In this episode

Should You Self-Manage Your Rental Properties or Hire a Property Manager?

In this episode, real estate investors who have taken both approaches discuss the pros and cons of each.

Here’s what you will learn:

• 🏠 When should you self-manage?
• 💰 How much does hiring a property manager really cost?
• ❌ Common mistakes investors make when choosing a management style
• 🔄 How to transition from self-management to property management (or vice versa)

0:00
I think the biggest question we always get is self-managing or getting a property manager Aaron maybe you can
0:06
start us off with your thoughts on this yeah so I don’t want to go too deep because maybe we go around the horn a
0:12
little bit and get our overall take on it and then we can uh dig into some of the stories but essentially this is one
0:18
of the first kind of fork in the road decisions that someone has to make when they actually buy a property whether
0:24
it’s in their backyard or across the country you still have to make that decision at some point for someone like
0:29
me I don’t I’m I’d barely want to hang up pictures in my house so I know for a
0:36
fact that I’m not handy and even if it property was on my street I probably wouldn’t be managing it but with that
0:42
said self-managing means something different to different people some people think that means that you’re the
0:48
one swinging the hammer and doing all the repairs and everything and I have a different definition of of self-management right to me it just
0:54
means that you’re circumventing hiring a third property a third party property
0:59
manager and you’re going to handle all the administration tenant relations and all that type of stuff yourself so with
1:05
that kind of definition in mind we my wife and I we own eight rentals across three states the closest of which is a
1:12
thousand miles away and this conversation is very timely for us because up until about four months ago
1:18
we were self-managing six out of the eight and we’ve had most of them for almost five years now five years are
1:24
over so as we go throughout this discussion I’ll explain what made us shift from self-managing for almost five
1:31
years to actually bringing on property managers in those markets but in short I I do believe that the skill of
1:37
self-management and learning how to do that whether it’s in your backyard or AAR is something that every investor
1:43
should at least learn about whether or not they choose to do it or not that’s my short take would love to hear what
1:49
you guys think yeah I agree with you there that I self-management more as the
1:56
almost the project manager the general contractor for everything and when I bought my first property I went in with
2:02
the idea of self-management and everything I got the right group in control I got the right people and I
2:10
have no problems talking with tenants so that was I was like oh easy no problem
2:15
but for me where I went to the property management route was the 2 am 4 AM calls
2:21
where the heating’s out and then calling the company to say hey this is out and
2:27
getting a lot of grumbling and everything I was like okay with this is where it went into and then also I’m
2:34
really good meticulous about uh finances and everything making sure it’s all there but then having a group right
2:41
there also for collections and everything that really helps a lot so that’s how I went um I think that’s one
2:47
of the biggest questions I always get is whether um you know some people look at
2:52
it because like uh we all follow Zuber and we also all listen to Lumberjack um
2:58
and he always talks about how your property manager is making a lot more money or making more money than you are
3:04
in a sense I think that always gets a lot of people thinking about whether they should self-manage or hire a
3:11
property manager and I think my quick and easy take on it is I wouldn’t
3:18
self-manage from a distance initially that would be my my short answer to it
3:23
so right now I’m hybriding things I’m doing a little bit of both I do have a property manager and I do self-manage
3:29
but I also think Aaron has a great Mighty community that is focused on this but yeah for you Harrison was that
3:36
always your thought initially were you just gonna always get a property manager from the GetGo no yeah and I’ve been I’m
3:43
actually also in eron’s Academy too I highly recommend it getting back to your question mark I actually thought I was
3:49
going to be self-managing the whole time um it was just one of those where I think with this being my first rental I
3:57
went in a little too young ho but it’s been able to pull back a little bit and
4:03
thankfully my property manager they’re actually teaching me on what they do and so they’re saying this is how we’re doing it this is why we’re doing it and
4:10
I think for me it’s getting because I also have inherited tenants I really didn’t know how to really work with them
4:18
in the beginning I was very empathetic very willing to work with them but also being able to provide that for no means
4:25
no in this situation so yeah that’s and doing that multiple
4:31
times I think that gets a little tiring and so having the property manager for right now really helps and that’s my
4:38
goal anyway for like maybe the next property I’m GNA self-manage or if I bought one in Virginia I’m definitely
4:43
self-managing because I like fixing stuff up that’s actually not too bad for me but it’s just more of the rent
4:49
collections that’s where I I need to really build my strength on yeah I think for me the biggest thing
4:55
I have is you really have to know yourself though there to me a there’s just some people no matter how much it
5:02
may make Financial sense or it makes sense to self-manage a lot of people I think just don’t have the maybe demeanor
5:10
or I guess maybe mindset to self-manage and especially if you have a super busy
5:15
W2 right you don’t want to be dealing with a lot of those things and I think ultimately that’s the goal for a lot of
5:21
people though because like you look at like we said we all follow the same Community like Zuber Dion Lumberjack
5:27
they all have a different perspective on it right like Uber has a property manage he doesn’t want to deal with it right he
5:32
doesn’t want to deal with any of these things and I’m sure Dion and Lumberjack are always trying to tell them man you know how much money you’d save or you
5:39
just self-manage on your own so I think a lot of it to what other um goals you
5:44
