Escaping the “Grind” through Van Life and Cross-Country Investing

Ashley:
This is Real Estate Rookie Episode 245.

Tony Clark:
Got into real estate after I got engaged. I think, a lot of the listeners and a lot of us kind of we go through our high school college years and then realize we have to be financially responsible and figure out how to build a life. And for me, just wanted to get into real estate or look for financial independence, but didn’t know where to start. But got into real estate a couple of years ago and moved across the country. I’ve bought a sprinter van, I’ve lived in a trailer, done a few just like out there things.

Ashley:
My name is Ashley Kehr and I’m here with my co-host Tony Robinson.

Tony Robinson:
And welcome to the Real Estate Rookie podcast where every week, twice a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. And today, I want to shout out Becky Sue, Elder Becky left us a five-star review on Apple Podcast and Becky said, “I love the dynamics between Ashley and Tony. They keep it fun and always interesting. I learned so much from this show and it’s given me the education and confidence to invest in real estate. Keep it up. I appreciate you both.” No, Becky, Ash and I appreciate you. And if you guys are listening and haven’t yet left us a five-star review on Apple Podcast, please do. The more views we get, the more folks we can reach. The more folks we can reach, the more folks we can help. And that’s always our goal here at The Real Estate Rookie podcast. Ashley Kehr.

Ashley:
I am so happy you’re finally saying leave us a five-star review instead of leaving us an honest rating and review. You slipped up that time.

Tony Robinson:
I’m looking through and we have not gotten a five-star review in quite some time. Actually here’s one, we got a four-star back in November, everything else was a five-star. So even when I say honest, most people are honestly leaving us five, so it’s not a bad deal.

Ashley:
Yeah, thank you guys so much, we really do appreciate it, it makes our day. We pour a lot of our heart and soul into the podcast, so we hope that you guys really are finding value from, and our producers do a great job of finding our guests to bring them onto the show too.

Tony Robinson:
Yeah. It’s been so cool. I mean, we’re at Episode 245 and my first episode was, what, 37 or something like that, so we’ve done literally over 200 episodes together and it’s just so crazy. It’s so crazy like the number of stories we’ve heard, the messages that we get, the impact that the show has had. People all the time, they thank you and I as the host for everything that we do. And so often, we have to remind them that, hey, we’re just the people asking the questions, it’s really our guests who bring the stories and bring the experience and bring the value, and we’re just lucky enough to be able to ask all the questions to people.

Ashley:
And they take the time out of their day to sit down with us with all of our tech issues we have and patiently wait for the podcast to get going. So yeah, we appreciate every single one of our guests so much. If you guys do leave us a rating and review, please let us know what guest had such an impact on you, what was your favorite episodes because I think it’s about time, we’ve hit over 200 episodes, maybe have some follow-up episodes and really see where everyone has been the last two years that they’re doing.

Tony Robinson:
Well, speaking of guests, we got our great one for you today. He goes by the name of Tony also, not Tony J. Robinson, but Tony Clark. So Tony Clark is our guest today. And funny enough, Tony applied to be on the podcast and then in between his application and today he actually ended up getting hired by BiggerPockets. So he’s now part of the BiggerPockets family. He’s on the agent sales team, so he is doing some cool stuff on the agent side. But Tony has got such a crazy story and we’re going to get into it, but he talks about how immediately after getting engaged even, he convinced his wife to move out of their home into a trailer and across the country. But how that decision really set him up for the success, it brought him to the podcast today.

Ashley:
Yeah. And the part that I really liked is him talking about how they chose their market and then how they built out their criteria too, and once they chose their market too.

Tony Robinson:
And near the end, he also plugs a really cool piece of advice on how he got some lending, even though he was essentially unemployed, and his wife was almost employed, but he was still able to find a bank to lend money on that first deal there. So really interesting story all the way around.

Ashley:
Tony, welcome to the show.

Tony Clark:
Thank you. Just say, which Tony? I know we got two of us today.

Ashley:
Well, as I mentioned earlier before we started recording, I don’t acknowledge the other Tony on the show, so it shouldn’t be a problem at all.

Tony Robinson:
It’s actually true. We don’t talk to each other a lot during the podcast, most of it is like us talking to the guests.

Ashley:
Yeah. Every once in a while we’ll throw a question to each other like, Tony, what do you think about that? But very rare I’d say.

Tony Clark:
Oh, nice. Well, hey, thanks for having me. I’m excited to be here and excited to talk with you guys.

Ashley:
Yeah, so let’s get a little bit into your background.

Tony Clark:
Yeah. So basically, I grew up not knowing anything about real estate. I grew up out in Colorado, so a lot of skiing, a lot of snow, a lot of just hanging out. My dad was a small business owner, my mom is a teacher and just really, for me, got into real estate after I got engaged. I think, a lot of the listeners and a lot of us kind of we go through our high school college years and then realize we have to be financially responsible and figure out how to build a life. And for me, just wanted to get into real estate or look for financial independence, but didn’t know where to start.
I know we’ll get into a little bit of my journey and how it happened, but got into real estate a couple of years ago and moved across the country. I’ve bought a sprinter van, I’ve lived in a trailer, done a few just like out there things. My wife spent along for the ride the whole way, but it’s been a lot of fun. And now I’m out here in California where she grew up and where I went to college.

