Mastering Profitable Short-Term Rentals with Travis Hall: Expert Tips for Success

I don't hear anything.

What's up, you guys? Welcome back to the podcast. It's Thursday at 4:00 PM Pacific Standard Time, the New and Experienced Investor Podcast. I'm one of the new guys. No, I'm one of the hosts. He's the new guy. Alex Barnett.

And I'm Joe Homs, and I'm the experienced guy.

There we go.

And we are a little bit late. I think it's a little bit after 4, but we had some technical difficulties. But, uh, our producer was able to figure it out.

Figured it out.

And we're live.

And we're live. Are we good? Yeah, we're good. Okay, good. Yeah, I can't tell by the faces, but we're good. We have a studio, uh, in-studio guest today who's on his way. He's flying here, speeding. He told me. And we're gonna have him shortly. So stick around for the guest. We're gonna be talking about managing, purchasing short-term rentals out of state, risks associated with that. Is short-term rental still a thing? And then also he's doing an in— a live-in flip right now, him and his wife.

Nice.

Yeah.

Yeah.

You know something about that?

Yeah.

Have you ever done that?

My whole life.

Okay.

Yeah. It's called marriage. Yeah. I've been in my house for 40 years and every 10 years it's like, we need a new kitchen, bathrooms, flooring, painting. Yeah.

Whatever. Styles change.

Yeah. It's just, I call it a live and flip. That's what it is.

Okay. And so what do you have? Like plastic flapping in the wind and paint everywhere?

I had popcorn ceilings. in my home when I bought it. And I literally did the scraping of all the popcorn ceiling myself. And I have a 2-story house with open beam ceilings. It's like really high up there. And I had to get some scaffolding and stuff like that to reach up there to scrape that. And then the other thing we did is we had the I don't want to call them square, but you know, this, the drywall, the corners were like, uh, square, L-shaped.

Yeah.

And then the new style came where it's rounded corners. I rounded all my square corners at my house.

Wow.

Yeah, yeah, it took us a while, but I, I did all that.

Okay.

Yeah, it's a living flip.

And there's no timeline and you can just come and go as you please?

Yeah, yeah, it's We start in one room and finish that and then literally go to the next. And, you know, the kids were in the way, so we had to kick them out.

Oh, God.

Yeah, I know. It's just like—

Every time.

Yeah, we need to do your room now. You're gonna have to go downstairs and live in that room that we just finished.

Yeah.

No, I like my room. Okay. Well, no, you have to go downstairs. No, I like my room.

You own nothing, so get down there.

So yeah, they moved down here for a while.

So, okay.

Yeah, we were good.

Made it work. Yeah, that's cool. Yeah, well, I mean, it makes sense too because, you know, when you're gonna buy a primary, you could get some instant equity right there. Buy it cheap and— or cheaper. Yeah, fix it up yourself, learn a few things.

Sure.

But it's funny, um, when we bring Travis in, we'll have him explain, but he doesn't really— I mean, I think he's kind of handy, but like he's posting it all online, so you're kind of following him and he's like making mistakes and screwing Up and kind of. I mean, that's how you learn.

Exactly how you learn. Yeah.

So it's it's pretty funny.

Yeah. No, nobody's born you know with the contractor background or expertise.

Yeah, you are.

It's it's something that you learned along the way.

I thought if you're like below the border, you're just born with that. You come out, mommy. No, I can paint. No, just kidding. I'm Mexican. I can say that. Okay.

Moving on.

Yeah.

So we're gonna talk about some stuff before. the guest gets here. Yeah, something very important. Yeah, something that a lot of people have been bringing up recently.

Yeah.

And, you know, whether you're an investor or just for yourself, um, you kind of need to know these things.

Yeah.

And what is that?

Well, before we get into that, yeah, our meetup is on the 20th this month, not on the last Monday, right? Because that was Memorial Day.

Yep.

So we had to move it So you regular attendees, we're gonna have it a week early.

Yeah.

And, um, what's the title of this month's meetup?

Stand Up and Connect.

Stand Up and Connect. Okay. And I want all you newcomers to come because I'm going to call on you and I want you to stand up there in front of the mic and tell us why you're there and tell us how we can help you. Yeah, and I mean everybody because this is a networking event. Yeah, so we have experts in everything that you need to know about real estate. Yeah, so please come on out, especially if you're a new person. Um, I promise not to pick on you, not really, but, um, yeah, come on out. We, we need you there. Hangar 24, 6 o'clock on the 20th.

I mean, you picking on people is a good thing because I remember I went to the Zooms we were doing during— that you had during COVID Yes. And I was just sitting there like—

Yes. And I saw that.

Yeah.

Yeah.

And you're like, why are you waiting?

Yeah. Why are you there? You haven't said a word. It's like, you know, hey, Alex on the other side of the screen here, why the heck are you here? And you opened up.

I want to flip. You're like, okay, come on down to the office and I'll show you how to do it.

Yeah.

And you did. Why did you do that?

Because I, you know, you asked. That's all. That's all you need to do is ask.

That's insane. Nobody does that.

You asked.

Um, so yeah, it's good. Get you guys out of your shell talking to people. I mean, we've had people connect that are doing deals today. So if you have a project and you need private money, there's private money lenders there looking for deals. And then if you need a contractor, contractor to show up too. Everyone's like always like, where do I find a contractor? They're at the meetup.

They're at the meetup.

They're already there and they're like, I want to work with investors.

There's a whole Russian crew of contractors at the last month's meetup.

Yeah.

Yeah. They were there ready to go.

Yeah.

They're like, we're just looking for an investor that has a house.

Exactly.

And they're like, we're willing to partner up too. Right. So what the heck?

Yeah.

It's all there. Everything you need. No excuses.

Okay. So while we're killing a little bit of time here, um, I run a brokerage called Pelago. I have about 275 agents. And for some reason, the last couple of weeks I've been getting calls from agents. And I think you had a deal as well that you could talk about, but the calls have been, hey Joe, uh, my client called actually It's a person who inherited the property, and they inherited it from whomever—mom, dad, grandma—you know, whatever. But the property was titled in their name, and it's like, okay, we're talking probate here. It has to go to probate, and probate is one of those things that is so easy to avoid. Um, and that's what I want to talk about, is how to avoid probate and why you should avoid probate. Um, probate is done when the owner of a property has the property in their name alone. So for example, like, let's say you were married and you had your name on a property with your wife, if it's titled correctly, and that's called joint tenancy, then it would be inherited by that person. So that's husband and wife. Okay. That's, I guess, kind of the easiest, easy way. But unfortunately, if they both die at the same time, then it has to go to probate. So husband passes away, wife inherits the house, the kids don't do anything, and then she passes away. Probate. Okay, you have to get it out of there. You should be holding title in a family trust. Okay, family trust is just a separate document that basically says when we pass away, this property is going to go to the kids, whoever whoever they put as the beneficiary. On this. And literally the next day, the kids can put it on the market and sell it. Without that on there, then I'm sorry, but it needs to go to probate.

And probate is the local government getting involved to figure out—

Yeah, it's not local. It's actually a federal law. So, you know, probate, again, it depends on how you have your property titled. If you just have a title under your name, Husband and wife, you're okay if one's still alive, but, uh, the, you know, the second person passes away, then you're in a probate situation. And a probate is just a legal proceeding, um, that the government takes their fair share, which is a lot.

Mm-hmm.

Um, and then a probate attorney takes their fair share, and the heirs end up with the rest because the process is How do we know that this property belongs to Alex? Okay, so we have to go to court to prove that, you know, um, you're my son. Yeah, which you're not, right? Okay, but you're my— we're gonna take a paternity test. Yeah, it's like my son, but he's not. Anyways, um, that's a legal process, okay, to make sure that somebody doesn't come in and, and steal your you know, father's property, the property that you grew up on.

I'm sure that's happened before.

Oh, I'm sure.

You take it out of the grave.

But that's a long process. That takes anywhere between 9 months and a year to get completed.

Why?

It's— that's, you know what, it's just our system. And well, obviously there's some attorneys making some really good money on this. And at the end of the day, once, once it's approved by the court, which everything involved with that transaction has to be approved by the court. So here's another, another circumstance. So I have a house, and Alex, who's a wholesaler, comes to me and says, hey, I'll buy your house, your dad's house. And I say, okay, well, how much you want to give me? And I'm, I'm like living back east someplace. So I don't really know what the market is out here in California. And so Alex says, I'll give you $300,000. And Alex knows that that house is probably worth $700,000. Okay, so the probate court steps in and basically is here to protect Alex in this— no, not Alex, me in this situation. Not Alex, we don't want to protect Alex in this situation. So the court will say, we are going to send this to an appraiser to appraise the house. So that we know what the value is. Once we get that back, then we'll approve everything. You can go hire a real estate agent, or if you want to sell it to Alex, that's fine. But you need to sell it at this price or more or more.

I mean, who's appraising that? Because we've seen some situations where they get it wrong.

It's another human being. Oh, God. Yeah. So it's one person's opinion. Yeah. And like everything else in a normal real estate transaction, you have an appraiser. That's his or her opinion on that day, right? The next day, somebody else can come in and say, no, it's worth more than that.

And they're probably not even looking at the property. I'm sure they look at like pull comps and they're like, ah, it's probably fine.

They're supposed to. Okay. They're supposed to take photos of the inside, do measurements. And I mean, they should be doing it the right way.

There was that one mobile home that was completely blown out and messed up in Sierra Don, and it was a probate situation and they were asking like $100,000.

Yeah.

And we're like, this needs to be at $60,000.

Yeah.

And they're just like, that's what they said it was.

Yeah, that's how they start it. And then if they don't get any offers, then they start to reduce the price. They'll let you reduce the price, but they won't let you get an offer in there at $60,000 and they'll accept it right away.

And they say they're protecting you, but really they're getting more for themselves as well.

Yeah, I guess. I mean, no, it's really the protection.

Yeah. Okay.

I mean, it's really the protection.

Okay. But how can we avoid this? Because it's like you said, a long drawn out process. So let's say you do inherit the property, you do want to sell it. Your, your, you know, your, your father says like, hey, at this house, you know, I paid it off. I want it to go to you. When I pass away, you know, they never put anything. It's still in his name and he just passes away unexpectedly. And you're like, no, but he told me he wanted me to have it.

Yeah. And maybe he wrote up a will.

Maybe he wrote a will. He wrote it on the back of a napkin.

A will is worthless when it comes to real estate. It's worthless.

What about a video on your iPhone?

It's worthless. It's worthless. It depends how the property is titled. Yeah, it has to be titled. The best way is a living trust. That's the best way to do it.

Yeah.

And there's lots of attorneys out there that do this type of work. Um, I want you to put up, um, our local attorney. Uh, his name is Paul Horn. And the reason I'm putting him up there, uh, I do, I do recommend him. But the reason I'm putting up there, because if you're a real estate agent, This guy trains you how to do probates. Oh, for free. Oh yeah. Okay, there we go. You go, you go to his website. If you're a member of the Board of Realtors, especially locally down here in Orange County, or anywhere here in Orange County, he does Orange County, LA, and he trains you for free. And he's got like an 8-hour course that, um, I've, I've I've been to it like 2 or 3 times with different agents. He's very, very knowledgeable. He is very informative. That's him. And he's an amazing speaker. And he— I mean, a lot of this stuff could be dry at the end of the day. Yeah. But he makes it like really interesting.

But notice the icon at the end. Everyone gets money. Money. That's, that's what you sit through the 12 months.

No, it takes that long.

