1152: Fleeing High Tax States & Client Case Study: Ira Boyd, 13 Properties & Counting

In about 2014, I found you. It was just a perfect fit, I gotta say. It just, the show just resonated with me and I just took off. I was one of those freaks that went back and listened to every single episode, several of them. I listened to them for multiple times, you know, and just couldn't get enough. I was just eating it up. It was fantastic. And that led me to go to some of the events and I went to Meet the Masters, which for any of you listeners out there, that is the way to go. I mean, what happens is you get there, you're in the room with other clients and it inspires and you start to hear their stories and you see that it's real and it takes it to the next level. And then, not to mention just the lineup of people in the room, you know, the CPAs and the lenders and the local market specialists, it's just a fantastic place to be to really take it to the next level. It gave me newfound energy.

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants, and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your Financial Independence Day. You really can do it. And now here's your host, Jason Hartman, with the complete solution for real estate investors.

Welcome to episode 1152. 1152. This is your host, Jason Hartman. I've got Adam here with me before we introduce another client. Case study today from our friend Ira Boyd here. He reached out, booked an appointment in my scheduler and you can do the same. Jason hartman.com. jason, if you'd like to be on the show and we'd love to hear your case studies, I always get such great feedback on these. Everybody really loves hearing them and then meeting and talking to that person when they come to one of our live events. And of course, we've got Meet the Masters of income property, our 21st anniversary event coming up this Saturday. And Adam, I think before we get into anything today, we got a few things to discuss. We ought to just discuss Meet the Masters for a moment. Is that okay with you?

That works for Me.

Okay, sounds good. So we start this Saturday at 8:30am for registration. 8:30am we are trying to smooth out the registration this year. Hopefully it'll work. Please come at 8:30, have a cup of coffee on us. And that's like a $12 cup of coffee. Cause it's at a hotel. So it's gotta be better than Starbucks.

With a 20% gratuity.

25% they call it Plus Plus. It's 25% service charge and then there's tax of course, so it adds up to about 35, 34% or something like that. But here's what you gotta know. In the hotel contract it says that the servers do not get the 25%. Is that unbelievable? It's just every industry and you know, later this week we're gonna really rail on Amazon Jeff Bezos as the modern day slave driver that he is. And the really appalling conditions of working for Amazon, it's mind boggling. It's just amazing how the corporatocracy, we complain, most of us, that it's rolling over us as customers. Right. But it is rolling over the working poor in the worst way. And I know you're gonna say what are you Jason, a liberal? No, I'm definitely not. But Adam's a liberal, I'm a libertarian and I just think the market has to rise up against this and correct these forces. Big discussion.

If you're going to call it gratuity, you should give it to the people who are doing the serving. But and the taxes. We're going to talk about this in New York, but I mean the taxes that you're getting hit with in California are because they're not getting money from anywhere else.

It's a complicated issue. So we'll go into that. Anyway. Registration at 8:30 on Saturday. Coffee plus plus. That's what they call it, plus plus.

And we will start hopefully promptly at 9am and we have a big agenda for Saturday. A lot presentations to get through and that's going to be great. Of course we sent out an email with all of this information. So check your email box for an email from me. We will go until 6pm on Saturday night. We'll take a two hour dinner break and then we will reconvene at 8pm for a concert. We've got a Rod Stewart tribute band, so please dress in some fun 80s style clothing. Now I don't know if Rod Stewart really is 80s, but that's kind of how I think of him. Of course he's got a Multi decade career. But anyway, dress for fun on Saturday evening. I think a lot of people are going to wear white. So if you want to wear all white, you know, you could call it a white party. So that'll be fun for Saturday evening. And then on Sunday networking and coffee at 8.30am and we go till 6pm on Sunday where we conclude the weekend attire business casual. And Adam, we will be opening the green room on Saturday at the February 1st break at 10:30am and you can go into the green room and network with the speakers, take photos, do deals or just kind of hang out and relax between the sessions. And that's for VIP and elite tickets. We did have someone ask us today if they could upgrade to vip. I'm sorry, it is completely sold out. So we closed VIP registration about two weeks ago. We do have a couple of tickets left for general admission though. We have I think seven tickets left. Hopefully we'll sell those before Saturday. Jasonartman.com masters and we just look forward to seeing you all there. So it's going to be a great time this weekend. Adam, when do you fly in?

