How to Buy Rentals (Faster) with Real Estate-Related Skills (Rookie Reply)

Ashley:
We take all types of questions, but today is a hard one to listen to. A rookie investor has realized that his first house has come with major buyer’s remorse. Today, we will unpack his options.

Tony:
We’re also going to cover how to communicate with your tenant while setting boundaries and how to determine your next steps when you’re feeling a little stuck as a rookie real estate investor.

Ashley:
This is The Real Estate Rookie Podcast. I’m Ashley Kehr.

Tony:
And I’m Tony J. Robinson. And with that, let’s get into today’s first question. So our first question comes from the BiggerPockets Forums, and it says, “I work in the Asheville, North Carolina area for a small company doing custom remodels, mostly kitchens and bathrooms. I can do any labor that doesn’t require plumbing or electrical licenses. I love my job and I’m thinking about how I can best leverage these skills to make greater future investments. I currently own one rental house that I manage and do all of the maintenance. What type of strategies and paths forward? If you were in my shoes as a professional handyman and home remodeler, where would you focus your time and energy to get the best return?” And this question, again, comes from Jackson Any BiggerPockets Forums. First, let me say, Jackson, I mean, dude, congratulations. You have one of the most desired skills in all of real estate investing.
When you hear about a lot of the horror stories of being a rookie real estate investor, it’s oftentimes tied to people hiring a general contractor or a subcontractor or handyman who disappears in the middle of the night with their money. You don’t necessarily have to worry about that because unless you disappear on yourself, that’s not really a concern here. So if I were Jackson, I would take my skillset of everything aside from electrical and plumbing and use that to be the kind of sweat equity in a partnership. And I would probably first focus on flipping homes to build up my cash reserves. And then once I’ve got enough cash, I’ll start siphoning that cash off to buy deals myself. But dude, you’ve got a skillset. Man, I’ll partner with you. I can go raise the capital on the deal. You do all the work. And then we got a beautiful partnership.
So I mean, I will go out there and find a partner who can either bring the capital and then someone who can source the deals. And then you can be the person that does all of the labor and the managing of that labor.

Ashley:
I’m going to say the opposite. I would not partner with you for having the skillset. I would say that there would have to be more to it than that because I’m putting up the money, I’m maybe signing on the debt, you’re just spending time and doing labor. And yes, you won’t get a payout if it’s not finished, but you don’t have skin in the game besides just your time you put into doing the rehab. And yes, that can be a lot, but what if you decide to take your time and you need to do other jobs because you need to make money now? So I would think of another way to add additional value or to be able to put a little bit of skin in the game. So maybe you are just putting in $10,000 or you’re putting in some money so that you also have some skin in the game, but you’re also running the remodel and things like that too.
I think that’s a great idea to do the flips. The other option I would give you is to buy a house to live in as your primary residence and fix it up and either do a living flip or turn that into a rental property too. You have a great skillset to add value to this house and then sell it after two years and not pay any taxes on it because it was your primary residence for the last two of the five years. Or you could go ahead and add that value and then turn it into a rental at the end of year one. So I think those are several different options you have. You definitely have an advantage having the skillset. You can save so much money on labor where you’re going to be able to make a little bit higher offer than other investors per se because they have to pay for that labor where you’d be able to use your own time.
And it may be just the electricians, the plumbers that you maybe have in your Rolodex that you can actually use can be an advantage to.

Tony:
Ash, you are such a shrewd businessperson. And I love that point of like, hey, I guess in theory, they could still disappear in the middle of the night, but they would just be disappearing on me, not on themselves. So I do like the idea of maybe trying to get a little bit of skin in the game. But I think if … And I guess this is the good thing about partnerships. You can structure a partnership in any way that makes sense where maybe it is, “Hey, I’m going to pay you an hourly rate on the deal. I’m still going to pay you like I would pay a person, but hey, maybe you’re going to give me a slight discount so we can share and some percentage of the profits.” That way, because you’re absolutely right. I mean, because they still got to eat. We’ve got to make sure that we got time or money to keep the lights on.
So I do like that approach. But I mean, the ability to do all of the work, there’s an incredible amount of value for that. And for me, someone who lives in California, I’ve never bought anything in Asheville, North Carolina, having someone who’s boots on the ground, knows the contracts or knows the contractors, knows the area, has a skillset, there is still a lot of value for that or in that for me as someone who’s doing this remotely.

