Ekabo Home Financial Freedom Mastermind Podcast
A podcast for those who do not believe they were put on this earth to work 40 to 50 hours per week for 40 to 50 years, to hopefully retire at the age of 65.
Ekabo Home Financial Freedom Mastermind Podcast
143. From Layoff to Success: How Real Estate Changed Lives!
🌟 How to Turn Layoffs into Lucrative Real Estate Opportunities!🌟
Welcome to the Ekabo Home Financial Freedom Mastermind Podcast! Join host Niyi Adewole as he leads an insightful open session with members of the Ekabo Financial Freedom Mastermind group, where they dive deep into real estate investment strategies, personal experiences, and actionable insights that can help you achieve financial independence.
🔥 The Quote of the Day:
“House hacking has provided financial stability and allowed me to travel, despite being laid off from my job at Microsoft.”
– Desmond Howard
This quote highlights how real estate can be a pathway to financial independence, even in challenging circumstances. It encourages listeners to explore innovative strategies like house hacking to achieve their financial goals.
Episode Highlights:
🔥 House Hacking Success:
Claudia Rhoden shares her journey of house hacking, managing two rental rooms, and generating $1,400 in monthly income while only paying $300 out of pocket for her mortgage. Learn how she navigated challenges with tenants and utilities, emphasizing the importance of clear agreements and communication.
🔍 Market Trends and Insights:
Niyi and his guests discuss current market trends, including the impact of economic shifts on real estate investments. Discover the importance of adapting your strategy in a low transaction volume market and the opportunities that arise for savvy investors.
💡 Navigating Career Transitions:
Desmond Howard reflects on his career transition after being laid off from Microsoft and how real estate has provided him with financial stability and freedom. He shares his gratitude for the unexpected break and explores potential paths for his future, blending tech and real estate.
📈 Strategizing for Growth:
Claudia outlines her plan for transitioning to her second property, including managing multiple rentals and minimizing vacancy during tenant lease renewals. Niyi discusses the challenges of developing townhomes and the importance of community support in real estate projects.
🛠️ Commercial vs. Residential Insights:
Niyi shares his experience transitioning from residential to commercial real estate, highlighting the complexities of underwriting and financing. Learn about the advantages of partnering with local banks and how to navigate the commercial landscape effectively.
🌍 Building a Community of Investors:
The session concludes with discussions on collaboration and networking among members. Niyi invites everyone to participate in upcoming events, including a fun pickleball tournament, fostering a sense of community and shared success.
⚛️Why This Matters:
In today’s fast-paced world, financial freedom through real estate is more achievable than ever. This episode serves as a powerful reminder that with the right strategies, determination, and community support, anyone can navigate the complexities of real estate investing and build a fulfilling life.
📈 Don’t M
🗓️ Tune in every Wednesday at 7 PM Eastern! Don’t miss out on our journey toward financial freedom through smart investments.
👉 Hit that subscribe button and turn on notifications so you never miss an update! Let’s unlock your potential together!
Our Links
➣ Financial Freedom Mastermind Facebook Group - https://www.facebook.com/groups/53083...
➣ Peer Space Host Referral Link https://www.peerspace.com/referrals/g...
➣ AirBNB Host Referral Link https://www.airbnb.com/r/niyia41
➣ Ekabo Home Network (IG, Youtube, Email) https://linktr.ee/ekabohome
Niyi Adewole is a licensed realtor in Georgia, brokered by EXP Realty. Feel free to reach out at Niyi.Adewole@exprealty.com if you would like to work with an investor friendly real estate agent.
Welcome to the Financial Freedom Mastermind Group Podcast. Here we're all about breaking free from the 40 to 50 year work grind and accelerating our journey towards financial freedom. Join us every Wednesday at 7 pm Eastern as we explore different types of investments that can fast track your path to financial independence. We serve as a hub for connecting with fellow members during our sessions so you can share successes, ask questions and keep the momentum going.
Speaker 2:Good evening everyone. This is Nihi Adewale, host of the Acaba Home Financial Freedom Mastermind Group, and today we are kicking it back off with an open session, and it's been a minute since we've had one of these. I know I had a hiatus for a bit, and so I'm excited to get back into doing the open sessions, and I'm especially excited to do it with the Zoom setting. So moving this to Zoom allows a lot more of our members to be able to join even while they're on the go, because some people are just getting off of work or wanting to maybe be on the road traveling and still be able to join from their phone, or wanting to maybe be on the road traveling and still be able to join from their phone, and so that's why we listen to you and put this onto a Zoom session and moving forward. That's how we're going to be recording our sessions is via Zoom, and so, again, this is an open session, so I'm going to pause and just hang out here until somebody joins and we will get it going from there.
Speaker 2:Claudia, long time, no see how you doing. And, claudia, can you hear me?
Speaker 3:I can hear you Can you hear me, I'm doing good, I'm doing well. I'm actually being low key right now, like I'm on the clock, but it's kind of pretty, pretty, like chill. So I am tuning in from work, but I am here and I am tuned in, hey come on now.
Speaker 2:I love to hear, and I'm happy that we can do this via zoom so that more people can join from phones and things of that nature. If you want to be real low-key, feel free to drop anything into chat, but this is an open session and so I'm here to answer any questions, talk about whatever and and kind of go from there. So if you got something top of mind, hit me with it yeah, yeah for sure.
Speaker 3:so, um, you remember how I told you. So I actually got both my rooms filled up so I could say like so far it's been like two months, I would say so far. So everything is kind of cool. Like you know, they pay on time.
Speaker 3:As far as like rent and stuff like that, I would say like the only hiccup I probably had one time, but it's all straightened out now and I think I'll probably like fix this in the future, but with my first tenant, the one that moved in, because my utilities are separate from the rent. So then, yeah, so when the utilities came out, you know, I texted him like a screenshot, you know, of the bill, kind of like broke down the cost and things like that. So I noticed like he kind of paid the next month but didn't cover the utilities from the prior month, but like it's kind of been lingering, you know, for a little minute now. So I don't know. Basically, I kind of had to not say get it out of him, but, like you know, I don't know how to explain it, but you just got to be kind of like firm but, you got to just take care of business.
Speaker 3:You can't really let stuff slide Like cause. If I would have let it slide, he would have just thought it was okay.
