Ashley:
Today’s guest has a strategy that flips conventional wisdom on its head. When interest rates started climbing and others hit pause, he doubled down, seizing the opportunity to scoop up properties in a less competitive market. And when rates eventually drop, that’s when the real magic happens. Slowing down on purchases maybe and refinancing to boost cashflow and maximizing revenue ready to learn how going against the grain can lead to big rewards. Let’s get into it. This is the Real Estate Rookie podcast. I’m Ashley Kehr and I’m here with Tony j Robinson,

Tony:
And welcome to the Real Estate Rookie podcast, where every week, three times a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. Before we get into the show, if you’ve been around BiggerPockets for a while, we throw a huge Black Friday book sale every year. It’s literally the best time of year to get our books and all the bonus content. We’ve got more than 60 books now. And to celebrate the enormity of the catalog, every title will be discounted up to 60% off. Basically nothing is not on sale, and these are the best deals you’ll get on our store all year. The sale is happening starting today at biggerpockets.com/black Friday. Now, let’s get onto the show, and today I’d like to welcome Ryan Irwin to the show. Ryan, thank you for joining us today, brother.

Ryan:
Hey, Tony. Ashley, thank you so much. I’m super excited to be here and thank you for the invitation.

Ashley:
Yeah, Ryan, let’s start off with a little background on yourself. What did your life look like prior to investing in real estate?

Ryan:
Oh, man, it is been a journey. My history is in nutrition and fitness, so that’s my backbone, if you will, and I’ve been an entrepreneur for a little over 20 years now, but I’m a nutrition and fitness coach. That’s my primary income, if you will. It’s my focus, and I was actually able to walk away from my W2 about six years ago and do that full time. And so as I was growing my business, I thankfully got to a point where I had some extra income. I was trying to figure out, okay, what do I do with this? And one of my good close friends, and actually one of my accountability friends, he actually recommended real estate. And I said, oh, okay, let me explore this. And so I, being a coach is great, like cashflow, but it’s horrible from a tax perspective. There’s just no hard assets. And so that intrigued me about real estate. Also, I love what I do, and so I wanted something that I would still be able to do my business, my coaching business, but have that going on in the background and create passive sustainable wealth and use that as a vehicle to continue to grow my investment strategy while still being able to do what I do in my other role.

Ashley:
Ryan, once you started looking into real estate, what strategy did you choose and why did you choose that strategy?

Ryan:
Again, going back to when my buddy told me, Hey, you should look at this. About that time my in-laws actually inherited a home, and so they were going to sell their primary, and I thought, you know what? If there’s not a better way to get into real estate investing, I think this might be it. And so I mustered up the courage and I asked them, I said, Hey, would you consider selling your house to me and then we’re going to convert it into a rental? And they said, yes, and they love me enough, or they gave me a decent deal on it. And so I knew exactly what I was getting. I mean, my wife basically grew up in that house, so I was very familiar and comfortable with it. And so then I went ahead and I jumped in. It’s been a great long-term rental for me, and so I’m like, cool.

Ryan:
I got one under my belt. And then my next property was actually a syndication. And again, this was 2021, and I’m like, with my business and all the other things I got going on, I figured, okay, the syndications that I had, a nice property I got, and then I’ll go with a syndication my limit. That’s what I have the bandwidth for. Well, I’m like, you know what? I’ve heard about this thing called BP Con. Maybe I should go there and figure out maybe a little bit more. Maybe I’ll learn some tools, maybe I’ll make me better. Well, as you can imagine, and you guys know, that just completely spun my head and I just learned so much. And so that’s when I came into like, oh, I can do more. And I actually, I read Scott Trenches book,

Ashley:
The Set for Life.

Ryan:
Set for Life, yeah, I realized I was holding myself back. And so at the time, again, I had the syndication, I bought my dream car. I’ve never said this on a podcast before. I had a zero six Corvette. I was loving it. I thought it was awesome, but then I realized this is holding me back. And so I sold that and took those funds, and then I got into my next property. It was actually a foreclosure. It was an REO property, and I bird it, I bird it, and then that’s when kind of the floodgates opened and I’m like, okay, this is definitely something I want to continue to do, and I’ve just kind of grown since there.