Ashley:
Before we jump into the next question, let’s take a quick break. When we get back, we’ll go over tenant communication without losing your sanity. Okay, welcome back. So our second question comes from the BiggerPockets Forums. I self-manage a few single family rentals and a duplex, and I have been tracking all of my important dates in Google Calendar. The problem is I usually end up forgetting to send important documentation until the last minute, like sending new tenants, a list of utilities to turn on, or a move-out checklist, and often end up having to manually print out a lot of paperwork and bring it with me to appointments. For those of you self-managing a smaller number of units, have you figured out a good way to do this without spending a fortune on software? So we actually not too long ago did a episode with Jamie Banks and she led us through using a project management software monday.com and being able to set that up to pretty much to do exactly this.
So you would get reminders, a lot of this would become automated for you, so that is a great option. Personally, I use TurboTenant for my rentals, and when you move someone in, you go through their lease builder and actually build out the lease in there, kind of guide you along with everything you need specific to your state, and then you can add all kinds of attachments into there. So all of this could be given to them when they do their electronic signing of their lease. They’d be able to get all of this at once. If you are a BiggerPockets Pro member, you can get rent ready, which is another great one for a smaller multifamily that you can use too. If you have a smaller portfolio where you can go ahead and put a lot of this into the software and have it send you reminders, it can automatically send things out to your tenants.
And one thing that I really like with all of this software, not necessarily monday.com, but the two property management softwares is the tenant communication piece where not only can you send them documents and things like that, but it also has messaging in there too. So all of your messages with them is all in one place too.

Tony:
Yeah. Ash, I couldn’t agree more. I think having some sort of solution that automates the sending, it’s one thing to have it on your calendar to remind you, it’s another to actually put together the email, attach the proper documents, and then send that off to someone. So I’m a big fan of Monday. We use Monday a ton. And to Ash’s point, Jamie Banks just gave a great breakdown on that. I think the other thing that maybe you can look into, I mean, if you’re managing a few properties already, do you might also consider looking into a virtual assistant? And I know that people think that it’s going to cost a ton of money to do that, but A, you don’t necessarily have to hire them full-time to begin with. I think the ability to find a really, really strong candidate goes up if you are paying them for 40 hours a week.
But even if you bring someone on a part-time basis, five to 10 hours per week, that’s still work that someone’s willing to take. And especially if it’s for maybe lower level tasks or easier to complete tasks, like sending out emails and attaching documents, that’s something that’s pretty easy for someone to do. So I mean, you could probably find a VA to do that work for four bucks an hour, maybe even less. So I would maybe even look into that because then they can all start helping you in other parts of your business as well. And man, I know my life changed pretty dramatically once we hired virtual assistants, so I’m a big proponent of that as well.

Ashley:
Yeah. Actually, one website that I’ve had a lot of luck with is VPM Solutions and they’re virtual assistants that are specific to real estate and property management. So they have certifications and training that they give to the virtual assistants that you can hire through that website. And you could literally hire someone for two hours a week. You don’t need to hire them full-time or commit so many hours. You can do it as you need them, but really easy process. Upwork is another one where you can find virtual assistants. And then there’s another company Scale virtually, but most of the time you have to hire that person for at least full-time work through them.

