The Hidden TRUTH About Rental Properties
Published on: December 4 2022 by Hayden Bowles
The Hidden TRUTH About Rental Properties
Table of Contents
The Hidden TRUTH About Rental Properties
| startTime | durationTime | text |
| 00:00:00 | 00:00:04 | so i recently had to evict tenants who |
| 00:00:02 | 00:00:05 | were in my property for just over a |
| 00:00:04 | 00:00:07 | month it really wasn't that long they |
| 00:00:05 | 00:00:09 | managed to completely trash it |
| 00:00:07 | 00:00:11 | throw a party had like 70 cars in the |
| 00:00:09 | 00:00:12 | neighborhood upset all the neighbors and |
| 00:00:11 | 00:00:17 | caused a ton of damage |
| 00:00:12 | 00:00:17 | not to mention stopped paying rent |
| 00:00:23 | 00:00:26 | well this experience which i always like |
| 00:00:25 | 00:00:27 | to view as a positive great learning |
| 00:00:26 | 00:00:30 | experience |
| 00:00:27 | 00:00:32 | has resorted in me asking myself what |
| 00:00:30 | 00:00:33 | are the other risks of owning a rental |
| 00:00:32 | 00:00:35 | property now you've got your obvious |
| 00:00:33 | 00:00:36 | ones but there's other things on the |
| 00:00:35 | 00:00:38 | other side of the spectrum |
| 00:00:36 | 00:00:40 | and things that i didn't see happening |
| 00:00:38 | 00:00:41 | especially on a home like this person |
| 00:00:40 | 00:00:43 | had trashed |
| 00:00:41 | 00:00:44 | i didn't expect a high-end rental that |
| 00:00:43 | 00:00:47 | typically would bring in a higher end |
| 00:00:44 | 00:00:48 | higher earning respectful person is what |
| 00:00:47 | 00:00:49 | i thought |
| 00:00:48 | 00:00:51 | i didn't expect this to happen i was |
| 00:00:49 | 00:00:53 | definitely caught off guard now i always |
| 00:00:51 | 00:00:55 | had cash reserves for the properties |
| 00:00:53 | 00:00:57 | it was never an issue but in today's |
| 00:00:55 | 00:00:59 | video i wanted to outline |
| 00:00:57 | 00:01:00 | the risks of owning rental properties |
| 00:00:59 | 00:01:01 | now i believe that rental property |
| 00:01:00 | 00:01:03 | investing |
| 00:01:01 | 00:01:05 | is one of the coolest most enjoyable |
| 00:01:03 | 00:01:07 | best long-term strategies |
| 00:01:05 | 00:01:09 | for investing it might not be your |
| 00:01:07 | 00:01:11 | dogecoin to the moon fast |
| 00:01:09 | 00:01:12 | turn 200 bucks into a trillion overnight |
| 00:01:11 | 00:01:14 | but it's something that |
| 00:01:12 | 00:01:15 | if you can be consistent with it and you |
| 00:01:14 | 00:01:16 | can do your research you know what |
| 00:01:15 | 00:01:18 | you're buying you're buying good stuff |
| 00:01:16 | 00:01:20 | the cash flows in a strong area |
| 00:01:18 | 00:01:22 | i think over time you're gonna win and |
| 00:01:20 | 00:01:22 | it's just gonna compound faster and |
| 00:01:22 | 00:01:25 | faster |
| 00:01:22 | 00:01:26 | and i also enjoy it very much so that's |
| 00:01:25 | 00:01:27 | led to me over |
| 00:01:26 | 00:01:29 | the last two years starting to purchase |
| 00:01:27 | 00:01:31 | a decent amount of properties |
| 00:01:29 | 00:01:32 | nothing crazy i got a small portfolio |
| 00:01:31 | 00:01:34 | hoping to expand it |
| 00:01:32 | 00:01:35 | but you know when i first jumped into it |
| 00:01:34 | 00:01:36 | years worth of research |
| 00:01:35 | 00:01:38 | saved up some money i went and bought |
| 00:01:36 | 00:01:40 | three properties in 90 days |
| 00:01:38 | 00:01:42 | that was a little bit over a million |
