8 Rentals in 3 Years While Working a Full-Time Job AND Remote Managing

Tony:
Alright guys. Our guest today started investing in real estate just three years ago, and he has already snowballed his portfolio to eight properties. Now, what sets him apart in a competitive market is his unique niche, and that’s preserving and revitalizing historic building. Now Lucas found a way to stand out by blending his passion with strategy and it creates value in a way that few other investors do. And look, I’m super excited to dive into his journey today and learn more about his approach to balancing profitability with preservation. So guys, welcome back to the Real Estate Rookie podcast. My name is Tony J Robinson and I’m sadly not joined by my co-host Ashley Care because she’s out traveling today. But we’ll be back together soon in a few weeks, so don’t worry. But this SD podcast where every week, three times a week, we bring you the inspiration, the motivation, and the stories you need to hear to kickstart your investing journey. Luke, thank you so much for the show. We’re excited to be having you on today, brother.

Luke:
Thanks, Tony. Been a fan of BiggerPockets for many years and look forward to the conversation today.

Tony:
Same here, man. And look, we’re going to discuss how to build and maintain your portfolio remotely, why writing letters to sellers still works today and how to make you stand out. And lastly, we’re going to talk about why networking is so crucial and how you can use it to land a 5% interest rate. So look, super excited to dive in, man. I guess where I want to start, maybe just start by giving us a snapshot because you’ve scaled your portfolio pretty quickly, but just give us a snapshot of your life, where you’re based and your career when you started investing in real estate.

Luke:
Yeah, absolutely. So I live in Chicago, Chicago, proper full-time. I’m in the Lincoln Park neighborhood right now. I live right across the street from Lincoln Park Zoo for those who know the Chicago land area. I’ve been in Illinois my whole life, born and raised. I am originally from a town called Bloomington Normal. Technically they’re twin cities and I’m from a town called Normal Illinois. It’s about two and a half hours south of Chicago and that’s where all my properties are today. They’re in that Bloomington normal market. I’ve been in Chicago for about eight years now. Got into real estate right around three years ago and for the past roughly six years since I graduated from business school, I’ve been working in an industry completely unrelated to real estate and that is management consulting. I love what I do have no necessary intent to leave, but I’ve developed this pretty strong passion for real estate over the years.

Tony:
Let’s dig into that just a little bit. Luke, what sparked that interest in real estate? There are a lot of other ways that you could spend your free time other than tenants and toilets. What was it about real estate that piqued your interest?

Luke:
Yeah, everybody has a really unique, at least I think, unique origin story and how they get into real estate. And I think mine is as well. For me, it started in 2021, a very vivid memory that I have. It was actually the 4th of July. I was up in Wisconsin with a lot of my friends. I played football in college and a lot of my friends now are my former teammates. And so we were all there together spending the 4th of July with one another. And one of my former teammates has been fortunate enough to continue playing in the NFL. So he’s going into his now sixth season right now with the Jacksonville Jaguars. And as we all know, the NFL pays pretty well. And so he was talking a few years ago about how he was using some of the excess funds that he had from his career in the NFL to invest in real estate.

Luke:
And also serendipitously just so happens that he’s from a small town close to where I’m from in central Illinois as well. So very similar markets. And I was just listening to him talk really passionately about the type of fun, joy and also financial benefit that he was getting from real estate. And I didn’t know a thing about it. And so truly I just wanted to read a book about real estate investing so I could connect with him in the future and we could talk about real estate and I could just understand what he meant by a lot of what he was referencing. So I ended up in August and September reading of course the book on Rental Property Investing by Brandon Turner. And after reading that book, not only did I now understand real estate, but I thought I can do this and I think I want to. So that was how I started, ended up buying my first property a few months later.

Tony:
And first kudos to you on getting that first property a few months later. I think a lot of people, they have that light bulb moment where they say, I think I want to invest in real estate, but then it takes them 12 months, 18 months, two years, five years before they actually end up pulling the trigger. And I want to get into that, but I guess one final follow-up question at the outset, what was your exit plan with real estate?

