BiggerPockets Real Estate Podcast - 265: Kidnapped by Russian Mobsters and How to Manage 13,000 Rental Units with Andrew Propst

Episode Date: February 8, 2018

Yes, really. Today’s guest was kidnapped in Russia by mobsters and not only lived to tell the tale, but he even went on to invest in rental real estate in a big way, building a massive property management business! In this show, Andrew Propst shares key insight into finding incredible property managers and solid tips for profitably managing your own tenants. Andrew also has some excellent tips for finding great real estate deals, so if rental properties are in your future, this is one show you don’t want to miss! In This Episode We Cover: The kidnapping story How Andrew’s stubbornness to pay rent led him to invest in real estate His first investment Tips for finding the right property manager The details on Andrew’s 42-unit multifamily property How they managed to increase rents from $400 to $700 Useful property management resources What you should know about cap rates Tips on finding great deals What he thinks about build to rent What Andrew looks for in a market Thoughts on renting to people with a prior eviction The importance of enforcing the terms of the lease A conversation about landlord-tenant laws And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Landlord Forms BiggerPockets Podcast 232: The Four Lead Sources Nathan Brooks is Using to Flip 120 Houses a Year BiggerPockets Money Show The Saratov Approach (Movie) National Association of Residential Property Managers Institute of Real Estate Management Integra Realty Resources Cap Rate and Cash-on-Cash Return: A Definitive Guide CCIM Institute ‘World’s worst bowler’ just bought a historic Valley alley. Even his wife thinks it’s crazy (Post) CI 101: Financial Analysis for Commercial Investment Real Estate (Course) Books Mentioned in this Show Long-Distance Real Estate Investing by David Greene The Book on Rental Property Investing by Brandon Turner How to Win Friends & Influence People by Dale Carnegie Drive by Daniel H. Pink The Book on Managing Rental Propertyies by Heather and Brandon Turner Fire Round Questions Previous property manager did not return security deposit Perspective Tenant with Service Dog Otherwise great tenants hiding ferrets – how to proceed Eviction history Tweetable Topics: “You never know how important a property manager is until you hire a bad one.” (Tweet This!) “Your job as a property manager is just to enforce the terms of the lease.” (Tweet This!) “You’re doing your tenant a disservice if you’re not firm.” (Tweet This!) “The lazy parents clean their child’s room.” (Tweet This!) “The whole premise of Fair Housing laws is to treat everybody the same.” (Tweet This!) Connect with Andrew Andrew’s BiggerPockets Profile Andrew’s Company Website Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show. 265. We took over this property. Our average rent was $465. Today, our average rent is $715. Wow. The only thing that changed that we, you know, we didn't do anything crazy to be. We added some base forward and we repainted the interiors when people moved out.

Yeah. And we added dishwashers. And that's it. That's all we did. got the rents up to $715. 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 is going on, everyone? This is Brandon, the host of today's Bigger Pockets podcast here with my my wonderful co-host, Mindy Jensen. How you doing, Mindy? Brandon, I am doing awesome. Today is a great day. How are you doing today? I'm doing good. I'm doing good. You know, you and I bought a mobile home park along with Ryan Murdoch. And that's going well. I actually just got an email from him. I don't know if you saw it came in when we were recording the podcast.

No, I was paying attention to the recording, Brandon. As soon as we hung up from the recording, I checked it. And he says, Ryan, who's our boots on the ground guy. This is great. I got to read this. So he said, where is it? One of the weather-related news. We had a ton of snow between Christmas in the first week of January to the point where the plow guys had nowhere left to push the snow. That's a pretty common thing here in Maine. So they ended up giant bucket loader to come and move snow. Anyway, that's fun. I never knew I get that email.

That happened to me in Wisconsin. The first year I lived in Wisconsin, they got 101 inches of snow. And at the end of like the 101 inches, I'm like, I can't even throw it high enough over the snow banks on the driveway to get it off the drive. driveway. I don't know where to put this anymore. Wow. Well, yeah, I ended up throwing it in the street. Let those plows take care of it. Anyway. Anyway, so, and so that's fun. I'm excited. We can kind of like over the next, you know, few years, give people updates on how it's going. But so far, so good. No exploding pipes. And that's a good thing. So. And they've had bitter cold. I sent a note this morning. Like, hey, I just want to double check. Like, I'm the silent partner in this. But I don't really want to be

silent. I want to learn all I can about mobile home parks. So together we can take over the mobile home park industry. We are taking it over. So anyway, it's fun being in this deal with you. And yeah, you guys, I want to speak to everybody here on the podcast right now. And we'll get to the interview in just a second. But I want to say, like, bigger pockets is such a cool place to find people to work with. Like me and Mindy are working together. I work with a lot of people from bigger pockets because, like, everybody has something that they can bring to the table and then something that they need, right? And so just like start networking, talking with people. That's how you do business is by networking in bigger pockets is the largest real estate

in the world for networking. So, and guess how much it costs? It's free for a membership, unless you become a pro member, which is even more cool. But anyway, do it. Hang out in the forums. Mindy is a sheriff over there in the forums.

You'll see her a lot there. Yes, you will. Yeah. You're the one that cracks down people when they start, you know, self-promoting themselves. Like, yeah. I crack the whip.

Yes, I do want to say that if you have something to offer somebody, if you want to be in a partnership with somebody, or you want to even just do some sort of business with somebody, tell them what you can bring to them before you ask them for things. Very, very good tip right there. That could be today's quick tip, but it's not. But it's not the quick tip.

It could be though. That's the, that's just the regular old tip. That's the old tip. Is, quick is, do you know that we offer landlord forms on our website? State specific landlord. State specific landlord forms. Yes. We worked with attorneys in individual states to take a lease and make sure that it conforms

to that state's landlord tenant laws. Today you will hear our guest, Andy Props, talk about knowing your landlord tenant laws and even using them as a way to gauge where you want to invest. And your lease must follow your landlord tenant laws of your state. So we did the hard work for you. We currently have, when this show goes live on February 8th, we will have 15 states available at BiggerPockets.com forward slash LL forms. That's LLF as in Frank, ORMS for landlord forms.

There you go. We got to say it's like California, Colorado, Oklahoma, Texas, Florida, South Carolina, Ohio, Indiana, and a few more, New York, Illinois, and a bunch more coming. And new ones being added all the time. Every month we had new ones. So I check back often. Biggerpockets.com slash LL forms. LL stands for what? Landlord. Landlord. The Lord of the land.

Ladies love like LL. Cool J. Oh, is that what that stands for? Ladies love Cool James. Really? I thought it was landlord, cool James. I don't know. Weird. Oh, wow. Okay. So anyway, nobody wants to hear us. No, okay. Moving on. Let's bring in our guest here in a minute. There are two kinds of real estate investors, those who have reviewed their insurance and those who think that they Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehabs, short-term rentals, or LLC-held properties.

These gaps surface only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate investors, understanding portfolios, risk at scale, and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing at NRE.com slash BP Pod.

That's N-R-E-I-G.com Have you ever lost a DSCR deal because the financing just took too long? Red flags popped up late. The lender needed more time. The deal fell apart. Well, our friends at Dominion Financial just launched a program to help prevent that. With their new express rental loan, you can close in 10 days or less. And they still offer their price beat guarantee so you can get great pricing and a timeline you can count on. Fast, simple, reliable. That's Dominion Financial. Check them out. at biggerpockets.com slash dominion. That's biggerpockets.com slash dominion. You just realized your business needed to hire someone yesterday. How can you find amazing

candidates fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job notice on other job sites. Indeed, sponsored job posts help you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking. And it works. Sponsored jobs on Indeed get 45% more applications than non-sponsored post. The best part, no monthly subscriptions or long-term contracts. You only pay for results. And speaking of results, in the minute I've been talking to you, 23 people just got hired

through Indeed worldwide. There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of the show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash rookie. Just go to Indeed.com slash rookie right now and support our show by saying you heard about Indeed on this podcast. That's Indeed.com slash rookie. Terms and conditions apply. Hiring Indeed is all you need. So today's guest is actually a guy. So my buddy Nathan Brooks, who is a awesome dude out of, where's he at Kansas City, I think.

He's going to yell at me if I got that wrong. But anyway. In Memphis? No, he's not in Memphis. But he's like, he's got a turnkey company out there in the Midwest somewhere. Man, he's going to yell at me for not knowing that. Anyway, he actually connected me here with Andrew Props. Andrew is a property manager who has 13,000 units under management in a bunch of different states. I can't remember how many, but like a dozen states or something like that. 11, I think. Yeah.

And he also has his own investment as well. He's recently bought a 42 unit apartment building and is making like a million dollars on it. It's crazy. You guys got to hear the story. We go through a lot of landlord stuff today talking about how to become a better landlord and property manager, but also how to find deals. He's got some amazing tips on finding deal, stuff that we don't really, I don't even think we've ever talked about here on the show. I was going to say, I've never heard either of those two main tips that he shared on any of these

264 other shows that we've had. Yeah, he's legit. So you guys, make sure you listen to that. If you're enjoying this show, as always, please leave us a rating and review and subscribe to our channel over on iTunes or wherever you listen to podcasts. And also, Mindy's got a show called The BP Money Show. Make sure you guys listen to that and subscribe to that as well. So without further ado, do.

Did you like that quick plug for your show, Mindy? I do. I appreciate that. Thank you. I want to say this is the best first five minutes of any podcast we've ever done. Yeah, don't tell Josh that. Yeah. Well, Josh.

This is the most interesting first five minutes of the actual show. We've been yammered around for five minutes already. But the actual show, when Andy comes in, the best five minutes ever. Yeah. Okay. So without further ado, let's bring him in. Andy, welcome to the thing. Your Pockets podcast, man. It's good to have you here. Hey, thanks for having me. I appreciate it.

Yeah, this would be a lot of fun today. So before we get into any talk about real estate, I want to address the, I don't know what called elephant in the room because nobody knows there's an elephant in the room. But something I just, I saw in your bio and I was like, no way. So I looked it up. And sure enough, like you have an incredible story, like not even related to real estate, having to do with any kidnapped. I want to hear, can you tell us the story? I know everybody else. We're going to get to real estate in a minute. I got to hear this. Yeah, I'll make it a quick version. The good news about the story is they made a movie about me being kidnapped. So that helps me shorten the story because I'll just send you to the movie. You can you can stream it live on Prime now. It's free. So yeah, I was a I was an LBS missionary. I was 20 years old. My dear companion and myself, we were approached by some Russian mobsters. We didn't know at the time. They asked us to come to their apartment to talk to them about art, you know, what we do, you know, selling religion, basically. So we went to the apartment.

