BiggerPockets Podcast 085 with Mike McKinzie Transcript
Link to show: BP Podcast 085: Hybrid Investing, Long Distance Rentals, and Property Management with Mike McKinzie
Josh: This is the BiggerPockets podcast show 085.
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Josh: Hey, what's going on everybody? This is Josh Dorkin host of BiggerPockets podcast here with my wonderful host Brandon Turner; talking to you, live from the road what's up Brandon?
Brandon: What’s up Josh; I am on the road I'm actually in the Dickinson North Dakota right now.
Brandon: Which, is a fascinating city.
Josh: Yes if you would call it that I think there's like 19,000 people in that bustling metropolis.
Brandon: It's amazing yeah I'm driving across country now to go see my family so I’m excited for that.
Josh: Awesome, awesome man very cool so we’ll make this intro pretty quick as a result. Today we've got a really, really cool show too but before we talk about that why don’t we get to today’s Quick Tip, wow talk about coordination, we don't have much.
Brandon: Yeah there you go.
Josh: Alright guys.
Brandon: Alright today, you got it?
Josh: Yeah I’ll let you.
Brandon: Take it, it’s yours.
Josh: Sure just come on, alright today alright guys we talk about keyword alerts a lot here on the podcast and on BiggerPockets for those unfamiliar. Keyword alerts allow you to get instant notifications when certain keywords are mentioned on the forums. This week we launched a new feature within the keyword alert system and that's the ability to use the negative keywords.
In other words if you want to be notified when the word Washington is mentioned but not when Washington DC is mentioned you could set up a keyword alert for Washington and add a negative keyword for DC. This way you can avoid getting notified about DC when topics come up that contain threads that aren't of interest.
So check that out today at BiggerPockets.com/Alerts and while you're there you can also check out the guide we just put together the ultimate guide to growing your business with keyword alerts are written by Mr. Brandon Turner, so definitely be sure to check that out it's really great nice work on that Brandon.
Brandon: Thank you very much I wrote it in the car.
Josh: Well done that's awesome. Well why don’t we get to the show man we've got the got some good stuff today and let's get going do you want to lead in here?
Brandon: No you take you introduce Mike.
Josh: Oh, alright. Today on the show we’re going to be talking about buy-and-hold investing with Mike McKinzie. Mike's an investor in Southern California who invests both in-state and out-of-state Mike’s a really good guy with lots of experience so those looking to either get started or improve the rental property business definitely want to pay attention. And with that why don't we bring Mike on and Mike, welcome to the show.
Mike: Well thank you for having me.
Brandon: Awesome, awesome let’s start this thing off with the way we always start these things off. What is it that got you into real estate investing? How did it all begin?
Mike: Well you could probably say I was actually born into it, from my very earliest memories my father was a realtor.
Brandon: Okay, that’s nice.
Mike: So we had to phone lines in the house back in the 60s which was very unheard-of back then.
Josh: Yeah, yeah.
Mike: One was dad’s real estate phone so, him and my uncle and some other relatives in my dad’s generation were realtors before, them they were farmers, and they owned hundreds of acres in Southern California. And they subdivided I mean I have some pretty wealthy relatives, just been real estate in California since probably 1910/1920s.
Josh: Clearly with hundreds of acres in So Cal you have some wealthy relatives but yeah. No, that's cool so you guys you’ve got it in your blood and what got you to take that step I mean did you become a realtor and follow the path?
Mike: For the first two steps of course was as a teenager my dad would have me go out, mow the yards, paint the houses for sale that were vacant, everything that you would do with a house I was doing as soon as I could drive; the lawnmower or the weed whacker in the truck and go out take care of a property that was vacant, that needed to be cleaned up before it close escrow.
My dad had a few rentals, I remember taking a garden hose at the one because it had a concrete foundation, it was that dirty. That same house I was pulling wallpaper off the wall and having cockroaches rain down on me. So everything involved with actually owning rental property I was doing as a teenager before actually owning anything.
Brandon: Which is a good way to start I think for people I mean I like to tell people at all time is go get your hands dirty if you know you’re just getting started. It’s not always fun but that’s kind of how I did and worked out well for me I guess. So question; so you said your dad was a real estate agent but was he also then I mean your family subdivided. Did your dad also own properties so did you like get raised with that as well?
Mike: He did not own tracts we did a few spec homes.
Mike: It was more of his cousin and some of the other family out in the Inland Empire area that did some developments, farmland, actually sold the land to the Federal Government and part that's now a National Wildlife Refuge land that was bought from my family. And one of my dad’s- he was my mom’s niece. Her husband, his dad actually had a house moving business where they were actually move a physical house one lot to the other lot.
Mike: Which is really hard to do nowadays but in the 1930s and 40s you would have a 100 sq foot house you could move.
Josh: And the highways are little busier these days.
Mike: So all kinds of aspects my uncle was an agent in the 50s I think my dad got his license around ’61 and before that he was in construction.
Josh: Nice so what was the first thing you did in the ‘bis like outside of mowing lawns and all the odd job as like a budding professional so to speak?
Mike: Well with my dad being in the business he got record got word of a rental in San Bernardino for $30,000 that would rent for $500, and he talked to the seller and the seller didn't mind carrying for a short period of time and carrying 100%. So I bought a $30,000 house with no money down.
Brandon: Nice, nice.
Mike: So the rent of course covered the mortgage payments and I think I borrowed about $2000 for my dad for carpet and paint I was 20 years old. And the rent I paid him back and a year later I sold for $50,000.
Josh: Oh right.
Mike: Paid the seller off, paid my dad off, took the proceeds from that and bought a triplex.
Mike: And I was on my way.
Josh: That's great, did you have a plan or were you just kind of opportunity fell onto your lap, you did the first one and then why don't I buy a triplex or was there a path?
Mike: There was a path but it wasn't written in stone. It was just to accumulate the buy and sells so I’d buy never a target like 10 doors in five years or anything like that. But I did want to keep building as I went. And I sold the triplex and bought two four-plexes.
Mike: And this was in the first three years, and then along the way you pick up a house here or a house there. I picked up a HUD repo in Fresno back when HUD would sell to investors nowadays they won’t. They only want to get owner occupants in.
Brandon: Well a question for you about that you bought the single-family then you sold that and you bought the triplex and you sold that and bought two four plexes that was right, right? I got that.
Brandon: Okay so did you have them all rented out like did you have the rental houses rented when you sold them, did you sell them to the investor then or did you just like flip it, fix it up and sell it as an empty house; do you remember?
Mike: I bought them empty and I filled them up.
