Jason reads a nice letter written by Gary who toured with Jason during the Memphis Property Tour. Jason introduces a long-time client, Philip to the show to talk about his real estate investment portfolio. Philip is unique because he started his real estate journey doing hard-money lending first and then purchasing income property. He talks on some of the mistakes and key lessons he has learned on today’s show.

Key Takeaways:

[3:00] Jason regrets dropping out of typing class. Send him a voice mail, not an email!

[8:00] Jason reads a lovely note written by one of his clients, Gary.

[12:00] Jason welcomes Philip to the show.

[15:10] Philip did 10-15 hard-money loans before he purchased his first property.

[23:00] Philip chose class A properties, because he liked the leverage and stronger appreciation.

[31:10] Catering to a diverse set of income classes will help you in both a good or bad economy.

[34:10] Forward your addresses so important mail gets directly to you and not to your rental property.

[36:15] A lot of clients have been successfully using virtual mail boxes. Jason explains what they are.

Mentioned In This Episode:

VirtualPostMail.com

TravelingMailBox.com

USGlobalMail.com

PostScanMail.com

Tweetables:

Income property is the most historically proven asset class in America, if not the entire world.

It’s worth getting an inspection on each property.

Keep your properties up to 27.5 years, because that’s the depreciation schedule.

Transcript

Jason Hartman:

Welcome to the Creating Wealth show. This is episode 514 and this is your host Jason Hartman. Thank you so much for joining me today for episode 514. We’ve got a great story, a case study, an interview with our client who has been a client of ours for many years. He’s name is Philip and he’s just a great guy and you’re going to hear his story. Quite literally, I think it’s fair to say, it’s a rags to riches story. He has done an incredible job investing. Starting out really just kind of looking, dreaming, wanting to get into this game, and he’s just done a fantastic job at it.

You’re going to hear his story first hand here in just a few minutes. Oh, a couple of things, first of all, I really, really appreciate listener engagement. SO, I love that. We love to get emails from you, we love to get reviews on iTunes and Stitcher Radio, of course. We just appreciate engagement, so thank you for that.

However, I do have a request, but first before I make my request, I will make a confession to you. I can not type very fast. I use the hunt and peck method of typing. It’s really been a huge handicap in life. Gosh, should I even admit this? I will. In 8th grade we had electives and one of the electives, you could, you could choose four electives the way my school worked in Los Angeles, California. You could choose four electives and through out the school yeah and they’d be, you know, what, eight weeks each or something like that. Typing was an elective and I took typing class and I dropped out, being an idiot, because I thought that, well, typing is for secretary and I’m not going to be a secretary, but little did I know typing would be a very much in-demand skill. Typing would be a very much in-demand skill as the computer revolution took over.

So, yes, I am showing my age. Of course, we had computers at my school, but not many people used them. I didn’t really use them. Yeah, typing, I dropped out of typing class like a fool, like a moron, ever since then it’s been a huge handicap. In fact, I would be you, if I knew how to type well, I probably would have earned a couple of million extra dollars by now. Little did I know, email would dominate the world and boy, it’s a huge handicap, it really is, not being able to type well. I do use dictation and I like it pretty well, however, if you’re using dictation on your smartphone, I use it on my iPhone, or on your computer, I use it on my Mac.

I gotta tell ya something, you could really ruin a relationship with that diction stuff if you don’t look carefully and I don’t always look carefully when I dictate things, because it completely misconstrues words and meanings sometimes. So, hopefully that’ll evolve and get better and better. So, my request for you is this, instead of sending me an email, please go to JasonHartman.com or if you’re listening to not the Creating Wealth show, one of the other shows, say for example the shows ever rebroadcast on another one of my shows, you can go to Hartmanmedia.com where all of my shows are. Either one, either website, it doesn’t matter, and use the little send voice mail feature.

It is super easy to use and send me a voice mail that I can play on the air and, you know, it’s just rather than email and me reading an email and then these issues are pretty complex. A lot of these questions that you ask. It’s much more lively and better for the show if the listeners hear it with your own voice and your own inflection. The meaning has a multidimensional aspect to it when it is voice rather than the written word. Please send me your questions. I love your questions. I appreciate your questions, I appreciate your comments so much, and please use the voicemail feature. Many of you have and I just wanna remind you please do it that way, okay.

