Fire Fighter to Real Estate Pro | The Housing Crash w/ Peter McKenzie [Rincon Property Management]

from firefighter to a landlord with

multi-millions of dollars in Revenue

operating a property management business

and many different horizontal and

vertically integrated businesses this is

a video that you want to watch if you

want to see how to go from W2 job to

becoming an investor and an entrepreneur

but also if you're interested in where

to make money in real estate here's how

Peter is figuring out how to make more

money with real estate let's go welcome

back to another episode of the meet

Kevin show today we have Peter of rencon

property management here now what's

amazing with Peter's story is that and I

want you to tell the story but let's

just put it this way you went from fire

captain to the best property manager

I've ever seen in the world and you're a

real estate investor and you're a father

of three you got to fill fill fill in

here how did this all start because it's

really inspiring it's really

amazing wow yeah I don't feel like I I

live up to all that but um

so I'll give you the quick version so we

can talk about some other stuff but so

worked for the fire

department figured out quickly that like

you know I needed to have an alternate

income Source passive income real estate

just because you hit sort of a ceiling

of of like what you could make even

working hour time ranking I think it had

more to do with like I've always been

kind of a serial entrepreneur okay and

working for the government was

a little challenging right for from the

perspective of I like to do my own thing

and control versus bureaucracy yeah and

and you know when you're young and

you're like oh the fire department be a

firefighter that'd be super cool and and

it was and it was a great job but

eventually like the the entrepreneur

side of me was like okay this is

interesting fun I don't know if I want

to be here for 30 years doing this type

of a thing so a captain yeah yeah yeah

over yeah I did which I mean I don't

knock the fire department it's a great

job great career great bunch of people

but just ultimately didn't suit where I

was going so personality wise like you

had to have that that entrepreneurial

Outlet exactly yeah and you were doing

both for a while you started your

entrepreneurial side hustles while you

were at the fire dep oh absolutely yeah

yeah so the the first thing I did was I

started investing in real estate out of

state real estate oh where' you

buy Nashville

Toledo a little town called Bonner

Springs in Kansas wow and then a a

little town in Texas called new Browns

and how was that I made a ton of

mistakes yeah so no no it was good I got

to hear about these I mean I I wouldn't

change it for for a minute but I'll back

two steps up the reason that I so I

initially bought a house here in Ventura

a new house over at off telephone okay

in addition to my house that I was in

cuz um it was pre2 2007 right and it was

like oh you can't go wrong here

interesting bought the house rented it

out to a friend um

which is how I figured out I didn't like

property management companies because I

was you know trying to with them and

they're terrible ex

yours

anyway just by luck so sold it literally

right before the crash and the reason

that I sold it was my wife was a teacher

we were having our first baby and I

didn't want her to have to work I wanted

her to be able to stay home and raise

the kids so I'm like well okay this

isn't going to work I can't I need to

create an alternate income Source if

this is going to work so that's why I

sold the house in Ventura leveraged it

overleveraged it into I think 10 or 11

units um in multiple markets which was a

mistake for sure oh my God in the hopes

that I would produce cash flow to to to

keep her at home or start to go down

that Journey well it was all good until

the Great Recession hit which literally

like as I was closing these properties

like the market was turning and uh def I

held on I didn't like go bankrupt or or

lose it all but I mean it stopped me

from like my forward progress because I

was hanging on on the whole way down

versus buying more like I compare it to

another firefighter I know who started

real estate investing right after the

Great Recession wow and he never stopped

and he's he also has since left the fire

department early but he has you know a

ton of units and just a difference in

timing and then that's not why he was

successful and why I wasn't but just two

different scenarios and so anyway long

story short that's what got me into real

estate if was it useful to have that

firefighter salary that W2 to buy your

real estate so absolutely it I mean well

and then having the firefighter salary

and starting a business is an incredible

opportunity because I literally started

a business that I did not rely on at all

like whether it made money lost money it

didn't matter wow cuz I had my I My

Lifestyle was set up on my firefighter

salary so it was all house money

essentially right and any deal you

closed so to speak was just bonus money

at your new business which is great

because I feel like sometimes you work

with real estate agents and that's their

only income and maybe they're newer or

they're having a hard time or whatever

but you can almost sometimes feel when

there's like blood in the water it's

like I need I I need to close this deal

and when I feel like when you get into

that mindset it's really hard to

actually close deals like other people

notice like desperation they on you yes

where when you're in that situation you

described I wonder if that actually not

only makes it less stressful for you to

actually start a side Hustle but to

actually probably makes it easier for

you to succeed in that side hustle well

it was a competitive Advantage other

people didn't have the luxury I had

which is they needed to make money they

maybe were desperate maybe they needed

to close those deals where I didn't and

then I it allowed me also to like go

undercut the market like I started the

management company vastly priced way

below my compe editors which in

hindsight I don't think was the best

idea but it is what it is but I was able

to do that only because I didn't need to

make money in the beginning right which

is not normal like that's not how most

businesses start or are you know small

entrepreneurial Hustler type businesses

so yeah no kidding you're usually trying

to get every penny together just to

survive of the business just to pay rent

or mortgage or whatever so that so yeah

that was in

200 12 or 14 that's when you started

your management business when I started

the management business real estate

sales

I didn't know anything about I mean I

was young and dumb and had no idea

really what like I don't know like I

don't have a good answer do you think in

hindsight you would have gone sales and

management maybe or just or you like

management so part of the strategy with

management only was to entice Realtors

to refer to their clients to us this did

that work yes and no this is a hotly

debated thing in the property management

industry like you should have sales you

shouldn't have sales it depends on where

your clients are coming from I think

I think if I had to do it all over again

I probably would have done sales sooner

and and sales is possibly on the horizon

in the future I just currently don't do

it now we have referral partners and

like if I go start selling I'm basically

going to blow up those relationships

kind of right which there's a risk of

that at least yeah or the yeah if you

don't delicately like maneuver the best

way I mean you know you were in the

business people property management

companies steal listings from Realtors

well of course I mean the seller just by

default is dealing with the manager all

the time and so when they need to sell

the first thing is when's that lease up

yeah oh why are you asking oh thinking

about selling well yeah exactly exactly

why don't I help you with that yeah yeah

yeah I mean that's but then then you

wonder uh is that is that also

strategically a you know a 10x Revenue

opportunity I don't know so the argument

in the industry is you're foolish for

not selling so you can still keep your

integrity and protect your referral

relationship don't take those listings

but you're giving up so much money yeah

by not selling sure because I mean if if

you make you know 150 bucks a month on

on a property uh for property management

you've got to manage the thing for like

10 to 15 years to compare to a

commission check yeah and then I mean we

there're still we get a referral fee but

it's not the same so then I was

negotiating like better referral fees

