Ashley:
This is Real Estate Rookie episode 424. BiggerPockets has bootcamps, but should you run your portfolio like the US Army, today’s guest does and will teach how with some key tactical steps. I’m Ashley Care 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. Now, today we’re bringing back someone special, his name’s Angel. Angel was a previous guest on episode 127 of the Real Estate Rookie Podcast, and he’s also a lieutenant colonel in the US Army and has a PhD in psychology. Now we know that you’re passionate about sharing what you’ve learned with those around you, angel. So we’re excited to have you back, brother. Thank you for coming back for a second time to the Real Estate Rookie Podcast.

Angel :
Hey, thanks for having me. It’s so great seeing you both and to be here with you all again. So thank you so much for the opportunity.

Ashley:
Angel, fill us in please with what has happened since you were last on the Real Estate Rookie podcast. How has your portfolio changed since then?

Angel :
So if I remember correctly, rookie episode 1 27, which we appropriately called the $40,000 mistake, definitely was a huge learning lesson for me as my family and I were building our portfolio for our real estate portfolio. But since then, we grew from what was three properties and four units. We grew to five properties, six units, and then we took a tactical pause there. Again, as Tony mentioned, I’m a lieutenant colonel in the US Army. I’m a space operations officer and been serving now 23 years going on to my 24th year. And so as promotions continue to move up in stature and a rank there, so does responsibility. And so we took a tactical pause in building this portfolio and we wanted to take a step back and look at the properties that we did have or do have and made sure that all of them were maximizing the profits, we’re making them tenant proofs, but we’re really doing the best that we can with what we’ve got to solidify systems and processes and maximize that part of the portfolio that we have before we pivot and move into another strategy that we’re looking into, which potentially might be short-term rental, but really taking that tactical pause to build systems so that as we continue to expand and get into that acquisition mode, we’re doing it in an efficient, effective way because I’m still serving and the Army is still a very busy organization to be a part of.
So I wanted to make sure we had a really efficient system.

Ashley:
Angel, first of all, thank you for your 20 years of service and can you elaborate a little bit more on what are some of the things that you are doing to stabilize your property? You mentioned tenant proofing. Can you kind of tell us what that is and some other things you’re working on?

Angel :
Sure. So one of the things that we’re always looking for opportunities and doing it in a natural way. We’re not forcing this and we’re taking care of our tenants, but really looking at our rents that we’re charging for our tenants. Are we really maximizing the amount of rents that we’re charging? Is there opportunities to make improvement to the properties that will allow us to increase it maybe during the next turnover? So for example, one of our properties in Arizona, a lot of the properties in Arizona near that Chandler Gilbert area have a lot of rock landscapes. So instead of grass, people either put artificial turf or they have just rock landscape. So in the back of the property, single family home that we purchased, it’s just rock landscape. It’s just literally just rocks. And so we’ve been able to charge pretty good rent there, but I know that we could charge more if we put artificial turf in the back and we really make it look a lot nicer and more functional for the families that rent.
That’s a project that we’re looking to do here this year. Again, when we have that turnover with tenants, we can make that improvement, increase the rent, and then also looking at the structures themselves. So in one of our properties in Illinois, the $40,000 mistake where we built the basement and we got all that taken care of, the property manager’s like, Hey, angel, we may need to do a section of the roof and just make sure it’s good to go. And I told him, Mike, let’s take care of the roof. Let’s take care of the front doors. Let’s take care of the windows. We want to make sure that our properties stand the test of time because these are properties that are going to be passed down to our daughter. And part of that generational wealth plan that we’ve got, and that’s our why in investing.

Tony:
Andrew, I think it’s a really important point to not always focus on aggressive scale. Sometimes you have to slow things down just a little bit so that you can reinforce the foundation that you’re building. And I think Ashley’s hit a similar point in her journey. I know we’ve done it in ours as well where we had to slow down on acquisition to focus on riding the ship because sometimes you could move so fast, things start to break. But you mentioned that you were kind of shifting your focus maybe a little bit. So I guess what kind of properties are you hunting for now?

Angel :
Yeah, so you go with what the market calls for. And so I’ve always been a long distance real estate investor because again, Miami was so expensive. My hometown, California was expensive too. And so really looking long distance and building those systems to invest across states. But we’ve noticed where I’m stationed here in Fort Carson, Colorado, Colorado Springs and a lot of the Colorado neighboring cities, there really is a fairly high demand for short-term midterm rentals. I mean, especially in military communities when families are doing what is called a primary change of station or PCSing into or PCSing out of families need that transitional space while they find that permanent housing and short terms really are again, in my opinion, are successful around those military areas. And so being here in Colorado Springs and being with Army Space, it’s an opportunity for us. And so Tony been following a lot of your work and a lot of the stuff that you’re putting out with your wife and really just learning, and it just goes to show, as I tell the rookies and the bootcamps that I’m a part of, is that you could always commit to a strategy, but don’t feel that that’s going to be the one you follow for the rest of your life.
You could always pivot based off of what works best in the space and time in which you’re in. And for now, it’s short-term rentals. So now I’m turning into the rookie for short-term rentals, but we’re excited because we’ve gotten the reps and sets with the long terms, and we have our systems in place that will translate into short terms.

