BRRRR-ing to 16 Rental Units (WITHOUT a Ton of Money)

Summary

Real Estate Rookie: BRRRR-ing to 16 Rental Units (WITHOUT a Ton of Money)
Episode Release Date: February 17, 2025
Hosts: Ashley Kehr and Tony J. Robinson
Guest: Seamus

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Introduction

In this enlightening episode of Real Estate Rookie by BiggerPockets, hosts Ashley Kehr and Tony J Robinson sit down with Seamus, a seasoned real estate investor who has successfully grown his portfolio from a single property to 16 rental units using the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) method—all without substantial initial capital. Seamus shares his journey, insights, and strategies, providing invaluable advice for novice investors looking to embark on their real estate investment journey.

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Seamus’s First Real Estate Deal

Seamus begins by recounting the origins of his first real estate venture. It all started in 2014 when his brother, as part of a college project, identified a gap in the off-campus housing market near Union College in Schenectady, New York. Recognizing the opportunity, his brother pitched the idea to Seamus, another brother, and their father. This family collaboration laid the foundation for their real estate endeavors.

Seamus (00:40): "We can take this outside of just school. I think we could invest in Schenectady right near Union College and make a really big impact."

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The Power of Partnership and Family

The collaboration with family members proved pivotal. Seamus emphasizes the strengths each partner brought to the table: his father's expertise in residential construction, his brother's sales acumen, and the combined financial resources. This synergy enabled them to tackle their first property—a duplex purchased for $40,000—and set the stage for future investments.

Seamus (07:06): "I'm very glad that I did. I think it's unique when you're, you're talking about family because I since have branched out and I have properties that I own just myself. But having the expertise and help on the conviction is just wonderful from partners."

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Building and Expanding the Portfolio

After successfully renovating and renting out their first duplex, Seamus and his family swiftly expanded their portfolio. They capitalized on their growing reputation in the community, enabling them to acquire additional properties at discounted rates. Over time, this strategic acquisition led to a total of 16 rental units, demonstrating the effectiveness of the BRRRR method when combined with family partnerships and localized market knowledge.

Seamus (12:32): "The deals started kind of finding us, and our confidence just grew with every property we bought in that area."

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Community Building and Tenant Relations

A standout aspect of Seamus’s strategy is his commitment to fostering a strong community. By hosting events like hot dog cookouts and involving tenants in neighborhood activities, they not only enhance tenant satisfaction but also improve the overall appeal and safety of the community. This approach has led to higher rent prices, increased property values, and reduced crime rates around their properties.

Seamus (16:16): "We've had very few problems with neighbors. And so it's been really cool to see how that sort of effort has just had such a large payoff in the area."

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Funding and Financial Structures

Seamus discusses the financial strategies that underpin their success. Initially relying on personal HELOCs (Home Equity Lines of Credit) and pooled family funds, they established an LLC to manage cash flow according to each partner's contribution. As their portfolio grew, they secured a partnership with a local credit union, which provided favorable refinancing options and lines of credit, facilitating further expansion without over-leveraging.

Seamus (20:26): "We took out that full 140 and then we paid that back and then we had the other property as well that we had invested our own money into. And so then we were able to leverage that for the down payment of the next one."

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Sweat Equity and Property Renovation

Seamus highlights the critical role of sweat equity in their investment strategy. By personally overseeing renovations, they significantly reduced costs and improved property values. This hands-on approach not only maximizes returns but also ensures quality workmanship, which is essential for tenant satisfaction and property appreciation.

Seamus (36:16): "I think if you have those skills already or skills in your network, I think it's a fantastic way to get started. To just lower the barrier really to entry from that perspective."

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Technology Integration with TurboTenant

Beyond property acquisition and renovation, Seamus has ventured into real estate technology by co-founding TurboTenant, a platform designed to assist landlords in managing their properties efficiently. TurboTenant offers tools for vacancy management, tenant screening, rent collection, and more, reflecting Seamus’s commitment to improving landlord-tenant relationships and streamlining property management.

Tony J. Robinson (42:41): "What came first, the chicken or the egg? Did you start as an investor and then get into tech for real estate or vice versa?"

Seamus (43:19): "We were using spreadsheets, text messages. And then I met the founder of TurboTenant in a coworking space... my life went from real estate on the side to now it's all real estate, it's all landlord and property management focused."

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Conclusion and Key Takeaways

Seamus’s journey underscores the importance of strategic partnerships, community engagement, disciplined financial management, and leveraging technology in real estate investing. His success story serves as an inspiring blueprint for rookies aiming to build a sustainable and impactful real estate portfolio without the need for significant upfront capital.