| 00:01:40 | 00:01:43 | dollars worth of property i i had debt |
| 00:01:42 | 00:01:44 | on each of those and i started |
| 00:01:43 | 00:01:46 | renting these out so it's been an |
| 00:01:44 | 00:01:47 | interesting journey and today i wanted |
| 00:01:46 | 00:01:50 | to explain |
| 00:01:47 | 00:01:52 | the rental property risks so that is |
| 00:01:50 | 00:01:52 | what we're gonna go through before we |
| 00:01:52 | 00:01:54 | get into that |
| 00:01:52 | 00:01:55 | make sure to drop a like down below and |
| 00:01:54 | 00:01:57 | i just want to mention this in here if |
| 00:01:55 | 00:01:58 | you're doing anything ecommerce related |
| 00:01:57 | 00:01:59 | which is what we tok about mostly here |
| 00:01:58 | 00:02:00 | on the channel |
| 00:01:59 | 00:02:02 | which is how i fund all the real estate |
| 00:02:00 | 00:02:02 | deals and everything else we are having |
| 00:02:02 | 00:02:04 | a |
| 00:02:02 | 00:02:06 | nice little discount right now going on |
| 00:02:04 | 00:02:07 | with our two ecommerce programs we have |
| 00:02:06 | 00:02:08 | one that outlines the entire business |
| 00:02:07 | 00:02:09 | model |
| 00:02:08 | 00:02:11 | and one that shows you very in-depth |
| 00:02:09 | 00:02:13 | aggressive facebook ad scaling |
| 00:02:11 | 00:02:15 | which both of those are great if you |
| 00:02:13 | 00:02:16 | have experience or if you don't so those |
| 00:02:15 | 00:02:17 | are perfect for everyone |
| 00:02:16 | 00:02:19 | you can check those out there's a couple |
| 00:02:17 | 00:02:20 | hundred dollar discount already applied |
| 00:02:19 | 00:02:21 | on there if you use the links in the |
| 00:02:20 | 00:02:23 | description of this video all right make |
| 00:02:21 | 00:02:26 | sure to drop a like and let's |
| 00:02:23 | 00:02:28 | jump right in rental property risks |
| 00:02:26 | 00:02:29 | again hopefully the good outweighs the |
| 00:02:28 | 00:02:31 | bad here's the good this is just an |
| 00:02:29 | 00:02:32 | example i can always i always like to |
| 00:02:31 | 00:02:34 | give examples of what's going on for me |
| 00:02:32 | 00:02:36 | this is a duplex that i purchased okay |
| 00:02:34 | 00:02:37 | it was a value add |
| 00:02:36 | 00:02:39 | the unit looked like this one of the |
| 00:02:37 | 00:02:41 | units was completely trashed the other |
| 00:02:39 | 00:02:43 | one was only rented at 1200 bucks a |
| 00:02:41 | 00:02:44 | month it didn't look very good the other |
| 00:02:43 | 00:02:46 | one was super basic |
| 00:02:44 | 00:02:48 | we ended up renovating it i've now |
| 00:02:46 | 00:02:50 | renovated both of the units to look like |
| 00:02:48 | 00:02:53 | this picture over here on the right |
| 00:02:50 | 00:02:55 | modern i did flooring paint cabinets |
| 00:02:53 | 00:02:58 | countertops appliances everything new |
| 00:02:55 | 00:03:00 | lights new fixtures new bathroom |
| 00:02:58 | 00:03:02 | everything now it costed a decent amount |
| 00:03:00 | 00:03:04 | of money to do this out of pocket |
| 00:03:02 | 00:03:05 | about 96 000 to buy the property and |
| 00:03:04 | 00:03:07 | about 15 |
| 00:03:05 | 00:03:08 | 000 in total rehab between both the |
| 00:03:07 | 00:03:11 | units right duplex |
| 00:03:08 | 00:03:12 | 2. well it was interesting to buy this |
| 00:03:11 | 00:03:14 | property and i saw it as such a great |
| 00:03:12 | 00:03:15 | opportunity because |