Luke:
I didn’t enter into real estate to build a path for me necessarily to leave my nine to five. For many people out there who are listening, they may have a nine to five. I certainly do. I’ve been fortunate that I actually love what I do. The people that I work with been there for six years. I have no intent to leave anytime soon. So I wasn’t in much of a hurry to build a very strong and robust passive income stream to pursue that full time. It was something that really just interested me and also a bit of how I’m wired. I’m somebody who likes to continually learn, grow, challenge myself. If I don’t feel a little bit scared, then I feel a little bit complacent. And this for me felt like I was jumping off of a high dive and I felt pretty scared and it was something that I think motivated me to decide that it’s something I should pursue and I’ve continued to do that. I still feel like I’m on an even higher diving board today.

Tony:
Luke, you said something that I think is incredibly profound and I want to make sure we don’t pass over that. But if I heard you correctly, you said as you thought about getting into real estate, you felt a little bit of fear, but it was that fear that made you realize that you were doing the right thing. Is that what I heard?

Luke:
That’s right. And I remember a particular moment where felt the most fear, where I absolutely doubted myself, questioned myself, should I continue with this? I can still pull out if I need to. And that was when I was walking in for what felt to me like this massive amount of money in my pocket. I had a cashier’s check when I was going to the closing table for this first property that I purchased and it was only a down payment of around 10 or $12,000, but that was the most money that I ever held in my hand at one time in my life. And it felt like I was cutting the parachute or whatever kind of safety harness there was. And when I had the keys for the first time, my emotions flipped and I felt that it’s time to get ready and start moving.

Tony:
Now Luke, you were obviously able to push through that kind of fear pretty quickly because you said it was only a few months after that conversation on 4th of July that you actually got your first deal. So maybe walk us through that. What was your strategy for that first investment?

Luke:
Yeah, so my initial strategy for my first investment was about as traditional as it gets. I was specifically looking for a single family home, something that had maybe been on the market for a little while and was being overlooked by other buyers, whether it’s a family moving in, first time home buyer potentially, or investors. So I was exclusively looking for places that were hanging out there for one reason or another on the MLS and again, only single family homes in the Bloomington normal market. My plan was knowing that that there were probably going to be naturally some renovations that needed to happen. I was not looking for something significant. I was looking for places that only needed light to maybe moderate renovations. My plan was to not do the work myself, but hire a contracting team to do that work, take however many months it needed and then turn it around and rent it for a long-term rental. So that was my plan going in and that’s how it ended up panning out overall.

Tony:
So stay tuned after a break from more from Luke. Now look, if you’re hoping to invest out of state, you will need a team to help you manage your properties. So head over to biggerpockets.com/property manager to learn more. Alright guys, welcome back to the show. We’re joined again by Luke Otto. So can you quickly break that deal down for me? Luke, you had a pretty tight buy box and I guess again, just a few months later you actually found it. Just break it down. How did you find that deal so quickly and just go over the numbers for us as well.

Luke:
So this is a fascinating property. I still have it. I love this property. A lot of people feel an emotional pull to their first property. I absolutely do. It was owned by an investor, a single family home, two bed, one bath, and it was vacant when I purchased it. The tenants had moved out a few months beforehand and this property had been on the market for about two, two and a half months. Despite it being a two bed, one bath property, it is six and 76 square feet. It is tiny, it is a tiny property, has a living area, a full kitchen and a bathroom all on the first floor. Very small dollhouse. And so I ended up offering on that. It was listed for $70,000. It had not come down in price. I had not seen based on any other previous offers that were out there, any sort of deal activity. So it was just sitting. I ended up making an offer right around I believe $55,000. I tended to be and still am more aggressive in earnest money to show that with any offer that I make, I’m serious about it. So I tend to offer a pretty substantial earnest money amounts. And it was a pretty traditional offer financed with the conventional loan. And when I made that offer, the counter that I received was instead of $70,000, $63,000 and I ended up accepting that. So it was $63,000 for this two bed, one bath hole.

