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Debt Free with 2 Rentals and Counting with 24-Year-Old ICU Nurse Prescott Williams

Real Estate Rookie Podcast
36 min read
Debt Free with 2 Rentals and Counting with 24-Year-Old ICU Nurse Prescott Williams

Frontline healthcare worker… Air Force Reservist… real estate investor!

24-year-old Prescott Williams is a renaissance man committed to building real wealth through real estate while serving his community and his country. Today he walks us through his first 2 deals, and the 3 deals he’s currently working on in the Hattiesburg, Mississippi area.

Prescott shares some great shortcuts for investors who work full-time – from creating a “rental requirement list” with your personalized criteria to publicly posting your real estate goals (you never know who will send you a lead!).

A lot of our guests choose their real estate agent as their MVP, but for Prescott it’s his mortgage lender. You’ll learn how he finances his rehabs and new construction deals by partnering with a small local bank – a strategy you can model (if you’re willing to put in a little legwork!)

Give Prescott a follow on Instagram @prescott_williams — and follow us by joining our Real Estate Rookie Facebook Group: just search “Real Estate Rookie” and answer the screening questions to join 15,000 other like-minded investors.

Click here to listen on Apple Podcasts.

Listen to the Podcast Here

Read the Transcript Here

Ashley:
This is Real Estate Rookie Show number 32.

Prescott:
While she’s saying this, I’m thinking, “I know what home equity line of credit is. My parents are not going to do this. There’s no possible way that they’ll do this.” She basically talked them into it at the table, so I was able to pull out 110000 dollar home equity line of credit on my parents’ home.

Ashley:
My name is Ashley Kehr and today, we had a guest on who immediately as he got on the Zoom call, asked me about Felipe’s biceps before Felipe was even on the call.

Felipe:
If you guys don’t drop this bicep thing, we’re going to be on episode 100 and people are still going to … I literally when I work out am like self conscious about that. I’m like, “Okay, extra couple reps because Ashley’s going to bug me about it.”

Ashley:
That’s what I was thinking about. I was like, now you have to really keep up the biceps.

Felipe:
I have to, I really do. Jeez, it’s wild. Anyway, today we have Prescott on the show and probably one of the funnest episodes we’ve done in a while. Prescott’s in the military, he’s a full time nurse, he has two rental properties, soon to be four because he’s building. He talks about how he leveraged his parents’ HELOC against their house to finance deals. This guy is amazing, he’s crushing it.

Ashley:
Everyone’s going to be so annoyed as to how many times I laugh during this episode and I apologize in advance, but it was so fun. He has really good stories, but also great advice. At the end, me and Felipe were both shocked at one point he made about his cash flow, then a five minute phone call. It was just light bulb moment, that is so true. Let’s bring on our guest. Prescott, welcome to the show. We are really excited to have you here today. I heard a little bit of you and Felipe talking before we started recording, that he actually reached out to you on Instagram. Let’s talk about that little bromance first.

Prescott:
I guess you could call it a bromance. Of course, you guys are famous to me basically. Listening to BiggerPockets podcast over the past six years of my life. I told my best friend, I was like, “Felipe hit me up,” because he’s a BiggerPockets fan. He was like, “Stop lying. I don’t believe you.” I was waiting and I showed him my Instagram DM. We had one of those [inaudible 00:02:11] going crazy moments. It was pretty special to me. It’s been a couple months, but getting the chance, the opportunity to be on this show is like a dream come true.

Ashley:
Yes, we’re really excited to have you. I remember when I was a guest on the BiggerPockets OG podcast and I had that same [inaudible 00:02:29], that same shriek and squeal.

Felipe:
Ashley, I was telling Prescott, I was like, “Man, I really enjoy having real estate investors that just don’t fit the mold.” Not underdogs because that’s not what it is, but definitely just out of the box investors. I’ll let Prescott tell his story here in a second, but I know that he’s in the Air Force, he’s an ICU nurse, and he does all these things, but he also invests in real estate. As a young man investing, I think that’s really important, especially with what he’s done. Before we even do anything, Prescott, I just want to thank you first of all for your service, for what you’re doing for our country. Thank you so much. That does not go under looked, undervalued by any means, and we are actually honored to have you on the show, so I just wanted to make sure that you know that.

Prescott:
Appreciate the support, Felipe.

Felipe:
Absolutely.

Ashley:
Why don’t you get into a little bit of your background and how you got into real estate investing?

Prescott:
Okay, let’s do it. I’m currently a full time ICU nurse as Felipe was saying working with the sickest of the sick patients. I’ve been in Air Force Reserve for six years. I’m in the process of [inaudible 00:03:27] my nursing degree. I also own a nonprofit charity called Impact our Youth that focuses on giving back school supplies and scholarships to younger people. I was also a terrible real estate agent for a couple years. That’s my background as far as jobs and everything. Right now, I have two rental properties, I have one house under contract, and I’m about to start building two new constructions that I already have all the materials for.

Ashley:
That’s awesome. The first thing I thought of was, “You’re only 23 and you’ve already done all this stuff.”

Prescott:
Excuse me, I’m 24. I turned 24 two days ago, September 6th.

Ashley:
Oh, happy birthday.

Felipe:
Oh, he is so grown up. 24, look at that baby face. 24. No, I’m 24. That reminds me when I was younger and people were like, “He’s 13.” No, I’m 14 years old.

