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UNIN 24 | Renters Warehouse

Renters Warehouse: Leveraging Your House To Generate Income With Noel Christopher

  When you own the house, you can’t generate wealth from it if you don’t leverage it. In today’s society, where people are moving five to ten years from now, how can you create wealth by owning that house? In today’s episode, Noel Christopher, the Senior Vice President of Renters Warehouse, shares his insights on homeownership and how you can leverage your house to generate income. Tune in and learn more about how you can optimize homeownership and create a long-term investment plan! — Watch the episode here   Listen to the podcast here   Renters Warehouse: Leveraging Your House To Generate Income With Noel Christopher Thank you so much for stopping by. I’m here with a good friend of mine, Noel Christopher. Thanks for stopping by, bud. Thanks for having me. Noel, why don’t you take a minute and tell everybody a little bit about yourself? I’m the SVP of Portfolio Services for Renters Warehouse. We are a national property management company. I manage about 15,000 homes in 45 markets around the country. I run our Portfolio Services Division, which focuses on institutional investors, family offices, and private equity that want to invest in a single-family rental scale. Everything from sourcing homes, if you want to buy off the MLS, off-market sourcing, underwriting, acquiring, renovating, leasing, and property management. A little bit of asset management light in there as well. We are going to get into your background. There is probably a lot more in-depth here but you are not just a guy at Renters Warehouse. How long have you been in the investing field, and how many houses have you bought? I started in commercial real estate in Chicago back in the ’90s. That’s where I cut my teeth. It was a doggy dog world. It still is. After the Great Depression or the Great Financial Crisis, I got into real estate investing personally in Chicago, buying 2 and 3 flat buildings. I bought a few hundred of those. Renovated them, and you couldn’t get a purchase loan. We worked with a lender and did refinances. We did Fannie Mae and Freddie’s refinances. We did almost a thousand of those overall but I owned a couple of hundred. In 2012, through a mutual friend that I went to college with in Arizona, the late Todd Farnsworth, who is a good friend of mine from college, introduced me to Dallas Tanner when it was still Treehouse Group, and they were about to go big with Blackstone. My real estate group was the main broker they used in Chicago. Previous to that, as a commercial real estate shop, we were buying other brokerages and doing a lot of different things. We started buying homes from Invitation Homes, and the rest is history. Since then, I’ve worked all through the industry. I bought thousands and thousands of homes, whether that’s buying directly for a fund or representing different funds. I have some very close friends and deep connections in Chicago, some of whom I’m sure you know, that I still do a lot of business with. I decided in 2012 that this was what I was going to do, and I’ve been doing it since. I start each week with a segment we call the bottom line up front. What I’m going to do is I’m going to ask you to look into the camera and spend two minutes talking to that individual investor. That investor that’s out there only heard you blush over, “I bought a couple of hundred homes.” As we know, I’m a client of Renters Warehouse and most of your customers don’t own a hundred homes. There’s a lot of fear out there. There’s a lot of misinformation. There’s a lot of, “What should I do?” Imagine that after these two minutes, they are going to stop tuning in. They are going to stop at a gas station to get some gas. In two minutes, pour into the audience the most important things you are seeing, the things they need to know, things they should be doing, and things they shouldn’t be doing. Take it away. If you look at where the market is now, I talk about this a lot. What’s happened in the last few years is that it’s gone up to about 40%, 42%, and 45% in some areas. A lot of people talk to me if it is time to sell their house. What should they do? What’s going on? The fact is that if you think that the market was going to continue to go, for example, if we were back in 2019 and fast forward now and we said, “The market went up 3.5% to 4% in the last few years. The rent went up from 3.5% to 4%. We had all been clapping each other on the hands, saying it was a good couple of years. Now, it’s gone up 40%, and people are having a little bit of a conniption with it going back down maybe, and I’ve heard some projections, 15% to 20% in certain markets across the country. That’s a huge opportunity because it probably will not go down and what will continue to go up incrementally is rent. That’s what’s going to drive your investment. The cost of the capital is going to adjust over time, so you buy and invest now. In a couple of years, you will probably be able to refinance into a lower term. You are taking a higher equity risk now and for the next year so that you can realize huge gains in 18 or 24 months. That’s whether you are a large institutional investor, whether you are a small or a medium-cap investor. You have a 1031 exchange, you are investing a couple of million dollars or you are a small investor buying one home. Don’t look at where the market is today and where it’s going to be tomorrow. Look at where it’s going to be in 5 or

