:

Just do it. Okay, screw it, I'm going to do that in 2020. This episode is honestly bearing some fruit. And I think the other thing that's kind of a mental block for me is knowing that I don't have to get onto a phone tree to talk to the mortgage company and like, okay, just light an hour of my time on fire. I'm working my way through the phone tree and in talking to who I need to from the mortgage company to let them know like, Hey, I have a new, any thoughts to…

Michael:

Your insurance person should do it,

Tom:

They'll do it all?

Michael:

All you need is the contact for that insurance company that they've placed for you. And you can call and cancel and then show proof of your binder that your new policy is bound.

Tom:

Will the lender then send me like whatever escrow that they have? Yeah. So we'll get a check from them.

Michael:

They should Okay,

Emil:

I just did this. I don't know if the lender will but like your insurance company, right. So let's say you're halfway through your policy costs $500 a year, whatever, just use easy math. If you're halfway through, they'll send you a check for that 250 prorated and that's left. That's I'll talk about it when I'm in the hot seat, but I've just recently did this and that's what's been going on for me. I get it from the insurance company and prorated amount.

Tom:

Ooh, I'm gonna take care of this. Hopefully by the time this is published,

Emil:

Do it. We still got time in 2020.

Tom:

Yeah, right I really am like super juiced about this. Okay, good. Yeah, I'm gonna take care of it.

Michael:

I guess Tom, you can send me all nice commission checks directly to us. 10% fee, easy,

Tom:

Perfect.

Emil:

So So what's what's lined up for 2021? You're gonna get that done in 2020. So what do you think is lined up for 2021

Tom:

I think I want to add kind of get back on the two units. One, two, I'm going to have this this big HELOC available…

Emil:

Make it specific which one, one or two?

Tom:

Two. Yeah, making it to…

Michael:

You heard it from the horse's mouth everybody.

Tom:

Yeah, going to 2.

Michael:

This time next year, we're going to look back and see if Tom has his two units.

Tom:

Two units and two refinances. That's what I’ll do.

Michael:

Whoo. All right.

Tom:

If I am refinancing though, I can pull a little money out. Okay. Three. All right, And HELOC? Okay, that's it. That's it. That's 2021 three units and 2 refinances.

Emil:

Solid.

Tom:

Awesome, and it feels good putting it out there.

Emil:

And now it's no it's like real public. It's not just like you shared it with a friend like it's it lives on the internet now. So

Michael:

Right, this is recorded, dude. All right, man.

Tom:

Yep.

Pierre:

Do you want to do one of those little equity challenges Tom? where you give me like $1,000. And if you don't get it done you don’t get it back?

Michael:

That's so good. Yeah, Pierre will be your escrow account. If I ask.

Pierre:

Yeah, there you go.

Michael:

And Tom tells you like, wait, Pierre, I need that 1000 ago by the third unit. So I need that in the down payment.

Tom:

I like it. All right. I feel good, guys.

Michael:

If you feel good. We feel good.

Tom:

Good. Good. Good. Good. Anything else in the hotseat, or are we ready to mix it up?

Michael:

Let's mix it up. Starting to stink out there.

Tom:

All right.

Michael:

It’s like burning flesh.

Tom:

Michael,

Michael:

Let's do it.

Tom;

You’re in the hot seat.

Michael:

Is it gas or charcoal?

Tom:

It is oil baby.

Emil:

He's falling around on fire and running around.

Tom:

Alright, 2020 What did you What did you want to get to? What do you What did you want to get done?

Michael:

Oh, man. So 2020 I had really high hopes Wait, dude, I'm like losing track of the days and years here. So okay, so 2020 started off crazy. I had two fires in my in a commercial mixed use building that I'm redeveloping converting commercial space and residential space that happened in the end of 2019. And so I was really hopeful and optimistic that that project was going to get done here in 2020, because we started it in late late, late 2018, early 2019. And so that's just been going on dragging, dragging, dragging. So the problem was that, because of these fires, I had to go work with a public adjuster to get the insurance to pay what they owed. And that just just been drugged out, like unbelievably long. And so I had to pause work on the building because they had to do investigations, and the whole building was affected. So we couldn't disturb any of the evidence and the whole building. So it's just a whole frickin mess. So by 2020 got massively derailed. In that sense of the word.

Good news. on another project I had, I had a kind of contingent loan refinance, I was able to pull cash out for rehab I did. And they were going to give me draws for the refinance cash as those units got leased up. And so we got all four of those units leased up. So I was able to grab all that cash out from a refinance I did, which was very exciting. Then I also wanted to add a few more units to the portfolio, but kind of like Tom, I was just so busy kind of putting out other fires kind of pun intended, so to speak, that there just wasn't a whole lot on the acquisition side. So it was just kind of managing the ongoing stuff. And so I wanted to finish up a couple other rehabs that I was able to get done in 2020. So that's super exciting. Of course, they took longer and were more expensive than anyone anticipated, but dealt with a crooked contractor and had to fire some people and hire some people. So 2020 was a whirlwind to say the least,

Emil:

I'm surprised we've all talked on the podcast and off the podcast. I'm surprised that part of your 2020 was to add units, given how much stuff you already had going on. That is shocking to me that you…

Michael:

Yeah, well. So I mean, part of it was to because I had this great vision for how on the rails things were going to be operating. And then that immediately got debunked and it was like Ozzy Osbourne's Crazy Train. And I was like, Oh, well, like we got to pump the brakes here a little bit. I got to focus on what's going on, restructure some things, get some things reined in. And so that was able to get a lot of that done, which was super exciting. But still a long way off on that big project. But wrapping up, have put the bow on several others, which is very exciting.

Emil:

I don't even think you've mentioned your international project and all that either.

Tom;

Oh, yeah, I totally spaced on that. So last year, my wife and I were traveling for the better part of the year. And then in the beginning of 2020. We're also traveling, and then came home in like April because a COVID. So we are working on we made it a 2020 goal to get our Portuguese permanent resident status. And so that's via an investment in Portugal. So we purchased an investment property in Portugal in 2020, which is very exciting. And then we're in the process of flipping an investment property in Portugal as well. And so that'll happen in 2021 as the borders reopen in Europe, and people are traveling more because it's tough to sell a kind of high end unit without folks traveling there. So that'll likely be in the q2 or beginning of q3 and 2021. But yeah, so we were able to get all paperwork signed in and submitted to the Portuguese government, which is super exciting. So now we're just waiting on confirmation that they have everything they need. And then we can of course, pay more fees and taxes to the government, and hopefully get our status and then we'll need to travel to Portugal at some point 2021 to do some paperwork.

Emil:

Hot Dang. So pretty slow year for you is what you're saying overall?

Michael:

Yeah, pretty typical. I hope 2021 is more exciting.

Emil:

What do you think was the obviously a lot of stuff happen? What do you think were a couple, or just maybe the top learning for you that you want to take in the 2021.

Michael:

I think one of the biggest takeaways for me is how amazing public adjusters can be when it comes to dealing with insurance claims. Because I came from the industry, I used to work for a really reputable property insurance company in the commercial sector. And so I never had experience in public adjusters that wasn't something that I was ever exposed to, because it was never a thing that we dealt with in our business. So I haven't been on the other side. Now the user side, the insurance side, that was a real eye opener and about how powerless we as the little people can feel going up against these massive insurance companies. And so just knowing that there is help available, there are people and professionals out there that can be your voice that can help you and really go toe to toe with the insurance company on your behalf. And so I think a big takeaway is to reach out and get help sooner than you think you might need it. Because this whole process could have been expedited a little bit.

I mean, the process itself takes a while. But I kind of waited a long time to do it, because I didn't think it was going to go south. But it did, it went really south. The other takeaway that I have is that, you know, I was managing this whole process from Nicaragua, and Costa Rica, when it first happened. And so I mean, this whole remote investing thing, you can do it in the States, you can do it outside the states, a phone connection, internet connection is really all you need. Because what's the difference? If you're in the states versus somewhere, not in the States, timezone is the biggest difference. So if you're comfortable with the remote thing, I think the possibilities are limitless. Another big takeaway I have is don't spread yourself too thin. And it's one of those things that you're not going to realize that you're spread too thin until you are and so don't try to bite off more than you can chew because it's really attractive or sexy or exciting, even though it might be all of those things. Because it I mean, I definitely like my mental health took a big hit in 2020, just from juggling all this stuff. And so I had a lot of sleepless nights and stressed moments from man, how am I gonna make this come together? And how am I gonna make sure I get this project done. So just don't bite off more than you can chew. And always, always, always overestimate the time and cost of projects because they always go over both in terms of time and budget.

Tom:

How about 2021? Sorry, a meal, we're adding one more, how about looking forward to 2021?

Michael:

2021, I am highly confident we're going to get that big redevelopment project wrapped up and finished, I'm also going to be selling a property that I was looking to sell in 2020. But that didn't come to fruition. So we're gonna be lowering the price a little bit, getting it back on the market. And then I'm going to be tying up two refinances that I have just started now one is a commercial refinance on a triplex. And then another is a refinance conventional refinance on an investment condo that I own that I was kicking the idea around of selling, but I'm able to take out a bunch of cash and get the interest rate significantly lower. So I'm toying with a couple different ideas. But that's what I've got lined up for. For 2021. Oh, and then I also am doing a loan modification on a commercial portfolio loan I have that's two properties. I went and got a competitive bid to have it refinance elsewhere, and then went back the original lender and said, Hey, can you beat this? And they said, Yeah, sure. So

Tom:

Oh, nice.

Michael:

I'm really excited about that

Emil:

Awesome, man. So no new acquisition plans for you more. So just like getting everything,

Michael:

I take that back. So I've got a couple of cash partners that want to get into the real estate space that have reached out to me and asked if I would help him do a couple of deals. So I'll be either 50% or a minority partner looking to secure a deal and then get it rehabbed or refinance and kind of be running point on that for some folks are international and some folks who don't have any investing experience so they want a helping hand in how to do it. So it's almost like a syndication but not really just because folks have approached me and said, Hey, take my money. Can you do real estate for me? And I said, Yeah, sure. So we'll probably add, I don't know anywhere between 10 to 15 units in in 2021 using OPM.

Emil:

Nice. What is OPM?

Michael:

Other people's money?

Emil:

Just in case Yeah,

Michael:

yeah, no, it's great question. Ah, yeah, that's what's that's what's on tap guys.

Emil:

I'm looking forward to you having a calmer 2021 and getting things done.

Michael:

Dude. Makes, makes two of  us makes to us. Thank you.

Emil:

I get stressed out just hearing about all the stuff you're doing

Michael;

Well, like Tom said, it's kind of nice to put it out there it's almost like a therapy session you guys can invoice me, bill my insurance.

Emil:

Yep. I'm gonna bill you for you know, listening to all that and carrying the brunt of it.

Michael:

Laden you with all my…

Emil:

Exactly.

Michael:

All right, Emil, ready to step up to the plate.

Emil:

Let’s do it baby.

Michael:

All right, sizzle sizzle 2020 in the rearview mirror. What did it look like from the beginning? and What did it look like at the end?

Emil:

Yes. So my goal was really simple. I think I mentioned it early on, when we started the podcast, my goal is to buy two properties in 2021 or 2020. on that front, we ended up buying one property. You know, it's funny, I think these acquisition goals, they're kind of like this double edged sword where you're like, Alright, I want to buy x properties. But it's like, you should never just buy properties to hit a number. It should be like, if you find the right things, buy them. Right. So that was kind of the case for us. We found one property we liked. We made offers on a bunch of others, but haven't closed anything else that we've liked. I actually just submitted an offer on a 12 unit on Friday that I was really excited about, but we lost on that one. So that was a bummer. But I just I wrote down some of the other things we got done.

