Real Estate Rookie Podcast

Rookie Podcast 36: Gym Employee on the Path to $2k/Month and “Living for Free” with Gary Janica

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Today’s guest is Gary Janica, a Jacksonville, FL investor who loves his “stress-free job”… but realized he needed side hustle income to better support his family. Enter real estate investing!

Gary’s portfolio is on the smaller side – he owns 2 duplexes – but he's been able to drastically change his financial picture by house hacking and extracting hidden value with “garage apartments.”

If you share similar goals, check out this episode to get inspired and learn something new – and connect with Gary by leaving a comment on the show notes page.

Click here to listen on Apple Podcasts.

Listen to the Podcast Here

Read the Transcript Here

Ashley: This is real estate rookie show number 36

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Gary: cashflow in about two grand per month. That’s me at a pretty good level. You know, I don’t care for any social circles or anything like that. I’m a pretty just down to earth. I liked what I like and that’s really it.

My name

Ashley: is Ashley care. And today we have an exclusive with my co-host Philippe may here as this is the first time he’s ever talked about why he doesn’t like Excel and spreadsheets, that makes you listen to the very end because

Gary: yes, you have

Felipe: to listen all the way in about why I hate Excel sheets. So finally, I’ve let the cat out of the bag.

The information is in there. But as always, Ashley, we’re not here to talk about me or my Excel sheet phobia. We’re just talking about Gary, who seems like a really laid back, super chill dude down in Florida who has two duplexes. He works at a gym. He says they’re like, he talks about just having a really modest jobs, but still investing in real estate slowly and growing a portfolio and good for him.

He’s a father full-time job investing in real estate. Just super relaxed guy. Doesn’t take it too serious.

Ashley: I just want to say thank you because you always get me back on track. That’s why we make it such a great, yes, Gary is great. He talks about how he got interested in financial independence, how he started buying properties for his family to create wealth.

And he started, he works at a gym and started networking there and actually found a great mentor to help him.

Felipe: Hey, Gary, welcome to the show, man. Super excited to have you, can you tell our listeners a little bit about yourself? Who you are, what you do? Yeah,

Gary: of course. My name’s Gary. I live in Jacksonville, Florida with my wife and two kids.

And as far as for work goes, I worked full time at a local gym called Bally’s and I’ve been there for about eight years. It’s probably one of the most stress-free jobs. There is. But with that comes little pay. So that’s kind of my motivation for real estate investing right before

Ashley: we jump into like the boring real estate stuff.

I just want to know what is your opinion on fleet based biceps as someone that works at a gym, can you please critique them?

Gary: That’s go hit a flex. Are you ready for it?

Felipe: Are you ready for it, Gary? Are you ready for this bomb on the show?

Gary: Oh, Oh man.

Ashley: Okay. Please continue with your story.

Gary: Right? So, so outside of the gym, I’m a realtor, I’ve been a realtor for about two years.

And I will say I haven’t done much with it. It’s kind of like a double edge thing, because with that, I worked for a broker and they specialize in tenant placement and property management. So I guess that’s like the silver lining in it. But I definitely wasn’t able to really catapult myself with having a full-time job and two kids.

Yeah. A little much for me. So yeah, that’s, that’s where I’m at right now.

Felipe: Interesting. I love that. That you, at least you have your license though. So one of the things that people always ask me is fleet Bay, is it worth me getting my license. There was a real estate investor. And, and, you know, at first I would have said no, but now that my wife has her license, it's helped us out a lot with just looking at the MLS and then with one deal a year, it basically pays for all the dues.

Right? So. To me. I think it is. I think it is worth at least having, have you seen that at least having your real estate license has helped you as an investor?

Gary: Yeah, definitely. And that’s why I suggest when people bring it up to me, like, Hey, should I get my real estate license? I’m always like, yeah, definitely.

You know, if anything, it’s, it’s more knowledge, you know, but, and I will say as far as the money aspect goes, your dues, at least in Florida are like, like grand a year, maybe. And you get one house and that pays for it over. And that’s kinda how I H what helped me with my second deal. And, uh, yeah, I saved a lot of money by being my own realtor there, but really I’ve just done two deals, uh, as a realtor, just mine.

And my brother’s actually, it’s kind of funny.

Ashley: So let’s start with what made you take that action. Take that first step to buy your first investment property.

Gary: Yeah. Yeah. Yeah. So what kind of for transparency go back to the beginning because I think everybody loves a good beginning. So why real estate investing or right.

I working at Bally’s wasn’t making much money. I think what it boils down to though is I hate authority. Like most people, I want to be my own boss. I don’t like people telling me what to do. So that led me into this dive on the internet of, uh, sure. You’ve heard of fire financial independence retire early.

And so a lot of research in Robert’s Kiyosaki of course popped up a million times, just like every episode of any real estate investing show. And, you know, so I read all of his books and a member at the gym really. He was into real estate investing and actually gave me my first book on it. It was called investing in duplexes, triplexes, and quadplexes and honestly, one of the better books out there in my opinion.

And so that’s kind of what sparked me on it. After I read it in about a week, I was like, this is it, I’m doing it. You know? And so from there, I kind of just started researching, you know, all the different strategies that people have used. And with that. A little bit later. Uh, I got my classic first plan, which was a FHA, you know, duplex.

