00:00 - 05:00
What's up military millionaires. I'm your host, David Pere.
Today we have an exciting episode about using other people's money to buy a house, rehab it, rent it out and then refinance it. With Will and Veronica Pritchett. This power couple has figured out how to buy houses without a single penny out of their own pocket. This is your first time listening. Thanks for joining the community. This podcast is produced every week for your enjoyment and show notes are found at Frommilitarytomillionaire.com
Now relax, and enjoy this week's show.
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.
Hey, what's up guys, it’s Dave, military to millionaire here. So I am here with Will and Veronica Pritchett.
So Will and I met through the BiggerPockets mastermind Meetup group. So we both ordered the 90 days of intention journal. And we got lumped into this cool program where they're starting mastermind groups, and Will's one of the members in there. And as we started talking, we just kind of realized that we had a connection because the military world and he is a firefighter and that world is very close to all the public service and service members, the very kind of a very close community in a lot of ways, both cultural and job related.
So we hit it off right away and realize he'd be a great person out of the podcast. And this is his wife, Veronica, who just retired last year, she was a high school assistant principal. And they've done well enough with real estate investing, that she was able to walk away from her job and do it full time. And so the two of them have built this business, and they've actually taken it to where they now have an online presence. And they're starting to help other people get involved in this. And so it's really cool to hear them talk about this. But I don't wanna steal their whole story.
So if you guys want to just tell us a little bit about yourself, welcome to the show.
Thank you, It's good to be here.
Yeah, we met in the group that was set up by bigger pockets. And there were so many similarities between the military and fire service. And I think we have similar goals and ideas. And so we started just, you know, with a rental house, and we were in the house we lived in. We turned into a rental and it has been something we've wanted to do. And it went well, everyone had told us it's gonna be terrible, or we're gonna have toilet problems and middle of the night calls and, and it's believed there was more upside down. So we just won't give it a try.
And at first I felt like I knew, I convinced my wife to get on board. And now she knows this business better than I do. So it was great. The first tenant, you know, stayed when she left, she left the house better than she found it. I'm, I'm certain of that.
Yeah. And so we kind of debunked a lot of the myths. And he started really focusing on how we treat our tenants, building good relationships with them, we call our business home again, properties because we think of buying old houses, but we're fixing them up. And we want this to be this person's home. And the homes when they move in, and they bring their family and they can take pride in this house.
And so tenant management, relationships, like tenants, seeing them, as you know, an integral part of our business. That's a big part of what we do.
Later, we got into the brrrr techniques, using private money and buying that way and renovating. And it went from there, that was a real game changer, figuring out that method and private money and so forth. And then Veronica took a lot of her project management skills. And so she runs all of our renovation projects, and all of our tenant management now. And so I'll let her tell you a little bit about that.
Yeah, at the same time, when we had our first house, we were trying to decide whether it's sell or keep. And by then we were really interested in investing in real estate. From you know, we both had grandparents and invested in real estate, so that originally piqued our interest. But what really got me was at the same time, we were also looking at how much to save for college tuition. Our son was three at the time. And we thought when we looked at how much we needed to set aside each month just to save for college. And then we thought, well, if we keep this house and it goes well, by the time you graduate from high school, it'll be paid off or close up or pretty much paid off. So we can either sell it or do a cash out refi or you know, and then have our tenants paid for his college.
And that's when I was all in. I said okay, let's try it. And then once we rented that house and everything went so well, and we thought okay, we need to do this again. This wasn't as bad as we thought it was going to be. So it wasn't a bad process at all, and especially the first of the month, you know, it was really nice to have a little extra cash. You know, I thought, wow, this is great. We need to do this again. So that's how we do real estate.
05:00 - 10:00
That's super cool. So have you ever heard Brandon Turner talk about, like his strategy for replacing, or for paying for his daughter's college like the 15 year old, I guess, like an 18 year note? It's really cool, because I'm kind of looking into that, and with my younger one right now is looking okay, well, this might be a better way to fund college than me putting money aside, because the money you know, inflation and all that other stuff. So yeah, it's really cool.
So what are you guys? So you know, you kind of started this website. So what are you, what are your future goals? Like, what are you? Where are you going with the real estate stuff?
I think we, for right now, we're looking to continue with the single families, we like small multi’s in San Antonio, where we live, there aren't a lot of small multi families, the ones that we've found aren't in areas that we particularly like, we can have an air a few areas of town that we really are familiar with, and comfortable with, will entertain some other areas. But we'd like some fourplexes. And things like that are so far we've had better luck with singles, or maybe houses with rear apartments behind them.
I think our immediate goals are to get up to maybe about 30 doors, and then reassess and decide if we want to get into some nodes or some lending or just keep doing what we're doing.
Now, these systems are working well, you know, the economy, I think things are gonna change. I don't know exactly how, and how we're going to respond to that. We're not in a really volatile market, we know, where we live in San Antonio, we tend to see gradual inclines and gradual declines. We don't have these real cyclical types of markets. So it'll be interesting to see how that goes.
I'm glad that we got in on some of these low interest rate loans. And when did we see that as part of the asset itself, and continue to build this portfolio, it's been tempting to get into Airbnb or get into a lot of different things. But we realized we're kind of chasing the shiny object. And we said, let's see we've tweaked this model. Let's keep doing what we're good at, and what we're confident in. And, and then we'll go out once we get the foundation laid here.