Tony:
Brian, first dude, just want, we got to pause on that part of the story, man, because I feel like a lot of the people who are listening are going to gloss over what you just said. You said that you had grinded it out as an entrepreneur building your fitness business. You had gotten to this point where you had your dream life, your dream car, and then you have this kind of awakening and you sell the dream car to then fund the new dream. And I think it’s that kind of sacrifice that a lot of Ricks who are listening aren’t to make. And that’s why there are people who have been listening to me and Ashley talk for several hundred episodes now and still haven’t pulled the trigger. It’s not because that they don’t have the ability, but it’s because they haven’t been able to really buckle down and make those kinds of sacrifices. So kudos you, man, for jumping and being able to do that. Now, one thing I want to circle back on is the syndication piece. Just really quickly, for folks who maybe aren’t familiar with the syndication, what is a syndication and why did you choose that as your second investment?

Ryan:
It’s a group of investors, and there’s two different levels. There’s gp, which is general partners, and there’s LPs, which is limited partner and the gp, they’re the ones that are putting it together. They’re managing the investment, their names are on the documents. They’re taking all of that responsibility where the limited partners come in like myself, we’re basically just putting the investment and the money behind the machine, if you will. And so they’re then running it, and of course we get reports and information, so extremely passive, extremely passive. We don’t really do anything. And so that’s why I thought, well, okay, this will be a great way to still be a real estate investor but not have to manage it and take away a lot of my time.

Tony:
And for people who are crunched on time, I do think that passively investing into other deals is very much a way to keep growing your portfolio without all the work that goes into it. But then something seems like it switched Ryan where you said, maybe passive investing isn’t all I need to do, and there is more for me. What was that light bulb moment that really gave you the confidence to jump back in and do it yourself?

Ryan:
And really, I was bp. I got in there and I realized all the opportunity, and I certainly don’t regret getting into syndication. It was the right call for the right time, but I’m like, wow, what else could I do with that investment? Again, as an entrepreneur, I’m like, I want to take control. I want to do my own thing. And so opened up a lot of other doors, and so I actually was at BP Con and I formed an accountability group. So I’ve got a mastermind and we’ve got people from all over the country, different backgrounds, different focuses, and I’m like, oh, you’re doing this? Oh, you’re doing this, and I’m just cherry picking the ideas and it’s just help me to grow and expand. Plus I’ve got a sounding board. So it really helped with my confidence and it just accelerated my education on what made sense for me and what that next step is.

Ashley:
Ryan, that’s incredible. The accountability group portion, because when I first started my real estate Instagram account, and I had somebody who dms me and I think 10 other people and said, I want to start an accountability group, a little mini mastermind, you guys are all posting about social media. Let’s meet once every six weeks. And we did it for over a year that we did it, and we meet more often, things like that. And I met a few of them in person, but it was incredible. It was life-changing, being able to meet with those same people, like you said, a soundboard. So what’s your advice for someone? Maybe they’re going to bp, maybe they’re going to a different networking event. How can they also find people to join an accountability group with them?

Ryan:
Yeah, I think it is really just the X factor. I mean, just getting around people, getting around people, meeting people. I mean, it’s no secret that meetups real estate meetups are a huge opportunity. You’re just one conversation away from a huge breakthrough. But then what I did is I met about three dozen people that I felt like I had a good rapport with that had a great connection, and then I narrowed it down to about two dozen. I’m like, Hey, I reached out to ’em, say, Hey, this is where my head’s at. Here’s the structure of this group I’m looking at creating. And from that, about a dozen said, yep, let’s do it. And now we’re in year three. Now we’re still doing it. We brought, most of us have been going to all the BP cons, and so it’s great to have this group and it just really, it helps you challenge yourself, but it also connections, make connections, and so literally it just totally amplifies anything that you’re wanting to do.

