BiggerPockets Podcast 140 with Bill Syrios Transcript

Link to show: BP Podcast 140: The Riches Are in the Niches (Like Student Housing) with Bill Syrios

Josh: This is the BiggerPockets podcast, show 140.

Brandon: You got to treat this even if you only own one property from day one you treat it as a business.

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Josh: What's going on everybody? This is Josh Dorkin, host of the BiggerPockets podcast. Here with my cohost Mr. Brandon Turner. What up buddy?

Brandon: Not much. How are you doing?

Josh: I am good. School is back in session.

Brandon: In other words your kids are out of your hair.

Josh: You know what that makes me sad. That part makes me sad. It’s nice to get back to a routine.

Brandon: Yes.

Josh: There’s something—there’s something nice about just kind of getting back to it and really being able to focus. Of course my routine was devastated this week because of jury duty.

Brandon: Oh yes, how did that go? Did you send a guy to jail?

Josh: I did not. I got to wait in the big room and wait for my name to be called and it never was, which was kind of nice so I could get back to work, but that was the third time—third time I’ve been called in like five years—four or five years, which is.

Brandon: Wow.

Josh: A little troubling to me. There’s certainly enough people in our county to make it so I don’t have to go that often, yet they keep calling me.

Brandon: You know I have—I’m 30 years old, I have never been called for jury duty. Isn’t that weird? I don’t know, I feel weird about it.

Josh: I—I you know.

Brandon: I live in Grace Harbor like.

Josh: I hope you open the mail next week and get some. Yes, you would think grace harbor.

Brandon: Yes, you would think.

Josh: There’s probably.

Brandon: It’s like felony flats we call it because there’s a lot of.

Josh: Yes, aren’t like 40% of your people in jail?

Brandon: Yes, I think so. It’s amazing.

Josh: That’s a lot of.

Brandon: Yes.

Josh: Court cases, yes.

Brandon: Yes, I don’t know. My wife’s been called like three times. I’ve never been called.

Josh: Fascinating.

Brandon: Maybe they don’t have my address right and maybe I don’t know.

Josh: Oh, whoops.

Brandon: I have no idea.

Josh: That might be an accident too right?

Brandon: I—I actually want to do it. I think it would be fun because I’ve never done it.

Josh: Yes.

Brandon: I’m a John Grisham guy. I love reading court—and I’m sure its like that right?

Josh: Oh yes, I’m sure. I’m sure. Alright man well, yes so today we’ve got a pretty cool show.

Brandon: Yes, I loved today’s show.

Josh: Yes, it was really really great. Let’s kind of get to it, but before we do, why don’t we start with today’s Quick Tip.

Brandon: Quick Tip.

Josh: Alright guys, Quick Tip. I know we say this probably on every other show or something. It’s not a—I haven’t really used it as a Quick Tip, but today’s Quick Tip is get out there, find people—reach out to somebody, basically take five minutes today, five minutes tomorrow, five minutes the next day and reach to out to somebody that you have not yet met. Reach out to somebody in the business, in your area, somebody local and strike up a new relationship.

Just say hi to somebody. Jump on the BiggerPockets site. Go to BiggerPockets.com/Meet and look for local folks and reach out. The more you do this, the more that you make this part of your business on a regular basis, the bigger your network’s going to be, the more the opportunities are going to fall into your lap so get out there and make that happen.

Brandon: Wow, that was very motivational.

Josh: Thanks man.

Brandon: Yes.

Josh: That’s what I’m here for.

Brandon: Yes, I was actually thinking after the interview we did with this guy today. We just got done recording it. I’m like I can drive down to see him. He’s only like three hours from my house. I was like I want to drive down there and go talk to him because I know that’s the guy that’s going to help me get my business to the next level.

Josh: There you go.

Brandon: Because I want to be where he’s at so yes Bill, I’m coming for you some time soon.

Josh: Yes. Yes. Yes.

Brandon: Alright, cool.

Josh: Cool.

Brandon: Before we introduce Bill, why don’t we today’s sponsor.

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Alright.

Josh: Great. Big thanks to our sponsors. Thank you. Thank you. Alright, today guys we have Bill Syrios. Bill is the father of previous guests Andrew and Phillip. Bill is focused on a really cool niche which is student housing, but today’s show, we certainly get into detail in student housing. We really really dig in on it and he’s got so much to share. He’s been doing this for a long time.

Brandon: Yes.

Josh: We talk about a whole lot of other things that would really be relevant to pretty much anybody in real estate so it’s a great show for everybody to tune in to. Listen up. Listen carefully. The strategy that he’s got the niche that he focuses on is great and the way he looks at the business is unbelievable so tune in. This guy’s a pro. He’s been doing it a long time since 1980 and you know, learn a whole lot so let’s bring him on board. Bill, welcome to the show man. It’s great to have you here.

Bill: Thank you. Appreciate being here Josh and Brandon.

Brandon: Thank you. Thank you. This will be fun. This is our first ever right? This is our first ever father/son, you know or having both the father and the sons on a BiggerPockets podcast.

Josh: It is. It’s a dynasty.

Bill: Is that right? Well, I guess the sons were the first time you had brothers on and now you have the—most of the family. I’ve got a couple of more sons, one in Portland and one here in town, but.

Brandon: Well, let’s get them on.

Josh: Yes and we are talking about Andrew and Phillip?

Bill: Andrew and Phillip in Kansas City. Luke in Portland. Mark here in town with us so I got four sons and they’re all more gifted than their old man.

Josh: Nice.

Bill: Which sadly isn’t saying that much, but you do what you can do.

Josh: Now are there like 17 daughters to go along.

Bill: We wish.

Josh: Okay.

Bill: Yes, my parents had ten grandsons and that’s kind of what their dealing with so.

Brandon: Wow.

Bill: We’re looking for a princess among the pack here.

Josh: Wow.

Bill: In the granddaughter category.

Josh: We talked to Andrew and Phillip. Andrew—a little—no, I’m just kidding. I’m just kidding.

Bill: Do what you can for us alright.

Josh: Alright well so that was you know—that was a great show. We really really enjoyed having them and I know they had mentioned you bunch and we’ve—you know, we decided it would be great to bring you on so let’s just dig into this thing. You know, you’ve been in the business for a long time, correct?

Bill: I have been, yes I had an interesting semi false start in Portland starting in 1980.

Brandon: Ooh that’s.

Bill: I relocated down in Eugene. Yes, that was at the crest of the market. That’s like starting in 2007 actually.

Brandon: Okay.

Bill: It’s kind of comparable.

Brandon: Nice.

Bill: I rode the crest going down.

Brandon: Oh.

Josh: I want to ask you really really quick before you go on just because I think it’s important, you know, some stuff here is fairly timely. What were interest rates back in 1980? Give or take?

Bill: Well, yes they were going between 12%-13%. Maybe even 15% at the very height of the market. It was a dark era in real estate and darker yet was Oregon because Oregon was based on the timber economy, much more so than it is now and so when those kind of interest rates hit the country it went into recession. Oregon went into a virtual depression and prices dropped like 35% so people were just holding on for the ride down kind of like what happened, you know, not too many years ago. We had seen that movie before.

Josh: Yes.

Bill: It wasn’t a pretty picture I can tell you that.

Josh: Right.

Bill: That’s when I started my real estate career. I actually bought four properties in Portland and I was fortunate to get out of town without having too many losses. Kind of inter—experience that I started back up again in Eugene after—I actually came down—I was a campus pastor for many years. I relocated to Eugene because of the University of Oregon, focusing on working there and then at one point I came down in ’86 and ’89. I realized I’m not going to do this the rest of my life. What do I really want to do for the rest of my life and I thought back I really like that real estate thing. Didn’t work out so well for me the first time around, but maybe I can try it again so.

