January 8, 2025 • 40 mins
ABOUT ZACH LEMASTER
Zach Lemaster is the founder & CEO of Rent To Retirement, the nation's leading turnkey investment company. Zach is a seasoned real estate investor and licensed broker that has accumulated a large portfolio of rental properties across multiple markets including single-family, multifamily, commercial and new construction. Zach is a licensed Optometrist who practices on a volunteer basis.
Zach started investing in real estate while working as an Optometrist & Captain for the US Air Force. This eventually allowed him to retire early from his career in medicine to be a professional investor by strategically investing in markets that maximize cash flow, appreciation & equity. Zach went on to build a successful wholesaling, flipping & management business working across multiple markets which led to the foundation for Rent to Retirement.
THIS TOPIC IN A NUTSHELL:
Zach's Career Journey and Transitioning to Full-Time Real Estate
The concept of Rent to Retirement and how it came about
Understanding Cash Flow and Appreciation in Real Estate Investment
Leveraging tax deductions and benefits
What is 1031 exchange and the advantage of using it?
Navigating Out-of-State Investment Opportunities
Connecting people and investments that are not in their backyard
Turnkey Rentals and Misconception on Turnkey Investments
Creative deal structure and financing options
Market Selection Strategy
Significance of supply and demand dynamics
Property Management and Insurance Strategies
The most rewarding part of being an investor
Connect with Zach
KEY QUOTE:
“What we really enjoy about working in the industry is how impactful of a difference we can make in people's lives, teach them, and help them build a strategy. It's not all sunshine and rainbows. Real estate takes work and takes grit. It's a long-term game, but if you stay committed, I believe it's the most predictable path to wealth.”
SUMMARY OF BUSINESS:
Rent To Retirement - We specialize in providing turnkey rental properties in the best markets throughout the United States. At Rent to Retirement, we've done the legwork for you. We have thoroughly researched the best markets across the United States, carefully considering the combination of cash flow, equity, and appreciation potential. Our goal is to ensure that you benefit from all the advantages of real estate investing without the headache typically associated with property management and dealing with tenants. Live where you choose and invest in the markets that offer the best returns.
ABOUT THE WESTSIDE INVESTORS NETWORK
The Westside Investors Network is your community for investing knowledge for growth. For real estate professionals by real estate professionals. This show is focused on the next step in your career... investing, for those starting with nothing to multifamily syndication.
The Westside Investors Network strives to bring knowledge and education to real estate professionals that is seeking to gain more freedom in their life. The host AJ and Chris Shepard, are committed to sharing the wealth of knowledge that they have gained throughout the years to allow others the opportunity to learn and grow in their investing. They own Uptown Properties, a successful Property Management, and Brokerage Company. If you are interested in Property Management in the Portland Metro or Bend Metro Areas, please visit www.uptownpm.com. If you are interested in investing in multifamily syndication, please visi
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Episode Transcript
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Intro speaker (00:03):
Welcome to the Westside Investors Network. WIN,
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Trent Werner (00:40):
Welcome back to another episode of the Deal Deep
Dive segment on the Westside
Investors Network podcast. I'myour host, Trent Werner. In this
segment, our featured guestswill share their unique stories
on a specific deal they'veinvested in. We will dive deep
into finding the deal, financingthe deal, writing an offer, and
the due diligence.
Do us a solid and smash thatsubscribe button, leave us a
(01:02):
rating, and share this episode.And now, let's dive deep.
Welcome back to the WestsideInvestors Network podcast. I'm
your host, Trent Wharton. Ontoday's episode, we are joined
by Zach Lemest, CEO of Rent toRetirement.
Today, Zach's gonna share abouthow he turned his optometry
career into a full time realestate investment business,
(01:24):
where rent to retirement willhelp investors find out of state
a class turnkey deals and set itall up for you, guide you in the
right direction, connect youwith the right people. And we're
gonna hear about how some ofthose connections can create
pretty good deals on A Classproperties in today's current
market. Now let's welcome ZachLemaster. All right. Welcome to
(01:47):
the Westside Investors Network.
We got Zach Lemaster, the CEO ofRent 2 Retirement joining us
today. Zach, thanks so much fortaking the time to chat with us.
Zach Lemaster (01:55):
Yeah. True. I'm excited to be here. Thanks for
having me.
Trent Werner (01:57):
So Zach has, accomplished what I think a lot
of our listeners and a lot ofpeople want to accomplish, where
you're in a career and you wantto get to real estate full time.
You maybe start while you'restill working that career
instead of just going headfirst, and burning the ships and
going right for it. So I want totalk with Zac today about how
you accomplish that goal ofgetting full time in real estate
(02:21):
and being able to practiceoptometry when you want and for
the good of the people. So
Zach Lemaster (02:27):
Yeah. Go for it. Well, I mean, just to kinda,
yeah, fill you on my story. Thefirst thing I'll say, Trent, is
that I never had a goal toreplace my income. That was
actually not something that wasan ambition of mine.
I really enjoyed optometry, andI'm still passionate about that.
My wife is also an optometrist.And but now we have the ability
to practice really just, yeah,on a volunteer basis. We have a
(02:48):
lot of humanitarian efforts thatwe put our energy into. We set
up cataract clinicsinternationally in
underdeveloped areas that don'thave access to eye care.
But my point is is that, youknow, we're able to do that
really, like, on our schedule,and we're actually able to have
a bigger impact globally becauseof what real estate has allowed
(03:10):
us to accomplish. But yeah, Inever anticipated to like
replace my W2. I know that maybe an ambition for a lot of
people, and that, like, that'sgreat. But you can still, I
mean, regardless of really whatyou wanna do out of real estate,
real estate can fit multipledifferent aspects of your
lifestyle really, and it canstart as a side hustle. That's a
beautiful thing.
But yeah, so my wife and I wereoptometrists by education. We
met in school. I was on ascholarship with the Air Force,
(03:32):
HBSB scholarship, so I wascommissioned as a captain in the
Air Force right after I leftoptometry school. I practiced
optometry there for, I I don'tknow, 6 or 7 years, that's where
I started investing. I startedinvesting in real estate just
because, I mean, like manypeople I probably read a lot of
the books and the Rich Dad PoorDad stuff and just was like,
hey, this seems like aninteresting thing and I could
understand real estate, it'stangible.
(03:52):
First house I bought used a VAloan, no money down, bought a
duplex, lived in half, rentedout the other half. And this is
probably about 14 or 15 yearsago at this point when I bought
that first house. That was myfirst primary residence, and I
just got hooked. I liked theidea of buying an asset using
other people's money, I. E.
The bank that a tenant basicallypays off for you over time. And
then you get all the, you know,the appreciation, the tax
benefits, and benefit ofleverage, and things like that.
(04:13):
So the next year after that, webought a few more deals and just
consistently bought real estate.I didn't have, like, necessarily
a big plan, and we went slow inthe beginning. We invested
locally to start.
But there was a pivotal moment,Trent, where we started to look
out of state in differentmarkets that we found better
opportunity, areas that weremore conducive with our goals,
(04:33):
areas that have betterappreciation, and just better
opportunity to really, like,take advantage of real estate
and the path of progress. And sowe started to invest out of
state across multiple differentmarkets. And you know, there's
obviously some bumps in the roadwith that, but we kind of
figured it out, always improvedour systems. And that was the
birthplace of Rent toRetirement. We kind of built
this business by accident justout of necessity of building a
(04:54):
systematic way for our owninvesting to find the best
markets and build the teams andsystems in those areas so we can
strategically invest in areasthat offer the best returns, you
know.
And we had a lot of friends andfamily and colleagues that were
like, Hey, we see what you'redoing in real estate. Can can we
invest with you? Or can you helpus? We don't have the time or
experience or local market's tooexpensive, whatever the case is.
And we started to help them justfollow the same path that we
(05:17):
did.
And fast forward, you know,probably from that point about
10 years later where we're attoday, you know, we obviously
have a pretty robust companythat helps people buy deals
across the country where thereturns are attractive, and we
have all the teams set up sothey can be, you know, somewhat
passive. You don't have to selfmanage or do everything from
your own on the ground floor.And so, yeah, that's kind of the
(05:38):
story. I mean, we're across 18different markets and, you know,
we'll probably do about 800doors this year. But, I mean,
I've always just kept my nosedown and just kept investing in
real estate and doing more,right, even though I didn't
necessarily have the plan to bewhere at today.
Trent Werner (05:51):
I got a couple questions for you from the early
years when you and your wifewere first getting started. When
you were first starting out,were you focused on assets that
had better cashflow or betterappreciation when you were first
getting going to those firsthandful of deals?
Zach Lemaster (06:07):
Yeah. It's interesting because and that is
a spectrum. I think a lot ofpeople, like, think it's either
or. I've come to find out youcan you can actually have both
just in the right market. Andthat's really where we focus
today is like new construction.
But in the early years, I wouldsay and I think this is probably
true for a lot of people is Iwould really just focus on cash
flow because that's tangible. Iwasn't too forward thinking. I
(06:28):
was just like, Hey, if I have,you know, whatever, $400 a month
in net cash flow, if I can buy10 of those houses, that's
$4,000 a month, that'll be $48ks a year, pretty much tax free
because of how real estateworks, right? So that could be
the equivalent of 60 ks or 70 ksearned income. But I was like,
yeah.
So that makes sense and it'stangible. Those were the early
(06:48):
years. In future years, Ilearned that you actually truly
build wealth in real estatefocusing more on like, cash flow
is a byproduct where you focuson, you know, appreciation, the
tax benefits, and, like, how tostrategically scale and trade up
10.31 cost seg, those thosetypes of things. But early
years, yeah, cash flow.
Trent Werner (07:04):
And the reason I ask that because I think a lot
of people, like you said, arefocused on cash flow to start
because it is tangible. Onething that I've noticed from my
wife's perspective, she's anurse and I don't know if it's
just the industry or people thathave, you get paid every 2
weeks. A lot of people tend tothink on a monthly basis. And so
if they see the cashflow comingin every month, that just lines
(07:26):
up with their thought process onfinances in general. But to your
point, you know, being able toget both is great, but in the
early years, I've, I haveexperienced that the
appreciation side, while you'restill working and making money
from other avenues, typically ismore beneficial down the road.