Speaker 2:So you just got to put certain things to the side. You're spot on. It's one of those things where what you have to do is remain firm to your lease agreement and what everybody signed. And as long as you are firm to that and you discuss that upfront when somebody's coming through, you're not the bad guy. The lease is the bad guy. You have to follow the lease, otherwise there's no structure. And so I've done a lot of roommate situations like that, especially when I was living up in Boston, and it always came down to that lease agreement. How were you doing as far as and did you implement like a roommate agreement for personal hygiene? Like hey, no dishes in the sink, you know, if you put it in the sink, you wash it that same day? Did you implement stuff like that to help with the living?
Speaker 3:Yeah, yeah, I did implement stuff like that. So during the tours that was like one of the things I kind of went over with the tenants and then after they kind of moved in individually, like I went over it. But one thing I haven't done is like sit both of them down as like a group and kind of like go over it together. So I haven't done that. But I really haven't done that only because they really haven't given me an issue as far as, like you know, dishes being piled up in the sink or the bathroom being clean, like they really just keep everything clean. So as far as, like that, it's been like calm, you know, and smooth.
Speaker 3:I'm not going to say the sink is empty all the time, but it's never like a pile of dishes and it never stays there for too long. So you know I'm not tripping about that. So on that aspect, yeah, everything is cool. Everybody wants their own business. One of the guys, one of the guys they don't even really stay there, like that, I don't know. He comes for like two seconds and then leaves out, but he pays.
Speaker 2:So I'm not tripping. Those are the best tenants, especially in the house hack situation, and so let me ask you this how does it feel having it rented out, and is it covering most of the mortgage, if not all the mortgage?
Speaker 3:Yeah, yeah, so it's actually working out really well. So one person I have, one room is. So in total I'm getting $1,400 a month, but my mortgage is $1,700. So essentially I'm paying like $300 a month right now. I mean, I'll put that in low key quotations because essentially, how I'm saving up for like the duplex, I'm really just taking all that rental income and just putting it away to like a money market saving. So I'm still continuing to kind of pay the mortgage myself, but like cause you know, all that rent was kind of going into savings, cause I kind of need that to get my next one. So I don't know, it could be a break, but not really If that makes sense.
Speaker 2:It's because you're looking to get bigger and continue growing. But that was one of the hacks that I realized, too when I started house hacking back in Louisville in 2016 was I went from paying twelve hundred dollars a month in rent in Kentucky to now paying zero and really just saving all that money for the next deal. So I always look at savings as a win as well. If you were to go, try to rent a three bed, two bath in the Metro of Atlanta minimum minimum you're looking at like two grand minimum and that's like on the outskirts, right, it can go as high as you know 2,500, three grand and maybe a little bit higher, depending on where you go and so the fact that you can have only $300 out of pocket on a monthly basis and be able to save the rest is a huge win, and it allows you the flexibility to again move that rent your room out and then go ahead and buy another property when you come into mom.
Speaker 3:Yeah, yeah, I agree, I agree, um, it's, it's. Cool though I'm I'm not gonna lie like there's some things I do need to work on, like as far as like my spending wise, I go like because sometimes, you know, summertime too I still like I could spend like a little bit of money, but that's something I can kind of like touch up on because I do be like I got certain goals I gotta reach, so I can't, you know, I gotta budget myself. But, um, other than that, like the extra money is cool, the extra money it is, it is cool. Yeah, I don't want to look at it as like extra money in my head.
Speaker 2:It's one where it's like, hey, you're going to put that money to work because you know it could have went to rent, but you're well ahead of the curve. One of the things that I did early on in my career and I forget where I got this from probably a podcast or something but I always looked at my gross income, not the net. I just looked at the gross income that I get each year and 25% of that was the max I was willing to pay out of pocket for rent or a mortgage, and so the way I define that is is what am I actually paying out of pocket, right? So if I'm house hacking and I can get one of the units to cover 90% of the mortgage, then I can go up to 25% of my income for the rest of that mortgage, and it helped me get more and more properties. And when you look at like spending money on on actually living, you do have to do that too, cause there's only certain seasons in life that you'll take trips of a certain kind or you'll go do like, for example, in 2020, every year, I take a trip for my B day, and in 2020, a lot of people were nervous about it. My B-Day is in October and a lot of people were nervous because of COVID and things of that nature. But I said you know what, forget it, I'm still going to go.
Speaker 2:Ended up going to Dubai and ended up doing skydiving, which was pretty incredible. So it was like an unforgettable experience. But looking back, now I'm moving into a phase where I'm starting a family and things of that nature. I don't know that I'd go skydiving anytime soon, right? It's just a different phase of life, like that was, you know, five years ago, and things have changed since then and so you got to enjoy life in the seasons that you're in as well. But what you're doing, which I love, is you're taking one of the largest expenses. Most people are paying upwards of 50% of their income for where they live and you've reduced that significantly. And if you do that, man, and you put that money to use, my goodness, you're well ahead of the curve.
Speaker 3:I don't know, sometimes I'm a little bit too hard on myself. I think. I don't know. I don't think I'm supposed to be good at this ASAP, but I don't know. It's just about having faith.
Speaker 2:Nia, I'm not going to lie, that's it. And honestly, it's one of those things where it's hard to see it until you've gone through a full cycle. The thing that keeps me going is I've been through a full cycle. I bought that first triplex. I sold it five years later and saw how much value I got from it and the cashflow. And the cool thing about real estate is it just gets better over time.
Speaker 2:And the way that you're doing it, it's almost more passive, like you have to have somewhere to live anyway, and so you're living and you're allowing your living space to generate income for you. And, man, like I'm actually sitting in the back unit because it's empty today, somebody checks in for this weekend in the back unit of my duplex, so I'm house hacking right now. Right, I got a five bed, four and a half bath in the back. That's a luxury short term rental. Where I'm sitting is at the dining area where we put like kind of like a banquette area over here and um, and this back unit brings in uh enough to cover about 80% of the mortgage on a monthly basis, and then we pay for the rest and live in the front, and so there's many ways that you can continue doing this as you continue to level up, but what you're doing is amazing. You got in for the lowest amount that you can get in and now you're saving up to do the next one.
