Ep #1,043 - Meet The Mom of 3 Who Built a $150K/yr Real Estate Business

[00:00:26] Welcome to another edition of Lifetime Cash Flow Through Real Estate Investing. I am Rod

[00:00:30] Khleif and I am thrilled that you're here. We have an absolute dynamo today named Casey

[00:00:34] Franchini and Casey's from Memphis so we're gonna have a lot of fun with that if you've ever heard

[00:00:38] me talk about Memphis but she kicks absolute butt with her husband in the single family and residential

[00:00:46] multi-family space and so we're gonna have some fun. Welcome to the show. Thank you so much Rod. I am

[00:00:52] really excited to be here today. Thank you. So why don't you tell us a little bit about your story and

[00:00:58] you know give us some background on who you are and why you ended up in real estate. Well it all kind

[00:01:04] of goes back to 2007 and even just quite a bit before that I graduated college I was on the five-year plan

[00:01:12] and I knew I wanted to I knew I wanted a job I knew I wanted to make money but I also knew I wanted to be

[00:01:18] a mother and there was such a stigma around women working putting their kids in daycare versus staying

[00:01:23] at home and not and not contributing financially. My dad grew me my dad brought me up to be an

[00:01:31] entrepreneur I had that sort of internal spirit to forge my own path and make money for myself yet

[00:01:37] I wanted to be a mother so I thought well how can I have my cake and eat it too what can I do I wasn't

[00:01:44] quite sure and so I went you know I was in Southern California at the time I got a job right out of

[00:01:49] college at a public relations firm in Newport Beach and I was driving an hour and a half every single

[00:01:54] day to work I would leave in the dark I would come home in the dark and I would be crying in my car

[00:01:59] like this is not what life is supposed to be this cannot be what I was promised why would I go to

[00:02:06] school my whole life to drive to work in in the dark come home in the dark for what how am I going to

[00:02:12] raise a family so whatever happened in you know the universe um the company shut down due to the

[00:02:19] owner's personal weird thing is going on and so I was out of a job I thought this this is this is my

[00:02:25] sign I'm gonna do something that I love what do I love well I love real estate I know I'm young but

[00:02:32] I love looking at houses I lived in California right before the market crash I would go to every single

[00:02:37] open house um every single new build I would drive for hours so I got my real estate broker license and

[00:02:43] I started finding flips for investors so I looked really young then in California yes um I looked

[00:02:50] really young and so it was very hard for me to it was very hard for me to sell million dollar homes

[00:02:56] right to be a listing agent and sell million when I looked like I was probably 15 but I did find my

[00:03:00] niche with real estate investors and I would drive all around to the desert to the beach to Los Angeles

[00:03:06] and try and find flips for them I didn't understand at the time how they were funding million dollar

[00:03:11] properties and flipping them I thought well they must have a lot of cash I didn't understand then

[00:03:17] but I knew I wanted to get into real estate somehow and my husband and I said well maybe rental properties

[00:03:23] is is it maybe we can buy um just a one little home and we can rent it out so in the Inland Empire

[00:03:31] we made probably about 40 offers on properties never quite pulled the trigger on any of them

[00:03:37] um something was holding us back I don't know what it was I think it was just the sheer fact that

[00:03:41] we didn't have anyone validating our decisions no one to tell us yes it's a good idea no it's not a

[00:03:45] good idea or say yes your numbers are right or yes you're right on how much or you're wrong on how

[00:03:50] much it's going to cost to fix up so we didn't buy anything that was probably around 2010.

[00:03:56] Fast forward to 2013 we moved to Memphis my husband got a job we moved out there and I said okay Blake

[00:04:03] we're gonna do it we are not gonna chicken out we are going to buy investment properties we're going

[00:04:07] to buy a rental we're gonna do it and he's like well Casey we just bought a fixer-upper you're not

[00:04:12] working you're a stay-at-home mom now we have a two-year-old and a baby brand new baby how are we

[00:04:17] going to afford to buy a rental property I'm like I don't know it's like well you need to figure it out

[00:04:23] I'm like great okay I said we'll figure it out so after thinking I'm mulling it over and making

[00:04:29] list upon list of what can I do to make money what can I do to make money but I still want to be a

[00:04:33] stay-at-home mom I I don't want the full-time job I thought well what girl doesn't like you know to do

[00:04:39] crafts so I started an online Etsy shop and in about a year and a half I saved up twenty thousand dollars

[00:04:45] for our first rental property by selling five to fifty dollar handmade you know personalized items I

[00:04:51] would buy I would go to the dollar tree okay I kid you not Rod I would go to the dollar tree and I'd

[00:04:55] buy these little stuffed bunny rabbits about six inches and I would get my cricket and I would put

[00:04:59] the little kids names and dates on them selling for five bucks for Easter gifts nice so that's my

[00:05:05] journey doing whatever the freak it takes you know what my dad taught me that you can there's no such

[00:05:11] thing as no okay you say yes you figure it out you can't wimp out yeah and you just got to figure it

[00:05:17] out was your dad an entrepreneur he was a I would say a he was an entrepreneur off and on throughout his life

[00:05:25] but never quite made it hmm he was he was he wanted it though yes very badly and he pushed that on you yes my

[00:05:31] sister as well love it love it you know you talked about these hurdles that you went through you know with with

[00:05:39] uh dealing with you know being perceived as being too young and uh I call those limiting beliefs by the

[00:05:46] way um you know I'm too young I'm too old I don't have enough time I don't have enough money mine another

[00:05:51] one was mine was I'm not good enough or I'm not analytical enough or whatever there's a reason

[00:05:56] the acronym for belief systems is BS because 99 of them are but but you still you you overcame that

[00:06:03] uh perception by dealing with investors but then you saw these guys making big money and you're and

[00:06:10] you thought it was out of reach by the way how did you become a broker so fast typically you got to

[00:06:15] have some experience first now you do but back then you needed to have I think it was like a four-year

[00:06:19] degree okay um you had to take extra classes and so now you have to have the experience to get your

[00:06:25] broker's license so I've kept it I still have my California broker's license at the time I wasn't sure if