We walked in and immediately we just started getting beat by backs. It's like knocked over the head. We didn't know what was happening. It was like it was crazy traumatic. They, they bound us. They tied us up. They took us out in the middle of nowhere in this little town in Sarat of Russia. And we were held captive there for a week.

And there was a $300,000 ransom demand on the church or the American government, my family, anybody that would pay. Obviously the church won't a church government, anybody won't pay those those ransoms because if they do then every missionary every tourist would be a target five days later you know the fsb kgb the church security state department we had help from bill clinton gordon smith lots of pressure they got scared and they took us out in the middle of nowhere and dropped us off and we you know hiked back to our our missionary home and uh they flew us to Germany. We spent a couple days getting checked out in the hospital, and then we got reassigned to

England, and then I finished my mission in 19... Reassigned. Yeah, yeah, reassigned to England. So, yeah, I mean, that's a very short version. But again, it's a great movie. I got called by a director in 2011. He said, hey, I wanted to make a movie about this story. It seemed like an awesome story. I want to know the rest of it. And that was in 2011. And then we released it in November of 2013. And, you know, it's got like four and a half stars on Amazon. It's a great movie called the Saratav Approach, S-A-R-A-T-O-V approach. So believe it or not, obviously going on a mission, you learn a lot about life. And then you get kidnapped, you learn a lot more about life.

Yes. So it was a very difficult experience at the time, but probably one of the, you know, the biggest, the biggest learning experiences I've had, you know, it really teaches you a lot about what's important. And, you know, you typically don't get that when you're 20. Yeah. So that was really good. That was a really quick version. I'm sorry. That's the best icebreaker story. But yeah, it was pretty funny because I was this,

I was meeting with a property management owner last night here in Arizona. I'm here at a conference. And they were, they were mentioning that some Russians like broke into their bank account and stole $900,000. And then the CIA called them and said, I think your husband's been kidnapped. And I said, oh, that's very interesting because I, I've been kidnapped by Russians. They're like, really? Like, it's totally out of the blue. Just blew them out of the water.

I'm like, yeah. So, yeah, they didn't know that I was. So I just kind of blew them. Wow. That's random. Wow. Yeah. Wow.

So we're going to make a really awkward transition here. Yeah. How did your, how did this experience being kidnapped by Russian monsters lead you to get into real estate investing? Well, this is pretty interesting. Like, I, I, um, I'm just kind of a cheap. frugal guy, right? I just like, I don't like throwing away money, just said weird stuff. And I always thought that like, this is probably bad for the podcast. Like I never wanted to pay rent. I either wanted

to build equity, but just never just throw rent away. And so when I got off my mission, I tried immediately because my sister, when I was on my mission, she wrote me, she said, I'm managing properties. I'm an on-site manager and I don't have to pay rent. And I was fascinated by that. Like, you get to live there for free and basically do nothing. And, you know, and so I said, I want to do that. I got back for my mission and nobody would hire me because they all said, hey, we're only hiring couples. We need somebody that does maintenance. And then your wife would typically do the books. And so I'm like, oh, well, this is an easy fixed. I'll just get married. And so basically married the first girl I saw, who's like the best woman in the world. We've been married for almost 20 years.

And so we got married. We walked in. The first job we interviewed for, we got hired. And I started my property management career in 1999 as an on-site manager at the Crossroads Village and Tigrid, Oregon. So that's how I started in the property management real estate. And then obviously, you're not paying rent. You can set money aside and then, you know, build, kind of build your net worth that way. So I always worked a second job, but always managed properties my whole life. And, you know, when we moved, we moved to Idaho. I got really serious about property management, building the single family side along with the multifamily side got a bunch of certifications in property management commercial real estate and just just grew started to grow my own personal portfolio and most importantly

helping others because i understand you know the intricacies of the business and what tenants are doing and where the demands are etc helping other people grow i mean we've in boisey alone we've helped put 3600 new units in the ground uh just new development just in boise which is that's a lot for Boise. But we're also doing it in other markets too, which is great. And then we've helped owners really take advantage of the down real estate cycle. We help people buy in 2008, 2009, 2010, 2011. And then that's kind of slowed in our market. So now we're pushing people to other markets where the yields are better. So it's just, you know, it's been a long ride in the, you know, the real estate, the real estate roller coaster, but it's been fun. And, you know, building,

helping, you know, building my own portfolio is fun, but helping other people kind of reach their investment goals is like, that's what makes you feel good. That's awesome. So I kind of want to you guys do the same thing. Yeah, we try. We try. I, so I want to, you got experts in two, you know, a lot of areas, but specifically two areas I want to focus on today. Number one is that your personal journey. I want to know like your own real estate, how did you do all that? How did, like, what did you buy? We'll go through that first. And then I want to shift over to, like, how do we manage tenants? Like, what are the things you've learned now? in managing properties, managing tenants, dealing with people.

Because, like, honestly, a lot of people get into real estate and they think that the hard part is buying the real estate. And then it's all easy from there. But really, like, you could get an amazing real estate deal, the best deal ever and still go bankrupt because you don't manage your properties, right? Like, it doesn't end once you get the units. So I think we'll kind of split between the two. So maybe we start with, I mean, let's talk with you.

Like, how did you get started with your own, like, actual investments? Like, what did you buy first? Yeah, I think my first investment was a duplex. I bought this in 2008 in Nampa, Idaho. It was a duplex. It was a newer duplex. It was built in 2006 or seven. And then immediately the guy bought it, leveraged it to the Hilt, right?

And then who knows what kind of tenants they put in there. I think you paid like a 1% cap rate for this thing. It was just ridiculous. And he was just going to hold it for a couple days, right? And then sell it for $100,000 more. And that's what everybody would do. So they put 100% down, probably took a 25% you know, took 25% off the top of that.

And then immediately the market crashed. And then he was in an upside down position. So we bought that in foreclosure. I think he paid 3.34. I paid $1.10 for it. And then it was basically brand new. And I still have it today. And then I just started in 2008, 2009, 2010,

just slowly buying single-family, you know, four-plexes, duplexes. And then the largest project I own is a 42-un. apartment complex. I recently, recently bought a bowling alley with 10,000 square feet of commercial space. I saw that. Yeah. So, you know, it's just, it's just like literally I am not attached one bit to the paint color, the carpet. I strictly look at the numbers, you know, what, what is the vacancy, what is the potential revenue, what are the expenses? And it's really easy. I think a property manager, for example, is a great person to talk to if you really want to

understand what the real rents are going to be and what the expenses are going to be because they're managing hundreds of these things and they can look at their they can look inside of their units and you know make a really good budget assumption on how these things perform and the other thing is really important is that you know every time i i buy an asset and i try to consult with some people when they buy assets is the the folks is never like look at the details the devil's in the details on these things like people don't review the leases they don't review the attachments to the leases they don't look at the applications, who the people are, you know, who the people are in there. And that stuff is really important for you to kind of judge your performance, especially the first

six months. Because if you get in there and there's a bunch of really, you're looking at these documents and they're bad and they're not updated, we've seen, we've seen situations where people are looking at buying a property and they have, you know, deposits in the system that don't match the deposits in the lease. It really doesn't matter what the system says. It matters what the lease says. and then they get just killed when these tenants move out because these tenants are expecting a $1,000 deposit. But the system only says $500. And so there's a delta there.

And I've just seen a lot of investors just get excited about what the box looks like and not like what's inside the box or what's in the paperwork. So it's really important to kind of slow down. If you're doing this for the first time, if you're not sure what to look for in leases and addenda, I think it's really important to get somebody that does know those things. like a property manager, for example, with certifications, hopefully, and, you know, keep you

out of trouble because I've seen a lot of investors get hurt. Yeah. By not you get the right things. That's so good. Like, there's so much in there I want to unpack. First of all, so a lot of people feel, I don't know, there's a lot of bad property managers out there. A lot of really bad ones were, I mean, I've hired some bad property managers. And like, I wouldn't even, like, I didn't even know that was a thing. I could like ask for help or consulting with them because they were just like so busy. They didn't care about anything. Like, And it wasn't until, you know, David Green, who recently published a book through Bigger Pockets called Long Distance Real Estate Investing. And he talks about like this core four, there's four people on your team.

You've got to have a good relationship with and they matter more than everyone. And one of those is your property manager. And he makes this case that like if you have a really good property manager, they are the person you can go to to find out how much is going to rent for, what to expect for vacancy. What are repairs tipping in this area going to cost me? Like so I just think that it was a good point you made there. And it's like, you've got to get a good property manager. like if you need help with these things and we all need help with these things. So I'm wondering, do you have any advice on like how can I, if I'm a newer investor, maybe even not a newer investor,

how do I go and build a relationship with a property manager like yourself? I mean, can I just call you, a cold call you in the phone, be like, hey, I want to pick your brain for a half hour. Is that how it works? Sure. Sure. Any tips? Yeah. And I, you know, and I mentioned, I mentioned this line and I, and I don't, I don't want to forget it because you told me, but you never know how important a property manager is until you hire a bad property manager. I know that line resonates with a lot of people. But if you've ever hired a bad one, you really appreciate the good ones. If you've always had a good one, you just never realize how good they are until you hire a bad one. But yeah, I mean, it's real, I mean, back to your question as far as, you know, talking to a property

manager, I mean, to me, as an investor that buys in other areas, to me, it starts online. I always try to go online and I like to see property managers that really put themselves out there, right? So if you go to, if you land on a property management website and they don't have the staff in there, like the names and who they are and specifically what they charge, you know, and they're upfront about everything, you know, that, that's kind of a red flag to me. Because if they're upfront about who they are online, they're probably going to be upfront and helpful who they are in person. Yeah. And so that's where I would start. And then when you find that person, you, hey, look, I found somebody online. They've got their picture online.

They've got like a Facebook page. They've got certifications and property management. These people have a lot to lose if they don't do a good job, right? That's the people you want to hire. You don't want to hire people to have nothing to lose. And if they have a lot to lose, then they're probably going to do what's right and try to do what's right for you. And so then you can have, you can start building that relationship with them. But I think a lot of it starts online and then just calling them up if you find somebody and not just, not just do a Google search and find the first property manager that's on the top. It doesn't necessarily mean they're the best. It's probably good chance that they're good if they're, you know, higher on the Google search. But I would look at a few.

you to make the right decision. And then just talk to them. And if you're investing long distance, you know, obviously I would highly recommend, you know, getting in a plane, going out there and meeting them as one of the first things you do in going into a new market because there's nobody that's going to understand what the rents are, what the expenses are, what the areas are. If you talk to a real estate agent, I love real estate agents. I'm a broker myself, but they might tell you rents that might not jive with what's actual property manager is they're going to tell you what's right because they're stuck with you. At the end of the day, once the property sells, you're there, they're there.