Zach Lemaster (07:47):
Yeah. And I couldn't agree with you more.
And that's a good point. Mostpeople do think on a monthly or
biweekly basis because that'sthe income and expenses, right?
You're kinda, and there are alot of people that live paycheck
to paycheck, you know?
And if you can, you know, carveout some extra money to invest,
like that's kind of the firststep. But yeah, learning about
appreciation and likeunderstanding I don't think I
(08:08):
truly knew the math of realestate. I don't think I truly
understood in the early yearshow real estate worked long
term. We refer to real estate asthe ideal investment and that's
an acronym for all the ways youearn income. So I is cash flow,
right?
That's your income. D isdepreciation and tax benefits,
which now honestly, that's themost important thing we pay
attention to because we have asuccessful business and our goal
is to buy enough real estateevery single year to completely
(08:30):
wipe out our taxes, which can beaccomplished with real estate if
you do it strategically. E isequity as the tenant pays a loan
down. A is appreciation. As youmentioned, all homes go up in
value regardless of short termfluctuation.
And then L is leverage, beingable to leverage properties.
That's what really separatesreal estate out from other asset
classes. But yeah, I think mostpeople think about cash flow
because it's tangible, they cansee it, they can feel it, they
(08:51):
can calculate it. But if youlearn how to run the math and
understand before thinking like5 or 10 years what a property
could be, I think that willaffect a lot of the decisions
you make early on in investing.And most people are not trying
to retire tomorrow off of cashflow.
Right? So to your point, ifyou're having a W2 income and a
job, like, that's a really goodthing to be able to qualify for
(09:12):
good loans, to buy propertieswith with a 10 year plan or
whatever the case is.
Trent Werner (09:17):
And you've mentioned depreciation and the
tax benefits a couple of times.And in your example, you said,
if you can cash flow $400 amonth and get 10 of them, that's
48 ks a year. Obviously, neitherof us are tax professionals. So
there's my disclaimer. Can yougive a high level overview of
when you understood the taxbenefits and depreciation, and
like you said, buying enoughdeals to wipe out that income?
(09:39):
And what's your high leveloverview or your benefit to
investing in real estate on atax depreciation side?
Zach Lemaster (09:47):
Oh, man, Trey, you're gonna get me going here.
I could, you cut me off becauseI can talk all day about this.
And I do on our, you know,YouTube and podcast stuff,
because we bring in our taxprofessionals to actually, you
know, break this down forpeople. But I think in general,
if we're talking big picture,there's 3 main things that
really separate, 3 main taxbenefits. There's a lot of tax
benefits, and I won't even getinto like the estate planning
(10:09):
and the step up basis where youcan, you know, perpetually defer
depreciation and never pay taxeson real estate potentially, but
like just in the early stages.
So, one is cash flow where werefer to that as tax free
income. If you're leveragingproperty and you're accounting
for all your expensesappropriately tax, insurance,
your mortgage, your normaldepreciation, which everyone
takes, all the expenses, all thetaxes, all the stuff on the
(10:30):
property, those are all taxdeductions, right? Those are all
write offs. And so the realityis what I've found is that most
property that we buy, eventhough we have positive cash
flow, that cash flow is tax freebecause it's just the normal
write offs. And so that's reallypowerful if you think about it,
especially if you live in astate that has, you know,
taxable income, but even justfrom a federal standpoint, like,
taxes are the biggest expensewe're all gonna pay in our life,
(10:52):
and that's the easiest way togive yourself an immediate
raise.
That then you can have moretangible cash capital to go and
invest and invest in otherassets that have additional tax
benefits, and you get thesnowball. So that like, just
paying attention to the taxbenefits allowed us to really
scale our portfolio to the pointwhere we were able to replace
our active income. I would saythat's the one thing that
allowed us to truly replace ouractive income. And professional
(11:14):
income, right, doableprofessional income within 5 to
6 years is utilizing the taxbenefits. So if you have
$100,000 of income from yourrental portfolio, that's
probably the equivalent of$160,000, $170,000 of earned
income, possibly more dependingwhere you live, right?
That's extremely powerful. Sothat's the one thing, it's just
tax free cash flow. The The nextthing is 10 31 exchanges. This
(11:36):
is absolutely huge, right, andthis isn't going away. I know
there's a lot of 10 31exchanges, and the IRS, I'll say
this too, the IRS incentivizesus as real estate investors to
stimulate the economy, to createjobs, to create housing
solutions for people.
So the IRS will alwaysincentivize us as real estate
investors to go out and do thesethings that they are incapable
(11:57):
of doing themselves, that's thebenefit of being in the real
estate industry. 10/31 exchange,basically you buy a house for
$100,000 later it's worth$200,000 you sell it, and
normally you'd have capitalgains on that if you hold it for
longer than a year, which can bedramatic on your income on that
property. But you're allowed toroll it into more property, you
know, and defer those capitalgains, which you can do
(12:17):
perpetually forever if youstructure it appropriately.
That's really powerful becauseinstead of paying, you know,
whatever, 25% on your profit,that's an extra 25% that you
don't have to pay and you canreinvest in more real estate
that, again, has additional taxbenefits. So, we did a lot of
those.
You know, the first portfolio ofproperties that we created
within the 1st 2 to 3 years, youknow, we let those build equity
(12:38):
over time through appreciationand the tenant paying the loan
down. And then within 4 to 5years, we went through our first
2 1031 exchanges, and we wereable to double our portfolio
size, almost triple it, withoutputting any more capital in.
Right? We just used the equity,and then we reinvested the
equity and, like, double ourportfolio overnight and increase
our cash flow. And that's kindof the scalability way.
(12:59):
Now a little bit higher level,what we do because we're, you
know, actively involved in realestate, real estate
professionals is currently weuse accelerated depreciation as
the kind of 3rd big, bigimpactful thing. And again,
there's a lot of tax benefits,but those are the 3 most
impactful things that I thinkthat anyone can do. And that's
basically where you're taking aproperty and you're accelerating
(13:21):
because you take depreciationover on residential 27 and a
half years. Normally, that's ahuge tax benefit for the
property. But what you can do asa real estate professional or if
you're operating short termrentals is you can take a
portion of that in year 1against all income sources,
against active w two incomepotentially, and that can be
extremely powerful.
So if you buy a $1,000,000 worthof real estate, that's a handful
(13:43):
of single family or one multi,whatever the case is, our
studies usually come in about30% of accelerated depreciation.
So on a $1,000,000 of of realestate, you could have
potentially a $300,000 taxdeduction that offsets all of
your income sources. Right? Andthat's just accelerating that
depreciation because that'smoney you would otherwise give
to uncle Sam that can now youhave to reinvest in. There's a
(14:06):
lot more to that, like this yearwhere it's 60% bonus
depreciation, things like that.
But those are kind of highlevel, the big most impactful
things that has helped us.
Trent Werner (14:14):
So you obviously started investing in real
estate, got very familiar withthe tax benefits from real
estate, and that's when you wereable to scale, like you said.
When did this rent to retirementconcept start coming into play
in your career, in yourinvesting career?
Zach Lemaster (14:30):
I think this was probably about year 4 of our
investing, or 3 to 4. This isbasically I mean, that's when
the concept was born, notnecessarily when we started the
company, but we were investingout of state. So I was stationed
in North Dakota with the AirForce at the time. Excuse me. We
had bought a few rentalslocally, and as I mentioned.
But North Dakota is not like thehighly sought after market,
(14:53):
right? I mean, it's got okaycash flow, somewhat decent
appreciation, but we started tolearn about other markets where
there was just, like, betteropportunity, where rents were
increasing significantly more,where there was more
affordability, we had lowerprice points on better quality
assets that had betterappreciation year after year,
which we, you know, found out.Like, hey, because I think this
(15:13):
would be true for most people,and this is what our company
serves to try to help peoplewith today is that, like, it's
okay to start in your localbackyard. But, you know, as you
grow and diversify, you do wannabe diversified. Most successful
investors have a diversity ofportfolios and assets across the
country.
But, I mean, it's probablylikely that there's other
markets out there that are moreconducive to your goals or just
(15:34):
have better returns in your ownbackyard. Simple as that, right?
And the markets are alwayschanging. So once you kinda open
your mindset to looking acrossthe country at these different
opportunities, you can makesome, you know, bigger moves and
make your goals more efficient.So that's what we started doing.
And like I said, it wasn't easyat first, but we built a process
to first identify markets thatfit our fundamental goals, be in
(15:56):
the path of progress, landlordfunding legislation, low taxes,
all these things. We wanna be ingrowth markets. And once we
started to focus on those areas,we're like, wow, we're really
making bigger moves in a shorterperiod of time. And that's where
people are like, hey, like, canyou help us? You know, so a lot
of our colleagues, even ourfirst two investors were like
optometry colleagues of ours,that just we just talked about
what we were doing.
And then we figured out like,hey, we've already had the
(16:16):
framework for a way for us toinvest out of state, building
all the teams, the management,the lenders, finding the local
areas that fit our goals, andconsistently doing that over
time and opening up new markets.And so then we're like, hey,
there's a larger need for peoplethat wanna invest out of state
and access different markets.And then we put a team together,
started marketing publicly,opening up to other investors,
and that was kind of the thebirthplace.
Trent Werner (16:39):
Yeah. And I think, I mean, from my own experience,
I've always I'm located inOregon, Portland Metro, and so
I'm sure a lot of people thatare listening know that the, the
landlord tenant laws aredefinitely tenant favored here.
And so I've looked out of state,but it is daunting because I'm
not familiar with these othermarkets. I don't know how to
identify them very well, and itwould take me a lot of time to
(17:02):
get comfortable and and meet theright people in those markets.
And that's where rent toretirement has bridged that gap
for a lot of people that want toget out of their own backyard,
but maybe don't have the time orthe resources or the skills to
go find those markets.
How do you connect these peoplewith these these new markets
that maybe aren't theirbackyard?
Zach Lemaster (17:21):
And by the way, I went to, do you know where
Forest Grove is?
