AIPIS 262: Client Case Study with Curtis: 13 Properties & Counting with

Welcome to meet the Masters of income property Investing. I am your host, Jason Hartman. What is the sort of the one trick, the hack, the secret that really empowers people to success? Income property, the most historically proven asset class in the entire world. 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. We'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.

I've learned a ton of stuff already. Jason and his entire crew have been a fabulous inspiration as well as educational in areas that I thought I was educated in, but I actually, I didn't know what I didn't know.

I'm very impressed with the quality of individual who's here at the event. It's all real deal investors. I've met several people here that are actually buying properties. There's no fluff here. And then also the other property providers that are here at Jason's event. Everybody's really in the business doing things the right way and we're all creating long term wealth. Jason Hartman and all of the crew here at Platinum Properties have put together a fantastic event. All the speakers really know their stuff. Very top notch information and the biggest thing is that Jason doesn't seem afraid to hold back. The main reason we came is to.

Determine which market we want to buy next.

It's been really helpful to talk to some of the various people in different areas to network. We've learned some good information about taxes and loans.

So far. It's been a pretty amazing event. My favorite part of it by far is just meeting all the other investors and realizing that we've got a lot in common, sharing stories together. The different market specialists have been awesome.

It's been good to see multiple markets.

All at once and really had a good time.

Welcome to the AIPIS show for accredited income property investment specialists and those who aspire to be. If you're a real estate mortgage or financial professional, this is the place for you. We'll explore innovative investment analysis, sales marketing and income generating strategies for the most historically proven wealth, creator, income, property. Learn from the experts as they show you how to build a better business and. And a better life. We always love it when clients volunteer to come on the show and share their story and share kind of a client case study. So I saw this appointment booking come up. Someone booked an appointment on my link recently, and I called him up and we've got Curtis Wrischuk on the phone, and his wife Karen was not able to make it for the call today, but, Curtis, welcome. How are you?

Hey, Jason. I'm doing great. Friday before a long weekend.

There you go. It's good to have you on the show. And you are in Raleigh, North Carolina, is that correct?

That's correct.

Fantastic. Well, just before we started kind of formally doing the interview here, you were telling me about your story and what got you interested in real estate. I guess it was bagels, right?

That's right. It started way back in 2008, right after the crash. I went to the store to buy groceries. I looked at the six pack of bagels, and I saw that the price had increased 50 cents. And I thought, how can there be no inflation? I just saw a bunch of inflation in front of me, and so started me down a journey about questioning what people were telling me, what I was hearing from the media. And it rolled back a lot of, I'll call it, brainwashing of propaganda that had been pushed on me. Eventually I came to the conclusion that maybe this is a little extreme, But I think 401ks are a losing proposition. It's gambling. After losing the money in 2008, I didn't want to gamble anymore. So I started learning and researching and moving forward. And eventually I came across you, believe it or not, on Carrie Less's podcast.

Sure.

And you said some things that really resonated with me. So I looked up your podcast, and I'm a bit of a skeptic. That's my nature.

Yep.

And so I actually started listening your podcast. I went back, and I actually think your best podcasts are your early ones.

I do, too.

11 to 1 to 100. Right.

Thank you for.

The newbie started talking about things like how inflation is actually leveraged in your favor with real estate. Right. And being a numbers guy, I started looking into this and I actually went. I couldn't find your original podcast, but I bought, I think, the transcript off of Amazon.

Yes, yes.

So I kept reading and listening and then went forward in the podcast. Then I went to your website and I looked at the size you have for the different properties and the numbers. So I started learning about the numbers and what they meant. And being a skeptic, I am. And being a techie, I actually wrote a program to go and scrape your website and other people's websites and redo the calculations just so I could prove it out myself. And eventually I came to the conclusion that real estate is a great deal.

Yeah, it is.

I had a problem.

Yeah? What's the problem? You have a skeptical wife, too.

I was even more skeptical. Right. And so the way I convinced her was that you had a conference in Orlando. And I asked her if she wanted to go to Orlando, but we had to go to the conference, and it was the Orlando thing first, I think that swayed her to come. So we went to Orlando. We listened to the speakers. She's skeptical, Right. So she listened the speakers, talked to people that were right beside us, and they had already bought houses, and they were happy with the results. And then she got up and went, talked to Aaron, who was in the back of the room.

Right.

