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and multifamily doors, and then 17,000 HOA units as well. 00:02:18.265 --> 00:02:21.885 So I did that for about 16 years, 17 years. 00:02:21.925 --> 00:02:24.936 And so yeah, I've got a long background in property management. 00:02:24.936 --> 00:02:32.776 I've done everything from being a receptionist, to property manager, to senior property manager, to being the COO of the company as well. 00:02:32.786 --> 00:02:35.276 I've done it all in the property management space, so to speak. 00:02:36.448 --> 00:02:37.627 That sounds like a lot. 00:02:37.828 --> 00:02:47.568 And some, one part that I think you're missed in saying that you were NARPM national president in 2023, and that's how we know each other. 00:02:47.568 --> 00:02:50.127 We met through NARPM a few years back. 00:02:50.177 --> 00:02:56.758 But for landlords who do not know what NARPM is and why it matters can you tell them a little bit more about that? 00:02:57.048 --> 00:02:57.587 Sure, yeah. 00:02:57.587 --> 00:02:58.448 Great call out there. 00:02:58.448 --> 00:03:01.967 Yes, Yuriy I knew you from my my RVP days on the NARPM board. 00:03:01.967 --> 00:03:05.388 I spent, I think, eight years on the NARPM national board of directors. 00:03:05.388 --> 00:03:08.358 I also helped start our local Richmond chapter. 00:03:08.677 --> 00:03:13.657 I helped run our state conference in Virginia, and I think I met you, I think, at the... 00:03:14.057 --> 00:03:17.337 We did a Pennsylvania kind of state meeting together. 00:03:17.668 --> 00:03:18.698 That was the first time we met. 00:03:18.698 --> 00:03:19.207 It was great. 00:03:19.237 --> 00:03:24.318 But yeah, I also served as the 2023 national president, which was one of the highlights of my life. 00:03:24.747 --> 00:03:28.237 It was a little more travel than than my wife liked with two young kids, but it was great. 00:03:28.578 --> 00:03:34.888 And NARPM is really important because I think it really elevates our professional status for our businesses as property managers. 00:03:34.888 --> 00:03:39.698 It also makes sure that we're held to a higher standard for our clients and our tenants as well. 00:03:40.108 --> 00:03:48.638 Landlords out there, if you're not using a NARPM property manager, then you might have somebody up the street that's just not that, that they're not held to any standards, right? 00:03:48.698 --> 00:03:57.747 And I think NARPM's a really fantastic way for property managers to network, understand that, hey, this is a difficult business, but it's not impossible as long as you're taking care of human beings. 00:03:58.258 --> 00:04:10.448 And then NARPM on the other side i- is really working hard as a national organization moving forward to try to advocate for landlords and try to advocate for property managers, and property managers and landlords' property rights, right? 00:04:10.448 --> 00:04:20.692 I think we've got a lot of, we've got a lot of stuff going on at the legisla- legislative level- That is really gonna have an

impact for, on us long term. 00:04:21.012 --> 00:04:36.922 I know that it's currently there's a lot of state by state laws and different things that get passed different places, but if we start getting, a lot of federal traction with the way they're talking about some of these things, there's gonna need to be a source to really advocate for landlords and property managers. 00:04:36.922 --> 00:04:45.122 And NARPM, we just switched our mission and vision a little bit around and to make sure that advocacy is called out in that, and NARPM's been doing a really good job. 00:04:45.132 --> 00:04:48.701 They just passed a bill in the House with bipartisan support last year. 00:04:49.002 --> 00:04:52.382 They've made a lot of headway in some Florida legislature issues. 00:04:52.382 --> 00:04:53.682 And so yeah, it's a... 00:04:53.992 --> 00:05:00.562 that to me are the two great things is like the professionalism, the community, and then the advocacy that, that NARPM provides. 00:05:00.641 --> 00:05:00.911 Yeah. 00:05:01.101 --> 00:05:03.382 Yeah, and it's not only on national level. 00:05:03.411 --> 00:05:19.672 We in Philly have so much crap coming out of our city council, and we have this lawsuit that landlords filing against them because of the way how they hold their meetings and how they're not accessible to everyone or maybe because behind the closed doors. 00:05:19.711 --> 00:05:25.742 And NARPM was able to contribute to that, to help landlords with that action. 00:05:25.822 --> 00:05:30.302 So grateful for that and great to have organization nar- like NARPM. 00:05:31.132 --> 00:05:34.851 Yeah, I- like I said, I think it's just gonna be a huge piece of the puzzle moving forward. 00:05:34.851 --> 00:05:38.021 There's gonna be a lot of tenants rights folks out there. 00:05:38.021 --> 00:05:41.201 There's gonna be a lot of landlord rights a- rights fo- folks out there. 00:05:41.201 --> 00:05:43.701 And just, some stuff does need to be legislated, right? 00:05:43.701 --> 00:05:46.672 And we do need to have common sense regulations around things. 00:05:46.692 --> 00:05:53.752 Not everything obviously, but I think if NARPM can be the leading voice in that as they're trying to become they can be really powerful. 00:05:53.752 --> 00:05:55.302 And like you said, it's powerful now. 00:05:55.322 --> 00:05:57.302 Florida, we've done a bunch of stuff in Florida. 00:05:57.312 --> 00:05:58.622 We've done a bunch of stuff in Oregon. 00:05:58.622 --> 00:05:59.982 We've done a bunch of stuff all over the place. 00:05:59.992 --> 00:06:04.682 So it's it's really important, I think, for our industry and just landlord rights in general. 00:06:05.521 --> 00:06:15.612 Unfortunately the more I am in this business, the more I deal with people and landlords and tenants, and I see that common sense is not that common as you would think it would. 00:06:16.331 --> 00:06:26.081 At Dodson, we always used to say,"This would be a really easy business if it wasn't for tenants, landlords, em- and employees." If you didn't have to- Yeah if you didn't have to deal with any of the people, you'd be great, right? 00:06:26.201 --> 00:06:26.552 Yep. 00:06:26.812 --> 00:06:27.141 Yep. 00:06:27.831 --> 00:06:29.242 Okay switching the gears here. 00:06:29.271 --> 00:06:36.951 You said you were managing about 8,500 units, I think by the end of all of this across- Yeah different states and different cities. 00:06:37.422 --> 00:06:47.232 From that high perspective what do you think is the most common mistake that small landlords make that cost them a lot of money? 00:06:48.196 --> 00:06:48.596 Yeah. 00:06:48.735 --> 00:06:51.005 I think two, two things come to mind, Yuriy. 00:06:51.016 --> 00:06:53.216 One is deferring maintenance. 00:06:53.665 --> 00:06:55.716 I think that can just be really detrimental. 00:06:55.716 --> 00:06:56.386 I know it's hard. 00:06:56.435 --> 00:06:56.786 I've... 00:06:56.865 --> 00:06:58.156 I'm an investor myself. 00:06:58.526 --> 00:07:09.805 I've got properties, and the last thing you want is an unexpected bill to hit for, gosh, you gotta do an HVAC replacement and suddenly you're like,"Wow, that's 13 grand." Or a roof leak happens and it's... 00:07:09.815 --> 00:07:13.396 Even if it's just a$600 repair and you're just not in position to do it that month. 00:07:14.036 --> 00:07:21.886 The more you delay, the worse your property condition gets, the more angrier your tenant gets, the less likely they are to renew. 00:07:21.896 --> 00:07:28.966 So I just think there's this pattern of okay, suddenly my asset is depreciating and it's not actually looking good. 00:07:28.966 --> 00:07:44.276 And so I've got a tenant that hates me and moves out, and suddenly I can't rent it for as much or I don't have, I don't have the 15,000 then to totally turn it because they left it in bad shape because they were mad at me because I didn't fix the leaky roof that had been leaking for a year and a half, right? 00:07:44.276 --> 00:07:49.555 So I think that's a really big one that people don't think about as costing them money in the long term. 00:07:49.836 --> 00:08:10.250 But I think if you're pushing maintenance down the line, it's gonna cost you in asset value and it's gonna cost you in tenant value when your tenant finally moves out The second one I see, I think really i- is maybe a little bit more straightforward, but I see especially private landlords a lot of times they have a great tenant. 00:08:10.319 --> 00:08:10.860 They love it. 00:08:10.870 --> 00:08:16.850 It's been a long-term tenant, and they just don't, they don't increase their rents the way that they're supposed to increase their rents, right? 00:08:16.899 --> 00:08:21.810 Suddenly you have a tenant that's been in there and they're 300 behi-$300 a month behind market value. 00:08:22.240 --> 00:08:22.660 I have... 00:08:22.709 --> 00:08:26.290 I will admit, I have one of those in one of my rentals right now. 00:08:26.779 --> 00:08:35.929 And it's a house I

