Mastering Property Management & Real Estate Investing with Mikaela Nguyen

Hey everybody, welcome back to the New and Experienced Investor Podcast. Today we have a great show. We're going to be talking about Property management. You know, when you buy the property, you're gonna have to manage it, or you can outsource it and have someone else manage it for you, but you gotta choose the right person. So it's definitely a show you do not wanna miss. I'm one of your hosts, Alex Barnett. I'm the new guy.

I'm Joe Homs. I'm the experienced guy. We're here in Laguna Hills and we're the number one podcast in Laguna Hills. And by the way, what you forgot about property management is she does it remotely.

That's right. We're talking about virtual property management, over 100 properties over 1,000 miles away. So wrap your head around that. Um, an amazing guest, an amazing, amazing guest. Before we bring her on, uh, I just want to remind everybody about our upcoming meetup.

It's on February 24th, this coming Monday, 6 o'clock, Hangar 24 in Irvine. Aaron Rosen will be speaking about insurance, all your insurance needs.

That's right.

Yes, that's a big topic. It's a hot topic right now too. It's a real hot topic. In California, it's a hot topic.

Yes.

And I just actually got off the phone with him a few minutes ago to confirm that he is going to be here. He's in Mammoth right now on vacation skiing. And I told him, you know, please come with a lot of Hot fire stories. And he says he has plenty of them.

I bet he does.

Yeah.

Speaking of hot, it's also gonna be 80 degrees on Monday.

Nice.

So there you go.

Welcome to California.

Welcome to California. We're back, baby. I always like to remind you guys to get the most out of these podcasts and to be a part of the show, go ahead and dive in. This is a live podcast. So right now, go ahead and share it far and wide with any new or experienced investors in your life. Jump in the chat. You have full access to our guests, to Joe, to myself. Get those questions answered. It's one of the most requested parts of the show. So before we launch into the topic of property management, let's go over our 2 tips of the day. Tip number one. Tip number one is I would say get a property manager. I went down the road of trying to self-manage. Didn't go well. We ended up letting a psychopath into our one rental that we had and took about 9 months to get her out. Lawyers were involved. It was pretty bad because I wanted to save $200 on property management. It cost me $20,000. So think about that. I would say, I would, that's my tip is just to get a property manager.

You had a bad experience and unfortunately it was one of the first ones that you had. Yeah.

Okay.

And it's kind of scarred you for the rest of your life.

No, no, I'm over it.

Property management, and we'll learn, okay, with our guests, is not that difficult if you know what you're doing. Okay. So that's my tip is learn to do property management to save that $200. All right. Okay. Yes. I don't think there was a lot of correct due diligence done on your part.

Probably not.

Okay. Yeah. So we're gonna learn way more with our guest.

I mean, it was a professional, so we did all the screening and stuff, just nothing came up.

Professional squatter.

Professional squatter. Yeah, I mean, it happens. It happens, you know. You know, it does. I'm glad we might actually hear some horror stories from, you know.

Hoping we do. And let's go ahead and bring her in. Today we have Michaela Nguyen. Michaela, thanks for joining us. How are you today?

Thank you. Thank you. I see your faces very often, but it is good to be here.

It's taken us a long time. 3 seasons it's taken to get her on here. So we're very excited today.

High anticipation over here.

Finally shamed her into it.

Yeah.

Yes.

It worked.

Way to go.

We told her we were going to be really nice, like we normally are during the day, you know, so I have to keep my word. We're going to be really nice. We're not going to talk about her high school boyfriend experiences or anything like that.

No, you know, okay, keeping it real estate related. So go ahead, um, jump right in. You know the format of the show. Go ahead, let everyone know kind of how did you get into real estate? What were you doing before? What led you there?

All right, um, I've been in real estate for about 4 years. Just renewed my real estate license, actually, a couple months ago. Before real estate, I had no idea what I was doing. I had pretty low expectations of myself. I was working just like an admin office job. Didn't know where I wanted to go from there. Heard about real estate from an agent that I knew, and she kind of filled me in on, you know, the traditional residential agent side of things. It interested me. I thought, I think that's something I could get into. I could be passionate about, hopefully good at. So I started to pursue my real estate license, quickly discovered I did not like it. Didn't want to be a traditional real estate agent. I did not like the idea of trying to sell myself as an agent to people. So after discovering that and learning about how to build wealth and how to survive in Orange County, quickly discovered that that's often found through real estate. So my husband and I found the lovely Joe Homs online. Thank you to social media and to Bigger Podcast, BiggerPockets Podcast.

Mm-hmm.

We got lunch with Joe one day, bought him lunch, by the way, as everyone should.

It's a requirement.

And that kind of opened the door for me when it comes to real estate investing and honestly changed my life. So thank you, Joe. Got me to where I am today. And now I am, I have some experience with flipping and with Having some of my own rental properties, and then assisting Joe's son-in-law Ryan with his portfolio in Alabama. And I am learning more every day.

Okay, so four years, four years in real estate. So you had like literally just graduated high school when you got your license?

Not far off.

Yeah, okay. I just want to make sure everybody knows.

I was twenty-three.

23.

Yeah.

Okay.

Excellent.

Yeah.

Okay. Since we're kind of focusing on, you know, you have your experience with owning your own rental properties and then also doing the flip, but we're kind of focusing on property management.

Yes.

Because we haven't really had somebody in here. Plus the sheer volume of over 100 properties. I mean, what, what has that been like? Have you had previous experience or how did you take that on? That seems like a lot.

