Unlock the secrets to becoming a savvy real estate investor with our latest guest, Daniel Templin, who brings invaluable insights into the world of small multifamily property investment. Daniel guides us through the nuances of navigating this space, from harnessing the benefits of residential loans to understanding the latest down payment requirements. He also shares his expertise on why owning a duplex or fourplex could be your financial game-changer, offering the chance to live rent-free and build additional income streams. If you're intrigued by the evolving real estate landscape and eager to learn how to create spaces that resonate with modern tenants, this episode is a goldmine of practical wisdom.
Ever debated the merits of buying an existing property versus constructing a new one? Daniel and I tackle this complex question, weighing factors like home inspections, the shifting commercial real estate market, and how properties must adapt to the rising remote work trends. We also zoom in on the subtle yet powerful aspects that can elevate a rental property's appeal, from high-quality finishes to custom amenities. This episode is essential listening for aspiring investors who are looking to craft rental properties that stand out from the crowd.
We wrap up with a candid exploration of property management and mentorship's crucial role in real estate investing. Daniel shares strategies for overcoming common fears, navigating tenant relations, and the ins and outs of eviction laws. We delve into financial strategies, including the pros and cons of DSCR loans and the tax implications of depreciation. And as a final note, we extend an invitation to join our Side Hustle City community, where we continue to empower one another on our entrepreneurial journeys. Whether you're new to the property game or looking to expand your portfolio, this episode will light the path toward your next successful investment.
As you're inspired to embark on your side hustle journey after listening to this episode, you might wonder where to start or how to make your vision a reality. With a team of experienced marketing professionals and a track record of helping clients achieve their dreams, we are ready to assist you in reaching your goals. To find out more, visit www.reversedout.com.
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Speaker 2:
Welcome to Side Hustle City and thanks for joining us. Our goal is to help you connect to real people who found success turning their side hustle into a main hustle, and we hope you can too. I'm Adam Kaler. I'm joined by Kyle Stevy, my co-host. Let's get started, all right? Welcome back everybody to the Side Hustle City podcast today. Special guest Daniel Templin. Daniel, welcome to the show, adam, thank you for having me. Yeah, man, this is awesome. Another real estate guy. I love it. We've had a like a. We were on a roll for a while there. We had tons of real estate guys and then you know, just from my background and everything, it's just my network. And then we, for whatever reason, we just started getting people that just are doing everything like ice vending machines and random stuff, just all kind of random stuff. But, yeah, good to have another real estate guy back on the show.
Speaker 3:
I'm happy to be here. Thanks for having me Excited to get going.
Speaker 2:
Yeah, and your niche is kind of multifamily, right A small multifamily yeah, Four unit.
Speaker 3:
Two units to four units is what I am focusing on right now.
Speaker 2:
I love it Cause you keep it below commercial Yep, absolutely. Explain that to people Explain the five unit thing.
Speaker 3:
So at five units and above, you have to get a commercial loan on the property and you have a lot of different requirements that you're going to have to qualify for a bank and anything for and below is going to be considered residential and non-commercial and there's other things that qualify that as well A lot of local building codes. If you have five or above, you have to have suppression fire suppression throughout. There's a lot of different hurdles that you have once you get five and above and I feel like for people starting out that the small multifamily two to four is a perfect spot.
Speaker 2:
Yeah, 100%. I mean I go talk to the kids at my high school sometimes and I say, you know, and it's in the middle of the city, so they hate you know money and they think it's evil. But I'm like, look, this is the system we got. You got to figure it out. Hey, how about once you start working, you get out of high school, you get out of college, you start working? Don't go out in the burbs and buy yourself a $700, $800,000 house. I mean that's a liability. Buy yourself a four family. Go, move into one of the units. You're young. Move into one of the one bedrooms. You know four one bedrooms in Cincinnati here probably cost you $300,000, $350,000. You move into one of them. Rent out the other three. Well, now, taking that liability, you turn it into an asset and it actually helps your debt to income ratio because, ideally, those three are being rented out, you're living for free and you're making an extra few hundred bucks a month.