[00:06:29] I want to start my own brokerage so I'm like well I might as well go for the broker degree the

[00:06:33] broker license instead of the salesperson got it yeah I was a broker when I turned 18 same thing you

[00:06:37] could do back then yeah with education I just was surprised that it still was that case in California

[00:06:42] so um so you knew you loved real estate you got your broker's license by the way she mentioned the

[00:06:47] Inland Empire could you describe what that is real quick because a lot of people aren't going to know

[00:06:50] what that means the Inland Empire is um it's well San Bernardino County yeah it's it's um it's not in

[00:06:59] Los Angeles and it's not beachside okay it's more going towards the mountains in the deserty area

[00:07:03] so you got deals that you can actually afford correct yes properties at the time were anywhere

[00:07:08] between 145,000 to 180,000 gotcha yeah which is reasonable so you're in Memphis now now you're up to

[00:07:16] you know you've got quite a few properties um talk about you know and you focus on buying residential

[00:07:23] correct residential meaning single family all the way to four plexus right anything five units or

[00:07:28] higher is considered commercial real estate um so talk about some of the things you learned about

[00:07:36] buying residential some let's talk first about how you find them okay so start there and then then

[00:07:42] let's talk about how to finance them okay so when when you're looking for residential rental properties

[00:07:48] um for me the key is finding properties in good areas you need cash flow and you need appreciation

[00:07:56] and people in my opinion don't really get rich on cash flow especially when you don't own hundreds of

[00:08:02] units you're going to get rich on appreciation but cash flow will pay for the property you'll get some

[00:08:06] money in your pocket but that's not where you're going to get your three million dollar beach house

[00:08:10] it's going to come from appreciation and time so you need a really fine balance of buying properties

[00:08:16] that cash flow but also have good potential for appreciation yeah they're not in the hood they're

[00:08:22] not in areas that are declining right but what i do want to make clear is they have to cash flow

[00:08:27] they have to cash don't don't don't be buying stuff that's tight on the cash flow or you know uh

[00:08:33] doesn't cash flow thinking well we'll just bank on the appreciation because that's a recipe for

[00:08:37] disaster especially in this current economic environment cash flow and that's the reason my podcast

[00:08:41] it's called lifetime cash flow and i wrote a book called how to create lifetime cash flow through

[00:08:46] multi-family properties but the subtitle is the new rules of real estate investing i.e the new rules are

[00:08:51] focused on the freaking cash flow because you got to make it over the humps you have to cash flow

[00:08:55] otherwise it's a bad deal that's it but i like the fact that you're drawing attention to the fact

[00:08:59] that it has to appreciate as well and i didn't get that memo i bought a lot of properties without

[00:09:04] that memo and uh you know i'll tell you i'll trash memphis for a second but we're gonna we're gonna

[00:09:10] really bring it home here in a minute but but you know i bought houses in memphis for fifteen hundred

[00:09:15] three bedroom two bath fifteen hundred square foot houses that i regret buying thirty five hundred

[00:09:21] dollars five thousand dollars tons of them under twenty thousand and i regret every single one of

[00:09:26] them because they're a freaking nightmare to manage and and uh one other aside on that back when i owned

[00:09:32] them they evictions were were extremely difficult because they had what uh they had chapter 13

[00:09:38] bankruptcies and so if you filed an eviction you would the person the tenant would get about 13 letters

[00:09:44] from attorneys saying i can stop your eviction by filing what they call a wage earner and that was a

[00:09:49] chapter 13 bankruptcy now thank god they fixed that since then but uh but yeah it was an absolute

[00:09:54] nightmare so so how do you find them so we look for areas that have appreciation potential right okay so

[00:10:03] you're targeting the right so we're targeting b class properties um where young college graduates with

[00:10:09] high incomes would live because people there are going to fix their homes up um they will appreciate

[00:10:17] and they'll pay their free and they'll pay their rent so what we try and buy in areas where we have

[00:10:23] six-figure income earners you know the tenants you know just graduated college they're they're newlyweds

[00:10:28] about to get married um maybe have professionally trained dogs and buy furniture at pottery barn

[00:10:33] we want those types of tenants because we want no problems we want low turnover costs and we want the

[00:10:40] rents to rise um and the values to rise well and the values exactly um one of the first properties we

[00:10:47] bought was in 2016 it was 92 500 um the rent at that time for that first property was about 10 50 10 75 i

[00:10:55] think and now it rents for 1600 nice nice so um have do you i i know you help people buy multi-family do

[00:11:05] you have any multi yourself or it's just single right now it's just single right now because we're in

[00:11:09] memphis okay well guys and you know i'm i've owned 2 000 single family houses that i rented long term 200

[00:11:15] of which were in memphis um and you know i i i i'm anti single family now personally just because of

[00:11:25] what i went through in 2008 and 9 but you know if you've got them in there closely close together

[00:11:32] geographically um i do believe in them um i i was too spread out i had houses two hours north of me

[00:11:36] two hours south of me and everywhere in between here was a logistical nightmare but uh so so you you've

[00:11:42] got these residential properties did any of them require fix-up yeah first of all how'd you find

[00:11:46] them through brokers or through um so a lot of them were on the mls and some of them were off market

[00:11:51] um we would always talk to all the neighbors and let them know who we were these tenants have any

[00:11:55] problems here's my you know card here's my phone number and then they would call me and say hey we

[00:11:59] want to sell our house okay got it so you did a little little direct to seller stuff as well okay

[00:12:05] um you have you done any like the what some of these big flippers do with the big mail campaigns

[00:12:09] outbound cold calling none of that stuff okay you just took it easy by the way you've got three kids

[00:12:13] yes yes and you're doing this with three kids yes okay well that's freaking impressive okay um so

[00:12:19] so um did you have to do any repairs on any of these properties all of them oh so you had to hire

[00:12:24] contractors well we have started hiring contractors recently okay um however blake and i we own pretty

[00:12:31] much every tool that home depot and lowe's sells we do all of our own rehabs so you were swinging a

[00:12:35] hammer yes and i was you know i remember i was eight months pregnant prying up wooden floors with a crowbar