Prescott:
[inaudible 00:04:20] 23 and a half.

Felipe:
Prescott, I want to dig in a little bit about your charity if that’s okay. What interested you in that? I don’t hear a lot of people at 24 giving back to a charity, so talk a little bit about that.

Prescott:
I just remember growing up how there were so many people, of course I went to public school, and there were so many people who were disadvantaged. A lot of people just don’t realize having to ask your friend for a pencil every day in class, even that is something that can set you back. When I got older, I was like, “Man, there’s something that I want to do about this.” I came up with the idea to do a back to school supply giveaway. I was like, “It’ll just be a small giveaway or whatever,” and I ended up giving out 350 fully filled book bags the first year and after that, I was like, “Let’s just make it a nonprofit and make it official.” It turned out great, it’s been great for my city too.

Felipe:
That’s amazing, that’s really cool because I think a lot of times, people don’t see how just even having the essentials at school is really important and how that can set you up for life. I know me growing up with a single mom, I would get in trouble sometimes in school because I didn’t have all my supplies. I was just too embarrassed to say we just can’t afford them. That’s why I had to hustle my way [inaudible 00:05:33] a pencil or things like that. You know how they send you that list of paper that you need to get.

Prescott:
It’s so long every year, it’s [crosstalk 00:05:40].

Felipe:
It’s so long and it gets longer. My mom was like, “That’s 200 bucks times three kids, that’s not easy to do,” so it’d be like, “All right, Felipe. One month, you’re going to have half your list. The next month, you’re going to have the other.” By then, kids are already a month ahead because I didn’t have … Anyways, dude, I think that’s awesome, I think that’s super cool what you’re doing, but let’s get into your real estate. Give us the 30000 foot view of your portfolio. If you want to tell us a little about the deals that you’ve done, then we’ll dig into one key part of whichever one you would like.

Prescott:
Okay. The 30000 foot view of my portfolio as I was saying is the two rental properties I have. One’s in Hattiesburg, Mississippi, which is central Mississippi. It’s a 1500 square foot, three bed, two bath home. I have a Katrina cottage in Pass Christian, Mississippi, which is on the coastline. It’s a one bed, one bath home. The two new constructions will both be 1500 square feet, three bed, two baths right next to each other. Then, the property I have under contract is a probate deal that I actually got it in connection with the Katrina cottage that I bought, so that’s the 30000 foot view of what I have going in real estate at this moment.

Ashley:
What made you decide that you’d want to get into real estate? Did you have a light bulb moment? Was there a mentor or someone that had told you about it?

Prescott:
This is a great story. I took this class called Skills for Success in Financial Planning my senior year. My senior year of high school the last semester when everyone can leave school early, one of my football coaches talked me into taking this class and he had to talk me into taking it because I really didn’t want to. The first couple weeks, they were talking about investing and all these ideas that were foreign to me. One day, they started talking about generational wealth and financial freedom. They were talking about it through dividend stocks, real estate, and passive income, and I fell in love with those ideas. I remember in that class, he said, “I need you all to listen to a podcast for homework on something that you’re interested in.” That night, I went home and listened to the Real Estate Guys. I was like, “Man, I don’t really like their voices.” I hate to say this because they’re going to hear.

Felipe:
That’s the wrong podcast. This is the one-

Prescott:
The next day, I listened to the BiggerPockets Podcast. They were on like episode 12 of the OG show. I’ve listened to every episode since then.

Felipe:
Really? Wow.

Prescott:
That’s when I first got started. Through college, I would listen. I commuted, so I would listen to them on my way to college and I would listen to another real estate podcast on my way home along with reading every book I could about real estate and finances, so I was investing in real estate before I was investing in real estate for sure.

Ashley:
How many years did you listen to these before you actually took your first action?

Prescott:
My senior year of high school until when I graduated nursing school, so four years of college, I listened to every episode. This was before I had basically any extra money to my name, so I knew I wasn’t going to be able to get my feet wet, but when the time comes, I was like, “I’m going to be as prepared as I can be.”

Felipe:
That’s a really cool story. I want everyone who’s listening right now to screen shot their phone, screen shot this YouTube video, or whatever they’re doing because this is going to be a future millionaire. You have so much knowledge packed in your head, you’re just oozing real estate, and you’re ready to take action. I mean, you’ve already taken action on so many deals going forward. That’s going to be amazing. I mean, anyone and everyone who’s listening, mark this as part of their bookmark on their phone because this guy is going to be the next millionaire for sure. Prescott, I love the story. You became a nurse through college, but can you tell us really quick a little bit about your Air Force, how [inaudible 00:09:16] that? Then, I want to dig into the real estate.

Prescott:
Okay. I had a year of college already completed when I started because of AP and dual credit classes in high school. Basically, I knew that I was already a year ahead of where I needed to be in college and there was no way that I was going to be able to pay for college completely on my own with just the scholarships I had, so I was like, “Man, what could I do?” I decided that I was going to join the Air Force Reserves right before starting my first semester of college. I joined the Air Force Reserves to be an air transportation specialist loading airplanes. That way I was able to pay for my college completely without any debt, which was a huge thing for me because I’m reading all these books about finances like The Richest Man in Babylon and stuff like that.

Felipe:
Oh, that’s a really good book. I love that book.