Ashley:
Well, we’re going to have to talk more about that sprinter van because other Tony knows that it is my dream to capture him and Sarah into a camper van, and the three of us do a rookie road trip across the country doing live podcast with a vinyl wrapped camper van with the rookie podcast all over it, and Tony’s face across the path.

Tony Clark:
That’s a dream right there.

Tony Robinson:
She’s been pressing hard to make this happen. So we’ll see if one day.

Tony Clark:
2023, and I could see it, the whole tour.

Ashley:
Okay. So Tony, before we get into too much, what does your overall portfolio look like today?

Tony Clark:
Yeah. So right now, we’ve got three units where we’ve got a duplex out in Nashville, Tennessee. We actually just sold a rental that we had out there. And then I’ve got a house in California that we’re currently living in and might be splitting into a house hack.

Ashley:
Awesome. Congratulations on those.

Tony Clark:
Oh, thanks.

Ashley:
So before we get into your story, everything like that, tell me about what sucked about your life before real estate? What made you decide, I need to change something, I’m going to become a real estate investor?

Tony Clark:
For me, I realized how expensive life really is once you get into things. And I straight out of college, I was working at a church, I was making about $50,000 a year in Los Angeles, which, Tony, you know well is like making $30,000 somewhere else in the country. And then I met my now wife and we started dating and things started to get serious and I was like, “Wow, how can one provide for future family someday, but also how can I not have to work at a job where I’m working a lot of nights, a lot of weekends, long hours for the next 30 to 40 years?” And it was really then that I just realized that I had to do something different or I had to figure out a way to escape that grind.
I had one mentor growing up, or not even mentor, he was one of my dad’s friends who was a real estate guy. And I just remember being able to go golfing with him on a Thursday afternoon and he had the time freedom, he was someone that I really looked up to, and I was like, “Wow, maybe there’s something to it. So I should look into real estate and see if there’s something there.”

Tony Robinson:
Tony, you said your dad was a small business owner, what kind of business was he in?

Tony Clark:
Yeah. So he runs a moving company out in Colorado, just a local moving and storage business.

Tony Robinson:
And why not follow in your dad’s footsteps versus going down this other entrepreneurial route of becoming a real estate investor?

Tony Clark:
My dad always told me growing up, when I turned 13, he was going to throw me on the trucks to show me exactly what I didn’t want to do for the rest of my life. That’s been his thing. He loves what he does, he’s been very successful at it, but he just kind of said, “Hey, it’s tough work, it’s backbreaking work. It’s not going to be the path for you unless you really, really want to.” And I learned very early on that I didn’t want to lift furniture and drive moving trucks full-time.

Ashley:
My one business partner, Joe, his dad has owned a landscaping company and was kind of the same thing. He’s worked for the landscaping company for a really long time, since he was young, probably the same age as you at 13. And his dad is also a very successful real estate investor, he’s invested into stocks and everything like that, but he wanted to show his kids too as to like, “Okay, you can work hard, you can use your body to do physical labor and you can make a lot of money how they were doing that, but is it really sustainable?” And now we laugh because his dad, who still owns the landscaping company, he has these young kids working for him and he’ll be like, “Oh, you know what? It’s raining today. I’m going to head out to the lake, pop a movie in and I’ll be back in a couple days.”
And it’s like he has shown them that you build this other kind of income streams that are more passive that you could still have your business that you started out or whatever. But I think that concept of, do you want to be successful but you have to show up every day, you have a job. And it’s like the Robert Kiyosaki thing where you can own your business, but do you really just own the job and always think of a chiropractor. The chiropractor most likely isn’t getting paid unless they’re their cracking backs. And I’m assuming for a while was probably like that for your dad and maybe he’s built it out now where he doesn’t have to actually be the one that’s doing the physical labor and things like that. But not everyone can always get to that point, and starting out. With Joe, the strain on his body, I mean, he complains every single day about the backbreaking work, but this is the money that he is using now to fund all of his real estate deals and his investments so that he doesn’t have to break his back every day going forward.

Tony Robinson:
Tony, I want to talk a little bit because you started the story off with this super crazy camper van journey that you went on. So how do we go from living in Southern California making $50,000 a year, working for this church, getting engaged to being in a camper van somewhere else on the other side of the country? What happened in between in those steps?

Tony Clark:
Yeah. So really when my wife and I got engaged, it was fall of 2019 and so we were just getting ready to head into basically COVID and the world shutting down and everything that came along with that. And I’d started to think about, what can I do to make extra money on the side? I don’t have more time that I can spend. And so, what’s something basically I read Rich Dad, Poor Dad and said, how can I own an asset that somebody wants, and I can’t afford a house right now, so let’s just find something. And so, I bought a Ford Transit van. So when you think of the sprinter camper vans, you think of the really cool big ones that people drive around in and you size that down to the food delivery truck van size, that’s what I could afford. And so, I bought one of those and then just built it out, put a bed in it and put some flooring in it and turned it into a camper van and then rented it out on Turo. It was essentially Turo just for camper vans and…

Tony Robinson:
What’s the name of that site?

Tony Clark:
Outdoorsy.

Tony Robinson:
Outdoorsy.

Tony Clark:
Yeah. And so, rented it out on Outdoorsy and then basically wound up selling my car and just driving that when it wasn’t being rented. And so, that for me was really a way to just kind of say, well, I can make some money, I can own an asset that now people are paying for my car and paying for my gas money and that can at least help me start to pay off part of the ring that I just gave to my fiancé or try to start bringing in some passive income.