[00:12:42] at one point and then nursing my newborn in the room next door after he was born tell me what your

[00:12:48] excuse is you listening okay tell me what your freaking excuse is i love it so um so now you've

[00:12:55] started hiring contractors so you actually have a life all right well that's okay that's how you start

[00:12:59] i mean i know you i think you told me you're gross on your on your properties right now it's almost 150

[00:13:04] grand a year yeah which is fantastic so i believe you're also managing them yourself yes i self-managed

[00:13:11] about what that talk about what that's like case i mean in my world we you know we hire third-party

[00:13:15] property management companies and and uh you know we're asset managing those companies but um we're not

[00:13:21] dealing with tenants and toilets yeah it is a ride you know and and that was the one thing that i had to

[00:13:28] learn all by myself and if you said casey what's your biggest mistake you've made in real estate it

[00:13:32] wasn't the deal it wasn't not running the numbers correctly it wasn't knowing how much it costs to

[00:13:37] rehab it was not putting in the right tenants that was my my biggest problem not doing proper tenant

[00:13:45] screening using my heart um over you know oh we're using your heart using my heart i know i don't do

[00:13:52] that anymore now i pull my heart out right and i put it in a box and i lock it up

[00:13:58] that's what i know and you have the conversation listen um here's what i can expect from you

[00:14:04] pay the rent on time don't bother your neighbors don't trash the property or around the property

[00:14:09] and uh here's what you can expect from me uh if you have a legitimate maintenance request it'll get

[00:14:15] fixed very quickly operative word legitimate if you screw up the blind because your cat crawled up it

[00:14:20] then you're going to be paying for it and it's not going to be priority but uh um and uh yeah but

[00:14:26] anyway yeah i got it so 100 i have the same spill to every every tenant i say i am an amazing landlord

[00:14:33] you're gonna love me i fix your properties on time i communicate very clearly here's my email my cell phone

[00:14:41] number um text me whatever i our life will be great however i only require just a couple things from you in

[00:14:48] return i require you to pay rent on time and if you can't i need you to communicate with communicate

[00:14:54] that with me and not ghost me don't ignore me don't pretend i don't exist you have to communicate

[00:14:58] and two when things are broken please tell me if there's a leak under you know under coming out of

[00:15:05] the living room ceiling please don't put a bowl under it and just let it go let me know so pay rent on

[00:15:10] time or communicate and tell me when things are broken hmm i'm not sure i'd even say communicate just

[00:15:17] pay the freaking rent on time period but i i see what you're saying because they will ghost they

[00:15:21] will ghost and then we end up in eviction court and i'm like you could have just we could have

[00:15:25] done a payment plan we could have worked this out but you just wanted to ignore me yeah okay okay well

[00:15:30] i yeah i could argue with you about payment plans because very often they don't work um yeah i mean

[00:15:36] this is my freaking 40 years experience in single two thousand single family houses but you know i i mean

[00:15:42] sometimes they work but a lot of times they just snowball and they know yeah they do and that's one

[00:15:47] of the things that happened with my nightmare tenant yeah yeah we're going to talk about nightmares here

[00:15:51] in a minute um so um so how do you finance these places that you're buying we save up our pennies okay

[00:15:59] all right but um what what that's that's the that's the cash out of pocket correct what about the debt

[00:16:05] we do um regular traditional conforming loans so we'll put 20 to 25 percent down and you know

[00:16:13] fanny may then fanny may so we get 10 loans in each of our name and most of those are close to being

[00:16:19] paid off um so we could pay them off if we wanted to open up more slots i see okay okay so um

[00:16:27] so you're just saving up your own money have you ever gone out and you've never brought in partners or

[00:16:32] raised money or anything like that you haven't done any of that no because we haven't needed to

[00:16:36] i'm not opposed to it yeah because i'll tell you that's the only way you're actually really going

[00:16:41] to get some scale is to use right opm other people's money and possibly even consider some

[00:16:46] creative financing i think things you know i think the proverbial shits about to hit the fan frankly

[00:16:50] and i think there's going to be incredible opportunity now memphis is fairly stable through

[00:16:54] these economic uh headwinds that that that's what i've seen um and and and the the the real stuff's

[00:17:01] going to be happening in the commercial environment anyway but um so let's talk about um

[00:17:09] some nightmares some headaches some problems that you've had i mean we we know i mean listen you're

[00:17:14] making great money you know you're you're buying in the right areas you're focused on cash flow and

[00:17:19] the potential appreciation um but it's not all rosy so let's talk about some i call them seminars you

[00:17:25] know it was a 50 million dollar seminar for me in 08 and 09 when i lost everything so talk about

[00:17:30] some seminars we're going to take a break from this great episode for a word from our sponsor which

[00:17:34] is the multi-family boot camp now financial success is what you're after we are rapidly approaching one

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[00:17:49] of my boot camps i've always got one right around the corner thousands and thousands of people have

[00:17:53] taken action on their journeys to creating generational cash flow for themselves and their families

[00:17:57] from attending my events i don't sell anything at this event so it's basically 16 to 18 hours of

[00:18:02] training with nothing being sold kind of a no-brainer if you're serious about this to check it out

[00:18:06] text the word links to seven two three four five or go to rods links.com again text links to seven

[00:18:13] two three four five or go to rods links.com i promise you'll be glad you came let's get back to it

[00:18:19] so my biggest uh horror story was like i said from not properly screening tenants we had this um

[00:18:27] this couple and i thought they were great and at the time i did not run credit and background checks

[00:18:32] because i thought well everyone who lives in this neighborhood run credit or background either oh my

[00:18:36] god no this is the beginning okay okay and i thought hey everyone who lives here is going to

[00:18:40] have bad credit i just don't want to know right that was that was that was my thought at the time

[00:18:46] learning lesson very big learning lesson so everything was great until they broke up and he moved out

[00:18:52] and she begged me casey casey please please can i stay my kids are getting straight a's in schools you

[00:18:58] know sob story they're doing really well i said but you don't make enough money to cover the rent and

[00:19:03] she said but i'll get another job i was like okay fine oh should i should have just said no okay because

