The Everyday Millionaire Show
The Everyday Millionaire Show
From Firefighter to Real Estate Trailblazer - Ian Horowitz (Full Podcast)
How did a fireman from Baltimore become a real estate mogul? Tune in to the Everyday Millionaire Show as we sit down with Ian Horowitz, who shares his remarkable journey from the firehouse to the competitive world of real estate. Hear Ian's candid stories about his initial struggles with hard money lenders, the game-changing moment he secured bank financing, and the pivotal role his partnership and team played in scaling his business.
Ian provides invaluable insights into the benefits of commercial financing, the intricacies of refinancing, and the importance of strategic hiring and team building. Don't miss this engaging episode filled with actionable insights and inspiring stories from the world of real estate investment.
I could get a million dollars. I can make one call right now and get a million dollars easier than you can for your $100,000 house right Like done. Doing a $150,000 deal or doing a $15 million deal it takes the same amount of work.
Speaker 2:I'm assuming you started with like small local banks, did they have to underwrite you as an individual, even though it was a larger deal?
Speaker 1:It was just a natural progression. We started with hard money lenders on single family houses. Then we said we got to refinance and finally we went to a local bank here that's based out of York. They changed our careers. We're like, oh cool, we got $2 million to spend. Let's go buy a bunch of properties and do it. What?
Speaker 3:made you write the book.
Speaker 1:To share information without having to get on the phone with someone every single day. In this way, we can help a lot more people than just one person that I'm talking to at that time.
Speaker 3:Welcome to the Everyday Millionaire Show with Ryan Greenberg and Nick Kalkas. All right guys, welcome back to another episode of the Everyday Millionaire Show. We're here with Ian Horowitz. I said that right. Right, ian Horowitz. Good, ian pleasure. I was just telling you. Actually, I saw our VAs talking to each other and I noticed your name. I read your book a while ago Subsidize. It's a great, great book. So we'll talk about that. Thanks for coming out today, man.
Speaker 1:Yeah, man, we were just talking about doing in-studio podcasts versus Zoom and I know we would have connected via Zoom, but these are always better because you can feel people. It sounds horrible, but feel people understand what's going on and I personally enjoy it. This is the best reason to do. Them is to get out and talk to people and meet new people.
Speaker 3:Yeah, absolutely, and you're local here, right?
Speaker 1:Our office is over in Lutherville. I recently I don't know if you know our backstory much, but me and my business partner were both firemen for the city of Baltimore and then, when we left the fire department a few years back, I actually moved back to Philadelphia for some personal reasons, for my wife's family. But I guess that's why you try to have success, so you can do those fun things. But we're slowly but surely moving our office up there, but we still have a lot of real estate holdings right here in Maryland.
Speaker 3:All right, so the whole operation is moving to Philly.
Speaker 1:Well, me and Dan and those that can't see, sean, our intern, now full-time employee, will be hanging out with us, but yeah, for the most part, dan and I will be together, which is good for synergy, right, like you know, when you have your business partner in the office every day.
Speaker 1:again, it's way different than talking on the phone every day versus in there and working off each other. And then we have a pretty big staff down here. We have a few maintenance guys, two project managers and an office admin, and they'll all remain here and work out of one of our apartment buildings that we have over in Northeast Baltimore.
Speaker 3:I'm a fireman. I was a full-time public school teacher for a while and then transitioned full-time into real estate as well, so I have some similarities there. And what did it look like in the beginning of you? Was it just like an idea to build on your retirement and buy a couple houses, or did you have this dream to start this organization that you have now?
Speaker 1:My real dream was to be a big city fireman. Dan and I both grew up outside of Philadelphia and at the time this is post 9-11, right Like. We graduated high school 2000, 2001,. 9-11 happens Now. All of a sudden, everyone wants to be a fireman, right Like. It's always been a sought after job, but that really put it in the limelight. So we started testing all over the place. The problem in Philadelphia was we lived in the suburbs, you had to physically live in the city to take the test and, more importantly, you had to physically live in the city for your whole career. At the time and I was like well, I'm not doing that. So a couple of our friends tested down here. So we ended up, long story short, we ended up becoming firemen down here in Baltimore City after testing all over the place. And then very quickly did we realize Dan gets hired in 2007. I get hired in 2008.
Speaker 1:By the end of 2009, we're getting furloughed. They start messing with our pension. They start changing our work schedule, closing companies and on top of that you got to remember financial crisis. Detroit's pension goes bankrupt, california, you know? Uh, teachers and every pension like across the U? S. You start seeing pensions going bankrupt. And you're like so you're telling me I'm going to work for the next 30 years, I'm going to trust that Baltimore city is investing correctly, is investing correctly and that my retirement secure, cause we don't pay pay social security. And I was like bro, I don't know man, and can I say I always had the entrepreneurial spirit. Yeah, I was always like all right, how can I make extra money? But I never really put it all together. So to say I was going to go out and create this. No, to say that I wanted to be a big city fireman and live out that dream. That was 100% true.
Speaker 2:So how did the investing start? Did you have, like, friends that were already investing and you decided to do it, or was Dan already involved in it in some way and you guys came together? What did that look like?
Speaker 1:Yeah, so we kind of took two different paths. It's, you know, we have a couple of years on the job, no overtime, like how are we going to make extra money? And we would work side jobs, you know, electric tile, landscaping, whatever it is, where everyone's hustling trying to make a buck, and my in-law is actually sold in service, like outdoor power equipment, lawnmowers, that type of thing. And they had a customer every year that came in and um was like, uh, would always buy a new mower every year. And like, hey, man, what happened? You didn't buy a new mower this year.
Speaker 1:He said, well, I've been buying a house a year for the last 30 years and I retired and they're all paid off. I was like, damn, that sounds good. And so that kind of sparked my interest. And also, side by side with that, I'm in an industry that I can get killed incapacitated. What if I want to start a family? How's my wife going to take care of a landscaping company or anything in between? I was like, at least with real estate she could take it over, give a property manager, sell them off, make the money back.
Speaker 1:More importantly, how do I make money while I'm asleep at work? That was my biggest thing. I was like someone's living in my house. I make money every second of the day as long as they're staying in my house. That's the path that I took, in a short version, and Dan actually started. He got caught up in the 08 financial crisis, bought a house not too far from here in Owings Mills, got jammed up upside down and he needed cash to pay off some you know credit cards and a few other things and he started wholesaling and that's how we teamed up. We both had a similar interest of like. We knew the fire department, we loved it, but we knew somewhere deep down inside of us that that was not the long term solution to what we wanted to do.
Speaker 3:So yeah it. It's hard, uh, living on the you know the kind of the public service salary and trusting that um is going to take you to the end, especially now with you know we got through 2008, 2009. Now we have all this crazy inflation and those jobs teachers, firemen they didn't really get paid more to match the cost of living dude, I'm sure it was the same thing as a teacher.