So we bought this property. It was a small multifamily triplex. So that was one of my goals was to buy multifamily this year. So we bought that tribe.

Michael:

Welcome to the dark side.

Emil:

Ah, yeah, well, we'll see if, if I'm here to stay, but we're testing it.

Tom:

You're dipping your toe!

Emil:

Exactly. Toe dipping. I knew that buying two properties, just saving money was going to be tough. So at the beginning of the year, in an attempt to put some money back in our pockets, to buy some multifamily to test that out and to consolidate because we were in just several markets. And I you know, I think I've expressed that I'm not a huge fan of that strategy anymore. I'm trying to consolidate over time and really focus on like one market. So I end up selling a rental property we own in Memphis basically broke even on that when you factor in cash flow and turn costs and all that stuff to sell it but put some money back in our pocket to be able to go out and try to hit that two new properties goal, refight our primary twice because at the beginning of the year rates dropped a good amount and we're like, Oh, sweet, we got to do it dropped our payment a couple 100 bucks. And then like two months ago, they dropped sub 3% and it lowered you know, our monthly payment, a couple $100.

More so to revise in one year, which is interesting. We did a cash out refi on our single family home in Jacksonville, which I think I've talked about that one on an episode ended up appraising for way less but because it lowered the rate, put some cash in our pocket, nothing huge. I think it was like 6000 bucks, but the payment didn't change at all because the rate lowered so I was like, Okay, why not, I just started the process of doing a cashout refi on our Indianapolis single family that one I'm pretty confident has appreciated enough where we'll get 80 to 90% of our original investment out and the rate has dropped enough where I think our monthly payment changes 510 bucks a month. So it's like a total no brainer with rates being as low as they are I end up getting new insurance on the st louis and the Indianapolis single family and just because like Tom I think in doing these episodes with insurance and Michael having the background that he does in insurance just realizing that I was under covered and paying too much so we end up getting more coverage the the rates actually ended up seeing the same but we just got much better coverage. So feeling much better about those properties. And then I had an umbrella policy on one of our properties and cancelled that and got a new umbrella policy for the entire portfolio in our primary and it wasn't much more than what I was paying for the original umbrella so…

Michael:

And did you add your auto on that?

Emil:

I did not add auto it made it jump a lot huh for me personally and like doubled the cost hopefully I'm not kicking myself in the years.

Michael:

right right

Emil:

Don't put it out there Michael, you insurance whatever.

Michael:

Hey, man, we're grilling up grilled Emil sandwiches here man.

Emil:

Michael the insurance. Do you have everything in your life insured you're just you're just setting yourself up?

Michael:

Man you have to you have to. It's funny coming from the pessimist, the self proclaimed pessimist you should be the one that's insuring everything.

Emil:

We don't have enough time on this episode. To go through my silly logic of why I do it but you know what? Why don’t you go insure that mustache okay?

Michael:

There's not enough coverage in the world to insure this mustache man!

Emil:

Sir, your mustache is not full enough for us to offer you coverage.

Michael:

I need what's called gap coverage to fill in. God insurance jokes.

Emil:

Yes, I'm probably still under insured on some things. I probably should have rolled the autos in but like, just with, I don't know, our insurance costs went up. So I was like, ah, even more. No thanks,

Michael:

Baby steps you got to ease into it.

Emil:

Exactly. So you sound like my brother was like, you know, the autos are what really matters. That's the biggest thing that people usually use the umbrella for fun fact.

Michael:

Whatever. It costs too much like

Emil:

Thank you moving on. So that was the 2020 recap.

Michael:

When you started the year. Remind us were you targeting a single family. are you targeting as one multifamily?

Emil:

No, my goal was to target All multifamily. So probably in the three to four unit range, I was actually looking to do originally I was looking to do like a bur on those. So buy all cash, fix it up, go refi later, and put in find properties that made sense in a hot market like this, I think, especially in a rise, you know, in a market like we have right now just just couldn't find one that made sense for me. And so found a triplex where I think there's still value add and a couple of the units have market, the rent is way under market, and they don't need that much to get to market. So try that instead, we'll see how that goes.

Michael:

I think you also did something here in q4 of 2012, that you didn't mention with regard to that 12 unit and getting yourself lined up to make a move next year. Right?

Emil:

Yeah, so with that 12 unit, I had to basically scramble and like create what's called a personal financial statement, which is what a commercial lender wants to see. So when you do conventional that, you know, it's more like just your income. And what personal financial statement is like literally your entire net worth all the assets, you own all the liabilities. So that was a little bit of a new process. I didn't have all that at the ready, and I had to just go aggregate it from everywhere. Now I'm approved for a commercial loan. So now we can start looking at properties that are five plus units and you know, have a we have a pre qual letter. And so like we're much stronger on making offers on those types of properties moving forward. So, you know, before I was looking at just two to four units, and now it's like, I don't know, I might might go five plus, we might do something commercial in 2021.

Tom:

That's awesome. you've gotten that back in. Yeah, even though you didn't get it like it's,

Emil:

It was cool to finally like, obviously, we didn't win on it, but at least to like make an offer on one go get the process going with the lender to be pre approved there. So just at least now we're set up to do more of those offers in 2021 if we want to.

Michael:

And so what does 2021 hold for you?

Emil:

2021, two properties. Again, that's the main goal. I definitely want it to be multifamily. I don't know if it's going to be small multifamily that two to four unit range or five plus, I think it's just if we find a good deal, whatever makes sense. Makes sense. Right?

Michael:

Awesome.

Emil:

I like to to for a lot right now, just because you still get conventional financing and 30 year interest rates are so low to get that locked in for 30 years just is like sounds amazing. But again, if an awesome deal comes across and it's five plus, I'm not going to do that either.

Michael:

Right on is that it is at the end of the list for 2021.

Emil:

There's another goal I have for myself that's like the the big one for me. Usually every year I feel like real estate is the big ones talk about that other one right now. It's secret, and we'll talk about that maybe at a later date. Awesome. That's that's a big focus for me. But I still want to keep some activity going with the real estate portfolio. So two properties.

Michael:

Awesome. If I can borrow both yours for a minute, I have a question. Speaking of 30 year fixed rates, so I have this investment condo, I'm trying to figure out what to do with I can either I'm thinking about selling it just kicking the idea on selling it, I could also refinance in rate only, and drop it from a four and a half to a three and a quarter, which would save me about 230 bucks a month, or I could do a cash out refinance and get about 100 grand out. And that rate would be three and three quarters 3.75 my payment would go up from where it is right now. Like 250 bucks.

Tom:

100 K, that's what should be taken out.

Michael:

Yeah.

Tom:

 You got a plan for that, to park that 100 K?

Michael:

Vegas man. First on red. Yeah, I do have a plan for that 100 K, I mean, I'm going to use it to wrap up that development project. And so I think I'm leaning that way. I mean, a half a percent spread on 100 K, over a 30 year fixed like, almost seems like a no brainer and to get sub fours on that. But also like three and a quarter is pretty amazing, as well.

Emil:

What is your cash flow? Does your cash flow become negative on that property? With the cash out refi?

Michael:

Right now? It's like 50 bucks a month.

Emil:

So would go negative?

Michael:

It would go negative? Yeah, there we go negative. But it'd be negative today. But I think you know, in the next 2,3,4 years rents, I'm assuming are going to go up they climb steadily since I've owned that property.

Tom:

If you were to take out the extra 100,000, what would that put your loan to value at?

Michael:

That'd be 75. Yep. And there's no and I asked the lender, there's no additional break in interest rate if I went lower LTV, like if I took 70 or 65 it's still that same three and three quarters.

Tom:

Yeah, if you're in a position to like take a little bit more risks that seems like really cheap capital to close out that other project. So right I would say that's probably like the less conservative route but it could be opportunistic by kind of like what you're describing.

Michael:

Yeah.

Emil:

And you know, my opinion I'm very bought in on Michael Zuber is don't create alligators don't create anything negative cash flow. I know even though you would be able to like put it towards something that will probably make up for it, right? The negative cash flow somewhere else. The idea of having a property where you're basically putting money in it all the time. Just it does sound terrible. And it's like I love that as a rule of thumb, just like don't think Don't break this rule. So I wouldn't I would try to find the cash somewhere else. You know, you mentioned that six unit you're trying to sell like, Can you just I don't know, try to bring the price to a place where it's that could sell faster and that'll get you the money or something, I would try to go something else. And just refi it, lower your payment. This is a California property, so to like have cashflow on that property? And obviously, the equity is awesome. I don't know. That's, that's my take personally.

Tom:

Yeah, I mean, or the, you know, option C's just to sell it. You take all the that's right there. I obviously have a bunch of equity in it if you wanted to close a deal, right? And you didn't want an alligator? Right? I don't one of the two extremes, either refi 100,000 out or just sell it and unless you're gonna be living in it.

Michael:

Right, right, right. I need a place to live in, which I won't be or option D is just take less cash out. So it doesn't go negative.

Emil:

Yeah. That's not a bad idea, either.

Michael:

All right. Well, I have to keep y'all posted on what I end up doing good insight, tips. Thank you both.

Emil:

Awesome. Cool. This is fun. I'm glad we got to do this.

Michael;

This is a lot of fun.

Tom:

Yeah. And I'm inspired. I'm definitely going to be the next time. We record every week. The next recording, hopefully, we'll have my insurance stuff.

Michael:

Hopefully?! That's not a plan!

Tom:

You're right. I will right.

Emil:

That's right, our next episodes…

Michael:

Use power words.

Emil:

We're starting the next episode, we're gonna we're gonna follow up and see if you did it.

Michael:

We're gonna bring out the grill again.

Tom:

Excellent.

Emil:

The reason I think we did this episode. Yes, it's fun to talk about what we're all doing. But hopefully, it just inspires you guys. Hopefully you get some ideas in, you know, as you're forming your 2021 goals, it inspires you in some way, shape, or form.

Michael:

And I think something else to kind of piggyback off what you said, Emil, is that stuff doesn't always go according to plan. And so don't get disheartened. Yeah, don't feel as hard or beat yourself up. If things don't go according to your plan. I mean, there's a lot of things going on that are often outside of your control. So make a plan, try to stick to it as best you can. But also be gentle with yourself and understanding that, yeah, it doesn't always go smooth. And so be able to be flexible and pivot and kind of bend be the willow not the with some more sturdy tree that breaks in the wind, Be the willow not the twig, 2020 takeaway.

Emil:

And one other thing is, you know, we all set like pretty simple goals, right? Like, buy x properties, close x projects, whatever it is. And I think if you just set that high level goal, your mind will start thinking about, alright, how do I get there, right? Like, I didn't have sell a property, or refi, or any of those things in my goals, it was just buy two properties. And so by necessity throughout the year, I was like, Well, I'm not gonna really get this cash to be able to buy those properties. So you just started thinking of different ways and things you have to do to get to that goal. So I guess the point there is, I think it's okay to just just have a top level goal instead of a bunch of like, smaller things. And like you said, be adaptable, and those, you'll figure those things out throughout the year.

Michael:

All right. Um, just quick counterpoint to that, I would say the more specific you can get, oftentimes, the better. I like the acronym smart for goal setting, because you can measure yourself and it should be attainable. And I think it helps put parameters around the goal. Oftentimes, when you have a lofty goal or a non parameter Set goal, it's tough. I find it personally tougher to accomplish different strokes for different folks. But I find putting parameters and timeframes and measurements around it helped me accomplish it.

