In this episode of the Fresh Hit Podcast, we have a very special guest in the house, my good friend Roger LaSad, who is a real estate broker and property manager. We talk about how to get started in real estate, the 10 things you need to know before getting started, and how to replace your government income with real estate.
00:03:24.000We just got done doing a stream on Aaron Gaines X where I covered the ice shooting that was debating some liberals on Twitter.
00:03:30.000I didn't get a chance to cover some of the other stories, which I will cover for you guys tomorrow because I am going to be here all week for y'all.
00:03:36.000But other than that, man, Roger, welcome to the show, man.
00:03:39.000For those of you that don't know or are new to the program, can you introduce yourself to the people?
00:03:43.000My name is Roger LaSad, real estate broker.
00:03:45.000I own my own firm, Roger LaSad Realty.
00:03:49.000In addition to brokering sales, land sales, multifamily sales, mainly commercial, mainly work with investors.
00:03:57.000Also do property management with many, many properties that Myron currently owns.
00:04:09.000Yeah okay, I was coming in low before.
00:04:11.000Yeah okay, so I guess, where do you want to take it from from here, from the the beginning?
00:04:19.000Well, like you said, we were looking at 10 things you need to know before you want to invest in real estate, so I just came up with a nice little list.
00:04:29.000There's 10 of them, so I got a nice little piece of paper here to refer to that I'll expand upon sure um, and I would start off with the first thing.
00:04:38.000If you remember, when we started this, I asked you this first question as well, like, what was your goal?
00:04:43.000What was it that you were looking to achieve?
00:04:45.000Because I think a lot of people will say well, I want to invest in real estate, but they don't have a goal in mind, and then that just, they don't have something to keep keep themselves going.
00:05:05.000Um, for most people, it might be something simple, it might be, I'd like to um, get a real estate property so I could pay my car note or pay my car expenses, or maybe I want to put more money away for retirement, or maybe I want a little bit more disposable income.
00:05:22.000I think if you start off small like that, it's easier for you to get going versus saying well, I want to replace my, my monthly income or something that was my first goal was like I want to replace.
00:05:34.000Once I started doing the social media stuff, I was like okay, I want to be able to replace my government income with, with real estate.
00:05:40.000That was my original goal, and then obviously, you can expand from there.
00:05:42.000But like all right, in your case um it's, it's took a while right, it's not like one or two properties no, depending on how many yeah, depending on how much you need.
00:05:53.000So, for me my, i'll never forget my original goal.
00:05:55.000At the time when I left the government, I was like uh netting right obviously, on paper i'm making like 10k a month, but I was really netting like more, like 7 000 right, so a month when I was working for the government.
00:06:05.000So uh, this is like, oh man, this is 2020.
00:06:11.000I was like okay, I need to make seven to seventy, five hundred a month to pretty much cover what I used to make for the government and and that was that was my goal originally um.
00:06:20.000And then obviously you need to get a certain amount of houses to be able to make that happen with cash flow and stuff.
00:06:25.000But uh, but I do think that yeah, having a goal, um is super important.
00:06:29.000No you, you got to start from a goal, because if, if you started off, maybe you get a bad tenant, maybe you have some unexpected um bills that you didn't uh, that you didn't factor in, that could derail.
00:06:44.000Or maybe you just buy a house that's a headache and things aren't working out.
00:07:01.000Like if your goal is to, you know, I just want some side income, like i'm not looking to completely replace another whole thing, I just want to make a couple hundred A month or something like that, that is going to dictate which deals you're going to take on, your level of risk, and everything else like that.
00:07:23.000I don't think enough people have that goal in mind.
00:07:25.000They're just kind of like, I want to invest in real estate, but they don't really say if you ask them, okay, what is your goal within the resource?
00:07:31.000They're like, oh, I just want to make what do you know?
00:07:34.000Like in your case, you were very aggressive.
00:07:58.000And I'm glad that, you know, because there's a bunch of people here that probably want to get into real estate and they're like, oh, what's the first step?
00:08:03.000And I would say, yeah, that's definitely the first step because that's going to dictate what type of deals you look at, what type of deals you take on, how you're going to pitch, what you're willing to tolerate when it comes to cash on cash returns, whether you want to get into buying it as an investor versus being a fixer and flipper versus being a, you know, someone that arbitrages.
00:08:22.000There's so many different ways to go about it.
00:08:40.000Where he started off with a triplex and he lived in one of the units for a year and then he moved out after a year and put someone in there.
00:08:48.000You could do that with a single family, a duplex, triplex, quadplex.
00:08:54.000Even with the single family, some people, I don't have experience, but I've heard of people doing this where they'll buy a house and they'll rent out rooms or a basement.
00:09:05.000And there's even a website called PadSplit where you find people that are looking and that they're, I mean, once again, I haven't used this, but supposedly it's vetted.