Key Takeaways:

• Partnerships: Collaborating with family or trusted partners can pool resources and expertise, reducing individual risk and enhancing project outcomes.

• Community Engagement: Building strong relationships within the community fosters tenant loyalty, improves neighborhood quality, and drives property appreciation.

• Financial Discipline: Utilizing HELOCs and forming strategic alliances with local credit unions can provide the necessary financial support for scaling investments.

• Sweat Equity: Personally managing renovations can significantly increase property value and reduce costs, though it requires skill and time.

• Technology Utilization: Tools like TurboTenant streamline property management, allowing investors to efficiently handle multiple units and maintain high tenant satisfaction.

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Connect with Seamus

For those interested in learning more about Seamus’s strategies or exploring TurboTenant, visit turbotenant.com. TurboTenant offers a range of tools for self-managing landlords, including vacancy tracking, tenant screening, and rent collection, all designed to simplify the property management process.

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Notable Quotes

• Seamus (00:40): "We can take this outside of just school. I think we could invest in Schenectady right near Union College and make a really big impact."

• Tony J. Robinson (05:31): "The hidden power of partnerships in real estate investing is that communal confidence as you start to make decisions."

• Seamus (16:16): "We've had very few problems with neighbors. And so it's been really cool to see how that sort of effort has just had such a large payoff in the area."

• Seamus (20:26): "We took out that full 140 and then we paid that back and then we had the other property as well that we had invested our own money into."

• Seamus (36:16): "I think if you have those skills already or skills in your network, I think it's a fantastic way to get started."

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This episode of Real Estate Rookie offers a comprehensive look into building a real estate portfolio through the BRRRR method, emphasizing the value of partnerships, community involvement, and strategic financial planning. Seamus’s experiences provide a practical roadmap for newcomers eager to achieve financial freedom through real estate investing.

Transcript

[Ashley Kerr]

One way to get started on your investment journey is working with partners who combine resources and money and then use the BRRRR method to accelerate all that hard work.

[Tony J. Robinson]

And our guest today pooled money with his family to buy their first property, use sweat equity to get it to market, and has since built a small BRRRR empire.

[Ashley Kerr]

This is the Real Estate Rookie Podcast. And I'm Ashley Kerr.

[Tony J. Robinson]

And I'm Tony J. Robinson. And welcome to the show. Seamus, what's up, brother?

[Seamus]

How doing great, thanks. Ashley and Tony, excited to chat today.

[Unknown]

Yeah.

[Ashley Kerr]

Thank you so much for joining us. Can you give us a little story behind your first real estate deal?

[Seamus]

Yeah, absolutely. I know everyone's first deal is unique and they come to it from different places. What was really interesting for my first real estate deal, my brother actually brought it to myself, one of our other brothers, and my father, I'm the oldest of five kids, and he was doing a project in college where he had to create a business plan. And so at that time he was living off campus and he looked around and was seeing the need for just good, quality housing for college students and thought back to Schenectady, New York, which is right near where we grew up. And the opportunity there for off campus housing was super, super sparse around Union College. And so he did a little bit of investigation, created this whole business plan, submitted it into school for a grade, and then turned around on break and pitched it to myself, one of my younger brothers and my father saying, I think this would actually work in the real world. Right. We can take this outside of just school. I think we could invest, invest in Schenectady right near Union College and make a really big impact. And so that, that's really what kicked things off. And this was back in 2014.

[Ashley Kerr]

So what grade did he get on his project?

[Seamus]

So knowing my brother, my guess is not a great one. But he probably talked the professor into a better one afterwards. I'm sure he'll roll his eyes when he hears that, but that's a great.

[Ashley Kerr]

Life skill to have.

[Seamus]

Yeah, he's fantastic from a sales perspective, from a conviction standpoint, and as I wish I was half as likable as he is.

[Ashley Kerr]

So when you guys decide to actually go in on this first deal, what does the structure look like? Do you guys do actually put together an operating agreement? Is it a handshake deal? Kind of walk us through that process.

