Why Every Business Owner Should Invest Their Profits Into Real Estate!

Hey, what's Mike Andes? And usually I talk about business and I talk about how to grow your small company. But today I'm talking about real estate and how you can take the profits from your small business and turn them into an asset like real estate or the stock market to be able to actually grow your business more. So I'm going to walk you through today through three different units, all three of which are being remodeled and currently going to be rented out within the next week. One is an Airbnb, two of them are long term rentals. I'm going to walk you through them today. This is part of a 10 unit apartment complex that I bought last year and then in 20 I bought 10 other units. So I'm going to show you around and as I show them to you today, I'm going to walk you through how this is so important for your small business. Because ultimately I'm not super like, you know, impressed with carpet and you know, paint and ceilings and lights. I don't really care about this, but I do care about how can I use this for my small business to be able to grow my small business and use these assets as leverage. So let me go ahead and show you through these properties. This one, this one, we only spent a little bit of money on this to kind of get it remodeled. We got vinyl windows, put in nicer blinds, new carpet, and then just kind of updated the kitchen here. So let me flip this around. So we painted all the kitchen. We don't over improve. So I did not change out these countertops cause they're not horrible. I didn't change it out to quartz. I like quartz. But I'm not going to tear this out. It's pretty good. So this was all sanded down, painted. These nice handles were put on and, and it looks great. Honestly, like this is a great kitchen. Honestly in my mind. We put new appliances in. It's nice and bright with the white. We painted everything. This is a two bedroom and in the past this would have rented for around $1,100. We're gonna be renting these out for 1,700 this next week. We'll get tenants inside of here. So it's nothing super fancy and we don't over improve these places. We could probably get an extra little 100, $200 a month in rent if we really over improved it. But we don't like we did not tear out all baseboards. We left this old baseboards and the trim inside of here. We left the heaters. They work just fine. So we don't over improve because this building is never going to be an A rated place. So for example, like this bathtub, we did not tear it out, we just refinished it, re glazed it all. You can see it's actually still drying a little bit there. And instead of trying to tear it out because as soon as you tear a bathtub and the surround you could literally have rotting walls and all sorts of other issues. So shout out to Marvin. He's the guy who comes here and helps us with maintenance and he did this whole unit took him a couple weeks and so really, really appreciate Marvin. I know he watches the videos, he did a great job on this one. So this one I think already has someone ready to go this week or maybe they're getting a showing today. But if you've probably seen the outside of this place before, there's a 10 year apartment complex and you can see here it's not like super, super fancy. There's nothing like this is not ever going to be a place where you have $3,000 per month rent. This is eight, number eight here. This is also getting rented out right now. Going to open this one up is a one bedroom and we did not put this hardwood in here. This is already here. And so I'm not a huge fan of this color. I like a little bit darker gray. But it was already here. It's only a year old. So again I don't want to over improve. I don't want to spend too much money on these. But we do update the blinds, update the windows, paint everything. Again, did not change out the countertop on this one simply because it is not so bad. I have a little diffuser in here trying to get looking nice or smelling nice. So that way when they come in here for the walkthrough, it's gonna look good. So this one's gonna rent out for fifteen hundred dollars per month. In the past this rented out for about 800 or 900. Now everyone in the comments is gonna scream at me and say that, you know, jacking up rents and I'm a horrible landlord and all the rest of it. You got to realize when you buy a piece of property, one of the things that you're looking for is undervalued rents. The rent should have been already 1100 or 1200. They were at 7, 8 and 900. So I looked as an opportunity to be able to improve the valuation of the real estate. And I'm going to talk about why it's so important when it comes to Your small business in just a moment. You can see here, we actually didn't even paint these cameras because they look so nice. They're stained. So they sand them, stain them, put nice fixtures on them, the little handles. And again, don't over improve things. We've got this little tiny, I actually really like these, these little tiny ranges and the stove. And then inside here looks really nice as well. Reglazed all the surround, everything in here. Again, this was Marvin. Marvin's awesome. We put nice fixtures on this. Shout out to Marvin all his hard work on getting these places looking good. But even like this wing on here, for example, because of the supply chain shortage and all the issues with that, what we ended up doing is actually making this into two windows because getting this size is going to take weeks and weeks and that's just lost rent at the end of the day. So looks good. Everything looks really great in here. Again, this one's going to go for $1,500 per month. And in improving the rent and increasing the rents, you're improving the value of the property. And that's why I got into real estate. If you go back and watch my videos from a couple Years ago, during 2020, right after the pandemic really hit, I said, I'm going into real estate and I'm going to. Because I expected what was going to happen now, interest rates were going to come down. Real estate would take off because of that. So I said, hey, I'm going to plow my money in the stock market as well as real estate because I need those value, the valuations of an equity to go up so that way then I can take the equity and make loans against it for the growth of Augusta Lawn Care. If you watch my videos, usually that's what I'm talking about, lawn care, landscaping. Because we have a franchise with almost 100 locations and we need a lot of capital to grow that business. And I didn't want to go out and get venture funding. I didn't want to go into a whole bunch of unsecured debt. So getting all of this real estate has allowed me to get really, really good terms on debt. So as we grow Augusta, get out here, go to the 10th unit, which is actually an Airbnb.