00:09:15.000You could find people, good tenants that you want to base, that want to share a room in a house as opposed to just getting something for themselves.
00:09:22.000So you could either do that, or if you have enough money, you could just do the conventional route, get either a single family that you're not going to live in or a duplex, triplex, or quadplex.
00:09:34.000Or if you have a really good amount of money, you go to multifamily.
00:09:38.000So and the benefit of this, guys, with house hacking is because when you buy a house, there's like two ways you're going to buy it.
00:09:45.000You can buy it pretty much as an investor where you put 20% down, 20 to 25% down, or you can buy it as a like a home, like, you know, you're going to live in it, right?
00:09:54.000If you buy a home and you plan to occupy it, the bank is going to give you far more favorable loan terms where we're talking about a lower interest rate, you put less money down.
00:10:03.000If you buy as an investor, 20 to 25% is going down.
00:10:06.000If you buy it as I'm going to live in it as an occupier, now you can only put, now you only have to put 3% to 5% down.
00:10:13.000That's significantly less cash of your own that you have to put in the deal.
00:10:16.000And the bank will give you the other, you know, 90 to 95% of the loan, which is very attractive because it lets you basically get into the asset, live in the asset for a fraction of the cost.
00:10:28.000And then you can have tenants offset that higher mortgage.
00:10:30.000Because obviously the less money you put down, the higher your monthly payment is going to be, but you're getting into it, controlling the asset, and then hopefully your tenants will help offset that cost for you.
00:10:39.000So that's one of the benefits of house hacking, especially if you don't have that much capital.
00:10:42.000It's one of the best ways to get your first property.
00:10:44.000You can do it with a duplex, triplex, or even a fourplex because these are all considered residential real estate versus five and up is considered commercial, which you won't be able to get in an FHA or house hack with a commercial property with a five or up, but you can go all the way up until four, which is really good.
00:10:59.000Because if you somehow get a fourplex with, you get a fourplex and you have to hack that, now you have three tenants to offset that mortgage that you're going to pay.
00:11:18.000The quality of your tenant is going to be dictated by the location of your property and the condition of your property.
00:11:27.000So when I say pick your location wisely, the number one thing you guys got to ask yourself is when you're buying a rental income property and you want to have good tenants, you got to ask yourself, where is the money going to come from for my tenants to pay my rent?
00:12:01.000It has to be in a desirable area, has to be in an area that's relatively safe, not too far away from decent shopping as far as supermarkets, as far as entertainment, et cetera, et cetera, et cetera.
00:12:15.000So, and that's one thing I think a lot of people really don't understand because they invest in like really crappy areas and then they can't get decent tenants.
00:12:32.000Now, you've done, you've dealt with a lot of my tenants.
00:12:37.000What are the two, for those of you that, for those people that might have a property or might be thinking about obviously getting a property and putting tenants in, what are some of the biggest things that you had to look for or things that were like red flags or things that you tried to avoid or you looked for positively to dictate whether a tenant was going to be problematic or not?
00:12:53.000I mean, I hate to say this, but I mean, I would say the most important thing.
00:12:59.000Well, let me not even say the most important thing.
00:13:01.000When you're looking at a tenant, you definitely want to make sure that household income is no more than 30%.
00:13:08.000I mean, that household income, when you factor in household income, the rent is going to be no more than 30% of the household income.
00:13:31.000It's either a couple or a few people chipping in.
00:13:35.000And then the next thing I would say is you got to pay attention to credit scores.
00:13:39.000And there's a couple different ways you do it.
00:13:41.000Like, obviously, if they've got a really high credit store, you're good to go.
00:13:44.000Even if they have marginal credit, which I would say the 650 to 680, you definitely want to look to see, do they have a lot of collections?
00:13:55.000If it's a situation where maybe they messed up here and there, but they don't have collections or it's very low, you're probably good to go with that.
00:14:03.000Also, I would say look at an aggregate of the credit scores.
00:14:10.000A lot of times you'll have maybe a couple where one has a really good credit and the other one has challenge credit.
00:14:16.000If you average it out, that kind of gives you a good idea where they're at.
00:14:19.000So it's not necessarily a situation where, well, the husband's great, the wife is bad or vice versa that you decline them.
00:14:29.000And then ultimately, if it's a little bit below what you feel comfortable with, you could always ask for additional security deposits.
00:15:21.000But yeah, so you know, so I guess the bottom line here is credit outweighs income.
00:15:30.000No, I would say, yeah, I would say it's well, I mean, obviously, but like if you have to pick one that's a bit more important, that would be a bigger determinant.
00:15:37.000But at the same token, you definitely want to make sure they have enough money to pay, right?
00:15:41.000Especially, and in case something were to happen, that's why we say no more than 30% of their income because you figure, well, what if one of them loses?