[Seamus]

Yeah. So it started with his paper was around college housing. Right. And so we looked at the area of Schenectady, New York, and GE was Headquartered there that one time. So went through a huge boom. Erie Canal is there. But then it really came down. And a lot of the areas went from these beautiful old structures to a lot of dilapidated. And so he first kind of pinpointed like, let's look at these neighborhoods right outside this campus as the target. And we had two things going for us. One, we really understood the space. Two, because of my father's background in residential construction, we had a lot of confidence that if we bought a place, we could actually fix it up and get sweat equity out of it. And so with that, we went in just 25% each of us, there's the four of us. LLC created a structure where we knew for the purpose of managing it and construction, we'd be able to pay individuals so that while we're all equal owners, that the actual cash flow would flow according to the energy people were putting into it. And then we started prospecting and we got really fortunate in that one of my father's customers, because he did a lot of work in the city that we were purchasing in, had a rental property, a multifamily available, a duplex. And so we said, perfect, we'll take this duplex, we'll do room rentals on it, we'll get six rooms out of this, and it will be the ideal place to start. And so we had a company formed, we had the target, we pulled together funds so that we could make the purchase happen. And then right around the time we were closing, Union College saw the same thing we did. And they actually went on the other side of campus and bought a whole row, basically a couple streets worth of properties and started fixing them up for the purpose of offering off campus housing. And so immediately what we thought was completely underserved environment changed drastically. We had to pivot pretty quickly. We still decided, hey, let's go forward, let's close. A lot of people need housing. It's not just the students on campus, but we had a pivot to using our personal network of people that needed places to live and then actually advertising at the local community college. But it turns out a lot of people still don't want to live with mom and dad while commuting, commuting to college. And so we are still managed to fill, fill the rooms. But immediately, like I said, it was right about the time of closing, it was like, there goes that plan, right? And we had to, had to pivot.

[Tony J. Robinson]

So Seamus, I mean, dude, like what a. First of all, you guys had the right idea, right? Because clearly the college like implemented your idea. It's maybe just the timing of it that was a little off, but good that you still had the, I guess like the backup plan of being able to pivot to the community college. Now, I guess a couple of questions come to mind for me. Right. So your younger brother comes to you with this idea. Do you do any kind of vetting yourself or is it just your knowledge of that area and kind of the skill set that came with your dad that made you confident and comfortable in this business idea? Did you like, was there any, I guess, like a deep analysis that you did on your own or was it kind of like a gut feel?

[Seamus]

Did kind of the typical of like, let's look at Zillow and what rental prices are, right? Let's, let's back these numbers out. I wasn't really familiar with real estate at that time. My life's completely changed since then, right. In terms of familiarity from that perspective. But I wasn't aware of a lot of the tools that exist today to actually do some of that, that research. Right. And so, yeah, we looked, we looked at, looked at Zillow. Really what it was though, is the conviction from my walking through the properties with my, with my brother and with my father and him saying like, no, we can fix this up. The bones are good. That's been the reoccurring theme as we've purchased and kind of done the BRRRR method is like, the bones of these properties are good. And once when I've heard that, it's like, okay, that, that, that makes sense. We're going to be left with a, a property that not only can we rent out, but is going to appreciate in value throughout that period of time. But no, I, I would say embarrassingly it was that those first deals were a very small amount of research that.

[Ashley Kerr]

Actually went into it with having not a ton of construction knowledge. And you partnered with your dad, who has that type of knowledge. What would be your recommendation to rookies as far as, you know, having four partners is a lot of partners or three partners, I guess. But four of you, what's your recommendation for giving up more of the pie? Giving up more pieces of the pie, Taking a smaller, like, sliver of it to actually make the deal happen. Was this something you are glad that you did or going back, would you have said no? I could have done this on my own.

[Seamus]

I'm very glad that I did. I think it's unique when you're, you're talking about family because I since have branched out and I have Some properties or a property that I own just myself. But having the expertise and help on the conviction is just wonderful from partners, and that's really expertise from a construction standpoint, the conviction of my brother. So another thing that happened as part of all this, as we started investing, my brother moved right into that neighborhood in Schenectady. And so he was living in the community that we were renting in. And so that was incredible. And so his continued conviction of, like, things are on the up and up, we're making a difference here. Right. People are not just treating the property correctly, but we're. We're serving them in a way that they. They're grateful for the housing. Right. Which was such a different feeling than most of the rentals in that area where tenants felt neglected.

[Unknown]

Right.

[Seamus]

They felt like the properties were run down. They felt like there was no reason for them to bother respecting the property because they weren't viewing themselves as being respected from the. The property managers or the landlords. And so that conviction of having other partners with different perspectives was so helpful. So I'm so glad that we all went into it together. Four people is tough. You have no tiebreaker. Right. Working with family is tough because you have to define, hey, are we talking to speaking as brothers right now, or are we speaking as business partners? Right. And those things crash together because you'll say things to siblings you'd never say to a business partner. Right. And when you're questioning decisions as a business partner, that's a normal practice. When you're questioning decisions for, you know, with a sibling, it can be taken a lot, a lot differently. So there's definitely challenges, but we're much better for it from that perspective.