And she grilled him, I think, for.

About two hours on financing issues.

Financing issues, mortgages, whatever she could think of. He handled it. And she walked in and said, let's do this. We didn't buy a house that day, but we. We started the ball rolling when 2016, we bought three houses. 2017, bought two houses. And then in 2018, we bought six houses. Properties in Memphis, in Little Rock, and in Jackson, Mississippi.

Fantastic.

It's been full speed.

Yeah. Are you up to like 13 or 14 houses then?

Altogether, we're up to 13 houses.

You've got 13 properties there. Okay, great. And Curtis, you know what? I didn't ask you just so the listeners can kind of get a little context here. What do you do for a living?

I am what's called a technical director for a high tech firm. So I oversee a bunch of software we develop and the engineers that are under it. So I'm. I don't do any more coding. I'm the guy who actually shepherds everything I would say to make sure it gets done. And I'm a problem solver.

Fantastic. Yeah. So you have that analytical mind. And you even created a. You programmed a little program to scrape our website and get the property information and then redo it with your own calculations. That's amazing. Wow.

Yeah. That's a skeptic in me. One of the things is that they had different interest rates. I don't like that. So I want to normalize everything. And, you know, how it starts.

Right.

You start off with a little thing it gets bigger and bigger and bigger. Eventually I went to multiple sites and it helped. It helped to convince me. Right. Being sort of a skeptical guy.

Right, right. That's fantastic. Okay, great. So you've got that, you know, software engineer background, you know, that skepticism. And what does your wife do? What's her background?

My wife is in the quality department of a hospital here. It's a big hospital. Right. And she's in compliance. So she looks after making sure all the regulations are followed. And if there's a problem with respect to that, she has to intervene. So she has a very busy job as well as I do. Yeah.

And she. So she's doing regulatory compliance. Now you're up to 13 investment properties. So congratulations on your success there. And we're. What really got you interested was it sounds like, you know, that you realize there's more inflation than you're being told. Right. And of course, income, property performs extremely well against inflation, doesn't it?

Right, right. You gain equity. Right. Because the price goes up and that equity is leveraged by the ratio.

Right.

It increases by the ratio of your leverage. Right. Which really, you know, knocked my socks off.

Yeah. You get a multiple.

You get a multiple. Right. And then your tenant pays your loan, you get some cash flow and you get that. Was it inflation induced debt destruction.

Right. That's the one people don't usually realize. Yeah.

Oh, and you get the tax break. Don't forget the tax break.

That's really important. Tax benefits. Yeah. Most tax favored asset class in America and the most historically proven asset class in the entire world. I think that's what I say. At least along your journey of buying properties, you tell us about that. I mean, what I always say, and I know people struggle with this, it's a very fragmented industry. You know, there's just a lot of different players that property managers you have to deal with. Some are just bad and some are good and some are just mediocre and. And some are outright crooks. Get all types, you know, they're all different. And that. That's kind of frustrating a little bit. Right. Because you can't standardize things super well in our business. But also the benefit is that keeps the big institutional players out of it to some extent. I mean, they're here a little bit. We all know that. You know, Blackstone and Invitation Homes, we've all heard of those big institutional investors, but by and large, they're a really small player in the overall market size in the aggregate. Tell us about some of those experiences and how you overcame Challenges or, you know, tempered disappointments or anything like that.

I hate to disappoint you, but it's been a great experience so far. And that the. One of the things that really drew me to your organization was that you had vetted the turnkey provider as well as the management company, and you said that you're a champion for your customers. And so I figured, well, that means he has leverage over these people so that if something goes wrong, you know, Jason Harmon and team can ride to my rescue. And so far, I haven't had any issues in the sense of. With the turnkey vendor or the management company. The management companies have been exceptional. You know, responsive, quick, professional. It's great. You know, for somebody who's really busy, this is a great way to invest. Now, I have to say that, being a skeptic, we went outside of your network. We did go to another turnkey vendor. We went to, you know, their place where they did their work. They had this beautiful binder with pamphlets, and we looked at it, and then they went to show us the houses. And it was not what I expected. You know, the thing that scared me is we went to an older house. I was thinking, this. This is a great investment property. They went into the basement, and there was literally a electrical junction box with four wires coming out of one of each side hanging in midair.

Wow.

Hanging in midair.

Yeah.