Speaker 1:like I say it every time, man, it's like the unions and I don't make this political but the unions take your money and they sit there and we fight over three percent or two percent. I'm like guys, three percent's, like 25, a paycheck this is not going to change your life. Like, be financially secure. If life Be financially secure, if you guys become financially secure as a whole, we can then be a real union and then go fight for something that's worth it to us and get paid a real substantial, I mean inflation's what? 8%, 9%, 10%, if it's actually reported correctly, and these guys are fighting over a percent and a half 2%. It's funny to look back now. It's like I have no clue how I survived on that salary.
Speaker 2:So did you like, how big did you grow your landscaping? And then when you and Dan started working together, was he just wholesaling and did he reach out to you and say, hey, do you want to buy one of these wholesale deals? And then how did the partnership like really form at?
Speaker 1:that point. So we, we grew up together outside of Philadelphia. I mean, I've known his wife since I was about this big Um and uh. So basically what happened was, you know, I would work side jobs. It wasn't nothing formal, it was like I got four days off, I'm going to go make a dollar and we just sell jobs. I'd work for other guys, kind of play that game. And uh, I started buying some houses.
Speaker 1:Dan starts wholesaling. He's like actually, I went to a fire and we put the house out A couple months later. Dan's like hey, I got this house over on Herkimer Street, you want to buy it? I was like well, this is a full circle moment. We had it on fire a few weeks ago while I was at work. Yeah, we should 100 hundred percent I'm going to a hundred percent buy it. He made five grand. I bought it for five grand. It was a win-win. And uh, then after that he came back and we, he was doing some work for me and it was just, it was a real good relationship.
Speaker 1:And then one day he was like hey, man, I got these four houses. Um, I want to wholesale the whole package. Um, you know, let's, let's figure this out I want to wholesale three of them and I want to flip the last one. I was like, all right, let's do it. Well, I was selling some turnkey rentals at the time and two of them were turnkey rentals, so I sold those two. He wholesaled the other one down in Cherry Hill and then the last house in Pigtown. We fixed and flipped and at the time I mean, that was what third 2014 ish, you know, market wasn't heavy. We sold I think for 125 grand. We made six figures on the whole package and that was like cool. And then we went and did another one six months later and I was like yo, can you keep finding deals? He's like yep. And I was like, all right, I'll go find us money, you find us deals, let's go do this. And off we went and that was it, man.
Speaker 3:That was like the golden era of wholesaling too. Back then it was like not everybody was in it and it was like I felt like I started buying houses in 2016. And it's like it was hard to miss at that time. It's like basically anything you bought you could make something on. Now it's obviously tightened up a little bit.
Speaker 1:Yeah, well, I think technology has advanced a lot of people, You've got a lot more nationwide wholesalers and all that stuff. But even on top of that, everyone's like, oh dude, you knew exactly when to buy. I'm like, no, I just was dead goddamn broke. I didn't have a choice and I bought this house Because I wanted to buy a rental property first, before I ever did anything with Dan, and I made $500, $600 a month cashflow and I was like dude, that was like crack to me, dude, overtime shifts I was getting like 300 extra dollars in my paycheck. I was like, dude, one house just got me two overtime shifts that weren't even available and I was like, yo, I'm doing that again and that's really what set me off. But yeah, 100%, we hit the tailwinds, just right no-transcript.
Speaker 3:Well, it's interesting. You said about your job security, because a lot of people think about these public service jobs, the firemen, the teachers and stuff that they are recession-proof, depression-proof, whatever you want to say, and it seems like that wasn't the case. Like how does that work? Because during a financial crisis doesn't necessarily mean there's less fires, right? So how are they shutting down? Are they just overworking other firemen? Like how does that kind of work?
Speaker 1:So Baltimore and most big cities, if you guys really knew what happened behind closed doors is you're nothing more than a number, that's it right. And they just look at it and say, well, we can't afford it, so we're not hiring anybody. So then there's a shortage in personnel and they just start what they call rolling brownouts. And it happens in Philly, baltimore, detroit, you name it. It happens and basically it's just rolling brownouts. And if you lived in Federal Hill, you would never know that the firehouse on Light Street's closed down that day because you don't think about it, right. Or the person in Sandtown doesn't think that the firehouse on Lafayette Avenue shut down. They just know. If they call 911 shows up because we're firemen and we're idiots, right, and we would do it. So, yeah, you would think that job security is there.
Speaker 1:But here I am, I'm getting hired in 08, dan gets hired in 07, and they're talking about laying us off. And I'm like laying us off, like I just traded in everything, working 80 hours a week to have job security, and it's not there. And I think I tell people all the time is like our advancement in our real estate career is really a byproduct of them forcing our hands by not being over time, by not having career advancement, by not paying us more money. It was like you know what? You put me against the wall. I got to figure out how to secure a future. You hit it just right.
Speaker 1:I got hired when I was 25. Dan was like I guess he was 25 too by 30, everyone knows your wife wants to have kids and at the end of the world you're like how do I afford child care? It's like $65,000 fireman salary. You ain't paying that. I can barely afford my mortgage and I think they put your back against the wall and those that want to live in the system. It's the best job in the world.
Speaker 1:I didn't graduate. I didn't go to college. Dan didn't go to college. It's the best high school educated job I can find that pays well and it's fun and you don't need to think a lot Like you do, but you don't. I don't want to call it a mindless job, but you know what I mean. It's like you get to go to work and have fun, so it's a no-brainer right. But then, in the same sense, it's like if you really want more for your family and create legacy and create generational wealth and have opportunities. You know, like when I quit, my father-in-law got sick with cancer. He's since now passed. But when my wife called me up and you know she's like, well, I want to move back home and be with my dad, I'm like, well, this is why you invest in real estate.
Speaker 1:If I still had the job with the fire department, she would have been traveling up and down 95 every day to go see her father until he passed, you know which fire station were you located at? I was at 13 engine uh and 16 truck which is at McCullough and McMechen. So if you watch the riots, the CVS that was on fire, that's like literally our first do like we're right in, uh, right on the border of Bolton Hill, druid Hill, reservoir Hill, right there in the cut of all the rough area. Yeah, Two on Yep 100%.
Speaker 2:Nice. So you mentioned, when you guys had that four-package deal, that you decided to wholesale some, keep one, flip another. How did you determine back then which deals you were going to hold on to and which deals you would wholesale or flip?
Speaker 1:Yeah. Then it was just really like, hey, because Dan and I weren't really formalized as a business, I also still had the ability to find deals because, again, like you said, you could find a deal. All you had to do was turn the corner and someone else has got a deal. So I was like, well, why would I buy a turnkey rental off Dan if we can wholesale him and make 50 grand there and make another 50 grand on the flip or whatever the numbers were. It worked out to six figures and it was like you know what? It's a cash grab, and we decided to do it that way. Now what we do is once a month we sit down, everyone Dan myself, our two project managers we all sit down and we say what deals do we want to keep, what deals don't we want to keep? And we just continue to burn out the bottom 20% and refine the portfolio until it gets better and better and better. So it's a much more refined system. Then it was just cash dude. It's like how do I get cash?
Speaker 2:Yeah, so that 20% that you take off, that's not only new deals that you have in a pipeline, but it could be a deal that you had for six months or a year and you just decided that this deal is in cash flow and I'm going to try to get rid of it.
