Joe:      Welcome! This is the Real Estate Investing Mastery Podcast.

Alex:    Hey, everybody. It's Alex Joungblood and Joe McCall here coming at you with another Real Estate Investing Mastery Podcast, the podcast where we show you how you can use real estate investing basically change your life. This is all about the lifestyle design and making life work for you, rather than you working for life. So, we bring on the best people that we possibly can to talk about what's going on in their business, how you can take it and implement it in your business and take your business to the next level. We'll remind you as well. If you haven't checked out our website at RealEstateInvestingMastery.com, please go ahead and do so.

We've got a Fash Cash Survival Kit that Joe and I have put together for you. It's basically a crash course in real estate wholesaling as well as some outsourcing, and using VAs or virtual assistants to run your business for you for a very affordable price, and basically give you your life back. So, if you're in a position where you're trying to change your life and get out of the 9:00 to 5:00 and escape the rat race, this is for you. Because, we show you how you can simply take control of a property that you don't necessarily own, and flip it for $5,000, $10,000, $15,000, $20,000. Or, if this is something where you are in the business, you feel like you're just bogged down by the details, we can show you how you can take a simple virtual assistant. Well, not a simple virtual assistant. But simply, take a virtual assistant, pull them into your business, and they can run things for you, from down to your marketing, to dealing with sellers, to making offers to sellers, to running comps, pulling reports, and really putting you in a spot to where you can work on your business and not necessarily in your business. So, you there Joe?

Joe:      Yeah, man. I'm glad to know you have your cell phone voice on today.

Alex:    My cell phone voice. Not my radio voice?

Joe:      Not your radio voice. Yes. [Chuckles]

Alex:    [Laughs]

Joe:      But, you know what? I like what you had to say there, Alex. It's about lifestyle design, isn't it? It's about designing a life that you want first, and then creating a business around the life that you want to have, right?

Alex:    That's right! That's right! [Chuckles]

Joe:      Now, we have a special guest today, Patti Robertson. And, I was asking her about you…

Alex:    Oh.

Joe:      …Because you invited her to your show.

Alex:    Your real story.

Joe:      Yeah. [Chuckles] And, she… We'll ask her in a minute about… Kind of what a recluse you are.

Alex:    Well. She knows, right? Because I'm in the… I'm local. I'm in the Hampton Road market along with here. So, yes. She will definitely give you the true story.

Joe:      And, she was saying. It's kind of funny that you're kind of…

Alex:    She's got a recluse. [Laughs]

Joe:      No, I said that. She didn't. [Laughs]

Alex:    [Laughs]

Joe:      But, you're doing a lot of deals, but nobody really, hardly knows you because you're just not…

Alex:    [Chuckles]

Joe:      You're kind of like me. I think that's maybe why we get along.

Alex:    On a national… On a national, people know me nationally instead of locally. [Laughs]

Joe:      [Laughs] But, I would…

Alex:    Except for my pockets, I need to have buyers that I work with and such because I have my small group of buyers that I work with. And again, I am my own buyer as well. But…

Joe:      Yeah.

Alex:    And, I have systems put in place to where I'm not out there, while on the grind in the towns and stuff like that. A lot of times, the new construction projects we have going on, I've got a good great team in place. So, I don't really have to be out there. And, Patti and I just… I guess I don't go to the local REIA meetings for whatever reason. [Laughs] And, I guess that's why. But, it's all good.

Joe:      I think that's the same for me here in St. Louis. I am kind of more known because of the podcasts around, outside of St. Louis.

Alex:    Yeah.

Joe:      And, I don't go to the REIAs. Although, I tell everybody that you should go to the REIAs.

Alex:    [Laughs] Yeah.

Joe:      And, I should. I just don't like leaving in the evening to go somewhere. [Chuckles]

Alex:    Yeah. Well, that's what it is for me too. I mean, I've got four small children.

Joe:      Yeah. Me too.

Alex:    And, we start around 6:00 what I call a “bedtime train.”

Joe:      [Chuckles]

Alex:    So, the bedtime train starts. And, we start to put the kids to bed. And, you start with the “Mommy, I need a drink.” “Daddy, I need this.” “Daddy, I need that.” and all these type of things. And, if I would to leave my wife all by herself with four children, they can be a little bit crazy. So…

Joe:      That wouldn't be good. That wouldn't be good. But see, what I wanted to bring up was… Everybody else out there listening to this has what they would see as their ideal lifestyle, right?

Alex:    That's right.

Joe:      You want to be home with your four kids, right? You want to work at home, and you want to be able to just hop in Hugo and go look at jobs whenever you want, right?

Alex:    Right. Right.

Joe:      So, that's why I love this business so much. And, I'm sure Patti is the same. Because, it gives you the freedom to go do whatever you want. If I could… I always joke around I have three different offices. I have three offices. And mostly, I work from home but I also have an office at Starbucks. And, I work at maybe two or three different Starbucks because I like to mix it up. And, I have an office in St. Louis where I rent, and I have my assistants that are working out of there. But, I'm only in there maybe once a week if that.

Alex:    Yeah.

Joe:      And, I can go work from an RV while we're traveling the country. I can go work from Hawaii if I want, and it's a beautiful thing. God bless America because there's not very many other countries that give you the opportunities that we have here to do this.

Alex:    Absolutely! Absolutely!

Joe:      So, cool! So real quick, Alex. Done in your deals? The last month?

Alex:    Yeah. Actually. Actually, I just closed… I don't know. Did I? I think I bored you with the last story on the last deal I did before, right?

Joe:      You always bore me with your stories.

Alex:    [Laughs]

Joe:      Which one are you talking about?

Alex:    And, I was just wrapping up a deal. I think it's like $15,000 or something like that. It should be closed in one day. And, that was a… In most deals… Ready to get blown to sleep, Joe.

Joe:      Yeah. Okay. Go ahead.

Alex:    In most deals… [Chuckles]

Joe:      [Snores]

Alex:    We're dealing with out of town sellers. And actually, all had gymnastics with trying to get them down here to get their stuff out of the house. And, we're actually working with them where they now have full this one as of the 30th to get their stuff out of the house. We're just working with people and trying to make it as smooth as possible. But, you got to work with your buyers as well. So…

Joe:      Well, you know…

Alex:    I've got some buyers that are flexible so that's a definite plus.

Joe:      Good. That's really good! We've interviewed a guy named Mike Nelson before. And…

Alex:    That's right.

Joe:      On our podcast. And, I think he's in the Virginia area or somewhere, isn't he? Well, that's where he lives.

Alex:    Yeah. He's in Richmond. That's one of my markets.

Joe:      Right! But, he does deals in about eight different markets. I saw him a week ago here in St. Louis. He was here for an event. And, it's great talking to him, and we're doing a lot of the same stuff where we're finding other wholesalers to partner with. And…

Alex:    That's a great system.

Joe:      Yeah. Yeah. It's really cool. And, I'm… We're going to be partnering together on a new course talking about that. It's going to be a premium level course too, by the way. It's not going to be cheap.

Alex:    Nice.

Joe:      I mean, our goal is only to sell a few of them, because I just don't want a ton of competition. And…

Alex:    [Laughs] Yeah.

Joe:      I'm really looking forward to that because just a week ago, I got a check from my partner in Memphis, Tennessee. And, mutual friend of ours. And, they… I've been partnering with him on the marketing and they did a deal. It was their first one that we've done together. And, there was about a $20,000 profit wholesale fee… $20,000 wholesaling fee. And after costs, I got a nice check for about $9,000.

Alex:    Not a bad deal.

