This article was originally published by a www.houzz.com . Read the Original article here. .
The most common sources for products used in home building and remodeling are specialty retailers, lumber yards, and wholesale distributors, according to two recent NAHB surveys. The surveys include one of single-family homebuilders in the October 2024 NAHB/Wells Fargo Housing Market Index (HMI) and one of remodelers in the Q3 2024 NAHB/Westlake Royal Remodeling Market Index (RMI). Both surveys asked respondents where they purchase building products, regardless of who ultimately purchases them (themselves or subcontractors)
When averaging across 24 building product categories, the top three major channels of distribution are roughly the same for both builders and remodelers. Specialty retailers, lumber yards, and wholesale distributors together account for around 70% of building product purchases.
When analyzing the specific products purchased at lumber yards, the top products purchased by both builders and remodelers were basic lumber products including plywood & OSB, sawn lumber, and engineered lumber & I-joists.
One major difference between builders and remodelers was the share of those who purchase products from home improvement centers. Remodelers are three times as likely to buy products at this channel of distribution compared to builders. Nevertheless, one specific product category, hand & power tools, is purchased at home improvement centers by a majority of both remodelers (68%) and builders (56%). Of those that do purchase hand & power tools at home improvement centers, 11% of remodelers purchased at least one other product there compared to 3% of builders.
A subsequent post on who is most often responsible for choosing these products will come later. Please click here to be redirected to the full report.
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This article was originally published by a eyeonhousing.org . Read the Original article here. .
This high school football coach grew a real estate side hustle over the past four years that now replaces his W2 income. He did it making a median salary, all while working his full-time job and raising his family. He didn’t use flashy methods, risky strategies, or constant cold calling. Starting with around $30,000, Lamontis Gardner went from zero to 19 rental units in just four years and is STILL growing!
After pandemic lockdowns left Lamontis with extra time and little work, he knew he needed to stop solely relying on his W2 income to fuel his life. Of course, Rich Dad Poor Dad found its way into his hands, and the real estate bug began. From there, Lamontis turned a lost deal into an opportunity to buy three duplexes from one owner. The problem? He only had a third of the money. It was time to partner up!
After a home run first real estate deal that gave him a six-figure equity upside, Lamontis knew this was the path for him. Since then, he’s been buying rentals, flipping houses, and doing whatever he can to reinvest in real estate, all while working his W2 job. Now, he’s replaced his W2 income but is STILL growing his portfolio even in 2025’s high-rate, “tough” housing market. Want to do the same? Copy Lamontis’s strategy!
Henry:
This investor bought his first property just a few years ago in 2021, working with two partners to find the cash he needed, but by the end of 2024, he’d accumulated a portfolio of cash flowing rental properties in Mobile, Alabama, and he had flipped five houses in a single year On the show Today, we’ll hear just how he did it. What’s going on everybody? Welcome back to the BiggerPockets podcast, where we teach you how to achieve financial freedom through real estate investing. I am Henry Washington filling in for Dave Meyer. Today’s guest in the show is Lamonts Gardner. He’s a formal college football player who started his investing career by buying a single rental property in his first year. Over the next two years, he bought four more rentals and flipped a house. By 2024, he was able to do 14 deals, including five flips. We’re going to hear from Lamonts on how he’s been able to scale up his business sustainably and without taking on too much risk, how he found and finance deals in the mobile Alabama market, and what motivates him to continue growing his real estate business while working a full-time W2 as a teacher and coach.
It’s a great story. I’m sure you’ll be able to learn from. So here’s me speaking with Lamontis Gardner Lamonts, welcome to the show, my man.
Lamontis:
Thank you. I’m grateful to be here.
Henry:
Awesome man. So give us a little bit of background. What were you doing before you got into real estate?
Lamontis:
I was coaching actually right after I finished playing ball in college. I went straight into coaching, did that up until about 2020. The Covid shutdown season got canceled and eventually the school shut down with a lack of income and a lot of time on my hands. I just decided to journey into real estate. I just dove into every podcast I could, every book I could get my hands on, and even the BiggerPockets webinars that were weekly.
Henry:
Okay, so 2020 hit, your income just stopped because the school shut down and that kind of made you realize you needed something that you could depend on versus just depending on somebody else for your income?
Lamontis:
Yeah, I just realized I was under control of my job and I no longer wanted that. So just wanted a different
Henry:
Lifestyle. I think a lot of people face that challenge. In 2020, they realized that they really weren’t in control, but not a lot of people just decided to jump into real estate. So why did real estate become the thing? I mean, a lot of people were selling stuff online. They moved to investing in the stock market. It was all pretty easy to do from home. Why real estate?
Lamontis:
So prior to then, maybe about two years earlier, I read Rich Dad, poor Dad.
Henry:
There it is.
Lamontis:
That sparked that light in me to eventually want to get into it and 2020 was just the perfect time.
Henry:
Okay, so you kind of had the seed planted from when you read Rich Dad, poor Dad, and you were like, all right, this is the time. So when did you buy your first deal?
Lamontis:
I bought my first deal in 2021. I decided I wanted to invest in my hometown,
Henry:
Which is where
Lamontis:
Mobile, Alabama. So we eventually moved from Atlanta and came back home where I took a local job here at a high school where I’m still currently working, which provided me a more stable income to be able to invest.
Henry:
Okay. Well let’s talk about that. What was your first deal? How’d you find it? How did you end up financing it?
Lamontis:
Prior to my first deal, I made an offer on a duplex. I lost out on that duplex due to a cash buy investor. So at that point it’s kind of like, well, I’m not going to be able to compete. So what I did was this particular street is full of duplexes, so I pulled up a map and I wrote down every address on that street and I skipped, traced every owner and called and I ran into a guy who actually had three, he had three duplexes on this street in particular and took that down. I couldn’t do it by myself, so I had to bring in a partner, but we used a local bank, had to put 20% down and been going ever since.
Henry:
Man, I mean that’s cool. That’s just straight hustling, like a straight hustle lead. So you looked up every owner, skip traced them and then started making phone calls. How many phone calls did you make before you found this owner?
Lamontis:
Probably would be about 25 to 30 calls.
Henry:
I mean, that’s really not that many before you actually land a deal, that’s pretty cool. But I like that style and that hustle because I think a lot of investors want to get into this business, but they don’t really want to put in the work. They want to just find a deal online. And you went and you just made the calls until you found one. Now I’m not saying everybody’s going to make 30 calls and get a deal, but you don’t know that until you put in the work. So you got on the phone with the seller, he wanted to sell three duplexes and you realized you didn’t have enough money. So the bank said you needed to put 20% down. About how much money was that 20% that you had to put down?
Lamontis:
It was about 76,000.
Henry:
Okay. So the total purchase price was how much?
Lamontis:
It was 380,000,
Henry:
Three 80 for three duplexes. How much of that 76,000 did you actually have?
Lamontis:
I had about 28,000.
Henry:
Okay, so you had a little less than half, right? So you had to raise the rest and you decided to do that through a partnership. How’d you find that partner?
Lamontis:
He was actually my college football coach, my position coach. So prior to bringing him on, I was trying to talk to the owners like, Hey, could you just allow me to buy one duplex or maybe two? And he was like, no, you got to take all three or I have to sell to someone else. So I was talking to my coach one day and I ran a deal by him and he was like, Hey, does he still have it? I’m like, sure. And we worked out a deal from there.
Henry:
Okay. Did you guys 50 50 partners since he was putting down more money or how’d you structure that?
Lamontis:
Well, we actually split it three ways with someone that he’s close to. We all went in three ways and took that deal down.
Henry:
So essentially you all kind of got a property out of it?
Lamontis:
Yeah, essentially. And the good thing about that deal was we bought it for three 80 and it appraised for four 70.
Henry:
Oh, nice. And did you have to renovate these properties or were they all rent ready in good shape?
Lamontis:
No, they were all rent ready in good shape and cash flowing.
Henry:
Oh man, that sounds like a great deal. So hustled and found your first deal. And what I like about this deal story is a lot of people would have stopped, they would’ve quit. They would’ve said, I can’t afford three properties, I can only afford one.
Or they would’ve said, I can’t afford to do this deal. But instead of you saying that, you said, how can I go get this deal done? And you were able to find a partner who then brought in another partner and you split the deal three ways. So I like that hustle. I think a lot of people talk themselves out of wealth. I think people oftentimes will just decide that they can’t do something given whatever circumstances are directly in front of them. But with real estate, what’s so powerful is there’s a whole lot of ways to get a deal done and you have to remain open-minded and you have to keep trying to structure something that makes sense. And I’m not saying everybody should just take on random partners, but I am saying that there are ways to take deals down and you have to have a mindset of how can I get this done versus I can’t get this done, which is one of the principles in rich step for that.
Lamontis:
And that deal got even better. So that next year we got and they appraised for 5 25 at that time, I refi it and I was able to pull the down payment back out, which set me up to continue to invest.
Henry:
Oh, so you did a whole burr on that property.
Lamontis:
It wasn’t planned, but that’s how it happened. And that’s been a foundation to my investment journey for sure.
Henry:
That’s amazing, man. So now that you had that experience buying that long-term rental, what did you do next? How did that deal help you transition into doing more deals?