So I think we're looking at, you know, an immediate goal, maybe 30 doors and then and then reassessing. It's been going well, so far. I don't know what you give that.
Yeah, we really like the single family, like I said, the one that had cash was the fastest one with the apartment in the back. So that really motivated us to look into the multifamily. But the more we looked into multifamily just didn't make sense for our model. Because ultimately what we want is freedom.
So it's all about lifestyle, and the freedom that real estate provides. So me being able to quit my job, you know, I was just, we were just talking, I thought, wow, we really the current rentals that we have, they don't really demand a lot of work time. My work hours right now are on acquiring new properties in the rehabs and growing our business. But our existing rentals really do not require much work at all. But I also think that's because of the model that we have and where we buy, the type of property that we buy. Bear Counties have 42% are renters in Bear County, where we live.
So it's very easy to find a tenant. But what I like about single family is that it's it's really easy to find a tenant, we have less vacancy, they tend to stay longer, and they're easier to sell, you know you don't have because typically a multifamily, you're going to have to have another investor and depending on the way the economy how the economy doing. It's a little riskier. Yeah, they might cash flow more. But I don't know that it'll offer the same amount of security and freedom that our plan is right now. Maybe later on, it'll change. But for now, what we're doing is working.
We go to a lot of real estate meetups and a lot of networking. And it seems like everyone has a different method and a different strategy. And it's so easy. We hear about senior living, residences, and you hear about Airbnb, it's like, oh, that's what we need to do. And then we're reminded about what our goals are, why we got into this in the first place. And so so far, it's working for us.
That's actually really cool. I like that. You mentioned the shiny object syndrome, because I'm terrible about shiny objects and the new strategy and that sounds cool.
Yeah, knowing your why, and then being able to expound on that to know okay, well, this is my why and this is how I'm going to do it. And then sticking to that because you don't need to be sure there could be other methods of real estate that might be a little bit more profitable. You know, we all hear about syndication, but that takes a lot more work to get started then, you know, a single family home. And so it all goes back to what are your goals and finding like you guys want passive income.
10:00 - 15:00
So I'm kind of curious to ask you if you mentioned some brrrr strategies with private lending. How do you how have you structured that as far as like what kind of are you like bringing in a private lender and saying, hey, you know, we're going to do this whole property, and then we'll give you x dollar amount back plus this or, I'd love to hear a little bit about that.
We typically do simple interest and will, for most of our lenders will pay them every month, we'll pay them an interest payment. And it's a great return, and they've got great collateral, one of our lenders prefers that at the end of the project all at once it's going into a self directed IRA. And that's just simpler, fewer transactions in either way. But the return is good. And this was a tipping point for us. And for anybody watching this, I would recommend considering, if you want to do this business, learn all that you can, talk about what you do, show a passion for it, we truly enjoy this business. And I think it shows when we talk to people that were energetic about it, that we believe in it.
And that attracted the lenders or it ultimately attracted the lenders, we were talking to people at church about what we're doing. And it took us out of our comfort zone a little bit, you know, you when I grew up, we didn't talk about money at the dinner tables, it was bad form to do that. But we would talk about the dollars and cents of the business. But we would tell them what we're doing. And we're excited, Veronica was going to stay home. And I think that energy and that excitement was infectious. And before we knew it, so we have some money on the sidelines, we'd love to invest like this, that sounds great. And the magic of it is once they get paid back one time, they're waiting to come back and loan again.
So the only reason we even had to cultivate any other lenders is so that we could do multiple properties simultaneously. So once that first lender takes the leap, it takes a little bit of you have to fake it till you make it sometimes, you know, but if you can speak intelligently, you've educated yourself. And sometimes it might be a friend or family member that takes a chance, so to speak on you the first time.
But the great thing about it is it's a lot cheaper than hard money, still a good interest rate and a great return, they have collateral. And after the first few deals, I really believe they're investing in us more than they are investing in the properties, then we have been using conventional loans up until now. And we need to have a six month holding period after that six month hold so that we can get a cash out based on that new appraisal. And then we'll go the conventional route and get them paid off, get their money back. And every single time they come back, hey, we're ready to do another one, find another deal. And that was a shift in mindset from going, I'm asking you for something so I'm offering you an opportunity. And you really have to think of it that way. Because that's what it is.
That's what, I'm gonna write that down.
Yeah, properties for the very traditional route we put, we didn't know any better, you know, we're just we're brand new, and we saved 20% down and we went and bought the next property, we bought the property at a discount, but still with 20% down. That was. So we worked a lot of overtime. And you know, and I was working full time. So we were working a lot saving every penny. And we thought gosh is going to take forever. So that's when we, you know, just through reading and learning more. And we learned the first strategy. And that really was a game changer. So now we have multiple thank goodness, we have multiple private ambassadors and private lenders. And so it's we just rotate them out, you know now and it's it's... which is awkward now we actually negotiate on the interest rate, you know, and so we're lucky on that, too. So it's been a good, good thing.
That's super cool. And I think so are you doing like hundred percent private lending?