Tony:
We’ve used onlinejobs.ph, pretty heavily for most of our sourcing. I think Upwork works really well if it’s more like a gig-based thing, but if you’re hiring someone for maybe more recurring work, I feel like we’ve had slightly better luck with onlinejobs.patri just in terms of the quality of the candidate. And obviously that website is focused on the Philippines, onlinejobs.phchence for the Philippines. But there are other websites that focus on Latin America. And I have some friends who focus on VAs from Latin America. So you can go anywhere, but I think the bigger thing is trying to find the right person for what it is you’re looking at and having the time and bandwidth to train them up to do the things the right way is probably the biggest piece. But virtual assistants help a ton. The right software in place helps a ton as well.
The downside is both of those I think requires some level of cost. I think the other thing too, and this is not to get too nerdy or to go too far down a rabbit hole, but if you’re at all paying attention to what’s going on in the world of artificial intelligence and the AI tools that are out there, vibe coding is this phenomenon where you can basically talk to these different AI tools and they can build things for you. You can build almost anything that your mind can even potentially conceive right now with all of the different tools that are out there, but like lovable.dev or lovable.com now is a big one. Base44, Replit, Cursor, if you’re a little bit more tech savvy, but all of these tools allow you to say, “Hey, I want to be able to upload all of these different documents that get sent out on these specific dates.” And then it’ll build a tool that does that for you.
So a little bit more involved, but from a cost perspective, significantly cheaper than the ongoing cost of a virtual assistant or some of the software that’s out there. So just an option if you’d like to nerd out in that way as well.

Ashley:
And that was a glimpse into what Tony does in his spare time.

Tony:
The very little spare time that I have. You’re absolutely right. I’m inside of these different tools testing it out. We got to do an episode, I think, on how we’re using AI. Are you using it much, Ash, and your day-to-day workflow? I know we use it for helping with content, podcasts on those things, but … Yeah,

Ashley:
I mean, not to the extent you are. So yes, I’d love to do an episode to learn. I mean, the biggest thing for me with AI is in Hospitable is using the- The reply with AI. And so I have to talk to a single person and they do all my communication. I did this real recently where it’s like me waking up to a phone call or a text, a short-term rental manager, then me sleeping gracefully, putting my phone on airplane mode, do not just stop and whipping it across the room because I have so many that messages for me. They’re little AI person. So that is just the best thing that’s happened in my life as far as AI.

Tony:
And for those that know, Ash and I both use Hospitable as our property management software, but they’ve integrated as many tools have with artificial intelligence where they have this built-in feature where it’ll scan everything that you’ve ever sent to all of your previous guests, you can give it all this additional information about your property. So that way as new messages come in from guests, it can use all of that context to come up with a response. And you can either set it where you can review those messages before they go out, or if you trusted enough, it can auto send as well. So to Ash’s point, she’s on just airplane mode letting the AI …

Ashley:
Yeah, I auto send all day long, but there was this not too long after we implemented it, there was a guest that messaged and said they were bringing a trailer with them and if there was room to park the trailer or whatever. And I was like, “Oh my God, I got to respond to this because it’s not going to know. ” And I look and the AI responded to it and it’s like when you pull in, there’s a field to the left, you’ll see the gate on the right side and a field on the left and you’ll be able to back it in right there that should work. I’m like, are they pulling satellite images now at the property? How does it know that? But it must have been from another message or something, but it was the perfect answer. And they’re also like they.
It’s also so much nicer responding, so thoughtful and things. And so yeah, I enjoy it. I enjoy reading how pleasant and friendly I am to my guests.

Tony:
If only they knew. We should actually do an episode of that because I think there’s so many different use cases for artificial intelligence. I use it in my underwriting workflow where if I’m looking at a market or if I’m working with someone who’s looking at the market, one of the things I’ll do is I’ll take all of the data sources that we use, like AirDNA Price Labs, they allow you to get the, not the address, but you can get the latitude and longitude coordinates for all of the listings on whatever market it is that you’re looking at. And that data becomes super helpful because you can start to build a heat map based on revenue of where the best performing properties are located within a market. And before, I would take those latitudes and longitudes and go to Google Maps and I just had to paste each one individual and it was a pain.
Now with one prompt, I can export all that data and it builds this interactive map for me where I can view very easily and I can see the revenue. So anyway, there’s a lot of different use cases for AI. So we’ll have to do an episode about that here shortly. Yeah,

Ashley:
Let me think of what I need built and then I’ll send it to you as an example. I’ve built it out.