So very little money down the cost scenario. As far as how SAC

Ashley: you talked about financial independence a little bit. Did you do anything with your personal finances before you took that leap into real estate investing? Did you pay off that? Did you save a ton of money? What did that look like?

Gary: No, none of the above, I kinda, you know, the whole, uh, analysis paralysis thing.

It definitely didn’t do that. I think you want to take action before you have your mind gets a chance to think. So I really just started talking to it with my wife and I was a realtor at the time. But I didn’t do the, I didn’t buy it as a realtor though. So yeah, I was just looking through MLS and I found a deal and we kind of just did it with the help of her grandpa kind of given us some down payment funds, you know, cause we were having our first kid at the time.

So that really helped us out as far as getting our whole deal, but no type of planning whatsoever. I just know this is what I wanted to do. I know all the strategies out there. So, yeah.

Felipe: So Gary give us the 30,000 foot view of where you’re at now, where your portfolio is, what you want to get to. What’s the, what’s the goal with real estate.

And then if you want to go ahead and start digging into one of your deals, we’d love to hear a story.

Gary: Yeah. Okay. Well, you know, my ultimate goal is to be filthy rich. Right. You know,

Felipe: isn’t that

Gary: all of our

Ashley: money, money, money.

Gary: Yeah. That’s right. So as far as my two deals, you know, I, I purchased both of them kind of within a year.

My first one was the FHA duplex. So right now I just have four units, two duplexes, couple blocks from each other and kind of a hipster area of Jacksonville, Florida.

Ashley: What time period? Like how long did it take you to acquire these four?

Gary: So it was like 2018 at the beginning of 2018, we purchased our first duplex.

And then at the end of November, we got married. And then as soon as we came back from our honeymoon from Italy, we bought our second duplex and it took a little finagling, but that’s kind of where we are two duplexes, a couple blocks from each other. And so as far as the second deal, that’s. What I’m going to say is my pride and joy, uh, that has a lot more potential than my first.

So that one took some strategic planning. I, the steel had been on MLS for half a year, maybe almost a year. Nobody was getting it. I wasn’t sure why, but anyways, I ended up taking a look at it. I loved it. Basically. I had a, as far as financing goes, we didn’t have much money. We had a kid, we just got married.

So not much money coming in at all there. So what I was going to do at first was finance it through Navy. Federal is a hundred percent financing, which is like a gold mine. It's like, Oh, wow. Okay. I can finance a house with like nothing down. So at first it was going all smooth. I submitted an offer or it was like around $250,000.

So I submitted an offer at two 38 and it was accepted, you know, I did my inspection, things like that. And then Navy, federal comes back and says, we're not going to give you that product anymore because you aren't qualified. So I had to kind of go other elsewhere. Uh, so I ended up applying at like five other mortgage places, uh, ending with PNC bank, um, here in Florida.

And. You know, not knowing how I was going to come up with the money. I ended up doing a 5% down is what I ended up doing

Ashley: while on an investment property.

Gary: That’s great. Yeah. Well, how’s hacking, I guess. Sorry, how so?

Ashley: Okay, so you’re going live in there

Gary: and kind of how the, my, both of my places are set up.

It’s a house, the single family home, and then behind it, there’s an apartment above the garage. And so they’re priced just as a regular single family, but. Rented out both of them and they can bring in a good chunk of change. So yeah, so 5% down is what I ended up doing after a couple of trial and errors, we’ll say.

Uh, so with that one, I ended up using my realtor commission Philippe, talk about, you know, if it's worth it or not, I, that was an extra, you know, six grand towards closing costs that I was able to save with that. And then on top of that, I had a 3% seller concession. That was about seven grand. And then towards like a total closing cost of, I think it was like $12,000.

So that helped me out a lot. I did a 401k, like installment loan for like three grand. And then

Ashley: talk about that real quick before we move on. Can you explain about that? Because that actually is a resource that people could use.

Gary: Yeah, definitely. So. I work at gym. I don’t really make much money, but I’ve been there for eight years.

So I had a little bit saved up. And at first I tried to do like a hardship withdrawal, basically. But I, they didn’t approve me for it or something. So they said you have to take out a loan first before they will do any type of withdrawals. So I did the loan for three grand. They sent me a check maybe a week later, and it’s just set up, you can customize the payments, however you’d like, and it’s not like on your credit report at all, or anything like that.

Ashley: And what's your interest you're paying on that? Nothing. Nothing. So you're just paying back the loan with no interest. Okay, awesome. Yeah. So where you have your 401k, you can draw money out of that as a loan, and then you're paying yourself back. So the downside is that money isn't earning anything, sitting in your 401k that, Hey, you're, you're probably getting a better return on your investment property right now by putting the money into that, and then slowly paying back your 401k.

I would assume.

Gary: Definitely. So that’s exactly why I went through with it. No questions asked. So really out of, out of pocket, it was two grand to buy this property. Along with that came like it was already rented prior to me purchasing it. So the garage apartment was rented for like 500, I think it was. And the house was rented for 1350 per month.