So at that point, it was, well, we're not doing anything with this team of people. And we went back. We went back to your organizations because I hate to sound like commercial, but they're just quality people.

Yeah. Well, thank you for that. I appreciate that. And we. We work hard on that. And I tell you, we miss out on a lot of business by really being, you know, people in our industry think we're too rigid, you know, and it's a tough balancing act because, of course, we want to have more business, but. And more inventory of properties, but, you know, you just can't cut corners. You got to maintain quality. So I'm glad to hear that. Not every experience is that positive, though. You know, people do have challenges with this stuff, and it's definitely far from perfect. It's just better than everything else, you know, that's all I can say.

Well, yeah, so my threshold may be a little higher than normal, because I have. I deal with a lot of stuff at work, and so I just look at some stuff as. It's the way you get business done. Right. One of the things that happened to us is a year ago on a bit In Memphis, one of our houses, the water heater pipe broke, and the tenant was away for two weeks, and they came back to find, I guess, a stream of water flowing through their driveway. Totaled the house, right?

Yeah.

But the property management company just handled it all. So one tip I have is if your property management company has struck a deal with a local insurance company for landlord, take that local insurance. We had changed that over just a couple weeks before, and because we had done that, it saved us so much grief. Because it was a local insurance company, they had a plan made just for us. They paid our mortgage for several months while everything was being reconstructed. You know, in some ways, it was challenging emotionally, but from a time standpoint, there was very little drain. Management company handled everything. So we were just very impressed.

That's fantastic. So have good insurance. That is definitely, definitely important. Do you know how much that claim was? I'm kind of curious. Did you get involved and see the. The price that the, you know, what the insurance company paid?

I think it was around 55k.

Whoa, that is a big one.

50 or 55k.

Yeah, yeah, that is a big one. But you know what? You got a rehabbed house. I mean, they probably built you a partial, right? Yeah. Right? Yeah, yeah, yeah. Fantastic. And did you. I'm curious, did you lose your tenant during all that time? I mean, where did the tenant stay? Or. Or did they just move the property? And then you had to get a.

New tenant, so the tenant had tenant insurance, and so they were able immediately to move, I guess, to a hotel, a motel or something. And they were great tenants, but we couldn't expect them to wait around for three or four months, so they actually went somewhere else. And then we got another tenant.

Right.

I think the rehab took about five months, believe it or not.

Wow. That is. I think that's the biggest one I've ever heard of. I've never heard of a claim that big or rehab that long. That's pretty extensive.

Well, the water heater was in the attic.

Oh, so it went all through the house.

Yeah, that's all through the house.

That's an unusual design, too. Yeah, definitely. Well, what are your plans for your real estate portfolio? Are you still buying more properties?

We do plan on buying more properties. We'll get up to our 18, because my wife and I are both on our primary. And then we'll just. We're not sure. You know, we may move into notes. We may move into, you know, maybe multifamily syndications. I think investing in hard, real physical assets that Generate cash.

Right.

Is the thing to do coming up. I mean, that is where my focus is.

Yeah.

None of this paper stuff that can evaporate.

Yeah, yeah, no, I agree with you. I mean, no matter what. And I've tried almost everything out there in terms of investments. I just like the hard asset the best. It's the best. And I don't like syndications because, you know, that's commandment number three, thou shalt maintain control. You're violating it because the syndicator can rip you off. And I just got a call from a New York Times reporter about a guy that was out peddling a fund. And it's like a 1.2 billion with a B dollar fund. So it's a big fund. The SEC is all over them now because they, they are alleging that they were running a Ponzi scheme. Those tax lien investments. I did, you know, I filed a lawsuit claiming that that company was running a Ponzi scheme. And now I've been burned on my first first position loan, the first position mortgage. I got burned on some seconds before, but never a first until just recently. And I'm going through that now. We're going to have to take a real haircut on that deal. It looks like, you know, when you, when you hold the paper, there are all these lending rules that you have to abide by and all this stuff. It's pretty complicated, Stu know to navigate that world. And just the idea of buying a house and renting it to someone, that's just simple, you know, it really is a simple asset class and that's what I love about it.

Yep, I agree.

Yeah. Yeah. Good stuff. So do you have retirement plans or why real estate investing? Just to make more money or do you want to get out of the rat race and retire? What's the plan?