| 00:03:14 | 00:03:17 | my mortgage on the property initially |
| 00:03:15 | 00:03:18 | when i first bought it was about 1700 |
| 00:03:17 | 00:03:20 | bucks a month |
| 00:03:18 | 00:03:22 | now it's only 1500 because i've |
| 00:03:20 | 00:03:23 | refinanced it's gotten a much better |
| 00:03:22 | 00:03:24 | rate obviously as the rates have dropped |
| 00:03:23 | 00:03:26 | significantly |
| 00:03:24 | 00:03:28 | over the past year well there was only |
| 00:03:26 | 00:03:29 | one tenant in there |
| 00:03:28 | 00:03:31 | month to month they weren't on a lease |
| 00:03:29 | 00:03:32 | they were only paying 1200 bucks the |
| 00:03:31 | 00:03:33 | other side wasn't even |
| 00:03:32 | 00:03:35 | livable i mean as you see there's no |
| 00:03:33 | 00:03:37 | kitchen so it was interesting i really |
| 00:03:35 | 00:03:38 | saw that as an opportunity because the |
| 00:03:37 | 00:03:40 | property was priced |
| 00:03:38 | 00:03:42 | above what it should be based on the |
| 00:03:40 | 00:03:44 | money it's making but under what i knew |
| 00:03:42 | 00:03:46 | it would be worth once i fix it up |
| 00:03:44 | 00:03:48 | so it was a simple value ad like that it |
| 00:03:46 | 00:03:49 | was an older person who owned it they |
| 00:03:48 | 00:03:51 | won it for a long time didn't really |
| 00:03:49 | 00:03:53 | care they didn't manage it correctly so |
| 00:03:51 | 00:03:55 | i saw that as an opportunity and this |
| 00:03:53 | 00:03:56 | was a prime example of something good |
| 00:03:55 | 00:03:58 | that's happened |
| 00:03:56 | 00:03:59 | i haven't had a tenant destroy this you |
| 00:03:58 | 00:04:00 | know we like to screen all of our |
| 00:03:59 | 00:04:01 | tenants very |
| 00:04:00 | 00:04:03 | carefully but nobody's destroyed this |
| 00:04:01 | 00:04:05 | these units look very nice |
| 00:04:03 | 00:04:07 | everything is solid this has now gone up |
| 00:04:05 | 00:04:11 | a hundred thousand dollars in |
| 00:04:07 | 00:04:13 | equity as well as cash flows about 11 |
| 00:04:11 | 00:04:15 | which is phenomenal this is a prime |
| 00:04:13 | 00:04:16 | example of something i just i'm so |
| 00:04:15 | 00:04:18 | grateful for |
| 00:04:16 | 00:04:20 | now the bad this is an example of |
| 00:04:18 | 00:04:20 | something that happened and all of these |
| 00:04:20 | 00:04:22 | are like |
| 00:04:20 | 00:04:23 | anything can happen at any moment there |
| 00:04:22 | 00:04:25 | could be a huge issue with the duplex it |
| 00:04:23 | 00:04:25 | could just it's something that could |
| 00:04:25 | 00:04:26 | happen |
| 00:04:25 | 00:04:28 | now this was a personal home that i had |
| 00:04:26 | 00:04:30 | purchased for myself it was a higher end |
| 00:04:28 | 00:04:32 | home i knew it was at least a million |
| 00:04:30 | 00:04:33 | dollar plus home i bought it for |
| 00:04:32 | 00:04:35 | slightly under 900 |
| 00:04:33 | 00:04:36 | 000. lived there for a while enjoyed it |
| 00:04:35 | 00:04:38 | loved the property |
| 00:04:36 | 00:04:39 | and then it was time for me to move out |
| 00:04:38 | 00:04:41 | so instead of selling the home i wanted |
| 00:04:39 | 00:04:42 | to hold it for a while i knew the market |
| 00:04:41 | 00:04:44 | was going through the roof |
| 00:04:42 | 00:04:46 | i turned it into a rental well |
| 00:04:44 | 00:04:49 | unfortunately even with our very strict |
| 00:04:46 | 00:04:50 | criteria you know 3.5 times the rent in |
