BiggerPockets Podcast 064 with Josh Sterling Transcript
Link to show: BP Podcast 064: 50 Units in 5 Years while Working a Full Time Job with Josh Sterling
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Josh: What’s going on everybody? This is Josh Dorkin host of the BiggerPockets podcast. Here with my magical co-host Mr. Brandon Turner.
Brandon: Look at me magical. How are you doing?
Josh: You were kid who used to do magic aren’t you?
Brandon: I remember setting up this magic table in my bedroom and doing a whole magic show for my family and then like two months ago I went to Universal Studios in Florida and I bought a whole magic kit there that I’ve been waiting to do on a BiggerPockets video. I haven’t done it yet. Speaking of video I did actually work on video this morning that I will be editing later today for BiggerPockets so I’m pretty excited I got a new camera lenses and stuff.
Josh: I’m sure everybody cares.
Brandon: They do. You should check out my new video kit, I’m telling you.
Josh: What’s the new video, what are you working on?
Brandon: I did a video on the Pro upgrade. You should go check out the pro page everyone at BiggerPockets.com/pro.
Josh: Nice plug Brandon.
Brandon: I set that one up and hit it out of the park.
Josh: I’m a sucker. Well done. Today we’ve got an amazing show. We’ve got Josh Sterling is our guest and this guy is unbelievable. Really inspiring. He’s a real estate investor up in Detroit Michigan area. Josh is a former pilot currently air traffic controller and while working his full time job he’s a real estate investor amassing a portfolio in the last five years a 50 properties. In five years while working his full time job this guy has built up this incredible portfolio. For any of you guys who were thinking I’m too busy or it’s so hard to get that first one then the next one you really want to pay attention to this one all way trough. Josh got some really good advice we go into depth on a lot of really cool topics and hopefully you’ll stay tuned. With that said quickly I want to hit our Quick Tip. Today’s Quick Tip is we are in the midst of a big time redesign at BiggerPockets in the coming weeks we’re going to be relaunching this thing with really much sleeker design, a lot cleaner. Improving a lot of the functionality that may be little junky so to speak. Some of the problem areas we really focused our attention on.
Just wanted to give you heads up we got this thing coming soon, it’s going to look awesome and it works great and we’re super excited about it. Lastly, this is show 64 of the BiggerPockets podcast. You can follow the show notes at BiggerPockets.com/show64 and finally if you have not yet reviewed this show or left us feedback on iTunes we really ask that you do so. Please jump ion and leave us an honest review. We haven’t really asked you a lot lately to do that and we’re now averaging almost 22,000 listens a show. We’ve got like 6,000 reviews. Hopefully some of you guys who haven’t yet taken the time to do that could. It really helps us get more visibility, helps increase the listenership for the podcast so please go and do that. That all said I want to bring on to the show. Josh what’s going on man? Welcome to the show.
Josh Sterling: Thanks for having me it’s good to be here.
Brandon: Awesome. Good to have you. This is the first time we had a guest with the same name as my host here Josh.
Josh: And my caveman brain may not be able to fully function in talking to somebody with the same name.
Brandon: Josh Sterling we are glad to have you. You and I have actually known each other for a little while now. It’s been a year maybe, we met long time ago. You reached out to me and we started emailing back and forth and I’m excited to have you on the show today.
Josh Sterling: Great, thanks again. It’s great to be here.
Josh: Josh we talked before the show and you have 50 doors under your belt as of sometime in the next couple of days you’ll close that last deal – we’ll talk about it. You’ve been at this for five years and you’re been working full time job. Lot of less going on here. That awesome. How on earth do you go from this guy who knows nothing about real estate and five years later you’ve built such an incredible business?
Josh Sterling: I did everything growing up that you’re forced to do. Right out of high school I went right to college. Best college that I thought I could get into. Did well in school, graduated in top of my class, right into career I became airline pilot – thought I had it all figured out. Five years after that I was about 26-27 years old and I realized maybe the path I went down wasn’t really a right path. Everyone tells you to go to school, get a good job. I bought I condo right in there sometime in the peak of the market and looked back over it all and really wasn’t a right way to do it, I think. I started looking into other things to do. I had about every different idea for different businesses that I can start and really real estate investing was the only one that made real sense to me at the time.
Brandon: When was this? You’re young guy right now, you don’t look much older than 26-27.
Josh Sterling: I just turned 30 last year.
Josh: Welcome to the club baby.
Brandon: You old guys.
Josh Sterling: Not so good to be there.
Brandon: How did you actually get started then? What did the first deal look like or what was your interest in?
Josh Sterling: Our first deal was kind of accidental. I mentioned I bought a condo somewhere at the peak of the market probably the highest day ever for prices I think it was and I didn’t know it at the time but my now wife she had also bought a property I think about the day before I did at the peak of the market.
Josh: They met at the closing table it was a romance at the escrow.
Josh Sterling: We met in the Las Vegas, that’s a whole another story there. She ended up moving to my place in Florida, I was traveling around with the airline so we rented out her first mistake property if you will. Little bit negative cash flow but made it work. That wasn’t realty a true targeted investment but that’s what got us into it. I remember the day we listed it. Listed it for rent and we went out bawling I came back I had 17 missed calls on my phone. I figured there might be something to that. That’s what got us into that.
Brandon: Do you recommend people to start that way? Looking back do you recommend people turn in their home into rental?
Josh Sterling: Not necessarily. I think that was actually hardest way to do it mainly because I know she was emotionally attacked, we still have it as a rental today. She has a little bit attachment to that home and actually been in her family for 30 years. If any kind of damage was done even small monetary fix its still emotionally it’s tough for her. Either way that what got us into it and then it was just a matter of how do we actually turn this into something scalable and some kind of business here.
Josh: You make a really good point there on the emotional side. I think that’s probably one of the most important things that the investor needs to learn is to separate emotion from business. I think that comes I when you’re acquiring deals it comes in when you’re negotiating on the sale deal, it comes in when you’re fixing them up. I think that’s probably where a lot of new investors really mess up. They get tied in, drawn in, they fall in love with the place and they want to tweak it and fix it so it’s just perfect. Maybe you’re over fixing it for your tenants. Maybe you put too much trim for flipping it or maybe you just can’t let it go when it starts going downhill or its negative cash flow because you fell in love with the property.
Josh Sterling: Absolutely.