Speaker 3:Yeah, yeah, for sure I'm just.
Speaker 3:It's just a couple of things that I'm worried about as far as like transitioning from my first one to my second one, because I know I guess to get the second one I have to show that I have a lease in place that's covering the mortgage, so the lease that I have right now hopefully they renew.
Speaker 3:So I could just like ease myself up with kind of like the turnaround time of looking for another tenant. I don't know like say if I have, I don't know say if I have enough money but my place is like vacant. Or say if even just managing the other property when I do get the second one, because I don't know, I just I think I just have to like write out a plan like legit, like to see how I'm going to go to my first one and my second one and how I'm going to manage the first one when I do get my second one, and hopefully it's not a headache and a hassle and nothing is like really vacant to the point where I'm paying for my second one and my first one together, cause that is kind of what I don't want, cause if it's vacant.
Speaker 3:I'm absolutely that's. That's just on me, but I'm not sure, like I'm not sure, if you like kind of remember how my house looks, cause I know you like you have plenty of clients and stuff like that.
Speaker 2:So no, I do. I remember kind of the split up and and I do love that kitchen and it's one of those where, when you're looking at what you have, there's two ways to look at it. One is right now you have your first place, you're living there, you're renting the other two out and you could just move out and rent your room out as well and have those three kind of continue, and the fact that you've already lived with two people there is going to make it easier for those guys to transition. Another roommate I did the same. I didn't own the place, but I did the same. I didn't own the place, but I did the same when I left Philly.
Speaker 2:Right when I was in Philly I lived with two roommates and then when I moved to Chicago, I just sublet my portion to somebody else and had that person introduce themselves to the other people, made sure everybody was good with that person and then moved them in and kept going. That's one way. The other way is I believe you furnished a bit of these rooms right. Didn't you furnish, like some of the living room areas and maybe the bedrooms?
Speaker 3:Yeah, Right now. Everything is furnished right now.
Speaker 2:And that's your furniture. Yes, you could potentially turn it into a short term rental as well. Like this is a house where, if the mortgage is right around $1,700, maybe $1,800, you don't have to do much to make that mortgage as a short term rental or a furnished rental. You don't have to do much to make that mortgage as a short-term rental or furnished rental. And then another option is you could potentially rent it out to one group. You don't have to necessarily be the one that's managing the room by room.
Speaker 2:The reason you're doing it now is because you live there. You want to vet those people and make sure no-transcript in-law suite. And then now they purchased a duplex and they're going to move into one of the units and continue to do the same thing and all they're doing is turning their previous unit into a rental. So I'd argue that's honestly a little bit easier once you already have the first property to move into the next one, because you've put some of the systems in place that you're going to need for the next one and you've learned a lot of lessons of how to get better. Right For sure.
Speaker 3:And my next one. I am looking to buy a duplex, but as far as like the multifamily side of things in Georgia I know it's like limited amount of like, how much is like kind of going around, so I don't know. Hopefully I catch one, because I don't know. I just want to scale up. I just want to make use of the residential, you know the conventional loans, because I know you only get so much and there's no difference between if it's a single family versus a duplex, triplex and quad. So before I become not eligible for those anymore anymore, I just want to utilize it as much as possible instead of just doing, you know, single family, another single family, another one. All right, I got the single family here I learned I'm pretty sure it's probably the same as managing a duplex. So might as well get a duplex and then just kind of scale up from there. So I don't know, let's see how that goes.
Speaker 2:Way to uh to kind of make it go even faster. Right, so you have the single. You know how to manage that one, and so if you get a duplex for the next one now, you're doubling the number of units you have, essentially, and it's not much harder than what you're doing right now, like you're literally doing probably the hardest house hack and the most uncomfortable house hack. If you move into a duplex and you have another unit that you're renting out, my goodness, you're going to be off to the races.
Speaker 3:Yeah, I agree too, because even while doing the tours, because I was having a decent amount of traffic that was coming in when I was kind of marketing my first property, and as far as other people that would reach out, they'll either looking for a whole kind of apartment or, you know, just things of that sort. So I just know it would get rented out quick if I was probably to get a duplex and if somebody was to have their own space.
Speaker 2:Come on now and welcoming my guy back to the Financial Freedom Mastermind Podcast Desmond. What is up, man? How you been? And of course, he has technical difficulties. Desmond, we can't hear you. What's going on? He's working on it. Desmond is one of the individuals that has gotten a couple of those small multi-families and figured out how to make it work, and so definitely a good person to connect with. But, desmond, can you hear us? Can you hear me now?
Speaker 4:we can hear you now. All right, cool. What's up, man? How are you doing? Good to see you. I'm super good how you been man did you cut your hair. Yeah, man, I. I cut my hair a bit short. I'm rocking the fade now. You're trying to be like me. Man, soon it's gonna be.
Speaker 2:I was just gonna say I'm a few guards away from where you're at. No, that's fair. I was just with aj, like uh, last week and you remember aj had like the huge, you know, like bread dreads, everything. It's gone. I'm like what the heck? What, what is everybody?
Speaker 4:doing now man? No man. I. I saw him on IG and I know for me I was trying to step into the grown and sexy area. I don't know about AJ, but I hope you enjoy it.
Speaker 2:Hey, he's not here to defend himself, so I'm going to wait till he get on. That's fair. That's fair. How was everything coming with the properties? How's everything coming even outside of that? What's going on with you?
Speaker 4:Yeah, man, things have been up and down. It's been great in terms of the properties for sure. So I'd say at this point things are stabilized 100%. I'd say for the most part I'm able to run the BNBs, run the long terms, mostly autonomously. I'm actually sitting here in Italy right now. I don't know if you can see, you can't see. I've got some canal behind me. It's a little dark, but I'm in Venice right now.
Speaker 2:I love Venice.
Speaker 4:It's amazing, hey, dude, it's so nice. And then we were in Milan yesterday or a couple of days ago and then we're heading to Bologna tomorrow, so doing like an italy trip, um, this week. We were in switzerland last week, so kind of come on now. Yeah, bro, so it's nice and I'll say house hacking has, you know, in part, allowed me to do that. So, huge advocate of house hacking, I know we were, you know, talking about that a little bit before. So, yeah, man, it's been great, it's been awesome, it's been a wild ride.
