CW 1062 - Client Case Study: 5 Homes in 7 Months & Hurricane Florence Update

If you're that kind of person and you've got the capital and you're a.

Great negotiator, you've got great people skills.

You could probably be a successful flipper.

But it's like a job, right?

If you're not flipping, you're not making money. And that's why I prefer income property, because you just make money every month.

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques 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 listeners from around the world to episode 1062. 1062. This is your host, Jason Hartman coming to you from beautiful Aspen, Colorado today. It is absolutely gorgeous up here with the leaves changing and the air smells like fog. I love the smell of fall air, don't you? So today we have got two things, one negative and one positive. Let's start off with a report from the hurricane affected areas in North Carolina and South Carolina. You'll hear about that from someone who's there living through it. It is getting worse, not better. So I think it's important to have kind of an on the ground update of that and then we will go. The second half of today's episode will be a client case study with one of our clients. And I think you'll find what they have to say very interesting as she will share some of her investing experience with us. So let's go ahead and get started. Welcome to episode 1062. 1062. This is your host, Jason Hartman and I thought I would give you a report from Myrtle Beach, South Carolina. In the wake of the tragic events of Hurricane Florence, the recovery, recovery there has been slow and much to my disappointment, things appear to actually be getting worse, not better. And I've got Phil Jackson on the line with me. He is a resident, can update us on what's going on. Phil, welcome. How are you doing there?

Great. Thank you so much for having us. We really appreciate it. It's Actually, like you said, it was getting worse. The river flooding is coming up, swallowing homes whole, displacing thousands of our residents. So we are just trying to maintain and get everyone in our community the help that they need.

What's the situation with power? Do you have electricity? Is it spotty or what's going on there?

So far, all the homes that are livable and businesses have power. There is power outages in certain places, but the power companies are doing an amazing job keeping that online because that would just add to the disaster that we're already living in right now, right in Myrtle Beach.

I mean, many other areas have been affected as well, but. And I've been to Myrtle Beach. You have a kind of a unique bad situation there, right, with the way the rivers flow now, these. These rivers and the hilly areas that just. I mean, there were trillions of gallons of water that were dumped, and now you haven't even reached the point to where these rivers have crested yet. Is that correct?

Correct. To the north of us, they have crested, but all that water is moving south. And the way Florence track was, you know, it came in from the east and actually moved south and then northeast. So it just dumped 20 plus, sometimes 30 plus inches of rain in the border belt. And in North Carolina, which all that water feeds down to us, and it basically goes out of Georgetown, South Carolina, which is about 20 miles south of us. And we have a bunch of rivers that lead through our communities, two to be exact, the Waccamaw and the Intercoastal Waterway. And those rivers are just flowing this water. And we have the Pedi river and the Santee river. And all these rivers are just coming to a head here and kind of bottlenecking right here in Myrtle beach and south of Myrtle Beach. So the water is up 26, 28ft in some places.

Oh, my God, that's amazing. Try and paint a picture for us of what that looks like when you're talking about flooding. I mean, like, what percentage of the streets are drivable? Just give us a kind of a picture of that, if you would.

A lot of people have taken a boat down a river, and, you know, they've seen houses and homes along the rivers, some with embankments. And just picture a dock being above a roof line on a house that's located on the river. That's what's happening. Docks are actually releasing from their poles that are drove into the ground that they're secured to, and then that water is coming up into the neighborhoods that are along the river. And there's a ton of houses that are 2, 3, 4 and 5 streets off the river that are flooded out. So it's basically the same. It works the same way as a title search, but just on a river surge. And you can drive boats in neighborhoods and there are people kayaking and canoeing to get to their properties to check on them.

When they're driving boats and kayaking and canoeing to get to their homes to check on them. What are they seeing? Are they seeing just the roof line of their house? Are they seeing the eaves, the doorways and the windows or what?

The ground level homes? Yes. And the homes that are up on stilts, A lot of them. The first floor is completely covered in water. So it looks like that it's a single story home, but they're actually two story homes and they have stilts.

So not only is the water above the stilt level, but it's up into the first floor. And then there's a second floor home. You know, of the home on stilts, right?