| 00:04:49 | 00:04:52 | terms of income |
| 00:04:50 | 00:04:53 | making sure that they had good credit no |
| 00:04:52 | 00:04:55 | previous evictions |
| 00:04:53 | 00:04:56 | no collections out against them well all |
| 00:04:55 | 00:04:58 | of that |
| 00:04:56 | 00:05:00 | plus it was two people signing on the |
| 00:04:58 | 00:05:02 | lease someone who was 31 someone who was |
| 00:05:00 | 00:05:03 | 29 it's a little bit old enough you know |
| 00:05:02 | 00:05:05 | in the professional categories but |
| 00:05:03 | 00:05:07 | making decent money |
| 00:05:05 | 00:05:08 | well i had a lot of issues like i just |
| 00:05:07 | 00:05:09 | toked about the beginning of this video |
| 00:05:08 | 00:05:10 | and i made a whole video toking about |
| 00:05:09 | 00:05:13 | the |
| 00:05:10 | 00:05:14 | eviction process 36 000 later in terms |
| 00:05:13 | 00:05:16 | of collections that we're trying to get |
| 00:05:14 | 00:05:17 | from them which we probably won't we'll |
| 00:05:16 | 00:05:19 | see what happens |
| 00:05:17 | 00:05:21 | but nonetheless this home had a little |
| 00:05:19 | 00:05:22 | bit of an issue now it's already been |
| 00:05:21 | 00:05:23 | re-rented out as soon as i fixed the |
| 00:05:22 | 00:05:25 | property |
| 00:05:23 | 00:05:27 | it literally took me nine days and i |
| 00:05:25 | 00:05:28 | don't want to say me as in me because it |
| 00:05:27 | 00:05:29 | was management and |
| 00:05:28 | 00:05:31 | other people helping with this but from |
| 00:05:29 | 00:05:31 | the point where i got the tenants out of |
| 00:05:31 | 00:05:34 | the house |
| 00:05:31 | 00:05:36 | it took nine days to fix it relist it |
| 00:05:34 | 00:05:38 | get an application push through and get |
| 00:05:36 | 00:05:41 | a tenant signed money in hand |
| 00:05:38 | 00:05:42 | and give them the keys that's an insane |
| 00:05:41 | 00:05:44 | insane timeline so |
| 00:05:42 | 00:05:46 | turning a bad into a good situation i'm |
| 00:05:44 | 00:05:46 | not upset about it it's a phenomenal |
| 00:05:46 | 00:05:48 | learning |
| 00:05:46 | 00:05:50 | uh you know example to say the least and |
| 00:05:48 | 00:05:52 | i love to kind of share that |
| 00:05:50 | 00:05:54 | now this home i just thought it would |
| 00:05:52 | 00:05:55 | attract very very high quality people |
| 00:05:54 | 00:05:57 | turned out it didn't now this new tenant |
| 00:05:55 | 00:05:59 | that's in there um super great haven't |
| 00:05:57 | 00:06:00 | had any issues so far it's on a two-year |
| 00:05:59 | 00:06:02 | lease super excited for it it's a |
| 00:06:00 | 00:06:02 | phenomenal property they're getting a |
| 00:06:02 | 00:06:04 | great deal |
| 00:06:02 | 00:06:06 | i'm doing very well in terms of an |
| 00:06:04 | 00:06:08 | investment perspective so |
| 00:06:06 | 00:06:09 | super super solid in terms of turning a |
| 00:06:08 | 00:06:11 | bad into a good |
| 00:06:09 | 00:06:13 | that's really the only bad thing that's |
| 00:06:11 | 00:06:15 | happened i've had unforeseen expenses |
| 00:06:13 | 00:06:16 | every single month literally every month |
| 00:06:15 | 00:06:17 | it seems like there's an extra two to |
| 00:06:16 | 00:06:19 | three hundred dollars |
| 00:06:17 | 00:06:21 | throughout my entire portfolio all of |
| 00:06:19 | 00:06:23 | the properties between five tenants |
| 00:06:21 | 00:06:24 | it seems like there's always a little |
| 00:06:23 | 00:06:26 | thing that happens so |
