← Real Estate Rookie
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- [00:00]
A
A $12,000 tax bill and 200 hotel nights later, Ross Elkhorn swore he'd never trade time for commissions again. Five years later, his house hacks fund his freedom and his side hustle pays for his first class flights.
- [00:15]
B
Today's guest proves that getting started really isn't as complicated as you think.
- [00:24]
A
This is the Real Estate Rookie podcast. I'm Ashley Kerr.
- [00:28]
B
And I'm Tony J. Robinson. And let's give a big warm welcome to Ross. Ross, thanks for joining us today, brother.
- [00:32]
C
Hey, thanks so much for having me, Ashley and Tony. This is a pretty surreal moment. Got to listen to your, both your podcasts from past five years and you know, I know we connected out at a in person event and I would have been kicking myself if I didn't come say what's up. So, yeah, really excited to dive into, kind of how you guys helped as well as just some strategies that I learned along the way. So excited to be here.
- [00:55]
A
Yeah. And we're excited to learn from you too, Ross. I, I want to start off with. You've said that 2018 split tax bill was your breaking point. What was going through your mind then and what did that moment teach you about actual wealth building?
- [01:09]
C
Yeah, absolutely. So I was a, just for some background, I was for 10 plus years a medical device and healthcare software sales rep. And as a lot of people know, you're very high commission based. And in 2018, had a really good year, was renting with three other guys in the Northern Virginia, D.C. area. And yeah, at the end of the year, saw how much I made, saw how much I owed in taxes. And then when January came around, realized I still had to stroke a massive check to the irs. And I was like, okay, what's going on here? Like, I invest in stocks, I invest right in index funds. I have the foundation in place from the beginning. But I had heard a long time that real estate was a great way to just shelter that. Um, and through different conversations that my partner and I, one of my business partners now and some of the properties had, he came from more real estate background. So we had been talking for a couple years and really after that it kind of paired with, you know, wanting to buy a house. And that's when really the mindset got going. And that's when I started to dive more into real estate. You know, reading the books, listening to podcasts, figuring out how do I save some money.
- [02:21]
B
Russ, I think one of the biggest things that people overlook when it comes to investing in real estate is the tax benefits. And you know, obviously There, there's a long term appreciation, there's the cash flow, which I think a lot of people understand. But one of the real unlocks in real estate investing and part of the reason that so many successful people who make their money outside of real estate eventually end up investing in real estate is because of those tax benefits. I guess if you know, like off the top of your head, what was like your, your tax bracket, you know, like, like what did that look like for how much were you actually spending in taxes?
- [02:55]
C
It was the highest amount. I think I, on, I think I had to stroke a check in January for 33 grand. And then we, we, we termed that. We had an inside joke with our friends. We would just say taxes because we're like, it's, it's stuck with me. Right? So that was what I had to pay outside of, I think it was like 175 grand on my tax bill. So I had made over half a million that year and it was, yeah, it was pretty insane. That was really eye opening where I was like, all right, I know I'm going to try to perform at this level over the coming years, which, that was my highest earning year. And now I think to myself, wow, there's some years where I've made less than that and I paid in taxes every year after. Right. So that's when it really was that wake up call. And that's, yeah, that, that's when I started to realize like I need to figure out a strategy to shelter this. And that was prior to thinking anything about starting my own business. Entrepreneurship. Right, Those things that was, I'm a W2 earner. I'm going to be a high commission sales rep for a long time.
- [03:53]
B
And Ross, I think it's an important point because especially for people who are high income earning, I think that there's potentially maybe more benefit for investing in real estate from a tax perspective and a long term appreciation than there is from immediate cash flow today. Because if you're making, you know, 500 grand a year, the cash flow you're going to, you're going to make from real estate is probably going to be negligible in the very short term. But the bigger benefit that you'll get is the ability to reduce your taxable income by half or maybe even more. And I know we'll get into strategies and things like that later, but it's just an important point that I want to call out because I feel that so much of social media today is just about cash flow, this and profits and all those Other things. But when you take a big step back, I think taxes are a big part of that. So how did your first exposure to real estate education shift your mindset from just kind of stacking money aside to actually starting to build that real estate portfolio?