Also, you can schedule an appointment with me at JasonHartman.com/Jason as a caller to call in to the show. Really, if we are able to have a dialogue, that’s the best form. IF you have a complex question, because any time you ask a question, I may need to ask you a question and we may need to drill down on a point further than we can in asynchronous, non-real-time type of format where it’s either a voice mail or an email. Again, voicemail is preferred. Please leave your voice mails there or schedule an appointment, call into the show, and we’ll talk real time and I can answer your questions there. So, that would be great if you use that awesome little feature.

Well, I am off to Europe here in a couple of days. I am going to a conference there and I’m also going to have a little fun, little vacation time. Of course, I’ve been to Europe many times. On this trip I’m going to England, I’ve been to England before, so I’m not going to be able to claim another country stamp in the passport. I’m going to Croatia, been there a couple of years ago as you heard on the show, but I think this time I will get to at least one new country, that would be Ireland, possibly. I have not been to Ireland. There are a couple of countries around Croatia that I can probably visit too. So, you know, I wanna get another stamp in the passport and be able to say instead of I’ve only been to 74 countries; yeah, I know, only, that’s kind of a ridiculous statement, maybe I’ll be back a couple of weeks and I’ll be able to tell ya I’ve been to 76 or 77 countries. Who knows. We shall see, we shall see.

So, I’ll be broadcasting from my Europe trip and telling you about some of the insights. I always love to get some real estate insights from these markets as I did a lot a couple of years ago when I was in Croatia, Spain, a couple of other countries. Talked a lot about that on the show and thought it was pretty relevant and fascinating versus what we’re facing today in the US. Good perspective on investing. So, look for that.

Upcoming episodes. We’ve got some fantastic upcoming episodes. Some more case studies like today’s episode. Some more interviews with clients, just some great stuff and that leads me to, I want to make an invitation. Gary, I’m not going to mention your last name, but Gary, you’re listening. I would like to invite you to be on the show. I wanna share a little note that you sent me about the Memphis property tour and thank you so much for your kids words in sending this note.

I just thought it was really good. I wanted to share with the listeners, but I would love to have you on the show as well and I’m not sure if you’ve been on before, maybe you have, I just can’t remember. You know, we’ve only got like 500 and some odd episodes behind us, so it’s hard to remember all of them, even as I am the one recording them, but this note you sent me a few days ago about the Memphis property tour.

It said, “Jason, I had a great time last weekend. I always get motivated to get back on track with investing when I attend your events. So easy to get distracted with the other demands of life. My favorites, getting to know the two providers,” in other words, our local market specialist, “The ultimate reason for going and it was more than achieved. Graceland, I have to admit I thought it was going to be extremely cheesy,”

Graceland, of course, is Elvis’s home that he’s talking about, “But I was blown away. It was a spiritual experience walking through that mansion immersed in his (Elvis Presley’s) life with my iPad story teller. I had not idea how dedicated he was to philanthropy and to being together with friends and family enjoying life. Truly inspirational and a complete shock for me. Really enjoyed sharing the bus with your mom and re-living Elvis’s era through her eyes. What a gem your mom is.”

By the way, it happens to be Mother’s Day, so thank you Gary. That’s great thing to say and happy Mother’s Day to all those moms who are listening. “Eating BBQ, my favorite, in a car museum, my favorite, could not have been better. Spending time learning from Fernando. What an inspirational and giving individual.” By the way Gary, I gotta say, so true. Fernando has been a wonderful client and a wonderful addition to our team. We’re so happen to have him. “Hearing the investing stories of others. It is really helpful in keeping all the bumps of rental property investing in perspective when you are reminded that it is not just your world where evictions, leaky roofs, and property damage occur. Thanks again, you provide an incredibly valuable service, -Gary.”

Gary, thank you so much for the kind words and the nice note. Really appreciate it. You know folks, I just can not stress enough. I know we’ve got thousands of people listening and millions and millions of downloads of the show and people in 164 countries around the world listening to this show. Whatever you can do. You know, we’ve had clients fly in from Asia, Europe, South America, just many places around the world to our events. Please make it a priority to attend one of our live events. Come and meet me in person, meet our team in person, and most of all, meet our clients. Meet our clients. Hear from their stories, hear from them directly. Hear about their experiences, their triumphs, their tragedies.