Trent Werner (17:24):
Of course. Yeah.
Zach Lemaster (17:25):
Yeah. Right right past Hillsboro. So that that's
where I went to optometryschool. I was in I was in,
Forest Grove. So I love Oregon.
We're in Denver. If we weren'tliving here, we'd probably be
there, you know. But like Isaid, same thing here. It's
difficult to invest locally forall the same reasons. But yeah,
so I guess for the investor,like, our motto is to make the
(17:46):
best deals across the countryaccessible to everyone where we
handle everything for them.
And I'm not saying real estate's100% passive because sometimes
people associate turnkey with,Oh, it's not 100% passive, but
it is on the passive end of thespectrum when you're talking
about like tangible physicalassets that you're owning. So
we, I mean, we first, you know,identified the markets that fit
our investment criteria.Geographically, we tend to be
(18:07):
focused in, you know, theMidwest, Ohio, Missouri,
Indiana, and then majority inthe Southeast. These are more
growth markets, and that's allnew construction. We mainly do
builds to rent single family andsmall multi.
And so we have fundamentalmarket criteria that we decide
on to build a team. Either wepartner with locally established
teams from builders andmanagers, or we'll build our own
team in that area once we'veidentified that that's a quality
(18:30):
market. And then we'll offerconsistent inventory, new
construction inventory, to ourinvestors that they have access.
These are off market deals,they're often steeply
discounted. We talked a littlebit about like, you know, buying
properties on the newconstruction below market value
with unique loan structures thatwe're able to accomplish.
So they're possibly 5% down intothe properties or less,
sometimes 0% down because we'repiecing all the things in place,
(18:53):
the lenders, the insuranceproviders, the inventory, the
property managers. And then ourteam is helping guide them
through the process of firstunderstanding investing out of
state and really what is thestrategy for them. Everyone has
individual goals, criteria,timelines, resources, so we want
to help them build an investmentstrategy. If you're a brand new
investor and this is your firstproperty, turnkey is a great
(19:14):
option because you're avoiding alot of those common pitfalls and
mistakes. Or if you're a firsttime investor out of state,
like, to your point, there's,you know, a lot of different
things to think about, localregulations and laws.
How do you even identify theright market? So our goal is to
already have done the researchand have the established teams
where we can match you with themarket that meets your goals and
kind of give you the help youwalk through that strategy to,
(19:36):
like, how are you gonna get to ato z? Let's get you into your
first couple properties. Let'smake sure that makes sense. How
do we maximize tax benefits?
What are the creative loanstructures? And how do we help
you scale over time? So it'sliterally just tapping into our
established networks and teamsthat are in the diversity of
areas we're we're operating in.
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Trent Werner (20:26):
Uptown syndication is now offering a syndication
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uptownsyndication.com today tolearn more. So, Zach, let me ask
you as someone that in my ownmarket, I have the the team in
place to buy a deal that needs aface lift and and able to force
that appreciation myself throughrenovations, and then obviously
renting it out and holding in myportfolio.
(21:07):
As an investor like that, ifsomeone says, you know, I'm used
to that, but all I have isturnkey properties, albeit
typically at a discount or belowmarket value. Where is the where
is the benefit in terms ofbuying a turnkey rental where I
know one of the benefits is youdon't have to deal with the
(21:27):
headache of renovating it. Butwhat would you tell someone
that's in a position like I amof turnkey versus something that
you can afford you can forceappreciation on?
Zach Lemaster (21:37):
Yeah. And and I would start by saying, Trent,
that it may not make sense.Right? This is a this is a
specific investment model thatserves a specific niche for the
right investor, but it can fitin multiple scenarios for the
investor depending on theirshort, long term goals. For
someone like yourself who's anactive investor, you're
actively, you know, rehabbingdeals and forcing appreciation
(21:59):
and then doing some creativethings with whatever it sounds
like cash out and then holdingthem as rentals and having a
great ROI, that's fantastic.
And that takes a lot of work,and it's a full time job. And
there's volatility with that,right? And for a newer investor,
potentially, that could be avery risky thing and challenging
thing to do. I think a lot ofpeople actually jump into
flipping too early and, like,get in over their head, or they
(22:20):
just don't have the time andexperience to deal with that.
Where it may make sense for you,though, is if you're looking to
diversify into other marketsover time.
You have your active real estatebusiness. We have a lot of
active professional real estateinvestors running, you know, 7,
8 figure businesses, but theystill buy with us because it
helps them to easily diversifyand scale their portfolio.
(22:41):
Because buy and hold realestate, I mean, buy and hold is
where you build wealth over timeand financial independence. So
regardless of what you're doingin an active career or active
real estate business, this stillprovides an opportunity for you
to easily and systematicallydiversify into other areas that
make sense for you and and toscale. We also have a lot of
investors on, like I mentioned,on the tax side that they're
(23:02):
making great income on theirtheir W2 job or their real
estate business, and they justneed an efficient way to, like,
buy more real estate, to nottake away time from their W2 or
their active business tomaximize their tax benefits.
Right? So that could serve thatpurpose. Turnkey really makes
sense for people that are newerinvestors. They wanna avoid the
pitfalls, newer investors out ofstate, people that are you know,
(23:22):
they have capital, they don'twanna be actively managing
properties, people that wannadiversify, business owners like
yourself that, you know, dowanna utilize that. And I will
say, you know, there's a commontheme that or misconception that
in turnkey, you're buying at orabove market value, and there's
no value add, there's no upside.
And that's really just not thecase with our at least with our
(23:43):
company because we operate 2ways. 1, we're builders, and we
build our own inventory, But wealso partner with national and
regional builders because as acommunity, we have 100 of
thousands of investors in ourcommunity that are buying, you
know, 100 and thousands ofproperties every single year. So
we have a lot of buying power asa community. So we can go to
these national builders, whichwe've already established, like
(24:04):
Doctor Horton, Toll Brothers,Lennar, whatever, and who build
all across the country and say,we actually work with their
wholesale division instead oftheir retail division and say,
you know, we commit to x x 100of houses that we're gonna buy
that year because we've cherrypicked the markets that we know
to be the best markets wherethey're already building, and we
can get steeply discountedprices because of that. We're
(24:25):
the 1st company to work withinstitutional builders and get
institutional type of discountsthat, like, a Blackstone would
get because they're buying 100of houses and pass those
discounts on to the individualinvestor.
So there are some creative waysthat you can buy below market
value and come into 30, 40,$50,000 of immediate equity
where maybe you can't cash outrefi day day 1, but you're, you
(24:47):
know, you're expediting thatprocess where you already have
that initial equity to be ableto do something with earlier on.
Trent Werner (24:53):
Yeah. And that's I think that's one thing that's
really cool about your model isto your point, you said
typically if you're buyingturnkey rentals, you're you're
kinda letting time do its thingin terms of appreciation.
Whereas if you are able to comein with some equity right off
the bat, yes, you're going tolet time do its thing, but you
have some equity in there asidefrom just the cash that you're
(25:14):
putting in upfront, which iswhich is something that I don't
think a lot of people offer orknow about, at least, you know,
in this space. I didn't knowabout it until I did some
research on rent to retirementand obviously talking with you
here today.
Zach Lemaster (25:28):
Yeah. We have and, you know, if I could just
go a little bit further on thattrend. So, I mean, like I said,
every investor has their ownunique strategy and goals that
they wanna achieve. But our goalis to help them put that into
place, right, and visualizetheir strategy and build that
out. So like just to use aproperty example, if someone has
a $300,000 property that'sprobably about average price
(25:50):
point.
We have new constructionanywhere from 2 to 400,000 give
or take. We have some stuffthat's rehab that's less than
that. But average newconstruction A class house, 4
bed, 2 bath in the southeast isprobably $300,000 it'll probably
run out between $24 to $26100 amonth. So have an 8% to 12% cash
on cash return if you're usingconventional financing, but
that's the standard dealstructure. But if you're looking
(26:12):
at some of these creative dealstructures, so let's say a
$300,000 house has a 10%incentive on it, and our
incentives probably rangeanywhere from 5% to 12% deal
dependent.
Plus that $300,000 house with a10% incentive, you as the
investor get to utilize thathowever you want to. And this is
where gets really creative andinteresting, and we are the only
company doing these types ofthings because of our
(26:35):
relationships and economies ofscale that we've built. So, a
$300,000 house, 10%, that's 30ks. You can take that as an
immediate price reduction tocome into immediate equity. That
will help you have a lower loanamount, help you cash flow
better, possibly cash out refior sell quicker, right, because
you already have kind of thatyou're ahead of the game with
that equity.
And that house will appraise allday and be sold retail at
(26:57):
300,000 or higher consistently,so it's true equity. Or but you
don't have to take it. In fact,most investors don't. Because
the other options you can dowith that 10%, that 30 ks is you
can use it to buy your ratedown. I mean, we have people
buying the rates down into themid threes right now, which is
like, we're never gonna getthere in interest rates again,
right?
On a 30 year fixed loan, Yeah.That's a lot of money to buy the
rate down, but some people wannado that because then they're
(27:18):
gonna cash flow the heck out ofit. Or what most people do is
actually take the capital backat closing. Like, you can
literally get 10% back atclosing, and that's where I
think where it becomes the mostefficient because that's
covering half of your downpayment. Right?
So, you could buy a $300,000house if you're doing 20% down
at 60 ks, you get 30 ks of thatimmediately back. That
skyrockets your ROI and helpsyou stretch your capital further
(27:38):
across more doors. And where itgets really unique is that we
have, negotiated with localcredit unions, not in all
markets but in most, where theyhave some creative finance
options where you can put aslittle as 5% down on up to 5
investment properties. These aretrue investor loans, these are
not where you have to live inthem. There's no PMI on these.
Like, conventionally, you haveless than 20%. Normally, you
have PMI, right? So this is atrue portfolio loan held in
(28:02):
house by the local creditunions. We've helped them
develop and build out theseproducts, and we've created a
consistent pipeline, so theyfeel confident to keep offering
them. But it's a 5% down loan,up to 5 investment properties,
you still have to qualify forthem.