Joe:      And, what did I do? I'm not trying to brag. I'm just… I love this thing of lifestyle design.

Alex:    Well, you put the systems in motion. That's what you did.

Joe:      Yes!

Alex:    You work smart. That's not… And, that's what it's all about. I mean, Patti's great to talk to because she's all about franchising. So, as we get to talk to her a little further, you'll see, she's got like a whole bunch of Great Clips, which is a haircutting place around here in Kingsville. And, she's got packed places…

Joe:      Wow!

Alex:    And, she really gets up… She's a serial entrepreneur. Oh! And yeah, I did do one other deal over the weekend. I closed one of my new constructions out, so that will be on my paycheck on the way.

Joe:      Well, congratulations. Good job!

Alex:    Yes.

Joe:      And so, Patti… Why don't you introduce Patti? How did you meet here Alex? And…

Alex:    Well…

Joe:      Why was she…?

Alex:    Well basically, I've worked… I did a little bit of introduction there. I talked about here franchising capabilities and what she's been doing. But, I ran into Patti… Oh boy, it was probably 2006, 2007. I talked to her on the phone, and I'm trying to think how we met and we met up. But, I know that she's one of the new HomeVestors franchisees in the area. And, I think we have briefly talked. And then, just along the way, I had tossed in here, and there'll be some REIA group meetings. And, we never really butted heads on any deals or anything, but just along the way, we just choose to… As a HomeVestors franchisee, that's one of the well-known people in the area. And, just along the way, we just kind of chatted and stuff. So, we haven't really done any deals together and like that. But, I just know she's a really good businesswoman in the area, and you'll learn a lot… Learn a lot from her. She's trying to transition from the wholesaling and rehabbing in out to holding on to properties. And, I met her the other day at a… One of the appliance superstores in the area. Had a big thing going on. And, I saw here there and it intrigued me what she's talking about. I'm just like, “Well. Yeah. No, not really wholesaling or rehabbing but I'm just trying to keep everything that I can. And, I've got a big rental portfolio and maybe 10 years it will be paid off, and should be sitting pretty.” So…

Joe:      Nice!

Alex:    Did that about sum it up, Patti?

Patti:   That's right. That's the goal.

Alex:    [Laughs] Absolutely!

Joe:      So Patti, you… Sounds like you own a HomeVestors franchise. I don't… And, you might be the first one that we've interviewed that actually owns a HomeVestors franchise. Although, we have a lot of friends that do. And, HomeVestors does some pretty amazing things.

Patti:   Yeah, it's a big brand. They're growing. They've made some changes to the franchise model and made it a lot easier for folks to get in. So, it's… I think they're up to almost 500 franchisees around the country now.

Joe:      Wow!

Alex:    Wow!

Patti:   Yeah.

Joe:      So… Well Patti, why don't you talk about how you got started in real estate? What made you interested in it?

Patti:   Okay, I accidentally got into real estate. As Alex mentioned, my husband and I have a couple different franchise brands. We have some Jackson Hewitt's and some Great Clips hair salons. And, we were just shopping for our third brand. The income tax industry is going through some transitions, and we wanted a long-term replacement of that income, because the internet is really eating away at the retail tax model. And so, we went to a franchise broker. And so, we want a third franchise brand and HomeVestors ended up on the list. So, we had no idea. We weren't intentionally getting into real estate. Started off as a wholesaler. I think that's how I went out in the beginning. And, transitioned into doing rehabs, and now have… You know, as I have met so many people across the country who have developed wealth in real estate, all of them have done it with their own portfolio. So, we just sort of kept going. And, I still do a little bit of each of the other, but are focused mostly on rentals. And, we're trying to keep as many as we can.

Joe:      Now Patti, you were in different types of businesses and industries when you decided to go unto HomeVestors. Did you have to do a lot of the day-to-day stuff yourself? Or, are you the one actually taking the calls and meeting with sellers in person? Or, did you set up systems and people to do all that for you?

Patti:   We… Let's go back since then… No, we started out with a team. HomeVestors at that time encourage us to do that. So, we had office staff. I had salespeople that went out and met with sellers. And, now we've… We're not doing as much wholesaling and rehabbing, so we scale that back. And, we still have office staff. They just focus on different things. And now, when we're meeting with sellers, it's usually my husband and I who's going out to meet with them.

Joe:      Okay. So, what made you catch the real estate bug? I mean…

Patti:   Yeah. I'll tell you what happened to us. And hopefully, knock on wood, not very many people have experienced this. But we, in 2005, started investing in real estate, and thought, “We don't know anything about real estate.” We tried to focus on the things we know, and hire out the things we don't know. And so, we decided that we really should diversify in the real estate some. So, we put our money with the banking home, or at… That was buying shopping centers, hotels, that sort of thing. They were base out of Chicago. They have offices all over the country. They had a… They did most of their fundraising at the north of market. Big fancy office building. And in 2008, the SEC came in and shut them down, and declares it a Ponzi.

Alex:    Oh, wow!

Patti:   So, we lost tons… We lost almost our whole retirement.

Alex:    Oh my business!

Patti:   Yeah. At that point, we… Well fortunately, we were still young. Most of the folks in the Ponzi, there were 1,400 other investors… Most of them were elderly people who lost everything. So, we…

Alex:    Did you really have to lose or?

Patti:   Pardon?

Alex:    They just got you?

Patti:   We've got… Well, the odd thing is that we really owned the real estate. We had shopping centers, hotels. There were real assets there. But, the guys were crooked. So, they raised a total of $220 million, and $100 million of it… That big, diverted to themselves. And, what was left was…

Alex:    They were playful…

Patti:   …You know, they… And, they bought at the height of the market. They didn't buy a right. And, at 2008, everything came to a holt. So, projects were half done, contractors weren't paid. So, it was just… It was a calamity of errors. The government appointed a rookie receiver, young attorney who had never had a receivership before. He knew nothing about real estate. And so, we got back… Initially, we've gotten back 2% of our money. Gradually, to the point that it's… We bring it down as we speak. Today actually, we're sending our feedback to the judge for our final distribution. We may get another 5% back. But essentially, it's all gone.

Joe:      Wow!

Alex:    Wow!

Patti:   Yeah. So, we decided at that point that if we were going to do real estate again, it was going to be by ourselves. And, we had joined HomeVestors because we wanted a third franchise brand in 2007. And so, we don't partner with anyone anymore. I'm too nervous to do that. I had folks that I thought were… You know, they were running the… They were deacons in the Orthodox Jewish community. They were people I thought were reputable people, and they were crooks. So…

Alex:    Wow!

Patti:   It took me as a little gun shy. And so, that was how we started. And then, we joined HomeVestors and just… We like the franchise model in general. We just do what we're told. And, we started wholesaling and rehabbing, and holding rentals. And at this point, our goal is to get our rental portfolio paid off. I ended up getting my real estate license. And then, kept going and I have become a broker. And, we've… We're now doing also property management for other folks as well. It's just a natural transition when you get past 10 or so, you need folks to help support the rentals. So, we had staff to support our own. So, it was a natural transition to going to property management. And now, we manage for other owners as well.

Joe:      So Patti, with these other businesses that you have, do you still have the other franchises? I'm just curious.

Patti:   Yeah. Yeah. We have four Jackson Hewitt’s, twelve Great Clips, a rental portfolio, and a property management business. And, this sounds crazy but my husband just opened a fourth franchise brand with a couple of partners. People you know, Alex, local.

Alex:    What is he doing?

Patti:   American Title Loans on the Boulevard, Virginia Beach.

Alex:    Oh, wow! [Laughs]

Patti:   Yeah.

Alex:    Okay. Wow!

