Unlock the full potential of your military benefits as we journey into the art of real estate investing with Maryland’s Top Military Realtor and fellow PE Home Group team member, Chase Kincer. In a market where the decision to rent versus buy can seem daunting, especially for our service members, we've got the lowdown on leveraging the VA loan to its fullest. Discover how house hacking cannot only cover your mortgage but also multiply your investment portfolio.
Chase, with his unique backstory from working in the military to becoming a real estate agent, joins us to reveal the secrets behind successful direct-to-seller acquisitions and how wielding transactional power can turn your spending into a strategic advantage, whether you're a high-volume investor or a normal individual. It's about making intelligent choices, creating community, and adding value to every aspect of your real estate journey.
Unlock the full potential of your military benefits as we journey into the art of real estate investing with Maryland’s Top Military Realtor and fellow PE Home Group team member, Chase Kincer. In a market where the decision to rent versus buy can seem daunting, especially for our service members, we've got the lowdown on leveraging the VA loan to its fullest. Discover how house hacking cannot only cover your mortgage but also multiply your investment portfolio.
Chase, with his unique backstory from working in the military to becoming a real estate agent, joins us to reveal the secrets behind successful direct-to-seller acquisitions and how wielding transactional power can turn your spending into a strategic advantage, whether you're a high-volume investor or a normal individual. It's about making intelligent choices, creating community, and adding value to every aspect of your real estate journey.
The thing is, though, just doing anything and getting into the game at all, like owning something, is just better than renting. You know. So, even if it is going to be your only investment, that you can get one house and you could just pay it off. Or you can house hack if you're young and you can rent out a couple rooms or whatever. Having that is better than having nothing and renting.
Speaker 2:Yeah, absolutely. I think the thing too with the military is that they kind of brainwash you to be a renter, right? So they tell you things like oh well, you might move at any time, so it's probably best that you just rent, and you know. They also don't tell you how to invest your money, right? So, and it's not in their benefit too.
Speaker 1:Welcome to the Everyday Millionaire Show with Ryan Greenberg and Nick Calvis. Alright, guys, welcome back to another episode of the Everyday Millionaire Show. We are here with Chase Kinzer. How you doing, chase? What's up, guys? Thanks for having me.
Speaker 3:Yeah, thanks for inviting us to your house.
Speaker 1:Yeah, we're at Chase's house right now. Mine is too heavily under construction. Last week we got away with it this week. It's just, I don't want to subject you guys to all the dust and then you guys sue me for mesophilia in a few years. So thanks, chase, for hosting today. So Chase is one of the newest agents on the PE Home Group team handling our direct-to-seller acquisition. So we'll start with some of that, some of that news. We've been now doing the cold calling thing with Pinpoint Skip. So shout out to Faisal for hooking us up with not only the list but just a bunch of information, and he's just kind of an open book with anything that we've called and asked, texted, whatever. So shout out to Pinpoint Skip for that. How long have we been going now, chase? For four weeks, three weeks.
Speaker 2:Yeah, yeah, close to three weeks. Yeah, because we're wrapping up our month buying new lists now getting them out to the cold callers.
Speaker 1:So we have three weeks in. How many leads have we done or how many leads have we had come in?
Speaker 2:So we've had 18 leads come in in three weeks, which is pretty big.
Speaker 3:How big of a list was it? 10,000 records, it's like 10,000 for every like three to four weeks.
Speaker 1:But didn't we also submit like 30,000 records from Diana too?
Speaker 2:Yeah, we haven't got that far yet. So, that's a little more complicated because we have to split the sellers and the buyers because we don't want them. They don't have a transcript yet the cold callers that we're using. They don't have a transcript for calling buyers to see if they're still looking.
Speaker 1:So 18 leads? Well, we're going to see this Like this is a muscle that I haven't even worked yet or flexed, because I truly don't know that game. We've just been buying from auctions and other realtors and wholesalers, you know, in our career. So this is kind of a funny thing to watch Chase do Like he's like sitting in my basement we're working and he's like talking some old lady for like an hour straight, just like working it, working it. And then like it gets to a point where they just like either hang up or you got to like just try to get an in person meeting, because that's like I feel like the only way that I know how to sell somebody on the other stuff that we offer besides just buying their house for cheap.
Speaker 3:Yeah, chase, why don't you bring us up to speed? That way, everyone knows a little background of yourself and you know where you came from and where you're at now.
Speaker 2:Sure, I mean, I'm kind of young, so I think going back to high school is probably the best option. I was dating a girl in high school and her father was a more transporter, and so basically we were transporting bodies up and down the East Coast and basically I got tired of listening to music, man, and so I ended up finding bigger pockets, found my passion for real estate. You know, within that I started listening to Rod Cleath and dabbling in other podcasts. Right, and one really stood out to me was a Navy paratrooper, so he jumped out of planes for a living and went into like remote areas of war zones to like save people and did some really cool shit, basically. And so he was investing in real estate, talking about the VA loan, and it kind of sparked my curiosity of like, hey, like what's this VA loan thing about? And at the time, you know, I was transporting bodies making like $15 an hour.
Speaker 2:It wasn't, you know, it wasn't going to be my career forever. I was watching all my friends go to college. So I was stuck in little Roanoke, virginia, it's about four and a half hours from here, in the middle of nowhere. And so I was just sitting at home one day and I was like, dude, I need to go talk to a recruiter. So I went and talked to a recruiter and I told him, hey, I'm joining, but if I join, I'm only joining for one thing and that's going to be cyber, and I'm not doing military police, I'm not doing anything like that's nuts. Like cyber is the way, because when I get out, if I want to continue in cyber, that's where I'll go.
Speaker 2:And you know that went stalled for a while. Like I don't know if you guys have ever heard of the process, but it can take weeks, months sometimes to get a job opening, and so you know, waiting on that process to happen, all my friends are going off to college and eventually a recruiter calls me and is like, hey, I got your job. And so I get chipped off and I'm down in Texas, mississippi, I get stationed up here and luckily I have two aunts that live up here that are my stepdad's sisters, and so I'm like, hey, I need a realtor because I want to buy a house. And so I bought this house, my very first house, and it was in the mix of COVID. The rates are stupid low.