Yeah. There's something every day. That's how it feels, especially in a place like Alabama. I had no prior experience. I honestly am figuring out my job as I go. But I did have my natural, like, administrative giftings. I'm pretty organized. Rather diligent and thorough as often as I can be. And I think that that has helped me do my job when it comes to kind of needing to manage other people. So like mentioned, I am overseeing property management of— yeah, it's over 100 properties now in Alabama, dealing with multiple property managers. And as nice as it would be to just let a property manager do their job, they don't always do their job. And someone really does have to kind of be managing the property managers once you have scaled it to, you know, a decent level. Because there's issues that come up every day, and someone has to be addressing those issues and providing answers to a property manager. As far as what needs to happen next.

Right. Okay. So I guess from what you're telling me, it's more of an asset management sort of role where you have different property managers set up. And I know a little bit of the backstory. A lot of these are Section 8 rentals, right?

Yes. Some Section 8, some just normal tenants. Pros and cons to both.

Okay, gotcha. And for the Section 8, you needed somebody specifically that knows how to manage Section 8 rentals?

Yes. All except one property manager that we work with was like taking Section 8 rental properties. There was one who they just didn't have experience with it. They didn't know really the process with the housing authority. So they said that they wouldn't be able to. But For the rest of them, the property managers do have experience with Section 8. And so as often as possible, we usually try to get them to find a Section 8 tenant. But sometimes you just got to go with the best qualified tenant who gets there quick enough and you go with that.

Right. And so these properties are spread between Montgomery and Birmingham mostly? Yes. Okay. And the Section 8, that's sort of like a big play for investors there. Why is that?

Because you have the guarantee, government money. You can rely on a consistent check from them the first of the month. The only thing you really have to worry about is that the property continues to pass their inspections. So they want to make sure that You know, the condition of the property is decent enough for them to continue to pay a portion of the rent for the tenant who lives there. So you have to be on it in terms of the repairs and keeping up with the repairs that are needed, which you should be doing regardless. But that is the one thing that you have to pay attention to and Then yeah, you do. You have that consistency of the income, especially in lower-income cities. It's, yeah, it's easy to find a tenant who will pay for the first few months and then start to fall off. So it is, it's definitely a benefit to have Section 8 tenants.

What is your day-to-day look like? You know, you're getting calls from property managers with specific concerns, problems. Are they Related to the property or related to the person or both?

Both. A lot of the emails and calls and texts that I get from property managers are in regards to repairs. Usually something comes up and the tenant will, you know, submit the work order request to the property manager. Property managers will just go ahead and take care of it if the repair is under like $250 or $300. But if it Exceeds that, then they need approval. So a lot of the time, the property manager is reaching out to me because there's certain repair items that have come up, or because there's been a tenant who hasn't been paying rent, and so property manager will suggest moving forward with an eviction. They'll let me know that they found a tenant for a property that's been on the market. For rent. Yeah, my day-to-day is usually—

Problem solving.

Problem solving. Yeah, trying to put out fires, trying to figure out the best way to go about the things that come up often. And yeah.

Are the laws different over there than they are here?

They are. I'm not I'm not super involved in knowing the specifics of the laws there because I'm not actually the property manager. So I leave that part to them in terms of the specifics of like the eviction timelines and all of that. Yeah, I know they're slightly different than here, but I don't know all the specifics of how so.

Okay. And so I think I heard you earlier talking about a sewer stoppage.

Sewer line replacement.

Sewer line? Yeah. Oh, it was a replacement. Okay. So like, I know I manage properties here. So if one of my tenants calls and says, you know, the drain is plugged in the kitchen or whatever, and I tell them, well, it sounds like you need to call a plumber. I didn't plug the drain. You know, do you have those issues? Like, is that what you're telling them as well? Or? At what point does the cost pass along to Ryan?

Yeah, that's where it's good to have property managers that do their job well and that you can trust. Because a lot of the times I am having to rely on them to be doing their job and to be, you know, looking out for the investor's best interest. I would say it depends on the property manager. A lot of times they just say, hey, tenant said that their toilet's backing up and the bathtub's backing up. And so we need to send someone over to snake it or to do a camera scope and figure out what's going on. I would say that there's probably more times where it's actually tenant's responsibility and the cost still gets passed on to Ryan. But this week I did have one property manager say like, I've been having issues with backing up at this property. We sent contractor, he went, started to snake it, was pulling out like random trash, was pulling out like beads.

I don't know.

I don't know how it happens, but—

They were at Mardi Gras the week before.

Apparently there were some beads down there.

Yeah.

And so the The property manager was like, looks like it might be tenant responsibility. We can try to, you know, talk to the tenant. Of course, in this scenario, the tenant already wanted to move out. We asked them why. They said, well, if the plumbing problem is solved, I'm happy to stay. Lo and behold, the plumbing problem is the tenant's fault. You got to pick and choose your battles, I guess.

Okay.

Now, now when you're choosing these property managers from so far away, what are some things that you're looking for when you're interviewing them? Or what does that process look like?

Yeah, that is the hard part. Several of the property managers that we are working with were already managing some of these portfolios. So when Ryan purchased the portfolio, it was already under management and we just carried on over with that manager. Since I already knew the properties and the tenants, and it's easy that way. There was a property manager who I found through. I think I looked at a bigger pockets forum and tried to find investors in the Birmingham area and asked if anyone had property manager referrals. So that's one way that you can find. I think referrals probably always the best because online. Reviews, you just never know. You never know. So getting a referral from someone is always like the best case scenario. I think we got relatively fortunate with a couple of the property managers that we're working with that were already managing the portfolios and they're, you know, they're doing a decent job and some not as good. So we've also taken properties from a not-so-good property manager and transferred them over to one of the property managers that we've liked working with. But yeah, I definitely would suggest looking for referrals, Facebook groups for like investor groups on there, asking people to help you out as much as you can.

