Rookie Podcast 20: Using Lines of Credit to Kickstart Your Investing Career with Charlie Ashley

Rookie Podcast 20: Using Lines of Credit to Kickstart Your Investing Career with Charlie Ashley

48 min read
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Today, we hear from Lexington, Kentucky investor Charlie Ashley, who uses lines of credit and construction loans to build his portfolio while working full-time.

Charlie walks us through his year-long education phase, his first couple deals, and the expensive lessons he learned while renovating a property he lovingly calls “The Pit“!

Sure… finding deals is important. But today you’ll learn how understanding financing has helped Charlie gain a lot of momentum quickly—and how every new investor can do the same.

Thanks for spending time with us every Wednesday. If you like what you hear, let us know with a rating and review in Apple Podcasts… or share this episode with a friend or family member!

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Read the Transcript Here

Ashley:
This is Real Estate Rookie, show number 20.

Charlie:
Okay. This is the problem. This is what I’m getting paid to do as an investor. We don’t make those big paychecks because things are easy. We get paid because it’s difficult, and we solve problems. Just fixing it, learning how to fix it and then move on from there.

Ashley:
I am Ashley Kehr and I am here with my co-host Felipe Mejia, who was feeling a little bit left out today because he’s the only one without Ashley in their name.

Felipe:
That’s hilarious. Our guest today, Charlie Ashley, he is awesome, and he talks about a property that he calls the pit. You can only imagine why. Right, Ashley? He talks about how much money and how many mistakes he made with this property and still came out on top on the other side of it.

Ashley:
Yeah. He mentions that his main priority when he purchased this house was just getting a foundation in and getting the house onto the foundation.

Felipe:
It’s crazy because he talks about when he did the walkthrough that he touched the wall and that it started wobbling like paper. I’m like, man, that must have been a crazy scene.

Ashley:
Today’s episode is great to listen to, if you are using the bird strategy, want to use it, or you’re just doing any kind of rehab. He is completely honest with us and talks about the mistakes he made during this pit rehab. But yet here he is, he’s still going on and he’s looking for his next deal.

Felipe:
One of the things that he talked about as well was, finding his MVP and how he doesn’t know what kind of value add he did to him, but he was just a genuine friend and that created a great relationship. There’s some great nuggets in here, great topics to talk about. Make sure that you follow through to the end because at the end he also talks about where you can email him if you have any questions. Charlie was an awesome guest. We can’t wait. So, let’s just go ahead and bring him out.

Ashley:
Let’s welcome Charlie, to the show. Charlie, thank you for joining us today. Can you tell everyone a little bit about yourself and where you live and what you’re doing in real estate?

Charlie:
Yeah, absolutely. I’ll start with where I grew up was Northern Virginia, Fairfax County. Where I am now is Lexington, Kentucky. I figured it’d be cool to just step through the major milestones I’ve had in my life, they brought me to where I am today. Starting in Northern Virginia, I had my first job when I was 16, crushing it making $7 an hour.

Felipe:
We’ve all been there.

Ashley:
Those are the glory days, huh?

Felipe:
Those are the good ones.

Charlie:
I remember calculating, if work a full day I’ll have $52 and stuff like that. Then from there got into college when I was 18, [inaudible 00:02:48] University, when I was 19, they kicked me out. I had to work extremely hard just for the opportunity to reapply and get back in, which I did. From there, I got hyper involved on campus to make sure I could succeed and have the support groups and everything help me out. Finished joining a fraternity, Phi Sigma Kappa, I was a campus tour guide, which was the best job I’ll ever have ever, including real estate, sorry. Then I finished with double major in computer science and psychology.
Now, I’m at 23, the most fun age, then at 24, I was forced to buy the best deal I’ll ever get in real estate.

Ashley:
You don’t hear that often, forced to buy your best deal.

Charlie:
Yeah. Definitely did not appreciate it at the time. But from there, at 27, I met the woman of my dreams, which brought me to Lexington and she actually ended up being the catalyst to get me involved in real estate. On our second date, she let me know she was leaving me to move to Cleveland. From there we had to navigate a longterm relationship. Then what got me into real estate was she moved from Cleveland and then to Lexington, we needed to close the distance. I also had to move, so I had to figure out how to rent a house, which I had no idea how to do.
That brings me to 28, which started my real estate investing education. Then I bought my first dedicated rental at 29, and that brings us to today at 30, where I have five single family homes and very hungry for more.

Ashley:
Congratulations, that’s great to have five. In two years, you got five of them, then?

Charlie:
Well, the first one was in 2015, but over the past 12 months or so, May of 2019 is when I bought my first rental in Lexington, and from there it’s been one, two, three, four.

Ashley:
Yeah, and keep adding on after that, right?

Charlie:
Mm-hmm (affirmative).

Ashley:
That’s awesome.

Felipe:
Charlie, what happened? What did you find, were you… What is the secret sauce there that you went from one and then you just added three or four more? You must’ve found a secret sauce, right? You read the right book. Someone gave you a bunch of money, right? Is that what it was?

Charlie:
A little column A, a little column B. Definitely, on the education side, I dived in 100%. I listened to every podcast. I started reading real estate specific books. But before that, I read a lot of books to help me with my current day job, like the Dale Carnegie, How To Win Friends Influence People. Has been huge influence on me. There’s another great one called The Lean Startup, which was a great one of those mind shift kind of books where it focuses on you don’t have to be perfect, it just has to work. You learn from your mistakes and you just move on incrementally.
From an education side, did everything. On the money side, I guess, going back to that first deal and why I didn’t appreciate it at the time is I could not afford it. The principal, insurance, taxes, interest, HOA fees, utilities were going be $1,800 a month. As a new college graduate, my take home was $2,500 a month and that’s a terrible equation. So, I had to figure out how to reduce my expenses, be frugal, and then on the other side, how do I get more income?
The reducing expenses, very proud of the fact that I set a food budget for $5 a day and did it. Would not recommend it. If you don’t have to do it-

Ashley:
[inaudible 00:06:22] bring the noodles every day?

Felipe:
What did you eat for $5 a day?

Charlie:
There’s a great site called Budget Bytes, and-

Ashley:
I love that. I follow them on Instagram. Yeah.

Charlie:
They’re so good. She’s so great. She breaks down the cost per ingredient for each thing. It’s a lot of pasta, a lot of casseroles, a lot of rice, you get your protein, it’s on sale, but it’s doable. It’s very doable.

Ashley:
Yeah, the Dave Ramsey beans and rice.

Charlie:
Right.

Ashley:
Okay. Now, that you’ve gotten this first deal, you said that your girlfriend got you into really getting started as a real estate investor. What did that look like? What did you do for your research?