Tony:
Rookies, we want to hit 100,000 subscribers on YouTube and we need your help while we take a quick ad break. You can go over to youtube.com/at realestate rookie and make sure you’re subscribed to the channel. So stay tuned after a break. For more from Ryan,

Ashley:
Welcome back to the show. We’re joined by Ryan Irwin. Yeah, that’s a great point. And if someone is struggling trying to find an accountability group, create your own, go and ask other people. You can slide into people’s dms, you can ask them at different networking events that what you’re wanting to put together, and there’s definitely going to be people that won’t stick through it and they’ll kind of dwindle away and stop showing up. But there’s going to be those core people that come. And we just interviewed somebody else who talked about an accountability group and little mastermind that they had for, I think it was over five years now that they’ve been meeting on a consistent basis and how it is such a great sounding board. I mean, you think of large companies, they have advisory boards who are from different industries, different backgrounds, but they’re there to help you and advise you to be a sounding board. They’re not your competition. They’re there to hold you accountable to things like that. So even large corporations have these accountability groups in some kind of aspect. So Ryan, you did this in patient, you realize you want to be more active during this time that you’re going through this. Your spouse is your spouse on board with all of this. Let’s talk about that kind of relationship bringing, you’re all of a sudden you’re selling your car to, you’re not taking her out in the Corvette anymore to buy these properties. Give us a little insight.

Ryan:
Yeah, my wife’s amazing. I mean, we’ve been married for 26 years and she supported me through all this crazy journey. Like I said, I’ve been in an entrepreneur for over years. I’ve quit my corporate job twice now, and this time is the last six years. It’s just been gangbusters, never going back. And so she liked the idea of real estate investing. She understood it. It’s like it’s a hard asset. It’s tangible, like she said, is something you can hold and touch and feel. Our very first house when we were first married accidentally was a flip. We didn’t even know it. We just bought this house that the bank foreclosed on, and we just finished up the projects and we actually sold it for profit. If we would’ve known better, we would’ve either held onto it longer to reduced the capital gains or whatever. So we’ve always had a good experience with real estate and it’s something that we can do together. And so yeah, she’s been on board. I mean, I’m still leading the charge, but everything, we’re talking through it, discussing it, and she’s a great sounding board on does this make sense if she’s like, yeah, that makes sense and I feel even better about it.

Tony:
Can we talk a little bit, Ryan, about what your portfolio looks like? We know you started with the first property, then you did the syndication, then you went into a burr. Just give us a quick snapshot of what the total portfolio looks like.

Ryan:
Yeah, sure. So right now I’ve got two single family properties, one of which again, my in-laws and then the burr. And then when I burned out of that, I bought a duplex. And then also since then I’ve got into house flipping. So I’m on my third house flip right now. And then again, I still have that multifamily apartment complex as the syndication. So that’s where I’m at now.

Tony:
So quite a few deals. I think the question that maybe comes to mind for most of our rookies that are listening is, well, how are you funding all of these deals in a relatively short period of time? We’re talking post covid that you’ve been able to build this portfolio. Where’s all the cash coming from? Is there a rich Uncle Ryan that’s kind of funding everything for you? What does that piece look like?

Ryan:
Yeah, so great question. Again, being self-employed, I was able to establish the relationship with my bank, my local bank. And so initially it was just working with my local bank and when I was growing my coaching business and still at the time had a corporate job, I was stashing funds away, stashing funds away, maxing out my 401k, just saving, saving, saving, creating that nest egg so I could make the jump. That was always my goal was to jump back into full-time entrepreneurship, and so I had that capital built up.

Tony:
Ryan, one of the things you mentioned was working with kind of the local banks, and I think Ash and I have harped on the immense value of working with the smaller kind of local regional banks as they build out or as rookies look to build out their portfolio. Actually, I want to kick this one to you because I love when you tell the story, but the deal you did when you got the line of credit plus the money for the purchase, for the rookies who haven’t heard that story yet, can you walk ’em through that?

Ashley:
Yeah, so I was actually at the bank with my partner. We were both getting lines of credit on separate investment properties we each owned and we’re telling the loan officer as we’re signing for our line of credits that we got this house under contract, we have this guy we’re going to go to ask for the money. We don’t really have, he didn’t say yes yet, but we put it under contract and well, the loan officer goes, well, if he doesn’t give you a good interest rate, let me know and I can probably beat him and do something better. And we kind of look at each other well, and so he offered us a 90 day unsecured loan to purchase the property in cash, and the loan amount would be exactly the amount we needed to close on the property. And then we would, right after we closed on it, we would come back to the bank and do long-term financing on it to pay off that 90 day loan.