[00:19:10] here it goes so she does get a job things are going fine until they aren't um the first clue was when

[00:19:20] they bought a pit bull and i owned the house across the street from her house so i was driving by doing

[00:19:24] something at that house i noticed a little doggy in the window and knock on the door and she goes oh

[00:19:29] i just bought this little baby pit bull super cute i was gonna tell you about it like sure you were

[00:19:35] there is a red flag right there they didn't take heed um when i open the door smells like smoke

[00:19:41] not just cigarette smoke but also the house is hot boxed and i'm like oh mg all right um

[00:19:49] i let it go i just charge her an extra 50 bucks a month for pet rent and said you need to get

[00:19:53] insurance and admins additional insured um this is a dangerous breed blah blah blah so she does that

[00:19:58] i'm happy i'm getting extra 50 bucks a month and i go well the house is already kind of messed up

[00:20:02] you know since the guy moved out the house is already messed up so i can kick the can down the road or i'm

[00:20:08] she's paying i can kick the can down the road and eventually when she moves out i'll fix the house up but

[00:20:13] i'm either gonna fix it up then or i'm gonna fix it up now and she's paying now so fine let her stay

[00:20:17] right it's getting worse okay her son hits the brand new glass security door don't put in glass

[00:20:24] security doors with a basketball and that's broken she backs into the garage drunk with her car so now

[00:20:32] my garage door is beyond repair needs to be replaced finally she's passed um on rent a couple times in

[00:20:39] a row gave her chances gave her chances at one point you're gonna hate me for this at one point

[00:20:43] she owed me four thousand dollars oh i've been there yeah much more than i even um she caught back up

[00:20:49] and i said if you're ever late again you're i'm not giving you 30 days now in memphis um in shelby

[00:20:56] county there's a waiver that they can sign and i have it in my lease agreement so it says i don't need

[00:21:00] to give you you're waiving your right to a notice and um rents due on the first and you have until

[00:21:06] the fifth to pay without late fees on the sixth you're like you're done so on the sixth i could take

[00:21:11] her to court um this is a couple years few years ago and i was on my way to california for vacation

[00:21:16] to visit my family and she was late on rent i said if you do not pay rent by this day i that's it

[00:21:24] we're done and she didn't so on my way to the airport i stopped by the court and i filed eviction

[00:21:30] on her um she moved out once she realized that i filed on her she was very mad at me i can't believe

[00:21:36] you filed on me i said well you didn't pay and i told you i'm done so she moved out what the house

[00:21:40] looked like so yeah so she only owed the one month right of rent all right so we get back from our

[00:21:47] wonderful beach vacation i'm visiting family in california and blake and i go to the house on

[00:21:54] saturday morning and we walk in and all of a sudden there's like a thousand bugs jump on us

[00:22:00] it's fleas she had seven she had seven dogs oh my god um and the neighbor told me that the pitbulls

[00:22:10] had babies and during that past winter freeze she had them outside in a crate they all died

[00:22:16] and she put them in a trash bag i'm like oh my god yeah wow cockroach infested flea infested she

[00:22:24] stole all my appliances she painted all the kitchen cabinets um she had incense like stuck in the walls

[00:22:30] i don't even know i don't even understand it was just terrible um she left a bunch of furniture in

[00:22:35] there i had to have some guys go and clean it out what it cost to turn it um over 15 000 15 000

[00:22:40] yeah i include the garage door um i think that was about the garage yeah include the garage door

[00:22:45] it was a single car garage what was your cash flow on that property um i think 450 a month was my cash

[00:22:51] flow so 450 a month times 12 is what about 6 000 um and so you lost over two years cash flow yeah

[00:22:59] and she was there for about five years and that doesn't even include the lost rent because you had

[00:23:04] to you probably lost probably at least three months yeah yeah well three months fixing it up

[00:23:10] that's right it was even more than that i had to leave it vacant for 30 days for the fleas yeah

[00:23:15] yeah so listen you know i i don't want to trash single family because it's a great place to start

[00:23:22] and that's what most people do i mean i've had people on the show with thousands and thousands

[00:23:26] of doors and they almost all started with a house duplex triplex whatever but here's the problem you

[00:23:30] know that example that didn't just cost you the cash flow on that house it probably cost you the cash

[00:23:35] flow on three or four of your houses and you know that's the problem with single family in my opinion

[00:23:41] is is you know if you've got a vacancy um you're going to pay to turn it over at least a couple grand

[00:23:47] typically a minimum couple grand so you're going to lose two or three months rent plus a couple grand

[00:23:52] and that can wipe out your cash flow for the year and and you know when you've got a house if you're

[00:23:57] vacant you're 100 vacant versus uh a plex you know or or something a little larger even is better

[00:24:04] but um but again i don't want to discourage you from doing single family because it's a great place

[00:24:09] to start but just realize that that's really what it should be it should be the stepping stone

[00:24:13] to be getting into you know some larger stuff so you've got safety so you've got you know uh it's

[00:24:19] it's more secure it's it's safer bottom line i mean when i lost everything in 2008 and 9 it was the

[00:24:25] houses that pulled me down uh my multi-family did just fine it pulled back about 10 11 i had several

[00:24:30] apartment complexes i still own them if i hadn't cross collateralized them with packages of houses

[00:24:36] to save a few basis points and interest like i thought i was brilliant but uh but um so so um

[00:24:44] you know we've all got these horror stories i could tell you horror stories about some of the landlord

[00:24:49] tenant stuff i had i'll tell you a funny one i um not two funny ones so i had a i had a five

[00:24:54] bedroom house in denver 3008 columbine i shouldn't have probably said that publicly anyway i and i had

[00:25:00] a partner lived in chicago uh al al al pick and and one day i'm reading in the newspaper there's a

[00:25:06] picture of my house and the headline said making money the old-fashioned way the guy turned it into

[00:25:11] a whorehouse true story i call my partner in chicago i'm like al you own a whorehouse in denver the guy

[00:25:17] said he was in the maid service and and uh and uh the maid service oh yeah that's what he said yeah

[00:25:22] and oh god it was funny but it wasn't funny at the time but it's funny now to talk about and then one