Lamontis:
So that was in 2021. My next deal was in January of 22, so I guess I took the time off, but I did a flip in January of 22. I partnered on that as well with a local partner here. We bought a home for 1 38 and we put about 70 ish in there and we sold that for two 90. I think we netted about 70 k if I’m not mistaken. So we split it two ways by 35 a piece.
Henry:
I mean, that’s a fantastic flip in terms of numbers. How did you find that deal? You said you took some time off. So it’s not like you had just deals cooking
Lamontis:
And at the time I was still trying to search on the market for everything. I wasn’t as experienced, but this house in particular was sitting on the market for months, but the thing about it was listed as a two one, but it was 1700 square feet.
Henry:
I love this.
Lamontis:
And so I kept hearing about these type of deals and I’m like, Hey, well let’s go see it. Went to see it and it was basically a three bedroom and all you had to do was add a closet to make it the third bedroom. And we added a bathroom in one of the bedrooms. It was a crawl space home. So it was pretty easy to do. And basically we had a three two,
Henry:
Which obviously increased the a RV of the property, which allowed you to make more profit. Man, this is one of my favorite strategies for finding opportunities to make money. This is something like you guys can be doing, people can be doing this right now. You can look on the market, this exact strategy, look on the market for properties that have been sitting for longer than the average days on market in your market. So if the average days on market is 30 days, look for things that have been sitting longer than 30 days. But what you really want to look for is houses that the square footage number is bigger than what the bedroom and bathroom count would suggest. So if you have a two one that’s 1800, 1500, 2000 square feet, there’s space in there where you can add a bedroom and a bathroom fairly inexpensively, especially just like you said, if that house is on a crawlspace because the cost to add a plumbing in a bathroom on a crawlspace house is significantly less expensive than having to add plumbing to a house that’s on a concrete foundation. Now you don’t have to tear up concrete and floors.
And so you can literally put this criteria into the MLS or into Zillow or into Redfin, and you could have a list of potential opportunities. And why you want to do it for houses that are on the market longer than the average days on market is because those sellers might be motivated to take a lower offer. And so if you can find a property that’s been sitting for 30, 60, 90 days, 120 days, that has you look for a three two with 2000 plus square feet, a two one with 1500 plus square feet, that lets you know that there’s potential value that you can add there and then go look at those properties and make offers, you could potentially find yourself a deal where you know can add value. I love that strategy, man.
Lamontis:
Right? I still have that search criteria set until this day I got it set at two bedrooms that are more than 1200 square feet. So anytime I see a house that fits that criteria, it’s something that I definitely check out.
Henry:
Alright, we have to take a quick break, but when we come back, we’ll talk to Latis about how he started to accelerate his portfolio growth. We’ll be back.
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Henry:
Alright, we’re back with Lamonts. Alright, so you did your first buy and hold deal, you did your first flip. So how did you start to shape or accelerate your business from that point?
Lamontis:
During that 2023 year, I just started to study marketing and direct mail and I started to incorporate that into my business and that’s when I kind of took off. I was able to produce my own leads and my own deals versus waiting on something to hit the MLS and competing with everyone on that. So it just kind of took off from there.
Henry:
Okay, cool. So I think a lot of people find themselves in this boat where you do a deal or two and then you realize you get the bug right? You realize you want to increase that volume, and in order to do that you need some sort of systems, processes and procedures. And what you’re saying is you chose the route of focusing on lead generation that you can control and the more leads you can generate, the more deals you can do. But typically to do deals, you need leads and you need money. So how did you find the money to buy the deals that you were finding
Lamontis:
Financially? Personally, I tried to set myself up because I was working my W2 the whole time. So I was saving up money and I met a local hard money lender. He would lend to me at a hundred percent of the renovation and purchase price. So that significantly took my investing to another level just because I was able to take down deals without putting any money down.
Henry:
I mean, obviously finding a lender that’ll lend to you at a hundred percent is great. I assume it’s like a hundred percent as long as your LTV is at a certain point, right?
Lamontis:
For sure. Yeah. So I typically try to stay under 70% loan to
Henry:
Value
Lamontis:
Of that after repair value.
Henry:
In other words, what Lamont is saying is that as long as he is all in at 70% of the after repair value, meaning if you’re buying a property for ease of number sake, if you’re buying a property and the ARV is a hundred thousand dollars, his lender was willing to loan him up to $70,000. So Lamont would then know as long as I’m buying that property and the money I need to renovate, it falls at 70 grand or less and he wouldn’t have to bring any money. So if he was buying a property for 50 and he needed 20 to renovate it, he’s all in at 70, therefore he can get a hundred percent financing. If you were going to buy a property for 50 and you needed 30, you’d be all in at 80. That would probably mean you need to bring 10 grand to closing. Correct? Correct. Awesome. So finding a lender like that is amazing and a lot of people are going to say that’s cool for you. But how did you find that lender?
Lamontis:
Through a buddy that I have here that is a local investor as well. He introduced me to the guy and I sat down with him. I took him a folder of deals that I’ve done, showed him some before and after pictures, went over the numbers with him and just got to the point where he felt like he could trust me and felt like I was experienced enough and he decided he wanted to lend to me. Man, this is like the playbook for real estate
Henry:
Investing. What’s cool about this is really something anybody can do, right? You hustled to find your first deal. So you didn’t use money to find the lead, you just hustled, skip trace, called a bunch of people, you found your first deal, you then found your second deal on the MLS through the means that we talked about by looking for opportunity on the MLS, and you were able to be profitable there. And then you kind of documented each deal to show that you had some track record. And then when you were ready to start expanding your business, you were networking, looking for resources, and when you found a resource that might be interested in lending, you were able to basically show him, Hey, this is the kinds of deals that I’ve done. These are the kinds of returns I’ve been able to produce, so I have opportunities for you if you are looking to make a return on your investment. These are things that literally anyone can do. And I love how you have been able to kind of execute this, and I’m sure it was scary, the idea of talking to somebody and asking for money is probably scary, but how do you feel like that went for you?
Lamontis:
It went well. It was definitely scary, but it was something I knew I needed to do. I needed to find another lender if I wanted to accelerate and move at a faster rate. Before that, I was just using local banks, which is okay, but you have to bring money and it’s a slower process. So once I met with him, now I could take deals down cash.
Henry:
Man, that’s super cool. So the marketing was generating the leads, you knew you had the money coming in, so it was really just a matter of how many leads could you generate. So kind of tell us about where you are now. Tell us about your last year with investing. What does your business look like? Because it sounds like you put the pieces in place to level up. So what did that turn into for you?
Lamontis:
So the last year, I think I did 12 deals, just flips or rentals, both. I kept more than I sold. I mainly tried to buy and hold, but I started realizing fast that I couldn’t live off of that cash flow. So as of late, I got into more flipping.
Henry:
Yeah, man, a lot of the time this business is portrayed in a way that lets people believe I’m going to buy a bunch of rental properties and then I’m going to live off the cashflow and I’m going to quit my job. That can be done. It just takes a long time and a lot of properties because when you have debt on these properties, your net cashflow isn’t always super great and it depends on your market. There are some markets where you can get amazing net cashflow even now, but in most markets a hundred to $200 net cashflow per property, it’s going to take you a whole lot of properties before you can do that. And then we all realize that sometimes that gets blown out of the water when an HVAC goes out for the year or something like that. And so if you’ve got a property producing five to $7,000 a year net cashflow and then you have an unexpected expense that wasn’t budgeted for, your cashflow is gone. And so I think we all at some point realize, okay, the cashflow is great, but I don’t want to depend on that to live off of. I would much rather depend on something like flipping. And I think that’s why I got into flipping houses. And so you started doing some flips, you did about 12 deals last year. Give us a breakdown. What’s your portfolio look like?
Lamontis:
Right now? I’m at, I want to say 19 total units.
Henry:
And then about how many flips a year are you doing?
Lamontis:
I think last year I did five flips this year. I’m trying to up that to at least 10.
Henry:
Okay. So it sounds like you really did scale your business and start to level up from just doing onesie twosie deals to where now you have a consistent lead flow. Is there a deal that stands out in the last year that was kind of especially good for you?
Lamontis:
Definitely. So that was this deal that is actually in the neighborhood that I live in. And it’s something I had my eye on for a while and probably for about two years, man, I was communicating with the owner. He had a renter in there, but I would probably occasionally just pop up on his porch maybe once a month. Once a month. And he finally let me take that deal down. I purchased it at 55,000, put about 75,000 in there, and I sold that for 230,000 bucks.
Henry:
So you were all in for 1 25 and you sold it for two 30?
Lamontis:
Yes.
Henry:
Man. So what’s that about 50, 60 net profit?
Lamontis:
It was actually a little bit more because I didn’t have to put out any closing costs to the seller. It was just pure deal. I just had to pay the agent. So I actually came out around like 80,000.
Henry:
Man. I mean, that’s a solid flip folks. I mean, I’m averaging on my flips. I average about 40 to $50,000 net profit, which is pretty good. Most people are averaging around $30,000 net profit on a flip. So to make 80 plus man, lemme borrow $20, man.
