Latest / Financial Survival Network / Path to Profitable Property Investing - Jefferson Calloway #6192

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Path to Profitable Property Investing - Jefferson Calloway #6192 · Financial Survival Network

• 0:00
  Speaker 1: I leverage pretty much everything. I think that's the best
• 0:02
  Speaker 1: thing you can do for velocity. You know, the more
• 0:05
  Speaker 1: money I can keep in my pocket, the more I
• 0:07
  Speaker 1: can keep forward down payments. You know, whether it be
• 0:09
  Speaker 1: seller finance, we do a lot of creative finance, that
• 0:12
  Speaker 1: kind of thing. You usually need something at closing costs,
• 0:14
  Speaker 1: et cetera. So we leverage everything we can.
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  Speaker 2: You're listening to Carrie Let's Financial Survival Network, where you
• 0:20
  Speaker 2: get valuable information you just can't find anywhere else to
• 0:24
  Speaker 2: thrive in today's trying times. You need the Financial Survival
• 0:28
  Speaker 2: Network now more than ever. Go to Financial Survivalnetwork dot
• 0:33
  Speaker 2: com and get your free newsletter and gift. Financial Survival
• 0:37
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• 0:43
  Speaker 3: And welcome you are listening to and latching the Financial
• 0:47
  Speaker 3: Survival Network. I'm your host, Kerry Let. A lot of
• 0:50
  Speaker 3: people go into real estate, a lot of people are
• 0:53
  Speaker 3: successful at it. What I find fascinating about the state
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  Speaker 3: that everybody finds their own entry. And person you're about
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  Speaker 3: to hear from the newcomer to the show first time
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  Speaker 3: on the show is name is Jefferson Calloway. Jefferson, you
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  Speaker 3: are a vet, and thank you for your service and
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  Speaker 3: you got into real estate investing while you were serving
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  Speaker 3: the country.
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  Speaker 1: Correct, Yes, that's correct, and thank you very much for
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  Speaker 1: the support. YEP. Joined in twenty sixteen, got out twenty
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  Speaker 1: twenty one, and it was that last year that I
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  Speaker 1: bought my very first rental property by accident. I was
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  Speaker 1: just going to buy a house and live in it,
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  Speaker 1: but moved away, decided to rent it out, and just
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  Speaker 1: kept on going from there. The rest was history.
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  Speaker 3: That's great. So you got twenty seven. Now, like, how
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  Speaker 3: what's your cash flow and your pre cash flow on
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  Speaker 3: the property? Can give me a range up and tell
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  Speaker 3: me the exact amount?
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  Speaker 1: Sure, I mean it's ranges, but I would say the average.
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  Speaker 1: You know, I pay all my mortgages that are probably
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  Speaker 1: a total of maybe fourteen thousand, but you know, the
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  Speaker 1: properties in general bring in you know, eighteen to twenty
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  Speaker 1: thousand in total, so after all expenses, I would say
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  Speaker 1: four or five grand a month.
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  Speaker 3: That's pretty good. Pretty good? And yeah, so how do
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  Speaker 3: you scale this up? How can you have one hundred disease?
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  Speaker 3: Is there a particular type of property? Are you looking
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  Speaker 3: for a military base near military basis?
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  Speaker 1: As that were? Yeah? I mean the first one turned
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  Speaker 1: out so well. It was an enterprise Alabama, which is
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  Speaker 1: near Fort Rutger, southern Alabama, right near the Florida border.
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  Speaker 1: And I have since gotten a bigger, sing single family
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  Speaker 1: portfolio there just because I love the area. The price
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  Speaker 1: to rent ratios are great, they work for cash flow
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  Speaker 1: really well. The fact that there's a lot of soldiers
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  Speaker 1: cycling through is really just a bonus. I mean, you
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  Speaker 1: can't act a fool as a soldier in rental property
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  Speaker 1: or your command will find out. And there's always tenants
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  Speaker 1: because there's always soldiers cycling through. But I don't make
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  Speaker 1: that one of my criteria anywhere else. You know, like
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  Speaker 1: I said, we're in seven different states now and I
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  Speaker 1: have found that not a lot of other military but
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  Speaker 1: you know, building your rental portfolio around a military base
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  Speaker 1: would be pretty limiting. So I still invest in Alabama
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  Speaker 1: near the base. But everything else is not near bases,
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  Speaker 1: not near universities. It's really wherever you can find cash
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  Speaker 1: flow in this in this climate. And in the beginning, yeah,
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  Speaker 1: in the beginning it was mostly single family, but I
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  Speaker 1: have since moved on very very hard into multifamily just
• 3:21
  Speaker 1: because the cost of maintenance and capital expenses per net
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  Speaker 1: cash flow and per door are just less. I mean
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  Speaker 1: you've got four or five six units under one roof.
