85 Homes Bought Sight Unseen! Unlocking the Secrets of Section 8 Real Estate with Ryan Mitchell!

What's up everybody? Welcome back to the New and Experienced Investor Podcast, the podcast that brings real estate investors from all walks of life together. I'm one of your hosts. I'm Alex Barnett. I'm the new guy.

Welcome. I'm Joe Homs, and that makes me the experienced guy.

That's right. Lots of experience over here.

Okay.

This guy's experienced. Um, we're really happy today. We have a big-time guest. I don't want to give it away, but his name is Ryan Mitchell. And before we bring him in, um, let's talk about our meetup really quick.

Monday, this coming Monday, because we got rained out last Monday.

I wouldn't know, I wasn't there.

There was actually a few people there that called me, but you know, see, I'm sorry, I, I sent out 3 emails You try. We postponed it for a week, but anyways, if you missed it, you didn't miss it because we'll be back, Hangar 24, Monday, 6 o'clock, with our guest speaker, by the way. So if you're not looking at this, uh, broadcast, this podcast today, you can show up on Monday and ask him questions live and in person. I don't know, I don't know who is not looking at this podcast because Like I was saying earlier, we're we're right. We're ranked right underneath Joe Rogan. I know in this podcast.

It's insane.

Yeah, we got people offering us so many people hundred million dollar contracts.

But I think we're just going to end up staying independent. So don't worry, we're going to stay the same. Yeah. And so today it's it's we're we're pretty excited because our guest he. He went out and bought 85 houses in Alabama, sight unseen, and he's turning 'em into Section 8 housing. The whole story is pretty crazy, so stay tuned. And also, if you guys aren't gonna make it on Monday and you wanna ask some questions, jump into the chat and drop a few questions in there and, you know, get 'em answered by an expert. But let's not waste any—

We're really excited.

I'm so excited.

Yeah.

Yeah.

And before we get to him, I want you guys to do me a favor. Go on my YouTube. Okay. youtube.com/joeholmes. Search for the video on eviction. Okay. There's one video in there in particular. We did, we've done a few, but there's one video in particular. It's like blowing up right now. Please watch that and please comment.

Okay, Joe's going viral.

I'm going viral. Yeah, please, please watch it. Please comment.

Perfect. Okay, well, let's go ahead and bring our guest in. It is none other than Mr. Big Time, Mr. Alabama, Mr. Ryan Mitchell. How you doing?

I'm doing good, thank you. Yeah, I came a long way.

He did. Yep, he came about 6 feet.

Yes.

Yes.

He's got the office right here next to me to the left. So it was a big drive for him, but he made it.

I mean, yeah. Yeah. I mean, he's usually very busy, so we appreciate your time. And I know that, you know, hours, you gotta, it's like it's all, it's all money. It's all money now. So yeah, we appreciate it. And let's go ahead and jump into it. Why don't you let everybody know how you got into real estate? Just a quick little intro and then we'll jump into the amazing juicy details.

Yeah. So I got into real estate 10 years ago now. Maybe most people know, but I'm Joe Homs' son-in-law. So I had a good intro. I got the fast track from day one when I got my real estate license and jumped right into flipping houses. So flipped over, gosh, it's probably up to 150 houses now in Southern California. And, um, you know, the reason I got into rentals— I have a couple Airbnbs, but, you know, flipping is very transactional, which most people know. And we're all looking for that retirement one day and passive, if you can call it passive, that passive income in retirement. And, uh, that's what the Alabama rentals were for me. So.

Well, it's kind of passive for you because you have an assistant that's doing everything, and I see her over there. You know, so it's pretty passive.

Yeah, you should just try like not showing up for like 45 days and not tell anyone.

That's the goal.

She talks to him every day. Yeah, I hear them bantering back and forth. Well, what do I do about this? Well, yeah, don't do that, but do this.

Yeah, that's pretty passive.

So how did this all start with Alabama? I mean, yeah, I, I don't think I've even heard the story of where it started and why it started and why Alabama?

It's not really a story. I mean, I, for years now, I've researched what long-term rent strategy I wanted to go into. There's so many things out there. There's, you know, multifamily, there's storage, there's mobile homes, there's all those things. And I looked at every single one of them basically. And I was looking at what I wanted to do long-term. And back in 2013, we actually worked with a hedge fund that was buying single-family homes. And, you know, they're on to something. You know, these, these big hedge funds are still buying hundreds, hundreds of thousands of homes, I think is what they own now across the United States. And they're all single-family. They're not buying multifamily. They're buying single-family homes. So looked at single-family and obviously in California does not pencil. You cannot make cash flow in California. And just researched a couple of different markets across the nation and found Alabama, came across Montgomery and Birmingham. Because the property values are so low, you can buy properties under $100,000. Our average purchase price for the houses that we own now is around $50,000. And those houses rent anywhere from $900 to $1,300 a month. So the return is unbelievable compared to any other sector out there. So that's why we're in Alabama.

And, and who are you renting to?

Well, we're, we're purchasing these properties. Most of them are already rentals, so we have normal renters in there. And our goal is to change everything over to Section 8. Section 8, if you don't know, is a government-subsidized program. They pay the rent or subsidize the rent. Sometimes it's 100% of the rent, sometimes it's 50%, but depending on the tenant's income level compared to the average income in the area. Section 8 gives them a voucher amount. And like I said, sometimes it's 100% to go rent a house. And Section 8 pays about 10% more than market depending on the house and the neighborhood, sometimes a little bit more. But it's nice because it's higher than market rent and it's guaranteed. You have to jump through some hoops with the standards that Section 8 has. But overall, it's a good strategy.

So, you know, let's back up a little. How do you buy 85 homes? I mean, do you have 85 real estate agents that you worked with? Uh, what did— what was that process?

Yeah, so you can go out and buy individual houses. It's going to take you quite a while to get up to a decent amount. You know, these are $50,000 homes. So if you buy a house in Southern California that's, you know, $500,000, you're going to buy— you buy 10 out there. So We focused on buying portfolios first, or mainly. I like buying portfolios. So these 85 homes is really 4 portfolios that we purchased. Portfolio is basically a group of homes that another investor accumulated over the years, and they're going to sell those houses as a package deal. So that's a portfolio. The first one we bought was 31 doors. I think it was 27 properties. There's a couple duplexes mixed in there. So yeah, we buy Portfolios mainly. So it's a group of houses that we can come in, get a portfolio loan, that there's lenders that specialize in lending on deals like that. And you can grow our own portfolio really fast that way, rather than having to go out and buy single houses.

So talk about the difference between buying something here. And obviously buying something there, you're looking for mainly cash flow. You know, because $50,000 in a good year in California, you can make that easily in appreciation, which is what we are, an appreciation state.

Yeah.

So that's kind of what you're looking for there is just the cash flow model.

Yes, absolutely.

Yeah.

Every market is going to give you different things. You know, some people invest for appreciation, some people invest for cash flow. Best case scenario, you get both. But yes, we wanted strong cash flow is what we were really looking for. And the cash-on-cash return that we find that we get, you know, buying a $50,000 house, you really can't get anywhere else. So yes, the Alabama market probably won't appreciate as fast as most other markets. I think it will go up, but it's going to be a slow, you know, process to get up to, you know, these houses being worth $100,000 or $150,000. But yeah, we're investing solely for cash flow.