Lamontis:
Yeah, man, that was my best deal. I haven’t ran into one like it since, but that was my best deal last year. And I have one more that was very similar. I purchased it for 53 and I put about 47 in there and I sold that one for 190,000 bucks.
Henry:
Okay, so the one you made 80 on that one you found just because you had been in this neighborhood seeing this guy and been working on him for a while. The second deal you talked about, was that a mail deal or was that another hustle lead?
Lamontis:
It was a mailer and it actually took me a little bit longer to take that deal down. There was some probate issues, so we had to go through court to get the deal approved. So it took us about two to three months to get it, but at the end of the day, it was worth it. It was worth the time and I was able to help her out a lot. She just wanted to be able to get off of it. So I was able to help her out a lot and it worked out for us. Bo.
Henry:
All right. We have to take another quick break, but when we come back, I’ve got some questions for Latis about other marketing strategies he’s using to find deals and how he decides if he’s going to flip a property or keep it as a rental. We’ll be right back. All right, we’re back with Latis. Let’s jump back in. Alright, so a lot of people are always interested in knowing when you get a lead, how do you determine if you’re going to keep that lead as a rental property or if you’re going to flip that property? Because that internal debate can sometimes be challenging.
Lamontis:
Sometimes that can be one of the hardest decisions to make, but ultimately it just came down to the spread that I would make if I was to flip it. Plus things like the layout of the house and the neighborhood that it’s in. So if it has a iffy layout or the neighborhood is iffy, I would just keep that. I would keep it and I would just refile out of it and just put that on the rental market. But if it say just a slam dunk and the layout is good or I could knock out a wall or just add a bedroom or bathroom or something like that, I probably would flip it.
Henry:
So essentially what you’re saying is properties that have unusual layouts, they’re harder to sell and when they do sell, sometimes you don’t sell it for as much money, but they’re not necessarily harder to rent. So sometimes it makes more sense for you to keep them when they have an unusual layout. And then the properties where you feel like you can create big value, you can maximize your profits, then you flip those because that’ll give you more cash to buy more rentals down the road.
Lamontis:
For sure, for sure. And I love the rentals because I look at those as wealth builders down the road and I’m still working. So in the beginning I wasn’t as focused on flipping and I do a lot of section eight rentals. I wanted to do something that fulfilled me and gave me purpose in this investing journey. I focus on single parents. My mom was a single mother, so these rentals, man, they just a step down from the flips that I’m doing, not the same finishes and everything, but I’m going in and I’m putting new roofs, gutting the bathrooms and renovating those new flooring and everything. So just providing a quality place to stay for those moms.
Henry:
Man, I love that man. I’m passionate about the same thing. I call it revitalization instead of gentrification. So being able to fix something up nice and provide a place with maybe nicer finishes than they would expect to have from another landlord because it gives them pride, a sense of pride living there, pride of ownership. People deserve nice finishes. Just because you’re in section eight, it doesn’t mean you don’t deserve to have a beautiful place to live. Man, I love that
Lamontis:
And I think it works. It is a win-win for me and the tenants, just providing ’em a quality place to live, someone that they’re proud of, I think it minimizes my turnover. The renovation on the front end also minimizes my repair, so I don’t have a lot of late nights maintenance calls just due to the time I took to renovate it on the front end. And also my tenants take pride in the units that they’re renting. So it is a win-win for us both.
Henry:
Man, that’s super cool, man. That’s super cool. I’m super proud of you for doing that. And a lot of people have a bad impression of section eight and a lot of the times it’s just unjust. They’ve never really done it themselves, it’s just what they hear. So I love to hear when somebody is doing it and is taking care of the tenants because I don’t care who you are, man, there are bad tenants at every price point. It’s not just that there’s bad tenants. I’ve had terrible tenants that were paying me $2,000 a month. There’s this stigma that Section eight has bad tenants. It’s not that Section eight has bad tenants, is that landlords are bad at tenant selection. And if you can get good at tenant selection, no matter what price point your rental is at, then you can have quality tenants who take care of your properties and you can provide great housing to great people,
Lamontis:
Right? Right. Yes. And that’s one thing that I studied before getting into the rental world. I wanted to know how to screen to find the best tenants possible. So I have a detailed screening process from background to credit check, income verification, even driving by and talking to old landlords. So I’m just making sure that I put the right person in there, but once they’re in there, I make sure I take care of them and the unit.
Henry:
Awesome, man. It sounds like you do a lot of direct mail. Are there any other marketing sources you’re using that seem to be working that people could take a look at?
Lamontis:
Not right now. I mainly do direct mail. In the beginning I did some cold calling just due to the lack of funds, but I figured out really quick that don’t like cold calling. The cold calling, it increases the chances of me getting cursed out or what have
Henry:
You. Yeah, that’s
Lamontis:
Fair. So I like the direct mail because it doesn’t take a lot of time and I just bring the leads to me and majority of the people that call me actually want to sell their home. So that’s my favorite B marketing.
Henry:
So it looks like you’ve been able to build a really impressive business over the last few years, and that’s inspiring for many people. So what’s driving you now? What are you moving your business towards in the next year? Are you keeping things kind of the way they’re going? What’s the future look like for you?
Lamontis:
I’m just trying to keep it around 20 deals a year. So like I said, last year I did 12, but I want to up that into 20, and that’s something that I want to do from year to year moving forward. That’s kind of around hover around that 20 point. And right now what keeps me going, like I said, is providing quality place to live for the tenants and also my family. I want to just be able to provide a quality lifestyle for my wife and my kids. So those two things right now driving. But I would also say as far as the business goes, I think right now it’s just kind of focused on the stabilization of it and just becoming more organized and developing more systems. Hired a va, so been helpful for me tremendously. So that’s kind of where I’m at, just stabilizing it, getting a grip on everything and just maintaining the amount of deals that I’m doing year to year.
Henry:
Yeah, that’s cool, man. One thing I learned this past year in 2024 was that I didn’t want to have some massive flipping business doing 50 to a hundred flips a year. I kind of realized I like the spot of about 20 flips a year, plus acquiring enough rentals to help me offset my capital gains. And that’s what I need and want just for me and my family. And I think it’s good because scaling is great, but you got to figure out how far you want to scale because big portfolios have big portfolio problems. And if you’re not prepared to handle those big portfolio problems, then this business goes from being fun to being terrifying real fast.
Lamontis:
For sure, man, I’m big on being purposeful with what I do. I like to have a purpose and I like to be fulfilled. So I knew a while ago that I didn’t just want to have this a hundred flips a year business because I didn’t want to create another job for myself. I wanted something that was manageable and that I enjoy doing on a day-to-day basis.
Henry:
And speaking of jobs, I heard you say that you still work your W2. Is that something you plan to continue to do? Are you looking to get out of it?
Lamontis:
Yeah, I’m looking to get out of it. I think this probably would be my last year there. I think I’ve gotten to the point where my cashflow from my rentals has exceeded my W2 month to month income. So along with that and the flipping, I think I’m able to pull away after this school year.
Henry:
Okay, that’s awesome. Well, I hope they’re not listening to
Lamontis:
BiggerPockets
Henry:
Before you get to tell. But no, I mean it’s super cool that you kind of took the time to build your business the right way and it gives you the opportunity, the freedom to be able to choose to leave at the right time because I’m sure having the job helps you stay bankable, which helps you be able to continue to grow your business. One last question. I heard you say you have a va. What does your team look like if you’re doing 10 flips, you want to scale to 20, do you have a big team around you?
Lamontis:
It is mainly just me. I made that one hire in the va, but I have a pretty decent construction crew that does most of my houses. So just having those and not having to search for contractors from deal to deal, man, they’ve been really, really good. If I had to get the MVP to anybody within my business, it would be those
Henry:
Guys. You tell ’em a good contracting crew is literally the missing link in this. If you have that, you can go pretty far. So I assume that these contractors are third party, so they’re on a contract basis, they’re not hired.
Lamontis:
No, no, no. They’re 10 99. And so that’s another thing that motivates you as well, because when you have these contractors, you have to keep them busy. Yes, you do. So I’m having to make sure I’m keeping deals constantly coming, because if not, they’re going to go find work elsewhere. So that’s another thing that just motivates me to keep buying. Man, that’s amazing.
Henry:
Well, Lamont is, I think your story is truly inspiring. I love what you’re doing for your family. I love that you’ve created a business that fits your lifestyle. I think that’s important for people to see because I think sometimes people feel like they need to build this business and just scale it to the moon, and that’s not necessary. You can build a business that fits and provides the lifestyle that you want and you can just try to maintain that going forward. So I love how you’ve done that. I love how you’ve done it fairly quickly, and thank you so much for sharing this inspiring journey with people.
Lamontis:
No, I appreciate you for having me, man. Just grateful again to be here.
Henry:
Thank you, Latis for joining the show today. If you think the BiggerPockets audience could learn from your own investing journey, you can apply to share your story just like Lamont did at biggerpockets.com/guest. I’m Henry Washington, and we’ll be back with another episode of the BiggerPockets podcast in just a few days. Thanks for listening.
