BiggerPockets Real Estate Podcast - 79: Low Income Landlording and Investing to Make a Difference with Michele and Bruce Fischer

Episode Date: July 17, 2014

Today on the BiggerPockets Podcast we are excited to sit down with a couple who together, intentionally invest where most landlords fear to tread . . . low income housing. Michele and Bruce Fischer��who hail from Longview, Washington, decided to make a difference by landlording in areas that are so low-income, that even Section-8 doesn’t work in their neighborhood. In our conversation we dive into some really important topics regarding how to screen low-income tenants, how to handle (pets like pitt-bulls), what to do when your tenant is late on the rent, working with your spouse, what to do when the reality is your tenant will become homeless if you evict them, how to “tenant-proof” in low-income areas and a lot more! You don’t want to miss this one! In This Show We Cover… Why would you invest in low-income areas in the first place? What to look for when purchasing a low-income property How playing “Monopoly” with no money makes you a better real estate investor Handling late payments The “prostitute tenant” story (Yes, really…) How to practically invest with your spouse Renting to low income tenants with low income pets (including those with dangerous animals.) Michele and Bruce’s #1 source of leads How to “tenant-proof” low-income rentals How to utilize a line of credit for investing in real estate Cash flow vs. appreciation Using Facebook to vet potential tenants And a TON more! Books Mentioned in the Show: See Poverty, be the Difference by Donna M. Beegle Money or Your Life by Vicki Robin and Joe Dominguez Tweetable Topics: “Prostitution does pay the rent well!” (Tweet This!) “Arguing with your spouse is part of the #landlording process!” (Tweet This!) “We invest in real estate in order to make a difference.” (Tweet This!) Connect with Michele and Bruce: Michele’s BiggerPocket Profile Michele’s BiggerPockets Member Blog Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, show 79. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. What's going on, everybody? This is Josh Dorkin. House to the Bigger Pockets podcast here with Brandon Turner.

Why is so quiet, Brandon? I was waiting for you to say like, what's up Brandon or how's it going, Brandon? Or what's new, Brandon? I got nothing. I don't really care. Awkward silence. Well, you know, that's part of the game, man.

Yeah, I guess. I guess. Well, here we are. Another episode of the Bigger Pockets podcast. And today we're actually going to talk to some friends of mine, sort of. I mean, they're local investors from my part of the country. So I'm excited for that.

Yeah. Nice. Are there a necks red as well? No, they are not rednecks like that. They probably own a truck though. Everybody in Washington. Oh, they're really, really great. They're really nice people.

And it's a pretty cool show. We haven't done one like this, a husband-wife team in a long time. Yeah, it's been a while. So, yeah, it's cool. It's been a while. Well, before we get into it, we've got today's quick tip. Today's quick tip is keyword alerts, set them up. if you have not already set up keyword alerts,

these things will help you to keep up to speed on what's happening on the site, make bigger pockets more of a passive activity, so to speak. So when something comes up of interest to you, you'll find out about it, whether it's by email or if you're a prone member, you can get a text message. For example, had you set up the word Seattle, you would have known that we had a bigger pockets meetup in Seattle

a couple weeks ago and you would have been there. But if you don't have that set up, you wouldn't have known and you would have missed out on all that fun time that we had. Nice. Yeah, keyword alerts are important and they're great. Yeah, and I think best use cases are local areas, so towns that you live in or towns nearby,

strategies that you're interested in. We're going to be making some improvements to keyword alerts to allow multiple terms to be used in conjunction for a single alert, and when that's lunch, we'll let everybody know. So you can say like Seattle and rentals, and you won't get alerts for only rentals or only Seattle, you'll get an alert if something comes up, that's using both.

So we're working on it. We're working on it. But yeah, so that's today's quick tip. Make sure you have some keyword alerts set up. All right, let's get into this. Today's show featuring a conversation with Michelle and Bruce Fisher. Michelle and Bruce are buy and hold investors

who hail from Longview, Washington. And as a couple, they got started in real estate. they were enticed by the low-income property, low-priced property, excuse me, after the crash and something triggered in them, and they said, hey, let's see if we can scoop up some great deals. And their ideal was to also do some charity as part of their investment strategy, I believe, at least it is my opinion of that. And so their strategy lets them buy low-income properties, help folks out who, need to be served by good landlords in tough areas, and that's what they do.

It definitely is a niche sort of industry, so I'm kind of a, it's kind of a cool show. I don't think we've done quite one quite like this before, so I think you guys don't like it a lot. Yeah, I mean, they're all about revitalizing communities, revitalizing neighborhoods, and taking care of folks who need a little more taking care of. So, you know, definitely listen up. Even if that's not your strategy, there's certainly some cool tips and things in here. so we encourage you to stay tuned. Here's the thing about traveling.

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your insurance with someone who gets investing at NRE.com slash BP pod. That's NR EIG.com slash BP Pod. With that, why don't we, when we get this started, Michelle Bruce, welcome to the show, guys. Good to have you. Hey, guys. Thanks for having us. Thank you. Yeah. Michelle and Bruce, we first met at a bigger pockets meetup back, what, a year ago maybe, something like that. Yeah, down in Portland. Yeah, down in Portland. So that was awesome. So I'm glad to finally get you on the show. And we talked a lot that night about what you do. But it's been a year and I have a terrible memory. So, you know, we're going to rehash all that again. So why don't we just start a very beginning? I mean, what did you guys do before real estate and how did you get into it? Well, I started life as a mortgage banker way back years ago. And, you know, saw all these rental mortgages that came through and was just really interested it. I took a class, you know, part of my banking credentials, I took a class on real estate. And that one of the teachers told us that she went on and on about how great rentals are as far as making money.

You know, you can put $10,000 in stock and you make 10%, you get $1,000, put $10,000 in rental houses. You get $100,000 house, and you can make, you know, 5%. you got a lot more money. And one of the things she really showed us that just really got me interested in this was she talked about a mobile home park she had. This is trashy mobile home park. And her friends would ask about it, she'd show them her different properties.

And she'd show them this one and they always thought it was, no, they thought it was terrible. Why would you own this? Well, she stopped doing that. And she started showing their financial records. Now all of a sudden her friends are really impressed. Nice.

And so I sat with that for a long time and kind of tried to get Michelle to, be interested in this as well and took her a long time. She just wasn't very, very easily convinced to do something different. And then finally in 2008, as everybody knows, the prices of houses went way down and it was a lot easier to convince her to go into rental housing when houses are $50,000, $60,000 rather than $200,000. Gotcha. Gotcha. So what did he say to you, Michelle? I mean, how did he get you over the hump? What was it? Wasn't it his charming good or was it? It took me 15 years, so it couldn't be too much junk.

Well, I'm in the accounting industry by trade, and he showed me basically what the financials would look like, and that was pretty compelling. So that caused me to want to go start looking at them. And our kids were getting older, and we were getting bored. So you got to try something different, right? Everybody needs a hobby. Yeah. So what was it?

I mean, let's talk about that first. that first investment property. Did you guys decide to look at, you know, the, the rundown mobile home park route or? We really did. Another part of it was I was really involved in affordable housing. I was a commissioner and a housing authority. I work for Habitat for Humanity. I started the Habitat for Manity over in Brandon's area. Oh, nice. I didn't know that. Yeah. That's funny. Maybe you told me that. Like I said, bad memory, but that's okay. It's a habitat. There's not a lot of humanity. Well, there used to be when I was there. Yeah, yeah, yeah.

