The SFR Show

With the holidays upon us, is it a good time to buy properties? In this short episode, we talk about a few benefits, risks and considerations about buying right now. 

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Transcript

Michael:

Hey everybody welcome to another episode of The Real Estate Investor. My name is Michael Albaum and today I'm joined by my co hosts

Emil:

Emil Shour

Tom:

Tom Schneider

Pierre:

Pierre Carrillo

Michael:

And today we're gonna be tackling whether or not the holidays can present a good or bad time to buy real estate. So let's jump into it.

Michael:

So guys, we just passed Thanksgiving today reporting this the first of December about to approach the full fledge holiday season. is now a good time to buy. yea or nay everything in between. Emil, what are your thoughts?

Emil:

Hell, yeah. Right. now's a good time to buy. People or your competition, ie other buyers, sleeping, getting ready for the holidays. I think just overall you have less competition during this time of year. I think it's been proven through stats most you know you get the best deals December January timeframe typically. So I think if you're in a position to buy right now is a great time I am active. I mean, I think you should always be active but I think December January can be a great time to snag property.

Michael:

Right on. Tom?

Tom:

Tryptophane. Is that what's in turkey? and red wine?

Michael:

Yeah!

Tom:

Sluggish. Yeah, tastes like opportunity. But what I do is I get tryptophane free turkey and then I just hit the market. Getting the jump on everybody else. Yeah, get the jump on everyone. I would say it's, it is as good a day as any day to do buying. So you know, stick to your process, building your buy box analyzing properties. And I would try not to have too big of gotta buy now glasses or don't gotta buy now glasses. Just let the market speak. Let your work, speak and finding property. So I guess not a very specific answer. But it would be my honest answer is continue to your work and analyzing properties.

Michael:

Always let your spirit guide?

Tom:

Yeah, let you're conscious… you can do it.

Pierre:

For a little bit of balance here, what would be some of the risks about going into the market now finding a tenant in January? Is that something that we should be considering?

Michael:

Yeah, absolutely. I think finding a tenant is definitely tougher in the winter, in the vast majority of markets. And I would say talk to a property manager about what the stuffs look like, at this point in this time of the year, because they're going to have a better idea than anybody else. Because let's be real, there are leases that are expiring around this time of the year. There's only 12 months in a year. So there's always new lease expiring. So whether or not people are looking to move is a whole nother issue. But the opportunity, I think is absolutely there. But it's definitely market specific.

Tom:

Great point, Pierre. Two things that I would make on that point, is related to a lease, if you do end up buying and then getting a lease, I would recommend trying to make it like an 18 month lease so that the end of the lease is hitting an a more desirable time period of when people are moving in and out not to have a 12 month lease. So it just hits directly back into the winter, which is not ideal. The other aspect of buying in the winter is that you're buying in an area that deals with a lot of snow, perhaps you're buying in Pittsburgh, it transactions can be slow, just because doing inspections can sometimes not be practical, because the inspector can't get to the roof to inspect stuff. So there is some additional challenges that is presented during the winter. But don't let that get in your way of avoiding tryptophane and doing the hard work. So great point here.

Pierre:

And also more specific to this time in history, or you know, this specific moment that we are going through a new president coming in, a little bit of economic uncertainty, what are some considerations that we should be taking in mind moving into an acquisition now?

Michael:

I think to only kind of double down on Tom's point with the slowness of acquisitions, this time of year, people are taking vacation, people are doing all kinds of stuff. So just the whole process can be slow as molasses, in addition to the fact that we have all this economic uncertainty and interest rates are so low, so many people are doing the finances, but it just seems like the whole system is kind of log jammed with stuff, whether that's transactions, whether it's wi fi's or purchases. So just be aware that it might take longer, and especially with COVID, like Tom was saying with inspections and with appraisals, just stuff is taking longer. So I would just plan for that and kind of have that in the back of your mind. And think about maybe writing that into your purchase and sale agreement, giving yourself some extension timelines and extension windows, if needed. Because the process is just taking longer than expected.

Tom:

I think on the aspect of financial uncertainty, I would just make sure that you're not overextending yourself so that you have the proper reserves, the property is vacant for a little bit you have reserves to handle a month or two that if you're using financing, that that financing cost is not going to be too big of a burden on yourself. So I think just practicing good discipline around what your available buying power is. and kind of just generally speaking like I have, yeah, there's a little bit of there's some economic uncertainty, but I think that for the most part, the government does a good job of steering the ship where it needs to be steered if there are issues for better or worse here. You know, we are in to like some major economic issue that comes up and it could be a reasonably safe assumption that there's going to be some additional stimulus support.

Tom:

That was episode everybody. Thanks so much for listening. If you'd like this episode, feel free to give us a rating review and subscribe where it is a new podcast. We look forward to seeing on the next one and happy investing

With the holidays upon us, is it a good time to buy properties? In this short episode, we talk about a few benefits, risks and considerations about buying right now. 

---

Transcript

Michael:

Hey everybody welcome to another episode of The Real Estate Investor. My name is Michael Albaum and today I'm joined by my co hosts

Emil:

Emil Shour

Tom:

Tom Schneider

Pierre:

Pierre Carrillo

Michael:

And today we're gonna be tackling whether or not the holidays can present a good or bad time to buy real estate. So let's jump into it.

Michael:

So guys, we just passed Thanksgiving today reporting this the first of December about to approach the full fledge holiday season. is now a good time to buy. yea or nay everything in between. Emil, what are your thoughts?

Emil:

Hell, yeah. Right. now's a good time to buy. People or your competition, ie other buyers, sleeping, getting ready for the holidays. I think just overall you have less competition during this time of year. I think it's been proven through stats most you know you get the best deals December January timeframe typically. So I think if you're in a position to buy right now is a great time I am active. I mean, I think you should always be active but I think December January can be a great time to snag property.

Michael:

Right on. Tom?

Tom:

Tryptophane. Is that what's in turkey? and red wine?

Michael:

Yeah!

Tom:

Sluggish. Yeah, tastes like opportunity. But what I do is I get tryptophane free turkey and then I just hit the market. Getting the jump on everybody else. Yeah, get the jump on everyone. I would say it's, it is as good a day as any day to do buying. So you know, stick to your process, building your buy box analyzing properties. And I would try not to have too big of gotta buy now glasses or don't gotta buy now glasses. Just let the market speak. Let your work, speak and finding property. So I guess not a very specific answer. But it would be my honest answer is continue to your work and analyzing properties.

Michael:

Always let your spirit guide?

Tom:

Yeah, let you're conscious… you can do it.

Pierre:

For a little bit of balance here, what would be some of the risks about going into the market now finding a tenant in January? Is that something that we should be considering?

Michael:

Yeah, absolutely. I think finding a tenant is definitely tougher in the winter, in the vast majority of markets. And I would say talk to a property manager about what the stuffs look like, at this point in this time of the year, because they're going to have a better idea than anybody else. Because let's be real, there are leases that are expiring around this time of the year. There's only 12 months in a year. So there's always new lease expiring. So whether or not people are looking to move is a whole nother issue. But the opportunity, I think is absolutely there. But it's definitely market specific.

Tom:

Great point, Pierre. Two things that I would make on that point, is related to a lease, if you do end up buying and then getting a lease, I would recommend trying to make it like an 18 month lease so that the end of the lease is hitting an a more desirable time period of when people are moving in and out not to have a 12 month lease. So it just hits directly back into the winter, which is not ideal. The other aspect of buying in the winter is that you're buying in an area that deals with a lot of snow, perhaps you're buying in Pittsburgh, it transactions can be slow, just because doing inspections can sometimes not be practical, because the inspector can't get to the roof to inspect stuff. So there is some additional challenges that is presented during the winter. But don't let that get in your way of avoiding tryptophane and doing the hard work. So great point here.

Pierre:

And also more specific to this time in history, or you know, this specific moment that we are going through a new president coming in, a little bit of economic uncertainty, what are some considerations that we should be taking in mind moving into an acquisition now?

Michael:

I think to only kind of double down on Tom's point with the slowness of acquisitions, this time of year, people are taking vacation, people are doing all kinds of stuff. So just the whole process can be slow as molasses, in addition to the fact that we have all this economic uncertainty and interest rates are so low, so many people are doing the finances, but it just seems like the whole system is kind of log jammed with stuff, whether that's transactions, whether it's wi fi's or purchases. So just be aware that it might take longer, and especially with COVID, like Tom was saying with inspections and with appraisals, just stuff is taking longer. So I would just plan for that and kind of have that in the back of your mind. And think about maybe writing that into your purchase and sale agreement, giving yourself some extension timelines and extension windows, if needed. Because the process is just taking longer than expected.

Tom:

I think on the aspect of financial uncertainty, I would just make sure that you're not overextending yourself so that you have the proper reserves, the property is vacant for a little bit you have reserves to handle a month or two that if you're using financing, that that financing cost is not going to be too big of a burden on yourself. So I think just practicing good discipline around what your available buying power is. and kind of just generally speaking like I have, yeah, there's a little bit of there's some economic uncertainty, but I think that for the most part, the government does a good job of steering the ship where it needs to be steered if there are issues for better or worse here. You know, we are in to like some major economic issue that comes up and it could be a reasonably safe assumption that there's going to be some additional stimulus support.

Tom:

That was episode everybody. Thanks so much for listening. If you'd like this episode, feel free to give us a rating review and subscribe where it is a new podcast. We look forward to seeing on the next one and happy investing

If you have ever browsed the Roofstock Marketplace, you will be familiar with the neighborhood scores used for risk assessment. If you have ever wondered what goes into the calculation of these scores, join Tom and Michael as they interview the Head Data Scientist at Roofstock, Mike Polyakov, about what exactly goes into these values. 

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Transcript

Tom:

Greetings, and welcome to the remote real estate investor. On today we have a special guest, Mike Polyakov, who is the head data scientist at Roofstock. And in this episode, we're going to be talking about the Roofstock neighborhood score. What goes into it? How is it updated? And what makes it special? All right, let's do it.

Tom:

Mike, thank you so much for coming on to the episode. You are the lead data scientists at Roofstock.

Mike

That's correct. Oh, yeah. Happy to be here.

Tom:

Excellent. So before we get into the specifics of the episode, which is going to be on the neighborhood score, I'd love to learn a little bit more about yourself before you got to Roofstock. What were you doing? And then now that you're being at Rootstock for a little bit of time, what's your kind of day to day like, like, so let's start at the beginning. What were you doing before you came to Rootstock and to be the lead data scientist?

Mike:

Sure. I have kind of an unusual background. So which combines political science. I have a PhD in political science from Berkeley, which I got in 2014 in computer science, which I guess, which is the kind of before a PhD, and then sort of went back after I finished the PhD, right before coming to Rootstock. I worked at crowd pack, which is a political crowdfunding startup, I believe they're still going. And there's some different leadership there in San Francisco, I was there for almost three years. Also doing data science there, since I joined Roofstock in 2017, worked on a variety of projects. Some of it is kind of typical data science things. So things like analyzing users trying to understand accorded the best leads, doing a bit of marketing work, and also more Roofstock specific things. So things like estimating rents, valuating variations of properties, and of course, the neighborhood score that we'll talk about here.

Tom:

Super interesting.

Michael:

Well, this is gonna get so off the rails so quickly. I mean, I would love to know what a PhD you know, what, what in most your classmates do after getting their PhDs,

Mike:

So it's going to be like a Stuff You Should Know. So it really varies. A lot of them actually stayed in academia in political science. One guy from my class went to back to Singapore, where he was from, and he's kind of a middle level bureaucrat there, some folks have teaching jobs, others just went back into the world and two totally random things.

Tom:

What brought you to getting into FinTech?

Mike:

It wasn't FinTech specifically, but that summer 2017 crowd pack was, you know, a little bit on the rocks. And I was looking around, and I was actually interested in investing in real estate, didn't know a whole lot about it had invested at that point, and kind of find out about rootstock through one of my alumni connections, and it seemed like a perfect opportunity.

Tom:

What better way to to learn than just jumping right in? Go ahead, Michael.

Michael:

Yeah, exactly. Yeah, I was gonna ask Mike, since learning about it, have you then since started investing in real estate?

Mike:

Yeah. So I'm a little embarrassed to say that for the last year and a half, I've been in sort of analysis paralysis, where I've been wanting to, but our sport is the market selection for me. I've done the Academy of both these most of the lectures. So I'm all ready to go except I need to start.

Michael:

Yeah, anytime you want. we'll hop on a coaching call. And we can talk through some of that analysis paralysis.

Mike:

Sounds great, man.

Tom:

Excellent. Excellent.

Michael:

We could go on forever, I'm sure. But let's talk about the neighborhood score, Tom.

Tom:

I know, I know. So first, I have a couple questions related to the neighborhood score. Let's start out with what are the different variables involved with it? And, you know, actually, I'm going to even take a step further back. Is there a general thesis of the neighborhood score of what we're trying to solve for? And how did it like internally on the data science team? What do you what is like the kind of the overarching goal when you think of the neighborhood score?

Mike:

Yeah, absolutely. It's best to start at the beginning. Yeah. So in the real estate world, and you've probably touched on this in some of the lectures, there's this notion of a neighborhood class, right, you might assign letter grades ABCD a being the best. And from investor's point of view, this is the mechanism to account for risk associated with location, right, so that for an investment, you can compare returns versus the versus the rest. Typically what those letter grades capture is both operational risk and the expectation, appreciation or decline of an area.

And operational risk includes things like turnover evictions, effective age, rents, vacancy, all that stuff. The downside of that traditional neighborhood class notion is that one, there's no formal definition, right? It's kind of I know, when I see it sort of thing. And so when investors see might be not going to speed will vary even within the same market. But the other big issue is scale. Right. So most investors are focused on a single market. And so they lack national perspective, right, they might be assigned, might be able to assign some very accurate grade, so to speak with an Atlanta weather base, but really struggle to do the same thing as Charlotte. And so what the neighborhood score tends to do is to serve, operationalize it, make it scalable across the country, and use data to make it objective. So specifically for Rootstock neighborhood score, the goal is still to assign location based risk to properties, and specifically operational risk.

So that's the start. Another important thing to say is kind of at the outset is what is neighborhood mean, for us, right? Because it's very fuzzy term. People mean different things when they say neighborhood, in our case, neighborhoods pretty large. Specifically, it's the census tract. So the US Census divides the entire country into tracks. And each track should be roughly the same number of households, it's about 1500. In a metro area like Atlanta, it's going to be comparable to a zip code. So you know, it's not going to be your block, or what some people might sort of colloquially refer to a neighborhood. So a little larger than that, but it allows us to get a lot of statistical power when we look at the data. And so what data do we use a lot of is actually what would be the same as what the real estate professionals would looked at. So it's things like information about the housing stock, but the individuals in the area, but the households, school scores are going to be pretty important and crime data, high level that that's what goes into score.

Tom:

Got it and on the size of the area. So you had mentioned like the census track is kind of a moving target based on how dense the area. Am I understanding that correctly?

Mike:

Well, no. So the idea of a census tract is that it should be roughly the same population. So any track Yeah, they're not gonna be exactly equal, but they're gonna be pretty similar.

Tom:

Does it relate to zip codes, or zip code plus two, or zip code plus four? And, and what does that mean zip code plus two plus, plus four?

Mike:

Yeah, so it doesn't, they're completely separate in all ways, except that in certain areas, there will be roughly comparable size, like in Atlanta, I just happen to know that a lot of the zip codes are about the same geographical size as the census tract when you say a zip code plus two, which is pretty uncommon, zip plus 4 is a little more common. So the USPS separates, basically cuts up any given zip codes into these little areas. And simple plus four is basically a nine digit number. It's your five digit zip code plus four more digits, which usually identify your specific block. So it's block level, geographic region.