Tony Robinson:
So, Tony, how do you go from, okay, you have this transit van on Outdoorsy to eventually getting into your actual real estate investment?

Tony Clark:
So basically the camper van was the first step and then the next in between step is somehow my wife looked at the camper van and said, “Wow, that’s super cute. We can live in a trailer in Southern California because it’s cheaper than renting.” And so actually when we got married, we moved into this trailer that her parents had bought some property and they were getting ready to build a house.

Tony Robinson:
That’s so interesting. So it was your wife’s idea to move into the trailer?

Tony Clark:
It was either her idea or she just went along with it from the beginning. I think I brought it up offhand one day and I was like, “Oh, this would be kind of fun.” She’s like, “Yeah, let’s do it.” And I found a good one, that’s all I could say.

Tony Robinson:
But, Tony, were you the one that was driving the initial interest in real estate or was she also going on this journey with you?

Tony Clark:
Yeah. So I was initially interested in it. I’ve always been a numbers nerd, I was the kid that was selling baseball cards to his friends on the playground at recess and that translated into then real estate. I was really interested in real estate and I brought up house hacking to her first and just said, “Hey, we could buy a duplex and rent out half and it’ll cover our whole mortgage, or even in California cover most of it.” And it took a little bit of time to get started, but really the big thing that I brought up when I was talking to her about real estate is I said, “Hey, I want you to be able to be a stay-at-home mom with our kids.” That’s always been her dream is to not have to work and not be away from the family.
And so, I was just kind of like, “Hey, babe. Here’s something that I think, I’ve read some books on it but I don’t really know what I’m doing, but if this works, this might be a way for you to be able to stay home with our kids in whatever five, 10 years and I’ll be able to be there too and not have to be working all the time and we’ll really get to have some family time.” Because that’s something that’s really important to us. And I think that was the light bulb moment that went off for her where she said, “Okay, I see the vision, not just you want to go buy some houses and make money doing it. It’s no, this is actually chasing freedom for us instead of just another kind of passion project or something you’re working on.”

Ashley:
I think that’s something that a lot of people struggle with is when they’re approached with an idea is seeing the actual vision. And a lot of times that can be a spouse or a significant other, especially if you’ve started a lot at different side hustles or a lot of different hobbies, things like that. I mean, even myself, when my son was first born, my oldest, I had a little sweat shop in my basement where I was sewing baby clothes and selling them online and that was my side hustle. And then it got to the point like, “Oh my god, my fingers hurt and I couldn’t stand out there already or couldn’t be on my sewing machine anymore.” I’m like, “This is not sustainable.” So it’s finding people who are like, okay, you need to understand like, yeah, maybe I’ve tried these 30 different other things, but here’s why real estate will work. So were you that type of person at all where you had started lots of other businesses and you had that entrepreneurial spirit within yourself, but you just hadn’t found the right thing yet?

Tony Clark:
Yeah, totally. I always had some side hustle or something I was doing where I think… My wife’s a champ for going along with all of it, but it was even in high school, I remember I started a lacrosse equipment company. I played lacrosse and learned how to sewing baby clothes, I learned how to string lacrosse sticks and so I’d hand out brochures to my friends and then I was like, “Oh, this is great. I can actually email people in China and they won’t know that I’m 14 years old and I’ll say, Hey, can you send me X amount of this kind of lacrosse stick and then I’ll go sell them.” And probably if I did that now it would not end well and I’d go, it’s probably all sorts of fraud or something I don’t know.

Ashley:
But also how old were you when you did this that you actually found somebody to actually email in China? Even now, I wouldn’t even know where to start with kind of producing a product.

Tony Clark:
I don’t know. It was one of those things, but I’ve somehow found it and I was like, “Okay, here’s a factory that I can get in touch with.” But I think what I really learned from it and what I’m still learning is that entrepreneurial mindset can take you pretty far, but it can also hold you back from a lot of things if you’re always jumping from one thing to another, to another. And that’s where that whole lacrosse equipment company in high school, when I went to college, it started to die off because my time was taken up by something else and then I jumped to the next shiny object and the next, and the next.
I think it was until I found real estate where it was a vehicle where instead of saying, oh, I’m going to go create a product, sell it this week and make a bunch of money and then have to go find something else to do, it’s saying, well, here’s something that’s actually a long-term investment or a vehicle that I can use that is stable and that is simple and easy to understand and I don’t have to go reinvent the wheel because that’s what gets you in trouble as opposed to just doing the same things over and over.

Tony Robinson:
Yeah. Tony, you mentioned a couple of really insightful things that I want to circle back on. So first, in terms of your wife and how you got her on board, I get that question all the time because my wife is my business partner, we are side by side in a real estate business in so many ways and people always ask me, they’re like, “Tony, how did you get your wife on board? How did you get her to be okay with you investing?” And I think the approach that you took, and this is what Ashley said earlier, of really selling that vision about, hey, here’s what our life is going to look like once we can make this happen, that’s the way that you get your spouse on board is that you appeal to something that’s not just like, this is what Tony wants to do, but hey, this is what’s best for our family and to allow us to reach our goals.
But in order for that to happen, I think there has to be a certain baseline of trust, I think, between you and your spouse to where they have to believe that if you say that, hey, I’m going to commit to doing this thing, that they actually believe you when you say that. And I think in this conversation to my second point about the whole shiny object syndrome, I know I struggled with the same thing a lot my early 20s as well, where it’s like every couple of months I was jumping to a different business idea and if you log into my Blue Host account from 2009 to, I don’t know, a few years afterwards, there were so many different URLs in there because I was just trying all these different things over and over and over again. And it wasn’t until I got later in my 20s and I’d said, “Okay, part of the reason that I haven’t found success is because I haven’t really focused in on one thing yet. And once I really committed myself to this one thing, that’s when the success started to show.”
So wrapping up my point here, if you are someone who is in Tony’s seat and you want to get your spouse on board, first, I think pitching them on the vision of how it positively impacts the entire family and not just you is the first step. But secondarily, you have to prove to your spouse, you have to give them a reason to trust you when you say, hey, this is the thing that I want to do. And that trust comes by showing them that you’re actually committed to this. So that’s reading a bunch of books, going to the local meetups, going to conferences, talking to your spouse about what you’re going like. When they see that you’re invested, when they see that you’re taking this seriously, that’s how you build that trust that they believe you and when you finally do push that vision to them.