Ashley:
And that’s what we did. As soon as we closed on it, we put a new fridge in it, we got the house appraised right away. We started the loan process and it actually appraised for I think like 50,000 maybe, and we bought it for 37,000. So we ended up pulling up about 42,000 out of it. So we actually ended up walking away with a check for that property, but we never would’ve even thought that was an option to actually do unless we had kind of told him our situation. And now I like to say ask what products they have available. I mean, at that point we weren’t even asking me offered. So Ryan, what is your advice for the lenders that you have talked to as to kind of laying out getting the best option from them?

Ryan:
Yeah, I mean, create a relationship. I think that’s really especially important for those local banks. They value that. And so keeping deposits on hand, having regular conversations with your lender, letting them know what’s going on, doing a relationship with the retail side when you’re going in, making a deposit, talking to those people, the ones that are, they’re part of your team, developing that team, and now you might outgrow them, but you know what, they’re still part of your team. I was talking to my banker the other day. He is like, Hey, I want to put you in, talk to our other loan officer. We got some distressed properties we might be able to help you with. And so you just never know. Again, it comes back to connections and networking where that might lead.

Tony:
I want to dig in a little bit here, Ryan, because you’ve tested out a few different strategies within your portfolio. You’ve got just traditional buy and hold, right? When the buy place in it in there, you’ve done the syndication, you’ve done the B strategy, you’ve got the small multifamily with the duplex, you also have the flips, so you’re kind of dipping your toes in a few different buckets of real estate investing. So I guess what would you say maybe right now is the ultimate goal of your portfolio? Are you doing this for the big chunks of cash? Are you focused on the consistent cashflow and the appreciation? What’s the main focus for you right now in the portfolio?

Ryan:
Yeah, great question. So I read and I met him a couple of times, Chuck Carson, the small and mighty investor, and so my goal is not necessarily to build this ginormous empire. If it happens, it happens, but honestly, my thing is financial freedom and just is to grow that portfolio in a way that makes sense. I mean, our most valuable resource is time, and so I want to very carefully manage that. Plus, I love what I do. I work from home. I love what I do, so it’s like I’m not trying to necessarily replace that, but work into it. So again, going back to the bottleneck scenario, when capital starts becoming the bottleneck, then I’m like, all right, let’s do some house flipping. Let’s build some capital. So then paying down that debt, if a flip makes sense, I got to flip right now I’m transitioning into a long-term hold because it makes more sense to do that. And then as the portfolio grows, opportunities present themselves. It’s just again, having more than one exit strategy and seeing that, okay, with that five-year vision, with that long-term plan, how does this asset make sense? As long as I’m working towards that, not just working towards to build my portfolio, it’s like, okay, what’s that long-term goal?

Ashley:
You talked a little bit about systems and processes and your bottleneck specifically, but can you go more into the operations side of building out your real estate business? You talked about a deal funnel. Maybe give us a quick breakdown of what you’ve been able to implement that kind of sets you apart from other investors.

Ryan:
Yeah, certainly. And so I think again, comes back down to making connections, and so going to meetups, talking to individuals, wholesalers, talking to other, my insurance agent, he sent me a potential sub two deal, just letting people know what you’re doing. Also from a business standpoint, I’ve had a virtual assistant now for over a decade, probably 15 years now. And so I use my assistant to help me with my coaching business, but then she also helps move my real estate business. Right now I’m setting up a virtual staging for one of my properties. She’s handling all that. And so, okay, what can be delegated? Those types of things. And then setting up systems in place, I think about scaling, like, okay, can I scale this? Can I continue to do this taking rent checks? Can I scale that? Absolutely not. So okay, you have rent ready. I had all set up automatically and such. And so just again, going back, figuring out those systems and processes that allow me to scale. Even with the house flipping, again, I’m not in there swinging a hammer. I got a partner. He’s managing the project side of the things. He’s working with subcontractors, and so again, it comes back to that long-term vision. Why did I get into real estate in the first place?

Ashley:
We have to take the final ad break, but we’ll be right back after this

Tony:
Guys. Let’s jump back in.

Ashley:
Ryan, my next question was going to be how are you balancing working full-time in your consulting, your coaching business, and then also handling real estate? And you kind of answered a part of that as you’re leaning on others and especially your virtual assistant. How can a rookie investor take advantage of using a virtual assistant? Where can they find one? How much does it cost and what kind of task are you offloading?