Speaker 2:They're like three, four percent and I'm putting offers in. I put like two or three offers down the street and I can't get anything accepted. And I did. I had like $6,000 to my name, so like I barely had a closing cost and like I'm out here asking for, for seller concessions and everybody else is like offering 20 over asking price. It was pretty challenging. This house ended up sitting on the market for a while. We had seller concessions and I got them basically to cover my closing costs. I didn't have to put anything down.
Speaker 2:I moved in with the money that I had in my savings account, brought a roommate with me to pay my mortgage, so I rented out a room to her for $1,000 and only had to pay. It was like $800 at the time. And during that process my realtor forgot to tell me that there was a association fee, a capital contribution of $1,200. And I had just went out and bought a couch, all the furniture that was going to go in my house, and I spent almost all of my savings on this. And so I'm like, hey, dude, I think you need to help me pay this because I can't afford it anymore. And he was like, yeah, sure. So he ended up splitting it with me and $600 and $600. So, long story short, I realized that a lot of realtors don't understand the VA loan and sometimes they're just not. They're just there.
Speaker 3:Did you use the VA loan?
Speaker 2:Yeah, so in this house, yeah, I used the VA loan zero down and, like I said, I got the seller to give me concessions that covered most of my closing costs.
Speaker 3:Awesome. So what exactly is the VA loan for those listening?
Speaker 2:Yeah, the VA loan. I like to explain it this way sometimes it's like imagine going into a toy store and you're with your kid and they want to buy a toy house, right, but they don't have the allowance to cover this toy house. And so the toy house is like hey, you're a superhero, you've been doing really great things for the community, so we're going to let you take this toy house home for your kid, and you don't have to. You can pay us back in portions, right, and Can we get?
Speaker 3:a little bit more on the back. Can you move your face and move something away.
Speaker 2:Okay good, Can we do it a little bit?
Speaker 3:Thank you, action.
Speaker 2:Cool down any start over? No, no, okay, and so basically, you're paying that back in portions. Right, and that's how I like to explain it is that you get no down payment, very favorable interest rates, no PMI and, at the end of the day, it's for our service members that are protecting our real superhears, if you will.
Speaker 3:Yeah.
Speaker 1:So how do you spend that? Besides like your house hacking that you brought in a roommate. So, besides that, how can you use the VA loan as an investment tool? So after you live here for a certain amount of time, can you move out, move into the next place and buy another house with a VA loan? How does that work?
Speaker 2:Yeah, I think that's like the majority of how service members kind of fall into investing is that they end up buying a property at whatever duty station they land at, and then there's only a seasoning period of a year. So you have to live in the house for a year. But there are stipulations where you can actually move out earlier. For example, if you bought a two bedroom house and it's for you and your wife and you have one kid and you're trying to have another one, that's a stipulation that will allow you to move out before that year. So you can move out. Go buy another house with a VA loan, rent that house out, assuming that it covers your mortgage, and usually a lender will take 75% of your rent to offset that debt.
Speaker 1:Okay, so can you just do this an unlimited amount of times? How does that work? Is there a limit to the amount of times, or is there a money allocation? How does that work?
Speaker 2:Yeah. So yeah, the loan limit. There's no loan limit on your very first purchase, but after that there's a county loan limit for each county and the counties vary. So for example let's make numbers easy if you buy a $500,000 house and the loan limit is $766,000, when now you have $266,000 in purchasing power left in your entitlement, so you could go buy another $266,000 house with zero down. However, if you want to buy a bigger house, you can, and you can still use the VA loan limit. So say you buy a $300,000 house now, you just need to bring 25% of that difference.
Speaker 1:Okay, does that make sense? And it's all under one loan, still under one loan? Yeah, it's still under the VA loan.
Speaker 3:So what if you max that out and you go to move a second time to your third property? Could you still use the VA loan?
Speaker 2:Yeah, absolutely so. There's no like. It's not specifically, it's not specific to the properties. It's again, it's an entitlement. So you could buy four properties if they're all $200,000 a piece.
Speaker 3:Well, that's what I mean. So let's say you're maxed out of that $766,000 that you mentioned, and then you go to buy your third one for $300,000.
Speaker 1:But it's across the country, maybe even somewhere else. You just got restationed or something.
Speaker 2:Yeah, yeah. So there is a one-time restoration of your entitlement, so you get another $766,000 in entitlement, so you could opt to.
Speaker 3:Within any timeframe, or it has to be like a certain amount of time has to pass. Well, I know you said that one year if you bought your first property. I'm assuming that's the same for your second one. Yes, yeah, those stay the same, and then if you wanted to buy a third one, but you're already capped out and you want to get that $766,000 again, yeah, you would just have to talk to your lender about it. Gotcha.
Speaker 2:And get them to. You have to reach out. You have to fill a VA form out to be honest with you I'm not sure what it, because my lender handles all that so they fill that out and it's basically like one of those stipulations like, hey, our family is growing, or I'm moving across the country for work, those type of things.
Speaker 3:Gotcha.
Speaker 1:And one of the things that we're trying to sell now, too, is the VA renovation loan, so it works as like a.
Speaker 1:FHA203K kind of thing where somebody, a service member, could hire us to not only be their realtor but then we can be their contractor and do new kitchens, bathrooms, new construction even. I think now that we saw. So that's one thing that we're going to target now that Chase is kind of in that market. I kind of said to Chase the other day I was like there's not another perfect person to sell service members on houses and how to teach them how to use the VA loan to their advantage like legally, but to their advantage then somebody that's transitioning right now out of the Air Force and into full-time real estate investing. So I was like you got to hit that. I was like that's why we're here at this podcast. I was like you got to get that content out there, because there's so many people I feel like that are probably sitting somewhere at a base or they're renting a house and they could be using that VA loan to build their wealth while they're living on the dime of the military.