Brandon: I’ve been doing this for what, seven years now and I still get emotional, attached or involved with everything. It’s really a bad problem to have. If I have to do an eviction – eviction should just be pretty simple thing, my attorney will take care of it. But it’s not. I still get stressed and knot in my stomach and I’m all like ticked off at tenant.
Josh: It’s because you’re a nice guy Brandon.
Josh Sterling: As far as the rehabs go I think that there is a fine line between over rehabbing or being a slum lord. I definitely air on the over rehabbing side. We’ll put 25,000 on remodels on these rentals and more often than not I get people that invest say “You’re really overdoing it.” Emotionally I guess you could say I take a little pride at the properties. I feel if I would live in it myself then I want to have it as a rental. I like the pride of listing a unit and have ten people fight over renting it. In a way I guess the emotional aspect can’t be good fort you.
Josh: Are you over rehabbing in you’re putting a granite where you can just put some Formica or? I don’t know if you listened to our show with Darren Sager he’s tenant proofing it. He’s over rehabbing in that he’s putting better materials that are going to survive longer.
Josh Sterling: A little bit of both. I will for example refurnish hardwood floor which cost me at touch me upfront but again that’s kind of tenant proofing because carpet gets destroyed. On a granite note versus Formica there’s certain layouts of kitchens where it’s so small and there so many different configurations of counter tops that it might only cost me extra three or $400 to put granite in there then I’ll go granite. Sometimes I’ll do that, that’s way above market even for a flip here but I’ll tell you what it did really help I think attract good quality tenants who want to stay for a while.
Josh: You’re in what market, just so we know?
Josh Sterling: We’re not too far from Detroit. My wife works downtown Detroit – we’re 20 minute drive from downtown Detroit but it’s a world away really. I wouldn’t touch Detroit.
Brandon: Lets go back I guess a little bit to your first deal was that accidental rental which you had negative cash flow but making it work. I’m doing it as well on one of mine. What happened next? How did you actually jump into investing into real estate?
Josh Sterling: I think the light just went off when we realized that demand for that one house that we had. We thought it we had more of these could really turn into something here. That was January that we rented that out by September of that year it took us to come up with the funds to purchase an actually intentional rental. What we hadn’t really set anything as far as business entity. We really didn’t know what we were doing to be honest with you. I remember I didn’t know anything about fixing up houses I didn’t know anything about land lording or anything.
We find this house, it’s basically turnkey which really meant it was a lipstick on a pig remodel but either way it was ready to rent. We find this house, actually offered it for sale on land contract but I was so naive I didn’t even know what a land contract was so we just paid cash for it – we saved enough for us to buy it in the nine months there. Looking back now I could have bought this thing on land contract and it would have been a better deal. Anyway, we buy this house.
Josh: How much did you pay?
Josh Sterling: $40,000. That was probably a little bight high too but again at the time it worked for us. I remember the first time we listed it the tenant who’s still with us today she calls up and she’s asking questions about the house and she asked if it had central air. I go, I don’t know, what’s that? But I’m not from Michigan I’m for California we all have central air everywhere I never even heard of that. I didn’t know first thing about rentals and it worked. That just shows you that it really anybody can do this.
Brandon: That’s cool.
Josh: You buy this first unit, you pay 40,000. How much money did you put up fixing it or you just slapped a little more lipstick on the pig?
Josh Sterling: They marketed it as turnkey, I think I put $50 into running some exterior cocking. I quickly realized that it wasn’t a very good remodel and a better business moto would be to buy these bank owned homes that needed work and I could do a better remodel for cheaper and that’s what we started doing from that point forward.
Josh: You ended up in this property, it wasn’t in great shape. You put this tenant in and you said you still have this person there today. Have you done any work on the unit to get it fixed it up or she’s been pretty happy?
Josh Sterling: Besides your routine maintenance here and there pretty much as the day we bought it.
Josh: And no complaints, no problems, no issues?
Josh Sterling: You have your occasional furnace problem here or your drain problem there but yeah just no upgrades really.
Josh: Which kind of goes to show you that you really need to market to the tenant that’s available. In this particular market where you’ve got this particular property the tenant didn’t really want or need anything else, right?
Josh Sterling: Right.
Josh: Why go ahead and spend extra ten or $20,000 or five, whatever, to fix it up when you didn’t necessarily need to? Presumably you’re not a slumlord in this property. Presumably the property is at pretty decent standards.
Josh Sterling: I shouldn’t downplay it. It is a pretty nice property especially aesthetically, it’s pretty nice. Now that I’ve done more of these I realize that for that amount of money in purchase and rehab we could do a lot better remodel not only quality wise as far as structure but as far as aesthetics also.
Brandon: Is that been basically your strategy – buy cheap houses, fix them up and then refinance them or something?
Josh Sterling: At first nobody would give me a loan for anything because I made hardly any money at my old job and market had just tanked so banks we’re not touching mortgages really. We bought up to our firth house we had to buy either cash or 0% credit cards. Talking at the time 25 to 30,000 houses. Nobody would give us a loan, we we’re tie and low and there was no chance of that. Great credit but I guess the income or the market we’re in people would not lend.
Brandon: You used a credit cards to buy properties?
Josh Sterling: What we used to do, I’m not talking cash advance 20%, there’s actually some really balanced transfer offers that you can get. If you have 20-$25,000 limit or we would actually get few cards with 7-8-$10,000 limits lump them all together and you get $30,000 of cash of off those and essentially it’s the fee you may pay might be 4% but over a year that’s a pretty good rate. You just got to be disciplined to pay those off which we were able to do.
Brandon: You we’re buying them with 0% interest and then just paying them off over 12 months?
Josh Sterling: As quick as we could. We we’re dumping anything from our job income into it, all the cash flow from the rental, whatever we would find in the cupboards - whatever we could do.
Josh: Virtually hard money loan from the Credit Card Company?
Josh Sterling: Essentially, yeah. With a risk but looking back at the time I didn’t have a lot to lose. I had basically graduated from the most expensive aviation school probably in a world. I had all this student loan debt I had upside down house, I’m thinking after trying everything I was supposed to do let’s try something different.
Josh: Yeah, but you were a pilot. Pilots walk around the girls come flocking. Oh wait that was 1980.
Josh Sterling: Now all they want to see is that paycheck.
Josh: That’s an industry we could do a whole show on but this is a real estate show so we’re not going talk about that. What would your recommendation be – I’m personally staunchly against using credit cards for this kind of thing, that’s just me. It is what it is for me. Brandon has used it, he tends to be more pro, obviously you used it was a circumstance where your downside wasn’t necessarily there in your mind. What would you tell new investor? Do you think that they should go ahead and use a credit card or would that be last line of defense?