Speaker 1:Yeah, I'll be transparent and honest. We had this property on Frederick Avenue, right at the county line, basically in the city. It was a 47-unit apartment building Wanted to be in a headache with some legacy tenants. It was a foreclosure that was in bankruptcy from COVID, completely mismanaged. Did we own the thing? We wound up having a fire in it because of a tenant we were evicting and in 12 months we said you know what? That's it? It's gone, like it's just that operational headache. We couldn't see the path forward. It sat right on Frederick Avenue. It was just like you know what Cut our losses, let's get out.
Speaker 1:We're going to break even from our insurance and from selling it. We'll break dead, even Whatever, it's a loss, not a loss, but we didn't get to see it through. But in the same sense, you know what? Mentally we're in a better spot because we don't have that operational burden. It doesn't burden, you know like when I got employees showing up and they're getting threatened to be killed, we had a tenant try jumping one of our employees. I'm not putting my employees at risk like that anymore. Cut it, we're done. Keep it moving and that's. You know, it is what it is. So, yeah, it doesn't matter the time frame. Obviously you want to try to get over that 12 month mark.
Speaker 3:So you don't have to pay the government extra money so in the beginning you were buying single family houses and now there's there was some transition to multi-family and I know self-story. You're into the self-storage game a little bit. How did that transition happen and what did it look like? Why did you decide to do it?
Speaker 1:yeah, um, I would say, and you guys probably saw this, you know, if you got in 16, you saw you got you started to catch that rising price like it really went crazy, from like 18 to 19, in my professional opinion, you guys are. Yeah, then after covid yeah, you guys were pig town guys too. So, yeah, we were buying shells for 5 to,000 to $25,000. Next day they were $40,000, $50,000. I'm like well, wait, rent didn't, change value, didn't change.
Speaker 3:What are you guys doing? Yeah, I was buying houses on Patterson Park for like $30,000. But now shells are like $150,000.
Speaker 1:Yeah, and you're like, well, old the damn thing, but yeah, it's crazy, right. So, with that being said, it was like we just kept getting squeezed. But also, what we had was we started to build a track record. Guys, the firehouse. You know, yeah, it's a scam. It's a scam. You know, this section eight, shit. But you know they're giving you all the crap in the world and you're just like, okay, buddy, like it's working for me.
Speaker 1:But then a couple dudes are like, yo, dude, what are you doing? And then you got a couple other guys, like the guy I co-host my podcast with hey, what are you doing? What are you doing? How can we work together? I'm like, well, for $500 a month cash flow, there's really nothing to work together on. I'm not working for a little bit of money. And so, between the pricing and people wanting to start to figure out how to work with us, we said, all right, let's figure this out. And I would just sit north in Pensy where the CVS that was on fire. I would literally just sit on my phone three o'clock in the morning while we were on Medigron just looking at other people's OMS. How are they setting up deals? How are they doing this how are they making commercial deals work? Cause I didn't understand the syndication model raising capital. How are these guys making money?
Speaker 1:Um, um and you were still a fireman, still a fireman yeah, and it was just like there really wasn't much deal flow I get. I get bored very easily. I'm a, I'm like the okay, what are we doing? Next guy dan and ryan and my office is he's very much like stability. All right, we bought all this shit. How do we fix it? I'm like, well, no, we need to buy more shit, and then you guys can fix that too, like let's, you know. And so it just really was a natural progression of like, oh cool, 6,000 square foot industrial building came up on Asquith Street. The guy's willing to own or finance it. We only got to show up at 20 grand, let's do it. Or 50 grand, whatever it was Cool, let's do it.
Speaker 2:Was that your first one, your? Was that your first one? Your first multifamily or not multifamily, but a commercial deal?
Speaker 1:No, that was a commercial deal. That was like a true commercial deal. I think that was the first one we did. We did a couple, two units here and there.
Speaker 2:How did you underwrite something like that? Was it kind of just like a warehouse space?
Speaker 1:Yeah, you know it was a lot of reliance on a broker that we knew and I was like, all right, well, if I check every box, this seems to make sense. You know what, for the small financial risk, we'll try it out and if nothing else kind of like what I talked about with that Frederick Avenue property, that we just did nothing else We'll just turn around and sell it and not make a dollar. It is what it is.
Speaker 2:And was that already rented or did you have to find a tenant for that?
Speaker 1:No, so the guy was selling, he was moving his business. He used to like embroider shirts and stuff like that, Uh, like a lot of print type stuff. Like he did that stuff for the NBA combine. Um, Under Armour, sent him all this stuff and said, here, embroider all this for the NBA combine. We're like, oh, cool Businessman got talking to him or like, hey, we'll buy this warehouse that you own on the street.
Speaker 1:He owned two. He's like, yeah, I'll under finance it to you. And he was a military guy, he was in the Navy. So we just connected and I was like you know what? This guy's willing to work with us. I believe in our broker that he can find us a tenant. It's a little bit of cash that we have on hand. Let's try it out.
Speaker 1:And it was really just dipping our toe in. And it was also the first seven-unit apartment building we bought. It was like, well, we know how to do seven houses. Why can't I do seven apartments under one roof? And it was like, well, let's do this, let's do that, let's make sure all these things check out. I'm sure there's something we don't know, but let's just try it. And that's what we did and it just kind of as you started. You know that one seven units on arion park which is off like southwestern boulevard west. We put it under.
Speaker 1:Well, first off, we weren't the first buyer on it. Broker came back to us and said hey, the other guy bailed Do you want to buy it? We said, sure, he calls us up three weeks before closing. Me and Dan still got the jitters. By the way, we have 100 houses by now. We're sweating a seven-unit building and the guy's like yo listen, someone's willing to pay you $75,000. It was $75,000 to get out of this contract and we said you know what? It's a pretty good vote of confidence. No, we're good, we're going to buy it. Calls us back a couple weeks later increase the offer. We're like no, we're going to keep it. We just have a good feeling. And that's really what got us to the next level.
Speaker 2:Us to the next level, which is dipping the toe dipping the toe, dipping the toe, and then you start to figure it out, you know, and how are you finding the multifamily and commercial deals? Was that through just brokers, or was it through certain different websites?
Speaker 1:Yeah me, I'm a, I'm a, I'm a broker network guy. Um, but yeah, I would always look at Crexie, costar, all the all the sites, all that stuff.
Speaker 3:Loopnet is CoStar's front door Um loop nets, all that stuff.
Speaker 1:Loop net is co-stars front door, um, but all that's fun stuff, right? You know, I look all the time. Just I want to see what deals look like. I want to understand it.
Speaker 3:You guys can underwrite anyone can underwrite a single family house like that in two seconds because you can go on zillow, you can go that that's kind of what have kept me like I've done a lot of single family stuff nick owns owns a hundred single family houses Like but the the breakthrough into that new space. It's scary when you've just done it this way, the single family way, so long and it's like it's making money. It's hard to for me anyway, it's hard to like mentally. Okay, now I got to learn a new underwriting task, I got to figure out how to underwrite these buildings and then the whole like refinance game where, like my 30 year mortg I'll get back to the broker.