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Making $65,000 in yearly cash flow from three rental properties?! Today’s guests are on a mission to create generational wealth, and they’re doing it with an investing strategy YOU can use to scale your real estate portfolio fast, too—small multifamily properties!
Welcome back to the Real Estate Rookie podcast! Daniel and Rebeca Hawthorne didn’t come from money, but they’re looking to reverse that trend and give their family a much better life. In just FIVE years, they have built a small multifamily portfolio of 32 rental units. How did they do it? In this episode, they’ll share how they leveraged home equity to buy their first, second, AND third rental property!
Of course, it hasn’t all been smooth sailing. Daniel and Rebeca have had a few tenant horror stories, including one that involves a fraudulent caretaker and over $30,000 in property damage. But despite all the hurdles and growing pains, they’re building massive wealth by amassing units and slowly converting long-term rentals into medium-term rentals for higher cash flow. Stay tuned to hear their full story from childhood poverty to financial freedom!
Ashley:
We’ve said it before, but real estate is one of the best wealth building strategies the beginner investor can engage in.
Tony:
And today’s guest, Daniel and Becca Hawthorne are the embodiment of that principle from growing up with housing instability as a young person building a 32 unit portfolio in just five years, it’s literally a blueprint for how ordinary everyday people can create extraordinary wealth through strategic real estate in investing.
Ashley:
This is the Real Estate Rookie podcast. And I’m Ashley Kehr.
Tony:
And I’m Tony j Robinson. And let’s give a big warm welcome to Daniel and Becca. Guys, thank you so much for joining us today. Absolutely. Thank you.
Ashley:
Well welcome to the show. I want to start off with Daniel, could you walk us through on kind of a high level your journey of getting your first multifamily property?
Daniel:
I had heard about real estate investing, had a number of friends who either had parents who got into it or they themselves did, and it seemed somewhat impossible for me. But nevertheless, I started looking at the BiggerPockets podcast. Really, I think what happened for us was that I ended up in the spot where we had some good capital coming in, and then I started to take a deeper look at the BiggerPockets forum in particular because I realized I had a lot of questions despite all the research I had done. And the forum allowed me to tailor the questions towards whatever it was that we were looking for, whether it was, hey, we need to have insurance, or how do we find an agent? How do we even identify what the right market is? Do we invest in the city we live in or elsewhere? And just got a bunch of information through that and was able to really leverage the forum to validate some of the things that I had.
And then of course, we pursued our first property, which was an eight family unit and not the best part of St. Louis. So we did decide to invest in the city we live in. And it wasn’t the best property, but the investment, the listing price and things like that, it allowed us to get into it. And it was also, it was turnkey, so it was an easy lift, so to speak. And then we had property management set up and things like that. And so I would say it was not a part of our portfolio today, but it was certainly the exact multifamily unit that we needed to get started.
Tony:
Daniel, I want to go back to something you said said it seemed impossible. And I think that’s such a big statement, but I resonate with it because I know for me it seemed like a reach when I first got started. And I’m sure for a lot of rookies that are listening, it can almost feel impossible. But for you specifically, why did it feel impossible and at what point did you realize it actually was a possibility?
Daniel:
So outside of the capital component, so this was a $300,000 eight family multifamily building. And when I say that, some people in other markets may be like, wow, 300,000, and with that many units, that’s quite the steal, but it is still quite a bit of money, especially for a new investor. But outside of that was just the fact that you’re stepping into something you’re unfamiliar with, don’t have any experience with. At the time, this was in 2020, our youngest was just 18 months I believe, and our oldest was three at the time. So two young kids bouncing off the walls. At some points, I felt like even our marriage was at risk just because that’s what happens when you have young kids. So let alone now we’re stepping into investing in something that’s going to provide housing for other people and all the sort of things that come along with that, even with property management. So it was, when I say impossible, it was because of just all the other things we had that we were juggling that was going to make this less likely to succeed in theory. But in actuality, that’s far from what we experienced.
Ashley:
Becca, why did you both decide to end up going towards multifamily as your strategy? There’s short-term rentals, there’s flipping, there’s all these different strategies. Why did you end up deciding on multifamily?
Rebeca:
So for multifamily, we sort of felt like just getting more units at once and being able to take care of them altogether at the same time seemed easier than just a door, A door all in different places. And even I have two midterm rentals in our fourplex and just being able to always be there and flip there, flip ’em about every three months, it’s just easier just to have everything under one roof.
Ashley:
I have to agree with that. When I worked for a 40 unit apartment complex, just having everything under one roof, it was you have one roof to take care of. Everything’s in the same place for one handyman to come take care of that property instead of having 40 single family homes located all around the city, there is that huge advantage. I do want to get into more of your story, but first we’re going to take a quick break and we’ll be right back after this and we’ll hear more about your investment strategy and how you guys have been able to increase your cashflow in just the last couple of years. So we’ll be right back.
Tony:
Our quotes. We are back here with Becca and Daniel, and I know for both of you, like many real estate investors, part of the motivation to get started is the desire to build generational wealth. And everyone I think strives for that for different reasons. But what does it mean to you or why is it important for you all to have that given the circumstances you guys grew up with?
Daniel:
I was born in Los Angeles, born in South Central in the eighties, which was really, really tough time to live in that part of the country. And not only that, but there was a period of time where myself, two older brothers and my mom, we were homeless and I was a little boy, but my mom would share stories with me around what that was like living in shelters and things like that. Having three boys, three little boys at the time, and being a young mom herself. And so those stories throughout my life have been motivation for me. Whenever I feel like I can’t do something or something’s impossible like I shared earlier, those are the things that I kind of look to bring out the inspiration and really to say, you know what? This was also impossible to be a black boy in South Central in the eighties to make it out to be where I am today.
At that point in time, that was also impossible. So I just have defied the odds in a lot of areas of my life. And this real estate is just another way to do that and to bring some value to our kids and the family that we’re building so that they don’t have to experience that. Certainly there are other challenges that then come with how do you not have entitled kids and all those sorts of things that come with this, but making sure that from the foundation that we’re creating, we don’t have to be in a situation. They don’t have to be in a situation where they aren’t experiencing lack of housing or situations like that.
Tony:
Yeah, and I appreciate you, Daniel, being candid with your experiences growing up because I think a lot of the challenges that we face as people shape who we become, and there are different ways to respond to challenges. You can either use them as excuses to not get better or you can use them as a motivation to find a better situation for yourself. And it sounds like you focused on the latter, but I think the question that I want to ask you that really applies to everyone that’s listening, and for all of our rookies that are listening, even if they’re not growing up in a tough neighborhood, there’s still probably people around them who don’t see real estate investing as a path to go down or who have negative ideas or limiting beliefs around what’s possible. So the question that I want to ask you, Daniel, is what do you think it was that you did differently to push out the noise, focus on what’s important and actually put yourself in a position to experience all the success that you found so far today?
Daniel:
I think once we realized that real estate was the path we felt we wanted to go down surrounding myself with individuals that had already established some level of success, individuals who were in the same stage that we were in where they’re, and then also seeking out within those groups, seeking out people who were maybe in similar stages, so maybe young parents, interracial couples, others that people of color and things like that. And what that did for us is to again, validate that, hey, this is possible. And it’s not just someone who’s been doing this for 20 years and they’ve got billions of dollars of assets. These are people who again, don’t either haven’t gotten their first deal or maybe earlier in their journey. And that I think it creates again this mindset that this is doable, this is something I can achieve. And then from there you become that person for someone else down the road.
Ashley:
That’s such great advice right there. And I’ve seen a lot of other really successful investors talk about that, how they are pretty open about how they’ve dropped friends because they don’t fit into what their goals are and they’re like as awful and as mean as that sounds, they want to surround themselves with other successful people. And there’s also that saying of you never want to be the smartest person in the room. You always want to be the person that’s trying to achieve where these other people are at and surround yourself and will help you 10 x your life, 10 x your goals, 10 x your success being around other people that you have these kind of lifestyle skills and things in common that will be able to help you achieve the success that you’re looking for. And that’s not necessarily using these people for the resources they have.
This is really just being around people who are like-minded can just change what you’re capable of. When I first started real estate investing, I didn’t know a single investor except the guy that I worked for and he didn’t even know anything about investing, he just did it as a side hustle to his regular business. And when I found just like you and I found BiggerPockets, I was in the forum every day. I’m like, oh my gosh, I can do seller financing, I can do all of these things. And it was life-changing, just being able to talk and interact with other investors. But you guys have been able to grow your portfolio over this time from three properties to 32 units altogether. So what have you been able to do to be able to create this really impressive portfolio?
Daniel:
I think to start the first property we acquired, we did do, we had a property manager. We said that hey, if we purchased anything over four units that our lifestyle was too busy and too consumed already that trying to manage that ourselves would be a failure. So that pm, although very costly, a lot of things we talk about where it’s not their property, so not necessarily bargain shopping for maintenance and things like that, whenever things have to happen or even capital expenditures and things like that, it’s not their property. So they have certainly allowed us the capacity to do more. And even with dealing with some of the tenants early on, even when we were doing some showings, we had some tenants that were asking us, Hey, are you going to be the new owner? And I got this thing that I’ve been waiting on and already trying to pull us into some of their personal things.