I fly in Friday night. I think I get there about 5:30 California time.

Good stuff. Well, we'll look forward to seeing you. And we will be just setting up on Friday evening so it should be.

Yeah, I'll help some of that I guess get the manual labor going on.

Come on down and find us. Come on down and find us. So hey, a long time ago, right around the time I moved out of California, one of the best life decisions I've ever made. Back in 2011 leaving the Golden State when I moved out of California, I predicted that California and other high tax jurisdictions would build what I call an economic Berlin Wall in order to stem the flow of not only the brain drain but the money drain as people leave these high tax nexus areas. And you know, if you don't know that's exact what happened in East Berlin when the communists were running. East Berlin people were just fleeing communism and they finally decided over the course of literally one weekend that the brain drain was becoming too costly as people were fleeing to the West. So they erected the wall essentially in a weekend, if you can believe that. It was a, I believe it was a holiday weekend as I recall. And, and they just put up that Berlin Wall all of a sudden. And the same is happening from an economic perspective in places like New York, California, et cetera where people try and cheat, they try and cheat the system. You know, a lot of people in California say they are Nevada residents, because of course, there's no income taxes in Nevada. Adam, the article that either you or I. I can't remember who posted in our content group talks about that, Right?

Yeah, it was. Especially now that the tax reform has kicked in and people are getting their.

Property tax capped at the $10,000, right?

At the $10,000. New York has seen people leaving, especially for states such as the one you just moved to Florida. CNBC has essentially said, hey, if you're doing that, you're going to get audited. And not just a little audit. They're going to go deep. They're going to get your cell phone records. They're going to get your. They said dentist records. If you have a pet, they're gonna look at where you're boarding your pet whenever you go on vacation. All of that stuff. I mean, they're going deep because it's a state says they have a $2.3 billion budget deficit and they want their money.

Yeah, they do. They do. And look, you know, the government has the right to do that. I mean, the Franchise Tax Board, the FTB in California, they are relentless. They are vicious. You know, folks, if you're thinking you're gonna cheat, if there's anyone out there listening that thinks they're gonna get away with this, you' the one thing that will for sure be a dead giveaway is your cell phone, because they know what tower your cell phone is talking to, okay? They know what toll booths your car goes through. We live in a surveillance society. There are cameras everywhere. You know, I remember people in Corona del Mar, California, an area of Newport beach where our upcoming Meet the Masters is. I'd be at the coffee shop years ago when I lived there, and they'd be talking about how, oh, yeah, I'm technically a. And they, you know, wink, wink. A Nevada resident. I'd say, well, how do you do that? And, you know, this was before I knew anything about it. And say I just give my buddy in Nevada my credit card and I say, you know, charge some things on it. It's okay with me. Go out to dinner, whatever. And that's how I will prove to the state of California that I live in Nevada. Good luck with that. You know, first of all, what you're doing is a crime. Second all, they're going to catch you, okay? And they have every right to. So they say that if you want to establish residency, you know, get a doctor and a dentist in that area, register to vote, get a driver's license, etcetera, you know, whatever the usual stuff that we've all heard. Right. But they will know where you spend your time. Toll booths, cameras, you know, pet boarding, like you said, Cell phone records being the most damning of all. And then people will say things like, well, I'll just get two cell phones. Oh, good luck with that one. They'll figure that out pretty easily. Okay, so it's just simply not going to work.

Yeah. What boils down to is if you want to leave New York because of the high taxes, leave New York.

Yeah.