Gotta be a way.

Yeah. And he tells you all these milestones that you have to, to go through. Okay. But yeah, the reason I put here is, is he's a great probate attorney. And if you're looking to learn how to do probates, this is the man to talk to.

Yeah.

Okay. And even if you're not a real estate agent and you want to learn how to do probates, he actually sells leads as well.

Oh.

So if people are in probate, all this is public record. So as it comes out, he puts— he has his team put together a list every week and he sends it out to subscribers.

Oh.

And I, I don't know what he charges nowadays, but it wasn't much, um, a few years ago when I was subscribing. It was I want to say like $50 to $75 a month.

Okay.

And you got a list every week.

So you got to wait the 12 months and stay with them.

I was just going to say, I didn't like doing it because, you know, you're talking to somebody who inherited the property and the link he sent us was very current. And I would get on the phone with somebody and I go, you know, I'm calling about your property and, you know, are you interested in selling it? And they'd go, Joe, my dad just passed away yesterday.

Oh my God.

After a few of those, it's like, oh gosh, I can't do that.

Let me wait a week.

Right.

So a week later I would call, hey, I'm interested in buying your place. Oh, you're like about the 30th caller. Yeah. You know, so you're damned if you do, you're damned if you don't. It's like, Yeah, whatever. So anyway, I just didn't like dealing with the death subject there. Okay. So, um, knowing that this takes, uh, almost a year, I just— I said I'll just wait for it to be listed on the market with a real estate agent.

Yeah, I mean, so if you're an investor, what's the advantage? Do you— they have to get it court approved, and then do they say, well, we have somebody ready to buy it, and then as long as that's approved, then you can do it?

Correct.

I mean, I'm sure a lot of people are.

Yeah, you, you could be, and, and you should be, you should be the first offer in that's accepted.

Okay.

Okay. So if you have an offer that's accepted, that doesn't mean you're going to get the property. The process is that you go to court, the offer's presented to the judge.

Yeah.

Okay. In the court and says, hey, I have an offer for $700,000. Is there anybody else that would like to put an offer on this property? Oh, they do that? Yes. And the next offer has to come in 10% above. So if I wanted to put an offer, I'd have to come in at $770,000.

Geez.

Yeah. And then after that, let's say it's— let's say it's still a deal at $770,000. Okay. And then this poor guy who put an offer in at $700,000 says, shoot, I wanted this property. Like $770,000, that— I guess that's still a good deal. Maybe I should put in an offer. Uh, guess what? 10% above my offer.

Who wrote these rules? This is not—

Yeah, so he's got to pay another 10% of $770,000 is what, another $77,000 on top of my $770,000 offer. So now it's getting to the point where It's just too much money. It's like, I can't bid that high. I was going to flip this property and no way. I can't pay 8-something, whatever it is.

Oh my gosh. Yeah. I mean, and all this stuff, it's like if you don't have your ducks in a row with the title, I've seen it screw up deals before where the person couldn't find the trust. She was on title, but when they go back over the chain, Of custody or whatever it's called. Um, this lady said, no, I— they, they gave it to me through the trust, but then there was an aunt who it went to first, and somehow they signed after the deceased person was dead. So then they knew something was weird, so they're like, well, we got to see the trust, and she couldn't find it.

Yeah.

It's just a binder, right? I mean, it's not recorded anywhere.

It's not recorded anywhere.

So you got to hold on to that.

Yeah. I— mine, my personal trust is scanned so that—

Okay, that's smart.

My heirs can find it.

I mean, this was probably— she was like, this was in the early '90s, they didn't have scanners.

Yeah, I remember those days. Yeah.

I was like, don't you have like either a digital copy? And she was like, this was in the early '90s, I don't know. Yeah, so she couldn't sell her property. She still has it today and with tenants in there that suck, and she can't sell it.

I want to hear your situation that we were talking about the other day. But before I go there, another call from an agent. And I went over there to look at her mom's place. And she said, Joe, I, you know, I'm an agent, but I may have to have you list this property for me. And I go, why? I mean, I can help you. I can walk you through everything. She goes, yeah, I know. But My mother had some, you know, brothers and sisters and, um, apparently they came over before she died. She was on her deathbed and tried to have her sign a will to sign her property away.

Yeah. Yeah. That's the move. Yeah. You, you hold their hand and you—

Yeah. Yeah. And I go, oh gosh, that's terrible. She goes, yeah, I think I need like a buffer in between that. Yeah. So that's why I may just end up hiring you to sell this property. So that you can deal with all the, you know, the drama in the family and stuff.

People get weird. Yeah. Over the inheritance. Yeah. It'll break up families.

What about your situation?

Okay. So this is somebody from the Wholesaling Startup Club. Mm-hmm. Renee. Um, he had somebody at his work who has a property in Las Vegas. They, the, it's the granddaughter's been making the payments on this property. It's a rental. It was originally her grandfather's property. He was the only one on title. And so the grandma's still alive. The mom said that basically the granddaughter could have it and sell it. And so she wants to sell it. She's done with the tenant, with having a rental and everything. So she just wants to sell it, but obviously she's not on title. It's almost like a sub-to, but she never took title. So now I talked to a probate guy since it's in Nevada. He said as long as the grandma's still alive, we can transfer it to the grandma if we have the death certificate, and then she can transfer it to the granddaughter.

Even though she was not on title?

Right.

Because I'm assuming they were divorced.

I don't know. I don't think so.

Oh.

Yeah. I think they were married the whole time, but he didn't have her on title. Is that possible?

Yeah, that's possible. Absolutely.

Yeah.

Yeah. So he, I, he, what Renee got was she was removed from the title. I don't know.

Yeah. Maybe she had bad credit or something and, you know, the lender didn't want her on there for whatever reason. Uh, so yeah, there's gonna be a bunch of reasons why, but yeah. Yeah. I didn't know that last part, but that's still interesting because I think in California it would still have to go to probate. Oh yeah. So that if they can do it that way.

Yeah, that's nice.

That's awesome.

I mean, and we've come across deals in, uh, with the mobile homes in the park where they're just sitting there for almost over a year.

Yeah.

And, and I talked to somebody recently and they're like, well, they're trying to find the next of kin. And then they finally find like the cousin or whoever of the deceased person that they have. They're like, I haven't talked to this person in 30 years, but they're the next of kin. So somehow Like they're first in line to get it. Is that how that works?

Yeah, yeah, absolutely.

So very strange. But yeah.

So anyways, uh, our guest is here, so we're gonna get to him in a minute. But, uh, one other thing I want to show you. So a living trust will avoid probate, okay? Yep. But then I know this is really, really hard to believe, but the legislature came out with a law several years ago now that basically says, um, if you fill out this form— and if you could bring up the form there, uh, it's, it's called a transfer on death, a revocable transfer on death deed. Okay.

Nice.

I call it a poor man's trust.

Oh, thank God.

Okay. Okay. And literally, you put the owner's name on there, and it, then it has a section where Okay, if something happens to me, please give it to these people. Transfer on death date printed. Okay. Kids, whatever. Yeah, that's where they go on. Okay, perfect. And this document gets recorded. Nice. So now it's on title to the property. And then if something happens, they have to follow the instructions on this. Yeah, I think it's a one-page document.

Okay.

Again, I call it a A poor man's living trust. Yeah. Okay, but it works, and it's easy. It's not difficult to do. You can see you can fill it out, print it, and all you have to do is take it to the recorder's office and get it recorded. It's not hard to do.

It's not hard to do. Honestly, that's good. Well, and one of the best things about real estate is you get you get used to talking about tough situations. I have a feeling that's the only reason why these people why people don't. do this. So one, talking about money, and then two, talking about like death. So you're gonna go up to your mom and be like, hey mom, when you die, um, go ahead, can you sign that for when you die? Like, I think people just don't want to even conceive that, but it's really— it's making it easier for everybody.

But it's like, let's get all this in order now. Honestly, I look at it as being normal because we all are headed in the same direction, aren't we? I guess that's true. Sooner than later, but You know, we're all headed there.

People don't like to talk about it.

It's a conversation that you need to have.

Yeah.

You know, it should be coming from the parents.

I know, but yeah, some of them are like, I'm gonna live forever, especially boomers. Yeah, they think they're gonna live forever.

I met, uh, I met for coffee with a young man. I call him a young man because to me he is. Anyways, the other day And, uh, he says, you know, he's tired of his 9 to 5 job that he makes beaucoup money on, but he's tired of that. But he wants to go into wholesaling and wants to go into flipping and all that stuff. And I said, well, what, what's, what's the change? What's, you know, what's the motivation? And he goes, well, I just had my first baby. And I go, wow, this is like normal stuff that I hear all the time. Okay. If you're single, then man, you can do a lot of things. The minute you get married, now you better bring her along. Yeah. Okay. To keep peace in your life. And then you have a baby, and that really changes your life because now you're responsible for another human being. Yeah. And you want to make that person as successful as you are, even more. Right. And so now your mindset changes, and it's like, Whoa, I've got to think about college. I've got to think about private school. I got to think about this and how do I get all these things? Um, but anyway, it's just a normal conversation that I listen to all the time. Right. But that's kind of the, the mindset that people go through as, you know, they're going into real estate and stuff. Love it. Love it. Alrighty, you guys.

So we got our guest here. Yep. He's a busy man. So no worries at all. We appreciate you coming in studio. We, we, this is a, This is the fun part, is like having you in studio here. But let's go ahead and introduce our guest, Travis Kelce Hall. I'm just kidding. No. What's up, Travis?

I'm Travis Kelce's uglier, shorter, skinnier cousin, Travis Hall. Uh, never got to meet Taylor Swift. Yeah. Um, still happily married. Nice. Hello, Maggie. Um, sorry I was late, guys. Do you guys have a Costco membership? They give you samples at the store. And exactly, I got there at 11 o'clock and before I knew it, it was 3:45. Yeah. And I had a belly full of smoked gouda and salmon. Anyway, be careful. Be careful if you get the membership time fries.

Well, and one thing they can't explain is they've had the same, uh, the hot dogs there have been $1.50 for the last 30 years.

Why do you think they are? To get you there.

Exactly.

And the pizza. The pizza's good.

They're beating inflation somehow, though. I don't know how they're doing it, but they're genius.

It's a loss leader for them. It's to get you there, you know? And then you walk out, you know, we've been Costco members forever. And, you know, my wife used to walk out and, you know, it was $100.

Yeah. Oh, yeah.

Now it's like $400 or $500.

You can't visit the snack bar for less than $75.

Yeah.

If you really want to, like, treat your lady nice.

Yeah. Well, I mean, obviously, I'm aging myself here, but It used to be like $100. You spent $100 at Costco, right? Yeah, I did. While you were eating those samples over there, I spent it. But now it's $500.

Oh yeah, yeah, that's 2 things a trail mix right there. It's crazy. Inflation, inflation. That's it. Um, let's go ahead and jump right into it. Why don't you introduce yourself to the guests? Okay. Um, what you were doing before real estate, how you got into real estate, and then we'll take it from there.

