BiggerPockets Podcast 080 with Jonna Weber Transcript

Link to show: BP Podcast 080: Smart Rental Property Investing, Getting Your License, and Investing For Retirement with Jonna Weber

Josh: This is the BiggerPockets podcast show 080.

You’re listening to BiggerPockets Radio, simplifying real estate for investors, large and small. If you’re here looking to learn about real estate investing without all the hype, you’re in the right place.

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Josh: What's going on everybody? This is Josh Dorkin host of BiggerPockets podcast here in lovely beautiful Denver, Colorado with my wonderful host Brandon Turner.

Brandon: You said that I had to look out my window.

Josh: I saw that.

Brandon: Because I’m like it looks kind of dark and dreary right now but it’s typical cloudy and not raining though so we’re good.

Josh: Yeah.

Brandon: You’re back in Colorado because you were gone for like a year so.

Josh: I was gone for- I spent four days in Steamboat Springs Colorado which if you are unaware is an amazing little town. It’s a ski town about three hours outside of Denver, such a cool place to bring the family yeah amazing stuff to do, cool hikes and Alpine slides and Hot Springs it was awesome we took a couple days and then…

Brandon: Rub it in.

Josh: Yeah well you know. Last week I was in San Francisco which is the other end of the scale which happens to be probably one of the most disgusting cities on planet earth.

Brandon: Wow.

Josh: Yeah.

Brandon: You just lost like 1000 listeners right there.

Josh: They don't like me anyway the guys in San Francisco so, no, it's…

Brandon: I like San Francisco, I would move there.

Josh: I like San Francisco as a city, I like the infrastructure is okay, like the city itself is cool but walking around that city I've never been- and I traveled to do some pretty weird interesting cities around the world. I've never been to a dirtier more disgusting city. It’s every street stinks of urine, you walk around there's like gum and litter all over the place.

Everybody's outside blowing cigarette smoke in your face it's just I don’t know, I thought it was awful I was really clearly I'm not pulling punches here but I mean San Francisco you got to clean up your act. I mean seriously when people come and visit the town and they see how disgusting the streets are, something’s not right.

Brandon: I don't know I don't remember that. Maybe you’ve been on the shady spots though and I …

Josh: I don’t know it was dirty so I'm back and here we are and we've got to a pretty cool show for today this is Show 080 with Jonna Weber and Jonna is a buy and hold investor and realtor from the Boise Idaho area. She’s the owner of- she I think likes to say, two hands full of investment properties and she brings a lot of great experience as a landlord an investor friendly real estate agent, and there is a there's some pretty decent insight to come ahead.

Brandon: One thing I really like about the show we recorded this about an hour ago but one thing that I got out of it that I think people are going to love is that her methodology behind her investing is so simple and almost like boring. Like I think she would say boring right.

Josh: Yeah.

Brandon: She's not doing like these crazy weird like things and all these negotiation tactics and strategies and marketing I mean she's really like she's building massive wealth through very simple straightforward classic real estate investing. I love that, I love it so…

Josh: Yeah good reminder to kind of break down and just look at this is how it's done when you want to build wealth for retirement like they’re planning retirement and this is how they’re going to get there.

Brandon: Yeah, no I agree I mean there's, it doesn't-real estate can be complicated and you can make it complicated and you can do all sorts of fancy tactics and techniques, but you can also really just do the basics. You can really just kind of simplify it and buy and hold. There’s not much more to buy and hold other than learning buy-and-hold.

But yeah it's pretty simple so definitely encourage you to listen. Before we get to the show really quickly I want to talk to guys about today's pro-benefit of the week. For those of you who’re not aware BiggerPockets has really, really cool things called Keyword Alerts. Keyword Alerts are amazing for keeping you in tune with what's happening on the site. So if you're an investor in Seattle Washington you could set up Seattle and Washington as keywords and anytime there's discussions that are happening about your area you can hear about them or you can set up flipping or some interesting strategies.

You can also do combination keyword alerts now of Seattle flipping LLC so you want to hear about any time somebody is talking about flipping in Seattle with an LLC any of that stuff. Okay so as a pro you get 20 keyword alerts or combination alerts, as a plus member you get 10 and for users you get five. So we think it's a pretty good benefit being able to set up more specific keyword alerts so you're not getting tons of email about irrelevant keywords.

So get those keyword alerts set up today, get engaged and of course as you engage you’re going to have the joys of building up your network and learning. So jump on that, so yeah that's it. Well let so let's jump onto the show Jonna, welcome to the podcast we’re really excited to have you.

Jonna: Thank you, this is a privilege I really enjoy the podcasts every single one of them and this is just wonderful to be here.

Brandon: Awesome, well the pleasure really so.

Josh: It is.

Brandon: So in prepping for this podcast you had mentioned to me that you were like the investor, next door, right you were the typical American family. What did you mean by that?

Jonna: Well what I meant by that and I know that there are so many different types of investors out there but I’ve got two kids where I work part-time and I have a husband with a very busy career and we got kids very involved in sports, we’re going every place all the time, and we invest in buy-and-holds on a part-time basis in a very simple methodical fashion.

Josh: So what you're saying is anybody could do what you’re doing.

Jonna: I believe anybody can do something with real estate to make a difference in their retirement sure yeah.

Josh: Yeah no, that’s great well I know Brandon and I talk a lot about this topic I think it's something that most people probably our listeners at this point anyone who’s listening to our show realizes that anyone can do it. But I was just in California I was in San Francisco for a week at a conference for real estate agents which is why talking to you is this kind of interesting.

Jonna: Thanks.

Josh: And what I found fascinating was most of the agents I talked to were like, “I don’t know, can I do it, can I be investing?” And I was like anybody can do this. This is really something that anybody can do, you just got to figure out the basics get the financial education to understand what you need to do and how things work and take it from there. So I'm very happy to be talking to you about this.

Jonna: Thank you, me too. This is great.

Josh: Yeah. So how did you get started, what got you interested in the first place?

Jonna: Always loved real estate, always loved looking at houses. And it's interesting when I go back 10, 12 years ago it was my husband that actually started looking at the idea of investing in property and at the time I was working some, I had two small kids maybe one at the time. And we always liked looking at real estate but my husband was the one that had the idea to actually go in and look at purchasing some.

And we bought two properties in the 2000s and the first one was just a little townhome and it did not cash flow, it paid the mortgage and we still own that townhome to this day. The other one was actually a primary residence we have that we turned into a rental property which in this instance was not necessarily a great idea.

Because it not only did not have cash flow; it had negative cash flow. Fast forward to 2011 and the market was in freefall or so it seemed at the time and the sky was falling and I saw the prices around us. And I can't pinpoint the moment when this happened but the idea planted in my head, what if we let go of that one investment property that's losing money on a monthly basis and turned it into something that could actually make us money for retirement?

Josh: Yeah.

Jonna: And that's when the true investing career started.

Josh: Got you, so were you an accidental landlord, was it just like a work move or was it you guys wanted a new house? Because a lot of people I think find themselves in a position where hey I live somewhere and either a) I have to move for work or b) I just am done with this house we need to move up or move down. And that decision comes, do I rent it out or do I sell it?

Jonna: Exactly it actually was a work-related move and rather than sell it at the time we were emotionally in touch we didn't know if we wanted to come back to it and we just started renting it out gotcha.

Josh: Got you and then I've got another question so you're up in Boise right?