If you want to stay in New York, then stay and just be ready to get hit on the taxes. I mean, these states have decided this is how they're going to do business, and that's their right. But it's your decision whether or not you stay or go. And if you decide, hey, I want to move to Florida, then just move to Florida. You can still do. We live in a mobile society. Anything you can. Well, not anything, but most things you can do in New York, you can do in Florida.

Exactly. Exactly. You know, Adam, you know what always has amazed me throughout my life, even when I was a kid. Right. Is how liars, they just feel that they need to lie all the time. I say, you know, instead of lying, why don't you just make it true? You know, it's really. There's really just no need to lie. Just make it reality. You. You have the choice and the power to make lots of things in your life a reality. So there's no need to lie about things. Just. Just make them true. You know, like you said, just move. You know, you can visit New York. You can be there less than six months of the year. You can do all kinds of things to make it true. There's no need to lie. It's just not going to be profitable for you.

Yeah.

And one of the things that surprised me whenever I was reading this article is auditors look at your home and they compare your home in Florida or, you know, wherever you're moving to, they're just Florida, because a lot of them are. They say they're going to look and see if your new home is bigger and more expensive than the run in New York. And that, to me, was amazing because first off, a lot of Florida homes compared to New York homes are just not going to be as expensive.

Yeah.

What if you don't want to live in a huge house?

Right, right. Well, you know, that. That one's kind of a tough one because those two markets are so different. You know, if you live in Manhattan, you're Obviously going to be in a tiny high rise that's still going to cost you $3 million. But $3 million in Florida will buy you an estate. Okay. So, you know, they're just going to. It may not be the same square footage or price, but it's going to be the overall kind of standard of living audit. You know, there's. There's an old saying. If it talks like a duck and walks like a duck, it's a duck. It doesn't matter what you call it, it's still a duck. Right. And, you know, they can make sense. And, you know, a lot of these cases go to court and you'll be arguing them in front of a judge. You know, the judge will make a decision as to whether or not you're a resident or not.

Yeah.

And these. It works. I mean, they've been conducting about 3,000 audits a year about this, and they're collecting about a billion dollars over those audits. So, I mean, clearly people are trying to cheat the system and they're getting busted.

Yeah, don't do it, folks. Just make it true. You don't need to lie. Just make it true. I'm telling you, and I've said it for years, make it a plan to get yourself out of these high tax business, unfriendly jurisdictions. It may take time. You do it over a few years. I remember for the longest time, I was just honestly kind of bored with living in Orange County. It's a beautiful place. I love to visit. Look, we're having our event there on Saturday. I'm a fan. I just don't want to pay the taxes. I don't want to pay the real estate prices. The home I bought here in Florida probably is better than my last couple of houses in Orange county, and it's less expensive. So it's just a matter of, you know, what really constitutes quality of life. And so that's the thing. Hey, Adam, we better get to our client. Case study today with Ira. Let's hear what he has to say and we'll continue this on another episode.

Don't forget Meet the Masters coming up this weekend. If you can't make it, there is a live stream option available. So go to Jason Hartman dot com. Check that out. You should come to the event. But if you can't, for some reason, one or the other, do get the live stream because it's worth listening in and hearing everything.

Yeah, it's not just listening, it's watching, too. It is video. So thank you for the reminder on that, Adam. You can join us from anywhere in the world, maybe even the International Space Station orbiting Earth on the live stream. But I can't guarantee that your Internet usage fees won't be really high in the space station. So whatever.

Small market, small market. We're going with there.

Small. Small number of people affected. But I just have to say that just in case. Okay, so jasonhartman.com masters livestream tickets are available for those who are coming live, which is even better. We look forward to seeing you on Saturday.

Hey, I'm excited to bring to you another client case study today, and this is with our client, Ira Boyd. He has 13 properties. One is his own home and 12 are income properties. He lives in Southern California around Burbank. It's just great to have him come on and share his story today. Ira, thanks for coming on. How are you?

Jason, thank you for having me on. I'm honored to be here.