- [04:46]
C
Yeah, so I think first it was just understanding the things that you mentioned, you know, tax benefits, equity buildup, long term having, you know, if you're owning those properties, having people paying down the loans, the mortgage. And it wasn't what is, you know, framed on Instagram and Tick tock that we get hit with ads every day about, right, go buy a couple properties, go chill on the beach, you know, drink, you know, my ties. That that's not how it is. So that is what got me thinking. And then if I could shelter that while on, at the same time investing, you know, in the stock market for some of those, some more risky, but more, you know, rewarding as well as, you know, index funds like that just built out a diversified portfolio. And that's really what got me thinking. And then I never even thought, hey, I'm going to have five properties, be a landlord. It was just, hey, I want to move to this market where it's very affordable. I'll buy one, maybe I'll rent it out. And over time, like, this is a growing market. And I, when I traveled as a sales rep, I always laughed and this is what got my mind going. And I think it goes back to, to, you know, my creative days when I was starting my entrepreneur journey, you know, knocking on doors, starting my grass cutting business. And I would see how it target yards. And this is a, you know, you can probably see the sales going on in my mind. But I would target yards that had high grass because I'm like, all right, they're lazy, I need to go cut their grass. And that's how people in the creative finance world, right, find deals. But that being said, when I was flying to and from DC To North Carolina, Northern Virginia had so many houses and there wasn't a lot of dirt. You're flying over Lake Norman in Charlotte. It was all dirt. And I'm like, oh my gosh, there's so much opportunity here. So that's when it kind of clicked that I need to figure out a way that I can move to a area that is growing and right. And there's appreciation, availability and there's prices are going to be lower and potentially cash flow. But that was kind of that long term mindset that really made it, made it happen.
- [06:44]
A
Now, Ross, during this time were you doing any kind of research on real estate or any kind of education? Was there some kind of aha moment for you? Maybe where you're like, this book or this podcast or doing this is like, I need to follow this.
- [07:00]
C
So, yeah, some of the first books that I started to read was my buddy who, you know, now we own two properties together, he said, hey, go check this out. Flip your future by Ryan. Ryan Pineda. And then there was also the ABCs of real estate investing. So that kind of just got the foundation going before diving into every single strategy. I know most people, you know, they. They let. They read Rich dad, poor dad. You know, I read that later just because everyone recommended it. But luckily my dad, you know, they were, hey, go invest long term, whether it's in stocks, whether it's somewhat in real estate, but they were more in the market, not real estate. So having my friend who's now my partner, kind of us having those conversations long term, giving those books, that's then. Right. What, what kept it going?
- [07:48]
A
So with this shift with your dad and then meeting your partner, was there any kind of mindset shift you had to have from your dad, you know, primarily investing into the stock market, and now you're kind of trying to adjust your mindset to real estate investing?
- [08:02]
C
Yeah, I think it was a lot of questions, right? It was just asking my partner, understanding, you know, what are the reasons, you know, behind it. And he had some family that were his uncles who had commercial buildings. You know, his parents had flooring companies. Like, they were really on the real estate side. So it was that blend. And it wasn't just saying, okay, I'm going all in. It was just diving deeper, doing the research, asking the questions, and, you know, over. And he had said, hey, they have all these buildings. This is how they do it. And it did have to change that mindset of, you know, And I think a lot of times people grow up and they are told one thing and they don't expand that. I think one thing that I always try to do is listen to what everyone else who's doing things successfully and study their business and study different areas. And that's where then that helped me, you know, get outside of that narrow mindset of, oh, I can make all money in stocks to, hey, real estate. Other people have done it. 90% right. Of millionaires are made out of real estate. So doing those kind of gave that leap and got me to start listening more and. Right. That's kind of what transitioned into that, you know, where we are now.
- [09:13]
B
Rosh you just made an incredibly important point that I hope every single person listening paid attention to. We all have well meaning, well intentioned people in our life who want to give us advice, but that advice is always based on their set of experiences and their worldview and, and their own successes and their own failures and their own fears. And sometimes the person giving the advice about becoming a real estate investor or building wealth maybe hasn't done that themselves and their advice is coming from a place of fear or place of man. I read this headline or I knew this guy once who knew this guy once. You knew this guy once who lost all their money in real estate. So I think it's important for Ricky's who are listening to filter out the advice that we get based on the level of experience that person actually has in implementing that advice. Right. And well intentioned advice can be bad advice. Right. Nothing about the person, but just make sure we can filter that out. So I appreciate you sharing that. I want to talk about your first deal though, because you started with what Ash and I think and what we highlight on the podcast oftentimes is one of the best ways for Rick investors to get started. And that's with the house hack. But yours was kind of unique because you, you bought this house hack via FaceTime, which I think might be one of the first stories you've heard of someone buying a property over FaceTime. So walk us through that story, Ross.
- [10:34]
C
Yeah, for sure. And before I dive into that, there is one point I do want to make just around what you had said, Tony, because I think it is very important if you are getting started, Whether in your W2 job, whether you're starting to invest in real estate. Like one of my favorite things to ask people who are successful, you know, who were 30, 40, 50, 60. Right. Different areas of their life, is what are things that you regret, what are things like mistakes that you made like, and talking to people who are successful because they could give you those advice and then taking that and not just trusting, right. The people who were your age, who you're going out to the bars with or you were doing this. Right. Or who weren't where you wanted to be. So always kind of putting yourself in the right room and asking the right questions. So that's a. I wanted to just touch on that.