Tony:
I want to ask one question, Luke, because you offered significantly lower than what the asking price was. What gave you the confidence to do that? I guess let me preface this question. A lot of times when we’re talking to Ricky Investors, they’ll say, man, it’s listed at 70,000, but that’s more than what I can pick it up for, so I’m not going to submit my offer. What gave you the confidence to say, Hey, I’m going to submit my offer at 50 or whatever it was.

Luke:
So I never want to offend anybody. Every offer that I’ve ever made has never been above the asking price. It’s always been below. And of course there’s a line that you tow with being realistic and also not being offensive to the individual who is selling this property. And something that I’ve actually done with every property that I have purchased, every property that I’ve bought, I have asked the agents if I can meet the seller directly for the property and I’m happy to do that in the presence of the agents, I’m happy to do that in any location. And I had done that with this property as well. So I met the owners and I first just wanted to learn about their story, their history with the property, how long have they owned it, how has it transformed or not transformed in their tenure that they’ve had the property, what do they do for a living?

Luke:
Why are they selling it now, what are they looking to accomplish? Turns out this was owned by an older couple, both of whom were teachers at a local school in the area and they had built up a portfolio of about 40 properties over many years of teaching and they were offloading their properties so they could go retire and move to Arizona. And I had told them, I’m at the opposite end of my career. I’m looking to get in. I think this is frankly the perfect type of property. It’s exactly what I’m looking for. It has, I think what could make it a successful property. It needs some work. I want to that I will make an offer and I’m serious about this, acknowledging the work that’s needed. It will be below the asking price. And that was how I had the confidence to make that offer.

Tony:
I always take the emotion out of any offer that I submit and I’ll run my analysis and whatever my maximum allowable purchase price is and the little calculator that I use, I’ll copy that number and I’ll drop it into the email where I submit my offer. So if they’re asking 500, but my maximum allowable offer is $397,826, that’s what I’m going to put in the email. So for me, I always remove the emotion and I say, Hey, here’s the number that I needed. If it doesn’t work for you, no harm, no foul. But if it does work, let’s have a conversation. I’ll give you a quick example, Luke. There was a cabin that we were looking at purchasing and I’ve been watching it for a while and it was initially listed for over a million bucks, I think it was 1.2 million. And I was like, that’s a little steep for me.

Tony:
We offered 700, they didn’t even counter, they’re like kick rocks, we’ll go find someone else. The property continued to sit, they dropped it from 1.2 down to I think just over a million, offered 700 again, didn’t get a response. They dropped it from a million to nine 50, offered 700 again, and they countered at eight 50. That was the third offer that I had submitted all at the same number. And now they finally countered. I still said no because it’s getting my max is 700, but it’s been sitting at, they actually dropped the price at eight 50, it’s been sitting at eight 50. So guess what I’m going to do again in a couple of weeks, resubmit that same offer at 700 and hopefully now they’ll come down to maybe seven 50. So always submit based on what number makes the most sense for you.

Tony:
Okay, so you got this first deal, again, moved pretty quickly, but now you’ve scaled Luke from zero to eight in three years. And I think when people hear that kind of scale, they can maybe understand the first acquisition, the second acquisition, like, okay, cool, maybe you’ve got 10%, 15, 20% down on each one of these and you’re kind of making it work. But the idea of 3, 4, 5, 6, 7, 8, I think that part starts to get a little bit more less clear for folks. So at a high level, how did you grow your capital? What capital did you leverage to keep scaling in such a short period of time?

Luke:
Great question. So I ended up buying my next property about six months later, so not too long after this first property, it had just rented out. And then I closed on again, a single family home, very similar in style. This time it was a three bed, one bath, a little bit larger, and it was the same playbook, I’ll say I was looking for the same type of property, maybe a little bit more in terms of the renovations that were needed. But I financed that with my own cash, I sold stock. That’s where this is coming from, either in a brokerage account or I have done this number of times. Now I have gone into, and I don’t necessarily advise or not advise against this, but what I’ve done is I have sold some of my funds in retirement and invested that in real estate and I did that to buy my next property.