Joe:      How do you keep it all together? I mean, how do you?

Patti:   Well, we have staff. So, I focus most of my time on real estate. My husband runs a Jackson Hewitt. So, I oversee the Great Clips. But, I have area managers in place. So, I have folks that run that business. And, we do all the bookkeeping in-house. So, we have two bookkeepers, who keep us posted in that aspect. And, we just… We supervise. We delegate. We have to delegate everything. And quite honestly, everything goes now was get done when it should, if it's a matter of responsibility. So, you just do the best you can. The goal is to grow… To grow these assets so that we can all get our debt paid off. And then, we don't plan to do this many things forever. So, my goal is to get down to the point that we just have the Great Clips and our rental property. And, that will be called… For me, that would be retirement.

Alex:    Okay. Now, did you register a national brand?

Patti:   Oh, it's the largest brand in North America. There's 3,600 stores.

Alex:    Did you happen to go there, Joe?

Patti:   Pardon?

Joe:      Great Clips?

Alex:    Yeah, Great Clips.

Joe:      Oh, yeah. I go to them sometimes.

Alex:    Oh, there you go.

Joe:      Yeah.

Patti:   Where are you Joe?

Joe:      St. Louis, Missouri.

Patti:   Oh, yeah. There's… Yeah, they're huge in St. Louis.

Joe:      Uh-huh.

[Beeping sound]

Joe:      Okay, we're back. We just had a little technical difficulty and we Patti on the line now. She also has her cell phone voice on. [Laughs]

Patti:   I do.

Joe:      Patti, we were talking about franchises. And that's always fascinated me, that business… Because, there's some good franchises out there and some bad ones. You probably are really good at creating systems, and getting other people to do that stuff, and run those businesses for you. Is that right?

Patti:   Well, the nice thing about a franchise is that they give you most of the system. You know, the system that you know actually the consumer.

Joe:      Yeah.

Patti:   But, you still have to create that… No matter what business you're in. Even with a franchise, you still have to create your own backroom systems. And, if you want to scale large, you generally can't do that by yourself.

Joe:      Right.

Patti: Unless you want to work 24 hours a day. So, we hired staff to help us.

Joe:      I guess a good people's… A good skill you got to have is people skills. And, you got to be good at finding good people and managing them, correct?

Patti:   Correct. Yup. Same with tenants.

Joe:      Yeah. Because that relates to property management. Now, why do you… You've talked a little bit about building wealth. Why do you like holding a bunch of rental properties? Aren't they a big pain in the butt? [Laughs] Because, I know that will be blurred. Thank you!

Patti:   I love people who think like you because that's how… You know, a big reason where you able to buy houses.

Joe:      Right.

Patti:   But, I think it's fun. I think it's fun. And, if it's not fun, that's what property managers are for.

Joe:      Uh-huh.

Patti:   You think about the great description that somebody gave me one day was, “Okay, I've got a home end grant to invest. If I want to take you to the stock market today, what… Tell me what so that I can buy it 60, 70, 10 times a dollar?”

Joe:      Hmmm.

Patti:   None of them.

Joe:      Oh, which stocks can I buy? And then, add value to the stocks and make them go up?

Patti:   That too! Exactly. But, if I can buy a rental house at a discounted price. So, I add instant equity there. And then, if I put a tenant in place, I generally have to come out with a little bit of my act up front for the purchase and repair there. But, all of the payments after that are made by somebody else. So tell me, what were…? Other than a 401(k) where your employer's contributing and that's a little bit. What other retirement vehicle if somebody else couldn't pay for?

Joe:      Yeah.

Patti:   None. So, it's almost a free retirement vehicle. That's what I like about it.

Joe:      Well. And, you're not even talking yet about the tax benefits of owning real estate, right?

Patti:   Correct. Yeah, there are tax benefits. But, I can get the tax benefits out of opening a salon too.

Joe:      Okay.

Patti:   But, while I'm opening a salon, I'm doing that with all my own money or loans. So, I have to repay. So, I don't have… I guess that you can take consumers that are paying it in a direct way like a tenant. But, it doesn't feel the same. In a rental property, it feels more like I'm getting a gift from my tenant. Every month they pay. My mortgage which is… One step closer to me having no debt.

Joe:      Right. Okay. So, ideally that's the way it's supposed to work. But still, how do you avoid, Patti? Or, how do you minimize the inevitable problems that do come with owning rental property? Like, vacancies, and repairs, or… What kind of areas are you investing in?

Patti:   I typically… I'll buy in almost any area that I want to get a good return on my money.

Joe:      Okay.

Patti:   And so, I'm… I started out like everybody. Instead, I only want to be in our… You know, the top two cities of our market. And, for our area, that would be Virginia Beach or Chesapeake. And then, I quickly run that I like to buy a rental property in those areas, but I'm going to pay a lot for them…

Joe:      Yeah.

Patti:   And, rents are not significantly more than any other cities.

Joe:      Yeah.

Patti:   So, I've learned from my landlord friends that I won't go to inner cities as there will be more lower-end rentals. That, there's a lot of money to be made in the more “working class” neighborhoods. So, there are a very few places in our market that I absolutely won't buy. Basically, one neighborhood in every city that's hours away that I won't buy in. Other than that, I'll buy any place that fits my criteria. And, we like Section 8 rentals. We like the government pen rent. We like the tenants. There's a lot of misconceptions about Section 8 that I'd be willing to share if we go to the policy if you like me to.

Joe:      Yeah.

Patti:   But, I like the stability of that. They tend to stay a lot longer than other tenants. The rents are strong. And, in most of our cities. Again, it's basically municipality-dependent but.. So, that's what we look for. I look for… Preferably three bedrooms or more. It always gets… Just like with a flip, the more bathrooms, the better. But, I'm not going to get more rent for that extra bathroom. So, I like the… I just like to get a good purchase to rent ratio when I'm buying.

Joe:      Well, let's talk about some of your criteria when you're looking at property, Patti. That, you did mention 3+ bedrooms. And, there's certain areas that you just stay away from, but you're pretty open to everything else. What other criteria do you have?

Patti:   And, mine's actually financial criteria. I have a number that I want to be all in at. That would be the key to a certain rent. So in my market right now, the prices are inching up a little bit. We're also on a squeeze, and prices are going up. But right today, I want to be… For a three bedroom house, I like to be all in the purchasement pair that's $70 or less. Four bedroom house, I want to be all in with purchasement pair at $80 grand or less. So if I can be that, I can make the numbers work.

Joe:      So, what are the numbers that you…? Do you look at ROI? Do you look at net cash flow?

Patti:   Well, my… Well, I know I'm looking at ratio of purchase price. So, my three bedrooms by now, I can get for… In most cities, $1,200 a month in rent. Four bedrooms, I can get about $1,500 a month in rent. So, I used to be the old-fashioned, old-times when I'm still losing some higher-priced markets like Washington DC or higher-end markets. The rent was… Don't want to be no more than a 100 times the rent. Well, on our market, if you go in my neighborhoods, we can get a lot better ratio than that.

Joe:      So, that's really fantastic! I mean, at four bedrooms, you can get $1,500 a month in rent for under $80,000.

Patti:   Section 8… That Section 8 is paying… Yeah. And, it's hard to find those. Section is paying $1,500 a month for four bedrooms.

Joe:      All right. So… But, would you…? For that… That's really good numbers. We're not seeing that in St. Louis. But, could you get…? Would you buy a house all in for $100,000 and get Section 8, $1,500 a month in rent?

Patti:   I have to think long and hard about that. It would depend on what kind of financing I was putting on it. My preference if to put five-year money on them. In which case, it would be hard for me to do that.

