Intro/Outro: You know what it is. That's right. It's time to talk money with your money nerd and financial coach. Now tighten those purse strings and open those ears. It's the money talk with Tiff. Uh, podcast.
Hey, everyone. I am so excited because I have Chad Carson on the line. Now, if the name sounds somewhat familiar, um, he is the author of the small and mighty real estate investor, and we met at Fincon and I was like, oh, Chad, you should come on the show and talk about this because so many people are interested in real estate investing, and we finally made it happen. So, hey, Chad, how are you?
I am doing great. I'm so good to be here. Thank you for having me.
Yes, thank you so much for coming. So let's just hop right in when I say small and mighty real estate investor. Now, we've talked about real estate investing probably ad nauseam on the podcast, but I feel like you have a unique point of view. So what do you mean by small and mighty real estate investing?
Well, I'll tell a quick story to explain this because I feel like in the real estate space, particularly if you look online, like Instagram, YouTube, that kind of thing, there's almost a division between this one camp that says you should go big and that being successful in real estate investing, and really any business is the person who keeps climbing this ladder. You get bigger. You go from a house to a duplex, and then eventually you own apartments, then you have 1000 units.
And if you're like a starting investor or somebody's like, I don't have that big of ambitions, it's almost like, wow, you're not successful because you only want to have one property or three properties or ten properties. And so the small mighty investor is a different philosophy. The philosophy says that success means you're accomplishing whatever it is that matters to you in your life, which is, you know, money's a tool. Real estate investing is a
tool. And what I found is that actually simpler and smaller actually achieves more flexibility, more freedom, allows you to travel, allows you to be with your family, allows you to do things that matter in your community. So I like small and mighty investor investing. Uh, and I like to push back on that, go big ten, x. That's the best thing, and say, no, this is just fine. There's lots of people who are very happy who could do just fine with just a couple units if they wanted to.
And, you know, I appreciate that because, you know, being on Twitter, um, well, x, formerly known as Twitter, uh, there's a lot of real estate people on there, and that's what you hear. They're like, you know, you get one door, then you get three doors, and ten and 20, so on and so forth. But I know that there's a lot of people that don't even enjoy being a landlord or don't want to be a landlord. So when we're thinking about being a small and mighty investor,
what does that look like? How would we get started? Um, and then once we get started, how do you scale if it's not getting more doors?
Yeah. So, getting started. The beautiful thing about real estate investing is that the main concept is sort of intuitive. We've all lived in an apartment, a house. We live somewhere, and so we get what it means to have a good neighborhood or a place that's good place to live. We. We kind of get what a nice house is to live in
or a nice apartment. So getting started, to me, like, my favorite way, is something called house hacking, where you live at a. You live in a property, and you turn the house that you live in, or the duplex that you live in, you turn that into an investment somehow. And I'll give you a couple of examples of how you could do that. When I
was. When I was 24 years old, when I was first starting, um, I bought a fourplex, meaning this is a one building, has one roof, and has four apartments in the four in this building. And I moved into one unit, fixed it up, and I rented out the other three units. And I happen to live in a college town, so we have a. We have more of those small, kind of multi unit
properties. And so I lived in one unit, and I rented the other units out, and that basically paid for all my living expenses while I lived in that fourplex. So that was cool. That was great. That's kind of a classic house hack. But I think a more common house hack is to take, like, a single family house, and you move into the house, and maybe you don't rent it to anybody else at all. You live in the three bedroom house, or maybe you buy a house that has, like, a basement apartment
or a garage apartment. They call those, uh, accessory dwelling units now adus. So maybe you can get a little bit of income while you're living there, renting it to somebody else. But let's say you live there for two or three years, and you decide to move, or you don't want to move up to a bigger house. You just keep that house as a rental property instead of selling it, like a lot of people do. And that turns into your first rental property, and it's a very natural way
to do it. The financing's a lot easier to do it that way. So I like doing one of those where you either kind of rent the place out to other people while you live there or you live there for a while and then instead of selling it, keep it as a rental. And you could do that two or three times, and that could get you two or three rentals, and maybe that's all you need.
