The Truth About Investing: Back to Basics
The Truth About Investing: Back to Basics
Real Estate Investing, with Chris!
Sean interviewing Chris this time? What is this world coming to?!
In this episode, we talk about real estate investing and Chris's recent and early stages investment of Short Term Renting and how he incorporated it into his personal home purchase. There are more ways to invest that take a more creative approach and we talk about the why's and how's Chris got involved.
This is the truth about investing back to basics podcast. Where we want to help you take control of your personal finance and long term investments. If you're looking for a way to learn the why and how of investing, then you found the right place. Thank you for taking the time to learn how to better yourselves. Because because we're, you know, interviewing me today, do you have jokes for me today? Oh,
Sean Cooper:no, I did not go that far. No, I not. No, I took over the the coming up with questions portion. And outside of that, you're still on for the intro and all that good stuff.
Chris Holling:Oh, man. Okay, well,
Sean Cooper:yep.
Chris Holling:The intro and the funny funny jokes.
Sean Cooper:That's why you're here.
Chris Holling:I agree.
Sean Cooper:I'm not gonna be funny. If I was the funny one, then my videos would have more hits.
Chris Holling:This would be it. That's, I guess there's some truth to that. Okay. All right. Well, I guess I guess because I'm the funny one, then we don't we don't have to prep with jokes. It'll just it'll just be be fluid.
Sean Cooper:fluid. Okay,
Chris Holling:jokes throughout.
Sean Cooper:So then you can introduce us and then I'll start grilling you with questions?
Chris Holling:Okay. Well, welcome, ladies and gentlemen, boys and girls, people of all ages to another episode of the truth about investing back to basics. My name is Chris Holling.
Sean Cooper:And I'm Sean Cooper.
Chris Holling:And Sean's gonna interview me today about stuff. I okay, I guess I can throw in a little bit more of an intro that so
Sean Cooper:yeah.
Chris Holling:The the previous Yeah, it was the previous episode that we did, we focused on alternative investments. And one of those that we addressed was actually real estate. We talked about real estate. And really, there's there's entire podcasts that are dedicated to this through and through, and there are very, very successful ones at that. And I mean, just to give a guess kind of my own shout out to it unless I need to bleep it later. I really enjoy bigger pockets, bigger pockets, does a really good job of doing a real estate investing podcast, they've got a lot of really cool resources that I've personally learned a lot from just on my own time, my own research. And, specifically, the reason we're talking about it at all today is a large investment where it's my most active investment is I do a short term rental that I have arranged that I'm going to try not describe too much so that Sean can ask me questions.
Sean Cooper:That's right
Chris Holling:But, but I run a short term rental property, this is very new for me. And so we wanted to get a recording of this on kind of the early stages of some of that. And specifically, for me, it's a version that BiggerPockets would, or others, depending on how I edit this would reference it as called house hacking. And so what I am doing is I have recently purchased a house a few months ago and did some renovations in order to separate it into two functional units. And short term rent one of the units, some people do this with just a room or they stay in the basement, and then they separate the other part in the house. Or some people do it where it's just, you know, a carriage house separately or some variation of that. But it's it's worked well for us so far. And we're starting to see some returns on it. And now we get to get into the meat potatoes of kind of how it works and answer. I really have no idea what questions Sean has for me. So I'm kind of curious, actually. But yeah, that's that's why we're interviewing me today.
Sean Cooper:Exactly. Exactly. So I to start off I know this is probably a multi faceted answer that you have. Because you know you have when you have capital, you have lots of opportunities open to you with what you could do with it. And I know previously you guys were renting and you had a pretty sweet deal in terms of your rent. So what made you decide to take your capital and invest in real estate in the first place?
Chris Holling:Hmm, okay, yeah, that's a that's a cool question. So Wow, it's not just a multi faceted question but a kind of a multiple reasons answer.
Sean Cooper:Right
Chris Holling:Uh, There, there is something to be said for just kind of the inception of some of my first, like foundational pieces of learning in investing, where a lot of people, when they first start thinking about investing at all, when when they're trying to get out of the grind of just, you work, you get paid, you pay bills, and then you do that until you retire. And then you die. Like to, to kind of have just a different mindset. A very common book that a lot of people read that I did read was Rich Dad, Poor Dad, Robert Kiyosaki. And it he did make his money in real estate. And so he does a lot of real estate examples in that. And that is, by far not the only way to gain ground in investing. But it's an example that gets used pretty consistently. And so I was, I was pretty aware to it, just early stages of learning of just considering it as an option. And then by chance, when we moved back, and like Sean mentioned, we were still renting and, and doing some of that, then I knew that we still wanted to get our own space that we could, we could call our own. And we tried to figure out how to do that, but also how to simultaneously advance our active investing plan, because comparatively to a lot of people, I am a pretty aggressive investor, just because I do have a pretty secure job. And I'm pretty comfortable with the idea that if absolutely everything blows up in my face, I can kind of hit the reset button a little bit. And I'm willing to take on that risk. And so to look at it as a how do we get started and get a good springboard of going. And also how do we get a space to ourself this seemed like one of the best ways to do it. We also entertained getting a hold of a multi unit place outright like a triplex or four Plex, you can do that with an FHA loan, FHA will approve up to a quad Plex and we looked at some of those options and just wound up going this route instead, after multiple multiple comparisons and numbers and lots of number crunching and lots of lots of learning between then and now and it we're in the right place that I feel like fits us best personally. So
Sean Cooper:awesome.