And when you're buying these, are you doing your due diligence on these properties? Are you having a home inspection? You know, all the normal stuff that you would do here if you were buying something here?

Yeah, we're doing the normal stuff. We hire a professional home inspector. We look at every single property. I do what I can. You know, with technology these days, you don't really have to be there. You can look on Google Street View. Pretty much 100% of the nation is on Google Street View. And you can drive a neighborhood and get a feel for it just from your computer, 2,000 miles away or whatever we are. So yeah, between having a good property manager, home inspections, and a couple of good contractors, we're doing the same exact process buying houses there that we would here.

Okay. And you mentioned property manager. So you do have somebody that you hired. Um, is that going to stay in place for a while, or is your assistant over here going to take over that process?

For now, yes, we definitely have property managers in place, and we're always going to have property managers in Alabama. What we may change— right now we're hiring independent property managers. Most of the portfolios, when you buy one, there's already a property manager, so we're kind of inheriting that property manager. Whether they're good or bad, we deal with it. And we may change to other property managers that we like in the area. So yes, property managers, definitely. The goal is to hire property managers independently and have them on payroll, essentially. Once you get up to— in Alabama, once you get up to maybe 100 homes, you're paying enough in property management fees to actually go hire someone full-time. maybe even 2 people full-time. And then, you know, as you grow your portfolio from 100 to 200, 300, however many homes you want to buy, that, you know, property management cost is fixed rather than growing with the portfolio. So that's the goal eventually. But, you know, this is relatively new for us. So we are using professional property managers that are established in Alabama.

What do they charge you? Do they charge you a percentage?

8 to 10%.

8 to 10%.

Yeah. So it's I mean, it's a little bit higher, I think, than in California just because the rents are lower. Obviously, our average rent is probably $800 a month now. So we're paying, yeah, $80 a month per property.

Yeah. And where does that— you know, you were talking about just hiring somebody full-time. Where does that break even? You know, how much does a property manager have to make if you hire them full-time?

Well, in Alabama, You know, salaries are probably a little bit lower. I mean, that's a good question. That's, that's the things that, you know, we're going to work out as we grow. Right now we're focusing on stabilizing our portfolio. We're doing a lot of rehab. There's a lot of turnover to get these properties performing to the maximum, to the best of their abilities. And then we'll probably worry about doing that stuff. But I know, you know, someone in Alabama, maybe a good payroll for someone or salary for someone might be $36,000 a year. I think that's probably relatively good for the area. So yeah, the break-even point, you know, you can do the math, but I think I did work out the numbers. And once you get to 100 properties is where it might make sense to hire someone full-time. But then they have 100 properties they have to take over. So it's definitely going to be a transition.

And all these properties, like in a local area or how far are they spread apart?

So we own properties in Montgomery and Birmingham. So they're, Those 2 cities are about an hour and a half from each other. But in Montgomery, the properties, Montgomery's not a huge city. You can drive the entire city in 30 minutes. So they're relatively close together.

Okay.

What about, I mean, I'm assuming all of these weren't vacant. So when it comes to inheriting the tenants, you almost have to do your own due diligence on that as well, right? Or were they already Section 8? So how are you transitioning ones not from Section 8 to Section 8?

Very few were Section 8 when we bought them. Yeah. So looking at the rent rolls, obviously you can find out if tenants are behind. Any past due balances would be, you know, on there as part of your due diligence. But again, right now we're really focusing on, you know, there's a handful of properties when you buy a portfolio that are going to be vacant that need work. So That's been taking up a lot of our time recently is fixing up those properties, placing good tenants in those. So once we get the portfolio close to 100% occupied is when we're going to go back and look, you know, what tenant is paying the least amount? Can we raise the rent? Should we ask them to leave, move a Section 8 tenant in there? It's always better to raise the rent on a tenant rather than have them move out and have to replace them because you're going to spend $5,000, $10,000 fixing that property up. So that kills your cash flow right away. So we're doing it strategically. If a tenant were to move out voluntarily, Then 100%, we're going to go and fix it up, Section 8 it. But right now, we're focusing on getting the portfolio completely occupied, and then we'll go back and go through and try to raise rents.

Wow. That seems like a lot of moving parts.

Is there, when you were buying these things, is there a secret portfolio company out there? How did you find this company?

So The portfolios that we've purchased so far have come from different places. You can look on LoopNet or CREXi or any of those, you know, commercial real estate sites out there because it's considered, kind of considered commercial real estate. But if you go under single-family, or I think it's actually under multifamily, and you filter for single-family portfolio, there's a special category specifically for portfolios. So that's where I started looking. I found the first one from, from, I think it was— Possibly LoopNet, I believe, met that broker. And that broker works for a company that that's all they do is they source listings that are portfolios and sell them across the nation. So they're a nationwide brokerage that specializes in single-family portfolios. They do a lot of build-to-rent. It's a big sector now. So they work with the developers and find the buyers for them. One was from A wholesaler actually had a portfolio of 14 houses that we purchased. So 2 were from websites like that, CREXi, LoopNet, and 1 was from a wholesaler.

Nice.

So obviously, you went out there, you spent like 6 months in Alabama walking the streets and looking at every property, right? Is that right? Or how did that work?

I have not been to Alabama in 10— well, let's see. Yeah, almost 10 years. Oh, my, my sister graduated from the University of Alabama, uh, back in the day. So that's the last time I was there. Oh my God. So no, I did not, uh, I did not go.

Isn't that scary though, that you've never been there? Or how do you get over that fear?

I mean, I guess through flipping properties and being in real estate for 10 years, you kind of get— I mean, I flip properties now in Southern California that are a 2-hour drive that I don't even go see. So I'm kind of used to it, I guess. I think a newbie probably wouldn't be comfortable doing that. But it's nothing to be afraid of. I mean, it's a house. As long as it's standing, it's no different than a house in California or anywhere else in the nation. As long as you get a home inspection and talk to property managers, real estate agents, whatever, about the area. Montgomery and Birmingham is not the safest area in the world, but you For a $50,000 house, you know, it's kind of what you expect. But, uh, no, I have not been to Alabama. Don't really plan on going there anytime soon.

Okay.

Um, but eventually I will go. I was thinking, I was like, okay, let's get to 500 houses or something and then I'll go to Alabama. So yeah, try to set like some sort of goal before I go out there.

Okay. Yeah, that makes sense. Yeah, that makes sense.

Let's talk about financing. So, I mean, are these purchases cash or is there financing? And I know banks don't do loans less than $100,000. So if you're buying something for $50,000, are you combining a couple together? What does that financing look like?

That's a good question. So—

I only ask good questions.

It's uncanny.

Yeah. I've worked with Kiavi, who used to be lending home for a long time, flipping properties. And I didn't know that they did these single-family portfolio loans. So a single-family portfolio loan is for 5 houses or more. It has to be 5 houses or more because that's when they get past, you know, residential. It's 5 properties. And yeah, so we're on a portfolio of 5 or more houses. We're buying 14 houses, then we just get a portfolio loan right away. But we have purchased about 18, 18 to 20 single properties from real estate agents as well.

Wow.