that I could pull off which was helping

yeah um so I guess it it depends it's

just the reality is is like where are

you going to focus your efforts in your

business you can't do it all yeah you

have and then you just like laser focus

on something tell tell you wire it and

then go to the next thing and the next

thing and oh that's an interesting

phrase until you wire it so do you feel

like you've wired your property

management business so the property

management business I don't want to say

runs completely on its own but I almost

feel like I'm not needed there most of

the time right so like we have a

leadership team we have how many people

we have now 13 yeah 13 13 and half of

them are remote how many properties you

managing coming up on 400 wow I

remember back when it was you and one

person in that old office yeah in that

little closet office that we had yeah I

mean it was like 80 square feet yeah

literally that's amazing though my

closet was bigger that because that's

actually so cool like that's that's so

inspiring because it's like here working

at fire department you're starting start

small uh hire one person you you grew to

13 people in 400 properties yeah and so

I mean my other strategy is well let me

back to your question the management

company is dialed there's workflows and

Automation and processes and AI a little

bit we have sales marketing we have all

the functions of a business and it

pretty much runs like a top like doesn't

mean there's not problems occasionally

for sure are but it doesn't take all my

attention my strategy now it I'm

basically vertically integrating all the

other businesses that surround Property

Management so what else two years ago we

started a Contracting Company no which I

know you had a rough rough go with no

okay you have to tell me about this yeah

so it's called quick turn maintenance

it's a license licensed contractor uh we

have two uh on staff handyman

technicians and then we sub out the

stuff that we don't do is this for your

property management correct are you

doing remodels for other people not

currently okay yeah that's that's the

danger spot yeah so so we so the

contracting business survives on our

portfolio that we already managed ESS we

are the only customer of the Contra

that's great that is actually a very

delicious style of like Contracting

because now you can do you could have uh

the correct workers's comp you could

have the correct insurances the general

liability insurances you could pull the

permits when you need them you could do

the work you need to do finding great

handy folks that's hard so having that

is a good Edge yeah and they I mean it's

all about control right construction

people are they're difficult it's a

different breed of people as you know um

so that so we're doing that and it's

funny you say that because like we've

again for like the first two years

worked out our systems and processes

made sure we had it all kind of figured

out yeah I am anticipating turning

around and facing the public yes not

like Joe homeowner who wants to call to

have his toilet fixed but more like

other property management companies or

our realtor referral partners that we

potentially could do some work for so

you're shaking your head let's hear it

let's hear it let's hear it if you're

going to go do in my opinion the the

like oh we'll do this remodel for you

you got to go expensive so we're not

cheap we're actually really expensive

yeah but I don't think then you're going

to get like the Realtors and the

maintenance people who want to hire you

oh gotcha yeah that would be the the

risk there because you know how it is

with Realtors if it's not done today

they're pissed at you and that that's

that's almost more risky for brand in my

opinion could be wrong here but I think

if you can if you you know have a you

know sort of a briefcase contract thing

where where you become this hey well

we'll do your $80,000 kitchen and

bathroom remodel there's so much extra

margin in there that you could sub stuff

out a lot of stuff you could sub it out

have your people fill in or coordinate

the job that's where you can make extra

money going toing uh you know the

maintenance for the realtor that makes

me nervous you mean like little like

here's the two three item punch list and

it needs to be done in two hours is that

what you're like yeah I mean I guess I

guess are you trying to create it as a

loss leader to get them to use you for

property management no no no

so couple things when we say we're not

doing like like if you called and said

hey I want a brand new kitchen we would

say no right because right now you're

maintenance right we're doing rental

well even if we were facing the public

I'm not going to like build houses or

additions or major remodels we're doing

rental flips right we're doing floors

paint countertops light fixtures pling

fixtures the easy the stuff that you

preach about on your YouTube channel

back in the day that's all we're doing

so I'm not getting out of like I don't

want to step outside of that cuz I don't

know that like I'm not an expert in that

I'll I'll get eaten for lunch for sure

if I go against some contractor that

does full remodels every day like no

interest in that we're going to do

basically what we do on our properties

okay for other landlords and rent and

and management companies I wonder if you

can make money in that these people are

so fussy I would be just very cautious

that's all I would say because the it's

it's so amazing because on one hand when

when you do a rental renovation for one

of your landlords and you're like look

it was a hoarder house it was a disaster

you know horrible tenant or whatever

they come to you they're like I need a

professional to do this and then you go

do the rental grade renovation and then

they go in it's like oh my gosh the

transformation it was this inexpensive

this is great uh that I think is such a

wonderful thing when they're your

clients and you have the full control

you're making all the

decisions what drove me nuts was as soon

as it went from I'm making the decisions

to somebody else's like well I think the

rental needs brass hardware instead and

it's my rental and I'm managing it right

that that was the hard part I have to

we'll have to figure that out because we

hav come across a lot of that cuz we're

mainly just taking care of our own right

now but yes and that is great like I'm

so happy to hear that you have your own

control control and construction

fantastic controls everything oh my gosh

even I mean we I do I am doing the

construction stuff to make a profit but

there are plenty of people who in the

industry who don't they just do it to

control the process and they break even

on it and they're happy with that are

are you are you positive on it right

yeah yeah oh that's great yeah I mean

we're not making a ton of money like we

we have a lot of room for impr 10 bucks

an hour on on the guys that you're

hiring now you have a a part you have a

this subsidiary business that basically

makes all of your other management

business way easier like your job inten

intensity just plummeted this is why why

we have you know in-house uh uh

Contracting uh for contractors as well

because you can't do it without having I

feel like some people on payroll that

could just go do that one freaking light

fixture and I need it done today you

know it's hard to have leverage over

these Subs if you're not like especially

if you don't give them a ton of work

like our main Subs I feel like we have

leverage over but push comes to shove I

can't tell them what to do our own

internal people totally different that's

and and if you can get that for free

because basically you're you're charging

a you a small premium for the the people

that are you know essentially your your

clients your landlord clients that's

fantastic it's better for them it lets

you keep your management cost more

effective it it runs the business witho

it I love that yeah it's a good idea so

that so that that's two years old I'm

rolling out another company so basically

I'm using the the management company has

like this economic engine and we love

this the best part about I would say

this owning real estate is is number one

if you can own the real estate that's

the best thing okay the second best

thing is controlling the real estate

right yes I love this so the management

company essentially controls all the

properties we manage of course we pick

what vendors go there we pick what

insurance the tenants get we pick all

the things we control so oh you pick the

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with credit card debit card a whatever

