BiggerPockets Real Estate Podcast - 652: Landlord Lowdown: 2022 Market Questions Answered from 4 Expert Perspectives

Episode Date: August 23, 2022

You may already be a landlord, or you might still be searching for your first rental property. How should you go about finding a winner? What’s the best real estate market to invest in and how do you make the most money while having the least amount of stress? Only experienced landlords know how to answer these questions. They’ve bought dozens of houses, dealt with numerous tenants, and been through trial and error, so you don’t have to. And that’s exactly what this episode is all about. Ashley Kehr, host of the Real Estate Rookie Podcast, and Craig Curelop, author of The House Hacking Strategy, are here to answer common landlording FAQs. Both Ashley and Craig have had so much interest in their individual endeavors that they’re now hosting the BiggerPockets Bootcamps! Ashley’s will teach you about buying (and managing) your first property the right way, while Craig’s house hacking bootcamp will give you everything you need to buy your first house hack property in just ten weeks! Along with real estate regulars David Greene and Rob Abasolo, Ashley and Craig will be touching on some hot topics in today’s episodes. Topics like when to give rent credits to tenants, pros and cons of renting by the room, the first steps to take after getting a property under contract, how to show your rental units, and where to find the best real estate markets around.  In This Episode We Cover: Tenant rent credits, when to apply them, and the dangers of using them improperly Pros and cons of renting by the room and how house hacking can be seriously profitable Mixed-use properties and the first steps you should take after getting one under-contract In-person vs. virtual showings and which are better for leasing/selling a property Becoming a “passive” landlord and setting your system up to take care of headaches for you The telltale signs of a great rental property market and which states show the biggest signs of progress And So Much More! Links from the Show BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast Get Your Ticket for BPCon 2022 Listen to All Your Favorite BiggerPockets Podcasts in One Place Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area David's BiggerPockets Profile David's Instagram Rob's BiggerPockets Profile Rob's Youtube Rob's Instagram Rob's TikTok Rob's Twitter Enroll In the BiggerPockets Bootcamps and Get 10% Off Using Code “BOOTCAMP10” Listen to The “Real Estate Rookie” Podcast with Ashley Kehr Avail’s Landlord-Tenant State Laws Book Mentioned in the Show: The House Hacking Strategy by Craig Curelop Connect with Craig & Ashley: Ashley's BiggerPockets Profile Craig's BiggerPockets Profile Ashley Instagram: @wealthfromrentals Craig's Instagram: @thefiguy   Click here to check the full show notes: https://www.biggerpockets.com/blog/real-estate-652 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 6.52. When you learn anything new or when you're trying to get into anything new, education always comes first, right? Education times action equals results. And so you can keep adding education, adding education, education. But if that action is zero, you're never going to get anything. But also the other way around. If you're all action, all action, all action, and no education, you're not going to get anything. So the first step I always think is education.

If you're listening to this podcast and you get one of these, you know, go to one of of these boot camps, your education is going to be there. But that time we're done with the boot camp, you're going to be ready to take action. Then all you got to do is worry about that second part, which is action and then successful bedfall. What's going on, everyone? This is David Green, your host of the Bigger Pockets Real Estate podcast here today with my co-host, Rob Abasolo, where we are bringing you a fire edition of the show.

We are joined by Craig Curlop and Ashley Care to other Bigger Pockets heavy hitters as we bring our insight, experience, and feedback into answering commonly asked questions directly from the bigger pockets forums. In today's episode, we get into stuff about house hacking, avoiding time showing properties when you are renting them, what's going on in the market, where we're buying, and more. Rob, what were some of your favorite parts of today's show? I just like the unique perspective of everybody. There's four of us. We all come from different paths, right? When it comes to real estate, there's short-term rentals, long-term investing, long-distance investing in house hacking. So it was really nice to get a nice, balanced view from

everybody. Yes, sir. And it was pretty fun, by the way. So if you want to be entertain and learn something, this is a podcast for you. We're going to get to it in a second, but before we do, today's quick tip, brought to you by Robert Alvasolo. Ah, yes, ooh, quick tip. You put me on the spot here. So if you don't know, bigger pockets host boot camp. So if you're looking to get into real estate, we have a bunch of different boot camps that can help you do that. We have the rookie boot camps to help you get started. We have rookie landlord boot camp to teach you how to manage your property, multifamily boot camp for your next multifamily investment purchase, short-term rental boot camp to dive into investing in short-term rentals like Airbnb's and vacation

homes. And finally, house hacking boot camps, diving into earning income from your primary residents through creative strategies on your property. And the quick tip here, getting to that, boot camps are only $489, which is already a great deal, but it's an even better deal if you're already a pro member. The boot camps at that point are just $1.99. And if you're just a listener of the show, you can get 10% off right now when you use promo code boot camp tent. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time-consuming, and expensive. But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the

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But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Fundrise flagship fund. Now you can invest in a $1.1 billion portfolio of real estate, starting with as little as $10.10. The portfolio features 4,700 single-family rental homes spread across the booming sunbelt. They also have 3.3 million square feet of highly sought out. after industrial facilities, thanks to the e-commerce wave.