So we were doing a lot of work in this neighborhood, the poor neighborhood in our town, and I was doing all this work for other organizations, and it kind of got in my heart that maybe I should put my money where my mouth is and focus on, you know, I keep telling everybody the neighborhood's improving. I should actually, you know, put some money down and do it. And Michelle, at the same time, started to spend time over there, and I'll let her tell. Well, it was really because of the rentals that we started spending time there.

So we decided to start looking and we're just driving around the properties and stuff. And they were ugly and beat up. And it was like, you sure you want to buy something here? I was hesitant. But once we got going and I started spending more time in the neighborhood, I really enjoyed the neighborhood. It's so much more vibrant than, you know, people are out living on their porches. They're talking to people. It's just a really active fun neighborhood.

You're talking about like lower income areas, right? I mean, very low income. We got, no, two bedrooms for 350. Oh, wow. Yeah, that is very low income. Okay. So 350 is the month. Yeah.

Oh, wow. That is pretty low. Yeah. So, I mean, that's a challenge for a lot of people. Amy, you know, it's one of the reasons we wanted to have you on the show today is because, you know, a lot of people we talked to, especially, you know, we just had a Brie Schmidt on the podcast. And, you know, she did kind of the opposite end of that in Chicago.

Chicago where she bought, you know, a really higher end like $400,000 houses or, you know, multifamilies and rented those out to high-end tenants. So it's like completely a different world. And so that's kind of why we wanted to compare and contrast to two with you guys. It feels like this is like a Harry Met Sally conversation here too, which is which is kind of fun. Oh, I've never seen Harry met Sally what? You've never seen. Oh, man. Come on, guys. Bruce, Michelle. You guys know what I'm talking about? They don't get movies in Aberdeen. We don't get movies in Aberdeen. My goodness. All right. Never mind. So tell us what, you know, what stood out beyond, you know, you said vibrancy. You said there were folks out and, you know, active, you know, what beyond the, and this

is going to sound wrong because I know it's not guilt. They put your money where your mouth is situation. What, you know, what grabbed you? Money. Money. Really? How so? I mean,

R-O-I or what? We can make a lot of cash on these things. We're doing well on cash and low risk because, I mean, our highest house was $107,000 is for a duplex. Okay. So we don't have a whole lot of money into these things. Gotcha. Yet we're able to get no steady cash flow out of them.

Now, how far are you from Portland? Like, you're close, right? 50 minutes. Yeah, 45, 50 minutes. Okay. So, I mean, just to let, I mean, people know this, Portland is one of the most expensive markets in the U.S. It's very, very spendy there.

Or at least it's, you know, it's spendy. Tucker, we had on the show back early, one of the early ones. I mean, he was flipping houses and, you know, he was flipping a million-dollar house in Portland. So just to reiterate my point that I always like to, if you live in an expensive area like Portland, I'm not saying going, you know, buying their backyard, give them competition. But just the fact is, within an hour of an expensive area, they can go and find, you know, low-income properties that are, you know, affordable to get into. So it's always kind of cool.

So, yeah. So you started buying investment properties in this lower area. What was your very first investment then? What was that like? Well, it was kind of interesting because when we were looking around and going through them, we kind of decided that we didn't need to see inside to make offers. So this was a house that we, it was a four-bedroom house right on the edge of the neighborhood. And it was occupied and we decided to just make an offer.

So we didn't see the inside until we went into inspection. So our first clue probably should have been that when we made a low ball offer and they accepted without Fanner offering. So this was a four-bedroom house for $63,000. What was it listed at? 80,000, a little over 80. Okay. So you offered at 63, they accepted. And you walked in and your eyes fell out of your head.

We walked in with our inspector and I almost started crying. I mean, it was just horrible. There was mold and crayons all over the wall, and the sink was draining. Yeah, there was a leak in the sink, and they just put a big 50-gallon bucket underneath. And I guess it's probably five-gallon, I guess five-gallon bucket underneath. And instead of emptying the bucket, they just let it overflow. So I'm not going to know what it was. No, that's funny.

They're a Hispanic couple that spoke no English. It was very hard to communicate with them. Yeah, the mold was just terrible all through the house. And then there was a sewage underneath the house. So where it came from. Well, that's, I mean, that's a shame. First off, this family is living there in such deplorable conditions. And, you know, I mean, ultimately, probably not advocating for themselves because

potentially they don't know any better. And frankly, the fact that whomever the owner was seemingly didn't care. Right. So that's, I think, from my perspective, I'm guessing you saw that. And besides the shock and horror, was there some like, wow, this is what we're talking about. This is what we need to put a stop to. That's exactly what it was. We probably should have walked away from it in hindsight, but our inspector was pretty excited about it. He was just kind of pumped about it and thought it really had a lot of potential. And we really like the floor plan. And that's kind of what we've learned that some houses just have really unworkable floor. plans and some have really nice ones and this has a really nice it's a very small compact house it's only 1100 square feet for a four bedroom but it's just laid out really nice okay so so let's talk about that for for a quick second what makes a floor plan a workable floor plan you know i mean what my first my first rental property was a property that had a shotgun apartment so it was you know living room is connected

to bedroom bedroom is connected to kitchen to go to the kitchen you had to go to go to the kitchen you had to go through the bedroom, which is, I mean, it's a terrible layout. But what makes for a good layout? It's kind of the same thing for us. It's really bathroom placement as a lot of it. You know, if you have to walk through a bathroom, a bedroom to get into a bathroom, then just not. We found another one that was like that. The only way into the bathrooms was through two bedrooms. And then we found another one where the only way to another bedroom is through one bedroom. So you have to go through someone's bedroom to get to your bedroom and just hallways are important. Yeah.

Gotcha. Or if there's a dining room area that is just kind of wasted space, you know, we like, if what works best for us is an open area where it's a living room and dining room together and they can decide how to furnish it rather than it being sparsed up for them, you know. So that that's another consideration too. Gotcha. That makes sense. Well, so it sounds like you ended up buying this property.

Is that right? We did. Did you offer any lower after you saw the instance? side? Did you try to negotiate lower? We did make them clean the sewage up. Okay. Under the house. Nice. Well, that's good. And they had no problems with that too. Another sign that they were ready to get out. Yeah. Yeah. So how much did it end up costing you guys to get this thing fixed up? Did you end up getting rid of the tenant that we were in there? Or did you kind of hold them in? Fortunately, we did that they had lowered the rent on the tenant, the previous owner because of how bad of the shape was and because they had lost their job. So we had to raise the rent a little bit up to Almost. There's still below markets, but once we raised it, they had to leave.

Wait, wait. So I want to clarify. So the previous owner, this and straight up slumlord, instead of fixing the sink with the five gallon bucket that was dripping down in the mold on the walls, they decided to drop the rent to shush up the tenants. Possibly. I wouldn't go there. But that's what happened. I mean, that is. Now, I do have to say, though, I mean, a lot of my tenants, like, refused to, I mean, they just flat out will not call. Like, I had a tenant one time. I think I told this a while ago on the podcast, but I had a tenant call and say, well, no, they never called. They never called.

