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It’s often said that real estate investing is a great way to get rich slowly—we completely agree! And when you consistently work hard to grow a portfolio over the course of many years, those efforts compound and ultimately result in a large, fantastic real estate portfolio. In this episode, Jeff interviews Matt Hawkins, also known online as The Lumberjack Landlord, who is the perfect example of this. In this interview, Jeff and Matt discuss a wide variety of topics, from the value of local investing, smaller communities, managing more than 100 units, how to work successfully with banks, how to get started building a large portfolio and much more.
Episode Transcript
spending your time learning your market really understanding exactly what you’re going to try and by getting your money, right, that’s never wasted time. Some people get frustrated say I’ve been looking for six months and still haven’t really found anything but the numbers are improving. You only need one motivated seller, you only need to find one deal too often people are like, Oh, well, I want to tell you to choose from Yeah, don’t we all. But I’ll create that one deal based on relationship based on my understanding of the market and we’ll put something together.
Jeff Stephens
Welcome to racking up rentals, a show about how regular people, those of us without huge war chests of capital or insider connections can build lasting wealth acquiring a portfolio of buy and hold real estate. But we don’t just go mainstream looking at what’s on the market and asking banks for loans. Nor are we posting WE BUY HOUSES signs we’re just looking for quote, motivated sellers to make lowball offers to. You see, we are people oriented deal makers. We sit down directly with sellers to work out Win Win deals without agents or any other obstacles, and buy properties nobody else even knows are for sale. I’m Jeff from the thoughtful real estate entrepreneur. If you’re the kind of real estate investor who wants long term wealth, not get rich quick gimmicks or pictures of yourself holding fat checks on social media. This show is for you. Join me and quietly become the wealthiest person on your block. Now let’s go rack up a rental portfolio. Thanks for joining me for another episode of racking up rentals. Show Notes for this episode can be found at thoughtful our e.com/e 155 Please take a second to do us a HUGE favor and hit that follow button or that subscribe button in your podcast app. It really helps other fellow thoughtful real estate entrepreneurs to find this show onward with today’s episode. And in this episode, I’m so pleased to bring to you an interview I just recently conducted with a newish friend of mine, Matt Hawkins and Matt is known as Matt Hawkins but also as and perhaps better as the lumberjack landlord. And what I love about Matt, well, gosh, there’s a bunch of things. But Matt is absolutely a giver. He is really active in the world of social media of real estate investors, and always trying to help and add perspective. He creates lots of videos and educational content, and things like that. But I also love that Matt is just a very relatable guy, he’s he’s a real guy, he is a very successful real estate investor. But while being a family man while having a job while being very hands on with his acquisitions, and very hands on with his management very hands on with his tenants and the properties themselves. And so I think you’re going to really get a lot of insight out of this interview. But I think one of the best things about a podcast guests is when they’re just feel relatable. And I think that you’re going to find that about Matt, because that is certainly how I have felt as I’ve gotten to know him. So without further ado, I’m going to stop the rambling now. And I’m gonna give you this interview between me and Matt Hawkins. All right, Matt, thanks you so much for spending some time with me today. Sure, happy to be here. Yeah. And for everybody listening. Matt has dedicated time on his birthday, no less. So that dedication is the right word to describe that. So thank you for doing that.
I’m happy to do it. I knew that I knew that I had scheduled time today available.
