Ep. #12 - Special | Elevate Your Real Estate Investment - Introducing Blue Chariot Management

Ep. #12 - Special | Elevate Your Real Estate Investment - Introducing Blue Chariot Management
Ep. #12 - Special | Elevate Your Real Estate Investment - Introducing Blue Chariot Management

Blue Chariot Management is here! #12 is a Special Episode of the […and Landlord] Rental Real Estate Investing Podcast, titled “Elevate Your Real Estate Investment – Introducing Blue Chariot Management”. Effective Property Management is an essential element of having a profitable Rental Real Estate Investment Property. This Special Episode serves as the official announcement of Blue Chariot Management. Professional Property Management by Blue Chariot for Single-Family and small Multi-Family Rental Properties in the Raleigh / Durham (Triangle) area of North Carolina.

Prior episodes of the [… and Landlord] Podcast have given insight into how you can more effectively self-manage your rental property… Like #8 | Don’ Let Vacancy Kill Your Rental Cashflow; and #9 | Rental Property Advertising How To Make Your Rental Home Stand Out From The Crowd – among others. But now you can hire Jonathan Taylor Smith and Blue Chariot Management to handle this on your behalf.

Here’s more from Jonathan Taylor Smith and what we have to offer for Triangle Property Management…

Durham Property Management

My personal rental properties are spread all over Durham. I love having rental properties and living in Durham. I moved to Durham from the Tampa Bay area of Florida, back in 1996. I met the woman who became my wife (of 19 years and counting) a short time later, and I’m still here over 23 years later. Durham is a great city to own rental property, with great things happening all over, especially in and around the Downtown Durham area. Investing in rental properties in Durham has required that I learn this city in detail – down to the street level.

Opportunities abound in Durham for: Luxury Rentals; Student Rentals; Section 8 Rentals; and everything around and in between. Rental rates are generally good compared to property cost, and appreciation is present for most areas. Durham was a great place to live when I first moved here, and it has only gotten better.

Raleigh Property Management

I live in Durham, but I’m in South Durham, about 5 minutes from Raleigh or 10 minutes from the RDU Airport. I’m near the Brier Creek area, so I’m about as close to Raleigh as you can get and still live in Durham. My office for Blue Chariot Realty (Keller Williams) is on Brier Creek Parkway. I’m just minutes from Hwy 70 (Glenwood Ave), I-540 and I-40… In other words, I’m no more than 30 minutes or so away from just about anywhere in Raleigh from my home in South Durham and KW office in Raleigh.

I’ve tried many times to obtain personal rental properties in Raleigh, but just keep getting outbid (once by only $100). I keep trying and I’m certain to get one soon and will end up with many as the years go by, but I refuse to over-pay. That’s the thing with Raleigh… All the great things underway in Durham in recent years, started years earlier in Raleigh. And Raleigh also has all the scenarios for: Luxury Rentals; Student Rentals; Section 8 Rentals – just the same, up and down.

Chapel Hill Property Management

My son was born in Chapel Hill at UNC Hospital in 2007. My wife graduated from UNC in 1998. I attend as many Basketball and Football games of UNC in Chapel Hill as I’m able (but I’ve also gone to several Duke games – both colors are in the Blue Chariot logo for a reason). And I’m driving all over Chapel Hill looking for rental properties before and after each of my appointments at UNC Medical Center. Chapel Hill is an awesome city for rental properties with both excellent rents and appreciation. And like certain areas of Durham and Raleigh, Student Rentals are popular in Chapel Hill, and can boost rental profits significantly higher than traditional rentals.

Cary Property Management

Cary (like Raleigh) is nearby my South Durham home and my Raleigh (Brier Creek) office, easily accessible within about 30 minutes via I-540 and I-40. Cary is a great rental property market, as it is ideally located for prospective tenants who may work in Raleigh or Durham, but prefer living in Cary. Cary has an overall upscale vibe, so properties can tend to be pricey, but rents can certainly cover it in many locations.

The Blue Chariot Management Team

While I’m the principle, Blue Chariot Management is not a one-man operation. I’ve built a team of people and vendors to aid me in offering Professional Property Management for Triangle Landlords. In subsequent posts, podcast episodes, etc… I’ll introduce you to the other members of the Blue Chariot Team.

Please visit: BlueChariot.Management – to learn more about Blue Chariot Management and to get a FREE Rental Analysis and quote for Professional Rental Property Management from Blue Chariot.

Ep. #11 - Make Sure Your Lease Protects Your ASSets

Ep. #11 | Make Sure Your Lease Protects Your Assets
Ep. #11 | Make Sure Your Lease Protects Your Assets

So let’s talk about your rental lease… Where did you get yours? Did you download it from some random site on the Internet located by searching Google for keywords like “rental lease agreement”? Did you buy it at Office Depot or Staples? Or did you go the professional route and pay an attorney to create a custom lease specific to you and your rental property?