Charlie:
Right. I was 28 then, I knew I needed to keep the house, because by then I realized the benefit. It’s appreciating, you get increased salary every year, a little bit, a little bit, but that mortgage does not change, that stays the same. I knew I wanted to keep it. As part of affording it in the beginning, I rented out the second bedroom to a friend of mine and then later his girlfriend and then the 80 pound dog that she brought.
I had a little bit experienced self-managing from that, which made me realize I was terrible at it and I don’t want to do it. From there… The other problem I needed to solve then was it was my dad’s old house, he held that as a longterm rental from the ’80s and was very much like, we’ll just bandaid that. There’s like four different kinds of floors around the house that needed to be updated.
Just reading and going along, I knew, okay, to get the best rents, I needed to update the place. How do I do a renovation? Bought J. Scott’s books and went through those and started going through there. Then at the same time, I knew I would be a terrible manager, especially out of state for the property. So, started going through and looking through how do I hire a property manager?
I’ve built this ridiculous, it’s like 50 plus questions on a Google form that I started sending out to different property managers in the area. I definitely would feel bad about sending that out today, but it helped me find the one that took the time… I’m sure she saw and was like, “This guy’s ridiculous.” But she took the time to do it, and she’s been a fantastic property manager.

Ashley:
Yeah, the fact that she took that initiative to go through your interview process, where, I’m sure they get a lot of people that call and ask those same questions. Really, for me, I would rather someone just send me the Google form and I could fill it out anyways, than going through a conversation and really have to thinking about those answers on the spot. But yeah, that’s very interesting that you did that.
Looking back now, what would you recommend to someone who’s maybe looking to buy their first property out of college and house hack it like you did? That wasn’t really intentional for you to start with when you first purchased it, correct? You weren’t looking to house hack it?

Charlie:
Right. It was out of necessity I had to do it.

Ashley:
What advice would you give someone who is out of college and wants to go that route to get started?

Charlie:
You start small, definitely start small. This first house for me, it was a 784 square foot, two bedroom, one bath condo. You just have a lot less house to worry about. Start small is definitely the first thing. You also have smaller mortgage to worry about for the most part and hence less expenses on utilities. I think that just gives you a lot of leeway to make a lot of mistakes, which I definitely did. Even if you’re looking to do the value add renovations, smaller house, it means less renovations. Instead of having to do 3000 square feet on a 1500 square foot, each side duplex, if you just buy a small condo, you’re replacing the floors and 700 square feet instead of a huge kitchen or two kitchens, you just have one.

Felipe:
That’s interesting, Charlie, and I want to button a little bit here, because earlier you had said that you now have more rentals closer to five, but how are you funding these deals? Because everyone’s going to want to know how you funded all these deals, because everyone seems to get stuck at one or two.

Charlie:
I have used, I think almost every money method out there. The first one was, I bought it for my dad. He did a quitclaim deed and then did a cash out refinance mortgage. That was my first foray into learning. What in the world is a mortgage, and how does that whole process work? The second one was using a line of credit on the first property. Over the five years I owned it, it appreciated, took out a line of credit and then used that to put in cash offers on small houses in the area.
I used that line of credit to purchase using cash. Then I did another cash out refi, got all my money back. The next one I did, it was really cheap, used the same line of credit again, after the refi, then a refied that into a construction loan. Then the fourth one I used hard money and then refi that into a 30 year fixed. It was a living flip. Then the last one I did was just a straight commercial construction run. I’m trying to go through and check all the boxes for the financing.

Ashley:
Yeah, that definitely is a mix. Let’s talk about-

Felipe:
He doesn’t want to miss any of the loan structures that you can do. I don’t want to run over the line of credit method because I’m a big advocate of that, of putting a line of credit on a rental property or that’s got enough equity to be able to use it as cash offers on the next property and then refinancing that property. This is the reason I’m such a big advocate, last night, I was also looking at my properties and some of the best deals that I’ve gotten has been when we offer cash.
Let’s say that you can get $10,000 off of a purchase price. Because you’re offering cash, that’s automatic $10,000 in your pocket because you know you’re going to refinance later, pay off the line of credit and then do it again. But my question to you is interesting, Charlie, because you said you refied and then you got a construction loan. Can you dig into that a little?

Charlie:
Yes. I love construction loans. I think they’re amazing. The reason I did the construction loan was out of necessity, I did not have enough cash or line of credit to finish this renovation. This house is what I lovingly refer to as the pit. When I bought it, it had no foundation, no sub floors. It was held up by a few wood beams. It needed everything and I couldn’t afford it. I couldn’t afford the renovation. I was able to buy it for cash because it was extremely cheap, but the renovation ended up being a six figure renovation.

Felipe:
Wow.

Charlie:
What I ended up doing, which I learned from a friend of mine is like, oh, just get a construction loan. Reached out to the bank, I refinanced the first rental in Lexington with, [inaudible 00:13:32] about a dozen banks, but they had the best terms and everything. Essentially, what they said they’ll do is they will finance 80% of your purchase plus renovation costs.
A gray area I figured out is for my bank, anyways, I didn’t get to tell them what my renovation costs are. If I think my renovation costs are going to be $25,000, I might just tell them it’s going to be $40,000. As long as the maths still work out on their end, it allows me to finance that little bit more. But it all comes down to that purchase price renovations.
One of the biggest benefits I think of the construction loan is they do an as is and a subject to appraisal. I did it a little backwards where I closed and then did the construction loan, but the current property I’m working on now, I just straight up to the construction loan. The advantage of that subject to appraisal comes in is, in this case, before I close on a property, I have my appraisal. I know exactly what it’s going to appraise that after to give me that confidence to back my numbers up and go into the deal and then go with it.

Ashley:
That’s very interesting. I’ve never done a construction loan before. Felipe, have you?

Felipe:
I haven’t, but I’m interested. I’m excited to hear more about that.

Ashley:
Okay. I want to touch on something first, how you seem to, when you need something, you reach out to multiple people. You just don’t reach out to one bank, you don’t reach out to one property manager. Is this a common theme, even with your contractors too?

Charlie:
Absolutely. Yeah.

Ashley:
Then with the construction loan, do you have to prove and show who your contractors are? I did a construction loan for my house for myself, but that was very different than doing it for an investment property. It was a build, and there was no existing value to it at all. But do you have to… Because when we did it, we had to show who our contractor would be, it had to be approved by the bank. Did you have to go through any kind of process like that, or could you have done all the work yourself and not even be a licensed contractor?