Josh Sterling: I think it’s definitely not your top strategy there but the way we did it was really to accelerate the rate that we could grow. We dint have a lot of options but I think that It should be your bag of tricks there but definitely not your top priority.
Brandon: That makes sense. Obviously the cash advance credit card hasn’t given you 50 units. What happened next after these few credit card deals?
Josh Sterling: We had essentially four or five houses free and clear at that point and I still couldn’t get a bank that would loan us money. I realized at that point mostly through getting on the BiggerPockets and talking to people that you can’t go to the Bank of America, the Case, the National informing lenders and get mortgages especially for these $30,000 house that at the time I was buying. I find out trough networking and working with people in the area that what you need is a portfolio lender.
Josh: What is a portfolio lender?
Josh Sterling: A portfolio lender is usually a small bank or a credit union that is going to write a loan and keep it on their own books. Now I know I need this portfolio lender. I go out on the internet and find the list of all banks that are potential portfolio lenders in Michigan and again I got that referenced to from someone on BiggerPockets I can’t remember exactly what it was but if you google portfolio lenders you’ll find this. I had a list of about 50 banks in my area and I set down on a phone and I started calling them. Literally one by one I called 50 different banks and it was like prom night – I got 48 noes.
Josh: It was that bad?
Josh Sterling: There were two banks that would actually talk to me that said “We might be able to work something out.” I went ahead and schedule appointments with both of those and one of those we ended up putting the deal together. The guy said “You have four free and clear properties, titles together and a blanket loan and loan you money on a conservative loan for the value.” We’re talking I was maybe $40,000 on average all in on each of those and that’s purchase plus rehab costs and they would loan be 60% loan to value on that first loan against those. I signed up getting $100,000 blanket loan from them which to me was huge because I’ve been using 0% cards up to that point.
Brandon: That’s cool. Portfolio lender came in and saved the day which is awesome. I kind of found the same thing with portfolio lenders in my area. The few of my properties that I did that. What I think it’s interesting is that you said you talked to 50 different portfolio lenders. I had a guy the other day on the BiggerPockets send me PM and he said “How do I find a portfolio lender? I can’t find any around here. I talked to a few banks.” I said “Grab a phonebook, call every single solitary bank in the phonebook, it might be 20 or 30 of them, just ask them if they do any portfolio loans.”
Josh Sterling: Knowing now what I know and what I’m trying to do id probably have a few more banks that would have worked with me but I didn’t even know what I was talking about really. I’m surprised this guy worked with us I’m still working with him to this day. We probably did five six loans with the guy.
Brandon: One of the nice things when you find someone that will work with you. What I always find in lending and I don’t know if you guys will agree with this but I always find that the banker, I was a banker for a very short while in my life I worked in a bank.
Josh: Wait, wait, wait, hold on. Stop. You were what?
Brandon: I was a personal banker.
Josh: Somebody trusted you at bank?
Josh Sterling: Did you mop the floors there?
Josh: I was going to say for a janitor.
Brandon: Funny story about that – this is five years ago. I worked at National Bank in lobby doing home equity line of credit and those kind of things. One day they asked me to paint their upstairs because they knew I know how to paint. Paint the breakroom. I did and that’s the day I turned in my notice to quit because I thought this is way better than working at a bank.
What I always find with lenders its every bank kind of has the same rules that they all play out off. Even though they say they don’t everyone kind of has the same rules. It’s the banker that can push the loan trough versus a 100 bankers who won’t do it because you’re not creative. If you find a good lender a god banker that would actually work hard to push your loans trough they could do amazing things. There’s my quick tip for the day.
Josh: Josh why did that bank say yes when everyone said no?
Josh Sterling: Like Brandon said I think it was the banker. The guy that we started working with there. The whole commercial lending department was this one guy and he must have thought that we we’re doing good work. Like I said he pushed the loan trough and it worked. We did another one with him and worked to the point now that a new person has taken over three or four loans ago and this guy has come so close with us that he sent me a picture of newborn baby from the emergency room.
Josh: Nice. How did you present to this guy? Did you have a package? Did you have some kind of kit that you brought with you to him? What did that look like the whole “Let me go in, let me sit down with you.” What did you bring?
Josh Sterling: I put together I believe on initial phone call he had emailed me some documentation I put together personal financial statement showing roughly what we look like financially and I put together a package of each of our properties at that time. I think it was five or so properties. Pictures I put together to show we were improving these things nicely, leases to show what they were rented for, how long the lease terms were and I really didn’t know what I was asking this guy for he’s the one who came up with the idea of we can draw blanket loan as a cash out refi. I was originally looking for something where I could go in and find purchase money for the houses.
Josh: Is that unusual to get a blanket loan with a cash refi? You can’t get that in a traditional bank can you?
Josh Sterling: I can’t get anything in traditional bank. Even to this day. I basically sworn off traditional banks for the most part. For me that’s what worked I really go back to the same credit union every time. There are couple of other credit unions that I’ve run across with different dealings that had mentioned they could do similar work. I know for our area it’s definitely possible. We first started doing these blanket loan was unheard of bank in 2009 2010 you were thinking no one would do it. It was a nice to find these people.
Brandon: It comes down to the banker. If the other 49 bankers had thought “I wonder if our underwriters would go for this?” that’s what sets apart amazing banker from the one who’s not just things outside of box and says “I wander if we can get our underwriters to do this?” I love that. I reminds me a lot of what Jimmy Moncrief said back few shows ago, he’s bank underwriter. He was saying you’ve got to convince them that it’s a good thing. The fact that you brought in this information this helps so much because so many people don’t. They just come in and they just dump a box of stuff and maybe you did on your first ones too. I know I did. So many people do that and if you can stand out, go the extra mile, do a little bit extra work you’re going to get incredible results. That’s my philosophy in life.
What happened next after? What kind of houses we’re there? Are they all dumpy like needed to be burned to the ground houses?
Josh Sterling: I really do focus on a really small area two mile radius would encompass everything we own it’s within of half a mile of where we easily live still to this day. Got to know are really well. They’re really standard cookie cutter houses they built the entire city in the year of 1950 to 1952. All the same they all needed about average for remodel about 17,000. Between 17 and 22,000.
Josh: What are they?
Josh Sterling: They are all mostly bungalows three-one bungalows with the basement. Some of them with a garage you can get it but that is pretty standard for the area you don’t really see many three-twos.