have in mind but I think the biggest thing I think Aaron you can touch on this too is I think you just learn a lot
5:50
though by self-managing and that’s part of the importance of it 100% yeah I think there’s a few
5:56
different kind of ways to slice it but that’s I said earlier like the SK skill of self-managing I think is something everyone should have and what that means
6:03
that you don’t necessarily have to actually manage your property but you need to learn about all the different components of what it means to manage a
6:09
property so tenant screening how to actually set expectations properly you
6:14
want to understand your lease even if a property manager is the one providing it to you you want to make sure you understand your landlord tenant laws and
6:21
the at least the main lease Provisions you don’t want to get trapped in a situation where you think you have
6:27
leverage in a certain situation but the leas says something different you just you want to become literate in all these Concepts so that you can you know be
6:34
informed and not have any types of false sense of security or anything like that you also want it to be a check and
6:40
balance so when you do work with a property manager you know what it looks like to do a good job and do a bad job I
6:47
always think of it this way if you’re a Buy and Hold investor and your goal is to hold your properties for decades the
6:53
chances that the initial property manager that you hire is going to just magically be there for decades without
6:58
retiring or the company growing too much or the company shutting down very low so at some point you’re probably going to have
7:04
to make a transition even if you have a golden 10year stretch with that property
7:09
manager at some point as with everything in life it will come to an end and so
7:14
you might have a period of time where you need to take it over for a short period or you need to make a transition
7:20
and just having that knowledge and knowing what to look for I think every investor can stand to learn and one of
7:26
the best books I read that is a really easy read that helped with this mindset was Brandon Turner’s I think it’s called the
7:33
book on property management and he does a really good job of just trying to Tool your mindset to think more like a
7:39
manager and one very self- admitted weakness of mine is I generally want to be everyone’s friend and that applies to
7:46
my tenants too and that actually makes me bad at self-managing and that’s part
7:51
of the reason again will unpack why I made the the switch but I have a really hard time separating the personal
7:57
element from the business element and if somebody ask for help I tend to want to give it to them whether or not
8:04
unfortunately sometimes people ask for help and when they see that you’re willing to give it they’ll push push push and take more and me trying to be
8:10
empathetic or supportive or compassionate can oftentimes backfire and I think there’s a balance there’s a
8:16
dial and you want to be in the right spot you want to be a compassionate landlord you want to give people a good
8:21
place to live and treat it make it feel like they’re home without them walking
8:26
all over you so I think that’s the nuance and the difficult balance of it I think Aaron that that’s a great point I
8:33
think that’s why I’m doing like a hybrid style also because that was my concern because the property manager that I do
8:39
work with the primary one is great but he also flips homes on the side and he has other things that he’s working on so
8:45
I was always concerned like man what if he gets too big on The Flipping side and then he starts either losing focus on my
8:50
properties or he just starts veering towards that is his primary business so that’s also why I want to get into the
8:57
the self-managing and hybrid aabus so like you’re saying I have a if an emergency did come up and I have to take
9:03
over my portfolio I’m not going in completely blind or having to just hire the next property manager that’s willing
9:09
to take on my property and that I’m in a bad situation but yeah let’s see what
9:14
else can we talk about on just how and yeah following up with that too is that the scariest thing for me was actually
9:20
coming up with the long-term contract was I was making sure that I had everything there wanted to get signed
9:26
off I was like oh this is this could be bad so that was another reason why I went with the property management because they had something that was
9:33
locked in dialed in ready to go I was just like oh okay this that’s another thing that helps you sleep at night and
9:38
that was yeah Aon I follow along with you as that I’m trying to empathize work
9:44
with them but then it’s you’re realizing that some tenants they might want to take advantage of that and that was
9:50
something that I knew right away as like okay let’s make the first few years maybe property management and they go
9:56
from there it’s also a scalability thing right like I think when you have a handful let’s say for or under
10:04
especially if you’re in the same Market typically even if you have a job even if you have a family you if you have good
10:10
systems you can handle that capacity because it’s not overwhelming that’s not that many people or different situations
10:16
to look after but part of the what ended up making us make the transition is we have eight properties across three
10:22
states so there’s not only eight structures each structure has its own
10:28
capital expenses it has its own appliances it has its own people each of those people have their own life stories
10:35
and scenarios and backgrounds it’s a lot of different situations to manage
10:40
simultaneously and sometimes there would be I think the record I set without having any repair requests while I was
10:47
self-managing was six months where I basically didn’t hear anything for six months and then naturally as you would
10:53
expect the following month there were five houses that had problems within a s-day stretch right it’s there is a
11:00
capacity thing where you get this false sense of security that because something hasn’t happened for a while oh yeah I
11:05
can keep self-managing it’s totally easy but then inevitably things when you
11:11
especially the more houses you have the more likely it is that something goes wrong at one or even multiple and when
11:16
some when multiple go wrong at the same time and you’re in the middle of a work day or you’re with your kids it’s not
11:21