Prescott:
The Air Force gave me the opportunity to pay for my college out of pocket without going into any debt. That really catapulted me into the future of real estate investing because I didn’t have to pay that off before I got started.

Ashley:
That fact that you even looked for opportunities as to how to go through college without taking on debt just sets you apart from so many people because it’s so easy just to take on student loans because it’s normal, everybody has student loans, and you took something that maybe wasn’t even in your comfort zone too.

Prescott:
It wasn’t.

Ashley:
I mean, not a ton of people-

Prescott:
I was the guy who always said I’d never join the military.

Ashley:
I think that’s awesome. I think that really shows your passion and dedication to creating that financial freedom that very well personal finance and setting the foundation for your future. I think that’s really cool.

Prescott:
Thank you, Ashley. It’s been great for me.

Ashley:
Yes. Let’s talk about the first deal though. How did you find it? Take us through it.

Prescott:
Okay. The first deal, I knew I was going to buy a house as soon as I graduated college because I was going to have a consistent job and decent money, which as you all know I’ve been waiting for this for like five years. I’m already super excited, so I secured a job about two months before I graduated nursing school. My dad has a relationship with a lender at a community bank, which is what I was super excited about because listening to the OG show it’s always find a community bank that does portfolio loans and that can give you a high refinance as far as the loan [inaudible 00:11:32].

Ashley:
Can you describe real quick what a portfolio loan is for everyone?

Prescott:
A portfolio loan is instead of taking out individual loans on a property, you can take out loans against your entire portfolio or even lines of credit, so it works out great. I’m thinking in the future, this is what I’ll need it for because right now I don’t have anything. I went to this lender, I was telling her my situation, I told her all my goals, which my goals are I want 100 rental units by 30 that fit into my rental requirement list and I want to have a four million dollar net worth by 30. Also, 300K in passive income. All these goals by 30. I’m telling her this and thinking that she’s going to offer a VA loan or a FHA loan, something conventional to do since I have a decent job now. She’s like, “Prescott, I’m going to tell you this in front of your parents, this is what you all should do, and this is going to change your life.” My parents are older. My mom’s 59, my dad’s 60. They have their home paid off. She said, “Your parents should pull out a home equity line of credit on their home.”
While she’s saying this, I’m thinking, “I know what home equity line of credit is. My parents are not going to do this. There’s no possible way that they’ll do this.” She basically talked them into it at the table, that they should pull out a home equity line of credit because this is going to help me accomplish my dreams so much faster because I’ll basically be able to BRRRR, buy, rehab, rent, refinance, repeat, and continually use this home equity line of credit. My parents went for it and that was amazing for me, so I was able to pull out 110000 dollar home equity line of credit on my parents’ home.

Felipe:
Let’s talk about that a little bit, Prescott, because I think that’s really important. You hear this generational wealth word tossed around a lot. You’re like, generational wealth, but what does that look like in story form? I think you just explained it without knowing. Your parents are able to now pass on their wealth through you. You will be able to pull out a home equity line of credit on your kids for them to continue your legacy. This is what generational wealth looks like. I’m always struck by when people are selling their homes in the hood, the ghetto, or whatever because gentrification is coming in instead of just pulling a line of credit or a HELOC. Don’t sell the property, pull a HELOC on it. Allow someone else to use it or yourself as a down payment for the next rental property continuing that generational wealth. Stop selling your property unless you are in an emergency. I think it’s perfect what your parents did for you, Prescott, which was give you a home equity line of credit after four years of self education with BiggerPockets, and I think it’s perfect. Now, I bet you’re able to refinance and pay them back, then be able to use that over and over again.

Prescott:
Exactly. My parents basically told me, “If you were just any kid, we probably wouldn’t have done that,” but they’ve been watching me read real estate books, talk about finances, and bore them to death about real estate when I don’t have anything, so they’re like, “If anybody’s going to do this the right way, it’s him,” so they were able to be talked into that.

Ashley:
Dad, I know you are listening to this episode right now. Go back and repeat that. I’ve been trying to get him to take out a line of credit on the building that his business is in and he’s been thinking about selling it. Felipe, what you just said was, “Don’t sell it,” keep using the equity in it over and over again, so, Dad, listen to this.

Felipe:
Okay, hold on. Ashley, what’s your dad’s name?

Ashley:
Mike.

Felipe:
Mike, do not give Ashley a loan. Everyone else, you can give it to, but, Mike, don’t give Ashley-

Ashley:
I want him to do a private lender so bad and I keep bringing him these deals to do. “Yes, I’ll think about it.” Whatever and he hasn’t pulled the trigger yet. Dad, listen to that.

Felipe:
Anyways, Prescott. What did you do with the line of credit? Walk us through what happened next.

