The skills Ron uses as an educator only enhance his part-time real estate investing business to build a Houston rental portfolio. Ron’s ability to stay organized and pay attention to details contributes to his success as an investor working towards his retirement goals.
Ron’s buying criteria makes it easier to narrow down properties that are a good fit for his investment goals. Location is a major factor that determines what he considers a worthwhile property. Since Ron focuses on single family home rentals right now, he must find properties that are in a location people will rent.
Ron falls in a unique category of investors… He has had no real surprises in his investment property deals. He attributes this to working with good people, staying organized with spreadsheets, and paying attention to the property details. He isn’t afraid to ask questions, seek advice, make a decision, and follow-through with it.
We recently sat with Ron to learn more about the deal he found on MyHouseDeals, his motivation to be a real estate investor, and his long-term investing goals.
Listen to our conversation with Ron during which he talked about this recent deal, plus…
- What to look for during a property walk-through
- The benefits of using hard money
- How to find and keep good tenants
NOTE: Since Ron is a Premium Elite member, he received a FULL refund of his up-front membership fee for simply doing a deal! Find out more about our Premium Elite membership here.
Read the full story here…
Tell Us About Yourself…
Are you a part-time or full-time investor?
I’m just a small, part-time investor.
What motivated you to get started?
I moved down here to the US, I’m a Canadian, and I knew that for my long-term retirement, a profession as a teacher certainly wasn’t going to make it. I needed some other sources of income to make sure that I’m going to be self-sustainable.
How did you hear about real estate investing?
I’ve always been interested in real estate on the side, so it was just a matter of becoming informed, reading, talking to people and just trying to get a little more information from various individuals who are in the game. It’s a matter of becoming more acquainted with the information out there, and then trying to take good actions.
What was your first step into real estate?
Again, just sought out the various types of people speaking whether it be online or maybe in person. Once I thought I had enough information, then I went out and bought a property. My first one was a foreclosure. I was able to rehab that. My philosophy is to buy wholesale. I’m not interested in flipping at this time. I was able to put some rehab dollars into the property and get good solid payments in there.
How do you continue your real estate investing education?
I listen to people online. Even through sources such as MyHouseDeals. I try to determine what the best deals are and the best fit location-wise and dollar-wise. If I think the situation is right then I act on it as fast as I can to try and close the deal and acquire more properties.
What were you looking for on MyHouseDeals when you found this deal?
I’m looking for single family homes at this time. I’m looking for good homes where you have your three bedroom, two car garage, and two full bath around anywhere from 1,350 to 1,600 square feet range. I’m looking to see if it’s a good deal based on the evaluation of the cost and what they’re presenting.
I was looking on MyHouseDeals and there was a great buy based on what they were asking for. I followed up as soon as I was able to see it, got in touch with the seller, and I was able to go out there and take a look at it, and right away put a down payment and a hold on it.
Was the ARV accurate?
The ARV was maybe a little bit high, but certainly was not extravagantly high. It certainly fit in there. I knew a bit about the area in terms of some of the numbers. The ARV was reasonable and the repairs helped determine the ARV. For this property the repairs were maybe down a little bit slightly from what was advertised, but nothing that was unmanageable.
How many deals do you have to look at before you find one that fits your parameters?
That all depends. Maybe some deals will come up immediately that fit in your criteria based on location, price, availability based on your readiness and availability. All those factors come into play. You think you may have lost on a good deal, and then the next thing you know two or three days later another home may come up that fits your criteria and you’re able to act on it.
Did you look at the house before you bought it?
Yes, very much so. I went out to take a quick look at it. I wanted to see how much rehab needed to be done on it. I wanted to take a little look around and make sure there was no major cost I was going to incur such as a roof or foundation, things of that nature. I definitely took a firsthand look at it.
When you go into a house to look at it what are the first things you look at?
First, I’ll try to get a mental overall picture in terms of what’s going to have to be redone. I look at the big areas such as your kitchen, your bathroom areas, and your bedrooms. You want to take a look at those and say, “Hey, how much is really going to be needed to get this up to what I think is a good landlord tenant situation?”
From there, once you do a quick walk-through, I like to get a good feel in terms of the house size. I want to be able to say, “Hey, I think this is nice. I think this is going to be marketable. I think that tenants will want to live in this.”
From there I try and get a little more detail to where I can try and do some rough number crunching where I come up with my own plan of attack what I think are going to be the rehab costs, a rough estimate there as well.
Tell Us More About this Deal…
Did you negotiate the price of the property down at all?
No, because I thought the initial asking price was good. I knew there’d be lots of action on it. I felt there was no need for me to ask to reduce the price on it.
How did you finance the deal?
I financed it through a hard money loan. The terms were good through the hard money loan. Hopefully after a short period of time, they’re going to refinance it into a more traditional fifteen or thirty-year mortgage.
Have you always used hard money loans for your properties?
No. My first couple properties I was able to use my available cash on hand. The cash reserves maybe aren’t as strong as they were initially, so now I’m looking at other sources of revenue to try and close the deals, so hard money has been very good for me.
What did you like about using hard money?
I liked it because the support through the companies that you’re dealing with provided a clear picture in terms of what was done. You work together with educated people who want to help you succeed as well. The parameters in terms of interest rate and how much money I was going to be afforded for purchase on the home and the repairs were available as well. They are built into the loan.
Everything is presented to you in a professional manner and you’re able to make an educated decision. I’ve never had any problems with the terms. The terms are clearly outlined.
I think it’s just paying attention to detail and looking at your information, making good decisions, making sure the companies that you’re working with are good solid individuals, they’re experienced in the industry. All of those factors. Knowing your cost and what’s involved and what you have in terms of cash on hand or all deposits that you need to have before going into the deal.
What’s your strategy for getting a tenant that will come into the house quickly and stay for while?
Your location certainly helps. That’s probably the most important factor. It’s pretty simple for me. As soon as I can purchase the place, I’m doing some very low-level forms of advertising. Just putting up a sign in front of my property, and I’ve gotten numerous inquiries on it. If I have to go to other forms of media, paid or unpaid, in order to advertise the property I do that.
Do you use a property management company for your Houston rental portfolio?
No, not at all. I’m organized enough to be able to handle it myself with respect to my lease development, interviewing the possible candidates, background checks, and getting responsible people in there.
What tools do you use to manage your rental properties?
I’m an educator. I’m kind of organized that way. It’s a matter of just basic tools and number crunching, whether it be Excel spreadsheets I’m using during my leases, budgeting for the rent and expenses. I have different basic software for each property that I’m managing to make sure that if anything is going wrong, I’m tracking it within those specific properties.
It’s just a matter of having attention to detail and making sure that costs are in line, and you’re trying to make sure that you can manage your costs as effectively as you can.
How many properties do you have?
This recent property is my fourth. I try and average about one every two years. The last two years I was able to buy one a year, but I’d like to increase that.
What’s your long-term plan with your Houston rental portfolio?
I’d like to look at expanding from a single family moving to a smaller multi-family. That certainly is a goal of mine.
I’m not ready at this point in time, but certainly in the near future looking at flipping because this is still a part-time venture for me. If I can eventually move from my day job and move to this in a full-time manner I’d like to do that as well.
Do you have any advice for investors who are getting into rentals?
For newbies who are wanting to start out, ask a lot of questions. Seek advice. Talk to other people. At a certain point you want to make a good decision.
There are always people talking about a lack of action in terms of going out and actually buying one. Come up with that quick blueprint for yourself in terms of, “Does this particular house fit within the criteria that I want?” Then you can act on it. If you can take action, make a decision, and follow through, then I think you’re going to be fine.