Yeah, so, uh, I'm Travis. Uh, I'm 32 years old in 2 weeks, so, um, I'm I'm on the younger side of some people's definition of real estate, but we've been investing for about 3 years. We kind of found ourselves in real estate investing kind of nonchalantly. I sold a scooter on Craigslist to a super successful hustler, experienced realtor. And just by having regular talks as he's loading up the scooter into the truck for his daughter, just casually I asked, hey, You know, what do you do for a living? He goes, oh, I'm a realtor. And I asked him, you know, how's the housing market going? And this is back in maybe September of 2020. And just curious, you know, what are your thoughts on this whole COVID thing? Are housing prices going to crash? Are they going to go up? And he just gave me some really solid advice as far as if you're buying a property for you to live in, it's always a good time to buy. Yeah, properties will— property values will go up and down. But generally, if you hold on to it long enough, you will always see appreciation. You always get tax Benefits, and so we got pre-approved and started shopping. And then about nine months later, we got a duplex. And that was another important thing. He said, "Buy a duplex. Don't buy a condo. Don't buy a single-family residence. Buy a duplex." A year after that, you can if you if you hate it, buy a single-family. Now you have two rental properties for for three and a half percent down. And so that's what we did. Bought a duplex, and that's how we kind of found ourselves in you know real estate investing. That quickly turned into Airbnb investing because when our tenants Eventually moved out. We thought, let's just give this a shot. We threw all of our old junk furniture from our apartment in there. I didn't take camera photos. I had like some experience. I had a professional photographer shoot that. And then we put it up live October 2021. And by November, we had paid our mortgage for the month.

Nice.

And, and this, this would never happen today. The competition's too much. But back then, It went okay. And so that kind of lit the fire is, how can we repeat this again and again and again? And so that's how I kind of got focused on the short-term rental aspect of real estate investing.

Love that.

Nice.

Oh my gosh.

Yeah.

That's cool. I mean, Jesus. I mean, in 9 months, going from talking to that guy to just getting pre-approved, did you go obsessive with learning everything? Listening to podcasts or like, what, like, what was that like?

Yeah, I guess I definitely listened to podcasts. That's what gave me like the courage that Airbnb is not just for hotels, Hilton, Marriott. Anyone can Airbnb. And I guess I'd stayed at enough kind of shady Airbnbs that I was like, I can at least match that. I can at least be a roach motel. You know, I can at least be close to that. And so, uh, and with my wife's help, she can make the place look nicer on a budget. And so, I think after hearing a podcast talking about it, that kind of gave me the courage like, I can try this. And worst case, make it just a long-term rental. That's what it was before. I'll just revert back to that. Maybe charge a little bit more because it's furnished.

Mm-hmm.

And then maybe put something in there like, if furniture breaks, it's up to you to replace. We're providing it. That way, we're not on the hook for The couch broke, the fridge broke, this broke. And so, that was always kind of our safety net. Worst case, we can just go back to there, but it just got better and better. And so, we'd made little improvements and then improved the design a little bit. And so, over the course of a few months, we were able to ramp it up. And one, I think, so that was October 2021. And then that April, I think we hit like $9,500. And then that July, we hit, I think maybe $9,700 just for—

Oh my gosh.

Just for a 3-bed, 2-bath home. And this isn't like a home with a backyard. It's a duplex. So it shared a common wall. It wasn't one on top of the other, but it split down the wall. Nothing too fancy in North Long Beach. Not the nicest part of Long Beach, but people from all over are there for Disneyland. They're there for Hollywood, Universal Studios, visiting family, UCI graduations, all kinds of stuff when they're inputting, hey Travis, I'm visiting from blah, blah, blah to visit there. Everyone just wants to be in Long Beach for the close proximity to everything SoCal. So, it was able to get booked up pretty fast. And yeah, that was kind of our inspiration to keep scaling, keep adding on.

Did you self-manage?

Yeah.

Yeah.

Yeah, definitely.

So, you had to teach yourself how to do that because that's difficult in its own.

Totally. And I think that is something I was— I'm a frugal person. I love to save money everywhere I can, and I thought that's something that I can do. And I definitely learned with on-the-job experience. I made mistakes before, but I also really enjoyed the guest interaction. And so it took me a little while to figure out how to automate as much as possible while still sounding personable, not like a ChatGPT bot or something like that. And eventually I got a little more efficient as far as automating some of the things. Like when I started out, When, when you'd book my home, I would go into the Lock app here. Let me add a unique code for Joe. And what time are you checking in? Wednesday? Okay. Let's check in at Wednesday at 3 o'clock. And then you would message me the day before, our flight lands at 11. Could I check in at 1? Oh, sure. Let me go back to the app. Okay. Now he's going to check in at 1 o'clock or something like that. Eventually I was able to get a little more sophisticated to where if you want to request different time, I can just approve that and maybe add an early check-in or give it to you complimentary. And then auto goes to the Lock. And kind of tie in a few of these systems where it just becomes a little more smooth instead of me, you know, running around like a crazy monkey trying to do all these different things and make sure no one's locked out and stuff like that. Check with the cleaner. Hey, is it going to be ready 2 hours early? I was able to kind of mainstream it. And there's, there's a million softwares out there that can make it all easier. But starting out, I was kind of just kind of glued to my phone trying to be super responsive. And, uh, but yeah, now it's, it is so much easier to kind of automate and scale, add properties. Now we have properties in Memphis. I kind of plugged it into my efficient system. I have some virtual assistants that can help me with messaging after hours and things like that. And so I've really kind of just slowly incrementally ramped it up to where it's been less and less on my shoulders and less and less me kind of glued to my phone because someone may be locked out at any minute to where it's a little bit more passive.

Do you manage other properties?

Yeah, I manage 2 properties here, or locally in Long Beach. And then I manage one in Grants Pass, Oregon. And then, um, actually, yeah, that's it. So I think I only manage 3 properties. The rest I own in partnerships, or me and my wife, and manage those.

Okay. And obviously, to buy your first property, you had to have a job. Are you still full employment, or are you Yeah.

My secret weapon is marry someone who's fully employed. Oh, okay. Just marry someone who's fully employed and then you can kind of play around with your little investing side hustle type thing. My wife lets you. Yeah. Yeah. Luckily my wife, uh, is way smarter than I am. She is way more hireable than I am. Top of her class, very studious, shows up on time when she's supposed to, um, you know, great, great characteristics in a, uh, And a trustworthy person. And so, um, she, she has a great job. And so she was bankable for us. Um, at that time I was doing campus ministry, so I made, I made about $1.75 an hour.

Oh, and, um, that's a lot.

Yeah. And she made, she made great income. And so we were qualified for, uh, you know, the right, the right type of property that we were looking to get into. And Long Beach kind of fit the right demographic as far as close enough to downtown because she was working in downtown that time. And yet not so— we didn't want to be in LA because our realtor was like, hey, do not do LA for rent control. And he told a story.

Good job.

He has— yeah, all this from that great realtor. But he said he had a, I think, a duplex at that time. The couple, an older couple, has been in there and their rent was like $750 a month and he cannot touch it. At that time, uh, I think he could still increase it by 1%. But, uh, shortly after COVID, or half, probably midway through COVID, LA City announced a moratorium on rent increases. So from like, I think it was March 2020 until January 2024, rents could not increase a penny.

Yeah.

Your taxes go up, your utilities go up, your insurance goes up, your rent cannot increase. And so he was telling me this couple that's you know, in there for, I think it was like $700 a month. They will stay. He'll increase as much as he can, 1% or 2% a year, but he will never be able to catch up to market rent. Even if they lived like another 75 years, he would never be able to catch up. And so he says, you know, when, when the Lord calls him home, I'm going to demolish that duplex, make it a fourplex and bring everything up to market. And so that was kind of his little anecdote on if you can't, unless we find a screaming deal.

Yeah.

Do not buy in LA City. If it's tenant occupied.

Yeah. Yeah. We're hearing a lot of stories about that. I mean, yeah, I mean, the people are getting more, the renters are becoming more savvy too, to where you're like, okay, let's do cash for keys. And they're like, we want 50 grand. Yeah. Oh, we want 100 grand. You're like, uh, it doesn't pencil out. Yeah.

Come again?

Yeah. Yeah. So it's getting tricky.

You know, it used to be, hey, you know, we need you to, Leave. We just bought the place. We're gonna flip it.

All right.

You want like $5,000? Okay. No, that's not enough. Well, okay. Well, let me tell you the story. And this was way before COVID Okay. So the story is it cost me $1,200 to get you out, but I'm offering you $5,000. So at the end of the day, if you make me go through this eviction process, I'm not going to give you anything. You may stay in here another 30 to 60 days, but you will get out at the end of the day. And how many times have we gone to court? You know, and you've witnessed all that. It's like the judges, I mean, their hands are kind of tied behind their back at that point in time. It's like, sorry, you guys need to leave. Joe, is it okay if we give them like another 30 days? No, I'm going to give them another 30 days. Yeah. Okay. Why'd you ask? Fine. Yeah, exactly. I just want to You know, see if what you'd say, you know, because if you said okay to $30,000, I'd probably give him $60,000 more. But anyways, uh, yeah, that's the way it used to be. But anymore, like he said, um, it's $20,000, $30,000, $40,000, $50,000 to get out.

And I think there's a lot of people, you know, with the so much information out there that, that can find the right person. Like, oh, are you— does your landlord want to kick you out? Don't be so quick to give up the keys. You know, call Travis today and he can help you. Yeah. You know, $45,000, $50,000, crazy. We recently closed on our next primary. It was tenant occupied. Not in LA, but we were always nervous in the back of our mind. If they, if they, something changes and they become uncooperative, we realized this is just going to be the beginning of a long, expensive battle. Luckily, we got some good advice from some friends and actually friends that had like no real estate experience, but just communication-wise, because I was ready to bring the hammer down. I was ready to bring like the court notice, everything, say, hey, when we closed on this property, we delivered you the 60 days notice to vacate because we're going to live there. Now, if we were buying it as an investment property, we can't do anything to them. But because we were going to move into that, that was our intention. We were able to deliver that. They received it. But the advice we got is just as far as try to be as cordial and on their side as possible. And I think that totally changed the atmosphere of that relationship. They no longer saw me as the people that were displacing them, as the greedy landlord trying to get them out so I can get a higher-paying tenant in there. And I'd visit them every couple of weeks. And then the last month, they couldn't pay their rent. So they're supposed to be out the end of January. Come January 1st, I show up at the door. I texted him, hey, I'm gonna stop by. Travis, I don't have, I don't have the rent for this month. I'm like, oh, that's tough. And the month before, the seller had get paid for their next month's rent. So, they had just gotten a check covering their next month's rent. That was something that we negotiated as like a credit at closing because we found some repairs.

Mm-hmm.

And so, the $6,000 that I was able to negotiate in credit, They said, we'll give $3,000 to you, Travis, and we're going to give $3,000 to the tenants so they can find a new home. I was like, okay. I mean, that's not what I was hoping for. But, but they looked at it as this is going to help you in the end because they can put that toward their next place versus we give you $6,000 and they have nothing to put in the next place. It'd be easy to say, hey, that's not my problem. But I may be in the situation of where I've got $6,000 in my pocket and they're still like, we still have nothing to put into our next property.

Sure.

But They were—we kept it very polite, professional—and I would just keep checking. Hey, how's the search coming process? Do you need help? You know, I am a realtor, and so I would just send them listings, probably the same listings that their realtor was already sending them, but just trying to be open as a resource. Have you have you talked to your friends at church? And eventually, that was the person that was able to give them the next place to move into without having to wait in line. They they had put in tons of. rental applications to all these listings that are available. But by the time they get there, they'd say, we're already 7th in line.

Right.