Pretty much we started out, we didn't have the confidence and we would say, oh, yes, I'm sorry for the short term purchase. It's all private lending. And as far as loan to value. At first, we were doing like 70% 60%. And we'd fund the repairs, just so they could see that. You know, they had a really strong position, a low loan to value and we had a lot of skin in the game. But as time went on, we now borrow 100% of the purchase and renovation. So that's again, those people are trusting walls. And as I tell them it for me not to repay my loan. It doesn't mean that this deal went bad. It means I'm going bankrupt. In other words, before I fail to make a payment to you, I'll be driving Uber and dig up. Gonna make the payment. It's not this one deal. It's gonna determine it and so borrow 100% of the purchase and renovation.
15:00 - 20:00
And then and then you refinance into a conventional.
So in theory, and it sounds like you're actually doing this, you're legitimately buying a house for not a penny out of pocket, fixing the house up, renting the house out, getting a loan on it, cash flow in the house, and you didn't put a penny into it.
We actually, yes, we buy a house, we just go and sign and because they're paying for the house or paint, the private lenders pay for the closing costs, and then we live there and they wire the title company or wire the remainder into our bank account, and we get to work right away on the property. And it's, it's wonderful. It's, yeah, it's almost like..
Yeah, I was a fan of the brrrr strategy. And I've been looking for my first brrrr. In fact, I'm kicking myself because I, I, I made an offer, like I looked at this proper, I had, I had a buddy of mine, you know, because I'm 6000 miles away. So I called a buddy, he looked at the property for me, he got a bid on it. And by the time the bid came back, there's only like, two or three days later, it was under contract. And I'm like, oh, dude, it was a good deal. I should have just gone for it before I got his bid.
I mean, and it was, you know, it's Missouri. So it's like $19,000, asking 10 or $20,000 to fix it might be worth 70-80. But I was waiting on the answers, it ended up coming back to me at like 18, 5 to purchase. It was like 15, or 20, to renovate. And then the cop came back at 82. And I'm like, you know, and it was already gone. But I'm like, man, I would have been like a 52% 55% loan to value. And I'd like...
not over leveraged even though you might not have money in it, you have equity in it, that you create, essentially, you create the equity by finding the great deal, doing the work to fix it up. And that's how you create equity. We were not big fans of being over leveraged and that what over leveraged means is different to different people. But at the end of a brrr deal, you still have with current lending guidelines 25% equity, because you're not going to get more than 75% loan to value.
So you've got some security there, you've got some margin. And you know, sometimes we don't get every penny out of it. If we leave five grand in a deal. Well, what's the ROI if you're making $400 a month, and you know, for forever, and you put 5000 in the deal, it's a lot better than that we started out by putting 35,000 into a deal. It took us blood, sweat, and tears to earn.
So creativity, digging around for deals and networking for deals, getting told no, getting offers and getting beat out lots of times, like what you're describing, and you get, you get a bunch of those who know that one of them connects. And it's an awesome feeling when it does.
That's so cool. I really admire, I mean, the birth strategy is awesome, but like the fact that you guys are legitimately able to do this right now with not even zero down. I mean, literally like nothing out of pocket the return on that is infinite. And here I am thinking about my seller finance deals, which are, you know, like 4% interest. I mean, they're good terms, but I'm still putting five or 10% down depending on the deal, which in reality, I mean, that's not bad. I put like 5% down on a 10 Plex. And I have you know, after some maintenance and some other stuff, I've got 30% equity in it.
So I mean, that was good. That's not that's not good compared to not putting anything in it and then still owning it. That's super cool.
Alright, so that's, that's brilliant. Um, all right. So what would happen if an 18 to 20 year old like a young young person walked up to you guys and just asked you like, you only have like a moment or two to tell them? What kind of advice would you give them whether financial or just getting started in real estate? Because clearly you guys have got some, some wisdom in this area.
I know you speak a lot to military members. And so I think of it as if it's a young firefighter that I know, that I met that just got in the fire service. It'd be a similar question. And that's why we do our blog and our website is to educate people and take some of the fear out of it.
A few things I would encourage them to do is to understand to start learning about personal finances. And if they have no knowledge, I probably started with Dave Ramsey, book, understanding, managing your expenses, budgeting, realizing delayed gratification pays off if you can avoid it if you don't need a brand new fancy car, you can drive something that’s functional, if you can live with roommates.
20:00 - 25:00
And one thing that I, I wish I had done is taken on roommates, I bought a house by myself as a single guy, I could rent the rooms out and live for free, have a young friend is 21 here in San Antonio, his name's Alex, and he is doing that he bought a house, he has a good job. But he knows he doesn't want to do this. It's an acute farm, it doesn't do this for forever.
He said, I'm gonna buy this house, it has a garage apartment, I'm gonna live in the apartment and rent the house out. And the guys, he went from being 1200 a month in rent, to living for free and having someone else pay the mortgage. That is genius. It's so simple. And people in our lines of work can do this, they can get VA loans, they can get FHA loans, they can own a house. But I would definitely say bring on roommates, you know, as you know, you can get a one to four unit with FHA and VA lending. So you could even if you don't want them living in your exact space, they might rent other units on the property.
And that's what Alex is doing. And I think he's setting himself up for success, he got low down payment for FHA, got this house, he's going to live for free in a few years and is going to do it again. That one small thing he started off, miles ahead of where I started off and getting the personal finances in check would be a few things I would start with.
