Ep. 10 - The Henry Washington Method: Why "Boring" Real Estate Wins

You can feel it in the market right now: deals are harder, financing is pickier, and the old “just buy anything that cash flows” advice keeps breaking in real life. We sit down with Henry Washington, co-host of the BiggerPockets Podcast, to get brutally practical about what still works for real estate investing when the easy mode is gone. If you’re starting out or trying to stabilize a growing rental portfolio, this conversation is built for you.

We talk about why keeping your corporate job longer can be a strategic weapon, not a lack of courage, because W-2 income makes you more bankable and helps you scale faster with the right local bank relationships. Henry breaks down how to approach lenders, what questions to ask about their balance sheet goals, and why “20% down” is often negotiable when you understand the game. Then we zoom in on the beginner path: learn what a good deal looks like in your exact market, pick one way to find deals, and ignore the noise until you’re actually putting properties under contract.

From there, we get into simple investing frameworks that remove emotion. Henry shares his flip profit rule, his non-negotiable standard of equity on day one, and how his rental strategy has evolved toward tax benefits and long-term appreciation. We also cover portfolio management with a red-yellow-green system, when to sell to pay off stronger assets, and how “exit strategy” can mean pivoting to midterm rentals instead of dumping a property. To wrap it up, we trade market-research tactics like tracking city planning agendas, chamber meetings, and even shareholder updates that hint at future growth.

If this helped you think clearer about your next deal, subscribe, share this with a friend, and leave a review so more investors can find the show.

Transcript

Welcome And Guest Introduction

SPEAKER_03 0:04

Welcome to the Real Mike Dooley Podcast. I'm Mike Dooley, nationally recognized broker, bringing you real conversations, real strategies, and real insights into today's real estate market. Thank you, thank you. We are here, the Real Mike Dooley show. We have an amazing guest in-house in Arkansas. Both of us are in Arkansas, which is cool, right? So I know we saw each other last was a race about game and they got a W and they keep getting more and more W's. They're they are doing well. Better than I thought they'd be. Yes, me too. Hopefully we keep getting W's in real estate. I know uh we like getting wins. I'm um closing on a flip myself too, you know. Just always, you know, just I think once you're open to the atmosphere, you know. Yeah, but I love all the audience and everyone to know who's in the house, you know. Uh I'm sure if they're living under a rock, they don't know who you are. Yeah. Let's kind of just give them a little brief. Who are you?

SPEAKER_01 0:56

Well, I'm not that cool, but uh Henry Washington. I am been investing since 2017. I bought my first rental property and really haven't changed much since then. I still do all the same things. I flip about 10 to 20 houses a year, depending on the year. Um, I've got a portfolio of about a hundred rental properties, probably a little less than that now because I've been selling some. Um but man, yeah, I just I tell people I'm just an old boring investor. I just buy single families and small multifamilies. I fix them up and then I either rent them out or I sell them.

SPEAKER_03 1:31

That's that's what Warren Buffett says. I'm just boring, right? You know, just make it happen and get your systems and and get it.

SPEAKER_01 1:37

Well, everybody's got all these, everybody's got all these, you know, fancy Smancy, cool new tactics and ideas and real estate, and that's cool. I just I just buy some houses and rent them or sell them, man.

SPEAKER_03 1:49

Which we've been in at about the same time. So I started Valentine's Day 2016 as a SIC real estate agent.

SPEAKER_02 1:55

Yeah.

SPEAKER_03 1:55

So same thing. Both came from corporate America, which I know a lot of our listeners are either thinking about getting in real estate or investing or doing, you know, something. Uh we're both came from corporate America, which I, you know, I've heard you many times. And for me too, I actually learned a ton there and I'm grateful for it. It's made me, I think, who I am today and probably speed me up, right? When you say same.

SPEAKER_01 2:16

Yeah. I mean, I enjoyed my job. Um, sure, I wanted to get myself to a place where I didn't have to have it, but I would have kept working. I only quit because I had to, but I'd stayed in my job.

When To Quit Your Day Job

SPEAKER_03 2:27

Yeah. I was trying to think through all my different corporate jobs, you know. I think too, I remember I have this piece of paper here and I had uh 14 different pages I would bring to a boss or leader, say, here's uh here's ideas. Right. Now I just do them. I think that's the difference too. You know, a lot of times, I mean, everyone has a boss because you have clients, you have, you know, a wife or kids, or you know, we all have bosses, you know. So but yeah, what what help you make that first move if somebody's thinking about their listening and just going, you know what, what was the first domino? We talked about Jay, we gotta weave him in, right?

SPEAKER_01 2:59

So I mean, uh I think if you're thinking about quitting and uh if you're thinking about quitting and you like your job at all, don't quit. Um get get a pretty substantial portfolio under your belt before you quit. Um I think the the cool part about having a job while you're starting investing is you're more bankable with the job than you are without, even if your portfolio pays you well more than your day job does. Banks like the stability of you having a job. And so if you're trying to grow in scale, if you leave your job, especially before you've had an LLC that's been profitable for more than two years, then it could hinder you in terms of acquisition and uh and really slow you down. So uh if you like your job, if you can just put up with it for a few more years, I'd say put up with it for as long as possible. Now I know it's not the same for everybody. Some people are working, you know, night shifts and hard labor and you know, and those things, and you want to get out as fast as possible. I get it. Um, but if you're at a place where you're like us where you had a corporate gig, you made some decent money, you just, you know, it'd be nice if you didn't have to work, then I'd say we probably should work as long as possible.