Chris Holling:How's that?
Sean Cooper:Yeah, no, that's I mean that's what you got to do is find out what works best for you. And to to that point you referenced some of the different ideas of investing in real estate that you guys talked about and I think split buying a house and then splitting it and renting half is a fairly unique because a lot of real estate investors think you know that you've got the fix and flippers out there you've got people that just go around they buy up, buy a house, rent it, use it to pay itself off refinance it, use that to buy another one and continue the process. In this case you're living and you know, you know working the house at the same time so
Chris Holling:correct
Sean Cooper:What led you to that particular method specifically Why did you choose that manner of investing in real estate specifically?
Chris Holling:Oh, interesting. Okay, um, so something that I think I've been learning a lot about real estate, investing in particular is it it really does widely widely vary the options and how well you can do in certain areas just geographically and I don't just mean like per state, but I mean like per city per county per neighborhood and that can vary a lot of things wildly so strictly short term as an example, if you are looking in a spot out in I don't know say Maine, I love Maine Maine is a beautiful place to be but their touristy time is very much the summertime because of lobsters and lobster season and sometimes the the winter a bit just because people like to get out and, and a little bit of fall to see the colors and whatnot. But those are slower times in comparison to summer. So when you're looking at that as a real estate investment, and you're considering like vacation home renting, which is a that's sort of one of the versions of short term renting, then that's that's the type of thing that you got to consider because when you're looking at those, then you're offsetting the costs for when you know when the getting is good and you can get good rates and good good return versus the slower months and kind of feast and famine and writing through that. Whereas say you're looking in the Denver Metro area then Denver Metro area there's there's tourism that kind of occurs all year round and there really is a large influx of people that's always coming into the area and so because people are are moving in moving out moving from place to place, it's pretty common to have things like short term rental long term rental available to you and therefore there's also a lot of opportunity for growth like like fix and flips like he referenced there's there's just a lot that happens on the real estate side here whereas say you find a small town in Iowa I don't know why I picked Iowa I just did. But there there might not be a lot of traffic of people coming in and out or moving into it so you could get a house for four grand I saw one go for four grand the other day, which is just wild in comparison to Denver Metro numbers. But you know, then if you do that, and you choose to long term rent it out for I don't know 500 bucks a month, then you could still technically turn a profit on that and, and so it widly varies depending on the area that you're looking at in the first place. So to answer your question, we wanted to be somewhere where we were in the Denver Metro area because that's where family is for us. And kind of particular to the Denver Metro area. The short term renting tends to be relatively consistent and not just vacationing like you would find in Vail because of the fact that it is year round tourism year round business year round seasons it is it is a constant inflow of people which makes the short term more regular than you would find in in other areas and so once we once we started like comparing a lot of numbers and we were trying to figure out do we want to take on long term Do we want to take on a little bit of extra risk on the short term side but the payoff could be a little bit better once we determine that we were we were comfortable with a short term route that's where you start getting into the more complicated portions of regulation because it is a newer thing and some cities some counties don't like it. So even if you said I want to do this and this is the best thing for me and then you look at say Highlands Ranch is a great example just in the Denver Metro area if you decide to look it up Highlands Ranch has a hard no we do not allow short term rental whether you are listed on the property if nothing absolutely hard, no
Sean Cooper:interesting.