Yeah, I agree the personal finances are huge. And I don't think that being an educator, I don't think that's taught enough or in our hard at all. And so I think it's really important for a young person to understand personal finance, we were at Dave Ramsey before we started investing in real estate. So we started with, you know, zero, you know, anything finance and zero debt, so, and then these mortgages.
So, but um, but what they went with that plan taught us was what exactly we needed, you know, our spending. And so I think that's really important, because I don't think young people necessarily understand what it is that they need, or how much things necessarily cost.
I think personal finances are really important.
And then I think also is exploring what it is that they want, and why they want it, you know, I think learning that why, like, I always tell, we always talk about how we want to encourage our children to travel and to really, really learn what it is that they need, what they want out of life, because I think it's different for everyone. But I think once they, the sooner they learn that about themselves, the sooner they will, will be successful. Because ultimately success is different for everyone. And I think I think that if they can, the sooner they can explore that and find that the sooner off they'll be. I mean, they're better off they'll be.
Yeah, I totally agree. I heard someone once say, trying to think there's a podcast, I don't remember where I heard it, but basically say like Dave Ramsey is great to get you from like negative to zero. And then to go from zero to, at some point a lot of people investors and stuff realize like, good debt is okay. And that's kind of where we all seem to split from good old Dave, because he does not believe, you know, he believes paying cash for a house, which is probably the smarter way in some regards. But then you look at liability, and growth potential. And I mean, buying a $100,000 house for $100,000 returns is not quite as appealing as if you only paid 5000 for and now you're getting pretty similar cash flow.
But I think that savings gap is absolutely having a basis with no debt, not the not the shiny Mustang with 25% interest or the Rolex or the fancy Jordans. And you know, people get so wrapped and this is the whole premise for my channel is people get so wrapped around needing to increase minimum wage needing to earn more money and needing to do this. But they fail to realize that it's not the income that's making them keep them ports, it's what they're doing with their expenses and until you cut your expenses, you know, and I'm guilty. I have a fancy taste because I did not have a lot of fancy stuff growing up, but I've gotten a lot better at it through the years. Yes, that's huge.
One thing I did when I started the Dave Ramsey plan on my own before I met my wife and I had gotten rid of my fancy truck and gotten a little beater car. But when I had no debt and the money started piling up in my account, I felt so free to do what I wanted and I would go where I wanted. And then when I met her I knew she wasn't in it for my fancy car. I didn't, I didn't have to question her motives, but it worked out well.
25:00 - 30:00
And it really represents freedom to me. And what we really value in our families is time together, you know, I'm gonna go on a third of the nights, a third of my days, I'm away from my family. And I'm home for two, which is great, but a lot of the time when kids are in school, so when they are home, and I'm home, I want to be president. And so that's a huge value to me.
The other is travel. We live in a pretty modest home down a bumpy dirt road in the middle of the woods, sort of I mean, we, and we love it. But it's nothing fancy. And we don't aspire to something fancy, we aspire to more time with our family. And more travel. Those are the things we really value this summer, we came to Hawaii, Big Island, we were there for two weeks. And Veronica has taken a few phone calls and managed a couple renovations with just a minimal amount of time on the phone, here and there. And we had that freedom because of real estate. And because we'd set our priorities, we don't have fancy cars, but we could afford to go to Hawaii for two weeks.
So I think everyone there's opportunity cost for everything we could, we could work on that trip and had a fancier car, but we opted the other way. So realizing that opportunity, every opportunity, there's opportunity cost understanding that and prioritizing if someone loves fancy cars, there's nothing wrong with that. They needed to pursue that we just had to figure out what our priorities were.
So I think you're exactly right in understanding what your whyy is and what your goals are.
So quick background story, so Will and I dated in high school, and he had this fancy Jeep with the big knobby tires, you know, and Mr. cool guy, and, and then we went, we went our separate ways our freshman year. You're still cool though.
That’s tense, what?
It's so refreshing, you're in college, or separate ways. And we were apart for 13 years living very different lives. And then 13 years later, we got back together as adults. And that's when he was all Dave Ramsey. And he warned me and he said, oh, for our first date, you know, who's picking me up at my house? And he said, Just want to warn you, I'm picking you up in my Dave Ramsey car, I got rid of that Jeep.
I have my money in my envelope to pay for dinner.
Minus right over there. The envelope systems are awesome.
Yeah, my point is that for that 17 year old kid, you know, I think that the reason we can have modest cars or live on a budget, we understand that that's not what we mean, that didn't make us any happier. It's really, and it might be to somebody that fancy car might be what makes them happy. But that's where I think they need to explore at a really young age, and really begin exploring that right, that cut that comes with experience, but the sooner they can find out what their goals are and why that's terrible, the sooner they'll be able to achieve whatever it is that they want to achieve.
So I am a huge fan of fancy cars. But I realized and I sold my fancy car like three months ago. And I realized that owning the car was great. But if I own the car, owning the car would not allow me to buy real estate, but buying real estate would eventually allow me to own another fancy car.
So it's like, you talk about opportunity costs. And that's exactly it. And I've heard some wealthy guys like Robert Kiyosaki, Dan Locke's, and these guys talk about how the rich buy their cars. And the idea that you accumulate this money and you say, okay, I want to go buy a car, that's going to be $1,000 a month payment, well, what if instead of doing that, I buy an apartment, that's going to make $1,000 a month in income, and then I pay the car off. And once the car is paid off, I still own the asset.