Ashley:
So to move on to the next thing based off of that, now that you’ve gotten your wife on board, you’re ready to jump in, how did you build out your criteria? What kind of things do you look to invest in? What are you setting your strategy up?

Tony Clark:
So really when we started to set our criteria, we kind of said, “Well, what are the limiting factors that we can’t do anything about?” First is, “Okay, we don’t have 20% down, we don’t even have 3% down in California, so let’s go ahead and take California off the board, either we need to go invest out of state and buy a rental property and keep living here, or we need to go move somewhere where we can go invest.” And so, that was the first thing that we wound up saying is, “Okay, well, we’re limited by how much money we have. We’ve been able to save up some, but where could we go, where we would enjoy living, where we could start to build up a portfolio and where the numbers make sense for real estate where once we move out of a house hack, we’re not in a negative cash flow situation?”
So we settled on a few different cities. We looked at Charlotte or Austin at the time, wasn’t as expensive it is as it is now and Nashville, and wound up settling on Nashville. And then once we got there, really started narrowing our criteria down to even from there, okay, what neighborhoods would we like to live in where there’s house hacks available, where we knew that we didn’t want to live in some of the parts of town that either we thought were unsafe or boring or a million different reasons, but it’s just like, okay, let’s figure out where we would want to live where the numbers also make sense. And then from there, really just kind of said, okay, let’s set up a search for properties in this area and then once something comes up, we’ve just got to be smart about putting in a good offer.
I was working in real estate at the time, I had just gotten my license and so I was like, well, we might have a leg up in getting the property as opposed to other people and just went from there taking what we were given and finding a property based off that criteria.

Ashley:
Tony, I think that is such a valuable piece of information you said that you looked at where you were limited first and started your criteria off of that instead of just looking like, okay, this is my minimum cash on cash return, I want a single family, things like that. You started with what your limitations were, and honestly I don’t know if we’ve ever talked about that on the podcast really when building out your criteria is a way to do that. I think that is an amazing way to get started as to building out your buy box, your criteria as to what you’re going to be focusing on. So when you did decide on Nashville, did you build a team out there?

Tony Clark:
We did. So first, we’d moved out there for a few months and spent that time really trying to build a team where we knew I had shifted jobs, I’d taken a job with a private equity fund that was doing residential real estate so that I could learn the business, so that I could run numbers on lots of deals and come in as basically the realtor on our team. So we didn’t need to find a realtor, but we did need to go find experts in different areas for property management, eventually contractors, other investors. And really what that just came down to was those first few months in Nashville, I would just go to every single meetup I could or ask anybody I knew in real estate if they had friends who I could talk to or just basically pulling the, “I’m new in town card, who should I meet?”
And it was really surprising in the best way of how generous people were with their time and willing to meet with me. And that was really how we built out our team. It was just, hey, I’m going to get there. I’m going to take time to meet people and get out of my comfort zone, and people were willing to jump on board and help us.

Ashley:
Did you think having your real estate license was a huge advantage in getting started?

Tony Clark:
So having my real estate license has helped us on one of the five properties that we have bought now, I’ve only taken a commission once. So it has helped, but what we normally wind up doing, and if you’re debating getting your real estate license and trying to figure out if it’s worth it or not, you can get your license and it does help. I think it’s beneficial to be able to run numbers and to MLS access and different things. But you don’t necessarily need it because what we wound up doing is I would call the listing agent and say, “Hey, I’m willing to waive my commission if you’ll accept our offer on this property.” Or in the case of our first property, because our down payment was a limiting factor for us, I said, “Hey, I’ll waive my commission if you can just give us this money in closing cost credits, so you’ll pay for part of our loan fees and make some upgrades to the house for us.” And that helped us more than just getting a commission.
So I think it’s 50/50 if you want to be entrenched in real estate or you think that you’re going to be buying a lot of properties. It doesn’t hurt, it could cost $600 a year, $1,000 a year to maintain your license, but you don’t have to have it to get started or to build a massive real estate portfolio. It’s really a personal preference thing.

Ashley:
I love that answer though, just getting your perspective on it and your opinion because we get that question so often.