bought like in 2011, and she was the only tenant I've ever had in there, and she's probably 300 bucks behind on market rent. 00:08:36.169 --> 00:08:36.789 She's great. 00:08:36.860 --> 00:08:37.620 She's wonderful. 00:08:37.649 --> 00:08:42.720 I love her, but every month I get that check and I'm like,"Man, I really regret not increasing her rents." It's... 00:08:42.940 --> 00:08:44.440 And it's so simple when you think about it. 00:08:44.470 --> 00:08:46.549 It's okay if she moves out, that's a problem. 00:08:46.549 --> 00:08:51.929 I've gotta turn the unit and, she's such a nice woman and sh- you know, she's got a special needs kid, wanna treat her right. 00:08:53.139 --> 00:09:01.950 My heart's in the right place, but at the end of the day, when you're giving up 300 bucks a month to market rent, that, that's not a great decision. 00:09:01.950 --> 00:09:02.490 But I do see... 00:09:02.490 --> 00:09:02.600 I... 00:09:02.679 --> 00:09:04.169 You see it so much. 00:09:04.409 --> 00:09:12.779 We used to take over properties left and right and we'd be like,"Wow, that is really under-rented." And the story was always she's a great, she's a great tenant. 00:09:12.879 --> 00:09:13.250 Love her. 00:09:13.250 --> 00:09:15.149 She's been there for a long time," or,"He's a great tenant. 00:09:15.190 --> 00:09:15.529 Love him. 00:09:15.529 --> 00:09:24.750 He's been there for a long time," or,"Oh, he does some maintenance or he does the yard and that's not part of the lease we cut him a deal." You just gotta figure out what market rent is and go with it or move on. 00:09:25.860 --> 00:09:26.059 Yeah. 00:09:26.059 --> 00:09:32.706 So th- those are the two for me, is the deferred maintenance and the not getting at market rent when you're when your lease is up for renewal or however it may be. 00:09:33.265 --> 00:09:37.416 And to that point, I think we have two complete opposite type of landlords. 00:09:37.416 --> 00:09:50.125 Somebody who doesn't want to increase because w- I have a great tenant and they've been staying there forever, and they've been paying me, or somebody on the other side that I want to increase a- and I want to have my 5, 10% increase, whatever it is. 00:09:50.525 --> 00:09:54.826 And in the market that we have right now, it's just not possible. 00:09:54.875 --> 00:09:55.836 You can increase it. 00:09:56.255 --> 00:09:58.706 Nobody keeps you from it, but you will lose your tenant. 00:09:58.735 --> 00:10:05.615 And if you're losing your tenant, then you have the turnover, and we all know that maintenance, it's not the cheapest part of the business right now. 00:10:05.985 --> 00:10:06.235 Yeah. 00:10:06.235 --> 00:10:15.677 It's a much, it's a much different- world that we're living in right now than we were 16, 18, 24 months ago when it was straight up, right? 00:10:15.687 --> 00:10:15.707 Yeah. 00:10:15.717 --> 00:10:16.888 Rents were going straight up. 00:10:17.018 --> 00:10:22.148 Property values were going straight up, and I think landlords probably got used to that, and I think that's okay, right? 00:10:22.197 --> 00:10:26.567 Before we keep going, a quick thank you to our sponsor, TrustArt Realty. 00:10:26.628 --> 00:10:39.118 If you're a Philadelphia landlord and you're thinking about growing your portfolio, the first question you need to get answered is what is your current properties are actually worth in today market, because the equity is your fuel. 00:10:39.437 --> 00:10:54.498 TrustArt Realty offers a free rental analysis for all of our listeners so you know exactly what your units should be commanding right now, and a free management consultation if you're ready to stop self-managing and hand it to a professional team. 00:10:54.947 --> 00:11:06.868 Reach out to us at trustartrealty@phillylandlordguy.com or go to trustartrealty.com and hit the link to schedule your consultation. 00:11:07.508 --> 00:11:08.687 Now get back to Tim. 00:11:09.153 --> 00:11:12.562 As landlords, we need to adjust our thinking, right? 00:11:12.562 --> 00:11:18.322 Y- just because you have an asset doesn't mean you deserve that it should go up 5 to 10% every year, right? 00:11:18.373 --> 00:11:22.243 And you should also just keep im- just be paying attention to the market, right? 00:11:22.243 --> 00:11:24.572 Be hyper-focused on what your market looks like. 00:11:24.842 --> 00:11:26.852 I don't live in Philly or the surrounding areas. 00:11:26.852 --> 00:11:33.962 I know it fairly well, but, Richmond, even the little micro markets that we have could just be totally different. 00:11:33.972 --> 00:11:41.163 So you really got to be paying attention as landlords and property managers to what those little micro markets are doing and how you can you push rents? 00:11:41.163 --> 00:11:42.332 Can you increase, right? 00:11:42.623 --> 00:11:45.423 If you do try to increase are you gonna lose your tenant? 00:11:45.472 --> 00:11:55.613 If you're a property manager and you try to get that increase and the tenant says they're leaving, are you gonna call them back and say,"Hey, what if we only increased it X percent?" Or whatever it is, right? 00:11:55.613 --> 00:11:56.352 Would you stick around? 00:11:56.352 --> 00:12:00.903 And so you got to have property managers who know what they're doing if you're a la- if you're if you're a landlord. 00:12:00.903 --> 00:12:04.472 And then as a landlord, you have to have reasonable expectations of what that performance looks like. 00:12:05.462 --> 00:12:05.923 Yeah. 00:12:06.023 --> 00:12:16.113 And on the maintenance part what did your best run properties have in common when it came to maintenance and vendor management back when you were managing them? 00:12:16.452 --> 00:12:22.832 Our best run properties were the ones that would let us do the work for them instead of having us do our, have their own handyman. 00:12:22.832 --> 00:12:30.273 So we had a model on the single family side where we would allow you to provide us a handyman, and we would use them if

that's what you wanted. 00:12:30.722 --> 00:12:34.663 I know that's not super-duper common in the property management industry, but that's what we did. 00:12:35.062 --> 00:12:42.743 And inevitably, when somebody else had their maintenance person working, it was slower on the maintenance side. 00:12:42.743 --> 00:12:46.133 It ended up costing more, and the tenant was usually irked. 00:12:46.153 --> 00:12:52.802 So we actually had our list of vendors, and we had a few internal maintenance folks that we were able to use. 00:12:52.832 --> 00:12:53.913 We kept costs down. 00:12:53.952 --> 00:12:56.773 It was a money maker for us, but it was not a... 00:12:57.302 --> 00:12:59.893 We're not, we're not making 40% margins on it, right? 00:12:59.893 --> 00:13:04.312 If we were trying to make 10% margins on it, that was a good, that was good for us, right? 00:13:04.312 --> 00:13:09.003 We wanted to have aligned goals with our landlords, and so that was our goal there. 00:13:09.033 --> 00:13:17.033 So we were trying not to rip folks off, but if they let us handle it, if they let the professionals handle what they were supposed to be doing, those were the most well-run properties. 00:13:17.312 --> 00:13:19.993 And then I guess I'll go back to as well not deferring maintenance. 00:13:19.993 --> 00:13:22.493 When you have the opportunity to fix something, go ahead and fix it 00:13:24.086 --> 00:13:24.537 Okay. 00:13:24.537 --> 00:13:40.027 And if we're talking about property management, managing, your property and managing your maintenance and taking care of everything, at what point a small landlord should be thinking about giving their properties away to a management company instead of managing themselves? 00:13:40.437 --> 00:13:41.797 Yeah, it's a good question, Yuriy. 00:13:41.897 --> 00:13:45.136 And I'm gonna give you a terrible answer, is it depends, right? 00:13:45.496 --> 00:13:47.716 It really depends on what your goals are. 00:13:47.966 --> 00:13:52.447 For me, right now I only have seven units. 