How To Win With Local Banks

SPEAKER_03 4:15

I had that on my list. Uh, insurance is going up, health insurance like 28%. Um so people see entrepreneurship and all that being sexy, but sometimes some of the corporate jobs when you have 401ks and health insurance, and I I love what you said, you make it more bankable. Yeah, I've had it many times where they're kind of look at your debt to income ratio, or you know, hey, I'm looking to do these 10 to 20 flips a year. Yeah. When you have that steady income, the bank really likes it, it makes it a little bit easier. So if I had to, if I'm hearing you right, and just for our audience, a banking relationship has to be one of the top first five things you do, right?

SPEAKER_01 4:51

Um yeah, I think banking relationships are important. I think you should be focusing on finding banks locally that like to fund projects that you do. Because local banks are great, but they all like different things. They're all built to handle things differently. So you got some banks who love large commercial deals. I don't want to have anything to do with my little single family fix and flip, right? And then you've got some that are uh, you know, they think the bigger deals are too risky and especially commercial in this market. And so they they are trying to get more small single family under their portfolio because of the safety of it. And so it's our job to talk to banks and find out what they like. What what what are their what is their leadership focused on? And if what they're focused on and what you do line up, it's pretty cool some of the the financing uh flexibility that they can offer you when you're doing the thing that they want to do. So uh yeah, banking relationships are important. Is it one of the first relationships you need? I don't know. Uh, but you will need it soon. Yeah, yeah.

SPEAKER_03 6:08

I love that you said that. You know, you're thinking about their balance sheet. Yeah. And once it unlocked for me, it didn't in the beginning. I thought, you know, hey, I went into the bank. Here's my plan, here's what I'm gonna do. And you really have to sell them too, sometimes on the vision or where you're going, right? So you said it, their balance sheet. If they're like, hey, I have too much industrial, I got too many storage units, I got, you know, too much multifamily, but I got this niche that I'm like, okay, I need 10% of that. Yeah. Once you figure that out, you've got to get a better rate. Yep. Maybe, you know, all I didn't know this too in the very beginning for a lot of our listeners when they say you need 20% down. No, you don't today. I know that. Yeah. Depending on the bank or what their goals are, that's what it's 20% down. It just doesn't have to be yours. Exactly. Yep. Really good way to put it. Yeah, for sure. I think once you figure that out, that they they're trying to get their goals accomplished. If they're not lending any money, it doesn't do them any good, too, you know. So it's just sometimes having good questions.

SPEAKER_01 7:02

They've got to lend money. So they want to lend money. Yeah. You just have to figure out what they like to lend on and match that up with what you do.

SPEAKER_03 7:10

So we say, hey, well, I said top five, we'll make it top ten after well, or just you know, depending on how fast you're moving to, you know. What other relationships do you think, you know, that we talked about this person? We're we're gonna tell, we're gonna call him Joe. Yeah, Joe's gonna stay at his corporate job. He's gonna make it more bankable now. I like it, you know. So they're gonna go, okay, you have a study, Eddie. He's got his health insurance. Is Joe a new investor? He's relatively new. Okay. Um, you know what? Maybe in college he bought a townhouse and he kept that, you know. He went to one of the greatest schools, Florida State University or something. Yeah, forget very specifically. Okay.

SPEAKER_02 7:47

Yeah.

Two Priorities For New Investors

SPEAKER_03 7:48

Um, what what you know you think about it. Okay, what does Joe need to be doing? So he's cutting out at lunch, he's getting some coffee meetings, he's doing some things. What are some of the conversations he needs to be looking at?

SPEAKER_01 8:01

Uh Mike, I I I tend to oversimplify things. Um just because that's how my brain works. Like I just want to do the easiest thing uh first, and then we'll figure the hard stuff out. We need to figure the hard stuff out. So um the cool part about real estate is there's a million ways to make a million dollars, right? You can do storage, you can tell, you can build skyscrapers if that's what you want to do, right? Um and it all works if you do it the right way. And so it can be very overwhelming. But for a guy like this, this this hypothetical Joe we're talking about, you got a corporate gig, you want to keep your job, you want to invest, not sure what to do. I think the only things you should focus on when you're new, if you've never done a deal, I think you need to focus on learning what a good deal looks like in the market you're trying to invest in. Right. So if Joe knows he wants to get started, maybe do some single family, maybe some small multifamily, great. Let's go figure out what that looks like. Because what you would pay for a deal here is different than what you're gonna pay for the same deal in Kansas City or the same deal in California, right? It's all gonna be different. Your price point where you buy might need to be a little different. What you have to put into the property may be a little different, and how you exit the property may be a little different. So, what does a good deal look like for the type of asset you're trying to buy in that market? You need to learn how to do that. So um getting around other investors and asking them about their deals that are in your market is a great way to learn because this is one thing we like doing is talking about our deals. Um you can learn a lot from another investor and like what they're buying, where they're buying it, how they're buying it. Uh and then the next thing I think that Joe should focus on is picking one strategy to find deals. Um no matter what your exit strategy is, right? Because flipping's an exit, right? Rentals are an exit. Airbnb is an exit, right? No matter how you're gonna exit a property, if you don't buy a good deal that allows you to have equity on day one or allows you to force equity through the renovation or through adding value of some kind, then you don't have a deal. So you gotta learn how to do that. The rest of it I think is a waste of time until you have a deal. Because, you know, I could tell people, yeah, go build your team, go find an agent, and go find a contractor, go find a property manager, but none of those people want to talk to you if you don't have something for them to work on, right? They just don't want to waste the time having that conversation because everybody's a wannabe investor, and very few people are actually out here doing it. So uh that was a very long-winded. No, I I I love it. Go learn what a good deal is and go figure out how you're gonna generate leads and start generating leads. Don't do anything else. Because once you generate a lead, if you come to a contractor or an agent or a bank and you say, I've got one, two, three Main Street under contract, and you've got it under contract for 50 cents on the dollar, they will line up to figure out how to help you for sure.

