October 28, 2025 • 18 mins
Many investors focus on cash flow, but they’re often looking at it the wrong way.
In this episode, William Lokar shares a common mistake he sees investors make when analyzing cash flow and explains how to look at your numbers more accurately. He also talks about how understanding the difference between return on investment and return on equity can completely change how you manage and grow your portfolio.
William explains how he started as a real estate investor and how he’s built his portfolio over time.
He shares what it’s really like to buy a property with tenants already in place, and what he’s learned from managing both long-term rentals and short-term Airbnbs. He also tells the story of a creative way he found one of his best deals, and how thinking outside the box helped him grow faster.
Thanks To Our Sponsors:
Ridge Lending Group - Making investment Mortgage process simple and stress-free.
MidSouth HomeBuyers – Turnkey Rentals In Memphis & Little Rock. Instant Cash Flow On Day One. (Priced between $100,000 to low $200's)
Rental Accounting Software Made Easy. Free 30 Day Trial.
In this episode, William Lokar shares a common mistake he sees investors make when analyzing cash flow and explains how to look at your numbers more accurately. He also talks about how understanding the difference between return on investment and return on equity can completely change how you manage and grow your portfolio.
William explains how he started as a real estate investor and how he’s built his portfolio over time.
He shares what it’s really like to buy a property with tenants already in place, and what he’s learned from managing both long-term rentals and short-term Airbnbs. He also tells the story of a creative way he found one of his best deals, and how thinking outside the box helped him grow faster.
Thanks To Our Sponsors:
Ridge Lending Group - Making investment Mortgage process simple and stress-free.
MidSouth HomeBuyers – Turnkey Rentals In Memphis & Little Rock. Instant Cash Flow On Day One. (Priced between $100,000 to low $200's)
Rental Accounting Software Made Easy. Free 30 Day Trial.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The inspiring interviews with today is Top Landlord, this is
the Rental Income Podcast and now Damnly.
Speaker 2 (00:09):
William, you started buying rental properties twelve years ago and
you're still buying properties today. Is it hard for you
to wrap your head around that the price of real
estate goes up and you're going to have to pay
more for a property today than you would have had
to pay in the past.
Speaker 1 (00:28):
Sometimes it does.
Speaker 3 (00:29):
It really depends, you know, on the type of property
and how I'm looking to piece that into my portfolio.
I don't tend to be somebody that goes it deals
with a one size fits all kind of mentality. It
really depends on the property, what type of financing I
can get, you know, what type of rent? Is this
(00:51):
going to be mainly a cash flow play? Is it
going to be an appreciation play. I actually just closed
on one in July. That was a condo that came
to me through a client of mine, and they didn't
want to have to do any work before putting it
on the market, So I threw out a couple of
owner financing scenarios and was able to pick up the
(01:12):
property with one hundred percent owner financing at four and
a half percent, and while the cash flow on it
is not significant, being able to secure that financing and
hold on to that property for relatively a little out
of pocket was well worth it.
Speaker 2 (01:29):
On the podcast today, William's going to share a mistake
that he sees a lot of investors make with cash flow.
We'll talk about his experience buying properties with tenants already
in place, and he's also going to share a creative
way that he was recently able to find a deal.
Joining us on the podcast today from Lynchberg is William Locar.
(01:50):
We'll take a quick break to think our sponsors. We'll
come right back and we'll talk to William. Are you
thinking about investing in rental properties? But maybe you don't
know where to start. My friends at Midsouth home Buyers
make it simple. For over twenty three years, they've been
selling fully renovated, turnkey rental properties in Memphis and Little Rock.
(02:12):
We're talking new roofs, plumbing, electric, kitchens, bathrooms. Everything is
brand new and done right. And here's the best part.
Every property comes with a well qualified tenant in place
before you close. That means you get cash flow from
day one. Plus. Midsouth continues to professionally manage the property
(02:32):
for you after the sale, and they back it up
with two powerful guarantees. You get a one year total
maintenance warranty and a lifetime occupancy guarantee. Personally, I've bought
five properties from them and I couldn't be happier. If
you want to talk to someone that's been through the process,
feel free to reach out to me. I'm happy to
(02:53):
answer any questions. Or if you're ready to get started,
just go to midsouthhome Buyers dot com. That's midsouthhome Buyers
dot com. It's a lot of work to find a
really good rental property, and when you actually find that property,
you want to make sure you're working with a lender
that can get that loan closed. The lender that I
recommend is jay Lee Ridge from Ridge Lending Group. She's
(03:15):
a nationwide lender and her specialty is helping investors finance
rental properties. She has a ton of loan programs and
she can find something customized to you for your situation.
