An image of a bearded man in a long shirt standing in front of a house. This MyHouseDeals member spoke about how to invest in a rental property and using the process as al learning experience.

How to Invest in a Rental Property: Jarrod’s Story

We sat down with Jarrod, a part-time investor in Austin, Texas for our latest success story. He found his first MyHouseDeals deal not too long after becoming a Premium Elite member. We talk about how to invest in a rental property, and how that differs from getting one ready for the market. He also details the dealmaking process and the scope of his rehab.

Jarrod’s goal setting mindset has put him on a path to success. He has a personal “50 by 50” goal: 50 properties by the time he’s 50. It’s a realistic goal, and he knows he can achieve it.

Topics include:

  • How renovating a rental is different than renovating for the market
  • Setting goals for yourself and why those goals are important
  • Not being afraid to look outside your immediate location

Here’s a quick breakdown of Jarrod’s deal:

You can listen to the audio here:

Tell us a little bit about your background. Have you been an investor for a while or are you just getting started with real estate?

So around 2007, 2008, I actually got into the real estate industry, because I got let go from my job back then. I had a friend whose dad had some money and was a realtor and we both had a little bit of construction experience. And so he said, “We don’t have anything else to do. Let’s buy this house and flip it.”

That was the beginning, since then I’ve owned a property management company. We’ve done REO, property preservation. I’m not full-time in real estate now. I actually work as a product designer. And started doing that shortly after 2008, when I got back into my career. But I got the bug at that time and I’ve owned rentals and I’ve done my own construction. My family, my wife and I, we buy a houses, we renovate them, and then we end up selling them.

Starting last year, I decided to get really serious about it. I developed a goal for myself 50 by 50. So my goal is 50 properties, 50 doors by 50 years old. I’m 41 now so I’ve got some aggressive goals ahead of me. I feel like I’ve built some confidence in the past and some know-how and so I’m going to capitalize on that and move forward. And I hope I supersede it. I hope I surpass that number.

And is your plans to continue to do it part-time or do you see yourself going full time in the future?

Right now, it’s just part-time. I think at some point after 50, maybe I’ll reconsider. I love it, the industry, and the connections. But for now I’m focused on long-term and I want to build a rental portfolio, and passive income to get to the point where I don’t have earn income and I can continue doing either real estate development or do something else. Or not development, real estate investing or development, maybe that was a Freudian slip. But yeah, I think part-time for now.

So it sounds like you’ve mostly done flips, but are now focusing on rentals. Was the deal you found on MyHouseDeals a rental?

Yeah, like many folks trying to do BRRRR and I’ll be honest with you this is my first BRRRR property. I’ve bought turnkey, done flips, but this is the first one I’m actually going through and looking to renovate it to rent it. So, that’s the end goal and to keep it.

What were you in the market for when you came across it and how long had you been looking?

My main goal was to build a relationship with wholesalers and get on lists.
To create a pipeline of properties for myself. I also wanted to do some analysis and looking for properties that met my criteria of about $150,000 to $250,000 that were, all in, around 70 to 80% purchase price and rehab.

And I think you just need to set out with some goals and take actions to meet those goals. This particular property was, after some research, in a growing area, it fit my price point, and after doing some analysis of my own, thought this could be a good deal. So, I reached out, made my first offer, because I have some relationships with hard money lenders. I was ready to go.

After a little back and forth, the wholesaler said “Okay, let’s do it.” I
think I settled at $72,000, and the house currently has an estimated
after-repair-value at $155,000. Plenty of margin there, and I actually made a
deposit sight unseen.

So you didn’t see the property because you’re in Austin, and the property is in San Antonio?

Correct. I was going to go see it, but the weather turned. It was the first time we actually got snow in Austin. And so I was going to go down to San Antonio and look at it that weekend. I had a bunch of properties mapped out that I was going to go look at and that one was on the list. And then we ended up not going. Meanwhile, I’m texting back and forth to the wholesaler. And I just thought I’m going to pull the trigger. Even if I don’t use all of that potential ARV, I’m going to learn a lot in the process.

And for me, that was one of the goals was to learn more about this BRRRR process, build relationships with potential contractors, do a deal with a hard money lender. Like all of these things that I need to just do. There was enough margin in this property that even if it didn’t turn out where I make 20 or 30% on top of that when I refinance, but I was okay with that.

At what point did you actually visit the property and got a better understanding of how much you work you would have to put into it to get it ready to rent?

It was before closing. So I visited the property and… It was interesting, the owner was still not living there, but operating a barbershop out of one of the back bedrooms. And so I couldn’t get into the entire property, but I did walk the property and created a pretty much an estimate of what I think needed to be done, to get rent ready and the scope of work. In the meantime was looking for contractors. I had a couple of people go over there and give me estimates based on the scope of work and went in that direction. But I think it was a two week close or a week.

What kind of repairs are needed and how much are you bidding?

I knew it needed foundation because the floor was uneven and just the signs of foundation repair. And I think I estimated around $6,000 to $8,000 and it came in and around $12,000. So not too far off.