It's a 30 year amortized loan.It's 10 year term, so it's due
in 10 years, amortized over 30years. No PMI, no prepayment
penalty. You can refinance itwhenever you want. So think
(28:24):
about that.
If we're giving you 10% back atclosing on a property, and
you're buying it with 5% down,not only are you getting your
down payment coverage, so you'rebuying it with no money down,
but you could possibly even getmoney back in your pocket,
right? And you can use theseincentives however you want. You
can do half on the half on theprice reduction, half on the
cash back, buy the rate down.Most people do a combination,
(28:45):
but it's a really unique waywhere it's like, hey, you can
actually acquire A class newconstruction assets with no
money down out of pocket if youreally wanted to. The one caveat
I'll say is that on a 95% loan,you may not be positive cash
flow, right?
You don't only have to put 5%down, you put 7, 8%. There may
be a sweet spot for you whereyou're break even or positive.
But just keep that in mind, youhave a 95% loan. But it's all
(29:07):
about, like, how do youstructure that to make sense for
you? And you can use thatstructure however you want.
So I just wanted to go throughthat example.
Trent Werner (29:14):
Yeah. And I have a couple of questions about that
example because I think a lot ofpeople are hearing that and I
mean, should be should behearing that as a great idea and
a great way to acquire moreassets in their portfolio. So if
someone, let's say that's a 10%incentive, we're going to use
the same example here. Saysomeone puts 10% down. And
(29:34):
that's maybe allowing them tocash flow and then they get that
10% back.
Now you're able to basicallyhave no money down aside from
some closing costs and whatnot,and still cash flow on an A
class property, right?
Zach Lemaster (29:48):
Yeah. I mean, every deal is dependent, right?
Some will have better cash flowthan others. Like we have some
Ohio stuff that's like 160,000,and, those are rehabbed
properties, not newconstruction, b class stuff.
Those will actually cash flowwith 5% down.
But, yes, it's up to theinvestor ultimately what they
want want to do. Right? Youcould put 20% down on that
property. It's up to you. Wedon't care what loan structure
(30:09):
you use.
But in that, yeah, you justkinda gotta run the numbers and
tweak it to to make sense foryou based on what makes sense
for you. We have a lot of peoplethat are high income earners,
and they're actually okay withnegative cash flow because
they'll plan to sell orrefinance the property within a
3 to 5 year period, but theywanna maximize tax benefits.
Right? These are people thatearn a lot of money then. Just
(30:29):
like we talked about withaccelerated depreciation, like,
you can create if you bought a$1,000,000 worth of real estate
and you had a $300,000 taxdeduction, you know, through
accelerated depreciation, youcould accomplish that with
potentially no money down.
Even though you're negative cashflow, you just have to have a
plan for that. And our rents inthe Southeast usually go up
about 6% per year, Trent, whichis about double the national
(30:50):
average. But, you know, so eventhough they may start out
negative cash flow, I mean, overtime, they eventually the rental
increase. But, yes, that's a Ithink that's that's a possible
example.
Trent Werner (31:01):
Yeah. And you've I do have a question on the
markets that you're choosingcause you have the Southeast and
the Midwest, you just used Ohioand the Southeast as examples.
Obviously, the deals are goingto operate a little bit
differently in market to market.How do you identify your markets
that you're going to get into?And I think you said you had 18
different markets right now.
(31:22):
How are you identifying thosemarkets?
Zach Lemaster (31:24):
We want to there's kind of and it's multi
factorial. We start broadmacroeconomics scale from a
state level, and then we goreally microeconomic into, like,
specific MSAs and neighborhoods.Generally, we wanna be in areas
where we're below the medianhouse price point, which is give
or take 400 k. Sounds cheap forguys like us in Denver and
Portland, but, you know, medianhouse price point, 400 k. In the
(31:47):
US, we wanna be significantlybelow that because that's where
your bread and butter housingis.
You you have less volatility inthose areas. You have the
highest demographic for retailbuyers and and, tenants, right?
So and so that's kind of wherewe try to try to be in an
affordable markets that havelandlord friendly legislation
that just tends to be, you know,Midwest and Southeast that are
(32:08):
below that price point. We wannabe in areas that have a
diversity of industries. Wedon't wanna be in an area that's
just solely reliant on oil orgas that could obviously change
the economics of the area.
We wanna be in areas where weobviously see the potential for
future population and economicgrowth. And the big thing, I
mean, I you really don't have tooverthink it too much. I know a
lot of people get you know, theythink it's daunting to invest
(32:31):
out of state, which it can be.You need to be familiar with
local laws and regulations. Buta big thing we look at is supply
and demand.
Economics 101, we wanna be in anarea that has an undersupply of
housing and where thepopulation's growing. There's a
lot of people moving down to thesun belt. So the southeastern
markets or areas within Texas,the Carolinas, Alabama, Georgia,
Florida, those will be a lot ofthe southeastern markets that we
(32:51):
focus on within specific areasin the state too. Not all areas
like Florida make sense. Orlandoand Miami certainly do not make
sense from what, like, ourfundamentals.
So those are kinda some of thethings that we look at. And then
like on a neighborhood basis,like, we're attending city
planning meetings, we're seeingwhere future jobs and
transportation is going, andlooking at where, you know,
where that affordability metricis that that makes the most
(33:12):
sense. With new construction,builders are building in areas
where there's an undersupply,right, or they're they're trying
to where there's there's highdemand. So those are some of the
things that we choose in themarket. And then we build a team
and, you know, start investingin that area and then track it
over time.
Trent Werner (33:27):
Yeah. And as far as the team that you just
mentioned, I mean, we've alreadytalked about the builders. We've
talked about the local creditunions that you guys have
partnered with. I do wanted toask about insurance and property
management. How are you settingthose up and are you connecting
your investors with insuranceagents and property managers, or
(33:48):
are they having to go out andfind their
Zach Lemaster (33:49):
own? Yeah. Management is set up in place.
We don't do any propertymanagement in house. We did at
one point, but we found thatespecially as we scaled it,
like, you know, we're we'rebetter off, partnering and
vetting air the the teams thatare hyperlocal to that area.
So it's not National PropertyManagement. It's hyperlocal to
that area. People that reallyunderstand the market and are
already excelling at theirbusiness. They need to have at
(34:11):
least 250 doors undermanagement. We go through best
practices.
Sometimes, you know, we're ableto even improve their management
structure with like tenantscreening. We're able to
obviously negotiate lower feestructure, just like with the
builders and the lenders. Samething with property management
and insurance. You know, beingpart of our investor community
at Rent Retirement, you getdiscounted pricing just because
of the sheer volume of business.And so we find property managers
(34:35):
in those areas and they manageproperties.
These are all long term rentals.We do have some short term
rentals, but that's not our maincore competency. We focus on
long term rentals. You don'thave to use these property
managers, but they are there foryou to use and most people do.
And if you wanna fire them orsomething happens in the future,
we have other recommendationsfor you and help you make that
transition.
And same thing with insuranceproviders. We have a diversity
(34:55):
of different insurance providersthat, you can get insurance
quotes from. You don't have touse them, but we've discounted
discounted price points andpremiums for to maximize the
cash flow on the property, youknow, among other things. And I
will say on insurance too,because that's a question that
always comes up, especially whenwe talk about like Florida and
Southeast is people are alwayslike, Well, insurance has gotten
so crazy expensive. In someareas, yes.
(35:17):
Usually it's flood zones orareas that have been remapped as
flood zones. And the homes thatare being hit the hardest are
the old homes, like actually pre1990, a lot of times where
building codes have changed andthen all of a sudden it's like,
you know, those buildings arenot built to stand. Those are
the houses that are having likethe 3x in insurance costs. Our
average insurance cost on abrand new constructed house in
(35:39):
Florida is $9.50 annual premium.And that's because they're built
not in flood zones and they'rebuilt to current standards,
right, current building cone.
They're concrete block homesthat withstand a 150 mile per
hour wind. So insurance is stillrelatively affordable, you know,
if you're not in flood zones andyou have a new construction
house.
Trent Werner (35:59):
Very nice. Well, Zach, I wanna ask you too, rent
to retirement sounds like a nobrainer for someone that is, you
know, earning good income, wantsto get into real estate, wants
to get out of their own backyardand diversify to different
markets. What's your favoritething about your business and
what you're able to do for yourinvestors?
Zach Lemaster (36:19):
I think for us what's fulfilling, because we're
not in this business to makemoney, I mean, admittedly, you
know, probably at some point wereally were, but we've been
successful every single year.I'm passionate about real
estate. I'm passionate abouthelping people accomplish their
goals. And hopefully people cansee that. We have a lot of 5
star reviews online, that, youknow, people talk about the time
(36:40):
we spend with them to help thembuild out the strategy.
But if you remember, I we builtthis business just kinda by
accident in the early years outof our own investing. So I love
real estate. I still enjoyoptometry, but like I said, real
estate, I think you can just domore, right? And You can create
a lifestyle. And I think that'sa lot what a lot of people want
to ultimately do is create alifestyle where and and it does
(37:02):
take work.
Right? Even if you're buyingturnkey, guys, this is like real
estate is real estate. You willhave tenant issues from time to
time. Like, it's not a 100%passive. I don't believe there
truly is anything that is 100%passive.
But what we really enjoy aboutworking in the industry that we
do is how impactful of adifference we can make on
people's lives when we teachthem about the things like the
(37:25):
tax benefits, when we bringthese discounted new
construction deals to people tohelp them build a strategy, and
it's not all perfect, right, itdoes not all work out. It's not
all sunshine and rainbows. Realestate takes work and takes
grit. It's a long term game, butif you stay committed, I believe
it's the most predictable pathto wealth. And I just love the
stories of seeing people whereit's like the brand new investor
(37:48):
that was nervous about gettingstarted or investing out of
state, and they may have been,you know, maybe a little
annoying at first because we hadsome of the conversations.
But they come back a few yearslater, and they're like, hey, we
made a huge impact. And a lot oftimes those people go out and
build out their own real estatebusiness, but we gave them the
foundation to help them getstarted and the confidence to go
out and do something great. Andbeing able to have an impact on
(38:10):
people's lives like that when wehear those stories, like, that's
the self fulfillment and thereward. It's like, I love that.