Well, it's good to have you. So, first off, I guess I should ask you, when did you become interested in real estate investing?

Well, I bought my first property in 2004. And then. And I knew nothing. I just had a little bit of extra money, and I thought it was a really good idea. I always knew that, you know, real estate was a. I always heard it was a pretty sound investment. I bought a couple more in 2007 and then got crushed in the ensuing crisis that occurred.

Well, buying in 2004, anybody would get hurt by that, probably.

Right?

Those initial properties that you bought kind of. We'll call it the first round. Ira, where did you buy Those? Were those SoCal properties or were those nationwide?

One was in Austin, which did okay during the downturn, but then I bought two in Salt Lake City, and one of those was just like a really nice house. I fell in love with it. I made that m. I fell in love with a big, beautiful house. It wasn't. It would have been fantastic to move into, but it wasn't a great rental, and it took a dive.

That's the thing. It's almost better in some ways if you don't see the property, because then you're forced to make a decision with your intellect, not your emotions. Right?

Yeah, I totally fell in love with it. And it was just. Was a bad call. And what came out of that was fantastic, though, because I was really kind of filled with shame. Honestly, I was embarrassed that I made such a big, bad investment because over the next couple of years, it just nosedive and I just couldn't get out of it. But what happened out of that, it turned into something good, as oftentimes, tragedy, you know, crisis. Out of crisis comes good things.

Yeah. You know, crisis is an opportunity. Riding the dangerous wind, like the Chinese say, right?

Yeah, that's right. And it did for me, and I turned it into. I started educating myself more. I started reading all the books on real estate that I could get my hands on. And then I started listening to podcasts, which changed my life, really, for the better. In about 2014, I found you. It was just a perfect fit, I gotta say. It just. The show just resonated with me, and I just took off. I was one of those freaks that went back and listened to every single episode.

I love those people.

I know it's. We're a weird group, but I listened to it, and several of them. I listened to them for multiple times, you know, and just couldn't get enough. I was just eating it up. It was fantastic. And that led me to go to some of the events, and I went to Meet the Masters, which for any of you listeners out there, that is the way to go. I mean, what happens is you get there, you're in the room with other clients, and it inspires you, and you start to hear their stories, and you see that it's real, and it takes it to the next level. And then, not to mention just the lineup of people in the room, you know, the CPAs and the lenders and the local market specialists. It's just a fantastic place to be to really take it to the next level. It gave me newfound energy.

Yeah, that's great, Ira. So first off, I want to say don't feel bad. Look at millions of people. I mean, about what, 12 million people went into some level of foreclosure during the Great Recession, Right. Nobody knew that was going on except the people in the big short movie and the book.

Yeah, exactly. Fantastic movie. And I. And I know that now.

Yeah, yeah, yeah. But at the time, I know it's. It's hard. Definitely, definitely. But, you know, the whole. We'll call it the debt industrial complex. It's a big scam. It's just a total scam. So don't feel bad about that. But you got through the Great Recession. You feel. Found my podcast, and you said 2014, I think, right?

Yeah, that's correct.

When did you come to your first Meet the Masters?

That very next year.

Oh, 2015. Okay. Do you remember. I'm curious. Do you remember what your first episode was where you listened to our podcast?

No, I don't, because I. You know, Right. When I got a hold of it, like I said, I just started spooning it up and I just listened to tons of them. And then, yeah, I went to that. You know, I went to the Meet the Masters and it was fantastic. You know, I became a bag man with Aaron.

Yeah, yeah. Him and his funny. His funny bag. That' an inside joke. If you weren't there or you haven't been to other Meet the Masters where he did that would. It's too hard to explain. But yeah, yeah.

Other than to say you had a bag filled with like a razor blade and some whiskey and a condom.

So. Okay, yeah, it was hilarious. Yeah, it was hilarious. But I don't think most people will get that, so.

They won't.

And when did you buy your first property through our network?