- [11:14]
B
But yeah, Russ, really quick, it's a, it's a really good point. And, and I'm curious now from the folks that you've spoken with who have kind of guided you in this direction that you've Gone on. What was some of that advice? Like? Like, you know, enlighten our rookie audience with some of the same knowledge that you were able to get.
- [11:29]
C
I wish I worked less. I wish I invested earlier. I wish I traveled more. So what did I do when I was 23? I traveled as much as possible. That's why I have a travel company now. I invested all my money and I started my own business, went on my own. So I could obviously work a lot now but work less down the road. So I think it's just asking the right questions and building out that life that you want to. And that's a lot of the reason why a lot of, you know, people listen to the show is they want that financial freedom, they want that ability to go do what they want. And that's what real estate does provide.
- [11:58]
A
Now, Ross, with this first house hack that you found on FaceTime, was this in a different market as to why you weren't physically there?
- [12:07]
C
Yeah. So it was in Charlotte. So I was living in Northern Virginia. I remember very clearly I was down here. I had the North Carolina territory when I was a sales rep. So I was down here and I had a lot of friends. Half my friends moved from or moved to Charlotte, half moved to Northern Virginia. So I was watching the Alabama Clemson national championship game. My buddy said, hey, I bought my condo for 230 grand. And I'm like, oh my gosh, the crappy houses that the neighborhood that we live in are like 800 grand, what the heck? And I don't Wanna, I was 27, single, I was, I was like, I don't want to live out in the suburbs yet. I want to live in the city. So immediately my wheels got turning and I, he actually said, hey, my neighbor who is a loan officer is actually selling her, selling her property. Two bed, two bath condo seemed perfect, but there was an HOA cap for non rentals. I wanted to have the flexibility. Right. But the good thing is she was a lender and she then was able. I used her as my lender for my first property. She introduced me to a agent and when I came down for the next time I met the agent, we went out and toured different properties and I had said my budget was about 250 to 300k but as I did more research, started to realize, here's the good markets that you want to be in. If I have to pay another, you know, 50 grand to acquire that property, you know, I'll do it. And at the same time I was, while I was thinking through hey, maybe I get a three bed new townhome because then I can rent it out to a roommate, have an office because I work from home. I was also at the same time having conversations with people that I knew, like, and trusted, trying to figure out, hey, are there people, you know, who might need or who might want to rent? And it actually worked out very well that one of my close friends was like, yeah, actually I need somewhere to live for about a year or so while I look to buy a house. So that worked out great. He covered, you know, a third to almost half of the mortgage. And then it worked out where I got an office, I got my bedroom, he got his own bedroom. And that really gave me that confidence to buy. And yeah, I, I built that trust up with her and she kind of knew my buy box. And I just communicating with her said, hey, you know, if you find something, I trust you. We have the, you know, my buy box in place. If you say, yeah, let's do it, FaceTime me and, you know, I think the biggest thing, and I know we'll probably get to this is not having analysis paralysis, right? Taking action, I think is the biggest thing. And I see it so much from a lot of my friends where like, oh, I wish I bought in 20, 20, 20, 21. And they wait and then they got, you know, rate that's double what I got on two properties. Because kind of took that leap and said, it's going to work out. You know, I'm 30 years old and 30 years is probably going to be right more than it is now. So I think that's, that's probably that lesson is just taking action and not overanalyzing things. You know, when you have trust and you have, you've done your homework.
- [14:57]
A
That's great advice, Ross. So, so we went over how Ross took the leap, bought sight unseen, and it's going to pay off big. But how do you go from one FaceTime deal to negotiating a lakefront property and using 0% cards to fund furniture? We'll go over that right after a word from today's show sponsor.
- [15:19]
D
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- [17:12]
E
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- [17:42]
A
Okay, so Ross, after that first deal, you caught momentum fast. You started stacking properties and even buying land on Lake Wy. Let's unpack that next step. So how did that first property succeed? Success give you the confidence? And where did you get the capital to keep going?