Correct.

That's unbelievable. That's just.

And then they have shut down all river traffic. No boats are allowed to the river unless it's rescue or dnr. And because the wake as well, so you have some homes that are literally inches away from it going into their home. So if you added a boat wake or even a vehicle driving down a street and creating a wake, that can make the difference of someone's house being saved or completely flooded out. And you know, it sounds minor, just a truck driving down a flooded street, but in reality, those couple inches could really make a difference.

Oh yeah. Because if the water comes in or out, it's a whole series of problems with water, you know, mold and just damage. It's incredible. You know, water can't be compressed. You know, it's already as compressed as it can be. You know, it's not like a gas.

And I tell you what, this community, I'm so proud of this community because everybody has stuck together. We are. Our school districts are unique here as well. Where one district, both Georgetown and Horry County. There's one district, Georgetown county and Horry County. So, you know, there's two districts, but the entire district is closed at this time. So we're going On, I think, 23 days that the kids have not been in school. And I tell you what, two of the area high schools, three of the area high schools, I'm sorry, have been sandbag drop off and fill locations. And it's amazing to see how many kids are out there actually. Filling sandbags, delivering sandbags. At St. James High School yesterday, there was about 400 people filling sandbags and another line of about 100 trucks delivering them. Just filling their truck up and just going into neighborhoods to see some deep sandbags. So everybody is pitching in to try to save as many homes as possible.

Yeah, the stuff like that. Whenever you have these natural disasters or, you know, disasters of any type, it really is heartwarming to see how great human nature can be and how people can bond together and, you know, work for the greater good. That's just a wonderful thing. It's wonderful to hear that. What can people do for you, Phil, and what charities and aid organizations are helping you there? You know, you're on the ground, you're seeing it firsthand. It's one thing to, you know, see it on the Internet or hear about it on tv, but you're right there. I mean, who's really helping and what can the listeners do if they want to help?

Well, you know, the Triton Relief Group has really stepped up in our area and they're actually, we partnered with them and this morning. It came as an idea last night, about 7pm to open up a distribution and donation center. Andy Kemp from ANA Produce, which is where I work, has, you know, contacts in our neighborhood and secured a warehouse, 10,000 square foot warehouse for us. Along with Marnie Kennedy and a couple other volunteers, we have opened up SC Needs Help distribution and donation center. And we currently are getting. The local cable company is bringing us a phone line, Internet service, we're getting dumpsters out here. And we are filling up this 10,000 square foot warehouse full of donations. And the Triton Relief Group is sending it out to local communities and local hotels that are housing people. And there's a hotel downtown called Midtown Hotel. And he has opened up his entire hotel for free for the evacuees. So currently he has 300 people staying in his hotel and it's absolutely free. And so a lot of these efforts are being trickled down to that place and several other shelters and hotels to get those folks the stuff they need.

Yeah, it's great to hear that people are helping. On the negative side, have you seen or heard about any scammers? You know, whenever there's a thing like this, you get great stories of great people pitching in and helping out. But you also get a lot of opportunistic scammers that are, you know, going and siphoning off funds and promising repair work. And they're not really doing it. I mean, the scams are Rampant. Have you seen or heard anything about that kind of stuff going on miraculously?

No, not yet. And I think the reason why is because we do have such a strong community that people, if someone tries something like that, the words out, you know, and then there are people to step up and just put a stop to it and even approach these people and take it upon themselves to say, hey, you know, you're done. It's not going to happen here. Obviously, once the flooding recedes and everybody look, you know, everybody wants to help and everybody wants to make money and they see all these opportunities, I believe that's when those things are going to come about even more. But people are even just scared. It's hard to even get in town right now. So a lot of those people that do that from out of town are not coming in town yet. But I do foresee something like that taking place. But like I said, we got to jump on that and I think that we're going to try to keep that at bay as much as possible.

Yeah, yeah. Excellent. Well, Phil, thank you so much for sharing this and you know, you are in our thoughts and prayers and we wish you the best. There it is. Really, really tragic. You know, you think the hurricane is the terrible part, but it's really the after effects, usually the most devastating, right? Is that correct?

