All Forum Posts by: Evan Kline

I did a fairly complicated sub- to deal with them. 3 liens on the same property, 1 of which was through HUD, and the owner declared bankruptcy after the transaction closed. Brian knows his stuff.

@Braeden Warg. Unfortunately the high interest rates makes finding a cash-flowing deal quite difficult. Most deals are found off-market or in significant value add situations that require upfront capital. 

That said if you're looking at buying or converting into a multiunit, you should be able to at least break even with 2+ units if you're looking at doing mid-term (saw your other post). What rental rates are you projecting? 

Can you shoot me a couple properties you're looking at? What areas you're looking at? 

@Braeden Warg Distance targets different types of people. Generally speaking, the farther out you go, the lower you charge, and the more you attract "bargain shoppers." The closer you are the more you attract folks that are less price conscience. 

We have a few mid-term units, the farthest away from the hospitals is about 5 min (West Salem). This unit has a converted basement, but we bought it that way, didn't build it ourselves. Whoever did the construction cut some corners and the sound passing between units can be quite loud (we know because we initially bought it as a house hack and lived there ourselves). But we stay rented and have never once gotten a sound complaint. 

That being said there is certain kinds of insulation you can use that is specifically designed to reduce sound. 

@Braeden Warg Distance targets different types of people. Generally speaking, the farther out you go, the lower you charge, and the more you attract "bargain shoppers." The closer you are the more you attract folks that are less price conscience. 

We have a few mid-term units, the farthest away from the hospitals is about 5 min (West Salem). This unit has a converted basement, but we bought it that way, didn't build it ourselves. Whoever did the construction cut some corners and the sound passing between units can be quite loud (we know because we initially bought it as a house hack and lived there ourselves). But we stay rented and have never once gotten a sound complaint. 

That being said there is certain kinds of insulation you can use that is specifically designed to reduce sound. 

@Scott Trench agreed on most fronts.

I disagree building a business is a job, or at least that it's inherently a job. Probably just semantics, but for me investment is not just money, but time and focus. Real estate investing may involve more cash, but less time and focus (though certainly some). Business building may involve less cash (or more!) than real estate, and almost certainly more time and focus. I don't think that makes one a job and one an investment. If I can put in an input, and get an increased return (or the risk of less return!) as an output, that's an investment to me. Doesn't have to be financial. 

Even a "job" I would consider an investment. An investment of your time. If you're only getting money as a return, I would consider it a bad investment of time. If you are getting other returns, like meaning, community, security, etc. Perhaps a worthy investment.

But in all cases I would argue time is the most precious commodity to invest, and it's invested most efficiently through focus, so look at those two the most carefully. 

I remember reading this article when longtime pillar of the BP community, Brandon Hall wrote it a few years ago. I'll let the article speak for itself, but if I were to distill it down to a sentence: When it comes to wealth building, focusing on real estate is majoring in the minors. 

I didn't take this advice seriously, my wife and I started investing in real estate a little after that article was released. We bought a duplex as a house hack, preceded by a handful of other SFH's in our neighborhood. We were early on the mid-term furnished rental wave, starting our first one in 2021, which helped boost our income.

During this same time period my wife and I both quit our jobs and started a dog-walking company. While investing in real estate we grew the dog walking company from just us to 25 employees walking about 100 dogs a day. Almost exactly a year ago today we sold that company for $400,000. 

This wasn't a huge exit, of course. But it was the first realization that maybe real estate was not the best use of our focus. This small business allowed us to quit our jobs for a more flexible lifestyle and supported us for about 5 years. But not only that, just like real estate, we were creating equity out of nothing. No start-up capital, no reliance on banks, no particular expertise required (initially at least, we had still had to learn a lot along the way!).

And this is when I came full circle back to that Brandon Hall article. We didn't build some sexy software application in silicon valley. We spent $30 on a few leashes and flyers. Even so we generated more cash-flow and built equity faster than any real estate investment we made, or even all of them together. And that's including some very lucky breaks where we bought properties with sub 3% lending before the pricing jumps in 2021 and 2022. It finally hit me how quickly you can build an income, equity, wealth, etc through building a business.