You know, this is hardly perfect. We have ups, we have downs, but overall the trajectory is up, because income property is the most historically proven asset class in America, if not the entire world. I’m just going to start saying it’s the most historically proven asset class in the entire world, because I think it is. I’m pretty sure it is and if anyone disagrees with me, call into the show and let’s talk about that topic, because I would love to hear some opposing view points on it. But anyway, without further adieu, go to JasonHartman.com, check out upcoming events, check out the properties, check out the home study courses. There are some great stuff there, become a member so you can get on our monthly members-only calls with Jason Hartman University. There’s just a lot of great stuff with the website. So, that’s JasonHartman.com and without further adieu, let’s hear from our client, a great story from Philip. Here we go.

Hey, it’s my pleasure to welcome one of our clients to the show and that is Mr. Philip. I met him several years ago. He was a podcast listener and came to one of our events in Southern California and he’s just got an awesome story and I gotta tell ya, listeners and Philip, this is way overdue. We should have had him on the show a long time ago. Many of you have met Philip at our events before. He was at the last Meet the Masters event that we had in January. You know, he’s just a great guy and he’s got a great story, so Philip, welcome, how are you doing?

Philip:

Hey Jason, how are you?

Jason:

Good, good. Hey, it’s great to have you on the show, like I said, this is long overdue. We should have done this two-three years ago.

Philip:

I think I was reluctant podcaster.

Jason:

You were a little reluctant. I had to twist your arm a little bit, but I just hit you up today and sent you a note and you said yes, so I thought, let’s do this, this is awesome. Well, hey, you’ve got a really great story and I just wanted you to maybe take the listeners through it and let’s talk about some of the tips and tricks that you’ve, you know, learned over the years as an investor and stuff like that. So, it all started with you found my podcast, right, tell us how it evolved.

Philip:

Yeah, I discovered your podcast I think back in the winter of 07, so probably before the crash and so I started listening I think in December and as soon as I heard it I was like, man, this is good. So, I just started going through all of them. I’ve actually heard all of your podcasts.

Jason:

Every single one of them?

Philip:

Yeah, I think so.

Jason:

Wow. So, 2007 and what did you do? Find the podcast on iTunes just searching real estate investing.

Philip:

No, I went to your first event I think in 2008, I think, and yeah I was there to your Creating Wealth show there and didn’t invest for a little while, because with my work. I fix hail damaged cars, so I travel all over the US, so it was kind of hard for me to think about investing in real estate while I was traveling. So, then I started thinking about hard-money lending and so I started doing that with your Georgia provider in 2012, 2011. Yeah, it was fall of 2011.

Jason:

Right and I think I remember your first deal. You know, you didn’t start out with an actual real estate deal. You started out by becoming a lender on real estate and I think your first deal, if I recall, and correct me because I may not remember this correctly, but I think like a small $40,000 hard money loan and you probably got, I assume something like 12% on that deal. Was that about right? Was that your first deal with us?

Philip:

Yeah. I think it was. It was 12%, but then I quickly, there was another provider there in Phoenix who was doing 12% plus a $500 up front fee. So, I went back to the Georgia provider and asked for $500 upfront plus 12% and they matched it. So, stuck with them and did a bunch of loans with them. I actually became one of their primary, you know, money sources at one point. Yeah, that’s how I got started in deals I’d say.

Jason:

Yeah, fantastic. Good. So, how many loans did you do, because most people that come to us, they start out by buying properties. You started out by doing loans, how many loans did you do before you did your first real estate deal where you actually purchased income property?

Philip:

Probably, I don’t know, maybe 10-15. Something like that.

Jason;

That helped you just build up more and more capital and you have your own company, so you were working your business at the same time and when did you acquire your first income property?

Philip:

My first property was I think the spring of 2012. So, yeah, I bought property in kind of east of Atlanta and my first property actually turned out to be one I was forced to sell because the HOA, we had gone over the number of rental property.

Jason:

Oh, yeah.

Philip:

Yeah, that could be in that neighborhood. So, I had to sell it, actually. They sued me actually.

Jason:

Boy, that’s amazing. By the way, let me just explain to the listeners what happened on that deal. So, this is another one of the reasons I really despise condos, but this is not a condo we’re talking abut, but it’s just, they get more strict. It’s unusual that we see this in single family homes, but you see it more in the condo/town-home thing, but basically an HOA can, believe it or not, dictate what the rental requirements are, how long or short properties can be rented, and some of our clients are toying a little bit with like the Airbnb thing or doing renting their properties on short term rentals and some HOAs just completely won’t allow that. Some cities you can have problem with it. You know, they can, they restrict. They can say we don’t want more than, you know, 10% renters in the community or 20% or whatever the number they pick is, so yeah, that’s amazing. So, you sold that one. Was the market going in that direction, by the way?