Anyway, I was in the parking lot one day doing something, picking something up. And the kid comes down and asks me if I can come up and look at his ceiling because there's some mold. And I went up there and looked at it. And it wasn't like a spot of mold. The entire ceiling was an inch of just green grass, essentially. And, I mean, it was the entire ceiling of the building of the, you know, bedroom and living room because they didn't want us to come into their unit so they just never called to complain about it until it was so bad and it was a roof leak never made mention of it they used

buckets to clean it up it was probably years years of this happening and so uh i mean that's why you should do inspections well that's what i was going to say that's why you need to do yeah that's why we do six months inspections now on our units but before that i mean this was only two years after we bought it we had never been i think i'd been in that unit once maybe when we first bought it when i did the walkthrough but I don't think it was bad then. I don't even think I would have cleaned it if it was. But yeah, it was terrible. I mean, terrible.

And that happens quite often. I mean, we have tenants all the time. They won't call about issues. They'll just live with them forever and ever and ever. Right. That's why I don't want to call them a slum lord because I don't know what happened for real. Yeah. But there are definitely ways.

There are definitely ways you can, you know, by doing inspections. And you can kind of know those things. By doing the periodic inspections and, you know, just making sure things. they're running correctly. I don't know. There's ways I think that can improve that. Yeah. And I think anyone listening, especially the new landlords, need to heed that wisdom and make sure that you've got some kind of plan set up on your properties where you do have these periodic inspections. And it's not necessarily to go in and, you know, try and catch your tenants doing bad things. And, you know, certainly it's helpful. But for this very reason.

Yeah. You know, what we do is we do like smoke alarm checks. And the reason we do, we do water checks and smoke alarm checks, that's what we tell our tenants in that. That way it gets us two things. One, it gets us in every room of the house because there should be a smoke detector in every room, well, every bedroom and then one on each floor in my state. But also in the bathroom and kitchen by doing the water leaks and the water heater

closet. So we get in every area of the room just by doing those two things, water heater checks or water checks and furthermore, that just helps with knowing when there's a water problem. So you can when, because tenants will never, I notice that they never call about a drippy faucet. I've had bathtubs that have just been pretty much full on, just running. And they won't call about it. They just let it run 24-7. And I'll wonder why my water bill was so high.

I was going to say that's a great way to term it. And when we schedule them, we always make sure that they know it's not a housekeeping inspection. Exactly. I mean to look at the house, not. Yeah. And I think, I think one more tip for people, and I'm sure you guys would agree with this, I would think is the more you can let your tenant know that you want to fix their repairs and you want to help them.

I think a lot of tenants get that mentality of, well, if I complain about this water leak, they're going to raise my rent. And I think that's just or they're going to, I have a tenant who texts me once in a while. She sends me a text message. And every time it's, I'm so, so sorry for bugging you, but. And then she'll write the problem with. And she's so afraid of like she's bothering me or I'm going to be angry or what. I don't know what it is.

But I think that that happens quite often with. And so we try to really like reinforce with them, especially the new ones. Like we want to know the second there's a problem because the sooner I can fix a problem, the less money it costs me in the long run. So there's my- And a lot of people want to automate getting their rent payments. But one of the things we like getting them face by face is it's another monthly opportunity to talk to people and see how things are going.

And if there are any issues that they aren't willing to pick up the phone and call us about, but now that we're face-to-face, they might tell us. Yeah, that's interesting. I mean, so I automate my rent payments. I mean, I couldn't go to every single one and pick up rent. I'd do nothing for the first week but that technically. But I do think that is a good idea when you're first starting out. There's nothing wrong with that at all.

I think, I mean, not even just first starting out, but if you've got, you know, I don't know, enough to be able to go around and do it for a couple hours, pick them up. That's great. Just be able to talk to your tenants and find out what's going on. And they're pretty open to talking. Yeah. So let's talk about this property. You guys go in, I think I asked you, but how much did it cost to fix up about?

So we spent $9,600 on it, and part of that was blowing an insulation so that it would be more comfortable. And that's mold. Yeah. Yeah. So did you use the insulation to cover the mold, or did you actually clean the mold? We cleaned the mold, took down a lot of the walls that they've added, repainted, all that stuff. All right. All right.

So you got this place up to speed. Now, what are we renting it for? 825. Okay. So it's a little bit more than one. percent rule. And a little bit better than the 350 that you guys. Yeah, it's a much better. Well, it's a four bedroom. Nice. That's great. How did you buy it? How did you finance it? We had some savings. And this one, we went with a conventional loan. Yeah. Yeah. Okay. Cool.

It was our first one, so it was pretty easy to get. Yeah. Gotcha. And let's talk about the neighborhood. So this was in a kind of a tough neighborhood, it sounds like, yeah? Yeah, but this house is on a quieter block. So it's kind of what I would call the nicer section of the low-income neighborhood. Okay. And are all your properties in the low-income neighborhood? Yes. It's a 40-block area. And as we started expanding, we did look in other areas, but I kind of told Bruce that I really wanted to just focus and have all our properties in that neighborhood.

Gotcha. And are they all really close together, like same block? Or are you just kind of? No, actually the exact opposite. We have one in the corner, yeah, the north corner and one in the south corner. and all throughout. I gotcha. That's cool.

But none of them are more than a couple miles from our house. And that is helpful. When we talk about lower income neighborhoods, what exactly does that mean? For those people listening to don't know what that means. How would you describe it? I mean, are these violent? Are they gangs? I mean, are they just low income?

I mean, what does that mean? Ten years ago, it probably was violence and gangs, but it really has cleaned up a lot. And now it's just poor. It's people that basically they have no income for the most parts. Does that like minimum wage and government assistance type of stuff? Government assistance is a lot of it. I think half of our people probably don't have any job at all. And those that do, it's pretty minimum wage or they're temporary.

It's an area that people with Section 8 vouchers don't want to live in. Oh, really? Explain that. People with Section 8 vouchers can afford to live in a nicer neighborhood. Oh, gotcha. Oh, gotcha. Okay, wow. Okay, okay.

Okay. So our places are below fair market value, the FMV that HUD uses. Gotcha. Okay. So you guys are literally, I mean, the bottom, bottom of the barrel. I mean, not in terms of like garbage houses, but, you know, bottom of the barrel in terms of rents and everything else. Yeah. Yeah. We like to, when people move out of our places, they're usually going homeless.

Wow. We've had one tenant move out and buy a house, but generally they're spiraling to a homelessness living on somebody's couch. situation. Okay. That seems tough. Yeah, I was going to say as a landlord, it appears that you're almost putting yourself in a situation of almost asking, almost, don't get me wrong, but almost asking to have high eviction rates and lots of problems. And we've gotten that. We have never evicted anybody. You give them $100 and they'll leave pretty easily. We get so excited when a tenant stays for one year. I mean, people don't see. stay very long.

Yeah. So why? I mean, beyond being, clearly you guys are good people who are looking to take care of other people. I mean, at least that's how I would see it. And the financial motivations, I understand.

But at some point, you know, if you have so much turnover, there's kind of an equalizer, isn't there? It's a little rough. Part of it is just the economy in this town right now is just really bad. So this is the worst.