Jonna: Yes.

Josh: Okay so in 2011 was Boise getting shocked because I feel like the market kind of started to turn around a little bit before that but was it just-because every market’s different of course- so I’m just curious.

Jonna: Right, it might have been late 2010 that I started looking we definitely didn’t make our first ever purchased until 2011.

Josh: Okay.

Jonna: But Boise was it reached its lowest point in the year 2011 when we were biggest foreclosure places in the nation. It was pretty bad here.

Josh: Got you, got you. Okay so you’ve got these two properties, you dump the old one to pick up some new ones and actually get out of a big fat loser and start picking up some winners. So what was the final impetus that did that for you, how did you guys get to that mindset where like you held onto the thing for a long time I mean you literally held a losing property.

Jonna: Yeah about four years longer than we should have yeah.

Josh: Right and I'm not saying this to pick on you but that's crazy.

Jonna: Don’t do what we did yeah.

Josh: Don't do what you did but you're not alone I bet you the tens of thousands of people listening I know there's a lot of folks who’re sitting there holding onto losing properties. So what is the mindset right; is it maybe one day it’s going to turn around, maybe we'll see some appreciation, maybe I'll get ahead of this and you’re just kind of holding on forever?

Jonna: Yes exactly, it was hard to look back at what we could have sold it for in 2006 /2007 and just see it go down, down, down, down but at the meantime it was so far beyond even making a breakeven proposition having a renter in there. And we weren’t in the position at that point we didn't even want to move back to the property.

Josh: Yeah so at some point you got to cut the cord and I think that's the hardest part. I mean I know I've I had to sell property that went the wrong way and it's hard, it's this challenge, you have to get yourself over, “Oh man I'm to get out of this much lower than I got into it.”

Jonna: Yeah.

Josh: But the calculus is, “Oh my God I’m losing all this money every month well shoot if I held on for another six months and it doesn't go the other direction I'm in deep trouble anyway.”

Jonna: Right, exactly we started penciling it out, it didn't like it did look favorable so.

Josh: I got you.

Brandon: Well one of the hard things in that and something that I deal with like I have one property that it was my primary residence we fixed it up like as an investment but then we ended up moving in. We moved out little bit later and now the thing loses money every month like it was is the bad deal. I didn’t really know what I was doing it was like my second property I ever bought. And I would love to sell that thing but I can't because I’m under water

So I lose money every month and I'm under water so I just can't sell it. And I’m granted I could take the loss I could take probably $20,000 loss so that becomes a question were Josh you probably would be more inclined to say, “You should sell and take the loss and get out of it.” Where I’m more of the thinking like if I'm losing $100 a month, let’s say I’m losing an average of $100 a month on it.

I kind of figure in the long run it's kind of like a forced savings plan for me because I’m paying down the mortgage every month, I’m getting the tax benefits I’m getting the other things. It's like I have a savings account that I’m putting $100 a month in every month and adding some stress in. so I mean that’s kind of how I look at it but.

Josh: I don't know I mean I think ultimately for me the math on it becomes am I losing money every month? I don't see it as a forced savings plan I see it as a forced losing plan. And I see it as I could take that loss and talk to accountants of course and I can use that loss to pair off any gains that I have on other investments.

And the question is, do you have any equity? Well obviously not if you’re upside down. So you’ve got no equity so are you paying out of pocket to dump this thing? And if so that's when it gets a little bit trickier.

Brandon: Yeah if I had to pay 20 grand to get rid of it, $100 a month what does that make up for it; I mean that’s $1200 a year that’d be a lot of years to make up for that.

Josh: Well that is the challenge; I mean the challenge is upside down in terms of like hey I put 40 grand down and I'm going to burn through, I walk away with nothing or I put nothing down which in this case I believe Brandon is probably your situation right?

Brandon: Yeah I didn’t put anything down on this one.

Josh: Yeah so that’s a lot harder decision I'm okay with walking away with equity. I would have a hard time too walking away if I had to pay $20,000 at closing. That would change the math dramatically and I'm guessing Jonna that was that what the case was for you; did you lose your equity or did you actually have to pay out-of-pocket?

Jonna: You know what we actually had a little bit of equity in the house and that was is huge that we were able to do it made that decision that much easier. But I can see it's just a fine line you have to look at your personal financials and so that’s right.

Brandon: Yeah

Josh: Yeah and I challenge like anybody who's listening, I'd love to hear or we'd love to hear from you if you're listening this is show 080 the BiggerPockets podcast the show notes are BiggerPockets.com/Show80 if you've dealt with this situation where you’re upside down because I know Brandon wants to hear from you.

If you’re upside down not only in equity but also just like actually upside down on the property itself and you've had to make the decision on whether to unload and pay out or to just kind of hold on, I'm sure we'd love to hear from you and see what you're dealing with. And I know maybe you guys can all get together and bang your heads and figure something out but.

Jonna: It’s really painful for short time it’s just like the Band-Aid off and then you get to move on and it feels better.

Brandon: Really, here's the- I don’t know what you call it a theory or methodology that I've used it to justify it and this may be changing because I'm about to kick out the person that's in that house for like the fifth bad tenant in a row.

Jonna: Oh no.

Brandon: It’s cursed.

Josh: So you’re going to be really upside down.

Brandon: Yeah it’s changing very fast but here was always my theory maybe this will give some encouragement to people; if you bought a bad property in the past which almost every real estate investor at a time will do it- let me actually backtrack; when you're playing blackjack, the game of blackjack and I said this on a very early podcast like one or two.

If you’re playing blackjack, there's a strategy a lot of people play that if you lose you double your bet in the next and if you lose you double your bet again if you lose again you double your bet. Eventually you will win and you’ll get all of your losses back. So what I call it is like on investment a property that’s bad, don't kick yourself in the backside because you’re screwed up, but use it to double down on the next one.

Right so just do twice as good on the next one. So if you're losing $100 a month in cash flow what I did I went out and bought I think it was a four-plex that made like $800 a month in cash flow. Well great now I’m only down $700.

Josh: You don’t have to show off.

Brandon: I mean like the lessons you learn in the early ones double down and just do a better deal. Now I’m no longer losing $100 a month I’m now up $700 or whatever. So that’s just another way to look at it as use your failures as incentive and as motivation to do better next time.

Jonna: I like it.

Josh: Which Jonna did here and…?

Brandon: Exactly.

Josh: So now we’re out of that loser and now we’re picking winners so tell us about that the next phases here. What was the strategy?

Jonna: Well it didn't come quickly I had to have some stops and starts and got scared and stopped and then almost started again, stopped and it did take me it was a good six months before we owned the next property after we sold that one. I have to do a 1031 exchange or anything like that. So that was simple we weren't under a deadline. But it was scary to take that first step because I had messed up in the past so to speak.

Josh: Yeah.

Jonna: And I did a lot of searching, a lot of searching, got as far as getting some offers on some properties but finally that one appeared about six months later.

Josh: Okay so the path at this point was we want to buy and hold correct?

Jonna: Yes.

Josh: Okay and had you guys set a criteria I mean what was the process for you right? I don't think we talk enough about kind of the build up, we talk about paralysis analysis but in terms of planning was there any planning?