Ashley:
Angel, what are some of the things that you’re doing to prepare yourself? You mentioned that you’re a rookie in this, so what are some of the steps you are taking to be able to prepare to purchase that short-term rental?

Angel :
So look in the military and we talk about systems, and that’s really a wonderful question there, Ashley, because a lot of times as rookies, we start educating ourselves into what it is that we want to do, but then once we start executing, we start thinking about how are we’re going to build these systems and how do we build the system and what systems are people using? And so I have adopted a hundred percent the US Army’s system. I mean, I’ve deployed three times already, and if I could go to seven different countries and send 300 plus soldiers across all those country, 14 different sites and send millions of dollars across the pond into theater to execute mission, and the Army’s doing something right, especially being a global power that we are, the Army’s doing something right? So why not take the systems that I’ve already been trained on and use ’em for real estate?
So to answer your question, I’m building SOPs, right? I’m building, I’m doing the research, the mission analysis right now. And okay, if we’re going to move into short-term properties, where are those hotspots in town where people on the calendars are most utilized for short-term rentals? What are people doing to purchase furniture to furnish these things? Going to meetups, talking to other investors that are in this type of strategy and what works for them, what doesn’t work for them? So really we’re in that mission analysis phase of this in understanding what it is that we’re going to get into. And then once we do that, then it’s building the team who’s going to be the manager for this? What realtor am I going to be working with here in this local area? So the same systems that I use to invest out of state, I’m going to do the same here with the caveat of just the information on what it is that I need to be successful for short-term rentals. So really we’re just in that mission analysis phase right now.

Ashley:
We’re going to take a short break, but when we get back, we’re going to talk about the five tactical tips you need to know and how to balance the mental and personal side of investing. Okay. Welcome back. We just got into Angel’s investing, what he has done since the last time he was on the episode and how he’s moving into a different strategy. So Angel, how are you differentiating that? Personal versus tactical?

Angel :
Yeah, so tactical, there’s a lot of intentionality in the way that the military, the US Army executes global operations. And what’s beautiful about it is regardless of where you’re at in the military, what station you’re at, regardless of what part of the world, everything that we do is universal. From me to another officer to another enlisted soldier, we all execute the same standards and procedures throughout the military. And so what I’ve done is I have incorporated many of those tactics, many of those strategies into my investment strategy. And lemme tell you what, it didn’t hit me. It did not hit me until 2019 when I was stationed over in Kuwait going between Kuwait and Iraq. And I’ll never forget this, it was two o’clock in the morning of the time difference. And my wife sends me a message on my phone and she’s like, Hey, our tenant in Georgia does not have air condition.
Now team, if y’all have ever been to Georgia in the summer, not only is it humid, but it’s very hot. And I take it very personally when our tenants are not enjoying the property. And so we had to spring to action, but I didn’t have anything. I didn’t know what HVAC teams or who to call. I had no idea of what to do there. And so there I am at two in the morning on this slow internet over there in Kuwait trying to find out these team members and who’s going to help us out. And I vowed never again will something come to me like that and I wouldn’t be ready to go. So the first thing that we did was we started to develop what is called battle drills. And a battle drill in the US Army is when anything goes wrong, we have a procedure to react to it that whether you, myself, my soldier, my teammate, whoever it is, if something goes wrong, if is a battle drill that we use to execute a solution for that.
And so what we’ve been doing is building these battle drills so that if, hey, if the plumbing, we have a leak with water, or if we have the HVAC system that goes out, or if we have a vacancy, what are those battle drills that we’re going to execute? So whether I’m here, my wife’s here, my family’s here, whoever it is, could pick up this battle drill and execute and know, okay, vacancy, check for paint, check for carpeting, do we have to replace? If yes, then this. If no, then this. Check the landscape. Do we need to do some fresh mulch? So that’s a little bit more appealing to the new tenants that are coming through. Is there opportunity to check rent? So there’s these battle drills that we execute that, again, regardless of me being here or not, anyone could pick it up and roll with.