The flagship fund is one of the largest of its kind. It's well diversified, and it's managed by a team of professionals. And it's now available to you. Visit fundrise.com slash BP Market to explore the fund's full portfolio, check out historical returns, and start investing in just minutes. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship fund before investing. This and other information can be found in the fund's prospectus at

funrise.com slash flagship. This is a paid advertisement. All right. Let's bring in Ashley and Craig and get to the good. stuff. All right. So today's format's going to be a little bit different, but a lot of bit of fun. We've got several Bigger Pockets personalities, all with their own expert analysis on different elements of asset classes in real estate. And we're going to be taking questions right out of the Bigger Pockets forums and giving our two cents on what we would do. We would hope that our

answers can help you on your real estate investing journey and keep you entertain while you're learning. Moderating us today is the moderator, Rob Abbasolo, himself, Rob, take it away. Hello, hello, yes. You can call me Mod Rob for short. And I think that's actually a very fitting name. You kind of moderate it on my behalf. This is my job, David. I'm taking over from here. Look at me. I am the podcast host now. So we all come from different backgrounds, as you said. So I think we all kind of share a very unique experience here. I'm short-term rentals. We've got long-term rentals. We've got

house hacking. We got long-distance investing. So we're pulling a lot of these questions straight from the forums and we're looking for everyone's very spicy or moderate takes here, all right? So don't hold back everybody. It's a Friday afternoon. Let's get into it. First question, when do you give rent credit to a tenant? And is this something that you've encountered often in your rental histories? We'll start with, oh, let me do the official moderator thing here. We'll start with Ashley Care. Well, hello, everyone. My name is Ashley Care. And I'm super excited to be here today to talk about landlording because I'm hosting a landlord boot camp that is coming up this fall. So I have given credit to tenants before. And one of the biggest

reasons I have done that is because I want to get rid of that headache. Sometimes just taking the initiative, by listening to the tenant, understanding what the issue is and giving them a little bit of a credit has made a big difference. And instead of me battling with them and it becoming a bigger issue because I'm not giving them the $25 credit they want for that month for something. And the biggest reason that I have given credits before is if they are having maintenance done and for some reason the maintenance hasn't been done. Maybe their fridge broke down and I cannot get somebody there until the next day. I've given people a credit to go and buy ice and buy a cooler to keep their food in until the fridge can go and get repaired. So I definitely am for giving credits

just to like get rid of that headache. Another thing I've given a credit for besides maintenance is just like any kind of disruption that may have occurred on their property that may even be out of my control. Just maybe they've come in and landscapers I hired, you know, accidentally chopped up something with the weed whacker that they had outside. So I think it's, it's great to have a relationship where you can give a little to a tenant when these circumstances happen instead of just constantly saying, nope, this is what the rent is and being strict and firm to it. But then there's other times where you shouldn't give in to a rent credit. So for example, there was a water leak into a unit. and it was because of the weather.

Ice had dammed up on the roof of the property. Water started seeping in behind the ice, and it leaked into some of the units. And it damaged some of the contents, the property that the tenants had in there. And we had our insurance cover, you know, repairing the drywall, getting in there, making sure there's no mold forming,

taking care of the unit as quickly as possible. The tenant wanted us to cover the contents that were damaged. And that is why a tenant has renters insurance. So that was one instance where we didn't give a rent credit that we had the tenant go to the renter's insurance to cover their personal property in the unit. So that's interesting. Have you come across that situation often where you were, there's something that the tenant could have done to sort of prevent it on their end? In this example, they don't have the renter insurance. So is that, is that the, is that a hard

line that you draw all the time with all your properties? Well, this one was because it wasn't, like any neglect on our part that something happened to the unit. So it was because of the weather, that the ice built up on the roof. There was nothing we could have done to prevent that during that time. And so that's why we had them go, and they actually did have renter's insurance. They just didn't want to use it because, you know, you make a claim, your premium goes up. So if there was something that was, maybe there was something that was neglected on the property and that did cause damage to the tenant's property, then yes, I would feel that I would be, you know, my responsibility to give them a credit or to give them money towards replacing

whatever was damage on the property. Yeah, it's an interesting distinction because in short-term rentals, it's the very same thing. If it's something that's my fault, I will always offer to try to make it right in some capacity or refund them for the inconvenience. I've just had two, I've had actually a lot. Over the last week, I would say probably Alyssa. of 10, not catastrophic items, but 10 things that have just really taken my time. And so two examples here in my Scottsdale house and David Scottsell house, our water heater went out and it kept going out on the guest. And so in those instances, that's on our fault. Not really a neglect thing, but obviously the water heater, you don't know when it's going to go out. So we had to refund the

guest for that instance. Fast forward to like two days ago and my guests actually happened to lock themselves out of my house. Now, we have electronic keypads on both doors. but the guests managed to lock the deadbolt for both doors, and they decided to leave through the garage for whatever reason, and they closed the garage. And so when they called this, they're like, hey, the code's not working. And fast forward to like four hours later, they were really, really, really, really mad. And I'm like, well, I mean, you guys locked the dead bolts and locked yourself out. You went past my fail saves here, and you still managed to lock yourself out. And so that was an instance where I was really sympathetic, and I apologize. But it wasn't an instance in which