Josh: Are those finished basements or unfinished?
Josh Sterling: If they’re finished I usually like to gut them unless it’s a really nice finished basement and I actually tend to go to root and gut it and just make it nice and clean. We paint the ceilings the floors the walls, its ways less hassle. If you have a finished basement and you have any type of water issue you’re gutting the thing up.
Brandon: That’s good tip. You’re going in, you’re buying these houses that are in decent neighborhoods, you live there.
Josh Sterling: I think so. I live in that area, same neighborhood right now.
Brandon: Typically what are you buying them for? You said you put in around 20,000 and then what are you renting them for?
Josh Sterling: At a good point of market we we’re buying them for 25 to 30,000 but now that some houses are going to cost me, I just bought one couple weeks ago that was 40,000 - identical house from the ones that I was buying. I’m putting between 17 and 20 into them and pretty much every one of those will rent for at least a 1,000 a moth right now. If it doesn’t have a garage it might be 975 and if you have a little bit bigger addition on it you can get it to 1075.
Brandon: Those are good numbers. Those are just about 2% rule. Those are good solid numbers.
Josh Sterling: For a while it was pretty easy to hit the 2% rule but with the market increasing not quite as easy anymore.
Josh: Let’s really quickly cover for those people who don’t know 2% rules says what?
Josh Sterling: I actually do it a little bit backwards. I like to do quickly 50 times as rents. If it rents for $1,000 a month I want to be all in for $50,000.
Brandon: It’s nice to think of the 2% rule that way. Are you managing them yourself, do you have property management?
Josh Sterling: I did get out of doing a rehab, I did about seven or so first rehabs on my own and I actually with that first blanket loan we bought about four properties within 30 days of each other. I realized that I can’t do these rehabs anymore. I got out of that work but I still do all the management work. Basically it’s me who gets hired out and I receive all phone calls I still do collection issues when they come up, especially the management of the tenants.
Josh: You’re working a full time job. How on earth are you managing a property taking phone calls and dealing with tenants and everything else while working a full time job?
Josh Sterling: Really especially on the houses, I talked about with Brandon a little bit earlier, we have an apartment building also 24 units. That’s a good chunk of those units. That takes quite a bit of work. I think that’s probably 80-90% of my work right now especially with a turnaround on that but I don’t think on my 26 houses that I spend more than 5 hours a month on that.
Brandon: I’m probably the same way. I said something similar to Ben Leybovich view weeks ago on that podcast we did with him where I feel that my house don’t take hardly any work to manage its just those multi-family. Multi-family takes a lot more work to manage.
Josh Sterling: I bought my own unit at the apartment building because I’m out there so much.
Josh: Let’s talk about that. I think there’s an important distinction and I think it has to do with how people look at the property that they rent. My theory is you look at the house as your own place. This is my place, there’s four walls you don’t have people on adjoin walls where’s in apartment you’re stuck in a building with other people and you don’t have as much pride in ownership or renter ship. Would you guys agree that’s kind of theory behind that?
Josh Sterling: I actually thing I comes back down to amount of rehab you’ve done to it and so even if I’m over rehabbing things a little bit the quality of tenants are doctors and lawyers. We have tenants that are I think extremely high quality and it just improves whole bottom line plus people tend not to move which creates a lot of work and costs a lot of money every time you have a vacancy. I think on vacancy as an emergency situation.
Josh: You think people aren’t moving as much in houses as they are in apartments and I would agree.
Josh Sterling: Not only houses but 1950 rehab house. My logic is someone needs to rent and they can’t find a cheaper houses or nicer house they’re not going to move. If you price your property right at that or slightly below market and it gets nicer than everything else we ran above 99% occupancy in the last two years in our houses.
Josh: You got to look of the cost to move. The cost to move isn’t cheap so you have to figure out if you’re going to save couple of bucks to go live in a new place. It’s probably not worth it.
Brandon: I say that single family houses are easier to manage in my opinion and multi-families are nice because everything is right there. Single families just requires less work. The thing nobody talks about is amount of work at least for me that goes into insurance. Insurance is hands down the biggest time I spend my fife spend. We have an insurance fire take care of every week maybe two a week with all of our properties and that’s like half of my wife’s day spent dealing with insurance companies. Things like “Your insurance has been canceled” “You don’t have adequate insurance” then we have to send them a letter saying “Yes we do.”
Josh: That’s because you’re a deadbeat Brandon.
Brandon: There’s so many stupid rules with insurance when you have 50 properties. If they’re 50 single family houses you get 50 letters a year from insurance. If you have one multi-family you get one letter. For that reason alone I take multi-family.
Josh Sterling: It’s just like B2R Finance are trying to do for the financing side of it there really is no one for insurance that’s made to handle over ten properties they really start to shut you down. I had a similar insurance firebug a year ago where I find out two weeks’ notice that the rates are essentially going to double. I wish I had more notice on it but I was able to scramble and find somebody who would cover them but it’s just matter of time before same thing happens again.
Josh: What was insurance cost on a $60,000 house in Detroit?
Josh Sterling: Not Detroit.
Josh: Detroit adjacent.
Josh Sterling: I insure them all for cash value. If you go to State Farm or anybody of the table they’re going to want to insure for replacement cost. Replacement coast for one of these are 180 to $200,000 so you’re paying expensive rates. I insure for cash value. Usually I’ll do it for sixty because I figure it’s not emotional. I’m into this house for 60 or less if it burned to the ground I would just go buy another one which is the same income. That’s my logic and I’m actually with my insurance issue I had last year changing companies actually lowered my rates. I’m paying anywhere between $330 and $360 per house per year.
Josh: Do you follow a similar premise there Brandon on your properties?
Brandon: I do exact same thing- cash value. Generally. Some on my partnerships that I worked with people the partner feels a little uncomfortable with that. They’re used to homeowner stuff so they want full coverage or replacement value so there’s couple that I give in on that. There are actually couple insurance companies where I got cheaper rates by having replacement value. It’s uncommon but I’ve seen that a couple of times.
Josh: You’ve got these properties, these are single family homes - What are the tenants responsible for? As somebody who wants to buy a single family rental property how do I know what do I take care of? Do I buy a lawn service or do they do the lawn? Do I get tree trimming or do they trim tree? What do you cover, what do they responsible for taking care of?