Tony:
Yeah. There’s a multimillion dollar idea right there is where you just go to lazy millionaire real estate investors and say, “Hey, what tool do you need that I can build for you? ” And then line out the door. All right guys, we’re going to take a quick break before our last question, but while we’re gone, be sure to subscribe to the Real Estate Rookie YouTube channel. You can find us at realestaterookie, that way you can see mine and Ashley’s beautiful smiling faces every Monday, Wednesday, and Friday, but we’ll be back with more right after this. All right, we’re back with our final question. And today’s final question also comes from the BiggerPockets Forums. And if you’re not in the forms, make sure you go and check it out, guys. There’s a tremendous amount of information, both new, historical, and everything in between about investing in real estate.
And there’s a good chance that whatever question you’re thinking about asking has probably been answered four, five, six, seven, eight, 20 times inside the forum. So it’s still a great place to go and learn and network with other real estate investors. But today’s final question says, “I just bought my first home and I’m already severely regretting it. The garage has been converted into a mother-in-law suite with a separate entrance, essentially making it a duplex setup. We moved into the mother-in-law suite and then we started to find out all of the issues. The plumbing that was done for the suite is completely wrong. They used undersized PVC for the toilet, incorrect fittings, et cetera. In order to fix this, it would require tunneling across the entire house, which will be about $20,000. The electrical is the next item. I’m an electrician, so I started to work on that.
I found extension cords running through the wall. Oh my God. I’ve never heard that before. Extension cords being used.

Ashley:
I’ve seen a house with that before.

Tony:
I’ve never seen that before. Extension cords running through the wall being used as wiring. Green wires actually being used as hosts instead of grounds. I even got shocked completely by accident when I wasn’t working on anything. The shed has a breaker in it that turns on the lights. I went into the shed to turn the lights on and touched a screw on that panel and it shocked me so it could hurt anyone. There are so many more issues with the plumbing that we’ve already found. The HVAC system needs a complete overhaul. Electrical is genuinely scaring me with what I’m finding, especially with what I can’t see behind the walls. What options do I have? I closed on December 19th, paid $325,000, and my first mortgage payment isn’t until February. Do I try and sell it and take a big loss and move on, contact an attorney for a potential case, keep the home, and make the repairs that are necessary over and over?
Man, what a situation. First, let me say, I’ve never personally been in a situation where I felt duped, I think, by the seller. There was a time where I bought a house from a wholesaler, and in between the time that we went under contract and we went to go close, the roof collapsed, the ceiling internally collapsed, and we went back and were able to negotiate on that piece, but that was luckily I caught that before we closed. After closing, it is obviously a little bit more difficult because now you own the property. I think if I were in this situation, the first thing that I would do is I would just go to the seller and try and have a civil conversation. I really think that would be my first step is like, “Hey, I don’t know if this was ignorance or if this was maliciousness and you trying to pass these issues onto me, but here’s what I’m finding.” And I think these are very serious concerns.
And look, Mr. And Mrs. Seller, we signed a lot of paperwork and documentation during the closing process where assume that you use an agent, they made you sign on all the standard paperwork where you were supposed to disclose certain things to me as the buyer of this property. And I have reasons to believe that maybe you knew about some of these things, especially given that you have this mother-in-law suite built, that maybe you did not disclose during that closing process. Either A, we can make this a very long drawn out fight, or B, we can try and work this out amongst ourselves, and here’s what I’m asking for, and you kind of lay out what you feel is the right path forward. That would be my first step. I think my second step, I would at least talk to an attorney to try and understand what options I have in front of me.
Someone who understands, I guess a real estate attorney I go to first and ask them for their insight, or maybe it’s someone else. I’m not even sure who best to go to, what legal discipline makes the most sense here, but I’ll probably start with the real estate attorney seeing what they say and let them point me in the right direction. And then if all else fails, I would probably, given your skillset, I think I would probably just try and work through those issues myself in terms of fixing them as opposed to selling the property. But that’s just me at a 30,000 foot level. Ash, what’s your take?