Jonna: Well for whatever reason we were always strategic about wanting to find something that we would feel comfortable living in ourselves. So we are definitely looking for higher end and I felt comfortable with people but I want to be working with clientele that I was comfortable with and showing the homes alone and all that goes with that. So the other criteria was being close to where we live now, which was within like a five mile radius.

Josh: Okay.

Jonna: So we tightened our search up considerably and we wanted a single-family home.

Josh: Got you so single-family within 5 miles and…

Brandon: What kind of price range were these in, like what were- I don’t even know your area like what’s look like?

Jonna: Yeah nice middle class – that’s so subjective middle-class, but under $200,000 between $150 and $200,000.

Josh: And that’s Boise because some neighborhood, if you're in San Francisco.

Jonna: Right, right.

Josh: Yeah $200,000 gets you like a 4 x 4 jail cell.

Jonna: And we know the area so well in fact I used to teach school in the area and those types of things are really important and I like being able to be proud of what we’re showing and feel good about what we’re offering potential tenants.

Josh: Nice.

Brandon: And I think that’s important right because we have some rental property that I don't want my wife-not that I don’t let her but I don't want her and she doesn't want to go and show all by herself.

Jonna: Sure.

Brandon: And I don't like that I mean it bothers me that I have to go show a unit because I don't trust the neighborhood to be nice to my wife like there’s only a few that are like that but I don't like that and yeah so

Jonna: And I walked away from some really good deal- I didn't mean to interrupt but I walked away from some really good deals, looking back I thought I could have done something with property or it’s a flip or something but it was just that lack of comfort that made us stick with what we were planning on.

Josh: And I think that’s smart, we don't talk a lot about safety but I know we've had a bunch of articles over the years on the site about just being smart and being safe as an investor. And I know you're an agent as well and I know that’s something that agents tend to talk about a little bit more than investors and I think we probably should cover the topic a little bit.

It really is important I mean there are some bad and crazy people out there and bad things happen to folks and if you feel uncomfortable why do it? Why put yourself in a position where you don't feel safe just to make some cash? I don't believe that that's a great idea now granted not everybody- I may feel completely safe in the neighborhood so again it's a subjective thing.

Brandon: Yeah.

Jonna: Sure, sure. And I do say appreciation, now I know that we are not to invest for appreciation so to speak but it does play into it because these are areas there’s a lot of growth in our community where we’re investing and the potential is there. So that's part of the factor as well.

Brandon: Yeah and I think I mean that's an interesting topic is the idea of doing that for appreciation versus cash flow. And to those people who don't know what we’re talking about it’s obviously cash flow is a monthly income that comes in, appreciation is hoping that prices go up in value. And that's why we say we don't invest for appreciation at least most investors don’t.

Jonna: Right.

Brandon: Yeah but it is a really nice thing if you can invest hoping to get appreciation nothing wrong with that right, and that's what you’re doing, you’re buying nice houses in nice areas that hopefully will go up in value and that's where a lot of wealth is actually built is in the appreciation more than just the cash flow. So that's cool.

Jonna: Right, I think it’s a combination for us.

Brandon: Yeah, so let’s talk about big picture where we’ll kind of step back and say, what is the I mean you're buying single-family houses is that correct not multi- families?

Jonna: That is correct. I do have a condo and a townhome but for the most part yes, single residence there’s no multifamily.

Brandon: Alright, so what are you doing with these I mean is it you’re just buying them indefinitely you’ll hold them for the next 50 years or do you have a plan to trade up or what are you doing? How was this going to accomplish your goals?

Jonna: Well I think that’s far the reason they we’re moving so slowly is because we’re being very methodical in every property we’re buying. I do have the intent of holding them indefinitely at this point.

Brandon: Okay.

Josh: Okay.

Jonna: Or at least in the foreseeable future.

Brandon: And did you plan on living off the cash flow then eventually that is that the goal: pay them off live off the cash flow or is it live off the cash flow now and have to quit your jobs and retire?

Jonna: No, that's a great question no, this isn’t retirement.

Brandon: Okay.

Jonna: I can understand real estate more than the stock market, that’s the way I like to put it and it’s something tangible that I can touch and that I can have impact on. So think of it instead of funneling money all into the stock market it's a way that we've chosen to invest for retirement and at one point they will be paid off and yes that cash flow will come in handy.

Josh: Yeah, it's funny when I'm talking to people who are thinking about real estate investing that that's usually how I kind of explain it to them. I ask about stocks and reading balance sheets and examining companies and how they're doing and most people that you talk to probably own some stocks. And if you asked them if they can tell you how the companies are doing and to tell you what's been going on.

They can say, “Yeah Apple’s great because it's got these cool products,” but what are the numbers; I don't know. And the average guy really is incapable of reading a balance sheet, is incapable of examining stocks and bonds and they’re complicated.

There’s a lot going on and there's a lot of moving parts. Real estate is fairly simple in comparison and the average guy can really figure out the numbers fairly easily. There's just a little bit more work involved most of the time.

Jonna: Exactly, exactly. I liken it to you’ve got $30,000 to put down on $150,000 house to take that $30,000 investment put it in, 30 years later even if you have zero appreciation you've got $150,000 asset class on cash flow and perpetuity.

Josh: Yeah.

Jonna: So to me it's a no-brainer.

Brandon: So at very least your tenants are paying your mortgage for you and…?

Jonna: At the very least right hopefully have cash flow on top of that.

Brandon: Yeah hopefully we have a lot more but…

Jonna: Icing on the cake.

Brandon: Yeah so that's a nice thing about real estate right is there are so many avenues in which it's cool. There’s like depreciation, there’s the cash flow, there’s the taxes, there’s the loan pay down, there’s all those things combined. And the more you can get one deal the better you can do generally speaking. So we hope to get the most of those.

Jonna: And once you start actually cash flowing it’s fun.

Brandon: Yes.

Josh: Yeah.

Jonna: It’s addicting.

Brandon: Well so speaking of cash flow I mean what do you typically look for in a deal? Are you shooting for a certain amount per unit or per building or what do you look for?

Jonna: It’s pretty straightforward if we can clear a good $300 a month after all expenses then I'm liking the deal.

Brandon: Okay.

Jonna: So and it’s a very simple criteria I just break it to complete as that and these be low interest rates the last few years have been very helpful in that regard.

Brandon: Yeah.

Jonna: Yeah and getting us in great low payments, and rents have been going up in the meantime so it's working out for us. That said you're asking if we’re living on cash flow, absolutely not; every bit cash flow right now is currently being reinvested.

Brandon: Okay I was going to ask a question yeah I was going to wonder what you’re doing with the cash flow you because so…

Jonna: Not spending it.

Brandon: So are you paying off the properties then when you say reinvesting or are you actually saving up for a down payment for the next property?

Jonna: Yes, it’s been up until recently it’s been reserves for each property as you know as you get more and more properties the lenders want more and more reserves for every property so that’s been work in progress. And then yes they will go toward future properties.

Brandon: Okay.

Jonna: At this point.

Josh: Right on. So is your plan then because again this is another thing that I don’t think we’ve touched and this is show 080 in 80 shows. You’ve got this cash flow, you got this money coming in, the first one was to put into reserves build up cash to have it in an account in case something went wrong right, in case you…

Jonna: Mainly for the lenders you need six months as you know principal insurance taxes.

Josh: But beyond the lenders I mean your roof falls apart six months if you don't have cash you're in trouble. So building up those reserves is certainly important so is your strategy build up reserves for that next property or the property you’re in or I guess the next property until you're at a point where I guess the lenders feel comfortable.