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UNIN 13 | Real Estate

Making Connections And Recognizing Opportunities In The Real Estate Industry With Zach Coppinger

  The real estate industry is broad and is divided up into different specialties. With that, you have a lot to learn to see how it works and strategies you can execute to build your portfolio and succeed in the real estate world. Listen to this episode as our guest, Zach Coppinger, shares valuable insights into building your network and recognizing opportunities in the real estate world. In today’s market and economy, you should know which things you should focus on regarding investments, so Zach gives an overview of what you can do to keep your business moving forward. He also discusses how you can manage labor and material costs. Tune in to learn more about the marketplace and how to attract potential clients. — Watch the episode here   Listen to the podcast here   Making Connections And Recognizing Opportunities In The Real Estate Industry With Zach Coppinger I am joined by a good friend of mine, Zach Coppinger. Zach, thanks for coming in. I appreciate it. Thanks for having me. Zach, tell the audience a little bit about yourself. I got my start in real estate investing by buying houses for you back in September 2013. It was a while ago. I started buying single-family houses for you. I ended up going out and doing my own thing in 2014 and 2015. I have pretty much stayed in the single-family space since then. I focused on building up a rental portfolio early on. I pivoted in 2018 and 2019 to focus a little bit more on the owner finance and note origination business but still holding those. I simultaneously built the rental and the note business and still trying to stay pretty narrow with those two business strategies. I am proud of you. My wife is more proud of you. Zach, I like to start each week with something we call the Bottom Line Upfront. Just imagine someone riding around in their car. They queue up for the show, get out, get gas, and cannot find it when they get back in. In the Marine Corps, when we brief the generals, they always say, “Do not bury the lead. You lead with the most important thing up front in case you get mortar rounds.” I am going to have you talk to the readers and talk about the things in the market, the economy, and the real estate cycle nowadays that they need to be focused on, thinking about, they need to be doing and avoid. Take two minutes and give them the bottom line upfront. This marketplace now, over the past few years, has allowed investors to get pretty lazy with numbers. You could have overbought the house, over-rehabbed the house or gone over budget, and you are fine if you held it for five months. You ended up appreciating 10% and 15% in that time. It allows investors to get pretty lazy with numbers. You keep winning whenever you go into those scenarios long enough, and you start to feel pretty comfortable. You can just keep doing and repeating it. Getting a grasp on your numbers again, having real ARVs, real rehab budgets with updated pricing with material issues, in our personal business, we have seen materials go up. The contractors have tried not to put their labor up too much because they submit a bid. We push back a little bit and say, “It used to be 30%, 40% less. There is going to be a tail in labor pricing going up as well as the material pricing.” With this marketplace, we are starting to see a bit of a plateau with numbers in most asset classes, as far as pricing and single-family. I would say getting a good grasp on the real ARV, the real rehab, not assuming that the market is going to work you out of that. It is because the market is a little bit unknown. It seems very difficult to predict that it is going to keep moving up at the pace that it has been. Right in line with that, having a little bit of a cushion in case you missed it. There are a lot of sayings out there, “Cash is trash.” You are losing money if it is just sitting in your account. Inflation stated rate might be 7%, 8%. We feel like it is a little bit more. Losing value on that money is just sitting in your account but providing you the platform to not lose your business in case you miss a deal. How much liquidity is enough? It is personal for each person. What we try to do is about 10% of how much money we are borrowing. If we borrow $5 million, we try to keep $500,000 in cash reserves. It is a comfortable position that we found and allows us to float 6 to 8 months of paying out debt service without any money coming in. To sum it up, have a good grasp of your numbers. Do not think that the market is going to get you out of a sticky situation moving forward and maintain a comfortable amount of liquidity. Make sure that a comfortable amount is calculated. Try to have some basis for why you are doing it, whether it is just being able to service debt for a certain amount of time if you have no money coming in, being able to go over on your rehabs and still be able to pay your guys and get rid of the property. The property might sell for a little bit less than you anticipated.   There is a lot to unpack. The first question is that you are not new in the business by any measure. Like you said earlier, you got into it around 2013. It has been up. Where do you get the information you need to plan for the unknown? I am a pretty conservative guy by nature. A backstory a little bit. I