If you want to find out more or you're ready
to get started today, just go to Ridge Lendinggroup dot com.
That's our Idge Lendinggroup dot com. N MLS four two
(03:38):
zero five six, William, tell me about your portfolio.
Speaker 3 (03:42):
Yeah, so, right now, our portfolio stands at eight single
family houses where we're looking to purchase another before year's end.
We've got six long term rentals in the Lynchburg, Virginia area.
We have a short term rental in Kingsport, Tennessee, and
another work term rental in Cottonwood, Arizona.
Speaker 2 (04:02):
So let's talk about your mindset when you're going into
a deal, Like when you buy a property, does it
need to cash flow right away or are you happy
just to break even knowing that and the future rents
are going to go up and it's going to be
a better investment over time.
Speaker 3 (04:20):
I'm somebody that will take a low cash flowing deal upfront.
You know, if it's something that I can get into
with relatively low cost, then I like the appreciation potential.
Speaker 1 (04:31):
I'll do that.
Speaker 3 (04:32):
I feel like there are too many investors nowadays, particularly
folks that are starting off and may still be relatively
young and have a lot of years to invest, that
are backing away from deals that could be great long
term opportunities for them because you know, they've they've been
conditioned through all of their research to think that they
(04:54):
need a deal that's going to cash flow five hundred
dollars a month on day one, and those those deals
are a lot harder to come by now, unless, of course,
you're you know, you're going to finance it one hundred
percent with cash. It's you know, given our interest rates
and prices, et cetera, finding that heavy cash flow on
(05:16):
day one is a lot more difficulty.
Speaker 2 (05:18):
It's tough. I agree with you on that, but you know,
if you think long term, you're probably going to hit
that five hundred dollars month eventually. You know, if you
can just hang in there and wait for rents to
go up, I think in ten or twenty years you're
going to be very happy with making a purchase today.
(05:39):
Let's go back to the beginning. How did you get started?
Speaker 3 (05:41):
Yeah, so, so, I, like a lot of other first
time investors, I sat on the fence for a while,
you know, trying to figure out when I was going
to pull the trigger. And for us, it really came
down to a point where we're kind of pushed into
it because we had sold our primary we were looking
to either build or buy. We really weren't sure what
(06:02):
we're going to do. We had a two year old
and a four year old at home and started looking
at rental properties, and we were either looking at college
apartments and I didn't want to do that with a
two year old and a four year old, or we
were looking at rundown houses that were for rent that
couldn't sell on the market, So you had reluctant landlords
that didn't necessarily have experience owning rental properties. So we
(06:31):
decided what the market was missing at that point in
time were houses that were well kept that were affordable,
and that's kind of what we set out to do.
So we bought that rio and we were able to
get a loan based on the tax assessed value, which
(06:51):
was just up over one hundred thousand, and we bought
the property for sixty five k. I was strategically looking
for properties that I could get at at least twenty
percent below whatever the tax assess value was, So I
was finding properties that were assessed in the one hundred
to one hundred and ten thousand range that I was
picking up for eighty thousand, eighty five thousand, seventy five thousand,
(07:17):
and that's how we know built our portfolio for the
first four years you know, once we moved on to
the second property because it was no longer our primary residence,
so the down payments were a little bit higher, Okay,
so slowed our progress, but still gave us a good opportunity.
Speaker 2 (07:34):
So that first property that became your first rental, that
was your primary residence when you bought it.
Speaker 3 (07:41):
Yes, and we lived there for a year, and then
our tenants moved in the day we moved out, and
they stayed for the first five years. So it really
turned out to be a great, a great situation for
us getting started.
Speaker 2 (07:53):
So now with your other properties, have you ever bought
a property with a tenant in the property I have?
Speaker 3 (08:00):
I've bought two that had tenants in them. One was
the property I mentioned earlier where we utilized partial owner financing.
We bought that property in April twenty twenty. That same
tenant is still in there today and she's she's been
a really solid tenant.
Speaker 2 (08:18):
So how do you know when you buy a property
and the tenant's already there, Like, how do you know
that the tenant is paying and that it's somebody that
you would rent to. Maybe the previous landlord they were
good enough for their standards, but how do you know
that it's someone that you would actually rent to.