is most convenient for you we have a

master renters policy a master policy So

in theory we can't like make them take

it but probably 80% of them take it cuz

we Master renters policy oh tell me

about that so we actually it's wrapped

up in this what we call a resident

benefit package which is I've seen you

sell that yeah which is like a sweet of

stuff but everyone no one every landlord

says the same thing you can't live in my

property without renters insurance right

that's like sure com like

base I don't know what I'm trying to say

but it's it's like everybody reques bare

minimum yeah the reality is though

people will buy the policy to move in CU

they know they have to and landlord kind

of comp it could cancel the policy no

one knows not whatever so we that's bad

that's bad for the landlord bad for the

management company here's my

certification cancel at the next month

yeah so and the and most of the policies

that they're buying are garbage so we

have a master renters policy that

actually has better coverage so I think

our like uh personal property coverage

is $30,000 which uh anyway long story

short we control the process if you say

heyy I don't want your master policy I'm

going to use my own we go great and this

is all done by a third party by the way

you here's the here's the email that you

have to send your policy to you need to

add this these people as uh additional

interest and that this company basically

does all the compliance so anytime

somebody drops their policy we're

notified and we automatically enroll

them in the master policy and that's how

we keep our people we had keep our our

clients protected how much Dr off do you

see when people have their own is it

just all the time people are chopping

out of compliance basically no well now

that they know we're monitoring it I

would say it doesn't happen that often

but prior to that you have no way of

knowing we had a we had a a structure

fire in a house which thank back when I

was at the fire department thankfully I

wasn't working because it would have

been in our area which would have been

really weird for that would be a little

awkward I manage this property guys a

little faster

please anyway uh structure fire they had

a candle they burned up the like the

living living room the kitchen like

pretty serious is always candles not at

most a lot of the time candles are food

on the stove fireplaces food on the

stove they just forget it's cooking

forget it or they're like deep frying

something and they don't it overflows

and starts a fire and they can't figure

out how to put it out but anyway we burn

these tents burned up this house and uh

they we had the renters insurance and

most renters insurance policies come

with like a $100,000 liability portion

of it that protects the landlord right

so basically the that it was it was

under $100,000 but the owner didn't

wasn't out of pocket anything didn't

have to pay deductible nothing they got

a brand new house and they got a brand

new house so see isn't that great is the

insurance great it is when it pay when

they pay for sure they got a lot of pay

with relationship I mean everybody does

like when they pay it's like phenomenal

like I had a I had a sewer backed up and

it like it it it basically I mean we had

to completely gut a bathroom and and

replace the sewer under the bathroom and

basically redo the entire bathroom that

was just remodeled uh but the because

the sewer backed up and caused drywall

damage they covered everything so I got

a brand spanking new bathroom and the

sewer repair for like two grand

deductible well I mean a perfect example

is all those homes we burned down in

Thomas fire like oh my gosh gor as long

as nobody

died that was possibly the best thing

that could have ever happened to those I

don't think any homeowner died there was

one which is horrible there's a

firefighter killed the firefighter uh

Iverson out in Filmore and that wasn't

in a house that was out in it was out in

the woods yeah yeah yeah yeah so but

other than that all of those folks I

mean some were woefully underinsured but

these are like Mansions now they came

out ahead they absolutely came out ahead

czy for sure anyway I do want your

opinion so yeah yeah back to this

insurance well we can move off that

unless you want to keep talking about

that oh your property your structure

here yeah so we got quick maintenance

we've got resident benefit package what

else is in that oh the benefit package

yeah doesn't that have like filter

changes too it does yeah we'll ship the

filters does that no so that's that's

run by a third party another third party

well so the third party like manages

that Resident benefit package for us

essentially oh the whole package almost

why you do it I did originally really

and uh we could they could do it better

no way and we make more having them do

it can you shout that company out second

nature second nature yeah look up they

only work with professional property

management companies but they manage

these resident benefit package

essentially it's a suite of services

that it's like a concierge for tenants

so that whole thing like we take care of

our tenants we treat them really well

this is right in line with that like

there's a concierge utility transfer

service that they call one number and it

transfers all their utilities like this

company will chase down all the nonsense

when it comes to that there's that's

such a hassle rewards for like paying

your rent on time there's you know will

more options for movein like if you want

to move in with a lock box at 7 o' at

night on a Saturday we can make that

happen for you like things like that W

anyway back to this model the next

company that I'm currently in the

process of spinning off is a cleaning

company which obviously cleaning very

unsexy you have a cleaning company right

now so it's and you're going to spin it

off it's a DBA of my Contracting Company

currently but the the goal is eventually

to spin it off and have it independent

so it's cleaning our properties which is

like the EAS that's nothing exciting

about that but where I'm what I'm doing

with it is and this is where I'm

interested in your opinion yeah is

getting into the short term space yeah

so I mean knew where this was going

every every cleaner wants to do Airbnb

cleanings right because it's obvious

it's there's a lot of them they happen

over and over it's repeat the guests pay

the bill I feel like the best type of of

uh cleaning gig is not that gig where

they call you once a year and it's like

to clean it's like I'll be here for five

minutes on this one spot you know like

the best kind of clean is you're there

every week or twice a week and it's like

clean yes so that's but that's not the

that's in my mind not where the

opportunity is

so what what is a professional

short-term management company charge oh

my gosh 30 40% okay a lot right yeah

this is called it 30% and if you're out

of the area oh 50 yeah well I mean if

you're out of the area you don't really

have a choice like you either you either

married to your phone and having to

chase down all these vendors job it's a

job people forget that short-term

rentals are the job you know I see like

on social media it's so common people

are like oh I make $200,000 from social

media for from uh short-term rentals

it's like okay we working 90 hours a

week being the concierge yeah so if you

don't want a job but you still want to

have a short-term rental you have to put

a management company in place who's

going to take 30 or 40% of the revenue

right what I am going to do is bundle up

the services we already do handyman

inspections cleanings you have an

inspection service that hand part of

hand part of what we already do uh

and make this into a subscription model

model and Market it to short-term rental

owners so I'm going to allow them to

fire their management company oh you

evil bastard

so so they can fire their management

company they can it's 100 bucks a month

and that doesn't come with it that just

belongs to our little conglomerate of

services that we're going to offer you

you still pay for the cleaning you still

pay for the maintenance all the stuff

for $100 a month you have one point of

contact which is my company we do all of

the boots on the ground so you can live

wherever you live and have your

short-term rental on the beach fire your

management company then the only thing

you have to do is manage the guest

experience which there's a ton of

software that makes that a lot easier

interesting so what do you favorites as

far as the softwares I don't I don't

actually have any not at this point got

it that's fine that's fine it's a

developing idea okay well so no I mean

I'm I'm probably about a month away from

rolling this out to short-term people I

already the cleaning company already is

cleaning properties how many people do

you have in your cleaning biz none so

the yeah I mean other than the people on

my team already there's no like I don't

even have a full-time cleaner employee

but it's okay I have all these Subs that

do Allan it out for now for now people

that we have relationships with already

at the at the management company right

so I'm literally rebundling Services we

already provide exactly and offering it