So that's the mentality I'm hoping to have. I don't own a fancy car yet. I don't know focus. But you know...
You will appreciate a fancy car when you get it as well, you know, you'll enjoy it won't be the biggest struggle probably to pay for and I don't know wrong with that.
All right. So I think we kind of touched on finances a lot. So what makes the Pritchett method of investing in real estate unique or successful? Not, you know, we can go back over it because it's so cool. But something other than the fact that you just buy houses for no money out of pocket, which is everybody’s doing.
I think the things that set us apart are a few, one is that we work well together, we bring totally different strengths to the table. My wife's about five feet tall, and she will stare down a contractor that is 350 pounds and doesn't want to finish the job and she'll hold them to the letter of the contract that she has written out.
She's really good at that. She's really great at managing projects, they have a lot of things going on that those aren't my strengths. And so I think that we complement each other's strengths that we bring to the table and work well together. And I think The tenant relationship is a big one for us.
30:00 - 35:00
So when we fix our houses up in our neighborhood in our city, we're below the median house price that the house after repaired value, or ARV is still beneath the median home price in town.
So in our city that's generally below about $160,000. That puts us in a price range that we're comfortable with it, we have found that we find really great people in this price range to be tenants, these are people with great jobs, they might be a mechanic, they might work in a cafeteria, they may, they may have a number of jobs that are more blue collar working class, but they're great, great people.
And so we fixed our houses up so they're nice and clean, they're renovated, they're fresh, and they compete well with other houses in the neighborhood. So we can list them and get them rented. And then we can be very selective because we end up having multiple people show up to our showings. We used to show our house at the person's convenience if they could see it on Tuesday night, we went Tuesday night, and we waste a lot of time for notions. Then we started doing weekly showings we advertised for about a week and it would set up a showing everyone come up with time. The houses are always nice, always nicer, I would say that the majority of the competition, and then people have a sense of urgency a competition for this house they want to live here.
Therefore, we would get an application or two or three and then we get to pick the very best tenant. When we picked the tenant, when they moved in, we asked for an hour of their time so that we could go over the contract, explain the rules. And also we bring them a potted flowering plant hanging on their porch, and a $50 gift card to someplace like Target or Lowe's Home Depot.
A place that they can invest in getting themselves settled. And the idea we start using the word home not just house, this is your home. And they went through a lot of screening to get the house to be selected. We want to start off on a really good footing. So we give them a gift and we go over this contract in detail. So we're all on the same page. Now that doesn't mean that we coddle them or are soft on deadlines. We're very firm on deadlines, but we start off on a really good footing. And we're really responsive to repairs, we figure when they call us for repairs. As long as they're legitimate repairs. They're trying to take care of the house that we bought and is their home.
So we're responsive. We think of our tenants as our ally in this business business, not our, you know, adversary. We were on the same team, they if they stay there for 20 years, it's great for them. It's great for us.
So we want long term tenants, we were people that see this as their home. One thing with one of our first houses kind of appreciated it past that price point. And everyone that rented it was they were in the process of either buying their own home or building a home, this was a transition. And people will stay for a year and treat the house fine. But we'd have a vacancy, we'd have to refill it. At this lower price point we have found people tend to stay longer, they get rooted in the neighborhood, and they can have their dogs and have their pets have a yard.
You know the most rewarding thing about seeing a little girl say we have that yard that yard is ours. It really makes you feel good about this business when the child's never lived in the house and their life. And now they have a house. Then you see the Christmas ornaments at Christmas time in the front yard, the blow up inflatable stuff they couldn't have in an apartment. And you realize that you are providing a home that you see fit. So we take a lot of pride in the way we deal and relate to our tenants. We send Christmas cards.
And I think most of them really like living where they live. And some of our tenants have even come back to us later after moving on saying do you have something else to rent? With the hundreds of thousands of houses in this city? The fact that they came back to us, to me, is a compliment that they liked renting from us. That's not a bad house that's about the relationship they had with us.
So I think doing that is one of the things that sets us apart. And this sharp enthusiasm for the business I think a lot of the good in our businesses come from enthusiasm we show I can talk about this for hours on end, you and I've already had several hours of conversation, you know, in our mastermind about these topics, we we share this, this passion for this and and I see good it can bring to young military members, young firefighters, young teachers, young people that otherwise are going to be in a certain income bracket due to the nature of the jobs, they choose to help their fellow man they're doing noble jobs, but none of us are going to get rich doing these noble jobs. We're only going to gain greater wealth by learning more about personal finance about investment. And so I want to inspire other people. That's what I want to do.
So I think that's one of the things that sets us apart as well. So I that was long winded, but those are a few things I can set us apart and make our business unique.
35:00 - 40:00
No, that's, that's really cool. I've seen trying to think what Facebook group it was. And he was a military landlord, someone talking about how they bought all their tenants like a $20 gift card, $25 gift card for Christmas, or, or they bought, there's someone else who bought. And it was like, I don't know, like some kitchen appliance, they got it for super cheap on Black Friday, but it was a quality appliance. And they go, here you go. And everyone's like, oh, man, you know, why would you do that you're putting in your cash flow. And I'm like, no, that's, that's smart. Because now you're creating a tenant who wants to be there and then, the opportunity for them to trash the place is a lot less when they treat it as their own place. I like the potted plant idea. That's pretty cool. I would never have thought about that.