Speaker 3 (08:38):
Yeah, I mean both properties that I bought, the properties
were in good shape. We did have one tenant.
Speaker 1 (08:44):
That left.
Speaker 3 (08:47):
Is kind of off and on with payments, would get behind,
would catch up, would get behind, and and it just
for us to just got to a point that we
were ready to sell that property. So we you know,
we did exercise a thirty day notice, but it was
probably i would say fifty to fifty on the tenant
(09:12):
not being necessarily reliable anymore and the.
Speaker 1 (09:17):
Desire that we had to sell the property.
Speaker 2 (09:19):
So you mentioned that you were getting ready to sell
that property. So have you sold properties along the way
or what was that just a one off?
Speaker 3 (09:28):
We have sold a couple We had two townhouses in
the same development that we've now since sold both of them.
That they were just generating too much equity for what
we were going to get in rent. And you know,
when you talk to investors, you hear a lot about
cash on cash return, but ultimately, after you get past
(09:50):
your first couple of years with a rental property, you
really need to start evaluating your return on equity because
as you build that equity, it's how you know, how
quickly can you turn that equity into additional cash flow.
And you know, those properties were getting to the point
where they had way more equity than we were going
(10:14):
to get, you know, in terms of reliable cash flow
on those properties. So it made sense for us to
go ahead and and move on from those and and
right now we just have the capital sit and waiting
for the next the next opportunity.
Speaker 2 (10:28):
Yeah, I mean that's such a good point. I think
it's it's hard to do. I know that there's a
couple of properties I have that have a lot of equity,
and it's it's just hard to to sacrifice a property,
to sell a property that's that's doing well and take
that equity. But you know, sometimes you might be able
(10:49):
to buy two properties or three properties, depending on how
much appreciation you have in there. Is that is that
what your plan is?
Speaker 1 (10:57):
Yeah?
Speaker 3 (10:57):
I think that's that's part of it for sure. You know,
when we started, we bought our first four properties and
then kind of took a little bit of time away
from purchasing, and that was really really had a twofold
reasoning behind it. One, you know, we wanted to give
(11:18):
those properties some time to generate equity and you know,
thedn give us an opportunity to move on, but also,
you know, it's one of those things. As an early investor,
I started looking at the market, watched prices starting to climb,
and started thinking, well, I don't want to chase the market.
You know, these properties are one hundred and twenty thousand
(11:40):
now and I bought them for eighty And I think
that was kind of naive on my part at the time.
And I think it was probably the third time I
read rich Dad port ad I you know, it really
clicked for me that, you know, these properties that were
one twenty that are one twenty now that I paid
eighty four where they were fifty, you know several.
Speaker 1 (12:02):
Years before that.
Speaker 3 (12:04):
And if I worry about chasing the market, I'm going
to miss opportunities. And as long as I can find
a way to make that property work, whether it's cash
flow or force appreciation or whatever strategy, you know, that
property was going to use to fit my portfolio, it
(12:28):
was okay to buy. And that change of mindset in
twenty twenty really allowed us to move much more quickly
and we double the size of our portfolio in a
year by just changing that mindset from all this deal
won't work to how can I make this deal work?
Speaker 2 (12:45):
Right now? As far as finding deals, I want to
ask you about about finding a deal, which I think
is a pretty creative thing. You did so you want
a property that's in an HOA and you became the
HOA president and being the president helped you find a deal.
Can you walk us through that?
Speaker 1 (13:07):
Yeah? I did so.
Speaker 3 (13:09):
So the complex that I just mentioned that we had
sold both of our properties. We no longer own any
in that in that development right now, but we bought one.
It was the fourth property that we bought rehabbed it,
and I started having conversations with folks and they were
looking for somebody to join their HOA board. It's a
it was a twenty unit property or yeah, twenty unit
(13:32):
development and you know, completely run by the residents. So
you know, depending on how much engagement you have from
the residence, it could be a good thing or a
bad thing. So I decided to join the board. I
figured what better way to kind of have a sense of,
you know, what's going on with my investment than being
part of the board. So after year or two, I
(13:54):
ended up being the being the president and we had
a lady in the development that was behind on her
ha dues and we were trying to track her down.
And one day I get a call from a tenant
at the property and she said, hey, I'm running this property.