00:16:26.000But yeah, I know a lot of people are in tough spots, but if you're in a situation where 50% of your gross income is going to rent, that's yeah.
00:16:53.000So this is a part that I think a lot of people really don't take enough time to look into.
00:16:59.000Not just getting a loan, but you have to understand you could literally have two mortgages, same interest rate.
00:17:07.000But then when you look at the total cost of the mortgage, it might be different.
00:17:11.000And why then the reason I say that is sometimes bank A might give you more higher origination fees than Bank B, which is why I'd also recommend that when you're going through the process, in addition to talking to your main, you should talk to a mortgage broker.
00:17:28.000And then there's another thing too, depending on your individual situation, depending on the type of property you're looking to invest, there might be specific lenders that have products that are a better fit for you than your bank could be offering.
00:17:45.000And like I said before, don't just go in there thinking, well, I need to borrow X amount at this interest rate.
00:17:52.000The finance, you know, a lot of these bankers, lenders, they've become really good at adding hidden costs and additional cost.
00:18:02.000So don't just think in terms of loan amount and interest rate.
00:19:00.000You definitely want to know what's considered a normal utility bill if you are paying the utilities, like a certain amount of electric, water, et cetera.
00:19:11.000Because sometimes when you see a spike or you see a trend of something going up, it's not as simple as the tenants are just using more stuff.
00:19:21.000Like in some cases, like in one property, we had homeless people going on and using the water from the outside to like bathe themselves at night.
00:19:48.000Yeah, when the tenants aren't paying for stuff, they won't alert you.
00:19:52.000But yeah, you definitely want to make sure.
00:19:54.000And then another thing too that I'll share with you, as I'm sure a lot of you guys know, in South Florida, we've had some dramatic rises in property taxes and insurance.
00:20:07.000That's something that I don't know if a lot of people are aware of this, but with your property taxes, when they raise them, you can challenge those.
00:20:31.000And you definitely want to have some reserves because I guarantee you, through the course of you owning a real estate property, there are going to be expenses.
00:20:38.000There are going to be emergencies that are going to come up that you didn't think of before.
00:20:43.000And Fresh harps on this so much that when he bought his house, he basically spent all of his money to get the house and he had like no reserves.
00:22:24.000And then you can ask to verify, and most likely they're not going to tell you, but you could ask them according to their application.
00:22:31.000It says that they make X. Can you verify that they do make X?
00:22:37.000Now, the only little tricky thing with that is that with some of these big Fortune 500 companies, yeah, HR is not going to tell you, or they're going to send you to some automated system that, no.
00:22:48.000In that case, what you do is you ask for copies of their bank statements to verify that you're seeing a direct deposit in the amount that they said they make.
00:22:57.000And I would say you probably want to go back like six months, three to six months just to cover that.
00:23:04.000Now, when you are verifying rental history, this is the one where a lot of people try to get slick.
00:25:26.000So not to say that that can't be, but if you're going to accept upfront pay, you're going to want to do it for the whole, for the entire lease.
00:26:38.000But yeah, you don't want to get yourself into a spot where you took this money up front and then at the end of what, six months, then the person's having issues.
00:26:49.000Now you got to go through the time and the money to evict them.
00:28:07.000I'm 22 years old, online personal trainer.
00:28:11.000I would say, bro, obviously go all in on your business, but get a job on the side so that you're still getting income, dude.
00:28:20.000Like, I don't care if you got a drive over some shit like that.
00:28:22.000Pick something up that's going to be more flexible where that you can, when you're not doing the personal training stuff, you can have some guaranteed money coming on the side.
00:28:29.000It's going to suck for a few months, but you definitely want to have some stable income coming in no matter what as you build your business.
00:28:36.000And it's going to suck because you're going to have to work basically work two full-time jobs almost.
00:28:39.000But that's going to give you a level of security where your essentials are handled while you build your stuff up.
00:28:56.000Number two, decide on your strategy as far as how you're going to acquire the house, if you're going to live in the house or if you're just going to not live in the house or if you're going to live in the house for a year and then rent it out.
00:29:13.000Definitely take into account where to buy, how close is it to a major economic center, how close it is to food, shopping, entertainment, et cetera.
00:29:27.000Understand financing that the terms of a loan are just as important, if not more important, than the actual type of loan.
00:29:40.000Your income and expenses, you really have to understand that going in.
00:29:45.000And even when you start off, you also have to keep your eye on it because that most likely will change over time.
00:29:53.000How much money do you think they should have in reserves by the time they close on the house?
00:31:20.000That's where that is an emergency because the last thing you want is for them to have some type of health issue because it was like 100 degrees in their unit, right?
00:31:30.000And if it, and if it's a situation where there's a major fix on the AC, like that's not, that's not something you could put.
00:31:38.000You have to deal with that immediately.
00:31:41.000Or if their stove doesn't work, which, by the way, guys, AC not working, water, some type of plumbing issue that makes the water not run, not providing a stove or a fridge.