Speaker 1:Don't let me forget the broker, why I deal with brokers? Well, what I would say is and I heard this at an event that I was at and I've never let it go is like, dude, what took you to go from zero to 5 million, and 5 million to 10 million and 10 million to 20 million? It's all different and most people are too afraid to blow their business up Like, right, we got 100 houses. It would have been easy to just say collect, collect, collect, collect. You guys mentioned Mark Owen, sean Magner, a couple other guys that have been on your podcast. It's like it'd just be easy to collect and just keep collecting the houses.
Speaker 1:It was so much harder to blow our business up and go do industrial and multifamily. Dude, the first deal, like the first real deal that I raised a million bucks for, you know, mind you, we have these small commercial. I'm literally sweating bullets trying to get people to answer. I could have just gave up then. So you know what this deal isn't for us. Let's just get out. We'll stay in the single family game.
Speaker 1:But taking those leaps from what took you to go from zero to whatever number you want to put there I say zero to five is a completely different skill set than it takes you to go from five to ten and for you to blow your business up I don't want to say it like that but to go look at new assets.
Speaker 1:You got to go back to the drawing board and nobody wants to go back because it gives you the agita of when you first did a deal. Am I doing everything right? I'm scared and it's a really uncomfortable place to be because you're in a comfortable spot now. But you got to get uncomfortable again and say, well, it's just an extra zero. I got to take an extra second to underwrite this deal and once I pick this up I'll figure out how to get back to how I am today with single family stuff, and that's really how we look at it. It took a lot of work to get to that point, but now we can look at industrial deals or commercial deals in general and say, all right, this smells like a deal. I want to take the next steps.
Speaker 3:Yeah. Do you find that in that space there's more competition with like more? So I underwrote a deal once this was like a couple of years ago. I had no business getting involved in it. It was like 24 units. This was before this was like a couple of years into into it and a company came and bought it for like I don't know 300 grand more than what I thought I could buy it for at the top line and come to find out that they're, you know, big company, institutional kind of investors is. Do you find that that space has more of that kind of competition?
Speaker 1:Sure, you don't know. You don't know other people's capital stack right, Like when you're when you're doing single family. The barrier to entry is so easy. But you can also bet. I can look at so-and-so and say, well, I know, they only got a hundred grand in their. Well, like we're all bidding. And it's really easy also to say, well, I can go on any, whatever, I'm just going to use Zillow, let's pick on Zillow. I can go on Zillow and figure out the value immediately. Or MLS, I can immediately figure out the value. So you can only pay so much for this. Because you don't have an unlimited well of capital. You step into the commercial space. All of a sudden you're playing against Blackstone, private equity firms, publicly traded companies that have unlimited sources of capital that could potentially be way cheaper than you, right?
Speaker 3:And they could afford to lose money for X amount of years.
Speaker 1:They could be a legacy wealth or a sovereign fund or whatever they call that, where they're investing money from Saudi Arabia and 5% return is insanely high for them, where we're looking for 20% plus, so to say it can be more competition. But the competition is also harder because you don't know what other people are looking for. So the way again to go back to your question is I work at the broker network because in the commercial world the certainty that a deal gets done is exponentially more important. So I'm pretty good at building the relationship with the brokers and find something in common. We have good conversation.
Speaker 1:Next, you know they're bringing me off-market deals on the way down. Here I'm working on a somewhat off-on-market deal that's got a massive environmental issue. But the broker knows that we're willing to take the risk. He's going to go advocate for me and he knows I need a massive discount on it because he wants to get the money right. If I'm dealing with the seller, they're like yeah, I don't care if it's got an environmental problem, I know that I can sell it for X, y and Z, I'll just fix it and never fix it. Now he's got a broker telling him yo dude, you're never going to fix this. This thing has got a massive environmental issue. Why don't you just sell it to Ian Because he wants his fee?
Speaker 1:Right, how I view it. And it's like okay, and I also like to find the brokers that are the same age, because I build relationships when you start and stop. That's why I never really liked the wholesaling game. Great cash, you start and stop the relationship rapport building every single time. Hey, so-and-so seller, my name's Ian and I have all these houses and I'm a fireman, whereas I build a relationship with that broker and it's like no, I like Ian, let me send him a deal. Let me send him a deal. Actually, now they're all starting to come in before they hit the market. Now you're kind of at a competitive advantage.
Speaker 3:I also feel like the brokers in that space are better than because you go into the single family space, especially in the lower end. All the realtors are just numbskulls for the most part, that are listing these properties they don't know, they've never been an investor, they've never invested in anything and it's hard to work with them in a lot of senses. But I feel like in the commercial space the brokers are going to be just better because there's less of them, there's less, you know.
Speaker 1:Well, it's just sophistication of buyer right. Well, let's go backwards. Barrier to entry for a real estate agent in the single family world is got my license. What do I do next? Right In the commercial world? They've taken the time, they've learned the space, they've continued to grind away to figure out what you know.
Speaker 3:They probably worked under another broker for a long time.
Speaker 1:On top of that, the sophistication of the buyer, the questions that they ask, right Like we're in the process of selling some of our stuff, and just the details that we had to go through to say here's the story, this is what we've done, here's the rent roll, here's the environmentals, here's everything else. You know they're looking for the correct information because again it's feast or famine over there. They want to get deals done and there's no pressure to buy in the commercial space. People are always moving. People have the American dream. They want to buy another house, like it's still the American dream, no matter what the news tells you. People want to own property and I think that's the big difference. There's a motivation factor because I watch them Like when the market changed a little bit. They're calling me every day hey, what are you buying? Yo offer owner financing, yo do this. They're trying to get deals done and get them to the closing table.
Speaker 2:Can you talk a little bit about the difference between financing a single family deal to going to the commercial multifamily or just a commercial deal?
Speaker 1:Yeah, I don't know that there's a massive difference. I think there's probably some interesting loan products that exist in the single family space, like the DSCR loans and some other stuff like that that people have executed on and that you get 30-year terms on and you never have to guess what your rate's going to change to and if you're fiscally responsible enough, you'll pay it off in 30 years and you're done. In our space, depending what lender you have, you might have a five-year rate adjustment, so every five years a rate just adjusts on you, and now you went from three percent to seven percent today, or you know that's another kind of scary thing that just happened, probably to a lot of people, right, and did that happen to you, or do you know people that that happened to?
Speaker 3:like you were locked in at a four percent rate and then we had this crazy rate hike and people were like now the cause that what happens in the commercial space, for the, for the listeners, like as soon as the rates go up, the value of the buildings go down because there's less NOI, there's less profit.