And then build up the down payment to acquire that next property and once you’ve got the down payment, you’ve got the reserves you're all good and you jump in.

Jonna: You got it yeah that’s the plan.

Josh: Okay and I think it's a good strategy for anyone listening and wondering hey what do I do, I’ve got a little bit of cash, maybe enough to pick up the first but I don't quite know how to go about raising money for the next one. I think that's a great way to go if that's what you want to do. So how are you financing this, are you a past how many properties I guess do you have at this point?

Jonna: We’ve got a couple of handfuls and up until this point it’s been traditional financing working with smaller banks and that a credit union.

Josh: Okay.

Brandon: Okay cool and … go ahead.

Josh: As you say are those portfolio lenders or are they requiring 20% down is that typically what you’re doing on these?

Jonna: Actually 25% down once you get past four properties experience and we’re starting to look into the idea of portfolio lending at this point we haven't had to utilize that yet.

Brandon: Okay.

Josh: Okay.

Jonna: But I'm gathering resources for how that works.

Brandon: Nice, well people who don't know a portfolio lender is a lender so let me just explain real quick for everyone; a normal lender like a normal bank will sell their loans up to Fannie Mae or Freddie Mac these big government pseudo-institutions right. So they sell their loans up and so because of that the lender has to fit every borrower into this box.

This perfect box, they have to be exactly this income, this loan whatever down payment. A portfolio lender doesn't sell their loans up to or at least some of their loans they don’t sell them to Fannie Mae Freddie Mac. They keep them on their books, which means they can be more flexible they don't have to fit you into a square box that can fit a round peg which most investors are little bit of a round peg into the square box.

That is what a portfolio lender is for those people who don't know. And you could find them Arthur Garcia talked about that in Show 006. If you haven’t listened to the BiggerPockets.com/Show006 yet do it, it’s probably our funniest show we've ever done. He talked a lot about how to find them so listen to that but really every community has them you just got to make a lot of phone calls. So anyway side I just wanted to explain that.

Jonna: Yeah I brought up some great topics and I think those were really helpful to me just the fact that lenders they want your business so ask for it.

Brandon: Yeah.

Josh: Yeah.

Brandon: Yeah I'm working through a couple to portfolio lenders right now and they could be great. So yeah I was curious because a lot of lenders will stop you at four. And then some lenders will let you go up to like10 or whatever it is. And after that it gets even more difficult and that sounds like where you’re right now so you talked about finding portfolio correct?

Jonna: Yes and I know one credit union in particular I'm working with does those so I'm talking with them right now about how that works. But for our experience credit unions have been a great way to go especially going up to 10.

Brandon: Okay, cool are you managing all your properties yourself?

Jonna: I am okay.

Brandon: Okay so you take care of all the phone calls and stress and drama?

Jonna: I do, we actually made some changes this last year so that we can scale up and we created a little property management company just for the portfolio. I'm not managing other people's properties and it's working out really well, just simplifying and getting everything squared away as far as keeping track through QuickBooks and really systemizing so that we can scale and not feel overwhelmed. But I actually enjoy that the management.

Brandon: Yeah so let me harp on this a minute. This is something you're doing that is awesome that we've really spent a lot of time on. And it’s something one of my biggest mistakes I mean really pants down probably my biggest mistake when I started out real estate investing was not planning for property management.

So when I took over I thought well I can manage myself I'm a young guy, I can handle doing everything myself. So I started at the beginning and there's nothing wrong with managing your properties it’s the idea of you can't scale indefinitely or you can’t scale very big if that's your only plan. So the fact that you are conscious of that right now and you're saying look I want to scale this business so let's figure out how to do that.

I think it's so important to do early on, is to sit down and say how do we- and the way you're doing it is by creating your own in-house property management and that's what me my wife are doing as well finally now after years. We’re trying to make a scale though. Yeah although it's tough you want to switch over your property management.

And then you can’t because you don’t have the cash flow and you don't have the system in place. So anyway I commend you for that that's awesome.

Josh: Well what was the…?

Jonna: Well it’s a work in progress.

Josh: So did you decide to do that because there wasn't an appropriate property manager in town or why did you guys choose to do it? Was it because you thought you’d hold onto more cash by managing yourself? What was the decision to self manage?

Brandon: Good question.

Jonna: We’ve kind of grown so slowly it just kind of has come on organically that I would just manage. And I will talk about this but I changed careers a little bit a year or so ago and became a realtors I got the flexibility that allows me to do so. So we haven’t the big discussion on whether or not we're going to hire someone because we’re just pretty comfortable doing it ourselves at this point.

Josh: Got you.

Jonna: Although there are some great companies in town and that may change at some point when we are empty-nesters and want to travel more.

Josh: Right on. And in terms of self-management are there any things that you found to be particular headaches or any tools that you’ve put into place to help you manage the properties beyond QuickBooks?

Jonna: Oh yeah and BP has been so helpful for that. I’ve learned so much in the last few years it’s been incredible. And just having all the forums in place, having strict criteria for the applications knowing exactly what my rental requirements are, putting them in writing so I don't have to backpedal and explain why someone isn't going to qualify for a property.

And just having the procedures in place and putting them in writing in and making sure that we can follow through with everything that we told our tenants that we’re going to do.

Brandon: Yeah.

Josh: Right on. So training your tenants and following up when you have things that don't go exactly as they should.

Jonna: Right.

Josh: Yeah right on.

Brandon: Do you have any crazy- I mean like do you have crazy tenants or because you have nicer properties are they all real good tenants do not have drama?

Jonna: A little bit of drama here.

Josh: Come on we all have drama come on.

Jonna: Little bit of drama here and there actually the most drama I ever had was in that primary home rental but I told you about that we sold. And we had some problems with late rents there and pets that weren’t supposed to be living there. But never had an eviction and I’ve had very good experiences, I really have a lot of respect for our tenants and they’re good people and hopefully the feeling’s mutual.

Josh: So what do we do when we have a tenant that brings a pet in or a human and that doesn't belong?

Jonna: Well it helps if you’re not in a desperate situation that was the rental property I talked about where we really needed that payment every month. And there probably would've been an eviction there if I knew then what I know now.

Josh: Okay.

Jonna: At that time it went largely ignored but it would not be that way today.

Josh: Got you so was what would you say if you're talking to your hairdresser and she says, “Hey listen Jonna I've got this rental property and somebody's coming in here.” And they’re like, “Well no but I’m in a desperate situation and it's horrible.” That’s hard right, you're in a really tough bind and you want to throw somebody out. How does somebody overcome that as an experience…?

Jonna: How does someone actually…?

Josh: Well you’re experienced right, you're saying back then you didn’t want to do because you knew you were in a really tough spot you were desperate and you didn’t want to get rid of them. But now looking back you're like oh I definitely would've if I had the experience. So how do you overcome what was stopping you back then beyond the knowledge that it's probably a bad idea to hold on to somebody who's violating your lease in some way shape or form?

Jonna: Right, well you just got to remember it’s a business. It’s a business and that violation is potentially affecting-there are so many factors involved that it could really hurt your bottom line and you need to look at it as a business and look at the potential for a good renter down the road in your property. And we love like everyone I believe we love those long-term renters.

So that’s the- I guess backtracking that’s the biggest thing that I could emphasize is look for that long-term happy tenant.