[Tony J. Robinson]

I think that's the hidden power of partnerships in real estate investing, is that that communal confidence as you guys start to make decisions. No one ever retired off of their first real estate deal. Like, it hasn't happened. I've never met anyone who their first deal was like the best deal. They never had to do another one. The purpose of that first deal is to educate yourself, is to lay the foundation so you can do your second deal and your third deal and your fifth deal and your 10th deal. So for if for you, Seamus, like, the way that you built that confidence was like, hey, I'm going to do this with these three other partners, then that's what you need to do to get the first deal done. And I think sometimes we can maybe be shortsighted where we're only focusing on what we're losing by getting into a partnership and giving up, you know, X percentage of a deal and not always focusing on what we're gaining. So I just love that perspective that you took that you took into that first deal, Seamus. So we're going to keep going here. We've got to take a quick break first. But, but Ricky's before we move on. I just don't want anyone to forget the BPCON is in Las Vegas this year and and early bird tickets are out now. So make sure you grab your tickets now. When we come back, we're going to hear more from Seamus about how he started stacking these deals together. We'll be right back after this break.

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[Tony J. Robinson]

All right, let's get back into the show with Seamus. So after this deal, right, it seems like your family kind of got the real estate bug. Seamus, I guess. Can you share with us, like an overview of your next deals in that neighborhood and how you kind of snowballed into a few more?

[Seamus]

Yeah, absolutely. So the first property we purchased had some work to do, but largely was relatively cosmetic. Did room rentals. So we were able to fill it with, with six people. And then if you look directly across the street, there was uninhabited, dilapidated property just sitting right there. Another one of these old Victorian looking buildings that actually had was a duplex and was split level. And so we looked across the street and said, wow, if we could get our hands on that, it would be incredible because it's a huge eyesore in this community and it's hard to rent these out for the prices we believe that they're worth. Now that we've done the change with a property like that across the street. It also brought a lot of unwanted attention from people in the community. Right. That might want to hang out someplace that's unsupervised. And so my brother, because he was living in that community, was talking to all the people that own property in there and really opportunistically would just kind of continue to slip in. Hey, we'd be willing to purchase that. Right. And so it was a very personal form of canvassing, I would say, is what what he was doing in the neighborhood. And so it became available and we purchased it for just about $40,000, which is incredible for a duplex. Right. And the size of it.

[Ashley Kerr]

Some people in some markets have never even heard of that as a purchase price for a duplex.

[Seamus]

At this time, I'd moved away from upstate New York and was living where I do now in Colorado, and so came back and to see the property with my siblings and $40,000 was a stretch. Once again, I'll come back to that. The bones were good and I was really leaning on them being right that the bones Were good, because pigeons had been inhabiting this property. And so, no exaggeration, there's places of 2 to 3 inches of just pigeon crap in this. This property. And so we had to gut the whole. We had cleaned the whole thing out, Gut the entire thing. And it ended up being a longer process because construction always takes a little bit longer, A little longer, A little more expensive than we thought. But we turned it into a phenomenal house. And the huge benefit of doing that was, not only did we improve that, but we also got rid of the largest eyesore in the community. And so once we did those two things, and when you're there, you're doing the construction, you're outside, People take notice. They come by, they chat with you. My brother can talk to anyone. And so he was having conversations with the neighbors. And so we ended up buying three other properties on the same block. It increased the value of our house. It increased the appreciation the community had for us, because no one wants to live next to dilapidated properties. So even people that weren't our tenants, you, know, loved the fact they stopped by. In fact, the mayor even came by. The one property with all the pigeons inhabiting, it came by. Once we got it all fixed up, and it was in the newspaper as an example of, like, really neglected corner that no one cared about having, you, know, a fresh, fresh life. And so that was really successful for us. The deals started kind of finding us, and our confidence just grew with every. With every property we bought in that area. And so we're right now part of 18 Doors. Like I said. One of those is here in colorado. One of those. We opportunistically had a single family that was a little north of Schenectady, New York. But then the other 16 are all kind of right in that same exact. Same exact neighborhood. One aspect of my brother's original business plan that really followed through is our goal was that when we invested in a community, we'd find ways to incentivize. We thought they'd be college students, but incentivize tenants to participate in the community. A couple times a year, Typically around fourth of july, around halloween, we do, like, hot dog cookouts, where we'll bring out a grill. And since we have four properties right next to each other, we'll open it up and feed anyone in the community that comes through and hangs out, and we ask our tenants to actually come down and participate. Hey, do you mind manning the grill for this afternoon? And it's really been incredible, the amount of change in the neighborhood and there's an altruistic part, but from a strictly business standpoint, it pencils out because rent prices are going up, our home equity goes up, crime committed around our properties has, you know, completely, completely dropped. We've had very few problems with neighbors. And so it's been really cool to see how that sort of effort has just had such a large payoff in the area.