And that moment for the very first unit, the property manager, the projected property manager was like, see, this is exactly why you need us kind of thing. And it certainly resonated, but I think just this was also during the time where there was the eviction moratorium. So we purchased in late 2020, and so that in 2021 it was full on covid and you couldn’t evict tenants. And so tenants are very savvy, they’re very informed with some of these laws. And so tenants weren’t paying rent and they knew that they didn’t have to and they weren’t going to get evicted. Our property manager knew about the different ways to navigate that and get tenants access to funding that would cover their rent and basically filled out these forms for them and just had them sign. That’s stuff we would’ve been able to do ourselves that through that relationship with our pm, we felt like, okay, this is going well.
Next time we get some more capital to invest, let’s do it again and let’s do it again. And so we’ve scaled up quickly through leveraging, I’d say the property manager having established insurance, having a playbook for our lease agreements and attorneys and all that sort of stuff. And to the point where now we’re doing some things which Becker can share around long-term versus midterm, but also being able to take on some of this more ourselves. So in areas where we can, because of the profile of tenants or the area location of the property, it’s maybe not as busy. And so we are currently doing some self-management as well as leveraging PM for some of the others.
Tony:
And I think that’s normal to kind of see Ricky’s go from hiring a manager to do it initially to eventually bringing on a PM to help. And I want to get into some of the strategies that you guys are leveraging to really juice some of your cashflow here. But before we jump in, I think the question that might be on every rookie’s mind right now is 32 units. That’s a lot of scale in a relatively short period of time. So it sounds like guys that you just saved up for that first property, but just give us the quick overview of how you funded those subsequent transactions. I think most people can wrap their head around the first deal, but the second or the third and beyond I think is where people start to get a little fuzzy. So how did you actually fund the subsequent transactions?
Daniel:
We leveraged HELOCs throughout the entire process. Essentially. We did a HELOC on our primary residence. We had enough equity built in, so we did a HELOC on our primary residence, and we’re able to just continue paying that down through some of the cashflow and some of the commission we made from just our corporate jobs, our day-to-day jobs.
Ashley:
And when you did this, when you worked with the bank, what type of loan did you do with them? Was it just a conventional investment property? Was it 20% down, 30% down? What were the terms of the loan?
Daniel:
Yeah, so we did the first one. And so we’ve done four deals total. We did a 10 31 exchange for one of the buildings. So we’ve done a total four deals. Three of those deals have been with five year arms. And so after five years you have the big balloon payment. We haven’t hit five years for any of the ones we own today, but the interest rate, the first one was 3.7, somewhere around there. And this last one we did last year, the interest rate’s 6.2, but it’s also a five-year arm.
Ashley:
Did you do these on the commercial side of lending instead of with the residential?
Daniel:
All except one. So we have of the bill. So we had the eight family, two 14 families, and then one four family, which that one was more of the conventional. That’s a 3.26% interest. So 30 year for that one.
Ashley:
I would love for you guys to explain what you mean with a five year arm and maybe some of the differences you’ve experienced going with the commercial side of lending compared to residential side,
Daniel:
We’ve done all three of the bigger units, the commercial multifamily through US Bank. We’ve probably interviewed 15 to 20 different lenders out there. And US Bank just for us has worked and it’s come back with the best packages. And really what we look for is paying the least amount down as we can, but then obviously balancing that with interest, which then drives those monthly mortgage payments. We’ve had scenarios where maybe we don’t pay as much down, but that interest rate’s rather high and therefore the mortgage payment’s high US Bank has been really good from that perspective for us to where they have basically we take, it’s been about 20%, I’d say the first deal, 20% of the listing price was what we had to put down, but as the markets have tightened, they’ve, and also the value of where we’re going is increased. They have different limitations around how much they can lend. So the property we just bought last year was 1.4 million. The max they could do for a loan was 900 K, so it’s well above the 20% benchmark previously. But that through the interest rate that they had and the mortgage payment and everything else, it made the most sense for us.
Tony:
One of the other strategies you mentioned to help you scale was a 10 31 exchange, and I’ve done one of those as well to help move from one property to the next. But can you just give a quick overview of what a 10 31 exchange is and what did you guys sell and what did you end up purchasing with it?
Daniel:
Yeah, for sure. So essentially it’s a vehicle to, if you have some capital gains meaning, so what you’re all in on the property for what at least the IRS sees as you all in on the property for if you sell the property for something above that, then that’s considered earnings and you get taxed for that. So with the 10 31 exchange, you can put all or some of that money in a vehicle, a third party sponsor that basically allows you to sit that fund, those monies there until you find something. And I believe you have 180 days to go under contract on something, and there’s another limitation around when you have to close, but essentially you’re saying, Hey, I don’t want to pay taxes on this. I’d rather reinvest this somewhere else.
Ashley:
And how much did you pay for your 10 31 exchange? Because in my experience, they’re not relatively expensive to do and it’s worth the cost to save on those taxes.
Daniel:
So we’ve done one and it was a few hundred bucks, very inexpensive.
Ashley:
So let’s talk about cashflow. Can you guys break down some of the numbers? How were the properties performing and kind of give us a little insight into that.
Daniel:
I think with our strategy changing, which I think we’re going to get to probably here in a second, we’ve realized some different things. Basically if we’ve continued to operate the way we are or had been, which is all long-term tenants, the cash flow, it is going to take us a little bit longer to get to the cashflow goals that we have. And essentially we were about the first year for all properties, and this is kind of one of the expectations sometimes people set is don’t expect to make a lot. There’s taking over a property, there’s some learnings that you have, tenants are going to go maybe because different things, different management, all that kind of stuff. And so just being patient. So because we’ve purchased the property over the past four years, once one property every year, that’s kind of continued to have that situation where at least our recent acquisition we see a loss for. And once you get more mature, we’ve seen about a hundred to 125 per door on what our long-term units. So multiply that by 32 units per month, and then we’ve shifted recently to furnished midterm units. That’s allowed us to really magnify our cashflow and really optimize a lot at the same time.
Ashley:
So now that you have these properties and you’ve built up this successful portfolio, it seems like Daniel, you kind of took the lead as to being the person that wanted to start in real estate. So Becca, how have you been able to integrate yourself into helping build this portfolio?
Rebeca:
I was working in healthcare during Covid, just the regular hours. And then we had our two daughters and well, actually I was pregnant, so I left the hospital and whenever I did that, our CPA was like, Becca, if you’re interested, it would really help you guys if you would get your real estate license. The first year I wasn’t able to get it in time. We ended up just calculating my hours and logging everything, which was sort of difficult. And then the next year I was able to get my license, which was helpful. And then it also is very helpful because whenever we’re looking at properties, just cutting the middleman out and being able to just do all the things, having direct contact with people selling the properties and such was very nice. And then my broker, I actually ended up asking our property management that broker, and he’s like, oh yeah, I’ll hold your license.
I’m like, okay, well, I’m just doing this for us. I’m not going to be doing it for I other people in homes, but it’s a nice little group of investors. So it’s fun and I learn a lot from all of them. But then, yeah, so then after I got my license, I became a little bit more involved. And what were we you doing to where your friend mentioned I wanted to do midterm, I wanted to furnish, I really wanted to furnish some stuff. And he said, yeah, you can list it on Furnish Finder. So we renovated and furnished our first unit in a fourplex listed it, and I had so many healthcare providers from covid, it was just nonstop. I think we were charging a thousand for a unit, and then I listed it for 2000 and for two years with barely any vacancies, maybe two weeks in between if that, sometimes I would have ’em the next tenant moving in the next day.
But yeah, I even had one that was three month, and then they kept resigning for a year and they had their baby in there, and I saw the little baby become 1-year-old. I’m like, oh, wow, that’s a long time that you guys have been here. And so that was pretty awesome. And then we did it again and kept him busy and filled. I dropped it down a little bit just once Covid sort of leveled out because the nurses and, well, not just nurses, all the healthcare travelers were getting paid a little bit less. And I joined Facebook groups and would talk to traveling nurses and sort of just sort of see from the outside in and look at what was going on, if they were getting paid more, what they wanted in their units and that kind of stuff. But really they were on there just to look for furnished places. So yeah, I would get my leads from Finder. And then most recently we switched over and started using apartments.com and I still get my leads from Furnish Finder, and then we sort of use apartments.com to manage and collect rent and all that. It just makes it easier to have it all together, but oh yeah. And then I just did another one. So I furnished another unit in January.
So now we have three midterm rentals that are doing pretty well. I really like to do all the handy stuff myself. I sort of grew up doing it. My dad was a contractor, and so that’s been fun. And my first one, I actually flipped completely myself with my little cousin on winter break. He helped me out and I gave him some cash and gave him an extra set of hands. And we did that in eight weeks and we gutted it.
Tony:
I love that, and I love that you guys are experimenting with different strategies. And again, I feel like that’s a hot button topic right now for rookies is asking the question, well, where can we get the best returns? And Daniel, you mentioned earlier, one 20 to 1 25, somewhere in that ballpark per door on the long-term side. And if you can exponentially increase that number with a little bit more work furnishing the place, getting it renovated, it may be worthwhile. Do you guys anticipate, because you said right now Beckett’s three out of the 32, do you guys anticipate converting more of your current long-term over to the furnish to midterm?