00:13:53.216 --> 00:13:54.167 That's down from... 00:13:54.346 --> 00:13:59.437 i've fluctuated in my life from 100 and some to, down to two, right? 00:13:59.466 --> 00:14:05.817 But I want those managed professionally right now because I'm on the lookout for finding new properties, right? 00:14:05.836 --> 00:14:10.086 If somebody only wants five properties and that's what they have, and they're able to manage it, then great. 00:14:10.586 --> 00:14:11.197 That's fine. 00:14:11.216 --> 00:14:23.466 I would still suggest probably using professional management just because of the constantly changing landscape that we were talking about, whether it be with the laws, with the regulations, with inspections or whatever it may be. 00:14:23.787 --> 00:14:28.277 I would still recommend going to a professional property manager if you've got one or five. 00:14:28.797 --> 00:14:35.006 But if you're used to it, if you know how to do it and you're staying in tune with what's going on locally, go for it. 00:14:35.397 --> 00:14:38.976 But if your goal is to expand, if your goal is to grow, right? 00:14:38.976 --> 00:14:44.017 If your goal is to get to 20, how are you gonna manage your properties and focus on that, right? 00:14:44.407 --> 00:14:47.966 I think you should have a really defined structure with how you wanna do that. 00:14:48.006 --> 00:14:49.407 And the way that it... 00:14:49.456 --> 00:14:57.787 The difficulty in finding deals these days is real, and so you gotta be spending the majority of your time right now trying to find deals. 00:14:58.126 --> 00:15:00.793 And to me It... 00:15:00.932 --> 00:15:02.942 Going back to it, it just depends on what your goals are. 00:15:02.952 --> 00:15:07.023 However I really th- suggest professional property management all the time. 00:15:07.052 --> 00:15:14.472 I know that it eats into your NOI as a, as an investor and a landlord, but it can save you a lot more money in the long run. 00:15:15.643 --> 00:15:15.962 Yeah. 00:15:16.082 --> 00:15:16.802 I agree. 00:15:16.883 --> 00:15:26.592 I, myself personally, before I got into property management, I had about five units when I was on my, at my breaking point that I... 00:15:26.653 --> 00:15:36.913 I, at that time, I had my full-time job, and I had my five units, and that was too much for me to deal with, and that's when I gave it out to a property management company. 00:15:37.442 --> 00:15:37.763 Yeah. 00:15:37.802 --> 00:15:38.993 I think that's, I think that's... 00:15:39.273 --> 00:15:40.523 Five is, would... 00:15:40.582 --> 00:15:43.832 If you're working a full-time job, five would be the breaking point, for sure. 00:15:43.842 --> 00:15:44.322 It's just... 00:15:44.923 --> 00:15:46.702 I know that sounds crazy, but it just is. 00:15:46.702 --> 00:15:47.783 I've got one right now. 00:15:47.783 --> 00:15:50.543 I just built a house, and it is driving me crazy. 00:15:50.543 --> 00:15:52.832 It's been on the market for about two weeks. 00:15:52.893 --> 00:15:53.812 But it it's taking... 00:15:53.822 --> 00:15:55.332 It's monopolizing my life. 00:15:55.543 --> 00:16:00.423 So I'm, I would love somebody else just to own it and get rid of it at this point. 00:16:00.423 --> 00:16:02.732 But yeah, it can be one that drives you crazy, right? 00:16:02.753 --> 00:16:02.773 Yeah. 00:16:02.783 --> 00:16:04.893 It can just be that one problem house. 00:16:05.312 --> 00:16:06.363 It can be two. 00:16:06.383 --> 00:16:07.202 It can be five. 00:16:07.202 --> 00:16:10.452 So I know I'm giving you a bad answer, but I think it... 00:16:10.493 --> 00:16:17.702 Just going back to think about what your goals are, and maybe your goal is to make as much possible money as you can right now, and maybe that's... 00:16:17.712 --> 00:16:19.852 So then maybe it's not time for a property manager. 00:16:20.192 --> 00:16:31.942 But maybe your goal is to get to 25 units or 75 units, and at that point, you gotta get a property manager because

you're just gonna be spending so much time doing the other stuff that you're not gonna be able to figure, find deals or get deals done. 00:16:32.873 --> 00:16:46.503 As what we're saying, that we're seeing more and more this tenant-friendly legislation coming out in different markets, not just in Philadelphia, but even in states that usually more landlord-friendly than specifically Philly market. 00:16:46.903 --> 00:16:47.243 Yeah. 00:16:47.493 --> 00:16:48.143 How... 00:16:48.202 --> 00:17:02.003 and in Philly, we just recently, this year and last year, we passed quite a few ordinances that affect specifically how we do business as landlords, how we can screen our tenants, how we can terminate our lease. 00:17:02.023 --> 00:17:09.202 And now we have good cause eviction protection, not just for one or month-to-month lease, but any lease. 00:17:09.762 --> 00:17:16.472 And we have proactive inspections now that they will be rolling out instead of reactive. 00:17:16.972 --> 00:17:20.202 Now L&I is planning on inspecting every single unit. 00:17:20.202 --> 00:17:27.512 I do not know how they're going to do it for the city of Philadelphia, where are they gonna get the workforce to do it, but this is something that's on the books now. 00:17:28.063 --> 00:17:35.073 How do landlords usually come on top of the, this environment when it gets harder? 00:17:36.608 --> 00:17:39.509 You're asking how do they win basically when it gets harder? 00:17:39.509 --> 00:17:40.878 Yeah, one, you just really... 00:17:41.118 --> 00:17:43.598 One, just as we talked about, right? 00:17:43.939 --> 00:17:48.959 It is your job, Yuriy, as a property manager to... 00:17:48.979 --> 00:17:56.679 Or my job as a property manager to understand these laws and help landlords over- overcome the difficulties of them, right? 00:17:57.148 --> 00:17:58.378 You're gonna see a lot of people sell. 00:17:58.409 --> 00:18:08.778 You're gonna see a lot of people that say,"I'm not gonna deal with all this stuff." So think about it maybe as an opportunity to buy more properties, to get into some different areas. 00:18:08.888 --> 00:18:18.719 But yeah, I would say make sure you have a good property manager on staff, make sure you have a good attorney in your back pocket, and make sure you have a good real estate agent that can sell or buy for you really quickly. 00:18:19.108 --> 00:18:28.598 Because, the landscape is always gonna change, whether it's get, gets more ten- tenant friendly, gets more landlord friendly, there's always gonna be something changing, right? 00:18:28.598 --> 00:18:32.939 So you have to build your team out to be flexible, and you have to have... 00:18:33.098 --> 00:18:34.739 Manage your own expectations, right? 00:18:36.462 --> 00:18:40.623 And I would even go back to just starting with the deal, right? 00:18:41.522 --> 00:18:48.073 When you're think- when you're looking at a deal, is it a real- is it a deal that can withstand changes, right? 00:18:48.073 --> 00:18:52.472 Are

you just buying something just to buy something'cause you're bored and you need to put cash somewhere, right? 00:18:52.472 --> 00:18:54.813 Or are you making a stretch on what you're looking at? 00:18:55.192 --> 00:18:56.492 And just don't do it, right? 00:18:56.492 --> 00:18:58.032 Find the right deal for yourself. 00:18:58.462 --> 00:19:04.002 Put the right amount of money into the deal and set yourself up for success at the start. 00:19:04.222 --> 00:19:10.032 As most people know, success in real estate y- you make your money on the front end, on the acquisition, right? 00:19:10.053 --> 00:19:17.282 I would just make sure you're continuing to stay diligent to that despite the marketplace right now being a difficult one to find deals in. 00:19:18.353 --> 00:19:34.742 So talking on the acquisition or about acquisitions if you were a Philadelphia landlord yourself sitting on two or three properties right now and possibly looking to grow your portfolio, what would your strategy look like for 2026? 00:19:36.573 --> 00:19:40.722 I'm not a Philadelphia landlord, but I can tell you what my strategy is here in the Richmond area. 00:19:40.772 --> 00:19:46.173 Yeah I can tell you w- one of my partners and I, we just refinanced a couple properties that we have had for a while. 00:19:46.173 --> 00:19:46.722 I wanted to... 00:19:47.363 --> 00:19:52.623 Like everybody I'm on BiggerPockets, I'm looking at I'm reading all these things and saying,"Okay, I'm just gonna BRRRR. 