November 25, 2025 • 23 mins
Adam Negri believes real estate is the easiest business in the world. In his view, anyone can do it. There is no get-rich-quick angle, just a simple formula: buy a few solid properties each year, stay patient, and before long you’ll own a few million dollars’ worth of real estate.
On this episode, Adam walks through exactly how he built his portfolio following that approach. He explains why he focuses on straightforward residential rentals in working-class neighborhoods, why he avoids office and retail, and why he only invests within a short drive of home.
Adam also shares why patience is one of the most important skills for investors, why buying too many properties at once can backfire, and why he is very cautious with leverage.
https://rentalincomepodcast.com/episode549
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.
On this episode, Adam walks through exactly how he built his portfolio following that approach. He explains why he focuses on straightforward residential rentals in working-class neighborhoods, why he avoids office and retail, and why he only invests within a short drive of home.
Adam also shares why patience is one of the most important skills for investors, why buying too many properties at once can backfire, and why he is very cautious with leverage.
https://rentalincomepodcast.com/episode549
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 (00:01):
Inspiring interviews with Today is Top Landlords, this is the
Rental Income Podcast, and now.
Speaker 2 (00:08):
Damnly, Adam, you think that owning rental properties is the
easiest business in the world. Can you tell me what
you mean by that?
Speaker 1 (00:17):
Sure?
Speaker 3 (00:19):
What I mean by that is that anyone can do it.
You can have a job and get involved in the business.
Speaker 1 (00:25):
And it's an accumulation over time.
Speaker 3 (00:28):
It's not a let's get rich quick scheme where you
become a millionaire overnight. You accumulate a few properties on
an annualized basis, and over ten years, next thing you know,
you've got a couple million dollars worth of real estate.
You got great cash flow, you didn't really kill yourself,
and you're able to continue to build this way and
(00:51):
not get caught up in the rat race and Instagram
garbage of three to five deals a month and running
around crazy trying to accumulate. You can do it slowly,
continue to have a relationship with your wife and your
kids and your family, and grow and prosper and feel
like you're actually doing something without you know, being on
(01:14):
a treadmill.
Speaker 2 (01:15):
This isn't just a theory that Adam has. This is
the exact blueprint that he followed that has over time
made him millions of dollars in equity in his rental properties.
And on the show today, we're going to walk through
his story and figure out how he did it. Joining
us on the show today from Reading Connecticut is Adam Negri.
(01:35):
We'll take a quick break to bank our sponsors. We'll
come right back and we'll talk to Adam. Are you
thinking about investing in rental properties? But maybe you don't
know where to start. My friends at mid South home
Buyers make it simple. For over twenty three years, they've
been selling fully renovated, turnkey rental properties in Memphis and
(01:55):
Little Rock. We're talking new roofs, plumbing, electric, kitchen, 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
(02:16):
the property 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
(02:37):
happy to 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 Ley Ridge from Ridge
(02:59):
Lending Group. She's 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.
(03:21):
N MLS four two zero five six. Adam, let's start
things off talking about your portfolio. Can you tell us
what your portfolio looks like.
Speaker 1 (03:31):
I think we own about twenty properties.
Speaker 3 (03:33):
We've got single family houses, multifamilyhouses, condominiums, apartment buildings, or
just finishing up after five years a high end rental
which is on the ocean in Milford, Connecticut. So we've
got a diversified portfolio. It's not all the same and
(03:55):
it works well for us. It's been an accumulation over
the last ten years twelve years that has just come
along and we went yet, we'll keep this one, or
nut we'll sell this one. And we also have a
few properties that we have for the next two years.
We have enough inventory to keep us busy to build
(04:17):
another two family house out a six family and then
I have a twenty five acre parcel that we're going
to make like an airbnb with an organic garden in store.
Speaker 4 (04:28):
And how long have you been investing for?
Speaker 1 (04:31):
Thirty three years? Sixty five years old?
Speaker 2 (04:34):
So when you look at the different properties, you have
different types of properties. Is there one type of property
that you think does best in terms of I guess
say in terms of cash flow and also appreciation.
Speaker 3 (04:50):
Apartments and rentals. I consider it to be the best
avenue to go down. It's everybody needs a place to live.
No one needs to have an office to live and
they can work out of their basement and retail unless
it's on a commercialized basis, meaning that you know, you're
a big triple net lease, you know, conglomerate. The smaller
(05:13):
mom and pops are really making a living. They're not
making any great you know, returns. So I always said,
I'd rather rent something and have a product that someone needs,
then someone wants and everybody needs a home. I don't
care who you are. And the other thing that we
(05:35):
thought about and work through is that we could go
for a B or C or D type of rentals.