only literally disruptive but it is mentally and emotionally disruptive too because it pulls you away from things
11:28
that at least in my life recently my priorities have shifted much more
11:33
towards protecting that time and that’s why I was ultimately willing to shift and and Seed control from
11:40
self-management over to Property Management the other thing on the personal front is I have a three-year-old daughter and I have
11:45
one-year-old Twins and during both of those births in the hospital I had quote
11:53
unquote emergency situations at one of our rentals separate reynals but both
11:59
involved me taking phone calls moments before and moments after the birth of my
12:04
children and if you think about that’s messed up with choice we knew self-managing that we were responsible
12:10
for taking care of these things no matter when they occurred but that’s just symbolic that you’re in the hospital enjoying one of these magical
12:17
moments and I was still able to enjoy the moments but you think about that and you extrapolate that and you say okay do
12:23
I really want the this stuff infringing that deeply into my personal life or do
12:30
I want to create a little more guard rails and barriers so those are just like a few little anecdotes of where my
12:35
shift has come from in the last year that’s a great point because yeah I have
12:41
a baby do within the next week so it’s like the idea of having to take phone
12:46
calls while in the delivery room or something like that yeah that’s another good point that’s peace of mind right
12:51
there Frank did make a good point here where was his he said here we go he said
12:56
he interviewed a property manager the other day and he actually said he sold his propert properties because it felt
13:03
like a conflict of interest and some of his clients might think he was taking care of theirs yeah that’s an
13:08
interesting point too I think even sometimes when you’re a realtor and you deal with clients and I think that’s why
13:14
sometimes Realtors use that as a reason why they don’t have investment properties because they’re like ah it’s like a conflict of interest is am I
13:21
providing the best service when it’s a property that I should be investing in maybe have you guys have you ever dealt
13:27
with that any of your property managers saying they don’t invest or they don’t or they sold off their properties for
13:32
those Reasons I’m actually the opposite I like the idea of heav someone who owns
13:38
properties because they actually focus it like basically my property manager is a group of people that just got together
13:45
said hey we have a bunch of properties let’s kind of get the biggest B for our buck for fixes and everything and I was
13:51
like yeah this is a great plan and they’ve been on top of everything so I’m actually on the opposite side of that
13:57
property manager yeah I don’t think I faed that exact scenario but I generally like the real
14:03
estate professionals that I work with to be investors themselves as well because they actually have that experience they
14:08
don’t necessarily have skin in the game on my house but they have skin in the game on a house or multiple and so they
14:15
know what it feels like to go through a bad event or have something mismanaged that costs a bunch of money they again
14:21
back to that empathy they can understand that feeling and therefore I think there’s probably a bigger incentive to
14:28
avoid unfortunately like on this topic of property managers in general I think the business model itself is a bit
14:34
broken because you have these kind of mom and pop upstart property managers that maybe they manage a couple dozen
14:42
and usually those type of people provide really good service because they have a small portfolio and maybe they manage a
14:48
handful of their own units and then they take on two or three other investors i’ so I’ve worked with people that size and
14:54
I actually tend to have a better experience with the smaller management the problem is those situations rarely
15:01
last very long because they’ll either scale their business and take on more and more units to make it worth their
15:06
while and then they become too busy and then they have to hire people which then
15:12
increases their costs and then they have to scale more and then they have to hire more people and all of a sudden the quality of the service you got when you
15:18
were when it was just you and a couple other investors is out the window unless they’re really good at growing and
15:24
scaling companies which I hate to say it but most property managers are not that’s not this skill set that they were
15:30
graced from the heavens with right usually they’re good at fixing problems in a pinch and maybe dealing with
15:37
tenants and putting on that business face but like growing and scaling a company to manage hundreds of units is a
15:42
different skill entirely and I just I don’t believe that most property managers are very good at that I’d say
15:49
my hit rate on finding a good property manager that actually enjoy working with and believe that they’re going to have a
15:55
a long shelf life pretty small percentage unfortunately yeah uh let’s see Kyle has a I don’t
16:03
know if not really a question but maybe his view on it but he says self-managing
16:08
in pro-tenant versus Pro landlord State seems like it could sway a decision and
16:14
then all nighter Haider just has his viewpoint on it says he act he would actually have less trust in a property
16:21
manager in a tenant friendly State he would want all the control there but Haider also wants to clarify that he’s
16:27
also studied law so maybe that’s why he feels more comfortable in that sense but
16:32
what’s you guys take on that do you think it matters what type of where you invest as far as tenant or landlord
16:37
friendly state so I own on both ends of the spectrum I like Iowa and Nevada are
16:43
pretty landlord friendly and then I also own property in Washington which is one
16:48
of the most tenant friendly States and I’m not in Seattle area which so Washington state regulations are pretty
16:55
strict and then Seattle has their own overlays on top of that that are even more stri cor and these are the the type
17:00
of stories in Bigger Pockets articles about people taking eight months to get
17:06
somebody out and there’s almost no circumstances in which you can actually evi somebody if they have any type of
17:13
legal counsel there’s lots of companies that’ll provide free legal counsel to tenants on how they can stay in