Ashley:
Probably every house that I’ve ever bought, the disclosure says unknown for everything. I think people know that they have a fixer up for just to put unknown and they can try to not be legally responsible for not stating that something was wrong in the property. I think the first question I was asked is, did you get a home inspection on this? And if you did, I would start with the home inspector and seeing why maybe some of this stuff was missed. But also, I can see a lot of this stuff as something that a home inspector doesn’t even look at. And one thing that I’ve really realized, and I do like to get a home inspection, I think they’re a wealth of knowledge, but I really like to get my plumber HVAC guy in there. So this house that I’m doing now got under contract, did an inspection, a couple things came up or whatever they’re getting taken care of.
And then I brought my plumber in to do, it has a boiler and baseboard heat, and we want to rip all that out and put an actual HVAC and AC into the property. So I had him come in and when he is looking around, he pointed out four other things. The one sewer pipe in the house, it’s actually pitched upwards, so it’s pitched the wrong way where it should be pitched down to go outside of the house. Then there was also a little bit of rot in one of the sewer pipes and he is like, it’s fine now, but eventually that’s going to go something you want to replace. So I really think I’m anyone that’s scared now after reading this question as to protect yourself as much as possible. And when you do an inspection, bring in some of these experts that are actually doing this day-to-day.
A home inspector is certified, but they’re not actually the ones out making repairs on properties and seeing common issues that come up. They follow a checklist.

Tony:
They follow a checklist. And also, if you look through an inspection report, a lot of times it’ll say, “Contact a qualified professional.” Someone else needs to come look at this. So even for them, they’re trying to make sure that you understand that there’s limitations on their skillset. I love that.

Ashley:
And I know this doesn’t answer the question of what to do, but I think that’s something that can be really beneficial, especially now with how the market is. You have time. You don’t have to put in fast offers and offer no inspection just to get an offer accepted. Properties are sitting longer at days on market, at least in my market at least. So the electrical, that probably is something that maybe your that your home inspector should have pointed out. I mean, they should have checked the outlets, gotten inspection reports where it says the outlet’s not working or it doesn’t have the GFI or it’s sparking or it’s not grounded, whatever. So I think that’s something that maybe your inspector could be accountable for. Again, I don’t know what the rules are or how much of a standard you can hold your inspector to if there is any liability that they didn’t give you a correct inspection for a report.
But the PVC piping and stuff like that, all the plumbing, everything, I mean, that’s underground. I mean, it could honestly be that the seller didn’t know about some of these issues either, that maybe they hired someone, did all this work and they thought it was fine. But I have to say with Tony, the first thing is to, like you said, go and talk to an attorney and see what’s liable before you make any other decision, because you might as well go that route to see if you do have a case for anything rather than just selling it and taking a big loss or making the repairs. At least if you know that you have no case for this, then you can go through the other options. I think my second thing would be to actually go and get an estimate for what all the repairs would be and then make the decision, okay, do I sell it, take the loss, or should I go ahead and make the repairs on the property, if it ends up being better off to do that?

Tony:
Crazy story. Extension Core is behind the drywall is a new one for me. I learned something new every time we do this podcast. So wish you all the best. It’s a crazy situation to be in. I think the last thing I’ll say, because you said that I bought my first property and it sucks when the first property is such a big punch in the face because it can almost taint your experience about what it means to be a real estate investor, but just no one understand that no one has a perfect track record as a real estate investor and no one comes out on the other side without a few bumps and bruises and battle scars. So unfortunately, you got yours on your very first deal, but I just want to make sure this doesn’t become an obstacle or the reason that you don’t do your second deal or your third deal.
If anything, you just paid a decent amount of money for a world-class education on what it means to be a real estate investor in reality. So don’t let that education go to waste. Let’s just apply that towards the next deal.

Ashley:
Thank you guys so much for joining us today on Real Estate Rookie. I’m Ashley Eastoni. And if you would like to submit a question, you can go ahead and post in the bigger pockets forums, or you can send a DM to Tony at TonyJRobinson on Instagram or to myself at WealthfirmRentals. Thanks so much for listening and we’ll see you guys next time.