So as I, as, as we've improved the valuations of these, these properties, the rents have gone up and now I'm able to take loans out against these properties and get all my cash out of these deals. So this specific deal is 10 unit apartment complex. It was $1.8 million that I purchased it for. I put 800,000 down. But I expect in the next few months for this place to be worth 3 million, I'll be able to take all that money out and I'll basically have no cash in the deal. So. So this is the third unit I want to show you today. It's actually going to be an Airbnb and they're not done yet because there's a really nice quartz countertops put on in the kitchen there. But this is my favorite one. We spent significantly more on this one. I'll have a breakdown. Another video down the road showing the whole breakdown of the Airbnb. There's a couple reasons why specifically I didn't Airbnb on this one. Number one, tax reasons. If you run a Airbnb, our short term rental, as a short term rental and not a long term rental, you don't have to depreciate things over the course of 25 or 39 years for commercial real estate. What you can do is run it like a business and take those, those expenses and the renovations in the same year as an expense. So this is the 10th unit here that we have painted. If you watch a video, watch, watch up here. This link up here will show you the video from last week or a couple weeks ago when this place was an absolute. It was horrible. We had popcorn ceilings in the past, we had horrible carpet. Everything had to get repainted, redone. I really love this. This flooring is a vinyl plank flooring and it has a little bit of brown, a little bit of gray. Really ties everything in again. This is going to look beautiful once it's all finished with a quartz countertop. We'll just make this place pop. And this is just a one bedroom, a really simple. We already have all the furnishings and we're going to put a queen bed in here, make it look really nice. And I expect to be able to rent this place out for at least $170 a night on Airbnb. Everything's brand new. The furnishings are going to be really nice, the decorations and it's really modern looking and contemporary. So I expect to be able to get $170, $180 per night. So if I can bring in like 3,500, $3,600 per month in revenue from that Air, this Airbnb, I'd be happy. So in here we got a new vanity. We'll get a mirror up still. We got a plan in there. And again, same thing here. We didn't replace the tub. Because as soon as you tear this tub out, you could have all sorts of issues. And so we just replaced the fixtures of the, of the shower and then replaced the surround, which even the surround I didn't want to take out. But when they were taking out, there was this like metal bar here, if you remember from last time, and it started chipping out the surround and we had cracking it, so we had to tear the whole thing out. But we'll reglaze this and it'll look white and it'll look brand spanking new and still not 100% done. Still got a drain here, mirror here, we got the countertops. But this one, all in all, like with everything included, is going to be about 30,000, which is at least 15 grand, like twice as much as I'm spending on the other units. But this is going to look brand spanking new. Smart locks. Like a really, really good place for an Airbnb. And I really want to learn this because I want to be able to share with you all, but more importantly, with our franchisees of experience, Augusta, some of them are now two years into becoming franchisees, usually between years three and five in your small business, you start to really generate quite a few profits. And I want to be able to share with them exactly what I've done with this Airbnb to be able to get those tax write offs and get those tax benefits and not have to pay as much high taxes on their income and on that asset, their business that's producing a bunch of cash flow. I'll keep you updated in the future, but at the end of the day when it comes to your small business, because I'm not super passionate about this, I'm not passionate about countertops or Airbnb. I don't really care. I do half of it because I'm going to educate myself and learn and then be able to pass that along to franchisees and Augusta Nation. But also the other half of it is building equity in these allows me to get very, very discounted loans that I can then use in my business that are secure against this real estate and secured against this asset. I get a 30 year mortgage on that I can get 3% interest on. I can't do that. Getting a small business loan, I can't get that. You're gonna have 5, 10 year terms, you're gonna get 6, 7, 8, 10%. And so as we scale up Augusta, I don't want to take outside equity and I don't want to have to go get those really bad interest rates. And loan terms to grow the company. So I'm using real estate, I'm using stocks, and. And that's kind of the story. So hope that was helpful. Watch this video here. Again, if you have not seen this specific unit just a couple of weeks ago when it looked absolutely atrocious, and for everyone that is going to say it's so expensive, remember, we're in Washington state. It's a lot more expensive here. Things are extremely expensive. Labor is extremely expensive. And I know I could have done this unit for like 10 or 15 grand instead of 30, but we wanted to get it done fast, efficiently, and really did not skimp out on any of the materials. So hope that was helpful. Stay tuned for an update where I break down the numbers on this unit.