Jeff Stephens
Awesome. So I guess the first question I wanted to ask you is, you know, you call yourself the lumberjack landlord. And I probably actually, you know, the more interesting of the two words is lumberjack. But what I thought was interesting was, you know, a lot of people in our industry say, Oh, I’m a real estate investor. And I’ve people on the show have heard me made a big, make a big deal between, you know, being an investor or an entrepreneur. But anyway, I noticed you chose that word landlord very intentionally when you could have chosen other words to describe you and what you do and what you advocate for. So tell us a little bit about like, why do you primarily see yourself through the lens of like being a landlord? Yeah, so I
think that, you know, for us, it was we grew the company from basically nothing. I grew it from nothing. And then my wife, when he got married, she became a part of it. So she came on board, I think after we had after, I think I had eight or nine units. And so for me, it was just, you know, landlord has such a negative connotation to it, that I wanted to be the one to put a positive spin on it. I think that there are plenty of bad landlords just like there are plenty of bad tenants. But I think raising the profile of when you’re a landlord, you’re really truly managing. You’re not an owner, you’re not an owner, you’re not an investor, you’re a landlord, you’re managing the business, kind of on a daily basis. And that really better best articulates what I do in my business, it’s the day to day management is you know, servicing our tenants making sure that they have what they need and making sure that if they’re, they’ve done something that they shouldn’t do that they hear from me. So I think that truly being a Lord of the land You know, where the word really came from? I think really best describes how I manage my business and create relationship and work with my tenants. You know, they all know me by first name, and none of them there’ll be my lumberjack landlord.
Jeff Stephens
Yeah. I think that’s awesome. I mean, it speaks a lot to, you know, kind of a hands on like level of involvement and don’t necessarily mean that hands on in terms of fixing doorknobs and things like that, but hands on in terms of how you see yourself. There’s such a, you know, growing, it seems to me school of thought these days about like, oh, in real estate investing is something you can do from 2000 miles away, you never have to see anything, you never have to talk to anybody. You know, and I’m not here to say anybody’s approach is wrong, but I’ll just say that is absolutely not my approach. And it sounds like, you know, you told me the other day, too, that your all of your units are within what, 20 minutes of home? Is that right?
Yeah, all of them are within 20 minutes of our front door, you know, we believe in building relationship, you know, a lot of people will pick up market, it’s a million, you know, there’s a million population, or a big suburb, that’s, you know, three or 400,000 people. And for us, you know, we do business in three towns, the total population is about 50,000 people. So over doing this in the market for 20 years, there’s nowhere we don’t go where we don’t get a hello. And that’s great. You know, we like being a part of the community. And quite frankly, that’s a pretty easy way for me to sell against the big houses, they charge more rent, they give worse service, and you know, they’re gonna treat you like the number on the top of your application, I’m gonna treat you like a person, and we’re going to work through stuff together, if something happens, you know, the only part that I really, you know, demand is communication, communication, bad things happen in life, the only thing that we can do is, share that with the other interested parties and work through it.
Jeff Stephens
Yeah. Yeah. That’s great. Beautifully said, I’ve had this philosophy that says, you know, I can’t always deliver the news people want to hear, but I can always deliver it with respect and compassion. And sure. And that’s been kind of a guiding principle, it’s helped. Yeah, it’s helped a lot. So we’re just back on this, this topic of local investing real quick, before we move on from that, you know, there’s, similarly there’s these people with a school of thought that says like, oh, you know, all the matters is where the numbers make sense. Doesn’t matter. If you’ve ever been there anything like that. I really believe there’s a lot of like, I bet you can close your eyes and picture just about every square foot of those three towns. Right. And I would I think that that brings tremendous value, like you have absolutely got your finger on the pulse of everything going on there. I find a lot of investors don’t really value that a lot, though. Do you? Is it safe to say you feel like that’s an important part of like your success? Overall?