Charlie:
That’s definitely something I asked all the banks I reached out to. Every bank is different. The one I went with made the process very easy. I know there’s those… I forget, I think it’s one of those VA loan products where it’s a total pain in the butt, because you have to go through all these things you just said, you have to verify the contractors, you have to verify the work, then you have to pay them, and they reimburse it.
The bank I ended up going with were very flexible. They just said, “Send us your budget, line item by line item, and you do what you got to do. If you’re going to do the work, you do it.” You figure out hiring the contractors, they have no interest in that. They just want it to show, here’s the budget, does it work with our numbers? You’re taking the risk, you go for it.
But it was a very simple process. Then to do the draws, they charge a fee… For my bank it’s 75 bucks. I’ll say, “Hey Amy… ” It’s my loan officer. It’s like, “Hey Amy, I finished the kitchen and both the bathrooms and the floors. I want to draw for $12,000. Can you come out and check it out?” They do that, they have their checklist to go check, check, check, and then they approve it and then transfer the money in.

Ashley:
I think it’s amazing how many different options there are for different banks. It’s not just this criteria and every bank has the same thing, there’s so many banks out there that are flexible and have different products. I love that you reached out to so many banks for these different types of loans. Just look at how many different creative ways of financing you have on your properties.
The one I want to go back to, because I’m still thinking about it, is when you mentioned your dad purchased your first property and then did a quitclaim deed to you and you did a cash out refinance. Then you paid him for the property. Can you explain that process and explain to everyone what a quitclaim deed is too?

Charlie:
Yes. My understanding, it’s been a little while and I’ve only done one, but my understanding of a quitclaim deed is you just say it, this is not my property anymore when you sign the dotted line.

Ashley:
There’s no survey, there’s no really title search sometimes, and you just sign it over to someone sometimes for a dollar.

Charlie:
Yeah. If you bought a car, you have the title, you just sign on there, it’s what it’s like.

Ashley:
Then how did that work with your dad? You had said before, you were forced. Did your dad force you to buy this property then?

Charlie:
Yeah. He let me know, it’s like, “Hey, when you graduate college, this is the plan.” He understood at the time that I was getting it at a discount, which I did not appreciate it at the time at all. Now, it’s very much appreciated. He just wanted enough cash from the deal to pay off the mortgage of the house he was living in with my mom. That was his goal. He didn’t want to manage it as a rental anymore, because he was self-managing that whole 30 plus year period. He didn’t want to do that anymore. He didn’t want to worry about his mortgage, where him and my mom were anymore, and he wanted to help me as I launched into my professional career.

Felipe:
Charlie, I want to dig into earlier, you said something funny, you said the pit. I’m assuming that’s what we’re going to talk about in the rookie deal today. Is that the one we’re going to talk about? Is that the pit? Because I want to hear about that one.

Charlie:
It’s too much fun not to talk about.

Felipe:
Let’s do it. Let’s do it. Tell us about the pit, tell us from start to finish and once you’re done, what we’ll do is we’ll dig into more of the story, but give us everything, the nuts and bolts, tell us how it happened.

Charlie:
Buckle up. All right. I found the deal from a couple of agent friends of mine who were also investors. They bought it as a flip. They wanted to get out of it because they were buying an apartment building. I was like, “Okay, let’s check it out.” On the walkthrough, I knew they had gutted it and done a lot of work on it from talking to them before, but I didn’t really understand just how much they’d done. The house was built in 1900. If you guys have worked in old houses, once you peel back those layers, there’s a lot that comes to light.
They peeled back every layer to the ground. When I walked in there, we walked in, floor in the beginning is there. Going after a few feet, it just goes away. There’s no foundation, there’s no footers. There’s no framing, nothing. The house was propped up by three beams. My buddy was like, “Yeah, we did some work on it.” He pushed against the exterior wall and it flapped like a piece of paper.

Felipe:
Oh my goodness.

Charlie:
And we’re inside the house. But wait, there’s more. Then we go to the backyard and there’s yards and yards of dirt back there. They had to dig out a sub floor because over all the time the sub floor just filled out. These guys had to dig out by hand all that dirt and put in the backyard. As we’re going to the backyard, one of the neighbors comes out and she’s like, “Are you guys going to finish this house? What’s going on? You got to watch out for those neighbors.” Turns out the other neighbors were into some illicit activities and breaking into the property to do illicit activities and all this other stuff. There’s a lot more to unpack with those guys, but that’s where it started.
At the time, I was like, “Oh, this is fantastic. I want to jump into this. Let’s do it.”

Felipe:
Tell us what happened next with that? Did you end up buying the property? Walk us through what happens next? Tell us the good stuff.

Charlie:
Yeah. From there, negotiation, they wanted 45, I said 40, we met in the middle. So, for 42,500 was the purchase price. From there, I started to freak out because I was really excited. I was really excited to jump into this. I knew it was going to be tough. I knew it was going to be a huge learning experience, but I was ready to go. From there, I needed to find contractors. I reached out to probably a dozen general contractors, none of them panned out.
I called one and they said, “Yeah, it’ll probably be about $200,000 to fix up the house.” For perspective, this is a 880 square foot, one floor, and the subject to appraisal came out at 137. I was like, “It’s probably not going to work.” But from there, the people I actually bought it from, those two agent investors, they hooked me up with their whole network of contractors, which was fantastic because they’ve been very active for years and years and years. They’ve done a lot of flips before they’ve done renovations of apartment complexes and all this great stuff, and they handed me this golden notebook of the best, most reasonable contractors in town.
From there it was using that list. I still had to call a lot of other people because some things didn’t work out. I had to try and save money where I could. The dry wallers, I called five. For the floors, I called a bunch of guys. For the granites, I called like six or seven places. I used the referrals, but still made sure to do my due diligence and trying to expand my network too. I found a few good contractors there as well.

Ashley:
Now, did they offer these resources to you or did you ask?

Charlie:
I definitely asked.

Ashley:
I think that’s a great tip right there is ask the sellers, especially if they’re an investor themselves, ask who they use, and did they have a lot of other properties in the area too, then?

Charlie:
They’ve cut back a lot. I know they have a four unit, they have a 12 unit and I think they bought a 30 plus unit-

Ashley:
But they have experience, right?

Charlie:
Right.

Ashley:
That’s the thing. You’re buying from someone that has experience doing this, why not try and tap into their network and use some of those people? Let’s talk about, okay, you’ve got the property under contract now. How did it go hiring those contractors? Do you have a system in place for hiring contractors? Do you use any kind of software to manage them? Do you have contract, scope of works? Let’s talk about that.

Charlie:
It was definitely a work in progress. I love using Google Docs. It’s just so easy, and who doesn’t use spreadsheets? To build that statement of work for this place… I think one thing I learned on this is you don’t have to do everything. You’re not going to have your complete scope of work at the start, even on a really simple project. Things come up, things change, you need to adjust. For this project, I had a very immediate need to build a foundation and lower the house back down. That’s all I cared about at the time. That’s where I started.
For that one, I just had to get it done. I just met the contractor they referred me too, he gave me a quote, it was extremely reasonable. I was like, let’s just go for it, let’s do it. Looked out because he turned out to be an absolutely incredible contractor and I’ve used him on every deal since then. But for that, it was just a referral from an experienced investor. I met him to fulfill this most immediate need and then just went from there.