The agent's gone. You're, you know, they're the one that should be, in my opinion, quoting the rent. A great property manager is a huge asset to me if you're building a portfolio in multiple markets. So you do due diligence on your property management team. Wow, what an amazing concept. Yes. Yeah, well, so I'm wondering, how do you do that? I mean, what are you looking for?

Like when you go and meet with the most same person, I mean, what kind of questions should I ask or what kind of red flags are there that I should not talk to this person, like not hire them? Well, I mean, I'm a huge ambassador for NARPAM, which is the National Association of Residential Property Manager. I was the national president in 2015, served on the board of directors for 10 years.

So I would start there. If you're buying single family homes, I would say you've got to have a certified member of NARPum, preferably a certified residential management company. A certified residential management company has audits done on their property management company on a regular basis. I mean, the worst thing that happens to investors is that,

you know, you have a property manager that's managing your property and they take your deposits and rents and, you know, you never see them again. Yeah. If you have a certified property management company with Narpam for on the single family side,

you, you have your basis covered. I can almost guarantee it. If there, if there is no certified firm in the area, then, you know, again, going back to who is this person in the community, what do they have to lose? If things go bad, are they going to do the right things? And typically, you can see that with their presence online and then meeting them in person. You know, and I like companies that are

a little bit larger because they have typically better systems and better people in place. Yeah. And then, you know, again, they have more to lose if things go bad. That's just, that's typically, that's typically what I see out there. Makes sense. Makes sense. So I want to go back. back like to your may like personal investing again for a little bit. You mentioned a 42 unit apartment building. Where was that at? Why did you buy it? Yeah. The other thing on the apartment side, going back to certifications, I love, I love firms that are involved in Irum, the Institute of Real Estate Management. So these are guys that are going to be very helpful in helping you underwrite the right deal for your apartment. So if you're going to buy an apartment building,

they're going to be able to calculate your cash on cash, your value enhancement, what your IRA is, cap rate is. And they're in the market and they understand that. So you can go to iram.org or narpum.org and find these people. They're little diamonds in the rough in certain markets. But that's, you know, if I was going into a market, those are the two places that I would look first. Obviously, I'd look at at Home River Group first, which is my company. But if we're not there, I'm looking at those, I'm looking at those guys. But yeah, I had a really interesting situation with this 42 unit complex. I had a commercial. real estate agent was contacted by a friend that had a 42 unit complex. They couldn't sell it. This was back

in early 2015. So it was right before multifamily just kind of blew up. And they had this, this, again, this is a situation where I feel like honestly, some of the best real estate deals are the worst managed deals. So it's a good property, just got a bad property manager that doesn't care. And the property manager is not giving the right advice to the owner where they're just trying to like, you know, save money and not, not reinvest in the property. And so it was one of those deals. He brought it to me and said, hey, you know, we wanted, I don't do multifamily, would you, would you help me find a buyer? So I put it out to my group of investors. They said they weren't interested in it. And then I got a couple of buddies and we put together a nice offer on this thing.

You know, I think we paid 1.7 for it. It's under 42 units? Yeah, 1.7 million. Under contract today at 3,025,000 or 2,050,000 or 3,050,000. That's it. 3 million 50,000. So you're selling the property. We're selling the property. We've identified a property because obviously cap rates and Boise have just declined, which is obviously pushed our prices up.

So we're going to 1031 that property into a fourplex community, a really nice fourplex community on the Mississippi, Memphis border. Really? Because our yields out there are way better than they are in Boise. we see right now. Okay. So you just made $1.3 million in when did you buy this? June of 2015 is when we closed. Okay. That's awesome. That's amazing. I'm like, yeah, I'm like I quit. Yeah, I'm like I quit. Yeah, exactly. And just to show you like how important property management is, I mean, we took over this property.

Our average rent was $465. Today, our average rent is $715. Wow. Only, only thing that changed, that we, you know, we didn't do anything crazy to be. We added some baseboard and we repainted the interiors when people moved out. Yeah. And we added dishwashers. And that's it. That's all we did. And we've got the rents up to $715.

And obviously that increases your, your NOI, which, you know, makes your property worth a lot more money. That's all. So it was a decent sheet when you want it. It was just horribly undermanaged. It was poorly managed. And hopefully that manager is not watching this podcast. But managers not watching, they should because you just doubled their rents.

Like literally, like I said, I feel like some of the best deals. And, you know, I probably shouldn't be giving this advice. But if you called a property manager, right, this is, this is just me being honest and this is how I find deals. I'll call property managers I know and say, tell me about your worst owner, you know, who is that? And they hate their life, right? They hate you. They hate their life.

They hate their property. Can you tell them I'm interested in potentially buying that property? Yep. I would love that. And what makes a bad owner? Is this somebody who isn't actively managing it? Is it some, or well, not actively, uh, isn't actively involved at all. Is this somebody who's like slum lord or what makes, what am I looking for when I call up and say,

tell me about your worst owner? Yeah, typically, it's typically somebody that is just like, you know, in a, kind of in a bad position on their property, right? Like you said, maybe, maybe they're a slum lord penny pincher. They're not reinvesting in the property. And so every time they get a maintenance bill, they flip out. They make the property managers life miserable. Well, that property manager is going to love to sell to a guy like me that, you know,

reinvest in the property, makes the property, maximizes the ROI on the property. And then, you know, if the timing is right, I'll sell that property and try to exchange into something else that makes a higher yield. So, you know, and it all just depends on the cap rates. I love, I don't know if you guys have ever talked about. There's an awesome resource called Integra Realty Resources. Have you heard of it? I have not. Awesome.

So it's irr.org, I believe, is the website. And I go on there and just like on a consistent basis, just pull down cap rates in different markets. And you can get specific. You want multifamily. You want industrial. You want office. You want, you know, retail. They have all this stuff, great local knowledge in each market.

Typically, they have some tertiary markets, secondary markets, primary markets, obviously. And you can pull down this information. So if I find something that makes sense to sell, I'll just go to IRR and find where the highest yields, the lowest cap rates, sell at the low cap rate and go buy somewhere at a higher cap rate. It's a great, it's a great resource for your, for your listening audience. That's awesome. Especially if they want to get into commercial and multifamily, you know, that's a CCIM tip that I learned going through my CCIM course is a long time ago. I can't live without Integral Reality resource. It's a great resource.

Okay, you just threw out a ton of stuff. You threw out cap rates and you throughout CCIM. Can you share what that means for people who don't know for Brandon? Yes, please. Yeah, so cap rates, you know, basically cap rates are the capitalization rate of the particular markets you're looking at, and those rates fluctuate based on demand, right? And so right now, if you can buy in this market at a, you know, seven plus, seven, eight, nine percent cap rate, that's a heck of a yield in 2018. You know, five or six years ago, most people were buying at a nine, ten, eleven yield because

rents were pretty stable, but values were down. right now rents are still stable but values are up and so that shrinks your cap rate down so when i go into different markets i look for high yielding cap rates i look to sell and you in low cap rates so i want to sell in boise for example i live in boise at a six and if i sell it boise in a six and i go buy in memphis at an eight or nine and then that is a that is a huge difference in the amount of value that i get for my money you know and basically to understand the cap rates you take you know what what's selling in that market and dividing that into the net operating income and then you get your capitalization rate.

We don't have to go in first. Yeah, yeah. It's almost like, it's almost, I mean, with the technology we use and the demographic searches that we use, it's almost like a crystal ball because rents historically have been very stable where the values have been up and down all over the board. So if you can put in a two and a half to three percent rent increase into your performance, is you can almost pinpoint exactly what your property is going to do if you just throw out home price appreciation or price appreciation, which scares me. I don't, I never, that's like one

piece of advice. I've never bought anything based on appreciation. It's always based on cash flow. Zero appreciation. You'll never get hurt if you, if the numbers look good based on a cash flow, not appreciation. That's a good piece of advice. Okay. So there, I'm going to link in the show notes to a really good article about cap rates because there's a lot of confusion about it and we could spend the whole entire show delving into that. But I've got an article already on biggerpockets.com. So I will get that link and put it in the show notes. You said CCIM and then I want to go back to this 42 unit because I have way more questions. Okay. Yeah. CCIM is a certified commercial institute member. So basically it's a it's a national, it's a worldwide association that trains

real estate professionals on how to buy and sell and basically consult on commercial real estate. So basically apartments, you know, retail office, etc. So I've gone through all the CCIM classes. I took the two-day CCAM course slash test. Yes, it's crazy. But you just really learn how the financial side of real estate works. And it's almost kind of like cheating. You can, you can, like I said, look, look into a crystal ball. It's so important what you guys do and the education that you can get online or in person at these classes, obviously tuning into bigger pockets to understand this stuff. Because once you really understand it, you can really start making smart investments.

And I feel like obviously real estate is a great place, especially with, because I mean, on a daily basis, because what's happening with the stock market, I get people calling me. I got to get my money out of the market. I get people that own retail because retail is scary right now. I know people that have office because of the telecommuters. Amazon's putting retail out of business. Telecommuters are putting office people out of business, and they're all wanting to move their money into multifamily.

So what's that doing to multifamily? Well, it's driving up the price and driving down the cap rate because everybody's trying to go into that market. And again, Integrability Resource is a great thing, a great website to look at. So you can see where the cap rates are floating in each market, office, retail, industrial, multifamily. And you'll see that multifamily is always at the lower end because everybody looks at multifamily is a long runway in this market. They're not sure on office.

They're not sure on retail. But they think multifamily looks really good for a long time because we got all these millennials. We got what the other thing that nobody really talks about is we have all these baby boomers that are downsizing and moving into apartments. It's crazy. We get more. I feel like we get more of those applications than we do the millennials because a lot of the millennials are now buying houses. So it's a pretty interesting market dynamic we got going on right now. Yeah.

Okay. So as I say, I find multifamily looks more and more interesting all the time. Like it just seems to be such a good because everything, but like you said, the everybody is rushing into it, right? I mean, it's a very hot investment.