Yeah. Oh, for sure. Yeah, there’s, there’s stuff that comes up that has the numbers that work, but it’s an it’s in the seven streets that you don’t want to own, you know, it’s like Harlem with the words, you don’t want to say, these are the seven streets you don’t want to own on. Yeah. And there’s that and kind of every city, you know. And so, from that perspective, it really matters. And I think that I don’t think that it’s possible to do that from a distance, unless you’re from that place. And then almost always, you’re going to have a skewed perspective, especially if parts of a city go from, you know, from a C to an A, because there were a new school, there was a new this new that and new shopping center, and all this massive activity, all this massive economic activity. And so for me, my rule is I don’t buy anything within a half hour on my front door. Because if for some reason one of my guys isn’t available to go and take care of something, you’re gonna see this smiling face to show up to fix the problem. And so I don’t want to be doing that and having to drive an hour or two hours or jump on a plane or something silly, crazy like that. But yeah, it’s really about, you know, being amongst your tenants and being in the houses and seeing them and, you know, having local relationships, I mean, it’s really a relationship business. And so, you know, we have, we have guys that have been with us for 20 or 20 years, they’ve been doing work for us, and they’re not going anywhere anytime soon, just like we are and so it really becomes relational. Working with tenants, you know, we have a lot of tenants that stay years and years and years. And that’s even in a college. You know, we’re next to a college town where turnover should be high. So yeah, I think it’s really relational. And I think you know, for us, too, I think college kids get a bad rap. I think a lot of them just instantly get put into the Oh my word, you know, fraternity this is going to be nuts. And that’s like 4% or 3% 97% still out there. So we have a lot of really great students that we love working with will they’ll just be like oh hey, you know I need you to come change the slight sorry later on you Do you need to change that light bulb yourself. But if you show it to me, I’ll walk you through it. So you always can fish in the future. And so recognizing that that’s likely their first experience, one of the other unique things that we do is we don’t have parents cosign. I don’t take calls from parents not interested. They weren’t there, they don’t know what happened. And I’m not listening to how important Johnny needs X, Y, or Z. So I’ll talk to Johnny Johnny, I work it out. And this might be his first experience with adult with an adult. And so we’ll talk through it and work through it together. So we actually have a pretty large percentage of our portfolio. That is, college students, because we actually liked them a lot. We respect them there, they need to focus they need to get through school, and they need to do it in a nice place where it’s not gonna be a constant issue. And you know, we have nice places, there are plenty of kids that come from nice homes that go to college that surprise, surprise, one of those place with granite countertops to live.
Jeff Stephens
Yeah, absolutely. So for people who might not know you yet, I’d like to hear a little bit about kind of the some of the main milestones in your journey. But why don’t we just start with like, telling us, where are you now kind of in your overall journey, and then we’ll we’ll kind of go back a little bit and find out how you got your start.
Sure, so um, right now 39 buildings, 217 units, we’ve got about 400 tenants total. So we’re pretty decent size. I do that and I work a W two. So I do both. My wife, aside from being a super duper mom of three, also does some of the coordination of things. We don’t have any employees, we use list of subs that we’re very comfortable with and spend a lot of time with. And I started investing in Oh, one, which was really painful. Because we had the.com boom.com, bust. And then I continued to invest, I got bigger, stronger, more money. And so kind of four, five and six, I also invested. And then in eight, we didn’t lose anything. We kept all of our properties. But in September, or excuse me, in August of oh eight, we had eight paying tenants. In September of oh eight, we had three paying tenants in October of a way that we got one paying 10. And so I was showing up for work every single day just to pay my mortgages. And we didn’t have enough money to evict the people that were there that weren’t paying. So that was a really painful process. The lesson learned there is, you know, don’t get undercapitalized. And they literally started shutting off credit lines and shutting off he locks and shutting off all the things that are your safety net, all those things got shut off. So it was just we just had to figure out how we’re going to wade through so little bit of PTSD from managing through those years. But we did it. And we made it through those years. And then really in Oh, nine, we started to grow again, we started to buy more, because at that point you could get foreclosures for you know that that house is now a third of the cost that it is now it was a third then. So pretty much everything that I bought in that great recession in kind of, you know, 910 11 All that stuff is, in most cases tripled in value.
Jeff Stephens
Yeah, yeah. So when you if you were to kind of chart like drawn on a graph, from 2001 to 2022. Here, like what is the what is the graph look like in terms of your portfolio growth? Is it a pretty even kind of thing? Was it a little bit more up and down? Or they’ve been phases when you’ve been more aggressive? or more, I guess, effective? Or how’s it gone?
