BiggerPockets Real Estate Podcast - 118: Condos, Multifamily, and Dealing with Management with Himanshu Jain

Episode Date: April 16, 2015

The links to third-party products and services on this page are affiliate links, meaning that BiggerPockets may earn a commission (at no additional cost to you) if you click through and make a purchase. When getting started, should you go BIG or go small? On this episode of the BiggerPockets Podcast, learn how Himanshu Jain got started investing in real estate by buying BOTH a condo and a 20-unit apartment complex. Discover the lessons Himanshu learned in the process, as well as the pros and cons of each. Additionally, the discussion on property management is going to blow you away — especially when you learn why Himanshu uses not one but THREE different property managers to look after his portfolio. Whether you want to diversify your real estate portfolio or you’re just interested in different forms of investing, check out this fascinating, innovative episode! In This Episode We Cover: How Himanshu got started with real estate investing The pros and cons of getting a vacation rental as a first property How he branched out into condo units What exactly corporate housing is Opinions on Homeowners Associations How he made the big jump to multifamily How to use another business to finance your next deal Why exit strategy matters to Himanshu The ins and outs of having multiple property managers Tips on marketing multifamily units How Himanshu finds properties How he dealt with “unusual activity” in his multifamily unit Why he became a real estate agent And SO much more! Links from the Show: VRBO HomeAway FlipKey HomeSearch (sponsor) Podio (sponsor) Books Mentioned in this Show Rich Dad Poor Dad by Robert T. Kiyosaki Blue Ocean Strategy by W. Chan Kim The 10X Rule by Grant Cardone Tweetable Topics: “Buy with the end in mind.” (Tweet This!) “Nobody will ever take as good a care when it comes to properties as yourself.” (Tweet This!) Connect with Himanshu Himanshu’s Website Himanshu’s BiggerPockets Profile Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, show 118. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. What's going on, everybody? This is Josh Dorkin. host to the Bigger Pockets podcast here with Mr. Brandon Turner. What up, Brandon?

What up? Hey, what's different about me today? Besides the type I'm holding my dog in my hands. You're uglier than you were yesterday? Bad haircut? That's probably true. No, I didn't do my hair today. See, it's like down.

Oh, look at that. Oh, you just fixed it. Looks beautiful. Now it's good, right? Okay. Looks beautiful. Yeah, all the people listening in their cars can't see that. But trust me, I'm a handsome devil.

Yeah, in his own mind. So, yeah, man. Well, you know what's different about you today? You won property richer. Is that what's the question? That is true. I closed down my house today, which actually brings me to today's quick tip.

So lesson learned on number 43 for me. All right. So this is what I learned today. If you say, okay, in the past, I've always offered cash, generally if I'm going to use like hard money or a private loan, I'll say like cash in the offer anyway. And then we usually just write something like he'll be using private lender.

So we did that on this one. We said cash. And then we wrote another part that he'll be using a private lender to fund this. Anyway, Fannie Mae was the seller of this property. And they freaked out on that like a week before closing or a few days before closing and said, after I'd given a $7,000 earnest money and they said, no, you said cash here. We will not allow you to use a lender. We will not allow you to prepare the escrow to prepare a note and deed of trust.

We will not allow that. And that was fun. And so they said, you're going to lose your earnest money if you can't close this in all cash. Well, luckily, I refinanced my apartment complex last week. So I got the cash for that and haven't paid off all those loans yet. So I had no problem. But still, like, had I not had that cash, I would have lost $7,000 because I said the word cash. And Fannie Mae did not like that that I had a private lender.

Anyway, I guess maybe that's the thing that most people know, but I did not know that people could freak out over that. And yeah, be careful. against the government, man. I know. The government, they're, uh, they're mean, they're pushy. So yeah, they are pushy. Somebody else said that the other day that they, they were told at a, they went to like a guru conference or whatever and they, you know, some event and they told them, go just make a bunch of offers and offer cash on all of them. Uh, and then just, when you get an offer accepted, just go out and find financing then for it. Not a big deal. But clearly that is a big deal and it could be a big deal, especially if you give a lot of earnest money like I did.

So, yep. Anyway, there's a quick tip. Well, quick tip is right the offer stating what you're actually going to be using to pay. there you go. Even though it's cash, it's just not my cash. That's not cash to them. And they didn't like that. So whatever. I get it. You learn. Don't do it again, man. Yeah. So next time it's going to be. I don't know. Smack you again. Yeah, I guess. I don't like Ms. Fanny. All right. All right. So you guys, today we got an interesting show. We'll get into that in a minute. Before we do, if you guys are fans of Bigger Pockets at the Bigger Pockets podcast, I definitely want to just take another second to ask you guys to please jump on iTunes and leave us a radio. in a review. Those things really help us. And also, if you know people who are interested in real estate, share the podcast, show them how to listen to the podcast. I just showed my nephew how to listen to the podcast and he was blown away. He's like, oh my God, this thing is awesome. He was taking notes. I was watching it. It was really fun. So, you know, share it with people, let them know how to listen to the show. If a lot of people don't know how to listen to podcasts and don't really get

them, but it's an amazing medium, and hopefully you can help spread the word about it. All right, guys. Well, today's guest is Hamanchu. Hamanchu is an IT consultant who decided to diversify into real estate a few short years ago. Hamancho story is unique because he bought a condo and a 20-unit apartment complex at almost the same time, and we're going to dive into those and compare and contrast to experiences. We dive into really some important stuff on condo investors. What you need to hear if you plan to invest in condos or any property with an HOA.