Brandon: I want to ask you a question on that because I had an email from a guy a couple weeks ago and I get them maybe once or twice a month, maybe. I don’t know. People saying I tried to invest in real estate once before. It didn’t work out and now I’m scared to get back in again and so you know as somebody who went through that, you went through it. It didn’t work out so good. I mean how did you get the guts to go back in and what should other people do?

Bill: You know I realize the advantages of real estate. The IDEAL that I think my sons talked about Income, Depreciation, Equity, Build Up, Appreciation Potential, Leverage. I knew all of that so I knew it was a viable business. The question was how could I make it viable and it was a book that actually turned me around. The book on landlording, property management and I realized that reading that book I had treated real estate like a hobby instead of a business.

I was doing really informal—I had an informal relationship with my tenants. I was doing kind of sometimes I didn’t even do rental agreements. My construction skills were less than lousy and I needed to hire people out to do certain things so I made so many mistakes in starting out in Portland and reading that book kind of said you got to treat this even if you only own one property, from day one, you treat it as a business.

Brandon: Yes.

Bill: That meant getting business cards. It meant getting a business name. It meant meeting tenants not in my home, but my office. Now my office in those days was Wendy’s.

Brandon: Oh nice.

Bill: They didn’t realize I was out, you know, from my regular brick and mortar office just happened to be out that day and I could meet them at a restaurant, but that was my office. That’s where I’d meet tenants so it wasn’t so informal as to you know, hey, you know, meet them at my house and bring them there. That wasn’t a good thing. It wasn’t business minded. I was entrepreneurial in nature, but in college, I never took a single business class and that’s when I realized I needed to treat real estate from the first property on as a full blown business.

Brandon: Yes. I mean that is so true and that’s something I didn’t do at the very beginning either. You know, the idea of a business versus a hobby. I just got into it because I said to buy real estate right? Like that’s just the thing you do and I didn’t realize there was so much more.

In fact, you know, I don’t know if we’ve talked about it yet on the show, but we’ve got a new—a book on landlording coming out this fall hopefully here at BiggerPockets and my wife and I co-wrote it. There was a—the second chapter of that book, the entire second chapter, which was like 10,000 words is called The Business of Landlording. It’s entirely on the difference between that because I wanted to emphasize that so much because I mean I think if there’s one mistake people make early on in their landlording it’s that problem of not—yes, it’s that not treating it like a business that it is. They just treat it like a hobby.

Josh: Well, it’s unprofessional right?

Brandon: Yes.

Josh: It’s not—that’s not to say somebody is a bad person, but they don’t understand that they have to be professional in order to—you know they have to have that professional mindset in order to.

Brandon: Yes.

Josh: Run it professionally.

Bill: I think you know you’re straying into bad territory business-wise if you’re treating your tenants as your friends. That doesn’t mean they’re you know, they’re customers, they’re clients. They’re your residents. They’re your income base, but they’re not your buddies.

Josh: No.

Bill: You shouldn’t treat them as such.

Brandon: Yes.

Bill: You shouldn’t think of them in that way. Of course be friendly, but they’re not friends.

Josh: Yes.

Bill: They’re just like in any business—other business relationship you would have.

Josh: Sure, sure.

Brandon: Yes.

Josh: Hey Bill so you—you know, you talked about the four properties in Portland and you mentioned that you failed so can—would you mind digging in a little bit on what exactly happened. How did you fail? Why did you fail?

Bill: Well okay so I—that’s a really good question. I was fortunate that one of those properties turned out to be pretty good, but here is what you think you failed. You didn’t really fail, but then you really failed. Let me give you an example so I bought a property near Mount Taber, beautiful area in Portland and it was—I bought it at for $60,000.

I put some money into it about $70,000 I had into it. I sold it for that amount and the couple that bought it from me was named Michael and Julie. This is interesting. We happened—I happened to meet them, my wife and I—just a couple of years ago. They sold it at the very bottom of the market in Oregon and they sold in ’84 I think it was for $66,000. They lost $4,000. Then they turned around and told me would you like to know the rest of the story and I knew what was coming. I said, “I don’t think so.” “Ah we’ll tell it to you anyway.” The property recently sold for $950,000.

Brandon: Wow.

Bill: $880,000 more than I sold it for, okay.

Brandon: Wow.

Bill: It’s like yes, you can fail, but sometimes if you just hold on, if you just work it out a failure can turn into something profitable. In my case, sadly somebody else made the profit from that particular house so I think I just—I pulled the trigger too quickly. I got scared. I sold property that I didn’t know what I was doing with property management.

I didn’t know what I was doing with construction. I didn’t really have a strategy. Was I buy and hold? Was I flipping? Was doing so I think I was just confused as to what my niche was and since then I’ve realized that truly, you have to become an expert in a niche market.

There is niches all across the landscape—even when it comes to real estate. What is the niche market that I’m going to become initially an expert in? I can expand from there, but what’s the market? I wasn’t a niche thinker. I was just kind of a broad thinker. Yes, I’ll just do everything and everyway and that’s why it didn’t work out very well.

Brandon: Yes, yes. You know Bill, you talk about the niches and I think that is so important because people get overwhelmed with this idea of real estate right? There’s so many things they can do and there’s hundreds of books and thousand of you know hours of you know podcasts and

Bill: Yes.

Brandon: Videos on Youtube and everything and so what I like to explain to people is exactly what you said. Just pick a niche to get into and focus on that and then combine that with a strategy, you know the idea, you know, you’re going to get into one niche of a property like maybe I want single family houses or I want just small multifamilies for now or I want student housing. Then what are you going to do with that?

What’s the strategy? Are you going to flip it? Are you going to rent it? Are you going to be a landlord? I mean it really simplifies everything down. It’s one thing we really press upon in the ultimate beginners guide to real estate investing, which.

Josh: Yes.

Brandon: Yes, if people haven’t read that, BiggerPockets.com/Ubg. They can check that out for free anytime. It’s an online book so yes, check it out so anyway niches, what did you get into? What was your niche that you got into?

Bill: Well maybe one of the first things that ticked me off or teed me off to a niche idea was when I decided I was going to buy a certain vehicle. I had this—well I call it a Battle Star Galactica that I parents gave me—a Ford Granada, 1976.

Brandon: Nice.

Josh: Can share to the 12-year-old who’s my cohost here what Battle Star Galactica was?

Brandon: I know what Battle Star Galactica—well look at—there’s a new version of Battle Star Galactica.

Bill: Yes, just Google it.

Brandon: I’m assuming you’re talking about the old version.

Bill: This car looked like something out of that sci-fi show, alright anyway. We wanted to—I wanted to get rid of it and get something that was usable so I said what do I want? I decided what I wanted was a Toyota pick up truck and then what year did I want? I didn’t want a new one—didn’t want to pay that kind of money.

I wanted something between $79 and $81 because that was a certain kind of model so I got to know $79 to $81 Toyota pick up trucks probably better than anybody else in the country. That was my niche market. I wanted to know how much they were worth so when I saw one pop up somewhere I would know exactly how much its value was. This is pre-internet days.

You’re not searching and comparing a bunch of stuff. You have a limited market right? I put an ad in the paper said, “Wanted a 1979 to 1981 Toyota pick up truck. I’ll trade you a car I have.” I found a guy in Corvallis who needed to cut down on his debt to buy a house and he had a 1981 Toyota pick up truck. I knew instantly how much it was worth and I also knew what my car was worth. I went down and traded in my ’76 Granada for that Toyota pick up truck and I was a master of that niche market, truly the master.

Josh: Nice.

Bill: Now if you could just take that kind of mindset to real estate, you know, a specific niche. We’re going to talk about student housing, but can you get to know what houses are valued in the particular area so that when you show up, you know exactly what your upside is. You know what the problems are to work with. You know what obstacles you have and you know what value you can come out with. That takes a real focus on a niche market.

Brandon: I love that.

Josh: That’s great.

Brandon: Yes.