Speaker 3:
You know 100% and they just the government just lowered the down payments for those two. So, fannie Mae, now it used to be, if you bought a four unit, you had to put 25% down. Now you can get into those for 5%, which makes it even more of a reason why people should heavily be looking into that.
Speaker 2:
Yeah, and a good thing about what you're doing. So you're in these. You know, maybe like a duplex or a fourplex or something like that, it could get around some of these laws that these cities are creating around Airbnb, where they're saying single family homes, no way you can't. You know we're going to outlaw that. You can't do Airbnb on these single families. It happened in Dallas. I saw there was a couple other cities that are doing it. But you know, yeah, once you break the seal, everybody thinks they're going to oh well, dallas did it, why don't we do it? And these guys did it. So why don't we do it? And that's where people want to go. They want to go to the cities. When they go, you know, because there's an event, there's a concert, there's a game, there's something going on. They want to be in the cities. But now you're going to outlaw these Airbnb things and you know you got hotels pushing on these into, you know it's the hotel lobby.
Speaker 3:
100% yeah.
Speaker 2:
So I'm just going to talk a little bit about that, and is there any protection for people that are doing, say, like a duplex or a four family? In that case?
Speaker 3:
So it really depends on what market you're in and what the regulations are. There's a couple of states where the at the statewide level they said people can do whatever they want with their property and made it so that local jurisdictions cannot regulate use Michigan I actually had I'm in Michigan, by the way has that in the legislature right now and I think it's going to pass and there are, like in New York, where they just did the mass ban. They have very specific regulations on what you can do and it's something like you. The person has to stay over 30 days and you have to be in the property as well. Well, if you're in a multi-family and you live in one of the units and you know you're renting out the other unit, that might qualify. So it really depends on what the regulations in your area are and you really. I always recommend people to move into markets or to start Airbnb's in markets that are regulated already, because the last thing you want to do is make a huge investment into a property and then have it become regulated after. So make sure that where you're doing it has a setup policy on it, make sure it's favorable and make sure that you can make it work.
Speaker 2:
Yeah, cause this could be really scary for a lot of people. I mean you, I would assume, because of some of those things you would have seen like a big increase in houses going on the market. But I'm guessing a lot of these Airbnb people are just going to switch over to long-term rentals. You know, there in this market it's, you know, interest rates are high. Nobody wants to spend that much money on a house. I mean, the inventory is low. So there are people still out there searching. But you know you start throwing some of these Airbnb's up there. It could take a long time to sell. So, you know, rather than doing the Airbnb thing, if you know, might as well just go long term and hopefully that covers your mortgage. But a lot of these people got into that when they started building their little cap tables and everything with it oh look at, look at how much money we're going to make. We're going to do Airbnb. They based everything off a daily rental. They didn't base that off of long-term rental, so they they could still be in the hole. Some of them.
Speaker 3:
Absolutely, and you always want to make sure that if you have to fall back on long-term rental that you're going to be at break even. You want to make sure the market rents of your property are going to make it so that you can at least still make your note. If you are, you know, hedging on the extra income from Airbnb. And it's kind of funny because in Michigan, on the coast of Lake Michigan, you can tell what towns have regulations for Airbnb's on the coastline because the property values vary so greatly. So if you're in a, you're looking in a town that's on the beach and you know you can't have Airbnb's there. It's pretty reasonably priced to pick up a property there, but you go three miles away and a property that's a perfect comp is literally 40% more because the income potential is so great.
Speaker 2:
Well, and this is the problem, right, this is why these cities are looking at these deals and saying, hey, you're pricing out regular people who just want to you know they want to buy a home and they want to live in a home. And there's a guy wants to live on the beach with his family and it's. You know the house is 30% more expensive than down the road on a different beach that you know people may not want to live at. So that's why they're doing these roles and everything, and it's good to talk to somebody like you who understands where the market's at. Some of these people get into these things and they just hear Airbnb's a place to make money and they jump into that without looking at all these factors and without understanding what's going on.
Speaker 3:
Right, there's risk to everything you do, and the one thing that drives me nuts is I see, you know influencers throwing out like, oh, you can make this much money doing rental arbitrage and I I'm not against rental arbitrage. I actually think it's a good way to get started in real estate if you don't have a money for down payment. But they do it in a sneaky way and they're not telling the landlord that they're doing it, or they're just saying look at how much money I made, and they show their screenshot. Well, yeah, I can show, you know, hundreds of thousands of dollars coming in from Airbnb, but that doesn't tell you anything about the expenses you know. So I, before people invest, they just need to make sure they really do their research and that they are getting their information from a reputable source.