Josh: Yeah are you doing- in terms of long-term are you doing two year leases or anything beyond a year or is long-term a year lease?

Jonna: I have just in the last year started implementing 18 or 24 month leases depending on the leases come up because of course you’d like your leases to end in summertime. And that’s working out really well and a couple times I’ve offered like a $20-$25 incentive monthly if they sign 18 to two year lease and that's worked out really well. People seem to like that.

Josh: Interesting.

Brandon: So why you say we want- like why as a landlord do we want summertime our units to go vacant? Why is that?

Jonna: I think most likely applies more to all of us that experience snow in wintertime that that’s just when people move and a lot of our single family homes happen to attract families and that's when a majority of people are making a move. In Boise too we’re experiencing a really large influx of outer-staters coming in again from other states.

And the phone calls when we pick up both for real estate and for wanting to find places to rent and they're all coming in, in the June/July timeframe it seems.

Josh: Do you think any of that has to do with the oil boom up in the northern states or is that just Boise is suddenly attractive despite everything that has to do with Boise? Not that I have any bad things to say about Boise because I was there once and I liked it, it was alright.

Jonna: Boise is great. Californians, there are so many and we love you. I was born in California but it is a lot I think with the rise in property values across the country particularly in the West Coast there's a lot of uptake and people getting out and moving up to Idaho a lot for a lifestyle choice as well.

Brandon: Interesting.

Josh: Got you. So what would you think is the biggest challenge in being a landlord?

Jonna: Doing things when it’s not convenient to do them, when you're just settled in for a date night or a family movie or out with friends and you get that phone call you don’t want to get. And you just got you remember its short-term pain for long-term reward and keep your eye on the goal.

Brandon: That’s a quote.

Josh: And you do realize that having a property manager would alleviate lots of that. I'm just saying but that is not you, you are the property but…

Jonna: It is the property- yes it is and that said I am trying to be more concerted in outlining the business hours and so forth. But there definitely are those calls that still come in late Friday evening.

Josh: And that's a great thing so let's talk about that; you’re outlining business hours well what do I do, I'm your tenant and my shower is not working appropriately or my toaster oven is too toasty. And I'm calling you at 9 o'clock at night and I want an answer and I’m not going to stop until I get one.

Jonna: Well I discern what an emergency is and that is really outlined in our lease as well. An emergency is fire, flood, water running everywhere and if it’s not emergency usually it can be taken care of the next business day.

Josh: There you have it I mean I think that's perfect that's what landlords probably need to know, is especially those that self manage it's not an emergency unless it's an emergency and your lease really should spell out exactly what that is. And it may be different for you I mean may be I don't know I can’t come up with some scenario.

But maybe some people have better leniency on things but I'm guessing fire and flooding is probably not one of them.

Brandon: Yeah.

Jonna: No, yeah and it may work in the first when you’re a new landlord the first one or two properties but once you start to scale and you’re getting the multiple phone calls, you learn to outline those that we’re unavailable.

Brandon: What’s funny is just you said that about the emergency thing I thought my wife and I have been- well my wife has been putting together what’s called Like a Rent Talk the last few days. The concept came from Mike Butler's book Landlord on Autopilot but basically…

Jonna: Love that book.

Brandon: Yeah love the book isn’t it great? So Landlord On Autopilot by Mike Butler in the book he mentions sitting down with your tenants when they move in with what he calls A Rent Talk it's just like a flip through book that you create of here’s the 20 most important things it’s like a slideshow right but on the hood of a car you’re just showing them the stuff.

Anyway so I just sent my wife a message and just said on Skype here that said, “For rent talk, what is an emergency?” because that is so important right, like if you can go over that at the beginning of the lease and say, “Look, here’s what an emergency is.” I mean because a lease is like I mean my lease is 25-30 pages long like with all the addendums and everything.

Jonna: Wow.

Brandon: Yeah it's crazy there's so much in there, I mean because like the lease itself is four pages but there’s so much like extra stuff and then all the state forms and all the federal forms and all that. So everything gets I mean tenants have no idea what they’re signing 10 minutes after they sign it I feel like even though we go over it.

So anyway the rent talk is like here is the most important things so that’s what we’re going to add now just because you said that what is an emergency we’re going to add that to the rent talk.

Josh: Nice.

Jonna: Excellent yes.

Josh: There you go. Hey so I asked about the challenges what about the greatest part of being a landlord? What do you like best?

Jonna: I truly like forming relationships as being able to serve the tenants make sure that they're happy provide them a safe, comfortable cheerful place to live. And I like the business aspect of it you’re very much a small business owner when you’re a landlord and/or just an investor in general and growing your business and forming your business model.

And discussing it, planning, goal setting if you're involved in it with your spouse it's really fun for us anyway. We kind of took something that was a hobby which is loving houses and turned it into a big part of our investment strategy and it’s rewarding.

Brandon: That’s cool.

Josh: That’s great. Alright so you talked about this transition to becoming an agent. Why on earth would you decide to become an agent, not that there's anything wrong with it to all those agents that are listening, just asking.

Jonna: It’s funny you played a part in this Josh.

Josh: Oh my goodness no!

Jonna: Yes you did yes.

Josh: I’m not guilty.

Jonna: It was the BiggerPockets Summit in 2012 in your hometown.

Josh: Yes.

Jonna: And I was sitting in a seminar and I believe the speaker was Jeff Brown.

Josh: Jeff Brown Jeffy.

Jonna: Call out Jeff and he…

Josh: The bald guy.

Jonna: I was really inspired by his talk and he was talking about Boise Idaho and the future of Boise Idaho. And he said if you all don't know Boise Idaho now you will, and he was a big believer in our market at least from the stage that day. And everyone was writing down Boise Idaho, Boise Idaho and I looked around and I didn't find another attendee from Boise Idaho.

Josh: Nice.

Jonna: And the wheels are starting clicking. Along the same time I had some family members that we lost to cancer in the last year or two and it was just that life change kind of time that comes around in your life a few times if you change careers and start thinking about why you want to do something different.

And at the time I was teaching school which was wonderful and rewarding in its own right but I am very entrepreneurial and really like working for myself. And those two things kind of came together both of them in 2012 and I pursued my license.

Josh: Wow so first off you could blame Jeff Brown on Boise Idaho don’t blame me but okay and I am sorry about your loss as well.

Jonna: Oh thanks.

Josh: But I am glad that we inspired this move here so you’ve got your license what was the goal what are we going to do with the license are we getting a license to not pay commissions on the sale of a property? Are we getting a license because we want to service other folks as investors or just traditional consumers? What was the idea?

Jonna: It’s a combination. I will say it wasn’t so much to get my own deals although it's really helpful but I’ve worked with a great agent for years that’s been very helpful with our other acquisitions. And I had quite a bit of service with that. But mainly it was I can only do so much and as our property management grew and our kids grow and their involvement in sports and that sort of thing I wanted something with flexibility.

And I'm utilizing real estate commissions in a way that some people might wholesale or flip to earn extra cash as a day job to further fund our mission.

Josh: I think it's a great idea; I really do especially because your primary focus is investing now. You’re so familiar on the day-to-day basis of what's going on in a given market and that's really the job of the agent. And that's actually what confuses me to be honest I mentioned earlier about this whole thing with agency we wrote this ultimate guide, Ultimate Agents Guide To Working with Investors.