Luke:
And then I had no intent to continue purchasing properties at that time. I wanted to wait, stabilize both of these, grow as a property manager and get that under my belt and then continue from there. But as luck would have it, I was talking about real estate just a few months later with again, a very similar group of friends. And somebody else said to me true story. They said, Luke, hypothetically speaking, if somebody came to you with half a million dollars of cash to invest in real estate, how would you invest it? And I said, well, his name’s not John, but I’ll call him John. I said, John, I have a feeling this is not a hypothetical and you actually have money to invest in real estate. And he said yes, and it was a crazy story there, but we ended up partnering together. So I partnered with a friend of mine who became the passive investor to put money down for the down payments for properties and to finance the renovations. And I did everything else and we split all the returns that come in for those properties that we ended up purchasing, again, single family homes there. And then from there, I’ll just say in terms of other methods that I’ve used since then to buy the other properties that I’ve had, it’s gotten progressively more creative over time. I’ve used HELOCs now I’ve also used stellar financing twice to buy three properties that are all multifamily.

Tony:
And I think there’s a lot to unpack here, Luke, but a couple of things I want to point out. So the creative finance piece, I think I want to touch on that. I think it’s an interesting way to scale up. The partnership piece is important as well. But did you after that second property, consider yourself an expert real estate investor?

Luke:
I still wrestle with that question. Am I an expert real estate investor? I would say I know my way around. I know my way around now, but after that second property, I still felt like I had a lot to learn.

Tony:
Okay, and I’m glad you said that. That leads perfectly into the point that I was trying to make here, Luke, is that in your mind as the Luke that had just completed his second real estate transaction, you still felt that you had a lot to learn, but in the mind of your friend John, you were the resident expert in his life, so much so that he said, I’ve got half a million bucks and let’s go invest this together and look Luke, I’m going to trust you to figure out what to do with this. Now it’s a large amount of trust, but here’s the thing, and this is for all of the rookies that are listening, people invest with people that they know that they like and that they trust. And even if maybe Luke hadn’t done a thousand real estate transactions, John knew Luke, John liked Luke and John trusted Luke, and that’s what gave John the confidence to say, Hey, let’s go in on this together.

Tony:
So for all of the rookies that are listening, even if you’ve only done one deal, and believe me when I say this, even if you’ve only done one deal, the knowledge gap between the person who’s at zero and the person that’s at one is much bigger than the person who’s at one deal and the person who’s at two, right? It’s a much smaller knowledge gap. So in John’s mind at zero and you at two, that’s a massive, massive gap of knowledge and you were able to use that in a way that was mutually beneficial. I think that’s super important for Ricky to understand.

Luke:
I agree. And that was another time in my journey where I felt, again, an immense sense of fear because I was taking on how I perceived it, the responsibility of somebody else’s money, someone else’s investment. Now I was going to treat it with the same level of care that I would for any of my own. But again, it was another step where along that journey it was uncomfortable, but I felt it was the right thing to continue forward.

Tony:
Now the first property, at least the first couple, sounds like you found those on the MLS. Have you gone any other ways to find those deals or have all of those been directly on market?

Luke:
The most recent properties, those most recent four properties have come to me through my now current real estate agent who I found on the BiggerPockets network. He’s the only agent in the Bloomington normal area who was affiliated with BiggerPockets. And that is why I reached out to him to network with him about a year and a half, two years ago. And he has been tremendous. He’s also now my property manager and he’s a fellow investor. He’s doing a house hack of his own and he’s been in the market for many years and knows it extremely well. He has been by far the most significant cornerstone of the team that I’ve built over the past few years. And so everything did start on the MLS, but then most recently the properties have been brought to me through my agent just at different appropriate times where he says, Luke, I think this fits what you’re looking for right now.

Tony:
So he’s kind of got these off market pocket listings that he feels suits your buy box and he’s coming to you and saying, yeah, these aren’t on the MLS yet, but I think you should take a look at these before they get there.

Luke:
Exactly.

Tony:
Okay. Now let me ask Luke, these off market deals, it sounds like most of them kind of needed some work. How big of a rehab project are you taking on? Are these now all just kind of the same lipstick, quick in and out type deals, or have you maybe matured and graduated to bigger rehab projects?