Speaker 2:
Right and a lot of times they are not and they get hyped up and you know they see this as a way for them to get out of that nine to five life and they're watching these folks that are, I mean even Grant Cardone. Like some of the stuff he says, like I'm like, hey, that's great for Grant, you know, but most people can't like, it's unattainable for a lot of people and I don't think I don't think a lot of people had the energy of like a Grant Cardone.
Speaker 3:
Right, uncle G's got a lot of energy, tons of energy man, Like it's crazy.
Speaker 2:
I was at an EXP conference and where were we at? I don't even remember Florida somewhere, maybe it's probably Miami or by Miami, and I met his wife as she was jumping in her car and I was outside and I'm sitting here on my cell phone trying to get some business done. I met her, chatted her up, got a picture with her and everything and she's an influencer right and she's got crazy energy. It's like the power couple of all power couples or whatever. For sure, yeah, and I'm sure she's bought into what he's doing too. Not every couple is going to be that way, right.
Speaker 3:
Like I mean 100%.
Speaker 2:
And I don't know what your situation is, but I know people who are like wanting to get into real estate and then their wife just vetoes it. Right, yeah.
Speaker 3:
And I mean your spouse has to be on board with what you want to do, right, but they don't have to be involved in the day-to-day activities. So there's a whole spectrum of that. But you need to have the support of your spouse, but you don't necessarily have to have them there doing everything with you throughout, you know.
Speaker 2:
Yeah, yeah. Now your thing is you know the one to four unit kind of area there. What do you think about construction? What do you think about building? There's a lot of like in Cincinnati, europe and Michigan. You probably have we're Midwest guys tons of old housing stock. People get into these projects. Next thing, you know the foundation's wrong, the roof needs to be replaced. There's you know, brick needs to be tuck, pointed, and you know all kinds of stuff you can get into. Have you ever gone into a thing I see it on YouTube all the time where people are like I'm building duplexes in Seattle and I'm doing this and that? Have you? Have you consulted people on those kind of projects?
Speaker 3:
So I always tell my students to buy existing properties. I don't recommend building them. I think there is a lot of potential there, but there is a lot more skill that goes into that, because you need to be efficient at managing your builder. You need to. There's just a lot that goes into building a property as opposed to just buying one. With buying one, if you get a good home inspector and you have a good relationship with them and you're smart about how you buy, I think you mitigate a lot of risk, whereas new construction you know you could be 20% over budget and that completely blows your any chance of profit for the first three or four years. But when you're going in and purchasing and you have a home inspection, there can obviously always be surprises. But I just feel like it's a lot safer and it's a lot more manageable for someone that's especially taking on their first deal. That's primarily with who we work is people that are trying to get into real estate. I just think that's a little advanced.
Speaker 2:
Yeah, and if you have forgotten anything, commercial, or is it main? So not residential commercial, but I'm commercial commercial.
Speaker 3:
Yes, we have. Actually, the very first business that I started is a restaurant and that's 6,000 square feet and we still own that. So that's commercial building we have. But we also have mixed use office space as well, so that's another property that kind of sounds similar to what you have. We have a studio there. We have different businesses that rent out different parts of the building from us to use for shared office space.
Speaker 2:
So I really like it. I think there's an opportunity in that kind of space too, because we've got several companies that have actually downsized to our space. So we had one that was in an 8,000 square foot office. Sounds like they had a whole floor or something of a building and they just didn't need anymore. They had 25 employees.
Speaker 3:
That makes sense.
Speaker 2:
Yeah, 25 employees Now the five of them maybe come in every day. So they're like, hey, we don't need all this space, we only need really 2,500 square feet. And then they came here and boom, I got a space for them. And you know, I think that's an opportunity. Just these like single offices for people that want to just get out of the home every once in a while, but they want a door. We've got real estate people that have to have a door and a file cabinet. Right, that's like part of the law here, so they have to have a door and a file cabinet. They never come in. I mean, there's like two people like maybe twice in three years one of them's come in and it's like they pay us every month. Never had a problem collecting rent. They know they don't drink our coffee, they don't use a parking space, they're just, you know, you just collect money.