Mike: Though the triplex had one empty unit and two that were occupied. And I owned it for like 12 to 18 months so and I raise the rent a little bit $10 a month, just to raise the value of the property.
Brandon: Yeah that’s cool. I always call that Hybrid Investing I think it’s a term I coined and I said anyway. Yeah where you’re like it's like a rental and it’s also a flip, it’s kind of taking the benefits of both combining them into one thing. And it’s kind of the whole Nickerson how I turned $1000 into well however many million depending on what book you read.
Like yeah I call it Hybrid Investing because it’s the benefits of both flipping and in buy-and-holding I love that strategy a lot so it’s cool to hear that you did it successfully at least when you were getting started.
Josh: Hey Mike why did you sell them so quickly 18 months; I know there were no flipping shows back then, there was like that wasn't like I’d say popular mainstream thing so to speak. So why not hold onto properties what was it that inspired you to dump them and move on to the bigger and better ones?
Mike: Well there’s several metrics you go by but I figured if I made $20,000 or $30,000 in a year I’m not going to be able to do that again. And that property and I also had my license as a broker at the time so I had a lot of inroads or better investments. But if you maxed out the appreciation- if you appreciate 50% the first year, you’re probably not going off [Inaudible] [10:18] second here.
Josh: Got you.
Mike: And if you move areas from San Bernardino estate of Fresno, you’re moving marketplaces and trying to get the better market.
Josh: So were you aiming for appreciation when you had purchased these or was it let me buy them well I'm guessing you weren't aiming for cash flow or otherwise you’d have held on to the properties.
Mike: Cash flow just enough to cover the expenses, the mortgage. But yeah it was more of an appreciation buy so I could buy more properties.
Josh: Okay so you just wanted to get the appreciation sale hopefully you’d appreciate in X amount of time sell and keep going, keep going, keep going. And what was the plan when the market turned around and went the wrong way?
Mike: In my investing career we’ve had two pretty bad markets went the wrong way in the 90s, do you remember that 1991 and then and…
Brandon: I was six years old.
Mike: 07/08, those are when you just you buckle in and you just hold.
Mike: Values go down about rents really didn’t.
Josh: Got you. On the show and generally I tell people appreciation is a bit of a gamble, I still believe that and obviously it's been working for you so it certainly works for a lot of people, but a lot of people also lose their shirts. So it worked which is fabulous. Absolutely fabulous, what you do today; let’s kind of jump ahead.
Brandon: Before we jump I just want to point out one thing that I think you did right there Mike that I love is that if you're going to speculate- not even speculate if you’re going to count appreciation right, you did it the right way in as you bought property that did at least break even right. It’s the people who’re like, “I’m going to buy this property and it’s going to lose $1000 a month in cash flow, but it's okay the market will bail me out of a bad deal.” So like yeah, I love that idea of buying something.
If you can at least break even, worst case scenario 30 years later the mortgage is paid off and I think that kind of the key I think going back to that hybrid investing idea I think that’s kind of the key there.
Josh: And the other thing really quick that I like that you did was you saw that you were making profits you saw I’ve appreciated 50% or whatever it was and instead of getting greedy you locked in your profits. And that’s something that I think a lot of people don't do. It’s they’re like, “Well it’s up 50% it's going to keep going, it’s going to- and it does until it doesn’t.
Brandon: Yeah well on that question I want to ask both you guys a question; what would you do in this case so this is actually a real life situation that I'm going through right now. I got a property that I forced appreciation up by fixing it up. Right so I made it better it's a fourplex or fiveplex and a lot of people the site have heard of the story.
I mean as I’ve bought it and fix it up but now I got the question; I can either hold on this thing for cash flow but it's never going to climb in value again. I got to where it's going to get and now it's there forever or at least only rising with inflation. Or I can take the profit out right now and go put in something else.
What would you do and how would a person like me- how to decide which I should do?
Mike: Well my advice would be you have to locate the property that will do better than what you have. If you’re just going to trade one apple for another apple, you’re not gaining anything.
Mike: But if you can actually let's just say you take your value and your return you get your cap rate and let’s just say you’re getting 9% then you’re going to have to find something at least 12% to make it worth the effort and the headache.
Brandon: Yeah that makes sense. Yeah and I go back and forth I mean I might cash flow anywhere between $700 and $1000 a month on this property, or I might make 30 or 40 or $50,000 in profit. So like I can do the numbers and I go back and forth and it's not black and white. A lot of people like to think real estate’s black-and-white but there’s a lot of gray area there.
And that's my question is if I got that cash and paid the taxes on it or if I did a 1031 either way like am I going to find another property that’s going to produce as well of cash flow or that I can then force appreciation up again? And I guess that's the game we play.
Josh: I think Mike nailed it and for me well you know my answer; my answer is, unload that portfolio and come on down to Denver let’s go my friend.
Brandon: Josh wants me to get rid of everything and come hang out and play and hang at the Denver offices of BP.
Brandon: Yeah, yeah some day.
Josh: Alright so let's get back to my question Mike what are you doing these days obviously you started you’re doing Brandon's hybrid investing.
Brandon: I coined that.
Josh: We’ll allow him to feel special about coining it. What's your focus right now?
Mike: Just right now I'm adding to the portfolio, my wife and I are retired; I retired at 50 not by choice but because of the passing of my mother. Unfortunately she was my father's caregiver he had Alzheimer's so I had to leave Colorado I was down in the Durango area and move back I'm sitting now in the house I was born in.
Mike: My mom was pregnant with me when they moved into this house well I am really back home again. When mom died and then dad died two years later their trust was really in a shambles. Unfortunately and this is good advice for any investor out there, always have an estate attorney that does your trust who’s younger than you.
My parents’ estate attorney was older than them so he retired long before they died. So they drew their trust up in 1985 and died in 2010 and 2012. So there was a lot of legal work and I am still today fixing some legal items regards to their trusts.
Josh: Interesting, so never have a lawyer write a trust that's older than you and I like to say never have my mom’s getting some eye surgery and she's of retirement age and she loves all these doctors who are right around her age. And she's like, “They feel like they're the right age,” I’m like, “Mom, the guy is 65 years old, you can't see none of your friends can see.
And you’re going to let a guy who can't see probably who’s had two or three surgeries do your surgery? Get a guy who is in his 30s or 40s doing it.” “Oh I don’t know!”
Brandon: That’s funny.
Mike: When you think about that when they drew trust there are three children, but two of us that are the heirs to the trusts. Neither one of us were married. And in the time being we both got married had 13 kids between us they never changed the trusts. Update your trusts every two, three years.
