What's up everyone. This is ne ye ale host of the, a Cabo home financial freedom mastermind group. This group meets virtually every Wednesday at 7:00 PM Eastern and the members of this group are committed to achieving financial freedom. Well before the traditional retirement age. So in this podcast, you are gonna get VIP access to the conversations we have about different forms of investment and creative ways to get your dollars working harder for.
Then you originally worked to obtain those dollars. I am pumped to have Jason and guy and join us. And Jason is actually an investor based out of the Virginia area, DC, who has been in real estate investing for. Just under a decade, actually got his start in the restaurant industry, switched over to being a full-time realtor and investor in the Virginia and Georgia area.
And Jason has done everything from long distance fix and flips to bird deals to long term rentals, short term rentals, both at a distance and close to home. And so, so excited to have you here, Jason, thank you for joining us. Oh, thank you so much for having me here. And yeah, I'm excited to, you know, be able to share everything. I, I know so far everything that happened to pass, so that way, you know, people can maybe do the same thing or better than me. Hey, come on.
Now we gotta pass the torch and, and keep the knowledge coming and, and truly from the conversations that we've had off. I've truly taken a lot and learned and, and taken notes. And there's things that I'm implementing on a day to day from you. And I'm happy that the listeners are gonna get to get those same takeaways. And so to start this off, I really want to take it back before you got into the real estate investing to understand what were you doing prior to real.
Well, I was in college back in the day. Actually I got into room, stay investing the very first before I, I got into the restaurant industry. So I purchased a townhouse little townhouse near a university that was at. And then I, because I was, I figured out that, that the student dormy situation wasn't, you know, wasn't good at all. And did it pay more than, you know, what it's supposed to be?
So I purchased a little townhouse and then I, you know, I let people come in, rent out room by room and I was making money at a time. So after my, my first investment property, I jump into a restaurant in. So I purchased this small restaurant in a little Vietnamese, Vietnamese town, Vietnamese community. And you know, I, I was, I was working 12 hours a day, man. I was, I was burned I thought that was a, I thought that was an easy cash flow.
The margin was great, you know, but then after a few years, and I was like, oh man, I, I don't have any time. I literally spent all the holiday 9:00 AM till 9:00 PM at the restaurant, Monday through Sunday, I literally had no time to myself. So I was like, oh man, it's it's time to, you know, let it go. And then, you know, start building something that will generate passive income, even, you know, even if you Don. Even if you don't work, it still make money for you.
So that was something that I was trying to build after the restaurant life AB. Absolutely. And, and what you mentioned just now is a true insight, right? Cause you know, I talk to others that work in the restaurant industry and you know, typically it's those that are doing more hourly work, not the owners. So as an owner, you said you were working like 12 hour. Oh hours a day, man. Cuz I was a manager as you know, you know, people call off all the time.
I had a restaurant at nine employees and you know, people come in and Hey, I can't make it today. You know, all kinds of excuse. And I had to fill in that gap. You know, I, I gotta be the guy who go back there, wash the dishes, take the trash out, do all, all this kind of stuff. You know, everything that, if we're missing somebody at a restaurant, I'm the owner I had to fill that gap up. Absolutely. It was just literally burning man. It's it's crazy.
You know how the restaurant life is, especially at the, the noon time where our customers come in and then. Yeah, we, we got like the whole restaurant was like in, in a rush, you know, yeah, yeah. We, we were like, oh my God, we dunno what we're doing over here. so I was literal. I was literally burned. I was literally burned at 12 hours a day. And I, and I know, you know, just from our conversations before. How that helped to push you more into the real estate space.
But what I didn't know is that you purchased a property before even getting into the restaurant industry. So can you tell us a little bit more about this town home? What gave you the courage to while in college go purchase this town home? and then before sight to rent out rooms and, and what did that look like?
Well, it's, it's kind of like, you know, before, before I was, you know, ever get into this whole real estate or restaurant business kind of thing, I, you, I was always just gonna get my degree, graduated, go work nine to five, make the money and that's it. But then when I fir I first Purchas. My, my very first homes. A couple years ago, I met this realtor and he basically told me all these kind of audit the whole idea about passive. You know, like passive income equity, all that kind of thing.