And so it's hard to find those deals. So I mean, is there any other ways that you're finding deals today other than, you know, talking to property managers? That was an awesome tip, by the way. But anything else you'd recommend? Man,

I recommend building to rent right now, man. Really? That is, I think, is one of the best opportunities out there because what a lot of these institutions are paying for rental single family homes or rental multifamily units right now, you can build them so much cheaper and then potentially lease them up and then sell it to them at a crazy cap rate. And obviously, that's very market specific. I love rental development. Like I said, we've helped put 3,000, 3,700 units in the ground since 2011 in just Boise, Idaho. But I think that's one of the biggest opportunities right now. If you can get the construction price right, if you get the land right,

you can do a home run on multifamily. And I love like fourplex communities where you have a, you know, an HOA of fourplex owners. And you set up that, that POA property owners association. And then you have multiple owners in there. You can sell these fourplexes where you can get 30 year, 4% fixed financing. Awesome. Amazing financing. Get, you know, high yielding tenants in there.

in good locations. I love that play, just building it. Because right now, the people, the people that have multifamily realize that they need to probably sell it. But their biggest issue is, what do I do with it? I can sell it at a six cap, but I have to also buy it a six cap. So why would I go through it? I don't need the cash. You know, back in the day, right, 2011, 2012, cash was king. Today, it's not that way. Cash flow is king now. So they're way more interested in their cash flow and they're way less interested in how much money they can take off the table if they sell it because they have nowhere to go with it. And they're not going to move it into retail or office. So their only option is multifamily and those deals are hard to find. But I think building it, I think talking to property

managers is great. And then I think, you know, if you're trying to look for a grand slam in the smile states, you know, which the coastal states, you know, inland states or whatever, you've got to, you've got to look in the Midwest and some parts of the south. You could still find some really good deals, but a lot of investors are really uncomfortable going into those markets. And that's why, you know, that's one of the reasons why we're trying to build our property management company in those markets because investors know us and they're comfortable with us, but we're not there. And so when we're there, they'll happily look at moving maybe a property in Sacramento at a three cap

and then buying it in, you know, Memphis at a seven or eight cap. Can we go back to the building to rank? Because this is something we never really talk about much here on the show because it's always been a crazy proposition to build something to rent because the numbers never seem to really work out very well. Now, maybe because rents have risen so much in the past few years that that's not entirely true anymore. Do you have an estimate?

Like, what are you paying or what are you seen in terms of price per square foot to build like a fourplex like that? Like where are you seeing that? Sure. Sure. And obviously, these numbers are going to change based on where you're doing that. But I can give you an example, you know, from coast to coast. Typically, if you're going to build fourplexes, typically you'll get 12, maybe 16.

fourplexes on an acre depending on, sorry, not, it's not fourplexes, 16 units or 12 units on an acre if you're building fourplexes, which obviously isn't a high density, fourplex. But tenants love them. They love them. They love the townhome style fourplex. But for example, if you can buy a piece of land, you know, just basically a paper piece of land. It's got no infrastructure. It's got, you know, water, sewer, electric going to it, but not in it. You want to be probably, in our market, you probably want to be under $250 to $2 a square foot. With the entitlements and all the improvements, that's going to push you up probably closer to $10 to $15 a square foot.

And then you probably want to be under $80. So $95 all in makes a great yielding property in Boise, Idaho. That's in our market. If you go to, you know, Inland Empire, right, you're probably because rents there are triple. So you just take that same model and just say, okay, now I've got to be buying it $6 a square foot. And, you know, construction costs are going to be a little bit higher there, not as much of the land. So it's really important to buy the land right.

Believe it or not, there's still land deals out there where there was infrastructure put into these locations back in 2006 before the bubble popped. And you can, there's still some out there. You can buy those. And you can pay a little bit more for those because the infrastructure is already there. you just finish out the streets, you know, and then start going vertical. So if you're at, if you're at $100, let's say you're at $100 a square foot all in. That includes land you're saying where you're at in Boise? That's right.

All right. All right. Let's say then you got, what 1,200 square foot. I don't know what typical is for, let's say, one of those four. Yeah, about a thousand square feet home. Okay. So two bath builds you a nice a minus finish thousand square foot, two bed, two bath. And then a hundred bucks a foot.

Okay. And then what is something like that rent for typically? Let's say you had 100,000. into a single unit of a fourplex, a thousand square feet. What is that rent for in your market? A thousand, eleven hundred bucks. Okay. So you're, you're better than the one, you're like one percent or better in terms of rent. And your repairs are dramatically lower because it's a new property. And you got a warranty. You got a warranty. You got a long runway on that property. And people are doing that all day long, all over the country. And, you know, there's some people

that don't want to do it because they're not really sure. But let me tell you, it's not super hard to find good land deals out there. Construction's not cheap. That's your big challenge. I give you that. But money is really easy to find. I mean, you can find banks all over the country, you know, lenders all over the country that would love to lend. There's a great product called HUD-221D4 loan, which is a 40-year fixed, non-recourse loan that you can get on new properties that you build. It's a pain in the butt to get it. But once you get it, you've got 40 years of fixed low interest rate, non-recourse and you can assume that. So if you want to sell this thing 20 years into it, you can sell that thing and somebody can assume that loan. The loan, in my opinion,

is worth more than the property at that point. So there's a lot of cool options out there for people that want to get into this space. You don't have to be a, you don't even have to be a builder. You just find a good builder that's going to build something that's good at a reasonable price, identify the land, and then go get your financing. And you know, you can knock this out all day long. So how do I find a builder for something like this? I mean, like, I'm not going to call up just the local handyman to go build a, you know, $400,000 fourplex. So who does this? You recommendations? So my, my recommendation, if you're looking in a particular market, get your property manager, call your property manager, or if you're not in, if you're in that market, go and find something

that's being built locally that looks nice, that you like. And then go talk to the contractors. Who's the general contractor here? Hire that guy directly. That's how you do it. Uh, because, It's hard to go to the yellow pages and find like multifamily builders in Boise. They're just not there. But I, you know, if you find a local builder that does a good job, if you go to the national companies, they're great, but they might be a little bit more money, but there's, you know, there's more, they have more to lose, just like the property management guy. But there's, there's plenty of guys out there that do a good job and we'll do it.

You know, I think you could find builders in most markets to build you a fourplex. or a multi-unit, a multi-unit eight-plex or 16-plex at less than 100 bucks square foot all in. And you can get a thousand plus rents. That's what we're seeing in Boise. And Boisey is, you know, not that, not that cheap. Go ahead. Okay. So Brandon usually uses the podcast to glean information for his own benefit.

I'm going to use this one. Brandon, you just sit there. Good for you, Brandon. Good for you. Yeah. There are two lots by my house. They currently have these crappy old houses on them. One of them is uninhabitable.

The other one is almost uninhabitable. Sure. How are you, are you, when you say you're finding land deals, are you finding just bare land or you said that you could find some that had the sewer connected but not like cooked up? Where are you going to find these deals? I really want to buy this house. I don't know that they're ever going to sell it. I should probably contact them.

They're probably not going to call me up and say, hey, are you looking at my house? But where are you finding these land deals? Typically there's what we call land hounds in every market. There's just this agents that just typically deal in land opportunities. And then if you get your local CCIM on the phone and say, hey, I want you to do a demographic research profile and find out where in this particular part of this market, where they need units the most, right? Identify that and then just start emailing those landhounds.

and saying we need properties in this area and we needed that this dollars per square foot to make it work. And magically, they start appearing. Just go to the local call any local MLS person and say, who's sold the most land deals in this market. And they'll tell you and then call that guy. I know who that is in my market. Exactly. Call that guy. Yeah. Okay. You tell me where you want to where you want to build this thing and I'll do a demographic traffic market research profile on that. And man, it's easy to put together. Thank you.

Do you ever buy properties like this one property, it is literally uninhabitable that we had a flood a few years ago and it got water inside and they just use it to store their stuff? Do you ever go in and knock those down and then rebuild this particular property is on this sweet piece of land that's in like a really hot area? And it's this weird shape where I think I could put a fourplex on there. it's currently a single family. Do you have any tips for zoning or is that more like really local?

Yeah, I mean, obviously when you put that property under contract, obviously you want to have basically the disclaimer or, you know, your out clause that if we can't get their proper zoning, that the deal goes south, right? So you just want to make sure your zoning is right before you do something like that. That's what we've seen in the past. And it's hard. And in certain neighborhoods, it's really easy to get your zoning right.

It depends on how passionate the neighborhood is and what the city wants to do. And then in some neighborhoods, it's like impossible. You'll just get fought. You know, people are just nasty about it. So you just want to make sure, you want to make sure you get your zoning right, because you can get stuck with a piece of property that you can't really do much with. And that's not good. But then you can put that in your offer that it's contingent upon the zoning. That's right. Yeah. You typically can you, you know, those land deals, you can string those out a long time to make sure, you know, everything is proper before you buy the property. to be able to put on there what you want to put on there.

Perfect, perfect. There are two kinds of real estate investors, those who have reviewed their insurance, and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehabs, short-term rentals, or LLC-held properties.

These gaps surface only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate investors, understanding portfolios, risk at scale, and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered.

Have NREG review your insurance with someone who gets investing at NREG.com slash BPPod. That's NR-E-I-G.com slash B-Pod. If you think property management is expensive, try mismanaging a vacancy or an eviction or a maintenance issue that turns into a five-figure problem because no one caught it early. That's expensive. A good property manager isn't overhead. Their protection against small mistakes turning into big losses. and that matters more than ever in this economy. That's why I like Mind.

Unlike other property managers, Mind manages your property like an investment. They obsessively measure the things that matter for your bottom line. Things like occupancy, delinquency, and net promoter score, and they have the results to prove it. Go to mine.co slash show me to see how mine performs and get your first month free, which is much cheaper than learning the hard way.

Tax season reminder for all the real estate investors listening. If you own rental property, short-term rentals, commercial buildings, basically anything that's not your primary residence, you need to know about cost segregation. It's an IRS compliance strategy that lets you accelerate depreciation on your properties, which means you're paying less in taxes this year and keeping more cash in your pocket for your next deal. Cost segregation guys is the go-to firm, having done over 12,000 of these studies with 500 million in total depreciation identified. Head to costsegregation guys.com slash BP to get a free proposal and see your potential tax savings.