[Ashley Kerr]

That's really incredible. When I managed a 40 unit apartment complex, there was like a community room. And so every once in a while we do like order from Panera or something like that. And it's so inexpensive to, you know, just get some general catering, put it in there. But you get everybody to come in, they, you know, get to know each other, they become friends. So it really helps you as the property manager to not have to deal with less disputes, things like that, because it becomes more of a community. So yeah, that's awesome that you're doing that for the neighborhood there, for your block. Really cool payoff.

[Seamus]

During, like Covid, for example, where the community had about 60% of tenants were paying rent, New York really had some pretty strict lockdowns, right? Eviction moratorium. A lot of the incentive to continue to pay was kind of going out the door with some of the local legislation. And so, yeah, landlords were under 60% of their tenants were actually paying rent. We actually stayed above 90% during that period of time. And when it first started, the lockdown started, the first thing we did was send gift cards for local supermarket and our favorite pizza place in town to our tenants as soon as they paid that first rent. After some of the legislation came out that basically said there'd be no evictions and there'd be some rent forgiveness programs and stuff. And so we tried to just immediately incentivize them to keep going. And once again, like, it's awesome to see the change in the community from a business perspective. We've been paid back in a huge, huge way.

[Ashley Kerr]

There's such like a fine line as like an investor, like this is a business, like don't do anything extra, like this is your business. And then it's like, you know what? But this is actually customer service based also. And I think there's like just two really different people that are, you know, like kind of on either side of that line. Like you get into the bigger pockets forums and people will debate this forever as to what you should be, but it's really working out for you being more of a customer service based landlord. And that doesn't mean bending over Backwards. That's just providing perks for somebody to want to live in your property and to pay their rent.

[Seamus]

It's super easy. And that's, that is how we look at our tenants. And it's been really interesting how that experience has curtailed into my career. Building tools for landlords that are self managing and really helping to bring that level of customer service to more landlords as opposed to just the properties that I own.

[Tony J. Robinson]

And Seamus, we actually interviewed Miller McSwain back on episode 486 and he also talked about the power of co living. And it just aligns a lot with what you said. He would throw pizza parties for his tenants and you know, like ice cream socials and things like that. And it's just cool to see that there are other investors who are focusing not just on like the tenancy part, but really trying to build a community with the folks who are looking at their properties. And I think you exemplified that so well.

[Ashley Kerr]

One thing that I'm really curious about is the funding aspect. So how is it working that, you know, purchasing the deals and then the rehab. Is it your brother saying, okay, I need X amount of money for repairs? You know, I got to go to Lowe's today. Venmo needs the money. Kind of explain how you guys have been able to structure the finances with the four partners.

[Seamus]

Yeah. So from the, from the get go, we didn't want to have to create that kind of situation where it's this constant ask. We wanted to make it feel like a real business. Right. And so to do that you need a bank account that expenses can, can be paid out of. Right. And so we've leveraged personal HELOCs to start. So I have primary residence. And so I was able to do that and use that as a loan to our LLC and then, and then get paid back. That was a lot easier when interest rates were like zero. Right. That's a more expensive proposition now. But we were fortunate in the time that we did that interest rates were, you know, going back to the late 20 teens, interest rates were actually just dropping. It was getting easier and easier to do that. And so that actually is what helped us get things off the ground. Both myself, my father, being able to use actually personal lines and then pay them back also. Another thing, I'd only suggest when you have a high degree of certainty and confidence in the remodel process, how long it'll take, you feel pretty good about the bids that you've got so that you're not in a situation where you're Leveraging yourself and you need another 10,000, 20,000, $30,000 at any given time. But that helped us to start and then we created really good partnership with a local credit union. We went to all the banks in the area, and it was a local credit union that had branches in Schenectady. New York was excited about the revitalization. And I feel like we were able to pull up their heartstrings a little bit as well as show them a competent business plan. And that has helped us from a finance standpoint going forward. Both doing refi, you know, cash out refis for current properties as well as line of credit.

[Tony J. Robinson]

Yeah, Seamus, I just want to, I want to drill down on that because Ash and I have both talked about the power of working with the kind of smaller local regional banks and credit unions. And it sounds like you said I presented a business plan. I don't know if you can like walk into bank of America and give them like a business plan to say, hey, help me get this debt right. So when, as you were talking to these different lending institutions, who are you going to. How did you actually get to the point where you're presenting a business plan is you just walk in with it. Like, how did you get this in front of someone to actually give you the light of day?