Tony:
Yeah, and I think there’s a lot of value because I feel like Ash and I have both have been in those situations where it’s like we would ideally only to have to solve this problem once. And when you can solve it, once you memorialize what those, what the correct steps are, it becomes less of an issue the second time around, you call ’em battle drills, but I’m curious, angel, are you actually drilling your team on what to do? Or is it just like, Hey, here’s the action plan

Angel :
Just in case, Hey, listen, BiggerPockets said this wasn’t a hobby. This is a business, this is a business. And the same thing, right? The same thing with my soldiers. It’s like we developed the SOP and we run through it. Now we’re not doing rehearsals. I don’t have a clock out and say, all right, baby, ready go. And then we’re running the battle drills and she’s low crawling through the living room, like I got the bender. But it’s one of those that we do have those as we talk later on into another thing that we do when we talk about battle rhythms. But we sit down and we talk about what it is that can go wrong, and we war gaming. So again, we look at the property and say, Hey, look, you’ve got access to all of the contractors, all of the team members that could help us if something goes wrong from plumbers, electricians, HVAC personnel, property managers, all these different things that if something goes wrong, we know where to go to find the information for that property.
We know who to call if there’s a vacancy, like the key events like vacancies, if heaven forbid there’s something catastrophic that happens to the house, it catches on fire or something we know to call the insurance, we kind of rehearse that and talk through it and then just check in with each other every month on just the properties as we’re going through it just to make sure that we know what to do if something happens. So again, it’s not as rigid in the military as we do in the military, but nonetheless, never will there be a problem that only I know how to solve. And that’s the key thing, removing myself from it, because as life is busy, I’m still serving the military. It ain’t nine to five, it’s five 30 to eight o’clock at night, sometimes seven o’clock. I’m a husband, I’m a father, life gets busy. So I want to make sure that I’m able to remove myself from that and have other team members assist with the process knowing that what they’re doing is what I would do if I was in the situation executing

Ashley:
Angel. I think another thing to point out is the mental strain of having a problem come up with your properties as to the agony of, oh my God, this pipe just burst. What am I going to do? And last week this happened with Daryl where he just said, I had the worst day. All of these things happened. And I was like, oh my God, what? Go ahead. Tell me I could take it. And everything that he said happened, his role was to make a phone call for the vendor to come and schedule it with the vendor for them to come and repair it. And I thought, oh my God, I had an amazing day. I didn’t even know any of this was going on, and it’s all taken care of by the time I’m hearing about it. The second thing was for Daryl, all he had to do was make those phone calls and do the scheduling, which that is definitely more stressful than I had to deal with, but we looked at it as to that was so great that we have these vendors set up and these action plans that when something does go wrong, we have somebody we can rely on who’s actually going to solve the problem and we don’t have to try and figure it out.
That was mind blowing, like, oh my gosh, actually, we kind of are getting less, less stress as we start to build out more systems and processes and more vendors we can rely on. And I think that’s kind of in the situation you’re in where when you are busy with the army, you don’t have to worry. You don’t have to think about these things. And your wife, I can’t imagine the stress that’s taken off of her of not having to figure out what to do. She just has to follow the plan and make the phone calls for the situation to be resolved. Angel, do you think you could give us an example of one of those drills as to what exactly does it say on it, and what are the key points that someone needs to add into theirs?

Angel :
Yeah, so literally yesterday, again, I’m active duty military, very busy work has its great days, and work has its stressful days that we work through. And so yesterday I got home and immediately and my wife’s like, Hey, some letters came in from one of our properties, letters, not a letter, letters, plural letters. And so I see the HOA with letters and I open up these letters and it was just photos of the front of the property that the tenant had the garbage in front and then had a bag of garbage on the car. And I mean, it was ridiculous, but it was three different letters that we got with, Hey, this is your warning. Hey, we’re not kidding. Hey, now we might be moving into a fine. And then on top of that, hearing from the other property managers, I’m checking emails that, Hey, listen, there’s some exposed nails that the winds from the tree that blew the tree in Illinois exposed a bit of the roof.
So we’re going to have to get that taken care of, but then we’re also going to have to fix the front weather door on the property. So everything started coming in. So okay, team, listen, real estate, yeah, it’s great when we hear the podcasts and all of that, but there’s some hard work to be done and you never know what’s going to happen or what letters are going to come, but that’s why we need to have systems. So what did I do? Well, in the military, we use MS teams, Microsoft teams. So that’s what I use with my property manager. I get into Microsoft Teams, we have folders that are in there. I put a copy of these violation notices inside of a folder, and then there’s a planner app, which is almost like a Tasker app. And I put it into my property manager’s area and I task it to him and say, Hey, Mike, this one’s for you.
Can you reach out to the tenant? And sure enough, Ashley, the next morning at six 30, he’s like, Hey, I got it ready to go. I’ve already notified the tenant. I’ll stop by today to talk to him and make sure that they’re good to go. One less thing. The other property manager for the Illinois and the tree and all of that same thing in the planner task app. Hey Doug, I need your support on this. Let’s go ahead and move forward with the project. And the next day he came back and said, Hey, we’re ready to go. I’ve already got someone coming out to take care of it this week. And that’s it. And that’s it. Yeah. Is it stressful that it’s happening? And oh my goodness, this is crazy. But that’s what separates an investor from just a hobbyist when you work through these problems. I believe in the end, this is going to be a very lucrative thing for my family and I, and that’s why it’s all worth working through these challenges. But you got to have systems because if not, if you’re having a bad day and you don’t know what to do with this violation letter and you’re going to be in a very hard place.