So that is at least a huge portion of our retirement thoughts. Right. You know, you have this rent. The rent should track inflation to some degree. I can trust that, you know, 75% of that rent or cash flow will come in and 25% will be for some sort of disbursements. That's sort of the ratio I'm finding. And so that is what we'll use for our retirement. A huge part of our retirement funds month to month. You also get all the other benefits. So, yeah, we're planning on that. In fact, if all goes well, my wife will take an early retirement and, you know, she'll be the one managing the portfolio.

Fantastic. Now, any management tips for people? I mean, I'm glad To hear you're having such a good experience with the property managers, but you also have to manage your own affairs, you know, bookkeeping a little bit, and. And things like that. Any thoughts on, you know, how much time that takes every month to manage the 13 properties, you know, any. Any tools that you're using to do that, property tracker or otherwise?

Yeah. At the moment, we aren't using any external software other than a spreadsheet. I've just made it a habit every Saturday, roughly every Saturday, to spend about an hour going through things. When things come up from the property management company, they come in by email. Deal with them right away, don't let them accumulate or wait. I usually find that that makes things a lot easier. One of the realizations I've come to is that when you talk about the real estate investment mechanism, it's the people that matter. And so what mattered the most to me was from a property management, having people I could trust, that I liked, that had experience. And so that mattered a lot to me. Just from a sleeping well perspective, from a, you know, a bookkeeping perspective. Well, we're using Excel at the moment.

Right.

And I have an income tax accountant that manages all the other stuff, and I just plop the papers on his desk. He's really good, too.

Yeah, that's fantastic. Yeah, good. Good for you. Good for you. The team is. You know, I've said this often. I'd rather have an A team, you know, in terms of the local market specialist and the property management company in a B market, than the other way around. Because the team is so critical. It's just so critical to have a good team of people, including our team and that team on the ground, the boots on the ground, so to speak. So, yeah, that's great. I couldn't agree more. That's very important part of it. Yeah.

When you invest in real estate, I think we really invested in is the people that are on your team. Right, right. You lay the cash out once, but it's the people that really make that investment thing.

Right, right. Including the tenants, by the way. You know, a lot of people don't kind of consider that. And I said this on the show before, I'm sure you probably heard it, but I'll just say it. You know, when you think about it, someone is spending 33% to 40% of their monthly income on your property. And it's literally like you have all of these tenants working for you. You have 40% of a person's income. That is hugely significant. I mean, what other Business can say that they get 40% of someone's income, Right? Apple Computer can't say that. You know, no other, no restaurant can say that. Nobody can say that except a landlord. The landlord gets a third to 40% of their monthly income. It's amazing.

I guess it depends if you consider the government a business. Right?

Well, fair enough. Yes. The government gets a big percentage too, especially if you live in New York or California. Yeah, no question about that. Good, Good stuff. So you and Karen have been married for 33 years, right?

That's right.

Fantastic. And you never thought about real estate investing sooner in your marriage?

I wish I had. I really wish I had. It took a large amount of deprogramming to stop looking at my 401k or the stock market. And in my job I have to deal with data. So I had the choice of listening to the propaganda or listening to the data. Eventually the data won out and it led me down another path. And then, you know, again, learning about the four or five ways that real estate works in your favor is like, okay, this is a no brainer, but is it real? It. It sounded too good to be true. So I was hyper skeptical. Eventually I convinced myself.

Right.

I wish I'd known earlier. The good news, I think it's good news, is that we're speaking to our children. So my son, who's 24 and graduated, just bought his own house and has a renter. So he's house hacking, I guess. My oldest daughter is just buying right now their first property, rental property. Even though they don't have their own house. Right. They're buying a rental. That's how I do it down. Yeah. So that's what we're doing.

I lived at home at my mom's house. I bought a rental property at age 20 and I didn't move out till I was 22. So being a landlord first is very important. That's a good idea. Yeah. Really good, good stuff. Good stuff. Curtis, thank you so much for sharing this great story. I really appreciate it and I'm sure all the listeners will appreciate it. They always love hearing client case studies and listeners out there. If you're one of our clients, and I know many of you are, thousands of you, please reach out to us. We'd love to have you on the show. We always get so much nice feedback on these interviews and people just really appreciate it. So thanks for giving back. Curtis, thank you so much. And thank Karen as well. I know she couldn't be here today, but next time we'll have her on and appreciate your story and just want to wish you a happy investing.

Thank you, Jason, you too.

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