They already have so many people ahead of us. We've got 2 kids. They went with the family that has no kids. So it'd be quieter, less wear and tear. So that was kind of the sob story that they kept hearing. But eventually, just by word of mouth, they were able to find a person that said, my property is going to be available next month. I'm gonna put some new flooring in there and some paint. But If, if your credit checks out, you'll be number one on the list. I won't even, I won't even put it on the market. And that was the one they got in on. And so luckily they were able to get out on time. I kept their security deposit kind of as that last month's rent and they left the property in great shape. You know, I was always nervous. What if they just leave it in a mess? I got their security deposit to pay for rent, but nothing for repairs. Luckily everything went smooth. They didn't trash the place as a kind of a final sendoff or anything. But yeah, it could have totally gone the other way.

Uh, let me, let me give you some advice, uh, because we buy properties with tenants in it. We buy properties with owners that are staying. Okay. You know, I'm sure as a real estate agent, you're aware of all that stuff, but, uh, especially when there's an owner in it, we always hold back a pretty substantial amount of money in escrow, $40,000, $50,000.

Okay.

To make sure that they move and I mean, you can ask Alex. We had one guy in Huntington Beach. He literally stayed till the last day and then he extended it by 2 or 3 days. And, you know, I said I was the bad cop in that situation and Alex is always a good cop. And I said, sorry, but you just lost your 50 grand. And, um, he had always promised during the transaction and he stayed there for 2 months. You know, Alex, you're such a nice guy. I'm going to take you out to lunch and all this stuff. He never went out to lunch with him, but anyways, so I said no. And, And then he called me and he goes, you know, I talked to Alex and Alex says, he's, you know, I think you should release the money. And so I was gonna give it anyway, but I finally did.

That is so great. But he moved out.

Yeah. You know, but 2 days later. Sure. You know? And if it was anybody else, they probably would have kept the 50 grand. Yeah.

Yeah. I think that's so cool that you guys were able to tag team it. He had an ally that he could talk to and to kind of coach him how to get out of there.

They were best friends.

And he had the fear of Joe, you know, him out and coming with a sheriff, withholding, uh, you know, $50 grand of his own— of the money that, you know, that should be his, but he stayed there. I think that's great. Yeah, I think that's awesome.

Yeah. And then the same thing, uh, with tenants in your situation. Instead of giving that $3,000 back to them, that should have been held in escrow.

Yes.

That should have been said.

Thank you.

Yeah, that should have been like, oh no, we're leaving it there. When you move out, We'll sign a piece of paper to escrow saying you're going to get paid the funds.

Yeah. Yeah. So in the future, I wanted that, but we kind of found it after the fact. And then the listing agent said, they're the— I guess the method that they did that, that was the only way to deliver it. So that those funds, according to them, had to be released. I think just before closing. Now, I don't. I should have like double checked or triple checked that. Maybe that was their. They're like, oh, our our our legal team said that's what that's what we had to do, or that's how you do in California. I wish I wish I would have pressed them harder. Yeah. Hey, let's let's double check that. Yeah. Not true.

For sure. What are you trying to get? Just remember, everything in real estate's negotiable. Yeah. Yeah. You know. Yeah. And you always obviously want to fight for your side. Mm-hmm. You know. And so it's negotiable. And if they agree to leave it in there, which they should. Uh, you should have also gotten credit for the deposit that they had on, uh, the seller. Okay. So you're getting all the normal stuff. Yeah. Why give somebody $3,000 when they haven't performed, which is moving out? You know, it's just like that didn't make sense.

Take away all the incentive of cars leaving in good shape, you know, paying rent on time.

The other thing I was going to tell you too, is when I was, um, Buying houses at the courthouse steps, and we were knocking on doors, and it's like, "Hey, we bought your house. You know, here's here's your choices. You know, you move out. That would be awesome. This weekend work for you? If not, then okay. What do you need? Well, I need like thirty days, Joe. Okay, well, I can give you I can give you thirty days." And back then, we weren't even offering cash for keys. But you know, let's say I can incentivize them and say, "If you move in two weeks, I'll give." $3,000 or $4,000. And, you know, back then it was way less, uh, rent than the prices. So sometimes they take you up, but then you'd always have those. Yeah, no, I'm not moving, Joe. Yeah, I've been here forever and I'm not moving. Okay, well, here's your— here's, here's what's going to go on then. You know, I don't want to be mean. I'm just telling you, this is my process.

Yeah.

Okay. I get— I pay my attorney, you know, $1,200 to get you out in eviction. Which is pretty quick in Orange County, not LA, but in Orange County. But I want you to know that the minute that I file this paperwork and he files it with the court, it sticks with him. That sticks with you for the rest of your 7 years.

I think it could get removed later on. But yeah, the next place you go to rent at, oh, sorry, Joe.

I see this mark on your rental history. So not that I want to scare them, but I want to scare the shit out of them. Yeah. You know? It's like, wait a second, I want to do this the easy way, but if you want me to put a blemish on your record, sorry, that's your choice, not mine.

Yeah.

And I would tell them, you know, it's like, you're moving in 30 days, okay, we're gonna file the paperwork now, okay? Because I, I, you know, I can't trust you. Yeah, yeah, I don't want to lose the time.

Start the process.

So start the process. I can cancel it anytime. And it won't show up on your record. Yeah. So on day 31 that you're telling me you're moving in 30 days, we'll cancel it. Yeah. And everybody will be happy. But on day 31, if you're still here, that's on, that's on you. We're moving forward.

And I think that, like, that sounds like tough love. That sounds like you're, oh, you're just being a hard landlord. Like, have some compassion. You being that way is saving them so much down the road. Because by putting that fear in them, that saves them from tarnishing their rental history. So then the next place they go to, by being soft on them and them thinking, I can extend 30 days, 60 days, 90 days, at that point your hands are tied. You're like, I'm paying this mortgage. I have to get them out and I have to use legal action. They will have no chance of getting anywhere else. So by being tough up front, you are actually helping them so much down the road as far as their other rental options being available, them looking, uh, looking like a qualified renter. I feel like it's like, uh, paradoxical, if that's the right word, or it sounds contradictory, but you're so much helping them.

I think so. But anyways, yeah, um, thank you for that. I appreciate it. Yeah, what people don't understand is, um, there's a very high percentage of Mom-and-pop people that own properties, you know, it's not necessarily these big corporations. They started doing that a few years ago, but mostly it was mom-and-pop. And I'd literally get calls like, uh, Joe, yeah, I need to sell my house. There's a tenant in there. And I go, okay, uh, when's the last time you raised the rent on them?

Oh no.

I've never raised the rent on them. They're so nice people. We love them. You know, it's like, Okay, so what you're telling me is you're treating this like they're your best friends instead of treating this like you're a real investor and this is an investment for you. And that's how you need to treat these things, you know. Um, you need to, especially nowadays because they've got kind of rent control on properties, you need to raise it however much they let you raise it every year. Yeah, I used to do the same thing. I would say like Yeah, it's been like three years since we raised the rent. You know, it's like I think it's time to raise the rent, and I fall into the same trap because that's how you learn. You know, but please treat this as a business if you're going to buy rentals and treat it as a business.

And the shock that they get! So so tenant moves out of your house who's been there for ten years, happy paying $750 a month for his three bed, two bath place in SoCal. Now he needs to go find another place to rent. It's now, it's now $4,500 or it's now, it's now $3,800. That's, that's 20 times what I was expecting. Like, just, just shocked, you know, as if they're not already aware of the increasing gas prices, grocery prices.

Sure.

But it's like, they may even dig their heels in more because they're like, I can't move anywhere else. I've already budgeted that $750 a month. I can't, I can't spend $3,000 a month. I'm not rich. But they're just totally out of touch with the cost of living in Southern California.

I used to do a lot of short sales in, uh, 2008, 2009, and I'd only have compassion for one seller, and that was the one who bought it at the top of the market. They bought it at $500,000, and now this condo is worth $100,000. Oh, dang. Okay, and I have compassion for you. But then I would have people that were You know, in short sale situations, when did you buy your house? Oh, Joe, I bought it 20 years ago. I go, okay, so why are you in trouble? I refinanced it. Okay. They were, they were using their house as an ATM machine.

Oh, wow.

Is what everybody was doing. And I go, well, what'd you do with the money? Oh, I had a good time with it, Joe. It's like, come on. Yeah. You know, but now I'm in trouble. Now it's upside down. I go, it wasn't when you bought it. You know, whose fault is that?

Well, you want to have a good time sometimes, you know?

I guess. Yeah. I mean, we all can't live in Hawaii, you know?

Oh my gosh. Okay. Well, that's— yeah, there's a lot going on with that. And I do want to talk about the new place because like your videos are amazing on how you're working on it yourself. And the, the— I was telling Joe you're doing a live and flip. Yeah. Um, before we go there though, let's, let's jump to You have your short-term rental here in SoCal, and then you just go to buying out of state. So what does that process look like? Because I think a lot of people are freaked out about that. I think it's more common now, but what's the sort of mindset you have to—

Yeah. So the backstory of a lot of people— so we have 12 rental units in Memphis that we own and operate there. A lot of people ask, how did you find Memphis? Or what's so special about Memphis? There is nothing special about Memphis. It was just the city that we— it was in Tennessee, so a landlord-friendly state. Memphis is not a vacation market, whereas Gatlinburg, Pigeon Forge are very, very seasonal markets. A great opportunity, but me and my business partner, we're looking for something that's going to be stable 12 months out of the year. And so Memphis happened to check those boxes. There's probably 125 other cities that also check those boxes. But we just like, we just started looking at properties in Memphis. And so, um, started looking around there, talked to a few realtors, found one realtor, made offers on all different types of properties and, um, uh, had some good conversations with a handful of realtors. But we found one realtor who, uh, was representing a 5-unit building and we told them we'd like to do something with creative finance. And that was, that was newer to me. In theory, it sounded great, but I had zero experience. But my business partner, very familiar with that. And so we told him what we were looking for. And eventually, this 5-unit deal we were trying to negotiate, the seller wanted too high a price, couldn't work on it. Well, a few months later, that realtor says, you know, I'm trying to sell my home and I'd be willing to talk terms with you guys. And so we bought his 5-bed home. In a great part of Memphis. It's almost on a 1-acre lot. We bought it furnished, designed beautifully. Him and his wife did a great job on the interior, accent walls, things like that. We did some improvements, but that's how we got our first— that was our first out-of-state property. It was our first partnership property, our first subject-to property. It was a lot of firsts for us. And That same agent then brought us our next deal and then brought us the next ten doors after that. All all creative finance, all subject to. And in the last deal, we brought zero. We technically brought zero dollars to the table because we we were we had we negotiated for the seller, and this was the same unit that we initially found that we wanted to get that five units. His price was too high. What property sat on the market for? 9 months. And then we were able to revisit, could you work a little bit on the price or the terms? He dropped a little bit on the price, but he just gave us all the terms we wanted. We said, we want this property for no money down. And he said, okay, let's do it.

All you have to do is ask.

What's the worst that's going to happen if you say no? No, they slap you? No, no, no.

They just say, no thanks. Yeah. Why you— did you go visit the property? Oh yeah. Yeah. While you were there, did you run into Elvis? By any chance?

We did not go to Graceland, and I have yet to be go in Graceland. But a lot of my guests do. A lot of my guests like to go there.

Yeah, you should go to Graceland. I've been.

You like it? You recommend it?

Oh yeah, absolutely. Okay. Yeah. I mean, Elvis was like maybe ten years older than me, so I grew up with.

I wouldn't believe that, Joe. I thought he had you by like forty years. Really? Thank you. I like this guy. But he was good. He was born in 1899, right? Yeah. He's still alive though.

