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- [00:00]
Sponsor
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- [02:11]
Tony J. Robinson
Happy New Year's Rickies we hope you're taking time today to set up your real estate goals for 2025. Now, today we are bringing back one of our favorite Ricky episodes to hopefully inspire all of you out there to find amazing real estate deals this year. Now, we hope this episode inspires you.
- [02:27]
Ashley Kerr
My name is Ashley Kerr and I am here with my co host, Tony J. Robinson.
- [02:32]
Tony J. Robinson
And welcome to the Real Estate Rookie podcast where every week, twice a week, we bring you the inspiration, motivation and stories you need to hear to kickstart your investing journey. And sometimes we bring you data and tools and tips. And that is what today's episode is all about. So we've got an amazing guest, Ariel Herrera, and she's a data science by day, real estate investor by night, and she's going to give you some really cool tips and tricks about using data to be a better real estate investor.
- [03:02]
Ashley Kerr
All I want to say is happy Holidays and this is our present to you from Ariel. She is going to give you guys so much information that you are going to want to just sit down and start implementing what she is talking about to accelerate your, your business. This was also a Christmas present to Tony. If you are watching this on YouTube you will see Tony all smiles and distractions as he tries out every tool that she will suggest today.
- [03:36]
Tony J. Robinson
Yeah, at one point you'll, you'll hear my browser, my browser kind of crash because I've got so many tabs open from other tools that she, she's rattling off. But I, I want to give a shout out to someone that Love to say 5 star review on Apple Podcast goes by the username of Hammonds Famous and Hammond says a fountain of information every week. I've deep dived into real estate investing these past three years and I've been listening for years and this podcast always has great information that I can leverage in my life and in my real estate journey. So Hammond's fam, we appreciate you for supporting the podcast and listen for all of our rookies that are in the community that haven't yet left us an honest rating and review. Please do. It'll take you two minutes at most, but your review helps us reach more people and the more folks we can reach, the more folks we can help. And that is what we're all about here at the Ricky Podcast.
- [04:23]
Ashley Kerr
It will also be your Christmas gift to us so you can go ahead and write that into your, your review as to Merry Christmas or Happy Hanukkah, whatever you are celebrating this season in there for that we would love that. So let's welcome Ariel into the show and get right into it. Ariel, I want to start off with talking about your epiphany that you had sitting on a bus. Can you tell us about that?
- [04:54]
Ariel Herrera
Yes. So about four and five years ago, as I started real estate, my real estate journey, I was commuting in and out of New York City for my day job. And one day, as I was sitting on the bus around 6am, looking at the New York City skyline, I realized I did not want to do this for the rest of my life. Even though I achieved what my parents wanted, which was to go to a good school, get a good job, I was unhappy. And the reason being is that the time taken away from the commute, working full time, I wasn't able to be with my family as often. And when I was, I wasn't always present. So with that, I started to research what are the ways I can get out of the rat race? Right. And there were three things that kept popping up. One, start an Amazon business. Two, daytime stock trading. And three, real estate. So real estate was the one that spoke to me the most. So I dived deep into about nine months of research, listening to podcasts, reading books, and watching YouTube videos. With that, there was one consistent theme that I got from real estate was that there are people who have done this for hundreds of years with less resources than I have, less time, less money. So I thought, if they could do it, why can't I? And that's when I decided to make my journey into go into my first house hack in New Jersey. And at that stage, as I was analyzing my own deals, I realized, oh, my God, the data is everywhere. It's disparate. It's hard to actually analyze a deal quickly. And that's how I got my journey into real estate and technology.
- [06:29]
Ashley Kerr
So tell us about your background in tech. Give us a little bit more, and how you've actually progressed that into incorporating it with your real estate.
- [06:38]
Ariel Herrera
Sure. So my real estate, my technology journey kind of found me in that. I graduated at Rutgers University and Business Management. Never thought I'd be a programmer, but coming out of school as I was in my first job, I took a course that another employee was hosting in the middle of the day and really was just to get out of work for an hour. But in that process, I learned that vba, a coding language for Excel, can help automate tasks that you do every day in Excel, like a vlookup, or copying and pasting information. And I was mind blown. I was like, oh, my God, this task that takes me two hours a day. I could just code it and automate it within seconds. Sign me up. So from there started my journey in a data science space and as I start to analyze my own deals, I started to utilize web scraping APIs which I could get into to be able to leverage data to really understand the properties that I'm evaluating and analyzing them.
- [07:41]
Ashley Kerr
Before we get into more of your backstory and hearing about your investing journey, we are going to take a short break. This is a message from sponsor Intuit TurboTax Taxes was waiting and wondering and worrying if you were going to get any money back and then waiting, wondering and worrying some more. Now Taxes is matching with a TurboTax expert who can do your taxes as soon as today. An expert who gives your taxes their undivided attention as they work on your return while you get real time updates on their progress so you can focus on your day. An expert who will find you every deduction possible and file every form, every investment, Every everything with 100% accuracy. All so you can get the most money back guaranteed. No waiting, no wondering, no worries. Now this is Taxes get an Expert now on TurboTax.com only available with TurboTax Live full service real time updates only in iOS mobile app. See guarantee details@turbotax.com guarantees listeners I'm telling.