Jonna: Yes I love it.

Josh: And we’ll link to it in the show notes and hopefully we've got a lot of agents listening to the show right now because most agents don't really understand a few things; one, investing isn’t that tough and you too as an agent can start doing it. And two, as an agent an investor client is the best, kind of client you could possibly want to have.

A lot of them shy away and say, “Well investors throw all these lowball offers out and they’re scummy and there’s all this bad juju around investors.” But what the secret is and here's the billion dollar 97c secret that the gurus won't tell you so to speak, an investor client you get one good investor client, they do five, 10, 20 deals 50 deals a year, you don't have to market.

You don't have to sell, you don't have to promote, you form a relationship and you're there for them. And you're doing the work and you got those commissions coming in and it's a beautiful thing.

Jonna: Absolutely you got it, that’s what I'm definitely finding to be true.

Josh: Yeah.

Jonna: And I love it because I'm in my wheelhouse and I love working with people that can see beyond the pink wall or an outdated water heater and we move on and we make great deal and it's a win-win.

Josh: So what are your… oh go ahead Brandon.

Brandon: Yeah because I’d go crazy if I was showing- like I'm not an agent but if I was I'd go crazy showing somebody who was like, “I just don't like this house, this bathroom, this wallpaper,” I’d be like, “Just fix the wallpaper,” like that’s how my mind works.

Jonna: Yeah, yeah.

Brandon: And I’m like, “Stop being stupid,” and like hit them upside the head but…

Jonna: And there are fabulous realtors that feel that hitch.

Brandon: Yeah, yes there are.

Jonna: There’s plenty wonderful realtors that will work with the buyer.

Brandon: Would be me.

Josh: Well I had two rounds as an agent working with retail buyers and that didn't last long. So how does somebody find you I mean how do I, as an investor find an investor friendly agent like yourself?

Jonna: Well a lot of my client to date have been found through BiggerPockets I would suggest getting on BiggerPockets tapping into your local market there looking there first at the very least if there isn't anyone that jumps on that is actively involved on BiggerPockets so you’re going to get some referrals. I've even utilized for resources when I need referrals for other markets for potential clients that are looking in other markets and BP has been just a wonderful resource that way.

Brandon: And if I could jump in and just say like I mean here’s something that I know a number of agents too and I think you do it as well and it's so smart, it’s so smart. So what they do is they set up keyword alerts which you can do for free at BiggerPockets.com/alerts, put in your city name in there so you might put in Boise or Seattle or whatever.

And then when a new member joins the site and say, “Hey I'm brand-new here I'm from Seattle or I'm from Boise, you as an agent gets his email notification in your inbox or on your phone if you’re a Pro member. And you can be the first one to welcome them. You’re not pitching them you’re not trying to whatever it’s just, “Hey welcome, I'm glad to have you here I live in the area.”

Whatever it's networking right, but you become the first person that they see. Like I don’t understand why there isn’t a million real estate agents on BiggerPockets with keyword alerts set up because it’s probably like the cheapest best marketing I think a person could do. So if you're an agent.

Josh: As long they’re not being scummy about it.

Brandon: As long as you’re not being weird yeah.

Josh: Yeah.

Brandon: It's about building relationships but if you can get in there just greet people and start building relationships it's like the coolest feature ever. So and actually speaking of that might as well say this, we just introduced couple days ago keyword alerts I mentioned those. You can now have like multiple keyword alerts like a combination of words so you could do like flipping and Seattle.

So you’ll only be notified when the words flipping and Seattle are both used in a forum post. So that’s a brand new addition and we’re going to have negative keyword alerts as well. So for example which I'm excited about I can have a keyword alert for Washington but not for DC. That way when people say Washington DC, I don't want to know about Washington DC I only want to Washington State.

So anyway that's coming in the next week hopefully or two anyway so keep an eye out for that. So anyway enough that’s BiggerPockets alerts again BiggerPockets.com/alerts. So getting back to the agent thing, if I am a- I mean Josh kind of touched on this but I want to know a little more of I mean I'm just getting started say I’m brand-new to real estate I’m really excited.

I want to get started I mean what makes you as an agent want to work with me, because there are so many wannabes that are coming out of the guru Festival. And they're all pumped up and they want to start throwing in a million offers like why would you want to work with me as an agent? What would make me appeal to you?

Josh: That's an awesome question by the way.

Brandon: Oh thank you I’m an awesome person.

Jonna: It is. What I need you to do is be specific on what you're after and I'm happy to guide and to provide feedback. But I need to know what your strategy is going to be or at least have an idea in mind whether you’re going go multifamily, single-family and what you're qualified for as far as financing and how you're going to finance that property.

And then we can get to work. But I do get a lot of email correspondence and even through BP just saying, “Hey I need a deal what do you have for me?” And that's great I am busy as well and I just need something a little bit more to go on to point you in the right direction.

Josh: I think that's great and I think that's probably the challenge that the agents all face. The challenge is they don't want to deal with tire kickers as they're called. They don’t want to waste their time with time wasters. So first off the responsibility of an investor is to be prepared and it’s to know what you want.

So if you're coming off a seminar or a class or whatever the heck it is, and you're just like, “I want to make money in real estate,” you don't have time for that no agent’s going to have time for that. You need to dig in, figure out what your criteria are, where you want to invest, what exactly you want, what you need and then if you approach an agent go in with that specific set of information.

You’re going to increase the likelihood that they’re going to want to work with you. On the other side as an agent obviously, you need to be vocal a) about that to potential clients I’m not going to take anyone- I'm not going to show you 17 properties until you know exactly what you want. I’m not going to show you one property until you know what you want.

But I think the key there on the agent side is also the education. The agent has to be educated and has to understand the basics, the absolute basics of real estate investing. And if you don't understand the basics of real estate investing you have no business whatsoever in showing income properties of any sort to investors.

Because you're the one who's going to be responsible for putting people into bad properties and ultimately I actually do hold agents responsible for that because I think you have all you've a lot of people who come out that are uneducated in how things work and what cash flow is and the basics. And if they come in and they go to an agent that doesn't know what they're doing and the agent helps them to buy a property there really not acting in the best interest of that client.

So what I recommend two things; one for the agents listening our ultimate beginners guide, it's free it's BiggerPockets.com/UBG we’ll link to it in the show notes at BiggerPockets.com/Show80 and it's literally the basics of real estate investing. It’s an amazing guide and two there’s the agents guide that I mentioned earlier again it talks about what the investor mindset is, what they're looking for.

Talks about the formulas, the basic math, the stuff that you really just need to know there's not a lot it's probably a couple hours of reading and your you're pretty good.

Jonna: Yeah incredible resources out there.

Josh: Yeah, yeah. Hopefully anyone and everyone listening you guys are sharing these resources with your agents and if you don't have an agent you're looking for one, spread the word on this stuff because these resources really are very, very good and can help educate and train agents to become better agents for you as investors.

Jonna: Absolutely.

Josh: Yeah so where are you finding your properties; is everything on the MLS?

Jonna: A couple have been happenstance through friends, a couple of deals, investor friends and things they didn't quite meet their criteria. But other than that yes they were all through the MLS. And in different circumstances; a couple of foreclosure short sales. My first property we purchased and turned around a purchase in 2011.