SPEAKER_03 11:22

Well, I know we're gonna talk about education. Yeah, we're gonna tell them we have an event coming in northwest Arkansas. So if you're if you're here hanging out, yeah, man. I know people are listening in uh Dubai and all that, you know. So they're always uh DMing me, say, hey, I listened to you from Alaska. Yeah. But we have something local we're gonna be doing. But I think you said it, you think about Joe, he needs to educate himself. And I think about that. I love that you said this. I started, you know, as a real estate agent before I was investing, and it'd be the same thing. Go out and buy 50 signs, even though you don't have a listing. Go out and create this website that costs$5,000. Well, you don't have a client.

SPEAKER_00 11:58

Right.

SPEAKER_03 11:58

So first you need the education, it's huge. And I think to your point, a lot of people jump that step and miss it. Then they at the education is the hard way.

SPEAKER_00 12:07

Yeah.

Education Paths And Local Meetup

SPEAKER_03 12:07

Yeah. So let the other people's mistakes go ahead and say, hey, here's how to speed that up for you. Yeah. So they listen to podcasts like this one. We'd love them to download, subscribe, hang out. Yeah. Other podcasts that you're on. What other podcasts are you? You said you're you're doing a little bit dabbling here and there. Yeah.

SPEAKER_01 12:23

So a little something. Yeah. Uh I am the co-host of the Bigger Pockets Podcast. So I co-host the Bigger Pockets Man show. And then I also co-host the On the Market podcast. So I do that each week. Um, and yeah, we've got an event coming up. So if people are local or can get here from Dubai or wherever, uh, where every third Tuesday of the month, starting in February, we'll be doing a local meetup, bringing in guests from all over the country to help educate people on different real estate investing strategies, niches, tactics. For me, I just want a place where um investors can come network and share with each other, but also I'm I mean, I want to say this, but not sound like a douchebag. Like I'm very fortunate that I get to be the co-host of the Bigger Podcast Podcast. That uh you know, that wasn't something that I planned on happening, but it has happened. And so since it has happened, how can I take my, you know, little bit of notoriety that I have and use it to benefit my community? So using my platform to be able to bring people in here who might never even know Northwest Arkansas exists, but can come teach our community something. So I just want to help. And so this will be a free event that we're doing every month, third Tuesday of the month. So you can follow me uh at the Henry Washington on Instagram and give you information on it. That's great.

SPEAKER_03 13:52

I love it. Yeah, you think about that too. So if people have made mistakes and they're gonna be on stage, yeah. And uh even me, you know, you think about it too. I talk about it too. People see the successes. I've had companies, I'm sure you have too. I'd love to maybe get in a few either bad flips or companies. I had a staging company and I thought this is the greatest thing in the world. People are gonna pick me to stage their home and then sell the home.

SPEAKER_02 14:15

Yeah.

SPEAKER_03 14:16

Our agents, our team, we're up to about 400 agents now, which is crazy in Northwest Arkansas. And they're it's gonna win, it's gonna be profitable, it's gonna be amazing. When I finally did the math and you walk backwards, six storage units of furniture that's breaking all the time, you're changing in and out, sprinter van, insurance, who's gonna drive it, who's gonna load the furniture. Yep, then you got our agents loading it, and you finally do the PL, and it's like you made$57 from that deal, which you got the listing anyway. Right. You know, yeah, and now technology, AI, and all the things, AI, there's digital staging. Yep. So you kind of go through that's a that's that's a it is. It's getting it's getting stronger and stronger. I go through and I'm like, is that digitally staged or is that real? You know, sometimes you don't know. Yeah, but you know, those things are educations, and those are things too. If someone would have said, hey, so I I don't know if you have a framework or a model around this. I had a mentor say, pick a number. So any company now that I look at or anything that I'm gonna do, it has to make a quarter million dollars net profit. Not necessarily in year one, but it has an opportunity in year two or three to do that. If not, it has to be a no.

SPEAKER_02 15:23

Yeah.

SPEAKER_03 15:23

I love people and I love companies and I love things. I want to say yes to all of it.

SPEAKER_02 15:28

Yeah.

Simple Profit Rules For Flips

SPEAKER_03 15:28

Uh do you have a framework or what thing you look at? Either flip or, you know, and I love I had like 10 questions in there. Um again, I try to keep everything simple.

SPEAKER_01 15:39

If I'm gonna flip a house, my general framework or rule of thumb is I want to make what I spend. And what I mean by spend is what I spend on the renovation. So that's how I determine if the risk is worth the reward for me. So that helps.

SPEAKER_03 15:54

So it's a one-to-one ratio. So say the spend's 30 grand, you want a net profit 30 grand or more.

SPEAKER_01 16:00

Yep. Yep. And vice versa. If I spend 100 grand and I need to be making six figures or more. Right. Like that's the and there are tons of people out here who will do a six-figure renovation and make 30 grand. They're they're fine with that. And that's cool. I lose those deals to those people because they'll pay more than me. Right. Um, so my framework is great when I get a deal because I usually get a very good, very profitable deal. Uh, the downside to my framework is I probably have to make twice as many offers as the person who's willing to make less um on a potential deal just because they're gonna pay more than me. But that's fine because if you look at a year like 2025 where a lot of people struggle, myself included, I've got one on the market now. That the listing expired. You know, that's the first time I think I've ever had a flip or the listing expired. Um and I gotta go put it back on the market. Um, but you got a lot of flippers who probably lost money this year on multiple deals.