We stayed away from A and teeter on B t
C because I'd rather work with working class people who
need to have a home. And it's worked out tremendously
well for us. Everyone appreciates what we do for them
(05:58):
and even help our tenants, which we call our clients,
you know. So it's for me, it's a better way
of doing it.
Speaker 4 (06:07):
Yeah.
Speaker 2 (06:08):
Now, with you having been an investor for as long
as you have, I'm sure you've seen that it really
takes time for things to play out. Like you were
talking in the beginning that if you wait ten years,
you're going to be really happy with how much money
you made. But how important do you think it is
(06:29):
for investors just to be patient? And buy a property
and let the rents go up and let the property
appreciate over time.
Speaker 3 (06:39):
Well, I think that in the words of patience and
real estate are two words that really don't go together
because everyone anticipates that they're going to make a gajillion
dollars and that you know, life's going to be fantastic,
and there's so many shiny objects out there, meaning that
(07:01):
you get someone who buys a condo and makes thirty
thousand dollars, but yet he's got a buddy that just
bought a two family and made one hundred thousand, and
then you get another guy that bought a hundred thousand
square foot shopping center and made a million. So and
no one really has the attention span to really pay
attention and stick to what they do because there's so
(07:22):
many different ways of doing it. But when you get
involved in this business, in my opinion, the best way
to do it is you get a property, you buy it,
you fix it up. You know all that there is
wrong with it, fix everything that there is, get it
tenanted up, and is why when you're getting to the
last eighty percent of that transaction, you can do what
(07:45):
they call the Burm method. And get that refinanced if
you want, or keep your money in and go buy
and get start looking for another one. But finish what
you start and don't get three at a time, because
if you get three at a time, and what really
ends up happening is most people end up losing a
lot of money because two of them can't be worked on.
(08:07):
One is getting worked on half assed.
Speaker 1 (08:09):
You know what I mean.
Speaker 3 (08:10):
And you're you're spread out too thin. Do one, get
it done, move on. Then people who are starting out,
do to a year, one every six months. Next year,
do one every quarter, so that you just increased it
by one hundred percent. And your second year, now you've
got six properties. If you can now that you've got
(08:33):
have created this wheel er, you've got this rock rolling.
You know, at first moving a rock is really difficult,
but once you get it rolling, it's not hard to
keep it rolling. So first year, two deals, second year,
four deals, third year you turn it into to a quarter.
Now you're up to eight plus, you're you're the two
(08:55):
years previous. You've got a lot of property, you know
what I mean. You've built You've builtuilt up a lot
of equity, you've built up a lot of business, and
probably by your fourth or fifth year, if you keep
going at this pace, you can decide if you really
want to leave your job or you want to maintain this.
(09:15):
It depends upon the level that you want to go to.
For my wife and I, we decided we really didn't
like mortgages, so we worked really hard to not have them.
Mind you, we have three mortgages out of all of
our properties. The rest we've paid for, so we don't
have that constraint. So the next thing is that once
(09:38):
you start to accumulate properties and you start to figure
out what you want to do, you might want to
sell off ten properties so that you can have eight
properties with no mortgage and start over again. Now the
eight really and cash flow represent with the eighteen what
of because now you're not paying a.
Speaker 2 (09:55):
Bank, right, so you've got you've got more, you're keeping
more cash.
Speaker 4 (10:00):
So is that what you did?
Speaker 2 (10:02):
Is that how you got so much of your portfolio
paid off that you would sell off properties and then
pay off mortgages.
Speaker 1 (10:13):
Yes and no.
Speaker 3 (10:14):
Well, it's originally started off because in two thousand and
seven and eight, I lost everything, went bankrupt, gave everything back,
actually set it in auction and watched my house get
auctioned off, which is terrible.
Speaker 1 (10:26):
And what happened was is there was.
Speaker 3 (10:28):
A lot of I used a lot of leverage, and
I decided that if I'm going to continue to down
this path, I'm not going to do well, which I
obviously didn't. So when I got together with my wife,
now we decided that we were just going to work
ourselves to death. So we just kept working. So I
have a brokerage, I have consistent business with, or I
(10:53):
have a lot of investors that I work with. My
wife has a design build company and a construction company,
and we self manage our own properties. So we consider
our properties to be our second job. And we go
to work during the day. And I was we were
doing fixes and flips. I was doing wholesale deals. She
(11:14):
was putting together. She was working for one percenters, so
she was doing these crazy big projects. We just kept
making money and we kept going. And then like I
had a house that we bought for one hundred and
fifteen grand. I did the numbers on it, which I
always keep checking out, and I bought it for one
(11:34):
fifteen put a tenant in pay twenty six thousand dollars annually,
and I kept it for five years. We came out
basically even after five years, we got all of our
money back. I turned around and I sold that for
three hundred and forty five thousand dollars.
Speaker 4 (11:52):
Wow. Wow. And then what what did you do then
with that? With that capital?