Rebeca:
Yeah, I think so. I think also from what I’m seeing, a lot of young professionals, they don’t really have the cash to put down furniture, but they want to live in that really cute space and make it feel like home. And I think not only just traveling healthcare providers, but just people wanting furnished property, they’re liking. And with the healthcare providers too, it’s like the pretty low key tenants. They just sleep or work and pretty respectful of our stuff. And I mean, after several years, I don’t really have to fix, nothing’s really been broken, and I really try to get furniture and textiles that we will stand the test of time to sort of help with that, but I think we’ll keep doing it if we can.
Daniel:
Yeah, we looked at short term, the whole Airbnb, VRBO style, and then with all of the uncertainty around that market, but then just hearing different things go on in some of those units knowing that you’d have to potentially turn over a unit or clean the unit daily, all those things really turned us away. And so meanwhile, St. Louis is a pretty big hub with traveling healthcare professionals. There’s a shortage of them, and so they’ll bring ’em in and looking for a place to stay. And so what better place to stay than what we have to offer? And I think in addition to that, Becca loves to bargain shop, and so she’s going to Restoration Hardware or Pottery Barn
Rebeca:
Outlet, pottery Barn outlet
Daniel:
Finding stuff and saying, oh, this would be good for a future unit now. I’ll be like, I’m numbers guy. I’m like, well, we don’t have that unit right now, so even though it’s 90% off, we don’t need that furniture. And so it’ll just sit in our basement until we’re ready to use it,
Rebeca:
Or we switch out furniture in our house a lot. I’ll buy furniture and we’ll put it in our house and be like, eh, well we don’t need that anymore, so we’ll push it off to the unit. So that’s fun.
Tony:
I’m laughing because we have the same conversation in my household, and it’s like my wife will buy things for properties that don’t yet exist, and then they just live in our garage for months at a time. And we actually, we just cleaned out the garage not too long ago. We ended up giving away blinds that only fit a certain specific window, and it’s like, yeah, we got to get rid of some of this stuff. But I want to go back to one thing you mentioned was like, Hey, it was your tax professional that encouraged you guys to, or for at least one of you to go out and get your real estate license for Ricky’s that are kind of unfamiliar with why your tax professional encouraged that. What was the benefit of you guys doing that
Rebeca:
For the tax cuts? Pretty much she said, well, Rebecca, if you can make this your job, your career, then we can give you more tax breaks, which is great. Whenever you see it on the paper before we turn in our taxes, it’s like, oh, wow, okay, this is really helpful.
Daniel:
So I have a full-time corporate job. And essentially she said, Hey, Rebecca stopped working before we had our second daughter, and she’s been doing some stuff on the side, started her own design business, which ties back into what we’re doing here. But essentially because of that, our CPA said, Hey, you know that you could be a real estate professional. You just got to demonstrate 750 hours a year, which not having a full-time job you can do, obviously me having a full-time job, that would be a little red flag, right? Like, Hey, this person’s not doing that. And so that first year we heard about it, our CPA basically said you could save $20,000 in taxes if Becca was a real estate professional. And so think probably the next week Becca’s signing up to get into that program.
Ashley:
Well, we have to take our last ad break, but we’ll be back with more after this. Okay. Welcome back from our break. So I did hear that you guys had a very unfortunate tenant situation that cost you $30,000 on one of your recent acquisitions. How did you handle that and what actually happened with this tenant?
Daniel:
Yeah, so we bought what is by far our best property so far. And this was one that we were very excited about. The day after we closed, I get a call from the seller that said, Hey, we need to talk, got some just information I want to share you. Nothing big but just got to update you. And what he shared was that there’s a tenant that had basically a fraudulent caretaker in the unit, someone who was supposed to be taking care of this elderly tenant but didn’t have the credentials. Ended up being someone who was more of a nuisance and had been doing drugs in the unit, had been threatening other tenants, and all sorts of things had been going on. They had a right to possession with an attorney that it was supposed to happen within weeks of us taking over the property. That didn’t happen because there’s just so much that has to go into actually taking possession over property and also depends on the state that you’re in. And so two or three months of multiple calls with the attorney going to the unit ourselves, multiple calls with the police
Rebeca:
And the tenants always keeping us updated too. They were always letting us know what was happening around with that guy.
Daniel:
Tenants moving out because of it, they just couldn’t deal with it anymore. And essentially it was just someone who said, Hey, I don’t have the credentials to get paid for taking care of this tenant, so I’m just going to destroy this tenant’s unit to get my money’s worth. That was effectively what he told the tenant. And the tenant was sort of hostage. They were not fully disabled, but this person actually nailed a two by four on the other side of the single door that got you into the unit. And they also nailed the windows so that way no one could get in. And if they needed to get out, they could drill unscrew the two by four that was on the window and they would climb through the window. But this elderly guy couldn’t really do that. So it was just a very,
Rebeca:
Yeah, he was actually in a wheelchair and one night sent us a video of the wheelchair that was down the basement steps. So that was sort of scary for us. We were worried about our tenant. So
Daniel:
Yeah, so it was months of these stories tenants moving out, and it was definitely not the highlight of our investment at that time. And so finally we got past it. The individual ended up being out of the unit, threatened someone, had some drugs on him, and that resulted in that the police coming out. And because of the drugs, they actually booked him, they took him him to jail, and they said, Hey, he’s probably going to be released in the morning. This was late at night, 11:00 PM I believe he’s probably going to be released in the morning. Whatever you need to do, do it now. And so myself, and we did have the previous property management, they were kind of helping out as they transitioned. And so myself and that, the lead guy over there, we went to the actual tenant and said, Hey, what’s going on?
Got his side of the story and just we’re like, Hey, do you want this person in here? He said, no. So we had him file a restraining order, and that ultimately is what allowed us to keep this guy who was the fraudulent caretaker away. And from that point on, we still had to go to court to make it official. And then that was sort of our finally, at least them in the unit. They both transitioned out, but then we had a bunch of damage to address, and that’s where Becca’s handy, handy woman work came in. And we spent another, I’d say basically turning, there was
Rebeca:
A motorcycle in the kitchen and diapers were shoved in the wall. For some reason we don’t.
Daniel:
Yeah, it was, they had street signs. They had
Rebeca:
Oh yeah, street signs they stole, which the police couldn’t prove that he stole. Yeah,
Tony:
It was a lot. We’ve heard some interesting stories, but that’s got to be one of the more interesting, it’s not even a tenant issue, it’s someone that the tenant
Rebeca:
Hired this
Tony:
Issue, which is all the more interesting. Just one other question, just from my own understanding. The lease was signed with the disabled person in the wheelchair, not this caretaker, right? Correct.
Rebeca:
Yeah,
Tony:
It’s interesting.
Rebeca:
Pretty much a squatter, the other guy.
Tony:
Oh, okay. Is that how they would handle it? It’s interesting that they could squat in a unit that someone else has assigned lease for, and it wouldn’t be easier for you guys to get ’em out. I’ve never experienced anything like that. Ash, I don’t know if you have, but I guess just going through that experience, guys, I mean, I don’t know if there is a way that you could have avoided that or handled that differently, but I guess were there any lessons you learned going through that experience that you would apply to any future deals or transactions?
Daniel:
Yeah, fortunately, it’s one of those things where there’s some protections you can do. One is extra, extra due diligence, making sure you check every unit, getting the leases up front, all this. But even with that, so in this case, and they don’t necessarily, they don’t call ’em squatters because squatters someone who took possession of a property that they didn’t have necessarily, and then they established residency over time, whereas this case, they were invited by the tenant to be there. They kind of had a key. So they’re considered a tenant at that point. And so in the state of Missouri, there’s just not a lot of laws around that. I know Texas recently passed something that in these types of scenarios, there’s more protection, but that doesn’t exist in Missouri.
Tony:
We talked about this in the podcast, gosh, I dunno, maybe 18 months ago, give or take, but there’s a guy, I think he was a previous bounty hunter. Do you remember this? Ashley? And he started this service?
Ashley:
Yeah, he has a really cool name. What is it? It’s like flash or something, I dunno.
Tony:
Yeah. Some name that you would assume would do a job like this, right? Just like a real cool guy name. But he would basically squat on squatters so landlords could pay him. And then he and his team, they were all, again, they were like bounty hunters, ex-military, some sort of field like that. They would observe, get to know when they go in, when they go out. And when the squatter would leave the property, they would go in, break in and squat on top of him and just live there until the person moved out. And he had done it multiple times with multiple different squatters, and the success rate was like 100%. So I guess for anyone that’s listening, that needs a, I wouldn’t say a nuclear solution, but if you’re looking for maybe a creative way to get a squatter out, go find someone who’s a better squatter than they are to kind of invade their space.
Daniel:
Oh, that’s great. I wish we had known the ideas we came up with that we didn’t go through with were put a snake in the unit.
Ashley:
Well, you definitely had a tricky situation where there was an actual tenant in there that wasn’t giving you problems, and then it was just the caretaker. But thank you guys so much for joining us today and sharing your story. Can you let us know where everyone can reach out to you and find out more information?