00:19:53.073 --> 00:19:55.123 I'm gonna, I'm gonna BRRRR some properties," right? 00:19:55.123 --> 00:19:57.613 I'm gonna find a bunch of deals and they're gonna be right in Richmond. 00:19:57.663 --> 00:19:59.772 I'll be able to find some value add stuff. 00:20:00.732 --> 00:20:02.093 It's really difficult. 00:20:02.153 --> 00:20:03.323 It's still really difficult. 00:20:03.333 --> 00:20:07.792 So my biggest thing is I'm actually expanding my footprint in what I'm looking at. 00:20:07.833 --> 00:20:13.673 I'm looking at deals in secondary markets like in North Carolina, which are only a couple hours away. 00:20:14.042 --> 00:20:17.853 And I'm on some different websites where you know, the... 00:20:18.333 --> 00:20:23.752 Whoever holds the deals right now is gonna win over the next year and a half, two, three years. 00:20:23.762 --> 00:20:30.893 You've got a lot of different companies like rebuild.com and some other folks trying to get off-market deals in front of investors. 00:20:30.903 --> 00:20:38.653 So I'm exploring those sorts of places to try to find some value add properties, right? 00:20:38.653 --> 00:20:40.083 'Cause I wanna do a value add. 00:20:40.093 --> 00:20:41.173 That's what I enjoy. 00:20:41.173 --> 00:20:42.732 I like renovating properties. 00:20:42.742 --> 00:20:48.732 So that's always gonna be my strategy, but the strategy is changing in the fact that I'm expanding my footprint of where I'm willing to go. 00:20:49.252 --> 00:20:59.413 And what that means is I've also had to do a lot of legwork on the front end and saying Do I know somebody in Asheville, North Carolina, where they'll be able to help me do some value add? 00:20:59.423 --> 00:21:01.722 Do I have a team here that can go there? 00:21:02.123 --> 00:21:07.373 Can I look in Greensboro, North Carolina?" Again, markets that are close, closer to Richmond for me. 00:21:07.932 --> 00:21:09.633 So the, those are within three hours of me. 00:21:09.643 --> 00:21:22.798 So- Really just looking at expanding my footprint and not just saying,"Okay, I'm gonna try to find something right down the road."'Cause the MLS doesn't have deals on it that, that is, that are worth my time, quite frankly. 00:21:23.148 --> 00:21:27.459 So ex- figuring out how different, how to get a little bit different, right? 00:21:27.479 --> 00:21:30.439 Not outside of my regular strategy, but just a little bit different. 00:21:30.439 --> 00:21:33.169 So expanding my footprint a little bit. 00:21:33.509 --> 00:21:40.719 I've reached out to a couple of more real estate agents, trying to get them to try to find me those deals so that I can try to find some off-market deals. 00:21:40.719 --> 00:21:47.449 But then again, like I said, like a rebuilt.com is one that I, that Lending One, full disclosure, Lending One is partners with them. 00:21:47.808 --> 00:21:56.365 But that, that, that is a great tool for folks who are wanting to look for properties So it might not be to equate that to Philadelphia. 00:21:56.835 --> 00:22:01.505 Maybe you're used to, to being in Philadelphia proper, right? 00:22:01.545 --> 00:22:11.115 Maybe you're used to investing in one micro market in Philadelphia proper, but maybe you expand 10 miles west, where you've never looked 10 miles west. 00:22:11.144 --> 00:22:13.065 Maybe it's 10 miles north. 00:22:13.365 --> 00:22:18.944 Maybe it's, maybe you're just into Wilmington, Delaware, or whatever it is now that you're willing to look at. 00:22:19.285 --> 00:22:24.295 But I think just maybe being a little bit more flexible with what your typical buy box is. 00:22:24.305 --> 00:22:32.414 Now, don't go outside what your numbers make them look like, but you might have to find expanding outside of your comfort zone in terms of geography. 00:22:33.315 --> 00:22:44.525 We have a lot of, Not this year, but the past couple years, we had a lot of influx of out-of-state landlords who would come- Oh, yeah and they buy renovate, basically do BRRRR method. 00:22:44.575 --> 00:22:53.454 And they would find some kind of guru online who teach them how to do it, how to buy, and how to flip or renovate and rent it in Philly. 00:22:54.214 --> 00:23:01.674 And the model is usually find something super cheap put, I don't know, 50, 60 grand into it- 00:23:01.775 --> 00:23:02.065 Yep 00:23:02.154 --> 00:23:04.964 and rent it out for$2,000, which never works. 00:23:04.984 --> 00:23:05.914 Which never works. 00:23:05.974 --> 00:23:06.045 Literally 00:23:06.045 --> 00:23:06.065 it 00:23:07.184

--> 00:23:07.984 doesn't work. 00:23:08.015 --> 00:23:15.085 There is not a single spot in this city where you can buy a cheap property, put 50, 60 grand rent, and rent it for$2,000. 00:23:15.095 --> 00:23:16.164 It just doesn't exist. 00:23:17.015 --> 00:23:20.785 But people do take those courses. 00:23:20.785 --> 00:23:27.904 They do read BiggerPockets or listen to podcasts like that, and then it's in their head that they can do it. 00:23:27.944 --> 00:23:31.515 And they- Yeah they try doing that, and it just doesn't work. 00:23:31.515 --> 00:23:32.694 The numbers do not work. 00:23:32.704 --> 00:23:40.974 They underwater, or they cannot pay for the lender, whatever they use, because the rent is so cheap compared to what they were planning. 00:23:40.984 --> 00:23:50.454 Or what we see happening pretty often is that they go and buy this old row house, and they do not do proper renovation. 00:23:50.464 --> 00:23:52.015 They just do cosmetic lipstick. 00:23:52.045 --> 00:23:57.894 They put new kitchen cabinets, like new tile, new bathroom, but they don't do anything behind the walls because who cares? 00:23:57.904 --> 00:23:58.934 It looks beautiful, right? 00:23:59.025 --> 00:24:07.615 But when what I call it, people start actively living in that property, then you start figuring out that nothing works. 00:24:07.914 --> 00:24:09.325 That the wiring is old. 00:24:09.615 --> 00:24:11.095 Nothing w- is working. 00:24:11.115 --> 00:24:13.085 You have a leak in every single room. 00:24:13.095 --> 00:24:15.265 You have problems everywhere. 00:24:15.954 --> 00:24:41.527 So that being said how, or, With people like that, people who are trying to invest, and yourself as well, what kind of- financing are you using and how do you underwrite the deal to make sure that not on the financing side, but as a landlord or as an investor, how you, how do you u- underwrite your deal to make sure that it actually makes sense? 00:24:42.196 --> 00:24:42.636 Yeah. 00:24:42.757 --> 00:24:43.567 It's a good question. 00:24:43.567 --> 00:24:45.336 So again, I'm a little biased. 00:24:45.336 --> 00:24:47.686 I work for a lender, so I'm actually using... 00:24:47.686 --> 00:24:52.527 And that's actually how I found out about LendingOne is I started using LendingOne as an investor. 00:24:52.656 --> 00:24:57.346 And I started using DSCR loans as a way to to try to make deals work. 00:24:57.346 --> 00:25:01.557 I didn't know what they were before I started with LendingOne and started talking with LendingOne. 00:25:01.916 --> 00:25:06.747 But so yeah again, I'm just f- fully disclosure I'm biased, but I'm using LendingOne 100%. 00:25:06.747 --> 00:25:12.596 We- we'll finance 100% of your rehab costs, so that's a no-brainer, right? 00:25:12.596 --> 00:25:18.836 So up to 92.5% of your loan to loan to cost, which is your acquisition in there, and everything in between. 00:25:18.836 --> 00:25:23.767 So typically I- I'm going straight to LendingOne and saying,"Hey, can I get some money?" Right? 00:25:23.767 --> 00:25:30.257 "Can I do this?" In fact the properties we just refinanced, I refinanced with LendingOne out of a local bank. 00:25:30.797 --> 00:25:39.941 It was just good timing because the local bank was my five-year ARM was maturing and they were gonna blow up my interest rate, and so it just worked out. 00:25:39.941 --> 00:25:44.800 But yeah, so LendingOne does DSCR loans, which are debt service coverage ratio loans. 00:25:44.800 --> 00:25:46.490 We've got a couple of different products there. 00:25:46.921 --> 00:25:55.580 Thir- they're 30 years amortized, or we also have a 10-year interest-only product, which does help people with cashflow upfront, right? 00:25:55.611 --> 00:25:57.971 So I'm looking at both of those options. 