Ashley:
So Angel, you have been a great asset to the rookie bootcamps. I want to go over some of the questions that are consistently asked in the bootcamp, and you have five tactical tips that you can give rookies. Do you want to start with number one?

Angel :
Absolutely. When it comes to the tactical tips that I share with the rookies, number one is what I had talked about a little bit before, which is those battle drills have a battle drill. When that violation notice comes in, you’ve got a method to execute. When your property manager calls you and says, Hey, the tenant’s leaving early this month, you have a battle drill. When you have a vacancy for more than a month and you’re going into your second month and into your third month, you’ve got a battle drill, you’ve got something that responds to a crisis, a problem, or anything that comes your way to remove the stress, and then focus goes onto the action.

Tony:
Where are you storing these? In what format are you saving these? Is it a series of videos that you’re recording? Is it a PDF? Is it an Excel checklist? Where are you storing and sharing all this information?

Angel :
Yeah, so right now, again, just taking a chapter out of the military, it’s a Word document that has on the front, on the top of it what the problem is. So tenant vacancy, and then it has a checklist of a step-by-step on the things that we do when there’s a tenant vacancy, which are my expectations for the property manager. The property manager has their checklist that they’re going to do. But if you don’t manage your property managers and share with them your expectations, and they’re just going to do what they need to do to find another tenant in there, and not to say that it’s bad or anything, but I want to make sure that their actions are in alignment with what we want. So make sure that the carpeting is good. If there’s carpet in that property, how’s the floor is, do we need to do some fresh paint only do fresh paint if we really need fresh paint and not for sake of doing paint, because that’s a cost. So we store that in two places in the MS teams folders for my property managers, and then Google Drive for the family. Again, my friends and families have access to both, but Google Drive is a little bit easier for us to access on the phone, and you don’t need to have certain knowledge as to how to operate MS teams. Google Drive is pretty easy, just like Dropbox, but that’s where we store it.

Tony:
And then I guess one follow up question to that, using Microsoft Teams and getting your property manager to integrate into those systems, do you feel like it’s maybe a bit of a challenge to find a pm who’s going to adopt or adapt to your style of technology, or was it pretty frictionless to get them to get on board with what you wanted?

Angel :
Everyone out there wants to make money. Everyone out there wants to be successful. Property managers get out there, they want to build their portfolio of properties that they manage. And one of the things that they, I assume in speaking with the ones that work for us is that they want a property that’s, it’s an easy property. They don’t have to think too much about it. They could just check on it, but it doesn’t really cause a lot of hassle for them. So in that initial interviewing and try to find your teammate, we have certain markets that we’re looking at, and so it’s that conversation like, Hey, we’re going to start building a portfolio there in that market. This is the system that we’ve got. We’re going to make it very easy for you, but this is what we’re going to need. And some are like, no, we’re good.
Some don’t even use technology. But then you find that right one that’s like, yeah, too easy. Let’s go. Let’s do it. Because it’s not a lot that we’re doing in there. Again, it’s just the repository of files. It’s a notification to them that, Hey, angel has a task for you, and it keeps it in a place that they could always refer back to. So it wasn’t a hard sell when you find the right one. And I thought it was going to be a challenge at first too, but nope, it was very easy. Again, when you make it easy for them and you give them the long-term vision of we all want to be successful here together and build this portfolio together.

Ashley:
So we’ve gone over tactical tip number one that you need to have those SOPs in place, have your checklists, and now tactical two.

Angel :
Yeah, so tactical tip number two is what we call in the military, the PACE plan, PACE, which is your primary, your alternate, your contingent, and your emergency. Any team member that I have with our family that is a part of our portfolio, from your realtor to your property manager, to your lender, to your contractor, I would be remiss if I would think that they’re going to stick with me forever. My property manager, at some points like Angel, I’m going to go fishing, I’m done, I’m out of here, and off goes, my property manager or my lender might move branches or might leave the bank that they’re currently working at. Same thing with contractors. You always got to have a backup to the backup, to the backup, to the backup, and that gives you peace of mind. So we have what is called the PACE plan.
So in every single one of those property folders that we talked about on teams and on Google Drive, there is a roster there that it says Team resources. I’m looking at it right now. It says Team resources. When you click that Excel document, it has every single type of vendor, every single type of teammate that I would need for that property listed, electricians, plumbers, all that, contractors, and there’s at least four or five names. It’s not personal with my property manager, but again, if they leave, I don’t want to find myself in a place of, well, who’s going to be the next property manager? No problem. Thank you for everything you’ve done for us. I’ve got three more people that I’m going to call that have already pre-vetted and we’re ready to go. And that’s what I learned at two o’clock in the morning out there in Kuwait when I’m trying to find an HVAC person for my family to get to this tenant in Georgia. And I vowed never again. We’re going to have a pace plan for everything.