00:31:53.000These are things that are considered unlivable that if you do not fix within a certain allotted time, you can have serious issues with the city or the county, as in fines, et cetera, et cetera.
00:32:04.000And they can not pay you rent and be fine, right?
00:32:07.000Well, there's a process they would have to go through to get to that point.
00:32:10.000But the point is, you don't want it to get to that point, is what I'm saying.
00:33:03.000Yeah, just, I mean, yeah, but that's that's a big one.
00:33:06.000Um, obviously, paperwork, et cetera, et cetera.
00:33:10.000I strongly encourage everyone to have a lease.
00:33:16.000Um, and yeah, like even things like take taking in security deposits, there are laws and rules regarding how you keep security deposits, how well, how you should maintain security deposits when the tenants are in the unit.
00:33:32.000And there are also laws governing when someone leaves.
00:33:36.000If you intend on keeping that security deposit, you have to make a claim in writing, et cetera, et cetera.
00:33:43.000By the way, there's a new law that just started this year where if someone is renting from you, you have to give them a flood disclosure in the sense that if Florida wide or Miami, yeah, yeah, it's Florida-wide.
00:33:56.000So you have to disclose to them, you know, in writing, even if you've never been flooded out, that you know, this place has been flooded, has not been flooded.
00:34:37.000I guess what they're saying is if your property is in a high-risk flood area, I guess the intent is to notify the tenants so they're aware of that.
00:35:06.000I was going to say that's this is important stuff.
00:35:07.000Like if you live in a tornado area, right?
00:35:11.000An area prone to natural problems or disasters.
00:35:14.000There's more than likely going to be some type of law in your state or area where you might have to disclose certain things or have certain things in place.
00:35:21.000So obviously check what your local law to make sure that you're complying with everything as a landlord.
00:35:27.000But yeah, here in Florida, I guess we have a flood thing.
00:35:29.000I'm sure there's probably hurricane and tornado stuff in Texas and Oklahoma.
00:35:42.000So when it comes to something as simple as raising the rent, like in Florida, specifically Broward County and Miami-Dade County, not sure about the other counties, but you have to give them 60 days' notice before you raise the rent.
00:36:01.000Some states even have limits on how much you could raise the rent, et cetera, et cetera.
00:36:09.000If you don't follow these and someone challenges you, yeah, you get yourself in trouble.
00:36:15.000So that's what I mean by definitely keep in touch and keep track of local laws and regulations.
00:36:21.000Next, number eight, decide whether you want to self-manage or hire a property manager.
00:36:27.000If you're doing one or two properties, or even depending on what your schedule, maybe up to four, probably can self-manage as long as you're responsible.
00:36:37.000And like I said, you're keeping up to date on things.
00:36:40.000And that'll probably be your full-time job at that point if you got four, right?
00:36:45.000No, you could, I think you could, I mean, if you have good properties, they're well maintained.
00:37:24.000And then as far as property managers go, I mean, that could be a discussion within itself.
00:37:32.000I would say your best bet is to join networks of real estate investors in your area and get referrals, which is how I tend to do a lot of stuff, especially with vendors, et cetera, et cetera.
00:37:56.000So a lot of people, obviously, real estate is the buying and selling, leasing of real estate.
00:38:03.000But I would say half of real estate is building relationships.
00:38:08.000Your best deals are probably going to come from people that you either know or people that you know lead you to deals.
00:38:16.000The most reliable vendors are, once again, they're going to come from people that are part of real estate investor groups through your personal network that can lead you to people that they've already used for years, decades, etc.
00:38:33.000So once again, I cannot understate this.
00:38:37.000Real estate, half of it is building relationships.
00:38:42.000So I wouldn't recommend anyone try to just do this on your own.
00:38:46.000Yeah, there's a lot of resources out there, but the most important thing would be to get local resources, like real estate investors, people in the real estate business, and just leverage their experience.
00:39:01.000And then number 10, how big do you want to scale?
00:39:05.000Some people, one, two, three, four are fine.
00:39:11.000And if you are going to scale big, I would say you definitely need to have systems in place or else it's just going to happen.
00:39:19.000That was one of our mistakes was implementing systems too late.
00:39:23.000And like right now, what we're doing is, as you guys know, I haven't brought a property in a little bit for a few months now.
00:39:28.000And that's because we've been really refining and making sure the catalog, the portfolio that we have now is all like every house is profitable, fixing problems that are some of the houses have because I bought a lot of them too quickly.
00:39:43.000And right now we're catching up and dealing with, okay, this house has these problems.
00:39:50.000So I would say if we could do one thing different, it would have been like me being more organized from the beginning and making LLC for each house from the beginning, opening up a bank account from the beginning versus I'm 10 houses in, 11 houses in, and now I'm like going to the bank rushing, trying to open up bank accounts, then putting them into our database and then doing everything later, which I think now we've pretty much got a hand on it, right?