Yeah, absolutely. I mean, have you had to fire people or what are the red flags and what What causes the breakdown of somebody that you would, you know, take properties away from and give to someone else?

Yes, we have had to fire one property manager. And then there was another where there were several vacant properties and he was marketing them for rent and just weren't super happy with the results of this property manager. So I took away the ones that were vacant and transferred management to someone else. He did have 2 that he rented out, so we kept those with him just because it's easy to keep those with him for now until they're vacant and we have to do a turnover. At that point, we might switch to one of the better management companies. Reasons for firing? There's many. Just not being good at communication, not being Reliable, not doing a good job of renting the properties out quickly. Like, you know, they put it on the market, it's taking forever. I'm having to suggest what they should do to them even though it's their job. You know, things like, hey, maybe we should have some professional photos instead of 3 bad cell phone photos for the online listing, or, you know, telling them that they need to do a price reduction, specifying how much they should reduce, you know. Yeah, whenever I feel like I'm having to do someone else's job, I'm just like, I don't know why we're paying you.

Right. Yeah.

And, and you said we— did you fire them?

I did, yes. Ryan doesn't talk to the property managers. You know, put on my big girl pants and kindly tell them that it wasn't working out. And thank you for what you did for us, but we're moving on.

There you go.

Wow.

That's a nice way to do it too, because I've never heard her raise her voice to anyone. No, you don't have to, you know.

Yeah.

I mean, they should know. It's like, you got one job.

How much, how much are these property managers making per property?

Um, all except one charge 10%. So 10% of the—

That's normal.

The monthly rent. One of them is charging 8%. But yeah, standard out there is 10%. And then typically 10% of any like repair estimate as well.

Really?

Since they're helping, yeah, manage the repairs that are needed and sending their contractors, they like to tack on another 10%.

Wow. Geez.

I'm too nice.

I do all that for free.

I know.

Yeah. $10,000. You would think that, that, you know, that should— doing that work should be tacked on the 10% that you're already charging.

Exactly.

Um, yeah.

No.

I could see a little scam going on there where they got the guy to give us the bid and then we're going to charge him.

That definitely happens. That definitely happens. Yes.

Wow. Interesting. Can you give us some nightmare stories of tenants and some weird call that you got and you're like, what?

Yeah.

Well, tenants should not have my phone number. They should have the property management's phone number. But I have been contacted by some tenants. I still don't know how that happened. I don't know how they know who I am, how they got my phone number.

That's crazy.

But there's been, I think, 2 or 3 prop— or not property managers, but tenants who reached out to me and Have complained about a repair that needs to be addressed, complained about how the property manager is answering their calls. Yeah, actually this just happened like two weeks ago. A tenant reached out to me and she's like, "Hey, have this issue. I've been contacting the management company; they're not responding." She sent me the call logs to even show that like she called and she didn't get calls back and. She was a Section 8 tenant, and so she was essentially threatening, if I don't get a response from them, or if this isn't addressed quickly, then I'll reach out to the housing authority rep and let them know basically that it's not being managed well, and she would try to leave using that excuse. So yeah, I don't like to have to deal with tenants myself since that's not my job, but it has happened. Nightmare stories. Recently, there was a property that was under eviction. And they— it was kind of a long eviction process. They were evicted. The property management took possession of the house, and they went in and took photos of the condition, which wasn't good. It never is. Just like filled with a ton of trash and— Yeah, just not good. There was definitely going to be some work that would be needed to turn it over. Property managers went back, I don't know, maybe a week or two later and found that the tenants had broken in and out of spite because of being evicted, they came through and, you know, I don't know if they used a sledgehammer or what, but they busted holes in the wall. They broke the toilet. They like slammed the bathroom sink. Oh my gosh. They left animals inside, a couple cats and dogs, tons of gross stuff in the bathtub. Don't know what it was. Don't want to know what it was. But I got all the photos. So that sucks. You know, you're evicted for not paying rent. And, you know, we finally get them out and they come back just to wreak some havoc.

Jeez.

Yeah, that's pretty bad. I wonder how that happens. Like, is it— so you get, you know, I'm trying to get into their mindset. So they come in, they get the keys, then all of a sudden they just like have stuff in their pocket and they just kind of like throw it on the ground. And then over time the trash piles up.

Like, you talking about termite inspectors?

No, like these people where trash piles up. Is it like they're bringing in bags and then setting them down and then never doing anything about it? Or is it one piece at a time?

I don't understand how that is an easier way to live. It's easier to wash your dishes and throw your trash in the trash can.

Not for them.

Yeah, how is it? Like, how do you do it? Like, what's the mindset? Like, what are they thinking?

You know, they go out and get McDonald's and bring it home and just throw it there, you know, put it in the pile. Who cares? You know?

Trash pile over trash can.

Yeah. Yeah. You went You went— off topic— you went to an interesting property the other day in San Diego.

Yes.

What happened there? This was a wholesale deal.

Wholesale deal.

That you got from a wholesaler. Tell everybody what happened.

So yeah, we're going through to, to walk it, see if it'll be a good flip. You know, you have the pictures, but you want to see it in person. We get there and the executors are there. It's 3 brothers. This was their father's house and their stepmom Lived there.