Tom:

I'm already learning things. I always thought the neighborhood score was related to the zip at some level. So already as an employee, since for a very long time learning some stuff about the neighborhood score, and belaboring the point, but the size of the neighborhood is based on the census tract.

Mike:

Well, it is the census, it is the census track.

Tom:

Okay, got it. Yeah. You probably said that two times.

Mike:

It's just yeah, I mean, you know, for sure, the simple reason for that is, that's where most of the data, most of the reuse is assigned at that level. Right. So most of our inputs come from the US Census. And they usually deliver it in multiple levels. So you could also get some of these inputs at census block level, which is literally your street block, but it's much more sparse, and it's much less exact. So a good balance of kind of precision. And also coverage is at the census tract level.

Michael:

And Mike you touch on something there that I want to circle back to and make sure that I heard you right. In our listeners, we clarify for our listeners, did you say that the information that's going into the algorithm that builds the neighborhood score is coming actually from US Census.

Mike:

Not all of it. So most of it comes from census. The other components are a school scores, which we get from a vendor and crime data which we get from different vendors.

Michael:

Okay. So I think that's a question I get, oftentimes in the academy is where is this information coming from? Is it Zillow? Is it Redfin? Is it? Is it individually collected? So that's really interesting now that a lot of it comes from from the census itself.

Mike:

Yep.

Tom:

So we've had the neighborhood score out for a couple of years, has the waiting in the way that we weight different variables that go into it changed it all over time? And is there this kind of concept of like, I don't know, is it learning and getting smarter over time, I guess is another way to put it.

Mike:

Yeah. So it's a great question.

Michael:

It’s becoming sentient.

Mike:

Yeah.

Tom:

I hope not just we have to worry about AI and what's what's it called?

Mike:

The singularity.

Tom

Yeah.

Mike:

Not at Roofstock, it won’t happen here first. So that's a good question. And I think a lot of people have that question of, you know, how do we come up with the weights? And so I'm going to kick out a little bit. I'll try to keep it high level.

Tom:

Geek out away, geek out a little bit. And Michael, and I will raise our hands when we're drowning.

Mike:

Yeah, no, it's fine. It's fine. So the neighborhood score is not a supervised learning model, which means that so for a lot of models in AI and machine learning, generally, they're supervised in the sense that you have a training set that's labeled, right. So if you think about training model to recognize hot dogs, you have a bunch of pictures which are labeled hot dog or not hot dog right. That's your label training data set. You're trying to get the model to learn something that you can sort of look at and know immediately, right, because we know how to do this, right? So you try and get them all to replicate something that you know how to do it when that score is an unsupervised model in sense that while So, you could imagine having a professional, you know, going through 100 or 1000 neighborhoods and saying this is A this is B this is C you could approach it that way.

What we chose to do instead is to say, look, this is the data that we know should determine the quality of this neighborhood. This is the inputs that I mentioned, we apply a process, that's known as dimensionality reduction, which takes all these different inputs, and then extracts a single number out of them. And the way it works is that imagine going to a doctor and getting your temperature measured, and maybe your heart rate measures, maybe your weight. And you can imagine all those measurements, giving you sort of an overall health score. Right? So having all those numbers, the doctor can say, Are you really good health, you create a health, or maybe not quite so well, maybe you're a grade B or C. The idea being that there's some underlying, sort of not objectively real, but an intuitive notion of health of a person that can be measured in these different signals. The same thing works for neighborhood score, you can imagine there's a kind of underlying quality of neighborhoods, which we're trying to get by these different measurements, looking at the school scores looking at, you know, household incomes, or percent owner occupied homes. These are all individual measures, which we combine them we can extract an overall quality, if that makes sense.

Michael:

That makes total sense. And such a great way of explaining it. As a total side note, tangent there actually isn't this app, it's called I think fingers are hot dogs. And you like hold your fingers up, and it has the apple guess whether if they think it's a finger or a hot dog?

Mike:

Yeah, well, that's from Silicon Valley, right?

Michael:

Yeah.

Tom:

Like Michael said, you did a really good job, like talking about the concept of unsupervised data versus supervised data in kind of understanding and how it is evolving in that way. So on the notion of evolving, how often are the variables that go into it being updated?

Mike:

Right, so to get to the more precise career question or that part, so the data itself changes on various time scales. So the US Census releases their data every year, and we're using the American Community Survey, which is part of the US Census, and they redo the survey every year. So that's updated annually, the schools personally, updated monthly, right now, for various reasons, we haven't been updating the score very much. What's important to know is that we've done some analysis to see how how much you would change year to year. And it's actually very little. So to give you a sense, from one year to another, I think less than 5% of census tracts, which change half a star or more. So most of them are quite stable.

Michael:

And kind of getting back to Tom's question a little bit, Mike, the weighting of the different factors that go into it. Can you talk to us a little bit about how that looks?

Mike:

Yeah. So the reason I brought up the unsupervised learning bit of it, it's that the weights are learned by the model? Well, so I think the back is, I wouldn't say that they're learned by the model, but they're assigned by the model. In other words, when the model looks at all the inputs, so going back to the doctor analogy, right, so maybe your your heart rate and your weight, and I don't know what what's another, another thing that they measure, blood pressure. Yeah, so maybe all of those are kind of pointing in one direction. So they're all correlated, but then your temperature is really low, unexpectedly low. So there's something going on that the other signals aren't picking up, but temperatures picking up really strongly. So what the model would do in that case, it would assign greater weight to the temperature than to the individual other inputs, because it thinks that temperature is showing you something that's not present in the other three signals. So in other words, if you have those four measures adopted, you could say that there is kind of two separate things going on in your body. One of them is picked out by heart rate, blood pressure, weight, and one of them is picked out by temperature. Interesting.

So similarly, with the real estate case. So we don't want all those inputs. And I think there's nine, nine or 10 different inputs, the ones that have sort of more information than the others, like more distinct information is going to weigh those higher. So given that the inputs don't change very much here a year, the weightings aren't going to change very much year to year.

Michael:

But so, in theory, or maybe in reality, we could have different weightings for different markets based on the data set that's being provided.

Mike:

Um, so yes, we could so one step that I didn't mentioned this kind of the Emperor script before, once we collect the inputs from these different sources, we do some normalization to the values across markets. So that I mean, what you want ultimately, in your score, is for it to mean the same thing in different markets. So for certain planet, in terms of things you care about, like all the operational risk factors I mentioned before, so a 4 star in Atlanta should be similar to  4 star in Rochester, New York. And to allow that to happen. We do some normalization inputs before we run the model on.

Michael:

So that way you You shouldn't end up with a situation where a Atlanta market is more heavily weighted towards crime versus your neighborhood score. And Rochester is more heavily weighted towards, I don't know, appreciation potential, something like that.

Mike:

Yeah, that's sort of handled in the pre processing stage.

Mike:

Got it.

Tom:

If I was to look at all of the properties that have a neighborhood score wouldn't form like a bell curve where the majority of them are in the middle like this three star in just a few of them have five star and very few have one star, how is this kind of the shape? If you looked at the full data set, look at me sending like a data scientist?

Michael:

Great question.

Mike:

And yeah, that's a great question, Tom. Right on? Um, yeah, so it's actually it's a slightly right shifted bell curve. So what you find is that about a quarter of properties in the country, or single family homes are less than three stars, about a third, or three, three and a half stars. And the remainder, which is a little more than a third is going to be four stars and above. So it looks kind of like a bell curve, but it's a little bit shifted off center to the right.

Michael:

And is that properties in the nation or properties on Roofstock?

Mike:

Properties in nation?

Michael:

Wow, what about properties on Roofstock? Do we know what the data set looks like there? R

Mike:

Roofstock have a look at the curve recently. But it tends to be a little bit more left shifted? I think our me, our average is probably a little less than three, or maybe three,

Michael:

Which makes sense, because those are cash flowing properties.

Tom:

So my less last question for you is, how do you see the neighborhood? And do you see it evolving over time? Like, is there a roadmap for ways that we're working with the neighborhood in the future? I'd love to hear your input?

Mike:

Yeah, absolutely. So there's still like significant issues with the current input score. One is that we do have some areas which don't have any score at all. And this happens, because some of the inputs are missing. Sometimes it's from the census, we don't have a value for given track. Sometimes there's no school scores at the track level. So we're using, we're doing some work right now, to address this by improving our statistical methods, it should be more complete. In the near future. The other kind of issue more visible probably to the to the user browsing a website is going to be that you're coming back to this idea of neighbors corners being at the census tract level, that's a really pretty big region, right. So it's a very coarse scoring. And that also means you can have sharp boundaries. So it's not unusual to have with a two star neighborhood, adjoining a forced neighborhood, which, you know, looking at the census tract level, it may be fine. But around the border, there's likely going to be some inaccuracy. So if you pick up a property that's close to that border, but it's on the 2 star side, it's likely going to be a little bit in terms of separations, it's likely going to be a little bit more like a three star and vice versa.

And so we're our next step, which you know, because for a while, but may actually happen next year, is we're going to move down in geographic granularity down to census block group level, which is a division of a track, it's about a one third of the size of a census tract. So it's not a huge improvement, but it's going to be helpful. And then we have some other things that we're going to do to address this short boundary issue.

Tom:

Excellent. Michael, do you have any any final questions for Mike?

Michael:

No, I mean, Mike gave me the punch, I was going to ask how folks should be thinking about or working around markets that have kind of a block by block change, where you know, you have a really good block and a really rough block. But I think the answer to that question kind of addressed it, and that it's going to be up and coming. But maybe add on maybe the question is still relevant? How should folks be thinking about and evaluating properties in those neighborhoods that really are sparked by block or street by street changing?

Mike:

Um, yeah, so a good rule of thumb. And actually, Tom can probably chime in on this as well. But a good rule of thumb is to look at rents. So at least within say, census tract, rent is going to be a pretty strong predictor of what actually sorry, so rent over price. So if you like, go on Zillow, and you look at the rent for property, and then it's so surprised, you can figure out the yield. And so within at tract properties that are more high yielding, will tend to have lower neighborhood scores. So for example, you know, you got a whole tract, that's a three star and then on the right, maybe it's closer to the highway. And you see, there's kind of like, if you look at a couple homes, that you kind of see a pattern of higher yields than the rest of the track, that's probably a slightly worse area.

Michael:

That makes total sense. So Mike, I'm curious to know, because on Roofstock, we have the neighborhood score in stars. And then we also have the school score as its own category in stars as well. But you mentioned that the school score is actually one of the inputs into the neighborhood score. So just curious why we have separate and distinct call outs. And, you know, why is the school score included in the neighborhood score, and also on its own called out?

Mike:

Yes, another great question. So it's including the input score, because, well, it's an important input, right? It's important signal of the socio economic index, which is what sort of neighbors score is, right? It's not necessarily entirely separate. So for example, if you took out school scores, and you kept all the other inputs, most scores won't change very much. So it's not contributing a whole lot of information. But it is useful as to why if we have the score, why do we have a separate school score? I think probably two reasons.

One, I think people just have a very strong intuition that they want to look at school scores in an area, right? That's just information they want to see. And then it does in search for certain buyers, depending your investment thesis, it provides information that's not so relevant or not really communicate, but neighborhood score. So for example, you know, if you have a family, or if you want to rent to families, school scores are going to be probably more important than if you want to rent to young professionals.

Michael:

It makes total sense.

Tom:

My last question, not necessarily neighborhood related, talking about some of the other projects that you're excited about that or the data science team is in science is excited about anything, any specific project that's you think particularly interesting that you're working on right now? Outside the neighborhood?

Mike:

Yeah. Well, I'm hesitating because I'm sure, like any intellectual property, or what I'm trying to figure out, like, what yeah, exactly what what I should be revealing here. But I'll tell you one thing that's, you know, definitely not controversial. I think right now, we're not doing a great job helping people understand markets. I know because I need some help understanding markets. So we do have some work going on. In that respect. Some of it is more than short term. I think in the next month or two, we're going to have some market pages with better information, you know, it's going to help people make those choices and further down the road. Expect we're going to do more work on more machine learning and forecasting to help people understand markets now just as they are now but where they're going and how to think about that.

Tom:

Beautiful. Awesome, Michael, any final questions from you?

Michael:

No, this was super insightful. Mike, I kind of have my mind blown. This is this was awesome.

Tom:

I know, we got to have another episode and got editor, PhD political science.

Mike:

Yes. Absolutely.

Michael:

Want to both sides of the science, the political science, the meeting of the minds.

Mike:

Yeah, totally.

Tom:

Very cool. Well, thank you so much for coming on. And I have a feeling we'll probably be asking you to jump on again in the in the near future. super interesting.

Michael:

Great stuff.

Mike:

Yeah. Anytime. My pleasure. Thanks, Tom.

Tom:

Thanks, Mike.

Michael:

Thanks, Mike.

Tom:

Thank you so much to Mike for coming on today and telling us about the neighborhood score and a little bit about his background, looking forward to having him on again in the future. And if you like this podcast, like this episode, we would love it if you would subscribe, give us a rating, and all of that good stuff. All right. Happy investing.

If you have ever browsed the Roofstock Marketplace, you will be familiar with the neighborhood scores used for risk assessment. If you have ever wondered what goes into the calculation of these scores, join Tom and Michael as they interview the Head Data Scientist at Roofstock, Mike Polyakov, about what exactly goes into these values. 

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Transcript

Tom:

Greetings, and welcome to the remote real estate investor. On today we have a special guest, Mike Polyakov, who is the head data scientist at Roofstock. And in this episode, we're going to be talking about the Roofstock neighborhood score. What goes into it? How is it updated? And what makes it special? All right, let's do it.

Tom:

Mike, thank you so much for coming on to the episode. You are the lead data scientists at Roofstock.

Mike

That's correct. Oh, yeah. Happy to be here.

Tom:

Excellent. So before we get into the specifics of the episode, which is going to be on the neighborhood score, I'd love to learn a little bit more about yourself before you got to Roofstock. What were you doing? And then now that you're being at Rootstock for a little bit of time, what's your kind of day to day like, like, so let's start at the beginning. What were you doing before you came to Rootstock and to be the lead data scientist?

Mike:

Sure. I have kind of an unusual background. So which combines political science. I have a PhD in political science from Berkeley, which I got in 2014 in computer science, which I guess, which is the kind of before a PhD, and then sort of went back after I finished the PhD, right before coming to Rootstock. I worked at crowd pack, which is a political crowdfunding startup, I believe they're still going. And there's some different leadership there in San Francisco, I was there for almost three years. Also doing data science there, since I joined Roofstock in 2017, worked on a variety of projects. Some of it is kind of typical data science things. So things like analyzing users trying to understand accorded the best leads, doing a bit of marketing work, and also more Roofstock specific things. So things like estimating rents, valuating variations of properties, and of course, the neighborhood score that we'll talk about here.

Tom:

Super interesting.

Michael:

Well, this is gonna get so off the rails so quickly. I mean, I would love to know what a PhD you know, what, what in most your classmates do after getting their PhDs,

Mike:

So it's going to be like a Stuff You Should Know. So it really varies. A lot of them actually stayed in academia in political science. One guy from my class went to back to Singapore, where he was from, and he's kind of a middle level bureaucrat there, some folks have teaching jobs, others just went back into the world and two totally random things.

Tom:

What brought you to getting into FinTech?