00:40:12.000We're finally like looking at profit loss statements.
00:40:14.000We're looking at everything and now we're getting a real bird's eye view, but it took a while to do that.
00:40:18.000And we had to kind of like stop purchasing to assess what we have, control that, figure out where we're bleeding money, whatever, and then kind of go from there.
00:40:27.000So right now, me and Roger have been kind of doing that where we're figuring out the performance of each house and figuring out the best way to go from here.
00:41:02.000You know, so it's like, it's better to just get them used to having to deal with you in a certain way from the beginning versus like switching things up later.
00:41:18.000So again, quick little recap for you guys.
00:41:20.000In case you guys get your questions in, and obviously this is a shorter and sweeter show.
00:41:26.000Number one, have a goal, whether it's to have enough money coming in to pay off a specific bill or replace your income totally, right?
00:41:32.000Have that goal from the beginning of you getting involved in real estate, guys.
00:41:35.000If you just want some pocket change, obviously that's going to drastically differ from you want to replace your income all the way and be full-time free.
00:41:44.000That's going to heavily dictate how aggressively or how moderate you are when it comes to investing and what type of risks you're willing to tolerate versus some risks that you're not willing to tolerate, right?
00:41:53.000Second is decide on a strategy, right?
00:42:07.000As you guys know, there's some real estate markets that are more favorable than others, but the real estate markets that tend to be more favorable also tend to be more expensive.
00:42:13.000So what are you, you know, where are you going to get the most bang for your buck?
00:42:16.000For example, Florida is a desirable area, but prices have been a little bit volatile.
00:42:20.000They went up, then they're going down.
00:42:24.000You know, we're seeing a reset like in markets like Florida, Austin, whatever.
00:42:27.000But the Midwest, for example, though it's cheaper, it's more stable and you might not be able to command as much rent.
00:42:33.000So it depends on what your goal is here and understand the market.
00:42:36.000Next, number four is financing, right?
00:42:39.000Making sure that you get good loan terms, right?
00:42:41.000If you're going to go ahead and get a, you know, if you're going to go and live in a house, you're obviously going to get better financing terms than if you're going to buy as an investor because you're going to have to put more money down.
00:42:49.000Interest rate is going to be a little bit higher, et cetera.
00:42:52.000Five is going to be understanding your potential income and your expenses.
00:42:55.000Roger gave a rule, a rule of thumb where you want to have somewhere between 5% of purchase price set aside of the house.
00:43:02.000So if you buy a house for $100,000, you want to have $5,000 kind of on the side to deal with any repairs or fixes.
00:43:09.000And if you don't have that, when you collect rent, let's say you collect $1,000 a month from a tenant, put 5% to 10% of that away for that cause of having your reserves to fix things because things will break.
00:43:25.000Learn how to screen potential tenants properly.
00:45:01.000That's a very special use case for only very experienced investors.
00:45:05.000Class C is where working class people usually occupy those.
00:45:12.000So think of people that are working in fast food or service industries, usually working paycheck to paycheck.
00:45:22.000Class B tends to be your professionals.
00:45:27.000Class B, think of like policemen, firemen, nurses.
00:45:31.000And then class A are basically people that have enough money to go out and buy a house and they have really good credit, but they decide to rent.
00:45:40.000So think of doctors, lawyers, IT people, et cetera, et cetera.
00:46:32.000Yeah, so definitely, you know, guys, 680 and above for credit score.
00:46:37.000And then obviously, depending on the class that you have of type of people, but I would say most the best to invest is probably C and B, I would assume.
00:47:27.000And C is probably the class that has the biggest potential for appreciation because a lot of times C neighborhoods turn into B. Gentrification.
00:48:06.000If you're that type of person, you're handy, you know, you don't have any issues fixing stuff.
00:48:12.000And if you're working, you're not that busy or like I said, or you don't mind people calling you at certain times, complaining, et cetera, et cetera.
00:49:27.000Are you trying to get in as an investor?
00:49:28.000Are you trying to get in as a fixture on Flipboard?
00:49:29.000Are you trying to get in as a real estate agent?
00:49:32.000Are you trying to do Airbnb arbitrage?
00:49:34.000It depends on what you're trying to do because as a developer, there's so many different realms within real estate that you can kind of get into.
00:49:41.000Do you want to be a broker like Roger, who, you know, you went from a real estate agent to like now you have a brokerage where you basically run a management business for people, right?
00:49:50.000So it depends on what you want to do, but there's so many different avenues you can go.
00:49:54.000I mean, I would advise Greg to look up, just type in real estate investor club and then the city or the county you're in and see what pops up and start going, you know, reaching out, connecting with them.
