Episode 37 | Micah Rutherford | Military Millionaire Podcast

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Micah Rutherford on The Military Millionaire Podcast

00:00 - 05:00

David:

What's up military millionaires. I'm your host, David Pere. Today I have a very interesting episode with Micah Rutherford, where we talk about when, when the what if happens, right, so we will talk about what happens when your property gets hit by Hurricane and you just happen to be deployed overseas 18 hours away.

And there's some really cool stuff in here that I didn't even know existed. And some ways to really help you out if you ever find yourself in a situation like that. That's really scalable and a great system. So I am super glad that I got to interview Micah, and just hang tight.

If this is your first time listening. Thanks for joining the community. This podcast is produced every week for your enjoyment. The show notes are found at Frommilitarytomillionaire.com/ podcast. Now relax and enjoy the show.

Intro:

You're listening to the military millionaire podcast, a show about real estate investing for the working class. Stay tuned as we explore ways to help you improve your finances, build wealth through real estate and become a person that is worth knowing.

David:

Hey, what's up everybody? It’s Dave and I'm here with Micah Rutherford, who is an Air Force pilot. And I want to say the U 28. But I don't understand enough about your airplane. So we'll get into that in a minute. Micah and I got connected through a mutual friend who I had on the show here recently. And we talked on the phone for a little while, and had a pretty cool story. And I figured, well, he'd be fun to have on the podcast. And here we are.

So Micah, thanks for joining us. Tell us a little bit about yourself.

Micah:

Thanks for having me.

Yeah. So I'm a captain of the Air Force right now I am stationed at Hurlburt Field Florida fly a Y 28. Which is a part of Air Force Special Operations Command specializing in intelligence surveillance reconnaissance is our stuff can't really go into too much detail about that. So we can just leave it like that. We're just, that's what I describe as a spy plane. It's a lot of good missions, a lot of fun, and working with some pretty cool people.

Joined the Air Force in 2009, went to college, graduated and then went to pilot training after that. And after that I was sent over the field which is where I've been since March of 2015. Yeah, after that, I started doing some real estate investing and got connected with a couple guys out here in the squadron and they kind of the, put a little bit of gasoline on the fire. It was kind of a small dream and I didn't really know where to go or how to start. And they kind of just guided me in the right direction. And now here I am. Three properties later. And I did my first podcast. So thanks for having me again, Dave.

David:

Yeah, absolutely. So walk us through your first deal. We'll start there.

Micah:

Okay, first deal.

First deal actually took about if you want to count the education piece of it about eight months, I got connected with a guest who previously had Jeremy Porto. And he kind of became my mentor, he guided me along he gave me books to read podcasts, listen to websites to go check out. And that's what I did for just eight months, I just devoured everything I could my Audio book list on my phone is like you just keep scrolling, it just doesn't stop that commute to work about 25 minutes each way. So I just listened to the audiobook on one and a half or one quarter speed. And I would just crush audiobooks, like once a week.

And so and then I would get deals, I'd send them to him, signed up for multiple MLS listings from realtors out here in the area. I see a FourPlex, a duplex etc pop up on the market, I do my own analysis and send it out to Porto and he would be like they missed this. Hey, that looks good. What do you think about that, and then he would just kind of guide me along the way.

Well, the first deal came around. And it was a fourPlex, and numbers were good. They weren't stellar. But for a first deal, eventually, you can only analyze so much. And then you just gotta jump in because you're going to analyze all day long, and they get stuck in analysis paralysis, and you just don't ever do anything. And I felt like I inserted Porto to, I had enough knowledge to at least get started.

So I made an offer, I actually offered 4000 above the asking price, because there's three other competitors bidding on it as well. And they accepted. And then I went through the steps of closing on any normal place, it's pretty similar to a single family home with four units or less. And then after that close 30 days later, send it off to a property management company and rest is history.

David:

That's awesome.

So what do you think was your like? Was there an aha moment in there? Or what made you decide to keep going with it?

Micah:

I would say the aha moment is whenever you take something that's conceptualized, you just visualize it you like for example, all the analysis I would do, I'd be like, Oh, these numbers and then you'll be getting this much money cash flow every month. And the aha moment I would say is seeing that in reality after those first couple checks started coming in from a management company.

I mean, we're talking four units here, so it wasn't cash flowing like 1000s of dollars, but it was definitely making a solid return every month. I would look at that. And I'm like the realization like from conceptualization to reality it was it was that was the aha moment, I would say.

05:00 - 10:00

David:

Yeah, that's awesome.

So I guess we can kind of we'll kind of get into some of the details later. But I'm curious, we were going to talk about this a little bit, but you're in an operational field that is gone almost as much as you're home. You're all over the place.

So a lot of people, whether military or not, are turned off by the idea of what if something happens, bla bla, bla, whatever. What did you do to get over that, that fear? And the Oh, man, what if? You know, because because your first property, you're like, Oh, I got this property, and I'm gone. And I might be back. And I, how do you get past that as a young investor?