Mike:

It wasn't FinTech specifically, but that summer 2017 crowd pack was, you know, a little bit on the rocks. And I was looking around, and I was actually interested in investing in real estate, didn't know a whole lot about it had invested at that point, and kind of find out about rootstock through one of my alumni connections, and it seemed like a perfect opportunity.

Tom:

What better way to to learn than just jumping right in? Go ahead, Michael.

Michael:

Yeah, exactly. Yeah, I was gonna ask Mike, since learning about it, have you then since started investing in real estate?

Mike:

Yeah. So I'm a little embarrassed to say that for the last year and a half, I've been in sort of analysis paralysis, where I've been wanting to, but our sport is the market selection for me. I've done the Academy of both these most of the lectures. So I'm all ready to go except I need to start.

Michael:

Yeah, anytime you want. we'll hop on a coaching call. And we can talk through some of that analysis paralysis.

Mike:

Sounds great, man.

Tom:

Excellent. Excellent.

Michael:

We could go on forever, I'm sure. But let's talk about the neighborhood score, Tom.

Tom:

I know, I know. So first, I have a couple questions related to the neighborhood score. Let's start out with what are the different variables involved with it? And, you know, actually, I'm going to even take a step further back. Is there a general thesis of the neighborhood score of what we're trying to solve for? And how did it like internally on the data science team? What do you what is like the kind of the overarching goal when you think of the neighborhood score?

Mike:

Yeah, absolutely. It's best to start at the beginning. Yeah. So in the real estate world, and you've probably touched on this in some of the lectures, there's this notion of a neighborhood class, right, you might assign letter grades ABCD a being the best. And from investor's point of view, this is the mechanism to account for risk associated with location, right, so that for an investment, you can compare returns versus the versus the rest. Typically what those letter grades capture is both operational risk and the expectation, appreciation or decline of an area.

And operational risk includes things like turnover evictions, effective age, rents, vacancy, all that stuff. The downside of that traditional neighborhood class notion is that one, there's no formal definition, right? It's kind of I know, when I see it sort of thing. And so when investors see might be not going to speed will vary even within the same market. But the other big issue is scale. Right. So most investors are focused on a single market. And so they lack national perspective, right, they might be assigned, might be able to assign some very accurate grade, so to speak with an Atlanta weather base, but really struggle to do the same thing as Charlotte. And so what the neighborhood score tends to do is to serve, operationalize it, make it scalable across the country, and use data to make it objective. So specifically for Rootstock neighborhood score, the goal is still to assign location based risk to properties, and specifically operational risk.

So that's the start. Another important thing to say is kind of at the outset is what is neighborhood mean, for us, right? Because it's very fuzzy term. People mean different things when they say neighborhood, in our case, neighborhoods pretty large. Specifically, it's the census tract. So the US Census divides the entire country into tracks. And each track should be roughly the same number of households, it's about 1500. In a metro area like Atlanta, it's going to be comparable to a zip code. So you know, it's not going to be your block, or what some people might sort of colloquially refer to a neighborhood. So a little larger than that, but it allows us to get a lot of statistical power when we look at the data. And so what data do we use a lot of is actually what would be the same as what the real estate professionals would looked at. So it's things like information about the housing stock, but the individuals in the area, but the households, school scores are going to be pretty important and crime data, high level that that's what goes into score.

Tom:

Got it and on the size of the area. So you had mentioned like the census track is kind of a moving target based on how dense the area. Am I understanding that correctly?

Mike:

Well, no. So the idea of a census tract is that it should be roughly the same population. So any track Yeah, they're not gonna be exactly equal, but they're gonna be pretty similar.

Tom:

Does it relate to zip codes, or zip code plus two, or zip code plus four? And, and what does that mean zip code plus two plus, plus four?

Mike:

Yeah, so it doesn't, they're completely separate in all ways, except that in certain areas, there will be roughly comparable size, like in Atlanta, I just happen to know that a lot of the zip codes are about the same geographical size as the census tract when you say a zip code plus two, which is pretty uncommon, zip plus 4 is a little more common. So the USPS separates, basically cuts up any given zip codes into these little areas. And simple plus four is basically a nine digit number. It's your five digit zip code plus four more digits, which usually identify your specific block. So it's block level, geographic region.

Tom:

I'm already learning things. I always thought the neighborhood score was related to the zip at some level. So already as an employee, since for a very long time learning some stuff about the neighborhood score, and belaboring the point, but the size of the neighborhood is based on the census tract.

Mike:

Well, it is the census, it is the census track.

Tom:

Okay, got it. Yeah. You probably said that two times.

Mike:

It's just yeah, I mean, you know, for sure, the simple reason for that is, that's where most of the data, most of the reuse is assigned at that level. Right. So most of our inputs come from the US Census. And they usually deliver it in multiple levels. So you could also get some of these inputs at census block level, which is literally your street block, but it's much more sparse, and it's much less exact. So a good balance of kind of precision. And also coverage is at the census tract level.

Michael:

And Mike you touch on something there that I want to circle back to and make sure that I heard you right. In our listeners, we clarify for our listeners, did you say that the information that's going into the algorithm that builds the neighborhood score is coming actually from US Census.

Mike:

Not all of it. So most of it comes from census. The other components are a school scores, which we get from a vendor and crime data which we get from different vendors.

Michael:

Okay. So I think that's a question I get, oftentimes in the academy is where is this information coming from? Is it Zillow? Is it Redfin? Is it? Is it individually collected? So that's really interesting now that a lot of it comes from from the census itself.

Mike:

Yep.

Tom:

So we've had the neighborhood score out for a couple of years, has the waiting in the way that we weight different variables that go into it changed it all over time? And is there this kind of concept of like, I don't know, is it learning and getting smarter over time, I guess is another way to put it.

Mike:

Yeah. So it's a great question.

Michael:

It’s becoming sentient.

Mike:

Yeah.

Tom:

I hope not just we have to worry about AI and what's what's it called?

Mike:

The singularity.

Tom

Yeah.

Mike:

Not at Roofstock, it won’t happen here first. So that's a good question. And I think a lot of people have that question of, you know, how do we come up with the weights? And so I'm going to kick out a little bit. I'll try to keep it high level.

Tom:

Geek out away, geek out a little bit. And Michael, and I will raise our hands when we're drowning.

Mike:

Yeah, no, it's fine. It's fine. So the neighborhood score is not a supervised learning model, which means that so for a lot of models in AI and machine learning, generally, they're supervised in the sense that you have a training set that's labeled, right. So if you think about training model to recognize hot dogs, you have a bunch of pictures which are labeled hot dog or not hot dog right. That's your label training data set. You're trying to get the model to learn something that you can sort of look at and know immediately, right, because we know how to do this, right? So you try and get them all to replicate something that you know how to do it when that score is an unsupervised model in sense that while So, you could imagine having a professional, you know, going through 100 or 1000 neighborhoods and saying this is A this is B this is C you could approach it that way.

What we chose to do instead is to say, look, this is the data that we know should determine the quality of this neighborhood. This is the inputs that I mentioned, we apply a process, that's known as dimensionality reduction, which takes all these different inputs, and then extracts a single number out of them. And the way it works is that imagine going to a doctor and getting your temperature measured, and maybe your heart rate measures, maybe your weight. And you can imagine all those measurements, giving you sort of an overall health score. Right? So having all those numbers, the doctor can say, Are you really good health, you create a health, or maybe not quite so well, maybe you're a grade B or C. The idea being that there's some underlying, sort of not objectively real, but an intuitive notion of health of a person that can be measured in these different signals. The same thing works for neighborhood score, you can imagine there's a kind of underlying quality of neighborhoods, which we're trying to get by these different measurements, looking at the school scores looking at, you know, household incomes, or percent owner occupied homes. These are all individual measures, which we combine them we can extract an overall quality, if that makes sense.

Michael:

That makes total sense. And such a great way of explaining it. As a total side note, tangent there actually isn't this app, it's called I think fingers are hot dogs. And you like hold your fingers up, and it has the apple guess whether if they think it's a finger or a hot dog?

Mike:

Yeah, well, that's from Silicon Valley, right?

Michael:

Yeah.

Tom:

Like Michael said, you did a really good job, like talking about the concept of unsupervised data versus supervised data in kind of understanding and how it is evolving in that way. So on the notion of evolving, how often are the variables that go into it being updated?

Mike:

Right, so to get to the more precise career question or that part, so the data itself changes on various time scales. So the US Census releases their data every year, and we're using the American Community Survey, which is part of the US Census, and they redo the survey every year. So that's updated annually, the schools personally, updated monthly, right now, for various reasons, we haven't been updating the score very much. What's important to know is that we've done some analysis to see how how much you would change year to year. And it's actually very little. So to give you a sense, from one year to another, I think less than 5% of census tracts, which change half a star or more. So most of them are quite stable.

Michael:

And kind of getting back to Tom's question a little bit, Mike, the weighting of the different factors that go into it. Can you talk to us a little bit about how that looks?

Mike:

Yeah. So the reason I brought up the unsupervised learning bit of it, it's that the weights are learned by the model? Well, so I think the back is, I wouldn't say that they're learned by the model, but they're assigned by the model. In other words, when the model looks at all the inputs, so going back to the doctor analogy, right, so maybe your your heart rate and your weight, and I don't know what what's another, another thing that they measure, blood pressure. Yeah, so maybe all of those are kind of pointing in one direction. So they're all correlated, but then your temperature is really low, unexpectedly low. So there's something going on that the other signals aren't picking up, but temperatures picking up really strongly. So what the model would do in that case, it would assign greater weight to the temperature than to the individual other inputs, because it thinks that temperature is showing you something that's not present in the other three signals. So in other words, if you have those four measures adopted, you could say that there is kind of two separate things going on in your body. One of them is picked out by heart rate, blood pressure, weight, and one of them is picked out by temperature. Interesting.

So similarly, with the real estate case. So we don't want all those inputs. And I think there's nine, nine or 10 different inputs, the ones that have sort of more information than the others, like more distinct information is going to weigh those higher. So given that the inputs don't change very much here a year, the weightings aren't going to change very much year to year.

Michael:

But so, in theory, or maybe in reality, we could have different weightings for different markets based on the data set that's being provided.

Mike:

Um, so yes, we could so one step that I didn't mentioned this kind of the Emperor script before, once we collect the inputs from these different sources, we do some normalization to the values across markets. So that I mean, what you want ultimately, in your score, is for it to mean the same thing in different markets. So for certain planet, in terms of things you care about, like all the operational risk factors I mentioned before, so a 4 star in Atlanta should be similar to  4 star in Rochester, New York. And to allow that to happen. We do some normalization inputs before we run the model on.

Michael:

So that way you You shouldn't end up with a situation where a Atlanta market is more heavily weighted towards crime versus your neighborhood score. And Rochester is more heavily weighted towards, I don't know, appreciation potential, something like that.

Mike:

Yeah, that's sort of handled in the pre processing stage.

Mike:

Got it.

Tom:

If I was to look at all of the properties that have a neighborhood score wouldn't form like a bell curve where the majority of them are in the middle like this three star in just a few of them have five star and very few have one star, how is this kind of the shape? If you looked at the full data set, look at me sending like a data scientist?

Michael:

Great question.

Mike:

And yeah, that's a great question, Tom. Right on? Um, yeah, so it's actually it's a slightly right shifted bell curve. So what you find is that about a quarter of properties in the country, or single family homes are less than three stars, about a third, or three, three and a half stars. And the remainder, which is a little more than a third is going to be four stars and above. So it looks kind of like a bell curve, but it's a little bit shifted off center to the right.

Michael:

And is that properties in the nation or properties on Roofstock?

Mike:

Properties in nation?

Michael:

Wow, what about properties on Roofstock? Do we know what the data set looks like there? R

Mike:

Roofstock have a look at the curve recently. But it tends to be a little bit more left shifted? I think our me, our average is probably a little less than three, or maybe three,

Michael:

Which makes sense, because those are cash flowing properties.

Tom:

So my less last question for you is, how do you see the neighborhood? And do you see it evolving over time? Like, is there a roadmap for ways that we're working with the neighborhood in the future? I'd love to hear your input?

Mike:

Yeah, absolutely. So there's still like significant issues with the current input score. One is that we do have some areas which don't have any score at all. And this happens, because some of the inputs are missing. Sometimes it's from the census, we don't have a value for given track. Sometimes there's no school scores at the track level. So we're using, we're doing some work right now, to address this by improving our statistical methods, it should be more complete. In the near future. The other kind of issue more visible probably to the to the user browsing a website is going to be that you're coming back to this idea of neighbors corners being at the census tract level, that's a really pretty big region, right. So it's a very coarse scoring. And that also means you can have sharp boundaries. So it's not unusual to have with a two star neighborhood, adjoining a forced neighborhood, which, you know, looking at the census tract level, it may be fine. But around the border, there's likely going to be some inaccuracy. So if you pick up a property that's close to that border, but it's on the 2 star side, it's likely going to be a little bit in terms of separations, it's likely going to be a little bit more like a three star and vice versa.

And so we're our next step, which you know, because for a while, but may actually happen next year, is we're going to move down in geographic granularity down to census block group level, which is a division of a track, it's about a one third of the size of a census tract. So it's not a huge improvement, but it's going to be helpful. And then we have some other things that we're going to do to address this short boundary issue.

Tom:

Excellent. Michael, do you have any any final questions for Mike?

Michael:

No, I mean, Mike gave me the punch, I was going to ask how folks should be thinking about or working around markets that have kind of a block by block change, where you know, you have a really good block and a really rough block. But I think the answer to that question kind of addressed it, and that it's going to be up and coming. But maybe add on maybe the question is still relevant? How should folks be thinking about and evaluating properties in those neighborhoods that really are sparked by block or street by street changing?

Mike:

Um, yeah, so a good rule of thumb. And actually, Tom can probably chime in on this as well. But a good rule of thumb is to look at rents. So at least within say, census tract, rent is going to be a pretty strong predictor of what actually sorry, so rent over price. So if you like, go on Zillow, and you look at the rent for property, and then it's so surprised, you can figure out the yield. And so within at tract properties that are more high yielding, will tend to have lower neighborhood scores. So for example, you know, you got a whole tract, that's a three star and then on the right, maybe it's closer to the highway. And you see, there's kind of like, if you look at a couple homes, that you kind of see a pattern of higher yields than the rest of the track, that's probably a slightly worse area.

Michael:

That makes total sense. So Mike, I'm curious to know, because on Roofstock, we have the neighborhood score in stars. And then we also have the school score as its own category in stars as well. But you mentioned that the school score is actually one of the inputs into the neighborhood score. So just curious why we have separate and distinct call outs. And, you know, why is the school score included in the neighborhood score, and also on its own called out?

Mike:

Yes, another great question. So it's including the input score, because, well, it's an important input, right? It's important signal of the socio economic index, which is what sort of neighbors score is, right? It's not necessarily entirely separate. So for example, if you took out school scores, and you kept all the other inputs, most scores won't change very much. So it's not contributing a whole lot of information. But it is useful as to why if we have the score, why do we have a separate school score? I think probably two reasons.

One, I think people just have a very strong intuition that they want to look at school scores in an area, right? That's just information they want to see. And then it does in search for certain buyers, depending your investment thesis, it provides information that's not so relevant or not really communicate, but neighborhood score. So for example, you know, if you have a family, or if you want to rent to families, school scores are going to be probably more important than if you want to rent to young professionals.

Michael:

It makes total sense.

Tom:

My last question, not necessarily neighborhood related, talking about some of the other projects that you're excited about that or the data science team is in science is excited about anything, any specific project that's you think particularly interesting that you're working on right now? Outside the neighborhood?