Speaker 1:So at a refi table you might be asked to come to the table with a significant amount of money People are trying to coin it as the cash in refi, which I think is a horrible terminology to protect bad assets, but it is what it is. So the cash in refi is a real thing right now. But, yeah, as rates adjust, you know. So rate adjustments, balloons, uh, banks can call you don't meet certain metrics. If you have certain covenants, they might say, hey, your rent's not where you need it to be. We're calling this loan Refinance, we don't care, get us out right. So there is that. There is also again, to go back to the purchasing and what you just talked about of yeah, if rates go up, really what people are looking at is a function, or a capitalization rate is really just a function of the debt. So if debt's at 6.5%, people are looking to buy stuff in the 8.5 range. If it's at 4%, they're looking to buy it at the 6%. Or if they're really frothy funds and they're buying really really nice stuff, they might say, ok, debt's at 4%, I'll buy it for 4% because we're paying cash, because I could just loan my money out or I could own the asset in a tax-advantaged way. So there is a lot of differences in the loans and I would say but the other side, the benefits.
Speaker 1:I feel like I'm talking about negatives here. Let's talk about the benefits. I could get a million dollars. I can make one call right now and get a million dollars easier than you can for your $100,000 house. Right, like, done, like I could, we use a life insurance company and two, you know, one phone call, some information. I got a term sheet off.
Speaker 1:We go, and I think that's way more powerful because they want to do the bigger assets and the work that it takes for me to do that $150,000 deal and this is what I found out from doing more commercial deals is doing $150,000 deal or doing a $15 million deal. It takes the same amount of work, right, that might be a little exaggerated but in the grand scheme of things I only have to do. Let's say it's a million and a half. Let's use a realistic number. That's the same as doing 10 houses. Who wants to be in and out of 10 deals when I can do one deal? I can have my whole team on one deal, concentrate on 30 apartment units or whatever it is, renovating, all of them under one roof. One capital raise, one lender talk, one closing. It's not 10 in and outs, not a ton of transactions and that's what we like better about the commercial space way more methodical and you can take your time and there's a clearer path to what you want to do. It's a little more predictable.
Speaker 2:So, as far as the commercial financing and I know you said you use life insurance, but I'm assuming you started with like small local banks and did they have to underwrite you as an individual even though it was a larger deal?
Speaker 1:Yeah. So and the way we did it was it was just a natural progression. We started with hard money lenders on single family houses. Then we said we got to refinance and we tried every dumb loan product that's out there. And finally we went to a local bank here that's based out of York and they changed our careers because we didn't really know what we were doing. But they gave us a guidance line of credit and we're like, oh cool, we got $2 million to spend. Let's go buy a bunch of properties and do it. So we were borrowing from hard money lenders and then we would go to them and say refinance it right onto our guidance line. But that's where we learned how to fill out a personal financial statement. That's where we learned how to.
Speaker 1:We really figured out that we needed to be really good at bookkeeping and printing out balance sheets and profit and loss statements and being able to produce the reports that they want. Then what that did was it took us to the next level. So then when we bought that seven unit apartment building, we said, hey, same bank, we want to buy the seven unit apartment building. Cool, just get us the rent roll. Do a survey, do an environmental. I only had to take three extra steps that I wasn't used to doing. We buy that because they already had all of our data. I was like okay.
Speaker 1:So then I talked to this life insurance company. I'm sweating bullets, I'm like dude, I don't know what to do. He's like well, just send me a PFS. I was like, oh shit, I already did that before. Here you go, man. He's like cool, just put it on my sheet. Do X, y and Z. You're good to go. All right. Well, I know how to do a personal financial statement. I had all my K-1s, I had all of people. This is why I like doing podcasts, because I talk a lot.
Speaker 3:So you can tell me to shut up.
Speaker 1:Sorry, I was just thinking about that I'm like man, I'm talking a lot, but that's why I'm here. A lot of people aren't willing. I want a non-recourse loan. I'm like yo, bro, non-recourse loan on like a $200,000 house. Like, what are you doing? Are you in or are you out? And I think that allowed us again. It was like, hey, man, we need recourse on the first deal. Okay, well, I'll do that Again, building relationship. The loan broker, the debt broker, is the same age as us. Right, His kids are the same age. It's like, yep, I'm going to build this relationship. Yeah, we'll take that risk because we like this deal. We're all, I don't know any better. I'm in, let's do it Now. Finally, after $20 million of loans, he's like, hey, man, I think the next one we can do non-recourse. All right, you're finally talking my language. That's been after financing all my single family stuff, all of our apartment stuff, all of our storage stuff. I finally got to this point where we're having a conversation about non-recourse debt.
Speaker 1:And that's with the same bank from York. No, this is with the life insurance company. Okay, so what the problem became was the banks you'll start to see is they have like lending limits, they want your deposits, they want all this crap. And it was like, as we started with the commercial space, it's easier to buy out of state. You know, we were buying in West Virginia, we were buying in Maryland. Next, you know, we started buying storage in Alabama, louisiana, mississippi.
Speaker 1:I was like dude, I'm all over this country. I need a bank that's with me everywhere and I want service. Um, and you know, some of these smaller banks feed to death on some of the dumb stuff and it's like, hey, thanks for the loans, but you can't finance me in Alabama. Now this small bank in Alabama wants my, my relationship deposits and I'm like well, I'm not having bank accounts all across this country. And that was the benefit of going with a debt broker that's a life insurance company, because that allowed us to go to Chase Bank, have a national presence, the best online platform there is, because they are the giant, they spend a ton of money on tech. It's really easy to use their systems. And then I got a debt broker who's like I don't want your deposits, I want your business, I don't care about anything else because the life insurance company does not care about our deposit relationship. And that's been the benefits of graduating to that level.
Speaker 2:So is it the life? Because I'm not super familiar with that. So the life insurance policy is able to fund the deals.
Speaker 3:No so they're a company that just sells money.
Speaker 1:Let's use Nationwide and you buy your life insurance from them. You buy all your insurance from them, right, and I'm not even a client, right, you don't even have to be a client. But they have all their subscribers that are buying life insurance and all this other stuff. All they're doing is taking that capital and reinvesting it into real estate. They're lending, they're, they're PE, they're doing all the stuff that we all do to get exponential returns to outperform their losses.
Speaker 1:Gotcha, have you ever read uh, warren buffett's book? Uh, what's it called the snowball effect or something he talks about why he bought geico? And it was specifically for the float capital to have it to be able to invest into other publicly traded companies to gain control. Because he's like, well, if I can gain control, cause he's like, well, if I can gain control, I can get them to outperform my payouts for my uh, for Geico, and that's really how they built their business. Um, so it's the same thing that the insurance company that we use, whatever I don't even know what type of insurance they sell, honestly, um, whatever type of insurance they sell, and they lend us money, basically at anywhere from 200 to 250 basis points. Over what prime?
Speaker 3:is.
Speaker 1:Not even prime what the 3, 5, 7, or 10-year treasury is, because their investment thesis is if I don't loan this money out and don't take this risk, I can just buy T-bills right, and I can get these returns. But for this little bit of risk I want an extra couple hundredbills right, and I can get these returns. But for this little bit of risk I want an extra couple hundred basis points to take on this risk. But presumably they're in a really safe asset, right?
Speaker 1:First position mortgage and all these other things that allow them to do that, and they get exponential returns that outweigh their losses, and that's how they stay in business.
Speaker 2:So they still do like the five-year arms that local banks will do.