Josh: That was amazing. I think that is absolutely pure gold for anybody who’s listening just you know think about it for a second. Let it kind of settle in because I mean that’s exactly what you want to do so you went, took that, and you said went into student housing. Why student housing?

Bill: Well as I mentioned I had relocated form Portland to Eugene to work as a campus pastor so I was very familiar with students. I like students, you know, not everybody does. I really enjoyed hanging around with students. I like—I felt I was a student all the way up into my 40s, you know, I still feel kind of like I’m a student I guess, don’t look that way so much anymore.

I love the lifestyle. I love to stay up late. I love everything about students and so I was located close to campus. I just fell in the student market. Again, you’d think all this strategy was coming to fore, no I just said, “I think I’ll buy something around the campus.” It was as I got into it I realized this was a very profitable niche potentially and that’s kind of where things started out for me.

Josh: Cool.

Brandon: People always say student housing is a terrible idea. I hear it all of the time right? It’s a terrible idea because it’s you know, the students are going to trash the house and.

Josh: Yes.

Brandon: They’re going to party and they’re going to drink and they’re going to—it’s just going to be a disaster. Don’t get into student housing. I’ve heard it—numerous people tell me that over like my life, what do you say to that?

Bill: Well, here’s what student housing gives you. It gives you very high rents, no vacancy, and no loss of rents. Okay, I can deal with it a little beer pong. You know, no problem.

I can deal with some parties. I can deal with a heavy turnover, which that’s the probably one of the downsides of student rental market is you have so many people relocating year after year so you have up to 75% maybe 80% turnover. We can talk about that a little bit more about specific orientation, the property management towards student rentals, but if you can overcome the obstacles, every business, every niche has an obstacle of course and maybe the student obstacle are some that people would shy away from. I would say the kinds of rents and the lack of vacancy issues makes student housing very attractive for real estate investor.

Brandon: Nice.

Josh: Sounds good to me.

Brandon: To add on, you know, I was kind of being you know like facetious earlier or whatever you want to call that like the idea that people always going to complain about what people are into it right? When I said I wanted to be a landlord everyone said I was crazy. When I said I wanted to flip houses they said I was stupid.

Bill: Sure.

Brandon: You know like no matter what you get into like you just said, “There are challenges in everything that you do and you know you can listen to people and be like oh yes, that’s right. I’m going to go back to watching my soap operas or I can you know, overcome those challenges.”

Bill: Well and I was talking a guy just not long ago and he was lamenting about how hard it was to get a profit in a certain area and I said, “You know, business is kind of like going to war.” You know, you’re not really fighting an enemy, but you’re trying to extract profit. You’re trying to keep down expenses and you’re in a battle every single day and you should look at it as you know you’re putting your suit and your armor on and you’re going out there and you’re doing what you can to conquer the expenses and to increase the income.

Brandon: Yes.

Bill: You know, kind of thing. You got look at it as a contact sport I would say.

Josh: Yes.

Brandon: That’s cool.

Josh: We’ve got low vacancy, we’ve got high rents. You know, we’re probably so you said somewhere around 80% so every year we’re putting in a new student or set of students into these units. Let’s talk about the turnover because again I think that’s the one thing that people flip out about. What, you know, yes, you got beer pong, you got kids drinking and partying and not taking care of stuff. I mean you know, if you compare the damage that kids are doing to a unit versus, you know a rental to non-students.

Bill: Yes.

Josh: I mean we’re probably talking a considerably higher cost, right?

Bill: Well, yes why don’t we start with property management? We can jump back into some of the advantages, but maybe property management is a good place to start because that’s where.

Brandon: Sure.

Bill: You end up so the first thing is turnover and that is something you just got to gear up. You got to rollercoaster your schedule just like a student schedule and so there’s going to be really high activity when you’re leasing up and there’s going to be really, well a lull during say the winter month when things are just moving around. You know, going a normal schedule kind of thing so you have this rollercoaster schedule and if you have a number of student rentals, you almost wonder what you’re staff’s going to do during the lull and they’re pulling out their hair during the busy periods and you just have to deal with that. It’s kind of a waning and a waxing schedule.

The turnover issues, you know, I mean for one thing you want to get parent cosigners which is what we get in everyone of our student rentals so this is another great advantage. We don’t lose I can’t remember when the last time we lost a dollar of rent because you have five students living in a house. You have five cosigners. You have security deposits. You have five last month’s rent. Tell what’s not good about that situation?

Brandon: Yes.

Bill: No parent wants their son or daughter to destroy their own credit so they’re going to make good on anything that happens and that’s a pretty good hammer to use as a property manager when necessary and we you know some students are great. Some students are a disaster, but you know overall we protect ourselves on the downside by parental cosigner agreements. There’s some other issues that probably ought to be addressed. One is group leases so you’re not leasing individual bedrooms in a house. That might be different sometimes in apartments. You’re leasing to the whole group so everybody is jointly and severally responsible for that and so one student—one person gets out of line, the others can pull them in because their dime is on the line.

Josh: Yes.

Bill: With everybody else’s so that—that’s really a good thing to remember. Let me cover a few more things in property management before.

Brandon: Sure.

Bill: We move on.

Josh: Please.

Bill: Another is websites are incredibly important in the student because I don’t know the student who’s not on the internet, just period and so their entire life goes to cloud and goes to the web. You want to be the presence if they’re looking up—they want to look at the properties, they want to do a virtual tour before they step inside so pictures are really important in any website that’s true. I’d say if you’re pictures aren’t at the level of Air BNB then you ought to redo your pictures. Check out AirBNB.com. Those pictures.

Josh: Yes.

Bill: Are attractive and that’s what your property should look like on the web.

Josh: That’s awesome.

Bill: That’s where students are going to look first is at your photos.

Josh: That applies to anybody by the way. I mean that’s just not just students.

Brandon: Yes.

Josh: I mean you know, it—when you’re selling a property it—spend the money to take nice pictures.

Bill: Yes.

Josh: Period.

Brandon: Yes, I hired a photographer just to come and take pictures at my apartment complex of one—my best unit—the one with the best tenants with the best furniture.

Bill: Great idea.

Brandon: Yes, she went through there, took a bunch of pictures and we’ve been using them for three years now. The same pictures and that’s what we have on our website and I—such an easy—I mean it was like a 150 bucks or something like that and just yes. Great tip so I love that, Bill.

Josh: Yes.

Bill: Marketing is really important and understand the student schedule particularly as you get a few rentals under your belt because there’s a lot of—increasing competition out there. A lot of large apartment complexes had been built now next to universities, which is just increase the supply tremendously and sometimes over the demand so marketing on Craigslist, marketing through “For Rent” signs. We start—this might surprise, but we start in January for the next September so our school year starts the end of September. In January a student gets a letter saying do you want to re-rent this year or not?

Brandon: Wow.

Bill: You need to tell us by February 1st. It used to be April 1st then it was March 1st. Now it’s February 1st.

Josh: Wow.

Bill: In Eugene because of the supply of rentals so we’re knocking on your door real early to say would you like to re-lease with us? If not, we’re going February 1st to put this on our website and begin the marketing to another group of students who won’t move in until the next September likely.

Brandon: Wow, yes.

Josh: Sounds rough. I mean really finding tenants has got to be difficult when you’re getting.

Bill: Well.

Josh: When you’re getting such an organization.

Bill: Yes, I mean.

Josh: I’m just kidding. I’m just kidding. That’s awesome. That’s great.

Bill: You either—the thing about student rentals is you either do or you don’t particularly if a property can’t really be rented to a family. Now some can go either way, but some rentals are really only campus oriented so you either have a group of students in there or you have an empty unit.

Brandon: Yes.

Josh: Yes.

Bill: That year.

Brandon: What about summer time? I mean do they sign a 12-month lease then or do—is it vacant all summer?