Tony Robinson:
Yeah. I just want to go back before we keep rolling, Tony. Also, Ashley called it out already about how you started with your limiting factor. There’s a book called Good to Great by an author named Jim Collins and one of my favorite business books, I’ve read it a couple times and one of the concepts in that book… Sorry, let me take a step back. The whole premise behind Get to Great was that… We got Ashley’s kids who just got home from school maybe in the camera and all dressed up. The purpose of the book Good to Great was they did a study on all these companies that had made the leap from doing average or well in their market to doing exceptional and they had maintained that level of exceptionalism for some predetermined period of time. Anyway, one of the common things they saw amongst all these property or all these companies that took the leap from Goods to Great was that they all did what’s called confronting the brutal facts.
And what they did was they were super honest about where they were today, about what their limitations were, about what their constraints were, and having that brutal honesty about where they were, allowed them to create plans that were best suited for their unique situations. Where a lot of new investors get into trouble is when they start making these plans without really realizing the limited resources they have available to themselves. But when you can compare both this extreme optimism around what you’re capable of with this extreme honesty about where you’re currently at, combining those two things allows you to really tap into your potential. And it seems, Tony, that’s exactly what you and your wife did.

Tony Clark:
That’s such a great point. That’s one of my favorite business books too. And I love the confronting the brutal facts because there’s two ways to look at it and I hear a lot of people that are on the extreme ends of both sides where the one way is, I’m going to make this happen and not confront the facts that I don’t have any money in any experience and I just want to make it happen. It’s like, well, okay, let’s bring you back in a little bit from there. But on the other side, I think there’s a lot of people who get stuck in the, oh, well, here are all of the limiting beliefs or the limiting factors that I don’t have money, I don’t have experience, I don’t have this, I don’t have that.
But if you never move past that and say, well, this is what I don’t have, but what do I have or how can I get started, then you can get stuck in that analysis paralysis for years. And I think it was in Rich Dad, Poor Dad, where Robert Kiyosaki says, “Don’t ask can I do it, ask how can I do it.” Or something along those lines where it’s just saying, okay, here’s what I do have, here’s what I don’t have, how can I make what I want for my next step? How can I make that possible?

Tony Robinson:
Yeah. So, Tony, I just want to go back to the story here. So you and your wife get engaged, you convince her to move into the trailer or she convinces somehow you guys agree to do that. How long were you guys actually staying in that trailer before you make the move across country? And how much were you able to save by doing that? I think is a bigger question.

Tony Clark:
So the numbers behind the trailer and why we wound up doing it is we walked onto the trailer lot and we said, “Okay, we don’t know what we want to buy, show us some trailers.” And so they showed us some and they said, “Well, we’ll give you a 10-year loan on this trailer. Whatever you want to buy, you’ve got good credit, whatever.” And it was like, okay, cool. That sounds good. I was thinking on the real estate investment side where I don’t know why somebody would give you a loan to just go buy a trailer for 10 years that you’re paying off, but for us, it worked out where we wound up paying about $250 a month on that trailer and we had to put maybe $2,000 down or something like that. And so, to park it on her parents’ lot, we had a generator for power and had to get pour gas in the generator. And all in it was probably $400 or $500 a month that we were paying to live in this trailer.
I say it was a trailer, it was a nice fifth wheel kind of bougie trailer thing. And so, it wasn’t like we were roughing it in this something you’d see at Coachella. So that was helpful. But we were in it for eight months. So basically we bought it the day that lockdown started, so March 9th, I think, 2020 through Thanksgiving, we were there and then we packed up right after Thanksgiving and moved to Nashville.

Ashley:
So after that has happened, you’ve moved to Nashville, you’ve figured out your criteria, everything like that. Are all of your investments in Nashville besides your house hack at home in California?

Tony Clark:
Yeah. Yeah.

Ashley:
Okay. So once you’ve built out this team and you’ve got your first property down, what did you think about growing and scaling? Is this something where you want to be small and mighty, you want a thousand units and a huge team? What do you kind of see for the future? And actually what something we didn’t ask, are you still self-managing or did you ever hire a property management company?

Tony Clark:
So we started off self-managing and what we wound up doing, because I was a real estate agent out there and working primarily with investors is I wound up starting management company. And so, I took on a few clients in Nashville, so I was managing for them and managing for myself and I started to build a team. I brought on a virtual assistant and a couple of agents on my real estate team who could help with operations there, so we just wrapped our rentals into that management company. So it’s kind of a both, and we’re self-managing because I’m involved, but I would never want to self-manage if it was just us trying to manage everything that can go on with a rental property. I think there’s a lot of value in having a management company.

Ashley:
Well, that’s awesome. Congratulations with the startup of that. That’s very cool. What software are you guys using and what kind of systems do you guys have that you’ve implemented into that management company that might be beneficial to someone else?

Tony Clark:
So when we were just self-managing our properties, I was using RentRedi, which I think is probably the best software out there for any landlords who are self-managing. We now use Hemlane because it allows you to split up rent really well being a manager and has some cool systems there where it allows us to scale. Those two systems, and then really we post on Zillow and I post an MLS link anytime there’s a property for rent and then use a showing service called Showami or Showami, I don’t know how to pronounce it, but it’s basically Uber for real estate agents where you say, “Hey, I have showing at this property at this time, who wants it?” And other agents can say, “Yeah, I’ll take it.” And you pay them whatever you set a price and they accept it.

Ashley:
That is so cool. I’ve never heard of that before. I’ve heard of the companies where you give the person that wants to look at it, the key code and then it takes their ID and sets the key code for only that window of time, but to actually have a real estate agent come in and meet them, and I think you described it perfectly, the Uber hub showing units, I think that tells exactly what it is. So that’s a really cool. And then Hemlane was the property management software, I haven’t heard of that one either.