SPEAKER_03 17:00

Uh they had contractors or employees or websites, and we just talked about not making it simple, right?

SPEAKER_01 17:05

Yeah. So I've got one, you know, I've got one that will close Friday that I was supposed to make 50 net on. I may be making like 25 net on. Um so if you didn't have your framework, you'd be negative, right? Yep, yep. So yeah, that's my general framework, and it's it served me well in 2025. And it, you know, so I that's one of the things I'll stick to for rental properties. It's a little different. Um as I've already accumulated a portfolio at a time when it was easier to buy deals that made sense on day one. And now we're in a market where that's a lot more challenging. But I also make money flipping and I make money teaching and I make money speaking and all that is highly taxable income, right? And so I'm more concerned about how a property can help me from a tax perspective in year one than I am about a couple hundred dollars of cash flow. So um and that evolved, right? That evolved since 2017. Joe should not do this, right? Joe should go look for all the cash flow he can in one. Uh but for me, if I can buy a rental property in a neighborhood in northwest Arkansas that I know is appreciating, uh, that pays for itself, even if I don't make a dime off of it, but I don't have to put anything into it. And I get the tax break and I get the appreciation and I get the equity on day one because I'll never buy a deal that I don't walk into equity on day one. That's my hard stop. I'm never gonna pay retail. I have to have equity on day one. I don't always have to have cash flow on day one.

SPEAKER_03 18:48

So that's I love that framework. And I think that's something because me, I look at real estate. I was in Florida yesterday and I was with my parents, and I looked, we I said, let's go to look at real estate.

SPEAKER_02 18:58

Yeah.

SPEAKER_03 18:58

That's just what I do. I love it. It's my game, you know? And look at that, and I was like, oh, I never make money on this. So I love what you said, but you still fall in love with it. Yeah. You're like, oh, I love the location. You get nostalgic. Oh, my grandma lived by this location. Yeah, I know eventually rent five years from now. That Joe should understand those frameworks and understand put rules in place because we're people. Yep. And we have those emotions. Absolutely. One thing I want to go back to, I love that you said there's a lot of abundance. That's one thing that I realize. I there is competition in this marketplace, but I think it's healthy and abundant. And I love people are willing to help each other. That's one thing I didn't understand before I got into real estate, real estate investing, and the groups and everything. Everyone's willing to help each other. Yeah. Really cool. I just I love that. I mean, are you seeing that everywhere?

SPEAKER_01 19:44

Yeah, I think that's that's something I found that's pretty unique to real estate. There's a a lot of other industries, it's not like that. People kind of play their cards close to the rest. And don't get me wrong, there's still people in the real estate space who do that. But for the most part, like people just want to help you. Um which is cool, man. Um, yeah, there's more competition in this market than there was in the past, for sure. Uh, but I mean, everybody you see, majority of them have a roof over their heads. And if they have a roof over their heads, somebody either owns that roof or somebody owns that roof. So they're either paying for a mortgage or they're paying for uh or they're paying rent, which means somebody's monetizing that property. So there's enough to go around.

SPEAKER_03 20:25

Yeah. And you know, you look at that abundance mindset too. And you, you know, 2017, you were going cash flow. Yeah. Now it's a tax strategy. I think that's something else. People have this buy box or this I need to do this. That changes, and that changes with times too, you know. Interest rates bleeding down a little bit too, but then maybe the numbers don't make sense for certain strategy. So it sounds like you've pivoted. So how have you educated yourself? Are you in uh mastermind groups, or sometimes you have the blessing of having some of your guests give you, give you knowledge? Me, I mean like right now, I'm just you know, I'm taking notes. If you can't see me on on air, I have few three or four notes myself too. That's a great thought process, you know. So it's being around people, right?

SPEAKER_01 21:06

Yeah. Um yeah, I am a I am a part of a uh a higher level mastermind, which has been uh helpful. I probably don't, I not probably I don't utilize it as much as I should. Um but yeah, you know, I get the pleasure of having amazing co-hosts at Bigger Pockets who know a lot of things, who know a lot more things than I do, and then I have guests who I get to learn from. So that's cool. Um, and just seeing how other people approach their portfolios and approach making decisions about their portfolios has definitely helped me in like how I view mine. And then I think getting into real estate, a lot of us got into it because we're like, we can quit our jobs, right? If you generate as much cash flow as you make in your day job, you can quit, right? That all sounds great. Um But it's I mean it's not really true. Uh uh cash flow is kind of a myth. It's kind of a a unicorn. Uh you should aim for it always, right? Like I'm not saying I like to go buy break-even deals. I would much prefer to buy one that's positively cash flow on that day one. I'm just saying that if it's breakeven, it doesn't mean I'm not gonna buy it. It's gonna depend on the location. It's gonna depend on how much equity I'm walking into. If it's got breakeven cash flow, but I'm walking into 100 grand on equity in day one and it's in an appreciating neighborhood, I'm gonna think long and hard about saying no to that, right? Sure. Wow.

SPEAKER_03 22:37

I mean, that's real money. That's real money. Yeah. And so um uh education. I don't know about you. I've not read, I've read more books, more podcasts, more masterminds, spend more money on education than I ever spend in my life, and I'm about to be 50. So I don't know about you. You talked about mastermind groups, all that stuff. Yeah, the investment in yourself. I think to be if you look at the top and you're spending time with them, the top to the top real estate investors and people, how much do they invest in themselves thousands upon thousands at time, you know?