And if you wanted to scale bigger, we could talk about how to get bigger from there, but that would give you a really good foundation.
Gotcha. Gotcha. Now, when you say rent it out, are you referring to, like, short term rentals? Long term rentals? Like, where does, where does all of that stuff fit in? And also, what does that mean? Because some people may be listening and don't know what short, medium, or long term are.
Yeah, I mean, short term rental. If people heard of Airbnb or vacation rental by owner, it's a, it's a pretty cool strategy because if done well, and there's some, there's some caveats to that. There's some, some harder things about it. It can generally get more rent than you could doing
a long term rental. So just to give you a real example, like in my town in Clemson, South Carolina, maybe I could rent a long term rental to somebody who's going to stay there for, you know, a year or two or three, maybe for $1,500 or 1800 bucks. Uh. Uh. If I did the short term rental with that same property, then I could probably get $150 to $200 per night. And
it depends on how often I keep it full. But very typically, I could probably get three thousand bucks to four thousand bucks per month for that same rental, that I could get $1,500 in rent for a long term rental. Now, I say there's a caveat there because there's also expenses. Like if you do an Airbnb, you've got to pay for the utilities, you have to have turnover. It's not always going to be full. So there's a lot. It's more of a job. When you
do an Airbnb, you can think about, like running a hotel. It's like a little mini hotel. So that, that's a challenge. It's not. You can solve that. There's systems and processes and technology, but you need to think about it more like a business than really, uh, kind of more of a semi passive investment. And then you also have to deal with some more like some cities and towns have banned Airbnb altogether. So you really have to be careful about which properties you buy, making sure the zoning
allows it, making sure there's no rules locally. So that's a risk you have to think about and consider. But if it works, it's a great strategy, especially if you're getting started, because it gives you that extra cash flow that maybe you're okay spending an extra 5 hours a week managing the Airbnb if it gives you an extra thousand bucks a month, like, that'd be pretty nice. And so that I think that's the distinction is whether you're willing to do it, whether you have the time to do
it. And eventually, like, most of my rentals now are long term rentals because I work a couple hours a week on my real estate. Like, I don't. I don't want to spend as much time, but I used to spend 60 to 80 hours per week doing real estate. But it just depends on where you are in life. And, uh, we've been traveling with our family. We lived in Spain for a year. So I'm kind of living off the fruit of some of the work I did earlier. And so I'm not doing as much of the short term rental stuff now.
Gotcha. Gotcha. Okay, so let me back up just a little bit. I just wanted to get that piece out. But if someone has a house right now, let's say they want to move so their house will become available and they want to rent it out. Um, you are referring to using some of the capital or something from the house to scale and get enough. Like, how would all of that work?
Yes. You're saying if someone is, they've already lived in the house. So let's say they lived there for two years, right? Is that the situation you're talking about?
Two plus years?
Yeah. Yeah. So they've lived there for a couple years now. Let's say, like, that was a, uh, 1500 square foot house, or let's say even smaller, like a 1200 square foot house. And you're just, your family's growing and you're like, all right, we need another bedroom. We want a fourth bedroom. So you save up money to go buy the second house that you're going to move
into. And so you go shopping, you go look for a house, you buy this new house, you move your family into that second house, but instead of selling that first one, maybe you clean it up, you fix it up and you just put it on the market. Either Airbnb, you could keep furniture in there and do an Airbnb rental and just manage that yourself. Or you could keep it as a long term rental and rent that out as
well. The cool thing is you already got the loan on the property, you got the financing, you've owned this property, you've lived there for a couple of years, you know it really well. So you've probably, does it work to it and fix it up? So if you were just to go out and buy a rental off the street, you might not know as much about the property, whereas this is one you've lived in. And it just makes a really natural transition to being able to do that because
the financing is in place. Maybe you got a 30 year fixed, uh, loan. You can keep making payments on that financing, and then, yes, you have to get financing on the next property, which that's probably the biggest challenge, is you have to save up the money in the cash to buy the next down payment on the next house. But that's why you take a couple of years, take a few years
to save up the money and to do that. And now you have two properties, the one you live in plus the one you used to live in, and you're kind of building your little real estate empire just one house at a time.