I think it was. So as a proration, they credited me like a little over a thousand dollars. So that went towards closing costs as well. So that’s why two grand is all I took out of my bank account to ALSAC. That is my second duplex.

Felipe: So let’s let me dig into those numbers now. What are the numbers look like on the duplex?

Are you still living in one side? Yes. Yeah. Okay. So what are the numbers looking like now? And then what are the numbers going to look like when you move out?

Gary: So that’s really what’s uh, I’m so happy about this one. Right now I’m living in a house which market rent for it is an area about 15, 50 per month.

Okay. The garage apartment behind it is about 900 to a thousand dollars per month. So it’s really, really good spread there. My mortgage is about 1500 1600, which kind of changes with taxes, but yeah, it’s around that range. Once we move out, it’s already a great property as this. But my ultimate goal, there is enough room underneath the garage apartment as is to pass inspection, to add a unit underneath the garage apartment.

So that would make it a triplex and triplexes in the area that I'm at are gone upwards of about 500 K. Wow. A lot of appreciation has happened in like the past two years. Where I am so really grateful. They are, hopefully they stay there, but, you know, obviously we don't know. And so that's my ultimate goal.

Felipe: Jumping into something you said earlier where you mentioned that that property had been on the MLS for a long time. So I want to know why you think it, it has been there for a long time. And before you answer that, I do want to tell our listeners that some of my best deals have been on the MLS for a long time.

And I don’t know if that was because it went under contract and then it fell out of contract due to, I don’t know, financing or something. And then it’s back on the MLS, but there’s a hundred more properties that came on the MLS since then. And it just kind of gets pushed to them bottom, but it’s actually a really good deal.

What was the situation for you as to why is this duplex on the MLS for so long and why didn’t no one snatch it up? If it sounds like such a great deal.

Gary: Yeah. So I think it was one of those things where people just started overlooking it because of the days on market. It’s like, Oh, it’s, it’s been sitting for 60 days.

I don’t want to touch it. You know, it has to have some problem with it. And I guess the simple answer there is termite damage. It was pretty apparent, but nothing I’m scared of. We had the house tented, as soon as we purchased it. And it’s still standing. Now

Ashley: that was something you figured into your numbers crashed.

Gary: Of course, of course.

Ashley: So you figured that out out ahead of time, and then you, you make the deal still work based on what those expenses are. Yeah, you’re right. Like a lot of people are afraid of different things like that, but if you actually go and do your research, figure out the cost, you can run your numbers, make sure your offer is low enough that you can pay for whatever needs to be done.

And you’re making money on the deal.

Felipe: And to add to that, you can also go on like realtor, the MLS or whatever, and actually reverse the setting where you can have like latest or longest on here, type of thing. Like, you know how you can go price high to low and things

Gary: like that.

Felipe: You can actually go to the, go to like realtor.com Zillow.

Gary: And like there’s a setting where it’s like

Felipe: longest time on or whatever. And you’ll see, you know, houses that have been on the MLS for six months. And if you just start working and backwards, I bet people would find fantastic deals doing that.

Gary: Yeah. So both of my deals. Yeah. Straight off the MLS, you know, there was no secret.

There, there was nobody wholesaling or anything just right off the MLS that I just found a niche, the grad departments and this specific one happened to just be overseen by everybody. And, uh, I took advantage of it. Cause I knew it had a ton of value add

Felipe: or you’d like sitting still now. Or are you going to sit in the duplex for a little bit or are you looking to buy another one?

What’s the goal going forward?

Gary: So goal going forward is to finish out the third unit, build that out, you know, get some building permits, design it, get it rented out. I may even dabble in some Airbnb to see how my area now reacts to that. So once that is done, I want to do a cashout refinance and uh, that’ll hopefully get me a good cash out of, you know, 50 to a hundred K to hopefully go into my next deal.

But right now, uh, I have a family and we’re pretty comfortable where we are. We like where we live. We’re like walking distance to the bars, uh, in a very popular area. So it’s not like I

Ashley: wanna leave. I have kids too walking distance to the bars,

Gary: Ashley, I’m jealous. Uh, you know, I think they’re starting like a liquor store or something like that.

Ashley: Yeah. Yeah. You’ll have to come visit it.

Gary: Definitely. Definitely. No. So I think that’s like a, that’s an ultimate goal right there. If I had a liquor store, I’d be happy. I’d be content, but yeah. So it’s, uh, I I’m going say like probably four years roll-up here. And then after that get like a standalone single family.

But while we’re living here, I want to at least purchase one more investment property before doing that. And then, you know, as most people, I guess, moving into more commercial type properties, I want to ultimately buy quad after this. So I can have kind of like the stack, like Brandon Turner says I’ll have like a duplex or triplex.

I buy quad and that’ll. Work my way up there. But after that, hopefully some apartment syndications and mobile home parks or whatever you want to call it. So

Felipe: I got a good buddy. You said you’re in Jacksonville, right? Yeah, I’ve got a good buddy. It’s a secret. Don’t tell no one. So everyone listening, put your phone.

His name is Gonzalo Corso. He actually does wholesaling. They’re in Jacksonville. So reach out to him. Maybe he can find you some great deals. Um, he’s a really good guy. Good friend of mine. So definitely reach out to him for some, for some great deals out there.