Josh Sterling: Basically we try to put it for tenants are responsible for essentially everything. I think that’s the benefit of the apartment building in a way. Definitely lawn service, tree trimming. We might handle tree trimming because that’s more of a random occurrence but anything routine – lawn service we even put into our leases they’re responsible for pest control. If you have a pest issue will cover it maybe upfront first month but if they’ve been there three years and now they have mice that’s their fault. Definitely all utilities. Gas, electric and in Michigan water can be leaned to the property if not paid so we got all the water bills, our office we pay them all ourselves and then we bill the tenants. That’s actually my biggest workload with the single families – sending out water bills every month.
Brandon: We do the same thing in one of our towns refuses to let tenants pay water bills because they get stiffed so many times so they require owners to pay them. I have to pay and I bill all the tenants and then they don’t pay and then I have to bill them again and bug them and do I evict them over not paying $80 water bill?
Brandon: You do but yeah. That is such an annoyance to my business. Everybody in that town deals with that.
Josh: Get out of town, find another town.
Brandon: I’ve been moving a lot of my investing more towards where I live which is Montesano instead of Hoquiam which is that town.
Josh: On these things the tenants are responsible for, say lawn, do you require them to use certain vendor? How do you manage that?
Josh Sterling: I feel if you try to micromanage every little thing is just a recipe for disaster. I’m a control freak don’t get me wrong but if you try to control every aspect of what a tenant does… My first house that rehab that we bought ready to rent her kids had marked on the baseboards, had drawn on the wall essentially before she even signed the lease. I almost had a nervous breakdown there but you have to let this stuff go a little bit. I told the tenants “If you don’t cut your lawn the city will come and cut it for you for $250 each time so that’s up to you and you’ll get the ticket.” That seems to work.
Brandon: Before this show you told me you’ve did one flip and I wanted to ask you about that. What was that, why did you do one flip and why only one flip? Why are you not a flipper?
Josh Sterling: I’ve always wanted to flip, why would you not want to make bunch of money real quick? Last year we had a line of credit setup where they had a requirement of a paid down every 12 months so it’s perfect for flipping. We went out, found a good house to flip, did a rehab, standard rehab like we do on our remodels, we bought the house for 50, we were into it for 17,000 exactly I think I was in $100 of my budget by the stroke of luck I sold for 105 with multiple offers on the first day on market. We ended up netting after all commissions and whatnot, my wife is an agent now also that helps, we had netting of 27,000 on it. For working on place for three months I went out there 20 times. It was great. Still even with that as we went to list it I actually tried to keep it as a rental. My wife said “No, we said we’re going to flip this one and were going to flip it.” I love the passive income. The flip was great but I love that passive - I’m still always focused going on that.
Josh: How are you finding this deals? You mentioned some of them were RIO’s, is that all you’re doing or you’re doing kind of marketing?
Josh Sterling: I haven’t been doing any marketing it’s basically RIOs up until this point it’s been I believe almost entirely of the MLS with the exception of our apartment building. That got real competitive about a year and a half ago now so my wife got her license so we not have MLS access and that’s what we do and especially when the funds come around when it’s time to buy new property which hopefully happens often we get on the MLS and we go on a shopping spree. We’ll come up with 20 or so listings and go look at all of them in a day. Give couple of offers and get what we can.
Josh: It’s like going out to Sax. Let me go buy some shoes. No I want to buy houses.
Brandon: What are you doing today for financing house? You said you were closing on one this week, how are you managing that?
Josh Sterling: Still trough the commercial blanket loans like I’ve been doing. That definably our main supply of funds and that’s been great, tis easier to do and the terms are good and it’s awesome.
Brandon: Can you explain again kind of big picture how that works? I got the earlier you said you got the first four under blanket but how does it work now?
Josh Sterling: That’s essentially just the rinse and repeat. We’ll start with that fist one and then we’ll have four five free properties, we’ll go to the lender with those. Now they want to do appraisals because we have so many loans with them so it costs me few hundred bucks per property but they’ll do bunch of appraisals and then they will loan me 75% of the appraised value. Usually four or five at the time and the loans have gone up. The last one we did was $260,000 for that. It’s enough that we can go out and spend that to buy more properties. Rinse and repeat. I always wanted to tie up some of this record low interest rate money right now. I always wanted to tie up some 30 year financing at 5% interest but even with much better income at my job now and all this renal income I will still get turned down by banks mainly because we don’t fit into that conventional mold – I’m sure you don’t either Brandon. You send them your income statement, you have 20 somewhat properties on there they basically throw it in the trash I feel like it. We could never get anywhere.
Josh: You guys are weird.
Josh Sterling: In December this past year we closed our fist loan with conventional financing ever that was intended for rental we did a Home Path. They have 10% mortgages on Home Path and it was excellent. There was no appraisal required and no upfront out of pocket cost, 10% down, we bought a little bit more expensive house because of that and it worked great. I’m in a process of closing in on another one this week.
Josh: How does that work? Explain the Home Path mortgage can I go and find any property to buy and go to Home Path and get mortgage with a 10% down or is this a special property?
Josh Sterling: If you’re out looking you actually come across a lot more than you would think at least in this area but they’ll be homes that are advertised as Fannie Mae Home Paths. There’s either Home Path or Home Path renovation. Home Path loans you can do 10% down on that up to four mortgages. The renovation mortgages they’ll actually give you money towards rehab costs. I haven’t done that because I hear it’s pretty cumbersome as far as getting draws for contractors but you then find a property that’s Home Path and go to your lender. We’re using one out of California right now so they’re all over the place. You have a Home Path qualified property and they do a loan back through Home Path at 10% down.
Josh: Can any lender finance the loan and they would just need to use Fannie Mae program or would you have to go to google and look for lender who does Home Path mortgages?
Josh Sterling: Most lenders I believe do it but you have to find a lender that will do Home Path mortgages and I actually had to specify one that would do on a 10% down because still with all the financing dot frank and all the rules that have changed over the years there’s still lenders that think its 20% down minimum or 25 for investment properties. I specifically wanted 10% Home Path loan.
Josh: You can actually get a 10% Home Path loan on a property intended to be an investment property?
Josh Sterling: Yeah. I couldn’t believe it either but I did in fact in December and I’m doing it now too.
Josh: That’s fantastic.
Brandon: I’ve never actually done a Home Path before I almost bought one once but we ended up just using conventional financing trough whatever reason I don’t remember why.
Josh Sterling: It goes back to what I didn’t know. I probably bought 15 Home Path properties in the last four years that I didn’t know I could have done this all this time.
Brandon: Let’s move on to a topic that I am a big fan of and we touched on that a little bit earlier and that is apartment complex you bought.