[Seamus]

The first one, we, we didn't bother doing that. I mean, I think we talked to a couple of banks, right? And then we realized like, hey, we should, we need to do this out of our own, our own cash reserves and our own HELOCs. After, after that point, yeah, we'd go in, we'd ask to talk to, you know, a loan officer, give a little bit of a synopsis as to what we were doing. Sometimes you're, you're literally just doing that up to the teller, right? And then they're pointing you to a couch that you go sit on for who knows how long until someone talks to you. But as those conversations were being had, we just realized that the opportunity to talk to the same person every time, the opportunity for that person to literally be able to drive down the street and pass the projects we're working on felt so, so vital. Right? When I see that email come across, I know that exact person who's handling our loans and finances and the ability to interact and then be flexible has just been incredible. And yes, I have not experienced that through national branches or really in any other facet of banking, the ability to have kind of that personalized touch from the local credit union. And so, yeah, we've Been incredibly loyal because of that. We've shopped around a couple times just to make sure we're not missing out on an opportunity. But every time we come back to investing further in that existing banking relationship.

[Ashley Kerr]

As opposed to strength, it definitely makes it easier too because they still have a lot of your information. So from starting from scratch, trying to get someone caught up on knowing about you. I've had the similar experience with local banks that it's so much more personable, especially talking to one person. With the first time I ever did a hard money loan, there was literally like 20 different people working on that and it was the worst experience of my life, like not knowing who to talk to for what question. But as far as the business plan that you brought to the small local blink, what was in it and how can a rookie kind of replicate the same kind of plan?

[Seamus]

Yeah, so that we had the advantage because we realized that we were going to do the first ones ourselves without financing. Right. So we brought the rent roll and just showed them like, listen, this is, this is what we're doing today with our current, current property per room and then showed them the plan for the next property. Now for us, we were actually able, because I mentioned the one across the street is $40,000, so we were able to buy that one with cash. And then really we just needed the money for construction to start and then to do the refinance. And so that was another huge benefit because we were able to show like, hey, we're going to have the property immediately that we can put up for collateral, right. That will be paid free and clear from the business. And so then we just showed them timelines, expenses and then what we thought we could rent it out for once we got there. This is personally our net worth. This is the equity that we've created in the other property we already own in this llc. This is the money we've already as an llc, personally invested in acquiring this property that we need a construction loan on to start. And then this is our belief in the expenses to rehab and what it'll end up renting for.

[Tony J. Robinson]

Seamus, let me, let me ask when we, when we think about brrrr, at least for a lot of people, they think that the only way that you can really do a burr is if you get all of your money back out of a deal. Just really quick, how many, how many total properties had 16 in that, in that area right now, right?

[Seamus]

16 different doors.

[Tony J. Robinson]

Yeah, 16 different doors, right. So with those 16, do you know how many you're actually Able to do like a full burr where you left no money in the deal versus how many. You actually had to leave some sort.

[Seamus]

Of capital in those properties once we got things rolling. So exact point was probably around our fifth one. We got to the point where we weren't investing any of our own capital in. And so our original investment for that original house that we all agreed we weren't going to bother taking that out, that's in the company, that's original investment. And then we had money, personal money tied up in deals for three to four years in there before we acquired enough properties where it kind of supported itself to continue to do cash out refi and roll it over into the next one. So but, but even then there's been times where we use a cash out refi to pay, you know, for 60% of a purchase price. We then put personal money in and then are able to take that personal money out. But we haven't been in a situation where we're getting a initial, let's say loan to value of like 80% and then we're taking all that 80% out. We've been able to leverage the other properties. So the most kind of loan to value we're flirting with is 50 to 40% which is a lot easier than to get back out.

[Ashley Kerr]

That's great like to not over leverage yourself to actually pull out, you know, the majority or all of your money. So like kind of give us a breakdown of what we're kind of looking at for these type of deals as to you bought it for 40,000, what's the rehab and then what were you able to pull your money back out?

[Seamus]

That one specifically coming in at 40. We did about 140 rehab and then we were able the first then refinance. We did took out that full 140. We left the 40 in there, took out that full 140 and then we paid that back and then we had the other property as well that we had invested our own money into. And so then we were able to leverage that for the down payment of the next one. And not a process that would work if it wasn't for the significant amount of sweat equity we were able to build in these properties and the low entrance price. Right. And that's the other piece is we've looked to expand outside of that area that we also recognize.