Ryan:
Yeah, it is just a huge asset and there’s a ton of different ways to go about it. I just went to an online platform and I submitted my job description, what I’m looking for, and immediately you started getting hits, and then it’s just like a job interview. Then I narrowed it down to my top three that I felt like had the qualities I was looking for, and then I interviewed ’em, I interviewed ’em, told ’em what I’m doing, and it is got a good feel for them, see what their experience is. I think that you have to look at and say, okay, what are they going to do for you? I’ve had international VAs, I’ve done basic stuff for me, like SEO website work, things like that, work great. But my current va, I mean, she’s domestic. She’s east coast, so not quite. I’m in central, so I mean similar time zone and I pay her more, but I want her to be, she’s a higher level, and so she has those expertise that she brings to the table so I can rely on it real time. And again, I’m fine with that because the more I pay her, then I’m getting, I’m buying back my time because then I can do more valuable things. And that’s the nice thing about a VA is you’re in charge. You can say, okay, here’s the maximum hours you want to work. Here’s the tasks that I want you to work on. And so the individual can decide how much they want to invest in what they want that VA to do for ’em.

Ashley:
Yeah, I’ve hired VAs just for one little project that’s maybe took them just a couple of hours to do. And Tony, I know you use VAs a lot in your business. What is your best advice of where can someone find a VA and how to know when to hire them?

Tony:
I dunno, I think 15 virtual assistants across the different parts of our business right now. And some help with editing content, some help with the responding to guests, some help with other things. So definitely quite a few. We’ve gone a few different places to find virtual assistants. There are the online job boards. You have an Upwork, you have online jobs, dot pH, referrals from existing VAs like, Hey, do you know someone that might also be good at this? Oh yeah, my wife actually. Oh yeah, my brother, whoever it may be. So referrals are big. There are also quite a few large Facebook groups dedicated to virtual assistants, and I know that there’s some good folks looking for jobs inside of there. So that’s where we typically go. But in terms of when we know when to hire, much to what Ryan said, I think it’s trying to identify what are the things that you as the business owner are uniquely qualified to do that would maybe be difficult to delegate out, and how can you identify those things, focus on those things and try and delegate everything else.

Tony:
So for me and Sarah in our real estate business, responding to the guest isn’t necessarily something that we need to do. Most of it is just via messaging on Airbnb or whatever platform they’re booking for. They don’t even know, they can’t even tell who they’re talking to on the other side. So there is no immediate need for it to be us editing our YouTube videos. That is not something that we need to do. We need to be in front of the camera, but not necessarily the ones editing the YouTube videos. So we try and identify what are the things that we are uniquely qualified to do, focus on those and try and delegate the rest.

Ashley:
And you probably wouldn’t be that great at editing your own videos and it would probably take you way longer than someone else to do it too,

Tony:
Five times as long. Yeah, I think that’s the biggest thing, right? There’s two different ways where delegating becomes super beneficial. One is when you can delegate to someone else who can do a better job than you and do it quickly. I think that one makes sense for most people. But I think where most entrepreneurs struggle is the other side where they are actually pretty good at it, but it’s not the highest and best use of their time. And they know that if they delegated to someone else, it probably won’t be done as well. I think that’s where we typically struggle as entrepreneurs, but Dan Martel in his book, buy Back Your Time, he has this saying that 80% done by someone else is better than a hundred percent done by you. And that has always stuck with me after reading that book because it’s like, you’re right. It’s like I could do a hundred percent of it, but what am I giving up in order to chase that extra 20% of efficiency and is it really worth it? So yeah, I think that’s the harder part for entrepreneurs,

Ashley:
Ryan. So we’ve gone over what virtual assistants can do for you, which is a lot of the admin, the computer things, things that can be done virtually. But what about boots on the ground onsite, people that are on your team? So for example, rehabs, you’re doing these flips, you’ve rehabbed other properties. What is kind of your system in place for this? Are you the one swinging the hammer or are you using contractors and managing them?