First, I don’t recommend going the random Internet search route. I also wouldn’t buy or use a lease from anywhere, unless it is indicated and confirmed to be written specially for your state. I’m in North Carolina, and the Landlord / Tenant Laws here (and thus how a lease must be written to comply with them) are certainly not going to be the same for you in some other state. You need a state specific lease.

So it would seem the best method would be to get a lease drawn up by an attorney in your local area who is knowledgeable of the Landlord / Tenant Laws and resulting lease requirements in your state… Right? Maybe, but not necessarily…

In this episode of the … and Landlord! Rental Real Estate Investing Podcast, entitled “Ep. #11 | Make Sure Your Lease Protects Your ASSets” – I speak on the topic of rental leases… Where I got mine. How and why I’ve customized it. And I provide examples of how I use my lease as both a sword and shield in the protection of my rental home assets; as well as, my rental property and property management businesses.

I give two locations (BiggerPockets.com & EZLandlordForms.com) – at which you can obtain state specific leases. The lease I use for all of my rental properties comes from EZLandlordForms.com – and I’ve then customized it to fit my specific needs, including adding and altering provisions to make the lease even better at protecting my rental home assets and businesses. Of course, I ran this lease by my attorney, along with any additions and changes that I’ve made. And the end result after 4 years is a document that speaks well to almost any scenario that occurs at one of my rental homes and for my rental property and property management businesses.

Likewise, in this episode I give tips to making sure you have the best possible lease in place to both help keep you OUT of court, and making your WIN (should you end up in court anyway) next to inevitable. And the most important part of that equation is staying OUT of court – so I provide details in making sure your tenant is fully informed as to the lease contents and your strict adherence to following this document in the handling of any and all issues.

I even go into details as to when, why and how to make an exception in handling things only as detailed in the lease. There needs to be room for reasonableness in your handling of matters, even when you are fully within your rights according to the lease and law. Yes, the lease can be your sword – but “he who lives by the sword, also dies by the sword.” – so be reasonable with your tenants and your handling of matters, as that may also work in your favor should you ever end up in court. You don’t want to be in front of a judge looking like the unreasonable party or a bully.

In short, rental property is an asset that comes with certain risks – so this episode is all about making sure your lease protects your ASSets as best possible.

Ep. #10 -Should Landlords Avoid Section 8 Tenants? Or Can Accepting Section 8 Vouchers Grow Your Rental Business?

Ep. #10 | Should Landlords Avoid Section 8 Tenants? Or Can Accepting Section 8 Vouchers Grow Your Rental Business?

... and Landlord! Rental Real Estate Investing Podcast - ​Ep. #10 | Should Landlords Avoid Section 8 Tenants? Or Can Accepting Section 8 Vouchers Grow Your Rental Business?So let’s talk Section 8! There’s an Eight Ball on the cover image of this episode for a reason. All too often Landlords effectively “Black Ball” Section 8 voucher holders. When a person with a Section 8 voucher calls to inquire about a listed rental home and they begin to ask that question of the Landlord… “Do you accept Section 8 vouchers?” – All to often, it may seem to the prospective Tenant as if the Landlord barely waits for them to finish asking the question before beginning to respond – “No… We don’t accept vouchers”.

But when those prospective Tenants call me to inquire about one of my rentals, the answer as it relates to most of my properties is… “Yes, certainly we accept Section 8 vouchers.” – And it’s funny (ironic) when the person then asks the question again… “You DO accept Section 8!?” – As they are so (pleasantly) surprised to hear something different than all their prior inquiry calls – they hardly believe their ears.

In this 10th Episode of the ​… and Landlord Rental Real Estate Investing Podcast, I discuss Section 8. I go into many of the reasons that Landlords often effectively “black ball” (refuse to accept) these prospective tenants who are on Section 8. But I concede that in some markets this may be a wise decision, as County Section 8 programs are not always administrated effectively and Landlord / Tenant Laws can be shewed (un-reasonably) towards the Tenant in some Cities and States.

I warn that if it takes 6+ months to evict someone in your market, then it does increase the risk of accepting Section 8 as a Landlord – as well as, just being a rental property owner in that location at all. However, where the program is administered properly and where evictions can happen (should it be needed) in a reasonable amount of time (like 1 to 3 months) – then accepting Section 8 can be of great benefit. That benefit can be for you (the Landlord), but also for the Section 8 Tenant, the Neighborhood, the City, the State, the Country – and everyone.

There may be many legitimate reasons for NOT accepting Section 8, of which I cover several in this episode. But there are also many valid reasons TO accepting Section 8 – that should be fully considered before just refusing to participate in the program for fear of what MIGHT happen. Landlord Horror Stories abound, but you can run your rental business (including accepting Section 8 vouchers) in a way that makes it unlikely you’ll be the next victim.