Daniel:
Yeah, absolutely. So my email is Hawthorne d [email protected]. Facebook is Daniel Hawthorne. I am off all other social media, but those are the ones that I have right now on LinkedIn is the other social media.
Rebeca:
Oh, I don’t really look at my email that much, so just connect him and then he’ll let me know if you need me.
Ashley:
We really appreciate you both taking the time to come and share your experiences here with us on the Real Estate Rookie podcast. I’m Ashley. And he’s Tony. And we’ll see you guys next time.
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Whether neutral and calm or boldly colored and shaped, tile choices keep expanding. New tile collections at The International Surface Event (TISE) and at the Kitchen & Bath Industry Show (KBIS), both held in Las Vegas earlier this year, displayed eye-catching, statement-making products along with more subdued selections. Tile designers are creating collections that are reflecting handmade and throwback home design trends.
“It kind of focuses on that handcrafted feel,” says Shelly Halbert, director of product design for Marazzi. “We see people are going back to more of the nostalgic, handcrafted, eclectic blends of different types of things in the house. You might have a little bit more traditional, but then you have a pop of art. So we’re seeing a lot of blending.” Here are the latest trends in tile, with some products already out and some arriving later this year.
This article was originally published by a www.houzz.com . Read the Original article here. .
Tackle These To-Dos Over a Weekend
Wash windows. Clean the grime off glass inside and out for a lighter, brighter home indoors and increased curb appeal outdoors. Wash the exterior windows yourself by using a hose attachment, or hire a pro to get the job done.
Clean gutters and downspouts. After the last frost has passed, it’s important to have your gutters and downspouts cleaned and repaired. “Clogged gutters and downspouts can cause the wood trim at the eaves to rot, and that can invite all kinds of critters into your attic space,” Sedinger says.
Having your gutters and downspouts cleaned early in the season can also help prevent damage from spring rains. “Gutters and downspouts should be clean and running free,” Sedinger says. “If your downspouts are installed properly, water is diverted away from the house so that no water collects around your foundation.”
How to Clean Your Gutters and Downspouts
This article was originally published by a www.houzz.com . Read the Original article here. .
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When it comes to real estate investing, knowing the true value of a property is everything. Overpaying for a deal can destroy your returns while undervaluing a potential investment could mean missing out on profitable opportunities. The best way to ensure you make data-driven decisions is by running accurate real estate comps (comparable sales).
While many investors rely on free tools or outdated MLS listings, serious investors turn to PropStream—a platform designed to provide real-time property data, nationwide MLS-level comps, and deep market insights.
In this guide, we’ll break down how to analyze property values accurately, avoid risky deals, and maximize your profits.
What Are Real Estate Comps, and Why Do They Matter?
Comps (short for “comparables”) are recently sold properties similar to the one you’re evaluating. By comparing your target property to similar properties in the same area, you can determine its fair market value, estimate potential resale or rental income, and avoid overpaying.
However, not all comps are created equal. The key to an accurate valuation is ensuring your comparables:
- Are similar in size, age, and condition to the property you’re evaluating.
- Have sold recently (ideally within the last three to six months).
- Are in the same neighborhood (avoiding different school districts, ZIP codes, or major streets).
- Have similar amenities and upgrades (a fully remodeled home versus a fixer-upper won’t be an apples-to-apples comparison).
Why PropStream Provides the Most Accurate Comps
Many investors rely on Zillow, Redfin, or county records for comps, but these sources often lack key data points, miss off-market sales, or have outdated property details. This can lead to bad investment decisions based on incomplete or inaccurate information.
Here’s why PropStream is the best tool for analyzing property values:
1. MLS-level comps without needing an agent
PropStream gives investors direct access to MLS sales data, allowing you to pull comps just like a real estate agent would—without needing a license. This includes:
- Active, pending, and sold listings for a full market view.
- Off-market sales (which platforms like Zillow don’t always capture).
- Adjustable filters to refine your comps and exclude irrelevant properties.
2. Nationwide data for any market
Unlike many MLS tools that only provide local data, PropStream lets you analyze property values in any market nationwide. Whether investing in your backyard or looking at out-of-state deals, you can evaluate properties with the same level of detail anywhere in the U.S.
3. Automated comping features for faster, smarter decisions
Manually sorting through comps can be time consuming and prone to human error. PropStream’s built-in comping tool allows you to:
- Automatically pull the best-matching comps based on location, recency, and similarity.
- Adjust property features (like square footage or lot size) to fine-tune values.
- Overlay market trends and pricing insights to predict future values.
With these tools, you eliminate guesswork and ensure valuations are accurate before making an offer.
How to Use PropStream to Analyze Property Values
Step 1: Search for your target property
Enter the property address in PropStream to access instant details such as ownership history, mortgage information, tax assessments, and previous sale prices.
Step 2: Access the “Comps & Nearby Listings” tool
Navigate to the Comparables & Nearby Listings section to find:
- MLS sales data (including closed, active, and pending sales).
- Public record sales (to capture off-market transactions).
- Rental comps (for BRRRR investors and rental property analysis).
Step 3: Filter and adjust comps for accuracy
Use PropStream’s filters to refine your comps based on:
- Sale date (prioritizing the last three to six months).
- Distance from the subject property (within half to 1 mile for urban areas; slightly wider for rural areas).
- Property type, square footage, bed/bath count, and condition.
Step 4: Analyze trends and adjust for market conditions
PropStream provides market trend overlays, showing how prices have shifted over time. If the market is cooling, you might need to adjust your valuation downward. If demand is rising, the property may appreciate faster than expected.
Step 5: Make a data-backed offer
Once you’ve determined the property’s fair market value, you can calculate your maximum offer based on your investing strategy. Whether you’re flipping, wholesaling, or holding as a rental, PropStream helps ensure you never overpay.
How Accurate Valuations Save You Thousands
Without accurate comps, investors risk:
- Overpaying for a property and losing profit on resale.
- Underestimating renovation costs by comparing to higher-end homes.
- Using outdated or irrelevant data that skews market value.
- Missing out on deals by not seeing hidden opportunities in off-market transactions.
Using MLS-level comps and nationwide data, you can confidently analyze deals and ensure you invest in properties with the highest profit potential.
Data-Driven Investing Wins Every Time
In real estate, guessing leads to losses—data leads to profits. Leveraging advanced comping tools allows investors to eliminate uncertainty, analyze property values precisely, and secure the best deals without overpaying.
If you’re serious about avoiding bad investments and maximizing returns, PropStream is the ultimate tool for making intelligent, informed decisions every time.
Prices for inputs to new residential construction—excluding capital investment, labor, and imports—were up 0.6% in March according to the most recent Producer Price Index (PPI) report published by the U.S. Bureau of Labor Statistics. The increase in February was revised upward to 0.7%. The Producer Price Index measures prices that domestic producers receive for their goods and services; this differs from the Consumer Price Index which measures what consumers pay and includes both domestic products as well as imports.
The inputs to the New Residential Construction Price Index grew 1.3% from March of last year. The index can be broken into two components—the goods component also increased 1.3% over the year, with services increasing 1.3% as well. For comparison, the total final demand index, which measures all goods and services across the economy, increased 2.7% over the year, with final demand with respect to goods up 0.9% and final demand for services up 3.6% over the year.
Input Goods
The goods component has a larger importance to the total residential construction inputs price index, representing around 60%. For the month, the price of input goods to new residential construction was up 0.5% in March.
The input goods to residential construction index can be further broken down into two separate components, one measuring energy inputs with the other measuring goods less energy inputs. The latter of these two components simply represents building materials used in residential construction, which makes up around 93% of the goods index.
Energy input prices fell 3.9% between February and March and were 14.9% lower than one year ago. Building material prices were up 0.8% between February and March and up 2.7% compared to one year ago. Energy costs have continued to fall on a year-over-year basis, as this marks the eighth consecutive month of lower input energy costs.
Metal products used in residential construction saw the largest price increases in the month of March. Across all inputs to new residential construction, ornamental and architectural metal work increased the most, up 21.0%. Ornamental and architectural metal work products increased 11.2% on a month-to-month basis, by far their largest monthly increase for the product, with the next closes being 7.9% back in October of 2021.
Input Services
While prices of inputs to residential construction for services were down 0.1% over the year, they were up 1.1% in March from February. The price index for service inputs to residential construction can be broken out into three separate components: a trade services component, a transportation and warehousing services component, and a services excluding trade, transportation and warehousing component (other services). The most significant component is trade services (around 60%), followed by other services (around 29%), and finally transportation and warehousing services (around 11%). The largest component, trade services, was up 0.7% from a year ago. The other services component was up 1.6% over the year. Lastly, prices for transportation and warehousing services advanced 3.6% compared to March last year.
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If you’ve been watching the markets and wondering why mortgage rates remain stubbornly high—despite whispers of economic softening—you’re not alone. It’s mid-April and many expected mortgage rate relief by now. After all, inflation has cooled, and there’s been talk of eventual interest rate cuts.
And yet here we are. The 30-year fixed mortgage rate continues to hover near 6.5% to 7%, remaining well above where many anticipated it would be by spring. It’s tempting to point to President Trump’s tariffs as the primary driver, but is that really the full story?