I would have offered a refund because there's not really anything I could have done about that. I sent to locksmith out. I helped them out. I adjust it very quickly, but that's not something that I wanted to take the blame for just because I was such a niche scenario that's never happened in my 1,000 stays, five years of hosting. David, I know that you have properties across the country. I know you've really scaled your operation, really from coast to coast here. So what do rent credits really look like for someone at scale like yourself? First thing I'll say about this is that I haven't given rent credits out before. It doesn't mean I never would, but like Ashley said, it would have to be something where I messed up. I would also say I'm more likely to voluntarily offer a rent credit than

have a tenant try to hold me hostage, which I think is what happens a lot of the time. You, you work in the restaurant industry for a while and you get those people that complain about everything they can about their food because they're hoping that you'll give them something free. That'll usually cause me to just be more firm than I normally would have been. Then on the other side, though, I will say it's better to give someone a rent credit than to decrease what their monthly rent is. And that's because with rent control that's starting to pop up in more and more cities and inflation increasing so quickly, if you spend a couple years not increasing your rent, you can get really, really far behind and then be unable to increase it to market rent because of rent control restrictions. And since a lot of these properties are valued based on the income they bring in, if you have a property that's, renting for below market rent. We see this lot in San Francisco where there's a building that

comps would say it would be worth $2 million, but the rents are from 10 years ago. They haven't been able to keep up. So the property itself is not worth, like no one wants to buy it if they're going to be renting out for $1,000 a month because they can't raise the rents to the $5,000 month number that they should be. So in those scenarios, rather than discounting someone's monthly rent, which I think a lot of landlords do when they're trying to have a good heart, it's like, oh, I'll keep their rent low. No, bump. their rent up and give them a credit instead. It's the same to them, but you don't fall behind with the laws for rent control. The other little caveat I'll add is a lot of times property managers

will ask you as the landlord to pay for something because they're more likely to get money out of you than the tenant. So I just got a DM from someone that was asking me that the tenant screwed something up, messed up the plumbing in the toilet, and then the property management company tried to build a landlord and say, hey, this is what the plumber. bill was and they were saying, hey, is this on me or is this on the tenant? And I had the exact same scenario. I had a tenant who said the toilet is overflowing. We send out a plumber. The plumber pulls out a little stuffed animal from the pipes of the toilet. And I said, yeah, send me a picture of that. And I sent it back to the landlord and said, I wasn't in the house to shove this thing down

the pipe. So I'm not paying for this plumber. And the tenant put it on to the rent that month. So sometimes you have to pay a little bit of attention because you just assume that the property management company is going to bill you as a landlord before they go to the tenant because it's faster for them and they're more likely to get the money out of you. Sure. I think that's fair. I hate when that happens, by the way. I tried not to stuff stuff animals down my toilet as much these days because those plumbing bills are really expensive. But I also wanted to ask, are there any creative uses of rent credit that anyone here can speak to? I know for me, I know that I can reimburse a short-term rental guests their nightly rate or part of their nightly rate if I have to. But what I like to do is

actually offer them sort of like a dinner, if you will, or sometimes we'll send like a bottle of wine or something like that because I feel like that's more personal. It's like, yes, I could reimburse you $100. And I'm sure you'd be happy with that. But what I like to do is say, hey, I'm so sorry about that. What I'd like to do is just buy you and your family dinner. Is that something that you guys would be okay with? Just send me the receipt when you're done. And I'll send you a reimbursement through Airbnb. And most people typically are very happy with that just because they're like, oh, that's a very nice thing that you're willing to do. And I think it goes a little bit further than just sending like a blank check in the in the Airbnb system, if you will. So Craig, as our resident

house hacking king here, can you tell us a little bit about how rent credits work in your space? Because I know when you're coexisting and living in the same space as someone else, what is that like? Is it tough to have conversations that might require you to either approve or deny a rent credit to your tenant? Yeah, you know, honestly, it's a lot, it's very similar to what Ashley mentioned, right? It's the way I kind of look at it is I'm giving these people a product, right? I'm giving them a place to live for relatively inexpensive. In return, they're paying me rent.

And so at any time that product is damaged, then I would be willing to hear about a rent credit. And so kind of like Ashley said, a lot of times if there's maintenance or something kind of happens, you know, there was one time recently where our water pump was broken and we didn't have water for like three days. And I gave, you know, I gave the tenant like $100 discount on rent. for her inconvenience. And she was super happy with that. And oftentimes I'd like to try to get ahead of it versus have them ask for it

because then it makes them seem like, you know, they're, you know, it makes a relationship that much better if they don't have to ask for it. And they're more likely to stay, reduce turnover. And in a rent-by-the-room situation, turnover is actually a pretty big deal. So anything you can do to reduce turnover instead of that I would highly recommend. In terms of like having a conversation when they ask for it and I don't want to give it to them, again, I try to bring it to the lease, right? to keep things really simple. But again, if they're like really up front, if they're really crazy

about it and, you know, they're starting to act emotionally. Oftentimes, depending on the amount, I will just give in just to kind of let the, let the problem pass so they feel like they're having a good place to live. Because at the end of the day, you need to make sure that these people enjoy where they live or they're going to make your life. I mean, that makes sense. I think if you offer it up, it's usually a delight to people versus if they have to ask for it, then tensions are always going to be a little high, which is obviously something that you probably experience in the house hacking arena. So I actually wanted to get into that a little bit and ask, can you run us through some of the pros and cons of renting by the room? And this could be in the capacity of

house hacking. It could also be if you wanted to just have a lease where you were renting all the rooms individually. Give us a little bit of kind of the both sides of this concept. Yeah. So the pros are, obviously you can make a lot more money, right? For example, I've got a house in Denver. It's a five-bedroom, two-bath. And if I were to rent that as a single-family house, I'd get about $26, $2,700 a year. From a rent-by-the-room perspective, I can get between $37 and $3,900 a month, sorry, $2,27 a month or $3,700 a month. So we're talking $1,000 a month difference just by renting by the room. And so you really need to, you know, take a look at it and see if it's worth it for you. The cons, right, is that it's a lot more work.