Brandon: That’s good advice.
Mike: When things change, your kids get married; you have grandkids maybe great grandkids. Always be updating your trusts.
Josh: Hey Mike so you're doing some buy-and-hold now you were doing the hybrid stuff at some point I'm assuming then you started to actually hold onto properties for longer than 12, 18 months things like that.
Josh: When did you decide to settle down and actually hold onto some of these properties long-term?
Mike: I actually have a house now that next year I’ll go 30 years.
Mike: So I do hold a few.
Mike: For whatever reason. The way I look at it, let's just say I bought a house for $150 that rented for $1500 20 years ago alright. That house appreciates up to $400,000 but I'm not going to get $4000 for anymore am I?
Mike: The rents are not going to go up like the appreciation does especially in California. So when the rent gets to about 0.5% of the value it’s time to move that house and buy something else because we can get one to 1.5% in lots of places in the United States.
Josh: Got you.
Mike: So the appreciation reaches a point where I have to get equity. My return on the value not my purchase price but the value is just not worth it.
Josh: So you wait for the percentage of rent to drop to where your lower limit is that half percent. And when it gets close to it or thereabouts you just if it's a long-term hold if you're sitting on an appreciation- if you're sitting on a buy-and-hold property that begins to appreciate, that's when you know you've got the trigger to start looking to unload it.
Mike: Yeah and I did that this year earlier.
Mike: A house in the town of West Covina.
Josh: Oh yeah.
Mike: I was getting $1600 a month and I had a local broker run an idea for the CMA audit he said it’s probably worth about $350 and I’m thinking, would I pay $350 for a house today that rents for $1600?
Mike: No. I ended up actually selling that and buying nine other houses.
Josh: Where did you buy those like Apple Valley are up in the… inland empire.
Mike: Actually I bought one and one in Texas, one in Phoenix and seven in the Fresno area.
Josh: Got you, okay so distant properties, okay.
Mike: All distant properties yes.
Josh: Okay so let's kind of we’ll get there in a second. What’s your buying criteria, what is it that gets you to acquire property for hybrid or long-term investing?
Mike: Well real long-term investing, anything built after the year 2000, 1% rent and every house that I bought this year already had a tenant in it and was under management.
Josh: Okay so 1% under management it's no more than 20 years old, 25 years old and it's got a tenant why do you like those properties in particular?
Mike: Well as we’ve talked in BiggerPockets we look at 50% of the market roll rent over a period of a long time will end up being your expenses. But I don't want to buy someone else's 50% and if a roof is 25 years old guess what I bought the price of a new roof.
Mike: That’s going to be due in five years.
Mike: Whereas the previous investor he got off scot free without having to pay for any of that. Well if I can get a roof and things that are new or newer then it puts off that advertising… A roof is 30 years, we kind of know that basically give or take five years. If I buy a house with a 30-year-old roof I’m going to have to put a new roof on it.
And my last roof was $8000 saw that’s it if it’s going to rent for a $1000 a month that’s quite a hunk for your annual income right there.
Josh: Yeah no, that makes sense.
Brandon: I want to go back to your- you mentioned buying at a distance you bought one in Texas and elsewhere. Did you buy a few like a turnkey company or did you pick out the location and pick out the property yourself how did that come about?
Mike: The way that I buy long distance is that my property managers and most of them are free at large have hundreds or thousands of houses under management. They have investors who want out.
Mike: And then they’ll send an email to all their investors so I get emails every month of we have an investor, the last house in Texas I bought was owned by somebody in Washington, had the tenant and it was built in 2007, and they needed out for their personal reasons. I mean their net was like three months rent was our debt.
So I don't know their personal story but I just went and paid cash for it because I'm easily going to make eight or 9% on it.
Mike: And it was built in ‘07 so what is there to do on it?
Brandon: Yeah that’s a cool strategy just to call the property manager and ask them or get an email from them and look for properties that way. It’s kind of a creative method.
Mike: Well it wins to everybody because they do it for 3% instead of 6% for the seller. And for me the tenant’s already there, for the management company they just keep managing it, and the seller usually gets a very quick sell. Four months of marketing time.
Josh: And I think that's a strategy I used when I had to get rid of some stuff, I called every property manager and let them know, “Hey I've got these properties I want unload, you guys have people that you’re managing.” I think it's effective for both directions if you're looking to sell or you're looking to buy you’re going to put the word out to the managers in town that you're in acquisition mode.
And a lot of them obviously have licenses so they're happy to help you out in some way shape or form. So yeah I think it's great and as a strategy for finding leads, PMs are definitely a great resource. So are you still using property managers or are you doing your own management or how does that work?
Mike: I manage one house. All my other houses have property managers and I've been very lucky with good managers. Unfortunately I have bought houses that came with management that I had to fire because I didn’t like them. I ran a management company for several years, I know what I want.
Josh: Yeah, yeah could we talk about that because I think we've covered it a little bit I’ve got a big pet peeve with a lot of property managers because I think a lot of them don't do their jobs. But as a former manager and somebody who now uses them, what would you say are the most important questions for a landlord to ask property managers when interviewing them?
And I say that because first off I mean that the interviewing them part I think a lot of people think that the property manager is going to interview you and ask you about your properties which they will, but you have to interview them as well. You need to make sure that these people are doing everything that you need and want them to do.
And it's extremely, extremely important that you find the right company or you can find yourself in a lot of trouble. So what are the big things you would want to know from a property manager?
Mike: The very first thing I ask property manager is I want the name of three investors that you manage for and their email and phone number. And you tell them that I’m going to call the,.
Josh: That's a good one.
Mike: And I want to hear from them what the good points and bad points of your company is.
Mike: The next question is everything involved with collecting rent, if they own their own repair company, which I don't like.
Josh: I agree with you on that by the way.
Mike: If they do direct deposit for the tenant or do they actually go to the door and collect rents. There’s the whole process. Go ahead Josh.
Josh: Hey Mike so you would-and I agreed you said you don't like it. Why exactly for folks listening do you not like property managers to have in-house crews?
Mike: Why do I not like it?
Josh: Yes sir.
Mike: Because it's not objective.
Mike: I mean I don’t mind if they have a crew that goes out once a year and replaces smoke detector batteries or HVAC filters that kind of thing go ahead and do that. But one company in Texas they manage about 5000 houses so obviously they could buy filters and batteries in bulk and go out and I get the deal on that too.
Josh: Sure, sure.
Mike: For $80 they go visit the property, change up the batteries, all the filters check the property once a year and that's good insurance.