Emil:

But you take you take that bigger one, and always break it down in a small like, let's say your goal, whatever was like by 10 units, right? Yeah, for this year, would you break that down into a bunch of the sub things you're going to need to do? Or will you just say that and then kind of figure it out as needed. as the year progresses,

Michael;

I try to break it down into smaller bite sized pieces.

Emil:

Alright, well, with that, hope you all have an awesome end to 2020 I know a lot of us are probably looking forward to put in 2020 in the books. And I don't know about you guys. I'm very, very optimistic about 2021. We have some good news. It feels like there's a light at the end of the tunnel. So hope you all have an awesome new year. Big, big things lined up for everybody. Listen in 2021 you know, we started this show in in 2020. I really want to thank you guys all for the support this year and the feedback and the support and you guys listening…

Michael:

Big time!

Emil:

in a week. So with that, we'll check you out in the new year and happy investing.

Michael:

Happy investing.

Tom:

Happy investing

In this short episode Tom and Michael share two effective strategies to help keep you accountable to your goals. 

---

Transcript

Michael:

Hey everybody, welcome to another episode of The Remote Real Estate Investor. I'm Michael Albaum and today I'm joined as usual by

Tom:

Tom Schneider. And today we're gonna be talking about accountability and how to hold yourself accountable. So let's jump into it.

Michael:

All right, Tom, New Years just around the corner, everybody loves making new year's resolutions. How do you hold yourself accountable?

Tom:

Well, Michael, it's specific on what I'm trying to hold myself accountable. I like the idea of escrow challenges. And now I'm not talking about real estate escrow, I'm talking about taking some funds that I have, that I respect and want to keep and giving them to a trusted friend and telling them Hey, friend, if I don't do this, by then I want you to donate to this to something I don't want to be donated to like something I don't agree with at all. I read about this, there's a couple of apps that do this, but you could just do this with a friend.

Michael:

Oh, that’s so good.

Tom:

Let's say like, I really support killer whales, or like whales, you know, and then they would have to donate it to like a whale hunting company. That doen’t doesn't work. And I might rework this a little bit I might workshop this a little.

Michael:

I just love like, you would go on to like whale killer like whale hunting company dot com and let's see, like, what's, what's their what's their nonprofit numbers, counted on my taxes.

Tom:

Lowering the whale population. It’s big plankton that runs that company.

Michael:

It’s Plankton from SpongeBob. It's No, but I totally know what you mean. Like, if you Yeah, if you really like dark chocolate, and then you would donate to a milk chocolate company.

Tom:

That's right. That's right.

Michael:

That that's a that's a really, that's a really good incentive. I see like it almost as doubly incentivizing yourself, because there's that loss aversion where you're losing money. And then there's also that I'm donating to now actively a cause that I don't believe in or to a company that I disagree with. So I think that's double ending it. That's a really good tactic.

Tom:

I guess an easier way I could have just gave an example is not the whale hunting company. Maybe like there's like something political you don't agree with, like you have money that's donating to that cause like, right, I don't want you know, you want to be able to protect that. So that's going to give you some ripe incentive to not do that. So anyways, that's my…

Michael:

I love that. Is there anything in particular that you're working on holding yourself accountable to right now?

Tom:

I think like a lot of people like, you know, trying to get fit being quarantine pudgy bodies, like, you know…

Michael:

The quarantine 15.

Tom:

Exactly, yeah, so I have a good friend from high school who sees he's holding some money from me right now. And I need to go get rid of that quarantine 15.

Michael:

Right on. I love that.

Tom:

Yeah, What about you Michael?

Michael:

I am a big fan of the accountabilibuddy. And so I developed an accountability buddy partner. And so we have a weekly standing meeting. And if one of us doesn't show up, we'll do 110 bucks. And so we text each other what we're gonna do for that week, and then when we circle back the following week, we see if we got it done, and there's really no consequence for not getting it done, but maybe there should be, but I really like this, this escrowing idea, I think it's not me saying you have to adopt, yeah, my own life, because that's really good.

Tom:

I like your understanding of it. And that, you know, yeah, there's the version, you know, aspect of it, plus the good of you actually doing it, it's like you're hitting on all cylinders of motivation. I think another thing that's similar to both of these is putting it down on paper. So I do a monthly not a journal, but like, I have this template every month that I fill out just on some private Google site, I do a little review on what I want to get done this month, what got done last month, it's almost like if people have done stand up meetings before where you're touching on, okay, you know, what's, what got done, what got in the way, what's going to get done this upcoming week, it's that same exercise but doing it for yourself. And I find that a monthly cadence is a good way to do it. I've actually, I was looking at it, I have all the records from back and I started doing this in 2010. So I have a decade of every month, it's it's really funny to look at because I mean, you change as a person over 10 years, and then you get a little little diary of yourself and some other stuff that I put in within that template not only kind of the goal stuff, but I put a little gratitude stuff and said okay, like what I'm thankful about, you know, myself for like my family, all that kind of good stuff. It's, it's honestly a good exercise to do. And it's entertaining to look back over time. And I found that Google Sites is a good platform to do it just because you don't have to worry about them going out of business, their platform, you know, is is there. And then you have this almost like a time box. That's not a time box. What's it called?

Michael:

Time Capsule?

Tom:

That's a word Yep. of yourself. So again, my the way that I structured is what I want to do this month. How did I do against things last month, and then some general kind of like thoughts that I'm things I'm thankful for and a little bit touchy feely. But I think that stuff is important for being a 360 human.

Michael:

Yeah, I call clocks time boxes.

Tom:

Yeah, yes. Something else I've done in the past, which I really like journaling, too. So that really when you said that that hits strikes a chord with me that something else is actually giving yourself a reward for doing completing a task or a goal. They think so often, a lot of us are running so hard and like, we set a goal for ourselves, and then we accomplish the goal like Okay, great, what's next, especially the people that like, are super high achievers out there. And so we have to stop and enjoy the win. And I think when you teach yourself almost like Pavlov's dog to enjoy, and you get a reward for doing something that that makes doing the thing, oftentimes a lot more enjoyable. And I know it is for those around me in my personal life. So like when you get a property acquisition done or sell a property or get a property rehab, like celebrate without with those in your life. Enjoy, kind of enjoy that plateau a little bit before you start the next portion of the climb.

Tom:

Fantastic. We have a special treat amongst us our podcasts here every I think like 20, 20,000 we all do a celebratory shot so got to celebrate the wins. Man, it's life is tough. Challenges are tough. You got to really appreciate when things are rolling,

In this short episode Tom and Michael share to fun ways to help you stay accountable to your goals. 

---

Transcript

Michael:

Yeah, break it up into many milestones, it becomes so much more easier and a lot more enjoyable. Well, that was our episode, everybody. Thanks so much for listening. Feel free to leave us a rating and review whatever it is listen your podcast. We'd also love if people could share in the comment section, what things they use to keep themselves and those around them accountable. And we look forward to see you on the next one.

Tom:

Happy investing.

In this short episode Tom and Michael share two effective strategies to help keep you accountable to your goals. 

---

Transcript

Michael:

Hey everybody, welcome to another episode of The Remote Real Estate Investor. I'm Michael Albaum and today I'm joined as usual by

Tom:

Tom Schneider. And today we're gonna be talking about accountability and how to hold yourself accountable. So let's jump into it.

Michael:

All right, Tom, New Years just around the corner, everybody loves making new year's resolutions. How do you hold yourself accountable?

Tom:

Well, Michael, it's specific on what I'm trying to hold myself accountable. I like the idea of escrow challenges. And now I'm not talking about real estate escrow, I'm talking about taking some funds that I have, that I respect and want to keep and giving them to a trusted friend and telling them Hey, friend, if I don't do this, by then I want you to donate to this to something I don't want to be donated to like something I don't agree with at all. I read about this, there's a couple of apps that do this, but you could just do this with a friend.

Michael:

Oh, that’s so good.

Tom:

Let's say like, I really support killer whales, or like whales, you know, and then they would have to donate it to like a whale hunting company. That doen’t doesn't work. And I might rework this a little bit I might workshop this a little.

Michael:

I just love like, you would go on to like whale killer like whale hunting company dot com and let's see, like, what's, what's their what's their nonprofit numbers, counted on my taxes.

Tom:

Lowering the whale population. It’s big plankton that runs that company.

Michael:

It’s Plankton from SpongeBob. It's No, but I totally know what you mean. Like, if you Yeah, if you really like dark chocolate, and then you would donate to a milk chocolate company.

Tom:

That's right. That's right.

Michael:

That that's a that's a really, that's a really good incentive. I see like it almost as doubly incentivizing yourself, because there's that loss aversion where you're losing money. And then there's also that I'm donating to now actively a cause that I don't believe in or to a company that I disagree with. So I think that's double ending it. That's a really good tactic.

Tom:

I guess an easier way I could have just gave an example is not the whale hunting company. Maybe like there's like something political you don't agree with, like you have money that's donating to that cause like, right, I don't want you know, you want to be able to protect that. So that's going to give you some ripe incentive to not do that. So anyways, that's my…

Michael:

I love that. Is there anything in particular that you're working on holding yourself accountable to right now?

Tom:

I think like a lot of people like, you know, trying to get fit being quarantine pudgy bodies, like, you know…

Michael:

The quarantine 15.

Tom:

Exactly, yeah, so I have a good friend from high school who sees he's holding some money from me right now. And I need to go get rid of that quarantine 15.

Michael:

Right on. I love that.

Tom:

Yeah, What about you Michael?

Michael:

I am a big fan of the accountabilibuddy. And so I developed an accountability buddy partner. And so we have a weekly standing meeting. And if one of us doesn't show up, we'll do 110 bucks. And so we text each other what we're gonna do for that week, and then when we circle back the following week, we see if we got it done, and there's really no consequence for not getting it done, but maybe there should be, but I really like this, this escrowing idea, I think it's not me saying you have to adopt, yeah, my own life, because that's really good.

Tom:

I like your understanding of it. And that, you know, yeah, there's the version, you know, aspect of it, plus the good of you actually doing it, it's like you're hitting on all cylinders of motivation. I think another thing that's similar to both of these is putting it down on paper. So I do a monthly not a journal, but like, I have this template every month that I fill out just on some private Google site, I do a little review on what I want to get done this month, what got done last month, it's almost like if people have done stand up meetings before where you're touching on, okay, you know, what's, what got done, what got in the way, what's going to get done this upcoming week, it's that same exercise but doing it for yourself. And I find that a monthly cadence is a good way to do it. I've actually, I was looking at it, I have all the records from back and I started doing this in 2010. So I have a decade of every month, it's it's really funny to look at because I mean, you change as a person over 10 years, and then you get a little little diary of yourself and some other stuff that I put in within that template not only kind of the goal stuff, but I put a little gratitude stuff and said okay, like what I'm thankful about, you know, myself for like my family, all that kind of good stuff. It's, it's honestly a good exercise to do. And it's entertaining to look back over time. And I found that Google Sites is a good platform to do it just because you don't have to worry about them going out of business, their platform, you know, is is there. And then you have this almost like a time box. That's not a time box. What's it called?

Michael:

Time Capsule?

Tom:

That's a word Yep. of yourself. So again, my the way that I structured is what I want to do this month. How did I do against things last month, and then some general kind of like thoughts that I'm things I'm thankful for and a little bit touchy feely. But I think that stuff is important for being a 360 human.