And can I add one tidbit real quick?

Sure.

We're pulling up and Alex and Chad are like, yeah, it's pretty straightforward, it's not that bad. It was like as bad as Ryan's Mission Viejo flip.

Okay, it was possible.

Yeah, but there was rat droppings everywhere. I was just like, why am I walking through here right now?

Yeah, so we get into the backyard and we're setting up the drone because we got the drone now. We're gonna check out the roof and the guy comes over, he's like, yep, Found my mom over there. We're like, what? And he's like, yeah, there was a freezer back here. And, uh, yeah, me and my brother, we lifted it up and found my stepmom in there. She had been there for 10 years. He's like, you haven't? And we're like, what? He's like, oh yeah, it was a big news story around here. You never heard about it? And then as we were like, okay, we're done, bring the drone down. All right, we're good. And just took off.

I was like, time to go now. Yeah. Wholesaler didn't disclose that.

Thank you at all. And then we looked it up and it was like a whole thing.

Yeah.

So we're like, that's gonna be Hard to sell.

The best part was difficult. Yeah, Alex and Chad are like, do you think that'll matter when we go to sell? I'm in the back, I'm like, yes!

I was like, call Joe.

I can tell you from experience, it will matter.

Yeah, for sure. Yeah, it's like the murder house. I mean, they said they didn't know. I think the guy was trying to say natural causes, but it's like, yeah, yeah, natural causes and you end up in a freezer.

Yeah, no, you and Ryan had the one where she passed away but they didn't discover her for like 3 weeks.

6 to 8 weeks.

6 to 8 weeks.

Oh no.

So yeah, that, I mean, you know, whatever.

Yeah.

Finally sold it. Had to drop the price to get it, uh, you know, somebody to say, okay, I'll buy it, you know.

Yeah.

But yeah, you sold it. You have to get it sold. I don't think you could sell this property.

This one, well—

That is pretty crazy.

It's pretty crazy. And it's on a busy street and the neighbors suck apparently. So it was all mixed together.

Um, I don't know who's gonna take it down, but we've been rewatching Dexter too, so we're just like, oh my God, we're in Dexter right now, we need to go.

Yeah, yeah, the freezer.

So real estate can bring you into some interesting situations. Yes, absolutely. Pull the curtain back on how people are, are living. So it's pretty, pretty nuts.

Michaela, you have a property over there in Alabama as well, right?

I do.

How did you acquire that property?

How did I acquire it? I acquired it through Ryan. It was one that he previously owned and it was tenant occupied when he purchased it. And literally, I think within like a week or 2 weeks of him purchasing it, tenants had a kitchen fire. And so there was fire damage to the property. He got a nice insurance payout from it. And it wasn't really going to be worth the time and energy for him to fix it up after. So I took it over and I rehabbed it and have done a cash-out refi and I'm keeping it as a rental. It did not go the way I expected it would go at all. It's renting for a lot less than I thought it would and for less than it did prior to the fire, which is interesting and unexpected. But it is rented now. It took several months on the market to get it rented, but I have it occupied and Yeah, it's been 2 months since the tenants have been in there.

Are you cash flowing at least?

I am.

Okay. Yeah, well, that's the important thing.

Yes.

It's cash flowing $25 a month.

It's a little more than that, but I thought it was going to be a lot more.

That, that was a remote purchase and a remote rehab. And, and are you managing that yourself or do you have a property manager?

I'm using one of the property managers that is managing several for Ryan. So thankfully, it was easy-ish to take that on just because I had the connections over there already. So yes, I have it managed by them. And then I'm just kind of overseeing their management of it.

Okay, so out of pocket at the end of the day, because you did like a BRRRR type thing, Was there anything out of pocket on your end? Did you recover all your rehab and everything else?

Yeah.

Yeah. So, okay.

Yes. Yeah, it was, it was a successful BRRRR.

It's a good deal.

It was.

Yeah.

Just hold on to that.

Just because it takes a little bit longer to rent out, you know.

Yeah, that's fine.

And then, you know, you want to do the Alex plan and hire a property manager. I would too if it was long distance like that. Definitely, I would, I would do that as well.

There's too much that requires like hands-on actually being there. I had a squatter while it was sitting there vacant on the market, had a squatter who was there for a while and had recently been released from prison, uh, for murder. Did you know him?

I didn't know him, no.

You didn't know him?

Oh.

He hit my property manager over the head one day.

Pretty normal. Um, it's normal Montgomery stuff.

Yeah.

Wow.

He— I guess the house used to belong to his grandmother. He was under the impression that it still belonged to her and that he had a free stay there, but he didn't.

Yeah.

So eventually he stopped coming around.

That's what I'm saying.

Did the property manager hit him over the head? Is that how he stopped coming around?

No, no, he didn't. But he brought— the property manager brought the cops. around one day. And so I think the squatter realized that someone was going to keep trying to do something about it. He kept like busting a window, you know, we kept boarding it up or repairing it. And so I don't know, I'm glad he— I'm just glad he left.

Do you still like real estate?

I do.

Okay.

It might be taking years off my life, but I do still like it.

Okay.

Passive income, right?

Yes.

Simple, simple passive income.

Yeah.

Yeah.

My problem was like when I, when we had our tenant, I just gave her my number and I was like, yeah, if anything happens, let me know. And she's like texting me like 5 in the morning. There's a sound outside my window. Is that you?

Oh no.

And I was like, no, there's, I think someone's living under the house. I think someone's, I'm like, oh God, what did I do?