Yeah, him and, and, uh, Tupac and Michael Jackson, you know, they're all running around doing their thing, singing and all that stuff. Yeah, you know, they're in Area 51 or something like that.

Yeah, that all checks out.

That's awesome. Oh, thank you, man. So is your business partner also a real estate agent? How did—

he's a realtor investor here in, uh, SoCal. His name is Nick Hedberg. He's an awesome agent, uh, in LA. And, uh, yeah, so he found me on Facebook. What a creeper. But like, it was just, I think, I think I posted something like in a seller finance Facebook group about, uh, me with my short-term rental experience and looking for certain types of properties. And he just hit me up and said, hey, you know, I'm also, I also want to invest. I don't know anything about short-term rentals, but, but let's look at some deals. So we looked at deals in Orlando. We looked at, we were in contract on a home in Pittsburgh. Nice. We just kind of talked, realized we were a good fit for each other. He had great investing experience out of state. He already had some properties in St. Louis. You know, he brought things to the table that I didn't have. And then I had short-term rental experience and could analyze deals specific to short-term rentals. And so we kind of complement each other's weaknesses and said, hey, let's, let's try this out. And we just started looking at properties together, analyzing deals, and eventually we found ourselves ready to put an offer on that first property and then the next and brought another investor to help with the next property was a subject to, but the seller wanted so much that it wasn't really going to cash flow. And so as much as we wanted to, and so I also wanted to make some money managing it. So I was able to kind of negotiate, we'll buy this property. I don't want to bring— I'm sorry, I didn't want to bring a dollar to the table on this next one because I was quickly You know, putting money into these deals, you can go broke buying good deals. And so I said, I'll manage it for free, but I want to be a part owner of that. And so we brought in some— an investor for that. And, and then the next deal, we got the 2 5-unit buildings. So now we're up at, up at 12 and managing those. But it's been fun. It's been stressful, though, you know, managing properties out of state, having a 2-hour time difference. Yeah, like, I'm not a very organized person, but this has forced me to be very organized and Systematic. And, and, uh, yeah, I feel like doing— knowing what I know now, a lot of people could do it, but they could also save themselves a lot of the heartaches of discovering issues that could have been avoided in the first place.

So I, I want to go back a second. If I heard correctly, you started real estate investing 3 years ago?

Yeah, we bought our property. Is that right? April 2021 is when we closed on our first property.

And starting 3 years ago, because I get lots of people ask me about, you know, okay, what do I do, Joe? What do I do? And I always tell them, I said, just do, just start. Yeah. Is that what you recommend? I mean, I am— 3 years ago, you're listening to a real estate agent because you sell them something. And here you are today, you know, Airbnb manager, you own multiple properties, you're doing a live and flip. 3 years. And probably during I would say pretty tough times now, you know?

Yeah. I, my, my personality is like ready, fire, aim. Okay. That's, I'm, I'm, I'm, I guess I'm a doer. Like I just, I like to get my hands dirty. I like to get started. My wife is probably the pretty much like opposite of that. Let's do the research. Let's, let's talk to 75 people that have bought a property in Long Beach before.

But that's good.

Let's talk to some people that have had their houses burned down by Airbnb. be and figure out if we really want to do it. So she's very, very careful. And I appreciate that she kind of balances me. I'm on the other side of let's, let's jump in and let's figure it out. Um, that has burned me in the past, but I feel like for so many people, uh, just jumping, get started. I think a lot of people don't give themselves enough credit or don't, don't, uh, believe in themselves enough that people are pretty adaptable. People are pretty resourceful. And if you can If you're willing to step outside your comfort zone a little bit, you'll find that you can surprise yourself. You can problem solve pretty good. You may not, you may feel uncomfortable if someone puts you on the spot, but I'm pretty sure you'll be able to figure out how to help a guest get into the house when the batteries are dead in the smart lock.

You can't be afraid to fail either. Totally. That's, that's all about life and investment as well. It's like, and I am just so happy to hear you say that your wife is the other You're opposite to your yin and yang.

Yeah.

And Alex is the same. And, and I don't talk to Alex anymore. Alex gets all the deals and it's like, Joe, we can do this one, we can do this one. I have to talk to Lauren.

Okay.

You know, because Lauren is that steady level person in his life that says, let me evaluate the deal, let me do this. And if Lauren says it's a go, I'm in. You know, it's simple as that.

Lauren's the gatekeeper.

She's the gatekeeper. Absolutely.

Really, I'm just looking at Joe like, Oh yeah.

They're like, all right, this one passes. I'm like, trust me, we could do it. Oh man, that's great. Are the 5 units, are you running those as short-term rentals or those?

Yeah.

Okay. Wow. I think all— so it's 2 5-unit buildings. So we got 10. I think right now all but 1 or 2 have guests in them. And some of them are even midterm rentals.

Oh, amazing.

So that was something that we weren't totally expecting. We were Picturing all short-term rentals, people vacationing there. Memphis is not a vacation town. The 2 first properties we got are 5-bedroom properties on large lots. We get mostly vacation people for their family reunions. They're visiting, there's a graduation in town, they're visiting grandma and grandpa, blah, blah, blah. They're usually there for about 4 nights. Our other 1-bedroom and 2-bedroom units, those will, I think, average closer to like 10 nights because people are there for a conference, they're there for work. And I mean, there's a lot of industry that's happening in Memphis. And so we get quite a bit of people that are there for several weeks at a time. Our longest stay is, I think, checked in in February and she's still there.

Wow.

She just sends me cash Every couple of days to keep extending it. So I kind of just block the calendar out for her and she's just there working. And a few other people are in the same situation.

Nice.

And so these smaller units, I think, are more suited for professionals that are traveling for work. They're not there with their kids. They're there to work either solo or with their partner. And they don't need 3 or 4 bedrooms. They need a bed and a bathroom, shower. That's all they need. Those are— we kind of discovered those are most of our clients for these smaller, smaller units in Memphis.

That's great. Yeah, that's it. I mean, I mean, how much analyzing are you doing on that as far as like, are you looking at it, this has to be— this has to work out as a long-term rental, and then if it's a short-term rental, then that's, that's the cherry on top?

In an urban market, you can, you can kind of have that as your safety net. You can have a long-term, like, hey, if all else fails, We can do long-term. In a vacation market in Joshua Tree, there's not a whole lot of vacation homes that pan out as a short-term— that pan out as a long-term rental.

Okay.

Because unless you work in Joshua Tree and the property you're staying at is set up, it's nice, it has all these amenities, so you have higher costs, it's not going to— you may be losing $700 a month as a rental, you know, for a long-term rental. So some, in some markets, some properties only make sense as a short-term rental. And that's not a bad thing. Yeah. Same thing. I think Tony Robinson said this, like when hotel developers look at a new project, they don't say, hey, could we, could we run this as a long-term rental if this doesn't work out? Yeah. It only makes sense as a short-term rental.

Totally.

And it does make sense for them as a short-term rental. So it depends on what market you're at and how, how The type of property as well. Like a 5-bedroom property would not fit for a long-term rental for a lot of people. Yeah. Only for a very small amount of people that have 10 kids with a need. For sure. You know, that many beds and baths.

Yeah, absolutely. Okay. Are you looking at any other markets? Are you going to expand Memphis or where are we going?

Right now, I feel like my head— I'm like not trying to keep my head above water, but there's been so many repairs with the Memphis building, with the home that we just moved into. I haven't really been looking at any other markets. I'm just trying to get those ones stabilized and profitable before I think of looking into putting into another market. I don't want to buy another Memphis property. I promise you that just because we have way too many eggs in that basket. And it's great right now, but our portfolio is too small to add another Memphis property in there. We want to be more diversified.

Like that. Okay. Yeah. Um, I mean, it, it on, I've been seeing on YouTube where people in the game that are like short-term rentals, I'm selling all my short-term rentals. What are your thoughts on that?

Uh, like saturation, right? Airbnb bust. Yes. Yes. All, all these things. Uh, there will always be a demand for unique professional properties. There, there will always be someone willing to pay top price for a unique property that stands out. It's all the small, average, mediocre properties that the market's been flooded with that are left with an empty calendar. So, so that's why I think, um, it'd be like Airbnb. If you're going to Airbnb, you need to like have enough of a budget to, to stand out from the start so you can be unique versus jumping into the middle of the pack and being forgotten. That's kind of, that's kind of my take on Airbnb.

When I was flipping properties and buying them at the courthouse steps, there's a gentleman that was buying properties around Disneyland before any of this Airbnb craze. And it was just starting. And he literally turned all his properties into Disney-themed. Properties. And, um, obviously, obviously now they put a moratorium on it and all that stuff. So, um, I don't know that his were grandfathered. I think I'm going to assume that they were, but that's what he was doing. He was buying properties at the courthouse steps right around Disneyland and he was turning all of them into, uh, Airbnb.

Yeah.

Yeah. And so I understand what you mean about, uh, you know, specific Uh, to that area. And if you can cater to the professional, whoever it is that's coming, yeah, uh, you would benefit from something like that.

I was just speaking to a client a couple of days ago. They inherited a multifamily in Anaheim, a few blocks from there. And they called me and were so excited. We're going to turn this into an Airbnb. And I hated to pop their bubble. Yeah. And I said, you know, check the laws. Laws are changing all the time. Yeah. Right. Right now in Palm Springs, no Airbnbs. It's only a matter of time before that's not— it's not no Airbnbs. They put a ton of restriction on Airbnbs. It's only a matter of time before they open up the gates again because that's traditionally a vacation market.

Right.

But in Anaheim, I said, check the rules. Last time I looked at it, they are not allowing any more new short-term rental permits. And then if you have a short-term rental permit and you sell your property, they will not honor it. So like you can be grandfathered in, but as soon as you go to transfer it, it doesn't work.

Yeah, it disappears.

And so I was telling them there could be other strategies, like you could do the midterm rental, but you already have to picture the people that are staying there for 30 days aren't going to be at Disneyland for 30 days. So I mean, you kind of have to change your whole thing. If you're going to go all cutesy Disney, that could still work for a midterm, but don't put the same budget. Don't be expecting short-term rental income for 30 days. When they're booking it for 30 days at a time, they're not going to Disney California Adventure, you know, all 30 days.

Yeah, correct. Gosh, that you'd have to take a second out on your house to stay at Disneyland for 30 days.

That's what your client did. They bought their property 20 years ago and they're upside down. They're like, hey, we went to Disneyland. We lived there for 2 months.

Yeah. It's like, I think that the tickets are like $1,000 or something. Season tickets or whatever. It's like, man. That's, that's a lot of money.

Yeah, that's just to get in the door, and then once you're in there, it's, uh, it's over. You want a water bottle?

That's $17. Yeah, yeah. $20 churro.

It's got Mickey ears on it. Yeah, here, your grandson loves it, doesn't he?

That's what it is. Yeah.

Grandma, can you buy that for me? Yeah, okay. Grandpa's not here, so we're good.

And, um, sorry, when I, when I was prepping for this, I had a couple of tips. Is it okay if I Yeah, just a couple.

Absolutely.