So we have done both. We didn't only buy portfolios, we bought single properties too. So those ones we do pay cash for, we pay cash for them. And once we get up to 5 properties or 5 or more, we go in and refi them through the portfolio loan.

Mm-hmm.

So portfolio loan is just like any other.

It's—

I consider it's pretty close to hard money. They're not doing, you know, full income checks and all that stuff on me. It's, it's really asset-based, just like a hard money loan. They do appraisals and it's actually really easy to get a portfolio loan, surprisingly.

So rates, points.

The rate is lower than hard money, but probably a little bit higher than a conventional 30-year loan. I think the rate for the portfolios right now are around 8% and 1 point. The costly part is that the lender passes on a lot of their legal fees to you and obviously the appraisals. So an appraisal per property, you know, could be $400 to $500 per property. You got to pay for all of those. And then, like I said, they do pass their legal fees on to you. I think the last loan we did, there was about $5,000 of legal fees just for their attorney. They hire a third-party attorney for whatever reason to draft all of the loan documents, the deeds, and do their own little internal due diligence.

Got it.

Wow.

Okay.

So are you putting your own money? Are you paying upfront to get these properties and then you're refinancing, or are you using any outside partnerships to acquire this?

Yeah. The beautiful thing is that I don't have very much money of my own money invested in this. We've, through different partnerships and friends and people that we know, have raised the funds that were necessary to buy all these properties. And that's where the strong cash flow comes into play, because normally you couldn't go get a hard money loan for, say, 75% of the purchase price and then also borrow the 25% at a relatively high interest rate and still cash flow. But these still cash flow doing that. So we're concentrating on buying as many houses as possible, as quick as possible. So yeah, we have to do that with with other people's funds. So yeah, we are borrowing money for that 75%, and then we're also borrowing the 25%, uh, down payment from, from people.

Are you just, um, basically making another loan, or, or are they a part of the deal and they get equity? How are you structuring that?

We've done it different ways because with 80, 80 houses, we've purchased multiple portfolios. So with the first portfolio, we made the investor a partner. They own 15% of the portfolio, and then I have another partner. So we split the, the 85%. Um, some of them, they are not a partner. And yes, we're creating a new second position loan. Um, so yeah, we're doing it both ways. Yeah. To make it happen.

Yeah, that's it. Gotta get creative.

Absolutely.

What about, I mean, are there any portfolios that you've come across where they're offering some seller financing or anything like that?

We're actually in escrow, um, closing a portfolio that is seller financed. Oh, yes.

What are the terms on that?

Um, pretty similar because, you know, I told them what— well, they offered something, but it was, it was similar to what, you know, a lender would, would provide. 25% down, uh, the interest rate was 7%, but they only wanted a 3-year term. So I have a 3-year balloon, but Our strategy is to probably refinance these in a couple of years anyway when interest rates eventually come down to a reasonable place because most of our loans are between 8%, 7% to 9%. If they come down to 5% or so, then we'll refinance the entire portfolio, which hopefully will happen in the next couple of years.

Yeah.

So I'm guessing by the end of that 3rd-year term, we'll have already refinanced and been Been done with it.

Pull some cash out, you think?

I don't know if there's going to be cash out just because, like we talked about, the values don't go up a ton. So the values might end up staying around the same. And then the lender is going to come in and offer us the same 75% loan. So there may be a little cash out if the values jump up a little bit.

I guess if you get a better rate, then the monthly will be better. Yeah.

Then our cash flow will go up. Cash flow will go up. The cash out— may or may not be there. We might not do these big cash-out loans until 10 years down the line.

Who knows? Nice.

I do think the values of the properties are going to go up. I mean, it just can't stay low that long in Alabama. I mean, you can't build a house— we're buying these houses like way below replacement costs. I mean, it would still cost— I mean, building costs don't vary that much across the nation. It's still going to cost Probably $200 grand to build one of these houses that we're buying for $50. So if the value of these properties gets up to replacement costs at any time, I mean, that's a 4x equity jump. So hopefully, it'll happen someday.

There you go.

Okay.

So you're not using any of your own money. You're not going out there. It's all sight unseen. How can somebody do this? How much experience do you need to jump in to start doing this?

Again, because I have experience, it's not as scary for me, but I can definitely see how it could be scary for a first-timer. I'm doing that. But if you have a good home inspector and, you know, we met all these people just going through this process, you know, vetting people on Yelp and finding home inspectors and talking to real estate agents, you know, you have to do your legwork first. Before you just go out there and buy a property. But, you know, we're trying to buy relatively turnkey properties. We're not buying fixers. We're not doing heavy, heavy remodels. We are looking for turnkey properties for the most part. Of course, in a portfolio, when you buy 30 homes in a group of homes together in a package deal, you're going to get some that need heavy rehab. But all of the single properties that we purchased, for the most part, they are Pretty turnkey. So that's what I would focus on if you know you're a new person trying to buy houses out of state. Don't buy heavy fixers. It's it's very difficult to deal with rehabs this far away. Finding good contractors is always difficult. It's the same here in California. It's no different. It's actually even harder out there to find good quality work and good contractors. So yeah, buy buy turnkey properties. The the beauty is is With this strategy, buying in different markets, you can research— there's other markets that we had our eyes on. We just ended up settling in Alabama. Is that you can cash flow buying retail properties. You don't have to buy fixers and get creative. It's not like California where you have to buy something 50 cents on the dollar and rehab it to try to squeeze out a cash flow. You can do it buying turnkey properties. So someone wanting to get started, focus on that and do your research. And it's not as scary as it sounds.

Let's talk about the scary stuff. Let's talk about the good, the bad, and the ugly. Let's talk about the bad first. What, what, what, what has bad been like?

Finding the contractors is difficult. The worst thing that has happened, which actually turned out to be a good thing, is that one of our properties burnt down. Actually didn't burn down. There was a fire in the property already. It's probably about less than a month after we closed escrow on it.

You giving that house away still?

Yeah.

You can give it away here on the show.

We can auction it off.

Yeah. All right.

So we purchased this property for $65,000. Um, another thing is to have good insurance. That's always— whenever you're buying real estate, you have to have good insurance. Make sure you're covered for the full value. Um, the strategy in Alabama is a little bit different because That replacement cost, like I talked about, is so much higher than the value of the property that we're not doing replacement costs on our insurance policies. We are insuring them for about 30% more than what we paid for them. So we're going to, you know, up those as the values of the properties go up. But it's going to be a long time before they reach replacement value. So that property that we purchased for $65,000, we had insured for $90,000. There was a fire. And insurance paid us out $90,000. It was the full policy limit. What?

Nice. Nice.

So that's a win. That's not that bad.

The ugly, the scary things, the things that keep you up at night, sometimes they turn out to be in your favor.

Okay.

So we actually profited from a house fire. No one was hurt. Thankfully, they were able to get out of the property. So that's the first thing, obviously, is you don't want anyone to be hurt in one of your properties. So, but yeah, fire department put it out relatively quickly from what I can tell, because the fire mainly was in the kitchen area and then smoke, it was smoke damage throughout the house. But yeah, we got paid $90 grand. The insurance company that we work with is great. All of our policies are through Foremost. Fire happened and 2 weeks later I got a check for $90 grand.