- [18:01]
C
Yeah, so it gave me the confidence of, okay, Charlotte's a good market. Having conversations with other people, starting to Network with the right people and just continuing to have those conversations with my buddy who now is, you know, a partner on two properties of, hey, let's maybe buy something. My roommate moved out after a year. I thought, okay, why don't we try to go get another property and I'll live in it. We can house hack. And we both put 50% down. So went saw that property and actually around that same time it was brand new construction. Again, taking action, knowing this isn't an up and coming neighborhood. It's exactly what we want. We went under contract on that property. First time we walked through in a hard hat, got a great deal on it. So that didn't close for another nine months. But at the same time having that confidence was we were a lake family. So my grandparents had a lake house that we built a ton of memories on for 25 years. And I, I have a boat out on Lake Norman that I was like, you know what, if I'm gonna like have a forever home, I want it to be on the lake. If you're familiar with Charlotte, there's Lake Norman 25 minutes north, Lake Wy 25 minutes south. And Lake Norman is where MJ you also have the NASCAR drivers, like all the Hornets, all the Panthers players live. So it's a lot more expensive. It's also more saturated. So for me as an investor and someone who's trying to get a good deal, I'm like, okay, let me go to Lake Wy. It's also on the South Carolina side where there's the, the bottom 5% in taxes. So I'm thinking of that way strategically and just start to look at things. My same thing. Business partner who has uncles who have bought property, sat on it for five or 10 years. I had conversations with them. I had no idea what to look out for right in land. So they said, hey, here's the things you want to do, here's the questions you want to ask. These are the things you want to go through with your agent as well as the others, and then you can vet those things out. So going through that process, went and saw some, found a property that I really liked and threw out a low ball offer. It was, it was at 300 grand. And I said, hey, let's go 250. And I was. But it was during COVID so I knew that there was probably pressure on right the seller and it had been sitting there for a while, so I knew there was probably pressure on the seller to offload it. And I, you know, building that relationship with the agent understanding his priorities, why he owned it. Come to find out his son was the one who spoke too soon and threw back the offer. 250. And I was at a friend's wedding and I started laughing like there's no or.270. Sorry, encountered. And I just started laughing like, wow, this really worked. All right, let's go lower. And went back. And then he got kind of pissed and went, tried to go up 275. We landed on 270. But the funding piece came from again going back to building the right foundation was investing 10% of every paycheck from my Phillips account, from my W2. Each quarter we got or each time you bought, you got 15% off the stock. So I already knew I was walking into money at a 15 discount. And over that five year period that I was there, was able to double that stock. So I use that for 43,000 of the down payment and then took out a HELOC on the other, on the first townhome I bought to use as that other part just because I didn't want to get capital gains taxes from selling my stock since I was in that higher income bracket at the time. So there was a lot of pieces, but that's how I funded that. And yeah, I think it just, again, it was just like you got to take action. I get hit up by sellers all the time with mailers and, and text and all that asking for the property and yeah, some sometimes I want to text something funny back and I'm like, no, I'm just not responding because then they're just going to hammer me. So that's, that's kind of how I, how I got into it. Yeah, it's, it's been a great investment and you know, looking to build on it three to five years, you know, whenever we decide the time's right.
- [22:02]
B
So Ross, let me understand. So it's a, it's a single family home, but there's also land to build on it as well. Am I understanding that correctly?
- [22:09]
C
So it's just land. So it's three fours. Yeah. Yeah. So three fourths of an acre. It's about 130 waterfront. 130ft of shoreline. And it's waterfront in a cove on Lake Wy. So I saw that as right, it's going to be able to build on it. I think the cool part is, is there's another half acre next to it that the owner owns as well. But there was an easement on it. So he's been holding on to that now. And the agent now has come back to me and said, hey, are you interested in it? Because I could potentially build an ADU on that. And that's, you know, that's where the creative part of building those relationships comes into play.
- [22:46]
A
Ross, can you explain what an easement is and why you didn't purchase it at first because of the easement?
- [22:52]
C
I'm going to say I got to go back and it's, it's not, it's not great.
- [22:57]
A
Do you know, do you know what the easement like the restriction is for the easement?
- [23:02]
C
So you can't build a dock on that property. So that was one of the biggest red, not red flags, but one of the reasons I didn't buy it because I wanted to build a dock, build a house on it. But it's cornered next to it. But there was an easement from some water runoff. But if you were to purchase both lots, it doesn't matter because you could build an ADU on it. But to build your own home and not be able to build that dock, that's kind of where it could be a challenge.
- [23:26]
A
So that easement is for you to have water runoff onto their property.
- [23:31]
C
Yeah.
- [23:31]
A
Then for the land you own now. Yeah. So it makes sense for you to buy it rather than it'd be a lot harder to sell it to anybody else because you already have access to the property because of that easement. Yeah.
- [23:43]
B
So, Ross, what's the plan then? Because I know obviously it's like a kind of long term buy and hold, but at what point or maybe if I frame the question this way, what do you think needs to happen in order for you to say now is.
- [23:57]
C
The time to build when we want to move out of the city?
- [24:02]
We're a mile from the city and all our friends, so we're just kind of still at that stage of life and. Yeah, when, when the time comes being starting my own business. Yeah.
- [24:11]
B
So, Ross, just for our viewers that are, that are coming along with us, just give us like the 30,000 foot timeline of your portfolio. So you started with the house hack and just walk us through what happened from there to kind of where you are today.