All right. So let's shift a little bit and go over to some property management tips because a lot of people listen to this show have, you know, one, two, five, ten rentals that they're handling. That's right. And you're the guy. First of how many, how many total units do you guys have under management now? Do you know? Somewhere just north of 13,000. We're in, yeah, we're in 15, I think we're in 15 markets, 11 states. Our strategy right now is that we're going into these markets and we're buying portfolios or platforms, a property management company. So a platform is basically somebody that's a first class operator in that market. We're buying not only the senior management, the units, the company, everybody that comes with it. And then typically once we buy that

platform, so typically they'll have a thousand or more units to buy a platform. And then if they, once we buy that platform and put that platform in place, we'll go give them the autonomy, go out and buy portfolios of properties because there's a lot of, you know, turnkey providers. They're just quite frankly done managing properties, right? And they're just like, just take these things off my hands. I just want to sell turnkeys. And so we'll buy those units. We'll pay them for that. Or there's a lot of mom and pop operators that are, you know, you know, 70 years old. They're like, I want to be done and they'll just sell us the units. So those are those are kind of our strategies as we go into new markets. And we're trying to get in right now to, you know, Texas, Arizona, Georgia. But we're

already in, you know, California, obviously, Idaho, Utah. We're all over Florida. We're in the northeast, North Carolina, Missouri, Memphis, Mississippi, those kind of areas. So, and again, we're trying to get into like, we'd love to get into Alabama because that's a high yielding market. You know, there's great. There's pretty good tenants there. There's higher cap rates there. You know, we'd love to get into St. Louis. There's, there's good opportunities there. So, So we're trying to do. Okay. So let's say you're not in the market that I'm in.

We're in Chicago. I'm not in Chicago. I thought you were in Denver. I used to live in Chicago. You still live in Chicago. We're not in Denver. Denver is a great market, you know, very low yielding market. Yes.

Yes. I am well aware of that. Delightful tip. So what am I looking for in a good property manager when I can't choose Andrew? Um, go to another market. I'm just kidding. Yeah, again, I think, I think it goes back to, you know, finding somebody that is well educated, certified, again, looking at their website just to start the conversation and then

have a smart conversation about investments. Because there's property managers out there that just like, you know, they fix toilets, right? They deal with tenants. And they just solve problems all the time. And that's what they do. And that's needed, right? But there's also property managers out there that like understand investments too and get it and they invest.

And they're kind of in it with you. They're more of like a portfolio manager versus a property manager and kind of understand your goals. What I typically sit down with somebody that wants to, you know, buy something in a market that I'm in. First thing I'll ask them is like, you know, what kind of interest rate are you wanting to get on your money? Which is an interesting question to ask somebody when they're wanting to buy an investment property. because they're not really thinking that way. But if I can help them think that way, like, hey, this is about paying you back

for the money that you put in, ultimately. That's what the investments are. But typically when we're investing in real estate, we don't think that way. But that's how we should think. We should think, you know, cash flow, dollars and cents, money in, money out. And if you can find a partner, a true partner,

that understands the investment side of real estate, that is an amazing asset. Not only do I look for that in my market, I look for that in every market I want to invest. in because, you know, I want somebody that's just as passionate about property management and investment returns as I do in every market I invest in. And I, and I strongly, I strongly recommend that people don't, this is, this is a problem I see with owners all over the country. They find a market they like and they never go anywhere else. And that's a huge problem. It's like putting

all your stocks in one investment. No, yeah, no, no, no, no certified financial planner would ever say, you know, put all your stocks in Amazon, probably should do that anyway. But you want to diversify because things can happen in those markets, right? And if you're only one market and that market tanks, you're in trouble. You're in trouble. So I think diversifying not only in what your asset class is, but in location is really important. But back to your answer, our question, find a property manager that gets the investment side of property management and understands your investment goals. and they're in it with you to make it happen.

I think that's important. I love that. That's a really good tip. All right. So let's jump to some management tips, things like, for example, actually, I want to ask this question first because, again, I like to use a podcast as kind of a selfish thing, but I think this will help other people as well. So for the diversification thing, we just talked about, you just talked about, I decided,

for that reason, to invest out of state. I couldn't find a lot of deals in my market and I wanted to diversify in case, you know, the West Coast gets hit with a tsunami and all my properties go away. So I bought one. in Cincinnati, then Mindy and I together with another partner, Ryan bought one in Maine, which is exciting. But the one in Cincinnati, so I got this property and the rents are right now at like 440 average. Though I look around like 15 minutes away. Like mine's out kind of not in the sticks, but it's a good 15 minutes from or 15 miles from Cincinnati, a little smaller town. Okay, so here's my

question. How do I know how high I can push these rents? Like the property right now, it's in decent shape. I mean, it's got, it's a brick building. But if I go in there and make this thing look like HGTV, you know what I mean? I go in there and I paint the brick, this cool white color, put shutters on the windows, make it really millennial friendly. Can I push it up? Or is it too small of a town to make that worth? I've ridden really debating this lately is how, how do I get these rents from 452 to where they are in other parts of Cincinnati at 650, 700? How can I, how can I get them there or am I just stuck at a low amount? Yeah, I mean, I would recommend what I like to do if I'm looking at a property, I'll do a five-minute drive time map of that property. And then I'll see what the average

median income is for that area. And then it's very easy at that point to say, can this, can this area sustain a six or $700 rent in about five or six minutes? I can tell you what the top side of that is. Even if, even if you, you know, HD, HG, TV, that thing out, right? It's, it doesn't matter because the demographic profile isn't going to justify the rents. You know, I just had this conversation with an investor that wants to buy in Oklahoma City. He's like, man, I think we can get $800. rents here if we do this and this and this and this property i'm like look man the average you know income profile you know the the household income in this area is 31 000 now take 8 000 and and and typically you you want you want somebody to make on the top side two and a half times right yep half time monthly

do that math go backwards and then the top side is that is that number typically if you're going to put me into it. And if that number doesn't make sense, then you're probably, you're probably right where it needs to be. You might, you might not want to put any more money into it because the area just doesn't justify the rents. So it's not, it's not just how pretty you make it. It's like, you know, it's, it's a simple supply and demand economics 101. You're not going to get, you know, people that make $50,000 a year just suddenly move into that area because you've got this, you know, shining beacon in that area because those $50,000 people a year, they are five minutes away in another area. Yep.

That's a really, that's a really good tip. I just never quite thought about it in that way. But yeah, working. I love that. You can, and a lot of people can just go to their local census, you know, census. You know, census.org or whatever, pull that information out. Yep. There's a lot of really good free tools.

You don't have to call CCIM to get this information, although I'd recommend that. You can get you, you can look at those tools and this basically say, okay, look, our, our average median income here is this, you know, this how many people that are, they're this color and this is how many people that are, you know, this age and there's so much information. It's all about just trying to get all the information, putting it together and then making your best, your best judgment on the information available. That's like things like, you know, demographic profile, age profile, income profile, you know, what, what are the jobs like around there and what are those jobs paying? You know, what do the leases look like, right? What do the addenda look like? Um,

the applications. Again, you're just, you've got this, every time you're buying a property, I don't care for a single family home or it's a 400 unit apartment complex, you've got, you open up this box and it's a big puzzle and you just got to put the pieces together. And at the end of the day, if you don't put all the pieces together, it's not going to look pretty, right? But if you put it all together, it'll look gorgeous and it'll work every time if all the pieces fit. But you've got it, you know, you've got to, you've got to look at all these things to make the best decision possible. All right. All right. All right. A couple more questions for you. I throw some quick ones at you.

Do you rent to people who have an eviction on the record, even if it's from a long time ago? Yes, yes. And that is a very market-specific question. So our eviction screening process in one market might be different than like Memphis compared to, you know, Idaho. Where nobody gets evicted in Idaho, a lot of people get evicted in Memphis. But again, you want to whatever you do in each market, you want to obviously treat everybody the same way. But in Idaho, for example, I think if you've got eviction more than seven years ago, we could, if you meet all the other qualifications, we can rent to you, right?

If you're in another market and you had eviction recently that, you know, it's a high eviction market, we might look past that eviction and look at the other criteria that matter of income, right, jobs, security, all those other things. Perfect. All right. What about, do you ever work payment plans out with tenants if somebody calls you and said, hey, I can't make a rent. I lost my job. Do you guys have a policy for working with tenants? Or is it, hey, figure it out. You know, talk to your family friends. I mean, this is, this is one of the other

advantages hiring a property manager. We don't get personally involved in these things, right? We treat it like a business. And I've always recommended to our owners that, you know, we need to treat all the tenants the same way. And we, we understand that there's certain circumstances that happen that cause these people to might have financial difficulties. But if we treat one tenant, we give one tenant a break and then don't give another tenant a break, that could be a potential for a HUD violation. So we strongly recommend not taking partial payments because if you take a partial payment in a month, you can't file the eviction that month. So again, I think the best advice, if you're going to manage it yourself, which obviously I'm not a big fan of, I have all my properties

professionally managed by manager and I'm a property manager. But if you're going to do it yourself, do exactly what the state of the lease all the time. It's the best advice. I could give any investor, follow the lease. If a tenant calls up, don't have a confrontation with them. I give this advice to my property managers. If the tenant calls up and they got an issue, I don't, you know, I need to move out of my house and I've got four months left on my lease.

Okay. Well, I'm going to send you your lease just in case you don't have it. And I'm going to point out exactly what the lease says if you need to move out early. Yep. And if you have any questions, call me back. Yeah, we do the exact same thing. Yep. Instead of, yeah, otherwise it becomes personal, right?

It's like, no, I'm the jerk that's not letting you move out. We blame the lease for everything. Absolutely. Yeah. It's the lease's fault. The lease is fault. The lease said you can't move out. The lease said you have to pay your rent on time.

We agreed to that. And I'm just, I'm all my job as the property manager is just to enforce the terms of the lease. Yep. And do it the most professional way possible. So look, Mrs. or Mrs. Smith, I understand. That's so crazy that you have to move to Memphis or whatever. I get that.

But what I'm going to do, I'm going to send you your lease. and I'm going to tell you exactly what your lease says if you need to break your lease early. If you have any questions about that, let me know. We'll do whatever we can to make, you know, to help you transition the best way possible. All right. Here you go. Send. Leases fall.

Yep. Fall in the lease. But I mean, you know, some guy that's managing property himself, they'll get a call from a tenant. They're like, oh, I can't pay my rent. Yep. And, you know, we managed 13, 14,000 doors. We don't have anybody like a month behind. some guy that manages two or three properties will come in and like, hey man, I've got these three

properties. This one's six months behind. This one's eight months behind. I'm like, you managed three properties and you can't get them to pay on time? Like what's what is my own? He's like, oh, I'm just a nice guy. I'm like, ah, can I run from you? So when I got, when I started building my portfolio a little bit larger, you know, I was up to like, I think 20 some units, maybe 25 units. I was, I found myself always doing that. The tenant would call me and then they would tell me a sob story. And emotion I get involved. And I'm like, all right, yeah, don't worry about it. But then what, how I solved that because I looked at my own weaknesses. Again, some people work on fixing their their weaknesses and some people just find a way around

them. I always find a way around them, right? So I'm like, okay, I'm never going to get better at confrontation or at trying to be less in like emotionally involved. I'm just always going to be. So I need to get myself out of the situation. So that's when I hired my mother-in-law just to answer phones. That's all she did at the beginning. I was like, because she liked, she was looking for a job.