00:52:15.000I've heard a couple of real estate investors complain about Michigan that apparently there's really bad squatter laws that benefit squatters and not landlords.
00:52:23.000But that's, I don't know specifically.
00:52:26.000Because even in a troublesome market, you can still find good deals.
00:54:46.000And he's a member of Castle Club, which makes sense.
00:54:48.000Dude, I would say if I had that kind of money saved, dude, I wouldn't get a single family home.
00:54:57.000I would try to get a duplex, a triplex, or a fourplex, man.
00:55:00.000Like, I think house hacking is most effective when you have multiple tenants.
00:55:06.000That's where you really get the bang for your buck because you can get the single family house and then rent it later, but why do that when you can just try to get yourself a fourplex or a triplex or a duplex at least and have some of that rent offset?
00:55:20.000Yeah, I mean, I agree with what Myron is saying.
00:55:24.000If you could get a triplex or a fourplex, even if you're getting on under terms that require you to live for a year, you could do that, move out after the year.
00:55:35.000Now you have three to four units paying money in.
00:55:39.000Now you could get that $700 to $800,000 house easier.
00:55:42.000And also keep in mind, bro, when you house hack with like, let's say, for example, you're looking at a house, a duplex or a triplex for a million dollars.
00:55:52.000So you can easily get control of that property because you're only putting 3% to 5% down versus buying as an investor, you got to put 20% down.
00:56:01.000So I would say try to find a duplex, triplex, or fourplex, bro.
00:56:03.000So you can get away with putting as lease down as possible and have your tenants offset that high mortgage that's going to come your way.
00:56:09.000Because the important thing is to close the deal and control the asset.
00:56:13.000And you just got to live in it for a year.
00:56:20.000Got to deal with tenants and live next to these guys for a year, but I think controlling the asset is good.
00:56:25.000But also keep in mind, California, you know, do you want to, if you really got to live in California, I guess, but I always tell people get out of California if you can.
00:58:46.000Like in an area, like in a brickle area, right?
00:58:51.000I can make the argument that, yeah, depending on the length of the lease, what's going on, you potentially could.
00:58:58.000But from my experience, most people usually have their own stuff that they want to bring in.
00:59:03.000So I would say you really need to know your market.
00:59:06.000But if I had to, I personally would go with unfurnished, unless, of course, you're trying to do medium-term rentals or if you're trying to rent out to like nurses or people that are going to be there for like four, five, six months, etc.
00:59:22.000In that case, then yes, you would want to basically be furnished.
00:59:28.000Or if you're doing short-term rentals, right?
00:59:30.000And that would be like an A-class property that we discussed before because these people are going to be more than likely to care about the stuff, not destroy it, whatever.
00:59:35.000But doing furnace and like a lower and like a lower-class thing, they're going to destroy your stuff.
01:00:49.000The second step, I would say, is find yourself a good mortgage broker and see if he can do better than your bank and just have them kind of fight against each other.
01:00:59.000But yeah, you need to know how much house you can buy before you can do it.
01:01:04.000Pre-approval is guys, literally required because that's going to dictate what houses you can look at and which ones you can't.
01:01:09.000And then honestly, don't go for the house that you're like, you're just barely qualifying for.
01:01:13.000Like if you get a pre-approved for a $500,000 home, you'd probably want to try to get something in the $300 to $400 range.
01:01:20.000You know, you want to give yourself a significant amount of wiggle room for affordability.
01:02:48.000So, there's really two ways you're going to get loans if you're going through a bank, and that's going to be FHA, which you need five percent down.
01:02:54.000Message in and clarify for us, bro, just in case, but go ahead, yeah, or a conventional loan, which means you need 20% down.
01:03:00.000And then, and then, so then the question becomes: well, what do the average homes in your area go for?
01:03:06.000And then figure out, well, what would be 20% or 5% of that?
01:03:10.000And then that tells you how much you need for a down payment in it.
01:03:13.000But then you could factor in another 3% to 5% and closing costs and other expenses on top of that.
01:03:30.000AI says the best strategy for me to cash flow my home.
01:03:34.000Okay, so you said two things there that actually conflict: midterm rentals and pad split usually don't go hand in hand.
01:03:43.000If you're thinking midterm rentals, which are usually around six months, eight months, stuff like that, where you want to check out is Furnish Finder.
01:03:51.000This is where, by the way, that's where the furnish units would come in.
01:03:55.000And one of the best sources of midterm rentals is if you have a property that's near what's known as a teaching hospital, which means you have a lot of doctors and nurses that are coming through on a regular basis for anywhere from four to six to eight months because they're learning or they're teaching some type of program.
01:04:14.000And they tend A to pay a premium, and then B, they're going to want a really nice furnished apartment because obviously doctors and nurses work really long hours.
01:04:25.000But pad split, like I said, it's more for people renting rooms.
01:04:31.000At least that's what's the people I know that use that.