SPEAKER_01 23:06

Lots of lots of money invested in education are paying to be around people um who are, you know, above where you are. Um so sometimes it costs money to have access to those rooms. Uh but what you can learn in just like a conversation with somebody else is extremely, extremely valuable. Um, and like I said, that's what I'm that's why I've learned about how I'm approaching my portfolio is being around other investors with similar portfolios and similar positions and seeing how they're positioning their portfolios. Like I am more focused on acquiring less rentals right now and paying off the ones that I have than I was about growth um in the beginning. And that's normal. Like everybody's got a limit.

SPEAKER_03 23:56

Well, that's what I was gonna ask. So you're saying you're at 100 units or so, right? Yeah. I had a mentor and a friend that he was looking, call it his 10% or 20 at the bottom, and then rotating that as an example. He took some of the, he took five of those as a portfolio package and he 1031 to an oil and gas, 1031 exchange. Are you are you do you have a process quarterly, annually, that you're looking at your portfolio bottom up and saying, okay, I need to make these, they need to make more money, I need to raise rent, I need to flip them. You talked about abundance, giving them to other people that are in your world saying, I don't love this deal for me anymore. Do you want it?

Portfolio Scorecard And Selling Strategy

SPEAKER_01 24:34

Right. Yeah. Uh I'd say about twice a year. So every six months or so, I look at my uh spreadsheet of you know, running portfolio. So I have a spreadsheet, it's got all my property, it's got all my payoffs, it's got all my interest rates, it's got all everything that they rented for. Uh and I kind of have a red light, green light uh color scheme on it. So everything in green, those are my key forever properties. Yeah. Like I'd if if it's up to me, I'd never sell them. Uh so those are my those are the ones I want to try to get pay off first. Then I've got the yellows, those are the ones. Yeah, I'd like to keep them. Uh but if I need to sell them, I will. And then I've got the reds. Those are the ones I'd love for someone to come and buy, right? So play right now is to sell the reds to pay off the greens. Um, and then flip houses to to add to that.

SPEAKER_03 25:29

Um which mostly you're in single family, I would say, right? Singles and small. Yeah. I I thought about this as you were talking, and anyone else listening, would the growth that we're having in other places in the United States, are you looking at? I was looking at a deal most recently where it was like a road was going to come through or a future development or future. Do you have a check and balance on there? I guess you're using maybe your real estate agent for that, or just kind of bouncing through is there, you know, are there is the Walton family going to put this uh bike lift? We had a client that the bike lift wanted, they needed their land to go for the bike lift. Yeah, you know, and obviously you don't have the information all the time, but I know in Northwest Arkansas they just released the 2050 uh plan. Yeah. And their plan was thinking about transportation, you know, high-speed rail, all that, you know. So it's me, and you kind of said this, but I want to make sure I say it out loud for me and for the listeners. I understand you're looking at this thing like a mutual fund. And I think that's what Joe needs to be thinking about too. And I heard you say it loud and clear. You have some things taxes, some is cash flow. Some, you know, you think about you, we're not all going to have Tesla that goes up 300, 3,000% in one year from taxes or excuse me, from stocks. So if you can have this a mutual fund, you know, and you're pulling levers, and that's really what you're doing, is you're saying, okay, my gross stock index fund, I want my portfolio to make 17% or something, you know.

SPEAKER_01 26:52

Well, that's uh that's part of the strategy. Right. So every six months we tend to look at that spreadsheet and then make a determination because there's a couple of things that happen. When you're doing what I do, which is I buy value ad. So I'm buying distressed, adding value, and then monetizing once we finish. Not everything ends up penciling like we underwrote it to pencil after you finish getting the value up. So you have to take a look at that and you know, trim the fat. And when I say trim the fat, that could mean changing a strategy, right? So I had a rental that um wasn't producing what I wanted it to produce as a rental, and instead of selling it, we furnished it and use it as a midterm rental. And it's literally been booked as a midterm rental since the day we made it live. It hasn't had many days where it's at vacant.

SPEAKER_03 27:40

Um so that's I love that you said that exit strategy doesn't have to be get rid of it. Yeah. It could look at the asset a little differently. How do you use it differently, right? So midterm, usually most people say 13 weeks, I guess, or three or a quarter or so.

SPEAKER_01 27:55

These are all decisions that numbers will tell you what to do, right? You just have to have the numbers, right? So my option was keep it as a rental and not make the money I want to make, or I could sell it, then I've got to deal with tax implications if I don't 1031 it. Or I could pivot the strategy. Um, and so it was just a matter of doing a math problem, which one made more sense. So for me, it made more sense to spend 10 grand to furnish it to make three times as much per month. That return on uh spend, you know, is way higher than if I would have taken that 10 grand and tried to go buy another asset, right, in this market.

SPEAKER_03 28:36

And now you have 10 grand of furniture. Yeah. See, back to my my staging company, you're coming back to me. But now you can go and you can do that again in your hundred properties when you have this call it mutual fund, you could turn on where it makes sense. Because in 10 years, which is about where you're at and doing it, 10 years from now, too, the market's gonna change or shift. Even as we know, I felt like it's been happening in 12 to 18 months. Yeah, different strategies needed. And legislators that's changed, big beautiful bill, some of those. You know, in education, if you're not spending time in there, that's not a win.

Market Research City Plans And Shareholder Hacks

SPEAKER_01 29:09

Yeah. It's so I think part of that strategy when you're evaluating your portfolio needs to be some market research, right? Um fortunately for us, we live in a place where there's a lot of market research that's available to the everyday person that you don't have to do a bunch of work. Like we can go get a copy of the uh Skyline report.