I really appreciate it because on Christmas cards, we also do a gift card and we half of our tenants think it texted or written us back letters thanking us. And so you know, what's $25 and $25 is a game changer in your business, you know, in a year's time, maybe rethink your business model. But what that buys loyalty, it buys that sense of appreciating that we appreciate them. And the longer they stay in that house, the better for business.
Mm mmhmm. Yeah, I think I just have to add on to what when he pretty much covered everything. But, um, I just want to emphasize the relationship part, you know, real images, I think what sets us apart too, and our property management piece is that we put a lot of work up front. And I think maybe a lot of people that struggle with their tenants, maybe didn't do all of the work up front. And that's from selecting the right property. When I when we walk through properties, you know, it's just, it's picking the right property and it's repair, doing the right repairs, you know, it has to be trendy enough, but you don't want to over improve, you know, so you want it to still be it's still a business, and then selecting doing all the background checks. But another thing that we do too, is we go whenever we acquire any property, we go and knock on all the doors around that house, because the people that are going to care the most about your property or your neighbors there, they're going to care about what's going on who who's, you know, coming and leaving, how they're taking care of the property.
So it's another set of eyes on that property. So we go and introduce ourselves, and we have what we do, and we tell them that we take full responsibility for who is going to live there. Because ultimately, you know that that relationship is really important to the tenant might move, but that neighbor might still be living there. And so now we have extra sets of eyes in those neighborhoods.
So now those people are calling us and letting us know, if there's, you know, so and so is moving or this so and so needs to sell their house because they know we take care of the property. All of our tenants, we tell them we, whenever they call for any kind of repair, we try to repair it within 24 hours. You know, so we go above and beyond. But we are sticklers about deadlines, about rent, about you know what they have, it's not a charity, we're going to go above and beyond. But we also expect them to, you know, hold up their end. And so, so far it's worked out, you know, it's worked out that it's it's it's balancing having that relationship, but it's still business, it's you know, it that they're not going to abuse the fact that we're we're, you know, going above and beyond and establishing this relationship.
That's really cool.
Yeah, I like it. I like all of that. The fact that I mean, the idea of knocking on the neighbor's doors makes so much sense because as you mentioned it whenever, like even on base when someone moves in and out. I'm the nosy neighbor that's like, I wonder who that's gonna be, you know, and they're all military guys. They're all generally I mean, there's a knock on wood, there's always the one but for the most part, they're all great neighbors and great tenants.
But in my neighborhood back home, yeah, if someone was moving back into the neighborhood, the house next door, I'd be like, Who's that? What's this you know, who's super nosy and so but you know, the nosy neighbor never really comes over to say anything so to be one to go up and say hi and introduce yourself. I think that's a great play.
That'll probably enter what I would consider our best deal to date was handing out cards around the house we work on and just turn into a home run do people cross..
Oh, that was with the lady who sold it. Yeah, we got we got we got a moment or two. That's a really cool story. You got it. You got to tell us.
Abbreviated version, so...
Forgot that was you.
The last post was I think I called him at midnight infomercial house. That's the one that if I was selling you a course I'd say and this is how great it can be because it was really a home run deal, but Veronica went to meet the neighbors hanging out her card and, and just talk to him.
40:00 - 45:00
And hey, we were like she said, we take pride in the neighborhood, we take pride in who we're bringing into your neighborhood. We want to know if there's issues, please let us know. And if you hear if anyone wants to sell, you know, because they can see a house across the street that we're renovating, we're making their neighborhood more attractive, you know, we're making it nice.
And so this couple called us and said, we'd like to sell our house. Would you like to see and I went saw and I kind of had my stomach sunk. I said, This house is too pretty, you know, this isn't a house that needs renovation, there's no way I can buy this at a discount. And I told him that I said, listen, I would go to a realtor and sell this, you can sell for top dollar, I can't pay top dollar, it's a business.
Went home, ran the numbers, and I made him an offer. I said, here's my cash offer. But I again, I for top dollar, you need to go to a realtor, you can sell this for more. I knew what the house cost street rent for. So I had pretty good reliable numbers. I knew what it was. And we didn't hear from him for a few months. And then one day the man called me back. And luckily I had notes and I said, well, he said, would you select to buy my house? I said absolutely. I love your house here. But this is still my offer. Does that sound good? So where are y'all gonna live? Where are you moving to? And he said, Well, that's the thing we'd like to rent it back from you. And basically what they wanted, they didn't have any heirs to leave their house to, they didn't want any expected repairs, if AC went out of the oven, the stove, they wanted to have a set monthly rent, and they wanted to get their equity to live on and enjoy.
So they rented it back from us. And we wrote into the lease, you know, we will only go up a minimum amount if necessary to keep up with taxes. And that's all. So it can hopefully stay there the rest of their lives.