Prescott:
Okay, so with the line of credit, I found a house looking through Zillow, and I got in contact with a real estate agent in that city of Hattiesburg. I basically was looking for homes that fit into my rental requirement list. Any investor will tell you take the [inaudible 00:15:40], not a deal. It needs to objectively fit into a list that you want to buy as a rental property. That list for me is a home that has 150 percent ARV, 25 percent equity upon rehab ending, it needs to be in a neighborhood where I feel comfortable picking up the rents from, and of course falls into the one percent rent rule. I basically combed the MLS and Zillow, and found a couple homes that fit the mold as far as that rental requirement list is concerned. I found a house that was about a minute away from a major hospital, a minute away from a major university, and it was listed for 55000 and it had been on the market for about five to six months with a couple of price reductions, so of course I’m thinking I could get a deal out of this.
The home is 1800 square feet, three bed, two bath. I mean, it has great bones, but it looks like the guy who owned it before me had started a rehab and just ran out of money. I mean, they had about a thousand square feet of flooring, ceramic tile, light fixtures, toilets, an AC unit, and hot water tank on the property that just wasn’t hooked up. I finally came up with I was going to put an offer in on this property, I went 15000 below the asking price at 40000. Right before I got my agent to submit the property, I’m just thinking, “What more can I ask for to make this deal beneficial?” Of course, he’s probably going to say, no, it’s 15000 below asking price. I decided that I was going to ask for it for 40000 dollars contingent upon all the material being left in the house and it was accepted the next day. The next day.

Felipe:
My man. That’s amazing. I love those. I have found one or two of those where people run out of money. In that situation, it benefits you and that person. They just need their money out and you have a great deal to move forward on. I think that’s amazing. Sorry, I don’t want to cut you off. Keep going. What happened next?

Prescott:
Okay. Over the next three months, I lived in the house, so I’m a new nurse working 12 hour shifts almost every day. Then, I come home and work in the home for about four hours. Of course, I had help. I subcontracted out some stuff like plumbing, electricity, but I was sleeping on an air mattress in this house that somehow found a new hole every night, so I woke up on the flat floor every night. I mean, we turned this house out. I completely sanded the outside of the house, repainted the outside, the inside, had to do a little sheet rock work in the back. Ran new electricity and I put flooring down, but I did all of this with the material that was left in the house. I used that AC unit, I used that flooring, I used that ceramic tile in the bathrooms, and I basically fought it out for those three months. It sounds like it’s terrible, but I tell you all this might have been the best three months of my life because it was like I finally get to get started.

Ashley:
How did you learn to rehab properties and do this work, when you were younger?

Prescott:
My dad is actually contractor. [inaudible 00:18:30]. I’ve been exposed to this stuff my whole life. Now, I feel like I finally had all of this real estate knowledge, which really wasn’t that much that I came to find out once I started doing deals, but I had all of this book knowledge and I had my hands on a lot of different construction activities my whole life, so it culminated for me to finally get [crosstalk 00:18:50]-

Felipe:
You don’t have to be humble, Prescott. You can tell us you had YouTube up sitting on the screen while you were fixing the patch just watching Investor Girl Britt show you how to fix a patch.

Ashley:
Doing a California patch.

Prescott:
I’m not going to lie, I definitely had a couple. I remember when I was doing the back splash behind the granite in the kitchen, I was literally watching the YouTube video as I went through every step. Some of the stuff I already knew how to do.

Felipe:
We’ve all been there. I’m not above it. We’ve all been there.

Prescott:
YouTube’s amazing.

Felipe:
Oh, yes. Absolutely, agree. You found the deal, you just found it on the MLS. That was just off the MLS, right, Prescott?

Prescott:
Yes, sir.

Felipe:
I mean, that goes to show where people are like I can never find deals on the MLS, how do people get off market deals? You can still find it, you just have to build out your criteria like you did. I love what you said earlier where you had your criteria and then you started looking for a deal. I think a lot of people start looking for a deal and try to fit it into a criteria, which is I think the opposite way to do it. You fill out exactly what you want, you’re like I want this, this, this, this, and this, you go on Realtor.com or Zillow, you put as many of those tabs that you can, then you allow it to bring it to you. If that deal fits the mold that you have for your personal individual goals, then it’s going to work. Don’t do it the opposite where you try to find a deal and then create a mold. No, do what Prescott did. Create your mold, figure out what it is that you’re looking for. Is it cash flow, is it equity? What is it that you want? High ARV, whatever. Then, find deals that work for that and you’re going to find them just like you did.

Prescott:
Amen.

Felipe:
You got the deal, you started rehabbing it. What happens next?

Prescott:
I put about 25000 dollars into it, so I bought it for 40, put 25000 dollars into it. I lived in it for about three months. While I was living in it for those three months, I found another deal in Pass Christian, which I’m sure I’ll talk about later, which is the Katrina cottage. I found that deal and I had a job offer at a super amazing hospital in Bay Saint Louis, which is right next to the city of Pass Christian. I decided that I was going to come home. Of course, my parents are thinking I’m going to rent out the house in Hattiesburg because they’ve been listening to me talk about real estate my whole life. Of course, I rent out the house in Hattiesburg, I remodeled the property in Pass Christian that I bought, and had it ready to rent in about four days after buying it. They’re thinking I’m going to move to that house, but I pulled off this magic trick where I rented out both houses in like a two week period and moved back home with my parents.

Felipe:
Wait, they thought they got rid of you by pulling a HELOC. They were like, yes. He’s out of the house. This guy goes, rents both houses, and moves back in.

Prescott:
Got to be smarter than that.

Felipe:
Ultimate house hack. That’s a Super Saiyan house hack right there. I love it.

Ashley:
People joke and make fun of people for living at home until they’re 30, but honestly you save so much money and it’s so smart to do.

Felipe:
Prescott, what’s your dad’s name?

Ashley:
Unless, maybe you were married with kids and you’re mooching off your parents.

Felipe:
They going to start charging him rent.