Speaker 3:
Sure, yeah, that's a huge opportunity, but that's going to be more and more common because the work from home has definitely not a fad, you know, it's becoming the new norm and companies still need a home base, but they don't necessarily need the overhead of having space for everyone at the exact same time. So I think that's very smart.
Speaker 2:
Yeah, and the individual can decide do I need an office, do I not need an office? And if I get, if I, you know we do monthly rentals on our co-working space and it's month to month. Like you know, maybe you don't need it now, you're going on vacation, that's fine, pick it back up in a month or so. But some people just want to rent offices and we just do a one year lease on some of these smaller offices, these little 10 by 10 offices like the one I'm in here right now, and we just do a year lease and that's flexible and people can decide like, hey, this year I'm going to need it, next year I'm not. And the businesses can? You know it's going to alternate. You may have 20 people one year, you got 15 people another year doing that. But you know everything's changing. We're still adapting, from the work from home thing and even the rentals, even some of this stuff. People always need somewhere to live. They don't necessarily need an office, but they always need somewhere to live in, the home itself, the rental that they're using. That's changing even. Have you seen any of that and what you're doing? Are there any amenities you're offering or are you converting things into little mini offices or, you know, installing something that allows people to work from home. Are you doing any of that?
Speaker 3:
So no, we haven't really got into you know doing that because our space is full. So I don't definitely, if we, you know, bought more property and we're specifically trying to do that, I could 100% see you know doing that to attract more people, and I think that I've actually seen some people online in YouTube videos doing exactly what you're talking about.
Speaker 2:
Yeah, because it's a cool thing. I mean I, you know people come in, they see it's just weird, it's like one little thing will shift you over. Like you know, I bought my car and I was in the market for a car that had a massage seat in it, you know, and I'm looking at.
Speaker 3:
That's my last car I bought. That was the requirement. I only wanted a massage seat, and there's not that many to do it.
Speaker 2:
And then it's only the driver's seat and it's not the passenger seat. So my wife, every time she gets in, I'm like I turned on the massage. I'm like Melissa, I got the massage, raj. So, but yeah, dude, totally Like. But it's the one little thing, like you know, in your rentals what's going to like push people over, you know, oh, it's not for Micah, it's marble. We don't have carpet in here. We got hardwood floors and they look really great. Oh, we don't have. You know, just a little tiny upgrade. Sometimes that can just change the game.
Speaker 3:
Yeah, and I teach that to people when they make their Airbnb listings too. You know that you have to have professional photography done of your units, right, so that if someone's looking at your listing, another listing that they're gonna choose yours, but if that other listing has something cool in it or like one cool wall, that's kind of like a selfie wall or an accent wall, like you want to be able to set yourself apart. You want those extra amenities, anything that you can check off. You know on a box that you have this amenity. You have this amenity. You want to be able to do that, because it could be even something as stupid as having an iron in your Airbnb. Right, because someone's on business and if they search, they can put I, I need a unit with an iron, and if you don't have it, you just lost a potential booking because you didn't spend 30 bucks on an iron, you know.
Speaker 2:
That's crazy. Thousands of dollars potentially could be decided on a $30 iron right 100% that's wild, do you? Do you keep a list so when you're teaching people, and we can explain your business too, if you want to go into that.
Speaker 3:
but sure yeah, cuz I kind of feel like I'm hopping around saying I do small multifamily and then I'm doing your big business, which is why we're on here.
Speaker 2:
You know, I don't know if you have a list of things that you help people with, or how does that whole thing work?
Speaker 3:
sure. So that primarily, what we're focusing on right now is plex hacking, which is a Version of house hacking, where you buy a small multifamily and then you launch you live in one unit and you launch the others on Airbnb to increase your cash flow, and then you can just keep. Every 12 months, you can keep doing that over and over again, adding properties to your portfolio. So that's kind of our focus right now.