Felipe:
Charlie, you got it under contract, you got the first steps going on. Did you talk about how you financed this deal?

Charlie:
Yes, this one, the purchase was through the line of credit and then-

Felipe:
This was the one with the line of credit. Got it. Okay. I’m following. Awesome, okay. Obviously, everything went super smooth. You made no mistakes. It was easy to do it. You finished it, you didn’t even get out of bed after… It was easy, there was no complaints?

Charlie:
No, this project almost broke me.

Felipe:
There we go.

Ashley:
How long did this project take?

Charlie:
It actually just finished. I bought this September of 2019 and it launched as an Airbnb two weeks ago. It’s almost nine months.

Felipe:
Charlie, talk about some of the mistakes that you have… I don’t want to call it mistakes, but some of the learning lessons-

Charlie:
Oh, it was mistakes.

Felipe:
Let’s call them learning lessons that you went through while doing this big project.

Charlie:
I looked down on the first contractor, he turned out to be amazing and he is a general contractor. He can do it all and has a network of subs he uses, which are all really great. But to save money, I tried to sub some things out on my own. Where things went bad, where… I’d say half was contractors and half was me learning how to do an extensive renovation like that. I’ll start with some of the mistakes I made.
One of the things I needed to do was the rough ins for the plumbing and the electric. I called a bunch of plumbers. It was extremely difficult to find one. I got one and he came out and did the rough in, it was just very messy. Not the greatest job, left a very messy job site, and it was the same story with electrician. He came out, it took like a week for him to like, “Oh yeah, I’ll come out this week.” Then it was three weeks later it was like, “It still isn’t done.”
They didn’t do the best work, but for me, the lessons learned there were write stuff down for these guys. I just had text message deals saying like, “Oh yeah, I’ll do it for this.” Not very good. I didn’t follow up daily, like when they said I’ll do it on Tuesday, now I’ll call on Monday and Sunday and say, “Are you still good for Tuesday. Are you still good for Tuesday?” Just real quick, 30 second conversations or just a text to confirm everything’s good. If things aren’t going well, adjusting away from them, just cutting ties, which I didn’t do. I went through the whole pain those guys go through.

Felipe:
Charlie, it’s interesting because if you know my story on the OG BiggerPockets Show episode 329, I talk about how I worked on the construction site, but all I did was clean. I never learned to trade. I wasn’t really good at a bunch of stuff, but I do remember talking to the builders and I would ask them, you clean this property a lot. You spent a lot of money on cleaning it.
I won’t forget what he said. He was like, “The reason we clean it so much isn’t necessarily because the buyers are going to come look, it’s more because the contractors that are there, see a clean place, they’re going to make clean work.” It made sense because they weren’t just throwing their food around or throwing their bottles around. When they saw a clean place, they didn’t want to be the one to drop the Coke bottle or whatever.
Then the same thing with their work, they were being just more diligent. I think that plays into some of what you were talking about of, making sure that the site is clean, it’s just really important, especially during constructions and things like that.
Another thing that you said was one of the lessons you just said you learned was the followup call, I think are very important. Call them two or three nights before, just double, triple checking, be the squeaky wheel just to make sure that they get it. Because contractors have two or three jobs going at one time and it’s not like they’re overpricing one or the other, it’s just, who’s going to be the squeaky wheel to call them and keep them accountable for what they said? That’s really interesting lessons that you learned. What about financial lessons that you learned during this build? Was there any there?

Charlie:
Oh, yeah, my budget is a joke. Looking back on it, it’s laughable. I didn’t budget any line item for unknowns, just none. Huge renovation, I had nothing for unknowns. Another thing I looked back on and I think what in the world was I thinking? I had no budget to finish the bathrooms, just none.

Ashley:
Are you talking like the toilet, the flooring, the vanity, all of that?

Charlie:
Yeah, just, don’t worry about it.

Ashley:
No bathroom line item.

Felipe:
I got a four bedroom house, no bathroom.

Charlie:
Yeah. It’s laughable now, but now it gave me a lot of perspective and I had to do everything. It was almost more difficult than building a spec house or brand new house. But yeah. The other thing that was really great to learn about was since I had nothing about those unknowns was how to work through them? At the beginning of my investing career, I would get very frustrated at myself and my contractors, which was not the right way to do things, but I was like, “How did I not see this? I feel so dumb.” Or getting the contractor, why didn’t they tell me this was going to happen? They should know all these things.
But I had a mindset shift later on that was okay, this is the problem, this is what I’m getting paid to do as an investor. We don’t make those big paychecks because things are easy. If it was easy, someone else would od it. We get paid because it’s difficult, and we solve problems. Just taking a step back, relaxing, treating it as a learning experience and then fixing it, learning how to fix it and then move on from there.

Ashley:
You talked a little bit about why didn’t the contractor tell you to do this or something like that. What about the code for the building? Was there anything, any mistakes made there that you didn’t know that wasn’t up to code or that you needed to do that?

Charlie:
Yes. I learned a lot about fire codes. These houses were built in 1900, they’re extremely old. The one neighbor on the left side, it’s 12 inches or 18 inches between the houses, it’s ridiculous. I really don’t know how the guys got in there to do the siding, but they did. My painter couldn’t get back there. There’s this one thin bare spot, but the houses are very close together.
What I learned when they came to do the framing inspection was you need a firewall if the properties are that close together. You have to have a one hour rated firewall, which means if there’s a bonfire next to your house, it has to take an hour for it to burn through that drywall. I’m going along, I’m trying to do everything I can. I put all the siding up, it costs a lot. It’s like $7,000 for the labor and material for the siding. Then they come up for the inspection, they go, “You were supposed to put five eighths inch drywall on the outside of the house where you put the siding for.
I’m panicking, I don’t know what to do. This is going to cost me all this money to redo it. But it turns out you can go on the inside between the studs, you can put that five eighths inch drywall, which if you’ve seen the studs of a house, it’s 16 inches, the stud all the way around. I had to pay guys to get the dry wall and then cut every piece and fit everything. That was a $2,000 mistake. They had to do all that, and then do the fire proof caulking and stuff. It was a kick to the gut.

Ashley:
How much did the renovation end up costing and how was that different than what you thought it was going to cost?

Charlie:
My initial budget I sent to the bank for the construction loan was $77,000. At the end of the day, it was $105,000.

Ashley:
Did you say before the ARV was 137?