Hopefully, this is the worst. ever. I don't want to say that too much, but it should get better. And yeah, it's just a really rough time we're going through it now. And we just got to do what we got to do. Gotcha. So if people are just barely making it by, so if they have any hiccups, then they can't stay there. So, you know, we focus on anything we can do to keep people there longer. What can we do to get people in there faster? What can we do to minimize the turnover cost? But we know we're going to deal with the turnover. And we have very few vacant days. When someone leaves, we get someone

in pretty dang quick. So what does that mean? I mean, it sounds to me like you're not just slapping up a sign. It sounds like you guys are, and I forget, we did a, we did a podcast on low income. I'm totally blanking out who it was. Lisa Phillips? No, it wasn't Lisa. But it seems like you're a lot more involved in the community. You're a lot more involved in. Al Williams. It was Al. Yeah, that's the one he talked about that. It sounds like there's a lot going on. You guys are really proactive. So what are you doing? How do you minimize turnover time? What are your tactics and techniques for, you know, even, you know, hey, somebody's just having a hard time paying. What do you guys do? I'd love to hear more about that. So for minimizing the turnover, you know, as soon as we know that we're going to have someone move out, we put it up on Craigslist. And we can't put up a for rent sign in the neighborhood until they move out because once a for rent sign is up, the mailman.

will no longer deliver mail in that neighborhood, which is really weird. Is that a legal thing or is that a just... That's what the mailmen tell us. Weird. Yeah. Wait, once there's a forensic sign, they won't... Because of vacancy issues. Oh, interesting.

So they don't want to deliver mail to an address they think might be vacant. Right. Thinking somebody's... That's not the mail. I don't know. Yeah. Yeah. Oh, weird.

Yeah. And lots of... If it's a duplex, we'll let the person... person next door know that it's coming open and ask him if they have any friends that they want to apply. So we just try to work things from all the angles. And once it goes on Craigslist, we get a lot of phone calls and a lot of people who want to see it. And if it's vacant, we're accommodating and we'll drop in everything and go show it to them. So what do you look for then when you're when you get a tenant to come look at it? Obviously these properties aren't attracting

the, you know, the mortgage bankers of the world. So how do you, I mean, what are you looking for in a tenant? How do you screen somebody? Yeah, it's screening, but also, yeah, not necessarily like just the credit report, but like, yeah, how do you do the whole process? What are you looking for? So we try to talk to them as much as we can about what they're looking for in a place and why they're moving and that type of stuff when they're looking through. But we really need them to fill out the application. And it is a pretty involved application. And we don't get a lot of applications back.

I don't know if it's just too intimidating or if they decide that if we really, really are going to check all this stuff, never mind if they're looking for a less involved landlord. But so once we get that application back, we try to verify and look at as much stuff as we can before we have to spend any money to screen. And I kind of have a point system where they get and lose points for certain things. So we're looking for someone who has job stability that they've had the income source for a year or more. We don't throw them out if they have less than that, but they're going to lose points for that. And we look at their where they've lived in for how long.

If someone is consistently moving every six months and always had, that's not a desirable attribute that we're looking for. And criminal-wise, we see a lot of criminal activities. So it's kind of gauging how many and what type. And so we just kind of go through our process and we look them up on Facebook, see what we can find out, see if because it is a smaller community, see if we know anybody who knows them.

and just work it as much as we can. And then if we think that it'll be a good fit, we go ahead and do the credit check. And that gives us a lot of information about, we know they have terrible credit. Most of them don't even have bank accounts, but it gives us the address history and more criminal information and that kind of stuff.

So what we've had, a really good niche that we have that we really like is people just starting out that don't have any rental history yet, especially if their parents or someone is willing to sign for them. That's usually people with no rental history, we can influence them more, you know, saying, you know, you're letting them know in educating them rather than someone who's had a really bad rental history because it's probably not going to change. Yep.

Yep. That makes sense. And I just wanted to point out one thing you mentioned was checking Facebook. I don't know how many landlords do that, but I know we do that for a lot of our tenants. You can learn a lot of stuff. Just like people have an open Facebook, which most people do. you can learn a lot of stuff about people. I mean, I figured out people have pets or people have kids that they didn't say they had.

I mean, like, you can learn a lot of things that, yeah, that they know. It's a lot easier in a small town where you're bound to know somebody that knows somebody. Yeah, yeah, it's very, yeah. I mean, I've had tenants who say like, I mean, like, I look on their thing and they'll be complaining all about how much they hate their landlord because they're kicking them out of their house. And then I go on there. I'm like, oh, okay, they're being evicted. I'm like, you know, they write crazy things. and they can tell if they're a party year or what, I mean, you can tell a lot from Facebook.

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because the properties don't cost a lot of money. But to me, risk is high turnover, you know, hire folks who have more criminal activity, that kind of stuff. And so I can see this kind of landlording as not the sit back and relax kind of landlording. This is absolutely a more active type of landlord. In fact, I wonder, I know you guys self-managed, correct?

Correct. So, I mean, I know when I was looking with my low-ank, I had a very hard time finding property managers who would manage, and I'm going to guess that there's probably even less who would tackle a low, low, low income properties. Is that, is that right? There are some, there's probably four property manager companies who are active in that neighborhood. But I've noticed that their places sit empty a lot longer than ours do. I think I found that like, I mean, I haven't used a property manager really, but from what I've seen that property managers around my area too, they don't fill the units anywhere

close to as fast as we do, just because they don't have that incentive, which I mean, that's the tradeoff, right? Like, if I'm getting 99% occupancy, if I give it to a property manager, I'm going to get 90%, but I don't know if they deal with it. So, I mean, I know some people will trade one for another. So I guess it just comes down to what your strategy is. But I know when I started out, go ahead. I was going to say the flip side of that is maybe they're doing more stringent tenant screening

and having better results on that end, too. And I would actually encourage you, not that I know any better, but I think, because I don't, to talk to those guys. I'd be really curious if I were in your shoes to have the conversations with those property management companies and find out how long people are staying in the property. And if their turnover is higher or lower, maybe they'll have a vacancy for a month or two, but they might. have tenants that last a year and a half two years. So is there kind of a balance? I don't know. Right. And I have that data. I haven't mind it yet. But since we started every single week, I've taken the information off a Craigslist of what the addresses are, what they're renting for and the attributes of the property. So I've got a huge database now. Interesting. Everything. Yeah. It's her hobby on Thursdays.

Well, okay. So I want to hear more about this. You go and you find out every unit that's available, what goes up for rent in the area. So you've got this treasure trove of information, which unfortunately you haven't yet dug into on Thursday. So we're going to have to set you for Fridays to start picking it. I mean, what was your, clearly you were collecting it with an end goal. So what's, what was the end goal? What did you want to find out? My main end goal was to be able to get it accurate market rent so that when we have a place coming up, we can look at similar properties nearby and know we should be charging for market rent. I realized as I started getting more and more data that I could use it, one, to figure out which

properties are tenant occupied and contact the landlords if I want, figure out how long they're staying as the addresses start popping up. There's some that pop up so often that I know that those are really problem properties, but I haven't really taken the time to really dig everything I can out of that information. And we do choose to take some of the harder tenants that others won't take. We have the extra time right now, as long as we have the extra time. and the willingness to do it, you know, we do take some tennis that are much riskier than, you know, others would. Yeah.