Speaker 3:So I would imagine that some military members they may be afraid, or just of the unknown of them happening to move to another station and maybe that's the reason why they don't want to buy a property in that particular area. But let's say they're stationed somewhere and they buy a house there. What if they get restated somewhere else, can they? I guess that's one of the stipulations where they can just maybe buy a house in that new area that they're getting stationed to without having to wait that year maybe.
Speaker 2:Yeah, exactly. So there's a ton of different stipulations and usually the lender can be pretty helpful in advising you on what stipulation you need to enact.
Speaker 3:And how long do you have to be in the military in order to have the VA? Can it be like as soon as you're in? That's a good question.
Speaker 2:Yeah, yeah, no it's not as soon as you're in. You have to be active duty for 90 days 90 days. And so the guard and the reserve are kind of different. I'm not too sure on their stipulations because they follow different guidelines for medical and education and a bunch of different benefits. So yeah, 90 days is you have to be active for the 90 days and then on your 91st day you're eligible to go buy a house here or down.
Speaker 1:So this is like backtracking a little bit, but when you went in for cyber, do you still have to go through the same boot camp and basically anything that? Everybody else does yeah why? Because I'm a nerd. Well, no, I just didn't know if you're going to sit in front of the computer. Do you have to go run under barbed wire and all that stuff that they do?
Speaker 2:Yeah, so everybody goes to the same basic training. When you join the Air Force. It's in San Antonio at Lackland Air Force Base, and so you go do your seven and a half or eight and a half weeks at Lackland for basic training and that's just to get down your basic military training and then from there you go to your tech school. So, depending on what job you got for me, being cyber and like all the cyber people, the admin, people, finance they all go different places but like, for example, we had air traffic control on our base, cyber and then finance, and so, like we were all in station in Mississippi, at in Biloxi. So yeah, that was another three months that I had to do that.
Speaker 3:So when you're stationed somewhere, are you automatically able to just go right outside of where you're stationed and buy a house, or do you have to get permission to leave wherever you're stationed to buy a house in that area?
Speaker 2:Yeah, it's tricky, especially when you're in tech school. You're still kind of on on like permissive basis, so like you don't really you don't get to just leave base, and so, like for us during it was during COVID too. So like I have a totally different military experience than a bunch of other people, a bunch of other vets, because when I was going through it, like we couldn't even leave, we had a triangle on base of dorms and we couldn't even leave that triangle and interact with other people because of COVID emissions and stuff like that. So but but generally speaking though, like when you're in tech school, still you're not going to be able to leave because you don't even have a car, typically Because you flash straight from basic training to tech school. How long is tech school? Again, that depends on your job. So mine was 66 days, but these are like business days, not calendar days, nice okay.
Speaker 1:So if we have a service member out there, that's like hearing this podcast right now and they want to get started on the VA loan process besides calling you to be their realtor here in Maryland, what? What is their first step to get kind of started with that process?
Speaker 2:Yeah, you want to. You want to reach out to a lender that is very knowledgeable in the VA loan, because the VA loan does have Stipulations, especially during the appraisal process, where it's kind of like an inspection on steroids, and so they come in check Toilets, they check loose handrails, like that's a big one, paint chips is another big one. So you'll get flagged for that and the seller will have that'll be a A repair that is gonna have to be fixed before they will finance on the property.
Speaker 1:Okay. So they talked to a lender and then our, when you started looking, were you looking in Like a certain areas that you knew was gonna be a good rental one day, where you just looking for the right deal? How did it? How did your process look?
Speaker 2:Yeah, I think my process was different too, because here and for me, like as you guys know, in Maryland the housing market is kind of nuts, especially going through COVID. That that Time frame was not set up, great for me. So I had to move away from base because and typically this is how it is at most bases but it's gonna be really pricey around the base because all the military members are gonna want to buy closer to base. So it's a shorter commute.
Speaker 2:But for me, like I just wanted to get out of the dorm so bad that I was looking anywhere and Luckily enough I chose this area, which happens to have higher rent rates than the rest of anoronal County, and it's a cheaper place to buy too. So you get more bang for your buck and you're getting higher rent rates, which was just kind of luck of the draw because I knew nothing about Maryland at the time. So my advice for anybody that is in tech school, about to go to their first duty station and is wanting to buy a house, is to definitely research the areas. This talk to a realtor that knows the markets and that is investor friendly. So that way you're buying a house that is gonna cover the rent, is gonna cover your mortgage.
Speaker 1:Right. So the way I think of it, to like from an investment standpoint, if you're like near Baltimore City, for example, and you have, let's say, I don't know what it is, if it, even if it's a half million dollar Allocation, you could potentially go buy, move into and do like renovation loans on five, seven, five or seven houses In just a couple of years. You know, five years, whatever, every year Maybe. Maybe there's some stipulations you can do sooner, but so that that process is kind of just like a rinse and repeat thing with no money down right.
Speaker 2:Yeah, I mean essentially, if you Refi out of the house, out of the VA loan, then you can rinse and repeat as much as you want. I mean the thing is the, the VA loan, when it was first Created, a lot of military members were kind of abusing it investing, and so they kind of tighten the restrictions on you know how you're investing, so like you can only invest in like a fourplex, so up to four units is is that which is a great idea, because that's actually legal so if you are looking, you know, in in a certain area and you are in the military Especially being in the military it's gonna be really easy for you to find other tenants.
Speaker 1:It's like being in a hop, like in a Hopkins situation, where all might a lot of our rentals are. You could just keep finding new tenants through those Old tenants. It's kind of like a transient community. You know you have people that come in, they go to school, they leave. You have people that are here for the military for a year or two, they move to a different station, whatever. So you can buy up to four units right, zero percent down with the VA loan, rent out the three units, live in the one and If you're in a place that has a lot of these fourplexes, you could technically buy one every year and you can multiply your unit count by four or five. I feel like that's gonna be the way that you find cash flow in this VA loan process right, it's super hard, man, especially in single families.