We, I think we fixed the one doorknob there in the time we've owned it, it's literally been zero renovation, they cast us out, we paid off our lender, we put a little bit of money in our pocket in the deal. And it was just seamless. There were zero days of vacancy because they went from owners to tenants one day, the next day, and we have zero dollars in that house that brings in a few hundred dollars a month in cash flow, we got over 25 freight 30 plus percent equity. And that was just by being creative. And when I asked them, why did you sell to us, they said because we trusted you. Because you gave us options, you weren't trying to, we're trying to swindle them out of this business has to be something you can hold your head up high and, and know that you're doing something good and you're providing a service. I'm not, we're not in the business of taking advantage of people. But if someone wants if we can solve their problem, and give them other options, and we're the best option, by all means we'll do that.
And it's been a great relationship. They've written referrals for our website and our pod or Facebook page, because they still feel happy with their decision and with going with us. So we even had our kids with something when we signed the contract, you know, run around the house. And it's a super sweet couple. So that was really a great deal. It just came from handing out cards and getting to know the neighbors.
Yeah. And you don't have to worry about the crazy tenant, because they love the house. That's super cool.
All right, so moving along one of my next questions and dropping my pen that's gonna make all kinds of noise on the mic. Wow. So unprofessional fidgeting.
What is one resource, book, course, website that you would recommend for anybody looking to get started in real estate?
Man, it's hard not to go back to bigger pockets. As you had to say one thing
I know. I try not to plug them but I do every time.
Yeah, it's hard not to because we started on trips to Georgia to see family and we started their podcast out they were, you know, new and the podcast is brand new. I think we listened to some of the first episodes they put out, and listened to it on the road. I think I've heard almost every single episode over the years. You can listen to it on the road, you can learn ways other people do this. And you know the forums, you can ask questions, and you'll get varying opinions, but you can just take those with a grain of salt and come up with your own perspectives. And so I've gotten the bulk of my education through that website, you know, either the forums or the podcasts, even the books. So if I had to point to just one, that would probably be the one we've got a bunch of books back here on real estate and there's a ton of good ones but if you were to go to one place, that would probably be it. And I think we can with technology now we can get so much education on our commutes or drive time between podcasts audiobooks, there's just so much great information available. We hope to contribute to that, you know, just like you're doing is helping educate people. I don't know that I could pick just one resource that says powerful those that sign.
45:00 - 50:00
Yeah, I actually think the same thing. In fact, I'll have a link down in the show notes for if you want to go check out the bigger pocket’s website.
Man. Yeah, that place. I mean, it changed my life. That was when I first got started, I read Rich Dad, Poor Dad, which everybody distributes all the success to you. And then I was like, oh, man, I have all these questions. And I'm like sitting at my computer googling, and everything I googled came up in the BiggerPockets forum, BiggerPockets podcast, BiggerPockets book, BiggerPockets forum. And finally, I was like, okay, well, I'm just going to go to a bigger pockets website and ask the question there because it'll save me the trip to Google.
And man, like the podcast and everything, they're just vicious, you're not going to find a better, I mean, you might find a better resource. I don't know. I'm not gonna say you won't. But yet, they're awesome. And yeah, totally worth checking out.
So. Alright, so before we wrap up, is there anything you guys want to add any parting advice or big ideas or aside from buying houses for free?
Yeah. I’m not jealous at all, not yet.
I think that everything that we're talking about, it's what's worked for us. It doesn't mean it's the only way or what the right way is. There are people that will do great with senior housing and Airbnb, there's a ton of ways to find opportunity in this business. This is just one way. This is our way. And our way right now, or we may be different in the future. But if anyone has an inclination, our biggest objective is to help people, whether it's our tenants, or people watching this podcast, I had a realtor friend, when I bought my first house, I asked questions about real estate. And I thought realtor meant real estate expert. Realtors are really good at buying and selling houses for other people. But they don't necessarily all understand real estate investing, some do, but not all do. And he really strongly discouraged me, I listened to that negative advice.
I wish I had gone out and found someone who is successful in real estate investing their perspective. And that's the perspective I hope that we can give to a newbie, someone starting out or getting interested is, listen, it is work. It's not getting rich, quick, it's not, but nothing we've ever done in life that was worth anything was easy. But it's very rewarding when you make it work. And so I just want to encourage people that have an interest, and it's not for everyone, but if you have an interest, if we can do it, you can do it. We're all in the same boat, we all are in these career fields that are about helping people, helping each other helping American citizens, helping students, you know, that's what we do, and, and we, but we don't get paid a lot for these jobs.
So learning about finances and learning about real estate, I think real estate is a really good way to magnify your finances and your ability to earn money. And I just want people to realize that it is doable, even on some of our meager salaries that we get. If you really pay attention, you stay focused, you don't get distracted, you can do this business. Absolutely.
So I guess that would be my final wrap up personally.
Yeah, um, one. Lots of good advice. But the one that sticks out to me is a, Will’s grandmother said it's just tuition.
So when I go through, when I go to a lot of these meetups, I talk to a lot of people that are just scared, well, what if I end up losing all this money, or I don't know. And they make it, they make real estate a lot more complicated than it has to be. And so what I love what Nana said is that instead of seeing us in the steak, or as losing money, see it as tuition, you don't think twice about paying for a course, or college tuition, or you know, and so that gave me the confidence that go ahead and just do and that's how I learned.
So each deal that we've made that we've done, we've learned so much, I mean, compared to when we start with our first house, all the mistakes we've made, you know, and maybe some money that we may have lost when we we've been very fortunate, but I just see it as as tuition, that's how we see it now, you know, people don't I mean, we hear people of paying thousands and thousands of dollars to these fancy mentors, these fancy groups, and that's fine. That's what they need for their confidence. You know, I'm not trying to criticize that. What I'm saying is, is that instead of seeing it as a mistake, or instead of seeing as a big loss data solution, learn from it and keep going.