Chris Holling:Whereas Denver specifically it's okay so long as you are the primary resident and so there's lots of either splitting the house or a carriage house is a great example where there's essentially an ADU or an accessory dwelling unit. So you are the primary owner of that but as soon as you split it up and it develops essentially to addresses then that's when you're rezoning and it's a duplex and duplexes cannot be short term rented from what I understand in city of Denver. So to specific to ours because it's short term, you have to go through the stages of okay is we want to do this for these reasons. Okay, now that we've determined we want to is it approved by the state? Is it approved by the county is it approved by the city is it approved by the HOA and the neighborhood that I'm looking at if all of those is yes then it's okay to do there and that's when you have to try and find a spot that that works well depending on where you want to be and where you want that location to be so it's got a lot of steps to make it happen but as long as you're looking in that specific geographical area like I was trying to describe then then it can work out quite well and that's how we landed in that is we wanted a space that was for us and did the did the math did the research found an area that works well for us in particular and is also approved to do so and went through all those stages to do it where it's did some permitting by the city and so we have a renters permit for those things and got the renovations done with the the when you have the vision in mind we found the house and we said okay, I think we can do it this way. Got into the house did the renovations and now it it functions on its own with its own private entrance and so I you know it's it's pretty hands off, apart from very minor stuff here and there. So
Sean Cooper:nice. So a combination of circumstance as well as strategy then,
Chris Holling:yes,
Sean Cooper:that kind of led you to this this particular choice.
Chris Holling:Yes, because if if we, with the circumstance and strategy, the way that we see it is at the very least the the market out here is very, very difficult. It's very expensive, and it's very, very competitive. And if nothing else, just because of the level of expense, rather than me trying to figure out a way to work extra overtime to afford a house of some sort, I thought it would be better to try and figure out a way to get my house to work for me, which kind of goes back into the Rich Dad Poor Dad example that if you haven't read it, then one of the things that they like to justify is something we've referenced before is the separation between assets and liabilities. And an asset, as a reminder is something that you spend money on that's going to make you money. And a liability is something you spend money on that's going to cost you money. And if we bought a house,
Sean Cooper:Chirs' definition not mine.
Chris Holling:Right, right. Sorry. With that. That's there's an entire episode dedicated to that.
Sean Cooper:Yes.
Chris Holling:But yes, under my definition, then when I'm looking at a house, and when I'm trying to make this decision, I'm saying do I want to take on this liability? I can but how do I want to do it? versus now I'm taking on this liability and in my psychological categorize thing that I'm talking about. Now, I am making it become an asset because this thing that was going to cost me money is now making me money or at the at the very lowest instance of it helping offset some of those things, rather than it all just coming out of my pocket.
Sean Cooper:Yep, for sure. So how did you actually go about starting this process? And you've touched on this a little bit as we've we've gone through here, but can you if somebody wanted to follow suit, what did you actually go about doing? How did you find places to look at how did you handle the financing things of that nature?
Chris Holling:Okay, so specific to Denver Metro area, because that, like I'm saying it's it really there are extra variables everywhere you look so specific to this area, I was able to utilize a lender that that was able to allow me to do a cash offer that was very paramount for what we wanted to accomplish in order to stay competitive in the market because they're very consistently almost, geez, I can't say every single one as like a blanket statement, but very consistently the houses that are being sold out here right now in this very current market, as we record this in the end of September, it could
Sean Cooper:in 21'
Chris Holling:right, It could change wildly here. But as it stands right now, most houses are selling for about 50 to 100,000 over asking price.
Sean Cooper:That's insane.
Chris Holling:It's it is a lot. And so in doing so, we needed to have something that was competitive and comparable. And if you are doing a cash offer, the closing process moves quicker, there's a couple of fees that kind of get removed from the process so it it's like having more money even though you're not you don't have more money in a way. And we were able to go through a program that was able to do a cash offer which made it
Sean Cooper:so without actually naming that program because
Chris Holling:that's what I'm trying to avoid.
Sean Cooper:Yeah, I know, how would somebody go about finding a program like that?
Chris Holling:You know, it's It was so unique and it's so new here in this area that I kind of stumbled across it by my realtor suggesting it
Sean Cooper:okay,
Chris Holling:but
Sean Cooper:so maybe tap your realtor for advice on that one?
Chris Holling:Sure. Or you know, there's there's really nothing wrong with with talking to multiple realtors, there's, there's this
Sean Cooper:oh absolutely
Chris Holling:that Oh, there's there's a very strange dynamic that exists where if you sign a contract with a realtor, technically you're supposed to use that realtor, especially with a broker and there's a whole bunch to that and the fact of the matter is and I we I hope to not get too much backlash from this but like, if your realtor is not doing well by you, you can find ways out of that contract. Absolutely. And so when you are trying to find new avenues because your realtor isn't doing what you feel that they should be doing or really just they're they're not operating within your best interest which is literally their job description. Then look elsewhere, talk to other people and just compare because if you find somebody that's really willing to go the extra mile for you, then that's that's why you want that person anyway. So
Sean Cooper:for sure,
Chris Holling:I say that to say that mine was going the extra mile for me and found this opportunity for me and and it was it was very, very helpful. So if you were looking for that in particular, check your area you know, have like a Google search call around call some maybe call a local Investor or something and try try to just see what you can find out and specifically ask for that, hey, do you have you ever heard of a program that allows you to do a cash offer, and and they act as your cash offer. And that's how it worked is they did a cash offer, they closed, and then they connected me with a mortgage broker, and then the mortgage was set up in a name that they picked, or what the mortgage company that they picked, and how it works. And the way that they make money is that for me, I don't see a difference. If the rate is 3%, then I get connected with this mortgage broker. And they say, okay, we're the going rate right now is 3%. So I'm just going to charge this guy 3% Hey, you company that just did the cash offer, tell you what we're going to give you point 5% because while it's lower for us, we never would have had the contract if it wasn't for you in the first place. So they make their money by essentially referring, and then I still get the same rate as the market rate in the process and have the cash offer to do so. So that was just the purchase side. to your question. How did I get to that point? Wasn't that your question? See this is this is why, you know, you keep track of the questions was Was that your question?