Speaker 4:You know, I had the flood last year. So that was like crazy. The first insurance claim, right, I think I did over a little bit over 60K in renovations. But, man, like thank God for that flood policy. And it's so funny too, like when we were doing the clothes. It's like, man, like this flood problem like another bill, and, dude, when that, when hurricane Helene came through, I was like thank God that I did have that. So, yeah, it's been interesting. I got laid off a couple of months ago, so that's been an interesting ride, yeah, um. So I don't know if you heard the news a lot of tech layoffs and whatnot.
Speaker 2:The AI stuff is like I know some people right now where it's very difficult to even get back into a different role because they're replacing a lot, but so it affected you.
Speaker 4:Yeah, yeah, so it did, and I got laid off, like literally in June, so a couple of months ago now. I was going on six years at Microsoft. But I will say, though, like the one thing, the one word I keep coming back to out of all of this is gratitude and just being grateful for some of the decisions that I made in 2022. And then, you know, in 2024, with the second purchase and having that, you know, give me some extended runway now to where I don't necessarily have to go and, you know, just jump back into the job market and worry about, like you know, some of the things that some of my peers you know are worrying about, and it's tough, right, like I'm not the only one that was affected, right, I have multiple friends and whatnot that were affected as well.
Speaker 4:So I think I just, man, I'm like so grateful that just got into house hacking, got into real estate man, and it's crazy just because, like I think, for such a long time, like I felt like being in a nine to five and having that sort of security was like what I had looked to gain for like a lot of part of my life and, like you know, going to college and whatnot. And now not having that, I'm like man, like thank God, I like at least have like this on the side. So yeah, man, it's been my saving grace, it's been awesome, like I'm not too stressed. You know technically necessarily about it, I'm in Italy, so like, come, like, come on, it's hard, it's hard to be stressed in venice, man, honestly, honestly.
Speaker 2:So, yeah, it's been interesting. That's why I had mentioned it's kind of been a wild ride, but yeah, it's been fun. No, desmond, first and foremost, I know you're gonna land on all both your feet and be a-okay, but I love the fact that you were almost running maniacally to get the properties that you do have so that you can have that that setup. That was similar to what I was doing. I was working at Baxter. I was happy with the job, right, but I was like you know what, just in case, one day my number's called let me build these properties up and you'd be surprised, just like, how little you actually need when you think about it, like if you're covering your living expenses, that's majority of the cost. The rest of this stuff is more like you're spending money to do work, you know. So I'm pumped for you that you were able to do that piece and you're spot on.
Speaker 2:I think what's happening with this AI boom? It's being talked about, but not enough. Like jobs are not getting replaced. You know even the latest jobs report that they had to write down a whole bunch of jobs for the previous months because they messed the report up. It's real. Like I know people right now with MBAs, multiple master's degrees, and they're not able to get hired at a different role.
Speaker 2:But the thing that this does give you and I know that you're a super sharp guy and you've already done some things on the side from an entrepreneurial standpoint is it gives you room to think, and I know on this trip, you're probably writing down notes, or hope you're writing down notes. I don't know if you write down goals, but I hope you're writing that stuff down but it gives you some time to think about hey, what do you actually want to do next? Do you want to start something on the side? Do you want to maybe go into get a license become a real something of that nature? Right, there's things that you can do, and so have you started thinking through that?
Speaker 4:Yeah, absolutely, and like in a weird way, it's kind of like been a blessing because, you know, I don't think I ever could have voluntarily walked away from a job like that, or at least it would have been a lot tougher to do so, right, and you know, as compared to being kind of kicked out, so definitely harder to walk away from something like that.
Speaker 4:They call it the golden handcuffs, I think for a reason. And yeah, it's been a very kind of interesting, in a way weird, but you know, just a blessing in a sense of having that pause and also again having some of that runway to be able to take a step back, say, ok, you know I've been kind of on this path for, you know, the last five or six years, even before that, you know, in college studying a degree geared toward the job that I was in, and now I'm like, yeah, well, take a step back, what do I really want to do? And also it's really interesting too, just in the time that we're in, right. So, just for context of folks who are listening, or even on the call, I was doing software engineering. Still consider myself to software engineer, but software engineering is a very interesting spot right now, right, where the past decade or two, it's like that was a very you know, touted and sought after job job, whereas now it's extremely under question right where and I mean not just software engineering, right, a lot of, a lot of other jobs, you know, with that as well. But yeah, I'm just, uh, really kind of taking a step back, really trying to understand where do I want to go from here, right, and it's weird too, like man in a spot where I didn't think I would be here before, I didn't think I'd have multiple properties, I didn't think I would have been working at Microsoft or whatever.
Speaker 4:So I'm really trying to understand, like, what's the next best step that makes sense, like that's always what I'm kind of looking at and trying to focus on, and I don't know if it's jumping back into big tech. I will say there are some very you know, lucrative and shiny AI roles out there around building AI products and whatnot. But you know, with that being able to be taken away from me, right, I'm not sure that I want to continue to just bet the farm on that, right, and I've already had to, already had that kind of mindset in my head right, kind of like you were saying like let me just just in case get some stuff on the side, just in case you know, let me just just in case get some stuff on the side, just in case you know. This kind of goes south, right.
Speaker 4:And I mean again like I'm in a very blessed and privileged position to where I'm not missing any meals, I'm not getting evicted, thank God. I'm evicting myself, so I do that to me, right. But yeah, so really just trying to take a step back to understand what do I want to go from here? And like I do think it'll tech will be blended in with that. I don't know if I'll jump 100 back into a nine to five. I don't know that I'll take the realtor exam, you know, and join a home only that might be an option we want you go ahead.
Speaker 2:Hey, well, that'll be a longer conversation, uh yeah, that that's something we'll talk about.
Speaker 4:Yeah, so really taking a step back to travel, enjoy life a little bit, which I think, especially being in America right, being in such a grind culture and I think, you know, being surrounded by high achievers like yourself, like AJ, like other folks that I know, it can kind of be weird to be in a place like this, but I'm taking it with gratitude, I'm taking it one step at a time and I think that real estate tech, entrepreneurship, in some way will be blended into the next step. So, who knows, we'll see.