Yes. So 2020 was the second greatest buying market of all time, I bought a lot of deals. 2021 was still top 10 In the last six years, but a lot of deals. Now we’re basically going through the process of assimilating those upgrading them where we like to was what we like to do. And we’d like to really buy, you know, a B class or C Class stuff and a class areas where we can bump it up to a b class product. So we’re really creating value for ourselves and for the future. And so yeah, I mean, for the first we did, so I was doing house hacking before it was a thing. So we moved nine times in 13 years, where we literally would just buy a place, redo it. After the year passed, we would get it refiled. And we wouldn’t move into the next one. And so rinse and repeat. We did that nine times and 13 years, and then that kind of stopped around 2014 or 15. And then it was just an acquiring product, acquiring buildings. And so it was pretty steady. It was you know, one or two a year sometimes three, one or two a year 10 sometimes three, and then last year was 10. And then this year is already five I think
Jeff Stephens
As units are building seeming, buildings different Okay, so different separate acquisitions in most cases like yeah, all
cases. Yeah, no. No portfolios. No for no no portfolios, very little seller based financing. But yeah, pretty much everything was one off deal. And it could have been through any number of things a wholesaler MLS, off market deals. Really it covers the gamut all across. So yeah, we buy, we’ll buy any almost anything from pretty much anyone.
Jeff Stephens
Yeah. So knowing some of the people who you were friends with and want to circle back to your your amigos. In a moment, I’m willing to bet you have a probably a pretty clear set of criteria for what you are looking for. Can you tell us a little bit about what are some of the main what are some of those main elements? How do you you know, your your lens? How do you filter opportunity to know whether it’s in your wheelhouse?
Sure. So the way that we do it, and I think you actually let me publish the video that we did on your site, which was awesome, which was the electronic, electronic business card, that is something that I carry with me everywhere, I’m constantly tapping people’s phones with it, because that has my Buy Box in it that has exactly the products that I the houses I buy, which is anything to to 20 unit in any condition, we can do cash, we can we can finance, we can do seller finance, we can do whatever you want, really, it just comes a matter of what terms would you like. And so I kind of take people through that in that video talking about that. But that’s what’s really enabled us to do it because I couldn’t get my story in front of enough people. And that gives that lets me share my story, which is I need to to 20s. And so for us, I believe the best opportunity in the market over the next two years or three years is going to be small to small multifamily to threes and fours. And I think it’s also going to be subject to and seller based financing, those are going to be the three strongest, strongest asset with the strongest vehicles for how you’re going to get your deal done. I think that’s going to be the hottest part of this market over the coming two years. I think that that’s where people are really going to excel. Because the price premium for a single family home where I am, there isn’t a single family here that’s cash flowed in probably six years for sale. Yeah. I’m not trying to tell the market that they’re wrong. And I’m certainly not going to try and prove the market wrong. So I saw I found my pocket. And so I really do twos, threes and fours, certainly look at other larger buildings, but twos threes, and fours is really where I focus, and anything that comes on the market. And those three towns I’ve either seen in the last five years, or I’ll go see again. And those are the types of transactions that I’m mostly spending my time on.
Jeff Stephens
And I know your cash flow oriented person. But you also mentioned wanting to you know, add value to properties as well. And so when you’re looking at a deal when you’re kind of underwriting it, argue insistent upon some metric of like day one cash flow, or are you saying, You know what, I’m obviously going to look at day one cash flow, but I’m more concerned with like day 180 cash flow after I can implement some changes. How do you think about that?
