Episode 31: Real Estate Investing with Lots of Loans — Is It Possible?

Chad Carson is real estate entrepreneur who has worked in real estate investing for 16 years. In this episode, learn how he got started on his entrepreneurial journey, how real estate investing really works, and whether it’s a good idea for your situation.

In today’s episode, you'll find out:

• Chad’s background a college football player
• How he got started in real estate investing
• What Chad’s first rental was like
• What a house hack is
• How REO (real estate owned) property works
• Whether real estate is a good tax shelter
• How depreciation on property affects taxes
• What a 1031 Exchange is
• How many properties to start off with
• The importance of having a CPA (certified public accountant) to help you with real estate taxes
• How using a house hack can help you qualify for a better mortgage loan
• Chad’s view on real estate crowdfunding
• How active of investing real estate really is
• What commercial house hacking is
• Chad’s experience living abroad on his rental property income
• How investing can pay off in the long term

Links mentioned: 

• CoachCarson.com

Like the show? There are several ways you can help!

• Subscribe on Apple Podcasts, Stitcher, Spotify or TuneIn.
• Leave an honest review on Apple Podcasts. 
• Follow on Facebook, Twitter, or LinkedIn

Feeling helpless when it comes to your student loans?

• Try our free student loan calculator
• Check out our refinancing bonuses we negotiated
• Book your custom student loan plan

Episode 31 Transcript

Travis Hornsby [00:00:00]Welcome to another episode of the Student Loan Planner® Podcast. Today, I have my good friend Chad Carson from CoachCarson.com joining us. Chad is a real estate entrepreneur and genius — and is a whole bunch of other things, too. And Chad is actually literally sitting across the table from me right now, which is real exciting. Usually I don't get that lucky. So, Chad, welcome to the show.

Chad Carson [00:00:19] Yeah, it's great to be here, Travis. And you set me up well with the genius comment. I'm not sure I can follow up on that.

Chad’s background a college football player

Travis [00:00:25] Well, I'd like to first start with you bragging a little bit about your athletic career because that's something that a lot of people can relate to — maybe not everybody can relate to being, you know, a bazillionaire and having, you know, all these remote properties. But I think certainly people can relate to college football. So, tell us a little bit about your experience athletically.

Chad [00:00:43] I'm 39 years old now, but my life before adulthood was, I was a football player, an athlete. Got a scholarship to play football at Clemson University. So, go Tigers. At that point, we weren't national champions yet, but we were pretty good. And I played middle linebacker for the football team and started three years there, and it paid for my school. I mean, you talk a lot about student debt, and I feel like the fortunate one in that I had a at a job, basically, that paid for my school. And I was able to get out of college, that part of college, without debt.

Chad [00:01:13] But yeah, it was a really good experience for a lot of reasons. I mean, getting the business and investing — just, like, the mindset of athletics, I think, was very helpful in self-discipline. But it also taught me, like, one of the reasons I got into being an entrepreneur was I was sort of in this — It felt like a corporation, being on a football team, where you're going to meetings, and you always have to be here and be here, like the army or something.

Chad [00:01:34] When I got done, I was like, “You know what?” I was a biology major. Thinking about applying — I'd applied to five med schools. I said, “I'm just going to take a break for a year or two because I need some freedom. I need some time for myself.”.

Chad [00:01:45] And I ended up never going back. It's like that matrix part of the “Matrix” movie, which I love — you know, the two pills. And which pill are you going to take? And I took the freedom/flexibility pill, and I never could go back in that — back the other way that I thought I was going to go.

Travis [00:02:01] Can I ask you how many tackles you had in your career?

Chad [00:02:02] No, I don't remember. But I had a friend who looked it up on the Clemson website and said I still had, like, top five in the history of Clemson or something.

Travis [00:02:10] Why didn't you go to the NFL?

Chad [00:02:15] Well, I tried. The NFL didn't want me. But I didn't try that hard. Like, I went to some combines. I kind of — it just — I had a lot of injuries my senior year. And it's a long road. It's kind of like when anytime you go any professional athletics, you have to kind of stick with it. You have to go the minor leagues. I could have gone to the Canadian Football League.

Chad [00:02:34] And to be honest with you, I always dreamed of playing college football, and I really never had aspirations of going pro. And if it was — If the opportunity was there, I would have taken it. But when it wasn't that easy, I said, “I'm moving on from this and going to something else.”

Travis [00:02:48] OK, so you took the — what's his name? — the Colton (Underwood) “Bachelor” route. Pretty athletic but you go the fame-and-fortune route instead of the professional.

Chad [00:02:55] I guess so. Yeah.

How he got started in real estate investing

Travis [00:02:58] So, you're also very successful in real estate investing. So can you tell us approximately how many properties you own now and when you got started and what your philosophy is on real estate investing?

Chad [00:03:08] Yes. I started right after college when I decided not to go to the NFL and not to go into med school and started from scratch there. I can tell you a little bit more about that, but where we ended up now is, we have a business partner. So he and I own everything 50-50, and we have about 110 units right now. So we've grown to that — you know, acquired a lot of those in the last few years.

Chad [00:03:31] But when I started off, I was just trying to make a living as an entrepreneur. So it's a lot like — You think about inventory in a store. You got to buy low, sell high. You know, Walmart has to do that, or any store has to do that. That's basically what we did. We would go out and find real estate deals and try to find, like, the diamond in the rough. Try to find something we could get below value and either fix it up and resell it. Or, in some cases, we would just, like, sell it wholesale to somebody else, to another investor.

Chad [00:03:56] So wholesale means, instead of, like — it's just a small markup. So the company that sells the products at a store to the store just makes a tiny little markup, and then the store makes the big huge markup. So we would just find the deals, make a few thousand bucks, for example. Or $5,000 bucks. And just quickly turn it. And that's how I made a living for least two or three years.

Chad [00:04:18] So we started doing a little bit more. I got into rental properties, and that's — I see them as two different businesses. Like, the route I went as an entrepreneur in real estate is very, sort of the minority of people who get into that. It's more of a full-time thing. It's basically you making a living doing that.

Chad [00:04:33] And whereas real estate investment is a much broader kind of audience of people who can get into it. You can get into it really small scale doing a few properties. A lot of people I know do that. Or you can do what we've done. We've done it full time and own more units. And kind of get into the management of it and doing that as well.

Travis [00:04:49] OK. And then — A 110 units is, like, so above most people listening right now, in terms of like visualizing that. Right?