It was pretty soon right after that because I was on board once. Listening to the podcast for long enough took me to the event. And once you get there for me, that's when I got traction. Meeting the other people inspired me. Talking to the investment counselors personally, you know, I got into dealing with Sarah on a personal level. And when, you know, and also at the events, you're having the evening with people, you might have dinner, you might have a few drinks and that takes it to the next level because you're personal with them now. Now there's a level of trust that you didn't have before. And once that happened, I was in. And so I think I bought a property right away, waited for a little while, it felt good. There weren't any real problems, knock on wood. And so I just started accumulating them and it's been pretty damn good ever since.

Yeah, that's so great to hear. And so now you're up to 12 income properties. And what different markets are you in across the country?

I kept one in Austin. I had actually bought one other one in Austin prior to getting tied into you. And since then I bought eight in Memphis and one in Indianapolis.

Okay, fantastic. Good, good. I think you're missing one in that count. Yeah, that would be 11. So where's that other one? It's hard to remember sometimes, isn't it? I lose track of them myself.

I kept one of my other properties that I told you about.

Oh, okay. Got you, got you. Good stuff, good stuff. So you're mostly Memphis and Indianapolis now. What's your plan for the future? I think you might be over invested in Memphis, although that's a great market. I own four properties there myself. Are you going to do more Indianapolis or some other markets? What do you think?

Well, it's funny you say that, because I. All the initial ones with you, I did in Memphis. It's because I really, I just really like this local market specialist that I met at one of the events. And I just kept going back to him. We built a good rapport and I had such good success with them that I went back. But I, on your advice, I kind of wanted to start diversifying more, and that's when I bought the Indianapolis property. But most recently, I took my family on a little southern trip. Was really fun. Over the holidays, we landed in Memphis and we rented a car, looked at some properties in Memphis, and then we went down to Jackson, Mississippi, looked at some properties there. Yeah, my intention was to buy in Jackson, but I just didn't. It didn't fit. That one just didn't fit.

Yeah. You know, that's why there are choices. I mean, different markets. And it's not just the market. It's really more the team, the provider. I think I, I think you should choose the provider, the local market specialist and the team first and the property second.

I couldn't agree with you more.

Even if the local market specialist is a good choice at first, they don't remain a good choice forever. That's one of the biggest problems with our business. I think they fluctuate. Right. And a fragmentation of it. But, Ira, what are some of the, you know, like, lessons you've learned or advice you want to share with other investors? I think that's one of the best things that comes out of these client case studies we do on the show.

I mean, I could go in tons of different directions with that. I like to call myself a working stiff by day and an investor by night.

Yeah, that's great. And by the way, we should say you're in the entertainment industry, you live in Burbank, so the movie industry is, you know, you're right there. Right, right.

Yes. What I'd like to do, what I'm trying to do, what a lot of people are trying to do, is turn my W2 money into legacy money. And, you know, it's going well so far. I think my advice to people is really, I would say show up at one of the events. It might be one of the most important things. At least it was for me. Like, that really inspires me. That's when I'm in the room with like minded people. It's a powerful thing. And it just motivates you to act.

Yeah, I, I listen, I want to expand on that thought for our Listeners, folks, you gotta get out of the theory stage. You know, it's great to be listening to podcasts, you know, read books, whatever, get your education. That's certainly important, but you gotta go meet people. And I'll tell you, when I discovered this, Ira, it's just like you're saying. When I joined, I. You know, I used to just be running my business and keeping my head down and doing that. But when I joined Young Entrepreneurs Organization, my first sort of mastermind degree, if you will, and I saw other people in my peer group that were doing, like, much bigger things than I even imagined I could do, I thought, wow, you know, what you realize by, you know, hanging out at the bar and having a drink with them or going to dinner with them, just like you said, you know, it's not what takes place at the conference. Like, that's one thing. You know, sure, it's great to hear the speakers and learn things, but when you hang out and maybe share a meal with just real regular people, I don't know, at least for me, the way I describe it is what clicked, I think, in my mind is that I used to. It used to be sort of like there were those people and there was me. Right. And then I realized this guy isn't, you know, he's doing way bigger things than I am, but he's not some, like, great person or anything. I could do that, too, you know, he's just a regular person, you know, and. And I'm just a regular person. Like, I could do that, too. It, like, makes it real, you know, there's a big difference. And that's the power of the mastermind group, you know, conferences, everything like that. Yeah.