No, it is correct. In living in a beach town and growing up here my whole life, I've been through Hugo and Matthew and Floyd and Fran and just family members. We're through Hazel and everybody that has been through it, they know that it's not the hurricane part. You know, you can have a Hurricane Category 3 come in and you're fine at your house, you may lose power, you may lose some shingles, maybe a window, you're fine. But it's the couple weeks after that really test you. And that's why people evacuate. Not to get away from the winds and the rain, but it's to get away from the flooding and the aftermath of not having power for weeks and bugs, mosquitoes, food shortages, gas shortages, things like that. So I think a lot of people need to be aware of that. You know, not running from the actual storm itself, you're running from the aftermath.

Yeah, yeah, that's absolutely true. Well, Phil, again, thank you for sharing what's going on there. We wish you the best. Just keep the faith and keep doing your thing. And thank you for being involved and contributing to the solution for everybody. We appreciate it.

Awesome. Thank you so much for having me.

Hey, we always get great feedback when Someone comes on the show, one of our clients, and does a client case study. We had another volunteer recently, and I'm so glad to have her here. Her name is Diana Dine and she lives in Colorado. She recently visited some of our local market specialists in Mississippi and Tennessee. We're going to talk about that and just give her a warm welcome. Diana, thanks for coming on the show. Appreciate it.

Well, thanks for having me. I'm excited to talk to you.

Yeah, yeah. It's good to have you. So just give the listeners a little bit about your background. You live in Colorado. What do you do for a living?

I am in the financial services industry. So that's always been kind of interesting that I kind of went this direction. But yeah, for over 20 years, I've been in the financial services industry. More like corporate side, product management.

What do you mean? Are you helping big companies invest their treasury funds or what kind of stuff?

So more so on retirement planning. So it's not so much of. I don't see clients I help with kind of the back side of how the products run for the retirement. So individual retirement account, small business retirement account.

Fantastic. Good stuff. Yeah.

And I have a team that helps me do that there. The company.

Okay, great. Good, good stuff. So what got you interested in real estate and how long ago did you become interested in the real estate investing world?

So my commute is really long. It's close to 100 miles round trip when I go to the office. So I wanted to have a good job and also support my kids and keep them in an area that they were really comfortable with. I got a divorce a few years ago, and it was trying to balance providing for them and also keeping them in a happy environment. So I took a job pretty far away. And so with that commute, I started listening to podcasts and books and just trying to use that time so I didn't stress out on my drive on I25. So I just started listening to podcasts and I came across yours. And just for a year, I think at least a year, I just listened and thought, well, you know, this is really interesting and I like to hear about more of the what's going on politically and economically. But I always thought real estate investing is kind of out of my realm. It's not something that I was really familiar with. But I would say after a year of listening to your podcast, and I can't remember which one, but the light bulb just went off, like, I can do this. You know, there's ways to do it. I have money that somehow I can figure out how to use it. And I just didn't want to do that drive and have that corporate life forever. So I'm like, I got to find a different way so I can have some flexibility to be there with my kids and be able to provide for them. So that's kind of how I got involved with deciding to go down that real estate venture.

I know you mentioned, Diana, that you can't remember what episode it was. That sort of was the seminal episode. I guess that made you interested. But do you remember what the reason was or the, like, the topic or anything? I mean, I know you wanted to avoid the commute and probably want to have more time to spend with your kids and so forth. Of course. But was there a particular thing, Was it another client case study maybe that inspired you or a particular angle on investing or something? It was.

I think it was the client studies. I couldn't remember which one I was listening to. But he also was just trying to figure out how to support his family and different way of doing it. And he's pretty sure he's a lot younger than me and started with a young family. And I remember his kind of journey, and I'm like, well, if he can figure it out, I can figure it out. And that's when I went ahead and called Sarah. I talked to Sarah, right? She was mentioning, and it was toward the end of last year, so all this happened pretty recently. And she said, you need to go to meet Masters. And I'm like, sounds great, but am I brave enough to go all by myself to meet the Masters? And she's like, yes, you can do this. I make my dad go, it'll be great.