There's some tenant conflict. No one really feels like they own the house. They have ownership of the house. So they would be less inclined to, you know, there's a little leak under the sink. They're less inclined to fix it like someone in a single family house might. And so it's a little bit more management intensive, but it's a lot, you know, a lot more profitable. And inexpensive markets, especially ones like Denver, Seattle and kind of these tier two type markets where you can rent by the room and make things work. You know, I think it's a great way to, you know, to be able to house hack and to be able to cash flow and live.

rent-free, inexpensive market that you can also get appreciation. It's a way you can have your cake and eat it too with great cash flow and great appreciation. Sure. David and Ashley, I'm curious, have you all ever done the house hacking thing? Is this, have any point in your real estate journey, have you ever done a, just a very simple house hack? I have not done one and I wish that I could have, that I would have known about it before I built my house. But I actually did it through my sister. So she was fresh out of college and wanted to buy property. So I got her to purchase a duplex and I partnered with her on it. We were 50-50 partners and I gifted her the down payment for the property. She went and got an

FHA loan and she lived in one unit, remodeled the whole unit, moved out to the upstairs, rented out the bottom one with increased rent. And now she lives in that unit where she could rent out for probably $900 a month. She lives there for $50 a month. That's cool. David, what about you? I live through her. Vicariously. The house hack through your sense. Vicariously is all that matters. I was sort of on the other end of house hacking. So I rented a room from someone else until I had maybe eight or nine houses as rentals. And then I bought the house that I live in now. And I rented out rooms just to people that needed them. I wasn't really super serious about it. The problem was parking with that property. It's this big,

2,800 square foot house with four or five bedrooms, but there's nowhere to put the cars for everyone. It's in H-A-A-you-can't park on the street. So that one didn't work out great, but over the years, I've just rented rooms out to people that needed it. And now I wanted to get a deal that I was going to split into several smaller units, but the only way I can make it work is if I lived in it as a primary resident. So because I'm not home that much, I'm just having that house turned into several units and I'll be living in one of them myself and renting out the other ones, and then I'll move out of it and rent it out. So I suppose, I suppose that would be like my first official house hack, which is kind of funny that this deep

into my career, I'm doing it. But the way that I look at it is you, you sort of conform yourself to make real estate work for you. You don't try to force real estate to bend to work for what's convenient for you because that's where you just get frustrated with it all the time. I think Craig made a really good point. The way that I look at investing in real estate at this point in my career is it's more about principles than just like, give me a formula and I want to follow that exact specific formula forever because the market changes too much to have one formula that you can do forever. The principle is that the more work you're willing to do, running out by the room is a little bit more work than just renting out traditionally, the higher

your profit will be. So you can have a spectrum and on one end is comfort on the other end is profit. And the more that you can move yourselves towards profit and away from comfort, the more deals you can make work and the more wealth that you're going to build. So we all have to kind of ask ourselves where on that spectrum we're willing to go. But I do think it's important that you recognize if you're sitting at home saying, I love my primary residence, I just couldn't house hack. Maybe that's why you have about a house in the last four years. Maybe that's why you're not going to build wealth like somebody else who realizes that that comfort is very, very expensive when you look at what real estate can do for you over a 30 year timeframe. Totally. I mean, you have to basically

surrender your comfort for a while, right, so that you can get into whatever dream in the real estate space that you want. When we, we, I'm a very serial like redfin scourer, and I have been my whole life. And anytime I saw a property I couldn't afford or that was like just out of reach. I was always like, how can I make this work? How can I make this work for me? So when my wife and I moved from Kansas City, our house there, I think our mortgage is like $1,100. And we moved to L.A., which is smart, right? We're like, yeah, why don't we just pay four times more for a house out here? That makes a lot of sense. We moved out there and we saw this house that was, I think, at that time, $624,000. So it was easily four times more expensive than our Kansas City house. But

this house had a 279 square foot studio apartment underneath, and I was just getting into Airbnb, and I had calculated, well, I think if I rent this little studio out for 100 to 125 a night, I think I can make like $2,000 or $3,000 a month, and that's exactly what it was. But I always had to convince my wife on that because she's like, I don't want to deal with having to talk to people. I don't ever want to go take them down an extra roll of toilet paper or whatever. And I was like, no, it's cool. give it to me. I like meeting my guess. It's all great. And so that was solid. Like we lived with people from that point on for probably like three or four years after that. And that's really what accelerated our rental portfolio because I really attribute everything I have to house hacking because we were able to save at this point, you know, probably $180 to $200,000 worth of mortgages. We were able to save that up and apply that to different pieces in our portfolio now. So I wouldn't be where I'm at if it weren't. for house hacking. So I'm very grateful for that. And just in case anyone at home doesn't know what that is,

that is renting out a space in your house or a space on the lot of your house and using that rent to subsidize your mortgage. That's all it is. There's so many ways you can house hack. So get creative with it and figure out how you can get out of your mortgage. Because I think the faster you don't pay a mortgage, the faster you can really use that money to snowball into the next thing here. So moving on into the next question here, we have a kind of a specific scenario here. So someone asks, after a few months of having a property under contract and waiting for lawyers entitled to clear everything we are finally ready to close on an investment property. This property is a mixed-use commercial, retail storefront, and two apartments above. The property is occupied with leases in place.