Even before yesterday’s Treasury sell-off, upward pressure on 10-year yields was already building. The events of April 9 simply accelerated a trend that was already underway.
It turns out that part of the answer may lie in the intricate—and risky—world of hedge fund trading, specifically a strategy known as the basis trade. While this might sound like something pulled from an episode of Billions, it has very real consequences for real estate investors like you.
Let’s break down what’s happening and how you can navigate the uncertainty.
The Scene: Hedge Funds, Leverage, and the Basis Trade
Imagine a hedge fund borrows billions through the repo market—a short-term lending market backed by securities—to buy U.S. Treasury bonds. Simultaneously, they sell Treasury futures to lock in a small price differential. The idea? Pocket the difference between the cash bond and the futures contract.
But here’s the catch: These trades are highly leveraged, often by a factor of 15 to 20. According to the Treasury Borrowing Advisory Committee (TBAC), as cited in ZeroHedge’s April 8, 2025, article “Absolutely Spectacular Meltdown,” “20x appears to be a good approximation of leverage typically used in these trades.”
When markets are calm, this can generate modest gains. But when things shift? Losses are magnified. That’s what happened in early April, when the 10-year U.S. Treasury yield, after dipping to a low of 3.89% on April 6, 2025, at 7:30 p.m., reversed course and spiked sharply higher, according to the Federal Reserve Bank of St. Louis (FRED Series DGS10).
Act One: Bond Dump Sparks Rate Surge
In just two days, the 10-year Treasury yield surged from 3.89% to 4.38%—a 49-basis-point swing. This rapid rise in yields triggered significant losses on these basis trades. Since bond prices move inversely to yields, leveraged hedge funds were suddenly underwater. To meet margin calls, many began liquidating large positions in Treasuries, creating further selling pressure.
That’s where real estate investors start to feel the pain.
Mortgage rates are closely tied to the 10-year Treasury yield, typically with a spread of about 1.5 to 2 percentage points. With yields above 4.3%, mortgage rates remain elevated. Instead of dropping toward 5%—which many hoped would improve affordability and stimulate activity—we remain locked in at levels that continue to sideline potential buyers.
According to Altos Research’s April 4, 2025, Weekly Market Report, the national median list price sits at $449,000, up 5% year over year. But homes are lingering on the market longer—averaging 111 days, a 4% increase from last year. Elevated mortgage rates are a key reason buyers are hesitant to pull the trigger.
Act Two: Sentiment Slips and Price Cuts Rise
The market doesn’t like surprises—especially when headlines reference “Investors Fear Another Big Blowup of Basis Trade as Treasuries Lose Haven Status.” As hedge funds rush to unload Treasuries and trading liquidity dries up, buyer confidence in the housing market can take a hit.
Per the same Altos report, inventory has grown to 691,171 active listings, a 39% increase year over year. Pending sales are up 23% YoY, totaling 72,191.
But the real signal of hesitation? Price cuts. Roughly 35% of listings have seen reductions—17% more than this time last year.
Uncertainty breeds caution. Buyers see volatility in financial markets and take a wait-and-see approach. For you as an investor, this could mean longer holding times, fewer offers, and increased competition among sellers. It’s not a collapse—it’s a cooling-off period, with some investors considering strategy adjustments.
Will the Fed Step In?
This isn’t the first time a basis trade shakeout has disrupted the market. We saw similar episodes in 2019 and 2020, which prompted the Federal Reserve to intervene through emergency lending and market stabilization tools. The April 8 ZeroHedge article suggests the scale of the current situation—estimated at $1.8 trillion to $1.9 trillion in leveraged positions—could justify another round of support, possibly via the Standing Repo Facility or a variation of Operation Twist.
But until that happens, Treasury yields—and, by extension, mortgage rates—may remain elevated. For real estate investors, that means staying alert and data-driven.
What Can You Do as a Real Estate Investor?
In a market shaped by forces beyond the usual supply-and-demand dynamics, self-directed investors must stay informed and agile. Here are a few steps you can take.
Track key indicators daily
Keep an eye on the 10-year Treasury yield (FRED DGS10) and SOFR swap spreads (available via the New York Fed or trusted financial data providers). These offer real-time insights into rate movement and market liquidity.
Leverage real estate market data
Altos Research shows inventory is up, and price cuts are becoming more common. That could be an opportunity to find motivated sellers, negotiate better terms, and enter the market in a stronger position.
Explore tax-advantaged strategies like 1031 exchanges
If you’re navigating today’s market with appreciated property, you may consider a 1031 exchange to defer capital gains taxes and reallocate into income-producing real estate. Equity Trust Company, a leading self-directed IRA custodian, has resources to help you understand options for your broader investment goals. You can learn more at GetEquity1031.com or through trusted sources like BiggerPockets.
Final Thoughts
Mortgage rates haven’t come down because real-world hedge fund activity—particularly the unwinding of risky basis trades—is driving Treasury yields higher than economic conditions alone would suggest. What looked like a small drop to 3.89% on April 6 quickly reversed, due in large part to aggressive bond sales in a fragile market.
But as an investor, you’re not powerless. By staying informed, you can continue building your portfolio—even amid volatility.
Here’s to navigating wisely, investing intentionally, and staying ready for opportunity—no matter what Wall Street throws your way.
BiggerPockets/PassivePockets is not affiliated in any way with Equity Trust Company or any of Equity’s family of companies. Opinions or ideas expressed by BiggerPockets/PassivePockets are not necessarily those of Equity Trust Company, nor do they reflect their views or endorsement. The information provided by Equity Trust Company is for educational purposes only. Equity Trust Company, and their affiliates, representatives, and officers do not provide legal or tax advice. Investing involves risk, including possible loss of principal. Please consult your tax and legal advisors before making investment decisions. Equity Trust and Bigger Pockets/Passive Pockets may receive referral fees for any services performed as a result of being referred opportunities.
Equity Trust Company is a directed custodian and does not provide tax, legal, or investment advice. Any information communicated by Equity Trust is for educational purposes only, and should not be construed as tax, legal, or investment advice. Whenever making an investment decision, please consult with your tax attorney or financial professional.
The role of Equity 1031 Exchange, LLC (formerly Midland 1031, LLC) as Qualified Intermediary is limited to acting as qualified intermediary within the meaning of Regulations section 1.1031(k)-1(g)(4) for Federal and state income tax purposes. In this regard, Equity 1031 Exchange is not providing other legal, investment, or due diligence services. The taxpayer/exchanger must direct all investment transactions and choose the investment(s) for the exchange. Nothing contained herein shall be construed as investment, legal, tax, or financial advice or as a guarantee, endorsement, or certification of any investments, legal effect, or tax consequences of the transfer, conveyance and exchange of the Relinquished Property, and/or the Replacement Property.
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Tariffs are now on PAUSE! And just like that, the stock market is flying back up again. Is this a signal for us all to breathe a sigh of relief, or is more market volatility coming our way? It’s been a wild week so far, and it’s only Thursday! Just yesterday, President Trump paused new reciprocal tariffs on dozens of countries, with markets slingshotting back up as a response. So, are we doing anything different with our investments now that things are slightly more stable?
We’ve got Amberly, Mindy, and Scott (with a mustache!) on the show to discuss how these new tariff pauses have affected their investments, portfolio, and FIRE investing plans. Amberly, our Canadian of the group, brings a valuable view as someone who is directly seeing how US tariffs impacted her country. Will America remain the economic superpower we’ve long been, or will tariffed countries quickly form new alliances? Is that good for YOUR future investments?
What about interest rates? With more theories that President Trump is making these moves to lower rates, could your next mortgage get more affordable? Or, will lower rates plus tariffs trigger serious inflation—or potentially even deflation? This news brings a lot of “what ifs,” and if you’re confused, fret not; we’ll explain it in this bonus episode.
Click here to listen on Apple Podcasts.
Listen to the Podcast Here
Read the Transcript Here
Watch the Episode Here
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In This Episode We Cover
- The new tariff pause and why markets sprung up (massively!) on Wednesday
- How we’re investing (right now) during all this stock market hysteria
- The long-term trade risks that affect all Americans after these recent tariff proposals
- Will interest rates fall with this much volatility; could a new Fed chair force lower rates?
- One major flaw with the “manufacturing boost” theory that comes with new tariffs
- Incoming inflation AND deflation risks as prices rise but American budgets shrink
- And So Much More!
Links from the Show
Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page!
It could be the living room, kitchen or your master bedroom — whatever the space, if there’s one room you’d love to have feeling finished, an interior designer can help make that a reality. Instead of waffling over the hundreds of tiny details that go into decorating a space, an interior designer can guide you with confidence, editing your options so the entire process feels more streamlined. And (perhaps most important) when you opt to work with an interior designer, you’re committing to actually finishing the project once and for all.
The owners of the home shown here hired designer Ashleigh Weatherill to decorate their family room. Using several of the clients’ existing pieces and bringing in a few custom-made items, Weatherill was able to create a polished space that the homeowners will be reveling in on holidays and other special occasions.
See more of this updated traditional family room