Brandon: I love talking apartment complexes.
Josh Sterling: Is that all you guys talk about?
Brandon: You bought a apartment complex, you said it was 24 units. How did that come about can you tell us a story how you come about it and financed it?
Josh Sterling: It’s actually a good story. Just like most people I always wanted to get in to the apartment complexes mainly because of the scale of it. I see myself one day doing units or complex’s that are couple hundred unit range so we did come across a broker through a mutual friend and got out and started to look at some buildings in the 20 to 40 unit range. Looked at a couple and this one was one of them – this was two years ago. We went ahead and wrote a letter of intent which is basically an offer for our apartment building and we started negotiating with the sellers. They at that point decided that the market was turning around and they would be able to get this building back up standard and they decided not to sell it.
Fast forward to this past summer which had been two years lapse there and the original owners had actually looked up my wife on Facebook, he must have known us we we’re in some high school or college or something and said “Are you guys still interested in buying that apartment complex that you looked at two years ago?” –Sure if the price is right. We went out, looked at it, started the process over again and they had basically run the thing into the ground. Back in 2006 the old owners bought the property for $900,000 and we ended settling up for 514 for it so they had lost half its value. As you know multi family is all based on net operating. It was 45% occupancy and ton of deferred maintenance – it was a mess.
Brandon: So you bought it at 45% occupancy and what were the empty units like? Were they all okay or did they need a lot of work done?
Josh Sterling: I over rehab. I really do. To me it wasn’t even close to cutting it. Some of them were okay as far as clean and basic but I wanted to see a higher quality unit for higher quality tenant so that’s what we started doing we started rehabbing the vacant unites and we were putting 8 to $10,000 for we had to do a kitchen, a bathroom, all new flooring, all new doors, light fixtures. It’s a lot of money to put into apartment unit but the way I justified was if I put $10,000 into it I can raise a rent $100 a month. I proved that times and times again because these things rent pretty quick once they’re rehab. That adds $1,200 a year to the net operating income. If you add a ten that is $12,000. If therefore in theory I got my money back already as soon as I can show it and consistently rent it.
Josh: Where is it today – what kind of vacancy rate do you have now?
Josh Sterling: Right now we are at 92% occupancy. We just bought it, we closed on the Halloween last year. I’m pretty proud with that. Five months or so of the year to rent and we basically almost got this thing full. The two that we don’t have rented are ones we are finishing rehabs on right now.
Josh: You spend 514, bought at 45% occupancy at a 10 cap where we are today? What’s that thing worth?
Josh Sterling: I think we actually added close to $400,000 in value. I think it back into that $900,000 range when everything rented because I increased some of these rents significantly.
Josh: What did you put into it?
Josh Sterling: I’ve got something between 85 and a 100 into it. Mostly I did six units so far at about 10,000 per unit give or take, I did a few furnaces that upped that. We did little bit of exterior work which was one of the first couple of things we did we did some new sighting just to show that there was new life in the property. I actually have a waiting list for people to get into it right now because we’re trying to finish these two last units. Really going well. I think old owners just weren’t giving it attention.
Josh: For those people listening who don’t understand commercial that well yet that’s the power of the multiplier, right?
Josh Sterling: I still don’t understand commercial that well.
Josh: You’re there man. That really is the power by improving, by filling vacancies, by raising rents by getting supplemental income you’re increasing value of this property you can probably go get refinance that thing, get some cash out and use that to buy some more properties.
Josh Sterling: That’s the plan and that goes back to why I really don’t like to flip as much. I know I have to follow J Scott on this which is terrible but why I don’t like to flip you’ve got all these aspect on buy and hold, you’ve got your cash flow, you’ve got potential appreciation, you’ve got your depreciation for tax purposes which I find help quite a bit this year, you got principle paid out from tenants paying the rent every month and you pay your mortgage and then ill steal this from Jason Hartman it’s another podcast out there but he calls it inflation induced debt destruction. What other asset you can buy at today’s prices and then pay it off in 30 years? Whatever inflation has done to that its going at least to double the value of the money there. For all those reasons compounded long term that’s the way to go to build wealth.
Brandon: I agree.
Josh: Do you feel like you’re in over your head in this property? It sounds like everything is going well you got couple units that you’re fixing up and you’re going to get these filled, you’ll be at 100% or somewhere there about. Should other investors consider taking on similar type projects? Knowing what you know now if you could go back would you have bought a multi earlier and at what point do you think you would have been qualified?
Josh Sterling: The day we closed on this apartment building I went out there with my wife right after the closing and were just trying to wrap our heads around what we’re going to do. At the closing old owners handed us a freezer sized zip lock bag of keys just loose keys and said “Here you go!”
Brandon: That’s exactly what happened for me as well.
Josh Sterling: I didn’t know what opened the washrooms what opened the doors I had units I couldn’t even get into it was a total mess. I was way over my head. I have been on most things I ever done I am more ready, aim, fire kind of guy, I think that’s one of the keys that actually make it is having the balls to try it.
Brandon: I agree.
Josh: J Scott – he doesn’t know anybody who’s done just one flip.
Brandon: People do one - they do lots or they’re going to do lots. It’s all about taking action.
Do you recommend to other people to get into buildings like that, that big of a project? Are you an advocate of that?
Josh Sterling: I’m glad we got into it, I definitely learned a ton it’s been a really steep learning curve I think having a single family background has been huge. Right off the bat probably not the best thing to get into because it’s going to eat your lunch. The tenants are much more management intensive type of group you’re working with. You’re dealing with stuff you don’t deal on single families for example noise complaints, window wide open with the heat blasting, stuff like that. These are touchy subjects you have to deal with all day long and I dint have to do that with houses. It’s tough but in the end I think it’s going to end up being a worthwhile endeavor we did here and also banks like to loan on these quite a bit more from what I’m told. I know my commercial guy is real excited about refinancing this.
Josh: How did you finance this particular property?
Josh Sterling: This one was run so far into the ground that the owners had to sell it on land contract. There was no bank that was going to finance this thing at 45% occupancy with all that differed maintenance they had and whatnot. Again back to blanket loan. We had just closed a larger blanket loan and we ended up putting a $120,000 down on it, finance this 394,000 balance on land contract, they gave us a five year balloon on that I figured that should be more than enough time to get this thing turned around and we took over.
Brandon: You know what’s interesting whenever we talk like this how similar you and I are. Even the numbers on our buildings you have a 24 unit I have a 24 unit. I bought mine at 45% occupancy.