Sean Cooper:That was that was part of it? Yeah, it was, you know, how did you go about it? So the other aspect, you already kind of talked about this a fair bit, but was like, how did you actually find this specific place? So
Chris Holling:gotcha. Okay. I was I was doing a lot of hunting around like I was talking about the a lot of very active real estate investors will tell you that you should really first do the number crunching on 100 deals, or 100. Real Estate Investing opportunities, 100 properties, before you actually make your first one, just kind of as a rule of thumb, so that you are crunching numbers and you're going through the reps. And by the time that we had done this I I had done over that amount by accident, I didn't even mean to like shoot for that Mark I just had by that time. And so I was looking around a lot of places. And it's, it does take a level of creativity, like you were talking about where we said, okay, let's check out this house. We go and check it out. And it's in the type of area we wanted in the first place. So we did our research to find out. Is it okay on that state City County Hoa level in the first place?
Sean Cooper:Right
Chris Holling:Once we found out that that was okay. Then we showed up and poked around the house and thought, Okay, how can we split this up to give it private access so that they
Sean Cooper:Slick yeah, really have their own space entirely. You can do short term renting where you say you rent out a room and share the kitchen or something. And some people do that. And I personally don't enjoy renting those. So I don't want to offer that as a thing to
Chris Holling:so then they can come and go as they please and rent. If that makes sense. I just I just don't personally enjoy that option. And so why would I offer that option if I don't even enjoy it. And so when we were able to, somewhat creatively, look at the look at the house and go, I see a way to privatize this entrance and wall off this area. So it's private, and make it so that they can operate within their own, then we did just that we were able to make the purchase. And then got in and we walled up a couple of areas put in a door put in some newer features that I thought were important like egress windows, which are windows for the basement, if you've never heard of that. And a central AC system, because I wanted to make sure everybody remain d comfy, and some very minor aintenance things. And then I put in a smart lock that sits a the front door that I kept, have complete access to all th codes. And so it's always a private code, and it's per gu st and it logs each time the pe son comes in and out and I can ell who what code is used. o I temporarily give the code t my guest and that if they'r staying for three days, then i's active for three days and th n it's not active after that. nd it's pretty self suffic ent past that point. you know, we're not sharing a kitchen is ultimately it
Sean Cooper:Yeah, no. Um, so as we've gone through this, you've talked about some of the perceived advantages of this type of real estate investment, at least for you personally, now that you're in it, you've you've been doing it for a while now. Which of those perceived advantages turned out to be legitimate? Which ones were maybe overblown or non existent at all?
Chris Holling:Hmm. Okay, the the legitimate advantage that I have gotten from it is a doing exactly what I wanted. It operates on its own, it is a separate portion to the house, it's private enough to where if people want to meet us, then we welcome it. But it's private enough to where there's been several guests that I've never even seen, to be honest. And so I, I know that they're getting their privacy as well. And not not just on on our end. So it's, it's functioning, and it is getting a return on my investment in the way that that I was hoping for, which was at the very least, being able to help out with the cost of my mortgage. And, really, for for all intents and purposes, the the very first month we were just shy of making the mortgage. But second month we we obtained our mortgage, as well as some cash flow, along with that
Sean Cooper:way to way to just go ahead and blow my my question number seven. Thanks for that Chris
Chris Holling:Question number seven, what question are we even on?