As such, I cover many of the things that can be done as a Property Manager to lessen the chance of a negative outcome. And how to increase the likelihood for getting a long-term Tenant who will greatly appreciate having a wonderful home for their family.

Do Good While Doing Well…

Section 8 offers a prime opportunity for Landlords to do good for others, while also doing well for themselves. But the program (and those who are on it) have gotten a negative stigma attached that makes many Landlords fear even trying to participate in the program. As stated, that can be a wise choice in some markets. But in many (if not most) the risk is more than worth the reward. And the risk can be largely mitigated by having proper Tenant screening, strict policies and well established procedures that allow your rental business to function smoothly.

This episode relates my experiences with Section 8 in Durham, North Carolina. And you be successful with Section 8 also, here or elsewhere – if done right. Please listen to this Podcast episode to learn more - and I welcome your comments. Also appreciated is your feedback, rating and subscription on ​Apple Podcasts​Stitcher​YouTube - or wherever you listen to Podcasts.

Ep. #9 - Rental Property Advertising - How To Make Your Rental Home Stand Out From The Crowd

Ep. 9 | How To Make Your Rental Home Stand Out From The Crowd

This (9th) Episode of the [... and Landlord] Rental Real Estate Investing Podcast is titled "Rental Property Advertising - How To Make Your Rental Home Stand Out From The Crowd". As is indicative from the title, the episode delves mainly into Property Advertisement.

So in this episode, I go into things such as posting enticing pictures (lots of them), and making sure that your main exterior and kitchen (or kitchen and living-room) pictures are amazing. These can be taken with a SmartPhone, but you need to know what you're doing and have proper lighting - otherwise, go pro and just pay to have it done right. You can stage the home with some furniture and decor, or showcase your wide-open space - but the pictures have got to be on point.

I continue to say a word on your words... Yes, a picture is worth a thousand, but you still need some words, and they need to paint a compelling picture. So I give an example of how to tell a story with your listing text, instead of just citing bland facts and figures - like all the other rental listings on Zillow and other sites.

And I mention Zillow, Trulia, HotPads, CraigsList, Realtor.com - and other sites, including GoSection8.com. Have you considered Section 8? In this Episode I go into a bit of detail as to why you should, including some stats on the program for Durham County, NC. But I don't tell the full story on Section 8 here (only how it relates to making your rental listing stand out from the crowd) - so in a coming Episode, I will go into more detail on the pros and cons of making your rental homes available for persons with Section 8 vouchers and the process for doing so.

I also provide an example of how to conduct market research on Zillow to learn what the competition is like in your area. And how to use the information presented on Zillow to identify how best to stand out among others listed. And even what your target rent should be as suggested by Zillow, CraigsList and Rentometer.com - but possibly adjusted to target Section 8.

Upgrades? Lastly, I speak on how you can make your rental home stand out from the crowd by making upgrades. Why have fermica or "hard surface" counters when you can have granite? Why carpet when it can be "luxury" vinyl plank? Why have white appliances when they can be stainless steel for not much more? Why not add fans in the bedrooms and living areas, upgrade light fixtures, add a backslash in the kitchen, tile the shower, etc...? Make the home beautiful while also hardening it against tenants.

If you can make people say "WOW!" when they see your listing, and feel a sense of disbelief that it is available within their rent range... You'll get the best tenants; who'll remain for years; while gladly accepting annual rent increases; and having pride in the home - of which they take great care.

This 9th Episode ("Rental Property Advertising - How To Make Your Rental Home Stand Out From The Crowd") is a deep(er) dive into the rental advertising aspects of last week's: Ep. #8 | Don't Let Vacancy Kill Your Rental Cashflow.

So as mentioned in Episode #8, your rental listing advertising is a critical element of keeping vacancy to a minimum. Now learn how to make your rental home stand out from the crowd, like your house has a spotlight shinning on it from above.

P.S. Sorry, but two rental advertising or promotion methods NOT mentioned in this Podcast episode (but highly valuable) are Social Media and YouTube...

Social Media: Zillow, Cozy and pretty much every site where you can (and should) list your rental, also include the ability to share your listing on just about every Social Media site. And when posting to places like Facebook, don't forget to share your post to related local groups.

YouTube: Zillow, Cozy and others also allow you to feature a video of the home. So you should shoot a video walk-thru that you post to YouTube, and then link to the posts on Zillow, Cozy and elsewhere. Plus, you'll always have that video to use in future listings.

Ep. #8 - Don't Let Vacancy Kill Your Rental Cashflow

Ep. #8 | Don't Let Vacancy Kill Your Rental Cashflow

In this, the 8th Episode of the [... and Landlord] Rental Real Estate Investing Podcast, I discuss how vacancy kills rental cashflow; and therefore how to avoid vacancy.