Speaker 2:Come on now. I love this, and when you do get back and take your time, I know you're having some fun. When you do get back, hit me up. I'd love to go grab brunch, coffee, whatever, and hang out, because the cool thing about now being on your own is you do have that time to think. You have that time to take on new opportunities.
Speaker 2:And one of the things I did before making that jump from the W-2 was really write down the things that I liked in that W-2. And for me, I like sales, right, I like sales and I liked investing in real estate. And one of the things I didn't have when I moved down to the metro of Atlanta and the new role I was in was actually being able to get out in the field and do that one-on-one with the customers, with the clients, things of that nature, and I missed that. You know, one-on-one with the customers, with the clients, things of that nature, and I missed that. And so moving into real estate was part of leaning into my quote-unquote unique ability and something I really enjoyed and building it up and then seeing that there could be other adjacencies there, and so I have no doubt that you're going to see and find your way from that standpoint. And then you're spot on.
Speaker 2:You look at what's going on with AI right now and with all these different industries. I mean, you know, as you know, we just gave birth to our son, like about a month ago, and so when you look at how quickly it's changed over two years, I can't imagine what's going to look like a decade or 15 years from now, like we're all going to have to figure out something, and so, yeah, it's better to get an early start in it. In my mind and I love the fact that you're taking some time away I did the same thing. I took a trip to Costa Rica for a couple of weeks and it was like all right, this is, it's good, it's different when you can wake up and you don't constantly think about hey, I got to check this email.
Speaker 4:I got to do that, this, that and the other. Like you can focus on just being productive, in whatever manner that means. Yeah, absolutely, and it's weird, almost right, waking up and like for so long having that kind of thing in front of you, that you go and check your email. Or, for me, check teams right, see what's going on. Um also, congratulations, thank you, huge come on now, you guys don't being a new dad thank you, thank you, yeah, man, it it's.
Speaker 4:It's weird, but, yeah, you know, taking it one step at a time and I think also too like for a long time I've been looking for kind of the next thing and, like you know, even when it one step at a time and I think also too like for a long time I've been looking for kind of the next thing and, like you know, even when I got the first property, I was like already thinking about the second. I was already looking across the street like, hmm, you know, that house kind of looks nice. So, yeah, I definitely, no matter what in the future, want to continue to acquire real estate, cause I think, especially in the time that we're in in the future, want to continue to acquire real estate Because I think, especially in the time that we're in in seeing the shift that AI is bringing and how it's, you know, causing a threat of so many jobs, I think one thing that I've kind of realized in having some of the time to think, one thing that's not going away, I feel like, is ownership right and then also in tied in with that, like land right and kind of owning land Right. So, you know, as we go on the land. The possibility of owning land, in my opinion, is only going to get, you know, lesser and less, less and less possible Right.
Speaker 4:As you know, someone has to own that right. Someone is behind you know, the open AIs and the anthropics and the SSI super intelligence, whatever all the different companies right Racing to develop these large language models. So, yeah, I think I really want to, even though, you know, eventually I might in some nine to five role, who knows? I don't want to lose sight of the fact that I feel like ownership is key Land, real estate, all of that. I still want to continue to combine that in my strategy. So, yeah, let's definitely talk when I get back.
Speaker 2:A hundred percent agree, done and done, and it's one of those where I've started to look a lot more at the macro environment and listen to like a lot of different podcasts just about the economy and the world in general, and especially with the tariffs that have been introduced and are getting set into place right now, one is making the cost to build homes a lot more expensive, and so we've been seeing the build volumes go down. There's still some of the supply hitting the market that was starting to get built back in, like 2022 and things of that nature, but when you kind of zoom out and you look at the next five years, we're still going to have a lack of housing again when it starts to hit that 2027, 2028 timeframe, and so I'm all about trying to stack up as many houses as I can. As you know, I'm constantly looking. Now, this year I'm kind of out of it until early next year, where I got to wait till my guy can hold his head. But this year I'm kind of out of it until early next year I got to wait till my guy can hold his head, but once he can hold his head, which is about the six-month mark, we right back out there.
Speaker 2:I want to get some more, especially heading into World Cup season. And, claudia, this is kind of good for you too. You can see that Desmond started in this path not too far before you, and he's continued down that way and been able to now start to reap some of those benefits and rewards. And so, for your record, desmond Claudia is doing a house hack right now in a single family with roommates, and her next step is to go after that duplex, maybe a triplex, and try to make it happen from there.
Speaker 3:Awesome. Yeah, yes, sir, let's speak it into existence. Yeah, I'm going to Venice. It's all good, I'll be all right. Hopefully I'll be like that.
Speaker 2:Hey, come on now, Nothing wrong with it, and while I have you two, I'm going to be. We're going to be sending out messages and things here soon, but we're doing another event. This will be just a fun event. Get your pickleball ready. We're running out of place for end of September. Naz is going to have all the details and send it out, but we're going to get like a pickleball tournament going uh, a cabo home sponsored, so excited to see you guys there if you're in town. That'd be pretty fun. That's something I picked up a little while ago and I've had fun playing, so we're gonna get there yeah I'll be there you gotta redeem yourself
Speaker 2:from the air hockey. I don't know what happened over there. I was like yeah that's good, you're beat by Deanna. Hold up what's going on.
Speaker 4:I was wore out man. I already had a couple wins under my belt, you know.
Speaker 2:Y'all didn't give me a water break. You know, this is true, this is true. We didn't set it up the right way. I know that was a little like hey, this ain't a tournament at all.
Speaker 3:Yeah, I've never played pickleball before. What is it in comparison to, like handball or something? So, have you played tennis before? Yeah, well, something like yeah, I have. I don't know what tennis is.
Speaker 2:Pickleball is like a cross between tennis and ping pong. It's not quite as you can stand in the same spot as ping pong, but it's not running a whole court like tennis and it's a lot easier to pick up than tennis. Tennis is kind of hard Pick a ball not so much. It's kind of easy to hit the thing and it's fun and you play in pairs, so it's not just all you trying to figure it out.
Speaker 3:Yeah, I'm cool, I'm down with that. I'm pretty athletic, so you know, I think I could get down.
Speaker 4:Come on Same, come on same.