Ryan:
Yeah, so my business partner, he has a construction background and so we mutually go in and look at this property and we both feel good about it. One of us will find it, we’ll vet it and make sure the numbers work. And then from there we put together a budget and he’s managing the subcontractors and making sure the project is on schedule. I’m going through, I’m reconciling the budget, I’m making sure, okay, I’m more of the backend capital financial oversight, whereas he’s more of the boots on the ground, okay, let’s go now I’m going to the property at least once a week. I want to be in the loop. I want to see things, I want to see how it’s going. But again, we bring to the table our skillset, we can then work together and really help create that synergy and make sure the project runs as smooth as possible. Because again, just going back to having a mastermind group, having a sounding board, he might think of something, I might think of something. And so then that way, again, we can bring our ideas to the table and make sure we have both get it through as quick as possible, but also make sure that profitable and as timely as possible as well.

Ashley:
I want to touch on that partnership piece real quick. It seems like your partnership is going well. What are a couple of things that you think have made your partnership successful that you can give out as advice to rookie listeners?

Ryan:
Yeah, I think the big thing is communication is huge. It was funny actually. I met my business partner on the BP forums, and so I’m just posting things there and he just reached out to me and we happened to live in the same town, so we got together for lunch and we just had a good rapport. And so communication is a big thing. Setting up your entity, having the documents, the JV agreement, making sure your i’s are t’s in cross, you want to always hope for the best, but you plan for the worst. You want to make sure you’ve got all of that background done. And then setting expectations like, okay, what are they doing? What am I doing? So then that way everything’s figured out. And just like everything as you go, as you grow, you learn. You learn what works, what didn’t work.

Ryan:
And so that’s how that process is going. Yeah, and I think that’s just the same thing for whatever partnership it is. I want to continue to, I’ve got friends and family that are living in these expensive markets and they’re like, Hey, I’d love to invest in your market. And so again, figuring out partnerships, that’s one of the nice things that really, again, coming from a different industry going into real estate is so refreshing because real estate investors are all about partnerships, all about sharing information. I mean, here we are right now, and so it, it’s better to be a small piece of a pie than not getting any pie at all.

Tony:
So I want to get into, I think the million dollar question here, which is the cash flows and the profits. Obviously a lot of folks who are getting into real estate are doing it because they want the additional income, they want the long-term wealth, they want the big chunks of cash. So let’s focus on the flips first. What right now is kind of your target for profit on an actual flip that you’re doing?

Ryan:
For me, I’m always looking at cash on cash return. I want to do better than say the standard stock market and things like that. For me, I’m looking for at least 10% cash on cash return. When I put it together, I’m looking at a worst case, best case and base case scenario and focus on that base case. And so looking at cash on cash return is more important to me than say, okay, what are we going to net out of this? And so that’s the approach that I look from a property flip standpoint,

Tony:
What is that target for you?

Ryan:
So minimum of 10%, 10% cash on cash return is what I’m looking for.

Tony:
And we were just talking to James, Dan about this actually on the flipping side, and I think he said his number. There you go, house flipping framework, there it is. And Jimmy said, I think that his target was 70% or something like that. It was something really high. I was like, oh man, I’ve never thought about looking at house flipping in that way in terms of cash on cash percentage, but it’s good to not just look at the raw number. And this is what Ash and I were saying. It’s good to not just look at the raw number that you’re getting as profit on a flip, but also, hey, what is the actual return on the money that you’re putting down? Because maybe you did get this big chunk of cash, but what if you have to put a bigger chunk of cash down to get there and what does that actually look like?

Ashley:
And it took you two years to do the flip too, so you don’t want to, that over two years is not actually that great of return. You could have put it in an index fund and made more

Tony:
And potentially made more. Right.

Ryan:
And again, 10% is like a minimum because I think stock market eight 9% is kind of your average, and so I want to at least do better than that. But yeah, I mean, best case scenario, 20, 30, maybe 40%, but again, being conservative, I think it’s good to set up what are those minimums

Tony:
And then cashflow and the actual rentals. Ryan, where are you at right now and what would you say is your long-term goal maybe in the next five to 10 years?

Ryan:
Yeah, so my current cashflow are about $1,700 a month, but again, going back to Chad Carson’s model, if I eliminate all of those debts or minimize ’em, then I’m over 5,000 a month right now. And so again, I don’t want to necessarily grow exponentially. I’d like to start reinvesting that and starting to snowball those specific properties. But going back to burring with rates are starting to come down, but actually when I bird out of my property, that first burr, I reduced my cashflow. It’s still cashflow at about $150 a month, but then I took those funds and I put it into the duplex, which is cashflowing like $900 a month. And so I’m always looking like, what’s the opportunity with that money? It’s like, okay, yep. I’m going to get burnt a little bit on this side, but what else can I do with it on this side?