Joe:      Okay.

Patti:   And so, if I was getting longer term financing, I could maybe consider. But…

Joe:      Okay.

Patti:   I would just look for a different house.

Alex:    So, Section 8 gives you vouchers, or gives the tenant a voucher, right?

Patti:   Right.

Alex:    And let's say here, you got a four bedroom house. I'm like, “Okay, I want $1,500 a month for this house.” The tenant still has a choice of obviously where they're going to go, which a Section 8 program where like, the seller was to charge less rent even though their portion… Like, their portion is like what? Can sometimes be a full 100%. Could be $200 bucks a month, or what? How does that work?

Patti:   Yes. It's 100% dependent on a tenant. It's called the “House…” The Section 8 program is called “The Housing Choice Voucher Program.” So what that means is, the tenant gets the voucher and they can choose the house that they want to live in, as long as the landlord is willing to accept the Section 8 voucher. And…

Alex:    Right.

Patti:   …A couple requirements of the program… They can't have felony. They can't have any drug charges. They have to be working. So, they can't just sit at home collection checks. And, last are disabled. And then, Section 8 requires… A guideline is that the tenant should be able to afford to spend at least 30% of their income on their housing need. So, I have one particular tenant right now who is a Section 8 recipient holder. But, the Section 8 pays zero of her rent. She has enough income that they're able to pay a 100% of the rent. And it ranges from zero, like in that case, to… I have other tenants that are paying… They're between jobs. Their stuff happened and they were paying 100% of the rent. So, the nice thing about Section 8 is the regular tenant also got… I got a couple of military tenants lately who… The military has said, “No. You know, I don't even have 15 years in. But, we're cutting out. We don't have any option to stick around into retirement anymore.” You know, you get people who are between jobs. And, in the real world, when they're between their jobs, nobody's there to give you a handout and help you out with your rent or your mortgage, because you lost your job. Other than unemployment, that was Section 8. I guess they have a change of income, either their hours are reduced or they lost their jobs. They're between jobs. They just go in and put an application, and the lord is protected. And, Section 8 changes the amount of their subsidy, and including increasing it to a 100%. So, it's a protection for the landlord who is willing to accept the Section 8 voucher.

Joe:      Now, Patti…

Alex:    So, most tenants pay something.

Joe:      …I've heard people either have a love relationship with Section 8, or absolutely hate it. Why? Why do some people hate Section 8 so much?

Patti:   I think Section 8… Before, I was landlording. I guess eight or so ago. I think the Section 8 program was just fine. I hear people talk about how their houses were trash. You know, there are bad people in every segment of society. But, what's changed about the Section 8 program from before is that… They… All of the offices… I think the Internet has probably helped this. All of the Section 8 offices around the country are now connected. So, somebody can't screw up in my market, and then decide they're going to move to Missouri, and take advantage in your market. If a Section 8 tenant tells me they want to leave my property in January. That only happens. I'm a good landlord. I have good houses. So, most people stay a long time. But, if they do leave, it's usually because their voucher size changes. But, when they tell me they're going to leave, Section 8 then sends me a questionnaire that says, “Is this person in good standing?” Either they then went for rent, or they're ending only for repairs. If they totally owe me the money, their vouchers are put on hold. They can't get that paperwork to move to the next place until they've made right timing. So…

Alex:    That's totally good.

Patti:   It's great. [Chuckles] Yeah.

Alex:    Yeah.

Patti:   And, another thing I like is that Section 8 inspects the houses a couple times a year. And, because of that process, the tenant becomes educated on the inspection process. And, as landlords that want to protect their property, that benefits me. So, when the sink is leaking on my cabinet underneath. As opposed to waiting six months to let me know, Iike a regular tenant would likely do. And by that point, it's already rotten. The Section 8 tenant calls right away, and lets us know about things that are broken in the house. And, I like that. I want to protect my property. You know, I had a… One of my horror stories from landlording was… I had three… Navy officers. Pilots. Great guys. In a higher-end rental house. And, they called one day and said, “You know, we can't get rid of the mold and mess in the house. We can't get it to go away.” So I went out and walked in there, and they had… It was… There were molds every place. It was a house with radiator heat. And, the insurance company thinks in one of the pipes, in one of the walls had just sprung a leak. And, it will spring hot water in this house. And, I had to replace all that hardwood floors. It was crazy! It was a $30,000 insurance claim. Because, they…

Alex:    Oh, man.

Patti:   Yeah. They didn't take care of it. They just sprayed mildew remover to remove the mildew out. Wiped it off. That never would've happened with a Section 8 tenant or person.

Joe:      Now, you still… When you advertise your houses, do you advertise them as Section 8?

Patti:   If it's on a lower-end neighborhood. And, I want to focus on Section 8. I put on our regular ad out and I say, “Section 8 okay.”

Joe:      And so…

Patti:   And then, I also…

Joe:      Uh-huh.

Patti:   …There are plenty of Section 8 websites. You know, I could go on a Section 8 list and advertise them on a Section 8 website as well. But, the advertisement is generic. It goes out on the Internet.

Joe:      And so, when you get… I mean, I imagine one of the problems… One of the reasons why people have so many problems with Section 8 is because they just don't do a good job prescreening their applicants, right? So…

Patti:   Right. And, we screen… I prescreen… I screen Section 8 applicants as well.

Joe:      Yes.

Patti:   You know, I want to get the the higher rents for the market. And I know, in order to do that, I have to have people that work real jobs. Working a minimum wage job for 20 hours a week is not going to cut it. They're capable to have a voucher. But, I'm not going get the maximum month that I want. So, I screen my Section 8 tenants just like I do with a regular tenant, with the exception of the income requirement.

Joe:      Okay. And, which is important I think is, you can reject Section 8 applicants, right? If they don't meet your minimum qualifications.

Patti:   Yes. Yes. Some states are looking at it, where legislation is pending right now in some areas of the country. That, landlords may not be able to discriminate from someone's income source from a rental standpoint. So right now, landlords can even say, “No, I don't want to take Section 8.” A lot of landlords do. And, they can just immediately screen out somebody because they have a voucher. This legislation went in a couple of states in place right now that won't prohibit landlords from doing that. As long as you're using steer consistent screening criteria, you can screen them. And, you should screen them just like you did with the other tenants.

Joe:      Interesting now. Okay. Is there a good source, Patti? That you send people to, who are interested in learning more about Section 8?

Patti:   The local Section 8 offices. All offices by municipality have a landlord orientation class once a month.

Joe:      Okay.

Patti:   So, if they just call the local housing office and find out when the orientation classes are. They're free. They take about an hour and they'll learn everything they need to know.

Joe:      Very cool. And Patti, how many? If you don't mind us asking. Maybe you can use general numbers. How many properties do you own right now?

Patti:   I have a little over 40 houses right now.

Joe:      Awesome. And, how many of those are Section 8?

Patti:   Oh, that's a really good question. I don't know about off the top of my head. I'm managing about a 150, and probably 60 of them are Section 8.

Joe:      Okay. I want to ask you about… When you have these many properties, what are some of the systems that you put in place? Or, that you recommend people to have to manage those and to manage them well?

Patti:   Uh-huh. Good lease is really important. Good documentation systems are very important. I subscribe… We use a software called Property Ware. There's a lot of good property management software out there, and they're very similar. But, being able to track every conversation with a tenant, all your pieces of paper. You got to know what your landlord laws are in your state, so that you make sure you follow them. And then, either obviously proper screening. You got to have a consistent… You want to be really careful about, just like employment law, your tenant screening… That you treat everybody the same. You have standard policies. So that, you don't get accused of discrimination. It's so easy to do. And then, making sure you know other real estate laws. Like, you screen people to certain neighborhoods or screen them away from certain neighborhoods. You just got to know what you can say or doing what you can't say.