[00:25:27] other one i had a house here in in florida so here's a quick word from our sponsor and the sponsor

[00:25:34] just happens to be my multi-family virtual boot camp so my next live online virtual boot camp is

[00:25:39] going to be january 25th and 26th and know this i don't sell anything at this event nothing being sold

[00:25:46] it's 18 hours of training with nothing being sold and i've had thousands of people attend these two

[00:25:50] day virtual boot camps of mine with rave reviews in fact the only complaint we ever get is that the

[00:25:54] breaks are too short because i'm trying to pack so much information into those two days and know this

[00:25:59] you'll leave that online boot camp knowing how to find deals how to build your team how to raise all

[00:26:04] the money you need for your deals how to properly evaluate your deals you know how to finance them how to

[00:26:09] syndicate and on and on even how to manage we could be right now facing the greatest transfer of

[00:26:15] wealth we see in our lifetimes and i know some of you may find that hard to believe but i'm going to

[00:26:19] tell you in multi-family there is incredible opportunity but if you want to capitalize on

[00:26:24] it by the way why is there opportunity because a lot of deals are in trouble because they got

[00:26:28] adjustable rate debt but again if you want to capitalize on it you got to get up to speed quickly

[00:26:33] so text the word boot camp to seven two three four five right now again that's boot camp to seven two

[00:26:38] three four five or you go to rods links.com and i promise you'll be glad you came so again text boot

[00:26:45] camp to seven two three four five or go to rods links.com and i'll see you soon all right let's

[00:26:51] get to it on a canal i mean i i was able to buy this place for like 150 grand on a direct access

[00:26:57] canal out to the ocean which just amazed me about five of them in this but everyone under 150 grand

[00:27:02] but anyway i'm sleeping one day and this is down i'm not gonna say the address but um i'm i i get

[00:27:09] woken up at six o'clock in the morning by the news and it's like this is so and so with wink tv have

[00:27:14] you seen the news i'm like no and say um this is rod cleef yes uh do you own the house at so and so

[00:27:20] boil terrace yes well they had a dea raid the guy brought in like in the tonnage of cocaine i mean

[00:27:27] night vision goggles submachine guns the whole thing yeah and they arrested this guy he had he

[00:27:32] had an 800 plus credit score you know when they have that kind of a credit score you really typically

[00:27:36] don't worry about anything but all brand new furniture anyway i've got a lot more but we'll

[00:27:40] leave it at that so we learned our lesson we learned our lessons yes now now i know you're an advocate for

[00:27:47] buying out of area as well um talk about the advantages of that um

[00:27:54] um or and the hurdles i i mean i can think of hurdles especially in the smaller stuff like this

[00:28:00] because you're going to really be reliant on other management companies you know i'm i'm i'm kind of a

[00:28:06] proponent to um uh turnkey sales i i don't like them and i don't like them because i believe that

[00:28:13] the person that sells them is the one that makes all the money correct and you're relying but how you

[00:28:18] know i know you talk about this sometimes in your stuff what talk about how you mitigate

[00:28:23] some of the challenges so and that's a really good question and i would say for a lot of people that

[00:28:29] live in high cost areas like california or new jersey new york can't invest they can't invest near

[00:28:34] them so does that mean you just can't be a real estate investor and that sucks for you no there

[00:28:39] are other options and especially with today's technology especially since the pandemic more and

[00:28:44] more people in the industry have had to use technology to communicate virtually and that's really

[00:28:50] helped out real estate investors to invest out of a sense it makes a lot of sense okay so one reason

[00:28:57] why you'd want to invest out of area is because that's your choice of course it's better to invest

[00:29:00] near you if possible 100 i believe that and that's why i do um but i also don't i also believe in not

[00:29:07] investing in too many properties in one geographical area and there's a risk there as well right there's a

[00:29:13] risk there as well so when you do go out of area you reach a lot of um there's a lot of problems that

[00:29:21] you could encounter um the biggest one is you're not there and nobody cares about your properties

[00:29:26] and your deals more than you so you have to really do your due diligence and vetting everyone on your

[00:29:31] team you need to have property management companies real estate agents contractors um even local lenders

[00:29:38] would be very helpful especially in bigger deals because they are more flexible um but vetting those

[00:29:43] people properly and making sure they actually know what they're talking about um so how do you how do

[00:29:48] you do that so well let's talk about um real estate agents i guess for example right that's probably one

[00:29:53] of the first first team members you'll need besides a lender is people get excited and let's go find

[00:29:59] properties let's go house hunting let's go look um as a real estate agent myself past real estate agent

[00:30:05] um if people were to ask me casey are you investor friendly i would have said yes even if i was a

[00:30:12] brand new day one real estate agent yes i'm investor friendly yes i will work with investors

[00:30:17] have i before no but will i yes so you got to be careful in how you vet real estate agents um they

[00:30:25] need to have personal hands-on experience i have my broker's license and i will tell you and you know

[00:30:32] this you mean personal hands-on experience actually owning a property owning real estate

[00:30:35] gotcha owning investment properties and let's say maybe they don't own investment properties yet

[00:30:40] that's their main focus their clientele are investors and they understand the rental properties like the

[00:30:46] back of their hands i want my real estate agents to know just as much as the property management

[00:30:50] companies know i don't want them to have to say oh i don't know what it would rent for let me go ask

[00:30:54] i'm not sure what you know the market rents are in this area or what the amenities are that

[00:30:59] tenants want in this area let me go ask no no no your real estate agent needs to be investor friendly

[00:31:06] meaning they understand and day in day out work with investors no that's that's really solid yeah

[00:31:12] that's solid now uh obviously if it's out of state you need property management as well and i've had

[00:31:17] lots of horror stories in memphis as well uh but in other areas where you know the property manager

[00:31:24] is a broker that's doing it on the side um not that that's bad that can sometimes be good but how

[00:31:31] do you vet property managers um to minimize and you're not going to eliminate to minimize problems

[00:31:38] so there's quite a few things i feel like property management companies should have or at least have

[00:31:42] the knowledge of one telltale thing that kind of irks me is when you ask them how much your property