I've never heard of, you know, nobody has ever told me about that before. So I was like, okay, if, if that's the case, and this is something that can, you know, I can do as a side hobby, you know, while I was in college, I figure out the little student dorming situation. People complaining about all the time. So I was like, oh, how about purchase a low townhouse?
It has all kinds, you know, all the rooms, if you would get their, their own privacy, you know, they rent out for the same price or a little bit cheaper than that. And, you know, I pur I purchased a home. I furnished the common areas and I rented out and I make, I was making about 900 to a thousand dollars cash flow per. and that was, that was dope, man, for a college student. . Yeah. And, and so you were, you were making that over the mortgage, like you were living for free.
Yeah, no, no, that was, that was, that was my second home man. Okay. I got my own house. I lived, I lived at my house. I was, I was paying mortgage and all that stuff, but the, the, the, the investment property, I was at my second. So I, I let the tenants live in there and they just paying the mortgage and everything I make, I was making a, a thousand dollars cash flow per month uses how to pay for my, my personal home mortgage.
No, it doesn't cover the entire mortgage, but it helps a little bit. Yeah. More than a little bit, man. That's that's, that's significant. That's significant. and I guess just a couple digging in a little bit, cuz I've heard of individuals being able to do this with homes and kind of boosting your cash flow mm-hmm But then I think about, you know, a headache factor versus the dollars. Did you ever run into any issues with, you know, roommate vibes or anything like that? No man, all the time.
, I'll tell you a funny story. I, I, I didn't know. That was the case of what I, what I put these people in, in the same house, you know, four different people, four different personalities. So, you know, I, they, they got into an argument and I literally had to go over there every, every week for a home meeting or, you know, whatever people wanna call it, but kind of like a home meeting, you know, we sit down.
And, you know, we're all adults, you know, we sit down, we talk about all kinds of issues and, and I was literally a judge there, you know, and then I, I create a house rule over time so people can, you know, follow it. And, you know, the biggest issues was the parking situation, you know, cuz the townhouse, you have two reserve parking and everybody else. Literally go park on the street. So, but you have four people in the house, so that create a problem.
So I kind of like, you know, okay, so you live in this bedroom, you, you could park here Monday, Wednesday, Friday, and Saturday, that sort of thing. And then yeah, I kind of assign a, a parking space for them. And then those who don't have the assigned parking can go park in the streets that kind of like create a little fair game for everybody. No, that is . That is fair. And this is the side that a lot of people don't see right. Is kind of the work that goes behind it.
They hear Hey thousand dollars cash flow. I'm gonna do this, but you gotta understand it does take a little bit of work and you may have to be the counselor and, and try to put the rules down for the house as well. Yeah, people bid for parking too. They say, Hey, Jason, I'll pay you a hundred dollars to buy this parking. So people can't park in my space anymore. Other folks say, Hey, I'll pay you 150. You know, I wouldn't do that. You know, , I'll pay for anybody though.
That'd be a whole nother issue, man. There'd be major fights, but no, this is, yeah. This is a cool entry kind of into the, the passive income space. Mm-hmm and I know for many years you stuck with that job that we talked about before in, in kind of owning that re. And trying to build up investments while you were still within the restaurant, how many investments were you able to build up? What were you buying? Oh, no. During that, during the, while I was in the restaurant.
Right. So I owned that property and I started to. Buy some more townhouses. So I was able to build up to 11 townhouses here in Northern Virginia. Nice. Yeah. And then after that, and I started to invest out of states. Okay. Yeah. And, and what, what drove you to invest out of state and, and what market did you choose and, and kind of why. At first I was investing in Houston, Texas. And then cuz I, I, I knew some people over there.
I went, I went by and then I partnered up with the people that actually live in Houston. So we did a lot of deals. We bought multi families who fix it up. We put tenants in there and then we sell it. And then, you know, that makes a lot, lot, a lot of profit. Everything went super smooth. I, we flipped. Five to six houses in Houston, everything went super smooth, never had any problem until I moved to Atlanta until I moved everything to Atlanta, then the fun part starts.