Tony Clark:
Yeah. It was when we looked at AppFolio, and AppFolio looked like it would work once we hit about 50 to 100 units, but we’re still small enough that we just said, “Hey, we need an option to split rent up.” We don’t like taking rent in and then paying the owners like a lot of management companies will, and Hemlane allows us to say, okay, rent comes in from the tenant and 8% comes to us for management and 92% goes to the owner so that we never have to have an account that’s rotating thousands of dollars on it. And then it really allows us to customize it. It works well for a small business like we are.

Ashley:
Yeah, awesome. It’s always nice to hear of new property management software. There, I feel like in just even in the last maybe five to 10 years, it has tripled, maybe even quadrupled in the options that are out there for especially small real estate investors. And of course, we love RentRedi because if you are a BiggerPockets pro-member, you get RentRedi for free to be able to manage your property. So if you haven’t taken advantage of that opportunity yet, make sure you go to biggerpockets.com and get that free membership if you’re a pro-member to RentRedi. Okay. So then let’s go to the first part of my question that we put on the back burner there is, what is your goal for your portfolio, small and mighty, you want to grow and scale?

Tony Clark:
So our goal with our portfolio is to have a few properties that have really high quality tenants who we don’t have to worry about and don’t have to have a lot of headaches while we’re trying to manage them. We wound up not opting to buy properties, try to get $10,000, $40,000 properties to start off and then sell those off and go buy a multi-family property or try to stack that way. We just kind of said, “Hey, we want a duplex in a nice area of town where we’ll house hack and then we’ll go try to pick up another one and maybe another one.” I think for us, it’ll just kind of be, let’s keep collecting properties where we’re at or we’ll buy properties in Nashville. We’re going to keep doing that. I love the market there.
I’m in real estate for the long term, and really we’re going to keep buying there because I’ve seen even in the last couple of years, the appreciation on those properties is so much bigger than some of the houses that I was looking at in that $40,000 to $50,000 range a couple years ago where, with our first duplex that we bought in Nashville, we were able to pull a HELOC out for all of our down payment plus some after we renovated it and do a burr that way, which is ridiculous. Even with the COVID spike in house prices, it was like, “Wow, this makes a lot of sense because we’re in a good area of a growing city.” And so I think I just want to keep collecting more of those properties and even if we scale a little bit slower, it’s less headaches along the way, it’s going to give us more freedom because we don’t have to manage managers or deal with a lot of evictions or stuff like that. And at the end of the day, we get to own properties and places that we enjoy visiting.

Ashley:
Well, that’s awesome. Thank you for sharing that with us. Do you want to go over one of your deals that you have and we can go through how you bought it, what happened with it, and the numbers on it?

Tony Clark:
Sure, yeah. I’ll run through the duplex that we have in Nashville right now. So we wound up buying this deal. We found it was a for sale by owner, so it had been put up on Zillow. We went to the for sale by owner tab and my wife found this one and she was like, “Hey, we should go look at this.” And there were no pictures. There was the Google Street View, was from about five years ago, and so looked like this really kind of rundown area of Nashville and we were like, “Well, we like the park that it’s near and so let’s go check it out.” And we went and looked at it. There was a brand-new development that had gone up right around the corner. It was this really cool little pocket of town. So we called the owner and said, “Hey, can we meet you? Can we talk about what’s going on with this property?”
And so we went out and we met the owner and I think that was ultimately what wound up getting us the deal because it was a duplex that was a three bed, two bath on each side. It was built in the ’90s. He built it himself. He built five or six rental houses around Nashville and that was his retirement. And so, he’s like, “Yeah, I’m starting to sell them off and I’m going to go move to Destin, and this is one of the last ones.” And he said, “I’ve got two or three builders who are looking at it to buy a lot and you can tear it down and build two homes.” And so he is like, “If you can beat the builder offers, it’s yours.” And we’re like, “Okay, sure. Let’s talk about it and we’ll get back to you.” And wound up submitting an offer.
We went in and there were a couple of things wrong with it, so we got our offer accepted. So we put in an offer at $460,000. It was listed at $425,000 and we knew that that was a steal. If we could get it at $425,000, it shouldn’t have been priced there. So then it wound up getting bid up to $460,000 but when we ran our numbers, we realized that still made sense, where we looked at what else was around, it was still a good deal, so we put in the offer at $460,000, it was accepted and then closed on the property. We started renovating one side. There were tenants in one side of the property, the market rent for that side was about $3,000 a month, and they had been there for 10 years. They were paying $900 a month and had 11 months left on their lease.
So we just picked the side that we were living in, we fixed it up while we were living there, let their lease expire, and then wound up renovating that side once we had fixed up our side and we basically house hacked, put up with the $900 a month for that amount of time, then we could renovate the other side. And now we’ve got one side rented at $3,000 a month, and the other side is going to be rented at about $2,500 a month. Here, we’ve got some showings this week.

Tony Robinson:
So, Tony, I want to make sure I’m understanding this. So you said originally that unit was renting for $900 per month and now it’s renting for $3,000 per month?

Tony Clark:
Yeah. It was 10 years in Nashville. I think one of the properties down the street, it was very similar duplex sold at like $120,000 in 2013 and is now worth $500,000 and the rents have doubled or tripled in most areas of town, it’s wild.

Tony Robinson:
That’s amazing. So one follow-up question for me. So I guess the question is, how did you fund the purchase of this property? I know you had saved up some money when you guys were staying at the trailer and when you guys got to Nashville, how much funds did you guys have saved up? Was it easy to get the loan? What was that process like?