Same thing in healthcare.
I love helping people see, andand that will change their life
for a better. And I think youcan do the same thing in real
estate. I mean, I truly believethat.
Trent Werner (38:27):
I love it. Where can people hear more from you,
Zach, and connect with you andyour business Rent to
Retirement?
Zach Lemaster (38:34):
We always want to drive people to our website, so
that's Rent to Retirement dotcom, Rent to Retirement dot com.
We have, you know, our podcasts,our YouTube channel, a bunch of
investment calculators, marketdata, even if you just want to
you know, get access to some ofthe lenders that we talked about
because you don't have to gothrough us to use them. You
know, we put out a lot ofinformation available to the
general public. If you'relistening to this audio, you can
(38:55):
text REI to 33777 and set up atime with our team to help you
build out a strategy. We don'tcharge investors anything, we
make our money through buildingand selling houses.
So we spend as much time as weneed with you to help you build
out a strategy. And yeah, checkout the website and all the
content we put out.
Trent Werner (39:12):
We'll make sure we link that, Zac. Thank you so
much for sharing today andjoining our our conversation.
Zach Lemaster (39:17):
Trent, it's been a pleasure. Thanks for having me
on.
Intro speaker (39:20):
Thank you for listening to this episode of the
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(39:40):
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Trent Werner (00:40):
Welcome back to another episode of the Deal Deep
Dive segment on the Westside
Investors Network podcast. I'myour host, Trent Werner. In this
segment, our featured guestswill share their unique stories
on a specific deal they'veinvested in. We will dive deep
into finding the deal, financingthe deal, writing an offer, and
the due diligence.
Do us a solid and smash thatsubscribe button, leave us a
(01:02):
rating, and share this episode.And now, let's dive deep.
Welcome back to the WestsideInvestors Network podcast. I'm
your host, Trent Wharton. Ontoday's episode, we are joined
by Zach Lemest, CEO of Rent toRetirement.
Today, Zach's gonna share abouthow he turned his optometry
career into a full time realestate investment business,
(01:24):
where rent to retirement willhelp investors find out of state
a class turnkey deals and set itall up for you, guide you in the
right direction, connect youwith the right people. And we're
gonna hear about how some ofthose connections can create
pretty good deals on A Classproperties in today's current
market. Now let's welcome ZachLemaster. All right. Welcome to
(01:47):
the Westside Investors Network.
We got Zach Lemaster, the CEO ofRent 2 Retirement joining us
today. Zach, thanks so much fortaking the time to chat with us.
Zach Lemaster (01:55):
Yeah. True. I'm excited to be here. Thanks for
having me.
Trent Werner (01:57):
So Zach has, accomplished what I think a lot
of our listeners and a lot ofpeople want to accomplish, where
you're in a career and you wantto get to real estate full time.
You maybe start while you'restill working that career
instead of just going headfirst, and burning the ships and
going right for it. So I want totalk with Zac today about how
you accomplish that goal ofgetting full time in real estate
(02:21):
and being able to practiceoptometry when you want and for
the good of the people. So
Zach Lemaster (02:27):
Yeah. Go for it. Well, I mean, just to kinda,
yeah, fill you on my story. Thefirst thing I'll say, Trent, is
that I never had a goal toreplace my income. That was
actually not something that wasan ambition of mine.
I really enjoyed optometry, andI'm still passionate about that.
My wife is also an optometrist.And but now we have the ability
to practice really just, yeah,on a volunteer basis. We have a
(02:48):
lot of humanitarian efforts thatwe put our energy into. We set
up cataract clinicsinternationally in
underdeveloped areas that don'thave access to eye care.
But my point is is that, youknow, we're able to do that
really, like, on our schedule,and we're actually able to have
a bigger impact globally becauseof what real estate has allowed
(03:10):
us to accomplish. But yeah, Inever anticipated to like
replace my W2. I know that maybe an ambition for a lot of
people, and that, like, that'sgreat. But you can still, I
mean, regardless of really whatyou wanna do out of real estate,
real estate can fit multipledifferent aspects of your
lifestyle really, and it canstart as a side hustle. That's a
beautiful thing.
But yeah, so my wife and I wereoptometrists by education. We
met in school. I was on ascholarship with the Air Force,
(03:32):
HBSB scholarship, so I wascommissioned as a captain in the
Air Force right after I leftoptometry school. I practiced
optometry there for, I I don'tknow, 6 or 7 years, that's where
I started investing. I startedinvesting in real estate just
because, I mean, like manypeople I probably read a lot of
the books and the Rich Dad PoorDad stuff and just was like,
hey, this seems like aninteresting thing and I could
understand real estate, it'stangible.
(03:52):
First house I bought used a VAloan, no money down, bought a
duplex, lived in half, rentedout the other half. And this is
probably about 14 or 15 yearsago at this point when I bought
that first house. That was myfirst primary residence, and I
just got hooked. I liked theidea of buying an asset using
other people's money, I. E.
The bank that a tenant basicallypays off for you over time. And
then you get all the, you know,the appreciation, the tax
benefits, and benefit ofleverage, and things like that.
(04:13):
So the next year after that, webought a few more deals and just
consistently bought real estate.I didn't have, like, necessarily
a big plan, and we went slow inthe beginning. We invested
locally to start.
But there was a pivotal moment,Trent, where we started to look
out of state in differentmarkets that we found better
opportunity, areas that weremore conducive with our goals,
(04:33):
areas that have betterappreciation, and just better
opportunity to really, like,take advantage of real estate
and the path of progress. And sowe started to invest out of
state across multiple differentmarkets. And you know, there's
obviously some bumps in the roadwith that, but we kind of
figured it out, always improvedour systems. And that was the
birthplace of Rent toRetirement. We kind of built
this business by accident justout of necessity of building a
(04:54):
systematic way for our owninvesting to find the best
markets and build the teams andsystems in those areas so we can
strategically invest in areasthat offer the best returns, you
know.
And we had a lot of friends andfamily and colleagues that were
like, Hey, we see what you'redoing in real estate. Can can we
invest with you? Or can you helpus? We don't have the time or
experience or local market's tooexpensive, whatever the case is.
And we started to help them justfollow the same path that we
(05:17):
did.
And fast forward, you know,probably from that point about
10 years later where we're attoday, you know, we obviously
have a pretty robust companythat helps people buy deals
across the country where thereturns are attractive, and we
have all the teams set up sothey can be, you know, somewhat
passive. You don't have to selfmanage or do everything from
your own on the ground floor.And so, yeah, that's kind of the
(05:38):
story. I mean, we're across 18different markets and, you know,
we'll probably do about 800doors this year. But, I mean,
I've always just kept my nosedown and just kept investing in
real estate and doing more,right, even though I didn't
necessarily have the plan to bewhere at today.
Trent Werner (05:51):
I got a couple questions for you from the early
years when you and your wifewere first getting started. When
you were first starting out,were you focused on assets that
had better cashflow or betterappreciation when you were first
getting going to those firsthandful of deals?
Zach Lemaster (06:07):
Yeah. It's interesting because and that is
a spectrum. I think a lot ofpeople, like, think it's either
or. I've come to find out youcan you can actually have both
just in the right market. Andthat's really where we focus
today is like new construction.
But in the early years, I wouldsay and I think this is probably
true for a lot of people is Iwould really just focus on cash
flow because that's tangible. Iwasn't too forward thinking. I
(06:28):
was just like, Hey, if I have,you know, whatever, $400 a month
in net cash flow, if I can buy10 of those houses, that's
$4,000 a month, that'll be $48ks a year, pretty much tax free
because of how real estateworks, right? So that could be
the equivalent of 60 ks or 70 ksearned income. But I was like,
yeah.
So that makes sense and it'stangible. Those were the early
(06:48):
years. In future years, Ilearned that you actually truly
build wealth in real estatefocusing more on like, cash flow
is a byproduct where you focuson, you know, appreciation, the
tax benefits, and, like, how tostrategically scale and trade up
10.31 cost seg, those thosetypes of things. But early
years, yeah, cash flow.
Trent Werner (07:04):
And the reason I ask that because I think a lot
of people, like you said, arefocused on cash flow to start
because it is tangible. Onething that I've noticed from my
wife's perspective, she's anurse and I don't know if it's
just the industry or people thathave, you get paid every 2
weeks. A lot of people tend tothink on a monthly basis. And so
if they see the cashflow comingin every month, that just lines
(07:26):
up with their thought process onfinances in general. But to your
point, you know, being able toget both is great, but in the
early years, I've, I haveexperienced that the
appreciation side, while you'restill working and making money
from other avenues, typically ismore beneficial down the road.
Zach Lemaster (07:47):
Yeah. And I couldn't agree with you more.
And that's a good point. Mostpeople do think on a monthly or
biweekly basis because that'sthe income and expenses, right?
You're kinda, and there are alot of people that live paycheck
to paycheck, you know?
And if you can, you know, carveout some extra money to invest,
like that's kind of the firststep. But yeah, learning about
appreciation and likeunderstanding I don't think I
(08:08):
truly knew the math of realestate. I don't think I truly
understood in the early yearshow real estate worked long
term. We refer to real estate asthe ideal investment and that's
an acronym for all the ways youearn income. So I is cash flow,
right?
That's your income. D isdepreciation and tax benefits,
which now honestly, that's themost important thing we pay
attention to because we have asuccessful business and our goal
is to buy enough real estateevery single year to completely
(08:30):
wipe out our taxes, which can beaccomplished with real estate if
you do it strategically. E isequity as the tenant pays a loan
down. A is appreciation. As youmentioned, all homes go up in
value regardless of short termfluctuation.
And then L is leverage, beingable to leverage properties.
That's what really separatesreal estate out from other asset
classes. But yeah, I think mostpeople think about cash flow
because it's tangible, they cansee it, they can feel it, they
(08:51):
can calculate it. But if youlearn how to run the math and
understand before thinking like5 or 10 years what a property
could be, I think that willaffect a lot of the decisions
you make early on in investing.And most people are not trying
to retire tomorrow off of cashflow.