Speaker 3 (11:57):
I put it into this high end rental that we're
doing the Milford.
Speaker 4 (12:01):
Okay, okay, so you know what I mean, You're.
Speaker 1 (12:04):
You're readiversifying funds.
Speaker 3 (12:06):
Or I could have went in and bought two condominiums
or three condominiums, you know what I'm saying. I could
have done a multitude of things. So you the world's
really your oyster. You just got to decide which which
playground you want to really be in.
Speaker 2 (12:22):
So basically, you're you're taking the money that you earn
by doing work, by running your brokerage, selling houses, whatever,
and taking that money and using it to pay down
the mortgages.
Speaker 1 (12:37):
Yeah, or just buy properties outright. Yeah, look at there's
a simple thing.
Speaker 3 (12:43):
It really is simple. If you've got one hundred thousand
dollars to spend and that's all you have, that's what
your price is to offer people when you buy properties,
and you're going to run into a lot of people
who you're going to get a lot of no's, just
like dating, you know what I mean, You get a
lot of no's and you'll find only get somebody who
will entertain it. And you buy a house and you
(13:05):
get it for you know, a lot less than somebody
else will because you kept at it and you kept
talking to that person. You created a relationship and you
turned it around.
Speaker 1 (13:17):
You know.
Speaker 2 (13:18):
Now, leverage is interesting because I understand your perspective, you know,
after having gone through losing your properties in two thousand
and seven. But if someone is just getting started, do
you think like you really need the leverage because it's
(13:39):
trying to save money to buy a rental property with
cash is going to take forever. Where if you can
buy a property maybe that's a primary residence and house
hacket and only come up with three and a half percent,
it's going to help you build wealth a lot faster.
So do you think leverage is like imperative when you're
(14:01):
getting started?
Speaker 1 (14:03):
Yeah, because you don't have any money. Think about something.
Speaker 3 (14:06):
If anybody that has a job right now, and I
have a lot of investors that come to me and
say I want to be in a position that you're in.
How do I get there? I say, Okay, first thing,
I'm going to tell you, you've got a job and
it makes your money. Yeah, okay, you need to keep
that job in order to work with me, and for
me to work with you. You got to keep that
(14:26):
job for five years. Well why five years? Well, if
you keep it for five years, like I said before,
you'll be able to accumulate enough properties that you'll be
able to replace your income.
Speaker 1 (14:38):
Okay.
Speaker 3 (14:38):
But the second thing that that does is that by
having a W two you're a W two earner, you're
able to go get an faha mortgage and I think
you can qualify for up to five before they shut
you off as being an investor.
Speaker 4 (14:51):
Yeah, it's actually ten?
Speaker 1 (14:52):
Is it techy?
Speaker 3 (14:53):
Ten?
Speaker 1 (14:53):
Okay?
Speaker 3 (14:54):
So if if you could buy ten houses and put
three and a half percent down and get a twenty
to thirty percent return on your money, I strongly recommend that. Plus, yeah,
property is going to appreciate. Plus you're going to do
work to it.
Speaker 1 (15:09):
Yeah yeah, I would do that all day long.
Speaker 3 (15:11):
And then as time goes on and you've got an accumulation,
you look at the ones that are underperforming and you
sell them off and you take that money and you
can pay down the other mortgages, or you can go
buy more property.
Speaker 2 (15:24):
Right right, So you've almost I think got to look
at it as two different phases. That like, when you're
starting out, you've got to use leverage to build wealth.
But then as you start to gain some of you
can I guess I'll almost have more protection by paying
down those properties. But if you get that wrong, I
(15:48):
think it's really hard to build wealth if you do
it backwards.
Speaker 1 (15:52):
Yeah, well, it's like anything.
Speaker 3 (15:54):
If you go and you force feed yourself and you've
got too much, you're never going to achieve you're looking for.
But if you can stage these things and do them
so that they are beneficial to you and don't hurt you, yeah,
you're you're absolutely right, you can get financing you because
look at most people are starting out in real estate
(16:16):
who don't have anything are the best people, and they
have the door is open for them. It really is,
because if you can qualify and get a mortgage. Let
me tell you, when I made my first million dollars,
was doing exactly that. I buy a single two family house,
I moved into one of the units, I fixed it up,
I rented it out, I moved down into the other unit.
(16:38):
I fixed that one up, and then as I was
fixing that that last one up, I went out and
I started looking for another property. And I did that for, like,
I don't know, eight years. I lived out of a
suitcase for eight years. I did the Burm method, and
I lived in each and every one of them. I
fixed each and every one of them up. I knew
(16:58):
exactly what everything was in property, and I had a
great portfolio. I just got, you know, I got sidetracked
and I went into another business that wasn't business, it
wasn't real estate related, and it was.