I tell you a whole lot of story in Atlanta, man, but after Houston's then, then I, I started to put my investment into the Atlanta market because you know, Atlanta was one of the top 10 market for real estate boom, back, you know, a couple years. So, and I found a, the quad duplex, and that was a good deal. And that, that was my first investment property in Atlanta.
Absolutely. And, and Jason, I can't skip over the fact that you were able to build up 11 units while you were still working crazy amount of hours to help you transition out of this. And, and we're gonna talk about that, but first I wanna speak to a little bit of your criteria, but you're going out and buying these home. These were long term rentals, correct? Yeah. Long term rental.
So how, and, and what tips do you have for running numbers and, and identifying like, Hey, this is gonna be a deal that works. How do you, how do you analyze these? So when I purchase any investment properties, there are four things that I look at. Number one is the cash. This home is, is it cash flow? Well, if something happened is it were able to, you know, cover the expenses, that sort of things. Number two is appreciations.
You know how, you know how, you know, how's the pre appreciation looking look like in the market and that sort of things. Number three is people paid down my loan balance over time. How much am, how much are they going? In 12 months. And then I multiply that by the year that I will be holding. And the number, number four is gonna be the tax benefits. Yeah. What kind of tax benefit I'll get towards the end of the year?
So those four things combined, it's gonna make, you know, if the number looks good, then, you know, I got into the deal. I love it. I love it. And, and one of the things that you've successfully done, that a lot of people want to do, right. That are investing. They're like, Hey, I can't wait to, to get outta my W2 or whatever job I'm working, but you actually have the success story of being able to successfully make it out of your previous role and fully into real.
And you did that through the investing as well as becoming a realtor. But do you mind speaking through just your mindset and you know, really what that looked like that first month and year of transition? Well, it was great man, before it was, everything is really tight, you know, but actually. Before, before I purchased real estate, it was tight because I, the whole thing would just rely on the restaurant and that sort of thing.
But then I, when I started to build everything and I get the cash flow and it offset all my living expenses, it, it it's like, you're, you, you just keep building it. You know, you make it it bigger and better every, and you don't have to worry about, you know, expenses. Like I can, you know, I can freely, you know, go out there and pretty much buy whatever I want. that's awesome.
You know, like, I don't have to worry about saving, you know, this amount of money for, for the next triple, that sort of thing, because I've heard, I've heard people say that, Hey, it's easier to make $10,000 than save $10,000. So I, so at that point I just, you know, I just keep building it. Every day AB absolutely. Absolutely. And there's some parallels to your story as well.
Earlier, you mentioned that when you were buying that first house, that first investment house that a realtor helped coach you up and tell you like, Hey, this is what passive income is and what it could do for you over time. And now come full circle as a realtor. I know that you do a little bit of the same for you community. Do you mind sharing kind of how. You worked that and kind of help others get into the game.
Yeah, I, cuz I, I, I really appreciate, you know, the, the, the realtor that got me into this whole thing, he later became my broker. You know, I, I got my real estate license.
I joined his firm and, and he taught me a lot of stuff, you know, so now that I. Yeah, I got to the point where I'm at right now, and I kind of want to give back to the youth, the, the, especially the college students that they don't, they, they kind of on the edge of whether they're gonna be, you know, they're gonna be renting or buying whether or not they're gonna be what kind of life they're gonna be doing after college, you know? And you know, that's one of the problem that I see nowadays.
A lot of them, they women know what they're doing. They, they don't know why they're going to college at all. Like, like, why are you going to college when, when you don't know what you're doing? So, so I, I, I went, so I usually go to universities and I talk to college students and their friends and audit people. I can like, Hey, do you, are you gonna be, I, I taught them how to house hack. Pretty much.
You buy a house, you live in one of the bedrooms, and then you rent now the rest of the room in your house. You pretty much live mortgage free and you do that. And then after, after a few years, your equity's gonna build up and you can cash out refinance, get that money, put in another investment properties. And then you just keep building that. Throughout the years.
And when they, you know, when they have this certain amount of cash, they can start it to, you know, flip bird, all that kind of things, build their empire. From there, from there it's gonna be renting then, you know, all the money goes towards the landlords part. Absolutely. And Jason, I love that so much. You did come full circle and you are helping coach the next generation. And to your point, I didn't even really know kind of going to college.