Micah:

I would say just doing it, honestly, just taking, just taking the leap, just jump. And that's kind of what happened. Because after I bought that first place, it was approximately three, three and a half months later, I was on an airplane going overseas again. And while I was gone, well, leading up until that point, while I was here, most of my communication with my property management companies via email, I went to like being my first place. I drove by it one too many times a week, probably they say like, why is this creepy guy driving by in this truck every week, because we are the first property she's my baby to take care of.

But then that slowly died off. And then I was just taking phone calls and emails from my property management company. And then well, before I deployed, I went in to talk to my manager for that property. And I was like, Hey, man, I'm deploying, I need you to send any communication via email. And he was like, Yeah, not a problem at all. And most of their communication up till that point was email, unless it was a quick, you know, phone call, hey, man got this going on? What do you want me to do?

So they just send me emails, they get vendor quotes, they handle the collecting the rents, hunting down people for rents, that it's it makes it so much easier when you pay. It's worth it that 10% you pay a property management company, absolutely worth it, especially when you're gone a lot.

David;

Yeah, I agree.

I actually, I joke about you say driving by a property, I house hack my first property. So I joke about the fact that it was the same thing, like wanted to micromanager or ask questions, or what are they doing to my lawn or whatever. And then I finally move to Hawaii, which is, you know, 4000 miles away. And I'm forced to rely on my property manager. And it's like, everybody freaks out about going long distance, but I'm so much more relaxed now that I can't look at my properties that I wasn't I was driving by wondering what they were doing outside or why they had this ugly tarp hanging up or, you know, stupid things like that. They don't actually matter. Because the money is coming in.

Micah:

Oh, absolutely.

Yeah, that I noticed that was my place to there's one tenant, probably the messier one a little bit. Um, she had a boyfriend that lived there. And he had a bench press machine, one of those just old rusty bench presses that just sat in the front yard. And it just drove me nuts, as well as they had a couple kids. And the kids, of course, like kids do just leave their toys all over the yard and, and everyone's standard of living, or how clean or how organized they are, it's different from every person.

And if you're a little OCD, and someone else's with a tenant's a little less OCD, and you see that every day is gonna drive you up the wall. And I quickly realized that I didn't have the mental capacity or the time to sit there and worry about it, were they paying rent, was the place on fire? Cool, I don't really care, just pay your rent and take care of the place. That's all that really mattered. And then of course, I would tell the property management company, hey, we gotta keep it a little bit cleaner. But you know, it's been so I just stopped driving by and my life and the weight off, my shoulders just lifted, it was so much better.

David:

Alright, so you make it past, you know, sticker shock in the initial phase of uncomfort. And you go into deployment. And I'm guessing you're saving some money, you learned some new stuff as much as you can while you're gone. But what happened next, because I know you've scaled a little bit since then. So we'll kind of walk a little bit farther down the story and see where we go.

Micah:

Yeah, absolutely.

Um, so I came back from that deployment. And I got a lead from a buddy and we who he actually got a lead from his insurance company. They knew he invested in real estate. So they're like, Hey, we got this place for closing or excuse me an estate sale. Do you want He's like, not the right time, though. I'm looking to do something else. And so then he calls me and he's like, hey, there's a fourPlex, do you want it and now he's a state sale. There. I asked him one, you know, one ad for it.

And I just looked at that and I went over there drove by and I was like, places beat up now see why it's so it's so much cheaper in the area compared to other fourplexes what they're going for, and then I did some math did more that analyzing and realized, fix up a couple units, raise a few of the rents, and then I could refinance later down the road. And it's and it's worth it. So I took the plunge on this one. And this one was more of not jumping into the first deal like the first one was and learning all the intricacies of that this was more of fixing up a unit, fixing a roof and then putting money into it, a decent chunk of money into it. And then doing the refinance process and pulling that out.

10:00 - 15:00

Micha:

So again, I offered a little bit above because there's also competitors on it, and I knew this would make money. Got it. And then I fixed up to the units. And I got a couple contractors to give me quotes at first and the quotes were insanely high, high.

So I think part of it is they didn't really want to do that small job fix up to 850 square foot apiece units, that's they want to handle something bigger, so a little bit more. So I found a couple handymen to take care of the units. And then I would just go to Lowe's, use my military discount, buy all the equipment, parts, materials, everything, and then I would have it ready for delivery on next day, the handyman drove by, and he picked it all up, took it to the place and start doing the work took a little bit longer than I anticipated because all of a sudden, hey, they missed something forgot to order this or Hey, this needs to get fixed now. So then there's, oh goodness, probably 20 to 30 trips to Lowe's.

Thankfully Lowe's was pretty close to work. So on my lunch break, maybe lunch breaks. On that hour of time, you know, we usually get I'll be driving, you know, 10 minutes down the road to Lowe's buying a bunch more stuff than right back to work. And a handyman will pick it up, go in and fix it up. And I rented it and refinanced it a little bit later, pulled a decent amount of money, not all of it out, but pulled some more than money out. And that was my second deal.

David:

And I'm jealous, we Marines are not allowed to leave base in our uniform, with the exception of work and dress uniforms. So I joke about it because the Marine Corps Base Amman in Hawaii, it's very secure.