Luke:
Yes, the latter. I have matured and graduated to bigger rehab projects, gotten a bit more confident in knowing what to do and how to do it. I now have a contracting team that is wonderful and I’ll tell you that took some time to build. I’ve been through a number of teams and now I have one that I trust, but I ended up deciding to pursue the Burr strategy for the remaining properties that I’ve purchased. And coincidentally, they’ve all been these old hundred to 120 year old Victorian style or Queen Anne style properties that have been chopped up over time to become a duplex or a triplex. And so that’s what I’ve purchased most recently. One of them, just to give you a sense of the magnitude of what has gone into these things, one of them I purchased recently for $50,000. It’s a four unit building.

Luke:
Now why would a four unit building sell for $50,000? A number of reasons, but the primary reason was last year it had a fire, unfortunately a pretty catastrophic fire on the front porch and it destroyed one of the units of the property. Thankfully, most of it is still preserved and fine and it’s beautiful on the inside, original hardwood floors, pocket doors as well. I love that kind of character, but it was uninhabitable and it had been for many months. And so that property, despite it being purchased for $50,000, the renovation there is very significant. It’s well over $400,000 to renovate this property,

Tony:
120 years old. That’s insanity. I’ve never purchased anything that old before. Do you feel that that maybe gives you a leg up in that market? I dunno, I guess because I would think an old Victorian home, there’s maybe an appeal to that that you don’t get with a new construction home or something that was built more recently. I guess what impact do you feel that maybe focusing in on that niche specifically has as you’re going to either refinance, obviously on the appraisal, the backend appraisal, but also when you’re looking to get tenants into the homes?

Luke:
Yeah, absolutely. I think people appreciate as a renter, even if it’s a short-term rental or midterm or long-term, there’s generally an appreciation for character of older homes if they are restored properly and truly and fully. And so when I went down this path and I was evaluating whether I do purchase some of these really old homes that are going to have renovations, there are going to be surprises that are going to come up and oh, by the way, I’m going to be investing a lot of money, tens of thousands of dollars in updating things like mechanicals that renters don’t necessarily care about. If you’re at a property for a few months, you don’t really care if it’s brand new electrical or old knob and tube unless there’s an issue. But I knew that for these properties to be truly well preserved in terms of their character but also restored so that they’re breathe a new sense of life them, I would have to update things like the mechanicals.

Luke:
And that’s not very appetizing for many investors who might not be looking to take on renovations that cost that much or take that much time. So to answer part of your question, I do believe it gives me a leg up in that I’m competing with less people. There are just less people who want to go into something as messy as that. And then on the back end, I think it gives me a leg up because when these properties are finished and you can appreciate these original hardwood floors and you can appreciate the higher ceilings and the custom crown molding, then it’s an added level of quality that I think stands out against the other properties on the market for rent in the area.

Tony:
Alright, Ricky, we have our final ad break, but while we’re away, we’d love to hear from you. Alright. Now, do you invest in real estate remotely just like Luke does? You can answer in the Spotify app or the YouTube app during the break. We’d love to hear from you. Alright guys, let’s jump back in. I want to circle back, you briefly mentioned this about getting creative with the ways that you funded some of these deals as well. And you mentioned getting a heloc, you also mentioned seller financing, and I think both of those are great tools today that Ricky should consider leveraging the HELOC because a lot of folks who bought pre pandemic, they’ve probably seen properties appreciate a lot over the last four or five, six years. And then the seller financing piece works well because if there are folks who, especially in the elevated interest rate environment that we’re in right now, if you have a homeowner who has a property that’s either fully paid off or mostly paid off and can give you the loan instead, well maybe now you can negotiate a slightly lower interest rate. So I want to focus in on the seller financing piece. I think the biggest questions that a rookie has is how do you actually go about negotiating that with the landlord? Are you just coming out and saying like, Hey, will you sell our finances for him? Are they bringing it up themselves? But how do you open up the door to have that conversation?