And of course, if you know me, you know I'm about to rant and rave about that stuff. Another highlight in the show is Hamanchu's discussion on how he uses not just one, but three property managers, three property managers to look after his properties. After hearing his reasoning, you might do the same thing. It's really an interesting theory. So stay tuned. For decades, real estate has been a cornerstone of the world's largest portfolios. it's also historically been sort of complex, time-consuming, and expensive. But imagine if real estate

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isn't about chasing hype or guessing market timing. It's about building durable, tax-aware wealth over time. Learn more at biggerpockets.com slash bam. Did you know your house gets bored when you leave? I can't actually prove that, but it probably misses out on the action, the footsteps, the late-night fridge raids. Yeah, when you're gone, your place is basically on unpaid leave. It's sitting there in the dark thinking, I could be contributing right now. Your side room wants a side hustle. Even your Wi-Fi is like, we could be networking. You're on vacation, spending money like it's a sport while your staircase at home is fully capable of sending your income upwards.

Here's the twist. You can go on a trip and actually earn money. Airbnb makes that possible with the co-host network. If you're away for a while or have a secondary property, you can hire a vetted local co-host with real hosting experience to handle it all. A co-host can handle guest communications. and manage reservations and keep things running smoothly so you don't have to check your phone between beach days. That means less stress and more time enjoying your trip. You can relax,

knowing guests are taken care of and your place is in good hands. You travel, your house works. Everyone wins. If you're ready to host, but could use some help, find a co-host at Airbnb.com slash host. And with that, enough talking about the show. Let's get into it. Hemanchu. Welcome to the show, man. It's great to have you here. Yeah, thanks for having me. Awesome. It's good to be here. And I think you guys are doing a great job for a lot of real investors like me.

Yeah. So thanks. Thank you. Thank you. I love to hear that. Never get tired of that. Well, cool. Let's start at the beginning.

The other thing I never get tired of hearing, how did you get started investing in real estate? All right. So I've been an entrepreneur for quite some time. I came here to U.S. as an IT as a job. I had an employment at that time. So I think it was 2001 when I lost my job after the 9-11 thing. And then I realized being in America, you've got to be on your own. You just don't want to be at mercy with somebody else, you know, running it.

So I started on my own. I started doing my independent consulting. I have an consulting firm that I've been running. And having done that for last 10 years or so now, I realized I wanted to do something more specially for, from a retirement perspective. I think that's when I started looking into something, what my options are.

And I looked at a lot of different options, but I was looking for something passive, something that would not involve me too much so that I can continue with my IT and then do this as well. And that's where I came along for real estate. And I, almost for two years, I did a lot of study, never got the guts to go into it. So I think it was almost around,

I would say 2011, 2012, when I bought my first property. So what got you over the hump? I mean, you'd been thinking about it. What finally, you know, made you pull the trigger? Yeah, I think it was just, I mean, I looked at a lot of properties, and I was sure that I wanted to get into multifamily. I think the economies of scale would make sense,

and I think that one made sense to me. And it so happened. Actually, I was looking at the couple of multifamily properties, but the whole transaction takes pretty long. And it so happened that during this process, I started traveling to Chicago. And the need for me, what Chicago was, I was going here on weekends with my family,

and I think we started my wife and I started thinking, we are going to be traveling here for so long. Why not we look for something in Chicago itself? And because the way the market was, we started looking in Naperville area, and we found a four-coast property. And that's what I bought it. and I bought it to make it as a vacation rental.

Okay. So that's something which I can use and on the weekends and then maybe during weekdays I could rent it out. So that was the idea. That's something that, you know, we've talked a lot about lately and we've got a, we had a show a couple weeks ago. I think it was. We're recording this ahead of time, but yeah, on vacation rentals. I love that idea of being able to, if you want to travel somewhere anywhere often, why not have a property there. So I'm assuming, I guess maybe you can tell us how did that, I mean, that was, let me ask first, condo or a single family house?

So it's a condo. So it was a condo. The reason I took a condo was because I knew I don't live there. It's more of a remote for me. Yeah. So I wanted something which could be taken care of by somebody mostly, and then, you know, I have to deal with just small things. You know, maybe mostly internal.

The outside is pretty much taken care of. Sure. So. Yeah. And that's one of the benefits of the condos. I mean, how did that work out for you? So that worked out pretty good, actually. It was a nice location and we furnished it.

And so and being in the location, being in Chicago. it was easy to furnish it. So we kind of furnished it and then it worked out okay. I mean, I have horror stories on the other condos that I bought later, but this one was okay. This one turned out to be okay. And that kind of motivated me to get into other condos as well. Okay. All right, all right.

We'll get to those, I think. So you've bought as a vacation rental. Can you kind of explain like, how do you currently use it? I mean, do you still have it, I'm assuming as a vacation rental? Yes, I do. So what we did, we kind of furnished it. and we listed it on VRBO. So it's done through

VRbO.com, homeaway.com. Now I have it like, you know, three, four other sites, flip keys, one of them.