SPEAKER_03 29:32

You can go get a copy of the Skyline report. Um I don't know about you. I sound smart when people are out of time investors or out of time people. I'm like, yeah, we're chat GPT, you let it summarize three or four bullet points for me, you know?

SPEAKER_01 29:44

So yeah. Uh but that is a part needs to be part of that analysis, and then you can make educated decisions, right? Like right now, I'm out of place. I've got two short-term rentals uh in Bentonville that are one is extremely underperforming, and the other one is okay. I could sell them, have equity in both, I could make money selling them, but one of them is you can throw a rock and hit the Thaiden school. And the other one is in the neighborhood across the street from the new home office campus. And so it's a it's a it's a math problem. It's like, yes, I'm losing money on these every but is it worth it given the path of progress that this is in, right? And given what I know is coming in the future, that home office campus is like 60% built. It's not done yet, right? Um uh and we're talking about Walmart's home office campus for those uh who are unaware. And so it's a multi-billion dollar project, and that's not all the way done yet, but it's already beautiful.

SPEAKER_03 30:49

The 13,000 employees and it's got its own zip code, on his own post office. Yeah, it's amazing.

SPEAKER_01 30:54

Yeah, and so uh yeah, that's part of that analysis is figuring out you know when to hold them and when to fold them, right? So right now we're holding a couple of assets that I probably wouldn't hold if they weren't where they were.

SPEAKER_03 31:07

Um if Joe was listening or anyone else, I'd love that you said that. There is a spreadsheet, but then sometimes there's not necessarily emotions, but there's trends or things that you understand in this game. And I just love that you said that. Sometimes it's like, hey, I might lose$100 a month on cash flow potentially for something that might give be a skyrocket, right? Might be a rocket four years from now when that's full and that builds out, or even turn this to a midterm rental. Uh sometimes you think about, and I always talk about too, is the juice worth the squeeze? Common term, but you think about it, okay, how many times am I having to try to find a cleaner or you know, post about getting something rented versus maybe switching to a midterm as a strategy or even a long term to your point, you know?

SPEAKER_01 31:53

It's a it's a yeah, like for example, let's say I'm losing$300 a month on this short-term rental. So that's what just under$5,000 a year that I'm losing on that property, right? That's helps for taxes, I guess, too. But that's not great from a perspective. Uh but it's sitting in a place where it's got a couple hundred grand of equity in it. And the minute I thought about selling it, I think the Faden School or Walmart is expanding. They just tore down some houses that are literally across the street from me and are expanding that school. And there's one thing I know about that school and people who want to go to that school is they'll go snap up property that's close if they need to to get their kids in a place like that. Um and the values will continue to go up. They're building apartments, and so I'm losing five thousand dollars a month, but I be could be gaining 20 to 50 grand a year. Okay, right.

SPEAKER_03 32:51

So we talked about exit strategy. People don't even think about this all the time. That dirt might even be worth at a certain point, you know, when you think about this. Um, and and something I would advise anyone, I don't know if you do this or not, I do peek at the City Planning Commission, their agendas. Yeah, I don't spend a lot of time, but I just kind of look at the agenda to say, okay, do I know where this property is? Have a building where our event's gonna be in Bentonville, cool spot. And they just rezone those four stories or higher. Yeah. So I was like, hey, I'm in real estate. I could pre-lease the building now, it's 18,000 square feet, but it's one level. Yeah. But if I was smart enough and said, hey, the next 36 months, people are gonna need office or need whatever it is. Could I pre-lease? And to your point, could I go to the bank and say, I'm 100% pre-leased? I'd like to make this four stories now.

SPEAKER_01 33:44

Yeah.

SPEAKER_03 33:44

Well, that's that same piece of dirt that I actually own or finance the down payment. So sometimes just have an education I would have never had in 2015 or 14, you know, because you just you just go, oh, that's a building. You don't realize the dirt itself can be valuable, right? And understanding some of the code. So I I've found myself getting a little bit smarter at some of the city planning and some of that. Are you spending a lot of time in that or part of your team?

SPEAKER_01 34:10

Or yeah, I definitely look at the city planning meetings. Um I think that's just a smart thing to do. Uh seeing what's coming in your area or attending them. Another another thing people could do is to join the local chamber of commerce in the cities where they're investing. It's typically free or minimal cost for you to join, but it's full of business leaders and people who are in the know about what's coming in your area. So just attending those meetings once a month for an hour in the mornings, you'll learn so much about what's happening now and in the future for very for very minimal cost. Um also one of the things I tell people to do if you don't live here and you can't do that, but you invest here, um, buying stock in Walmart, Tyson, JB Hot, buy stock in uh Lowe's, Home Depot. But once you and I'm just saying, just buy one share. You know, like you don't need to buy a ton, just buy one share of each. But once you buy one share of each, or they mail you in the on your email, or in your perspective, yep. They mail you their shareholder package, which includes progress, where they're planning to build, when they're planning to build, what's coming, what they're preparing for. And so you get access to all this, you know, owner type insider information that you can use to help you make guided decisions about your properties.