Mike:

Yeah. Well, I'm hesitating because I'm sure, like any intellectual property, or what I'm trying to figure out, like, what yeah, exactly what what I should be revealing here. But I'll tell you one thing that's, you know, definitely not controversial. I think right now, we're not doing a great job helping people understand markets. I know because I need some help understanding markets. So we do have some work going on. In that respect. Some of it is more than short term. I think in the next month or two, we're going to have some market pages with better information, you know, it's going to help people make those choices and further down the road. Expect we're going to do more work on more machine learning and forecasting to help people understand markets now just as they are now but where they're going and how to think about that.

Tom:

Beautiful. Awesome, Michael, any final questions from you?

Michael:

No, this was super insightful. Mike, I kind of have my mind blown. This is this was awesome.

Tom:

I know, we got to have another episode and got editor, PhD political science.

Mike:

Yes. Absolutely.

Michael:

Want to both sides of the science, the political science, the meeting of the minds.

Mike:

Yeah, totally.

Tom:

Very cool. Well, thank you so much for coming on. And I have a feeling we'll probably be asking you to jump on again in the in the near future. super interesting.

Michael:

Great stuff.

Mike:

Yeah. Anytime. My pleasure. Thanks, Tom.

Tom:

Thanks, Mike.

Michael:

Thanks, Mike.

Tom:

Thank you so much to Mike for coming on today and telling us about the neighborhood score and a little bit about his background, looking forward to having him on again in the future. And if you like this podcast, like this episode, we would love it if you would subscribe, give us a rating, and all of that good stuff. All right. Happy investing.

Investing in real estate remotely can be intimidating when you are juggling a full time job, family and the host of responsibilities life throws at you. In this episode we give you 4 tips to make sure you get everything done and stay on track. 

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Transcript

Michael:

Hey everybody, and welcome to another episode of The Remote Real Estate Investor. My name is Michael Albaum and today I'm joined by my co hosts,

Tom:

Tom Schneider,

Emil:

and Emil Shour

Pierre:

and Pierre Carrillo

Michael:

And today we're going to be talking about time management, something that's really important for most people, but especially important for those of us that are investing at a distance remotely, we're gonna be talking about some really practical things you can implement into your daily routine as an investor to help you manage some time. So let's get into it. Alright, guys, so we all know that time…

Emil:

Hold on, hold on, hold on, we got a special guest on this episode, I feel like he deserves a very, very warm welcome and introduction to our listeners.

Michael:

Pierre?

Pierre:

Hey, what's up?

Michael:

Can you give our listeners a little bit of background on who you are you pepper in some really great commentary in some of the episodes. But now you're going to be a full fledged host on this episode. Who are you?

Pierre:

Yeah, I've been lurking in the corners since the beginning here, typing in when something's relevant. But yeah, I'm the producer on the show. And just starting out in the real estate game with my brother currently. So I don't speak much because I don't have much experience in this space. But I'm just learning from you guys. And excited to get in on this stuff.

Michael:

Right on, we're stoked to have you.

Tom:

Fantastic, and a great episode to jump in on time management being juggling, like 10 different jobs with the podcast and Academy and getting your real estate investing stuff going like, yeah, excited to have your input on this episode.

Pierre:

Well, thanks. I need some of it too, because I have a weekly meeting with my brother. And we're always like, how do we use our time to really move this project forward? Because it's easy to just get stuck? Oh, let's analyze properties. Let's dive into this. But I think this is really going to be helpful. I'm going to definitely link my brother to this episode afterwards.

Tom:

That's like the theme of the hosts is what is it self serving.

Pierre:

Self serving?

 Tom:

Selfish like, bring on guests we want to learn from…

Pierre:

Get your free consultation.

Tom:

Exactly.

Michael:

Love it. Awesome. So as we all know, life is very time consuming. And especially for those of us that have a nine to five or that are working day jobs, and then piling on kids and family responsibilities, and then adding on this layer of real estate investing. And for those who who are just learning that can feel like it's really time consuming. So we're going to walk through some strategies today that a lot of us have used personally, and so we can add some commentary into how it's been going. what's worked well, what hasn't worked well. But so we're gonna break this down in a couple different chunks. So, Emil, do you want to kick us off with the first strategy that folks can use to help manage some of their time?

Emil:

Yeah, I'd love to. So I've actually tried a lot of the other things that we've outlined in our doc here that we're going to go over. But the thing that has really stood the test of time for me has been planning out my days in advance. And the biggest actual, like action item from that is putting things in my calendar. So I find that whatever I need to get done that day, if it makes its way onto my calendar, I have a much, much higher likelihood of getting it done, than if it's just kind of floating around on a to do list or floating around in my brain. So it's like some psychological thing where I've put on the calendar, I have this accountability to myself, it's sitting right in front of me that notification comes up.

So for me that's like, what I found to be one of the most helpful things and actually blocking things, setting aside a specific time to get them done. And getting them done. I think you can do there's a lot of stuff, I don't think it's just work, I think it can be, you know, in the context of real estate investing, if it's 30 minutes in your morning, right at 7:30am. Before you start work, whatever it is, to review properties or to read a real estate book, or a course you're in or whatever it is, whatever that action item for you is to keep progressing in your real estate investing, just blocking out that small chunk of time every day, I think is one of the best things I've found in terms of time management.

Michael:

So Emil, I've got a question for you because it's something that I know you and I have talked about in the past and I've been trying to get better at how far in advance do you set the time block? Or do you schedule your day? Is it a day before? Is it day of the week out?

Emil:

I used to be really good about like day before and I've slipped a little bit i think you know, as this is a bad excuse, but as more responsibility piles on I think it's like easier for those. It's just a habit I don't have anymore so I usually wake up I have my to do list. I'm like, What are the things I need to get done today? And then I'm usually just blocking them off throughout the day. But there's certain things and we're going to talk about it later than I've actually just become habits right like the first 30 minutes This is what I'm doing in the day. I don't even need a time block it. It's like those things that are happening every day become a habit versus a time block for me.

Tom:

Oh, do you set like recurring schedule? Or do you know when you're setting those time blocks any advice in the way that you're setting up?

Emil:

Yeah, so it's usually okay let's say I'm tackling things from my day, right? I need to whatever have some marketing campaign I need to get out the door that day. It's usually just like I'm blocking off Whatever chunk of time and I actually, I don't like to give myself gonna realistically take an hour, I'll just block off, usually try to block off 30 minutes, I've noticed that the longer the timeframe that that thing is blocked, you kind of just expand the time that it takes to get it done. So I like to keep things in like in small blocks, as well as one thing I found useful.

Michael:

Is that a humble brag for that you're really efficient.

Emil

No, a lot of times it goes over, but at least I'm like, it has a name. But like, whatever time you give yourself, you expand that fast. Yeah, whatever to just fill that time. There's plenty of times where I go past it. It's just I think more helpful to try to, I don't know, put less time than you think it'll take. And then if you need more, it's all good.

Michael:

Yeah, that makes total sense. All right, we move on. We want to tackle anything else.

Emil:

Yeah, that was it for me in terms of my biggest time management tool.

Michael:

Awesome. So moving on here, Pierre, you had this really killer name for what you're going to be talking to us about? You wanna jump in here?

Pierre:

Sure, yeah, I'm not going to be super innovative here. But it's just something that I find that works really well for me, and kind of every level of planning, say, like life goals or specific projects, but it's reverse chronology. It's where you identify what your end goal is going to look like, and then make a schedule working backwards from there. I feel like a lot of our strategies would overlap quite a bit. So I would use a meal strategy as well, to implement this reverse chronology. Say I have a project due by the end of the year, I know all the tasks that need to be done to make that project happen. So I'm going to plug in those time slots on my calendar to make sure that I have the time allocated properly to be able to achieve that goal by the end of the year.

Michael:

Awesome.

Tom:

Love it.

Michael:

And how incremental? Are you breaking down those tasks that have to do is it a quarterly monthly daily, hourly kind of a thing?

Pierre:

Dependent on the size of the project, but say, it's like a deliverable for the job here, I would break it into kind of manageable tasks like I like a meal, I get pretty distracted after about an hour of working on the same thing. So I would say kind of hour in less chunks. And with my job here, too, I got I wear a couple of different hats. So if I just spend too much time on one thing, I'll fall behind on another thing. So say time blocks of about an hour or less.

Michael:

Cool.

Tom:

It's great. I think so many times it can be intimidating if you're looking at a project. And it's it's almost as kind of like white paper, you know, I love that concept that you're talking about reverse chronology and sort of chunking it down into individual bits and having you know, clear deliverables on each stage of that. That's love it fantastic.

Emil:

This one hits home for me, because I actually now despise yearly goals I think they're just too long of a timeframe. And it's, for me, it's like quarterly. And that's it, right. Like, I think it's good to have what's that big picture goal, whatever it is, but like, unless it's in a shorter time block, I just don't think your mind can like, get to the next action item. And just like, Alright, here's this short window of time, here's what I need to get done here, the outputs I'm going to do, versus like a year, I think is just so much time. And I don't know, I personally, the max thing I'll go for is like a quarter at a time.

Pierre:

Totally. And there's this kind of psychological thing about getting small wins all the time. If you can just rack up a bunch of tiny wins, you can get momentum going. And that helps a lot.  

Michael:

Totally,

Pierre:

Michael:

So Pierre, I got to put you in the hot seat here for just a second because I think you're the perfect test case for talking about reverse chronology. So you and your brother working towards investing in real estate, you have this big lofty goal. What if somebody doesn't know what action items they need to take to get to that end goal? How can they use reverse chronology to kind of set up times and action items? If they're not sure what that path looks like?

Pierre:

Sure.  That's exactly where we're at right now. So we don't know exactly what's our next step. You know, we hear Michael Zuber when we had him on he was talking about just 15 minutes a day get to know your market. We’re like, what does that mean, get to know your market? like do I go just browse the MLS and just see what's available on that market? Is that getting to them your market? Do I get the newspaper from a particular market? Like what does that mean? So I think there's a lot of gray area in between now and the finished product. But the finished product is pretty clear we want to buy a house, at least the end goal is a definitive goal. And so we're thinking, Okay, we want to house by June next year. So how long does it take to close a property? Maybe I don't know how long you guys like 30, 30 days, 30 days to do that. Okay. And then so we're giving ourselves about two and a half months, about 10 weeks back from the point that we want to close that property. So if we want to close on June 1 around that time, we're going to subtract 10 weeks off of that and so that by that point, we should have a market chosen a pm selected, maybe some opportunities or some options for a lender kind of planned ahead. So right now it's just we don't know what to do. Maybe we'll call Michael at Roofstock Academy and get a coaching session.

Michael:

I think that's such a good point to bring up that. So often that path isn't crystal clear. We don't know all the steps, and especially for real estate investing, and especially for new real estate investors, what that looks like, and there's so many stumbling blocks, but I think like you and your brother are doing is taking one step at a time, all in the right direction, knowing that you're headed towards that end goal. It might be a little bit sideways, one day might be a little bit, you know, 45 degrees off the path, but still headed in that direction. And that's okay. Right? You don't have to know everything before getting started in order to get started, right.

Pierre:

Yeah, so we find tasks to do, but we're looking forward to maybe sit down with you, Mike, and just get a more clear, step by step where we're going

Michael:

Totally yeah. I'm really stoked for it. I think it's gonna be a lot of fun. Alright, so moving on. Tom, can you talk to us about some strategies, tips and tricks that you've used in the past?

Tom:

Yeah, so the theme that I'm going to talk about is make a system out of it. So there is a science around project management and task management. And there's a lot of tools out there. So using specific tools, some things that I like to do is I use Asana as sort of a day to day task management tool, and you can create templates. So if there's like types of tasks or projects, you can create a template and then clone it. So it's real estate related and analyzing, you know, a property or closing, you know, I have this checklists and things that I can use again, and again, there are no you don't have to everyone doesn't have to use the same tools, I think everybody is unique, and what makes them productive and getting things done. Like there's times where a pen and a paper and planning things out is really effective. For me, there's times where opening up a Google Sheet is really effective.

And sometimes in this exercise of going through and planning it, you may not necessarily use that like plan sheet again. But it feels like me, sometimes when I'm writing on paper or writing in Excel, like the process of writing it, it's like I'm writing on my brain in a way. And that kind of helps move things forward. Some other specific tools, I believe it's pomodoro is like a system where you work 20 minutes at a time, and then 20 minutes off, or something like that, and again to that theme that everybody's unique and the way that makes them most productive. So I think it's worth trying out a lot of different stuff, just like a meal mentioned, you know, some things have stuck, something hasn't. And it's worth the exercise of at least giving things a go.

On my desk at Roofstock, which I haven't been there a long time I miss it because we've been pandemic, I have this thing called the time timer, which was invented by like a kindergarten teacher who's either husband or wife was a consultant at McKinsey, this, you know, top consulting firm, and this consultant is like, wow, this is incredible as a way to manage time, it's like a reverse timer. So it's like, when you you spin this clock, it turns red. And as time passes, the red gets smaller and smaller. So it's like a reverse stopwatch if that makes sense. It has this red, big, huge visual thing. Anyways, I think they started using this time timer at like Stanford GSB. And like does other you know, kids consulting firms really cool tool time timer, they're like limiting yourself just to 20 minutes. It's this cool visual for meetings, it's super effective, too. I'm starting to digress a little bit. But the point is to look at some of these different tools out there and give them a shot and see what sticks for you. Not everything is for everyone. And honestly, it's totally reasonable that changes over time and what makes you most effective as systematizing, your process of prioritizing and working through projects and all of that good stuff, just don't be afraid to try stuff out on that front.

Emil:

I use to use the Pomodoro Technique religiously for like a year or two. If your job involves, I think a lot of like project or task completion and you don't have a ton of meetings. Fantastic, fantastic way to just like, get through a lot of different tasks and just work with rhythms. You know, it's really hard to spend two hours straight focus on something. But the Pomodoro Technique is like an awesome way to just stay in focus, give yourself a break in focus, give yourself a break. So I was a big fan of that one for a while.

Tom:

Yeah, the last kind of just two elements I wanted to mention is, is make it a ritual. So Michaels discussion is going to touch on a little bit more about aspects like this, but protect that time, the more that you do it, the more that turns into habit. And you might find that you stop using some system that works really well. And sometimes you stop for not a good reason. Like, perhaps for I don't know, whatever reason, like you just can't find your clock or whatever, and you don't use it. And then you realize a bunch of time passes. If you found it helpful, like go back and use it again. But you know, and don't be hard on yourself in the process. So make it a ritual, make it a habit systematize it,

Michael:

I think that's so great. And you can also gamify it too, and kind of that systematize it challenge against yourself, see how you do and keep logs of stuff, too. I found to be really helpful.

Pierre:

The program that my brother and I are using to organize our project is Trello

Emil:

Trello is awesome.

Michael:

Yeah, I like Trello, Trello is great.

Pierre:

It's pretty cool. It's like a series of tabs that you can organize your tasks in. And so you can have like hierarchies of different things that you're working on and comments and links and more When you finish this particular task, you can just drag it over to the complete tab. So let's

Michael:

Get that hit of dopamine. Yeah. Nice.

Tom:

Other ones is a monday.com is a project management software. Right. Trello. So I like Asana. Yeah, a lot of good ones out there,

Michael:

Right on. Were you going to say something?

Tom:

I was gonna say, go ahead, Michael.