Yeah, I think so it’s really deal dependent, you know, for me is there’s a lot of folks that might sell something, and everybody’s on a month to month, Verizon a month, a month, 30 day notice for me to increase their rent, or for them to move out where the two. And so a lot of times where I’m trying to add value is in my market, I know what section eight housing offers. I know all those numbers. And because I know all those numbers, I know what market is as well. If it is a brand new spanking clean unit, guess what I’m not interested because there’s no value to be had there, I’m paying top retail just like somebody else who wants to do an older rock, they’re going to pay full time retail. So I’m looking for that, you know, C Class asset in a A or B class area, that I can create value, ie somebody’s been there for 10 years, they’re on Section Eight, but they haven’t gotten an increase letter in 10 years. Well, Section Eight needs to get an increase letter because that’s why they raise the rates to keep up with the cost of things. I’ve seen a number of landlords have to sell because they can’t keep up with the cost of things. And it’s because they don’t stay current with the with the market. They have no idea what something actually rents for and they’re completely out of their depth. So that’s really where it kind of gives me the advantage from a you know, like we talked about a little bit earlier is agents that you know, Joe’s never sold anything or sold three things in the last two years and you’re gonna give him your house to sell. That’s a horrible idea, because he doesn’t really know where to price that. We just bought something for around 100,000 units a four unit we pay about 100,000 a unit and I’m in an area where the real numbers more like 120 to 125 And based on the size and the condition that they’re in now and the rents, it’s, you know, it’s going to be like a 40% return on capital. So in the very beginning, with any of those deals, I don’t want to buy a deal that loses money necessarily, but if I understand that, there’s gonna be a six month transition, and these people are, you know, I, I understand to understand that there’s going to be make ready costs, maybe it’s 10, grand, 1520 grand, and that’s either to, you know, have a tenant, you know, leave, and then rehab their unit when they’re gone, or repairs that they’ve been very patient on, and you want to redo them, one of the things we do is we send them a letter written by the building, which is, hey, we’re really excited to be your landlords. Please note two or three things that your existing landlord or previous landlord never, never took care of. And if they send something back on the list, and it’s like, I literally had one, one person say, yeah, I really hate the kitchen, I want the kitchen upgraded. You’re better off buying another place, I’m not upgrading the kitchen for you. However, there’s a lot of usually other stuff that’s like, three, four days worth of work for people that we do business with. I’m happy to invest that in our tenants. And then we kind of wait and see how it plays out. We’re with them for three months, four months, five months, six months, and then we start to get a feel do they pay on time? Are they constant complainers? Are they difficult to deal with is every single time they call you an emergency? Is their time always more valuable than your time? And so that’s where we put them through the candidate evaluation process. And then we decide, yeah, we’ll give you a lease or no, we won’t, or yes, this is what the rent is going to be, and we want to do a lease, and then they make the decision from there, whether or not they’re going to stay or they’re going to go. So that’s kind of the criteria that we really use to, to add value to any of the assets that we find.
Jeff Stephens
Yeah, I love that little property management tip there of asking people with those two or three things, because in many ways, you’re you’re giving them an opportunity to show you who they are, rather than to like, tell you who they are. Because whatever comes back on those three things will start to speak to I guess, you know, what type of tenant they are. And then that helps you evaluate, you know, what, what path you would like to see them take, you know, staying, staying at a higher rent, departing one way or the other. So, in this case you just mentioned, so like, you know, four Plex about 100. A door, you know, it should be 120, a door, whatever. So, you’re going to add upwards of $100,000 of value. Let’s just say that, in that in that case, then are you primarily, you know, just saying, hey, that equity feels really great Are you refinancing in some way, restructuring the debt to fuel your growth with taking out some of the equity that you’ve created? What’s your sort of strategy personally on that?
strategy there is I don’t want to be over leveraged. And so we kind of stick around 70% loan to value. We recognize that every deal that we do that our banks, our partner, and so if you start doing a bunch of deals that they don’t like, they don’t need to be your partner anymore. And at the end of the day, they have more money to deal with than I do. So I’m always willing to really empower them in the process and ask their opinion. So I’ll talk to a senior lender, or the senior lender, I’ll talk to their executive vice presidents and their senior vice presidents, I’ll talk to a few different people there in the bank and say, What are your thoughts on this? This is kind of my plan. How does you know? What are your thoughts on how that what that looks like? The mistake that too many people make is that they spend time working with a mortgage broker who has no say they have no say, you know, they have absolutely no say they have zero impact on your ability to get approved. So you want to talk to the people that own the answer. They’re the ones that own the signature on permission. And so we’ve gotten some unique things agreed to for us, because they’ve seen us perform over a decade. They’ve seen our returns, they’ve seen how we upkeep our units, they see that we don’t end up in lawsuits, and that we don’t end up and all these other crazy things. So it really is it’s again, its relationship with a bank, to let them know that their money is being well invested and that you’re a good steward of that money and that they’re going to see a return just like you’ll see a return. But don’t really pass an investor in a deal like that. Is the bank doing the work?