- [24:22]
C
Yeah. So bought the first house hack 2019, went under contract on the second property in June of 2020, purchased the land in October of 2020, closed on that, you know, second town home that we went under contract in May of 2021. And then from there lived there, started renting out the first house as a long term rental. And then me and my you know, as my partner and I, you know, learned the ropes, you know, decided, hey, let's go and buy another property. When the market and rates went up, we saw it as a good buying opportunity and in October 2023 purchased a two bed, two bath condo and started to do medium term rentals. My wife actually had one. So when she moved in with me in January 2023, she actually started doing hers. So like I had been studying furnish finder, you know, being in the healthcare industry, knew that and started to do that strategy. And then her and I purchased the home that we're in now in February of 2024 and moved a mile up the street because we needed more closet space because it wasn't just me as a guy. And then we got a two and a half year old bulldog and we needed a little, little patch of grass out back for him to run around.
- [25:34]
B
So I think one of the big questions that we always get from our rookie audience is how do we structure the partnership? And you've taken down a couple of deals with someone else. How are you structuring the partnership and what conversations went into trying to identify the best way to structure that partnership?
- [25:51]
C
Yeah, so I think the first thing is you always mean, you always want to be aligned with your partner on trust. That's the number one thing. No matter what the numbers say, no matter, oh my gosh, this is a great deal. It's like, do you know, do you like, do you trust that person? Because this is a huge decision and even if they're friends, right. Do you trust that they're going to be, you know, if you're both type A and you're both really organized, like you might butt heads, but if one's really good at one thing, one's really good at another, like that's where it's a really good partnership. And you have to be able to have those candid, open, honest conversations because life changes happen. So that's probably the most important point before you get started because I've heard horror stories from people that I know, obviously you know, people in the business, so that's number one. But I think if you go back to like what I was talking about, these conversations started in 2016. Right. We didn't purchase our first deal until 2020. So those were those. We're learning, we're figuring out what's important to one another and we're seeing like we want to build a future together and yes, we're best friends, but at the same time, like we both know what One and another is good at and one another is not great at. So aligning those things. And just we had Tuesday weekly calls every single week at 5pm whether and he had a brand newborn daughter, a W2 job. Right like so we made sure that we were doing those things and we aligned it where even though we house hacked, we put 50% down each and then that's where we both were on the deed. And then for both properties. So loan loan was out in my name for the first one we had his name on the deed. And then from there, you know, if you wanted to roll into an llc, you could. There's a specific thing we can get into on that property since we're at a 2.75 rate that right. There's. There's sometimes they may not want you to but yeah there's. There's strategies of even if you have that partner, you know, do you roll it into LLC or how do you structure that? So happy to dive into. You know how we did that and everything.
- [27:52]
B
I mean I just appreciate that you started with before the structure just hey, here's everything that happened before we even had that conversation. And I think that's a point that Ash and I try and drive home often is that without the alignment, without the communication, without getting to know like and trust each other beforehand, it's hard to even have a good foundation for a partnership. And ideally you want to date a little bit before you jump into something. Like you said it was, it was four years of you guys going back and forth before you actually made the decision to buy together. And I do think that's the. The best approach. Now Ross, you, you've built a system around, you know, building your. Your business, but you've also got a really unique skill set when it comes to credit cards and points. And you found a unique way to merge your business and your credit card points in a way that I think more Rickies need to know about. So we're gonna go over what that strategy is after a quick word from today's show sponsors.
- [28:43]
D
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- [30:26]
E
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- [32:03]
C
Close your eyes, exhale, feel your body relax, and let go of whatever you're carrying today. Well, I'm letting go of the worry that I wouldn't get my new contacts.
- [32:13]
D
In time for this class.
- [32:15]
C
I got them delivered free from 1-800-contacts.
- [32:17]
A
Oh, my gosh, they're so fast.
- [32:19]
D
And breathe.
- [32:20]
C
Oh, sorry.
- [32:21]
F
I almost couldn't breathe when I saw the discount they gave me on my first order.
- [32:25]
C
Oh, sorry.
- [32:26]
A
Namaste.
- [32:27]
C
Visit 1-800-contacts.com today to save on your first order, 1-800-contacts.
- [32:33]
B
All right, so you bought some homes, you bought some land, but you didn't just stop there. You've actually pivoted, Ross, into working for yourself. And you've got a business around credit card points. And I want to talk about that.
- [32:45]
Credit card points. Maybe we can start with a quick definition. But how can a rookie investor safely use credit cards to finance things like renovations or furnishings without going into bad debt?