[00:31:48] would rent for and they go pull a rental meter report or they go pull some report from somewhere else

[00:31:53] it's like okay thanks for the report but what about your personal knowledge with your portfolio of

[00:31:59] homes that you manage you tell me from your own mind what this house will rent for the minimum

[00:32:06] the high end and what i could do to fix it up don't just print me some report offline right that's one

[00:32:12] thing that i can't stand well you not only can't stand it just shows that they're not either not

[00:32:16] experienced they don't have much of a portfolio or they really don't care about what they're doing

[00:32:19] exactly yeah and another thing i asked for and i'll start the conversation off when i interview them

[00:32:24] with you know how much you know what do you charge every month and it's gonna be between eight to ten

[00:32:27] percent i go okay great thanks can you send me over your client agreement the one between me and

[00:32:32] you and also a list of all your fees and i have found that some markets um property management

[00:32:38] companies charge way way more than other markets and it's not all about how much they charge but when

[00:32:44] they're gonna take most of your cash flow that's also part of the running the numbers let's talk

[00:32:49] about that for a second because i i teach this as well you know especially i mean if you own a

[00:32:55] multi-family property that's 80 units or more all the staff will be right there you'll have your

[00:33:00] own maintenance guy you'll have your property manager you won't have any of that and you'll pay

[00:33:03] you know three four percent management fee but on on residential multi-family or residential

[00:33:08] single family even um you're gonna pay a much higher management fee right okay depending on

[00:33:14] the asset class if it's a c-class property it could be 12 to 15 percent you know a and b maybe eight

[00:33:20] but you're also going to rely on their maintenance infrastructure yeah and maintenance can be a huge

[00:33:25] profit center for a management company they hire some kid at 15 bucks an hour and bill them out at 100

[00:33:29] so you really gotta i've been screwed by that ad nauseum and so you really got to check out the

[00:33:35] maintenance piece as well um and then i'll tell you in my opinion you've got to look at their

[00:33:41] technological infrastructure as well have they embraced technology what's their website look like

[00:33:45] if they're a digital dinosaur that's a freaking problem because everybody rents places on their

[00:33:50] phones now so you agree with me yes the mom-and-pop shops i i i love them right um but i also don't

[00:33:57] love them at the same time um i i'm a mom-and-pop right i manage my own properties um but i would

[00:34:02] not have the infrastructure or the platform to manage for other people and when you have so

[00:34:08] managing so many units and you don't know the tenants personally you need to have some sort of

[00:34:13] platform and your clients you know the owners of the properties their success is dependent upon

[00:34:19] the property management company's ability to do a good job and keep the tenants happy it's a whole

[00:34:23] enchilada that's everything yeah if they if they if they do a bad job you're gonna lose your asset that's

[00:34:28] right um you know something you just said about knowing the tenants personally did you get the memo

[00:34:34] uh with that horror story that you shared about the dangers in that oh yeah yeah okay because because

[00:34:40] i will tell you you know i'll go to apartment complexes and i'll do everything i can not to let

[00:34:44] people know i'm one of the owners um because then they you hear about every freaking problem they've

[00:34:49] ever had um but uh you know people will take advantage of those personal relationships and i've had

[00:34:56] them where i've slipped up and i've had them come in the next day and say yeah well i met the owner and

[00:35:00] he said i could do you know he said he said he's full of crap i didn't say that but uh okay so so uh we

[00:35:09] talked about out of state buying with brokers and property management companies and you know and i tell

[00:35:14] people also you know talk to some local banks there and and in the market that you're going to buy in and

[00:35:20] see if they'll loaned out of state investors number one and and get to know them because they can be an

[00:35:25] incredible resource as well and and i'll tell you i think a lot of i think a lot of property well and

[00:35:29] definitely in my world in the commercial world is going back to lenders we're seeing it now i've got

[00:35:34] a phenomenal deal under contract right now in san antonio we're seeing deals coming already but i'm

[00:35:39] not sure about single family i think single family's got enough pent-up demand i don't think it's going

[00:35:43] to get hammered um but um so um so you are now receptive to potentially partnering and or raising

[00:35:53] money oh 100 yeah yeah i don't know about you but i'll take 20 30 40 50 percent of something over 100

[00:35:59] and nothing any day right yeah that's how i feel about it but after my horror stories in memphis

[00:36:04] it has to be in the right area yeah you know and personally my my feelings are memphis is just

[00:36:09] not a great place for multi-family and it all comes down to how much each unit rents for there are

[00:36:15] some nice people that live in memphis yes see i'm one i trashy exactly but i i i at my boot camps i have

[00:36:22] a thousand people in the room and i'll say is anybody here from memphis and nobody's got the

[00:36:25] guts to raise their hand i know i know it but you know i listen i um i i just tell you i i think it's

[00:36:33] a it's a there's i don't want to say this publicly i well i will say this let me just say this and let

[00:36:39] you make your own conclusions okay i lived in denver uh two million population in the morning they

[00:36:46] they'd list the traffic accidents and there might be two two three in memphis at what's it now half a

[00:36:51] million three three or four hundred thousand in memphis proper yeah it's it's it's a fourth of

[00:36:55] denver it's a fraction yeah 18 accidents every freaking morning okay and that's with no rain

[00:37:01] okay that's just accidents am i i'm not talking on a smack here am i no you're on par right right

[00:37:07] right i was looking over at blake because uh it's it's like you know uh blake's here in the in the

[00:37:13] video studio but anyway uh yeah and and i mean that's what we call a clue okay yeah well i will say

[00:37:19] um my kids and i our family we've seen about four dead bodies no kidding and we witnessed our we were

[00:37:25] witnessed our first family shooting oh my last december jesus yeah no it's it's it's crime is

[00:37:31] really bad there and anyway but uh but they do have great barbecue so there is that they do

[00:37:36] get sick of the barbecue ready for ready for a change yeah yeah so there's some memphis horror stories

[00:37:42] yeah i i mean what killed me was the inability to remove tenants it was just like i mean that just almost

[00:37:47] wiped me out yeah it's much easier now yeah no i'm sure i'm sure so talk about you know