Ashley:
Angel, what are you doing in that pre-vet process? Because you already have your primary in place, and I’m assuming that’s who where you are currently using. Have you actually tested and tried out the backup vendors or is this by referrals? How are you actually vetting them?

Angel :
David Green, when I first started this journey, and I was reading the long distance real estate investor book that he wrote, he always said Rock stars know rock stars. And I truly believe that. So as I’m talking to the lender, I typically start with the lender and finding a good lender to make sure that they could help us finance the properties. Once I find a good lender, then I start asking them, Hey, do you know of a good realtor in the area? Because the banks that I go to are local banks. I don’t go to national banks. I go to local banks in the markets that I’m investing, those community banks, those local banks, those local branches, I have had the most success with the best rates in local, local, local. And so I asked that local branch or the lender, Hey, who’s a great realtor out here that you’d recommend?
And then he’d recommend the realtor. And then I’m talking to the realtor, Hey, do you know of a property manager? Oh, you manage properties? Oh, perfect, so I could work through you for both. Awesome. Hey, listen, who’s going to be a good contractor or good handy person that could take care of just repairs? Oh, angel, I’ve got someone in-house to take care of that for us. Fantastic. And that’s how I’ve been able to build teams in all of these different markets. Trust, but validate though, right? The military always says trust, but validate, and that’s what I do. I look on Facebook, I see if they have any portfolios like the contractors or have the work that they’ve done. So you sort of vet them too. But I’ve had great success in that rock stars know rockstar mentality in really building a team that is trustworthy and that know each other as well in those areas.

Tony:
Ash, one question for you, because I think we do this similarly, but are you using Monday for a lot of your property management stuff? Right now,

Ashley:
Not so much for the property management because I use AppFolio for that, but we do have our checklist in Monday. But as far as assigning tasks, we can do all that through AppFolio.

Tony:
Gotcha. So for us, we have much like Angel, like how you said you have a spreadsheet with all your different vendors. We have a vendor board inside of Monday, and it has our primary electrician, the secondary, and the third. We don’t have a fourth, I don’t think for any of ’em. So I might need to go in there and app. I think for most we have three options, but for us, if something happens, our virtual assistant team knows who our primary contact is, and if for whatever reason that person isn’t available, then they just kind of go down and listens to they find someone that says yes. And then within their SOP, they’re like, if any of those three that we already have listed aren’t available, then it’s on them to go out and source someone else that can hopefully solve that problem for us. So that’s kind of how it works for us. I mean, Ashley, I guess I’m just curious how it rents in your business.

Ashley:
So we actually have a call center where someone can call in twenty four seven to submit a maintenance request, or they can do it through their online portal. And then we have an SOP as to if it is a plumbing issue, this is the vendor gets assigned to. So in our system, it will automatically assign the vendor. The vendor has, I think it’s 30 minutes to respond and accept the work order. And if they don’t, then it’s declined and it goes on to the next vendor. Then from there, they get the email, some of ’em are signed up for a text with the work order details, the contact information for the tenant, and then they just actually contact the tenant directly and schedule to have the maintenance completed. Or we have a section where when the tenant does the work order, they can go ahead and put in when they’re available, and then the vendor can just use those dates and go ahead and schedule it.
The tenant gets a notification that it’s scheduled. That’s super cool. So the maintenance process is actually when we receive a maintenance request is very hands off, hands off. The only thing that comes up is if they’re not very clear, we ask for them to submit pictures and things like that, but sometimes residents don’t. But usually the metrics we have set in there for the work orders are pretty clear as to who it should get assigned to. And we don’t really have any issues with that yet, but could see it happening. So we’re going to take a short break now, and when we come back, we’re going to continue hearing about the tactical tips that Angel has for us. Thank you guys so much for taking the time to check out our show sponsors just like you guys. They make the show happen. So Angel, what is tactical tip number three?

Angel :
So now we’ve built our battle drills. Now we’ve built our pace plan, and so now we’re really building some momentum here and we’re getting into the groove of things. And in the military we call that a battle rhythm. When a soldier arrives to duty in a new organization, typically one of the first things they ask are, Hey, what’s the battle rhythm here? When are the set meetings that we have, the set events that we have so that I can then build my schedule and my calendar off of that and make sure that I’m at the right place at the right time in the right uniform? And so in our business, we have what is called these battle rhythms, and these are weekly, quarterly, monthly touch points that we do with our team members is also us looking at our SOPs, us looking at our battle drills and making sure that there’s no gaps in there that we need to fill.
It’s also looking at our finances and how is it that we’re putting buckets of money towards different things. If we’re going to prepare for acquisition mode, then let’s start putting money inside of that bucket, that war chest so that we can start building the portfolio. Or if we’re looking to enhance the properties that we have already, like I said, the artificial turf there in Arizona, so that on the next turnover we could renovate and then get a little bit more rent from that, because people want to have that backyard that’s a bit more functional than just a rock landscape. And so do we put it into that bucket. So it’s different buckets of money that we look at that we touch with our battle rhythm, and then also just staying up to date with trends and staying up to date with things as well. So every single day when I drive to work and I drive back, my battle rhythm is I’m listening to a podcast, I’m listening to something that’s going to make me better and smarter that day in whatever topic I’m interested in. So whether it’s running or whether it’s working out or whether it’s real estate investing, I’m always listening to something to help me become much more dangerous in that capacity. Right now, the flavor is short-term rentals. So that’s something that I’m definitely listening to a lot of Tony’s information and a lot of stuff from BiggerPockets on that to start building that mission analysis for