Ashley:
I think that is a great way to house hack, to live with your parents as long as possible.

Felipe:
Every parent listening to this is like, no, Ashley. Stop saying that. I don’t want them back.

Prescott:
It’s been great. I’m scared to give Felipe my dad’s name, he might feel taken advantage of.

Felipe:
I’m going to call him out. That’s awesome. Prescott, what did you do with that first deal? Did you refinance it? How’d you get your money out? Do you have it paid off? What’s the scenario now on the back end? What do the numbers look like?

Ashley:
Yes, I want to know too, what was your deal with your parents too? Did you pay the HELOC directly or did you pay them some extra interest too? How did they benefit from it?

Prescott:
They were super cool about it. I basically just pay the HELOC as if it’s in my name. They know I’m not going to miss any payments or anything, so they almost act like it’s not even theirs. They treat it as if the HELOC is mine.

Ashley:
I even offered my dad extra interest to do it.

Prescott:
He still wouldn’t do it?

Ashley:
He hasn’t.

Felipe:
Look, Prescott [inaudible 00:22:48] offering you his HELOC. Girl, come here. I got you. Pay me interest.

Prescott:
On the first house, I only had 65000 dollars taken out of the HELOC. I really wasn’t thinking refinance at that time because I still had some money left over. The other deal, I ended up buying for 25000 dollars, so what I did was when I rented out the house in Hattiesburg, I was all in at 65, I knew the house was worth anywhere between about 125 and 150, so I rented it out for 1300 dollars. I found a tenant through the Zillow rental application app that’s paid for at the tenant’s cost. It shows you their credit history, criminal background like criminal history report, and it was great in helping me find good people. Basically after I narrowed down that list, I just talked to people, and I found someone who was willing to rent for 1300 dollars a month on a property I only had 65000 into.

Felipe:
Wow.

Ashley:
So cool.

Prescott:
Yes, so [inaudible 00:23:46] and tax on it is like 100 dollars a month too, so I was cash flowing like 600, 700 dollars every month, which I’ve been doing that for about a year now on that house.

Felipe:
You didn’t refinance it or anything, you just leave it as is.

Prescott:
I did, but I refinanced it after I bought the house in Pass Christian. Now, I’m using the refinance on that house to build the two new constructions.

Felipe:
I believe that’s called the stack. That’s amazing, Prescott. Good for you, dude.

Ashley:
Okay. Let’s talk about this new construction because I’m looking at building a duplex in Texas right now. Let’s dig into that process. What made you decide to do that?

Prescott:
The new construction goes with the probate deal. When I bought this probate deal-

Felipe:
Real quick, what’s a probate deal, Prescott? Can you explain that to our listeners? Then, we’ll move on.

Prescott:
Of course. A lot of people think if your parent dies and you’re an only child, that you’ll immediately get deeded a property, but probate is the legal process that it goes through before you own that property free and clear. There’s a lady in my city and she was like, “Prescott, I see all of the stuff you’re doing, real estate,” because I always was posting my rehabs, my yearly goal list, and stuff. Her daughter had showed her and she was like, “Well, my parent just passed away.” She’s a lady that’s doing well for herself, but a lot of people just don’t want to deal with the day to day hassle of being a landlord. She was like, “Would you mind going to look at the house?” Of course, I went and looked at it that day. She was like, “How much would you be willing to pay?” I told her 25000 dollars and she was like, “Perfect, fine.” We met with a real estate attorney that day and he drew up the contract for us. I already had the 25000 dollars available.

Ashley:
That day?

Prescott:
Yes, to start up the paperwork, not to sign everything, but to start it up. Then, the 25000 dollars I had from the home equity line of credit. I paid her at the table and she was like, “Well, Prescott, you’ve been so great with everything so far,” because it was just a real smooth process, she was like, “Well, I own the three lots next to it,” and she quitclaim deeded it to me at the closing table. I was like, “Oh. Well, thank you.”

Ashley:
Oh, my god.

Felipe:
I’ll take them too. Are you serious for nothing?

Prescott:
Yes. It happened because I think it was just probate deals, it’s already a lot going on, and it was an extremely smooth process. Anything that would have got in the way, I would have cleared it up and made it to where it was something she didn’t have to deal with. She just felt good about that deal and she quitclaim deeded me the lots next door. That’s where I’m building the two new constructions.

Ashley:
Wow. I’m still in shock.

Prescott:
Yes, and they’re like a block off the beach in Pass Christian, so it’s super nice.

Felipe:
You trying to get rid of one, what’s up? I’m just kidding. You trying to get rid of one?

Ashley:
We had another guest on the show talking about how they got another deal because they made it a smooth transaction for the seller and I think that is so important to hear them out, listen to them, make sure the process is working for them as well as you. I mean, this is the second example, I think we recorded that episode a couple weeks ago, of just how much having that good nature with someone can really benefit you in the long run too.

Prescott:
Yes. It is. I think you have to value relationships over … I know money is important in being a real estate investor, but you just have to value relationships in this business because it’s a relationship business. Actually, she had another home that went through a probate process and that’s the property that I have under contract, so it’s been great with this lady.