On this topic of avoiding rental vacancy, I discuss such things as making sure that your existing tenant leaves on terms that are favorable to your finding a new tenant BEFORE they're gone. This includes having a requirement of 45 days notice to end tenancy (not 30 days unless mandated by law). Also, having it stated in your lease that you have the right to show the home to new prospective tenants during that notice period (while the current tenant is still present) - along with details on how to handle this properly.

I speak on how to advertise the property for rent and making sure its priced right. For example, might you be able to rent the property faster and for a longer period of time at a slightly reduced rent? And for once you have people inquiring about your rental, I talk about screening those prospective tenants in a way so as to lawfully eliminate those persons who are more likely to create problems for you and also likely to be short-term tenants - as you want tenants who will be in the home for years.

This is because tenant turnover is expensive, so I speak on ways of getting your existing tenant to remain longer, so as to avoid not just vacancy, but also the major expense of making the home rental ready again between tenants. Your tenant is your customer, so you must treat them with appreciation, while also running your rental business with professional processes that make them want to remain being a customer (tenant) of your rental property business. This even includes how you handle lease renewals and rent increases.

And lastly, I give an example where one of my better rental homes will soon experience a tenant turnover. The existing tenant in this homes gave notice in April that they would be vacating the home at the end of May (Sunday, June 2nd actually to have one more weekend to complete the move-out). We quickly got the home listed for rent and scheduled showings. There were lots of inquiries and showings, which resulted in 5 applications being submitted. We processed each and approved one for a new tenant to begin occupancy in this home on June 7th. That will give us 4 days (from June 3rd to 6th) to complete touch-up painting and any other work as needed to make the home rental ready again for the new tenant. And because of how we manage our properties, it is highly likely that very little work will be needed to make the home ready, as it passed an inspection just a couple months earlier.

In line with this example, I speak a bit during this episode on property management, such as doing quarterly inspections. This creates a situation where when you do experience a tenant turnover, you already know the condition of the property and its likely to require minimal work if all prior quarterly inspections have been passed and the tenant follows the move-out cleaning guide.

The episode ends with mention of the new [... and Landlord] Podcast Book Recommendations page at: https://www.andlandlord.com/books - and my personal comments here referencing: The 4-Hour Work Week & Secrets of the Millionaire Mind. I highly recommend both books, and you can read details of what they did for me at the above links.

Ep. #7 - Books Every Real Estate Investor Should Read

Ep. #7 | Books Every Real Estate Investor Should Read @ andLandlord.com/books

In the latest Episode (#7), I announce the new [... and Landlord] Podcast Book Recommendations page at: andLandlord.com/books. The various books mentioned mainly concern Property Investment, and should be read by all looking to successfully enter into the Rental Real Estate Investing market.

Books have played a critical roll in my Real Estate success since starting in 2015. I previously had a negative outlook towards so-called "Self-Help" books, or those on Mindset, Business or Money & Finance. But once I actually allowed myself to read the first, I was hooked.

As I've expressed before, that book was Rich Dad Poor Dad, and it changed the way I looked at both money and myself. Some time later I read Rich Dad's Cashflow Quadrant, and it changed the way I looked at my business and how my wife and I made our money as an employee and self-employed small business owner.

I don't remember exactly, but I'm pretty certain my finally reading Rich Dad Poor Dad was a result of listening to the BiggerPockets Podcast, where at the end of each show they ask the guest for book recommendations - and almost every person mentioned this book... So I had to read it! And thus naturally, I started reading the other recommended books also.

Now I'd like to return that favor by not only recommending books that I found valuable, but also providing details into WHY. On the [... and Landlord] Podcast Website at: https://www.andlandlord.com/books - you can get a listing of my favorite books that I feel every Real Estate Investor should read. But also I'll give some details of where I was along my journey when I encountered each book, what I took from it, and what it did for me - so that maybe you may benefit as well.

In this episode of the [... and Landlord] Podcast, I focus on two... The 4-Hour Work Week & The Richest Man in Babylon. Going forward I will speak briefly on others. And I welcome your comments on my recommended books, and your own book recommendations as well.

Now in full disclosure, each of these book recommendations link back to my Amazon Affiliate account - so I do make some coin when you order a book by following a link from this site. But that just helps to offset the cost of the Podcast, and therefore it is greatly appreciated.

Ep. #6 - Evaluate, Market, Negotiate & Fund - What It Takes To Succeed As A Real Estate Investor In 2019

Ep. #6 | Evaluate, Market, Negotiate & Fund – What It Takes To Succeed As A Real Estate Investor In 2019

In this Episode (#6) of the [... and Landlord] Podcast titled "Evaluate, Market, Negotiate & Fund - What It Takes To Succeed As A Real Estate Investor In 2019." - I speak briefly on each of these four skills that are especially critical in today's "Hot" market. 2019 has been a difficult year for "deals" on Rental Properties for people like myself who are looking to buy cash-flow positive properties, but it seems to be a great year for sellers. From the buyer's prospective, everything appears to be highly overpriced if there is to be any chance of having positive monthly cash-flow. If you're looking to be one of the successful Real Estate Investors, then it's going to take some extra hard-work and manoeuvring on your end to ensure that possibility!