Josh: Yeah and my reason is the same I just had an experience with a company that they had in-house crews and they were magical repairs at least from oh yeah we need to do this and this and the bids didn't even come close between them. And objective reasonable mid-level outside companies and their companies they were bidding many more hours much more work on similar projects.
It just didn’t make sense; I do like the objectivity as well so I think that's a good piece of feedback.
Mike: I make my property managers hire outside plumbers, electricians handymen.
Mike: That’s just flat out the way it is.
Brandon: What I find interesting about that is I've heard that as a sales pitch from certain property managers like I interviewed a few I don’t two months ago and like one of their big like reasons why I should use them is because they have in-house maintenance. So we can get it done cheaper and faster so kind of cool here and the other side of that is, maybe it's not such a good point that’s not such a sales point for an investor. That’s cool.
Mike: I mean I can see if you have somebody on call for that 2AM emergency.
Mike: A real quick toilet something but if I’m going to put a roof or if I’m going to replace the HVAC system, I want somebody outside the management company to do it.
Brandon & Josh: Yeah.
Josh: Or at the very least have been bid evenly up against everybody else.
Mike: I still prefer an outside company to do it. I can go to the state contractors forum, verify their.
Josh: Yeah that’s for sure.
Mike: And make sure that as well done and get three bids, just the whole 9 yards to make sure it's a good job.
Josh: Alright so we’ve got that you mentioned two using the outside contractors and the first was you get the names of references. What else might you want to ask?
Mike: Communication with me on every issue about. Some property managers will only communicate once a month with a statement.
Mike: I don't know that someone moved out, I don't know that we had to do a $200 replace a toilet or I really want communication on every issue that's going on. It doesn't have to be a long phone call I could be a short email, but just let me know what's going on.
Brandon: Yeah, okay I think that’s good.
Josh: Yeah that’s good. So asking what’s your communication style, how do you guys- when do you get in touch with me, what would you inform me of, how often would you get in touch with me, what types of things would you let me know about? Those would probably be the questions to ask yeah?
Mike: Yeah and if there is an eviction in process let me know where we’re at, in every state’s different if you have a court date, if you have a move out date, I want to know what dates are.
Josh: Got you.
Brandon: Well so on that how would you actually prefer it Mike, how would you want a property manager talking to you, and giving you feedback? Like you want to call them, do you want them to call you, email? What's the best way that you like the ideal situation?
Mike: For me it’s email because this accessible from my iPhone, my iPad, my desktop.
Mike: I prefer email because then there’s actually a written record that I have a record of that I put in the file and say I was told on August 3rd that this tenant’s moving out on August 31st.
Mike: Phone calls are nice but then it’s like well he said/she said.
Josh: Yeah agreed.
Mike: Yeah there's not a for sure well you said September 30th, no I said it’s August 30th.
Mike: So the email is just as a solid and you can email back to them and if they’re busy or whatever it’s waiting for them to answer.
Mike: And it’s a good record keeping.
Josh: Yeah the record keeping is a great point about email I agree.
Brandon: Cool. Hey let's go back maybe a little more foundational on the idea of having property management because Josh is more of an advocate for property management I mean even though he has a problem with them, you seem to at least get out of your business work on your business that that whole thing.
Josh: Yeah, yeah.
Brandon: Right I still manage or at least my wife manages all of our properties maybe I can ask this; convince me I mean like Mike convince me why should I do what you're doing, I mean you’re retired so you probably have time that you could handle your rentals but you choose not to. Why should I choose not to versus choose to?
Mike: Well there again depends on what you and your family want to do with your time. Last year I was actually in Russia on a cruise when one of my rentals failed Section Eight Housing Inspection.
Josh: Hey Mike really quick I think there might be a sound issue you said you were on a cruise in Russia.
Josh: Yeah okay I was hearing correctly then my headphones weren’t broken somebody willingly went to Russia to go on a cruise okay just making sure.
Mike: We actually sailed out of London and did a whole Baltic Sea.
Brandon & Josh: Cool.
Mike: But we spent three days and in the port of St. Petersburg.
Mike: Russia, and I get an email, “Your house didn’t pass Section Eight.” And it’s like I didn't know there was an inspection coming.
Mike: And what happened there again with my parents’ trusts didn't have the correct address to send it to.
Josh: Oh yeah.
Mike: But the bottom line is my property manager one email to them it was all taken care of,
Josh: Hey along those lines…
Brandon: You convinced me.
Josh: Well but to the negative along those lines, I missed a hearing about an inspection situation, I never went to court because a manager failed to notify me and I got into a lot of trouble because of it. And it cost a lot of money and more headaches than I cared to even think about. And it was because the property manager made some mistakes and wasn't good on notification things like that.
So that communication is really, really important you really have to make sure that there's a level of trust there. Think about the case of an eviction hearing or something else where a judge demands that you be there and you don't show up well that's not good. Angering judges is never a good thing so yeah I mean and managers hold those keys sometimes.
And if they're not communicating effectively you can really find yourself in trouble. So back to that communication issue I just thought it was important to harp on it.
Mike: Well remember, you are the boss of your property manager.
Mike: If you’re willing to fire them and not give them a third or fourth write-up I mean they mess up once it's like you're on the edge and second time I fire them. I have fired four in the last five years.
Josh: So Mike let’s go back to Brandon then, Brandon’s living in Podunk Washington I mean there are six in his town, one of which is the property manager and he interviews them and turns out the property manager’s not great. Of course this is hypothetical because I'm not quite sure what's happening up there.
So but say there is a small town and there's really only one property manager around and they're not doing a good job so I guess then you're stuck managing your own properties now right?
Mike: I guess every town – not every town in this country is going have a good property manager.
Mike: I lived in Podunk Colorado, little town Bayfields between Pagosa Springs and Durango, population 1200.
Brandon: Wow that’s smaller than mine.
Mike: And my property manager manages 40 houses but he tells me that I pay my home nuts, my home expenses with property managements and I do a little bit of loans and selling real estate on the side for my investment. So if I lose a management property that affects my groceries and my utilities.
Mike: But he does a wonderful job, great job, direct deposits of my rents usually within five or 10 days after he collects it. He does all the inspections, he doesn't charge any extra to get in new tenants; it’s still the same flat fee 8% a month.
Brandon: That's great.
Mike: So you have to look for them.
Josh: Yeah, okay fair enough.
Brandon: Maybe I can ask you this since I've never had property management, what exactly does a property manager do in terms of – I mean maybe you can just educate me here because I don't know. What can I expect them to do, and what do I expect to do for myself, for example let's say I get a letter in the mail saying that my insurance isn't working.