Speaker 1 (17:10):
A death blow. So now it's a great business.
Speaker 3 (17:16):
Really, it's really easy, it really is, and you stick
to your guns about what you want to buy, how
you want to buy it. I had a guy in Tennessee.
I was selling a property in twenty three for three
hundred grand, and he came up and he goes, hey,
look at I got one hundred grand. And I said, hey,
I appreciate you giving me your offer, but I can't
accept it. And he goes, why aren't you mad at me?
(17:37):
I said, because I respect the fact that you had
one hundred grand. And that's all you could afford to spend,
and you stick into your guns and you don't over
leverage yourself and you don't put yourself in a bad place.
I think that's a great way to go.
Speaker 2 (17:47):
Yeah, So today when you're buying properties, are you still
rehabbing it or do you ever buy properties that maybe
don't need much work.
Speaker 4 (17:58):
We do both.
Speaker 3 (18:00):
We do the hotel thing, you know, where you buy
them and then just put them back out to market,
and then we have other properties where we do I
just I took over I did a sub tube deal
in New Haven and I took over a two family
house and we're just finishing up the second unit. That
(18:21):
it took us some time to do it because we're
spread out all over the place and it's completely done now.
So I mean we do a little bit of everything.
I shied away from doing more fix and flips because
the margins on the properties are a lot slimmer now
because of where the market conditions are right now, where
(18:41):
there's not a big supply and people are thinking they're
going to get top dollar for everything.
Speaker 2 (18:47):
With going through two thousand and seven, two thousand and eight,
do you think that that has made you a better
investor like that. You see the risks, you see how
things can go back.
Speaker 3 (19:02):
Yeah, you know what my motto is. Here's my motto.
Every day I wake up broke. The reason why I
say that is because when you wake up and you
go I'm worth millions, and you blow up that ego
and I've got three hundred thousand dollars in my account
or whatever that number is, and you walk out there
and you start wheelding that sword, I don't find anything
(19:23):
good comes of it, you know what I mean. It's
more ego play. And I wake up broke every day
and I get deals. I bought a two family house
that was gutted. I paid twelve thousand dollars for it.
It's now where it's six hundred and fifty. Mind you,
when I say gutted, there wasn't even a partition wall.
Every time a tenant moved out, this lady gutted the apartment. Wow,
(19:46):
so I got a shell. I mean, the property was
worth five times more than what I paid for the
just for the whole thing. So it changes your perspective
and you start to go at things differently, you know, So.
Speaker 4 (20:00):
I think, can you give us just a quick roadmap.
Speaker 2 (20:03):
So if somebody is maybe getting started, they've got a
couple of properties and they want to get to where
you are today, Like what should they focus on to really,
I guess expand their portfolio to get to where you are.
Speaker 1 (20:23):
Here's what we do.
Speaker 3 (20:25):
We did a like a five mile or we'll call
it a ten mile ring and no more than like
thirty minutes away from where we live. Is the marketplace
that we wanted to concentrate in, and we concentrated on
single family houses, the multifamily houses, and condominiums.
Speaker 1 (20:50):
If there's an.
Speaker 3 (20:51):
Apartment building, it would we would entertain it and take
a look at it.
Speaker 1 (20:56):
And that was it. We had properties that.
Speaker 3 (21:00):
Were forty five minutes away and hard to get to
because we're in like the snow belt up here. We're
just outside of it in Connecticut. Down in Norwalk was
a forty five minute drive. So whenever we had to
do maintenance on the property or plow snow, it just
took us forever and we're like too far. Sold it
and rediversified the funds and put it into something else.
(21:22):
Actually had a partner. I bought a five unit for
two point fifty, put another two hundred into it. We
sold it for nine to fifty. They made a great return.
We made a great return, and we just moved on
and bought something else, and we stayed in this nucleus.
And there's a lot of property in it nucleus. And
(21:42):
you'll be surprised. Everybody thinks that, you know, oh, there's
a deal two hours away, and it's like, yeah, but
that's four hours because you not only got to go
out there, you got to come back. So single family,
multi family condos, apartment buildings, that's it. No shopping centers,
no office buildings. So if I look at an office building,
(22:05):
it's going to be for a conversion.
Speaker 1 (22:07):
That's it.
Speaker 2 (22:08):
Adam had a really basic approach, but it works. I mean,
he was buying properties close to where he lives, buying
good quality B and C class properties. He would sell
properties from time to time and use that equity to
pay down mortgages. And he really didn't like mortgages. He
wanted to get his mortgages paid off. And today he's
(22:29):
sitting on a really good portfolio that is mostly paid off.
And I think you also can underestimate the power of
time that you let ten to fifteen years go by,
let properties appreciate let those rents go up. I really
don't see how you can lose with Adam's approach. Well,
if anybody wants to reach out to Adam, I've got
(22:50):
his contact information on the website. You can find it
at Rental incomepodcast dot com slash episode five forty nine.