SPEAKER_03 35:33

Um, so there's there's all kinds of cool and you get to go to fun parties, right? You know, go to concerts and stuff. Yeah. I actually think that's I'll back up on that. If someone didn't catch that, I love that. I think that's brilliant. My wife and I talk about this all the time. Say you're in a gross stock index fund. Well, you're not really owning the fund is owning a share. So go ahead and buy one share. And that's what we're starting to do. Certain companies that we like their trends, we like what they're doing to learn about uh what they're doing. Yeah. To your point, they might say, hey, Walmart at one time, your last three or four years, it slowed their store growth, but now they've turned that back on, you know, and now obviously they're growing three or four hundred stores. So if you are an investor that's looking at it, you know, and I know some people have converted even Kmart's and Sears and Walmarts to storage units. Yep. I would that's one thing I wanted to ask you today. Are you seeing any cool trends? I'll I'll I'll plant one that I heard on a podcast. Driverless cars. So when they're completely here or here, just say that parked somewhere. Exactly. Well, they've got parked somewhere, but also parking decks and parking garages, are those going to be utilized the way they they would regularly?

SPEAKER_02 36:40

Yeah.

SPEAKER_03 36:40

So as an investor, if you're a long-term investor, maybe even acquiring parking garages to say that might be an apartment complex or might be something different. Are you seeing any trends or any trends people need to be thinking about if they're watching?

Trends Worth Watching In Real Estate

SPEAKER_01 36:53

Uh yeah. Um again, I'm an old boring investor. So I see these trends because it's my job as a podcast host to understand some of these things, but I invest in none of these things. And just there's your disclaimer. Uh, things to think about. Uh and when you think of niches, the first thing you gotta think about is what problems do we have? And then what are some potential solutions? So one of the biggest problems we have is a housing shortage, because regardless of what the numbers of the real estate market tells you, we still don't have enough houses for the people who need a place to live. Now, the reason they're not selling fast and things have to do with affordability and prices and all these things going up. But we have a housing shortage and we have an affordability problem, which means we have people that need houses and there aren't houses for them. And then we have people that want to buy houses and they can't afford to buy houses. Right. So I think one of the trends that people should pay attention to is converting commercial space, not commercial apartment space, but like commercial commercial space. Converting that to affordable housing. I think that there's an opportunity there. The problem with that strategy is it just requires a lot of people to be on the same page that typically aren't on the same page. But I was doing research for a podcast this morning, and one of the things I saw in a city uh was they had they had thrown all kinds of money at um at the redeveloping old warehouse space in a part of town into affordable apartments, right? And so I think whoever figures out how to sell the um commercial or warehouse space into housing, uh affordable housing at that, there's a lot of money to be made there because that brings more housing units online, it brings affordable housing units online.

SPEAKER_03 38:48

Um so I lived in Minneapolis for three years, and we actually it was like an old sugar plant or a flower plant that we lived in. Now it wasn't affordable. Yeah, no, typically they're making very well.

SPEAKER_01 39:01

You do it from an affordability standpoint, right? And I mean, if you look at a commercial office building, it's got electrical, it's got plumbing, it's got everything that you need. Some things sure would need to be changed around, but you could do that. It's just now you've got to change zoning, so you need the city to work with you, right? Yeah, it's just there's just a lot that has to go into it, but that's a niche that I like. Um there is uh some popular niches that aren't my favorite. Like people are getting into RV parks. I think there's a lot of money in RV parks. Absolutely. Um, I think it's pretty niche though.

SPEAKER_03 39:33

Um I think 2020, when it was hot, yeah, is we had COVID. Everyone was buying, everyone had an RV. Yeah. You know, so I think there was a lot of that. Uh uh and I I watch this too, kind of like at Facebook Marketplace. Yeah. If people are not, sometimes you can see trends on there, what's on there, what's for sale on there. Uh, and you think about it. Yeah. Now, some of these RVs people can buy, uh, you know, using, obviously, talk to your tax professional, but still they can write those off in one calendar year. Yeah. And RVs, which have a spreader band, can be written over 20 years, which is kind of nice to be able to do that. But I to me, that's more emotions and fun and joy. Yeah.

SPEAKER_01 40:12

It's so niche. Like if you're really going to be profitable in RV parks, you just have to understand that business and know how to curate a space that that niche of people want. Like it takes more time effort than probably the casual investor who's just trying to catch a wave is going to put into it. Um 3D printing homes. That's an argument. Right. You know, so I see it a lot. I'm not sold yet. Yeah. Um not sold on 3D printing homes and not sold on container homes. People still like their traditional stick build homes. Yeah. All that stuff is cool, but um mass adoption, I just don't see it yet.

SPEAKER_03 40:47

Um well, if if Joe's still listening and hanging out with us, right? You know, he didn't fly to Dubai right now. Yeah. I love what you said though, is is you what you're I'm seeing your face right now. If people are just listening on the radio, what are you passionate about?

SPEAKER_02 41:00

Yeah.

SPEAKER_03 41:01

What do you like? What do you get into? I think it's cool to understand those trends. That's what I'm hearing from you. But what are you gonna be good at too? And to your point, what saying around 300,000, any market, if you can get a single family home around there, it's gonna win, right?