to it's not going to for every

short-term rental owner but the ones

that have a real like be in their Bonnet

about paying 40% of their money to a

management company who then the

management company does a terrible job

of course yeah who they can then solely

focus on making that guest experience

good getting the reviews all the things

that you got to do own you're removing

all the pain is what you're doing well a

lot of the pain they they could deal

with the customers is what you're saying

but you're going to deal with the

cleaning the maintenance and and the

property basic the the hard stuff if

you're not in it in it yeah oh that's

really interesting uh how what are you

seeing are you still seeing people buy

short-term rentals it seems like things

have slowed down no no no I feel like

short-term rentals are they're they're

in trouble not trouble but they're not

the same as they were no no it's not

2021 anymore yeah in fact um I talking

to someone the other day the city of

Ventura is starting to enforce some of

their short-term rental regulations like

they they've had the law for I don't

know how many years they never enfor

they never enforce it well they're

starting to enforce it which darn

yeah which is you know going to hurt

some people more than likely um because

there's a lot of people who are doing

them illegally are they going to sell I

don't know so we're we're targeting

those people who potentially are going

to go okay yeah this ain't worth it I'll

rent it out long term so that's an

opportunity for the management company

but yeah it's not like it was and you're

probably I've seen some of your stuff

you're you're more in tune to that than

well I mean who knows right the the end

of it all it it seems like uh as I'm

traveling around I'm seeing a lot of

listings come up I mean this could just

be based on just what I'm seeing but

there are a lot of people who are like

why are they selling oh uh shortterm

rentals got banned out here yeah you

know you're seeing these listings come

on the market I'm like oh that's not

good well I actually have a story so we

were in C Idaho year or two ago I was

just there like a month and a half ago

oh really so my wife fell in love with

the area and my one of my good friends

one of my good friends has like a second

house there so we're we're all in on the

area on the lake or they have like the

little Rivers they're on Post Falls

close to the Spokane River um which is

the town right next to corane yep she

falls in love She's like I want to be

here we need that's closer to Washington

we need a place here like I'm like okay

yeah this sounds interesting like start

looking around oh I mean it's a

destination for that area right like

okay I'll let's buy a place and when

we're not using it we'll short-term R

out people come over from Spokane and

even just vacation yeah and uh so I

start you know get on air DNA start

doing all my due diligence research like

expensive man I'm like this is

something's not right here like I can

make this thing work tomorrow like it

would even cash flow with us using it

part of the time

no so I'm

like okay all right let's start making

some some lowball offers right cuz I

mean Idaho is like you it's where

everybody went during the during now

it's where everybody's leaving so like

I'm like we'll start lowballing these

people see what happens so got one offer

got an offer accepted and I'm like okay

all right I let's I'll keep doing some

research like I'm like why did they

accept my offer anyway yeah I know D

it's so funny you just said that that

line right there is so a real a real

estate professional when you write an

offer and then they take it you're like

I overpaid or something's wrong right

wait a minute I was not supposed to get

that anyway so I start digging in more

because honestly I didn't expect it to

happen so fast right start digging in

more end up connecting with this lady

who owns a property a short-term proper

short-term management company I go hey I

just want your gut opinion here this is

what I'm doing this is what all the data

is telling me it doesn't seem right

right she

goes it's coid data it hasn't flushed

through the system she goes take what

you're seeing cut it in half and that's

what your real experience is going to be

and right then I was like okay enough

said so then she gave me the background

like which is to your point preco there

was like 350 short-term rentals in that

whole area blew up to like 1,200 dur

fourx now nobody wants to go there

anymore because everywhere's open but

prior to that no one was open and people

were flocking to Idaho and all the red

States right

so it needs the supply and demand thing

needs to shake out so I pulled out of

escro and I go we're going to sit back

and wait and see what happens now now as

I'm monitoring it there's all kinds of

TurnKey short-term rentals that are

available for sale and these people are

just getting hammered cuz there's too

many of them and people aren't coming

well and what's interesting is this

sounds crazy maybe but I think it'll

it'll sound right on to you maybe but a

turnkey short-term rental that we have

on Airbnb or that people put on Airbnb

and then you go visit it is not like in

usually a sailable condition I found

that a lot of these are really like they

photograph really well but they're

really crusty oh they're janky and a

bunch of wear and tear and yeah yeah I

agree completely so like I feel like you

almost have to I don't want to say re

renovate but like go in and renovate

some of the renovated short-term rentals

to make them

sailable yeah I mean and then you're

depends on like who you're catering to

like if like there you got some of these

that look like uh you know there's every

square inch has something there and

they're like not modern and they're like

look like you're grandma that too did

that so I don't know anyway but you guys

are looking at that area or with the

house hacking so we've we've done so

much traveling over this year and I mean

from from East Coast West Coast we we've

been everywhere and uh the one place

that I was most nervous about uh was

Oregon followed by Idaho because those

markets were falling this summer while

all the other markets were still booming

so you go to Oregon and everything's

like that looks like it should be a good

deal the comps are here you know this

one's for sale for here that should be a

good deal but that just kept happening

so we we we never ended up even writing

offers because we we saw this this

whereas you go to uh you know San Diego

Ventura County even parts of NorCal some

of the anti-id markets you're still

seeing multiple offers and you're seeing

comps that are volatile but they're

still way up from where they were and

they're not trending down uh heavily at

least I mean now we're seeing a little

bit of a softening in the market I want

to see your opinion too but we're seeing

some softening now where it's not like

it was in June or July but the prices

right now are still a little bit higher

than where they were at the end of last

year so where that's not true in Idaho

and Oregon so I got really nervous about

those two particular markets uh Boise

postfalls even to some extent I saw it a

little bit in Washington but not as bad

as Oregon Oregon was was rough but then

I went to Austin Texas and Austin was

booming in the spring now everyone's

panicking so it's it's a weird time what

do you think what do we what do you

think so I don't have any expertise on

the sales side I definitely am pretty

tight end on the rental side in our area

like what are your seller or your owner

saying how do they feel people are

nervous there's a lot of uncertainty

right so we saw pretty pretty

significant softening of the rental

market end of August okay which a lot of

people would say oh school's going back

it happens every year seasonal for sure

it does but this was more severe yeah

worse um my personal opinion is all the

co money cycled through the markets

people aren't as excited about renting

for whatever price they can rent for um

people are you know families potentially

are Contracting like moving with parents

versus the opposite of what was

happening right right um there's

unknowns with the economy like most

people aren't experts in the economy and

have the crystal ball they're just like

I don't know what's happening nervous

I'm not doing anything I'm not going

anywhere so we saw a pretty significant

increase in days on market and then we

started seeing uh rent prices move in

concessions those types of things coming

down and see how do you handle this when

you're comping rentals and the comps are

you know doing one to two months free

rent yeah how how do you comp this

because sometimes that doesn't actually

show up in the remarks but you know

what's happening or it shows up in the

remarks but you do a rental survey in a

market like Phoenix is like famous for

this I mean I I look at the Phoenix

market and I'm like oh starting in

January they're starting to do one two

months rental concessions and I'm like

okay well then a $2,400 a month property

is realistically like 2,000 a month but

you do a rental survey and you just do

the class I hate it I ask agents I'm

like oh send me the coms I look at it