[Ashley Kerr]

Well, I think there's a lot of things that you have mentioned along those that like have mitigated your risk too as far as there being the four partners too where you're each putting in some capital so it becomes less risky. Instead of one person, you know, funding $180,000 to do this deal all on their own too, is another aspect of it.

[Seamus]

Absolutely. We've not been in situations where if somebody needed capital for something like refinancing their own house and they needed to get their portion back, someone else hasn't been able to step in and subsidize. And I think that's the other aspect of that's where the lines probably crossed from business partners to family members, a willingness to do that. And it's been just another strength of our, of our company.

[Ashley Kerr]

So we have to take one final ad break, but we'll be right back after this. While we are gone, make sure you are subscribed to the real estate rookie YouTube and we'll be right back.

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[Ashley Kerr]

Okay, welcome back from our break. We are here with Seamus who has been giving us insight into working with his family in real estate. So Seamus, I have one kind of follow up to the funding structure and you had just mentioned before break about, you know, putting money in if someone else needed to pull their money out. Are you paying interest back to yourself at all or is it just purely you're investing capital and then you can pull your capital back out?

[Seamus]

We always pay interest on that capital coming out to ensure that, you know, if people take that risk, they're paid for it. Now the first couple times that was a delayed payment. But now when we do that, we're always paying off interest. And we'll do some creative things in that we have a line of credit in the business. Right. And one thing people don't, I think, take advantage of is a lot of times banks and the credit union we work with will have these introductory rates and these different specials they run at different times a year. And so what we'll actually do sometimes and they're only on new draws. And so at times we'll pay back things 100% out of our own and then literally the next day pull it back out at a reduced interest rate. That's something we do on personal helocs. That's something that we've had the opportunity to do from a business perspective too. And depending on the facility you have, you don't have to pay new closing fees. Right. Because it's just a line of credit. So you're just paying the balance down to zero and then you're doing a new draw. And so we've been flexible in doing that, which once again has helped mitigate especially some of the interest rates you'd face today.

[Ashley Kerr]

We are going to have to have you back on. We always have people coming on and talking about credit card hacks, but not line of credit hacks.

[Tony J. Robinson]

Now, Seamus, you mentioned right before we went to break that. Part of the reason that you're able to be so successful with these burrs is that you're, you're doing a really good job of getting these properties at a discounted price, but then you're also putting a good amount of sweat equity into the properties as well. I guess. A couple questions on the sweat equity side first. Would you recommend that for everyone? Do you feel that that's still like the best approach for someone who's getting started? I guess we can start there first. Do you feel that's the best approach for rookies who are looking to get started?

[Seamus]

I think if you have those skills already or skills in your network, I think it's a fantastic way to get started. Right. To just lower the barrier really to entry from that perspective. I do think that a lot of people and I've talked to individuals that have, they don't have experience with that and there's one of two challenges they face. One is they're like, oh, I'm sure I can learn on the job. Well, it's like, well, you're learning on the job and it's kind of double costing you, right? That a. The, if the quality is not there, the. What you end up with is lower quality and doesn't appreciate as much and doesn't rent for as high. Also it takes longer, right? So you have a vacancy for longer and you're actually doing the work as well. And so I think people do that or they, they don't have experience and they say, okay, I'll gc it, right. And that'll be quicker. So I'll sub every portion out myself, but I'll be the general contractor. That in itself is a real skill set. That is not worth, I think, just winging, especially if you have a lot of personal finances kind of on the line and maybe you've, you've financed it with less flexible terms, right. You did hard money lending or something like that and you have a very tight timeline. I think that's an area where people just get into, get into hot water pretty quickly. So yeah, I don't think it's, I don't think it's for everyone.

[Tony J. Robinson]

Let me ask, are you guys still performing most of the work yourselves or have you started outsourcing any of that work yet?

[Seamus]

We're still performing a decent amount ourselves. We're also bringing in subs for a lot of, a lot of different aspects of it, which we weren't in the beginning. At the beginning, we were basically doing everything ourselves. We've created A really good network of subcontractors that can come in and tackle specific parts and really speed things up a lot.

[Tony J. Robinson]

Last question there. And then on this piece, Seamus, like if I'm a, if I'm a rookie, brand new, never done this before. I know you guys had the connection of your father and him kind of being in this industry, but sad dropped you into, you know, somewhere in Idaho, somewhere you've never been before. And I said, hey, Seamus, go, go build a team of subcontractors. Where are you going and how are you really validating whether or not those subs are good subs?