And then there's a lot of other, you know, sites that I'm using to rent it out. And then along this way, I came across some other folks,

like we're always looking for business housing or for, you know, people who are traveling, corporate housing. And I travel quite a lot for my IT work. So,

I mean, always stays Monday to Thursday I'm basically out when I'm on projects. So I'm, you know, I'm used to this concept, you know, corporate housing because I've seen and I've used that in the past. I used to do a project in China and they always traveling to China. So I was staying in a corporate housing and that's where the idea came in, you know, we should set up something like this in somewhere in US. And, and when we got a chance, we did it in Chicago area. Yeah. Okay. And you said you bought a foreclosure that first one. Why did you go with the foreclosure?

I mean, maybe this may be a really basic question, but for those people who don't know, what are we talking about when you're talking about you bought a foreclosure? So, I think I would say I'm a value guy who always looking for a value, so I wouldn't say cheap. Okay, yeah.

So I'm always looking for value, and I think foreclosures made a lot of sense. So these properties that I'm talking about, these were, you know, during peak time, they were around 145, 150, and I could get this for, I think I bought it for 110 or something. And there was not a whole lot that I had to do on the first one. I mean, there was some basic things that I had to upgrade the flooring and all that.

But I think it was, the things that we liked about it was it was new. I think it was built in 2001, 2002. So it was pretty new. The layout was nice. It was open floor plan and everything. So it was pretty decent for the price. were these aereos or you didn't buy them at auction did you? No, not this one.

This was just a foreclosure. I bought it through an agent, but then I bought some other in auction later. Okay. So it was an Oreo then? Yeah, yeah. Okay, gotcha, got you. Cool. So you talk about condos.

Have you experienced any issues, difficulties with condos over time? You know, a lot of people, myself included, are not big fans of HOAs and, you know, assessments and things like that. Have you experienced any issues or has it been pretty. smooth going for you? I have run into issues. So the second condo that I was talking about, this is something which I bought through auction.

And I didn't even see this one. I had my realtor go in. He did a FaceTime at that time. And he just kind of walked me through the condo. The unit was in a good location, nice location. I just bought it. When I bought it, I went through the, there is an home association owner's,

what do you call a questionnaire? Yeah. That you have to get an answer through the H. way. And so the idea was, you know, to rent it out. And they mentioned that they had some cap on rental, but the rentals were allowed. So I bought it. And when I bought it, then I was told at that time that later on, when everything was closed, that they had a cap of three rentals only. And it was a very small subdivision. And I think it was next to another subdivision. They both looked like the same. And I thought this were like 200 units, but in fact, it was just 15,

any units in one. So that three unit cap kind of became an issue because then I couldn't rent it out. And the association had a lot of other restrictions that you have to stay there. You cannot have your family or somebody. Like close families, in the sense, your immediate family is okay. But I cannot give it to my brother or somebody. So you have to be using it. And those restrictions kind of put me in a situation where either I had to sell it off or do

something with it. But we like the location so much and the unit so much that we decided to and it so happened that the first rent the unit which was a vacation rental. My idea was that I'm going to make the second one as a vacation rental and I'll rent

the first one out completely on a long-term basis which I did and I moved all my stuff to this location and just being on the lake kind of like a pond or lake it was a nicer location so I thought this would go well for vacation rental and now I was in a situation.

My other place was already rented out, and I could not rent this out. So I went on to a third one. So I bought a third one, moved this stuff there, and I'm using this as a personal now. Really? So, I mean, like,

that's something that I've never really heard of happening before, where you go and buy a place in a condo or a place with a homeowners association, and then after you buy it, you find out that, hey, sorry, you can't have this as a rental. You have to live here or have it empty. Well, some of the HOAs will have a percentage.

You could only have a certain percentage of rentals. And the problem is they don't always tell you the numbers up front. Yeah, I think that's the problem because they were not upfront about it. And that's what pissed me off. I mean, so you've got to be upfront. If you have told me, then I wouldn't have gone for it. Sure. Yeah.

Man. So, I mean, is there a way that you know of? Can you really like nail that down from a homeowners association president maybe and say, look, am I going to able to do this? Or is it just you kind of throw in the dice? No, I mean, I tried. I tried to reach out the association president, and I said, this is what the situation is. And I think just being a small community that it is, like 15, 20 units, and most of them, I think there are the owners and they're retired, some of them.

So I think the way the association is run, I think it's pretty closely close-knit. I mean, I think that's, had it been a bigger community, probably it would have been different. But just being so small, that became my issue here. Yeah, that makes sense. I mean, it's, it sucks. but I guess you're making the best of it. I mean, you kind of figured out a way around it. You rented the other ones out.

You got the other vacation rental condo. You got the original one that you turned into a regular investment. And now you just have a second property for yourself. Yeah. Is that in Chicago? Is that also in Chicago? So, yeah, all this is in Aurora, Naperville area. Okay.

Okay. So, but you don't live in Chicago, right? I don't. I travel there almost every other week. And my daughters, they learn dance. So we travel there for that. Okay. All right.

So we're, I guess, maybe we can kind of go back to your story. Your first deal was that one. condo. What was your, like, what was your second deal then? So the second deal, as I said, you know, I was already looking for multifamily apartments. So I narrowed, I bought a second one was a 20 unit building that I bought. I mean, these are not, not a building, I would say. This is on one street. They have these 10 duplexes. Oh, okay. So that's what I bought as my second deal. Oh, wow. Yeah. That's a big jump for a second deal. Yeah, yeah. I wanted to start with that. It's just that the first thing happened before. He's a bald man.