they just send me the on liners like the

on line of each and then it's see the

average rent is400 I'm like come on this

is like let's get the actual

data right then you look at the data

it's like rental concession rental

concession rental how do you comp I mean

do are you just comping against the

stuff you're renting and what you're

feeling no so I don't I would say I

don't have the analytical talent that

you have but we we comp on our local

market knowledge we absolutely look at

what the other properties are doing but

really there's a certain amount of um

feel to it right like and the

conversations we have with our clients

have changed completely it's no longer

you know Co you could take a picture of

the dirt and put any price you want on

it and it would rent in two days that's

not the case like you have to price them

correctly and the problem in our Market

is you have a lot of self-managing

owners who don't understand what's

happening and they'll put their property

up for $5,000 a month when it's really

3,000 but our clients go look at this

house it's $5,000 a month and it's not

renting knowing that there's no way in

hell it's going to rent so it's

definitely changing

um yeah it's softening and mean if it's

changing if it's softening more than it

was you know in Prior years at some

point those lower rents have to

translate to lower prices but we haven't

really seen this massive correction in

pricing what's your take I mean that's a

million-dollar question right like you

figure that out um yeah no kidding I

don't know I mean people say it's not

enough Supply I don't but there aren't

buyers either you know like you know

what I'm hearing a lot of right now and

I want to see if you're hearing this in

management I'm hearing a lot of agents

and it makes me nervous when they all

say this but they're all saying relist

in

Spring okay great well what happens when

everybody says I'm going to wait until

the spring MH well now you have a surge

of inventory everybody's going to be

rushing the prices are going to do pric

is going to have to come down because if

rates are still very high in the spring

but all of a sudden inventory you know

we go from 120 homes on the market in

bentura to let's say you know 2011 style

was 400 homes that's a problem yeah for

sure I mean who knows who knows you know

I mean we Market to or you know one of

our marketing streams is targeted at

Realtors half of them AR half that's

maybe an exaggeration a lot of them

don't exist anymore they're already

falling off wow leaving the business

leaving the business I mean I don't know

how you could if that's how you support

your family and the the sales aren't

there like what are you going to do you

got to go do something so the some of

the people that are in our database were

taken out cu they're no longer in the

business so wow any anyhow that's scary

what else what else house hacking oh

yeah so you are going to have this is

yet another side of your business so

this is just part of the management

company not not a new business guess

yeah a new feature of the existing uh so

traditional house hacking not to be

confused with house hack.com

uh traditional house hacking you are

going to help owners rent out other

parts of their homes this sounds like a

nightmare yes

so yeah so one of the things we believe

in our in at rencon is like everyone

deserves the opportunity to be

financially free right okay so we found

that that wasn't actually true like in

as you know the ventur market very well

like we don't have a lot of people

running around buying properties that

cash flow and buying you know multiple

propert this isn't Cleveland Ohio or you

know Kansas City Missouri right this is

a high dollar market we don't have a lot

of

those intentional investors around no

you buy like one or two like that's

already a lot yeah yeah

so the whole financial freedom for our

clients in our world was pretty much

reserved for people that already had

assets or bought properties a long time

ago it wasn't really translating to

younger generation coming up who are

interested a lot of your course members

people who are trying to figure this

stuff out right so that didn't sit well

with us we're like uh okay this is our

why but it's only our why for like the

top 20% of Ventura right so that's kind

of that's kind of BS what can we do well

obviously everybody knows the best way

to buy a house in a market like ours is

if you're willing to be uncomfortable

and house hack well the problem is a lot

of people don't like to take action or

they're fearful of tenants and managing

or or financing all the things that you

got to do to do that there's a lot of

fear wrapped up in so we were like we

can help these people manage these house

hacks it's not that difficult the number

one thing is it's a management nightmare

you got a bunch of tenants in a in a

property it's going to be difficult

they're going to fight they're going to

have issues oh well because you had that

with I'm imagining I I should let you

mention but you said you bought units in

Nashville Toledo water spraying how was

managing units it's it's probably a it's

more work yeah and I wasn't

self-managing just for the record oh

that's right that's where you hated

managers yeah got it oh okay okay that

end locally um okay so anyway the the TR

the reason why no professional

management company wants to do this is

because it's they're afraid of of the

tenant interactions and having up all

these things right well our business is

very organized very process

driven I'm not afraid of that yeah even

if we brought on another remote worker

whose job was to make sure these tenants

were happy and deal with the

issues that's fine the reality is though

this is happening with a management

company or not right like there are

plenty of people who house hack in

Ventura already who do it just fine like

is it a little more work sure but with

more work is more reward right like if

we can get more people to do it then

that's a win for us and not to mention

we have a new client we have you know

all those things that go along with that

but the the part that gets weird for us

is when we're going to owner occupy

manage a house hack so the owner buys

the house doesn't want to get involved

in like renting out all the rooms and

dealing with all the stuff around that

we step in now we're in a spot where we

have a client who's also kind of a

tenant so it took us a while to work

through that with the attorneys and the

management contracts and to get it all

buttoned up but we're we're there we're

we are rolling it out as we speak so

we'll see kind of how it goes how do you

make money on that I mean if you rent

out a room for 1,200

bucks you you take you know 10% I guess

I guess there's 100 bucks say if you

took 10 well I mean the reality well

let's just say you're three-bedroom two

bath house like for 3,000 bucks we make

our management fee on it well we rent it

out by the room just just solely Renning

it out by the room we're going to make

more you you know 1,500 bucks for the

master 11,00 bucks per this is assuming

there's no owner in it I got assuming

there's no owner in it yeah yeah yeah

that's true you will always make more

dividing it up right so that's one

aspect of it the other aspect of it is

my contracting company is going to get

involved in creating more rooms oh no

so so we have a formal living room

formal dining room or a loft or

something I mean I just did that because

we got all these kids coming we're like

well we turned the former dining room

into an office then we're looking we got

twins coming we're like do we want to

move how about the formal family room we

just turned that into another room we're

like but there's a fireplace that

connects through the other side box it

in well what's funny is I did this in my

own house when we had our third kid I

turned the form of living room into the

CR the the nursery right exact so now

I'm looking that noise away man looking

at my own house which I'm not going to

do this but if I moved out and wanted to

do the strategy I'm talking about it

would produce like over $6,000 in R oh

it's insane so just taking a

three-bedroom two bath and turning into

four-bedroom two bath I can now rent

that out for Mid fives okay so I I'm I'm

very interest there's more cash flow for

the client is why it's enticing for them

that's true and if they make more money

you get to make more money whether it's

you should be charging I should let you

answer this a higher percentage so if

it's owner occupied we're charging our

standard if it's non-owner occupied we

are charging more see you should because

it's more work oh of course it is so

when the owner's there they can assist

with showings and they're the point of

contact for maintenance and some of the

management duties they're essentially

assisting with just because of the fact

that they're there this is really

interesting

because you're going into this

environment of that coid money being exp

or expiring

evaporating and by and rents gone up you

know 30 40% over the last four or five

years by going into house hacking

traditional sense of house hacking where

you're renting out the individual

rooms I don't think you're ever going to

have a shortage anytime soon of tenants