That's interesting. I have, um, I have another rental. It's in California, but in Northern California, which is where I'm from originally. So I am familiar with the area. I have family that lives up there. I am self-managing that one and I'm curious to see how that will go. So I am in direct communication with that tenant. So far so good, but it's a great area. It's clean.

Right. If you have a normal person, then it should be a normal conversation. But, you know, she was obviously touched.

Yes.

Touched by an angel.

Are you as nice as Alex?

Yeah.

I mean, Alex gives away everything. You know?

What?

Hi, what do you want? Oh, yeah, no, I'm not living underneath your house, but my handyman is there. You know? Do you need anything? Just throw him some crumbs every once in a while. He'll be okay, honestly. You know?

Yeah.

One of my rules for property management, and I manage my own properties, I always have, is I never ever tell the tenants that I'm the owner of the property. I am the property manager. And so when I get requests, Joe, hey, it's been 5 years, I need a new carpet, it's like really bad. I go, okay, let me go talk to the owner. So I go home, I look in the mirror and I say, hey, they want new carpet. Well, you know what to tell him. So I said, okay. So I go back and I talk to the tenant and I say, hey, good news and bad news. What would you like first? Good news, Joe. He said you could have new carpet. Really? What's the bad news? Your rent is going up $300 a month to pay for the carpet. Okay. So, oh, Joe, we don't need new carpet right now. We're good. We're not, not a problem. We're good. Okay. Let's move on. Yeah, let's move on.

There you go. Simple enough. That comes with the experience.

It's easier to blame it on somebody else.

For sure.

Yeah, like any— anytime anything goes wrong, I blame Alex, you know, but he's, he's so used to it.

I can take it.

So do I.

Yeah, I've had years of training. Yeah, well, and that kind of brings me to a question that I have. Do you have any systems or technology or sites that you use to manage all this? Because I think now you can have people— the buffer can be the portal or something that they can put the requests in and then you can have maybe a bot responding rather than them having your cell phone.

Yes.

A bot?

That's my answer now.

A bot. For the ones that I'm managing myself, I don't have a system or like a tenant portal that I'm using. That's just because it's honestly easier for me not to at this point because it's it's just one. I have another long-term rental, but I have family living there right now, so that's super easy. Maybe eventually when I have several more that I'm just like managing myself, I would I would use some type of system for some of the like Southern California property management that. We do here in the office. We do have a system that we've implemented. It's called Inago, and people can submit rent through that, and they can submit maintenance requests as well. So—

The bot.

The bot. Nice.

So yeah, there's stuff like that out there that helps keep things organized, and it can keep tenants from having your personal number and contacting you at any time and submit requests online.

There you go.

There you go.

I love that, you know, because then the bot will be like, we've received your request, someone will reach out to you shortly. And then they call in, they can't get a hold of anyone. That's kind of the, the vibe that I want.

Well, they call me is who they call. Yes. Yeah. They call me, Joe, did you get this one? Did you get this bot request?

Yeah.

For this maintenance? I go, yeah, I saw it. I already talked to him.

You go in the mirror.

Yeah.

Yeah.

I thought you were managing the property. No, no, I'm just managing the bot.

Yeah.

So on your, your own rentals, um, how are you financing your acquisitions? Is it creative or cash or—

For the Alabama one, um, we did a refinance. So I used Keyavi for that. And they're pretty easy to work with. For the 2 that I have in Northern California, they're both condos. I did traditional conventional financing, 20% down with those, just because it made the most sense for those.

Yeah. Did you buy those as investments or did you live there and then convert it into a rental?

As investments.

Really? And you only had to put 20% down? Normally, it's 25%. You must have bought them a while ago.

There was a bit of a hack involved. Because I have family who live up there. I purchased it, put them on title, gifted them a small percentage of ownership.

I like that.

was able to just do a standard 20% primary residence because my brother-in-law and sister are on title. So they were able to buy it as a primary. And it's an investment property for me. So there was a little bit of a hack involved.

Okay.

Not to get into the weeds, but who writes off the interest payments? Do you share that with them? Do they write the whole thing off?

They are not.

Okay. So do you, do you even declare that in your, on your taxes as an investment property?

I am.

Okay.

Yes.

Okay.

Yes.

Because you do get rental income from that, right?

Mm-hmm.

Okay. Got it. Yes. Yeah.

They're paying, well, technically no right now. The agreement that I worked out with them, since they're family, they're paying what the mortgage and HOA balance is right now, um, for a certain amount of years, and then they would pay market rent.

Nice. Well, it's getting paid down, so that's a plus.

Yeah, family.

It's like a long-term family play.

God, this family.

Freaking family.

I was like, geez, family.

Geez, I gotta give you everything.

Everything.

Yes, we're happy to do it.

We love our family too. Zero in my bank account right now.

We love our family though, because you're a family man, Joe.

Yeah, you're getting it all back.

Getting it all back, plus more. It's coming, it's coming any day, any day now. I can feel it.

That's what I heard a couple of weeks ago, but now we're a couple weeks delayed more.

There was just a tiny extension, but we're getting it back.

Okay, is that true, Lauren?

Yeah, it's true.

Tim Horn wouldn't lie to you.

I don't believe anything he says.

I'm the salesman.

You know, it's like, Joe, like, I found it, like, the greatest property in the world. The only problem is that there was a dead lady in the refrigerator.

Is that going to be hard to sell?

Yeah. Is that going to be okay?

I assume that's not an issue.

What's the big deal? Joe's like, tear— that's what he said. He's like, tear it down and start over.

Yes.