Michael:

Awesome. So I gonna be talking about kind of the high level, how to put yourself in a position to be successful. So I think one of the biggest things here is, is first and foremost, determining when you're most productive, whether that's the morning and the night, midday after lunch before lunch. I think everybody has kind of a hot zone, so to speak of when they're most productive, and for each person figure that out, because it's not going to be the same for each of us. I'm curious to get your guys's hot zone. Tom, what are you most productive

Tom:

Early bird worm, not midnight oil guy, early bird worm for sure. I'll even like something about like getting up extra like, weirdly early gives me a little bit of adrenaline like but getting out of bed sucks. But like, once you're up, it's like, oh, man, like, let's do this, you know? Yeah, let's say I have something do like in the beginning of the day, I'm so much better suited to just Alright, I'll set an alarm for 4am go to bed relatively early, and then get up and do it versus just trying to grind. I mean, there's some situations where you'd like have to stay up and grind but a definitely more of an early bird worm. That's where my creative juices are flowing best.

Michael:

Okay, Pierre, what about yourself?

Pierre:

I like the morning before people start bugging me. I think like around 9-10 people start sending me requests for things. And so I like getting to work early to get a lot of those things that I need to focus on done before people bug me.

Michael:

Awesome. And Emil?

Emil:

I have like three spreads throughout the day that I've kind of realized are like my natural most focus, so nine to noon, three to five, and then like nine till 11pm.

Tom:

Multisport guy Nice.

Emil:

Yeah, I don't know. It's like, all the other times I kind of just try to block with like meeting or admin stuff, but for some reason, like those three points in time, or when I feel the most creative or like focus, so try to work, try to put things around those hours that require like, different focus or creativity.

Tom:

How about yourself, Michael?

Michael:

I'm kind of like Emil. So like 4am to 7am is really good. And then like 7pm to 10pm I find I can get a ton of stuff done. So kind of like me. I was mentioning and Pierre was mentioning those…

Emil:

You wake up at 4am?

Michael:

Occasionally, yeah, sometimes naturally

Tom:

Catch the surf man. That's when it's empty.

Michael:

It's when the tubes are curling man.

Emil:

Okay, surfing doesn't count, right? Sometimes I'm up at 5am to go surfing.

Pierre:

Yeah, I left out all of my other ambitions.

Michael:

I mean, I'll occasionally wake up at four and just crush you know, just do some deep work as they call it and just get a ton of stuff done because of everything you guys just mentioned. No one's disturbing you doing some kind of real estate stuff in Portugal. So that's also a good time to be in touch with people out there as well as on the east coast. Some contractors out there so sometimes I have to do sometimes it's just for fun. But it's kind of sick thoughts for fun waking up AT 4 am.

Tom:

I think there's like some adrenaline bit to it. I mean, I'm not like regularly But no, no, but I ride with you, man. I'm right there with I mean, getting getting out. getting out of bed sucks. But I think once you're like in flow, yes. In flow. Yeah. It's kind of a related question. Is there any type of tasks that just makes you cringe like you just hate doing it? Like so much?

Michael:

Recording podcasts?

Tom:

Oh, yeah, me too.

Pierre:

I have to say editing podcasts?

Michael:

The worst.

Tom:

Yeah, go first. I hate returning things. Like if you order something that's broken, and it's like, you need to return it. I like literally can't I probably have $200 worth of returns that I just couldn't be like, just like makes me mad. It says it's like boxes of things that either have like something broken when it arrived. And so as soon as I situation comes up, I might get some dread on me. So not a good returner of packages. It's my anti superhero power.

Emil:

Tom, what are your greatest weaknesses? I just can't return things.  I seize up.

Pierre:

I feel you Tom.

Michael:

I don't know. Do you guys have anything that makes you… I’m just kind of thinking

Tom:

It’s hard being perfect, isn't it Michael?

Michael:

Yeah. It's

Emil:

emails, emails that have like, mountains and paragraphs of text. It's like, Nope, I do not want to write a sonnet back to you like,

Tom:

Yeah,

Emil:

Can we just have a five minute conversation? I don't want to write a book right now. That's I just kind of… like

Pierre:

Certain admin tasks. Oh, yeah. Just a little dry.

Michael:

Yeah, though. My last good Mother's Day my wife will attest to this but like filing like filing stuff like paperwo rk stuff because we can just get so much so much of this stuff is still snail mail that we get an old civil paperwork. So converting that to digital or just file like filing stuff. away. I've got papers on the on the windows. So right now and I Paris like really Michael? Really? We have fun like I got you filing cabinet specifically for this like, Ah, no, but it can't just live there.

Tom:

Yeah, it looks happy there.

Michael:

Right? It's getting some sunlight in the growing.

Tom:

Alright, let's get back to this.

Michael:

Alright, back on the rails here. Yeah. So another thing that I think can be really helpful that I've used in the past is removing distractions. And so so I used to work at home in my last job, it was half in the field half from home. And I would always have buddies asked me like, dude, like, how did you just not watch TV all day? Like, but just turn it off? I don't understand the question. So hiding things from yourself if you need to, whether that's the remote control, or passwords to stuff or just like things that distract you golf clubs, for you, Tom, you know, out of sight, out of mind kind of a thing. And then also identify, what's that

Tom:

Phones, man phones.

Michael:

Yeah, turning your phone off or on Do Not Disturb or just putting it away, can be super helpful. Because I think I'm guilty of it. If I see it buzz or light up, I'm tempted to look at it. And that's a huge distraction. So essentially, I was listening to this podcast, the BiggerPockets podcast the other day that came out. And they were talking about identifying what is and is not a distraction. And so people always saying like, oh, man, I like went on social media for an hour. And it was so distracting. And now that hour is gone. And that added up. But they were talking about in the episode as well. What were you planning to do in that time? Let me see your calendar. And so if you didn't have something planned for that hour, anyhow, is it technically a distraction. And the argument they were saying is no, because it didn't stop you from doing anything, it didn't prevent you from doing something. So look to identify what it is you're trying to accomplish. And then try to identify the distractions. And I think using time blocking can be a really good way to do that. Because then you'll actually have set times, but also be gentle with yourself. If you didn't have something planned, who cares? like whatever, go do it.

If it makes you happy, do it. And I think kind of giving in to those urges can help you not feel so distracted. I mean, if social media is your vice, you might constantly be thinking about it while you're trying to do other stuff while you're trying to focus on something else. And so if you need to go check social media for 1520 minutes, set time aside in your day to go do that, enjoy it and then go back to what you're doing. You can stop thinking about social media, you know, or whatever that vice is

Emil:

Social media is the devil.

Michael:

Social media is the devil

Tom:

Was that Netflix documentary?

Michael:

Yeah.

Emil:

The social dilemma associate. There I was very, very interesting documentary

Tom:

PhDs trying to mess.

Emil:

That is really what's going

Michael:

They were talking about on this podcast episode how the host was totally in disagreement with it. He said, because the movie missed an opportunity to tell us what we can do. And it's it's like, oh, it's your there's nothing you can do your sucker to social media. It's like, Yeah, but also not really like you can you can turn it off, there are tons of things you can do, you can time block it so you can go get that fix, and go spend your time doing it. And then you don't feel bad for having done it. I got the itch man,

Tom:

I got a fun tip for with related to social media, you can turn the color off of your phone. So it goes black and white. They call it moto or is their turn

Pierre

Monochromatic.

Tom:

Monochromatic. So it makes some of that, you know, sizzle in red Heller. Yeah, you don't have to look at it. And it makes it black and white. And I have my phone like that, too. If I feel I'm getting a little too stuck into it. I tried to see if a black and white.

Michael:

Yeah, nice. I think it's probably easier on your eyes to especially like in dark rooms. All those vivid colors can be really harsh.

Tom:

It's like social media methadone. Good.

Michael:

That's exactly what it is. And then so kind of moving on here talking about Tavella, there's no Popeye needs his spinach. So figuring out what your spinach is, you know what juices you up to help you get focused to help you do work. And so for me, a big drink of water in the morning is super helpful. I try not to drink coffee, it just makes me really jittery. But occasionally if I really need a big boost, I'll have a little bit of coffee, and then I'll feel it all day. So figure out what helps you get going or kind of get into that proper headspace. And then do that use that regularly. And it's interesting. Emil, you were talking about, you know, not being able to sit for a couple hours and do stuff and how so that pomodoro style was really helpful, you know, kind of 20 minutes on 20 minutes off. I'm so the exact opposite. I can sit for three, four or five hours and just like work and do and accomplish. And again, this is totally not a humble brag and says it needs to be my own horn. But.

Emil:

Uh huh.

Michael:

I think figuring out for each individual person what works best. what works best for you is super great.

Tom:

Toot toot.

Michael:

And so if you are someone that can sit for hours and do work, great, but don't mistake being at the computer and doing stuff with accomplishing stuff because you can be busy and not accomplish anything. So look to make sure that you're actually getting some traction. And that's something that a theme in the episode they talked about is that bigger pockets episode is traction versus distraction, so I won't spoil it for everybody. Any thoughts there before we move on team?

Tom:

Love the busy versus productive, be productive Don't be busy. And also the Popeye needs a spinach. I know for myself I sometimes a little bit of a snacker. So trying to get something reasonably healthy but if I know that I would ever work better with Cheez Its and it's really important for me to work really well. Maybe just have a little a couple of visits or I'm feeling special. I can add some walnuts or goji berries. I don't know. I'm just throwing some buzzwords out there. Anyways, so if you're a snacker like just yeah, know what your know what makes you tick.

Michael:

Have you ever had the Tabasco Cheezits?

Tom:

No, it sounds great.

Michael;

Oh, they're so good. They're so good. Alright, so moving on here. Just some other rules that I try to abide by. I'm curious what your guys's thoughts do not multitask. I'm going to come out and just say it's a fallacy. I think it's a really good way to do a bunch of stuff poorly. Not a fan of multitasking. If you can do it great. I'm not a believer in it. your guys's thoughts on multitasking,

Emil:

I'm with you, my wife. And I always have this argument. My wife's a nurse. And she's like, if I couldn't multitask, I could never do my job. And I say, you know, power to you. I am like one thing at a time, or else I just do them all terribly. So I think some people can do it. I just, I don't know, I don't know how doesn't, does not compute for me.

Tom:

You can see you're doing it. But what's probably happening is you're doing one thing, and then quickly switching it

Emil:

Switching. It's not multi, yes, it's switching. But I'm terrible at that even right, I need like singular focus. Personally.

Tom:

same

Michael:

Pierre, same for you?

Pierre:

I think you guys are right, and that it's switching a bunch of tasks, but it's keeping kind of a big picture of a lot of things you have going on, so you can switch efficiently between them. So I think that's kind of my version of multitasking, because I do like my position here is not one thing. So I do have to keep a bunch of tasks in my mind at the same time with my goal where I want to get you at the end of the day. But I think you guys are right in when the rubber meets the road. And I'm acting, I am only acting on one thing at a time.

Michael:

So it's like on an iPhone when you up, swipe and hold it to look at all the applications you have running and just grab the next one?

Pierre

iPhone what? We had this conversation Mike.

Michael:

I know, I know. You’re the green bubble when I text. So there's something else that I will be the first to admit I'm terrible at and that can be really helpful for time management is learning to say no, I There's something I've been trying to work on over the last couple of years, saying no can be one of the most empowering things you can do. And it can also be one of the most beneficial things you can do in your time management realm. And so there's a polite way to say no, and I think doing so can be really helpful and really open up your schedule. Because if you become the yes person that can often become cyclical and habitual. And people know Oh, great. I can go to Emil because he said yes, last time. So he's gonna say yes again. And you can be pretty quickly salad bagged with a lot of other people's stuff that isn't necessary for you to perform whatever it is, you need to.

Emil:

I am a huge, huge fan of saying no, I feel like I used to suck at this and would say yes to everything. I think there's a time in your life where it's good to say Yes, a lot. I think if you're early in your career Early in whatever you're doing, I think saying yes, and being like, super open and liberal with your time makes a lot of sense. I don't think saying no, when you're early makes sense. I think you'll you'll be at a deficit. But as you know, some things start to fall in place or whatever and you're growing. If you don't learn how to say no, you're just gonna be doing a lot of stuff that's unnecessary. And I think with time you start to learn that a lot of things aren't going to move the needle, it's just like the nature of the game there's, you know, the 80-20 rule, where 20% of what you do is going to make 80% of the results and so I think with time you just get better at that and it helps flex your no muscle to be like okay, is this really going to make a difference?

Michael:

So question for you Emil for the new people who are maybe just starting out their career How do they balance learning to say no with setting boundaries and line setting expectations because I could very easily see you're the yes person at the beginning. Everyone's like cool Emil is easy. And then all of a sudden five years down the road someone else used to be like no, like whoa, meals kind of a jerk all of a sudden.

Emil:

I don't think people perceive it that way. I think if you're polite about it and just say man I have these things going on I just I don't have the capacity for this right now. Thank you for keeping me in mind or whatever. I think there's there's a nice way to do it and not right like if people know you're not just like saying no so you can kick your feet up and do nothing. right it's I think people will respect it if you're polite about and you know, give a reason people always appreciate a reason even though you're not obligated to give one.

Pierre:

That's right saying no to something and saying yes to something else. So if you struggle saying no, just tell someone that you've said yes to something else already.

Michael:

Oh, Mic drop here. Exit stage left, episode over love that. Yeah,

Tom:

I’ll add a couple of more points. So I love the point that Emil said about you know, being a little bit younger maybe was Michael said but being younger in your career. Like there's something to be said for grinding super hard. My wife, one of her earlier job, she was at PwC for a couple of years. And she had a manager who would joke that Yeah, you know, if you're working 100 hours a week, it's like you're getting two years of experience. And just one year, I thought that was like a funny way to think about it kind of disgusting. But you know, but it's, it's, I think there's a time and a place in your career for gain that value.

The other thing, I think in that saying no, is really important. I would always put it into context into who is asking you to do someone? Is it someone who's kind of like constantly just trying to delegate all their work to somebody else? Who or is it someone who like, wow, this is someone I should, like, impress and be awesome with. So I think it's all contextual. And also, the type of work is this type of work that I'm going to be building some muscles that I can use later on in my career is this type of work that's going to make an impact to revenue or expenses and directly touch that kind of stuff. So it's all contextual. And I think what happens over time, as you get better to say, No, you get better at reading in between the lines of like, is this something that's valuable for the company? Is this valuable for me? Or is this just someone offloading some some random busy work? So I think that's all important to understand. And also, you'll just get better over time. And being able to read between the lines as stuff comes comes across.

Michael:

Yep, I think that's super great. points, Tom. And I think also segues nicely into the last thing I want to talk about, which is learning to delegate. And I think so many of us, especially in the real estate space, again, I am so guilty of this, but trying to do everything yourself, because no one can do it as good as you can. So if we're investing remotely, a lot of us will be relying on property managers. So being okay, letting go a little bit and saying, hey, I need you to do this. For me making phone calls, you know, delegating tasks, your time is better spent elsewhere. And I think a lot of people have a really hard time paying for services, or paying to have someone do something. But at the end of the day, if I can pay someone 20 bucks an hour to do something for me, and I can go make $100 an hour or $1,000 an hour doing something else, because that's what I'm better suited for. That's a really great use of my time and a really great use of my money. So a lot of people, again, have a really hard time doing that. But look at the actual cost, versus what your ability to earn is for that time.

Emil:

Very good point. It's why I don't mow my own lawn.