Or there’s something wrong with my insurance that is an inspection that has to be done or something needs to be painted. Is that my job or will they get the letter? I mean there’s a million scenarios I could throw at you but I’m asking kind of like what's their role versus my role as the owner?
Mike: Well you're still the boss of your property manager and in essence thus the asset, you’re in charge of that. I make my property managers do everything. I don't want to see the house, I don’t want to see the tenants, I don't want to have to drive by anything. So collecting that rent and effecting their seven, eight, nine 10% that's easy.
Any Joe Blow could do that. It’s when there's something else that needs to be done when they actually earn their money and that is a HUD inspection, or an insurance inspection. In the case of Colorado my irrigation system for my yard has to blown out every fall or it'll break in the ice and then blown out every spring.
And he takes care of that, he orders it to be done by a professional but he knows it needs to be done I don’t need to worry about it.
Josh: Yeah and I’ll all chime in a little bit Brandon. So where Mike says he has them do everything, there's really everything in between I mean you could hire a manager just to go and collect the rent. You can hire them to do the screening, I mean presumably if you’re going to hire one you’re going to want full-service.
But you may want to handle all the legal and the accounting and billing and whatever it is you may want to deal with that yourself so the key is to kind of figure out what it is that you personally can't let go of or don't want to let go of maybe until you establish some level of trust you won't. And then when you get to that point and say, “These guys are rocking and rolling and everything.
I don't have to remind them anymore to blow out in the fall and in the spring I don’t have to remind them anymore to make sure that trees are being trimmed and things like that, then you hand it over. But however you really want to do it, it’s going to be up to you and like base that upon your level of involvement or what involvement you want to have.
Mike: In Los Angeles you could hire one just to get you a tenant and then they’re done.
Brandon & Josh: Yeah.
Mike: And here it’s 50% of the first month’s rent and they’re done.
Mike: And some landlords will spend more than that on their advertising if they’re going to go on the LA Times or in a magazine or something, there’s companies here 50% the first month’s rent and then you’re on your own every month.
Brandon & Josh: Yeah.
Brandon: Yeah one of my concerns and I mentioned this on a previous podcast well my concern is there’s properties of mine that I mean I have like in the low 40s in number of units and so like it's not that many. Yet there’d still be like there's been four months since I driven by one of my properties and I’ll happen to drive by and the lawn isn't been mowed in four months.
And I’m like shocked and like oh man, so then I think well if I hired a property manager that has 500 units or 1000 units, how are they ever going to be able monitor those things or like there’s a broken window in the front of their house and nobody called to tell me that. Things like how do I trust that a property manager is going to do that kind of stuff to drive by and take care of my properties since; I can't even hardly seem to do it.
Josh: I think that's why Mike asks for three phone numbers of three current tenants and…
Brandon: Yeah, I guess makes sense.
Mike: Your property manager no less than twice a year needs to drive by property and not a scheduled time just random. I don't care if they’re managing 10 houses or 1000 houses. If they’re managing 500 houses they got a staff, they’ve got a staff that drive around do a visual inspection.
Mike: Some of my rentals are HOAs and they’re really strict I mean I've had you got dandelions in your yard get rid of them. I mean so make friends with neighbors.
Mike: One of my houses in Colorado, we’re friends with the neighbors and they say, “Your house is great, your house is looking good.” Make a network out for people there.
Brandon: That's great I mean really the neighbor idea has been a really good one. Somebody suggested that to us back six months ago or so, on the podcast. They said, “Go talk to neighbors on both sides hand out your business cards,” and we did that on one of our recent properties and sure enough they’ve been calling and complaining about this or that so then we can jump on the tenant right away. So that’s kind of nice. What I’d like to do is yeah get a manager that will do they’ll go next door and hand out their cards.
Mike: Right, right.
Josh: One that's one of those things that I kind of worry about, like I think that’s something an owner is going to do. I find it unlikely that that’s something that a manager would do. I don’t know it just doesn't seem like something that a typical one would do. What do you think about that Mike?
Mike: When you say do, you mean drive by the property?
Josh: No, no know having the property manager buddy up with the neighbors and make sure that the neighbors can keep in communication. I know when I had property managers even the ones that I thought were decent I was one always doing it and that was never something that they did.
Mike: I guess I got lucky because mine do, do that.
Josh: Oh that’s great.
Mike: And they actually find out which of the homes on the block are tenant occupied.
Mike: They’re trying to add that to their management lists.
Josh: Yeah no that's great.
Mike: And when you have somebody that's managing 5000 houses, a lot of times they’ll have three or four on the same street.
Josh: Yeah that makes sense. Hey so you talked about buying at an HOA you’ve got a couple of properties you said that are in an HOA. Let’s kind of chat about that for a second here; I'm big on not buying in HOA, I worry too much about all the rules and limitations and restrictions and things like that. Since you have these properties, I'm guessing you don't as much.
But what's your take on HOA versus non-HOA and what would you recommend especially maybe a newer investor d?
Mike: A lot of times an HOA can be a problem if they’re very, very strict. But a lot of times they also add value. Most of the properties I own in Texas they have an HOA and the HOA is a park and a pool and basketball, tennis courts, and its $300 a year. So you're only looking at $25 a month. And it adds value to the tenants and to future buyers of the house.
So you just take the good with the bad if they complain about a bush or a weed, I’ll put up with that. And yes I do get those emails, about your yard’s turning brown or whatever. But that's good, that helps keep the whole neighborhood value up. .
Josh: Sure, sure okay so I guess then to the question on a newer investor you'd probably say yeah see what you can deal with and maybe look at those CCNR's and talk to people who are in the HOA and find out you know how active proactive or negative potentially the HOA is.
Mike: I don't like condominiums, townhomes because the HOA expense is so high.
Mike: So I always shy away from that, I've never had a condominium rental. But where there’s a large track, a builder track of 500, or 1000 or even 2000 homes the HOA is a different animal than it is in a condo complex.
Josh: Yeah that makes sense. Alright so let's look back at your career now, what's the biggest mistake you ever made?
Mike: I had a realtor friend who said, “hey Mike let’s go buy this house we’ll do really well on it.” And I went, “Okay I got a little cheap house I needed to sell, I’m going to buy this house.” So I sold this little 800sqft house and then bought a 1400sqft house $110,000 in Riverside. And five years later sold it for $80.
Josh: So your biggest mistake was not partnering with your friend, it was buying the wrong house what was?
Mike: It was just I took his word for it because he was a realtor in the area and I was 30 miles away and I really didn't do enough due diligence on the neighborhood.