It's a trade-off. I mean, when we have less time, we'll stop doing that trade-off. But for now, it works for us and hopefully for the community. No, that's great. That's great. Well, listen, I mean, I will straight up admit I'm not the guy. I am not the guy to go in there and buy those properties and hold hands. I mean, I've been there and it was a terrible experience for me.

and I'm not willing to do it. That said, I'm glad that there are people who are willing to do it because if not, you know, where are these folks going to go? And at the same time, we're not doing out of the goodness of our hearts. I mean, we're making the eye on this. Of course, of course. Yeah, you better be. Well, it is easy to get burned.

Sorry, Brandon. No, go ahead. It is easy to get burned out, though. I know there was one year that we just had a lot of turnover and several, two or three of our units were empty at the same time. And this year, so far, every other month, we've had turnover, which is a little bit more than we normally have. So, you know, it is easy to get burned out. Yeah. Yeah. My wife and I tend to like, well, we started out, we did a lot more, a little bit more, you know, hands on, a little bit lower

income. And as we've gotten more and more properties, we've been slowly getting better and better properties looking for that tradeoff of we're not making quite as much cashful on the better ones. But in the long run, I think they'll pay off better, I think. I mean, it's all, I mean, this is like real estate is so multi-dimensional that it's hard to, you know, it's not just left and right and if you do this, then this will happen. But you talked about the cash flow. I mean, you're doing this for the finances, not just out of the goodness of your heart. So why don't we jump to that a little bit? Do you mind me asking, like, I mean, how many units have you guys gotten so far? So we have eight doors. We have five properties. Three of them are duplexes.

Okay. And what do you look for when you're shopping for an investment property? Like, well, I mean, do you have a minimum cash flow per unit you're going to expect or do you just look for the cheapest property and offer on it? Well, we're targeting at least $100, door cash flow and targeting a 10 cap. And then we had some other factors that we kind of look at. But basically, when we were shopping, we would put all the numbers together on what we looked at that day and maybe pick the best from that day.

We don't window shop very much. So when we decided we were going to jump in, we jumped in really quick. And a lot of our places were places that we thought we could make a difference. Now, places that were already fixed up and ready to turnkey, rentals we weren't all that interested in. Yeah. Right.

We were looking for the ugly properties that we could do something with. Do you feel like you're building equity in those properties that you're, you know, buying the ugly ones that you want to do some work on? Do you feel like you're building equity into that? Not really, but I feel like they're easier to rent. Okay. Because they're a little bit nicer. Because you fix them up.

Because you're a little bit more excited about them. Yep. Yeah. I found the same thing. We shouldn't be selling them for losses, but the equity is not. the prices aren't going up very fast in this area. Yep. It's not an appreciation play.

Well, I don't think low-income housing is ever an appreciation play. I think it's more of the cash flow. Yeah. And that's okay. I mean, like, again, different places in people's life have different strategies, right? You start out, I mean, I think it's really good to start out as a cash flow investor. I mean, like, it's really, like what you guys are doing, I think is excellent.

Starting out that way because, one, you're gaining a ton of experience, making a bunch of money and, you know, helping the neighborhood as well. And then as you, you know, 10 years from now, I'm guessing you guys will be in a much different place, just like I was 10 years ago. And yeah, so I think it's awesome what you're doing. Again, it's not for everyone like Josh said. I think some people's personalities just clash with that. I mean, my personality clashes with it now. But I love that you guys are doing it.

We play a lot of good cop, bad cop, or I go in there and talk to all the tenants. I'm their friend. And then, oh, I got a call for my wife. I can't do this for you. That's funny. Nice. Nice. Well, I mean, how do you guys find your properties? Are you guys finding them on the MLS? Is that mostly what it is? Yeah, on the MLS with an agent. Yeah, we have an agent who tells us properties that are coming up and he keeps us pretty informed. And then, I guess, like we said, we're in the neighborhood all the time. So we do see them too. Gotcha. And then on financing, I know the first was conventional. How have you been funding the rest of the properties?

So three of them are finance conventional. We got a second mortgage line of credit on our primary residence, which is a great way to go because that can be our safety net. When money's rolling good, we'd pay it off and when we need, we can pull it out. So it's great to have that flexibility. And then we have a family loan too. Okay. So you're kind of a mixture of both conventional and some creative methods. Right.

Cool. Because what we didn't realize when we started buying it, we were making cash offers is very early in the process. They require you to show that you really have the cash. And it's like, well, you know, I'll have it by the time we close. But, you know, so that piece was kind of hard to work through the timing of that. And the line of credit helps a little bit with that too. Yeah. I'm a big fan of that. Yeah, I hate having cash just sitting in my checking account. I know. I know. Cash sitting in your checking account is never like, it always just feels wrong until you need to go get a refinance. And then they're like, oh, you need to have

six months of reserves for every single unit you have. And then I'm like, dang it. So like, cash is not fun to have. So like every time I get it, I want to buy something new until I try to go get a refinance. And then it's really, really tough to get refinances when you don't have that. But we basically use our line of credit as a savings account. And as any extra money goes on our line of credit. Yep. Makes sense. Gotcha. Gotcha. And I'm very different. If I don't have some cash, like, you know, sitting there, I'm freaking out. I'm like, oh, my God. What if, what if, what if, What if? What if? And I'll tell you this, Josh. I may have said this on a very early podcast, but I used to play Monopoly with a friend of mine every single day of high school. I mean, of a summer break, we played it every day. I played at least 100 games. I know. Every day we played a game Monopoly. He was a math league. Yeah, I was captain of the math league. Woohoo. So we played every day and we were like hardcore about it. We could finish a game in easily under an hour. But my quickest game was like 12 minutes, I think. But we were so like obsessed with Monopoly. Anyway, so what the strategy I learned during that time was that my goal in that game is to never own more than $100 like in my possession, right?

So I always get rid of my money no matter how fast I can. I will buy, sell, trade, buy anything, whatever. I just get rid of everything. And I don't want more than $100. What that does is it forces me to play creatively. And I've only lost once in the past 10 years. And that was my wife, who is a better investor than I am. So in 10 years, I mean, I'm not telling everyone they should go and give away all their money in order to be a good investor.

But there is a principle there that I run my own life by. You know, like when you have a lot of money, I think you're less creative. And I don't know, maybe you don't hustle as hard to make the investment happen or whatever. So I don't know. Again, I'm not telling everyone to go and spend all their money and have no backup. But there is something to say about that. I don't disagree with you. I mean, I think that that's one of the things that people find most fascinating about you, Brandon, is the creativity. No, I mean, the creativity. I think that's what you're,

you know, you're fairly well known for. And so I think that's, that's awesome. But we're not here to talk about you. So let's stop talking about monopoly. Your monopoly. Yeah. All right. So, Michelle, Bruce, if you guys were to do anything differently, what would it be? I mean, is there anything that you regret thus far in terms of your strategy? Well, there's two of the properties we have that I would not have bought if I know what I knew now. But, um, So I think the strategy is good. It's just maybe focusing in the nicer part of the low-income area instead of doing it scattered all over and maybe trying to get isolated. We did try to get more like on the same block or next to each other.