| 00:06:24 | 00:06:28 | i definitely needed to budget my |
| 00:06:26 | 00:06:29 | expenses a little bit higher those are |
| 00:06:28 | 00:06:31 | just common things that i should have |
| 00:06:29 | 00:06:33 | expected but had no idea what the exact |
| 00:06:31 | 00:06:34 | numbers would be now i'm getting a good |
| 00:06:33 | 00:06:36 | sense of that so |
| 00:06:34 | 00:06:38 | here's a list of potential things that |
| 00:06:36 | 00:06:38 | can go wrong just some things that pop |
| 00:06:38 | 00:06:40 | into my head |
| 00:06:38 | 00:06:42 | some of the stuff i've had friends have |
| 00:06:40 | 00:06:43 | to deal with this first one is kind of |
| 00:06:42 | 00:06:45 | funny |
| 00:06:43 | 00:06:46 | but i actually had a friend get sued by |
| 00:06:45 | 00:06:48 | a tenant twice |
| 00:06:46 | 00:06:50 | because there was no railing on the |
| 00:06:48 | 00:06:51 | stairs outside |
| 00:06:50 | 00:06:53 | it was some old lady she was really |
| 00:06:51 | 00:06:54 | upset about it there was still a ramp on |
| 00:06:53 | 00:06:56 | the other side but she always wanted to |
| 00:06:54 | 00:06:58 | take a little four steps up to the front |
| 00:06:56 | 00:06:59 | of the little apartment complex |
| 00:06:58 | 00:07:01 | anyways there was no handrail which |
| 00:06:59 | 00:07:02 | apparently is like something that has to |
| 00:07:01 | 00:07:04 | be done up to code so |
| 00:07:02 | 00:07:05 | she sued for that he put it he had put a |
| 00:07:04 | 00:07:06 | handrail on one side and apparently |
| 00:07:05 | 00:07:08 | there was something saying it had to be |
| 00:07:06 | 00:07:08 | on both sides in that certain county or |
| 00:07:08 | 00:07:10 | whatever |
| 00:07:08 | 00:07:11 | he had no idea just tried to zoom again |
| 00:07:10 | 00:07:13 | it was like an interesting thing but it |
| 00:07:11 | 00:07:15 | goes to show like anything can happen |
| 00:07:13 | 00:07:16 | and out of nowhere and it's like the |
| 00:07:15 | 00:07:18 | dumbest thing you know he spends like |
| 00:07:16 | 00:07:20 | 900 bucks to get one installed but |
| 00:07:18 | 00:07:21 | you know a couple thousand dollars in |
| 00:07:20 | 00:07:23 | attorney fees |
| 00:07:21 | 00:07:25 | each time plus the repairs plus all |
| 00:07:23 | 00:07:26 | these little things so it's like |
| 00:07:25 | 00:07:28 | you know it just takes time it takes |
| 00:07:26 | 00:07:29 | some extra capital so i get a budget for |
| 00:07:28 | 00:07:30 | things like that |
| 00:07:29 | 00:07:32 | getting sued for no railing that's one |
| 00:07:30 | 00:07:34 | thing if you have an adjustable rate |
| 00:07:32 | 00:07:35 | mortgage you can get screwed at any time |
| 00:07:34 | 00:07:37 | which is why in terms of |
| 00:07:35 | 00:07:39 | buying a residential property meaning |
| 00:07:37 | 00:07:42 | four units or less |
| 00:07:39 | 00:07:44 | i always recommend a fixed rate mortgage |
| 00:07:42 | 00:07:45 | you might say oh well it's only a i can |
| 00:07:44 | 00:07:46 | only get a 4.5 |
| 00:07:45 | 00:07:49 | mortgage you know that that's the |
| 00:07:46 | 00:07:51 | interest rate but if i get an adjustable |
| 00:07:49 | 00:07:53 | 10 at 10 years it's only 3.3 and then it |
| 00:07:51 | 00:07:55 | can be adjusted |
| 00:07:53 | 00:07:57 | why do you think they're doing that from |
| 00:07:55 | 00:07:59 | an adjustable perspective your |
| 00:07:57 | 00:08:01 | premiums can go through the roof |