17:18
properties even if they’re not paying I mean they’re really these scenarios are real it’s not a bunch of what do you
17:23
call it fear mongering right like I these scenarios are actually possible in
17:29
those type of states and for all those reasons and I have not studied law I don’t think I would want to self-manage
17:36
in those situations I’ll just like one other small example in Washington if a fixed term lease ends so
17:42
if somebody’s on 12- month lease and then it reverts to month once you get to month they actually have way more
17:48
protections under Washington state law than if they were on a term lease like these are things that we learned
17:54
thankfully without major consequence but we learned this because we had a hard time getting somebody out when they were
18:01
on a month-to-month lease and we wanted to move on and so these are lessons that yes we’re learning as we go but a good
18:07
property manager and somebody who actually understands the local rules and regulations and they understand the
18:13
eviction process I almost actually think of a property manager more of a as an
18:18
insurance policy against these bad situations than I do as someone that I really need on a daily basis if all I’m
18:24
doing is taking a few phone calls collecting rent calling a vendor here and there I could do that I don’t need a
18:30
property manager for that but where I do feel like I need them is for emergencies or evictions or things that are going to
18:36
involve repeated presence so I don’t know like I’m I’m of the mind I would rather engage with a property manager in
18:43
these complex situations than step away from it yeah I follow up with that that’s why
18:48
we didn’t buy an Oregon because it was the same thing was that we were renters there and then we realize that oh as if
18:55
we went month to month it’s a little bit more expensive but somehow we potentially get our way out of it but we were the honest rentes and everything so
19:03
we just wanted to make sure that but it did make it obvious that it’s okay we’re not going to buy here so we’re going back to Virginia but yeah that’s a good
19:11
point there oh I have one more like kind of nugget I’ll add right so I at one point ran an analysis on you our Vegas
19:19
properties we self-managed them up until quite literally just a couple months ago so about five years total of
19:25
self-managing and I ran the math on how much money do we save on management fees and it was upwards of it was I think it
19:31
was $32,000 total which is not that much over five years but it’s also not nothing and where I want to share though
19:39
is that is a a deceptive figure to say that oh you just saved $32,000 because there also undoubtedly
19:47
was cost if a really good property manager was in there being really proactive about preventive maintenance
19:53
tracking all the capex and being more proactive than we were arguably we would have spent less on repairs and
19:59
maintenance and CeX so I do think that there’s like the 32k and then somewhere in the middle is where it really is as
20:06
far as saving because we certainly cost ourselves money by choosing to self-manage and we are not the best
20:11
self-managers we could do it that’s what I I fall back on like we have the skill we can do it we can survive we can still
20:18
run a profitable portfolio but definitely not as well as a professional who is actually really good at it so I
20:25
think that’s one you know thing I’ll add second is like really doubling on what I said minute ago emergencies and like
20:32
extraordinary circumstances are when you really like the property manager to me is is more of an insurance policy for
20:38
those situations two times over the last seven months there was a a homeless
20:45
encampment in the lot behind one of our rentals and they lit fires that burned
20:50
down the fence into our yard and in the first scenario we were self-managing and it was I think I want
20:57
to say it was July 3rd or something so it’s like it was the holiday weekend leading so it was a weekend and a
21:02
holiday and we’re self-managing we we didn’t have property manager at the time so just having to deal with that like
21:08
emergency situation that’s two hours before uh a different time zone and so
21:14
basically all morning I was trying to figure out frantically how to contact these different vendors and leverage like different relationships that we had
21:21
in Vegas it became it’s not like I spent eight hours straight on it but it became this burden for basically three to four
21:27
days of resolving this and getting our tenants feeling safe and secure that same situation happened three days ago
21:35
unfortunately the same lot this time we have a property manager we were still involved but we were able to divide and
21:41
conquer our property manager was very proactive actually went to a community meeting met with the local uh police and
21:47
they were able to do all the stuff on the ground to address the longer term issue of that vacant lawn and the
21:53
homeless encampment and a lot of stuff that we just simply can’t do from Houston so I just like that try and
22:00
paint a picture of two different same scenario but two different setups and how one was much easier to to go through
22:07
than the other well well well we have the famous Ned here popping in so thanks for
22:14
joining us today man if you had any input on self-managing or property
22:19
managing if you want to throw in your two cents or if you had any experience with it so I’ve always done kind of a since
22:28
most of my properties especially the beginning where house hacks so I always self-managed when I
22:34
lived in it just to get to know a property and how the expenses were so I knew what the water bills normally were I knew what electric normally was or hey
22:42
these parts of the houses house or houses have issues I got to know it that way and then after I’d gotten a good
22:48
feel for it then I felt comfortable letting someone else manage it just so I
22:54
don’t know that was the way I was did it I was self-managed initially and then I’d hand it off that way I didn’t have
22:59
to necessarily cross my fingers and hope that a property manager was telling me the truth in every it made it easier to manage the manager very good point but
23:07
yeah let’s maybe move on a little bit let’s see so I am gonna share this one right now so this is a one that I saw on
23:15
X Steve millionaire he he’s very he’s a he has a big following on there and I think his message is I’ve learned over