No, I think I was just too, as I said, you know, I almost put in two years in going through all these. And I was sold on the concept of multifamily. I was sold on the concept of the economies of scale that comes with in multifamily. And I just wanted to start there. I just didn't want you to start at two and four because knowing that the ultimate aim is to get into multifamily. So I just wanted to start at that. Sure. So when you bought the 10 duplexes, you bought them as some kind of package, correct?

Yes. Okay. So you didn't finance that through like, you know, conventional financing, I'm assuming. No, this was like a commercial. Yeah. Okay. Got it.

What do the numbers look like on that property, if you remember? So I think you're looking at the price, that purchase and all that, is those right? Yeah. So at that point, it was listed for around 900. And then the cap rate was somewhere around 8 to 9 on that. So I paid around 8.48 for that. Okay.

And how did you end up finance? You said commercial, but did you get to put a large down payment down? Or how did that work? Yeah. So I had to put in, I think what helped me most was that I already was running a business for last 10 years, the IT business. So that kind of helped me because that way I could show it to them in terms of, you know, from a management perspective, I can manage it and I can run it, though I didn't have any

background on the real estate side. So I did put in around 20% down at that point. Yeah. Okay, okay. That makes sense. And okay, so you bought the 10 duplexes. I have a question about that. Can you subdivide that eventually up and sell all the duplexes off separately? Or are they a package no matter what?

No. So, yes. So I can. I think that was one of the reasons why I went for it. Because that was my set strategy in case if something goes wrong, then I have an option of I can sell them individually too. Yeah. So I think that was the reason why I liked it,

because these being 10 duplexes, rather than being one building, with 20 units because then selling process at times could be, you know. Yeah. So that makes sense. So yeah, I read a book. I wish I remembered what it was called. It was one of my, you know, million real estate books that I've read.

But the guy did that strategy. I think they bought like 20 or 30 duplexes all in one area. And then their plan was to sell each one off to owner occupants. Because then you can sell them, you know, if you're financing a two or three or four unit property, it finances just like a single family. So you can buy with the commercial and then eventually sell them all up. I mean, there's some financing.

I think that's really, really smart. I mean, it's just the whole wholesale concept, right? Buy wholesale, sell retail. It's that same thing. I love it. Well, I guess the question is, you know, what are the duplexes worth on their own? You know, are they worth what you paid or are they worth a little bit more? Can you sell that retail for more than you paid?

I think, yes, you could. Because I think I probably paid lower than what you could pay if you were to sell them individually. So definitely, yes. And I think that was one of the reasons why, I took the approach again. I think I'm going back. I was more worried about the exit strategy than the buying in

because I want to make sure that going out, I have a way out. So, you know, yeah, so that was one of the reason, you know, if you want to do a condo conversion or you want to do something like that, you could. Because on that street itself, there are a lot of family owners, people who are staying on, you know, like individual, the duplex being as an individual single family home too. Very cool. So they have those combinations, yeah.

That sounds. And that's smart, right? Like you said, you bought with the exit strategy in mind. And I think that's something a lesson that a lot of real estate investors could learn is, yeah, buy with the end in mind. And then you don't have to necessarily know exactly what you're going to do, but it's a good idea to have those exit strategies to play in the out. It's always good to have two or three options available to you.

Yeah. You don't know what's going to be there five, ten years from now. Yeah. Absolutely. Absolutely. Well, let me ask you this then. Do you think, like, knowing that you started with both a, you know, 20 unit and a condo, I mean, you kind of had two separate experiences starting here.

What do you recommend for people listening to this show right now in getting started with that? I mean, do you think that was a good idea to start with the 20? Was that a huge learning curve for you? Or was it pretty manageable that people could figure that out? I think it depends on individual where you're coming from, what your background is. I don't think it was that big of a jump for me as such. And again, it could be the fact that I kind of lived. for two years, you know, as I said, assuming that I had something.

So I was living with that and I, and I was, I think I was very clear that I don't want to manage these. I wanted something which would be managed by somebody else because I'm not good at it at all. I mean, I'm not good at any of these handy, you know, doing these things. I'm pretty, I'm really, I really get frustrated if I have to do a small thing in my home. So I'm not good at it at all. You're not a handyman. I'm not at all.

I just wanted something, you know, which would sustain the cost that would come for the management. I think it makes exactly perfect sense. I mean, I think that's one of the reasons a lot of people end up trying to get into multifamily is because of those efficiencies you get. You know, you got one maintenance person or one maintenance crew that can handle things. You got one roof. You got one driveway parking lot. Those are kind of the benefits of the multifamily.

And the management is great because generally speaking, like property management is built into the cost. of a multifamily property. Yeah. Where a single family, it's usually not because you're competing with homeowners, if that makes sense.

So I love that. Well, while we're on the topic of property management, maybe we can touch on that. When you said you used property management, what's that, I mean, what's that been like?

