The EASIEST Way to Build a Real Estate Portfolio from ONE Rental

this is real estate rookie episode number 42 so Ash have you have you heard of this thing called the domino effect yeah a domino can take down the next one that is 1 and 1 half times its size and it compounds its ability to take down larger sized dominoes and today's Ricky guest built his portfolio using one deal to take down the next and the next and the next my name is Ashley care and I'm here with Tony J Robinson and Welcome to the Real Estate rookie podcast where every week three times a week we bring you the inspiration motivation and stories you need to hear to Kickstart your investing journey and today we have Rob scow in the podcast now Rob and his wife are both teachers in southern Maryland by day and they're creative side Hustlers By Night each deal has helped them towards the next one and exposed Rob to a variety of strategies when it comes to real estate investing so Rob Welcome to the Real Estate rookie podcast I appreciate you guys having me on thank you for having me here Rob to start this off we are very interested in how a used car and a puppy play dat turned into a real estate deal for you and your family so it was one of those things just kind of we were looking around on Zillow of course and trying to figure out you know where we wanted to buy this vacation house we've always wanted a vacation house kind of in the woods or even or either by a lake or something like that um and we looked at a whole bunch of different areas and we realized pretty quickly that um the capital we had on hand wasn't going to be enough to put a down payment for a lot of these houses but luckily we had a paid off truck so I sold the truck on carvana and then took that cash to the guy that we've bought used cars from and bought a used car for part of that money and kept the rest for the down payment and as we were talking to him we were talking about the different markets that we were looking at and one of them was Deep Creek Lake is which is in Western Maryland um and at the same time we were looking for a puppy too because we have four dogs and love dogs and more dogs is always good he said well my brother actually has some puppies up in Creek Lake why don't you go check out the puppies and that's when my my wife looked at me and said well we can also look at real estate too um and so sure enough we went up to Deep Creek Lake we saw a house that was um basically from like basement to the ceiling with mold that was the first house we looked at um it got a little little spooked by that because it was really our first time buying anything other than a primary residence but we still tried to get it under contract we had the inspection back the inspector actually called us and was like no no no no no don't do this um and then luckily through that we found a great real estate agent and that's how we actually got our first you know true I would say investment property under contract so during that time what kind of LED you up to getting interested in real estate investing you know honestly I think at that point we didn't know we were real estate investing we just knew we wanted a vacation home we knew we saw people in our circle of friends that you know were were more ahead of us you know know financially and had vacation homes and things like that and we just thought that was the thing that we could do to be at that place too so it really wasn't until I started listening to Bigger Pockets that I really had any clue about Investments and I didn't listen to until after we bought this home well after we bought this home um so at that point we had no clue we getting into investment did you have any skills or experience with buying property or anything that could have translated into here's the value we're bringing to the table when you were looking for that first property our first home we bought I was really involved throughout the process cuz I was just curious and really wanted to know and we had a great agent that walked us through it too and an amazing loan officer that um really kept us in the loop the whole time and I just was curious throughout the whole process so I asked a ton of questions when that was happening and it made me feel a little bit more confident when we went to go to this next one what I realized too pretty quickly was the way to get these things done was to keep asking questions and to keep kind of pushing and asking why and it can and can lead to those you know good outcomes and and what about your wife um why was she you know excited about this besides just having a vacation home was there any skills or experience or you know value she added she's a contractor's daughter so she is someone that always loves a good project our house is is always some sort of project going on whether it's building Vans right now she's starting up a um a flower garden that she wants to do cut flowers for um for the nursing homes around here so she's always doing something and that next project felt like that vacation home and that was her laser focus and it was she can see the good in any kind of of house and say this is how we can do that and so that's that's what skill she definitely brings to all of this so Rob were you guys specifically looking for Value ad opportunities like properties where you could go in and do some Renovations or that's just what happened to present itself to you we knew we couldn't afford something that looked nice and so the only way we could move forward was was something that Carrie felt she could turn into something better you know we didn't realize it was a value ad at the time we had a you know we watched HDTV we watched those kind of things where we knew about you know you know a fixer upper and and being able to flip things but not to the point that you know we were like we can add value and and make this thing this much more valuable so tell us the the outcome of this first deal so