01:04:36.000So, um, but as far as the best strategy for you to cash flow your home, I mean, I don't know what the setup on your home is.
01:04:45.000If you're talking about renting out rooms, I don't know if you have a main house and then a basement, if you have an accessory dwelling unit in the back.
01:04:58.000So, Chug, do you want to give us an example of the layout of the property that you're talking about?
01:05:05.000so I'd be able to give you a little bit more better advice any advice in Canada or should I already have 230 on it Any advice investing real estate in Canada?
01:05:33.000That's that's that's the best advice we could give you.
01:05:36.000I mean, but see, this is a perfect example.
01:05:38.000I already have home network, but I hope, but now my question would be: okay, this is this is the way you should evaluate this.
01:05:48.000You should really look at what are your expenses in Canada, right, versus how much money you could potentially make renting it out versus taking that same equity in cash and doing it.
01:06:03.000I mean, you say the states, the states is a very big place.
01:06:06.000I don't know where specifically in the States, but I would say make that analysis and use that to be the basis of your decision.
01:06:13.000You should look at, like I said, potential income, what your expenses are, what your cash flow is in Canada versus taking the cash and the equity and bringing it to the states.
01:06:26.000And then whichever one is better, I would say go with that.
01:06:40.000Martin, what's the best asset protection to shield yourself from lawsuits?
01:06:43.000I'm stuck in NYC due to work, and NYC doesn't offer a lot of asset protection, even with LLC and a revocable, irrevocable trust.
01:07:17.000That goes for property insurance, personal liability, et cetera, et cetera.
01:07:23.000And you can get umbrella insurance through most of your car insurance companies.
01:07:27.000The only problem is they may require you to have a bit higher protection on your car insurance before they will extend the umbrella insurance.
01:07:41.000When it comes to your, I'm a 24 PNT veteran in Houston, $3,900 a month tax-free, and I'm currently using VR and E to get my CDL for trucking.
01:07:51.000My plan is to go OTR for a year, save up 50K, crush that, max out my Roth IRA, and then use my VA loan to buy, I think, a Foreplex.
01:08:01.000My thing is blocking it, but with 0% down tips.
01:08:08.000So, although I'm a veteran, I'm not 100% sure, which I guess I'm not.
01:08:15.000I want to say I should know what PNT means, but I assume you mean it sounds like you might be 100% disabled through the VA, which, if that's the case, the first thing I want to tell you is that you are, I want to, I say I believe in Texas, you are 100% exempt from property taxes.
01:10:12.000And then also, like, why would you buy the house to try to first, you said you close on your apartment, so I'm assuming you really mean a condominium.
01:11:06.000So I would strongly advise you guys to really think about something unless unless you just have a total lemon that's just costing you ridiculous money every year.
01:11:21.000And a lot of the times it's easier to hold and find ways to cut costs than to, you know, I mean, you could go ahead and sell it, but like a lot of times you're going to, depending on what it is, and then it's a condo.
01:11:41.000But in a lot of situations, guys, condos like don't make sense from a, you know, investor perspective for most people outside of extraordinary examples of like what we got here.
01:12:12.000So there most likely will be a licensing requirement.
01:12:17.000But in lieu of that, or while you're working on that, I would say go work for a property management company that manages the types of properties that you would like to manage so you could learn the business.
01:13:22.000He's probably going to have to come out with way more money cash.
01:13:24.000Yeah, but yeah, he's going to need to talk to a mortgage broker.
01:13:28.000I mean, I've worked with mortgage brokers where they're like certain, there are certain products for people that are non-U.S. residents to buy.
01:13:37.000But like a typical convention and 30-year fix is probably not going to be available to him, I'm assuming.
01:13:41.000No, I mean, it will be just higher interest rates or more money down, et cetera, et cetera.
01:14:08.000Because that's going to obviously change things a lot too.
01:14:11.000Guys, try to give us as much information as you can, like how much you earn, where you live, because that will heavily dictate what we can, you know, how we would dispense advice to you.
01:15:12.000The additional thing you should be doing besides saving is building relationships.
01:15:17.000If you're a senior real estate major, you should definitely be talking to your professors.
01:15:23.000Any clubs, associations, et cetera, et cetera.
01:15:29.000You should definitely leverage your relationship with your professors and get them to introduce you to people or point you in the right direction in your local area regarding people that you could potentially get mentorship from.
01:15:46.000And then, and as far as where, what type of jobs you should look for, I mean, it all depends on what you're trying to do.
01:15:54.000I mean, you could go work for a big property management company.
01:16:23.000So the answer to that question is it all depends.
01:16:26.000So in a single, if you're renting out single families, typically the tenant pays for everything, right?
01:16:35.000If you're talking about a multi-unit, like a duplex, triplex, quadplex, here in South Florida, we have some that are separately metered and we have some that only have one meter.