Luke:
Yeah, so I always ask whoever is representing me in the transaction, if they can run this by the representation of the seller, whoever that agent is, can you see and check with them? Is this worth even pursuing with seller financing? Are they open to it? Do they have motivations that wouldn’t work for seller financing in this case? Just let me know. And if there is flexibility to at least being interested in offer being seller financed, then I will make an offer that is an owner or seller finance deal. I will say though, despite the fact that I do have now two different deals that I’ve closed with seller financing, I have probably lost at least a dozen. So there have been plenty of offers that I have made with all kinds of different terms I’ve proposed not only a traditional structure also wraps, I’ve gotten very familiar with wraparound mortgages. It’s a very niche style of seller financing. I have not closed any of those, but I began to know my way around after frankly many failures before finally two of them ended up closing recently.

Tony:
And I think that’s the important thing to call out here too, Luke, is that just like how you analyzed hundreds of deals before you found that first one, it’s very much the same thing when you start trying to negotiate some of these more creative finance strategies as well because yeah, a lot of people, they’re going to tell you like, Hey, I have no interest in that. Right? But all you need is that one person with the right situation where it is appealing to them. We closed on our first seller finance deal earlier this year and it’s actually a commercial property, and we were able to negotiate, it was 30 year amortization on the actual note, but it was a 10 year term. So we’ve got a full decade before that balloon payment is due. The first three years were interest only, so we had a lower payment during those first three years and the interest rate was 7%, which we felt was pretty good given where rates were when we closed in that deal, especially for commercial property.

Tony:
And it was a win-win for all parties involved. They got consistent cashflow for the next decade without doing any work whatsoever on this property. And we got a very low cost of acquisition to come in and take this deal down. So I think asking that question is super important and much like you, we gave them two options. We said, Hey, if we have to go out and get some kind of third party financing, here’s the offer, but if you guys do it in-house, here’s the offer. And that in-house offer, the seller financing offer is a little bit more enticing.

Luke:
Absolutely. And along those lines, most recently when I’ve had some of those conversations to test the waters about seller financing with the sellers, again, I try to meet everybody who I end up offering for their properties. I’ve asked to see if they’re open to it. They’ve indicated that that has been the case. But that said, similar to you, a commercial property came through recently and I proposed seller financing. I thought it would be something very mutually beneficial in this case they declined and that’s completely fine in that case.

Tony:
And you said you got a 5% interest rate?

Luke:
Yes. So this particular transaction where there was a 5% interest rate is a pretty unique situation. I’d be happy to tell you about some of the context there and how that came together.

Tony:
I just think it’s really interesting as of this recording ratio’s starting to drop, but when you close in that deal, I mean, I don’t know what were rates at maybe 7%, somewhere in that ballpark.

Luke:
Absolutely. Right around seven and a

Tony:
Half. Yeah. So you got two and a half point discount on your interest rate. Why do you think the seller was so open and willing to give you a significantly lower rate than what the market rate was going for?

Luke:
And this is just such a unique story with these sellers. It ended up being a young couple, late twenties, maybe right around 30 years old, and they had purchased what was for them, their dream home. They had purchased, again, one of these 120 year old Queen Anne style homes. And this particular home they purchased had been developed many, many years ago by a prominent architect and has a lot of unique custom features on the interior. Not only is there beautiful crown molding, but there are even, it’s not just stick on plaster or wood piece, but there’s hand carved cherubs that are in the ceilings of some of the rooms in this house. Baby angels carved into the ceilings. So for some it works, for some it doesn’t. But this is a very ornate home. And this couple ended up with a property immediately next door, completely unrelated.

Luke:
It’s a three unit building that was built at a different time, different architect. It’s one of these traditional triplexes that they ended up also purchasing. So they found themselves with these two properties. And unfortunately last winter, it was over the course of Christmas when it was particularly cold in central Illinois, they were both visiting family and away from their property. And when they returned a few days later, they found that they had a flood that had started due to a burst pipe on their top floor, their third floor, and it completely destroyed everything beneath it, their kitchen, several bedrooms, and it was a several hundred thousand dollars fix to renovate everything. It just so happened that this couple, when they purchased the property, they bought replacement coverage for this property over double of what the property was purchased for. So their insurance payout was several hundred thousand dollars.