Tony Clark:
Yeah. So this deal was actually the second one that we did. So the first house hack that we bought, we had saved up about $40,000. And that was the combination of, I wound up taking on a second job in California, we had our savings from living in the trailer, just a bunch of different things, and then I sold off my car. And so it was like, “Hey, we’ve got about $40,000 that we can put down on a property.” And I was starting a new career. And so our kind of limiting factors there was we had $40,000 saved up. I had just switched from a W2 job to a 1099 job where I was a real estate agent and my wife was just starting as a nurse. She’d finished nursing school, she had just gotten an offer letter and was getting ready to start.
And so, when we went through the financing process, banks didn’t like us very much for our first deal. They were like, “You want to do what? You want to put 3% down and you don’t really have a job. You’re a realtor and your wife almost has a job. She’s getting ready to start.” And we said, “Well, yeah, but look, we’re going to house hack and there’s going to be rent coming in. We’re basically going to pay zero for housing, it’s going to be great.” And we gave that pitch to, it was 10, 12 different banks that I was like, “Hey, how can we make this work? How can we figure out a way to do this” and they just said, “Nope, nope, nope, it’s not going to happen.”
And eventually we found a small local bank where we got to talk to the VP of lending there and I said, “Hey, here’s what we’re wanting to do. Here are the numbers of this specific property that we’re looking at. Is there anything that you can do or can you write a loan for us?” And she said, “Well, okay, let me see what I can do and how I can make this happen.” And she wound up saying, “Okay, if you can put 10% down, I can basically run everything off of your wife’s income and the income from half of the property and we can make it work as long as you feel comfortable with it.” And it was not the best loan terms. We were getting a rate in the fours when everybody else was high twos, low threes, but it was like, “Hey, here’s what we need to do to make it happen.” And thankfully we were able to talk to that local bank and they said, “Yeah, we’ve got some flexibility so we can do it.”

Tony Robinson:
All right. I’ve got a few follow-up questions here, Tony. First one, how did you find that bank, the one that finally said yes?

Tony Clark:
Honestly, I think I just Googled local banks in Nashville. It was because of the BiggerPockets podcast. There was a guest who had come on and they said, “Hey, I fund all of my deals through local credit unions and banks.” And I said, “Okay, well, that sounds good. Let me go start making some phone calls.” And it was really just Googling local banks and local credit unions in Nashville.

Tony Robinson:
So when you found this bank, did you say, hey, can I speak to the VP of lending, or how did you get to that person at the bank?

Tony Clark:
So I called the bank and just said, “Hey, I have a really unique situation. Do you have somebody who handles essentially non-qualified mortgage products or mortgages for self-employed people?” Just kind of strange situations, and that’s who they directed me to.

Tony Robinson:
So a couple illustrative points here for our rookie listeners. First, and Ash and I have said this time and time and time again that the smaller local credit unions and banks are some of the best places to go to get your financing because they tend to have more flexibility. Second, explain to them your situation and what it is you’re trying to do and not necessarily the type of loan product that you want because you wouldn’t even have thought to ask like, hey, can we just use my wife’s income, and can we pay 10%? Do you guys have a loan that can do that? But when you explained the situation, they were able to give you the loan product that match your unique situation and your goals. So two really important things for our rookie sender, and I just wanted to make sure we didn’t close over that.

Ashley:
Well, Tony, thank you so much for sharing the numbers with us and for sharing just everything in general. Your story is very inspirational for everyone, and I think there was a lot of value from that. But I want to take us to our rookie request line where you can answer a question and continue to add value for our listeners. So anyone can leave us a message at any time at 18885 rookie. And Tony and I actually get the voicemail sent to us directly and we may choose your voicemail to be played on the show.

Alex:
Hi. My name is Alex. I’m from the San Francisco Bay Area. I have money for a down payment for a property that I want to house hack. I don’t know what strategy I should go with. Should I go with a small multi-family, duplex, triplex or a single family and try to make it work and wall up walls and put some fixtures in that way? Thanks.

Tony Clark:
Yeah. It sounds like you’re thinking exactly the right way where you’re looking at your options and trying to figure out what works best for you. My first question would be, where do you stand on the comfort versus cash flow spectrum? It sounds like you’ve got a lot of options ranging from multi-family to single-family and walling off bedrooms or putting up curtains or whatever you got to do. What is your goal in buying this house hack? Are you wanting to live for free? Because if so, in San Francisco, a lot where I am in LA, that might mean a single family house or a duplex where you’re renting out everything possible and maybe sharing a bedroom with somebody, but then you’ll live for free. And if that’s your goal, absolutely do it.
I think there’s a lot of value in that. Or if you say, “Well, I’m okay with paying a little bit of money per month on this property, but I want to have my own space, or I want to have at least my own room.” Or whatever that looks like, I think that’s a very valid point and that’s something that you can navigate with saying, “This is what I want,” versus having to share a bedroom.
So I’d say that would be your first thing, just figuring out what your goals are outside of the finance side and then figure out, and maybe I would say your next step would be talking to a bank and seeing what kind of financing they’ll give you. Because the down payment is one thing, banks will probably look at multi-family properties more favorably than single family where if you go to the bank and say, “I want to rent out bedrooms in a single family house,” they’re more likely to say, “Well, we can’t use that rental income to help you qualify for the loan.” Whereas if you go and say, “I’m buying a four unit property and I’m going to rent out three of the units,” they’re more likely to say, “Okay, we can use that rental income or part of the rental income to help you qualify for the loan,” and that will help you buy a more expensive property if you want to.