Gary: Does

Ashley: everybody? I feel like every single podcast he’s like, Oh, I know someone there.

Felipe: I think it’s that low. I think it’s the Latino in me.

Gary: Yeah. What, what, uh, ethnicity are you again?

Felipe: I’m born and raised here in Nashville, but my family’s from Mexico,

Gary: Mexico. I’m Colombian, but I’m basically white.

Felipe: Do you speak Spanish?

Gary: No, I don’t. I don’t want to let you down, but . Uh, poquito. Oh my God.

Felipe: I love it.

Gary: Yeah. So, but yeah, Diego, I think one of his show on the bigger pockets podcast, I was researching his PA uh, properties because he said he had some in Jacksonville and I was like, Oh, okay.

Felipe: Diego’s Diego’s brother is Gonzalo and Gonzalo works in, uh, in Jacksonville. Yeah. So actually Gonzalo. Got Diego, his properties there in Jacksonville.

Okay.

Ashley: Yeah. Please. Everybody take out a piece of paper, draw a teary, and we’re going to tough. The family tree.

Felipe: That’s hilarious.

Gary: Small world. Yeah.

Felipe: But you were saying you did some research on Diego, would you say.

Gary: Yeah. Yeah. I was like, I was curious, so I looked up his properties, you know, through the city of Jacksonville, whatever, and found out what his properties work.

Cause I was just curious like, Oh, all right. I gotta, I gotta get above this guy. So that’s a weird,

Felipe: yeah, he’ll, he’ll do some good deals for you. I’m actually working, trying to see if I can find something out there as well, but.

Gary: Okay. Yeah.

Ashley: So next thing I know you guys are going to be on social media together.

He always does this to me, so I’m going to be every single person on the show.

Felipe: All right. So you got the next question.

Gary: So where are you guys located right now?

Felipe: So I’m in Nashville, Tennessee? Yeah.

Ashley: Okay. I’m in Buffalo.

Gary: Buffalo. Okay.

Felipe: I’ll go see you first.

Ashley: Winter’s coming.

Gary: Hey, you got a farm. That’s awesome.

Ashley: Yeah. Yeah. Okay. So back to your story, back to what’s the next step. So to purchase your next property, what do you have to do? You mentioned you have to finish out the third unit. So once that is done, is that saving for the down payment? Is it finding a partner? Is it what’s the next step for getting that next deal?

What’s your action

Gary: item. So ultimately a cash out refinance, just money, you know, I’ve thought about some JV joint ventures. I like the idea of just having me only in my portfolio, but I know it’s a really expand, essentially. A partner helps a lot as you two are testimony to. Yeah,

Ashley: but I’ll say you can have a small and mighty portfolio.

Felipe: That’s very,

Gary: and I think I’m going to lean more towards that. At least probably for a quad. I think that’s my next goal is to purchase a quad with whatever I can get out of my cash out, refinance where I’m at right now, and then I’ll be pretty happy.

Felipe: Good idea. Also, I would even think about what if you like finished out the third unit, made it all nice and pretty, and then just put a heat lock on it.

So that when you do find that property, you can pull the trigger instead of doing a cashout refinance where you’re right now paying interest on it. Maybe you just do a, a, a line of credit and you just have it available for when you find the price.

Gary: True. And that that’s been an option too, you know, it’s one of those.

Google questions, you know, what's better cash out refinance or a hilar home equity loan, you know, it's all, I guess it's all relative. All of them, all, all of them, isn't it?

Felipe: Yeah.

Gary: Yeah. Yeah. That’s kind of where I’m at right now. And hopefully it’s easy to build it out. I don’t go over budget. I think I want to 35 to 40 grand as far as billing out the third unit.

And then from there, hopefully I can get it. Good return.

Felipe: Do you have contractors in place? How are you going to, how are you going to do this?

Gary: Solo solo, my man.

Ashley: Oh, you do all the work yourself.

Gary: Yeah. Yeah. And that’s where I can save some money, of course. But I think it’s a learning thing as well. Like I dove deep into like learning everything and anything I could, once I started finding out about real estate investing, I just, I don’t know.

I’m kind of at a point where I, I want to learn something new every day. And it’s funny. I joke with my wife all the time, you know, at the end of the day, I’ll ask her what she, what’s something new that she learned that day. And sometimes it’s hard for her to say that she learned anything. Cause I think we get so caught up in life, but it’s something that I, I watch a lot of YouTube.

I don’t know about y’all, but I watch a ton of YouTube. I think it’s one of the most slept on resources out there. You know, you can learn a four-year degree in like four months. I like,

Ashley: I think that YouTube is great because there’s so many different, like things you can learn on there.

Gary: Yeah. So, uh, as far as helping acknowledge as far as what to do and building that.

You too also have a great buddy. He lives down the street. He actually lives in the first duplex longtime friend. And he’s very hands-on. He actually is kind of a welder at my gym. So he’s very handy and kind of Jack of all trades. So he will definitely be an accomplice to that, but definitely I’ll save some money, doing it solo and learn a ton as well, because it’s something I want to do.