23:21
the years that things are never as easy or as difficult as you make them out so
23:27
you guys find that true or what you guys thoughts on that I do I think it the concept there is basically it’s usually
23:36
combination like anxiety and Analysis paralysis where most people spend too much time in their own head stewing over
23:43
what the right or wrong decision is versus actually taking any type of action and getting feedback from the
23:48
world no matter what you do whether you’re building a product or finding a
23:53
tenant or trying to buy a house it’s all about putting things out there into the world and seeing what they’re reaction
23:58
you get back is now of course you want to be careful you want to be methodical but I do fully agree that most people
24:05
are good at thinking about things and there’s not as many people that do the
24:10
things that they think about that make sense yeah I agree it’s
24:16
the follow through that’s always the hardest part and that’s something where I know I I do very well just jumping
24:22
into the deep end for just getting work done but sometimes when it comes to planning that’s actually where I get my
24:28
anal paralysis if I’m overthinking of what if this happens that happens this happens and but sometimes I just open
24:34
the door say I don’t care let’s go for it that’s something I’ve had to learn for as I don’t know someone was a little
24:40
bit more cautious is just open the door sometimes it’s just you don’t know what’s going to happen but something
24:46
good might happen Ned before you hopped on we were talking about how you had to do with a
24:52
lot of struggles do you think that kind of maybe prepared you for
24:59
perspective on things in a sense like maybe that was I I would assume that’s might have been the most challenging
25:04
thing for you to deal with you talking about my brain surgery or yes I well like I said I was I’m hoping that’s
25:11
probably the most difficult thing you have to go through but not there’s a lot more we need to talk about
25:18
this yeah I don’t know I got lucky whereas I always whether it’s business
25:23
or like personal life challenges like that I’ve always kind of view the people around me is like you want to make sure
25:30
that those people are are good team whether that’s for moral or spiritual or business supporter or
25:36
whatever and I mean I think you’ve heard me tell the story before but one of my favorite stories to go over and it’s
25:42
shaped the way I go about things is when I got out of my brain Tre I remember
25:48
laying there and the first thing I thought of was that seen in Kill Bill where she’s laying there and she can like trying to like she’s like all right
25:54
just move your big toe and when I woke up I like couldn’t move any thing and I looked down and I was like I wonder if I
26:01
can wiggle this is Kill Bill and so I got to where I could ridle myself and
26:06
then within an hour or two that they had me like trying to go down the hall with a walker I’d learned how to walk talk do
26:14
almost everything all over again I couldn’t remember how to do math uh which is weird I could look at
26:19
like math equations and tell you the answer but I couldn’t tell you why there’s like a bunch of weird neurological stuff that didn’t make any
26:25
sense at the time but it was looking back on it I guess you’d call it a formative experience and when I was
26:31
leaving the hospital case in point the doctor said Hey whenever you go to grab
26:37
food or go watch TV or go to the bathroom try and move more than more
26:44
this time than he did last time but I misheard him and I thought he said move
26:49
twice as much and in my head I was like that’s going to be a lot after a week or
26:56
so and so I remember got home I didn’t question it cuz I was like he’s the doctor he must know not realizing I
27:02
misheard him and I remember going like all right got to go to the bathroom first time second time I went to the bathroom literally to the bathroom back
27:08
to the bed to the bathroom and I was like all right now I can and y’all could see how over about a week this got a
27:14
little out of control it got to her was like ah man I gotta go to the bathroom I don’t want to walk around the
27:21
block and at the time I lived like basically across the street from a park
27:26
so I went downstairs and I got to where I would there was like a golf course and
27:32
I would walk to the end of the 18th hole and then back into the house to grabb food from the
27:37
kitchen and eventually within two or three weeks got to where I’d walk around the hole and the thing was is like I
27:43
just stupidly but also my wife who’s a physical therapist came back and she’s the thing you need to do to recer get
27:48
better at things is just volume when you’re trying to relearn how to use stuff and so I just stubbornly pushed
27:55
ahead and I remember getting back to the doctor for my like one month or anywhere from two to four week checkup
28:00
the doctor was like how is he getting around the house and I was like I hate to say it but I got to where it was just
28:06
too much work so I started instead of just doubling the amount my my one mile run is like 14
28:14
minutes instead of back at like 9ine where it used to be and he was like
28:21
what so super not advised not medical advice don’t do that but I learned that if you just put the effort
28:28
in that a lot of times it’ll pay off and the thing I’ve learned with my businesses after that is the shiny thing
28:36
syndrome kind of kills us all so it’s better to just stupidly go forward at
28:41
your one Mission which in my case was like go twice as far as you did last time versus every business I’ve had that
28:49
started to work where I was like cool now that this is working let’s do this other thing now just do more of the
28:54
thing that is giving you the best feedback and the best improvements and it’s boring but
29:01
that’s honestly that’s where I’m at with real estate now I keep that ideas of oh it’d be cool if I get to Self Storage
29:07
what about short-term rentals what about there’s so many things you could do where the thing that we’re all doing is
29:13
probably working if you just did that again 70 more times or five more times
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or two more times or whatever your number is yeah it’s going to be the same thing it’s like monotonous it’s you know
29:25
that’s the hardest part for me as a business operator at this point is realizing it’s hey if I just do one more