Michael:

Yeah, I call clocks time boxes.

Tom:

Yeah, yes. Something else I've done in the past, which I really like journaling, too. So that really when you said that that hits strikes a chord with me that something else is actually giving yourself a reward for doing completing a task or a goal. They think so often, a lot of us are running so hard and like, we set a goal for ourselves, and then we accomplish the goal like Okay, great, what's next, especially the people that like, are super high achievers out there. And so we have to stop and enjoy the win. And I think when you teach yourself almost like Pavlov's dog to enjoy, and you get a reward for doing something that that makes doing the thing, oftentimes a lot more enjoyable. And I know it is for those around me in my personal life. So like when you get a property acquisition done or sell a property or get a property rehab, like celebrate without with those in your life. Enjoy, kind of enjoy that plateau a little bit before you start the next portion of the climb.

Tom:

Fantastic. We have a special treat amongst us our podcasts here every I think like 20, 20,000 we all do a celebratory shot so got to celebrate the wins. Man, it's life is tough. Challenges are tough. You got to really appreciate when things are rolling,

In this short episode Tom and Michael share to fun ways to help you stay accountable to your goals. 

---

Transcript

Michael:

Yeah, break it up into many milestones, it becomes so much more easier and a lot more enjoyable. Well, that was our episode, everybody. Thanks so much for listening. Feel free to leave us a rating and review whatever it is listen your podcast. We'd also love if people could share in the comment section, what things they use to keep themselves and those around them accountable. And we look forward to see you on the next one.

Tom:

Happy investing.

In this episode, Matt Thomas, Roofstock's retail broker manager covers the details of the Roofstock Select and BYOP programs. 

---

Transcript

Michael:

Hey everybody, welcome to another episode of The Remote Real Estate Investor. I'm Michael Albaum and today I'm joined by Matt Thomas, who's Roofstock’s retail broker manager. And so today Matt is going to be talking to us about Rootstock’s BYOP, and Roofstock Select programs. So these programs are kind of ever evolving and ever changing. So by the time you listen to this episode, there might be some minor changes to the program. So just keep that in mind as you are looking online and check out roofstock.com for the most up to date information about those programs. So let's get into it.

Matt, thank you so much for taking the time out of your busy schedule for joining us today. I really appreciate it.

Matt:

Yeah, happy to be here. Thanks for having me.

Michael:

Awesome. Our pleasure. And you're down in Atlanta, right?

Matt:

I am just outside of Atlanta, kind of in between Atlanta and Athens, where the University of Georgia is, it's about an hour gap in between the two and I sit sort of in between,

Michael:

Okay, good deal. And is it starting to get cold out there at this time of year,

Matt:

Um, colder for us, it’s all relative?

Michael:

It's all relative?

Matt:

It's, yeah, we're in our 50s range, which is starting to get cooler. But I talked to the guys on the west coast and hear them. They're covered with blankets at 65. Yeah, cooler for us.

Michael:

Okay, good deal. Well, what I wanted to chat with you about today is the Roofstock BYOP, bring your own property and the Rootstock Select programs, because I think that there's a lot of folks that would love to take advantage of both or one of those programs that maybe either don't know about it or don't know how to utilize it. So maybe we can start with the BYOP and then segue into the Select program.

Matt:

Okay, sounds great.

Michael:

So so that the Y o p, it's bring your own property program, can you talk to us at a high level? What is the program? How does it work? Why was it developed in the first place? And then we can kind of just talk through it a little bit more as we go.

Matt:

Yeah. So at a really high level, I think the goal of both of these programs was to bring more inventory to the marketplace for our buyers, in addition to the exclusive properties, which are just what they sound like, it's not sellers that bring their inventory to us to list directly. So both BYOP and select give us the opportunity to bring other properties to buyers, that may not be exclusive properties of Rootstock. So the BYOP rootstock has the infrastructure in place from a technology standpoint to underwrite any property in the United States. So we're making that technology available to our buyers, and that they can bring any address to us. And we will underwrite it for you and give an opinion on your investment. We can underwrite financials, we can give you neighborhood score, school scores, all of these things we can provide on any property that you bring to us.

Michael:

And all that's needed is an address, right? That's it. If you've got an account on roof stock, there's a site or a page where you could submit a property address and almost all scenarios it's going to be there, there are a few that might be missing something's brand new construction condo community that has the same address and 30 different unit numbers can sometimes be confusing for the system. But in almost all scenarios, a single family residential property, we will be able to pull up underwrite.

Michael:

Fantastic. And so for everybody who's listening, the place to find where to do that is if you go to the Learn tab, which is up in the upper right hand corner, near where it says Welcome back, and then your name, once you have an account, click on that learn drop down. And I think the 2,4,6, seventh drop down is the bring your own property page and you'll see a page highlighting some of the benefits there as well as a radio button to submit your own property and that right now it's only in a handful of markets, right? It's it's in Athens, Atlanta, Birmingham, Columbus, Greenville, Houston, Indianapolis, Jackson, Jacksonville, Memphis, Orlando, San Antonio, and Tampa. Do you know is that planning to expand anytime in the near future?

Matt:

Yeah, we are anticipating a really aggressive growth model, which I'm leading with few others within the company to expand into new markets with new agents to bring your own property program. If you submit a listing to us, we can technically underwrite it anywhere. It's just the guarantees that Roofstock offers will only be available in the markets where we have the infrastructure that property managers and attorneys and such already vetted. So yeah, if you bring anything anywhere, we should be able to give you a response with some sort of analysis on it just depends on whether or not we will be able to guarantee or certify it based on whether or not we're in that market already.

Michael:

Okay, and what are the guarantees rather?

Matt:

Yeah, so the roof guarantees, you'll see these advertised on the website as well. And I think there's a specific page dedicated to a very detailed analysis of it, but there's a lease up guarantee for any vacant property. So if you are looking at acquiring a property that does not have a tenant in place, we're stuck places I guarantee that it will lease up within a certain amount of time or they will start contributing towards the rental income that you would have received otherwise, at at least there's also a Buy back guarantee. So if you are unhappy with your investment within a period of 30 days, after closing, we're stuck. We'll buy it back from you and I have seen that actually happen a time or two so I can vouch for the validity of that guarantee.

Michael:

And that's a guarantee, I remember when I first started working through stocks that I was blown away by because that doesn't exist in the world that I'm aware of.

Matt:

Yeah, I've never seen it in 20 years of doing real estate. And I had some questions, frankly, when I joined about, you know, was that going to be laced with a lot of fine print and right, haven't seen it exercise often, just because buyers are typically happy with what they buy through our site. But when they have not been, for whatever reason, I have seen us buy properties back.

Michael:

That's so great. And what a nice kind of assurance that Roofstock is putting their money where their mouth is, so to speak, that, hey, this is a property we're going to stand behind. And if you don't like it, we'll buy it back from you.

Matt:

That's right. Yeah, we're really confident in what we put up on the side and back that with these guarantees.

Michael:

Fantastic, and how cool that's able to be applied to stuff that isn't getting put on the site, right? This is just individuals finding properties on their own submitting them to the site now Roofstock, doing the underwriting in the background checking, and still being confident enough to participate in that guarantee

Matt:

That’s right. Yeah. So again, going back to what our very first that this is just a way to get our investors access to as many properties as possible that are good investments. The exclusive inventory we have on the site is great, but it's limited in the number that I've signed up and published with us. So we're opening up new IP and the Select program, which we'll talk about later, which brings in some of the listed property underwritten through our technology, which kind of brings the best ones to the surface, and we publish those as well.

Michael:

Okay, awesome. And so with BYOP, just kind of the mechanics inner workings of it. So if I wanted to buy a property, does it need to be listed on the MLS? Can it be my mom's property that she wants to sell to me? What properties are eligible? Kind of, you know, outside of the ones that are listed in those markets? How do I find a property? How do I submit a property?

Matt:

Yeah, so it's, it's interesting, if these are conversations we're having, as the program evolves, we're having literally had one earlier got one tomorrow, but the BYOP program, it works best if the property is listed, because it's as simple as plugging in an MLS number, and letting our technology do the work to underwrite the property. If it's off market, that's not quite as easy because we have to gather tons of information, bedrooms, bathrooms, square footage, tenant occupied or vacant all these different things that go into a decision about whether or not we recommend it as an investment property are not publicly available to us, we still suggest that you send them in if you have something that you would like to buy, we've got representatives in all these markets. And it may be that we can still represent you provide you with a lot of valuable tools to make a decision yourself. Maybe we won't guarantee it, but we can still assist you with going through with the purchase if it's something that you really want to buy.

Michael:

Ah, fantastic. So okay, so if I'm a user and I want to submit a property, and I submit it to rootstock, let's say it's on the MLS rootstocks gonna come back with initial underwriting, and then they're going to tell me, Hey, we can either certify this and give you our guarantees, or we cannot, but you're still able to utilize us as your buyer broker.

Matt:

Correct. If it's on MLS, it's a really seamless process, you submit the address, and within, typically within 24 to 48 hours, sometimes faster, you'll get a response back from us that says, you know, here's, here's the information we found, and we will certify or not certify, and we'll copy in the local buyer broker in that market to assist you with preparing an offer. If you choose, the response will actually include a link to make a profit offer if you decide to do so we connect you with the agent to assist you.

Michael:

Perfect and and all that information that comes back from the BYOB program. What does that look like? Am I getting a report? Am I getting a type of listing?

Matt:

Yeah, if you've looked at a page on our website, a buyer or a property card from the site, so you do a search, you click on a property, it's going to open up a page with tons of information, all the financial analytics scores, neighborhood scores, you will get a link for that property you submitted that looks just like one of the property pages on our site.

Michael:

Awesome. And it will have all the calculators and slider bars just as it would if it was an exclusive property.

Michael:

It does. Yep, it will assume list price when it makes the financial calculations. But you can move that around if you intend to offer less. But yeah, you'll get the same info you want on one of our properties on the website.

Michael:

Perfect. Now what a cool program this is. I was really excited to learn about it.

Matt:

It's fantastic. We're still a young company in the grand scheme of things, and we are evolving and we're making our products better. This is a fantastic program and sky's the limit with this one. We're just getting started.

Michael:

So just to recap, if I go to any of these markets that are highlighted on the BYOB page, and I find a property, I can submit it to the VIP program Roofstocks going to tell me whether or not they can certify it, but I can transact on it regardless and purchase a property potentially get all of the benefits of roofstock the guarantees the lease up guarantee the buyback guarantee. And I found it myself and I just brought it to the site and I get those guarantees.

Matt:

That's right.

Michael:

Awesome.

Matt:

That's it. It's as simple as that.

Michael:

I love it. All right. So let's shift gears here a little bit because I know that there's a second type of property that is on the marketplace. We have the exclusive which you touched on earlier which is the seller coming to Roofstock saying please sell my property. And then we also have the Select Properties. Talk to us a little bit about what the Select are, why are they different? And how does that program work?

Matt:

Yeah, sure, happy to. So this is the program I work on day to day. So I can speak with some level of confidence about often how we got here, what we do every day in there. So select. Again, this is the third time I've said it, I feel like repeating myself, but it's another way that Roofstock bringing investment properties to our marketplace. Outside of our exclusive program, we are vetting as many properties as possible and putting them out there for our investors to see and transact on using our underwriting tool in our guarantees, or guarantees behind it. So select is basically where we partner up with local investment professionals in these particular markets to identify the best investment properties that are on the market in their local area. These are MLS properties. So this is where Roofstock brings the cream of the crop, I guess of MLS properties to the surface and publishes them on our site. And the way it works in the background is our local agents and figuring out who the players are in the investment space. When we choose a market, which also is not done haphazardly. We pick markets based on Wednesday, we felt like the investment potential is there, once we identify a market, we go in and set up the infrastructure. So we partner up and vet agents and partner up with specific agents, their property managers, title companies, inspectors, things of that nature.