I want to build my own house from the scratch from the ground up one day. No, I think that’d be a great thing to learn

Ashley: and what’s better to practice on then, you know, uh, a rental unit and then work your way up. Yeah,

Gary: exactly. Yeah.

Felipe: I think as YouTube is great for that stuff,

Ashley: does your wife trusts that you’ll be able to build her a house?

Gary: I think I’ve surprised her thus far. So like growing up, I feel like I missed out on being very hands-on and doing anything construction-related. I just, it wasn’t around me. And then now I’m like, dang, I missed out. I missed, I missed, I wish I would’ve learned like a trade when I was younger and stuck with it.

Cause now I’m just like, I just want to learn everything now because I feel so left behind.

Ashley: Just like we say, it’s never too late to get started in real estate. It’s never too late to learn anything new, even like a new trade. And I look at you’re going to build your own house. That is awesome. And that’s like a really cool goal

Gary: to have.

Yup. So I’m happy. Hopefully it all works out smooth. You never know. There’s always something,

Felipe: she, back on the show to talk about how that build went. That’ll be its own show and the ups and downs of, of, and the learning curve of how that works out. I’m sure a lot of people are going to want to know.

Gary: Yeah.

I think that’s one of my goals too. Like, okay. I’m at like a certain point right now, but I think if I were to go back on this show, It’d be twice as good.

Felipe: Yeah. So let’s talk about that is your goal with how many units you want a cash number? I know earlier we just said rich, but that’s like you said, relative, depending to who you’re talking to.

I think I’m closer to becoming a multimillionaire than Jeff Bezos’s. So that makes me feel good. So what, what is, what is that goal for you, Gary? What does that look like?

Gary: I’m gonna say it’s a, a number, a number per month that I’m getting in cash on cash return. Steve jobs said you don’t want to be the richest man in the graveyard.

So that’s why cash on cash returns are such a great thing. So for me, I think about two grand per month is living for free mind you. And so having like my living expenses paid for and cashflow in about two grand per month, sets me at a pretty good level. You know, I don’t care for any social circles or anything like that.

I’m a pretty just down to earth guy. I like what I like and that’s really it. So you’re like

Ashley: Corona or you like the Corona virus. I see your sign behind you. It says it’s Corona time,

Gary: both, but originally that’s from our wedding. And so it’s just been left around and during the Corona virus, my wife put it up there and, uh, So I figured why not? Exactly. So

Ashley: that’s hilarious. Cool. Thank you for sharing that with us. You, what you want your life to look like, because that’s really important too, to give you that motivation, because sometimes being a real estate investor, you go through these ups and downs and some days it’s like tenants, rip your hair out.

And you’re like, why am I doing this? And to think about what you have coming up, what you’re building for your family, what you are creating. So let’s move on to our next segment. It is the MVP we want to know who is your most valuable player and I’m sorry, Fleabag. I didn’t have you do your little chance there.

So go ahead and say it.

Gary: MVP. M V, P and V.

Felipe: Gary, who is someone that’s just invaluable in your investing career? Somebody who is the MVP in use so far.

Gary: I’m going to give it to two people. One is the person I said before, Sammy Jack of all trades, always there for me. And his repayment is just beer and pizza, you know, really simple. So as far as I manage the units myself, so he’s always there to help me tackle those hard times whenever they pop up, because something always happens.

And then the second one though, would be the member at the gym who suggested. It’d be S all the time, it would come in for hours. And we talked about real estate investing and that’s all we were talking about. So I would give him probably that second place, because he gave me my first book and kind of, uh, sparked that idea.

And that’s how I’d say definitely.

Ashley: What advice would you give people to kind of, maybe they don’t have anyone like that in their lives right now, what’s the best way they can go and connect with someone in their community who can either show them how to do rehabs or who maybe show them what books to read or create life lessons like that.

Gary: I wish I could give you a better answer. I have a very social job. I come in contact with hundreds of members each day. So at that point, You find a lot of stories. And honestly, there’s a ton of real estate investors who work out at the gym. It’s kind of crazy. And so you kind of get to know their story and how they did it, et cetera, stuff like that.

So I don’t know about a specific answer, but YouTube is great. Obviously I was watching BiggerPockets since day one. That is really how I got most of my knowledge, you know, as far as mindset goes there, there’s other things like if have y’all ever heard of impact theory? No. No, that’s a great, yeah. It’s such a great YouTube channel.

It’s with, have you heard of a quest bar? Yeah. Yep. Okay. So, so it’s the ex CEO of bet. Whoever made that far. Yeah.

Ashley: He came out with protein granola bar thing, right?

Gary: Yeah, exactly. Yeah. It doesn’t taste too good, but it’s healthy for you. So, yeah, so he has like this podcast and it’s called impact theory. And you want to talk about mindset, drive everything he has.

Anybody and everybody on his show. And I think that really gets you in the mindset to be active, to be proactive. Take action. Even though when you think you don’t know enough, because then that’ll get you into analysis paralysis. I think mindset is a big thing to input into your learning. And then other than that, as far as I’m going to give a do y’all know of Simon Sinek, Nope.