So, I mean, it's, I mean, I've been through, you know, issues, as I've been hearing on the podcast, people have been, and I've been reading

through all these things. So, so it's been kind of good and bad. They've been both sides to it. the way I did, initially when I was looking for a property manager, my idea was

let me just talk about a little bit before in terms of how I set up the whole thing. So my idea was that my intent is that I should have somewhere around 250 to 300 units by five years. So that's the plan. So to do that, what I was planning to do is

I have gotten access to building now where I have my property being managed in Buildium by the property managed. So I was looking for property manage that would manage it in myself's system. So Buildium is what I'm paying for. And I have all my properties listed in Building and managed there by the property managers.

So I don't want to go into a property manager system. I want it to be in my own system where I have the control. I can consolidate the reports. I can see how I want it. That was the idea. So at any point of time, if I buy other units, you know, then I can add it to it and then I can give it to different property managers. And being in IT, you know, I've seen, we have worked with vendors.

So typical strategy is always to have three vendors that you're working with for anything. And that was my plan, that if I, when I get into multiple properties, I'll have three property managers who will manage the whole portfolio. I like that strategy. That way, you know, I have always a backup plan in case if it doesn't work out with one property manager, then I can go to the other one. How do you work with three property managers? I'm just curious. Are they all managing different properties at any given time? Yeah.

Yeah. So once you have this like 20 unit managed by one and then once I buy another one, this would be managed by the second party and then like that. So I could give them, you know, different properties. And that way I have always have some options in case if things doesn't go well. And then the other thing is I know how the others are operating and I can kind of compare them too. So that gives me an option of knowing and checking. that, you know, who is doing a better job than compared to the other one.

Do you let them know that you've got the other ones managed by somebody else? I mean, so when I was talking to them, I told them this is my strategy. I love that. This is what I'm looking for. What does they say? Yeah. So, I mean, some liked, some didn't like it. But I think the idea was, I said, you know, I'm open to if you are new to this.

I mean, in the sense, if you have managed but you have done something on a smaller scale, the advantage of being with me would be that I can give you, you know, this property, 20, 60, 80 units at some point of time. So if you're willing to work with me, I'm willing to take a chance with you and then we can grow together. I love that. Yeah. So I think that was the idea and that's how I found the property manager. So I did narrow down to three and then I just picked one.

I like him the way he's managing it. I mean, I mean, but I think what happens is I think he has grown big as well. And in his need of acquiring and growing big, I think the focus shifted and I think that's where my property suffered a little bit. and that's what I didn't like. But again, I think I don't want to, you know, spoil, you know, just sever the relationship at this point of time because I've already paid for it. I want to make sure if we can improve that

and still continue using it. So I'm watching it now. So it depends. If it doesn't work out, I might have to look for somebody else now. And I like how you phrased, you know, I'm taking a chance with you. Yeah. Yeah, I think that's pretty telling.

Just that, you know, that's how it works. I mean, you know, as an investor, you, it's a two-way street, right? I mean, a lot of people, you know, property managers, that's your property manager. So a lot of property managers will interview you, and a lot of people forget that they have to interview the property manager. And at the end of the day, you know, you need to make sure that you're comfortable with this person. don't just hire the first property manager because, you know, they're available. And you are taking a chance on them. And if they don't do a good job, you need to get rid of them and move on and find the next one.

Yeah. Yeah. Yeah. That's very true. You want to hear an update on my story, Josh? No. I don't know if you guys, like two months ago we talked about on the podcast, but it's only been like a month in recording time.

But like in reality, two months ago, we talked about I hired a property manager. Anyway, it's been, it's been rough. It's been rough. There definitely is lower level service. I think I mentioned that before. But I've not gotten rid of her yet because of the same reason you just said. Like I'm watching very closely and I'm trying to like encourage better behavior and better work. Is it working?

I think so. So the tenant's gone that we were like the reason we gave it over to hers because it was just a difficult tenant that causes us stress. That tenant is gone. It's taking twice as long to fix the place up and get it re-rented. Well, to get it fixed up and turned over as it would for me. you know, I'm like, you know, that he gives notice and he's going to be out on Thursday, I'd have a crew in there on Friday. For them, it's like, well, we'll get the crew in there the next end of next week sometime

when it's on the list. I mean, I understand. Like, they have a lot of properties, whatever. But like, no, that's not something to understand, man. Well, I mean, like. No, no, no, no. That's like, there's a sense of urgency in this business. Obviously, they might have 20 of those at one time and I'm, you know.

That's their problem. Sure. But I can't imagine. They're in the business of serving you and their job. should be to get it done immediately. Because every day that you sit with an empty property is the day you sit with an empty property, it's money out of your pocket, not out of theirs.

You forget I live in Podunk, Washington, though, where the contractors are out smoking for like six days straight and then they'll come to work for a little while. So we've got to deal with that. But, you know, we're watching. Yeah, I think you're right because I feel this, I mean, I see the same kind of behavior here too as well. I mean, I don't see the urgency in getting things rented out

or getting certain things done. I think that's more of probably an owner thing, not a property matter. I firmly agree. Nobody will ever take as good a care of your property as you will. That said, here's one benefit I have noticed. We don't have a sign in the front yard yet for the house yet because the house side doesn't look good enough. So, however, she's already got two applicants for the house. Now, that is something that I couldn't pull up because I don't have this massive marketing machine for rent signs all over town that people call about other properties and she can funnel them.

So we may actually get this thing rented out faster than I would have. And I didn't expect that. I never even thought about that. So who knows? Maybe it'll work out. I'll tell you next week. So I think that's the other thing. I just want to add to what you just said is from a tenant placement perspective.