Josh: I’ve got to go guys have a good time. You guys can keep holding hands. What is this love fest?
Brandon: It’s so similar. Every bit of the numbers you are saying are almost identical to what mine was. The other day you were saying your lenders were excited to refinance it I had a hour long talk with a commercial lender in my town and he’s super excited were like brainstorming all these cool ideas and he was total into it. We were both feeding up each other on cool stuff to do and that kind of goes back that you were talking about earlier finding that guy you can do that with. It’s amazing.
Josh Sterling: It’s nice. On my last blanket loan he actually came to me and said “We are ready for another one if you guys are.” I said “I think we are.”
Josh: Josh how do you find dependable labor? You’ve got all these units going on surely you have a handyman and contractor. How did you go about finding these guys I think this is probably one of the hardest things for investors to do?
Josh Sterling: It’s still tough for me right now. As far as my handyman work I really got one guy I use across everything. Step number one is once I make sure that once I got a good guy I took care of him. I paid him fair, I paid him on time I treated him well, I gave him as much work as I could so he wants to work for us. Essentially we’ve got it systematized now to where ill either send him request in our property management software or quick text message, he’ll go out call my tenants, schedule the repairs, everything. As soon as I get that maintenance call I’m hands off, that’s been nice. As far as contractors on these rehabs – same thing. I’ve got the same crew I’ve been using for several years, I had used additional crews when we had a high demand for it but my main crew I try to take care of them on time, I try to pay them fair and keep work coming for them, trying to keep projects lined up for them.
Brandon: I talked on the podcast people listen to the show will know that I said this – we struggle to find good dependable contractors all the time so lately me and my wife have taken this really proactive approach to we are going to find a ton of a really good contractors right now and every day we put ads on craigslist where we’re renewing them all the time, were interviewing people. We’ve got a list now probably dozen that were trying out. Every day we try a new one because it seems there is a new project every day that were dealing with.
Josh Sterling: That was my holdup before because in my experience you don’t look for a contractor until you actually have a project and there is this crunch where you go “Okay I’ll get best I can get”
Brandon: That’s exactly the problem everyone is reactive not proactive.
Josh Sterling: I like that idea I should try that myself.
Brandon: You should try it its working quite well. We just require in the ad they have to be licensed and bonded that way we don’t have to deal with people calling saying “I’ll work for a pack of cigarettes”
You mentioned your property management software – what are you using right now to manage your stuff?
Josh Sterling: I started with purchase of that apartment building we started with Buildium and I actually rolled all the houses onto that as of first of this year.
Josh: You’re probably pretty happy with that.
Josh Sterling: At first it was really tough to get used to mainly the accounting side of it because I came from just doing my own Excel spreadsheets and I’m kind of a spreadsheet junky I feel like “What gets measured gets managed” so I had spreadsheets for everything and it was frustrating that Buildium didn’t have the same spreadsheets that I had and obviously the same methods that I used so learning their way was hard but now I love the thing.
Josh: You had mentioned that you are a strong believer in living below your means in our pre-interview notes we’ve got here. Can you talk a little bit what does that mean for you?
Josh Sterling: Ill compare it with my job I have now. I work with guys and we make very fair salaries for what we do.
Josh: What is your job now by the way?
Josh Sterling: I’m an air traffic controller now.
Brandon: So you’re not flying anymore?
Josh Sterling: I still have my own small general aviation airplane but I don’t fly for hire for people anymore. Its way better way to do it.
Josh: While planes are for flying around you’re getting text messages from tenants and totally distracted – I’m a little worried. Where do you control to be sure not to fly in that area?
Josh Sterling: Detroit Metro.
Josh: I’m never coming there anyway, they don’t like me.
Josh Sterling: I can get back to tenants later, usually it’s not life or death.
Brandon: That’s true actually. Nothings that really important as much as they want.
Josh Sterling: I tell people if you call or text me if I’m not back to you within the hour that means I didn’t get it. The way our job works it’s great for that – we never work for usually more than an hour without a break. I’ll take a break and go return couple of phone calls.
Josh: Living below your means.
Josh Sterling: I see these guys that make good money that I work with that are just strapped to the brink. There was a government shutdown if you remember this year we ended up getting one day off unpaid, they talked about doing one unpaid every pay period. It’s a small portion of what you’re going to make – we had people literary looking for loans just to sustain their lifestyles because they had inflated it so much and to me I just couldn’t believe it. You see it all the time everywhere you look. The biggest factor besides maybe commercial lender we found in growth of our business has been living drastically below our means. Plus it’s a lot easier to replace your lifestyle or to be financially independent if you only need to look for 30-odd years to live.
Josh: at some point your income from rental portfolio is going to catch up or pass your full time job and you have a decision to make – do we keep working so we can expand our lifestyle or do we bow out?
Josh Sterling: That’s always been my goal to replace the job income and quit my job and we’re at the point now that’s very feasible now I’m at do I really want to quit my job? I actually really like my job. I’m sure I will, I’m looking into going part-time or scale back the work so it’s more for the joy of actually going in there and not so much for the money of it but it’s a tough thing to give up.
Brandon: I’m sure that the banks when you go to them and they see you have a nice stable job, been there for a while, you make a decent income it’s a lot earlier to get those loans, things like the blanket loans.
Josh Sterling: They had mentioned that helps a lot so that’s good.
Brandon: Let’s move to the next section of the show that we like to call the Fire Round.
It’s time for the Fire Round!
These questions all come from the BiggerPockets forums so were going to fire them at you and see what you say.
Would you rent to a tenant who offered to pay six months’ rent up front but had no references?
Josh Sterling: Probably. Depending on the property. Apartment building I would the way I see it the six months’ rent – how much damage can they actually do? If in six months I have to evict them I’m already coming out ahead financially. One of my houses maybe not so much.
Josh: If it was all cash from a guy named Vladimir?
Josh Sterling: They would definitely still have to pass the background check.
Josh: No offence to anyone named Vladimir that might be listening.
Josh Sterling: My biggest fear is renting to somebody in the apartment building like that is I don’t want someone to disturb the other tenants because I don’t want one tenant to cost me 12.
Brandon: Somebody actually offered me a while ago they wanted to pay six months or three months’ rent up front but they didn’t really qualify. What they wanted wasn’t just to pay a big chunk at the beginning. Here’s what the problem was – They wanted to pay six months’ rent up front so they wouldn’t have to pay rent for six months but they didn’t make enough income to qualify, they just had their tax returned. I said “Yes I will get six months’ rent but after that point you will only make a 1,000 a month and the rent is 600, you’re not paying rent. I’m going to evict you and at that point six months from now I’m going to lose a lot of money on you.” I didn’t do it.