| 00:07:59 | 00:08:02 | everything can just get destroyed |
| 00:08:01 | 00:08:04 | i would much rather have consistency and |
| 00:08:02 | 00:08:05 | know my numbers so that's why i always |
| 00:08:04 | 00:08:06 | recommend and many other people |
| 00:08:05 | 00:08:07 | recommend |
| 00:08:06 | 00:08:09 | a 30-year fix if you're doing something |
| 00:08:07 | 00:08:10 | like that now there's always a risk of |
| 00:08:09 | 00:08:11 | vacancy |
| 00:08:10 | 00:08:14 | i've had a vacancy i actually had a |
| 00:08:11 | 00:08:16 | house sit empty for two months which was |
| 00:08:14 | 00:08:18 | not great i didn't expect that to happen |
| 00:08:16 | 00:08:19 | i think it was the interior color of the |
| 00:08:18 | 00:08:20 | property it was a little bit brown and |
| 00:08:19 | 00:08:21 | purple and not very good looking i |
| 00:08:20 | 00:08:23 | should have repainted |
| 00:08:21 | 00:08:26 | anyways took two months to get a tenon |
| 00:08:23 | 00:08:29 | in there my overhead was like 17 or 1800 |
| 00:08:26 | 00:08:30 | a month each month so that wiped out a |
| 00:08:29 | 00:08:31 | nice amount of cash flow that wiped out |
| 00:08:30 | 00:08:33 | the cash flow for that property |
| 00:08:31 | 00:08:35 | for the entire year like literally for |
| 00:08:33 | 00:08:36 | that whole year so |
| 00:08:35 | 00:08:38 | that was an interesting thing to face |
| 00:08:36 | 00:08:39 | every other property has been very quick |
| 00:08:38 | 00:08:40 | in terms of getting it rented out which |
| 00:08:39 | 00:08:41 | has been |
| 00:08:40 | 00:08:43 | awesome this comes back to the point of |
| 00:08:41 | 00:08:44 | buying in a strong |
| 00:08:43 | 00:08:46 | rental area you want somewhere that has |
| 00:08:44 | 00:08:48 | demand that has population growth that |
| 00:08:46 | 00:08:49 | has job growth it just has natural |
| 00:08:48 | 00:08:51 | growth and people |
| 00:08:49 | 00:08:52 | want to be there so you know watch your |
| 00:08:51 | 00:08:54 | market |
| 00:08:52 | 00:08:56 | risks of bad property management |
| 00:08:54 | 00:08:59 | thankfully i have not had this issue |
| 00:08:56 | 00:09:00 | thankfully because it seems like from |
| 00:08:59 | 00:09:01 | the people i've watched the courses i've |
| 00:09:00 | 00:09:03 | gone through where they explain |
| 00:09:01 | 00:09:04 | nightmare stories and stuff |
| 00:09:03 | 00:09:05 | it seems like bad property management |
| 00:09:04 | 00:09:07 | can really be something that screws it |
| 00:09:05 | 00:09:08 | over like they don't pay attention to |
| 00:09:07 | 00:09:08 | who they're putting in there they put in |
| 00:09:08 | 00:09:10 | bad people |
| 00:09:08 | 00:09:12 | they take forever to fill it it really |
| 00:09:10 | 00:09:13 | causes your expenses to go up |
| 00:09:12 | 00:09:15 | your return to go down your property is |
| 00:09:13 | 00:09:17 | going to get destroyed faster and wear |
| 00:09:15 | 00:09:18 | down faster so good property management |
| 00:09:17 | 00:09:19 | is |
| 00:09:18 | 00:09:22 | very very important so i always try to |
| 00:09:19 | 00:09:23 | keep a great relationship with mine tax |
| 00:09:22 | 00:09:25 | changes and insurance changes |
| 00:09:23 | 00:09:27 | this is something that is a potential |
| 00:09:25 | 00:09:28 | risk not in terms of |
| 00:09:27 | 00:09:30 | you can't really see it coming because |
| 00:09:28 | 00:09:32 | you can't but this is just something you |