She was recently retired. I just wanted something part-time. It's like, just answer phones for me. And then follow the lease. And if you have questions, ask me. All of a sudden, I never talked to tenants anymore. I could make a rational decision versus an emotional one. And then it's just a job for her.

So what does she care if she tells a tenant no or yes? It's just, you know, because she has to follow my rules, right? So like, yeah, I found that getting myself at least one person removed. Now, if there was a great property manager in my area, hands down, I would have just shifted all over to them. There's wasn't at the time. Now, there's one that's, I'm enjoying right now. But anyway, yeah, that's good. Getting yourself removed from the emotion is so important.

that mobile home park actually Mindy and I just bought. They, when we were interviewing, like going in there, talking to the resident manager, she's like, yeah, well,

this guy owed us, he was behind, I think it was like $6,000 on a $300 a month rent. Like, how do you get, how far behind do you have to be? I mean, I'm sure I could do that math.

But like, that's insane. And there was not, there was multiple people like that, that they had these payment plans worked out of years of not paying rent. Like, really? Like,

yeah. Anyway, one last. story and then we'll move on. Last week, actually, my wife told me that I tried to stay out of the management side now of the business, but she told me the story of how one of the tenants that called up and said, hey, I think it was a check bounce. So we called them and said, hey, your check bounced, whatever. And they said, well, I just can't pay until the 25th. And we did the, well, your lease says you have to do this. And the lease also says that you'll get a, you know,

a three-day notice if you don't pay, which we're going to deliver to you today. And anyway, within like 24 hours, they paid it. So like this, they told like, I cannot pay until the 25th. it's all about priorities, right? Every tenant has enough money to pay rent. They don't have enough money to pay all their bills. So everything gets prioritized. Sure. I remember that.

And another tip, like, I think this is really important. We've seen delinquencies go way down because of this. Definitely look for a property manager that has the ability to get all of your tenants paying online or automatic draft or has like a credit card portal where they can pay. Because we have, we've been taking credit card. cards. We have this thing called cash pay where people can go to like a 7-Eleven and pay cash. It's awesome, right? I love it. And it just goes right into a ledger. It just takes all the screw-ups out of the property management accounting. Property management, in my opinion,

are two things, communication and accounting. And if you can get the accounting automated, it really helps with the screw-ups of the accounting side. But getting your tenants to pay online, have their money automatically drafted or cash pay, have a property manager, has those technology of capabilities because we've seen delinquencies go way, way down. What it just automatically comes out there and think about it, and I have to put it in the mail. In fact, our policy is that, hey, if you sign a new lease, you basically have to pay online at a cash pay location,

has to come automatically, and then you'll see those delinquencies go down. And you'll see the stress of the property managers go out the door. They can focus more on adding value to your units instead of just like being a collection agency, which is a tough burnout job. There we go. I love that. Love it.

Okay, I have one more question before we move to the fire round. I am the community manager for bigger pockets. I am in the forums all day, every day. And I see this question come up all the time. My tenant is late. Should I start the eviction? Blah, blah, blah. As a professional management company, when do you start the eviction?

And what are your state laws? When the lease says. When the lease says. So what is the lease say? Do you use all the same leases for all of your properties in one location, like in one state? or do you use? Yes, we try to have all of our leases the same, but there's certain state laws that will prevent you from doing the same thing, you know, especially if you want to evict somebody in California, it's going to be a much different situation than evicting company in Idaho.

And that's actually, you know, maybe you bring up a great point that like it's very important when you're making an investment choice as far as location. Look at the landlord tenant laws. I mean, that's a big deal. I mean, uh, what, look, look, California is a very interesting fun state, but you could get a tenant in there and it'll take you six to eight, you know, six to 12 months to get somebody out where in Memphis it takes, you know, you just take their door off, you know, whatever. Don't take their door off. You can't do that. Yeah, you can't do that. I'm just, I'm just joking. But landlord tenant laws are very important

as far as, you know, making a, making a choice. So, but yeah, I mean, but again, back to your, we tried to, the eviction, we try to, obviously, we follow the state laws and followed the lease exactly how it says. Okay. So let's say, and do it and do it. Don't do it. Yeah, if they say, you know, oh, man, I'll be out next week. Okay, well, you know, we'll send you up what we call a promise to pay in writing. But just in case you fail, we're going to go ahead through the eviction process. If you pay us, great, but if you don't, we're starting the, we're starting it. That's our leverage point. Yeah, love that. Okay. So in Colorado, I believe, I don't have any Colorado rental properties, so I'm not totally up on my landlord tenant laws.

And finding landlord tenant laws is really kind of difficult. You can't just, I mean, you can Google your state's name landlord tenant laws like Colorado landlord tenant laws. And you try, the links are not as easy as they should be to find. I did some research for when Brandon was writing his book and I looked up every single state and I read them and it's really difficult to find them all. So yeah, definitely look up your landlord tenant laws. But in Colorado, I believe we don't have any grace period.

So rent is due on the first and it is late on the second. And we have a three-day payer quit. So then on the January 1st rent is due, January 2nd, I would post the three-day payer quit. And then that's so that doesn't count the second. So that's the third, fourth, fifth. And then on the sixth, I can file the eviction. Right. In theory.

If everything that I'm saying is true. Yeah. If that's what the Colorado laws, typically your rent can be due whenever your lease says, we typically give them a five-day grace period. So we say, okay, rent's due on the first. We'll accept it up until fifth at five o'clock. But at 501, we're going to, you know, we're going to hit you with a three-day notice to pay or quit.

And then three days go by, we go down to the, we go down to the courthouse. Yeah, we do. And file an eviction. We do the same thing because rent is doing the first. We get until the fifth. Now, some landlords don't do the grace period thing. Some states require it, but some don't.

I like it, though, because a lot of my tenants are on some kind of program. and most of those programs money doesn't go out until the second or third or the fourth sometimes. But almost everybody in the world, almost every program is there by the fifth. If not, then they better just be a month ahead. But anyway, so I always do the, yeah, so like the fifth, on the sixth they get their three-day notice, on the 10th they get eviction filed by the end of the month they're out. Like in a perfect month for us, like that's typically how we do it. That said, like because we follow our lease, like we, that's the irony of real estate.

I'm sure you've seen this as well, Andrew. Like the more strict you are feels like you'd have. more problems and more tenants would get evicted. But no, the more strict you are, the more you follow your lease, the less evictions you have and the less problems. Because what happens is tenants like, okay, we'll make a payment plan for you. Oh, don't worry about that late fee. Don't worry about that kind of stuff. And they're soft and the tenant was then train the tenant to be irresponsible, which then eventually they're going to owe so much money. Then you've got to evict them and they can't ever get caught up. You're doing your, you're doing your tenant a disservice

if you don't like, if you're not strict or if you're not, you know, firm. So, the, my, one of my favorite quotes, I tell it to my people all the time that the lazy parent that cleans his child's room. Yep. Yep. You know, they're people. There are people, man. You got to, I mean, if you give them an inch, they'll take a mile. But, you know, I, I've told that to a thousand people, you know, hey, I don't clean my kid's room because they need to clean their room, you know. And if I do it, they're just going to, they're just going to take that and I'll be cleaning the room the rest of their life. There you go. Super good advice. we're going to talk a little bit more about property manager here in a second in the next

segment of the show, which we call our fire round. It's time for the fire round. All right, this is the fire round. And today we are going to talk property management questions, you know, landlording questions. These all come direct out of the Bigger Pockets landlording forum, which of course you can get to by going to BiggerPockets.com slash forums. And there's specifically one there just for landlord questions. So why don't I start with this one? I just switched to a new property manager, but the old property manager did not send the security deposit to me or all the documents on all the keys and now they're not responding to my calls or emails. What do I do?

That's a sucky situation, first of all. But there's, I think the best recourse there is if you're trying to communicate with them and they're basically shutting you out and they're holding your rents and deposit hostage, depending on what the state's statute is on who oversees, property management, a quick call to the Real Estate Commission or, you know, the Secretary of State typically gets a property manager to like, oh, boy, here we go. That's a great tip. Kind of a last draw, but even saying, hey, I'm going to call these people because you're not calling me back. It's scaring me. They'll freak out and call you back. I'm a guessing.

Now, that's a good tip. I was thinking I'm a real estate agent, and I didn't even consider that. I was like, oh, call an attorney. Glad you answered that. Calling, yeah, calling an attorney. that's just a, watch your rents and your deposits go away in one second because they're going to send them a letter and that's probably going to work, but the letter is going to probably cost more than what your deposits or rents are. So. True. And the real estate commission, at least in my state, they're pit bulls. They do not want anybody stepping outside of the letter of the law. They're really, really strict. So that's a really great. It does. It honestly depends on which state you're in. But if you're in a state where, Property management is overseen by the Department of Finance or the Real Estate Commission.

Those are really, those are, those are, those are, those are calls that, you know, you know, are kind of desperate, desperate last, you know, kind of hell Mary type calls, but they'll work. And I, and you don't even necessarily need to call them. You just call, you say, hey, I've, I've, I'm going to call them if you don't call me back. And that'll typically get them to call you back. That's what I've done. Yeah. Okay.

Here is the service dog question. I would like to know the process. Hey, guys. It's been a great podcast. Thanks. Yeah. Come back. Come back.

Oh, dear. Why? Why? It's a twist. Because you're a professional property manager. I would like to know the process of evicting someone who has a service animal. Is that any different than the normal process? Yes, service animal.

Late rent, not pay rent, noise disturbance from excessive barking in the building, etc. are all the legit reasons to evict a tenant with a service dog. This is a huge question. It's becoming really abused, the whole service animal thing. I didn't sign up for them. Yeah. I can help you.

I can help you. Can't stick them on all the same normal? Yes. I, I, I, I, special preferences, any special, like, extra notice or anything? No. Okay. No. No, I mean, I would hate to evict anybody for anything other than non-payment of rent,

because that's going to be a very expensive thing to do. So if you have a barking dog service animal situation, there might be other things you can do to get them out, like, you know, pay them to leave cash for keys or something like that. I would much, because in most states, if it's non, if it's for anything else besides non-payment, it's a slow eviction process. Attorneys have to get involved.