My question is, what would the next step be after we close? Should I send out updated leases with our new landlord information? I know that the old leases that are being used are still binding until they expire. Anybody have any insight on this one? I think. This is right up Ashley's alley. You know what? I am ready for this question, David. So for this one, the first thing I would do before you even close on the property is send out estoppel agreements to the tenants.

So get the current owner's permission to do this. And what they are is basically you're sending them a piece of paper that asks for them to verify the information that's on the lease. And you may find out more information about the property. So have their name, their contact information so that you do have all of that when you're ready to close. Then you're going to ask, you know, who are the residents of the property so that you have everybody that's currently living there. And then you're going to go through, okay, how much do you pay a month? Do you pay any additional fees?

Who pays the utilities? Are there any repairs or maintenance that need to be done in your property? Who handles the landscaping? Who handles the snow plowing? everything like that and just go through it. Do you own the appliances? Do the landlord own the appliances? So as many questions you can think of, you put onto this form, you're going to send it to the tenants or, you know, go and hand it to them and have them send that information back. And then you can go through the lease agreements and kind of compare them. So if there is any, there are any differences, you can go ahead and clarify that before you actually go and close on the property. And then when you do close, that's the time to, you know, make sure they have your information.

to send you the new rents. You're going to maybe send them kind of a welcome letter stating as to here is how everything will work now. So your rent will be paid online electronically through this website. You'll have your own portal. And this is how maintenance requests are handles. And you kind of tell them your systems and processes to handle things once they close on the property and it's switched to the new management.

Yeah. Yeah. They also asked, should we do a walkthrough and talk to all the tenants? So it sounds like we should probably talk to the tenants. What are your thoughts on specifically doing a walkthrough of the tenant space if they're already occupying it? Yeah. So usually I would do that before I even, you know, get to commitment on the property or

get close to closing. That's something I would do. But if you're doing it after closing, you just send them a notice. And usually it will state in the lease agreement that they currently have if you have to give them 48 hours notice, 24 hour notice. And you would just send them a letter stating that you would be. going through the property. They did say they had commercial properties, so those will probably be easier to get into than the residential, where you'll have to kind of coordinate with the tenants.

But you can go through with them, and if you want to ask them what needs to be done into the property or let them know that you're going to be making repairs on the property, and then also taking pictures, because when they go and move out of this property, it will be very easy for them to say, oh, well, this was like this when I moved in. If you don't have any kind of inspection form, signed by the previous landlord and the current tenants that are in place. So that would be another thing, too, is documenting everything and asking them if there were things that, you know, were not taking care of when they moved into the property. Sure. Yeah. By the way, whoever asked this question, I just want you to know, this has been a dream of mine for a long time to own a place sort of on a main

street where there's, you know, a lot of foot traffic and everything like that. The bottom floor is like a coffee shop or some kind of commercial space. And then two apartments above, one that's a, tenant and one that's me, and then have it be like one whole, I don't know, like a like a cash flowing machine that pays for the building. So kudos to you for locking that down. For decades, real estate has been a cornerstone of the world's largest portfolios. But it's also historically been sort of complex, time consuming, and expensive. But imagine if real estate investing was suddenly easy, all the benefits of owning real, tangible assets without the complexity and expense. That's the power of the Fundrise flagship fund. Now you can invest in a

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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. On my next question here, David, I think you probably have some insight here just because you run such a big

team that's doing this every day. This person asks, are in-person rental showings a thing of the past or still valuable? In this post-pandemic world where virtual meetings and showings have become much more standard in everyone's lives, is it possible or is there anyone out there not doing any in-person showings at all? What's that shift been like for your team, Dave? In-person showings for rental properties. I think so, yeah, or like selling homes too. No, people are still seeing homes. That still happens in person. There's not a whole lot of people that are buying stuff side unseen. That's maybe an investor might do something like that. But even then, as we're seeing more and more properties moving into the short-term rental space, it's moving back into where you need to see the house, the floor plan, how it flows. When we were in, the only way that you rented out properties was a long-term rental. They were going to have a lease for 12 months and they were going to collect rent every single month. It was kind of like apartment complexes, but just applied to residents. housing. So the tenants were just going to pay whatever the market rate was for a two bedroom,

one bathroom, or a two, two or something. The floor plan's very rarely ever played a role in the property. But when you're renting at a short-term rental, you're going to be paying more. You have sort of the pick of the litter where you want to go stay. The floor plan does become a lot more important. So I would say I've seen just as many showings as we ever had before. The difference would be people aren't going to look at a house as their first piece of due diligence. There's a lot of work that you can do and then you kind of narrow down the amount of houses they actually go see because there's information available that you can weed some out. Old school, you just had to go look at the house and you're going to learn everything about the house when you were seeing it.

Yeah, I mean, they seem like they have some pretty strong opinions here because effectively what they're asking is, why should we still take them through the unit? This seems like a waste of me and my staff's team. Gas at the time of writing this is crazy high. The type of properties we manage are 50 units in under spaced all over multiple cities. We fill each unit. and don't have a model unit like some large complexes. So I think they just think that because of the technology available, it's not really a necessary thing, but you feel like it is pretty necessary at this time still. You don't know what a house smells like when you're looking at a video?