The reason I went was I thankfully got, you know, some football money. And so I was like, Hey, I I'll go. But a lot of people go to college and they're paying absorbent amounts of money for a degree that they're not going to use. Right. And at the end of the day, in order to make it, you know, in this world, You do have to bring significant value and you don't need a college degree necessarily to do that. Now, some people, if you wanna be a doctor, et cetera, please go to college. We need that.
But yeah, for other professions it's not necessarily needed. Yeah. I was telling a lot of them that me personally, I care about how many percent my equity gain per year, not how many money I make per month. And that, and that's significant. You. Because right now, you know, I own about, you know, 6 million worth of real estate.
Imagine 10% gain from a 6 million, a $600,000 already vers, you know, working nine to five, making a hundred thousand dollars per year after all the expenses, you know, you, you, after all the expenses and tax and all that stuff. Man, it's, it's, it's really a matter of, you know, saving, saving up for 10 years and use that to buy a car and it, it all go drained yeah. Quickly.
And, and, and to that point, there's a couple things that we talked about in the lead up to this, and I want to dive into 'em. Now I really want to understand kind of where you were coming from with this. One of 'em that you sort of alluded to was being able to drive or get a car for. Would you mind talking through what you mean by that? Oh yeah, I was, so I had a Tesla, right. And the, my, my Tesla, I purchased that last year for $75,000.
And I was thinking about this, man, if I, if I just paid $75,000 to Tesla, I get a car. A car goes down in value. As I drive, it gets older and older, right? And later when you sell, you won't get as much money back. Instead I use $75,000 as a down payment to buy a townhouse. I pull a loan out of a Tesla cuz Tesla allow you to put 0% down. I literally purchased that at a hundred dollars cuz they need a hundred dollars deposit. So I pull our loan out of a Tesla. I rent out know, same model.
I rent out all the rooms and furnish the commonplace and all that stuff. I was making about 900 to a thousand dollars cash flow. I used that to pay for the Tesla's car payment. After five years, my car paid off, my home value goes up. I make money both way. I love it. I love it. And Jason, I wish we were talking last year, man. Cause I picked up a Tesla last year too. And I did the opposite. I made the cash and now I'm kicking myself.
I'm like, man, I should done what Jason did, but that makes a lot of sense to be able to put, go get an asset. That's gonna help pay for your liability. I mean, this is, this is, you know, a lot of people have read that book. Rich dad, poor dad. This is what he was coaching right there. I love that. You're putting it into. Oh, yeah. I love that books.
You know, I read it and then kind of gimme a little pump, you know, it's like, oh, this is exactly what I, what I, what I was thinking in my mind right now. And this Jack's kind of like put everything together here. and, and, and one of the other things that we talked about Jason is the fact that you've been able to build this rental empire, right over a short period of time. Not that many years, you've built up a significant number of units and equity and.
And you mentioned that you like using something called the Burr method. Do you mind explaining what the Burr method is and how you've used that to help accelerate your portfolio? Oh yeah. The Burr method is actually a great method. I think, you know, anybody can apply just to their investment models. So pretty much, for example, I'll just use a hundred thousand dollars. So that way we, we we're on the same tracks, for example, what I, what, what I did. I identify the market, right?
I'm gonna look for distressed properties that is gonna worth a hundred thousand dollars after repair. So we call it an ARV after repair value. So. I will pay no more than 70% of that property of the ARV to get the house. So I will pay no more than $70,000 to purchase that house. And after that, I'm gonna determine the cost to repair this property, for example, $20,000 to repair this property, to bring it up to a hundred thousand dollars ARV. Right. So I would.
I would take that, you know, to $70,000, I minus $20,000. That's my new max purchase price. I would pay no more than $50,000 to purchase this home. So after I purchased it for $50,000, I put $20,000 out to repair this property. Now at worth a hundred thousand dollars, the bank is gonna lend me $70,000. I get all my money back to reinvestment somewhere else, and I rent it out either short term or long.
And, you know, now I'm, I'm kind of building my short term portfolio, so pretty sure my next deals could be short term I love it. I love it. And, and, and to that point, this is an incredible way to recycle the same money. Because any investor that knows, especially those that are getting started. One of the hardest things you, you have to come up with is that capital and the down payment. And so if you're able to use that down payment, recycle it, pull it out and use it for another project.