Do you know where the owner is? And I said well,
I said, we had no idea there was a runner
(14:16):
there and we're looking for too, so if you hear
from her, please please let us know. Well, a few
weeks later I get a call from the same lady.
She said, hey, for sales sign just went in the
yard outside. I said really, She said yeah, have you
heard from her? I said no, I said, I don't
know anything about this. And the tenant was really frustrated
(14:38):
because she said her heat pump wasn't working. We were
starting to come into the fall fall munth. She said,
if I get to winter and don't have a heat pump,
I'm going to call the county and have the property condemned.
So I started thinking. I said, well, I said, can
I come by and take a look at it? And
she said sure. So I went by and I'm expecting
(14:58):
a property that's currently renting below market rent and laid
on hadues, et cetera. I'm expecting to be in pretty
bad shape, but the property was an excellent condition, and
I said, okay, I know the situation with the hua.
I knew nobody else had seen the property because the
real estate agent was trying to get keys from the
(15:19):
tenant because he couldn't contact the owner anymore. And we
put an offer in on it and the agent could
not get a hold of his client and the offer expired.
So then the tenant, when the owner eventually showed up
(15:40):
looking for her rent, the tenant said, I'm not paying
you your rent until you contact your agent.
Speaker 1 (15:44):
You have an offer.
Speaker 3 (15:46):
So through this whole process of putting our offer together,
I had been in conversation with the tenant. I said, well,
what's you're paying? I can't I can't make that work.
I said, if if I was going to put this
on the market, this is this is what i'd charge.
Can you meet me halfway? And she said, if you
if you fix the heating. Absolutely, So we already had
(16:06):
the least renegotiated going into this offer. The agent actually
reached back out and said, hey, does your offer stand.
We said yeah, certainly. So we were able to pick
up that property with the tenant for really a steal
and I went in on day one, put a heat
(16:28):
pump in for you know, she was there several years.
I would say. All told, we probably put maybe ten
thousand into it. We bought it for one twenty five,
put about ten into it, ended up selling for two
thirty seven.
Speaker 2 (16:43):
Nice.
Speaker 1 (16:44):
It turned out to beat a great opportunity for us.
Speaker 2 (16:47):
In addition to his rental properties, William is also an agent.
He works in two different markets. He's in Lynchburg, Virginia
and Kingsport, Tennessee. And if you're interested in investing in
either of those markets and you want to reach out
to William, I've got his contact information on the website.
You can find it at Rental incomepodcast dot com slash
(17:11):
episode five forty five. I'd like to thank jay Ley
Ridge from Ridge Lending Group for sponsoring today's episode. If
you're looking to buy a rental property, whether you're just
getting started or you want to add to your portfolio,
reach out to Chailey and right now she's offering a
free thirty minute strategy session to help you get a
(17:32):
plan together to build your rental portfolio. If you want
to take advantage of that, just go to Ridgelendinggroup dot
com NMLS four two zero five six. Thank you so
much for checking out the podcast today. Make sure you
hit the follow button. I put out a new interview
every single Tuesday, and if you're following the show, you'll
(17:54):
get notified when the next episode comes out. My name
is Dan Lane and this has been the Rental Income
podcast
The inspiring interviews with today is Top Landlord, this is
the Rental Income Podcast and now Damnly.
Speaker 2 (00:09):
William, you started buying rental properties twelve years ago and
you're still buying properties today. Is it hard for you
to wrap your head around that the price of real
estate goes up and you're going to have to pay
more for a property today than you would have had
to pay in the past.
Speaker 1 (00:28):
Sometimes it does.
Speaker 3 (00:29):
It really depends, you know, on the type of property
and how I'm looking to piece that into my portfolio.
I don't tend to be somebody that goes it deals
with a one size fits all kind of mentality. It
really depends on the property, what type of financing I
can get, you know, what type of rent? Is this
(00:51):
going to be mainly a cash flow play? Is it
going to be an appreciation play. I actually just closed
on one in July. That was a condo that came
to me through a client of mine, and they didn't
want to have to do any work before putting it
on the market, So I threw out a couple of
owner financing scenarios and was able to pick up the
(01:12):
property with one hundred percent owner financing at four and
a half percent, and while the cash flow on it
is not significant, being able to secure that financing and
hold on to that property for relatively a little out
of pocket was well worth it.
Speaker 2 (01:29):
On the podcast today, William's going to share a mistake
that he sees a lot of investors make with cash flow.