Prior to this year, most (but not all) of my properties came from the good old MLS, and many were short-sales or foreclosures. Having started my Real Estate Investing career in 2015, there were no shortage of these back then, so I could take my pick - and through 2018 I never had a shortage of properties under consideration at prices that easily met the 1% Rule.

In this episode I explain what the 1% Rule is, and how properties meeting this rule are almost certain to yield positive monthly cash-flow. The problem is - they are so much harder to find in 2019 than they were from 2010 to 2018. Occasionally one may hit the MLS, but you'd better act fast, or it will quickly enter a multiple-bid situation where the price gets bid up well beyond anything that will yield 1% in the rent to all-in cost comparison that is the 1% Rule.

Thus, in this episode, I explain how strict adherence to the 1% Rule may not work as well in 2019... Instead, you'll need to be able to [Evaluate Properties] for other possible methods of profit and return; and understand the circumstances that others may be working within that could allow them to justifiably pay what may seem to be ridiculous prices for a so-called "Investment" Property.

In addition to understanding the full profit and return picture and the motivational factors of others willing to pay more, this episode of the [... and Landlord] Podcast goes into aspects of [Marketing for Deals] so that you'll be in a position of working directly with sellers to obtain a potentially better deal than may be possible once a property hits the MLS. And to this end, I explain that you'll need to be skilled at [Negotiating with Sellers] en-route to obtaining your best possible deal, which may even include some aspect of Seller-Financing or a Lease-Option.

And since you'll not be able to close on even the best negotiated deal if your funding is not in place, in this episode I speak on the subject of OPM (Other Peoples Money) for needed [Funds to Close] - which can be from: Conventional Lenders / Banks; Private Lenders; Hard Money Lenders (aka Professional Private Lenders or Rehab Lenders); the seller (in the case of Seller Financing or a Lease-Option); a HELOC; a loan from an IRA/401K; etc... Being a Real Estate Investor certainly takes money, but it does not have to be YOUR money. So here I speak a little on making yourself credit worthy and otherwise appealing to potential lenders and sellers, such that they may be willing to help fund your deals.

Now these skills are always needed and always have been / will be; however, in a seller's market as appears to exist in many locations around the USA in 2019 - you especially need to have the skills to: [Evaluate Properties]; [Marketing for Deals]; [Negotiating with Sellers]; and have ready [Funds to Close]. This 6th episode of the [... and Landlord] Podcast touches upon each of these points in offering my thoughts on "What It Takes To Succeed As A Real Estate Investor In 2019."

Ep. #5 - Expanding On The Cashflow Quadrant - Diversify Your Income For Wealth & Financial Freedom

Ep. #5 | Expanding On The Cashflow Quadrant – Diversify Your Income For Wealth & Financial Freedom

In this episode (#5) of the [... and Landlord] Podcast, I expand on something that I touched on briefly in the prior episode (#4) related to Rich Dad's Cashflow Quadrant, which is a book by Robert T. Kiyosaki. In this book he explains the Cashflow Quadrant (pictured within the above image); and in this episode of the podcast, I relate my own positioning within the Cashflow Quadrant and what you may wish to make your goals for the same, along with how to diversify your income - and why.

I highly recommend that you read this 2nd book in the Rich Dad series (after reading the 1st, Rich Dad Poor Dad) - as together, they are greatly helpful in setting the ideal mindset and providing a guide for financial success. When I first read these books (I've since listened to each 3 times), they were exactly what I needed. They focused my thoughts and efforts on a path that I was previously stumbling to find.

I knew that what I had been taught about finances and investing was somehow "off", but these books made it clear as to exactly what was wrong and what I needed to change. I cannot stress more strongly how valuable these books were for me; and I've found that most Real Estate Investors mention one or both of these books as foundational to their success.

This 5th episode of the [... and Landlord] Podcast begins with a quote...

“Don’t let the best you have done so far be the standard for the rest of your life.” - Gustavus F. Swift

This quote relates because I've been seeking and working towards something more for my life since I became an adult almost 29 years ago upon graduation from high school. I'd been an employee since my first job of age 15 at McDonald's - and I HATED every minute of it! I had been able to get steadily better jobs in food service, retail, offices, tech, etc... But I was still an employee, so they were only slightly less excruciating as the jobs improved.

For more on this, see the Blog post: I HATED Being An Employee! - (From My First Job At Age 15 To Starting My First Business In 1996)

At each step of my employment journey, I was seeking to improve upon this standard to move into something better. And even in 1996 when I started my first business, right through 2002 when I finally ceased being someone else's employee (reaching the level of self-employment) - I was still always seeking to raise my standard for what was to come next.