No. Have you heard of him now? So he’s like an author. He does like business leadership books and things like that. So I think it’s well to be well rounded and treat real estate as a business because it is a business at the end of the day. So Simon Sinek, you just have some really good ideologies as far as empathy, treat your tenants with empathy because you’re essentially housing them.

So obviously have empathy for their specific situation. And you get that environment, right. And you get their trust. Right. And everything is smooth down the road, property management wise, because they’re not going to text you angrily. You know, they’re going to always have a nice tone. Because you’ve always treated them with a nice tone.

So reciprocation there. So I would say those three things

Ashley: that is great because those are free things that anybody can find online. And so I, I want to link all of those things too. Um, we’ll do [email protected] forward slash rookie 36. So we’ll take all those things so people can go and check those out.

I’m definitely interested in the impact theory, but back to what you first said about like how you have a social job and you meet since people. It is very easy to get a part-time job as a bartender cleaning at a gym. Doing anything where you are connecting with tons of people were being a stock boy at a grocery store.

There’s so many different things where if you really, really want to connect with people and meet people, then pick up a side job doing that. I mean, you can go to real estate meetups, stuff like that too. But I actually, there was this guy that I met because he worked at a restaurant and he was the manager there and he would like go behind the bar and he would talk to people and this guy had on, uh, Maintenance repairs and maintenance hat.

He did home remodeling. And so we started talking to him because he was so interested in real estate and the guy was like, Oh yeah, do you know, um, Ashley Carey follow her on Instagram. They’re like, yeah, we’re we’re friends with her. And so they connected us together and it was like, So awesome. And we actually, we got to meet a couple of times we’ve gone to coffee and talk about real estate, and I really tried to get them to run my liquor store, but yeah, it was so cool just because he had the job and he said, I just talked to everyone.

And I, if I know they have like any tiny little involvement or interest in real estate, he’s like, I just jumped on that and I get to know them and who their connections are and he is going to do awesome. Just because he’s taken advantage of that situation that he has.

Gary: Yeah, definitely. Totally. I got to ask Ashley, how did the liquor store come about?

I’m just curious

Ashley: right now we just submitted everything for the final liquor store approval. Okay. So today is what, the September 24th that we are recording this. I still don’t have my license.

Gary: Oh, wow. So

Ashley: wait, just so we have everything is submitted. So yeah, again, we got our conditional approval and now just for the final.

Yeah, I have a rock star manager.

Felipe: We’ll have to go visit Ashley to

Ashley: open house.

Gary: Yeah, definitely.

Ashley: Yeah. Yeah. You guys have to buy it. No free can new business

Gary: support.

Felipe: All right.

Gary: Well,

Felipe: Let’s go to our rookie requests line portion of the show. You can reach us anytime at one eight, eight, eight, five rookie to leave a voicemail and we might use it on the next show.

So, Gary, are you ready?

Gary: I'm ready. Let's do it from the DMV here. Buy and hold investor with the question about reserves for vacancy maintenance cap ex. There's a lot of talk about, you know, the amounts. But my question is about the mechanics of how model includes $10,000 a unit reserve. It kind of a purchase things, Scott trench, and putting the add 20% per month.

Thanks to Josh and Brandon. They’re looking for some advices for best practices for, you know, how. Where those reserves are held the pan. Thanks a lot, guys. That’s a good question. I would say first and foremost, what’s worked for me is having an online savings account, like a high yield savings account.

Like, I don’t know if you guys remember, but like a year ago it was like a battle between savings accounts, you know, banks trying to, who has the biggest interest on savings accounts. And it went up to like two and a half percent back for just putting your money in a savings account. Uh, but ultimately as far as.

Continuously saving and making sure you’re not spending it an online savings account is what has helped me. I personally use like Marcus by Goldman Sachs. It’s easy transfers are easy and you know, of course you can always use that money. You can do open up a CD, a certificate of deposit to really keep that interest going, having your money work for you.

But it just, I guess it depends on what your goal is. If it’s just a reserve. Can obviously invest in more real estate. Now

Ashley: I’ve talked about this a lot because he used to have like a million dollars in reserves. I’m like, okay, you don’t need that.

Gary: No, I would keep it. I

Ashley: convinced them to invest some event.

Gary: I would keep a large amount

Felipe: of for emergencies. But what, when me and Ashley got to talk and what I ended up doing was actually using that money to invest in real estate and my reserves for the emergencies or things like that was actually my line of credit. So I have an open line of credit of, I think it’s over like six figures, but it’s on a paid-off house that I have.

And I use that line of credit as if I get something comes up, I pull out a line of credit and then I pay the line of credit off with the, with the rental income. So I don’t keep as much cash and reserves as I used to. But something that Ashley always told me was whatever helps you sleep at night, that’s going to be the best answer.

Like invest. Yeah. Put, save whatever you want. But as long as you can sleep at night, that’s probably going to be your best answer. Where is your comfort

Ashley: level? Yeah, I do six months of reserves. And then I also have a line of credit that I use to buy houses that I always keep like an extra amount available in case I have to go beyond my reserves.

And then my husband has, you know, income coming into so we can always live off of that too. So I think it’s really perf personal preference and you know, what makes you sleep at night? And. Makes you feel comfortable? There’s no right or wrong. I mean, I guess I would say no reserves, no backup plan is wrong.