Joe:      Okay. And, do you? Do you do much of this managing stuff yourself? I mean, what kind of team do you need to have around you? Obviously, this Property Ware software, I haven't seen that before if it is really good.

Patti:   Uh-huh.

Joe:      I have Podio apps that I use to manage properties.

Patti:   Uh-huh.

Joe:      But, what kind of people do you need in your office to manage 150 properties? How many? What kind of staff do you need to have?

Patti:   I have a leasing agent. And, I have a property manager. And, we have some many, many serial staff, bookkeepers. And, one bookkeeper that does the real estate. And then, the handyman. And then, I just oversee to make sure everything is done. We have… One thing that's different for me, because I do have property management as I have owners to worry about another element that you wouldn't have in creating owner statements. And, making sure owners or money's always accounted for and they're communicated with, so they know what's going on. So, I do have to have a little bit more stack than somebody else would if they are on my own property.

Joe:      Now, with owning a property management business, is there a certain? It's not a huge money maker, I would guess.

Patti:   No.

Joe:      Is there a certain number of properties that you would need to have before you really start making good money with it? Does that make sense?

Patti:   Yeah. I guess it depends on your overhead. I act because I had a lease that I personally guarantee. This is related to our other businesses. I have a fairly high overhead for rent. But, your rent would be a strong driver in that.

Joe:      Okay.

Patti:   You know, if I rent out of my house or in an expense off the place, I wouldn't have nearly tried to break even as I have when I got expenses in a big huge shopping center.

Joe:      Yeah.

Patti:   So…

Joe:      But, I like the fact that Patti, you're managing the properties yourself in-house. Because people, a lot of times, complain about having to manage the property manager. And…

Patti:   Yeah. You know…

Joe:      Yeah.

Patti:   …When I bought the first property, they were… And again, my husband and I believe in hiring experts before out, and outsource stuff that are not our areas of expertise. So, when we bought… The first properties that we bought were a package. It was a couple of duplexes, single family homes and screw eye width spaces that we rent, first of which. And, they were being managed by very, very reputable property manager on our marketplace. And so, we lost her in case. And, I was… As I was running, putting up my Craigslist ads for my wholesale deals, we have three vacancies over there. And for weeks, we have these vacancies. And, I was putting up my ads when we came from my wholesale deals. And I said, “You know what? And, I've been putting brown ads without here phone number on. Priceless ads…” I said, “Let's put on our number on these ads, and let's see what happens.” And, we had three… We ran three units in one weekend. And at the point, I decided, “Maybe, we got to learn how to do this ourselves and bring it in-house.” All property managers are not created equal. I find that most professional property managers are not landlords nor they will lead those people, their folks who know real estate. But not, they don't really know how to maximize cash flow. And that, I think one of the benefits that we have is like, I think it as like a business than “What can we do to maximize the income in each one of the properties?”

Joe:      That's so huge! I have some good friends who own about 20 rental properties.

Patti:   Uh-huh.

Joe:      And, they were constantly complaining about the property management company and not… They were always managing the manager, and when they finally step back and said, “You know what? Let's just do that ourselves.” And, they hired an assistant to do it all for them. And, that assistant was about the same amount of cost as the property management was. But, that assistant was just that it was a part-time assistant, just dedicated to managing their 20 properties. And, all of the sudden, they realized, “This isn't that hard. [Chuckles] You know. We can do this ourselves, and they started implementing systems in place, and they actually enjoyed it. It wasn't the pain, and hassle, and headache that it was before because they knew what was going on. And, they were able to fix problems sooner. They were able to fill vacancies faster. And, it's just became a much easier business for them, and more profitable. And so, I've always encouraged people, and I'm not knocking property managers because there are good property managers out there, and they are necessary. But think about, if you have rental property, think about bringing on a part-time assistant and doing it yourself. I don't think it's that difficult.

Alex:    Here's an interesting question. For you know, we had… Oh, I can't remember his name, but “Refi Till You Die.”

Joe:      Yes, Jason Hartman. [Laughs]

Alex:    Yeah. Yeah. So Patti, you got all your properties. Let's say, you got them paid off. But really, actually, you don't have them paid off. But, you just keep refinancing them and leveraging them to the max until you die, so you can have tax-free refinanced income. If that makes sense. That's all you want to do. You got to have them paid off.

Patti:   No. There's so many different philosophies in real estate, and then rentals. Our goal is to get them paid off. If I got to pay a little bit more tax, so be it. You know, I'm at a terrible situation. I have to make money and pay taxes. But, I would rather…

Alex:    Oh, yeah.

Patti:   Our goal is to have them paid off. Likewise, some people become landlords prefer to buy a property, and never put a dime in them. They would rather have dilapidated properties and do rent to own, and take a little bit of cash up front, and have people in them that supposedly might fix them up. And like…

Alex:    Yeah.

Patti:   Some may buy them. That's not what I choose to do. I buy them. I fix them up when I buy them. And, you have either philosophy as good or bad. It's just you got to pick one. And, I prefer to have managed your properties and not deal with properties that are dilapidated. But…

Alex:    Yeah.

Patti:   There are different choices that people make. It's up to your decision.

Alex:    I'd rather… I'd rather not have $4.5 million of debt putting on my head. For me, we just save a$100,000 per property and try to…

Patti:   Me too.

Alex:    Even though it's tax-free. [Laughs] But…

Patti:   Right.

Joe:      Yeah, those… If you're curious, listen to this. A few episodes back, we did a really good interview with Jason Hartman. And, his philosophy is to refinance till you die. And, it's interesting and not everybody would agree with that. But yeah, check it out. A few episodes ago. It's a very informative interview. So Patti, are you? These properties are… If you don't mind us asking. Are you getting bank financing with them? Are you getting private money using your own money? How are you doing this?

Patti:   Yeah. It's a really important question to ask, because that's the hardest part. And I'll tell you that, when I wish I have known in the beginning, people can learn from my mistake here. It's that… Right now, you can have 11 Freddie-Fannie loans. So, traditional 30-year loans. But only, if you get them first. So I, right now, I know I have six Freddie-Fannie loans. By the time, I learn that, I had too many mortgages. The banks… When you're rehabbing, you get credit line, and the banks make it really easy to just roll properties off your credit line, and then put it on a rental line. And so, we did that a whole bunch of time, over and over and over. And before I knew it, I had too many loans or own too many houses to be able to get any more 30-year loans. But, I recently was doing some research from a friend of mine, and found that in 2012, Freddie raised the limit to 20. So, you have your primary loan. Then, you can have 10 investment properties. And then, you can have loans 11-20 if you purchase HUD houses. So, they have to be HUD-owned houses. They will provide financing for investors for up to 20 loans. So, I'm searching right now for a lender to do that. I have an underwriter working on it. But, according to the HUD website, that is accurate as of 2012.

Joe:      Wow!

Patti:   But from my shelf, we use all gamuts. So, sometimes we buy them with seller financing. I do have some private sources. And, I'm still using bank loans. I'm using commercial loans. So we just… A couple of weeks ago, did a refinance of seven properties and purchased a new one. So, we have an eight property loan. It's a 20-year amortization with a 5-year call, with 1 point that was rolled over into the loan, 4.75% interest. And, I came out of pocket real for that purchase. So, I bought a brand-new property, brand-new wealth. Because I rolled into this bucket loan, I came to the table with nothing out of pocket, and had a tenant in it. You know, the day we closed on it.