If I can expand on that a little bit. When I went to the event, what it was is that, like, there's people in the room that have hundreds of houses, but then there was somebody sitting next to me that had two houses.

Right, right. That's what makes it all levels. Yeah, yeah, exactly.

We discuss his situation, where he invested, who his property managers were, is it working? Were there any issues? And that's what makes it really real. And I've made contacts there that I still, you know, talk to now, which is great.

Yeah, that's.

That's a great networking tool as well.

Yeah. So you can. You have someone you can just bounce ideas off with. Yeah. Kind of get a partner. You know, it's one thing I want to encourage people to do is use those networking. You know, the other clients of ours that you meet at our events have an Accountability partner to, you know, help you stick to your goals and hey Ira, did you know six months have passed? Did you buy another property yet? You know, yeah.

It's so true. You keep each other motivated. By the way, you know, I have named your program. I call it the Jason Induced Debt destruction. That's my name for it.

I love it. Yeah. So for those of you who don't know, what I was referring to is my concept of inflation induced debt destruction, which is use debt in a powerful way and inflation basically pays it. Your tenant pays it off for you, but so does inflation. Right. And so this is the Jason Induced Debt Destruction. I'll take it. I'll take it. I. I love it. I love it. That's great. That's awesome. Hilarious. So going to conferences, masterminding with people, that kind of stuff, that's great advice. I definitely recommend it. Any other learnings like, you know, how to deal with your property managers or are there any tools or technology or apps you're using or anything like that?

You know, I'm really not right now. I may get to the point where I self manage more. I know you talk about it a lot on your podcast and I listen with intent because in my future I would like that to be me. Honestly, that's what I'm kind of working towards. But I'm used years away from that. I'm, I'm in the, you know, I'm just in my career and I like it and I want to stay there for a number of years. But when I at the end of that, I would like to transition into more of a real estate focus, you know. Yeah. Yes. I would just like to and take advantage of the tax write off to be as a real estate specialist, your.

Real estate professional designation and thank you. And again, that doesn't mean you go out and sell real estate. It just means it's an eye IRS classification that allows you some fantastic tax benefits and you know, IRA with 12 income properties, if you weren't doing the full time working stiff job in the entertainment industry, you could probably qualify or at least be close to qualifying.

I'm getting closer, Jason. Hey, you'll be there. You'll be the first one to know.

That's awesome. Good job. Good job. So what's your plan with your portfolio? I think I asked you that, but I don't know if I let you.

In answer like, you know, I'm glad you asked me that because I'm really looking forward to the next Meet the Masters because I want to do a portfolio Makeover I'd like to get in somebody's ear and talk about. I have a few properties that have a lot of equity in them and one I, I own free and clear that I know that I want to do a 1031. So I'm sort of just waiting right now to actually get there and talk to people in person. And I'm going to take action this year. I'm super excited about it. That's what I want to do.

That's great. Yeah. The great, great thing about the 1031 exchange is of course itself that you get, you know, a tax deferred exchange, it's not tax free because someday if you liquidate, you'll have to pay the tax, but you also get to refinance in the process. And so you can 1031 exchange and refi till you die at the same time, which is a great plan.

You know, it's a pretty sweet deal.

Yeah, it is a pretty sweet deal. Are using like property tracker to track your properties or anything, or you're just using an Excel spreadsheet or what are you doing there?

I'm honestly doing it kind of old school. I'm getting to the point where I need to take it to the next level. But, you know, the acquisition of all these properties happened over the last four years primarily. So I'm still, I mean, I have a big, huge drawer here filled with all this stuff and I constantly just check all my books and go through it twice a month. I'll cross reference everything and kind of just go through it, make sure that it's going smooth, make some emails and whatnot, take care of any issues. They're usually small so far, but that's it. And I, yeah, I do need to take it to the next level probably.