And I mean, even like I had an army captain or Lieutenant come and have lunch with me once and it took him like almost 40 minutes to get through the front gate. And I didn't even think about it like Oh, he's an active duty officer and will be fine. No. And so we almost missed lunch.

And so I joke about how terrible it is because I want to go to lunch. It's like, Okay, well, you can't make it on the base to see me. And I have to change to go meet you and come back and change again. It's kind of a pain. So just very rarely happens. It's and I can't even imagine I would never be able to go to Lowe's during lunch because, like, sorry, I'm stuck.

So that's nice. Anyway,

Micah:

There were a lot of lunches in the car then.

David:

Taco Bell. And that's my crutch.

Micah:

Yeah, for sure.

David:

Okay, so how did the refinance go? Like? Can you walk through kind of just a broad overview of like, you know, purchase work rate refi, like how much you get left in it, that kind of stuff. Or?

Micah:

Yeah, I can go into that a little bit. So I bought it for about 185 and put about 25 into it, I was able to fix up each of those units by doing a handyman pretty cheaply. But that 25 also included the roof too. So I got it.

Yeah, I got each unit done for about seven, seven apiece. I helped out a little bit with some of the demo here and there, but mostly led it to them. And they were just happy to work. And they did a good job. So the downside of paying seven grand for each unit, which is pretty phenomenal, is the fact that they took a little bit longer. It was like it was a lady and one of her friends. And so it's a little slower, but anyway, bought it and then put some more money into it. And then I refinanced it for essentially what I paid plus what I put the money into it.

So I refinanced it. And I didn't, there wasn't a seasoning period long enough, yet at that point, but I wanted to get that money out because I was ready to do another deal. So the numbers kind of make a little bit more sense if you but I bought it actually cash and then I put the money and then I pulled about 140 or so out of it. So it worked out for sure. It was like I said a long process to have all the money tied up.

And yeah, but the downside I realized that too is the refinance costs kind of sneak up on you too. So I spent a decent amount on refinancing. So that's why I'm not as eager to refinance right now. I would like to, it's got a pretty good amount of equity into it. But you got to balance that because every time you refinance, that's a huge chunk of your profits that come out of your property.

So Brandon Turner talks about BRRRR a lot by rehab, rent, refinance, repeat. One thing in there that needs to be addressed is refinance costs a lot of money If you don't put that into your analysis, it's gonna bite you in the rear down the road.

15:00 - 20:00

David:

Sure. I agree.

The book that just came out on that's pretty good. And I think it touches a little bit on that. But it's yeah, it's definitely a cost that needs to be budgeted for. But you know, even even with that biting you in the rear, I would still say getting 140 grand back is worth a little bit of a bite, because you can go and buy another property, right? Because it takes a little while on a military salary, even if you're deployed and tax free to save up 140 G's. So.

Micah:

Yeah, it definitely took up a while. And that's, you know, I was an officer in the Air Force for several years for that for quite a few years plus, saving aggressively and then lots of deployments, too. So there was one year I deployed and I had seven months of tax free to deploy.

David:

That’s awesome.

Micah:

The career field I'm in helps a lot when you save, especially taxes. That's another big thing. Taxes are huge, just get it as low as you can.

David:

Yeah, absolutely.

All right. So we've now got eight units. And is this where we bought the fun one?

Micah:

This is where we have funds a very loose term, but yes,

David:

It's the same kind of fun, I'm going through with a lawsuit right now. So here's, here's probably more fun, because you're, you're gonna, like who knows what's gonna happen with me?

Micah:

Basically, it's all good for both of us.

David:

So what happened with this one?

Micah:

So got back another one or two deployments after that paused again, just, every time I buy a new place, it kind of stretches you a little bit. So it's like a muscle, you get stretched workout and just let it grow a little bit, let it solidify, build your cash backup, deployed, sitting there about three weeks to a month from getting home and as deployment and I'm sitting there, and I'm just like itching, itching to get something else.

And so I didn't know what to do next, I've been looking and this is about a year and a half ago, when the market started to stagnate a little bit in the sense that everything is becoming way overpriced, people are holding on as well as everything is becoming way overpriced. So deals are hard to find.

So I hopped on BiggerPockets, which I'm sure a lot of us are familiar with. And I just tried to expand, I'm living in the Fort Walton Beach area. So I was like, let me look down on Panama City. So I went over there and put the geotag for Panama City on the forum. And I looked for a realtor that was experienced with investors, not just for a single family, you know, home that you want to live in.

Like almost instantly got a reply back from a very active realtor out there who also does investing himself and in several places himself. We connected, started talking, got back and we went out there to meet him pretty quickly. About three days after I got home from deployment I unpacked, took a day break. And then the next day, I was driving out to Panama City to go look at places. So we drove around, I got to meet him and build the rapport. And then he showed me a 10 unit that was not on the market. But the owner was willing to self if he got the right price.

So start doing due diligence, looking at the numbers seemed like you'd think it was under rented. And the price that he was asking for was pretty good. It wasn't great by any means. But it would take a couple years, use the rent cash flow money, plus a little bit of cash flow money from my other two places, excuse me. And as the units came, do move the tenant out, do some basic fix ups, and then hopefully, refinance or sell when the balloon payment was up.