00:25:57.971 --> 00:26:10.090 Again, with the value add as well, I'm trying to acquire the property, finance all of the ac- the renovations, excuse me, and then roll it right into a DSCR, a 30-year DSCR loan. 00:26:10.580 --> 00:26:11.121 We save... 00:26:11.161 --> 00:26:16.510 You can save a bunch of money with us with origination fees and bips off your rate as well if you do it that way. 00:26:16.510 --> 00:26:20.020 So that's kinda my plan in terms of financing. 00:26:20.641 --> 00:26:22.681 LendingOne's a great option, folks, if you're listening. 00:26:22.681 --> 00:26:25.740 We'd love to talk to you, but there's also a ton of other private lenders out there. 00:26:26.121 --> 00:26:32.641 You should always have a hard money person, a private lender, and a local bank that you can go to in a jiffy and say,"Hey, here's a deal that I'm looking at. 00:26:33.340 --> 00:26:37.590 Can you help me?" I'm not gonna, I'm not gonna forever do LendingOne loans. 00:26:38.050 --> 00:26:43.921 Right now they seem to be a great option with our interest rates, you term- you asked in terms of underwriting my deals as well. 00:26:44.421 --> 00:26:45.671 I literally have... 00:26:45.760 --> 00:26:47.020 I do a couple of things. 00:26:48.090 --> 00:26:51.911 LendingOne ha- we give all of our partners the, a deal calculator. 00:26:52.500 --> 00:26:53.310 That's where I start. 00:26:53.540 --> 00:26:57.730 I do that, and I just make sure that it kinda fits in the DSCR model. 00:26:58.221 --> 00:27:00.101 And then I do a couple things. 00:27:00.101 --> 00:27:04.750 I go straight to my cap rate spreadsheet, which I built 15 years ago, right? 00:27:04.760 --> 00:27:07.070 Which is gonna tell me, is it a good deal? 00:27:07.121 --> 00:27:08.480 So I'll just run right through it. 00:27:08.480 --> 00:27:10.490 I'm always super conservative with my numbers. 00:27:10.490 --> 00:27:19.810 I try to pull the all the real numbers that I can, but then I'll just plug that in and say,"Okay, is this cap rate within what it should be trading for? 00:27:19.810 --> 00:27:39.480 If not, can I trade or can I change the the acquisition amount or the market value of the property to make it worthwhile?" If it graduates from that, then

I'll really do a deep dive on a budget and go visit the property and try to try to really look into, hey, is this worth my time to, to renovate, and can I get the ARV that I think I can out of it by, and by walking it? 00:27:39.480 --> 00:27:40.201 But that's really it. 00:27:40.250 --> 00:27:45.550 Like I said, I use my deal calculator to make sure it fits into a DS- DSCR loan, and then I go right into my cap rate. 00:27:45.840 --> 00:27:48.221 And if it fits within the cap rate, then I'm gonna go take a look at it 00:27:49.383 --> 00:27:55.363 To that point actually on our website at trustartrealty.com, we built those calculators. 00:27:55.373 --> 00:27:58.553 So anybody who wants to use they free to use. 00:27:58.553 --> 00:28:01.643 You can just go plug in your numbers, put your property address. 00:28:01.643 --> 00:28:04.532 If it's in Philadelphia, I think it automatically pulls out your OP da- data. 00:28:04.532 --> 00:28:16.123 It will pull the taxes everything that we know or that publicly is available in the city of Philadelphia will automatically get into your form, and you can see all the numbers calculated for you. 00:28:16.123 --> 00:28:18.853 You just need to put some information in it. 00:28:18.853 --> 00:28:25.173 But Tim, as you mentioned, that you didn't really know what D- DSCR loans were before you got into lending one. 00:28:25.452 --> 00:28:25.692 Yeah. 00:28:25.923 --> 00:28:27.843 And I'm sure it's a common term. 00:28:28.093 --> 00:28:32.242 People hear it here and there, but a lot of people still do not fully understand it. 00:28:32.282 --> 00:28:34.732 Can you simply break it down for us? 00:28:34.752 --> 00:28:36.692 What is it and why it exists? 00:28:37.292 --> 00:28:37.563 Yeah. 00:28:37.563 --> 00:28:38.583 So it... 00:28:38.853 --> 00:28:40.042 Honestly, it's really simple. 00:28:40.063 --> 00:28:46.143 If you're an investor, you've ever bought a home, I- I'll explain it by comparing it to what people are used to, Yuriy. 00:28:46.653 --> 00:28:51.833 People are used to what is called a DTI loan, which is a debt-to-income ratio loan, right? 00:28:51.833 --> 00:28:56.032 So I'm going to a bank, I'm gonna go buy a personal residence or a rental property. 00:28:56.532 --> 00:28:57.542 They're gonna ask for W-2s. 00:28:58.053 --> 00:29:00.782 They're gonna ask for couple years of taxes. 00:29:00.782 --> 00:29:03.673 They're gonna ask for your sister's tax returns, right? 00:29:03.722 --> 00:29:11.222 They're gonna ask you for a ton of paperwork to make sure that your ability to pa- pay that loan back exists, right? 00:29:11.222 --> 00:29:23.643 So me as a person, me as a human being, can I pay that loan back based on my income, based on what other debt I have, whether it be another mortgage or a car payment or whatever it may be. 00:29:24.373 --> 00:29:34.282 And so they use a ratio where they're dividing your monthly gross income by your debt, and they say,"Okay, can w- do we think this person can pay back their rent?" They then put it on your personal credit. 00:29:34.903 --> 00:29:37.373 There's probably gonna be limits on that, right? 00:29:37.403 --> 00:29:45.492 If you go to your local bank, they're not gonna loan you on 10 different properties because their threshold for risk in that regard is not that high. 00:29:46.694 --> 00:29:50.835 So that's a DTI loan, a very great tool for folks, right? 00:29:51.825 --> 00:29:56.464 If you're gonna buy one rental property, I suggest you, you look into that option, right? 00:29:56.994 --> 00:30:00.005 For a DSCR loan, it's a little bit of a different equation. 00:30:00.025 --> 00:30:07.355 So that's a debt service coverage ratio loan, where we're looking at a business entity and its ability to cover the debt. 00:30:07.875 --> 00:30:20.085 And so we're not looking at Tim or Yuriy to be able to cover the debt, we're looking at the business, and in the sense of DSCR loans for rental properties, the business is the asset, right? 00:30:20.204 --> 00:30:21.144 The rental property. 00:30:21.704 --> 00:30:29.875 So very simply, if your rental property rents for$1,500, or you said$2,000 is what people wanna try to rent their stuff from. 00:30:30.255 --> 00:30:50.865 If your rental property rents for$2,000 and your principal interest, taxes and insurance is$1,998, then lending one and other private lenders will lend to you because your coverage ratio 2,000 to 1998, you win, right? 00:30:50.875 --> 00:31:00.795 Depending on your experience, where the property is and a couple other factor and your credit score, we can get down to 1.0x the ratio. 00:31:00.795 --> 00:31:05.075 So like I said, if it's$2,000 and it's 1999, we can still lend on that. 00:31:05.125 --> 00:31:11.654 So it's just a useful tool that's a little bit different than the DTI loan, and it's focused really for investors, right? 00:31:12.494 --> 00:31:22.310 There's no limit on how many you can do if, as long as the, as long as you're acquiring rental properties that are going to cover the debt, we will lend to you in that entity. 00:31:22.941 --> 00:31:26.040 There's also no there's no credit requirements. 00:31:26.060 --> 00:31:27.820 Or excuse me, there's no credit reporting. 00:31:28.270 --> 00:31:34.661 There is a credit re- requirement, however, depending on where your credit score is, just the rate fluctuates, right? 00:31:34.661 --> 00:31:40.590 So we'll still underwrite you if you're a 640 or above, we'll still write a loan for you. 00:31:40.590 --> 00:31:42.421 But there's no income requirement either, right? 00:31:42.421 --> 00:31:46.221 So Yuriy, you could make$0 and 0 cents last year. 00:31:46.820 --> 00:31:50.851 You could just be getting into real estate investing, and we would still loan to you. 00:31:50.980 --> 00:31:53.070 So I hope I answered that question. 00:31:53.330 --> 00:31:58.320 I know that was a little long-winded, but I wanted to make sure that it was clear in the comparison between the two things. 00:31:58.691 -->