Ashley:
What? Talking about short-term rentals. Tony, I have to ask you something about short-term rentals and Angel. Maybe in your research you’ll even know what this means or if this is even cool or not a short-term rental, but I was looking at my listing the other day looking at it as just a viewer, somebody who went and searched for it, and I haven’t done that in a very long time for our a-frame property. And there was a little badge there that’s never been there before, and it said in the top 10% of homes or something like that. Is this actually something cool or is this something they’re just giving out to everybody?

Tony:
No, it is. So Airbnb made some new changes over the last year, and one of the things they changed was how they’re displaying the top properties to guests, and there’s the guest favorite badge, which is new, and now in addition to that, they’re putting the top 10% and the top 5%. So yeah, I mean, it is a coveted thing. I think a few of our listings have that right now, but we still have some that don’t. So the fact that you’ve got that Ashley means you’re doing something well out there, and then I

Ashley:
Got to give my manager a bonus, that’s what that means because her and the cleaner do a phenomenal job. So yeah, that’s what that means. Yeah, I was just really curious about that. I’d never seen that before.

Angel :
And I want to point out the power of knowledge. I want to point out on the psychological front, as Ashley’s asking him that question, he’s there with his hands folded, and he’s just there listening. Notice the minute she said badge, he’s already shaking his head, I already got the answer to this. I already got the answer to this. And without breaking anything. As soon as she’s done asking her question, boom, he’s like, yeah, absolutely. This is Airbnb’s new product. Boom, boom, boom, boom, boom, boom. And that’s the power of knowledge. That’s the power of knowledge. We’re all rookies in one capacity or the other. And this is exactly why that battle rhythm of learning and understanding and educating makes you really dangerous because once you know, then you’re ready to execute and listen, can I offer this? Can I offer a tactical commercial break here?
As you all have your breaks, let me tell you the power of a half inch binder, let me tell you, this is going to be kind of crazy, but let tell you the power of a half inch binder, okay, I have gone to, again, in the military, we have what is called pre-com checks, pre-com inspections, PCCs and PCIs. When you’re ready to execute, there are these checks that soldiers do on each other. Hey, do you have water? Hey, do you have your ID tags? Are you in the right uniform? Do we have the right gear? Do you have everything that you need to roll out and execute mission? Every single engagement that I go to, whether it’s with my realtor, with the lender, the power of a half inch binder, let me tell you what, before I engage in any sort of interaction with a team member, I do all the homework that I need.
So if I’m closing on a property, do I have a notarized copy of all the papers that I’m signing? Do I have all the papers as backup to the backup that my lender might need? Even when we’re at the closing table and I put ’em in these sheet protectors, I put ’em in just like a little sheet protector, and I walk in there and I just leave it right on the table. And people are looking at that folder like, Hey, I don’t know what he’s got in there, but my man looks pretty prepared for something. And any question that they had, as cool as Tony answered the question on the badge of Airbnb is as cool and ready as I am with all the papers that are needed as a backup in which my lender, I remember in our last closing was like, angel, you probably have been one of the most prepared customers we’ve had here with all the stuff that you had.
I’m like, listen, I take this thing very serious. When I went to a car dealership to buy my RAV4, it was on the BiggerPockets Facebook group, my 99 Corolla affectionately called Nana, after I did a 360 on the highway out here with the snow in Colorado, and I’m from Miami, I had to get myself a RAV4, but I pointed one of the properties, cashflow for that vehicle, showed up to the dealership with all the facts, all the numbers, everything that I needed to make the offer inside of this folder. And they could not come at me sideways because I did all of the research ahead of time, and I walked around that dealership with a half inch binder, to which I completely freaked them out. But team half inch binder, do your PCCs, do your PCIs be ready to go as you’re interacting with your team members so that you’re ready. And they appreciate that. They appreciate when their customer is prepared and ready to go. So just a tactical commercial break there to share an extra tool that I use that power of the half inch binder.

Ashley:
Yeah, I think that’s great. And whether someone actually puts it in a binder, does it online or does both, the power of actually writing down everything has such an impact, especially if you do have to show it to someone. A lot of people are visual learners where it’s so much easier to visually see and also saves them time so they don’t have to write it down themselves if you just rattle it off. And you’re most likely going to forget steps in the process too if you’re just going off the cuff. But what is tactical? Step number four?