Chad [00:04:56] Yeah.

What Chad’s first rental was like

Travis [00:04:56] People could probably visualize one. So, what's an example of your — one of your first rentals that maybe was all you? If there was ever one that was just you. And, kind of, what did that look like?

Chad [00:05:07] Yeah. That's a good question. So, my favorite way to get started is the way I got started with rental properties, was — I was in a college town, and I had a fixer-upper fourplex building, which means it's one roof with four front doors for apartments inside the building. You can also find duplexes and triplexes or houses with basement apartments. They're all kind of similar.

Chad [00:05:27] And so I found this property that needed work and was able to buy it at a good price from the bank. It was a bank foreclosure. And so I bought it. Scrapped some money together to buy that and had to borrow most of the money to do it. But got it fixed up and got the other three units rented out. And then I moved into unit number two, which is the worst unit in the building. And then the other three paid for my mortgage on the property, my taxes, my insurance, even my maintenance.

What a house hack is

Chad [00:05:53] So I was basically living for free in what's called a house hack. That's a big term these days — house hacking. But by me getting started that way, it's really cool because you have to have a place to live. But I was able to move into a rental unit, live there for a few years. When I got married, my wife — we moved in there together as well, and — But then the cool thing is now I still — We still own that building, and so we still rent it out.

Chad [00:06:15] And it's not our residence anymore, but it's a really nice transition from being a residence to reduce your housing payment to being something you can keep longer. And I've seen a lot of people do that.

Chad [00:06:25] You moved with your new wife into the worst unit?

Chad [00:06:28] Yeah. Oh, yeah. She learned early. Like, when I picked her up for the first date, I had this old 1995 Toyota Camry. It was all beat up, and it had, like, “I buy houses” written on the side of it. I asked her later, I was like, “Hey, what did you think about my car?” She's like, “Well, I didn't think you owned the car. I thought you just drove somebody else's company car, and you just worked for somebody else.” I said, “No, I am the company. That's me. That's what we do.”

Travis [00:06:51] That's pretty funny. I lost a date once over taking somebody to Wendy's on a date. So, you know.

Chad [00:06:57] Yes. It's a good filter. I mean, the frugal thing or the entrepreneur thing, if she had gotten up and got out of the car, I would have said, “OK, well, that's cool. You have to go find somebody else.”

Travis [00:07:07] Full disclosure: we're far from perfect here. So, don't worry, I don't take my wife on dates to Wendy's now.

Chad [00:07:14] Yeah, me neither.

Travis [00:07:16] So that's one example. Was this the one with Merry Christmas spray-painted on the front of it?

Chad [00:07:19] It was ugly. Yeah.

Travis [00:07:21] So that's all good. Is this auction, or it was — You said it was a bank foreclosure.

Chad [00:07:25] The bank had just taken it back in foreclosure. And I do a lot of networking in local — in my town, and so I just had another investor who happened to talk to the banker. And they had already taken it back at the foreclosure auction, which, for those that don't know what that means, like, when you get a mortgage on our properties, so you have that debt, with a mortgage, if you don't make your payments, the bank has to go through — it depends on the state — bank goes through a process of taking that property back legally. And in South Carolina, there's a judicial court case that goes.

How REO (real estate owned) property works

Chad [00:07:52] And so it was just — that court case, it just happened. The judge had just given the property to the bank because nobody else bid enough to get it. So we just happened to be at the right place at the right time. But that is a pretty common thing.

Chad [00:08:06] People can look out for this term called REO. That's not REO Speedwagon. It's like — [It] means real estate owned, is the title for it. And so when banks take a property back, they end up putting it on the market, typically with a realtor selling it to somebody else, and that's essentially what I did. I just got in a little bit early.

Travis [00:08:23] This kind of thing sounds like it could work pretty well if you're in a small- [or] medium-sized town, where kind of everybody knows everybody. And, you know, you're not going to have a bunch of hedge fund kind of people in New York that are bidding based off computer models. Right? Like, I'm imagining that doesn't work at all in, like, New York City, where there's — a thousand people showing up for an auction, but it might work great in these small towns.

Chad [00:08:43] Well, here's what — I mean, the hedge fund thing is a phenomenon where, you know, you and I or — I consider myself a small investor, even. People might hear 110 properties, that seems big. But we are mom and pop investors compared to people who own 80,000 properties, like hedge funds. But I think we have competitive advantages as people who are just buying a couple of properties, and one of those is just human-to-human contact.

Chad [00:09:04] And so a hedge fund, yes, can come up with, like, you know, millions or billions of dollars to buy a bunch of stuff. But they can't talk to a person one on one and connect with them any better than you or I can. In fact, we might be able to do that better. And so there's a lot of opportunities to, yes, network in a small- or medium-sized town.

Chad [00:09:21] But even in New York City, like, I think people are people are people, everywhere. And there are some people who are going to say, “I don't care how much money that person has. I'm not going to sell it to them because they're a jerk.” Whereas if you sit down and talk to somebody and you're sincere and you show them what you're trying to do, I've just found that a lot of people are willing to work with you.

Chad [00:09:38] And so that's what the competitive advantage we have to have as small real estate investors. Talk to people. Just connect with people, whether that's the real estate agent, the owner of the property, an attorney who works for that person. That's how you find these opportunities.

Travis [00:09:53] So basically, don't be a jerk.

Chad [00:09:54] Yeah, pretty much. And talk to people.

Travis [00:09:56] Yeah, don't be a jerk and talk to people. So, in terms of tax efficiency, we got a lot of people listening to this that are very concerned with their AGIs, their adjusted gross incomes, because they're trying to get loan payments that are as low as possible because they're going for forgiveness. And any investments that throw off a bunch of taxable income would actually be a bad thing for them.

Whether real estate is a good tax shelter

Travis [00:10:16] And real estate gets plugged a lot, both correctly and incorrectly, by a lot of these folks that are looking for tax shelters. People talk about real estate as the best tax shelter since, like, Cayman Island or something, right? So, how true is that? Is real estate actually a good tax shelter? And what does that mean exactly?

Chad [00:10:35] Yeah. I mean, I think we all know there's no magic silver bullet. Right? I mean, there's always — there's always good and bad. Real estate, in general, is more tax efficient than — Let's compare it to something else. Let's compare it to if you were just to make a loan to somebody, and you may or may not want to do that. But let's say they paid you 6% interest on a loan. When you make that interest, that 6% interest, that's completely exposed the tax. You're going to be taxed at the same rate you would as if you made your job, your salary, wherever you're working.