Speaker 2:
Wow, and I've never heard that. So did you invent that? Did you coin that term? Yes, yes, yes, I love it so complex hacking, or when does it come from? What's the root of the plex? Is it the complex or?
Speaker 3:
yeah, yeah, just like a four plexer, three plexer, you know yeah, I love it.
Speaker 2:
And how is it up in Michigan, like, I mean, do you? Some markets have different types of homes, like over on the west side of Cincinnati there's a lot of four families I mean there's been there concentrated and they're relatively cheap and they ran out really well. Do you have students and do you have people that come to you that they're in a market with just some really weird housing?
Speaker 3:
so that's one thing that I tell people is that you know you want to move where the money is. Ultimately you want to be in a good market where you can cash flow and you're gonna capture appreciation over time. But you can do it in any market and in every market there are Multifamilies, but a lot of the kind of depressed areas are gonna be, you know, 3,000 square foot houses that got chopped up into three units and you can do it with that, but you're not gonna get it very good appreciation. But if that's all you can afford 100%, you're gonna cash flow. Great and it's a great way to get started. But once people have a budget sufficient to buy Multifamily properties that were actually built as multifamilies, I highly recommend they do that, see.
Speaker 2:
So the reason I love doing this podcast is because I get to meet people like you who tell me that there, there's these new FHA rules in place that I didn't know about. So you guys always like there's always something I learned from everybody. And now I'm like, oh, maybe I need to just go out and start looking for some for families. But you know why would I do that? Right, it's because I'm looking for more passive income. Mm-hmm, and that's, I think, why a lot of people get into this. They have a full-time job, they've got something they do mostly nine to five but they're looking for passive income. So how do you help people discover what their passive income potential is?
Speaker 3:
so using a cash flow analysis basically is the tool that Kind of gives people a good idea of what a property's potential is. And we you I have a generic Cash flow analysis that I give out to all my students but that basically tells you okay, you figure out how much it costs the property, or how much it's gonna cost you to own the property, and then you compare that obviously to how much you're expected to bring in. And we always recommend doing a long-term as a long-term rental and as a short-term rental. So you run it both ways, and I mentioned a little bit earlier that you want to make sure that the long-term rental, while you're still living in the unit, is still gonna be break even. That is an absolute minimum because you're living for free at that point, right? So if an average mortgage I think it's around three thousand dollars now, for I Think it was like 3200 the last I looked for a 15 year note and 2,800 for a 30 year note, but I'd have to look for the exact number but say it's three grand, right, so that over a year is thirty six thousand dollars. So if you're living for free, you're instantly increase, increasing your income by thirty six thousand dollars. You know, that's crazy.
Speaker 2:
It's crazy. And then you don't have the expense, like most people, what I think their housing costs like 40% of their income or something, yeah. And now it's going up. I mean someplace like 70. They go some of these bigger cities like 70%. It's insane, like why would you live there if 70% of your money's just going to where you live? I mean you're just sitting in a house playing video games all day, is that? I mean I'd utilize the crap out of that if I was spending 70%. But now you're saying, hey, look, make 36,000. Well, the average person would have to make what? 20,000 on top of that. So 56,000, say, a year to pay their housing.
Speaker 3:
So all is that 36,000 is kind of worth 56 to you exactly, yeah, and I and that's worst-case scenario, best, I mean we've had some properties and I'm actually looking for one right now. We're looking out in Utah in hurricane, and that properties of four plex is, I think it's listed at 1.2 million but it would cash for like a hundred and ten thousand dollars a year and after you move out that unit that you're living in, since all the expenses are already accounted for, that's pure profit out of that unit once you move out of it. So that goes right to you know. The bottom line and that's what I really like to teach is you know this snowballs very quickly. If you take it seriously, in four years you are going to be independently wealthy. If you actually do this and you, I Mean it's doable, I do it yeah escape from the rat race.