Charlie:
Yeah. I failed on this one. The ARV was 137 and I’m all in for 150. One of the good things about being so bad at a renovation is it took so long, is that the neighborhood continued to move up and up and up. It’s in a up-and-coming area, and where I was on the street across from me, there was like five flips going on at once. Then as this was going on, that house, two doors down was bought as a flip and they’re working on that. As time went on, I got better and better comps. It was 137 almost a year ago, I’m sure I might be breakeven now, but then my original strategy was to flip it, but that didn’t work. I had to adjust from there and said, can I make it a longterm rental?
It would have rented for 900 a month. I saw that’s not going to work. I went to my last exit strategy, which was an Airbnb. Time turns a bad deal into a good deal. That’s my hope for this one.

Felipe:
Yeah, that’s good, because we talk a lot about, jump in, get started, do something, take action. Don’t get stuck because time is either working for you or against you. Clearly, it sounds like even when time… Time is going to allow your property to appreciate in value. The quicker you get started, the quicker you’re growing that equity, especially even if you’re making the mistakes that you just talked about, not having the bath budget, with the firewalls and so forth and so on, equity in the property is still growing because others around you are also growing their property.
It’s a great testimony to get started, even if you’re going to make some mistakes, that’s okay because you’re going to learn from them and your property is still going to grow in value, and that’s very, very important. I think that’s awesome.
Now, the things that you learned from this property is that things that you’re now adjusting in new deals, in new things? What lessons would you say that you’ve learned and mistakes and what are you doing different now?

Charlie:
I think the current property I’m working on is a perfect example of applying all the lessons learned from my previous mistakes. Just knowing how much things cost now from having to go through, literally every item you can go through, every component of building a house, it’s pretty… I have a really much better idea of what things are going to cost.
I know how to add a line for a bathroom now. Then accounting for those unknowns. My current project, there’s a number of unknowns. It’s one of those 1.4 stories. The second story is a really small, those angled roofs and everything. When I toured the property, it felt fine. When it went back after closing, I said, oh man, it is 95 degrees up here, but it turns out there is no insulation in the roof, or the ceiling needs to… There’s no insulation there.
I had to figure that out. I had to get a mini split, which I’d never done before. In the guest bathroom, there was an old surround that the workers broke, they put a hole in it. I said, okay, well, I’ve got to get a new surround. When they took it off, it turned out the board behind it was completely rotten, and then the rough in valve was broken. It was just broken. But I think the big thing is my mindset. I go over there. I see those things down. I just go, okay, I know how to fix this now. I know this isn’t being of the world. I budgeted for this. I didn’t know about it before, but this isn’t going to kill me. This isn’t going to make me upset. I can learn from here and just keep going with the project.

Ashley:
You didn’t let that stop you. You said it yourself that this wasn’t really a winner for you. You went over budget, but you’re still going. You have another deal already, and that’s great. I love it that you’re taking it as a lesson learned. You’ve told us a million things that you’ve learned and your using for your next project and going forward, and then you’re just more of a powerhouse now.
Let’s talk about the money available to you when you started this project. Because I think a fear for some people is running out of money. If you do go over budget, what happens then? Where do you get the money from? Do you have a certain amount of reserves or money left on your line of credit that is there when you do these projects, just in case you do go over?

Charlie:
It’s a good question. I was listening to a podcast yesterday, when you guys talked about your reserves and I was in the car, I was thinking, I was like, “Oh man, I hope they don’t ask me this, because I don’t have any.” But what I did leading up to this project, I knew it was going to be a lot. I still have my W-2 job, I still work full time every day, which essentially up to a point is like a blank check for financing. It is so easy to open more and more lines of credit.
I just did everything I could. I had my original Annette credit from first house that has a cash flowing rental. I had my first one in Lexington, which was a really small one cash flowing. I looked at my credit cards, which I would not recommend doing credit cards, but I just wanted to know it was available. I called my bank and I said, “Can I increase the line of credit to my credit card for a cash advance?” They said, “How much would you like?” I said, “What’s the most you can do, just do the max.” I did those, and then I got a checking line of credit, which is another thing I didn’t know existed. You just ask, what can I do? I know there’s personal lines of credit, which I haven’t done yet, I’m still looking into.
From my live in flip, I did, I found a bank, another bank that’ll do 100% loan to value, second position line of credit, which is amazing. That just closed last Friday. I’m using essentially all of that to fund this current deal. Like Home Depot, credit card, Lowe’s credit card, they have 0% interest over all these time periods. They send you emails all the time, which is fantastic until that promo period runs out, you have to pay it and then you figure it out from there. But in short, I just opened and explored every possible line of credit I could get.
Then on the other side, just keep my expenses low, cash flowing from my job, making sure I’m saving more and more each month.

Ashley:
You’re not only getting creative financing for the purchase and the refinance, but even how you’re doing the rehabs, and actually I just started doing 0% credit cards. I have one now for 18 months, 0%, and that’s how we’re buying all of the materials for the project. That’s just leaving more money available to us on our line of credit. I hope this does not happen, but if for some reason, 18 months comes up, we are still in rehab and have it refinanced, I can use my line of credit to pay that off instead of paying the 23% interest rate on the credit card. But yeah, I’ve just started learning about different ways to pay for that rehab without paying cash, I guess.

Charlie:
Right. For those promo periods, you have six months, 12 months, 18 months for using it for an investment property, just bank your cashflow. If you bank your cashflow for 18 months, no problem, if you’ve got a good deal.

Ashley:
Yeah.

Felipe:
I love what you were saying, Charlie, about using your line of credits, using your credit cards as leverage, making sure you have longterm debt for those so that you can finish a project without the… There’s a headache almost. It’s like, oh my gosh, I got to pay premiums on that, and I got to pay extra interest on this. But if you have those credit cards that allow you to, 18 months worth of no interest, then it’s great. But with the line of credit that I use, I love what you said earlier about the process of refinancing, pay it off, do it again. Refinance, use it again, over…
That’s how you use the same “$100” over and over and over again. You’re building a massive portfolio with that same line of credit over and over and over again. Charlie, what’s next down the pipeline for you? What does it look like going forward?

Charlie:
Still looking for deals. I went to see a house, man, when I rolled up to this place, I was like, oh, this is going to be the pit all over again. You could roll a square down this house. That’s how wonky the foundation was. All my list of things to do today is to put an offer on that. Just looking for single family homes, I’d like to get into larger and larger homes. I think there’s a lot of interest in my area for those three twos, two ones, two twos, 800 to 1200 square foot houses under $200,000. It’s extremely competitive.
I think once you get over that hump, over that larger price point, there’s a lot more money to be made there. That’s what I’d like to do. I also need to do a flip, to just get some more cash in my pocket so I can keep going. That’s one thing I haven’t done yet is actually sell one. Looking for the next deal, the next rental, the next thing that’s going to push me out of my comfort zone to learn more from.