Speaker 4:I've never played either, but I am pretty competitive so I'm gonna start watching some videos strategy down now, you know, trying to get the handhold of the, the racket or whatever it's called, uh, but no, so I will say I'm, I will try to be there, I'm gonna be back in two weeks, but I do want to ask you one question, right, kind of um.
Speaker 4:Going back to what you said about you know sort of facetiously about like the real estate exam and stuff, but like I'm curious to hear your opinion on what do you think it's like, kind of getting into the market now as a new real estate agent?
Speaker 4:Right, and this is, you know, more of a broad question, for even you know, other potential agents or future agents listening right Of you know there was the big court case right around the change in, at least I think, the transparency of the commission and at least that being much more up for debate than it was right, I think in general everything is up for debate in the contract, but now it's a lot more apparent that that commission rate is up for debate.
Speaker 4:And then also to just you know in the market that we're in in a, I think, 30 year low of home buying in a, you know, builders like deficit, if you'll call it that right. So what is that like now Right, and how is your team kind of adapting to that? How are new agents coming into your team handling that? I know you guys are always continuing to grow and like what is that like now? Because, I'm not gonna lie, that thought has like crossed my mind right, especially as it relates to like being an investor friendly realtor, like even a house hack friendly realtor, right, even going more niche. So, yeah, curious to hear your opinion.
Speaker 2:Yeah. So I love this question and we actually just welcomed another member to our team today. I met with him today. We had the interview. He's a flipper and just got his license and wants to go and help other investors, so that was pretty cool. And so what I'd say is you're right, we're in a 30 year low for transaction volume, and last year was another low for transaction volume. So this is just continuing that trend. At some point it will reverse and start to go back up, but that's not this year. Right now it's really low.
Speaker 2:The thing that you have to be now is a specialist With everything that they did with NAR, that lawsuit last year or two years ago I'm blanking on it, I think it was two years ago. That lawsuit that hit where now there has to be a lot more of the quote unquote transparency with where the commissions are coming from. It's really separated, it's almost eliminated the middle, if that makes any sense. You either got to be a top tier agent or you're going to be just scraping at the bottom, and so when you're looking at the commission discussion, this is something that you have to be firm on what you believe the value that you're bringing is. Otherwise you could end up doing stuff for free and a lot of the stuff you do do for free anyway for a lot of individuals, where you're driving around checking out different properties and things of that nature, what I'd say is, if you're a solo agent, you've got to come in with a strong strategy and you need to have some sort of background whether it be in sales or actually in real estate, like an investor that's going to help you along, and you want to come with a niche. Before or back in the day, people would just say, hey, I'm a realtor, and people were excited about oh yeah, my brother's a realtor, let me hire that person Now. You need to have a specialty, otherwise people won't remember you Right. And so we always had the specialty of being the investor friendly realtors. And so what that's led for our team is that, while everybody's saying, hey, transaction volumes down, this is one of the slowest years we've actually continued to increase every year. So this year we're on track to close roughly 10 million more in transacted volume than we did last year, and last year we closed more than we did in 2023. And so we're still accelerating and doing bigger and bigger deals, but it's because we niched down into that investor market and we look at being an investor.
Speaker 2:This is one of the best times to buy right. You can negotiate crazy deals. We had a property it's going to be a luxury short-term rental where it was originally listed for 1.8 million in October. It's come down, come down. Originally listed for 1.8 million in October, it's come down, come down, come down. Right now it's listed for 1.6. We put in an offer at 1.3 net it was credits, things of that nature, but it was 1.3 net. They came back and we negotiated it to 1.45, but this home's going to appraise for at least minimum 1.65, 1.7, and we could potentially get it for 1.45.
Speaker 2:And so this is the time period to go out there and really make deals happen from an investor standpoint, and because we have that niche, a lot of leads come our way. And another thing about being investor friendly, as you know, is most people only buy a property once every seven years, and that's 80% of the market. The 20% of us that are investors are buying a lot more rapidly and we may get three, four properties in that same seven year period, and so when you look at the lifetime of partnering with investors, it's actually a lot more lucrative as an as an agent than going out there and working with regular people. The only difference is you have to be skilled, like you got to actually know, and the fact that you are an investor and have done this multiple times. You know way more about real estate than half the realtors out there.
Speaker 4:Yeah, no, absolutely, and that's that's, yes, very interesting, Very interesting to hear, and I definitely think that makes sense in terms of niching down and I feel like that, you know, goes in general almost for like a service that you're offering Right, like when times get hard, like when you have a specific niche or a specific lane that you're in, you know, especially, you know specifically with real estate and you tailoring to investors. Investors are typically always looking to buy right. I always think about the, you know, famous Warren Buffett quote, right, where you know when people get you know, I don't know I'm probably going to butcher it, right, but when people get scared, right, or that's when you start to buy and then when people really start to get greedy, that's when you start to pull back. I butchered that, you know a bit, but that's the gist of it and I think that's super interesting and I definitely feel like that makes a lot of sense. I'm not surprised at all to hear that you guys are continuing to grow, especially with you at the forefront.
Speaker 4:Also curious to hear, too, about how the storage units and the apartment complex yeah, townhomes slash super like. It's a huge deal, right, I think, in terms of like coming from buying foreign units or a couple of properties here and there, like moving up to a deal like that. I feel like that's very big. So I'm really curious to hear how that's going, how that's been for you. And then also I know you're also doing stuff in Atlanta as well. You know with the flips and also you know the you know different house tax that you and your wife are doing. So just curious to hear about how that's going and how it.
Speaker 2:Man, okay, so storage going amazing, like this thing. It definitely took longer to build than you would think and all you got to do to know what it's like to go into commercial property is just add a zero to everything you're doing right now. Right, so you know the earnest money. Add a zero, okay. Add a zero to all the inspections you got to do. It's like, okay, this is a lot of money going out. And you blink and it's like, okay, that was like 200K just gone, like quickly.