So, I mean, as I said, you know, I'm kind of watching them now. So what I've done is I've started opening up my other avenues as well. So I have brought in another tenant placement company who was helping me to market the units that I have empty. So I have two or three people now working for them. And I tell them up front that I have this person marketing it. and then you are also marketing it. Whoever gets it first, they get it. I mean, to me, what matters is that it needs to get rented out quickly

and I'm willing to work with you all. But at the same time, so I think that a little bit of that helps too. So if you have some kind of competition in place or, you know, I think that helps. So now at least I'm seeing more happening or more traction from their side. Both of them are trying now. That's fascinating, like an uberification. Yeah, I don't know. rental process. Yeah, it's like, yeah, game of fine the entire thing. Yeah, compete to who can

fill the unit and whoever fails the unit gets to manage your property. That's, that's really interesting. I've never heard of that before. Yeah, I like that. And it's working out okay. Yeah, it's working out okay. We'll see. Yeah. Wow, wow, wow, wow. That's great. Well, cool. Well, is that property in Chicago as well, or is the 20 unit local? The 20 unit is in St. Lois. Okay. So, why did you end up buying then local for that one? Did you look elsewhere or did you just decide that there are better deals where you were at? No, I think for multifamily, I'm not at a point where I could buy a bigger property somewhere remote. I think I want to buy and manage it locally, something which I can access anytime I need to.

Sure. And even when I bought this, I bought it into a location. I was very particular about a location where I'm buying it. I wanted to buy in a location where I could manage it on my own as well. So if I have to, I can. I don't need a property manager. So, I mean, I was not looking for, you know, run down property, a property in maybe a D-class area where I would not be comfortable managing it. So I bought it in an area where I can manage it.

And then, so, yeah. Makes sense. Makes sense. I like the ability to drive by my property. Even if I'm not managing directly, I love being able to drive by, check out my property manager what they're doing. Maybe micromanage a little bit. Maybe that's a bad thing. But like, you know, until I have that trust built up, I have a hard time.

And again, like, had I not been in this area hiring this property manager, I like, again, I talked about this, I think before, but maybe I didn't. But I mean, this was a serious situation. I mean, this is what actually happened. We called like a week after the tenant was supposed to be out. And we said, we're just wondering what the status is on getting that tenant, you know, like make sure they're out. And she goes, oh, I have no idea.

And like, it was like, oh, come on. Like, it's not my job to have to do that. But again, I'm sticking with it a little bit. longer, we'll see, because if it's not her, it's me and, you know, whatever. So we'll see. All right, moving on. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time consuming, and expensive. But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Fundrise flagship

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while your staircase at home is fully capable of sending your income upwards. Here's the twist. You can go on a trip and actually earn money. Airbnb makes that possible with the co-host network. If you're away for a while or have a secondary property, you can hire a vetted local co-host with real hosting experience to handle it all. A co-host can handle guest communications, it can manage reservations and keep things running smoothly so you don't have to check your phone between beach days.

That means less stress and more time enjoying your trip. You can relax, knowing guests are taken care of and your place is in good hands. You travel, your house works. Everyone wins. If you're ready to host but could use some help, find a co-host at Airbnb.com slash host. we talked about financing. What else did you do after that? I mean, you got some more properties after that, correct? Yeah, so I did. As I said, I bought another condo, which was through an auction process, and then that's what I kind of furnished it, and then that's my vacation

rental now. Then recently, I bought another property over the auction, and I'm going through the rehab process now. So I just started on a rehab on that. So I'm going to, I'm thinking of flipping it and then the idea being I want to kind of go through different aspects of the real estate transactions and see how it is and then just pick certain things that I would

continue doing for long and the other other advantage of doing a flip is if I'm able to sell it at a decent price but that gives me enough and enough ammunition to go buy in a bigger unit you know so makes sense I think that's the idea

so I'm kind of using the flip process to funnel or push my multi-family agenda in a way. Yeah, that's great. That's great. I like it. So in the notes, we've got something,

talking about some kind of a story where neighbors are complaining on some unusual activity, and you handle it very cleverly. I'd love to hear that story. So I think this was in a multifamily unit. I think what happened is the unit is rented out,

I think it was rented out to an old lady, and then suddenly, they started seeing a lot of expensive cars coming in in that area and so that they as I said the street where this is there are some owners as well so they are the ones who reached out to the some of the other renters and then probably nothing happened over a day or two and I think I was traveling to Chicago at that time and then somebody called me directly somehow they got my number and they called me and they said you know this is what is happening it looks like there might be some drugs or something going on and

And so I was kind of nervous. That was the first time I was hearing all that. I said, okay, this is strange. So I called the property manager and so we decided that, you know, to next day we were there. So I was there. The property manager was there. We were there. We kind of made sure that people saw that we were there and made sure that we contacted

the neighbor that complained, made sure that we are there. We will take care of it. And we thanked him in kind of just reaching out to me. I mean, that was really nice of him. And then we went in and we spoke to the lady. It seems our son was there. He had just come out of jail or something. So things were there.

So we kind of gave him a notice that made sure that he was out within. So the property managed to care of it the way it was supposed to be. Nice. And that's, I mean, that just shows, like, good management is, like, you can't always stop problems. Like, you will get drugs in your unit. You will get problems. You will get people that aren't supposed to be there. But good managers take care of them, like, effectively and efficiently quickly.