Chad [00:11:04] And that's not a good thing in terms of tax efficiency. So you would consider that a bad tax investment for investing, unless you invest it somewhere else, like an IRA or 401(k) or something.

Chad [00:11:13] With real estate, I make that same loss and make that same percentage in rent. Let's say I buy a property for a hundred thousand bucks, and I get back a $6,000 — I paid cash for it. Keep it really simple. I get back $6,000 a year in net rental income. Well, it's not exactly like that interest income because of some of the qualities of real estate that make it more tax efficient.

How depreciation on property affects taxes

Chad [00:11:35] So, for example, one thing that you have is that you have something called depreciation. Sometimes that goes over people's heads, what that means. It's a tax term, and, you know, I don't really want to pay attention to that. But essentially what depreciation does is it reduces the amount of that $6,000 bucks, that's exposed the taxes right now. It's called sheltering it. And, I don't know, we can get into details of how that kind of works, if you want to.

Travis [00:11:57] Let's slow down a little bit. So you said $6,000 of rental income is what we're assuming, and say the property is worth a hundred thousand, maybe, to keep it easy? So you've got the $6,000 income, and depreciation means that you can take that $100,000 and reduce the value of it over time. Right?

Chad [00:12:15] Yeah. So, the IRS actually requires you to do this. So, you know, when you buy a property, you spend a hundred thousand bucks on it. But what the IRS says — and rightfully so — like, that building is going to be worn down over time. You know, everything deteriorates. You give it long enough, it's going to turn into dust. And so they have a chart that basically says if you have a residential property, that that property will deteriorate over 27.5 years. You can't expense that property in year one.

Chad [00:12:43] But what they will do is they'll say it's actually not $100,000 because the land is part of that. So you have the land as part of the building actually goes down in value, so you can depreciate the building over 27.5 years and whatever that percentage comes out to. If you have a calculator, we can figure that out.

Travis [00:12:58] Yeah, I pulled it up. So it's about $3,600 if we take $100,000 and divide it by 27.5.

Chad [00:13:03] So, $3,600. So let's go back to our example. We had $6,000 in net rental income. We have $3,600 in depreciation expense. Now we call that an expense, but that money is already — it's not going out of our pocket every single year. That money — We already spent money on the property up front, that $3,600 is what's called a paper expense. The good for you as a real estate investor is that that basically reduces that $6,000 by $3,600 in terms of what you pay taxes on.

Travis [00:13:29] OK. So I'm paying taxes on $2,400.

Chad [00:13:32] Right.

Travis [00:13:33] And the net rental income, that's after — Is that after interest on your mortgage loan?

Chad [00:13:38] So that's assuming we didn't have any interest on our mortgage. So, you know, that simple example. But if you had a mortgage, if you borrowed some of that money, which a lot of people would early on, you would reduce the amount of net rental income you have. So maybe that goes from, you know, maybe let's say you borrowed $50,000 bucks, and you had $200 a month in interest. You had like — Let's say you had $3,000 bucks a year in interest. And so that would reduce that as well. And so you could actually have a loss on the property on paper and not have any taxable income.

Chad [00:14:09] In general, you make more money if you work a full-time job as a professional. You're not going to be able to use that loss that you have on the rental property to offset much of your regular active income, although eventually you will — like, when you sell the property, you can use it. You can carry it forward. But it's not like a real tax strategy to have a big loss on your real estate and be able to save a bunch of money on your medical salary. That's not a — It used to be a thing, but Congress caught up with that and changed the laws back in 1987.

Travis [00:14:38] But you said carry forward. So, like, if I have another rental property that doesn't have a negative loss, I can offset that income with that. Right? And if I have a bunch of ones that have losses now, eventually my rental income, I don't have depreciation for. Right?

Chad [00:14:53] Yes.

Travis [00:14:54] So I don't have any more depreciation, so now I don't get that write off. I have to pay more taxes. We could write off some of that loss from early on, on my income later. So am I hearing that right?

Chad [00:15:03] Yeah, correct. So, it's a passive loss. So, if you have passive income, you can use that passive offset to offset any rental income from another property. Or if you happen to have passive income somewhere else, you can use it offset. So there is some definitely some benefits of that. I think most people perceive it as, “This is where the silver magic silver bullet comes. But I'll make $500,000 a year. I need to buy a bunch of real estate to reduce my taxable income from my medical income.”.

Chad [00:15:30] If it doesn't typically work that way. But what it does is that you — Any investment money, any investment returns you make, are going to be much more efficient and you're going to pay — You can pay a lot less taxes on those, and that's a good thing. That's one of the biggest drags on your investment return, is going to be taxes.

Chad [00:15:47] And so if you can — And real estate is just, like, built for that. It's really built for being — I mean, I would compare it to an IRA or a 401(k) in that way. And I think it's more flexible than those kind of accounts in many ways. I invest in my IRA, my 401(k) as well. But real estate, I really like it because I didn't have a lot of limitations of 59.5 to be able to start withdrawing your money.

Chad [00:16:10] And so if you're in early retirement – early retiree, financial independence kind of person — where you're trying to be flexible and not have to wait until you're 60 years old to retire, real estate is even — it has a lot of benefits in that — in that kind of plan.

Travis [00:16:23] That's great. So I've got this 20 or something years of — I've gotten depreciation for. So now, I basically, I guess, my house is worth zero, right? Or my property's worth on the — or, you know, it's worth zero, and if I sold it, the entire thing would be a gain. Right?

Chad [00:16:38] Yeah. I mean, I just want to make a comment about that. From a tax standpoint, yes, you depreciate your property, and you have no — from the IRS' standpoint — you have no basis. But remember, like, real estate, just reminding everybody, like, many — in most cases, that real estate has increased in value a lot. It's a lot. The land underneath it has gone up in value. And you've probably maintained the property, or at least, I hope you will. And so the property tends to get worth a lot more than that over 20 years.

Chad [00:17:05] But from a tax standpoint, you depreciated your basis in the property, which means those tax benefits kind of go away after 27.5 years.

Travis [00:17:13] So, say I have this big gain. So, let's say that I bought it for $100,000 and depreciated a bunch, and now it's worth $200,000. So. So I would have $200,000-dollar gain if I sold it after all that depreciation. Right?

Chad [00:17:25] Yeah.