But that was just really hard to do. Yeah. I think for me it would have been getting together with Michelle beforehand and having the same strategy. We don't always have to see eye to eye on everything. And it would have been nice to have agreement before we started this rather than at the last minute have to decide on something. Yeah. Yep. Well, hey, well, speaking to that, why don't we move to that a little bit and talk about investing with your and working in a business with your spouse?

Because, I mean, most people listening to this podcast are probably married. And a lot of them, you know, you're involved with your spouse in the process. So how do you guys do that? How do you avoid arguing? How do you avoid? By the way, to anybody listening, Michelle has her hands wrapped around Bruce's neck right. So, yeah, I just, you know. Well, we have no idea how to avoid arguing, so we could not even begin to answer.

That's part of the process. It is part of the process. That's true. So, I mean, how do you guys do it? How do you run a successful real estate company together? Well, part of it is dividing, you know, who focuses on what. I do all the paperwork, and he does most of the dealing with the tenants. And, you know, just dividing, he does most of the rehab.

I do most of the cleaning, you know, dividing. dividing it up and knowing what roles we have, which doesn't mean we can't help each other, but that's kind of what the area that we're controlling. A procedure manual, Bruce doesn't like to follow it, but at least having it written down what we think we might want to do in certain situations.

She just called you out in front of like 50,000 people. I think everybody that knows me knows I don't follow the procedure manual. I have no idea even where it is right now. I couldn't tell you. All right. So you guys get along fine, Bruce ignores Michelle and everything works out. In the end, it comes down to trust.

We trust each other. We don't always agree, but we trust. And at the end of the night, we wake up happy. And we're going to figure things out together. I mean, even if one of us caused the problem, we're still going to work together to get ourselves out of it. I think fundamentally, you know, this is, you know, this show has become the marriage show.

But, no, I mean, I think fundamentally, if you have that attitude, that's the attitude that we'll keep a marriage together. It's the same attitude that'll keep a partnership together, right? I mean, you're going to fight. You have to expect it. And you don't, you know, the first time there's trouble, you don't stop and run away. And you realize you may have different opinions, but the key is, can you get on point? And I think Brandon had mentioned, I don't remember if this was on the previous show or in a conversation with me.

He had talked to me about some folks who come to him and say, hey, you know, what do I do? my wife really, really doesn't want to get into real estate. What should we do? You know, the answer was, was plainly, don't do it. Find another way to make money. You know, because if you guys are completely polar opposite, it's not going to work. Yeah. Or be like we didn't just be patient and eventually she comes around. Yeah. Yep. I think that's great. I mean, I think another aspect of that is there has to be a heavy dose of a, I don't know if you call it a grace or forgiveness or whatever with the other person. Like I've screwed up so many times and cost us a lot of money that like my wife has to, I mean, she's had to, you know, it's not like I destroyed our life, but like I made

a lot of mistakes and made her work a lot of hours that she would not want to work. And, you know, she forgives me for those things. And I'm sure, you know, if she ever screws, you know, something up on me, I mean, I'll have to just forgive. And that's part of life, right? You make mistakes. You make problems. And you just get through it. And so both parties have to be okay with that. Like you said, no matter whose problem it is, you're going to get through it together. And we also, no, we focused on it. No, she didn't say yes to every house, but no, buying all kinds of rental. She said certain kinds. So we agreed on a certain kind of rental, you know, we had a compromise. No, I don't get to do what I want to do. She didn't get to do what she wants to do,

but we have an agreement of what we're both comfortable with. Yeah, that makes sense. And I think that's, again, you know, whether it's a spouse or it's just a straight partner, you know, not straight partner, but whether it's a partner, a straight partner, it doesn't matter, it doesn't matter what kind of partner it is. into that one. Yeah, there you go. Yeah, it's pretty the same issue. It's just a lot harder when you're married.

Yeah. Well, yeah, well, because now you have to live with them afterwards. Exactly. Exactly. Right on. Well, so, you know, we're starting to get to the end here. I know that when I was buying difficult properties, let's just put it that way, there were always fun and exciting stories.

There was always something crazy happening. You guys have to have some stories that at the time you wanted to throw. your, you know, throw a brick through a window, but now you're laughing about. So let's share them. Well, earlier this year, we had a tenant disappear on us. Just he paid rent and then right after that disappeared. So we had an interesting little chase around town trying to find the poor guy. And he had other people living in his house. And they had no idea where he was either.

So he was in jail? No, he just actually, we still don't know where he is. We got a call from the electricity company saying the power was turned off on one of our units. We went over there because he had just paid rent like two days ago, went over there and there were people living there. We talked to them and eventually we got them out. But yeah, and they said they kept telling us they knew where he was, but they clearly didn't. Fascinating. I heard a rumor that there was some kind of barter for rent from one of your tenants. was having to do with prostitutes?

She never offered. Never offered to brew. We were moving in a new tenant and we were talking about the unit and stuff and he said, I'm really familiar with this place. The person who used to live here was a prostitute. And it's like, oh. I just thought she was just really trampy because every time I went there, she was taken under a robe with a new guy.

And I was there a lot because she paid, she had issues with rent, paying rent on time. and yeah, every time I was there, there was someone new. Wow, yeah. Now I know why that. She wasn't very good. She had to move because she couldn't pay her rent, so she wasn't all that good. Wow. I haven't dealt with that yet, but that's funny.

What about animals? Do you guys take them? I mean, what are your thoughts on low-income tenants with pets? Because we talked about that with Bree with the higher-end tenants, and she does take them because she assumes like higher on people. It's kind of a niche for her. So what are your thoughts on accepting dogs or cats? We have two properties that are duplexes that we don't allow them just because of the way the

property is set up. We don't think it's a good fit. But on the other properties, we do allow them, but we do charge $25 extra per month per pet and a higher deposit too. So that kind of helps us get excited about having pets. It's like, well, at least we're going to get more money from it. Yeah. But dogs only, no cats.

no lizards, no fish. Yeah. Why no cats? It's a good idea at discriminating against cats. It's not a good idea. We love cats. I was going to... Under some of our units, so...

Nice. I was going to ask on pit bulls. How about the, quote, dangerous breeds? No dangerous breeds. Yeah, and a lot of people have pit bulls. We get so many calls asking. That's kind of a low-income trait we've noticed. I know.

I never understood that, but it is, isn't it? Like, every low-income person that applies to the pit bull. It's just that. What place and they want a pit bull. Well, it's a status. Part of it is protection. I think it's, you know, having a pit bull, you kind of know that, you know, if you're going to go in and rob them or whatever, there's a safety net for them. So, yeah, I think that's one of the big, at least in my discussions back in the day.

That was kind of the reasoning behind it. Okay, 25 bucks a month extra and then increased security. How about tenant proofing your property? We did a show with Darren Sager, and Darren talked about tenant-proofing his properties. He put better floors, better paint, that kind of stuff to prevent it. I know what I found was there's no way to tenant-proof low-income properties. Are you guys finding the same thing? That's been a really tough part for us because we started off putting nice things in,

putting in sealing fans, putting in nicer lights and vanities. And every time we put in a new tenant, our units get worse and worse as far as less functional stuff, less nice stuff, because you just got to have the minimum stuff. It's going to get damaged. It's going to get broken. You got to just do what you got to do. God, it just kills me. I mean, you know, 2014, you would think people had some responsibility to take care of stuff. I just like, I don't know who literally wants to live in a crappy property. I think people want to live in a good property. But you know, you wonder why landlords are putting together properties that are really just bottom of the barrel. I mean, enough to live on, but you have to because otherwise, I mean, folks just destroy it.