I can't tell you how many times good realtors can make a house look much better than it really is. Like catfishing is real and real estate investing. It happens all the time. So it's very easy to use. Yeah. Wide angle lenses and show flattering angles. and then you go look at the property and you're like,

what I thought was a dining room is half of a breakfast nook. Like I'm half impressed. They made it look that good and half angry that it's that bad. So if you're smart, you're still going to go look at a property before you sign a 12-month lease. My advice to this person, if you don't want to meet them there, is put a code on the door, put a simply safe camera who sponsors bigger pockets up on the entryway. So you can see who's going in there. Take anything out of the house that they could steal and just let them go in there themselves and go check it out.

and they go back out rather than you drive all the way. I don't think they need you there to go see the unit. They just need to be able to see it. Ashley, what about you? What do you think? For your portfolio, how are you handling showings? Yeah, so, well, I'm using a third-party property management company right now, but I was going to kind of touch on what David said about doing the key padlock.

If you're using property management software, a lot of them actually have this integrated now where you don't even have to talk to a person to do a showing or to, to, like, to do a showing or to lease an apartment. So you put all the information online. Some of the software actually has like AI intelligence that comes, artificial intelligence, that will respond. So you give this robot all the information about the unit. People look at the listing online.

They can send a message to ask a question about the unit. And then the AI will respond to it. If you are going to do in-person showings, you can actually put your schedule online as to when you're available. someone can go ahead and click to sign up for it, sign up for that showing. You get a text message that there's a showing at this time. Or like David said, you go ahead and you put the lockbox code. So to get the actual code, they have to scan their license, a copy of their license,

into the software, and then they will get an access code that's valid for a certain window of time. Maybe it's a half hour window of time. They get to go into the property. And then when they leave, the code changes to something else. So instead of just doing virtual videos, like the property management company I was using, they were doing YouTube videos to do virtual showings. But there's so much technology out there where you can get people into the unit without

ever having to talk to them or without ever having to go and take the time to show them the unit too. Yeah. Awesome. Craig, what about you? Any final words of wisdom here on whether or not the age of showing your homes is over? Yeah, I think what David and Ashley said are pretty on point. One thing I would add is something that we do is we kind of do like an open house approach.

And so, you know, like Ashley, I've got most of all my stuff on property management now. But back when I was, you know, doing the house hacking thing more, more vigilantly, we would just do a nice, David. We would just do a, we would do like an open house, right? And so I would just say, hey, we're going to be showing this house on Tuesdays and Thursdays from 5 to 7 p.m. You know, we'd have someone show up there with their computer. They can go on their, so it really wouldn't be a big waste of their time if no one showed up. And so then you're kind of limited to, okay, I know I'm going to be there two days a week. It promotes some competition if there are people there at the same time.

And I found that you can usually send them applications right on site as well. And it, you know, it's helped us a lot. I love the open house approach if you need to do it in person. Yeah, yeah. I mean, there's no right or wrong here, right, guys. There's just what's right for you. That's what I always say. Moving on to kind of the next question here.

Someone asked, how do you stay informed on your local markets or markets that you invest in? And David, you just put in 15 offers on homes, and I think you just closed on them. So tell us about that. How did you come across these markets? How do you find yourself even locating any of the markets that you're investing right now? Well, this should be an entire podcast episode. I'll see if I can keep this relatively short to give my co-guess here an opportunity to talk. The first thing I look for is where people are moving to.

So my philosophy, everyone has their own. I feel like most investors, especially those that start off, they don't value. value location as much as someone in my position does. So my philosophy is the only thing I cannot change about a house is the location. I can literally change everything else. So rather than saying, all right, where can I get cash flow and just going for what looks to be the strongest cash flowing house they can find and then talking themselves into why they should buy that property, which often leads you into buying in these like D minus areas that everything in your gut is screaming at you, avoid it. But the spreadsheet magic is just so tempting, right? It's like,

like that little hypnotizing thing saying, buy me and you start coming with all these excuses about how you're going to make this deal work. I start with the best areas that I think are going to have the most growth. It's not speculation. It's delayed gratification. I don't really look at where rents are going to be, or I should say, the ROI is going to be incredibly strong in year one. I'm looking at it in years five through 10. Where am I going to see the most growth? And right now, this is areas where Californians and New Yorkers are moving too. They're bringing a lot of money. They're bringing the best jobs. So I looked for areas that have a warm weather because Californians need that. Like someone like me that grew up there, we're not going to go live in

North Dakota. There's just no California that's going to do that. Low or no state income taxes, because right now we're paying 13 and a half. And every year we hear them trying to push another bill forward that's going to bump our state income taxes to 18%. So you throw that on top of almost like 45% federal taxes and you are over 50% of your income is getting. paid in taxes at the high tax brackets. And then right now, I think the trend where we see the most growth happening would be the sort of like conservative minded political environments. I think the last five to 10 years, the liberal minded political environments were crushing it. We saw huge growth in San Francisco and Seattle and Austin, Texas. And now the people that are moving

tend to be the more conservative minded ones and they're the ones bringing money with them. So I'm liking in Tennessee. I'm looking in South Florida. I'm looking in Texas. And then I'm in some of the areas like Idaho, Arizona, Nevada, because I'm just saying that's where I think that the money is going to be going to. The next thing I look for is where is there a constraint of supply? I don't want to go by in an area like Kansas that has so much land that they could just build a million houses and the value is never really going to go up. Part of the reason why Austin and Seattle did so well in San Francisco is there's not really anywhere to build in any of those cities. The supply is constrained. And when the supply is constrained and the demand goes up when people

move there, you're going to get not only rising prices, but rising rents. A lot of people say, don't buy real estate and bet on depreciation. Well, appreciation happens in more ways than just prices going up. Rents go up too, and it's much more profitable when you buy in a place where rents go up significantly and consistently every single year. And then once I'm there, I say, where is the soft spot in this market? So my strategy has been to target the properties that other people are are either afraid of buying or the buyer pool is thin. Think about climbing Mount Everest. When you get to the top, the air is very thin.