Luke:
It was about a half million dollars that they had to go do something else with. So they found themselves with their primary residence and a three unit building next door that they didn’t really want anymore. They didn’t want to go through the time and the money it would take to renovate that home again. So they moved out and bought a different property and they’re renovating that to live there, and they have a lot of money left over more than they have that they know what to do with, which is very rare. So for them, it didn’t really matter the purchase price that they got, it didn’t matter to get a lot of cashflow immediately. They were very flexible. And as a result of that flexibility, I was able to propose some different options for seller financing and they chose what was most appealing to them.

Tony:
And I think it all comes back, Luke, to understanding the motivations of the person on the other side. And the better you can speak to those motivations when you offer seller finance and the better your chance of actually making it happen right. Now. Look, you’ve obviously scaled up in a tremendous pace over the last couple of years here, but you’ve also been doing this, I’m assuming, like you mentioned, working a full-time job. So how do you balance the growing real estate portfolio with the demands of a full-time W2 job as well?

Luke:
Yeah. Now, there was a time where it was very, very stressful, especially before I hired a property manager. The maximum amount of properties that I managed on my own remotely from Chicago was four active units. They were all long-term rentals. And I had a duplex as well that was being renovated at the time. And I knew that I was at my tipping point, and I needed to find a property manager to manage all of these units once these renovations are complete with this duplex. But I’ll say during the time that I did manage the properties on my own, it is not a romantic love story with real estate. There were plenty of times that not only I traveled to and from this market on the weekend, there were times that I would travel to and from this market at night. And some of that was exacerbated by, unfortunately, a bad tenant that I had in one of my properties and never had to, thankfully never had to go through the formal eviction process, but had several late payments.

Luke:
And when it comes to some of the rules in Illinois about delivering notices for evictions, you have to do that in person with a physical piece of paper. That was a rude awakening for me. And so there were four consecutive months where I would drive down on, let’s say a Tuesday evening at 5:00 PM or 6:00 PM two and a half hours down south, and then two and a half hours back just to put a piece of paper in the hands of those who were living in this property and then go to bed around midnight and go back to work the next day. So it was a lot until I hired my property manager.

Tony:
And Luke, I asked that question because I think people want the easy path, but the truth is sometimes it’s just not easy and it requires a certain level of hard work if you really want to be able to build up this real estate portfolio alongside the demands of your existing life, work, family, community, faith, whatever it may be for you. We all have different things going on, but you got to find a way to sacrifice a little bit to really make some progress here. Luke, you’ve shared so much here, man, and there’s a lot of, I think, good nuggets from this conversation that I hope our rookies can take away. But I guess my last question, what would your advice be to rookies who are thinking about jumping into real estate investing today?

Luke:
Yeah, absolutely. There’s certainly the initial advice that I would have where I can say, listen, I can absolutely empathize if you feel a level of fear or trepidation to get into it. If you feel that something that I strongly recommend that you do is that you talk to others who have taken these steps in the past, how did they feel? How they overcome that feeling? Something else that I would say that I’ve really adopted as part of my core philosophy or mindset with real estate recently is I really approach real estate as something that is emotional and not necessarily transactional. I try to make it relational because everything that you do in real estate is with people. Yes, you are transacting for these properties, buying, selling, leasing, negotiating, but without other people that you can rely on that you trust. It’s impossible to achieve what it probably is that you want to achieve. And so I would strongly recommend to approach real estate in a way that is based on relationships and build those relationships with folks who have taken these steps, have the aptitude experience and some know-how that they can share with you and be a support system for you as you take your steps forward.

Tony:
Luke, I can’t think of a better way to wrap today’s episode. Again, congratulations to you on all of your success scale into that many properties in a relatively short period of time. Guys, if you want to connect with Luke, we’ll put all of his contact information in these show notes for today’s episode. And guys, if you are enjoying the Rookie Podcast, one very simple ask, share it with a friend who you think might enjoy it as well. And if you haven’t yet subscribed on whatever podcast platform or YouTube channel is you’re listening to make sure to do that as well. But that is it for today, guys. Again, my name is Tony j Robinson, and we will see you on the next episode of Real Estate Rookie.