Philip:

It definitely was. It was an appreciating marketing and I made, I think I made about $20,000 on that property. So, it turned out good.

Jason:

So, nothing to complain about, really.

Philip:

No, it turned out good. After my first one, I quickly gained confidence and I saw how, you know, basically simple it is to purchase properties, so I quickly just started buying more properties after that and since I was finding the deals, you know, I solved everything up front, so I was pretty much pick ones if I wanted to keep it or just lend on it and go on out.

Jason:

Okay, let me mention something about that. So, we’ve had this kind of odd scenario happen sometimes, you know, in every product, there’s a supply chain. You know, with real estate there’s a supply chain, right, so did you, I’m wondering, we had this happen a few times and it probably happened a few times with you too, but I don’t know yet, we’ll see how you answer the question, did you actually lend on a property to our local market specialists and you were the hard-money lender, they rehabbed the property, then you bought the same property on which you made the loan for them to acquire and rehab it? Did you do that?

Philip:

Yeah, I did.

Jason:

How many times did you do that one?

Philip:

I did it most of the time, really.

Jason:

Oh, really, that was the way you did it most of the time, huh?

Philip:

Yep.

Jason:

So, you really knew the ins and outs of that deal. I mean, you saw the margins that the rehabber, the local market specialist was making on the deal. You know, you were the lender so you got paid maybe somewhere in the neighborhood of 12% to loan the money and then you bought the property and turned it into an income property and kept it.

Philip:

Right.

Jason:

Okay, good. Do you want to expand on that idea a little bit? Is there more to it?

Philip:

Well, I just think that if you can, I kind of like doing this, basically, I like to, you know, concentrate at this point on one market mostly and if you can do the lending, it’s nice because you get to know the area, you get to see the prices of what’s going on and you get to see, you know, these properties up front and you get to pick the property that you want and I just think it gives you an advantage and I think it’s a good way to go if you can do it.

Jason:

So, you started in, well, you learned about the podcast 2007, you came to an event in 2008, you started saving money, building capital, and then you started lending and you did quite a few loans on properties and then you purchased your first property and it was on which you lent, so you did it that way a bunch of times, so how many properties do you have now?

Philip:

Well, I got my first property in 2012 and so I ended up getting seven in Atlanta and these are like little bit higher end houses in the 140-150 range and then I got, I was closing my first fiveplex in Kansas City and that’s one of those nice ones and then I’m under contract under three other triplexes in Kansas City and two fourplexes in Little Rock.

Jason:

Fantastic. You’re building an empire, congratulations. That’s just awesome.

Philip:

I’m trying to.

Jason:

So, you mentioned and this is really kind of one of the tips, you know, one of the things maybe listeners want to hear about. We, honestly within our company, we really wrestled with this and for a long time, Philip, and you’ve probably have noticed this, the changes in our inventory of properties over the years, because I’m sure you’re going to the website and looking at the properties we have listed online. When you first came in contact with us, we were doing pretty much all kind of class A, maybe a little bit of class B type nicer properties and, of course, you typically get a much better tenant in those properties, but you know, typically also your numbers aren’t quite as good, at least on the face of it, okay, have you stuck with, you said, Atlanta, Little Rock, where else do you own?

Philip:

Kansas City.

Jason:

Kansas City, okay. So, in those three markets, have you stuck with the higher priced income properties and when we say higher priced, by the way folks, we’re talking $150,000. It’s not that expensive as real estate goes, but you know, we do these, you know, low priced cash flow oriented markets and that is sort of class A for our type of world that we’re in. Have you stuck with that or have you’ve done some of the lower end like class C type properties and if so, you know, what differences have you noticed?

Philip:

Yeah, I’ve always stuck with, you know, class A type, you know, higher-end houses, because I was really trying to maximize my leverage, you know, per mortgage for Fanny and that was my main reason. I was trying to maximize, you know, the amount of leverage I could get. I wouldn’t be inversed in getting a lower priced houses, but that’s what I was trying to do and that’s why I really went to Kansas City is because each mortgage was so high, basically a $400,000 for a Fanny mortgage, 30 year fixed for 5.25 is just great. You really got me into the idea of going into debt at fixed rates.