29:31
rental like I’m not going to be big enough to affect the whole Market unless I’m in like a tiny World town but I
29:37
don’t know it it feels boring but it’s okay I feel like not enough people talk about how it’s okay to just do the same
29:44
thing again it doesn’t need to be the newest Instagram or Tik Tok or whatever
29:49
Trend just do it again which you say make more a completionist in that way yeah if I play a video game I want all
29:55
the achievements yeah I’ve always been to completionist
30:00
just do the thing get it optimized and then go do another one and honestly if if you do that you’re gonna be better
30:06
each time inde definitely you’re not gonna figure out the code because I
30:11
thought I had my neighborhood figured out then Ida hit and suddenly insurance rates changed and the whole Market that
30:18
I was super used to in New Orleans was suddenly not the same Market anymore just because one factor changed which
30:23
messed everything up well we got some I don’t know if I’m saying right and I I got I think we fra from X and I think
30:30
this is the I didn’t really realize it I’m not sure because before you couldn’t share it but he did post something on X
30:36
so I’ll share it here and he’s just what we’re talking about too is growing Revenue rather than growing your portfolio is a great message and I think
30:43
that kind of relates back to even like the self-managing or property manager sometimes just becoming more efficient
30:50
and instead of you don’t have to scale much bigger but if maybe you take over self-managing and become more efficient
30:55
and now that’s how you’re going to increase revenue and I don’t know if that’s why you mention short-term
31:00
rentals Ned but in his kind of question or comment he does mention short-term rentals are a great way to maximize
31:07
Revenue uh but we also got VT the big bad beard here I think I’ve seen him
31:12
here last week but thanks for stopping by uh Perfection is the enemy of good
31:18
enough Ned that’s what his best what he said see I kind of challenge that
31:23
sometimes um yeah when it I’m glad you brought up your story now because cuz
31:28
yeah I a year and a half ago I had cancer and I actually did my Midway scan
31:34
like halfway through all growths were gone everything was great I was like excellent we can finish early don’t call
31:40
me doc I’ll call you he said before I walked out but no you need to do the whole treatment because it may not show
31:47
up but it could still come back really fast and yeah sometimes you need to do that completion to make sure that it’s
31:54
gone good enough I agree some for a lot of things but for some sometimes especially with real estate I’m like I’m
32:00
not going to do a project half half halfway or just good enough I want to make sure that it’s over engineered and
32:06
fixed so that I don’t have to worry about it like Aaron was saying I don’t want to have to keep coming back to this I want it to be done and at least for a
32:13
while I don’t have to worry about it I think that’s why a lot of people have reached out to me about Aaron’s uh
32:19
remote real estate Academy is because they see Aaron in the school Community or even posting things on social media
32:26
he’s very detail oriented and he’s I don’t know if perfectionist is the right way to put it but I think they’d like
32:33
his systems that he has in place so I think that’s why they’re very interested in the remote real estate Academy
32:39
because that’s what they’re trying to get more efficient at is their systems and is that kind of the things that
32:44
people can find in the autonomy iron yeah I appreciate that that shout out Mark yeah I think I was mentioning at
32:51
the beginning of this question there’s like a dial on one side you have bias for action and people who have no
32:57
problem getting out out there and trying stuff even if it’s not fully baked and then on the other side you have this kind of analysis process where you just
33:04
keep searching for information searching for validation searching for something that’s going to make you feel fully
33:09
confident to take action and finding that sweet spot on the dial is where you can really have Best of Both Worlds my
33:16
personal opinion but yeah as far as also playing off what Fran sis said anyone
33:21
can buy rentals that lose money anyone can go out and buy a property to buy a
33:27
property and run it profitably over a long period of time is a totally different skill set so yeah having good
33:32
systems paying attention to your expenses and like actually auditing your own business and I I always I call it a
33:39
business even though I know most people would rather me call it a passive income stream I’m pretty averse to the term
33:45
passive because I think it’s misrepresentative unless you’re doing unless you’ve completely scaled yourself
33:50
out of your business it is still a business that you have to pay attention to and so a lot of what we teach is just
33:56
yeah how to you install systems along the way even if you only have one property so that you’re building your
34:01
system for 10 properties when you only have one and then as you approach these Milestones of scaling you can keep doing
34:07
it in a way where your systems aren’t going to break like you’re building ahead of where you are so that it again
34:13
you can still manage it within your lifestyle that you want to live and not have your systems break every time you buy a new property yeah that is a Focus
34:20
right is profitability and then systems to make sure it doesn’t expand and take over other important parts of your
34:26
life yeah VT the big bad beard say spot on Aon my sentiments exactly so I think
34:33
yeah hey I really like pass investors I like buying properties from them after they
34:40
fail I think that is a I don’t want to get too much into it but one of my friends he did start buying rentals and
34:47
I think that was he was hoping for it to be very passive and I think that’s why
34:53
he struggled because he didn’t want to do I don’t know if networking is the right way to put it but just
34:59
communicating with different people right finding other people in the market he’s in or asking questions about certain things or he was just basically
35:06
taking the properties manager word for things and I was telling him hey man this this doesn’t add up or this doesn’t
35:11
make sense are you talking to other property managers are you talking to other people in your market and yeah he
35:18