So, but if it's, if we're talking non-payment, treat them like everybody else. There you go. Don't, if you treat them differently, then you're in violation of, you know, the housing and urban development laws. So you want to treat everybody the same. But if they, if they have a, you know, if they have a note from a provider or whatever, you have to obviously rent to them, end of their pet without charging a deposit, whatever. But if they're not paying their rent, that doesn't give them an excuse. And I've, we've been in this, we've been in this like

situation where people say, it's because of my disability because I can't pay rent. What do you? I mean, that's another, have you had that one? I haven't, but that's, yeah, but that's happened. You know, it's like, I can't, I can't pay my rent because I have a disability and you can't evict me. Yep. What do you guys do? Yeah, I can, but yeah, you can. Exactly, right.

You treat them like everybody else. Yep. It's really what happened. I mean, the whole premise of the, the fair housing laws is to treat everybody the same. And so just because they, they can't pay their rent doesn't make, make them exempt, unfortunately. So, and, and here's the other thing, like, disclaimer. consult your local, you know, attorney on this stuff because what I can do in the states I'm in is a lot different than other states. So this might not apply. But the great advice is treat

everybody the same. Perfect. I love it. All right. Next question. semi-related, but not quite. I recently discovered that our tenants are hiding their ferret in the basement of our duplex. They're otherwise really good tenants. They pay in time, responsible, friendly neighbors. They were keeping them in his mom's basement, them, so multiple ferrets, until she's, She moved in with her boyfriend and then they snuck them in our basement. So the ferrets are caged. I'm just upset they tried to hide it. And in doing so, violated our lease.

What's the best way to handle it? I mean, it's a ferret. So it's not like a dog or, you know, like a German shepherd. No, ferrets have a really bad smell. You have to wash them like every day. Just like minks. All right. So what do they, what do you do?

Do you evict somebody who was a good tenant over that? Again, I strongly recommend at least in the states that we're in not to evict anybody other than for non-payment of rent and try to figure out either for them to remove their ferrets. And I think a lot of this is getting the lease clause right up front. So very specific, you know, no pet policy or what pets are permitted. And if they're caught with a pet, what happens? So our lease will say, hey, if we find a pet in your property, we're going to go ahead and back charge you for all the months that you've lived there, a pet rent. And then we're going to start charging you a very expensive pet rent. And then they're going to be like, well,

crap, I'm going to move out. I can't afford this. Or I'm going to get rid of the ferret. Right? So, but you've got to have the, you got to have that language in your lease that, hey, if, if you're caught without a, you know, an authorized animal in your property, there's serious consequences. And hopefully those consequences are going to get you to get rid of that thing or move out, which is way better than trying to do a slow evict on a, on an animal. And then they're going to, and then they're going to, and then they'll pay the, you know, this is a service animal card. Yeah, they will. They just cured. Yeah. And you're in stuff. Yeah. I, what we've always found is that, like, I mean, it happens. Tenants moving animals. all the time. And they always know they're not supposed to. They always doing it secretly. They always know they're breaking a rule. And so most of them are pretty good, except for the ones that then go and claim service animal. But most of them have been pretty good about when we, when we hit them up, like, hey, you know, this isn't, this isn't going to fly. You know, you have to get rid of the dog. Period. We'll give you to next Friday. They almost always do. But yeah, a couple of times it's been, well, I can't get rid of it. It's my service animal.

And then it's, all right. Right. And that's, and that's awful. And one thing that we, we recommend is a a bi-annual inspection of the property to uncover those service animals. Or not animal, service animals, but pets. Yeah, because there's a lot of people that sneak them in. And they think they do a good job of, like, hiding it. And it's really obvious the second you walk in there. Yep. Yep. All right. Yeah.

Next question. Okay. I showed one of my rentals last night to a person who got through my pre-screening, which includes asking if the person has had an eviction to which he replied never. I did a quick search on his name and address and found he has had a couple of evictions and other small claims looks to me like a professional tenant or one in the making. In practice, what is the best way to handle this? Should I allow him to apply and set him an application and then deny him? Or I'm looking to avoid some falling into some sort of legal trap. Yeah.

No, I typically, whatever your application, so again, you want to have your screening, if somebody applies for whatever, whatever apartment or a house, you want to have your screening policies either on your website or at the office and your application process basically in writing. And so I would just like to release, whatever your screening process says, your application process says, just follow that. It's typically not, I do a quick check to see if you're on the repository and then you do it and then you call them and say, hey, don't apply because I already checked and you're, you know, I wouldn't do that. I would stick to the exact same process every time. Okay. So what I keep hearing from you is, Stick to the same process, have a process, and stick to it and make no exceptions.

Yeah, because I mean, what will happen is a HUD will come in. I'll say the first question, show me your policies and your procedures on, you know, what is your screening policy and what is your process on how you do that? And then they're going to check to make sure you do everything the same way. That's it. Yep. I'm asking this for all the people. Absolutely.

You're a professional property manager. And he says, find a process and stick to it. Yep. That's right. And don't deviate from it. Like, I think it's, I think it's interesting that, hey, you know, I get a, I kind of, this is like the bad thing, right? I get a vibe about this guy.

So now I'm going to go to the repository and, oh, yep, he's got an eviction. Call him up. Hey, don't apply a loser. You've got an eviction. Don't call him. Yeah. And then he goes, and then he calls, you know, the local fair housing council and you're in trouble.

Like, we've had people. Sorry, I lost you. Yeah. Could you go back just? Yeah. So, like, I mean, we always let anybody apply. apply who wants to apply period. Even if they tell us, hey, I've got no job.

I've got a zero credit score and I've got a murder on my background check. We'll be like, well, our policy is we don't run to people who have a murder. But here's an application if you want to apply. That's right. Because then they can't come back later and say, well, you didn't let me apply because you're a racist or because you're a sexist or whatever. You know, there's a million things I could say or because I'm disabled. Perfect. And I didn't know you were disabled.

Well, I can't ask you that anyway. So how do I? And like, the whole thing just gets weird. So like, just follow your process no matter what. Yeah. And if they call up, I mean, this is why it's so awesome to have it on your website. Is this, and they call up and say, hey, I'll shoot you a link to the process and how we do this and what our screening criteria is. And then you can decide at the bottom of that screen, you can click apply. Yep. We put our screening criteria right on our application as well. And it's on when they apply online that's there as well. Like, it's everywhere. So like they know you must make three times or whatever is the rent. You must not have an eviction the last thing. We have seven years. Maybe we have ever.

That's right. We don't rent to smokers anymore. Like, we just decided to stop renting the smoking. smokers because we didn't. Not a protective class. Not a predatory class. Yep. I don't rent to dirty people also. Not a protected class. More subjective.

I don't know if that's actually in my thing, but I, I try not to. You shouldn't put that in writing. No, I probably won't. You could, yeah, you probably want to edit that part out. So I don't rent, we're in Colorado. We have the legalized marijuana. It is illegal on the federal level. So we don't rent to people who smoke pot.

We don't allow, we don't allow them this. I guess you can't really ask them. Do you smoke pot? They're like, yeah. But, Mindy, what if it's medical? Yeah, exactly. Even if it's medical, it's not a protected class. You can't, but yeah, I mean, we definitely have in all releases.

There's no smoking inside. It doesn't matter what it is. No smoking. Yep. And no illegal substances. It's still illegal on the federal level. It may recently. It is, but so is co.

I mean, so is all drugs, right? But there are drugs that you can, like, if you're prescribed medical marijuana, that is now a. drug, you cannot tell somebody they cannot take medical marijuana if it's prescribed, because it's not illegal to take medical marijuana at a federal level. It's only legal to take recreational medical marijuana, right? Now that gets weird. See, no, I thought it was all illegal on the federal level.

No, federal allows for medical, I think. Or maybe they just don't have a log. We need a marijuana person on the site on the show. Let's get some marijuana people. So what do you know about that, Andrew? Like, I'm not the guy. I'm not either. I just live in the state.

So maybe, maybe. It is, I don't know about the medical thing federal-wise, but either way, like, it gets really sticky because then, like, it also is weird because you can't even ask a tenant if it's for, like, you can't ask them what their disability is that they need it for. And it's just, it gets weird. So we try to just, we try to find other ways to avoid tenants that, I typically if somebody's like, there's always something you can find in a tenant almost that, that is legal to discriminate against, you know, like, we don't rent to people who have not enough income or job or whatever. It's usually not just one thing. It's usually not just marijuana. Yeah, they're usually hitting a lot of those. Correct.

That's correct. Usually. That's usually the case. And if, you know, we have in our policy, right, you know, if it's an income issue, you can get a co-signer, right? Or you can, if your credit's not there, you can pay additional deposit and stuff like that. So we try to, we try to work with them, you know, if they, if they shine in all the other areas, but it's one area that's not a, like a definite no.

You can look at cosigners or additional deposit and stuff like that to help protect you. There you go. All right, let's move on to the last segment of the show, which we call our Famous for. All right, these are the same four questions

we ask every guest every week and we're going to throw them at you. Number one, Andy, what is your favorite real estate related book? Favorite real estate related book? I've done, read a lot of real estate books.

The, I would say, put it up there. Let me see. Let me see what it is. The book on rental property investing. Thank you, Mindy. Wow, thank you.

My book on rental property investing is my favorite book. But since I haven't read that one yet, but I'm going to now. Good. You better. I love the, it's called the CI 101. It's a commercial real estate investment book put out by the CCIM Institute. And it's everything you need to know about how to invest the numbers in real estate. It's probably not a book that, you know, it's a great book if you're not interested in that stuff to put you right to sleep.

But if you're interested in it, you'll love it. It is years of great research and smart people put that thing together. Well, lucky for you, everybody here is really into that stuff. Yes. So is this a readily available book since it's by the CCIM Institute? Do you have to be a CCIMR to get it? I think anybody can get it. And I think there, if you, if you Google search CI 101 commercial investments, you'll be able to pull that down. Okay.

All that, all that really deep, like, you know, how to how to understand how the investments work by the numbers, it's all in there. And it's pretty easy to follow. Okay. I will put a link. I'll find it a place that people can buy it and I'll put a link in the show. Yes. You should be able to buy it. Okay.

Thank you. What is your favorite business book? non-real estate business book. I'm a culture guy. I love to try to figure out how what kind of motivates people. And I think the one that I've kind of gone back to a lot, obviously, you know, the one that kind of transferred my life, the one that got me out of being kidnapped was how to win friends and influence people.

But business book specifically Drive by Daniel Pink was very helpful. Cool. I've not read that, but I've heard it's good. Yeah, no, we've got, in Boise alone, we have almost 100 people, 300 people nationally that work for our company. So it's like, how do you keep property management exciting every day? If you figure that out, right, you've got some great things going on. And that's a great culture, you know, what really drives people to be great every day. Perfect.