Felipe:
That’s really important, Prescott. The value of like you just said a minute ago, not just going for the money, but for the relationships because you never know what people have in their back pocket. Just because they’re selling one property doesn’t mean they don’t have 11 that they’re thinking about selling next year that you’re going to be the first person they think of because you’ve made that transition so smooth. Now, you’ve created an exit for that person and an in for yourself, which is a win/win for everyone. In real estate, I believe that a transaction can and should go both ways where both parties are equally happy at the closing table. I think that’s what you’re creating with this person. Whoever this is, is also going to tell five of their friends. This is how you’re going to reach that goal that you want before 30. I’m going to say it right now. Before 30, you’re going to reach your goals because you’re creating more relationships than just money. I think that’s awesome that you’re doing that.

Prescott:
I agree with you wholeheartedly, Felipe. It’s worked out great for me. I mean, it goes beyond even members of your core four, which a lot of people listening know that’s your real estate agent, your contractor, your lender, and your property manager. I can’t tell you how many deals I’ve gotten from knowing the guy at the lumber yard or talking to the granite man about real estate because he owns a bunch of real estate too. There’s been so many times where I’ve found that I’ve received all of these deals just because I had the relationship with the person that I’m doing business with.

Felipe:
Agreed.

Ashley:
Okay, so we have a segment coming up and I think you already did our transition into this segment by saying that, but this segment is called the …

Felipe:
MVP, MVP.

Prescott:
MVP.

Recording:
MVP, MVP, MVP.

Ashley:
This is where we want to hear about the most valuable person on your team. Who is someone that has really helped you grow your real estate portfolio? Maybe it’s a mentor, a realtor, who is that person?

Prescott:
If I had to give my MVP right now, I’d have to go back to my lender that I talked about earlier because of course I know about home equity line of credits and stuff from reading books, but I wasn’t even thinking. I’m thinking conventional, she brought up the home equity line of credit, and somehow talked my parents into going along with it, so she’d definitely be my MVP. My dad being a contractor, he’s helped a lot with all the deals that I’ve done, especially when I don’t know how to do certain things, but I give my MVP to my lender and just all of the real estate mentors that I’ve annoyed on social media, including Felipe because as soon as I got that DM, he’s considered my real estate mentor now.

Felipe:
There we go.

Ashley:
Enough about Felipe. How did you pick that community bank? Was that where you had your checking accounts or your parents had used them?

Prescott:
She’s my dad’s banker, so his relationships with her is something, but she acted like she was my banker because she talked him into the idea, not me.

Ashley:
Yes. That’s great. What were some of the things you might have asked her or talked to her about that you can recommend to our listeners what they should look for in a lender? How will someone find a great lender like her?

Prescott:
Well, I’m a huge fan of the community bank model, so I would look there first that do those things I said earlier like [inaudible 00:30:40] forms of creative financing. They need to do more forms of that actually. I just think it’s the person. She listened when I was telling her my real estate goals. A lot of people would say this is a 22 year old kid, which is how old I was at the time, and say, what the heck is he talking about? He can’t have 100 rental units, I don’t know anyone with 100 rental units. I don’t know anyone with four million dollar net worth. Then, just say this kid’s just crazy, but she listened to everything I was saying. Then, not only did she listen, she thought up ways that I wasn’t even thinking of that could like I said earlier catapult me into the future as far as real estate investing and that was great.

Felipe:
It’s really important because she listened to your goals and then even though you had a vision of how you wanted to get there, maybe she found a little bit quicker way. Maybe you were going to take the stairs and she was like here’s the escalator.

Prescott:
Exactly.

Felipe:
This is how you can do it, but maybe a little quicker. I love that. I recently switched one of my banks because I went from one bank to another simply because of what you just said. They weren’t listening to my goals. What happened was I actually brought them a deal and I said, “Hey, look. There’s this parcel that’s got two acres on it. I’m ready to buy it. It’s 70000 cash and it’s valued at 150.” They said, “Sorry, we can’t fund you, Felipe.” They just didn’t even … Just, sorry, no.

Prescott:
Not why.

Felipe:
Not why, not look at it, no nothing. In the back of my mind, I said, “Okay. I’m going to get this deal done and when I get it done, sold, and get my check, I’m going to come back to the bank and close the account if this actually works.” I did, I went back, I showed them the 70000 dollar profit, and I said, “This is the deal you told me no on and you didn’t even ask me why,” so I just closed all my accounts and I’m switching banks just because like what you said, the relationships is so important. If you don’t have a good lender, a good banker who’s going to listen to you and actually care about you, it’s going to be harder as you go. Growing with your bank is really important and I’m so happy that she listened to you, understood your goals, and said that’s an amazing goal. What about this right here to get there quicker? I think that’s really going to help you out in the long run for sure.

Prescott:
Yes, I bet that was the best feeling ever just to say, oh, yes. Then, put it on the table.

Felipe:
Oh, yes.

Ashley:
Well, thank you for sharing your MVP with us. If you guys want to find out more information about the bank or the lender that Prescott uses, go to BiggerPockets.com/Rookie32. Felipe, do you want to take us to the next segment?

Felipe:
Awesome. Okay. Prescott, we’re going to do the Rookie Request Line. Are you ready?

Prescott:
Let’s do it.

Felipe:
Just anyone who’s listening, you can always reach us at 1-888-5ROOKIE to leave a voicemail and we might use it on the next show. All right, here’s today’s question.