Ashley:
I’m really excited, just listening to you talk and some people will be listening to this and can’t see your facial expressions, but I can just tell you’re just like, “I’m going to do it. There’s no but about it. This is what’s going to happen. This is my plan and this is where I’m going.” It’ll be awesome to see how your next deal goes, especially a flip to that. Hopefully has a bathroom in it.

Charlie:
Yeah. It’s too much work. It’s too much to learn to quit after one. You got to keep… I did so much, I’m going to keep using it.

Ashley:
You learned all this information. You’ve got to put it to use. Let’s move on to our next segment. This is where we want to learn about someone who is a key player in your investment business, who has really helped you grow your real estate portfolio? We call this segment the…

Felipe:
MVP.

Charlie:
MVP.

Ashley:
Who is the most valuable player to you right now in your real estate business?

Charlie:
It’s my friend, Dane. He’s awesome. When I moved to Kentucky in January of 2019, I joined a local closed real estate investors Facebook group, which is fantastic. I think there’s a lot of groups out there that are just spammy and salesy. This is people helping people, which is great. I wanted to get involved and meet people, follow the advice from these great podcasts and throw myself out there.
I put on a post, I said, “Hey, I’m new to the area, I’d love to put together statements that work for you so you don’t have to. Here’s what I did before. I just want to go on the walkthrough, pick your brain, learn from you, take this tedious task off your plate so you can hand these detailed statements of work to your contractors.”
None of that panned out. But my friend, Dane, called me and just wanted to talk about real estate. When he asked to meet up, I told my girlfriend, I said, “Hannah, I think we might have to buy a timeshare or something after this. I don’t know what’s going on.” But he’s just a super nice genuine guy. We just both love talking about real estate. He actually retired at 28, full-time, self-managing some properties. He’s extremely smart in that regards.
From there he just checked up every couple of weeks. He just said, “Hey, Charlie, how’s it going? You found any good deals and places you want to go look at? Anything you’re excited to talk about?” From there we just started be friends, hanging out more and more. Actually through him, I met all my other MVPs, the parts of your team.
He introduced me to the two agents and investors who sold me the pit, which that wasn’t a good deal, but it kind of was, because it helped me so much in my career and introduced me to them, their whole network of contractors. Then he introduced me to the wholesaler that sold me the live in flip I’m in now, which has turned out to be a fantastic deal. He just really opened the door for me in Lexington. He’s just a great friend too.

Felipe:
Sometimes that first deal going back to pit for a little bit, but sometimes that first deal isn’t about the money. Maybe sometimes that first deal is more about the lessons learned that you’re going to carry throughout your real estate career. If you can make it past maybe those first lessons and learn from them and apply them to your real estate investing, that’s usually what makes the difference between successful investors and those who quit.
Because many times I hear people that are five, six, seven, 10 units in, and they’re like that first one, wasn’t a home run for me. That first one is all lessons. We don’t want to call them mistakes or money mistakes, but that’s what they are. Then we take those, but we learn from them and we make them into actionable, applicable steps going forward to where now you’re not going to make those mistakes, and now those lessons learned are actually making you money, because now you’re more advanced in your career of investing in real estate. Now, you know to budget for a bathroom. Now, you know what it costs to do flooring.
Those, we should rename them, not mistakes, but lessons learned. I think that sometimes goes back to maybe what we learned in school where mistakes are bad, but in real estate mistakes, if you take them the right way, then they’re lessons learned and they will make you money because you’re not going to make those mistakes again. Now, regarding your NVP, what kind of value add did you add to him and how did that relationship become genuine?

Charlie:
Honestly, I really don’t know what he saw in me in the beginning. He’s just a really outgoing, nice guy. I think he might’ve just felt like, “I think this guy might be hard to hang out with.” He recently retired. He’s just had time on his hands to take me on as a pet project. But it was really just him following up, how’s it going? You want to talk or anything?” We just talk and talk and talk.
I think what’s worked out now is that we’ve both moved on in our investing careers is now I’m at a point because my friends helped me so much that I’m going out on my own to learn new things, meeting new contractors, learning about new creative ways to finance and find deals. That’s this really great free exchange of, oh, here’s what I’m excited about, here’s what I’m learning about now. We’ll just go back and forth on, oh, I think that’s great. I think that’ll work. Or, no, I think that’s really dumb. That’s not going to work.
It’s that whole mentor-mentee thing. I think it’s just like dating. You’ve got to take a chance to meet people or just talk, see if you guys just get along as people before the whole investor thing comes into play and just go from there.

Ashley:
I’m sure that he also noticed when you first posted in that Facebook group that you weren’t just asking for help, that you were willing to give someone else help in return. I’m sure that made a big impact on, okay, this guy is just not looking to leech off someone to figure out what to do and get all their help. He’s willing to give in return.
I think that’s how a lot of mentees and mentors get started. We had someone on here, Felipe, maybe you remember who would fly out to their mentor when they had a question or something, they would fly to them to do it in person and take that initiative instead of constantly calling them or stuff like that. But I think it’s great that you guys have become friends and are continuing to build that, mentor, mentee relationship. Is there one little tiny piece of advice, quick, before we move on to the next segment that you could tell someone one little thing how they could find a mentor like that or what would be your recommendation?

Charlie:
Yes. You got to find that thing that the people don’t like to do. For me, which I know it’s talking a lot about real estate nobody’s trying to hear, it’s we all hate doing it. It’s finding good contractors. That’s that golden goose, that golden egg of, if you can find this great contractor, you’re going to make it. But the process to do that is a total pain in the butt. You have to call a ton of people and ask them all these questions.
If I had to go back again… I did things backwards. I bought a hole in the ground and then figured it out from there. But going back, it’s really free to find those contractors. You have to make a lot of phone calls and ask a lot of questions, but once you go through that process, you’ll have a really good idea of what’s going on.
If you’re brand new and want to find a mentor or someone to work with, one thing I don’t like to do is find these contractors, it’s tedious, takes a long time. If you want to take on that role and say, “Hey, IM Charlie or someone else, I know you might not like to do this, I’d love to call all these contractors.” I put a list of 12 electricians together, all calling for you and schedule the walkthroughs and things to go through with them so I can… It’s zero risk for me, because I’m just calling and setting up appointments to help you manage the renovation, and that’s a huge time saver for someone that’s like, “I’m interested in looking at deals and finding more financing. I don’t want to have to find the best electrician.”
Someone that’s brand new that has time and not money or the know how yet, can just go through and it’s like, “I’m going to call every electrician, every plumber, every general contractor.” I get super nervous on the phone, but after the first one or two conversations, you get really comfortable and you start to learn the lingo.
When I was calling Banks, I said, “Hey do you have construction loans?” They’d say, “Well, what do you want to do?” I’m like, “I don’t know.”