Overall, I was estimating repairs to be about $30,000 to $35,000 to get it rent ready. Not doing high-end flips sort of finishes, but standard construction grade. It’s a four bedroom, two bath with a kitchen. And I’m trying to reuse a lot so I’m reusing the cabinets in the kitchen. We’re just going to refurbish those. I have a great contractor who is an investor himself, and what’s great about him is that he came in and said, “Here’s the flat number. Tell me what you want to do. And we’ll do the finishes. I’ll send them over to you if you don’t want to use them, let me know. But this is pretty standard stuff.”

He came back with closer to $40,000. But we needed to get rid of a patio and replace with crushed granite, do new windows, painting and new appliances. It should be a nice rental property when we’re done.

Rehabbing for a rental is much different than rehabbing for the market. Tell us your thought process behind all of this.

I’m looking for things that are durable, but knowing that at some point I’m going to have to make repairs. Also, I love vinyl plank right now. It’s such a great product and it’s affordable, it’s durable, and it looks great. And so things like that, not a super high end, but it’s looking for those sorts of finishes.

And just through a conversation with the contractor he’s like, “Absolutely. This is what we end up doing for rental.” And he even came to me and had some ideas about where I could save money. I mentioned there was a barbershop out back, so we were reusing some cabinets from there that we could repaint and put new counter tops on.

You’re working pretty collaboratively with your contractor, which is a great thing. Do you have a timeline that you’re shooting for putting the property on the market for rental?

I’d love for a tenant to be in place by May, that’s my goal. Of course, construction never goes to plan. So there’s a little bit of wiggle room there. I actually have a great management company who will start marketing the property three or four weeks out from finish. This is the first time I’m working with them and doing a deal that’s this way.

So let’s recap a little here. Purchase price, about how much for repairs, and what’s your expected cash flow?

My final offer was $72,000. We’re currently looking at about $45,000-50,000 in repairs. All in, that puts me at about $120,000. Which is nice considering the ARV is estimated at about $155,000.

Having a hard money lender helped, too. That was about $90,000, and I put in the rest, which actually got put into a side account. So I should be able to get that back once they get funded. Whatever equity I get from the refinance, I’m going to put into the downpayment to keep the mortgage low.

As for cashflow, a conservative estimation is about $1,200 a month. I generally try to get $300 out of cashflow per property. But since I mostly used this property as a learning tool, any cashflow will be a positive for me.

Sounds like a plan! What do you have in store for the future? Any other deals already underway?

So I have looked at other properties. Every day that pipeline is coming in and also people are sending me properties. I have a few areas that I have my eye on. I’d love to get a duplex if possible.

So, I’m doing more research on the specific areas and hoping that inventory will pick up a little bit. I feel like it has recently for some reason. If you look at the data, there’s a lot of delinquencies. We’re getting towards sort of a deadline.

And I think we’re going to start to see more inventory, especially while prices are high before interest rates go up. So I’m planning to take advantage of that. And I’m also at the same time, my goal this month is to start to build some private money for some friends and family. That’s going to take some work, but I hope to get enough to offset the hard money. But if everything goes to plan, hopefully by the end of May I can get another property ready to go.

Final questions: How long did it take you to find this deal after becoming a Premium Elite member and what advice do you have for other investors?

I feel like it was maybe two or three months, maybe even shorter than that. And I’m still looking on there. Like, I’m going to be in San Antonio this weekend, I’m going to have a list of two or three properties that I’m going to go look at. And I’m probably going to look at MyHouseDeals to go see them.

Set some goals and know your “why.” Why do you want to achieve that goal? For me, it’s to create a better financial future, but also generational wealth for my family. But the other thing is motivation follows action. So you have to take action.

And I think that’s one of the things that I’m trying to learn is I’m going to make mistakes. I’m going to screw up. I might even lose everything, but hopefully that doesn’t happen and I’ll try to be conscious of my risk, but at the same time imagine how much I’m learning in that process. And I can go just do it again. So I think for me, I’m just staying active, trying to let that feed my motivation, which is based on why am I doing this? What do I want to achieve? Making it very tangible.


Jarrod has had a lot of experience flipping homes in the past. However, learning how to invest and flip a rental property was new to him. He knew that no matter what, he’d walk away from his deal with a lot more experience and knowledge.

He saw the value of a MyHouseDeals Premium Elite membership, and doing so allowed him to not just find a property that made sense, but create relationships with wholesalers, too.

Goal setting and mindset are so important in the real estate investing business. Jarrod had clear goals, and he knew why he wanted to achieve those goals. We’d like to thank Jarrod for his time and wish him continued success!

Posted on Apr 21, 2021

Author: Alex Farris Soares

Alex is President of MyHouseDeals. Since 2006, he’s worked with real estate investors to bring them the marketing services and training they need to elevate their businesses and reach their goals. Alex is an avid customer advocate, enjoys affecting change in the REI and digital marketing industries, and promotes the values of entrepreneurship and innovation.

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