Gary: Yeah. Um, that, uh, having a heat lock in general, just like you said, Philippe is, that’s what makes that, uh, one of the more appealing things for me just to always have a hilar in place for reserves, for if anything happens or if I find a good deal, you know, I think that’s one of the reasons that he looks for so powerful.

So yeah, definitely.

Ashley: Okay. So we’re going to move on to our random questions. I’ll be have four questions for you today, but Philippe and I just pick off a list. They could be a real estate related or not. And sometimes we just think of random questions that aren’t even on the list. So the first one I have for you is what is one daily habit you’ve had?

Maybe it’s something you’ve always done, or maybe it’s something you do now, as you’ve learned about personal finances, personal growth, real estate investing.

Gary: So I’m a big planner. Jeez, uh, fleet Bay and another podcast, you said a really great quote by Mike Tyson. You know, like, you know, everybody has a plan until they get punched in their face.

That that’s such a good quote. And then you have like, I like planning so much because like Jocko, you guys remember Jocko on the BiggerPockets podcast and Navy seal. Of course. Yeah. So he’s great. You know, about extreme ownership and everything is essentially your fault, so that’s why you have to plan for it.

So that’s why I’m a big planner. I like to do just post-it notes. Everyday. When I go to work, I used to go to work really early, like at five o’clock in the morning. And before that though, working out, obviously I work at a gym, working out, getting the blood flowing. I think a Ben Franklin said something like early to bed, early to rise makes a man healthy, wealthy and wise.

So. Yeah, and it kind of reminds me of that movie 13 going on 30, uh, 40, 30 and thriving. I’m 30, by the way, sleep. I’m pretty sure you’re 32. And, uh, I think Ashley’s Ashley’s age is like guesstimate, but in one of them,

Felipe: in one of our episodes, she was, she claims to be 17. So we’re, we’re trying to get to figure it out.

Ashley: 1721, 29.

So

Felipe: my, you know, Gary, I’d like to know what piece of technology and I’ve, and I’ve asked this a couple of times and I think it’s so valuable. What piece of technology helps you run your real estate business right now?

Gary: Excel.

Yeah, I'm going to give it to that. You know, I have spreadsheets on both of my properties, so it helps me. I, I made them, so I know exactly all the numbers, all the metrics of everything and all the data points. And it, to me, it's what works for me. And I don't use any software or anything like that. You know, as far as property management for my broker, we use Buildium, it's really popular, but I don't think it gives you a good enough snapshot.

In my opinion, you know, I like a more like profit and losses type type thing. Whenever I’m looking, analyzing my properties. So I would say

Ashley: throwing up in the trashcan next to his desk.

Gary: Why, why is that?

Felipe: So I’ll give you, I’ll give you the answer. And this is probably the first time I’ve ever talked about this. This is why it stresses me out. I was a D student through high school. My college diploma should probably have two people’s names on it. I was, I was never good. And to me, an Excel sheet honestly brings back memories of tests and I have test anxiety.

Like I, that’s a real thing. And I have that, like, when I look at a test, no matter how good or how, whatever I am at it. It freaks me out and I can’t do it in an Excel sheet. Really reminds me of those kinds of things. Now I do have an Excel sheet for my properties. I’m not going to lie. Right. I mean, I got 50 plus tenants, so that’s how I run it, but it’s very plug and play.

Like my wife has made it very simple where I hit cash, paid rent cash, not paid, not, you know what I’m saying? So very simple. And I think Excel she’s, they’re powerful for that. But I think for me, it’s a mental block that I have to get over. I just

Gary: don’t like the accounting

Felipe: portion of my business. I, I just, I allow my wife to do that for me.

And I’m so grateful for her because I would be, you know, completely lost without it. So yeah. Excel, sheets, and age. Don’t

Gary: do well. Well, have you ever heard of the, uh, saying the ACE students worked for the B students? We have

Felipe: that book up there and that’s probably one of my favorites, the Robert Kiyosaki.

Why C students work or why a students work for C students and D students make six figures or something like that? And it talks, it talks about that. It’s really important to understand where that comes from, because once I read the book, I got it. And it was that CS students work really hard for that C.

Most of the time,

Gary: they would probably be F

Felipe: and D students, but they work really hard and they still make that see right. A students, it actually comes very simple for them to beat T to get those A’s. Now, some people might work hard and. And, and still, you know, thrive for that. A’s and B’s, but, but Kiyosaki is talking about that C student is working really hard for just that seat.

And that was me. I mean, I was studying day and night, day and night. And then for my teachers just to say, Oh, well, you just didn’t put enough time into it. And I was like, you actually have no idea how much time I put into studying for this, just to pass man, like seriously. And now I’ve, I’ve kind of shifted that passion of work ethic towards real estate, which has made me successful in real estate.

But I was that C student a hundred percent.

Gary: Okay. Yeah. And that’s, you know, I kind of think the education system is flawed in that sense. Like, I was basically on a ten-year plan for college. Right. I, uh, started, started going to college right off the bat, changed my mind a million times.

Ashley: A lot of people go to college for seven years.