Speaker 2:Unless you get lucky and and do like the VA renovation loan, it's gonna be super hard to cash flow because you're not putting any money down, so your mortgage is higher than Than a conventional loan. So that's, that was kind of my problem. That's why I've kind of haven't used my VA loan again so far. It's just because, like, buying single families is really tough and then the challenge of, like Maryland doesn't have a bunch of fourplexes just laying around, so yeah, it's, it's. It's really dependent on the market and kind of go for those townhouses.
Speaker 1:The thing is, though, just doing anything and getting into the game at all like owning something is just better than renting, you know so, even if it is gonna be your only investment, that you get one house and you could just pay it off, or you can house hack if you're young and you can rent out a couple rooms or whatever. I mean having. That is better than having nothing and renting.
Speaker 2:Yeah, absolutely. I think the thing too with the military is that they kind of brainwash you to be a renter, right, so they like tell you things like oh well, you might move at any time, so it's probably best that you just rent, and you know. They also don't tell you how to invest your money, right? So and it's not in their benefit too right, yeah, yeah, yeah.
Speaker 1:No, they don't want you thinking on your own like that.
Speaker 3:No, absolutely not, and that's why I was asking, like maybe they're afraid that they're gonna have to move and be restation. But what you can say that those them dopey Sorry, I'm trying to thought there for a second. What you can say that those people is Is um, they can just obviously rent their house out. That's been my big pitch, right Like and and for a lot of people.
Speaker 2:they'll come to me and they're like oh chase, like I'm about to PCS, I'm leaving. I'm like dude, this is the perfect time for you to buy. So you buy, move in, and now you have orders to leave. You just have a new reason to buy a new house. So it's it's one of those things like let's find you a house that makes sense and that old cash flow Even if it's only cash flow and a couple hundred bucks a month now, yeah, and it's just getting over that first hump of buying your first property.
Speaker 3:You know, when I first started it was, it was tough going through the whole cycle of like buying it, renovating it yeah, finding a couple hundred bucks a month when you don't have any money into it is a great deal.
Speaker 1:Yeah, yeah for sure if they put down your down payment you cover. They cover all sorts of expenses, like I mean, that's a good deal, right, yeah me. So if you are active duty, you can use this. Is there any kind of deal for anybody that's retired, or like if they formally retired after X amount of years? Can they keep using this, or is it just active duty?
Speaker 2:Yeah, this VA loan is a benefit for life for anybody that served active duty 90 days consecutive, and the only stipulation to that is is if you were dishonorably discharged.
Speaker 1:So you technically could keep using this VA loan. You could use it again even after you transition out.
Speaker 2:Yeah, yeah, so that's my plan, and the reason I've been saving it personally to use again is like we're trying to get on the Tampa eventually. I want to save that for my big purchase on my house. So I'm not putting 25% down on a house. You know that's my next house.
Speaker 3:But you want to move to Tampa.
Speaker 1:Eventually. Yeah, it's going to take over operations down south for us. We got to first get them started here. So we have 18 leads. We got to get at least one. Yeah, that's cool.
Speaker 3:I don't know if you have a time frame on when you want to move down to Tampa, but you know.
Speaker 1:You want to be roommate's.
Speaker 3:Nick. Well, no, I'm just saying like, find whatever's left. If you have 250,000 or whatever it may be, find a neighborhood in Baltimore that has ARVs and a 250 range to where you can just have a rental for the time being.
Speaker 2:Well, the other reason I'm waiting too is like I'm trying to get this 100% disability and so like, with the VA loan comes a funding fee, and you know we can talk about that a little later. But basically when you're 100% disabled, you don't pay that funding fee, so there's 0% funding fee, and then you don't pay personal property tax either in the state of Maryland. So that's kind of why I've been waiting, and I only have a couple months left before I get out and I find out my rating.
Speaker 1:Yeah, there's all sorts of interesting stuff too, and I think that's why you're the perfect person to like sell to these people that are, either, you know, actively in the military or even out of it, because you actually know the process, you know the terms, you know how to get through the loan process, the searching for the house process. Like people should be reaching out to somebody that's been through it, not just a normal realtor. It's kind of like an odd thing, you know. It's like somebody. It's like a realtor that handles short sales, like they're going to be way better at handling short sales than your typical realtor that doesn't really know shit about short sales. So having somebody that's been through the VA process is probably your best bet when looking for and I'm not just saying that because he's an agent on our team now, that's who you should be looking for somebody that has the experience in that thing.
Speaker 2:Yeah, I think finding an agent that has a good partnership with a lender too, that is very knowledgeable in the VA loan, like Christian, for example, being able to like bounce stuff off of each other and then, like him, come to me because I have prior experience in the military, you know, that's super helpful. And again, like some people get kind of weird, like when you get a client to be like, hey, this is the lender like all my clients use, they're like oh, I want to use Navy Fed or I want to, and like those people are great, but the problem with them is they only work nine to five, monday through Friday.
Speaker 2:And so if you're in a competitive market and you're trying to submit offers on the weekend and you can't get a pre-approval letter like it's going to be pretty hard to submit an offer without a pre-approval letter. So that's why I think having like a good lender and realtor team like is super important. Like we can't get kickbacks from the lender either, so it doesn't really matter.
Speaker 1:Yeah, I think definitely having the team with the experience, especially in a market like right now. You said like it's competitive. I mean we just both listed flips and they sold with more under contract within a week over asking. So if you really want to be competitive in any investment properties and personal residents, whatever, you got to be like first on the scene. You got to be strong, like I mean, we're talking about the same thing where, you know, we've been kind of brainstorming back and forth this direct to seller stuff.
Speaker 1:It's like how do you stand out, how do we stand out from all the other 11? I think some lady literally said that you were like the 11th person that is called like today, so like they got the same list, the same, like they've got 11 phone calls about that house today, like how do we, you know, kind of stand out? That's been one of the struggles of that whole thing. It's like we're just on the phone. You're just on a phone call, you know. So let's talk about that, the flips that we just did. So that the flip that you did is not a VA loan. That's a totally separate thing, right? Yeah, you can't use a VA loan to do a flip.