I'd like to thank Chaley 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 Chaley. She
(23:14):
has a ton of different loan programs and she can
find something that works for you. You can track her
down at Ridgelendinggroup dot com. NMLS four two zero five six.
Thank you so much for checking out the podcast today.
Make sure you hit that follow button. That way you'll
get notified when the next episode comes out. My name
(23:37):
is Dan Lane and this has been the Rental Income Podcast.
Inspiring interviews with Today is Top Landlords, this is the
Rental Income Podcast, and now.
Speaker 2 (00:08):
Damnly, Adam, you think that owning rental properties is the
easiest business in the world. Can you tell me what
you mean by that?
Speaker 1 (00:17):
Sure?
Speaker 3 (00:19):
What I mean by that is that anyone can do it.
You can have a job and get involved in the business.
Speaker 1 (00:25):
And it's an accumulation over time.
Speaker 3 (00:28):
It's not a let's get rich quick scheme where you
become a millionaire overnight. You accumulate a few properties on
an annualized basis, and over ten years, next thing you know,
you've got a couple million dollars worth of real estate.
You got great cash flow, you didn't really kill yourself,
and you're able to continue to build this way and
(00:51):
not get caught up in the rat race and Instagram
garbage of three to five deals a month and running
around crazy trying to accumulate. You can do it slowly,
continue to have a relationship with your wife and your
kids and your family, and grow and prosper and feel
like you're actually doing something without you know, being on
(01:14):
a treadmill.
Speaker 2 (01:15):
This isn't just a theory that Adam has. This is
the exact blueprint that he followed that has over time
made him millions of dollars in equity in his rental properties.
And on the show today, we're going to walk through
his story and figure out how he did it. Joining
us on the show today from Reading Connecticut is Adam Negri.
(01:35):
We'll take a quick break to bank our sponsors. We'll
come right back and we'll talk to Adam. Are you
thinking about investing in rental properties? But maybe you don't
know where to start. My friends at mid South home
Buyers make it simple. For over twenty three years, they've
been selling fully renovated, turnkey rental properties in Memphis and
(01:55):
Little Rock. We're talking new roofs, plumbing, electric, kitchen, 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
(02:16):
the property 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
(02:37):
happy to 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 Ley Ridge from Ridge
(02:59):
Lending Group. She's 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.
(03:21):
N MLS four two zero five six. Adam, let's start
things off talking about your portfolio. Can you tell us
what your portfolio looks like.
Speaker 1 (03:31):
I think we own about twenty properties.
Speaker 3 (03:33):
We've got single family houses, multifamilyhouses, condominiums, apartment buildings, or
just finishing up after five years a high end rental
which is on the ocean in Milford, Connecticut. So we've
got a diversified portfolio. It's not all the same and
(03:55):
it works well for us. It's been an accumulation over
the last ten years twelve years that has just come
along and we went yet, we'll keep this one, or
nut we'll sell this one. And we also have a
few properties that we have for the next two years.
We have enough inventory to keep us busy to build
(04:17):
another two family house out a six family and then
I have a twenty five acre parcel that we're going
to make like an airbnb with an organic garden in store.
Speaker 4 (04:28):
And how long have you been investing for?
Speaker 1 (04:31):
Thirty three years? Sixty five years old?
Speaker 2 (04:34):
So when you look at the different properties, you have
different types of properties. Is there one type of property
that you think does best in terms of I guess
say in terms of cash flow and also appreciation.
Speaker 3 (04:50):
Apartments and rentals. I consider it to be the best
avenue to go down. It's everybody needs a place to live.
No one needs to have an office to live and
they can work out of their basement and retail unless
it's on a commercialized basis, meaning that you know, you're
a big triple net lease, you know, conglomerate. The smaller
(05:13):
mom and pops are really making a living. They're not
making any great you know, returns. So I always said,
I'd rather rent something and have a product that someone needs,
then someone wants and everybody needs a home. I don't
care who you are. And the other thing that we
(05:35):
thought about and work through is that we could go
for a B or C or D type of rentals.
We stayed away from A and teeter on B t
C because I'd rather work with working class people who
need to have a home. And it's worked out tremendously
well for us. Everyone appreciates what we do for them
(05:58):
and even help our tenants, which we call our clients,
you know. So it's for me, it's a better way
of doing it.
Speaker 4 (06:07):
Yeah.
Speaker 2 (06:08):
Now, with you having been an investor for as long
as you have, I'm sure you've seen that it really
takes time for things to play out. Like you were
talking in the beginning that if you wait ten years,
you're going to be really happy with how much money
you made. But how important do you think it is
(06:29):
for investors just to be patient? And buy a property
and let the rents go up and let the property
appreciate over time.