Speaker 2:
It's 100% true and it's like you imagine these people they're they're going to college, they're spending four or five years in college and then they get out and they make a hundred grand. Right, yeah, you could have just bought a four family, for God's sake. Yeah, just stayed in it for four years. And when you leave, now all of a sudden you go from you know living for free, and now you're making more money off of that unit that maybe even the next place you move into right and you built up all this equity. And if you take that extra money, say you got a job you're doing and you know you didn't go to college, but you, you know you're a garbage man. Or you know, you know you know whatever you're doing right, working at Starbucks, but you can still pay this mortgage and everything. You're building equity. That whole time. You're taking your extra money. You're paying down the loan, the note on it. You may be in five years, ten years, you may not have a note. You may owe that place, free and clear, like some of these older people who are just you know they're going on cruises all the time and living the life, and they've got rental property.
Speaker 3:
Right At 40 or 70 percent of your income isn't going towards living expenses. You know you really have the freedom to do what you want with your time. Yeah, and.
Speaker 2:
I think a lot of people are scared because they just don't know how to set up a company Like they don't. They don't understand the liability scares them. You know they don't want to. They don't know anybody who can do maintenance. Right, there's those issues that come up. What do you usually tell people about that?
Speaker 3:
Always. So just if you're buying an Airbnb, we always tell people to put it into an LLC, right, but with Plex hacking you can't do that because it's a fanny loan, so you have to buy it in your personal name. That doesn't mean that you can't quit, claim it over to an LLC and keep the note in your personal name, so that gives some protection right there immediately. And really it's just about systemizing things. You know you're not going to jump into something without having a plan in place. So we have a whole checklist of you know these are the different brands it goes down to. These are the brands of furnaces that we have, and so if you have a problem at one of your properties, you can pull up exactly. You know the information that the tax are going to need and you can give that to them proactively, because you need to get it fixed as soon as possible If you have guests there, right? There's just a whole, a whole list of things that you can do to be proactive instead of oh, there you are. Oh.
Speaker 2:
Oh, you're on mute, there you go there we go. Ah, there you go, okay, so I just I can ask that question over again and I'll patch it all in.
Speaker 3:
Okay, sorry about that. I don't know if it was on my end or it was weird yeah.
Speaker 2:
I'll just check my internet as soon as you froze up. I checked my internet. I was like this is my internet, is it? I got the ESPN. That's my go-to. If something weird happens, let's see here. So we were in. Let me see how many minutes we were in. So I can remember the 27 minutes or so, cool. So I know how to I'll be able to patch this in. So what did I ask? Oh yeah. It was about the fears, the fears of yeah and I.
Speaker 3:
Do you know where? You want to just start over from the beginning on that question.
Speaker 2:
Yeah, I'll just start over again on that and we can work, okay, so, dan. So people kind of they're a little hesitant to get into real estate because they've got these fears that they don't know a contractor, they don't know somebody who can come in and work on their stuff. What do you usually tell people when they've got that situation going on?
Speaker 3:
Sure, and that is a very common concern. It's a big undertaking to a lot of people to buy their first investment property, and I think that the biggest thing that you can do is be proactive instead of reactive when it comes to buying real estate. So you want to make sure you have all your ducks in a row. You want to make sure I mean that goes to financing, to actually buying a property correctly, making sure that you're not overpaying, having contractors lined up and it comes down to as silly as it sounds checklists. You want to make sure that you're moving through your checklist and that you are being prepared for what's coming up and that you're, for Airbnb specifically, that you're automating your communications and that you're automating your even your locks. So we have checklists, for you know what type of equipment do we have in this property, and then we actually keep the model numbers so that we have all that information if something breaks. And the I think the real key to this is that if you do it on your own, yeah, you'll figure it out, but that is why I always recommend that you get a coach for bringing on your for you know, taking that on, because the coach already has everything figured out and they're going to be a sounding board for you and they're going to get you there faster, with a lot less road bumps, and the cost that you put into coaching is going to be a lot less than the cost of you know making a mistake in real estate on your first deal. Because if you go into something and say you didn't get a home inspection and the roof is shot or that there's something wrong with the sewer, you know you're talking tens of thousands of dollars that you could be dumping into a property without you know knowing that you need to.
Speaker 2:
So it's all bad. Yeah, you ended up with a. You know you end up having to excavate or something after you buy a house.
Speaker 3:
That that would suck big time. Yeah, 100%.