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  Speaker 1: That helps the same thing with HVAC. And also the
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  Speaker 1: risk is lower. I mean if you have one or
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  Speaker 1: two tenants missing, that's fine. I still get half the rent.
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  Speaker 1: Single family, you go six months without a tenant, you
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  Speaker 1: get zero. So definitely moving into multifamily and doesn't have
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  Speaker 1: to be around military basis.
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  Speaker 3: What are you looking for, like, how do you what
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  Speaker 3: kind of valuation do you do, and what type of
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  Speaker 3: cash flow analysis?
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  Speaker 1: Sure, so I leverage pretty much everything. I think that's
• 3:57
  Speaker 1: the best thing you can do for velocity. You know,
• 3:59
  Speaker 1: the more money I can keep in my pocket, the
• 4:02
  Speaker 1: more I can keep for down payments. You know, whether
• 4:04
  Speaker 1: it be seller finance, we do a lot of creative finance,
• 4:07
  Speaker 1: that kind of thing. You usually need something at closing costs,
• 4:09
  Speaker 1: et cetera. So we leverage everything we can. But I
• 4:13
  Speaker 1: would say at this point it's really total gross monthly
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  Speaker 1: rent for the property. Mine is twenty five to thirty
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  Speaker 1: percent for expenses that's maintenance, capex, lawn care, utilities, et cetera, vacancy,
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  Speaker 1: and then minus the mortgage payment whatever that would be.
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  Speaker 1: PIPI and whatever's remaining is your ultimate net cash flow.
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  Speaker 1: And my minimum is a few hundred dollars, maybe two
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  Speaker 1: to three hundred dollars per door. So if I've got
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  Speaker 1: a four plex, if I've got a five plex, it
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  Speaker 1: better be bringing a net free cash flow eight hundred
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  Speaker 1: to one thousand dollars a month for that one property.
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  Speaker 1: And that's anywhere in the continental US. You know, that's
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  Speaker 1: one of the best things about being remote investor. When
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  Speaker 1: a wholesale or a realtor sends me a deal, I
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  Speaker 1: don't care where it is. Texas, Ohio is another great
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  Speaker 1: market we just got into. I can buy anywhere, so
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  Speaker 1: I'm not limited to my local market. A lot more
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  Speaker 1: opportunity that way, all right.
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  Speaker 3: So when you're looking at a property, what about the
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  Speaker 3: condition of the property to age all of that? How
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  Speaker 3: do you evaluate that?
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  Speaker 1: Yeah, I mean you always just allow for more of
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  Speaker 1: a percentage of your gross monthly rent to accommodate older homes.
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  Speaker 1: But the thing is a lot of multifamily they are
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  Speaker 1: older homes, so I account for an additional five percent,
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  Speaker 1: But ultimately even newer properties seventies, eighties, nineties, ohs, they
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  Speaker 1: still have problems. I mean, most of the time, I
• 5:27
  Speaker 1: find that it's not the property itself that you end
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  Speaker 1: up spending more money on. It's usually your utilities HVAC,
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  Speaker 1: roof A lot of time to apply in this, you know,
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  Speaker 1: stuff that has nothing to do with the age of
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  Speaker 1: the home necessarily. So I don't mind buying age old stuff.
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  Speaker 1: I just bought a six plex and Hagerstown that's over
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  Speaker 1: one hundred years old. Haven't had many problems with it
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  Speaker 1: at all. So we're buying pretty much everything we can
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  Speaker 1: get our hands on that don't make them like that anymore?
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  Speaker 3: Do that?
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  Speaker 1: No, they do not. Not a lot of small multi
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  Speaker 1: family in general anymore. It's mostly single family now.
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  Speaker 3: All right, So somebody look to get into the real estate, now,
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  Speaker 3: somebody you do that on the street, What would you
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  Speaker 3: tell about the house haack?
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  Speaker 1: Always, always, always, the best thing you can do, in
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  Speaker 1: my opinion, is house sack. And for those who don't know,
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  Speaker 1: that is just living in a home and renting out something.
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  Speaker 1: It doesn't even have to necessarily be another unit like
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  Speaker 1: a duplex, triplex, squad plex. It can be, and you
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  Speaker 1: can get up to four units with any conventional loan.