Speaker 2:Like it has to be inhibitable.
Speaker 1:So let's talk about the flip that you did. How did you come across it? Were you still like actively in work, like working?
Speaker 2:every day. Yeah, it was actually funny enough. Well, so the last year and a half again, I haven't had the traditional military experience. Like the last year and a half I was working from home building websites for the Air Force. So, like you come across anybody else that's ever done that, like it's going to be few and far in between. So like I've been very blessed with the opportunities that I've had with the military. And so I was working from home Actually, I was at Flag Football when they called and I had just set my phone down and my wife saw it ringing and she looked at it and she was like, hey, chase, come here.
Speaker 2:Like it might be a client. You need to call this back. And so I called the lady back and she was like, yeah, I was just wondering if you knew anybody that bought houses for cash. And I was like, yeah, I do, and I've never bought a house before. You know, cash I was. It was a big learning curve for me and the whole process was so I told her, yeah, I was like, yeah, I buy houses for cash. And I was like, let's set up an appointment and I'll come look at it. And I got on the Maryland investor network. I was like I need a contractor to walk a flip with me. Next thing, you know, I got like seven contractors DM and me trying to go look at a flip. And so we go look at it and I'm like this is going to be a good one and it was just about closing the deal, basically, and getting there to my purchase price.
Speaker 1:So she called you with the house. Was it the seller? Yeah, it was a seller.
Speaker 2:So it was actually the seller's daughter. The grandmother had originally owned the house and she passed away, and so I went through probate and the daughter of the grandmother owned the house now. But the daughter of the seller was the one that called me.
Speaker 1:Okay. So that's not often where people just call you. It's happened to me a couple of times. People call you and they just happen to have a really good deal on the other line. You didn't have to do anything to get it. So what did you do from that process of somebody that has never done a flip, has never raised capital before? What was your first kind of step?
Speaker 3:And also, how did you negotiate it? Were you guys both on the same page with the price, or did you kind of like help her out with what the values were.
Speaker 2:I think she trusted me too because the way she found me she just Googled Realtors and Glenn Bernie I was like the seventh one down, she said. And she was like, I really loved your reviews and you seem like a trustworthy person. So I went over to her house and we had that appointment. I took a bunch of pictures with the contractor. He told me how much it was worth and I told the lady I was like, hey, I'll get back to you in a couple of days. And she was like, yeah, no problem, and they had.
Speaker 2:It was kind of multi-generational, so it was her mother living there, it was also her uncle and then her sister and they all had kids and stuff. So there was like five or six kids running around the house at one time and they were all sharing this space. So you could imagine how cluttered and how boxed in they felt basically. And so the contractor told me the price and I went to work trying to figure out what the ARV was. I saw that some homes were selling in the 395 range, so I marked that as my ARV, subtracted the rehab price and did 70%, which got me down to like 165, 170 as a purchase price, and so from there I used it's called Flipper Force or that's what it was called. It was a software that just rebranded to upright but you can basically input all your numbers and it'll tell you you're holding costs and everything like that. And so I used that thing like three or four times to make sure my numbers were right, because I was like, dude, I got to be missing something. Right, like when it's your first one, you just don't want to miss anything, but you end up missing something. So from there I was like, okay, I need 50K as a down payment and closing costs, and then from there, I need another 20K and holding costs just as a reserve.
Speaker 2:And so I started calling people and trying to figure out where I could get 50K from to buy this house. And I called my uncle that does a few flips in Rone Oak and he was kind of on board but he's very busy and he's like Chase, actually I'm about to like spend all my capital buying another flip, but I'll let you pass that one off to the next one. So I call a realtor that I met at a seminar down in Richmond, virginia, and he's a Nova realtor, and I said, hey, pedro, I have this opportunity, would you be interested? And he was like, what's the opportunity? I was like I have a flip and I'm willing to give you 50% or 40% of the profit share. Stupid me gives him 40% of the profit share, which, granted, I got the deal done. But you know, you live and you learn and you move on from there.
Speaker 1:So what did the numbers look like? What did the numbers fall in at?
Speaker 2:Yeah. So eventually, when we got that purchase price, when I figured out what my purchase price was and I secured funding, I sat down with her at a Starbucks and I was like, hey, I had three other investors look at this deal. I got their offers and I had just kind of put them on a piece of paper and I, of course, put my offer a little bit higher than the other offers and we're like here are your three offers. And it was like 145, 125 and 155. The 155 was my offer and they wanted 255. And so I was like this is the best we can do and this is probably what any other investor is going to pay. And the reason my offer is the highest is because I can waive my commissions and a lot of other investors are going to have to pay realtors. So my offer is a little higher.
Speaker 2:And she was like well, we're going to need to think about it. And they were pretty distraught. They really wanted 255, but 155 was literally that was my number. And so I was like, okay, you think about it. And I went and got in the car and drove down to Florida, and so the next day she calls me and she was like I think we're going to go with the 155. And so from there I sent her the contract and got it signed.
Speaker 1:Now we just got to do this a couple more times this month.
Speaker 2:Yeah, I wish they were all that easy. I wish they just fell into your lap like that.
Speaker 1:So okay, so 155 was the purchase price and then what was the?
Speaker 2:construction, so the construction costed 118.
Speaker 1:Okay, so 118 for construction 155. Were there any other fees or anything besides holding costs?
Speaker 2:Yeah, yeah. So we had holding costs. And then I was telling Nick, we had the basement leaked in November when we had like back to back rainstorm so we ended up having to waterproof the whole house. That cost us $8,000. And then after that, because we had already finished the portion of the house that leaked and they had to waterproof, they cut six inches of the drywall and so we just had hanging drywall in the basement. It cost me another $4,800 to refinish that portion of the basement.
Speaker 1:Yeah, those are not fun expenses. No, it wasn't, not upgrades that people like to see. Okay, so that 118 figure for the construction was that with this included, or?