Travis [00:17:26] So, there is something that we were talking about lunch today called a 1031 Exchange. And I've got no more depreciation left to go. I've got $200,000 that I'm going to have to pay gains on. What can I do with real estate instead of paying gains on that? You know, is there a way to avoid that?

What a 1031 Exchange is

Chad [00:17:48] Yeah. So, if the risk of losing people with, like, IRS terms again, like, the 1031 Exchange in essence is a way to trade from one property to another property and not pay taxes in the interim. And we all know that's a good thing because remember, tax rates can be a really big drag. If you have a big gain, and you pay a lot of taxes on that gain, you're basically giving that money to the IRS today. You can't use it to go buy something else. So this tool called the 1031 Exchange is part of the IRS code that allows you to do this if you follow the rules. You can go from one property to another property. You can sell property one, you can buy property two and you can use 100% of that money to buy property two.

Chad [00:18:29] That's — The beauty of it, you can do that over and over and over again and never theoretically never pay tax on a property as long as you kept trading and trading and trading. And there are some rules there, you know. Like, you have to buy a property — you have to buy a like kind. So like, you couldn't go buy — Like, I couldn't sell my rental property and go buy shares and a startup corporation or something. You know, there's rules about what kind of exchanging you can do. But look those rules up, you follow them. And I — I personally hire a 1031 intermediary; like, you know, you want a third party to help you.

Travis [00:19:04] Loss security, basically.

Chad [00:19:05] Yeah, a company — Sometimes they're lawyers or CPAs (Certified Public Accountant), but they — They're license is on the line to make sure you do this correct. And so it's worth the money to help you do it. But when you do that, you're saving, like — If you had taxes on a $100,000 gain, that's a really big deal. You're essentially investing with the house's money. You're taking the money you would have paid in taxes and using that to buy the next property. And that will compound and compound and compound over time.

Travis [00:19:30] Can that be a property I already own, or does it have to be a different property?

Chad [00:19:33] It can be a new property.

Travis [00:19:35] A new property. OK.

Chad [00:19:35] And one of the biggest challenges of 1031 Exchanges — they're really good in theory; the challenge is executing it. One of the key rules is that when you sell that property one, you have to replace it with a property within 180 days of that. And you have to identify a property that you might buy or multiple — You can identify, like, 10 properties that you're looking at. It might be less than that, might be four or five properties. And within 45 days. So within 45 days, you've got to say, “This is the property I want to buy.”

Chad [00:20:04] And so that's — That window is kind of a challenge. And so you have to be looking ahead of time. You've really got to know where you're going to be hoping to buy and have some prospects on the line. Because if you don't, then you lose opportunity and you have to pay the tax.

Travis [00:20:17] So what's the benefit of this? It sounds good not to pay taxes. But at the end of the day, I want income from my rental properties, right? Or I want — I guess from rental is probably one income, from speculative stuff.

Chad [00:20:27] I mean the benefit is, over time, real estate, your return on your equity in that real estate goes down because the value is going up. So typically in a lot of like — Just think about California and some areas like that where, you know, prices have just gone crazy running away. You might have a property that used to be worth $400,000; it's now worth a million bucks.

Chad [00:20:45] The rents have not kept up with that. And so you've got all this equity, this kind of debt equity, that's not being used. And so you could trade that million dollars and go buy a property that has a 10% return. And so you might now be able to get $100,000 bucks on your million dollars in equity whereas before you might have been getting $20,000 bucks.

Travis [00:21:04] Wow. So in other words, if you own a California property, like, what if this is your primary residence? What if you have a home in San Francisco that you bought for $300,000 that's worth a million. Can you do this with your own house?

Chad [00:21:16] Well, it's even better with your own house. There's actually another IRS rule that allows you to sell your house. And up to — I think it's half a million dollars for a couple — you have an exemption where you wouldn't pay any tax anyway, as long as you've lived in that house for a couple of years. Two out of the last five years. So that rule is even better than 1031 because you could sell the property, have that $500,000 in gain as a couple or $250,000 as an individual and then you get to put the cash in the bank and not have to buy the property.

Chad [00:21:45] But if you are in that situation where you have a rental property in California and you just want to take that money and kind of invest in something else, a very common strategy is people on the East and West Coast sell that property that's appreciated. Buy something in the interior of the country that has a little bit better cash flow, maybe as a long-distance investor, and then live off of that for income, now that they've kind of cashed in their chips a little bit.

Travis [00:22:07] So really, like, I could sell my million-dollar property in California, and I could buy 10 properties in Vegas, 10 properties in St. Louis, 10 in Detroit. And instead of the risk of one area, I've got multiple areas now, and I've got multiple tenants instead of maybe just one.

Chad [00:22:25] Correct.

Travis [00:22:25] So that's really cool because, you know, I mean, I feel like this is super unfair because I'm a stock and mutual fund investor pretty much only, so I've got all these, you know, investments. And I'm like, golly, I wish I had figured out a way to get tax losses out of stuff so I could get out of this stuff.

Travis [00:22:39] And you know, like, even stuff, like, when I got married, I didn't think I'd be in that high tax bracket one day. And now I am.

Chad [00:22:48] Good problems to have, right?

Travis [00:22:50] You realize you have some investments that you're like, oh, I don't care that I'm paying, like, ordinary tax rates on this stuff, like, in my taxable account. I just like that it has a 5% super-inefficient dividend. You know? And then all of a sudden, you're losing, like, half of it. And you're like, oh, shoot. Like, I'd try and sell it.

Chad [00:23:06] If you sell it, now you have a gain that you'd pay even more tax on that.

Travis [00:23:09] Yeah. I mean, like, I joke with some of our clients— some of these issues of making so much money and having so much debt is kind of a first-world problem. I'm joking about, like, Oh, my poor little self. Like, my 5% dividend, right? Like, check your privilege, Travis. You know? But, yeah. I'm envious that you have all these cool loopholes, and we're envious that you know about them.

Travis [00:23:27] So you coach people on their real estate investing. And you do this kind of partly for — mostly for fun, really, because you — I mean, you make plenty of money on your, you know, your real estate see stuff. But you have a blog, CoachCarson.com, where you have a lot of great courses and a book that I'm going to have you autograph for me later. What's the book called?

Chad [00:23:48] The book is called “Retire Early with Real Estate.” And I'd be happy to autograph it. That's sounds good.

How many properties to start off with

Travis [00:23:52] Yeah. So you can buy it on Amazon. So let's say that you've got a dentist — and I think one of your parents was a dentist, right?