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  Speaker 1: Fha USDAVA doesn't matter what kind of loan. You can
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  Speaker 1: get up to four units and live in one, run
• 6:27
  Speaker 1: out all the others. But you don't even have to
• 6:30
  Speaker 1: do that. I used to back when I was first starting,
• 6:32
  Speaker 1: I rented out rooms if I could. My current house,
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  Speaker 1: I rent out a horse stall that's in the barn
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  Speaker 1: in the backyard. You know, we are on a couple
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  Speaker 1: of lakers now, I'll run out of anything to bring
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  Speaker 1: in some cash flow. And even if you're not cash flowing,
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  Speaker 1: like if you're not making money on the property, the
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  Speaker 1: average American spends over thirty percent of their total net
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  Speaker 1: income on their living expense. So even if you buy
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  Speaker 1: just a duplex and your buddy rents out a step
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  Speaker 1: to the other unit for twelve hundred a month and
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  Speaker 1: your mortgage is fifteen hundred, Okay, your mortgage is now
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  Speaker 1: only three hundred dollars. You just knocked out an enormous expense.
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  Speaker 1: It's the same effect. So saving keeping your money, it's
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  Speaker 1: the same thing as not spending it.
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  Speaker 3: Right, So that the idea, So you're in the market
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  Speaker 3: for a new for a home, your first home, buy
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  Speaker 3: a dude.
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  Speaker 1: Yeah yeah, yeah, or by a single family home. It's
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  Speaker 1: got a lot of bedrooms.
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  Speaker 3: You know.
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  Speaker 1: The only downside is I understand you know a lot
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  Speaker 1: of people have messaged me and said, you know what
• 7:26
  Speaker 1: if I've got four kids and a wife and they
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  Speaker 1: don't want to You're right, that's that's more difficult. So
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  Speaker 1: you can run out rooms. You don't want strangers living
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  Speaker 1: next to your kids and your woman. She's not going
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  Speaker 1: to like that either, But you know, I still stand by.
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  Speaker 1: You can get a multi family, or you can figure
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  Speaker 1: out how to rent something. Let them put parking r
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  Speaker 1: V on the property if you've got acreage. A lot
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  Speaker 1: of ways to get creative, and it may not be
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  Speaker 1: very comfortable, but hey, so is being broke. So pick
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  Speaker 1: your poisons.
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  Speaker 3: I like it. I like it all right. I know
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  Speaker 3: that people out there are going to want to connect
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  Speaker 3: with you on the web. I want to talk to you.
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  Speaker 3: How do you How do we find you on the web? Connected?
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  Speaker 1: So you can message me on Instagram, Facebook, I'm at
• 8:03
  Speaker 1: Jefferson Callaway on all those I'm easy to find. You
• 8:06
  Speaker 1: can also email me Jefferson at Calcapital dot us. That's
• 8:09
  Speaker 1: the real estate company, so it's CALC A L Capital
• 8:13
  Speaker 1: c A P I T A L dot us. You
• 8:15
  Speaker 1: can always email me and I'm pretty busy. I've got
• 8:18
  Speaker 1: a Homer modeling company up here in Philadelphia, so I
• 8:20
  Speaker 1: can't respond to stuff. But I mean, if somebody wants
• 8:23
  Speaker 1: some paid consulting, I have no problem doing that. You know,
• 8:26
  Speaker 1: spread the wealth around a little bit.
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  Speaker 3: Appreciate you coming on the show. Got a question, comment
• 8:31
  Speaker 3: or Jefferson myself. Shoot me an email k L at
• 8:34
  Speaker 3: Kerry Left dot com and to find a link to
• 8:37
  Speaker 3: jefferson site to show that this interview on Financial Survival
• 8:41
  Speaker 3: Network dot com. And I'd ask you to sign up
• 8:44
  Speaker 3: for your pre newsletter.
• 8:45
  Speaker 1: Join.
• 8:46
  Speaker 3: I think we're up to about sixty thousand subscribers. Now
• 8:50
  Speaker 3: join those sixty thousand people get the newsletter for free. Jefferson.
• 8:54
  Speaker 3: Appreciate you coming on and we'll talk to you soon.
• 8:57
  Speaker 1: Sounds great, Thanks Lochey, I really appreciate it.
• 8:59
  Speaker 2: Thanks listening to Carrie Letz's Financial Survival Network your solution
• 9:04
  Speaker 2: to today's trying times. For the latest, go to Financial
• 9:08
  Speaker 2: Survivalnetwork dot com. Financial Survival Network now more than ever