There's not as much oxygen. When you're competing with the lion's share of the buyer pool, they all want that same starter house at the really low price point that makes you feel really safe. Even when we're having a correction in the market like we are right now, you don't see that very much in the starter homes because 80% of the buyers are all competing over those properties. So I've stepped into the luxury space and every market has its own luxury space.

Some places a $500,000 home is luxury. Some places a $2 million home is luxury. You have to figure out where that is in the market, but I'm looking for that. And then when I hit all three of those and I get the high day on markets, I'm then looking for properties with terrible marketing, really bad realtors that are selling them. I pay attention to the news and I look to see like when is the fear porn going out and everyone's freaking out. That's when I write the most aggressive offer.

So as odd as it sounds, I always feel like the investors are asking the wrong questions. They're saying, what's the software? that I can use that will do all the work for me and bring me the best deal and all by that one. And I'm looking at it more from a psychological perspective. Where do I find the seller that's having the most fear that just wants to get that property off their hands and they're going to be the most motivated? David, even just with market analysis, since we're kind of covering landlording, not only is it important to kind of study your market, what's going on with purchasing there,

but also what's going on with landlord laws too. and staying on top of that because those can also change just like short-term rental laws and regulations are changing in cities too. So I do have a resource for everyone to find out state-specific landlord laws in your area. So you can go to avail.com forward slash education forward slash laws. And they actually have a breakdown of every single state in showing what the landlord-tenant laws are in that state. And then if you go to your local. local housing authority. So in Buffalo, New York, where I'm from, for example, there is Section 8 and the Section 8 Housing Authority that gives out the vouchers is called Belmont Housing.

And on their website, you can actually sign up for free or low-cost houses to kind of learn about being a landlord. They actually train you because they want the landlords to obviously provide fair and safe housing for the people with the Section 8 vouchers. And then there's also another one called HomeNY.org. And this is another housing authority in Buffalo. And they give out free classes or low-cost classes too to landlords. And they also create books. Every couple years they'll go through and create just like a landlord guide to being a landlord in New York State. So using resources like that to stay on top of the laws. And then also having an attorney. Having an attorney, review your documents. If you have a question, like one of the

biggest controversial issues that I see across the country are therapy dogs. And, you know, do I have to allow a dog because it's a therapy dog? What are the rules for that? So just having an attorney that is real estate specific and knows these laws and regulations can really help you on issues that may be case-by-case basis and not as clear cut too. So what haven't we asked about landlord? Are there any final words here before we kind of start wrapping up? Well, we could talk about the fact that you don't have to do it. People like me don't really landlord for ourselves.

We have proctor managers that handle that. And I like that element just because I don't want to have the tenants saying, hey, you know, landlord slash owner slash neighbor, this thing's broken. Can you come fix it for me? And now you got to say, well, that's kind of on you. And then they're mad at you. and now this is also your neighbor who's upset with you. So I prefer to just have a buffer in between us and let a professional handle it.

And it also, in my opinion, gives me an opportunity to bring a job and wage, a career, into the real estate field for someone that wouldn't have had it. I'd much rather let someone else kind of learn the business doing the work for me. And I can focus on making a better process, a better system, getting more properties, whatever the case may be. I think if someone's trying to decide which way to go, there's no way. wrong answer, but if you are going to self-manage, and that's how I started out, I self-manage, is make sure you take advantage of software, make it easier on yourself, but also make sure you understand fair housing laws and you know what the rules and regulations are, that you

educate yourself on that. And as far as going into using a property management company, just realize it's, it may not be as passive as you think it is. You may still need to act as an asset manager, as in every month when you get the owner reports going through what the charges are, you know, making sure that when your unit is becoming vacant, that they are listing it, that it is getting rented out. So that was a mistake I made when I hired property management. It ended up being the month before COVID started. And I was like, oh my gosh, this is perfect timing. This is great. I feel like a weight is off my shoulder. I have all this free time. I can do whatever. And then a couple months went by. And I was like, whoa, wait a minute. What is going on with

these charges, what's happening with this. And so now every month I have an asset manager who goes through the owner reports. He is the contact person for the property management company. If they have any requests or approvals they need made, and he just makes sure things are getting done. So just make sure you are seeing the whole picture before you decide to either self-manage or to hire a property management company. Right. And scale up accordingly, right? You know, a lot of people try to jump in and they're like, I'm ready to do this, go full time, I want to buy 10 units. I'm like, just do one, do your first one. Make sure you like this. Because what if you don't? Then you have 10 properties. You've got to figure out what to do. And I'm a really big proponent of

self-managing for as long as possible just to learn the business and understand the business. That way when you do delegate it out, you understand if your property is doing a great job or not. Craig, what about you? Any final words before we head into the final question here? Yeah, one thing I kind of want to touch on is a little bit about kind of like what market to choose. and I think a lot of people get held up on, you know, when they're trying to pick a market for, like, their first deal or going out of state. And really, you just got to pick one, right? You're going to find cases for and cases for against every market in the United States. I don't think anyone is perfect and I don't think anyone is horrible.