Next step was I didn't have the cash for a commercial loan for 25% 25 to 30% then asking plus closing costs, I would have been negative plus I wouldn't have had any reserves in case something happened.

So I brought that up to the realtor. I was like man, I'd love to get this place but I don't. I don't have the money for it. He's like, well, I might know somebody. It's like who are you? This is amazing. Then he brought me to a private lender who owns a tax business as well some rental properties himself. And I just straight up told him I was like, Look, I don't have the money to have an adequate amount of reserves as well as pay for 25-30% down. I want to do a 10% down 9% loan to value.

He said okay 6% interest two points. And I expected him to come back with you know, at the time seven 8% for asking 90% loan to value on a over a half million dollar place. And I instantly was way better than I ever predicted on any of my analysis. I was like x with the exception that you roll the points into and he was okay, that works for me.

So that would move to closing and the inspections looked at the place, a little bit different with the private lender because he actually wanted to be there for all the inspections, he wanted to look at himself, they wanted to be a little bit more hands on. So it's a different aspect from dealing with a conventional bank dealing with a private lender. They're a little bit more involved. And it's not a good or a bad thing. It's what it is. And so that was a learning experience there.

20:00 - 25:00

Micah:

So got that place. And then well, another deployment, right is hurricane Michael hit. Yeah, so that was a good time, Hurricane Michael hit when I was over the middle of the North Atlantic on my way to Afghanistan. And I landed, I hastily tried to connect to any WiFi. And if any one of you guys have been to Afghanistan, you know, it's kind of sporadic in places.

David:

Oh, the wifi there is great.

Micah:

Yeah, it's amazing.

David:

Best service ever.

Micah:

So here I am, dragging my bag around and right around with my head cut off trying to process as well as find any form of WiFi, because I need to know what's going on. I'm like, worried I'm freaking out a little bit, suddenly owned this place a little under a year now when hit.

And yeah, found out damage is pretty bad. So then the next step was the whole insurance process. And that was a pretty big headache right there too, which is still ongoing right now getting the repairs and insurance money. But it was different, it was very different buying that place. Because the private lender aspect of it, as well as just finding a deal completely off market. Like up until that point. You always hear people look off market, look off market. And most people are like, I don't know what to do. I don't know how to do that. And it's as simple as just hopping on a forum or calling people that are realtors in town because that's all this guy was. And he was just very active and knew the town very well. And that's how the deal fell in my lap.

David:

Yeah, or property managers or you'd be amazed where you can find them. The cool thing when you're dealing with things like a property or a private money lender and off market deals is that the sky's the limit for what you can come up with, right?

Like he could have said 0% interest in 10 points or zero points and 45 percent, like whatever, you know, and it's like, Okay, well, that works or that doesn't.

I actually kind of like the fact that like when they're a little bit more if people are a little more involved in the property, because it's like, Okay, well, I was happy with all this. But if that guy also thinks it's a good deal, like, makes you feel a little bit better inside, I guess.

Micah:

Absolutely.

David:

Or maybe they caught something. But uh, yeah, it's cool that you were able to find this off market and get introduced to, you know, a private money lender, all in all in one.

Micah:

Yeah, absolutely.

Yeah. And you're right, like, it's good. Because honestly, I don't have the experience he does, back in 2006 2005 him and his dad were building houses and selling them non stop. He actually has a podcast on bigger pockets. But they were just doing it, they're just going crazy. And so they've had the experience of years of building houses, selling houses, owning rental properties, as well as knowing the tax law pretty well, because they are consultants for that.

So whenever I, whenever I do something or go for the plan, it's a little bit of a little bit of a breather, like a little bit of a safety net. When you know that they're agreeing with you. And they're not, you know, pushing back or anything like that, because they have years of experience compared to me, who has if you count my eight months of education, probably about three. So it's a nice comfort, for sure.

David:

Yeah.

All right. So the hurricane hits, obviously, you're still kind of dealing with this. So we don't want to get into the weeds too much. And obviously, you couldn't predict a hurricane. But is there anything through that process that you've learned that might be helpful to other people so far? I know it's kind of a weird situation. Because again, you can't predict that that's going to happen. But.

Micah:

yeah, I would say if you live on a coast and they say a hurricane can hit, you know, a hurricane can hit. The world is statistics. If the odds of something happening are going to happen well then eventually at some point is going to happen. Odds are a hurricane is going to hit the Gulf Coast at some point in my investing career more than likely it's..

David:

Hopefully not again.

Micah:

Yeah, hopefully, hopefully not again, but it hits sooner rather than later. Luckily, like I said, I made sure I had enough reserves for this place. But the hurricane hit. I would say up until this point like all the education and reading and mentored mentor discussions I've been having up until this point, we're on finding a deal, managing a deal, repairs that kind of stuff. Very little of it up to this point outside of just making sure I had good coverage, good insurance coverage. That was about all that I ever did for insurance wise I made sure I had good coverage. I made sure it's an affordable price that makes sense with my cash flow model.