01:16:50.000The ones that are one metered, it becomes a little bit more difficult for you to figure out how to charge each tenant what they're actually utilizing, which is why most of the time the landlords just pay for that.
01:17:04.000But then they just add that, not necessarily add that, they account that in the rent pricing, right?
01:17:12.000Whereas the ones that are individually metered, obviously easier for the landlord.
01:17:18.000And once again, you account for that in the rent price.
01:18:01.000What are your options for pre-approval?
01:18:03.000Just like I was saying to everyone else, yeah, check with your bank first, see what they have to say, then see if you could find a good mortgage broker and just see what in a six like 680 and above, you'll probably get pre-approved for like 500 to 600K.
01:18:18.000Yeah, but yeah, you're making good money.
01:18:56.000because they paid so much for it in 2022 they want to they want to sell it for the same thing so don't lose a before i remember people overpaying 100 to 200 000 over asking man It was crazy.
01:19:40.000It's a five-bedroom, three and a half bath.
01:19:42.000It has a basement, but because the basement doesn't have direct access outside, I have been told it alone can't be a rental space, no ADU, no, or a DADU.
01:19:50.000Okay, so then I guess you're talking about potentially renting out some rooms.
01:19:56.000But let me ask you this with the bedroom.
01:19:58.000You know, assuming that it's, I mean, the basement, assuming that it's legal for you to rent it out, how much would it cost for you to put direct access?
01:20:11.000Because I got to think that your basement has way more square footage than like your combined bedroom space, right?
01:20:20.000I mean, obviously, I assume you're living in at least one of the bedrooms.
01:20:23.000So I would say maybe something that you might want to look into.
01:21:36.000Like, even if you want to get a house in Queens, bro, like a small three-bedroom, two baths is going to be one to two million dollars easily.
01:21:42.000So New York City is a whole other, whole other game.
01:21:47.000I'm grinding in a good path financially and career and life-wise with the girls.
01:22:55.000Yeah, I mean, you're just going to have to explore some options through a mortgage broker to get a loan.
01:23:00.000But it's good that you're kind of already getting things going ahead of time.
01:23:04.000So, yeah, look into the type of loans that you can get as a foreign national perfect example of how buying condos is a bad investment.
01:23:14.000Florida, 40-year fixed, 40-year tax reassessment destroyed the condo market in Florida.
01:23:18.000Last year, condos lost around 100 to 200K in value, plus a big property tax bill.
01:23:22.000Yeah, I tell you guys all the time: don't buy condos, bro.
01:23:24.000Like, they're like, outside of extraordinary situations, most of the time, buying condos is not the way to go because you're going to pay HOAs.
01:23:34.000Sometimes they could be a headache to deal with.
01:23:36.000Nine out of 10 times, the only times it makes sense to buy a condo is if you're going to live in it and you're comfortable with the fact that you might very well lose some value on it.
01:23:46.000Hey, guys, don't forget to like the video, by the way.
01:27:30.000So that's what it really comes down to.
01:27:32.000You said you're making $9K a month, so I'm assuming you're more than likely probably either a journeyman or past apprentice and you probably work a full-time job.
01:27:40.000You know, maybe just, I would say, focus on your career and get a house on an FHA.
01:27:46.000And then if you want to do a burr later on, you can, but just understand that it's not going to be as easy as people think.
01:27:50.000Like fixing and flipping is not as easy as people try to make it seem, dude.
01:27:56.000I'll just tell you what some hard-money lenders I know are saying that it's getting really hard.
01:28:03.000Well, anyway, in my neck of the woods in South Florida for people to make money flipping houses.
01:28:09.000So, and you also got to factor in that when you buy something and then the time it takes you to rehab it and flip it, like the market could change.
01:28:20.000And yeah, which I think you're better off buying and holding that house.
01:28:28.000And if you see an opportunity and you got a little bit of, you know, some more resources, get something else.
01:28:34.000But yeah, I'd be very careful entering house flipping right now.
01:28:39.000Yeah, especially when you got like a full-time job and you might not have the skill set to be able to do it, you know, right away.
01:28:44.000So I think buying and holding on an FHA, bro, is going to be a bit safer.
01:28:48.000Of course, there's more potential upside with Burr, but understand that it's going to be significantly more time investment on your side.
01:28:55.000And it seems to me like you got a very promising career where you're working full-time at least.
01:29:01.000Haitian says, I make $100K a year and experience says I have a $755 credit score, but I only have $5K in savings at the moment.
01:29:08.000Should I save up at least $20K to cover one year's rent just in case before I buy a property?
01:29:27.000should i don't know if you just started making that but if you've been doing that for a year you should have way more than that saved all right Cool.
01:29:45.000Guys, we got after ours here in about 30 minutes or so.
01:29:49.000Roger, Roger, it's Roger at RogerLasad.com if you want to ask questions.