Out-of-state tips that I think a lot of people are terrified of looking to properties out of state because what do I do when XYZ breaks there? You know, there's so many things, but I came up with just a couple of things that I think would help anyone. And I'm sure you guys could add on to this. But the first thing I thought of that was helpful to me is we talked to— we found our super agent. We found our agent who was the insights, The boots on the ground has lived there for years, knows neighborhoods street by streets. That saved us from our California price glasses looking thing. Everything's a great deal. This is amazing. Yeah. How many bedrooms is that? Yeah. Oh yeah, there's a there's a shooting next door. Who cares? You know, the the realtor there would say, "Go for this street. Don't go first south of that street." This is a good area, but it's around like he was our local knowledge that saved us. You know, so many wasted offers and terrible investments. So, and the way to find that super agent, I think, is just talking to 5 or 10 agents, being and working with the ones that like want to work with you. The agents that are too busy, they're not really going to be like paying attention to you because they have so many other agents or clients to work with. If you're looking for seller finance deals, they're not going to waste their time, right? They're going to be looking just the ones that are on market, the ones that have the, you know, the 3% agent commission and just keep on turning like that. But eventually we found an agent. We told him what we're looking for, and all he does is send us those deals.

That's crazy.

Owners that have equity in the property, they don't need the big payout right away. They're okay if they hold an 8-year note for us or a 10-year note for us. They're okay if they make 3% or 4% or 0% interest on the money That they lend us. That's amazing. So that first agent I think will solve is actually kind of like the key even to these other things. Like, what do I do when something breaks? Well, I'm sure that super agent has ten contractors and then has fifteen handyman to work with. So my next thing would be getting those verified boots on the ground repair people that can do all types of things. It's great to have a more expensive kind of like robust option. The group that can add on a bedroom license to go through all the permits, you'll pay more for that. And it's also good to have the cheaper handyman who charges you $30 an hour to put your furniture together or to, you know, go work on swap out light bulbs and things like that. You don't want the big contractors doing that and charging their electrician fees. And so that would be my next tip is get those verified recommendations. We have experimented with TaskRabbit. That's okay for like finding little odds and ends. Mm-hmm. But that personal referral, just like as an agent, speaks— is like the highest compliment you can get is when someone personally refers you to another one. That's such— like, that carries weight with it. And so same thing with some of these recommendations. Oh, work with Daniel, work with Dylan. He's a great— you know, he's really dependable. And then having backups. These great people, they have jury duty, they have families, they get sick. And so only having one person that's kind of the The single point of failure is a great pitfall to have. So, and that's stressful. Oh, there's there's only one person who can fix this, and he's having engine trouble. Ah, I'm never investing out of state again. I'm selling off everything. You want you want to have multiple backups, right? So you're not in that in that pinch where you're just helpless. And then the last thing would be make a plan to visit that property once or twice a year. I think if you can do that, if you can see it yourself, you'll get that you'll see the things that. that people are missing. And you can just add that to your to-do list for your handyman to do next time when there's a vacancy or a tenant moves out or something like that. And then right off that trip is a business expense. So you're traveling for free.

Nice. Love that. What are some things, I guess, that you've seen when you go to the property and visit it that you end up adding to the list?

Probably like scuffs on the wall.

Okay.

It's not so big that it'll pop up in a guest review. Travis's house was nice. there was a bowling ball-sized hole in the drywall. Like, that would pop up. But like, when people bring their suitcase up the staircase and it kind of scuffs it, it's not enough to make it in the review. And so in my mind, it doesn't exist. But for all the guests, they see it and it kind of lowers their—

Sure.

Oh, my experience was okay, but there were scuffs on the wall. And so little things like that, the big things get noticed right away. Like, hey, the power's out, you know, things like that. But some of these smaller things that That your handyman might not bring up or your cleaner might not bring up, but you as the property owner, you care about the details. And so by visiting there, you see some of these smaller things. You can also plan out, like in the backyard, we're going to put in custom-built mini golf platforms. Not huge.

Nice.

Nothing like PGA, but something that's elevated off the ground. And we're going to kind of plan out where those go in the backyard. And that's something that I enjoy, and that's something that only the property owner could do. I wouldn't want to say, hey, build these things and then, you know, throw them wherever you want. I kind of want to take pride and say, hey, this would be good. It's in the backyard. There's privacy back there. They can, you know, chill on the back porch and have their little barbecue. So there's, there's, you know, things that only you as the property owner can kind of shape the direction of that property.

Love that. Do you have like favorite places to visit in Memphis now when you go there?

Bro, every time I'm in Memphis, I guess I take it so much, like, so seriously that it's just, I'm just doing like house stuff. So, 99% of my time there is just working with the handyman or finding these things, or I never have visited Memphis as like a tourist.

Right.

With one exception, we went to the big Bass Lake Pyramid.

Okay.

So, that's the, I think that's like the second biggest pyramid in the world is in Memphis. Oh my gosh. It's like this huge— it's called Outdoor World, owned by Cabela's. But it is, uh, that was like the one touristy thing I did. And that, I mean, they're putting a Bass Pro Shop here in Irvine.

Right.

So, it's not like, oh, go to Memphis to go to Bass Pro Shop. But, uh, I haven't been to Graceland. You know, there's— I've eaten at a couple of like barbecue places there, but I, I would love to go visit and have enough time to like get the true Memphis experience. So, even I could like recommend that to people that are visiting from out of town rather than just, oh, on Yelp it says go to, um, this is a highly rated Starbucks, great for great coffee. It says, you know, I want to be able to give like Actual local recommendations where they appreciate that someone went out of their way to find this great little gem that's not like on, you know, TripAdvisor. You don't just Google it, pops up first thing.

Love that.

Elvis is buried there too.

Really?

Yes.

And he was born there, wasn't he?

Yeah.

And he still lives there, right?

Yeah, he still lives there.

Yeah, yeah, there you go. If you're an Elvis fan, boom. All right. Well, let's bring it back to SoCal. You got this live and flip.

Yeah.

Obviously, you and Maggie are still together through this whole thing. You haven't driven her wild.

She's been awesome. Yeah. She also has nowhere else to move to. So she's just happy for the time being. The most recent catastrophe I sent her through. So in 1950, when all the houses on our block were built, the code was no insulation in the walls, no insulation in the attic. And, uh, putting insulation in helps with the noise outside, also helps with regulating the temperature. So the first couple days that we moved in there, we didn't have heat and we didn't, uh, have like AC. And so like we'd wake up in the morning, take out the blankets, and it'd be like 55 degrees in our house in, in like the end of February. And so like, we were really, really cold. And so we started to like, wanted to put insulation in the walls. And so I got a couple quotes, but for things that I can do myself, I enjoy getting my hands dirty, enjoy learning about it. So I just said, I'm just gonna knock some holes in the wall between the stud bays and then put insulation in there. Uh, and that was going great. I was going absolutely perfect. But then I forgot I opened up a little Maybe a hole about this big in the kitchen on the inside because I added an outlet. I wanted to put an outlet on the wall there because eventually we have a bar there. And I forgot to plug it up so that when I was on the other side blowing in insulation—

Oh no.

Usually it takes about 90 seconds to like fill a stud bay 'cause it's just blowing in the cellulose like, and then you can kind of feel it. Fill up, and then the hose starts to back up because it's stuffed. Well, I'm up there doing this, and like ninety seconds go by, and it's like nothing. Oh, this must be a bigger one. You know, another twenty-five seconds go by. I'm like, this is taking forever. And then the person who's working on like filling the machine, I almost told them like, hey, open that up more. This is taking too long. And then, and then for like, I think I turned it off, and I like stepped down. I looked through the kitchen window. There's a pile almost 3 feet tall of insulation in the kitchen, because it blew through that little hole. That was the path of least resistance. And my kitchen, my entire kitchen got instantly powder coated with that cellulose fiber. So, there was— and my coffee machine was open. They got sucked inside there.

Oh, geez.

It went everywhere. And we will probably always find Little pieces of that cellulose dust, probably for the next 25 years. It got everywhere in the kitchen. And so that's that morning I texted Maggie, do not come to the kitchen. And she said, what is in the kitchen? Just don't go in the kitchen. It's that simple. Yeah. And so that, that was the most recent catastrophe. Most of my accidents aren't that bad, but, um, it just, it made a huge mess. It cleaned up pretty fast. It wasn't like, uh, you know, because it was, it was so light and fluffy. A shop vac sucks it up really fast, and so we got we got 90% of it out in the first minute. Got the last little bits, but there will probably always be little traces to remind me. Check check your check your wall for holes.

That's great. No, it's cool, man, to like follow along with you and you showing everybody. You're like, "I don't know what I'm doing on this, but we're gonna try it out." You know?

I mean, that's that's that's my attitude. Just like hey. You can pay top dollar and have it done for you, or you can kind of experiment and learn for yourself.

I think I found the video. Okay. Is it this one?

That's it. Okay. Oh, the sound of it.

Oh, here we go. Still nothing.

Here, I'll just narrate. I know this guy. My name's Travis. I was blowing insulation and I forgot this little thing.

Oh, it's serious.

It's a fine powder too.

Oh my God. Oh my gosh.

That's amazing.

Oh yeah, that's fresh powder.

If I did that, I would immediately start crying.

Yeah. Wow, you're brave to even post that.

You know, I was, I was so frustrated that I, I jumped off the ladder Yep. Look at— I was so frustrated and I was like, oh my gosh, Maggie's, Maggie's, uh, really sensitive to dust. And I was like, this is going to kill my wife. This, this will be like on her tombstone. Like, do not allow your husband to, to self-install insulation.

That's insane.

But, um, yeah, it was, it was able to— I panicked and I was like, no, this is actually a pretty, pretty quick cleanup. And so I was like, if I don't record this, this stupid mistake will all be in vain. Yeah, and so I was just like, you know what? Let's just let's just record that. That's kind of my attitude.

Yeah, it's so cool. And then it makes you think you're like, yeah, I could you know I could do that. Three feet of water in my basement. It's fine. Figure it out. Oh man, that's cool. And so I saw you talking about the other day. You you guys bought the first property on FHA. Did you do that on this one?

This next one we just did a conventional loan.

Okay, okay, nice.

I'm trying to think there. So there are some strings attached when you do an FHA versus conventional. One big thing I missed out on is when you FHA, there's primary mortgage insurance, there's mortgage insurance always when you don't have enough, bring enough money to the table.

Mm-hmm.

And but with FHA, that mortgage insurance will never come off, even if your balance is 75% paid up, that you will still have mortgage insurance on there. Whereas with conventional loans, almost always You can check with them as you as you get equity in your in your property, it'll it'll fall off automatically. And so with this with this other one, we just have a conventional loan. I think we did we did five percent down. I was able to put my agent commission towards some of the closing costs, so we didn't have to bring as much cash to the table. Perfect. But yeah, but it's crazy. Our FHA loan that we got in April 2021, 2.65 percent. Wow, nice rate. We should have we should have refinanced. Just a few months later into a conventional where the PMI would have come off. I didn't know that. I had no idea. I wasn't even thinking about that. But the property that we just bought, 7%, I think it was like 7.2% interest rate, something like that. The loan amount is way smaller. Our mortgages are almost identical though.

Yeah.

It's crazy. It's like we borrowed almost half as much money. Our mortgage payment is almost identical.

It's crazy. It's like all interest too.

Yeah, exactly. When you look at the mortgage breakdown, the vast majority— not especially in the beginning, a huge amount, it's just all interest.

Yeah, yeah, yeah, yeah. Gotta love that amortization. Yeah, yeah, yeah. So you're just like, I'm just gonna keep the, the, you know, the 2, 2.5, you know.

That was my like loan officer's advice, like just keep it. But, but there's also a cap on how much mortgage insurance they can charge you. And so, so The FHA guidelines is they can only charge 1.75% of the total loan amount.

Okay.