Right, right. So Ira and I know it varies from month to month, but if you had to average it out, you've got the 12 rental properties. How long does it take you every month, you know, to do everything involved with owning and managing those properties? Right. Like, is it, you know, a half hour per property? Like, do you spend 6 hours a month, 12 hours a month or less or more? What?

Gosh, it varies, but I would say, I mean, if I wanted to, I like it a lot, so I spend more time on it than I actually need to. But still, it's probably six to eight hours a month max. Yeah, I can do less if I. But I, you know, I just think it's really good for you to stay involved so that, like, I like to send out Emails to my property managers just to let them know that I'm paying attention. Even if there's. Even if there's no problem that has gone on, I like to just go like, hey, everything okay? How you doing? Even if it's just meaningless small talk, it's really just to let them know that I'm paying attention. I think it's helpful.

I think that's very helpful. They know that you are an aware, engaged owner. So, yeah, that's. That's really good advice. Just about a half hour property, and you say you could spend less if you want to. You're just not trying to be, like, super efficient with a portfolio. So that's a good question. You know, a lot of people say, well, how long does it take now? Have you had any repairs that you've, like, negotiated down or any learnings from that that, you know, you can. Can share with investors?

You know, I had a problem with an air conditioner. And really, it's kind of what you always talk about on the podcast that inspired me to ask more questions. And I think I headed it off at the past because even though it wasn't a real problem, what I did is the minute that they sent me an email saying that there was a problem, maybe a lot of people wouldn't even respond to that and they would just do the service.

Right.

But instead I engaged with them.

Good.

And so I don't know that it would have have gone bad or anything. I just didn't allow it to go bad right away. I was like, okay, let's get some bids. And, you know, I was just so engaged that I just think they were like, oh, okay, cool. We're going to take care of this professionally and quickly, and we're not going to mess around with it. And they've been pretty good about it.

Good, good. Well, that's. That's really good. You know the old saying, an ounce of prevention is worth a pound of cure. Right? So, yeah, very, very good advice. Very good. Well, Ira, thank you for sharing your story. That's just awesome. I love it. One last question I want to ask you about is rent increases. Now, you've been five years, well, not quite five years in the game. At least with us, you did it before you found us, too. Are you increasing your rents? Are you pushing those up over time? Is that happening or.

Not really, to be honest, not at all. I'm very hesitant of that. I'm more like, leave well enough alone as far as that goes. And, you know, I've listened to you Talk about it. And taking that into consideration. But I really like the idea of keeping tenants longer instead of threatening to push them out in any way. I almost just like to not rock the boat.

Don't be too hesitant to raise rents though. You gotta, you know, I would say even if your rent increases are smaller, do them so that you get people in the habit of them. I'm gonna bug you about that one. Okay. I want you to raise your rents. I mean, you can. Tenants are used to rent increases. They're used to, everybody's used to inflation. They just expect it, you know, even if it's not 3 or 4% per year, you know, it's 2%. I mean, on a thousand dollar property, that's 20 bucks. No one's moving for 20 bucks.

Okay, no doubt. But let me back up a little bit. The truth of the matter is is that the property managers take care of that a lot anyways.

Okay, so. So they. So it's not like you're not raising them.

No.

Right. You're just not pushing it.

Yeah, I'm just not pushing it because most of the time it's already wrapped into the deal. You know, there's rent increases that have come along. There's. It's just happening a lot out there for all of us investors. And I think the property managers are in tune with that so that it's happening more often. And even when there's turnover, the next tenant is actually paying at a slightly higher rate. So it's priced into the new rent.

Into the new rent. Okay, good, good. Glad to hear that. How long are your tenants staying? Are you finding that they're staying more than a year at a time or is it kind of a. You know, we perform an 8% vacancy every year, so one month per year essentially. Right, but are you finding that it's better or worse than that?