Speaker 3 (06:39):
Well, I think that in the words of patience and
real estate are two words that really don't go together
because everyone anticipates that they're going to make a gajillion
dollars and that you know, life's going to be fantastic,
and there's so many shiny objects out there, meaning that
(07:01):
you get someone who buys a condo and makes thirty
thousand dollars, but yet he's got a buddy that just
bought a two family and made one hundred thousand, and
then you get another guy that bought a hundred thousand
square foot shopping center and made a million. So and
no one really has the attention span to really pay
attention and stick to what they do because there's so
(07:22):
many different ways of doing it. But when you get
involved in this business, in my opinion, the best way
to do it is you get a property, you buy it,
you fix it up. You know all that there is
wrong with it, fix everything that there is, get it
tenanted up, and is why when you're getting to the
last eighty percent of that transaction, you can do what
(07:45):
they call the Burm method. And get that refinanced if
you want, or keep your money in and go buy
and get start looking for another one. But finish what
you start and don't get three at a time, because
if you get three at a time, and what really
ends up happening is most people end up losing a
lot of money because two of them can't be worked on.
(08:07):
One is getting worked on half assed.
Speaker 1 (08:09):
You know what I mean.
Speaker 3 (08:10):
And you're you're spread out too thin. Do one, get
it done, move on. Then people who are starting out,
do to a year, one every six months. Next year,
do one every quarter, so that you just increased it
by one hundred percent. And your second year, now you've
got six properties. If you can now that you've got
(08:33):
have created this wheel er, you've got this rock rolling.
You know, at first moving a rock is really difficult,
but once you get it rolling, it's not hard to
keep it rolling. So first year, two deals, second year,
four deals, third year you turn it into to a quarter.
Now you're up to eight plus, you're you're the two
(08:55):
years previous. You've got a lot of property, you know
what I mean. You've built You've builtuilt up a lot
of equity, you've built up a lot of business, and
probably by your fourth or fifth year, if you keep
going at this pace, you can decide if you really
want to leave your job or you want to maintain this.
(09:15):
It depends upon the level that you want to go to.
For my wife and I, we decided we really didn't
like mortgages, so we worked really hard to not have them.
Mind you, we have three mortgages out of all of
our properties. The rest we've paid for, so we don't
have that constraint. So the next thing is that once
(09:38):
you start to accumulate properties and you start to figure
out what you want to do, you might want to
sell off ten properties so that you can have eight
properties with no mortgage and start over again. Now the
eight really and cash flow represent with the eighteen what
of because now you're not paying a.
Speaker 2 (09:55):
Bank, right, so you've got you've got more, you're keeping
more cash.
Speaker 4 (10:00):
So is that what you did?
Speaker 2 (10:02):
Is that how you got so much of your portfolio
paid off that you would sell off properties and then
pay off mortgages.
Speaker 1 (10:13):
Yes and no.
Speaker 3 (10:14):
Well, it's originally started off because in two thousand and
seven and eight, I lost everything, went bankrupt, gave everything back,
actually set it in auction and watched my house get
auctioned off, which is terrible.
Speaker 1 (10:26):
And what happened was is there was.
Speaker 3 (10:28):
A lot of I used a lot of leverage, and
I decided that if I'm going to continue to down
this path, I'm not going to do well, which I
obviously didn't. So when I got together with my wife,
now we decided that we were just going to work
ourselves to death. So we just kept working. So I
have a brokerage, I have consistent business with, or I
(10:53):
have a lot of investors that I work with. My
wife has a design build company and a construction company,
and we self manage our own properties. So we consider
our properties to be our second job. And we go
to work during the day. And I was we were
doing fixes and flips. I was doing wholesale deals. She
(11:14):
was putting together. She was working for one percenters, so
she was doing these crazy big projects. We just kept
making money and we kept going. And then like I
had a house that we bought for one hundred and
fifteen grand. I did the numbers on it, which I
always keep checking out, and I bought it for one
(11:34):
fifteen put a tenant in pay twenty six thousand dollars annually,
and I kept it for five years. We came out
basically even after five years, we got all of our
money back. I turned around and I sold that for
three hundred and forty five thousand dollars.
Speaker 4 (11:52):
Wow. Wow. And then what what did you do then
with that? With that capital?
Speaker 3 (11:57):
I put it into this high end rental that we're
doing the Milford.
Speaker 4 (12:01):
Okay, okay, so you know what I mean, You're.
Speaker 1 (12:04):
You're readiversifying funds.
Speaker 3 (12:06):
Or I could have went in and bought two condominiums
or three condominiums, you know what I'm saying. I could
have done a multitude of things. So you the world's
really your oyster. You just got to decide which which
playground you want to really be in.