We'll talk about his experience buying properties with tenants already
in place, and he's also going to share a creative
way that he was recently able to find a deal.
Joining us on the podcast today from Lynchberg is William Locar.
(01:50):
We'll take a quick break to think our sponsors. We'll
come right back and we'll talk to William. Are you
thinking about investing in rental properties? But maybe you don't
know where to start. My friends at Midsouth home Buyers
make it simple. For over twenty three years, they've been
selling fully renovated, turnkey rental properties in Memphis and Little Rock.
(02:12):
We're talking new roofs, plumbing, electric, kitchens, bathrooms. Everything is
brand new and done right. And here's the best part.
Every property comes with a well qualified tenant in place
before you close. That means you get cash flow from
day one. Plus. Midsouth continues to professionally manage the property
(02:32):
for you after the sale, and they back it up
with two powerful guarantees. You get a one year total
maintenance warranty and a lifetime occupancy guarantee. Personally, I've bought
five properties from them and I couldn't be happier. If
you want to talk to someone that's been through the process,
feel free to reach out to me. I'm happy to
(02:53):
answer any questions. Or if you're ready to get started,
just go to midsouthhome Buyers dot com. That's midsouthhome Buyers
dot com. It's a lot of work to find a
really good rental property, and when you actually find that property,
you want to make sure you're working with a lender
that can get that loan closed. The lender that I
recommend is jay Lee Ridge from Ridge Lending Group. She's
(03:15):
a nationwide lender and her specialty is helping investors finance
rental properties. She has a ton of loan programs and
she can find something customized to you for your situation.
If you want to find out more or you're ready
to get started today, just go to Ridge Lendinggroup dot com.
That's our Idge Lendinggroup dot com. N MLS four two
(03:38):
zero five six, William, tell me about your portfolio.
Speaker 3 (03:42):
Yeah, so, right now, our portfolio stands at eight single
family houses where we're looking to purchase another before year's end.
We've got six long term rentals in the Lynchburg, Virginia area.
We have a short term rental in Kingsport, Tennessee, and
another work term rental in Cottonwood, Arizona.
Speaker 2 (04:02):
So let's talk about your mindset when you're going into
a deal, Like when you buy a property, does it
need to cash flow right away or are you happy
just to break even knowing that and the future rents
are going to go up and it's going to be
a better investment over time.
Speaker 3 (04:20):
I'm somebody that will take a low cash flowing deal upfront.
You know, if it's something that I can get into
with relatively low cost, then I like the appreciation potential.
Speaker 1 (04:31):
I'll do that.
Speaker 3 (04:32):
I feel like there are too many investors nowadays, particularly
folks that are starting off and may still be relatively
young and have a lot of years to invest, that
are backing away from deals that could be great long
term opportunities for them because you know, they've they've been
conditioned through all of their research to think that they
(04:54):
need a deal that's going to cash flow five hundred
dollars a month on day one, and those those deals
are a lot harder to come by now, unless, of course,
you're you know, you're going to finance it one hundred
percent with cash. It's you know, given our interest rates
and prices, et cetera, finding that heavy cash flow on
(05:16):
day one is a lot more difficulty.
Speaker 2 (05:18):
It's tough. I agree with you on that, but you know,
if you think long term, you're probably going to hit
that five hundred dollars month eventually. You know, if you
can just hang in there and wait for rents to
go up, I think in ten or twenty years you're
going to be very happy with making a purchase today.
(05:39):
Let's go back to the beginning. How did you get started?
Speaker 3 (05:41):
Yeah, so, so, I, like a lot of other first
time investors, I sat on the fence for a while,
you know, trying to figure out when I was going
to pull the trigger. And for us, it really came
down to a point where we're kind of pushed into
it because we had sold our primary we were looking
to either build or buy. We really weren't sure what
(06:02):
we're going to do. We had a two year old
and a four year old at home and started looking
at rental properties, and we were either looking at college
apartments and I didn't want to do that with a
two year old and a four year old, or we
were looking at rundown houses that were for rent that
couldn't sell on the market, So you had reluctant landlords
that didn't necessarily have experience owning rental properties. So we
(06:31):
decided what the market was missing at that point in
time were houses that were well kept that were affordable,
and that's kind of what we set out to do.