| 00:09:30 | 00:09:34 | should always expect but it is a risk |
| 00:09:32 | 00:09:36 | over time insurance can change it could |
| 00:09:34 | 00:09:37 | be another 160 bucks a year you know |
| 00:09:36 | 00:09:39 | it's like a little thing like that |
| 00:09:37 | 00:09:41 | you know the taxes could change |
| 00:09:39 | 00:09:43 | tiknically at any point |
| 00:09:41 | 00:09:45 | the ability to deduct and make your cash |
| 00:09:43 | 00:09:47 | flow free could go away |
| 00:09:45 | 00:09:48 | meaning depreciate the property so your |
| 00:09:47 | 00:09:50 | your cash flow is free |
| 00:09:48 | 00:09:52 | anything tax-free at least for now |
| 00:09:50 | 00:09:55 | anything like a 1031 exchange |
| 00:09:52 | 00:09:57 | all of that stuff could tiknically go |
| 00:09:55 | 00:10:00 | away just thinking worst case scenario |
| 00:09:57 | 00:10:01 | tax codes can get changed zoning stuff |
| 00:10:00 | 00:10:02 | can get changed where you thought you |
| 00:10:01 | 00:10:02 | were going to be able to do this but now |
| 00:10:02 | 00:10:04 | your |
| 00:10:02 | 00:10:05 | method of building you know if your |
| 00:10:04 | 00:10:06 | developer building doesn't work anymore |
| 00:10:05 | 00:10:07 | anything can happen |
| 00:10:06 | 00:10:09 | right so you got to keep that in mind |
| 00:10:07 | 00:10:11 | and then obviously bad tenants it's a |
| 00:10:09 | 00:10:12 | long list there's many many more things |
| 00:10:11 | 00:10:14 | beyond that but |
| 00:10:12 | 00:10:16 | the thing i always like to keep in mind |
| 00:10:14 | 00:10:18 | is the economics of scale |
| 00:10:16 | 00:10:20 | okay so i've realized between my small |
| 00:10:18 | 00:10:21 | portfolio it's not a lot i got five |
| 00:10:20 | 00:10:23 | tenants there it's |
| 00:10:21 | 00:10:24 | it's small it's like a little portfolio |
| 00:10:23 | 00:10:26 | i think it's 2.5 million dollars in |
| 00:10:24 | 00:10:27 | total value |
| 00:10:26 | 00:10:29 | obviously there's debt on that of about |
| 00:10:27 | 00:10:32 | 1.6 million now |
| 00:10:29 | 00:10:33 | that portfolio in itself i've had issues |
| 00:10:32 | 00:10:34 | i had the one eviction which i didn't |
| 00:10:33 | 00:10:37 | think would happen this quick |
| 00:10:34 | 00:10:39 | had some issues had some repairs um the |
| 00:10:37 | 00:10:40 | hot tub the bigger property that i lived |
| 00:10:39 | 00:10:42 | in the only one that has a pool hot tub |
| 00:10:40 | 00:10:42 | i don't like to buy rentals with that |
| 00:10:42 | 00:10:44 | stuff but |
| 00:10:42 | 00:10:46 | the home that was mine i've spent seven |
| 00:10:44 | 00:10:47 | thousand dollars on pool repairs because |
| 00:10:46 | 00:10:48 | the first person completely broke the |
| 00:10:47 | 00:10:50 | hot tub those |
| 00:10:48 | 00:10:51 | people who got evicted and then now the |
| 00:10:50 | 00:10:52 | heater went out there's another four |
| 00:10:51 | 00:10:54 | thousand dollars so |
| 00:10:52 | 00:10:56 | there's expenses that pop up but i |
| 00:10:54 | 00:10:57 | realized the more you have the more |
| 00:10:56 | 00:10:59 | diluted |
| 00:10:57 | 00:11:00 | that number becomes because it's just |
| 00:10:59 | 00:11:02 | the economics of scale |
| 00:11:00 | 00:11:03 | i realized that first when i was running |
| 00:11:02 | 00:11:05 | my e-commerce business |
| 00:11:03 | 00:11:06 | you might have some people complain but |