Ooh.

Wow.

That was quick.

Well, that's a quick, yeah, a little come up right there.

So we are selling that house. That's the next question is like, what are you going to do with that house? Well, it's probably going to cost the full $90,000 to fix it. So why would we fix it? You know, we made, what, $25,000 in profit? So we're going to sell the house for whatever we can get for it. And that's why we're joking about giving it away.

Okay. If you're in Alabama and are looking to buy a fire-damaged house at a discount, Reach out.

Yeah. Yeah. And the— we purchased it for $65,000. And that was the good thing is, you know, a lot of these single properties, that was one of the single properties that we bought. We bought from wholesalers. We got some great deals on some of these properties. That property fixed up is probably worth $150,000. So if we do— if we did want to put the $90,000 into it, the value would be there at the end of the day. But we just don't necessarily have the contractors and the bandwidth and the crews to be able to handle that heavy of a remodel. Um, so we're deciding to pocket the money and sell the house.

Seems like a good idea.

Well, I can go over there and hire a crew and run a crew for you.

I don't see you living in Alabama for more than like 4 hours.

Really?

Yeah.

It's not that, not that good?

I haven't been there. I think I've driven through it possibly, but yeah, you're more of a, you know, Or hire your sister.

She's been there.

Yeah, like I said, I've been to Alabama. I went to Tuscaloosa, which is another city that's like an hour away from Montgomery. There's not much going on there.

No.

You know, that's what's nice about it though.

They got good barbecue.

Yeah.

They got, you know, good food.

She was in college, so she knows all the, you know, college stops.

You know, the college town is one thing. Like, there's stuff to do. There's the sororities and fraternities and all that good stuff. But outside of that, there's not much going on.

Yeah, it's the country. You do country living.

Yeah.

Mobile. Yeah, we played a show.

Mobile or Mobile?

Mobile.

Yeah. Potato, potato.

Yep.

Tomato, tomato.

And we've, we've looked at portfolios in Mobile too. And my thing was like, I don't like, uh, being near. So we wanted to be, you know, Cleveland was one market we were looking at, or the Ohio markets. But it snows there. I didn't want to deal with snow, you know, pipes bursting, which has happened in Alabama too, but snow removal. And it's just that extra cost that you have to deal with in the winters.

Yeah.

Alabama, there's not a whole lot as far as natural disasters go. But once you get down to Mobile, like on the Gulf Coast, they got hurricanes that come through. So I wanted to try to find a neutral area that you don't deal with those type of Things. Sunbelt. That's why we settled in Alabama. Probably one of the cheapest places to buy houses in the Sunbelt.

Blytheville, Arkansas. I got a lady trying to sell her house there. You get it? She said, yeah, I got it for $75,000. I was like, $75,000? She's like, no, $7,500. That's— I was like, what?

Okay, like I say, $75.

Yeah, that's probably what it's worth now. Yeah, but yeah, it's one of those spots.

Wow. Yeah, $7,500.

So I mean, wow.

My dad, my dad bought the first housing in the first housing tract in, uh, El Toro, now known as Lake Forest at the time, back in the '60s, and he paid $16,000 for that.

That was a lot back then.

No, it wasn't.

Oh, okay.

That was average.

Yeah.

Oh, okay, nice.

And he bought it zero down. VA loan. Yeah.

Yeah.

Thank you for all you veterans out there. Appreciate what you do.

Yeah, absolutely. Okay. So I can do this. Should I go somewhere else?

There's a lot of houses in Alabama.

Mm-hmm.

Um, like I said, we, we looked at other markets. There's, there's plenty if you just go even on Zillow and just filter for houses, single-family houses under $100,000. Pretty much any houses that are in— that don't look dilapidated, that are turnkey, that look like you can rent them, are pretty much going to cash flow. I almost guarantee it unless they're in the middle of nowhere. If they're within, you know, city limits of some major city, it's going to cash flow.

Mm-hmm.

So just look for houses under $100,000 and you'll find a place, you know, do some research and find a place that you like and It's not a bad strategy.

What's it been like working with the Section 8 government stuff?

It's interesting and difficult sometimes. Now, there's different housing authorities for each county. We've purchased properties that, you know, one housing authority has whatever jurisdiction over that property. And they're a nightmare. But then another one in Birmingham is relatively easy to work with. So you have to like talk to the housing authorities. If you just look up, you know, Birmingham Housing Authority, you'll find the different housing authorities in that, in that area. And if someone picks up the phone, that's the first good sign.

Yeah.

If someone responds to your email within like 48 hours, that's a very good sign.

Yeah.

So Doing a little bit of due diligence like that and just going through, you're going to find the housing authorities are relatively easy to work with. It's just, you know, they're government workers. They're dealing with a lot of volume. And the communication at the not-so-good housing authorities is terrible.

Yeah.

We've waited months just to transfer properties. Like, you know, we buy one that is already Section 8.

Right.

We submit our forms to transfer the property and we just don't hear back for 3 months.

Yeah.

In the meantime, that deposit that is automatically being deposited to someone's account is still being deposited to the previous owner.

They are happy.

Yeah.

We have to have contact with the previous owner and try to be like, hey, can you send us the money? Sometimes they don't want to. They don't have to.

They don't have to.

So we have to contact the housing authority and be like, hey, we own this property, stop the payments. And in that transition period, as long as they didn't pay out the money, they'll backpay you.

Yeah.

So it's just those things you deal with. I'd actually rather not buy an existing Section 8 property for that reason.

Yeah.

Because you have to go through that transfer and that transfer, everyone we've had to do has been a headache.

Yeah.

Sometimes the property manager, property managers can collect the Section 8 payments. So instead of it going directly to the homeowner, it goes to the property manager.

Oh, I see.

So if you buy a portfolio with a couple Section 8 properties in there, it's actually a lot easier if the Section 8 payments are going to the property manager. When it's going directly to the homeowner or the landlord and you buy that property, it's still going to go to them after you close.

Oh yeah.

So yeah, that's been interesting. But yeah, like with anything else, it's work and you have to figure it out.

What about problem tenants? You know how California is because you're here, and we also do property management here as well. What does that look like over there? Can you like evict somebody, you know, with a 24-hour notice, or how, you know, what's that process like?

I'm learning the Alabama eviction laws. I do not know 100% what they are. The evictions in Alabama are a little bit easier. California is, depending on where you are in LA, Oakland, the Bay Area is the worst probably to deal with. Alabama is relatively easy and it's way less expensive. So we've had to deal with evictions already and we try to work with them. Obviously, sometimes when you're dealing with a Section 8 tenant and they have like an 80% voucher, Their, their portion they're paying could be like $100. So if they're behind 4 or 5 months, it's not a lot of money. So we'd rather still let those people stay when—

I hear you.

When 80% of their rent is being paid and they have this small portion that, that we have to collect. So we have tenants like that where they haven't paid their portion in 6 months. And, you know, we continue trying to collect it. But it's one of those things where it's like, do you want to evict that person?

Right.

When when 80% of the rent is still being paid, which is pretty close to market rent anyway, the 80% portion.

Okay.