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UNIN 12 | Fix And Flip

How You Can Fix And Flip Around Market Shifts And Why Local Flippers Are Crucial To Solving The Inventory Crisis With Kurt Carlton

  The state of our economy today is an open book and we see the hit everywhere. But how has it been in the real estate space? Specifically, how has it been in the fix and flip niche? In this episode, Kurt Carlton, President and co-founder of New Western, talks about market shifts and the several factors affecting the real estate market. He also shares insights on what the current inventory crisis is really looking like. Tune in and learn more about initiatives for fix and flip developers and how you can battle inflation and hustle your way to the top. — Watch the episode here   Listen to the podcast here   How You Can Fix And Flip Around Market Shifts And Why Local Flippers Are Crucial To Solving The Inventory Crisis With Kurt Carlton Welcome back to the show. Thanks for coming back. I am joined by a good friend, Kurt Carlton. Kurt, thanks for stopping by. It is a pleasure. Kurt, take a minute, say hello, and tell a little bit about you and New Western. We operate a marketplace for investors to find houses to rehab. We do it in 20 states and we will be in probably 10 or 15 more. We are expanding rapidly. A lot has changed since 2008, but we have been doing this since 2009. I remember when you started and it seemed like bad timing to me, but I am very impressed with what you have done and the marketplace you have developed. I want to get straight into some content here. The first segment is Bottom Line Upfront. What I do is I give each guest two minutes. When I was in the Marine Corps, I used to brief generals. I always said, “You do not bury the lead. You give the general the most important information up front in case mortar shells come in.” What I am going to do is I am going to give you two minutes to talk to the readers and pontificate about what people should be thinking about, what they should be looking at, any data that is interesting to you that you are watching that you think people should watch. Things you think they should be doing or maybe some things that you have seen in the market that you think people should not do. Bottom Line Upfront, go. There a couple of big things. It is getting exciting again. Inflation is the big one. That is what everybody is looking at. Nobody seems to share the opinion on how to measure it, but it is here and it is big. Warren Buffett famously said in 2012, “The biggest hedge against inflation is the 30-year Fannie Mae mortgage.” It is a perfect defense against inflation. Even though rates are higher, you can reset your mortgage rate if rates go down through a refinance, as long as your financial condition stays the same. You cannot repurchase a home again later, if the price increases. I do not think that there is a future where home price appreciation starts to go backward rapidly. Inventory is at such an unhealthy low number. It would be unreasonable to think that you are going to lose home value. I think we will be just fine on homes. That is very much separate from a lot of the other concerns in the economy. I think what is different in this potential recession that we are going into now is, in the past, we did not have as much warning and the Fed did not do as well in giving us a warning ahead of time. They did not communicate as well. When a recession or these issues were nigh upon us, they had to react. What they are doing a really good job of is communicating so that the market can understand where we are heading and can slow down before they need to raise rates. I think that is already happening. We are narrowly looking at a soft landing as opposed to a hard landing, but we will see. I would continue to buy real estate. I would certainly leverage fixed-rate mortgages and debt whenever you can. That would be my advice, given the lack of inventory we have now. You brought up the dirty word, Fed. You said they are doing a good job. You may be the only person I have heard say that, but you are right. They have given us a heads up. Interest rates have doubled, but they have doubled from not even the bottom of the basement, like under the basement, under the foundation piers, down into the Earth’s crust. You brought the crystal ball segment of the show up earlier. Do you think that still rates could still go up? The idea is that they will continue to increase. If you saw it in 2018, we had the same issue. Rates went up and then they reversed it. Who knows if that is going to happen? The inflationary pressure is different than what it was in 2018. Nobody knows where we are going to go, soft landing, hard landing. Your teeth are on the edge. If you push too far, it is like a chain reaction. Everybody goes. I listened to Ben Bernanke in 2008 about how that was potentially avoidable, which I am not sure I believe. It was right before he handed us a signed book and all that. Maybe he was trying to save us. Everybody complained so much. They drove it to happen. Nobody knows, but what is different than it has been in the past is the Fed does a lot more forecasting about what they are going to do. That allows the market to react. It allows the slowdown that we need to slow down inflation and the labor costs that need to happen. I look at this more, real estate-wise, moving towards normalization and not moving towards a recession. It is inserting