Josh: Okay so you gambled and you lost that gamble.
Mike: $30,000 yeah.
Josh: Okay, okay which is the price you pay I mean with appreciation right I mean if you’re shooting for that appreciation. Now let me ask you on that house that you sold for 80K, was it covering expenses as a rental or a negative?
Mike: It was taking too much, if it’d been fully filled with the good paying tenants, I would've made about $50 a month.
Josh: Okay so overall then it was a bad buy not only because it was in an area that just was probably going to go the wrong direction but also because ultimately it was a property that wasn't in demand.
Mike: Yes and he said it would be worth $150 in a couple of years.
Josh: Yeah well.
Mike: His crystal ball was fuzzy.
Josh: Well and to the listeners this is why I warn especially new investors, until you really kind of know what you're doing, cash flow is a much better strategy at least in my personal opinion than the speculation because this can happen, this can happen to anybody. And even had Mike done his own homework it may have turned and gone the other way you never know.
Mike: It was just not quite, it was a lower ‘B’ class neighborhood. And I don't like to buy in those neighborhoods unless it’s some spectacular deal.
Mike: I mean if that thing has rent for $2000 a month I would have.
Josh: Hey for those listening what is a lower B Class neighborhood? What are the different classes of neighborhoods? Can you maybe fill us in on that?
Mike: If you look at the value of the house and the rental amounts class ‘A’ is almost always 1% of the value or less in rent. In other words a $200,000 house would rent for like $14 or $1500 that’s your class ‘A’ range, class ‘B’ you’re going to get one to 1.5% usually closer where you’ll pay $70,000 and maybe get $900 rent. That would be a class ‘B’. Class ‘C’ is when you buy these $40,000 houses and rent $795.
Josh: Now is it only the ratio of I mean is that what determines it or is it the quality of property, is it a white-collar/blue-collar and unemployed I mean what else determines the neighborhood; crime stats I mean?
Mike: Yeah if you look at again like you said blue-collar/white color you can still have a solid blue-collar/middle-class/ upper middle-class neighborhood.
Josh: You won't have a white-collar neighborhood, probably in that range. In different areas of the country as we all know from Texas to Michigan to Virginia to California you could get a $300,000 dump in California and you could get $100,000 colonial mansion in Alabama maybe.
Josh: Yeah, exactly.
Mike: So the price itself is a hard factor because areas are so different. But if you look at the rental amount of income it's usually a really, really good key is not the only key.
Josh: Got you.
Mike: But everything I’m buying in Oklahoma, Tennessee, Arizona, Texas, 1% even a little bit less, maybe 0.9 or 0.95% of my purchase prices as a rental amount.
Josh: Got you, good, good. Alright a couple of other questions, how are you funding your deals; I mean presumably it's all cash that you made from previous deals and you're just recycling it back in; is that right or are you actually taking out money to get loans and using new capital?
Mike: Actually right now I’m doing quite a bit of seller carryback.
Mike: Finding a lot of sellers that want to carry because they know that they can’t get for 5%. I mean by market account or T-bill accounts.
Mike: And they love that 30 years of the straight income they know that they’re going to get that check every month and for them there's no tenant, there's no property taxes, there’s no problem it’s just a straight income.
Brandon: So are you actually like when you search for a property are you searching for properties that have that or are you just stumbling across it accidentally?
Mike: It’s my networking out there, people are telling me that a family member of theirs or whatever they have a house that’s free and clear, they inherited. They don't want to be landlords, but they’d like the cash flow and you give them 20% down maybe, and then they carry it and they get their check I rent it and I get my PI payment less than 50% of the rents it’s usually a pretty good money making deal there.
Brandon: Cool, well awesome well we probably should at least start moving towards the direction of the wrapping this thing up. I have a few more questions here I'll I want to get to but the maybe like the last thing I want to ask you before we get to the Fire Round and The Famous Four and that is how to deal with things when the going gets tough.
Like obviously you’ve been in this business a long time, it's been a career for you so you’ve seen good, bad things whether it's happening in your personal life, happening in your business life, I mean how do you deal with just tough times and when you want to give up or just things are hard?
Mike: There's been several times in my life, my divorce being one where I actually had to rent a room to live in Colorado, I mean that was pretty bad because I was giving her all my money. There are times you have to really buckle down, maybe work two jobs you do a lot of different things just, I kept my rentals during that time but they were pretty much of a neutral cash flow.
And she was getting whatever positive it was, there’s just things you have to do sometimes you move back home. I moved back home for 18 months when I was 40. You do that just to get re-grounded again and refocused. There’s tough times out there, and you have to kind of walk through them when they come, find ways that you can maybe live in a mobile home.
Or you live in a camping trailer, I know where I lived in Colorado people actually had to live in tents out in the forests until they get a couple of months of pay saved up to rent a house.
Josh: Yeah it’s true listen to me when times are difficult you do what you got to do to survive. So you were talking about you’re this landlord you got a bunch of property and you're sitting there and you’re neutral and you’re scrapping by to survive. I'm not going to say that that's the story of every landlord certainly isn't.
But it's one of those things where what bothers me so much is when the general public stops and says landlords are these rich SOBs that are just living a fat life while everybody else is scrapping by. And landlords really get bastardized by the media in the vast majority of cases. And I don’t know I mean I think you're kind of one of these cases where at least at that point in time you're just a regular guy who’s struggling to get by.
I mean you got a bunch of property but that doesn't mean you're this Trump who’s big making billions of dollars right. And I know I'm preaching to the choir because everybody listening to the show is in the investing space but I don’t know it kind of really frustrates me the level of disrespect that investors really get. And I don’t know, I just wanted to get it out.
Mike: Well the surprising thing is and don't have the stats here in front of me but I’ve read were around 50% of the rental houses in United States are owned by somebody who has one rental.
Brandon: Interesting yeah.
Mike: It’s just a little supplemental income for a retired couple or maybe someone inherited a rental and they’re not really real estate investors.
Mike: And that's the world out there. And then there are people they get into the business and don't know what they're doing and it’s frustrating for the tenants, the tenant wants to have good service. And then again as we know there are some difficult tenants too.
Mike: But all in all 90% of the tenants are good tenants and there's very little bad news it’s always this one that makes the news where this landlord’s kicking out this elderly gentleman or something, and that's one in a million rentals in that state but it made the news. So everyone thinks this landlord all landlords are bad because this one guy is not fixing this old man's house or is evicting him or whatever.
Josh: Right, yeah.
Mike: So you have to put up with that image.
Josh: Yeah well we can all work on it by running good high-quality rentals and taking care of our tenants and keeping the word out but I just wanted to vent.