Or deal with eviction and moving them out and fixing the property up and releasing it. So that's the beauty of Section 8 is like if you can get 100% vouchers in there or close to it, the tenant's not paying anything. So you don't necessarily have problem tenants. Of course, they can still trash your property. But the beauty with Section 8 is that there are inspections. It's a good and a bad thing.

Mm-hmm.

So, um, Section 8 will come in and make sure the property is still habitable. And the tenant that lives there does not want to lose their voucher because if Section 8 comes in and says all these things are wrong, they lose their voucher and they stop, stop paying essentially, which means that we can come in and kick them out. So the tenant doesn't want to lose their voucher. So it's kind of a misconception with Section 8 that you're getting bad quality tenants. And they don't pay their rent and blah, blah, blah, and they trash your property. It's actually the opposite. So the Section 8 tenants want to stay there, and most of them will actually help you, you know, maintain your property and let you know when things are wrong. So when they know their inspection is coming up, they're going to say, hey, this, this, and this needs to be fixed. I can help with it, or you come in, you know, they're actually more on top of it.

Mm-hmm.

Because they don't want to lose their voucher. So Once we do get it turned over to Section 8, or at least the majority of the portfolio turned over to Section 8, it's going to be a lot easier.

Okay.

You know, yeah.

And I could— I can kind of, um, I thought it was just me, but we were looking at a property that we had, um, that we're flipping right now, and we're like, okay, what if we turned it into like a co-living thing and had Section 8 people? So I was trying to hit up this one lady for the, the VA one, the HUD-VASH. She'd like, she emailed me once and I was like, yeah, send me all the details. And then never like responded back to me. And then I called her, never got ahold of her. So I had to show up at the Riverside like Housing Authority. And then they paged her on the thing and then she started responding again. Basically cornered her at her office.

Yep.

I was like, did we figure out like the housing crisis? Is it solved already? Then I just didn't know or? And then now she's emailing me, but—

She is?

Yeah.

Oh, that's nice.

I know. Yeah. So then she was like, oh my God, Alex. Oh yes, thank you.

We actually have several properties that are Section 8. Most of them are mine that I've had for quite a long time. And I've got a really good relationship with the HUD people over here, Section 8. And I get emails monthly. These are the people that we have. This is what they're looking for. If you have anything, let us know. Yeah, you know, so they're being proactive around here, which is good.

Yeah, no, it is. I mean, and, and, you know, she was like, no, we always need more properties and all that stuff, but maybe they're very busy and bogged down. It didn't seem like they had, you know, a lot of people at the building, and it had a long line of people trying to get housing and, and help and stuff.

She knows now. She doesn't respond to you, you're sending someone.

Yeah, exactly. I'm showing up at— they're like, oh, she's in a meeting, but you can call her from this phone.

He bothered her lunch period.

I know.

Yeah, we've had to do that in Alabama too, where, you know, those properties that we're transferring and then we have to wait, just wait, sitting and waiting and following up in emails. We don't get a response. We try to call, you sit on hold, there's no, no one answers. So yeah, the property manager in, in Alabama walks in and gets the answers that we need.

Yeah, it's just like, hey, I mean, that's what he's there for.

That's why you hired him, you know?

Yeah, absolutely.

Get your butt over there. Just like Alex, get your butt over there.

Just do it. Yeah.

And just do it.

Another thing, hiring a proper manager is you have to make sure that they are at least familiar with Section 8 and have done it before. You don't want a newbie Section 8 property manager. So that's another thing of going through and calling and vetting property managers. One, one property manager I talked to said he managed like 360 properties and he's like, 120 of them are Section 8. And he's like, I wish all of them were Section 8. And I was like, okay, you're my guy. You know?

So yeah.

Just making those phone calls and asking those questions, you'll find good people.

Okay. I remember when I first got onto BiggerPockets and they're talking about buying out of state, and it was always like, you know, get your team, vet your team. And so I called random people, but I didn't, I didn't know what questions to ask at the time.

Sometimes the best way to do it is just to jump in and buy a house, buy one and figure it out. Because then you're under the gun. It's like, I have to figure this out. If you're just thinking about it, yeah, you're not really going to do it.

Yeah.

Yeah.

You're going to come up with all the random problems and—

You'll talk yourself out of it. That's what I did for years. I'm like, should I buy multifamily? Which, you know, what sector? What should I buy? And I just didn't do it. As soon as we bought, you know, in our case it was 27 houses. But if you go out and buy one house, you're forcing yourself to figure it out. So just Buy a house. You know, it's an asset.

Yeah, I mean, if you're risk-averse, start with one.

Yeah.

You know, you don't have to start with 85.

Yeah.

Just start with one. And man, if it works out, then, you know, it's kind of like the BRRRR method, you know? It's like you start with one, it works out, you go buy another one. Yep.

Yeah.

And if it doesn't, you can sell it.

Yeah, just sell it.

Yeah, that or torch it, one of the two.

Yeah, exactly.

Just collect the, uh, collect the insurance money.

Yeah, my old business partner says, Joe, I think we ought to torch this one. I go, don't even talk like that, okay?

Don't talk like that. Oh, we're good. We'll figure out the problems and we'll solve them.

Yeah.

Are you looking at any other places, or are we just, are we just focused on Alabama, build that out to 1,000 or whatever your number is?

And yeah, the goal, the goal is 1,000 houses. That's the first goal. It's a big goal, so obviously there's milestones to any goal. First we got to get 100, then, you know, push to 250 or 500 or something. So 1,000 is a big goal. But yeah, right now we're only focused on Alabama. We want to get it up to, you know, a couple hundred homes. Of course, if I see a great deal or portfolio in another market, you know, we jump in and do it.

Okay.

I still do like, you know, Ohio markets. We've, we've looked at a couple of portfolios there. Uh, but yeah, right now we're, we're focused on Alabama. Doesn't mean I won't go anywhere else.

It's just so cold.

Yeah, being from Southern California, you don't want to deal— you don't want to own rentals in the snow. Like, why would you want to do that?

We were freezing last week.

Yeah, I know, you know, it's like 58.

I'm talking California freezing. I'm not talking back east freezing, like 45 degrees. Yeah, freezing. They're like crazy. I don't know why they live back there, but whatever. Yeah, you know, and all of you people who are thinking about leaving California, please go.

Yeah, you know, it's fine.

Yeah, we need more room on the freeways. Yeah, we need more housing.

We're going to a mastermind in Columbus like next month, and it's going to be like 16 degrees one of the days.

Mastermind about what?

Wholesaling. Wholesaling.

And you didn't invite me.

Well, Joe wants to go.

I know.

Sorry. I want to go.

Yeah.

Buy my plane ticket.

It's gonna be freezing and it's in Columbus.

I don't think you even have like that type of clothing.

I know.

You just stay in the hotel. You don't leave.

When we go to Florida, you're going to get off the plane in a Cancun and a button-up like that.

Yeah.

Yeah.

Yeah.

Well, that's yeah. And we were talking about it because we're going to be there all bundled up and it'll probably be like 20 degrees. They're all in like shorts and t-shirts. Like. They're like, are you guys from California?

Yeah, it's nice.

Hawaiian shirts there?

Yeah, of course.

Yeah.

Okay, long sleeve.

Yeah, I mean, I either get invited or I go on a cruise, one of the two, you know.