Bill: That’s—that’s somewhat a campus to campus issue—it’s just so when started out, I started at the University of Oregon. Go Ducks, by the way.

Josh: He’s rocking the Ducks shirt. I see.

Bill: Not only that I’m rocking the Duck—my $200 Ebay Duck ring.

Brandon: Nice.

Josh: Nice.

Bill: Now, I actually got—check this one out.

Josh: Woo.

Brandon: Woo.

Bill: That’s that Rose Bowl ring.

Josh: Wow.

Bill: From our last, well let’s see, it was Florida State? Yes it even says the score here on the side.

Josh: How does one get a Rose Bowl ring? Oh because you’re the campus minister so you have.

Bill: No, no, no, no, one goes on.

Josh: Did you steal that?

Bill: Ebay and looks one of these Chinese companies and spends $15 for a Rose a Bowl ring so yes, I’m going to be rocking—I’m sorry for your people who aren’t watching Youtube, right now, but I’m really rocking this Rose Bowl ring here.

Brandon: That is some nice bling I like that.

Bill: Anyway so I started at University of Oregon. I also have a few rentals up in Oregon State. Now those two campuses are interestingly different because Corvallis, Oregon State is a very much smaller area or population-wise, about 50,000 where Oregon—University of Oregon has Eugene surrounding it, which has about 250,000. People in Eugene tend to stay during the summer much more so than Corvallis so I was a little reluctant actually at first to go to Corvallis because of the very factor you mentioned, Josh.

What are you going to do in the summer? You know you’re going to have a lot of vacancies in the summer and I think you just have to kind of deal with that. As it turns out Oregon State is booming and they’re growing 6% a year. Oregon’s basically flat and so actually there’s no issue. People can get year leases no problem, but that—you know that’s kind of a campus by campus thing and somebody who’s deciding that they want to you know, do some campus rental properties, they need to look at their specific campus and think of some criteria about why or why not this might make a good fit for starting campus rental.

Brandon: Yes.

Josh: Right on.

Brandon: Hey, what about lawn care? Like who takes care of that?

Bill: Oh.

Brandon: Do you take care of that or how does it work?

Bill: I’ve seen some landlords thinking, yes we’ll figure the students will do that or we’ll supply a lawn mower. Well, that just won’t cut it. Truly faulty.

Josh: Ditto. Ditto.

Brandon: Alright.

Bill: Yes, thank you very much. You know, that is one amenity quote on quote that you need to give a student if you’re going to enjoy what you’re property looks like. They’re just not coming to school to cut grass. They’re not going to do it so have some kind of lawn care service that does that for you.

Josh: Do they have lawn care services that cut around kegs and chairs and beer cans?

Bill: You’d be surprised and while they’re there, they’re going to pick up plastic cups and they’re going to pick other things for you as well. Yes.

Josh: Nice.

Bill: Then they’re going to possibly charge back the tenants for their extra time that it took them to clean up.

Josh: Ooh, possibly. It sounds like possibly a nice extra bit of money that you make doing such things.

Bill: Yes, that’s true. You really trying to just make—oh here’s another—just a side. Pets, you know Suzy grew up with Barnaby her wonderful dog and you know Phil grew up with Simon, his cat. What are you going to do about that? For many years we had a no pet policy, which we’ve totally switched directions on that and part of it is is because there’s just so much more supply in our area so we’re pet friendly. Now, on the other side of that, we’re charging a security deposit, pet deposit for that and also we’re charging pet rent, which is $25 to $45 a month.

Josh: Nice.

Bill: That’s going to at least, you know, it’s going even itself out in terms of pet damage or maybe you’d even make a little money, but what it does do—it increases your potential for your residents, your tenant base.

Josh: That’s good.

Bill: That’s why we’re very pet friendly at this point.

Josh: Right on. Right on. Let’s talk about roommates. I’m assuming, you know, you’ve got all the parents cosigning. You got all of that, but I’m guessing that you also end up dealing with some of this student drama where you know, so and so stopped paying and everybody wants to suck you into the whole mess. How do you typically deal with those situations?

Bill: Well again, if you think of it in a mindset of a business what are your policies about that and essentially your policies is we don’t get sucked into the drama. At least we try not to as much as possible. Once in a while we have to step in because it’s to our financial advantage to step in, but generally, it’s—you guys rented as a group, you guys work it out as a group. We also have a house manager in our houses, not in apartments, but say in a five-bedroom house and that person interacts with our office.

When somebody calls about a maintenance thing or goes online and let’s us know about a maintenance or some other issue. We want to deal with the house manager so we’re not dealing with five different individuals and trying to call somebody back and not sure who we’re supposed to deal with. Somebody usually rises to the surface and says, “I’ll take that responsibility on. I’ll be the house manager.”

Josh: Right on. Right on.

Brandon: That’s a good idea.

Josh: Cool. Yes, I love that. What about do you have a policy—you know, you’ve got a house and somebody wants to turn it into a fraternity house or sorority house I mean is that even feasible? Is that—how does that happen, you know. Talk to me.

Bill: Well people do rent fraternities and sororities out, but here’s how I see it. I’ve actually bought a fraternity house before and I wanted to get into this because student rental value is all about the bedroom and so this fraternity house somebody had turned into 11 apartments, but done a very inefficient job. There was probably 20 bedrooms and so what I did I tore the entire thing apart and I made 31 bedrooms out of what 20 before. Now that took a lot of money, but when you add up the cost of the funds versus the value of the increased rent.

It was dramatically different and that’s what I’ve tried to do time and time again. I’ve bedrooms out of in garages and cart ports. We’ve done—I took a duplex on time that had a one bedroom on both sides. I took the best living room on one side, the best kitchen on the other and it ended up being a five bedroom, two bath campus rental resident. You’d think normally you’d keep a duplex, a duplex, but not in this situation. Again, it’s a niche market and the more bedrooms, the better.

Josh: Yes.

Bill: Because every bedroom is worth $450-$550-$650. You don’t really think of campus houses as houses per say. You think of them as small apartment complexes and each bedroom is an apartment. You rent it as a group, but if you can add another apartment unit to your little apartment complex wouldn’t that be a financially advantageous thing to do.

Josh: Sounds good.

Bill: Sure it would.

Josh: Sounds great.

Bill: Yes.

Josh: What about permitting I mean is, you know, does that create challenges trying to get permits to be able to do that or do the—you know, does the city kind of bend a little bit because they know that this a student housing type situation.

Bill: Well boy, every community is different. Some of them have been kind of—some neighborhoods have been kind of burned because you know, students have moved in to their neighborhood and so they’re pretty touchy about it. I think permitting is just like any kind of permitting. Just kind of go through the steps of the city, but I would say there is one thing you should be aware of or a potential real estate student housing investors should be aware of and that is city ordinances related to unrelated adults living together.

In some communities, they are extremely restrictive and say you can’t have over three unrelated adults living together. That is a killer for campus properties because you can imagine you’re restricting whatever size property you have to three adults living there. That’s—I would stay away from that market.

Josh: That’s great.

Bill: Many restricted to five unrelated adults and so that’s kind of your top end. In our city, we even have something that is fortunately goes beyond that. We have a something that allows nine unrelated adults living together. It’s called congregate living.

Josh: Is that per apartment?

Bill: It’s per house.

Josh: Per house.

Bill: It’s in a house.

Josh: Okay.

Bill: Yes in a house. You’re going to have five. We have a number of nine-bedroom houses.

Josh: Wow.

Bill: Again they’re like mini-apartment buildings and they have—well let me give you an example. I had a property that was built in 1884. It’s the oldest building of its kind that still exists in Eugene that was a—Abram Cider and Fruit Dryer. Folks went there and they pressed apples and made cider in 1884.

Brandon: Wow.

Bill: As a matter of fact, the name is still on the side of the building that says Abram Cider and Fruit Dryer Factory.

Josh: That’s cool.