the first deal was um one that was in a community that was like Lakefront basically so it wasn't a lakid house it was just Lakefront we got it under contract for $215,000 um we actually didn't see it the agent called us and said hey this is about to come on the market I think you'd really like it do you want and this was before everyone was doing virtual tours do you want me to go do like a cell phone tour and see if you like it um and sure enough he went and did a cell phone tour uh and we got under contract that day and we didn't actually walk into it until I think it was like 5 days before the closing or something like that we never saw it in person so then basically once we got in there Carrie came in the first day that we had it and she started Renovations and it wasn't anything big it was more cosmetic stuff than anything else we added some like bunks to the bunk um to one of the bedrooms so it'd be more airb and you know be friendly added some bathroom stuff too um and we probably put about like $5,000 in materials and God knows hund and some odd trips to the Lowe's in the in the in the Walmart in the meantime and then we we ran it as an Airbnb for about nine months and then after that we kind of got tired of having it as an Airbnb and our vacation rental so what were the big pain points for you on this project Rob I think the biggest was management and I think uh I don't know if it's unrealistic expectations of management a property management or like we had a different idea of what it should be managed like um I put a lot into the social media aspect of it and actually but we did a lot of branding and stuff and tried to make it as fun and as inviting as we possibly could and then we just felt that the management wasn't really pushing it out there as much as as we thought they could we were getting a lot of the bookings through our own social media the cleaning and stuff that we signed up for through them just wasn't we get reviews that would say there was hair all over the shower tubs and stuff like that and um then when we would go and check it out it felt like we were just kind of cleaning up everything when we got there whether it was cleaning up the grill or just making sure all the things that were not taken care of by the property managers we felt obligated to do it so it became more vacation it became more of a job when we were going up there every month or so with this experience that you've had what would you do differently when vetting a property management company for a short-term rental call around we just picked the first person I'll be totally honest and we picked the person that was through our realtor um I think listening to Bigger Pockets now I realized that one of the the things that if I were to invest in short-term rentals again I would make sure there's a lot of property management companies in the area there was really only three main ones in Deep Creek Lake at the time so even if you didn't choose these people you still probably were getting similar service from someone else and they took a lot of those independent cleaners into their into their you know groups and they manag you know hundreds of of different properties around that that lake so it would be vetting of myself making more calls trying to find more independent people to come in and and being more confident in myself to be Hands-On with it cuz I cuz I think it's that passive idea like that I can just hand it to this property management company and you know I'm all done and I was completely wrong with that you know and I think what I need to do is find the right people keep checking up on the right people and make sure that you know they're doing what I've asked them to do so Rob if I'm tracking the story here correctly you guys found this property on Deep Creek Lake renovated it started using it yourself renting it out when you're not using it but then became a little maybe disillusioned with the process so what was the like what did you guys end up doing with it did you sell the property after after all or or what happened with it we did we did so uh in February of I guess it was actually January January 2020 so right before covid um my wife and I decided that we didn't want to deal with it anymore um we just got through the ski season kind of and we said well let's go ahead and sell it now and um called the agent and he said that it would give us so we called the agent and we went ahead and listed it I think around like 265 and within two days we had a full price offer um and settled literally on on Valentine's Day of of 2020 and then two weeks later you know everything just stops around the the whole world um and I got to say this is probably in one of my I wish I would have found Bigger Pockets earlier for this kind of deal because I think I would have sat on it longer because that same property in 2021 sold for $465,000 so it increased $200,000 and they did and and cuz we did so much stuff to it they didn't have to do anything when they sold they actually removed the hot tub from it took the hot tub with him and still sold it for $200,000 more so Rob what were you doing during this time period were you living in a van down by the river what was life like for you so we were both teachers so car and I met actually talk about a hallmar movie car and I met at the school um where we both taught we were both second grade teachers the only two second grade teachers and so our whole time that we've been together we've gone to work every single day together um so and it is great we love it and still she's here every day with me too we don't now that we're both not teachers teaching is hard I mean plain and simple teaching was just hard and I don't think we ever thought of getting this investment property this rental property as a way to like get out of teaching but we saw it as a way to make some more money to supplement what we weren't making in teaching and maybe get a free vacation um every once in a while to our property because we can't afford that when you're when you're teaching so it was it was a lot of I'm not saying try to trying to make ends meet because we weren't you know scrambling every day to make mortgages and things like that but it wasn't easy it was a lot of hustling we had a kid in daycare we're trying to you know have a life that we want to enjoy with each other and on top of that teaching it's so emotionally draining and so hard on you um emotionally it it's tough to it was tough to do everything you know and feel like you're really enjoying life except for the Summers when you had off but those go by quick so Rob I'm I'm curious right because you said that you were teachers which means that you guys have stepped away from that profession uh but you also just mentioned right the teachers maybe weren't the highest paying profession in the world so I guess just financially how were you able to set your yourselves up to step away because you you sold the one rental that you had so what what had happened in the meantime so we did a lot of side hustles and that's kind of what we've always done even before we had the investment um daycare was really expensive I like to go fishing so we started a charter business I got my guide license in here in Maryland on the ches Peake Bay and on the weekends every Saturday and Sunday I would take you know clients out that I actually found on Craigslist Believe It or Not which sounds a little sketchy now that I say that wait I just I want to make I want to make sure I'm tracking there so you would you found people on Craigslist who you then put on a boat with you and drove out into the middle of the lake 14 miles out into the middle of the chese bay and honestly I've met some of the nicest people ever there was some weird stuff too you know but I met some of the nicest people ever um doing those Charters too so what were some of the other side houses you had the the Charter Business was there anything else you jumped into so one of the biggest things was we realized pretty quickly the if we could stay in the classroom basically and make more money that was one way we can make more money too so we I did as many continuing education credits I could which would move us on over on the pay scale I also got my national boards which is like the big certificate that you can get or certification you can get in teaching that moved us over on the pay scale um and then like I said my wife loves construction stuff and we actually built out a vintage camper was the first thing we did we took a 1963 camper and um I wouldn't call it a flip cuz I don't know how much we actually made from it but it was a fun thing to do but then that led to uh building out Camper vans and stuff like that as well so Camper vans are super neat and we have actually have one in the driveway that's for sale right now and that's something she does that's just amazing looking do you guys have a YouTube channel about that she does she has one that she hasn't posted in a little while just because um she hasn't been building a van in the last few months but it's called van life with us on YouTube and she documented the whole build every single day was a short and then did some long form stuff too super cool man you guys are you guys are just like made for for modern media right you know the the camper band the camper bands are such a popular Niche on on YouTube and I have a I have a friend of mine him and his wife they actually sold everything and moved into a camper van for like two years and they amasses you know they got like a million followers on Tik Tok now because of uh because of what they did there so we've always thought about doing something like that you know every time we get in there and we are you know going on a trip or something like that um it's a nice simple life you know and that's what we try to live around us too the fact that we have four dogs though makes it so we can't live in a camper van but the the idea and the feel of that life of being able to pick up and go where you want or just be able to enjoy being outside um you know that that's that's what the kind of life we want in the camper van let us do that the first one we actually built we built because our son said he wanted to see Mount Rushmore and um it was during Co and RVs were so expensive and it was kind of before Camper vans took off and um I just said let's buy an RV and then flip the RV when we're done with our trip I thought that would make sense and car so why don't we just buy a van and I'll build it out I was like oh gosh sure let's let's do this and so we built that van out it was a 19 or 200 15 proas we built it out ourselves everything I mean like a complete like house inside even a shower and drove it all the way out to um all the way out to South Dakota and all the way back and then when we got back we sold it 2 days after listing it to a couple in Colorado that flew out that next day and drove away with it down to Louisiana I mean it's just it's it's been crazy B and I I love hearing that story Rob because there's so many different unique ways to fund your your down payment for your real estate we had a guest on a few episodes ago and he was getting new Tesla under contract so like pre- delivery Teslas under contract for 100 bucks whatever it was he take delivery and then just resell those Teslas for a premium he he made like 60,000 bucks doing that over the course of like a few Teslas right so you we're talking $400 into uh the deposits and you're able to make 60 Grand on the back end I don't even know a real estate investment that can do that you know that's that's insane so I I guess at what point then Rob did you start to make the transition back into real estate as an actual investment vehicle after you know kind of getting burned a little bit on that first short term right when Co kind of not ended but like when school started opening back up we were then again looking for that property that another piece of land in or somewhere to build in The Cabin in the Woods kind of deal um and at the same time we were looking for rentals too and just kind of started that search uh The Cabin in the Woods property kind of came first and we bought a piece of land for I think it was right around $25,000 and we had the Big Dreams of going ahead and building out this tinier home you know like we were talking about a simple life with the with the van kind of thing we only need 700 ft we don't want to have to rent this thing out we just want what we want on there and realized pretty quickly that um the lot we bought had a septic and well in place but it was only basically one small spot that could fit the house and that spot wasn't a spot you wanted a house um so we had to do a lot of calling and cold calling to the to the neighboring lots and finally got them to agree to sell us that lot and so we had both of those Lots now which totaled about 2 acres and we were able to put the house in a in a different place and so that was kind of our next foray into it so what really started to to click for you about real estate investing as you you kind of re-entered yourself into it Bigger Pockets I mean like 100% I didn't know what it was before that and once I realized we were doing real estate investing by having that short-term rental um atep at D Creek Lake and hearing other people's stories and especially honestly on the on the rookie podcast because on the the main podcast there was a lot of verbage and conversations going on that just were going over my head to be completely honest and I felt like you guys packaged in a way that um that made sense and I just felt like if these people can do it and this has always been what we've said if if this person can do this and no you know not putting someone down but they're just like me like I'm I'm the same as them if they can do it I can do it too um and so that's what really pushed us back towards that real estate side of it I love that comparison Rob of like hey you know if this person did it I'm sure I can do it too but I think we see a lot of new investors rookie especially who maybe let like the fear and the hesitancy still hold them back a little bit I I guess what were you feeling that at all maybe what's your advice to Rookies who are in that same boat right now I feel it all the time still we're we're talking about buying a big farm right now um and it's scary and it just is and I think you know you got to trust your numbers one I mean that's one of the most important things and you got to trust your vision you have for the property and luckily I feel pretty comfortable with numbers and I really trust Carrie and her vision she has with properties um and some days it's great and some days both of us are on the same page and we're really up on a property and we feel really comfortable about it and one day one person's down and the other person's up and some days we're both down and and just understanding that that's part of it and that's if it was if it was just everything's easy and everything roses then everyone would be doing it I guess you know so Rob you I loved your explanation of kind of getting p that that hesitation that fear um but you also mention like hey there are days when both you guys are are feeling down right I guess what's what's helped you overcome some of that inaction that a lot of rookies find themselves falling victim to I think the biggest thing is understanding that like a lot of people think you have to do it you know quote unquote right to get started um and I had a lot of like fomo at the beginning of like I felt like I wasn't doing it right I felt like I was listening to people on Bigger Pockets and people that would come on as guest or even just people in my real estate Circle that were doing so much more um and I felt like I was just missing out and I felt like I wasn't doing it the right way and I what we both realized is we kind of sat down and talk about what our needs were and what our goals were with this um and we realized we don't need to have a 100 doors we want to make it right for us and so we started seeking out other paths other than just super scaling and and having you know you know Boutique Motel while that does sound fun I'm not going to lie um but that that might not be for us right now and what was for us at the time was you know single family homes and kind of just hitting base hits and and when I freed myself from being able to think I had to make it right and perfect a lot more opportunities opened up because I wasn't just looking at everything it was more just focused on what I felt was the the best path forward not just the right path forward rob you bring up such an important point and I feel like we we got to pause in this for a bit man because I think what what holds a lot of people back from really achieving success is that they don't take the time or not even the time they don't have the discipline to focus in on one thing you know we're we're 400 episodes into this podcast Rob and you know every single week you know my shiny object syndrome is just like like going off because I'm hearing all these different stories from different people and I I feel like what's allowed me to be successful so far is that I have had the discipline to really focus in on just one strategy like I'm I'm not hearing your story and then turning around and and looking to to flip Camper vans I'm not hearing you know this other person's story and trying to get my first Self Storage I'm hearing this person's story and trying to house hack you know new construction like there's so many different things but it's being able to realize that you're probably never going to be able to try everything and I think the sooner we can accept that the easier it becomes to really focus in on your specific Niche on your specific Lane and get really really good at that one thing and then success becomes easier after that and it feels right too and so for me like me doing your strategy or Ashley strategy or anyone else's strategy like I may learn things from it but it might not be the right fit for me personally like personality wise or even for my long-term goals like our goal is to use this to you know build up Equity to have retirement I probably shouldn't be buying houses in downtown Baltimore right now then because that's more of a cash flow market and you're not going to see a bunch of of equity growth so that's what I think um a lot of rookie investors need to see is that you know you don't need to go like you said go after everything or go after the biggest thing you need to go after the right thing for you and it takes a lot of failing to get to that right thing it does right it takes a lot of failing and a lot of discipline and you know last thing I'll share on this topic I I recently read a book it was called 4,000 weeks and it's a it's a productivity book but the basic premise of the book was that you can't be productive Until you realize that you'll never be able to do everything and it's it's that realization that that that gives you then the freedom to truly focus on the things that are most important and it's the same thing here right you got to realize that you can't you can't take down everything so Rob really enjoying this conversation and and like we said earlier it all starts with that first Domino and your first Domino led to a bigger Domino led to a bigger Domino so I'm I'm excited to see where this goes from here Rob I want to get into this this land deal and you know how how you're kind of combining the land with the bur so from the sale of that short-term rental what came next after that from a real estate investing perspective so we still wanted something in the woods or near a lake so we decided we were going to start looking in other areas where we could buy some land and possibly build you know a smaller house not necessarily a tiny house we're weren't looking for 200 300 Square F feet but 800 square feet to kind of keep it that intimate feel and also keep the payments down so we didn't have to um short-term rent it if we didn't want to we wanted the ability to do it if we wanted to but didn't have to if you know we didn't want to do that uh and so we settled on an area called Madison Virginia which is just North of Charlottesville Virginia um and got a property that we just found on Zillow and it had well and septic in place and we got it under contract for $23,000 so the cash from that sale of yeah the cash from that sale of Deep Creek Lake went right into right into that property and what made you want to decide to go after land so at that point we've built two houses two primary residents um we built one on an island down here called St George Island and after a not so great neighbor that lived next to us we decided to sell that one and build with the same Builder so we understood the building process and we weren't afraid of buying land and doing that building part so we understood like the steps it would take to get that done we knew that we could add value to it like we probably would have a little more equity and if we did it ourselves and looking around at the cabins that were available um you know we saw that the prices were going to be good when it was finished so so that was the step we took yeah and tell us a little bit about those steps of working with a builder doing the development what are kind of what's the the process or the phases you have to go through for that the very first thing was of course you know settling on the house and stuff like that which actually went pretty quick it seems like land sales especially um ones that are paying cash like we were able to close it in 14 days in or in Virginia so it wasn't a long closing at all and during that whole time we're closing we're just calling different Builders and right away we realized that there's kind of a stumbling block in this area of Virginia cuz there's a mountain kind of that runs down that area of Virginia and um some Builders work on one side of the mountain and other builders work on the other side of the mountain and they won't the crews won't come over so it really limited what we thought was going to be 10 Builders or so that we could interview it limited down to about five um and then the scale of our project was too small for a lot of people as well but so the first part was really just interviewing as many many Builders as we could and and figuring out which one fit our project and fit our personalities the best too I want to get into how you were sourcing and kind of uh vetting these different Builders but one question first Rob what did your due diligence look like on the land to confirm that you'd be able to build out correctly they had all the plat information and stuff like there and permits already pulled the lady that owned it before actually um put the septic and well in as well so there wasn't a ton of due diligence that we need needed to do we made sure the well was good we had a well test um they performed a septic test on it as well even though there wasn't a house there they were able to taste test the tank in the drain field um so we're able to do that kind of stuff and we thought we understood where the house was going to be and that it was going to be in an okay place but once we started meeting with Builders we realized that um we were kind of mistaken a little bit so and in terms of like the city allowing for like any kind of structure or being able to turn that into a short-term rental was that part of your due diligence process at all of course and so like the city had pretty lack and it's actually the county of Madison County um had pretty relaxed building codes and this is in a little neighborhood as well and they didn't have any HOA um restrictions or covenants so we did that due diligence first to make sure that there was nothing in those HOA bylaws that said you couldn't short-term rental it because that was the biggest you know that would be the one sticking point um because we wanted to be able to have that option if we decided to do that so going back to the the Builder piece I know you said you started interviewing these different Builders um two questions there and I'll ask the first piece first but are you going to the builders with the plans that you've already had an architect draft up or are you working with these Builders to help identify what those plans should be so the first thing we did was what everyone wants to do and you go online and buy those online plans and and you think you can take those to the Builder and they're going to say we'll buy the lumber package and we will uh have that built in you know six to8 months um and that's what we did first we made the mistake everyone else makes and we have a great Builder here and he makes it so easy that we thought that's how we could do it we quickly realized that that wasn't going to work um especially because a lot of those online plans aren't you know built to the codes for each one of those States so if you're getting an online building plan it might not be the right code for Virginia or Maryland um and so we quickly realized that we would say instead of these are the plans we want we would say this is the concept that we're looking for and give the Builder the the freedom to kind of say I can do this or the these are the ways that I could do this or kind of Riff Off of that instead of just going in and say this is what we want can you build this and when you ask that they're going to say no instead of going in there and saying you know this is kind of our concept can you help us get close to this or or near this or what can we do to make this happen I think asking for help like that going to get you a lot more uh lot more opportunities to work with someone so then the Builder would take it to their internal architect drafter whoever to actually bring your vision down to like you know plans that could be built exactly exactly and so we talked to a few different Builders and tried to get them you know down to a plan that was similar and we settled on one Builder um and we we lovingly ended up calling this plan in this uh this look a jacked up double wide you know like it's like a double wide trailer and then it has like the candal levered roof you know it's like the it's it's a really popular design now um but it was a we called it the jacked up double wide um yeah so that's that Builder we like the Builder sense of humor and all that kind of stuff and and we liked what his plans were and we saw a lot of good reviews from him too and he was on the right side of the mountain so that was the builder we went with Rob what was the outcome of this property so right when we had the Builder on there we realized the house we wanted or really any house over about 700 sare ft because of where the septic tank was because of where the drain field was and because of where the well was we weren't going to be able to fit a sizable house on there we had over an acre of land but because all that was taking up most of that and there were setbacks with the neighbor setbacks with the roadway it kind of put us in this like one little box of an area without like without really a driveway or anything um and so we could either accept that or I could call the neighbors that had vacant lots and see if they would sell us their vacant land um and and that's what I did so I started calling around to the neighbors and there was one right next to us and after probably about a month or so of calling her she finally agreed to sell us that for $7,500 actually so we were yeah we were $330,000 $30,500 all into it um and we had two and a half acres at that point um and so then we did a boundary line adjustment and removed the boundary line between the two so that was another step we had to do according to the county to make it so we could build on the other lot and they could be part of the same property um and then we started pulling permits and doing all that kind of stuff and then the the Builder kind of ghosted us at that point for some odd reason I I'm not sure if it was a financial thing on his end or it was when lumber prices were skyrocketing it was tough for him to get um clients and I think it just got really difficult for him I don't know if our project just wasn't big enough to really make it worth it or not but so we got it to this point where we had a driveway installed we had the boundary line adjustment removed or we had the boundary line removed and so we had this 2 and a half acre lot in Madison Virginia that we wanted to build a house on but we just again lost Steam on it and just kind of looked at our options and decided what to do next yeah that's that's crazy about the getting ghosted by the contractor um during that time period and and like he he responded to us after a while and it like ended fine but it definitely he didn't want to his timelines were a lot different than our timelines and our timelines were still reasonable but I think he didn't want to do it in that 12-month period and then the prices just kept escalating even more than the lumber costs were escalating he just kind of priced us out of wanting to do the project which it happens I get that yeah definitely but it's also you you definitely lose momentum you think you have your Builder lined up your contractor ready to go and then it halts it halts the project yeah we drove up to the lot um after that happened and we pulled in the driveway that they just put in and Carrie and I both looked at each other and said it's it doesn't feel right anymore and I think that's one of the biggest things you look at it and it just doesn't it it didn't feel like we wanted to move forward the project the project was wasn't going to bring us any Joy it was just going to cause us more stress it already caus us a bunch of stress at that point and so we stopped and looked at what was the way to get out was the way to get out to you know grin and Barrett and put a house on there and then sell it that way or could we sell the land as it is right now with a driveway on it with the boundary removed a two acre you know lot in Virginia in a prime area could we sell that for more than we had in it and so we did decide to end up selling that and did you make money on it so we were all in with the driveway 40 ,500 and we got it under contract for $69,000 and it settled for $69,000 I don't know about the stress in the headaches if it was worth it to you but I think it was I think it was it you know it taught us a lot too it it taught us that things can change and that Builders can change their mind and and to really start I think one of the biggest things forming relationships and forming you know business relationships with builders that are in the area that you're looking to build is one of the biggest things because we have Builders here in southern Maryland that would never ever do that to us during that process they would tell us up front if they were super busy um and they maybe not be able to do the project but yeah they would never do it during the process so Rob what's your advice given this experience for a rookie to really find and vet a good Builder if they want to go the new construction route I wish I I think one of the things we did the first part right we talked to as many people as we could but we were kind of limited on who we could talk to based on the area we chose so I think really understanding the area you chose you choose first to make sure there's a a plethora of builders in there and then talking to those Builders and then moving forward with someone that you get a lot of good reviews from which we didn't really dig into his past as much um and really understand who you're getting into business with and then we probably could have been flexible too on timeline and cost and maybe understood a little more that that's what was going to happen um but I think the biggest thing it's just it all comes down to vetting your area and vetting the people you're working with but are you going to like I don't know Yelp or Google or like where are you going to Source the the builders um no so Facebook Marketplace believe it or not that's one that I've looked at you can look at different contractors in the area one of the ones that we contacted right away was our agent that helped us purchase the property and and she was great she actually gave us some great recommendations but they're all bigger builders that don't want to deal with an 800 foot house um and so then it was my wife was actually the one that was doing a lot of the calling to all the all the different builders that were listed it on Google and it's just making all those calls and then following up because you may make that first call and they'll say yeah let me uh let me get back to his some numbers and you got to call back a week later because they never call back so if you could get a contractor a builder to that calls back or picks up their phone consistently that'd be a very rich contractor a builder I feel like after this land deal what was the next Domino that you were tackling as we had the land deal going we had a domino in place so we started um that's when I really brought Carrie into the Bigger Pockets world and talked to her about what I was listening to and kind of told her about the fact that I would really feel comfortable doing a rental myself and managing myself and I pitched to her as and she'll have a really good project to do and so she loves a good project uh and so we started looking locally we were spooked by Deep Creek Lake we were a little bit leery of Madison so we realized we needed to look locally um and we looked in areas that had the schools I'm a real estate agent as well so we looked in the area that a lot of people that are moving to the area want to move to and um picked an area in Leonardtown Maryland actually and started looking for rentals in that area okay Rob do you want to tell us a little bit um how this property fit your buy box and some of the details on it definitely so like our goal right now and our goal of like these long-term rentals that we're looking for are staying in the school districts that a lot of people that are moving to the military base that's around us want to be in um so so we're looking in the Leonard toown area and this one actually was in the Leonard toown area in a neighborhood called Bretton Bay uh and it was an estate sale which is another good opportunity for someone like Carrie who loves to do projects because a lot of the times they're in need of some updating especially since it was a 1966 home um so it was a little bit on the older side and uh we got it under contract for I believe it was like 291 um and then put 15% down and and I think we were $220,000 in renovation cost to us and then we're Renning it out for 2650 a month right now just kind of to go back to all of your deals how were you able to fund these deals we know you had the domino effect of using some of your money from the other deals but were there any other sources of funding that you had to tap into so we actually pulled a helck on our primary residence as well for some of the construction funding um and we felt pretty comfortable doing that because we do have a good amount of equity in here we didn't like take a helck to the max that we possibly could we just took a little bit of a line of credit just to to help with those things and make us feel more comfortable and the nice thing was is when we did sell the land out in Madison Virginia that help kick back to the to the HELOC and that felt more comfortable too so that was really the main way that we were able to kind of feel comfortable going forward and I think that's been the big thing for us is we don't want to feel like we're too stretched in any of this you know we're just looking for the long-term play here uh not really just trying to grow as fast as you can fast as I can feels a little more risky and I'm a little more risk averse when it comes to this kind of stuff okay R can you tell us a little bit about this market and why you decided on it and maybe why somebody else should invest in the same market so I decided on it just because it's local to me and I was comfortable with it but honestly it's one of it's it's actually a kind of strange Market in a lot of ways from like what I hear on on on the real estate rookie podcast and the bigger podcast we're pretty rural compared to most areas and it's surprising because we're about an hour and a half south of of uh DC and about an hour and a half south of Baltimore so we're near some metropolitan areas but St Mary's County is specifically what I would call our Market we don't even have like a a specific City to say like you know you want to invest in Leonardtown or you want to invest in California St Mary's County only has 120,000 people living in it so we chose it because it's local and we chose it because as teachers we understood what par parents were moving when they're moving in the area where they wanted to be and now as a real estate agent in the area too I kind of feel really comfortable and making sound decisions about you know where the right place to put our money is especially for long-term rentals so was definitely an advantage for you knowing the market having some experience with it being close to home what if somebody was investing out of state into that market what are some of the advantage advantages you see in that market I kind of like it because I like it because there are some different opportunities throughout the area you know like there's Waldorf which is in Charles County which is still part of Southern Maryland um that's seeing more growth from people commuting from DC and so there's a lot of opportunities for homes that uh you can either buy and do the long-term rental kind of piece of people living in DC or people are commuting to DC or commuting to Andrew's Air Force Base but then also you could do more stable markets like down here in Leonardtown where it's you're pretty much I'm not going to say guaranteed the rent but a lot of times with the military people that are moving to the area they have a base housing allowance um and that's like a a monthly amount they're getting every single month that really makes them attractive tenants to have in there because you know that since they're part of the military they're going to be able to pay that rent on a regular basis for the most part um and then two there's other areas that are just really seeing a lot of equity growth so if you're someone that's looking for more Equity growth because of it being that you know area that a lot of people are moving to because of the military and because of DC and the capital region around Maryland getting more crowded and more expensive it's that satellite area that people are what is it the path of progress the path of progress is is definitely coming down towards us um so it's just a really neat area to kind of be a part of right now and then being a rural area I'm sure like you guys go to rural areas it's also just beautiful we're on the Chesapeake Bay we're on the pin River and the pomac river too it's just a gorgeous area to be a part of and get out on the water and go fishing and crabbing and and just be able to be out there and enjoy nature yeah well Rob really appreciate everything you shared today and and love getting into your story brother um before we wrap things up I actually want to give a shout out to this week's rookie Rockstar but a while since we did this but it's good to highlight all the amazing things happening in the rookie community and this week's Rockstar is Darwin Louie Pitts and Darwin says hey all I just wanted to introduce myself and share a photo I took of my first property that I just purchased after years of prepping and saving I was finally able to jump in so Darwin congratulations those are the kind of Stories We love hearing and if you want to share your story Jump into the real estate rookie Facebook group or in the Bigger Pockets forums share your story we might just give you a shout out okay well Rob thank you so much for sharing your experience your journey some lessons learned and also your success with us for everyone listening if you love this episode please give us the thumbs up if you're watching on YouTube or if you're listening on your favorite podcast platform please leave us a review we love this episode with Rob talking about his Hallmark movie on his first short-term rental deal and also how Rob had amazing exit strategies where he wasn't locked into one path for each of his deals and was able to make money on those exits so Rob thank you so much if you want to learn more about Rob you can uh check out our show notes or the description below and we will have Rob's information we can find out more information about him and also reach out to him my name is Ashley and I'm here here with Tony and we'll see you guys next time on real estate rookie [Music] podcast so cover up your own games got nobody see all this time Ain nothing change [Music]

Channel: Real Estate Rookie

Views: 7,695

Keywords: real estate portfolio, rental property, rental, real estate, rental properties, real estate investing, how to invest in real estate, real estate investing for beginners, side hustles, best side hustles, side hustle ideas, investment property, short term rental, airbnb, long term rentals, new construction, buying land, how to buy land, real estate development, property management, property manager, home renovation, biggerpockets, real estate rookie, real estate rookie podcast

Id: GRJyazrITpQ

Length: 42min 26sec (2546 seconds)

Published: Mon May 06 2024