But, and so you pay that off as long as you have the loan. But I think it'd be good to double-check to make sure you're not overpaying. Because I did the math for mine. I should be paying somewhere around $18,000 for mortgage insurance based on our loan amount. But we have a pretty hefty PMI payment each month. So I wonder if there's other fees that are in that. Joe, do you have any I'm sure. Insight on, on how that is?

Yeah, I don't do loans. I send it off to my lender.

Yeah, yeah, I definitely want to check with that. And, and one of my buddies, he had an FHA loan and they were able to remove PMI off it. This was in Tennessee, so maybe, maybe state by state. But, uh, if you don't ask, the answer's always no.

You're never gonna know. And I, I would check because I've always heard that you could take PMI off here in California.

Okay.

You just need To have an appraisal done, and it needs to be you know thirty percent equity.

Okay, gotcha.

So seventy thirty. Okay. Split. Yeah.

Oh, very good.

Okay. We're dealing with some technical difficulties here. Yeah. So well, I'm very impressed with you. You've come a long way in three years, kind of like Alex. Um, you know, I don't know what happened at COVID, but everybody was at home for a while, and then like everybody woke up. Yeah, like after COVID and said, oh geez, I get— I better— let's get this money. Yeah, let's go do something.

So for sure. Okay, we got some videos we're gonna play here, and I want to get your commentary on it. Okay. And then, uh, you know, okay, bear with me.

Let's see if the sound works. Works on this one. Oh no. Okay, one second.

There we go. Give it a little volume.

Okay. Have to do with Taylor Swift. So the IRS Section 280A allows for people to put their primary residence on Airbnb for up to 14 days and not have to report that income that they've made for those 14 days. Several years ago in Augusta, Georgia, People would be putting their primary residence on the Airbnb—

For the Masters.

So that they could take advantage of all the tourism, all the staff coming into the Georgia Augusta area for the PGA Masters. So when Taylor Swift comes into town and you know all the Swifties are going to bring their money with them, don't let them stay in a hotel. Let them stay in your house that is perfectly curated for Taylor Swift, and they will pay a premium To stay in your place and for that whole experience. So the next time Taylor's—

Is that what your place looks like?

Exactly.

Because you're a Swiftie.

Yeah. So, so yeah, let's, let's talk about that really quick. So this is how Travis and I met. We, we went to—

At a Swiftie concert?

No, no, no. We went to a costume, we went to a costume, uh, meetup, STR meetup that John Shefsky puts on.

Oh yeah.

And we show up and I was like, oh my God, she's just the same as you.

So Lauren's like, oh, this will be an easy costume.

And then next to her is like Travis. He's wearing the Chiefs, and she talked me into that. She's like, you gotta. I was like, okay, I'll do a polo. That's it for the thing. And so we, we just kind of— I went up to him like immediately. I was like, what happened here?

And the bond was sealed.

Wow, that's cool. I like that. That's very nice.

So it's pretty much they're running the show, and then we're the—

Just like Taylor and Travis in real life. He just kind of follows along. I just follow along.

Yeah, right. So I had to beg him. He's, he's anti-Halloween. Like, he will not dress up with me. He'll never do anything.

Who was trying to photobomb you?

That's John. That's a former guest on this podcast.

Yeah, yeah, he was dressed as what, Dumb and Dumber?

Yeah, that's right. Yeah, yeah. So that's the ghost of John Shefsky right there. But, um, yeah, so yeah, Travis is always, uh, dropping Taylor Swift stuff because they're a They're obsessed with it. So no, hold on, hold on.

My wife, and I'm sure just like Lauren, is huge Taylor Swift fans. And so whenever, whenever we have any kind of event where there might be kind of like a lull in the background, let's just play Taylor Swift. Is that nature you hear? Let's play Taylor Swift so we can hear that. And I would— I'm okay with Taylor Swift, but the problem is my wife likes the same 7 songs. And after about 75 hours of that, you're like, okay, let's go. So Taylor Swift's new album, Joe, has how many songs? Do you know? Have you heard about this?

I don't even know who Taylor Swift is.

You're my new best friend.

He does.

He knows. He knows because she told me.

There is like 31 songs. Is that right, Lauren? 31 songs, 2 hours of music on this new album. And actually, there are some good songs. The Alchemy is a good one. The Prophecy. And I'm just praying that my wife does not overplay them or does not play them to death to where I'm like, yeah, please stop playing. But I enjoy some of those songs. So that's right. Taylor Swift is something that, uh, you know, Alex and I will send each other reels and stuff like that. I liked how in the story he posted today, very subtly, he put Taylor Swift in the background, and I caught that. I totally caught that.

It's pretty funny. She should do a duet with Elvis.

I'm sure she could make it happen.

Yeah, of all the people. She should be your next guest.

Exactly. Oh yeah, that'd be great.

Let's have her on next. Yeah, her people can reach out to you guys.

You know, uh, I mean, these guys are music people, so they, they're gonna know, uh, you know who Natalie King Cole is?

Yes.

Okay, and her father Nat King Cole, she actually did a duet with him.

Oh, after he passed away?

After he passed away.

Yeah, that's normal.

It was very famous.

Yeah. It was Unforgettable. Oh, unforgettable.

Yes, it was such a good song.

Yeah, Taylor should do one with Elvis. I'm sure she's dying.

I'll tell her that.

Yeah, please let her know.

Yeah, let her know. Yeah, but not only, um, like our wives into it, it's just like the whole world. It's like the zeitgeist right now. So it's like everywhere you freaking turn, it's— yeah, you can't get away from it.

She's gonna be like the Madonna, I think. I mean, she's probably already there. Like, she's just such an, like, an icon. So famous. The spotlight's on her constantly. She's so influential to People of all ages, I feel like, like Taylor Swift-themed properties will probably only get more and more successful until it's overdone and like, hey, you know, let's see something new.

So are we gonna get a lot more hits on this episode?

I'm sure. Yeah, we can tag her.

We can tag her and see if she shares it. But what are your— I think we did play something one time where like when she comes into the town, like the economy goes through the roof.

I wish. So when my wife bought tickets in LA for her, um, for a concert, she got it on Ticketmaster. I think they were like $150 or something like that. At the— right before the show happened, there's just so much demand for it. She could have sold those tickets for around $1,500 apiece.

Mm-hmm.

Like, there's just so much demand. And that when she releases her tour dates, uh, All those Airbnbs start get booked up everywhere. Boom, boom. Yeah, she's in Pittsburgh. She's there, right? Um, so like when she announces that, it's like, hey, you know, if she's going to be there in December of next year, let's buy a property today, furnish it just for that week, and then like, you know, yeah.

Oh my God, that's great.

I mean, it's a whole nother show we could do, but Taylor Swift herself is also quite a real estate mogul. She—

oh yeah, she's like $90 million. Really?

Yes. And she started buying property One of the first things she bought was, I believe, like a penthouse in Nashville when she got her first payout from her record deal. And then since then, I think she owns upward of like 20 houses or something.

She buys like haunted.

Is she interested in subject to deal?

That'd be great. Yeah. I don't want to see that. I don't think she needs that.

I think she's got the capital resources to cash buy anything.

But that would be a good reason. You know, she doesn't need the money. So yeah, offer her subject Too. Mm-hmm. Okay, there you go.

Oh, you're talking about buying her properties? Yeah, yeah. Okay. Oh yeah, okay, now I'm excited. I'm like, Joe, she is a woman of means. She does not need to scrape the bottom.

Yeah, no, no, no, I'm talking about us buying her property.

Oh yeah, okay, we can— I can get on board with that.

Yeah, sure. Just amazing.

Taylor Swift used to own this property. That's all you need.

Exactly. If you look carefully, you might see a blonde— a blonde string of hair. Yeah, leave intentionally.

Do not pick that up. Don't touch that.

Alex and I did one time for a wedding stay at, um, Elizabeth Taylor's residence in Palm Springs, and it was really cool.

That was cool.

It was owned by Kathy Ireland at the time, but like her grand piano was there, all this memorabilia, and I was like, they're just gonna let us stay in here with this stuff? Like, this is crazy.

Yeah, I mean, those are a lot of personal items. Yeah, yeah, it's interesting.

Yeah, so it's pretty cool. Nice. Then some flippers came in and messed it up. Damn, damn flippers. Yeah.

All right, we got a few more. Let's see. I think we were just talking about this, actually.

So what PMI is, it's basically an insurance policy for your mortgage if you put down less than 20% as a down payment when you purchase a home. But this insurance policy basically will protect the lender in the event that you stop making your mortgage payments on your home. With PMI, if you guys didn't know, the Fed just recently reduced, yeah, reduced or lowered the amount of PMI that you pay by, was it 0.3%, 0.30%? May not sound like a lot, but that is a lot of money. When you're considering like your monthly mortgage payment, keep in mind there's a lot of different factors in it. You have your principal and interest, you have your, your PMI, your mortgage insurance, your homeowner's insurance, a whole bunch of things, taxes. Exactly. So anything that could help lower that monthly payment is amazing. So what PMI is, it's basically an insurance policy for—

Real talk, Atlanta. I love that. I was looking on my breakdown. I pay— I paid $790 a month. That's not, that's not helping me with my loan paydown. That's not interest. That's just mortgage insurance.

Oh my God.

And so it's like, yeah, I'm like, I want to get out of that ASAP, but again, I don't want to lose my 2.6% interest rate. So even though I'm paying $800, at some point it still makes sense to keep that. Yeah. If I were to refi into a 7% loan today, you know, so I'm going to, I'll see what I can do.

And you could have done it like months after?

And still had a very similar rate. Maybe, maybe it's 3%. Right. You know, if I had done that, If we closed, we closed in April, 6 months later in October, if I still would've got a 3% something rate, I'd still be okay with that. And then that mortgage insurance would've already fallen off by now, maybe.

And what was the reasoning behind going with the FHA? Just to get the down payment as low as possible?

I think so. At that time, we were just kind of naive. We were just like, oh, that realtor said, here's our loan guy. We can go with that. We liked that because it was, you know, 3.5% down. There are other conventional loans that are, you know, almost identical. They may have a little bit more fees and things like that, but, you know, very, very close to it.

Okay.

So we just went with that. I think FHA at that time gave you a little bit more on your DTI. I think FHA could go somewhere around 53%, whereas with conventionals, it was maybe like 49%. So there's a little bit of difference. You may be pre-approved for more. Right. And we wanted to buy a duplex and, you know, multifamilies in Southern California. We wanted to buy it so that we were safe enough to live in. But then when you start looking at nicer properties, they quickly jump up really, really high in value. So I think at that point we were, we kind of had to go with FHA to qualify for that price.

Gotcha. Yeah. Still going to win in the end though.

Yeah. So happy. We are so glad we did that. 100%. Oh my gosh, love it.

What do we got?

Let's check it out. I'm quitting Airbnb. It just doesn't make sense anymore. Something changed recently and it is the nail on the coffin for Airbnbs in California. SB 584 is presenting a tax like I've never seen before, like higher than the TOT tax. That's kind of wild. Anytime you go to book a hotel or short-term rental, you You're already taxed a transient occupancy tax, and it's usually around 10%, and this new tax is on top of the transient occupancy tax. Hotels and short-term rentals bring in a ton of money for our city. The tax money is to go towards building affordable housing units. Currently, the city only spends $3 million of their budget on an affordable housing reserve. Most of the money goes to general government and the police. It all sounds really great in In theory, but will it actually work? And what am I going to do with my house? I'm quitting Airbnb.