So we bought that rio and we were able to
get a loan based on the tax assessed value, which
(06:51):
was just up over one hundred thousand, and we bought
the property for sixty five k. I was strategically looking
for properties that I could get at at least twenty
percent below whatever the tax assess value was, So I
was finding properties that were assessed in the one hundred
to one hundred and ten thousand range that I was
picking up for eighty thousand, eighty five thousand, seventy five thousand,
(07:17):
and that's how we know built our portfolio for the
first four years you know, once we moved on to
the second property because it was no longer our primary residence,
so the down payments were a little bit higher, Okay,
so slowed our progress, but still gave us a good opportunity.
Speaker 2 (07:34):
So that first property that became your first rental, that
was your primary residence when you bought it.
Speaker 3 (07:41):
Yes, and we lived there for a year, and then
our tenants moved in the day we moved out, and
they stayed for the first five years. So it really
turned out to be a great, a great situation for
us getting started.
Speaker 2 (07:53):
So now with your other properties, have you ever bought
a property with a tenant in the property I have?
Speaker 3 (08:00):
I've bought two that had tenants in them. One was
the property I mentioned earlier where we utilized partial owner financing.
We bought that property in April twenty twenty. That same
tenant is still in there today and she's she's been
a really solid tenant.
Speaker 2 (08:18):
So how do you know when you buy a property
and the tenant's already there, Like, how do you know
that the tenant is paying and that it's somebody that
you would rent to. Maybe the previous landlord they were
good enough for their standards, but how do you know
that it's someone that you would actually rent to.
Speaker 3 (08:38):
Yeah, I mean both properties that I bought, the properties
were in good shape. We did have one tenant.
Speaker 1 (08:44):
That left.
Speaker 3 (08:47):
Is kind of off and on with payments, would get behind,
would catch up, would get behind, and and it just
for us to just got to a point that we
were ready to sell that property. So we you know,
we did exercise a thirty day notice, but it was
probably i would say fifty to fifty on the tenant
(09:12):
not being necessarily reliable anymore and the.
Speaker 1 (09:17):
Desire that we had to sell the property.
Speaker 2 (09:19):
So you mentioned that you were getting ready to sell
that property. So have you sold properties along the way
or what was that just a one off?
Speaker 3 (09:28):
We have sold a couple We had two townhouses in
the same development that we've now since sold both of them.
That they were just generating too much equity for what
we were going to get in rent. And you know,
when you talk to investors, you hear a lot about
cash on cash return, but ultimately, after you get past
(09:50):
your first couple of years with a rental property, you
really need to start evaluating your return on equity because
as you build that equity, it's how you know, how
quickly can you turn that equity into additional cash flow.
And you know, those properties were getting to the point
where they had way more equity than we were going
(10:14):
to get, you know, in terms of reliable cash flow
on those properties. So it made sense for us to
go ahead and and move on from those and and
right now we just have the capital sit and waiting
for the next the next opportunity.
Speaker 2 (10:28):
Yeah, I mean that's such a good point. I think
it's it's hard to do. I know that there's a
couple of properties I have that have a lot of equity,
and it's it's just hard to to sacrifice a property,
to sell a property that's that's doing well and take
that equity. But you know, sometimes you might be able
(10:49):
to buy two properties or three properties, depending on how
much appreciation you have in there. Is that is that
what your plan is?
Speaker 1 (10:57):
Yeah?
Speaker 3 (10:57):
I think that's that's part of it for sure. You know,
when we started, we bought our first four properties and
then kind of took a little bit of time away
from purchasing, and that was really really had a twofold
reasoning behind it. One, you know, we wanted to give
(11:18):
those properties some time to generate equity and you know,
thedn give us an opportunity to move on, but also,
you know, it's one of those things. As an early investor,
I started looking at the market, watched prices starting to climb,
and started thinking, well, I don't want to chase the market.
You know, these properties are one hundred and twenty thousand
(11:40):
now and I bought them for eighty And I think
that was kind of naive on my part at the time.
And I think it was probably the third time I
read rich Dad port ad I you know, it really
clicked for me that, you know, these properties that were
one twenty that are one twenty now that I paid
eighty four where they were fifty, you know several.
Speaker 1 (12:02):
Years before that.
Speaker 3 (12:04):
And if I worry about chasing the market, I'm going
to miss opportunities. And as long as I can find
a way to make that property work, whether it's cash
flow or force appreciation or whatever strategy, you know, that
property was going to use to fit my portfolio, it
(12:28):
was okay to buy. And that change of mindset in
twenty twenty really allowed us to move much more quickly
and we double the size of our portfolio in a
year by just changing that mindset from all this deal
won't work to how can I make this deal work?