00:32:10.461 Both are good products, but DSCR loans look at the business entity, and we will only lend in an entity's name versus a DTI loan that is basically saying,"Hey can Yuriy pay this rent back?" 00:32:10.871 --> 00:32:11.230 Yeah. 00:32:11.250 --> 00:32:14.320 And to add to that some personal story here. 00:32:14.431 --> 00:32:17.211 Most recent personal story in lending world. 00:32:17.310 --> 00:32:24.421 I've been using DSCR loans for a while, and usually I either do commercial or DSCR. 00:32:24.441 --> 00:32:28.701 I rarely do anything in my personal name or do any financing in my personal name. 00:32:28.701 --> 00:32:29.921 Everything goes through business. 00:32:30.101 --> 00:32:43.881 But recently I was renewing my line, business line of credit with my local bank, and they told me like,"Hey, Yuriy, we have this new product for rental properties that you can get line of credit or HELOC. 00:32:43.921 --> 00:32:46.780 Basically, it's a HELOC, but for your rental properties specifically. 00:32:46.790 --> 00:32:47.111 Yep. 00:32:48.060 --> 00:32:52.471 And my first two rental properties that I ever bought, I still own them. 00:32:53.010 --> 00:32:57.790 They are in my personal name just because I didn't know better when I started. 00:32:57.961 --> 00:32:58.361 Sure. 00:32:58.421 --> 00:33:03.861 And they were or they are fully paid and free and clear, so I was like,"Sure, yeah. 00:33:03.871 --> 00:33:07.980 Let's do this." And that's not DSCR product. 00:33:07.980 --> 00:33:13.270 It's just the regular market, regular loan that will be on my credit. 00:33:13.881 --> 00:33:22.471 I was like, it never hurts to have a extra line of credit, so I submitted application end of February this year. 00:33:24.068 --> 00:33:27.709 I closed on these loans last week 00:33:27.979 --> 00:33:28.568 Oh, boy. 00:33:29.378 --> 00:33:30.429 June 15th. 00:33:30.949 --> 00:33:31.308 Yep. 00:33:31.699 --> 00:33:44.328 I have never, through my investment and property management and any real estate career, had to provide so much information about myself. 00:33:44.719 --> 00:33:58.888 I was telling them,"You literally know about me more than I do." They ask for so many things, and also the problem is when you're applying for a loan like that, people who collect your documents, they don't really know what they are. 00:33:58.929 --> 00:34:05.394 They just have check marks that,"Okay, we got this, we need this." And they kept asking for the same thing over and over again. 00:34:05.394 --> 00:34:06.019 Over and over again? 00:34:06.078 --> 00:34:06.439 Yeah. 00:34:06.528 --> 00:34:17.088 They asked me for every single mortgage note on every single property that I owe And I, like where do I get it? 00:34:17.128 --> 00:34:19.039 I don't even know where to find them. 00:34:19.039 --> 00:34:19.262 Yeah. 00:34:19.262 --> 00:34:20.728 I have many properties. 00:34:20.728 --> 00:34:29.358 I it just took me a while to come up with all the paperwork that they need, but also they would not understand a lot of this because most of it- was commercial lending. 00:34:29.869 --> 00:34:30.268 Yeah. 00:34:30.389 --> 00:34:41.179 And it just wouldn't click in their mind how it works, why it's here, why it's not here, why it's not reported on my credit, why it's not in my tax report, or why it's not in this company but in that company. 00:34:41.418 --> 00:34:46.648 And one of the problems that I had that was actually was a loan that I had with LendingOne. 00:34:47.028 --> 00:34:52.778 Because it was serviced by, yes, the loan is with LendingOne, but the service company is a different service company. 00:34:53.458 --> 00:34:56.759 They requested a statement from every single mortgage as well that I have. 00:34:57.599 --> 00:35:11.119 So they saw the statement with one name, but the note was a different name, and they kept asking me to provide them a letter of my mortgage sale from one entity to another entity. 00:35:11.739 --> 00:35:12.048 Right. 00:35:12.228 --> 00:35:17.039 So that, that was super frustrating and a long process. 00:35:17.059 --> 00:35:18.458 I was so upset with them. 00:35:18.509 --> 00:35:24.298 I have a good relationship with this bank for many years, and I personally know the branch manager. 00:35:24.809 --> 00:35:25.938 But I literally... 00:35:25.949 --> 00:35:34.429 And I'm usually a super calm person, but I almost yelled at them just because it was incredibly complicated to do all of that. 00:35:34.429 --> 00:35:46.869 And I feel pain of regular people who just go and get regular mortgages or line of credits, how complicated it is to get that compared to some commercial or DSCR product. 00:35:47.228 --> 00:35:55.429 So something that, Tim, you did not mention, that the time to close on a loan like this, it doesn't take you six months or five months or whatever it is. 00:35:55.438 --> 00:35:55.458 No. 00:35:55.789 --> 00:36:01.829 You can close quick, and you do not need to provide everything about you that you don't even know yourself. 00:36:02.139 --> 00:36:02.648 Correct. 00:36:02.648 --> 00:36:02.929 Yep. 00:36:03.108 --> 00:36:05.079 It's just a much, much easier process to do that. 00:36:05.599 --> 00:36:05.829 Yeah. 00:36:05.829 --> 00:36:06.849 Thanks for that call-out, Yuriy. 00:36:06.849 --> 00:36:07.188 Yeah. 00:36:07.268 --> 00:36:20.079 We, One of our, one of our core values at LendingOne is speed and ease, and we're not gonna be as fast as your local hard money lender who is gonna charge you a lot more points than we are and that your interest rate's gonna be higher, but they show up. 00:36:20.509 --> 00:36:23.628 You call them on Friday, and then they show up on Saturday with a bag of money, right? 00:36:23.679 --> 00:36:27.568 We're not gonna be quite that fast, but we can close loans in 7 days, 14 days. 00:36:27.619 --> 00:36:34.429 We get things done pretty quickly and it is not, It is not like having some sort of a surgical procedure. 00:36:34.639 --> 00:36:38.458 It can be quick and

you you just provide us an r- we do a credit check. 00:36:39.159 --> 00:36:45.989 We, you provide us your real estate schedule, and, if there's anything strange about your real estate stuff, we might ask you a question. 00:36:45.989 --> 00:36:51.659 I've got a Section 8 tenant that's a weird situation, and so we had to get a little bit of extra paperwork on that. 00:36:51.659 --> 00:36:56.588 But it's not asking for all that sort of stuff on where your mortgage is and all that stuff. 00:36:56.639 --> 00:37:00.619 It's, we try to get loans closed, not figure out ways how to not get loans closed. 00:37:01.528 --> 00:37:01.818 Yeah. 00:37:02.418 --> 00:37:08.469 So talking about the fees and different pricing structure rates right now are high, right? 00:37:08.498 --> 00:37:16.409 We're seeing high six, maybe low seven right now, Yeah depending on LTV and your credit score, of course, and the deal itself. 00:37:16.958 --> 00:37:27.304 So how do investors make- new acquisitions pencil out now with the rates like that compared to what we saw three, four years ago? 00:37:28.025 --> 00:37:28.425 Yeah, it's hard. 00:37:28.425 --> 00:37:29.974 I think you just really gotta get creative. 00:37:30.014 --> 00:37:32.724 You gotta think about different o- financing options. 00:37:32.724 --> 00:37:40.385 Like I said, we've got a couple of 10-year interest-only products that are still amortized over 30 years or over the last 20 then. 00:37:40.695 --> 00:37:42.385 Yeah, I, it, you just gotta... 00:37:42.844 --> 00:37:47.244 You have to have a ton of time looking at different deals'cause it's not... 00:37:47.505 --> 00:37:49.275 There's nothing I can do to change the numbers, right? 00:37:49.275 --> 00:37:54.635 There's nothing landlords can do to change the numbers, but if you're a real estate investor, you need to buy properties, right? 00:37:54.684 --> 00:37:57.994 Look at things like owner financing potentially, right? 00:37:57.994 --> 00:38:08.554 If so- if you have somebody who you know or who is a a person out there that you meet a- and you hit them with a letter or you hit them with a cold call or something like that, obviously owner financing is an option. 00:38:08.565 --> 00:38:11.295 Sometimes those, you can get those rates a little bit further down. 00:38:11.344 --> 00:38:16.054 You c- might be able to get a, some of the actual price down on the property if you do that. 00:38:16.054 --> 00:38:20.574 But you just really gotta get creative with different financing options. 00:38:20.965 --> 00:38:28.244 Like I said for me it's probably that 10-year interest-only loan, and then also just getting creative with what your strategy is, right? 00:38:28.264 --> 00:38:33.135 Maybe you just are a buy-and-hold person and you've never done a flip before. 00:38:33.184 --> 00:38:35.715 A flip comes your way, you gotta take a peek at it, right? 00:38:35.804 --> 00:38:39.885 Be willing to be, to adjust a little bit of your strategy here and there. 