no there's more demand yeah cuz it's the

ENT the entry point is lower oh my gosh

so we're charging premiums too because

we're providing cleaning service we're

providing Wi-Fi we're wait wait wait

wait what you're providing cleaning

service for the individual rooms no for

the common areas which is just us coming

into the prop cu the fear of the of our

clients is that's a lot of people living

in there they're going to destroy that

house yeah yeah our comeback is we're

actually going to be in this house way

more than we are in our long-term

rentals because we're providing twice a

month common area cleanings so our

cleaner is in there taking a look

around things like that so that we're

kind of using as a hedge against the

some of the concerns with the strategy

but in the end with softening rental

market and we have a client who bought

their house in the last couple of years

and they're going to be negative if they

rent it out this has the potential to

push them over the edge because if we

can show them hey we can get you 20 to

40% more rent with this strategy that

might be enough for them to hang on to

it versus sell it so I feel like it's a

win-win um we're excited about it I

actually 100% agree that demand for this

cohort of tenant is going to Skyrocket

because I I think there's still and we

know this I mean there's fact around

this too but I think people still have

this this higher feeling of net worth

because of all this the coid spending

but it's tapering you know whether it's

the market or it's just spending or

whatever and the I think there's a very

good chance you end up seeing way more

people going back into these shared

living environments compared to renting

their own property just because

everything around us has gotten so much

more expensive even if inflation goes to

zero today things are still 30 to 40%

more expensive than they were in 2019 so

so now you have more demand for these

properties uh you can help owners make

more money because they're going to make

more money renting out the rooms the

question is the management intensity but

you're actually solving for the

management intensity by basically living

there yourself with your your vendors

right your vendors are there because

you're sending in your cleaning service

twice a week once a week twice a month I

think is what twice a month okay so your

cleaning service is going in every two

weeks uh then you know who knows a handy

person or whatever comes in once a month

so you have three site visits

potentially a month on average is what I

would guess maybe even four three to

four site visits a month uh and how do

you how are you going to handle this

potential screening like how do you how

do you go and say oh I need a 700 credit

score on somebody who's renting a room

like do you lower your standard what

happens yeah so right now we we have a

sliding scale of what our requirements

are based on the rent price so if you

rent a $6,000 house your credit and all

your things have to be better than if

you're renting a $2,000 studio right so

it could be something similar along

those lines what's your suspicion like

are you just going to kill credit no I

mean we'll have a standard but my it

will be lower okay for sure so the

reality is too is well go ahead I'll let

you finish this L 500 no no no

no our lowest right now absolute lowest

is 640 okay oh that's like FHA yeah I

could see maybe a little bit lower than

that or something I Haven I haven't like

worked all there are two there are you

heard of padit uhuh padsplit is a a

venture backed company that's doing this

in other Market not in our Market but

their argument is they I don't know if

they disregard credit completely but

it's less of a factor in their criteria

and they have like I think a 97%

collection rate or something I don't

know how accurate their data is but the

argument is made that it doesn't matter

as much not to mention with the

political environment we have in

California yeah I wouldn't be surprised

if credit score as a requirement goes

away completely um hopefully we that

doesn't happen but it wouldn't surprise

me it would create certainly some more

challenges I wonder if if because what

I'm seeing in some of the markets where

they've gotten rid of credit scores is

they still allow you to run a credit

report which that's actually what I care

about more is I want to see the history

are you paying your freaking phone bill

you know stuff like I want I want to see

that payment history but if they

completely disallow that I guess what

you'd have to do then is

send me your last 12 uh statements for

your uh phone bills and stuff like that

you know the other piece of this that's

good for the client is we now have a

single family house that is that is

performing more like a multif family

unit yes so you're not going to have the

turnover where you don't collect rent

for a month and you have $5,000 to get

it ready to rent that's not going to

happen because not everybody's going to

move out at the same time you're going

to have one turnover which the worst

case scenario out of a room is you

replace the carpet and paint the walls

right like not anything compared to you

have to do that for the whole house so

it's going to stabilize the cash flow

for the client which do you think you'll

have more

evictions I don't know yeah that I think

as long as we follow our screening

criteria that we're going to be in good

shape like I mean if I look at our

eviction record right now in the in the

last 10 years people we've evicted

because people that we've placed right I

think four that's nothing so we've

evicted many more people but they're

people that bring problems to us yeah

and that's not your our record yeah so I

mean like I've never had a an eviction

on any tenant that we've ever placed but

my first real estate deal ever first

deal ever here's six units 309 East

Thompson Boulevard uh please don't evict

us the fair is coming up and everybody

loves the fair those people had every

excuse Under the Sun not to get evicted

and they were so toxic for for that

entire building I couldn't sell that

building for 11 months cuz of them yeah

so oh evictions suck man it makes the

whole building smell it sucks literally

too in that case ah anyway so this is

really interesting so have okay have

have you done this room renting before

no we're rolling it out so we've had

I've had are you scared I mean this is

no not at all really I've analyzed this

every which way from Sunday I've worked

with our attorneys I've talked to

there's this is very similar to student

housing it's not is basically what it is

it's not that much different and I have

a colleague or two that do that do

student housing on a regular basis

intense what do you mean colleague other

management company owners in other areas

yeah so I Network pretty well with

people like me across the country okay

so basically the people because I've

posted this in some of the groups I

belong and gotten a lot of hate you're

out of your mind it's going to be too

hard and then the people that come to me

like behind the scenes are like yeah

don't worry about any of that I'll show

you how I do do it it's not that big of

a deal so the way our software set up

the what's that it's a moat when other

people are like that's too hard don't do

it which is an opportunity it's an

opportunity it's insulation for you yes

you're right it's too hard you know it's

kind of like you're right California

sucks do not move to Ventura it's a

horrible place to live and like this

place is freaking a yeah oh that's

interesting okay uh so wow that is

really interesting so so you're not like

the Eminem So I'm not afraid you're

you're you're just gonna go all I mean

there's going to be challenges for sure

what do your attorney say about this is

it legal to just chop them up so there

are some regulations well when you say

chop them up what do you mean like add

more rooms yes but only with permits

right they have to fire C like there has

to be a window there has to be an exit

all those things like we're not talking

about doing this without permits I'm not

going that but I mean if you just pull

up a wall and there's already a window

do you really need a permit so the

reason I want the permit is for a couple

things one just the C but two I want the

public record to change so if this owner

our client in the future refinances

sells reappraises it now instead of a

three-bedroom it's a four-bedroom but

you're not getting paid at all for that

work that you're doing that like oh no

we absolutely are getting paid the the

to pull the permit well my Contracting

Company yeah we we line item everything

I guess I guess my like I'm I'm just

thinking a try have you pulled any

permits yet for your clients yeah well

for the Contracting side sure okay okay

how do you deal with the uh you know oh

here comes the inspector and you're

pulling an inspection for you know smoke

detectors carbon monoxide uh bedroom

ceiling fan and there's the egress right

now we put the door in we put the non

non-bearing retaining the wall in

whatever how do you deal with the

inspector hm new windows we'll need a

permit for that oh look at that new

water heater we'll get one for that oh

you guys have an addition here from the'