So don't, for people out there that are considering this, you know, to just to not let that hold them back. On the flip side, it's still somebody I heard also heard this, it's still real estate. So I think some people get into this because they think, oh, this is a great way to make a lot of money or to become rich, rich one day, but at the end of the day, real estate is still a people business. So it's, it's you have to be okay with that. I don't know as far I would say like it because I really enjoy the real estate part of it. I really enjoy the property management part of it and do dealing with people.
50:00 - 54:19
But it's very, this is people's homes and then once I got my real estate license in Detroit transition, traditional transactions, and it's a very emotional transaction.
So that's where I think my high school assistant principal, and how to deal with cheer moms and you know, very high emotion, I mean, you don't get more emotional than dealing working with people's kids. So I learned that real estate is just the same. I mean, it's a very emotional transaction for a lot of people, this is where they're going to live.
So I think people need to know that as well. Because I think maybe people might have a very negative experience with that. Once they get into it, not not realizing that part of it. It's not just a business, it's you're having to deal with people. And then, you know, some people get around that by hiring a property manager manager, and that's fine. You know, there's experts, and you know, we have our CPA now, our bookkeeping was just overwhelming.
So now it's it, there's experts and all and every different aspect of real estate, and it's finding out what it is that you want to focus on, you can hire people to deal with other parts of it. But, you know, it's just, it's just not being afraid and trying this is something that they really want to try is to just, just go for it. You know, that's what we did. And it worked out for us.
Yeah, learning,working, taking action. That's what I tell everyone.
All right, so we're gonna hold you, this is the part where I chose to tell you to plug your website.
But where do people get a hold of you guys?
HomeagainSA.com. Home Again, SA for San antonio.com. And we have to look and see what the home again properties on Facebook, it's, I believe it's at home again, prop at home again, PR, O P.
And we try to on both of those, the websites a little newer to us on the Facebook page, we try to show projects we're working on, we're getting into sharing more of the numbers, we have a foundation job was just horrendous on their video we took and that a lot of people's interest, because it's going to be a good deal. But we took on a house that needs a complete, you know, six inch lift of a concrete foundation, and it looked like the house was just full of my you know, went from this nice looking house. And so we'd like to show the transformations and talk about the projects we're working on. And the blog, we just started. That's it. That said the old side there and on this blog tab and, you know, just trying to educate, you know, and share what we've learned, maybe shorten the learning curve, I think of all these podcasts and things that listen to the hours, hundreds of hours, and the books that we've read stacks of books.
And if I can shorten the learning curve, if somebody says, hey, we want to do what you're doing, and I could refer them, hey, look, look at this website, maybe this will help you. That's what we are, that's our objective with the blog and everything. help other people, we really believe you help other people get things happen. And good things have been happening, you know, and so help somebody if you know a little bit more about something, even if it's not real estate, help somebody good things are gonna happen.
And, you know, I think that's what we're here on earth to do. And that's what we do in our business. So that's where you can reach us. We love answering questions, you know, instant messenger and all those different resources. Subscribe to the blog if you'd like.
We're here to help.
Awesome, awesome, awesome. Awesome. I'll make sure to link to your website in the show notes.
Guys, I think that's probably about all the time we have because I feel like apparently zoom doesn't tell me what time it is. But I feel like we talked for a while.
It's been awesome having you guys on here. Veronica is great to meet and you will always be a pleasure. So thank you guys for coming and hanging out. I'm definitely looking forward to posting this one. And I'm also going to totally edit out both parts where we confirm that you do houses for no money out of pocket, and that's gonna probably end up on my Instagram because I think that's awesome.
So guys, thank you very, very much. And I'm gonna let you guys go enjoy the rest of your evening.
All right. Take care Dave.
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Will and Veronica Pritchett are truly a power couple! He is a Firefighter, and Veronica quit her job as the assistant principal of a high-school to work full-time on their real estate business! They started with a simple rental, and are now avid users of the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat). They have gotten so good at this that they have private lenders lined up to invest with them. This allows them to purchase the property with ZERO money out of their own pocket!
Their advice to an 18/20-year-old is:
start with saving. Dave Ramsey has some good information on this, but understand that delayed gratification pays off. Take on roommates if applicable, and cut your expenses as much as possible!
They also provide some great insight to introducing yourself to the neighbors, when acquiring a new property. Also, they have some great processes for getting their tenants to treat the property as their home, not as just a rental!
the resource they recommend is:
BiggerPockets link below to check out the community. https://www.frommilitarytomillionaire.com/we-recommend-BP-Pro/
Their big idea/parting advice is:
find a real estate investor, not just a realtor. Real estate investing is work…but anything worth doing is. Also, think of any money you lose in the process as “tuition” we don't have issues paying tuition for school…but when we lose a little money in real estate we freak out. Think “its just tuition!”
You can reach out to them at https://www.homeagainSA.com/ or check out their group on Facebook: Home Again Properties
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
Building Wealth: https://amzn.to/2ttiwpf
Real Estate Investing: https://amzn.to/2IhQ1QI