Jason:

Yeah, right, exactly. You know, that long term fixed rate debt is pretty darn appealing, it really is. So, with your first property that you re-sold rather quickly. You made $20,000 on that one and you had some loans, you were making some money on the loans, you were working in your business, how did the other properties go as you went along? I’m kind of wondering why you stuck with the nicer side, the class A type properties.

Philip:

Well, it was mostly for the leverage and I was thinking that the nicer houses might see better appreciation. You know, the houses in the 140-150 range. This is prices in 2012-2013, so they were a little lower at that point. These houses are now worth around 170-175 now. So, I was looking for that appreciation and good leverage and ideally good tenants. For the most part, I have good tenants, but I have had two that just walked off, you know, and just left. They left a mess too. So, it can happen with any house, I guess.

Jason:

Right, right, so how did that go? Did you recover from the security deposit or was it over the security deposit and if so, did you pursue a judgment against the tenants and send it to collection or what happen with those? You know, we want to hear about the bad experiences too. It’s not all rosy, folks.

Philip:

Yeah, I had a property management that places a judgment on them and I haven’t collected any money yet, but I got their deposit and that helped to, so it wasn’t too bad.

Jason:

So, when things like that happen, you know, what did you think? Did it occur that maybe this real estate thing isn’t really the right thing to do and you’re just going to give up or are you still, did you just kind of keep the faith and keep going and moving forward?

Philip:

I really just wanted to keep moving forward, because I knew that there were bumps in the road, but one thing, one last thing that taught me a little bit was particularly houses that are rehab, I think it’s worth getting an inspection on each property. I didn’t get an inspection on any of them and I think it is worth getting an inspection.

Jason:

Oh, definitely agree with that. You should get inspections, Philip, for sure.

Philip:

I think one thing to really look for is the roof. You know, what state is that roof in, how old is it, you know, how much more life could you expect of it. I think that’s pretty big. It’s a big expense that’s going to come off.

Jason:

Oh yeah, no question, no question. It’s going to come up eventually. In fact, I just sold one of my properties that was in North Carolina property, because, you know, I knew I wasn’t too far away from hearing about a roof and, you know, and then the buyer that purchased it from me and I did a 1031 exchange and bought two properties in Memphis by selling that one, but the buyer that purchased it from me, of course, they hit me up after their inspection and said, hey, you know, this is going to need a new roof and I said, that, I know, that’s why I am selling, that’s one of the reasons. I’m not giving you anymore money. You just gotta take it like it is. You saw that the roof was old when you bought it. So, you know, that’s what it is and they still went through with the deal and bought it.

I usually say, you know, keep your properties 27.5 years kind of jokingly because that’s the depreciation schedule and if any of you listening have properties older or not older than, but you’ve owned longer than 27.5 years. You really, really, really should consider selling them, because you run your depreciation schedule and it just makes sense to get another property and start that schedule again. The property doesn’t need to be new, it just needs to be new to you and one of the great things is you can do a 1031 tax deferred exchange and exchange it and not pay the tax, you just defer the tax indefinitely. So, I think the roof is a very good point, because roofs are not cheap. That’s probably the most expensive item. I don’t know. There can be other things occasionally too, but those are sort of surprise things. The roof is one you know about.

Philip:

The two other things that I’ve learned. One was definitely get terminate treatment on each house and that’s just something I didn’t think about. No one really talks about it and I did that for all my houses.

Jason:

You mean, a preventive, a preventive treatment?

Philip:

Right, yeah.

Jason:

Tell us about that. I mean, how much did that cost, what kind of treatment did you get?

Philip:

I got a five year bond and I think it was $500. It’s normally more, but I got a deal with the recommended vendor who does it. He treated each house, so I got a really good price and then it has a $125 renewal free per year.

Jason:

After the five years or each year during the five years.

Philip:

Each year during the five years.

Jason:

You know, that also depends on what area you’re in. So, some areas are much more prone to termite issues and I think Atlanta would be. You’ve got a lot in Atlanta. What are the age of your properties. You know, you got these properties, Little Rock, Atlanta, Kansas City, what age range are they usually?