Joe:      Good for you! Patti, how do you run your numbers? What do you set aside every month for vacancies, repairs and maintenance? How do you budget money for the unforeseen stuff?

Patti:   Yeah. The banks are going to have me set aside 25% of your income for vacancies or repairs. Well, what's really important when you have one, two, six or seven rental properties… Once you get to 10 rental properties, hopefully you have enough cash flow that you can inherently handle that. Once you get over 10, it becomes much easier to handle the vacancy or repair issues, because you have enough cash flow. So, it's really somewhat hard when you're a small landlord. It gets much easier as your grow.

Joe:      So, when you're looking at your numbers though, it was interesting. I saw that you just look mainly at the rent to purchase price ratio. But, do you look at like a cash-on-cash return that you want? And, when you're looking at an ROI, do you figure taking out 50% of the rent to cover taxes, insurance, vacancies, repairs? The banks require 25%, but is that enough for you?

Patti:   We have enough. Honestly, we have enough cash flow with our properties. We're fine.

Joe:      Okay.

Patti:   I don't have to worry about that every time I buy one. What I'm focusing more when I buy one is, what kind of financing am I putting on it, and how long can I get…? How long before I get paid off? So, I want to have the numbers low enough so that I can get it paid off in… Preferably in 5 years, but no more than 10 years.

Joe:      Okay. But, you have obviously set aside. You have reserves. So, if there were vacancies or repairs, you're not going to be scrambling for money or having to go to borrow one.

Patti:   No. We're cash flowing nicely. So, we're using on extra cash flow to pay down mortgages. If I have to replace an air conditioning unit, I'll use it for that instead. We actually replaced three air conditioning units this year.

Joe:      Nice! So, talk to somebody who's…

Patti:   Yeah, not real nice.

Joe:      One. Oh…

Alex:    That's like what? $15,000? [Laughs]

Patti:   No, they weren't. I have one… I got lucky with my replacements but, I got a good AC guy. I had to buy two new ones. One, I was able to get used.

Joe:      Yeah. Well, what I'm talking about was…

Alex:    There you go.

Joe:      …Having the money to pay for that. It's kind of hard to get that sometimes.

Patti:   Oh, yeah. The reason… Yeah. And, a lot of them, when we took out the initial loans, the HomeVestors loan or private money loans that have very expensive interest rates… When you're… And then, when I'm refinancing the 4.75 interest rate, amortized over 20 years, cash flow smooths up greatly.

Alex:    Absolutely.

Patti:   So, it depends on the time that is available to you.

Joe:      Okay. So, talk to somebody who wants to start buying rental properties right now, Patti. What would you recommend to them?

Patti:   I would recommend they start talking to folks about money. So, if they're credit-worthy, the easiest, cheapest place to get money is from the bank and credit unions. If they don't the ability to get bank loans, they're going to go the same place they are going to go if they're a rehabber. Mostly, your private money sources or hard money sources aren't going to do rental loans. But, those guys with retirement accounts, with private money loans are available for rental property. So, it's an individual decision depending on your credit worthiness and asset of each borrower.

Joe:      Right. And so, when somebody is new and getting started though, would you be? What would be advising them to set aside of their rent every month to put aside for reserves. Does that make sense?

Patti:   Yeah. Well, the new owners that we take on, and they hope they have at least every month of rent set aside. Because even on rental term, I don't… I've never had a rental term where somebody moves out, and somebody moves in…

Joe:      Yeah.

Patti:   …Where we spent zero. You know, I just have to do something. So, they have three or four months set aside would be for each, if you only have a few rental properties. Or, if you're cash flow is really tight, we've got a lot of accidental landlords in the market right now, who bought one in the market with high. They have to relocate. So, they're sitting on mortgages that are at a bottom of what their rents are. So, they really have to have enough cash set aside. So that, if they missed rent one mark, because they're either be a treasonous tenant or the tenant that gets behind, that they still have the ability to make their mortgage payment.

Joe:      I just can't stress enough the importance of that. Because, when I was getting started, and I have a lot of rental properties, I don't know, it was probably my fault. But, I didn't feel like the gurus that were teaching this stuff back then made it, stressed it enough how important it is to have reserves. Because, when a property goes vacant, and it will… Or, when the repairs are needed, then they will happen… I was always scrambling and freaking out looking for money. And, freaking out…

Patti:   Uh-huh. And…

Joe:      …If there was a vacancy, because I have to make a mortgage payment. There's no rent coming in.

Patti:   Uh-huh. And, remembering that that deposit money really needs you an extra account. Not on your pocket.

Joe:      Uh-huh.

Patti:   Reasonably, it's supposed to. But, so many times, small landlords don't like to take over and manage of it. Okay, the tenants move out, and if I were to deposit, then I'll haul it. It's not set aside. So, you will never find that with a licensed agent hopefully. But, a lot of small new landlords treat that as their own money when it's not. It's the tenant's money. So, it is important to have good tenant's deposit available, and have your own cash reserves.

Joe:      You know, this reminds me… Alex, do you remember when we talked to Steve Cook about debt-free investing?

Alex:    Yes.

Joe:      And, Steve comes from a different philosophy of getting and staying completely out of debt. But, he had an interesting perspective on how to build a rental portfolio without getting into debt. And, I thought it was really interesting.

Alex:    By partnering, right?

Joe:      Right.

Alex:    By partnering with another person, being like, “Okay, I'm going to find these deals. I'm going to… We're going to get plenty of properties. And then, how we split off at the end is, “You keep 10, and I keep 10…”

Joe:      Yeah.

Alex:    “…Now, you're 10 or get free.” [Laughs]

Joe:      Well, I think it… It looks good on paper. I'm sure it's harder to do on reality. But, they can be done, right?

Patti:   Uh-huh.

Alex:    Yeah, if that's fair. I don't know. I don't if that's fair necessarily. I'm going to use all your money, and then, I'm going to end up with 10 free properties. I don't know.

Joe:      Well, here's how it goes. Because…

Alex:    Go through it in quick version.

Joe:      The quick version. It should be the same. Because, if you find a private money partner and say, “Look…

Patti:   Uh-huh.

Joe:      …I want… I need… Here's a property. It's a good deal. We're getting it at the… We'll pay $84 all-in, and it rents for $1,500.” That's a good deal. And, it shouldn't be hard to find private money on that.

Patti:   Uh-huh.

Joe:      “But instead of borrowing the money, where I'm paying you monthly payment every month, Mr. Investor, we're just going to split everything 50-50. We're going to split the equity and the cash flow 50-50. I'll manage the property. And, there will be some… We'll deduct the money for my management expenses. But the cash flow, we'll split 50-50, and the equity in the deal, we'll split 50-50.” And so, the idea is, you'll find 20 of those properties with a private investor. And so, you're splitting everything 50-50, but I'm doing 100% of the management. I'm finding the deals. I'm managing it. And then, at the end after you have 20, you say, “All right Mr. Investor, you pick the 10 best properties, and I'll take the 10 best properties, and we part ways.” And then…

Patti:   Uh-huh.

Joe:      …You have… You get 10 free and clear properties. And the numbers, because you're splitting the cash flow and the equity, are the same after the split. So, the investors still get 50%. Now, they have a 100% of 50% which is the same as what they had before. But, they're actually getting the better end because they're picking the 10 best properties. And, it's quite interesting. It's a different way to think of things, and I'm just throwing that out there for anybody listening to think about. You don't have to go into a ton of debt or leverage to buy properties. If you're finding these deals good enough, you should be able to find private money for it. And maybe, look at it a different way and maybe think about, “I don't have to borrow the money. I can't partner with somebody.” In that way, the beautiful thing about it is this. If there is a vacancy, you don't have a mortgage payment to pay. And if there are repairs that are needed, there's money set aside that's part of the acquisition cost. There's money set aside in a reserve account that the private investor pays for to pay for those repairs. Does that make sense?