00:38:39.885 --> 00:38:46.525 I'm not a new construction guy, but this deal came by my way and built a new house. 00:38:46.534 --> 00:38:52.034 Just it, the numbers made sense and I w- I was flexible on what I wanted to do. 00:38:52.034 --> 00:38:54.664 I had a little bit of that experience in some other spaces. 00:38:54.664 --> 00:38:59.994 And so I think again, you just gotta really be flexible and be open to- Yeah to, to different options. 00:38:59.994 --> 00:39:01.324 What are you looking at differently? 00:39:02.264 --> 00:39:06.954 I'm buy-and-hold guy, and I always say that I never sell, I buy. 00:39:07.315 --> 00:39:07.625 Yeah. 00:39:07.625 --> 00:39:18.244 And but again, with the weird market that we've been seeing for the last year and a half last year I had a deal that I was very excited about, which I think I did with LendingOne as well. 00:39:18.784 --> 00:39:33.795 But during the deal I realized that it would not make much sense to have it as, or to hold it, just because it turned out to be in a area that was way more expensive than a regular hold for me. 00:39:33.804 --> 00:39:46.324 And, Yeah the renovation that I've done to it was quite nice, and just the price that I could sell it for versus what I could rent it for didn't really sit well with me, so I decided to sell it. 00:39:46.724 --> 00:39:47.034 Yeah. 00:39:47.364 --> 00:39:50.025 And I do not know if I would do that again. 00:39:50.065 --> 00:39:58.494 I was very upset when I was doing my taxes this year after selling that property, and that was my one and only flip that I've ev- ever done. 00:39:59.065 --> 00:39:59.224 Yeah. 00:39:59.224 --> 00:40:00.414 I don't really wanna do it again. 00:40:00.425 --> 00:40:14.125 But to your point you need to be flexible, and you need to know when deal works or when it doesn't work, even if you need to sell it, if you buy and hold, or the other way around, if you want to sell, but if you need to hold it for a few years. 00:40:14.135 --> 00:40:14.155 Yeah. 00:40:14.594 --> 00:40:16.125 That might make sense. 00:40:16.215 --> 00:40:30.235 And also I see that a lot of people have a lot of equity sitting in properties that they've bought years ago, or maybe they got through family or whichever other way that are free and clear. 00:40:30.894 --> 00:40:38.465 Are they able to use DSCR loans to cash out, just basically pull out that equity to go and do something with it? 00:40:39.135 --> 00:40:39.824 Absolutely. 00:40:39.925 --> 00:40:40.755 Absolutely, yeah. 00:40:40.755 --> 00:40:46.565 And our rates are really at this point right where banks rates are right now, at least this week and last week. 00:40:46.875 --> 00:40:48.735 And so yeah, you can do a number of different things. 00:40:48.735 --> 00:40:53.085 One, if you have a several properties, we do what's called a portfolio loan. 00:40:53.545 --> 00:40:55.054 And so you can have one payment. 00:40:55.695 --> 00:40:57.485 Everything is combined into one. 00:40:57.664 --> 00:41:04.775 So if you've got

a couple of great functioning properties and one that's not, you can roll those all into one and then pull money out. 00:41:04.784 --> 00:41:06.784 You can roll things into a DSCR loan. 00:41:06.784 --> 00:41:09.425 You can roll things into 10-year interest-only DSCR loans. 00:41:09.434 --> 00:41:14.545 Like DSCR is a really great way to refinance and recapitalize and try to go back out there and buy some more. 00:41:14.945 --> 00:41:21.907 So I think every, you know- Everybody's getting frustrated right now out there trying to find deals,'cause it's hard. 00:41:21.907 --> 00:41:26.956 So I think there's gonna be some people that are gonna be giving up here soon and, or probably already have. 00:41:27.317 --> 00:41:29.766 And there's gonna be opportunities, I think, in the next year. 00:41:30.146 --> 00:41:33.007 So I think you wanna be primed and posit- positioned to do that. 00:41:33.007 --> 00:41:36.237 That's why I, like I said, that's why I refinanced a couple of properties myself. 00:41:37.166 --> 00:41:41.177 I used to be pretty big on BiggerPockets, like on- Yeah the forums. 00:41:41.177 --> 00:41:43.706 I would go there, I would post, I would reply to people. 00:41:44.237 --> 00:41:54.896 And I just do not know if the use of online platforms changed and people do not use it that more, or that much anymore, or this is just the sign of the current market. 00:41:54.987 --> 00:41:56.527 'Cause five years ago it was hot. 00:41:56.567 --> 00:41:59.257 Everybody was buying, everybody wanted to get in real estate. 00:41:59.257 --> 00:42:03.836 I have some extra$100,000 and now I am real estate investors. 00:42:04.467 --> 00:42:06.666 Now I don't see any of that. 00:42:07.117 --> 00:42:07.476 Yeah. 00:42:07.556 --> 00:42:13.547 And I think that's connected to the market, what we see that it's not that easy. 00:42:13.586 --> 00:42:15.226 You need a little bit more money. 00:42:15.226 --> 00:42:19.217 You need to know what you're doing, and it's not for everyone. 00:42:19.536 --> 00:42:19.746 And- 00:42:19.786 --> 00:42:20.126 Yeah 00:42:20.206 --> 00:42:23.487 definitely not easy to find a good deal or a deal that makes sense. 00:42:24.067 --> 00:42:25.237 I 100% agree with you. 00:42:25.556 --> 00:42:26.786 100% agree with you. 00:42:27.237 --> 00:42:28.686 It was, We saw this kinda like... 00:42:29.036 --> 00:42:44.427 I was pretty young-ish, just graduating college in that 2008 to 2012 timeframe where it was, really 2006 to 2010, or 2008, excuse me, everybody with a pickup truck and a Bluetooth headset was flipping houses and making a bunch of money, and that... 00:42:44.427 --> 00:42:47.686 A- and it kinda f- felt a little bit like that again, right? 00:42:47.697 --> 00:42:51.427 It wasn't exactly like that,'cause obviously there were a lot of different factors there. 00:42:51.427 --> 00:42:56.297 But the last few years have kinda felt like everybody wanted to get in real estate, right? 00:42:56.297 --> 00:42:56.577 You're right. 00:42:56.577

--> 00:42:57.896 BiggerPockets is huge. 00:42:58.206 --> 00:42:58.967 Love BiggerPockets. 00:42:58.976 --> 00:42:59.706 Great place to learn. 00:43:01.025 --> 00:43:04.914 But if you really read BiggerPockets, it tells you how not easy it is. 00:43:04.934 --> 00:43:05.275 Not... 00:43:05.284 --> 00:43:07.925 But everybody was reading it thinking like,"Oh, this is so easy." 00:43:08.175 --> 00:43:08.614 Yeah. 00:43:08.704 --> 00:43:15.065 I had friends coming up to me like,"Tim, let's buy a bunch of real estate together." I'm like,"You don't know what you're talking about." So yeah, I agree. 00:43:15.065 --> 00:43:17.135 I think it's gotta take a little bit of a shift, right? 00:43:17.164 --> 00:43:21.054 There's gotta be some place somewhere where people are gonna be able to make a couple bucks off of it. 00:43:21.905 --> 00:43:24.494 So hopefully you and your investors are primed to take advantage of it. 00:43:24.494 --> 00:43:27.105 And yeah, I think your HELOC thing is a good idea. 00:43:27.144 --> 00:43:28.434 Refinancing something. 00:43:28.434 --> 00:43:29.485 Not at a crazy... 00:43:29.905 --> 00:43:31.614 you don't have to, you don't have to... 00:43:31.655 --> 00:43:38.824 if you own a property free and clear, you don't have to put it at 75% leverage, right? 00:43:39.144 --> 00:43:40.954 You don't even have to put it at 50% leverage. 00:43:40.954 --> 00:43:49.965 You can put it at 35% leverage and still be making m- monthly cashflow and have some extra cash to, to deploy if and when you need it. 00:43:49.974 --> 00:43:51.625 So th- think about that. 00:43:51.625 --> 00:43:52.804 If you own something and you're... 00:43:52.844 --> 00:43:55.855 Shit, if you only own 30% of it, or you own... 00:43:56.525 --> 00:44:06.380 If it's worth 100,000 bucks and you only owe 30 on it now, or 20 on it- You can still refinance that and not even have it at 75% LTV and still be making money on it. 00:44:06.391 --> 00:44:09.811 Again, be flexible, be prepared is what I would say. 00:44:10.831 --> 00:44:16.811 I would also ask even if you refinance at 75%, make sure that you still cashflow at that. 00:44:16.820 --> 00:44:17.141 Correct. 00:44:17.141 --> 00:44:17.150 Correct. 00:44:17.150 --> 00:44:17.181 Yep. 00:44:17.400 --> 00:44:22.460 You don't want to take everything out and then just put money out of pocket every single month. 00:44:22.931 --> 00:44:23.891 Do not do that. 00:44:23.900 --> 00:44:24.170 Absolutely. 00:44:24.221 --> 00:44:27.791 A DSCR loan will not allow you to do that'cause the mon- because it has to cashflow. 