SPEAKER_01 41:16

I just feel like if you're new, if you're in that Joe space, never done a deal, cutting your teeth on a few single family deals is not a bad idea. And it doesn't mean you've got to stick with single family forever. But man, take your lumps when you're buying a house that's only worth$300,000 all fixed up. It's not gonna put you in the poor house if you screw up. You know, you're not you're you're not gonna, you know, you still be able to feed your kids. Yeah. Right. Like you go screw up on a 300-unit apartment building and you raised money from investors to buy it. That's a long, sad, sad day if you screw that up, right? So cut your teeth on something and then and then make business decisions after you've learned some lessons. I think part of the problem with the Joes of the world is you don't you want to make a lot of decisions about this business that you have in your head before you've actually done a deal, right? And you're gonna learn so much through your first deal and second deal and third deal, um, that your plans are probably gonna change, right? If you don't know anything about investing yet, and you're planning out this five-year business plan, it's all gonna change after you do a deal or two. There's gonna be parts of it you're like, I never want to do that. I never want to do that again. Or there's gonna be parts of it where you're like, I absolutely want to do more of this. And so like people are like, I'm gonna go get my license and then I'm gonna do this. And I'm like, just go do a deal. And then figure out where your license might help you after a few deals, right? If it would help you your business or the way you want to approach real estate to get your license, then go get it. But just focus on finding a deal, do a deal, and then start to plan out your business once you've got some, once you've cut your teeth a little bit. For sure. So you realize what you're what mistakes you've made and how to learn from those things. And uh, you're not gonna you're not gonna die if you do.

SPEAKER_03 43:01

I know a lot of Joes are gonna be start following you now. Yeah. Where do they go follow you? What Instagram or Facebook? Where's the best place to find out this education?

SPEAKER_01 43:10

Instagram. I'm at the Henry Washington on Instagram, or you can go to my website, which is the you at the closing table.com, all spelled out S-E-E-Y-O-U-A-T the Closing Table.com. C with the closing table.

SPEAKER_03 43:22

Did you was that a strategy having that website? Something I think about. My podcast called Real MikeDooley. Yeah. If Mike Dooley's not on the show, does the show continue? You think about down the road, do you think about that website of getting a larger team or larger people? Was there a thought process around that?

SPEAKER_01 43:37

Yeah. Uh I just wanted to own my name. So I went and bought all the domains and and all that. I'd tell you to do the same thing on buy mikedooley.com, realmikey.com and every version you can think of. Or I'll go do it.

SPEAKER_03 43:52

Yeah, no, there you go. Like once a week I get GoDaddy messaging me. You got nothing. I'll go buy them on. You can buy them from me.

SPEAKER_00 44:00

It's just part of the branding.

Partnerships And Planning The Ending

SPEAKER_03 44:01

Um, I think that's important too. You know, if you think about Joe, whoever it is, and you get into this game of what you're doing, you talked about speaking, uh, you know, coming to events or coming to different things. That that's a platform. Yep. Now you're at a place too where people are probably giving you great deals. They're going, hey, I learned a ton. Hey, I'd love to partner, throw a deal your way, or do whatever. You know, are you into do you like partnerships? Is that something you explore? Are you your own strategy?

SPEAKER_01 44:27

Or I mean I have partners for deals. Um, I'm just a believer in like a partnership. We've both got to be bringing something to the table that isn't something I can do. I'm um and if that's the case and then we click otherwise and I'm open to it. I think a lot of the partnership deals I'm offered are you do all the work.

SPEAKER_03 44:51

You do all the work. You bring all the money, you bring the knowledge.

SPEAKER_01 44:55

Yeah. That's that's not very uh conducive to drug. But you know, if someone bought me a brought me a great deal. Um yeah, consider it for sure. Yeah. Uh one lesson I learned recently in twenty twenty-five. Well just it was more of a thought process. Student of mine actually, like you said, I tr I try to every time I'm approached with an idea or a deal or a concept, I think about what does this look like when it's over? How does this end? And that helps me figure out how to structure on the front side. I think that's a really that's a really great insight. Because we don't often think about the end of something.

SPEAKER_03 45:36

Everyone gets engaged, you know, we just passed the holidays, everyone bought rings, yeah, but half of those end in divorce, right? So you're thinking about what's the exit strategy. I use it.

SPEAKER_00 45:45

I don't want you to think about the end for marriage, you still think but do think about the end for everything else.

SPEAKER_01 45:51

Like yes, I just that perspective opened my eyes because you're right, like one of my partnerships, we um we sweat our portfolio and parted ways on 2024. Um and it was fine, it was all amicable. Um but that partnership we set up on the front side for that day. And that was more of a testament to my partner thinking about that than I was. He was a more seasoned business person at the time. Um, but that's taught me a lesson now going forward. It's just uh it's a perspective I haven't had. So think about think about how it ends and it'll help you figure out how to set it up in the beginning and have some of those tough conversations.

SPEAKER_03 46:28

I love that. I had a mentor say, think about 10 years from now, write a 10-year letter. Think about a partnership or whatever you're doing, or you love doing it, are you gonna be doing it 10 years? Where are you gonna be living? What does that look like? We think about one year, think about the now, you know. So but as we're wrapping up, uh anything you want to leave for the folks, we I know we have our event coming up. Yeah. Uh, they can hang out with us, they can follow you on Instagram. Anything else you got in the pipeline that you want to share with the folks?

SPEAKER_01 46:53

Uh yeah, check me out on Instagram. Um, you can also check me out on biggerpox.com. Uh and like I said, if you want to uh work with me further, uh happy to help people. You can go to CU at the closome table.com. There's a little application, just fill it out. That's awesome.

SPEAKER_03 47:09

Well, I want to thank Mutual Omaha Mortgage, was one of our sponsors today. I want to thank them, but it was a lot of fun hanging out with you. Thanks for coming in. Thank you, man. I know you didn't have to come very far. I wouldn't have to fly to Dubai to hang out. We'll do our next podcast in Dubai. How about that? Mike, if you want to fly to Dubai, just let's do it. We'll do it on the Concord, right? Just do it. Thank you, guys. Appreciate it. Thanks for coming in. Thank you. Thanks for listening to the Real Mike Dooley podcast. Subscribe, share, stay real. I'm Mike Dooley. Until next time.