Angel :
So number four is that home base number four is what is called the standard operating procedures, the SOPs. It’s that it’s that baseline that stays the same for your business. So for us, our SOP is our filing system that we use and for every single one of our properties as it’s built in Google Drive and copied over into MS teams. So we have a copy on both platforms as a redundancy. So heaven forbid something happens to Google Drive, we got a backup there, and then we have a local backup, but it’s a folder structure that we have from the start of the process all the way to the end, and they all look the same regardless of the property. So from pre-purchase and closing bank and mortgage property management, tenant information and lease expenses, marketing and photos, taxes, CapEx, timelines, insurance and warranty, and HOA, those are all the folders that we use.
So that as different things come in for our properties, that’s the following system that we use in those different areas. So when taxes, for example, comes around every single year when we do our taxes, that expense folder has an Excel document in it where I capture with my wife all of the expenses towards that property, and they’re categorized in the categories that IRS recognizes. So utilities, advertising, whatever those, I think it was like 12 different ones, I’d have to open it up. But those categories that the IRS utilizes for write-offs towards properties, that’s what I share with our accountant, our CPA, and it makes it so much easier for them to just do our taxes. So when tax season comes around, we go to our folders, we pull out the information that we need on that team resources is our CPA with three other CPAs in there in case something happens to the first one, and we send it off and we’re ready to go. And I’ll tell you what, tax season is not stressful at all. It it’s pretty easy. And so we ran through it this year and we tested it, but that’s the power of having a solid SOP filing system for us. But then also the SOP outlines utilization of those battle drills so that again, someone could take our system and implement it regardless if it’s myself or my wife. Someone else could take the helm and keep things going. But you’ve got to have a standard operating procedure to baseline how you do your execute your business.

Tony:
I feel like the SOPs are one of the most underutilized tools for real estate investors, especially Ricky real estate investors, because like you said, angel, if something happens in your business, you shouldn’t be the only person with knowledge on how to solve that. And the SOP is a solution to make sure that knowledge is widespread. I know for us what our SOPs looked like on property number one is very different than what they look like now with 30 properties in the boutique hotel. So do you believe that SOPs are a finite thing that once it’s done, it’s written in stone or how have yours maybe adapted and changed over time?

Angel :
Yeah, it evolves. It evolves, especially as you, you gain more knowledge in the process, the reps and sets, as you always will hear out there. When I started this journey five, six years ago, the things that I thought I knew back then are far different than what I see and what I’ve experienced now. But that comes with experience. That comes with taking action and the experience. So it’s an evolving product. A problem is going to come up that may be a unique problem, and you’re going to deal with that problem, but make sure that you capture that either into a battle drill or incorporate into your SOP. So if it does happen again, you’ve got a solution to it. And there’s always going to be a unique problem set. There’s always going to be something unique that’s not captured in there. But that’s why during that battle rhythm that we have, we look at the SOPs, we look at our battle drills.
Does this make sense? Do we need to make any adjustments to anything? And you fine tune. And the beautiful thing is that my wife and I, we do that together. We do that together. It’s not like me over here in my little world, and she’s over there in her world. We’re doing this together because that is our why to do this together, to build this portfolio that I never had growing up from blue collar family, working to live in Miami and now understanding the power of real estate investing and then allowing this to be passed off to our daughter and her inheriting this. So that’s our why, and that’s why we’re creating all of these so that we could continue being successful with the cashflow and passing it off to her. We could enjoy some great things in life.

Tony:
And it reminds me of the Mike Tyson quote, everyone’s got a plan until they get punched in the face. Have you guys heard that one? A hundred percent. And it’s kind of like how the SOPs are, right? It’s like you plan it out and you think it works, but once you actually put it to the fire, that’s when you recognize where you need to change and make adjustments. Now, I think one of the things, angel, that probably holds people back from creating these SOPs is that it can seem a little daunting, right? Like, oh, I have to document everything within my business. So I guess the question for you is how did you identify which SOPs to focus on first?