Mike: No understand and even property managers tell me that some of their investors are hard to work with.
Josh &Brandon: Yeah.
Mike: They don’t want to send them a couple of thousand maybe they need for repair, and they always tell me they appreciate the fact that if something needs to be fixed I’ll either transfer them or mail them a check.
Mike: Get it fixed, get it fixed; whatever inspection I didn’t pass, you got to get it fixed.
Brandon: Yeah I think that's good.
Mike: As an investor fix your assets; keep them in good shape they’ll serve you in the long run.
Brandon: I agree, I agree. Alright cool, let’s move on to the world-famous.
It’s time for the Fire Round.
Brandon: Alright these questions we pulled them straight from the BiggerPockets forum so you may have seen them while you’re hanging on there. Number one…
Josh: Hanging in the forums really?
Brandon: Number One, what is your take on medical marijuana and tenants who self medicate?
Mike: I actually had that happen to me if you could believe it or not.
Josh: You self-medicating or you had to kind of do-
Mike: No, I had…
Josh: Well you own property in Colorado so yeah.
Mike: I had a tenant up in the Fresno area who had a permit to grow medical marijuana on the property.
Mike: And then the sheriff was contacted by the FBI because growing marijuana is a federal offense, even though it's legal in California. So I have a tenant who is legal in California and illegal federally, what do I do?
Josh: Well I don’t know what did you do?
Mike: I basically I’m a little more afraid of the Feds than I am of the state so.
Mike: I told my property manager I'm sorry but they cannot do that, I cannot allow them to do that on the property it’s breaking federal law. And the FBI threatens to take your house.
Mike: So it was like I hated California allows that, when you say what’s my opinion on medical marijuana?
Josh: Yeah and we know what your opinion is Mike. That's a big assumption but anyway.
Brandon: No that’s a good answer.
Mike: There are having had my two very sick parents and seeing the elderly people who were too sick to eat and they’re in so much pain I know that sometimes medical marijuana will give them an appetite a little bit. And it’ll ease the pain of their dying; they’re in a process of dying.
Mike: I know there's chemicals in marijuana that can alleviate that pain and the quality of life for the last two or three months. I can see where that could be -I don't mind that. But when a kid says I got a stomachache I want to a medical marijuana card, it’s like well aren’t we pushing the limits here?
Josh: Or they could just make it legal like they do here in Washington where Brandon is and that’s a wrap. Well and you know it's funny one of the most asked questions I get by the way when I'm not in Colorado whenever I'm out of town and I meet new people and they find out what I do, they always say oh cool, so like are you guys trying to get into that medical marijuana stuff where you’re well I mean like all the marijuana. And like so you want to grow in your house and stuff.
Brandon: You just stare.
Mike: I was just there in May and I thought I was going to see a pot shop on every corner.
Josh: There is a pot shop on every corner in Denver.
Mike: I was in Colorado Springs I didn’t see any.
Josh: Well that’s where the military is no, yeah now up in Denver every freaking corner there’s a pot shop it's crazy. It’s crazy. Alright investing in multifamily now…
Brandon: Or pay off student loans.
Josh: Or paying off student loans what should somebody do?
Brandon: Yeah somebody just out of college I think they were just barely out of college and they have a choice they can buy multifamily property or start paying their student loans off first. What do you think?
Mike: I would look at the interest rate, the overall interest rate on their student loans and buying a multifamily, because here's what I did; I needed a new vehicle, I could have paid cash for it. Instead I bought a house and my tenants buying my car for me.
Brandon: Yeah, yeah that is smart.
Mike: And at the end of five years the car is paid off I still have a rental.
Josh: Yeah, it’s right.
Mike: So if his multifamily makes him enough profit to pay off the student loans, if he or she can do that then he’s made a wash out of it and he has an asset with the loans paid off.
Josh: Yeah, no, I like that I think it's a smart approach and obviously it's going to depend on the individual. But yeah I like that idea for sure.
Brandon: Alright cool. Number three; now we know you're not a lawyer or a CPA so we’re [Inaudible] [55:43] with that but just out of your personal life when you get properties do you put them in LLCs, trust or how do you structure your investment?
Mike: Right now everything is just my name and my wife’s there’s no LLC, there’s no trusts there’s nothing. Everything is my name.
Brandon: Okay is there a reason why?
Mike: I had felt that as long as the assets were under $5million which is the capital gains inheritance I mean inheritance tax limit, there's not that much to worry about but I already have a package from my estate attorney to start my trust.
Mike: Because we’ve surpassed that number now so I’ve got to start looking at how that trust is set up. And to see how my parents’ trust worked it really didn't work very well.
Josh: Sounds that way.
Mike: I mean it created more work it’d have been easier to just have a will.
Brandon: Yes interesting.
Mike: And say half goes to her and half goes to him and we’re done.
Josh: Yeah for sure.
Mike: Because that’s what we’re going to end up doing is spending $20,000 with an estate attorney to do it.
Josh: Yeah makes sense.
Josh: It makes sense. Alright cool well last question here in the Fire Round the first floor tenant clogged the toilet, toilet overflowed and caused damage in the basement floor and ceiling. How do you quote a repair; do you get a GC, a mold removal guy, flood specialist, do you have your property manager just take care of it and tell you that this happened and you don't even deal with it? What do you do?
Mike: Hopefully I don’t hear about it until I have an estimate.
Mike: And the estimate, if it’s going to be over $500 I want at least two estimates. If we’re going over several thousand I want three estimates. I want to see what each one finds, what each one says needs to be done, maybe one of them is just going to paint it and cover it up, one is going to remove the drywall and put new drywall up.
And maybe one is go there de-mold everything put anti-mold coating on all the two by fours everything.
Josh & Brandon: Yeah.
Brandon: Yeah there’s a lot of different choices that could happen if it were you hiring like let’s say it's on the one property that you manage yourself, who would you call first in a case like that? Would you call a general contractor or?
Mike: I have three handymen locally here that I've used on my house I live in and each one has a specialty so I would just send one of them over say hey what needs to be done? As a matter of fact two years ago I had to put a whole new kitchen in a rental because it was a 1962 kitchen. And it increased the value of the house more than double the cost of the kitchen.
As it was summer and it was a bad kitchen now it’s a beautiful kitchen.
Brandon & Josh: Yeah.
Brandon: Cool, cool.
Josh: That’s great. Alright well let’s move on to the end of the show this is our last segment which we call The Famous Four.
Brandon: Alright these questions we ask every guest and we’ll see what you have to say about it. Number one, what is your favorite real estate book?