Bill: The building has only been painted one time in it’s entire 131-year life.

Brandon: Wow.

Bill: That’s a testimony to lead based paint by the way. Anyway I had made the bottom part of that into a basically class A office space at one point and three different software companies had rented it. In the downturn of the market in the late 2000s, there’s a lot of unrented office space in Eugene so I decided to turn it into campus rental since it was near the campus and I was able to, you know, put a bunch of money into it, but ended up with nine bedrooms and three baths, which generates a tremendous amount. I think they’re probably rented for about $450 a bedroom. Something like that you can just add it together. That’s a tremendous amount of rental income.

Josh: Wow. Wow and that—the fraternity house I’m just curious. I don’t know of you’re willing to share or you know, if you even recall, but you know, would you mind sharing how much you paid for it? What you spent on renovation and?

Bill: Yes, well that—gosh those are the good old days.

Josh: Yes.

Bill: We’re talking mid 90s there and I—it was a disaster. It was not just a fraternity that had 48-unit quad complex behind and I paid oh about $900,000 I think.

Josh: Wow.

Bill: I put—over time, I probably put at least that much into it.

Josh: Okay.

Bill: At least that much maybe more and I was able to get actually a city loan initially for it that helped me. As a matter of fact, I bought the property and this—this is kind of my nature, but I bought the property and I said, “Wow, that was a good purchase I think, but what am I going to do because this place is a disaster.” I was fortunate to you know just kind of move one step at a time, find the money to fix it up and go from there.

Josh: You rent—I mean those are—you’re renting to the kids in the frat house that—at somewhere in that $450 to $750 per money.

Bill: It is an apartment. It’s an apartment building now it’s a really a frat house.

Josh: Okay.

Bill: It was originally a frat house. Yes.

Josh: Okay. Alright cool.

Bill: Here’s another situation sometimes you can take a commercial building. I took a dental office and created four units out of that, two four bedrooms, one two bedroom, and one one bedroom. You think of a dental office is being having very small rooms, which it does so that was the downside. These teeny bedrooms with no closets, but what you can do in a situation like that is buy a bunk bed apparatus that has a bunk on the top and a desk on the bottom and all of the sudden you get a lot more floor space and a kind of a normal sized bedroom even though you started out with these teeny rooms.

Brandon: Yes.

Bill: That’s another.

Brandon: That’s a cool idea. Yes.

Josh: That’s a great tip.

Brandon: Yes.

Bill: Yes.

Brandon: That’s very neat. Well cool well before we—I mean obviously we’ll still talk a little bit about student rentals, but I want to know a little bit about your business as well on how you actually run the business now. First of all, how big is your operation. How many units do you have and kind of what are you doing overall?

Bill: Well, we’ve you know, going back to the niche concept, you know, really the financial underpinnings of our company started with student rental properties and that allowed us to expand into another niche and interestingly enough in 2005 and 2006 I ran a internship for 16 college students over two summers and these college were business majors from University of Oregon and Oregon State. My son Andrew is going to Oregon at the time and helped me pull that whole thing together. For so for three months over two different summers these students learned everything about our company property management, they negotiated with sellers. We bought properties together.

We fixed properties up. They just learned a ton because they wanted to learn how to become real estate investors. Of those 16, five of those became partners of mine in 2007.

Brandon: That’s cool.

Bill: If you remember 2007, kind of the height of the market.

Brandon: Yes.

Bill: It was just starting to tip over and go down and what we ended up doing is and I think you’ve talked to Andrew and Phillip about this, we’ve flipped nearly 200 houses in Portland, Salem, and Eugene.

Brandon: Oh yes.

Bill: With all these partners and we were doing short sales and foreclosures one after another after another so that was the next niche we got into. We became experts at short sales and foreclosures. We became really really good at it and, but it got very tiresome. As a matter of fact I just got tired of the whole thing that the flipping operation is very complex because you not only have to be good at buying. You have to be good at selling.

Brandon: Yes.

Bill: I wanted to go back to the buy and hold model, which the company originated with so that’s when we began to look around for some place else and we kind of fell into the Kansas City market. A friend of mine had wanted me to go out and buy an apartment complex there together. I went out looked at it and I said, “Yes, I’d like to that.” That ended up—I invited all of my young partners to consider going to the Midwest with me.

We looked at a number of different markets and all them said, “No, we like the northwest better. We think we’ll stay here.” The only one who relocated was my son, Andrew and so in January of 2011 he went to Kansas City and that’s kind of the—it was like Normandy Beach. You know, just starting from scratch and take you know, moving ahead so now we have it basically as many properties in Kansas City as we have in Eugene, which is quite a number.

Another niche market that we got into was I had a partner who came back from Ecuador. He lived there for three years and married an Ecuadorian woman and he said, “Bill, I’d like to get back into real estate.” We had had one project in Eugene we’d done way back in the early ‘90s and so we decided to focus on a Dallas market. We bought multifamily properties down there and he’s become an expert.

I don’t know if I’m an expert in this niche market, but he’s become quite the expert in multifamily in Dallas. I’ve started at my age, somewhat my experience. I’ve started riding the wave of younger investors. As a matter of fact, I was just counting it up the other day. I have one sole proprietorship that’s Eugene rentals I own, but I have seven active real estate partnerships with other people who are involved in distinct niches around the country. That’s really a lot of fun. I’m kind of.

Brandon: Yes.

Bill: An opportunity junkie really is what it boils down to.

Josh: That’s outstanding. That’s so cool.

Bill: Yes.

Josh: You know, we chat this about a lot had you not partnered with those folks, you know, you miss out on the opportunity and so a piece, you know, however small it is of a bigger opportunity that somebody else is doing is better than no piece of anything.

Bill: Yes.

Josh: It’s—I know Brandon loves loves loves talking about partnerships and using those to build your business and I love to see that that’s what you’re doing as well. It’s outstanding.

Bill: You know, that was the insight I came out was back in 2004 and this was I’d been in the business about 15 years at this point I went on vacation and I was leading a class. I was teaching class on Good to Great by Jim Collins and to prep for it. I read Built to Last and in Built to Last, he evaluates companies that are 50 years or older and just companies that have stood the test of time and he says to me what he said was, “You ought to think about moving out of the mindset of this little business you got.” I got campus rentals.

I’m doing alright into a different mindset and this is the mindset. What does it take to build an enduringly great company? What a great phrase and my business mindset around because I didn’t have an enduringly great company at that point, but what would it take to move where I was at that point to move in in that direction. You’re exactly right, Josh it would take partners who had a lot other gifts and energy and perspective and background than I had to make that kind of thing happen.

Josh: Yes.

Brandon: Yes.

Josh: Yes, that’s great. Well so how big is your operation today I mean how many people work for you and I don’t know again if you’re willing to share, but how many properties do you?

Bill: Well, we’ve got about oh I think about 250 houses and apartment units in Eugene. We have going on 230 houses in Kansas City and about 130 apartment units. By the way we’re just on the precipice of buying 97. That’s why I can add nearly a hundred more to what we have today.

Brandon: 97 units of units or houses?

Bill: 97 houses in purchase.

Brandon: Are you serious?

Bill: Well, it’s crazy, it’s crazy. We’ll have to come on sometime and maybe talk about that or maybe Andrew who’s your blogger, contributive blogger could describe that for you.

Josh: That would be outstanding.

Bill: There’s a lot of lessons. We’ve learned a lot of lessons just in that purchase.

Brandon: When do you close on that?

Bill: Within a month.

Brandon: Wow.

Bill: Yes by the end of the month. As a matter of fact I hope in the middle of the month, September so.

Josh: Good luck.

Brandon: Very cool.

Bill: Yes, thank you. We—and then in Kansas City—in Dallas we own I think 77 units in two different apartment complexes.

Josh: Wow.

Bill: We—little little operation here.

Josh: Yes, yes.