Dalton:
Hey, how you doing? My name is Dalton from Massachusets. I’m looking to get into a [inaudible 00:33:29] sometime in the near future, so I’m just starting to do my research. You talk a lot about finding locations and analyzing deals, but what exactly do you go through when you analyze a deal?

Prescott:
As far as the things I go through, I basically just take my rental requirement list and match it up with comps for the community because I usually look for distressed houses that look like they need a little bit of rehab, so I don’t necessarily look at the house that I’m buying, but I take the normal house in a neighborhood, and put in the numbers that I need on my rental requirement list to see once I finish with this home, will it match up with the community and end up being a great deal? That’s basically how I look for deals and send them through my rental requirement list.

Ashley:
Would you share some of those things on your list with us?

Prescott:
Oh, yes. The 150 percent after repair value, the 25 percent equity upon rehab ending, it needs to be in a C neighborhood or better, which to me a C neighborhood is somewhere I feel comfortable picking up rent, and then fall into the one percent rent rule, which of course is if you own a house that’s worth 100000, you should get at least 1000 dollars in rent, and 250 dollars per unit per month. Cash flow’s important, I [inaudible 00:34:43].

Ashley:
Yes. When you’re analyzing a deal, you analyze it, then you go and you check your boxes. I think that is so important and people get wrapped up in analysis paralysis, but if you have that sheet showing what your requirements are, boom. You can boom through deals. This box is not checked, don’t dwell on it. Move to the next deal or figure out how you can make it so that box is checked. Everyone, if you don’t already, sit down and make your checklist of what a deal will work for you. How will you reach your goal? What is your goal? Then, reverse engineer that. Work backwards. What do you need in a property to reach your goal? Is that how you did it with you checking all these boxes?

Prescott:
For sure because I’m looking at 100 plus rental properties, well prospective rental properties, a day. There’s no way that you can just look at these deals emotionally. You’d never get through the list. You have to have something set in stone that you’re following by to narrow down and then to create a funnel like Brandon Turner always says to get to the best deal.

Ashley:
Yes.

Felipe:
That’s part of just like you said creating that funnel and what you’re going to do with those 100 properties is just create basically a machine where you’re just oiling the machine because you know that they all are basically the same thing because you analyzed them based off the same criteria. You’re going to have the same property over and over again. There’s nothing wrong with boring real estate. Everyone talks about real estate’s sexy, all these perks, and all these everything, but you’re creating a list. You’re going to buy little square boxes with roofs on them that fit that list over and over again. That is how you’re going to reach your millions quick.

Ashley:
Let’s go onto our random questions. These are a little bit real estate related, but just to give us a little bit more info about you. The first question I have is during your rehab, did anything happen to you, did you find anything in the rehab, or anything just be a disaster? Do you have a really good rehab story for us?

Prescott:
I have a terrible rehab story. It was actually post rehab, but it ended up being a rehab after this. The house is finally painted. It took me about three months to rehab it and I had some left over flooring, so I put the flooring in the attic of course so if anything ever happens, a crack, I could go pick it up. My shift starts at 6:00 o’clock, so at like 5:30, I’m already in my scrubs. I have my stethoscope on like I am ready to go be a nurse. I climb up the attic with this heavy flooring. As anyone knows who’s been in houses, a lot of times they have those two by fours that are like a foot apart in the attic. I’m walking on it in my nursing shoes. Somehow I stumble with the flooring and did a complete split like one foot went through the floor, it’s like hanging, and my other foot is almost to my ear, and I’m not a flexible guy. The flooring fell through the attic as well and my back was hurting so bad at work the whole day. The next day, I had to fix my mistake and re put the floor back in the attic. That was a terrible horrible story, but it happened.

Ashley:
Oh, my god.

Felipe:
That’s hilarious. Oh, clumsy [crosstalk 00:38:02].

Ashley:
I’m glad you survived it. That was a lot better answer than I expected.

Felipe:
That’s really funny.

Ashley:
Full split, I can only picture what you looked like hanging.

Felipe:
Hanging sideways.

Ashley:
Did you have to pull yourself out or did you just drop?

Prescott:
I thought about dropping because it was a depressing moment in life, so honestly I thought about just doing a Eeyore, just sitting there, and just giving up on life.

Felipe:
Just giving up on everything. Just take the L, Prescott, fall through, lay on your back. I quit.

Prescott:
Eventually, I pulled myself out of there. You have to do that in real estate. When you fall, you have to pull yourself out.

Ashley:
Yes, there you go. There’s a life lesson in that.

Felipe:
Hey, what a way to turn it around. I like that. What a way to turn it around. All right, Prescott. My turn. I got a question, man. What’s one piece of technology that you use to manage your rental properties because I feel like they’re in different spots right now, so what’s your one piece of technology that you couldn’t go without?

Prescott:
My cellphone, which I have a bunch of apps, which that’s an easy answer because your cellphone encompasses everything. When COVID first started, I remember one of the banks, the bank I use shut down, and the people who pay for me, they use my bank account number, so basically they go to the bank with my bank account number, name, and they pay. Then, the bank gives them a receipt and they send me a picture of it. That’s how that transaction’s handled. The bank wasn’t doing this when COVID first started, so they were able to Cash App me the money, which isn’t something that I do exclusively, but it really helped with me. As far as landlord apps, I have some of them on my phone, but I haven’t really used them as much as I should. I have my own spreadsheets that I go off of.