It was actually a new build from I think 2007/2008, they built just after the market started to crash rented it out for a few years, the renters kind of trashed the property and they just wanted out the original people that had built the spec just wanted out and so it was a traditional very quick sale.

Brandon: Okay.

Jonna: So it’s just been a variety.

Josh: Got you.

Brandon: Okay, alright that’s cool. So when you look at a property what kind of metrics you use to evaluate? You already said earlier you want the $300 cash flow but is there anything else I mean do you like try to figure out your return your ROI or your IRR any of those things you'd work through those?

Jonna: I do, it’s more of an art than a science maybe just because my mind doesn't quite work in that way. My husband is extremely good at that and so we-although I'm the one actively involved in our business, we work through all those numbers together. And we don’t sign off on anything unless we’re in agreement on whether the numbers work and if it fits our criteria.

Because it is easy to get kind of Shiny Object Syndrome and go, “Oh what about this; this is great over here but it may not quite fit what we’re looking for. So we need to talk.

Brandon: That’s a tip right there that I just want to emphasize that you said it’s is amazing, it's great right. So if you always run through your numbers with somebody else, like you're always going to have another person whether it’s a spouse like you have with wow…

Josh: Shpouse.

Brandon: A Shpoushe; a spouse or if you have a business partner or if you’ve got a mentor like some local investor you can get together with whatever that is like that is so powerful because like you said it helps you avoid the Shiny Object Syndrome and jumping on the bandwagon because you heard it on a podcast or whatever. Helps you stay grounded in knowing what you're doing is right so very cool.

Jonna: And on the flipside of that trust the numbers. In the very beginning we got started there were some deals we walked away from in 2011, looking back we should have jumped on and we all have those stories but the numbers were but we let fear get in the way of moving too quickly at the time.

So I would say trust the numbers on the flipside too and if it's a good deal don't be afraid to act if it fits your criteria.

Brandon: That’s cool.

Josh: Well last thing before we head to the Fire Round I just want to throw out there we mentioned that we were doing our webinars on BiggerPockets now so if you guys want to come to a webinar I'm doing one this Thursday usually every Thursday I try to do one. But basically the whole webinar is on how to find properties, how to analyze properties and how to finance properties whether you got millions of dollars or no money at all.

So if you guys want to come to webinar just go to BiggerPockets.com/Webinar and you can sign up for the newest webinar.

Jonna: Sweet.

Brandon: So yeah people can check that out I’ll probably mention that going every show now but anyway yeah check it out you can come to the webinar and I can show you how I analyze property. So actually last question before we go to the Fire Round what does your future look like? If you Crystal Ball like where do you see yourself? Is this just every year you’re going to buy another property or two forever? What do you think your future looks like?

Jonna: We’re on the two to three property a year track at this point, the future looks like I’ve got kids that are in sixth grade and eighth grade get them through school, get their college funded and at that point that's when I think about maybe turning over to a property management company and traveling a bit more we love to travel. But future definitely lies in real estate as far as a career for me.

Brandon: Cool.

Josh: Fantastic.

Brandon: Cool.

Josh: Well let’s move on to:

It’s time for the Fire Round.

Brandon: Alright these questions come straight off the BiggerPockets forums that you can get to at BiggerPockets.com/Forums and this is where we’re going to throw some questions at you and I know you'll do fine alright.

Josh: Curveball.

Brandon: Here you go.

Jonna: This is the only part I’ve been thinking about okay.

Josh: Oh stop.

Brandon: Alright number one, do you think off market deals versus on market deals makes much of a difference? And first of all how would you explain it maybe you can if you want to try to clarify, what does that even mean? What is an on market versus off market deal?

Jonna: An on market deal in my perspective as a realtor would be something that’s on the MLS.

Brandon: Okay.

Jonna: And an off market is something perhaps it’s found either by marketing to sellers directly or working with a wholesale to pick up a deal. And I…

Brandon: Okay so would you say, yeah should you focus on one or another does that really matter?

Jonna: Starting out I would probably concentrate my efforts in one way or the other at least to find that first deal because there are so many different directions to go. And I am [Inaudible] [55:25] that there's always some sort of deal on MLS they’re not all gone. They may be a little harder to find than they were three, four years ago but they’re there particularly working with an aggressive realtor that knows what deals are for.

Brandon: Great.

Josh: Nice, alright here's a good one; is there ever a time- you ready for this?

Jonna: Oh gosh yes I’m ready.

Josh: Is there ever a time that you would rent to friends and family? Now keep in mind that we've called all your friends and family and told them to listen, so you're on the spot right now.

Jonna: That’s a tricky question. In the right circumstances, yes in the right circumstances but again it needs the outlined with everything in writing and make it consistent with the other rentals.

Josh: Got you, I think that's a very good answer I personally would never however if forced to at gunpoint I would require a full written lease that filled up every criteria that I would require with any outsiders. Well and probably would have like six or seven additional addenda requiring nondisclosure to the family and you know all sorts of fun things because you know.

Jonna: With that said I would not borrow from personally I'm not going to borrow from friends or family.

Brandon: Okay.

Josh: Yeah.

Jonna: Or vice versa.

Brandon: So Josh Fire Round question for you.

Josh: Yes sir.

Brandon: Your close family member let’s say your brother or someone really close to their house burns down they have nowhere to go.

Josh: Yes.

Brandon: Do you rent to them for let’s say three to six months I’m just curious.

Josh: I would let them- that's a great question geez I mean.

Jonna: I would.

Josh: But if it were my close family immediate family I would definitely not do six months not a chance. Love you but no. I’d give them a couple weeks to transition but I’m not going no way man, come on I need my space. I can’t do it I'd help out. You know what I would help them find another place but yeah I don’t know. Now everybody's throwing eggs at me this is awful I feel terrible.

Brandon: Yeah what an awful person. Well Jonna would so we all like her so.

Josh: Well it’s not true what they say about me.

Brandon: Some of it’s true. Alright, next question what is most important thing every investor needs to check up on during their due diligence process? Like when they're going to buy a property what’s probably the most important thing to make sure they check up on?

Jonna: So one thing that I would encourage every investor to do is to really know the surroundings of the property you're going to buy. Case in point I once owned a property where they tried to put a huge natural gas-fired power plant in the backyard, and if were in escrow on that property I would definitely want to know about it ahead of time before closing.

Brandon: Yeah.

Jonna: It’s kind of outside the box but…

Brandon: I like it.

Jonna: That’s something I think about.

Josh: Yeah I don't want one of those my backyard.

Jonna: I didn't either.

Josh: I’m just saying.

Brandon: Hey while we’re on it maybe I can ask, how does a new investor find out about those things that are going on?

Josh: Good question.

Brandon: Do you have any good tips for finding out that you know there's a power plant going in the backyard?

Jonna: It’s always good to talk to neighbors; that’s a big point. Talk to the HOA if there is one involved I like to ask if there's any drama going on anything I need to know about related to the HOA and things that are impacting them and usually the property manager that manages that HOA will start talking. Calling the city or the county is a great resource.

And talking to the planning or going as far as looking at the comprehensive plan in some instances it depends what’s developing around you but if you’ve got open fields, open area it's always good to know.

Brandon: Okay.

Josh: And I think that's probably one of the better tips that we've also had. Research the property you're buying I can't emphasize that enough. Yeah if you're not aware of what's going to be happening in around the area in the next five, 10, 20 years you need to know it because you’re not to predict everything. But at least if you have kind of an idea of the master plan of what's happening in and around where you're at you can plan for it.