I would say that's probably a pretty good number. I will say that most of my tenants sign two year leases right out of the gate.

Good.

So that changes it a bit and, you know, probably helps. And I won't maybe even see some of those problems until years down the line to be realistic about it, but right now I would say I'm on the better end of that.

Good, good to hear. That's awesome. That's awesome. And what's the average cash flow from your properties? Are you getting, you know, a couple hundred bucks a month per property? I mean, it depends. Depends. Depends on the financing and, you know, it's complicated, but.

No, but that's what I always strive for it's about 200 to $250 per property.

Good stuff. And what kind of properties do you like to buy? Do you like the nicer properties or you know, class like a, B or C as we talk about?

I love that you asked me that. I mean, first of all, what it. I will tell you that it has changed over the years. Like the first houses, you know, I just wanted a big beautiful house. And then I realized for one what I, what I like, I actually like single level homes just for the even less square footage is becoming more attractive. I like nice houses for sure. It's still very important to me. If I could have my choice, I'd kind of be that guy who just invested in A properties only. But to be honest, it's more like A and B. But I always try to go for the best houses that I can. But I like them simplified. I don't like carpet. It's kind of all the things that you've been preaching. Yeah, I like wood floors.

Make your property bulletproof, you know, and you know, you don't have to do this right away. Just whenever there's a tenant turnover and you got to replace carpeting, pay a few extra bucks. It's really not much. It'll pay off in the long run. And get yourself the vinyl plank floors or some hard surface flooring and yeah, you can do it throughout the house. I actually prefer it. Like in my new house, I have hard flooring everywhere except the bedrooms. And people say, you know, put the carpet in the bedrooms. I really would prefer the hard flooring in the bedrooms too.

Me too. I think it's a beautiful look for one.

It is. And it's just so much more durable and you know, have a dog and if my dog gets sick and throws up, you know, it's still like, I don't need to just wipe it up. It's easy. It happens like twice a week.

I like it in my house too. Let me tell you this, that on that trip that I described to you earlier in Memphis, I bought a house while I was there.

Yeah.

And I really didn't intend to. I couldn't.

That was on one of our property tours.

No, just on this trip that I was telling you in the. Over the holidays I took my family.

Oh, got it, Got it. Yeah.

And while we were there, we saw the perfect style house. You just asked the question, you know, like, what kind of house do I like to invest in? It was in, in one of the best places in Memphis. One of the best Neighborhoods. They had a brand new roof on it. They redid the floors. It had a new H VAC and a new water heater. It's just, it's bulletproof, you know, and it was single level, small square footage was everything that I like.

Yeah, that's great. That's great. Good, Good stuff. Yeah. You know, doesn't this become a little bit of a. Like a collector's edition? You know, I just love collecting these little houses, you know, it's fantastic.

It's. It's right up my alley and I'm really enjoying it. I'm. I'm looking forward to the future.

Yeah. Good for you. Well, Ira, again, thank you so much for sharing your story. You know, everybody loves these client case studies when our clients come on the show. So we really appreciate it and the listeners appreciate it even more than we do. So thank you so much. And I will see you in about 10 days at meet the Masters.

Jason, thank you so much for having me. It's an honor and, you know, continued success to you, my friend.

Thank you.

Join us March 23rd and 24th for the 2019 Meet the Masters of income property.

Let's break this down and look at some of the strengths of income property as an asset class. I found that this event is really helpful because I'm totally a newbie to real estate investment. And so I picked up so much information. One of the great things about it is that it's so fragmented. Right. Embrace the fragmentation.

I've actually been learning a lot about tax benefits to real estate and a lot of. I've been investing actually well over 10 years now, and I learned a lot of new things today. The other advantage of this weekend is networking. Meeting new property managers, meeting new area.

Specialists, and seeing the product they have to offer that changes year by year.

Register now@jason hartman.com masters.

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