Well, we're doing, uh, BiggerPockets.

That's not till what, uh, September, October, somewhere around there.

Is it?

Yeah.

Bigger pockets than Cancun.

Yes.

See, let's do it office-wide.

Cancun Joe.

All-inclusive Joe.

Yeah, yeah, he, he likes going to all-inclusive. Ryan and my daughter, yeah, like going to all-inclusives. Those are nice.

Those are nice.

Oh look, our producers, uh, you know, giving us a chair. All-inclusive.

Yep. She loves it.

I like roughing it. So Cancun is— is that where they have, or is that Cozumel, the pyramids and stuff?

Oh, I think that's—

A couple hours away.

Yeah.

I think there's pyramids everywhere in Mexico.

Yeah. Yeah. I think it's Cozumel. That's where we went. And we went and took a tour to the pyramids. And I walked up to the top and waved at my wife down at the bottom because she didn't want to come up. Yeah, yeah, that was, that was cool.

Nice.

You know, I've been to pyramids.

Heck yeah. You know, did you feel like any sort of energy change?

Uh, I put a triangle hat on my head, you know, but didn't feel anything.

Okay, just like slightly out of breath.

Didn't get smarter. Oh, I was really out of breath. That was a long time ago too. Yeah, but I've been to the top of the Empire State Building. I've been to Um, the top of, uh, Leaning Tower of Pisa. That's, that's an, that's an interesting one. Yeah, that steps are like tiny and, and the pathway is one pathway up and one pathway down.

Freaky.

Where else? Um, a lot of places. Yeah, I always go up to the top.

Have you been to the tallest building in Alabama?

No.

It's probably like 3 stories.

Did go to the World Trade Center with the kids, the first one. Yeah, before they did 1.0. 1.0. Yeah, we were there. We went all the way up to the top. That was interesting.

That's scary.

Yeah, well, yeah, now, but it wasn't scary when I was there.

No, that's just scary in general, like looking down from there.

I mean, don't like it. The scariest thing was We were on the train and my daughter was, I want to say, 10 or 11 at the time. We told her, you know, don't wander off too far. If you can't see us, you're too far.

Mm-hmm.

And so we're sitting and then all of a sudden she comes running over and just like sits right next to my wife and says, you know, okay, I'm here. And we go, what the heck happened? You know, it was a homeless guy. on the train with us and he had urinated right next to her.

Wow.

So yeah, that kind of cured her.

Not a lot's changed.

Going too far. Not a lot has changed. You're right. Yeah, not a lot has changed. So yeah, that was their experience of New York. We were there during July 4th one year. Yeah, we're off topic. We're major off topic. Anybody on has any questions?

We have a few questions here. So we got questions.

Chad's in the chat.

What kind of assignment fee did you pay the wholesaler for the portfolio?

What kind of assignment fee did they pay the wholesaler?

Of course, because Chad's a wholesaler.

Chad's one of these wholesalers, I love money type guys.

He wants to know. He wants— that's a good question.

So that portfolio was 14 houses. Our buy price was $700,000, which was $50,000 per property. The wholesaler made $70,000. He had under contract for $630,000.

Okay.

And we happily paid him.

Wow. That's a good— Chad, that's a good fee.

No, no, because now he's going to be like, we need to be wholesaling Alabama portfolios.

You've got the guy right here who's going to buy them.

I know.

Find them. Why not, Chad?

Chad, find me some.

Yeah, find some, Chad.

I'm already— no, we're already doing our own thing. Don't sidetrack him. No.

You can pull data, you know, 5 houses or more.

Do a side thing, Chad. Do your own side thing. Don't worry about it.

Landlords that own 5 houses or more.

Just do a little property filter.

So that's like 10%.

Yeah, which isn't— I mean, isn't that much, you know?

Yeah, well, I don't know. In Alabama, I mean, oh yeah, here, you know, $700,000, you're not going to pay the wholesaler $70,000. There's no way.

That's true.

That deal's not going to work out if you're going to flip it, you know. Maybe pay $5,000 or $10,000, you know, $20,000 at the most.

I think people are getting fat assignments out here.

Oh yeah, well, not for me.

Well, yeah, not from you, but other people will pay.

Well, I think, I think that's a lot, but you know, it was good.

It was solid for him. I was, when I saw the assignment fee, I was like, okay. 'Cause originally he, they were asking $750,000 for the portfolio and I negotiated it down. Oh, they had an offer that was higher than mine. Um, and our terms were better. I think it was $10,000 higher. I think they had an offer at $710,000 or something. Um, but yeah, so $70,000.

So what was, what's the, the actual value of this prop, of these properties? You know, because you're getting it at a wholesale price. So what was the actual value?

It's higher. Um, we're getting decent deals on them because it was, that was a wholesale deal. So the value of that Portfolio again, if you were to, you would have to go through each property and sell them off individually to to do this. If you sell as a portfolio, that's we can get go into it. But that's why I don't like multifamily. But it was probably probably worth about nine fifty to a million.

Okay, yeah, that makes see that makes sense.

Why don't you like multifamily? This is controversial. This is controversial. No, this is the clip.

No, this is the clip.

We're clipping this.

Easy answer.

I just forgot where I was going with that.

Just say multifamily sucks because—

Well, I think what I was just going towards is that multifamily, when you go to exit a multifamily, it's always other investors buying it.

Grant Cardone.

Yeah.

You're going to sell to another investor who's going to want a deal, who's going to dig it apart and dig it apart and get you down, whittle you down on your price. When you're selling a single family, if we were to exit this portfolio, we would go in remodel each property individually, put it on the regular market, and a homeowner is going to buy it who's going to pay full retail for that property. So multifamily, on an exit, you're selling it still for a discount. You're not going to get the full retail value of it. And it's all kind of dependent on cap rates and interest rates and all this stuff.

Yeah.

Single family, it doesn't matter. It's comparable sales, whatever house is selling for the neighborhood, and a homeowner end user is going to come in and buy it for full retail.

Hmm.

Another beauty of owning single-family is like, if I bought a building with 3 partners, a multifamily, which a lot of times that's what it is, it's multiple partners buying a building, and say one wants to sell, you have to sell or buy that person out or sell the entire building. With single-family, if I wanted out, it would be a discussion between our partners, but Whose houses would be whose, but you can split off the houses, sell these 30 over here and cash me out. You know, you can sell a portion of the portfolio. You can exit a couple houses. You can sell ones that you don't like, ones that aren't performing. Can't necessarily do that with a multifamily property.

I'm sending this to Grant Cardone.

This is— that's my answer. My, my answer has always been, Joe, do you buy multifamily? No. And the reason I don't is just basically just what he said. It's if I have to sell something, it's either the whole thing.

Yeah.

You know, or why not buy like, you know, buy a fourplex, let's say. Why not buy 4 condos, you know, or 4 single families? If I have difficulty, I can sell one.

Because they love dealing with the cap rates. They're like, you're looking at it all wrong, man. All you got to do is raise the rents and then you get a million dollars out of Yeah, the multifamily makes sense.

Obviously people are doing it for a reason. It's a really good investment, but I just look at both sides. What are the pros and cons of, of owning each asset?

Yeah, yeah, me too.

There's other ways to get rid of partners too.

Really?