just looked at it as something that he wanted to be very passive and he ended up having to sell a few just part of it
35:24
just to get over the headache I believe
35:29
let’s see here yeah look let’s see I’m back got the bot okay no worries hder
35:35
thanks for stopping by I know there’s a bunch of stuff going on right now there’s like Dion has a live going on I
35:41
know School Community has the autate investing group going on right now but we are over 50 viewers combined on all
35:49
platforms but that’s great like I said Lauren’s not here so that’s a record I think for us to getting to that amount
35:55
without Lauren on here but I know Ned maybe this is something you can touch on a little bit more because I know you do
36:01
insurance but this is the let’s see this from on Twitter also default oh no not
36:07
this one right this one from Jason ccan is from all-in podcast he says imagine
36:13
paying Insurance on your home for 30 years never using it then having it canceled six month before it burns to
36:19
the ground yeah and insurance is cancell you can get new insurance yeah but I know
36:26
California is having a tough time a lot of companies are pulling out and even New Orleans I think you guys are having
36:32
some insurance issues and as far as cost of it and is it challenging to find
36:37
Insurance in your market so State Farm as is one of the majors that has
36:43
recently come back and just for example one of my fourplexes the shout out to Lumberjack landlord him and I were
36:50
talking and he brought up State Farm I was like I don’t think they’re around and then we figured out that because my
36:56
quote for renewal this year was 25,000 on my fourplex my new quote that came back in
37:02
was 14,000 so that’s all to the net that that that’s all bottom line right there
37:09
so that’s a big help but at the same time and a lot of it in a lot of I’m not
37:15
going to get too much into Louisiana specifically I work in the industry I don’t want to I don’t want to ruffle any
37:21
feathers but a lot of times you get what you’re vote for and you know that’s just the way it
37:28
works if you for example keep on putting people in office who try and make it to
37:34
where whenever there’s a claim that the judicial system always sides with the
37:40
the homeowner then sorry cost go for the insurance companies they’re not going to not charge you for
37:46
it and then if those those laws are so strict and so orous that insurance
37:52
companies can’t make money then they’re just going to leave the only way to really fix the
37:58
problem is to reel in the lawyers and fix the laws and deregulate so insurance
38:04
companies can come in and try and compete with each other because you can’t regulate the law down you can’t
38:11
regulate the prices down you you you got to get enough companies to come into your your area to compete and push the
38:19
prices down there’s just no other way to do it and if you scare every Everybody away except for one one or two of the
38:26
local guys or big guys then they can do whatever they want on
38:31
price yeah we don’t want to ruffle any feathers here but uh I’m not naming anyone’s no I I I totally agree yeah I
38:38
think hopefully the sadness or the fires that are going on in California is like
38:45
think a lot of it very unfortunate but yeah a lot of times it’s who’s in office right who people are voting for and the
38:51
policies they make and sometimes there’s bad results for bad policies and you’re not going to be able to prevent fires
38:57
but at the same time there’s probably things that could be done with resources and and funding and a lot of that yeah I
39:04
don’t know enough about it but I’ve heard people say that there’s things they can do with Forest management that would prevent a lot of that stuff and I
39:11
know California tends to have like weird practices we can’t C The Forest of of brush over there because we’re going to
39:17
mess with the endangered I don’t know trumpet frog or whatever it
39:22
is and they’re like they could have their water issue they have right now I remember they voted to not put in a
39:29
desalinization plan off the coast of want to say Los Angeles because of some issue that it was going to cause with
39:35
Plankton within a one mile radius around the desalinization plant so so a lot of these maybe each of those
39:43
decisions individually didn’t cause the issue but I’m sure if you went and looked at all of the votes that were
39:49
decided over 20 years that had to do with water or insurance or whatever they add up
39:57
it’s compound interest but with just legal instead yeah totally agree I I think a lot of it there’s a lot of
40:03
things that like I said we we don’t know for sure but there is things they probably could have done and it’s not just like something that happened in the
40:09
past year right it’s something that probably was over a 20 year policies that were put in place and then they
40:15
just compounded on each other and let’s see VT I was asking where Jack is yeah
40:20
Jack is pretty popular on this channel he’s the potato hat wearing guy but Jack is very entertaining but go check out
40:27
his channel cuz apparently when I put the links in they’re not working but go check out Jack’s business talk he’s
40:32
doing a lot of cool stuff out there a lot of shorts but yeah you guys Harrison Aaron you guys have any issues with uh
40:38
getting insurance or you guys insurance going up quite a bit this past year I’ll make one comment on insurance so I live
40:44
in the in Houston which is pretty close to the gulf prone to storms historically pretty tough market for insurance we
40:51
just moved here in August of 2023 we moved into a home where already we felt the insurance was pretty expensive
40:57
expensive and then our renewal in 2024 was 40% higher there’s never been a
41:02
claim on this house we have reasonably good claims history ourselves and so that tweet that you showed from Jason
41:08
where it talks about basically you you never made a claim but you’re getting punished for the external factors and
41:14
ours didn’t get cancelled but they it did go up through no direct input of our own actions and so I think the point I
41:21
would try and make there is we can’t really do much about this on an individual level yes yes like totally hear the point on
41:28
paying attention to the policies and in general I feel like you should vote regardless of what you’re voting for
41:34
right like you should be informed and and try and participate in things especially things that might impact you