Speaker 2:
So yeah, getting the proper inspection, knowing the proper people, having a coach, somebody who's done this before several times, makes a whole lot of sense. I mean, I've I had somebody bumps and bruises, and ridiculous things happen with tenants. I did too. Oh, it's just and they don't care. They will, they will, and I don't want to scare anybody away from it, but tenants are the worst and they, you know, you've got to have your ducks in a row, especially when it comes to contracts, and you've got to know the game. You got to know the eviction rules and you're in the place you're at, like, god forbid, you own a rental property in New York City. That would be terrible. I mean, people were just or in California or in California.
Speaker 3:
You just got to go.
Speaker 2:
You got to go to the right places, essentially, right, yeah. And I think money is a big thing for people too. So you know folks don't know I mean there's. You know you talk about things like credit card rewards. You know taxes you bring up a lot of times. You know how to get into one of these things Like what kind of money do I have to put down? And then if I buy one, you know, can I buy another one? Now you know how many houses can I have in my name, right? You know things like that people worry about. So talk a little bit about some of that stuff.
Speaker 3:
Sure, and there's a bunch of different strategies to let's focus on how many houses can I have in my name, right? So if you are doing a traditional mortgage, you can have 10. If it's backed by Fannie, you know so, and Plex Hacking is included in that. However, once you hit a point to where you are beyond that, or maybe your debt to income ratio isn't exactly what a bank wants to see, you can move into DSCR loans and with you used to be able to do them at 15%. Now it's up to 20% and with a couple points, you know, if going rates are seven, you're probably going to pay eight and a half or nine on those loans, but you can get into those with, instead of an application that's this thick, with an application that's this thick as long as you have the down payment. So there's a lot of creative ways that you can continue to build your portfolio and your real estate empire.
Speaker 2:
Yeah, I use a. I'm actually looking into a DSCR loan right now for a pre-construction. I had to put 50% down, so the down payment isn't a problem for me with this one. But you know, when you buy one of these condos you're getting in 20% 30% below market. The building itself has a hotel license, so you don't have to worry about these laws, right?
Speaker 3:
I mean, it's a good thing.
Speaker 2:
There's a management team, because a lot of these buildings that are getting built now this one's in Miami but a third of the building is an actual hotel that the developer owns. So you know they have maids there already. They have people that are turned in the rooms, they have a front desk person, so you just turn your unit over to them. And these are different. These aren't like condo hotels where you know you only get 30 days to stay in there. You could stay in your unit as long as you want and you know if you want to rent it one day, you totally can and they'll do it for 25%, you know. And then you throw a mini bar in there or something, make a little extra money off of that, maybe a car that they can rent, and do that on tarot. But you know you maximize what you've got going on. But the DSCR loans for me is one of the best ways to do it, because I have some complicated taxes and I think a lot of other investors do. I mean you own multiple businesses. You're doing the real estate thing. It's like do I want to wait two months for this loan officer to dig through all my crap, send it to underwriters, call me back and say they're missing this and that. Right, if people haven't done this before, it's paying the butt, yeah.
Speaker 3:
And yeah, and when you rely heavily on depreciation so that you don't have to pay taxes, that's a whole nother obstacle that you have, because on paper you know you could have made. Say, you made 300,000, but you had 200,000 of depreciation. On paper you only made 100, but in your bank account you have 300. Well, the bank has to follow their guidelines and they have to go buy what your taxes say, right.
Speaker 2:
Well, that's the same people like the government. You know they want your tax money. So if they're going to loan you something, they want to see you're paying your taxes, right, right. But those real estate investors kind of get into it because they're like, hey, I got depreciation, I got this, I got that and it's a way to, you know, lower your tax liability, and it's just. It is what it is and those things are in place and you know, if they don't want to close those loopholes, you're going to have investors that look like they're living in poverty and they're not, they're doing okay. But you know, maybe their car is a business expense, maybe they're. I mean, you could buy a property and you can go out and get a Chevy Tahoe and write that thing off $100,000 the first year.
Speaker 3:
That loals in place and I did that exact thing. Yeah, my wife a new Tahoe last year.
Speaker 2:
Yeah, If it's, over what is it? 5,000 pounds or something, I think it's 5,600.
Speaker 3:
I can't remember, but yeah, it's a weird number.