70s you know I don't see that on the the

record here let's get a how do you deal

with that I mean I will say this this

happened to us on our last project what

are you going to get to

man it wasn't a big deal it was you got

to tear down additions sometimes yeah

well in this case it was the the the

inspector was didn't have it figured out

because he's like yeah that's not

permanent I looked send my people over

to the office hey this is what they said

the person behind the desk oh actually

that was pered in 1955 here's the permit

you got lucky on that one got lucky on

that one but you're going to get sent to

that office all the time there there's

risk here and like if if we well one I

don't actually manage properties if

there's like known unpermitted

structures no that makes sense but I'm

I'm thinking like do you need a permit

for a a a non-load bearing

wall I don't think You' do but if you're

going to put like electrical in or yeah

you put a new outlet on there or

whatever and that's not an expensive

permit I guess what you're saying is

look if you have like if you have a 2002

home home with no funky additions what

are you afraid of like pull the permit

it's it's going to be like 80 bucks for

an electrical permit in the drywall and

the W big deal and it's a cya for the

owner and for us like I don't want to

get involved in renting out something

that's unpermitted if for some reason it

was required right but the regulation

that does apply here is the cities have

certain rules against like boarding

houses which is what some of them look

at this as okay so tell us for example

Camario doesn't allow boarding houses so

in theory we shouldn't be doing this in

camaria which you know I don't

anticipate having an issue but there are

some cities that expressly prohibit this

in their codes which are Antiquated and

but that's a whole another conversation

and those might loosen a lot in this

sort of uh environment that we're we're

uh in where affordability is a big issue

a huge issue oh yeah that's really

fascinating so okay and I guess that

makes sense because you don't want even

insurance issues in the future either uh

with

for me it's like a liability like you

did you did unpermitted work on my

property and now XYZ happen this is your

fault yeah and a lot of rental

renovation stuff doesn't require permits

like I I've I've gone to the city before

I'm like look we're just replacing the

ceiling fans and life fixtures and the

faucets in the same location they're

like don't even bother yeah which

technically via the book are you

supposed to maybe but when the people at

the counter or or the inspectors are

like don't worry about it uh that's

great but uh but that is you're right I

mean really how hard is it to permit

stringing up a

wall if we're and and we're not and if

if we see a house that's like obviously

had 15 additions to it since the 1905 or

whatever probably not going to recommend

that strategy to them or we're going to

have the conversation like this is the

risk here yes are you comfortable doing

this because interesting anyhow so uh

where else have you seen these what

other room rental restrictions have you

seen so as far as when we were doing our

our research that boarding house thing

is the main one that was it yeah the the

city of Oxnard which isn't necessarily

against rent by the room their rent

control just cause measure is by the

door that's rented So in theory these

for sure going to be covered under their

rent control law yeah but those are not

that hard because like like that's

usually like what they're trying to

protect against is a homeowner moving in

and trying to like remodel the whole

building it's not going to stop strategy

just just a consideration but as far as

people saying no you can't do this the

only one I'm aware of is these boarding

house regulations that's really

interesting okay okay yeah and and I

mean that's easy to find out you just

walk into the city restrictions we

already we talk to every city in Ventura

County and any City you invest in you

should go talk to the city even just to

shake their hands it's a great idea okay

wow that's really interesting um wow uh

I never thought that a property manager

would desire to do what you just said

but the problem with this is you're not

just any property manager you're like

the property manager I respect and like

love and admire so like I'm like this is

this is like a mind twist like I I'm

going to have to tell I'm going to tell

Lauren about this she's like what they

got to

Peter well the reality is most manager

companies suck right lack of a better

term that's why we're like

what and I have my own theory on why

they suck but yeah well tell us about

that so our the business is structured

in a way that breeds apathy so like yeah

you come to me you go hey I want you to

rent my house out okay okay I'll rent

your house out I control the money I

control when I get paid the only

recourse you have against Me Is You can

fire me or you can like file a complaint

with a Dr that's it so if I have 2,000

properties that I control when I get

paid I don't really care if you fire me

or you you're unhappy because I have

19990 way other that that do it's

backwards if it flipped and it was like

you as the client have to pay me each

month and I have to invoice you it would

change the industry completely because

all of a sudden I would have to really

work hard for you to pay me and you

wouldn't pay me if I did a terrible job

or I screwed up a maintenance thing or I

overcharged you or let your tenants not

renew their lease or made whatever it is

right that that's I think one of the

reasons it's so bad the other reason is

property management at scale is

incredibly it's simple yet complex yeah

because if you manage one property on

your own Easy you could do that in your

sleep you manage a thousand the exact

same way you need process you need

structure you need people you need

technology you need all of those things

and that is where a lot of people get

into trouble like because most property

management companies were born from

realtors in the sales world who are who

kept getting asked by their clients hey

manage my property manage my property

and then all of a sudden they find

themselves with a portfolio they don't

care about property management they're

viewing it as a lost leader to keep

those clients in essence though they

have a train wreck dumpster fire going

on in this management company that every

that has a terrible reputation that's

where most management companies across

the country came from so there are like

a new breed of people who are looking at

it differently who I consider myself one

of those people who are treating it like

a business who I don't come from selling

real estate like I don't come from any

of that so I don't come with some of

those preconceived ideas the other one

being you're you are a a real estate

salesperson you get paid your commission

check one time that's it that's not how

property management works that's how

everybody feels about it I charge one

fee I charge my management fee that's my

commission and I do everything else as a

result of that there's no other service

industry that does that like try to go

talk to your attorney and see if he'll

charge you one thing and do everything

else for you go talk to your CPA go all

of them Nobody Does that if you have me

working for you I'm charging you usually

by the hour property management is not

like that that's really interesting uh

so you went from fighting fires and

houses to fighting fires and

houses honestly I the the business is

it's Pleasant it's not as bad oh come on

it's not and I'll say this too we don't

have tenants beating our door down angry

at us does it happen occasionally sure

but like go you go look at our reviews

half of them are from tenants who are

happy with us C I know that's amazing

just kill it because I we treat them

well like they're no different they

they're people they need a good place

need or question or it's not that hard

they're a customer we take care of them

and honestly I do that because it's the

right thing to do but the other reason

we do it is because it's in the best

interest of our client well of course

because a happy tenant takes care of the

property pays the rent all the things

that our clients want the tenant getting

evicted you know walks around with a

hammer

yeah so uh that okay practically how are

you divvying up uh these these rooms are

you uh are you putting in like garage

doors with dead bolts between each room

no so we're putting smart locks on the

on the the entrance and exit doors so we

can change the code uh as soon as

somebody moves out or whatever right and

like can you do these remotely hopefully

so if once we take the property on we

change out the hardware on the entrances

and the exits right and then we are the

rooms are going to be keyed which in our

traditional management we don't key

rooms that's a disaster but not the case

in this so they'll be keyed so like a

regular key handle lock or deadbolt lock

I don't know that we've gotten that

detailed TBD okay yeah um but we what do

you

suspect I would suspect just a handle

but I don't know we'll see what we'll

see what the ten want solid Corridor or

Hollow I think I would be more

comfortable with a solid core door but I

we have we didn't anticipate changing

all the doors out either honestly I

don't think like if you go rent a room I

don't think that people are putting

solid core doors on them yeah yeah yeah

with a threshold and a lock you know but

I mean something to consider but um the

turnovers on these things I think are

going to be relatively easy cuz we're

not inspecting the common areas we're

not doing the only thing we're over

there doing is looking in the room maybe

paint carpet yeah are you doing carpet

change the lock I hate carpet and rs but

but are you going do it in these well I

mean it depends ultimately it's what's

in the property and when we change

floors I almost always try to lvp or

something so that makes sense Yeah well

yeah okay wow this is really interesting

uh wow this is I have to say when you

first said it I hated it the idea like

an hour and 12 minutes ago as I'm

grabbing my cup of coffee and and you

said oh by the way I got to tell you

about this idea I'm like oh no oh no but

now I'm kind of like wow well here's the

other thing the biggest argument against

it is the tenant management heads we

manage 400 we manage hundreds of tenants

already that we already are dealing with

the same headaches right you could argue

you're gonna have denser properties but

we're already dealing with tenant

headaches and frankly we're good at it

it's not that big of a deal that's

fascinating yeah because

now wow uh like you say it's more cash

flow it's a higher rate that you're