Right? So to your point, ifyou're having a W2 income and a
job, like, that's a really goodthing to be able to qualify for
(09:12):
good loans, to buy propertieswith with a 10 year plan or
whatever the case is.
Trent Werner (09:17):
And you've mentioned depreciation and the
tax benefits a couple of times.And in your example, you said,
if you can cash flow $400 amonth and get 10 of them, that's
48 ks a year. Obviously, neitherof us are tax professionals. So
there's my disclaimer. Can yougive a high level overview of
when you understood the taxbenefits and depreciation, and
like you said, buying enoughdeals to wipe out that income?
(09:39):
And what's your high leveloverview or your benefit to
investing in real estate on atax depreciation side?
Zach Lemaster (09:47):
Oh, man, Trey, you're gonna get me going here.
I could, you cut me off becauseI can talk all day about this.
And I do on our, you know,YouTube and podcast stuff,
because we bring in our taxprofessionals to actually, you
know, break this down forpeople. But I think in general,
if we're talking big picture,there's 3 main things that
really separate, 3 main taxbenefits. There's a lot of tax
benefits, and I won't even getinto like the estate planning
(10:09):
and the step up basis where youcan, you know, perpetually defer
depreciation and never pay taxeson real estate potentially, but
like just in the early stages.
So, one is cash flow where werefer to that as tax free
income. If you're leveragingproperty and you're accounting
for all your expensesappropriately tax, insurance,
your mortgage, your normaldepreciation, which everyone
takes, all the expenses, all thetaxes, all the stuff on the
(10:30):
property, those are all taxdeductions, right? Those are all
write offs. And so the realityis what I've found is that most
property that we buy, eventhough we have positive cash
flow, that cash flow is tax freebecause it's just the normal
write offs. And so that's reallypowerful if you think about it,
especially if you live in astate that has, you know,
taxable income, but even justfrom a federal standpoint, like,
taxes are the biggest expensewe're all gonna pay in our life,
(10:52):
and that's the easiest way togive yourself an immediate
raise.
That then you can have moretangible cash capital to go and
invest and invest in otherassets that have additional tax
benefits, and you get thesnowball. So that like, just
paying attention to the taxbenefits allowed us to really
scale our portfolio to the pointwhere we were able to replace
our active income. I would saythat's the one thing that
allowed us to truly replace ouractive income. And professional
(11:14):
income, right, doableprofessional income within 5 to
6 years is utilizing the taxbenefits. So if you have
$100,000 of income from yourrental portfolio, that's
probably the equivalent of$160,000, $170,000 of earned
income, possibly more dependingwhere you live, right?
That's extremely powerful. Sothat's the one thing, it's just
tax free cash flow. The The nextthing is 10 31 exchanges. This
(11:36):
is absolutely huge, right, andthis isn't going away. I know
there's a lot of 10 31exchanges, and the IRS, I'll say
this too, the IRS incentivizesus as real estate investors to
stimulate the economy, to createjobs, to create housing
solutions for people.
So the IRS will alwaysincentivize us as real estate
investors to go out and do thesethings that they are incapable
(11:57):
of doing themselves, that's thebenefit of being in the real
estate industry. 10/31 exchange,basically you buy a house for
$100,000 later it's worth$200,000 you sell it, and
normally you'd have capitalgains on that if you hold it for
longer than a year, which can bedramatic on your income on that
property. But you're allowed toroll it into more property, you
know, and defer those capitalgains, which you can do
(12:17):
perpetually forever if youstructure it appropriately.
That's really powerful becauseinstead of paying, you know,
whatever, 25% on your profit,that's an extra 25% that you
don't have to pay and you canreinvest in more real estate
that, again, has additional taxbenefits. So, we did a lot of
those.
You know, the first portfolio ofproperties that we created
within the 1st 2 to 3 years, youknow, we let those build equity
(12:38):
over time through appreciationand the tenant paying the loan
down. And then within 4 to 5years, we went through our first
2 1031 exchanges, and we wereable to double our portfolio
size, almost triple it, withoutputting any more capital in.
Right? We just used the equity,and then we reinvested the
equity and, like, double ourportfolio overnight and increase
our cash flow. And that's kindof the scalability way.
(12:59):
Now a little bit higher level,what we do because we're, you
know, actively involved in realestate, real estate
professionals is currently weuse accelerated depreciation as
the kind of 3rd big, bigimpactful thing. And again,
there's a lot of tax benefits,but those are the 3 most
impactful things that I thinkthat anyone can do. And that's
basically where you're taking aproperty and you're accelerating
(13:21):
because you take depreciationover on residential 27 and a
half years. Normally, that's ahuge tax benefit for the
property. But what you can do asa real estate professional or if
you're operating short termrentals is you can take a
portion of that in year 1against all income sources,
against active w two incomepotentially, and that can be
extremely powerful.
So if you buy a $1,000,000 worthof real estate, that's a handful
(13:43):
of single family or one multi,whatever the case is, our
studies usually come in about30% of accelerated depreciation.
So on a $1,000,000 of of realestate, you could have
potentially a $300,000 taxdeduction that offsets all of
your income sources. Right? Andthat's just accelerating that
depreciation because that'smoney you would otherwise give
to uncle Sam that can now youhave to reinvest in. There's a
(14:06):
lot more to that, like this yearwhere it's 60% bonus
depreciation, things like that.
But those are kind of highlevel, the big most impactful
things that has helped us.
Trent Werner (14:14):
So you obviously started investing in real
estate, got very familiar withthe tax benefits from real
estate, and that's when you wereable to scale, like you said.
When did this rent to retirementconcept start coming into play
in your career, in yourinvesting career?
Zach Lemaster (14:30):
I think this was probably about year 4 of our
investing, or 3 to 4. This isbasically I mean, that's when
the concept was born, notnecessarily when we started the
company, but we were investingout of state. So I was stationed
in North Dakota with the AirForce at the time. Excuse me. We
had bought a few rentalslocally, and as I mentioned.
But North Dakota is not like thehighly sought after market,
(14:53):
right? I mean, it's got okaycash flow, somewhat decent
appreciation, but we started tolearn about other markets where
there was just, like, betteropportunity, where rents were
increasing significantly more,where there was more
affordability, we had lowerprice points on better quality
assets that had betterappreciation year after year,
which we, you know, found out.Like, hey, because I think this
(15:13):
would be true for most people,and this is what our company
serves to try to help peoplewith today is that, like, it's
okay to start in your localbackyard. But, you know, as you
grow and diversify, you do wannabe diversified. Most successful
investors have a diversity ofportfolios and assets across the
country.
But, I mean, it's probablylikely that there's other
markets out there that are moreconducive to your goals or just
(15:34):
have better returns in your ownbackyard. Simple as that, right?
And the markets are alwayschanging. So once you kinda open
your mindset to looking acrossthe country at these different
opportunities, you can makesome, you know, bigger moves and
make your goals more efficient.So that's what we started doing.
And like I said, it wasn't easyat first, but we built a process
to first identify markets thatfit our fundamental goals, be in
(15:56):
the path of progress, landlordfunding legislation, low taxes,
all these things. We wanna be ingrowth markets. And once we
started to focus on those areas,we're like, wow, we're really
making bigger moves in a shorterperiod of time. And that's where
people are like, hey, like, canyou help us? You know, so a lot
of our colleagues, even ourfirst two investors were like
optometry colleagues of ours,that just we just talked about
what we were doing.
And then we figured out like,hey, we've already had the
(16:16):
framework for a way for us toinvest out of state, building
all the teams, the management,the lenders, finding the local
areas that fit our goals, andconsistently doing that over
time and opening up new markets.And so then we're like, hey,
there's a larger need for peoplethat wanna invest out of state
and access different markets.And then we put a team together,
started marketing publicly,opening up to other investors,
and that was kind of the thebirthplace.
Trent Werner (16:39):
Yeah. And I think, I mean, from my own experience,
I've always I'm located inOregon, Portland Metro, and so
I'm sure a lot of people thatare listening know that the, the
landlord tenant laws aredefinitely tenant favored here.
And so I've looked out of state,but it is daunting because I'm
not familiar with these othermarkets. I don't know how to
identify them very well, and itwould take me a lot of time to
(17:02):
get comfortable and and meet theright people in those markets.
And that's where rent toretirement has bridged that gap
for a lot of people that want toget out of their own backyard,
but maybe don't have the time orthe resources or the skills to
go find those markets.
How do you connect these peoplewith these these new markets
that maybe aren't theirbackyard?
Zach Lemaster (17:21):
And by the way, I went to, do you know where
Forest Grove is?
Trent Werner (17:24):
Of course. Yeah.
Zach Lemaster (17:25):
Yeah. Right right past Hillsboro. So that that's
where I went to optometryschool. I was in I was in,
Forest Grove. So I love Oregon.
We're in Denver. If we weren'tliving here, we'd probably be
there, you know. But like Isaid, same thing here. It's
difficult to invest locally forall the same reasons. But yeah,
so I guess for the investor,like, our motto is to make the
(17:46):
best deals across the countryaccessible to everyone where we
handle everything for them.
And I'm not saying real estate's100% passive because sometimes
people associate turnkey with,Oh, it's not 100% passive, but
it is on the passive end of thespectrum when you're talking
about like tangible physicalassets that you're owning. So
we, I mean, we first, you know,identified the markets that fit
our investment criteria.Geographically, we tend to be
(18:07):
focused in, you know, theMidwest, Ohio, Missouri,
Indiana, and then majority inthe Southeast. These are more
growth markets, and that's allnew construction. We mainly do
builds to rent single family andsmall multi.
And so we have fundamentalmarket criteria that we decide
on to build a team. Either wepartner with locally established
teams from builders andmanagers, or we'll build our own
team in that area once we'veidentified that that's a quality
(18:30):
market. And then we'll offerconsistent inventory, new
construction inventory, to ourinvestors that they have access.
These are off market deals,they're often steeply
discounted. We talked a littlebit about like, you know, buying
properties on the newconstruction below market value
with unique loan structures thatwe're able to accomplish.