Tom:

Yeah, all the great resources out there for help extra stuff. So mowing,

Emil:

You know, family time, you know, it's just like, you start to, I don't know,

Tom:

yeah, there's a lot of good websites on helping to delegate or bringing in people to help out. So like Upwork is a good one, I had a great use case where I was at a friend's wedding, I was the best man, I had to write a best man speech. And I put together like, kind of like spilled my guts on a page, and then brought in a professional speech writer who actually wrote for cash flows that show drunk history. He was like, he was like a producer for that show. So he's like, super funny, like stand up comedian. And I best use the mice, I paid 100 bucks, and he basically took rearranged my like, gut spilling into a really well put together speech. And it like brought down the house, you know, using and what I want you guys to take away from that story is just test it, like create an account on either Upwork or one of these other platforms. Fiverr is another one, and you know, have some small tests, and then do it like, just bring someone in, it's, the more times you do it, like the better you're gonna get at it. And then you're going to bring down the house at a wedding. So it's worth doing.

Emil:

That's so smart. I never even thought about that. That's a really smart idea.

Michael:

The last tip I'm going to share on this is I got it from somewhere else, I can't take credit for it. But right for like two weeks just write down everything that you do during your day, task wise. And then look to see at the end of that two weeks, what could you pay someone to do? Did you hire a virtual assistant? Could you pay a TaskRabbit? Or someone on Upwork? Could you pay someone else to do some of these tasks, and essentially like to buy back some of your time. And I just thought that was really interesting exercise because I think so many of us do things that without even thinking about without even realizing what we're doing. And when we really stop and lay it all out, it can be pretty eye opening to see how we're spending our time.

Pierre:

It's a good accountability mechanism as well. Let's see how much you know, write down your bad stuff, too.

Tom:

So love that audit, do the audit exercise of your two weeks. All right, I'm gonna add in some final thoughts that I have here. One of them is Be sure to charge your battery like these systems that you run or these you know, it's all a little bit of extra work. And it's really important to know how full your balloon is because the worst thing you can do is continue to take on more stuff and you just end up doing like doing badly poorly. So charging your battery take time off. Like if you work at a job that has time off like know how much bandwidth you have no one you're you're gonna blow and just be open honest and constructive with everybody about when you need to charge that battery.

The other one is continued to evolve. It's not a one size fits all. And it's also not a one size all the time. I don't think I said that right but often too. Your systems and the way that you do things are going to evolve over time. So be okay with that. And what works for you now may not work for yourself in six months, but just continue to try new things out have that spirit of keeping the pistons going. And then lastly is to not be too hard on yourself, if you're, you know, not being super productive, or you're getting whatever lost in social media or you're just you're not where you want to be. There's this parable about getting hit by two arrows. So like, one of them is the first mistake. And the second one is just kind of shaming yourself for feeling really bad for not doing great. So get hit with the one arrow be okay with it, and then get back on the horse. So that's my Don't be too hard on yourself and pistons going. Yep, that's those are my final thoughts.

Michael:

Oh, love it, love it. I think that's just to echo what you said, Tom, being gentle with yourself, I for sure have beat myself up really good for decisions I've made, especially when it comes to real estate investing. And you know, either biting off more than you can chew or just making a poor decision rushing into making a decision. And so I think it's so important to pick yourself up, dust yourself off and realize that, okay, the decision has been made, it's time to move forward, there's not you can't change that unless you can well then go back and change it but just continually moving forward. And try not to dwell on the past, which is so much easier said than done. And I know that but I just a reminder to everybody listening it be gentle with yourself, this is a you will make mistakes, you will learn the hard way, I will promise you that. So just know that and kind of move forward from it. Emil and Pierre you want to take us home?

Emil:

My final thought, try to keep this stuff simple. Don't later on 12 of these things that we just mentioned, Pomodoro Technique, adding things to your calendar, blah, blah, blah, blah, blah. You're just like, I know people who do that. And they're often the least productive people I know. Because all they're doing is juggling tools and techniques and strategies and stuff, I would say try to just hone in on a couple things and just get good at those.

Pierre

Yeah, I'll echo that you can read a ton of books and just learn a ton of different methods for keeping track of time but then that's time being lost to if you haven't put any of it into action. So just choose one thing. Start with that. Get Started.

Michael:

Do you have any resources books that you'd recommend Pierre?

Pierre

No, don't read any books. Just do what we just said.

Michael:

Audio books only on your way to doing other stuff.

Emil:

I have one because I think the biggest thing here is making these things habits. It's called Atomic Habits by James Slear that was that was one of the best books I've read on forming habits.

Michael:

Awesome. Yeah, Tom give any book resource recommendations?

Tom:

Classic one, Seven Habits of Highly Effective People. Stephen Covey wrote it, it's a classic classic, it's talks about sharpening the saw, a lot of stuff we're talking about, but I love audiobooks when I'm like doing dishes and just like kind of thing and but not really. So that's in my regular queue of learning and doing better. So that's my that type of productivity hour is cleaning or dishes or whatever. Poppin an audiobook

Michael:

So is it almost like you're multitasking?

Tom:

Shut up Michael. Well, no. Those are that's a good thing to multitask with.

Michael:

You can walk and chew gum. Absolutely.

Tom:

Yeah. with you. I take back my shut up Michael.

Michael:

A book that I would recommend that people check out if you're interested in implementing some more of this stuff. We talked about his Miracle Mornings by Hal Elrod it's a really great book. I implemented a bunch of stuff and kind of fell off the wagon a little bit, especially with regard to waking up early, but I think there's a lot of really good useful tips tricks in there as well. Alrighty, well guys, this was a lot of fun. And hopeful that people got a lot of useful stuff out of this and know that everybody's human Everybody makes mistakes. So figure out what works best for you and then truly go look to implement it and not just for a day or a week or a month you know, really give it a college try. Give it your best. And it doesn't work move on because not everything will work for you.

Emil:

College try I didn't I don't know.

Michael:

Isn't that isn't that isn't the thing

Tom:

Its like a 20 saying like, like a 30 like “the good old…”

Michael:

Yeah. prohibition just around the corner give it a college try.

Emil:

A sincere effort or attempts at performing a difficult or seemingly impossible task.

Michael:

All right.

Emil:

I stand corrected. Continue, Michael.

Michael:

Awesome. For once. For what yeah, that's my one for the month guys.

Emil:

Check it off.

Michael:

That was our episode. Thank you everybody so much for hanging in there with us. Really appreciate it. If you'd like this episode, please feel free to give us a rating or review and subscribe wherever you listen your podcasts and we look forward to seeing you on the next one. Happy investing,

Tom:

Happy investing.

Emil:

Happy Investing,

Pierre

Happy time management.

Investing in real estate remotely can be intimidating when you are juggling a full time job, family and the host of responsibilities life throws at you. In this episode we give you 4 tips to make sure you get everything done and stay on track. 

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Transcript

Michael:

Hey everybody, and welcome to another episode of The Remote Real Estate Investor. My name is Michael Albaum and today I'm joined by my co hosts,

Tom:

Tom Schneider,

Emil:

and Emil Shour

Pierre:

and Pierre Carrillo

Michael:

And today we're going to be talking about time management, something that's really important for most people, but especially important for those of us that are investing at a distance remotely, we're gonna be talking about some really practical things you can implement into your daily routine as an investor to help you manage some time. So let's get into it. Alright, guys, so we all know that time…

Emil:

Hold on, hold on, hold on, we got a special guest on this episode, I feel like he deserves a very, very warm welcome and introduction to our listeners.

Michael:

Pierre?

Pierre:

Hey, what's up?

Michael:

Can you give our listeners a little bit of background on who you are you pepper in some really great commentary in some of the episodes. But now you're going to be a full fledged host on this episode. Who are you?

Pierre:

Yeah, I've been lurking in the corners since the beginning here, typing in when something's relevant. But yeah, I'm the producer on the show. And just starting out in the real estate game with my brother currently. So I don't speak much because I don't have much experience in this space. But I'm just learning from you guys. And excited to get in on this stuff.

Michael:

Right on, we're stoked to have you.

Tom:

Fantastic, and a great episode to jump in on time management being juggling, like 10 different jobs with the podcast and Academy and getting your real estate investing stuff going like, yeah, excited to have your input on this episode.

Pierre:

Well, thanks. I need some of it too, because I have a weekly meeting with my brother. And we're always like, how do we use our time to really move this project forward? Because it's easy to just get stuck? Oh, let's analyze properties. Let's dive into this. But I think this is really going to be helpful. I'm going to definitely link my brother to this episode afterwards.

Tom:

That's like the theme of the hosts is what is it self serving.

Pierre:

Self serving?

 Tom:

Selfish like, bring on guests we want to learn from…

Pierre:

Get your free consultation.

Tom:

Exactly.

Michael:

Love it. Awesome. So as we all know, life is very time consuming. And especially for those of us that have a nine to five or that are working day jobs, and then piling on kids and family responsibilities, and then adding on this layer of real estate investing. And for those who who are just learning that can feel like it's really time consuming. So we're going to walk through some strategies today that a lot of us have used personally, and so we can add some commentary into how it's been going. what's worked well, what hasn't worked well. But so we're gonna break this down in a couple different chunks. So, Emil, do you want to kick us off with the first strategy that folks can use to help manage some of their time?

Emil:

Yeah, I'd love to. So I've actually tried a lot of the other things that we've outlined in our doc here that we're going to go over. But the thing that has really stood the test of time for me has been planning out my days in advance. And the biggest actual, like action item from that is putting things in my calendar. So I find that whatever I need to get done that day, if it makes its way onto my calendar, I have a much, much higher likelihood of getting it done, than if it's just kind of floating around on a to do list or floating around in my brain. So it's like some psychological thing where I've put on the calendar, I have this accountability to myself, it's sitting right in front of me that notification comes up.

So for me that's like, what I found to be one of the most helpful things and actually blocking things, setting aside a specific time to get them done. And getting them done. I think you can do there's a lot of stuff, I don't think it's just work, I think it can be, you know, in the context of real estate investing, if it's 30 minutes in your morning, right at 7:30am. Before you start work, whatever it is, to review properties or to read a real estate book, or a course you're in or whatever it is, whatever that action item for you is to keep progressing in your real estate investing, just blocking out that small chunk of time every day, I think is one of the best things I've found in terms of time management.

Michael:

So Emil, I've got a question for you because it's something that I know you and I have talked about in the past and I've been trying to get better at how far in advance do you set the time block? Or do you schedule your day? Is it a day before? Is it day of the week out?

Emil:

I used to be really good about like day before and I've slipped a little bit i think you know, as this is a bad excuse, but as more responsibility piles on I think it's like easier for those. It's just a habit I don't have anymore so I usually wake up I have my to do list. I'm like, What are the things I need to get done today? And then I'm usually just blocking them off throughout the day. But there's certain things and we're going to talk about it later than I've actually just become habits right like the first 30 minutes This is what I'm doing in the day. I don't even need a time block it. It's like those things that are happening every day become a habit versus a time block for me.

Tom:

Oh, do you set like recurring schedule? Or do you know when you're setting those time blocks any advice in the way that you're setting up?

Emil:

Yeah, so it's usually okay let's say I'm tackling things from my day, right? I need to whatever have some marketing campaign I need to get out the door that day. It's usually just like I'm blocking off Whatever chunk of time and I actually, I don't like to give myself gonna realistically take an hour, I'll just block off, usually try to block off 30 minutes, I've noticed that the longer the timeframe that that thing is blocked, you kind of just expand the time that it takes to get it done. So I like to keep things in like in small blocks, as well as one thing I found useful.

Michael:

Is that a humble brag for that you're really efficient.

Emil

No, a lot of times it goes over, but at least I'm like, it has a name. But like, whatever time you give yourself, you expand that fast. Yeah, whatever to just fill that time. There's plenty of times where I go past it. It's just I think more helpful to try to, I don't know, put less time than you think it'll take. And then if you need more, it's all good.

Michael:

Yeah, that makes total sense. All right, we move on. We want to tackle anything else.

Emil:

Yeah, that was it for me in terms of my biggest time management tool.

Michael:

Awesome. So moving on here, Pierre, you had this really killer name for what you're going to be talking to us about? You wanna jump in here?

Pierre:

Sure, yeah, I'm not going to be super innovative here. But it's just something that I find that works really well for me, and kind of every level of planning, say, like life goals or specific projects, but it's reverse chronology. It's where you identify what your end goal is going to look like, and then make a schedule working backwards from there. I feel like a lot of our strategies would overlap quite a bit. So I would use a meal strategy as well, to implement this reverse chronology. Say I have a project due by the end of the year, I know all the tasks that need to be done to make that project happen. So I'm going to plug in those time slots on my calendar to make sure that I have the time allocated properly to be able to achieve that goal by the end of the year.

Michael:

Awesome.

Tom:

Love it.

Michael:

And how incremental? Are you breaking down those tasks that have to do is it a quarterly monthly daily, hourly kind of a thing?

Pierre:

Dependent on the size of the project, but say, it's like a deliverable for the job here, I would break it into kind of manageable tasks like I like a meal, I get pretty distracted after about an hour of working on the same thing. So I would say kind of hour in less chunks. And with my job here, too, I got I wear a couple of different hats. So if I just spend too much time on one thing, I'll fall behind on another thing. So say time blocks of about an hour or less.

Michael:

Cool.

Tom:

It's great. I think so many times it can be intimidating if you're looking at a project. And it's it's almost as kind of like white paper, you know, I love that concept that you're talking about reverse chronology and sort of chunking it down into individual bits and having you know, clear deliverables on each stage of that. That's love it fantastic.

Emil:

This one hits home for me, because I actually now despise yearly goals I think they're just too long of a timeframe. And it's, for me, it's like quarterly. And that's it, right. Like, I think it's good to have what's that big picture goal, whatever it is, but like, unless it's in a shorter time block, I just don't think your mind can like, get to the next action item. And just like, Alright, here's this short window of time, here's what I need to get done here, the outputs I'm going to do, versus like a year, I think is just so much time. And I don't know, I personally, the max thing I'll go for is like a quarter at a time.

Pierre:

Totally. And there's this kind of psychological thing about getting small wins all the time. If you can just rack up a bunch of tiny wins, you can get momentum going. And that helps a lot.  

Michael:

Totally,

Pierre:

Michael:

So Pierre, I got to put you in the hot seat here for just a second because I think you're the perfect test case for talking about reverse chronology. So you and your brother working towards investing in real estate, you have this big lofty goal. What if somebody doesn't know what action items they need to take to get to that end goal? How can they use reverse chronology to kind of set up times and action items? If they're not sure what that path looks like?

Pierre:

Sure.  That's exactly where we're at right now. So we don't know exactly what's our next step. You know, we hear Michael Zuber when we had him on he was talking about just 15 minutes a day get to know your market. We’re like, what does that mean, get to know your market? like do I go just browse the MLS and just see what's available on that market? Is that getting to them your market? Do I get the newspaper from a particular market? Like what does that mean? So I think there's a lot of gray area in between now and the finished product. But the finished product is pretty clear we want to buy a house, at least the end goal is a definitive goal. And so we're thinking, Okay, we want to house by June next year. So how long does it take to close a property? Maybe I don't know how long you guys like 30, 30 days, 30 days to do that. Okay. And then so we're giving ourselves about two and a half months, about 10 weeks back from the point that we want to close that property. So if we want to close on June 1 around that time, we're going to subtract 10 weeks off of that and so that by that point, we should have a market chosen a pm selected, maybe some opportunities or some options for a lender kind of planned ahead. So right now it's just we don't know what to do. Maybe we'll call Michael at Roofstock Academy and get a coaching session.