So we get the infrastructure in place. And we do all of that for two reasons. One, because we want the buyer to have the best experience but also so that we're comfortable issuing a guarantee on it, we need to know that we have all these people in place to kind of check our analysis of properties and things of that nature. So yeah, so what happens kind of the beginning of it as a local broker that we've partnered with will make a suggestion to us have a good at what they consider a good investment property option in their local market. And we will underwrite it much the same as we would underwrite a BYOP property, we're going to do full analytics on everything from property age condition, floods on not floods on financial returns, expected, you know capex expense up out the gate, but then the property, full analysis of the property. If we agree with the agent, and it does meet our criteria, we can publish that to our site. It has a property guard and a make offer button just like our exclusive to and comes with the same guarantees Roofstock will guarantee these just as they will their exclusives.

Michael:

Fantastic. So as you were talking a question kind of came to mind. And you mentioned that the select properties are really the cream of the crop of what listed on the MLS. So if somebody wants to submit a BYOP property in the same market that a select property operates in, are they inclined to think well, the cream of the crop is already listed as a select, why would I possibly think I could find a better one with BYOB? Is that a fair question?

Matt:

It is a fair question certainly deserves an answer. And I would say this, you're assuming in our model, we are trusting our local agents to submit the properties that they identify. So a couple of things, one, these agents like everyone, they have a limited bandwidth of time, they are submitting things quickly, we're getting them on the site quickly. But they can only do so much. So if they've got a day full of appointments, they may not publish listings that day. So if you see something, it's not on the site, that does not mean it's not a good investment property, all likelihood means the agent just hasn't seen it yet. So do not hesitate to send those in. And then the other thing is, you know, I've always been intrigued by the idea of a quote unquote, good investment property. The perception of what's a good investment property, and be completely different. Yep, the local agent may be running things that he perceives as an eight cap, but you may be okay with a five if it's in a five star neighborhood. So that's another reason his filter may be set up a little bit different than what yours is personally. So again, don't hesitate to send those in. If it's not on the site.

Michael:

I think that's such a great point you make of time being such a limiting factor for folks. It's funny because personally, my primary residence that I bought, I found it and sent it to my agent and said, hey, let's check this out. And it actually happened to be listed in the same complex as the property that he showed me a different property. And so I found numerous properties online that I sent to agents that hey, you know, this is something looks interesting. I know you didn't find it. Let's go take a look at it. And they're like, Oh, yeah, great, fine.  

Matt:

yeah, it's no different than owner occupied real estate agents. I know, in the multiple moves I've made in the last 15 or 20 years, I think I found all of our houses myself, to the agent asked for an appointment. So yeah, same way you may be up at midnight looking for properties, and the agents not going to look until three or four o'clock the next day. It's just a timing issue, in most cases doesn't mean what you found is not a good property.

Michael:

That's great. That's great. All right. And so just to confirm, Matt so the Select property can be treated almost the same as an exclusive property if I'm seeing both on the site from in terms of transacting and making an offer, is that pretty safe. Are there differences I should be aware of?

Matt:

Yeah, very similar. The major difference, I think, between the two is one, in the rootstock exclusive properties, we have the agreement with the seller, and you would be treated, you know, not certainly, with full disclosure and all material facts would be disclosed nothing, the agency thing, it's not something I would worry about, but on the Select property, you would be assigned a broker in that local market as your representative to represent you in the negotiation.

Michael:

Okay.

Matt:

So instead of communicating directly with the seller, like on select, he would be working through a broker in a more traditional fashion and making the offers of negotiating, and then also with inspections and getting in for appraisals, and all the things that happen after a contract, you've got a representative and are never in touch with the seller or seller's agent. So there's some comfort, I think, in knowing you've got your own representative there.

Michael:

Sure. Okay. And the Select Properties, I'm not mistaken, don't have any of the diligence documents that the exclusive properties have, right?

Matt:

That's correct. Yeah, so in the exclusive properties, those are underwritten, and inspected prior to going live. So you will see a diligence vault on those that has a little more info than you'll see on select. However, the Select Properties when we make a contract, we negotiate a diligence due diligence timeline or inspection period contingency in your offer. So you will get a copy of an inspection back prior to any of your earnest money being non refundable. And that inspection is paid for by Roofstock. So that's another something else you do not see in other programs, or I've never seen it where the company you're going through is paying for your inspection. So you will be able to get property under contract, receive the inspection back and review it and attempt to negotiate repairs or concessions if needed. All before you have any earnest money at risk. Even though you're not seeing it pre offer, you still are seeing it before you have anything at risk.

Michael:

I was doing a presentation the other day, and we're talking about the restock exclusive properties. And only 15% of the ones that are submitted ever make it on to the website. And so there's this kind of culling process of getting rid of the not cream of the crop ones I guess we could say. And so on the exclusive properties after they get inspected, there are a number of things that can prevent them from becoming listings or becoming from prevent them from being certified rather, oftentimes they have repairs that need to get done very specific repairs that disqualify them, or the dollar amount can disqualify them. So could that happen with a select property to where after we get the inspection done turns out actually this property doesn't qualify for some of the guarantees?

Matt:

It can. I spend a large amount of my time training brokers on how to identify properties and which ones to select and submit, I suppose it's a better term there to the portal. So we're trying to eliminate the inventory that wouldn't select as much as possible prior to posting it. Now, when you're using a listing agents, photos and comments. It can be a little deceiving to when the actual inspection comes back. Occasionally, we'll see one with issues that were not evident from the listing. And that is the case, we will issue a notice that we have chosen not to certify, it's rare. It's usually something hidden, that we wouldn't have known otherwise, if there's a foundation problem if the roof’s 35 years old, and there's leaks that were not present in photos. Those are things that would keep us from certifying it, we can always try to negotiate that with the seller. And as long as they will make repairs, we'll go back and issue the certification. But yeah, that is true, we would not issue certification if there are major structural damages on the property.

Michael:

Okay. And then as the buyer though, do, I still have the opportunity to purchase the property, even if rootstock is not going to issue a certification on it.

Matt:

Again, as long as you know, the certification is not in place, you can move forward at your own risk. It's no problem at all. And that's very clearly specified when the inspection comes back, you will receive not only the inspection but have a really clear notice of whether or not the guarantee applies. I can tell you in most cases they do. It's fairly rare. It has to be something major foundation, roof, electrical, one of the major components for us to not issue a certification. I don't want buyers to get the impression we're looking for reasons not to we do issue it and in most cases.

Michael:

Okay, great. And then so just to reiterate what you said previously, after that inspection comes back, let's say the certification is not issued is the buyer side. Yeah, I'm only interested in pursuing a property that is certified, I can then walk away from the deal at no cost to me.

Matt:

Correct? Yeah. During that period, you can walk away. If you received the inspection back, you can walk away for any number of reasons based on the inspection, not just our guarantee not apply. But yes, if you once you've got a period there to get that inspection back and review and make a decision before any purchase money's at risk.

Michael:

Matt. So do you talk to us a little bit about where this program is in place currently and where it's hopefully going to be opening in the near future.

Matt:

We've got a number of markets where we are full speed and those are Atlanta, Georgia, Birmingham, Alabama, Jackson, Mississippi, Columbia, South Carolina. Indianapolis. So you can see a real southeastern trend there. And that's primarily because of population and demographic trends. But also because you can see some really great returns on investment there. And we have a lot of cash flow seeking buyers. But we do have into a number of markets that we're really close to going live with a couple of markets in Florida, a couple in Texas, Tucson, Rochester, Detroit, Tulsa, and Waco are all in the pipeline right now. And then we've got it next phase, just sitting waiting after it. So we're going to try in 2021, I anticipate a really aggressive geographic footprint expansion, or are these programs to the tune of hopefully 10 plus markets per month, I think we'll see a really aggressive growth program that we're rolling out as we speak.

Michael:

That's awesome.

Matt:

Yeah, really exciting.

Michael:

And so that we did a podcast with Mark woodling, where we talked about the new markets that we're opening, and half what that process look like. And so he was talking to us about the opening new markets. And so can you just give a high level overview of how do we decide which markets to go into and what new markets open?

Matt:

Yeah, so I think the markets that are identified to move into are chosen by a number of factors, both people in the company that are way smarter than I am. But with the assistance of technology that's way smarter than both of us. So they're looking at things like population trends, economic drivers jobs available, the diversity of the economy there. And then also, we are going to be looking at available inventory and the price points and rent rates in any particular market. So is there inventory available that will be attractive to the investors, we could pop up in every major city based on population and not have any inventory potentially, or we could bounce around in some of these other secondary and tertiary markets, where there are great trends available as far as local economies and demographics and such where there's tons of inventory available? So we're, it's a combination of the two factors.

Michael:

Yeah, that makes sense. And so is it safe to assume then that for all these new markets that we're opening to the Select program, those will also become available for VIP? Or is that program tend to lag a little bit behind the Select?

Matt:

Yeah, that's right. If we've got it, select open, that means we've got a partnership in place with an agent who is experienced and qualified for investment property, we've got a local property manager, at least one, usually three or more that we have vetted, and we are comfortable managing property for us or our customers. And we've got other contacts for things like title inspections, and things of that nature. So if we have that infrastructure in place to open up select, then we can underwrite pages as well.

Michael:

Awesome. Okay. And so that's Episode 18. How rootstock identifies strong rental markets and sources, power sellers, with Mark Woodling.

Matt:

And Mark and I are working together to Michael, that's just evolved over the past few weeks where Mark and I are working side by side talking on multiple times a day basis right now in the expansion of this program. It has, we were closely aligned initially when he was doing land expand, and I was doing select that we've kind of brought the two together and are working side by side in our efforts there. So Roofstock’s about a uniform strategy across the board.

Michael:

Fantastic. Yeah, it sounds like it makes total sense. You know, the two of you move in lockstep in that regard to open up new markets and open up these new programs. I think that makes total sense.

Matt:

Yeah. Really exciting.

Michael:

Awesome. So everybody, it sounds like keep your eyes peeled for some new markets. Do we publish that in advance of the new markets that are assumed to be up in live? Or do our folks here just getting a sneak peek, because we're lucky to have you on the show?

Matt:

Yeah, this is a sneak peek. Although what we will do when we start getting a select agent identified and in place, once we've reached terms and know we have the infrastructure, we will put them out on you know, some of the things that you guys do podcasts webinars, which is often a sneak peek before listings will go live on the site. And these agents love hearing from our customers and working with our customers, you you will in the Select program. Sometimes you can go all the way through the offer process before you meet the agent if you'd like. But if you would like to get their input from a local perspective prior to they are available to you, and we'd be happy to go over local market details if you'd like. So, you'll get to meet these people probably before any properties go online. If you continue listening to Michael and Tom's webinars and podcasts.

Michael:

Awesome. You literally just took the words out of my mouth. I was gonna ask how can folks get in touch with our local agents on the ground? Whatever market they're interested in? Is there a list is their contact information?

Matt:

Yeah, so buyers are typically working with an account executive prior to making an offer, helping them form their buy box and identify markets they'd like to be in and they have contact info for all of our our select brokers. So if you'd like to speak to someone prior to the account executive should be able to provide that directly for you.