Chad [00:24:00] Yeah. My mom was a dentist for 30-plus years.

Travis [00:24:02] OK. So you've got a dentist, and she really wants to get started with real estate investing because she likes that she can see it. And she's got a little bit of money going away in a tax bomb account for the student loan forgiveness thing. And she's making her payments on her loans, and she has got $400,000 of debt but she's got $200,000 of income. And she can get approved basically because she can use her payment on her loans under these income-driven plans, and they let you make that your payment instead of a $4,000 a month kind of penalty that they're kind of penalizing you with when they're figuring out your — what you qualify for, for your mortgage.

Chad [00:24:35] They do. Yeah.

Travis [00:24:36] Yeah, exactly. So, she qualifies for a mortgage. She's found a place, and she has some options in terms of the properties that — She lives in one right now that's a $2,000-a-month mortgage. What would you suggest for her? What should her long-term game plan be? Like, should she try to start with one? Should she try to go for a multi-unit — like, a fourplex is what they call it, I think? You know, what would be the way you would coach somebody, whether or not they should be aiming for, you know, a couple of properties or 10 or, you know, a hundred, like you?

Chad [00:25:05] Yeah. You know, when somebody first talks to me, sometimes I try to talk people out of it. And I know that sounds a little ironic. But my first question for somebody who's a busy professional, which I know a lot of your audience will be, is real estate the right thing for you? You know, time-wise and hassle-wise because your number one wealth-building tool is your income and your ability to save your income. So let's just put that on the table, right?

Chad [00:25:28] Real estate is just going to be a potential vehicle to invest some of that money, and I think it's a great one. But I think the general strategy, no matter what specific technique you would probably use, I think that you've got to understand that your life is busy, and you got all that stuff going on. So keep your real estate strategy as simple as possible, and it'll be really nice if you could sort of kill two birds with one stone. I don't know if that's a good analogy anymore.

Chad [00:25:51] But you know, you can do two things at once. Like, if you could turn your residence into an investment, if you're willing to do that. I'm not sure— You know, this is kind of like the millionaire next door where they talked about the doctor who lived in the neighborhood that nobody really knew he was that wealthy. And if you're willing to do that for five to 10 years of your life, you can live, like, super high on the hog later on.

Chad [00:26:09] So, I think that's just a good strategy, and house hacking is one way to sort of manifest that in the real estate world. So, instead of you living in the 4,000-square-foot, like, awesome dream house, just put that off. Put it off for five years, 10 years, and live in one or two house hacks. And this could be in a fourplex, like I lived in, if you have them in your town. But very often, that kind of inventory is not around.

Chad [00:26:34] So what you might do is live in a duplex, live on one side of a duplex. Or find a — You know, just a more bread-and-butter-style house that has a basement apartment, has a garage apartment. You know, something where you can generate some income from your property. I like that strategy. Or even if you can't do that, like, just live in a modest house that once you move out of the house, you can keep it as a rental property once you move out.

Travis [00:26:56] So let me see if I understand this. So I have the opportunity, right now we live in this building that's, like, four different units in it. And you're saying that we could live in one of them and buy the fourplex. And I think there's some sort of rule, right? Where the max loan the bank will give you is for a fourplex.

Chad [00:27:16] Correct. Yeah. So the loan universe out there for mortgage loans, the easiest loans to get, the best loans to get, are in the residential mortgage world, which they consider one to four units.

Travis [00:27:26] OK.

Chad [00:27:27] So, as long as you stay with that one to four units, you can get pretty much the same kind of mortgage you could get on any house.

Travis [00:27:32] So a fourplex is the max that I can get a really great, easy-to-qualify-for residential loan. Is that like with even, like, Freddie Mac underwriting?

Chad [00:27:39] Yeah, you can go — The different terms, like, they have Fannie Mae, Freddie Mac or your conventional, what I call conventional loans, where you put 20% down and get the best interest rate possible. That just gives you the most options out there, but there are also some other programs with low down payments, like the FHA loans and some other down-payment programs. Like, even if you didn't have — If you're buying a $400,000 property and you didn't have 20% down, they might have some 5% down and some 3.5% down programs.

Chad [00:28:07] And so especially on that first deal, like, I don't mind. I know that's a lot of leverage, but here you are getting out of debt on your other areas. But you've got to live somewhere, and if you treat your residents like a business, I just think it's a smarter long-term move. And owning your real estate and then — and buying it as if it's an investment gives you flexibility because if you move three years from now, you can keep that and rent it out and have it pay for itself and hire a property manager and not have to do everything yourself.

Travis [00:28:34] Basically just diversification. So house hacking is basically, I live in one of the four fourplexes.

Chad [00:28:39] Correct.

Travis [00:28:39] And I've got three other units. And so maybe I buy the fourplex for, say, $600 grand. And so my mortgage is maybe, like, $3,000 or $4,000 a month, right? So I've got the three other places paying me $1,000 a month, and that almost maybe covers my mortgage. And so I'm building up an asset that's worth $600,000 plus inflation over time, so long as your neighbor doesn't go to — go to junk. Which is possible.

Chad [00:29:05] It's always possible.

Travis [00:29:06] I mean. That's a risk. But, you know, it's a low risk, I think, for most people. So, if it works out, you basically can move out of that, I guess, is what you're saying, too. Like, say you live in that, you know, that unit. Well, I guess you wouldn't sell it. You'd probably just keep renting it, if you have the other three you rented, right?

Chad [00:29:22] Probably just keep renting but you could sell it. You could sell it and do a 1031 Exchange.

Travis [00:29:26] To a new house, like, that you would live in?

Chad [00:29:29] Yeah. You could sell that and use your equity to go buy a house you live in, if you wanted to. I mean.

Travis [00:29:34] And save on taxes?

Chad [00:29:36] So, it gets a little bit a little complicated, but you can save on taxes, yes, because you lived in one out of the four, like, 25% of that property you'd be able to save on taxes because that was your residence.

Travis [00:29:45] Oh.

The importance of having a CPA to help you with real estate taxes

Chad [00:29:45] And all this is stuff, like, I'm kind of giving you what I think the — I read this stuff and I'm a nerd. But, like, you work with your CPA on all this. I use a CPA. Like, I hire a CPA, even though I nerd out on the stuff and read it. It's very important because real estate tax, as much as it is beneficial to you, is one of the most complicated things. Like, I've read articles that go, like, 5,000 words on depreciation and how you recapture it when you sell a property. It gets, like, super-crazy complicated, and it is not for the layman. It's not that fun to read. So you really need to have your CPA look it over with you.