It's only gonna help you accelerate your growth. That's. That's incredible. Yeah. Then, and it's, it's just gonna keep, repeat, repeat, and repeat. And then I was telling people like, Hey, you can, you can buy a hundred property with this amount of money. Nobody trusts me until I actually explain it. You know, how it works and it actually works. absolutely. And, and that's the key being able to see you doing it. And witness it is, is pretty incredible.
And I know one of the things that, that you've been doing successfully as well, which I've struggled with in the past, but you've been doing flips at a distance, like thousands of miles away managing crews and, and kind of doing flips at a distance. Do you have any tips for doing that successfully and, and kind of, can you explain how you've been able to do that? Yeah. So first of all, I have to. You know, get a source of wholesalers.
Right. I had to, I had to go to Atlanta and meet all the all kinds of people and then pretty much build my own team. So from wholesalers contractors, realtors, and so I pretty much bring a property from wholesale to retail. So, so I got meet all these people and kind of like, you know, create, you know, make a team out. Everybody to know each other, and then there's a deal. I'll pick it up.
I'll send a contractor, I send multiple contractor in and then kinda like give me an estimate on, you know, what they're gonna be doing. And then I'll read through everyone's estimate and see exactly what's wrong with this property. And sometime I kind of send a third party inspector down there too, because you know, contractors, sometimes they don't see the things that inspector see. So I get all their reports. I reviews all of them. And then, you know, if it's a good deal, I'll take it.
I take it under contract. If not, then I'll pass it on. And then once I get the property, I'll get the contractor in to that. I either have to take pictures from me and that sort of things, every time they finish a certain part and then I'll, I was fund them the money as they go through. And after that, it goes to the realtors, realtors gonna put it up more for sales. After they sell it, the money goes back to me. I like it. I like it. You make it sound simple.
I know in practice it's, it's definitely difficult, but well, it, it's definitely difficult, you know, it sounds cause I wanna make it sounds, you know, like, so that way people can understand it, the process, but the, the. The actual part of it is really tough because sometime, you know, people overseas, stuff that they can't see, things that, you know, that's gonna be a bigger issues down the road.
Like, you know, something that's foundation issues and you know, that sort of, thing's gonna be bigger cost. And then. You know, we, we get into that part and then, you know, a few months later you find out, Hey, there's foundation issues. It's gonna cost like 10, $20,000 to repair. That's gonna wipe out auto profits.
True. True. Yeah. But it's one of those things where if you're in the game long enough, you're gonna get, you know, one or two bad apples, but they're overwhelming amount of good that you'll get. If you're staying consistent and getting those properties undervalue and kind of putting 'em under contract. It outweighs the, the risk, right? And if you stick with it long enough, you can build a large portfolio.
Exactly. And Jason, before we kick it to the group and kind of open it up, I wanted to ask a couple more questions. One for the listeners, and for those that are gonna listen in the future, what would you want them to take away from this, this episode? What would be your call to action to anybody that's listening to this? My call to action is, you know, everyone should.
You know, start investing their monies, you know, little, a lot, you know, it, it, it varies but start investing because if you start investing today, you're gonna make money tomorrow, because think about it. The, the, the rate of real estate development is slower than the amount of people are actually moving to the United States or the population growth. So in the long term, real estate will always go.
Home value will always go up by a lot of, by a lot of means, you know, supplies go up, inflation's gonna drive it up. Demand's gonna go up. Cause think about it. If we keep having the population grow growth is just keep going up like this. And we already have like certain amount of homes, you know, demands gonna up, you know, gonna be a lot higher than supplies and that's gonna drive the price up.
You put your money in real estate right now in the long term, you will, you will always make your money back. I agree. I agree. Those that bought, you know, 10 years ago and, and thought, man, I'm, I'm buying a, a tough time are, are very happy they bought. And those that are buying now will probably be happy a decade from now that they own these properties. So I'm with you. A hundred percent with you.
Yeah. So I wish, you know, like especially young people in the college, you know, they own a property instead of just waiting 10 years later, you know, 10 years later, they, you know, they'll be owning a lot of properties already. Absolutely. Absolutely. And last question for me before kicking it to the group, what can we do? And the listeners do to help you accomplish some of your goals for 2020. A 2022. Whoa. I have a, I have a goal in 20.