The interest intricacies of dealing with a claim though can be a pain like a huge pain, not just as simple A fender bender, they call Okay, they took, you know, took liability, here's your check, go fix your car.

25:00 - 30:00

Micah:

Now this is like they will come back at you every step of the way trying to knock stuff off like Oh, we don't think that's worth that. This no, that wasn't even damaged by the storm. So they're going back and forth like that, combined with I just arrived in Afghanistan and I wasn't there at all. So I ended up using a public adjuster. And those you that don't know a public adjuster essentially go between the insured and the insurance company. And they charge a fee, usually around 10% of the total claim they get.

The upside to that is that they were very able to be very helpful going into the property and getting as much out of the property as possible for the claim. Because if you think about it, an insurance adjuster, or a public adjuster and yourself, you're on the same side, and the more money that you can get to fixing the property is a benefit to you, as well as it's a benefit to him.

So you guys are on the same team trying to get the maximum for your claim. So I hired a public adjuster, and that actually took a bit of the burden off because then he would give me regular updates via email, I was able to wrangle up a phone and call him once or twice. That was pretty difficult, but it was doable.

David:

We tried to get him to answer a phone call. It's got like 15 phone numbers ringing through.

Micah:

It had like, yeah, like 15-16 digits that it was routed through. I don't know where I don't know what they are.

David:

They're super sketchy when you call from the set phone.

Micah:

Yeah, yeah, it was different.

But yeah, well, a lot of it over email, and he took care and like he took care of a lot of stuff. You had to get it caught like some, like, like, as simple as to get more money for the claim, instead of just having a guy that someone from the insurance company walk in and look at all the damage to wet walls and messed up floorings and broken windows.

If you get a contractor that goes in there and mitigates the place takes out the wet drywall sees what's behind it gets moisture readings, then you open it up and you see even more damage, frame rot, etc, etc, just more damages opened up when you get a contract and then obviously have to pay the contractor for mitigation.

But when we did that, we noticed that the amount of the claim went way up because the damages that are hidden by a lot of that stuff is not available. So it's just little things like that throughout the whole process that you're just not aware of. So it was definitely still a huge learning experience going through the insurance claim portion. Which is kind of like it's made me about to deploy again, actually here in two days.

So, a couple of books I bought beforehand, grabbed a couple insurance books, I'm not sure if there'll be any good or not just kind of read up more on insurance and how that process works. Because I realized very quickly that that was a weak spot in the foundation of my education. So it's different for sure.

David:

Well, I'm really glad I asked that question, because I had never heard anyone talk about a public adjuster. And it sounds exactly like having a property manager or it's like anything in life, right, you either deal with it, you get what you get, or you pay for expertise or time or whatever. And as long as that person is good at their job, it'll pay off. But like, a lot of people would say, oh man 10% of the claim, I'm not paying that, like the schmuck wants too much money, but the reality is, you're gonna end up getting back more, using him and paying him that 10% than you would have going in blind and letting you know, because realistically, the insurance company is there, they're good at their job. And they're gonna get what they’re, you know what they want out of it if you don't know what you're doing, and you're far away.

And so I've had a guy who was on his deathbed and decided to move out of my place who like took his u haul through probably about seven feet of my roof. And then tried to just backed up like backing up and instead of backing up on the sidewalk, he backed up through the roof. Like the whole overhang over like three units with witnesses. And I've got a police reports description. You know, that was my neighbor. I saw him. I know his license plate u haul like everything and it still took seven months and they were like, No, no, that guy didn't borrow a vehicle from us. Like, okay, well, but you filed an insurance claim to fix your vehicle. So you know which vehicle you know the damage is consistent with what I'm saying. So whoever did take out the vehicle, like you know, you caused this damage, it was a mess.

And I can only imagine how much worse that would be with something like a hurricane so I didn't know about a public adjuster that's huge. Because that'll somebody listening to this is going to have an issue at some point. You know, unfortunately, that's gonna save them a ton of time a ton of headache and honestly bring them in a lot more money.

30:00 - 35:00

Micah:

Yeah, absolutely.

At first, I was very hesitant, because 10% is that that could add up to be a lot of money very quickly. But I was kind of pushed into that decision. I'm a very do it yourself, obviously, with the fix up that I did, I did a lot of that myself with, I mean, the managing of myself. So at first I was very hesitant to actually sit on this decision for like three or four days, just sitting there wasn't sure if I wanted to do it or not.

And then I was finally this, I was like, I still have months here, I can't sit on this. And I can't manage a claim without being there. And I have to do this. And I, of course, did a bunch of research online, read about public adjusters, and then you hear the good stories and the bad stories. Public adjusters take you to lunch, public adjusters did this for me, and they did amazing.

The bottom line is like insurance is it's very law, as well as the policies are very well written to protect the insurance company. It's the law, maybe not as much. But like the policies, you have to find your fight through every little loophole and an area of it. So having that guy there, he was able to help a lot with the process. And he's still doing that now too, because the insurance company didn't still haven't paid enough, they gave a huge initial stuff, just the check to get me to go away. But they didn't pay for everything. There's so worrisome in supplements, and it's so it's so easy with a public adjuster, especially if I'm gone a lot, especially for military that are gone a lot.