I'll be there.

And I'm like, okay, I'll go to meet the Master.

I love it. That's a great story.

Yeah, I know. I scheduled my flight and registered, and off I went.

Okay, cool. You talked to one of our investment counselors, Sarah, and then you flew from Colorado to San Diego and came to our Meet the Masters event. So it was great to have you there. And when did you buy your first property through our network? Was it just recently or a while back?

I hadn't purchased anything until I went to meet the Masters. And I did a little prep work to make sure that I was ready with. I did a refinance on the house and thought I could use cash out on that on a property or two, but I didn't really realize when I went to meet the Masters, just all the great information and all the ability to chat with the local market specialists, and you had them up there to kind of explain the different areas and their expertise and their local markets. And once they did, that's when I felt really comfortable to start walking up to the different tables. And I walked up to the Jackson, you know, Jackson, Mississippi, to look at those properties, and they talked to the local market specialist there. And I'm like, okay, I'll take this one in this one. I think I can do this now. I. I'm like, I can do this, you know, so that's kind of how it started. So I committed to buy two properties there at Meet the Masters, and now I just closed on my fifth property on Tuesday, and I have the two that I have in Jackson and I have three with in Memphis.

Right? Yeah. Good. Good stuff. Good stuff. So you actually traveled to both markets, I believe, right?

I did in August. I just really wanted to. I've never been to either place, and here I am buying properties, and I just felt like it would make me feel better to go out there and meet the team, see the areas, see my property. I'm going through their property management, so I wanted to meet them, make sure I felt comfortable with the team. It was really fun.

Yeah, good. Good stuff. So you actually bought the properties and then you went to the markets, right?

I did for four of them. And then when I was out looking in Memphis, it was very clever to show me more properties. And I'm like, okay, I should get this one under contract on the fifth one. And that's the one. I just.

Good stuff. So you got a fifth property while you were there. Fantastic. How were the local market specialists when you went there? You know, tell us about your experience visiting with them and so forth.

I had, like, the plan. I. One of my girlfriends, I said, let's make this a girl trip and let's go see my properties and go to Memphis and go to Graceland and all that other stuff. So she was game. So I drug her along with me, and I sent out emails to both the local market specialists and saying that I was coming out, and they both were fabulous. Say, okay, we'll roll out the red carpet for you. And I told them what days I'd be there. And I first went to Tennessee and Memphis and met the local market specialist there. And he took us around to see my properties to kind of tell us about the area and the growth and kind of gave me a nice background to everything. And then, of course, you know, got a little yummy barbecue there. You know, they Brag about their barbecue in Memphis.

So they are pretty good, for sure.

Yeah, exactly. And then I met the team, the management team, and so that was pretty much a full day of doing that, and very nice. And like I said, he also showed us some newer properties that they were just finishing the rehab on, and I just really felt like one would be a great, great opportunity to add to the portfolio.

Yeah, fantastic. Good stuff. I always like to ask, and you're probably not prepared for this, so forgive me if I put you on the spot, but do you have any questions or concerns about investing that I can answer? Because whatever questions you have, everybody listening probably has the same exact questions. Or do you kind of feel like you're on the road now and you're moving along and you've kind of got all your questions answered, or are there any remaining that you're thinking about now?

I would say I was pretty nervous when I first started everything I did. I was like, am I doing this right? And I would just ask them, you know, going through the mortgage. Went through the same mortgage company for all of them and worried about what I was fumbling through. And the insurance, I'm like, oh, yeah, I got to get insurance on these, and I gotta figure this out. And so. But now on the fifth one, I felt pretty comfortable. I knew what I was doing and how I was going about it. But I would say that some of the concerns I have would be. And you were just talking about this, about interest rates going up a little bit more. And I noticed from my first property to do, my fifth property, it did go up, although, you know, my credit score and all, that's really good. It just the rate the mortgages went up. And so part of me is like, do I hold off and to see how things go for a while, or do I continue to buy and, you know, and kind of like juggling where I go next, you know, from here.