Philip:

Well, the Atlanta houses are all 1987 to like early 2000s and then the Little Rock, I think the two fourplexes are 1970s, I think, and then the Kansas City multi-units are all new construction. Some of them aren’t even constructed yet.

Jason:

Right, right. Do you have a favorite out of the three markets that you in or maybe another market that you’re looking at?

Philip:

Not really. I like the appreciation of Atlanta, you know, with the houses, but I’m going to like the cash flow from Little Rock and Kansas City with multi-units. So, I think it’s just a nice portfolio all combined, really.

Jason:

Yeah, kind of diversify it and spread it around like that. Do you think you’ll move into another market? I mean, I think three is enough, but you know, I’d say to people they could do up to five or are you going just keep kind of double down in those areas that you’re in?

Philip:

I think I’ll probably double down in the areas that I’m in. I might be tempted by some other market if something attractive comes along, but I will be okay with just staying in those three markets, really.

Jason:

How long have you owned in Little Rock and the reason why I ask you about Little Rock in particular is because Arkansas is the most landlord friendly state in the country by a long shot and it’s really, really landlord friendly. So, I’m kind of curious to see how you experience plays out there over the years. It’s probably too new to tell, but how long have you owned in their now? Has it been a year yet or a little more than a year?

Philip:

No, I’m actually just under contract. Not having actually made the purchase yet.

Jason:

Oh, okay. Okay.

Philip:

I’ve got a lot of contracts right now.

Jason:

So what do you think about that market?

Philip:

I think it looks good, I think it looks stable to me and I’m not really expecting appreciation much, but I do like it from a stability stand point and with the units that I’ll have, they’re full price, so I like the idea of having properties rented to people with lower incomes and more middle class incomes, not just concentrated on one income that has multiple incomes tenant.

Jason:

So, what we’re talking about there is you’re not only, Philip, segmenting, you know, what I always say take the most historically proven asset class and diversify geographically, because all real estate is local and you’ve been to so many of my events and listened to every single podcast, which by the way, you deserve an award for that. You know, you’ve heard me say this stuff a million times, but you’re not just diversifying geographically, because you know, all real estate is local, right, but you’re also diversifying in terms of market segments by having those different income ranges in your portfolio, right, those different times of tenant classes.

Philip:

Yeah, so as the economy, you know, if it gets worse or better, you know, you’re more covered that way. It’s more safe.

Jason:

I agree with you and the other thing people will notice if things do get really bad again at any point, the thing that they’ll notice is they catch people on the way down. I mean, it’s not as a positive of an environment, but you know, you are providing housing to people who are moving down the economic ladder, you know, in bad times, and in good times, you’re providing housing to people who are moving up the economic ladder, so that’s why we like the properties that are below the median price in any given market and by the way, I gotta comment on your Atlanta stuff, because last year, I mean, it’s about 10% appreciate in that market. You’ve done phenomenally well.

Philip:

Yeah.

Jason:

I don’t know if you even know that. Do you keep track of the prices of your properties or, you know, I kind of tell investors not to worry about that too much, because it’s really a cash flow game, but gosh, it’s nice when appreciation does happen, right?

Philip:

Yeah, I don’t really, but I did look a few months ago really for the first time and that’s what I saw some of the houses that were in the 170s when I paid in the 140s for.

Jason:

Yeah, that’s great. Are you leveraging your properties or are you paying cash for them?

Philip:

I’m paid cash for them up front, but I did a cash-out refinance on every single one of them.

Jason:

Oh, so have you completed those cash-out refis?

Philip:

Umhmm.

Jason:

Yeah, okay. Good, good. What’s your thing with your management? Do you always use the property manager or do you self-manage or do you have a blend in your portfolio where you are self-managing it and using professional managers?

Philip:

Yeah, I use property management for all of them. I been happy with it, really, and I’m really kind of excited about property management in Kansas City with your provider there, because I think it’s going to be really good from what I heard from other clients.

Jason:

Good, good stuff. As you know, I had some problems with a Kansas City property manager a while back. I think you know about that story. We are working on that one. I kind of try to wait till these things sort of play out completely before I talk about them on the show, because I just, I don’t have enough to say really yet, but more to come on that. Do you have any tips that you wanna share in terms of how you manage your portfolio, how you keep track of it, how you deal with property managers, your philosophy on financing, just any part of it that maybe we haven’t discussed yet.