Honestly, it'd probably be cheaper than rehabbing this place. It was nasty.

Yeah. You just need to get the goth family that's like into that stuff. It's like all into like—

Right, because they're like walking around with a bunch of money to buy it, right? Yeah, okay, let's go with that plan.

There's got to be a rich goth family.

Let's go with that plan. Yeah, the Addams Family, all in.

Yeah, it's true.

Yeah, yeah, that's it.

Yeah, they're kooky and they're whatever.

They're a little fake.

If somebody wants to start managing remotely, what are some of the first steps that they should do?

Run. Kind of like I mentioned before, I think finding a property manager who is referred to you by someone who's worked with them in the past, Find a solid property manager. Obviously, you can't know everything in advance, but do as much due diligence as you can before. I think something that I have learned through all of this and am taking with me for any future properties that I buy in Alabama is to not put the cart before the horse. It's easy to get excited about real estate opportunities, But you got to buy with the worst-case scenario in mind and know that if the worst-case scenario happens, you're still going to be okay.

Yeah.

Because real estate can wipe you out. So, yeah, do your due diligence on the property, knowing the condition, you know, any of the big major repairs that are going to come up in the next Yeah. Year, 2, 3 years. And then finding a property manager that someone's worked with. I mean, you can use reviews online or forums like mentioned, Facebook groups, network, go to real estate meetups, kind of like your meetup, talk to people who maybe have experience already and ask for help as much as you can from people with experience. And then you find the property manager. And as much as you can be familiar with property management yourself, the better, because then you kind of have an idea of what the property manager should even be doing for you. So kind of, you know, keeping an eye on the properties yourself and knowing when maybe they need to do a price reduction, you know, looking at Rental comps in that area and seeing what the, you know, average rent price is for a 3-bedroom, 2-bath home, if that's what you're renting out, knowing what they're going for and making sure that a property manager is pricing it accordingly. Or even pricing it like just below, just so that you kind of are beating out that competition and you get a tenant faster than some of the other properties on the market are.

Yeah.

Finding contractors too. That's been probably the biggest challenge with like out-of-state investing is finding solid contractors that you can trust because most property managers have connections with contractors. And so when a repair comes up, they'll have their go-to people, but you have no idea if that pricing is fair or not. So yeah, connecting with handymen or contractors, that is huge so that you can make sure that you're getting the best price that you can in that area.

Yeah, that was kind of an interesting insight that you guys had was you're able to get a lot better pricing here in California than you are out there in Alabama, even though you would think—

shocking.

Yeah, that the, you know, the price difference would be would be cheaper in Alabama just because the, you know, living out there is cheaper.

They take 3 days to just answer the phone.

Yeah, they're like, hello? Yeah, I'll get to it. Sorry. No, that's anybody in Alabama. We love you. But, um, why is that, you think? Why are they ripping us off?

I— it's a great life mystery. I honestly, I'm like, man, the contractors, They must be well off in Birmingham and Montgomery. Um, I don't know how they do it.

Is it because there's less Latinos?

No, I, I think they, they go, where are these people from that own this property? California? Oh shit, let's charge them double. It's like around here. Yeah, if you're gonna do a rehab and you're in Riverside or San Bernardino, This is how much it costs. If you go down to the coast, Huntington Beach or Newport Beach, it's 3 times as much for the same work. Right. That's just the way it is.

Because they know you can afford it.

Yeah.

I've wondered if that's what's happened.

Yeah.

But it's interesting though, because a lot of the contractors, they just like partner with the property manager. So they don't necessarily know who the investor is or where the investor's from. So come on, maybe I just like—

Same property manager that gave your phone number out.

Yeah, I don't know.

And that's getting 10% on the work. Exactly.

Yeah, yeah.

I don't know, we're gonna crack that net.

I don't know.

We'll figure it out. Figure it out one day. If you're a contractor in Alabama and you have reasonable prices, call in now.

Seriously. We got plenty of business for you.

There we go. Love to hear it. Um, this is the part of the show where I've curated— we've curated several videos, and I would love to get your reaction on this.

Okay.

Producer?

Producer, pull it up.

They're right below you right there.

I don't know if you can read them.

Oh yeah, you need to put your ears on. Sorry, you have to mess your hair up.

No, it won't do anything to it.

It's okay, it won't do anything.

We had the hair and makeup gal in earlier, but, uh, she had to leave.

Yep.

Yeah, she'd leave early.

All right, we ready? This first one is don't hire a property management company.

What a lot of people don't know about hiring a property management company to run your rental is not only do they take 10, 15, 20% of the gross rent— not off the net, off the gross— But they also don't pay for any of the repairs.

That's still on you to do.

What a lot of people don't know about hiring a pro—

Oh, there you go. What do you think about that hot take?

That is a hot take. I would say it definitely depends on where the property is because, I mean, I'm doing both. I have a property manager in Alabama because it's very far away. I have, you know, limited ability to know what's really going on. To see it myself. So it's 100% necessary there. My other 2 in Northern California, I just don't need one right now. And I have family in the area too who can help with some of the hands-on things like handing off keys to a tenant, stuff like that, walking the property after someone moves out to check out the condition. So I would say it is needed when it is far away and you can't, you know, actually— Be there most of the time.

Seems worth it to me. Next.

Essential skills to being a property manager. Here we go.