| 00:11:05 | 00:11:09 | the more people you get |
| 00:11:06 | 00:11:10 | the more diluted that percentage is so |
| 00:11:09 | 00:11:12 | you know it might be |
| 00:11:10 | 00:11:13 | you know you have a one percent refund |
| 00:11:12 | 00:11:14 | rate and a one percent chargeback rate |
| 00:11:13 | 00:11:16 | it's just natural |
| 00:11:14 | 00:11:18 | but when you scale exponentially and |
| 00:11:16 | 00:11:19 | obviously make sure you get quick |
| 00:11:18 | 00:11:20 | shipping times we make sure our support |
| 00:11:19 | 00:11:22 | is on point |
| 00:11:20 | 00:11:23 | fast shipping custom packaging |
| 00:11:22 | 00:11:24 | everything's great customer experience |
| 00:11:23 | 00:11:25 | is awesome |
| 00:11:24 | 00:11:26 | well that those rates go down to more |
| 00:11:25 | 00:11:27 | like point five percent because you've |
| 00:11:26 | 00:11:29 | scaled so large |
| 00:11:27 | 00:11:31 | and it's very similar with real estate |
| 00:11:29 | 00:11:33 | so you're actually more secure |
| 00:11:31 | 00:11:34 | with the more real estate you own so |
| 00:11:33 | 00:11:36 | it's been a very interesting thing to |
| 00:11:34 | 00:11:38 | continue doing and i look forward to |
| 00:11:36 | 00:11:39 | doubling tripling and quadrupling |
| 00:11:38 | 00:11:42 | and so on and so forth continuing to |
| 00:11:39 | 00:11:43 | grow my real estate portfolio so i'll |
| 00:11:42 | 00:11:44 | keep you updated as i do that i just |
| 00:11:43 | 00:11:46 | wanted to tok about some of the good |
| 00:11:44 | 00:11:47 | some of the bad and the potential risks |
| 00:11:46 | 00:11:48 | because |
| 00:11:47 | 00:11:50 | i always believe you should be able to |
| 00:11:48 | 00:11:51 | argue both sides if you're looking to |
| 00:11:50 | 00:11:53 | make an investment |
| 00:11:51 | 00:11:54 | whatever it is it could be stok could |
| 00:11:53 | 00:11:56 | be starting a new business |
| 00:11:54 | 00:11:58 | or just your politikal views most people |
| 00:11:56 | 00:11:59 | can't argue both sides i think that's |
| 00:11:58 | 00:12:01 | very important to know so |
| 00:11:59 | 00:12:02 | yeah i hope you enjoyed this video hope |
| 00:12:01 | 00:12:04 | you got some value out of it make sure |
| 00:12:02 | 00:12:05 | to smash quick like down below again if |
| 00:12:04 | 00:12:06 | you're interested in e-commerce at all |
| 00:12:05 | 00:12:07 | which is the business that allows me to |
| 00:12:06 | 00:12:09 | fund all this stuff that's just |
| 00:12:07 | 00:12:10 | what i do on a day-to-day basis for the |
| 00:12:09 | 00:12:12 | last five years i also have an entire |
| 00:12:10 | 00:12:13 | advertising agency built around that |
| 00:12:12 | 00:12:15 | specifically |
| 00:12:13 | 00:12:16 | you can check out our two programs |
| 00:12:15 | 00:12:17 | linked below again those are a couple |
| 00:12:16 | 00:12:18 | hundred bucks off |
| 00:12:17 | 00:12:20 | that discount is already applied for you |
| 00:12:18 | 00:12:21 | so be sure to check that out if there's |
| 00:12:20 | 00:12:22 | anything you want to see |
| 00:12:21 | 00:12:24 | here on the channel or if there's any |
| 00:12:22 | 00:12:25 | questions you have on this video |
| 00:12:24 | 00:12:27 | make sure to just leave it in the |
| 00:12:25 | 00:12:28 | comment section and with that being said |
| 00:12:27 | 00:12:38 | i'll see you |
| 00:12:28 | 00:12:40 | in the next video peace |
| 00:12:38 | 00:12:40 | you |