Sean Cooper:Four
Chris Holling:Four. Okay, well, I'll forget by then don't, don't worry about it. Now. One thing actually, it's funny, I might blow it right here. One thing that was a thing I didn't expect was that when you're talking about numbers there, there are gross numbers. And then there is a net profit, so to speak, where all of your expenses are paid. So like the the number that you find after your expenses are paid is, is the number that's like your net your cash flow at that point. And when I was looking at gross numbers, the thing that I didn't consider that, that I should have, I guess, is that when I was comparing other comparable properties, making X amount, I thought, That's insane. I've never even heard of that. It didn't really include the cleaning costs that that you have, which you can clean it on your own. But I've got too much going on in my life, to also take that on, because really, it's a second job at that point. So I needed to make sure I had a cleaning crew
Sean Cooper:Right. come in, and they do a great job. And it's it's a very fluid process. But it really drops that amount of gross cost two less than you would think because it's still gross, like say, say cleaning costs $500 at the end of the month, then you still have your gross amount after cleaning. And that those numbers were still good. But those weren't the numbers that I expected out of the gate just because you charge the renter for the cleaning fee. And so I don't even see it. But when you are talking to people, and they say these are my gross numbers, that usually includes the cleaning fee that you don't even see in the first place when you first talked to people about it, if that makes sense. So it almost inflates what the what it sounds like they're getting.
Chris Holling:Yes,
Sean Cooper:yeah.
Chris Holling:Yes. And I mean, like it's, it's still it's still good. But it's, it does inflate it further than then you thing. On top of that, at least it did for me on those first conversations that I had ever looking into this,
Sean Cooper:that's fair, that actually leads right into my next question because I would kind of classify that as a challenge or an unexpected hurdle. And one of the other challenges that you and I have discussed offline is revolves around pricing. So figuring out the appropriate price to the unit to optimize profitability, and you know, it being rented and that sort of thing consistently. Can you tell us a little bit about that, the limitations on the platform, and any other challenges that maybe were unforeseen,
Chris Holling:the two most common short term rental programs. One is called VRBO, and one is called Airbnb and I don't really have a big system into how I picked mine Mine was much more commonly used in my area and with the real estate networking group that I'm now a part of, it's it is the the program that is used as majority among this group in particular, so I
Sean Cooper:That's fair
Chris Holling:I legitimately don't have a I prefer one over the other because I've tried both I've really only tried one and I do appreciate a lot of aspects about it. And so I don't have a you know, one really obviously stuck out really just look into what works for you. And for me, it was the one that was majorly used in the area. So I feel like it communicates better with people that are looking anyway.
Sean Cooper:Gotcha.
Chris Holling:The pricing, that's what you asked. So I, I'm kind of cheating on this, because of the same network group that I got a part of, like, if you're interested in this, like find other people of like minds, chances are, there's always somebody that is bigger and badder and smarter than you at at anything in life. And I, I really try to keep that in mind. Because if I don't, then I'm not going to be able to learn new things from somebody that might have a different perspective than me. And so, go out there and find find a network, find a opportunity, there's lots of real, real REIAs in almost every state, they real estate investing association of some sort. And you can just google finding one of your own. And if you are interested in real estate, there are lots of opportunities. So within my own, and I started making contact with these people, I started to ask, Well, what, what should I charge do you think? And they said, I think with your property in particular, I'm comfy with numbers on here, I guess that's it's up to you, do you care?
Sean Cooper:Now go for it,
Chris Holling:okay. So they pretty much out of the gate, they said, I think with your property, the way that you have yours set up, you can get around 150 to 175 a night. There are stages that need to happen before that, where you are gaining your publicity. And you need to make sure that it it's advertised well, and you have a good reputation, and you have good reviews to get to that point. But they were saying I believe you can make it to this level. And I think that you can acquire those things which we are starting to come close to that currently, or we're playing with about that range right now. So specific to your question of how did you discover pricing? Well, I started with a real loose idea based off of somebody else's advice that operates within this network. And then really, it's just a matter of us trying and seeing where things land and seeing, you know, if nobody books, then that's a pretty good indication that maybe we need to readjust some stuff. And ultimately, as as we've done it, we've still gathered, still gathered booking and still continue to, and we are about to hit a new mark, actually in a couple of days that will give us a new title that will help promote some of our help promote the unit a little bit as well as give us a a reputation that's backed by the program. So
Sean Cooper:Right, because I think you mentioned that there are some limitations or certain hurdles you have to or milestones you have to achieve in order to do certain types of promotional pricing and things of that nature.
Chris Holling:Yes, so the promotional pricing outright, like putting a discount on your property and getting some advertising is more just being established for about a month, the title that I'm referring to that we're about to get to, you have to have a history of good reviews, you have to have a history of good response times on the program itself. And you have to have a certain amount of stays depending on how long or how short that they've been. And you have to do all of those by the time they do their quarterly review. And in our case, the next review is going to be in a couple of days, once you acquire that then people can search for people that only have that title and therefore have a good reputation backed by that program. And so we become part of a special search system for people that care about that as well as the program is more likely to promote it because they know that you have a good reputation. And in doing so you get more bookings and you can also increase your prices a little bit because you are a I guess a cut above so to speak because you're you are doing the legwork to make sure that it's a quality unit.