I established another standard for myself in 2015 when I bought my first rental property, but I did not stop at just one... I'm now beyond double digits - and I want more. To make the quote personal, I refuse to "let the best I have done so far be the standard for the rest of my life" - I can do better! I know that I have it within me to achieve even greater levels of success, ultimately resulting in financial freedom for myself and my family.

In the [... and Landlord] Podcast (Episode #4) - I mentioned some of the things that I had to sacrifice to reach this new standard for my life. In this (the 5th episode), I express this quote and how it relates to the Cashflow Quadrant and my ever changing path (along with my wife) to financial freedom through Employment, Business, Real Estate, and other Investments. Having income from multiple Cashflow Quadrants is essential to growing your wealth and achieving financial freedom.

I express how taxes are the #1 expense faced throughout life for most people, and those who get their income only from the [E] Quadrant are among the most highly taxed. Getting income from the [S] and [B] Quadrants not only provides many tax benefits, but also potentially provides additional funds to buy cash-flow positive assets and investments in the [I] Quadrant. Listen to this Podcast and read or listen to the book Rich Dad's Cashflow Quadrant, to start or focus your path to financial freedom by getting diversified income from multiple Cashflow Quadrants.

Ep. #4 - What Are You Willing To Sacrifice To Achieve Financial Freedom?

Ep. #4 | What Are You Willing To Sacrifice To Achieve Financial Freedom?

What Are You Willing To Sacrifice? What are the steps to Financial Freedom?... Yes, it is a buzzword, but it is also a most precious thing to be sought-after with all your effort. And are you really giving it ALL your effort? Are you even giving it SOME effort? Most people think they are, when they really are NOT - or worse, they don't even think about it at all. Which is sad, because you're not likely to stumble into financial freedom. Sure, I buy a lottery ticket here and there, but that's not my plan for financial freedom... That's just me bowing to the 2nd best advertising line in the history of ads... "You Can't Win If You Don't Play". FYI, the best is "What Happens In Vegas Stays In Vegas"; and if you care to know, the worst is "Six Is Greater Than One".

But back to my point... A lottery ticket should not be anywhere in your plan to achieve financial freedom; and if you're going to do so, it will take SACRIFICE. In this episode of the [... and Landlord] Podcast, I relate my personal sacrifices made as part of my plan to achieve financial freedom. My sacrifices included: Entertainment (Sports / TV / Movies); Fast Food & Dining Out - each of these things consumed too much of my time and/or money, so they had to be figuratively crossed-off my daily to-do list, thus largely eliminated from my day-to-day routine. But that was just half of what needed to change. The other side was to replace these time wasters with productivity and learning, plus saving money for investing so that my money could begin working for me.

Instead of watching Football and Basketball, I began listening to Podcasts and reading / listening to books on Business, Real Estate, Mindset, etc...

Ep. #3 - The First 3 Things I Had To Learn How To Do For Purchasing My First Rental Property

Ep. #3 | The First 3 Things I Had To Learn For Purchasing My First Rental Property

Rental Real Estate Investing is simple, but its not necessarily easy... And making your first purchase can be downright scary. I've already related in the prior episode that my journey into being a Landlord started with reading the book, Rich Dad / Poor Dad. This episode relates more of this story focusing on what I had to learn how to do in order to go about purchasing my first rental property. Hint... It all relates to evaluating properties and what goes into that process, so that you will know if you will make (or lose) money if purchasing a particular property at a certain price.

What will your loan terms be? Down-payment amount required? Interest rate? Points? Closing costs? What will the property rent for? How much rehab will be required to make it rental ready? And how do you compile all of these details into an evaluation that tells you what your Return on Investment (ROI) will be on the cash invested? In this episode, I go into how I answered these questions for myself and the tools I used to do so.

Peppertree Townhomes

As previously related, my first rental property purchase came in July of 2015 (got it under contract in May) and it was a 2 Bedroom / 1.5 Bath Townhouse at just over 1,300 SqFt in a community named Peppertree of Guess Road in Durham North Carolina. But what did I have to learn between getting off the cruise ship "on fire" in March / April 2015 (where I read the book Rich Dad / Poor Dad) and getting my first rental property under contract in May?

I started by reading a second book, entitled "Buying Real Estate With Low & No Money Down" by Brandon Turner of BiggerPockets.com - which is a resource and forum site for Real Estate Investors. I forget exactly how I stumbled across BiggerPockets, but it was likely from a Google search, as the site ranks highly for many Real Estate related keywords.

Ep. #2 - The Book & Townhouse That Started My [... and Landlord] Residential Rental Real Estate Investing Journey

Ep. #2 | The Book & Townhouse That Started My [… and Landlord] Residential Rental Real Estate Investing Journey

This is where I talk about my first rental property. It was March / April of 2015 and I was on a 7-day cruise to Bonaire, Grand Turk (and other destinations) with my wife and son (at the time age 7), along with two other couples who are close friends, each with their two young children (11 of us in all).