Speaker 2 (12:22):
So basically, you're you're taking the money that you earn
by doing work, by running your brokerage, selling houses, whatever,
and taking that money and using it to pay down
the mortgages.
Speaker 1 (12:37):
Yeah, or just buy properties outright. Yeah, look at there's
a simple thing.
Speaker 3 (12:43):
It really is simple. If you've got one hundred thousand
dollars to spend and that's all you have, that's what
your price is to offer people when you buy properties,
and you're going to run into a lot of people
who you're going to get a lot of no's, just
like dating, you know what I mean, You get a
lot of no's and you'll find only get somebody who
will entertain it. And you buy a house and you
(13:05):
get it for you know, a lot less than somebody
else will because you kept at it and you kept
talking to that person. You created a relationship and you
turned it around.
Speaker 1 (13:17):
You know.
Speaker 2 (13:18):
Now, leverage is interesting because I understand your perspective, you know,
after having gone through losing your properties in two thousand
and seven. But if someone is just getting started, do
you think like you really need the leverage because it's
(13:39):
trying to save money to buy a rental property with
cash is going to take forever. Where if you can
buy a property maybe that's a primary residence and house
hacket and only come up with three and a half percent,
it's going to help you build wealth a lot faster.
So do you think leverage is like imperative when you're
(14:01):
getting started?
Speaker 1 (14:03):
Yeah, because you don't have any money. Think about something.
Speaker 3 (14:06):
If anybody that has a job right now, and I
have a lot of investors that come to me and
say I want to be in a position that you're in.
How do I get there? I say, Okay, first thing,
I'm going to tell you, you've got a job and
it makes your money. Yeah, okay, you need to keep
that job in order to work with me, and for
me to work with you. You got to keep that
(14:26):
job for five years. Well why five years? Well, if
you keep it for five years, like I said before,
you'll be able to accumulate enough properties that you'll be
able to replace your income.
Speaker 1 (14:38):
Okay.
Speaker 3 (14:38):
But the second thing that that does is that by
having a W two you're a W two earner, you're
able to go get an faha mortgage and I think
you can qualify for up to five before they shut
you off as being an investor.
Speaker 4 (14:51):
Yeah, it's actually ten?
Speaker 1 (14:52):
Is it techy?
Speaker 3 (14:53):
Ten?
Speaker 1 (14:53):
Okay?
Speaker 3 (14:54):
So if if you could buy ten houses and put
three and a half percent down and get a twenty
to thirty percent return on your money, I strongly recommend that. Plus, yeah,
property is going to appreciate. Plus you're going to do
work to it.
Speaker 1 (15:09):
Yeah yeah, I would do that all day long.
Speaker 3 (15:11):
And then as time goes on and you've got an accumulation,
you look at the ones that are underperforming and you
sell them off and you take that money and you
can pay down the other mortgages, or you can go
buy more property.
Speaker 2 (15:24):
Right right, So you've almost I think got to look
at it as two different phases. That like, when you're
starting out, you've got to use leverage to build wealth.
But then as you start to gain some of you
can I guess I'll almost have more protection by paying
down those properties. But if you get that wrong, I
(15:48):
think it's really hard to build wealth if you do
it backwards.
Speaker 1 (15:52):
Yeah, well, it's like anything.
Speaker 3 (15:54):
If you go and you force feed yourself and you've
got too much, you're never going to achieve you're looking for.
But if you can stage these things and do them
so that they are beneficial to you and don't hurt you, yeah,
you're you're absolutely right, you can get financing you because
look at most people are starting out in real estate
(16:16):
who don't have anything are the best people, and they
have the door is open for them. It really is,
because if you can qualify and get a mortgage. Let
me tell you, when I made my first million dollars,
was doing exactly that. I buy a single two family house,
I moved into one of the units, I fixed it up,
I rented it out, I moved down into the other unit.
(16:38):
I fixed that one up, and then as I was
fixing that that last one up, I went out and
I started looking for another property. And I did that for, like,
I don't know, eight years. I lived out of a
suitcase for eight years. I did the Burm method, and
I lived in each and every one of them. I
fixed each and every one of them up. I knew
(16:58):
exactly what everything was in property, and I had a
great portfolio. I just got, you know, I got sidetracked
and I went into another business that wasn't business, it
wasn't real estate related, and it was.
Speaker 1 (17:10):
A death blow. So now it's a great business.
Speaker 3 (17:16):
Really, it's really easy, it really is, and you stick
to your guns about what you want to buy, how
you want to buy it. I had a guy in Tennessee.
I was selling a property in twenty three for three
hundred grand, and he came up and he goes, hey,
look at I got one hundred grand. And I said, hey,
I appreciate you giving me your offer, but I can't
accept it. And he goes, why aren't you mad at me?