Yeah. Good stuff. So. So now you really learned it by doing it, right? And this is what we find over and over, Diana, is that there are some people that are new to it, and they're sitting on the sidelines and they want to learn everything first. And they'll spend years going to conferences and reading books and trying to learn all about it. But the real learning comes from action. It comes from doing it. I don't know. It's just human nature. We all bring a different us to the table right when we're really doing it. So the first few properties, it sounds like you were. You had concerns and questions and then when you got to the fifth one, now you're kind of a pro, right?

Well, I wouldn't know about that, but close. I felt much more comfortable, that's for sure.

Yeah, absolutely. Good stuff. So what are your plans for the future?

You know, one of the things for Meet the masters that you, you actually had them go up on their five year plan and I, I had my five year plan in figuring out my properties and what I'm going to do and I feel like I'm ahead of the game on my plan because I, I kind of took a more conservative approach. Like okay, two properties this year. Two properties. And in so many years and five years I'll have what I need. I relook at that. And you know, like I said, I have five properties already within like seven months. And I do want to get to the 10 properties but I have my nine properties that are investment properties that I can do. So that's my plan to do that. And then I'm not sure what to do after that. Do I switch them out, how much time goes by? So I guess my have to relook at things and figure out the next steps after the 10 properties.

Yeah, absolutely. So 10 properties is sort of your first goal right now. Do you have an idea as to when you will retire from your job at how many properties will it be? 15 or anything in mind there?

So if I continued to do the single family homes, I think I came up to like 20 properties that I would need to replace income and quit the job.

The listeners should know these are inexpensive properties. You know, maybe you want to mention like what's your average price of the properties you purchased so far?

Sure. All properties, give or take are right around 100,000.

Okay, so give or take around 100,000. So the five properties is 500,000 in value and you're in two markets, so you're nicely diversified so far. And did you just say 15 properties would be kind of the retirement metric where you could leave the corporate job?

It was 20.

Oh, 20. 20. Okay, so 20. And that will give you X amount of cash flow. And you know, you know from listening to the podcast, there's a lot more to it than cash flow because it's a multi dimensional asset class, which is the wonderful thing about income property. Yeah, good, good stuff. When do you think you'll get to the 10?

I'm thinking next year.

Okay, good.

Yeah, just trying to figure out what I'll need to do the next group and have my 10 by next year. That's My first step now you're in.

You'Re in Mississippi and Tennessee so far. Do you have your eyes on another market or two more markets for the next properties?

I was thinking Indianapolis.

Yeah, Indianapolis is great. Good, good stuff. Good stuff. We also have good stuff in Florida and, you know, Little Rock and some of our other markets. So that's great. But yeah, Indianapolis is great. And then you will be diversified in three markets. Now, before you started investing in real estate, in the income property, did you ever own your own home before?

Yes, yes, I've always owned my own home.

So you're familiar with real estate in terms of buying your own place, like your place in Colorado, but these were the first rental properties that you purchased, right?

Yes, that's correct.

Good. Good stuff. Good stuff. Good. Well, hey, thank you so much for sharing your story. I really appreciate it. Are there any thoughts or questions or anything else you want to share with the listeners? But we really appreciate you sharing.

No, I think we've covered it. Thank you, Jason. This has been fun.

All right, well, thank you so much, Diana. Appreciate it. And happy investing to you.

Thank you. Foreign.

I'm Jason Hartman and I'd like to invite you to our very first two day conference in beautiful Hawaii. Many of our attendees are making a vacation out of this event. You will learn the most innovative strategies for real estate investing available today. We have helped thousands of people invest in properties around the US and we can help you do it, too. So I hope you'll join us. And happy investing. Thank you so much for listening. Please be sure to subscribe so that you don't miss any episodes. Be sure to check out this show's specific website and our general website, hartmanmedia.com for appropriate disclaimers and terms of service. Remember that guest opinions are their own and if you require specific legal or tax advice or advice in any other specialized area, please consult an appropriate professional. And we also very much appreciate you reviewing the show. Please go to I itunes or Stitcher Radio or whatever platform you're using and write a review for the show. We would very much appreciate that. And be sure to make it official and subscribe so you do not miss any episodes. We look forward to seeing you on the next episode.