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Real Estate Strategies And Tips With Jawad Dashti Of TooDash CRE

  If you want to succeed in real estate, it’s not enough to sit on the sidelines and learn everything. If you don’t put all of that knowledge to work, you’re not going to be able to do anything. You have to take action. Jawad Dashti the owner of TooDash CRE, likens it to playing Monopoly without knowing the rules. In this episode of Uncontested Investing, Jawad sits down with Tim Herriage to tell us how exactly this works for him. He also talks about making the “safe bet” in real estate and why you don’t have to aim to beat the bigger players all the time. Tune in and get some real, actionable tips that will get you going on real estate even through these trying times! — Watch the episode here   Listen to the podcast here   Real Estate Is All About Taking Action: Real Estate Strategies And Tips WITH Jawad Dashti Of TooDash CRE I’m with my buddy, Jawad Dashti. Jawad, thanks for coming. Tell the audience a little bit about yourself. I’ve been in real estate for years. I don’t find myself to be that great at it but I figured that if you make as few mistakes as possible, that alone makes it work out pretty well. You started as a plumber, correct? Yeah. I was in construction working for all these home flippers right before the 2008 bust. Everybody was bragging about how much money they were making. I figured that if they could do it, I could because I knew all about construction. How’d that work out for you? I learned that knowing construction doesn’t do anything at all with real estate. It’s a numbers game. I had to get up and put in some work attitude. To me, that’s what’s paid off the best. You’ve always been one of those people I admire in the DFW area. Every episode, we start with the Bottom Line Up Front, the BLUF. When I was in the Marine Corps, we used to brief generals. They would always say, “Don’t bury the lead. Get the most important information out and share it in case a General has to get up and leave a mortar fire or something like that.” What I’m going to do is give you two minutes to share what you think people should be thinking about in the real estate market, maybe what you think they shouldn’t be doing, what they should be doing or what you’re doing to continue to grow and also protect yourself. The best advice that I could give is that we’re going through some different times, which seems to happen about every eight years in the economy. That’s when the most money is made and lost. The people that win the game are the ones that pay attention. I tell people to look at the economy, what’s going on and all the transitions because everything’s changing. If you can try to determine where things are going, you need to think about 3 to 5 years ahead of the game. As you’ve seen, the office is changing and a lot of places are converting into multifamily. A lot of multifamilies are converting into multi-use. If you notice which way neighborhoods are growing and how real estate is changing and you can be a little bit ahead of the game, it’ll pay off for you. It’s a good time. The inflation has taken off and assets are growing. I have no concern about being in the game. For the people that think that the real estate market is going to crash because of the interest rates, I still think that mortgage rates are low compared to the average. If the whole world went bust, we’re all screwed anyway. Keep playing the game. If you commit to it, put in the work and try to think a little bit ahead, you’re going to do well. One of the things that stuck out the most to me following you on social media the last couple of years is the way you play the tax game. Where did you learn that? I can’t give credit to any books because I don’t read books at all. It’s funny, I can read stuff on my phone all day but reading a book, I’m allergic to it. It’s going to investor meetups, watching shows like this and REI groups. Believe it or not, there’s a lot of content from shows like this. I overhear conversations. When I see people who are smarter than I talk, I try to eavesdrop on them.   I won’t hear everything that I need to know to fully understand the game but I can hear enough to hear a word like 1031 exchange or some kind of phrase like accelerated depreciation. I go home, google it and research it non-stop until I feel like I’m a master at it. I always try to tell people it’s like trying to play Monopoly without reading the rules. How do you expect to win the game when you don’t know the rules? Many people do that. People talk trash about taxes all the time. I love taxes because I don’t have to pay them. The IRS and the government make these rules to manipulate the economy. They’re paving the way for what they want you to do and paying a tax as a penalty for not doing what they want. If you play the game, you can make a lot of money and not have to pay them anything. That’s the way to do it. Read the rules. You own Precision Plumbing and multifamily, commercial, chicken coop and a bunch of single-family. Let’s start at the beginning, maybe on a high-level cover of how you progress from venture to venture. With the single-family, the first deal that I got, I was winging it. Luckily, it went well for me on my first deal. I purchased a single-family deal. Luckily, it was a

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