Here are 7 essential skills for property managers to learn. Number 1, communication skills. It isn't just important for working on your properties. It's also a powerful tool for networking and finding new clients. Number 2, organizational skills. The more organized you are, the more prepared you'll be to handle whatever the day throws at you. Number 3, multitasking skills. One approach could be deliberately splitting your time between office work and field work. Number 4, learn how to properly screen your tenants. Before approving a tenant, always check their credit history, rental history, evictions, and backgrounds. Number 5, inspect your units regularly. Number 6, keep up to date on your knowledge. Whether this is reading blogs, joining associations, watching videos, or reading up on the new With laws. You want to stay up to date. And number 7, maintain a positive attitude, because the last thing anyone needs is for a property manager to lose their cool. Here are 7—

I like her. I 100% agree.

Okay.

I think she's right on.

Would you hire a young property manager, or do you want someone that's like been in the trenches for, you know, a while and know?

Yeah, I mean, experience is very good to have, but I am young myself. So, you know, anyone can do anything if you are willing to put your mind to it.

Okay, that's a positive attitude right there. Do you believe that statement?

Yes.

Okay, there we go.

Absolutely.

Yes, absolutely. I agree totally.

I mean, he started a podcast with a new guy.

That's true. Geez.

You just got to be competent. You know?

Yeah, yeah, that's true. That, that can come with any age.

Yes, or not.

Yeah, or not.

Yeah.

All right, we got one more. Why are Section 8 tenants in Los Angeles savage animals?

Oh no, people think being a landlord in California is easy. No, not by a long shot. We've got to chase down rent, evict deadbeats, Fix what they broke in our properties, and keep the police on speed dial to deal with unruly, violent tenants. People think being a landlord in California is easy.

Yeah.

That was kind of dark.

Yeah, it was.

I don't know what exactly he was supposed to be showing.

Right.

Yeah, I think it was probably like the electricity was off and he was going through the property. All the blinds are like screwed up, and for whatever reason they have just cloth over the windows.

Windows.

Yeah, it's not easy. Real estate's not easy.

You know, this is California. Nothing's easy here. You know, so let me just give you a quick story. One of my agents was leasing a place. It wasn't even on the MLS. He was just threw it on Zillow or something, doing a favor for a friend of his, and a tenant called. This was in LA. And they were texting back and forth, and you know, hey, I'm calling about your texting about your property. Is it available? He says, yes, it's available. When would you like to go see it? The next text was from the tenant. Do you allow Section Eight? And my agent, without even thinking, okay, because the laws have changed, said, no, we are not prepared for Section Eight. A few weeks later, I received a lawsuit in the mail, and we ended up settling that lawsuit. And thank God for E&O insurance, but it still cost us 10 grand to settle that lawsuit. Come to find out, this attorney, that's what he did. He went out and he had these people going out and talking, texting agents to ask them the same questions, and that's all it took. And he was like up to 25 lawsuits.

Oh my gosh. Yeah.

So be careful, you know, as an agent or even as an owner of property, what you say and what you put in writing. If you don't, if you're not up to date with the laws, that you get yourself in trouble real quick.

5th Amendment, that's what that's for.

Yeah.

Right to remain silent.

Yeah. Do you want to see it? Yeah, I want to see it. Okay, come see it, you know.

Yeah, yeah, in your head you're like, I'm never gonna rent to this person.

Yeah, yeah, come see it, come see it. They're probably gonna say, oh no, I couldn't get this guy, all right, so I'm gonna move on to another one.

Jeez, that's a racket right there. That's why we love attorneys on this show.

We do.

Do we have any extra questions from—

we do, we have the internet. Our favorite girl Stephanie in the chat. She says, you have a high tolerance for poor behavior. Is that your natural disposition or is this learned? Also, if you couldn't do this for a living, what occupation would you take on with these skills?

Stephanie out here with a deep question.

2-part question.

Deep. Yeah, she's like a reporter, you know?

I know.

Those fake reporters. The first part of my question is this, and the second part is this, you know. While you're answering questions, could you please answer both?

I would say I do naturally hope the best in people. So, my tolerance is probably higher than some people's tolerance.

I'm working on that.

I was going to say, though, in the last year, I have had to learn how to crack the whip a little bit. People can't always be trusted as much as I would like for them to be.

That's good.

Thank you.

That is the sad reality.

If we learn anything from Joe, no one can be trusted.

Nobody.

Trust no one.

No.

Yeah. What else would I do? You know, I don't know if there is anything else I would do. Like I mentioned, I didn't know what I wanted to do before I stepped into real estate. I knew that I had— I did have communication and organization and admin skills. I like working in a team. I like being a supporting role. And so I'm really happy with where I am right now. I think I have a certain level of freedom, which I do like, and ability to challenge myself. Um, to keep growing and developing, but I also am able to kind of work in a team environment and support what it is that someone else is doing. Um, so yeah, I'm pretty happy with where I'm at.

Yeah, maybe like a tech startup or something you could do as a different job.

Maybe.

I don't know, I'm just thinking of stuff.

Speaking of tech, we have another question. Are you worried about the Section 8 guarantees with administration and DOJ?

That's too advanced of a question for me. I haven't thought about it. So maybe Joe has more to say about that question than I do.

What are they getting rid of it?

Well, the audits with DOJ, you know, if they find fraud in the Section 8 program.

There's ripe with fraud.

I mean, it could be. I'm not sure.

No, it is. It is.

Well, you know, if it's fraud, it's fraud, you know, get rid of it. But I don't think the program's going to go away. I mean, I don't know the statistics. I can't imagine how many people are actually renters in this country than property owners, but I have to think it's very high. So I don't know that necessarily anybody's going to get rid of that stuff. I think the average income for anybody in the US is like around $60,000 a year. Like, if you live in California, that's poverty level here. Um, so I, I don't— honestly, I don't think that, um, he's gonna mess with that. That's real estate related. He's a real estate guy.