Travis [00:30:18] But it would have to be bad, right? Like, if I have a CPA and I probably can pay him or her a fair price.

Chad [00:30:23] Yeah.

Travis [00:30:23] You know.

Chad [00:30:24] Especially — So, it's a transactional thing. So you have a CPA help you prepare a tax return. Like, I do that, and that might be pretty straightforward most years. And then when you sell a property, before you go sell it, you'll have a consultation with your CPA and say, “All right, what are my implications of me selling this?” And then they'll show you what it's going to be, and you sort of just use them as a tax advisor.

Travis [00:30:42] How much does that cost?

Chad [00:30:43] You know, a couple hundred bucks an hour. Something like that. So, yeah, $300 to $400 bucks for a consult is a good deal when you're talking like $20,000 [or] $30,000 in tax, potentially.

Travis [00:30:54] Yeah, sure. Maybe I need to be scared because that's less than what we charge, at least some of it. Although I would say that we save people a projected average of $50,000 instead of $20,000. So that's me justifying the extra fee.

Chad [00:31:10] The more value, the more it's worth.

Travis [00:31:12] Yeah. But we charge less than the other ones, on the lower-debt cases. So we talked about house hacking a little bit. That's really interesting. I think that would be a really cool way for somebody to get started living this creative, alternative lifestyle that most people don't do. And you can probably find a duplex or a triplex or a fourplex starting out, if you really want to live in a place that you own, that you can hammer whatever you want to into the walls. That seems pretty neat.

How using a house hack can help you qualify for a better mortgage loan

Travis [00:31:37] So that's house hacking, right? Like, there's generally — Is it always, like, a duplex or fourplex? Like, house hacking for an individual residence — like, a single-family home — that's probably not as much of a thing.

Chad [00:31:48] Yeah. There's a little variation on it — I mentioned a little bit — is you can move into a regular house and not rent it to anybody while you live there. But then two years later, when you move out, you can then keep it as a rental property. If you want to get nerdy with it, like, on my website, I go into each of these strategies, and I call that a “live in, then rent.” And it's just a cousin of the house hack. You know, it's for people who [are], like, “I'm not going to live next door to my tenants. Sorry. It's just not going to work for me.” Or, “I can't find a duplex or triplex.” You kind of get the same principle. You're not saving any money while you live there. But two years later, you move out, and now you have a rental property.

Chad [00:32:22] And one of the biggest deals of house hacking and this whole strategy is you're using a residential owner-occupied loan, which has all of those benefits that we talked about. Lower down payment. Better interest rate. Easier to get. If you're a medical professional or a professional with a good income, you probably can get these mortgages. And so you're really benefiting from what you have, which is good income, good credit, and you're taking advantage of it early in your career. And then five, maybe 10 years later, you move on, and now you have two or three rental properties that you can keep.

Chad [00:32:52] And what's really cool, like, I found, is once you start making more income, once you get your debt paid off on your student loans, this is like a ready-made place that you can start putting your extra cash. Like, you have a 5% loan, 6% loan, that's a low-risk way to sort of reduce your risk, increase your income later on down the road. Like, leverage is great early on, but as you're moving towards a lower-risk, long-term kind of profile as an investor, you can pay off some of that debt as well and have a good place to put your money.

Chad’s view on real estate crowdfunding

Travis [00:33:20] So a lot of people that are putting money into real estate — crowdfunding, right now, is really popular. There are a bazillion different companies. We were talking about this little earlier, about whether that's not legit — that's legit or not. What is your view of crowdfunding, in general?

Chad [00:33:34] So let me explain what crowdfunding is because it's a lot of different things. It's basically the movement of — It used to be, like, in the real estate world, it was all, like, in back room. You know, mostly men who had a lot of money. Those are the only people who ever had access to, like, the really good deals where people can pool their money together and buy these big buildings.

Chad [00:33:52] So it's kind of like a back-room thing. Like, the positive part about crowdfunding is it's a more public, internet-based way for you and I and the general public to have access to these big — to a lot of real estate deals. So that's cool. You know, I like that concept. Crowdfunding is cool.

Chad [00:34:08] The challenge I would definitely — Like, the verdict is still out for me. Like, I don't know. Like, I'm playing around with it myself. I'm doing some things, like, where I'm making loans to people. Instead of me making a $100,000 loan, I'm making $25,000 loans — or even more. I'm splitting that money up and making a piece of a bunch of different loans. So, I like the diversification. I'm not just one loan with one property. So those are some positive sides of crowdfunding.

Chad [00:34:36] The challenge, I've found, is that I think real estate — everything we've talked about today is really good for people who like get involved, kind of like an entrepreneur, and you look at the property. And you understand the market, and you get involved in picking a manager or picking the tenant. That's part of the benefit of real estate. It's also one of the challenges of it. It's a bit more entrepreneurial and takes a little bit more time upfront. But I think you can use your intuition and your knowledge of the local market to make a good deal.

Chad [00:35:02] Well, when you go into crowdfunding, like, what competitive advantage do you and I really have buying all these deals? And do we really — Like, there's an information issue. I don't know — even me what I'm looking at it — can I really look at all the information they're giving me in that 150-page packet that their attorney drew up and understand all the risk? Everything that's going on in these startup companies? And so I'm just a little nervous, cautious about kind of jumping in headfirst.

Chad [00:35:28] And as for me, as somebody who's been doing this full time in real estate for 16 years, I get even more nervous when I see people who are, like, busy professionals who say, “Oh, this is a way for me to get in.” And they just put a ton of money in there.

Chad [00:35:40] Like, I think dipping your toe in is cool. Like, try it out. But I'm just not sure. I think you need to be ready to do as much due diligence with crowdfunding as you would on your own deals. And I don't think anybody's doing that. Like, if you know about — everybody's just pressing buttons and investing and think, oh, this is a passive way to do it. And I think that's the caution. You've got to treat it like a business, even though it seems really passive.

Travis [00:36:03] One thing that was really fun for me to learn about when I was a bond trader is liquidity matters. And what liquidity is, is how easy it is to get your money out of something. So a bank is super liquid. I can get my money out tomorrow. Mutual funds are also super liquid because I don't — I can't guarantee you the price of what it's going to be, but I'm 100% positive that I can get my money out by selling it. And whatever the stated public value is, I can get it in day's notice, basically, if I sell it.