- [32:57]
C
Yeah. So there's two, there's two sides, right? If you're buying your personal home using a card to, you know, purchase those furnishings, you know, I always recommend depending on and this just depends on where you're at and level of spend. There's different cards. So one of the best ways to earn the most points is by a welcome offer. So if you have a $5,000 expense and you spend that, you know, in the first three months, you then can earn, let's just say it's 80 to 100,000 points. You're getting a big bang for your buck. If you're for another example, that's what I did when I bought my first town home is open Chase Sapphire Reserve. Because I was traveling a lot, you know, most my income go source travel. So I was able to earn that, you know, big welcome bonus. Another example, though, is from a, from a strategic standpoint and also not going into debt would be when my wife and I bought this house, we had just gotten engaged. You know, we knew we were about to pay a lot of money for A wedding. And right. Like for us we were putting down money that we again took action. We weren't even planning on buying a house. And the fact that we did and close within 60 days, like we weren't trying to bring another 10, 15 grand to furnish the property right then and there. So being able to Understand there are 0% interest credit cards that you can get. So my suggestion is don't go to whatever the furniture store, Home Depot, finance the card with them. Get the cards that have the right amount of points, whether that's Chase, Amex, Capital One, because those are the banks that you then can use those points to go transfer and Travel. But that 0% interest strategy is very key if you want to have just an additional float, you know, a little bit of leverage, those type of things to then not have to come up with that capital right then and there. And then you have to make sure one that you have the minimum balance paid off on autopay, you don't and that's really it. But if you miss that, then that money is due at that time. So just always make sure right that you have those things in place. So that's on the personal side and we happy to dive into the business side. And how my partner and I learned that, you know, how I help investors now, like those more strategic ways. But yeah, if you're wanting to do that, that's very simple on the furnishings. And then there's some other fun stuff that's coming out around mortgages, landlording, all that stuff that we can dive into.
- [35:20]
A
Well, I think too with a 0% interest credit card, not only just furnishing but rehab materials, that's what I've gotten the 0% cards for is to do the rehab and then either when I sell the property or I refinance it, I just pay the card off. And like some of them, like I think the most recent one I had done was like 12 months, 0%. But if you made like your on time minimum payment for like six months, they would extend it to 18 months. That's a really long time, especially if you're not doing a huge, huge project to be able to, you know, refinance or you know, sell the property to be able to pay that off before the interest kicks in on that, that card.
- [36:06]
C
I was going to say the renovation is key. Right. And if you're doing prime example, when we first moved into this home, we wanted to, you know, the other homes that I owned, you know, I bought on my wife wasn't there. So we Were sticking with the flat white paint. But when we moved in here. Right. She wanted to have the drenched all you know, same color. Right. Do it all which it looks great. But the re what we had to do is pay contractors with cards and we again when we had those expenses we had to decide how do we want to do that. So having that 0% interest was really key on the personal side. And same thing when we did when my business partner Mike and I did a rehab a light rehab floors, you know, cabinets and paint. Same thing we did the Chase Business Unlimited inc. Which is 0% interest. You were able to take get that hundred thousand dollar. Well $100,000 I wish 100k welcome bonus and points from Chase and then that translates into one business class flight worth $5,600 on Qatar Q Suites in a lay down seat that I just took in April on our honeymoon. So like that's where. Right. Maximizing and optimizing those is really key.
- [37:16]
B
Ross, let me ask because I think just hearing all these different cards you're throwing out, like I'm already overwhelmed. So what is the system or tool that you use to keep track of all of your different credit cards and the kind of bonuses or intro bonuses that you're on? How does someone do all this without losing track of everything?
- [37:33]
C
Yeah, for sure. So there's a couple tools but just to keep it simple for tracking, you have Award wallet and then you have card pointers. So award wallet, you can keep all your cards information. You have all your cards, you have the different points in there. And if you have different banks like Chase Capital One Amex or if you just have one, you can track it there. If you want it simple, stay with one bank makes it easy, right? But I recommend Chase Capital One Amex and then for bonuses offers all that card pointers, it's an app that you can go download. We've had we just actually released our podcast episode with Brooke who's a director of marketing there. She does a live demo kind of explains that on our podcast. So if you want to listen to that, go check that out. It's really helpful. And then a word wallet we have coming on as well. So those are just two simple tools to track. And then obviously you have your different bank apps. But yeah, it can get overwhelming at first. So I think it's always just like figure out again what's your budget, you know, what do you feel comfortable using it on. And if you just want one simple solution, that's totally fine. Don't. Again like real estate don't go down the rabbit hole on Reddit and shiny card object syndrome because you will dive into the, you will dive into the hobby very deep. But I think it's always again, going back to what's most important to you and what's going to fit your lifestyle the best.
- [38:56]
B
Ross, one follow up question for me because sometimes we work with, as real estate investors, we work with vendors who maybe don't invoice, you know, and maybe you're paying them from Zelle or Venmo or whatever it may be. And obviously I can't use Zell and use a credit card. Do you have a solution for folks that maybe aren't, from a vendor perspective, aren't sending invoices?
- [39:16]
C
Yeah. So we have a product integration with a company called Melio. So they, you can actually. So from a business standpoint, you can utilize that if you aren't, if you don't have an LLC or if you're doing it from a personal standpoint. There's one called Plastique, it's with a Q at the end and that's actually a couple of guys from Amex who created that one. But you can pay if you're just doing like a personal home for that. Like so the example that I use when my wife and I repaint our house, we use Plastique, if I have any, let's just say something goes down with a boat or something that's personal. Use Plastique, Melio for anything else on the business side and you get hit with a 2.9% fee. But at the end of the day, if I'm looking at that fee, the example that I used for the hundred thousand chase points to business class, right. I'm getting five, six, seven times my points. I'm not worried about that fee. Right. And if you're a business owner, that fee can be written off. So that's just another tax strategy that you can utilize. And for people who are doing more real estate investing, like we work with clients who, there's developers who have materials, labor, right. A lot of that where their vendors may not take card. So if you're doing some of those flips, rehabs, like that's where there's big money. And I mean I see people who are missing out on, you know, six figures, seven figures a year of doing that and just stepping in and making those minor shifts, you translate that into vacations for your family where you weren't getting rewarded at all. So it just comes down to asking the vendor or just figuring out what's the best way to go about this.
- [40:55]
A
You know, I was wondering about that fee. I didn't know how much that would be as I haven't used either of those companies or heard of those websites before. So I'm definitely going to check that out. But like, you think about it in like almost on any other payment platform, you're paying a fee anyways. Like, I pay a lot of my contractors through like a payroll. It's like gusto, but you can do 1099. And like I'm getting charged a fee anyways. Like I have to pay a monthly fee anyways to them to do that the way I pay my cleaners. I just found this out yesterday. I've only been paying them through this one software for two weeks, so hasn't gone through a full month yet. It's like a 7% fee they're charging me to pay my cleaners through this. And I'm like, okay, I gotta figure out if this is worth the convenience that it offers or change it to something else. But it's like that 2.9% doesn't sound that bad. I mean, how many people actually pay with cash for anything anymore? They're paying that fee anyways with markups that people do at different, you know, restaurants or retail, things like that. So everywhere you're getting charged.
- [42:02]
C
Yeah. And there's. Yeah, you'd be surprised how much, how many dollars sometimes are being missed. But Ashley, to your point, if you spend more on your, an established flipper or developer and you're starting to do more of that and you're spending over thresholds of, let's just say a million, we partner with Melio and have specific product integrations that you can then negotiate that rate down. Right. If they know you're funneling in a ton of money. Right. You. Right. We have the connections that we can make and say, hey, this person's spending, they're getting business, they're going to happily do that. And then also there's some strategies too where sometimes if you're already paying via ach, you could say, hey, I'm going to pay it with a card. And then you could also then go back to them and say, well, you know what, maybe I want to pay with ACH. Could you just take that 3% fee off? And then if they cut that 3% fee, go to Melio or Plastiq, pay it, you're coming out net even and you're getting Right. Six figures or however much you're spending on points. So there's different Creative solutions that, that you can do. Everything's negotiable as, as you guys know.
- [43:05]
A
I, I think like, another point to hit on this too is like, if you're gonna take the vacation anyways, you're going to spend that money anyways. But, like, why not get it way discounted, paying that 2.9% fee before getting at least minimum a thousand dollars. If you get the 100k bonus points plus whatever you spent to get that, you get those points on top of the. The hundred thousand. So, yeah, I love credit card travel hacking. It is. My family has been able to do a lot more travel than I ever imagined because of it.
- [43:38]
B
I am definitely not as advanced as you are, Ash, when it comes to the travel points. And like, as we're talking, I'm like kicking myself because my wife and I, we renovated a hotel last year and we probably spent 350k or so renovating the hotel. And we did it all with a debit card. And part of it was because it was a partnership. There were multiple people involved. And we had this new LLC that we had set up and there wasn't a credit card for this new LLC with all these partners. So like, hey, let's just put it all into the bank account. We'll swipe it that way. But afterwards it's like, man, I should have just like used my own credit card and reimbursed myself, you know? But I guess. Ross, let me, let me ask, right? Like, you have a partner on some of these deals. So how do you guys split the points? Like, what do you. What do you guys do with the points? If it's a partnership?
- [44:18]
C
Yeah. So at the end of the year, we just split them down the middle. So you're able to. So like, for Chase, for example, he's able to call them and say, hey, I want to, you know, send these to Ross Alcorn. Since that's a. We'll just. That's a business Unlimited Inc. If you have a Chase Sapphire Preferred or reserve, you can connect those and send those points to that other person.
- [44:42]
A
As long as they're like a member of the llc.
- [44:44]
C
Exactly. So I'm an. So I'm an authorized user on that card. So he opened the card. And that's a strategy too, is have one person open the card and then you can start to strategically align because there's things with. And we're going down a rabbit hole here. But with Chase, there's something called 524, where if you've opened five personal cards within 24 months. They won't allow you to. And that's for Chase only. They won't allow you to open another card. So when you start to get into the points game, you kind of want to figure out, like, hey, Chase is my bank that they give 0% interest cards. They have the best transferable points. Like, make sure you're doing that. That's. I've been solely focused on that. Now I'm getting more into other ones. But, like, those are some things. And you can do the same thing with Capital One and Amex. So, like, when partners, right? We have, you know, developers, you know, flippers, people that have partners, and at the end of the year, they say, hey, Ross, we want to go on a vacation. Whether that's a quarterly retreat, whether that's end of year, or we want to just take our families, right? Maybe it's not together. How do we mix? You know, how do we get those points to each partner? There's ways to strategically do that with people on those. So that's, you know, that's a little bit more advanced, but that's. That's another strategy. So there are ways to split it where it's not like, partner one gets card. All right, Ross, you're screwed.
- [46:04]
B
You don't.
- [46:04]
C
You don't get any points, right?
- [46:06]
A
AKA my partners. I'm the one that ties it up. I'm the one that I just have. Before we wrap up, Tony, I have one more, like, quick thing, real quick, is that I think that strategy also works really well where you can, like, divvy up the points as, like, say, you know, I'm my partner and I like, I have Hyatt status or something where, like, maybe he can take the. The Hyatt points and then transfer them to me if it's like our mutual credit card. But he was the main person that opened it. But, like, I have the, you know, the benefits or whatever that I could book it and stuff, too. So.
- [46:40]
C
And that's what's nice, too, if you're doing a partnership with someone that you're friends with and you like to take those vacations, like, we get to benefit from those. We got to go to Greece last year, right? We get. We got to go celebrate, like, next year, we want to do Turks and caicos for our 35th birthday together. So it's like, those are the type of things, right, where it's not just like, oh, we're getting the best deal. We're credit card hacking. It's like, no, they create actual cool memories and Ashley, like you said, you're flying business class lie flat to and from Europe.
- [47:05]
A
Yeah. My kids don't know yet, so it's going to be a surprise to them.
- [47:11]
B
I think the business idea, Ash, that we need to go out and execute on is just how can we get all the people that we know that do renovations to use our credit cards and then they just pay us the cash and we get all the points for their transaction. If we can figure that out, then we're set for life.
- [47:24]
A
I was just going to say, why don't you buy another hotel? I'll open a credit card in my name and you can just use the credit card. I'll get you a nice big credit limit spend on that credit card and you can go ahead and use it and it'll be like a private money lender.
- [47:38]
C
There you go. If you guys need and if you guys need business bankers to up the credit limits, let me know because I work directly with those and they can get those.
- [47:47]
A
Well, Ross, thank you so much for coming on today. We loved talking about your journey, your experience and the credit card hacking. Where can people find you and reach out to to you?
- [47:57]
C
Yeah. So you can just find me@itinerary boss.com. all my social medias, Itinerary boss. And then we actually have a free points and miles cheat sheet that's going to get you right how to start earning points, how to start redeeming, maximizing. And then it also comes with a transfer partner cheat sheet which shows you how to transfer those Chase Amex capital one points. And then it also has a multiplier where it really just breaks down each of the cards and you can decide which one's right for you. So we make it super simple. That way you can go do that and yeah, itinerary boss. And if you want to connect, that's where you can find me. Thanks so much for having me, Ashley and Tony. It's been great.
- [48:33]
A
Yeah. Thank you, Ross. I'm Ashley. He's Tony. And we'll catch you guys on the next episode of real estate Rookie.
- [48:40]
E
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- [49:34]
B
You'Re watching this, we want you to apply to be a guest on the Real Estate Rookie Podcast. That's right. Ashley and I are looking for amazing stories just like yours to be a part of our Real Estate Rookie Podcast. Now look, you don't need to be an expert. You don't need to have done thousands of deals. Even if you've done one deal, your story could help inspire the next listener.
- [49:52]
A
As a rookie investor. Especially if you just got your first deal. It is all fresh in your minds and you are the best person to tell your story. Give your experience on how you got it done to help someone else get their first deal.
- [50:05]
B
So head over to biggerpockets.com/guest if you want to be a part of our show again. That's biggerpockets.com/guest and we'd love to have you on.