Sean Cooper:Oh, there's less risk on the renters side
Chris Holling:correct
Sean Cooper:of things
Chris Holling:Yes. Right. It's it's bound to be a more a more quality option and more quality stay as far as if there's an issue, then it will be addressed. Because there's a good reputation but also exactly to what you're saying that there's there's less risk of something going wrong because they have been actively established as, as somebody that's helpful, somebody that will will take care of the job properly.
Sean Cooper:Right. You've been vetted.
Chris Holling:Right. Exactly. And so once we once we reach that stage, then we'll we'll play with the pricing and see if people continue to book and I, they they've continued so far even without this title. So I believe that's a that's a good piece. One personal piece of advice that I'll offer to somebody if they are doing short term stuff or if they're interested in they're going down this road, it's been my personal experience that it's almost better to charge a little above what the going rate is in the area rather than below you would think it's below in order to try and be competitive and bring people in which as you're starting out might be true. But I've found that if you have something that's more expensive in general especially if you have a quality place that people will want to stay at anyway, it tends to bring in a type of client that is less likely to mess up your stuff rather than one that's only looking for a deal because the ones that are looking for a deal I've found are more likely to have some form of a damage to your property or or an issue or or expecting a deal so to speak. So on a very personal note, we've we found that that shooting a little above the area tends to attract a certain type of person that we we like to have as especially as we live on the property so
Sean Cooper:for sure
Chris Holling:makes sense.
Sean Cooper:Yeah, I was curious if you want to expand on that it sounds like there's a story that goes along with that.
Chris Holling:I mean, the thing is, is that it's that was some advice that I was finding and early early on when we were doing some of these we had a couple of questionable problems that came through of like were they actually honoring our rules for no smoking and we were dealing with less questions on the program itself of saying oh well can you cut me a deal for this once we started to get out of that bracket so to speak but as far as you know stories for for other people there's it is still short term you know that's that's also what turns people off about it is that there's there's not a large vetting process in comparison You know, when you
Sean Cooper:Right
Chris Holling:when you have somebody that's held there for a long period of time doing
Sean Cooper:You're not doing a background check,
Chris Holling:right exactly no I mean this program we have opted to make sure that we have a government ID issued so it still keeps people pretty accountable but it doesn't have as in depth as check as a long term would be but you know, I'll have that I was I was talking with somebody from my network the other day that was telling me that they they were doing a rental and I guess an entire mariachi band was in their place and they were driving by and they noticed it and they had to kick them out like like there's still weird stuff that goes on but generally if if you're shooting for we're trying to attract a a different group that that might be less likely to screw up the area then then we've found that just making sure you have quality place that you can justify charging that will attract the right kind of person.
Sean Cooper:Gotcha. What other learning curves have you come across?
Chris Holling:Hmm overall, I'd say the biggest learning curve was like I was talking about with doing the the 100 deals or so in my head where you're looking at different properties and different opportunities and looking into regulations and where to find those considering numbers like how much does it cost you in taxes? Because if it's that much more in taxes, can you really just just doing the numbers itself was was a learning curve? And I'd say I'd say general repairs
Sean Cooper:You haven't even done all the taxes yet you get to you get
Chris Holling:Oh, no
Sean Cooper:to deal with that for the first time in April. of next year
Chris Holling:Right now I am I'm not looking forward to any of that. But I when I'm talking about that, I'm talking about crunching the numbers and making the considerations into what your expenses are going to be. So mortgage, the taxes the cost for you know, how does the program affect things, what type of amenities there you're going to be looking at, like, considering all of the business expenses because that's what you're going to be doing. I'd say the other learning curve would be I'm familiar with houses and and renovations just as a whole but the actual operational process of it and what needs to be done and how things all work is why I brought in a general contractor. I'm sure I could have done a lot of YouTube and screwed it up and then paid the same amount for somebody to come in and unscrew up my stuff and then fix it but instead I just outright went for the contractor and so having some of those, oh I want to do this well that's fine, but you got to hit these these marks first was also a learning curve that I think happens to anyone really trying to think if there's anything else that's takes out i don't i don't think so but the yeah
Sean Cooper:that's fair
Chris Holling:looking at the numbers and business expenses ahead of time and making sure that you're not just seeing dollar signs and you're considering what the cost is for for it to operate appropriately is is very important.
Sean Cooper:Well, like I said you already more or less answered this question because I was gonna ask you you know about general idea of the outcome if you broke even came out ahead that sort of thing. And I know in your particular circumstance like we we touched on briefly briefly previously for you breakeven was kind of a almost a tougher mark because you had such a good deal in terms of your rental previously so the assumption I would make and I think you and I have talked about before is if somebody is currently renting in their their same market especially with the way things are today, then the offset the the breakeven point is actually easier to hit because you're dealing with a much higher rental that you're paying on a monthly basis that you're you're switching over to that mortgage and then trying to offset with the income so is there any additional color you'd like to add around that?