Jeff Stephens
Right, right. Yeah, it’s interesting. The word passive shows up a lot in our industry, but it sounds like it’s not Yeah, something you identify with. Exactly.
Yeah, yeah. Passive is silly. You have to work there’s no free lunches, you have to do the work. You have to know your numbers. You have to know your assets. You have to know how to work with people how to create relationship, you need to be able to work with people. You know, single family homes. The thing I don’t like about investing in single family homes, is you make one person upset and enjoy that 3060 90 day process to get them out no money and it gets nasty for the duplex. I’m usually carrying my costs, you know, my costs minus a little bit with one side being rented. So I have a whole lot more insulation from bad things happening.
Jeff Stephens
Yeah, yeah. Yeah. I absolutely agree on that idea of passive, I think it’s a nice word to toss out. And it’s not just to me so much that it’s like, Oh, don’t say passive because that’s not realistic. But I think there’s a class of investors who actually want to be you. And I had a conversation in a different context online the other day about the idea of syndication. So we’re both like, no, that’s not really our thing. And I loved what you said that winners want to have the ball in their hands so that they can take the shot. And I just I totally agree with that. And that’s not but that’s not a passive activity. And I would argue that that’s an entrepreneurial activity when you actually want to have the, you know, the ball in your hand. But that’s neither here nor there. But I agree passive is not. I don’t know. It’s not that it’s just not realistic. It’s just not how everybody wants to do everything.
Yeah, being passive is you being along for the ride. Yeah, thanks, I’ll drive. I’ve asked my wife, she drives almost nowhere. There’s reason for that, I want to be the one driving and that way, if I backup the car, it’s on me, I did it my fault. So yeah, I think winners want the ball, I’m not interested in passive, I’m interested in making my money work for me. But there is a process by which that has to happen, which is you have to study yourself approved, you have to understand what you’re doing. It is a lot more effort. But you know, I’m 45 years old, and I don’t have to work on WTO anymore, I work because I want to and any day, I could walk out of the building and say, I never need to work again. So it’s been that way for probably three or four years. So it’s just that point now. So it’s for me, it’s you know, it’s much more or less than in, I’ve got young kids, and so I’m gonna get to spend a whole lot more time with them and watching them grow up and being a part of their experiences based on all the non passive things I did, you know, working hard and trying to create wealth. And, you know, we’ve done a decent job of that.
Jeff Stephens
Yeah, yeah, that’s awesome. And okay, so do you. Just Just a question out of curiosity, do you identify as an investor, do you think of yourself as an entrepreneur who is in the sort of real estate industry,
I never read Kiyosaki his book, in all honesty, so I know that he kind of breaks it down in his book, I couldn’t tell you, I’m, I’m a pretty simple guy. Hence why I think the lumberjack landlord really explains it very simple, which is I understand how to evaluate a deal. I don’t really care about a bunch of the excess baggage, I don’t care if rates are 18 or 28%. I’m gonna do a deal. That makes sense. And so for me, I mean, I’m very entrepreneurial. I’ve started a number of businesses. But yeah, I don’t I landlord kind of encapsulated for me, which is in the trenches getting the work done. And I’ll lead up to others, but they want to call me an investor or, you know, investor or entrepreneur, I’ve been called worse thing. So either of those is fine.
Jeff Stephens
Nice, nice. So you, like me are spending a lot of time kind of in the trenches, so to speak, not just a real estate, investing or entrepreneurship, but with other investors, right, you are, you are passionately creating content for them spending time in groups, those things from your vantage point? You know, we see, when you spend time in those groups, you see a fair amount of struggle, right? People are trying to get traction, from your vantage point, like what are the things that kind of tend to get in people’s way, if you’re like, Man, I wish I could just wave a magic wand for you and eliminate that thing, because that just keeps getting in your way? Like, what are some of those trends that you would like to see people, you know, save themselves from these obstacles and speed bumps?