I had cigarette burns. I mean, this was, you know, even when you don't allow it, cigarette burns everywhere, garbage piled up. I mean, I've dealt with everything. And it's just there's nothing you can do. Yeah, it's tough. Yeah. We've started putting laminate in the bedrooms rather than carpet because we're just having to replace the carpet so often, usually because of pets.

Yep. Yeah. Wow. We had a tenant. We moved in, we replaced carpet. I think it was January of this year in a unit. It was a little one bit of apartment. We replaced it in January.

The guy moved in February. And then he didn't pay in March. We ended up like, you know, calling him a ton of times. Wouldn't answer. Wouldn't answer. Gave him three day notice. He had to serve it on his door. Anyway, so then I went over there and knocked on his door a bunch.

And I was like, well, I'm going to go file eviction for him, you know, tomorrow. But I put a note on his door. It says, I will, he just basically said, please call us. If you call us, we'll give you 300 bucks. to leave tomorrow. But then on his door, he never called. So the next day I went to town to go file the eviction, and I swung by there, and the letter was still on the door.

So I turned the doorknob, and it opened, and he was gone, which was awesome. That was, like, the best way it could end. But where I was going with that is the carpet, I mean, it's three months old, and he wasn't even there for, like, a month of it, was completely a shot. I mean, just completely shot.

Trash gum, cigarettes. I don't know what it was like, he was changing motor oil in its room or, like, in the place. That's what it looked like. And like, it makes no sense. We were naive when we started. We thought, oh, you know, if we fix it up and make it nice, people take care of it. And we've just learned that that's not the case.

So, yeah, I think there's ways, like you said, the laminate, things like that can help a lot. I like to do tile whenever possible. It's harder in the northwest where we are, obviously, you know, the tile's not that common. But, you know, I like doing it because it's mostly indestructible. Things like. It's the mostly that bothers us. The what? The mostly that concerns us.

Yeah. Yeah. Our tenants are very handy at destroying things. Yes. Yep. I know. Yeah. One bad tenant and you can really damage a lot. Yep. It always surprises me just how quickly you can, a unit can go downhill. Do you guys adjust for that with higher security deposits on these properties? I mean, or you really can't, right? It's just what the market can bear. And security deposits aren't even one month's rent in this area because people can't come up with it. Wow. Wow. So let's quickly get to that. And then we're going to turn to the fire round here. What's your average repair on a turnover?

What does it cost you to kind of turn a unit around? So I usually budget 7% of rent, and that's kind of what our trend has been. This year has been a worst year. We're at 15%. I don't have a dollar per. I know that... Well, it's more than like 40, well, so 800 on the property, that's like an $800 property. You're talking about 100 bucks?

It's usually either almost nothing or $1,000 or $2,000. I mean, that's what basically what it is. streams. Oh, okay. We have a lot of people that move out just and find no problems at all. And then some people that destroy. Yeah. And on those, you guys really eat it up, huh? And it takes a little bit to make that back. And no, we don't really eat it up. Unfortunately, that's another part that bothers me is we don't eat it up. The tenants do. I mean, the rents cover all this damage that they do. And, you know, they're, they're paying the security, the security deposit. Well, just the higher rent. And we could charge a lot of lower rents if we didn't have to

pay all this stuff. Yeah. The fact that we can pay all this damage and still make money means that these low-income people are paying to get new carpet every year, new windows, all that kind of stuff. So back to the financials, we plan and buy on $100 a door,

but we're trending at $170 a door. In cash flow, you mean? Yeah. Okay. Yeah. That's great. I mean,

that's great. So cool. Final question before we go to the fire round, what do you envision for yourself for the future? Where do you guys see yourself in the next five, 10, 20 years? We're not sure. We're kind of in a holding pattern right now because we're kind of trying to figure that out.

Our whole life has changed. Our kids are graduating in the next two years. We'll have two kids graduating high school. Nice. Anti-nusters. Yeah, so everything's going to be changing in the next five years. So who knows. Nice.

And that's okay. That's okay. So cool. Well, why don't we move on? I think it's time for the fire round. It's time for the fire round. The fire round. All right, these questions all come straight from the Bigger Pockets forums.

We're going to throw them at you. Number one, your tenant consistently pays late rent, but it's consistent all the same. What do you do about that? We argue. Stop arguing you, too. I'm more forgiving, Michelle's not so much. I mean, if they're making progress payments and communicating, then we're going to work with them. I prefer to get late fees.

Bruce prefers to waive late fees. So we're always having that constant battle. But we will work with tenants, especially if they've kind of paid at like by the 15th of the month, if they paid half the rent and, you know, or kind of making consistent payments rather than not paying anything for a month and a half. Come on, Bruce. You got to charge of late fees, man. Come on.

I know. It's just tough to charge them, no, 30 bucks when, you know, they get $1,000 a month total income. That $30 is huge on them. Yeah. Yeah. You're a good man. Let's say it that way. I mean, 30 bucks doesn't mean a whole lot to me, but it means a lot to that.

It's really tough to do. But Michelle is absolutely right. You do have to charge late fees, and we have done a lot more now than we used to. Yeah. Yeah. I mean, I think a big part of landlord. And again, it's a challenge. I can't speak to it because I'm not there in your shoes.

But, you know, it's a challenge balancing. the, we're trying to make money, but we're also trying to run almost a, it's kind of, it's charitable. I mean, I call what you do charitable landlording. I don't think the average landlord looks at the business the same way you guys do. I really do think that you guys are doing kind of a combination of charity, giving back to the neighborhood, and landlording running a business. Because if it were just running a business, they're getting those late fees and not even thinking twice about it. Right. Right. Right. So, yeah, I think your strategy is, it's unique in many ways. And I think for some folks, I think it's, you know, I think a lot of people would find it appealing. And I think others might say, well, you guys are crazy. And that's fine, right? I mean, a lot of people think we're crazy. Yeah. I mean, definitely what it is. Yeah. That's all good. All right. So my question, fire around is if you're, if you're getting property off the MLS, what exactly are you guys looking for? Extended days on the market.

short sales. What are the properties of the property that make it stand out to you as a deal, right? Well, being on the market a long time is desirable, but lots of times there'll be something new on the market and we can make that work just as well. So it's really running it through the financials and seeing which ones have the most compelling financials. So it's compelling financials and workable foreplan is really what drives our decisions. Okay. Right on. Cool. All right, What is the single best method that you guys find to market the tenants, especially in low-income areas where maybe they're not computer savvy? Actually, we do almost exclusively Craigslist. Okay.

So even in low-income areas that works. Yeah. Like we said before, we can't use four rent signs in our windows. Because that would be the best if we could. Yeah. And we really do fill them almost immediately after they are vacant. So where are these folks? I mean, are they using smartphones or do they have computers or are they just like going to?

in the library or something? A little bit about smartphones and library. Okay. Yep. We actually find the majority of our tenants now from Craigslist as well. Cool. And it's free. And it's hard to be.