Michael:

I think that's such a good point to bring up that. So often that path isn't crystal clear. We don't know all the steps, and especially for real estate investing, and especially for new real estate investors, what that looks like, and there's so many stumbling blocks, but I think like you and your brother are doing is taking one step at a time, all in the right direction, knowing that you're headed towards that end goal. It might be a little bit sideways, one day might be a little bit, you know, 45 degrees off the path, but still headed in that direction. And that's okay. Right? You don't have to know everything before getting started in order to get started, right.

Pierre:

Yeah, so we find tasks to do, but we're looking forward to maybe sit down with you, Mike, and just get a more clear, step by step where we're going

Michael:

Totally yeah. I'm really stoked for it. I think it's gonna be a lot of fun. Alright, so moving on. Tom, can you talk to us about some strategies, tips and tricks that you've used in the past?

Tom:

Yeah, so the theme that I'm going to talk about is make a system out of it. So there is a science around project management and task management. And there's a lot of tools out there. So using specific tools, some things that I like to do is I use Asana as sort of a day to day task management tool, and you can create templates. So if there's like types of tasks or projects, you can create a template and then clone it. So it's real estate related and analyzing, you know, a property or closing, you know, I have this checklists and things that I can use again, and again, there are no you don't have to everyone doesn't have to use the same tools, I think everybody is unique, and what makes them productive and getting things done. Like there's times where a pen and a paper and planning things out is really effective. For me, there's times where opening up a Google Sheet is really effective.

And sometimes in this exercise of going through and planning it, you may not necessarily use that like plan sheet again. But it feels like me, sometimes when I'm writing on paper or writing in Excel, like the process of writing it, it's like I'm writing on my brain in a way. And that kind of helps move things forward. Some other specific tools, I believe it's pomodoro is like a system where you work 20 minutes at a time, and then 20 minutes off, or something like that, and again to that theme that everybody's unique and the way that makes them most productive. So I think it's worth trying out a lot of different stuff, just like a meal mentioned, you know, some things have stuck, something hasn't. And it's worth the exercise of at least giving things a go.

On my desk at Roofstock, which I haven't been there a long time I miss it because we've been pandemic, I have this thing called the time timer, which was invented by like a kindergarten teacher who's either husband or wife was a consultant at McKinsey, this, you know, top consulting firm, and this consultant is like, wow, this is incredible as a way to manage time, it's like a reverse timer. So it's like, when you you spin this clock, it turns red. And as time passes, the red gets smaller and smaller. So it's like a reverse stopwatch if that makes sense. It has this red, big, huge visual thing. Anyways, I think they started using this time timer at like Stanford GSB. And like does other you know, kids consulting firms really cool tool time timer, they're like limiting yourself just to 20 minutes. It's this cool visual for meetings, it's super effective, too. I'm starting to digress a little bit. But the point is to look at some of these different tools out there and give them a shot and see what sticks for you. Not everything is for everyone. And honestly, it's totally reasonable that changes over time and what makes you most effective as systematizing, your process of prioritizing and working through projects and all of that good stuff, just don't be afraid to try stuff out on that front.

Emil:

I use to use the Pomodoro Technique religiously for like a year or two. If your job involves, I think a lot of like project or task completion and you don't have a ton of meetings. Fantastic, fantastic way to just like, get through a lot of different tasks and just work with rhythms. You know, it's really hard to spend two hours straight focus on something. But the Pomodoro Technique is like an awesome way to just stay in focus, give yourself a break in focus, give yourself a break. So I was a big fan of that one for a while.

Tom:

Yeah, the last kind of just two elements I wanted to mention is, is make it a ritual. So Michaels discussion is going to touch on a little bit more about aspects like this, but protect that time, the more that you do it, the more that turns into habit. And you might find that you stop using some system that works really well. And sometimes you stop for not a good reason. Like, perhaps for I don't know, whatever reason, like you just can't find your clock or whatever, and you don't use it. And then you realize a bunch of time passes. If you found it helpful, like go back and use it again. But you know, and don't be hard on yourself in the process. So make it a ritual, make it a habit systematize it,

Michael:

I think that's so great. And you can also gamify it too, and kind of that systematize it challenge against yourself, see how you do and keep logs of stuff, too. I found to be really helpful.

Pierre:

The program that my brother and I are using to organize our project is Trello

Emil:

Trello is awesome.

Michael:

Yeah, I like Trello, Trello is great.

Pierre:

It's pretty cool. It's like a series of tabs that you can organize your tasks in. And so you can have like hierarchies of different things that you're working on and comments and links and more When you finish this particular task, you can just drag it over to the complete tab. So let's

Michael:

Get that hit of dopamine. Yeah. Nice.

Tom:

Other ones is a monday.com is a project management software. Right. Trello. So I like Asana. Yeah, a lot of good ones out there,

Michael:

Right on. Were you going to say something?

Tom:

I was gonna say, go ahead, Michael.

Michael:

Awesome. So I gonna be talking about kind of the high level, how to put yourself in a position to be successful. So I think one of the biggest things here is, is first and foremost, determining when you're most productive, whether that's the morning and the night, midday after lunch before lunch. I think everybody has kind of a hot zone, so to speak of when they're most productive, and for each person figure that out, because it's not going to be the same for each of us. I'm curious to get your guys's hot zone. Tom, what are you most productive

Tom:

Early bird worm, not midnight oil guy, early bird worm for sure. I'll even like something about like getting up extra like, weirdly early gives me a little bit of adrenaline like but getting out of bed sucks. But like, once you're up, it's like, oh, man, like, let's do this, you know? Yeah, let's say I have something do like in the beginning of the day, I'm so much better suited to just Alright, I'll set an alarm for 4am go to bed relatively early, and then get up and do it versus just trying to grind. I mean, there's some situations where you'd like have to stay up and grind but a definitely more of an early bird worm. That's where my creative juices are flowing best.

Michael:

Okay, Pierre, what about yourself?

Pierre:

I like the morning before people start bugging me. I think like around 9-10 people start sending me requests for things. And so I like getting to work early to get a lot of those things that I need to focus on done before people bug me.

Michael:

Awesome. And Emil?

Emil:

I have like three spreads throughout the day that I've kind of realized are like my natural most focus, so nine to noon, three to five, and then like nine till 11pm.

Tom:

Multisport guy Nice.

Emil:

Yeah, I don't know. It's like, all the other times I kind of just try to block with like meeting or admin stuff, but for some reason, like those three points in time, or when I feel the most creative or like focus, so try to work, try to put things around those hours that require like, different focus or creativity.

Tom:

How about yourself, Michael?

Michael:

I'm kind of like Emil. So like 4am to 7am is really good. And then like 7pm to 10pm I find I can get a ton of stuff done. So kind of like me. I was mentioning and Pierre was mentioning those…

Emil:

You wake up at 4am?

Michael:

Occasionally, yeah, sometimes naturally

Tom:

Catch the surf man. That's when it's empty.

Michael:

It's when the tubes are curling man.

Emil:

Okay, surfing doesn't count, right? Sometimes I'm up at 5am to go surfing.

Pierre:

Yeah, I left out all of my other ambitions.

Michael:

I mean, I'll occasionally wake up at four and just crush you know, just do some deep work as they call it and just get a ton of stuff done because of everything you guys just mentioned. No one's disturbing you doing some kind of real estate stuff in Portugal. So that's also a good time to be in touch with people out there as well as on the east coast. Some contractors out there so sometimes I have to do sometimes it's just for fun. But it's kind of sick thoughts for fun waking up AT 4 am.

Tom:

I think there's like some adrenaline bit to it. I mean, I'm not like regularly But no, no, but I ride with you, man. I'm right there with I mean, getting getting out. getting out of bed sucks. But I think once you're like in flow, yes. In flow. Yeah. It's kind of a related question. Is there any type of tasks that just makes you cringe like you just hate doing it? Like so much?

Michael:

Recording podcasts?

Tom:

Oh, yeah, me too.

Pierre:

I have to say editing podcasts?

Michael:

The worst.

Tom:

Yeah, go first. I hate returning things. Like if you order something that's broken, and it's like, you need to return it. I like literally can't I probably have $200 worth of returns that I just couldn't be like, just like makes me mad. It says it's like boxes of things that either have like something broken when it arrived. And so as soon as I situation comes up, I might get some dread on me. So not a good returner of packages. It's my anti superhero power.

Emil:

Tom, what are your greatest weaknesses? I just can't return things.  I seize up.

Pierre:

I feel you Tom.

Michael:

I don't know. Do you guys have anything that makes you… I’m just kind of thinking

Tom:

It’s hard being perfect, isn't it Michael?

Michael:

Yeah. It's

Emil:

emails, emails that have like, mountains and paragraphs of text. It's like, Nope, I do not want to write a sonnet back to you like,

Tom:

Yeah,

Emil:

Can we just have a five minute conversation? I don't want to write a book right now. That's I just kind of… like

Pierre:

Certain admin tasks. Oh, yeah. Just a little dry.

Michael:

Yeah, though. My last good Mother's Day my wife will attest to this but like filing like filing stuff like paperwo rk stuff because we can just get so much so much of this stuff is still snail mail that we get an old civil paperwork. So converting that to digital or just file like filing stuff. away. I've got papers on the on the windows. So right now and I Paris like really Michael? Really? We have fun like I got you filing cabinet specifically for this like, Ah, no, but it can't just live there.

Tom:

Yeah, it looks happy there.

Michael:

Right? It's getting some sunlight in the growing.

Tom:

Alright, let's get back to this.

Michael:

Alright, back on the rails here. Yeah. So another thing that I think can be really helpful that I've used in the past is removing distractions. And so so I used to work at home in my last job, it was half in the field half from home. And I would always have buddies asked me like, dude, like, how did you just not watch TV all day? Like, but just turn it off? I don't understand the question. So hiding things from yourself if you need to, whether that's the remote control, or passwords to stuff or just like things that distract you golf clubs, for you, Tom, you know, out of sight, out of mind kind of a thing. And then also identify, what's that

Tom:

Phones, man phones.

Michael:

Yeah, turning your phone off or on Do Not Disturb or just putting it away, can be super helpful. Because I think I'm guilty of it. If I see it buzz or light up, I'm tempted to look at it. And that's a huge distraction. So essentially, I was listening to this podcast, the BiggerPockets podcast the other day that came out. And they were talking about identifying what is and is not a distraction. And so people always saying like, oh, man, I like went on social media for an hour. And it was so distracting. And now that hour is gone. And that added up. But they were talking about in the episode as well. What were you planning to do in that time? Let me see your calendar. And so if you didn't have something planned for that hour, anyhow, is it technically a distraction. And the argument they were saying is no, because it didn't stop you from doing anything, it didn't prevent you from doing something. So look to identify what it is you're trying to accomplish. And then try to identify the distractions. And I think using time blocking can be a really good way to do that. Because then you'll actually have set times, but also be gentle with yourself. If you didn't have something planned, who cares? like whatever, go do it.

If it makes you happy, do it. And I think kind of giving in to those urges can help you not feel so distracted. I mean, if social media is your vice, you might constantly be thinking about it while you're trying to do other stuff while you're trying to focus on something else. And so if you need to go check social media for 1520 minutes, set time aside in your day to go do that, enjoy it and then go back to what you're doing. You can stop thinking about social media, you know, or whatever that vice is

Emil:

Social media is the devil.

Michael:

Social media is the devil

Tom:

Was that Netflix documentary?

Michael:

Yeah.

Emil:

The social dilemma associate. There I was very, very interesting documentary

Tom:

PhDs trying to mess.

Emil:

That is really what's going

Michael:

They were talking about on this podcast episode how the host was totally in disagreement with it. He said, because the movie missed an opportunity to tell us what we can do. And it's it's like, oh, it's your there's nothing you can do your sucker to social media. It's like, Yeah, but also not really like you can you can turn it off, there are tons of things you can do, you can time block it so you can go get that fix, and go spend your time doing it. And then you don't feel bad for having done it. I got the itch man,

Tom:

I got a fun tip for with related to social media, you can turn the color off of your phone. So it goes black and white. They call it moto or is their turn

Pierre

Monochromatic.

Tom:

Monochromatic. So it makes some of that, you know, sizzle in red Heller. Yeah, you don't have to look at it. And it makes it black and white. And I have my phone like that, too. If I feel I'm getting a little too stuck into it. I tried to see if a black and white.

Michael:

Yeah, nice. I think it's probably easier on your eyes to especially like in dark rooms. All those vivid colors can be really harsh.

Tom:

It's like social media methadone. Good.

Michael:

That's exactly what it is. And then so kind of moving on here talking about Tavella, there's no Popeye needs his spinach. So figuring out what your spinach is, you know what juices you up to help you get focused to help you do work. And so for me, a big drink of water in the morning is super helpful. I try not to drink coffee, it just makes me really jittery. But occasionally if I really need a big boost, I'll have a little bit of coffee, and then I'll feel it all day. So figure out what helps you get going or kind of get into that proper headspace. And then do that use that regularly. And it's interesting. Emil, you were talking about, you know, not being able to sit for a couple hours and do stuff and how so that pomodoro style was really helpful, you know, kind of 20 minutes on 20 minutes off. I'm so the exact opposite. I can sit for three, four or five hours and just like work and do and accomplish. And again, this is totally not a humble brag and says it needs to be my own horn. But.

Emil:

Uh huh.

Michael:

I think figuring out for each individual person what works best. what works best for you is super great.

Tom:

Toot toot.

Michael:

And so if you are someone that can sit for hours and do work, great, but don't mistake being at the computer and doing stuff with accomplishing stuff because you can be busy and not accomplish anything. So look to make sure that you're actually getting some traction. And that's something that a theme in the episode they talked about is that bigger pockets episode is traction versus distraction, so I won't spoil it for everybody. Any thoughts there before we move on team?

Tom:

Love the busy versus productive, be productive Don't be busy. And also the Popeye needs a spinach. I know for myself I sometimes a little bit of a snacker. So trying to get something reasonably healthy but if I know that I would ever work better with Cheez Its and it's really important for me to work really well. Maybe just have a little a couple of visits or I'm feeling special. I can add some walnuts or goji berries. I don't know. I'm just throwing some buzzwords out there. Anyways, so if you're a snacker like just yeah, know what your know what makes you tick.

Michael:

Have you ever had the Tabasco Cheezits?

Tom:

No, it sounds great.

Michael;

Oh, they're so good. They're so good. Alright, so moving on here. Just some other rules that I try to abide by. I'm curious what your guys's thoughts do not multitask. I'm going to come out and just say it's a fallacy. I think it's a really good way to do a bunch of stuff poorly. Not a fan of multitasking. If you can do it great. I'm not a believer in it. your guys's thoughts on multitasking,

Emil:

I'm with you, my wife. And I always have this argument. My wife's a nurse. And she's like, if I couldn't multitask, I could never do my job. And I say, you know, power to you. I am like one thing at a time, or else I just do them all terribly. So I think some people can do it. I just, I don't know, I don't know how doesn't, does not compute for me.

Tom:

You can see you're doing it. But what's probably happening is you're doing one thing, and then quickly switching it

Emil:

Switching. It's not multi, yes, it's switching. But I'm terrible at that even right, I need like singular focus. Personally.

Tom:

same

Michael:

Pierre, same for you?

Pierre:

I think you guys are right, and that it's switching a bunch of tasks, but it's keeping kind of a big picture of a lot of things you have going on, so you can switch efficiently between them. So I think that's kind of my version of multitasking, because I do like my position here is not one thing. So I do have to keep a bunch of tasks in my mind at the same time with my goal where I want to get you at the end of the day. But I think you guys are right in when the rubber meets the road. And I'm acting, I am only acting on one thing at a time.

Michael:

So it's like on an iPhone when you up, swipe and hold it to look at all the applications you have running and just grab the next one?