- [08:46]
Sponsor
You now, it's not every day you find a game changer like Rent Ready. They're not just stopping with just tenant screening. They've rolled out proof of income verification. Let RentReady handle the heavy lifting with automatic checks on financial stability and earnings. Plus with Plaid Certified reports, you'll have all the info you need right at your fingertips. RentReady is actually included in your pro membership at BiggerPockets, but if you're not a pro, they're offering a six month plan for just a dollar. How great is that? So visit rentready.com, that's R E N-T R E D I.com and use the code BPInvestor. That's BP like BiggerPockets Investor to get six months of rent ready for a dollar. Real estate it's been a cornerstone of wealth building for generations, but it's also often a major headache for investors. You got 3am maintenance calls, tenant disputes and property taxes to deal with. Enter the Fundrise Flagship Real estate fund, a $1.1 billion real estate portfolio built for you. We're talking about more than 4,000 single family homes in thriving Sunbelt communities. 3.3 million square feet of in demand industrial facilities, all professionally managed by an experienced team. With the Flagship Fund, you're tapping into real estate's most attractive qualities. Long term appreciation potential, a hedge against inflation, diversification beyond the stock market. Check, check, check. All of this without complex paperwork, massive down payments or soul sucking landlord duties. Visit funrise.com pockets to explore the portfolio. Check out historical returns and see just how easy it can be to add real estate to your investing strategy. Carefully consider the investment objectives, risks, charges and expenses of a Fundrise Flagship fund before investing. This and other information can be found in the Fund's perspectives@fundrise.com flagship this is.
- [10:22]
Tony J. Robinson
A paid advertisement when BiggerPockets started podcasting, no one thought we needed a store. But then books. So many books. Bestselling books, rookie books, partnership books. We needed the best real estate bookstore ever. So we chose Shopify. Shopify is the global commerce platform that helps you sell at every stage of your business, from the launch stage to the first order stage to the did we just sell out the whole store? Stage. Shopify is there to help you grow. Whether you're selling real estate, books or retro clothing, Shopify's platform helps you sell everywhere, online or in person. Now, speaking of online, did you know Shopify has the Internet's best converting checkout up to 36% better than other leading commerce platforms? And no matter how big you grow, Shopify gives you everything you need to take control of your business. And that's why we chose Shopify for the Bigger Pockets Bookstore. So sign up for a $1 per month trial at shopify.com bprookie all lowercase again go to shopify.com bprookIe now to grow your business no matter what stage you're in. Shopify.com BP Rookie so Ira, we've talked a little bit about the epiphany that led you into real estate investing. And then you had the shift in your W2 job that led you to data science. But before we go too far, right, like maybe in layman's terms, right. Talk to me like I'm a. I'm a fifth grader. What exactly is data science and how do you think that's helped you on your real estate journey?
- [11:54]
Ashley Kerr
Or just like you're talking to me?
- [11:56]
Ariel Herrera
Yeah, sure. So the exciting thing is that data is all around us. It's basically information. So say for a property, some data you might be familiar with is the size of a home, if it's a single family, number of bedrooms, number of bathrooms, for example. So you may want to look at this data, say on a spreadsheet where you have all that information. Now, you could probably analyze all properties in, say, New York City within a given spreadsheet. But what if you want to do that across all properties in the us A spreadsheet's not going to handle that. And that's where data science comes in. We look to derive insights from data, usually large scale of data, and to do that, we use programming languages like Python to do so, and ultimately create charts, visualizations and models to help understand characteristics about the data and what can happen in the future as well.
- [12:52]
Tony J. Robinson
I want to, I want to lean into that just a little bit more. Right. Because I think for a lot of new investors is that when they're starting out, one of the biggest questions that they have to ask themselves is, what city do I want to invest in? Or. Right. It's a big question that a lot of people just honestly never even answer because they're so overwhelmed. There's 19,000 cities across the United States, and trying to whittle that list down to something that makes sense for Tony or for Ariel, for Ashley, it's hard sometimes. So how did you, how did you leverage your W2 experience of data science and taking that list of 19,000 down to a few select cities that made sense for you to invest into?
- [13:29]
Ariel Herrera
Yeah. So I looked at economic factors such as job growth, population growth, unemployment rate, median household income, and some more to analyze a particular area to see if it's improving or if it's on the decline. And where I got those metrics from was from government sources like the US Census Bureau of Labor Statistics, and was able to aggregate that across cities to see it in one single view within a spreadsheet, and then be able to actually draw up charts and analyze which of these were ranking towards the top in their own categories and start to eliminate cities.
- [14:06]
Ashley Kerr
Do you think that a new investor starting out needs to be an expert in data science to analyze a market or a deal?
- [14:15]
Ariel Herrera
Not at all. Especially with tools today like ChatGPT that helps to aggregate and lift up information. You don't need to learn how to code, you can just know how to use the right tools at the right time to answer the specific questions. There's a lot of free tools like, for example, you could use Redfin, and Redfin has data section where you could download information on a particular market, understand if it's trending upwards, downwards in terms of pricing or if it's price drops, for example. And that can help to analyze a market without using code at All.
- [14:54]
Ashley Kerr
Can you give us an example of what you would actually type into ChatGPT? Like say you're looking at Buffalo, New York and just give us an example of what you would say and type in there to get information back.
- [15:07]
Tony J. Robinson
What person in their right mind would live in a city where it's negative 20 degrees everywhere? That's what I would type in ChatGPT about Buffalo.
- [15:14]
Ashley Kerr
I literally have two blankets on my lap right now.
- [15:16]
Tony J. Robinson
I'm freezing.
- [15:18]
Ariel Herrera
But yes, you could use ChatGPT and ask Buffalo, New York, new development and growth. And from there you'd get a synopsis of probably population growth as well as job growth. And the new development part I love to put into place because it will tell you if there are specific areas where there's new construction coming, maybe there's new luxury apartments in the area and that could also signal growth as well.
- [15:47]
Ashley Kerr
That's very interesting. A couple other resources that I've used before were Bright investor and neighborhood scout to actually collect data too. But before that I was searching every separate single website myself. You know, going to crime mapping, going to the GIS county maps mapping software, every little, you know, place I could find data from. But that is very time consuming. So I appreciate you giving us some insight on that of how to actually accelerate getting all of that information together.
- [16:26]
Tony J. Robinson
Yeah, chatgpt, they've, they've been like making some updates to, to their tool as well. So it's like 20 bucks a month, like their pro version or whatever it is. And now like you can upload data sets to Chat GPT and it'll like analyze it for you, it'll like automatically browse the web for you now as well. So like the tool's gotten really, really cool in terms of like the information it can, it can pull in quickly. So I think for a lot of rickies that are doing that initial research using a tool like Chat GPT to say like, hey, what are some, some markets across the country that have, you know, low crime scores and good population growth and that'll at least give you a good starting spot. So man, like the way these tools are progressing, it's pretty crazy.
- [17:06]
Ariel Herrera
Yeah, it is at a rapid pace. And actually my secret is actually not chatgpt exactly, but using Bard Google Bard. It's chat equivalent, but I find it a little bit more superior. And it also pulls in data from like Google Maps and the whole Google suite products. So that's actually my favorite one that I use and it's free.
- [17:24]
Ashley Kerr
Oh, awesome. Thank you for sharing.
- [17:25]
Tony J. Robinson
Yeah, we need to do like a whole episode on just like all the AI tools that are out there. I haven't tried bard yet, Ashley. Have you?
- [17:30]
Ashley Kerr
No, I haven't.
- [17:31]
Tony J. Robinson
Yeah, me neither. And you said it's free. Like.
- [17:33]
Ariel Herrera
Yeah, it's free. You just activate it on your Google account and you could start typing away.
- [17:38]
Ashley Kerr
Well, we know what Tony's doing the rest of the day. Holding a baby.
- [17:44]
Tony J. Robinson
Play with some AI tools. Well, so let's, let's go back to your journey though, Ariel. So you, you do all this, this data kind of collection and where, where were you living at the time when you first started? You said in New Jersey.
- [17:56]
Ariel Herrera
Yes, in New Jersey.
- [17:57]
Tony J. Robinson
Gotcha. Okay. You know, somewhat more expensive market. Right. New Jersey, New York, California, all these places, a little bit more expensive. So do you decide to initially invest in Jersey and if so, what data did you see that kind of supported that decision?
- [18:11]
Ariel Herrera
Yes. There are three things I was looking into, which was one, first, how am I going to invest? What's going to be my strategy? And New Jersey being an expensive market, putting 20% down on a 300k home. So $60,000 down wasn't viable for me at the time. So I started to realize that the strategy I could take was one where I would live in the property first and then rent it out after a year. So owner occupying it. So once I understood my strategy, the next step was where was I going to invest in New Jersey. Even though it's a small state, there's a lot of areas you could find. So I wanted to do a 50 to 1 minute, 50 minute to 1 hour commute into New York City. And there were two options there, train or bus. Bus can have traffic, so I chose train. I started to look at different train lines and what train stations and cities were, were near those train lines. North Jersey was too expensive, so that was x'd out. So the where ended up becoming on the east coast of New Jersey. There were three towns in particular, Woodbridge, South Amboy and Matawan that were most interesting. And then the last piece there was, well, what am I going to invest in? And I really wanted to invest in a duplex, but again, didn't have the capital to fund that. So I decided on a single family home. But I used data to be able to analyze properties that had an additional bedroom opportunity.
- [19:35]
Ashley Kerr
How did you do that?
- [19:36]
Tony J. Robinson
Yeah, yeah.
- [19:37]
Ashley Kerr
I mean when I think of it, I see like, okay, I'm analyzing a Zillow photo. Being like, no, could I turn that ruins an extra one. Like trying to figure out what the Layout is just from the photos. If, you know, somebody on my team going to look at it or, you know, on the mls. So please tell us more about that.
- [19:53]
Ariel Herrera
Yeah, so my agent that I used at the time was one of my friends, and I said, jeremy, this is getting difficult to go through Zillow property after property. Could you send me just a list of the properties in a spreadsheet from your view in the mls? So he sent me that, and what I was looking for were properties that the size of the square footage was larger than the number of bedrooms to see if there was maybe a dining room or some extra space, maybe an office nook that I can transfer into a bedroom in the future. So with that, I did, like, a quick calculation of square footage divided by bedrooms and found this one property that was about 1300 square feet with two bedrooms, which in the area I was targeting, I knew there could be possibly a third bedroom in there. So we went to visit the property, and we saw the master bedroom was facing the street, which is kind of unusual. And when we went upstairs to it, we saw that there were two closets on each end, two windows, and it looked as if it had been two separate rooms at the time. And looking back at court records, it actually was. So that was what initiated me to put an offer and ultimately go through with that property.
- [21:07]
Tony J. Robinson
I just. We got to. We got to pause there for a second. That is like such a ninja trick. I've never heard of anyone doing that before. Like, hey, I'm going to. I'm going to get an export of all of the properties and then just put a little formula in Excel that compares the bedroom count to the square footage. And then basically, you were just looking for properties that had, like, a really good ratio between square footage and bedroom count. That is awesome.
- [21:29]
Ariel Herrera
Exactly. Simple, but effective.
- [21:31]
Tony J. Robinson
Yeah, because, I mean, like, especially now, like, given where we're at, kind of like in the interest rate environment, like the. It's getting harder to find good deals, so you've got to get more maybe creative on the front end to find those deals that have opportunity to maybe add some additional value. And what you just described is like, that's something that every single person listening right now can do is just ask their agent for an export and then search and filter and do that little. That little trick. That was cool. I really like that. Sorry, the nerd in me is geeking out over that one. That was cool.
- [22:04]
Ashley Kerr
Usually you'll hear people talk about, you know, like, scrubbing the detail of the listing, the description and Looking for, you know, office or bonus room or something like that to look for an additional bedroom. But yeah, that is great insight comparing the square footage to the actual bedroom count.
- [22:22]
Ariel Herrera
Yeah. Multiple ways to go about it.
- [22:24]
Ashley Kerr
Yeah. You find this property and then tell us what happens next.
- [22:27]
Ariel Herrera
Yeah. So once we signed to the property, next thing was actually house hacking it. And what that meant was having other people live in the property alongside myself. So as my partner, him and I, as well as a family member. So my mortgage of eighteen hundred dollars, I was only paying six hundred of it. And that really helped to propel me to save more money for my next deal.
- [22:47]
Tony J. Robinson
I was just going to add some clarification there because I think a lot of times when people hear the phrase house hack, they immediately think like small multifamily, where I've got to go out and get a four plex or a triplex or a duplex. But you can house hack in a single family home. And I don't remember which episode it was. We interviewed Craig Kerlop and, you know, he authored the book on house hacking for bigger pockets. And he said one of his first house hacks, it was a single family home, I think. But he was like renting out every room in the house and, like he was sleeping on the couch, right? Isn't that what he said, Ash? Like, he was renting out every room and he was sleeping on the couch. So even if you go out and you buy maybe a big single family home, even if you're only one person, you can still house hack that. So I love that you took that approach once you realize that the small multifamily wasn't necessarily in your price range.
- [23:29]
Ariel Herrera
Yeah, 100%. And honestly, at first I was nervous about living with two boys. I was like, oh my God, this is going to be like a pigsty every day. But it wasn't at all. It worked out very well.
- [23:39]
Ashley Kerr
But you know what, there's no drama though.
- [23:41]
Ariel Herrera
Yes, exactly. Just sports playing in the background all day. That's it.
- [23:46]
Ashley Kerr
Okay, so after you got this first property in your house hacking, is this where you got bit by the real estate bug?
- [23:53]
Ariel Herrera
Yes, it was. So I wanted to continue investing. I wanted to live in the property for a full year, though. So I started to look at other investment opportunities that would be solely an investment where I put 20% down. And unfortunately, New Jersey being expensive, I started to look out of state instead and particularly looked at Detroit, Michigan, with the affordability for properties being lower as well. I had someone in my network who had invested there and kind of leveraged their knowledge. But what was really exciting there is I started to now get more in depth with my data analytics. So I didn't feel as comfortable at that stage asking the agent for just a download of the data because now I'm looking at like a wider scope since Detroit's pretty large. So with that I actually use web scraping and web scraping is copying information from the web, like as if you were going to Zillow and copying down the property address, bedrooms, bathrooms, but instead of doing that manually, you could do it automatically. So I was copying that information down and I started to start to get a little bit down on myself because the duplexes were a little bit out of my price range, about 150, 160, and I was looking to spend around 130. So I start to look at single family homes and I put them up in a chart. I want to see the distribution, so the characteristics about the data of the properties to see how many were three bedrooms, four bedrooms, et cetera. And I saw there was one single property that was five bedroom, two bath, single family. Like, okay, that's kind of odd. So I go to look further into that property at the description and long and behold, it says duplex. So in the description. So the agent actually listed it incorrectly and it was priced about 25k lower than the other duplexes. So I was able to make an offer in that case and get it accepted at a lower rate.
- [25:51]
Tony J. Robinson
Wait. So sorry, I just, I just want to pause and make sure I'm understanding what the scraping process was. So like, how did you scrape all of this? This data? Was it. Is there like a tool that you're using or like, like how do you. Yeah. What are the steps to do that? If someone wanted to replicate that?
- [26:06]
Ariel Herrera
Sure. At that time I was using Python to do so so programming language. But today it's even easier. You could use tools like browse AI, for example, where you basically screen record how you would manually go about the process, what information you want to capture, and then it will automatically get that data for you either when there's something new on the web page, or if you want to set it like every day, every week, I'll get that information and put it into a spreadsheet. But at that time I did do it with Python and I was able to get the information across the city for all properties listed on market in a spreadsheet to analyze.
- [26:45]
Tony J. Robinson
So Ariel, you're saying that this tool browse AI, like I can sign up for this Website, go to any website that I want, screen record the information I want from that website. And this tool using AI, machine learning, whatever, will pull whatever data I want from that website automatically?
- [27:04]
Ariel Herrera
Yes, exactly. And there's many tools similar to it.
- [27:07]
Tony J. Robinson
That's crazy. So like I could go to Zillow because this is like one of the things I've been thinking about recently and now I'm just like asking you selfishly for myself at this point. But we're looking to do more rental arbitrage and you know, part of the issue is like, man, there's so many listings for, for rents and like, what's a super easy way to kind of compare the short term rental revenue projections to the long term rental revenue projection? So that way I can kind of see what that margin is. And ideally I only want to reach out to listings that have more margin. So could I use Browse AI to like scrape all of the listings that are currently for rent and then also scrape like the revenue projections from like an air DNA and then compare those two things together? Like, can I set it up to do that or am I. Or am I thinking too, too far ahead now?
- [27:52]
Ariel Herrera
Yes, you could definitely set that up. And what's really cool about Browse AI is that they have readily available bots for Zillow as well. And I think Redfin too.
- [28:01]
Ashley Kerr
Oh, I know what I'm doing tonight.
- [28:06]
Ariel Herrera
Yeah, Just to add. It's no code and it takes about anywhere from 10 to 25 minutes to set up.
- [28:13]
Ashley Kerr
I better text Daryl to get me an Alani because it's going to be a late night. I'm just going to go into a big deep hole of researching all this and setting this all up.
- [28:23]
Ariel Herrera
So to get started, you could do it all without code using Browse AI. And there's actually videos that I have of tutorials where I take you from beginning all the way to the end of creating these web scraping bots all on your own within 20 minutes.
- [28:37]
Ashley Kerr
To set up, make sure you check out the show notes after the episode where we are going to link everything. If you get distracted and go to the show notes now, you may miss another amazing link that Arielle has for us. So make sure you wait until the end. But we will put them all in there. Thanks to our great producers and editors that will catch all of these amazing resources that we are learning here. And we know Tony has already have them all the web browsers open of each one, making sure he doesn't forget to go through it.
- [29:09]
Tony J. Robinson
I just, you know, I'm just, I'm just so surprised that, you know, Ash and I live, eat and breathe real estate investing and that neither one of us have have heard of this, this tool. Like there are so many things out there now that make it so much easier for the rookie investor to find their first deal. So, Ariel, thank you so much for like showing these tools to people that otherwise never would have heard of them before.
- [29:30]
Ashley Kerr
I want to say something about that real quick because I think that's almost in a sense, just like real estate investing is. When you're starting out with real estate investing, there are so many different strategies, so many different ways to make money that it's just like overwhelming with all the options. And I almost feel that's how AI is getting today, that it's so overwhelming with all of these different things and capabilities that you don't even know where to start or things that are available, things like that. Think about just on this podcast, all of these things that we have learned. Like, oh my God, you're doing what to this mobile home? Like, that's amazing. We didn't even know that was a thing. Like, you're still constantly learning so much and being educated of all these different ways that you can be make money and also be efficient and effective at running your business. So, Ariel, let's get back to your story now that we've got all these tangents that I'm sure there's going to be another one that me and Tony are wowed by and need to implement immediately into our business. So we left off that you were looking into Detroit. You were scrubbing for properties. So did you find one?
- [30:37]
Ariel Herrera
Yes, I did. So it was that property that was a five bed, two bath, listed as single family, but was actually a duplex and was able to get that at a discount of around 25k. Because of that.
- [30:50]
Ashley Kerr
The discount was 25k or you got the house for 25k?
- [30:53]
Ariel Herrera
Oh, no, the discount, that was okay.
- [30:56]
Ashley Kerr
I was gonna say, I mean, we have heard of like houses being cheaper in Detroit, but I was saying it's been a long time since we've had anyone say they got a house for 25,000.
- [31:05]
Tony J. Robinson
So you said it was listed as a duplex. So did you have to go in and do any work to it or was it truly already a duplex and I just listed it incorrectly?
- [31:12]
Ariel Herrera
Yeah, truly a duplex. I went to the county website just to confirm and it was, it was just listed incorrectly by the agent.
- [31:19]
Tony J. Robinson
Wow, that is insane. So you, you found two killer deals just by finding like little nuances in the data, which I think is super interesting. Yeah. And then just, I guess just one. One side question. Ariel. Like, a lot of people, I think have fear of investing out of state. And even more so people, you know, Detroit with some investing groups has like, a bad stigma. Like, were you not nervous at all about investing out of state for your second deal?
- [31:45]
Ariel Herrera
I was nervous and I went in person to get some boots on the ground just to solidify what I saw in the data. Because prior to I was looking@niche.com, which gives, like, overviews of neighborhoods, and I wanted to find a neighborhood in Detroit that was more so skewed of ownership versus renters, since usually there's pride and ownership. Maybe the lawn is more upkeep, less trash. And there was a neighborhood that I was particularly interested in, Bagley District in Detroit. And luckily, having boots on the ground helped me to confirm that's where I wanted to invest.
- [32:20]
Ashley Kerr
Let's kind of talk about your confidence in investing out of state. How did you build your team there and feel comfortable, you know, investing out of state? Because sometimes that is a. A barrier of entry for people is that they, you know, don't know anyone in a market and they don't trust a lot of people. What are some of the things that you did to feel comfortable and confident investing out of state?
- [32:47]
Ariel Herrera
Yeah, I read David Green's book, Investing out of State, and that really helped me because as someone who's very methodical, being like a data scientist, I like to have a checklist of what I'm doing. And I felt like that book was like my checklist in the back of my head. My mom, she was always like, I, why do you. Why are you doing this? Why are you investing out of state? Just sell the property you have. Sell everything. That's always her mindset, but at the same time, she holds me accountable to follow criteria. So she read the book too, and she was like David Greene said, to follow the step as well. Make sure you talk to your agent about these things, your lender about some other topics. So I think, like, properly screening my agent, my lender, meeting them in person as well, really helped me to feel confident and be able to invest in Detroit.
- [33:35]
Ashley Kerr
So you're starting to talk about. Before I rudely interrupted you, but you were talking about your. Your next market that you decided to focus on.
- [33:42]
Ariel Herrera
Yeah. So now It's March of 2020, and I've been able to save money by house hacking the property that was currently in. So I have some money Saved. And then the pandemic happens and a lot of people are moving to remote work. I selfishly had already been working remotely twice a week and I was like, ah, I wanted to keep the secret to myself. And now everyone's going to work remote, realize how amazing it is. And I thought though, there could be some opportunity here, right? Because like we always hear if you could invest in 2008 way long ago, you would be well off today. So I thought, even though despite this, what's going on in the world, maybe there's opportunity here. So there were two things that I noticed that I liked about working remotely. One thing was, or I guess an epiphany was weather. Like, if I could work anywhere, why am I working in cold New Jersey where I can't do things for six months out of the year? And sorry, Ashley, I know you're New York girl, but not my preference. So then the second piece was income. In my head I was like, if I could work anywhere and program anywhere in the world, why would I do it in a place where I'm getting income tax? If I move somewhere else, I could instantly give myself a bonus of 10 to 20k instantly just by leaving the state. So I thought if I'm thinking that other people would think that soon too. So April 1 is when my partner and I, he and I decided we were going to do whatever it took eight weeks, figure out a market, figure out a place to live and rent out our property on our own for the first time.
- [35:15]
Ashley Kerr
That's super exciting. So do you want to kind of give us some of the numbers on a couple of your deals?
- [35:21]
Ariel Herrera
Sure. Property that I have in Tampa, Florida, single family home, purchased it for 274k, put 5% down, was able to house hack it. So at that time, my portion I was putting myself was 550amonth. And when I ultimately rented it out, the whole house itself, it was at 2500. So my cash flow there was about 700 or so.
- [35:49]
Tony J. Robinson
Wow, that is amazing. I'm shocked right now. Like these are such good deals and the way that you're finding them are. It's amazing.
- [35:57]
Ashley Kerr
So what has been your favorite deal so far?
- [35:59]
Ariel Herrera
Yeah, my favorite deal was probably my property in Tampa, Florida in the Seminole Heights area. So at that time I'd already been living in the Tampa area for about a year. But I wanted to find an up and coming area so that I could really leverage having a house that appreciates and then be able to use that money in the future for maybe a future Rental property. And I was having difficulty at that stage because it was 20, 21. People were outbidding one another left and right. And, you know, a lot of people from the north who were coming with all cash offers. So I would be sitting in a meeting, I would get like a notification on Zillow new property met my criteria. But by the time I analyzed it at night, there was already people who saw the property and possibly already outbid me. So what I decided to do, analytics wise, is I paired my notifications that I got from Zillow with Zapier. So Zapier is a tool that allows you to communicate with different applications. And what I would do was every time I got that email, I would strip the email, take out bedrooms, bathroom, price and property address. I would then take that and then go to an API. So a way to get data externally for that property. Next step was automatically calculating cash flow through Zapier, just adding a couple of calculations and then the last piece there was sending myself a text message if it met my criteria. So now as a data scientist, I'm sitting in meetings throughout the day and I could just get a notification once the property in my criteria also met my certain cash flow metrics. And it saved me a lot of time down the line.
- [37:43]
Tony J. Robinson
You know, sometimes we interview guests.
- [37:46]
Ashley Kerr
If you guys are watching this on YouTube, you need to watch Tony's facial expressions.
- [37:52]
Tony J. Robinson
I mean, so like we use Zapier in different parts of our business, but I've never thought to use it to help with deal analysis. And that's, that's so, you know, you're so close to the problem sometimes you don't realize that the easy solution is staring you in the face. And like what you just shared is such a simple solution to, to be able to move faster when it comes to deal analysis. And a lot of that, that high level stuff, it is just kind of basic formula, right? And you know, you can kind of go in and do some nuances if you want to, but man, you know, sometimes we interview guests and we end up learning more. I think that even our, our audience does. I love this conversation. That's amazing. Ash, have you used Zapier at all before?
- [38:28]
Ashley Kerr
Yeah, but literally just like my national fuel invoice comes into my email, it gets filed into my Google Drive. That's it. Or just like filing stuff that the emails that I get regularly. But you use it too, right?
- [38:41]
Tony J. Robinson
Yeah, we use it, we use it quite a bit more. So on like the marketing side, but, but yeah, never for like actual deal Analysis, which. Yeah, that just like unlocks a whole new. Whole new level here.
- [38:52]
Ariel Herrera
Yeah. And the exciting part there was it was actually no code to set up. Pretty easy. Just using all of Zapier's readily available tools.
- [39:00]
Tony J. Robinson
Yeah. And guys like, for our rookies that are listening, hopefully you're not feeling like overwhelmed by some of the talk that's going on, because a lot of what Ariel said is like, yeah, you don't need to know how to code. You can probably watch a couple of YouTube videos, figure this stuff out. She's giving you tools that are literally just click the buttons you want to click and the tool is going to do what you want it to do. So just having the courage to go out there and start playing around with some of these things, I think gets you on the road to using them in the way that Ariel. Ariel kind of has here backtracking quite a bit. I don't know if we asked this question up top, but if you can just kind of set the table for us. Ariel, what does your current portfolio look like today?
- [39:33]
Ariel Herrera
Six units.
- [39:34]
Tony J. Robinson
And across how many different markets?
- [39:36]
Ariel Herrera
Four different markets. So New Jersey, Detroit, Tampa, and then Playa del Carmen.
- [39:41]
Tony J. Robinson
Playa del Carmen. All right, that one. Yeah.
- [39:44]
Ashley Kerr
Yeah. So did you do kind of the same market analysis, or is this because you want to vacation there? Tell us a little more about some sourcing that deal.
- [39:53]
Ariel Herrera
Yeah, similar market analysis kind of thinking. Okay, if everyone can work remotely now and they have the choice to work, say, out of the country, where would they most likely work? There's two options. Like, if you're going out of internationally, probably Canada or Mexico would be the top since they're still in North America. Mexico is warmer, so I thought more people would move down there. And I started to look at cities around major airports, so Cancun being one of them. I saw Playa del Carmen was a city that's had a lot of growth over the last several decades, and in particular, it was already growing as an expat hub. So I was going into the Facebook market, sorry, the Facebook groups, and seeing people communicate there about loving living in Playa del Carmen, the low cost of living, and some information about investing there too. So with that, I started to sync with multiple different agents to talk about new development condos that I could possibly invest in. And I was a bit wary at first because there could be scams investing abroad. So I read up a lot on that, and I made sure I went with a developer that already had completed 18 condo buildings. So I knew that there was already Backing and was felt more solidified to go through with that deal.
- [41:11]
Ashley Kerr
How did you finance this deal?
- [41:13]
Ariel Herrera
So I financed a deal initially with a down payment that I had from a 401k from a job that I changed through but I actually didn't have the rest of the money that I would need. So the deal was 160 put 60k down but I didn't have the 100 grand. I was like, well you know what, I'm going to figure it out as I go along. So it helped me to get creative. There were two things that I did. One, all the knowledge that I've had about analyzing a market and list building, I put that into courses which helped me to raise money for my deal. But on the second end was that house that I had in Tampa, Florida, that appreciated quite a bit. If in only a year I was able to get a heloc, so a home equity line of credit on that property to then pay off the rest of the Mexico condo.
- [42:02]
Ashley Kerr
And then you just used money from that condo to pay off your line of credit.
- [42:07]
Ariel Herrera
Exactly.
- [42:08]
Ashley Kerr
That's such a great like tool to use. As to looking at your other properties, leveraging them to purchase another property, I think sometimes it's easy to get caught up as to like oh well, the cash flow on my duplex, if I take a HELOC out on it, it's my rents won't cover the heloc. Well no, you take the cash flow for the rents from your new property and go ahead and pay that off. Just because the collateral isn't the same doesn't mean that you can't take rent payments to pay off debt that you use to purchase and fund that property. That's for another property and then for.
- [42:43]
Tony J. Robinson
The, for the Plato Carbon property. Ariel, are you short term renting that? Long term, medium term, what's the strategy on that property?
- [42:50]
Ariel Herrera
It's a short term rental and the plan that if I needed to, I could always live in the property.
- [42:56]
Ashley Kerr
I'm trying to look out your window right now and see what's the background there. It's not Mexico.
- [43:02]
Ariel Herrera
No, it's Santa Florida.
- [43:04]
Tony J. Robinson
So just, you know, you being in Florida, building out that team that you need to run a short term rental, you know, in a different country. I've never even done that before. What steps did you take to find good cleaners, good handyman in that local playa market?
- [43:19]
Ariel Herrera
Yeah. Luckily there's already a property management company that was synced with the condo building as most investors are taking the same strategy. So I did Speak with them, asked a few questions, felt comfortable, and they've handled that part on their own. And then I've also Airbnb my property in Tampa. I've taken a similar approach of working for property manager.
- [43:39]
Tony J. Robinson
And let me just, just final question that piece. What, what made you go the property manager route even for the Tampa home, versus doing it yourself?
- [43:46]
Ariel Herrera
Oh, I wanted to really do it myself completely just to save costs. But I had to take a step back and reflect and realize like all the things that I'm doing doesn't end up being worth my time to answer questions, calls to say like clean a property when I could be like coding and developing solutions and helping out other people. So it had to do a give and take. But luckily in that case, with the Tampa, Florida house, I was able to get 15% for property management fee, which is actually like pretty low for the industry standard since a friend and I did it at the same time for our properties.
- [44:23]
Ashley Kerr
Well, thank you so much, Ariel.
- [44:25]
Tony J. Robinson
Yeah, so much good information. I feel like we keep talking, we just got to keep bringing you back because I got so many more questions to ask you about all these.
- [44:31]
Ashley Kerr
I know once we start actually digging into it, we're gonna have a lot of questions, but we are going to turn to your YouTube channel to check those out. So make sure you go into our show notes to find Ariel's YouTube channel to learn more. We do have a rookie reply for you today. If anyone would like to submit a question, you can go to biggerpockets.com reply and insert a question that we may place play on a rookie reply episode or we may ask it to a guest. So today's question is from Laurel. I'm working towards getting my first property and I'm considering going off market to really be able to find a property that is a deal. I see properties posted on Facebook, but because I still have my W2 and work during the day, I tend to be too late to get in contact with the sellers and the deals are already under contract by the time I found the listing. Is there a way to see properties or be notified when properties are posted to social media? Thank you.
- [45:35]
Ariel Herrera
Yeah. So here's where we could use web scraping bots similar to browse AI as well as apify. We can take the link of our Facebook group, plug it in and then screen record how we would capture a deal. What is the information we want to get from that post, Possibly the listing price, maybe an email we want to take from it and then from there we can have it Set up on a daily structure where we get information in a spreadsheet that came from that Facebook group. That way we don't have to go in manually every single day to get that. Or we could even set it up another way where we get automatic notifications every time the page changes based on our parameters. So we could set that up with no code at all, be able to read in data from Facebook groups, put it into a spreadsheet and have that ready to analyze right away.
- [46:22]
Ashley Kerr
Wow, that is super cool because I actually spend a lot of time like on Facebook Marketplace. I can't. I really don't like social media in general, but there actually have been a lot of great off market deals posted on Facebook Marketplace and they do get traction so fast. I've been looking at lake houses and a lot of times people list their lake house in the Facebook group of like, you know, I don't know the example lake association, be neighborly or something like that. And it will post it. People will post it in there or they'll even say, you know, we're interested or thinking of selling our property and stuff. And the, you know, the next day it's already sold, it's gone.
- [47:03]
Tony J. Robinson
I'm, I'm just going down the rabbit hole right now of all the tools that that Ariel sharing with us. So I guess just from my own knowledge. So between Appify and browse that AI, which one do you like more?
- [47:15]
Ariel Herrera
I like browse AI more. However, if there's like a custom site that you want to scrape, say it's a foreclosure website or maybe like something about the county website, probably going the apify way would be easier because you can actually contract out specific freelancers for more like intricate web scraping tasks. So they both serve a purpose, but a little bit differently.
- [47:39]
Tony J. Robinson
Man. Amazing. All right, let's go to our rookie examination. So these, this three, these are the same three questions we ask every single guest. I'm getting caught up on my words because I'm so excited from the tools you're sharing with us. But question number one, Ariel, what's one actionable thing rookies should do after listening to your episode?
- [47:57]
Ariel Herrera
Number one thing is to be data driven. So don't just go into Zillow, select a property at random and say I'm going to invest in that. You can use data driven tools that are for free and readily available. So we could use bard, Google or ChatGPT to ask questions. Start to narrow down what areas you may be interested to invest in. You could also use free resources from Zillow and Redfin. They have posts every single month from their data centers on median listing price, rent prices, sales cuts and that can help you to start to analyze where you want to invest and where has more growth versus areas that are declining.
- [48:38]
Ashley Kerr
What is one tool? Now this is going to be hard to narrow down one tool, software, app or system in your business that you use today.
- [48:47]
Ariel Herrera
So selfishly it would be Coffee Closers, the company that I've co developed with two other folks to help find cash flowing deals in up and coming areas and to tag properties that have opportunity. So we're able to get information from the MLS and aggregate that data to help pinpoint what is the right deal at this moment to be investing in.
- [49:08]
Tony J. Robinson
For our last question for you Ariel. Where do you plan on being five years from now?
- [49:12]
Ariel Herrera
Five years from now I hope to be full time within my real estate startup company. It's accelerating and we're helping people find deals as well. I would like to be financially free where I can help underprivileged communities learn how to program. So one thing that I've taken away from my 10 year part of my career is I've never actually worked with another Dominican data scientist. I'm always the only one which has come with some barriers. But I would love to be able to help others get into the programming space. Unlike other careers where you sometimes need to have some wealth to afford the right degree or have the right network programming, you can just get started instantly. All you need is Internet connection. You could go to a library and use their computer. So as long as you have an interest and curiosity, it's a great field to go into and I'd love to help people there.
- [50:04]
Ashley Kerr
Well Ariel, thank you so much and you have helped a lot of people already on today's episode. So thank you so much for taking the time to share your knowledge and experience and for us to learn about your investing journey. Well Arielle, thank you so much for joining us on this rookie episode. I'm Ashley at Welcome Rentals and he's Tony at TonyJ. Robinson and we'll see you guys for our next episode.