charging it's more money that the client

is making it uh is economically the

perfect time to be doing this because

like during Co everybody wanted their

own place it would be a horrible time to

do it now it's like everybody's like

okay Co whatever like I need to save

money I need to survive

wow and so common Wi-Fi so the reason

we're going to charge a little bit above

market rate rents um all utilities

included I don't want to do that I don't

want to include the utilities I want to

do a flat rate for the utilities we also

have the opportunity to do that ratio

Utility Billing System but I see that

being like an administrative nightmare

for us oh that's a headache how do you

account for that but flat flat fee like

hey for you know $50 a month includes

all the utilities we do the cleaning

Wi-Fi we the kitchen will be like

stocked with the Basic Essentials

there'll be Furniture in the common

areas so there's a little bit of upfront

cost for the client kind of like an in

between shortterm and

long-term thing but uh I think if if you

came to me and presented this to me I

would do it a

heartbeat the main reason is the the

hard people that are going to have the

hardest time with this are the people

that are emotionally connected to their

properties the people who are like no

this is no different than a stock in my

41 1K I just want it to produce a return

they're going to say yes to this all day

long it's the people that are

emotionally connected that are going to

be the ones that struggle with well you

know Johnny grew up in that room and if

they put a hole in the wall it's going

to be a problem you know type of where

is this going to succeed the most does

this succeed the most in like SoCal or

do you just do it in every Market or

would you do this in Texas and Ohio well

one I don't have any point of reference

for that stuff I only where we're at

yeah true but I will say there's two

companies that do this pad split and

home room and they do it all over the

this is I was reading something on one

of their websites this exact objection

and they're like no it's basically wors

in every market we've ever been in wow

so I mean if you think about it there's

young people that want to move out of

their house and it's all they can afford

and they go rent a room somewhere I mean

my nieces did it it it's super common

this is amazing what am I missing I

don't think you're missing anything what

you're missing is helping promote the

house hack Meetup because we're trying

to get the word out okay uh it's last

Thursday every other month so November

30th at topa toopa at 6 o'clock the one

on uh null Drive see I got I got to put

this on the calendar yeah if you show up

oh that'd be awesome you could help us

bring some more people in uh hold on

this is November 30th okay okay

nothing's on the calender right now o uh

okay this is the topa topa Brewery yep

on null drive because they they have I

think two in Ventura okay and this will

be the uh uh Peters Ria is it yours or

partner with it or like who who runs it

no we do so yeah ring yeah we call it

the house hack Co-op wow and it's only

we've only had I think three and it's

pretty small and what time six o'clock

is this uh so is this where like all the

landlords get together with and smoke

cigars no yeah no no and who we're

targeting are the people people who are

having a hard time buying a house cuz

it's expensive and educating them on an

alternate way on how they can get it

done do you know that I I well I'm

pretty sure of this I think FHA is now

or Fanny one of them maybe both are now

including borders income I did not know

qualifying oh really borders income oh

here it is this is exactly what we're

talking about right exactly uh borders

income Fanny May listen to this this is

crazy so oh there's a PDF guide last

updated at October 4th how lucky are we

uh this is really really interesting so

uh I'll have to send this to you but um

borders income yeah there it is borders

income income from borders in the

borrower's principal residence or second

home uh what is this uh okay is not

considered acceptable with the exception

of the following when a borrower what is

this when a borrower oh did they change

this maybe that's not as good this is

when a borrower with disabilities receiv

receives okay that's different that's a

lot more I'm glad I looked because I

thought this was a lot more broad that's

not as good anymore never mind okay all

right it's a disability thing there I

don't know where I heard somebody was

saying you know maybe what happened was

they were thinking about bringing it out

to everyone and they just ended up

highlighting so never mind on the border

income it's just if there's a borrower

with of disability rip so anyway um

sorry all good now we know that one I

was getting excited about I was getting

excited easier to convince people yeah

what's your opinion on this and you

probably are super close to this issue

you have a ton of people in your courses

wh why do people struggle with taking

action like what have you found to get

people to just do something like well

you know first of all it's it like every

single day it's especially when you're

you're trying to find that purpose it's

actually really hard to work on finding

that purpose this is just like a a human

nature thing just like I you know I hate

my job I hate school I don't know what I

want to do anytime there's uncertainty

the default is screw it man just going

to have a beer and play video games

because there's comfort in that right

like everybody goes through that that's

very normal it's like I don't want to

wake up man stocks are down my job

you know like whatever like that's like

human nature so how to break out of that

is really difficult and I think that's

why we have depression problems it's

it's depressing but I think that's why

that ex it's difficult because

you have to have like some kind of

belief that you can contribute extremely

meaningfully to something that gives you

fulfillment and it's not it's not only

money like it has to be I succeeded at

something I got a promotion of my job I

created a business that's why we have

that entrepreneurial bug it's because

you get to see it build and then you you

get high off of that idea of I built

this property management company now I'm

going to build the Contracting team you

know the handy like let's go this is

great now we're going to expand to this

this this this that's that creates

happiness more than the actual money I

believe like that's what keep me going

right people like oh Kevin like what

number are you going to retire like I

it's not about the number it's about

building stuff it's like what's the next

thing I can do but but how do you help

somebody build something when they

haven't built anything I think like you

said one of the first greatest things is

owning your own home and then maybe rent

out those rooms like you're saying and

get a taste of property management get a

taste of owning and how do you start

with that well the easiest way to start

owning your own home is having a job but

nobody wants to hear that you know the

W2 is so villainized the job is so vill

villainized on social media you know

people go on social media like that's

right screw having a boss but then you

stay miserable whereas you have a job

like you did you were a firefighter you

worked really hard at that you took your

income which let you build your side

hustles and invest in real estate now

you were able to get rid of your W2 job

and just keep developing those

that's hard what we just described

that's not easy okay that's hard yeah

yeah I know I that's what I struggle

with like I even the people on my own

team who I'm trying to like guide down

this path yeah I because it's not a

matter of them not understanding like

for example buying a house like sure

it's not a matter that they don't

understand it it's just that they can't

get it over it they can't get themselves

over the hump and I struggle with like

how am I going to get the this these

people to go over the hump like I can't

like I don't know what else to do and

it's that way for everybody it's like a

system problem and because it's so

systemic as you're saying everyone

around says oh don't do that right so

like I when I had my real estate license

in 2010 I go to Trader Joe's and the

people at Trader Joe's like oh you're

realtor I'm sorry you know it's like bro

you're working at Trader joh stop you

know and they're like I'm sorry you're a

realtor like cuz it was a bad time you

go to buy your first house and and I

mean call after call after call it's

like the underwriter is mad about this

or here's another one I'm the flooring

contractor your house has asbest and

then it's like a new buyer

like maybe this is it for me yeah it's

hard man oh the Market's going to crash

double dip recession you know it's like

yeah it's tough man it is hard and then

part of me is like okay well maybe not

everybody's meant to do make progress

and and take action and do these things

like which is kind of a pessimistic way

to look at it it is but but you know

what like on the other on the flip side

I I look at uh like I think to myself in

this alternate world if I could have the

simplest most stress-free life what

would that look like and it would

probably look like you know

working Monday through Thursday 9 to 5

at a job that gave me some fulfillment

and then the rest of the time I could go

to my kids soccer practice hang out with

the kids family go on vacations get time

off right and that is like basically a

government job right so to an

entrepreneur that sounds horrible but

like for if you want the least amount of

stress and you're not worried about that

fulfillment ride there's nothing wrong

with that yeah that's a great way to go

we need people like that too right of

course and like in an alternate reality

I wish I didn't have like I almost think

it's a curse it is a curse this this

like I need to do all this crap right

like I wish I didn't have that feeling I

wish I could could just be happy working

36 hours a week I get that from my

circle of like why would you do that

yeah why are you doing that why would

you open up another one and to me it's

it isn't about the money it's about

doing it and building and all that stuff

you're talking about yeah for sure Peter

shout out your business uh rencon

Property Management in Ventura

California best property manager ever

and you have a real estate meetup on

November 30th at the topa toopa brewery

in

uh it's it's on NL so it's in inv

Ventura California uh that's over by the

dump by NL yes yes uh how can people

follow you uh I'm not personally big on

social media but rencon is so Instagram

Facebook all those things Ron Property

Management yep amazing thank you so much

hey thanks for having me it's been fun

appreciate it