Yeah, I'm just saying, accidents happen.

We don't want to talk about that.

I'm just kidding.

Ah, we're all friends here. What else we got?

All right, um, from the chat, MoJ says hi.

Okay.

Hi. Oh, that's it?

I don't know if we get necessarily got to do the highs.

That's okay.

All right, okay, all right. Hi. She blew.

All right, Grant has a question about HEA home equity agreements. What do you guys know about that?

There we go.

I don't know anything about that.

What is it again?

Home equity agreements.

Home equity agreements.

Is that like a lease-to-own type thing? I'm guessing.

I thought it was, um, I mean, maybe I'm wrong, but there was a guy that I, I went to some meetup thing and he was talking about doing that with foreclosures where you, you buy the house for like the equity rather than like the whole cash amount. Or something. Hmm.

I don't know if that's what it is, but that's almost like a subject-to deal, or—

no, it's like you're— yeah, kind of. Yeah, I guess it is a sub-to, but you're like, you're, you're buying like the equity.

Um, so that's what you're doing subject-to.

Yeah, yeah, I guess it is. I guess that's what it was.

Yeah.

Maybe you can ask Grant to elaborate.

Yeah, go ahead and elaborate, Grant. I don't like that you don't know that, Joe, because you are the experienced one. So yeah. Um, We're gonna go ahead and edit all of this out.

You're gonna have to elaborate. It'd be way, way more specific if you're still on.

My guess is like a rent-to-own type situation, but I really don't know. I've never heard of it.

All right, and now we have Jesus Saves says, hey yo, hello, hey yo, nice, hey yo, hey yo, hey yo, home equity agreement.

Oh, he's Googling it while we're here. That's a good idea because— yeah, yeah, I see all these.

The producer's supposed to pull it up. Like, I know.

Yeah, yeah, producers.

These agreements let you access funds in exchange for a share of the property's future appreciation. Um, so kind of like a HELOC, I guess.

Funds. It's a fund. Wait, say that again.

These agreements let you access funds in exchange for a share of your property's future appreciation.

Got it.

It's kind of a loan.

It's a loan.

Yeah, it's a loan.

If you don't— yeah, if you don't meet the lender's requirements for your credit score, um, you may think about entering a home equity sharing agreement. So it's like if you can't qualify for the HELOC, then you can come in and Get a little something.

I don't think they're doing that in Alabama because there's no equity. There's no equity building. Maybe somewhere like California where you buy a house for $1 million and it's worth $2 million in 10 years.

Yeah.

And then they take 50% of that equity.

We used to have buyers that had good credit purchase a home, get the loan, and then we would rent it out. They wouldn't necessarily. So all we, all we had them do is basically qualify for the loan on the property.

Yeah.

And then you can split the profits or whatever you negotiate in a transaction. So everything's negotiable. So, um, yeah, you would, uh, split the profits and then 4 or 5 years later, however long that agreement is, you would split the, um, increase in the profits at that point in time as well. But if you didn't want your name on the loan, things like that, that was a way to go. And we did that 30, 40 years ago.

Well, that's cool. Who were these buyers? Just friends and family?

Yeah, anybody. Anybody that had good credit. So you're basically buying their credit is what you're doing.

You give them a fee upfront?

No. Oh, uh, you just say, I'm gonna run the whole thing. I'm gonna run the whole thing. I'm gonna, you know, whatever profits we have. And those, obviously, back in the day, you could cash flow in California. Uh, 2008 was a great example. If you bought properties in 2008, then the downturn, you could cash flow easily. So, you know, the problem was, just like 2008, there was not a lot of people that had good credit because They were all getting foreclosed on.

Yeah.

So, you know, if you had an investor out there that had good credit and you, you know, wanted to buy something with them, then definitely the loan would be in their name and, um, title as well. And then the next day you'd switch the title over into their name and your name.

There you go.

That—

there's the experience. That makes up for the experience.

Yeah, maybe that's what he's talking about.

Grisback was another Also, what experience do you have with adverse possession? Heard some crazy stories about that.

And I can tell you firsthand knowledge, the crazy stories are just that— crazy stories. Uh, you'd have to check each state, but, you know, talking about California, because obviously that's where I'm at and I'm licensed, adverse possession is really not a thing. So adverse possession, it means I'm coming over to your house. Let's say it's vacant. It usually is. It's vacant. And so now I'm going to live there. Okay. Uh, with adverse possession, the owner of the property has to know that you're living there. Okay. And you have to stay in there 5 years and you have to pay the property taxes for 5 years.

Okay.

then you can claim that property as yours. Okay? Believe me, nobody's gonna let you live in their house for 5 years knowing that you're in there. And then if you wanna pay my property taxes, that's fine. Pay my property taxes for 4 years and by that time I'll have you out. But yeah, those are just crazy stories. Those are the internet, what do you call them? The internet—

Dark web?

Clickbait stuff.

Clickbait.

Yeah, that's just—

It's happened like one time and that's story everyone hears.

Yeah, and it's probably between family members.

And, you know, I, I've been out to places where, you know, and, and you'll have— you'll see a lot of this during a downturn, okay, like 2008. You go out to a house and there's somebody that's moved in, you know, squatting basically, okay. And they come out and they go, adverse possession. Okay, sovereign citizen, sheriff. Yeah, sheriff's behind me, he's coming.

I didn't know that part of it is that, that the homeowner had to Has to know.

Yes. They have to know. Yes.

I didn't know that part.

Yeah.

You fake a note. You could fake a note.

They have to know that you're squatting.

They have to know that you're squatting.

You could deepfake a video now.

Yeah.

Of the owner saying like, no, it's totally cool. Yeah. I'll let you stay here.

No. All right.

Yeah.

Fine. No.

It's something you learn, uh, in your real estate courses that never happens.

I don't know. I don't know that I was taught that in, in my real estate course. I mean, maybe just the definition.

Yeah. Just, just a definition, you know, but not the actual mechanics of it.

I'll find some stories for you, Grant. has to be out there.

What I remember in my course was, yeah, pay the property taxes for 5 years and you can claim ownership. But I didn't know that you had— the owner had to know that you were there.

Yeah.

So what if the owner passes?

Then they didn't know.

Well, maybe they knew. They could have known like, you know, day 1, and then day 2 they're gone, right?

That's true.

That's what I'm saying.

See?

Yeah, gotta think through this. And then you just come out, all you have to say is adverse possession. This is mine.

Good luck. You get to pay the property taxes for 4 years. They'll kick you out. Yeah. And, uh, my kids who inherit my property will kick you out 5th year.

Oh yeah. All right. Well, there is that. All right. Anything else?

Uh, Grant just said he's definitely gonna deepfake that video.

There we go.

Nice.

All right.

Now see, Grant thinks outside the box.

I've had friends ask me about that. They're like, I've heard about this adverse possession thing. So if I move into someone's house for 5 years—

Who are you hanging out with still that thinks that that's a viable plan? You gotta get rid of those people.

You can just claim ownership. I can get a house that way. I'm like, no, yeah, it's not gonna happen.

He's like, no, dude, there's a spot over there.

He's all, I saw this vacant house.