Felipe:
I don’t know, to construct something.

Charlie:
Yeah, but that was conversations. You have one and you go, “I feel really dumb. But I learned these four things” Call the next bank, “Hey, what’s your drop period like? How does this work?” This stuff from the first conversation. If you’re brand new, calling a electrician it’s like, “How much does a switch cost? I don’t know what I want to do.” But those who are asking you questions-

Ashley:
Just doing those walkthroughs with them you’ll learn so much. I’ve been doing it with electricians, I’m having such a hard time finding an electrician right now and I’ve done five walkthroughs already. It’s amazing the stuff I know about electrical work. By the end of it, by the time I find one, I’ll be able to do it myself.

Charlie:
Yeah.

Felipe:
All right guys. Now you have it. You can learn from Ashley by finding her a great electrician.

Ashley:
Yeah.

Felipe:
It’s funny though, Charlie, because I agree with you 100%. A lot of the times mentees will, or someone looking for a mentor will say, “How can I add value to you? How can I come help you? I want to learn from you. How do I do that?” You’re just creating work for Ashley or me or someone else, you’re creating more work. Now, I got to find you something to do. But like you said, everyone hates finding contractors. Everyone hates doing the little stuff. If you want to tag along and rub elbows with your mentors, like you said, bring them a list of 12 electrician and say, “Hey, if you don’t got one, I’m going to call all of these for you, and I’ll set up a meeting for you if you want, and I’ll get you some quotes. In return, I’d love if you let me see the process of the… ” Now, you know how to find a good electrician for when you’re going to do it.
Use someone else’s experiences for you to learn as well. I think that’s perfect advice, Charlie, thanks for sharing that. To anyone that wants to find a good mentor that’s doing… If you want to find a good mentor in construction, go find that mentor and find what he hates or she hates and fix that issue for them without asking them, “What can I do for you?” Because now I’m having to look for something for you to do, and that’s not how that works.
If you can come to me with a solution to a problem you know, I have, we’re in business. I’m going to keep you on… I think that’s awesome. Charlie, let’s move on to the Rookie Request Line. Let’s take a question from our Rookie Request Line. You can reach us anytime 188-85-ROOKIE to leave a voicemail and we might use yours on the next show. Okay, are you ready? Charlie?

Charlie:
Yeah, let’s do it.

Paris:
Hello, my name is [Paris 00:54:13] I’m from Saginaw, Michigan. I’m really interested in house hacking single family residences. My biggest question though is that once I move out and replace myself with another tenant, how would you recommend handling the utilities? Should that be something that I pay, or something that the tenant handles? Thank you.

Charlie:
That was a good one. For me, I didn’t know how to do that either. I hired a property manager. It was extremely easy. I just said, “Hey, property manager, here are the utilities, can you take them over?” If you’re looking for a good property manager, a good one will say, “Absolutely, just send me some information.” Actually, I didn’t have to send them the information. They just… You know the property address, they call and they get switched over to the property management company’s name, which headache removed for me.
But then in between tenants, they would switch it back to the property management company. I’d get billed back for that time in between, which is hopefully very, very short. Then they’d handle getting them switched over to the tenant after. Definitely, definitely, definitely would recommend not including utilities in rent. It just opens the door for sucking all your cashflow out.

Ashley:
EC units in every single window.

Charlie:
Oh, yeah. Even in the house I live in now it drives my girlfriend crazy. I set the house temperature like 68 degrees, but I have a little space heater for my feet under my desk. If you’re the landlord versus a tenant, make the tenant pay for that.

Ashley:
What about when there aren’t separate meters? The first house that you had where you had your friend and girlfriend living there, did you charge them anything for utilities or did you cover utilities then?

Charlie:
For that, we just did a straight split. There’s three of us. We took it, divided by three.

Ashley:
Okay. Nice. Okay, let’s move on to our fun questions. These are random questions that we came up with a list and we keep adding to them each week or sometimes just to make up our own. I’ll take the first one. What real estate investment tool or piece of technology can you not live without? I like to throw a hard ball question here.

Charlie:
Yeah, this is good. Dude, I use my notebook every day. That’s what I do.

Ashley:
I was going to say your answer would be Google Docs or Google Spreadsheets.

Charlie:
Yeah, definitely Google Spreadsheets. That’s really it. I use Google Spreadsheet, my cell phone, which I can pull that stuff up on. Then honestly I manage the day to day, my pen and paper notebook. But I just keep it simple. I think new people try and overcomplicate things sometimes. It’s like, “Oh, I need the best property management app. I need the best CRM tool. I need all… ” If you’re starting from zero, just start with your phone and a piece of paper and spreadsheet.
As you go along, you’ll learn what these pain points are. It will be very apparent what the limitations of your current technology is, and then you can use that to really pick what’s right later on. But for me, spreadsheets work fine for now.

Felipe:
That’s awesome, Charlie. I still just same thing, Excel sheets and basically my phone. The piece of technology, I’d answer that question with my phone. But let me ask you this question. What is the one thing that you would tell our audience to do today? What’s an actionable step that you would even tell yourself right before you got started? Like, do this to get started. What’s an actionable step that our listeners can take?

Charlie:
Call an agent and go see a house. You can pick the worst agent in your area and they’ll still be able to give you MLS access and you can set an appointment to go see a house. I spent a year just in education mode, reading books, just podcasts, reading blog posts before I went to see my first house. My mind was just blown. When I saw that first house, it had termite damage, it was rundown, it needed all this work, but that was my first experience seeing what a distressed property is. I’d heard about it and everything, but never seen one.
I think just going to see that really opened me up to all right, this is what I’m getting myself into. Then from there… That’s the first step, do that today. Call an agent, you can pick the worst one in your area, go see a house. Every house you see, there’s still things I go in and see I’m like, I have no idea what that is. I have no clue how to fix it. I can barely even define the problem, but now search YouTube, how to fix this, search the blog post, how to fix this, ask my friends how to fix this. Then you start building this catalog of knowledge that you can learn and apply to the next one you see, the next one you see, the next one you see.

Ashley:
That’s a great tip. You had talked about earlier is going with other investors to look at properties, tag along. I feel like some people are worried about wasting realtor’s time, which you don’t want to do if you’re not exactly ready to buy right now, but you want to start learning more, is tag along with other investors and do just that, go see the properties, go look at the houses. That was a great tip. Okay, then the question I want to ask is what do your family members think of your real estate investing? Because I’m very curious to know, does your dad say, “I told you so?” Now?

