461: From Cop to Real Estate Non-Stop – 80 Units in 3 Years in Dayton, Ohio

SHOW NOTES FOR EPISODE 461: FROM COP TO REAL ESTATE NON-STOP – 80 UNITS IN 3 YEARS IN DAYTON, OHIO

If you set your mind on learning something and surround yourself with experts in that field you have a pretty good chance of succeeding.  In today’s podcast, ex-cop, insurance agent and real estate investor Ryan Ingram shares how he grew a $50k per month real estate rental income from scratch by reading a book a day and aggressively networking with real estate professionals in his town of Dayton, Ohio.

What You Will Learn

• How living modestly can result in significant savings and ample investment capital
• Why real estate is the most time-tested wealth building strategy ever
• How wealth-building can be accelerated if you have a full-time job to cover your basic expenses
• The power of selective networking to your real estate investing success
• How to identify winning investment neighborhoods
• Why finding experienced mentors is key to rapidly growing your real estate portfolio
• How to leverage houses that nobody wants into a game-changing investment strategy
• The value of “relationship capital” and how that can help you jump-start your entry into real estate investing

About Our Guest

Ryan Ingram

Ryan Ingram was a police officer in NC for 5-6 years.  He loved every second of it until he got married.  When he and his wife had their first kid (01/2017), he had to leave.  So Ryan began reading books, upwards of 1 per day, to try to figure out out how to money to provide the lifestyle his family desired.  He now owns an insurance agency, and approximately 80 rental properties.

More About Ryan

• He “accidentally” got into law enforcement
• Got his undergraduate degree from Southeastern Baptist Theological Seminary
• When he signed up for the school, he signed a paper that said he would not drink while attending college
• When he turned 21, he broke that promise and got into trouble with the school
• They were looking to expel him
• He wanted to stay out of sight and out of mind
• He sat down with the Dean of Students and they looked at the local community college’s curriculum and he realized that the Police Academy would provide enough elective credits for him to complete his degree
• He ended up joining the local Police Department there in Durham, North Carolina and loved the work
• He worked there for 6 years
• Later, he got married and didn’t want to work the night shifts
• They had their first child and his wife, who was an assistant principal contributing to their income, wanted to be home with their baby
• He realized that with his Police income, he wasn’t going to be able to support his family they way he wanted without her income
• He started reading one book a day with the hope of  discovering what kind of work he could do that would better provide for his family
• One book he read was called The Automatic Millionaire by David Bach
• Since college, he was able to save half of his income into his 401K retirement account
• He had saved a good amount of money early on
• They built a house on 17 acres
• He realized that only way he was making money was by trading his time
• He wanted to get out of that trap to see how he could generate additional income with out having to trade time
• Read many books on the stock market and he thought he could invest in dividend-producing stocks that could eventually replace his income
• He quickly realized that with a salary of $35-40K a year, that it would take a long, long time and a lot of capital to meet their needs through stock dividends

Recognizing the Value of Real Estate

• One night, while on patrol, he met a gentleman who’s car was broken into
• The man was the owner of a local paint company and the owner of a bunch of real estate
• They became friends
• The man took Ryan around to his properties and shared information on how much he paid, what kind of income he was generating, monthly expenses, etc.
• He shared the benefits of real estate investing
• Ryan realized that if, what his friend shared was true, his dividend stock plan was a bad one in comparison
• He started reading a bunch of books on real estate investing
• At the same time, he took a commission job in sales selling life insurance
• Ryan and his wife started looking at what territories were open in the U.S. for his insurance business and they found one where his wife went to college and knew people — Dayton, Ohio
• He quit his police job to go full-time into the insurance business
• His wife was still working and had to wait until the end of the school year to move
• So, from April 2017 through June 2017, he commuted to Ohio from North Carolina
• They had a good amount in savings at this time
• Ryan figured that he would work the insurance business until she quit he job in June
• If he was not making enough at that time to support his family, he could always go back to the police force until he could build up his insurance income
• He would use his commute time to listen to audio books and podcasts

Making the Move Into Real Estate

• While he was in North Carolina, he saw home prices, in a not so great neighborhood, go from $5-10K (in 2009-2010)  up to $100K when he left in 20017
• In Dayton, he saw similar dynamics in that home prices were very low and he saw that 30% of Dayton’s housing stock was vacant
• But the crime rate was considerably lower in Dayton compared to Durham
• He saw Dayton as a safer place to invest
• He knew that prices would not be this low for long so he had to take action
• He plugged into some local networking groups in Dayton
• Bought his first rental property – a duplex – in August of 2017
• And, as he continued to buy more properties, his brother took an interest in what he was doing and they decided to partner together
• Ryan and his wife bought their personal home in Dayton, in a great neighborhood, for $70,000.  It was a small home but their goal was to keep expenses low and to save
• He was still doing his life insurance business and there was a lot of pressure – it required constant work and attention and the income was not consistent
• He also noticed that, as he was investing in real estate, there were no good insurance people that knew how to insure his rental properties
• He started expanding out into property and casual insurance so he could insure his own properties and other investors’ properties in the area

 Learning the Neighborhoods

• Ryan connected with other investors in the area through networking and BiggerPockets events
• As he connected more with local investors he got a better feel for the various areas of town from the great neighborhoods to the not-so-great neighborhoods
• Also, from his police experience, he had very good instincts assessing various neighborhoods
• His properties are heavily concentrated in one quadrant of one zip code
• He found an area he really likes for the following reasons
  • There is a high chance of properties appreciating in that area
  • The area is going to continue to grow the way the city is planning as the city invests in the community
• His first duplex he bought was not in this area and he does not feel it is a safe area
  • When he first bought the duplex, he bought it for $35,000
  • Even though it is not in the best area, it recently appraised at $70K – double it’s purchase price