41:39
but overall we have very little control over what happens in the insurance Market as a whole so I think when you go
41:46
part of why I like remote investing is that you can choose to invest where you
41:51
want based on what you’re looking for and so if avoiding this type of situation and these and the climate risk
41:57
and the impact that has on insurance is something you don’t want to deal with there are great markets that have
42:02
insurance issues but there are also great markets that don’t have those same issues so teaching yourself learning how
42:08
to pick a market and adapt it to what you’re actually looking for I think is is a great skill and then not trying to
42:15
get too hung up on things you can’t control because the end of the day we’re still planning to live in Houston it still fits our fam’s phase of life that
42:22
we’re in and the objectives that we have but we’re probably going to get beat over the head a little bit on our Insurance renewals then we just have to
42:28
accept that yeah that’s a great point I actually chose markets that were very
42:34
consistent with their insurance I worked in Insurance a while ago and so I was
42:39
very cognizant of that and so no raises yet KN on wood but I guess in Virginia
42:45
right now we’re at the no water I don’t know if you heard about that but it’s just so we have our own problems but
42:52
insurance right now thankfully isn’t one of them all right well about an hour I don’t mind understanding lot I got
42:58
nothing else going on if you guys got to bounce you guys can bounce but if you guys want to talk about anything else
43:04
or I want to highlight one thing go I want to highlight one thing Ned said that I thought was really poignant it
43:10
right when you start to make progress or get really good at something if you shift gears and go take on something
43:16
else and ignore what was working like that’s probably one of the most critical mistakes mistake is subjective but like
43:23
that could be a a turning point in your journey where you choke off off something that’s working and you go shift towards something that’s unproven
43:30
in your own world if you do that three or four times it’s pretty easy for two three four years to go by with a bunch
43:36
of half-baked ideas that never pan out so I do think that that that was a really good point and when it comes to
43:43
stuff like trying to squeeze more three startups a quarter of a million dollars
43:49
gotone to that three he said three startups quarter a million just set on fire doing that had to sell my house
43:55
move back in with my parents twice I didn’t sell a house the second time I was renting my had still had to move back in actually I there was something I
44:01
was going to say and I forgot to bring it up but we were talking about kind of um things not being as easy or as hard
44:07
as they seem is I don’t know if you guys ever effed up trailers and things like that where you supposed to you’re trying
44:14
to make the trailer go right so you got to turn left and you’re using your side mirrors so basically you can’t use your
44:19
rearview mirror like if you have a big trailer so you can’t overcorrect things like once you start seeing in the mirror
44:26
is when you’re going to straighten now if you make too much Corrections now you’re going to you’re going to lose the direction the truck’s going to go in or
44:32
the load’s going to go in so I see a lot of that in life investing is you’re going to make small Corrections if you
44:37
start overcorrecting things now you’re going to get yourself in trouble or head in a different direction in a sense and
44:43
I think you guys all touched on that too is just sometimes you’re just becoming more efficient at what you’re doing
44:48
instead of just trying to always go bigger or like n touched on the shiny object syndrome but another oh haer had
44:55
I forgot where we were talking about this but haer I don’t know if you guys knew about this we’re talking about some
45:01
economic data or what the government puts out there but there’s fasb 56 is
45:07
good enough for investment purposes so like a lot of times the government when they put out their information their
45:13
economic data it’s not necessarily false or inaccurate it’s just the information
45:19
they’re required to put out there it only has to be good enough for investment purposes because of global
45:25
concerns security reasons yeah I found that very interesting hey my backup trailer is getting some thumbs up I like
45:32
that see I don’t just make up out here you got you got more audience response from backing up the trailer
45:38
story than you did from fasp 56 oh I I found that very interesting because a
45:43
lot of times we’re always like oh there’s fake information or they’re correcting it or they’re not this this
45:49
is false data but like Hyer brought up a lot of times is is information good
45:54
enough or close enough to the truth for investment purposes where they’re not really lying to you but at the same time
46:00
it’s not maybe the exact data that they’re oh yeah filtered for national security reasons so where my head goes
46:07
with that is like all of this data that gets published whether it’s from the government or independent research firms
46:13
the question I always ask is what impact does that actually have on the decisions I have to make for the business I’m
46:19
trying to build and the answer nine times out of 10 for a lot of that data is nothing like it doesn’t actually
46:25
impact what I’m going to do and my overall thesis about building a portfolio of cash flowing rentals that
46:31
have solid fundamentals without taking on too much leverage like a lot of those parameters exist no matter what the
46:39
external maybe if the country was burning down and we were in the middle of a nuclear war then we have bigger problems anyway so I don’t know I don’t
46:45
mean to skirt around the actual question about the data but i’ always apply that lens and try not to get too wrapped up
46:51
in in all these different reports and information that comes out if it’s not actually impacting what I’m doing very
46:57
true thank you for making it to the end of today’s episode as you may know podcasts are very difficult to grow
47:03
organically if you’re getting value from today’s episode I’d deeply appreciate if you can take 30 seconds to leave my show
47:08
a five-star rating and review this will go a long way to helping me reach more listeners just like you thank you so
47:14
much in advance [Music]