[00:37:54] i want you to inspire women who are thinking about getting into this business okay i mean i've got

[00:38:00] warriors my coaching students are called warriors and i've got some super rock star women in there

[00:38:04] that have thousands of units already but talk about the hurdles that you may have encountered or maybe

[00:38:10] even the mindset hurdles if you had any maybe you didn't you're a rock star but i mean talk about that

[00:38:15] dynamic a little bit i would say you know and everybody knows this men dominate most business

[00:38:21] and then men dominate real estate investing when i go to my memphis real estate investor meetings i'm

[00:38:27] probably one of like four or five women in the whole room really you know well and i'm pretty loud

[00:38:32] right and i love yellow i love being out there so it doesn't bother me and i haven't had a lot of people

[00:38:38] put me down um but i'm definitely overlooked you know it's definitely um something that i've been over

[00:38:44] i've been overlooked many times and i would say for women especially mothers especially uh stay at home

[00:38:51] moms i was a stay-at-home mom i haven't had a real job my entire life i had a real job for three months

[00:38:56] well okay and then um and then i did real estate so you can have your cake and eat it too you can make

[00:39:04] money at home investing in real estate and still be a stay-at-home mom and that's what i wanted i

[00:39:09] wanted to be able to make money contribute financially because that's what our culture

[00:39:13] is women need to go to work but women are also expected to take care of the home right and i

[00:39:18] wanted to have both how could i i mean i went to school all my life i went to college am i gonna do

[00:39:22] all of that and not make any money i mean that just wasn't in me to do that i needed to contribute

[00:39:27] financially and make something of myself um and so for all the women out there that want to be real

[00:39:33] estate investors and are being you know seemingly held back by the male domination um you just put

[00:39:41] that out of your mind it is like you say a limiting belief it is nothing it means nothing you're making

[00:39:47] it you know everyone who says i'm a woman i can't that's bs yeah there you go no i agree completely and

[00:39:53] i will tell you i've got super successful single moms with kids you know uh and and that has another

[00:39:59] component and so let me ask you that what suggestions would you have for you know people

[00:40:05] that are sitting on the sidelines that know they need to do something i mean uh you know what

[00:40:11] suggestions would you have motivate them a little bit i would say and that's where i was in the very

[00:40:17] beginning um i sat on the sidelines i watched investors get rich i didn't know what to do we made 40

[00:40:23] offers on properties and never really closed on one close but just didn't go all the way and what

[00:40:30] would have changed it for me if i were to you know go back in time would have been to get a mentor to

[00:40:34] get someone to help me now back then facebook was hardly even a thing it was how do you feel put an

[00:40:40] emoji so there wasn't this huge social media and this online learning yes my head of my space yeah so

[00:40:47] there you know being in california i knew nobody that owned real estate my friend mikey's grandma

[00:40:52] owned 10 rental properties that's that's the closest i got to anyone that i knew that owned real estate

[00:40:57] on purpose besides the occasional oh i'm moving into a house and i'm just going to rent out my condo

[00:41:02] yeah so if you're on the sidelines and you want to get started the only reason why you're not getting

[00:41:07] started is because you have fear of the unknown because you don't know what's going to happen

[00:41:12] if you push through and you give it a try so join a mentorship join a program like yours you know get

[00:41:18] the help because that's going to cut your learning curve in half if you have someone on your side

[00:41:23] that says this is exactly how you do it here's a step-by-step plan here's all the resources here's

[00:41:28] the tools and here's a group to help you and here's a group to help you right you'll get your questions

[00:41:34] answered and you're going to be in a community full of people that are doing the same thing

[00:41:39] and they're just motivated not trying to diminish your dreams like your friends and family exactly

[00:41:44] exactly yeah right and you know i couldn't agree more i i i brag about my warriors my mentorship

[00:41:50] students they own upwards of 190 000 units that we know of and i've only been doing this for six years

[00:41:56] something i'm super proud of if i would have had or known about a program like yours back then

[00:42:00] i would have been way farther ahead i would have bought those properties in california that were

[00:42:06] 145 000 at a time i look back i found the addresses they're six six hundred thousand dollars now it's

[00:42:12] painful i know i know you know listen i listen to make you feel better i owned 500 houses in denver

[00:42:18] at one time okay if my dumb ass hadn't sold those let me tell you i would be they'd be free and clear

[00:42:23] right now and i would be netting bottom line net a million dollars a month right now ouch yeah yeah

[00:42:31] so again again there you know there you go i try not to think about that it's too freaking painful

[00:42:37] so you know in this journey of yours um exploring learning real estate doing real estate any epiphanies

[00:42:46] any any like uh have you had any recent epiphanies or or even past epiphanies where you're like okay now

[00:42:51] i get it i think we alluded to some but anything come to mind with that question i would say epiphanies

[00:42:57] would be stick with what you know and don't be don't stick with what you know be very good at it

[00:43:05] before you transition to the next category or the next thing there's so much shiny object syndrome

[00:43:10] out there yeah um you're gonna see someone killing it in multi-family you're gonna see someone killing

[00:43:15] it with short-term rentals you're gonna see someone killing arbitrage and now people are buying

[00:43:19] hotels and buying campgrounds you can get lost in learning and never taking any action in the mirror

[00:43:26] when you're saying this aren't you yes no yes you get lost in the learning you get lost in learning

[00:43:31] never take any action so the epiphany is learn one thing learn it really well and then when you feel

[00:43:38] like you've mastered that and can do that in your sleep now you've graduated and you can move on to

[00:43:42] the next big thing yeah you were speaking to me with that as well because i've i definitely have

[00:43:47] shiny penny syndrome i've started 27 different businesses several worth tens of millions of dollars

[00:43:52] most spectacular flaming seminars you know what do you love the most about real estate investing tell

[00:43:58] me i mean what's what's and the least let's do the most and the least okay what do you love the most

[00:44:02] about it start there well obviously what i probably love the most about it is making the money making

[00:44:09] the money um without having to invest a lot of my time in doing it yeah yeah yeah yeah you know that's

[00:44:16] the key because i do self-manage and we bring in you know close to 150 000 a year and i hardly talk to