And you guys prove that. So well done. And, you know, it also proves that, um, the importance of, of making sure you know your neighbors, right?

So, right. So, you know, anytime you buy a property, obviously before you even buy it, you should get to know the neighbors, I think. I believe in that firmly.

And then once you've bought it, I mean, you really want to make sure, you know, listen, we've got your back. You know, hopefully you'll have ours.

You watch out for us. Let us know if things are happening. And not just the people next to you, the people down the block, the people across the street. and you've got an army of eyeballs watching your place. Yeah. And I think I did something similar based on what I heard on one of the podcast

is that somebody, they reached out to the neighbor and they gave them their card and all that in case. You know, and I did the same. So I bought another property through an IRA. And that's, this is a single family home. And so I did the same when I heard that podcast and liked that idea. So I just went and gave them the card and said, this is a, in case if you see anything because I was going through a rehab process in that and just wanted to make sure, you know, if somebody sees anything, they could at least reach out

to me. So that was a good tip, which I made use of. Yeah. That's great. You mentioned that real quick, inside of your IRA. Can we talk about that real quick? What do you mean, for those people who don't get that, what do you mean by you bought a property inside of an IRA? So this is, I had some money in IRA, which I had invested in mutual funds and I wasn't seeing any results there. So I decided to take that off. And so I bought a single family home. And I bought this through a network, local network. So I bought it through a wholesaler. I think this was a probate or something that he got. And so I borrowed a certain price. And then I flipped it. I kind of not flipped it. I rehabbed it. And then so this is going to go out rent now in this first week of March.

So what's the benefit of buying something inside of an IRA using like, in your IRA funds for that. And it was in, I'm guessing it was in a self-directed IRA, correct? So this is a self-directed IRA. So, yeah. So, I mean, I like the cons. I think, as I said, I think I'm big on real estate. And I've lost money in stocks. So I'm not a big fan of stocks. Me neither. I just, I think I want to be in something which is more tangible, which I feel real estate is in a way, you know, you see what it is. And especially being local. So, you know, the more you could see about it, the more you can feel and touch it, the good it is. I mean, to me. So, I mean, the only reason I think is, again, as I'm not looking for anything to support me now.

It's all for what I could do for my, you know, future retirement and the kind of lifestyle I want going forward. I love it. Cool, cool. You wanted to talk about the agent thing, didn't you, Brandon? Yeah, the question I have is why, so why did you become a real estate agent? I heard before the show you mentioned that you just got your real estate license recently. Why is that? Yeah.

So I think my going through this experience. as an investor. I found there was a lot of lacking when it comes to getting the transaction through the agents, and it could be just my experience. But I definitely felt that the way things are going, I think real estate agents as such have not changed, especially from a technology perspective if you look at it. They're not using the technology the way you could use now. And I think that was one of the reasons.

I think a lot of things were still being done the old-fashioned way, and again, coming from an IT background and coming from a different perspective altogether, I was looking for something which could be done quickly, but efficiently. So I think that was one of the reason I felt this could be an opportunity where I could help other investors as well. That was one. The second was that I thought this was a good way to build your network, because the intent is at some point of time I want to buy bigger apartment complex. excess. I want to buy 200, 300 units. So I want something of my own and then I also want to do

bigger transactions. And I think that would be a good way to get into it, at least from an exposure perspective. So I think that was the reason why I went into the real estate. Okay. That's great. Cool. I'm assuming then you're not like actually like buying and selling properties for other people or are you? I mean, you're still doing the IT thing full time, right? I'm doing the ID thing full time. And then I am buying and selling. I'm not, I'm not doing any homes. I'm only working with investors. Okay, okay. So I am working with investors.

I'm helping them with commercial as well as multifamily. So I'm doing both. Okay, very cool. Very cool. All right, moving on, let's take this thing over to the... It's time for the fire round. All right, the fire round. These questions come straight to you from the Bigger Pockets forums.

And I'm going to fire them at you. There you go. Is that better? More energetic. Yeah, beautiful. Beautiful. All right. Number one, do you ever buy, and this one is, well, we kind of touch on this, but do you ever buy foreclosed properties before they actually go to auction, like in pre-foreclosure?

We touched on it, but we didn't talk much about it. I would. I would. If I see something, which is a good deal, yes, I would. Yeah. Okay. Okay. And I know you said you bought that one that was like the condo, something like that, was an auction, right? So I bought a couple in auction and then one, which is a foreclosed property. Yeah. Okay. Perfect. That's great. That's great. What are your thoughts on the rules of thumb that are often tossed around around bigger pockets, like the 50% rule, 2% rule? Any feelings on those?

I think those are good rules for just first set of evaluation or just to have a, you know, just to see if it makes sense or not. But I'm not totally driven by it also. I think I'm more to look for the location of the properties because based on that rule, I don't see the most of my property was qualify on that rule, but they are still working fine. I think it just depends on what makes sense. And I would say this, because I'm not looking for the immediate cash flow to live on,

I think it makes sense for me to be okay. So I think it's just a good thumb rule, but I won't just rely completely on it. And if something else makes sense, I would still go ahead and, I mean, I've done that. Makes sense. Right on, right on. Perfect. All right. have you ever had to do an eviction?