I think the biggest thing is you got to get your money, right? You know, you got to get your money, right, you have to really understand that you are selling a bank on wanting to do or your individual salaries financing, you have to convince them that you’re a good investment. And too many people underscore that they kind of show up and go okay, I’m here, I’m ready for my my bank loan. Why? And I think that my bank doesn’t view me as a borrower. They view me as an operator. And because I’m really good at what I do, they have no problem giving a great operator dollars to then the basically borrow. So I think the big thing that people get in the way first is I think they expect results too fast. I think they don’t have their money, right? I think they often put the wrong and fastest on the wrong syllable. And I think that it’s things that people need to focus on, which is get your money right first, but as you’re getting your money, right, we’re not working in a serial fashion. You know, we’re working in I’m trying to get my money, right. I’m stopping any and all unnecessary spending. I’m getting another job and trying to add more to the kafir because it’s just a season. And while I’m doing that I’m spending time every single day understanding the market understanding what’s going on, because if you do that you are Other than 95% of the agents in your market 95%, I give agents a really hard time because there’s far too many of them that have really written the coattails of this market. And they are going to be sadly disappointed in what a real market looks like, they have no idea their life is going to change a lot. I talked to a broker, we could go he closed 23 deals last year. And I think he’s close two or three this year. A little bit different of a world not making all the bread, you know, it’s very different. So I think the thing that people need to focus on is there’s never a wasted time, right? It’s spending your time learning your market really understanding exactly what you’re going to try. And by getting your money, right. That’s never wasted time. Some people get frustrated, say I’ve been looking for six months, and still haven’t really found anything, but the numbers are improving. You only need one motivated seller, you only need to find one deal. Too often people are like, Oh, well, I want 10 deals to choose from. Yeah, don’t we all. But I’ll create that one deal based on relationship based on my understanding of the market. And we’ll put something together. And so I think the biggest thing that people need to focus on is getting your money, right, doing your work and understanding exactly what type of asset that you’re looking for, and the area that you’re looking for it and really understand yourself if something’s a value or not a value. And if something’s lower than it should be, then that’s something you make an offer on and pounce, and you always should be working your numbers backwards. You know, this is how much money you know, these deals make. You know, there’s some people that do deals in markets where you make 2%. To your God, your water heater away from not making any money for 18 months. It’s not good. So yeah, just be smart about it, you know, leave margin, make sure that when you’re doing deals, you know that you’re only writing deals that quite frankly, if you’ve got it, you’re ecstatic because you only need one you don’t need a bunch. Yeah.
Jeff Stephens
Well said thank you for that. I wanted to ask you about your your your amigos. So I alluded to them before, and it seems like in the last several months. And you Michael Zuber and Dion McNeely, both of those guys have been guests on this podcast before, it seems like you guys have kind of formed an alliance and are hitching your wagons to each other and kind of going out with, you know, a consistent message. So I was just curious, like, why do you feel so much kinship with them in their approach? And what is it you feel like collectively you guys would like to do in terms of impact?
I mean, I think the you know, I think that we all got to financial independence and freedom, different ways. I think that, you know, all of them are the right way for us. So I think that it gives perspective, there’s things you know, Mike wouldn’t change a deadbolt on one of his properties, because he’s two and a half hours away. You know, Dion would call the handyman or maybe do it himself, but usually call the handyman. And for me, I’ll jump in there, and I’ll do it. And so I think the other thing, too, is is like, you know, Mike never did any house hacking Dion and I did. So I think it’s really just the fact that we’ve all gotten to a really successful level. And we all did it very different ways. But I think a lot of the core tenants there are true, you know, which is we took care of our money, we take care of our tenants, we understand the process. It’s very much repeatable, it’s steps that you’re taking through that process. And so, you know, I always tease Deion, you know, he came up with something called the binder strategy. I’ve been doing that for 15 years via text message. But brilliant. He found a way to articulate it to people that it’s very easy to repeat. For me, it was like, Well, how do you get her increase? Well, I never really thought about the fact that I was asking them to raise it. But that’s what we always did. Hey, it’s this time of year, and your lease is coming up for renewal? I did take a look, there’s these four units around you that are all equal to or worse than the unit that you’re in. Here’s the pricing ranges are I love for you to stay? But understand if you can’t, what would you feel comfortable in paying for rent this for this lease here? And then they get back to you? And if that number is too low, you just say yeah, I’m sorry, I just can’t do that, then a lot of times you get the answer back, well, what can you do? And I’ll give them a number. And that’s the number I can live with. And I don’t need them to move in and move out, I have to get the exact highest number from the market. I just need to get within shouting distance to the market. And that’s good enough. You know, I don’t want to raise their costs. But sadly, my costs go up. And because I’ve got my partner ie the bank, in all of these deals, they want to see that revenue is increasing and that I’m a good operator. And that’s what comes into being a good operator.