Ashley:
Since you’re self managing, what do you do for your maintenance calls? Are you doing the maintenance yourself?

Prescott:
Okay, so I’m doing the maintenance myself and this is a great story. Of course, I plan on getting big, so I understand I’m going to have to scale and I’m not going to be able to do maintenance forever, especially with these houses being like an hour apart. Both of the homes were, like I said, I went through and I remodeled everything, so it’s not very common for any call to be made. The house in Hattiesburg that I’m getting 1300 dollars in rent a month, I’ve only had one call on it. I haven’t had any calls on the Katrina cottage. I remember when I got the call just this feeling of being super stressed out.
They called to tell me that the AC unit had stopped working. It’s the middle of the summer, it’s super hot in Mississippi. It was like in the 90s. Of course, I called. I’m stressed out and I told her, “Did you change the vent?” They said they changed the vent, but amazingly after I told them, did you change the vent, they changed it, I told them to vacuum under the AC, and it magically started working. That one call, I remember being so stressed out about it and I’m thinking, “I literally have had this house for nine months, it’s made me 7000 dollars, and I just fixed the problem with one five minute phone call.” I was like, “You are worth 7000 dollars every five minutes and you had the audacity to be stressed out about it.”

Ashley:
That is such a great way to look at it.

Felipe:
Yes, I love that. I’m going to start using that. I like that a lot, Prescott. Yes, that’s exactly right. That happened to me. I sometimes get these calls and I’m like, “Oh, my gosh. This has to get fixed right now,” and I’m freaking out. Then, I step back and I’m like, no. This is normal, things are going to break. The garage door is going to stop working, it’s okay. Make three phone calls. The tenant, the garage man, back to the tenant saying it’s done. It’s okay. Yes, I totally get it.

Ashley:
I really like too that you tried to troubleshoot it over the phone too instead of just saying I’ll be there in an hour. I think that saves a lot of people a lot of time where when there are these certain maintenance issues, you can give them a couple things over the phone to do. Outlets aren’t working. Okay, did you click the little GFI button? I mean, that’s been a common one for me to say to people. Did you flip the breaker?

Felipe:
Ashley, tells her tenants to use the fork. Ashley says use the fork to click the GFCI button. That’s what Ashley tells them to do.

Prescott:
If it shocks you, it’s working.

Felipe:
You’re good.

Ashley:
The next random question we have is, what is the best habit you have formed?

Felipe:
You see how Ashley does me, she took my question because we’re supposed to go back and forth. You see how that is, I get run over.

Ashley:
I thought you just went.

Prescott:
The best habit I formed, I have a lot of habits, so I’m a real organized guy. If I come up with a checklist for that day, I will almost kill myself to get to the end of that checklist, which isn’t great all the time, but I use reminders in my phone and I almost live by those reminders. That’s a great habit I formed. I work out all the time. That’s been great. I read 10 pages. I mean, my biceps don’t look like Felipe’s, but they’re pretty strong if I could say so myself. Just working out, reading every day, listening to podcasts, and following my checklist. I’d say those are my go to daily habits.

Ashley:
100 percent after we stop recording, I know there’s going to be a flex off between the two of you.

Felipe:
Prescott, you don’t want the smoke, man.

Prescott:
You’re closer to the camera.

Felipe:
It’s the angles.

Ashley:
Oh, my god. You guys.

Felipe:
People go on IG and they’re like, “It’s the angles.” Sorry, go ahead, Ashley.

Ashley:
Prescott, can you tell everyone where they can find out some more information about you and if they can reach out to you, where would they find you?

Prescott:
Okay, you all can reach out to me whenever you want to. I love to talk real estate and finances. My Instagram is Prescott_Williams, Prescott, P-R-E-S-C-O-T-T_Williams. My Facebook is Prescott Williams as well. A YouTube channel [inaudible 00:43:48] will be here soon, but I don’t have it yet.

Ashley:
Oh, exciting. Cool. We’ll watch for it.

Felipe:
I’ll have to follow for sure.

Ashley:
Thank you so much for coming on the show today. I mean, my dad tells me I giggle a lot on the show, but I don’t think I’ve laughed this much.

Felipe:
This was a great show, I loved it.

Ashley:
Yes. I had a great time. Thank you so much, you are doing awesome, and I can’t wait to have you back on the show again and see where you are to reach those 30 year goals.

Felipe:
Absolutely. Crushed it, Prescott. Seriously, man. Thanks for coming on the show. We’ll be looking forward to following you and seeing how those deals turn out.

Prescott:
[inaudible 00:44:23]. Thank you all so much. I appreciate it.

Ashley:
Yes. I’m Ashley at WealthfromRentals and he’s Felipe at FelipeMejiaREI. We’ll see you next week.

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In This Episode We Cover:

  • Prescott’s strategy for graduating college debt-free
  • Finding a flexible local “portfolio” lender
  • Persuading his parents to take out a HELOC to help him get started in real estate investing
  • Sleeping on an air mattress while renovating a house
  • His “rental requirement list” criteria
  • How he uses the “1% rule” (rent = 1% of purchase price) to guide his purchasing decisions
  • The stress-free way to handle maintenance calls
  • How he’s gotten deals just be posting his goals on social media
  • And SO much more!

Links from the Show

Prescott’s MVPs

  • His Mortgage Lender

Books Mentioned in this Show:

Connect with Prescott:

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.