Gary: Yeah. So, you know, next thing you know, I changed my mind a million times and 10 years later, I still don’t have a degree. So here we are. And that’s why I’m all about, you know, real estate investing overall. So, yeah,

Felipe: what’s interesting. Gary is I graduated college in three years. My bachelor’s degree in three years, not because I was smart, but because of me being naive.

So when you go to college, your guidance counselor gives you this like form to fill out of what classes you want to take. And it had seven slots. So I filled out all seven every semester for three years. And I didn’t know that you could only, you, you didn’t have to do 18 hours every semester. So I did 18 hours every semester, all through college and then some in summer and I just got up and then one day I took my, I went to my guidance counselor and was like, Hey, what’s what’s next?

And she was like, well, you graduate next semester. And I was like, Oh, Oh, okay. I just didn’t because I didn’t know. I didn’t got it. No one, no one told me it was, it was, it was ridiculous. I didn’t know.

Gary: You bought that for sure. I mean, that’s a hard task.

Felipe: I wasn’t, I was under there. Yeah. It’s crazy. Actually, if you want to take the next question.

Ashley: Sorry, Gary, what is a book recommendation? You can give it. Doesn’t have to be real estate investing. It can be anything you want.

Gary: So I would say a good book. I’ve already mentioned Simon Sinek on here, but. I think I’ll go with like the Gary Keller. One thing, I think that’s a great overall book that can be applied in almost every situation.

Ashley: What’s the biggest takeaway you took from that?

Gary: Focusing on the one thing too, that, you know, the whole domino effect, I think is really powerful as well. How a simple domino can knock over something 50, or it can knock over something 50% bigger in size. And I think that's really powerful when it comes to like scaling, you know, scaling your business, scaling your rentals, things like that.

And so that’s really one of the bigger things that I took away from that, you know, aside from the focusing on the one thing. Gary.

Felipe: Awesome. Awesome. You know, when I read the one thing, it w I had to read it twice.

Gary: Like the first time I did it

Felipe: fast, and then I was like, okay, that was really good. I need to read that again, but, but slow.

Right. So that I’m not like, kinda like freaking out and just super excited because that’s what I ended up doing. I never really like 80% of pages, but anyways, so I guess for the last question that I have for you, Gary, is, uh, I see that you’re drinking a ton of water.

Gary: You have a little parched. Good with my hands right now.

Felipe: You guys don’t have YouTube watching it on you do. Gary’s like drinking this like huge gallon. Okay.

Ashley: He’s also now my favorite Gasper quoting touting a night’s just saying,

Gary: Oh my God,

Felipe: what’s up with the water, Gary, talk to me,

Gary: you know, it’s easy. I used to be all about like water fountains, to be honest with you.

But after buying just gallons of water, it’s just so much easier. I would have to walk a long way to our water found in the gym in order to refill it, my little tiny water bottles. So that’s when I just started getting gallons of water and it lasts me like two days, to be honest.

Felipe: Is it, is it Jeff Bezos or the guy from Apple or who was, who was the gentleman that said he loves to hire lazy people for hard jobs because they are more efficient.

Gary: Uh, I don’t know,

Felipe: think it was one of those like super billionaires and I’m like, I don’t, I’m not saying Gary’s lazy, but I love, I love that your mind goes there because that’s probably how you’re going to it more

Ashley: time,

Felipe: more

Gary: time,

Ashley: because he’s not refilling his water bottle. That makes perfect sense.

Gary: Exactly.

Ashley: Yeah. Well, Gary, thank you so much for coming on the show with us. We

Gary: had a great

Ashley: time with you and loved hearing your story too. And we can’t wait to see where you go and get your next quadplex, uh, under contract. We’re excited for that. Why don’t you tell everyone where they can find out some more information with you, possibly connect with you?

Gary: Yeah. So Instagram at Gary Janica. And I have a YouTube channel. I’m just trying to start out a YouTube channel. I think Philippe you are too, but that one is simply Gary Janica as well. So just look up my name and you’ll find me and yeah, hopefully we can connect and maybe do some business together, things like that.

Ashley: Yeah, very cool. So I will add those to the show [email protected] forward slash working 36. Thank you everyone for joining us today. My name is Ashley at wealth from rentals and he’s Philippe at Philippe Mahea R E I.

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In This Episode We Cover:

  • How a need for extra income and an anti-authority attitude attracted Gary to real estate investing
  • Getting your real estate license to help your investing
  • Lessons from working in property management
  • Buying a duplex with an FHA loan
  • Taking action before you can talk yourself out of it
  • And SO much more!

Links from the Show

Rookie Deal

  • Listing Price: $250,000.00
  • Purchase Price: $238,000.00
  • Loan Type: Owner Occupied
  • Cashflow: Over 1,000 per month

Gary’s MVPs

  • His longtime friend Sammy who is a jack of all trades and helped him with a ton of repairs and renovations on his units to which his payment of choice is pizza and beer.
  • Member of the gym who shared the book about real estate investing: Bryan Labree

Books Mentioned in this Show:

Connect with Gary:

Ready to go take action? Every Wednesday, the Real Estate Rookie Podcast will arm you with tips, tools, and inspiration to help you launch your real estate investing career. Hosts Ashley Kehr and F...
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