Chris Holling:I think that's a good point i i do think that my circumstance was just a little bit more unique because so what we what we had because that's what we're talking about is rent rent was on the cheaper side for us because we were with family and it was still a very symbiotic relationship because being with family offered what what benefits you get for living with family in the first place. But it also means that you don't have your own shared space. So the the money was helpful for them and the extra sets of hands were helpful for us really with the kiddo and it in doing so the the rent was actually only semi a factor of that it was much more about us personally wanting to get our own space, and wanting to to be able to spread our wings, so to speak, I guess with that, but but having our own our own elbow room was was very paramount in specific to, how do you compare when you're looking at rent versus versus not even if you have a cheap rent deal, or something along those lines, is very much a, a long term thing, like I I know that personally and this I feel like this is hard to do without a diagram. But I really tried to make it so that my paycheck takes care of me and my expenses. And my investing has the capability to operate on its own. And while I plan on continuing to put into it, or finding ways for it to continue to grow, I want it to be able to function on its own so that if my paycheck only takes care of my expenses for that month, for whatever reason, because a bunch of stuff goes wrong, I want the investments to still be able to continue to grow. And so this is a springboard into that where our plan is we just don't have an exact route is to move from this point. And whether it's selling it or keeping the home and continuing to rent it or some variation of that. This is going to be a springboard into allowing investments to grow beyond that. So we are taking the time to actively put into it right now so that we can step away from it and allow it to grow on its own. And so if you are making a consideration like Sean is talking about, okay, do I step out of this renting area to get into a spot there's there's nothing wrong with stepping back into a renting area later, or even continuing to rent. While while you've got stuff that's going on, that's cheap, and then using money on the side to allow real estate specifically or some type of investment grow for you while you're continuing to rent it's very, very case by case basis on what works best for you. We just happen to also want our own space and wanted to aggressively invest in so we were willing to take on some risk and this was our way to do both. Does that does that answer that pretty? Well?
Sean Cooper:Yeah, yeah, very much so.
Chris Holling:Okay.
Sean Cooper:Yep. That brings me to the the ultimate question if you will, and and one follow up question to it. And so would you do it again? And if so, what what would you do differently?
Chris Holling:Oh, okay. Yes, I would do it again. Ask me again in a year you know, I'm still right on cloud nine of a couple of months in and, and just just the fact that I'm getting proof of concept right now is is wonderful to me. So maybe maybe I'm
Sean Cooper:for sure.
Chris Holling:Maybe I'm a little rose colored glasses at the moment. And that's but what I would do in the future Hmm. Here's the problem with with that question is this was done over years of me doing research and coming to the conclusion that I did. And in a way I didn't even realize that this route that we picked was an option until this year. So I was going to tell you, My only regret was not doing it sooner. But I really think that if I did it sooner, I wouldn't have had the knowledge that I have now. And I might have made some bigger mistakes on the way
Sean Cooper:very valid point.
Chris Holling:So yeah, I want to I remember when I first started getting into investment, like it was actually around the time that you and I very first started talking there was a I had I had a patient by chance that he he was just he was sick and he needed to go to the hospital we we got to talking because I mean, what else are you going to do back there but we got to talking and he was telling me that he's got a business that's up and running, I think it was a tire business or something along those lines and he had just purchased it and he was looking to do something else and he was he was upset what was that he had just gotten into a fight with somebody and he was dealing with a big lawsuit and his anxiety kicked up because he was in the courtroom and it it was just all becoming a little overwhelming for him because the other person didn't show up like a really really messy circumstance that just really caused a bunch of different problems and he told me he's like you know it's really not about the money for me I'm so upset about this and this and this and I started asking him about it and he's like oh no, I I started investing in real estate after I sold some of my businesses said oh well you know tell me what's what is the best advice you can give me because I'm just now looking into the possibility of real estate investing at all and really just investing in general and he said the only piece of advice I'll give you is start yesterday I wish I had done this years ago and again you know, this isn't for everybody but it's it's something that stuck with me because I thought okay, you know, I need to at least for me, in my personal circumstance at that point, I was interested enough to where I knew it was going to be a part of my investing portfolio at some point. This just happened to push it up in my priority list for me personally. How's that?
Sean Cooper:Yeah, I like it. I like it
Chris Holling:Cool
Sean Cooper:Is anything else you would add for our listeners?