I saw a video on YouTube the other day, which is so awesome. Um, some, some guy had a house and some squatters moved in, and he called the police. The police came out, said nothing we can do, right? You know, so He waited until they left. He moved back in, changed the locks, right? And then they called the police. Yeah, police came back out, said there's nothing we can do. Yeah, yeah, he ended up getting possession of his house.

Yeah, back.

And I thought, oh, that's genius.

That's amazing.

There's a genius right there. God. Yeah.

No, I don't think so.

If you—

if it's like you do the same thing, you have to wait till they leave and then Yeah, yeah, yeah.

You throw all their stuff out. Less than 30 days.

Yeah, he did.

He threw all their stuff out on the sidewalk.

Yeah, yeah.

That's— no, 100%, you can do that here because the police can't do anything. It's a civil matter, right? You have to hire an attorney and go to the judge.

I mean, they could, they could hire an attorney and come after you, but do you actually think they have enough money to hire an attorney? You know, you'd be surprised.

Probably not.

Yeah, you would be surprised unless they went to law school or whatever and, uh, You know, knew how to file paperwork, uh, not necessarily stamp it correctly, but yeah. Oh, I'm sorry, is that, is that, uh, touching?

Some people didn't know how to get through, navigate the court systems just enough to be a thorn in your side.

Yeah.

Uh, Grant, circling back to this adverse possession.

Yep, it's dropping some links.

We have a house the owner died in, son doesn't want anything to do with it, so thinking this might work.

Oh, interesting.

You could just try to get like a deal with the son.

You just tell the son, hey, yeah, or he doesn't want anymore, just have him deed it over.

Seller finance. Yeah, or have him deed it over.

Yeah, but who, who was the property entitled in? Uh, was it titled properly in a living trust, or is this a probate situation? Because if it's a probate situation, you know, the government's going to get involved. You know, they're not they're not going to just let you transfer it. You know, I don't care if that's his son living there or not. If it to me, if his son's living there, I'd tell him good luck. Stay as long as you can because eventually somebody's going to catch on and they're going to get you out. But that they that may not be for a long time. Okay, it's like if you don't pay your property taxes here in California, they they don't come and evict you. You know, that takes literally five years before they start even looking at it, and then they'll start the process of evicting you out of your property. What happens is most of the time, if there's a loan on the property, the banks are not going to let it get to that point because a property tax lien is superior to a lender lien. And so, if the county Forecloses on you, that lien gets wiped out. Right. So they're going to pay the property taxes. So that again, that if there's a loan, you know, stuff that you hear on the internet that is really not truthful.

Just bring the deal to me, Grant. I'll help you with it.

I think he's saying he's gonna do that with the property he knows about.

Yeah. No. So he's gonna go move in. Yeah. Try it.

Give it a shot.

Try it and like report back to us.

That's a good five years. Five years from now. Wait.

Find out.

Let me ask. Are you going? Is the dead guy still there? Are you gonna like move in with him there? Because Ryan just did a flip, and the person—and I'm not gonna say where it is because we don't want to know—the person was dead in the property for how long?

Months.

Months.

Yeah. Eight weeks.

Stinky. Yeah.

Yeah. Like. Wow. So is that the case? You're moving in with the dead guy?

No, son hated the mom, doesn't want anything to do with the mom. Passed away, lived there, house is paid off, literally just sitting vacant.

Oh yeah, again, you'd have to find out, you know, if you wanted to do it the right way, you have to find out who's on title.

Or the son— no, he's going to try the, the thing. So the son Get it, get it from the son.

The property's titled in the mom's name. The son knows about you living there, but the mom doesn't know because she's dead.

Unless the son inherited it, he said.

Right. But if it's titled in, in the mom's name, like Joe said, you could go through probate, right? If it's not in a trust.

But now he wants to move in, or the son wants to move in? No, the son doesn't want anything to do with it.

He wants to move in.

Is it in Hawaii?

That's a very good question. Is it in Hawaii or is it— I'll give it a shot— on the beach? Yeah, Seal Beach, Huntington Beach. We're not, you know, beggars. Uh, Newport Beach. Is it on the beach someplace? Yeah, then yeah, I'd move in.

All right, definitely give it a shot.

You got a free place to live for 4 years, 5 years.

Wait till somebody comes knock on my door and kicks me out and it's like, okay, got a warrant?

And how much, how much are there? How much are the property taxes?

Oh, okay. If you want to send us the address offline, we'll go over and take a look at it.

Those are some hefty property taxes to be paying.

You're not going to pay.

No, if you're going to do the adverse possession.

Oh yeah, true. Yeah, if you're going to do that, then yeah. But yeah, you know, we could turn it into a nice party house or— yeah, a wholesale club party house. There we go. You know, yeah, something. Yeah, yeah, Laguna Beach, it's very nice.

Grant finds all the good properties like that.

Well, is that the Grant that was here?

I think so. Is it? Yeah, it is.

Yeah. Oh, okay. Yeah, because he deals in Hawaii, right? Wow. And so if I'm, if I'm believing anything, I'm believing Grant.

Exactly.

He knows what he's doing and how to do it. So yeah, adverse possession.

I think I'm gonna try it.

There we go.

Nice.

Nice.

Yeah, invites to your housewarming.

He got us on board.

Yeah.

Look up who the property's titled to. If it's in a trust, maybe someone in Laguna Beach may have it properly titled in a trust. The son is the trustee.

Maybe. Yeah, maybe he doesn't know, you know. Maybe he was, you know, a black sheep of the family and nobody told him, hey, there's a trust.

That's another thing. Are there any other siblings?

There's a lot of things going on with that, but yeah, your address possession, it's in Laguna Beach. Yeah, I'm moving in.

Just go for it.

I'm moving in.

Do it.

I think I'm gonna try it. Yeah, I love that. That's amazing.

Yeah, cool. Uh, well, Ryan, I mean, uh, take us home. What's, uh, what's some advice that you would give yourself in the beginning knowing what you know now?

Probably goes back to what I was saying is if you're scared or in that analysis paralysis period, just buy one house. Do go and just jump in and do it. Because I analyze, like I said, I analyze properties and rentals for years before I went and did it. And if I started 5 years ago, I'd own a heck of a lot more than 85 houses. So if you're scared, pull the trigger. You don't need to buy 27 houses or 40 houses at once. Buy one. And figure it out. Amazing.

How should people reach out to you if they want advice on how to do real estate?

Instagram, probably best way, easiest way. It's just my name, Ryan G. Mitchell, is my Instagram handle. You can reach out there.

Amazing.

Love it.

Thanks so much, man. We really appreciate you giving us some time today. You guys share this podcast with any new or experienced investor. Come out on Monday to Hangar 24 to see Ryan give a full breakdown presentation of his 85 Houses journey. And Joe, anything else?

No, no. Ask a lot of questions on Monday because, you know, we're— like I said, we're right under Joe Rogan as far as viewership shows.

Yeah, it really helps out.

He may not have been here today, so definitely come out Monday. And ask some questions.

Do it, do it, y'all. And if you guys need, uh, some one-on-one help, reach out to any of us and, uh, you know, we'll be happy to help you with any sort of real estate stuff.

Grant, call us.

All right, you guys, see you next week.

Take care. If you want more advice on real estate investing, reach out to us one-on-one. 949-625-4533.