If you're not aware and ignorant of it well you can find yourself in a situation that you weren't prepared for and then that’s never good. Well so next question do your tenants pay for their own water, sewer, garbage, electricity why or why not?

Jonna: For the single families yes. Because that’s the expectation here in Idaho that's pretty standard with what a lot of property managers do and it just keeps it simple. And a lot of them with single families you find that particularly in the price point that we’re in have been homeowners and they expect that and it's not a big deal.

Josh: Cool.

Brandon: Yeah. That works really well except for when your local utility company or city decides to make landlords force them to pay the water like one of my local towns does.

Josh: Yeah that’s just crazy.

Brandon: So irritating I just want to punch them anyway.

Josh: Time to unload some property in that town Brandon.

Brandon: Yeah, well I just set up my own little billing department and I just bill them for it which is one more step irritating. Anyway move on it to the world-famous.

Josh & Brandon: Famous Four.

Jonna: I'm not even going to go there.

Josh: Oh come on now Jonna you know you’ve been waiting for 79 shows to participate in the Famous Four.

Jonna: Hey I did a BiggerPockets meet up in May here in Boise and I went around and made everyone do their four it was pretty fun.

Josh: Nice.

Brandon: That’s awesome.

Josh: And by that of course you’re talking about you used BP to organize a local meet up in town correct?

Jonna: Yes.

Josh: Awesome.

Jonna: Lots of fun.

Brandon: Yeah cool.

Josh: Yeah we encourage a BP does not sanction these we don't get behind them, we don't finance them they're not something that BiggerPockets puts on but our users are all around the country if you are unaware are putting on local meet ups of real estate investors if there is not other kinds of meet ups in town.

And it's a great way if you don't know investors and you're not aware of groups where you are, use BP to put together a local get-together of the investors it’s a good tool.

Brandon: Yeah cool Famous Four.

Josh: Alright Famous Four; number one, what is your favorite real estate book?

Jonna: Alright, my favorite real estate book is now hold this so I get the name right Buy Hold Forever by David Schumacher and Steve Dexter; great classic points the concept of buy and hold.

Josh: This is a new book.

Brandon: Nobody has ever said that.

Jonna: I worked on that but truly it is one of my absolute favorites.

Josh: Oh cool right on.

Brandon: Cool yeah I’ll link to that in the next one in the show notes but so the next one.

Josh: Is, what is your favorite business book?

Jonna: Favorite business book is The Art of Nonconformity by Chris Guillebeau.

Brandon: Chris Guillebeau I love that book.

Jonna: You know Chris?

Brandon: I don’t know him personally but great book.

Jonna: I did meet him once here for a book signing but he is such a great guy but the biggest concept that I think relates to real estate in this book is he tells the story about how he figured out he could either buy a brand-new SUV or he could travel to every country in the entire world. And I equated it to oh we could have a brand-new SUV or I could get a rental property. And we drive old cars but we invest in rental properties so good book.

Josh: Nice, that’s great. And I'm surprised just surprised that you didn't say The 4-Hour Workweek and the reason…

Jonna: I have read it.

Josh: Because I was kind of prepping for this podcast as I mentioned earlier I had actually traveled last week to San Francisco and here's a whopper for everybody, I am no longer on page 28 of said book I am now page 150. .

Jonna: It’s a long book.

Josh: It's not quite a full one flight read but yeah it's alright I still have some issue with it but overall I think it’s alright and I’ve had two people this week already literally people are berating me every week about reading this book, it's the weirdest thing I’ve ever seen. But like whether it's on Twitter, or on BiggerPockets people like, “Josh when are you going to finish, when are you going to finish?”So I'm getting closer guys.

Jonna: Alright, I listen to it on audio that’s always an option.

Josh: Nice. Alright, hobbies you got to got a nice family, it sounds like real estate is this great focus of yours, but what do you do for fun?

Jonna: We travel. We just did two and a half weeks in Europe in June.

Josh: Nice.

Jonna: It was a trip with the kids, sports my son’s really football, basketball, my daughter's basketball and they’ve got me into NFL football watching in the falls. And there’s a lot of football a lot of basketball and travel when we get the chance.

Josh: Fabulous.

Brandon: Cool. Alright my final question Jonna what you believe sets apart successful real estate investors from those who fail, give up, never get started, whatever?

Jonna: Working through the fear that comes and the negativity from others. I still have at times have had sleepless nights not sure of a particular deal that I’m working on. But there’s that adrenaline too, I kind of feed off of it; it’s fun. So working through that fear, getting past the first hurdle of that first investment is huge.

And then also just overcome replace those negative comments from friends and family that some might get with an hour of BP let's say that helps a lot.

Josh: There you go we’re the therapy network for the wannabe and newbie real estate investors.

Jonna: Yes, you could get on and say, “Oh it’s my people they understand!”

Josh: Yeah there you go. That's great, that's great. Well Jonna we really, really appreciate you taking the time. Before we let you go where can people learn more about you?

Jonna: The biggest place right now is through BiggerPockets.

Josh: Okay.

Jonna: Look me up on BiggerPockets say hi and we can connect I am working on a website and some other things but I’ll have all those other things on my BP profile eventually.

Josh: And we’ll point to the profile from the show notes at BiggerPockets.com/Show80. Well Jonna thank you so much again we really, really do appreciate you coming on board and sharing your story and giving us some tips and feedback and we’ll look forward to seeing on this site.

Jonna: My pleasure, will talk to you soon.

Brandon: Alright thank you.

Josh: Thanks. Alright guys that was Jonna Weber as our guest here on show 080 of the BiggerPockets podcast simplifying real estate down to its essence buy-and-hold investing, keeping it easy, nothing too complicated and really starting to make moves for herself and build up a great portfolio. So we’re really excited for Jonna as she continues to grow her portfolio.

Brandon: One thing we didn't talk about on the show that I wanted to bring up real quick was people, I’m a big fan of Dave Ramsey, I'm a big fan of – I mean a huge fan of like Suzie Ortman but just like those financial people I like them I think that they’re on to something but people who don’t need to set aside a lot like what’s that one guy Stephen Bock I think his name is automatic millionaire.

Right like if he set aside just a little bit of money every month over the course of 30 years or 20 years that money can grow into incredible amounts so she kind of takes that approach with real estate investing. Like again she's not trying to do super fancy full-time investing strategies, she's just getting a good return on investment that can give her an incredible retirement someday.

So that's what I loved about the show and I wanted to make that point I forgot earlier so I’m throwing it in now.

Josh: Agreed, I think it's awesome. Alright well if you're listening still and we hope you are definitely be sure to keep up with what we got going on, on BiggerPockets if you don't have a membership jump on today, create a free membership or of course feel free to explore our paid options as well at BiggerPockets.com.

Beyond that definitely make sure to follow us on Facebook, Twitter, Gplus, LinkedIn, now Pinterest we’re sharing stuff on Pinterest all of a sudden my goodness. But with you we like to share our content through various channels and we’ll do different deals and kind of fun stuff through these individual different networks as well.

So if you're active on any others definitely check us out. But that's it, get out there, make it happen, learn something today, connect with somebody new this week, and want to wish you lots of luck and we'll see you next week on Show 081 thanks for listening I’m Josh Dorkin signing off.

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