Bill: It’s pretty diverse we probably have oh let’s see we have about 15—we probably have 30 folks who work something like that.

Brandon: Wow.

Bill: In the whole thing.

Josh: No kidding.

Bill: I’ll tell you building a—if you want to build an enduringly great company. You’ve got to build a great team. I feel like that—through fits and starts and truly that’s what it is because nobody is an expert at building a team, but I feel like we’ve come to that point where we have got a great team in Eugene. I mean we’ve got people who do so well at property management and they know the market.

I’m not giving any direction. They kind of tell me what they’re doing at this point and it’s just great. Kansas City, they’re a little younger at building their team. They have about the same numbers we do, but through fits and starts they’ve put together what I think is really a quality team as well. My partner in Dallas has got a good team too so it’s you know, becoming a team leader is kind of something new for people as they begin to become a—you know, as they pull on employees and contractors and others. Essentially you need to become a good manger.

Josh: Yes.

Bill: Figure out what that’s about.

Josh: Is that—I mean we’re—we’ve going through the same thing. You know, today our team at BiggerPockets is considerably bigger than it was two years ago—one year ago and I’m experiencing the same thing. That’s my job is to learn how to be a good team leader and guide these amazing people work for me and our passion and you know, make sure they maintain that passion and keep them excited and you know. Is that pretty much what you today at your job? Your role in the company is just kind of that team leader and visionary?

Bill: Yes, I mean, you know I think of—one of the big changes for me has gone from kind of a sole proprietor mindset to this partnership team mindset and that was a big transition. Fairly recently and we’re talking three years ago I went from making pretty much the decisions of the company and to having an executive team that includes Andrew, my son, Phillip, my son and then our operations out of Eugene is Amanda. I can’t make decisions anymore just on my own, which is freeing and frustrating at the same time, but they truly are partners. They have a say and folks who work with them have a say in their areas of responsibility as well. They truly have a say and give over ownership so to speak of whatever it is that you own is a privilege and a responsibility to somebody and you’re thankful to see that they often rise to the occasion.

Josh: Yes.

Brandon: Yes. Very very cool.

Bill: Yes.

Brandon: Very cool. Well before we get out of here we want to go over to the Fire Round section of the show which are—we have a lot more kind of student rental questions in there as well so or at least investing that will involve that so.

Bill: yes.

Brandon: Let’s do that now. Here’s the Fire Round.

Announcer: It’s time for the Fire Round.

Brandon: If you are a real estate hustler you probably end up billing people for stuff quite often like late rent, contracting work, etcetera. I know that I do, which is why I am huge fan of FreshBooks and I recommend them all of the time. FreshBooks is an incredibly easy to use invoice and software designed to help entrepreneurs get organized, save time invoicing, and get paid faster. You can also use it to keep track of your employees hours, track expenses and generate awesome reports so bill like a boss. Try FreshBooks free for 30 days. Just go to FreshBooks.com/BiggerPockets and enter BiggerPockets in the how did you hear about us section when signing up.

Alright, the Fire Round. These questions come direct out of the BiggerPockets forums so these are real questions that people are asking on BiggerPockets. Number one, are there any special financing rules for student housing?

Bill: You know, any kind of real estate investment in my mind that’s buy and hold really includes short term financing and long term finance. When I think of short term, you got options here. Fortunately for me, the way I started was mom and dad financing and that’s between zero and 6% interest. Okay for me often times it was zero percent and that’s the only way a poor campus pastor who had no credit to speak of.

No real income could started was my dad and mom—they loaned me money and they kind of believed in me and at mom and dad prices which was awesome. Not only that my dad signed mortgages for me because nobody would loan me any money and it wasn’t until a few years ago that he actually got off of all the mortgages he had signed for me. If you have a mom and dad or uncle or whatever that could do that for you, is open to that because they trust you and you’re making good decisions then that’s a good place to start. Then there’s ma and pa money.

These are people, associates, people that you meet, people that you network that you can show hey I’ve got something here that makes sense financially. The numbers add up and you show them the photos. You show them the numbers, maybe you have a brag book by this time. We have a website that’s kind of a brag for us.

People can go in and get information about us and I peg that at 9%. That’s most of the money we borrow is at 9% with no points. We’re not paying points on it, but that’s not hard money. When you get to hard money, you’re talking more like 11 plus percent and points so if you have to go there and the numbers allow you to go there then hard money is going to work for you.

Finally another short term way to approach it is to get an equity partner so you’re splitting ownership, but they’re bringing the money into it if you don’t. You have to transition to that though to long term financing if you’re doing buy and hold. That’s the challenge with buy and hold. How do you transition to long term financing?

You’ve done some kind of value add and value add is critical when you’re looking at a piece of property. How am I going to add value to this—often times, rehab is what helps people add value, but in the campus rental market adding bedrooms is a value add. Changing the nature of a building can be a value add so how do you do that? How do kick in to long term financing and again, I think that I can go through a number of different strategies if you want me to, but you’ve had a lot of that on BiggerPockets. You want to eventually lower your cost of funds even for ma and pa 9% money to lower interest money like in the 5% range.

Brandon: Would I be correct in saying that kind of your strategy has largely been buy the properties with short term money and then refinance that into longer time money after a value add.

Bill: Absolutely and our goal is to refinance all of the money. This is not always achievable, but in Kansas City we’re really buying quite a lot right now. You know, we want to buy something that when we’re all said and done with it and the property season, which local banks usually takes a year to season the property, you’ve rehabbed, rented and seasoned the property then we bundle them together so we’re usually refinancing like ten properties at a time and we’re trying to get all our money out of all our private lender money out because we’re usually buying 100% of the value of the property. Not the value of the property—100% of what it’s costing us. The value of the property hopefully is at least 25% more of that because we’re buying really good deals, you know, a lot of foreclosure properties and properties that are bank owned properties, REO properties, etcetera.

Brandon: Yes.

Bill: We’re trying to get a really good deal and really that’s where real estate starts. It starts with a great deal. If you have a great deal, you can find the money.

Brandon: Yes.

Bill: You can find the means. Find the great deal and the money will follow.

Brandon: Yes, I love that.

Josh: That is our new quote card for this podcast.

Brandon: Yes.

Josh: That’s awesome.

Brandon: That’s—I use the phrase a lot around here on BP called BRRR, which is like B-R-R-R come cold. Like BRRR is this idea of you buy it, you rehab it, you rent it out, and then you refinance it and you repeat. It’s the buyer rehab, rent, refinance, repeat, and I went to a BiggerPockets meet up up in like a group of BiggerPockets members got together at the Ram Brewery up in Lakewood, Washington. Anyway, then at the thing like five different people they all said, “Yes, I’m working on the BRRR Strategy right now. I’m working on this thing.” Because it’s just—if you do it right it can be an awesome way to get a lot of properties without putting a lot of money into it.

Bill: Yes, yes and I mean that’s the L of IDEAL right? I-D-E-A-L, leverage. You got to be careful with leverage because it can cut against you just like it can cut for you, but if you can—that’s why an ordinary person can become very well off in real estate because they’re leveraging other people’s money and they’re using a very little of their money and hopefully if they value add right, they rehab right, they actually pull out all of their funds.

Brandon: Yes very cool.

Josh: Yes.

Bill: That is the goal. That’s the goal.

Josh: Right on.

Brandon: The actually kind of answers one of the other questions of the Fire Round was just is no money down real estate actually a thing like a possibility or is it just a scam and you kind of answered that right?

Josh: Yes.

Brandon: You can technically do it.

Bill: Starts with a good deal.

Brandon: There you go.

Bill: Starts with a great deal, yes.

Josh: Yes. Alright well I’ve got my Fire Round questions since our Fire Round is running a little bit less firey. Usually it’s quick question, quick answer.

Bill: Oh okay sorry about that.

Josh: No, please I.