Speaker 1:Yeah, so for them they still do like the five-year arms that local banks will do yeah, so for them they actually do five-year. They do rate adjustments. So if I buy a 10-year loan, they'll finance it for 20 years and they'll just readjust my mortgage once at the 10-year mark. If I get a three-year, it's for 20 years. They'll readjust it seven times and that's how it works. So the nice thing is they don't actually call the loan where some of these banks are like yeah. So the nice thing is they don't actually call the loan where some of these banks are like yeah, I'll finance you for five years, but in year five you got to get out of here.
Speaker 1:These guys hold the debt. It's on their books for that 25 or 30-year term and we roll with them. And it's been good because again it takes that layer of. I don't have to guess where I have to go. I get to decide when I want to go. If rates come down or if we created value, I want to liquidate. All the same principles apply. It's just really allocating and managing capital at that point.
Speaker 3:So you obviously had to learn the single family game, and then the industrial commercial multifamily. Now you had employees with you the whole time. What was? Did you have the same employees or? And did you have to? Did they have to go through that same like learning?
Speaker 1:curve and what did that kind of look like? Yeah, so hire number one is still with us, ryan Tucker. He runs our operation. I call him our project manager, cause I'm not comfortable saying COO or some like horrible corporate term, but he runs our operation and as we started getting into the commercial space it was like, all right, he learned. All right, the apartment building. We're going to do X, y and Z and we're starting as we did apartments. Okay, I get it, industrial, I get it.
Speaker 1:He might not get every single in and out, which he does, but not everyone's like every single in and out. It's all the same stuff. You're providing clean white boxes or you're providing clean apartment units that are ready for rent. Sometimes we're adjusting the renovations, sometimes we're not, and it really comes down to managing vacancies, debt collection and everything else, just like a single family portfolio. It's just that scale and it might be at one site Raquel in our office. She sits at White House, manor Apartments that we own over in Northeast and she manages all the tenants for the whole portfolio. Right, she manages all the tenants from the residential portfolio. She manages all the debt collections, all the evictions. She happens to be sitting there, so she handles new leads that come in that want to move in. So everybody has a different place and learns a different piece of the business and everyone just kind of goes to where they're comfortable. And, luckily for us, everyone that kind of goes to where they're comfortable works out for us because we've got all the different facets covered.
Speaker 2:So at what point did you hire? What was the guy's name? Ryan? You said.
Speaker 1:Ryan, yeah.
Speaker 2:At what point did you hire him? I'm assuming you hired him in the single family when you were just in the single family space. How many units did you have? How did you know that it was the right time to hire him?
Speaker 1:Great question. I think we were still flipping houses, so I don't know that. We had a big rental portfolio, maybe 15, 20 houses we were actively fixing and flipping. It had to be sometime between 2016 and 2017. And, dude, we were hiring a guy that we were going to pay as much as we were making in the fire department and I was just like I don't know man, but he was working for himself and he wanted some stability.
Speaker 3:So that's hard, because I did the same thing. I was teaching, I transitioned from full time to like four days a week, and then I was three days a week, and then I hired an assistant who I was basically paying the exact amount of money that I was making, yeah, at the school, and the only difference is that I had health benefits at that time like I was basically net. You know we were net zero with health benefits yeah and that was like a scary moment.
Speaker 3:I'm like, okay, I'm giving away all the money and like then I'm like, well, what the fuck am I doing working anymore? Like I need to be out.
Speaker 1:I need to be out there yeah, I got a question for that. But yeah, that was the same thing. It was like, dude, we didn't know he was asking us all kinds of questions, like I don't know man, like I just know we're hiring you and you want to work with us, we want to work with you. This is, this is exciting. And then it was just a massive learning curve. It it was like, hey, we need to get him a vehicle. Hey, we don't know what the next step is, because he always worked somewhere where he was working towards to get to the top, versus saying, hey, man, you are at the top, you're one of us and you need to think like us and help us build the systems.
Speaker 1:And over time, that all naturally happened and he's a good leader of the guys and as we grow, our goal is to continue to reward him and work towards getting equity in deals and all those types of fun things, and that's been the advantage of doing the bigger deals. But to your point of hiring someone, it was like we hired him, we were paying him as much as we were making and it was like man, this is my question to you the day you quit, the day we quit, our business exponentially grew and I think Ryan knew that it was like, dude, you guys got to get out, you got to get out, you got to get out, and then when we got out we exploded. But I think it was easy for him to see from inside the business out, where we couldn't see it as much from the outside in almost.
Speaker 2:So when you got out, where was your focus?
Speaker 1:When we got out, we had just bought the 76-unit apartment building over there in the Northeast. I just refinanced it. We were focused on self-storage and multifamily. We have some stuff out in West Virginia and we kind of hit an explosion in the self-storage space and was actively concentrating on that and that's really what we concentrated on. And I concentrated on raising capital and growth because the day I quit it was like a vote of confidence. People like, oh shit, you quit. Like nobody quits the same. Teaching, nobody quits fire department, that's the same thing that happened.
Speaker 3:People started to. Everybody questioned it in the beginning, not until I quit. And then they were like, oh, you quit. Like they saw it at the time like we had just bought a house and and I quit and I was like and I was like, yeah, at that time also, like you work some, I felt like I was working so much harder because there was no guarantee of the next paycheck. So not only do I have now 30 hours more per week to dedicate to the business, I'm also fucked if this doesn't work out.
Speaker 3:That's kind of what I think scaled us up. The one thing that you did that I kind of envy and the new businesses that we're starting I'm trying to do that is bringing the top in first. Instead, like I hired an assistant who was basically just assisting me with the tasks that I couldn't get done admin, that kind of stuff. But bringing in somebody as like an operator is what we actually interviewed Brandon Turner on our show a couple last year, two years ago, and he had that same mindset. He's like bring in somebody if you can't pay him enough. Give them equity, show them the dream, and then that will propel that business so much faster than trying to build from the bottom.
Speaker 1:Yeah, and I don't know that we intentionally did that, but that was our comfort level. We're construction guys, we enjoy construction. It was like, all right, ryan can relieve some construction, we can communicate with Ryan, the construction that we want. He already had a good head on his shoulders that knew what we wanted. But I think that hire became easier for us.
Speaker 1:If you wanted me to hire an admin office person at that time I couldn't even begin to tell you how to bookkeep, let alone how do I even get through a contract, because at that time it was like yep, take it. Yep, take it when you find it. I couldn't tell people where I was financing it or how I was doing. I couldn't direct an admin to do that. So for us we lucked out and Ryan became the top and it was. It was clear and obvious um of how that was going to be. But I would. I would tend to agree that. You know, hiring from the top down is an interesting concept, but it's also scary because you got to go put out a lot more money. Uh, execute a vision, because then the top needs people under them at some point.
Speaker 3:And hope that they're the leader that they portray to be. And that is scary. When we started hiring we have a construction company, property management company, kind of like fully vertically integrated we started hiring upper level people. That's. The thing too is that some of them don't. They work themselves very well, but then you put them on a team or in charge of a team and they don't do as well managing the team. So then you got to make adjustments and you're paying this person, you know, six figures or close to six figures, and they're not doing what you intended them to be doing.