Don't screen your tenants. That'll keep it exciting. Oh, yeah. All right, what you got, Mindy? What are your hobbies? What do you like to do when you're not doing? real estateing. So I always think about like a million things are going in my head all the time. Opportunities, threats, you know, it's like a SWAT analysis happening every second in my brain,

right? There's one thing that like turns that off. And it's stand up whitewater paddleboarding. Oh, really? Oh, that's neat. Yes. Is there, are there opportunities in Boise to do you stand up? I can leave my office at five o'clock and be on the river at six o'clock and then have a two hour float. and be off the water by 830 and be home by 915 before it's dark in the summer. That's awesome. Yeah, we just, we float the, it's got some class two and class three rapids. There's Gloif and Mike's hole. There's like, they all got names and it's awesome.

But just like trying to not die when I'm doing that activity is just takes 100% of my focus. And so that's why I love it. It just takes everything away. That's great. First of all, I did not know there was a thing stand up white. water paddleboard. I've heard of paddle boarding, but that's super cool. I want to try that sometime. It is. You're welcome. I will, if you come down, like, you'll, if you've done paddleboarding, you'll love it. And like the first couple times, you'll, like, sit down on the rapids and kind of canoe

through them, but you get through a big rapid, you stand up on that thing, you get through, it's the best feeling in the world. That's awesome. So that's actually why I love, I'm addicted to surfing. I love surfing. I first went to surf with Mindy, and then I went out to Hawaii last April. I'm actually going out there on Sunday, moving out there for the whole winter just to surf, because it's for that exact reason is my mind clears when I'm on the water. Absolutely. You're in the zone and it's the best feeling ever. Yep.

And it's dangerous. I mean, like I said, I take, it takes so much focus to not die. Yep. And so I'm just just trying to get through that. The core must be awesome. Oh, no. No, it's not. Let's see it.

Let's see it. But it is, it is intense. It is so much fun. And like I said, it's like the only thing that just takes all my focus because it requires your focus. Yep. I love it. Nice. All right.

My last question of the day, what do you believe sets apart successful real estate investors from all those who give up, fail, or just peer and simple never get started?

One word, man, knowledge. You know, knowing, knowing what to look for and again, just putting the puzzle together. I think you can get lucky on a couple deals,

but if you're not, if you don't know what you're doing and you're not asking the right questions or looking for the right thing, eventually they'll catch with you, the people that have done it and continue to do it and be successful, you know, in general, over long term, really understand how the investment side of the asset works.

And if you can do that, you can make real estate work in any market, in any market, you know, you can make it work. Cool. Fantastic. That's a great answer. Okay, Andy, where can people find out more about you? You know what? Our website, we have our national website that links to all of our local sites,

Homeriver.com. It's very simple. www.homeriver.com. You can find out more about me there. I think there's a profile on me there. Our chairman, John Herschfeld, all the senior vice presidents we have working for us. We have our national M&A and finance is based in New York. Our headquarters is in Florida, and then we have 11 states across the nation. So we've got a pretty good footprint, but we're trying to grow. We're obviously looking for people that need a partner in property management. People are looking to sell their property management companies. We have a great

private equity firm that's helping us acquire property management companies. So we're trying to do something that's never been done, which is a bona fide real national property management presence. There's a lot of bigger property management companies, but they're not in every location. And we want to, we want to do that. We want to be the first ones to do it. And that's tough. A pioneer in any venture, it's a tough road, but it's super exciting, super exciting. Oh, cool. Well, cool. Last question I actually do have. I said it was the last question, but you own a bowling alley. So I want to know, like, what is your average bowling score and what is your best bowling score?

So, again, I did not buy this bowling alley because I love bowling. It was strictly not dollars and cents purchase. Okay. I have learned to like it. And there's this whole world of bowling that I didn't know existed. It's awesome. It's crazy. But I say my average is gone up from about.

80 to 100, and the best I've ever done is 174, and that's true. But if there's an awesome article about when I bought this bowling alley, because it was owned by one family for 50, 60 years, and then I bought it back in October. But I believe the headline is World's Worst Buller buys Historic Valley Alley. So it's a great read. Idaho Statesman front page is awesome. I will link to it. Go bowling.

I actually love, I love bowling. I'm horrible at it, but, you know, I like it. It's fun. All right. It's a fun thing. It is. It is. It's a fun thing.

It's not as cool as stand-up waterboard. No, waterboarding. Yeah, I like waterboarding. Not as fun as waterboarding. I love being waterboarded. It's awesome. All right. I'm that note.

Let's get out of here. Thank you so much. Andy, this is a lot of fun today. And, you know, people have questions and they want to know more from you. Ask it in the show notes, which you can get. at biggerpockets.com forward slash show 265. Thanks so much, Andy. You guys are great.

Thanks. Bye. All right. Now is our show with Andy Preffs. Man, that was crazy. Starting with his kidnapping story. That was awesome and very sad and tragic and amazing that he got out of it. Yeah, that's, I mean, yay, he got out of it.

Can you imagine being kidnapped for a whole week in a country that I'm sure he spoke the language, but not like super amazingly well? And Russian mobsters, that's kind of scary. I getting beat with baseball bats, man. Well, that's probably not the best day of his life. Probably not. But he has a cool story, though. Like, I really like, I love the way that, I don't know, I feel like when I talk to a guy like him who's a professional property manager, like in the fact that he does everything almost the same way that I do things in my business.

I'm like, okay, good. I'm doing things probably right. Like, and I see people who just struggle so much with being a landlord. They really struggle with being a landlord. And when I look at the reasons why, it's because, like, they don't follow processes. They don't follow rules. They don't think that they have a business. It is like doing it like they're, I don't know,

sewing a hat on their head or something. You know, like that's like a hobby, right? Not like a business. I don't know. What do you call that when you like crocheting? Is that the word that people, hipsters like to do today? They crocheting is the, yeah.

That's a hipster thing. I don't know. They do it. What would you know about hipster things, Brandon? Hey, I've got big glasses. I'm sure I could weigh them. I actually don't. All right.

Anyways, I got a lot out of it. I got so much out of it. I really enjoy. enjoy is not the right word. I'm so like reassured that everything that I have done in my rental property management career and everything that I am continuing to tell people in the forums all the time, you know, have your processes,

stick to your rules and, you know, follow your lease. It's nice to hear that somebody who does this for a living as his actual job says the same thing. That's very true. And kid, I insert a shameless plug here. So my wife and I actually wrote a book called a book on managing rental property.

It is a big bright yellow book. You can get it at any Barnes & Noble pretty much in the country. Also, you can get it at BiggerPockets.com slash store. But it's like 397 pages of just how to manage tenants. And like I said, almost everything Andy does, we do.

So if you want to know our process and how we do it, including there's like forms in there and all this is kind of cool stuff, get it on Amazon, get it from Barnes & Noble, or get it with a bunch of bonuses when you get it at BiggerPockets.com

slash landlord book. I think you can get that one and the book on rental property investing in a bunch of other stuff. Biggerpockets.com slash, oh, that's not it. That's bigger pockets.com slash rental. Oh, man.

What's that? Slash rental property book? I can't remember. Hold on. Wow. If only there was a way to look this up, Brandon. Rental book. Rental book.

Let me try that. Bigger pockets. com slash rental book. Yeah, that was it. Okay. So go to bigger pockets. com slash rental book. And you'll get, you can get, you get the big yellow book and the big blue book

combined together 600 and some pages of property management stuff plus other. other cool stuff. So, you know, I don't, I don't want to diminish your. Please don't. I don't want it to sound like. like a shameless plug or that I'm like stroking your ego. But this is really well written and it's easy to understand. Any big words you explain in plain English.

That was my wife. I don't know big words. So I don't write big words. Okay. Everything that Heather did was beautiful and perfect. And then you, you know, came along. I came along and put my face on the back cover and we sold some books. So, you know, I'm a male model.

What can I say? Oh, no. But yeah, these are great books. Thank you. You're too tall to be a male model. I am too tall to be a male model. And I don't have a six pack. So I'm not going to model, you know, whatever.

I don't care. I'm a hand model. Just like on Zoolander. Remember that? A hand model. I actually didn't see Zoolander. All right. I'm leaving.

I'm leaving right now. This is done. How have you never seen Zoolander? It's like not a, it's like top five best comedies of all time. Maybe even top like two. Best comedies. It looks stupid. No, the gasoline fight.

accident. Oh my gosh. So funny. I want to see a gasoline fight. So funny. And like the, oh my gosh, there's so much good stuff in that movie. You've got to watch that now. Zoolander. Like you and I are going to watch Zilander. We'll bring Carl in and Heather won't care. But you and I and Carl will have a good time. We're to watch it. All right. Okay. I will put that on my list. Please. I would, since you got to do a shameless plug, I am going to do a shameless plug. Okay. What is it? On Monday's episode of the Bigger Pockets of Money podcast. That's your new show. That's my new show. We talked to Scott and I talk to Mr. and Mrs. Waffles on Wednesday. And they have a really amazing story about how they decided they wanted to become financially independent.

They share their tips for how they have their own business that helps them write off. All sorts of things that you normally wouldn't be able to write off as just like a regular person because she works from home. It's a really great episode. They're really interesting people. And I would encourage you to check it out at biggerpockets.com slash money show eight, money show zero eight. All right. Now I got to go and see if that's actually the show them. So while you're looking that up, you know, it's funny.

Like you hear people's last names like Johnson is like son of John or like Thompson is usually a son of Tom. Like back in like hundreds of years ago when they came up with last names. Where did Mr. Mrs. Waffles on Wednesdays come? Like, where did that last name come from? I'm just kidding. I know that's not real. But we cover that in the show. And I was a big fat liar.

It is actually show number seven. Oh, you are a liar. So that is biggerpockets.com slash money show seven. Zero seven or just seven? Zero seven. Okay. Seven would also work. I do a redirect.

Oh, okay. Good. So, yes, a thousand apologies for giving you the wrong information the first time. But yeah, it's a great show. Lots of fun, lots of energy in that show. So check it out. All right. Well, with that, let's get out of here.

I've got stuff to do like real estate stuff. So I'm going to get out and go do that. You're going to nap. I might nap. I have enough to do. Okay. Brandon, thanks for letting me step in. Thank you.

I always have a good time when I come to the show. I enjoy having you here. So thank you. And who knows, Josh will be back soon. He's, he's, I think he'll be back soon. We'll see. So anyway, all right. Let's go out of here.

So for the Bigger Pockets podcast, this is Mindy Jensen, signing 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. I'm the host and

an executive producer of the show, Dave Meyer. The show is produced by Ian K, copyrighting is by Calicoe 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.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford. to lose. And remember, past performance is not indicative of future results. Bigger Pocket's LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a

reliance on information presented in this podcast.