Jeff Stephens
Yeah, yeah. Awesome. Fantastic. Well, if, if you had to sort of give give listeners just any one kind of idea that’s like, if you walk away with nothing but this, what would you want them to make sure they they heard,
always be learning, always be learning. I spend time every single day reading things. Maybe I learned something, maybe I don’t, but I’m always going the pursuit of knowledge and Certainly once you’ve made it and on the way that you’re on the path that you’re there, when you’ve had those experiences, it’s very important that you give back and you share. And I think that that’s one of the things that you know, Mike and I and certainly do. And that’s where something we’re all really passionate about is making sure that we’re helping others reach that financial freedom, because again, we all did it three different ways. And so really, the big thing is read, read, read, keep on researching, watch tons of YouTube videos, understand, you know, it’s kind of like, it’s kinda like a five year old baseball player that this is what I always tell people is, I’m a five to a baseball player in the land of real estate, because I can over I can qualify almost anybody and get a deal done. And that’s what makes you a lead, when you’re not as versed in those things. You don’t know that there’s subject to seller based financing, you don’t know that you can do a 5040 10 loan, there’s all of these concepts that people don’t know about. So I think it’s the constant pursuit of knowledge is gonna put them in the best position where they’re going to be shocked after six months or a year, they’re gonna be shocked at how much they learned. It’s going to blow them away.
Jeff Stephens
Yeah, fantastic. Well, Matt, if people want to follow you check out what you’re doing. Keep up with you. Contact you what’s what’s the best place and wait for them to do that?
Yeah, so lumberjack landlord on YouTube and Instagram, we share a lot of our project work on Instagram. And then we have a weekly live stream 11:30am Eastern Time on Sundays, where I usually go for two or three hours just answering people’s questions, you know, things that they might have encountered it a deal or saw. Because I think that one of the things we try and stay away from is the pay per fee. So we like to just spend our saw our time out there, give them a couple of hours of our time. And, and, you know, let them answer the questions that they have and see if that helps.
Jeff Stephens
Awesome. Awesome. Well, thank you so much for spending time with me today, especially on a special day like your birthday. It’s very generous of you. Thank you so much.
Happy to do it. Thanks so much, Jeff. Appreciate it.
Jeff Stephens
Well, there you have it, Matt Hawkins, the lumberjack, landlord, a heck of a nice guy, a real giver, and a deeply experienced real estate investor. And I hope you enjoyed listening to that as much as I enjoyed conducting it. And be sure to check out Matt on YouTube and his other social media platforms. So that wraps up another episode of racking up rentals. This episode again has shownotes that can be found a thoughtful rt e.com/e 155. Please do us a big favor by hitting that subscribe button there follow button, or whatever the button is in your podcast app. And even more importantly, maybe just take a second to rate and review the show on whatever platform you listen to doesn’t have to be Shakespearean or long. Just even a couple words helps a lot. Thank you so much. Did you know that we have a Facebook group for thoughtful real estate entrepreneurs as well. It’s called rental portfolio wealth builders. And we would love to have you join us over there you can just type group dot thoughtful r e.com. And the little elfs that run the internet will take you right to that page in Facebook and you can hit the Join Group button. If you liked this episode, please take a screenshot of this episode on your phone and post that photo to Instagram. You can tag us on Instagram. That’d be awesome. We are at thoughtful real estate. So I’ll see you the next episode. Until then. This is Jeff from the thoughtful real estate entrepreneur signing off. Thanks for listening to racking up rentals where we build long term wealth by being a win win deal makers. Remember solve the person to unlock the deal and solve the financing to unlock the profits.
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