Speaker 1:Yeah, we had a situation like that on the storage side when we fired the property managers. Um, we were using third party and I hired, I hired from the top down. Uh, just basically step in and say we were paying property manager x, save a few bucks, let me hire someone to step in and and hire that lead role. And it just it wasn't what it was promised, um, and I was like, oh well, this isn't gonna work, um, and we're like, all right, let's go back and start over. Let's promote from within People that have been in the company on the storage side for a while. Let's promote from within and have them graduate on that side. So that's been interesting. That was a fail.
Speaker 1:But here's the other thing. The maturity level of hiring and firing has, like our timeline of being able to put up with someone like that isn't working out has gone down, it's shortened and, like Gary Vee talks about, well, hire and fire quicker. And I'm like, how do you do that? Like that's scary as shit. Now it's like, oh man, I hired, this ain't working out. But I think we got a really good leadership learning lesson from the fire department, because you saw the chiefs at work, the lieutenants, the captains and you really got to see what real leaders are from that side of things. That, I think, translate onto this side of how to motivate, how to lead, how to get people to do what you need to do without being a dick.
Speaker 1:Now, look, there's a time to be a dick. Hey, we're in combat, or this? This place is on fire. Now is not the time to question me. Right, this is what's going down, okay? Well, when there's a fire burning in our business sometimes okay, I don't like to do this, but we're the boss here we go. Nine times out of ten that it never happens because ryan's already got the solution, because he thinks, just like us on the same side, is like there's plenty of time to talk about how should we do it. Let's talk about this, let's create the plan, let's execute.
Speaker 1:Yeah, man, because we view all of our employees as entrepreneurs. I don't care if you're I don't care entrepreneurs. I don't care if you're the maintenance guy my intern that's been on his phone the whole time as we're sitting here recording or you're the top level guy. In the end, you work on your own schedule, you create your own things, you do your own things. I'm not gonna micromanage you now, if something gets screwed up like I, come in and hey man, you missed a post on monday, bro, you let me down what's up, right? It's just that simple comment of like, dude, you're, we're on the same team here and that's what's important to me of knowing that they have the autonomy and the bandwidth to do what they want. I don't want to be micromanaged. I sure as shit ain't gonna micromanage right.
Speaker 3:Yeah, that and I think that's a big thing too is just keeping people motivated around you, whether they're employees, people on your team, the brokers that you're working with. Like keeping them motivated to keep the dream alive. I think that's important. I like having we do team barbecues and stuff like that. I think that's for culture.
Speaker 1:We talk about that. It's hard for our storage side of things to build the culture to understand. Like here in Baltimore something happens, boom, we're done, it's fixed On the storage side of things. It's third party, not third party, but it's a far. They don't understand our culture of like yo, there's something burning, go figure it out, like get it done. You don't like that tenant kick them out like just be done with it. I don't hear about it. It's done. So really trying to. So we have, uh, two of our employees here in maryland that oversee that operation that have been trying to express, hey, this doesn't get done, this is what's going to happen.
Speaker 3:Like we let someone go today.
Speaker 1:Hey man, if you're not going to do this, then you don't need to work here anymore, and they're able. Oh, I don't. Oh, you know what? Let me, let me go fix that, you know. So trying to. Culture is big and it's hard to express across, and I think it's easier to build from a nucleus in and out than it is to start out and work your way back in.
Speaker 3:So yeah, I could imagine it's harder when you're spread out like that. So so we blew past this, but you wrote a book. This was way back in your single family days. What did that process look like? I still use some of the rules that I read in that book no dishwashers, the ceiling fans. There are things that I took into my head and we focus. Our own portfolio right now is mainly high-end stuff like canton fells fed like four bedrooms. You know people just graduate hopkins, that kind of thing. But in any of the subsidized stuff that we're doing on the construction and property manager side, I still follow all of those rules. What made you write the book?
Speaker 1:yeah, you know, a lot of it was just at that time traveling around hitting the old circuit and go drinking with the boys, hitting all the RIA meetings and whatever else was going on at that time. I just see a lot of people you know how you doing, how you doing, how you doing Guys at work, how you doing it, and I was just like you know what. I'm going to put all this info in a book. You know I can't't happen, right, but in the same sense I just it's just good information, it's good credibility, right. So I I can't say that I physically wrote the book, but I did something like this. I set up cameras. I just talk into the camera. Here's every presentation I've ever done, here's everything I believe in, here's every podcast. And I found a ghostwriter. I gave it to her. She wrote it. I read it. I said yo, this does not sound like me. I need it to be simple, like simpleton yeah.
Speaker 1:I'm talking and she's like no problem. A few edits. I was like, all right, that sounds much better, check the information. And we produced the book. But then, you know, the book became well as it became a marketing thing. It became a source of credibility. You know, probably at the time if you had your show, you're like who is this cat? Like whatever I'm like yo, I wrote this book. He'd be like oh yeah, dude, like let me have you on.
Speaker 1:Or for capital investors, it's great. Like you sit down and talk to somebody, you're telling about everything that you've done and they're like yeah, right, bro, and then they go on to Amazon, type in your name, and the first thing that comes up is your here. It's like all right, it's just a credibility piece and the whole stack of things that you know. Do I need that? No, do I enjoy giving back and helping people that want to get started? Sure, I read a book that helped me get started. I had someone show me the way and I just think it's the best way to share information, um, without having to get on the phone with someone every single day, because if you wanted to, I could just get my phone number out right now and never be able to get off the phone and help people every single day, but in this way we can help a lot more people than just one person that I'm talking to at that time.
Speaker 2:Are most of your single family now Section 8 properties.
Speaker 1:Yeah, most of them are still subsidized. Just kind of what we've done as things are starting to turn over. The subsidized game is not keeping up with some of the market rents. We've had some good luck in certain areas with cash tenants that have gone better and we never did cash until we bought the apartment buildings, the seven unit and then the 76 unit. We had never done cash tenants until then. It was very, very far and few between. I bet you I only had two tenants out of 100 on the books. Now I could say we're probably more like well, don't include the apartments on the single family size, probably 75, 25, 75% still subsidized. But we're more active to the market to say, hey, first come, first serve.
Speaker 1:I mean 2014 to 18 subsidized outperformed cash tenants. I can't say that's true today In certain areas, yeah, yeah, in certain areas. And until the government catches up on some of this inflation stuff that's going on, they're going to have a problem and at a certain point people aren't going to accept the vouchers because they don't outweigh what what you're paying, uh, for the cost of the properties nowadays.
Speaker 2:So what are you seeing in pigtown right now?
Speaker 1:uh, I mean for well, this is a prime example, right, like you could probably go rent a two-bedroom uh house down there right now, two to three bedrooms. Right, you're probably getting anywhere like 15 16. I've seen stuff upwards of 1700 on the lower side of Washington Boulevard and section eight, still in that mid 13 to mid 1400 range and it's like, well, I want to take on the risk and the headache right now when I can get a decent cash tenant to do that. I'm like, yeah, you know, so we waver back and forth. Especially we own some stuff down on that lower side of Washington Boulevard that heads towards Federal Hill that it's like I'd rather get a cash in and, honestly, some of the comps down there.