Having good health, having good people that can help you out is like that is the foot stomp of what I'm trying to say is have good help, because you can't be there for all of that, and I will. And if I had done like two or three insurance claims prior to this, I'd be like, okay, I can probably learn from trial and error a little bit. But first claim deployed, yeah, hire a public adjuster.

David:

Well, and the reality is, and we say we say you can't handle all this while you're away. The reality is that in a lot of these situations, you shouldn't handle it, even if you're there because, and service members have this pride thing that likes to get in the way of a lot of our life decisions. And so I say this out loud, knowing full well that I would be a victim of this head, I've been in Springfield. And that happened. Obviously, if a hurricane hits Missouri, I've got much bigger problems. But let's say a tornado that's realistic. And something like that happens, I'm gonna try to fix it. And the reality is that I would miss out on a ton and get super fired up and probably have a heart attack, trying to fight this insurance company. When I could just say, Here you go, this is your lane. And that's a lot of times the best way to do it, even if you can physically handle it yourself.

So I think I'm just glad that I heard you say that, because now I know, hey, this guy exists, and I need to use him if something happens, because that's huge.

Micah:

Small stuff. Like I probably wouldn't hire a public adjuster, but big stuff like a hurricane knocking out a 10 unit out 100% they. You're right. And a lot of US military guys just do it yourself. Do it yourself, you know, you push through anything that I was about to tell you, you can just know, just a little bit of sweat and blood, you're fine. You're good. Just go.

David:

Yeah.

Micah:

And doesn't always work like that.

David:

Not scalable, either.

Micah:

Not at all. And you got to decide like, how much is your time worth? Is it worth the four or five calls a day is like, no, my primary job is to be a pilot and go fly and deploy. Like, that's my commitment. That's what I signed up for this is a side, this is a side business right now that I hope to scale enough that when I'm done with the Air Force, I can easily transition into this as my backup.

So yeah, it's the time management and finding people to help you with that.

David:

Yeah, I found the easiest way to improve my income with real estate is to not be involved. Because, you know, people joke about like you say, what's your time worth? Well, let's say I make, I don't know, we'll say 1500. Because it's a nice round number in cash flow this month, and I spent one hour bouncing my book, please make $1500 a month in real estate, or $1500 an hour.

So the moment I now spend three hours, I just kept my salary, you know, 30% and so, or 90-70 70%, whatever the math is on that, whatever way the percentage goes. And that's, that's huge. And when you start thinking of things in that time, or in that regard, like how much is my time worth, how much is, you know, like, I hired someone to help me with insurance because it's just not my expertise, and I got a better deal. And now I can just not deal with anything. And you know, you gotta find someone you trust, but little things like that, where you hire a professional. They're there for a reason. As long as they're good at their job. They're gonna make your life easier.

Micah:

Oh, 100% yep, they will. That's the name of the game. It's so hard when you're OCD or you're like very want to be very hands on just taking almost a just a backstep and just saying, just let it do its thing.

35:00 - 40:00

David:

It's, yeah, yeah, I got to learn this the hard way, as well, you learned through an insurance claim, I learned it through a deal that went south that I'm, you know, in litigation over now. But I had a property manager who I mean, I wouldn't have even known half the stuff was going on without her. And I had to rely on her. And, you know, I said, I was super stressed about all kinds of stuff there. But had I been in town, it would have been so much worse, I probably would have lived in the property.

Micah:

Yeah.

David:

And that would not have worked out. So.

All right, well, we're gonna kind of roll into some of the questions I normally ask. And then we'll wrap this up.

And the first one I like to ask is if an E one, E two or you know, 18-20 year old youngster walked up to you asking you for advice, you only had a few minutes to give them what you would tell them?

Micah:

Absolutely. Just read, read, read, read, do or audiobook, just devour as much education as varied devour as much time from mentors without being rude or taking too much of their time as possible.

Essentially, like, what kind of something I live by is don't reinvent the wheel, when I'm not smart enough to reinvent the wheel, someone else has already done what I've done before, just find their wheel, steal it, and then modify it or copy it, not necessarily steal a copy that, that idea, that technique that plan and copy that and then you modify and tweak it to however you want to operate or how you which direction you want to go.

You don't have to start from scratch, someone else has already done this. That's why there's books out there. That's why there's people out there that are doing it. So don't just start avoiding, go find somebody go read a book and just devour as much as you can, you'll read a pretty terrible book here, they're a fake, a fake real estate investor is just trying to make a quick buck on a book.

Just throw that one away, burn it, and then move on to the next one.

David:

And post all over the world about that book so that other people would know.

Micah:

It's probably gonna be a good book, if it's been talked a lot about by word of mouth, if it's advertised a lot. Take it or leave it.

David:

Yeah, I do, like, weekly book reviews. And I always joke Yo, and you're hearing about this book, which means it's probably worth reading, in my opinion.

One of these days, I'm gonna do a, you know, instead of like, a little two minute review, I'm gonna do like a 10 minute review and just be like, you never heard about this book. Here's why. Three or four books. There's one, it's on the Marine Corps reading list, you know, the common ones reading list. I've read a lot of them. And they're really good. But there is one I'm not going to name it on here. But it is like the worst. But everyone I talked to him just don't read that book off that list. Like there's no value out of it. It's super hard to read. Don't do it.