Yeah, that sounds fantastic. So as we're thinking about being a small and mighty investor, um, what are some other things we should consider? Like is being a landlord for everybody or, you know, what type of people would probably do best with this?
Yeah, I think a lot of people get scared about landlording because of stories you heard. Somebody's going to have, ah, a leaky toilet in the middle of the night, and that's going to be really stressful. Or they might have, I think, the landlord tenant relationship in general, whether, if you go on Twitter, for example, there's just a lot of people who, if you're a tenant, you're supposed to be critical of the landlord. If you're a landlord, you're supposed to be really skeptical of the
tenants. I found the opposite to be the case. I found that, yes, there's some exceptions here and there, but for the most part, my tenants have been amazing and they're good people who want a safe, clean, long term place to live in without a lot of drama. And if you give them that and you treat them well and you maintain your property and they'll appreciate your property,
they'll take care of it. Even through Covid, we had one situation out of a lot of units where somebody didn't pay because they had something going on. Everybody else, even during that time, was they wanted their home, they wanted to stay there. And so I think that the drama that you hear a lot about is just what it is. It just makes good Twitter posts, makes good media for the most part. There's a lot of tenants and landlords who work together
well. And so I would say that, like, just the, uh, idea is that you're serving your tenants, you're helping your tenants, you're providing affordable housing to good people, and that's a wonderful service. Like,
that's something that people need. And then from the management standpoint, you don't, you know, you can start off doing a lot of stuff yourself, but there's really good technology to help you collect rent, for example, basically free technology online now where you can, the tenant could pay their rent online, they can do their lease online, you can screen them online, and all of that is possible for almost free now. So that makes it a lot
easier. And then for my maintenance, you know, yes, you're going to every once in a while, have a weird situation where there's a leak in a toilet or something happens. But if you prepare for that and you have a good list of contractors or handymen, then you can hire that out and you can even, like, I even give some of my tenants the plumber's phone number. Say, hey, if there's an emergency like this, this is what we do in an emergency. Call this plumber.
They have an after hours emergency number. They'll come out and fix it and they'll charge me for it. We'll take care of it. Like, that solves a lot. That solves, like, the worst things that people worry about. And yes, it costs a little bit of money, but it can save you a lot of headaches.
Gotcha. Gotcha. So, question that I know people probably have as well. I know I do. How do you find good tenants? So let's say, for instance, you want to do a long term rental. You know, you've decided on that because maybe Airbnb, it'll be too much work. You want to be a little hands off. Um, you know, all that stuff. So how do you go about finding good long term renters?