Book: Rich Dad Poor Dad
The Book (Rich Dad Poor Dad) that started my [... and Landlord] journey.

To read, I brought along the book Rich Dad Poor Dad... It changed my life! Despite having a great time with my family and great friends, this book had me really wanting the cruise to be over sooner than later, so that I could get off the boat and start looking for my first rental property - as the book (along with my prior interest in being a Landlord) had me passionately wanting to do.

Finally, I had found something that put into words what I had somehow felt all along - that going to school, getting a job and working for someone else (to make them rich), buying stocks / mutual funds and saving for retirement in a IRA / 401K was NOT going to give me the life (or retirement) I desired.

You see, I had been self-employed by my own Web Hosting business (also offering Domain Names & SSL Certificates) for almost 13 years (since 2002) when I came across this book. And while I first had the mind to do so, I had long since decided that I was not meant for college, instead getting a degree in Electronic Engineering Technology from ITT Tech. It seemed the cheapest and fastest way of getting a decent job that I would only need for long enough to start my own business and quit - which is exactly what I ended up doing.

So this episode of the [... and Landlord] Podcast tells the story of me being on that cruise, reading the book Rich Dad Poor Dad, and finding that first property a few months later, to add... and Landlord! - to my other titles of Husband, Father and Entrepreneur (Realtor would come later that same year).

Once I got off the boat, I hit the ground running, fresh with a new mindset about money and finances that has been clarified, refined, and enlightened by my cruise ship read of Rich Dad Poor Dad. And as I relate in this episode (#2) of the [... and Landlord] Podcast, this is not the best written book, but it doesn't need to be if it finds you at the right point in your search for the truth about money. For me, the timing could not have been more perfect - so forgive me if you've read this book and got nothing from it. I suggest you try it again, as this time you may have a different result - possibly being at a different place in your life.

Peppertree Townhouse Community - Durham 27705
My First Property - Peppertree Townhouse

My first action upon getting home was to contact a Realtor to get notified of properties meeting my criteria, which was a 2BR or 3BR, less than $100K, greater than 1,000 SqFt, in a location that "I'd be willing to live" (rather subjective, but I did not want a property somewhere I'd be worried about going at night). A few months later, we found that property in a Townhouse Community named Peppertree off Guess Road in Durham (about 20 minutes from where I live in NC). My Realtor was able to aid me in getting my offer to purchase of $60,900 accepted on May 19th 2015, for a July 13th closing (I had no idea how long it took to close an investment property purchase, so I gave myself plenty of time).

Doing my research into this property, I noted that it had originally been listed as a Short-Sale, back in January 2014 @ $74,900, then dropped to $69,900 in February, and dropped again to $59,900 in April 2014. It went contingent in June 2014 with someone, but failed to close for some reason. It was then cancelled in December 2014, failing to sell after 136 days on market.

The following month, in January 2015, it was relisted as an REO / Foreclosure @ $69,900, but again failed to sell. So it was then dropped to $64,900 in May, right as I came along. Knowing that it was previously listed at $59,900, I decided to offer just above that amount (by $1K), but still $4K below the current asking price @ $60,900 - and my offer was accepted... I was in the game!

Now to get this property closed... At the time, not knowing anything about investment property financing, I went to Lending Tree's Website, which referred me to Quicken Loans. I filled out an app with QL, provided all the requested docs, jumped through all the presented hoops, etc... and was able to get a 30-year loan in my personal name along with my wife (I use LLC's now), at 4.75% interest + 3 points with 25% down. And even this presented a problem, because $60,900 - 25% = $45,675 (which is below the $50K minimum for many lenders, including QL). I got around that because the significant points, fees and other closing costs more than covered the gap. And those additional points, taxes, insurance, fees and closing costs from QL and others involved in the closing were very significant, totaling just over $6K. My out of pocket amount due at closing was just over $18K, with anything else being rolled into the loan or paid in advance of closing. And I decided paid 25% down on this property to get a lower rate, but I could have also gone with 20% down.

Now I had more than enough to cover this amount in my personal checking account; however, most of it had gotten there from the month before, when I transferred $25K from my business account to my personal account in repayment of funds I had previously loaned to the business in prior years. And while this was all fully documented in my QuickBooks and on both my business and personal tax returns, the underwriter from QL would not allow it, saying the funds had not been properly sourced. Apparently only a certain total percentage of down-payment funds can come from a business (I forget what the exact stated amount was) - if not W2 payroll income. Thus, I had to come up with an alternate (acceptable) source for the $18K.

Now technically my wife is in the Military... Previously in the Army, but now a Lieutenant-Commander in an often unknown (and unarmed) branch of the Military, named U.S. Public Health Service (PHS). You'll often find PHS Officers stationed at places like the CDC, Federal Prisons and other places with Federal Medical Facilities. And so being a Military Officer, she has a Thrift Savings Plan (TSP), which is like a 401K for persons in the Military. And since I have business income, we put a significant amount of her salary into the TSP. So to get around this business funds sourcing issue, we took out a $20K TSP loan to cover the $18K needed out of pocket to make this purchase. Then once everything had closed, we simply paid off the TSP loan with those same business funds - since QL fully accepted the TSP funds as being properly sourced to be used to make this investment property purchase.