Ashley:
Ryan, let’s talk about one of those opportunities you touched on as to what to do with that money, that capital. And you talked about snowball, and all I can think of is Dave Ramsey, the snowball effect to pay off your debt, starting with the highest interest rate and working your way. But are you planning on doing that with your rentals as far as, you know what, I think my money is going to be best spent paying down the mortgage on this rental, and then that just increased my cashflow by X amount. So we hear a lot of investors just ready to go to the next deal, the next deal, the next deal, and just acquire. But let’s talk about that strategy of actually paying off your mortgages to have your cashflow increased.

Ryan:
Yeah, so one of the tools that I have is I have a heloc, and so that’s some liquid capital that I can use. And so I’ll funnel cash to that, and so I can again still have use of it and use that as it makes sense. But once I get to a certain point, then I’ll start to say, okay, just like the Dave Ramsey model, which property do I have the quickest opportunity for paying off? And I’ll start attacking that. I’ll start attacking that one and paying that one off with the rates starting to shift again, buying these properties when rates were climbing, probably next year I’m going to refinance a couple of ’em. And my goal, my hope is that at that point I’m not going to, even though they’ve appreciated, my goal is not necessarily to pull out that equity, it’s just okay, get more cashflow at that point. So then that’s the model, and then when it makes sense, make a purchase and then just grow that portfolio from there.

Ashley:
Yeah, I think that’s really a great point. And something that other investors should be looking at, especially if you did buy a property that has a pretty high interest rate, is paying off that debt or even going and refinancing that property at a lower rate to minimize your payments and to make them lower. I have a property that has interest rate of like 8.25%, and that property also has flood insurance on it, so as a two year prepayment penalty, so if I pay that loan off within two years, I will have to pay 2% on whatever the balance is that I’m paying off. And the first year, the second year 1%. And so my plan in two years is to completely pay off that mortgage, get rid of that, and because I’m getting rid of that 8.25%, I’m also getting rid of the flood insurance because there’s very, very unlikely chances going to be a flood in this area, even though it’s required by the mortgage.

Ashley:
But I’m going to take that risk and self-insure myself if there is a flood and not pay. I think the premium is like $2,000 a year for that flood insurance that I’ll be able to eliminate along with paying off that high interest rate loan. So I’m looking at, I need to have that cash available in two years when I get rid of my prepayment penalty, and that is going to be worth it to me then taking that money and investing it elsewhere in two years at that time, and maybe things will change, but there’s always that strategy of not even having to find the next deal, but seeing how you can maximize your capital and the deals you already have too. Okay. So Ryan, to wrap us up here, what is some last piece of advice that you have for rookie investors just getting started in their real estate investing journey?

Ryan:
Boy, the first thing is, I’d say two things. First is bet on yourself. Bet on yourself. Go out there and take the risk. Get the education, put yourself out there. Get comfortable with being uncomfortable. And I think that’s just a great thing for entrepreneurship as a general key. But then the second part of it is, again, we talked about earlier setting, surround yourself with people that push you to be better. Setting up an accountability group, going to meetups, networking, going to be pcon, doing those things that stretch you. Again, if I’m comfortable, I’m not growing. So just continue to push those limits. And again, just invest in yourself and bet on yourself.

Ashley:
Well, Ryan, thank you so much for joining us on the Real Estate Rookie Podcast. Where can people reach out to you and find out more information about you?

Ryan:
Yeah, so hopefully I’m fairly easy to find online, but you can find me on Instagram. My handle is invest in Flex, so the letter n Flex. Also, you can find me on the BP forums and all over. Hopefully you can find me on the websites and everything online too.

Ashley:
Awesome. Thank you so much. And if you’re watching this on YouTube, make sure to, and if you’re not already, subscribe to our channel. We’re trying to reach a hundred thousand subscribers by the end of the year. So Ryan, thank you so much. I’m Ashley. And he’s Tony. And we’ll see you on the next episode of Real Estate, Rick.