There's deals in every market. Personally, when I look to find deals outside of where I live, I go to places where I know other people have invested. I know they have a team and I know that I can ask them for like, hey, who do you use for a property manager? Who do you use for a realtor? Who do you use for a contractor? And that just alleviates so much time, stress, and energy from me. I don't even care if it's like the best market or the most appreciating market. But like if I can hit that easy button and get my team just like that, I think that's invaluable.

Yeah. Landlording can drive you crazy. As we can see in your eyes here. If you're on the podcast, be sure to watch this on YouTube so you can get the full visual presentation here. Final question before we head out. Why is education important across the board? I think I kind of touch on this a little bit. with becoming a landlord is just knowing what the laws and regulations are because you can get in

trouble for not being compliant. But I think another part of it is that you can save money by just knowing what you have to do up front. So even like with doing a rehab on a property is knowing what permits to get or what needs to be done can save you a lot of money when the building inspector comes and is like, oh no, you need to have a permit for this. This needs to inspect. And you need to rip out all this plumbing. So being educated and doing your research or having people on your team that know these things will just save you money, but also so you don't get sued. Right, right. And ultimately, I guess what you're saying here is that education, well, A, is a lot less expensive than a lawsuit, but also a lot less expensive than mistakes in general,

right? What about you, Craig? Why do you think education is so important across the board? When you learn anything new or when you're trying to get into anything new, education always comes first, right? Education times action equals results. And so you can keep adding education, adding education, education, but if that action is zero, you're never going to get anything. But also the other way around. If you're all action, all action, and no education, you're not going to get anything. So the first step I always think is education. If you're listening to this podcast and you get one of these, and you know, go to one of these boot camps, your education is going to be there. By the time we're done with the boot camp, you're going to be ready to take action. Then all you got to do is worry about

that second part, which is action and then successful. then fall. Awesome. Well, speaking of education, Ashley, I know that you're hosting a boot camp here. So do you think you could maybe tell us a little bit about it? Sure. Yeah. I've hosted for the past year of real estate rookie boot camp where we actually did a live event and then we did about four virtual sessions where we just went through how to basically get your first deal in 90 days, how to feel comfortable and confident with making offers and what does that process actually look like. And now I'm launching a new one where it is all about landlording. So whether you want to self-manage your property or you just want to know how to be a landlord so you can oversee your property management company,

this boot camp goes through everything you need to know from the day you purchase your property and you're ready to lease it out to, you know, operate, handling the daily operations of doing property management, such as the maintenance, the communication, collecting your rent, everything like that. And Craig, what about you? You're also hosting a boot camp, right? Yeah, so we're hosting the Bigger Pockets house hacking boot camp. And so in this 10 week course, we're basically going to teach you everything. If you knew next to nothing about house hacking, you'll be ready, willing, and able to buy a house hack after these 10 weeks. We're going to go into how to find a house hack, how to analyze them, how to market your listing, how to get tenants,

how to pick an area, how to build your team. Anything you need to know is there. And then, of course, we've got the Q&A for anything that we may have missed. So definitely, you know, definitely come check it out. Hope to see all you guys there. Awesome. Well, if you want to learn more and get signed up for the different boot camps, you can go to biggerpockets.com. slash enroll. And if you go to that URL I just listed, biggerpockets.com slash enrol, you actually get 10% off starting when you enroll in boot camp using the code boot camp 10. Okay. So with that, that concludes the panel. How did I do? How did I do as the moderator, guys? I do okay. Very moderate. I moderately did okay. That's all I, that's all I aimed to do.

You are the okayest. Well, you know what? My sister actually bought me a shirt one time that says world's okayest brother. And I've always, I really embraced that role. So people want to learn more about you, David. Where can people find out about you on the interwebs? You can find me on every social media at David Green 24 and then YouTube at David Green Real Estate. Ashley, what about you? You can find me on the Real Estate Rookie podcast, which I co-host with Tony Robinson. You can find me mostly on Instagram at Wealth From Rentals and then also on the Real Estate Rookie YouTube channel. That's awesome. Craig. What about you? Do you have any, any, any Finstas out there that you want to tell us about? Yes, sir. So yeah, you can find us. You know, we have a podcast called Invest 2Fi. And also I'm on

Instagram. I'm at the FI guy and TikTok and all those good things. So the Fai guy. And Rob, if people want more moderately valuable content, where can they find out about you? Well, you can find my moderately entertaining and comedic videos over on YouTube at Rob Built. You can find me on Instagram at Rob Built as well. And on TikTok, if you want even more moderately comedic stuff, you can find me over at Rob Bill Toe. Just add the O. And if you didn't know, Bigger Pockets has an entire YouTube channel where you can get more content just like this. I just had a video released today with Christian where we're talking about the market, loan products, interest rates, what's working, what's not working, lots of stuff that will help make you money. So after you're done listening to this podcast, go check out the Bigger Pockets YouTube channel and listen to some more.

Ashley, Craig, and you yourself too, Rob. Great job, everybody. This has been a lot of fun. Hopefully we can do more of this in the future. I'll let you guys get out of here. This is David Green for Rob, the moderator. Abasolo. Signing up.

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 executive producer of the show, Dave, Meyer. The show is produced by Ian K. Copywriting 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

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