Pierre

iPhone what? We had this conversation Mike.

Michael:

I know, I know. You’re the green bubble when I text. So there's something else that I will be the first to admit I'm terrible at and that can be really helpful for time management is learning to say no, I There's something I've been trying to work on over the last couple of years, saying no can be one of the most empowering things you can do. And it can also be one of the most beneficial things you can do in your time management realm. And so there's a polite way to say no, and I think doing so can be really helpful and really open up your schedule. Because if you become the yes person that can often become cyclical and habitual. And people know Oh, great. I can go to Emil because he said yes, last time. So he's gonna say yes again. And you can be pretty quickly salad bagged with a lot of other people's stuff that isn't necessary for you to perform whatever it is, you need to.

Emil:

I am a huge, huge fan of saying no, I feel like I used to suck at this and would say yes to everything. I think there's a time in your life where it's good to say Yes, a lot. I think if you're early in your career Early in whatever you're doing, I think saying yes, and being like, super open and liberal with your time makes a lot of sense. I don't think saying no, when you're early makes sense. I think you'll you'll be at a deficit. But as you know, some things start to fall in place or whatever and you're growing. If you don't learn how to say no, you're just gonna be doing a lot of stuff that's unnecessary. And I think with time you start to learn that a lot of things aren't going to move the needle, it's just like the nature of the game there's, you know, the 80-20 rule, where 20% of what you do is going to make 80% of the results and so I think with time you just get better at that and it helps flex your no muscle to be like okay, is this really going to make a difference?

Michael:

So question for you Emil for the new people who are maybe just starting out their career How do they balance learning to say no with setting boundaries and line setting expectations because I could very easily see you're the yes person at the beginning. Everyone's like cool Emil is easy. And then all of a sudden five years down the road someone else used to be like no, like whoa, meals kind of a jerk all of a sudden.

Emil:

I don't think people perceive it that way. I think if you're polite about it and just say man I have these things going on I just I don't have the capacity for this right now. Thank you for keeping me in mind or whatever. I think there's there's a nice way to do it and not right like if people know you're not just like saying no so you can kick your feet up and do nothing. right it's I think people will respect it if you're polite about and you know, give a reason people always appreciate a reason even though you're not obligated to give one.

Pierre:

That's right saying no to something and saying yes to something else. So if you struggle saying no, just tell someone that you've said yes to something else already.

Michael:

Oh, Mic drop here. Exit stage left, episode over love that. Yeah,

Tom:

I’ll add a couple of more points. So I love the point that Emil said about you know, being a little bit younger maybe was Michael said but being younger in your career. Like there's something to be said for grinding super hard. My wife, one of her earlier job, she was at PwC for a couple of years. And she had a manager who would joke that Yeah, you know, if you're working 100 hours a week, it's like you're getting two years of experience. And just one year, I thought that was like a funny way to think about it kind of disgusting. But you know, but it's, it's, I think there's a time and a place in your career for gain that value.

The other thing, I think in that saying no, is really important. I would always put it into context into who is asking you to do someone? Is it someone who's kind of like constantly just trying to delegate all their work to somebody else? Who or is it someone who like, wow, this is someone I should, like, impress and be awesome with. So I think it's all contextual. And also, the type of work is this type of work that I'm going to be building some muscles that I can use later on in my career is this type of work that's going to make an impact to revenue or expenses and directly touch that kind of stuff. So it's all contextual. And I think what happens over time, as you get better to say, No, you get better at reading in between the lines of like, is this something that's valuable for the company? Is this valuable for me? Or is this just someone offloading some some random busy work? So I think that's all important to understand. And also, you'll just get better over time. And being able to read between the lines as stuff comes comes across.

Michael:

Yep, I think that's super great. points, Tom. And I think also segues nicely into the last thing I want to talk about, which is learning to delegate. And I think so many of us, especially in the real estate space, again, I am so guilty of this, but trying to do everything yourself, because no one can do it as good as you can. So if we're investing remotely, a lot of us will be relying on property managers. So being okay, letting go a little bit and saying, hey, I need you to do this. For me making phone calls, you know, delegating tasks, your time is better spent elsewhere. And I think a lot of people have a really hard time paying for services, or paying to have someone do something. But at the end of the day, if I can pay someone 20 bucks an hour to do something for me, and I can go make $100 an hour or $1,000 an hour doing something else, because that's what I'm better suited for. That's a really great use of my time and a really great use of my money. So a lot of people, again, have a really hard time doing that. But look at the actual cost, versus what your ability to earn is for that time.

Emil:

Very good point. It's why I don't mow my own lawn.

Tom:

Yeah, all the great resources out there for help extra stuff. So mowing,

Emil:

You know, family time, you know, it's just like, you start to, I don't know,

Tom:

yeah, there's a lot of good websites on helping to delegate or bringing in people to help out. So like Upwork is a good one, I had a great use case where I was at a friend's wedding, I was the best man, I had to write a best man speech. And I put together like, kind of like spilled my guts on a page, and then brought in a professional speech writer who actually wrote for cash flows that show drunk history. He was like, he was like a producer for that show. So he's like, super funny, like stand up comedian. And I best use the mice, I paid 100 bucks, and he basically took rearranged my like, gut spilling into a really well put together speech. And it like brought down the house, you know, using and what I want you guys to take away from that story is just test it, like create an account on either Upwork or one of these other platforms. Fiverr is another one, and you know, have some small tests, and then do it like, just bring someone in, it's, the more times you do it, like the better you're gonna get at it. And then you're going to bring down the house at a wedding. So it's worth doing.

Emil:

That's so smart. I never even thought about that. That's a really smart idea.

Michael:

The last tip I'm going to share on this is I got it from somewhere else, I can't take credit for it. But right for like two weeks just write down everything that you do during your day, task wise. And then look to see at the end of that two weeks, what could you pay someone to do? Did you hire a virtual assistant? Could you pay a TaskRabbit? Or someone on Upwork? Could you pay someone else to do some of these tasks, and essentially like to buy back some of your time. And I just thought that was really interesting exercise because I think so many of us do things that without even thinking about without even realizing what we're doing. And when we really stop and lay it all out, it can be pretty eye opening to see how we're spending our time.

Pierre:

It's a good accountability mechanism as well. Let's see how much you know, write down your bad stuff, too.

Tom:

So love that audit, do the audit exercise of your two weeks. All right, I'm gonna add in some final thoughts that I have here. One of them is Be sure to charge your battery like these systems that you run or these you know, it's all a little bit of extra work. And it's really important to know how full your balloon is because the worst thing you can do is continue to take on more stuff and you just end up doing like doing badly poorly. So charging your battery take time off. Like if you work at a job that has time off like know how much bandwidth you have no one you're you're gonna blow and just be open honest and constructive with everybody about when you need to charge that battery.

The other one is continued to evolve. It's not a one size fits all. And it's also not a one size all the time. I don't think I said that right but often too. Your systems and the way that you do things are going to evolve over time. So be okay with that. And what works for you now may not work for yourself in six months, but just continue to try new things out have that spirit of keeping the pistons going. And then lastly is to not be too hard on yourself, if you're, you know, not being super productive, or you're getting whatever lost in social media or you're just you're not where you want to be. There's this parable about getting hit by two arrows. So like, one of them is the first mistake. And the second one is just kind of shaming yourself for feeling really bad for not doing great. So get hit with the one arrow be okay with it, and then get back on the horse. So that's my Don't be too hard on yourself and pistons going. Yep, that's those are my final thoughts.

Michael:

Oh, love it, love it. I think that's just to echo what you said, Tom, being gentle with yourself, I for sure have beat myself up really good for decisions I've made, especially when it comes to real estate investing. And you know, either biting off more than you can chew or just making a poor decision rushing into making a decision. And so I think it's so important to pick yourself up, dust yourself off and realize that, okay, the decision has been made, it's time to move forward, there's not you can't change that unless you can well then go back and change it but just continually moving forward. And try not to dwell on the past, which is so much easier said than done. And I know that but I just a reminder to everybody listening it be gentle with yourself, this is a you will make mistakes, you will learn the hard way, I will promise you that. So just know that and kind of move forward from it. Emil and Pierre you want to take us home?

Emil:

My final thought, try to keep this stuff simple. Don't later on 12 of these things that we just mentioned, Pomodoro Technique, adding things to your calendar, blah, blah, blah, blah, blah. You're just like, I know people who do that. And they're often the least productive people I know. Because all they're doing is juggling tools and techniques and strategies and stuff, I would say try to just hone in on a couple things and just get good at those.

Pierre

Yeah, I'll echo that you can read a ton of books and just learn a ton of different methods for keeping track of time but then that's time being lost to if you haven't put any of it into action. So just choose one thing. Start with that. Get Started.

Michael:

Do you have any resources books that you'd recommend Pierre?

Pierre

No, don't read any books. Just do what we just said.

Michael:

Audio books only on your way to doing other stuff.

Emil:

I have one because I think the biggest thing here is making these things habits. It's called Atomic Habits by James Slear that was that was one of the best books I've read on forming habits.

Michael:

Awesome. Yeah, Tom give any book resource recommendations?

Tom:

Classic one, Seven Habits of Highly Effective People. Stephen Covey wrote it, it's a classic classic, it's talks about sharpening the saw, a lot of stuff we're talking about, but I love audiobooks when I'm like doing dishes and just like kind of thing and but not really. So that's in my regular queue of learning and doing better. So that's my that type of productivity hour is cleaning or dishes or whatever. Poppin an audiobook

Michael:

So is it almost like you're multitasking?

Tom:

Shut up Michael. Well, no. Those are that's a good thing to multitask with.

Michael:

You can walk and chew gum. Absolutely.

Tom:

Yeah. with you. I take back my shut up Michael.

Michael:

A book that I would recommend that people check out if you're interested in implementing some more of this stuff. We talked about his Miracle Mornings by Hal Elrod it's a really great book. I implemented a bunch of stuff and kind of fell off the wagon a little bit, especially with regard to waking up early, but I think there's a lot of really good useful tips tricks in there as well. Alrighty, well guys, this was a lot of fun. And hopeful that people got a lot of useful stuff out of this and know that everybody's human Everybody makes mistakes. So figure out what works best for you and then truly go look to implement it and not just for a day or a week or a month you know, really give it a college try. Give it your best. And it doesn't work move on because not everything will work for you.

Emil:

College try I didn't I don't know.

Michael:

Isn't that isn't that isn't the thing

Tom:

Its like a 20 saying like, like a 30 like “the good old…”

Michael:

Yeah. prohibition just around the corner give it a college try.

Emil:

A sincere effort or attempts at performing a difficult or seemingly impossible task.

Michael:

All right.

Emil:

I stand corrected. Continue, Michael.

Michael:

Awesome. For once. For what yeah, that's my one for the month guys.

Emil:

Check it off.

Michael:

That was our episode. Thank you everybody so much for hanging in there with us. Really appreciate it. If you'd like this episode, please feel free to give us a rating or review and subscribe wherever you listen your podcasts and we look forward to seeing you on the next one. Happy investing,

Tom:

Happy investing.

Emil:

Happy Investing,

Pierre

Happy time management.

In this episode of Weekend Wisdom, Michael Zuber shares his strategy for employing private capital. Catch Michael Zuber on YouTube at One Rental At a Time.   

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Transcription

Tom:

Happy weekend, everybody. This is another episode of Weekend Wisdom on The Remote Real Estate Investor. On today's episode, we have author and thought leader Michael Zuber, he is the author of One Rental At A Time, he also has a podcast and a YouTube channel. Definitely worth checking them out. And today we talked to Michael about his methodology of raising private capital. I love it. I think it splits the risk and the upside, he does this thing called a 6-20. And I'm gonna let him explain. Michael, let’s hear it.

Michael:

Yeah, so one of the things that if you're a real estate investor that is often thought of is the holy grail is raising private money. Now, I believe raising private money needs to be done correctly, I think you need to give it the respect it needs. There are lots of checks and balances. And you must understand the process, the rules of the road, all of that. But the beauty of it is once you understand private money, and you have a track record, you can orchestrate a private money package that works for your lender, which is a friend or family member, and yourself. And I've done two things in my career. And where I raised millions of dollars back in 2010. Just to set this up, people were frightened, and I was paying 10% interest for the entire purchase price of property because lending or savings rate was less than 1%. Much like it is today. People were so scared, but I had documented my success back then. It wasn't YouTube. It was actually a blog, which I wish I kept, but I let it go.

But that blog allowed me to attract millions of dollars because I was documenting what we were doing buying. It was BRRRR before it was BRRRR, right? I'm sure Brandon Turner saw something I was doing because I was posting on bigger pockets all the time. And it became BRRRR right, buy a dump, fix it up, rented refi with, in my case, private money and do it again, which now he calls Burr. But now what I've done in the last couple of years is the market has changed. Real estate is sexy again, in 2010. Nobody wanted to touch it. But real estate sexy today. So what I found today is people aren't really interested in 10% interest, of course, they will take it. But they what they want is they want a piece of the action, right? They want part of the profit.

So what I've done is I've devised a six and 20 program where I again, borrow 100% of the purchase price. And now instead of paying 10% interest, I'm paying six annualized, right, so it's 100 grand is 500 bucks a month. But what I do is I give him 20% of the profit. So when I'm out of a property in 120, or 160 or 200 days, they not only get monthly checks, because I pay monthly like a mortgage payment, which is the 6% part. But they will get 20% of the audited return, which when you annualize everything I've done have the millions of dollars I borrowed, everybody's got an annualized return to date, an excess of 20%. And again, it's all secured, right, your first trustee, your name down insurance just in case it burns down, I invest all the capital repairing it. So my dollars are at risk first. It's extremely safe thing.

But the key to this program is I listen to the private money investors first. I didn't just create it, I went back to the people who lent me millions of dollars before and said, What do you want? And they're like, hey, that 10% was cool, but you cashed me out? Right? That was cool. I lasted but once you could get a loan you did because 6% is lower than 10. And I wish I was still getting 10 Well, like sorry, Yo, 10s Hi. I don't want to take 10 forever 10 times, but like, Well, we'd love to piece of the action. So I'm like, Okay, well, how do you feel about 20% because I'm doing all the work, I'm finding the deal. And they're like, cool. So I'm like, Great, well, let me give you 6% now because that's what I can get from banks. And I'll give you 20% of the upside, they're like Sign me up, let's let's do it. So the six and 20 was born and again borrow millions of dollars doing it.

Tom:

I love that model just in that you know the same value that you have with real estate because you're having the the ongoing cash flow, which is that 6% plus all the upside of the appreciation and all of that it's, it's beautiful, it's beneficial for you because you're coming in at 6% right away or anyone else that you know, using this similar type of a model. It's incredible, brilliant.

Michael:

I mean, I love to talk about it because of what the investor gets but I'm a nice guy, but I'm not not going to give the farm away. Right my investors annualized return is 20% My annualized return is over 80% right because all I bring in is a repair money in my monies in shorter and when we exit you know my return on repair money is often much bigger than the purchase because if I purchased it for 120 I might put in 30 or 35 so if i net 20 on the out and they get you know whatever that would be six plus the cash flow I mean yes they get great returns but let's be clear I'm winning also.

Tom:

Yeah,

Emil:

When you say exit is that usually cash out refi or was it sale? Oh, today's market would be a sale owner occupants are buying things hands over fist. So if they want to overpay I will let them

Tom:

Get out of the way. Yeah,

Michael:

Get out of the way. There you go.

Tom:

If you enjoy the episode, enjoyed the podcast, please subscribe and give us a rating and have a great rest today. Happy investing