00:44:27.800 --> 00:44:31.050 So forgive me for not clarifying that specifically, but yes. 00:44:31.050 --> 00:44:36.371 Do not refinance to start losing money every month'cause that's gonna, that's gonna sink... 00:44:36.380 --> 00:44:39.751 It might help your tax bill there, Yuriy, but it's not gonna be fun monthly. 00:44:40.561 --> 00:44:41.021 Yeah. 00:44:41.061 --> 00:44:46.340 But also you need to make sure that you have something to fall back on when, you have that expense that you were talking about. 00:44:46.360 --> 00:44:46.391 Yep. 00:44:46.391 --> 00:44:53.010 Your HVAC breaks and you need to put 12, 15K out to just replace that on your... 00:44:53.021 --> 00:44:55.360 or you need a new roof and things like that. 00:44:55.371 --> 00:44:59.630 So- you do need to make sure that you have some kind of reserves for your- Reserves. 00:44:59.710 --> 00:45:01.251 Yep property to keep it running. 00:45:01.300 --> 00:45:11.510 We- Absolutely yeah we definitely had problems when landlords just did not have any reserves and they were not able to do repairs. 00:45:11.960 --> 00:45:15.670 And of course, as property managers, we cannot just go and pay ourselves. 00:45:15.670 --> 00:45:18.610 We- we need to use your money to pay for the repairs. 00:45:19.360 --> 00:45:26.130 And we had problems when tenants would complain to L&I and it, it would just become a huge problem for a landlord. 00:45:26.130 --> 00:45:34.260 They don't have money to fix it, tenants don't want to pay rent, and they start complaining to L&I, and now you're like sitting duck. 00:45:34.271 --> 00:45:36.960 You don't have money, and now tenants don't pay you. 00:45:37.101 --> 00:45:39.561 Now you don't even have money to cover your mortgage. 00:45:39.561 --> 00:45:40.590 So it's a nightmare. 00:45:40.831 --> 00:45:41.931 You don't want- to be in that position. 00:45:41.940 --> 00:45:55.641 You want to make sure that you always have some cushion for your, whatever it is, one property, 5 units, 15 units, you need to have that reserve that you can use to tap in if something were to happen, and something will happen. 00:45:56.121 --> 00:46:01.490 It- Always it may not happen in year one, it may not happen in year two, but it will happen. 00:46:01.971 --> 00:46:02.621 It's inevitable. 00:46:02.621 --> 00:46:04.001 100%, 100% of the time. 00:46:04.481 --> 00:46:04.840 Yep. 00:46:05.411 --> 00:46:11.260 And the more units you have, the more chances you have that something will go sideways. 00:46:11.820 --> 00:46:12.061 Yep. 00:46:12.400 --> 00:46:12.831 Agreed. 00:46:13.451 --> 00:46:16.260 Tim, this is great information. 00:46:16.351 --> 00:46:21.791 Is there something that I did not ask you about but you think that people need to know? 00:46:23.293 --> 00:46:25.583 I don't No, I think that was a great conversation. 00:46:25.583 --> 00:46:26.592 I think we hit a lot of things. 00:46:26.592 --> 00:46:28.652 I think I just go back to, be prepared, right? 00:46:28.672 --> 00:46:29.362 Be prepared. 00:46:29.432 --> 00:46:33.652 I know the market feels crappy, and it's easy to get frustrated right now, but be prepared. 00:46:33.853 --> 00:46:34.972 Whatever it is, be prepared. 00:46:34.983 --> 00:46:37.623 Have your team set up, have your financing set up. 00:46:37.963 --> 00:46:41.893 Be looking at as many deals as you can, and be prepared to pull the trigger quickly. 00:46:42.213 --> 00:46:44.202 And that's the

way to get a- to get ahead. 00:46:44.202 --> 00:46:52.943 If you're doing this passively, if you're, spending 90% of your time managing your properties and only 10% of your time looking for deals, you're gonna be behind everybody else. 00:46:52.952 --> 00:46:56.603 So I would just say be prepared and get on it, and happy hunting all. 00:46:58.373 --> 00:46:59.023 Sounds good. 00:46:59.023 --> 00:47:13.032 And if anybody wants to get in touch with you or reach out to LendingOne, lea- learn more about LendingOne I will drop a link in the show notes so people can just go to the link and get in touch and see what you can do for them. 00:47:13.503 --> 00:47:13.902 Awesome. 00:47:13.963 --> 00:47:15.402 Yeah, I know we do a lot of work in Philly. 00:47:15.413 --> 00:47:17.413 Thanks to you, Yuriy, and a couple other folks. 00:47:17.472 --> 00:47:19.893 So yeah, Philly and the surrounding areas, we'd love to hear from you. 00:47:19.893 --> 00:47:21.422 And, you can call us. 00:47:21.543 --> 00:47:25.682 My team is on our partnership side, Yuriy, if you give me a second just to pitch a little bit. 00:47:25.753 --> 00:47:26.103 Sure. 00:47:26.362 --> 00:47:28.452 We have a couple of dedicated loan officers. 00:47:28.452 --> 00:47:31.452 You're not gonna get round robin like you are someplace else. 00:47:31.463 --> 00:47:36.773 Our team knows investors, they know property managers and they're dedicated to our team only. 00:47:36.773 --> 00:47:39.583 So yeah, so we love talking about deals. 00:47:39.722 --> 00:47:39.893 Our... 00:47:39.913 --> 00:47:43.012 My guy, Edward, he walks through deals with folks nonstop. 00:47:43.012 --> 00:47:44.012 He walks through them with me. 00:47:44.032 --> 00:47:50.612 So happy to talk about deals, make sure they work, get a little cr- creative for you all, see if we can help folks make a deal work. 00:47:50.612 --> 00:47:54.282 So yeah don't hesitate to give us a call just to chitchat, even if you don't have something on the hopper. 00:47:54.913 --> 00:47:58.713 I actually just got another question for you, Yeah while we're talking about it. 00:47:58.773 --> 00:48:08.893 Having a property manager manage your property, does it help you to get DSCR loan, or do you like when people have property managers? 00:48:09.182 --> 00:48:12.543 Love it when l- It doesn't impact the underwriting as much. 00:48:12.592 --> 00:48:14.393 Our partners our... 00:48:15.202 --> 00:48:22.972 Anybody who is referred from one of our partners does get a little bit of a break on our fees, so it helps you in th- in terms of that. 00:48:23.262 --> 00:48:25.023 It does not help you in terms of underwriting. 00:48:25.023 --> 00:48:27.003 Again, we are just underwriting the asset. 00:48:27.333 --> 00:48:32.842 One thing I will mention, though, that might be related, I was describing the ratio for a DSCR loan. 00:48:33.112 --> 00:48:37.112 And it is rent divided by principal, interest, taxes, and insurance. 00:48:37.773 --> 00:48:41.072 We do not count property management fees against you. 00:48:41.822 --> 00:48:48.543 So if you have a property manager and they charge you X percent of your monthly rent, that is not built into the equation. 00:48:48.552 --> 00:48:51.362 So as you're looking at deals, keep that in mind as well. 00:48:51.362 --> 00:48:55.293 It's really just principals, incis ta- i- interest, taxes, and insurance. 00:48:56.362 --> 00:48:56.603 Okay. 00:48:56.663 --> 00:48:56.882 Yeah. 00:48:56.882 --> 00:49:06.393 It's real- I love it when there's property managers there'cause I know that it, their property's gonna be managed well, they're gonna be getting a lot more rent than typically other folks, and the property's gonna be taken care of. 00:49:06.402 --> 00:49:07.043 I love it. 00:49:07.092 --> 00:49:09.873 It doesn't necessarily change the underwriting process too much for us. 00:49:10.913 --> 00:49:11.932 Yeah, that makes sense. 00:49:12.362 --> 00:49:14.152 Thank you, Tim, for a lot of information. 00:49:14.152 --> 00:49:17.512 I hope this is useful for our listeners. 00:49:17.762 --> 00:49:20.492 This was exactly the kind of conversation I wanted to have. 00:49:20.492 --> 00:49:29.682 Someone who has been in the trenches of property management at scale, and now can speak on how the financing side actually works for investors trying to grow in this market. 00:49:30.072 --> 00:49:30.992 Really valuable. 00:49:31.012 --> 00:49:32.532 Thank you for being here, Tim. 00:49:33.003 --> 00:49:33.992 Yes, absolutely. 00:49:34.023 --> 00:49:34.512 Thanks, Yuriy. 00:49:34.952 --> 00:49:44.432 For everyone listening, if you like today episode, and if you want to learn more about LendingOne or connect with Tim, click the link in the show notes. 00:49:44.773 --> 00:49:54.282 If this episode was useful, leave us a review, share it with a fellow investor or landlord in Philadelphia, and subscribe so you don't miss the next one. 00:49:54.603 --> 00:50:00.012 Until then, keep your properties clean, stay legal, and I'll catch you in the next episode