Michael:

Perfect, perfect. That's great,

Matt:

Or they can reach out to me anytime directly as well. I can obviously get the director and be happy to put you in touch.

Michael:

Fantastic. All right. So Matt, shifting gears here just a little bit. I am curious, because I was playing a hypothetical buyer previously, is there any kind of tips or tricks you can share with our listeners for things they can do to be really successful when it comes to buying select properties?

Matt:

Yes, for sure. So actually, most of the transactions that come through, I'm copied in a lot of the transactions, I look at reports daily, see our offers and our success rates and kind of follow the trends along those lines. And there are a couple of things that are really obvious, I would suggest it in today's market. And this may change if we do a podcast a year from now, I tell you the exact opposite thing. Right now, the market is so hot, that things are going really, really quickly. And really close to or above what sellers are asking if it's the good inventory. So what I would advise buyers to do is understand going in, Roofstock has done the hard work for you of identifying the better properties. These are not properties that are going to sell at 80 or 90% of the price. These are the ones that are most of the time going to have competitive bid situations. And they're going to come in really quickly. So in the properties, I see buyers losing out on deals trying to get a 1% discount just because they want to feel like they won the negotiation.

Treat it as are deciding whether or not you want on a deal. Look at it as you know what the property is worth to you, and not what the listing prices. In my experience, I've seen people pay 50% of the list price and hate themselves a year later, I've seen people pay 120% of list price and feel like they stole it. So don't get caught up in the negotiation game and feeling like you have to win and need $1,000 off and miss the deal completely. That's one tip. The other one would be when you make an offer, be ready to move quickly, your agent is going to reach out quickly with the offer to sign. And that's getting in quick is a key to getting a high acceptance rate in the Select game.

Once it goes live on our site, they're going to get the best ones get multiple offers, sometimes from Roofstock alone. And when we talk to the agents that have been listed, they've already got two or three in hand. So just the one who really puts in a strong offer and responds quickly is the most likely to have a positive outcome in my experience.

Michael:

Yeah, those are really great, great points and tips. It's something I talk a lot about in the academy is when it comes to negotiation and stuff. Ego is such a big driver in this everybody likes to win, nobody likes to feel like they lost. And so if it's you know, they say 2000, I'll counter out 1000. And it's like, at the end of the day, that's 200 bucks at a pocket if you're leveraging 80% loan to value. So your mortgage payments going to be an extra $3 because you're borrowing an extra 100 bucks over 30 years. Like Come on.

Matt:

That's right. That's right. Yeah. And there are situations where it makes sense if you've got cash available, you know, cash offers, win over financed offers, if the dollar amounts the same or close, if you've got cash available, come in as aggressive as you can on these really attractive deals, refinance it after the fact if it's something you've just got to have go in aggressively on the front. It's just must be right now in the current climate we're in.

Michael:

That's really great insight. And you're seeing that nationwide across all this lock markets, all of the markets we've chosen, yes, I'm hearing it, I have not talked to many people in markets where it's slow right now, within select or otherwise. But within select these guys are extremely busy and involved in multi offer situations. Many times in the Properties you're in a hot market, and the hottest properties are being chosen. So they're not going to sit around for long.

Michael:

So Matt, for those people who are looking to purchase properties at that kind of maybe discounted rate at 90%, whatever or get a little bit of a discount on the value. I mean, do we have a place for them on restock, or should they be looking to transact us exclusively off the marketplace?

Matt:

We do. So like I said earlier, buyers will put their will set in their mind that value is being the primary guide rather than the listing price. We do have a tool on the search page. If you're on this site looking at properties under the more filters section at the bottom there is a discount to list rating which will allow you to sort properties by which ones are priced at the greatest discount to perceived value rather than list price we do not typically allow offer prices at substantial discount to list but there is a way to search here by discount value, which is the way it should be so feel free to use that anytime.

Michael:

Perfect. And then yeah, folks click on the Analysis tab. on that property listing. You'll see the valuation report or the anticipated property value in addition to the Property Valuation Report so you can see what comps have sold in the area for that property evaluation to come to that conclusion. So really great way to buy under market value. properties.

Matt:

Yeah. And Michael, I'll lower on that, I'll plug that more tab on the property search, there are a number of options underneath that, that I don't think get seen or used very often that are super helpful, including under bottom left corner is the listing source, that's where you can sort by just select or just exclusive properties. So if you are interested, if you've seen what's there on the exclusive range, and just want to pull up the Select along, that's where you would do that. You can also sort by a variety of other rates and returns using that tab itself and bypass by buy or something.

Michael:

And then after you set some of those filters, you can also click on Save after you've named it. And then anytime a property comes into that criteria, or a new property is listed, you'll get an email notification. So I think it's a super helpful way to stay on top of properties. Because I know in the academy, I'll have someone send me a message Hey, can we evaluate this property this afternoon, and by the time we get around to our call that property has already been snatched up under contract. So yep, being quick on the draw is important these days.

Matt:

Most active buyers on Roofstock have the safe searches because I see when a good property goes up. And offers are soon to follow. So it's not. It's not the guy that's checking in once every two days. It's the one who's getting pinged and ready to act.

Michael:

Ready to make moves. Yeah, it makes total sense makes total sense. Well, Matt, this has been super awesome. Anything else folks should know about the BYOP or the Select program Before I let you out of here?

Matt:

No, I don't think so. We're always making attempts to bring more inventory to the market for you guys big expansion plans for next year, as we talked about earlier, and don't discount the BYOD program. It's we are working out some inefficiencies there that we're going to make better in near term that is a powerful, powerful tool that can get you some really sweet guarantees on properties that you find on your own for bringing it through Roofstock tons of valuable data and information that we can provide that the guarantees are alone are worth bringing it through to us. So don't discount the value there.  

Michael:

Awesome. And so Matt, what's the best way for folks that have additional questions to get ahold of you?

Matt:

Yeah, like I said earlier, you can talk to your account executive got my info or any local brokers. But if you want to reach out to me directly, it's [email protected].

Michael:

Awesome. Well, Matt, thanks so much for hanging out talking us through these new programs. Really appreciate your time. And I'm sure we'll have you on again soon.

Matt:

Yeah, great. enjoyed it. Have a great day.

Michael:

Thanks. You too.

That was our episode. Thanks so much for listening. A big big, big thank you to Matt Thomas. Super  fun, really, really insightful. Really interesting to learn how buyers can be successful and then also learning about the programs as a whole. If you liked this episode, feel free to leave us a rating or review wherever it is you listen to your podcasts, and we look forward to seeing you on the next one. Happy investing.

In this episode, Matt Thomas, Roofstock's retail broker manager covers the details of the Roofstock Select and BYOP programs. 

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Transcript

Michael:

Hey everybody, welcome to another episode of The Remote Real Estate Investor. I'm Michael Albaum and today I'm joined by Matt Thomas, who's Roofstock’s retail broker manager. And so today Matt is going to be talking to us about Rootstock’s BYOP, and Roofstock Select programs. So these programs are kind of ever evolving and ever changing. So by the time you listen to this episode, there might be some minor changes to the program. So just keep that in mind as you are looking online and check out roofstock.com for the most up to date information about those programs. So let's get into it.

Matt, thank you so much for taking the time out of your busy schedule for joining us today. I really appreciate it.

Matt:

Yeah, happy to be here. Thanks for having me.

Michael:

Awesome. Our pleasure. And you're down in Atlanta, right?

Matt:

I am just outside of Atlanta, kind of in between Atlanta and Athens, where the University of Georgia is, it's about an hour gap in between the two and I sit sort of in between,

Michael:

Okay, good deal. And is it starting to get cold out there at this time of year,

Matt:

Um, colder for us, it’s all relative?

Michael:

It's all relative?

Matt:

It's, yeah, we're in our 50s range, which is starting to get cooler. But I talked to the guys on the west coast and hear them. They're covered with blankets at 65. Yeah, cooler for us.

Michael:

Okay, good deal. Well, what I wanted to chat with you about today is the Roofstock BYOP, bring your own property and the Rootstock Select programs, because I think that there's a lot of folks that would love to take advantage of both or one of those programs that maybe either don't know about it or don't know how to utilize it. So maybe we can start with the BYOP and then segue into the Select program.

Matt:

Okay, sounds great.

Michael:

So so that the Y o p, it's bring your own property program, can you talk to us at a high level? What is the program? How does it work? Why was it developed in the first place? And then we can kind of just talk through it a little bit more as we go.

Matt:

Yeah. So at a really high level, I think the goal of both of these programs was to bring more inventory to the marketplace for our buyers, in addition to the exclusive properties, which are just what they sound like, it's not sellers that bring their inventory to us to list directly. So both BYOP and select give us the opportunity to bring other properties to buyers, that may not be exclusive properties of Rootstock. So the BYOP rootstock has the infrastructure in place from a technology standpoint to underwrite any property in the United States. So we're making that technology available to our buyers, and that they can bring any address to us. And we will underwrite it for you and give an opinion on your investment. We can underwrite financials, we can give you neighborhood score, school scores, all of these things we can provide on any property that you bring to us.

Michael:

And all that's needed is an address, right? That's it. If you've got an account on roof stock, there's a site or a page where you could submit a property address and almost all scenarios it's going to be there, there are a few that might be missing something's brand new construction condo community that has the same address and 30 different unit numbers can sometimes be confusing for the system. But in almost all scenarios, a single family residential property, we will be able to pull up underwrite.

Michael:

Fantastic. And so for everybody who's listening, the place to find where to do that is if you go to the Learn tab, which is up in the upper right hand corner, near where it says Welcome back, and then your name, once you have an account, click on that learn drop down. And I think the 2,4,6, seventh drop down is the bring your own property page and you'll see a page highlighting some of the benefits there as well as a radio button to submit your own property and that right now it's only in a handful of markets, right? It's it's in Athens, Atlanta, Birmingham, Columbus, Greenville, Houston, Indianapolis, Jackson, Jacksonville, Memphis, Orlando, San Antonio, and Tampa. Do you know is that planning to expand anytime in the near future?

Matt:

Yeah, we are anticipating a really aggressive growth model, which I'm leading with few others within the company to expand into new markets with new agents to bring your own property program. If you submit a listing to us, we can technically underwrite it anywhere. It's just the guarantees that Roofstock offers will only be available in the markets where we have the infrastructure that property managers and attorneys and such already vetted. So yeah, if you bring anything anywhere, we should be able to give you a response with some sort of analysis on it just depends on whether or not we will be able to guarantee or certify it based on whether or not we're in that market already.

Michael:

Okay, and what are the guarantees rather?

Matt:

Yeah, so the roof guarantees, you'll see these advertised on the website as well. And I think there's a specific page dedicated to a very detailed analysis of it, but there's a lease up guarantee for any vacant property. So if you are looking at acquiring a property that does not have a tenant in place, we're stuck places I guarantee that it will lease up within a certain amount of time or they will start contributing towards the rental income that you would have received otherwise, at at least there's also a Buy back guarantee. So if you are unhappy with your investment within a period of 30 days, after closing, we're stuck. We'll buy it back from you and I have seen that actually happen a time or two so I can vouch for the validity of that guarantee.

Michael:

And that's a guarantee, I remember when I first started working through stocks that I was blown away by because that doesn't exist in the world that I'm aware of.

Matt:

Yeah, I've never seen it in 20 years of doing real estate. And I had some questions, frankly, when I joined about, you know, was that going to be laced with a lot of fine print and right, haven't seen it exercise often, just because buyers are typically happy with what they buy through our site. But when they have not been, for whatever reason, I have seen us buy properties back.