Speaker 2 (12:45):
Right now? As far as finding deals, I want to
ask you about about finding a deal, which I think
is a pretty creative thing. You did so you want
a property that's in an HOA and you became the
HOA president and being the president helped you find a deal.
Can you walk us through that?
Speaker 1 (13:07):
Yeah? I did so.
Speaker 3 (13:09):
So the complex that I just mentioned that we had
sold both of our properties. We no longer own any
in that in that development right now, but we bought one.
It was the fourth property that we bought rehabbed it,
and I started having conversations with folks and they were
looking for somebody to join their HOA board. It's a
it was a twenty unit property or yeah, twenty unit
(13:32):
development and you know, completely run by the residents. So
you know, depending on how much engagement you have from
the residence, it could be a good thing or a
bad thing. So I decided to join the board. I
figured what better way to kind of have a sense of,
you know, what's going on with my investment than being
part of the board. So after year or two, I
(13:54):
ended up being the being the president and we had
a lady in the development that was behind on her
ha dues and we were trying to track her down.
And one day I get a call from a tenant
at the property and she said, hey, I'm running this property.
Do you know where the owner is? And I said well,
I said, we had no idea there was a runner
(14:16):
there and we're looking for too, so if you hear
from her, please please let us know. Well, a few
weeks later I get a call from the same lady.
She said, hey, for sales sign just went in the
yard outside. I said really, She said yeah, have you
heard from her? I said no, I said, I don't
know anything about this. And the tenant was really frustrated
(14:38):
because she said her heat pump wasn't working. We were
starting to come into the fall fall munth. She said,
if I get to winter and don't have a heat pump,
I'm going to call the county and have the property condemned.
So I started thinking. I said, well, I said, can
I come by and take a look at it? And
she said sure. So I went by and I'm expecting
(14:58):
a property that's currently renting below market rent and laid
on hadues, et cetera. I'm expecting to be in pretty
bad shape, but the property was an excellent condition, and
I said, okay, I know the situation with the hua.
I knew nobody else had seen the property because the
real estate agent was trying to get keys from the
(15:19):
tenant because he couldn't contact the owner anymore. And we
put an offer in on it and the agent could
not get a hold of his client and the offer expired.
So then the tenant, when the owner eventually showed up
(15:40):
looking for her rent, the tenant said, I'm not paying
you your rent until you contact your agent.
Speaker 1 (15:44):
You have an offer.
Speaker 3 (15:46):
So through this whole process of putting our offer together,
I had been in conversation with the tenant. I said, well,
what's you're paying? I can't I can't make that work.
I said, if if I was going to put this
on the market, this is this is what i'd charge.
Can you meet me halfway? And she said, if you
if you fix the heating. Absolutely, So we already had
(16:06):
the least renegotiated going into this offer. The agent actually
reached back out and said, hey, does your offer stand.
We said yeah, certainly. So we were able to pick
up that property with the tenant for really a steal
and I went in on day one, put a heat
(16:28):
pump in for you know, she was there several years.
I would say. All told, we probably put maybe ten
thousand into it. We bought it for one twenty five,
put about ten into it, ended up selling for two
thirty seven.
Speaker 2 (16:43):
Nice.
Speaker 1 (16:44):
It turned out to beat a great opportunity for us.
Speaker 2 (16:47):
In addition to his rental properties, William is also an agent.
He works in two different markets. He's in Lynchburg, Virginia
and Kingsport, Tennessee. And if you're interested in investing in
either of those markets and you want to reach out
to William, I've got his contact information on the website.
You can find it at Rental incomepodcast dot com slash
(17:11):
episode five forty five. I'd like to thank jay Ley
Ridge from Ridge Lending Group for sponsoring today's episode. If
you're looking to buy a rental property, whether you're just
getting started or you want to add to your portfolio,
reach out to Chailey and right now she's offering a
free thirty minute strategy session to help you get a
(17:32):
plan together to build your rental portfolio. If you want
to take advantage of that, just go to Ridgelendinggroup dot
com NMLS four two zero five six. Thank you so
much for checking out the podcast today. Make sure you
hit the follow button. I put out a new interview
every single Tuesday, and if you're following the show, you'll
(17:54):
get notified when the next episode comes out. My name
is Dan Lane and this has been the Rental Income
podcast
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