Travis [00:36:29] So the thing that's concerning for me with crowdfunding — I actually had one of the crowdfunding companies that was kind of early on my blogging career where I was an affiliate of theirs, and I saw something in their site that said, “We beat the S&P, you know, by, like, 10% last year. Did you?” And I was so turned off by that I just sent him an email and said, “I don't want to be an affiliate anymore.” And they're like, “Why.” And I pointed out that marketing, and they're like, “Oh. Well, we don't think it's that bad.” And I thought — I felt like sending him a response like, “I pulled money out of the S&P in a bear market, you know, to pay for something last year. Did you?”.

Travis [00:37:08] You know, like, if any of these crowdfunding things hit a 2008-type crisis — because all this stuff got passed in 2012 — this stuff could all blew up, and people couldn't get their money out. They'd have to take huge discounts to the value. So we'll see. I think crowdfunding might be OK to put maybe 10% of your portfolio in, but I think it's a lot more fun — Like, I think the people listening to this: you're either really interested in this stuff and you're either, like, listening to Chad with, like, you know, your ears really perked up. And you're like, “Wow, 1031. I can't wait to go learn about that.” You know? Or you're like, “Whoa, not for me.”. I just — I want to know about it so I can know about stuff, like, to not do but that's kind of the way I look at it is, you know, either get involved in it and make it a significant kind of third leg of your financial independence, like, journey. Or just rely on other things, which is totally fine.

How active of investing real estate really is

Travis [00:37:55] So, in terms of, like, how active this has to be, that's maybe a big misconception. So property managers, you hire one. You pay them 10% of the rent. They take the call in the middle of the night from your tenants. What's the true cost of that, and how passive can you be with your own properties?

Chad [00:38:11] So, real estate, I always tell people, is it starts off like a startup. Like, you know, you're starting up a business, and it takes a bunch of time. You've got to learn. You've got to build your team. And so, even if you're a full-time professional, you probably need to set aside at least 10 to 20 hours a week to work on this early on because there's a learning curve, and there's a momentum that has to be picked up. But over time, long run, it doesn't always have to be that way.

Chad [00:38:35] So for me, I was full time: Buying properties, looking at stuff. But then a few years ago, my wife and I and two kids went to Ecuador, and I basically spent, like, sometimes a half hour, sometimes two hours a week paying some bills and doing some bookkeeping. And sometimes I didn't have to do that.

Chad [00:38:51] So it can become very passive when you have property managers doing your day-to-day rental management. There are systems for that. You can certainly hire people. You can certainly create spreadsheets and tasks lists that other people do, and you can just kind of manage the manager and watch what's happening. So that's a very realistic thing.

Chad [00:39:11] But I think that early, kind of getting over the hump of that early stage, is what most people will get stuck on. As long as you know that, like, “All right, for the next year or two, I'm get this thing going. I got to have some time to be able to put into this. And once I get over that hump, great. I'm good.” And I think if you go into that open-eyed, you know what you're getting into.

What commercial house hacking is

Travis [00:39:28] That's really interesting. So one idea that I've never heard before. You talked about commercial house hacking. What, like you put, like, a billboard on the side of your house or something for, you know, “Enjoy Coca-Cola,” and they pay you? I don't know. So, commercial house hacking, you know, this is really interesting, and this applies to a lot of the people in this podcast that listen that might want to own their own practice — dental practice, veterinary practice, medical practice or something or law practice one day. And a lot of times, some of the deals involve owning the real estate for that building or complex, whatever. So what is commercial house hacking?

Chad [00:40:04] I think we just — Maybe somebody made that up before. But you and I were just, like, brainstorming and kind of made that up as we went. But one reason I know about it is my mother was a dentist, and my father was an entrepreneur. And so they actually owned the building where my mom had her practice. She had a partner in her dental practice. And so that dental practice was one entity. It rented the building — It rented that space in the building from my mom and dad, who owned the whole building. But it wasn't a whole space. Like, they had other space in the building that they rented out as well. And so essentially, what my mom did as a dentist, was took a kind of fixed cost that you always have, which is your rent on your building, and made money from that by also becoming the owner of the building.

Chad [00:40:47] So that's essentially what I would call commercial house hacking. It's similar to what we talked about earlier with the residential house hack. You know, why get into a house and just throw your money away and make this huge mortgage payment when you could produce income property by renting out the extra space? That's essentially what this is.

Chad [00:41:04] So whether you're — If you're an attorney, why not rent out extra office space to other attorneys? Like, create — Instead of having — You know, if you're going to buy a building, you know, have the space for your attorney office and then rent out the rest the space to other attorneys. Or buy a strip center, where you have, like, five retail places. You rent out one and rent out the other four to somebody else.

Chad [00:41:23] And here's the benefit of this: When you go to a bank to do a commercial loan to buy this property, just like in the residential world, the kind of risk levels. And the lowest-risk loan, when you talk to a banker in the commercial world, is an owner-occupant business. So, a business can just kind of move into that property because they have a lot to lose. You know, they're putting their billboard up there. They're putting their sign in front there. They're sticking their reputation on that. The chances of them leaving when things go bad are much lower than just me coming in and just buying a building just because it's a pure investment.

Chad [00:41:56] So for that reason, you'll probably have better loan terms, probably be easier to get a loan. And what you're essentially doing is making money in two different ways from your same practice that you already have.

Travis [00:42:09] That's really interesting. So, in other words, you can pay down — have other people, other businesses pay down your loan that you have on this building that might be pretty valuable. And then you could also control who's next to you, for your real estate. And so instead of having some really bizarre set up — or, like, another dentist, right? That shows up right next to you. You can kind of control who you rent to.

Chad [00:42:33] Exactly. So, it's kind of going the vertical with your business. So you're — You have a dental practice. You have an attorney practice. You're going to keep growing that. But you're getting into real estate investing with what you know. I think if I had to summarize a lot of what this whole conversation is about for me, it's like going back to the Warren Buffett philosophy of you invest in things that you know and you understand.

Chad [00:42:54] So what do you know and understand? You know and understand what the location of a good dental practice is. You know that because you are a dentist or you are an attorney or you are a veterinarian. And so I think that's the smart play. I don't — Anytime somebody gets you into an exotic, weird investment that you don't understand, just don't do it. There's no reason to. There's always a way to make money close to home. If you don't have any way to make money close to home, just go put it in the whole market and buy an index. And that's really my approach. It's either, you know, like really, really micro; really, really local. Invest locally. Invest in what you know. Or the entire market. One of those two. That's probably the best route to go.

