264: Ask Bill! Making More Money in Real Estate, Moving into Multifamily and Finding Good Property Managers

SHOW NOTES FOR EPISODE 264: ASK BILL! MAKING MORE MONEY IN REAL ESTATE, MOVING INTO MULTIFAMILY AND FINDING GOOD PROPERTY MANAGERS

This is our monthly Fun Fact Friday “Ask Bill!” episode, where Bill answers specific real estate investing questions received during the month from e-mails, in-person conversations, phone calls or through online portals such as BiggerPockets.com and Quora.

One of our goals here at the Old Dawg’s REI Network is to help to educate/enlighten fellow real estate investors, to share what little knowledge we have by answering your questions, and to help other investors to broaden their understanding of real estate investing and to, hopefully, avoid some of the mistakes that can cost you later.

In this month’s “Ask Bill!” episode, Bill answers questions on how you can make more money in real estate investing, how to transition from single family home investing into multifamily investing and how to find and deal with good property managers.

Question #1 – How do I make more money in real estate?

Answer to question #1

Congratulations! You are already off to a great start because you recognize that real estate is an excellent way to make more money — much more money! But there are lots of great ways in real estate to make more money. You could be a real estate agent or broker, a developer and build properties from the ground up, you can be a passive investor buying into syndications, own rental property, buy liens and deeds and so much more.

Personally, I’m a buy and hold guy, which means I invest in rental properties – from single family homes up to large apartment buildings. Investing in rental properties is a great way to make money because you receive monthly rental income from your tenants and, WAIT!  THERE’S MORE!  — if you buy right, your property increases in value and you build up equity as well. By buying a property that might need a little work, fixing it up, renting it out and boosting income, you can see steady cash flow and equity in a very short period of time.

I have a podcast for real estate investors who are 50 years of age and older. On the podcast, I feature guests who have been successful making more in real estate. One of my favorite guests was a gentleman who had an engineering job and was concerned that he might not have enough money for his retirement. So, he decided, with his wife, to take out a $50,000 home equity loan against their personal home to invest in real estate.

With his $50,000, he proceeded to buy single family homes, and later multifamily homes, using the “BRRRR Method” made famous at BiggerPockets – The Real Estate Investing Social Network (BRRRR- “Buy, Rehab, Reposition, Refinance, and Repeat.”

In only five years, he was able to leverage that $50,000 equity loan into $56 million in rental properties. It’s an amazing story but I think it illustrates very well the power of real estate to make more money!

If you’d like to hear the podcast and how he did it, just click here: 217: Husband & Wife Turn $50K Home Equity Loan into $56 Million Real Estate Portfolio in Just 5 Years

Question #2 – Thinking of jumping into multifamily and having issues with a property manager

Hey Bill, enjoy your podcast.  It looks like your leaning towards multi-family apartments more than SFRs (single family residence).  I own a couple of SFRs in different markets and was thinking of jumping into multi families.  The market is shifting which makes me cautious.  I understand deals are still out there.

On another note, do you mind sharing or recommending a good PM in Indy?  I purchased a house (over a year ago) from a TK (Turn Key)provider.  Later you had them on your show (and you were a guest on their show).  It’s a good little property but has been vacant for over three months.  I guess the fallout from Morris Invest is adding inventory.  My PM sends out a weekly activities spread sheet which is somewhat helpful but doesn’t tell me if they are being pro-active in getting in rented, And they get upset when I call for status (they point to the activities spreadsheet).  Any thoughts?

Thanks in advance for the input!  I’m a Southern CA guy as well so it’s hard for me to be present and to get this rented.

Thanks!  Dave

Answers to Question #2

Dave,

Thanks for listening to our podcast.

Yes, I am 100% focused on multifamily and I highly recommend others to consider the same.  If you want to know why I prefer multifamily, have a listen to my podcast episode #134 and there are a bunch of other podcasts I recommend in the show notes.

Also, you mentioned how the market is shifting and you want to be cautious.  Being cautious is a good thing!  You want to be cautious!  The last thing you want to do is to be stuck in a property you overpaid for, over-borrowed on or unrealistically projected your growth stats or returns.  When the market is shifting, you want to be MORE conservative than usual.  And I recommend, of course, that you always be conservative in the properties you buy and in your projections.

You don’t want to get stuck with a loan you can’t get out of or stuck with a property you can’t sell for enough to get you out of debt.

On recommending good PMs (property managers) in Indy, I will hold off.  Not that there aren’t some good ones but, I recently got a new PM to replace my old PM and it’s too early for recommendations.  I’m very impressed with what I have seen thus far with the new PM and their approach but I can’t publicly recommend them at this point.  Plus, not everyone is looking for the same thing in a PM or is going to have the same idea of what they want in a PM.  I would recommend you listen to

Regarding your current PM that sends activities spreadsheets and who gets upset when you call asking for a status, here is what I recommend:

• Fire them!
• Of course, I would recommend that you tell them that you have the right to call when you want to and that 3 months is too long to wait for a new tenant.  If they are willing to change to please their client, great!  If not, FIRE THEM!
• Don’t waste anymore of your precious time and money!
• Find a good PM!

Here are some good podcasts and articles that can help:

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