So they're possibly 5% down intothe properties or less,
sometimes 0% down because we'repiecing all the things in place,
(18:53):
the lenders, the insuranceproviders, the inventory, the
property managers. And then ourteam is helping guide them
through the process of firstunderstanding investing out of
state and really what is thestrategy for them. Everyone has
individual goals, criteria,timelines, resources, so we want
to help them build an investmentstrategy. If you're a brand new
investor and this is your firstproperty, turnkey is a great
(19:14):
option because you're avoiding alot of those common pitfalls and
mistakes. Or if you're a firsttime investor out of state,
like, to your point, there's,you know, a lot of different
things to think about, localregulations and laws.
How do you even identify theright market? So our goal is to
already have done the researchand have the established teams
where we can match you with themarket that meets your goals and
kind of give you the help youwalk through that strategy to,
(19:36):
like, how are you gonna get to ato z? Let's get you into your
first couple properties. Let'smake sure that makes sense. How
do we maximize tax benefits?
What are the creative loanstructures? And how do we help
you scale over time? So it'sliterally just tapping into our
established networks and teamsthat are in the diversity of
areas we're we're operating in.
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Trent Werner (20:26):
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uptownsyndication.com today tolearn more. So, Zach, let me ask
you as someone that in my ownmarket, I have the the team in
place to buy a deal that needs aface lift and and able to force
that appreciation myself throughrenovations, and then obviously
renting it out and holding in myportfolio.
(21:07):
As an investor like that, ifsomeone says, you know, I'm used
to that, but all I have isturnkey properties, albeit
typically at a discount or belowmarket value. Where is the where
is the benefit in terms ofbuying a turnkey rental where I
know one of the benefits is youdon't have to deal with the
(21:27):
headache of renovating it. Butwhat would you tell someone
that's in a position like I amof turnkey versus something that
you can afford you can forceappreciation on?
Zach Lemaster (21:37):
Yeah. And and I would start by saying, Trent,
that it may not make sense.Right? This is a this is a
specific investment model thatserves a specific niche for the
right investor, but it can fitin multiple scenarios for the
investor depending on theirshort, long term goals. For
someone like yourself who's anactive investor, you're
actively, you know, rehabbingdeals and forcing appreciation
(21:59):
and then doing some creativethings with whatever it sounds
like cash out and then holdingthem as rentals and having a
great ROI, that's fantastic.
And that takes a lot of work,and it's a full time job. And
there's volatility with that,right? And for a newer investor,
potentially, that could be avery risky thing and challenging
thing to do. I think a lot ofpeople actually jump into
flipping too early and, like,get in over their head, or they
(22:20):
just don't have the time andexperience to deal with that.
Where it may make sense for you,though, is if you're looking to
diversify into other marketsover time.
You have your active real estatebusiness. We have a lot of
active professional real estateinvestors running, you know, 7,
8 figure businesses, but theystill buy with us because it
helps them to easily diversifyand scale their portfolio.
(22:41):
Because buy and hold realestate, I mean, buy and hold is
where you build wealth over timeand financial independence. So
regardless of what you're doingin an active career or active
real estate business, this stillprovides an opportunity for you
to easily and systematicallydiversify into other areas that
make sense for you and and toscale. We also have a lot of
investors on, like I mentioned,on the tax side that they're
(23:02):
making great income on theirtheir W2 job or their real
estate business, and they justneed an efficient way to, like,
buy more real estate, to nottake away time from their W2 or
their active business tomaximize their tax benefits.
Right? So that could serve thatpurpose. Turnkey really makes
sense for people that are newerinvestors. They wanna avoid the
pitfalls, newer investors out ofstate, people that are you know,
(23:22):
they have capital, they don'twanna be actively managing
properties, people that wannadiversify, business owners like
yourself that, you know, dowanna utilize that. And I will
say, you know, there's a commontheme that or misconception that
in turnkey, you're buying at orabove market value, and there's
no value add, there's no upside.
And that's really just not thecase with our at least with our
(23:43):
company because we operate 2ways. 1, we're builders, and we
build our own inventory, But wealso partner with national and
regional builders because as acommunity, we have 100 of
thousands of investors in ourcommunity that are buying, you
know, 100 and thousands ofproperties every single year. So
we have a lot of buying power asa community. So we can go to
these national builders, whichwe've already established, like
(24:04):
Doctor Horton, Toll Brothers,Lennar, whatever, and who build
all across the country and say,we actually work with their
wholesale division instead oftheir retail division and say,
you know, we commit to x x 100of houses that we're gonna buy
that year because we've cherrypicked the markets that we know
to be the best markets wherethey're already building, and we
can get steeply discountedprices because of that. We're
(24:25):
the 1st company to work withinstitutional builders and get
institutional type of discountsthat, like, a Blackstone would
get because they're buying 100of houses and pass those
discounts on to the individualinvestor.
So there are some creative waysthat you can buy below market
value and come into 30, 40,$50,000 of immediate equity
where maybe you can't cash outrefi day day 1, but you're, you
(24:47):
know, you're expediting thatprocess where you already have
that initial equity to be ableto do something with earlier on.
Trent Werner (24:53):
Yeah. And that's I think that's one thing that's
really cool about your model isto your point, you said
typically if you're buyingturnkey rentals, you're you're
kinda letting time do its thingin terms of appreciation.
Whereas if you are able to comein with some equity right off
the bat, yes, you're going tolet time do its thing, but you
have some equity in there asidefrom just the cash that you're
(25:14):
putting in upfront, which iswhich is something that I don't
think a lot of people offer orknow about, at least, you know,
in this space. I didn't knowabout it until I did some
research on rent to retirementand obviously talking with you
here today.
Zach Lemaster (25:28):
Yeah. We have and, you know, if I could just
go a little bit further on thattrend. So, I mean, like I said,
every investor has their ownunique strategy and goals that
they wanna achieve. But our goalis to help them put that into
place, right, and visualizetheir strategy and build that
out. So like just to use aproperty example, if someone has
a $300,000 property that'sprobably about average price
(25:50):
point.
We have new constructionanywhere from 2 to 400,000 give
or take. We have some stuffthat's rehab that's less than
that. But average newconstruction A class house, 4
bed, 2 bath in the southeast isprobably $300,000 it'll probably
run out between $24 to $26100 amonth. So have an 8% to 12% cash
on cash return if you're usingconventional financing, but
that's the standard dealstructure. But if you're looking
(26:12):
at some of these creative dealstructures, so let's say a
$300,000 house has a 10%incentive on it, and our
incentives probably rangeanywhere from 5% to 12% deal
dependent.
Plus that $300,000 house with a10% incentive, you as the
investor get to utilize thathowever you want to. And this is
where gets really creative andinteresting, and we are the only
company doing these types ofthings because of our
(26:35):
relationships and economies ofscale that we've built. So, a
$300,000 house, 10%, that's 30ks. You can take that as an
immediate price reduction tocome into immediate equity. That
will help you have a lower loanamount, help you cash flow
better, possibly cash out refior sell quicker, right, because
you already have kind of thatyou're ahead of the game with
that equity.
And that house will appraise allday and be sold retail at
(26:57):
300,000 or higher consistently,so it's true equity. Or but you
don't have to take it. In fact,most investors don't. Because
the other options you can dowith that 10%, that 30 ks is you
can use it to buy your ratedown. I mean, we have people
buying the rates down into themid threes right now, which is
like, we're never gonna getthere in interest rates again,
right?
On a 30 year fixed loan, Yeah.That's a lot of money to buy the
rate down, but some people wannado that because then they're
(27:18):
gonna cash flow the heck out ofit. Or what most people do is
actually take the capital backat closing. Like, you can
literally get 10% back atclosing, and that's where I
think where it becomes the mostefficient because that's
covering half of your downpayment. Right?
So, you could buy a $300,000house if you're doing 20% down
at 60 ks, you get 30 ks of thatimmediately back. That
skyrockets your ROI and helpsyou stretch your capital further
(27:38):
across more doors. And where itgets really unique is that we
have, negotiated with localcredit unions, not in all
markets but in most, where theyhave some creative finance
options where you can put aslittle as 5% down on up to 5
investment properties. These aretrue investor loans, these are
not where you have to live inthem. There's no PMI on these.
Like, conventionally, you haveless than 20%. Normally, you
have PMI, right? So this is atrue portfolio loan held in
(28:02):
house by the local creditunions. We've helped them
develop and build out theseproducts, and we've created a
consistent pipeline, so theyfeel confident to keep offering
them. But it's a 5% down loan,up to 5 investment properties,
you still have to qualify forthem.
It's a 30 year amortized loan.It's 10 year term, so it's due
in 10 years, amortized over 30years. No PMI, no prepayment
penalty. You can refinance itwhenever you want. So think
(28:24):
about that.
If we're giving you 10% back atclosing on a property, and
you're buying it with 5% down,not only are you getting your
down payment coverage, so you'rebuying it with no money down,
but you could possibly even getmoney back in your pocket,
right? And you can use theseincentives however you want. You
can do half on the half on theprice reduction, half on the
cash back, buy the rate down.Most people do a combination,
(28:45):
but it's a really unique waywhere it's like, hey, you can
actually acquire A class newconstruction assets with no
money down out of pocket if youreally wanted to. The one caveat
I'll say is that on a 95% loan,you may not be positive cash
flow, right?
You don't only have to put 5%down, you put 7, 8%. There may
be a sweet spot for you whereyou're break even or positive.
But just keep that in mind, youhave a 95% loan. But it's all
(29:07):
about, like, how do youstructure that to make sense for
you? And you can use thatstructure however you want.
So I just wanted to go throughthat example.
Trent Werner (29:14):
Yeah. And I have a couple of questions about that
example because I think a lot ofpeople are hearing that and I
mean, should be should behearing that as a great idea and
a great way to acquire moreassets in their portfolio. So if
someone, let's say that's a 10%incentive, we're going to use
the same example here. Saysomeone puts 10% down. And
(29:34):
that's maybe allowing them tocash flow and then they get that
10% back.
Now you're able to basicallyhave no money down aside from
some closing costs and whatnot,and still cash flow on an A
class property, right?
Zach Lemaster (29:48):
Yeah. I mean, every deal is dependent, right?
Some will have better cash flowthan others. Like we have some
Ohio stuff that's like 160,000,and, those are rehabbed
properties, not newconstruction, b class stuff.