Brandon: No, I like it.

Josh: Love.

Brandon: I would rather have the in depth, yes.

Josh: Yes so our last question for the Fire Round is do you have any unique ways find properties?

Bill: You know, the very best and this goes back in history, the very best marketing thing I ever did was a three-line ad and it again, it was targeted to a niche geographical area. I put it in the classifieds, which I don’t even know if they exist anymore, but in the campus area of town and the ad said, “Save the commission,” in bold at the top. “I’m looking to see,” it said. “Wanted a home or investment property in the campus area, Bill,” and then my phone number, three line add. The first property I bought from that could help me afford to do that ad for the end of time kind of thing.

Josh: Nice.

Bill: I mean it—it’s simple. It’s maybe overlooked, you know, but it’s a niche spot just target this. I mean I’ve had high school students go into areas of town that were circled the campus that were not right against the campus and by the way, this is a strategy that I use quite a bit with campus rentals that I didn’t talk about was not buying. You’ve got ABCDEF A is like you know, in walking distance of campus.

B is like a half a mile walking, biking distance. C is maybe a mile to two miles say biking, driving distance. D is driving distance and F would be in another area of town, which I’ve even tried and once while got away with renting to students in a whole different area of town. Those make a difference in terms of how much you can charge for rent obviously and how good your occupancy is going to be, but what I’ve tended to do is not buy in A areas because they’re so expensive, but look for the C and B areas that are a little farther away from campus and to focus on those where you have home owners who aren’t thinking about campus rentals, but their house would make a perfect campus rental. It’s a little farther away, but if you made it attractive to students by thinking with them in mind as you rehabbed it or whatever if that would make a great student rental and so you’ve saved by not spending so much in the purchase price, but you still get the advantage of having higher rents than you would normally get.

Josh: Awesome.

Brandon: Nice.

Josh: That’s great, yes.

Brandon: I do have one more question I’m going to throw into the Fire Round here because it’s my question. How are you attracting tenants then to those properties and not just normal people? I mean do you write this is student housing or?

Bill: Oh no, no, no. You can’t write family friendly.

Brandon: Yes.

Bill: You can’t do anything like that those are all big no nos so when people see the.

Josh: Hey Bill, Bill, really quickly can you explain that for those people who are listening who don’t understand why not just.

Bill: I mean the discriminatory potential of putting any words like this: adult friendly or family friendly or student only, I mean that is just not going to fly and.

Josh: Fair housing laws.

Bill: Fair housing laws is going to have somebody knocking on your door about you need it here. Apply to this and it might not be a pleasant experience as a matter of fact so you need to be careful about that and how we discriminate is the price of the rent. We’ll rent to anybody who will pay this price, but only students are likely going to pay that kind of price for that single-family residence. You’re not going to get a family to do it so it’s self-selective.

Brandon: Okay.

Bill: You know it’s relatively close to campus. It’s got more bedrooms than most houses would have. It’s got small living areas because what you’ve done, you’ve taken the dining room and made a bedroom out of it right? You’ve taken a family room and split it into the half and made a bedroom and a bathroom. Two bedrooms and a bathroom out of it so you’ve done everything you can to maximize the bedrooms and maybe added a bathroom while you’re at it and that’s your thing. It’s all about the bedroom. Well most regular families—it’s all about the bathroom, the living room, and the kitchen.

Brandon: Yes.

Bill: For you, those are secondary issues.

Josh: Yes.

Bill: When a student looks at a house, they’re not looking at the manicured lawn.

Brandon: Yes.

Bill: They’re not looking at the two car garage. They’re not looking at the great school down the block. They’re looking at where am I going to live? What’s the home within the home for me and that’s my bedroom and maybe secondarily my bathroom. You know, where is that going to be from my house. That’s what they’re thinking and that’s as a student rental investor, that’s how you got to think too.

Brandon: Yes.

Josh: Right on. Right on.

Brandon: Yes, alright very very cool. This is—I mean this whole episode has been.

Josh: It’s a great show.

Brandon: Yes, I’ve learned a ton of stuff so this great. I really want to know. Obviously I say this every time, but I really want to like look more into because I’m like a mile away from my college. Like our college here, I’m like about a mile and we have a fair amount of students. Probably 10% or 20% of our people are students and they’re always our best tenants. Like I love renting to students.

Bill: Yes.

Brandon: I really want to make more of an emphasis on that now and try to and especially I’m kind of thinking these are too good of apartments.

Josh: You got to focus man. Every new episode we’ve learned something new.

Brandon: I know, I know. Well.

Josh: We talk to somebody new and.

Brandon: What I do is I.

Josh: Oh my god I want to do this. Oh my god I’m doing rental homes. Oh my doing self storage. Dude seriously.

Brandon: Well this is easy I just got to.

Bill: The richest—Brandon the richest.

Brandon: Are in the niches.

Bill: Are in the niches.

Josh: Find a niche. Find a niche.

Brandon: All I got to do is tell my wife though. Hey you should you know, let’s emphasize the student rental part and I don’t have to do anything more. That’s her business.

Josh: Along with the 18 other niches that.

Bill: Let me tell you about a couple friends of mine.

Brandon: I’ll take the other ones.

Bill: Who have done—a couple friends of mine who have done the same thing. A guy named Mark, we bought a couple of houses together and then we split off, but he is a contractor—a total craftsman. Incredible finish carpenter and what he did is he bought in the C minus areas around, in terms of proximity to campus, kind of outside, but he cherried out his houses. When he markets, he doesn’t put the address in, he just put the pictures in then they call and he says of meet me at such and such.

They drive a little farther than they’re used, but when they get there and open the front door they said, “Oh my gosh, I have got to live to here. I don’t care how far it is from campus.” He’s built up—I think he’s got seven houses right now that he’s done that. Another friend of mine, Chris who went to—he was an intern with us back in 2005. He saw what we were doing. He relocated back to his hometown in Poughkeepsie, New York where Maris College is.

Josh: Yes.

Bill: He said I’m going to do the same thing. He’s now got seven or eight campus houses. That’s all he does in life is just attends to his houses and he travels the world so it’s pretty cool what Chris has done and.

Josh: Yes.

Bill: You know, every situation is different, but again you’ve got to—you kind of got to get good at it. You got to have your niche maybe even within a niche so.

Brandon: Yes.

Josh: Right on.

Brandon: I love it.

Josh: Right on.

Brandon: I love it. Alright cool well let’s move over to the world famous.

Announcer: Famous Four.

Brandon: Alright these are the questions we ask every guest and I know we asked your kids it and so we’re going to ask you it now. What is your favorite real estate book?

Bill: Well, I was thinking about this guys and if he’d—give me a little room here for a departure because I’m going to say something that probably everybody else has said on BiggerPockets at one time or another. Let me talk just a little bit about how I think about reading.

Brandon: Sure.

Bill: Again, I’ll mention some books if you’re okay with this. I think about what’s classic. What stands the test of time? What’s an awesome book that I want to reread, maybe on a yearly basis so think of Seven Habits of Highly Effective People. I think I’m going to read a book by Stephen Covey every year, The Eighth Habit is a great book. First Things First is a great book so every year I’m going to read a book by Stephen Covey. I don’t care what it is. Then I think of well what are the classics in real estate. Every year I’m going to read The Millionaire Real Estate Investor by Gary Kellor and you head on Jay.

Brandon: Yes, Jay Papasan.

Josh: Papasan.

Bill: Yes, Papasan. I think that’s a modern classic as a real estate book. Every year, I’m going to read it so what Francis Bacon said that, “Some books should be tasted. Some devoured and some well only a few,” he said, “Should be chewed and digested thoroughly.”

I’m taking his advice that I can read—like I love who is Nassim’s Taleb’s book like The Black Swan, Tipping Point. What else has he written, Outliers. I love those books, but those books, you get the idea once and you kind of got it. It’s probably not a book I would come back to every year.