Now that we've sold the first business my wife coaches other dog-walking business across the country (and some in Canada) how we did what we did. Within less than a year she's built triple the cash flow of our dog walking business and real estate combined, and seven figures in equity. Just like in real estate, business building can and does compound on itself. 

But with that being said, our initial investment in that house hack did something for us: It took our housing expense, most people's biggest monthly expense, down (or at least close) to zero. And that gave us a feeling of security that allowed us to take "riskier" bets. Were the bets actually risky? I don't think so. Did we need that housing expense covered to build a business? No. But your own psychology and mindset does matter, and investing in real estate, while not making us wealthy, did give us this back-up plan where we knew we'd always have a roof over our heads and enough of a financial buffer we could figure something else out. And with the five investments we made in good parts of our town, that even if all our efforts in the business didn't pay off, in 20 years we'd still have a nest egg of equity we could fall back on. So it would be OK if we weren't paying into a 401k or the S&P. 

Additionally our real estate investments have given us new opportunities that is making this next stage of our wealth building journey easier. 
1. This year we've used 1 of our furnished rentals for my wife's clients who travel into town for weekend intensives. We can offer "free" housing at a 5 star airbnb, which feels like a huge perk to them. And instead of making $400 in a weekend, we make $4000.

2. We have multiple buildings we can use as office space as we look towards continuing to expand the coaching business and hiring employees.  

3. We have built up some equity in our real estate investments. We're selling off a couple, keeping the easiest to manage, and using that capital to throw gas on our other fire. 

After all that I'm sure it sounds like I'm anti real-estate. Real estate has definitely been a part of our journey of learning what it means to run a business, build a product, stand out in a crowded market place, (especially running airbnbs). My mindset has just shifted from using real estate as a wealth building tool to a wealth maintaining tool. Probably not the most common opinion around here, certainly not the sexiest. 

Just a final thought I'm not sure actually fits in here but wanted to say: I have my real estate license. I've been working exclusively with other investors and have my license hung at an awesome investor friendly brokerage (shout out to Wayfinder) with lots of great brokers who all have different expertise. When I consult others investors, usually first time investors, I start by asking them what they're goals are. Most of them are some version of "I want to replace my income and quit my job." I always encourage them to house hack, or at the very least move into the property they're buying if it's SFH to get a lower interest rate and lower down payment. 9 times out of 10 I get the response of "I can't do that for X Y Z reason" Which always can be boiled down to some version of "I like my current lifestyle, I don't want to change my status quo." Which can be boiled down even further to, "That sounds hard."

This is just one persons opinion coming from my personal experience: The challenge I'd like to leave for anyone who wants to break your golden handcuffs of a 9 to 5: If you want a different outcome, you have to put in different inputs. It sounds simple, but if you aren't willing to change your life, your life won't change. Building any kind of wealth takes a lot of discomfort. And the faster you want to try and make that happen, the more willing you should be to embrace that discomfort. If you're starting from close to zero, you need to be flexible, scrappy and willing to sacrifice your current lifestyle in the short term for the better lifestyle in the long term. That's investing. Whether it's business or real estate. 

@Richard Mercado

What's the zipcode? Just curious what part of town the properties in

@Matthew Bauer@Alan Tripp
I'll throw in a second for One Source. We manage our own properties, but I refer everyone to One Source. I've interacted with Joe, the owner, a few times both personally and professionally and he's a great guy. 

My wife and actually rented out our personal home and travelled for 5 months last year, staying a month at a time in places (ie in midterm units)
The two things that always stood out for us were:

1. Quality/availability of space for workstations

2. Walkability

At least based on my own personal experience, those two things can go a long way.

@Bonnie Low - Here's a link to the 1/1. 

The unique aspects of it that I think help it do so well:

1. Very large work space. The desk is a custom 8ft x 3ft walnut slab we get lots of positive comments about. 

2. For a 1/1 the kitchen is very generous and laid out well. And we stock it well. (We actually don't have great pictures of this in the listing, but we get a lot of positive comments about it)

3. Location. It's close to both the hospitals, downtown, and is within walking distance of both a park (right across the street) and a dog park (3 blocks away). 

4. My wife does an awesome job communicating with tenants. There's rarely a message that sits for longer than 5 minutes.