Patti:   Yup.

Joe:      And, what do you think about that?

Alex:    Yeah, what do you think about that? Going to a private investor and saying, “We're going to get 20 properties. And, at the end of the day, I'm going to do all the work. And, at the end…” About how long down the line is it so, to where these are going to be paid off till? Or, what's… How does that work?

Joe:      Well, they're all paid off at the beginning. I mean, there is…

Alex:    Yes, there is now. Yeah, you're right!

Joe:      So, it's… We have to ask Steve how he approaches it. But the investor, bottom line, is getting a better return than they would if they were lending the money.

Alex:    Right.

Joe:      They're getting way better than 8%, or 10%, or whatever. So in that case, it does win. They key is finding the good deals. And, you've got to… It's got to be a good deal that makes sense.

Patti:   Uh-huh.

Joe:      Food for thought. Something to think about. But Patti, this is really important because you got to find the good deals to make it happen. And obviously, you wouldn't be paying them off in five years, if they weren't good deals to begin with, right? So…

Patti:   Right.

Joe:      How do you find those good deals? What's your secret magic trick?

Patti:   Well, a lot of them are HomeVestors' leads. And then, the traditional way, you buy a lot of them from other wholesalers. I don't care what deal other wholesalers are making down like, “Alex, bring me some deals.”

Alex:    [Laughs]

Patti:   I'm happy that they will fulfill. As long as they're bringing… “You know about me. Deal or my deal?!.” As long as it meets my numbers…

Alex:    I got to find you one

Patti:   Find me one. And us… So, same places. It's getting harder now. There's a lot of competition. I'm sure in every market, in our market, there's a tremendous amount of competition. But, we're having to raise or find them a little bit. But, which they're looking is always… The best source is always going to be the house that is not listed, that nobody knows about.

Joe:      Now with HomeVestors, you pool all your money together, and who determines the marketing that gets done?

Patti:   Hmmm. The odd council group of franchisers determines that. Usually, the recommendation from the corporate office.

Joe:      Okay. So, is it a certain area, metro area you guys get together once a month, once a quarter? And, decide how, where the money will be spent?

Patti:   Each month, yeah. Each month, there's a new budget. And, it's based on the advertising DNA, basically. Where the television or radio hit, we're going to market. People pull their money and then, share on the leads. Good tradition. They're going to share the advertising.

Joe:      Are you required to do certain types of marketing?

Patti:   No. You're saying, “Are you required using one vehicle versus another?”

Joe:      Well, yeah. Do they say, “Look, you have to do something. You have to do billboards.”

Patti:   No.

Joe:      “We have to do radio.”

Patti:   No. No, they don't. Each ad council… They're really analytical. So, they decide each market is different. You know, billboards work better in some markets than other. Radio works better in some markets than other. So, they have the ability to look at the performance level of over all markets in the country. And, every market has their own plan based on the dollars that they're spending.

Joe:      Okay. What have you found is working really well right now.

Patti:   It's a good question because right at the second, I'm not advertising HomeVestors.

Joe:      Okay.

Patti:   The other guys that are wholesaling are… We're still doing billboards and direct mail. We're not doing any electronic media in this market. But obviously, all the aligns are still there. Same thing as that… Everybody's doing pretty much the same advertising.

Joe:      One thing I've always wondered about HomeVestors is, how do you know when a call comes in? Because you use the same number in your direct mail, in your billboards, radio ads.

Alex:    It's a very high-tech rotating system.

Patti:   Yeah.

Joe:      No. No. I mean like, how do you know when the call comes in? Where the lead came from?

Patti:   Because we don't have all the same number. We have a lot of different numbers.

Joe:      Okay.

Alex:    Well, the billboards go out to the 800-44, whatever it is. [Laughs]

Patti:   BUYER. Yeah. The billboards and… Usually, television does.

Alex:    Ah, TV too. Yeah.

Patti:   They have various 1-800 numbers. That's one of the advantages that we get to use the 800 numbers, and we don't have to pay for that. So, each campaign typically has its own numbers so that we can crack it.

Joe:      Okay. Have you? I imagine one of the benefits of working for a large national franchise like that is you get to see nationwide kind of what's trending, and what's working. What are sellers responding more to? Is that right?

Patti:   Yes, I can see the numbers for the whole country. But, I'm sure my corporate office wouldn't want me to share those.

Joe:      Oh, okay.

Alex:    Oh, common. [Laughs]

Patti:   Yeah. For that… Actually, we're getting ready to go and leave in a couple of weeks for convention. So, we'll get all kinds of good new information I'm willing to share.

Joe:      Well, if you ever change your mind. You could always…

Patti:   [Laughs] I'm sure one of them would love to be on the show. You can call one of the corporate guys, like I hook you up there.

Joe:      [Laughs]

Alex:    [Laughs] Mike Hamburg has had me on his podcast. I know he's been with HomeVestors.

Patti:   Yeah! Yeah, I just know him too. Yeah.

Joe:      He's a good guy.

Patti:   He's a great guy.

Joe:      Well, okay. We've been talking about a lot of different things. Property management, franchises, financing properties, and stuff like that. This has been a really, really good call. I appreciate your time here, Patti. Is there? Is there something we haven't talked about yet, that you feel is important that we need to ask you? What's a good question to ask you?

Patti:   Hmmm. That's like putting me right on the spot.

Joe:      Oh, how about this? What are some good books that you've read? The business-related or real estate-related that you'd recommend the audience to pick up and read?

Patti:   I think if they're interested in getting into landlording, one of the best courses nationwide is Jeffrey Taylor in MrLandlord.com.

Joe:      He's just here in St. Louis. Yeah.

Patti:   Yeah. His newsletter, I think, is about $100 bucks a year, and it's one of the best sources. And, if you subscribe to the newsletter, you get access to his website. And, my best landlording tip to come from him is he's got… He's got some good stuff and he's not that expensive.

Joe:      Good! So, MrLandlord.com.

Patti:   MrLandlord.com.

Joe:      You know, we're talking about Section 8 too. And, I've seen him advertise a book called, “The Section 8 Bible.” Have you? Do you know? I don't know if it's a book or a course.

Patti:   No, I've not read that.

Joe:      I don't know if he has published it, or I don't even know if I know what I'm talking about. [Chuckles]But, I've heard a lot of people recommend that. It's called, “The Section 8 Bible.” And…

Patti:   I check it out.

Joe:      I think it's updated regularly. Oh, that's good! Anything else? Any other books you'd recommend?

Patti:   This is not real estate related. But, “How to Stop Worrying and Start Living.”

Joe:      Okay.

Patti:   It changed my life when I was there, so young.

Joe:      How to Stop Worrying…

Patti:   That's a great book.

Joe:      …And Start Living.

Patti:   And Start Living. Uh-huh.

Joe:      We could all use a little bit of that. Good!

Patti:   We're worrying way too much.

Joe:      Uh-huh.

Patti:   And the big advice that I would give folks is, “Stop talking about it. And, start doing it.”

Joe:      Yeah.

Patti:   You know, you can buy all the courses in the world. But until you buy the first house, you're never going to be… You got to stop the analysis-paralysis, and just buy a house. Just go out and buy a house. It's not that hard.

Joe:      I heard of this…

Patti:   Even if you make a mistake.