[00:44:22] my tenants yeah that's nice you know and they stay a long time have you done any tech have you brought

[00:44:27] any tech in yet or it's just still no old school i tell you i use google spreadsheets okay okay all

[00:44:33] right so so what do you like the least what i like the least i i really hate showing properties i

[00:44:40] know this is so small um safe either honestly you know i know i know well we buy in better areas

[00:44:46] now right i learned my lesson from before i don't buy in areas like that anymore i buy in more b a b

[00:44:50] neighborhoods right with the appreciation and the high rent increase every year um but i'm really

[00:44:56] getting kind of tired of managing to be honest um the showing and all that that's probably one of my

[00:45:00] least favorite things well and it holds you back from further acquisition as well it takes it takes

[00:45:05] whatever time you have that you're willing to devote to this and you're doing you know you're dealing

[00:45:09] yeah so i think you know i would be i would want to buy more if i didn't dread having to do that i

[00:45:15] do feel like that's one thing that i'm like well you know you should probably come to my boot camp and

[00:45:20] learn about that i'm just playing i'm just playing but no it's it's it's i'm kind of playing uh but

[00:45:25] it's the natural progression uh i i could totally see you sitting in that seat with a thousand units

[00:45:30] in a couple years i totally could uh and you've got the drive and let's talk about drive for a second

[00:45:35] you know you've uh you i do these clips every week called own your power they're motivational

[00:45:41] they're inspiring and and i'm certain that's the reason that my students are so successful because

[00:45:45] they do focus on mindset psychology to actually take action with what they learn but where do you get

[00:45:50] your drive i think what's the why i have an internal perpetual drive to always be better make more money

[00:45:58] and always just level up myself i've had that since i was little i mean i was freshman class president in

[00:46:03] high school and all of these things i mean it's just like gotta strive for the top the top the top

[00:46:09] all the time and i got that from my dad and my sister's the same way she doesn't do real estate but

[00:46:14] she's very successful and it's just the internal thing always it's innate born with it yeah i think so

[00:46:21] so here's a little caution for you because i i could totally see you killing it in multifamily

[00:46:30] and multifamily is a team sport you can't and it's very difficult to to take off that single

[00:46:37] entrepreneur hat well you and blake but take off that hat and put on the team hat yeah and partner

[00:46:42] and deal with partners and and and which has its own set of potential headaches and problems

[00:46:47] i'm actually dealing with one right now and so so you know how do you feel about that dynamic as it

[00:46:54] relates to taking this to the next level i think initially um blake and i's first goal was we're

[00:47:00] going to own 10 properties it's going to comp a salary and that was as far as we ever really thought

[00:47:05] yeah um now that i see the power in real estate and since you know we've gone through the pandemic

[00:47:11] and there's more opportunities open for out of area investing and i've become more and more

[00:47:16] uh i'm just i live eat and breathe real estate um all day um their power is there so i never wanted

[00:47:24] to partner before i wanted everything to be mine um but i realized that oh my gosh i totally could own

[00:47:32] so i could be monopoly i could own the board no question you know i get on the board but i would

[00:47:37] need to partner other people so it's i'm open to the opportunity and the possibility because it's a

[00:47:44] mindset shift yeah because i'm very control right that's the key that's the that's the issue you have

[00:47:49] to overcome as a control freak piece and that was it for me as well it took me 2 000 freaking houses

[00:47:53] to get them yeah but uh uh yeah and by the way i've got an incredible resource um if you're gonna

[00:47:59] get into a partnership it's at rodslinks.com and it's a list of questions you should ask before you get

[00:48:05] in a partnership because partnerships are really easy to get into like a marriage and very hard to get out

[00:48:09] of ask me how i know i sell i give t-shirts away at my boot camps say hashtag ask me how i know

[00:48:14] because i've made every freaking mistake you can make i say don't do that ask me how i know

[00:48:18] anyway um but yeah it's at rods links it's in the free book section it's the list of questions you

[00:48:23] should ask so you don't get caught up in the emotion of a deal without asking those tough questions

[00:48:28] well listen casey this has been a real treat i really appreciate you coming down here for this

[00:48:33] i'm honored that you'd fly down here and and get on the show and i know you've added value and hopefully

[00:48:38] inspired some of you listening to go out and buy some freaking property it doesn't have to be 100 units

[00:48:43] start with a house start with a duplex triplex fourplex whatever just freaking start bottom line

[00:48:49] thanks for coming on thank you so one other quick thing we encounter so many people that are frankly

[00:48:56] frustrated you know they're looking in the mirror and they're frustrated that they haven't been able

[00:48:59] to escape the rat race they haven't been able to build cash flow to the point where they're able

[00:49:04] to have financial and time freedom with their families you know and maybe they see other people

[00:49:08] buying real estate and creating you know incredible cash flow and they think well it's just scary you

[00:49:14] know buying apartments is intimidating and i get it see that's why we created our warrior mentorship

[00:49:19] program they're our coaching students and they've had extraordinary results my students i've been

[00:49:24] teaching about five years and own upwards of 140 000 units now that we know of right and we feel

[00:49:30] like it's just getting going now we're looking to grow this group and really take it to the next level

[00:49:34] and honestly believe that the greatest transfer of wealth could be upon us right now with this

[00:49:39] current economic environment everything's going on sale so we're looking for people who want to follow

[00:49:44] a proven framework really like a blueprint or a map literally step by step and then they're able

[00:49:50] to leverage our systems and our incredible network to raise money and equity to find deals and close

[00:49:55] those deals and build partnerships really nationwide so if you're interested in finding out more about how

[00:50:01] you can become more in our incredible network and take advantage of the unbelievable opportunities

[00:50:06] that are upon us you can apply to my warrior mentorship program by texting the word crush

[00:50:10] to seven two three four five or you can go to mentor with rod.com and what we'll do is we'll set up a call

[00:50:16] so you can check us out and we can check you out and see if it's a fit now again you can go to

[00:50:21] mentor with rod.com or text the word crush to seven two three four five to apply and we will speak soon

[00:50:27] thank you for listening to the lifetime cash flow through real estate investing podcast

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