Those will actually cash flowwith 5% down.
But, yes, it's up to theinvestor ultimately what they
want want to do. Right? Youcould put 20% down on that
property. It's up to you. Wedon't care what loan structure
(30:09):
you use.
But in that, yeah, you justkinda gotta run the numbers and
tweak it to to make sense foryou based on what makes sense
for you. We have a lot of peoplethat are high income earners,
and they're actually okay withnegative cash flow because
they'll plan to sell orrefinance the property within a
3 to 5 year period, but theywanna maximize tax benefits.
Right? These are people thatearn a lot of money then. Just
(30:29):
like we talked about withaccelerated depreciation, like,
you can create if you bought a$1,000,000 worth of real estate
and you had a $300,000 taxdeduction, you know, through
accelerated depreciation, youcould accomplish that with
potentially no money down.
Even though you're negative cashflow, you just have to have a
plan for that. And our rents inthe Southeast usually go up
about 6% per year, Trent, whichis about double the national
(30:50):
average. But, you know, so eventhough they may start out
negative cash flow, I mean, overtime, they eventually the rental
increase. But, yes, that's a Ithink that's that's a possible
example.
Trent Werner (31:01):
Yeah. And you've I do have a question on the
markets that you're choosingcause you have the Southeast and
the Midwest, you just used Ohioand the Southeast as examples.
Obviously, the deals are goingto operate a little bit
differently in market to market.How do you identify your markets
that you're going to get into?And I think you said you had 18
different markets right now.
(31:22):
How are you identifying thosemarkets?
Zach Lemaster (31:24):
We want to there's kind of and it's multi
factorial. We start broadmacroeconomics scale from a
state level, and then we goreally microeconomic into, like,
specific MSAs and neighborhoods.Generally, we wanna be in areas
where we're below the medianhouse price point, which is give
or take 400 k. Sounds cheap forguys like us in Denver and
Portland, but, you know, medianhouse price point, 400 k. In the
(31:47):
US, we wanna be significantlybelow that because that's where
your bread and butter housingis.
You you have less volatility inthose areas. You have the
highest demographic for retailbuyers and and, tenants, right?
So and so that's kind of wherewe try to try to be in an
affordable markets that havelandlord friendly legislation
that just tends to be, you know,Midwest and Southeast that are
(32:08):
below that price point. We wannabe in areas that have a
diversity of industries. Wedon't wanna be in an area that's
just solely reliant on oil orgas that could obviously change
the economics of the area.
We wanna be in areas where weobviously see the potential for
future population and economicgrowth. And the big thing, I
mean, I you really don't have tooverthink it too much. I know a
lot of people get you know, theythink it's daunting to invest
(32:31):
out of state, which it can be.You need to be familiar with
local laws and regulations. Buta big thing we look at is supply
and demand.
Economics 101, we wanna be in anarea that has an undersupply of
housing and where thepopulation's growing. There's a
lot of people moving down to thesun belt. So the southeastern
markets or areas within Texas,the Carolinas, Alabama, Georgia,
Florida, those will be a lot ofthe southeastern markets that we
(32:51):
focus on within specific areasin the state too. Not all areas
like Florida make sense. Orlandoand Miami certainly do not make
sense from what, like, ourfundamentals.
So those are kinda some of thethings that we look at. And then
like on a neighborhood basis,like, we're attending city
planning meetings, we're seeingwhere future jobs and
transportation is going, andlooking at where, you know,
where that affordability metricis that that makes the most
(33:12):
sense. With new construction,builders are building in areas
where there's an undersupply,right, or they're they're trying
to where there's there's highdemand. So those are some of the
things that we choose in themarket. And then we build a team
and, you know, start investingin that area and then track it
over time.
Trent Werner (33:27):
Yeah. And as far as the team that you just
mentioned, I mean, we've alreadytalked about the builders. We've
talked about the local creditunions that you guys have
partnered with. I do wanted toask about insurance and property
management. How are you settingthose up and are you connecting
your investors with insuranceagents and property managers, or
(33:48):
are they having to go out andfind their
Zach Lemaster (33:49):
own? Yeah. Management is set up in place.
We don't do any propertymanagement in house. We did at
one point, but we found thatespecially as we scaled it,
like, you know, we're we'rebetter off, partnering and
vetting air the the teams thatare hyperlocal to that area.
So it's not National PropertyManagement. It's hyperlocal to
that area. People that reallyunderstand the market and are
already excelling at theirbusiness. They need to have at
(34:11):
least 250 doors undermanagement. We go through best
practices.
Sometimes, you know, we're ableto even improve their management
structure with like tenantscreening. We're able to
obviously negotiate lower feestructure, just like with the
builders and the lenders. Samething with property management
and insurance. You know, beingpart of our investor community
at Rent Retirement, you getdiscounted pricing just because
of the sheer volume of business.And so we find property managers
(34:35):
in those areas and they manageproperties.
These are all long term rentals.We do have some short term
rentals, but that's not our maincore competency. We focus on
long term rentals. You don'thave to use these property
managers, but they are there foryou to use and most people do.
And if you wanna fire them orsomething happens in the future,
we have other recommendationsfor you and help you make that
transition.
And same thing with insuranceproviders. We have a diversity
(34:55):
of different insurance providersthat, you can get insurance
quotes from. You don't have touse them, but we've discounted
discounted price points andpremiums for to maximize the
cash flow on the property, youknow, among other things. And I
will say on insurance too,because that's a question that
always comes up, especially whenwe talk about like Florida and
Southeast is people are alwayslike, Well, insurance has gotten
so crazy expensive. In someareas, yes.
(35:17):
Usually it's flood zones orareas that have been remapped as
flood zones. And the homes thatare being hit the hardest are
the old homes, like actually pre1990, a lot of times where
building codes have changed andthen all of a sudden it's like,
you know, those buildings arenot built to stand. Those are
the houses that are having likethe 3x in insurance costs. Our
average insurance cost on abrand new constructed house in
(35:39):
Florida is $9.50 annual premium.And that's because they're built
not in flood zones and they'rebuilt to current standards,
right, current building cone.
They're concrete block homesthat withstand a 150 mile per
hour wind. So insurance is stillrelatively affordable, you know,
if you're not in flood zones andyou have a new construction
house.
Trent Werner (35:59):
Very nice. Well, Zach, I wanna ask you too, rent
to retirement sounds like a nobrainer for someone that is, you
know, earning good income, wantsto get into real estate, wants
to get out of their own backyardand diversify to different
markets. What's your favoritething about your business and
what you're able to do for yourinvestors?
Zach Lemaster (36:19):
I think for us what's fulfilling, because we're
not in this business to makemoney, I mean, admittedly, you
know, probably at some point wereally were, but we've been
successful every single year.I'm passionate about real
estate. I'm passionate abouthelping people accomplish their
goals. And hopefully people cansee that. We have a lot of 5
star reviews online, that, youknow, people talk about the time
(36:40):
we spend with them to help thembuild out the strategy.
But if you remember, I we builtthis business just kinda by
accident in the early years outof our own investing. So I love
real estate. I still enjoyoptometry, but like I said, real
estate, I think you can just domore, right? And You can create
a lifestyle. And I think that'sa lot what a lot of people want
to ultimately do is create alifestyle where and and it does
(37:02):
take work.
Right? Even if you're buyingturnkey, guys, this is like real
estate is real estate. You willhave tenant issues from time to
time. Like, it's not a 100%passive. I don't believe there
truly is anything that is 100%passive.
But what we really enjoy aboutworking in the industry that we
do is how impactful of adifference we can make on
people's lives when we teachthem about the things like the
(37:25):
tax benefits, when we bringthese discounted new
construction deals to people tohelp them build a strategy, and
it's not all perfect, right, itdoes not all work out. It's not
all sunshine and rainbows. Realestate takes work and takes
grit. It's a long term game, butif you stay committed, I believe
it's the most predictable pathto wealth. And I just love the
stories of seeing people whereit's like the brand new investor
(37:48):
that was nervous about gettingstarted or investing out of
state, and they may have been,you know, maybe a little
annoying at first because we hadsome of the conversations.
But they come back a few yearslater, and they're like, hey, we
made a huge impact. And a lot oftimes those people go out and
build out their own real estatebusiness, but we gave them the
foundation to help them getstarted and the confidence to go
out and do something great. Andbeing able to have an impact on
(38:10):
people's lives like that when wehear those stories, like, that's
the self fulfillment and thereward. It's like, I love that.
Same thing in healthcare.
I love helping people see, andand that will change their life
for a better. And I think youcan do the same thing in real
estate. I mean, I truly believethat.
Trent Werner (38:27):
I love it. Where can people hear more from you,
Zach, and connect with you andyour business Rent to
Retirement?
Zach Lemaster (38:34):
We always want to drive people to our website, so
that's Rent to Retirement dotcom, Rent to Retirement dot com.
We have, you know, our podcasts,our YouTube channel, a bunch of
investment calculators, marketdata, even if you just want to
you know, get access to some ofthe lenders that we talked about
because you don't have to gothrough us to use them. You
know, we put out a lot ofinformation available to the
general public. If you'relistening to this audio, you can
(38:55):
text REI to 33777 and set up atime with our team to help you
build out a strategy. We don'tcharge investors anything, we
make our money through buildingand selling houses.
So we spend as much time as weneed with you to help you build
out a strategy. And yeah, checkout the website and all the
content we put out.
Trent Werner (39:12):
We'll make sure we link that, Zac. Thank you so
much for sharing today andjoining our our conversation.
Zach Lemaster (39:17):
Trent, it's been a pleasure. Thanks for having me
on.
Intro speaker (39:20):
Thank you for listening to this episode of the
Real Estate ProfessionalsInvesting Podcast on Wynn, your
community of investing knowledgefor growth. We hope that this
episode has increased yourknowledge and added value to
your path to freedom. If youwould, please take a second to
rate us so that we can get moregreat investors to interview. If
you or someone that you knowwants to be on, please visit
(39:40):
westsideinvestors.com and fillout our form to be on the show.
Thank you again, and enjoy yourday.
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