Speaker 2:But that storage piece, we always had it set up in a way that if we could get to about 50% occupancy, that's when it covers itself, and then anything above that starts to be gravy. And so we hit that 50% mark back in May, which is awesome. It took a little while. We had to figure some things out. I'm definitely going to get better now and it's all a learning curve, like the same way that Claudia is learning like, hey, how do I put together the lease agreements for these first couple of tenants? And the same way you learn like, hey, how do I run an active short-term rental? The first couple of times we had to learn how to do the storage, but now we've got a VA in place who's answering all the phone calls and knows how to do his thing, and we have a maintenance guy that's the boots on the ground to go cut locks, do auctions if need be, and help people in person. And so now we're at 58% occupied and now we're going to start ramping up the marketing and I believe we're going to get to 70% by the end of Q3, because we have one signage actually going up. We haven't had signage this whole time because we've been fighting with the city to get that piece and they finally approved that piece and we have a partner that's going to help with that. And two, we're going back to doing the postcards, which worked really well. So storage is great.
Speaker 2:Townhomes not so much right, this one has been just dragging on right, and so originally we had the plan approved to build 105 townhomes and once we finished the storage, it's a semi-residential area and this is the first time they've had some bigger things out there, and so neighbors are complaining about just oh, my goodness, there's dirt that's draining from here to the street all this stuff. So it's random things, and so people will show up to the town halls and just similar to how people show up to Airbnb town halls and they're like, oh not, in my backyard Same thing for what we're trying to do. And so, long story short, they came back to say, hey, really, you can only do 88 townhome units because if we look at this little, you know, whatever you need to have X amount of green space, and at 88 townhomes it doesn't make sense. Like extra 20 or so is what we need to cash flow. And so now we're trying to rethink this thing and it's been a fight, a bit of a fight, to try and get that townhome piece. So now we've got to figure out if we can get them back up to 105, or maybe we need to switch it over to an apartment complex, which there's apartment complexes. We can get to over 100 there. It's just not as nice and you have to differentiate it somehow, and so that's on pause right now.
Speaker 2:The investments in Atlanta have been awesome, right, like I love. That's my bread and butter. Continuing to do house hacks, continuing to do small multifamily, like that's never gonna go out of style, and if I could build out my whole portfolio out here with that, I would, and I'm going to continue doing that right, I think investing in your backyard is one of the best things you can do because you can see the progress and have a little bit more of a less risk, because you know kind of everything that's going on around the city because you live here. But that's the update. Storage great Townhomes not so much. We're still trying to figure it out and Atlanta is always going to be the bread and butter.
Speaker 4:Yeah, shout out to atlanta. And I know I think we're getting close to time, right, it's still 45 minutes. You got the last before. Yeah, because I want to ask the question of like, because, you know, getting into commercial right, I think that's like the next step up from coming out of residential right, it's kind of like taking off the training wheels, like, all right, we're really doing this thing and even residential can be a, you know, big thing in itself.
Speaker 4:But can you talk a little bit more about the commercial and like in terms of like the underwriting and, like you said, like you needed, like you know, 20 more properties to like make it work. So, like, is it you I think it's your realtor that you're working with right, like are you guys running those numbers and really like doing the kind of you know deal analysis and like because, like you said, right, like it's a lot of zeros, right, when it comes to a deal like this, so it's not even a, you know, four unit multifamily can be a fair number of zeros, particularly in Atlanta, fair number of zeros, particularly in Atlanta. So, you know, can you talk about that a bit and how I guess detailed you had to get when doing that analysis and like I think, you might've even had investors. I'm not exactly sure.
Speaker 2:Yeah.
Speaker 4:In a sense like you're running a syndication and now you have these people that you have to answer to. So that doesn't sound like a walk in the park necessarily. So I'm really interested to hear, like how you guys have, like you know, drilled down on those numbers, like solidify them, especially, again, it not necessarily being your backyard. I know you have units in Louisville, but can you talk a bit more about that, cause I'm very interested in the commercial space. I you're either on BiggerPockets or on the market, which I think you listen to too. That's where the money is made, right. So can you talk about that and just how that's?
Speaker 2:been. I went into commercial was when I bought 12 units back in 2018 or 2019 in Louisville, kentucky, and that was just a 12 unit deal. It was three separate four plexes, but it was all deeded together so I bought all of it. And that was when I made my first mistake in commercial, which I never made again, which is the underwriting. Underwriting commercial deals with lending is completely different.
Speaker 2:Up to that point, I had bought a lot of duplexes, triplexes, quadplexes. I'm like, yeah, 20% down, it's going to look like this interest rate, this is great. You're locked in for 30 years. Commercial is nothing like that, right. And so commercial is more like, hey, you're going to get a loan that's going to give you a five-year, and then you have a balloon and maybe it's amortized over 20 years instead of 30, right, and so that's pretty typical for commercial, and that 20-year amortization versus 30 can change your numbers drastically. You can go from cash flowing to like negative, and so that first 12 unit was a rude awakening. Once we got into the numbers, I was like, okay, it still worked, but not nearly as good as I thought it was going to be when I was first looking at it, because that's the first major thing. And so if you're going to go into commercial, I've had a couple of clients where they're like, hey, I'm looking at the six unit property and then also this four unit. I'm like, dude, it doesn't even make sense to go after a six unit. You should go do the four unit right, because the four unit is going to get going to partner with a local or small bank on whatever project you're doing, and they're running their numbers as well. They don't want to lend money to a project that they believe is going to fill. They want to make sure that you can cover the mortgage and some with that property and they're not looking necessarily at your income. So the cool thing about commercial is it's no longer you that has to qualify like, hey, okay, desmond's going to pay back this house. It's all about the property itself and your game plan for executing and how much money that property can bring in. And so now that it's not just you, you can bring in partners to have other pieces. You can bring in partners that can help with any type of rehab. You can bring in partners that want to just invest dollars, and so that's something that we were able to do for the townhome piece.
Speaker 2:Now, the good thing with the townhomes is we got the commitments for the money, but we did not take the money until we wanted to break ground, and so we still have some of the parties committed. There's a few people that dropped out and invested in something else because this has taken a long time, but we still have the feelers out there for when we do want to break ground on that. But we purposely didn't take the money, we just set it all up until we were able to break ground on that. That's one way to avoid any issues, and then we just keep people updated on a consistent basis and just let them know what's going on, like the real of what's going on. Hey, this thing popped up. We didn't feel comfortable moving forward at 88 units because the numbers don't work, and so now we're trying to reconfigure it.