Speaker 1:You know we're into these houses for under 120 grand and you know stuff selling 220 plus and you're just like stuff on Washington Boulevard is selling at 220 plus. You're just sitting there going crazy. You know what. Maybe now is a great time to exit, I don't know. Uh, so we're kind of taking on a case-by-case basis yeah, that, um, that pig town area is is funny.
Speaker 3:It's like one block in the one direction you're. I know nick loved you a lot over there. I've had great luck and then I've had terrible luck. Like you get up not. Uh, I did one. We had I forget what I think 1200 block of washington. It was tough. Yeah, I think it was broken into three times. We had toilets stolen out like toilets that were. I did one we had I forget what I think 1,200 block of Washington. It was tough. I think it was broken into three times. We had toilets stolen out like toilets that were installed, like stolen out of the house, like everything just stripped down like two or three times. I'm like God damn, this is crazy man. But then you go up, like what? Four blocks and it's like you can sell a house that's 300 grand.
Speaker 1:Yep, if, and it's like you can sell a house it's 300 grand. Yep, yeah, if you go, if you go to the bottom side, going towards the water, going towards federal hill, price is actually it's the first house we ever flipped was, uh, 11, 12 scott. I'm gonna, yeah, 11, 12 scott street, because then we did 11, 12 steelton. It's crazy that both numbers worked out the same. But anyway, 11, 12 scott street was the first house we ever flipped. And back then I mean back, mean back then I sound like I'm old now, but 2014,. I guess it's 10 years ago we sold that thing for $129,000. I mean jumping for joy. I bet you that thing's worth every bit of $229,000, $230,000.
Speaker 3:Right now I have a 1136 Steelton. It's over in Dundalk city side of Dundalk. Yeah, they were Dundalk city side of.
Speaker 1:Dundalk yeah, yep, they were the first two flips we did and it was funny. I was like damn, how did we get 11-12 again? That's crazy and off we went. But yeah, and that same thing. I bet you, if you look at values over there, they're climbing, values are climbing and I think Warren Buffett talks about it, he cash flow from rent or appreciation, or equity. I mean, when we first started we're talking about self-storage, multifamily, all this crazy stuff that we're talking about. When I first started to go back to the core root of things, of why you should get started, I said, if I buy a house and it's worth $150,000 and I pay my mortgage off and it's still worth $150,000, someone paid me to pay the mortgage off. I cash flowed the whole time and now I got $150,000 savings account that I didn't have to contribute to. That's how this whole thing started. That's it, that simple mindset of that, and that's how we went.
Speaker 3:So one more thing about the book and I'll put it down, the book for you what was the original cost for you to get the Ghostwriter record yourself? And then, what did it return? Because I always talk about like the podcast, for example. Like this podcast doesn't directly make us money, but it does the. It's the living resume, it's on youtube, you know. So it's kind of a loss leader. It's like the costco chicken, I don't know. You know they lose like a million millions of dollars on chicken every year or whatever. Is that what the book was for you? Did you make any money selling the book?
Speaker 1:I mean we made a few bucks. You know we did some consulting here and there for a few people. We thought we wanted to go that route. You know, it's just like I don't know why real estate's like this was a guy, you have some success. Do you want to coach? Oh, let me try this out. I don't want to coach. It's not really for me. I don't want someone's success on my shoulders. I'll consult you. We're gonna have a conversation around it. Um, but yeah, I mean it cost us a few grand to write. I mean, dude, with the va nowadays shit canva you probably go on there and make a book, uh cover in about two seconds. Um, and the ghostwriter was the hardest part. I think I spent about 2 500 bucks to have her write it and revise it.
Speaker 3:Oh damn, it's not that bad. I thought it was going to be a lot more.
Speaker 1:I went on. I found some ghostwriting VA website. This lady was up in Wisconsin or Michigan or somewhere up there.
Speaker 3:Now with AI, it's probably even easier yeah.
Speaker 1:I'm sure you could write a book in about two seconds on AI, but that's all we did and especially if you guys are doing these all the time, you probably pull your transcripts and probably turn it into a book. But I just gave it to her. We had a conversation around it. She loved the idea and she wrote it. And what I would say is the return. Sure, there was a cash value return. Did it outpace what I wanted to do? Absolutely not, because I don't know that. I took it seriously enough to turn it into a whole vertical. It into a whole vertical.
Speaker 1:But the credibility piece, the living resume, like you talk about everything in between, the deal flow that it brought the people that it introduces me to, is literally priceless. I cannot put a monetary value on it. I'll give you a prime example. The book led me into someone to come and consult with us who paid us 15 grand and then they turned into a $250,000 investor when they said you know what? This book sounded great, this consulting class sounded great. The few properties I have are not working for me. You know what? Let me just give you cash and that's it. So that's again priceless and you can't put a value on that for the exponential return that'll not only get us but get the person who invested with us yeah, that's, that's great, man.
Speaker 3:Well, ian, I don't have anything else for you today. Man, we appreciate you coming out.
Speaker 2:Two more questions, two more questions, okay so your your employee ryan, just to get an understanding. So does he just handle primarily managing maybe turnovers in the single family space or what is his job?
Speaker 1:He runs the whole operation now. Everyone reports to him. So our maintenance guys report to him. And well, raquel, basically our office admin, takes in the service calls. He manages those guys on that side of the house, on the storage side. The lead over there, andrew and Dawn. They report back to Ryan. He manages all the payroll. He keeps an eye on all the debt collections. The lead over there, andrew and Don. They report back to Ryan. He manages all the payroll. He keeps an eye on all the debt collections, all the evictions. Dan's doing it. From accounting standpoint it's kind of like a checks and balances hey, did you see this tenant Get rid of them? Let's do this. He's helping move the pieces.
Speaker 1:He's an integral part of the whole operation. He's in the numbers, he's in the know, he knows a lot of people, he understands the markets. So it's been real fun to watch him grow, spread his wings and really, just honestly because it was kind of a fight at the beginning you were asking this earlier was like hiring from the top down and we didn't realize we were hiring from the top down. He's like yo, give me more, give me more, give me more, me more. Like I don't know, but he wanted it, because he wanted to be in control, because he wants to help the company grow. He's always big on how does the company grow and the fact that he's in all the information, like he's in. You know, sean, who's here. You know from the digital marketing side of things. He's like yo, sean, what are you doing? I notice your payroll every week like what are you actually doing around here? Let me see video. He's even in that and it doesn't even involve him, so he's very in tune with what's going on.
Speaker 3:Awesome, you got one more, I do have one more.
Speaker 2:I don't want to keep it too long. Do you have any properties in Pigtown that you're selling?
Speaker 1:It's always a conversation. We can talk about this or I'm in alright, guys.
Speaker 3:Well, ian, again, thank you for coming down. You came all the way from Philly today yeah, came down from Philadelphia. It was well worth it yeah, I thought you were Maryland local, so I appreciate you coming down here, man yeah, man until next time, guys. Our next event is it is. July 18th. Be there, alright, guys. Thank you.