His Current Portfolio

• 2 fourplexes
• 1 triplex
• A handful of duplexes
• The rest are single family homes
• He likes the single family homes because it’s easier to allocate the utilities
• Almost all properties have mortgages

Finding a Mentor

• He found a mentor as he was trying to reach out to the real estate investment community
• Thus gentleman has 600-800 homes in Dayton
• He took Ryan under his wing and showed him how he puts deals together and how he operates
• His mentor allowed Ryan to emulate what his mentor was doing

His Current Business Model

• Ryan started the year (2020) with 38 doors
• Today he’s at 80
• He finds distressed or seriously under-market-value properties
• He borrows money from friends and family at 10-12%, interest only terms, for 3-5 years, with balloon payment due at maturity
• At that time, he packages a bunch of properties together (they are currently getting a re-fi together on 34 doors)
• With the loan proceeds, they will pay back their private investors
• He works with a small local credit union.  He deals with the Vice President of Commercial Lending
  • Loan terms:
    • 20-25 year amortization
    • 4.5-6.5% interest
    • 5-10 year ARMs
  • When he first sought to finance these, the bigger banks wouldn’t touch the deal because the balance was too low
  • The small banks would, however, cover small balance loans but he found that by lumping the properties together they could get better terms as a commercial loan
• Lot Links
  • He acquired some properties through a program called “Lot Links.”  The criteria for a property to qualify was:
    • Vacant for 2 years
    • The utilities were off
    • 2 years delinquent in taxes
  • For Lot Links, you could put in an application for the program and, if the property qualifies, they would:
    • Do a Board of Revision foreclosure
    • Wipe away any liens and back taxes
  • All you had to do on these Lot Links properties is pay the foreclosure fees and they would deed you the property free and clear
    • Some properties needed very little rehab and some should have been torn down
  • He acquired 5 or 6 properties through that program
    • They all required very heavy rehabs
• He also acquired a number of properties for $15,000 and less
  • They required $25-30,000 in rehab costs
• Earlier this year he had about 12 rehab projects going at the same time
  • It was too much
  • They are now trying to do less than 10 at once

Property Management

• When he first started, he would hire property managers to manage his properties
• Now, it makes more sense to manage the properties inhouse
• Because he had developed strong relationships with local contractors, he felt he could easily handle the maintenance and repairs aspect of management
• He also managed to recapture 8% across his portfolio by cutting property management

Biggest Mistake(s)

• He considers it fortunate that he was easily accepted by local real estate investors as he networked and joined local clubs
• He now has 2-3 fellow investors, with decades of experience and 100s of units in properties, that he can call to ask questions or get feedback
• The biggest mistakes he made in real estate and with his other businesses is not more carefully vetting and screening people he partnered with
• For example, he had one contractor that worked for him that still owes him $30,000 worth of work
• He now takes more time seeking out strong word-of-mouth referrals from people he works with from other investors he trusts
• He also likes to give contractors a few smaller tasks first to see how they do first, before giving them a bigger job

Biggest Success(es)

• Eagerly and actively seeking wisdom, experience and knowledge from people he respects and knows are more savvy than himself
• Leaning into his mentors more regularly
• He also joined a business mastermind group that has been very helpful

Advice for Old Dawgs Looking at Real Estate Investing to Help Them in Their Retirement Years

• You have the resources necessary to be a success in real estate investing
• Youth is wasted on the young
• You either have the energy or the resources to make it happen
• You likely have a lot of “relationship capital” that you can tap into to fully leverage into real estate investing
• Be creative
• Try to approach things from a lot of different angles
• Contacting friends and families who may have savings and or self-directed IRAs and offer them great returns for investing in your deals

Current Business

• His insurance business covers all his living expenses
• He is able to reinvest all real estate profits back into their (his brother and his) real estate business
• He and his brother were speaking one day and realized that they would have 5 kids in college at the same time and they were wondering how they were going to pay for that
• They just passed the $50K gross rent per month mark
• They have about 14 years before their first kid has to go to college (his brother’s son)
• They are currently shifting their focus on what impact they could have on the community (such as the city’s “Lot Links” program)
• They are looking at how they can improve the experience of the people who rent their properties in the community
• They would like to dramatically improve the quality of life for heir tenants
• They think it will also result in an increase in equity as well

Rap-It-Up

• Favorite real estate book: Building Wealth One House at a Time by John Schwab
• Favorite business book: The Magic of Thinking Big by David J. Schwartz
• Most valuable web site for success (other than your own): YouTube
• Favorite app: AppFolio
• Favorite quote: “If you weren’t born into wealth, it isn’t your fault.  If you live without creating it you have no one to blame.” – Bill Gates
• If you had to start all over, knowing what you know, and you only had $1,000, what would you do to launch your real estate investing business? Use the $1,000 to get an education or some kind of licensing in an industry that supports real estate so he could “add-value.”  He would seek out people who have already built what it is that he is looking to do and he could add-value to their business/industry. (He has currently purchased 17 off-market properties from some of his insurance clients)

How You Can Reach Ryan

• His YouTube Channel

DISCLAIMER:  Many of the above strategies take knowledge and have a higher degree of risk.  You need to do your research and/or work with someone who is experienced to reduce your risk.

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Additional Episode Sponsor: Meno Studio – menostudio777@gmail.com