Mike: About the Richest Man in Babylon.
Josh: I love that book.
Brandon: Yeah I do too. Good choice.
Mike: It doesn’t say a lot in there but he talks about his land in other countries.
Brandon: Yeah, cool.
Mike: The rich man.
Josh: Yeah very smart book.
Mike: Very good, very easy read too it’s a quick read.
Josh: Yeah, yeah one hour pretty much two hour you can swing through it. Yeah it’s a great book. What about business books is there any business book that really stands out for you?
Mike: Think And Grow Rich by Napoleon Hill.
Mike: Is a very, very good book. There’s several good resource books out there; Real Estate Investing For Dummies where you can learn kind of the lingo and a little bit about the fields without any real direct knowledge. And then I think the book that you guys wrote, on beginning real estate investing is probably the best in the market.
Josh: Oh The Ultimate Beginners Guide are you talking about?
Mike: Yup. The beginners guide.
Josh: Hey alright.
Mike: For someone who's never ever bought a rental house it’s an excellent book.
Josh &Brandon: Thank you.
Brandon: And people can get that for free if you want to go check it out at BiggerPockets.com/UGB yeah like Ultimate Beginners Guide UBG.
Mike: Ultimate Beginners Guide.
Brandon: Yeah cool.
Mike: That means you read too, that’s not a mystery novel.
Josh: Yeah no.
Mike: It means you read.
Josh: Yeah awesome thanks for reading it. Well what about hobbies what do you do for fun Mike?
Mike: Surprisingly I love to geocache.
Brandon: Well I don’t know what that is.
Mike: You guys know what geocaching?
Brandon: I have no idea.
Josh: I know what geocaching is that’s cool.
Brandon: I've no idea. Give it to me.
Josh: It’s like hunting and finding stuff man.
Mike: It combines high tech with getting outdoors.
Brandon: What does that mean?
Mike: Do you know what a GPS unit is?
Mike: A handheld GPS unit.
Mike: Hikers use it and campers. Well in the year 2000, one guy in Oregon took a five gallon bucket, kind of out the woods a little hid it and then put on the internet the coordinates where it was. And he gave his friend the coordinates and said so you find it. They both had a GPS unit and the second guy okay I’ll go try to find it.
He goes, “You know what that was fun; I'm using the GPS satellite system, the internet and I’m getting out in the woods.
Josh: That’s cool.
Mike: And so he says, “Hide something else,” so he hid something else and pretty soon it caught on and now there’s geocaches around the world. I have found that 2600 which is not a lot.
Mike: But I have found caches in Russia, in Finland, Norway, Canada, Alaska.
Brandon: What are you finding like is it just like an empty bucket or they put…?
Mike: It’s anything from a small container; it could be just a little small container to a five gallon bucket. The most common type is like a key hider; a magnetic key hider you buy them from the hardware store and there's a log inside and you just sign your name on the long and put it back.
Brandon: That’s cool.
Mike: If you want to check geocaching.com it's a great hobby I know the boy scouts and the girl scouts they use it to teach the kids how to use a GPS and we’re getting more and more use of GPSs in our car, I think we all have them now. And you could actually put the coordinates is your car like in the urban geocaching you get close to the area. And they’re in parks or they’re in buildings takes you to some interesting historical sites.
Brandon: Cool that’s awesome I’ll have to check more out about that. And we will link to that website at BiggerPockets.com/Show85 which of course is the show notes for today’s show. And the final question from me I want to know what do you believe sets apart successful real estate investors from those who give up, fail or never get started in the first place?
Mike: It’s the old saying if you fall down you have to get up whether you’re investing or you’re in sports or you’re trying a new job, changing careers anything you do you're going to have to fail. Success is never as sweet unless you’ve failed. If success is easy then everybody would do it and there wouldn’t be a set apart success group of people.
You have to pick yourself up. You lose 30 grand on a deal it doesn't mean investing is a bad thing. I could have easily said hey this stupid I lost $30,000. But you know what, I made a wrong choice, I didn't do my due diligence and I've learned to actually research more taught me a lesson something that you'll never learn in a book.
Until you feel the sting of that $30,000 being lost, I mean it hurts. But I’ve bought houses that I've made $100,000 on in a couple of years. But there's two sides to it, so the separation is the fact that as you go along it’s not just a straight up geometric climb it’s a bumpy ride. Enjoy the ride, hang on for the downfalls.
And in the last three years up until a year ago there was great buys out there that we all know that. And be ready to jump on those buys in 2011/12 there are some good deals out there for everyone.
Josh: For sure. Cool alright Mike well before we let you go where can people find out more information about you or find you online anywhere in particular?
Mike: Not really just a private message me on BiggerPockets I answer-I get quite a few I answer them people ask questions about buying property at a distance how you live in California buy a house in Texas, never look at it never see the neighborhood just write me a private message I’ll be more than happy to talk to you about it.
Josh: Sounds good well listen we really appreciate you taking the time thank you so much for being an active member of BiggerPockets and of course thank you for taking the time to be here on the show with us.
Mike: Well I hope it can help somebody.
Brandon: Awesome well thank you Mike.
Mike: Thank you very much Joshua and Brandon you guys have a great day.
Brandon: Thanks you too.
Josh: You too. Alright guys that was our show with Mike McKenzie Show 085 of the BiggerPockets podcast you could check the show notes at BiggerPockets.com/Show85. Lots of interesting stuff I always find it fun when we get into some detail and chatting about property management and landlording. What do you say Brandon?
Brandon: It seems you had bad experiences with that.
Josh: Yeah well it’s fun to talk about well why don’t we wrap this thing up, listen we really appreciate all you guys listening to the show, we appreciate you guys being members of BiggerPockets and being part of our community. And I just want to say thank you also by the way we recently crossed 200,000 members on the BiggerPockets website.
So that's awesome if you're a listener and have not yet joined the site now is a really, really good time to join, there's tons and tons of people on BiggerPockets connecting, interacting, doing business, doing deals, learning helping one another out and I definitely encourage you guys to get involved. So do that today at BiggerPockets.com.
Otherwise definitely be sure to follow us on Facebook, Twitter, Gplus, LinkedIn, Pinterest, we’re all over the place. And engage with us connect with us share our content, share our podcast share everything. Let people you know, know about BiggerPockets. The more people in your network that you can get onto the platform the more people are interacting.
The more successful we can all be together and help one another out so I definitely encourage folks to do that. But that's all I got for you, get out there make things happen be successful and we’ll be here to help support you I'm Josh Dorkin signing off.
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