Philip:

Well, one thing I thought of with HOAs. When you buy a property, you have to really make sure you know who the HOA is, a name or a phone number, because if you don’t, you’re definitely going to at some point find out.

Jason:

Yeah, I know what you’re about to say, I think, yeah.

Philip:

Like I did. I did it on a couple of properties, maybe even two or three and, you got late fees, collection fees, and stuff.

Jason:

Let me explain that to the listeners, let me just elaborate on what you’re talking about and interrupt me if I’m not talking about the same thing, but I think I am and this is also happened to me, okay, this is the reason we say, everybody should go to the USPTO, the Post Office website, okay, and every, I think it’s every year for one dollar is all it costs or you can do it for free if you just go to the post office and pick up a little paper form, it’s a little post card sort of thing, you just put it in the mailbox and they do it.

Always forward the mail to yourself from everyone of your properties, because it just invariably is going to happen, probably with the Home Owners Association, the HOA, but it could also happen with the tax collector or the insurance company, or the lender and you do not want this to happen is that they will send the statement to the property rather than to your address, then they’ll say, hey, you know, your association fee, which, you know, you really only owe $300 in fees now because you didn’t pay it and you didn’t even know it was due, right, you didn’t pay it, you now owe us $650, because we’ve tacked on late fees and a legal fee and some of this kind of stuff.

So, really, really be careful of that. It’s one of the little mind fields that you’ve got to plan for. Do that forwarding address. Now, just to understand too, the forwarding address goes by name, so it won’t affect your tenant in the property at all, but if you purchase the property in the name of an entity, like you say you setup an LLC, you should forward both your personal name, so in your case, you know, Philip or ABC LLC, right, when you do that, because that will really, really help prevent this kind of problem.

One of the other things that some of our clients have been using very successfully is these virtual mailboxes and they are several services that offer this where they, it’s really helpful to organize yourself and make it a lot easier. What they do is they receive your mail, just like, you know, a PO box would or the UPS store would, but they open it and they scan it and they put it on to a web portal that is password protected and you go in and you just look at your mail online and if there’s a check in there, you can actually instruct them to deposit that check to, you know, whichever of any various accounts you might have and they’ll actually deposit your checks. It’s pretty cool. Do you use something like that?

Philip:

No, I don’t, but it sounds nice.

Jason:

Yeah, I can get you the names of some of them. You know who is using one, it’s really great, is Fernando. He just loves it and they deposit all his checks, he showed it to me last time he was on it several months ago when I happen to be near him on the computer, he said, Jason, you gotta use this, look. He’s just going through his mail and it’s just on the screen. You know, he didn’t want to open anything.

So, it’s great. It’s sort of amazing the whole postal system doesn’t work that way, frankly, because it should, but that’s a different discussion. Let me give a couple of names for the listeners on that, okay. One is called Virtual Post Mail and that is VirtualPostMail.com and another one, all I did was searched it while you were talking, okay. One’s called TravelingMailBox.com and another one is called USGlobalMail.com and another one is called PostScanMail.com.

There’s a whole bunch of them out there, so just, you know, put it in a search engine, notice how I did not say Google. Just my own personal thing. Put it on Bing and search it, just search Virtual Mail Box, you’ll find a bunch of companies offering this service and it’s cheap and it’s great and especially for someone like you who is traveling a lot, because your business takes you to all these different locations, so.

Philip:

Oh, yes. Yeah, that’ll be very handy.

Jason:

Good, well Philip. Your story is super inspiring and I thank you so much for sharing it with our listeners. What’s next for you? What are you planning? Where are you going to be buying your next properties you think?

Philip:

Probably either Little Rock or Kansas City, most likely Kansas City, maybe new construction, multifamily.

Jason:

Yeah, good stuff and when you say multifamily, you’re talking about, you know, fourplexes, triplexes, that kind of stuff, right?

Philip:

Right, yeah.

Jason:

Well, again, thank you so much for sharing your very inspiring story. We appreciate your business and appreciate having you on the show too.

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This show is produced by the Hartman Media Company, all rights reserved. For distribution or publication rights and media interviews, please visit www.hartmanmedia.com or email [email protected] Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate or business professional for individualized advice. Opinions of guests are their own and the host is acting on behalf of Platinum Properties Investor Network Inc. exclusively.

Episode: CW 514: Client Case Study in Atlanta, Kansas City, and Little Rock with Income Property Investor Philip

Guest: Income Property Investor Philip

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