Micah:

There's always one book like that, for sure.

David:

I digress. And what's funny is you remember more about those books than you do the ones that are good, because you're like, oh, why am I wasting my time with this?

Micah:

It's like, it's so bad. I remembered every bit of it. I like the latest season of Game of Thrones, right?

David:

You know, I have not ever watched an episode of that. And I told myself when it was over that I'd probably go back and watch it just to see what all the fuss was about. Because I do like TV, but I don't like to, you know, be bound to when the show comes on.

Micah:

Right.

David:

I don't know if I'm gonna do that now. Because everyone was so mad about the ending, then I'm like, Okay, well, I'll just avoid wasting that many hours of my life.

Micah:

Probably a good choice. Read a real estate book instead.

David:

Alright, so I like to ask this question. I'm gonna preface it that I don't believe the military is responsible for teaching you about this. But I like to ask nonetheless, what is one thing you wish the military had taught you? Or maybe not the military but life had taught you about real estate investing or finances earlier in your life or career?

Micah:

That's kind of a can of worms right there. But.

David:

And the reason I preface it is because every time I don't preface it, they're like, well, I don't believe the military is responsible for I know, I get it.

Micah:

Honestly, I think starting at an earlier age, I got lucky. My mom and dad were pretty, pretty diligent about finances. They weren't wealthy or anything, but they were just middle class American. But they taught me how to balance a checkbook, keep a budget, put some money in savings, spend below your means. They taught me all those basics, those basics that you should get when you're growing up, which was good, it gave me the foundation to stand on.

But then after that college, extracurricular like school in the military, like zero education about finances they teach you about, here's a stock market. This is kind of what a stock is. This is you know, you know, supply demand curves, stuff like that. They don't really teach you realistic stuff about it.

I got all that education out of a book and talking to a mentor. So to answer your question, what I wish they would have taught me earlier was, well, all that stuff I spent eight months reading about, obviously, you have to have an interest in that. You can't make everyone do that. But just as general just like this, I would say the school and the colleges in these in the country are very bad about teaching people. Basic economics, like it's horrendous how bad they are. The kids come out of college. with zero clue how to balance a budget, it's it's it's, it's something that is very much lacking. So that's definitely something in part two years. And anyone else I'll ask and try to get that.

So to answer your question, it's kind of hard. Early in my career, I don't really know. I wish I figured all this stuff out earlier, because then I'd be X amount of years more years ahead of where I am right now.

40:00 - 46:43

David:

Yeah. All right. Let's see. We'll jump to this guy.

What is what's one resource book course website, whatever that you would recommend to anybody getting started in real estate? I know, you just mentioned you read like 100 books a day. So.

Micah:

No, no, not that much.

I would say I started off actually kind of stereotypical, but I start off with Rich Dad Poor Dad is good is good books. Um, he teaches more about context versus content, i.e. context is more like expanding your mind to be able to handle situations with money. And then content is more of the actual meat and potatoes of how to do something.

So I'm glad I started off with him, because he started out expanding my abilities like, Hey, don't think and like fives and 10s and 1000s of dollars, start thinking in hundreds of 1000s of millions of dollars. And when you start thinking about that, that amount of money, it's the same principle to $10 million for handling that money and getting return on that as it is $10.

So he's like reading the Rich Dad, Poor Dad books. I read most of them, not all of them. But they are spent in my context. And he gives an example which is stuck with me to this day, his context is like a glass of water. And then money is like the water. If your glass is only so big, you can only handle so much money before you don't know how to handle it anymore.

The content is how to get that water into your glass. So the bigger your context is, the bigger your understanding the ability to handle more money, the more you can handle, and then you find then you get the content. So figure out the context. First, read those books on, like, how to handle money, and then change your mindset on that and then get the money.

Private samples, you see real estate or not real estate lottery winners, I win the lottery. And you know, two months later, they lost $300 million. And they don't know where it went, how do you lose that much money in less than a year? Because their context is not there.

David:

And they're often worse off than they started?

Micah:

Yep.

David:

That's nuts. Yeah, I was writing an article today. And I used another one of my favorite Rich Dad quotes about instead of asking, or instead of saying, I can't afford x, you know, asking how can I afford x? And I explained why that yeah, his mindset, the mindset shift that comes from reading Rich Dad, Poor Dad is whether you agree, you know, people argue till they're blue in the face about whether his story's true or accurate, or I say, who cares whether he manufactured the entire thing, and the whole thing is a lie. The point of the book, and the mentality that it is designed to teach, like, I would almost argue that that is more brilliant. If that's really the case that he manufactured this and was able to come up with such a great story to tell, you know, his point across, I would almost argue that, that I'm more impressed by that than if you actually live this life.

But the mindset that that book will put you in and I tell him, I handed that book out, I have a copy. I guess it's in my backpack right now, because I just got it back from someone else. But I have a physical copy that I've actually not read that one. That book itself has only been handed out to people. And so every time I get it back here, you read this now.