Yep. There you go. Right on. All right. Well, what would you do if a tenant says they want to pay weekly to help them budget out? Is that something you guys would consider? Absolutely. I'd want to try to get a little bit more rent money to cover A, R risk and be more time, more

time. One concern with that is lots of time, you know, because of the way my job works, we have to be in town the first two weeks of the month anyway, and that's when usually our tenant issues and collecting rent is going on. So being gone later in the month, you know, we'd probably have to set up something with them so that we could have the flexibility to be gone. We don't let our tenants know when we're gone. So we try to make it seamless to them, and that would be difficult that way. Gotcha. That makes sense. I have a question. This wasn't a fire around question, but I'm just curious. Do you let your tenants know where you live? Yes. Many, of them bring the rent to our house. Okay. Are you worried at all about, you know, safety or anything

like that because of doing that? Somebody asked that in the forum actually a few days ago. Our house got broken into shortly after we started doing this. And my first thought was that that's what had happened. But it wasn't. No. I get more nervous about after someone moves out if they're upset coming back and doing something. That's my only concern, especially with the teenagers and stuff in our house. We actually have, I don't know, our kids go to school with some of these kids. Interesting. Yeah. So, no, they know us.

Yep, that makes sense. Yep, for sure, for sure. All right, cool. Well, hey, what do we wrap this up with the Famous for? All right, here's the quiz. You ready? Mm-hmm. All right. You want to start it? Yeah, why don't I start it? All right, guys. What is your Michelle and Bruce? And if they're separate, that's fine.

Favorite real estate book? Okay, so we're going to stretch a little bit here. I guess the first thing I'd say is that every real estate book I've read and I've been reading more this year, I get something out of it. I always get at least some tidbits of something that I can do differently. But especially when I was new and starting out, I always felt like they did not go into enough detail. And it was always really frustrating because it wasn't stuff that I could really use. So what we wanted to say, there's a book, it's kind of along the lines of Section 8 Bible, which was a great book. for us, but it's a book called See Poverty Be the Difference by Donna Beagle.

And the author was in poverty and she got out and she wrote this book kind of sharing about what it's like in poverty and some ideas on how to get out and stuff. So it was really good for us to kind of start to understand the mentality because when we first started, it's like I had so many questions about, you know, why do people do this? Why? How can you function without a bank account? How can you make it work when you only have this much income? You know, there were just so many questions, and this helps kind of talk about some of that stuff and just good insight on how and why people are in poverty.

It's a lot about how people in generational poverty are just different, not bad. Yeah, a lot of people just because they're different than you, because they have different cleaning standards, because they're not as willing to go to this volunteer at the schools, people assume they're just bad people. But in reality, it's just they have different ways of doing things. Yeah. Gotcha. And that is a hard part, I think, for, I mean, I know I struggle with that. And a lot of landlords do is, you know, we tend to look down on people when they, you know, maybe have lower income. And I try not to, you know, but it's hard not to because I'm like, well, why aren't they just, why don't they just pay their bills on time and work on their credit report? I mean, come on people. Get a mortgage. You know, I want to like, yeah, and it is true. I mean, it is different. It's a different way of thinking and who says my way is right. I don't know. Yeah, I think one of the toughest things for Michelle is to see how they decorate. And she just goes into these houses. These are my houses. And they, and they, look so horrible, but they just love it. I mean, it's, it's, no, it's what they're like. And who cares what we like. We had one tenant who was moving out, even though they're not allowed

to paint. We tell them they're not allowed to paint, but her parting gift to us was to paint her whole place mint green. The ceilings, absolutely everything. And we're like, oh my gosh. And we paid in some of the walls just to break it up a little bit in the ceilings, but we left a lot of it mint green. Huge selling point. People love it. Wow. No kidding. That's funny. I mean, I would have been happy if it came with a gallon of mint chocolate chip ice cream, but mint green, oh my goodness. Wow, crazy. Yeah, just because we don't like it.

It doesn't mean everyone's going to not like it. Yeah, there you go. Okay, cool. What about your favorite, any business books that stand out for you guys? Yeah, this is another little bit of a stretch because it's more about personal finances. But Money or Your Life by Vicki Robin and Joe Dominguez really changed our life. life in our outlook. We read it probably in the mid-90s and it was kind of the voluntary simplicity movement and just because you have more stuff doesn't mean you're happier and you don't

have to keep up with the Joneses. So that kind of got us on a different path of just living simpler and under our means and not overextending ourselves. And that kind of gave us the ability to do this. Cool. Yeah, cool. Yeah, I had not heard of that one. So definitely great. What about hobbies? Oh, go ahead. Books that were brought up before in podcasts. Yeah, yeah, that's always good because a lot of them are obviously, we hear a lot of the same ones. That's great. What about hobbies?

We play tennis together and with the kids. And right now, you know, trying, working to get the kids into college, our lives are just revolving around the teens and their activities and stuff. And then on Thursdays, Michelle's hobby is to do the market research. Yeah, don't forget Thursdays. I was kidding. It really is what she likes to do on Thursday nights. That's funny. Well, that's cool. That's cool. That's awesome. That's awesome. And Brandon, I know you got one more for them. My last question is, what do you believe sets apart successful real estate investors from those who either give up or fail or never get started?

We think learning from our mistakes and then taking action versus waiting. And that can be, you know, we just jumped right into buying properties, but also in landlording, lots of times you'll want to just step back and see how it's going to play out. And it's always better to take some action, even if it's, wrong and learn from it. Cool. Great. Great. All right. Well, that's awesome. Where can people find out more about you guys? Bigger Pockets. Hey, what is that? Right on. Cool. Right on. All right. We'll link to your profile in the show notes, of course. And yeah, this has been awesome, guys. Absolutely. Absolutely. Well, for anyone listening, if you've got any questions

for Michelle and Bruce, you can ask on the show notes at biggerpockets.com slash show 79. Or, of course, you can go find their profiling, link up with them. And listen, guys, we really do appreciate the time and you guys sharing a little bit of your story with us. And we'll look forward to seeing you around the site. Great. Thanks for having us. Thanks, guys. Thanks, guys. Thank you.

All right, guys. That was Michelle and Bruce Fisher on the Bigger Pockets podcast. And we, again, really appreciate them taking the time. Hopefully, you've gotten some value out of this show. And I know that I certainly found it fascinating and I think it's a new. niche that would certainly excite some folks. So hopefully you enjoyed. If you are an new member, a new listener to the Bigger Pockets podcast, I'd definitely encourage you to go back to the previous 79 shows and see what we've got. We always have new ideas, new strategies, new niches, new techniques.

So listen up. And otherwise, as I have to remind you every time, I would not be doing my job if I wasn't. Definitely jump in on the site if you're not an active member of Bigger Pocket. We certainly encourage it. Bigger Pockets is such an amazing community of people like the fishers who are out there just trying to help one another be successful. So jump in, get involved, participate, welcome new members and just share what you can when you can. And you'll see it come back. It definitely works that way. So otherwise, check us out on Facebook, Twitter, Gplus, Pinterest, LinkedIn.

And we'll see you next week. I don't have much more to add. What about you, Brandon? I got nothing. See you guys on the site. We'll see you around. Take care. Thanks.

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