I have a pretty decent goal in 2022 is, you know, expanding my short term rental portfolios. So pretty much now is. It's just me, you know, getting through all the obstacles that I'm dealing with right now, and then trying to keep moving, moving on, you know, so hopefully by, by the end of this year, I, you know, I'm gonna be owning a lot of short term rentals and I'll have me manage it for me. And you know, we're gonna make crazy money down towards the end. Yeah. Hey, come on.
Now, count me in on that. count me in. You heard it first here. you know, some short term rental opportunities send it to Jason and. And yeah. Sure. and we're gonna open it up to the group. I want to give a caveat. This thing's gonna cut out in about three or so minutes. Just jump back in and we'll keep it going, but we'll open up to the group. Any questions for Jason? Hi, Jason, I just wanna thank you for all the information that you're giving. Thank you. One question that I had for you.
I know you mentioned you do a lot of out-of-state real estate investing and that you have people looking at the properties for you and sending you reports. What tools or how did you network with these individuals that are in the space? Did you use any specific platform or did you just research them and then seek them out? Oh, I uses Facebook. So there's, I usually, you know, a real estate investor. They have a, they have a lot of Facebook group for some reason.
And in Atlanta, there's the real estate Facebook group called Atlanta real estate investors. I go in there and I was like, Hey, I'm looking to purchase this kind of home. And all these wholesalers start. Calling me and texting me. So I get to know all these people from, you know, big wholesale. You, if you are in Atlanta, you may know, you may have heard of sky stones, new westerns, you know, net worth real, you know, all those people, they're big. Wholesellers in the Atlanta markets.
And then I get to know every single one of them. And, and then I talked to them, they send me their contractors info, cuz they may have worked with contractor before. I you, I just keep expanding, expanding. I know the contractor that I know the subcontractors . Wow. That's awesome. Thank you. And then every time I go to Atlanta, say, Hey, you want to go out, you know, for a quick beer, that sort of thing. You know, we get to know each other's. And started to deal up my team over time. Awesome.
Thank you so much for that. I haven't heard of the Atlanta Facebook group. So I may look into that too. Definitely, definitely. Wanna be more people that's when I sell and buy deals on there too, like, let's say if I have a property that I can't finish it up. I post a deal on there. Hey, I got a deal in Oakland anywhere. I wanna pick it up. And then they, they, I actually sold a few deals on there already.
I have a, I have a problem in Oakland and then I sold it to another investor and she's making money on it. Oh, that's awesome. Thank you. I appreciate Jason, Jason, another question that I had, we were talking about a little bit before, but. If you had to look into your crystal ball, right. And nobody's gonna hold you to this, but the fed just hiked up the rates three quarters, like two weeks ago. Mm-hmm and they're saying they're gonna keep doing that.
I know we've been in a crazy seller's market the past year and a half, two years. What are you seeing from the Virginia market and, and what do you think's gonna happen over the next couple months with real estate? Well, I think people is gonna, a lot of people are gonna. Until what's gonna happen. Next is night. You know, it's the psychology, you know, that's what the fed want people to do. So they just gonna wait until, you know, whatever happened next.
So for the next few months, the lines are gonna go flat. People are not gonna sell cuz they don't know if this is a good time to sell people, not gonna buy cuz you know, it it's interest rate. So in the next few months and depends on the kind of news that's coming out and then people will start making. It's the same thing in the stock market and the cryptocurrency market kind of like when the line goes flat, like this either go up or go straight down.
Yeah. So I think it's the same thing in real estate. Absolutely. Absolutely. And I think that. To your point. I don't know that we're gonna have a, a major decline. I think it's just a pause. Like I think people are, yeah. Kind of taking a step back, trying to figure it out. And this is honestly one of the best times to kind of jump in, especially if you're a buyer trying to get some more properties because you may, may have a slight chance to have that edge on the sellers.
If everybody else is paused for a. Exactly. Yeah, because, you know, if it, I mean, when it goes down, it just kind of like a little correction and it will pick back up and eventually it's gonna go a lot higher than what it is right now.