Angel :
So it’s a step at a time, right? I mean, it took me eight years to complete my doctoral degree. When people typically do it in three years or four years, you just take it a step at a time. And so what we did was we started with just the folder system and okay, we are going through this pre-purchase process with appraisers, and you’ve got people that are coming out to look at the properties, and I’ve got documentations that are required of us to our lender. So we start saving those things. And you purchased the first property and now you have this semi folder system. And then now that you’ve got this semi folder system and you’ve got tenants and you’ve got a property manager, there’s things that you’re learning as you’re managing the manager or you’re running the property yourself and okay, what does a lease look like?
How are we going to build a lease? And so you start capturing those actions. And it’s not a dissertation that you’re drafting. It doesn’t have to be a published SOP with 200 pages, but it’s something that for next time you could refer back to. And it makes the process just that much easier. As you get the reps and sets in, you’re going to add more to the SOP. So it’s a work in progress. It’s not like something you just publish all at once. It’s sort of this craft of the reps and sets that you take, and that’s how we’ve built it. Now, some people will dive right in and go ahead and type this thing out and put a title and print it and bind it, and now they’ve got an SOP. For me, it was a part of the journey, a part of the journey that we built, and now we’ve got a pretty good foundation, again after several years that we could take care of most anything that comes our way.
And if there’s something unique, again, the reps and sets allows you to build more resilience to the problems that come your way because it’s not as scary. It’s not as scary. You just know that you got to take action. But team, that’s one thing with this whole real estate thing, you got to take action and you got to work through the fear and the uncertainty because if you just sit there and worry about something and worry about something and not take action, nothing’s going to happen, right? You got to move through that. You got to learn how you deal with stress and how you deal with uncertainty, process it, and you got to move forward because things are going to come up in this journey. And it’s not easy, but it’s definitely worth the work.

Ashley:
And I think that kind of leads us perfectly into tactical tip number five.

Angel :
Yeah, so tactical tip number five, execute mission team. I would be remiss if I was out there in Iraq with the civil affairs unit and we were getting ready to go out on a raid one evening, and I remember it was 1130 at night and we’ve done all the rehearsals. We stood on the map and we started moving the little icons around of the different units of action and how we’re going to execute mission. And it was almost like a week buildup to this PCCs PCIs, right? The pre-comm checks, pre-com inspections, the Unite Vision goggles are your nods working. You have enough ammunition, your weapon good to go. And imagine all the work that you do. Humvees are stage, you’re ready to roll out, and then all of a sudden you jump out and you’re like, nah, I’m not going to do this. No, I’m good.
I’m good. I’m good, guys, guys, I’m good. I’m going to be back in the room. Throw some Madden 2003. I’m good, I’m good, I’m good, I’m good. Absolutely not. Absolutely not. When you’re staging and ready to go and at times ticking, you’re taking action, you are executing. And this ship is a sailing, and that’s what we got to do here in real estate. All the planning and all the research and everything that you do means nothing if you don’t take action. And action is as simple as call five lenders. See who has the best, call a realtor in your market and interview them, take action. But a lot of times, working with rookies in the bootcamps, they’ll stay in this, what we say, paralysis by analysis, and they’re scared of taking action. But team, you got to let go of the safety, the safety rails, and you got to take action because trust me, it’s scary. But when you go through it once, twice, three times, then you could sit there as cool as the host that we have on this show here, answering these questions in the portfolios that they’ve built. Because they took that step a long time ago and said, Hey, I’m going to hold on to that one. We’re going to work through this. So I’m step number five, execute mission. You’ve planned, you’re ready. You’re never going to be ready enough, but you got to go. You got to roll out.

Tony:
And angel, I love the idea of actually executing, because I think that’s where a lot of rookies get stuck, like you said in the analysis paralysis. So the question I have for you is, how do you know when you’ve done enough planning and mission prep and it’s actually time to move into the execution phase? Is there something, is there some marker that someone can look at to say, I’ve checked all of these boxes now I’m ready to move forward

Angel :
For me? For me, Tony, it’s do I understand the language of what I’m about to execute? So lemme give you a great example. The biggest hurdle for me was the whole lending process. You should have seen me calling that first lender that first time when I thought I knew what I was talking about. And I said, Hey, listen, I’m calling about a 30 year fixed jumbo loan. And the dude is looking at me like, wait, wait, say that again. A 30 year fixed what? I said, I want a 30 year fixed jumbo loan, but I’m okay with the variable rate. I had no clue what I was saying. And the guy’s looking at me like, dude, alright man, who’s calling the prank on me? And I was serious about it because I wanted to take action. I wanted to find some solution to our financial stage at that time.
And I remember just that first phone call, how awkward it was. And I remember he hung up. He never called back. And I said, you know what? I got to do a bit more research. And so I say the language, what does that mean? If I am talking through conventional financing and I understand what the different terms mean from an FHA loan to a VA loan to a 30 year fixed loan, to a variable rate to, if I understand what is being said, and I, as I’m listening to podcasts or listening to those specific videos on the topic, if I am understanding what they’re saying, then I know that I’m at the point where I’m ready to go ahead and take that step and just go ahead and try things out.

Ashley:
Well, angel, thank you so much for taking the time today to come on the podcast. We are so happy to have you back. We’re going to link your information into the show notes if anyone would like to reach out to you or find out more information about you. Thank you everyone for listening to today’s episode. I’m Ashley. And he’s Tony. And we’ll see you guys next time on Real Estate Rookie.

Tony:
This BiggerPockets podcast is produced by Daniel Zarate, edited by Exodus Media Copywriting by Calico Content.

Ashley:
I’m Ashley. He’s Tony, and you have been listening to Real Estate Rookie.

Tony:
And if you want to be a guest on a BiggerPockets show, apply at biggerpockets.com/guest.