Michael:

That's so great. And what a nice kind of assurance that Roofstock is putting their money where their mouth is, so to speak, that, hey, this is a property we're going to stand behind. And if you don't like it, we'll buy it back from you.

Matt:

That's right. Yeah, we're really confident in what we put up on the side and back that with these guarantees.

Michael:

Fantastic, and how cool that's able to be applied to stuff that isn't getting put on the site, right? This is just individuals finding properties on their own submitting them to the site now Roofstock, doing the underwriting in the background checking, and still being confident enough to participate in that guarantee

Matt:

That’s right. Yeah. So again, going back to what our very first that this is just a way to get our investors access to as many properties as possible that are good investments. The exclusive inventory we have on the site is great, but it's limited in the number that I've signed up and published with us. So we're opening up new IP and the Select program, which we'll talk about later, which brings in some of the listed property underwritten through our technology, which kind of brings the best ones to the surface, and we publish those as well.

Michael:

Okay, awesome. And so with BYOP, just kind of the mechanics inner workings of it. So if I wanted to buy a property, does it need to be listed on the MLS? Can it be my mom's property that she wants to sell to me? What properties are eligible? Kind of, you know, outside of the ones that are listed in those markets? How do I find a property? How do I submit a property?

Matt:

Yeah, so it's, it's interesting, if these are conversations we're having, as the program evolves, we're having literally had one earlier got one tomorrow, but the BYOP program, it works best if the property is listed, because it's as simple as plugging in an MLS number, and letting our technology do the work to underwrite the property. If it's off market, that's not quite as easy because we have to gather tons of information, bedrooms, bathrooms, square footage, tenant occupied or vacant all these different things that go into a decision about whether or not we recommend it as an investment property are not publicly available to us, we still suggest that you send them in if you have something that you would like to buy, we've got representatives in all these markets. And it may be that we can still represent you provide you with a lot of valuable tools to make a decision yourself. Maybe we won't guarantee it, but we can still assist you with going through with the purchase if it's something that you really want to buy.

Michael:

Ah, fantastic. So okay, so if I'm a user and I want to submit a property, and I submit it to rootstock, let's say it's on the MLS rootstocks gonna come back with initial underwriting, and then they're going to tell me, Hey, we can either certify this and give you our guarantees, or we cannot, but you're still able to utilize us as your buyer broker.

Matt:

Correct. If it's on MLS, it's a really seamless process, you submit the address, and within, typically within 24 to 48 hours, sometimes faster, you'll get a response back from us that says, you know, here's, here's the information we found, and we will certify or not certify, and we'll copy in the local buyer broker in that market to assist you with preparing an offer. If you choose, the response will actually include a link to make a profit offer if you decide to do so we connect you with the agent to assist you.

Michael:

Perfect and and all that information that comes back from the BYOB program. What does that look like? Am I getting a report? Am I getting a type of listing?

Matt:

Yeah, if you've looked at a page on our website, a buyer or a property card from the site, so you do a search, you click on a property, it's going to open up a page with tons of information, all the financial analytics scores, neighborhood scores, you will get a link for that property you submitted that looks just like one of the property pages on our site.

Michael:

Awesome. And it will have all the calculators and slider bars just as it would if it was an exclusive property.

Michael:

It does. Yep, it will assume list price when it makes the financial calculations. But you can move that around if you intend to offer less. But yeah, you'll get the same info you want on one of our properties on the website.

Michael:

Perfect. Now what a cool program this is. I was really excited to learn about it.

Matt:

It's fantastic. We're still a young company in the grand scheme of things, and we are evolving and we're making our products better. This is a fantastic program and sky's the limit with this one. We're just getting started.

Michael:

So just to recap, if I go to any of these markets that are highlighted on the BYOB page, and I find a property, I can submit it to the VIP program Roofstocks going to tell me whether or not they can certify it, but I can transact on it regardless and purchase a property potentially get all of the benefits of roofstock the guarantees the lease up guarantee the buyback guarantee. And I found it myself and I just brought it to the site and I get those guarantees.

Matt:

That's right.

Michael:

Awesome.

Matt:

That's it. It's as simple as that.

Michael:

I love it. All right. So let's shift gears here a little bit because I know that there's a second type of property that is on the marketplace. We have the exclusive which you touched on earlier which is the seller coming to Roofstock saying please sell my property. And then we also have the Select Properties. Talk to us a little bit about what the Select are, why are they different? And how does that program work?

Matt:

Yeah, sure, happy to. So this is the program I work on day to day. So I can speak with some level of confidence about often how we got here, what we do every day in there. So select. Again, this is the third time I've said it, I feel like repeating myself, but it's another way that Roofstock bringing investment properties to our marketplace. Outside of our exclusive program, we are vetting as many properties as possible and putting them out there for our investors to see and transact on using our underwriting tool in our guarantees, or guarantees behind it. So select is basically where we partner up with local investment professionals in these particular markets to identify the best investment properties that are on the market in their local area. These are MLS properties. So this is where Roofstock brings the cream of the crop, I guess of MLS properties to the surface and publishes them on our site. And the way it works in the background is our local agents and figuring out who the players are in the investment space. When we choose a market, which also is not done haphazardly. We pick markets based on Wednesday, we felt like the investment potential is there, once we identify a market, we go in and set up the infrastructure. So we partner up and vet agents and partner up with specific agents, their property managers, title companies, inspectors, things of that nature.

So we get the infrastructure in place. And we do all of that for two reasons. One, because we want the buyer to have the best experience but also so that we're comfortable issuing a guarantee on it, we need to know that we have all these people in place to kind of check our analysis of properties and things of that nature. So yeah, so what happens kind of the beginning of it as a local broker that we've partnered with will make a suggestion to us have a good at what they consider a good investment property option in their local market. And we will underwrite it much the same as we would underwrite a BYOP property, we're going to do full analytics on everything from property age condition, floods on not floods on financial returns, expected, you know capex expense up out the gate, but then the property, full analysis of the property. If we agree with the agent, and it does meet our criteria, we can publish that to our site. It has a property guard and a make offer button just like our exclusive to and comes with the same guarantees Roofstock will guarantee these just as they will their exclusives.

Michael:

Fantastic. So as you were talking a question kind of came to mind. And you mentioned that the select properties are really the cream of the crop of what listed on the MLS. So if somebody wants to submit a BYOP property in the same market that a select property operates in, are they inclined to think well, the cream of the crop is already listed as a select, why would I possibly think I could find a better one with BYOB? Is that a fair question?

Matt:

It is a fair question certainly deserves an answer. And I would say this, you're assuming in our model, we are trusting our local agents to submit the properties that they identify. So a couple of things, one, these agents like everyone, they have a limited bandwidth of time, they are submitting things quickly, we're getting them on the site quickly. But they can only do so much. So if they've got a day full of appointments, they may not publish listings that day. So if you see something, it's not on the site, that does not mean it's not a good investment property, all likelihood means the agent just hasn't seen it yet. So do not hesitate to send those in. And then the other thing is, you know, I've always been intrigued by the idea of a quote unquote, good investment property. The perception of what's a good investment property, and be completely different. Yep, the local agent may be running things that he perceives as an eight cap, but you may be okay with a five if it's in a five star neighborhood. So that's another reason his filter may be set up a little bit different than what yours is personally. So again, don't hesitate to send those in. If it's not on the site.

Michael:

I think that's such a great point you make of time being such a limiting factor for folks. It's funny because personally, my primary residence that I bought, I found it and sent it to my agent and said, hey, let's check this out. And it actually happened to be listed in the same complex as the property that he showed me a different property. And so I found numerous properties online that I sent to agents that hey, you know, this is something looks interesting. I know you didn't find it. Let's go take a look at it. And they're like, Oh, yeah, great, fine.  

Matt:

yeah, it's no different than owner occupied real estate agents. I know, in the multiple moves I've made in the last 15 or 20 years, I think I found all of our houses myself, to the agent asked for an appointment. So yeah, same way you may be up at midnight looking for properties, and the agents not going to look until three or four o'clock the next day. It's just a timing issue, in most cases doesn't mean what you found is not a good property.

Michael:

That's great. That's great. All right. And so just to confirm, Matt so the Select property can be treated almost the same as an exclusive property if I'm seeing both on the site from in terms of transacting and making an offer, is that pretty safe. Are there differences I should be aware of?

Matt:

Yeah, very similar. The major difference, I think, between the two is one, in the rootstock exclusive properties, we have the agreement with the seller, and you would be treated, you know, not certainly, with full disclosure and all material facts would be disclosed nothing, the agency thing, it's not something I would worry about, but on the Select property, you would be assigned a broker in that local market as your representative to represent you in the negotiation.

Michael:

Okay.

Matt:

So instead of communicating directly with the seller, like on select, he would be working through a broker in a more traditional fashion and making the offers of negotiating, and then also with inspections and getting in for appraisals, and all the things that happen after a contract, you've got a representative and are never in touch with the seller or seller's agent. So there's some comfort, I think, in knowing you've got your own representative there.

Michael:

Sure. Okay. And the Select Properties, I'm not mistaken, don't have any of the diligence documents that the exclusive properties have, right?

Matt:

That's correct. Yeah, so in the exclusive properties, those are underwritten, and inspected prior to going live. So you will see a diligence vault on those that has a little more info than you'll see on select. However, the Select Properties when we make a contract, we negotiate a diligence due diligence timeline or inspection period contingency in your offer. So you will get a copy of an inspection back prior to any of your earnest money being non refundable. And that inspection is paid for by Roofstock. So that's another something else you do not see in other programs, or I've never seen it where the company you're going through is paying for your inspection. So you will be able to get property under contract, receive the inspection back and review it and attempt to negotiate repairs or concessions if needed. All before you have any earnest money at risk. Even though you're not seeing it pre offer, you still are seeing it before you have anything at risk.

Michael:

I was doing a presentation the other day, and we're talking about the restock exclusive properties. And only 15% of the ones that are submitted ever make it on to the website. And so there's this kind of culling process of getting rid of the not cream of the crop ones I guess we could say. And so on the exclusive properties after they get inspected, there are a number of things that can prevent them from becoming listings or becoming from prevent them from being certified rather, oftentimes they have repairs that need to get done very specific repairs that disqualify them, or the dollar amount can disqualify them. So could that happen with a select property to where after we get the inspection done turns out actually this property doesn't qualify for some of the guarantees?

Matt:

It can. I spend a large amount of my time training brokers on how to identify properties and which ones to select and submit, I suppose it's a better term there to the portal. So we're trying to eliminate the inventory that wouldn't select as much as possible prior to posting it. Now, when you're using a listing agents, photos and comments. It can be a little deceiving to when the actual inspection comes back. Occasionally, we'll see one with issues that were not evident from the listing. And that is the case, we will issue a notice that we have chosen not to certify, it's rare. It's usually something hidden, that we wouldn't have known otherwise, if there's a foundation problem if the roof’s 35 years old, and there's leaks that were not present in photos. Those are things that would keep us from certifying it, we can always try to negotiate that with the seller. And as long as they will make repairs, we'll go back and issue the certification. But yeah, that is true, we would not issue certification if there are major structural damages on the property.

Michael:

Okay. And then as the buyer though, do, I still have the opportunity to purchase the property, even if rootstock is not going to issue a certification on it.