Chad’s experience living abroad on his rental property income

Travis [00:43:36] Just to show the point of all this, is making work optional and living life on your own terms. Lowering your stress. Doing the things that excite you and what you want to do. So, with all this rental income and all this rental activity, you did something that's super weird and, you know, compared to most people's definitions of what a normal life is. So you lived how long, where?

Chad [00:43:58] So my wife and I always had a dream of going and living abroad. So, even — We had two kids, a six- and eight-year-old daughters now. But in 2017, in January of 2017, we moved, and we rented our home back in Clemson, South Carolina for a couple of years. And we moved to Ecuador, to a place called Cuenca, Ecuador. And the reason was — it wasn't, like, big, huge reasons, but we are — We want to make our — We want our daughters to become fluent in Spanish. My wife teaches Spanish. Foreign languages are sort of a hobby for me. It's kind of fun to learn as a challenge.

Chad [00:44:30] And so just that uprooting ourselves, living in another culture, getting to meet new people there, our kids went to elementary school and pre-school every single day. So they're, you know, just kind of threw them in the deep end of the pool. They had to learn Spanish or sink. You know? And they did that great. They learned it.

Chad [00:44:44] They even, by about — It wasn't overnight, but about six months in, they would come home, and we'd be speaking Spanish at the dinner table. And I had a head start on them, of course. But they would listen to my Spanish, and they would kind of wrinkle their nose. And then they'd point their finger at me and wag their finger and say, “Papa, no se dice esto.” And they would correct my Spanish, you know, six months speaking. And I loved it. It was like, this is really awesome. My little kids are coming home and correcting my Spanish.

Travis [00:45:10] That's pretty epic. And that's when I think [one of] the first times that I realized how legit you were is when you did that. Because I think a lot of people can be like, “Oh, we'll say passive income is so easy.” And then you get home and there's, like, 35 calls from tenants, and, like, you know, all these bills and utilities that are busted at one of them. The basement is flooded.

Travis [00:45:29] But you're literally living half a world away from where all your investments are. And you had processes and stuff in place where it was literally automated for the most part, where it took up very little of your time. It enabled you to do something that most people couldn't do. You know.

How investing can pay off in the long term

Chad [00:45:45] It was fun. It definitely takes a lot of work, and it kind of goes back to my conversation about real estate. There's nothing easy under the sun that's worthwhile. But, if you can pay your dues upfront with something like real estate and you can get good properties and you just hang on, like, most of the good stuff in real estate happens, like, 10 years later.

Chad [00:46:02] So that's kind of like all of finances. If you're willing to defer a little bit of work and effort and savings, 10 to 15 years from now, you could have things like an early retirement or a mini retirement. We've taken some of those, where you just take off for six months and have your investments support that flexibility.

Chad [00:46:20] To me, that's really what it's all about. That's why I wrote that book, “Retire Early with Real Estate,” because the idea is, you know, money is cool; it's a fun thing that —You and I are nerds. Like, we like spreadsheets. We just do this for fun. But most of us, we have these other things we want to do in our lives.

Chad [00:46:35] Maybe it's spending time with our kids. Maybe it's travel. Maybe it's a nonprofit that really matters to you, but it makes zero money. But that doesn't matter. It's important. I'm really passionate about that. Like that's — How can we make money so that we can free up all of our time to do that kind of stuff, whatever that is? Because we need — That's what we need. We have so many people that are just grinding away at jobs all the time, making more money and more money, more money. And that's cool, you know. We all like our work, right? But do we like it enough to be spending that many hours doing that many things for our entire lives?

Chad [00:47:07] Maybe. I think I'd call people's bluff on that. I think there are some other things that we have to do. And maybe it's both. You know, maybe it's we work for some. We take a break. We work some more. And so that's — I think that's what this is all about. That's — When you get down to all the X's and O's, the spreadsheets, the paying off debt, investing your money, is having this thing, this idea, this destination that we're trying to go to that makes it all worthwhile.

Travis [00:47:32] Of course the all-American linebacker brought in X's and O's. Had to drop that in there. So, football play analogy, right?

Chad [00:47:39] If they could see me talking, I was, like, acting like I was drawing on a whiteboard, too. Like, I was about to knock this microphone over five or six times.

Travis [00:47:47] That's a great branding exercise because you can find Chad at CoachCarson.com because he loves teaching people about real estate. And not in the, “We're only going to have you in St. Louis for 24 hours. You got to show up and pay a thousand dollars for this useless seminar” kind of thing either. It's, like, legit, very methodical, very dispassionate, not super, like, promise the moon, kind of like a lot of this stuff is. Where can people find out more, if they want to learn more about you and your business?

Chad [00:48:14] Well, my online home is CoachCarson.com. And I would encourage people, you know, if you're interested in real estate, just learning more about it. I have a free toolkit at my site, and it has a lot of practical stuff. Like, I have a closing checklist, like, if you were going to go buy a property. This is the checklist I've used for the last — and built — for the last 16 years. You know, make sure you don't forget this. Do this before closing. Make sure you talk to your title insurance agent about this. So it's just — There's some tools like that: a closing checklist, all my formulas that I use when I'm analyzing deals and just some free education and things that you get as part of that toolkit.

Chad [00:48:46] And then every week, I stay in touch with people on my Tuesday newsletter, so it's my way of just updating people on what I'm up to. Here's the deal I'm working on. Here's behind the scenes. And if you get a CoacCarson.com forward slash newsletter, that's where you can get that toolkit and stay in touch with me that way.

Travis [00:49:01] That's great. And, of course, because people that are hearing this are listening to podcasts, you also have a podcast, right?

Chad [00:49:07] I do. I've got to start talking about my podcast more. So the Coach Carson podcast is something I'm doing every week. And I started in 2019. And it's a conversation about some of these same topics. I talk about financial independence and how to use real estate to do that. I'm going to start doing some interviews and hopefully get Travis on the show before long, if I can talk him into that.

Chad [00:49:27] But a lot of that's just me, you know, acting like I'm drawing on a whiteboard. Teaching you what I know and sharing what I can. And just helping you, whether it's you buying one property or you buying 50 properties. I just want to help you make some progress and help you make it simple. Real estate can seem complicated sometimes. People are incentivized to make it complicated. But in reality, there are some simple things that I try to just break down and give to you that you can go apply and make some money.

Travis [00:49:54] Thanks for being on the show.

Chad [00:49:56] Thanks, Travis.