Josh Sterling: I think it comes down to how difficult it is – do you have ten people knocking on your door to rent a unit or do you have one person every month calling. It comes down to just a financial decision to me.
Josh: If a newbie has only one rental property but is expecting to acquire more do you recommend they create an LLC – some kind of entity to put the property in?
Josh Sterling: I do depending on your state. In Michigan it cost me $50 to create LLC. Not very hard an attorney can modify boilerplate operating agreement for you which you should definitely have, again, not very expensive. I waited until I had about five properties for my wife and I to create LLC and trying to go transfer all those properties on our own was a nightmare. At the registers deeds office we had to go through they looked at us as we were foreign. We had to go to the desk five different times to make corrections and it was just a nightmare transferring properties.
Josh: You would say upfront open up the LLC and put that first rental property in to LLC?
Josh Sterling: Plus you’re that much more invested into business you have that much more incentive to go ahead and grow it.
Josh: One LLC per unit or do you put multiple properties in the single LLC?
Josh Sterling: People sometimes criticize that you should have multiple LLCs depending on the amount of the equity in each LLC. My logic has been if you can put a 24 unit apartment bulling in LLC or a 100 unit apartment in an LLC then why can’t I put 25 houses in it also and cover it with an umbrella insurance policy and then I try to go back and leverage my houses on the backside with a blanket loan.
Brandon: What type of flooring would you install in the high end unit?
Josh Sterling: Out there all the houses have the original hardwood which refinishes its beautiful. You can stain it however you like. We have a nice cherry stain on them all and it looks good and it holds up good. I use that for everything. If not definitely laminate over carpet where you can. I only do carpet in the bedrooms.
Josh: What do you do about a tenant who has a dog that barks incisively, tenant paid the security deposit but their neighbor is threatening to call the police, what do you do?
Josh Sterling: For us, I usually let the neighbor handle that. Again, I feel like you can’t control every little thing. If you have a dog that’s driving a neighbor crazy that’s going to be between the neighbor and that tenant. I try not to get involved short of maybe letting the tenant now that this neighbor is maybe going to call the police on you. For that reason we don’t allow dogs in our apartment building because they will be barking and disturbing everyone and I’ll be getting one of those calls per day.
Brandon: What projects do you deem as DIY?
Josh Sterling: Nothing now. I’ve actually hate it to the point where I can have a screen door handle that’s come off and I purposely won’t do it myself because I feel like I need to focus on more E-Myth mentality more using my time for better use than to fix a handle on a door.
Brandon: I’ve been actually trying really hard lately to make a point to not do stuff. Even if I’m there and I have a screwdriver in my car I’ve been trying just for principle make a point and not do it and rather pay somebody.
Josh Sterling: You have to. Otherwise you feel you’ll never get out of that.
Brandon: You have to draw that line in the sand and I’m not very good at it yet. I fall down sometimes and I go put down a door or something.
Josh Sterling: We went and painted one of my rentals a year ago because my painters blew us off last minute and I thought “I’m paying you guys how much to paint this place?” I realized after that weekend that it was well worth of what I was paying them.
Brandon: I regret it every time I do it. I always say “I can go do this” then I go do it and I’m like “God I’m stupid!” you think about it at time it’s really easily its 10 minutes and then three hours later….
Josh: It’s working on your business versus in your business.
This is the Famous Four the questions we ask everybody at the end of each show and we’ll start this one with your favorite real estate book.
Josh Sterling: I’ve got to go Rich Dad, Poor Dad.
Josh Sterling: Sorry, I know, but it’s good.
Brandon: That’s good. I agree.
What is your favorite business book?
Josh Sterling: Actually I don’t think that anyone’s said this, correct me if I’m wrong, I like Warren Buffet The Snowball.
Brandon: Somebody actually did just say that. I’ve never heard of it but it was just couple of weeks ago.
Josh: Couple of shows ago somebody josh mentioned it.
Brandon: You’re not original. Sorry Josh.
I’ve not read that one yet but now that two people recommended it I kind of have to.
Josh: What about hobbies?
Josh Sterling: Skiing. I grew up in Lake Tahoe I actually just got back from the trip back there. Still love that. Play on a softball team out here. I obviously love to fly. We have our small Cherokee that we take up as much as I can, not enough but love that.
Brandon: I love that you mange 50 units now, you have a full time job, you still have time to ski, take vacations, do fun stuff.
Josh Sterling: I don’t have cable TV – I don’t have time for that.
Brandon: That explains that.
Josh: Do you have kids?
Josh Sterling: No.
Brandon: Another reason Josh you and I are brothers right there.
Josh Sterling: We have a dog.
Brandon: Likewise and some beautiful cats.
What do you believe sets apart successful real estate investors from those who never get going working or from those who fail?
Josh Sterling: Its action. It’s the ready, fire, aim. Its 70% I think action, maybe 10% having the resources and another 20% just being willing to learn more. I learned basically 100% of what I know after I had two rentals. I know some people who know so much they could probably mange a 100 units right now but they’re scared to get their one because they spend all their time analyzing.
Josh: It’s been an absolute pleasure despite the fact that you’re up here in Detroit. Seriously really, really, appreciate it. Where can people find out more about you?
Josh Sterling: BiggerPockets definitely. Network on there and that’s quite about it.
Josh: Thanks so much for being on the show. For those of you guys listening and want to chat with Josh definitely hit him up on his profile on BiggerPockets, you can find the link to that in the show notes at BiggerPockets.com/show64. Also if you’ve got the questions about the show in general definitely ask any of us a question on the show notes at that same link. We appreciate you coming, we appreciate you being on board and look forward on seeing you on the site.
Josh Sterling: Great. Thanks for having me you guys, have fun.
Brandon: Thank you Josh and Josh.
Josh: Alright guys that’s show 64 of the BiggerPockets podcast. We hope you enjoyed it, hopefully you learned a lot. I know there is always some good nuggets to take away and I think Josh was fantastic in sharing some of his wisdom. Make sure if you’re not already on BiggerPockets to jump in, setup the account and get active and you can one day own 50 properties in five years while working a full time job. Otherwise look for us on Facebook, Twitter, G+, YouTube, we’re all over the place. Follow us get involved and good luck in your investing.
I’m Josh Dorkin, signing off.
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