Joe:      Yeah. You're absolutely right. And, I heard this phrase the other day, “Ignorance on fire is better than knowledge on ice.”

Patti:   Uh-huh. I love that.

Alex:    Nice!

Joe:      Sssssssssssss…. Sizzles. That sizzles.

Patti:   Uh-huh.

Joe:      “Ignorance on fire is better than knowledge on ice.” So often, we get stuck and just trapped in this rut of analyzing everything, and feeling like we have to know all the answers before we start doing anything. It's just, you'll never…

Patti:   Yeah, the missed opportunity. The people who started when I started… I have the folks in market who go to the real estate clubs. They started attending about the same time I did, and they haven't… They haven't bought a half of shot, and they've missed it. And, there are big opportunities within your own town. Now, the market shifted and it's harder to buy a house.

Joe:      Well. At the same time though Patti, would you say? If so many has just now finding about real estate, and is just now starting to get in there, is it too late for them to get in?

Patti:   It is never too late. You know, I came in to what people called “the bad market”. You know…

Joe:      Really?

Patti:   …I didn't know any different because I have never been in a market before. Prices were low. And, a lot of real estate investors were bailing from that market. And, I didn't know any better. So, I thought it was great. And now, the market has shifted and found back to that sweeter market. And, that's what most people like to be, with appreciation. And, most people are more comfortable there. But, I wasn't because I didn't know any better. There's no such as a bad market in real estate.

Joe:      The market just changes. And, you need to be able to adjust.

Patti:   It changes. You just have to adjust. You got to recognize and adjust. Exactly! Right?

Joe:      I… You know… Go ahead.

Alex:    We're making it happen back in 2007, 2008, and all of it to probably 2012. That's the worst time in real estate. It's funny because that's when I jumped out of my… I had a security company that I co-own somebody. And, I jumped out at 2008. Supposedly, the worst time in real estate, and started 100% full-time. And, that was the time right there when we were making it happen, and everybody is running through the hills. So, we can make it back then, and you can make it anytime.

Patti:   Absolutely.

Joe:      In some ways, it's easier to make it now, because there's so many buyers out there, and the demand is so high.

Alex:    You got to be a good deal finder.

Patti:   Uh-huh.

Joe:      You got to be a good deal finder, and you got to be an expert at marketing.

Alex:    And, dealing with sellers.

Joe:      Yes. And, know how to talk to sellers. And, anything else?

Patti:   Uh-huh.

Joe:      [Laughs]

Alex:    Yeah.

Joe:      Yeah. Well, that's it. And, it's all about marketing. No matter what area, or no matter what trend the market is heading, it's all about marketing. And what's funny is, there's things that have always worked, and they will always work. It's just being smart. And, I think… Yeah, it's just taking action. You know what? I remember getting started in reading all of these. You know, going to boot camps and workshops, and buying all these courses back in 2006 when the market is screaming hot. And, there were tons of people making good money back then. I mean, do you remember those days? There was… I have friends in Phoenix who, when the market was really, really hot and there was tons of competition, you couldn't walk down the street without tripping over bandit signs.

Patti:   Uh-huh.

Joe:      They were everywhere. And, they were still guys making a lot of money. Then, when the market changed, they're still guys making money. They were still guys rehabbing. They were still guys wholesaling. They were still guys doing property management, or buying and holding properties. So, you just got to learn to change with it, and stay consistent. That's my piece of advice.

Alex:    Good advice.

Joe:      Yeah. Yeah.

Patti:   I agree.

Joe:      Stick that in your pipe and smoke it, Alex.

Alex:    Well, I don't have a pipe…

Joe:      [Laughs]

Alex:    …And neither do I smoke. But, okay. [Laughs]

Joe:      I don't either. I don't either.

Alex:    [Laughs]

Joe:      Patti, is there anything else? Let me ask you a question, Patti. I'll let you answer that one in a second. But, I love asking this question to people. If you were stranded in some desolate city, in the middle of the desert… And you had to start making money… And, it was a good sized city, like let's say 500,000 people. And, you didn't know anybody. You didn't have much money, and you wanted to get started in real estate, and start making some money. What are some of the things that you'd start doing?

Patti:   I would try to find out who's actually making money in real estate. And, go and find that person, and have them show me the road, and see if I can find a partner. I would find the people who are doing it.

Joe: Okay.

Patti:   I know leaders in the market.

Joe:      Excellent! And, you just… You come to them probably with the approach of, “Hey, how can I help you grow your business?”

Patti:   How can I help? Uh-huh.

Joe:      Yeah. And then, they would be more likely to help you, and teach you what they're doing because it's benefiting them as well.

Patti:   Right.

Joe:      Good. That's simple. I like that. I like simple. [Chuckles] Okay. Well Patti, anything else that you like to share? Any good words of advice for beginners?

Patti:   I like to encourage everyone to go on and buy a house!

Joe:      Good.

Patti:   Put your deal done. Keep the first one…

Alex:    I'll buy a house.

Patti:   Keep the first one done, like all downhill. Or, wholesale, whatever. You guys are from like wholesaling, right?

Alex:    Yeah. We're under contract. [Laughs]

Joe:      Yeah.

Patti:   [Laughs] And, if you get them in the north of market, bring them to me.

Alex:    There you go.

Joe:      Well, Patti…

Patti:   Weekend buyer.

Alex:    [Laughs]

Joe:      Well, Patti. How can people get a hold of you? I mean, you're looking to buy deals. If somebody brings you a good deal, you probably partner with them on it or something.

Patti:   Absolutely.

Joe:      How can people get a hold of you?

Patti:   Yeah, my cell phone is 757-472-2547.

Alex:    Wow, giving out her cell phone.

Patti:   Yeah. [Chuckles]

Joe:      No one has ever done that before, Patti.

Patti:   Oh, really?

Joe:      No.

Patti:   My cell phone's in every place. It's not a secret.

Joe:      Do you want to know Alex's cell phone number?

Alex:    Hey!

Patti:   No, I have Alex's cell phone.

Alex:    [Laughs]

Joe:      [Laughs]

Patti:   I don't give it on the air.

Joe:      All right. So, do you have an e-mail address?

Patti:   I'll drag him into a REIA meeting.

Alex:    [Laughs]

Patti:   Yes. Patti, P-A-T-T-I.

Joe:      Uh-huh.

Patti:   Robertson@tidewaterhomesva.com.

Joe:      PattiRobertson@. Can you say that again?

Patti:   Tidewater. Tidewater. Homesva.com.

Joe:      Tidewaterhomes, with an s?

Patti:   Uh-huh.

Joe:      VA.

Patti:   VA for Virginia, dot com.

Joe:      It's almost as long as one of my e-mails.

Patti:   I know. I know. I know.

Joe:      All right. P-A-T-T-I-R-O-B-E-R-T-S-O-N at Tide, T-I-D-E. Water. Homes with an S. VA for Virginia. Dot com.

Patti:   Right.

Alex:    There you go!

Patti:   Yup. Website is Tidewaterhomesva.com.

Joe:      Cool! Well, Patti. You've been a great guest.

Patti:   Thanks guys. Good luck to your show. Thanks for having me.

Joe:      Thank you. And, we sure appreciate it. Everybody, go to realestateinvestingmastery.com to get the show notes, to see the links, and the stuff that we've talked about, and how to get a hold of Patti. This has been a good show. Thanks, everybody. Thank you, Alex.

Alex:    Absolutely!

Patti:   Have a great week!

Joe:      Thank you, Patti. Take care.

Alex:    Thanks Joe! See you.

Joe:      Buh-bye.