Chris Holling:Okay, I really know that I touched on this but I want to stress it because I really do think that it's important make sure that you are doing it if you do get involved in real estate investing, make sure that you are doing it for you and for the right reasons meaning if you are doing it strictly for numbers, make sure the numbers are good and that's that's all you need to worry about. For me I needed to make sure that I had to I had a lot of considerations I had to consider a place that was also going to be comfortable for me and my family so I had to look in areas that I was comfortable with that being as well as areas that were going to be close to family for us and if it's I used to I was talking to a buddy of mine about this yesterday I told him hey you know if if it was just you and me and we were just looking for money and we were going to move in somewhere but you know we didn't have these these families attached to us you know, you and me would be out in this in this terrible part of town and just bring a couple of baseball bats and you know just just ride it out for a couple of years once we buy this building and and then turn a profit but like that doesn't work for me in my circumstance. And I think that could have been more lucrative overall and I would have gotten way more cool stories in the process. But it It did not work for what was needed in my life and I think we talked about that a lot on this podcast is that when you are when you are looking at all these things and you're looking at your personal finances and you're investing you need to find out what's comfortable for you and you need to know why you're doing it which is how we led to doing this at all because of our long term goals as well as what we needed right now. And I think that's that's really important for everybody to consider if you're looking into it at all and not just a I'm gonna do it to do it.
Sean Cooper:Good advice
Chris Holling:Cool,
Sean Cooper:cool man
Chris Holling:I like it
Sean Cooper:that's all I had on my end so
Chris Holling:sweet. Well you know interview time for you. What did you What did you think is just like it? Did you? Did you like switching it around and asking me questions. It felt it felt weird, right?
Sean Cooper:Yeah, it felt like the pressure was off all I had to do was sit here and listen.
Chris Holling:Well, I'll tell you what,
Sean Cooper:except I probably didn't fill the role of being funny and entertaining. You still had to do that. So you know, really, really just put more on you.
Chris Holling:Well, well, thanks for joining us on the truth about investing. I'm Chris Holling. And I'm also Chris Holling.
Sean Cooper:Yeah, I'm Sean Cooper. Thanks for that
Chris Holling:Trying to get excited about it. Oh man. Okay. Yeah. Let me actually wrap this up. Thank you again, everybody, for coming to join us. And thank you. Thank you for asking me those questions. those are those are great questions. I'm glad. I'm glad I had to actually think about stuff. And it wasn't just like, spewing information that was that was great. So I appreciate you asking those.
Sean Cooper:You're welcome.
Chris Holling:And thank you everybody for coming out to listen or picking up your headphone to listen, I guess. And thank you for taking the time to want to better yourself. I just had a brain fart. I don't know. That was weird. My name is Chris Holling.
Sean Cooper:You had a brain fart about your own name.
Chris Holling:I know I just talking just English was not my strong suit. right then. And thank you for calling attention to it. Because now any type of insecurities that I have are just blown even further into proportion. And
Sean Cooper:you're welcome. I'm Sean Cooper.
Chris Holling:Yeah, and that did come. See now I'm all tongue tied. Have truth about investing back to basics. kit, you can show up next time. Did you know if you want if you
Sean Cooper:You did great on the questions, we'll just leave it at that you did great answering the questions.
Chris Holling:Thanks, buddy. We'll see you guys here. Hear you next dang it. I'm stopping this.
Sean Cooper:Yeah, we'll get this right next.
Chris Holling:podcast disclaimer, disclaimer. The disclaimer following this disclaimer, is the disclaimer that is required for this podcast to be up and running and fully functioning and moving forward. This is going to be the same disclaimer that you will hear in each one of our episodes. We hope you enjoy it just as much as we enjoyed making it. All content on this podcast and accompanying transcripts is for informational purposes only. opinions expressed here in by Sean Cooper are solely those of fit financial consulting LLC, unless otherwise specifically sighted. Chris Holling is not affiliated with fit financial consulting, LLC nor do the views expressed by Chris Holling represent the views of fit financial consulting, LLC. This podcast is intended to be used in its entirety. Any other use beyond its author's intent, distribution or copying of the contents of this podcast is strictly prohibited. Nothing in this podcast is intended as legal accounting or tax advice and is for informational purposes only. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. This podcast may reference links to websites for the convenience of our users. Our firm has no control over the accuracy or content of these other websites. advisory services offered through fit financial consulting, LLC, an investment advisor firm registered in the states of Washington and Colorado. The presence of this podcast on the internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow up or individualized responses to consumers in a particular state by our firm in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements, or pursuant an applicable state exemption. For information concerning the status or disciplinary history of a broker dealer, investment advisor or their representatives. A consumer should contact their state's purities administrator. This has been a test of the emergency disclosures.
Sean Cooper:That was my favorite of our disclaimers was when you did the visine guy commercial,
Chris Holling:I still throw it in every once in a while
Sean Cooper:I know it was on there for the last time I
Chris Holling:For red eyes, use clear eyes