Great book, but not the classic kind of book I want to read year in and year out. The second criteria I often—that orients me towards books is are they researched or are they anecdotal? There’s a lot of anecdotal real—you know, “This what I did it turned out great. You know, you should do it too. You’re.” Even now you’ve heard some of my own experiences, which is somewhat hard to translate, but what are the books that are genuinely researched. Jim Collins puts 20,000 hours into Built to Last, Good to Great, Great By Choice. Each book has had a graduate team of people behind that book researching that so when he says this is how it works, like he talks about, oh gosh, there’s so many. I won’t go through the principles. You know this is fact. This is anecdotal.

Brandon: Yes.

Bill: This is my experience. This is fact so I look for it, for books that are research books and I would put Gary Keller’s book in that category too because it’s really a research book is what it is and finally what I would say is read book. The great books you want to read in a group setting to get feedback on our executive team that I mentioned Amanda, Andrew, and Phillip and I, we read books together. One we read relatively recently is probably the greatest title of any book ever written, What Got You Here Won’t Get You There by Marshall Goldsmith.

What a great book if you want to be hit in the face by the business version of the sermon on the mount because 20 personal character qualities that you’re not doing very good. Andrew calls it “Why You Screw Up so Badly.” I think something like that or “Why Are You Screwing Up so Badly,” but it’s a very—it’s a very challenging book to talk about in a group context because you know me. I know you and here’s some of the things I really want to work on. He’s written a recent book and I haven’t read this yet called Triggers: Creating Behavior That Last, becoming the person that you want to be and that—I can’t wait to read that book and read it in a group context to get some feedback.

Josh: Right on.

Brandon: Yes.

Josh: Right on.

Brandon: That’s awesome.

Josh: Well you answered my next question, which is favorite business book why don’t we jump to hobbies. What do you do for fun?

Bill: Well, being in Oregon, it’s hard not to be outdoors. Hiking is something my wife and I like to do. Any kind of outdoor activity is fun to do. I’d say—and maybe to my downfall I’m a little bit of a opportunity junkie as I mentioned before so I love business and to me business is kind of a hobby now. Where once it was a hobby and I was making a mess of it, now it’s become a hobby in a different sort of way that I just enjoy it so much. I want to be around these folks that are partners of mine now and younger—visit with them, hang out with them. You know learn together, grow together and that’s kind of one of my hobbies as well is just the opportunities that present themselves.

Josh: Right on.

Bill: Just to give one—I can’t stand this—is such a great example and Jim Collins Built to Last, I think it’s Built to Last, he gives the example of how Marriott Hotels started. Marriott in the ‘20s, it was John Willard Marriott started it. He had the first ANW franchise and instead of having this gigantic strategy about how he was going to build the Marriott Hotel chain, he had ANW Rootbeer stands.

Brandon: Interesting.

Bill: As it turned out, the one next to the airport was doing better than all the rest of the—reason he found out from the manager was because he was bringing him food to give to airline passengers because there was no catering at that time on airlines flying, you know, across the country or across the Europe or whatever. That’s where Marriott started was providing catering on airlines and then he realized that when the—when the travelers got to their destination there was no good hotels. He said, “Why don’t we start building hotels.” Here was a guy who went to where the opportunities afforded themselves. He just followed the opportunity and I really feel like that’s a great model. Follow the opportunity and then get really really good at that niche.

Josh: Yes.

Brandon: Yes.

Josh: That’s awesome.

Brandon: Love it cool. Alright my final question of the day, Bill what do you believe sets apart successful real estate investors from those who give up, they fail, or they never get started.

Bill: Well, I think you know, if anything you have to have a mindset and the mindset is somewhat that I am—and this maybe a little strong, but I am kind of going to war. This is not—this is really a challenging thing that is to extract value, to gain profit, to lower expenses. This is not something that there’s a book that can just tell you how to do this. This is something that takes education, training, and then it takes action and certainly it’s action that separates people from wannabes to really doing it.

It’s taking action and sometimes you’re stepping into the unknown. As a matter of fact, a lot of times, you’re stepping into the unknown. You want to do it carefully. You want to do it with you know, some people, you know, in a network helping you along. You want to have a backup and etcetera, but you want to take action. If you don’t, just say I’m going to make an offer on this. As a matter of fact, I’m going to make a lot of offers out here. If you don’t start doing that, you’re just not going to buy a property and then so what’s the action I’m going to take, execution. Where am I going to go today? What am I going to do to take the next step?

Josh: Right on. Right on.

Brandon: I love it.

Josh: Right on.

Brandon: Very cool.

Josh: That’s great. Alright Bill, where can people find out more about you?

Bill: Well, you can go to our website, SteweardshipProperties.com. We also have a partner and I have a website called StewardshipCapital. We buy notes and describes that business a little bit. Our company is called Stewardship Properties because it kind of reminds me that we’re all just passing through this life right and while we’re here, how do we think of ourselves not so much as owners, but as managers. What we’ve been entrusted so it’s a reminder from me every time I look at that name, but that’s who we are, StewardshipProperties.com.

Josh: Interesting.

Brandon: Cool.

Josh: Thank you so much for being on the show. It’s odd for me to be you know, on a podcast. I’ve got the college pastor I’ve got student pas—the kid pastor, junior pastor, my cohost over here.

Bill: You are surrounded Josh.

Josh: I got to watch my mouth.

Bill: Oh my gosh. My gosh.

Josh: Hey listen, it was a pleasure, thank you so much for joining us. We really appreciate it.

Bill: Absolutely. Thank you very much for having me.

Josh: Thanks Bill.

Bill: Yes.

Brandon: Yes, thank you.

Bill: Bye bye.

Josh: Alright guys that was Bill Syrios here on the BiggerPockets podcast show 140. That’s BiggerPockets.com/Show140 and you can actually check out the show notes at BiggerPockets.com/Show140. You know we didn’t do this at the front of the show so I wanted to just take a time—take an opportunity to remind you guys please, please leave us ratings and reviews on SoundCloud and Stitcher and.

Brandon: iTunes.

Josh: iTunes, Youtube even.

Brandon: Sure.

Josh: If you’re listening or checking this out on Youtube, but iTunes is exceptionally helpful and today we’ve got a really cool review from iLessThan3, “This podcast I love.” Oh, “I heart this podcast,” I get it and oh you know what it was “I went to guru seminar. Didn’t want to pay $30,000 bucks, found BP, never looked back from my real estate investing education. Listen to the show if you’re serious about your REI. Love it.”

Brandon: Cool.

Josh: Love it. Love it.

Brandon: I just got to make fun of you for a second. I less than three.

Josh: Yes, don’t don’t. You know what.

Brandon: You’re not hip on the teen language of the I less than three heart.

Josh: That’s probably a good thing, Brandon. I’ve got.

Brandon: You don’t talk to 18 year old girl or 16-year-old girl? Come on.

Josh: I’m sorry. I’m sorry.

Brandon: Okay well.

Josh: That’s your job. That’s why I pay you.

Brandon: Yes. Wait a second. Alright, alright anyway so yes obviously you know, go leave us rating/review and make sure you use the less than and the number so Josh gets confused. With that, Josh take us out.

Josh: Take us out. Alright guys, well thanks for listening. We really appreciate it. Please be sure to check us out at BiggerPockets.com if you don’t have an account, get on there, make one today. It’s free and there’s a whole lot of people on there. Almost 350,000, we are—we crossed 350,000.

Brandon: We did.

Josh: What am I thinking?

Brandon: Are you drunk?

Josh: We did 350,000—it could be—300—drunk on life.

Brandon: Wow.

Josh: 350,000 members on BiggerPockets. Jump in, join today. Get to know some of those folks and create your account, but with that, we’ll see you next week on show 141 of the BiggerPockets podcast. I’m Josh Dorkin, signing off.

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