Matt:

Again, as long as you know, the certification is not in place, you can move forward at your own risk. It's no problem at all. And that's very clearly specified when the inspection comes back, you will receive not only the inspection but have a really clear notice of whether or not the guarantee applies. I can tell you in most cases they do. It's fairly rare. It has to be something major foundation, roof, electrical, one of the major components for us to not issue a certification. I don't want buyers to get the impression we're looking for reasons not to we do issue it and in most cases.

Michael:

Okay, great. And then so just to reiterate what you said previously, after that inspection comes back, let's say the certification is not issued is the buyer side. Yeah, I'm only interested in pursuing a property that is certified, I can then walk away from the deal at no cost to me.

Matt:

Correct? Yeah. During that period, you can walk away. If you received the inspection back, you can walk away for any number of reasons based on the inspection, not just our guarantee not apply. But yes, if you once you've got a period there to get that inspection back and review and make a decision before any purchase money's at risk.

Michael:

Matt. So do you talk to us a little bit about where this program is in place currently and where it's hopefully going to be opening in the near future.

Matt:

We've got a number of markets where we are full speed and those are Atlanta, Georgia, Birmingham, Alabama, Jackson, Mississippi, Columbia, South Carolina. Indianapolis. So you can see a real southeastern trend there. And that's primarily because of population and demographic trends. But also because you can see some really great returns on investment there. And we have a lot of cash flow seeking buyers. But we do have into a number of markets that we're really close to going live with a couple of markets in Florida, a couple in Texas, Tucson, Rochester, Detroit, Tulsa, and Waco are all in the pipeline right now. And then we've got it next phase, just sitting waiting after it. So we're going to try in 2021, I anticipate a really aggressive geographic footprint expansion, or are these programs to the tune of hopefully 10 plus markets per month, I think we'll see a really aggressive growth program that we're rolling out as we speak.

Michael:

That's awesome.

Matt:

Yeah, really exciting.

Michael:

And so that we did a podcast with Mark woodling, where we talked about the new markets that we're opening, and half what that process look like. And so he was talking to us about the opening new markets. And so can you just give a high level overview of how do we decide which markets to go into and what new markets open?

Matt:

Yeah, so I think the markets that are identified to move into are chosen by a number of factors, both people in the company that are way smarter than I am. But with the assistance of technology that's way smarter than both of us. So they're looking at things like population trends, economic drivers jobs available, the diversity of the economy there. And then also, we are going to be looking at available inventory and the price points and rent rates in any particular market. So is there inventory available that will be attractive to the investors, we could pop up in every major city based on population and not have any inventory potentially, or we could bounce around in some of these other secondary and tertiary markets, where there are great trends available as far as local economies and demographics and such where there's tons of inventory available? So we're, it's a combination of the two factors.

Michael:

Yeah, that makes sense. And so is it safe to assume then that for all these new markets that we're opening to the Select program, those will also become available for VIP? Or is that program tend to lag a little bit behind the Select?

Matt:

Yeah, that's right. If we've got it, select open, that means we've got a partnership in place with an agent who is experienced and qualified for investment property, we've got a local property manager, at least one, usually three or more that we have vetted, and we are comfortable managing property for us or our customers. And we've got other contacts for things like title inspections, and things of that nature. So if we have that infrastructure in place to open up select, then we can underwrite pages as well.

Michael:

Awesome. Okay. And so that's Episode 18. How rootstock identifies strong rental markets and sources, power sellers, with Mark Woodling.

Matt:

And Mark and I are working together to Michael, that's just evolved over the past few weeks where Mark and I are working side by side talking on multiple times a day basis right now in the expansion of this program. It has, we were closely aligned initially when he was doing land expand, and I was doing select that we've kind of brought the two together and are working side by side in our efforts there. So Roofstock’s about a uniform strategy across the board.

Michael:

Fantastic. Yeah, it sounds like it makes total sense. You know, the two of you move in lockstep in that regard to open up new markets and open up these new programs. I think that makes total sense.

Matt:

Yeah. Really exciting.

Michael:

Awesome. So everybody, it sounds like keep your eyes peeled for some new markets. Do we publish that in advance of the new markets that are assumed to be up in live? Or do our folks here just getting a sneak peek, because we're lucky to have you on the show?

Matt:

Yeah, this is a sneak peek. Although what we will do when we start getting a select agent identified and in place, once we've reached terms and know we have the infrastructure, we will put them out on you know, some of the things that you guys do podcasts webinars, which is often a sneak peek before listings will go live on the site. And these agents love hearing from our customers and working with our customers, you you will in the Select program. Sometimes you can go all the way through the offer process before you meet the agent if you'd like. But if you would like to get their input from a local perspective prior to they are available to you, and we'd be happy to go over local market details if you'd like. So, you'll get to meet these people probably before any properties go online. If you continue listening to Michael and Tom's webinars and podcasts.

Michael:

Awesome. You literally just took the words out of my mouth. I was gonna ask how can folks get in touch with our local agents on the ground? Whatever market they're interested in? Is there a list is their contact information?

Matt:

Yeah, so buyers are typically working with an account executive prior to making an offer, helping them form their buy box and identify markets they'd like to be in and they have contact info for all of our our select brokers. So if you'd like to speak to someone prior to the account executive should be able to provide that directly for you.

Michael:

Perfect, perfect. That's great,

Matt:

Or they can reach out to me anytime directly as well. I can obviously get the director and be happy to put you in touch.

Michael:

Fantastic. All right. So Matt, shifting gears here just a little bit. I am curious, because I was playing a hypothetical buyer previously, is there any kind of tips or tricks you can share with our listeners for things they can do to be really successful when it comes to buying select properties?

Matt:

Yes, for sure. So actually, most of the transactions that come through, I'm copied in a lot of the transactions, I look at reports daily, see our offers and our success rates and kind of follow the trends along those lines. And there are a couple of things that are really obvious, I would suggest it in today's market. And this may change if we do a podcast a year from now, I tell you the exact opposite thing. Right now, the market is so hot, that things are going really, really quickly. And really close to or above what sellers are asking if it's the good inventory. So what I would advise buyers to do is understand going in, Roofstock has done the hard work for you of identifying the better properties. These are not properties that are going to sell at 80 or 90% of the price. These are the ones that are most of the time going to have competitive bid situations. And they're going to come in really quickly. So in the properties, I see buyers losing out on deals trying to get a 1% discount just because they want to feel like they won the negotiation.

Treat it as are deciding whether or not you want on a deal. Look at it as you know what the property is worth to you, and not what the listing prices. In my experience, I've seen people pay 50% of the list price and hate themselves a year later, I've seen people pay 120% of list price and feel like they stole it. So don't get caught up in the negotiation game and feeling like you have to win and need $1,000 off and miss the deal completely. That's one tip. The other one would be when you make an offer, be ready to move quickly, your agent is going to reach out quickly with the offer to sign. And that's getting in quick is a key to getting a high acceptance rate in the Select game.

Once it goes live on our site, they're going to get the best ones get multiple offers, sometimes from Roofstock alone. And when we talk to the agents that have been listed, they've already got two or three in hand. So just the one who really puts in a strong offer and responds quickly is the most likely to have a positive outcome in my experience.

Michael:

Yeah, those are really great, great points and tips. It's something I talk a lot about in the academy is when it comes to negotiation and stuff. Ego is such a big driver in this everybody likes to win, nobody likes to feel like they lost. And so if it's you know, they say 2000, I'll counter out 1000. And it's like, at the end of the day, that's 200 bucks at a pocket if you're leveraging 80% loan to value. So your mortgage payments going to be an extra $3 because you're borrowing an extra 100 bucks over 30 years. Like Come on.

Matt:

That's right. That's right. Yeah. And there are situations where it makes sense if you've got cash available, you know, cash offers, win over financed offers, if the dollar amounts the same or close, if you've got cash available, come in as aggressive as you can on these really attractive deals, refinance it after the fact if it's something you've just got to have go in aggressively on the front. It's just must be right now in the current climate we're in.

Michael:

That's really great insight. And you're seeing that nationwide across all this lock markets, all of the markets we've chosen, yes, I'm hearing it, I have not talked to many people in markets where it's slow right now, within select or otherwise. But within select these guys are extremely busy and involved in multi offer situations. Many times in the Properties you're in a hot market, and the hottest properties are being chosen. So they're not going to sit around for long.

Michael:

So Matt, for those people who are looking to purchase properties at that kind of maybe discounted rate at 90%, whatever or get a little bit of a discount on the value. I mean, do we have a place for them on restock, or should they be looking to transact us exclusively off the marketplace?

Matt:

We do. So like I said earlier, buyers will put their will set in their mind that value is being the primary guide rather than the listing price. We do have a tool on the search page. If you're on this site looking at properties under the more filters section at the bottom there is a discount to list rating which will allow you to sort properties by which ones are priced at the greatest discount to perceived value rather than list price we do not typically allow offer prices at substantial discount to list but there is a way to search here by discount value, which is the way it should be so feel free to use that anytime.

Michael:

Perfect. And then yeah, folks click on the Analysis tab. on that property listing. You'll see the valuation report or the anticipated property value in addition to the Property Valuation Report so you can see what comps have sold in the area for that property evaluation to come to that conclusion. So really great way to buy under market value. properties.

Matt:

Yeah. And Michael, I'll lower on that, I'll plug that more tab on the property search, there are a number of options underneath that, that I don't think get seen or used very often that are super helpful, including under bottom left corner is the listing source, that's where you can sort by just select or just exclusive properties. So if you are interested, if you've seen what's there on the exclusive range, and just want to pull up the Select along, that's where you would do that. You can also sort by a variety of other rates and returns using that tab itself and bypass by buy or something.

Michael:

And then after you set some of those filters, you can also click on Save after you've named it. And then anytime a property comes into that criteria, or a new property is listed, you'll get an email notification. So I think it's a super helpful way to stay on top of properties. Because I know in the academy, I'll have someone send me a message Hey, can we evaluate this property this afternoon, and by the time we get around to our call that property has already been snatched up under contract. So yep, being quick on the draw is important these days.

Matt:

Most active buyers on Roofstock have the safe searches because I see when a good property goes up. And offers are soon to follow. So it's not. It's not the guy that's checking in once every two days. It's the one who's getting pinged and ready to act.

Michael:

Ready to make moves. Yeah, it makes total sense makes total sense. Well, Matt, this has been super awesome. Anything else folks should know about the BYOP or the Select program Before I let you out of here?

Matt:

No, I don't think so. We're always making attempts to bring more inventory to the market for you guys big expansion plans for next year, as we talked about earlier, and don't discount the BYOD program. It's we are working out some inefficiencies there that we're going to make better in near term that is a powerful, powerful tool that can get you some really sweet guarantees on properties that you find on your own for bringing it through Roofstock tons of valuable data and information that we can provide that the guarantees are alone are worth bringing it through to us. So don't discount the value there.  

Michael:

Awesome. And so Matt, what's the best way for folks that have additional questions to get ahold of you?

Matt:

Yeah, like I said earlier, you can talk to your account executive got my info or any local brokers. But if you want to reach out to me directly, it's [email protected].

Michael:

Awesome. Well, Matt, thanks so much for hanging out talking us through these new programs. Really appreciate your time. And I'm sure we'll have you on again soon.

Matt:

Yeah, great. enjoyed it. Have a great day.

Michael:

Thanks. You too.

That was our episode. Thanks so much for listening. A big big, big thank you to Matt Thomas. Super  fun, really, really insightful. Really interesting to learn how buyers can be successful and then also learning about the programs as a whole. If you liked this episode, feel free to leave us a rating or review wherever it is you listen to your podcasts, and we look forward to seeing you on the next one. Happy investing.