Speaker 2:No, so that wasn't. So we were at like 132 total.
Speaker 1:So 132 and 155. So we're under 300 and we have some holding costs. So you had hard money for some of it, right yeah?
Speaker 2:So we use Kyavi. Many people were telling us like, use local lenders. But my problem was I didn't have a lot of cash so I strapped for cash and Kyavi was 10% loan to cost, so we only had to come with like $15,000 down plus closing costs.
Speaker 1:Okay, so you're in it for what? At the time? 300. After you spent all this holding 300, maybe 310. And what was? I know the answer to this because I listed the property. But what was the final sale price?
Speaker 2:Yeah, so I listed for 405 because obviously you have six months of renovations, prices are continuing to rise, so there's some houses that sold in, like the 415 for 20 range, and so what I like to do is typically list that 10 to 15 under what I think it'll sell out, because I love getting attention at the property and I love having bidding wars. I mean, that's just is what it is, and so that's exactly what happened. We listed on a Thursday. By Sunday, we had multiple offers and they went for 425.
Speaker 3:So I agree with what you just said. As far as listening a little bit lower, I see so many realtors because I monitor the market in certain areas listed at a higher price and I already know that it's not going to sell at that high price. But then you see them drop it like five grand every two weeks and then it kind of like goes still because the days on market and I'm like you know you should have listed this at the right price from the beginning, you would have been sold.
Speaker 2:Yeah, in the realtor game we call that buying a listing. So sometimes, like you, just have an unreasonable seller that thinks their house is worth too much. And so you go in there and you list it and you just keep your sign out in the front. So it's basically free marketing. So you're putting your sign out front and the neighbors think, oh look, johnny's selling his house. But next thing you know you're three months later and you've done three price reductions.
Speaker 3:Yeah, I mean, I see it for flippers and buying old investors who do it as well. It's the property's high and I'm like, well, actually you're not going to get that.
Speaker 1:When I was handling all of these offers coming and I was down in Florida and I was literally like yelling to Tyler. I was like we got to buy more houses in the county. Our flip in Beltsville was just about to finish up. We came for sale like a week after Chase did his first flip and is killing it where our flip is about to come up. We knew we were going to do well on that one as well. So I think that this year that's what we're going to really focus on is just hitting those flips getting as many under contract, many, even some wholesale stuff that we're looking at just to our small pool of investors. But my Beltsville house landed. I'll go over those numbers real quick too. For those of you that were following on social media, we're putting out a couple videos about it. We bought it at 305 from HK Equity. Shout out to Luke and Danny.
Speaker 3:That was pretty recent right.
Speaker 1:Yeah, I closed on it the day after December 2. Or December 3. One of those. It was just after Thanksgiving. We bought it for 305 and put about 75 grand into it total. I don't have my home inspection back yet. I think we're going to have to replace some windows, but I have Seth going out there tomorrow to check that out. So hopefully we're under 80 grand in renovation.
Speaker 2:I'll keep them at bay, don't worry.
Speaker 1:And then holding costs, we're probably going to land around 10 grand, so somewhere around 400K all in and we're under contract at a net of 476. So a nice little like $75,000 profit margin on that one. And it was like quick. I mean December till what? Three months or?
Speaker 2:two months December, January yeah, like two months Two months.
Speaker 3:Yeah.
Speaker 1:So two months make 75 grand. I was like if we could just do that like five times a month, we'll be in pretty good. I don't have to do much else after that.
Speaker 3:Yeah, that's true.
Speaker 1:So the director sell her out. I think that's going to be the next thing that we need to do. We're really focusing on that and we're spending a lot of time and O'Shea's spending a lot of time and that's kind of the goal is to just get these county houses. I think the city's cooling down and dying off a little bit. I'm definitely not excited to buy many more houses in the city, just with like rent seems to be dropping through the floor. I have like properties in freaking Canton that I know of that not even that we manage. But a friend of ours has been sitting for like three or four months under what like he's at where his break even point is. His mortgage is like 2100 and his rent is at 2100 and you can't get it rented and there's vacant apartments sitting at those luxury apartment buildings with rooftop pools and freaking basement garages you know off street parking that are now less than $2,000 a month for two bedrooms. So it's like hard. It's hard to compete with that. Nick, are you seeing rents Decreasing as well?
Speaker 3:I am seeing, as we discussed earlier, some of my houses rentals sitting longer and I think it may be a mixture of the market and the winter time.
Speaker 2:Yeah, I was just about to ask that because, like when I first moved here, my first research was Baltimore City and I was looking at it and it seems like there's seasonal highs and lows. Is that what you see?
Speaker 3:That's what I'm feeling. At the beginning it felt like everything was just renting, everything was fine, but then, like right now in the winter time, I have like 10 vacant properties sitting. I did just sign the lease on two in February, but I have one that just is turning over now, so that's another vacant one coming up. So it's definitely a combination, and also maybe a combination of me not putting a lot of focus in the tenant placement and putting focus elsewhere. So it's definitely a mixture of different things.
Speaker 1:Yeah, I do think focusing on tenant placement in the winter time and then getting those tenants. Everything I'm telling Jocelyn, who handles most of our listings now, is like let's just get these people locked in until like April or May, because if you could do like at this point I don't even want a 12 month lease, like if you could just do a 14 month lease.
Speaker 1:I'll give them even a slight discount to not come vacant February 1st because, like I, or January 1st, I do not want to fill vacancies. January, february, march, like April, is when things start heating up. Like April, may, june I feel like those are the three months that are like super hot to rent properties and it's like constant turnover and people are moving in and out, but after like August, september and like even in August because kids are going back to school, so stuff in the county definitely starts to slow down, like after August, and then you get into September. Now you're in Thanksgiving, like I feel like this year too, I think we felt it really bad this year.