Micah:

It’s a great book, it gets you fired up, it gives you just the initial Rich Dad, just the first one, like the first one is probably my favorite still this day just gets you fired up. It gets your context going. And it starts at like you don't know what you don't know until you don't until you like come across it. And that kind of starts opening those doors like hey, I don't really know about this. I don't know about that. And so controversy or not. It's a great starter book for sure.

David:

Absolutely.

All right. Before we wrap this up anything you'd like to add any big ideas or parting advice?

Micah:

No, I don't know, I kind of talked a lot. I think I'm kinda parting advice out right now. But I just honestly, I've kind of said a lot is just like reading honestly, and I've kind of got kind of bad at that. I've kind of gotten to a low because I'm dealing with stuff. So I got myself three or four books I'm taking on this next deployment with me to get back into that reading habit because something will sneak up on you. Like for example insurance that you realize you probably wish you had read a little bit more about it. So.

David:

Unfortunately that in taxes, which are probably the most important are the worst subjects to read about.

Micah:

Yeah, pretty dope, both of them very dope, but it's something that's part of this business and you got to be good at it.

David:

Agreed.

All right. If anybody wanted to reach out and follow up and ask some questions you have anywhere that they could get ahold of you is our best way to contact you or should we keep it super squeaky quiet. You don't exist to the world.

Micah:

Not that secret.

I don't have any social media for real estate or anything like that. I just have my normal stuff if you're willing to, you can follow me, you can reach out to me on those who reached out to me via email, if you want to just, it's [email protected], if you have a question just hit me up, I will talk to about real estate. So I'm blue in the face.

If you want to follow me on one of my social media’s just creep on me, Micah Rutherford, you should be able to find me. And you can just hit me up on one of the private messengers.

No podcast or anything for you to follow. But I will talk to you about real estate, if you want to get a hold of me.

David:

I'll link all that below.

I think that will be really exciting is, you know, once this whole insurance thing is done. I'd be interested to hear how that pans out. And if there's any other stuff that you learned because of that public adjuster tidbit. That's something I mean, I've done, you know, probably 40 podcasts now, actually when the time that this airs will be 45 or 50. And nobody's ever mentioned that. And that's, that's huge.

Maybe that's because they haven't had, you know, 10 units hit by Hurricane.

Micah:

Yeah. Yeah, absolutely.

We'll definitely talk about that more in the future or if anyone reached out to me and asked me about that, if you're going through that just hit me up. And I'll definitely go into that. But obviously, it's still ongoing. So I don't want to go into too much detail about some of that stuff. But it's all said and done. I parted my ways and everything. I definitely will go into more detail for sure.

David:

Awesome.

Well, Micah, thank you very much for joining us today.

Micah:

Thanks for having me.

End:

Thank you for listening to another episode about my journey From military to millionaire. If you liked it, be sure to visit From militarytomillionaire.com/podcast to subscribe to future podcasts. While you're there, we'd love for you to rate the show. Give us a review on iTunes. Now get out there and take action.

Episode: 37

Micah Rutherford

Micah Rutherford is an Airforce pilot!

Micah got into real estate investing when a friend started talking to him about it a couple of years ago. He spent eight months reading, and learning everything he could about buy and hold real estate investing. In a very short time he has purchased 18 rental units, and had one property hit by a Hurricane.

This unfortunate event enables Micah to shed some light on ways to streamline the recovery process from disasters. He even talks about utilizing a public adjuster (which I had never heard of) to make the process smoother, and more rewarding!

His advice to an E-1/E-2 (18/20-year-old) is:

READ! Don’t reinvent the wheel, study the people who have already done it! Also, start earlier…time is your ally, use it!

the resource he recommends is:

Rich Dad Poor Dad! Buy it here: https://amzn.to/2VNc7l4

If you want to reach out to Micah you can E-mail him at: [email protected] or on Social media as Micah Rutherford!

For more information about their program send an email to: [email protected]   Again, that is [email protected]. Tell David and Stu you heard about them through the Military to Millionaire Podcast and they will get you going down the right path.

SUBSCRIBE: https://bit.ly/2Q3EvfE

Blog: https://www.frommilitarytomillionaire.com/start-here/

Instagram: https://www.instagram.com/frommilitarytomillionaire/

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Audible: https://amzn.to/2K0wzxL

Join me in the BiggerPockets Pro community! https://www.frommilitarytomillionaire.com/we-recommend-BP-Pro/

Books I recommend

First read: https://amzn.to/2KcTEww

Real Estate Investing: https://amzn.to/2ltPRNm

Real Estate Investing: https://amzn.to/2yxFBNf

Real Estate Investing: https://amzn.to/2IhQ1QI

Building Wealth: https://amzn.to/2ttiwpf

Efficiency: https://amzn.to/2K1eRdy

Efficiency: https://amzn.to/2yvuu7K

Negotiating: https://amzn.to/2tmCyT7

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David Pere

David Pere

David is an active duty Marine, who devotes his free time to helping service members, veterans, and their families learn how to build wealth through real estate investing, entrepreneurship, and personal finance!

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