[Seamus]

Actually been in that exact circumstance here in Colorado, very far away from family and then that expertise. And so for me, we first started just asking individuals around our primary who they use if they have anyone to suggest. And then once we found people, so we did that, we've done the Google search and you know, at times of emergency where you just, you have water heater goes out, right? And you need something fixed. So we've done some trial and error there. But the one thing that I learned from my, from my father is once you have someone hold on to them. And so my wife and I do different things, whether it's send Christmas cards or holiday cards to subs that we like, make sure if they're, they're working. So I worked for my father for six summers going through in high school and in college. And you love the people that bring you out, you know, maybe a Gatorade or a Coca Cola while you're out working in the middle of the summer, right? Just those little things. And so we've tried to do all of those for individuals that, whether it's work on our property, work on our primary to make sure that when we text or we call, it's not that headache moment, right? It's the idea of like, oh, this is a good person, right? I don't mind helping this person out, kind of tug at those heartstrings. And so we really try to lean into that tipping really well, basically anything we can so that we stay top of mind. And I think that's really underutilized in that space where people look at the subcontractors that come and help them out is just a rotating set of human beings. And they forget that at the end of the day, someone's got to answer that phone call. And in thriving markets, they have their choice of jobs, they don't have to talk to you. And I think a lot of times, especially the people that are good at what they do a lot of times that's really missed.

[Ashley Kerr]

Tony's wife does a really good job with that. They have this contractor, Nacho, right is his name that they've had forever and like she'll bring him a whole birthday cake on his birthday, things like that.

[Tony J. Robinson]

Yeah, you got to take care of him for sure.

[Seamus]

I love that we had one of those individuals we've really tried to build up and make sure they, they answer. You know, if they see Natalie on the caller id, they pick up. We had a water heater in our, in our rental in Colorado 2 weeks ago I got the, the message a maintenance request at 7 in the morning and by 9:30 he was there and replacing the water heater. And what went from a lot. What would have been a lousy day for us even though we had to spend the money. Right. By the end of the day it felt great. Felt like I got this, you know what I mean? We're, we're taken care of. Our tenants are taken care of. And our tenants were more appreciative of the speed we reacted than had we had it not broken in the first place. Right. They missed out on warm showers before work, but they were so excited to come back from work to the property working. Right. That they're more grateful than if it had never happened. Which I think is, is one of the interesting aspects of providing that customer service, Ashley, that you were mentioning earlier.

[Ashley Kerr]

Now are you doing the property management for all of your units or is it just that Colorado one and is it your responsibility to tackle that? Maybe you can talk about the operations and how that works for your business.

[Seamus]

Yeah. So from a property management standpoint, they're all self managed. And so the ones in Schenectady, New York, my brother plays a lot a larger role. He uses Turbo Tenant, which is the software that I'm created. And so I'm a customer support rep for the software to some extent there. But those are all managed through that platform. And then likewise our one in Colorado. My wife actually has taken a real hands on approach to managing that, which is really awesome because I get to look over her shoulder and see how she interacts with the Turbo Tenant platform and get a lot of really good candid feedback from her as to how the tool set that I spend, you know, my day job building is actually working for landlords that want to manage themselves.

[Ashley Kerr]

So what came first, the chicken or the egg? Did you start as an investor and then get into tech for real estate or vice versa?

[Seamus]

So started as an investor, I started that we had the first property up and running like a lot of people, people that just get started. We were using spreadsheets, text messages. And then I met the founder of Turbo Tenant in a co working space. I was working for another tech company and we hit it off and it just felt like my professional, my lives were kind of colliding there and so I got the opportunity to start working on Turbo Tenant and have been in some capacity here for the last six, six years. So my life went from real estate on the side to now it's all real estate, it's all landlord and property management focused.

[Ashley Kerr]

For me it was the opposite. I started out working in property management, then became an investor. But I think if you can find a job that is in the real estate realm and then you're getting paid to do and also learning so many things, real estate, it's a great way for a rookie investor to get started in real estate or even just expand their knowledge if they're already an investor. So Seamus, thank you so much for coming on today and sharing your story of how you got started. Maybe one time we'll have to have your brother, your dad on and you know, get their side of the story of how they're active in the investing business. But thank you so much. Can you let everyone know where they can reach out to you and find out more information about you?

[Seamus]

Yeah, absolutely. So turbotenant.com is where I spend all my time during the day. It's a platform, free platform for landlords that are self managing the vacancy. So filling your property, screening your tenants, rent payments and throughout. So that's the best place you can reach me on the web.

[Ashley Kerr]

Well thank you everyone for listening to this episode of Real Estate Rookie. I'm Ashley, he's Tony and we'll see you guys next time.