(17:37):
I said, because I respect the fact that you had
one hundred grand. And that's all you could afford to spend,
and you stick into your guns and you don't over
leverage yourself and you don't put yourself in a bad place.
I think that's a great way to go.
Speaker 2 (17:47):
Yeah, So today when you're buying properties, are you still
rehabbing it or do you ever buy properties that maybe
don't need much work.
Speaker 4 (17:58):
We do both.
Speaker 3 (18:00):
We do the hotel thing, you know, where you buy
them and then just put them back out to market,
and then we have other properties where we do I
just I took over I did a sub tube deal
in New Haven and I took over a two family
house and we're just finishing up the second unit. That
(18:21):
it took us some time to do it because we're
spread out all over the place and it's completely done now.
So I mean we do a little bit of everything.
I shied away from doing more fix and flips because
the margins on the properties are a lot slimmer now
because of where the market conditions are right now, where
(18:41):
there's not a big supply and people are thinking they're
going to get top dollar for everything.
Speaker 2 (18:47):
With going through two thousand and seven, two thousand and eight,
do you think that that has made you a better
investor like that. You see the risks, you see how
things can go back.
Speaker 3 (19:02):
Yeah, you know what my motto is. Here's my motto.
Every day I wake up broke. The reason why I
say that is because when you wake up and you
go I'm worth millions, and you blow up that ego
and I've got three hundred thousand dollars in my account
or whatever that number is, and you walk out there
and you start wheelding that sword, I don't find anything
(19:23):
good comes of it, you know what I mean. It's
more ego play. And I wake up broke every day
and I get deals. I bought a two family house
that was gutted. I paid twelve thousand dollars for it.
It's now where it's six hundred and fifty. Mind you,
when I say gutted, there wasn't even a partition wall.
Every time a tenant moved out, this lady gutted the apartment. Wow,
(19:46):
so I got a shell. I mean, the property was
worth five times more than what I paid for the
just for the whole thing. So it changes your perspective
and you start to go at things differently, you know, So.
Speaker 4 (20:00):
I think, can you give us just a quick roadmap.
Speaker 2 (20:03):
So if somebody is maybe getting started, they've got a
couple of properties and they want to get to where
you are today, Like what should they focus on to really,
I guess expand their portfolio to get to where you are.
Speaker 1 (20:23):
Here's what we do.
Speaker 3 (20:25):
We did a like a five mile or we'll call
it a ten mile ring and no more than like
thirty minutes away from where we live. Is the marketplace
that we wanted to concentrate in, and we concentrated on
single family houses, the multifamily houses, and condominiums.
Speaker 1 (20:50):
If there's an.
Speaker 3 (20:51):
Apartment building, it would we would entertain it and take
a look at it.
Speaker 1 (20:56):
And that was it. We had properties that.
Speaker 3 (21:00):
Were forty five minutes away and hard to get to
because we're in like the snow belt up here. We're
just outside of it in Connecticut. Down in Norwalk was
a forty five minute drive. So whenever we had to
do maintenance on the property or plow snow, it just
took us forever and we're like too far. Sold it
and rediversified the funds and put it into something else.
(21:22):
Actually had a partner. I bought a five unit for
two point fifty, put another two hundred into it. We
sold it for nine to fifty. They made a great return.
We made a great return, and we just moved on
and bought something else, and we stayed in this nucleus.
And there's a lot of property in it nucleus. And
(21:42):
you'll be surprised. Everybody thinks that, you know, oh, there's
a deal two hours away, and it's like, yeah, but
that's four hours because you not only got to go
out there, you got to come back. So single family,
multi family condos, apartment buildings, that's it. No shopping centers,
no office buildings. So if I look at an office building,
(22:05):
it's going to be for a conversion.
Speaker 1 (22:07):
That's it.
Speaker 2 (22:08):
Adam had a really basic approach, but it works. I mean,
he was buying properties close to where he lives, buying
good quality B and C class properties. He would sell
properties from time to time and use that equity to
pay down mortgages. And he really didn't like mortgages. He
wanted to get his mortgages paid off. And today he's
(22:29):
sitting on a really good portfolio that is mostly paid off.
And I think you also can underestimate the power of
time that you let ten to fifteen years go by,
let properties appreciate let those rents go up. I really
don't see how you can lose with Adam's approach. Well,
if anybody wants to reach out to Adam, I've got
(22:50):
his contact information on the website. You can find it
at Rental incomepodcast dot com slash episode five forty nine.
I'd like to thank Chaley 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 Chaley. She
(23:14):
has a ton of different loan programs and she can
find something that works for you. You can track her
down at Ridgelendinggroup dot com. NMLS four two zero five six.
Thank you so much for checking out the podcast today.
Make sure you hit that follow button. That way you'll
get notified when the next episode comes out. My name
(23:37):
is Dan Lane and this has been the Rental Income Podcast.
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