This sounds a little counterintuitive, but finding the best tenants means you have to, you have to have the best property. So you need a couple things there. Number one, you know, I think a lot of landlords unjustifiably complain their tenants. I've heard this happen before. Oh, I can't ever find a good tenant. And then I look at their property and how they maintain it, and I'm like, well, no
wonder you're not treating your property very well. You're not maintaining it, you're not cleaning it, you're not doing the maintenance on the property. And so I say all that to say. Most of us know that intuitively, especially if we've been a tenant before, we know that there's those bad landlords out there
who just kind of, they're slum lords, they don't fix stuff. And so if you treat your property well and you treat it like a home that you would want to live in, then I think you'll tend to attract tenants who also are going to be considerate of the property, who also take care of it, who also take pride in it. So that's number one. Like, you just gotta, you gotta treat the property right in order to
find the good tenants. But then once you have a property that's worth living in, then it's really a simple, just advertising. Like, I, the last house that I rented for myself, um, we just put it on Zillow. And I think we had to pay $15 to have like the premier ad on Zillow, so that they promoted, um, our house to everybody. And we got as many leads, like within seven to ten days, we had lots and lots of people applying to rent our
house. And so sometimes it's as simple as that. A zillow ad, maybe you put, uh, a sign in the yard, depending on what location you're at, maybe that would help out. And so you get your point. There is you just want to advertise to get people who are interested in the property. You have pictures, you have a description. I like to put some of my requirements in the advertisement for the property, like in the Zillow listing, for example, if you have a credit score. So I might want to have a
credit score minimum. So like, let's say you wanted a 650 credit score minimum for somebody to rent your house. You could go ahead and put that in the, uh, advertisement. That way if somebody doesn't have that, they're like, okay, well, that's this requirement. You're being fair. You're being treating everybody the same,
and then they'll know it upfront. And so the people who tend to call will already have seen that and then you'll have a free, a brief call with them, um, you know, talk about the house. But, uh, eventually you're going to probably show them the house and then get an application from them. And so there's an application with a lot of questions. And this is where you have screening criteria to make sure they have a, uh, you know, they have enough income
to afford the house, they have a good credit score. They've paid their other landlords on time. So it's kind of like borrowing money. When you rent a house to somebody, you want to go through an application. And some of the mistakes I made early in my career, it was, I wanted to be a nice person. I wanted to help somebody who probably a good person, but they didn't. They haven't demonstrated that they can pay on time. And
so for you that you have to be. You have to make some hard decisions like that sometimes to say you, uh, have to separate the person from their ability to pay. And if the person can't, has not demonstrated they can pay, then you're asking for trouble. As a landlord, you need to. You need to only rent to people who have demonstrated that they can do that.
Gotcha. Gotcha. And that makes complete sense. So you've covered so much. Um, I'm, um, over here, like, feverishly taking notes, but I know we can't give it all away. So you have a book. How can people find out a, more information about the book or b, more information about you? How can they find you?
Sure. Well, the book was published by biggerpockets, so if anybody's ever heard of the real estate investing website, they're a really big website podcast now. Um, so they published it. So you can find it on biggerpockets, or you can find it on Amazon. It's also an audible. Unfortunately, you won't hear my southern accent on the books. We hired somebody else to read it, but, uh, it is on audible or anywhere else you want to find it. And if you want to find me, personally, I would love to hear
from you. I have a podcast that I have every Monday. It's, uh, called real estate investing with Coach Carson. If you look on any podcast app, Apple, Spotify, and also on YouTube. I do a lot on YouTube, so you can see the episodes and also do tutorials on, for example, if you're trying to figure out how to run the numbers, you're like, all right, I'm going to
buy a rental property. But I have zero confidence that I know if I'm running the numbers right and doing the math, then I have a lot of tutorials on there, and I have a little whiteboard where I draw it out and describe and explain how to do it. So come check me out on YouTube. And so when you're searching on podcast or YouTube, just look for Coach Carson. You search for that? I'm on all of the platforms. I also
am on Instagram and Facebook and those kind of things. I don't check those quite as often, but I have somebody helping me out, and I would love to, love to hear from you on any of those platforms.
Gotcha. Gotcha. And is it Coach Carson on all the platforms as well?
It is, yeah. If you search Coach Carson, it'll sometimes it's a variation of that, but I'm out there on all of those as.
Coach Carson, make sure that I have all of the links, um, in the show notes. So definitely check that out. I know when you said when you're looking at your numbers and you want to see if you're doing it right, I'm going to go check out video right now. So highly recommend you, uh, all give him a follow. He has some really good information. So thank you so much, Chad, for coming on the show today, and I hope you have a wonderful rest of your day.
It was my pleasure.
Bye. Intro/Outro: Thank you for listening, joining and being a part of the Money Talk with TIFF podcast this week. You can check Tiff out every Thursday for a new Money Talk podcast podcast. But if you just can't wait until next week, you can listen to previous podcast [email protected] or follow Tiff on all social media platforms at moneytalkwitht. Until next time, spend wise by spending less than you make. A, uh, word to the money wise is always sufficient.