Speaker 2:
Yeah. But then you're writing off mileage because you got to go to the property. You got to, you know, meet your tenants for rent. Sometimes you got to talk to them. You got to see what's going on with their sink. Their dishwasher isn't working. I mean, those are all write-offs right. And DSCR loans come in handy because they don't look at your personal stuff, they look at the property, they look at other properties around it and say, hey, is this going to cash flow? And in my case I've got tons of examples. You know you got an 85% occupancy right in Miami. These things are in huge demand right now. There's like four buildings popping up next to mine. You know these things rent from anywhere from $250 a day up to $1,000 a day and this is just one unit. But it's very passive because I have a management team and you mentioned that stuff. You don't have to do all your properties Like. I mean, you've got people that are doing it for you. You've got people that are running your businesses for you right now.
Speaker 3:
Yep, absolutely. We still own the restaurant. We have a general manager there. That's amazing. That takes maybe 20 minutes a week for me. We do a meeting once a week and high level stuff. We concentrate on any concerns and that's literally all I do for that business that week. And for our Airbnb's. I highly recommend automating them out so that it's not a huge time suck. But I also handed off a large portion of my Airbnb's to a professional management company because it still does take time and you have to be available to answer questions. You have to, you know, make sure your guests are having a great experience and if you're busy with a lot of other things and you scale large enough, then at a certain point it makes sense to hand that off to someone else.
Speaker 2:
So what a funny though, didn't you see in the industry, in the hotel industry. Hotels, you should just be boring and that's. It was the only game in town. And then Airbnb's came, and then, all of a sudden, hotels are popping up with co-working spaces in them. Right yeah, the lobbies look amazing now and you got these. You know community type of things happening in these hotels. It's like wow, they're really you know, they're really trying to compete.
Speaker 3:
Yeah, and you know that just speaks to the market, right, having a free market and not having regulations on that. Because, yeah, it might have lowered the income a little bit of the hotels by having Airbnb's pop up, but it made them better, right, and that's what the market's supposed to do.
Speaker 2:
That's right. That's right If your Airbnb's are unbelievable, that's an option, wherever your Airbnb is in Idaho or wherever you put it. And the other option is you know a low-end kind of hotel, I'm going to go to the Airbnb I'm with a better experience, 100%. You know, I need nirons. I need nirons Somebody sometimes doesn't have irons in them anymore. I needed one the other day and all they had was a steamer. But yeah, yeah, same steamer I got at home actually, but it was funny. So yeah, dan, tell people you know how do they get a hold of you. I mean, you sound like you'd be a great resource, not just for real estate but for just business, and you know how to get a business off the ground, how to take it and automate it and hand that off to other people, like your general manager at the restaurant. So how do people reach out to you? How do they find your stuff?
Speaker 3:
Sure, they can go to my webpage, which is thebusinessmandancom, or they can use that same handle on Instagram or on Facebook and on TikTok.
Speaker 2:
Love it. And what's your ideal client? Who's your? Who do you want to talk to?
Speaker 3:
I want people that you know that really are serious about gaining financial freedom in the next four years. That's what I'm looking. I want to help a thousand people to gain financial freedom over the next 10 years and that's really my passion, because it took me a long time to figure out how to do that and helping other people to do that is really a priority in my life.
Speaker 2:
I love it, dan. Well, you're doing. You're doing God's work out here, in my opinion. I mean, you're helping people change their lives, get out of that rat race, get out of that nine to five world, teaching them the right way to do it. Maybe save people some headaches and, you know, they can have some passive income and maybe they keep their nine to five. But they got a couple thousand dollars coming in and they're going to be 100%. That's the way to do it, man. Well, I really appreciate it, dan. You've been great.
Speaker 3:
Thank you for having me on.
Speaker 2:
Yeah, everybody reach out to Dan if you're interested in getting into some of this stuff. All right, Dan, thanks so much.
Speaker 3:
Thank you.
Speaker 2:
Thanks for joining us on this week's episode of Side Hustle City. Well, you've heard from our guests, now let's hear from you. Join our community on Facebook, side Hustle City. It's a group where people share ideas, share their inspirational stories and motivate each other to be successful and turn their side hustle into their main hustle. We'll see you there and we'll see you next week on the show. Thank you.