So this was my first use of alternate or "creative financing". I could have also elected to use funds from my Home Equity Line of Credit (HELOC), as that would have also been considered properly sourced funds by QL. However, I feared that doing so might be reflected on my credit prior to the closing, and QL might have pulled another credit report thus affecting the credit to debt ratio upon which we qualified; whereas the TSP loan does not show up on credit.

So with all things considered and when factoring in expenses (except for Property Management, as I self-manage) - this investment property purchase yielded a Cash-on-Cash Return on Investment (CoC-ROI) of ~11% over the first two years, and then ~15% post-refi after holding for 24 months (interest rate when up to 4.875% upon refi @ 25-years). Total annualized return (which takes more into consideration than just CoC-ROI, like tax benefits) - was ~36% over the first two years, and then jumped to ~60% post-refi, at which I was also able to pull out cash. With less cash remaining in the property, ROI goes up. But also monthly positive cash-flow went down a bit upon refi due to the slightly higher interest rate, 5-year shorter term and increased loan balance - all resulting in a higher monthly payment.

— Come back for more on this property in a subsequent post, including what I learned about marketing a rental and my first Landlord experience.

— Get Rich Dad Poor Dad for FREE - (if its your first Audible Book); also available in Paperback, for Kindle, MP3, etc...

Ep. #1 - The first... and Landlord Podcast with Jonathan Taylor Smith


Husband, Father, Entrepreneur, Realtor… a long list of other titles and descriptions… and Landlord!

Welcome to the "… and Landlord" Podcast - with Jonathan Taylor ("J.T.") Smith… Following a Roadmap to Financial Freedom Through Residential Rental Real Estate. Here you'll learn how adding "… and Landlord" to the litany of titles and descriptions that speak to who you are and what you do may be the greatest opportunity to achieve financial freedom available to the average person today. Where someone else pays the bills (the Tenant) and someone else provides 80% or more of the money (the Bank) and where you get 100% of the cash-flow, all future appreciation and the tax benefits. All on an asset that's insured against loss, and that cannot be worth ZERO short of an Alien Invasion or the Zombie Apocalypse, ultimately resulting in a FREE HOUSE for YOU (the Landlord) - that will kick out cash-flow for the rest of your life and beyond! You try getting any of that from the stock market or your 401K. So be all that you are… and Landlord!

No? Scared? Name for me another asset where you can get a low interest 30-year loan for 80% (or more) of the purchase price of that asset, but still get the benefits of being 100% owner. And for which you can get cheap insurance on that asset protecting against losses, including fire, theft, natural disasters, etc… Yet you get 100% of future value appreciation and all of the tax benefits, including mortgage interest deduction, and deduction of rehab / repair and operating expenses, plus phantom deductions like depreciation. All while having everything paid by the Tenant!?

But when many people think of Landlords, they may think "Slum-Lord", so it seems Landlords have an image problem. Worse still, many who have considered becoming a Landlord think they'll get calls from Tenants at 2AM reporting their toilet overflowing; or they'll have to fight to collect rent each month… Well, if you're getting calls from Tenants at 2AM or you're fighting to collect rent - YOU'RE DOING IT WRONG!

So I'm here to tell you WHY you should be and HOW to become and SUCCEED as a Landlord - how to do it right, so that it builds your wealth and enhances your life (not the other way around). Done right, you'll avoid the stereotypes and problem Tenants while acquiring great cash-flow positive / appreciating properties and have systems, policies and a team in place that will make it all run smoothly - as a business.

Real Estate has made more millionaires than any other asset class (by far), and especially in the USA, it provides an opportunity to build wealth and create passive income that should not be dismissed because of misinformation, doubts and fears.

I remember when I first started telling people that I wanted to be a Landlord (I would joke saying I wanted to be a "Slum-Lord", but that's just my warped sense of humor) - and inevitably the person would vomit their Landlord Horror Story all over me (or that of a friend or family member). But in listening to such stories for only a few minutes, I would quickly hear the thing that person did wrong (or failed to do right) that was a critical mistake I was convinced I wouldn't have made… I could do it better. And I was right!

Being a Landlord is simple, if done right… If operated as a business, with rules and policies never broken, procedures always followed with systems properly utilized and when surrounded by a reliable team. Listening to the "… and Landlord" Podcast will give you insight into these things, and so much more regarding WHY and HOW to become a Landlord running a rental property business that builds your wealth now and for generations to come, while greatly enriching your life with passive income that allows you to pursue your dreams.

So again, be all that you are… and Landlord!