So I saw this. It was shot— or not shot down, it didn't receive enough votes to pass in this last time for elections. Okay, but I'm super curious that, you know, hotels are so— hotel lobbies are so powerful, right, in, in many major cities in California. I'm surprised they Didn't, or and maybe they did. I mean, maybe that's the reason we're talking about it in the past is like why didn't why didn't work is hotel lobbies were able to fight that right and keep that tax from coming on. Where I'm at right now in Long Beach, there's a big petition going around by hotels to stop Airbnbs on hosted stays, and it's and it's put on by a LA-based hotel group that wants to you know have more of the the market share in Long Beach. And so they're very powerful. And so I wouldn't be surprised if, you know, some of these hotel lobbies is what kind of made it so that didn't happen this time. But if that happens, I mean, that's just another 15% out the door that you don't get. And that forces operators to be more creative with direct bookings, booking directly with me.

Do you pass that along though?

I mean, you I guess you could. Um, yeah, that 15%. Yeah. Uh, so, so the transient occupancy taxes that she mentioned in that video are a fee that the guest pays. So, so it doesn't come out of my paycheck.

Right.

But it— but being price conscientious, you realize what a guest pays. They pay Airbnb a fee, they pay their state and local taxes, and then they have this fee on top of that. It just quickly adds up so expensive for them that it may be out of their budget. And so even though you are not charging them anymore, you may have to lower your prices if you want that room booked. So it does come out of my— it would come out of my pocket at the end of the day. I can't get that same guest who's happy to pay the same price per night because there's all these other fees added onto it. I now need to lower my prices if they're going to afford it, or my property sits empty.

So if I go to McDonald's now and pay $20 for a Big Mac when I used to pay $10, The difference is that they're getting $20 an hour. So that's kind of what you're saying. You're, you know, you're having to take a hit.

Yeah.

On there.

Definitely. Like some, some properties, like luxury properties probably are the most resilient because their clientele are not as budget conscientious as a family visiting out of state going to Disneyland for 2 days. They're dropping $1,500 on tickets just for a few days to be there. That adds up really fast. Whereas for a luxury property, if that 15% tax is on there, yeah, they don't care. Yeah. Like, it's like, oh, how much is it? Okay. Yeah. I'll just swipe my card. So, so it really is going to be tough for, for majority of properties because that affects how attractive their listing is.

I mean, it seems like they're just trying to wipe the whole thing out. It's crazy. Yeah, just adding all that stuff in there. Yeah, I mean, is— and is this— the hotels are fighting back basically because they took a huge hit when Airbnb came on the scene.

No, that's exactly—

Now they're organized. Yeah, now they're—

But I'm surprised that hotels— like, I guess we should do research on that. Would hotels be exempt from that 15% or that only—

Of course they're gonna exempt themselves.

Because in the video, in the video, it said hotels and Airbnbs. They kept throwing those two together. But I would be really surprised if hotels, uh, if, if hotels are lumped into that group. I feel like there's no way that'll pass. Yeah. As soon as Airbnb is singled out, yeah, they will push. They will give it their blessing. Yeah. They will print the, the, all the legislature so like it can get approved. That way they just have the market cornered.

Yeah. Yeah. So I think that's what happened on Oahu too. Like the, the lobby's there, like they don't mess around.

It's, it's like extremely restrictive. on where you can Airbnb. Same thing in Maui. You know, you have to— you've had to own it for several years before you can Airbnb it.

Right.

Yeah. All these cities are doing that. But one thing I'd say, as far as people that are curious about short-term rentals specifically, finding areas that depend on short-term rentals is your safest bet in investing if it's going to be a short-term rental. So that's areas where there aren't huge hotels there. Because it's areas that are dependent on mom-and-pop Airbnbs will always need those types of accommodations there. That's very, very safe. It may be very saturated because everyone's taking the same idea. But as far as will my property still be usable in the same way it is today, 5 years from now, the answer is very, very likely yes. Whereas right now in Long Beach, it's allowed. There's a permit process. The city allows it. It's very You know, structured. It's not, you know, do whatever you want. But in a few years, it could be totally taken away. They could say we just need more properties available for longer-term residents, so we're not issuing any short-term rentals. And at that point, I'll need to pivot and adjust my plan. There you go.

Seems like there's a lot of pivoting there. You got it. You got to stick and move. You got it. All right, I think we got one more.

Yeah.

So there is downsides to doing this primary house flip. The, the biggest downside is it's a giant pain in the ass. I have to move around, move out for short periods of time, stay in hotels, or right now when I just listed it, I'm living in my basement rather than my awesome new primary suite. But it's all about getting to the end goal. For me, I'm trying to get to a certain level of capital, and for me, it's worth making the trade and dealing with that short-term pain of moving around and packing up just to get there. So it depends if you have that tolerance or threshold. Also, you need a down-ass wife that is willing to move around with you as well.

Amen, brother. Appreciate you.

So that's true? All that's true?

100%. If your If your partner is not on board, same thing with living in a duplex, right? It makes sense. The numbers all make sense. Wow. You're buying one property for— or buying 2 properties kind of for the— with one transaction, right? It's not 2 closings. It's one closing, one down payment. If you're doing 3% down, it's the only time you'll be able to buy a multifamily with a loan for 3% down. That's like your— it's like your one golden ticket to do that. Um, but, and everyone likes all the numbers, but the downside is you haven't— you now have a neighbor that lives like that shares a wall with you.

Yeah.

And so a lot of couples, they can't do that, or they've got a kid. I don't want a stranger on like sharing a driveway or sharing a backyard or whatever with my child. For, for us, we didn't have any kids. We still don't have any kids at that point. Um, that would be totally different, totally different scenario. Having having a child being doing a duplex, but for a single person, for a couple with no kids, that's the easiest it'll ever be to to to do that multifamily. Same thing with you know. So he's he's talking about he he bought a property, moved into it, is doing a live and flip. I mean, I've seen his videos. He does. He's a he's a contractor. He does huge huge improvements to that, and it's a it's an inconvenience living there with while it's an active. You know, construction. There's shop vacs everywhere. There's tools. There's constantly sawdust. Every time we like vacuum, it's like, okay, let's go open up another wall. Dust everywhere. But, and David Greene talked about this maybe a week or so ago. If you buy one property each year for that 3% or 5% down, it's a pain in the butt. You're moving all the time. You get settled and then you buy another property for low money down, but you have to live there. If you can do that 10 times over, over 10 years, your retirement is set. You now have all these properties. You didn't have to put 20% down on a single one. You have all these properties and they're all appreciating. If you're buying in the good areas that are always improving, there's always strong demand there, limited supply. They're just going to go up in value.

Yeah.

The downside is you got to pack your bags every year. You have to, you have to be mobile. But, but for us, we want to have that long-term payout versus that, that short-term satisfaction of, let's just put our roots down here and stay here for 10 years or so. And 10 years from now, when I'm like in my 40s, I don't want to be having to pack up and move every year. But if we can do that now while we're young and our backs still work, then when we're older, we'll have these properties that are appreciating, that we've lived in each one of them. We know them. We have experiences. We have memories in there. And they're paying for themselves and funding our lifestyle.

Boom. That's it.

Mic unplugged.

Exactly. Love that, dude. Yeah. And, you know, people can follow along on all the— on your journey on your Instagram, right?

I appreciate it. Yeah, it's just Travis Hall Homes. Okay. And I just try to post on Instagram. It also goes to Facebook, but okay. I just try to update my, uh, my friends and family, my grandma who's watching them there, uh, a couple times a week and just show all the shenanigans come up as I do DIY real estate investing and repairs and things like that.

That's amazing. And so, what's the future looking like besides just the live and flips? What about the short-term rental side?

I want to go bigger. So we have a bunch of single-family properties and I know how to manage those. We have a couple multifamilies and those are great, but I want to get a hotel. I want to Find an underperforming hotel or motel, do some kind of tricky seller finance purchase, partner up with a capital investor who can bring most of the, most of the capital, do the repairs, and then operate that as a motel and circumvent all those short-term rental permits, things like that. Once you're a hotel or motel, you have your own set of rules to play by. You know, it's not like, oh, we're now banning hotels, right? That doesn't happen as common as they ban short-term rentals, you know.

Gotcha.

And so I'd like to do something like that and have the economies of scale. I already have a little taste of it with these multifamilies, the efficiencies of having, you know, all these units available. If one unit's down and guests have an issue, just send them next door to the other one. You know, not that big of a deal. I'd like to get something like that, something between 15, 20 units that we're a co-owner of and managing. That's what I like to do. It feels like it's super far away, but one of my good friends, Casey, He's doing that with 2 hotels right now. Oh, amazing. And so I think you can, even though it sounds extravagant, it's like there are people that I can like text right now that have done that. And so I think that's where I want to go to in the next couple years.

Love that. And if people have any leads, like where do they send them to you?

To Joe. No, I'm just kidding. I mean, I love that you can just send me the address. I'd love to even set up like some kind of incentive. If you send me a deal, if you send me a hotel, yeah, and I end up closing on it, I'll send you $5K cash.

Oh.

Some kind of referral fee if I end up closing on it.

Yeah.

Um, I think that would be a great incentive of like, yeah, there, there are big investors that own hotels, but there's lots of mom-and-pops that own motels and they're like, they're tired. They're tired of dealing with it. Yeah. Hasn't been a lot of updates in years. And so I think there's, uh, there's a ton of capital out there What we need to find is the deal. Yeah. And then it'll just be a piece of cake after that.

I want to give you some great advice. Okay. Okay. You're buying houses, you're doing live-in flips, and then you're moving from one to the other. Awesome. That's what my dad did. And he's the one that started me in this business. And he ended up when he retired, he had like 5 properties. And what he did was He reversed the process. Okay. So with the tax laws that we have in place now, you have to live in the property 2 years of the last 5. You sell it, you get a $500,000 deduction.

Oh, he moved into them and then sold them.

Absolutely. It took him 10 years, but he sold all of those properties that were rentals because he went in and made them primaries, cashed out and paid Zero.

That is so cool.

In taxes.

Nice. Yeah. So I'm at the beginning of that journey. Like, yes, I'm getting into them by being primaries, and then he got out of them, uh, as a primary.

I'm doing the reverse process.

That is so cool.

Yes.

Wow. So it's like, uh, Maggie, don't worry about moving out of this area. We'll be back in 50 years.

Yeah. Yeah. There you go.

We'll cash out in 50 years.

We'll leave a little note inside the closet.

All those projects that we didn't finish, we'll just come back and finish them later on.

Exactly.

They'll be there waiting for us.

Absolutely. Yes. Yeah, he moved every 2 years, 5 times. It was a pain in the neck because we'd have to move them. But yeah.

And how many siblings did you have as you guys are moving from house to house?

Just, just me and my sister.

Okay. Yeah, that's what we want. We want a boy and a girl. Keep it easy. Yeah, I'll keep my eye on one. She keeps an eye on the other. She'll probably keep an eye on both of them. But yeah, exactly.

So usually, where is it? That's great. Awesome. Thank you so much for, uh, making it down here, Travis. This is awesome. Yeah.

Sorry we got started about 27 minutes later. Yeah. All good. Um, yeah, those Costco deals don't wait. So, um, thank you guys so much for having me.

Yeah, absolutely. And then, uh, yeah, we'll, we'll leave all your information in the description box and, uh, people can reach out if they got deals, hotels, or, you know, anything. Oh my God. Hotels are good.

Properties. Yeah.

Uh, thank you guys so much. We'll be back here next Thursday at 4:00 PM. Uh, so make sure to tune in then and, uh, We'll see you then.

We'll see you then. If you want some more advice on real estate investing, reach out to us one-on-one.