Speaker 1:Well, worse this year than past is because of our overhead is like a lot higher than it's been. As the company grows, we're like obviously the overhead's growing, so, like Thanksgiving to freaking January, mid January we're just like nobody's calling vacancies are all like beyond belief. There's nobody showing properties, like nobody wants to see anything, gets dark at 4pm. All those factors just makes it a tough, tough season and when you're spending a lot of money on overhead, it's something that you really got to like keep in mind every year.
Speaker 3:Yeah, and just the you know, the holding cost of the mortgage on that bacon unit or bacon property definitely adds up.
Speaker 1:Yeah, absolutely. So. A couple of things that I wanted to cover first before we wrap this up. One of them is basically going back to Chase and what you're doing for us. What is like our next steps in growing the acquisitions team? Like, how are we, like, what are we doing to kind of take that to the next level?
Speaker 2:Yeah, I think it's interesting dynamic that we kind of have going on from the retail side of things to the investor side of things, so like, basically, you know, with the cold calling, just getting these leads in and converting them and then sending these to our. We have a small list of investors that you know we're sending these leads to, and then, from the growing aspect, we just kind of almost onboarded Ike. We're waiting for him to kind of join the team and so like we're bringing on realtors under us to kind of push these other leads to so they can kind of work these leads as well. And it's kind of like you explained a while back, it's kind of like an umbrella right, Like we're getting people under and they're able to make money with us too.
Speaker 1:Yeah, yeah, we were talking to another couple of flippers, wholesalers, flippers like you know, marketing guys the other night and I was, like you know, for us, like I just want to keep creating this like ecosystem where now, like we got partnership with DK, law and Diane has been great as an asset for us and like I have I don't know if you know Julio, but he's like he was a contractor. Now he's under our umbrella and he's selling for PE and Diana just was able to make us an LLC for the kind of assets that we're going to hold with Julio and a non-compete for him to work for us and like all this stuff like is just created with this kind of ecosystem that my goal is to keep as many people investors, teams, different businesses like under there to feed each other. We were we actually mentioned you the other day I was like, yeah, Nick and I don't like partner on anything besides the podcast, but he's out doing like landscaping stuff for us. He's doing snow removal stuff when it snows, like that's all under the same ecosystem, like we're all feeding each other's businesses or promoting each other's businesses, and I think in this game, that's like that's what it's all about Building a name networking. You know the.
Speaker 1:There's a dude that I'm doing a kitchen for and Chase came with me to the estimate and his name's Adam and he's turned out that he's like a private chef and we're going to be hosting a little party at my house after the renovations are done and everything. And I was talking to Paige just recently, like randomly. I was like hey, like I'd love to get like a chef to host this party for us, because I'm always like cooking and running around doing crazy while I should be like entertaining guests. So I call that guy Adam. This is such such a stupid example, but I call that guy Adam. I'm like hey, can you, you know, do a private chef event at my house? So now I'm like going to make a couple of grand off him doing his kitchen and now I'm going to pay him back by coming over and doing like a chef event at my house.
Speaker 1:So having that like transactional power too. I was another time we were together the other day and like somebody calls me like hey, can I drop a gift off to your house? Like having the transactional power, like where people just want to give you things because you spend a bunch of money with them, I'm sure you know, nick like vendors that beat your door down because you spend money there. Like they're, like I want to. I want to treat you, I want to do you know, do cool stuff for you. So you keep buying things for me. Do you guys? Do you have any relationships like that right now?
Speaker 3:So Luke keeps. Luke calls me a lot but I haven't really responded back to him.
Speaker 3:You got it, cause they do take care of people, man, like we was just kind of like the time cause he, luke, is the representative for Home Depot and he. We were supposed to meet one day at Home Depot and he had me there waiting for 30 minutes and then he calls me and says I can't, I'm not going to make it. I'm like you could have told me that when you, you, you were maybe in route, but he just never did so.
Speaker 2:So do you have to spend a certain amount of money to be able to get like a Home Depot rep?
Speaker 1:Yeah, I think it's. I think you have to start off by spending. I think it's a thousand dollars or $1,500, and then it's like $1,500 a week to get the managed account, so like you have to keep. I don't really know the formula, but it's more than $1,500 a week. I think is what it is.
Speaker 3:I think it's. I thought it was like 200 or 250 a year 250,000. That's what I thought. I'm not really sure. Yeah, I thought I heard that too.
Speaker 1:Yeah, maybe, maybe that's it. But what's 150, what's? 1,500 a week times 52 weeks? That's like 150. Yeah, so maybe it's a little bit more than that. That's a bunch of money. But you do get like a dedicated person that like looks like our rep. But then we have like a par who's like we could text them to orders and any kind of like issues that we have with deliveries or anything. We call them, email them like hey, I need this ordered on the registered card and it gets ordered. It is nice using those resources. I know you don't, you probably don't use them as much as we do, but yeah, not, not, not quite.
Speaker 3:You've got to get into it, but you know we have our own system and I know I could use their system and benefit from it. Yeah, Actually, yeah, 1,500 times 52 is a little over 75,000, not 150. But it's, it's more. I wasn't going to embarrass myself doing the math.
Speaker 3:It's more of like I think it's 250,000 that you have to spend, and once you get to it, like if you hit like 125 mid year, then they'll see it and then they'll kind of just assume that you're going to spend the same amount and put you on the managed account, gotcha.
Speaker 2:So you're doing that with one flip as a as a hobby investor.
Speaker 1:No, they're not going to give you a person because it's only like I think our par only does like four or five businesses, so like there's one person for four and then Luke is like the that person's boss, so there's almost like two people per like probably 10 or 15, 20 businesses, gotcha.
Speaker 1:So it would be, you know, not cost effective for them to be putting in people who spend 50, 60 grand under that, because they do take a lot of time, like they'll spend hours on the phone with us doing orders. We send them, I send them sometimes spreadsheets of order guides and they go through and price it all out for me, build lists, build quotes, and then we always get a different price. Even if we go on and you see, like preferred pricing for the contractor price online, we get it even lower than that. So there's a lot of benefits to it too. If you just order the stuff online, you don't get that extra discount and sometimes, like the one I just did for my house, is like a $700 discount On top of what we already thought we were getting discounted if you just put it in your cart. So there are those benefits the more you spend, the more you get on. For you know, it's like it's the same thing with, like credit card points.