Tony Robinson:
Love that answer, Tony.

Ashley:
Yeah. And the only thing I would add onto there is just if you’re going to put up some walls, just make sure you know if you need to get any kind of permits to add bedrooms or what you’re doing there, whatever town you’re doing this in. But I have seen it a lot, like when I was in college where dining rooms were turned into bedrooms so that they would easily turn a three bedroom into a four bedroom and be able to rent out those four rooms, and then all you had left was the kitchen and a living room. So that’s definitely something you could easily do is turn a dining room into a bedroom or even if there’s an office somewhere, any kind of extra space beyond living room or kitchen. And I’m sure there’s probably people out there that house hack that there’s not even a living room provided that you have your bedroom, and then there’s the common area kitchen, because, I mean, it really don’t need a living room, you can hang out in your own bedroom, I guess.

Tony Robinson:
All right. So I want to take us now to our rookie exam. So Tony, Mr. Clark, these are the three most important questions you will ever be asked while sitting in front of a microphone. Are you ready for the exam?

Tony Clark:
I’m ready.

Tony Robinson:
All right. So question number one, what’s one actionable thing rookie should do after listening to your episode?

Tony Clark:
I think the number one thing that you can do after listening to this is figure out what your next best step is, where you don’t need to become an expert investor overnight, you don’t need to know everything. There is to know about real estate investing to get started, but you do need to figure out, okay, what is my next step? Whether that’s saying, “I’m going to start driving a couple times a week for DoorDash to make extra money,” or that’s, “I’ve been putting off writing offers on properties because I’m scared.” Figure out what that next thing is that you can do to get you one step closer to your goal.

Ashley:
Tony, what is one tool, software, app or system in your business that you use?

Tony Clark:
I’d say the most important app that I use is actually Zillow. And this is something that anybody can use, is just setting up keyword searches in Zillow and not saving properties, but saving searches in Zillow where if you go in and you search certain keywords like separate entrance or mother-in-law suite, or if you’re looking for a house hack, kitchenette is a good one. Setting up keywords that are in line with what you’re looking for, I think that’s huge. And then you can really do everything you need to on Zillow, this is a little secret from a real estate agent. Anytime a real estate agent tells you they have coming soon listings that aren’t on the MLS yet, those are the ones that have the big coming soon banner on Zillow, those don’t exist unless they’re not even listed anywhere yet, and then maybe there’s a little lead time. But all you need is to have a login on Zillow and then you can do 95% of the stuff you need to to get started.

Tony Robinson:
All right. Last question for you, Tony. Where do you plan on being in five years?

Tony Clark:
In five years, my goal is to be able to work three to four hours a day doing something I really enjoy. Right now I work for BiggerPockets as a part of their featured agent sales team, and that’s been a lot of fun. I get to work remotely, I get to help a lot of people, and then I do some consulting on the side for real estate systems, CRM stuff, all the that boring stuff that I enjoy. I’d love to be able to just spend three to four hours a day working and then spend a lot of time with my family, and then get to invest in real estate deals that are interesting to me. If somebody brings a deal and they say, “Hey, there’s a 50 unit tiny home community that we’re looking for partners on.” I’d be like, “Great, let’s go check it out,” or whatever that looks like. Just be able to do things because I want to, not because I have to. I think that’s the goal.

Tony Robinson:
That is an amazing goal. Yeah. We would love to get to the point where I’m more than working four hours a week too, man. We’re not quite there yet, but hopefully. All right, so before we wrap things up, I want to give a shout-out to this week’s rookie rockstar.
So today’s rockstar is Alfred Chung and Alfred Chung posted this in the Facebook group. He said, “How I went from an underpaid employee with zero net worth to owning $1.8 million in real estate.” So number one, he says, “I analyzed hundreds of real estate deals and also developed a system to quickly identify the best markets and the best deals. Number two, “I increased my active income by almost 2X by working smarter and providing more value to my employer. And number three, I invested every dollar I could into cash flowing real estate that appreciates over time. I’m not a real estate mogul by any means, but using the strategy has completely changed my life and my family’s future. I now have peace of mind knowing that my kids will be taken care of long after I’m gone because of the single decision I made for years ago.”
Alfred, congratulations. What an amazing journey, and we are so excited to be a small part of that success, man, and just wishing even more success as we get into 2023.

Ashley:
And Tony, thank you so much for joining us today. We really enjoyed having you here on the podcast and welcome to the BiggerPockets team. It’s been, what, three weeks since you’ve been working with BiggerPockets.

Tony Clark:
Three weeks, still brand new.

Ashley:
Yeah. It’s awesome. So thank you so much for taking the time to come on here and share your journey and any advice that you’ve given us has been great. So where can people reach out to you and find out some more information about you?

Tony Clark:
I’m pretty active on BiggerPockets, so Tony Clark on BiggerPockets, Instagram, Facebook, TikTok, Tony Clark on all of those. Just reach out to me, shoot me a DM, I’ll send you my number and we can hop on a call or happy to help in any way I can.

Ashley:
I’m Ashley at Wealth Firm Rentals and I was joined by Tony Clark and Tony Robins at Tony J. Robinson on Instagram. Thank you guys and we will see you on Saturday for Rookie Reply.