Yeah, no, it's probably— it's probably somebody at the top is creating ghost accounts and then depositing all this extra money into their own accounts.

What I have heard is he's going to to take over Gaza. And he's going to build, you know, beautiful buildings there. And then we're going to take all the Section 8 people and put them over there.

That's interesting.

Yeah. Yeah.

Okay.

I thought I'd throw that out.

Yeah, we'll see.

We'll see where that goes. Guantanamo is another good place.

That's true.

Yeah.

I think it's getting filled up already.

It is getting filled up.

Yes. At least we're using that.

Thank God.

Okay.

So we've got one more from Chad asks, do you think Ryan could handle these properties without you?

I don't know if Ryan's listening right now, so I should watch my words.

He's not. He's at the gym, like benching 380.

Yeah.

You know, I don't think he could. He already—

And honestly, I totally agree.

He's got so much going on. This isn't his only thing.

Right.

It just worked out. The timing worked out very well for me coming on as his assistant right as he was starting up all this Alabama stuff. I don't think either of us knew how it would roll out. But yeah, I think that he needs someone and I'm here to stay for as long as I can tell.

Nice. We'll put in a good word for you.

Thank you. Maybe a bonus, or I don't know.

They were missing last week. It was a very lonely week for me. I was here alone. And, you know, I don't like to be alone. I like to have people here that I can take to lunch and all that sort of stuff. But anyways, a few months ago, I said, I told Michaela, I said, you know, while the cat's away, the mouse will play. And she looked at me like, you know, a 26-year-old, whatever you are.

I was 28.

28. Okay. Whoa. She's getting older. 28-year-old. It's like, she had no idea what I meant. So I had to explain it to her. And then Ryan came in and I told him the same thing and he's 30-something in the middle there. And, uh, he didn't know, which was very surprising to me.

Right.

That they didn't know.

I say that now every time when I roll up and they're not there. I'm like, oh, the cat's away.

I also think that every time I'm not in the office because I know you're thinking it.

I am. I am.

Yeah.

She knows I don't like to be in the office alone and lonely. You would think that she'd just come in just to go to lunch with me.

If it helps, I was thinking of you.

She's like, no, Joe's probably saying in the cathedral about me.

I'll let you know next time. The thing is, I like, I'm a homebody. So if I have the opportunity to not get ready, work from home, I'm going to take that opportunity.

Speaking of homebodies, your husband was visiting Epstein's Island last month or whatever.

Virgin Islands.

He was like right around there, wasn't he? Richard Branson. Well, that's not fair. He didn't take you. It was a special meeting that he was having with Branson. Was it with Branson? Oh, it was with Branson. That's right. Yeah.

Yeah. A lot of Epstein.

Well, a lot of people own islands around there. It just happens to be where.

But he told you he was going to Epstein Island and you didn't want to go. For sure.

No Epstein anything involved.

Okay. Okay. Just want to make sure.

Confused.

Yeah, yeah.

I think they shut that down as far as I can tell.

Are they?

I think so.

I thought Bill and Hillary were gonna buy it.

Oh, maybe.

That's not a good look, but yeah.

Oh, you know, they've got that big giant foundation and yeah, and nothing else to spend it on right now.

True.

Because they got Doge.

They got Doge.

Looking at all that stuff.

Yeah.

Probably a lot of that's going in there.

Who knows?

Yep.

Um, thank you very much for being on the podcast. It was an absolute joy. I can't believe we actually got you on here. I hope you guys learned a lot about property management and, you know, when to use it or when to manage yourself and, uh, hire somebody or hire somebody. Um, we will be back here next week.

And how can people get a hold of Michaela?

How can people get a hold of you if they have deals or, you know, if they have other properties? Because you are buying. You're currently buying.

Yes. Flips or rentals. Instagram probably is the best way. Do you have my Instagram handle somewhere already?

Underscore Michaela Nguyen underscore.

That's the one. Yeah. Yeah. Instagram is the best way. I am in the office often with Joe and Alex. So if someone has your guys's number and they want to contact me. Oh, see what she did there?

She's all Always keeps a buffer. That's smart. I need to start doing that.

There you go.

Yeah, I need to start doing that.

Just let them know that you're looking for me.

Perfect. Okay. Are you buying like creative deals?

I haven't branched into that yet. Thought about it.

Got to find the right one.

But you're doing local flips as well.

Yes.

Yes. Ryan's teaching her.

I know.

Yeah.

A lot of flips going on in here.

That's nice.

Good stuff.

Anything on Epstein Island you're flipping?

Oh my God.

No? Okay. You'll never let that down. Sure, you know, these guys invited me to go to Hawaii last month, but that fell through, right? So if you have something going on at Epstein, you and husband have something, I'd like to go. I want to take a look at it, you know. I want to see the private rooms and stuff. You know, yeah, there's probably a lot of stuff that went on back there.

Yeah, it's probably tunnels and, you know, a bunch of weird stuff. But, um, that's all Joe's YouTube history right now, by the way, which I have access to. So I've been seeing that you're looking up Epstein Island all night.

Am I?

I'm just kidding.

That's news to me.

Yeah, maps, how to get to— anyway, um, Yeah, thank you guys for watching. Make sure to share this far and wide, and we have a meetup coming up on Monday, so please join us.

We'll see you there. See ya.

Bye.

If you want some more advice on real estate investing, reach out to us one-on-one.