Speaker 2:With the storage it was a little bit different. The storage only cost about 2.2 million to build, and we got 80% of that financing from the bank, and so my realtor partner and I were able to go ahead and just knock that piece out, which is amazing. And to have less people in the deal is actually better, because it helps you move a little more quickly, more agile and you have a bit more control. The townhome project is something that it just costs a lot more. It's 20 million to build. I don't have that 20 million sitting somewhere, right, we got to go get from the bank, go get from partners and make that piece happen, but only if it makes sense. And so when you look at the commercial versus the small multis, I would say if you can do a small multi every single year like a duplex, triplex, quadplex, I would start with that on the portfolio and then look to commercial.
Speaker 2:Now that we've stabilized the storage and I see it ramping up, ramping up, ramping up, I would love to do another one of those in the Metro of Atlanta. I think it would be amazing, like now I know all the systems and all the mistakes that we made and how we can get it ramped up a lot quicker. But that learning curve is a bit steeper. So I'd recommend partnering with somebody that hopefully has experience in that, so it's not the blind leading the blind, or at least partner with somebody, like I did, that knows that area like the back of their hand and can get some things through, because Monica has been invaluable out in Taylorsville because she literally helped sell just about everything in Taylorsville. So she knows the head of commerce and the people that we can go to to get things through.
Speaker 4:Yeah, that's big, that's big and I think that's a very interesting point too.
Speaker 4:Right, comparing like the six units, like the four unit, because I kind of feel like that, you know, probably is typically the case, right, like when you're trying to step into a commercial property that's just slightly above residential but isn't, you know, something as big as like a hundred or even like a 20 or like a 12, right, it might not make that much sense.
Speaker 4:And I'm curious to hear do you think that's the case even for investor type of small multifamily, or does that typically only work as an owner-occupy? Because that was a huge help and blessing for me being able to enter into that owner-occupy financing and put those very low down payments down. I'm really, at this point, a fan of having low money into the deal and kind of you know, putting, kind of I don't say betting the farm, but putting more of stake into the deal and, you know, being convinced that that's going to work out and cover itself, compared to me having to put half of the cost of the building down. So, does that make sense only really for owner-occupied? Does that make sense for investor-purchased multifamilies?
Speaker 4:Because, I'm not going to lie, that 20% down payment is something I kind of try to stay straight away from and stay away from that, compared to five percent or three and a half percent, is like a big difference, right, especially when you're talking about, you know, multiple zeros and hundreds of thousands of dollars.
Speaker 4:So, like, is there a certain unit count for? And I've kind of asked multiple questions and I'm not, you know, here to try to interview you, but I'm just so curious, you know, when'm not you know here to try to interview you, but I'm just so curious, you know, when we talk about you know the different deals you have going on. I think you know a lot of you know people that join the podcast and listen to the podcast, you know, see you as, like you know the next step or maybe the next few steps down the road, or like you know as sort of the blueprint of how it can be done. So I'm curious to hear, like, is there a certain unit count where, like, oh yeah, this definitely makes sense. Like you hit like 50 and it's like you know no matter what, go for that. Like you know obviously 50 is a lot, or maybe 12 or 20. So like, just how do you see that as we, you know, start to wrap up?
Speaker 2:Absolutely so. So to your point if you're going to buy like a small multifamily four your point if you're going to buy like a small multifamily four units or less and put 20% down, it should work out even better. Because now you've got more of a down payment in and typically when we're looking at properties, we're looking to hit that 0.8% rule for a long-term rental, at least in the Metro of Atlanta. And so that means that if you're buying a house for, say you know easy math 400,000, right, you want it to be able to rent for at least is this easy math 0.8% for 100,000, let's do that For 100,000, you want it to be able to rent for at least $800 per month, which is 0.8% of the purchase price. Same thing with multifamily. And so if you're putting down 20%, you're essentially hitting the 1% rule for what you have in the actual deal, if that makes any sense. You put down 20%, it's running for 0.8% of the total piece. So you're at 1%. It's going to cash flow as a long-term rental. So that's one piece.
Speaker 2:When it comes to going into more of that commercial space, it's all about just running the full numbers. You really have to run all the numbers on that there's not really a rule of thumb that you're looking for, because your finance is going to be different, your interest rate is going to be different, the term is going to be different. I'm always a fan of trying to get the longest term you can right, and so, like, for example, for the storage, we were able to get a construction loan and then refinance it into a 25-year fixed loan. Now that's almost un. You know, the fixed loan is a high interest rate, but we'll take it because we don't got to worry about fluctuations in the market and things of that nature. Like it's just set and it's over 25 years. I'd rather have 30, but typically it's 20 in the commercial world. So this is fine. So is there a set number that you need? I would say no, it really just depends on the deal. And then what I've been looking for more and more is the neighborhood itself. Like is this on the path of progress? Do I see other things happening around here? Is this unit going to stand the test of time and can I make money over time? Because, at the end of the day, cashflow was great, but what's going to make you wealthy is that home appreciating over time. And so I've like even the house I bought here, like the duplex.
Speaker 2:This is off the South side belt line. It does not make sense as a long-term rental right now. It will over time but right now not at all have to do a short-term rental in the back to accomplish what we're doing. And if we moved out next year we'll probably have to short-term rent the front, at least for the near term. But over time. We're in an awesome location. That value is going up and to the right. I can see all these different areas getting knocked down, rebuilt. They got a new food hall going in, like two blocks away. Literally it's getting finished up right now. The Beltline is going to be done in Q1. And so I'm like all right, this is going to be a great area to be in two, three years from now, once this thing is finished up. So let me buy that one.
Speaker 2:Egg, this thing is finished up, so let me buy that one. Eggnoged folks.
Speaker 2:You heard it here first Buy it in the Southside Beltline hey well, desmond, I appreciate you tuning in all the way from the other side of the world, in Venice. I hope that you guys have an awesome time. Please take plenty of pictures and we'll definitely link up when you come back. And, claudia, we appreciate you joining on this first open session back. We are going to be back consistently every Wednesday. And, guys, I hope you have an awesome rest of the week.
Speaker 4:You as well. Take it easy, Nii All right.
Speaker 3:Have a good one. Nii Nice meeting you, devin.
Speaker 1:Join us every Wednesday at 7 pm Eastern as we explore different types of investments that can fast track your path to financial independence.