Speaker 1:Like I Tell people this all the time, like people see me flying around the five star resorts and going all here and going there. I go to Tampa every other weekend. I'm using credit card points on all of the everything.
Speaker 1:Like Every time we go away for BP con, like we're just spending a shit ton of points and we get To nice things because of it. You know that's what it is. So like people that it's. It's funny because there are other businesses that are like super successful businesses. They just don't have the transactional rate. Like you think of a lawyer, right, like, a lawyer is not buying a million dollars of Home Depot materials. They have a really successful business. They probably make a shit ton of money, but we just get to spend so much money that the benefit of like the 2% back at Home Depot, like we get a cash back check at the end of the year you spend a million bucks. That's 20 grand.
Speaker 2:They're sending you back a lot of money.
Speaker 1:That's real money, yeah right like the, the rebates and the gift cards that you get throughout the year.
Speaker 2:I mean, we're probably getting like 30 to 40 thousand dollars back or using like a Home Depot credit card, or is it a MX?
Speaker 1:So we use we do. We do have a Home Depot card and this is for anybody out there that's like playing the Home Depot game or the points or whatever. If you're flipping, even, you can get a Home Depot card and it gets you four times the amount of points that you spend. So, like, if you spend a dollar, you get four points and up to a million points is where you max out. So we last year we didn't really know if we were going to spend a million at Home Depot specifically, so we used the, the 4x credit card, until we got to the point where we knew, okay, we're gonna spend a million for sure. Then we switched over to our am ex, because the am ex gets you one and a half percent back, one and a half points per for construction materials.
Speaker 1:I'm very keen on these credit cards. So, like the, the Southwest card, for your companion pass, you need 135 thousand points. So you basically need to spend like 125 thousand dollars because they give you 10,000 points for free. So basically, for my, my own personal house, I just spent it last year literally exactly like exactly 125 thousand dollars on that credit card and then I didn't use it and purposely waited until the first to spend any more money on my house on that credit card, because I knew this year I have to spend another 125,000 on that credit card just to keep that companion pass, to keep all those points up. But yeah, so we were using the Home Depot card and we switched to am ex. Now that we know we're gonna be spending a million or probably more at Home Depot, we just use the am ex straight. So we get a point and a half from them, two percent from Home Depot and that's like three and a half percent. Thirty five thousand dollars. Yeah, that's a lot, just like here you go.
Speaker 2:Yeah, that's not what a lot of people make in a year right.
Speaker 1:Yeah, it's just like rebates.
Speaker 2:Yeah, yeah. It's crazy that you guys use am ex too, because like so for the military. I don't know if you guys know this, but you can get an am ex platinum card, and do you know how much their annual fee is? Yeah, it's a lot.
Speaker 1:It's 700 for mine and then, 350, I believe, for the Tyler's like the extra ones the additional.
Speaker 2:So they waived that for military members. So you get it free. So you get all the benefits of an am ex, but for free and so you don't have to pay that, that annual fee and so like.
Speaker 2:What I did on my flip is my Contractor was sending me invoices for 15 and $20,000 and I'm swiping my my am ex card, getting the one and a half points On top of. I don't know if you know this, but like you also get century lounge access with a companion if you hit $75,000 spin. So that's pretty cool. I don't know if I'll ever use it, but it's pretty cool to have.
Speaker 1:And so like it sucks. I picked a place to go. All the time it doesn't have a lounge right but, as an outlandish, there's only a couple like really good lounges. But when you do travel, like when we did our honeymoon, the lounge access actually saved our life because we were stuck in Tahiti Overnight on the way to Bora Bora. We had like a I don't know how many hours, but it was an overnight layover and they had like in the lounge, had like sleep pods, it had all free food, free drinks, like you could literally have your own room. It's like having almost like a hotel room with everything is free, and we did that in LA on the way out To Tahiti and then on the way back we we were in some maybe Seattle or some other place. We had access to the lounge and that was like really, really nice to have you have an am ex too right now.
Speaker 3:I do, but I've never experienced the lounge. I think all the airports that typically go to don't have them or I've never noticed it.
Speaker 1:I think Vegas has a good lounge. You've been there a bunch, I have.
Speaker 3:I haven't noticed it, though we were actually in Vegas together. We need to take his lounge.
Speaker 2:virginity yeah we should.
Speaker 1:We want to just go somewhere we can go. Well, let's say we're going to Mexico this year, cancun. I don't know if that has a lounge, but maybe one of the layovers does do you go up the JFK, they have a though.
Speaker 3:Yeah, that's a straight flight.
Speaker 1:All right or no, I don't know. Cancun, I don't know, all right. Well, now we're just talking about random trips and stuff. So we'll probably wrap this up, chase. You have anything else we need to talk about before we, before we wrap up here?
Speaker 2:No, I think the VA alone, dude, it's super lucrative for military people. So like that's again, it's. It's so funny because, like people would ask me why I joined and like that was the reason, and so like, if you can take benefits of that, like do it and I'm all for maximizing your benefits, because the military is gonna get theirs and so get yours too.
Speaker 1:So yeah, so if you are here in the Local Maryland Baltimore market and you're in the military thinking about joining, reach out to chase. How do they get in touch with you? Chase, you have an Instagram. Yeah, it's so it's chase kinser on all socials and if you are confused on how to spell that, it's up on the wall. It's K? I N C E R, chase kinser. All right guys. Thanks for tuning in, chase. Thanks for having us at your house.
Speaker 3:Thing. Our next event is going to be April 11th.
Speaker 1:Oh, do we have a? We have an event date. Yeah, locked in.
Speaker 3:Thursday, april 11th. Same time as last time 6 to 9 same place same place.
Speaker 1:Okay, CVP's April 11th. That's it, you heard it, I heard it here first, we heard it here first, guys. All right, thank you, see you guys.