Charlie:
Man, I think they think I’m nuts. I think in the beginning for the first house I lived in, renovated and rented out, they understood. They understood I was in a very committed, serious relationship. They understood that I wanted to keep it as a rental. I think they thought I was going to stop there, but when I started talking to them, I said, “Oh, I’m going to go buy a house for free.” My mom was like, “What are you talking about?” The whole bird method. They’re just like, “Be careful. I don’t know. I don’t know.”
For 2019, I think they were really worried because they want to make sure I don’t get in over my head and lose everything and lose my shirt and all that kind of stuff. But now that I’ve moved on and progressed and shown, I can do it, I’ve done it, I can do it, I think they’re a lot more comfortable with it now. I think they still go, “Just be careful, be careful.” But they’re much more comfortable with it now. But I think a lot of people think I’m nuts for trying to.

Felipe:
I think it’s impressive, man, because you’re learning a lot of the lessons at the beginning, and not 10, 15 years down the road, you’re still allowing yourself to mold into this real estate entrepreneur going forward. I actually think it’s great. Let me ask you my next question though. What is something in your real estate investing so far that you put a lot of effort into, but didn’t get much of a result? Then answer the opposite, what’s something that you didn’t put a lot of effort into, but got a huge return?

Charlie:
A lot of effort, no return, little effort, lot of return. Ooh, man, this is a good one.

Felipe:
I’ll let you think about it. I’ll tell you what, I’ll ask Ashley the same question, let’s make it fun.

Charlie:
Okay.

Felipe:
Ashley, you go first. What is something that you didn’t put a lot of effort into, but got a big return?

Ashley:
I would have to say, there was this guy that was selling this portfolio of properties and at the time I bought some of them, but I couldn’t afford all of them. There was one, four unit commercial property that I really wanted, but it was not a great commercial property area that I would have no idea what to put in that. Two years later, I ended up purchasing it and I had done nothing in between those two years to try to figure out how to finance it, even talk to the guy anymore.
After those two years, they actually approached me to see if I would buy it. The original asking price was 90,000 and I got it for 20,000. I waited those two years and I put no effort into trying to get him to sell to me or proving that he needs to decrease the price or trying to find money to buy it. I would have to say that.

Felipe:
That’s really good. I’ll answer the question as well. I think for me, it’s building relationships to build relationships, not to get something out of them. Those have been the relationships that have got the biggest return on. Where I’ve genuinely just wanted to make a friendship with a real estate investor, and then later we went on to making some great deals. That would be for me, not a lot of effort, just genuine effort and gotten huge returns on that.

Charlie:
I’ll cop out with a lot of effort, little return, the pit project. I put so much heart and soul and cash into that. I think on the 15th, I get my first revenue line item for that property. For nine months I’ve made absolutely nothing on that. Money-wise, that’s the one I put a lot of work in for no monetary return. On the other side, what I’ve put very little effort into that turned into a huge return is the deal I’m in right now. Going through things I love talking about real estate, I love telling people, this is my side gig. I love it, here’s what I love to do, and transform homes, this, that, and the other.
My girlfriend mentioned it to her coworkers. One of her coworkers wanted to move and she wanted to sell house and she didn’t want to deal with having to list it. She wanted to be out quick. She didn’t want to deal with any of the repairs or deferred maintenance. Hannah just said, “Oh, Charlie buys houses. He can come take a look.” Went and took a look. Asked the closing attorney for an offer sheet, talked to her on the phone, signed it, drove it over, she signed it, easy. The purchase price was 146, the as is appraisal came in at 155. Instant equity from day one.

Ashley:
Those are the perfect deals, and you don’t even have to do anything and get instant equity. Okay. For our last question, it’s a little bit of rookie hazing. Felipe will help you out on this story, but what is your guilty pleasure song, and can you sing a little bit of it for us?

Charlie:
Okay. To turn the tables, I’ve prepared… On the hazing part, I’ve prepared my three hour Gregorian chant. I’m a master at learning three words of a song and then humming the rest. But-

Ashley:
Well, let’s hear your best humming.

Charlie:
What I love, Katy Perry is so much fun. She’s my favorite halftime show ever. Her music is so great and I love her song, Firework. So you just got to ignite, the light, and let is shine, and own the night like the Fourth of July.

Ashley:
Yay.

Felipe:
Good job, Charlie. I love that.

Ashley:
That’s too much of a high note for me to hit, to pitch it.

Charlie:
You hear my voice, come on.

Ashley:
Well, thank you so much for joining us today, Charlie. Can you let everyone know where they can get in touch with you or find out some more information about you?

Charlie:
Sure. If you want to reach out with a specific question or anything, hit me up over email. The best one to use is I started a scholarship foundation a while back. I have email set up for that. I’ll just use it for this. It’s Charlie C-H-A-R-L-I-E @mu M-U, hexaton H-E-X-A-T-O-N scholarship.org. Then I started a YouTube channel called Charlie’s Pockets, where I walk through the day to day of a project.
My goal for that is to show how boring real estate really is. Most of the time if you go to a property, you look around, you say I got to fix these five things and call a contractor. I’m just trying to document more for myself really, just here are the mistakes and the unknowns that came up and here’s what I’m doing to fix them. If you want to see my current project, it’s up on Charlie’s Pockets on YouTube. I’m going to check that out today. There might be a new video tonight or tomorrow.

Ashley:
You are a real estate investor. You have a full-time job. You have a scholarship fund and you have a YouTube channel. Is there anything else going on that you need to talk about? Because I love hitting this point is that you don’t do real estate full-time, and that’s your only thing, and your only focus, you can do this with other stuff going on, and that’s a great thing.
How you just said that your videos can be boring because you’re just doing these little things, but the more passive you get, I think the better, and that does really make it more boring because you’re not doing anything, and that cashflow is just coming in. But thank you so much for joining us today. I am Ashley Kehr and he is Felipe Mejia. You can find us on Instagram, @wealthfromrentals and @felipemejiarei. Thanks for listening.

Watch the Podcast Here

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In This Episode We Cover:

  • How Charlie’s dad “forced” him to buy his best deal ever
  • What a “quitclaim deed” is
  • Starting small with a condo to avoid costly mistakes
  • Contacting 10+ banks to find the right fit
  • Using lines of credit to buy houses in cash
  • Borrowing using a construction loan
  • The lessons he learned on his first big renovation
  • Why he realized property management wasn’t for him
  • His MVP: a friend/real estate investor who retired young
  • The #1 way a rookie can bring value to a mentor
  • And SO much more!

Links from the Show

Rookie Deal

  • “The Pit”
  • Asking Price $45,000
  • Closed at $42,500
  • Planned Rehab Budget of $77,000
  • Mistakes cost at $12,300
  • Ongoing deal

Charlie’s MVPs

  • Dane Stuart, Charlie’s friend he met in an REI group

Books Mentioned in this Show:

Connect with Charlie: