From Pizza Delivery Driver to 11 Rental Units Using Savvy Seller Financing

Ashley:
This is Real Estate Rookie episode 420. What does it actually take to get started in real estate investing? My name’s Ashley Care and I’m here with Tony j Robinson.

Tony :
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 I want to welcome Grayden Picnic, who’s a young investor out of Pennsylvania, and Grayden has already made some impressive strides in the world of real estate investing. Now, he didn’t start off with a ton of capital and he’s been using other people’s money to help get deals across the line. And he’s also acquired a non unit multifamily property without using any of his own capital. So today you’ll learn how to find these kind of creative deals, how to negotiate these deals, and what to do as a new investor with Little Capital now grad’s journey. It’s honestly just a testament to what can be achieved with a little bit of perseverance and some smart investing. So Grayden, welcome to the Real Estate Rookie Podcast.

Greyden :
Thank you so much for having me. I’m real excited to be here.

Ashley:
So Grayden, how old are you?

Greyden :
I am 24.

Ashley:
And what kind of motivated you or intrigued you to start your financial freedom journey at such a young age?

Greyden :
Yeah, so growing up I had like to say I kind of lived a normal life on autopilot. I was focused on sports, was focused on being popular, kind of all the wrong things I’d like to say. If you asked me what I wanted to do, it was go division one, played pro football or baseball, and that was really it. I lived on that until about my senior year of high school. It was my senior year that my dad, he had congestive heart failure, was in the hospital for seven months and was sick. We still have him today. He made it out. But that really opened up my eyes during that time. I sat there next to him every day in the hospital. All you can think about are the good times that you’ve had with your family, and you only want to make those memories again.

Greyden :
And you just pray that you get the chance. And realizing that my mom’s confined by a nine to five, I’m going to have to go off after high school and start working constantly that those memories are going to be hard to come by. And I didn’t know how much time I was going to get with my dad. So that really gave me the motivation to, I’d like to say it knocked my train off the track. It woke me up to realize what really matters in life and then what I wanted to push for, which was financial freedom to create those memories.

Ashley:
Now, during that time period, what were you doing for a job at this time?

Greyden :
I was a Pizza Hut driver. Right out of college was driving, delivering pizza, listening to how to get Rich at 20 years old, how to make a million dollars. And as doing that, BiggerPockets pops up and you see these kids that are my age that are getting into real estate and making these changes, and I was delivering pizza and listening to that. So to answer your question, I was a Pizza Hut driver.

Ashley:
So how much money were you able to save at this point and what were some of the things you were doing to be able to save? Were you budgeting, being frugal, anything like that?

Greyden :
So Pizza Hut wasn’t bringing me enough money. I actually decided that throughout listening to BiggerPockets, I knew I wanted to get rentals, but I thought I was on a timeline. My dad was sick, so I tried to do everything fast. I lost all my money in Pizza Hut, trading’s, penny stocks. I was going to make enough money to go ahead and buy an apartment building and retire my family within a year. That was my goal, didn’t happen. So I started working at a factory to make more money. I lived at home with my mom, so that really helped. And I buckled down after that, decided I was going to not go the fast route anymore. I’m going to save up and buy something that’s real. And I was able to work 12 hours shifts for six months straight, bringing in $2,000 every two weeks, and I was able to put away 1500 bucks every paycheck. So that was about three KA month to save for a down payment on a duplex.

Tony :
So Grayden, you’re putting away 1500 bucks a month, which is a great accomplishment, especially as a newly graduated college kid. So what were you able to do with that money that you had set aside? How much were you able to save up and how did you deploy that capital?

Greyden :
So I set a calendar every paycheck, all right, here’s what I need to do. And by June, I knew I would have $20,000. So I reached out to lenders, real estate agents earlier in the year, found out what I could buy, and then I kind of was looking at houses with real estate agents throughout that time of saving up as I was reading Rich Dad, poor Dad, how to Manage Your Rental Properties by Brandon Turner. I know I butchered that name, ABC’s A Real Estate Investing by Ken McElroy, just kind of learning everything to be ready to make that step. So I saved up 20 K in about six months and was able to buy my duplex.

Ashley:
I want to highlight the steps that you took. You went and talked with the lender to figure out, first of all how much you needed to save, how much you could be pre-approved for. And once you had that information and you knew how long it would take for you to save that amount of money, you put your plan in place. And in the meantime, you’re starting to look at properties, learning how to analyze them, seeing what’s on the market. All of this is preparation for when you are ready, when you have that amount saved and now that day comes, you have your 20,000, you’re locked and loaded, you’re ready to go, you’re ready to take action. And I think sometimes it can get so eager and easy to just want to jump into it without having everything in place. And as much as you don’t want to get stuck in analysis paralysis, but putting this timeline together can be a huge benefit to make the process go even smoother. So what did that process look like when you ended up saving the 20,000? What happened next?

Greyden :
Yeah, I saved the 20,000. I knew how to run numbers or listening to BiggerPockets, reading ABCs of real estate investing, put in probably 10 15 offers on different duplexes, and I was able to lock up mine. I ran the numbers. I offered 30,000 over asking. I ended up not appraising for that much, so I got it for what it appraised for, which was 130 compared to my one 60, which I offered. So I was able to be confident on going in on this deal knowing it was going to pencil at one 60. Here we are at one 30 and I’m going in and I was able to learn how to run numbers through the books I read and also BiggerPockets episodes.

Ashley:
Can we highlight that negotiation real quick? As you get the appraisal back, you’re under contract for one 60 and it comes in at one 30. How did you handle that negotiation with the sellers while keeping the deal intact?

Greyden :
Yeah, so it was about a month and a half in, she was ready to go. She moved out all her things, and I get the call one day that, hey, it appraised for one 30. The seller came back and said that they want one 40. We went ahead and let them know that we weren’t unable to close on it because we didn’t have an extra 10,000 to bring to closing, which is what we would’ve needed to cover that one 30 to one 40. And she made the decision that instead of listing the property and trying to find someone else to bring cash at that number, then just to go with us because it was already in place. Anybody that was trying to get lending on the deal would’ve only been able to get one 30. So she didn’t have much pushback, but I was definitely nervous that she wasn’t going to accept the offer, but she ended up coming down.

Tony :
And I do think that’s an important lesson for Ricky’s to hear as they’re going through that negotiation process is that sometimes properties don’t appraise for what you get ’em under contract for. And this was very common. When did you buy this? What year was

Greyden :
It? 2021.

Tony :
Yeah. Right. So that’s right. As things are starting to heat up, you’re getting a lot of people who are going and over asking. And when that happens, sometimes offers do get accepted above what that property appraises for. So it should give everyone, I think some confidence that you as the buyer still have leverage when you’re at that point because what are her options, right? It’s like you said, you guys were 30 days into the closing period. It’s either she takes down this listing, re-listed, tries to find another buyer that’s maybe another 30, 60 days before that happens, another closing period. Or she can just eat the $10,000 and be able to close today. Because like you said, she’d already packed up all her stuff, she was ready to go. So there’s some motivation there for the sellers as well. So Gren super excited that you’re able to close in this deal and I think kudos to you on being able to buckle down and save that money. I’ve shared the story before of when I got my first big boy job out of college. One of the first things I did was buy A BMW. Right? So not the smartest thing to do. So kudos to you for that, brother. But I hear you also purchased a nine unit multifamily property and we want to deep dive how you did that. But first Grayden, we’re going to take a quick break to your word from today’s show sponsors.

Ashley:
Okay. Welcome back. Thank you everyone for taking time to check out our show sponsors just like you. They help make our show happen. We are here with Grayden who is 24 years old and purchased a nine unit. So Grayden, how did you find this deal, first of all?

Greyden :
So after my duplex, I got it rented out, realized I got to save up again to buy something else. During that time, I found the Pace Morby podcast on BiggerPockets about seller finance, creative financing. I dove into his world. I ended up working with somebody in that space for seven months, learned everything about seller finance and things like that. Learned about wholesaling and worked with them as an acquisition specialist. And then in doing that, I was talking to people, they knew what I was doing and then my dad heard through a grapevine he was working at the property and that the owner of it was a 40 unit building. He heard that the owner wanted to sell one of her buildings. So he gave me a call and it was my buddy’s grandma. I knew where she lived. I mulched at her house one time and I actually went and knocked on her door the same day. So she didn’t answer. I left a note and then got a call back a couple of days later about the nine unit and got everything kicked off.

Tony :
So I just want to break this down. I want to make sure that all of our Ricky are tracking here. So your dad found out that this lady wanted to sell her house and the lady just so happened to be one of your friend’s?

Greyden :
Yep. That she wanted to sell one of her apartment buildings?

Tony :
Yeah. Talk about serendipity, man. So you go knock on the door and what do you say? How do you even open up those negotiations?

Greyden :
I’ll tell you what, I was good at talking to people on the phone. I was doing acquisitions, Facebook stuff, but in person, this would’ve been my first time and I’m happy she didn’t answer the door because I don’t know what I would’ve said. I just knew that I had to go and do this and I knew how to negotiate a little bit, but never in person. So I left a note with my number and then she was able ended up calling me back three or four days later saying, Hey, I am interested in selling. And then she was open to selling for 300,000 cash and then it went from there.

Tony :
Great. And you said something incredibly important. I want to make sure we don’t pass this out, but you said, I didn’t even really know what I was going to say, but I knew I had to go out there and talk to her. And I think for so many rookies who are listening, they feel that same fear around like, well, I’m not exactly sure what I’m going to do next, or I’m not exactly sure how this is going to work out. And they let that fear of the unknown stop them from taking action. But what it sounds like great is that you felt that fear and you were able to push forward anyway. And I think that’s what separates the successful real estate investors from those who either never get started or who start and stop before they find that success. Now, one caveat I will add is that as you said, you had some experience already. You’re doing acquisitions for someone else, so you’ve been reading a lot of books and seeing a lot of constant, you had your house hack already, so you had some level of experience. So it wasn’t like you were going to blind, but for some people they can’t make that distinction between taking that logical next step and maybe stepping outside of their comfort zone a little bit.

Ashley:
Tony, are there any circumstances that you can think of as we’re talking about this, where you regret not getting in front of someone or jumping on the opportunity by literally just saying, I’m interested, or even asking your face? I can already think of several for myself.

Tony :
That’s one thing I think I’ll give myself credit for is that I’m usually pretty good about making the ask. So I’m trying to think of any opportunity where I was like, man, I should have did that, or I should have said that and I didn’t take it. But nothing comes to mind right now.

Ashley:
Nancy’s, because you’re such a unicorn. Tony,

Tony :
What comes to mind for you, Ashley?

Ashley:
Well, the first thing I thought of was our neighbor’s house. I don’t know them. There’re kind of down the road a bit. And I just always thought this house was a rental. And I dunno, a couple months ago there was a big dumpster and I was like, you know what? I bet the tenants trashed it. They’re cleaning it out and they’re going to sell it. I was like, I should stop while they’re cleaning it out. And what do you know? A couple of weeks later it goes on the market. And I had that regret of I should have just stopped and I should have just had that conversation and I probably could have gotten an off market deal, maybe, maybe not, but still there’s that. I didn’t even stop to ask that point. I’ll

Tony :
Share a quick story and I’ve shared this on the podcast before and it’s such a silly story, but it had such a big impact on me. But I was in eighth grade, I was 14 years old, something like that. And me and my friends were at the mall and one of his dads picked us up and we were coming out of the movie theater and we were giggling in the backseat and he was like, oh, what’s so funny guys? And oh, there were these cute girls and whatever. We wanted to go say hi to him. And he was like, why didn’t you guys go talk to him? And we were like, I don’t know. We were too nervous. And he looked behind us, I was sitting in the back seat and he looked at us, he was like, well, what’s the worst they could have said?

Tony :
And we’re like, I don’t know. He’s like, well, the worst they could have said is no. And you still would’ve gotten in the car and driven home. And it’s such a silly story because it’s about a 14-year-old kid being too afraid to go talk to a girl at the mall. But it always stuck with me because it’s true in all of life. It’s like the worst someone can tell you is no, and you shake hands and you go a separate way. So I’ve always kind of had that in the back of my mind about taking risks and asking those questions.

Ashley:
So in that moment when you actually do talk to her and you start the negotiation, she wanted $300,000 cash. I’m assuming Pizza Hut has not supplied you with $300,000 that you were hiding under your mattress. Where did you start with your side of negotiating?

Greyden :
Certainly if I can touch up on one point about the regret, it is like a big why. One thing that pushed me to go knock on that door is I don’t know how long I have with my dad, even still to this day. So anything I do, no matter how bad my pits are, sweating, no matter how nervous I am, I force myself to be uncomfortable and go and do that and take that next step because if something does happen, I don’t want to live with that. I should have or could have done this. I want to know that I’ve done everything I can in the time I have to do it. So I think that’s why it’s motivated me at a young age to kind of keep pushing and keep going after those things that make your pit sweat. For me, every time I start a negotiation, you get the condition, the timeline, the motivation, price.

Greyden :
She wants $300,000 cash. I told her I can maybe even give you a little more than that $300,000. I won’t even argue the purchase price if you’re willing to sell it to me on terms. And then that normally opens up the conversation for the seller to say what are terms because they’re interested in that price if they are. And then that’s where I was able to discuss terms with her a little bit. She said, you know what? I don’t care. I’ll sell it to you on terms or the cash. Let’s just sit down and have some lunch. So that was another nerve wracking thing I had to do was go talk to an investor over lunch and then ended up doing four different lunch sessions with her where we were able to negotiate between seller financing and the cash.

Tony :
So Grayden, and again, kudos to you for pulling this investor kind of along this journey of describing what seller financing is and how those things work. But when you sat down, you said it was four different lunch sessions that you guys had. Walk us through the first one and then what was the need for the subsequent three? What was that first conversation like and how did you actually get it across the finish line over those four lunch sessions?

Greyden :
The first conversation, I don’t know if she had a ring camera or something, but a lot of it was, I have a granddaughter, she might be interested, you should meet her, this and that. And I was like, wow. So it was a lot of that. And then not really much of the deal, which was kind of funny, but I discussed seller financing with her through that. She was really easygoing. She was like, I don’t care. Whatever you need down, whatever this, she did want to get paid out in a certain amount of time. She was older, so that was one thing we negotiated on. But a lot of it was just instead of talking on the phone, she wanted to just meet up for lunch. I’m not sure why, but it was anytime that she wanted to talk after that, it was just to come in on lunch. So it was, at first we were negotiating the terms and then she backed out of it at one point, so we had to come back and renegotiate that.

Tony :
I’m just curious, what were some of the sticking points, not negotiation like you said she backed out at one point. Why did she back out? How did you get her back into the deal?

Greyden :
It was the down payment that she wanted. I was down around 50,000 and she wanted more. So I ended up working it out with the monthly payments and everything to where I was able to give her the a hundred thousand. I think Ashley asked, pizza Hut doesn’t supply you with that 300 k. Through working acquisitions, I knew about private money lenders and listening to Pace on how you can use a private money lender to go ahead and buy seller finance deals and then they would be in second position the private money lender would. So with that, I knew that was an option. I also had the option of, I kept it open of selling it for cash. She wanted 300,000 and if I wasn’t able to find that private money lender, I was going to wholesale it to another local person and they were going to give it 350,000 cash. So I would’ve had an assignment fee, but I ended up working out the private money lender and then buying the deal.

Ashley:
And what were your terms for the private money lender? What were you paying interest on that and what was the amortization I guess on that too?

Greyden :
So I borrowed $115,000 at 14% interest only payments. So I made ’em 12 different payments of $1,341 a month. So that pencil’s out to about 16,000 a year in interest only that you pay to that lender and then at the end of the 12 months you got to give ’em back their one 15. So I talked to probably about 50 to 60 people on Facebook through groups to try and find someone to lend. And I finally found somebody that was interested and confident in the deal. But

Tony :
I guess a couple questions from me grad because there’s a few things you mentioned. So you said that the, well maybe let’s take a step back. The actual seller finance terms. Can you walk through those first and let’s compare the seller finance terms and the private money terms. I want to know how those here are kind of interacting with each other.

Greyden :
Definitely. So instead of the 300,000 cash, we settled on 375,000 purchase price with that, she wanted 90 5K down and I borrowed 115. So that paid the 90 5K plus the closing cost and I actually walked away plus the closing cost 10,001 15, I paid off 105 and I walked away with $10,000 check. And then through those four years, I pay her 1750 a month. And then what

Ashley:
Was the interest rate on hers?

Greyden :
The interest rate was 0% at first and then at $400,000 purchase price. And she talked to her controller who told her that she needed an interest rate. So we dropped the price to 3 75 and put on a 2.75% interest.

Tony :
Yeah, so 2.75 on a four year note on

Greyden :
A four year note?

Tony :
Yes. Gotcha. So this is where, and we’re kind of getting into the weeds here, but I think it’s good because it’s in instructive for Ricky’s that are listening here. You’ve got your seller finance note at 2.75 at four years, but then you have your private money note for that one 15 on a 12 month term. Yes. Okay. So there’s big question, right? You’ve got a year on your private money, you’ve got four years on your sale of finance note. So what is the plan to repay your private money lenders after those 12 months are up?

Greyden :
Yeah, so I bought it last May. This May is the 12 month period. And over the last three months I’ve been talking to a bunch of people and it’s a lot easier to negotiate after you’ve owned the building for 12 months, you’ve made 12 months of payments to somebody and you’re able to cash out that one 15. I was looking to go ahead and bring in somebody else for one 15 on a more secure note, the first lender had to take a chance with me. I didn’t own it yet. I gave them the plan of what I wanted to do with the building. And now that I’ve actually done that with the building, it’s a lot more secure to find somebody. So the same thing, I reached out to Facebook groups, found someone to bring in that one 15. If that did fail, I had the chance to go ahead and sell it, cash out both people and take my money off the top. Or I could cash out, refinance, hold the longer note and pay off both lenders and just have a note with the bank. But I want to take advantage of the 2.75% interest as long as I can. So I’m going ahead and just cash them out with somebody else and they’re more secure knowing that I already have the deal working.

Ashley:
Yeah, I’ve talked to, I was talking to James Ard about this from on the market podcast the other day about a property I have where there needs to be some rehab in the commercial space. And he gave the same advice that it’s better to once you get the property stabilized, because the property cash flows without this other unit rehabbed, it doesn’t even need to be rented out. And it’s a great cashflow. And he says you show that for so many months, there’ll be a lot of private money lenders who would love to put their money on a note for that, even if it’s second position because it’s already stabilized, it’s already cash flowing and this is just extra gravy and you’re going to be adding even more revenue using those funds to rehab the property. So it was something I never really had thought of before. I don’t think I’ve ever taken a second position lien before on a property. So it’s just interesting as the ways you can get so creative with lending. And even though banks always want that first position, that doesn’t mean private lenders always need that first position too.

Greyden :
If I could say too, talking to probably 70 plus people, a lot of them want that first position. So I had to put up my duplex as collateral. If I don’t pay him back, he gets my duplex, which I have about 50,000 in equity now and it cash flows a thousand a month. And then also a personal guarantee. And then one thing that made them confident in lending as well is I have 360 5K in debt now and the building’s worth 500,000 plus. So the loan to value, they know that I could sell the building and they can get it back too. So there’s a couple different layers of protection in that second position to where they won’t get screwed over on their 115.

Ashley:
So is that second position on your house hack too then that they have

Greyden :
Yeah, it’s collateral in the promissory note on the building.

Tony :
So one last follow up question, Grayden, and I think this is the million dollar question you keep mentioning Facebook groups to find your private money lenders because I think a lot of people understand what a private money lender is, and we’ve had our fundamentals of funding theories where we talked a lot about private lending and those different things, but the biggest question that people have is, where do I go to find these people? So what Facebook groups are you going to? How are you approaching these people? And then how are you pitching them on actually coming in into private money lender for your real estate deals?

Greyden :
I go to one Facebook group and it works, it’s creative finance playbook with pace morby. I post it in there and there’s a bunch of different people, whether it’s people like me trying to find lenders or people that are trying to lend and understand the creative space. They comment on that post. I post all the deal details in the description and then say if you want more details to go ahead and message me. So they would message me. I discuss with them, majority of them are brokers trying to go ahead and lend to you, but a lot of them too are private money that you got to sit and talk to on the phone, match a face to a voice, make sure you’re a real person and then discuss. I’ve had a lot of people say, no, it was tough, but you got to have that why you can’t regret not pushing hard enough. You can’t regret not pushing to get it done. So I just kept talking to people until I found the right person.

Ashley:
So I want to ask, what are some things that rookies should be considering when they’re trying to negotiate their own seller finance deal or maybe even a private money lender? What are the terms, the different things they should be looking out for when putting together this kind of deal?

Greyden :
So for me, a lot of it is cashflow. I want to be able to cash flow on my monthly payment to them and have a good rental. So in order to do that, I tell them, I won’t argue the purchase price as long as you’ll sell it to me on terms. And that’s where you get the good terms. So there’s the purchase price, the down payment, the monthly payments, the length and the interest. So the purchase price, I won’t argue now. Then we go to the monthly payment. I tell them I want a cashflow at least $500. What’s the lease you’ll accept? There’s normally not much pushback on that. And then for the down payment, I like to tell them I want to be at a 10% down or less. I’ll pay all the closing costs, but I want to be at 10% down or less.

Greyden :
And a lot of ’em have pushback on that. I tell them, look, if I went to a bank, I would give ’em 15 to 20% down. I’ll get 30 years to pay them off and I get to pick any house in the state that I want to buy. I’m not just tied to this specific property. So that’s the reason I want to be in for 10% down. And then I tell them for the length of term, the shortest I do is five years. I like to do seven to 10 years. What’s the longest you’ll be willing to give me to pay you off? And then that normally starts that conversation. And then for interest rate, I don’t even mention interest rate. Most people won’t even ask about interest. They’ll just worry about what the purchase price is, what the down payment is and how long until they’ll get paid off in full.

Ashley:
I found that too, that the interest rate really doesn’t matter that much. It’s more of what the actual monthly payment is and when they get paid off in full too is way more important than the actual rate itself. I feel like if I do a seller finance deal and there’s an agent involved, I feel like the agent is the first one to give pushback. Like, oh, well that’s way below what market rates are right now. Yes, I know that’s I want to do seller financing. And right now, the most recent deal I did, they did 3% and there was no pushback at all. It was the only pushback was they wanted a little bit more of a down payment and what I did instead was I paid the agent commissions instead of increasing the down payment. But yeah, I agree with you there. That interest rate really isn’t that important to most of the sellers. So can you kind of give us the final numbers on what this deal looks like?

Greyden :
So the final numbers, when I first bought it, she had them all renting out, there’s nine units, about 500 a piece, so it was only $4,500 that it was collecting. I knew I can get that up to around 7,000. So I had a big opportunity for rent raise. So when I bought it, I negotiated 1750 to her and the 1341 to my private money lender, and that comes out to about $3,100 a month. And then with my utilities, my insurance, my payments come out to about 4,100 and right now I’m collecting 5,400 a month in rent. So I got that up about $900 in the past year. I’m still continuing to rent raise, but right now I’m cash flowing about 1300 a month on top of all my payments from rent collection to all my expenses.

Ashley:
Well great. And that’s awesome. Congratulations on locking up this deal. We’re going to take a short break, but when we come back I want to hear about what you’ve done to the property since, how you’ve actually been managing the property, dealing with tenants, and any lessons you have learned along the way of this deal. So we will be right back. Okay, everyone, thank you so much for joining us. We are here with Graydon and we are talking about his nine unit. So you’ve purchased the property and now you are a small multifamily operator. What lessons have you learned along the way?

Greyden :
There are definitely a lot of lessons. The biggest ones for me, since the rents were so low at 4,500 and I knew I had a deal, I walked in there with googly eyes. I was so excited to get it. I didn’t even pay for the $2,000 inspection. I thought I was a pro at walking through houses from my duplex that I would see everything. That wasn’t the case. The first month in there, there was bedbug infestation and probably about seven out of the nine units. So without getting that inspection, I didn’t know. And that was a $5,000 three month holdup fix on trying to get all of that out. So the learning lesson there, I definitely should have got it inspected. As for what I’m doing to the property, I’m just painting fresh paint, fixing up kitchens, putting in new toilets. A lot of our bathrooms are yellow and pink tile, like old bathrooms. So I’m just painting all that white, just updating it and then listing it for what it should be at market rent since she’s already renting really low. So just quick surface cover, touchup and then renting ’em out.

Tony :
Great. And what about the management?

Greyden :
I’m managing it myself. So there’s definitely learning lessons there between dealing with drunk tenants that are getting mad at you. HUD section eights, really everything you just walk into. I’m managing it. My dad was a contractor growing up, so he would help me with the rehab stuff. But anything like plumbing fixes, electrical roof leaks, I call that out and shop around. That’s one thing you have got to do. You can’t go with the first person. You have got to make five, 10 calls. It doesn’t matter how bad it stinks. A lot of people get lazy and they’re going to call the first or second person that’ll come out and give ’em an estimate. Even if you do that, you got to shop prices if you want to make it work. One thing I didn’t have, I’ve walked away with $10,000 for the property, but 5,000 went real quick to bedbugs and I didn’t have a lot of money on top for rehab stuff, so I really had to be cautious on what I was hiring out and what I was trying to learn myself to go ahead and fix.

Ashley:
I’ve never dealt with bedbugs before and I never want to. I’ve heard that they’re definitely one of the things that you don’t want to deal with. And Tony, I can imagine it’s even more or it’s worse for you having a motel and being in the hospitality industry than it being in someone’s apartment.

Tony :
Knock on wood, we haven’t had that issue yet of bedbugs at the motel and fingers crossed it. It never gets to that point because it would be a bit of a headache. But granted, I guess one question I have for you. What led you to the decision to self-manage versus hiring it out? I know you had the duplex where you were house hacking, so you had some experience, but what was your thought process to say, Hey, let me self-manage these nine versus hiring it out to professional?

Greyden :
I’m young. I like to think that I’m in real estate wholesaling wise and things. I know the market as rent wise and really it’s just my cashflow right now is 1300 a month. Once I get it up to where it’s optimized, I’m going to go ahead and rent that out because it’s really not passive when you’re managing yourself. A lot of it is headache, but for me it was just I don’t have the money to take out at the time to go ahead and hire out property management. So yeah, it’s something I do enjoy too. So I like to go ahead and

Tony :
Trying to save on the expenses and it’s a smart decision to make. Right.

Ashley:
Me and Tony both started out too. I mean, I think that’s a lot of the route a lot of people go and not only to save money, but to learn the ropes of it too.

Greyden :
And you have to know too, when I do hire a property manager on what I’m going to still have to manage them, so I want to make sure they’re doing it right and things, so I have to gain that knowledge as well.

Tony :
Gre, are you using any software to help manage your nine unit?

Greyden :
I’m using Google Sheets. I have all my expenses, all my rent collection, all my utilities. So it stinks every month. I’m going in putting everything out and being disciplined with that.

Tony :
Yeah. So Ash, as our resident, long-term rental property management queen, what is your advice to grade on the software stack side?

Ashley:
Rent ready? 100%. And you’re a BiggerPockets Pro member. I think you get it for like a dollar or it’s free, but it’s life changing. When I started as a property manager, I was put into an office that had literally a white piece of paper with, they had taken a ruler and a marker and made grid lines across this blank piece of paper, wrote every tenant’s name. This was for a 40 unit apartment complex, wrote everybody’s name and then the month at the top and it crossed and there was literally an X or a check mark if they paid rent. And I would be like, what if they paid partial rent and there would be little tiny written in, they only paid two 20 or something written into this little tiny box. Then it would be highlighted once they paid in full. And after that experience, it took me a long time to figure out property management and stuff like that, but once you put your processes and your systems in place with software, it is so much more convenient and nice and now is the time to do it before you have 50 units and you’re growing and scaling beyond belief.

Ashley:
But yeah, I highly recommend rent ready to for your house hack too, in your nine unit. So green, what is next? Is there bigger and properties in your future or what’s kind of the plan down the road?

Greyden :
Yeah, so I hang up. We buy houses signs. I still post on Facebook groups trying to find more deals, whether I’m wholesaling them or structuring deals and want to buy them. For me, I want to fully optimize this building to make me about 3000 something a month. And then I’d like to quit my full-time job there for the building. I want to get it towards, it’s making me 3000. I’d like to cash out refi, get everybody out that all my lenders out and be able to walk away with from my math, probably about 70 to a hundred thousand dollars that I can go ahead and redeploy into other properties. So optimize the building, cash out, refinance, and then buy more units and then get rent ready to keep everything controlled.

Ashley:
Okay. Well, that’s awesome. We loved hearing about your journey so far and can’t wait to have you back again someday to hear how much farther you have come. Maybe it’s going to be like 30 before 30, you’ll probably hit 30 units or something in a couple of years. But congratulations once again on all of your success so far. And I’m so glad that your dad is doing better and you get to build your financial freedom and share it with him.

Greyden :
Thank you so much. Seriously, thank you for having me. I really do appreciate those kind words and I’ll definitely be back. So thank you.

Ashley:
Thank you everyone for listening to this week’s Real Estate rookie episode. I’m Ashley. And he’s Tony. And we’ll see you guys next time.

Tony :
This BiggerPockets podcast is produced by Daniel ti, edited by Exodus Media Copywriting by Calico Content.

Ashley:
I’m Ashley. He’s Tony, and you have been listening to Real Estate Rookie.

Tony :
And if you want to be a guest on a BiggerPockets show, apply at biggerpockets.com/guest.