If so, how'd that go? Yes, I think first year was good. I didn't have to do anything, but last year we did two evictions. And again, I've not been involved too much. I think I've just let the property manager handle it for me. But this is what I've learned. We did not go through the complete eviction process.

I think the tenants left before once the process was started. Okay. So we didn't have to get into the complete eviction process. such. But I did lose money on that, but yeah. Yeah. Yeah. Makes sense. All right. Last question. How do I find a good real estate agent who understands what I need as an investor? I think you just got to talk to people and then see what makes sense. And I would like an agent has invested himself. I think that's the big thing for me because having worked with

the agents in, you know, in Chicago area and here, I think it, especially when you're coming from an investor's perspective, it makes a lot of difference if somebody has invested himself. as an agent because they can understand and they can point you to the, you know, things. That would make sense from an investor perspective. I agree. All right. Right on. Sorry to everybody listening for the noise in the background.

There it goes again. Somebody's angryly against the wall at Hamas office. Yeah, we're almost out of here. But we're, you know, sorry guys for the noise. All right, moving on. Time for the world famous. Famous for. All right.

these questions, we fire at everyone every single week. Number one, what is your favorite real estate-related book? Yeah, I would go with the masses, which is real estate. The rich dad, poor dad. I think that's one book which kind of changed the way I, I think it's what changed my perspective about how things should be. And I would say that's the one. Perfect.

Right on. Good choice, good choice. What about business book? What's your favorite business book? For business books, I would say it depends on where you are. are at that point of time. So, you know, because things are changing constantly. So you could not have just one book, which would be a favorite.

I know at the time when I was looking at growing my IT consulting, you know, work at that point, I used, I like that Blue Ocean Strategy. This was about, you know, going into newer areas and how to differentiate yourself, you know. So I think that's one good book. You said Blue Ocean Strategy. I've heard of it. I never read it yet. So that's one.

And then recently through the podcast, I came across that 10X thing. And I think that makes a lot sense for me now. So I would say those two would be the books, my favorite business books as of now. Yeah. Great. Cool. We'll link to that. The show notes at biggerpockets.com slash show 118.

Yes, sir. Yes, sir. All right. Hobbies. What do you do for fun? All right. So I like to travel quite a lot. So I've traveled.

So treking, camping is another thing that I like with my family. I like to cook too. So cook with my kids, so kind of a family thing. So, yeah, those are the things that I like to do. That's great. Cool. All right, my final question, what do you believe sets apart successful real estate investors

from those who give up, fail, or never get started? I think it's just getting started. I think that's the key thing. You know, the good thing about real estate is you could start at any level and you could, there's so many options in it. I think that's what I like about it. So I think you just need to, as they said, just, there are always going to be self-doubt.

There are always going to be people who would say things that it's going to work or not work. I think you just need to go and take your first step. I think that's the key thing. You just go and do it. And then they will always be learning. There are always things that, you know, you're going to make mistake. But I think it's just the fact that even if you do something wrong or mistake, you just go and do it again.

I think just doing it is what is important. I love it. I love it. That's great. That's great. All right, Hamachu, where can people find out more information about you? do you have a website? So, yeah, I mean, they can find me at Invest withhimancho.com.

That's one. Or, I mean, Bigger Pockets is another good place. I'm not there very often, but I am. I would like to be there more often. Of course, of course. Yeah, yeah. That's great. That's great.

Well, listen, thank you so much for coming on. We definitely appreciate you sharing a little bit about your journey. And, you know, we'll look forward to having people share any insight, any questions. they have on the show notes at biggerpockets.com slash show 118. And thanks for being a part of the show, Hamanchu. Thank you, guys. Thank you both. Thanks for having me.

Good care. Awesome. Thank you. Thank you. All right, guys, big thanks to Hamanchu for all the feedback and the stories and sharing his advice with us. Lots of interesting stuff. I know you were definitely into the whole multi-manager idea, aren't you?

Yeah, it's a cool idea. If only I had three property managers in my area, I could trust. I might try that. Yeah. Yeah, it's hard enough to find one. Yeah, it's a tough thing. Start there. Yeah, yeah. Anyway, but no, cool show.

I look forward to seeing where he goes with his investing. He's a very smart guy and he's doing this the right way. Absolutely. And you took, you dominated the show a little bit. I didn't really do a lot of talking. You know, kind of cut me off a few times. You were kind of like giving me weird signals. I think you fell asleep for like an hour and a half there.

I might have. I might have. No, stop. Yeah, great show, great show. All right, guys. Well, listen, thanks again for listening to the bigger pocket. podcast show 118. Check out the show notes at biggerpockets.com slash show 118. And as always, we really appreciate you being a fan and you checking us out and listening and spreading the word.

Please take some time to jump on our space, our social network, biggerpockets.com and get involved. Connect with us. Connect with other investors in your area. Join us on Twitter, Facebook, LinkedIn G+, and otherwise, keep listening, keep learning, and make things happen. So until next week, I am Josh Dorkin. Sign in off. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the height, you're in the right place. Be sure to join the millions of others who have benefited from BiggerPockets.com.

Your home for real estate investing online. Thank you all for listening to the Bigger Pockets Real Estate Podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. On the host and executive producer of the show, Dave Meyer, the show is produced by Ian K, copywriting is by Calico content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com.

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